The Philippine Economy - Compiled Threads [Archive] - Page 10

3cr

October 15th, 2006, 05:18 AM

Ate Glo and Gov't definitely need to do something about this abuse of our God given natural resources. It's not only bad for the environment but will also have a negative impact on our economy. Let's not trade our future for today's small gains.

RP world’s fourth most disaster-prone country

The devastation wrought by the two recent major disasters should no longer be seen as a problem best left to government’s disaster coordinating officials alone. Serious flaws in government’s economic development priorities and faulty public governance have led to the increase in the vulnerability of people and communities to calamities and, worse, in bigger number of lives lost and hopes for a better life shattered.

Has the government been jolted out of complacency or gone beyond merely declaring affected provinces as “calamity areas” by undertaking bold policy reform? Is there really nothing that can be done to protect people’s lives and their livelihood from future disasters?

In just a month, the Philippines was struck by two major calamities: The Guimaras oil slick, which hit several western Visayas coastal provinces in August, and Typhoon “Milenyo,” which devastated Luzon provinces including Metro Manila on Sept. 28. Being the world’s fourth most disaster-prone country (after China, India and Iran), such disasters whether natural as in the case of Typhoon Milenyo, or man-made as in the Guimaras tragedy, are often taken as nothing new.

Some alarming trends cry for attention, however. The impact of disasters such as typhoons, floods, monsoon rains, earthquakes, volcanic eruptions and landslides has worsened in recent years. The International Red Cross and Red Crescent Societies report that some 5.9 million Filipinos were killed or injured as a result of natural or man-made calamities in 1992-2001. That’s already about 5 percent of the country’s current population.

The rising toll can also be attributed to the increase in the reported number of disaster incidents in the country: From 199 in 2001, it leaped to 313 in 2002 and 384 in 2005. The nongovernment Citizens’ Disaster Response Center (CDRC) reports that the number of people affected by disasters in 2005 was 528,151 families or 2.6 million people. In January to September this year alone, the total had reached 584,607 families or 3 million people.

Typhoon Milenyo

The CDRC report does not include the recent damage caused by Typhoon Milenyo: 200 deaths as of Oct. 3, 1.3 million people displaced, including 171,000 evacuees and about 43 million affected by blackouts.

Flash floods account for the biggest number of people uprooted: In 2005, the total reached 344,378 families or 1.8 million people or half the total number directly displaced by all disasters that year, based on CDRC monitoring.

The CDRC adds drought, fire, red tide, fish kill, epidemic outbreak, infestation, tornado and armed conflict in its disaster monitoring. Not included are other man-made disasters such as sea, air and road mishaps as well as oil spills.

Normally, government reports measure the impact of disasters based on economic losses, the number of people killed or uprooted, and damage to infrastructure, among others. Over-attention to quantifiable effects, however, tends to gloss over other indicators that are often far-reaching and which are lost in the bureaucratic maze. These include long-term effects on livelihood and employment, health, nutrition, education and other social and psychological impact that only the keen and compassionate policy-maker is able to detect.

For instance, Central Luzon still reels from the impact of the Mt. Pinatubo volcanic eruption 15 years ago notably due to mud flows that inundate farms, fishponds and whole villages. Among other reasons, loss of income and destruction of farms have made the region one of the leading generators of overseas Filipino workers.

And yet, all these and other problems can be stopped or at least prevented or mitigated.

The number of families, communities, lands and other productive resources affected by calamities has increased at alarming rates because of the rise in their level of vulnerability. Contributing to the increase of vulnerability to disasters are poverty and unemployment, lack of land, shelter and food security, and poor access to health and other social services.

Logging

Big populations which face higher risks during disasters owing to their dire social and economic conditions are in the provinces especially those living near or on uplands, near logging and mining areas, coastal areas and other farm communities. In the cities, they are the urban poor who are forced to live by the riverbanks and coasts, under the bridges or beside dumps. All these are high-risk disaster zones.

In fact, the whole Philippine archipelago, including its seas and marine grounds, is a potential disaster area. This explains why, of late, whenever a major disaster happens—like the Guimaras oil spill—whole regions or one of the country’s three major islands are declared “calamity areas.”

Except for a few small zones, the whole country has been stripped of its forests due to unmitigated logging and mining operations that, for several decades, have only benefited a few families and transnational corporations. Foreign-funded dams that were built purportedly to provide power for industries and irrigation for large farm estates now disgorge flash floods that submerge whole provinces and ruin their economies.

The Mining Act of 1995, which the Arroyo administration implemented last year, will subject 13 million hectares or 45 percent of the country’s land area to mining exploration and extraction. Justified by President Macapagal-Arroyo as urgent in order to address the government’s fiscal crisis, the Act will result in the large-scale displacement of communities and in the destruction of lands, deforestation and the flattening of mountains, erosion, siltation, desertification, and pollution of rivers and marine life. In areas where new mining operations have started, disaster incidents have taken place, including the spread of toxic pollutants and flash floods.

Definitely, something is wrong when government economic programs are crafted principally to address the fiscal crisis and debt servicing regardless of their grim effects on people and their livelihood. State policies are aligned to international credit institutions’ impositions and preferences for extractive production and commercial exportation, while opening the domestic market wider for imports at the expense of the country’s farmers and other small producers. All these contribute to the further marginalization of the people and, consequently, to their risk of exposure to disasters.

Disasters of our own making
By Dan Mariano
http://www.manilatimes.net/national/2006/oct/09/yehey/opinion/20061009opi2.html

MORE disasters hit the Philippines than any other country in the world—save for China, India and Iran. Our country also ranks fourth in the number of people killed and injured by disasters whether man-made, like the Guimaras oil spill, or natural, such as Typhoon Milenyo (Xangsane).

Through the decades the country has had its share of tsunamis (southern Mindanao in August 1976), flash floods (Ormoc in November 1991 and Quezon in 2004), island-wide earthquakes (Luzon in July 1990) and volcanic eruptions (Pinatubo in June 1991).

Is the Philippines a hard-luck country fated to endure calamities of such ferocity that they regularly take thousands of lives and destroy billions of pesos in private property, civil works and natural resources?

In an article titled “Disasters and Faulty Governance” published last week, the Center for People Empowerment in Governance (CenPEG) noted that the impact of disasters has worsened in recent years.

CenPEG cited a report by the International Red Cross and Red Crescent Societies, which found that some 5.9 million Filipinos—or about a fifth of the present Philippine population—were killed or injured as a result of natural or man-made calamities from 1992 to 2001.

The mounting death toll was also attributed to the rising number of disasters—199 in 2001, 313 in 2002 and 384 in 2005.

CenPEG quoted the nongo*vernmental Citizens Disaster Response Center (CDRC), which reported that the number of persons “affected” by disasters or calamities in 2005 was 528,151 families, or 2.6 million individuals. From January to September this year alone the total has already reached 584,607 households or three million people.

The CDRC report does not include the recent damage caused by Typhoon Milenyo, which as of October 3 has been blamed for causing 200 deaths, displacing 1.3 million people including 171,000 evacuees and keeping about 43 million Luzon residents in the dark due to an island-wide blackout.

Flash floods account for the biggest displacement of people. In 2005 the total reached 344,378 families, or 1.8 million individuals, or half the total number directly displaced by all disasters that year, based on CDRC monitoring.

Government agencies normally measure the impact of disasters on the basis of economic losses, the number of persons killed or displaced and damage to infrastructure, among others.

“Overattention to quantifiable effects, however, tends to gloss over other indicators of impact that are often far-reaching and which are lost in the bureaucratic maze of government intervention—or lack of it,” CenPEG said. “These include long-term effects on livelihood and employment, health, nutrition, education and other social and psychological impact that only the keen and compassionate policy maker is able to detect.”

Central Luzon, for example, still experiences the after-effects of the Pinatubo eruption 15 years ago in the form of mudflows that inundate farms, fish farms and villages. Among other reasons, income losses and destruction to farms have made the region a top source of overseas Filipino workers.

“This only shows that the more disasters strike every year the bigger the army of OFWs will leave the country that, in turn, will result in a bigger number of families torn apart or suffering long separation [from] breadwinners aside from other unimaginable social costs,” CenPEG said. “And yet all these and other problems can be stopped or at least prevented or mitigated,” CenPEG added.

Vulnerability to disasters

The number of families, communities, lands and other productive resources affected by natural and man-made calamities has lately increased at alarming rates. The reason, CenPEG said, is their increased level of vulnerability.

Contributing to Filipinos’ increasing vulnerability to disasters are poverty and unemployment, lack of land and shelter, lack of food security, poor access to health and other social services and so on.

“Big populations that face higher risks during disasters owing to their dire social and economic conditions are in the rural provinces especially those living near or on uplands, near logging and mining areas, coastal areas and other farm communities,” CenPEG said. Remember Guinsaugon, Southern Leyte?

“In the cities, they are the urban poor who are forced to live by the riverbanks and coasts, under the bridges or beside [garbage] dumps. And all these are high-risk disaster zones,” CenPEG said. Remember Payatas?

CenPEG characterizes the entire archipelago, including its waters, as a potential disaster zone. This is why whenever something like the Guimaras oil spill occurs, the authorities place entire regions under a state of calamity.

“Natural disasters such as typhoons are obviously unavoidable but the hazards they as well as man-made calamities pose to populations and communities have been aggravated by flawed ‘economic development’ policies and laws that have also become, coincidentally speaking, the culprit behind man-made disasters,” CenPEG said.

Virtually the whole country has been stripped of its forests due to unmitigated logging and mining operations, which for decades have only benefited a few families and transnational corporations. Foreign-funded dams that were built purportedly to provide power to industries and irrigation to vast farm estates are now seen as the cause of flash floods, which inundate provinces and ruin their economies.

CenPEG cited the Mining Act of 1995, which the government began to implement last year. It estimated that the highly controversial law will subject 13 million hectares, or 45 percent, of the country’s land area to mining exploration and extraction.

The government has pinned its hopes on revenue from mining to resolve its perennial fiscal crisis. However, CenPEG warned that the Mining Act “will result in the large-scale displacement of communities and in the destruction of lands, deforestation and the flattening of mountains, erosions, siltations, desertification, pollution of rivers and marine life, and other ecological damages.”

Nature makes the Philippines prone to disasters, but shortsighted state policies, corporate greed and plain human folly make sure that calamities cause maximum impact on people’s lives.

3cr

October 15th, 2006, 05:46 AM

A govt-private sector deal mutates into a plunder case
By Rene Q. Bas
Manila Times / Sunday Times
http://www.manilatimes.net/national/2006/oct/15/yehey/top_stories/20061015top2.html

First of two parts

WHEN, in 1999, the executives of the Bases Conversion Development Authority and the private and professional port-management company, Bulk Handlers Inc., signed a 70-30 partnership contract to operate the Poro Point seaport, little did they know that one day they or their successors would be facing plunder charges seven years later.

On October 11 Gov. Luis “Chavit” Singson of Ilocos Sur filed charges of plunder—the maximum criminal penalty for which is life imprisonment—against 43 respondents including past and present high officers of the BCDA, BHI, the joint-venture corporation they formed, Poro Poro Point Industrial Corp. (PPIC), and the Government Corporate Counsel.

Singson’s complaint alleges that these persons had enriched themselves by causing the government to lose earnings of up to P2.6 billion from the time the port was given over on November 1, 1999, to the BHI and the PPIC to manage and operate.

Singson asserts that the respondents wrongfully “arrogated [to] themselves the power and authority to ‘utilize, manage, operate and develop the Poro Point Special Economic and Freeport Zone’ in San Fernando, La Union, for a period of 25 years.”

He also says that the “illegal and fraudulent conveyance and disposition of the assets, properties and rights of the Poro Point Economic and Freeport Zone by the respondents were done without public bidding or approval by the Office of the President as specifically required by law.”

BCDA president Narciso Abaya and several past and present BCDA and PPIC officials are charged—including those some newspapers and columnists have alleged to be Singson’s relations.

‘Inherited corruption’

Abaya is wondering why he is included in the plunder charge. The explanation given by Singson’s lawyer is that Abaya as well the others who were not yet with the BCDA when the contract was signed had “inherited” the allegedly corrupt and unlawful contract and to carry it out they committed felonious practices.

Government Corporate Counsel Agnes Devanadera is indicted because Singson had asked her to nullify the Poro Point contract with BHI but refused to do so.

Worse, Singson’s side asserts, she even defended the contract in a congressional investigation.

In January last year, Abaya and his fellow BCDA officers could have sensed that Singson would take extreme steps against them if they did not rescind the contract. He denounced the Poro Point situation in words that were amply reported in the national media. Perhaps Singson did not realize it, but he was heaping blame on ousted President Estrada for the joint-venture contract which, Singson said, was the reason there was no progress in developing the Special Economic and Freeport Zone in San Fernando. (The Poro Point contract was actually conceived, drafted and finalized in the Ramos presidency.) Singson said, to punctuate his seriousness about the matter, that he had asked President Arroyo to rescind the contract with the BHI.

Many were wondering why Singson was uttering all these imprecations against the BHI once more—and why at that time. Some media (not The Manila Times) believed that it was because Mrs. Arroyo was at that time voicing broad hints that she was about to revamp the Poro Point Management Corp., the BCDA subsidiary directly involved with the BHI and the PPIC. Singson is a friend of the President. He helped her become President by being the star witness against Estrada as a receiver of jueteng payola.

The PPMC holds the BCDA’s (and therefore the government’s) 30-percent share in the joint-venture company, PPIC. Bulk Handlers owns the remaining 70 percent. Bulk Handlers is a respected company in its field, something that even the Philippine Ports Authority acknowledges. Among the ports the BHI manages and operates is the highly successful and world-class Port of Batangas.

Some journalists were speculating that Singson resented reports of revamping the PPMC in Malacañang because the top men (and women) of that BCDA subsidiary were Singson people.

Dreams of greatness

Singson shares the dreams of greatness for Poro Point with those who created the Special Economic and Freeport Zone, and who formed the PPMC and organized the PPIC joint venture between BCDA-PPMC and Bulk Handlers Inc. These dreams are also shared by most Ilocanos. And Singson has been the leading political, social and economic leader of the Ilocos ever since Mrs. Arroyo rose from Vice-President to President, thanks in great measure to him.

La Union Ilocanos love to call the Poro Point Special Economic and Freeport Zone the catalyst for Northern Luzon development. This is something Singson, the Regional Development Council head for the Ilocos, does not dispute.

And the Poro Point Management Corp. is the key player for the government in making this catalysis work. As things are now, Singson is the Ilocos’ topmost honcho. He is the region’s key player in anything. This goes for the special economic zone and free port, the San Fernando International Seaport within the economic zone, the San Fernando Airport, creation of jobs and building of new universities—everything!

Wonderful Poro Point

About five hours from Manila by car and more than an hour from Baguio City, Poro Point is the former US military’s Wallace Station at the northwestern tip of Northern Luzon, west of San Fernando City in La Union.

It is strategically set at the upper side of the Lingayen Gulf and therefore a pearl along the Southeast Asian sea-lane. It is less than an hour by jet from Taiwan, Guangzhou (Canton), Macau and Hong Kong and within three hours from Singapore, Japan and South Korea.

President Arroyo’s plans for megaregions and supercities call for developing the San Fernando Airport into the gateway to Northern Luzon, Poro Point a destination for seaborne Loveboat-type tourists and its container port something as busy and profitable servicing the China and Asian markets—as Hong Kong and Singapore.

The BCDA is the agency specially created to manage the conversion of former military real estate into flourishing wealth producers as economic zones. In 2004 it released P100 million for the PPMC to spend for the upgrading of the San Fernando domestic airport and the construction of roads and facilities for the Poro Point Tourism, Recreation and Commercial Complex.

Developing Poro Point into a center of Asian tourism, commerce, light industrial factories, service-provider companies (like call centers and other forms of business process outsourcing) and transshipment logistics will definitely raise the Ilocos region into a high-income, high-knowledge area competitive with any such found within the Philippines and among our Asean neighbors.

The PPMC has been pushing for these projects. It is the Poro Point subsidiary of the BCDA, which has also been doing great—albeit controversial—things, from Makati and Taguig to Baguio.

All the Poro Point works are done in conjunction with the BCDA’s other activities, such as the Subic-Clark-Tarlac Expressway (SCTEx). This highway extends from Tarlac to Poro Point. With this, Poro Point serves as an alternate import and export point for goods carried by land along the SCTEx. The facilities at Subic and Clark will be complemented by those to be built in the Poro Point Special Economic and Freeport Zone.

This complementation has already happened. With the paralyzation of the Poro Point seaport as a result of the conflict between the PPMC and the BHI, ships have been diverted to Subic. Poro Point can do the same for Subic when necessary.

Those who visit Poro Point notice that something like the Olongapo-Subic symbiosis exists between Poro Point and San Fernando City.

Club Poro à la Club Med

The PPMC is transforming the 240-hectare former US Air Base into a major tourist destination. Right now Poro Point is on the world map as a surfing destination.

Among the projects is a 13-hectare recreational resort complex called Club Poro. It is on white sand beach, something that La Union has plenty of. The cape shields Poro Point from typhoons and bad weather. (This makes the seaport an all-year wonder for shipowners.)

There is, along the Poro coastline, a scenic coral walkway. Extended to kilometer length and with some refinements, it can easily be made a Southeast Asian marvel for joggers, strollers, bikers and bayside fishermen.

The walkway complements the piers for jet-skiers, windsurfers and boaters.

The PPMC has also worked on beautifying the Poro Point Lighthouse as a tourist destination. It is on the southern tip of Punta de Poro, along the entrance to the Port of San Fernando. Originally built by the Spaniards on November 28, 1885, the lighthouse serves as a beacon for ships entering and leaving the Port of San Fernando.

The restoration project is joint venture with the Philippine Coast Guard.

Posh residential complex

As in Subic, there are plans to build self-contained high-end residential complexes. There will be condominiums, cluster bungalow housing, and single detached houses.

There will be golf courses and driving ranges, health-care spas and medical centers. Plans are afoot to make Poro Point a medical tourism destination.

The whole thing will create scores of thousands of jobs.

The development of Poro Point also depends on the good will and cooperation of the San Fernando City administration.

In all these great plans and continuing projects for Poro Point why have we not dealt with the Poro Point Industrial Corp.?

(Continued tomorrow)

_________________________________________________

SPECIAL REPORT: Poro Point (Second of two parts)
Poro Point’s 30% riddle
Why did private group shoulder govt’s share?
By Rene Q. Bas
Manila Times / Sunday
http://www.manilatimes.net/national/2006/oct/16/yehey/top_stories/20061016top1.html

The 30-percent share of the government in the Poro Point Industrial Corp. (PPIC) was paid for with Bulk Handlers Inc. money and not by the government’s Bases Conversion Development Authority (BCDA).

BCDA did not spend a centavo in the forming PPIC, the joint-venture company tasked with managing, operating and developing the Poro Point seaport and the transformation and operation of Poro Point as a world-class business and industrial zone.

The contract between Bulk Handlers and the government, represented by the BCDA and its subsidiary, the John Hay Poro Point Development Corp. or JPDC gives the PPIC an initial authorized capitalization of P100 million. The JPDC is the mother company from which the PPIC was spawned later as the corporation focused on Poro Point.

Of the P100 million, BHI owns 70 percent or P70-million worth of shares and the government/BCDA-Poro Point Management Corp. (PPMC) owns 30 percent or P30-million worth of shares. All the cash to subscribe to and pay up for all these shares came from the BHI.

The financing section of the contract, which the Office of the Government Corporate Counsel reviewed and approved, provides that BJI will fund PPIC with at least P840 million by way of equity—which means the issuance, subscription to and paying for—more PPIC shares. The release of the funds will be as implementation of the plans for Poro Point agreed by the BHI and the government side.

This fact could strengthen the plunder charges that Gov. Luis “Chavit” Singson of Ilocos Sur wishes the Ombudsman to pursue against the BHI, BCDA, PPIC and PCMA officials as well as the Government Corporate Counsel. He could insinuate—and prove if there is proof—that something corrupt is behind this private-sector firm’s willingness to underwrite the government’s cash subscription of its shares in a joint venture.

But the fact could also be used by the 43 persons he is accusing to prove that instead of being disadvantageous to the government, the contract with BHI is in fact beneficial at the very outset. For the contract virtually makes BHI give the government (through BCDA-PPMC) P30 million up front. And P840 million for the development of Poro Point in the manner we described in the first part of this article on Sunday.

The provisions of the deal are actually contained in the so-called Pre-Incorporation Agreement, which BHI and BCDA-John Hay Poro Point Development Corp. (JPDC) entered into prior to the creation as a government-BHI joint venture of the PPIC.

The Pre-Incorporation Agree*ment was signed on September 21, 1999, and became the substance of the actual contract BCDA and BHI signed, with the blessings of the Government Corporate Counsel and President Fidel Ramos in November 1999.

(Singson, in assailing the contract before media, mistakenly blames ousted President Estrada as the president who allowed the “felonious contract” to come into being and be implemented.)

Sunday’s article ended with the question why the joint venture company, PPIC, seems not to figure in the discussion by Poro Point Management Corp. officials of development activities and plans for Poro Point.

