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Finance dep’t targets loan agreement on Cebu port with South Korea

By Elijah Joseph C. Tubayan
Reporter
THE DEPARTMENT of Finance (DoF) plans to sign the loan agreement with South Korea on the $172.64-million New Cebu International Container Port Project during President Rodrigo R. Duterte’s first visit to Seoul next week.
The DoF said in a statement yesterday that Finance Secretary Carlos G. Dominguez III met with South Korean Ambassador Han Dong-man on May 11, and hoped that both parties could sign the agreement during the Philippine delegation’s June 3 to 5 visit. DoF also plans to present more projects for funding support.
After securing the loan, the project will go through detailed engineering studies and enter the pre-construction stage.
On May 4, both countries signed the framework agreement on Export-Import Bank of Korea-Economic Development Cooperation Fund (KEXIM-EDCF), which allows the Philippines to draw $1 billion from the loan facility until 2022.
The New Cebu International Container Port Project, which is among the projects lined up for KEXIM funding, was approved by Mr. Duterte in December last year.
Mr. Duterte and South Korean President Moon Jae-in will hold a summit on June 4, to “reinforce their alliance and further improve ties,” according to Seoul.
Mr. Dominguez will present four new government projects for possible Korean official development assistance (ODA) financing.
These include: a project preparation facility of the National Irrigation Administration (NIA); the Asbang Small Reservoir Irrigation Project in Davao del Sur; a new airport in Dumaguete City, Negros Oriental; and the implementation of an electronic receipt and invoice system and electronic sales reporting system.
Mr. Dominguez thanked Mr. Han on South Korea’s assistance in the ongoing Panguil Bay Bridge project, a $100-million enterprise aimed at connecting Misamis Occidental and Lanao del Norte.
“Thank you for all the assistance you have provided us. Panguil Bay Bridge is coming along and you have funded a lot of projects. I want to assure you that we will not waste your taxpayers’ money, we will make sure that it will benefit the Filipino people,” said the Finance chief.
Mr. Han, for his part, said he encourages Korean businesses to invest more in the Philippines, particularly in Mindanao, since there are “more opportunities” there.
“I have asked Korean companies to join many projects in Mindanao,” the diplomat said.
Mr. Han also said he has asked the South Korean government to contribute to the rehabilitation efforts of the besieged city of Marawi.
Among the top South Korean companies with current investments in the Philippines are Samsung, Sunjjn, Kepco, Daewoo International, and Asiana Airlines, according to the DoF.
South Korea is the sixth-largest ODA provider to the Philippines, totaling $570.6 million as of 2017.
It is also among the top sources of foreign tourist arrivals, after some 1.6 million South Koreans visited the Philippines last year.

Group flags below-standard steel bars used for high rises

A GROUP of concerned citizens has called for the recall of locally made steel bars which are claimed to be below standard for high rises, having been quench-tempered instead of being made with micro-alloy.
Former senator Anna Dominique L. Coseteng and structural engineer Emilio M. Morales said that for the past 10 to 12 years, local steel manufacturers have been replacing micro-alloy (MA) steel bars with quenched tempered (QT) or thermo-mechanically treated (TMT) steel bars, which are not fit to be used for high-rise buildings and undergo welding, bending, galvanizing, or threading given their less durable structure.
Ms. Coseteng said the steel bars must be recalled and released with proper markings.
“All steel bars still found in bodegas, warehouses, job sites and factories have to be recalled by steel manufacturers, bring them back to the factories, melt them down….[They must be] duly embossed and identified and put out in the market so people will know what they are,” she said in a press conference on May 31.
Identification of steel grade has also been changed by the Bureau of Product Standards (BPS) under the Department of Trade and Industry (DTI) to color marking instead of embossment. The public has not been made aware of this change, Ms. Coseteng said.
“The steel manufacturers deliberately, consciously, willfully kept in secret the fact that they removed the micro-alloy steel bars in the market and replaced them with quench-tempered bars,” she added.
The group said the bars also passed standards under the BPS because the BPS only tests tensile strength, involving only a subjection to controlled tension. They also cited conflict of interest.
“The people in charge of imposing standards in this industry, there is a conflict of interest…so how can we ensure that there is a proper standard in this industry and that this is being complied [with]?” Rodel Taton, president of the Consumers Union of the Philippines, said.
Mr. Morales said that based on his studies, QT rebars are not fit for high-rise construction particularly in seismic countries.
The QT rebars have brittle outer layer which will pass for Grade 60 steel, but the inner part will only reach Grade 40 after welding.
“The manufacturers cannot show proof…that their products are fit for seismic zone 4, where the Philippines is,” he said.
“They have not refuted, denied, or discredit our claims,” he added.
Mr. Morales said other countries which experience earthquakes, including Taiwan, Japan, and New Zealand, have established their own restrictions regarding QT bars. — Patrizia Paola C. Marcelo

