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Co-ops emerging as key players for electric-powered Mindanao Railway System

DAVAO CITY — The Mindanao Development Authority (MinDA) is ready to take on the lead role for coordinating power supply for the planned Mindanao Railway System (MRS), which will have electric trains.
MinDA Assistant Secretary Romeo M. Montenegro, in an interview with the media last week, said a mechanism needs to be put in place involving the National Transmission Corp., electric cooperatives, and private distribution companies.
“The question is how many municipalities will the train traverse, how many electric co-ops, from whom will the electricity be sourced? That particular issue alone is something that cannot be resolved by itself or by a team of construction people. It will go beyond that, and that is why MinDA comes in to make sure all these broader issues are addressed at the top level,” he said.
ON SCHEDULE
Meanwhile, Mr. Montenegro said the 102-kilometer MRS phase 1 spanning the cities of Tagum, Davao, and Digos remains on schedule despite the necessary revisions for the two-track, electric train system.
The two-track electric system was contained in the original proposal, but the government initially approved a one-track system with diesel trains. In June, however, the Department of Transportation (DoTr) agreed to revert to the original proposal.
Mr. Montenegro said the DoTr and the National Economic and Development Authority are set to address soon the budget requirement for the revision.
“The original endorsement submitted by the region to the national government is a two-track electrified railway system with a budget of P85 billion,” Mr. Montenegro said.
A P36-billion budget was approved for phase 1’s one-track system, with P9 billion already allocated in this year’s national budget.
“Whether it is a one or two-track locomotive, it will still have to pass through the initial stages of detailed engineering and ROW (right-of-way) negotiations, so the project is on track and the timeline still the same,” Mr. Montenegro said.
MRS construction is scheduled to start late this year.
“The major challenge in starting the project now is in negotiating the road right-of-way as it will traverse privately-owned areas,” he said.
Mr. Montenegro said the DoTr is conducting on-site and drone inspections of the areas that will be traversed by the project. — Carmencita A. Carillo and Maya M. Padillo
Mindanao rail system

5,000 MW capacity projected for Mindanao grid by 2030

By Maya M. Padillo and Carmelito Q. Francisco
Correspondents
DAVAO CITY — An additional power supply of about 3,000 megawatts (MW) is projected to be required by the Mindanao grid by 2030, according to Mindanao Development Authority (MinDA) Assistant Secretary Romeo M. Montenegro.
Mr. Montenegro, who also heads the technical working group of the Mindanao Power Monitoring Committee, said this projection covering all sectors is based on the Department of Energy’s (DoE) outlook using a 7% to 8% growth rate in demand.
“(It is) based on forecast of 7% to 8% annual growth demand by DoE. For instance, Mindanao’s peak demand in 2012 was around 1,210 MW, but as of November 2017, new highest peak demand was recorded at 1,760 MW. Hence, total capacity for Mindanao, with additional 3,000 MW shall be around 5,000 MW by 2030, which will also cover the required reserve margin such as regulating, contingency and dispatchable reserves,” Mr. Montenegro told BusinessWorld in an interview.
The Mindanao grid, based on data from the National Grid Corp. of the Philippines, currently has a system capacity of more than 2,200 MW.
Mr. Montenegro said while MinDA continues to push for more renewable energy projects to achieve a 50-50 mix with fossil fuels, the more readily available sources are existing diesel-fired plants that are prepared for expansion.
“For now, there are no new investors in power as Mindanao still has a surplus, but the big players in Mindanao have power plants that are capable of expansion and scaling up.”
Among these are Aboitiz Power Corp. subsidiary Therma South, Inc. (TSI)’s plant in Davao and SMC Global Power Holdings’ Malita plant in Davao del Sur.
Mr. Montenegro said it would be easier now to attract new investment in the power sector with the expected completion of the Visayas-Mindanao grid interconnection by 2020.
“When that happens, we will be already under one grid — the Luzon, Visayas, and Mindanao — so that even if you have a power plant in Mindanao you can sell it all the way to Luzon. It’s the same case happening now when Singapore buys cheaper hydro(power) from as far as Laos that has massive power plants,” he said.
COOPERATIVES
Meanwhile, a Davao City business leader said the government must now revisit the policy on electric cooperatives (ECs) to make them more responsive in their franchise areas, particularly the emerging urban centers.
Arturo M. Milan, president of the Davao City Chamber of Commerce and Industry, Inc., told BusinessWorld that the law on ECs should be revised to allow them to build up financial capability, which could then be used to improve services.
“The ECs in urban centers must not only be able to expand their services through rural electrification, but must also be able to immediately respond to the needs of their customers. At present, they cannot do it because they have no financial capability,” Mr. Milan, who was a former top executive of Davao Light and Power Co. before his appointment as advisor of Aboitiz Equity Ventures.
Under Presidential Decree 269 of 1973, which established the National Electrification Administration (NEA), ECs are non-stock, nonprofit entities that are intended to serve as power distributors.
Unlike other cooperatives, ECs do not adhere to voluntary membership as their consumers automatically become the members, and they are under NEA supervision, including the designation of the management team.
Under this present setup, said Mr. Milan, ECs have no autonomy to immediately act on key issues such as providing more power supply to their customers.
Expanding membership participation would also strengthen accountability, he added.
“The members can demand for better service, unlike now when they will only be allowed to participate in the general assembly (to choose their board of directors),” he said.
Energy Assistant Secretary Redentor E. Delola, in a separate interview, agreed that the status of ECs needs to be reassessed to allow them to meet growing demand, including those from prospective business ventures.
“Personally, I believe that, especially those in the growing areas, ECs must be capable enough to answer the needs of the consumers by becoming financially stable,” Mr. Delola said.
“It is very hard for ECs to immediately respond because they do not have that flexibility as they need to apply for capital expenditures, which takes time to approve,” he added.
On the other hand, NEA Administrator Edgardo B. Masongsong said ECs must not be allowed to shift as for-profit entities unless they have been able to meet their main purpose, which is to serve all “lifeline consumers.”
Based on NEA data, about 30% of the country’s 12.18 million household consumers are still under a “lifeline” level, meaning consumption is only up to about 50 kilowatt hours a month.
“But we are open to converting ECs… in a case-to-case basis,” Mr. Masongsong said, noting that there are several that have been performing efficiently.

