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Petron completes issuance of capital securities worth $500M

PETRON Corp. said it had completed the issuance of its $500-million undated unsubordinated capital securities, which were listed in Singapore on Monday.

The country’s largest integrated oil refining and marketing company expects net proceeds of approximately $498 million after the deduction of commissions with the issuance’s completion on Jan. 19.

The amount will be applied by the company “for the repurchase, refinancing and/or redemption of undated subordinated capital securities, the repayment of indebtedness and for general corporate purposes, including capital expenditures,” it said.

“The securities are expected to be listed with the Singapore Exchange Securities Trading Limited on Jan. 22, 2018,” it told the local bourse.

Petron’s senior perpetual capital securities, or debt that has no maturity date for the return of principal, pay an interest of 4.6% per annum.

Subject to applicable law, Petron may redeem the securities — in whole but not in part — on the “step up date” or any subsequent distribution payment date at the redemption price after giving not less than 30 and not more than 60 calendar days’ irrevocable notice.

The company set the distribution payment dates on Jan. 19 and July of each year starting on July 19, 2018. It placed the step up date on July 19, 2023.

Petron’s issuance comes after the company said last week that it would be buying its debt holders’ $401,957,000 worth of securities in a tender offer.

The figure was the total tendered through the offering and the final maximum acceptance amount determined by the company.

On Monday, shares in Petron rose 1.64% to P9.28 each. — Victor V. Saulon

‘The lady doth protest too much, methinks.’

The line above is from William Shakespeare’s play Hamlet where Hamlet’s mother says it in reference to the protestation of a lady that she would not marry if her husband dies. The line has become a figure of speech which means that someone who is strongly denying something is hiding the truth or affirming what he is denying.

President Rodrigo Duterte vehemently denied ordering the Securities and Exchange Commission to shut down online news agency Rappler, pointing out that the corporate regulators who revoked its papers were all appointees of President Benigno S. C. Aquino III. During the inauguration of new air traffic facilities in Pasay City the President said:

“We never had a hand. I don’t give a shit if you continue or not. The SEC commissioners are all appointed by (former president Benigno Aquino). How can the decision be political? I don’t care about that. Now that you are under probe, you say it is harassment? P*******a. Kung kami magmura, mali? Pag kayo gumawa ng kalokohan, okay kayo? Press freedom is a privilege in any democratic state; you have abused this privilege. You are funded by foreign money; are you not ashamed of that?”

Presidential Spokesperson Harry Roque echoed the President’s denial. Said he: “We would like to deny that the state has infringed on the freedom of the press, particularly of Rappler or any of its reporters. Their reporters are not prevented from exercising their profession. This is not an attack on the press. If the President wanted to do that, he could have just sent the armed forces and padlocked them as done by other regimes.”

The President doth protest too much so doth his spokesperson, leading many political observers to believe he did trigger the shutdown of Rappler.

After all, during his State of the Nation Address before the joint session of Congress last year, the President accused Rappler of being foreign owned. In October, he claimed Rappler was being funded by the US Central Intelligence Agency.

Rappler CEO Maria Ressa disputed the claim of the Duterte administration that it had nothing to do with the decision of the SEC. “That’s not true, that’s not what we have heard. Again, I think this is a war of attrition. What is publicly stated is not what is privately going on behind the scenes but that is what journalists do: we will shine the light,” Ressa said in an interview with CNN Philippines.

Ressa made clear that it was the Office of the Solicitor General that had questioned before the SEC Rappler’s ownership. “I have stated that this is about political pressure, and that we’ve been told in the same way that the SEC decision actually put on the record that it was the Office of the Solicitor General (behind the move).” She was mum on the alleged involvement of the President in the SEC decision but said that there was someone who was “running after the SEC on a daily basis for a decision that is adverse to Rappler.”

Mr. Duterte has on many occasions made known his extreme resentment of criticisms levelled against him by mass media entities, including Rappler, branding the criticisms as unfair, some even baseless. He has not been subtle at all about his resentment eventually turning into severe adverse action against those news organizations. The Philippine Daily Inquirer had felt the brunt of the fury of the piqued president. Now it is Rappler.

But as Ressa expounded, Rappler was “not against the government” and the role of the press in a democratic society is to “help the government come up with the right decisions.”

Perhaps the President can take counsel from the statesman Winston Churchill, who was voted No. 1 in a 2002 British Broadcasting Company poll of the 100 Greatest Britons of all time.

Churchill said: “Criticism may not be agreeable, but it is necessary. It fulfills the same function as pain in the human body. It calls attention to an unhealthy state of things.”

In reaction to President Duterte’s lament that “critics are interested in my death, not in my health,” my fellow writer of this column, the recently departed Mario Lopez, wrote in this space on June 27 last year a letter addressed to the President. I quote here excerpts of that letter:

“No, Mr. President, not true. Many others and I are concerned about your health. I did not vote for you but accepted you as the duly elected president and give you the loyalty every responsible citizen owes his or her duly elected leader. More than give moral support, some of us actively help agencies of government think through, plan, and implement the programs you wish pursued.

“Part of this loyalty is that in all good faith, I must criticize certain acts, including pronouncements that I and many others find askew, inappropriate, or we think poorly thought out. Even as we do these, I and many others like me wish you and your administration success in practically all of your programs for our sake as a nation. I also ask you and your ardent followers not to mistake our criticisms of acts and statements as personal criticisms against you.”

Abraham Lincoln, who in surveys of US scholars ranking presidents consistently ranked in the top three, often as number one, said: “He has a right to criticize, who has a heart to help.”

