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Strategic Analysis and Research by the

CENTER FOR STRATEGY, ENTERPRISE & INTELLIGENCE

It is the rising political awareness of our people that we regard as our greatest triumph. once we get into Parliament we will be able to work towards genuine democratization ~ Nobel Peace laureate Aung San Suu Kyi speaking on Myanmar's parliamentary elections after a year of democratic reforms Life is tough here. We make just enough to survive. We just hope she can improve our lives ~ Father of four on democracy icon Aung San Suu Kyi's impending election victory

Report
Volume 2 - Number 13 April 2-8, 2012

4 The Long Struggle to Silence the Guns

After half a century of insurgency and counter-insurgency, are the government and the communists and separatists any closer to ending the bloodletting? Heres a review of the long and winding trail to the elusive peace agreements. 1968: A year of global revolutionary fervor spurs socialist and Muslim rebels in the Philippines The ARMM Solution: Making peace in Mindanao under the Republic and the Constitution Bangsamoro: Will awarding Muslim ancestral domains pacify the MILF? Reds underground: From Hukabalahap to New Peoples Army, the communists took on colonial and Filipino forces

11 Making Mining Serve Nation and Nature

The government finds itself between a ton of rocks and a bunch of hard places Academicians wondering aloud: The Ateneo School of Government asks a host of tough questions that are anything but academic

WORLD

20 Now, Say Hello to Generation C

Meet the wired and wireless global community of social-networked, BBM-and-SMSconnected, bandwidth-hungry multitaskers who live and love, work and play via their phones, tablets and PCs. If youre reading this, you must be one of them Dissecting Facebook: Social media updates show how people think and tick One is not enough: Multiple device screens match our lifes many facets Eat, drink and be connected: Its fine to text and tweet with food in your mouth Analyzing Gen C: Booz & Co. charts what the connected lifers mean to the world

BUSINESS

30 Who Turned Off the Lights?

After similar daily outages in the past two summers, Mindanao is again suffering eight-hour rotating blackouts. Amid administration talk of emergency presidential powers and an electricity summit, heres the real picture of the nations power predicament and the tough issues facing policymakers and consumers in ensuring ample, affordable electricity for everyday life and long-term development.

POINT & CLICK You can access online research via the Internet by clicking phrases in blue

TECHNOLOGY

42 Put It On and Switch It On

Smartphones on your wrist. Grade-adjusting electronic eyewear. Charging your cellphone with your shirt. Here are some of the amazing and stylish high-tech gear that goes right beside your Armanis and Guccis Where to wear and wow: Dont miss the big shows for wearable wonders

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Center for Strategy, Enterprise & Intelligence provides expertise in strategy and management, enterprise development, intelligence, Internet and media. For subscriptions, research, and advisory services, please e-mail report@censeisolutions.com or call/fax +63-2-5311182. Links to online material on public websites are current as of the week prior to the publication date, but might be removed without warning. Publishers of linked content should e-mail us or contact us by fax if they do not wish their websites to be linked to our material in the future.

Understanding the Problem Is the First Step in Solving It

For three consecutive summers since 2010, Mindanao has suffered debilitating daily brownouts lasting as long as eight hours. So last week there was much chatter about a power summit and emergency presidential powers. Whats wrong with this picture? If a problem has kept happening year after year, chances are the experts have analyzed it thoroughly and come up with some pretty good ideas on how to solve it. But lack of governance focus, political will or required investment may have held up the solution. So the first step in addressing the problem is often a review of relevant studies and situationers. Thats exactly what we offer in this weeks three reports on decades-old national problems: limited and costly electric power, the mining policy, and the half-century-long communist and separatist insurgencies. The Nation article on the power crunch provides highlights of the Department of Energys Power Development Plan, 2009-2030, including projections on demand, capacity requirements, committed generating ventures, and the current or future power supply gaps, including those that may lead to intolerable outages. Our Business report on mining sets out the main issues as presented in relevant statements and studies by major sides in the burning controversy: the Chamber of Mines, grouping extraction companies; the environmental advocates and institutions, including international conservation entities; and of course the state. As in any highly politicized and intensely debated issue, the challenge for strategic analysis and research is faithfully and impartially presenting all major arguments and counter-arguments. If we dont seem to strongly favor one side, then we must be correctly and professionally playing it right down the middle. On the other hand, there are issues where we do take sides at the outset in the interest of national advancement, social harmony and moral rectitude. One such issue is the peace process. Arguing across the negotiating table is, hands and guns down, far better than shooting one another and decimating innocent collaterals. Hence, while realpolitik advises that the key events in the struggle for lasting peace happens in the battlefield, the actual instrument for ending violence and joining hands as Filipinos has to be the legally binding agreements and memoranda, the focus of our Nation report on negotiations with communist and separatist rebel groups. For any age-old problem, controversy, challenge or aspiration, getting the lay of the land and the state of the art and science is but the first and perhaps easiest step. From the framework of principles, facts and figures, policymakers and other stakeholders must explore and devise new solutions and invest time, resources and reputations to essay and effect positive change. Well tell you about that too.

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After decades of communist and separatist insurgency, will peace agreements ever happen?
By Atty. John Carlo Gil M. Sadian

The Long Struggle to Silence the Guns of Rebellion

In the late 1960s, two distinct local revolutionary movements rose from the activism that characterized that decade, one ideological (Muslim secession) and the other geopolitical (worldwide communist revolution). Despite the changes in the world since then including the collapse of Communism as an ideology cum political movement, and the advent of globalization ushering in relative economic prosperity the Philippines continues to be beset by these local insurgencies of communist rebels and Muslim separatists. Even though the combined strength of these two rebel forces has not reached a point of

posing any real military or political threat to the Manila-based national government, their continuing existence -- as well as the underlying reasons for their resilience -has hounded six administrations as shown by the unsuccessful attempts to quell these insurgencies with various combinations of diplomacy and force. Seeking peace with Islamic separatists After four decades of conflict with Muslim secessionists in Mindanao, the government, during the administration of Gloria Macapagal Arroyo, appeared to be on the verge of accomplishing a major

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breakthrough in the peace process when it was announced that the Memorandum of Agreement on the Muslim Ancestral Domain (MOA-AD) would be signed on August 5, 2008. The day before the scheduled signing, however, the Supreme Court issued a temporary restraining order against the signing of the MOA-AD, in response to five petitions questioning its constitutionality.

The Court eventually voted 9-6 to strike down the MOA-AD as unconstitutional. This marked a major setback in the peace process , which goes all the way back to the 1970s, when then-President Ferdinand E. Marcos started negotiations with the Moro National Liberation Front (MNLF) led by Nur Misuari. instead of accomplishing its goal of seizing power from the government, the CPP-NPA-NDF's rise set the stage for an even more powerful government, as then-President Ferdinand E. Marcos would use the communist threat as the excuse for the declaration of martial law. Also in 1969, on the heels of the Jabidah Massacre, university professor Nur Misuari founded the MNLF, which began a protracted armed campaign against the government in 1970, aimed at establishing an independent Bangsamoro Land. Things took a different turn in 1976, when Libyan leader Muammar Gaddafi brokered an agreement that led to the signing of the Tripoli Agreement, which introduced the concept of an autonomous Muslim region in Mindanao. On August 1, 1989, under the mandate of the new 1987 Constitution, Congress enacted Republic Act 6734 creating the Autonomous Region in Muslim Mindanao (ARMM). However, out of the 13 provinces and 9 cities that participated in the plebiscite, only the provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi opted to be part of the ARMM. Instead of bringing the Muslim leaders together, however, this agreement further fragmented the MNLF, because some factions within the group preferred independence over autonomy. Thus, a group of officers led by Hashim Salamat broke away and formed the Moro Islamic Liberation Front (MILF) to continue their armed struggle for an independent Moro nation in Mindanao.

1968: Two fuses are lit

The Cold War between the United States and the Soviet Union may only be part of history books for most of us, but for the activists who took part in the public unrest during the pre-martial law era, it certainly was the spark that ignited the rise of a Maoist-inspired communist insurgency in the Philippines. Inspired by the rising unpopularity of American imperialism set against the backdrop of escalating poverty across the country, the Communist Party of the Philippines (CPP) was established on December 26, 1968, under the leadership of Jose Ma. Sison. Earlier that year, at least 28 Muslim volunteers from Sulu who were being trained for a covert commando mission to conquer Sabah were killed by government troops in an attempt to cover up the mission's existence, in what would popularly be known as the Jabidah Massacre. The outrage over this massacre has been widely considered as the catalyst that gave birth to the Islamic separatist movements in Mindanao, pioneer of which was Nur Misuaris Moro National Liberation Front (MNLF). Early attempts to quell these rebellions. Soon after its founding, the CPP wasted no time in laying the groundwork for its ultimate goal of overthrowing the Philippine government. On March 29, 1969, the CPP launched its protracted peoples war with the establishment of the New Peoples Army (NPA), with the National Democratic Front (NDF) serving as the CPP's political front organization. However,

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The junked MOA-AD was not the first agreement entered into by the government with Muslim secessionist groups. Through the intercession of Libyan leader Muammar Gaddafi, the Marcos administration sat down with the MNLF delegation and forged the monumental 1976 Tripoli Agreement, which provided the framework for subsequent negotiations. This agreement recognized Philippine sovereignty, but also introduced the concept of autonomy for the Muslim areas of Mindanao within the realm of the sovereignty and territorial integrity of the Republic of the Philippines. When Marcos was ousted in 1986, the task of implementing the provisions of the 1976 Tripoli Agreement fell upon the shoulders of President Corazon Aquino, whose first concern was the overhaul of the entire legal system. This included the drafting of a new Constitution under which the Tripoli Agreement would be implemented. The new charter took effect on February 2, 1987, with seven sections touching on the creation of two autonomous regions, one in Muslim Mindanao and another in the Cordilleras. Peace with the MNLF, but a faction breaks away. Aquinos successor, retired General Fidel V. Ramos, was the one who made the MNLF lay down their arms, through what the MNLF recognized as a bold and innovative initiative. On September 2, 1996, again through the intercession of Gaddafi, the Final Peace Agreement was finally signed by the government and the MNLF peace panels as a basis for a just, lasting, honorable and comprehensive solution to the problem in Southern Philippines within the framework of the Philippine Constitution. Note that the peace agreements penultimate whereas clause states that the parties affirm the sovereignty, territorial integrity

Creation of the ARMM

As recounted by the Presidential Management Staff in a June 1992 paper, The Aquino Management of the Presidency, as posted on former President Aquino's official website, coryaquino.ph, Aquino went to Sulu in September 1986 to meet Misuari personally, and their meeting set the stage for further discussions with Misuari on expanding the groundwork for Muslim autonomy. In compliance with Section 15, Article X of the 1987 Constitution, Congress enacted Republic Act 6734 in August 1989, creating the Autonomous Region in Muslim Mindanao (ARMM) to be composed of the provinces and cities who would vote in a November plebiscite on the issue of inclusion in the region. The plebiscite would be conducted in 13 provinces Basilan, Cotabato, Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte, Zamboanga del Sur and nine cities Cotabato, Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa, and Zamboanga. However, only the provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi opted to be part of the autonomous region. Nonetheless, President Corazon Aquino welcomed the ARMM with high hopes that it would end hostilities in Mindanao.

