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The Crucifixion

The crucifixion of Jesus Christ has an immediate relevance to present-day Philippines — the war on drugs, criminality, terrorism, and killings.
Why was Jesus crucified? He was heretical and unconventional. He spread revolutionary teachings. He upended the establishment.
Today, Jesus would have been branded a terrorist, a communist. Note that basic communist beliefs are no different from Christ’s words, except that doctrinaire communism does not believe in God.
More importantly, Jesus was for the poor, the downtrodden, and the outcast, including the criminals. Yes, including the criminals.
Jesus was crucified together with two thieves. Being a thief does not necessarily mean being condemned to hell. Being a thief does not necessarily mean being evil. Remember Victor Hugo’s Jean Valjean — the epitome of sublime goodness despite his criminal record for stealing bread to feed starving children.
Other sources believe that the two unnamed men who died with Jesus were rebels. Perhaps, the two unnamed men were both rebels and thieves. Rebellion and thievery (or banditry) do not contradict each other.
From the viewpoint of the establishment, the government has the power to force the rich to pay taxes to fund the needs of the poor. It is not thievery, but it happens through the power of coercion nevertheless. But when rebels impose their “revolutionary taxes,” authorities brand them as criminals.
Under Rodrigo Duterte’s regime, criminals including the rebels and especially the drug users deserve to die. “Shoot them,” Duterte orders the police and the military.
I recall a conversation decades ago with former rebel priest Edicio de la Torre regarding the orientation of the human rights movement after the fall of the Marcos dictatorship. The restoration of liberal democracy curbed the arbitrary arrest and detention, torture, or killing of Left activists. To be sure, human rights violations continued, but they were no longer as widespread and as brazen as what happened during the dictatorship.
This led some human rights groups to shift their attention from political rights to economic rights. The human rights advocates thought that the major decline in the number of political prisoners and the drop in human rights violations, together with the economic hardship that the dictatorship inflicted particularly on the poor, necessitated the change of focus.
But not only the Left activists but also society in general have shown a narrow or limited appreciation of political human rights. What we have belittled is the human rights of criminals. Since time immemorial, government, liberal or authoritarian, has violated the human rights of suspected or convicted criminals. Sadly, the violation of the rights of criminals is common and is accepted by society. Given this historical perspective, society has not actively resisted Duterte’s policy of having the drug users killed.
One question we ask is whether rebels and drug users should be treated as criminals. They are not innate criminals. Rebellion is a political, not a criminal, offense.
In other societies, drug use is decriminalized.
By criminalizing drug use, society worsens the situation of drug users, as they are thrown into the dirty and violent underworld. By decriminalizing drug use, we save the lives of otherwise innocent drug users.
The second question is: Regardless of who is criminal, shouldn’t he be treated with mercy and dignity? Shouldn’t his rights be respected? Torturing a criminal is wrong. Murdering a criminal is wrong. They constitute criminal acts.
The Church has taken the lead in protecting the human rights of rebels and criminals, following Christ’s words and actions.
We return to Jesus’ crucifixion. One of the two criminals crucified alongside Jesus said: “Jesus, remember me when you come into your kingdom.” Jesus answered: “Truly, I say to you, today you will be with me in Paradise.”
Jesus died together with two criminals, one penitent and the other unrepentant. Jesus died for the salvation of all sinners, including criminals.
And His Resurrection symbolizes that ultimately we will pass through the valley of death. That we will overcome the present horror and that we will ultimately attain justice.
 
Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.
www.aer.ph

Kim Jong Un: Madman or genius?