Quality of public service factored in performance-based bonuses

THE DEPARTMENT of Budget and Management (DBM) has included the streamlining of government processes among the targets for the granting of performance-based bonuses (PBB) to government employees.
The DBM has released the guidelines for the grant of PBBs through Memorandum Circular 1-2018 signed by Budget Secretary Benjamin E. Diokno on May 28.
The memorandum said it is responding to President Rodrigo R. Duterte’s directive that government offices should “quickly respond and yield meaningful results in streamlining processes,” to provide “high quality and genuine public service that Filipinos deserve without delay and bureaucratic red tape.”
Hence, the memorandum has included in the eligibility criteria the “streamlining and process improvement of the agency’s critical services,” which was not included in last year’s guidelines.
The new criteria would now consider the least the number of steps, signatures, and documents required to complete a process, least transaction and compliance costs, the least waiting and processing time, as well as client satisfaction.
The measure covers government-to-citizens, government-to-businesses, and government-to-government transactions.
This would be on top of other performance indicators such as the QMS ISO Certification, budget utilization rates, compliance with audit findings, compliance with the quarterly submission of budget and financial accountability reports, submission of the annual procurement plan, early procurement of goods and services, and compliance with the Freedom of Information program, among others.
For state-run firms, indicators would also include the maintenance or upgrading of their Transparency Seals containing key agency information, updating of information with electronic procurement system, as well as maintenance or upgrading of the Citizen Charter containing service standards.
If an agency is eligible for PBB, the incentive shall be equivalent to 65% of employees’ monthly basic salary as of Dec. 31, 2018.
The agencies’ performance shall be validated starting this year, and if eligible, the PBB will be disbursed in 2019.
An official or employee who rendered less than nine months but a minimum of three months of service and with at least a “Satisfactory” rating shall be eligible for the grant of PBB on a pro-rata basis corresponding to the actual length of service rendered.
The memorandum circular covers all government departments, bureaus, offices, Constitutional Commissions, Congress, the Judiciary, the Office of the Ombudsman, state universities and colleges, state-run firms, local water districts, and local government units.
Noncompliance of the indicators will render government agencies and government-owned and -controlled coporations ineligible for the PBB. — Elijah Joseph C. Tubayan

Virac Airport terminal launched today

By Denise A. Valdez
THE rehabilitated passenger terminal of the Virac Airport in Catanduanes is set to be inaugurated today after a delay of two years.
A statement by the Civil Aviation Authority of the Philippines (CAAP) said the P39-million terminal, which was completed on May 14, has a “modernized structure” and will increase its capacity to 300 passengers from the previous 100.
“The ground floor and second floor pre-departure areas have been expanded, and the arrival area in the ground floor has also been rehabilitated,” it said.
The project began construction in January 2016 and was originally scheduled for completion in July that year. But operations stopped in May “after additional retrofitting works were considered necessary to provide stability for the old building originally built in 1963.”
The project was further delayed when Typhoon Nina hit Catanduanes in December, costing an additional P4.5 million to repair the terminal.
Among the officials attending the launching are Transportation Secretary Arthur P. Tugade, CAAP Director General Jim C. Sydiongco, and Transportation Undersecretary Manuel Antonio L. Tamayo.

