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WEATHER FORECAST Vol. 15 No. 90 May 16, 2014 METRO MANILA 26°C to 36°C CEBU 26°C to 33°C DAVAO 25°C to 32°C The Nation

 Senate receives signed Napoles list Currency in Currency 1 Peso in COUNTRY  Aseanapol adopting proposals vs Peso in US$1 Currency transnational crimes US (dollar) 43.6270 1.0000 0.0229 Japan (yen) 0.4284 0.0098 2.3343  Sandigan freezes Corona assets UK (pound) 73.1620 1.6770 0.0137

 China reef ‘reclamation’ seen Hong Kong (dollar) 5.6283 0.1290 0.1777 China (yuan) 7.0040 0.1605 0.1428 Canada (dollar) 40.1057 0.9193 0.0249 The Economy and Business Australia (dollar) 40.8952 0.9374 0.0245

37.7821 0.8660 0.0265  Remittances up 6.9% in March New Zealand (dollar) EMU (euro) 59.8388 1.3704 0.0167  Government remains aloof to new taxes  ‘Hot money’ returns in April PESO–DOLLAR RATE 30 trading days to May 16, 2014  Farm output flat in 1st quarter Open: P 43.620

 House okays entry of foreign banks 42.00 Close: P 43.660 42.50 43.00 High: P 43.580 43.50 Corporate Briefs 44.00 Low: P 43.720 44.50  Terra Motors raises $10Mn to make PH its 45.00 W.A.: P 43.646 production hub 45.50

46.00  Revenues of Asian Terminal Inc. up 30% in Vol.: 795.80 Mn

1Q  Hedcor Inc. opens new hydropower plants PSE COMPOSITE INDEX Open: 6,879.63 30 trading days to May 15, 2014

High: 6,895.96 7,300.00 7,100.00 Low: 6,842.42

6,900.00 6,700.00 Close: 6,849.33

6,500.00 6,300.00 Index: 6,849.33 6,100.00 5,900.00 Vol.: 2.076 Bn 5,700.00 Val.: 13.779 Bn

Disclaimer: The articles in this Daily News have been culled from various media sources. We cannot, therefore, vouch for the accuracy of what is reported. For more information on the WBF, you can call 810-96-06 to 09, or visit our website at www.wallacebusinessforum.com. 1

The Nation

Senate receives signed Napoles list Justice Secretary Leila de Lima submitted to the Senate Blue Ribbon committee yesterday the list signed by Ms. Janet Napoles containing the names of over 80 lawmakers allegedly involved in the pork barrel scam. To end speculation on the names, committee chairman Senator Teofisto Guingona III and vice chairman Sen. Sergio Osmeña III released the so-called “Napolist” after a closed-door conference with Sec. De Lima in Sen. Guingona’s office yesterday. It was the same list Napoles signed and handed to Sec. De Lima on April 22 at the Ospital ng Makati before Ms. Napoles underwent surgery to remove a cyst in her ovary. Ms. Napoles also affixed 2 thumb marks on the document. On the list are Senators Ramon Revilla Jr., Jinggoy Estrada, Juan Ponce Enrile, Vicente Sotto III, Loren Legarda, Koko Pimentel III, Manny Villar, Alan Peter Cayetano, Gringo Honasan, Francis Escudero and the late Sen. Robert Barbers. Former Batanes congressman and now Budget Secretary Florencio Abad, as well as Technical Education and Skills Development Authority head Joel Villanueva, were also included in the list. The list also included the names of 69 incumbent and former congressmen as well as those of alleged conduits for the implementing agencies like the Departments of Agriculture and Agrarian Reform, National Livelihood Development Corp., Technology Resource Center and National Agribusiness Corp.