It’s an Easter miracle! Kim Jung Un’s visit to President Xi Jin Ping and Kim’s pledge to “de-nuclearize” was an Easter treat. It lifted somewhat the gathering anxiety over a nuclear confrontation in the Korean Peninsula.
Since inheriting power in 2011, Kim had successfully painted himself as a “mad man” ready to plunge the world into a nuclear Armageddon. An erratic dictator in control over a growing nuclear arsenal and a delivery system that could make Seoul and Tokyo into a “Hiroshima and Nagasaki” reprise, inspires dread. To the Americans, a nuclear delivery system which nibbles at the outer edge of America is particularly alarming.
Kim reminds many of Adolf Hitler.
Advised in 1945 by close confidant and Air Marshall Hermann Goering to negotiate a truce with the rampaging allied forces, he replied, “We will never surrender. We may go down but we will bring much of the world down with us.” Hitler, by now raving mad, was determined that German super race would be honored by extinction than by survival under the yoke of a new Versailles Treaty. His massive gamble on the V-2 missile, the super submarine, U-977, and the Uranprojekt (Uranium bomb project) had run out of time. But had the war protracted a year longer, it would have ended in an inconclusive stalemate as at Panmunjom. We do not know what’s in Kim’s head. Why or how this pivot towards compromise came about is a mystery. Did the squeeze play initiated by President Donald Trump hit home hard? Perhaps, the Chinese felt that further provocation of the equally unpredictable Trump was risking too much.
One thing stands out: that the de-nuclearization pledge was made to President Xi, the one person in the world who can hurt Kim, gives it credibility. If things go as hoped and prayed for, Kim Jong Un will confer with President Moon of South Korea in Panmunjom and will meet with President Trump in May. And if de-nuclearization and a semblance of a lasting peace ensues, Kim will be the early favorite for the Times Magazine “Man of the Year” award and for the Nobel Peace Prize!
Is Kim a madman or a genius? If a madman with only random flashes of sanity, he will soon enough revert to the Orwellian strategy of continued nuclear build-up, of confrontation and the absolute loyalty of his deprived subjects. We’ll be back to square one with only a fading memory of hope.
But he may also play the genius card. One may reasonably assume that Kim has by now a nuclear arsenal of Hiroshima-type bombs. His “de-nuclearization” will mean only a cessation of effort to add to that arsenal, not to empty it. He can vie for the status granted by the world to Israel, a dead certain nuclear bomb possessor but which, unlike the Kims, it neither admits nor denies. Charles de Gaulle’s force de frappe (deterrent) nuclear logic in the Post WWII era enjoys widespread assent.
What will the genius Kim demand in return? He will likely ask Trump for the de-Americanization (no American bases and no joint military exercises) of the Korean Peninsula. That will address North Korea’s valid fear of imperialist takeover. Since this somewhat unburdens the American taxpayers as the world’s policeman, Trump, who did after all sound the call for South Korea and Japan to pay more for the American umbrella, may bite. Likewise, South Korea today, unlike the South Korea of the 1950s when most all of the heavy industries in the Peninsula were in the North, can fend off any war-like overtures by a de-nuclearized North Korea.
Kim will then delight the South Koreans with an irrefusable offer: convert the Panmunjom “standoff” into a “peace treaty” in return for de-Americanization. Further, Kim may demand from South Korea and Japan a mini-Marshall Plan for a string of industrial and export enclaves and the requisite transport infrastructure. This will be music to the ear of the South Koreans.
As a guarantee, the South Koreans will want to draw in Chinese investments which Kim cannot afford to treat shoddily. Kim will demand absolute control of the labor contracts for social control. Kim does not have to re-invent the wheel; Deng Xiaoping as model beckons.
If he manages to swing this historic deal, he will be adjudged a genius in history. It takes genius to convince the world that he was “mad” so that the world will find fair bargain in any demand in lieu of a nuclear madness. There is precedent to this in diplomacy and Game Theory. The Gang of Four Theorem in Game theory says that to attain stable cooperation, two things are required: first, each must convince the other that he has a live bomb that could blow the other away; and (2) each must convince the other that one is a bit “mad” — that is, willing to pull the pin even if in the process he is blown away himself. Then “peace” will be maintained by “mutually assured destruction” (MAD) as Daniel Ellsberg of the Pentagon Papers fame put it. This, many claim, kept the Cold War era confrontation “Cold” instead of “Hot.”
Why should Filipinos care? For us it’s a threat.
If North Korea opens up, it will be the next vacuum cleaner of direct foreign investment in East Asia in the coming decade. Think of current vacuum cleaner, Vietnam, only vastly larger. North Korea will be an export platform Eden: low wages, industrious and motivated work force, no labor unions. The Build, Build, Build party of President Duterte will get the dregs of the FDI flow. Again another country that, in our rear view mirror today, will, in no time, have the Philippines in its rear view mirror.
If, that is, Kim plays the genius card. And, if the Philippines keeps getting itself mired in the mudflats of thoroughly futile political projects.
 
Raul V. Fabella is a retired professor of the UP School of Economics and a member of the National Academy of Science and Technology. He gets his dopamine fix from hitting tennis balls with wife Teena, bicycling and struggling with the guitar where he spells rank amateurism.