This seems to be because the development activities are being carried out not by PPIC but by PPMC—which Singson uses to show that PPIC, which is 70-percent owned by BHI, is not doing much or anything develop Poro Point.

This is refuted by the BHI with the fact that the joint venture contract requires the BCDA/government side to fulfill its part of the contract. Stung by the remarks of Singson and PPMC officials, the BHI men in the PPIC have dared the BCDA to hand over the lands on which development work should be done.

PPIC president Emmanuel Moran Jr. said, “As early as January 2001, we have demanded the full turnover of 80 hectares of land to PPIC that are to be developed to make Poro Point an economic hub of Northern Luzon.”

“What is there to develop when General Abaya has not turned over the land BCDA by contract is committed to turn over to PPIC?” said Moran. He mentioned Abaya by name because the BCDA president had joined Singson in September in saying that the PCIC has failed to develop Poro Point.

Since 2000, or a year after the joint-venture contract was signed, the PPIC and BHI have been “repeatedly demanding from BCDA and PPMC the full turn over of the 30 hectares of seaport area and 50 hectares of industrial area pursuant to the term of the Pre-Incorporation Agreement.”

So far only 18 hectares of seaport area has been turned over by the government/BCDA to PPIC-BHI.

In January 2006, the BHI wrote the BCDA formally repeating this demand for the parcels of land. Roman says no reply has been received. Instead the PPMC passed a resolution declaring the contract void from the beginning on January 23.

Singson says the P50-million annual fee BHI has been paying BCDA is a pittance. Our sources tell us he thinks the whole Poro port operation could be earning P500 million a year or more for BHI and the arrastre firm Poro Point Integrated Services Inc. (PIPSI), which PPIC has granted the right to manage and operate the arrastre, stevedoring and cargo handling services at Piers 1 and 2 and the new PNOC pier at the San Fernando port.

The executives and board members in the BCDA and PPMC who are alleged to be Singson’s men have tried to kick out the BHI to no avail.

Even BCDA president and CEO Narciso Abaya, agreeing with the company’s legal counsel and the Government Corporate counsel, would rather let the court decide whether to nullify the contract.

Abaya made a statement urging “the parties concerned to stop fighting through the media and let the proper courts decide the impasse.”

The statement said he is particularly concerned about the media statements urging him to direct the officials of the Poro Point Management Corp. to follow the orders issued by the La Union Regional Trial Court.

The issue, he said, is already with the Court of Appeals, where the BCDA, the PPMC and the Philippine Ports Authority have a pending petition to nullify the temporary restraining orders and injunctions issued by Judge Roberto Cawed of the La Union Regional Trial Court in connection with the Poro Point dispute.

“At this point, no amount of pressure and bullying can make the BCDA act unilaterally on the Poro Point issue. We will wait for the Court of Appeals to decide, and we shall abide by whatever decision the CA will make,” he said.

Abaya said that since the matter is still pending before the courts, “the BCDA is focusing on more urgent and pressing matters such as the supervision of ongoing projects like the P21-billion Subic-Clark-Tarlac Expressway and working for the restoration of incentives for locators in BCDA special economic zones. “

“We at BCDA are exercising responsible corporate leadership by performing our duties despite the distractions brought about by the Poro Point issue and other controversies,” he added.

Abaya’s attitude must have angered Singson. Earlier, Abaya had been giving the governor reasons to dislike him.

A BCDA statement released to the media clearly showed that Abaya was distancing himself from the Singson point of view.

The statement, issued after the PPMC board passed the resolution declaring the PPIC contract null and void, quoted Abaya saying, “The prevailing sense among the members of the BCDA board is that only the courts could declare such contracts null and void. We have no powers to nullify contracts.”

Abaya, knowing that Singson was for the contract’s nullification, must have sought Palace approval before issuing the statement.

In mid-September, speaking in Vigan City, Singson called for Abaya’s resignation as BCDA president for “trying to justify the anomalous contract” granted to Poro Point Industrial Corp. to operate a seaport in La Union.

Then he promised to resign the governorship “if it could be proven that the PPIC contract was advantageous to the government.”

Singson has also been asking the Congress to investigate Abaya and the BCDA.

Will the Ombudsman pursue the plunder charges he has filed?

JAMAICUS

October 15th, 2006, 08:14 AM

The following are just my personal sentiments, no need to reply...
After failing in making this thread a shining ray of hope in order to influence some of the hopeless people here in SSC that there is still truly hope, this would be my last post here in this thread... personaly, I'm totaly demoralized with this thread and much of the forums(firstly, I already, and surely much of the forumers here, have already aknowledged much of our problems via the media and day-to-day walks in the streets)...as a part of the youth, I thought I can make a change for the Philippines by making "hopeful rays" in this thread for some of the hopeless people especialy the youth here, in order to service my country because this shining rays of hope may change this people(considering the fact SSC is already a mixture of the masses and the elite; the rich and the poor) in making them do something better than good for the country, but it seems I failed... first the media, then my family, ngayon itong forums... naging safe haven na nga itong forums dati, but the this thread seems to be going the same way as well... it's just me talking here, but I'll just stay away from threads like this and won't post and see anymore, as I they are already shown and heard in the tv, the radio, and in the neighnorhood... please post ahead and ignore this because this is just a personal senti... I'll just do something else elsewhere, hopefully for the better of the country... good luck for all the Filipinos here... :)

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Cebu’s shoe capital thrives despite adversities

By Irene Sino Cruz
Inquirer
Last updated 06:20am (Mla time) 10/15/2006

Published on page B2 of the October 15, 2006 issue of the Philippine Daily Inquirer

CARCAR, CEBU—WHILE it is more popular for its native food products ampao (sweetened rice crispy), bucarillo (colored coconut candy) and chicharon (pork skin cracklings), Carcar, 40 km south of Cebu City, has been home to footwear manufacturers for several centuries now.

The footwear industry in Carcar started in the 17th century when Sotero Solon (or Mano Teroy as he was called) saw a reproduction of the famous Last Supper, which showed Jesus Christ’s disciples wearing leather sandals.

Using the tree bark, used rubber tire and coconut, Solon, a resident of Barangay Liboron, made his first pair of sandals. His neighbors also made their own sandals and a few years later the residents of the barangay and neighboring areas were engaged in sandal-making. This time, they started using animal skin instead of tree bark. The footwear industry received a boost when a certain Fernando Macasero built a tannery to supply the requirements of the municipality’s footwear industry.

When Venancio Medalle came up with the first pair of shoes made in Carcar in 1927, his products became popular under the brand of Venancio. Medalle and the other shoemakers also started using machines for sewing shoes.

In the 1960s, about 200 residents of Carcar were engaged in shoemaking. Jhul Antopina also set up his company MM Marketing, which produced step-ins, sandals, shoes, bags and suitcases.

Over the years, however, various constraints continue to plague the Carcar’s footwear industry, such as the lack of capital, competition among the players, lack of skilled manpower and quality materials.

Despite adversities, however, Carcar’s footwear manufacturers managed to survive and continue operations. They went to other provinces in the Visayas and Mindanao to market their products. For several years, the demand was more than enough, encouraging more to go into footwear manufacturing.

The presence of a footwear industry has helped provide employment to Carcaranons as each manufacturer employ between 20 to 70 workers, aside from providing livelihood to at least 1,000 households.

“Carcar residents are always better off than those living in other towns since they have several source of livelihood, such as the outsourcing of some aspects of footwear manufacturing,” according to Mercedita Apura, owner of Detasie Shoes and treasurer of the Carcar United Footwear Manufacturers Association Inc. (CUFMAI).

However, the footwear industry is facing its biggest challenge—the onslaught of low-priced shoes from China.

“Our products are made of similar materials as those coming from China. Our only edge is quality. Our products are more durable than those made in China,” Apura says.

On top of this, the cost of raw materials continues to rise. CUFMAI director Timoteo Canape says the prices of raw materials have been increasing by 5 to 10 percent almost twice a month starting last year.

CUFMAI, an organization of 22 footwear manufacturers, was formed about three years ago, through the intervention of the Department of Trade and Industry (DTI) Cebu provincial office, to help the industry remain competitive.

The organization established a bulk materials sourcing to help both members and non-members bring down cost of raw materials. Another project is the construction of a display center that provides CUFMAI members a venue to display and sell their products.

While they admitted that the domestic demand has gone down considerably due to the entry of low-priced China-made footwear, CUFMAI is coming up with measures to ensure the industry’s survival.

To address the China threat, CUFMAI has decided to follow the advice of DTI Cebu of using differentiation as a strategy.

Until about three years ago, the footwear industry in Carcar was enjoying good revenues. Then, the high demand for Carcar-made footwear encouraged many Carcaranons to set up their own small-scale manufacturing operation. Carcar manufacturers supply the requirements of retailers in the Visayas and Mindanao.

The number of footwear manufacturers rose to over 400 as some workers at existing companies saw the potential, recalls Canape.

However, the continuing competition among the Carcar footwear companies and the emerging threat of China has resulted in the closure of many firms, Canape says. At present, he says, there are less than 200 footwear manufacturers in Carcar.

Unlike the Marikina companies, which see the footwear industry as a sunset industry, the Carcar manufacturers still see good prospects, Canape says.

To ensure the survival of the footwear industry, CUFMAI is now coming up with new product lines, using different raw materials instead of just leather, Apura says.

Apura says the CUFMAI board decided last April to come up with new products using locally sourced materials such as raffia, jute and woven buri mats.

In addition, she says, the group is developing designs that appeal to the customers, rather than producing just the basic designs.

In the past, Apura says, CUFMAI members did not consider exporting their products due to the high cost of production.

However, she says, the present situation has changed their mindset. CUFMAI is now planning to penetrate the export market.

The group sees this strategy as the most viable option to enable them to continue operations, Apura says.

Canape says the CUFMAI members have started accepting job orders for footwear from some Cebu exporters. However, he says they are no longer content with remaining as suppliers of exporters.

“Since we have the expertise in footwear making, we decided that we should go into direct export instead of going through other exporters,” he says.

According to Apura, the group will be joining the National Trade Fair scheduled February next year.

“Joining this fair will help provide access to the export market since it has foreign buyers,” she says.

The decision to use indigenous materials has also created additional livelihood opportunities for Carcaranons, Apura says.

At the same time, she says, the group is helping increase the demand for such materials as raffia and buri woven mats. “We are helping the other industries as well,” she adds. The industry helps provides direct employment to over 3,000 workers as well as livelihood to about 1,000 households. The raffia and the buri mat come from Bohol while the jute materials come from the neighboring municipality of Argao.

Despite the constraints, Apura says the association still feels optimistic. “We still remain competitive even in the domestic market as far as our leather footwear is concerned. While Carcar-made footwear uses the same material as those coming from China, our products have better quality,” she points out.

The response of the domestic consumers to the new footwear line, using indigenous raw materials also showed that there is a market for these types of products, Apura says. “They are slowly accepting these products,” she adds.

The Carcar footwear manufacturers also face good prospects in the export market, since the use of indigenous materials would make their footwear products different from those available in the market, Apura says.

http://business.inq7.net/money/topstories/view_article.php?article_id=26783

dabert

October 15th, 2006, 08:46 AM

'Success story’
Sunday, Oct 15

WITH its strong economic growth record, the Philippines is on its way to becoming “the next success story of Asia,” said Cabinet Secretary Ricardo Saludo.

According to the data he presented during the national convention of the Vice Mayors’ League and the Liga ng mga Barangay this week, the country’s gross domestic product is now up by 5.5 percent.

Its deficit has been consistently going down for the past five years, from P210 billion in 2002 to P126 billion in 2006.

Saludo said the country is now going through the early stage of an “asset-revelation” cycle.

He explained that the Philippine stock market goes through a seven-year cycle, with a seven-year gain and a seven-year drop, and the country is now on its second year into the seven-year gain cycle.

“That means that the value of Philippine assets, properties, stocks, business enterprises are on track to increase over the coming years,” Saludo said.

He hopes, though, that domestic business confidence and investment in the country will also increase.

“The ironic thing is foreigners are more optimistic about the Philippines than the Filipinos themselves,” Saludo told reporters last Thursday.

Saludo pointed out that net foreign direct investment in the country increased for January to July 2006 by 60 percent, from the same period last year.

The foreign net portfolio investment in the Philippine stock market also went up by 72 percent during the same period, he added.

“Very clearly, there is a great surge of (foreign) investment... The domestic feeling might not be so positive yet but the foreigners are coming in strong,” said Saludo.

“That’s why we feel the need to show this information to the people so that, perhaps, a lot of the negative vibes they get from around them or sometimes from media will be balanced by a different perspective,” he added. (ROV)

from Suntar Cebu (http://www.sunstar.com.ph/static/ceb/2006/10/15/news/.success.story..html)

marites4

October 15th, 2006, 10:35 AM

thats sad to hear Jamaicus. That's exactly what's wrong with this country. THe useless the lazy and the doomsayers outnumber the good the productive and industrious. They usually get overwhelmed by the throngs of negativity. It's so hard to go againts the grain. The following are just my personal sentiments, no need to reply...
After failing in making this thread a shining ray of hope in order to influence some of the hopeless people here in SSC that there is still truly hope, this would be my last post here in this thread... personaly, I'm totaly demoralized with this thread and much of the forums(firstly, I already, and surely much of the forumers here, have already aknowledged much of our problems via the media and day-to-day walks in the streets)...as a part of the youth, I thought I can make a change for the Philippines by making "hopeful rays" in this thread for some of the hopeless people especialy the youth here, in order to service my country because this shining rays of hope may change this people(considering the fact SSC is already a mixture of the masses and the elite; the rich and the poor) in making them do something better than good for the country, but it seems I failed... first the media, then my family, ngayon itong forums... naging safe haven na nga itong forums dati, but the this thread seems to be going the same way as well... it's just me talking here, but I'll just stay away from threads like this and won't post and see anymore, as I they are already shown and heard in the tv, the radio, and in the neighnorhood... please post ahead and ignore this because this is just a personal senti... I'll just do something else elsewhere, hopefully for the better of the country... good luck for all the Filipinos here... :)

--------------------------------------------------------------------

Cebu’s shoe capital thrives despite adversities

By Irene Sino Cruz
Inquirer
Last updated 06:20am (Mla time) 10/15/2006

Published on page B2 of the October 15, 2006 issue of the Philippine Daily Inquirer

CARCAR, CEBU—WHILE it is more popular for its native food products ampao (sweetened rice crispy), bucarillo (colored coconut candy) and chicharon (pork skin cracklings), Carcar, 40 km south of Cebu City, has been home to footwear manufacturers for several centuries now.

The footwear industry in Carcar started in the 17th century when Sotero Solon (or Mano Teroy as he was called) saw a reproduction of the famous Last Supper, which showed Jesus Christ’s disciples wearing leather sandals.

Using the tree bark, used rubber tire and coconut, Solon, a resident of Barangay Liboron, made his first pair of sandals. His neighbors also made their own sandals and a few years later the residents of the barangay and neighboring areas were engaged in sandal-making. This time, they started using animal skin instead of tree bark. The footwear industry received a boost when a certain Fernando Macasero built a tannery to supply the requirements of the municipality’s footwear industry.

When Venancio Medalle came up with the first pair of shoes made in Carcar in 1927, his products became popular under the brand of Venancio. Medalle and the other shoemakers also started using machines for sewing shoes.

In the 1960s, about 200 residents of Carcar were engaged in shoemaking. Jhul Antopina also set up his company MM Marketing, which produced step-ins, sandals, shoes, bags and suitcases.

Over the years, however, various constraints continue to plague the Carcar’s footwear industry, such as the lack of capital, competition among the players, lack of skilled manpower and quality materials.

Despite adversities, however, Carcar’s footwear manufacturers managed to survive and continue operations. They went to other provinces in the Visayas and Mindanao to market their products. For several years, the demand was more than enough, encouraging more to go into footwear manufacturing.

The presence of a footwear industry has helped provide employment to Carcaranons as each manufacturer employ between 20 to 70 workers, aside from providing livelihood to at least 1,000 households.

“Carcar residents are always better off than those living in other towns since they have several source of livelihood, such as the outsourcing of some aspects of footwear manufacturing,” according to Mercedita Apura, owner of Detasie Shoes and treasurer of the Carcar United Footwear Manufacturers Association Inc. (CUFMAI).

However, the footwear industry is facing its biggest challenge—the onslaught of low-priced shoes from China.

“Our products are made of similar materials as those coming from China. Our only edge is quality. Our products are more durable than those made in China,” Apura says.

On top of this, the cost of raw materials continues to rise. CUFMAI director Timoteo Canape says the prices of raw materials have been increasing by 5 to 10 percent almost twice a month starting last year.

CUFMAI, an organization of 22 footwear manufacturers, was formed about three years ago, through the intervention of the Department of Trade and Industry (DTI) Cebu provincial office, to help the industry remain competitive.

The organization established a bulk materials sourcing to help both members and non-members bring down cost of raw materials. Another project is the construction of a display center that provides CUFMAI members a venue to display and sell their products.

While they admitted that the domestic demand has gone down considerably due to the entry of low-priced China-made footwear, CUFMAI is coming up with measures to ensure the industry’s survival.

To address the China threat, CUFMAI has decided to follow the advice of DTI Cebu of using differentiation as a strategy.

Until about three years ago, the footwear industry in Carcar was enjoying good revenues. Then, the high demand for Carcar-made footwear encouraged many Carcaranons to set up their own small-scale manufacturing operation. Carcar manufacturers supply the requirements of retailers in the Visayas and Mindanao.

The number of footwear manufacturers rose to over 400 as some workers at existing companies saw the potential, recalls Canape.

However, the continuing competition among the Carcar footwear companies and the emerging threat of China has resulted in the closure of many firms, Canape says. At present, he says, there are less than 200 footwear manufacturers in Carcar.

Unlike the Marikina companies, which see the footwear industry as a sunset industry, the Carcar manufacturers still see good prospects, Canape says.

To ensure the survival of the footwear industry, CUFMAI is now coming up with new product lines, using different raw materials instead of just leather, Apura says.

Apura says the CUFMAI board decided last April to come up with new products using locally sourced materials such as raffia, jute and woven buri mats.

In addition, she says, the group is developing designs that appeal to the customers, rather than producing just the basic designs.

In the past, Apura says, CUFMAI members did not consider exporting their products due to the high cost of production.

However, she says, the present situation has changed their mindset. CUFMAI is now planning to penetrate the export market.

The group sees this strategy as the most viable option to enable them to continue operations, Apura says.

Canape says the CUFMAI members have started accepting job orders for footwear from some Cebu exporters. However, he says they are no longer content with remaining as suppliers of exporters.

“Since we have the expertise in footwear making, we decided that we should go into direct export instead of going through other exporters,” he says.

According to Apura, the group will be joining the National Trade Fair scheduled February next year.

“Joining this fair will help provide access to the export market since it has foreign buyers,” she says.

The decision to use indigenous materials has also created additional livelihood opportunities for Carcaranons, Apura says.

At the same time, she says, the group is helping increase the demand for such materials as raffia and buri woven mats. “We are helping the other industries as well,” she adds. The industry helps provides direct employment to over 3,000 workers as well as livelihood to about 1,000 households. The raffia and the buri mat come from Bohol while the jute materials come from the neighboring municipality of Argao.

Despite the constraints, Apura says the association still feels optimistic. “We still remain competitive even in the domestic market as far as our leather footwear is concerned. While Carcar-made footwear uses the same material as those coming from China, our products have better quality,” she points out.

The response of the domestic consumers to the new footwear line, using indigenous raw materials also showed that there is a market for these types of products, Apura says. “They are slowly accepting these products,” she adds.

The Carcar footwear manufacturers also face good prospects in the export market, since the use of indigenous materials would make their footwear products different from those available in the market, Apura says.

http://business.inq7.net/money/topstories/view_article.php?article_id=26783

sandrn

October 15th, 2006, 01:53 PM

It is very obvious the 3CR has the intention to jam this thread with negative speculations with regards to the economy. He deliberately ignored posting the positive reports.
One huge crab indeed. Maapakan nga. Puede syang na ibenta sa highway na parang Taba ng Talangka.

Exports jump 21% to $4.3b
By Roderick T. dela Cruz
http://www.manilastandardtoday.com/?page=business1_oct14_2006

Merchandise exports grew 21.3 percent year-on-year to a new record high in August 2006, bolstered by robust shipments of electronics, copper cathodes and petroleum products.

The National Statistics Office yesterday said outbound shipments amounted to $4.261 billion in August this year, the highest monthly export figure on record that topped the previous high of $4.127 billion registered in March this year. Exports in August 2005 were valued at only $3.956 billion.

It was also the seventh consecutive month that exports grew at a double-digit rate, surpassing the government%u2019s export growth target of 10 percent for 2006. Exports grew 12.9 percent in July this year and 2.4 percent in August 2005.

Receipts from merchandise exports in the first eight months hit $30.954 billion, up 16.9 percent from $26.487 billion year-on-year.

Data showed that electronic products, representing 63.2 percent of the total exports, went up 14.7 percent to $2.694 billion in August this year from $2.349 billion a year ago.