Withdrawing from the bank account of a deceased person

Matters relating to death are usually not a good topic to discuss. However, what is worse is not knowing what to do when one is faced with death-related situations, such as when the family of the deceased needs to pay the hospital bills or funeral expenses, or when funds are needed to transport or repatriate the deceased.
Unpleasant as the topic may be, I am sharing with you the clarifications issued by the Bureau of Internal Revenue (BIR) on the requirements for withdrawing from the bank account of a deceased depositor.
Most of us are already aware that the Tax Reform for Acceleration and Inclusion (TRAIN) Law has opened a window where the estate tax return will not be a prerequisite to withdraw funds from the bank account of a deceased. The old law required estate taxes to be first settled and a BIR clearance secured prior to the release of the funds. There were many instances in the past when families of the deceased were in deep debt or begging for help to pay for their expenses, while the bank account of the deceased remained frozen pending the settlement of the estate tax.
Now, the TRAIN Law only requires that the 6% estate tax is paid on the amount withdrawn. Families of the deceased need not wait for the estate tax to be processed before getting funds from the bank account. Based on the BIR clarifications, though, the heirs cannot just go to the bank and demand the release of the funds. The BIR clarifications issued under Revenue Memorandum Circular (RMC) No. 62-2018 are as follows:
1. A TIN FOR THE ESTATE
RMC No. 62-2018 mandates the bank to require the executor, administrator, or any of the legal heirs applying for the withdrawal to present a copy of the Tax Identification Number (TIN) of the estate of the decedent and BIR Form No. 1904 of the estate duly stamped received by the concerned Revenue District Office (RDO) of the BIR in accordance with the existing guidelines on the issuance of TIN. The copy of the TIN, at this point, could simply refer to the appropriate BIR form for applying for registration, which the BIR would stamp as received and where the BIR would write the assigned TIN. BIR Form 1904 is the application for registration for one-time taxpayer and person registering under EO 98 (securing a TIN to be able to transact with any government office). For estate tax purposes, the Death Certificate should be attached.
Where shall the TIN of the estate be secured? The registration of the estate is applied in the RDO having jurisdiction over the residence of the deceased at the time of death. If the deceased is a nonresident, the TIN shall be secured from the RDO where the executor or administrator is registered. If the executor or administrator is not a registered taxpayer, the registration of the estate shall be made with the RDO having jurisdiction over the place of residence of the executor or administrator.
The TIN is normally issued within an hour at the time of application, if the documents are in order and there is an available approver or signatory.
2. PERIOD TO WITHDRAW FROM THE BANK ACCOUNT
Withdrawing from the bank account without first settling the estate tax and the BIR clearance shall be allowed only within one year from the date of the depositor’s death. This prescription period complements the one-year deadline for filing the estate tax return. Beyond the one-year period, the heirs would have no other way of withdrawing the bank deposits, except to file the estate tax return and secure the BIR clearance. The prescriptive period for the withdrawal will discourage complacency on the part of the heirs in settling the estate tax.
3. IF THE ACCOUNT IS A JOINT BANK ACCOUNT
If the account is in the name of two or more depositors, the 6% withholding tax shall only be imposed on the share of the deceased in the joint bank account.
One of the surviving joint depositors will also be required to sign a sworn statement in the withdrawal slip to the effect that all the other joint depositors are still living at the time of withdrawal, and that the withdrawal is subject to 6% final withholding tax.
RMC No. 62-2018 acknowledges that banks are not precluded from requiring pertinent documents to ascertain the identity and the right to claim of the heirs or its authorized representative before allowing any withdrawal from the bank deposit accounts. Banks would have their own policies in this regard, whether internal or in compliance with requirements under applicable laws, rules, and regulations.
The heirs, nonetheless, should bear in mind that it is best to first evaluate if the bank deposit can be exempt from tax, if the estate tax return will be processed. If the taxes are paid through the estate tax return, there is a P5-million standard deduction and a deduction of up to P10 million of the value of the family home. A maximum of P300,000 in estate taxes can be saved, if the cash of up to P5 million is included in the estate and subjected to tax as part of the estate tax return. Likewise, claims of debtors against the estate, as well as unpaid mortgages, are still deductible expenses under the TRAIN Law. These reliefs, if existing, can only be availed of if the estate will be settled by filing an estate tax return.
There are just a few of the possible reliefs from taxes. For estate taxes, these reliefs can be availed of only once in the life and death of a person. Our legislators have fought hard so that these reliefs can be part of our laws. The opportunity should be enjoyed when it comes.
 
Lina P. Figueroa is a principal of the Tax Advisory and Compliance of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing services firms in the Philippines.