Divide into two

His attacks on the press are “repulsive,” and “he should be the figure of suspicion, not the press,” when it comes to “fake news.” A president who “constantly deflects and distorts and distracts — who must find someone else to blame — is charting a very dangerous path.”
Although he mentioned Rodrigo Duterte later in his privilege speech last January, the speaker wasn’t a Filipino human rights defender or press freedom advocate. Neither was he referring to Mr. Duterte, but to United States President Donald Trump.
Senator Jeff Flake, a member of Trump’s Republican Party, also said Trump’s description of the news media whose reporting he doesn’t like as “enemies of the people” was “chilling” and that despotism is “the real enemy of the people,” and a free press “a guardian of democracy.”
He wasn’t talking about Mr. Duterte.
But Flake also said that Trump’s use of the term “fake news” as synonymous with news media reports unfavorable to him and his administration has encouraged authoritarian leaders such as Rodrigo Duterte, whose minions often describe news media organizations whose reports aren’t favorable to him and his regime as purveyors of “fake news.”
Trump has even expressed approval of his brutal campaign against the poor that’s disguised as a “war” on drugs, and has even proposed adoption of the same approach to the US drug problem. Like Trump, Mr. Duterte has also been undermining news media credibility not only through claims that journalists are inaccurate and corrupt, but unlike Trump, he has also barred journalists who’re in the regime hate-list from coverage of public events, threatened the cancellation of the franchises of some media organizations, and revoked online news site Rappler’s registration.
The tactical differences and similarities in Trump and Duterte’s shared determination to undermine news media credibility are an interesting study in the workings of the authoritarian mind. But what is more fundamental is whether their antipathy to the press is a significant indicator of the two news media systems’ success in discharging the duty of monitoring and holding government to account. Are Trump’s and Mr. Duterte’s tirades actually seals of approval for the conduct of the news media in both the US and the Philippines?
The US media have been described, among others by Ben Bagdikian, the late dean of the University of California Graduate School of Journalism, as “a privately owned ministry of information” in that they echo and support government acts and policies.
As commercial entities privately owned by corporations with political and economic interests to protect, they can’t risk antagonizing governments. The Philippine media are mostly similarly owned, and it has been argued that for the most part, they too approve of government policies.
The key phrase is “for the most part.”
Only the liberal sector of the US media, not all of them, have been so critical of the Trump administration as to earn his frequent rants in his speeches and tweets. A significant and more influential part of the US press, the extreme right wing of it represented by media mogul Rupert Murdoch’s Fox News, has in fact been loudly and aggressively supportive of Trump administration policies on immigration, gun control, and foreign policy, among others. Trump has been all praises for this part of the US news media, while being virulently critical of the New York Times and the Washington Post.
Both newspapers represent the US “liberal establishment” and the government policies associated with it. Those failed policies contributed to the widening perception that the US is in economic decline. Trump pledged to reverse those policies during the 2016 campaign for the US presidency, and won the votes of the mostly white and male segments of the population that felt that they had suffered the most from the economic downturn, and who were at the same time haunted by the sense that US power and prestige are waning across the globe.
The paradox is that Trump’s ultra-conservative triumph was driven by legitimate demands for change. The right-wing press helped him win the presidency by demonizing his rival, Democratic Party candidate Hillary Clinton, and by depicting him as the US white working class’ long-awaited messiah.
It was during the campaign that Trump first used the term “fake news” to denigrate the reporting of the liberal press — that part of the US media whose reporting he could not abide for being “negative.”
Both the US and Philippine media are politically divisible into two wings.
The division is reflective of the worsening rift within the ruling political and economic elite of both countries.
In the Philippines, the split is between the relatively “enlightened” defenders of the present state of things, and the most regressive part of the ruling clique which, by taking advantage of the legitimate demand for change and even revolution, is in the process of restoring authoritarian rule under the pretense of addressing that demand.
There are other similarities. Like Trump and his communication crew, Mr. Duterte and company choose their media targets. Those targets are the critical and independent practitioners in the news media. They are “critical” in the sense that they’re able and willing to subject the policies, declarations and acts of the regime in power to analysis and evaluation, and “independent” in that they have the capacity to report accurately because they claim to owe allegiance only to the ethical imperative of truth-telling.
In contrast is the Duterte regime and its spokespersons’ silent approval of those sectors of the Philippine press and media which focus only on the “good news” and keep protests, rising prices, human rights violations, extrajudicial killings and other “bad news” out of their pages or news programs. In furtherance of their active and even virulent support for any regime in power, their news and opinion pages cheer every regime act and policy, whether it’s on drugs, China and the West Philippine Sea, martial law in Mindanao, or the “rehabilitation” of the resort island of Boracay. Among the scoundrels involved are reporters, editors, and columnists in some newspapers in English, in the tabloids, in free TV news programs, and in much of AM radio.
It is this wing of the privately owned Philippine press that has largely escaped public scrutiny. It is the media’s most acquiescent and most corrupt component.
Through various regimes including the Marcos dictatorship, it has misinformed and even disinformed the Filipino people through “fake news” and even worse “analysis.” It is this part of the media that bears watching, exposure, and criticism precisely because of the damage it has done and is still doing to the democratic imperative of enabling a free people to understand Philippine society and to change it.
In the late 1960s and early 1970s, these mercenaries made the possibility and actual declaration of martial law acceptable to the middle class, business, and professionals.
And it was they who kept the terrors of dictatorship a secret from much of the populace during the years that followed. The wonder of it is that they and their younger and equally unprincipled ilk are still at it, committing with impunity the same crimes against the making of the informed citizenry needed to combat incompetence, barbarism, corruption, and tyranny.
 