Garments exports, with a 5.7 percent share, managed to grow by only 1.4 percent to $244.57 million from $241.32 million.

The statistics office attributed the slight growth to bulk order of men%u2019s and women%u2019s wear, as well as jerseys, pullovers, cardigans, waistcoats and similar articles of cotton and knitted/crocheted.

Shipments of copper cathodes by the country%u2019s lone copper smelting and refining plant, the Philippine Associated Smelting and Refining Corp., became the third-largest export item in August, with sales amounting to $115.53 million, representing 298.4 percent growth from just $29 million a year earlier.

sandrn

October 15th, 2006, 02:07 PM

The Poro Point report belongs to the Maritime Industry thread and not here.

Remittances rose 15% to $8.1b in 1st 8 months
http://www.manilastandardtoday.com/?page=business2_oct14_2006

Remittances of the country%u2019s over eight million migrant workers rose to $8.098 billion from January to August this year, up 15 percent from $8.10 billion year-on-year, the Bangko Sentral ng Pilipinas reported yesterday.

Remittances for the month of August increased 12 percent to $1.09 billion from $972 million a year ago and 4.15 percent more than $1.05 billion in July this year.

The central bank credited the higher figure to rising demand for Filipino workers and the improved efficiency in the services of banks and other remittance money centers.

Remittances this year are expected to increase 11 percent to $11.87 billion from last year%u2019s $10.7 billion. Eileen A. Mencias

3cr

October 15th, 2006, 08:28 PM

3cr

October 15th, 2006, 10:00 PM

English language is vital if the country is to realize BPO/ITES promise/potential...

Help wanted for Philippines outsourcing
By David Llorito
Asia Times
http://www.atimes.com/atimes/Southeast_Asia/HE10Ae02.html

MANILA - Has outsourcing to the Philippines already hit a human-resource barrier? There are growing indications that something may be amiss in the country's fastest-growing industry.

Never before has Philippine labor had such negotiating power. Call center recruits are now being offered signing bonuses before they start work. Employees are given bonuses for finding new recruits - more often than not poached from other call centers. Still, call center managers complain about the lack of workers who are able to speak American English.

The explosive growth of business process outsourcing (BPO) has plugged the economy of the Philippines into the global services industry, raising high new hopes about the country's economic prospects. Just 10 years ago, economic analysts and pundits concurred that the future of the predominantly agrarian economy lay in exporting fruit, seafood, garments, low-end electronics, and people.

Nowadays, Filipino workers are increasingly doing the information technology enabled services (ITES) once held by low or middle-income-earning Americans, landing jobs in everything from accounting, payroll processing, credit-card administration, revenue management, database management, supply-chain management, and business intelligence to long-distance warehouse and inventory management.

Since 2000, outsourcing companies have sprouted like mushrooms throughout major Philippine cities, including Manila, Clark (the former US military base in Pampanga province), Cebu, Dumaguete and Davao, catering largely to US firms seeking cheap labor to handle so-called "cyberservices", including customer care, back-office processing, data transcription and other information-technology-related services.

Less-known urban centers, such as Iloilo Bacolod, Lipa, Naga, Tacloban and Subic, have more recently become BPO hot spots as multinational demand for cheap, English-language services grows. In five years, outsourcing has emerged as one of the Philippines' top job generators and foreign currency earners, second only to merchandise and labor exports.

Until now, it seemed as though the sky was the limit. Mitchell Locsin, executive director of the Business Processing Association Philippines (BPA/P), an umbrella organization of ITES firms in the Philippines, said that the industry currently employed around 245,000 people, 68% of which work at call centers.

In 2005, the industry's total revenues reached US$2.4 billion, almost double the previous year's $1.5 billion, he said, optimistically estimating that this year's outsourcing revenues would jump to $3.6 billion.

"The Philippines has barely scratched the surface of the huge outsourcing market in the United States," contended Locsin, estimating that at current growth rates the outsourcing industry would employ over a million people and generate revenues of $13 billion by 2010.

Shallow labor pool

But if these projections are to be met, outsourcers will have to find ways to bridge a huge emerging labor supply gap. Damian Mapa, commissioner of the Commission for Information and Communications Technology (CITC), a government body, estimated that from 2006 to 2010, the outsourcing industry may suffer a recruitment shortfall of 273,000 English speakers - potentially a large enough gap to drive multinational companies to other offshore destinations, such as emerging economies in Eastern Europe.

Nowhere is this problem more acute than in Philippines-based call centers, which the CITC estimates will account for 55% of the skilled labor shortfall. Industry leaders say the hiring growth rate last year was particularly low at 2-4% due to a lack of skilled applicants. For every new hire, industry leaders say they receive about five "near-hires", or applicants who must undergo extensive training in oral English and keyboarding before they meet minimum job requirements.

The future of the industry is clearly at stake. "ITES or cyberservices are certainly the future of the Philippines," said Henry Schumacher, executive director of the European Chamber of Commerce in the Philippines. "But that will not work unless you have English as a communicating base, and we have seen over the last maybe 10 years that the English speaking capability [of Filipinos] has declined. English was always one of the [Philippines'] competitive advantages."

Danilo Cruz, under secretary of the government's Department of Labor and Employment, added, "We used to be the third-largest English-speaking nation, but call centers and medical transcription firms have failed to hire 100,000 [workers] they expected to employ in 2005."

Carol Dominguez, president and chief executive officer of the John Clements Consultants, a human resources and executive search consulting company, described the emerging skilled labor shortage as a "national emergency".

It may come as a surprise that spoken English is actually in decline in the Philippines, given that the country is a former American colony known for its enthusiastic embrace of US fast food and pop culture. Manila-based experts said that many factors had contributed to the recent national decline in English language proficiency.

Schumacher, who has lived in the Philippines for more than three decades, points to several factors, namely the widespread use of "Taglish", a mongrel mix of the local Tagalog dialect and English, on television and in advertising, as well as the widespread notion that English is somehow an "elitist" language.

Politicians are also to blame. After the 1986 "people power" revolution that toppled dictator Ferdinand Marcos, nationalistic framers of the new 1987 constitution mandated the use of Filipino or Tagalog as the main medium of instruction in schools in a drive to promote a sense of "Filipino identity".

However, English has remained the language of business and trade for the Philippines' export-geared economy. Nowadays, Filipinos' widespread use of "Taglish" often perplexes their international business partners, including Norwegian shipping company managers, who say that they often cross linguistic wires when speaking with their Filipino ship crews. (Filipinos currently account for about 25% of the global supply of seafarers.)

Brain drain

Has the Philippines reached the limit of its absorptive capacity for outsourcing? In 2000, there were only four call centers in the country, employing 2,400 call-center agents. At the end of 2005, there were at least 105 call centers with over 112,000 workers, representing a 60% per annum growth surge.

According to Dan Sebastian Reyes, chief executive officer of Clientlogic, a call-center firm, that's a growth record that not even India, which currently employs 350,000 call-center agents but is now facing similar human resource restraints, has been able to replicate.

Significantly, the frenetic growth of the Philippines' outsourcing industry coincided with an unfortunate concomitant trend: the brain-drain of skilled professionals to higher paying countries. From the 1970s to the 1990s, the bulk of Filipino labor exports were composed of low-skilled workers, mostly construction workers, domestic helpers, and entertainers.

By 2000, however, officials from the Philippine Overseas Employment Administration (POEA), a government agency managing the placement of overseas Filipino workers, recorded a rising tide of fleeing skilled workers and professionals, including doctors, nurses, engineers, information technology professionals and banking professionals, among others. In other words, precisely the types of workers outsourcing companies would most like to hire.

The growing scarcity of English speakers has alarmed the Philippines-based outsourcing community, which executives say they began to notice shortages as early as 2003. Many of these companies have since established training programs at private universities and human resource consulting companies that train potential recruits.

For instance, outsourcer FuturePerfect is helping Mapua Institute of Technology, one of the leading engineering and technology schools in Manila, to develop their English language curriculum and retrain their English instructors. IBM-Daksh, a business process outsourcing services provider, is providing voice and accent training for students at the Asia-Pacific College, a business college based in Makati.

John Clements Consulting, meanwhile, has tied up with the state-owned Technical Education and Skills Development Authority (Tesda) to train so-called "near-hires" in several remote regions of the Philippines. According to Dominguez, John Clements' CEO, this has led to a 60% absorption rate of students trained in the program.

Sensing the potential loss in one of the few bright spots in the Philippines' economy, the national government has also started to throw money at the problem. President Gloria Macapagal-Arroyo recently earmarked P500 million ($9.8 million) for outsourcing industry training. As a part of that scheme, students interested in outsourcing jobs are given vouchers that may be used for tuition at government-accredited human resources institutions.

Locsin, head of the BPA/P outsourcing trade group, claimed that government and private efforts had already started to address the problem. Perhaps predictably, he played down the labor shortage, chalking it up to media hype. "I've met with several call centers lately, and they told me their hiring rate of fresh graduates who walk in to apply is now significantly higher at 8-10%," said Locsin. "Last year, it was 2-4%. Things are improving."

He noted that many big multinational firms, including Chevron, Shell, JP Morgan, Dell, IBM Daksh, Safeway, American Online, Manulife and Siemens, to name a few, last year all increased their outsourcing presence in the Philippines. "In the first four months of this year, about 14 more companies are coming in, two of them call centers, and the rest back-office processing," Locsin said.

"That's a good sign because you don't really need very, very good English speakers, but rather [individuals] with technical backgrounds and good written English, which we have an adequate supply of."

That may not be exactly how big multinational companies view the situation, particularly as other global English-speaking countries vie for a share of outsourcing contracts. As the Philippines reaches ever-deeper into its pool of semi-skilled labor - hype or no hype - the viability of its fastest-growing industry is still very much in doubt.

3cr

October 15th, 2006, 10:05 PM

Philippines scoffs at China electronics threat
By David L Llorito
Asia Times
http://www.atimes.com/atimes/Southeast_Asia/HI16Ae01.html

MANILA - When China acceded to the World Trade Organization in 2001, many economic analysts predicted that the Philippine electronics industry's days were numbered. Five years later, the industry has shown a surprising resilience, while some Philippine producers are leveraging rather than suffering from China's low costs.

The electronics industry is far and away the Philippines' most important export industry, directly employing more than 400,000 workers and last year accounting for more than 66% of the country's total merchandise exports, with sales of about US$27 billion. Philippine producers cover the gamut, supplying bits and pieces for consumer, computer, communications, automotive, medical and industrial products - all areas in which China also competes.

Arthur Tan, president and chief executive officer of the Ayala Group's Integrated Microelectronics (IMI), foresees a bright corporate future on the competitive horizon. In the first half of 2006, IMI's revenues rose 16% year on year, and Tan expects an even stronger second half, when orders traditionally pick up in anticipation of the United States' high-spending holiday season.

Tan says IMI, like an increasing number of Southeast Asian businesses, sees China's rise as more of an opportunity than a threat.

"While it is true that the electronics industry in China has grown tremendously over the past five years, China is not the answer to all the electronics-manufacturing needs," said Tan. "The Philippines maintains a competitive advantage in complex electronics assembly like the assembly of optical disk drives and hard-disk drives."

To be sure, IMI, with production facilities in the Philippines, Singapore and the US, is one of the Philippines' few truly global companies. And rather than simply acquiescing to China's low-cost threat, it's leveraging it to its competitive advantage. IMI is now simultaneously expanding its production facilities at home and in China, where its subsidiary, Speedy-Tech Electronics, just commenced operations at its fourth plant, in Chongqing.

"We are studying expansion in other low-cost locations like other parts of China, Vietnam and Indonesia," Tan said.

The Philippines has long been a hub for multinational electronics producers where Toshiba, Acer, Fujitsu, IBM, Intel, Hewlett-Packard, Dell, Panasonic, Lenovo and Samsung all have substantial production facilities. Cebu Mitsumi, which produces computer peripherals and optical pick-up devices, employs 17,000 workers in Cebu City, the biggest single employer in the Philippines. Amkor Annam employs 8,000 workers to produce integrated circuits for global markets. Epson and Lexmark, producers of terminal printers and print-heads, also have big Philippines-based operations.

The Philippines' electronics industry produced 72 million magnetic heads, 36 million digital signal displays used in cellular phones, 30 million hard-disk drives, 11 million liquid crystal displays, and 8 million optical disk drives for these and other multinational producers last year, according to industry statistics.

Law of comparative advantage

These are the very sort of companies that were supposed to have in droves fled such places as the Philippines for lower-cost China. Instead, the law of comparative advantage is playing out in textbook fashion, and the Philippines has carved out various profitable niches in the cutthroat global-electronics industry.

"We are competitive in design and product development," said Tan. He noted that Intel and Texas Instruments tap Filipino engineers for integrated circuit (IC) packaging design, while Rohm uses Filipino engineers to design the internal circuits themselves; Lexmark employs a growing number of Filipino printer-software designers, while IMI develops state-of-the-art short-range wireless connectivity devices.

"Whenever we ask [multinational producers] why they continue to do business here and why some of them even expand their operations, they all point to the quality of Filipino workers as their main reason," Tan said.

Philippine electronics export value is equivalent to a mere 2% of total global production, and only 5% of the Asia-Pacific region's output. In terms of volume production, the Philippines lags its Asian neighbors China, South Korea, Taiwan, Singapore, Malaysia and even Thailand. Still, Philippines-based producers, of which Japanese companies represent 30% of the total, have steadily moved up the value-added ladder and carved out various profitable market niches.

Ernie Santiago, executive director of Semiconductor and Electronics Industries in the Philippines (SEIPI), emphasizes the industry's staying power in the face of Chinese competition. He notes that the Philippines accounts for 10% of the world's total semiconductor manufacturing, and 50% of global production for 2.5-inch hard-disk drives.

"Most leading [electronics] companies are here with us," he said. "Intel is here in the country producing Pentium microprocessors, Texas Instruments producing the DSP, or the digital signal processor. One hundred percent of the brain of cellular phones, of Nokia phones, is done here in the Philippines by Texas Instruments."

One reason multinational companies have stayed put, Santiago reckons, is that they know the Philippine terrain well. Intel established an assembly and testing facility in the Philippines in 1974. After that, many of the then small, now big, global chipmakers followed, including Texas Instruments, Philips, Sanyo and Rohm Semiconductors.

After the 1985 Plaza Accord, the sharp appreciation of the yen forced Japanese producers to establish manufacturing facilities in lower-cost Southeast Asia, including the Philippines. In a recent independent study, Gwendolyn Tecson, economics professor at the University of the Philippines, notes that that allowed for the hard-disk-drive (HDD) industry to take root in the Philippines, including various downstream supply industries.

The major HDD manufacturers "have cited three factors, namely the strategic location of the country, the relative abundance of engineers and technicians, and worker trainability, especially in terms of their English-language proficiency", Tecson said. "On the other hand, the supplier firms chose the Philippines to be near the majors."

A highly developed, reliable supply chain is another reason the majors have so far stayed put in the Philippines, industry analysts contend. According to SEIPI's Santiago, the presence of these major players has encouraged the development of various Filipino-owned suppliers, including IMI, Ionics, PSI Technologies, Fastech, and Team Electronics, that produce high-end components for the majors. Santiago says the Philippines is home to 883 electronics-related firms, 28% of which are Filipino-owned.

Could this still change? In 2005, many in the industry were concerned when Toshiba decided to transfer its main laptop-computer manufacturing facility from the Philippines to lower-cost China. That led to widespread speculation that other big multinational players might follow suit.

Industry executives explain that labor cost is only one factor companies weigh when deciding where to locate their manufacturing facilities. Terry Pacis, Intel's Philippine-based manager for external relations, says location decisions are increasingly influenced by the local availability of technical expertise - rather than low wages.

She also says major electronics players prefer to establish presences in several different locations to hedge the risks of over-reliance on one or two particular countries. Besides the Philippines, she notes, Intel operates test and assembly plants in China, Malaysia and India.

SEIPI's Santiago says that despite Toshiba's recent pullout, new electronics-related investments continue to pour in. He anticipates the industry will draw $1 billion of new investments this year, boosting total exports by as much as 10% year on year.

"We do not have good roads, we do not have a better peace-and-order situation, and other countries have better governance," Santiago said. "But the point is they are still here. Why? Because we have good people."

3cr

October 15th, 2006, 10:13 PM

Philippines will be off IMF monitoring in April
Inquirer
http://business.inq7.net/money/topstories/view_article.php?article_id=26661

THE International Monetary Fund will let the Philippines off its post-program monitoring in April, IMF country representative Reza Baqir said Friday.

The government has been working to bring this development about for some time.

Baquir said at a media briefing on mid-2006 post-program monitoring, or PPM, discussions: “The end of the PPM is a sign of the economy’s strength and a sign that vulnerabilities continue to fall ... external viability continues to improve and it is a development that we will welcome.”

He said that a decision was made at IMF spring meetings early this year to extend the PPM for another year, but no extension was made in the IMF executive board’s discussion in Washington on the Philippines Wednesday.

The PPM provides for more frequent consultations between the IMF and member countries whose funding arrangements have expired but which continue to have outstanding credit with the Fund.

For the Philippines, it had been stretched out every year since 2001 as a buffer against the government’s financial problems.

Under this monitoring scheme, the IMF reviews the Philippine economic performance twice a year, the last of which was completed in early August. It can offer advice but may no longer impose on policy, such as on public sector borrowings.

In a report released Friday in Washington following the end of the mid-2006 PPM discussions on Wednesday, the IMF executive directors commended Philippine authorities for the country’s strong macroeconomic performance -- including robust growth, moderating inflation, and an improved external position – and for progress in structural reforms.

“While stronger fundamentals have made the Philippines more resilient and less vulnerable to shocks, [the IMF] cautioned that important vulnerabilities remain,” the report said. “Although on a declining path, the public debt is still high, with external commercial borrowing requirements continuing to be sizeable.”

3cr

October 15th, 2006, 10:19 PM

P500-M export dev’t fund eyed
By Doris Dumlao
Inquirer
http://business.inq7.net/money/topstories/view_article.php?article_id=26842

PROJECTING THAT THE PESO WILL REMAIN strong in the long haul, Economic Planning Secretary Romulo Neri said he would push for the creation of a P500-million government-funded export development fund to help boost the competitiveness of exporters.

Neri, also a member of the Bangko Sentral ng Pilipinas’ policy-making Monetary Board, told reporters that remittances from overseas Filipino workers and earnings from the business process outsourcing sector that were “growing by leaps and bounds” would inevitably keep the peso strong against the dollar.

“Intervention in the market will be basically to manage fluctuations but if the dollars keep on coming in, necessarily we may be in for a stronger peso over the long run and the best way to counter that is to do what the Japanese did—that is to keep on upgrading and upgrading the (export) product,” Neri said.

Neri said the Bangko Sentral ng Pilipinas and the Department of Trade and Industry must now act on his proposal to establish a new export development fund that will help the sector upgrade product quality, design, packaging and global marketing.

“The example of Japan is that as the yen appreciated, they kept upgrading and upgrading (the export sector),” Neri said.

If the Philippine export sector could also upgrade product quality, he said exporters could charge higher dollar prices without losing market share despite the peso’s sharp gains against the dollar.

Since the start of the year, the local currency has appreciated by P3.09 or nearly 6 percent against the dollar. Last Friday, the exchange rate touched 49.99 before closing at 50:$1.

“If we can convert this disadvantage into an advantage, then we can have a much stronger hold on the export market, because we won’t be competing on the basis of price alone. We’ll be competing based on quality, which is a better way to compete,” Neri stressed.

The BSP and the DTI are willing to shell out money for an export development fund. But the BSP wanted the export sector to contribute to the fund too.

“The BSP and the DTI should talk because I don’t think the exporters can set up a counterpart funding. It’s not realistic to ask them,” Neri said.

3cr

October 15th, 2006, 10:27 PM

Gov’t corporations told to set revenue, spending targets
By Michelle Remo
Inquirer
http://business.inq7.net/money/topstories/view_article.php?article_id=26663

GOVERNMENT-OWNED or -controlled corporations (GOCCs) will be asked to set their medium-term revenue and expenditure targets, in line with the national government’s plan to consolidate its fiscal reform program, an official said.

Finance Undersecretary Gil Beltran said that with marked progress in the government's deficit-reduction efforts, fiscal authorities would now focus on improving the performance of GOCCs in terms of generating revenue for the government and in providing public services.

“Fiscal discipline should be exercised by everybody, not just the national government,” Beltran told reporters in an interview.

Beltran said GOCCs, which at present operate without medium-term targets, should list their own financial goals and be made accountable for these, as a way of encouraging them to improve performance.

Officials believe the government is on its way to balancing the budget in a couple of years, with the budget deficit expected to fall below a target ceiling of P125.0 billion this year from P146.8 billion in 2005.

Beltran said fiscal reform would not be complete if GOCCs would have no revenue-enhancement and expenditure-management programs.

GOCCs largely depend on the national government for their operations, and on sovereign guarantee for their borrowings.

Ongoing is technical assistance from the Asian Development Bank on how to improve the performance of GOCCs, Beltran said. It entails doing a study on what should be the specific goals of each GOCC, with the goals based on its mandate.