Faith, hope, and love in Easter

The Swedish actor Max von Sydow played Jesus in the 1965 film The Greatest Story Ever Told. He was unknown in US movies at that time — though he was the famous director Ingmar Bergman’s golden boy in many controversial films that were the fare of the avant garde Europeans then, like Virgin Spring (1960), a rape story, and Through a Glass Darkly (1961), a story of incest. The latter Bergman movie, and many of his others, takes off from 1 Corinthians 13, 12 in the Bible:
“12 For now we see in a mirror, darkly, but then face to face. Now I know in part, but then I shall know just as I also am known.
13 And now abide faith, hope, love, these three; but the greatest of these is love.”
Risqué themes abounded in film, theater and art in the mid-1960s, perhaps reflecting the dark overload of controversies and events that threatened mores and ethics: “Dr. Martin Luther King, Jr. leads civil rights march in Alabama from Selma to Montgomery; The Voting Rights Act, guaranteeing African Americans the right to vote becomes law; Operation Rolling Thunder Launched In Vietnam; St. Louis, Gateway Arch is completed; Race riots break out in California; and — the mini skirt was launched (http://www.thepeoplehistory.com).” And as the apostle Paul admonished the sinful and depraved Corinthians in his epistles — the exuberance of change must be tempered by love — as in the love and peace of the “flower children” contra the Vietnam War.
Came then the Hollywood salvo of a star-studded Greatest Story Ever Told, with its meaning and message in the hard-sell endorsement-by-presence of many famous actors of the time: Charlton Heston as John the Baptist; José Ferrer as Herod Antipas; Telly Savalas as Pontius Pilate; Martin Landau as Caiaphas; David McCallum as Judas Iscariot; Donald Pleasence as “The Dark Hermit” (a personification of Satan); and Sidney Poitier as Simon the Cyrene who helped carry Jesus’ cross. Smaller roles (some only a few seconds) were played by Carroll Baker, Pat Boone, Van Heflin, Angela Lansbury, Sal Mineo, and Shelley Winters, among others. And of course John Wayne, the great American movie cowboy idol of all times had to be decked in the brass breastplate and helmet of the Roman centurion who comments on the Crucifixion, in his well-known Texan accent, saying only one line: “Truly this man was the Son of God (The Greatest Story Ever Told, Turner Classic Movies).”
The Greatest Story Ever Told was searched for in the Internet in lieu of the yearly revisiting of what has been the classic fare for the Holy Thursday/Good Friday Catholic/Christian meditation on the crucifixion and death of Jesus Christ — Mel Gibson’s more controversial 2004 movie, The Passion of the Christ. No distracting game of “Spot the Star” and the road to Calvary a Hollywood Boulevard “Walk of Fame” here, as some Rotten Tomato critics might say. It graphically told the story of the last 12 hours of Jesus of Nazareth’s life before he was crucified in Jerusalem, with dialogue in Aramaic, with English sub-titles. The actors were relatively not famous, except for then rising star James Caviezel, a devout Roman Catholic, who played Jesus. The Passion of the Christ is a deeply controversial film, attracting criticism for anti-Semitic themes, inaccurate history and extreme violence, a recent Newsweek review said (Jan. 31, 2018). Yet it was a smashing box-office success, raking in about $611.9 million worldwide, including about $370.8 million in the US, (on a $30-million budget) (Ibid.).
But the violence and anti-Semitism in The Passion of the Christ might have only reflected the violence and racism, and the divisiveness in 2004, when the film was released. Bomb attacks on four Madrid commuter trains killed 191 and injure hundreds more in March; Hamas spiritual leader Sheikh Yassin was killed in an Israeli air strike, triggering tens of thousands of protests; Four US civilian contractors were killed and mutilated by a mob in Falluja Iraq; Photos of US soldiers allegedly abusing Iraqi detainees in Abu Ghraib prison were discovered and investigated. The US commission investigating the 11 September attacks published its report of 3000 killed. Militants loyal to Shia cleric Moqtada Sadr staged an uprising in the Iraqi city Najaf; over 300 people more than half of them children died as the Beslan school siege ended in violence. After three weeks of captivity British hostage Ken Bigley was beheaded by Islamic militants in Iraq. A full-scale US-led assault on the Iraqi city of Falluja began (http://news.bbc.co.uk).
Two films on the Christ’s crucifixion and resurrection versus the escalating violence in the world — art imitating life, or life imitating art? But the story of Christ is not art, but the ultimate Reality — meaning, Redemption and Resurrection. In the Christian faith, Easter is the triumph over the death of mind, body and soul (a lack of faith and hope). And it cannot be very different for other religions and beliefs that there should be respect for one another (a vital ingredient of the universal concept of “love”), where there is no physical, emotional or moral violation of the other.
Jim Caviezel, who was 33 years old when he played the dying Jesus at 33, said he has been shunned by Hollywood since taking the role (The Guardian, May 3, 2011). He said Gibson warned him that it would happen, but as both very devout, traditional Catholics, they were willing to make the sacrifice of prejudicing their careers for the sake of the message of God’s love for all. True enough, Caviezel has not had any significant roles since The Passion. But more than for the alleged anti-Semitic bias of Gibson (against the Jews) that supposedly stigmatized the film, perhaps it was difficult for producers/directors to disengage the stereotype of being the all-good, all-holy God-Man that enveloped Caviezel’s image that barred him from playing any inferior character.
Mel Gibson announced in 2016 that he will be completing a sequel to The Passion of the Christ in two years (2018), which will be titled, The Resurrection (USA Today, Jan. 30, 2018). Jim Caviezel will again be Jesus, and Maia Morgensten (a Jew by religion) will be Mary, mother of Jesus. Gibson is tight-lipped about the treatment and the technicalities, but foreseeably, there will be no violence, as the subject matter of the Resurrection is serene, mystical and cannot be physically violent.
But will the world soon repent all the continuously building violence and hate, and will nations reach out in peace to each other?
At his Easter vigil homily, Pope Francis exhorted: “Darkness and silence disorient and paralyze us. They plunge us into a crushing routine that robs memory, silences hope, and leads to thinking that ‘this is the way things have always been.’ Amid this overpowering silence it is the stones that cry out and proclaim a new way for all (vaticannews.com March 31, 2018).
“Do not be afraid… for He is risen.” Pope Francis said this should “affect our deepest convictions and certainties” and should challenge us and encourage us “to trust and believe that God ‘happens’ in every situation and in every person.” Christ is risen: “This is the message that sustains our hope and turns it into concrete gestures of love,” the Pope said (Ibid.).
 