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and the Constitution of the Republic of the Philippines. This being inconsistent with their original goal of seceding from Philippine sovereignty, a faction led by Hashim Salamat broke away and formed the group that would later be known as the Moro Islamic Liberation Front (MILF). A month before this peace agreement with the MNLF was signed, President Ramos also jump-started exploratory talks with the breakaway MILF faction as it continued its armed struggle for independence in some provinces in Mindanao. The low-level negotiations continued until Joseph Ejercito Estrada succeeded Ramos, but would adopt a radically different approach. By 1999, the peace talks would collapse under Estradas all-out war policy against the MILF and all armed groups in Mindanao. The MOA on Ancestral Domain. Upon Estradas ouster in January 2001, Arroyo,

his successor, revived the peace process by signing the General Framework for the Resumption of Peace Talks and its Implementing Guidelines on March 24, 2001. After seven years of onagain-off-again talks, the peace panels of the government and the MILF finally agreed on a draft accord on the Ancestral Domain Aspect of the Tripoli Agreement (MOA-AD), which was scheduled for signing on August 5, 2008. The most important provisions of this MOA-AD involved the governments recognition of a transitory associative relation between the central government and the newlyintroduced Bangsamoro Juridical Entity (BJE), and the implied guarantee that the government would implement the necessary constitutional amendments to create a framework for the MOA-ADs implementation. Ruling on the petitions filed by the provinces of North Cotabato, Zamboanga

Bangsamoro Land
According to the MNLF official blogsite, maintained by John Remollo Petalcorin, its director for advocacy communication, Bangsamoro Land was already a sovereign nation hundreds of years before it was illegally annexed as part of the Philippines in the 1935 Constitution of the Republic of the Philippines, and then occupied by settlers who were encouraged by the government in the 1950s through the government's Homestead Program. There was no land titling system by the natives of Mindanao at the time. The Philippine government took advantage of the absense [sic] of land titles to give away lots in Mindanao to poor farmers and other migrants from other parts of the country, the MNLF official blogsite relates in its History of Armed Conflict section. Bangsamoro Land comprises Sulu, Mindanao, and Palawan, and consists of 25 provinces: Agusan del Norte, Agusan del Sur, Basilan, Bukidnon, Compostela Valley, Cotabato, Davao del Norte, Davao del Sur, Davao Oriental, Lanao del Norte, Lanao del Sur, Maguindanao, Misamis Occidental, Misamis Oriental, Palawan, Sarangani, South Cotabato, Sultan Kudarat, Sulu, Surigao del Norte, Surigao del Sur, Tawi-Tawi, Zamboanga del Norte, Zamboanga del Sur, Zamboanga Sibugay.

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del Norte, Sultan Kudarat, and the cities of Zamboanga, Iligan, and Isabela, the Supreme Court struck down as unconstitutional the associative relationship between the Philippine government and the BJE. The decision written by Justice Conchita Carpio Morales stressed that the Constitution does not recognize any state within this country other than the Philippine State, much less does it provide for the possibility of any transitory status to prepare any part of Philippine territory for independence. Likewise, the Court held as unconstitutional the guarantees under the MOA-AD that the government would implement the necessary constitutional amendments to create a framework for its implementation. According to the Court, the peace panel and the President did not have the authority to make such guarantees, because they do not have the power to propose amendments to the Constitution, such power being vested exclusively in Congress. Stalemate. Sporadic fighting followed the junking of the MOA-AD, with the year 2008 setting a record-high 30 encounters between government troops and MILF fighters. In an effort to salvage the negotiations, Arroyo declared the suspension of military operations against the MILF on July 2009. The peace talks once again went on-and-off due to questions about the MILFs sincerity in implementing the ceasefire agreement. Arroyos successor, Benigno Aquino III, continued the peaceful approach, and even met with MILF chairman Al Haj Murad Ebrahim in Tokyo, and, two months later, refused to order military operations against rogue MILF forces that ambushed an Army

contingent in Al-Barka, Basilan, killing 19 soldiers and wounding 12 others. As of this day, the peace process with the MILF seems to be at a standstill, with chief government negotiator Marvic Leonen warning both government and MILF panels that the peace process is already on the verge of reaching a stalemate because of the generally acknowledged fact that both the government and the MILF could not agree on what constitutes genuine autonomy. The MILF, for its part, doesn't seem to be disagreeing with the government's assessment, as it apparently wants a Muslim sub-state distinct from the Autonomous Region in Muslim Mindanao. Seeking peace with communist insurgents Reaching out to the communists. It was during the administration of President Ramos, a retired soldier who fought communist rebels, that membership in the CPP was decriminalized with the repeal of the Anti-Subversion Law in 1992. He also reached out to the communists by resuming peace talks with the CPPs political wing, the National Democratic Front (NDF). On September 1, 1992, the Hague Joint Declaration was signed by NDF vice chairman Luis Jalandoni and government emissary Jose Yap with the understanding that the holding of peace negotiations must be in accordance with mutually acceptable principles, including national sovereignty, democracy and social justice. The Hague Joint Declaration laid down four phases in the peace process: (1) human rights and international humanitarian law, (2) socio-economic

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reforms, (3) political and constitutional reforms, and (4) end of hostilities and disposition of forces.

One of the most valued agreements in the peace talks with the NDF was the Joint Agreement on Safety and Immunity

Communists driven underground

During the American occupation, one of the political parties that fielded candidates for national and local elections was the original Partido Komunista ng Pilipinas (PKP). This left-wing faction of the Nacionalista Party has been legally recognized until October 26, 1932, when the Supreme Court ruled that since the purpose of the party is to incite class struggle, to overthrow the present government by peaceful means or by armed revolution, to alter the social order, and to commit the crimes of rebellion and sedition, such organization must necessarily be illegal. Thereafter, the party continued to operate as an underground organization. In line with this ruling, on June 20, 1957, President Carlos P. Garcia approved the Anti-Subversion Act (Republic Act 1700), thereby formally outlawing membership in the communist party. At the height of public unrest in the 1960s due to the rising unpopularity of the Vietnam War and the escalating poverty across the country, Marxist-Leninist-Maoist intellectuals established the new Communist Party of the Philippines (CPP) under the leadership of Jose Ma. Sison. The founding of this organization on December 26, 1968 has been touted by the new CPP as the re-establishment of the erstwhile communist party, whose major errors they blamed for the almost total destruction of the revolutionary movement in the 1950s. The CPP established its armed wing, the New Peoples Army (NPA), on March 29, 1969 with the goal of toppling the government. The threat of communist insurrection reached a point that the national government often used them as an excuse for flexing the muscles of the military. Indeed, this paranoia became a prelude to the establishment of an eventual authoritarian regime with President

Marcos issuing Proclamation 1081 placing the entire Philippines under martial law effective September 21, 1972. According to the first whereas clause of the proclamation, martial law was declared because of elements that have entered into a conspiracy and have in fact joined and banded their resources and forces together for the prime purpose of, and in fact they have been and are actually staging, undertaking and waging an armed insurrection and rebellion against the Government of the Republic of the Philippines in order to forcibly seize political and state power in this country, overthrow the duly constituted government, and supplant our existing political, social, economic and legal order with an entirely new one whose form of government, whose system of laws, whose conception of God and religion, whose notion of individual rights and family relations, and whose political, social, economic, legal and moral precepts are based on the MarxistLeninist-Maoist teachings and beliefs. Instead of stopping the communist threat, Marcos used Proclamation 1081 to go after all his political rivals, communist and non-communist alike. Throughout his term, the leaders and members of the CPP-NPA and other non-communist members of the political opposition were subjected to warrantless arrests, enforced disappearances, unexplained deaths and other human rights abuses. Marcos was eventually ousted and replaced by President Corazon Aquino, whose husband had been jailed by the Marcos government on charges of association with the communist rebellion (and murdered in August 1983, as he was returning to Manila from exile in the U.S). During her term, nothing substantial was done regarding the CPP-NPA except for the signing of ceasefire agreements that eventually collapsed due to her support for the renewal of the Bases Agreement with the United States.

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Guarantees (JASIG) signed on February 24, 1995. This provided that all duly accredited persons as defined herein in possession of documents of identification or safe conduct passes are guaranteed free and unhindered passage in all areas in the Philippines, and in travelling to and from the Philippines in connection with the performance of their duties in the negotiations. Up to this day, the NDF claims that the government has been violating the provisions of the JASIG whenever a member of the CPP-NPA-NDF is arrested, even for criminal offenses not connected with rebellion. Two years later, in what seemed to be the end to he first phase laid down under the the Hague Joint Declaration, the peace panels successfully drafted the Comprehensive Agreement on Respect for Human Rights and International Humanitarian Law (CARHRIHL). However, the government rejected the draft and ordered its revision. The governments revised version, on the other hand, was also rejected by the NDF for being a mutilation and cannibalization of the original draft. After a year of further negotiations, the CARHRIHL was finally approved by the NDF on April 10, 1998, and by the Philippine government on August 7, 1998. However, President Estrada reneged on the governments commitment by sending a delegation that proposed the deletion and amendment of certain articles of the already signed agreement, most important of which was placing the CARHRIHL Joint Monitoring Committee under the Office of the President.

The Struggle to Silence the Guns of Rebellion

Seeing the governments proposed amendment as a violation of the Hague Joint Declaration, the NDF withdrew from the peace talks, and Estrada later on declared an all-out-war against the CPPNPA-NDF. What was supposed to be the culmination of the first of four phases of the peace process fizzled out, causing the collapse of the peace talks. After his ouster, President Arroyo reversed this policy and reached out again to communist rebels. On February 21, 2011, under the administration of Corazon Aquino's son, Benigno Aquino III, the government and NDF peace panels issued the Oslo Joint Statement with a bold statement that the draft Comprehensive Agreement on End of Hostilities and Disposition of Forces (CAEHDF) may be completed and signed by the Panels in June 2012. The CAEHDF is the fourth phase of the peace process as laid down in the Hague Joint Declaration. The 18-month timetable set by the Oslo Statement will end two months from now. If the parties would indeed come up with a signed CAEHDF in June, it would be a reason to join in the optimism of Presidential Adviser on the Peace Process Teresita Deles that the peace talks with the NDF will end before 2016. But considering that a signed CAEHDF here would be just the first phase, rather than the culmination of a four-step, 20-year process, we can wish the government panel the best of luck, as we wonder how close to or how far from -- peace the Philippines will be for it.

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Making Mining Serve Nation and Nature

Can the state boost the resources industry, while raising tax revenues and community benefits and protecting the land?
By Libby Gallentes

STRATEGY POINTS
With a package of policy measures, the government seems bent on increasing its mining revenues and disciplining irresponsible miners There may also be a crackdown on small miners, which big ones have blamed for environmental damage and tax evasion As with any complex, broad set of policies and rules, the real challenge is sustained, consistent and strict enforcement and implementation

The Aquino administration, in seeking to upgrade the environmental standards in the industry, resolve the issue of smallscale mining, harmonize national and local regulations on mining and optimize government revenue from mining, has promised a new executive order to govern the conduct of the industry. Since President Benigno Aquino III indicated in October that he asked a group of Cabinet officials and presidential advisers to come up with a comprehensive mining policy, considerable anticipation has built up over a promised but still unreleased executive order. Originally promised by the end of February, anticipation over the anticipated executive order and the verbal jousting between mining companies and big business on one side and environmental and social activists