Mr. Duterte’s political allies who were in media prior and during the period of martial law like Teddy Boy Locsin would do well to advise him that shutting down media organizations critical of him would not suppress the truth about him. Somehow, truth will come out as it did during the martial law years.

President Ferdinand Marcos placed the entire country under martial law on Sept. 23, 1972. In the first hours of that day, a Saturday, soldiers went around Metro Manila padlocking the facilities of mainstream media that were critical of Marcos and his administration.

Among them were the newspapers The Manila Times, The Manila Chronicle, Evening News, the weekly news magazines Philippines Free Press and Weekly Graphic, broadcast networks ABS-CBN of the Lopezes, Associated Broadcasting Corporation of the Roceses, Republic Broadcasting Company of Bob Stewart, and Manila Broadcasting Company of Don Manolo Elizalde.

Prominent newspapermen like Max Soliven, Louie Beltran, Amando Doronilla, Teddy Boy’s father Teodoro M. Locsin, Luis Mauricio, and broadcaster Jose Mari Velez were detained on charges of subversion and other such crimes.

There was total news blackout that day. No newspaper hit the streets. The early editions had been confiscated by the soldiers before they could be distributed. Not even Bob Stewart’s Channel 7, which showed cartoons on Saturday mornings, went on the air that day.

It was only at about 6 p.m. that one station, Marcos crony Roberto Benedicto’s Kanlaon Broadcasting System’s Channel 9 went on the air. It showed Marcos telling the stunned Filipino people that he had placed the country under martial Law.

In a few days Benedicto’s Daily Express resumed publication. Marcos brother-in-law Benjamin Romualdez took over the facilities of Andres Soriano’s Philippines Herald and put out his own newspaper which he called Times Journal. Hans Menzi, another Marcos crony, was allowed to resume publication of his Manila Daily Bulletin but under the name Bulletin Today.

However, those “crony” papers quickly lost their credibility. The people stopped buying them and turned to the “alternative press.”

Photocopying machines reproduced prodigiously New York Times, Washington Post, San Jose (California) Mercury News, and Far Eastern Economic Review articles critical of the Marcos regime. Video clips from the top 3 networks in the US and from BBC went the rounds furiously.

As the activists bragged then, “Sila may Daily Express at Times Journal, kami may Xerox machines at Betamax players.”

In this age of information and communication technologies, truth triumphs! Je suis Rappler.

 

Oscar P. Lagman, Jr. is a member of Manindigan! a cause-oriented group of businessmen, professionals, and academics.

oplagman@yahoo.com

NCAA: Perpetual Help girds for titlist Arellano

THE Perpetual Help Lady Altas get tested today as they take on the defending champions and currently undefeated Arellano Lady Chiefs in the main women’s volleyball match for National Collegiate Athletic Association (NCAA) Season 93 at the FilOil Flying V Centre in San Juan City.

Set for 12:30 p.m., the Lady Altas, sitting at third spot in the standings with a 4-1 record, look to fortify their spot in the top half as well as spoil the Lady Chiefs’ unbeaten run.

Perpetual Help is coming off a win in its last game on Sunday, defeating the Jose Rizal University Lady Bombers, 25-21, 22-25, 25-14 and 25-21, despite an error-prone performance.

Maria Lourdes Clemente led the Lady Altas with 19 hits including 14 on kills and two on blocks while Cindy Imbo chipped in 18 points.

“We got to really improve our service, which was really bad in the first two sets especially in the second set,” said Perpetual Help coach Macky Cariño, whose wards committed 35 errors, the bulk came on services, against JRU.

“If we can do that, we’ll have a strong chance to this season,” he added.

Mr. Cariño went on to say that they have to give their best against Arellano in today’s game despite the short turnaround.

“We have little time to prepare [against Arellano]. But that should not stop us from doing our best,” the coach said.

Arellano (5-0), meanwhile, is off a win as well last Sunday, beating the Lyceum Lady Pirates in straight sets, 25-16, 25-17 and 25-11.

Rookie Necole Ebuen uncorked a match-high 11 points while team captain Mary Ann Esguerra, Regine Anne Arocha and Andrea Marzan added 10 each to help power the balanced Lady Chiefs attack.

Serving play in the opener in women’s play at 11 a.m. are the San Sebastian Lady Stags (2-2) and Mapua Lady Cardinals (0-4) — Michael Angelo S. Murillo

Consumer group files challenge to TRAIN law before Supreme Court

LABAN KONSYUMER, Inc. (LKI), a consumer advocacy group, said it asked the Supreme Court to nullify the tax reform law, citing the “unwarranted increases” in excise taxes for coal, diesel, liquefied petroleum gas (LPG) and kerosene, which are among the basic commodities Filipinos depend on.

The group is asking that Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law be nullified because it “negatively affects millions of Filipino consumers, particularly those from the low-income and poor families.”

In a statement, Victorio Mario A. Dimagiba, LKI president and former Department of Trade and Industry undersecretary for consumer protection, said the commodities are necessary for subsistence and Filipinos have no choice but to consume them regardless of cost.

He said, the provisions in question should be struck down as they impose a heavy burden on Filipinos from low-income and poor families, who make up the majority of the population.

The group said it filed its petition for certiorari with an application for a temporary restraining order, writ of preliminary injunction and/or status quo ante order before the high court on Monday. It said the TRAIN law violates the Constitution, which prescribes that taxation must be equitable and progressive.

LKI also said the tax reform violates the due process and equal protection of the law provisions of the Constitution, the rules on the origin of revenue laws, and the rules on quorum.