The study will also determine the appropriate amount of equity that the government should infuse in GOCCs for these to efficiently fulfill their mandates, and the extent of subsidized public services that they can afford.

“Once we [the national government] give them the appropriate equity, they should be accountable for the attainment of the mandates for which they were created,” Beltran said.

GOCCs recorded a combined budget surplus of P1.9 billion in the first quarter of the year, a significant turnaround from a P8.4-billion deficit in the same period last year.

That budget surplus helped cut the consolidated public sector deficit -- the combined deficit of the national government, social security institutions, local government units and GOCCs -- by 35 percent to P33.2 billion in the first quarter from P51.1 billion in the same period last year.

3cr

October 16th, 2006, 01:41 AM

Gov't should investigate and look into Yunus' highly successful microfinancing model for alleviating our own poverty problems that in turn is holding up our economic progress.

Nobel winner Yunus pledges to help end poverty
ABS-CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryId=53262

CHITTAGONG, Bangladesh (Reuters) - Bangladeshi Nobel Peace Prize laureate Muhammad Yunus pledged on Sunday to help eradicate poverty worldwide at the village where he conceived the concept of microfinance.

"I have come here to my ancestral home where I was born and first introduced the concept of microfinance," he told thousands of cheering villagers in his southeastern Chittagong district.

"Now I have a bigger responsibility to help all the poor in Bangladesh and in the rest of the world out of poverty and I believe this mission can be achieved," Yunus said as Bangladesh celebrated his victory.

Yunus and the Grameen Bank he founded were awarded the 2006 Nobel Peace Prize on Friday for grassroots efforts to lift millions out of poverty that earned him the nickname "banker to the poor."

His pioneering model went on to be copied in over 100 countries from the United States to Uganda.

Many said they hoped the Nobel Peace Prize -- the first in any category for a Bangladeshi -- would help usher in a less troubled future for his country, as Bangladesh braces for what might be a violent general election next January.

Yunus said: "We hope to take these festivities to the next election by narrowing the differences between the parties,"

The government is due to be dissolved later this month when an independent caretaker administration will be appointed.

But the main political parties are finding it difficult to agree to the caretaker authority's composition, analysts say. Bangladesh's ruling party and opposition groups have been locked in talks for weeks trying for a consensus on electoral reform.

"The country is sharing the joy, forgetting all differences," said Professor Mohammad Zafar Iqbal, a university teacher. "Such unity has not been seen in this country for many years."

Economist Abul Barakat said: "His achievements have brought the nation together at a time when such unity was needed to take a breather from bitterness, hatred and confrontation."

Yunus said: "If they wanted, the politicians could reach any consensus in a single meeting."

"The next election is going to be very important as it will be the first after we attained a Nobel prize for the country. Politicians should realize that and be very cautious in their actions."

But the quiet Yunus would not say whether he would accept the job as caretaker as many in Bangladesh believe he should.

"Time will tell," was his reply.

marites4

October 16th, 2006, 02:13 AM

Mga kababayan magtulungan tayo at magkaisa para sa kaunlaran at ikabubuti ng lahat. Yon lang ang sekreto ng mga bansang kapitbahay naten na mga mauunlad na. salamat po.

demented_pigeon

October 16th, 2006, 03:05 AM

kung gusto natin umunlad ang ekonomiya, magtulungan tayo. sa totoo lang, ang sinasabing pagangat sa ating ekonomiya sa kasalukuyan ay walang kwenta kung di rin naman mararamdaman ng higit sa 20 milyong pilipino na naghihikahos sa malubhang kahirapan. panahon na para maging seryoso sa lehitimong pambansang industriyalisasyon. ang mga mabibigit na industriya gaya ng paggawa ng kotse, barko, kemikal, at maging lehitimong repormang agraryo ay dapat seryosohin ng pamahalaan. panahon na rin na mamuhunan ang ating lokal na mga kapitalista sa ating mga industriya. Masyadong binibigyang pansin ang mga dayuhang mamumuhunan pero kinakaligtaan ang ating mga lokal na mamumuhunan. dapat ang ating mga lokal na kapitalista ang nasa unahan sa pagpopondo ng mga proyektong imprastraktura.

marites4

October 16th, 2006, 03:58 AM

chixbebe

October 16th, 2006, 09:24 AM

Stock market to test 2,600-point level again (http://www.manilastandardtoday.com/?page=business4_oct16_2006)

The stock market is expected to again test the 2,600-point index target level for the week, given the country’s overall favorable economic outlook.

“Barring any untoward events over the weekend, the market should be on track to test the 2,600 index target. Whether or not this resistance will be breach remains indeterminate given that the market has failed several times in the past,” Bpitrade.com said.

AB Capital Securities analyst Erwin Balita said the main index continued to move within its medium-term bullish uptrend while the market tended to remain positive.

Peugeot206

October 16th, 2006, 10:26 AM

Gov't should investigate and look into Yunus' highly successful microfinancing model for alleviating our own poverty problems that in turn is holding up our economic progress.

http://serp-p.pids.gov.ph/publications/bykey.phtml?keyword=microfinance

The government has been looking into it. At least the research and policy advisory academics have.

Explore that domain and you'll see what other interesting things the government has been looking into.

How so many people can loathe the Philippine government, oppose and obstruct the Philippine government, and keep electing scoundrels and incompetents to the Philippine government year after year, and then hope that this same government will explore and implement solutions to poverty in the Philippines is completely beyond me.

Grameen Bank was started by an individual moved to fight poverty, not some inert and dysfunctional Bangladeshi government bureaucracy.

The solution to problems in the Philippines is not government, and it isn't the Church or any other organisation. It's in the individual Filipino. You have the choice to pay taxes, not pay bribes, and generally be honest and decent in all your actions.

So, when you say the government should look into microfinance, why can't you look into microfinance too. There are plenty of avenues for the individual to pursue to help in the Philippines in this context.

Personally, I'm doing some research for the Philippine government, and my policy recommendations will not be along the lines of "the government should do this"; it is going to be along the lines of "it should be made easier for the individual to do this".

A major problem is that most career bureaucrats and academics here know that the Philippine government is at the end of its tether, and can't be made to shoulder any more burdens. So, it must be made easier for the private sector and individuals to do more.

When people say that the government should do more, it simply cannot. Hamstrung by a lack of funds and burdened with too many idiots, why would you as a Philippine voter possibly want to give them another department to look into something? It's just an another route for money and initiative to disappear.

demented_pigeon

October 16th, 2006, 10:40 AM

^^ lumang usapin na iyang micro-financing na sinasabi. matagal na sana iyang sinusoportahan lalo na iyong mga micro-financing na ginagawa ng mga cooperatives. ang mga cooperatives SANA ang paraan para makilahok ang mga ordinaryong pilipino sa pagpapatakbo ng ekonomiya. halimbawa na lamang ang tinatawag na solidary economy ng Brazil na ang ilang mga pabrika, negosyo ay pagmamay-ari at pinatatakbo mismo ng mga manggagawa. Bagaman, maliit na porsyento ito sa kabuuang ekonomiya ng Brazil, malaki pa rin ang tulong nito dahil halos $20 million ang naitutulong nito. Sa Pilipinas puwedeng tulungan ang "underground" economy na binubuo ng mga sari-sari stores, maliliit na negosyo, side-walk vendors, at mga maliliit na pabrika ng kung anu-ano dahil nakatutulong silang magbigay ng trabaho sa halos 90 porsyento ng labor force ng pilipinas. Bagaman, di gaano kalakihan ang naitutulong nilang buwis sa pamahalaan, mainam na tingnan ng pamahalaan itong sektor bilang may potensyal na husayin ang business skills ng Pilipino at maging daan sa paglaban sa kahirapan. Sana bigyan na ng sapat na tulong ng pamahalaan ang cooperative movement ng Pilipinas at bigyan ng kaunting tulong ang mga kabilang sa underground economy.

Peugeot206

October 16th, 2006, 11:08 AM

chixbebe

October 16th, 2006, 11:32 AM

Philippine shares seen rising this week

Philippine share prices are expected to rise this week ahead of the release of favorable third-quarter corporate results, dealers said last Friday.

The market was down earlier last week but recovered starting from Thursday due to bargain-hunting and the release of positive economic news.

Shortly before the market opened Friday, the National Statistics Office announced that exports in August rose 21.3 percent over the same period last year to $4.26 billion.

Migan

October 16th, 2006, 07:16 PM

How so many people can loathe the Philippine government, oppose and obstruct the Philippine government, and keep electing scoundrels and incompetents to the Philippine government year after year, and then hope that this same government will explore and implement solutions to poverty in the Philippines is completely beyond me.........When people say that the government should do more, it simply cannot. Hamstrung by a lack of funds and burdened with too many idiots, why would you as a Philippine voter possibly want to give them another department to look into something? It's just an another route for money and initiative to disappear.you sure hit the g-spot there :D sadly, there are still a lot of incompetent and undeserving "public servants" out there offering poor service just waiting to be re-elected by an abundant, poorly informed "poor" majority, not fully understanding the consequences of their actions. right now its looks more like an endless cycle... there goes part of the economy. I sure do hope your research bears fruit for this is such a complicated country that we have and i do believe a lot of thorough study should really be conducted... at least to better understand ourselves. i like the philosophy behind "making things easier" for potential private and individual "participants" and for them to take initiative and play out significant roles, like in the realm of microfinance. i can only start to wonder where all this should begin... if not yet in the works...

demented_pigeon was merely acknowledging the benefits of micro-financing and that it has been long talked about. it seems there were attempts of this in the past through "cooperatives", but i'm not sure how it turned out. he is also hoping for significant support from the government regarding the matter.

Sa Pilipinas puwedeng tulungan ang "underground" economy na binubuo ng mga sari-sari stores, maliliit na negosyo, side-walk vendors, at mga maliliit na pabrika ng kung anu-ano dahil nakatutulong silang magbigay ng trabaho sa halos 90 porsyento ng labor force ng pilipinas. Bagaman, di gaano kalakihan ang naitutulong nilang buwis sa pamahalaan, mainam na tingnan ng pamahalaan itong sektor bilang may potensyal na husayin ang business skills ng Pilipino at maging daan sa paglaban sa kahirapan.hi, naniniwala rin ako na malaki ang maitutulong nito sa tunay na pagunlad ng ating bansa, at hindi na lamang puro remittances umaasa ang ating ekonomiya. tama lang naman na humingi ng tulong sa gobyerno, datapwat hindi ako nakasisiguro kung dapat tayong lubusang umasa sa parte nila. tunay nga na mahahasa ang kabihasnan at tataas ang kalidad ng ating mga manggagawa kung mabibigyan sila ng pagkakataon. tiyak na hindi mauubos ang mga skilled workers natin at sa halip ay dadami pa. naniniwala ako na isa ito sa mga tunay na sagot sa pagraos natin sa kahirapan... sana'y mas bigyang pansin pa ito ng mas nakararaming tao bukod pa sa gobyerno.

---------------------------
September BOP surplus slides

The country's balance of payments surplus dropped 75 percent to $91 million in September from the previous month, the Bangko Sentral ng Pilipinas said Monday. Despite the decline, the September figures brought the country's BOP surplus to $2.62 billion for the first nine months of the year, the highest level yet in 2006 but below the record $2.7 billion surplus achieved in the same period last year. September was the fourth straight month of BOP surpluses due to continuing growth in remittances from Filipinos working abroad, a narrowing trade deficit from higher exports and more foreign direct investment, the BSP said. Pushed abroad by a lack of opportunities at home, around 8 million Filipinos working overseas help keep the domestic economy humming by remitting an average of $1 billion a month to their family and friends. The Philippines posted its seventh straight month of double-digit export growth in August, hitting a record high of $4.261 billion.

The BSP expects to end 2006 with a BOP surplus of around $2 billion, above its original estimate of $1.6 billion, boosted by robust export earnings and remittances. The Philippines had a BOP surplus of $2.41 billion last year.The balance of payments measures a country's foreign exchange transactions with the rest of the world and is closely watched in the Philippines because of government debt of around $76 billion.

source: http://www.abs-cbnnews.com/topofthehour.aspx?StoryId=53337

Sinjin P.

October 18th, 2006, 04:33 AM

Oil companies roll back fuel prices
by 50 centavos a liter

By Paul Anthony A. Isla
Reporter

CONSUMERS will no longer feel so much of a pinch when they refill their gas tanks, as oil companies have once again rolled back the price of diesel, gasoline and kerosene by 50 centavos a liter.

On Tuesday, oil industry officials attributed the latest rollback to the continuous softening of oil prices in the world oil market.

The latest rollback was initiated by oil companies Chevron Philippines Inc., Petron Corp., Pilipinas Shell Petroleum Corp., Seaoil Philippines Corp. and Unioil Petroleum Philippines Inc. on Thursday night, followed by Flying V, Total (Philippines) Corp. on Friday morning.

The latest price reduction brings the total price cut to P1.50 for petroleum products (inclusive of the value-added tax) and P2.50 a kilo (exclusive of the VAT) for liquefied petroleum gas (LPG).

Amid the successive price cuts, oil officials assured that they will continue to grant the one-peso diesel discount to public transport groups amid the price rollback in petroleum products.

According to the Department of Energy (DOE) monitoring, the average price of Dubai crude continued to drop to $56.48 a barrel this month from $59.82 a barrel last month.
DOE said that the average price of unleaded gasoline at the Mean of Platts Singapore (MOPS) also recorded a decrease to $62.19 a barrel this month from $65.86 a barrel last month.

The energy department added that MOPS-based diesel also average lower this month at $72.44 a barrel from $76.95 a barrel in September.

DOE revealed that the international contract price of LPG also dropped to $483.50 a metric ton this month from $560.90 a metric ton in September.

Oil companies also rolled back the price of LPG by two pesos, exclusive of the VAT early this month to also reflect the downtrend in international contract prices of cooking gas.

Energy Secretary Raphael P.M. Lotilla earlier admitted that it was difficult for him to pronounce that oil prices will go down further due to the volatilities in world oil prices.

Lotilla said that world oil prices have slightly spiked between $0.30 and $0.50 a barrel after the Organization of Petroleum Exporting Countries (Opec) announced that it would reduce production output. He added that after a number of days it suddenly dropped by a dollar a barrel.

“Of course, I remain hopeful that world oil prices will continue to go down. And with the strengthening of peso, perhaps we can be optimistic that domestic fuel prices will further soften,” said Lotilla.

The energy chief, likewise, warned that the winter season is entering again, where diesel and LPG are used as heating fuel in the colder countries.

“While the general trend is that there will be a softening of oil prices, it also is possible that it [trend] will defy the historical trend,” Lotilla said.

http://businessmirror.com.ph/eco01.php

Sinjin P.

October 18th, 2006, 04:39 AM

Senate committee thumbs down
DSWD microfinance project

By Butch Fernandez
Reporter

THE chairman of the Senate finance committee thumbed down the proposed P160-million appropriation for the so-called “Tindahan Natin [Our Store]” livelihood project of the Department of Social Welfare and Development, noting that engaging in microfinance lending programs was beyond the competence and mandate of the DSWD.

Presiding over a hearing on the proposed P4.38-billion budget of the DSWD for 2007, Sen. Franklin Drilon informed DSWD Secretary Esperanza Cabral that the Senate would “either realign or totally remove” the P160-million allocation for the lending project in the proposed 2007 budget of DSWD.

“We will have very serious problems about the allocation for the Tindahan Natin outlets, not because the program is not valid, but because your agency’s mandate does not include lending, collection and handling that kind of a project,” he told Cabral.

“The DSWD has no business engaging in microfinancing,” Drilon said. “That is beyond the mandate of that department.”

During the budget hearing, Cabral explained that the “Tindahan Natin” is one of the projects under the Kapit-Bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery of Social Services (Kalahi-Cidss), the flagship poverty-alleviation program of the government.

Under the program, the DSWD would extend soft loans to over 2,600 small-time entrepreneurs who will operate sari-sari stores nationwide. The retail outlets will be identified and endorsed jointly by the DSWD and local government units (LGUs), and accredited by the National Food Authority (NFA).

The “Tindahan Natin” outlets offer basic commodities such as rice, noodles, sugar and canned goods at prices lower than market prices.

Scrutinizing the project, Drilon noted that the DSWD does not have the personnel to competently and professionally conduct credit investigation, project evaluation and credit collection tasks of the microfinancing program.

Moreover, noting that the functions of the DSWD have been devolved to local governments units, he said the DSWD does not have the manpower at the grassroots level to conduct a viable and credible lending program.

He expressed fear that should the DSWD fail to achieve satisfactory credit-collection results from its 2,600 clients, the Tindahan Natin project may end up like the failed lending programs of past administrations such as the Masagana 99 and KKK livelihood programs of the Marcos administration.

Citing newspaper reports, Drilon added that Malacañang itself was about to amend a controversial Executive Order 558, which critics have said would open the floodgates to a new round of costly government dole-outs.

Reports said President Arroyo was slated to issue the amended order that will effectively kill the government’s plan to have government-owned or -controlled corporations (GOCCs) and government nonfinancial agencies (GNFAs) lend out money at low interest rates to private borrowers, similar to the Tindahan Natin program of the DSWD.

Finance Secretary Margarito Teves confirmed a plan to issue an amended order, EO 558-A, to prevent a repeat of previous state-funded dole-out programs that had cost the government an estimated P40 billion in losses since the 1970s. Reports said the amended order would restrict the lending program proposed to be implemented by the DSWD.

http://businessmirror.com.ph/eco02.php

Sinjin P.

October 18th, 2006, 04:41 AM

‘Project monitoring should
stay with Neda, not PMS’

By Rommer M. Balaba
Reporter

THE project monitoring and evaluation functions must remain with the National Economic and Development Authority (Neda) as it is more technically prepared than the Presidential Management Staff, a former senior planning official said Tuesday.

“You must have it where it will be more efficient [to implement]. . . at the end of the day you would just be introducing inefficiencies if the [monitoring and evaluation] functions are removed from Neda,” Gilberto M. Llanto told BusinessMirror in a telephone interview.

Llanto was Neda deputy director general until early in President Arroyo’s first term.

“One of Neda’s primary mandate is to monitor [the implementation of] projects so that it can inform, through feedbacks, on policies which are part of development administration
. . . as it also helps in the formulation of projects under the MTPDP/MTPIP,” Llanto added.

President Arroyo in August issued Executive Order 564 restructuring the Infrastructure Monitoring System she created in earlier order, which effectively subsumes the Regional Project Monitoring and Evaluation System (RPMES) in place at Neda. PMS chief Arthur C. Yap was tasked to head the new monitoring task force.

“Removing from Neda [the] monitoring and evaluation functions will weaken the development administration loop: planning, programming and budgeting and monitoring and evaluation. Instead the government should strengthen the RPMES by making it more meaningful,” Llanto said, in such a way that the current system must also provide actual development impacts of projects and not just their financial side.

President Arroyo reasoned there was a need for a full-time infrastructure monitoring task force considering the “low absorptive capacities of agencies implementing pump-priming projects, especially infrastructure projects.”

Some Neda personnel, however, believe the planning agency was better structured for this kind of work, having regional offices that undertake actual monitoring and evaluation groundwork especially for donor-funded projects.

“It is only that Neda failed to effectively utilize RPMES. . . so let us just strengthen it,” Llanto said.

http://businessmirror.com.ph/eco03.php

Sinjin P.

October 18th, 2006, 04:46 AM

ERC seeks comments on revised OATS rules

By Paul Isla
Reporter

THE Energy Regulatory Commission (ERC) said Tuesday it seeks the public’s comments on the third draft of the revised rules, terms and conditions for the Open Access Transmission Service (OATS) Rules proposed by the National Transmission Corp. (Transco).

ERC said that the draft revised OATS Rules can be downloaded at the ERC’s web site at www.erc.gov.ph, comments thereon may be submitted through mail (postal or electronic) on or before October 29 this year.

“The revised OATS Rules are significant guiding principles in a restructured electric environment as it spells out the responsibilities of the transmission provider; the functions of the system operator; and the responsibilities that should be accepted by transmission customers as a condition for receiving the services,” ERC commissioner and officer-in-charge Maria Teresa A. R. Castañeda said.

Transco proposed to revise the previously approved OATS Rules to include, among others, the methodology on how the transmission provider will recover the cost for providing regulated transmission services, excluded services from the maximum annual revenue (MAR), and other charges, and to synchronize such with the ERC’s latest policies pertaining to the connection asset definition and end-user connection.

The revised OATS Rules already contained comments and suggestions from the industry participants and from the ERC, but excluded sections on contestability of connection assets, loss factor and cost recovery mechanism for the ancillary services.

http://businessmirror.com.ph/eco04.php

Sinjin P.

October 18th, 2006, 04:49 AM

Ayala sells stake in Burger King

By Honey Madrilejos-Reyes
Reporter

PHILIPPINES’ oldest conglomerate Ayala Corp. has exited the fast food business following the sale of its entire 99-percent stake in PFN Holdings Corp. (PFN) to BK Titans Inc. (BKT). Details of the transaction, however, were not disclosed.