Luis V. Teodoro is on Facebook and Twitter (@luisteodoro). The views expressed in Vantage Point are his own and do not represent the views of the Center for Media Freedom and Responsibility.
www.luisteodoro.com

The sweetness of doing nothing

“Now that ain’t workin’; that’s the way you do it. Lemme tell ya them guys ain’t dumb. Maybe get a blister on your little finger. Maybe get a blister on your thumb. That ain’t workin’ that’s the way you do it. Money for nothin’ and chicks for free.”
Those poignant lines of classic literature were crafted by British artist Mark Knopfler, with assistance by Gordon Sumner (a former English teacher at Newcastle). The lines borrowed the metaphysical musings of the working class at the time regarding a short film by musicians known as Duran Duran.
It’s not as if doing nothing is a bad thing: Steve Martin (not him, the other one — the director of Influence at Work) points out that sometimes “simply offering people the option to ‘do nothing’ can have a surprising influence on how committed they subsequently become to that choice over time.”
As to “nothing” itself, don’t assume it’s a thing of none existence. Nothing “has a topology, it has a shape, it’s a physical object,” according to philosopher Jim Holt. Eastern Philosophy emphasizes nothing (“emptiness”) as the ideal state of mind.
Physicists object: “’Nothing’ is a denial of the existence of a particular entity.”
“‘Nothing’ is just that: nothing. It doesn’t exist. It has no identity. It’s not a vacuum. It’s not dark. It’s not cold. It has no characteristics. As a tool of cognition, it can be useful, but doesn’t exist.” (Clara Moskowitz, LiveScience)
Nevertheless, remember that “nothing” is not the same as “zero.” For mathematicians, nothing signifies the total absence of something. Zero is not nothing. It is a thing. More than just being a symbol, it is a number. Zero is a non-negative integer, followed by the natural number “one” and with no natural number preceding it.
Anyway, nothing is apparently that frowned upon in the Western world as much as nothing.
Samuel Johnson: “It is certain that any wild wish or vain imagination never takes such firm possession of the mind, as when it is found empty and unoccupied.”
Backed up by Michel de Montaigne, “The mind that has no fixed aim loses itself.”
The problem with Montaigne is that he also confusingly admits that doing nothing leads to something. Withdrawing to the country for idle contemplation leads him to the compulsion for work:
“As we see some grounds that have long lain idle and untilled, when grown rich and fertile by rest, to abound with and spend their virtue in the product of innumerable sorts of weeds and wild herbs that are unprofitable, and that to make them perform their true office, we are to cultivate and prepare them for such seeds as are proper for our service.”
At least one saint looks down on doing nothing. Josemaria Escriva sees idleness as “something inconceivable in a man who has the soul of an apostle.” Rest if one must but rest “is not to do nothing: it is to relax in activities which demand less effort.”
But, like Montaigne, Escriva felt the need to balance over action (“activism,” as he calls it) with stillness: reminding everyone of the importance of “prayer, self denial and those means without which it is impossible to achieve a solid piety: receiving the Sacraments frequently, meditation, examination of conscience, spiritual reading.”
Which actually sounds like carving out time from work, which to some is really the definition of doing nothing.
So doing nothing, taken reasonably, should be a good thing.
“The mass of men lead lives of quiet desperation.” So says Thoreau.
And his remedy is to do nothing, “I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived.”
Which bring us to Bond, James Bond.
Action heroes are aplenty (there’s Jack Reacher and John Wick) but nobody beats Bond when it comes to musing.
Bored by the long hours cross European driving in pursuit of Goldfinger, his DBiii was suddenly overtaken by a beautiful girl in a Triumph — “Bond thought: That would happen today! The Loire is dressed for just that — chasing that girl until you run her to ground at lunch-time, the contact at the empty restaurant by the river, out in the garden under the vine trellis …”
“Bond smiled at his story and at the dots that ended it.”
Anyway, Shakespeare has Henry V shout: “Once more unto the breach, dear friends, once more”. Which is what every working person can mutter to himself every Monday morning.
Still: “All things are ready, if our mind be so.”
Which is really all fine and well. I myself couldn’t stand long periods of doing nothing.
Still, at the back of my head, this constant thought:
“I shoulda learned to play the guitar.
I shoulda learned to play them drums.”
 
Jemy Gatdula is a Senior Fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.
jemygatdula@yahoo.com
www.jemygatdula.blogspot.com
facebook.com/jemy.gatdula
Twitter @jemygatdula