Mr. Dimagiba said LKI made its stand because “if not restrained now and later nullified,” the provisions of TRAIN “betray the very purpose for its enactment which is to provide, as much as possible, an equitable relief to a greater number of taxpayers and their families in order to improve the levels of disposable income since a tax on staples is a tax on the right of individuals to live.”

He also said the law, which took effect this year, “with its provisions authorizing the increase in excise taxes on kerosene, diesel, coal and LPG will only equalize any possible gains of the rationalization of personal income taxes, or worse, further beset those belonging to the poor and low-income families.”

He said the “inequity of the revised personal income taxation scheme” benefits only the higher income brackets at the expense of those earning P250,000 and below. He said in the old system, high-income earners enjoyed personal exemptions of only P50,000.

LKI said corporations or private entities will not be the ones to bear the new taxes as they would pass these on to consumers. It said “there is no hiding the fact that the increase in excise taxes will hit low-income and poor families the hardest.” — Victor V. Saulon

Japanese-led coffee project gets BoI nod as 1st MSE under IPP

PISTACIA MINDANAO Coffee Export, Inc. (PMCEI), AN 80%-owned Japanese firm, has been given the nod by the Board of Investments Extension Office (BEO) Davao for its P1-million coffee growing project, the first micro and small enterprise (MSE) project approved under the Export Activities of the 2017 Investments Priorities Plan (IPP). The project, according to a statement released by the Board of Investments (BoI), involves the production and manufacture of fermented coffee and cacao beans with an annual capacity of 2,250 kilograms (kg) and 750 kg, respectively. Commercial operation is scheduled to begin this month and all output will be exported to Japan. PMCEI specializes in producing high-quality agricultural crops, especially fermented coffee and cacao beans sourced from smallholder farmers. It would provide end-to-end support to smallholder farmers with access to technology and market. The project will be located in Barangay Managa, Bansalan, Davao del Sur. — Mindanao Bureau

City planning office still awaiting hearing date on building height limits

CITY PLANNING and Development Office (CPDO) head Ivan Chin Cortez said they are hoping that the city council will schedule soon the initial hearing for the proposed rule that will set building height limits in the city. The rule banning high-rise buildings in parts of the city was targeted to be finalized last year. “If I can have it my way, I want it done today. We are still waiting for the official advise and notice from SP (Sangguning Panlungsod). I’m expecting a hearing within this month,” Mr. Cortez said in an interview. The CPDO was directed by Mayor Sara Duterte-Carpio to come up with a policy on building heights. The Civil Aviation Authority of the Philippines (CAAP) sets requirements only in areas that directly affect flight paths to and from the airport. — Maya M. Padillo

Scandal, the show that Twitter built, bows out

LOS ANGELES — ABC’s prime-time political soap Scandal launched mid-season with little fanfare in the spring of 2012, to tepid reviews and disappointing ratings.

Following the exploits of Emmy-nominated Kerry Washington as Washington, DC crisis manager Olivia Pope and her team of problem-solving “gladiators,” the show didn’t immediately take off and it looked destined to be strangled at birth.

As it nears its finale six years on, however, it bows out as a bona fide hit that changed the way we watch TV, ushering in the era of live-tweeting shows, known as “double-screening.”

Its army of vocal Twitter fans, who also call themselves “gladiators,” helped ratings for Scandal soar more than 50% to 12.7 million an episode by 2014.

Much of its success was driven by the goodwill it engendered as an intriguing Washington, DC political story of sex, murder and double-dealing starring a strong black female character.

But its pioneering showrunner, Grey’s Anatomy creator Shonda Rhimes, has been credited with the insight that stars and producers live-tweeting episodes along with fans makes a difference in ratings.

From the earliest days, she would diligently connect with her Twitter followers, who have expanded during the show’s lifetime from 350,000 to 1.7 million.

“Gladiators: Scandal would not have the opportunity to be on magazine covers without all of you watching. Thank you for making it happen!” she would tweet, giving fans a feeling of belonging that they’d never had before.

‘I WAS VERY SKEPTICAL’
Rhimes would offer personal insights into production and the scriptwriting process and, most importantly, rope in the cast to post their own thoughts in real-time.

It is a common tactic these days but no one was really doing it — certainly on a regular, reliable basis — before Rhimes.

By the second season, Scandal was drawing 119,000 tweets per episode and ratings began to climb, particularly among the millennial age group that advertisers covet.

The show is in its final run of 11 episodes after returning last week from a mid-season break and finishes for good on April 19.

Tony Goldwyn, who plays ex-president Fitzgerald “Fitz” Grant, Pope’s longtime love interest, told journalists at a recent set visit in Hollywood how the cast had embraced Rhimes’s ground-breaking strategy.

“It completely transformed my perception of social media. I was very skeptical and judgmental about it, and just thought… it was irrelevant to me,” said Goldwyn.

The 57-year-old actor figured that no one would be interested in his opinions but was staggered when thousands of people began following him and responding to his tweets.

“It’s kind of like being in a Broadway theater with 1,000 people there and you’re talking to them,” he said.

“I was really awed by the impact of it and the fact that you can literally communicate one-on-one with people or a group.”

Other networks have begun to catch up but Scandal still finished ninth across broadcast stations last year in the social media charts, with 5.2 million interactions.

‘YEARNING FOR CONNECTION’
The cast makes sure to live-tweet for audience in both the east and west coast time zones, said Cornelius Smith, Jr., who plays White House communications director Marcus Walker.

“It’s a lot of fun and it’s a really different kind of way to communicate and connect. I think people are really yearning for connection in this world, especially today,” he told reporters.

