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  Thursday, March 6, 2014 TODAY’S ISSUE:3SECTIONS24PAGES P25  METRO MANILA, PHILIPPINES S1/1-12 Debt ratio better as of Q3 last year   Debt, S1/3  GENERAL GOVERNMENT (GG) debt as a percentage of the econo-my improved as of the third quar-ter of 2013 from a year earlier as the state continued to manage its liabilities.The Finance department, in a statement, placed the obligations at P4.468 trillion as of September 2013, comprising 39.7% of gross domestic product (GDP).The GG-debt-to-GDP ratio is an improvement from the 40.3% recorded a year earlier as well as the 40.6% recorded at the end of 2012.General government debt con-solidates the outstanding debt of the national government (NG) less those held by the Bond Sink-ing Fund, local government units (LGUs), Central Bank Board of Liquidators (CB-BOL) and social security institutions (SSIs).It also excludes intra-sector debt holdings, which comprise NG debt held by SSIs and LGUs, and LGU debt held by the Municipal Development Fund Office.   February inflationlower than expected INFLATION EASED to 4.1% in February, the Philippine Statis-tics Authority (PSA) reported on  Wednesday, giving monetary au-thorities the leeway to keep policy rates steady later this month.The February headline number,  which was traced to lower price hikes for alcoholic beverages, to-bacco and transport, was down from January’s 4.2%. It was, how-ever, significantly faster than the 3.4% registered a year earlier.The result fell within the Bang-ko Sentral ng Pilipinas’ (BSP) 3.8-4.6% outlook for the month and  was lower than the 4.3% median forecast in a  BusinessWorld   poll.Core inflation, which excludes items such as food and energy with  volatile price movements, also  went down to 3.0% in February from 3.2% in January.  Inflation, S1/3  Halted Police block farmers at the gates of the House of Representatives in Quezon City in this photo taken yesterday. The farmers  were protesting the extension of the Comprehensive Agrarian Reform Program and proposed amendments to the Constitution. By Judy Danibelle T. Chua Co   Senior Researcher  REUTERS Philippinesunder pressure over high rice prices Meralco says rates to go down CUSTOMERS of Manila Electric Co. (Meralco) can expect to pay less for power this month, the dis-tribution utility yesterday said, given lower costs incurred from suppliers.“We have good news for our customers. They may see another decrease in the generation charge in their March bills [following a re-duction last month],” the company said in a statement.February’s generation charge  was P5.54 per kilowatt-hour (kWh), down from the P5.67/kWh imposed in January. RICE PRICES in the Philippines have risen for six straight weeks, piling pressure on the government to import more of the national staple to stabilize markets and curb inflation already at two-year highs.While bumper harvests in other countries have stoked a global rice glut, prices in the Philippines have climbed around 4% in the last three months after super typhoon Haiyan devastated key growing regions and as the gov-ernment clamps down on smug-glers looking to avoid hefty taxes.Increased purchases by the Philippines, one of the world’s largest rice buyers, would help ease global oversupply, with Vietnam and Thailand likely to bid aggressively for any new deal from their Southeast Asian neighbor.National Food Authority (NFA) spokesman Rex C. Estoperez confirmed reports that Manila has since late January doubled the amount of rice being released into markets from stockpiles most days, looking to curb price gains.“Private traders are running out of stocks, that’s why we have re-leased [more] rice into the market from our warehouses,” he said.That has further drained NFA stocks that had dwindled to around 275,000 tons at the start of the year – equivalent to eight days’ worth of consumption, nearly half normal levels. Figures for January are due to be released next week.The US Department of Agriculture has already said it expects Philippine imports to hit 1.4 million tons in 2014, which would be the highest in four years. The country has yet to confirm any purchases beyond 500,000 tons it bought from Vietnam in a government-to-government deal in November. Vietnam, the world’s second-biggest rice exporter after India, is traditionally the Philip-pines’ biggest supplier as it usu-ally offers cheaper rice.For Thailand, a deal to sell rice to the Philippines would help offload some of its huge reserves and raise much-needed money to pay farmers that participated in a controversial subsidy scheme.The average retail price of well-milled rice in the Philippines rose a further 1.2% in February from the previous month to P40.12 per kg, and was up 13.7% from a year ago, data from the Bureau of Agricultural Statistics showed on Tuesday.Mr. Estoperez said the NFA had doubled the rice allocated each day to government accredited outlets to 2,500 kg per location. Details on the number of accred- “Based on initial figures, the cost of supply from our power supply agreements, independent power producers and from the  Wholesale Electricity Spot Market have all gone down during the Feb-ruary supply month, which will impact on the March bill,” Meralco said.The generation charge — the cost of power sold to a power dis-tributor — accounts for around 57% of total charges in Meralco’s electricity bill. The rest comprises the distribution charge (17.6%), transmission charge (9%), system loss charge (5%), and taxes and other charges (11.5%).The firm said the March gener-ation rate was still being finalized. Meralco utility economics head  Meralco, S1/3  By Claire-Ann C. Feliciano Reporter  Larry S. Fernandez said the figure could be announced by Monday.“There are no figures yet. There are strong indications that genera-tion charge will be lower than Feb-ruary’s,” Mr. Fernandez reiterated in a text message.Meralco also urged customers to prepare for the summer months as electricity consumption histori-cally goes up during the period.“According to our weather bureau... we could start experi-encing... hot weather starting next month. Given this advisory,  we would like to encourage our customers to practice energy ef-ficiency,” the firm said.Meralco suggested unplugging appliances when not in use and  Rice, S1/3  SECTION 1 2 THE ECONOMY 4-5 OPINION6 CORPORATE NEWS7 PROPERTY 8 AGRIBUSINESS9 WORLD10-12 THE NATION   SECTION 2 1&3 BANKING & FINANCE2 STOCK MARKET4-5 WORLD SPORTS6-7 ARTS & LEISURE8 SPECIAL FEATURE   SECTION 3 1-2 FINANCIAL TIMES3 WORLD BUSINESS4 WORLD MARKETS CONTENTS VOL. XXVII, ISSUE 154 WORLD REVIEW   GENEVAMercedes, Infiniti to cooperate Daimler’s Mercedes and Nissan’s Infiniti plan to pool development of compact cars to cut costs, expand the German car maker’s North American production and broaden the Infiniti lineup, people familiar with the matter said. S3/3   NEW YORK Stocks rise on reduced tensions US stocks rallied on Tuesday, with the S&P 500 at a record high, as fears eased of a confrontation between Russia and Ukraine and Russian President Vladimir Putin said there was no need to use military force in the Crimea region for now. S3/4 505051205190526053305400   485049605070518052905400   STOCK MARKET ASIAN MARKETSMARCH 5, 2014 J APAN  (N IKKEI  225) 14897.63 176.15 1.20H ONG  K ONG  (H ANG  S ENG  ) 22579.78 -77.85 -0.34T AIWAN  (W EIGHTED  ) 8632.93 78.39 0.92T HAILAND  (SET I NDEX  ) 1351.64 5.82 0.43S.K OREA  (K SE  C OMPOSITE  ) 1971.24 17.13 0.88S INGAPORE  (S TRAITS  T IMES  ) 3116.64 11.93 0.38S  YDNEY  (A LL  O RDINARIES  ) 5446.23 46.00 0.85M ALAYSIA  (K LSE  C OMPOSITE  ) 1829.11 2.65 0.15 J APAN (   YEN  ) 102.390 101.810H ONG K ONG (HK DOLLAR  ) 7.760 7.761T AIWAN (NT DOLLAR  ) 30.265 30.291T HAILAND (  BAHT  ) 32.290 32.460S.K OREA (  WON  ) 1070.300 1071.550S INGAPORE (  DOLLAR  ) 1.270 1.271I NDONESIA (  RUPIAH  ) 11580 11590M ALAYSIA (  RINGGIT  ) 3.270 3.276 WORLD MARKETSMARCH 4, 2014WORLD CURRENCIESMARCH 5, 2014ASIAN CURRENCIESMARCH 5, 2014PESO DOLLAR RATE D OW  J ONES  16395.880 227.85NASDAQ 4351.972 74.671S&P 500 1873.910 28.18FTSE 100 6823.770 115.42E URO  S TOXX 50 2957.040 56.27 $/UK POUND  