Cure for status anxiety

Alexis de Tocqueville, a 19th Century French writer, diagnosed the unhealthy fixation on rank “…as a strange melancholy often haunting inhabitants of democracies in the midst of abundance.”
The concern with social position is “a soul-crushing disease that afflicts much of Western civilization,” wrote British author Alain de Botton. In his book, Status Anxiety, he explained the particular disorder that focuses on an obsession with rank. It is prevalent in some peoples’ lives for extended periods of time.
The affliction is treatable over time and with great effort.
The first step is acceptance. The individual should accept and “forgive himself”
For having the elite club membership, the weekend house in the country.
In the local scene, being in the elite circle is achieved through family pedigree, inherited wealth business savvy, good fortune, political success. Being at the top tier has an unwritten code of behavior. It is a no-no to act like an ostentatious parvenu.
Conspicuous consumption and excessive social exposure is considered poor taste especially when the country is in a recession or when times are uncertain.
For example, the nouveau riche like to name-drop, social climb, and brag about material possessions, to make constant allusions to the Ivy League degree, and having the children in the same ultra exclusive university.
It is considered déclassé to flash over-sized marble-like solitaires, glittering jewelry and designer clothes with visible labels or tags, flamboyant attire and behavior.
One should not be loud in behavior and manner of speaking. One should not brag about the number of sports cars, the size and price of chandeliers, or the number of rooms in the family’s new (one generation old) “ancestral mansion.”
In today’s modern, cyber savvy society, almost anything goes!
The old rich whisper and never shout. They are very low-key, proper — with impeccable behavior, gracious manners, speech and attire.
People get stuck in a “congenital uncertainty” with regard to their value. The display of unrefined, crude behavior — overweening ambition, shallow snobbery, name dropping, and calculating the net worth of others based only on appearances — is the result of insecurity. The underlying factor is the desperate bid for recognition and esteem.
The perks and comforts of rank are enjoyable.
Mr. De Botton qualified the false notion about position in terms of actual value.
“Occupying an enviable social rung is by no means a barometer of true worth.”
In Western history, the poor enjoyed a moral status as elevated by their low social rank. (This was based on a selective survey, the pervasive influence of Christianity and Marxism.) The affluent pursued their pleasures under the stigmas of corruption and sin.
The rise of capitalist meritocracy in the 20th century changed the delicate arrangement. Money became the social signifier of character. Being rich was not only better. It created the impression that rich people are more highly regarded. In materialistic societies, this is true.
Being poor was unfortunate. It was considered regrettable, and a “deserved” state.
The material world overtook and overwhelmed the spiritual world. The result is a pervading anxiety about rank and status. It has become an obsession for some people. One-upmanship and keeping up with the richer neighbors and friends are the symptoms of the malaise.
There are several remedies.
(It may seem esoteric for the status-obsessed and the terminally stricken OTTs — over the top — in the social scene.)
Read books that are perceptive and mind-expanding to appreciate values and ideas.
History and anthropology are insightful. Ancient ruins provide clues to civilizations and how people loved. Gazing at temples, rocks and pre-historic fossils are curative and therapeutic.
Study art history and paintings. It would challenge society’s understanding of what matters.
The individual would broaden his perspective and learn from the past.
Laugh at the humorous, witty, and satirical cartoons in a magazine such as the New Yorker. They poke fun at the high status and foibles of others.
The positive role models one can emulate are the following:

• The ancient Greek cynics who did not give a damn about other people’s opinions.

• The 19th century European bohemians (artist, writers, philosophers) who knew that money was not everything. They enjoyed life and living despite the tight budgets and harsh conditions.

• Jesus Christ. He taught us the fundamental value that we are all created equal.

Religion or spirituality is the most effective antidote for rank anxiety. A proper sense of humility would heal the affliction of vanity and superficiality. (Unfortunately, being religious does not guarantee instant healing of the corrosive effects of being spoiled, egotistical and self-important. The Pharisee-like behavior of self-righteous hypocrites is probably incurable.)
In the local setting, some people are beyond comprehension.
They are tolerated because of their stature and status — wealth, fame, or power. There are fleeting and temporal. The minor vices such as compulsive climbing or ostentatious behavior can be tempered with a dose of introspection, quiet, self-imposed hibernation, and reflection. And a lot of discipline.
The Christian emphasis on morality is an equalizer.
No matter how powerful or important others may be or believe themselves to be.
One thing is certain.
“We can take comfort in the thought that a lot of us will ultimately end up as the most democratic of substances: dust.”
 
Maria Victoria Rufino is an artist, writer and businesswoman. She is president and executive producer of Maverick Productions.
mavrufino@gmail.com