Jeff Perry, who plays vice-president Cyrus Beene, joked that the only negative reaction to the live-tweeting had come from other actors in Hollywood.

Though they can be full of praise, he said that “a little more often they’re (annoyed) at us. ‘You guys made that work and now I have to tweet all the time.’”

Social media aside, Scandal has an equally important reason to be proud of its reputation for pioneering TV, — its commitment to diversity.

All the characters in the most powerful roles are women, and the show has always been committed to reflecting the racial diversity of modern-day America.

“When we first aired most of the questions I received centered around the fact that there had not been a black woman as the lead in a television drama in my lifetime,” said Washington, 40.

“It was not something I grew up seeing… and that is certainly not the case now. You’d be hard-pressed to find a network that does not have a show with a woman of color at its center.” — AFP

TFC subsidiary to invest in Kombi Land

A UNIT of PTFC Redevelopment Corp. (TFC) will be subscribing to P60 million worth of shares in Batangas-based Kombi Land, Inc. (KLI), in a bid to improve its financial standing.

In a disclosure to the stock exchange last Friday, the listed property developer said its wholly owned subsidiary Baesa Redevelopment Corp. (BRC) will subscribe to a total of 49,000 shares in KLI.

To complete the transaction, KLI would have to secure approval of the Securities and Exchange Commission for an increase in its authorized capital stock. Upon closing, BRC will hold 19.68% of KLI’s outstanding capital stock.

“BRC’s investment in KLI is expected to improve the financial standing of BRC,” TFC said in the disclosure.

Following the disclosure, the Philippine Stock Exchange has implemented a suspension on the trading of TFC shares, citing that the transaction falls under the description for substantial acquisitions and reverse takeovers. The trading suspension started on Monday (Jan. 22) and will continue until the company is able to comply with PSE rules for such transactions.

Shares in TFC were priced at P35.95 apiece prior to the trading suspension.

Incorporated in 1951 originally as the Philippine Tobacco Flue-Curing and Redrying Corp., TFC changed its primary purpose to that of a real estate company in 2014, in the process changing its name to the present one.

The company now operates commercial, industrial, mini and personal storage spaces in the country. TFC offers a total of 75,000 square meters (sq.m.) in Quezon City and around 10,500 sq.m. in Ilocos Sur for warehousing and office rental needs.

BRC, on the other hand, was formed in 1992 and has since completed a commercial complex called Baesa Town Center (BTC) in Quezon City. BTC offers office, retail, commercial, and mini self-storage services.

TFC saw an 8% decline in its attributable profit in the three months ending November 2017 to P14.9 million, amid a 19% increase in revenues in the same period to P54.1 million. — Arra B. Francia

New Mumbai metro to beat traffic, but at what cost?

MUMBAI — A new underground metro is expected to ease the burden on Mumbai’s notoriously congested roads and railways, but not everybody in India’s sprawling financial capital is happy about the multibillion-dollar project.

Announced in 2014 with much fanfare, the Metro 3 line has been hailed by backers as essential to help solve the city’s traffic woes and finally provide a link to its airports.

But campaigners are angry at the felling of thousands of trees, and say it could desecrate temples and lead to the destruction of an urban forest tribal groups call home.

The scheme has faced considerable opposition in court, delaying completion and highlighting the complexities of undertaking major infrastructure work in the world’s largest democracy where people have the right of redress.

“This is one of India’s biggest projects. It has faced immense difficulties and challenges of different types,” says Ashwini Bhide, managing director of the Mumbai Metro Rail Corporation.

The 231-billion-rupee ($3.6-billion) line will link Mumbai’s popular tourist destination of Colaba in the historic south to SEEPZ, a special economic zone situated 33.5 kilometers (21 miles) north.

It will boast 27 stops servicing the coastal city’s busiest business districts, including Bandra Kurla Complex and Lower Parel, where 23 people died during a stampede at a railway station last year.

The line is scheduled to be finished by December 2021.

“Congestion on the road will be substantially reduced because of this corridor,” Ms. Bhide told AFP, estimating that 650,000 vehicle trips could disappear from the roads daily.

‘MUMBAI IS UPGRADING’
Metro 3 also aims to ease the load on Mumbai’s creaking railway lines where an average of more than nine people lose their lives every day, often falling off overcrowded carriages.

Seven million people use Mumbai’s railway daily. Ms. Bhide says the new metro will carry 1.7 million passengers per day, freeing up space on overground trains.

“The quality of commute, ease of traveling and speed of traveling will increase,” she says. 

Mumbai effectively shuts down when trains cannot run, as is often the case when tracks flood during the four-month summer monsoon. The underground will ensure the city keeps running, advocates say.

Work began in October 2016 and large areas of the city have been dug up to bore tunnels, which will be up to 22 meters (72 feet) deep.

Barriers shielding construction work boast the tag line “Mumbai is upgrading” but while most people support the project, several groups are angry.

Thousands of Parsis signed a petition calling for the route to be changed so trains do not pass under fire temples where Zoroastrians worship, claiming it would pollute the “holy fire” and force nature to exact its revenge.

Environmentalists unsuccessfully went to court to stop the destruction of thousands of trees, and also object to plans for a depot and station on a 33-hectare (82-acre) site in Aarey Colony, a biodiversity hot spot.

The area borders Sanjay Gandhi National Park, home to leopards, birds and other animals.

‘WE DON’T WANT CHANGE’
“It’s a beautiful forest in the heart of Mumbai, an oxygen cylinder for the city that needs to be protected,” Stalin Dayanand, director of the environmental non-profit organization Vanashakti, told AFP.

