At the same time, various econo-mists say inflation may have already bottomed out during the month and could only move up going forward. The Philippine Statistics Author-ity (PSA) said inflation in May was the slowest in two decades and com-pared against the year-ago inflation averaging 4.5 percent.  Inflation averaged 2.2 percent in the January-to-May period, well within the Bangko Sentral ng Pili-pinas (BSP) target of 2 percent to 4 percent this year.  “With the report that El Niño in the country may likely continue until early 2016, we should be keen on monitoring drought in agricul-tural areas and be ready to assist our farmers should there be a need to shift to crops that are less depen-dent on water and, at the same time, resilient to the high-temperature climate,” Neda Officer in Charge and Deputy Director General Ro-lando G. Tungpalan said.  Tungpalan gave assurance that overall, policies should remain sup-portive of manageable inflation down the line. He added that low- inflation environment should also help boost household consumption in the coming months.  Economists assessing the infla-tion environment in the coming months offer mixed views. Some believe that apart from the El Niño weather disruption, still other factors could cause oil prices to inflate.  University of Asia and the Pacific

School of Economics Vice Dean Cid Terosa told the BM that geopolitical pressures in the Middle East could cause oil prices to hike upward. “I believe it won’t be sustained since there are upward pressures on prices looming in the horizon. These pressures include the drought and poor harvest due to El Niño, and to election-related spending. Also, geopolitical pressures emanating from the Middle East can heighten inflationary pressures,” Terosa said.  However, former Asian Develop-ment Bank lead economist Ernesto Pernia told the BM full-year inflation could prove still within the government target. Pernia said the expected increase in commodity prices due to El Niño will be offset by low oil prices.  Oil prices started declining in the second half of 2014. The com-modity has improved to more or less $60 per barrel from around $100 per barrel.  “El Niño effect can be compen-sated for by low oil and rice prices. It [prices] could pick up a bit but not by much. In any case, the BSP’s 2- percent to 4-percent [target] should be safe,” Pernia said. PSA data show that the housing, water, electricity, gas and other fu-els index contracted by 1.5 percent in May, while the heavily weighted food and nonalcoholic beverages in-dex slowed to 3.2 percent. 

PESO EXCHANGE RATES n US 44.8080 n JAPAN 0.3603 n UK 68.8699 n HK 5.7803 n CHINA 7.2259 n SINGAPORE 33.2625 n AUSTRALIA 34.3725 n EU 50.3866 n SAUDI ARABIA 11.9488 Source: BSP (5 June 2015)

www.businessmirror.com.ph n Saturday 18, 2014 Vol. 10 No. 40 P. | | 7 DAYS A WEEKn Saturday, June 6, 2015 Vol. 10 No. 240

A broader look at today’s businessBusinessMirrorBusinessMirrorBusinessMirrorTHREETIME

ROTARY CLUB OF MANILA JOURNALISM AWARDEE2006, 2010, 2012U.N. MEDIA AWARD 2008

B

M

S “I,” A

FISHING IN TAAL LAKE A fisherman in Tanauan, Batangas, is on the lookout for a good spot in Taal Lake

where he can catch more fish. Residents in Tanauan consider fishing as one of their major sources of livelihood. NONIE REYES

Inflation eased to 1.6% in MayAVERAGE INCREASE IN CONSUMER PRICES FALLS TO 20YEAR LOW ON CHEAPER OIL, FOOD

TO HIKEOR NOT TO HIKE? IMFURGESU.S. FED TO DELAY RATE INCREASE

INSIDE

Life Saturday, June 6, 2015 D1

Life BusinessMirror

Life Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

DEAR Lord, be our inspiration to be open-EAR Lord, be our inspiration to be open-minded so we do not impose our beliefs minded so we do not impose our beliefs on others. Lead us to accept all of life’s

perspectives and realities, doing our own thing in perspectives and realities, doing our own thing in Peace, Love and Joy without judging anyone. If we Peace, Love and Joy without judging anyone. If we are open-minded, we become accepting, enduring are open-minded, we become accepting, enduring and reflective of things that life can offer. Amen.

Be open-minded

CE COLLECTIVE EVOLUTION, SONIA M. GO AND LOUIE M. LACSONCE COLLECTIVE EVOLUTION, SONIA M. GO AND LOUIE M. LACSONWord&Life Publications • teacherlouie1965@yahoo.comteacherlouie1965@yahoo.com

HOSTESS GIFTS THAT PLAY BY THE

NEW RULES »D2

PHOTO CREDIT:AL SEIB/LOS ANGELES TIMES

Let nature cleanse away stressB B W

Los Angeles Times

SHINRINYOKU is the name given to HINRINYOKU is the name given to HINRINYOKUthe Japanese art of “forest bathing,” contemplative walks through the woods that reconnect the individual with nature and can lead to decreased

stress, natural mood elevation and even a stronger immune system. This means of mobile meditation has been recognized by the Japanese government since 1982 and has been endorsed by the Forest Agency of Japan as a means of improving quality of life. The practice can be a natural way to combat the toll of stress and anxiety, and this holds equally true for Tokyo or Los Angeles or wherever else.

Qing Li, the president of the Japanese Society of Forest Medicine, founded in 2007, also is a senior professor at Nippon Medical School in Toyko. He has studied the effects of forest bathing. Using a mood profile, he found that participants’ feelings of stress, anxiety or anger had decreased, and their perceptions of energy or vigor had improved. Li suggested additional study into the long-term effects of regular forest bathing.

In two other related studies, Li and fellow researchers sent groups of young men and groups of young women on three-day trips that included several forest baths and a stay in a hotel in the middle of the forest. Blood tests taken before and after this trip showed a significant boost in natural killer cells, which play a vital role in the immune system’s ability to fight off illness. Li speculated that forest bathing allows participants to breathe in air that contains volatile essential oils from surrounding trees with active components such as limonene that have antimicrobial and immune-boosting properties.

How to forest bathe?To give shinrin-yoku a try, choose a spot based

on physical ability and convenience. Do not choose a route that is too strenuous: It is recommended that in four hours, you should walk no more than three miles.

This is not an endurance hike. Rest when necessary and find a spot where it is pleasant to sit and read for a while or simply look out into the trees. It is OK to bring water or green tea. It is also recommended that, if possible, a forest bath is followed up with a hot spring bath. n

WHO doesn’t love desserts?Even those who are on one

or two of those myriad fad diets love desserts and try to resist the temptation of eating them

with every ounce of will they can muster. They may be successful for a while in denying themselves the indulgence, but, in the end, they, too, will eventually succumb. And with every spoonful of this pastry or that sugary treat, they will, no doubt, arrive at unparalleled bliss.

One of the world’s most talented creators and profferers of such sweet bliss is none other than Chef Paco Torreblanca (Bombonerias y pastelerias Torreblanca) of Spain, a recent guest in our shores during last month’s Madrid Fusión Manila, where he showed off the skills that earned him the title of Best Pastry Chef of Spain, then of Europe.

Born in 1951 in Villena, Alicante, and a grandson of bakers, Torreblanca was just 12 years old when his papá sent him to a best friend’s house in France. The best friend turned out to be Jean Millet, whose eponymous patiesserie on 103 rue Saint-Dominique continues to churn out the sinful pain au chocolat, acclaimed as the best in Paris.

Under Millet’s patient tutelage, Torreblanca learned how to shape sugar, taste and mold chocolate, and blend flour with butter and other ingredients to satisfy the sweet tooth.

“I wasn’t even thinking of becoming a pastry chef or doing pastries [before my father sent me to France],” Torreblanca told the BM. When he started training with Millet, however, he became

convinced that making pastries was what he wanted to do. “What I saw was what we did was a little of art, like sculptures. That’s what made me passionate about this. It’s ephemeral art, it doesn’t last.”

In 1978, at 25 years old, he and his wife Consuelo Coloma, returned to his beloved Alicante and opened his first patisserie, called Totel (derived from a Japanese word for “the light of something new”), in Elda. There he continued to hone his talent and revolutionized pastry-making in Spain with his magical and lyrical pieces.

The most famous desserts of Totel were the caviar of chocolate, straciatella of bourbon vanilla from Madagascar, various chocolate confections and even the traditional Italian panettone, filled with chocolate or strawberry. (Totel and its other branches were closed last year, liquidated by creditors. Torreblanca’s sons have set up a new company, eponymously named, and have configured it as a master franchise.)

Torreblanca is credited for using olive oil—instead of cocoa butter—in his chocolate creations, thus making

them smoother. He said that he hit on the idea “simply because I was born in the Mediterranean where olive trees abound. If I was born in the Philippines, I will probably use cocoa butter.”

He also was the first to use saffron in chocolates, and got panned by a food critic for doing so because the latter thought it was so wasteful. Torreblanca is unfazed by such critiques and continues to take risks by incorporating unusual ingredients in his confectionaries like spices, or reinventing procedures to get a desired taste for his creations.

During his presentation of “Sweet World, Happy Ending” at the Madrid Fusión Manila, he showed how isomalt sugar could be heated, pulled and then blown into various shapes, just like how artisans blow and shape heated glass. Then using special molds of their company’s own design, Torreblanca created sheets of chocolate leaves. He also showed slides of masterpieces by different artists, painters and sculptors “who’ve never met each other but they serve a commonality at some point. They never worked together, but their works show similarities.”

He also made a dessert with vanilla and smoked cocoa, which infused with an earthier savory flavor. He took inspiration from the Maldives, where he has a home by the sea. He explained that, in the Maldives, the “native people take coconuts, and with the shell, they put the coconuts on a wood-burning fire and cover them. After several hours, they open the coconuts, and when these have cooled, they take the ‘soup’ in the coconut. The soup is toasted, and it has a different, super nice flavor.”

Because more than his artistic desserts and breathtakingly beautiful confections, Torreblanca underscores the importance of flavor. “I’ve been called a creator of aesthetics, but I prefer to create flavor. The appearance is certainly important, but what really counts is flavor,” he once said in an interview quoted by Foods from Spain (http://bit.ly/1AYFyjd). But he also reminded the audience at Madrid Fusión Manila, composed of culinary students, chefs and pastry chefs, “to know your ingredients” and how they work, “for only then can we play with them.”

Torreblanca said that his most unforgettable piece was made for the European Championship which he won in 1990, earning him the title of Best Pastry Chef in Europe. “The themes were mandatory and I had to do a blown sugar piece mixed with edible paints. I was inspired by the art of Leonardo da Vinci and Miro—that’s what started me in art. Miro is one of the most important personalities in Mediterranean art, and in Spain. So this piece made me win.”

“I thought you would say that the most unforgettable

piece was the cake you made for the royal wedding (of then Prince and Princess of Asturias, now King and Queen of Spain),” I joked. With his rumpled white hair, a very serious Torreblanca finally lit up and gave an emphatic “No!” He added: “It wasn’t that a magical moment,” he said, amused. “You know, I thought royalty had blue blood, but they also have red blood, like us!”

Asked if there was a difference between how the French and Spaniards make their pastries, the grandfatherly Torreblanca, now 64, said, “I’m half-French and half-Spanish, so I can’t be impartial. But France, perhaps, is more iron-disciplined than Spain. In Spain, creativity, in some of the cases, not all of the cases, is more advanced.”

Stressing this point, he noted that he had recently spoken at a conference in a pastry school in New York—the L’École Valrhona Brooklyn, owned by the chocolate giant—“and I proceeded to talk for an hour and a half on [the secrets to long-lasting] creativity. But it is a French school.” While still busy whipping up delectable desserts, Torreblanca believes it’s now important to pass on his knowledge to the young. He has established the International School of Pastry Arts (ISPA) in Alicante, where young, deserving students are able to train on scholarship, under him and other famous pastry chefs. In an interview with EFE in March 2014, he said that he “feels a duty to deliver” what life has given to him. “I am a privileged person. I have become successful and I am able to eat. Now I have to give back.”

His own son, Jacob, is a master pastry chef in his own right. He also teaches courses at ISPA and creates pastries for the family’s stores. He won the European Championships at a much younger age than when his father won it, which, no doubt, makes the elder Torreblanca very proud. “It is more than I ever wanted for him,” he told us.

Torreblanca’s other son, David, handles the store sales, while his wife “handles the entire thing [the company and the home].” He goes on to say that, “when I started to work, my wife was the CEO of the company. When we first met, she said that she wanted to collaborate with me, and I told her, ‘You’re going be full of it.’ And, since then, I haven’t worried about it.”

Torreblanca says that, apart from his own pasteleria, his favorites are Pierre Hermé in Paris, whose owner is one of his closest friends and who had been dubbed by Vogue magazine as “the Picasso of Pastry”; and Jean-Vogue magazine as “the Picasso of Pastry”; and Jean-VoguePaul Hévin, the chocolatier who specializes in high-end single-origin chocolate confections, also in Paris.

With his sons now running the family’s pastelerias, expect franchised outlets to be opened in the Middle East, and, hopefully, in Asia...spreading the word and the sweet bliss of Torreblanca’s pastries. n

RelationshipsBusinessMirror www.businessmirror.com.phD4 Saturday, June 6, 2015

SOMETHINGLIKE LIFEMA. STELLA F. ARNALDO

http://stella-arnaldo.blogspot.com@Pulitika2010

Sweet endings withEurope’s best pastry chef

SM, MasterCard reward families this school seasonIT’S school season once again. Filipino parents, known for putting great value on education, will, once again, set aside the much of the family budget for tuition and other school expenses.

