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Tumbaga memories

I’d like to introduce BW readers to Mr. Eliseo Tumbaga. He has been a journalist and then later an entrepreneur, corporate executive and business consultant for the past 43 years.

As regards, chess he is a FIDE-licensed trainer with rank of National Instructor and secretary of the Professional Chess Trainers Association of the Philippines. Eli is also the founder and admin of the Facebook group Chess News & Views, which I urge all our readers to join.

It was in his Facebook page that I learned several months ago that chess legend GM William Lombardy was facing imminent eviction from his New York City home of the past 30 years due to rent in arrears.

William Lombardy was one of the best players in the USA during the ’50s and ’60s. He won the 1957 World Junior Championship with a perfect 11-0 score (one of his victims was Rudy Tan Cardoso), a record that stands to this day.

In 1967, he was ordained a Roman Catholic priest but left the priesthood in the ’80s to get married and have a son. His main claim to fame was for being the coach and second of Bobby Fischer from the time Bobby was 11 years old all the way up to the 1972 World Championship match with Boris Spassky. It is said that Lombardy was a key figure in keeping Fischer in Reykjavik despite several threats to withdraw and to finish the match victoriously.

Mr. Tumbaga reported that Lombardy’s problem with the rent was solved when a generous family in the Chicago area offered to let him move in with them. Eli then shared some of his memories of William Lombardy when he came to Manila to participate in the 1973 Manila International, the very first attempt of the Philippines to organize a big international tournament. In the 1960s, Meralco organized tournaments with guest grandmasters, even bringing in Bobby Fischer once, but in the 1970s, Mr. Florencio Campomanes started organizing big international tournaments in the Philippines, and even made the impossible dream come true of having a chess Olympiad brought to Manila shores in 1992.

That was still many years away. With the chess popularity after the 1972 match of the century between Bobby Fischer and Boris Spassky “Campo” invited world championship candidate Bent Larsen, top players from world powers Yugoslavia, USA and Argentina and some more other European players to come to the Philippines and play in the inaugural Manila International Chess tournament. The players were to be wined and dined and treated like kings, even brought to Malacanang Palace where President Ferdinand Marcos feted them.

Eli Tumbaga’s memories:

“I had the pleasure of meeting GM Lombardy in 1973 when I was just starting out as a 19-year-old sportswriter with The Times Journal, one of the three leading English-language newspapers in the Philippines.

“Early one morning, before 7 o’clock, I went to the Manila International Airport to meet GM Lombardy and GM Lubomir Kavalek. They were arriving from San Francisco to take part in the Manila International Chess Championship and I was assigned by my editor to interview them.

“When I arrived at the airport, Mr. Florencio Campomanes was already there waiting for the two GMs. As you know, he always wanted to be in control of any situation and I think he was annoyed that I was going to interview them. Mrs. Irina Kavalek arrived with them, by the way, and the Times Journal photographer was also there. Campo couldn’t say directly that interviews were banned but his glare said it all. He couldn’t box me out totally because there were three visitors and I was able to interview them in round-robin fashion as they were walking towards Immigration desk and then to the exit.

“In the evening, the two American GMs conducted a simultaneous exhibition and my boss managed to get a seat for me. I was assigned to Kavalek, who had acted as Fischer’s second in the second half of the match with Spassky after Fischer had a disagreement with Lombardy.

The simuls were held at the penthouse of the Manila Bank building on Ayala Avenue which is now the head office of China Bank Savings. Manila Bank was owned by the Puyat family and Lito Puyat, president of the Basketball Association of the Philippines at the time, invited them to watch a basketball game at the Rizal Memorial Coliseum after the conclusion of their joint exhibition.

“As it turned out, I was the last man standing among the chess amateurs who showed up that evening. No one anticipated that I would put up stiff resistance against GM Kavalek. Because our game was taking too long, the visitors were in danger of missing the basketball game altogether. At one point, GM Lombardy said to GM Kavalek in a loud stage whisper: ‘Give him a draw so we can watch the ballgame!’

“GM Kavalek ignored the plea. I played the Najdorf Variation of the Sicilian Defense against him, not knowing that he was one of the foremost experts in the world on that opening, and I was holding my own deep into the middlegame.

Perhaps GM Kavalek considered it a matter of honor not to concede a draw in his area of expertise to an unknown amateur, who only a few months before had played in the national junior championship — his first tournament.

I lost the match eventually but I wasn’t unhappy about it. I learned later that the visiting grandmasters arrived at the basketball venue with just minutes remaining in the game.

“In the evening, I was worried that Campo might still be mad at me. But he kept a poker face and then turned on the charm when the simuls were about to begin. When I was the only one left playing, I saw him with a wide grin beside GM Lombardy. They stood behind GM Kavalek, looking at the position on the board with much interest. I think he was telling GM Lombardy that I was one of the products of his junior tournaments in the Philippines. By the time my match with GM Kavalek was finished, I think I had been forgiven for my transgression in the morning.

“A few days later, my editor, Gus Villanueva, told me that Campo called and had some nice words about my play.

“It was certainly one of my most memorable experiences as a chess player who had never before played a GM. The Philippines — and the whole of Asia — did not have a GM yet at the time. Eugene Torre got his GM title the following year, after the World Chess Olympiad in Nice, France. Sadly, I lost the scoresheet as I kept moving from place to place.

“I certainly hope that our chess-playing friends in Chicagoland, particularly IM Angelo Young and Florentino Inumerable, will find the time to welcome GM Lombardy to his new place of residence.