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
ahcylagan@yahoo.com

Disbursement growth seen accelerating — DBM

DISBURSEMENTS to government agencies accelerated early in the year, providing early warning of ramped-up public spending that will support growth, though the disbursement growth rate has room to improve, the Budget secretary said.
Commenting on the January cash operations report released by the Bureau of the Treasury, Budget Secretary Benjamin E. Diokno said that the 15% disbursement growth rate has room to improve even though it more than doubled from the January 2017 rate of 6.67%.
“Nababagalan pa ako diyan (I find that slow),” Mr. Diokno said. “The size of the budget has quadrupled… we are making up for past neglect. Historically the infrastructure to GDP (gross domestic product) ratio is about 2.6% only, but now we are at 6.1%,” Mr. Diokno told reporters on the sidelines of the Procurement Summit held last week in Quezon City.
“The disbursement rate will rise following an S-curve yan eh. When the fiscal year starts, it usually slows down but then it will accelerate,” he added.
The government’s fiscal year corresponds to the calendar year.
Asked about the February performance of disbursements, Mr. Diokno said: “Higher than 15%,” noting the impact of salary adjustments alone.”
He added that the first quarter disbursement growth should be under 20%
Mr. Diokno said because of the spending developments, growth targets will be “kayang-kaya (easily attainable).”
The government targets 7-8% GDP growth this year until 2022.
The Development Budget Coordination Committee has set a P3.313-trillion expenditure target for 2018, up 17.31% from the actual P2.824 trillion spent in 2017.
Mr. Diokno noted that large-scale infrastructure projects are currently in procurement for the Department of Transportation (DoTr) including the North-South Commuter Railway, airport projects in Tacloban and Zamboanga, and the Metro Manila subway.
“We are the procurement agent. We do the dirty work then we give it to the DoTr. DoTr will still be in charge but we did the processing so it’s faster now.” — Elijah Joseph C. Tubayan

Rules clarifying REITs’ VAT status out; public ownership unresolved

THE GOVERNMENT has released three new implementing regulations in connection with the Tax Reform for Acceleration (TRAIN) law, including the tax treatment of properties transferred to Real Estate Investment Trusts (REITs), an issue which has delayed the development of the sector for nearly a decade.
The BIR issued Revenue Regulation (RR) 13-2018 dated March 15 that amends the consolidated VAT rules under RR 16-2005. This includes the repeal of some VAT exemptions, limiting the VAT zero-rating to direct exporters who actually export goods out of the country, and increasing the VAT threshold to P3 million from P1.9 million as stated in the TRAIN law, among others.
BIR at the same time inserted under the VAT-exempt transactions the “transfer of property pursuant to section 40(C)(2),” implementing Section 34 of TRAIN or Republic Act No. 10963.
Asked whether this means that the transfer of assets to REITs are indeed VAT-exempt, Bureau of Internal Revenue (BIR) Deputy Commissioner Marissa O. Cabreros told BusinessWorld in a text message on Thursday: “Yes, for those transferring real property to REITs. Provide[d] it falls within the requirement of Sec. 40(C)(2).”
Section 40 (C)(2) refers to properties that are “transferred to a corporation by a person in exchange for stock or unit of participation in such a corporation of which as a result of such exchange.”
Ms. Cabreros added that the BIR may no longer issue an amended RR for the tax treatment of REITs, as the issue may be addressed in its upcoming comprehensive implementing rules for VAT.
“We are prioritizing TRAIN issuances, maybe no need for new REIT RR because RR on VAT (TRAIN) will cover it,” she added.
VAT treatment is one of the reasons why the REITs have not taken off since Republic Act No. 9856 became law in December 2009.
The REIT law did not address the tax treatment of the initial transfer of real property to REITs, which led to the BIR interpreting the transaction in RR 13-2011 as subject to VAT, being ordinary assets being used in business or held for sale or lease.
REITs are listed corporations with P300 million in minimum paid-up capital, with 75% of the assets invested in income-generating real property such as residential projects, hotels, hospitals, malls, resorts, and even tollways.
Even with the VAT issue cleared up, the minimum public ownership (MPO) requirement remains an obstacle.
“It is certainly one hurdle less. There are other hurdles: public float should be reduced from 65% to minimum 34%. Ideally, the absolute minimum is 34% and stays that way instead of minimum 65% by year three,” Leechiu Property Consultants President and Chief Executive Officer David Leechiu said in a mobile phone message on Monday.
The law requires that one-third of a REIT should be publicly owned, but the implementing rules and regulations provided by the Securities and Exchange Commission (SEC) mandated a 40% MPO for the first two years, and 67% thereafter.
The MPO for REITs is much higher than the minimum 20% for publicly listed companies. According to the National Tax Research Center, the Philippine MPO requirement is the highest in the Asia Pacific region.
The SEC has not commented on when it plans to lower the MPO.
Mr. Leechiu added that the SEC should likewise repeal the rule for electing a property manager for the REIT. “The REIT sponsors are required to appoint an external third party manager and I believe they should remove this provision. It doesn’t make sense to buy an Ayala REIT if at the end the Ayala management is not running the assets and they are just a passive owner. The public would buy an Ayala REIT because of the Ayala brand.”
“The owners of these assets have spent a lifetime building these assets, they will not just let it go. But also the other is that you need more control and the more control one has, the more structured and organized the management of the asset will be,” he added.
SM Prime Chief Finance Officer John Nai Peng C. Ong, meanwhile said that there should be a separate Revenue Regulation for REITs.
“The implementing rules… should clearly establish that they cover REIT transfers,” Mr. Ong said in a phone interview.
“The discussion is that there are two issues, one is the tax-free transfers and the other one is the public float. So those are the two items,” he said.
SM Prime Holdings, Inc., Megaworld Corp., Century Properties Group, Inc. are among property developers that have expressed an interest in forming REITs.
Aside from the rules on VAT, the BIR likewise issued RR 11-2018 to amend “certain provisions of RR No. 2-98 to implement further amendments pursuant to TRAIN law relative to withholding of Income Tax,” as well as RR 12-2018 that consolidates “the rules governing the imposition and payment of the estate and donors’ tax incorporating the provision of the TRAIN law,” thereby repealing RR-2-2003 after the law established a tax rate of 6%.
The BIR has released RRs on the revised tax rates for minerals, petroleum, and tobacco products, documentary stamps, automobiles, stock transfers, and income tax.
However, it has yet to release regulations on the new excise tax for sugar-sweetened beverages and cosmetic procedures. Ms. Cabreros said last month that the BIR would release all IRRs by March.
She said earlier that individuals and businesses should follow new regulations provided by TRAIN even without RRs, with the agency issuing Revenue Memorandum Circulars following the enactment of TRAIN. — Elijah Joseph C. Tubayan