“Once the shed and station come up, it opens the door for real estate developers to construct properties there,” he added.

Some 7,000 indigenous Indians — the Warlis — also live across Aarey, which at more than 1,200 hectares is a green oasis in the teeming city.

The animists worship wildlife and are famous for their simple paintings depicting nature.

Prakash Bhoir, a tribal leader, says the area, where Warlis have lived for centuries, has witnessed severe encroachment in recent years.

“The destruction of the forest is happening at an alarming rate. We don’t want change or development here. Let it stay the way it is,” he told AFP.

The Bombay High Court is hearing a petition against the depot but Bhide claims Aarey is the only suitable place for it in space-starved Mumbai.

She says legal challenges have put the underground line’s completion date back by around 10 months.

“Probably these kinds of problems may not be faced in a country like China. Although there are a lot of challenges, we have to complete the metro project as early as possible.” — AFP

The rise of Mamedyarov

Shakhriyar Mamedyarov (born April 12, 1985 in Sumqayit, Azerbaijan) will be playing in the Candidates Tournament this March in Berlin. He has a lot of credentials, for example he has experience playing in Candidates’ tournaments, having participated in 2011 and 2014. Shakh is also a two-time World Junior Champion and was World Rapid Champion in 2013. For some reason though few people give him the respect he deserves. The Web site chess.com put up a reader’s survey on who they think will win the 2018 Candidates Tournament and the results were:

Levon Aronian 37%

Fabiano Caruana 16%

Sergey Karjakin 14%

Wesley So 12%

Vladimir Kramnik 7%

Shakhriyar Mamedyarov 5%

Alexander Grischuk 5%

Ding Liren 4%

As you can see Aronian is the runaway choice as the top seed. But I don’t agree. He has been in the world chess elite since 2005 when he won the World Cup and was ranked no. 5 in the world. There is no doubt that he is a powerful chess player and perhaps at some time arguably the strongest player in the world, however, to become world champion you have to win the world championship cycle, and he has choked in the events which mattered most.

Caruana is another very strong player, but he does not seem to be in good form lately.

I am, of course, rooting for Wesley So, but I think the favorite to win the Candidates would be Sergey Karjakin. He has two strengths which I find very important: no. 1 Karjakin gets stronger as the tournament progresses, just when everyone is tiring he is thriving. No. 2, and more importantly, he always seems to find the inner strength to excel when he has to. Remember the 2015 World Cup? In the finals, a 4 game match, Peter Svidler won the first two games to go 2-0 and only needed a draw to win, but Karjakin won the next two to tie and bring to match to tie-breaks. Karjakin eventually won the match 5.0-4.0. And he was given little chance in the world championship against Magnus Carlsen but he almost won that as well.

And don’t forget Shakhriyar Mamedyarov. Yes, that guy who only 5% of the voters supported is in roaring hot form now. In Moscow last December there was the traditional “Nutcracker” tournament where a team of experienced players, called the “Kings” play an opposing team of rising stars, called the “Princes.” The format is a scheveningen where the “Kings” play everybody from the “Princes” once. Mamedyarov finished with 3.5/4 (draw with Artemiev and wins against Daniil Yuffa, Andrey Esipenko and Grigory Oparin). I’d like to show you two of those games.

Haven’t heard of GM Yuffa before? He is 20 years old, just became a GM in 2016 and is regarded as a very promising player although he has not yet come up with a big tournament win. In September 2017 Daniil gave a blindfold simul against 3 strong players in front of a live audience. And he did so while playing Chopin on a concert piano! Stuff like that sticks to your mind.

Mamedyarov, Shakhriyar (2799) — Yuffa, Daniil (2522) [A49]
Nutcracker Classical 2017 Moscow RUS (3.3), 21.12.2017

1.Nf3 Nf6 2.g3 g6 3.b3 d6 4.d4 Bg7 5.Bb2 0–0 6.Bg2

According to the Chessbase opening book, this opening for White is known as the “Anti-King’s Indian System”.

6…a5 7.c4 Ne4 8.Qc2 Bf5 9.g4 Nxf2 10.gxf5 Nxh1 11.Bxh1 a4 12.b4 Nd7 13.Nbd2 a3 14.Bc3

What to do about the long diagonal? If Black wants to keep it closed he will play 14…c6 followed by 14…d5. If he wants to open it he can play 14…c5 right away.

14…c5

This position is hard to evaluate but since White’s king is stuck in the center it has to be correct to open up the position.

15.dxc5 Bxc3 16.Qxc3 dxc5 17.b5 Qa5 18.Qe3 Nf6 19.h3

Preparing to play Kf2, which cannot be done now because of …Ng4+

19…Rad8 20.Kf2 Rd6 21.Rg1 Rfd8 22.Qxe7

Is this greed? No. White is looking at the possibility of a combination starting fxg6 followed by Rxg6+

22…Qc3 23.Ne4 Nxe4+ 24.Qxe4

Black should solidify his position with b6, Kg7, etc. Instead, he underestimates Shakh’s tactical resources.

24…Rd1 25.Qe7 Kg7?

[25…R1d7]

26.fxg6 hxg6 27.Rxg6+! Kxg6 28.Ne5+ 1–0

After 28.Ne5+ Black has to give up his queen or be mated. For example: 28…Kh6 (28…Kh5 29.Qxf7+ is the same thing; 28…Kf5 29.e4+ Kf4 30.Qf6#) 29.Qf6+ Kh5 30.Qxf7+ Kh4 31.Qf6+ Kh5 32.Qf5+ Kh6 33.Qg6#.