1.6685 1.6702$/E URO  1.3722 1.3753$/A UST   DOLLAR  0.8959 0.8955C ANADA   DOLLAR /US$ 1.1085 1.1084S WISS  F RANC /US$ 0.8878 0.8836 ▲ ▲ ▲ ▲▲▼▼▲▲▲▲ ▼ ▲▲▲▲▲ ▲▼▲▲▲▲▲▲ ▲  INDEX   30 DAYS   TO  M ARCH  5, 2014 OPEN: 6,399.67HIGH: 6,482.15LOW: 6,399.67CLOSE: 6,456.14VOL.: 1.741 BVAL(P): 12.951 B FX OPEN P44.690HIGH P44.680LOW P44.790CLOSE P44.765W. AVE. P44.759VOL. 758.50 M L ATEST  B ID 0900GMT   PREVIOUS CLOSE NET %CLOSE NET CLOSE PREVIOUS 30 DAYS   TO  M ARCH  5, 2014 61.54 PTS .0.96% COMPOSITE ▲▲ WEIGHTED AVE. 5.6 CTVS . By Bettina Faye V. Roc Senior Reporter  Lenten symbol  A devotee with a cross marked on her forehead takes part in the commemo-ration of Ash Wednesday outside a Roman Catholic church in Parañaque, Metro Manila in this photo taken yes- terday. Ash Wednesday, which serves as a reminder that “as a man is dust, so unto dust he shall return,” marked  the beginning of the 40-day Lenten Sea-son in the Roman Catholic calendar. R E  U T  E R  S   By Daryll Edisonn D. Saclag  Reporter   ASEAN-HK trade deal studied Malaysia, Philippines agree to see biz prospects Two more  bidders for SouthwestTerminal PPP Committee set up for petroleum, coal contract transparency  Public hearingsset for plastic materials,steel products Thursday, March 6, 2014 2 /S1  The  Economy  THE PHILIPPINES is studying a possible ASEAN free trade agree-ment (FTA) with Hong Kong, Trade Secretary Gregory L. Do-mingo yesterday said.“We’re conducting studies and scoping,” Mr. Domingo said on the proposed FTA.But, so far, the Philippines is likely to benefit from the proposed trade pact as the balance is in the country’s favor.Data from the Trade depart-ment Web site showed that Phil-ippine exports to Hong Kong reached $4.8 billion in 2012 while imports amounted to $1.5 billion,  with electronics being the top traded goods between the two.“An FTA will reduce the friction in terms of procedures and regula-tory measures thereby speeding up the entry and exit of goods,” said Mr. Domingo.IN ANTICIPATION of the next Philippine Energy Contracting Rounds (PECR), slated to take place this year, the Energy depart-ment has ordered the creation of a committee to ensure a more trans-parent and competitive system of granting the rights to explore and develop the country’s coal and pe-troleum resources.The department, in a circular posted on its Web site, has out-lined procedures to govern the system of awarding petroleum service contracts and coal operat-ing contracts.“This circular shall apply to the determination of the legal, techni-cal, and financial qualifications of applicants, the evaluation of their applications, and the award of cor-responding service and operating contracts for petroleum and coal resources,” the document, dated Feb. 24, stated.The circular creates a Review and Evaluation Committee (REC) to consist of the undersecretary in charge of the Energy Resource De- velopment Bureau, his assistant, and the directors of the ERDB, le-gal services, and financial services. As part of its responsibilities, the REC is tasked to identify the pro-spective coal and petroleum areas  within the country’s territory.“In this regard, the REC shall notify the local government units of the offered areas within their terri-torial jurisdiction, prior to the inclu-THE TARIFF Commission has set a public hearing for petitions to modify tariff lines for plastic mate-rials and steel products, according to a notice published in a newspa-per yesterday.“The Tariff Commission will conduct a public hearing on Mar. 20 at 9:00 a.m. regarding the pe-titions on the tariff modification of polylactic acid (PLA) film and semi-finished products of iron or non-alloy steel. Venue of the hearing is at the Tariff Commis-sion Conference Room, 5 th  floor, Philippine Heart Center Building, East Avenue, Quezon City,” the notice said.Products that will be covered by the hearing are “other plates, sheets, film, foil and strip, of other polyesters” with tariff code 3920.69.00 and “semi-finished products of iron or non-alloy steel” with tariff codes 7207.11.00, 7207.12.90, 7207.19.00, 7207.21.21, 7207.20.29, 7207.20.92, and 7207.20.99.The petition to modify the tariff line on PLA film was filed by plas-tic maker First In Colours, Inc.  which imports the product from Japan. The petition to modify the tariff line on steel products was not immediately provided, how-ever. — Daryll Edisonn D. Saclag  TAXWISEOR OTHERWISE Carlos R. Mateo The right to due process in a tax assessment THE BUREAU of Internal Reve-nue (BIR) has the gargantuan task of collecting P1.4 trillion in tax revenue for 2014. Consequently,  various revenue issuances have been circulated to enhance tax compliance and intensify collec-tion efforts. One such issuance is Revenue Memorandum Circular (RMC) No. 11-2014, clarifying cer-tain issues arising from amend-ments introduced by Revenue Regulations No. 18-2013 on RR 12-99 relative to the tax assessment process. In fine-tuning policy in-terpretations, the RMC raises sev-eral points of interest.Foremost, the RMC operation-ally defines the term “duly autho-rized representative” as referring to Revenue Regional Directors,  Assistant Commissioner - Large Taxpayers Service and Assistant Commissioner - Enforcement and Advocacy Service. Upon re-ceipt of a preliminary assessment notice (PAN) or Formal Letter of Demand/Final Assessment Notice (FLD/FAN) from the BIR, the tax-payer must file a response or pro-test letter with the duly authorized representative who signed the PAN or FAN. Filing with the wrong office/person is fatal to the pursuit as it will render such response or protest as not filed at all. Conse-quently, the findings become final, resulting in the issuance of a FAN (for wrongly filed response to the PAN) or a non-appealable assess-ment (for wrongly filed protest letter to the FAN). Although RR 18-2013 had elimi-nated the need for the BIR to issue a notice of informal conference (NIC) as part of the assessment process, taxpayers still have the option of paying the deficiency taxes and penalties prior to the issuance of the PAN. In such cases,  voluntary payment stops the run-ning of the 20% per annum pen-alty interest. While this provides momentary relief from escalating tax liabilities, the option offers no guarantee that the findings of the Revenue District Office (RDO)  will be sustained by the reviewing office (i.e., Regional Office, Legal Service or equivalent office). In other words, early settlement of deficiency taxes may not provide any benefit if the initial findings are set aside and a new assessment is issued by the reviewing office that is different from the earlier recommendations by the RDO. Further, the RMC states that “a final demand letter for payment of delinquent taxes may be considered a decision on a disputed assess-ment.” Although such statement finds basis in certain court deci-sions, it would only seem fair to tax-payers if the BIR will unequivocally state that the “final decision” will follow the specific form of a Final Decision on Disputed Assessment (FDDA) as provided in Section 3.1.5 of RR 18-2013. This would dispel any confusion on whether a notice is considered an FDDA or not. Under the rules, once an FDDA is issued by the BIR, the taxpayer has only 30 days from receipt thereof to file an appeal. Under RR 18-2013, “If the tax-payer within 15 days from date of receipt of PAN responds that he/it disagrees with the findings of de-ficiency tax or taxes, an FLD/FAN shall be issued within 15 days from filing/submission of the taxpayer’s response, calling for payment of the taxpayer’s deficiency tax li-ability, inclusive of the applicable penalties.” While the non-obser- vance of the 15-day period for the issuance of the FAN shall not affect its validity, the RMC provides that the revenue officer who caused the delay shall be subject to adminis-trative sanctions. The foregoing provision under the RR denotes that any response to the PAN will automatically be denied and, thus, effectively negates the pre-assessment notice stage. This appears to violate the spirit of the due process requirement under Section 228 of the Tax Code, which requires the BIR to first notify the taxpayer of the