Absolute power disrupts absolutely in Silicon Valley

By Shira Ovide
NO ONE has learned any lessons.
That’s the discouraging takeaway from a Wall Street Journal article on Tuesday about the nearly unchecked power held by founders of many young technology companies. The people bankrolling those companies are responsible for providing oversight, too, but don’t seem to be doing much of it.
The Journal reported that two-thirds of US start-ups with venture-capital investors that went public last year had special stock giving insiders more votes than other shareholders and therefore disproportionate power over the company’s direction. These terms aren’t unusual in the technology and media industries. Google parent Alphabet, Inc., Facebook, Inc. and the New York Times Co. have dual-class shares that in theory allow executives to pursue important initiatives without inference from investors pushing for a quick buck.
That sounds sensible, but dual-class shares and other “founder-friendly” investment terms have done too much damage in Silicon Valley and beyond. There was, of course, the boardroom brawl at Uber Technologies, Inc. over ending the voting control of cofounder and CEO Travis Kalanick. Theranos founder Elizabeth Holmes had near absolute authority over a start-up that proved to be far less than she claimed. I wonder how public market investors feel now about Snapchat stock that leaves them without any power at all to overrule young leaders that have proved to be inept.
And yet many founders still have near absolute authority over their young companies. A particularly disheartening example in the Journal article was the real estate start-up WeWork Cos., whose cofounder and CEO is one of only two members of the board’s compensation committee. In short, it’s possible the WeWork CEO is helping determine compensation for himself and other members of his executive team.
It’s ironic that the other member of WeWork’s compensation committee is from Benchmark, the venture-capital firm that led efforts to eliminate Kalanick’s voting power over Uber after he proved to be a toxic presence who shrugged off oversight from his investors and others.
The prevalence of start-up executives with near-absolute power is the result of economic logic. Now more than ever, there’s a huge supply of capital for the most promising young tech companies, and those investors are often chasing a small start-up elite. The imbalance enables executives of superstar start-ups to demand whatever terms they want from investors, and they often want the ability to make decisions without interference.
The problem is there have been so many examples of young companies stumbling — with disastrous effects — when founders are left to run wild. In addition to Uber, there were several scandals involving improper workplace behavior at start-ups including Social Finance, Inc. and Zenefits, Inc. that made me wonder whether backers of young tech companies feel they can’t ask too many tough questions about employment conditions or dodgy financials for fear of being shut out of potentially lucrative investments.
Lax oversight and overpowered founders from the earliest days of a company can enable corporate rot that takes years to root out. Tesla CEO Elon Musk sure looks like he could use more oversight from his own board. Turmoil at Viacom and CBS is a cautionary tale about the ill effects of perpetual insider control.
It’s hard to imagine that tech start-up financiers are going to push back against founders who demand absolute authority. Start-up economics simply have swung too much in founders’ favor. But there is one cudgel that public and private investors can employ to mitigate the danger of over-entitled founders: sunset provisions on superpower stock.
This idea is a favorite of corporate governance advocates including Lucian Bebchuk of Harvard Law School, and a member of the Securities and Exchange Commission recently advocated for dual-class shares to expire after a period of time. The theory is that the executives of young companies can have more authority over a company when it’s still young, but built-in defenses should fall away as it matures and strengthens.
Yelp, Inc. ended its special class of stock in 2016, more than four years after its IPO, thanks to a built-in kill switch that flipped when special shares held by the CEO and other insiders fell below 10 percent of all Yelp stock. The company also had provisions that would have ended the supervoting shares seven years after its IPO. This multitrigger sunset clause should be a model for every young tech company.
There has already been some backlash in capital markets against perpetual founder power. The overseer of the S&P 500 Index said recently that it wouldn’t permit companies with dual-class shares to join. That’s a good idea. Boards of private tech start-ups should also show the tiniest glimmer of backbone by forcing their young charges to adopt a sunset provision for supersized voting shares. It’s not a panacea to prevent start-up disasters, but it’s a good start.
 
BLOOMBERG

Peso rises further as tensions abroad ease

THE PESO continued to strengthen against the dollar on Thursday as political tensions abroad eased.
The local unit ended the session at P52.52 versus the greenback, eight centavos stronger than the P52.60-per-dollar finish on Wednesday.
The peso strengthened immediately, opening the session at P52.53.
It rose to a P52.48-per-dollar high intraday, while its worst showing for the day stood at P52.635.
Dollars traded climbed to $886.88 million from Wednesday’s $686.1 million.
A trader interviewed on Thursday said the peso appreciated as it continued its climb seen the previous day.
“It traded within the range, although it moved [higher] due to the continuation of the reversal [on Wednesday],” the trader said in a phone interview, adding that the local unit moved sideways amid the bigger trading volume.
Meanwhile, another trader attributed the rise of the peso versus the dollar to positive developments in political situations overseas.
“The local currency strengthened today after geopolitical uncertainties in Italy temporarily eased [and] positive developments on a possible US-North Korean talks,” the trader said in an e-mail on Thursday.
Global stocks as well as the euro bounced back after political tensions in Italy eased.
Two anti-establishment parties in Rome renewed efforts to form a coalition government rather than force the country to hold another round of elections this year, Reuters reported.
On the other hand, the United States and North Korea entered the second day of meetings in New York to settle their disagreements on nuclear weapons and iron out the June 12 summit between their two leaders.
The second trader added that “weaker US economic data” on Wednesday night helped the local currency to strengthen.
The US economy grew at a slightly slower pace in the first quarter at 2.2%, revised from the 2.3% announced previously. Likewise, consumer spending also saw a downward revision at a 1% growth versus the 1.1% previously.
For Friday, the first trader sees the peso moving between P52.45 and P52.65 against the dollar, while the other gave a slightly lower range of P52.40-P52.60.
“The peso might erase its gains ahead of likely upbeat non-farm payrolls data and firm unemployment figures from the US,” the second trader noted. — Karl Angelo N. Vidal