To reward parents who are working hard to To reward parents who are working hard to Tprovide their kids with good education, SM and MasterCard launched a promotion, dubbed “Win Back Your Tuition”, which will benefit up to 100 families across the country.

From now until June 15, a minimum single-receipt purchase of P2,000 made using a MasterCard card at any branch of The SM Store nationwide will give 100 lucky MasterCard cardholders a chance to win back their kids’ tuition worth up to P100,000. In addition, 4,000 cardholders will bring home an SM Gift Pass worth P100.

The promo is yet another example of how MasterCard always strives to bring value to their cardholders. As MasterCard Vice President for Marketing Ailea Zialcita shares, “MasterCard understands that education is important to Filipinos. This promo is a way to reward parents, who are committed to keeping their kids in school.”

CHEF Paco Torreblanca shows off his sweet pastry skills during his talk at the recent Madrid Fusión Manila

DUBSSportsSportsSportsBusinessMirrorSports C1 | SATURDAY, JUNE 6, 2015

mirror_sports@yahoo.com.phsports@businessmirror.com.phEditor: Jun Lomibao

PARIS—At changeovers in her French Open semifinal, an ill Serena Williams walked ever so slowly to the sideline, where even lowering

herself to sit seemed difficult.With the temperature nearing 85 degrees (30

Celsius), she pressed white towels filled with ice against her forehead and neck and guzzled water.

Early on, her play was as poor as her health. She failed to chase balls she normally would. As telling as anything: On those occasions when she did win points, Williams mostly refrained from her familiar fist pumps and yells of “Come on!”

Never can count her out, though, no matter the circumstances. Down a set and a break on Thursday, and clearly not herself, Williams summoned the resolve to reach the final by beating 23rd-seeded Timea Bacsinszky of Switzerland, 4-6, 6-3, 6-0.

After getting broken to fall behind 3-2 in the second set, Williams claimed the final 10 games. She had a 12-2 edge in winners in the final set.

“Stunning,” said Williams’s coach, Patrick Mouratoglou. “This is the difference between champions and everyone else. There is no logical explanation.”

Mouratoglou said the No. 1-ranked Williams has been dealing for several days with the flu, including a fever and difficulty in breathing.

Williams skipped her news conference—something sister Venus did after losing last week, drawing a $3,000 fine—and issued a statement reading: “I have been feeling unwell for a few days, and...I needed to see the tournament doctor.”

Now one victory from her third French Open championship and 20th major title in all, Williams faces 13th-seeded Lucie Safarova of the Czech Republic on Saturday.

“I tried everything. I thought if I lose, I will lose with a fight,” Williams told the crowd in French. “I tried, I tried. I found the energy. I don’t know where, but I found it. And I won. I hope that on Saturday, I hope...”

Cutting herself off, she stepped away from the microphone, bent over and began coughing. She offered a quick wave, collected her things and left. Off the court, she got a hug from Mouratoglou, who helped her down stairs toward the locker room.

“I was worried,” said Williams’s mother, Oracene Price. “But I knew if she could get through the second set, somehow maybe the adrenaline and God would help her get through the match.”

Next comes Williams’s 24th Grand Slam final, and Safarova’s first. In her statement, Williams called herself “determined to be 100-percent ready.”

The left-handed Safarova eliminated defending champion Maria Sharapova in the fourth round and 2008 champion Ana Ivanovic, 7-5, 7-5, on Thursday.

Williams won her semifinal despite dropping the first set for the fourth time in six matches. She’d never fashioned that many comebacks during one major tournament.

When this one was over, finally over, Williams leaned forward and rested her head on her hands atop the handle of her upside-down racket.

Bacsinszky—who said she noticed Williams “was taking some time between points” but tried to focus on herself—was asked how her own mistakes contributed to the result.

“We say in French: ‘If we could put Paris in a bottle.’ Like, I could say, ‘If, if, if. If my forehand was in. If I would maybe choose another tactic,’” Bacsinszky said.

Bacsinszky wiped away tears as she left the court, her magical run abruptly done. She never had been past the second round in Paris—or the third round at any major.

Two years ago she took a hiatus from tennis to work at restaurants with an eye toward pursuing a degree in hotel management. Last year she was ranked 112th and went through qualifying at the French Open.

This year, equipped with a dangerous backhand and an affinity for drop shots, Bacsinszky beat two-time Wimbledon champion Petra Kvitova in the fourth round and lost a tournament-low 33 games entering Thursday. She was 7-0 in her French Open career when taking the first set.

Ah, but none of those matches came against Williams.

When the going gets toughest, no one is better than Williams at the moment—and, perhaps, in the history of the game. In 2015, she is 31-1, including 11-0 in three-setters.

If she defeats Safarova, the 33-year-old American would add to her 2002 and 2013 French Open titles and collect a third consecutive major championship.

“She never thought about withdrawing,” Mouratoglou said. “Even on one leg, she will step on court. She always believes that she can pull through. This is her strength. You can’t take it away from her.” AP

B M BLos Angeles Times

OAKLAND, California—Oh, my. LeBron James isn’t flawless. He looked it for four quarters, but then Thursday’s game dripped into overtime and James ran out of

whatever it is that powers him.The Golden State Warriors beat the Cleveland

Cavaliers, 108-100, dominating the extra five minutes in Game One of the National Basketball Association (NBA) Finals.

James looked mostly unstoppable until disappearing in overtime, scoring two points, missing three-of-four shots and committing two turnovers.

“We couldn’t get a good look, couldn’t get nothing to drop, including myself,” said James, who finished with 44 points, his most ever in the Finals, on 18-for-38 shooting. He also had eight rebounds and six assists.

“We really only had zero [overtime] points,” James said. “I got a lay-up at the end, but that didn’t mean much.”

As it was, the Cavaliers tied the Finals record for fewest overtime points since the shot-clock era (1954-1955).

Cleveland’s cause could be damaged because All-Star guard Kyrie Irving reinjured his problematic left leg in overtime. He missed two games in the Eastern Conference finals because of knee tendinitis and limped off the court on Thursday shortly after crumpling on a drive toward the basket.

An MRI exam was scheduled on Friday for Irving, who needed crutches after the game. He had 23 points and six assists after more than a week of rest.

“It’s very tough to see,” James said. “I see how hard he worked these last eight days just to get himself to play at this level [in Game One]. It’s a tough blow for our team.”

The stage was large, without a doubt, but the Warriors changed little from their seasonlong formula—heavy backcourt reliance and total authority at home.

Most Valuable Player Stephen Curry had 26 points and Klay Thompson added 21, as the Warriors improved to 47-3 at Oracle Arena.

Good news for Warriors fans, who haven’t experienced a championship since 1975—the team that wins Game One has captured the title 71 percent of the time.

Even better news for them: Game Two is also at home, on Sunday.

The Warriors started slowly, falling behind by 14, perhaps because of inexperience. They were the first team since Utah in 1997 to reach the Finals without any players with championship-round experience.

They were forgiven, seeing how the franchise hadn’t been this far since winning it all in 1975. Curry and Thompson were steadying hands, along with veteran Andre Iguodala (15 points).

Curry staked the Warriors an early overtime lead by making four free throws and Harrison Barnes’s three-pointer from the left corner made it 105-98 with 2:02 remaining.

Before the game, well before James had 31 points through three quarters, a reporter advised Golden State Coach Steve Kerr to throw the “kitchen sink” at James.

“It sounds like a good plan,” Kerr said, laughing. “Think you might swing by my office before the game?”

James often played villain to the hostile crowd, sticking out his chest after sinking a 12-foot fadeaway over Iguodala for an 86-82 lead with 6:29 left in the fourth quarter.

James couldn’t shake the Warriors, though.The game headed to overtime

at 98-98 after Irving blocked Curry’s lay-up with 24 seconds left, then James’s turn-around 21-footer missed, as did Iman Shumpert’s surprisingly close desperation flick off the rebound from three-point range.

Timofey Mozgov had 16 points for Cleveland, but only two other Cavaliers scored in double figures. Reserve guard J.R. Smith missed 10-of-13 shots and had only nine points.

“Over the course of the game, I felt like we stuck to the game plan,” Curry said. “LeBron’s going to dominate the ball and make plays. Don’t give him any easy buckets and [do] not let anybody else get a rhythm.”

» GOLDEN State Warriors guard Stephen Curry (30) shoots against Cleveland Cavaliers guard Iman Shumpert. (Below) Cavaliers Head Coach gestures as a fan holds up a large photo of Curry.

WARRIORS ROLLS ROLLSIN OVERTIME, DEFEAT CAVALIERS

IN FINALS OPENERS OPENERS

IN GAME 1Pherself to sit seemed difficult.

Celsius), she pressed white towels filled with ice against her forehead and neck and guzzled water.

failed to chase balls she normally would. As telling as anything: On those occasions when she did win points, Williams mostly refrained from her familiar fist pumps and yells of “Come on!”

circumstances. Down a set and a break on Thursday, and clearly not herself, Williams summoned the resolve to reach the final by beating 23rd-seeded Timea Bacsinszky of Switzerland, 4-6, 6-3, 6-0.

second set, Williams claimed the final 10 games. She had a 12-2 edge in winners in the final set.

Mouratoglou. “This is the difference between champions and everyone else. There is no logical explanation.”

been dealing for several days with the flu, including a fever and difficulty in breathing.

something sister Venus did after losing last week, drawing a $3,000 fine—and issued a statement reading: “I have been feeling unwell for a few days, and...I needed to see the tournament doctor.”

third French Open championship and 20th major title in all, Williams faces 13th-seeded Lucie Safarova of the Czech Republic on Saturday.

with a fight,” Williams told the crowd in French. “I tried, I tried. I found the energy. I don’t know where, but I found it. And I won. I hope that on Saturday, I hope...”

microphone, bent over and began coughing. She offered a quick wave, collected her things and left. Off the court, she got a hug from Mouratoglou, who helped her down stairs toward the locker room.

Price. “But I knew if she could get through the second set, somehow maybe the adrenaline and God would help her get through the match.”

and Safarova’s first. In her statement, Williams called herself “determined to be 100-percent ready.”

champion Maria Sharapova in the fourth round and 2008 champion Ana Ivanovic, 7-5, 7-5, on Thursday.

Even better news for them: Game Two is also at home, on Sunday.

The Warriors started slowly, falling behind by 14, perhaps because of inexperience. They were the first team since Utah in 1997 to reach the Finals without any players with championship-round experience.

They were forgiven, seeing how the franchise hadn’t been this far since winning it all in 1975. Curry and Thompson were steadying hands, along with veteran Andre Iguodala (15 points).

Curry staked the Warriors an early overtime lead by making four free throws and Harrison Barnes’s three-pointer from the left corner made it 105-98 with 2:02 remaining.

Before the game, well before James had 31 points through three quarters, a reporter advised Golden State Coach Steve Kerr to throw the “kitchen

“It sounds like a good plan,” Kerr said, laughing. “Think you might swing by my office before the game?”

James often played villain to the hostile crowd, sticking out his chest after sinking a 12-foot fadeaway over Iguodala for an 86-82 lead with 6:29 left in the

James couldn’t shake the Warriors, though.The game headed to overtime

at 98-98 after Irving blocked Curry’s lay-up with 24 seconds left, then James’s turn-around 21-footer missed, as did Iman Shumpert’s surprisingly close desperation flick off the rebound from three-point range.

Timofey Mozgov had 16 points for Cleveland, but only two other Cavaliers scored in double figures. Reserve guard J.R. Smith missed 10-of-13 shots and had only nine points.

“Over the course of the game, I felt like we stuck to the game plan,” Curry said. “LeBron’s going to dominate the ball and make plays. Don’t give him any easy buckets and [do] not let anybody else get a rhythm.”

State Warriors guard Stephen Curry (30) shoots against Cleveland Cavaliers guard Iman Shumpert. (Below) Cavaliers Head Coach David Blatt gestures as a fan holds up a large photo of Curry. AP

IN GAME 1Ill Serena

overcomesSwiss foe

in semifinals» SERENA WILLIAMS

cools off with a towel in her semifinal match against Timea

Bacsinszky of Swit-zerland. AP

CLEANSE AWAY STRESS

BEST PASTRY CHEF

DUBS IN GAME 1

LIFE D1

RELATIONSHIPS D4

GLOBAL CITY MURAL A construction worker walks past a mural on one of the skyscrapers in Bonifacio Global City (BGC). The BGC is the only city in the country that boasts of interesting street art that is accessible, interactive, stimulating, engaging and educational. NONIE REYES

SPORTS C1

WASHINGTON—What’s the hurry?

T he Inter nat iona l Monetary Fund (IMF) on Thursday urged the Federal Reserve (the Fed) to put off raising short-term inter-est rates until next year because the US economy still needs help.