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over what should go in it was intense enough that the government had to promise more consultations. An urgent matter with no deadline. On March 26, the government announced that it was considering releasing a series of policies, rather than one executive order, to cover the regulation of the mining industry, as reported in The Philippine Star on March 29. According to Mines and Geosciences Bureau director Leo Jasareno, some proposed reforms, i.e., increasing the share of the government by raising taxes on mining operations, would require legislation. No target date has been set for the release of new policies regarding the mining sector, but it is still an urgent matter, Jasareno was quoted as saying. Also on March 29, BusinessWorld reported that a draft policy statement, not an executive order, has been submitted to President Aquino for approval. Whatever emerges and whenever it does the government seems set on increasing its share of revenues from mining operations, at the same time that it promises to crack down on unregistered mining operations. To be sure, the country's mineral potential has attracted many players to mining, giving rise to conflicts that manifest themselves in a host of issues, from environmental concerns and health hazards to miners and mining communities, to the open pit method preferred by large mining companies but banned by at least two provinces (South Cotabato and Zamboanga del Norte). The CenSEI Report has prepared a matrix of different broad issues surrounding the local mining industry, along with the pronouncements of various major pro- and anti-mining personalities, organized along three basic questions: 1. Has mining benefited/helped the country? 2. Does the government have the will and the capability to promote sustainable mining and environmental safeguards? 3. Has mining helped local communities? The national government, if only by necessity, finds itself in the unenviable position of having to mediate between all these disparate and oftentimes conflicting priorities. In the tangle of these various priorities, one basic conflict still stands out. Big mining vs. small miners. By law, there are two types of mining. large-scale mining moves huge volumes of earth and requires huge investments. Most large-scale mines are foreign-owned or controlled, as Filipino companies generally cannot put up the capital for such big ventures. Foreign ownership and control of the mines is allowed under special arrangements such as the Financial/Technical Assistance Agreement (FTAA) or the Mineral Production Sharing Agreement (MPSA) and other agreements provided by RA 7942. Passed in 1995 after several years of lobbying, RA 7942, the Mining Act of 1995 has withstood the review of the Supreme Court when its provisions on the FTAA were questioned by some tribal leaders. Small-scale miners (SSMs) are defined by RA 7076, the Peoples Mining Act of 1991, as Filipinos who engage individually or together with other Filipinos form a cooperative to engage in small-scale mining which rely heavily on manual labor using simple implement and methods and do not use explosives or heavy mining equipment and with a capitalization of not more than 3 million. To reserve portions of land for

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Has Mining Benefited/Helped the Country? Mining potential Pro-Mining According to a US State Department background note on the Philippines, the country's untapped mineral wealth is at over $ 840 billion. In the 1970s, minerals accounted for about a fifth of our exports. At its peak, mining contributed 24% of our total exports. Philip Romualdez Anti-Mining

Actual economic contribution

Average contribution of metallic mining to total exports 2000-2009: 2.96% ; 201: 3.7% -Christian Monsod The mineral industry is considered worldwide as a low job-generating activity. Christian Monsod Christian Monsod on mining multiplier: The mineral extractive industry is considered worldwide as a low job-generating activity.

Employment

The Chamber of Mines claims that the projected Large Scale Mining investments of $15 billion will generate 70,000 direct jobs.

Jobs multiplier

The estimated number of Artisanal and Small Scale Miners ranges from 300,000 to 500,000.

Taxes, royalties currently paid to government

e.1. For LSMs: MPSA 2% of revenues; FTAA 50% of revenues, but including all forms of taxes and royalties paid by the company.

Total government taxes, fees and royalties 19972010: 64.2 Billion; or Chamber of Mines: a proposed additional 5% tax on LSMs is a major 7.6% of Total Production disincentive for investments. values of mining companies 1997-2010: P 842 Billion. Its a bit strange why the Philippine government is not yet satisfied -Christian Monsod when it receives the highest share in the world. -Philip Romualdez Finance Secretary Cesar Purisima says the 2% e.2. For Artisanal and SSMs: No accurate data. MGB Head Jasareno excise tax under the MPSA says 80% of small-scale miners are illegal and no taxes have been is too little, and not collected from them. even enough to pay for environmental damages. Small-scale miners are smuggling gold outside the country. -Chamber of Mines Chamber of Mines proposes that SSMs be subject to the same regulations as LSMs. Chamber of Mines: if RA 7942 is implemented well and tax leaks in the SSM sector could be plugged, no additional levies would be needed as the Philippines has the same or higher levels of taxes compared to other countries.

Costs vs. benefits

The Philippine Development Plan of 2011-2016 admits that data for resource valuation are inadequate, thus conclusions cannot be drawn yet as to the value of the alternative uses of these resources. The Ateneo School of Governance policy brief, Is There a Future to Mining in the Philippines?, echoes this observation. Manny Pangilinan on developing mining sites as tourism centers Have you gone to Padcal? Have you been to Silangan in Surigao del Norte? Who would go there and develop a tourism site?

Mining involves the use of resources other than minerals such as land and water which can be used more productively in other industries such as agriculture or tourism.

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Does the Government Have the Will and Capability Promote Sustainable Mining and Environmental Safeguards? Regulating SSMs Governments Pronouncements DENR has started filing complaints against illegal miners and will issue cease and desist orders. We are already filing complaints. MGB Dir. Leo Jasareno The MGB Director says two conflicting laws on small-scale mining as well as perennial lack of government geologists are among the reasons for the difficulty in enforcing the law. Mayors of Tampakan, South Cotabato and Kiblawan, Davao del Sur prefer LSMs because SSMs are difficult to regulate. President Aquino says small-scale mining will stay but practices will be different from those of the past to avoid the repeat of mining tragedies. The local government unit said it had prohibited the return of the people but the barangay allowed them to return. Pres. Aquino, talking about a tragedy in a small-scalemining town Private Sector Perception (Both pro-mining and anti-mining advocates share mixed views about governments capability.) As Philip Romualdez revealed, smallscale mining according to a Cabinet Secretary is the new jueteng with local government executives colluding with small scale miners who more often than not pose hazards to the environment because their activities are unregulated. - Babe Romualdez Theres a need to improve the capacity and competence of the States regulatory staff. Manny Pangilinan ... government capacity for resource management is wanting ... enforcement of environmental laws and policies is inadequate... Philippine Devt. Plan 2011-2016 as quoted by Christian Monsod. If the country can implement RA 7942 well and plug the leaks in the small-scale mining sector, there would be no need for additional levies. - Chamber of Mines The LSM sector claims that their payment equalled the collectible amount and that the uncollected excise taxes are attributable solely to small-scale miners and quarrying. That may be true.... but on a longer view, there is no such correlation. Christian Monsod, on the discrepancy of potential excise taxes and actual collections for 2000-2009. In the Philippines, there is a shallow participation of the mining community in policy-making procedures. The social perception is that mining concessions are giving away the natural resources of the country and a political agenda therewith related. a respondent to the Fraser Institute Survey of Mining 20112012 The Chamber of Mines says auctioning mining rights cannot provide investors with a rational basis for determining the value of the mineral deposits which should be done before a bid is tendered.

Increasing LSMs contribution through the new EO.

On the part of the DOF, we want more share in the revenues of the mining industry. DOF Sec. Cesar Purisima, who also expressed preference for the FTAAs 50-50 revenue sharing scheme over the MPSAs 2% excise tax Some provisions (of the Mining Law) are grossly disadvantageous to the Philippine government -- DTI Secretary Gregory Domingo. He further noted that under the MPSA, government gets only 2% share of the revenues while under FTAA, government gets 50% share but that all forms of taxes are drawn on that 50%. A proposal in the EO is for all mining sites to be declared mineral reservations to enable government to collect an additional 5% inroyalties, as provided for in RA 7942, says DENR Sec. Ramon Paje. Other proposals include State-initiated exploration, the auctioning of mining rights and creating a task force against illegal mining.

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Health/ Environment

Careful implementation of RA 7942 can avert a repeat of the Marcopper accident. SMI Gen. Manager guarantees that the SMI Dams will not collapse. Landslides, soil subsidence and similar accidents are caused by rampant and unregulated small scale mining. - MGB Philex Mining considers setting up an office specifically for looking into environmental concerns. Lateritic soil is nutrient-poor, thus unsuitable for agriculture. Currently, LSMs occupy only a total of 60,000 hectares, or 2% of the countrys total land area.

Pro-Mining

Has Mining Helped Local Communities and the Poor? Anti-Mining Mercury and cyanide use is more prevalent among SSMs. A World Bankfunded study determined that SSMs of gold in selected sites in 2 provinces used from 10 to 20 times more mercury than other SSMs worldwide. The collapse of the Marcopper tailings dam In 1996 has raised fears of a repeat of similar Incidents. An environmentalist, Clive Wicks, warned that a similar accident may happen to The Sagittarius Mines project in Tampakan as it is near a fault line. The open-pit method preferred by large-scale mining entails moving massive amounts of earth, causing displacement of communities and affecting biodiversity. Open-pit mining has been banned in at least 2 provinces. Gina Lopez:: Biodiversity is irreplaceable. Mining causes landslides, tunnel collapse and similar accidents.

Social costs

LSMs are mandated by law to compensate those affected by mining operations. Permits to operate cannot be granted unless affected peoples grant their full and prior informed consent. Manny Pangilinan on Philex Minings community development in Padcal: We have a selfcontained community, we provide free housing, free hospitals, free education up to high schools and we have a post-rehab plan. Mining is prohibited in areas identified as protected areas. RA 7942 mandates the rehabilitation of old mines and mined-out areas.

Mining has deprived farmers and indigenous peoples of their farmlands.

Tribes and rural poor families have been displaced from their communities, and tribal cultures were lost because of the massive area requirements of Large-Scale Mining. Communities are destroyed because of the displacement. Mining destroys biodiversity, Mined-out areas become wastelands

Uplifting the poor

LSMs have built communities, constructed Mining has the highest poverty incidence of any schools, provided medical benefits and livelihood, sector in the country: 48%. Examples are the as in the example of Philex Mining. Bicol Region, CARAGA and Bataraza, Palawan. Christian Monsod

their small-scale mining activities that will not overlap with the mining claims of large-scale miners, RA 7076 prescribes that SSMs operate in areas designated as Minahan ng Bayan. Studies have indicated, however, that many of the so-called smallscale miners are not the pick-and-shovel miners described by the law but use more

sophisticated and mechanized equipment for ore extraction and own ball mills to refine ore. Then there are a number of unregistered, unregulated artisanal miners who operate individually or in small groups, use picks and shovels to bore tunnels into the earth

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and do not own processing equipment, particularly in the gold-rush areas of Davao in Mindanao and the Camarines provinces. Photo-journalist Manuel Domes has written in his blog about life in Diwalwal, a mining community of these small-scale and artisanal miners in Compostela Valley. The exact number of artisanal workers is not known, as estimates ranging from 200,000 to 500,000 have lumped together both artisanal and small-scale miners. The actual economic contribution of artisanal miners is also not verified, although one study by Edmund Bugnosen claims that small-scale and artisanal gold miners contribute from 50% to 80% of the countrys total gold production. This distinction is important in present regulations, as the grant of permits for Minahang Bayan operations covers only the small-scale mining cooperatives, and not the artisanal miners, who obviously need more assistance and guidance from government. There is little relationship between smallscale and large-scale miners, as pointed out by the Bugnosen study. Small-scale miners generally regard large-scale operations as rivals in extracting the ore bodies. The distinction between artisanal and small-scale miners is therefore vital to the resolution of the conflicts over mining rights mentioned in the Israel/Asirot paper between large on one end and small-scale as well as artisanal miners on the other end. The MGB statement that majority of SSMs are illegal and are the cause of mining accidents would refer to both artisanal miners and SSMs. Protecting health and environment. The concerns about health and environmental hazards from mining are not without bases. The damage done by the Marcopper tailings dam spill to waterways and farms in Marinduque province, remains fresh in the minds of many Filipinos, even though it happened over a decade ago. The National Statistical Coordination Board has published a chapter on the negative impact of mining on the environment from 1990 to 1998 and the mitigating measures expected of mining firms, as part of its Compendium of Philippine Environment Statistics, compiled under the Philippine Framework for the Development of Environment Statistics. Other studies have cited the extensive use of mercury and cyanide in refining the ore, the pollution from a tailings spill or dam collapse and the dangers of tunnelling as the most urgent and serious environmental hazards of the industry. However, while large-scale mining operations draw a lot of admittedly deserved attention when there are disasters such as the afore-mentioned Marcopper tailings dam spill and the pollution of waterways in Albay from the Rapu-Rapu mining project, small-scale mining draws attention when landslides occur in heavy rain. Almost annually, there are reports of landslides or tunnels collapsing in small-scale mining areas. The latest of these accidents occurred last January in the goldrich area of Pantukan, Compostela Valley. A random listing of these accidents include