WTO review cites PHL performance on trade, fisheries, MSMEs

THE World Trade Organization (WTO) fifth policy review of the Philippines concluded with members noting the strides the country has made in growing its economy, specifically its role in strengthening the global trading system and its “active” role in advancing negotiations for fisheries subsidies.
In a statement, the WTO review panel’s chairperson, Colombia’s Juan Carlos Gonzales, added, “Members also recognized the Philippines’ contribution in promoting the work in the WTO on Micro, Small and Medium Enterprises (MSMEs).”
In a separate statement, the Department of Foreign Affairs said: ”Member economies of the World Trade Organization (WTO) praised the Philippines’ economic performance,” read the agency’s statement sent over the weekend.
The policy review took place on March 26 and 28 in Geneva.
DTI Undersecretary Ceferino S. Rodolfo, who headed the interagency Philippine delegation, highlighted the Philippines’ economic performance during the review period in which he also touted the government’s programs for eradicating poverty by making growth more inclusive.
Mr. Gonzales, Colombia’s Permanent Representative to the WTO, said the review panel fielded 330 questions from 22 WTO members during the review process.
The WTO noted the Philippines’ 6.6% six-year average GDP growth rate between 2012 and 201.
The WTO Secretariat report, which was released before the review, had cited concerns about the complexity of the trade license and permit application process and barriers to wider foreign participation in sectors such as agriculture.
The secretariat also noted that foreign participation in government procurement remains low. — Janina C. Lim

Waste-to-energy project in Davao to generate 12 megawatts

DAVAO CITY is planning to build a waste-to-energy facility that can produce around 12 megawatts (MW) of electricity once completed over the next four years, a city official said.
“It’s planned to accommodate 600 tons [of waste] per day,” said Tristan Dwight P. Domingo, assistant city administrator of Davao City, adding that the facility can generate “somewhere around 12 MW” of electricity.
“The timeline now that we are working on is, the facility must be operational before first quarter of 2022, probably April,” he said in a chance interview.
He said the project will be funded in part by official development assistance (ODA) from the Japanese government, with private sector investors possibly contributing.
Mr. Domingo was referring to the ¥5.013-billion, or P2.5-billion, grant from Japan for the development of waste-to-energy facilities in Davao City.
Japan’s grant will be used to build and manage waste-to-energy facilities to reduce the city’s solid waste and convert it into electricity.
On the need for private investment to supplement ODA, Mr. Domingo said: “The technology is very expensive. We are looking into trying to implement this with private partners,” he said.
He said that when Japan International Cooperation Agency (JICA) was doing the study for the project, it was looking at a cost of around $100 million, or about P5.23 billion.
The estimated funding was based on the city’s waste output in past years and projections for the next 20 years, he said.
“Right now the commitment of Davao City is to provide the land where this facility will be built,” he said, adding that city hall is currently finalizing the location.
“Also, there will be the operations side. We’ll be required to pay a certain fee to process the garbage,” he said. — Victor V. Saulon

Which way to grow?