Expansion of ASEAN food corporations

Many Philippine companies expand overseas to reach more consumers and increase revenues. Also, companies can utilize global markets to introduce unique products and services (https://www.bizjournals.com/).
ON ACQUISITIONS
According to the McKinsey consultancy, “the strategic rationale for an acquisition has the following six archetypes: “improving the performance of the target company, removing excess capacity from an industry, creating market access for products, acquiring skills or technologies more quickly or at lower cost than they could be built in-house, exploiting a business’ industry-specific scalability, and picking winners early and helping them develop their businesses” (https://www.mckinsey.com/the-six-types-of-successful-acquisitions, May 2017).
CHRONOLOGY
ASEAN is one of the fastest-growing regions with a large population. In the past five years, there have been exciting developments in corporate expansion/acquisition. Here are some in the Philippines.
Universal Robina Corp. (URC). The leading snack foods firm took over New Zealand’s leading biscuit and snack food company Griffin’s Foods Ltd. for NZ$700 million ($580 million) in 2014. This was followed in 2016 with the takeover of Australia’s Consolidated Snacks Pty. Ltd. for AU$600M ($454 million).
Del Monte Pacific. In 2014, the firm purchased Del Monte Foods (USA) consumer products business for $1.675 billion. Del Monte Pacific is 67%-owned by NutriAsia Pacific Ltd. The latter is owned by the NutriAsia Group of Companies, which is majority-owned by the Campos family.
Emperador/Alliance Global. Emperador is the world’s largest brandy maker. In 2016, it bought the Domecq brandies and wines of Pernod Ricard in Mexico. In the previous year, the biggest acquisition was its buyout of Beam Suntory’s brandy and sherry business in Jerez, Spain for $290 million in cash for Bodegas Fundador.
In 2014, Emperador acquired United Spirits’ Whyte & Mackay whisky business for £430 million ($729 million).
San Miguel Group. The group has been present in food, beverage, and packaging in Southeast Asia, China, and Australia. In 2017, its packaging unit, San Miguel Yamamura, acquired Australia-based Best Bottlers, which specializes in wines, cider, ready-to-drink and nonalcoholic beverages. Best Bottlers is the third Australian bottling company acquired by San Miguel this year after Barossa Bottling and Portavin.
Liwayway/Oishi. Asia’s leading snack maker operates 30 factories overseas: 16 in China, some 14 overseas (ASEAN, India, and South Africa), plus three in the Philippines. In 2016, the Liwayway Group acquired Spain’s Cola Cao business in China in a transaction costing $13 million.
Monde Nissin. In 2015, the Philippines’ leading noodles and biscuit maker, bought United Kingdom-based Quorn for £550 million ($831 million). Quorn is the world leader in meat alternatives.
Bounty Fresh. The poultry value chain player has expanded overseas. In 2016, PT Bounty Segar Indonesia, a joint venture company with an Indonesian conglomerate, began. Also, Bounty Agro Ventures, together with its business partner, will soon introduce their flagship rotisserie product “Chooks-to-Go” in Malaysia.
In 2017, Bounty Fresh mounted a $309.4-million cash offer for New Zealand’s Tegel Group Holdings. A spokesman for Bounty’s mergers and acquisitions said the bid was part of an expansion strategy for Southeast Asia.
Jollibee Group. As of end-2016, Jollibee International operated 167 stores, with 35 in the United States, one in Canada, 84 in Vietnam, 14 in Brunei, three in Hong Kong, four in Singapore, and 26 in the Middle East. In 2016, Jollibee opened its first store in the Midwest USA, in Illinois. This was followed by opening in Winnipeg, Canada.
This year (2018), Jollibee Foods said it would raise its stake in US restaurant chain Smashburger to 85%, in a $100-million transaction to be paid in cash.
Jollibee Foods also announced it will bring Vietnamese noodle house Pho 24 to the Philippines.
ASIAN FORAYS INTO THE PHILIPPINES
While Philippine companies are expanding overseas, Asian companies have also been investing or acquiring businesses in the Philippines.
Itochu (Japan). The biggest acquisition was Itochu’s purchase of the worldwide packaged foods and Asian fresh businesses of Dole Food Co., Inc. for $1.685 billion in 2013. The transaction resulted in the takeover of Dole’s pineapple and banana operations in Mindanao.
Charoen Pokphand (CP). The company plans to invest $500 million a year in the country, as discussed during its meeting with President Duterte in Bangkok in early 2017. CP, ASEAN’s largest agribusiness conglomerate, already operates a subsidiary in the Philippines.
QAF/Gardenia. Singapore-based QAF Holdings owns the Gardenia brands in the Philippines. Gardenia dominates the packaged bread market with its wide array of bakery products. It has three plants in Laguna and Cebu.
In 2016, Gardenia brought Australia’s Bakers Maison to Manila, with plans to open 100 stores in the next few years. Bakers Maison specializes in French-style breads and pastries. In 2017, Gardenia created a new wholly owned company Nutribake Food Products, Inc. to rationalize its Philippine operations. This year, it is investing P1 billion for the construction of a manufacturing facility in Cagayan de Oro. It is also constructing a new plant in North Luzon.
DelfiFoods/Goya. Headquartered in Singapore, Delfi chocolate confectionery products have core markets in Indonesia, Philippines, Singapore, and Malaysia.
Why do Philippine firms expand overseas? The Philippine consumer market, while growing, is getting crowded for them. And they have money to invest.
Why do foreign firms expand in the Philippines? A large population, growing incomes, an expanding middle class, and having different products to offer, give them an advantage.
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
 
Rolando T. Dy is the Vice Chair of the M.A.P. AgriBusiness and Countryside Development Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.
map@map.org.ph
rdyster@gmail.com
http://map.org.ph