In its yearly checkup of the United States, the IMF predicted the American economy would grow just 2.5 percent this year, down from its April forecast of 3.1 per-cent. The downgrade reflects the economy’s stumbling start to the year: Gross domestic product fell the first three months of 2015,

tripped up by harsh winter weather and the export-killing strength of the dollar. The IMF has no direct influence over US economic policy. But the global lending agency is widely re-spected for its technical expertise on economics and finance.

Since December 2008, the Fed has kept the short-term interest rate it controls near zero. Fed Chairman Janet Yellen last month said she ex-pects to begin raising rates this year. Many economists expect a rate hike at the Fed’s September meeting. A rate increase probably won’t have a big or immediate impact on

most consumer-loan rates. For one thing, the Fed is expected to ratchet up rates only gradually. For another, rates don’t move in lock-step. Mortgage rates, for instance, are tethered to long-term rates such as the yield on the 10-year Treasury note. Those rates can move up or down based on things, such as for-eigners’ hankering for the safety of US Treasuries, that have little to do with the Fed.

Still, the Fed’s easy money policies have powered the American stock market to record levels, and investors hang onto Yellen’s every utterance.

B C U. O B C

ALTHOUGH inflation touched a 20-year low by averaging only 1.6 percent in May, the govern-

ment will continue to monitor closely the price fluctuations attributable to the El Niño phenomenon, according to the National Economic and Develop-ment Authority (Neda). 

S “R ,” A

BusinessMirror news@businessmirror.com.ph Saturday, June 6, 2015 A2

NewsInflation. . . Continued from A1

ThirTy years ago China may have turned to global development banks for help cleaning up surging

bad debts. in 2015, it’s tapping internet billionaire Jack Ma.

Who needs IMF when you have Alibaba? China sells bad debt online

Ma’s Alibaba Group Holding Ltd. will cooperate with the big-gest state-owned loan restruc-turer to dispose of more than 4 billion yuan ($645 million) of nonperforming assets on its online shopping platform Tao-bao. China Cinda Asset Manage-ment Co., which announced the tieup with Ma last week, saw profits rise 32 percent to a record in 2014. China’s nonperforming loans climbed by an unprecedented 140 billion yuan in the first quarter to 982.5 billion yuan, the most since 2008 and almost the size of Vietnam’s economy. UBS Group AG and Standard Chartered Plc. are among companies that bought stakes in Cinda before its 2013 public share sale as a stepping stone into the distressed asset market. Cinda’s market value of $23 billion is now larger than KKR & Co.’s $19.1 billion. “The volume of bad loans in the economy has reached the point where the banks need to be innovative,” said Simon Gleave, a partner in charge of KPMG Llp.’s Asia-Pacific financial ser-vices practice in Beijing. “A lot of expertise resides with the asset-

management companies and banks have to decide what’s the best way to maximize value.”

New playerA TAoBAo spokesman, who asked not to be identified, said the company is “very excited” by the cooperation designed to create an Internet-based nonperform-ing assets market and allow us-ers to invest on a national scale. Two calls and an e-mail to Cinda’s investor relations department went unanswered. Cinda already sold two bad loans on Alibaba’s retail site Tao-bao in April for a combined 24.5 million yuan, according to a China Banking Regulatory Commission statement at the time. Four more were auctioned last month for 31.4 million yuan. one of the soured loans auc-tioned in May was originally from Agricultural Bank of China Ltd. with a clothing company in the eastern Zhejiang province as the debtor. Cinda disclosed details such as the name of the borrower, the principal amount, accrued in-terest and guarantors of the loan on Taobao. Bidders were advised to look at the loan documents and

Nonfood inflation also moderated to 0.3 percent from 0.8 percent due to declines in the price of electricity, gas and other fuels. Data also show that inflation in the food subgroup eased to 3.2 percent from 4 percent following slower price adjustments in rice, meat, fish and fruits. “Rice prices have normalized, as total rice stocks inventory grew by 16.5 percent year-on-year as of April 2015. With favorable weather conditions, the supply of fish has been steady and sufficient and the volume of in-season fruits in the market stable,” Tungpalan said. “Inflation in the meat index was also curbed, following the Department of Trade and Industry’s imposition of lower suggested retail price,” he added. Inflation in Metro Manila slowed to 0.7 percent in May. It was pegged at 1.5 percent last month and 3.8 percent in the same month a year ago. This was attributed to the annual drop in the index for housing, water, electricity, gas and other fuels. Moreover, lower annual growth rates were seen in the indices on food and nonalcoholic beverages; health; and restaurant and miscellaneous goods and services. In areas outside National Capital Region, inflation slowed to 1.8 percent in May. Inflation settled to 2.3 percent last month and in May 2014, to only 4.7 percent. Negative annual rates were recorded in housing, water, electricity, gas and other fuels; transport; and communication. The demand for the above-cited commodities proved lower than the supply of the same during the period, causing prices to fall. In addition, annual increments decelerated in the indices of food and nonalcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; and furnishing, household equipment and routine maintenance of the house. As a consequence, BSP Governor Amando M. Tetangco Jr. said policy-makers are training a keen eye on the inflationary impact of oil prices and El Niño even with consumer prices at a 1998-low. Oil price movements “have knock-on effects on domestic pump prices, transport and other utilities, and consumption in general,” Tetangco

said in a mobile-phone text message on Friday. Officials are also looking at the “impact of a possibly prolonged El Niño on the food-supply chain.” Inflation eased to the slowest since at least January 1998, a report showed on Friday. More than 50 provinces are affected by a dry spell, the Philippine weather bureau said last week. While weaker economic growth adds pressure to boost monetary stimulus, the uncertainty of the timing of US interest-rate increases poses risks, Tetangco said on Thursday. “We think inflation is very near the bottom and there’s an upside risk in oil prices,” said Gundy Cahyadi, a Singapore-based economist at DBS Group Holdings Ltd. “We don’t see any reason to reverse the policy stance right now. The fundamentals of the economy remain strong.” The peso slid 0.3 percent to 44.95 per dollar as of 10:53 a.m. in Manila, heading for its lowest close since January. The central bank held its benchmark interest rate at 4 percent for a fifth straight meeting last month. At the central bank, Tetangco reiterated that current and future developments would be evaluated very carefully when they next meet to decide on monetary policy. “The May inflation rate falls within our inflation forecast for the month, albeit at the low end of the target range of 1.6 percent to 2.4 percent. Inflation expectations continue to be well anchored and growth is still sound,” Tetangco said. “We, nevertheless, remain watchful of de-velopments, particularly in oil-price movements, as these have knock-on effects on domestic pump prices, transport and other utilities and consumption in general, as well as the impact of a possibly prolonged El Niño on the food-supply chain,” he added. “We will consider all these during our next policy meeting, to see if there is a need to adjust the stance of monetary policy.” Economists said Tetangco’s statement betrayed a possible shift in the monetary policy stance at some point in the near future. “Tetangco’s comments suggest an increased risk of a shift in policy stance. In remarks after the release, Tetangco reiterated that inflation expectations were ‘well anchored’ and that he is

‘watchful of oil prices and El Niño.’ However, he also said that policy-makers would ‘see if there’s a need to adjust policy stance,’ and more important, he did not repeat comments made in recent weeks that the current policy stance ‘remains appropriate’,” analysts at the British-owned Barclays Bank said in a commentary on Friday. While economists agree that Tetangco’s statement betrayed a bias for a change in monetary policy, a clear direction has not been issued. Even the Bank of the Philippine Islands (BPI) said the BSP may be inclined to hike rates given possible sudden price upticks in the coming months due to El Niño and to so-called base effects. “Given that governor [Tetangco] believes inflation expectations to be well-anchored and that growth is expanding at a healthy pace, I do not expect the BSP to cut rates anytime this year. In fact, his comments on pump prices and El Niño suggest that the bias of the BSP is actually for a hike given that the factors mentioned by the governor would tend to push prices higher,” Nicholas Antonio Mapa, economist at BPI, said. “While near-term inflationary pressures have eased, there are already signs that drier-than-normal weather conditions are impacting agricultural output, as seen in the rise in vegetable prices. Given the risk of El Niño on food prices this year and with growth likely to recover from the second quarter, we continue to think it is unlikely the BSP will join other central banks in easing monetary policy. We continue to forecast the next policy move to be a hike, most likely in fourth quarter of 2015, after the Fed begins tightening,” Barclays economists said. Meanwhile, ING Bank Manila economist shared the opposite view, saying that if inflation further decelerates, a rate cut might be in the offing. “Declining inflation is another reason that could argue for some monetary easing. Demand- pull inflation is likely to have been weaker than expected,” ING Bank Manila economist Joey Cuyegkeng said. “If growth disappoints further, market talk of easing would likely intensify,” he added. With a report from Bloomberg News

check the collaterals before auc-tion. Both individuals, as well as institutions, were allowed to bid.

Price discovery“ALIBABA’S online loan auction platform broadens the investor base for bad loans and, therefore, will lead to better price discovery for distressed assets,” said Liao Qiang, a banking analyst at Stan-dard & Poor’s in Beijing. The legal complexities in-volved in unwinding such debts and the need to divulge informa-tion publicly may limit growth in online auctions, according to KPMG’s Gleave. “Alibaba’s auction site is just a market place,” he said. “Whether that’s a good way to trade bad debts is still to be seen.” As banks rush to sell troubled assets, the supply of bad loans on the market is outpacing demand, leading to a fall in prices, according to Victor Jong, a partner in Price-waterhouseCoopers Llp.’s busi-ness recovery services practice in Shanghai. Compared with the 30 to 40 cents on the dollar banks got for their bad debt between 2001 and 2007, prices have dropped to less than 10 cents in some cases, Jong said. That’s contributing to the re-cord profits among the asset- man-agement firms. Cinda recorded net income of 11.9 billion yuan last year. Its shares have jumped about 26 percent over the last 12 months, beating a 19-percent advance in the benchmark Hang Seng index.

Bloomberg News

news@businessmirror.com.ph Editor: Dionisio L. Pelayo • Saturday, June 6, 2015 A3BusinessMirrorThe Nation

Aquino confirms VFA talks with JapanBy Butch Fernandez

PRESIDENT Aquino confirmed on Friday that the Philippines is moving to forge a separate

Visiting Forces Agreement (VFA) with Japan similar to what it has with the US and Australia.

Fielding questions from mem-bers of the Japanese National Press Club, Aquino confirmed that he and Japanese Pr ime Minister Shinzo Abe agreed to pursue further talks leading to a VFA between Manila and Tokyo, to complement measures on de-fense, maritime cooperation and security commitments.

“Well, it [VFA with Japan] was discussed yesterday [Thursday] during our summit meeting with the Prime Minister that the rel-evant entities will start discus-sions, leading up to a Visiting Forces Agreement,” Aquino said.

He informed Abe that the en-visioned VFA between the Philip-pines and Japan “will have to be passed and approved by our Sen-ate, but we will be starting discus-sions on all of the details embodied in this.”

The President noted that the Phil-ippines currently has two VFA: “One with the United States of America and the most recently passed has been the one with Australia.”

“We welcome this develop-ment. We have only two strate-

gic partners, the US and Japan. And again, as I have stated previ-ously, it does not behoove a good partnership or relationship if you are not able to work at interop-erability with the other,” Aquino asserted.

Under the proposed VFA with Ja-pan, Japanese air and naval assets, apart from engaging in joint mili-tary exercises with the Philippine Armed Forces, would be allowed to refuel and use facilities at the former US air and naval base in Pampanga and Subic, Zambales, while on mari-time patrol in the region.

Chinese expansionASKED if he sees the need for a stronger defense commitment from the US given unchecked Chinese expansion of its footprint on the West Philippine Sea, Aqui-no cited the Enhanced Defense Cooperation Agreement (Edca) forged earlier between Manila and Washington.

“Precisely why we have this new agreement called—the acronym is Edca—Enhanced Defense Coop-eration Agreement. Our Constitu-

tion prohibits foreign bases in our country. But having said that, it does allow rotational presence [of US forces] in the region,” he said.

Aquino explained that Edca envisioned “an increase of rota-tional presence to foster, again, interoperabi l ity and transfer of knowledge and perhaps, tech-nology between America and the Philippines.”

The President recalled that the Mutual Defense Treaty be-tween the Philippines and Amer-ica started in 1951, adding that Edca is “ just a further refine-ment of a very strong and very long lasting relationship between the Philippines and America.” “And we see this as an improve-ment in making those agreed upon terms in the various treaties and agreements that much more real. It doesn’t exist just on paper, but it is an actual ability again to render support to each other, and it is.… We have to emphasize, Edca is not directed at any entity. It is just a refinement of a longstanding de-fense treaty between America and the Philippines.”

Antisubmarine planeJAPAN and the Philippines agreed on Thursday to start talks on trans-ferring Japanese military hardware and technology to the Southeast Asian country trying to upgrade its defenses.

Tokyo eased restrictions on exports of military equipment and technology last year as part of Prime Minister Shinzo Abe’s push to expand Japan’s military role abroad.

Under a strategic partnership agreement signed by Abe and Presi-dent Aquino, who is visiting Japan, the two countries will begin talks aimed at the export of Japanese hardware that may include anti-submarine reconnaissance aircraft and radar technology. The rules and details would still have to be discussed.