Aseanapol adopting proposals vs transnational crimes The heads of national police forces of ASEAN member-countries are adopting proposals of the International Criminal Police Organization-International Police (ICPO-Interpol) to combat transnational criminal threats. At the 34th ASEANAPOL closing ceremony at the Sofitel hotel yesterday, they also agreed to adopt a plan of action for joint response to crisis situations and address transnational criminal threats, specifically in Southeast Asia, said Philippine National Police (PNP) chief Director General Alan Purisima. A joint communiqué ratified by the delegates encourages all ASEANAPOL members to share regional knowledge and skills to deal with specific crime areas of terrorism, human trafficking and drug trafficking.

Sandigan freezes Corona assets The Sandiganbayan has ordered a freeze on the assets of former chief justice Renato Corona and his wife Cristina valued at approximately P130.5 million, which are the subject of a forfeiture case filed by the Office of the Ombudsman more than a month ago. Associate Justice Teresita Diaz-Baldos, who chairs the anti-graft court’s 2nd division, signed the 2-page writ of preliminary attachment on May 5 and gave Sandiganbayan sheriff IV Alexander Valencia 30 days to enforce the order and submit a report with a full inventory of the properties. The Sandiganbayan said the freezing of the Corona couple’s assets is in order, “considering that adequate bases exist which satisfy the requirements set forth under Rule 57 of the 1997 Rules of Civil Procedure.” The freeze order seeks to ensure that if it is proven that the Coronas did acquire the wealth illegally, the same will be recovered by the state in full. Mr. Corona said the Sandiganbayan’s freeze order did not come as a surprise.

China reef ‘reclamation’ seen The Philippines yesterday released photographs to back its claim that China was reclaiming land on a disputed reef in the South China Sea in an apparent effort to build an airstrip. Manila warned on Wednesday that China may be building an airstrip on the Chinese-held Johnson South Reef -- claimed by the Philippines and Vietnam - - boosting the superpower’s claim to most of the strategic Asian waters. A series of photographs released by the Foreign Affairs department yesterday appeared to show large-scale reclamation in stages. The latest photograph dated March 11, 2014 appears to show a large light-colored landfill, surrounded by shallow turquoise waters. “This series of photographs... from Philippine intelligence sources, shows in stages the extensive reclamation by China on Mabini Reef (Johnson South Reef),” the Foreign Affairs department said in a statement. “These actions are considered destabilizing and in violation of the Declaration on the Conduct of Parties in the South China Sea (DOC) and international law,” it said, asserting that the reef was “part of Philippine territory”.

The Economy & Business

Remittances up 6.9% in March Personal remittances continued to rise in March, registering a 6.9% growth to $2.1 billion from a year ago due to robust remittance flows from both land and sea-based overseas Filipino workers, the Bangko Sentral ng Pilipinas (central) reported yesterday. This brought the cumulative remittances for the first 3 months of the year to $6.085 billion. “The steady increase in personal remittances during the first 3 months of the year was driven by strong growth in remittance flows from both land-based workers with long-term contracts (which increased by 4.5%) and sea-based and land-based workers with short-term contracts (which jumped 10.9%),” the central bank said. Cash remittances from overseas Filipinos coursed through banks rose 6.5% to $1.883 billion in March from last year’s level. The central bank said money sent home by land-based workers went up 2

4.5% to $4.1 billion in the first 3 months of the year, while those sent by sea-based workers climbed 10.9% to $1.4 million.

Government remains aloof to new taxes More than halfway into its 6-year term, the Aquino government remains keen on increasing revenue collection via reforms in administration and existing regimes rather than new taxes, 2 state economic managers said this week. And as it continues to wait for Congress to act on bills seeking to raise taxes from mining and rationalization of fiscal incentives, the government is focused on improving collection efficiency and disciplining tax delinquents, the same officials said. “We stick to what [President Benigno Aquino III] has said: that we close the holes in the tax net so we make sure we maximize the potential first...,” Finance Secretary Cesar Purisima said. The International Monetary Fund has urged the government to legislate measures that would broaden the tax base further, citing moves for incentives rationalization, customs modernization and adjustments in the current mining tax regime. Pres. Aquino has given the “go signal” to laws that will increase government revenue from mining and another that will rationalize the grant of fiscal perks to investors, Budget Secretary Abad said.