France wins 2nd World Cup


MOSCOW — France celebrated their second World Cup win 20 years after their maiden triumph on Sunday, overcoming a passionate Croatia side, 4-2, in one of the most gripping finals in recent history.
The breathless victory under stormy skies at Moscow’s Luzhniki Stadium means Didier Deschamps’ side — balancing youthful zest and tournament nous — have buried the pain of their defeat in the Euro 2016 final on home soil.
For Croatia, a country of just over four million people, the loss spells bitter pain but their fans celebrated the best run in the nation’s history, which featured a stunning win against Argentina and a semifinal victory against England.
Croatia started the match strongly but an own goal from Mario Mandzukic and a controversial VAR-assisted penalty from Antoine Griezmann following an Ivan Perisic leveler gave France a 2-1 halftime lead.
Further strikes from Paul Pogba and Kylian Mbappe gave France a comfortable cushion before a late consolation from Mandzukic after an error by French goalkeeper Hugo Lloris.
France captain Lloris lifted the World Cup trophy as torrential rain cascaded down in the Russian capital.
Deschamps, thrown into the air by his ecstatic players as they celebrated their win, said the victory was “just as big and just as beautiful” as the 1998 triumph in France.
“There are two things that matter — one is that these 23 players are now together for life, whatever happens, and also that from now on they will not be the same again, because they are world champions,” he said.
“To be champions of the world as professional footballers, there is nothing better.”
Deschamps, who captained the team when they lifted the World Cup in 1998, has become just the third man to win the trophy as both a player and a manager after Franz Beckenbauer and Mario Zagallo.
“We did something incredible, we made history and we are going to enjoy it,” said France goalscorer Griezmann.
US President Donald Trump quickly sent congratulations to France for their “extraordinary soccer” and also praised Russia’s President Vladimir Putin for his hosting of the tournament, which he described as “one of the best ever.”
French President Emmanuel Macron, who had punched the air during the match and stood next to Putin on the podium, tweeted simply “MERCI” to the team.
Putin said Russia could be “proud” of its hosting of the football World Cup, judging it a success “in every respect”.
He added that foreign visitors holding fan ID cards for the World Cup could have visa-free entry to Russia for the rest of 2018.
CLINICAL FRANCE
In chaotic scenes during the post-match French press conference, the celebrating players burst in, soaking Deschamps with drink.
Across France, people erupted in joy, with fans streaming into the streets, honking car horns and flying the tricolore flag at the start of an enormous national celebration.
Croatia dominated the match for large periods, enjoying 61% of possession, but the French defense for the most part held firm and France took their chances with devastating efficiency.
Arguably the turning point of the match was when referee Nestor Pitana awarded France a penalty for handball after consulting the video assistant referee (VAR).
As thunder rolled around the stadium, Griezmann was made to wait but he held his nerve to lash the spot-kick into the net.
FRANCE VICTORIOUS
France’s tournament started slowly before gathering tremendous momentum in the knockout rounds.
Even before the final whistle in Moscow, crowds packed the Champs-Elysees avenue in Paris in a repeat of the scenes of 20 years ago when more than a million people partied there.
Cheers rang out throughout the country for each of four goals, transforming the young team into national icons.
Croatia coach Zlatko Dalic said his side’s luck had run out after the VAR penalty.
“I never comment on referees but in a World Cup final you do not give such a penalty,” said Dalic, whose team had to battle through extra-time in all three of their knockout games before the final.
But he added: “You should never give up, never stop believing. At 4-1 down I was not defeated. Overall, Croatia played a great tournament and showed its strength and quality.”
Disappointed but proud Croatian fans in Zagreb applauded their team as their “heroes”.
When it was over, applause from tens of thousands of Croatian fans rippled through the capital’s main Jelacic square as many lit flares and set off firecrackers.
Croatia’s Luka Modric won the best player of the World Cup award, with Mbappe picking up the prize for best young player.
Belgium stopper Thibaut Courtois was named the best goalkeeper of the tournament while England’s Kane won the Golden Boot as top-scorer. — AFP

France set for heroes’ welcome after thrilling World Cup win

MOSCOW — Victorious France were set to return to a heroes’ welcome today after winning the World Cup for the second time with a roller coaster 4-2 victory over Croatia which set off chaotic celebrations at home.
Teenager Kylian Mbappe applied the coup de grace in Moscow as France, aided by an own goal and the video assistant referee, overcame determined opponents in one of the most compelling finals of the modern era.
Mbappe, just 19, scored France’s sizzling fourth goal and was voted the best young player of a tournament in which he has shown he is a superstar in the making.
The triumph also put Didier Deschamps, who captained the side to victory on home soil in 1998, alongside Mario Zagallo and Franz Beckenbauer as only the third man to win the World Cup as a player and coach.

World Cup France 2
This picture taken from Trocadero on July 15 shows the Eiffel Tower illuminated in French national colors during celebrations after the Russia 2018 World Cup final football match between France and Croatia, on the Champs-Elysees avenue in Paris. — AFP

French President Emmanuel Macron, who cheered every goal in Moscow’s Luzhniki Stadium, was drenched by torrential rain during the trophy presentation and attempted to “dab” with the players in the changing room.
On Monday, Macron will welcome the team back to Paris and the players will make a bus parade up the Champs-Elysees avenue, where they are expected to be feted by hundreds of thousands of people.
Fans in France celebrated into the night, honking car horns and flying the tricolor flag while the Eiffel Tower was lit up in blue, white and red. However, youths also looted a Champs-Elysees store and police fired tear gas as celebrations got out of control.
Deschamps, who was soaked by champagne by his overjoyed players in a chaotic press conference, said the win was “just as big and just as beautiful” as the 1998 triumph.
The breathless victory under stormy skies meant his side — a balance of youthful vitality and big-tournament experience — have buried the pain of their defeat in the Euro 2016 final in Paris.
“We did something incredible, we made history and we are going to enjoy it,” said Antoine Griezmann, who scored France’s second goal from the spot. — AFP