Manila 1973

Final Standings

1. GM Bent Larsen DEN 2620, 12.5/15

2. GM Ljubomir Ljubojevic YUG 2565, 11.5/15

3. GM Lubomir Kavalek USA 2565, 11.0/15

4. GM Svetozar Gligoric YUG 2595, 9.5/15

5-6. GM William Lombardy USA 2520, GM Florin Gheorghiu ROM 2550, 9.0/15

7-8. IM Stefano Tatai ITA 2430, GM Borislav Ivkov YUG 2520, 8.5/15

9-10. GM Miguel Najdorf ARG 2525, GM Miguel Angel Quinteros ARG 2520, 8.0/15

11-12. IM Eugenio Torre PHI 2430, IM Rodolfo Tan Cardoso PHI 2375, 6.5/15

13. IM Renato Naranja PHI 2420, 4.5/15

14. NM Edgar de Castro PHI 2285, 4.0/15

15-16. IM Max Arie Wotulo INA 2330, IM Haji Ardiansyah INA 2350, 1.5/15

Manila 1973 was among the strongest international tournaments in 1973. GM William Lombardy finished fifth and won the $1,000 “Brilliancy Prize” for the following game (also in the Najdorf Variation).

* * *
Lombardy, William James (2520) — Quinteros, Miguel Angel (2520) [B99]
Manila (13), 03.11.1973

1.e4 c5 2.Nf3 d6 3.d4 cxd4 4.Nxd4 Nf6 5.Nc3 a6 6.Bg5 e6 7.f4 Be7 8.Qf3 h6 9.Bh4 Qc7 10.0 — 0 — 0 Nbd7 11.Be2

The bishop goes to e2 to support the g2 — g4 pawn push. If he pushes the pawn now Black has 11.g4? g5! 12.fxg5 Ne5 13.Qg3 Nfxg4 14.gxh6 Bxh4 15.Qxh4 Qe7 the second player is doing very well.

11…Rb8

Removing the rook from the long diagonal in anticipation of the e4-e5 pawn push by White.

12.Qg3

Attacking g7 and also threatening Nxe6

12…Rg8 13.Rhf1!

GM Lombardy had been writing a book on the 1973 USA Championship and had studied intensively this move, which John Grefe used with deadly effect against Walter Browne in the 1973 USA Championship.

13…b5

The Grefe game continued 13…g5 14.fxg5 Ne5 15.Nf3! b5 16.Nxe5 b4 17.Nxf7! bxc3 18.gxf6! Rxg3 19.fxe7 Rg5 20.Bxg5 hxg5 21.Nxd6+ 1 — 0 Grefe,J (2200)-Browne,W (2530) El Paso 1973.

14.Nxe6!?

Lombardy took an hour before deciding on the text move. Actually, recent analysis has shown that a better way to continue is 14.Bxf6! Bxf6 (14…Nxf6 15.e5 dxe5 16.fxe5 Nd7 17.Nd5! exd5 18.Bh5 Bg5+ 19.Kb1 Rf8 20.Rxf7! too much!) 15.f5 Bxd4 (15…Nc5 16.fxe6 Bg5+ 17.Kb1 Bxe6 18.Nxe6 Nxe6 19.Nd5 Qc5 20.h4 Be7 21.Bg4 White just has too many threats and he has not even sacrificed anything) 16.fxe6 fxe6 17.Bh5+ Kd8 18.Rxd4 b4 19.Ne2 Rb5 20.Qg6 Qc5 21.Qxe6 Nf6 22.Qb3 Qxh5 23.Rxf6 White has a decisive advantage.

14…fxe6 15.Qg6+ Kd8

[15…Kf8 16.e5 dxe5 17.f5 (threat is Bh5) 17…e4 18.Bxf6 gxf6 (18…Nxf6 19.Bh5) 19.Qxh6+ Rg7 20.fxe6 followed by Nd5]

16.e5 dxe5 <D>

POSITION AFTER 16…DXE5

17.f5!?

During the time of this game Lombardy’s 17.f5 was hailed as a brilliant solution, but in the light of the Black defense pointed out later it appears that 17.Qf7 is more correct. 17…Re8 18.Qxg7 Nd5 19.Bh5 Bxh4 20.Bxe8 N7b6 21.Qxh6 Qe7 22.Ne4! Kxe8 23.fxe5 Kd8 24.g3 White’s material advantage will win the game for him.

17…exf5 18.Bxf6 Bxf6 19.Nd5 Qc6! 20.Rxf5 Rf8 21.Bg4 Rb6?

The losing move. Black can still miraculously hold the position with 21…Qe6! after best play 22.Rf3 (22.Rxf6? Rxf6! tables are turned and it is now Black who is winning) 22…Qe8 23.Qe4 Bg5+ 24.Kb1 Rxf3 25.Qxf3 Qf8 it looks like the worst is over for Black.

22.Rxf6! gxf6

22…Rxf6? 23.Qxg7 Re6 24.Qf7 there doesn’t seem to be anything Black can do. If 24…Qd6 then 25.Nxb6 Qxb6 26.Bxe6 Qc6 27.Qf8+ Kc7 28.Qe7 e4 29.Bf5 a5 30.Bxe4 Qb6 31.Bf5.

23.Qg7 Rb7

[23…Re8 24.Nxb6 Re7 25.Qg8+ Re8 26.Bxd7!]

24.Qe7# 1 — 0

A nice finish.

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

bobby@cpamd.net

Mbala, Oraeme get mythical team nod from media

BEN MBALA of De La Salle University and Allwell Oraeme of Mapua Institute of Technology, most valuable players in the biggest collegiate leagues in the country, banner the Collegiate Mythical Five selection that will be awarded by the UAAP-NCAA Press Corps later this month.