PFN owns Perf Restaurants Inc. (Perf), a franchisee of BK Asiapac Pte., Ltd (BK Asiapac), which, in turn, is the umbrella company of Burger King in the Asia-Pacific region.

The buyer, BKT, is a company organized by Bert Lina, Lito Alvarez, Manuel V. Pangilinan, Ricky Vargas and Wilson Young. According to a statement, the group decided to acquire the business because “it understands and appreciates the opportunities available to Perf, the quality and dedication of its employees, and the support of its business partners.”

“It also fully supports the strategy of BK Asiapac and its programs to make the Burger King brand exceptional in this market.”

For its part, BK Asiapac said it looks forward to working with BKT towards strengthening the Burger King franchise in the Philippines.

“We are confident that the strength of the Burger King brand, world renowned for our flame-broiled Whopper®, combined with the passion and commitment of the principals of BKT will provide the foundation for future growth,” said BK Asiapac president Peter Tan.

As for Ayala, it said the sale of its majority stake in PFN is consistent with its strategy to focus on its core businesses, which include real estate, financial services, telecommunications, utilities and electronics. Ayala’s stock price closed at P480 at Tuesday’s trading.

The company exited the food business in 2001, when it sold Pure Foods Corp. to San Miguel Corp. The Burger King business, however, was not part of that transaction. Since that time, Ayala and BK Asiapac have looked to place the business in the hands of an ideal owner who is committed to the quick service restaurant industry.

There are about 22 Burger King branches currently operating in the country. This number is relatively small compared to the hundreds of branches of both Jollibee and Mc- Donalds nationwide.

The Burger King System operates more than 11,000 restaurants in all 50 states of the US and in more than 65 countries and US territories worldwide. Since it was founded in Miami in 1954, the Burger King brand has become recognized for its great flame-broiled taste and “have it your way” food customization.

http://businessmirror.com.ph/comp01.php

____________________

RP stocks post biggest loss in four weeks;
PLDT, AC and SMPH fell

By Ian Sayson
Bloomberg

PHILIPPINE stocks lost the most in four weeks on speculation North Korea may stage a second nuclear weapons test, sparking security concerns in the region. Ayala Corp. and SM Prime Holdings Inc. declined.

Stocks also fell after the government said it posted a budget deficit last month partly because it missed tax collections.

“Some investors are worried that another nuclear weapons test will escalate tensions in the region,’’ said Jenny Ting, who helps manage about $4.7 billion at Bank of the Philippine Islands in Manila. “The government’s tax shortfall is alarming some people, making it attractive for some investors to lock in gains.’’

Philippine Long Distance Telephone Co. (PLDT) dropped after the government ordered it to stop offering mobile-phone users unlimited text messaging at a fixed rate. Bank of the Philippine Islands declined to a four-week low after the central bank reported a slowdown in commercial bank lending in August.

The Philippine Stock Exchange Index lost 40.72, or 1.6 percent, to 2543.48 at the noon close in Manila, its biggest decline since September 20. The measure yesterday closed at the highest since May 8 after touching an almost seven-year high.

“The uncertainty combined with the sharp gains in the previous days made it prudent for some investors to take a pause,’’ Ting said. “This pause should be temporary.’’

Signs of Test

Ayala Corp., owner of the nation’s largest builder, the country’s second-biggest mobile-phone company and the No. 2 Philippine lender by assets, fell P12.50, or 2.5 percent, to 480, its biggest loss in four weeks. SM Prime, the nation’s largest shopping mall operator, declined 20 centavos, or 2.3 percent, to P8.40.

US spy satellites picked up vehicle movement close to the site of North Korea’s first nuclear test on October 9, a sign the country may be preparing another underground blast, ABC News reported, citing unidentified US intelligence officials.

Separately, Philippine Finance Secretary Gary Teves said Tuesday, the budget deficit last month was P16.2 billion ($324 million) as tax collections were 11 percent off target.

PLDT, the nation’s largest phone company, fell P55, or 2.4 percent, to 2,195, its first decline in four days and biggest loss since September 20.

According to a statement obtained by Bloomberg News Monday, the regulator ordered the company to prevent customers of two of its mobile-phone units from sending unlimited text.

‘Anticompetitive’

Globe Telecom Inc., which made the complaint to the regulator, said the practice of PLDT’s units is “anticompetitive.’’ Globe Telecom, the nation’s second-biggest mobile-phone company, fell P25, or 2.2 percent, to 1,095, snapping a three-day 3.7 climb.

Bank of the Philippine Islands, the nation’s largest lender by market value, lost P1, or 1.8 percent, to P55.50, its lowest since September 15.

Growth in commercial bank lending cooled to 2.5 percent in August from 4.3 percent the previous month as construction and manufacturing companies borrowed less, the central bank said Monday after the stock market closed.

Shares worth P2.64 billion were traded, 28 percent more than the six-month daily average. Losers beat gainers 50 to 36, with 44 stocks unchanged in the broader market.

http://businessmirror.com.ph/comp02.php

____________________

First Metro partners with UA&P to
boost capital market development

By Honey Madrilejos-Reyes
Reporter

LISTED First Metro Investment Corporation (FMIC) has partnered with the University of Asia and the Pacific (UA&P) to set up a capital markets research center, a step that will further boost the development of the capital markets in the country.

FMIC is the investment banking arm of Metropolitan Bank and Trust Co. while UA&P is one of the leading business and economic schools in the Philippines.

In an interview, FMIC president Francisco Sebastian said the Capital Markets Research Center was created to conduct continuous and in-depth research on the Philippine capital markets covering financial instruments, trading platforms and exchanges as well as economic trends and business developments directly or indirectly affecting capital markets.

The center will also conduct regular investment briefings and publish a comprehensive newsletter on developments and prospects of capital markets.

“These activities are in line with both FMIC’s commitment to be a prime mover in the development of the Philippine capital markets as well as UA&P’s mandate of economic research and communications,” he said.

For his part, UA&P senior vice president Dr. Bernardo M. Villegas said their goal is to encourage more private sector participation into the capital markets.

“The goal is to see less government issuance and pave the way for more private sector issues,” he said.

The center also vows to assist the legislature, particularly on bills pertaining to capital markets development.

The memorandum of agreement for the creation of the research center was signed Monday by FMIC chairman Antonio S. Abacan, Jr., Sebastian and Villegas.

http://businessmirror.com.ph/comp03.php

____________________

DOE official: Outlook on RP
power sector regaining strength

By Paul Anthony A. ISLA
Reporter

INVESTORS’ outlook on the country’s power industry is regaining strength after the government successfully privatized the Pantabangan-Masiway hydroelectric complex asset of the National Power Corp. (Napocor), Energy Undersecretary Melinda L. Ocampo told the BusinessMirror.

Ocampo said the investors are planning to come in either as a developer of a greenfield power project or lead in the expansion of existing power plants operated by Napocor.

“Investors are adopting a wait-and-see attitude. But there is preference to have a supply contract with any off-taker,” she said.

She added there are indicative power projects, which are in the pipeline right now.

“But for those who will really like to invest, we are encouraging investors to partner or look at the Power Development Plan of the Department of Energy (DOE) for the available opportunities,” Ocampo said.

Based on the DOE’s supply and demand forecasting, a total of 150-megawatts in new power capacity would come in Luzon by 2010.

The Visayas region, on the other hand, would have additional capacity of 200-MW in 2009 courtesy of the Korea Electric Power Corp.

Energy Chief Raphael Lotilla said that the 200-megawatt power plant would complement the Northern Negros Geothermal Plant of the Philippine National Oil Co.-Energy Development Corp.’s (PNOC-EDC), which would deliver 40-MW of power by 2007.

He said, however, an additional capacity of 200-MW must be put in place by 2011.

http://businessmirror.com.ph/comp04.php

____________________

Okay, while Jamaicus is temporarily on SSC leave, ako muna ang bibigay-buhay sa ating economy newspaper :okay:

chixbebe

October 18th, 2006, 11:20 AM

Finance officials said the market has already upgraded the country’s credit rating and rating agencies should follow suit when the Philippines enters the review period in the next few months.

With the fiscal deficit safely below target, finance officials said yesterday that the country’s economic fundamentals should have a considerable impact on its credit standing.

Refusing to speculate on whether the country would be upgraded in the next round of credit ratings review, Finance Secretary Margarito B. Teves told reporters that the underlying fundamentals were stronger than ever.

"We are not working for an upgrade, per se," Teves said. "But we are working on achieving the fundamental targets that affect credit rating."

Teves said he did not have any indications from credit rating agencies on how they might have shifted perspective, given the changing fiscal position of the Arroyo administration.

But Teves said the fourth quarter fiscal performance was expected to be even better given the expected pick-up in corporate incomes which would therefore boost revenue collections.

According to National Treasurer Omar Cruz, on the other hand, the market has already adjusted to the government’s new fiscal positioning, with yields at their narrowest level in a long while.

"We are losing revenues in terms of the decline in taxes on government securities but that’s because we are borrowing less and that foregone revenue is made up for by our interest savings," Cruz said.

Cruz pointed out that credit rating agencies must appreciate the headway made by the government in its debt management program, especially the bond swaps that cleaned up its yield curve.

"These swaps had the overall effect of retiring some of our debt, getting longer terms and lower yields for others," Cruz said.

"Overall, our risk premium has gone down." Cruz admitted however that the sooner credit rating agencies act on the country’s ratings, the sooner the market would be able to change the entire scenario.

"It will be helpful not just for our borrowing cost but also for investments," he said.

Cruz explained that investors who are still in the sidelines waiting for an actual action by credit rating agencies would be able to finally come into the market.

"A lot of them are unable to move because their trigger factor is a ratings action," he said. "Even if our fundamentals are clearly strong, there are funds who can not buy without such an action and once it happens, they will all come in."

The country is still rated below investment grade by three of the major credit ratings agencies with the outlook rating at "stable."

The next step is for the ratings outlook to be rated "positive," a notch that would put the country squarely on the path towards an actual upgrade in credit rating.

Mond87

October 19th, 2006, 03:43 AM

^^ Great! If our stock market surpasses the 2625-level, I think it has been at its highest since the Asian Financial Crisis of 1997!!! :D!!!

sandrn

October 19th, 2006, 03:46 AM

BoI, PEZA investments up 30.8%
http://business.inq7.net/money/columns/view_article.php?article_id=27074
Inquirer
Last updated 03:10am (Mla time) 10/17/2006

INVESTMENTS registered and given incentives by the Board of Investments (BoI) and the Philippine Economic Zone Authority (PEZA) totaled P200.44 billion in the January-September period, up 30.8 percent from the same months last year, an official said Monday.

The BoI registered P142.3 billion worth of investment projects in the nine months, up 26 percent from the same period last year, Trade and Industry Undersecretary Elmer Hernandez said..

PEZA-registered projects totaled P58.1 billion, up 45 percent.

Local investments reached P124.9 billion, up 32 percent. Foreign investments grew 28.6 percent to P75.6 billion, with the Americans accounting for P34.4 billion, Japanese P16.4 billion, Dutch P7.0 billion and Singaporeans P6.1 billion.

The biggest projects listed with the BoI were a P43.9-billion coal-fired power plant of GNPower Ltd., a P33-billion 3G cellular phone system of Smart Communications Inc., and a P5.5-billion project of Globe Telecom Corp.

The biggest PEZA-registered projects were mostly in electronics and semiconductors.

In September, BoI- and PEZA-registered investments totaled P71.1 billion, up 827.4 percent from P7.7 billion a year earlier.

The BoI registered projects in September totaling to P55.0 billion, up 12,272 percent from P444.6 million a year earlier, while PEZA registered projects totaling P16.3 billion, up 126 percent.

The biggest projects granted incentives in September were a P4.6-billion production of cavendish bananas of Upland Banana Corp., a P3-billion business process outsourcing venture of HSBC, a P3.27-billion copper project of Lepanto Consolidated Mining Corp., and a P2.25-billion ethanol plant of San Carlos Bioenergy Corp.

“While investments do increase, the uptake has been pretty weak compared to what neighboring countries get,” Hernandez said.

He said the government and the private sector, with the support of various international and business organizations, were working together to identify and address investment bottlenecks.

Some recent events held toward that goal included the Joint Foreign Chambers of Commerce and Industry of the Philippines’ foreign direct investment workshop and a Philippine Competitiveness Summit. Ronnel Domingo, with INQ7.net

sandrn

October 19th, 2006, 03:54 AM

8-month additional VAT revenue exceeds target
http://business.inq7.net/money/topstories/view_article.php?article_id=27482
By Michelle Remo
Inquirer
Last updated 03:16am (Mla time) 10/19/2006

THE expanded value-added tax (VAT) generated P48.4 billion in additional revenues from January to August, surpassing the target of P45.8 billion for the period and keeping the government on track to meeting its financial reform objectives, the Department of Finance said Wednesday.

The government aims to raise P75 billion in additional revenues this year from the VAT, which was widened in scope to cover oil, electricity and certain other previously exempt sectors starting last November and increased in rate in February to 12 percent from 10 percent.

Ability to meet that full-year target is considered a key indicator of success in the financial reforms and is closely monitored by market analysts and international credit-rating agencies. The results so far have helped to get a "positive" credit outlook from some rating agencies that had previously given a "negative" or "stable" outlook.

The Department of Finance said the Bureau of Customs accounted for P36.6 billion of the January-August revenue from the expansion and increase of the VAT, exceeding its target of P34.9 billion, and the Bureau of Internal Revenue (BIR) contributed P11.8 billion, also exceeding its target of P10.9 billion.

"This is very important because the law provides that 30 percent of the collection [this year] should be allocated to infrastructure and social services," Finance Secretary Margarito Teves said in a statement.

Teves said it was crucial for the BIR and customs bureau to generate the expected VAT revenue gains to justify to Congress any other possible revenue-raising proposals in the future.

He said the executive branch was not preparing to ask for more tax legislation anytime soon, except for bills on rationalization of financial incentives for investments and income tax reform that are pending in Congress. With INQ7.net

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

marites4

October 19th, 2006, 05:37 AM

our stock market is hot. went up by 50 points great job!

TheAvenger

October 19th, 2006, 05:51 AM

kahit mga paggawa lang ng mga small appliances ,tools, chemical household cleansers dapat yang mga bagay na yan ay locally made na hindi na kailangang bilen sa korea taiwan or China. Kaya sila mayaman yang mga export nila napakamahal kumpera mo sa mga ineexport naten.

maraming locally made productspero ang problema ang karamihan ng mga Pinoy ay may colonial mentality, na mas gusto nila ang imported goods.
isa pa dahil sa APEC Trade Liberalization ay wala nang control and import. Pati toiler paper galing pa sa china.

mas believe pa ako sa policy ng Indian government, they usually discouraged importing goods from abroad while they promote the export of their local products.

OtAkAw

October 19th, 2006, 09:28 AM

Everything in the supermarkets and department stores is "Made in China" nowadays.

Sinjin P.

October 19th, 2006, 11:48 AM

VAT cushions low BIR take
DESPITE UNDERCOLLECTION, REVENUE
AGENCY'S TARGETS RAISED HIGHER

By Jun Vallecera
Reporter

THE Bureau of Internal Revenue may be behind goal by P11.6 billion at end-September with only P480.8 billion of its P492.4-billion commitment, but there is a ray of collection sunshine—from the 12-percent value-added tax, which was P900 million over target of P10.9 billion in the first eight months.

Finance Secretary Margarito Teves said Wednesday this placed overall collection from the VAT—both the 10 percent and 12 percent that took effect last February—at P48.4 billion as of end-August, exceeding the target by P2.6 billion and making the likelihood of achieving full-year goal of P75 billion easier.

“This is very important because the law provides that 30 percent for the R-VAT collection should be allocated to infrastructure and social services,” said Teves. He noted that not enough ports, roads, bridges and other key infrastructures have been built this year because of lack of funds, the budget being a mere reenactment of the 2005 measure.

The implication of the rosy collection forecast, meanwhile, is that it appeared to have firmed up a decision to raise the collection target next year by another P100 billion.

On Tuesday night, BIR chief Jose Mario Buñag was unable to resist airing his thoughts on this decision: “That increase of P100 billion has to be reviewed. Planners must consider not only macroeconomic variables but microvariables also.”

He was referring to the capability of his people, who besides collecting from law-abiding taxpayers with inadequate resources, have the added burden of going after sophisticated tax evaders. “We don’t have enough sophistication to catch more of them.”

That decision means maximizing out the capabilities of the more than 11,000 BIR employees to come up with at least P784 billion.

He noted that Japan trains its agents in a tax college and even Malaysia has a tax academy of its own, where its people learn the latest developments.

He lauded plans by Congress to soothe frayed BIR nerves by allowing the agency to acquire an operating budget of 5 percent to 10 percent more of their previous year’s collection. “We can use some of that money to train our people.”

Teves has acknowledged the work of his subordinate was not easy and that the BIR chief was “losing his hair” over it.

He said that this year at least, with VAT collection largely on track, Buñag is given some respite with at least P22.5 billion that the government is able to set aside for infrastructure.

Lifting the cap on input VAT claims was seen as raising overall collection, with companies encouraged to make more sales than before the cap was lifted.

Sinjin P.

October 19th, 2006, 11:48 AM

BOC, BIR vow to recoup revenue shortfall

By Mia Gonzales
Reporter

THE Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) have pledged to make up for the revenue shortfall for September within the rest of the year, Executive Secretary Eduardo Ermita said on Wednesday.

Ermita said Internal Revenue Commissioner Jose Mario Buñag and Customs Commissioner Napoleon Morales made the pledge to him when he asked them about the undercollection that morning, which Malacañang believed to be an “isolated setback.”

“They committed [that] we will make good. I haven’t even asked what measures would be taken [to offset the undercollection] when Commissioner Morales said, ‘Don’t worry, Sir. We will see to it that this month of October, November toward December, we are going to make up for the shortfall,’” Ermita said.

The government revenue target for the first nine months of the year is P250.8 billion, but actual collections were at P244.8 billion, or a shortfall of P6 billion.

Asked whether Malacañang is disappointed with the undercollection in September, Ermita cited the explanation of Buñag—the BIR failed to meet its target last month due to the lower interest rates on charges made by banks on borrowers, resulting in lower withholding taxes.

“Sometimes, there’s a dysfunction but there’s always a reason for it, not because they are getting laxer in their collection of taxes but because of that particular situation. And we have to believe Commissioner Buñag when he said that is due to the lowering of interest rates on charges made by banks and borrowers,” he said.

Press Secretary Ignacio Bunye said in a statement that the government’s revenue shortfall for September is only “”an isolated setback” and takes it as “a challenge for our revenue collecting agencies to double their efforts in ensuring that we are back on track in no time at all.”

The BIR target was P492.4 billion over nine months but produced only P480.8 billion, P11.6 billion short of its goal; the BOC exceeded its collections for the first nine months by P5.5 billion; the Bureau of Treasury collected P50.8 billion against a target of P38.9 billion while other offices turned in P3.4 billion more than their P38.1 billion program.

Sinjin P.

October 19th, 2006, 11:49 AM

Producers won’t cut back on
chicken production for ’07

By Jennifer A. Ng
Reporter

DESPITE the multimillion-peso damage wrought by Typhoon Milenyo on various poultry farms in Luzon, small-scale poultry producers said Wednesday they do not plan to cut back on production for next year.

The United Broilers’ Raisers Association (Ubra) said production may even go up if demand would prove to be better by next year.

Ubra president Gregorio F. San Diego estimated that the poultry industy produced some 460 million kilograms of chicken in 2005.

With the destruction caused by Typhoon Milenyo, poultry production for 2006 will not be as robust, prompting the Department of Agriculture to import three million kilos of poultry products before the holidays.

“While we suffered losses, there are no indications that small producers will scale down their production in 2007. It may go even up, but that would depend on the demand,” said San Diego.

The Ubra chief disclosed that just like their counterparts in the hog industry, they are currently faced with the problem of declining demand for poultry products, particularly chicken, due to the weakening purchasing power of average Filipinos.

“We have yet to come up with a firm estimate on production for 2007 but for now, I can say that there are no plans to implement drastic changes,” he said.

In the aftermath of Typhoon Milenyo, Ubra estimated that the poultry industry had to write off P100 million in losses due to the typhoon as poultry farms housing chickens were ravaged.

San Diego earlier said most of those affected are producers in Sorsogon in the Bicol Region, and the provinces Laguna, Bataan, Zambales, Rizal, Cavite and Pampanga.

As supply is expected to be tighter, the DA has announced plans to import three million kilos of the produce to ensure that the price of chicken will not shoot up to unreasonable levels during the holidays.

Sinjin P.

October 19th, 2006, 11:49 AM

Politics feared to mar RP reforms

By M.V. De Leon
Reporter

JUST as the US lauded the Philippine government for identifying critical steps to make the country competitive, Filipino businessmen worry that all the cited reforms may only be derailed in exchange for political gains in the coming elections.

It is impressive, US Ambassador Kristie A. Kenney said at the Philippine Business Conference on Wednesday at the Manila Hotel, that the “government of the Philippines has understood with such clarity what needs to be done.”