After Wimbledon, reborn Djokovic targets US Open

LONDON — With his Grand Slam reputation and place back in the world top 10 restored, Novak Djokovic will now target a third career Wimbledon/US Open double after clinching his fourth title at the All England Club.
Djokovic defied the odds and even stunned himself by cruising to a 13th major title on Sunday to go fourth on the all-time list of Slam winners.
Only Pete Sampras (14), Rafael Nadal (17) and Roger Federer (20) are ahead of him following his 6-2, 6-2, 7-6 (7/3) victory over Kevin Anderson.
Now the 31-year-old heads for the North America hard court season where he has traditionally thrived.
Of his 69 career titles, 51 have been on hard courts with 17 of those in the United States.
When he won his first Wimbledon in 2011, he was to add his maiden US Open, repeating the grass court/hard court double four years later.
His desire to repeat that feat burns even deeper after he missed last year’s New York showpiece with the elbow injury which threatened to torpedo his career after his 2017 Wimbledon bid ended prematurely at the quarterfinal stage.
“Well, I understand that people are questioning whether I can consistently play at this level. Trust me, I am, too,” said Djokovic.
“If you asked me a month and a half ago whether I think I can win Wimbledon, part of me yes, I hope, but maybe I wasn’t that sure at that time of my level of tennis.
“But this is going to be a huge confidence boost and springboard for whatever is coming up. I like to play on hard courts.
“The US Open was always a successful tournament for me. I didn’t played it last year. I’m looking forward to go out there and play my best.”
Djokovic’s title triumph on Sunday, against a weary Anderson who had spent 21 hours on court becoming the first South African man in the final in 97 years, was his first at the majors since Roland Garros in 2016 when he completed the career Grand Slam.
He arrived at Wimbledon in a prolonged slump after undergoing elbow surgery and with his ranking at 21, his lowest for 12 years.
But with two-time champion Andy Murray missing, eight-time winner Federer defeated by Anderson in the quarterfinals and Djokovic beating world number one Nadal, the 2008 and 2010 champion in a 5-hour, 15-minute semifinal, the stage was set for the Serb.
He will head to the United States boosted by his rejuvenation and knowing that he has a winning record against all his leading rivals.
He is 27-25 against Nadal, 23-22 when up against Federer and 25-11 in his head-to-head series with Murray.
Despite his joy at winning his first Slam for two years, Djokovic admitted that there were times when he thought he would never return to the top.
“Yeah, yeah, absolutely. There were several moments where I was frustrated and questioning whether I can get back on the desired level or not.
“But that makes this whole journey even more special for me.” — AFP

Kwentas klaras

Am I for Federalism? My answer is a qualified yes if it meets certain preconditions. No partisan color here, just a citizen’s assessment of what is best for the country given our present circumstances from over half a century of observation and experience.
Firstly, it must be a unifying model rather than a divisive one. We are a nation divided despite our being a unitary state. It’s a cultural divide that’s kept us from coming together as one nation.
We need to fix our culture first I would think that develops a compelling sense of nationhood in us, a sense of common purpose and a sense of urgency to build a nation better and stronger for future Filipino generations.
Today, like yesterday, we remain tribal or regional or parochial in our thinking and behavior. It translates to “me first before you” that fans the flames of exclusion and self-interest, ahead and above the common good and the national interest. That’s why the disparities in the distribution of wealth and social benefits are so wide that we distinctly have from an economic sense, two nations, one of “haves” and the other of “have-nots.”
Politically, we have the dynasties lording it over newbies. Socially, we suffer backwardness across-the-board as the consequence of those disparities, with poverty, injustice, and armed conflict at the tip of the spear.
We must ask ourselves this. In order for Federalism to succeed can we sensibly jump straight in without fixing those handicaps? Or must we first address those before we adopt Federalism to give it a fighting chance to work for the benefit of the nation?
Secondly, how will the people benefit from this? This point flows from the first. We need to scrutinize the final draft from the Constitutional Commission to find out how Federalism will directly benefit the lives of the people, how it can build a better Philippines — One Philippines, for all Filipinos — with no one left behind. For example, how will it be made to work for the economy to finally reunite OFW families? I’m hoping that there are excellent provisions there that address the question.
Most people I’ve talked to express the concern that the shift to Federalism is simply going to benefit politicians. They see this shift from a unitary state to a federal state as a convenient way of prolonging one’s tenure in office; that whatever new system and structure may emanate from it won’t principally take into account the people’s well-being. In other words, will Federalism be in our national interest if the personalities, policies, and practices that keep us divided don’t undergo a paradigm shift of fundamental transformation?
Thirdly, what will it take for the nation to make it work for generations to come? To this day, most of us keep hearing the word “federalism” but no one can say when asked what model it is that we’re looking at? I’m aware that the ConCom is proposing the same national setup comprising the same 3 branches of the government — Executive, Legislative, Judiciary — that will function at the federal level; while the regions would be transformed into federated states.
The Executive branch will likely have less institutions to manage to fulfil the requisites of deconcentration, decentralization, and devolution. The Legislature will likely still have two houses, the Senate and the House of Representatives. I’m not sure if the ConCom has a parliamentary setup in mind or whether the President will opt for it. The federated states will have the power and the leeway to build their own future.
The thing is this: what model will best suit our gene pool assuming Federalism will somehow be used as a transformative tool to change our culture? No one knows because there have been no strategic communications at all to inform the people what to consider and debate about the substance or the specifics of various models; and which one, or a hybrid, is best for us. If the target is to have the people decide this next year, is that enough time for the people to make the right choice with sufficient knowledge on how to make it work for everyone’s benefit?
Fourthly, I think that the transitory provisions will play an important role in buying time for government and society to adjust to the new system. Time is the most important factor because it will take some doing for it to take root. Surely, we can’t do it cold turkey. A rush job is the best recipe for tragedy, not with our current mentality.
We need time to settle down, get sober, and deliberate with reason on how best to move from the presidential to the federal form of government. Whatever we decide must have in mind that everything we failed to attain or achieve in a presidential form of government — inclusion, peace, justice, equitable growth, sustainable development, safety and security, social cohesion — will now have a better chance under a federal form of government.
Let me just squeeze this in before I sign off. Related to Federalism is the Bangsamoro Basic Law (BBL) issue. I personally object to giving our brother Muslims a “homeland” which is a parcel of land in Mindanao. My reasoning is this: they are Filipinos and their homeland is the ENTIRE country. BBL is unnecessary because our Muslim brothers and sisters can freely reside, study, work and retire anywhere in the Republic of the Philippines, their one and only true HOMELAND.
ARMM, just like other regions in the country, needs to improve its state of governance and civics. It’s been deprived of a fair shake in the equitable distribution of powers and wealth creating measures to pick itself up from the floor to one that stands tall among its peers.
I want Federalism to work.
If both the government and society know its respective roles, rights and responsibilities to make it work, it will succeed far into the future. It starts from there, but without sufficient knowledge and maturity, our decision will have to wait. That would be best in our national interest.
 