Japanese media reported that P-3C antisubmarine reconnais-sance aircraft and radar technology are possible export items.

A sale of the P-3C “Orion”, origi-nally designed by the US’ Lockeed Martin Corp. and produced in Japan by Kawasaki Heavy Indus-

tries, would be a more fully fledged military export than those cur-rently being discussed under the new rules.

Tokyo has signed defense coop-eration agreements with a number of countries to complement its cor-nerstone alliance with the US.

The strategic partnership agree-ment with the Philippines focuses on defense and security coopera-tion, but also includes economic assistance from Japan.

The two countries also agreed to bolster exchanges between their militaries through defense talks and joint exercises, as well as in disaster relief efforts. Tokyo signed a similar agreement with Malaysia last month.

Patrol boatsEARLIER on Thursday, Japan and the Philippines signed a deal con-firming the supply of 10 patrol boats to the Philippine Coast Guard (PCG) so it can step up patrols around South China Sea islands that are claimed by both the Phil-ippines and China.

Abe said Japan will provide further assistance to upgrade PCG capabilities.

In a joint statement, Abe and Aquino expressed “serious concern” about Chinese reclamation work in the South China Sea, warning against any unilateral actions that cause physical change to the mari-time environment. The Philippines and the US have protested China’s land reclamation and building up of islands in disputed seas. Japan, meanwhile, is at odds with China over a group of uninhabited islands in the East China Sea. With AP

MALACAÑANG refused to have anything to do with a

congressional resolution seeking to transfer  former President Gloria Macapagal-Arroyo, currently detained at a Veterans Memorial Hospital suite while facing trial on graft charges, under house arrest at her family residence in Quezon City.

Palace Deputy Spokesman Abigail Valte said on Friday the Office of the President would not intervene with the powers and functions of the Sandiganbayan court trying Arroyo’s case for alleged violation of the Antigraft  and Corrupt Practices Act during her nine-year incumbency.

“Well, that is a matter for decision that is up to the Sandiganbayan,” Valte told Palace reporters on Thursday, referring to the House resolution proposing to transfer Arroyo from hospital to house arrest. She assured that Malacañang will abide by whatever decision the graft court would hand down in connection with the House

Justice committee resolution to allow Arroyo to await the verdict on graft charges against her at home.

“Remember that the conditions for detention are set out by the court that has jurisdiction over her,” Valte added. “So, kung ano ho ang magiging treatment ng Sandiganbayan diyan ay aayunan lang po ng Executive branch.”

Earlier, the House passed a resolution that called on the Sandiganbayan to order the house of arrest of Arroyo, who is suffering from varius ailments triggered by a spine problem.

Arroyo represents the Second District of Pampanga in the House. Butch Fernandez

BEFORE the Skyway Stage 3 proponent, Citra Central Expressway Corp. (CCEC)

starts its full-blast construction on the project’s Section 1, Phase 2, it will first conduct a three-day traffic dry-run along the 225-me-ter stretch of Osmeña Highway between Skyway Buendia off-ramp and Dela Rosa Street starting at 6 a.m. on Saturday, June 6 until midnight of Monday, June 8.

The CCEC traffic management group, the Metropolitan Manila Development Authority (MMDA) and the traffic units of Makati City will jointly undertake the dry-run, prior to the implementation of the

final traffic management plan, in order to assess the traffic behavior in affected areas and to test the efficiency of the alternate routes that have been drawn up.

During the dry-run, and even-tually during the Phase 2 con-struction, the Buendia off-ramp will be temporarily closed. Mo-torists on light vehicles coming from the Skyway System’s elevated section going to Manila and the Makati Central Business District (MCBD) are, therefore, advised to exit at Magallanes, Don Bosco or Amorsolo.

Meanwhile, buses must exit at Magallanes or Don Bosco only.

Signages leading to alternate routes will be posted along the Sky-way and adequate number of the traffic enforcers will be deployed strategically to manage traffic and assist motorists.

The Skyway Stage 3 project is a 14.8-kilometer elevated express-way with eight access points in strategic locations that will con-nect South Luzon Expressway with North Luzon Expressway from Buendia in Makati City to Balint-awak in Quezon City. The project aims to decongest traffic on Metro Manila’s major thoroughfares like Edsa Avenue and C-5 Road, as well as the Central Manila area.

THE state-owned Bases Con-version and Development Authority (BCDA) slammed

the Sobrepeña-led CJH Develop-ment Corp. (CJHDevCo) for alleg-edly misleading the Court of Ap-peals (CA) to issue a Temporary Restraining Order (TRO) that has put on hold a portion of the Writ of Execution that orders CJHDev-Co and all persons claiming rights under it or sublessees to peacefully vacate Camp John Hay.

The Office of the Executive Clerk of Court and Ex-Officio Sheriff of Baguio is in charge of implement-ing the Writ of Execution.

“CJHDevCo blatantly misled the Court of Appeals of various lies that formed the very foundation for the issuance of TRO,” BCDA President Arnel Paciano D. Casanova said in a statement. He said CJHDevCo misled the CA into believing that there was going to be violence fol-lowing the end of the 30-day Notice to Vacate.

“I’m very sure that the Sheriff of Baguio who is implementing the Writ of Execution and the Notice to Vacate, and assisted by the National Police, will not start any violence.

So does that mean that the So-brepeña-led CJHDevCo has threat-

ened to provoke violence against the Baguio Sheriff?” Casanova asked.

Casanova also said that CJH-DevCo mislead the CA by saying that the P1.42 billion is advance rental payments when, in fact, it is a refund that should be paid by CJHDevCo to the sublessees.

It will be recalled that the Ar-bitral Tribunal of the Philippine Dispute Resolution Center Inc. came out with its Final Award that ordered CJHDevCo to vacate Camp John Hay and promptly deliver the leased property, inclusive of all new constructions and permanent im-provements to the BCDA.

Palace washes hands off Congress resolution for GMA’s house arrest

Philippines jumps nine places in ‘Rule of Law Index’

Buendia off-ramp closed for Skyway Stage 3 dry-run

Japan self-defense force p-3C Orion

CA misled in issuing TRO–BCDAmaCapagal-aRROYO

By Recto Mercene

T HE Phil ippines jumped nine places in the recently published “2015 Rule of

Law Index” by the World Justice Project, making it one of the most improved countries globally.

The Philippines ranked 51st out of 102 countries on the Roli, a significant jump from last year when the country ranked 60th out of 99 countries. This makes the Philippines the most improved among Association of Southeast Asian Nations member-countries.

Ambassador to Washington Jose L. Cuisia Jr. welcomed the good news and underscored the Philippines’s advocacy for the primacy of the rule of law.

“The Philippines believes that the rule of law is a key to advanc-ing human civilization. Peace, se-curity and stability in domestic and international societies are ensured by the members’ adher-ence to codified norms and rules,” Cuisia said.

He also cited efforts of the Aquino administration to en-hance transparency in the gov-ernment and control corruption.

Cuisia added: “Although there is work left to be done, I believe we are on the right track and I am hopeful that these positive devel-opments will continue.”

Members of the international community have lauded the im-provement made by the Philip-pines.

During the Roli publication re-lease, American Bar Association Rule of Law Initiative Director Elizabeth Andersen highlighted the Philippines as one of three countries considered as rule of law “success stories.”

Andersen cited certain judicial and policy reforms such as the Department of Justice’s court au-tomation initiative and govern-ment efforts geared toward help-ing remove the country from the Intellectual Property Watch List.

T he World Just ice Project defines the rule of law based on four universal principles derived from internationally accepted standards.

These are 1) accountability under the law; 2) clear, publi-cized and stable laws; 3) accessi-ble, fair and efficient enactment of laws; and 4) timely delivery of justice.Founded in 2006, the World Justice Project is an in-dependent, multidisciplinary, nonprofit organization aimed at advancing the rule of law around the world.

The Roli, published yearly since 2010, is the only rule of law and corruption perceptions index that combines both expert consulta-tion and data collection.

By Lenie Lectura

THE Department of Energy (DOE) has awarded 664 renewable-energy (RE)

contracts seven years after the Re-newable Energy Act of 2008 was enacted into law.

DOE approved 664 RE deals since 2008–data

As of end-April this year, the agen-cy said these contracts have a poten-tial generation capacity of 11,799.96 megawatts (MW) as against a total installed capacity of 2,799.70 MW.

Of the 664 RE projects awarded by the government, 403 are hydro- power; 82, solar; 50, wind; 44, bio-mass; 42, geothermal; and eight, ocean energy. These 629 contracts were awarded for grid use.

On top of these, there were 35 RE contracts awarded for self-genera-tion of electricity for their own use. These include one each for hydro and wind; 11 for solar, and 22 for biomass.

The latest DOE data also showed that there are 244 pending RE proj-ects, 117 of which are hydro; 42, solar; two, ocean; five biomass; 10, wind; and three, geothermal. The potential generation capacity of these pend-ing RE projects could reach 4,628.69 MW as against an installed capacity

of 697.80 MW. Under the National Renewable

Energy Plan, the DOE aims to in-crease the country’s RE generation to 15,304 MW by 2030. The DOE has already streamlined the process of RE applications, from two years down to just 45 days, to ensure that RE developers and investors will have an easier time in applying for RE service contracts.

Moreover, the DOE has partnered with the United States Agency for In-ternational Development to develop Energy Vehicle One Shared System (EVOSS), a Web-based monitoring of RE applications.

Originally patterned from the One-Stop Facilitation and Moni-toring Center Web Portal for Min-danao RE projects, spearheaded by the Mindanao Development Authority together with the DOE and other concerned the agencies,

EnvironmEnt advocates kicked off a million-signature drive in Quezon City against the construction of more coal-fired power plants in the country, even as Department of Energy data bared the approval of 664 renewable-energy contracts since the enactment of the renewable energy law in 2008. NoNoy Lacza

ThE National Transmission Corp. (Transco) remitted on Friday the feed-in-tariff al-

lowance (FiT-All) to North Luzon Renewable Energy Corp. (NLREC), operator of the 81-megawatt (MW) Caparispisan Wind Project, after be-coming the fourth-generation com-pany (genco) that has complied with all requirements.

“We’re going to pay four compa-nies by Friday,” Transco President and Chief Executive Officer Rolando Bacani told reporters.

Dinna Dizon, Transco Compli-ance Monitoring Department man-ager, added that the concession had instructed the Land Bank of the Philippines to pay the Caparisp-isan project.

She said the payment is expected to pushed through as scheduled on Friday. Transco serves as the fund administrator for the FiT allow-ance, which is the payment to re-newable-energy (RE) projects that have met various requirements. It

was a mechanism through the RE law that supports the jumpstart of the RE industry.

Through the FiT-All, generation companies would get paid for their total power produced for a fixed rate within 20 years.

Since Caparispisan qualified for the first round of Wind FiT, its rate for power production amounts to P8.53 per kilowatt-hour (kWh). NLREC would get the rate from November 11, 2014 until Novem-ber 10, 2034.

Dizon noted Caparispisan will join the other paid gencos, such as San Carlos Solar Energy Inc.’s 22-MW farm, Energy Development Corp.’s 150-MW Burgos Wind Farm and the 18.9-MW Bangui Wind Farm expansion.

The Caparispisan wind farm is a joint venture of Ayala’s subsidiary AC Energy holdings Inc., the Philip-pine Alliance for Infrastructure and the UPC Philippines Wind holdco.

Juzel L. Danganan/PNA

Transco remits feed-in-tariff allowance to 4th genco

A lAwmAker has filed a measure es-tablishing the Occupational Safety and Health Administration (Osha), which shall strictly and effectively enforce the 1978 Occupational Safety and Health Stan-dards set by the Department of labor and employment (DOle).

rep. winston Castelo of the Second District of Quezon City said that by pro-posing the creation of Osha, House Bill 5777 hopes to avert another tragedy resulting from a company’s noncompli-ance with safety standards.

Castelo cited the deadly fire that gut-ted down a slipper factory in Valenzuela City, killing 72 people. “The incident set alarm, thereby taking to task several government agencies to probe into the cause or circumstance surrounding the unnecessary number of casualties, both killed and injured,” Castelo said.

It appeared, he added, that “some standards are more on the breach than on compliance.”

“It seems that employers or compa-nies may have failed to ensure safety against occupational and health hazards of the workplace,” Castelo said.

Castelo sought to address the prob-lem by creating Osha under the DOle. “It is the primary urgency of the bill to set the highest level of compliance from errant or erring employers or companies unmindful of the total safety of workers or employees against imminent danger of death, illness and or injury through the imposition of criminal penalties as prescribed under existing laws,” Cas-telo said. PNA

THe National Police Commission (Napolcom) on Friday announced that the filing of applications for the Police executive Service eligibility (Pese) writ-ten examination for Police Commis-sioned Officers of the Philippine Na-tional Police (PNP) shall be from June 15 to July 31.