Andrey Esipenko is still listed as a FIDE Master (FM) but he has already fulfilled all the requirements for a full Grandmaster title and is just waiting for the official announcement of new titles granted to come out. Born March 22, 2002, he is only 15 years of age but already has many accomplishments. In 2017 he won both the European U16 and World U16 Chess Championship, and recently made waves at the World Rapid Championships by defeating Sergey Karjakin with a tremendous queen sacrifice.

Karjakin, Sergey (2760) — Esipenko, Andrey (2564) [B11]
World Rapid 2017 Riyadh KSA (8.9), 27.12.2017

1.e4 c6 2.Nf3 d5 3.Nc3 Bg4 4.h3 Bxf3 5.Qxf3 Nf6 6.d3 e6 7.Bd2 Qb6 8.0–0–0 d4 9.Ne2 c5 10.e5 Nd5 11.Nf4 Nb4 12.Kb1 Nd7 13.Qe4 Nc6 14.Nh5 0–0–0 15.f4 c4 16.dxc4 Ba3 17.Bc1 Nc5 18.Qf3 d3 19.cxd3 Na4 20.Rd2 Nd4 21.Qf2 Nc3+ 22.Ka1 Qb3! 23.bxc3 Qxc3+ 24.Bb2 Bxb2+ 25.Rxb2 Qc1+ 26.Rb1 Nc2+ 27.Qxc2 Qxc2 28.g3 b5 29.cxb5 Rd4 0–1

He is so tactically gifted and (department of bad puns!) makes it all look “esi” (from GM Jan Gustafsson).

Esipenko, Andrey (2564) — Mamedyarov, Shakhriyar (2799) [D46]
Nutcracker Classical 2017 Moscow RUS (2.3), 20.12.2017

1.d4 Nf6 2.c4 e6 3.Nf3 d5 4.Nc3 c6 5.e3 Nbd7 6.Qc2 Bd6 7.Bd3

Since we are living in an age of g2–g4 opening thrusts, I should point out here that 7.g4 is quite an acceptable gambit. After 7…Nxg4 8.Rg1 h5 9.h3 Nh6 10.e4 White has good compensation. But not 10.Rxg7? I met GM Pavel Kotsur during the 1999 Asian Team Championship and he impressed me very much with his quick sight of the board and theoretical knowledge. Which makes it all the more remarkable that he makes this blunder even more so because it has occurred before. After 10…Qf6 the rook and f3–knight are en prise 11.Rh7 Rxh7 12.Qxh7 Nf8 0–1. Kotsur,P (2586)-Barua,D (2541) Doha 2003. It is now White’s queen and f3–knight which are simultaneously attacked.

7…0–0

Here is another tactic that Black should be familiar with. After 7…dxc4 8.Bxc4 e5 9.0–0 exd4 10.exd4 0–0 11.h3?! is a psychological trap, trying to induce Black to play 11…h6? (falls into the trap. Correct is Nd7–b6–d5) 12.Bxh6! gxh6 13.Qg6+ the point 13…Kh8 14.Qxh6+ Nh7 (14…Kg8 15.Ng5 Bf4 16.Nce4 Bxg5 17.Nxg5 Qa5 18.Qg6+ Kh8 19.Bxf7+– is clearly winning for White) 15.Qxd6 Nb6 16.Qxd8 Rxd8 17.Bxf7 Nf8 18.Ne5 1–0. Farago,I (2502)-Sentef,N (2171) Baden Baden 2002.

8.0–0 dxc4 9.Bxc4 a6 10.Rd1 b5 11.Bf1

This bishop usually goes to e2 or d3. Esipenko took 10 minutes here and went for a relatively rare line, so I guess he is out of his preparation already here.

11…Qc7 12.e4 e5

Mamedyarov was 15 minutes ahead of his opponent at this point and in the following moves steadily increases his time advantage.

13.g3 Re8 14.Bg2 h6 15.h3 c5 16.dxe5 Nxe5 17.Nh4?! <D>

POSITION AFTER 17.NH4

Now Mamedyarov attacks.

17…g5! 18.Nf5

[18.Nf3 loses a pawn to 18…Nxf3+ 19.Bxf3 Bxh3 so the knight is forced to go to f5]

18…Bxf5 19.exf5 Rad8

Getting the rook out from the g2–bishop’s firing zone. Now Black intends …c5–c4, …Nd3 and possibly …Nxf2. This is the beauty of the Semi-Slav — once Black’s pieces start rolling they take over the position like an avalanche.

20.a4 b4 21.Nd5 Nxd5!

Nice. Then the other knight will go …Ne5–d7–f6 and take over from where its counterpart left off.

22.Rxd5 Nd7! 23.f6

Esipenko couldn’t find any other way to generate counterchances, so he jettisons the f5 pawn to make way for his rook or queen to take a threatening position on f5.

23…Nxf6 24.Rf5 Re1+!

White expected 24…Kg7 when 25.b3 Be5 26.Bb2 still keeps the game going.

25.Kh2 Nh5

Threatening 26…Bxg3+ 27.fxg3 Qxg3 checkmate.

26.Qb3 Ng7 27.Rf6 c4!

Aside from threatening the queen this move also leaves the c5 square open for queen or bishop.

28.Qf3 h5 29.Rh6

[29.Qb7 forces the exchange of queens but leads to a lost game. For example 29…Ne6! 30.Qxc7 Bxc7 White is defenseless against 31…h4 32.Rf5 hxg3+ 33.fxg3 Rd3 34.Rf3 Nd4 35.Rxd3 cxd3 hopeless]

29…h4 30.Qg4 hxg3+ 31.fxg3 Qc5 32.h4 Bxg3+ 33.Qxg3

Taking with the King leads to mate 33.Kxg3 Rd3+ 34.Bf3 Qg1+ etc.