In an announcement made early this week, Mbala and Oraeme, MVPs in the University Athletic Association of the Philippines (UAAP) and National Collegiate Athletic Association (NCAA), respectively, head the five-man cast and to be joined by Jeron Teng of La Salle, Jio Jalalon of Arellano University and Javee Mocon of San Beda College.

Being named to the mythical five, said players are eligible to be named player of the year in the annual awards ceremony organized by the people covering the two marquee leagues.

Played for the first time with the Archers in Season 79 after completing his residency, Mbala was a runaway winner for the UAAP MVP award with averages of 20.7 points, 16 rebounds, 1.3 steals and 2.5 blocks while helping his team to a near-perfect slate in the elimination round with a 13-1 record.

His presence proved to be a huge difference maker for the Taft-based team, which made its way back to the UAAP summit with the Season 79 crown after missing the final four altogether the previous year.

Oraeme, meanwhile, proved why he is the best big man in the country’s longest-standing collegiate league, winning his second consecutive MVP award in NCAA Season 92.

The title would not go his and the Cardinals’ way but he was instrumental in Mapua making it back to the semifinal round for a second consecutive time with averages of 16 points, 20 rebounds and 2.4 blocks a game.

Teng, for his part, took a back step for teammate Mbala for much of the UAAP season but when it came to winning time the King Archer showed the way, leading his team to the title over archrivals Ateneo Blue Eagles with norms of 19 points, 3.5 rebounds and 2.5 assists in the finals en route to being named best player of the championship series.

Jalalon, now in the pros with the Star Hotshots, made huge waves in his final year in the NCAA, posting stellar numbers of 21.1 points, six boards, 7.4 assists and 2.3 steals in steering his Arellano team to a runner-up finish.

While his numbers were not as staggering as the other mythical five members, Mocon (11.3 ppg, 8.4 rpg, 3 apg and 1 spg) was a steadying factor in San Beda recapturing the NCAA title. He also stepped up to the plate when top Lions big man Donald Tankoua had his season cut short by a knee injury.

Apart from the Collegiate Mythical Five award, also to be handed out is the Coach of the Year which will go to Aldin Ayo of UAAP champion La Salle and Jamike Jarin of NCAA titleholder San Beda.

Also to be given are the Pivotal Player, Impact Player, Super Senior and Mr. Efficiency awards.

The annual Collegiate Basketball Awards by the UAAP-NCAA Press Corps is backed by Smart, Accel, Mighty Sports, MJM Productions and Chooks to Go.

It happens on Jan. 26 at the Montgomery Place Social Hall in E. Rodriguez Ave., Quezon City. — Michael Angelo S. Murillo

La Salle’s Ben Mbala leads the Collegiate Mythical Five selection of the UAAP-NCAA Press Corps. — Alvin S. Go

Anthony reportedly keen to stay with floundering Knicks

NEW YORK — New York Knicks coach Jeff Hornacek says he’s willing to “look at everything” in a bid to find a winning formula, but Knicks watchers were looking beyond lineup changes Tuesday in a bid to parse the future of the NBA franchise.

A meeting between veteran star Carmelo Anthony and team President Phil Jackson was described variously in US media reports as “contentious” and “calm and business-like” with the New York Daily News reporting that Anthony told Jackson he wants to stay in New York.

Speculation that Jackson wanted Anthony out were fueled by an Internet column by Charley Rosen, a former assistant coach and confidant of Jackson, who wrote that Anthony’s “legs are going, going, almost gone.”

“The only sure thing is that Carmelo Anthony has outlived his usefulness in New York,” Rosen opined.

On Monday, Anthony said he wasn’t interested in waiving his no-trade clause, and that he’d proven his loyalty to the organization.

“I don’t think I have to speak on that,” he told ESPN.com. “I think I’ve proven that over the years, day in and day out.”

Anthony’s comments came after the Knicks dropped a heartbreaker at Madison Square Garden, falling 108-107 to the Atlanta Hawks. It was the Knicks’ 11th defeat in their last 13 games.

Hornacek, who shook up his starting lineup to include rookies Ron Baker and Mindaugas Kuzminskas, said Tuesday he’d look at more changes as he searches for a winning formula.

He said Anthony, who has started at power forward for the past three games as Kristaps Porzingis battles a sore Achilles tendon, could stay there when Porzingis returns, with the Lithuanian starting at center and France’s Joakim Noah coming off the bench.

“We’ve got to look at everything,” Hornacek said. “In the long run, we’ve got to look at hey, when KP comes back, will it change everything altogether and what it will do?”

“Sometimes it’s a chance you have to take, but we continue to look over that. We just need to mix it up maybe a little more.” — AFP

Meralco willing to bet on talented injured Lutz

CHRIS LUTZ is worth the gamble.

That’s how Meralco coach Norman Black sums up the decision regarding the acquisition of the talented but injured swingman, who missed most of the games last season due to various injuries.

One of the most talented players to enter the Rookie Draft in 2011, Mr. Lutz was a member of the original Smart Gilas team in 2008 and went on to play for the national squad for three years.

He was selected third overall in the 2011 Rookie Draft behind JVee Casio and Paul Lee and had a splendid season in his freshman year. His average would go down following the acquisition of Marcio Lassiter, his former teammate, who shares the same position with the former Marshall University player.

Over the past two seasons, Mr. Lutz hit rock bottom as he had suffered different sorts of injuries — from his knee, his hamstring, his foot and his waist.