Napolcom Vice Chairman and execu-tive Officer eduardo U. escueta said the Pese written examination, which will be conducted on August 23 in Quezon City, Cebu City and Davao City, is open to qualified uniformed members of the PNP with the ranks of police chief Inspec-tor and above with permanent status of appointment.

escueta said the Pese is an eligibility requirement for promotion to the third- level ranks of police senior superinten-dent, police chief superintendent, police director, police deputy director general and police director general.

The Pese written examination focuses on six categories, namely, job knowledge, leadership competency, communication skills, analytical/logical reasoning, values and emotional quotient.

“The Pese eligibility process has two phases—written examination and Vali-dation Interview, and contains analytical questions on police leadership and po-lice values in order to get the best future leaders or the cream of the crop in the police service,” escueta said.

He added that passers of the writ-ten examination are eligible to take the second phase, which shall be announced after the release of the written examina-tion results. PNA

THe Philippine Navy (PN) has allo-cated P32,768,136 for the acquisi-tion of 1,432,800 rounds of 5.56 mm (SS109m855) ball ammunition.

These are the rounds being used by the various models of m-16 and m-4 automatic rifles equipping the Armed Forces of the Philippines.

winning bidders are required to de-liver the bullets with 90 calendar days.

Pre-bid conference is scheduled this coming June 10, 1 p.m., at the Office of the PN Bids and Awards Committee Bonifacio Naval Station, Fort Bonifacio, Taguig City. PNA

briefsLAWMAKER PUSHES

OSHA CREATION

NAPOLCOM OPENS APPLICATIONS FOR POLICE EXECUTIVE SERVICE EXAM

PN TO ACQUIRE 1,432,800 ROUNDS OF 5.56MM AMMO

Saturday, June 6, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

EconomyBusinessMirrorA4 news@businessmirror.com.ph

By Lorenz S. Marasigan

FILIPINO and Turkish air panels are set to meet next week in Cebu to modernize their air-services agreements that will pave the way for

better connectivity and competition in the market. Civil Aeronautics Board Executive Director Car-

melo L. Arcilla said the representatives from Manila and Istanbul are set to meet on June 9 and 10 to ne-gotiate for expanded air-traffic rights. 

“Cebu will be the venue of our next air talks, which will be with our counterparts from Turkey. The talks will be held on June 9 and 10,” he said in a text message. 

Currently, only Turkish Airlines serves the Istan-bul-Manila route. 

Data from the Department of Tourism showed that a total of 3,731 tourists from Turkey visited the Philippines in 2013. 

Trade between both countries is also robust. Data from Turkey’s Ministry of Economy showed that Turkey’s exports to the Philippines reached $135.5 million, while imports increased by 15 percent to $181.2 million in 2013.

The Philippine air panel has so far expanded air pacts with Singapore, Oman, Australia and Qatar this year. 

In February the local air panel was able to expand

the country’s air traffic to Singapore, increasing ca-pacity entitlements to 18,888 seats per week from 17,627 weekly seats. It also bagged additional flight frequencies from Oman in April, raising the coun-try’s  air-traffic entitlements to seven from three flights per week. 

The Philippines and Australia in April signed a new air pact, increasing the entitlements between Manila and Canberra to 9,300 seats per week from the current 6,000 seats per week.  

Last month the Philippines and Qatar increased the number of flights between their capitals to 14 flights per week from the current eight. The last round of air talks was held in 2009. 

In 2014 the Philippine air panel was able to yield additional flight entitlements from the following countries: Malaysia, hong Kong, Ethiopia, South Africa, Macau, Canada, Myanmar, New Zealand, Singapore and France.

The local regulator aims to improve the situation of passenger traffic by increasing seat entitlements as part of its drive to expand air-traffic rights. 

The government aims to generate $4.6 billion in tourism revenues by the end of the Aquino admin-istration.  It also aims to attract 6 million tourists and create 3 million jobs by 2016. This would allow the sector to contribute 6.35 percent to the gross domestic product. 

COTABATO CITY—In preparation for the Asean integration, the De-partment of Science and Technol-

ogy in Autonomous Region in Muslim Mindanao (DOST-ARMM) will conduct a halal congress in August this year to help propel the region’s bid to get a slice of the multibillion-peso global halal market.

Myra Mangkabung, DOST-ARMM regional secretary, said the highlight of the congress will be the launching of the ARMM halal Ecosystem (AhE), an interagency body that will oversee and coordinate the region’s efforts to become the hub of the halal industry in the country.

She said the congress is expected to draw in participants from all stakeholders, including various government agencies, local and foreign businesses, and foreign dignitaries, particularly from Malaysia.

halal products from different manu-facturers will also be exhibited during the congress.

halal products are those considered to be permissible in Islam, which are entirely free of pork, alcohol and, in case of poultry and livestock, slaughtered in accordance

with what is prescribed in Islam.Mangkabung said the event will al-

low stakeholders to discuss the latest updates on halal industry development in the region.

“The ARMM aims to be the center hub of the halal industry, not only in Muslim Mindanao but the entire country,” she said.

ARMM Gov. Mujiv hataman has as-sured his full support for the conduct of the activity and the region’s halal industry.

The development of the region’s halal industry is among the top economic agen-da of the present ARMM administration.

Apart from enforcing policies encour-aging investment in and the development of halal ventures, the ARMM has put up a Regional Standards and halal Testing Laboratory at the DOST-ARMM regional office in Cotabato City.

The testing lab is manned by highly competent Muslim chemists, who have un-dergone rigid trainings on halal laboratory procedures. It aspires to be the center of credible halal certification in the country.

Cotabato City hosts the most modern, state of the art and only double-A “halal slaugherhouse.” PNA

Manila, Istanbul slate new air talks in Cebu next week

DoST to host halal congress amid preparations for asean integration

the EVOSS aims to facilitate and streamline the process of RE appli-cations side by side the increase in the efficiency of all concerned agen-cies while fostering a strong private-public sector partnerships built on good governance, transparency and accountability.

The EVOSS can track the number of days an application is pending with a certain government agency. It tells the status of an application and states how long before an approval is secured, among others.

To promote the use of RE on a larger scale and to attract new invest-

ments for RE facilities, the govern-ment is banking on the feed-in-tariff (FiT) system.

FiT is a premium rate paid for electricity fed into the electricity grid from a designated renewable elec-tricity generation source like solar energy system or wind power plant.

PowEr from thE sun Budget secretary florencio B. Abad (right) leads the ceremonial switch-on of the 51.3-kilowatt-peak (kwp) grid-tied photovoltaic (Pv) power plant of the Procurement service-Philippine Government Electronic Procurement service (Ps-PhilGEPs) main office on Cristobal street in Paco, manila, on thursday. the Department of Budget and management is the first government agency to harness the power of the sun. Also in photo are (from left) Philippine national oil Corp. Executive Director Jose tomas syquia and Chief Executive officer Carlos Jose Gatmaitan; and Propmech Corp. Chief operating officer helen tong. PNa

By Cai U. Ordinario

The Asia-Pacific economic Cooperation (Apec) must monitor the performance of

their members in terms of protecting investors and paying taxes, accord-ing to a policy note released by the Philippine Institute for Development Studies (PIDS). 

Apec told: Focus on investor protection and tax settlement

This was among the recommen-dations in the the policy note titled “Performance of Apec economies in ease of doing business (EoDB)” authored by Asian Institute of Management and Policy Center economists Ronald U. Mendoza, Tristan A. Canare and former Phil-ippine Economic Society President Alvin Ang. 

The authors said that in light

of the latest EoDB rankings which showed that 15 of the 21 Apec mem-bers dropped in ranking in protect-ing investors from 2010 to 2015, and eight for paying taxes. 

“While Apec, as a whole, is per-forming well in the EoDB [Apec 2011 and 2012], performance across the group is highly variable. Some Apec economies are among the top performers in the world,

while others are still lagging be-hind,” the authors said.  

“Better-performing economies could provide support through knowledge transfer to lower-ranked ones. This would not be limited to the Apec summit but would be fol-lowed through on several occasions,” they added. 

The authors also recommended that the Apec should follow through on these areas of doing business by sharing knowledge and best prac-tices, as well as technology and workshops. 

The economists suggested that representatives of better-perform-ing Apec countries be allowed to ob-serve the process being implemented in other lower-ranking countries and recommend improvements. 

Further, the Apec must help promote sharing technology such as automation of submissions and processing of documents. The Apec, the authors also said, must conduct workshops on doing business for de-veloping country members. 

“Lower-ranked economies could

start reforming those that are easi-est to reform—changes that do not require amending laws that takes a long time to implement. Then, gradually proceed to the more com-plicated reforms,” the authors said. 

The policy note also recommend-ed that Apec countries that have registered lower performance in pro-tecting investors and paying taxes in the EoDB rankings can study the possibility of creating a specialized agency that handles doing business improvement concerns.  

The authors said this agency can be similar to the Philippines’s own National Competitiveness Council which includes representatives from the government, the private sector, academe and other stakeholders. 

There are important coordina-tion and governance challenges to be overcome in advancing these reforms notably in countries with a high degree of government decentralization.

In October 2014 the World Bank released the Ease of Doing Business 2015 report where the Philippines

ranked 95th out of 189 countries. In the 2014 Ease of Doing Business, the country ranked 108 overall.

The doing business report has 10 indicators—starting a business, dealing with construction per-mits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. 

This year, the Philippines ranked high, 16th out of 189, in getting elec-tricity, and ranked 50th out of 189 in resolving insolvency. 

Despite being ranked relatively high at 65th out of 189 in trading across borders, the World Bank not-ed that the imposition of the truck ban was having a reverse impact on the country’s performance in this indicator. 

The change, the bank said, “was making it more difficult to do business” in the country. The truck ban, however, has recently been lifted by the city of Manila and this has improved the flow of goods nationwide.

By Joel R. San Juan

THE Court of Appeals (CA) has rejected the plea of a Quezon City resident to stop the city government from implementing the so-called

Socialized Housing Tax (SHT) that imposes a 0.5-per-cent tax on assessed value of all lands in urban areas in excess of P100,000.

In a 17-page decision penned by Associate Justice Ramon Paul Hernando, the CA’s Seventh Division held that the Regional Trial Court in Quezon City did not err in denying the plea of petitioners belonging to the Alliance of Quezon City Homeowners Association Inc. for the issuance of a temporary restraining order and/or a writ of preliminary injunction enjoining the implementation of the new tax measure.

“After painstaking review of the arguments and evidence presented by the parties, we find that pe-titioners are not entitled to the grant of a prelimi-nary injunction for two reasons: first, the alleged right sought to be protected by the petitioners was not clearly demonstrated; and second, the require-ment of grave and irreparable injury is absent,” the CA pointed out. 

“The possibility of irreparable damage without proof of an actual existing right is not a ground for a preliminary injunction,” it added. 

The CA noted that residents anchored their right to an injunctive writ against the implementation of Ordinance 2095, S-2011 (or the Socialized Housing Tax) which was signed and approved by Mayor Her-bert Bautista, by claiming that as owners of real- estate properties in Quezon City with assessed value of more than P100,000, they would be required to pay additional 0.5-percent tax on their properties. 

Bautista  said the measure is necessary to provide the city government with sufficient funds to initiate, implement and undertake Socialized Housing Proj-ects and other preliminary activities.

The Appellate Court agreed with the findings of the lower court that the petitioners failed to prove that they have a clear and umistakable right to the injunctive writ. 

“Notably, the petitioners did not offer any tax declaration or evidence to prove that they are own-ers of real properties with an assessed value of more than P100,000 or that they have been assessed real- property taxes by virtue of the implementation of the assailed ordinance,” the CA ruling stated. 

Even if the petitioners presented strong vidence to prove their clear and umistakable right for the relief, the CA said they are still not entitled to an injunctive writ  as the damages alleged by them can be quantified. 

Under the rule, the CA said, a writ of preliminary injunction should be issued only to prevent grave and irreparable injury. 

The CA said the lower court correctly ruled that petitioners would not suffer irreparable injury.

“Any damage petitioners may suffer is easily sub-ject to mathematical computation and if proven, is fully ompensable by damages. Thus, a preliminary injunction is not warranted,” the CA added.

Concurring with the ruling were Associate Justices Fernanda Lampas Peralta and Stephen Cruz. 

CA upholds imposition of SHT in QC

BusinessMirror Saturday, June 6, 2015news@businessmirror.com.ph A5

EconomyThe National Power Corp. (Napocor) has dispatched Power Barge (PB) 113 to Camotes Island in Cebu to augment the island’s power supply.

PB 113 is capable of supplying 950 kilowatt to augment Napocor-Small Power Utilities Group’s (SPUG) Camotes Island Diesel Power Plant (DPP), which supplies the island with 1.7 megawatts (MW) of power. Together, these two power facilities will supply the mu-nicipalities of Poro, San Francisco and Tudela for a total of 2.65 MW.

The state firm said PB 113 was sourced from Siquijor whose power generation was already privatized.

Likewise, Napocor-SPUG is provid-ing power service in the nearby island-municipality of Pilar through Pilar DPP.

Camotes electric Cooperative Inc., the sole distribution utility in the is-land, has also noted the fast-growing number of its member-consumers brought about by the Sitio electrifi-cation Program as one of the reasons of the growing demand for power in the island.