33…Qg1+ 34.Kh3 Rd3 35.Bf3 Rxf3 36.Qxf3 g4+ 37.Qxg4 Qh1+ 38.Kg3 Rg1+ 0–1

Yes, “Shakh” is in red hot form and I expect him to finish well in the ongoing Tata Steel tournament. We will report on the final results next week.

 

Bobby Ang is a founding member of the National Chess Federation of the Philippines and its first Executive Director. A Certified Public Accountant, he taught accounting in the University of Santo Tomas for 25 years and is currently Chief Audit Executive of the Equicom Group of Companies.

bobby@cpamd.net

Connecting the dots

The revocation of the Securities and Exchange Commission (SEC) registration of online news site Rappler is being passed off as a simple case of an independent government agency implementing the Constitutional ban on foreign ownership of a media organization. It has nothing to do with media freedom. It has no implications to other media outfits. And most important of all, the Duterte administration claims it has nothing to do with it.

The facts and circumstances surrounding the SEC decision, however, are in glaring contravention to such a benign argumentation. Duterte wants to shut down Rappler because he cannot stand its criticism of his regime.

Firstly, President Rodrigo Duterte had repeatedly threatened Rappler, along with ABS-CBN and the Philippine Daily Inquirer, for being unfairly critical of his administration, imputing various motives.

In the case of Rappler, that it is “fully owned by Americans” and is part of a CIA plot to bring him down. Duterte has not been able to disguise his utter contempt for these three media organizations and his intention of going after them to stop what he considers scurrilous, slanted if not fabricated, reportage meant to undermine his presidency.

Secondly, it was Duterte-appointed Solicitor General Calida who got the SEC to conduct its investigation against Rappler.

In record time, the SEC handed down its decision canceling Rappler’s corporate registration on the basis of a legal technicality without giving Rappler the opportunity to correct its ownership structure as it had done for other business entities similarly situated.

Thirdly, it is hypocritical of the Duterte administration to utilize the Constitutional ban on foreign media ownership to silence Rappler while it pushes for Charter Change that will do the exact opposite — allow 100% ownership of public utilities, mass media, and educational institutions by removing the remaining protectionist provisions in the 1987 Charter.

As pointed out by many legal experts, the Philippine Depository Receipts (PDR) held by Rappler’s foreign investors (Omidyar Network and North Base Media) does not vest them with ownership over Rappler or Rappler Holdings. In fact, PDRs are resorted to by companies seeking substantial foreign investment in order to precisely skirt such strict prohibitions against foreign ownership.

Duterte poses as the one who is aggrieved in all this. That his administration is merely defending itself from unfair criticism by an intemperate and elitist media outfit with a hidden agenda, that of toppling him. But in truth the Duterte regime is using the instrumentalities of the state to shut down, one by one, those media outlets it considers to be inherently biased against his regime.

Some say there is nothing wrong with this. That the state, helmed by Duterte, is justified in defending itself from irresponsible media and other kinds of destabilizers.

Unfortunately for Duterte, the Philippine Constitution states: “No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the Government for redress of grievances.” Duterte is wrong in saying press freedom is a “privilege.” It is a right on the level of freedom of speech and expression, that the state can only curtail in cases of libel or proven use for seditious purposes.

Therefore, this SEC ruling, no matter how Duterte denies shaping or influencing it, is itself unconstitutional. There can be no justification for government closing down a media outlet, no matter under what alibi, just because the President doesn’t like what it publishes.

In truth, the Duterte regime is not without less obviously tyrannical means to counter Rappler.

Duterte and his minions, including his social media horde, have blasted Rappler nonstop for publishing supposed “fake news” (while expertly churning out fabrications packaged as news themselves). He has also used paid hacks masquerading as veteran journalists to mount a more sophisticated smear campaign against Rappler.

If a substantial number of people can be convinced then they will stop reading Rappler, its advertising and other revenue will go down alongside its declining credibility, and Rappler will find itself struggling to survive. Libel cases can always be resorted to and in fact the National Bureau of Investigation is handling a current cyber libel case against Rappler.

The SEC decision on Rappler steps up the Duterte regime’s attempts to gag mass media. It is intended to have a demonstration effect on the rest of the mass media organizations from owners to editors to reporters.

Meanwhile the regime perseveres in going after its staunchest critics through a squeeze on franchises, corporate takeovers by businessmen allied with the President, and always, the resort to harassment suits, while turning a blind eye to the unflagging killings of media practitioners.

Recently, Duterte was positively frothing in the mouth when he was asked by Rappler reporter Pia Ranada regarding his hand in the SEC decision. Apparently whatever satisfaction he derived from it was drowned out by the Rappler expose on his right hand man, Bong Go, “intervening” in a P15.5-B project to acquire the Command Management System (CMS) to be installed in brand new Philippine Navy warships.

It is not as if the story has no basis. A note tacked on to an alleged white paper favoring a certain CMS supplier that was forwarded by Defense Secretary Lorenzana to Navy Chief Vice-Admiral Mercado cites Bong Go as the source. This was denied by Go then also later denied by Lorenzana who said he was mistaken about the paper’s source.

But there are plenty of suspicious facts and circumstances, enough to raise serious doubts about Malacañang’s intervention in the project.

This is the proverbial “whiff of corruption” that Duterte promised he would not tolerate.