findings and to re-quire a response. If the taxpayer fails to respond, the BIR shall issue a FAN based on said findings.It is also worthy to state that, in a number of cases, the courts have held that the 15-day period for the taxpayer to formally reply to the PAN is mandatory, and the non-observance thereof is con-sidered a violation of due process. Thus, the CTA has, on occasion, ruled against the BIR and nullified assessments where the FAN was issued without waiting for the tax-payer’s reply to the PAN or before the lapse of the 15-day period.Though the current assessment process still gives taxpayers a 15-day period to respond to the PAN, the fact that any such response  will automatically be denied with the issuance of the FAN another 15 days after, effectively makes the taxpayer’s response a mere formality. One could say that the grant of the 15-day period is with-out any real value and thus goes against the spirit of the due pro-cess requirement under our laws.Fundamentally, “No person shall be deprived of life, liberty and prop-erty without due process of law, nor shall any person be denied the equal protection of the laws.” (Article III, Section I of the Bill of Rights of the Philippine Constitution).The power of taxation must be exercised with restraint since it deprives a taxpayer of his proper-ty. Thus, in Roxas vs. Court of Tax  Appeals, G.R. No. L-25043, dated  April 26, 1968, the Supreme Court held: “The power of taxation is sometimes called also the power to destroy. Therefore it should be ex-ercised with caution to minimize injury to the proprietary rights of a taxpayer. It must be exercised fairly, equally and uniformly, lest the tax collector kill the ‘hen that lays the golden egg.’ And, in order to maintain the general public’s trust and confidence in the Gov-ernment, this power must be used  justly and not treacherously.”The constitutional right to due process has primacy over the power of taxation, such that “In balancing the scales between the power of the State to tax and its inherent right to prosecute per-ceived transgressors of the law on one side, and the constitutional rights of a citizen to due process of law and the equal protection of the laws on the other, the scales must tilt in favor of the individual, for a citizen’s right is amply protected by the Bill of Rights under the Con-stitution. Thus, while ‘taxes are the lifeblood of the government’, the power to tax has its limits, in spite of all its plenitude.” (CIR vs. Metro Star Superama, Inc.)Based on the foregoing, it is sin-cerely hoped that the BIR would revisit the provision of RR 18-2013 (as reiterated in RMC 11-2014) and consider the arguments raised by the taxpayer in response to the PAN, instead of issuing an outright denial by the issuance of a FAN. In creating consonance, there is  wisdom to reconciling conflicting interests. While citizens must pay taxes without much hindrance, the authority to tax must also be  wielded with utmost consider-ation for the common good. The author is a director at the tax services department of Isla Lipana & Co., the Philippine member firm of the PwC network. Readers may call (02) 845-2728 or e-mail the author at for questions or feedback. The views or opinions presented in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The firm will not accept any liability arising  from the article. BUSINESSMEN from Malaysia and the Philippines have agreed to ex-plore investment opportunities in each other’s palm oil, rubber, infra-structure, and tourism sectors, Trade Secretary Gregory L. Domingo yester-day said.These interests were expressed at business matching activities held last week in Kuala Lumpur, which co-incided with President Benigno S.C. Aquino III’s state visit there, the Trade official noted.In one of the business meet-ings, Mr. Domingo said government officials met with representatives of Malayan Banking Bhd (Maybank), re-sort operator Genting Malaysia Bhd, and low-cost airline AirAsia Bhd. TWO more firms are bidding for the P2.5-billion Integrated Trans-port System (ITS) Southwest Terminal Project under the De-partment of Transportation and Communications (DoTC).The DoTC’s Special Bids and  Awards Committee on Tuesday released General Bid Bulletin No. 07-2014, which added State Properties Corp. and Expedition Properties Corp. to the nine com-panies vying for the public-private partnership (PPP) project.The second of two rounds of meetings was initially to take place Mar. 17-19 but was extended for the new entrants, which will both be present on Mar. 20.The bid bulletin also required participants to submit any ques-tions three calendar days before their scheduled conference with the DoTC.Bid submission deadline and opening of qualification docu-ments have been set for May 15,  with scrutiny of the latter occur-ring within ten days of submission.Technical proposals will be opened in June and evaluated  within 20 days of submission. Fi-nancial proposals will also be opened that month and evaluated in 15 days.The Notice of Award (NoA) will be released within five days from the winner’s selection.Upon receiving the NoA, the  winning bidder must prove com-pliance before signing the Date of Concession Agreement.The nine other participant com-panies, in order of scheduled meet-ings, are D.M. Wenceslao and As-sociates, Inc.; the co-bidding Ayala Land, Inc. and Ayala Corp.; Metro Pacific Tollways Corp.; San Miguel Corp.; Vicente T. Lao Construction; Egis Projects SA; Robinsons Land Corp.; Filinvest Land, Inc.; and Megawide Construction Corp.The ITS Southwest Terminal Project will be built southwest of Metro Manila near the Manila-Cavite Expressway and will serve Manila-bound commuters from Cavite. According to the PPP Center  Web site, previously awarded contracts for PPPs as of Feb. 14, 2014 are the P2.01-billion Daang Hari-SLEX Link Road Project, P16.28-billion PPP for School Infrastructure Project Phase I, P15.52-billion NAIA Expressway Project, P3.86-billion PSIP Phase II, P5.69-billion Modernization of the Philippine Orthopedic Center, and the P1.72-billion Automatic Fare Collection System. —  Anton Joshua M. Santos  According to the Hong Kong government’s Web site, the FTA is expected to cover elimination of tariff and non-tariff barriers; preferential rules of srcin; lib-eralization of trade in services; liberalization, promotion and pro-tection of investment; and dispute settlement mechanism.Hong Kong, according to the  ASEAN (Association of Southeast  Asian Nations) Web site, initially proposed to join the ASEAN-Chi-na FTA in 2011.But, Mr. Domingo said the 10-member bloc counter-pro-posed a separate trade pact with Hong Kong last year.“At that time, Hong Kong was requesting accession into ASEAN-China FTA. But we thought it is better to negotiate a separate one since accession is more difficult,” the Trade official said.Since then, he said, ASEAN member-states — Brunei, Cam-bodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Sin-gapore, Thailand, and Vietnam — have started their own studies on the proposed trade pact. Aside from the FTA with China, the bloc also has trade agreements  with Japan, Australia, New Zea-land, South Korea, and India.Mr. Domingo said ASEAN and Hong Kong have not yet set a time-table for the agreement.The Trade official also said he does not see the Manila hostage crisis involving Hong Kong na-tionals in 2010 as a roadblock. “For me, it’s business as usual,” he said. ASEAN is Hong Kong’s second largest trading partner after China for trade in goods. — Daryll Edi-sonn D. Saclag  “We invited Maybank to look at shariah banking in the Philippines. They said they will look at it. For AirAsia, they said they will study very seriously a Kuala Lumpur-Davao link. For Genting, we requested them to make an all-Philippine-islands tour, and they said they will consider it. They also expressed interest in palm oil plantation in Mindanao,” said Mr. Domingo.Investor interest in the Philip-pines is expected to increase further once the Comprehensive Agreement on the Bangsamoro be-tween the government and the Moro Islamic Liberation Front is signed this year, he added.The Trade chief also said that the Philippines