Just recently, Mr. Lutz underwent operation and is now on his way to recovery, but he will need more time to rest before plunging back to action.

Merlaco coach Norman Black is willing to take the risk.

“We are aware that Chris is recovering from an injury and will need more time to completely heal,” wrote Mr. Black in a text message. “The time table is for him to be back on the court sometime in March and to be back as an active player as soon as he can get back into playing shape, which we don’t see happening before the month of April.”

Black believes that once Mr. Lutz regained his old, deadly form, he’ll be an asset to Meralco’s future campaign. The Bolts are currently languishing at the bottom of the standings in the Philippine Cup with a tournament-worst 2-7 win-loss record. They are in danger of being eliminated for the second straight season of the same conference.

“Obviously, he’s coming off an injury so it’s somewhat a risk, but we felt it was a risk worth taking and we are looking forward to his recovery. We do know that if he returns to his regular playing condition, he will be a valuable asset to the Meralco team. It’s very rare that you can pick up a player of his talent and experience off the UFA (unrestricted free agent) list. That7;s the rationale,” he added.

Chris Lutz, shown in action against Jericho Cruz of Rain or Shine. — PBA Media Bureau

Many happy returns for birthday girl Kerber

MELBOURNE — World number one Angelique Kerber gave herself the perfect birthday gift Wednesday by reaching the Australian Open third round, but she had to work hard against fellow German Carina Witthoeft.

Germany’s Angelique Kerber hits a return against Germany’s Carina Witthoeft during their women’s singles match on day three of the Australian Open tennis tournament in Melbourne on January 18, 2017. / AFP PHOTO / SAEED KHAN / IMAGE RESTRICTED TO EDITORIAL USE – STRICTLY NO COMMERCIAL USE

The defending champion, who turned 29, battled through 6-2, 6-7 (3/7), 6-2 and will next face Czech Kristyna Pliskova, the twin sister of fifth seed Karolina Pliskova.

The prospects looked bleak for the unseeded Witthoeft, who has twice lost to Kerber at Wimbledon including an embarrassing 6-0, 6-0 ‘double bagel’ in 2015.

Witthoeft has never beaten a top 10 opponent but she showed far more fight than at the All England Club, with Kerber taken to three sets for the second match in a row.

The top seed said she struggled with the sun in her eyes at times and admitted to too many silly mistakes.

Kerber stunned Serena Williams in the final last year and also went on to win the US Open, dethroning the American as the world’s top ranked player.

She is not only defending a major title for the first time but also playing her maiden Grand Slam as top seed, admitting she is still getting used to dealing with the extra pressure.

The top seed came out of the gates at full pelt, breaking the 21-year old in the first game when her opponent netted a backhand.

Ranked 89, Witthoeft was pushed around the baseline by the left-hander but some unusually wild shots from Kerber handed her break opportunities, one of which she grabbed to level the match.

It was an aberration as the birthday girl immediately broke back, before turning up the heat to score another break and then holding serve to take the set.

Bidding to be the first woman to defend her Australian title since Victoria Azarenka in 2013, Kerber had an indifferent lead-up to Melbourne with early exits in Brisbane and Sydney this month.

She has slowly been improving as he works her way deeper into the Australian Open and towards a potential quarterfinal against Garbine Muguruza, with Williams seeded to meet her in the final.

Kerber was rattled and lost her opening service game of the third set to love, but she quickly regrouped as the crowd got behind her to break back.

A tired Witthoeft had no response and her previously stern resistance crumbled into surrender.

MEN’S DRAW
In the men’s draw, Japanese fifth seed Kei Nishikori marched into the third round alongside former finalist Jo-Wilfried Tsonga, with both winning in straight sets.

Nishikori was extended to five sets in his first-round win over Andrey Kuznetsov, but he found the going a little easier in his 6-3, 6-4, 6-3 win over Jeremy Chardy.

However, he said he hadn’t completely clicked into gear, complaining of “up and down” form after he was broken three times by the 72nd-ranked Frenchman.

Nishikori, who believes he is due a first major win this year, next plays either Lukas Llacko or Dudi Sela, with Tomas Berdych potentially awaiting in the fourth round.

France’s Tsonga, who is seeded 12th and was runner-up to Novak Djokovic in 2008, beat Serbia’s Dusan Lajovic 6-2, 6-2, 6-3 to go through.

In the women’s draw, 36-year-old Williams continued her smooth progress when she beat qualifier Stefanie Voegele 6-3, 6-2 to set up a meeting with China’s Duan Yingying

Williams, the oldest player in the women’s draw, pulled out of the doubles competition with her sister Serena as a precaution to rest a sore elbow.

Russia’s Kuznetsova thrashed Australian wildcard Jaimee Fourlis 6-2, 6-1 to set up a third-round clash with 31-year-old Serb Jelena Jankovic.

World number one Andy Murray plays Russia’s 156th-ranked Andrey Rublev for the first time later, as the five-time runner-up sets his sights on finally lifting the trophy.

Roger Federer, 35, has a similar situation heading into his first career match-up with America’s Noah Rubin, the 20-year-old world number 200. — AFP

Angelique Kerber — AFP

Corteza finishes second at Molinari Championship

FILIPINO billiards star Lee Van Corteza’s impressive run at the World Pool Series-Molinari Players 8-Ball Championship fell short yesterday as he bowed to Russian Ruslan Chinakhov, 16-6, in their race-to-16 finals at the Steinway Cafe-Billiards in New York City.