In the World Bank’s January 2018 Global Economic Prospects report, the Philippines was expected to post a steady 6.7% growth this year and in 2019, before a slight decrease to 6.5% in 2020.   Although the estimates are lower than the government’s 7.0% to 8.0%, the Philippines is still seen by the World Bank to continue being among the fastest-growing economies in Southeast Asia.
With a strong and positive growth outlook for the country, the questions that now face C-Suite leaders of big and small businesses alike, are: Where do you want to take your business moving forward? How can you capitalize on this growth? And ultimately, when will you do it?
Given current market conditions and anticipated opportunities, it would seem that the time to act is now. Companies would benefit from taking a proactive, rather than reactive, stance. They should also pay attention to market trends, in order to leverage on these to seize opportunities and propel the organization’s priorities.
ORGANIC GROWTH VS INORGANIC GROWTH
There is no doubt that growth is always on the agenda of every business. The only question is how this will be achieved.
While companies have a wide range of diverse approaches to grow their business, the challenge is to identify the right one for the business’ strategic direction. Smaller enterprises generally favor growth from an internally focused organic approach, while larger enterprises usually prefer to take an externally driven inorganic growth strategy, such as through acquisition. There’s no one-size-fits-all solution. Management and business leaders need to assess which strategy best suits the organization. Both avenues are open to companies of any size and both avenues have their advantages and disadvantages.
ORGANIC GROWTH
Taking on an organic growth approach (or growth from within) involves, among others, a focus on growing the operations, reinvesting the profits in income-generating new assets, and improving productivity to increase the bottom line. Expanding from within gives management a deeper understanding of its business and allows it to quickly take advantage of changes in the industry. This also allows management to control the pace of growth in order to maintain one that is comfortable for the organization. However, this generally takes a longer time given the usually limited resources for growing the business. The risks of organic growth lie in expansion that outpaces the ability to effectively manage, stretches resources too thin, strains capital, or diverts focus from the business’ core mission.
INORGANIC GROWTH
Inorganic growth, which can be done via mergers and acquisitions (M&A), can result in accelerated growth as market share and assets are immediately larger; new skills and knowledge become available, and access to capital and new markets may be easier. However, this generally has greater financing requirements, which, in turn, entails higher cost of funding.
Naturally, experiencing a sudden increase in size also presents significant management challenges that increase with the size and complexities of the new entity created. People and branding issues are likely to arise. At the same time, systems, sales and support capabilities must be scaled and positioned to meet new demands. No matter how ideal an M&A initiative looks, seamless operational integration on the back and front ends are the real keys to its success.
TO INVEST OR DIVEST, THAT IS THE LONG-TERM GROWTH QUESTION
The 17th Edition of EY’s Global Capital Confidence Barometer issued in October 2017 states that 98% of the surveyed respondents see the global economy as improving or stable, and 99% see the M&A market as improving or stable. From among these respondents, 56% intend to pursue acquisitions, indicating that M&A is a cornerstone of today’s corporate route to growth. And where there are buyers, there are sellers. Hence, forward-looking leaders focus on selling assets in the same way they focus on acquisitions. Strategic divestments are a key to raising capital and deploying it into a company’s core business.
Likewise, out of 900 corporate executives from around the world interviewed in a recent survey, 76% answered that their most recent divestment created long-term value. By applying leading practices to the process, selling assets and reshaping portfolios can help companies concentrate on higher-growth opportunities and create value for stakeholders. Although selling can mean a short-term dip in top-line growth, redeploying and reinvesting capital in core activities, expanding into new markets or developing new products can lead to longer-term growth and higher value.
Local conglomerates are also revisiting their portfolios and are using M&A’s and divestments to expand their businesses. Among the notable M&A’s and divestments in the past two years are the following:
• A food manufacturer’s (Buyer) acquisition from another food manufacturer (Seller) of the selling rights to manufacture and distribute a global food brand’s products. This enabled the Buyer to expand its food portfolio while the Seller on the other hand was left to focus on its snack foods and beverages business;
• A conglomerate involved in mall operations, among others, ventured into a new business with its acquisition of a logistics company as part of its strategy to address the emergence of e-commerce, which is threatening the malls’ foot traffic;
• A conglomerate acquired an e-commerce business as part of its strategy to invest in new disruptive businesses that provide innovative solutions to evolving markets;
• A telecommunications company divested its remaining stake in a utilities company to focus on its telco business and fund ongoing network upgrades and expansion;
• A real estate developer (through a joint venture with a retail group) sold to a petroleum company its shares in a convenience store chain to focus on its core businesses. The petroleum company, on the other hand, sees the acquisition of the convenience store chain as complementary to its retail fuel business and marks its entry into the fast-growing domestic convenience retail market; and,
• A conglomerate’s energy unit invested in a power company to increase its footprint in clean coal technology that provides reliable and affordable power, particularly in Luzon.
While the impact of the above transactions has yet to be seen, these conglomerates believe that the M&As and divestments they have undertaken are a step towards reaching their desired growth.
TAKE ACTION
With the economy continuing to grow, one has to pay attention to market trends and use these to seize opportunities to propel the company’s priorities and explore outside the organization’s comfort zone. By taking better-informed and decisive action, management is better able to find the right balance between future risk and reward. Part of this challenge is understanding that growth is not just about investing, but sometimes, it’s also about divesting at the right time.