Stocks snap losing streak on MSCI, easing tensions

THE MAIN INDEX snapped its three-day losing streak on Thursday, ending the month of May on a positive note, as investors focused on the MSCI rebalancing and easing geopolitical concerns.
The 30-company Philippine Stock Exchange index (PSEi) firmed up 0.36% or 27.03 points to close at 7,497.17, although failing to bounce back to its previous support level of 7,500. The broader all-shares index also went up 0.37% or 16.98 points to 4,588.29.
“The PSEi ended the day with a P17.2-billion value turnover on the back of the MSCI rebalancing. A bulk of the trades actually happened at the close as value turnover was only around P5 billion at the 3PM mark,” Papa Securities Corp. Trader Gabriel F. Perez said in an e-mail.
First Grade Finance, Inc. President and Managing Director Astrolito Romulo C. del Castillo said the index followed the performance of international markets.
“The market was up given there was a bump in global markets. The uncertainty in Italy somehow dissipated but investors are still apprehensive,” Mr. Del Castillo said in a phone interview.
Italy — the third-largest economy in the European bloc — is currently headed toward a new elections, which investors worry could affect the European Union. Analysts are saying the worst case scenario would see Italy leaving the EU.
Mr. Del Castillo said investors are still apprehensive about Italy’s political commotion, the United States’ trade war with China and higher oil prices in the world market, which resulted in only a minimal increase Thursday, May 31.
Markets overseas rallied, with the Dow Jones Industrial Average jumping 1.26% or 306.33 points to 24,667.78. The S&P 500 index gained 1.27% or 34.15 points to 2,724.01, while the Nasdaq Composite index rose 0.89% or 65.86 points to 7,462.45.
Most Asian indices also ended in the green, mirroring the performance of its international counterparts.
Locally, the industrials sub-index was the lone sector that recorded losses, dropping 0.51% or 56.13 points to 10,757.91.
The mining and oil sector jumped 2.83% or 276.59 points to 10,021.60, followed by financials which gained 0.88% or 16.28 points to 1,866.66. Services rose 0.83% or 12.21 points to 1,481.31, while property picked up 0.60% or 22.55 points to 3,755.30. Holding firms added 0.18% or 13.52 points to 7,329.53.
Some 820.14 million issues switched hands, resulting in a value turnover of P17.24 billion, more than double the P7.36 billion seen in the previous session.
Index heavyweight SM Prime Holdings, Inc. was the most actively traded issue of the day, although its price ended flat at P37 each. Ayala Land, Inc. shed 1% to P39.80 each, while Aboitiz Equity Ventures, Inc. slipped 2.78% to P57.80 each.
Advancers narrowly beat decliners, 102 to 101, while 41 issues were unchanged.
Net foreign outflows narrowed to P194.43 million from the P1.22 billion in net sales seen on Wednesday. — Arra B. Francia

Barangay Ginebra Kings welcome Brownlee back

By Michael Angelo S. Murillo
Senior Reporter
LOOKING to give their Philippine Basketball Association (PBA) Commissioner’s Cup campaign renewed boost, the Barangay Ginebra San Miguel Kings welcome back today old reliable import Justin Brownlee when they make their tournament return.
Led the Kings to consecutive Governors’ Cup titles in the last two years, Mr. Brownlee is being counted on to infuse the spark needed by Barangay Ginebra (1-3), something that original import Charles Garcia was not able to do.
Mr. Brownlee is coming off a successful stint in the ASEAN Basketball League where he helped Alab Pilipinas to the title along with now-San Miguel Beermen import Renaldo Balkman.
Marking his return, Mr. Brownlee will lead the Kings against familiar foes Meralco Bolts (3-2) in the 7 p.m. main game at the Mall of Asia Arena in Pasay City.
The Bolts were the conquered of Mr. Brownlee and the Kings in each of the last two Governors’ Cup finals.
“Justin’s return is timely and we hope he can help us start winning consistently,” said Barangay Ginebra big man Greg Slaughter, who finished with 14 points, six rebounds and two blocks in their last game, a 103-98 loss to the Phoenix Petroleum Fuel Masters on May 20.
In what turned out to be his last game with the Kings, erstwhile import Garcia had a double-double of 19 points and 18 rebounds before fouling out against Phoenix.
Looking to spoil Mr. Brownlee’s return are the Bolts, who are angling as well to get back on the winning track after bowing down in their last game.
Meralco lost to the Magnolia Hotshots Pambansang Manok, 91-89, on May 18 which effectively ended their winning run to two.
Import Arinze Onuaku had another all-around game of 23 points, 11 rebounds and seven assists but it proved not enough to tow his team over Magnolia.
In the first game at 4:30 p.m., the TNT KaTropa (4-1) take on the Columbian Dyip (3-3).
ON THE SIDELINES
Meanwhile, expecting to miss considerable time on the court after being slapped with an 18-month suspension by FIBA after failing a doping test, rookie Kiefer Ravena said he would just have to throw his support for his NLEX Road Warriors team on the sidelines for now.
“I’m so happy that I was able to watch the team play and I miss being out there with them especially in games like this one. I miss playing with the team but I’m happy that the team is supporting me. I’m still part of the family. I’m still part of the NLEX Road Warriors. I may not be out there but I will be there every step of the way just they are with me every step of the way,” said Mr. Ravena following NLEX’s 93-89 win over the Blackwater Elite on Wednesday.
Under the decision released by FIBA on May 22, Mr. Ravena, who also plays for the national team, is barred from competing in FIBA-sanctioned tournaments from Feb. 25, 2018 to Aug. 24, 2019 after failing a random drug test.
According to details of the ruling, Mr. Ravena tested positive for three ingredients prohibited by the World Anti-Doping Agency (WADA), namely, 4-methylhexan-2-amine (methylhexaneamine), 1,3-dimethylbutylamine (DMBA), and higenamine, from urine samples taken from him after the Gilas game against Japan at the Mall of Asia Arena on Feb. 25 during the second window for the qualifiers in the 2019 FIBA World Cup.
Mr. Ravena said the substances were found in the pre-warm-up supplement he took.
The Samahang Basketbol ng Pilipinas was quick to say though that the said substances are not illegal in the country and can be bought over the counter but are prohibited under the WADA list.