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landslides in mining sites in Kingking, Compostela Valley last year; New Bataan, Compostela Valley also in 2011; and Loakan, Baguio City in 2008. But another less publicized danger persists. A project on the safe handling of mercury, funded by the World Bank with the Geological Survey of Denmark and Greenland and the Maximo T. Kalaw Institute, was set up in 2006 to assist small-scale gold miners and their families in selected sites in two provinces, following a study that indicated that small-scale miners of these areas used from 10 to 25 times the amount of mercury for gold extraction over the amount used by smallscale miners working elsewhere in the country. A broader study, by Danilo Israel and Jasminda Asirot for the Philippine Institute for Development Studies, that zeroed in on mercury pollution among small-scale gold miners mentions several previous studies proving the high degree of mercury pollution in popular small-scale mining areas like Diwalwal. The paper also indicated that most if not all miners reported siltation of waterways after mining operations started and that around 20% of them knew people who contracted diseases from mercury pollution. These studies indicate that

mercury and cyanide pollution is more prevalent among small-scale miners, even if these incidents involve smaller areas. Table 3 of the Israel/Asirot paper listed some of the accidents between 1993 to 1998 involving small-scale miners. (The aforementioned National Statistical Coordinating Board chapter on environment statistics quantified the number of accidents that occurred in the mining and quarrying industry between 1993 to 1998, but did not segregate accidents caused by mercury or cyanide pollution from other accidents.) In gold mining, mercury and cyanide are required to process ore. Although some forms of cyanide are less dangerous than others, in that they dissipate when exposed to sunlight over a period of time, cyanide is generally harmful to human health. The Carbon in Pulp (CIP) process that uses cyanide is more expensive to install and therefore used more often by larger mining companies, although some of the larger small-scale mining companies also use it. Open-pit vs. tunnels. The Chamber of Mines has balked at the proposal to shift from open pit to other mining methods. For one, open pit is the least expensive among mining methods, and most cost effective in extracting low-grade ore located near the surface. Small-scale miners in search of high-grade ore bodies deep in the earth use the tunneling method because the open-pit method entails greater costs and because mining low-grade ore, which is usually nearer the surface, would not be economically feasible for them. Just a matter of collecting from small-scale miners? The large-scale

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Mining in the Philippines (Part 2): More fun or just the pits

mining companies, as represented by the Chamber of Mines, maintain that they are paying enough in excise taxes, and all that is needed for the government to do is to plug the tax leaks in the small-scale mining sector and collect from the small-scale miners. Christian Monsod, in his presentation on mining as a social justice issue at the March 2 forum on mining, refutes that argument by saying that while that claim might have been accurate for 2008 and 2009, from 1997 to 2007, there is no such correlation between the discrepancy of potential excise taxes and actual collections for 2000-2009. Actual collections for 6 of the 11 years are lower than the collectibles from LSM ranging from 4%-36%, he elaborated.

Monsod might have been correct in catching the large-scale miners' attempt to oversimplify the issue. The government should regulate small-scale miners and collect proper taxes from their activity and help protect them and the environment from their hazardous ore-extraction methods, it should be acknowledged, but that is an entirely separate matter from whether large-scale mining operations are contributing their fair share to the national government. In part 3, The CenSEI Report will examine the other factors surrounding mining rights in the country, including land ownership and ancestral domain, large-scale mineral exploration, and how large- and small-scale mining operations get tangled up in regulation.

Academicians wondering aloud

A policy brief, Is There a Future to Mining in the Philippines?, published by the Ateneo School of Government following an academic conference in November, states that conflicts in the industry are related to land use, benefits derived from mining and their distribution, social and environmental costs, government regulation plus a special concern for small-scale mining. This policy brief sets out to answer ten very basic questions related to mining and governance: 1. What is the nature of mining in the Philippines? 2. Why does mining generate conflicts? 3. s mining beneficial to the country and to indigenous and local communities? 4. What are the real costs of doing mining in the Philippines? 5. How do we understand risks and conduct a cost-benefit analysis? 6. What is responsible mining, as applied to the Philippines? 7. What operational conditions must be met to conduct responsible mining in the Philippines? 8. What actions must the government take towards the management of responsible mining? 9. What interim measures must the government take while appropriate mining governance is instituted? 10. What is the future of mining in the Philippines? The document's prescription the government should declare a moratorium on mining until it can establish a responsible and sustainable governance environment for mining might be considered unrealistic and impractical by some, but the process by which it arrives at its recommendation can nonetheless provide solid guidance for parties interested in achieving consensus.

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NEWS ON THE NET

Nation
Pacquiao, senators hit BIR 'harassment'
Senators Ramon Bong Revilla Jr. and Ralph Recto came to the defense of Sarangani Rep. Manny Pacquiao after the Bureau of Internal Revenue (BIR) filed a criminal case against the boxing icon for violation of Section 266 of the National Internal Revenue Code, for failure to obey summons and not being able to produce books of accounts, records, memoranda or other papers, or to furnish information to the Bureau. Seeing this move as harassment, Pacquiao accused the BIR of bad faith for trying to single him out. Internal Revenue Commissioner Kim Henares, however, clarified that they did not accuse Pacquiao of anything yet and were only investigating whether he could be liable for tax evasion. Arguing that the congressman deserves a better treatment, Recto said that the BIR should just run after Pacquiao's earnings from commercial endorsements and other local income-generating activities instead of trying to check on his income from boxing, which has already brought in taxes which could not be equaled by the people running the Bureau. Revilla, on the other hand, added that if the BIR is certain about Pacquiaos violations, it should just take the necessary actions by filing the necessary charges against him and not shame people publicly and make circuses out of their circumstances. such power is self-terminating, and that it is not a perpetual sort of authority, you use it when you need it.

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Aquino thumbs down emergency powers

Despite his admission that it was the governments neglect that caused the impending power crisis in Mindanao, President Benigno Aquino III stressed that At this time, Im not sure if emergency powers are what are needed. This in response to proposals by his allies in Congress that he be granted emergency powers to address the rotational brownouts on the countrys second-largest island, some even lasting up to 15 hours a day. Senator Antonio Trillanes IV and Rep. Rodolfo Biazon were among the lawmakers who filed bills in their respective chambers to grant the president emergency powers similar to those granted President Fidel Ramos during the power crisis in 1992. Citing the efficiency with which Ramos solved the 1992 power crisis, Vice President Jejomar Binay defended moves to grant Aquino the same power to make it easier for the government to directly address the current power shortage in Mindanao. Ramos, however, reminded Aquino that

Ampatuan, Abalos plead not guilty to poll sabotage

Former Maguindanao Governor Andal Ampatuan Sr. and former Commission on Elections Chairman Benjamin Abalos pleaded not guilty to charges of poll sabotage in connection with the 2007 elections. The two arrived in the morning of March 26, 2012 for their arraignment before Judge Jesus Mupas of Branch 112 of the Pasay City Regional Trial Court. Their co-accused, Pampanga Rep. Gloria Macapagal-Arroyo, already entered her not-guilty plea on Feb. 23, 2012. The case stemmed from a joint Comelec-DOJ investigation that implicated Ampatuan, Abalos, and Arroyo in massive cheating during the 2007 elections. Arroyo was arrested on Nov. 18, 2011, and is currently under hospital arrest at the Veterans Memorial Medical Center, while Abalos was arrested on Dec. 14, 2011, and has since been detained at the Southern Police District headquarters. Ampatuan, on the other hand, has been under detention for multiple murder charges in the separate Nov. 2010 Maguindanao massacre case.

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The Constantly Connected Club

After Gen X, Y and Z, meet Generation C
By Joanne Angela B. Marzan

STRATEGY POINTS
A new generation is emerging, perpetually online and multi-tasking through a variety of digital devices While multi-tasking might be increasingly common, especially among the young, some studies warn of the dangers of multi-tasking, including brain damage

Britney, 18, is your average American teenager. She watches American Idol on TV (preparing to vote for her favorite contestant via SMS), views the latest video of Justin Bieber on YouTube, uploads new photos of herself to Facebook, and tweets what shes doing at that moment over her laptop.

This digital behavior among Americans 1834 years old, according to the 2011 Nielsen and NM Incites U.S. Digital Consumer Report, best describes Nielsens newly dubbed Generation C. (T)his group is taking their personal connectionwith each other and content

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to new levels, new devices and new experiences like no other age group, said the report. The latest Census reports that Americans 18-34 make up 23 percent of the U.S. population, yet they represent an outsized portion of consumers watching online video (27%), visiting social networking/blog sites (27%), owning tablets (33%) and using a

smartphone (39%), as the report explains and the chart below shows. Data coming from the Nielsen-NM Incite study revealed that next to the computer (95.7%), the Smartphone (58.8%) is the second most common device used by Generation C to access socialnetworking sites. The gaming console is a far third with 5.3%, while 4.5% of

GENERATION C: HERE, THERE AND EVERYWHERE

TV VIEWERS
49% 51% 23% 23% 21% 20% 14% 16% 73% 13% 6%

MALE FEMALE 2-17 18-34 35-49 50-64 65+ HISPANIC WHITE BLACK, AFRICAN-AMERICAN ASIAN OR PACIFIC ISLANDER

TABLETS ARE THE ONLY DIGITAL CATEGORY WHERE MALES MAKE UP THE MAJORITY

ONLINE VIDEO VIEWERS

47% 53% 14% 27% 28% 22% 10% 12% 78% 11% 3%

MALE FEMALE 2-17 18-34 35-49 50-64 65+ HISPANIC WHITE BLACK, AFRICAN-AMERICAN ASIAN OR PACIFIC ISLANDER

TABLET OWNERS
53% 47% 11% 33% 29% 21% 7% 15% 60% 11% 9%

MALE FEMALE 13-17 18-34 35-49 50-64 65+ HISPANIC WHITE BLACK, AFRICAN-AMERICAN ASIAN OR PACIFIC ISLANDER

SOCIAL NETWORK/BLOG VISITORS

46% 54% 13% 27% 28% 22% 9% 12% 79% 10% 3% 2-17 18-34 35-49 50-64 65+

MALE FEMALE

SMARTPHONE OWNERS
50% 50% 6% 39% 30% 20% 6% 17% 67% 12% 6%

MALE FEMALE 13-17 18-34 35-49 50-64 65+ HISPANIC WHITE BLACK, AFRICAN-AMERICAN ASIAN OR PACIFIC ISLANDER

HISPANIC WHITE BLACK, AFRICAN-AMERICAN ASIAN OR PACIFIC ISLANDER

Source: http://www.slideshare.net/ceobroadband/state-of-the-media-us-digital-consumer-report-q3q4-2011

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Generation C respondents prefer the iPad, a relatively new device, for accessing socialnetworking sites. But what exactly are the youth doing that they need to be connected 24/7? Using new media to hang out. A November 2008 joint research project by the University of Southern California and the University of California, Berkeley, Living and Learning with New Media: Summary of findings from the Digital Youth Project, provides an answer: The majority of youth use new media to hang out and extend existing friendships. Aside from this, the research added that new media allows the youth to be always on and to be in constant contact with their friends through private communications like instant messaging or mobile phones, as well as in public ways through social network sites such as MySpace and Facebook. But apparently, not everyone goes online for a reason. According to a Dec. 2011 Pew Internet & American Life Project report, "The Internet as a diversion and destination," to report that a staggering 81% of 18-to-29-yearold Americans go online for no particular reason, just for fun or to pass the time. This trend, however, has been steadily increasing since 2000, with occasional dips, across the board.