offered Malaysia assis-tance in accrediting halal products.Philippine exports to Malaysia reached $1.017 billion in 2012 while imports amounted to $2.503 billion. sion to the PECR,” the circular read.The committee will also have the obligation to examine, evaluate and review the technical, financial, and legal capabilities of project ap-plicants and, after which, recom-mend to the Secretary the award of contracts.It is also the REC’s responsibil-ity to “[r]esolve issues in relation to the legal, technical and financial capabilities of applicants, includ-ing motions for reconsideration.”The circular also detailed the procedure for awarding petroleum service contracts and coal operat-ing contracts.Since the REC will determine the prospective areas, it should also prepare the PECR documents  with description of available data.Such data should include the location map and technical de-scription of areas being offered and schedule of activities for the PECR. A pre-submission conference for PECR applications should be scheduled to discuss relevant rules and entertain clarifications from prospective applicants.Submission of applications should be based on the existing guidelines.The evaluation should be based on legal qualification using a pass or fail criterion; work program (40%); technical qualification (20%); and financial qualification (40%).“The highest ranked applicant  who meets the... requirements shall be selected,” the circular read.The legal department and ERDB should prepare the final contract that will be awarded. Applicants, within seven days from the receipt of the award no-tice, should pay necessary fees and charges.State-owned PNOC Exploration Corp. (PNOC-EC) has been given a reserved option to acquire a maxi-mum of 10% interest in a contract involving one or more Filipino participants and 15% for a contract  with no Filipino participant.“All rights, privileges, benefits, costs, expenses, obligations and liabilities of PNOC-EC shall be in proportion to its participating interest in the proposed service contract,” the circular noted.Previous contractors with can-celled to terminated contracts due to outstanding work and financial obligations are no longer allowed to join the PECR.The circular will take effect fif-teen days following its publication in two newspapers.Under the PECR 4 — which took place last year — the Energy department offered 38 coal and 15 petroleum blocks for exploration and development.The auction received 69 bids for 28 coal contracts and 20 offers for 11 petroleum contracts, but the department only awarded 11 coal and four petroleum contracts. — Claire-Ann Marie C. Feliciano  TARIFF lines for steel products are up for possible modification.  Thursday, March 6, 2014  S1/3 Inflation,  from S1/ 1 Year-to-date inflation averaged 4.2%, still within the BSP’s 3-5% target for 2014.Central bank Governor Aman-do M. Tetangco, Jr., in a text mes-sage to reporters, said the latest re-sults would “help keep the average inflation over the policy horizon  within the government’s [3-5%] target range.”Moving forward, Mr. Tetangco said monetary authorities would “continue to monitor global de- velopments,” adding: “We will also be watchful of trends in domestic liquidity and lending.”He noted that the policy-mak-ing Monetary Board would make “adjustments to policy levers as appropriate to ensure that liquid-ity continues to be channeled to productive sectors of the economy and that inflation expectation re-main well-anchored.”During its first policy meet-ing for the year last Feb. 6, the Monetary Board kept the BSP’s overnight borrowing and lending rates at record lows of 3.5% and 5.5%, respectively. The inflation forecast for this year, however, was trimmed to 4.3% from 4.5% while that for 2015 was hiked to 3.3% from 3.2%.The BSP has kept its overnight borrowing and lending rates at 3.5% and 5.5% since October 2012. The rate on all special deposit ac-count (SDA) maturities has been steady at a uniform 2% since June 2013.Economists were in agreement that the central bank was likely to keep key rates steady at its March 27 policy-setting meeting. Tight-ening, they said, could start in the second half of the year.“We expect both the policy overnight rate and the special de-posit accounts rate to stay steady through the first half, as the central bank has enough space to main-tain a wait-and-see approach until its third policy rate meeting,” said Eugenia Fabon Victorino, ANZ economist for the Asia-Pacific.“We forecast the tightening cycle to commence by the second half and expect the interest rate to rise by at least 50 basis points (bps) by yearend,” she added.Jeff Ng, economist at Standard Chartered Bank in Hong Kong, agreed, adding that domestic price pressures remain in food and en-ergy.“We expect the central bank to keep rates unchanged in the first half as inflation remains man-ageable. Nonetheless, we expect a 25-bps hike in the third quarter and another 25 bps in the fourth quarter, as price pressures remain in food and energy, especially with recent uptrends in international food and crude oil prices,” he said.Gundy Cahyadi, economist at DBS Bank Ltd., meanwhile, said inflation was coming in “below expectations” given that some of the cost-push factors weren’t as strong.“We are re-looking at our infla-tion forecast for the year and we maintain our stance that the cen-tral bank will continue to stay put for now. But we still expect them to raise rates by at least 50 bps by yearend to prevent the economy from overheating,” he said.The PSA, meanwhile, said in a statement that the February infla-tion reading was due to “slower annual movements registered in the indices of alcoholic beverages and tobacco and transport.”Prices of alcoholic beverages and tobacco rose by 7.1% in Febru-ary, easing from 17.6% in January,  while transport costs rose by 1.0%, down from 1.2%.Citi economist Jun Trinidad noted “temporary relief from up-side inflation risk coming from easing excise tax effects on ciga-rettes and alcoholic beverages.”Prices of cigarettes and al-coholic beverages rose by high double digits last year after excise taxes were adjusted in January 2013. Taxes will be adjusted again in 2015. The heavily weighted food and non-alcoholic beverages index, meanwhile, rose by 5.5%, un-changed from the previous month. The food alone index, however, accelerated to 5.9% from 5.7%. Prices of rice, milk, cheese, eggs, oils and fats, fruits, sugar, jam, honey, chocolate, and other food products rose at a faster pace.Higher increases were also recorded in the indices of cloth-ing and footwear; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine maintenance index; and health. — with a report from    A. R. R. Gregorio ited outlets in the Philippines were not immediately available.He also noted that government moves to crack down on smugglers had pushed prices higher. Philip-pines’ customs have been on a drive to curb smuggling that has been rife as some importers look to avoid a whopping 40% duty on private ship-ments of rice and to get around a quota system.Critics have long argued the tariff should be reduced to encourage legal imports, but President Benigno S. C. Aquino III’s government says it is necessary to support local farmers. — Reuters Rice,  from S1/ 1 Debt,  from S1/ 1 “Before President Benigno S. C. Aquino III took office, GG debt to GDP was 44.3% in 2009. By reducing government debt, we are attempting to ensure the sus-tainability of our recent economic resurgence,” Finance Secretary Cesar V. Purisima was quoted as saying in the statement.“The Aquino administration continues working towards the  virtuous cycle of good govern-ance through proactive liability management. As a result of these initiatives, we are creating fiscal space in the budget to increase investments in our people, our key driver of economic growth,” he added.The Finance department said the annual decline was mainly due to the national government’s pur-chase of more debt from domestic sources “at cheaper interest and longer maturities.”Of the total NG debt as of the third quarter, 66% came from do-mestic sources and 34% from for-eign creditors — an improvement from the 61:39 mix recorded in the comparable 2012 period.This was likewise reflected in the overall GG debt mix, which in the period was at 59:41 in favor of domestic sources versus the 51% domestic and 48% foreign mix re-corded as of September 2012, the department said.