‘Hot money’ returns in April The country saw net inflows of foreign portfolio investments last month, the Bangko Sentral ng Pilipinas (central bank) reported yesterday, snapping the streak of monthly net outflows since December. “Transactions in April 2014 for registered foreign portfolio investments yielded net inflows of $324 million, an improvement from last month’s net outflows of $92 million,” the central bank said in a press release. April saw net inflows of “hot money” -- called so given the ease by which these funds enter and leave the country -- despite the country bagging a smaller amount of foreign portfolio investments in March. “While registered investments of $1.9 billion were lower by 12.1% compared to the previous month’s $2.1 billion, outflows declined to $1.5 billion from $2.2 billion in March 2014,” the regulator explained. The central bank reported a net outflow for the 4th straight month in March, as the US Federal Reserve continued to wind down its massive stimulus program. The March net outflow of “hot money” was at $91.51 million. The central bank said that the net inflows for April “arose from investor optimism about the economy’s growth and strong quarterly corporate results.”

Farm output flat in 1st quarter Impact of damage from last year’s storms has begun to weigh on the economy, forcing farm output growth to slow last quarter from a year ago and from the preceding three months, according to the latest government report. The 1st-quarter report, released yesterday by the Philippine Statistics Authority (PSA), showed farm production edged up by a nearly flat 0.67% in the first 3 months of the year, a performance “traced to devastating effects of typhoons that hit the country last year.” Farm output for the entire year is officially targeted at 3.5-4.5%, Agricultire undersecretary and spokesman Emerson Palad said yesterday. Agriculture accounts for 1/3 of the country’s total employed but contributes less than 1/5 to national output. The strongest of 3 storms last year, Haiyan, that hit central Philippines on November 8 was estimated to have killed more than 6,000 people and damaged P20.262 billion worth of agricultural facilities and crops and P39.831 billion worth of infrastructure.

House okays entry of foreign banks The House of Representatives has approved on 3rd and final reading the bill allowing the full entry of foreign banks in the Philippines. Lawmakers said this would allow the country to maximize the benefits from the upcoming integration of the ASEAN member-states. Voting 198-0, lawmakers passed on final reading Monday night House Bill 3984 or the proposed “Act Allowing Full Entry of Foreign Banks in the Philippines.” The measure was authored by Representatives Nelson Collantes of Batangas, chairman of the House committee on banks and financial intermediaries; Teodorico Haresco (Aklan); Gustavo Tambunting (Parañaque); Henry Oaminal (Misamis Occidental); Jorge Almonte (Misamis Occidental); Arthur Yap (Bohol); Ferdinand Hernandez (South Cotabato); Julieta Cortuna (A-Teacher party list); and Samuel Pagdilao (ACT-CIS party list).

Corporate Briefs

Japanese electric vehicle (EV) maker Terra Motors has raised $10 million to make the Philippines its production hub in Asia and support operations in the region…according to Terra Motors Corp., it received funding from investors such as California based Fenox Venture Capital and Japanese firms Mizuho Capital Co. Ltd., Shinsei Bank Ltd., SMBC Venture Capital Co. Ltd., and Aizawa Securities Co. Ltd… revenues of listed port operator Asian Terminal Inc. (ATI) jumped 30% in the 1st quarter of the year amid the decision of the state- run Philippine Ports Authority (PPA) to double storage charges on foreign containers…ATI reported to the Philippine Stock Exchange (PSE) that its revenues amounted to P1.91 billion from January to March this year or P439.7 million compared to P1.47 billion in the same period last year…the port operator said revenues in South Harbor international container operations jumped 37.3% due to higher volumes and higher storage 3 revenues…Hedcor Inc., a wholly-owned subsidiary of AboitizPower, is increasing its capacity by 13.6 megawatts(MW) with its new run-of-river hydropower plants…the company inaugurated Tuesday its Tudaya 1 and 2 hydropower plants in Sta. Cruz, Davao del Sur, marking its 20th and 21st power plants and increasing Hedcor’s total capacity to 170 MW.