ONLINE FOR NOTHING IN PARTICULAR AND EVERYTHING INBETWEEN

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 47% 35% 29% 18% 6% 23% 81%

66% 58% 50% All adults 18-29 30-49 50-64 65+

20 00

20 01

20 02

20 03

20 04

20 05

20 06

20 07

20 08

20 09

20 10

Across the board, the percentages of all adults going online for no particular reason/just for fun/to pass the time has doubled from 29% in 2000 to 58% in 2011.
Source: The Internet as a diversion and destination, Lee Rainie, Pew Internet & American Life Project, Dec. 2, 2011.

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Dissecting Facebook status updates

In 2010, Facebook analyzed one million Facebook status updates of US English speakers to find out what exactly they were talking about. [W]e looked at the usage of words in different word categories in status updates. This led us to discover some patterns in how people use status updates differently, and how their friends interact with different status updates, said Facebook data-science intern Lisa Zhang in the December 23 article, Whats on your mind? The study turned up the following interesting findings: Younger people express more negative emotions (including anger) and swear more. They use more pronouns referring to oneself (I, my, etc.) and talk more about school.

Older people write longer updates, use more prepositions and articles, and talk more about other people, including their family.

People with more friends tend to use more of the pronoun you and other second person pronouns. They write longer updates, and use more words referring to music and sports. They also talk less about their families, are less emotional overall, use fewer past tense and present tense verbs and words related to time.

Emotional content of status updates depends on the time of day. Positive emotional word use is higher in the mornings, when the corresponding usage of negative emotional words is low. Negative word use increases as the day goes on, as positivity decreases.

The Pew Internet & American Life Project report attributes the upsurge to a number of factors: the rise of broadband connections, the increasing use of video because of the rise of broadband connections, and the explosion of social networking, which reflects the growing trend of using the Internet for fun. A multitasking generation. According to the 2006 study, Media Multitasking among American Youth: Prevalence, Predictors and Pairings, by Ulla G. Foehr, Ph.D., Anecdotal evidence suggests that media multitasking, or engaging in more

than one media activity at a time, is a common occurrence (p.1). Foehr added, New technologies, such as the computer, appear to foster obsessive multitasking, namely constantly switching between such activities as instant messaging (IM), email, ordering a book online and catching a quick headline (p.1). Hence, the result of Foehrs study of 3rd12th graders (through a media diary) and 7th12th graders (through a survey, revealed that young people who are most prone to multitask are: those who are

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Multi-tasking across various screens

Another revealing finding of the 2011 U.S. Digital Consumer report is that consumers are multi-tasking across their various screens. In fact, the report showed that 57% of tablet and Smartphone owners checked email, 44% continued to surf the Internet, and another 44% logged on to a social-networking site while the TV was on (the report also showed that the figures were the same whether a program was on or on a commercial break). Just as noteworthy is the finding that while watching TV, 29% of owners looked up information related to the TV program they were watching, 19% looked up product information for an ad they saw, and 16% searched for coupons or deals related to a TV advertisement.

57% 44%
WHAT ARE TABLET AND SMARTPHONE OWNERS DOING WHILE WATCHING TV?

CHECKED EMAIL SURFED FOR RELATED INFO VISITED SOCIAL NETWORKING SITE

44%

DURING PROGRAM

59% 44% 44%

CHECKED EMAIL SURFED FOR RELATED INFO VISITED SOCIAL NETWORKING SITE

DURING COMMERCIAL

TOP WEBSITES VISITED WHILE WATCHING TV 1. Facebook 2. YouTube 3. Zynga 4. Google Search 5. Yahoo! Mail 6. Craigslist 7. eBay 8. Electronic Arts (EA) Online 9. MSN/Windows Live/Bing 10. Yahoo! Homepage

Source: http://www.slideshare.net/ceobroadband/state-of-the-media-us-digital-consumer-report-q3q4-2011

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exposed to the most media, those who are sensation seekers, those who live in highly TV-oriented households, and girls. These characteristics seem to point to two factors that may drive media multitasking: a need, or a motivation, to media multitask (to fit in everything they want to do), and the opportunity to media multitask, said the report (p.23). Multitasking may damage your brain. University of Michigan Brain, Cognition and Action Laboratory Director David E. Meyer said in a May 2006 Time article that the ability to multiprocess has its limits, even among young adults. Meyer said that people who try to perform two or more related tasks are more susceptible to errors and the amount of time to finish a task takes much longer.

"The toll in terms of slowdown is extremely large--amazingly so," Meyer warned. "If a teenager is trying to have conversation on an e-mail chat line while doing algebra, shell suffer a decrease in efficiency, compared to if she just thought about algebra until she was done, explained Meyer. In an experiment conducted by Carnegie Mellon Universitys Dr. Marcel, he tested the brains ability to do two things at once. His findings revealed, Overall brain activity decreases when people try to do two things at the same time. In a 2009 Stanford University study, conducted by Professors Clifford Nass, Eval Ophir and Anthony Wagner, 100 students divided into heavy and light multitaskers were given three tests that measured how

YOUR BRAIN ON MULTI-TASKING

Language Comprehension Subjects listened to complex sentences and had to answer true/false questions. Object Rotation Task Subjects had to compare pairs of three-dimensional objects and rotate them mentally to see if they were the same. Object Rotation + Language Comprehension Task Subjects performed both tasks at the same time.

Temporal lobes

Temporal lobes

Source: Column Five Media for Rasmussen College

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well they can filter out irrelevant information, organize their memories, and switch from one instruction to another. The study revealed that low multitasking individuals performed better than their highmultitasking counterparts in all of the tests. "We kept looking for what they're better at, and we didn't find it," said Ophir. In addition, according to a Stanford press release, the researchers are still trying to figure out if chronic media multitaskers are born with an inability to concentrate or are damaging their cognitive control by willingly taking in so much at once.

Eating and social media: An unlikely pair

According to the 2012 study, Clicks & Cravings: The Impact of Social Technology on Food Culture, by Hartman Group, social media and food is emerging to be an unlikely multitasking pair. Consumers virtually break bread by sharing their food experiences, uploading photos and posting stories, said the study. Below are some of the most interesting findings of the Hartman Group study when it comes to the multitask pairing of eating and accessing social networking sites:

29% of online consumers have used a social networking site while eating or drinking at home in the last month 19% of online consumers used a social networking site while eating or drinking away from home 32% of consumers have either texted or used a social networking site or app in the last month while eating or drinking 47% of Millennials (Generation Y) have either texted or used a social networking site or app in the last
month while eating or drinking In addition, the study added, While lunch is by far the most common locus of online-social eating, this activity otherwise happens evenly throughout the day. Based on a 2011 University of Hafia study conducted by Professors Yael Latzer and Ruth Katz of Haifa unis Faculty of Social Welfare and Health Sciences and Zohar Spivak in Israel, constant access to Facebook may have dire health consequences for adolescent girls. The study surveyed a group of 248 girls aged 12-19 on their Internet and television viewing habits. Results showed that the more time girls spend on Facebook, the more they suffered conditions of bulimia, anorexia, physical dissatisfaction, negative physical self-image, negative approach to eating and more of an urge to be on a weight-loss diet, it was reported in a February 7 University of Hafia press release.

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Booz & Companys Generation C: Always clicking

In 2010, a year before Nielsen and NM Incites U.S. Digital Consumer Report, global management consulting firm Booz & Company released its own study, The Rise of Generation C: Implications for the World of 2020. In its study, Booz & Company describes Generation C those born after 1990 and lived their adolescent years after 2000 as connected, communicating, content-centric, computerized, community-oriented, always clicking. By 2020, Generation C will comprise 40% of the population in the U.S., Europe, and the BRIC countries (Brazil, Russia, India and China), and 10% of the population in the rest of the world, enough to make it the largest group of consumers worldwide (p. 2). According to Booz & Company, Generation C will transform the world, and their interests will help drive massive change in how people around the world socialize, work, and live their passions and in the transformation and communication technologies they use to do so. The digital natives of Generation C, the study predicts, will live online most of their waking hours, comfortably participate in social networks with several hundred or more contacts, generate and consume vast amounts of formerly private information, and carry with them a sophisticated personal cloud that identifies them in the converged online and offline worlds. (p. 1) The study proceeds to discuss how different aspects of life in the coming decade from consumer behavior to entrepreneurship in the developing world will likely be affected, as business, society, and technology develop to accommodate the rise of Generation C.

TIMELINE OF THE UPCOMING DECADE: CONNECTIVITY GALORE

Booz & Companys vision of the decade to come, when just about everything will be wired, just in time for Generation C, who will still be under 30 by then, to come into its own
Source: The Rise of Generation C: Implications for the World of 2020, Booz & Company, 2010, p. 16.

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Opportunity and a challenge. The aforementioned 2011 U.S. Digital Consumer Report asserts that Generation C poses an opportunity as well as a challenge for both marketers and content providers. Opportunity, because theyre always online and have dual or even multiple devices, making them easier to reach. Challenge, because they multitask, flitting about from one activity to another. Advertisers will probably like this stat out of the Nielsen report: 19% of smartphone and tablet owners also searched for product information and 16% looked up coupons or deals while the television was on. This makes us perfect targets for ads, but also so used to a constant onslaught of information while multitasking that we can be incredibly adept at filtering out the data we don't care about, affirmed CNET Associate Editor Emily Dreyfuss in the

Generation C: Always connected

February 23 article, The Challenge of Wooing Generation C, posted on the CNET website. So while it remains to be seen how Generation C will affect marketers and content providers alike, the summary of findings from the aforementioned Digital Youth Project of two California universities offers a positive perspective on the fascination and dedication of the youth on digital media. The research shows that todays youth may be coming of age and struggling for autonomy and identity amid new worlds for communication, friendship, play, and self-expression, the study said. Having said that, the digital world is creating new opportunities for youth to grapple with social norms, explore interests, develop technical skills, and experiment with new forms of self-expression.

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Pope calls for greater freedoms in Cuba
Pope Benedict XVI last week ended his visit to Cuba by speaking out and referencing a need for "authentic freedom." The religious leader also met with revolutionary icon Fidel Castro and called for an end to the U.S. trade embargo against Cuba. The 50-year embargo was put in place to topple the island's communist government; thus far it has impacted Cuban citizens' economic and social rights heavily. At the start of his visit while still aboard a flight from Rome the pope denounced the violence caused by the drug war in Mexico (which recently visited), and criticized Cuba's Marxist political system. Pope Benedict XVI's homily at the open-air Mass held last Wednesday was less forceful and critical, focusing more on religious openness.

29

World

announced plans for a long-range rocket launch. North Korea claims the launch in April will only set a satellite into orbit for scientific purposes, but the U.S. insists that it will be a long-range missile test. President Benigno Aquino III last week urged North Korea to forego the launch, saying he may raise the issue at the 20th Asean summit in Phnom Penh this week. This is in connection with worries that the rocket debris may go down and hit Philippine territory. Japan has also reacted, saying it will shoot down a North Korean rocket if necessary.

He also met with President Barack Obama to discuss his concerns, and even testified before the U.S. Senate about the humanitarian crisis along the border of the two African countries.

Activists see no signs of Syria following peace plan

Though Syria has agreed to a U.N.-backed peace initiative, there is no evidence that the regime is carrying out the plan. Last Wednesday at least 26 people were killed in a clash, adding to the bleak U.N. estimate of more than 9,000 killed since March 2011. Syrian President Bashar al-Assad has said that he will support Kofi Annan's peace plan, but that it will not work if what he calls "terrorist groups" continue to receive outside support. This reaction has been fueled by reports of Saudi Arabia seeking to provide weapons and the U.K. aiming to double non-military aid for the resistance fighters. Syria blames "terrorists" for violence in the country, though most reports suggest that the government is killing civilians even children in order to wipe out dissidents. The U.N. is determined to stick to the peace plan, and has begun planning for the negotiated monitoring mission to be sent to Damascus.