“A decline in Local Government Unit debt to P70.7 billion, or 0.6% of GDP, as compared to the Sep-tember 2012 level of P71.3 billion, or 0.7% of GDP, also contributed to the decline in GG debt,” it added.Debt as a percentage of GDP is a measure used by many debt  watchers to assess the creditwor-thiness of sovereigns. Meralco,  from S1/ 1 setting a timer for air conditioners before bedtime so that the units  would not have to run the entire night.“In buying appliances, check and compare the energy efficien-cy factor (EEF) of the different brands,” it added, explaining that a higher EEF means better energy efficiency.The utility’s announcement of possible lower March generation charges comes in the wake of com-plaints on a bill format that has caused confusion.The Energy Regulatory Com-mission has asked Meralco to ex-plain the format, which included components such as the “Balance from Previous Billing,” “Total Cur-rent Amount” and “Total Amount Due.”The “Balance From Previous Billing” covers unpaid amounts relating to a planned rate hike that is being reviewed by the Supreme Court. A P4.15/kWh increase sup-posed to have been implemented in tranches beginning last Decem-ber has been ordered shelved by the high court, which is hearing a complaint filed by party-list legis-lators and consumer groups. An additional P5.33/kWh rate hike, also to be charged in stages, is being sought by Meralco, which says that this covers unpaid bal-ances to power suppliers.Meralco has said that it “has no intention to collect the deferred amount,” which it claimed was included in the bill only for “trans-parency purposes.”“In recognition of the feed-back we got from our customers, though, we will make it clearer in their March bills as to which amount they will only have to pay. In addition, the deferred amount  will no longer be included in the ‘Total Amount Due’,” the company said.Meralco also said that only 7% of its 5.5 million customers received bills with the deferred amount itemized, adding that those who paid in full would be refunded.Meralco’s controlling stake-holder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in  BusinessWorld  .  BERKELEY— Readingthroughthejust-released transcriptsoftheUSFederalReserve’s FederalOpenMar-ketCommittee(FOMC)meetings in2008,Ifound myselfaskingthesameoverarchingquestion:WhataccountedfortheFOMC’sblinkeredmindsetascrisiseruptedallaroundit?Tobesure,someunderstoodthetruenatureofthesituation.AsJonHilsenrathofthe WallStreetJournal  pointsout,WilliamDudley,thentheexecutivevice-presidentoftheNewYorkFed’sMarketsGroup,presented staffresearchthatsought,politelyandcompellingly,toturntheprinci-pals’attentiontowhereitneededtobefocused.AndFOMCmembers JanetYellen,DonaldKohn,EricRosengren,andFredericMishkin,along withtheBoardofGovernorsinWashingtonclearlygotthemessage.ButtheFOMC’sothereightmembers,andtherestoftheseniorstaff?Notsomuch(albeittogreatlyvaryingdegrees). AsIreadthetranscripts,Irecalledthelonghistorydatingbackto1825,andbefore,inwhichtheuncontrolledfailureofmajorbankstriggered panic,aflighttoquality,thecollapseofassetprices,anddepression.ButthereintheFOMC’smid-September2008report,manymembersexpress self-congratulationforhavingfoundthestrengthtotaketheincompre-hensibledecisionnottobailoutLehmanBrothers.Ifindmyselfthinkingbacktothewinterof2008,whenIstole—and usedasmuchaspossible—anobservationbytheeconomistLarrySum-mers.Intheaftermathofthehousingbubble’scollapseandextraordinary lossesinthederivativesmarket,Summersnoted,bankswouldhavetodiminishleverage.Whileitwouldnotmattermuchtoanyindividualbank  whetheritdidsobyreducingitsloanportfolioorbyraisingitscapital,itmatteredverymuchtotheeconomythatthebankschosethesecond.Eventoday,Icannotcomprehendthen-NewYorkFedPresidentTimo-thyGeithner’sdeclarationinMarch2008that,“itisveryhardtomakethe judgmentnowthatthefinancialsystemasawholeorthebankingsystemasawholeisundercapitalized.”Geithner’sviewatthetimewasthat“thereisnothingmoredangerous...thanforpeople...tofeed...concernsabout...thebasiccorestrengthofthefinancialsystem.”Ofcourse,wenowknow thatindifferencetosuchconcernsturnedouttobefarmoredangerous.Likewise,Ilookathistoryandseethatitiscoreinflation(whichstrips outvolatilefoodandenergyprices),notheadlineinflation,thatmatters forpredictingfutureinflation(evenfutureheadlineinflation).ThenIread declarationslikethatbyDallasFederalReservePresidentRichardFisher,thatdangerousinflationarypressurewasbuildingduringthesummerof 2008,andIfindmyselfataloss.Someofthe2008-eramindset(mostofit?)mostlikelystemmedfromthe fact that there are things that are very real and solid to monetary economists.Wecansee,touch,andfeelhowafinancial-deleveragingcycledepressesaggregatedemand.Weknowthatthisyear’schangeinaninertial price,suchaswages,tellsusalotaboutnextyear’swagechanges,whilethis year’schangeinanon-inertialprice,suchasoil,tellsusnexttonothing. Andweknowhowherdbehaviorbyinvestorsmeansthatasinglesalientbankfailurecanturnafinancialmaniaintoapanic,andthenacrash.Butothersdonotsee,touch,andfeelthesethings.Fornon-economists,theyaresimplyshadowsonthewallsofacave.Thatdistinctionwaslessrelevantinthepast.TheFedofoldusuallyhad acharismatic,autocratic,professionalcentralbankeratitshead:BenjaminStrong,MarrinerEccles,WilliamMcChesneyMartin,PaulVolcker,andAlanGreenspan.Whenitworked—whichwasnotalwaystrue—thechairruled theFOMCwithanironhandandwiththenear-lockstepvotingsupportof thegovernors.Theviewsoftheothermembers—withtheirvaryingback-groundsinbanking,regulation,andelsewhere—wereoflittleornoconcern.But former Chairman Ben Bernanke’s FOMC was different. It was collegial,respectful,andconsensus-oriented.Asaresult,therewasadeepdisconnect between Bernanke’s policy views, which followed from his analysesinthe1980sand1990softheGreatDepressionandJapan’s“lostdecades,”andtheFOMC’sfailurein2008tosensewhatwascomingandtoguardagainstthemajordownsiderisks.SoI find myselfwondering: Whatifthosewhounderstood thenatureof the crisis and those who did not had been compelled to make their cases toBernankeinprivate?IfBernankehad thensaid,“This is whatwearegoingtodo,” rather thanseekingconsensus — thatis,ifBernanke’s Fed had beenliketheold Fed — would better monetary-policydecisions havebeenmadein2008? (Theauthor,aformerdeputyassistantsecretaryoftheUSTreasury,is ProfessorofEconomicsattheUniversityofCaliforniaatBerkeleyandaresearch associate at the National Bureau of Economic Research. www. Thursday, March 6, 2014 4 /S1 Thursday, March 6, 2014  S1/5 OpinionOpinion Revisiting  the Fed’s crisisTransportation mobility and sustainability  Game play remains at heart of changing lifestyles THE VIEWFROM TAFT Brian C. Gozun  ASwegoonour dailygrind ofmov-ingfromour homes toour offices,thebig“T” thatis traffic has beengettingworsebytheminute,by thehour,bytheday,and throughtheyears.Thegovernment,throughtheMetropolitanManila DevelopmentAuthority(MMDA) and other departments,has been workingfull-timeand overtimetoalleviatethis seeminglyendless agonyoftraffic.Thenewlycoined term“carmageddon,” combin-ing“car” and “Armageddon,” is trulyappropriatefor thedeathof  vehicular movementalongEDSA and other major thoroughfares inthemetro.Ifvehicles docometoa completehalt,whatwould happentopeoplelikeus whocommutehours per dayusingvarious modes fromcars thathavenever experi-enced goingbeyond 10kilometers per hour totrains thathavenever ever experienced under-capacity intheir lifetimes?For commuters, traffic goes beyond the huge parking lot thatEDSA has become. It is all aboutthe ability to move from our homes to our destinations withease,comfort,securityand,aboveall, satisfaction. Our ability to doour duties toour families,clients,and friends as we move from oneplacetoanother rests oninclusivemobility, which is a holistic con-ceptthatpromotes themovementfrom a car-centric paradigm tomore people- and environment-friendlytransportationmodes.Dr. Danielle Guillen, an expertontransportationpolicyand plan-ning from the Ateneo Institute of