Instead of initiating an investigation, checking the paper trail for this document, finding out who from the Presidential Management Staff met with the Navy official in charge of the project and what was discussed, Duterte mysteriously fired Vice-Admiral Mercado for “insubordination,” exonerates Go with a non sequitur comment that Go is already a billionaire (ergo he can’t be corrupt) and then goes ballistic in denouncing Rappler for throwing “shit” at his regime.

Or perhaps Duterte is so incensed he could not control his rant against Rappler and Ranada because this is the sort of “whiff of corruption” that could generate disgruntlement in the military. Well this time, Duterte can blame no one but himself.

 

Carol Pagaduan-Araullo is a medical doctor by training, social activist by choice, columnist by accident, happy partner to a liberated spouse and proud mother of two.

carol_araullo@yahoo.com

Emerging economies free of ‘original sin’; firms not forgiven

LONDON — Most developing nations have been absolved of the “original sin” that blocked them using their own currencies to raise money abroad, but their companies’ sins have still not been forgiven, as the huge debt they have racked up in “hard” currency attests.

Original sin, which is how economists Barry Eichengreen and Ricardo Hausmann described the dilemma for emerging market (EM) economies that were unable to borrow abroad in their own currencies, is now largely a thing of the past for sovereign debt.

Corporate borrowing in local currencies has not taken off, however. For one thing, much of the debt is not easily accessible to foreign investors; for another, borrowing in dollars, pounds or euros is usually cheaper, especially since the crash in Western interest rates after 2009.

Above all, investors see these securities as inherently riskier than government debt.

“Sovereigns can issue debt in hard currency or local currency, but that’s a luxury which is not there yet for most corporates,” said Abhishek Kumar, lead portfolio manager for emerging markets at State Street Global Advisors.

Outstanding emerging corporate debt denominated in hard currencies has doubled since 2007 to $7 trillion, according to the financial industry body, the Institute of International Finance (IIF), nearly 7 times than EM governments’ at around $1.1 trillion.

Governments are now using currencies such as the rand and rouble for more than 80% of their borrowing. Hard currency movements still affect the price at which they borrow but their vulnerability to exchange rate swings is far less than it was.

The shift towards greater acceptance of emerging currencies was highlighted recently when several central banks confirmed they now hold China’s yuan in their forex reserves.

Like emerging markets economies that suffered currency crises in the 1990s, companies risk a strengthening in the dollar or euro against the currencies in which they earn revenues, which can make debt repayment significantly costlier.

Also, with US interest rates rising, investors could demand higher and higher yields to “roll over” maturing debt.

The IIF and the Bank for International Settlements have repeatedly warned of these risks. Earlier this month, the IIF said the borrowing binge of the past decade meant large amounts of hard currency debt would need to be rolled over in coming years, with around $450 billion due for repayment in 2018.

“Rising global interest rates will add to worries about the debt servicing capacity of highly indebted firms and governments,” it said.

Emerging market companies also have up to $30 trillion in domestic currency debt but this is mostly in bank loans and almost all is held locally. Most bonds issued in domestic currencies are not eligible for processing through Euroclear, the international post-trade services system which increases convenience and transparency.

GROWING MARKET
Prospects for emerging currency corporate bonds looked bright in 2014, when Bank of America Merrill Lynch launched a special index with around 250 “Euroclearable” securities.

But more than three years later, the index is still not tracked by any passive funds, according to the ICE exchange, which took over BAML indices in 2017. JPMorgan, which runs the most widely used emerging debt indexes, still does not have a local corporate bond benchmark.

One of the few active funds in the sector is run by Brent David, a portfolio manager at BlueBay Asset Management. He says the market is improving and estimates up to $500 billion of corporate local bonds are now Euroclearable, twice the amount in 2014.

While that’s less than a tenth of outstanding bonds, he expects the number will rise as Chinese and Indian firms issue yuan and rupee debt in Hong Kong, Singapore or London.

“More and more corporates are feeling the need to shift to issuing in their own currencies. They are trying to diversify their investor base, and to tap foreign investors they have to issue in Euroclearable format,” David said.

For David, a key attraction is that the BAML index’s average yield is roughly two percentage points above JPMorgan’s GBI-EM sovereign debt benchmark, after taking into account its shorter duration.

It also offers exposure to the Indian and Chinese currencies, which are not part of the GBI-EM, he said.

ILLIQUID
For the market to really take off, however, foreign funds need bigger sizes and trading volumes, which will be difficult to achieve without developing pension and asset management industries within emerging markets.

Not all companies will be keen to undertake the disclosures and operational complexities that Euroclear involves.

Even when bonds are Euroclearable, investors are wary. Russian lender Sberbank estimates foreigners own less than 5 percent of the corporate rouble bond market, which has over $100 billion outstanding and has been Euroclearable since 2013.

In contrast, they hold a third of rouble government debt.

“You have to weigh up: do you get compensated enough if you go into a non-sovereign instrument?” said Paul Greer, assistant portfolio manager at Fidelity International.

“With local corporate bonds, you get a small amount of spread over the sovereign curve but you have to deal with FX risk, credit risk and interest rate risk.”

Irresistibly cheap global borrowing costs may also have hampered the market’s development — dollar-denominated emerging corporate bonds yield an average 5.2%, according to the CEMBI Global index. That’s well below what firms from Brazil or India would pay to borrow in their own currencies.

That’s an incentive to keep borrowing in hard currency, said Guy Stear, co-head of fixed income research at Societe Generale.

“Companies might think ‘I am taking risks here in terms of original sin, but on the other hand I am happy today because my overall funding cost is low,’” Stear said. — Reuters

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