San Miguel now up over Magnolia after taking Game Three

By Michael Angelo S. Murillo
Senior Reporter
THE defending champions San Miguel Beermen are now up 2-1 in their best-of-seven PBA Philippine Cup finals series over the Magnolia Hotshots Pambasang Manok after taking Game Three, 111-87, in the resumption of Philippine Basketball Association action after the Holy Week break on Sunday night.
Showed steady form to stave off every Magnolia challenge in the first three quarters, the Beermen made a strong push to start the fourth quarter and never looked back to claim the upper hand in the series and move one step closer to completing their mission of winning four straight All-Filipino titles.
Chris Ross and Marcio Lassiter got things fast for the Beermen in the opening quarter, accounting for all their team’s points in the first four minutes and give San Miguel a five-point lead, 13-7.
The Beermen would capitalize on the early momentum thereafter, building a 29-22 cushion by the end of the first 12 minutes.
In the second quarter the two teams went back and forth, fighting to a 40-34 count, with San Miguel still on top, at the 6:07 mark.
PJ Simon though would spark a 9-3 run by the Hotshots in the next three minutes to tie the knot at 43-all.
The Beermen eventually kept their head above water, holding a slim one-point advantage by the halftime break, 50-49.
At the beginning of the third canto San Miguel would go on a 16-6 run in the opening five minutes to create further distance, 66-55, and threatened to pull away.
Magnolia was quick to stop bleeding, stringing up four straight points after to stay within striking distance.
It continued to cut into the lead of San Miguel, trimming it to just three points, 67-64, with less than three minutes remaining.
The Hotshots, however, did not go closer than that as the quarter came to a close as the Beermen finished with an 8-4 blast, with June Mar Fajardo leading, to hold a 75-68 lead heading into the final frame.
With the outcome of the match still open, the two teams jostled to establish early control in the payoff quarter.
But it was San Miguel which would explode first, racing to a 92-71 edge after six minutes.
The Hotshots tried to claw their way back thereafter only to have the door slammed on them as the Beermen were unrelenting in their attack and ran away with the victory.
Mr. Lassiter led the Beermen with 24 points, to go along with six rebounds and five steals.
Mr. Fajardo had 21 points and 17 rebounds while Mr. Ross and Arwind Santos each had 14 points.
Gabby Espinas, Matt Ganuelas-Rosser and Brian Heruela came off the bench to give a big boost, allowing the San Miguel starters to have more time to rest.
Mark Barroca, meanwhile, top-scored for Magnolia with 22 points with Paul Lee adding 15 markers.
“The first half was a close game. In the second half we made sure to take control of our turnovers and just made a run. We stayed aggressive and it made a difference,” said Mr. Lassiter, named player of the game, in the postgame interview.
San Miguel will now have a chance to bury Magnolia some more in the series in Game Four on Wednesday at the Smart Araneta Coliseum.

Azkals: Creating history

By Michael Angelo S. Murillo
Senior Reporter
THE PHILIPPINE national men’s football team created history last week when it barged into the AFC Asian Cup for the very first time.
Beating Tajikistan, 2-1, in their final Asian Cup Qualifiers group match, the Philippine Azkals assured themselves of a spot in the prestigious continental tournament by topping Group F with a record of three wins and three draws and 12 points, while at the same infusing life back to local football which of late had been thirsty for something to rally behind at.
The history-making win did not come easy for the Philippines as it had to stay calm and collected to come from behind and snatch the win after going a goal down early in the second half of the contest.
Stared at defeat when Tajikistan’s Nazarov Akhtam punched through a penalty kick in the 64th minute off a foul from Azkals’ Kevin Ingreso, the Philippines stayed the course and remained aggressive, which it was eventually rewarded for.
Mr. Ingreso made up for the goal of Tajikistan nine minutes later, heading an Iain Ramsay pass which sailed past the visiting side’s keeper Mahkamov Abduaziz to level the count and send the 4,000-plus fans at the Rizal Memorial Stadium grandstand to a frenzy.
While a draw was enough to see the Azkals through to the AFC Asian Cup, for good measure they added another goal as regulation time expired care of skipper Phil Younghusband off a penalty.
The goal was the 50th in the international career of the longtime Azkals player, which made it all the more significant.
“We made history today for Philippine football. Everyone gave their all. We are thankful for all the support that we got. I can’t describe my feelings right now. We were crying on the pitch. I think it will take a few weeks before it really sinks in what we have accomplished. I think we deserved it. We really fought hard out there,” said Mr. Ingreso, named man of the match, after their victory.
“We were still positive despite being down 0-1. We just kept pushing forward. We knew we had our chances and we did it. This is an achievement for the all Filipinos all over the world,” the 25-year-old midfielder added.

Philippine Azkals 2
Midfielder Iain Ramsay of the Philippine Azkals made a pass to teammate Kevin Ingreso to level the count of their key AFC Asian Cup Qualifiers group match versus Tajikistan on March 27. The Philippines beat Tajikistan, 2-1.

BEST TEAM IN YEARS
For the Azkals’ American coach Thomas Dooley, the team that vied for the Asian Cup spot was the best one yet during his tenure, and that he was not surprised that they were able to accomplish their mission because everybody was on the same page.
“In four years that I am here this is the best team that we have. The energy, the spirit in training was unbelievable. Everyone was positive. I did not see any one player who was in a bad mood. Everyone was laughing and energized. It was unbelievable. Everybody is helping each other and I told them if that is how they will prepare for every game you cannot lose,” the coach, whose angling for a fresh contract after his two-year deal expired at the weekend, said.
“That is what a team is all about. Everybody has to work. This is amazing. You just have to stay positive. We just followed what we had to do,” added Mr. Dooley even as emphasized the need for the team to continue spending more time together as a group to better prepare and improve.
Apart from Messrs. Ingreso, Ramsay and Younghusband, also part of the AFC Asian Cup-winning Azkals team were goalkeeper Neil Etheridge, defenders Simone Rota, Carlos De Murga, Daisuke Sato and Dennis Villanueva, forward Mike Ott, and midfielders Manny Ott and Misagh Bahadoran.
Part of the team as well were Junior Muñoz, Jhanjhan Melliza, Jeffrey Christiaens, Nick O’Donnell, Patrick Deyto, Patrick Reichelt, Pika Minegishi, Sean Patrick Kane, Javier Patino, Dylan De Bruycker, Paul Mulders and James Younghusband.
The AFC Asian Cup happens in 2019 from Jan. 5 to Feb. 1 in the United Arab Emirates (UAE).
The Philippines is part of the field that also has host UAE, Qatar, South Korea, Japan, Thailand, Saudi Arabia, Australia, Uzbekistan, Iran, Syria, Iraq, China, Palestine, Oman, India, Lebanon, Turkmenistan, Jordan, Bahrain, Vietnam, Kyrgyzstan, North Korea and Yemen.
As per tournament format, the 24 teams will be drawn into six groups of four teams each. The teams in each group play a single round robin. After the group stage, the top two teams and the four best third teams will advance to the round of 16. The winners will advance to the quarterfinals. The quarterfinal winners will advance to the semifinals. The semifinal winners will play in final.
Draw for the AFC Asian Cup is set for May 4.