NBA Finals: Game 1 today

OAKLAND — Defending champion Golden State Warriors and the Cleveland Cavaliers take their epic rivalry to historic levels with a fourth consecutive NBA Finals showdown — a challenge that both say never gets old.
It’s the first time in major American sports history that the same clubs have played for a crown four years in a row.
The Warriors seek their third title in four years to cement their dynasty as the best-of-seven championship series starts Thursday.
The Cavaliers, boasting superstar LeBron James in his eighth consecutive finals, try to level their rivalry with Golden State at 2-2.
James has no patience for those that say the matchup has grown stale.
“Teams have had their opportunities to beat the Cavs over the last four years, and teams have had the opportunities to beat the Warriors over the last four years,” James said. “If you want to see somebody else then you got to beat them.”
It nearly happened as for the first time in 39 years both the Eastern and Western Conference finals went to seven games before the Cavs downed Boston and the Warriors ousted Houston.
Television ratings were up 40% from last year, when the Warriors went on a 16-1 playoff run to the crown.
The conference finals game sevens produced the second-most NBA game viewers in US cable television and ESPN history.
If those viewers were hoping to see a new set of finalists emerge, that’s just too bad, said Warriors guard Klay Thompson.
“I think the rest of the NBA has got to get better,” Thompson said. “We’re happy to be a part of history. It’s pretty cool.”
‘GOOD, HEALTHY RIVALRY’
Just as the Los Angeles Lakers and Boston Celtics dominated the 1980s, the Warriors and Cavs have built a strong rivalry in which each has lifted a trophy.
“We respect each other as professionals but there’s obviously some dislike because we’ve been facing it for four years and they beat us, we beat them,” Thompson said. “So there’s some natural competitiveness that brews between the fan bases and teams that makes for fun, energetic nights in this arena. So it’s a good healthy rivalry.”
Warriors star forward Kevin Durant, who won his first title last year after the Cavs dethroned Golden State in 2016, says fans should enjoy the rivalry while they can.
“It may not be as suspenseful as a lot of people want it to be or as drama filled, but that’s what you’ve got movies and music for,” Durant said.
“If you enjoy basketball, I don’t feel like you should have any complaints because it’s a great set of players on both teams.”
Some would argue that, saying the Cavaliers rely too much on James.
Late night comedy show Saturday Night Live shared an Internet video called “The Other Cavaliers” with a Roomba robotic cleaning device at point guard, a dog at center and teammates giving James back rubs, high fives and providing anything else he needs “as long as what he needs isn’t basketball.”
“I run the pick and roll,” actor Mikey Day says in the video. “That’s when I pick up LeBron’s laundry and roll it over to his house.”
PUNCH TO THE PUNCH LINES
The real Cavaliers reserves hope to add some punch to the punch lines.
“He’s definitely a big part of our team. But if you watch the games, we have guys that have big moments,” said Cavs forward Tristan Thompson. “LeBron definitely has done a great job for us, but he’s not alone. He has help.”
But James is a force to be reckoned with, Cavaliers guard Kyle Korver said.
“I think the other team always knows that… if you’re going to win the game you have to go through him,” Korver said.
That means the latest installment of the Cavs-Warriors rivalry will add to someone’s legendary legacy.
“Golden State is one of the best teams I’ve ever played. It’s one of the best teams that’s ever been assembled,” James said. “I don’t know where they will fall in my book, but they will have a nice chapter.” — AFP

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