Word‐for‐Word

Philippine Daily Inquirer Editorial says:

Instead of infusing clarity, the proliferation of lists naming senators and representatives allegedly involved in the pork barrel scam has wrought confusion—and confusion of a particularly debilitating kind. The deliberate objective was to confuse the issue and to fudge the line between the legal and the illegal, between good and evil. The intention, in short, was to sow a moral confusion, the kind that makes corruption the norm (“everyone does it”) and gets plunderers off the hook (“why single us out?”).

Let us be clear: Those determined to have lined their own pockets with allocations from the Priority Development Assistance Fund or the Malampaya Fund, or both, should be brought to justice: suspended, tried, convicted, barred from political office for all time. But the lists are only a possible indicator of corruption, not outright proof; they cannot be the sole basis of any finding of probable cause.

When the Inquirer broke the story on the pork barrel scam last July, the allegations of the whistle-blowers led by Benhur Luy were both vetted by editors and backed by documentary support. The first politicians identified as having personally benefited from the scam allegedly masterminded by Janet Lim Napoles were named only on the fourth day of the series. In other words, the story wasn’t based on a mere list.

What, after all, is the value of a simple list? Ex-senator and rehabilitation czar Panfilo Lacson, who indulged a craving for distraction from his frustrating post-“Yolanda” work by offering a version of the so-called Napoles list, inadvertently showed the limitations of evidence-free listings. He told reporters that his political enemy

Sen. Miriam Defensor Santiago was on the list, but in fact Santiago was not in his own version of the list but in someone else’s. That raises not only a basic question (why are there different lists?) but also a profound one (who gets to interpret the truth of the lists?). Lacson self-evidently thought his own version was true, except for the inconvenient detail about leaving out Santiago altogether.

To be sure, Santiago is included on a new list, one that has been culled from Luy’s own digital record. Does this mean she was in fact party to the scam? Not necessarily—but, unfortunately for her, she now has to prove that the details of the budgetary documents found in Luy’s “file” on her are mistaken or that the transactions she helped fund were all aboveboard. It is a task more difficult than those that face other lawmakers recorded in Luy’s digital hard drive as without any paper trail at all, but not insurmountable.

Contrary to Santiago’s most recent statement, Luy (as corroborated by other whistle-blowers and whose testimony is supported by reams of documentation) remains the best source of information on the pork barrel scam. Best does not mean ideal. But Luy’s testimony is the most credible precisely because it is imperfect; it contradicts itself in some parts, and therefore could not have been merely scripted. Take his response to Sen. Alan Peter Cayetano’s direct question at a Senate blue ribbon committee hearing, for example. Asked if there were senators present at the hearing who were also implicated in the scam, aside from those already named and who had inhibited themselves from the committee inquiry, he gave a categorical answer: No.

How does this simple answer square with the data in his files? Was the record-keeping sometimes done from memory (which may explain the lack of a paper trail in some instances)? Was it done by dictation?

As we urged in this space last Monday, it is time to call Luy back before the blue ribbon committee. He can help make sense of the documents he himself kept.

But Justice Secretary Leila de Lima must also expedite the vetting of Napoles’ hospital-bed statements, and her department’s investigation into Luy’s digital files.

Not least, Ombudsman Conchita Carpio Morales must take the necessary next step; now that she has signed off on three special resolutions in the plunder and graft charges, she must file the appropriate case before the Sandiganbayan.

All these steps have a moral dimension: They can help bring clarity to the issue, remind us that there is a real difference between rumor and proof—and restore our sense of right and wrong.