After subduing Great Britain’s Darren Appleton, 18-16, in an exciting semifinals earlier in the day, Davao native Corteza found the going tough in the finals against 23-year-old Chinakhov, who continued with his ascent in the billiards circuit with the victory.

Prior to the finals defeat, Mr. Corteza, 36, was on a roll in the tournament, taking down opponents impressively one after another in the preliminary rounds.

He opened his campaign with a dominating 13-3 win over American Carl Khan in the first round of the four-day tournament before holding off Frankie Hernandez of the United States, 13-10, in the second round.

Greece’s Nick Ekonomopoulos was Mr. Corteza’s next victim, falling, 13-8, in the third round.

In the last 16, Mr. Corteza got the better of Finland’s Mika Immonen, 15-13, to earn a spot in the quarterfinals where he edged Japanese Naoyuki Oi, 15-13.

Winner Chinakhov, meanwhile, also had it solid en route to the title, taking down Great Britain’s Lee Creighton, 13-4, in the first round, Israel’s Zion Zvi, 13-8, in the second, and United States’ Brandon Shuff, 16-14, in the third round.

The last 16 saw Mr. Chinahov beat Greece’s Alex Kazakis, 15-10, before taking down British Karl Boyles in the quarters, 15-11.

In the semifinals, Mr. Chinakhov, who was a prodigy player at 13 years old and won the World Jr. 9-ball Championship when he was 15, faced and beat Filipino Johann Chua, 15-8, to effectively thwart what would have been an all-Filipino final.

For his runner-up finish, Mr. Corteza got $8,500 while champion Chinakov got the top prize of $20,000.

Losing semifinalists Appleton and Chua each received $5,250.

Another Filipino Dennis Orcollo reached the quarterfinals but lost to Mr. Appleton, 15-12.

The Molinari Players 8-Ball Championship, which attracted more than hundred cue artists, was the first event of the World Pool Series, and was sponsored by Molinari, Predator, Cheqio, RYO Rack, Aramith, Iwan Simonis, Kamui, Billiards Digest, Ultimate Team Gear, and High Rock.

Proponents said the 8-Ball series is designed for players and fans alike to further underscore the discipline’s standing as the most recognized and most participated around the world. — Michael Angelo S. Murillo

Lee Van Corteza — JP Parmentier

KaTropa stop the bleeding with win over Floodbuster

THE TNT KaTropa wiggled their way out of a telling funk in the PBA Philippine Cup yesterday albeit struggled anew in fending off the Mahindra Floodbuster, 104-92, in their opening encounter at the Cuneta Astrodome.

Losers of their last two matches in the season-opening Philippine Basketball Association tournament entering the match, the KaTropa halted their skid but not after having made to sweat by an inspired Floodbuster crew.

Took a 29-25 lead at the end of the first quarter, TNT saw things reversed in the second canto as it was outscored by Mahindra, 32-22, to trail by six points, 57-51, at halftime.

The KaTropa though came out firing in the third period with Troy Rosario, Moala Tautuaa and rookie Roger Pogoy leading the way en route to recapturing the lead, 82-78, at the end of the quarter.

Mahindra would go on a blitz at the start of the payoff period, making a 9-6 run to narrow its deficit, 88-87, with seven minutes left.

TNT, however, hit back-to-back triples after, care of Larry Fonacier and Ryan Reyes, to create some distance anew.

With momentum swinging their way, the KaTropa continued to take it to the Floodbuster, building a 10-point lead, 100-90, with three minutes left in the match and never looked back.

Mr. Rosario led TNT with 18 points on top of nine rebounds while Mr. Pogoy finished with 16 markers, four assists and four steals.

Big man Tautuaa had 14 with Mr. Fonacier and Kris Rosales winding up with 11 each and Jayson Castro 10.

Mahindra, meanwhile, was paced by Alex Mallari who had 19 points, seven rebounds and five assists.

TNT coach Nash Racela said defense was key for them in their skid-busting victory, particularly closing out on Mahindra’s shooters.

“Heading into the game Mahindra was shooting well. So we made a conscious effort to step up our defense in the second half, closing out better on their shooters,” Mr. Racela said.

For Mr. Pogoy, named player of the game, important for them as well in their win was their composure even when they were trailing, something he said they were not able to do in their previous two losses.

“We did a better job handling playing from behind. We just have to trust each other and play our game the way we are capable of,” the TNT rookie said.

With the win, the KaTropa improved to 5-4 for joint fourth place, as of press time, along with the Blackwater Elite. The Floodbuster, for their part, slid to 2-6, good for 10th place.

Next for TNT is a matchup with GlobalPort Batang Pier on Jan. 25 while Mahindra will have a short turnaround and take on the Alaska Aces on Sunday, Jan. 22.

The TNT KaTropa stopped their losing skid yesterday by beating the Mahindra Floodbuster, 104-92. — Alvin S. Go

Putting a value on character

In their evaluation process for making loans, banks and other lending institutions look at the five “C”s of credit. Aside from Capacity, Capital, Collateral, and recently Conditions which include matters like industry structure, technology change, or external factors, there is “Character.” This “C” focuses on a borrower’s track record in paying up credit cards, utility bills, and caterers to indicate his sense of fiscal responsibility. After all, not all those with money to pay actually settle their bills on time.

Is there too in the valuation of a stock a character premium or discount? Do analysts and investors go beyond financial ratios, industry structures, market shares, and historical performance into the leadership styles, succession plans, or spending habits of management?

There is a case to be made for paying attention to the reputation of the principal behind a company. In the new field of behavioral economics, the value of character in a corporation is becoming part of the metric in picking stocks.