These “laudable set of goals” that the government outlined to address issues holding back foreign and domestic investments, she said, includes the reduction of the number of days it takes to start and register a new business, and the creation of new procedures that reduce the opportunities for corruption in the Bureau of Customs.

“Such concrete goals, focused on specific issues and problems, are important, and we look forward to seeing them reached, and the Philippines made a more competitive economy,” Kenney said.

However, Philippine Chamber of Commerce and Industry president Donald Dee is already warning of a possible derailment of these reforms come election time.

“It is easy to fall back to complacency, especially with elections coming up. Elections are one of the land mines. It is easy to play politics at the expense of the economy,” Dee said.

To make the country’s level of growth consistent with those being attained by other economies, Dee said it is important that reforms being undertaken and will be done soon are sustained.

Sinjin P.

October 19th, 2006, 11:50 AM

RP trails KL in Basle 2 standards

By Jun Vallecera
Reporter

MANILA lags behind Kuala Lumpur in terms of adopting technology ahead of deadlines set for banks around the world to observe banking standards under the Basle 2, a risk management expert said on Wednesday.

The second Basle convention supports a risk-management framework that sets capital charges for all types of risk lenders around the world are exposed to under current circumstances.

John Foulley, head of risk management practice at SAS Asia Pacific, told reporters Manila fares better than Jakarta, however.

He also said Bangkok and Manila are neck on neck when it comes to Basle 2 compliance.

“In terms of technological preparedness, the Philippines is better than Indonesia but not as good as in Malaysia. Kuala Lumpur banks have started complying with Basle 2 standards but not yet here in the Philippines,” Foulley said.

The Basle 2 framework approaches the risks involved from the credit, market and operational standpoints.

Foulley said the thinking process among banks in Manila is better than that among Thai lenders. But even then, this has not translated to an actual purchase of technology, he said.

Foulley heads the Singapore-headquartered financial software developer SAS, whose global clients include the US financial services giant Citigroup, the world’s largest bank.

SAS has successfully sold its risk management solution to the Land Bank of the Philippines and colender Philippine Veterans Bank is in the process of adopting its systems.

SAS technology is quite expensive and should cost local banks $1 million to $2 million to acquire.

But developing one’s own software is even more expensive, typically three to four times more, according to Foulley.

He claimed the SAS technology addresses all three risk approaches more efficiently than rival software and clients do much more with it than just be Basle 2 compliant.

Sinjin P.

October 19th, 2006, 11:50 AM

Govt spent P3.48B for
‘communications expenses’ last year

By Jodeal Cadacio
Reporter

THE national government spent an eye-popping P3.48 billion for “communications expenses” last year, with use of cellular phone accounting form a bulk of the big expenditure, prompting a senior administration lawmaker to advocate for the use in public offices of the Voice over Internet Protocol, or VoIP, to cut down on phone bills.

Liberal Party Rep. Abraham Mitra of Palawan said mobile phone charges in national government offices rose by 21 percent to P305.1 million in 2005, almost twice as much as what it paid for in 2003—P168 million.

Mobile phone bills of local governments jumped by 47 percent to P240.3 million during the same period.

Mitra, vice chairman of the Committee on Appropriations, said the mobile phone usage by 146 government-owned and -controlled corporations (GOCCs) was not itemized in the Commission on Audit (COA) report on government expenses, which he used as basis for his statement.

The report, nonetheless, said that “GOCCs spent P803 million last year for “communications expenses.”

Mitra said landline phone use still eats up a huge chunk of the government communications bill, which he estimated at around P2 billion last year.

“National and local governments combined spent P1.57 billion for landline phones last year and it is safe to assume that GOCCs spent another P400 million, or half of what they spent for this expense item,” Mitra said.

He noted that in government auditing, “communications expenses” refer to “postage and deliveries; landline, Internet and mobile expenses; and cable, satellite, telegraph and radio expenses.”

Based on the COA report for 2005, the national government spent P1.852 billion for communications services; local governments, P824.1 million; and GOCCs, P803 million.
In addition to its P305.1 million cellphone bill, the government spent P1.06 billion for landline phone use, P158 million for Internet connection, P169 million for postage, and P151.9 for cable and telegraph in 2005.

Landline phone use was also the biggest item in last year’s LGUs communications expense, at P512 million, followed by mobile phone charges of P240.3 million, Internet fees of P34.1 million, and P23 million and P14 million for postage and telegraph, respectively.

While government phone bills have been mounting over the years, Mitra refused to concede that it was due to abuse in phone use.

“But it will not harm the government if it will curb telebabad in some offices,” he said.
Mitra said “institutional cure” is the adoption in public offices of a VoIP technology, which can place telephone calls through the Internet for free.

The VoIP allows one to make telephone calls using a computer network, over a data network like the Internet, and thus be spared of “long distance” or mobile phone charges.
Mitra, author of the VoIP bill in the House, said this technology can realize huge savings for the cash-strapped government.

One item in the COA report which drew Mitra’s attention and which prompted him to conclude that the bureaucracy is ripe for a shift to VoIP was the marked increased in Internet fees by public agencies. Internet penetration, increasing computer and phone densities have created an environment conducive to VoIP, Mitra said.

Any move to aggressively promote VoIP use in government offices should, however, be accompanied by a campaign on the right use of that free technology so it won’t be abused by civil servants.

Sinjin P.

October 19th, 2006, 11:50 AM

Discuss!

sandrn

October 19th, 2006, 11:57 AM

Beware of buying low quality stuff.
Example, kung bibili kayo sa 99 Pesos (or $1.00 here) store ng sandok o kaldero. Expeksyonin ng mabuti at sigurado madaling KALAWANGIN yon. Metal poisoining ang labas nyo.
The low Quality Cement smuggled in Mindanao - It did not pass the quality standard test. Your house foundation would surely crack up and fall in no time.
You don't know what chemicals are mixed in making those cheapies.

Buy something that had been quality tested that would last for a long time.

Do not buy those cheapies that are worth throwing out after 1 use. Not only that you waste money, but you generate more trash also.

For the environment consious individuals, choose a product that uses more natural raw materials over the purely synthetic ones. We have lots of that like rattan, pina, abaca, etc.

marites4

October 19th, 2006, 06:29 PM

Everything in the supermarkets and department stores is "Made in China" nowadays.

halos lahat na I'd say 100% ang hindi nalang made in CHina gulay. and then most are smuggled goods which bereft the govt. needed revenues. IF the govt. doesn't know how to compete and looks like we're going to be stuck with just being a service economy then they'd better infuse most of our budget to education and high skills training for free. This is what India is doing even with crap infrastructure they managed to attain high growth. Forget mass production of nurses , we need to be doctors higher paying jobs.
If this heavy investment on education is not implemented we'll be fourth world after 50 years.

sandrn

October 20th, 2006, 03:15 AM

BIR seeks increase in collection personnel
Philippines surpasses eight-month sales tax target
http://www.manilatimes.net/national/2006/oct/19/yehey/business/20061019bus1.html
By Likha C. Cuevas, Reporter

COLLECTIONS of an expanded sales tax in the first eight months of the year exceeded the government%u2019s target, according to the Department of Finance.

Finance Secretary Margarito B. Teves said an additional P48.4 billion in net revenues was raised from the expanded value-added tax (VAT), exceeding the goal by P2.6 billion for the period.

%u201CWe are happy to note that we remain on track toward meeting our full-year target of P75 billion from this tax measure,%u201D he said.

Teves said the government%u2019s periodic reporting of VAT proceeds is important in providing transparency and accountability. Republic Act 9337, which removed exemptions from the sales tax and raised the tax rate starting this year, states that 30 percent of the tax measure proceeds should be allocated to infrastructure and social services.

Finance department data showed that the Bureau of Customs (BOC) generated P36.6 billion and exceeded its target by P1.7 billion due to higher oil imports, which generated P1.5 billion, and coal, which contributed P400 million to government coffers.

The Bureau of Internal Revenue (BIR), which contributes two-thirds of state revenues, collected P11.8 billion, surpassing its target by P900 million. The agency was able to boost its collection from non-VAT reforms with an excess of P2 billion, the finance department said.

BIR also registered lower offsets of input VAT claims by entities subject to the sales tax. The amount reported was P1.2 billion less than expected.

This, however, was offset by lower domestic oil industry output (P1.3 billion) and lower yields from the input VAT ceiling (P8.8 billion) and crediting (P2.3 billion).

In response to the clamor of business groups, both Houses of Congress passed a bill that repeals the input VAT ceiling. Businessmen had been lobbying for the removal of the cap since it is a burden to business, especially for those whose profit margins are below 30 percent.

Under the law, the maximum amount of input VAT credits that businesses may claim for a given tax period should only be 70 percent of its output VAT. Input VAT is the amount shouldered by a business whenever it purchases goods or services that were already slapped the 12-percent VAT. Output VAT, on the other hand, is the sales tax a business has to remit to the government at 12 percent of its gross sales.

The scrapping of the 70-percent cap may help the government improve its collection with the anticipation of higher sales from companies, which had been managing their inventories before to avoid hitting the cap, Finance Undersecretary Gil Beltran said.

%u201CWe hope to see a build up in their inventories for the Christmas season with the lifting of the cap and this should result in increased tax collection for the government,%u201D he said.

Teves reiterated that the removal of the cap should be revenue-neutral and the BIR should be rigorous in monitoring. If a company has consistently been utilizing only 70 percent of its input VAT and suddenly hit 100 percent after the repeal, then there must be something wrong and the BIR should watch out for that, he said.

Discounting possible increase in sales, earlier DOF computation showed that the government may lose about P5.2 billion from the projected revenues as it tries to raise more money to keep its deficit below P125 billion this year and balance the budget by 2008.

In a related development, the BIR plans to beef up its collection personnel to enable it to meet its P784 billion revenue goal for next year.

Commissioner Jose Mario Bu%u00F1ag told reporters that the bureau may have to hire new examiners and collectors to boost its tax take.

The agency has 11,800 employees spread all over the country, serving about 10 million registered taxpayers. Of the total, only 5,000 are tax examiners.

In line with this plan, the bureau seeks to increase its budget to accommodate new hires.

Sinjin P.

October 20th, 2006, 04:25 AM

5.5% growth in Q3 seen; agri steady

By Rommer M. Balaba
Reporter

THE local economy’s sources of growth during the first six months would have again propelled it to a minimum 5.5-percent expansion for the third quarter, Socioeconomic Planning Secretary Romulo L. Neri on Thursday said.

“We would like to maintain a 5.5- percent or possibly better GDP [gross domestic product] growth. Exports seem to be doing well, the growth in agriculture can be maintained. We also have good manufacturing,” Neri told reporters at the sidelines of Philippine Chamber and Commerce and Industry’s 32nd Philippine Business Conference.

Neri noted, however, that the government must continue to address challenges affecting investments, including the resolution of political economy issues and the regulatory capture of some government agencies.

The quarterly issued GDP, the aggregate value of goods and services produced by the domestic market, grew an average 5.6 percent as of June on a strong farm output, a continued inflow of migrant income and robust exports. Second-quarter GDP was estimated at 5.5 percent.

Government economic planners are targeting a 5.5-6.1 percent growth band this year and 5.7-6.5 percent for 2007.

“Hopefully the second quarter growth can be sustained. . .we are trying to make up for spending the third quarter, that is why you saw already the deficit in the third quarter.
Government will be a positive contributor to the third quarter growth,” said Neri, who is also director general of the National Economic and Development Authority (Neda).

Sinjin P.

October 20th, 2006, 04:25 AM

BSP buys dollars to tame market

By Jun Vallecera
Reporter

SOCIOECONOMIC Planning Secretary Romulo Neri on Thursday confirmed what the market has always known in recent months: the central bank was in the market buying foreign exchange.

“The BSP is tempering the market by buying dollars,” Neri, also a member of the BSP’s policymaking monetary board, said at the sidelines of the 32nd Philippine Business Conference.

Dollar buying actually tends to weaken the local unit as it is being effectively dumped in favor of the US greenback.

But the BSP makes the purchases nevertheless because it knows foreign flows continue to pour in on account of the country’s continuously improving macroeconomic underpinnings.

On Wednesday, for instance, Finance Secretary Margarito Teves bared a lower-than-projected deficit in the first nine months to P50.4 billion, sharply down from year-ago deficit of P108.5 billion.

Banks like the British-owned Hong Kong and Shanghai Banking Corp. forecast the peso to strengthen to as high as P48 per US dollar by the end of the year.

But a local bank trader said the BSP was not in the market on Thursday where $304.21 million changed hands, pushing the local unit 4.2 centavos higher to P50.095 per dollar at the Philippine Dealing System.

Analysts believe the BSP will continue to make dollar purchases to build up its foreign exchange reserves last pegged at $21.54 billion, already more than four months’ worth of imports.

The higher the reserves, the better the shield against external shocks such as that in 1997, when reserve-deficient countries had to beg the International Monetary Fund for emergency assistance.

The monetary authorities have instituted measures such as bilateral currency swaps with neighbors in the region should large-volume foreign requirements be needed in a jiffy.

But in all these, the export sector and families of overseas Filipino workers groan over the continued strength of the peso as the dollar earnings of principals translate to lesser pesos with each appreciation of the local unit.

Analysts said only the level of peso liquidity in the system will temper the dollar-buying mood of the BSP as the injection of an inordinate amount of pesos in the system tends to push prices upward and for inflation, currently down trending, to act up again. The government had incurred an P34.2-billion budgetary shortfall for the January-to-August period but still is way below its full-year deficit ceiling of P125 billion.

Former Neda chief Cielito F. Habito, however, cautioned the government against using its wide leeway for deficit spending for activities other than what is beneficial to the economy, especially those that would create jobs.

Neri, further assessing the third- quarter economic performance, noted Typhoon Milenyo had little effect on the agriculture sector despite causing damages on coconut and poultry production and would not reflect on third-quarter economic figures, but probably on the fourth-quarter growth numbers.

Sinjin P.

October 20th, 2006, 04:32 AM

Traders hope for peaceful
resolution of Binay case

By Max.V. De Leon and Honey M. Reyes
Reporters

LOCAL and foreign businessmen are hoping the political crisis in Makati will be immediately resolved through proper channels and not escalate into street protests, as it would be another setback to Philippine efforts to project to the international press a country that means business.

They aired their concerns just hours before the Court of Appeals, acting on two urgent petitions filed separately by embattled Makati Mayor Jejomar Binay on one hand and by Vice Mayor Ernesto Mercado and 16 councilors on the other, handed down a 60-day temporary restraining order stopping the Department of Interior and Local Government from suspending them. The DILG had been widely criticized for acting on Malacañang’s behest to railroad a case based on an unverified, nonspecific allegation by a perennial mayoral loser that Binay, Mercado and the entire city council conspired to pocket the proceeds from padding the local unit’s payroll with ‘some’ ghost employees, who were not named.

The day before, former socioeconomic planning secretary in the Aquino years Jesus P. Estanislao went to City Hall to assess the situation. He expressed serious concern over the bad signal the government was sending in turning a simple, haphazard case against the opposition mayor into a cause célèbre by suspending him.

Sergio Ortiz Luis, Philippine Export Confederation president, said on Thursday at the sidelines of the Philippine Business Conference that the government should make sure the case filed against Binay is really “prosecutable” and not just a case of witch-hunting. He said if the matter drags farther, this could lead to service disruptions at the city hall.

At the same time, he gave Makati’s popular mayor some unsolicited advice: to go through the “proper forum” in defending his case and not bring the matter to the streets.

Michael Wootton, chairman of the British Chamber of Commerce, said if the international media play up stories on social unrest resulting from this, it would be another taint on the image of the Philippines.

John Forbes, director of the American Chamber of Commerce, said something good will come out of this, as in other rumors of misbehavior of government officials, only if the case is given a transparent investigation.

For his part, Astro del Castillo, managing director of First Grade Investment Holdings, said: “There is no direct impact on the financial capital markets. On the local business front there will be [some impact] because some investors will [feel the disruption] like the processing of papers and other documents. The services in Makati are also affected. How will the Makati employees receive their payroll? Even garbage and traffic were affected during the first two days.”

Del Castillo warned, before the CA handed down its TRO which eased tension in the city, that “if this standoff is extended, the CBD (Central Business District) will be affected. There will also be a deficit in revenues for local government and taxes for the national government.”

Sinjin P.

October 20th, 2006, 04:32 AM

Banana exports continue to rise,
boost Mindanao investments
THE INDUSTRY CONTRIBUTES THREE-FOURTHS
OF TOTAL INVESTMENTS IN 3 REGIONS

By Manuel T. Cayon
Reporter

DAVAO CITY—The banana export sector continues its upward climb, contributing about three quarters of total investments this year in the three regions of Mindanao, the Board of Investments (BOI) said here, assessing the nine months of investment performance in Southern Philippines.

The business process outsourcing (BPO) sector and its support services hold the upperhand, however, in the investments in Davao City and General Santos City, according to the Department of Trade and Industry, monitoring the business name registrations.

The rest of the investments are also in other agricultural services and infrastructure support, said Gil Dureza, BOI director of southern Mindanao, whose office jurisdiction also covers Region 12 or South-Central Mindanao and the Caraga Region in northeastern Mindanao.

The Upland Banana Corp. shelled out P4.6 billion on its expansion in North and South Cotabato areas on September 1, sending North Cotabato into the distinction of getting the highest investments this year among all the provinces in the country.

The invested amount is already slightly more than half of the entire investment figure of P8.188 billion recorded for all the three regions from January to September this year.

Dureza said that support services to banana production alone also posted another P2 billion. They include the AJMR Port Services Corp. investment of P1 billion on August 7, the Lapanday Packaging Corp. with P767.1 million investment on June 29, and the Southern Philippines Fresh Fruit Corp. investment of P52 million last month.

The other investments this year were contributed by the Pacific Services and Packaging Corp. (P275 million), Vigor Seeds Corp. (P904,000), Stargate Enterprise Corp. (P28 million), Tri Star Plastics Inc. (P35.3 million), PSC Diversified Fruits Corp. (P260 million), BioTech Farms (P105 million) and Makilala Rubber Industry Inc. (18.5 million).

A total of 10,161 employees were hired this year, the BOI statistics said.

The investments this year are up 23.49 percent compared with the P6.631 billion recorded for last year.

Dureza said that about four other projects “are in the pipeline” for the rest of the year, and worth P270 million.

These are the bangus sea cages project in General Santos City by the San Andres Fish Corp. (P15 million), the Australian-funded Mineral Processing in Bayugan, Agusan del Sur (P200 million) and the transportation project in General Santos City (P3 million).

A P52-million vapor heat-treatment plant here by the Southern Philippines Fresh Fruit Corp. listed above would continue its process and construction phase toward the end of the year.

Last year, the Aboitiz group put up the biggest investment in power-generation in Sta. Cruz, Davao del Sur, at P4.6 billion.

While agriculture made a strong pitch in investments this year, DTI’s Davao City director Lou Pasawa said, however, that the BPO and the information and communications technology (ICT) made a strong presence in the city, inviting the interest of a shopping mall here to establish an IT building, to complement an IT park that would be up this year in northern Davao City.

The NCCC Shopping Mall is still undecided though, on how it would allocate its top-floor area to a possible relocation of interested BPO companies and other software and IT hardware companies, said Eriberto Barriga, chief of NCCC’s public and media relations.

The top floor has been used for national and international conventions, including Asean’s biggest travel and tourism activity, the Asean Tourism Forum. Barriga said that at least two call-center companies have already inquired.

Pasawa said that P5.2 billion in investments have been registered so far for the nine months, but lower compared with P8.5 billion posted for the whole year last year.

Sinjin P.

October 20th, 2006, 04:33 AM

DOE to help PNOC form task
force to prepare bidding rules

By Paul Anthony A. Isla
Reporter

THE Department of Energy (DOE) will form a task force that will formulate the bidding rules and procedures for farming out projects of the Philippine National Oil Co. (PNOC), the company president Eduardo V. Mañalac told reporters Thursday.

Mañalac said the task force will be composed of board members of the PNOC, its subsidiary PNOC-Exploration Corp. and the management and technical team of PNOC-EC.

“The bidding rules and procedures will also lead to the selection of the PNOC partner for the development of the Camago-Malampaya Oil Leg (CMOL),” said Mañalac.

He added that the report PNOC submitted to the DOE just described the process they have earlier employed in selecting Mitra Energy Ltd. as the national oil company’s partner in developing the CMOL project.

Mañalac added the PNOC and the government need to work the best they can in implementing EO 556—which basically is saying that from thereon partners of the government will be chosen through a transparent and competitive bidding procedure.

Mañalac said that everybody in the explorations industry is still welcome to participate and bid to be PNOC’s partner in developing the CMOL.

“With a very clear and rigid procedure, we are confident that investors will be encouraged to join in the bidding. We also remain optimistic that even the bigger companies will come in and join in the effort to develop the CMOL—which is a very important resource for the Philippines,” he said.

