The CenSEI Report (Vol. 2, No. 13, April 2-8, 2012)
The CenSEI Report (Vol. 2, No. 13, April 2-8, 2012)
The CenSEI Report (Vol. 2, No. 13, April 2-8, 2012)
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Volume 2 - Number 13 April 2-8, 2012
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
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
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
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
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.
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After decades of communist and separatist insurgency, will peace agreements ever happen?
By Atty. John Carlo Gil M. Sadian
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.
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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
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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
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.
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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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
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.
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.
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.
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.
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
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.
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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
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
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
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
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.
20 00
20 01
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20 04
20 05
20 06
20 07
20 08
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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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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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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
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
Temporal lobes
Temporal lobes
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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.
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 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
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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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.
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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.
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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
General Rate
20 19 12-15 7 6 23
9.3-9.4
8-11
7-17 7-15 9 7
3.4-10.7
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
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
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.
wh
aysia
Indonesia
Vietnam
(Tokyo)
Japan
Thailand
Malaysia
Korea
Vietnam Indonesia
2030
10,601 %
6,857
1,331
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
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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
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
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.
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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2x100MW Cebu Coal-Fired Power Plant 17.5MW Panay Biomass Power project Nasulo Geothermal Plant 2x80MW CFB Power Plant
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
Total 150
Plant Type
Mindanao Grid
Total
300
300
300
2017 2018
2016
2015
500 500
150 300
450
150
450
450
450
100
100 100
2021
2020
2019
500
500
150 150
500
100 100
100
50 50
150
100
150
100
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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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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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 Samsung flexible AMOLED display at the 2011 Consumer Electronics Show
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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
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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
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