Rafael M. Alunan served in the cabinet of President Corazon C. Aquino as Secretary of Tourism, and in the cabinet of President Fidel V. Ramos as Secretary of Interior and Local Government.
rmalunan@gmail.com
map@map.org.ph
http://map.org.ph

Lifehacks for when a robot wants your job

By Nisha Gopalan and Andy Mukherjee
CAN’T CODE, or speak Bahasa? Didn’t go to school with a CEO’s son or daughter? A robot will take your trading seat. Read on if you want to save your job.
The threat from automation is in the flows part of banks’ global markets business, the most important chunk of the biggest division of investment banking. Investment banks garner 70% of their revenue from global markets, made up of trading stocks and bonds, as well as structuring derivatives products and financing; the remaining 30% comes from advisory services like shepherding M&As or helping companies raise equity and debt.
The higher-margin areas within markets — from structuring to swaps — is relationship-oriented, and therefore (relatively) safe from robot overlords. And it happens to be a big contributor to the 70% pie, especially in Asia, where commissions on equities and fixed-income trades are sinking fast, and language and client connections play a big role. Good news? Read on.
With the flows business comprising 51% of banks’ global markets revenue of $109.8 billion last year, according to Coalition data, automation of even vanilla trades is no small threat. Besides, the 30% advisory pie of investment banking revenue outside global markets only pays well when banks counsel on large cross-border transactions or underwrite big IPOs.
In Asia, the former is largely a Japanese game since China pulled the plug on dealmaking by its overly ambitious conglomerates. And large share sales only happen in a few markets. India may be the second-biggest destination for cheap Xiaomi phones, but the Chinese firm’s Hong Kong IPO probably made more for banks than the entire Indian equity advisory industry will earn in fees this year, as a senior finance executive told one of us.
Desks have already shrunk, and will get smaller still. A decade from now all trading will be electronic. Last year, JPMorgan Chase & Co. Chairman Jamie Dimon famously boasted of a currency trader that made a $100-million bet via a cell phone. That’s the shape of things to come.
In contrast to the early days of the 2008 financial crisis, when tech was culled to cut costs, digital upgrades are now seen as both an operational necessity and a strategic differentiator. Tech spending in global-markets divisions of investment banks has risen to $16.5 billion at the 12 institutions Coalition canvassed, from $13.8 billion in 2013. A chunk of that is maintenance of bulky legacy systems, but Amrit Shahani, a London-based research director at Coalition, says large Wall Street and European banks are each spending around 10%, or a giddy $1 billion of their annual revenue, to stay relevant.
robot
Chief technology officers are pushing for even bigger budgets. Their teams are the financial coders who’ve created bespoke systems for Goldman Sachs Group, Inc. and the like and who are increasingly sitting on trading floors so that precious minutes aren’t wasted talking to someone in Bangalore when a huge deal blows up. Contract workers from third-party firms like PageGroup Plc’s Michael Page and Robert Walters Plc are getting seconded for a few years to help run trading floors smoothly. Headhunters say a $155,000 salary (excluding bonuses) for someone with eight years’ experience isn’t uncommon in Hong Kong, for instance. It’s not exactly banker comp, but it’s rising much faster.
Beyond the coders are the bankers-cum-traders-cum-tech thinkers.
Nomura Holdings, Inc. in February hired Jezri Mohideen, a former senior trader at Royal Bank of Scotland Group Plc and Brevan Howard Asset Management, to be its global chief digital officer for investment banking. Based in Dubai, part of his job is to set up artificial-intelligence labs and merge the old and new worlds of asset custody.
Talk to any senior banker or trader and they’ll tell you there’s a lot of soul-searching going on amid threats from fintech and blockchain. The challenges are even more pressing for consumer and private banks, as well as in some corners of corporate lending such as trade finance.
Barclays Plc’s wealth management and investment operations head in the UK is Dirk Klee, previously at UBS Group AG’s wealth arm in technology and digital services. Singapore’s DBS Group Holdings Ltd. CEO Piyush Gupta is using open-application-programming interfaces to blur the boundaries between payments and commerce. If he doesn’t do it, Ant Financial’s Alipay or upstarts such as ride-hailing service PT Go-Jek Indonesia surely will.
In trade finance, using blockchain to retire paperwork older than Shakespeare’s “Merchant of Venice” is a project both Singapore and Hong Kong are working on.
None of this is to say that investment banking is immune. Right now, there’s a rush to hire geeks — so they can make other humans irrelevant. Most banks are struggling to recruit because they “need people who not only have the new technology backgrounds but can also see how these can disrupt financial services processes and models,” says Ian Woodhouse, an associate partner at financial services consultancy Orbium.
So here’s what we think in a nutshell: If you’re trading vanilla fixed-income or cash equities, you’ll only have a job in five years if your dad owns the firm. If you’re a paan-chewing, vaping kind of investment banker (the FT’s delicious description of Rajeev Misra, who built Deutsche Bank AG’s credit derivatives business), you’ll need to impress someone like SoftBank Group Corp.’s Masayoshi Son with your structuring skills. (Robots lack chutzpah.)
If you’re somewhere in between, learn to code. Or at a minium, think tech disruption on a very large scale.
 