Meanwhile, Napocor has extended its operation in the municipality of Culion in Palawan to 24 hours through Culion DPP, which services the Busu-anga Island electric Cooperative Inc.

Lenie Lectura

 MoTorIST are warned of a snail-paced traffic in some portions of C-5 in Pasig city, as well as in some areas of the cit-ies of Caloocan, Pasig and Quezon this weekend.

This, according to the Metropoli-tan Manila Development Authority (MMDA), is due to the scheduled road reblocking and repairs to be under-taken by the Department of Public Works and highways (DPWh) this weekend on Friday at 10 p.m. until Monday at 5 a.m.

MMDA Assistant General Man-ager for operations emerson Car-los said the road works would be conducted on the third outermost northbound lane of C-5 road, from Fr. Cement to Lanuza Street; on the sixth lane from sidewalk along edsa between Conception Street and evangelista Street, Caloocan City; first lane along Payatas road from Visayas Street to Zamora Street.

Going southbound on C-5 road (gap 4), road repair would be done along Pasig Boulevard to Bagong Ilog service road.

Carlos said DPWh-National Capital region Director reynaldo Tagudando has recommended the reblocking and repair of the said areas this weekend for maintenance purposes.

All affected roads will be fully pass-able by 5 a.m. on Monday.

Motorists are advised to avoid the said areas and use alternate routes in-stead. PNA

LAPU-LAPU CITY—The Mactan-Cebu International Airport (MCIA), the coun-try’s busiest airport outside Manila, has projected some 10 million arrivals in 2016, an official said.

Mactan-Cebu International Airport Authority (MCIAA) General Manager Nigel Paul Villarete said that this is the reason they are supporting GMr-Megawide Cebu Airport Corp. (GM-CAC) in fast-tracking the construction of the world-class Mactan Airport Ter-minal 2 (T2).

”With the T2, these 10 million pas-sengers will not overcrowd the air-port,” Villarete said.

GMCAC President Louie Ferrer said they can start the construction of T2 a few months from now.

The site is not yet available, as the facilities of the Philippine Air Force (PAF) are still to be replicated.

The replication of PAF facilities will cost some P800 million.

Workers on Tuesday started the de-molition of some of the PAF facilities to give way to the construction of T2.

Tourism officials said the Mactan Airport has contributed to Cebu’s eco-nomic growth. PNA

briefsNAPOCOR DEPLOYS PB 113

TO CAMOTES ISLAND

HEAVY TRAFFIC ON WEEKEND SEEN IN CALOOCAN, QuEzON CITY AND PASIG

MACTAN AIRPORT PROJECTS 10M ARRIVALS IN 2016

By Henry Empeño  

SUBIC BAY FreePorT—environment Sec-retary ramon J.P. Paje led officials here on Monday in formally commissioning two

hydrographic survey vessels for the National Mapping and resource Information Authority (Namria), an attached agency of the Department of environment and Natural resources.

Paje was joined by Namria Administrator Peter Tiangco, hydrography Branch Director Commo. Jacinto Cablayan, and Subic Bay Met-ropolitan Authority Chairman roberto Garcia during the launching rites at the Bravo Wharf in this free port.

The newly acquired hydrography ships, BrP Hydrographer Hizon and BrP Hydrographer Palma, are expected to boost the capability of Namria in performing the “almost impossible task” of gathering the latest and most accurate hydrographic and oceanographic data within Philippine waters, Paje said.

The new modern catamaran-type ships will be doing surveys from 10 to 3,000 meters deep, especially in ports, harbors and domestic sea lanes. Paje said that the data collected will be used in producing and updating nautical charts, electronic navigational charts and other nautical publications to ensure safety of navigation and aid in natural hazard mitigation and marine sci-entific research.

“We believe that despite limitation of equip-ment and resources, Namria is performing its tasks so well,” Paje said, adding that the vessels will be significantly helpful in defining the economic sea boundaries of the Philippines.

Namria’s new survey vessels are named after Capt. Andres hizon and Commo. Cayetano Palma, both former directors of the Bureau of Coast and Geodetic Survey.

The 23-meter aluminum catamarans   were built by Colorado Shipyard in Cebu in 2013 and were brought here to Subic in July last year.

The ships, classed by the International registry of Shipping, are complete with updated naviga-tional system, security and safety system, survey systems and instrument and hardware, and hy-drographic survey workstations, and have fully furnished cabins.

Paje said the ships will most likely see action first at the Benham rise, part of the country’s continental shelf in the Pacific ocean.

“With the two additional mapping vessels, we must start now to map and protect our coastline and waters,” Paje said, noting that some european countries have already claimed parts of the mineral fields in the ocean east of the Philippines.

It was not immediately known whether the new Namria vessels will be homeported in Subic.

As of now the Port of Subic is home to the Philippine Navy’s two hamilton-class cutters, the BrP Ramon Alcaraz and BrP Gregorio del Pi-lar, which were acquired from the US last year.

2 Namria survey ships launched in Subic Bay

Roasted coRn on the cob a sidewalk vendor in caloocan city makes a living out of selling roasted sweet corn from commuters and passersby at P25 per cob. Kevin de la Cruz

natIonaL Mapping and Resource Information authority hydrography branch director commo. Jacinto cablayan (second from right) shows environment secretary Ramon J.P. Paje (right) and sbMa chairman Roberto Garcia (center) around the control room of bRP Hydrographer Palma during the commissioning ceremony. Photo Courtesy of sBMa

Saturday, June 6, 2015

OpinionBusinessMirrorA6

China: A history of bad policy

editorial

IF you wanted to write a textbook on how a nation should not conduct its foreign policy, all you would have to do is copy and paste Chinese actions in the last 65 years.

Soon after taking power in China, the government of Mao Zedong an-nexed Tibet in 1950. Granted that these two countries had been at war on and off for 1,000 years, Tibet offered little to China except the oppor-tunity to kill around 500,000 Tibetans. Further, India and China fought border wars in the area and pushed India to side with the Soviet Union during the Cold War.

Mao also supported the North Koreans, sending in troops to fight against the US-led United Nations forces. While advancing Chinese communism into one of the most godforsaken places on the planet, it created a nation that has become a dangerous, nuclear-armed thorn in the neck for China and the region, as well as the whole world.

China and the Soviet Union fought several major border wars and in the end, China lost about 1 million square kilometers of territory to Russia over the decades. Now these two countries are great friends as China needs Russia’s oil and Russia needs China’s cash.

Japan and China are tied up in a territorial dispute over the Senkaku Is-lands/Diaoyu Islands which had been uninhabited “navigational markers” for centuries. That means ships coming from the Western Pacific used the islands as a road sign—turn left for China; go right for Japan.

But China wants any place that might potentially hold even a drop of crude oil in spite of the fact that Japan is China’s largest foreign investor, directly or through Hong Kong companies.

The list of nations that China has not “annoyed” is small.China had the opportunity to take Southeast Asia under its wing and

away from the strong influence of the US. Thailand asked the US military to leave after the Vietnam War. Vietnam has its own negative history with the US as does the Philippines. Indonesia is still not happy with US interfer-ence in its affairs. While publically close allies, less than half of Malaysians view the US favorably. Only Singapore is firmly in the US camp due to its close economic interests.

The US has other more pressing foreign problems like the Middle East and the Ukraine to deal with. But China, with its typical policy wisdom, is forcing the Philippines and Vietnam in particular to strengthen relations with the US.

The more serious situation is this: like people who make irrational deci-sions that are not even in their own self-interest, very bad decisions can lead to very bad actions.

China has put the region on a potentially perilous path.

IN response to this column on Tuesday, “They Are Coming For Your Money,” one person asked tersely, “What’s the point?”

I thought, as usual, that I had outlined a clear and somewhat brilliant analysis of how and why governments were coming after cash-money to pay government debt and to control the population in the event of any social unrest due to bad economic conditions.

Why governments want your cash

But of course, readers are always more sensible and reasoned than are writers. So please allow me once again to attempt to make my point on the potential of government tak-ing away physical cash.

In 2009 the US and European central banks lowered interest rates to 1 percent or less. Borrowing was supposed to be so inexpensive, that everyone would run to the bank, bor-row huge amounts of cheap money, and boom the economy. But banks were very cautious about lending to ordinary consumers and business and the borrowers were even more cautious. So we have had six years of almost no borrowing for economic expansion and, therefore, almost no economic growth.

What borrowing that has been done has been to buy stocks, houses for speculation, an occasional new

car, and to refinance previous debt.People invest based on confi-

dence. By the time Quantitative Easing 2 had come around, they knew that the government did not have things under control because government policy was not creat-ing economic growth. You will not borrow money at 1 percent if you do not expect to make a return of more than 1 percent.

No matter what the central banks have done or are doing, people refuse to borrow and spend. It has become so bad that in the Wall Street Journal newspaper, columnist Jon Hilsen-rath (an unofficial mouthpiece for the US Federal Reserve) wrote this on Tuesday in a column titled “A Let-ter to Stingy American Consumers.”

“The sun shined in April and you didn’t spend much money. Do you know the American economy is

counting on you? We can’t count on the rest of the world to spend money on our stuff. You should feel lucky you’re not a Greek consumer. The Federal Reserve is counting on you too. Fed officials want to start raising the cost of your borrowing because they worry they’ve been giving you a free ride for too long with zero in-terest rates.”

Here is the key part, “You have been saving more too. You socked away 5.6 percent of your income in April after taxes, even more than in March. This saving is not like you. What’s up?”

Every personal finance guru is go-ing to talk first about saving money as you must. A buffer equal to six-months of your income is sensible. Yet, a savings rate of 5.6 percent is equal to only three-month buffer. And the US Fed thinks Americans are saving too much.

As confidence in the government continues to deteriorate, people will want their cash, as I said before, and a run on the banks can quickly bring the fragile banking system in the West to collapse. If people can-not use cash, then there cannot be a bank run. It has happened before during the Great Depression when the US confiscated what was then the ultimate cash instrument: gold. Overnight, it was illegal to own gold. Remember, back then US dollars were convertible into gold.

In Europe, negative interest rates

are designed to get consumers to spend as saving money costs money. But it is not working. The next step is the “Use it or lose it” policy.

Governments can and will confis-cate bank deposits if people do not spend the money. But this can only be done if all “money” is electronic and not stored in cash under your bed. Why do you think governments are going crazy about Bitcoin and other digital money that they cannot get their hands on or even know about?

From the governments’ point of view public holding of cash must be eliminated or at least curtailed. That policy will prevent bank runs. Governments can forcefully make people spend their wealth where and when the government desires. When money is only available in electronic form, there is no way to hide from government confiscation.

How do we know this is a pos-sibility? Because the mainstream press and the media in the West has suddenly been presenting a constant stream of stories about how much better the global economy would be if it were not for all that physical cash sleeping in the banks.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunon-markets.com. Follow me on Twitter @mangunonmarkets. PSE stock-mar-ket information and technical analysis tools provided by the COL Financial Group Inc.

OUTSIDE THE BOXJohn Mangun

THERE are plenty of people in Asia who believe Haruhiko Kuroda, governor of the Bank of Japan (BOJ), lives in Neverland. At the very least, economists on both sides of

Japan’s deflation debate—those who worry Kuroda has weakened the yen too much, and those who believe he hasn’t done enough—think his policies have been out of touch.

Japan’s Peter Pan problem

But it was still surprising to hear Kuroda admit on Wednesday that his policies are guided by imagina-tion—specifically, the Japanese pub-lic’s willingness to imagine they’re working. “I trust that many of you are familiar with the story of Peter Pan, in which it says, ‘the moment you doubt whether you can fly, you cease forever to be able to do it,’” he said at a BOJ-hosted conference.

I’ll admit it’s somewhat distress-ing when the central banker manag-ing the currency in which you’re paid suggests he’s relying on children’s stories for guidance. But Kuroda’s

quote merits close scrutiny: It speaks volumes about why his policy of set-ting ultralow interest rates has failed to gain traction.

Some might say Peter Pan, a boy who never grows old on the small is-land of Neverland, is the wrong meta-phor for Japan, where 26 percent of the country’s 127 million citizens are over 65, and aging fast. A better reference, one could argue, is Alice in Wonderland, since Kuroda’s low interest rates have created a world where investors increasingly find it difficult to distinguish between il-lusion and reality.

But in other ways, Peter Pan is an entirely apt metaphor. Just like young Peter, Kuroda’s quantitative easing program has never grown up; what was supposed to be a temporary policy increasingly seems like a per-manent one.

Granted, this isn’t entirely his fault. The BOJ’s job would be much easier if Prime Minister Shinzo Abe carried out his promises of struc-tural reform.

But as much as central banking is a matter of liquidity, it’s also a confidence game. Just as theater directors are supposed to compel audiences to suspend their disbe-lief, Kuroda’s responsibility is to set monetary policy in a way that gives the public a feeling of hope about the economy—and induces them to increase spending.

It’s on this emotional level that Kuroda is failing. Investors, par-ticularly those overseas, seem to feel optimistic about low interest rates: They’ve driven the Nikkei up 36 percent over the last 12 months. But Japanese consumers don’t feel the magic and aren’t spending—in-flation still hasn’t approached the BOJ’s desired 2-percent target.