Sustainability, espouses inclusivemobility through the concept of sustainabletransportation,which“entails expansionoflevels ofser- vice,diversificationoftransporta-tion modes, a balanced land-useplan, more efficient use of energy and low polluting technologies,reduction of health and safety risks, reduction of environmental impact and integrating the con-cept of social equity and citizentransportation.”The definition of sustainabletransportation is similar to our definitionofsustainabilityinbusi-ness, which espouses balance notonly in our financials but also inour relationships with our stake-holders, community, country,and Mother Earth. The start of this so-called “carmageddon” has made us more aware of the need to understand the trade-offs that we make as commuters. Should  we take our cars and be part of thethousands ofcars idlingalongroads that were once highways inthe not-so-distant past? Should  we take the LRT and MRT in the weehours ofthemorningevenifitis notyetSimbangGabi (midnightmass) season? Should we walk or evencycletoworkevenifitmeans losing thousands of pesos on our glutathioneinjections and whiten-ingsoaps,creams,and whatnots?The risks that we take as wemove from the security of our homes to the insecurity of our streets entail the need for trans-portationsolutions thatgobeyond the construction of roads, whicheventuallyleads totheincreasein vehicles. Laws, ordinances, rules,and regulations that have beentried and tested (and arestill beingtweaked) by the MMDA and theCityofManila will all gotowasteif we do not do our small yet im-pactful share in alleviating traffic congestion.These are the things that ir-ritate me the most. As a pedes-trian, I pray my rosary every timeI cross our intersections becausepedestrians and drivers alike havebecome terribly colorblind. A few seconds of waiting will not hurtas we wait for the traffic lights tochange color! Also, LRT and MRT management can make the level of service in our trains a little morehumane. Even sardines would not want to squeeze themselves into our sauna-like train carriages packed with sweating passengers  who can barely breathe. And for our vehicle-driving commuters,it would be great if we could car-pool with friends and family alikeand choose wisely when to useour cars over cabs. Let us not text while driving, and let us have hap-py thoughts to avoid road rage.Heavytraffic,sad tosay,is now the norm in our metropolis, butlet us all do our part in trying toalleviate congestion through sus-tainabletransportation. All aboard,please! (The author is an associate professor of the Decision Sciencesand Innovation Department of the Ramon V. Del Rosario College of  Businessof DeLaSalleUniversity.  Although the author is from the green school while Dr. Guillen is fromtheblueschool, bothuniversi-ties adhere to the principles that  Mother Earth’s cover must forever be green and her skies and oceans foreverbeblue. Thegreen guycan be reached at The views expressed aboveare the author’s and do not neces-sarilyreflecttheofficial position of  DLSU, itsfaculty, and itsadminis-trators.) SANFRANCISCO— For almostas longas therehavebeencomput-ers,therehavebeenpeopleintentinplayinggames withthem.Since young programmers atthe Massachusetts Institute of Technologycameupwith“Space- war!” some50years ago,theworld ofvideogames has exploded intoa multibillion-dollar industry.“From the earliest days of computer, these folks went after computer graphics and wentafter  videogames,” Gartner consumer technologies research director BrianBlautold AFP.“Peopleenjoygames,and mar-rying the concept of real-world games witha computer and inter-activityis reallypowerful.”Gartner predicts the world- wide videogame market combin-ing console, online, mobile, and personal computer offerings will expand from$101billionthis year to $111 billion next year and top$128billionin2017. Whileplayonhigh-performancedesktop or laptop computers has long captivated hardcore video-gamelovers,rival consolemakers Microsoft,Sony,andNintendohavesuccessfully turned games intostandard family household enter-tainmentduringthepast20years, with Xbox, PlayStation and Wii hardwarerespectively. CONSOLE KINGS New-generationXbox Oneand PlayStation4consoles released latelastyear arecredited withbringingnew lifetoa sectionofthemarketunder pressurefromthepopular-ityofsmartphones and tablets.But Nintendo’s latest console, Wii U, has had trouble gainingtractionamongplayers.Console kings are also the bignames behind titles for play ontheir hardware, but third-party studios such as Activision Bliz-zard, Electronic Arts, Ubisoft,Disney Interactive, and Warner Brothers are established titans ingamesoftware. While movie-like immersioninplayand broadeningentertain-ment menus to include streamed films and television shows has consoles provingtheir worth,mo-bilegames areonfire.There are more game “apps” for smartphones or tablets thanany other type of mini-programfor mobiledevices and itis thetoprevenue-producing category, ac-cordingtoGartner.  APPSON FIRE Smartphones and tablets havelured players fromdedicated handheld mo-bilegamede- vices that,for a time,werea hitwithpeoplewho wanted toplayonthego.Mobile game revenues cancomefrompeoplepayingtodown-load “apps” or fromin-gametrans-actions inwhichplayers poney-upto advance more quickly throughlevels or buy abilities or digital items.Britain-based King Digital En-tertainment, which is behind the“Candy Crush Saga” game craze,is set for a keenly anticipated stockmarketdebut.Other sizzlingmobile game firms include Rovio, Wooga,and Supercell.Even Zynga, which pioneered online social games only to getcaught on its heels when players turned tomobiledevices,is notoutfor thecount.The San Francisco company is intent on reviving a lineup thatincludes “Farmville” and “Words  WithFriends” alongwitha popu-lar Zynga Poker title.Mobile game revenue globally is settonearlydoubleinthenexttwoyears to$22 billion,accordingtoGartner. SPECTATOR SPORT  A newand flourishingeSportcat-egoryinwhichvideogameplay is spectator sportcompletewithcommentators,sponsors and ads has yettobefactored intotheglobal videogamerevenuemodel.“Computer graphics representa newinteractionparadigm,” Blausaid.“Today’s high-detail graphics and more immersive experiences arealmostsciencefiction-like.”Innovations in game hardwareand softwarefromInternet-linked eyewear toaugmented realitypro-grams areexpected tofuel increas-ingdemand for play. Too late  the (justice) hero STRATEGIC PERSPECTIVE René B. Azurin ISSENATEPresidentFranklinDrilonalreadytryingtocreatesomedistancebetweenhimself and his boss,PresidentAquino,perhaps tore-insinuatehimself intotheconversationonviablepresidential or vice-presidential candidates for the2016elections? When,lastweekend,hepublicly assailed theSandiganbayan’s “slowdispositionofcases,” hewas clearlycontradictingpartymate Aquinowhoboasted recently,“Wearemovingcloser toobtainingtruejusticethroughthecases filed againstthosewhohavecommitted crimes...(and) Wearedestroyingthelastbastions ofcorruption.” Sinceobservers had jeered thePresident’s boasts as patentlyri-diculous,itmaybethatMr.Drilonis nowtryingtocurryfavor witha public openlyfrustrated atthetai chi-likemovementofjusticeinthis country.Maybe Mr. Drilon wants to paint himself as the justicechampion. The hero who rides into town and, with six-guns blazing, brings back law and order to the lawless frontier.The long-sought answer to thepeople’s prayers. If so, it’s nota bad image to cultivate for anaspiring president or vice-presi-dent. The problem is persuadingpeople that the image is evencredible. And, as far as that’s concerned, one could reason-ably argue that in some 28 years in the public service — as sena-tor, Senate president (twice),and Justice secretary (twice) — Mr. Drilon has had more thanenough chances to do the save-the-people bit and implementhis “Justice  Agad  ” (justice atonce) vision. But, in fact, as a long-time member of the Sen-ate — and several years as its leader — it is hard for him toclaim not to have at least sanc-tioned — assuming, charitably,that he wasn’t actually a part of — all the pork barrel scams and influence peddling going on all around him all these years.Mr. Drilon is