Thomas Schelling, a 2005 Nobel laureate in economics, cited for his conflict-collaboration game theory, used the term “egonomics” to refer to self-management in personal matters, weighing costs and benefits of acquisitions and purchases, or being rid of addictions. The ego of a person in the sense of his core personality as well as striving for status can play a role in economic decisions.

On the supply side, ego plays a part too. Is the listed company of a particular player worthy of a premium or a discount? Some positives driving premium pricing includes the management’s track record of transparency and fiscal prudence combined with a working growth strategy. A character discount can involve fuzzy accounting, weak second-tier management, over-the-top spending habits (how many corporate planes?), and a whimsical strategy of acquisitions by the principal.

Characters as stock pickers (demand side) also affect market sentiment. A market maker like Warren Buffet “betting all-in on the future of the American recovery” with the purchase of railroad stocks, like the Burlington Northern Santa Fe (BNSF) four years ago, can make the bears take flight and change market sentiment for certain stocks.

In our small local market, character reigns.

Stocks are identified by their principals and lumped together as the “XYZ” group, if that combination of letters is a person or family. The difficulties that befall one subsidiary can affect even the group’s holding in unrelated businesses. Rumors of a takeover of a company by a particular character are enough to lift a sleepy stock into the stratosphere or make it go on free fall. The research analysts’ valuations, based on future cash flows and acquisition synergy drive up not just the target stock but also the shares of perimeter companies associated with specific characters.

The effect of character on the value of the stock is a tricky connection.

With corporate reputation now driven just by word of mouth and social media with its fake news, the character impact can be overblown. Matters of a lavish lifestyle with yachts and private jets, and opportunism associated with political connections are random stories told of corporate chiefs.

In a small economy where all the characters and their reputations are well known, change in management and ownership matters a lot. Specific personalities dominate the financial space.

Buying into a company through its shares is a declaration of faith in its principals. As my friend and stock market guru, Wilson Sy, puts it, “Buying a stock is like going into a partnership with the principals of a company.”;

Character analysis is not a static science as personalities change too. New names come up and quickly grow into conglomerates. Old names drop out of the picture. New tech companies rise and fall. Still, it is the track record, sometimes a very short one that determines whether character will play a big part in the price of the stock.

In a small market like ours it is a small group of players that needs to be watched as closely as the ticker tape.

Fortunately for the character witnesses, there are just a few players to track and they don’t necessarily talk to each other. And when they do… is it time to buy or sell?

A. R. Samson is chair and CEO of Touch DDB.

ar.samson@yahoo.com

Financial inclusion and financial stability

The Bangko Sentral ng Pilipinas (BSP) deserves a lot of credit for diligently aiming for financial inclusion in the Philippines. The BSP defines financial inclusion as the process of providing access to financial services for all — savings, credit, investment, money transfers, and other products. The financial inclusion agenda revolves around three pillars: (1) access to financial products and services; (2) financial education and literacy; and (3) financial consumer protection. These objectives are especially critical to the underbanked and unbanked, people who struggle in an uncertain world of financial exclusion and insecurity. The BSP has been at the forefront of developing the National Strategy for Financial Inclusion, which involves private and public sector stakeholders.

We have to remember though that the BSP is also at the center of efforts to promote stability and efficiency in the financial system. In fact, this is the primary reason for being of any country’s central bank. The BSP promotes price stability so that the country’s financial system is conducive to balanced and sustainable growth of the economy. Its monetary policy is conducted using inflation targeting as a primary tool. It exercises effective regulation and supervision over financial institutions under its jurisdiction. The approach is through a risk-based capital adequacy framework using Basel II/III and compliance with best practice financial reporting standards.

Basel III, for example, will provide regulations by way of stricter standards on banks on the levels of capital they maintain. The regulations will improve the quantity and quality of bank capital through mandated capital ratios. It will also redefine what constitutes core (or Tier 1) bank capital and redefine bank liabilities and risk management standards. Liquidity coverage and funding ratios are tweaked to increase capital and improve liquidity, problems that were encountered in previous financial crises.

While stability is enhanced, the cost of raising capital for small business could be affected. The higher capital ratios and compliance costs, together with the higher cost of capital, will impact the viability of smaller banks. Small banks are more inclined to serve and lend to small business entrepreneurs. This is attested to by the banking community’s compliance with the mandatory lending provisions of the Magna Carta for SMEs, where the thrift banks and rural banks are reported to be most compliant in the micro and small business segment. Regulations that will require banks to assign higher risk weights to small businesses will serve as a disincentive to servicing this sector. Customization of loans to a small business’ unique needs also suffers in the process because of the higher costs of doing business. In general, Basel III effects on lending to small businesses are generally expected to be disproportionally negative.

Let’s look at the situation from the other side. A liberal approach to financial inclusion by way of relaxation of credit standards, especially for the underbanked, can backfire. The reason for being underbanked or unbanked is not a simple supply problem, and may be an issue of borrower creditworthiness, the character and capacity to pay external debt. The sub-prime mortgage lending situation in America that led to the global financial crisis is a recent example of an aggressive foray into the underbanked gone awry. This is a classic moral hazard, where both lenders and borrowers behave in accordance with the incentive structure of the liberalized credit environment.

The policy dilemma is clear. These two policy objectives — financial inclusion and financial stability — are both important, but they demand actions that may lead to consequences at cross purposes with each other. And these outcomes may even be totally unintended. The behavioral effects are not necessarily consistent and in harmony.