BLOOMBERG

Strong second half propels Beermen to 2-0 series lead over Aces

By Michael Angelo S. Murillo
Senior Reporter
THE defending champions San Miguel Beermen moved a win away from returning to the finals of the Philippine Basketball Association Commissioner’s Cup after beating the Alaska Aces, 105-94, on Monday night in Game Two of their best-of-five semifinal series to go up 2-0.
Limited in the first 24 minutes of the contest, the Beermen flipped the switch in the second fold to overtake the Aces and eventually seize the victory.
Alaska started aggressively on both ends of the court to keep control of the opening quarter, 29-18.
Led by rookie Jeron Teng, the Aces continued to play strong to begin the second canto.
They outscored the Beermen, 12-7, to extend their lead to 16 points, 41-25, in the first four minutes.
But San Miguel would hit its strides after, cutting its deficit to just five points, 43-38, with a little over three minutes left in the quarter.
Alaska was able to collect itself for a recoil as the period expired, going on a 9-3 run to reestablish a double-digit cushion, 52-41, by the halftime break.
In the third quarter, it was the Beermen’s turn to go on a fast start, going on a 13-3 blitz with three and a half minutes lapsing to tie the count at 54-all.
The two teams went back and forth after with the score continued to be knotted at 64-all at the four-minute mark of the quarter.
Things eventually settled with San Miguel completing a third-quarter turnaround, holding a 79-74 advantage heading into the final 12 minutes.
Alaska cranked up its pressure defense at the start of the fourth, immediately reaping benefits as it was able to seize back the lead, 80-79, at the 10:34 mark.
The scored stood at 88-85 and the Beermen on top with six minutes remaining on the clock.
Import Renaldo Balkman and Alex Cabagnot combined for six points after for the Beermen in the next three minutes to give their team added leverage, 94-87.
San Miguel held an eight-point lead, 98-90, as the match entered the last two minutes.
Alaska tried to claw its way back from there but could only come within six points, 98-92, after a basket by Vic Manuel.
Back-to-back triples by Arwind Santos and Mr. Cabagnot put the game away for San Miguel.
Mr. Balkman led the way for the Beermen with 31 points and 10 rebounds with June Mar Fajardo adding 21 points and 18 rebounds.
Chris Ross and Mr. Cabagnot, for their part, added 16 and 14 points, respectively.
Diamon Simpson, meanwhile, paced the Aces with 19 points and 15 boards.
Simon Enciso also had 19 while Vic Manuel finished with 15 for Alaska, which continued to play sans Chris Banchero (personal emergency) and Calvin Abueva (team suspension).
“Credit Alaska for making it tough for us in the first half. We’re fortunate to have been able to come back in the second half on the strength of our defense,” said San Miguel coach Leo Austria after their win.
San Miguel tries to go for the jugular in Game Three set for Wednesday.

Lessons from Lolo

By Raju Mandhyan
YEARS AGO, the Philippine Council of Management asked me to make a presentation at their National Management Conference and provide an entrepreneur’s point of view for responding to the challenges of the global economic crisis. They suggested that I focus on the values of resilience, ethics, and strategy for not just surviving but for succeeding through the challenging times. They also suggested that I make my presentation lively and light.
After I agreed to do the presentation, I hit a stonewall.
Planning a strategy, essentially, involved research, intelligence, planning, structure, discipline and a large amount of ruthlessness towards the achievement of personal or organizational goals. Ethics, on the other hand, brought up responses about compassion, honesty, transparency, righteousness, and morality.
These two ideas were like two mountain goats heading in opposite direction on a narrow bridge.
I was stuck!
On the night before the presentation, I went to bed fraught with anxiety and chaos.
Finally, past midnight, a mentor, coach, and a ghost from my past came visiting. This was a man who had lived through the great depression, survived World War II and the partition of India-Pakistan in 1947. This guru from the past had not just lived through these devastating periods of human history but had also succeeded through them with a combination of spunk, sincerity, and suppleness of strategy.
LOLO MAKHIJA
Lolo Makhija, born and raised in Karachi, Sindh, was brought up by a lawyer father. Though he never did go to college he’d acquired the sharpness and the analytical mind of his father. Lolo Makhija had built and nurtured several successful businesses in his lifetime.
By the time he was in his early fifties, he had turned into a very conservative investor whose life had acquired calm and stability which we all strive for. From his position of strength and stability, he was able to support his life and family with grace and dexterity.
The lessons that he had shared with me are the ones that I presented to the members of the 37th National Management Congress. These are lessons that I picked up not in one sitting but over a period of time through my growing years.
I’d like to create a larger context on why his ideas made so much sense and meaning given how the world moves and changes so fast.
Gandhi, once, claimed that man is the center of a circle which has no circumference. The bigger truth is that humans are, really, the center of a sphere with no boundaries in any direction. We are also all that we do, which in turn creates ripples and affects the universe. All these ripples we create over time and space also come right back at us, affecting our lives. This fact of interconnectedness and synchronicity is now being recognized much more than it was a few decades ago.
Now we know, understand and believe that when a butterfly flaps its wings in Batangas, it can create a bagyo [storm] in Bombay. Now we also know that excessive and reckless lending of money by banks in America can generate joblessness and hunger in Asia.
Lolo Makhija, I remember, had an unspoken and a deep understanding of how waste, frivolity, and abuse can seriously exploit nature, humanity and life.
Lolo, even though he was substantially rich for his times, used to have a minimal number of personal clothing. He lived in a small home and would use public transportation on most of his commutes and travel. He also had another habit too which I, as a kid, and many other family members used to tease him about. Lolo used to pick up and gather little nuts, bolts, coins, milk bottle caps, etc., from the street and bring them home. Here are certain things he told me that I haven’t forgotten about. His tips also became values for organizations and, even, global development.
LESSON ONE: INVEST IN LEISURE, LUXURY AND OSTENTATIOUS BEHAVIOR ONLY IF YOU CAN AFFORD IT 10 TIMES AND OVER
Every successful individual and organization that surfs through hard times is the one that has cash reserves handy and in plenty.
Taipan Henry Sy made his best deals and investment in the early 1980s when the country was undergoing political and economic turmoil.
When everyone else was closing shop and moving funds across borders and economies, Henry Sy bought a chunk of land and, at the tail-end of the crisis, built his first “mega-mall” called SM North Edsa. It makes Sun Tzu kind of strategic sense to always be ready with more than enough ammunition to conquer adversities and capture opportunities. Business acumen is the right hand of success and frugality, like that of my Lolo’s, makes up the left hand.
LESSON TWO: FIRST, HAVE, AT LEAST, ONE REVENUE STREAM THAT IS STEADY, SAFE, AND SUSTAINABLE AND ONLY THEN INDULGE IN OTHER INVESTMENTS.
It is always good business strategy to be standing on solid ground. If one is not standing on steady ground how can he aim correctly his actions towards his targets in life? If all our income sources are volatile and chaotic then the welfare of the organization and its stakeholders will remain at high risk. Finding and starting from solid ground again and again, makes every warrior a lethal and strong one. Finding solid ground and working from that angle is a matter of strong discipline and allows us to unleash unlimited power towards all opportunities. Nurturing a discipline of consistently finding stable ground builds strong bridges, in business, between aspirations and accomplishments.
LESSON THREE: STAY DETACHED FROM THE TEMPTATIONS OF SMOOTH AND SHINY OBJECTS THAT GO “CLINK!”
Most of us can become short-sighted and end up making our appearances and financial bottom-lines our glorified obsessions.
If money was the only goal then all those chasing it would be on the right track to success and happiness. On the contrary, the opposite is the truth. Those who chase curiosity, learning, and discovery end up being truly wealthy, successful, and fulfilled. Likewise, business entities that focus on innovation, true growth, and socially responsible constructivism succeed phenomenally. Companies like Ayala group of the Philippines and Tata group of India are shining examples of such a paradigm.
LESSON FOUR: WHEN ENGULFED IN A WHIRLPOOL, STAY CALM AND USE ITS ENERGY RATHER THAN FIGHT IT.
This particular tip from Lolo came at a time in my life when my personal life, my career and my financial status had made a home in the dog house. “The more you fight it the worse it’ll get,” I remember him telling me. “Be less frantic, complain less, bear more, put your head down and work away. Soon time and providence will find you a way out.”
Though I did not act on his advice right away, it became my mantra. Over the years, I have benefited powerfully from living calmly through all crises.
For businesses, patience, positioning, and proper timing become a powerful synergy. Becoming intrinsically and strategically “cool” drives our actions and judgments to become more proactive and powerful.
LESSON FIVE: LOOK AFTER ALL FAMILY, NEAR AND FAR.
From his fifties right until his moving on to the next world, Lolo Makhija, kept supporting and sponsoring the growth, the welfare, and the education of near and distant family. His employees, his associates were always well looked after. Though he led the family quietly and firmly, he never claimed recognition. He was, also, always grooming others to take over and take charge.
In business, it makes profound sense to have leaders who build other leaders and not followers. It makes profound sense to run a smooth, harmonious, happy, efficient, and effective organization.
This amazing sense of family and community is intrinsic to humans regardless of cultural diversity. In the Philippines, I have seen proof of its existence during the People Power Revolution of the 1980s and most recently during the onslaught of typhoon Ondoy.
During these times, ordinary people from the street came together as one and looked after the welfare and relief of the larger family — the country.
My take on Lolo Makhija’s amazing personality is that the man was made out of a very special stock. In a time and age when people were just content with safe, long-term jobs, in a place and country where people struggled for food and simple household needs, he managed to walk taller than them. He had this raging desire to be different, to stand apart and to be always strong and supportive.
What really and truly drives every individual and organization to be different is that same “raging desire” to be different. This deep, burning desire to succeed and stand apart in all our trials and tribulations is the key to success. Thus, for us to always succeed, we need to ignite ourselves in a such a way that people from far and wide should come watch us burn.
 