Sudan and South Sudan could slide back to war

World powers are warning that Sudan and South Sudan may be sliding back toward war, amid reports that Sudan is bombing South Sudan, which gained independence in 2011 after years of civil war over oil-rich territory. The U.S. has called for a halt in military activities in the area. The European Union echoed a similar sentiment, while the U.N. and the African Union have urged the leaders of the two African countries to convene for talks before another war begins. Actor and outspoken activist George Clooney was arrested this month for protesting outside the embassy of Sudan in Washington.

U.S. confirms suspension of North Korea food aid plans

The U.S. has confirmed that it has suspended planned food aid to North Korea. The food assistance was part of a missile test moratorium deal the two countries agreed upon last February. The suspension came after Pyongyang

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By Ricardo Saludo

Report

Mindanao blackouts and rising power costs nationwide burden families and industries. What can be done?
First, the good news: Mindanaos eighthour blackouts may end next month. Thats the hope of Energy Secretary Jose Rene Almendras. Assuming nothing else goes wrong, he told media, no plant breakdowns, no equipment mishaps then sometime in May we will be able to handle the situation. Still, the former banking and water services CEO isnt minimizing the gravity of the problem. We admit responsibility, Almendras declared. I won't have problems if I'm asked to resign, because I'm here to serve the nation. If the President says he has no confidence in me, then I will resign. The islands daily power interruptions have prompted no less than President Benigno Aquino III to call for summit on the crisis in April. His Congress allies pushed emergency powers for him to address the crisis, though senators and even Sec. Almendras are unsure about the idea. The latter now says maintenance work on power plants will finish before June. Thats also the time Mindanao hydroelectric dams, which account for half the islands power capacity, begin filling up and generating again after the dry season. Now, the bad news: Assuming the lights go on again sometime in coming weeks, there will be higher electricity charges all

STRATEGY POINTS
The Philippines needs investors to add 15,500 megawatts of capacity between 2009 and 2030. Thats the priority, more than cutting charges Mindanaos lower rates and much smaller market than the Luzon-Visayas interconnected grid make power producers head north instead Global power investment is down due to world economic woes, but with the right policies, the Philippines can attract generating firms

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across the archipelago starting this month, by about 10% from the March 26-April 25 billing period. The Energy Regulatory Commission (ERC) approved rate hike petitions from National Power Corp. (NPC) and Power Sector Assets and Liabilities Corp. (PSALM), which runs some generating plants, for increases of 69.04 centavos/kilowatt-hour in Luzon, 60.60 in the Visayas, and 4.42 in Mindanao. The increase covers higher Napocor expenditures in 2007-10 under the Generation Rate Adjustment Mechanism (GRAM) and Incremental Currency Exchange Rate Adjustment (ICERA). The approved rise would raise NPCs effective rates by about one-seventh or about 14% to 5.7064/kwh in Luzon, with corresponding charges of 4.68 in the Visayas, up 14.9%, and 2.9763 or 15.1% more in Mindanao. According to a Department of Energy (DOE) paper on power sector reforms, the cost of generating power accounts for

over 70% of total electricity charges, with transmission and distribution comprising roughly 8% and 20%. Applying those ratios, the new NPC generation charges would add about 10% to the typical power bill if all its power comes from Napocor. Thats 1,000 more per month for a family or firm paying 10,000 when the April bill arrives next month. Asias biggest electric bill. Clearly, the burden on Filipino families and industries of having the among the highest electricity costs in Asia, not to mention the deterring effect on investors, looks set to get worse. Already, Manila and Cebu rank third- and second-highest in per-kwh costs as reported in the April 2011 business costs survey of Japan External Trade Organization (JETRO). Singapore power a bit dearer (see electricity rate table next page), but the entrepot offers so many pluses to offset the slightly higher power cost.

NPC and PSALM Rate Increases Starting April

IN YOUR BILL NEXT MONTH

ICERA Rate (PhP/kWh) 0.3637 0.1213 (0.0094)

Grids Luzon Visyas Mindanao

Gram Rate (Php/kWh) 0.3267 0.4847 0.0536

Totral 0.6904 .6060 0.442

Source: ERC press release on NPC and PSALM rate adjusments

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CHARGING THROUGH THE NOSE
Business Rate
18-19 12-13 12-13 12 12 9 8 2.8-9.9 6 13 18

Electricity Rates in JETRO Survey of Investment-Related Costs Singapore Cebu Manila

U.S. cents per kilowatt-hour

General Rate
20 19 12-15 7 6 23

Hong Kong Beijing Taipei Shanghai

9.3-9.4

Bangkok Kuala Lumpur Jakarta Seoul Hanoi

8-11

7-17 7-15 9 7

3.4-10.7

Source: JETRO Survey of Investment-Related Costs, April 2011

Indeed, expensive electricity is one reason why the Philippines ranks lowest among the five original members of Association of Southeast Asian Nations (ASEAN) as well as the tiger economies of Hong Kong, Korea and Taiwan in the profitability of Japanese businesses in these countries. In another JETRO report, Survey of Japanese-Related Firms in Asia and Oceania, published just last October, charts on page 7 show that about six out of every 10 Japanese companies in the Philippines achieved surpluses last year, below the 70% and higher ratios in the other ASEAN and tiger economies. For its part, the Arangkada Philippines report published in December 2010 by the Joint Foreign Chambers of Commerce in the Philippines, also cited high power rates as a major stumbling block to investment and business expansion, as its backgrounder and charts on electricity show (see chart right above). Why Mindanao is power-starved. Energy czar Almendras notes that Luzon

Residential Power Rates, US$/kw 20 18 16 14 12 10 8 6 4 2 0

Philippines
(Manila)

(Tokyo)

Japan

Singapore

Thailand

Mala

Luzon Energy Sales land Peak Demand Average Annual Growth Rate, 2009-2030 Period Energy Sales, GWH 41,275

Base year 2008 (Actual Level) 2009 2018 2030 AAGR

Peak Demand, MW 6,822 7,038

42,768 109,477 4.53 % 64,303

10,393 17,636 4.3 %

2009-2018

2019-2030

4.53

4.51

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has a generating capacity reserve of 2,000 megawatts, while Visayas has 500 MW excess power. Why is it in Mindanao we are short? he sighed. In very simple terms, because people stopped building generating plants in MIndanao. How did that happen? Its a long story, and its not over yet, especially with the country needing an additional 15,500 MW of generating capacity by 2030, by DOEs forecast. Thats nearly as much as the current installed capacity of 16,350 MW nationwide as of 2010, and more than

double the 7,000 MW of projects approved so far, with 3,771 MW under consideration. In sum, we have much catching up to keep more blackouts away. As the tables below show, DOEs Power Development Plan, 2009-2030 forecasts: By 2030, the countrys energy sale is projected to increase from 55,417 GWh [gigawatt-hours] in 2008 to 86,809 GWh by 2018, up to 149,067 GWh by 2030. These are translated to peak demand from 9,226 MW in 2008 to 14,311 MW by 2018, to about 24,534 MW by 2030.

WHEN BEING FIRST ISNT GOOD

Industrial Power Rates, US$/kwh 16 14 12 10 8 6 4 2 0

wh

aysia

Indonesia

Vietnam

Singapore Philippines Philippines s

(Manila)

(Tokyo)

Japan

Thailand

Malaysia

Korea

Vietnam Indonesia

Source: International Energy Consultants, cited in Arangkada Philippines report on power

OUR SURGING HUNGER FOR POWER

Visyas Energy Sales land Peak Demand Average Annual Growth Rate, 2009-2030 Period Energy Sales, GWH 6,565 Mindanao Energy Sales land Peak Demand Average Annual Growth Rate, 2009-2030 Period Energy Sales, GWH 7,578

Base year 2008 (Actual Level) 2009 2018

Peak Demand, MW 1,176

2030

10,601 %

6,857

1,331

Base year 2008 (Actual Level) 2009 2018

Peak Demand, MW 1,228

AAGR

19,121 4.91

1,887 %

3,404 4.89

2030

2009-2018

AAGR

20,470 4.62 %

11,904

7,966

2,031

1,887 %

3,493 5.18

2019-2030

5.04

5.04

2009-2018

2019-2030

4.62

4.62

Source: DOE Power Development Plan, 2009-2030, pages 2-3

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Besides supplying future demand, about two-fifths of present facilities must be replaced over the next 18 years. Thus, in less than a generation the Philippines needs to install nearly as much generating capacity as we have now. Or else: darkened homes, offices, shops and factories, and stunted economic growth, as the nation suffered under the first Aquino administration. Current and forecast data partly explain why power producers prefer to set up in Luzon than Mindanao. At NPCs new Luzon rate of 5.70/kwh, powering the largest Philippine island grosses nearly double the approved Mindanao charge of 2.98. Thus, Luzon offers a 91% revenue gain over Mindanao, and the Visayas a 57% advantage, assuming new plants have to be competitive with NPCs charges. Moreover, for investors seeking the profitability of future demand growth, it is significant that the expected increase in Luzon power sales of nearly 22,000 GWh

between 2009 and 2018 exceeds the entire projected 2030 consumption in Mindanao of 20,470 GWh. Unless there are incentives to offset such price and demand advantages, electricity producers will go north. Put generation before competition. Then there is the electricity policy environment itself, which affects current and prospective power producers all over the country. For Professor Rowaldo del Mundo and Edna Espos of the University of the Philippines National Engineering Center (UP-NEC), the key problem is one of priorities. In their 2010 study, Philippine Electric Power Industry Market and Policy Assessment, supported by both UPNEC and UP Engineering Research & Development Foundation, Del Mundo and Espos found critical disincentives to generation investments even in the Luzon grid, on which their study focused. And several of their key recommendations aimed

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to provide power producers the security of long-term supply contracts with limited spot-market volatility. In particular, the report urged deferring retail competition in the power sector until there was adequacy of generation, transmission networks, and customer switching systems; and ... promulgation by the ERC of all pertinent rules and regulations governing retail competition and open access. In short, getting enough power plants installed should be put ahead of lowering rates through free competition. The UPNEC experts cited two countries with successful power sectors: The sequencing

of policy reform in Chile and Brazil prioritized generation adequacy over market liberalization. However, ordinary Filipinos burdened by rising prices but not by long daily blackouts will not warm to policies that prioritize attaining needed generating capacity over bringing down power rates. National leaders must convince the public that, as SMC Power boss Alan Ortiz remarked, the most expensive power is no power. Blackouts hut down businesses, deter investors, and even endanger lives. Thats far more expensive than even high-priced electricity. The coming capacity crunch. Which is why its important to keep watch on the

Projected Electricity Usage (MWh) and Required Generating Capacity (MW), 2011-30

LUZON PLUGS IN

YEAR

Low Economic Growth MW 7,487 8,093 8,958 9,960 11,122 MWh* 46,742,269 50,522,013 55,920,626 62,179,097 69,434,382

*Estimated based on 2009 Load Factor of Luzon Grid (71.26%)

2011 2015 2020 2025 2030

Moderate Economic Growth MW MWh* 7,581 47,327,033 8,641 53,943,104 10,292 64,252,883 12,400 77,411,064 15,090 94,204,608

High Economic Growth MW 7,675 9,232 11,877 15,585 20,787 MWh* 47,911,797 57,635,019 74,142,908 97,296,077 129,769,595