Wall, Wizards book spot in playoffs; Heat halted

LOS ANGELES — John Wall made a successful return with a 15-point and 14-assist performance as the Washington Wizards defeated the Charlotte Hornets, 107-93, on Saturday to book their spot in the National Basketball Association playoffs.
All-star Wall was appearing in his first game in two months for the Wizards who clinched their fourth playoff berth in the last five seasons.
“We don’t know who we play and we really don’t care who we play. We just want to play well going into the playoffs,” coach Scott Brooks said.
Otto Porter tallied 26 points and 11 rebounds and Bradley Beal nailed six of eight shots from beyond the arc as the Wizards hit a franchise record-tying 18 three pointers.
Wall last played in January when the American had left knee surgery. His impact was immediate as he made a three-pointer on his first shot of the game and finished with 33 minutes of playing time.
“It was good to see my first shot go in,” Wall said.
Washington had lost four of the last five without Wall to drop into sixth place in the Eastern Conference, heading into the Hornets’ matchup.
Wall had averaged 19.4 points and 9.3 assists in 37 games before the injury.
“That Ferrari is pretty good,” Brooks said referring to Wall. “He got a lot of open shots for a lot of players. That’s what he does at the highest level in the league.”
The Hornets, who have now lost two straight, were led by Dwight Howard with 22 points.
“I just think turnovers killed us,” said Howard, who declined to give Wall credit. “I don’t want to say so much that it was John Wall coming back, but I think it was just turnovers.”
Washington beat Charlotte for the first time in four tries this season.
Elsewhere, Rondae Hollis-Jefferson scored 20 points as the Brooklyn Nets denied the Miami Heat a chance to clinch a postseason spot with a 110-109 overtime win.
Caris Levert scored with about a half-minute left in overtime to put Brooklyn up for good.
Levert finished with 19 and Brooklyn put seven players in double figures for the second straight game.
Brooklyn’s six-game overtime losing streak ended, and the Nets went 3-1 against the Heat this season.
James Johnson and Goran Dragic each scored 18 for Miami, which got 16 from Kelly Olynyk and 14 from Hassan Whiteside. Dwyane Wade had 13 for the Heat, whose magic number for clinching remained one.
In other games, Marcus Morris had 25 points and nine rebounds and the Boston Celtics rallied to beat the Eastern Conference-leading Toronto Raptors, 110-99.
Andre Drummond narrowly missed a second straight 20-20 game with 22 points and 17 rebounds, and the Detroit Pistons beat the New York Knicks, 115-109. — AFP

Fight continues for the UST Golden Tigresses

UNIVERSITY ATHLETIC Association of the Philippines (UAAP) Season 80 has turned out to be a rough one for the University of Santo Tomas (UST) Golden Tigresses but the España-based spikers remained committed to their cause and vowed to continue fighting up to the end.
Currently outside of the playoff picture at 4-7 and with three games remaining in its schedule, UST still hopes to barge into the Final Four via the backdoor, riding the momentum it has built of late.
Following a 2-5 record in the first round of the women’s volleyball tournament, the Tigresses has infused some life back in their campaign, going 2-2 in its last four matches, their victories coming in their last two — against the University of the Philippines and National University (NU) in that order.
Their somewhat turnaround has them still in contention for the final semifinal spot, something the Tigresses said they are eyeing keenly for the remainder of the elimination round.
“With this win I guess we still are in the race for the Final Four. But more than the standings this is big for our confidence and self-respect which was somehow diminished during our rough start to the tournament,” said UST coach Emilio “Kungfu” Reyes in the postgame press conference of their four-set win over NU on March 25.
In said game, the Tigresses went a set down early but showed the composure and determination needed as the game progressed, while stepping up their defense as well, to win back-to-back games and improve to 4-7 in the ongoing season while sending the Lady Bulldogs (6-5) to their fourth straight defeat.
The victory and the better showing is a welcome development for UST, which has to grapple with injuries to key players, including EJ Laure who is sitting out the entire Season 80, in the season and simply could not establish a winning momentum until recently.
While the rough start they had to the season has left them ruing, the Tigresses still feel all is not lost for them and that they still have time to make up for lost ground albeit it would require them to stay the course and compete harder.
“We are dealing with what is in our hands right now. What happened in the first round is over and done with. We cannot do anything about it anymore. So we are focusing on our remaining games and we will work hard in them,” Mr. Reyes said.
“It remains to be seen if it we will go to the next round but we will continue to fight to have a positive ending to our season,” he added.
UST next plays on Wednesday, April 4, against the Ateneo Lady Eagles. — Michael Angelo S. Murillo

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