“And considering that a lot of investors got turned off with the issuance of EO 556, the government, on the other hand, really has to walk the talk and demonstrate that the next process will encourage them to still look into the Philippine explorations industry,” Mañalac said.

chixbebe

October 20th, 2006, 10:22 AM

Stocks climbed to their highest in more than seven years yesterday on speculation higher dividends will boost demand for the country’s shares and after the government said the economy probably grew faster in the third quarter.

"This highlights that some Philippine companies are very strong generators of cash,’’ said Robrina Go, head of equities at UBS Securities Philippines Inc. ``Investors are attracted to rising dividends.’’

The Philippine Stock Exchange Index surged 50.62, or two percent, to 2597.15 at the noon close, its highest close since July 13, 1999.

"Despite the short-term hiccups preventing the market from breaking out of its consolidation range, investors remain generally bullish about the country’s economic prospects," Accord Capital Equities analyst Lawrence de Leon said.

"The peso is strong and the central bank may cut key interest rates soon. –

3cr

October 23rd, 2006, 02:43 AM

I agree on your first statement (one which I bolded in your original message below) though have to somewhat disagree with your assessment on the microfinancing issue. I'm not anti GMA but regardless of who is actually sitting on the throne at the moment I would point oput the same issues of Gov't short-comings that I've been posting and since GMA is the one currently sitting on the hot seat today so of course I have to address my concerns to her and her gov't. I believe GMA and company can do more for the people and the country and here are some general suggestions.

GMA has made good progress though more can be done imo. Our gov't is still quite inefficient with so many beaurocratic red tape as well as one big corruption machine so for one thing they can start with curbing/eradicating the corruption within. Second is improving the tax collection methods/process. Third and Fourth are basically revamping the infrastructure and education system. Fifth is national security/insurgency. Coming from a financial risk/crises managment background, I know for a fact just taking care of these 5 above agendas will greatly improve our competitiveness and be a big boost to consumer and investor confidence. I know it's simpler said than done but that's why the gov't consult with people such as yourself to come up with solutions, specific recommendations and even device methodolgy towards the achievement of the goal. Though I am not privy with gov't info, I don't believe in your statement that the Gov't can't do more than what they are already doing which is why I continue putting the burden on them to do the right thing and show good will/conscience. Once they get their house in order and act together, then we can talk business and microfinancing for the private sector. Just that it's easy to say that the private sector should take action and be the ones to look into micro-financing programs to spur the economy but the reality is what incentive would people have, borrow money and risk most if not all they have when the actual fundamentals of the country are iffy and suspect at best. Too much of a risk for a typical Filipino to make which is why I would not be surprised if they are better-off financially being OFW's instead which is exactly what they are doing instead. Imo the Gov't needs to change for the better first (top to bottom and from within) to set an example from which people will derive inspiration and confidence to do their part in the over all scheme of things and betterment of the country. My opinion only of course.

http://serp-p.pids.gov.ph/publications/bykey.phtml?keyword=microfinance

The government has been looking into it. At least the research and policy advisory academics have.

Explore that domain and you'll see what other interesting things the government has been looking into.

How so many people can loathe the Philippine government, oppose and obstruct the Philippine government, and keep electing scoundrels and incompetents to the Philippine government year after year, and then hope that this same government will explore and implement solutions to poverty in the Philippines is completely beyond me.

Grameen Bank was started by an individual moved to fight poverty, not some inert and dysfunctional Bangladeshi government bureaucracy.

The solution to problems in the Philippines is not government, and it isn't the Church or any other organisation. It's in the individual Filipino. You have the choice to pay taxes, not pay bribes, and generally be honest and decent in all your actions.

So, when you say the government should look into microfinance, why can't you look into microfinance too. There are plenty of avenues for the individual to pursue to help in the Philippines in this context.

Personally, I'm doing some research for the Philippine government, and my policy recommendations will not be along the lines of "the government should do this"; it is going to be along the lines of "it should be made easier for the individual to do this".

A major problem is that most career bureaucrats and academics here know that the Philippine government is at the end of its tether, and can't be made to shoulder any more burdens. So, it must be made easier for the private sector and individuals to do more.

When people say that the government should do more, it simply cannot. Hamstrung by a lack of funds and burdened with too many idiots, why would you as a Philippine voter possibly want to give them another department to look into something? It's just an another route for money and initiative to disappear.

3cr

October 23rd, 2006, 09:57 AM

Business asks Gloria to act on energy woes
Malaya
http://www.malaya.com.ph/oct23/news7.htm

BUSINESS leaders have urged President Arroyo to create a Power Crisis Committee or Task Force that would address the looming threat of a power shortage and report on the energy supply situation every six months.

The appeal was made during the 32nd Philippine Business Conference in Manila Hotel Friday, where the business community underscored the need for energy sufficiency in order to attract domestic and foreign investors.

The five-page resolution said the committee or task force, which should be formed within the year, should include representatives from the energy department, the Philippine Electricity Market Corp. (PEMC) which runs the wholesale electricity spot market (WESM), and the National Power Corp. (Napocor)

The resolution also urged the national government to ensure energy self-sufficiency by directing the National Transmission Corp. (Transco) to install a grid in northern Mindanao and another in Southern Mindanao instead of the planned single grid connecting the whole country, which the businessmen said would cost $500 million and will take many years to implement.

The business community also urged Napocor to construct or relocate a 100 megawatt diesel-fired power plant in Southern Mindanao where power is badly needed by the industries, The plant would cost around $100 million.

A study by the energy department showed that the country is energy sufficient only until 2010 and that Mindanao would be the first to suffer from energy shortage, followed by Luzon and the Visayas if contingency measures are not implemented.

President Arroyo, in her speech at the PBC Friday, ordered the energy department to listen to the businessmen’s concern regarding energy shortage.

The other requests of the PBC include:

* The reduction of Transco’s rate by 30 percent.

* The reduction of the expanded value added tax on fuel from 12 percent to 5 percent.

* An increase in the Energy Regulatory Commission’s budget to help improve its technical and review capability.

* The creation of a Renewable Energy Authority that would coordinate and plan the Renewable Energy Program of the government.

* Closer cooperation between the DOE and Philippine Chamber of Commerce and Industry in recommending appropriate amendments to the Electric Power Industry Reform Act, particularly in allowing an earlier open access.

_______________________________________

Gov’t slates $760M in new borrowings
Daily Tribune
10/23/2006
http://www.tribune.net.ph/business/20061023bus2.html

The government will borrow $760 million from multilateral financing agencies primarily for relending to the cash-strapped National Power Corp. (Napocor) and fund health and education projects.

The Bangko Sentral ng Pilipinas (BSP) approved last Friday the new borrowing plan. BSP Governor Amando Tetangco told reporters the government will borrow $450-million loan from the Asian Development Bank (ADB) to help restore the financial health of state-owned Napocor. The ADB is expected to approve the loan in December.

The BSP also approved the government’s plan to get a $200-million loan for the education sector and $110 million for health projects from the World Bank (WB).

“These two loans of government are for improving social services,” Tetangco said of those by the WB. “Both loans have the same terms and conditions which are 20 years maturity inclusive of eight years grace.”

Finance Secretary Margarito Teves said last month the government planned to raise about $1 billion in loans from multilateral agencies next year, up from about $900 million projected this year.

The government said its borrowing plan would be to rely more on official development loans rather than costly overseas debt to meet its foreign borrowing needs.

It also wants to lessen its dependence on foreign debt and shift to more domestic issues to cut its total debt now at $78.4 billion.

The government has a borrowing mix of 58 percent domestic and 42 percent foreign this year.

The government uses debt to fund its budget deficit, which is projected for 2007 at P63 billion, or 0.9 percent of gross domestic product (GDP), from an expected shortfall of below P125 billion, or 2.1 percent of GDP, this year.

3cr

October 23rd, 2006, 11:03 AM

RP losing out on potential investments
By MARIANNE V. GO
The Philippine Star
http://www.abs-cbnnews.com/storypage.aspx?StoryId=53942

The Philippines must improve its competitiveness or else it will lose out more potential Taiwanese investments to its ASEAN neighbors, according to Philippine special trade representative to Taiwan Romulo Manlapig.

According to Manlapig, some Taiwanese footwear and bicycle makers who were initially looking at locating in the Philippines have instead decided to move to Cambodia.

Another Taiwanese manufacturer of optical discs decided to invest in another country which Manlapig did not identify.

Manlapig warned that the country would have a hard time convincing these types of industries to move here because of the relatively high cost of labor and power.

"Unless we lower the cost of doing business, we will really have difficulty in attracting them," Manlapig said.

The Philippines, however, is trying to make its easier for Taiwanese investors to invest in the country by establishing a special economic corridor specifically between Clark and Subic and Taiwan’s Export Processing Zone in Kaoshiung.

However, realization of the economic corridor is still expected to take some time as the Philippines and Taiwan continue to negotiate tariff issues and market access concerns of Taiwan.

Fadah Hsieh, vice minister of Taiwan’s Ministry of Economic Affairs, said at least five Taiwanese firms have already expressed interest to take advantage of the privileges to be derived from the economic corridor program.

One them, The Faphir Tech, which is engaged in research and development, already established a facility in Subic last June while the others are in the final stages of their preparation.

Manlapig said the niche of the Philippines at this time is in high-value, skilled labor type of businesses wherein the cost of labor and power are not the main considerations.

____________________________________

P494M for farms vanishes: Seeds missing; fertilizers overpriced
BY PETER J. G. TABINGO
Malaya
http://www.malaya.com.ph/oct24/

IN 2004, a year after the country imported 610,000 metric tons of rice, the Department of Agrarian Reform transferred P494 million from the Agrarian Reform Funds to the Department of Agriculture to jumpstart hybrid rice production program which was seen as the answer to rice self-sufficiency.

The program was an appalling failure.

That year, rice imports jumped 148 percent to 900,000 tons and nearly doubled again to 1,791,726 tons in 2005.

The DA spent P394 million to purchase hybrid seeds, fertilizers and farm implements, but the process of distribution was so bad that of the 13,960 total bags of hybrid seeds sold in Regions II, III, IV-A and VI, agrarian reform beneficiaries (ARBs) got only 1,194 bags.

Of the 626 ARBs interviewed by auditors in the same regions, 375 said they were in dire need of hybrid seeds.

This was compounded by delivery foul-ups where the seeds arrived late, forcing the farmers to plant their inbred rice varieties rather than miss a cropping season. The errant hybrid seeds were sent back to DA suppliers.

Government lost money because the suppliers of the hybrid seeds – Bayer, SL Agritech and Seed Growers – had already been paid and were supposed to issue refunds for the unused bags.

"It would appear that the (DA’s distributor), PhilRice, was not even aware that a number of bags had already been returned and still on hand and that refund should be demanded from the suppliers," the audit team said.

In a 233-page report, the COA said the total amount squandered from P35 billion in recovered Marcos wealth stands at least P3 billion. The actual amount involved in hundreds of irregularities so far documented could be much larger as the investigation conducted was hampered by time constraints and the refusal of several agencies to cooperate

DIVERTED TO PRIVATE FARMS

While farmers in many agrarian reform communities (ARCs) were being left out, some P44.77 million worth of fertilizers and farm equipment ended up in private farms and subdivisions.

In Cebu, the Kasosyo Foundation Inc. received P6 million from the DA-Region VII Field Unit to purchase liquid fertilizers through the recommendations of Representatives Antonio Cuenco (Lakas-PROMDI, Cebu City) and Antonio Yapha Jr. (NPC-Alayon, Cebu). Another P3 million went to the municipality of Argao, Cebu.

Of the combined 2,976 recipients of fertilizers distributed by Kasosyo and Argao, only two were ARBs.

Deliveries of farm inputs to different municipalities of Lanao del Sur in the amount of P14 million could not be verified because there was no list of intended recipients.

In Davao del Norte, an inspection on Oct. 5, 2005 showed 2,249 bottles of foliar fertilizers out of 3,750 bottles purchased were dumped untouched at the DA-RFU XI warehouse.

Of the 1,501 bottles that were distributed, only 724 were documented, of which 104 went to ARBs.

On top of all these irregularities, COA discovered that the purchase of P48.351 million worth of fertilizers was overpriced by P42.13 million.

Verification by auditors in Cebu proved that 4,000 liters of "freegrow fertilizer" acquired and distributed by Kasosyo Foundation for P6 million was available from at least three other suppliers in the province at an average price of P125.75 per liter for a total of P503,000. Auditors computed the overpricing at P5.497 million.

In DA-Region IV, five units of fabricated shredders acquired to the tune of P3 million supposedly for distribution to ARBs in the province of Rizal found their way to the office of Antipolo City Rep. Victor Sumulong (Kampi).

Auditors traced three of the missing farm items – a P630,000 Tornado 10 hp shredder/chipper, a P740,000 H52 Tornado 10 hp hammermill/sifter, and a P630,000 single-phase 5 hp shredder – in the possession of Robinsons Homes Association Inc. in Antipolo. Probers were told the equipment were "donated" by Sumulong.

Another item, a P750,000 trailer-type shredder/chipper, was found in Sumulong’s own farm in the same province

The last shredder, a P250,000 SC-0-21 model chipper, was located in Barangay Dalig, Antipolo City, under private hands.

Further verification showed the trailer-type shredder was available at only P226,320 while the SC-0-21 model chipper was available for only P121,055, for a combine cost difference of P652,625.

GHOST FARMERS?

Two non-government organizations, the People’s Organization for Progress and Development Foundation, Inc. (POPDFI) and the Philippine Social Development Foundation Inc. (PSDFI), each received P25 million from the DAR between April 16 and May 25, 2004, in the midst of the heat of the national elections.

Under the memorandum of agreement, POPDFI was to allot P10 million for farm implements to be distributed in Passi, Iloilo, and P15 million in implements to Calamba, Laguna.

PSDFI was to purchase and distribute similar farm items worth P10 million in Bagabag, Nueva Vizcaya, and P15 million in Sta. Maria, Bulacan.

Of the 137 names of supposed beneficiaries in Passi and Calamba submitted by POPDFI in its liquidation report, not one turned out to be a resident of the barangays identified by the foundation. In fact, barangay officials said they knew none of the names that appeared in the POPDFI list.

The same situation was found in the case of the 29 names submitted by PSDFI as alleged beneficiaries in Bagabag and Sta. Maria.

Stranger still, POPDFI’s liquidation showed it distributed P15 million worth of farm implements in Passi when it was only given P10 million.

Between August to December 2005, DAR released another P45 million to POPDFI (P5 million), Social Development Program for Farmers Foundation Inc (P25 million), Masaganang Ani Para sa Magsasaka Inc. (P5 million) and Ginintuang Alay sa Magsasaka Foundation (P10 million).

The supposed beneficiaries were unnamed farmers in Saranggani, Agusan del Sur, Surigao del Sur, Isabela, Iloilo and Romblon.

Not a centavo of this last disbursement has been liquidated at the time of submission of the COA report.

chixbebe

October 23rd, 2006, 12:01 PM

Napocor expects to post profit in ’06

AS THE PESO CONTINUES TO STRENGTHen against the dollar, state-run National Power Corp. expects to post a positive operating income or even a net income this year.

Napocor president Cyril del Callar said it was difficult to project a specific number at this point, as the reckoning of foreign exchange gains or losses would be in end-December.

Despite this, he expressed confidence that Napocor would post at least positive earnings before interest, tax, depreciation and amortization (Ebitda), an indicator of cash flow, this year.

“Our fighting target is to sustain the profit posted last year,” he told reporters at the sidelines of the 32nd Philippine Business Conference last week.

The stronger peso, he said, would contribute to Napocor’s expected positive financial results for the year.

He said that for every P1 gain or loss against the dollar, the impact on Napocor was around P15 billion.

Last year, Napocor posted a net income of almost P86 billion, after almost a decade in the red.

marites4

October 23rd, 2006, 08:53 PM

Deficit seen below target this year
By Des Ferriols
The Philippine Star 10/24/2006

Finance officials finally admitted yesterday that the budget deficit would be below target this year, paving the way for what could be a significant reduction in borrowing in 2007.

The Bureau of Treasury (BTr) said yesterday that based on the spending and revenue performance for the first nine months of the year, the government would outperform its deficit target this year even with the supplemental budget approved by Congress.

Government officials have been careful not to spur market expectations but according to National Treasurer Omar Cruz, the momentum of the first three quarters was likely to carry over to the last quarter of the year.

"One thing is clear and that is the fact that we will be ahead of our program," Cruz said adding that "we cannot pick a specific number because that is less easy to predict."

Even with the P46.4-billion supplemental budget approved for spending in the last quarter, Cruz expressed optimism that the budget had enough room for spending to go up and still stay below the deficit ceiling.

According to Cruz, the Development Budget Coordinating Committee (DBCC) was already in the process of finalizing the fiscal budget for 2007 which would ultimately determine the government’s borrowing program.

"The market will be shocked at the degree of reduction in our borrowing program next year," he said. "We are not changing the bottom line, specifically keeping the deficit at P63 billion. But borrowing will go down," Cruz said.

The government slipped back into deficit in September but stayed way below its quarterly deficit target as expenditures lagged far behind revenue collections.

Operating under the re-enacted 2005 budget, the National Government has been consistently outperforming its original 2006 fiscal targets, containing its budget deficit well below the target as expenditures continued to tighten despite the increase in revenues.

The slowdown in public spending has worried investors and credit rating agencies who expressed fears that the inability to implement critical infrastructure and social services programs would eat into the growth momentum.

Under the re-enacted budget scenario, the country’s gross domestic product (GDP) was projected to grow by 5.3 percent, compared with the projected growth rate of 5.7 to six percent had Congress passed the 2006 budget.

DoggMann

October 23rd, 2006, 11:41 PM

http://business.inq7.net/money/columns/view_article.php?article_id=28315

Dow breaks 12,000; Phisix breaches 2,600

By Ron Nathan
Inquirer
Last updated 01:37am (Mla time) 10/24/2006

Published on page B2 of the October 24, 2006 issue of the Philippine Daily Inquirer

AYALA Corp. announced that it had sold its steak in Burger King. No, it is not a spelling misteak.

Philippine Airlines has just ordered eight wide-bodies Airbuses just to accommodate my wife. I had better be careful; she has started reading my articles.

I don't know if it is true, but someone told me that there is a place called Sexmoan between Angeles City and Subic. Is this true?

Don't come to my bank. I asked the teller to check my balance and she gave me a push.

And don't come to my hospital either, as the chief surgeon is ruder than Dr. House. He is nearly 70 but his hands and eyes are still good. The only problem is that he doesn't hear very well.

A newlywed came in for an appendectomy and got a vasectomy. Even worse was an 11-year-old boy who came in to be circumcised and was castrated. His only consolation was that he won the no ball prize.

I read recently that love is entirely a matter of chemistry. That is why my wife treats me like toxic waste.

Some readers have asked me the secret of our long marriage. We take time to go to a good restaurant twice a week, a little candlelight, dinner, soft music and dancing. She goes Tuesdays, I go Fridays. Having been married 10 years, I don't worry about terrorism. My wife and I were happy for 20 years. Then we met.

A British company received a huge order from North Korea for fish 'n' chips, our national dish. The government was delighted until they realized that they meant fission chips (for nuclear weapons).

* * *

The Dow index finally broke the elusive 12,000-points barrier after a struggle lasting six years. Most of the results announced so far have been above analysts' expectations. Outstanding were IBM with profits up 47 percent, and Google with profits almost doubled. Google shares rose by $33 on Friday.

Yahoo did not fare so well and is trying to catch up. It has a formidable task, as Google continues to expand into new areas.

Chipmakers were affected by price cuts and intense competition between Intel and AMD. The only chipmaker to be unaffected was Pringles.

Not all the US news was good. The producer price index rose by 0.6 percent, far above the 0.2 percent expected. This means that companies must either pass this higher cost on to the consumer, which is inflationary, or absorb it, which would adversely affect profit margins unless offset by increased efficiency.

The consumer price index came in at 0.2 percent for the third consecutive month. This is acceptable because it is equivalent to 2.4 percent a year, slightly above Federal Reserve Chairman Ben Bernanke's target of 2.0 percent. Housing starts surprised everyone buy rising from 165,000 to 175,000 in September, so there is no sign of a housing-led recession.

Investors are being lulled into a false sense of security and some are contemplating a rate cut by the Fed as early as next January. I think they are in for a big disappointment. I am certain there will be no change at the next meeting on Nov. 2 because Bernanke would not do anything immediately ahead of the mid-term election in which President Bush is likely to lose control of one House or even both.

His predecessor, Alan Greenspan, was always careful not to do anything that might be construed as political. But after the midterm election, I would not be shocked if there was a rate hike.

A personal message to Bernanke: I do not like your whiskers and moustache. I will ask the G7 to send you a G3 razor and I moustache you to get rid of the moustache.

The Philippine stock index (Phisix), after moving sideways for nearly three weeks, eventually broke out of its trading range. It may move up further ahead of the third-quarter corporate results, which are yet to be released. Generally speaking, they are expected to be good and on a price-earnings ratio of 14.5 times, the market is not expensive but if the results fall short of expectations, there will be a correction.

Generally speaking, stocks go up two weeks before the results are released, and down afterwards. So, it is usually right to sell the day before the release. This works most of the time in all countries because a large bull position is built up and it needs new buyers to push prices up further.