Raju Mandhyan Author, Coach and Trainer
www.mandhyan.com
A World of Clear, Creative and Conscientious Thinkers!
http://mandhyan.blogspot.com/
http://www.youtube.com/user/RajuMandhyan

Bourse caps four-day rally amid lack of leads

By Arra B. Francia, Reporter
EQUITIES slipped on Monday as the market consolidated amid a lack of catalysts.
The bellwether Philippine Stock Exchange index (PSEI) snapped its four-day winning streak Monday, July 16, dropping 29.74 points or 0.4% to end at 7,369.44, while the broader all-shares index gave up 12.29 points or 0.27% to finish at 4,462.60.
“The market is still consolidating and trying to test the 7,400. It’s range-bound between 7,400 and 7,200. So it has to test and trade within that range first, before it tests new highs,” First Metro Investment Corp. Vice-President Cristina S. Ulang said in an interview on the sidelines of the company’s midyear economic briefing in Makati City. “That’s the behavior of the market, it’s just consolidating.”
For Regina Capital Development Corp. Managing Director Luis A. Limlingan, a “[l]ack of catalysts remained the culprit once again, as some investors were profit taking after the release of China GDP (gross domestic product) and renewed fears of an escalating trade war.”
“Value turnover remained weak as there were not enough leads to push the index past the 7,400 resistance,” Mr. Limlingan said in a mobile message.
The PSEi shrugged off gains seen in Wall Street last week, with the Dow Jones Industrial Average climbing 0.38% or 94.52 points to 25,019.41 last Friday.
Most Asian indices also closed lower on Monday, following the release of China’s latest GDP growth figure which came in at 6.7% — meeting market expectations, but still slower than the preceding quarter’s 6.8%.
Back home, the industrial counter was the lone winner among the sectoral indices, gaining 23 points 0.22% to 10,470.73.
Holding firms led losers, shedding 55.20 points or 0.75% to 7,249.75, followed by property’s 23.81-point or 0.65% drop to 3,589.11; mining and oil’s 60.48-point or 0.62% fall to 9,659.65; services’ 2.72-point or 0.19% decline to 1,429.19; and financials’ 1.91-point or 0.10% dip to 1,823.83.
Some 919.84 million issues worth P4.28 billion switched hands, compared to Friday’s 1.49 billion stocks worth P5.46 billion. Decliners outpaced advancers, 90 to 82, while 55 names were unchanged.
Foreigners remained in selling position for the eighth straight trading day, with net selling accelerating to P279.31 million on Monday from Friday’s P37.78 million.
Half of Monday’s 20 most active stocks ended in negative territory, with Ayala Land, Inc. losing 1.46% to P37.10 each; Megawide Construction Corp. falling 1.75% to P19.04; BDO Unibank, Inc. dipping by 0.78% to P127.90 each, while SM Investments Corp. plunged 1.64% to P901 each.
Shares of Metropolitan Bank & Trust Co. were the most actively traded, gaining 0.43% to P69.80 each, after the company clarified that talks of a P400-million branch fraud, as bared in a gossip piece, were false.

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