This is precisely the focus of a recent study by Cihak, Mare, and Malecky. The authors conclude that “on average, financial inclusion and financial stability are negatively correlated, and thus linked more through tradeoffs than synergies… While tradeoffs could dominate the inclusion-stability nexus, synergies could arise with almost equally high probability.” They add, “rapid increases in credit to previously informal firms that enter the formal sector should be monitored for potential threats to financial stability.”

The bottom line here is the need for greater policy coordination and astute management by our BSP leaders in achieving the right balance. In which areas can synergies be achieved? What are the risks and tradeoffs when one objective is pursued at the sacrifice of another?

Aiming for both inclusion and stability is a responsibility in which the BSP, a constitutionally independent body, needs support from a number of other government agencies for effective policy coordination. But since the BSP has assumed a mantle of leadership here, its efforts must be lauded, encouraged, and sustained. The next BSP leader must be cognizant of these tradeoffs and the potential synergies.

Benel D. Lagua is executive vice-president at the Development Bank of the Philippines. With an AIM-MBM and a Harvard-MPA. He is a part-time faculty of the College of Business, De La Salle University.

benellagua@alumni.ksg.harvard.edu

South Korea flags killing of national in PHL drugs war

PHILIPPINE POLICE kidnapped and murdered a South Korean businessman, then led his wife to believe he was alive for months to extort money from her, authorities said Wednesday.

Seoul authorities are demanding answers and justice for the victim.

The killing is the latest in a long series of criminal acts by members of the Philippine police force, regarded as one of the nation’s most corrupt institutions, and has fueled concerns about its role enforcing President Rodrigo R. Duterte’s deadly crime war.

The man disappeared from his home in the northern city of Angeles in October last year, and his wife initially paid a ransom of five million pesos ($100,000), Philippine National Police (PNP) spokesman Dionardo Carlos told AFP.

However, the man was strangled to death and burned to ashes in a crematorium on the day he was abducted, the South Korean foreign ministry said, citing a Philippine government report.

The crematorium was owned by a former police officer, the foreign ministry said.

The South Korean government identified the man only by his surname of Ji and said he was in his 50s. Philippine media said he was a businessman who had been working in the Philippines since 2008 and had been working for a manpower company.

South Korean Foreign Minister Yun Byung-se demanded answers after receiving a phone call from Philippine Foreign Secretary Perfecto R. Yasay, Jr. to inform him of the murder.

“Minister Yun, expressing grave shock over the implication of Philippine police officers in the case, asked that the Philippine government get to the bottom of the case and bring those responsible to justice,” a foreign ministry spokesman said.

Ricky Santa Isabel, one of the officers accused of going to Ji’s house and abducting him, surrendered this week, according to Mr. Carlos.

He said another two officers who went with him to the house were under investigation.

Mr. Carlos said a retired police officer was also believed to be involved but had fled to Canada.

For his part, Justice Secretary Vitaliano N. Aguirre II said there may be high-ranking police officials involved in Ji’s abduction.

In a phone conference with reporters late Wednesday afternoon, Mr. Aguirre said: “Malalim eh (It’s deep.) Maraming nakapaligid kay [Philippine National Police Director General Ronald “Bato” M. dela Rosa Jr.] na maaaring posibleng kasama (There are other police officers surrounding Mr. dela Rosa who may be involved in the case).”

Matataas na ang involved (High-ranking officials are involved),” Mr. Aguirre added.

The justice secretary refused to give more details on the suspected personalities as he cited an ongoing investigation.

NO RELATION TO DRUGS WAR
Mr. Santa Isabel and the two other accused officers were from the Anti-Illegal Drugs Group based at PNP headquarters in Manila, according to Mr. Carlos.

He said the three two officers went to Ji’s house on the pretext of a drug raid.

The abductors demanded from Ji’s wife a ransom of eight million pesos on October 30, 12 days after he was killed, according to the Philippine Daily Inquirer, which first reported the news.

It said that she paid five million pesos ($100,000), but the kidnappers then demanded another 4.5 million pesos and continued to say he was alive.

The case has drawn criticism from some lawmakers and media in the Philippines as an example of corrupt policemen expanding their illegal activities after being given freedoms by Mr. Duterte to prosecute his war on drugs.

Mr. Carlos insisted to AFP the abduction of Ji was not related to the drugs war, saying the problem of kidnappings for ransom by corrupt police had existed for a long time.

“It turned out it was an old modus operandi where bad cops claim there is a drug raid and turn it into a kidnap for ransom,” Mr. Carlos said.

At least 167 policemen are under investigation for being involved in various money-making rackets, some of them under the cover of the drug war, Metro Manila Police Chief Oscar Albayalde told reporters.

The police force was among the most corrupt national agencies, according to a 2015 report from the national ombudsman.

A 2013 survey by anti-graft watchdog Transparency International also found that the police force was perceived by Filipinos to be the Philippines’; most corrupt institution. — AFP with Kristine Joy V. Patag

From the Strategic to the Personal: Abe’s Visit to the Philippines

Japanese Prime Minister Shinzo Abe’s Thursday visit to President Duterte highlights the continuing importance of the Philippines to Japan’s relationships in East Asia. As a long-time partner for the Philippines in areas both political and economic, Abe’s visit to the country is significant to our new government as the first among world leaders. In addition to helping seal the two countries’ deep ties, Japan’s support is especially meaningful as the country takes the stage as the 2017 Chair of the Association of Southeast Asian Nations (ASEAN).

Although the Philippines has pursued friendly relations with all of its regional neighbors this year, the results of elections around the globe last year have introduced new uncertainties in the geopolitical environment. To world leaders, the importance of the Philippines as an active player in the community of peaceful and law-abiding nations cannot be discounted. More than ever, the Philippines is in a position to strengthen its partnerships in pursuit of the national interest.