quoted as say-ing, “If we are to outrun graft and corruption, it is imperative that we resuscitate and reconditionour existing prosecutorial and adjudicatory institutions againstthis opponent.” Sure. Of course.But many reform advocates havebeen saying the same thing for years. And those in positions of power to institute meaningful improvements to our law en-forcement and legal system — likeMr. Drilon — have typically, over the years, just played deaf, dumb,and suspiciously blind.If anything can illustrate viv-idlythegapingholes inour justicesystem, it is the pork barrel scaminvestigations that the President(strangely) imagines must dem-onstratehis administration’s com-mitment to a campaign againstcorruption and to a daang matu-wid   (straight path). Eight months after itwas firstexposed bya news-paper (the  Inquirer   ) — note,notby a lawenforcementbodyor justiceofficial — there has been virtually nothing happening in the subjectcaseother thanpress conferences and televised hearings intheSen-ate that are no more than occa-sions for posturingsenators tolay outfor thepublic their intellectual shortcomings.Irritatingly,moreover,thecur-rent Justice secretary, Atty. Leila de Lima, maybe mirroring her boss, boasts in media statements of “slam dunk evidence” and yetcannot explain why no one has thus far been arrested, much less COMMENTARY J. Bradford DeLong  China, S1/ 5  China  fromS1/ 4  ANSHUN,China — After a lifetimeoffarmingand mininginthehills ofsouthwestChina,ZhangZongfu was thrustintosubsidized housingcloser totown,and intoa monu-mental urbanizationdriveaimed atboostinggrowth.Zhanglikes his newlybuiltdigs, whichareeffectivelyfree,butcity lifehas beenharder tosettleinto.The 48-year-old villager lacks jobskills or prospects — puttinga ma- jor wrinkle in Beijing’s blueprintfor prosperity.“WithoutworkI’mintrouble,” he said in his living room, over-lookingneatrows offreshlypaint-ed apartmentblocks ontheedgeof  AnshuninGuizhou,oneofChina’s poorestprovinces.“The house is fine. But if youhave a house to live in and can’tfeed yourself, what’s the point?” heasked.Zhang’s situation illustrates thedevelopmental dilemma facingChina as its rubberstamp parlia-ment, the National People’s Con-gress,meets this week.Economic growth and risingprosperityarekeytotheCommu-nistParty’s claimtoa righttorule,and the legislators will put their imprimatur onreforms it has promised.By 2030, projections say a bil-lion Chinese will live in cities — up 300 million from now, nearly equal to the population of theUnited States.Beijing hopes that if the urbaninflux earnand spend moreitwill both reduce poverty faster and helpswitchtheeconomytogrow-ing through consumption rather thaninvestment.Butiflocal governments simply build the shells of cities with noeconomythatformer farmers canparticipatein,theymaysimplybedigging a deeper investment hole— and creatingneighborhoods full ofidleinhabitants.“This is certainly somethingI’ve seen in other places, whereyou have people cut off from the waythey’vemadetheir livingtheir entire life. Then there’s nothingreallythattheycando,” said TomMiller,theBeijing-based author of  China’sUrban Billion. “And if this happens ona grand scaleacross the country, then poten-tiallyyou’rebuildingupenormous problems,” hesaid.“That’s thefear,ifyoulook10to15years ahead.”Guizhou is constructing 180sites toresettletwomillionpeopleby 2020, surpassing even the 1.3million relocated for the vastThreeGorges Dam.But while the first batches of  villagers have been taken to their newwhite-trimhomes inAnshun,it has not yet taken the country-sideoutofthevillagers.Several said theymissed these-curity of growing their own food.Justincase,Zhangand his wife—  who heaved a basket packed with vegetables upfour flights ofstairs to their apartment — have filled one of their three bedrooms withgiantsacks ofrice. NOWAYTOGOBACK Under Xi JinpingtheCommunistpartyhas promised tospeed upchanges toa “hukou” residency systemwhichdenies rural incom-ers equal access toservices suchas schoolingand healthcare.But specifics are still pendingand cities, especially large and crowded ones,haveresisted liftinghukou restrictions and spendingmoreonmigrants.Experts call suchreforms criti-cal, as a social safety net would encouragemigrants tospend moreand better education would im-prove the prospects of the nextgeneration.Relocated villagers in Anshuncomplained thatgovernmentoffi-cials promised compensation and  jobs but, since the move in June2013, have only provided a few days’trainingonsmarter farming. ANALYSIS China’s urban drive risksdigging economic hole tried and convicted. Further, for the last five months, the Office of theOmbudsmanhas been“inves-tigating” theevidencebuthas yettofilea caseagainstthoseaccused in this massive plunder of thepeople’s money.My, my. The Filipino peopleare well in their rights to throw up their hands in sheer exaspera-tion and ask, is this slow motion,snail-paced, tai chi-like move-ment at all appropriate for theadministration of justice in a society? And, are the drawn-out,protracted, purported “investiga-tions” into the pork barrel scamnot actually an attempt to justlimit the damage and cover up theinvolvement of key administra-tion allies? President Aquino is clearly delusional ifhethinks his govern-menthas adequatelydemonstrat-ed its “stand withjustice,honesty,and accountability” or that he is “shaping a better society” for a  justice-deprived Filipino people.Indeed, he has yet to answer sat-isfactorily the question, what arethese so-called reforms you say youhaveinstituted?Mr. Drilon is reported to have“lamented” the fact that the San-diganbayan takes an average of sevenyears todecidea case,“fromthefilingoftheinformationtothepromulgation of judgment,” Hethenis said tohaveadded,rather superfluously, “Such a drawn-outprocess oflitigationis injusticeinitself.” Thepeopledonotneed himtotell themthat.From a wider perspective,though, Mr. Drilon is guilty of selective targeting because theglaring faults in our justice sys-tem encompass more than justthe Sandiganbayan. According tothe Davide-era “Action Programfor Judicial Reform,” the crucial issues that need to be addressed if we are to have a justice sys-tem that is “fair, accessible and efficient, independent and self-governed” are: i) case congestionand delay, ii) budget deficiencies,iii) the politicized system of ju-dicial appointments, iv) the lack of judicial autonomy, v) humanresource inadequacies, vi) dys-functional administrative struc-ture and operating systems, vii) insufficient public informationand collaboration with society, viii) perceived corruption in the judiciary, and ix) limited access to justice by the poor. To that, onehas to add other elements neces-sary to bring about reform in our system for bringing lawbreakers to justice. These would includeprograms and equipment invest-ments to enhance law enforce-ment capabilities (for the preven-tion and solution of crimes) and to improve correction facilities (for the punishment and reha-bilitation of criminals). Action is such areas is directly within thesole power of the President and,four years into Mr. Aquino’s ad-ministration, nothing significanthas been done in this connection.Buying the police Glock pistols does not qualify as institutional reform.Indisputably,sinceMr.Aquinohas not taken meaningful actionto introduce reforms in the areas that he has repeatedly stressed arethefocus ofhis administration— corruption and lack of justice— thenhecannolonger qualifyas thepeople’s heroand savior.Thus,perhaps, the attempt by Aquinoally (and once-rabid Arroyo sup-porter) Drilontobegintoportray himselfnowinthatrole.Itis prob-ablymuchtoolate.Several ridiculed the idea, say-ing they had left their land and sold their farmingequipment.“There’s nowaytogobackand farm,” said 60-year-old NuoMin-gsheng.“It’s toofar away,theland has notbeencultivated,thefarm-ingtools aregone,thehouses havebeendugup.