Source: Philippine Electric Power Industry Market and Policy Assessment, UP-NEC, 2010, page 22

Luzon Grid Projected Power Capacity and Demand, Reserve Ratio and Load of Loss Expectation Days, 2011-14

GET READY FOR BLACKOUTS

Demand (MW) 7581 7827 8085 8356

YEAR 2011 2012 2013 2014

Capacity (MW) 9583 9624 9657 9657

Reserve (%) 26.41% 22.96% 19.44% 15.57%

LOLE (Days/Yr) 5.07 12.08 5.27 82.27

Source: Philippine Electric Power Industry Market and Policy Assessment, UP-NEC, 2010, page 35

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countrys generating plants, which must maintain a safe reserve of unused capacity above peak demand. The UP-NEC paper forecast megawatt-hours consumed and the required MW capacity needed to meet demand in Luzon, where some threequarters of economic output is produced. Low, moderate and high economic growth scenarios were used to estimate future generating needs if gross domestic product rose by 3%, 5% and 7% a year (see Luzon Plugs In table previous page). To maintain a loss of load expectation (LOLE) of one blackouts day in a year, the reserve or excess capacity should be 28.7% of peak demand. The present 2,000 MW reserve is about 26%, with LOLE of five days a year. At medium GDP growth and with just 75 MW of new capacity coming on stream, the UP study expected the reserve ratio to fall to 15.57%, leading to 82 LOLE days in Luzon (see power demand and reserve table below). Thats nearly three months of power outages just two years from now. If DOE isnt as worried as UP-NEC, its because its updated 2010 list of existing plants estimated Luzons total installed capacity at nearly 12,000 MW, with about 10,500 MW rated as dependable. Plus: a 600-MW plant in Mariveles, Bataan, is due to be finished by GN Power before the end of this year, going by the list of committed plants on page 3 of the departments Power Development Plan, 2009-2030. That should keep Luzon blackouts tolerable for several more years.

Philippine Consumption (GWh) and Capacity (MW), 2009-2020

ELECTRIFYING THE DECADE

2011 19,467 133 19,103 16,887 5,748 61,339 5.3% 12,244 0 3,571 3,897 2,392 7 53 19,712 2012 20,504 141 19,986 18,133 5,990 64,754 5.6% 12,994 0 3,751 4,526 2,990 8 83 21,271 2012 21,644 149 20,905 19,350 6,251 68,301 5.5% 13,794 0 3,941 5,155 3,588 9 113 22,890

Consumption Industry Transport Residential Commercial & public service Other TOTAL Annual Growth Capacity Coal/Gas/Oil Nuclear Hydro Non-hydro renewables Geothermal Solar Wind Net maximum

2009 (GWh) 17,350 118 17,439 14,702 5,345 54,954 3.4% (MW) 10,941 0 3,361 2,680 1,196 7 33 16,982

2010 18,600 125 18,251 15,762 5,533 58,272 6% 11,557 0 3,421 3,278 1,794 7 33 18,256

2014 22,900 158 21,865 20,641 6,531 72,095 5.6% 14,674 0 4,414 5,789 4,186 10 148 24,604

2015 24,247 168 23,078 22,013 6,835 76,341 5.9% 15,584 0 4,341 6,424 4,785 11 183 26,349

2020

222 28,212 30,223 8,527 99,199 5.3% 20,844 0 6,141 11,074 8,785 31 813 38,059

Economist Intelligence Unit table; EIU estimates for 2009-10; EIU forecasts for 2011-20

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COMMITTED GENERATING PLANT PROJECTS, 2010-2014

Grid Luzon Visayas Project Name 2x300MW Coal-Fired Power Plant Sub_total Luzon 3x80MW CFB Power Plant Expansion Project Capacity (MW) 600 600 240 Target Completion 4th Qtr. of 2012 Location Marovele, Bataan Proponent GN Power

2x100MW Cebu Coal-Fired Power Plant 17.5MW Panay Biomass Power project Nasulo Geothermal Plant 2x80MW CFB Power Plant

200 17.5 20 160

Mindanao

Sub-total Visayas Sibulan Hydroelectric Power (Unit I-16.5MW) (Unit II-26MW) Cabulig Mini-Hydro Power Plant Mindanao 3 Geothermal

638 43 8 50

Unit I-March 2010 Brgy. Daanlungsod, Cebu Energy Unit II-June 2010 Toledo City, Cebu Development Unit III-Jan 2011 Corporation (Global Business Power Corp.) Unit 1-Feb 2011 Naga, Cebu KEPCO SPC Power Unit 2-May 2011 Corporation (KSPC) 2011 Brgy. Green Power Panay Cabalabaguan, Phils., Inc. Mina, Iloilo 2011 Nasuji, Valencia, Energy development Negros Oriental Corporation Unit I-Sep 2010 Brgy. Igore, La Paz, Panay Energy Unit II-Dec 2010 Iloilo Development Corporation (Global Business Power Corp.) Unit I-Feb 2010 Unit II-Apr 2010 June 2011 July 2014 Sta. Cruz, Daval del Sur Plaridel, Jasaan, Misamis Oriental Kidapawan, North Cotabato Hedcor Sibulan, Inc. Minadano Energy Systems, Inc. (MINRGY) Energy Development Corporation

Philippines

Sub-total Mindanao

101 1,338

Source: Tables from Power Development Plan, 2009-2030, DOE, 2009, pages 3-4

But matching power capacity and demand means getting two volatile vectors to converge with an adequate reserve between them. That requires juggling varying consumption forecasts by experts, even more variable generating plans by companies, plus unpredictable weather and unforeseen accidents that could down plants, just as El Nio drought in 2010 cut 90% of Mindanaos hydroelectric output half of its power. For the decade ahead, the Economist Intelligence Unit table on power needs and capacities forecasts a near-doubling of demand between 2009 and 2020 (see EIU

and DOE tables pages 44-46). Net maximum capacity, which accounts for old plants closing, is forecast to more than double if investors come in. So far, based on DOEs list of committed generating projects, only 1,338 MW of new capacity is due by 2014, compared with the additional 1,700 MW needed up to that year, according to the agencys generation needs projection (see Power Development Plan, 2009-2030, pages 3-4). The big question for millions of families and firms, lives and livelihoods: Will enough capital and capacity come in to keep the lights on?

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POWER CAPACITY NEEDS, 2009-2030

Year

Baseload Midrange Peaking 2009 2011 2010 2012 2014 2013 300 300 300 300

Plant Type

Luzon Grid

Total

Visayas Grid Baseload Midrange Peaking 150 Plant Type

Total 150

Baseload Midrange Peaking 50 200 100 100 50

Plant Type

Mindanao Grid

Total

300

300

50 200 100 100 50

300

2017 2018

2016

2015

500 500

150 300

450

150

500 650 650 600

450

450

450

100 100 50 100

100

100 100

2022 2024 2026 2027 2028 2025 2023

2021

2020

2019

500 500 500 500 500 500

500

500

150 150

500

100 100

100

150 300 300 600 300 150 300 150

650 800 650 900 650

100 100 100 100 100

50 50

100 150 200 150 150

150

100

150

100 100 100 100 100 100

100

100

100 100 50 100 100 150 150 150 150 100

100

50 50

50 50 50

800

100 100 50

2030 Total

2029

5,000

3,900

900

600

300 3,000

650

100

11,900

900

900

100

150

1,400

200

200

750

2,150

200

200

200

100

200 100

50 50 500

150

200 150

2,000

200

2,500

200

Source: Tables from Power Development Plan, 2009-2030, DOE, 2009, pages 3-4

Building new plants will require 2-5 years, so if the 300-MW-plus gap between needed and committed capacity till 2014 is to be closed, projects will have to be approved and started now. That wont happen anytime soon, unless the government itself does it. But that would require Congress to repeal or suspend the ban on state investment in generating ventures, stipulated in the Electric Power Industry Reform Act of 2001 (EPIRA, Republic Act 9136). Thats one emergency power President Aquino may need to address power shortages nationwide.

The electricity investment climate. A temporary return to state investment in power generation is no long-term solution to the countrys electricity needs. Private investment from here and abroad will be needed to power the economy, especially if the Aquino administrations target of 7% GDP growth is to be achieved. And for capital to come in, power sector policy must be made attractive to generating companies. Considering the countrys huge and expanding power consumption, Johns Hopkins-trained economist Elliott Morse

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sees value for investors in the sector. The IEA noted that investment in coal- and gasPhilippine electricity industry is recessionfired plants were favored when oil prices proof, said the former Harvard educator, fell, than more capital-intensive facilities noting in a 2011 report that the sector kept like nuclear and renewables. The last growing through the group suffered particularly, 1997-98 Asian financial falling by an estimated 39% To cut power costs, in 2009, though government crisis and the 2008-09 make sure the world financial crisis. incentives for renewable government must energy helped moderate the EIU noted in its March decline. there is 2011 report on the ample generating Philippine energy sector The hopeful news, however, capacity. Then rates is that targeted reductions that key EPIRA reforms have been implemented, will fall. Thats the in greenhouse-gas emissions including privatization under the 450 Policy Scenario law of supply of 70% of NPCs global plan would require and demand generating capacity, the trebling of renewable advancing power sector investment from recent years liberalization. But GR Business Online (see chart next page). Endowed with sun, believes that local and global investment wind, wave and geothermal resources, the in power generation is discouraged by a Philippines should aim to snare our share policy framework which limits foreign of such capital. equity to 40% in utilities, and does not spur electricity distributors to wire up more But theres a big if: power sector policy of the archipelago and thus expand the must be attractive to investors. For UPmarket for power. NEC experts Del Mundo and Espos, EPIRAs priority to establish an unfettered There are also external constraints on electricity spot market and cut power capital for electricity generation. On the rates, fails to give generation companies global stage, the Wests financial and the security of long-term contracts with economic woes have curtailed investment predictable rates. And with massive and in energy projects. Thats the assessment unrelenting political pressure on the of the International Energy Agency (IEA) government to cut electricity costs, the in its 2009 report, The Impact of rate-setting ERC will always think many Financial and Economic Crisis on Global times before adjusting rates upward, even if Energy Investment. gencos lose money. At the time, dropping fuel and power demand due to contracting economies held back projects; so did more cautious lenders and portfolio investors after the 2008 banking troubles. Many of these conditions remain to this day, so global capital will be slow in flowing to generating ventures. For his part, Senator Sergio Osmea wants Mindanao plugged into the LuzonVisayas grid and its increasingly liberalized electricity market. In his Statement on the Mindanao Power Shortage the Cebuano legislator recounted that Mindanao representatives back in 2001 got Congress

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Electric shocks hit the Philippines

Renewable Energy Investment in 2008-09 and under 420 Policy Scenario

CAPITAL TO COOL THE WORLD

Values in constant 2008 U.S. dollars. Chart from The Impact of Financial and Economic Crisis on Global Energy Investment., IEA, 2009, page 62

to exempt Napocor plants in Mindanao from EPIRA privatization. Even worse, he added, the bicam committee agreed to postpone the construction of the transmission line interconnection between Leyte and Surigao. That kept power rates in Mindanao down well below Luzon and Visayas up to now. But that made the north more attractive to power producers than the south. And now that latter is short of electricity, it cannot even tap the 380 MW of excess capacity in the Visayas grid. Moreover,

said Sen. Osmea, electricity would be cheaper for everyone if distributed over a bigger transmission grid that a smaller one. Indeed, costs would moderate in the long run if power capacity increased, far more than if it was stunted by unattractive market policies. Thats not EPIRA, but a much older and far more immutable statute: the law of supply and demand. Sadly, politicians and the people often learn that basic economic lesson only after so much pain, expense, and long hours in the dark.