JAPAN’S ECONOMIC RELATIONSHIP WITH THE PHILIPPINES
During his visit, Prime Minister Abe announced a $8.7-billion aid package. To be delivered over a five-year period, the aid reportedly targets infrastructure improvements across the country. The package is the latest in the sequence of Japanese overtures to the Philippines. Last year, President Duterte returned from his state visit to Japan with $1.8 billion in pledged investments.

Japan has been one of the Philippines’; most important international partners for several years. Historically, there are close economic and political ties between the two countries. Japan is the Philippines’; top trading partner. The government reports that in 2015, two-way trade with Japan accounts for $18 billion, or 14.4% of the country’s total trade. Philippine exports to Japan that year were valued at $12 billion. Most of the country’s exports to Japan are made up of electronic products (30.2%) and woodcraft and furniture (23.2%).

Japan was also the second-largest source of Official Development Assistance (ODA) in 2014, the latest figures available. ODA from Japan makes up 23.15% of the Philippines’ total ODA portfolio, largely coming in the form of low-interest loans for government projects throughout the Philippines. Of course, Japan is also a major donor to the ADB, which is the third-largest source of ODA to the country (19.96% of the portfolio).

In reach of Japan’s ODA extends throughout the Philippines. They underpin projects spanning from hydroelectric and wind power projects in northern Luzon, to geothermal energy and arterial roads in the Visayas, to transmission lines, port terminals, and irrigation lines in Mindanao. Given the depth of Japan’s assistance to and partnership with the Philippines, there is every reason for President Duterte to repeatedly reaffirm the two countries’ strong relationship. In the President’s words, “Japan is a friend closer than a brother.”

THE PHILIPPINES-JAPAN STRATEGIC PARTNERSHIP
Moving beyond the economic backbone to the relationship, the Philippines and Japan elevated their ties into a “strategic partnership” in 2013. Although Japan is not obligated to come to the Philippines’ defense in case of an armed conflict, Japan has nevertheless invested in helping the Philippine government boost its security capabilities. As both countries are archipelagos and have territorial disputes with their neighbors, maritime security has been an important component of the two countries’ cooperation. There is a natural common ground in the two countries’ security objectives.

The Philippines and Japan joint statement on President Duterte’s visit to Tokyo is indicative of the priorities in the relationship. Immediately after reaffirming the two countries’ partnership and basic values, the joint statement makes several points related to maintaining and promoting peace and stability in the region. Japan’s multi-year effort to help the government boost the Coast Guard is a concrete manifestation of the two countries’ cooperation.

Finally, beyond the strategic reasoning, Abe made the effort to show a personal relationship with Duterte. The President is known to have strong personal views on foreign policy, as evidenced by several of his outbursts last year.

With the rise of the term “independent foreign policy,” the Philippines’ traditional partners have had cause for concern for their place in the Philippines’ roster of close friends. For this reason, it has become more important for Tokyo to demonstrate that its relationship with Manila extends beyond diplomatic documents and into real life. It’s hard to beat a visit to the President’s personal bedroom.

Angelica Mangahas serves as the Deputy Executive Director of Stratbase-ADRi.

AFP

DENR cancels ECCs of 6 companies

THE Department of Environment and Natural Resources (DENR) has canceled the environmental compliance certificates (ECC) of six projects including those of four mining companies, for failing to operate within their certificates’ validity period.

In a press conference on Wednesday, Environment Secretary Regina Paz L. Lopez noted that the validity of the ECCs for these projects have expired, in accordance with existing laws in which a project’s ECC is deemed expired five years after the project’s failure to launch.

These projects with expired ECCs are Intex Resources Philippines, Inc., whose $2.5-billion nickel project in Occidental Mindoro is scheduled for operations next year; Mejore Wood Works, Inc.’s project in Surigao del Sur; Forum Cebu Coal Corp.’s coal mining project in Cebu; CEKAS Development Corp.’s mining projects in Misamis Oriental covering iron, copper, and other minerals; and Eagelerock Mining Corp.’s gold mining and processing project in Zamboanga del Sur.

Alltech Contractors, Inc.’s Coastal Bay Land Reclamation Project Land in Paranaque City also had its ECC canceled. Ms. Lopez said this project may interfere with her agency’s plan on massive mangrove planting.

Speaking with reporters on the sidelines of the press conference, Undersecretary for Legal Maria Paz G. Luna explained that sending out issuance letters to companies on the cancelation of their ECCs serves to remind them of the need to reassess the environmental impact of those projects to their concerned communities.

“The reason the ECC lapses is because it becomes a different environment… so we set the five-year lapse,” Ms. Luna said, adding.

“It’s better to have paper notices because otherwise, bigla silang mag-start up sabihin nila, ‘May ECC pa kami,’; tapos makalimutan nila, five years na pala [they might suddenly start up saying,’ We have the ECCs, and they’ll forget five years have already passed].”

Ms. Luna said the Department of Environment and Natural Resources had sent show-cause orders to these companies as early as last week.

To recall, the agency also affirmed the cancelation of ECCs of five projects last December, also on the same grounds, including that of Global Ferronickel Holdings, Inc.’s Ipilan nickel mine in Palawan.

Earlier this month, the firm said it filed a complaint against the department to reconsider its decision to cancel the ECC of its Ipilan project, saying that the DENR had approved only recently some documents on the operation of the nickel project.

Ms. Luna said she has yet to receive any motion for reconsideration on the matter. — Janina C. Lim