This is where Kuroda penchant for space metaphors becomes rel-evant. “In order to escape from de-flationary equilibrium, tremendous velocity is needed, just like when a spacecraft moves away from Earth’s strong gravitation,” he said in Feb-ruary. “It requires greater power than that of a satellite that moves in a stable orbit.”

Unless Tokyo acts faster to lift living standards, Japan will never achieve Kuroda’s desired escape ve-locity. My advice would be for Kuroda to talk less to the Japanese masses, and try to work some magic with Abe’s government. Until the govern-ment does its part by loosening labor markets, lowering trade barriers and creating tax incentives to support en-trepreneurship, Kuroda’s yen print-ing won’t save the day.

In the meantime, the behavior of the Japanese public will be the best gauge of whether the government is doing enough to lift the country from two decades of stagnation. For now, it’s obvious that they don’t believe the national economy is capable of taking flight. And fanciful stories from public officials won’t convince them otherwise.

BLOOMBERG VIEWWilliam Pesek

Saturday, June 6, 2015

OpinionA7BusinessMirroropinion@businessmirror.com.ph

Evangelii Gaudium

61st part

Star of the new evangelization

We ask the Mother of the living Gospel to intercede that this invitation to a new phase of evangelization will be accepted by the entire ecclesial community.

Mary is the woman of faith, who lives and advances in faith, and “her exceptional pilgrimage of faith repre-sents a constant point of reference for the Church.” Mary let herself be guided by the Holy Spirit on a journey of faith toward a destiny of service and fruitful-ness. Today we look to her and ask her to help us proclaim the message of salva-tion to all and to enable new disciples to become evangelizers in turn. Along this journey of evangelization we will have our moments of aridity, darkness and even fatigue. Mary herself experienced these things during the years of Jesus’ childhood in Nazareth: “This is the be-ginning of the Gospel, the joyful good news. However, it is not difficult to see in that beginning a particular heaviness of heart, linked with a sort of night of faith—to use the words of Saint John of the Cross—a kind of “veil” through which one has to draw near to the In-visible One and to live in intimacy with the mystery. And this is the way that Mary, for many years, lived in intimacy with the mystery of her Son, and went forward in her pilgrimage of faith.”

There is a Marian “style” to the Church’s work of evangelization. When-ever we look to Mary, we come to be-lieve once again in the revolutionary nature of love and tenderness. In her we see that humility and tenderness are not virtues of the weak but of the

strong who need not treat others poorly in order to feel important themselves. Contemplating Mary, we realize that she who praised God for “bringing down the mighty from their thrones” and “sending the rich away empty” (Luke 1:52-53) is also the one who brings a homely warmth to our pursuit of jus-tice. She is also the one who carefully keeps “all these things, pondering them in her heart” (Luke 2:19). Mary is able to recognize the traces of God’s Spirit in events great and small. She constantly contemplates the mystery of God in our world, in human history and in our daily lives. She is the woman of prayer and work in Nazareth, and she is also Our Lady of Help, who sets out from her town “with haste” (Luke 1:39) to be of service to others. This interplay of justice and tenderness, of contempla-tion and concern for others, is what makes the ecclesial community look to Mary as a model of evangelization. We implore her maternal intercession that the Church may become a home for many peoples, a mother for all peoples, and that the way may be opened to the birth of a new world. It is the Risen Christ who tells us, with a power that fills us with confidence and unshake-able hope: “Behold, I make all things new” (Revelation 21:5). With Mary we advance confidently toward the fulfil-ment of this promise, and to her we pray:

SERVANT LEADERRev. Fr. Antonio Cecilio T. Pascual

For comments, e-mail caritas_manila@yahoo.com. For donations to Caritas Manila, call 563-9311. For inquiries, call 563-9308 or 563-9298. Fax: 563-9306.

DATAbASECecilio T. Arillo

Ferdinand Marcos Jr. exercises prudence

UNLIKe his imperious peers in the House who railroaded the passage of the Bangsamoro basic law (BBL) at the ad hoc committee level, Sen. Ferdinand “Bongbong” Marcos Jr. is

exercising prudence in handling the BBL issue.

“The BBL in its present form and substance will not bring us any closer to peace but lead us to perdition,” Mar-cos said.

He pointed out that Malacañang advisers on the peace process “totally ignored” some of the major stakeholders in their negotiations for peace, including the Moro National Liberation Front, the Sultanate of Sulu, the Lumad, indigenous people, Christians and local government units (LGUs).

As a result, the governors of South Cotabato, Palawan, Zamboanga del Sur and Davao del Sur provinces currently outside the Autonomous Region in Mus-lim Mindanao (ARMM) told Marcos at Senate hearing on Wednesday that they did not want to join the proposed Bangsamoro substate.

“We request that in order to pur-sue a lasting peace in Mindanao, the wish of those who do not want to join the proposed arrangement should be respected,” Davao del Sur Gov. Claude Bautista told Marcos at the hearing.

“The framework of the BBL doesn’t even give us leeway to be consulted whether we want to be included in the BBL,” Bautista said.

Bautista, who strongly protested that the authorities in the provinces proposed to be included in the Bangsamoro entity had not even been consulted, echoed the sentiments of Governors Daisy Avance-Fuentes of South Cotabato, Jose Alvarez of Palawan and Antonio Cerilles of Zam-boanga del Sur.

Cerilles resolutely said he was for peace but his province did not want to join the Bangsamoro region. Alvarez said his constituents did not want to join as well, saying that his province was giving a “resounding no.” For her part, Fuentes vehemently objected to the province’s inclusion in the new region. One of the many local executives that the commit-tee invited to the hearing, Cerilles said there should be a “national debate, from Batanes down to Tawi-Tawi” on the BBL.

“If there is no national debate, then our voices would not be heard,” Cerilles said. “We should be included in the debate because that would af-fect my province, Zamboanga City, and other provinces.”

In a related development, former Chief Justice Reynato Puno said the proposed BBL is only possible under a parliamentary form of the govern-ment, which is not allowed under the Constitution.

“We are limited by the boundaries of power set in the 1987 Constitution. The powers in the Constitution are central-ized in the national government,” Puno said. He explained that the 1987 Consti-tution provides that the national govern-ment can only delegate certain powers, which are subject to many conditions, and are not permanently delegated as in the case of the draft BBL.

Marcos, chairman of the Senate local government committee holding hear-ings on the proposed Bangsamoro entity that would supplant the existing consti-tutionally mandated ARMM, stood on the floor at the close of the hearing and

declared he could not support the BBL “in its present form.”

Instead, he offered a substitute mea-sure in his final report that he said would be good for all after conducting one more BBL hearing.

According to Marcos, the proposed alternative arrangement would be a “product of What we have learned in the hearings, adding that “this includes the findings of Sen. Miriam Defensor-Santiago’s committee on constitutional amendments that certain provisions in the draft BBL were unconstitutional.”

He said he will remove, among oth-ers, the controversial “opt-in” provi-sion that would expand the proposed Bangsamoro territory.

“I am confident that the commit-tee report and the substitute bill will be completed during the recess period,” Marcos said.

Voting 35-17, the panel thumbed down the proposal of Rep. Celso Lobregat of Zamboanga City to delete the so-called opt-in provision contained in Article III Section 3. The provision allows voters in areas contiguous to the envisioned Bangsamoro region to hold a plebiscite to join the new political entity after the BBL is passed.

The revised provision in the newly issued Chairman and Vice Chairmans’ Working Draft of the BBL states that any LGU or geographic area outside the ter-ritorial jurisdiction of the Bangsamoro may opt to be part of the Bangsamoro by filing a petition of at least 10 percent of the registered voters in the LGU or geographic area.

The section further provides that the inclusion of the aforementioned areas in the Bangsamoro shall be ef-fective when approved by a majority of votes cast in the plebiscite of the po-litical units directly affected. However, the petitions for inclusion may only be filed on the fifth and 10th year follow-ing the BBL’s enactment.

Rep. Rufus B. Rodriguez of Cagayan de Oro, ad hoc committee chairman, originally pushed for the deletion of the opt in provision after he agreed with some of his colleagues’ comment that it constitutes “creeping territorial expan-sion.” even the Peace Council tasked by Malacañang to review to Bangsamoro bill had recommended its removal.

The controversial clause, however, found its way to the latest version of the working draft on the BBL, follow-ing Rodriguez’s consultation with com-mittee vice chairmen starting May 14.

“This is a very contentious provi-sion everywhere we went, especially in the areas surrounding the Bangsamoro region,” Lobregat added.

Rep. Ferdinand Hernandez of South Cotabato has warned that approving BBL with the opt-in provision will cause instability as “the leaders of these areas contiguous to the Bangsamoro region will always watch their backs for the next five years over possible encroachment of the Bangsamoro toward their areas.

To reach the writer, e-mail cecilio.arillo@gmail.com.

By Ann McFeatters | Tribune News Service/TNS

WASHINGTON—You will be relieved to learn that consci-entious female Transportation Security Administration (TSA) agents just confiscated a gift set of perfume for

my mother because it was just over three ounces. Barely.

National security apparatus is invasive but not very effective

By Darryl Lorenzo Wellington

Tribune News Service/TNS

AMeRICANS would be well-advised to heed presidential candidate Sen. Bernie Sand-

ers’s call to make public college edu-cation free.

A college degree is so important to getting a decent job these days, we must begin to see higher education as a right. Some Americans pursue a col-lege diploma; others don’t. But making sure that the option is available to ev-eryone, even those whose parents are hard-pressed to pay for it, is necessary

to preserving a free society.“It is totally unacceptable that

Americans are drowning in $1.2 trillion in student loan debt,” says Sanders, I-Vermont. “It is unaccept-able that millions of college gradu-ates cannot afford to buy their first home or their first car because of the outrageously high interest rates they are paying on student debt.”

Sanders’s plan uses federal funds to eliminate state tuitions, while drastically reducing interest rates on student loans for private colleges and universities. It will cost the federal government an estimated $70 bil-lion per year. That sounds expensive.

But, in fact, the country can easily raise the funds by taxing Wall Street stocks and derivative transactions. The proposal, called a “Robin Hood” tax, has been supported by several leading economists.

The most vociferous opposition to the plan comes from right-wing politicians, who have already caused so much damage to college students. It’s been too little publicized that House Republicans voted recently to curtail federal student financial aid programs, even proposing to freeze student Pell Grants.

These House members are di-vorced from the reality a lot of young

people face. The financial barriers to attending college are higher than ever. It’s uncertain how many po-tential students don’t go to college because of the cost. We do know, however, that college enrollment has declined by approximately 1 million since 2011. eliminating public col-lege tuition could reverse the trend.

We also know that while a decade ago student debt totaled $300 bil-lion, today it has risen to more than $1 trillion. The average debt of a student is $30,000. In 2013 42 per-cent of black students carried loan debt, compared to only 28 percent of whites. The trap exacerbates the

wealth gap between races.But debt leads to unnecessary fi-

nancial stress on all young graduates. Many have to take a second, usually low-paying, job to make ends meet.

And young people in debt have less money to invest. Studies have shown that heavy student debt leads fewer graduates to risk starting their own small businesses. They are also much more likely to put off for many years big purchases like a new car or a home. The debt trap is sapping America of its entrepreneurial spirit and preventing college graduates from joining the middle class.

Many students who take on

crushing debt as the price of a col-lege degree experience immense pressure to “make it pay” and earn a degree in a lucrative field. A healthy society cannot only educate MBAs. eliminating college tuition would in-spire more students to go to school to contribute to society as teachers, historians, researchers or employees in the nonprofit sector.

Student debt is a shackle encum-bering our society. It’s time to be-gin discussing ways to remove this shackle and allow more young people a chance to achieve their potential? Sanders’ proposal is a welcome addi-tion to the discussion.

Education should be free in a free society

But don’t relax. An undercover investigation found 95 percent of 70 attempts to smuggle banned weapons or mock explosives aboard planes were undetected by TSA agents at dozens of US airports.

I know. You are thinking you couldn’t even get away with keep-ing your belt on and got a TSA tongue lashing for not pulling out your laptop.

The new tests on TSA were con-ducted by Homeland Security, first reported by ABC News, which said agents failed 67 out of 70 tests.

Heads at TSA shifted but did not roll. TSA, with an $11-billion annual budget, is in trouble more than not. For years investigators have been getting through security with fake bombs or weapons taped to their bodies or in carry-on luggage.

Last September a review of checked baggage procedures found “vulnerabilities” caused by human error and technological failures. That report concluded that TSA

spent $540 million since 2009 for screening equipment and $11 mil-lion on training, TSA failed to make noticeable improvements.

In addition to failures document-ed in official government reports, some rogue computer security guy recently hacked into a plane’s enter-tainment system to show he could take control of navigation.

The new head of the FBI’s Cin-cinnati division, Angela Byers, said she was surprised at the high level of threat in Ohio. “It’s scary. I’m not sure the general public gets the grav-ity of it,” she told the Associated Press (AP). (A Columbus man and a Cincin-nati man were arrested in separate cases charged with plotting terror-ist attacks. They pleaded not guilty.)