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Business
Muscovado finds sweet success abroad
Recent developments in the local sugar industry have been discouraging. Costs have gone up, and the demand is low. Moreover, the Asian Free Trade Agreement and the establishment of the Asean Economic Community in 2015 will open up the sector to more competition. This did not dissuade sugar planter Alejandro Florian Alcantara, who adapted by selling muscovado through global niche marketing; his Brown Sugar Milling Co. Inc. is now significantly dependent on export revenue. The interest in muscovado has since gone up; a staterun agency is carrying out a benchmark study in order to raise yield and promote efficient mass production. The Department of Science and Technology is also involved in a possible muscovado plant project in Ormoc City. to be in line with Maynilad's expansion efforts. The water concessionaire has allotted 2.64 billion to improve and extend its water services in Paranaque, Muntinlupa, Las Pinas and Cavite; and spending 186.5 million to lay pipelines in Valenzuela City, for the same reasons. MPIC's core net income in 2011 went up 32% from the previous year mainly due to its utility holdings. "The rise in core net income is due mainly to higher profit from Maynilad Water Services Inc. (Maynilad) and from Manila Electric Company (Meralco) as well as a strong performance across the Hospital Group," the company said. published on the subject as well, particularly by the International Research Journal of Finance and Economics and the Asian Development Bank Institute.

41

Residential property sector seen facing oversupply woes

The residential market of the Philippine real estate sector may face "risks arising from oversupply," according to the World Bank's Philippines Quarterly Update. The Philippine real estate market today is largely driven by BPOs [business process outsourcing] and remittances, the report goes on to say. The BPO industry has dramatically increased the demand for office space and even residential units; in contrast, remittances fuel the demand for low-end to mid-range residential spaces. The industry's effect on real estate is discussed in property services firm Jones Lang LaSalle Leechiu's report "Sustaining the Competitiveness of the Philippine Outsourcing and Offshoring (O&O) Industry." Despite the positive outlook, the World Bank points out that the residential market may soon face an oversupply problem due to potentially lower remittances (attributed to global factors, such as unrest in the Middle East, slowed growth in the U.S., recession in Europe, and upward pressure on oil prices).

Asean steps up financial systems integration talks

Members of the Asean have intensified talks regarding the integration of their financial systems in the belief that this will further the development objectives of the region and their respective nations. However, unlike the European Union, Asean countries are not keen on having a common currency or a common monetary authority, according to officials. The goal for Asia is to move toward making it easier to conduct business within the region and engage in financial transactions across boundaries. In spite of all this, there is still a push for currency integration; several studies have been

Metro Pacific, DMCI confirm talks to bring in Marubeni as Maynilad partner

Metro Pacific Investments Corp. (MPIC) and DMCI Holdings Inc. have confirmed that they are in talks to bring Japanese trading giant Marubeni in Maynilad Water Services Inc. as a strategic partner. The decision appears

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Now, Gadgets That Computer and Make You Look Cool and Cute
A look at digital devices you'll soon be able to wear
STRATEGY POINTS
Many companies and scientists are developing wearable gadgets, prompting some to predict that 2012 could be the year of the wearables Tech titans Apple and Google are rumored to be working on prototype wearable devices, and Googles product could be on the market by end of 2012

Computers have migrated from metal cases sitting on tables and desktops, to notebooks for us to carry, and then to smartphones that can fit in our pockets. So are you ready to wear your technology on your sleeve? To be sure, while technological advances have paved the way for the mass production of portable gadgets, the further evolution of technology from portability to wearability is only beginning. Wearable devices are creating a buzz these days, with big players rumored to be joining the race and sources predicting 2012 to be the year of wearables. 1. A curved-glass iPhone peripheral for your wrist. The wristwatch, one of the earliest examples of wearable (if mechanical) technology, is somewhat pass now, but work is apparently underway to replace it with something else you can wear on your wrist. In December 2011, it was rumored that industry leaders Apple and Google were secretly developing prototype wearable devices in order to boost smartphone sales. According to a New York Times article, Apple is working on several products that

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could communicate with the iPhone and display information on other Apple devices. The author says that a person with knowledge of the companys plans informed him that one idea being discussed is a curved-glass iPod that would wrap around the wrist, with which users could interact with Apples artificial intelligence software Siri. Could Apple be testing the waters by encouraging users to wear their iPod nanos on their wrists? 2. Google glasses ala The Terminator. Google, on the other hand, is said to be developing something that looks like normal thick-rimmed glasses but with the ability to display a computer interface right in the users field of vision, according to 9to5 Google, a news, reviews, and information source covering all things Google and the ecosystem around Google (but not affiliated with Google). Contrary to a New York Times report it cited, 9to5 Google says it will not be a smartphone peripheral, but rather, a device that communicates directly with the Cloud and pushes information onto the display based on location, preferences, and Googles information as the wearer walks around. The device will likely use a transparent LCD or AMOLED display similar to what Samsung demonstrated (video right) at the 2011 Consumer Electronics Show (CES). Insiders say the glasses could be on the market by the end of 2012, and will sell for $250-600, according to the New York Times blog post. At the 2012 CES, companies like Lumos Optics, Vuzix, and Sensics also demonstrated similar devices.

The iPod nano worn as a wristwatch credit

Source: Apple website

The Samsung flexible AMOLED display at the 2011 Consumer Electronics Show

Source: Video uploaded to YouTube by IntoMobile

Wearable technology conferences

Every year, experts on wearable technologies around the world gather to discuss advances in this growing field. Some of the biggest conferences include: Wearable Technologies Conference held in Munich, Germany this year, and has been running since 2008 International Symposium on Wearable Computers probably the longest running wearable computer conference, having started in 1997 International Conference on Wearable and Implantable Body Sensor Networks (BSN) the 2012 BSN will be held from May 9-12 in London, U.K. A list of accepted research papers is available on their website.

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3. WiMM Labs Android-powered cost of thermoelectric devices, most of miniature computer. At the 2012 CES, which currently use the more expensive but WiMM Labs showed off a small, squaremore efficient inorganic compound called shaped device that runs on Googles bismuth telluride. Study co-author and Android platform, has micro apps, and can Wake Forest graduate student Corey Hewitt communicate with a smartphone via Wihopes to one day make Power Felt efficient Fi or Bluetooth. According to the official enough to power an iPod or a phone. website, it is a highly portable, multiResults of the study are published in the function wearable computer that is fully journal Nano Letters. customizable to become anything the user wants it to be, from a health monitoring device that hangs as a pendant to a smart watch on your wrist. It will not be directly available to consumers, however. Reports web magazine Mashable, The company has no plans to sell the Android Watch to consumers. Instead, OEMs have the option of buying the device in module form and selling it with a variety of watch bodies or disaggregating it into its Study co-author and Wake Forest University graduate student parts (screen, PC board and battery) Corey Hewitt holds a piece of the thermoelectric fabric and building something new on the Source: Wake Forest University News Center WiMM Labs 4. Charge your phone with your clothes. In February of this year, researchers at the Wake Forest Center for Nanotechnology and Molecular Materials introduced Power Felt, a thermoelectric fabric made of carbon nanotubes that can harness energy from body heat. It uses temperature differences, such as that between room temperature and body temperature, to create a charge. The research is groundbreaking in that it significantly reduces the

PixelOptics electronic eyeglasses let users shift from one prescription to another

WiM and

Source: PixelOptics website

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5. Electronic-focusing eyeglasses. Virginia-based PixelOptics has created a line of electronic eyeglasses, called emPower, that lets wearers toggle between close-up and distance vision just by either tilting their head downward or pressing a spot on the side of the frames. According to CNN, these use lenses manufactured by Panasonic that feature a thin layer of crystal sandwiched between two layers of plastic. While already available from a few retailers in the U.S. for $1,000-1,250, the company hopes to expand their reach in the coming years. Is ubiquitous computing upon us? Reporting on the recently concluded 2012 Mobile World Congress in Barcelona, David Goldman, writing in CNNMoney predicts that, in 10 years, embedded

connectivity will be the norm and every item in your life, from your refrigerator to your fridge magnets, will soon connect to the Internet or communicate other Internetconnected gizmos. By 2020, industry analysts say the amount of cellular traffic created by smartphones and tablets will be dwarfed by the data generated from the world of connected 'things,' Goldman reports, adding that, Shoes, watches, appliances, cars, thermostats and door locks will all be on the network. Just as we were wondering how to make the most out of 4G-capability in mobile phones, now comes word that the wireless industry is thinking about 5G wireless, which doesn't even officially exist yet. With the rapid pace of change in the wireless industry, current 4G technology alone will be inadequate in just five years, Goldman reports, citing Tod Sizer, head of wireless research at AlcatelLucent's Bell Labs. It remains to be seen whether speculation regarding Apples and Googles products will pan out, and whether all these wearable products will pass the marketplace tests of functionality and affordability (not to mention fashion-worthiness), but even now, with a number of wearable devices already on the market and many others in development, it seems inevitable that our devices will be more interactive not just with us but with each other.

M Labs Android-powered smart watch runs micro apps connects to the Internet via Wi-Fi or Bluetooth

Source: WiMM Labs website

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NEWS ON THE NET

Technology
Facebook has acquired 750 patents from IBM. Additionally, the social networking company has applied to the U.S. Patent and Trademark Office for at least 500 more. These actions serve to beef up Facebook's patent portfolio, which is paltry compared with the thousands owned by the likes of Microsoft and Apple. Many tech companies strategically use patents to both generate revenue and discourage competition; prodded by Yahoo's absurd claims, it seems that Facebook is joining the patents-armed club. In connection with these recent events, Facebook has added details of the current patent lawsuit with Yahoo to its IPO filing. Facebook is set to make its stock market debut in May. project. The project is currently in a crucial stage, as a delayed announcement on where the array will be based is eagerly being awaited. The decision will be between previously shortlisted locations in two countries South Africa and Australia. While waiting for the announcement, Canada was formally recognized by the SKA board of directors as part of the effort.

U.S.-Microsoft raid targets cyber-Mafia

As part of what is called Operation B71, U.S. marshals accompanied by Microsoft representatives raided two Webhosting outfits last March 23. Microsoft seized servers and took control of websites used to amass around $100 million in criminal gains. These were the tools used to manipulate part of 13 million computers infected with "Zeus," a computer bug designed to steal people's bank account information. The swift disruption of the botnet operation was made possible through clever legal maneuvering by Microsoft, which based its petition for the warrant to seize the servers on the Racketeer Influenced and Corrupt Organizations Act. The software giant took an interest in the issue because these types of cyber-criminal activities typically take advantage of Microsoft's infrastructure. Organized cyber-crime rings have been hit by the U.S. and Microsoft before, though not in tandem; previous targets were the Rustock botnet and the Coreflood virus.

EU push for ocean energy falls short

Europe's ocean energy initiative is likely to disappoint and not reach EU expectations for its carbon reduction target this 2020. It may take well over a decade for wave and tidal energy to significantly make an impact, even though it is currently growing rapidly and attracting much attention in Europe. The new industry has attracted many investors over the past year, and has garnered an estimated several hundred million dollars in funding from companies such as Siemens and Vattenfall. However, even with hundreds of millions of dollars in funding, the marine power sector still maintains that it needs more public funding in order to reach its full potential, cross the threshold into commercial viability, and eventually work toward cost efficiency.

Super telescope may hold the key to secrets of the universe

Said to potentially be the most sensitive radio telescope ever built, the Square Kilometer Array (SKA) is an international effort with 20 countries and 70 institutions already on board in addition to private backers. "It will have a deep impact on the way we perceive our place in the universe and how we understand its history and its future," says Michiel van Haarlem, interim director general of the SKA

Facebook buys 750 patents from IBM

After Yahoo sued Facebook for infringing several of its software patents, reports are saying that

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