“Right now I’m living off thefarming tools and other things I sold from my old home, and I’mnot sure what I’ll do after that,” hesaid.For urbanisation to work local authorities will have to adapt toreality, said University of Wash-ingtonprofessor KamWingChan. With some exceptions, hesaid, “Local bureaucrats are very bureaucratic, they just follow the plan without seriously con-sidering the local situation.”But the trend of urbanisationis inexorable, especially amongyoung people, said Jonathan Woetzel, a Shanghai-based direc-tor at consultancy McKinsey and Company and co-chair of the Ur-banChina Initiative.Even without a job guaranteeor hukou reform, he pointed out,“it hasn’t stopped anybody frommigratingsofar.”“As productivity increases youexpect to see better standards of living,” hesaid.YetbackinAnshun,GuoTaifu,a 43-year-oldformerminer,wondered howhewouldsupporthisthreechil-dren.Officialshadofferedworkata constructionsitebutvillagerscon-sideredthepaytoolow,hesaid.“I’mworried,period.”BusinessWorld©is published MondaythroughFridayby BusinessWorld PublishingCorporation,witheditorial offices at95BaleteDriveExtension,NewManila,QuezonCity,MetroManila,Philippines 1112.Telephonenumbers: 535-9901privateexchangeconnectingall departments; Editorial 535-9919,Fax No.535-9918; Advertising535-9941,Fax No.535-9939; Circulation535-9940; Finance535-9933; Personnel 535-9936,Fax No.535-9937.ALLRIGHTSRESERVED.Nomaterial inthis newspaper canbereproduced inpartor infull withoutprevious writtenpermissionfromtheBusinessWorld PublishingCorporation. PHILIPPINE PRESS INSTITUTE TheNationalAssociation ofPhilippineNewspapers How to reach BusinessWorld Wepreferto receive lettersvia e-mail,withoutattachments.Writersshould disclose any connection or relationship with the subjectof theircomments.All lettersmustinclude an addressand daytime and eveningphone numbers.We reserve the rightto editlettersforclarity and space and to use them in all electronicand printeditions. ã  E-mail: ã Fax: +632-535 9918 BusinessWorld can be accessed online at RAULL.LOCSIN†  Founder  ROBYALAMPAY   Editor-in-Chief    ARNOLD E.BELLEZA   ExecutiveEditor   WILFREDOG.REYES  Managing Editor  MARIAELOISAI.CALDERON  NewsEditor   ALICIAA.HERRERA   AssociateEditor  FRANCISCOP.BALTAZAR   Foreign NewsEditor  KATRINAPAOLAB.ALVAREZ  Sub-Editor  JUDYT.GULANE  ResearchHead  MIRACATHERINEB.GLORIA  OnlineEditor  By Carol Huang  AFP FEATURE TORKHAM GATE, Afghanistan— Trundling across the Afghan-Pakistani border in a handcart,Shayma dismisses militantthreats and conspiracy theories about polio vaccinators while her four children receive drops thatcould finally eradicate the crip-pling disease. About 1.3 million oral vacci-nations are administered every year to children at the TorkhamGate crossing, the focal point of an intense global campaign toeradicate polio by 2018.But Afghanistan and Pakistan—twoofthethreeremaining“en-demic”polionations—faceatoughtaskduetofightingoneithersideof the border, Taliban oppositionto vaccinations and rumors thatthedropscouldcauseimpotency.Families hurrying throughthe Torkham mountain pass arediverted down a channel wherehealth workers deftly deliver twoliquid drops into the mouths of all children aged under five.“We want the vaccinations sothat my children don’t becomedisabled,” Shayma told AFP frombehind an all-enveloping blueburqa as she headed home fromPeshawar in Pakistan to the Af-ghan city of Jalalabad.“It is not true that the vacci-nation is bad. I don’t agree withthis,” she said. “I believe it stops polio.”Pakistan is a major concern for anti-polio experts with 93 cases last year, up from 58 in 2012. Vaccinators have been shotdead, bombed or taken hostage inPeshawar, Karachi and elsewhere,and some anti-polio programs have been suspended.Twelve people were killed and 11 injured when three roadsidebombs targeting a polio vaccina-tion team in Pakistan’s restivenorthwest exploded Saturday.The Pakistan Taliban opposeimmunisation,sayingitis a cover forUSspying,andsomepeoplebe-lieveitisalsoaplottopoisonMus-limchildrenandcauseinfertility. Polio’s last stand on the Afghan-Pakistan border  By Ben Sheppard  AFP  By Glenn Chapman  AFP   While Afghanistan has had notable success in tackling polio, with 80 cases in 2011 and just 14in 2013, eradication may be a long way off due to the constant flood of people back and forth across the porous border. SOME FAMILIES REFUSE  VACCINE “It does pose a big challenge intrying to ensure each and every child is vaccinated every sin-gle time,” UNICEF spokesmanKshitij Joshi said.“Afghanistan and Pakistan arethe same epidemiological block and it is important that childrenon either side of the border are vaccinated toensureabsolutepro-tection.” Vaccinated children aremarked on the thumb with a penthat lasts one month, but catch-ing every child is nearly impos-sible in the crush of people onthe colonial-era frontier, whichis not officially recognised by Afghanistan.The vaccine is voluntary and is rejected by some families. Oneelderly man shouted at health workers and refused to allow his child to receive drops.“Sometimes we find a personlike this, but the majority of people know that it is good,” said  vaccination supervisor Asifullah who, like many Afghans, only uses one name.In Jalalabad city, on the mainroad to Kabul, UNICEF also tar-gets migrant communities whomove regularly between the twocountries insearch of work.One father living in a makeshift tent said hehad been told that the drops had a bad effect and would make his children “naughty.” After a discussion, UNICEF fe-male coordinator Rana persuaded him to allow his family to receivethe vaccine.Female volunteers are crucial totheanti-poliocampaignasthey areabletoenterprivatehomes,butthey can’t access more dangerous areasintheAfghanborderregion.“It is difficult for women to goto several districts,” said Rana.“We are not allowed as the secu-rity is not good.”Taliban militants in southern Afghanistan generally support vaccination — a result, says UNI-CEF, of years of work ensuringthat the program is seen as strict-ly neutral.But in Pakistan and someparts of eastern Afghanistan, theTaliban have stopped vaccinators reaching children in key polioenclaves.“The Taliban in Kunar and Nangarhar provinces opposethe vaccinations, so we have20,000 children there who havebeen unvaccinated for several months,” Faizullah Kakar, the Afghan president’s polio special-ist, told AFP.“These places are near Kabul,so we are very nervous that if itgets to the capital it could spread quickly.”The risk was highlighted lastmonth when Kabul recorded its first polio case since 2001 after a three-year-old girl was diagnosed,probably due to her father carry-ing the disease from Pakistan. TACKLING ‘TALIBAN PROPAGANDA’ “The problem is firstly the Tali-ban, but it is also refugees in Ku-nar who are somehow convinced that vaccinations are not good for their children and they also tell local Afghans not to vaccinate,” said Kakar.“We stopped three FM radiostations from constantly broad-casting propaganda against thepolio campaign.“And we try to halt books circu-lating that pick bits of science and claim that vaccines are from pigproducts or cause infertility.“The Taliban use how Osama bin Laden was found (in partthrough a fake vaccination pro-gram), so they say it is about spy-ing.” Worldwide, polio is now re-stricted to two endemic areas — the Afghan-Pakistan border and northern Nigeria.But unless vaccination at key points such as Torkham Gatesucceeds in stamping polio outcompletely, the risk of outbreaks in other countries will always re-main.For Kakar, there is one mainobstacle to ridding the world of a highly contagious disease thateasily preventable but impossibleto cure.“If we have peace here, we would hope to end polio very soon,” he said. “Without peace, itis a lot more uncertain.”  AN Afghan man pushes a cart transporting his family as they cross over the border from Pakistan at the main Torkham border in Nagarhar Province on Feb. 23. More than 1.3 million vaccinations are administered every year to children crossing at Torkham Gate,a focal point of the global campaign to eradicate polio by 2018.  AFP  FEATURE RURAL residents doing their washing near the city of Anshun,Guizhou Province,China on Feb. 20. China’s leaders have pledged to better integrate the rural migrants pouring into cities but who are often kept on the margins and denied government assistance.  AFP 
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