Nationally, we’re in the midst of a troubling review of security, searching for balance between keep-ing America safe and not destroying our civil liberties.

The courts have ruled the government has been illegally

spying on its citizens. Thus, Congress just passed the USA Freedom Act, signed by President Barack Obama, which provides a little more govern-ment transparency and leaves pri-vate phone data in the hands of 1,400 private telephone companies unless a special court grants warrants or permission to wiretap.

But we’re talking a lot of loop-holes here.

The AP also reported the FBI has been conducting up to 2,000 secret flights a year over US cit-ies with cameras and cell-phone listening equipment. Sounds like secret surveillance to me. The FBI says it’s legal.

The Senate, in turmoil, has been debating the merits of the Patriot Act, a series of restrictions on Ameri-cans passed after the September 11, 2001, terrorist attacks. A majority of senators say the Patriot Act went too far in eroding civil liberties and hasn’t worked all that well to stop terrorists, such as the Boston Mara-thon bombers, who were on the radar.

(Apparently, the Patriot Act’s most recent success was in catching former House Republican Speaker Dennis Hastert allegedly trying to pay millions to keep a former stu-dent or students silent about what might have gone on when Hastert

was a high-school wrestling coach.)On the other hand, hawks, such

as Senate Majority Leader Mitch McConnell, Republican-Kentucky, who opposed the current Freedom Act, think the nation is too lax in collecting data. They want this to be an issue in next year’s presiden-tial election.

One hawk, Sen. Lindsey Graham, Republican-South Carolina, is so horrified by the state of national security he is basing his presiden-tial campaign on the “entire world exploding in terror and violence.” His announcement speech was extremely depressing, made even more inexplicable by his campaign song, James Brown’s “I Feel Good.” Graham wants to go back into Iraq, for starters, which would not make most of us feel good.

Sen. Rand Paul, Republican-Ken-tucky, is basing his presidential cam-paign on stopping all surveillance, having employed his parliamentary tricks in vain.

It’s confusing. We are safer than on 9/11; we’ll never be really safe.

A few things are clear. The gov-ernment ineptly will keep spying on us. The fight to maintain our liber-ties will never be over. Do not take gift perfume on an airplane even if a salesman assures you it’s OK.

Mary, Virgin and Mother,you who, moved by the Holy Spirit,welcomed the word of lifein the depths of your humble faith:as you gave yourself completely to the Eternal One,help us to say our own “yes”to the urgent call, as pressing as ever,to proclaim the good news of Jesus.

Filled with Christ’s presence,you brought joy to John the Baptist,making him exult in the womb of his mother.Brimming over with joy,you sang of the great things done by God.Standing at the foot of the crosswith unyielding faith,you received the joyful comfort of the resurrection,and joined the disciples in awaiting the Spiritso that the evangelizing Church might be born.

Obtain for us now a new ardour born of the resurrection,that we may bring to all the Gospel of lifewhich triumphs over death.Give us a holy courage to seek new paths,that the gift of unfading beautymay reach every man and woman.

Virgin of listening and contemplation,Mother of love, Bride of the eternal wedding feast,pray for the Church, whose pure icon you are,that she may never be closed in on herselfor lose her passion for establishing God’s kingdom.

Star of the new evangelization,help us to bear radiant witness to communion,service, ardent and generous faith,justice and love of the poor,that the joy of the Gospelmay reach to the ends of the earth,illuminating even the fringes of our world.

Mother of the living Gospel,wellspring of happiness for God’s little ones,pray for us.

Amen. Alleluia!

Given in Rome, at Saint Peter’s on November 24, the solemnity of our Lord Jesus Christ, King of the Universe, and the conclusion of the Year of Faith, in the year 2013, the first of my pontificate.

Pope Francis

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phSaturday, June 6, 2015

By Bianca Cuaresma

The country’s foreign-currency reserves inched up in May and hit a nine-month high to $80.86

billion on account of the expanded valuation of gold holdings, as well as inflows from the foreign-exchange operations of the central bank.

The Philippine peso fell to a five-month low as Asian currencies weakened amid a global sell-off in

bonds and as Greece’s inability to repay its debt deterred risk-taking. Yields in Asia tracked those on euro area and US debt higher after european Central Bank President Mario Draghi said markets need to get used to in-creased volatility. Greece delayed a payment to the International Mon-etary Fund due on Friday as negotia-tions with creditors failed to produce a resolution. A report released on Fri-day showed Philippine inflation was the lowest since at least 1998, as first-quarter economic growth slowed. The peso fell 0.1 percent on Friday to 44.870 a dollar in Manila, the low-est close since January 12, prices from the Bankers Association of the Philip-pines show. The currency dropped 0.6 percent for the week, taking losses in the past three months to 1.7 percent. “We’re seeing a broad dollar move across the region, so the extent of the peso’s fall may be sustainable,’’ said Alan Cayetano, head of foreign-exchange trading at Bank of the Philippine Islands in Manila. “We’re also getting the Greece effect, so that’s adding to risk aversion.” he forecasts a year-end exchange rate of 45.50 to 46.50. Consumer prices rose 1.6 percent in May from a year earlier, the Philippine Statistics Authority reported on Friday. That was less than the median estimate

in a Bloomberg survey for a 1.9-percent increase. The economy expanded 5.2 percent in the first quarter, the least since 2011.

Policy outlookBAnGko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said on Friday that inflation was within the central bank’s forecast range of 1.6 percent to 2.4 percent. The approaching el niño weather pattern, which tends to deplete rainfall, could push up food prices as crop yields fall. “Inflation expectations continue to be well-anchored and growth is still solid,” Tetangco said. The central bank remains watchful of developments, particularly oil-price movements and the impact of el niño, he said. “We will consider all these during our next policy meeting to see if there’s a need to adjust the stance of monetary policy,” he said. The next interest-rate review is on June 25. The Philippines has refrained from joining other central banks in the region in easing policy to spur growth and do-mestic demand. It’s kept the benchmark interest rate at 4 percent since raising it last September. The yield on the nation’s five-year government bonds was little changed this week at 3.92 percent, according to an end-of-day fixing from Philippine Dealing & exchange Corp. It rose 50 basis points Friday. Bloomberg News

Foreign-exchange reserveshit $80.86 billion in May

  The Bangko Sentral ng Pilipinas (BSP) reported on Friday the gross international reserves (GIR) proved higher than the $80.85 billion re-ported in April and the $80.242 billion reported in May 2014. This was the country’s highest foreign-currency hoard since August 2014, when that same pile of foreign currencies hit $80.87 billion. “The increase in reserves was due mainly to the BSP’s foreign-exchange operations, revaluation adjustment on its gold holdings and income from its investments

als and payments for its maturing foreign-exchange obligations, as well as so-called revaluation adjust-ments on the BSP’s foreign-currency denominated reserves.   The current GIR remained “am-ple” as it can adequately cover 10.6 months’ worth of imports of goods and payments of services and income. It was also equivalent to 4.9 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity. The GIR is a pool of assets useful in underwriting maturing foreign obligations. Gold, special drawing rights (SDR), foreign investments and foreign-exchange reserves make up the country’s GIR. The higher the reserves the

better an economy, like the Philip-pines, is able to meet such liabili-ties as maturing foreign loans and exigencies, such as the need to sta-bilize a given country’s currency that has come under speculative attack, for instance.  Across components, foreign investments still account for the largest chunk in the country’s GIR at $71.248 billion. This was lower than the $71.547 billion reported the previous month. Foreign-exchange operations, meanwhile, accounted for $496.3 million during the period, higher than the $260 million reported a month earlier. Gold holdings were valued up-ward during the month to $7.48 billion from $7.4 billion previously. 

Philippine peso drops as bond sell-off, Greece cut risk appetite

Here’s a look at the competing cases for the Fed’s next move.

Don’t be hastyIMF Managing Director Christine Lagarde said the risks of raising rates too soon—and wounding the economy before it’s reached full strength—outweigh the risks of waiting a bit too long and allowing inflation to creep up. “The economy would be better off with a rate hike in early 2016,” Lagarde said at a news conference. The Commerce Department reported last week that the US economy shrank at an annual rate of 0.7 percent from Janu-ary through March. A widening trade deficit was largely to blame, reducing growth by 1.9 percent-age points. The stronger dollar makes US exports more expensive overseas and foreign imports cheaper in America. Inflation still is well short of

the Fed’s 2-percent target. The IMF doesn’t see it hitting that level until mid-2017. The inflation threat looks distant now: Consumer prices were lower in April than they’d been a year earlier, largely because of tumbling oil prices. The IMF calls for the Fed to hold off on a rate increase until “there are greater signs of wage or price infla-tion than are currently evident.”

Do it, alreadyDeSPITe the nasty first quarter, “we’re seeing more signs that the economy is gathering momen-tum and that a rate increase in September looks more appropri-ate,” said Bernard Baumohl, chief global economist at the economic Out-look Group. The job market certainly looks healthy. employers are adding jobs—nearly 3 million over the past year—at a rate not seen since the boom years of 1998 to 2000. Unemployment fell in April to

a seven-year low 5.4 percent. If the Fed waits too long, it could lose its grip on inflation—and its inflation-fighting credibility with financial markets. “If there’s a belief that the Federal Reserve is behind the curve in controlling inf lation, more investors would lose con-fidence,” Baumohl said, arguing that inflation lags other signs of economic strength. Another worry: Super low inter-est rates encourage investors to seek higher returns in riskier invest-ments. That can drive up the prices of stocks, long-term bonds and other investments to dangerous levels. “The longer the Fed waits, the higher the price they are going to pay in terms of the market volatil-ity that could occur including the potential of a crash in the stock market and the bond market,” said David Jones, an economist who has written several books on the Fed. AP

abroad,” the central bank said. The BSP further noted that the GIR in May could have been higher, if not for the national government’s net foreign-currency withdraw-

FU T U R e S were l it t le changed in London, poised for a 5.1-percent decline

through June 5. The Organiza-tion of the Petroleum exporting Countries (Opec) will continue its battle to retain market share, ac-cording to Maria van der Hoeven, the executive director of the In-ternational energy Agency (IeA). The 12-member group is forecast to keep its daily production target of 30 million barrels unchanged at the meeting in Vienna. Brent’s recovery from a six-year low is stalling on signs a global glut will persist as Opec continues to pump above its tar-get. Saudi Arabia has defended its strategy of favoring market share over supporting prices after lead-ing a group decision in November not to reduce the quota. “The consensus appears that no action is likely from Opec,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “The biggest risk to oil is to the downside from current levels because at this stage the market is still well oversupplied.” Brent for July settlement was at $62.27 a barrel on the Lon-don-based ICe Futures europe exchange, up 24 cents, at 12:30 p.m. Singapore time on Friday. The contract decreased $1.77 to $62.03 a barrel on Thursday. The european benchmark crude traded at a premium of $4.15 to

West Texas Intermediate (WTI).

Opec outputWTI for July delivery was at $58.13 a barrel in electronic trad-ing on the New York Mercantile exchange, up 13 cents, after fall-ing $1.64 to $58 on Thursday. It’s 3.6 percent lower this week, set to snap a record 11 weeks of gains. The volume of all futures traded was about 63 percent below the 100-day average. Opec, which supplies about 40 percent of the world’s crude, pumped 31.58 million barrels a day in May, exceeding its quota of 30 million barrels for a 12th consecutive month, according to data compiled by Bloomberg. The decision in November to keep output unchanged was a good one, Kuwait’s Oil Minister Ali Al- Omair said in an interview on Thursday. Saudi Arabian Oil Co. projects global daily crude consumption will reach 111 million barrels by 2040, from 93 million barrels now, an average growth rate of less than 1 percent a year. Saudi Oil Minister Ali al-Naimi said lower prices are stimulating more demand. World demand rose 1.5 percent last quarter from a year earlier while supply grew 3.1 percent, according to the IeA. Maintaining the produc-tion target has helped to reduce the glut, United Arab emirates

energy Minister Suhail Moham-med Al Mazrouei said. Iran’s Oil Minister Bijan Namdar Zan-ganeh predicted “nothing signifi-cant” will happen at the meeting. Iran, which wants Opec to make room for increased supply if global sanctions on the nation are eased, said the market has “serious oversupply.” Venezu-ela’s energy Minister Asdrubal Chavez this week predicted that surplus is as much as 2.5 million barrels a day.

US supplyIN the US, the best parts of the shale industry can generate re-turns of 10 percent with prices as low as $40 a barrel, ConocoPhil-lips Chief executive Officer Ryan Lance told reporters in Vienna. Break-even costs have dropped 15 percent to 30 percent in re-cent months, while the amount that drillers are able to suck out of the ground from each well has increased up to 30 percent, Lance said. Crude production in the US, the world’s biggest oil consumer, accelerated by 20,000 barrels a day to 9.59 million a day through May 29, the energy Informa-tion Administration reported on Wednesday. That’s the high-est level since January 1983, ac-cording to weekly data from the energy Department’s statistical arm. Bloomberg News

Oil Set fOr weekly Decline aS GlUt Seen PerSiStinG after OPec meet

Rate increase. . . Continued from A1