Often, there are not enough new buyers so the stock goes down even if the results were very good. The only exceptions are when there are unexpected stock dividends or sizable special dividends.

Other Asian markets were strong and are in sight of a six-year high. OPEC has decided on a cut of 1.2 millions barrels a day, slightly more than anticipated, but US inventories are 14 percent above the five-year average, so crude oil fell below $57 a barrel.

As commodities follow the oil price (I still don't know why), gold is down again after breaching $600 an ounce momentarily. As the stocks follow the metal price, you have to be on your mettle.

San Miguel Corp. has a thai-up with Bangkok and had sales of 200 million baht from non-alcoholic beverages and fruit juice.

Paxys will set up a company with Stellar Holdings to provide outsourcing solutions to Australian-based clients, a market largely untapped and unserviced by Philippine call centers.

Paxys has acquired three companies in the past year, spending $28.3 million to expand its operations and now has 5,200 seats. Allowing for the rights issue at P1, anyone who followed my "buy" recommendation has now multiplied his or her capital five times.

I expect Heinz to start outsaucing shortly otherwise they will never ketchup.

There is a good IPO coming out shortly. I can't mention it by name but it sounds fishy.

I will not write next Tuesday, as readers will either be in the cemetery or in the provinces. I will either write later in the week or I will wait until the following week.

chixbebe

October 24th, 2006, 05:59 AM

THE stock market Monday climbed to its highest finish in more than nine years, buoyed by buying extended from last week, record highs on Wall Street and bets on improved third-quarter earnings, fund managers said.

The Philippine Stock Exchange index (PSEi) rose 8.11 points or 0.31 percent to 2,625.52, having traded in a range between 2,613.05 and 2,632.91.

It was its best finish since it closed at 2,572.43 points on Aug. 11, 1997, the PSE said in a statement.

It was the fourth straight day the PSEi has trekked north.

The broader all-share index rose 5.14 points to 1,613.88.

Value turnover reached P3.7 billion with gainers beating losers, 58 to 48.
Foreign buying amounte*d to P2.34 billion and foreign selling, P2.09 billion, for net foreign buying of P250 million.

"The regional markets have been very strong, in line with the Dow Jones' all-time highs," said Paul Joseph Garcia, chief investment officer at ING Investment Management, "so I think the equity markets have been pricing in a possible slowdown in the US and, therefore -- if they are discounting a soft landing -- they are expecting a possible recovery."

Espma

October 24th, 2006, 07:46 AM

Sinjin P.

October 24th, 2006, 10:51 AM

2007 borrowings to breach P1 trillion

By Jodeal Cadacio
Reporter

THE national government’s total borrowings next year could breach the P1-trillion mark, way off its target gross financing of P390.8 billion, the Congressional Planning and Budget Department (CPBD) has disclosed.
This is contained in a CPBD paper entitled “Financing the 2007 Budget,” prepared by director Dina de Jesus-Pasagui and the department’s Fiscal Studies Group, with inputs from CPBD director General Rodolfo Vicerra and acting executive director Manuel Aquino.
The CPBD, the House of Representatives’ think-tank, said the P390.8-billion programmed gross borrowings for 2007 would finance the P63-billion projected budget deficit, as well as the P304 billion in principal amortization, which is an off-budget item.
At least 67 percent of the P390.8 billion, or P260.1 billion, would come from domestic sources; and P130.7 billion or 33 percent would be from foreign creditors.
“However, close scrutiny of [2007] budget documents [submitted to Congress by Malacañang] would indicate that total borrowings in 2007 may even be higher than P390.8 billion as reported, because what was reflected in the government’s financing program is already net of loans maturing during the year and contribution to the Bond Sinking Fund,” the CPBD said.
It said that “in actuality, total borrowings would amount to P1.028 trillion.”
The CPBD said that based on documents submitted by the Bureau of Treasury, gross flotation of Treasury bills and Fixed Rates Treasury bonds next year will amount to P636.2 billion and P261.3 billion, respectively, or total domestic borrowings of P897.5 billion instead of just P260.1 billion.
It said T-bills and T-bonds to be retired next year would amount to P617.4 billion and P20 billion, respectively, while the scheduled contribution to the Bond Sinking Fund would total P232.2 billion.
The CPBD noted that in 2005, gross borrowings were much higher than programmed, at P615.1 billion. For this year, it is estimated that the financing program would be kept at P531.6 billion due to the low level of government spending.
From January to August this year, actual national government disbursements amounted to P676.4 billion or P63.1 billion less than program of P739.5 billion.
It said the lower spending may be traced to several factors like savings in interest payments due to fiscal reforms and spending authority capped to 2005 reenacted budget levels.
The CPBD said that for 2007, the amount to be sourced from the credit market is way above the budget gap due to the repayment of principal loan and other off-budget expenditures.
The scheduled principal amortization of P303.8 billion is equivalent to 77.8 percent of reported gross borrowings, of which P71.7 billion is allotted to foreign loans; while P232.2 billion is for domestic loan repayment through the Bond Sinking Fund.
The fund was created under Republic Act 1000 requiring annual contributions sufficient to redeem at maturity the bonds issued with at least three-year tenure.
The CPBD noted that as a “hedging strategy, proceeds of the Bond Sinking Fund are parked in investments from which sizeable amount of income is derived by the Treasury bureau.
In 2005, the fund generated for the government some P34.8 billion in revenues, or almost 50 percent of total agency collections for the year.
The CPBD said that in absolute terms, national government debts will continue to slightly rise from P4.081 trillion to P4.167 trillion—or an increase of 2.1 percent—in 2007.
However, as a percentage to gross domestic product, the total outstanding debt is projected to be on the downtrend from 71.7 percent in 2005 to 62.1 percent next year.

chixbebe

October 25th, 2006, 10:41 AM

New borrowing tack eyed

Finance Secretary Margarito Teves yesterday said the Philippines may cut down its foreign commercial borrowings next year as offers from multilateral organizations such as the Asian Development Bank and the World Bank pour in.

The government initially planned to borrow a total of $2.2 billion from foreign sources next year, comprising of $1 billion in official development assistance funds and $1.2 billion in commercial money.

“There could be changes in the configuration,” Teves told reporters. “We will probably have more flexibility now in getting a combination of program and project loans vis-à-vis commercial loans which is good for us because project and program loans are cheaper than commercial loans.”

The government this year had planned to borrow some $854 million from ODA sources but program loans approved by the Bangko Sentral ng Pilipinas had exceeded the amount.

The central bank has already approved $960 million worth of program loans to the national government from the Asian Development Bank from end-September to mid-October alone, the largest being the $450-million power sector restructuring loan.

Teves said foreign borrowings next year would remain at $2.2 billion, adding that it would be difficult to do away with commercial borrowings.

“It’s a timing issue. ODAs take a while because you have to do a lot of negotiations. The beauty of commercial loans is that you can tap it anytime, that is its flexibility. In the past, there were not much ODAs coming in so we were stuck with the commercial,” Teves said

Teves said program loans such as those recently approved by the central bank would give the government a lot of flexibility in funding if there were delays in the passage of the budget.

Teves has ordered the finance department to study its options on foreign financing after learning that more ODAs can come in within the year.

Teves said he initially had the impression that the Philippines was stuck to its foreign borrowing strategy because ODAs were slow in coming in.

“We don’t have that inflexibility anymore because they [commercial banks] know that at least we are trying to work on our revenues. They are more supportive and less reluctant to help us.” Teves said. “It’s an interesting change from what it was in September 2005.”

----http://www.manilastandardtoday.com/?page=business1_oct25_2006

3cr

October 26th, 2006, 09:17 AM

Factory output drops 9 consecutive months
Chito Lozada
Daily Tribune
http://www.tribune.net.ph/business/20061026bus1.html
10/26/2006

Manufacturing output declined by seven percent last August for the ninth consecutive month of production fall since December last year when the data showed a 0.1 percent contraction, National Statistics Office (NSO) data released yesterday showed.

NSO’s preliminary figures showed the reduced output was noted in 10 major sectors namely: Machinery excluding electrical, leather products, electrical machinery, textiles, tobacco, footwear and wearing apparel, petroleum products, non-metallic mineral products and transport equipment.

The NSO’s volume of production index (VoPI) showed a consistent slide since December last year. The last time the data were in the positive territory was in November last year when the VoPI showed a four percent growth.

The index contracted 8.2 percent in January, 12.1 percent in February, 7.8 percent in March, 13.2 percent in April, 5.7 percent in May, 6.1 percent in June, 10.6 percent in July and seven percent in August.

Lower production in paper and paper products, wood and wood products and rubber products also contributed to the 7.0 percent decline in volume.

Manufacturing production on a monthly basis posted a 4.4-percent growth in August after posting a 2.8-percent drop in July.

The turnaround was brought about by increases in 13 major sectors, led by chemical products, beverages, wood and wood products, non-metallic mineral products, food manufacturing, petroleum products and fabricated metal products.

The value of production index rose to 6.3 percent in August compared to last year’s, according to the preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI).

Basic metals continued to lead the major sectors as it exhibited the highest growth of 36.5 percent.

Seven other sectors that reported significant increases were in the sectors of miscellaneous manufactures, beverages, food manufacturing, chemical products, electrical machinery, rubber products and fabricated metal products.

Meanwhile, the value of net sales on a year-on-year basis registered a 4.4-percent rise in August mainly due to the 26.7-percent growth of basic metals.

Two-digit increment were also observed in the sectors of petroleum products, beverages, miscellaneous manufactures, rubber products, electrical machinery and food manufacturing.

On a monthly basis, the value of net sales slightly grew by 1.1 percent from the previous month’s decrease of revised 2.5 percent.

The average capacity utilization in August for total manufacturing was estimated at 80.3 percent.

The sectors that posted more than 80 percent capacity utilization rates were machinery excluding electrical, electrical machinery, petroleum products, paper and paper products, miscellaneous manufactures, leather products, rubber products, basic metals, food manufacturing and chemical products.

3cr

October 26th, 2006, 09:27 AM

RP seen to post modest growth
By Ma. Elisa P. Osorio
The Philippine Star 10/26/2006
http://www.philstar.com/philstar/NEWS200610260706.htm

The Philippine economy is expected to post a modest growth this year despite the slowdown in global performance, a top economist said.

"The Philippines will go closer to six-percent growth," said Paul Donovan, managing director and senior global economist of Swiss banking giant UBS, in a press conference yesterday.

For the first nine months of the year, the country’s economic managers said gross domestic product (GDP) likely rose by 5.5 percent.

Donovan said the growth in the economy will be fueled by domestic investments as exports are expected to fall following the decrease in the demand requirements of US consumers.

"The investments can take over (provided the) fiscal policy remains tight," Donovan explained.

Donovan said private domestic investments will dominate the country’s economy as the cost of funding is expected to be "subdued."

He said factors contributing to the "subdued" cost of funding are steady interest rates and the banks’ willingness to lend. Interest rates are expected to move only slightly since the peso will most likely remain strong against the dollar next year.

The steady interest rates, Donovan said, will prompt banks to moderately change their attitude towards lending and be more willing to fund domestic projects.

"Credit will be readily available," Donovan said.

However, Donovan warned that domestic risks caused by political factors may further weaken consumption which can in turn discourage domestic firms to invest.

Donovan said next year’s election may have a negative effect in the economy if politicians ease the fiscal retraints the government has previously imposed. "You won’t get investments with that."

Should this happen, the economic growth will fall below five percent, he added.

Meanwhile, Donovan said UBS expects the peso to stay at the 49.50 level against the dollar. The investment bank’s yearend forecast for the local currency is at 50,, with an average trade of 51.50.

3cr

October 26th, 2006, 09:30 AM

Election spending, supplemental budget to boost economy in Q4
By Darwin G. Amojelar and Likha C. Cuevas
Manila Times
http://www.manilatimes.net/national/2006/oct/26/yehey/business/20061026bus4.html

ELECTION-RELATED spending and the passage of the supplemental budget are likely to keep the Philippine economy expanding at a faster pace in the fourth quarter, with the country seen to grow stronger despite a feared global slowdown next year, according to pundits.

Dennis M. Arroyo, director for the National Economic and Development Authority (NEDA) National Planning and Policy Staff, said election-related spending and candidates’ early campaign in the last quarter would boost gross domestic product (GDP), a measure of the total value of goods produced and services made locally.

“It [GDP] could be over 5.5 percent,” Arroyo said.

In the fourth quarter last year, the domestic economy grew 6.1 percent, buoyed by the favorable performance of agriculture, services and industry.

Apart from advanced poll spending, the P46.4-billion supplemental budget passed by Congress would most likely finance the salary of teachers and firemen, as well as fund infrastructure projects, Arroyo said.

He said exports and the services sector would be the main driver of the economy in the last quarter, noting that 34 percent of remittances will pour in during the period.

Socioeconomic Planning Secretary and NEDA Director General Romulo L. Neri earlier said that the GDP is likely to grow by at least 5.5 percent in the third quarter.

In the second quarter, the GDP grew by 5.5 percent.

For this year, the government expects the GDP to grow at about 5.6 percent.

Growth ‘strongest’ next year despite global slowdown

Separately, UBS said the Philippines’ growth next year, apart from that of the United Kingdom, would be the “strongest” despite the predicted global economic slowdown.

Paul Donovan, UBS global economics managing director, said that higher investment spending in 2007 would be the Philippines’ main driver of economic growth, compensating for the forecasted exports downturn due to a slowing US economy.

As of the second quarter this year, government estimates exports contributed as much as 50 percent to the country’s total output.

Donovan said, however, that the composition of GDP growth would change because of higher domestic demand.

“There would be a slowdown in the Philippine exports growth and would not be growing as rapidly [as this year] but it would not register negative growth,” Donovan said. “[In fact], the Philippines is the only the economy aside from UK that could be stronger in 2007,” he added.

UBS projected GDP growth of 5.8 percent to 5.9 percent for the Philippines next year.

Donovan said that on the average, economies would grow by 4.5 percent this year and by 3.4 percent next year. Most countries have experienced an uptrend in growth for the last four years, he said, but this would be reversed as economies would be in for a soft landing and would stay below the trend for the rest of the decade.

“It is slowing, but not collapsing,” Donovan said, adding that a soft landing is more manageable than a recession.

The expected soft landing is brought about by the slower rate in US consumer spending—which makes up 75 percent of that country’s economy—and this would have a domino effect on countries dependent on exports catering to the US market.

The Philippines, however, is still exposed to risks that would pull its economic growth below 5 percent. These risks include the possibility of global recession instead of just a soft landing like in 1991, Donovan said. Global recession would mean much lower exports for the Philippines that would result to higher unemployment rate and lower investments.

On the local front, the 2007 elections would pose significant risks if the government is unable to contain spending. The UBS economist said this would put higher pressure on domestic bond yields and would push interest rates higher, thus stifling public and private investments.

Because of this scenario, Donovan said the US Federal Reserve would cut interest rates by one percent next year to arrest global recession.

chixbebe

October 26th, 2006, 09:34 AM

The managing director and senior global economist of Swiss banking giant UBS were confident that Philippines will attain its 6% growth and that growth will be fueled by domestic investments as exports are expected to fall following the decrease in the demand requirements of US consumers. With this result, they are expecting that we will post as the modest growth this year.

DoggMann

October 26th, 2006, 03:53 PM

http://www.atimes.com/atimes/Southeast_Asia/HJ26Ae01.html

Philippine economy on the mend
By David L Llorito

MANILA - Philippine President Gloria Macapagal-Arroyo may be suffering politically, with allegations of vote-rigging and state-sponsored human-rights abuses darkly hanging over her embattled administration. But the economist-turned-president is simultaneously riding a rising tide of good economic news, which is significantly shoring up her government's staying power.

In the first seven months of this year, net foreign direct investments registered with the Bangko Sentral ng Pilipinas (BSP), the Philippine central bank, reached US$1.15 billion, a
60% jump over the same period last year. Led by US, Japanese, German and British investors, foreign funds are pouring into manufacturing, led by outlays into paper, chemicals, electronics and steel, as well as services, including business process outsourcing, tourism, engineering and construction.

Healthy capital inflows are boosting the local bourse. Francis Ed Lim, president and chief executive officer of the Philippine Stock Exchange, notes that the stock market has recently reached highs not seen since the heady days preceding the 1997-98 Asian financial crisis. "I am sure fiscal reforms in the government have made us an attractive investment alternative," Lim told Asia Times Online. He contends that listed companies are expected to turn in bumper profits this year, due largely to the country's improving economic fundamentals.

In the past two-and-a-half years, as measured by gross domestic product (GDP) figures, real economic growth has averaged between 5% and 6% and state economic planners are confident the trend will continue this year and over the medium term. Foreign remittances, which are on pace to top $12 billion this year, still contribute disproportionately to domestic consumption and total GDP. However, economists contend that recent economic growth has been more broad-based, with agriculture and industry contributing more in percentage terms than in the past.

That performance has set Arroyo's spin doctors in upbeat motion. "The economy is on an extended bull run and we are confident that the people can keep the pace going until we finally achieve economic takeoff," she recently said to a meeting of local and foreign business people, where she attempted to drum up $3 billion of new investments.

Romulo Neri, director general of the National Economic and Development Authority (NEDA), says that apart from the $30 billion export-oriented electronics and cyber-services industry, new growth drivers such as agribusiness, marine products, mining and tourism, among others, will boost average expansion to around 7% by 2010, potentially putting the Philippines on par with fast-growing China, India and Vietnam.

More soberly, multilateral agencies credit the government's reform policies for the improved performance, particularly those measures that Arroyo implemented soon after the controversial 2004 presidential election. The International Monetary Fund (IMF) recently noted that until recently the Philippines had suffered from "policy drift", which resulted in mushrooming public debt and unwieldy external financing obligations. That, the IMF said, had left the economy vulnerable to both internal and external shocks.

Since 2004, Arroyo has undertaken significant belt-tightening reforms, including boosting the value added tax rate from 10% to 12%, the corporate tax rate and excise levies, which combined have substantially narrowed the fiscal deficit and stabilized national finances. Non-financial public sector deficit was slashed from 5.3% of GDP in 2003 to 2% of GDP by the end of 2005. Those reforms have importantly freed up funds for priority spending, including badly needed outlays for new infrastructure.

They've also helped to rein in galloping inflation, which has dipped from around 7.5% last year to currently below 6%. Those improving fundamentals have made the peso one of Asia's best-performing currencies this year, up more than 10% against the greenback, year-on-year as of mid-October. Some local and foreign analysts predict that the country is due for a sovereign risk upgrade, which the country hasn't seen for over nine years.

Good news, bad news
At the same time, independent economic analysts say there is a drastic need for further reforms, and some fear that the recent spate of good economic news could lead to complacency. "There are clear positive developments in the economy. However, the picture continues to be a mix of good news and bad news, marked with a number of puzzling contributions," said Cielito Habito, economist from the Ateneo Center for Economic Research and Development, and former NED director general during the presidency of Fidel Ramos from 1992-98.

"Of the three key variables that matter most - prices, jobs and incomes - prices and incomes are showing some improvements, but the already bad jobs situation has gotten even worse," said Habito. He notes that despite strong economic expansion, new employment grew by only 2.3%, lagging the annual 2.6% expansion of the labor force, which has resulted in higher unemployment, now at around 2.9 million potential workers.

Habito also notes that despite the improving economic fundamentals, consumer and business confidence are still in the doldrums, due to the ongoing political crisis, rising unemployment and, in places, ineffective government stimulus. According to the BSP, consumer confidence in the third quarter was a negative 37%, worryingly unchanged from the second quarter. Rising global crude prices and increasing local labor costs, meanwhile, have hit business confidence, which declined from 31.6% in the second quarter to 21.7% in the third quarter of this year.

Government officials contend that recent reforms will take time to trickle down. "I think it's a hangover from last year's political crisis," said Dennis Arroyo, executive director of NEDA's national policy and planning, who is not related to President Arroyo. Election rigging allegations against Arroyo have recently led to mass street demonstrations, the resignation of 10 cabinet members and widespread rumors of a military takeover, which motivated the embattled president to declare a state of emergency in February.

"Remember that investment decisions lag by at least six months. Those [political events] are still impacting us. So there's an investment lag," said NEDA's Arroyo, who contends that once government spending kicks in for the third and fourth quarters, the private sector would be encouraged to accelerate their investment decisions. "We are well on our way to a 5.8% to 6.6% growth in 2007 and about 7.3% by 2010," said the official.

Other independent economists, however, are less optimistic. Joachim von Amsberg, the World Bank's country director in the Philippines, contends that an unresolved "paradox" is adversely affecting the economy's performance.

The Philippines, he said, is located in a "great neighborhood" of booming East Asian economies, with educated and English-speaking people, abundant natural resources and some strong and dynamic sectors like electronics and cyber-services. "Yet its growth rate has been below potential," von Amsberg said, noting that until now growth has been driven more by foreign remittances than domestic investment or rapidly expanding exports.

"Output per worker in the Philippines is up 50% between 1961 and 2003 as compared to 450% in other East Asian economies. It's not due to differences in educational attainment or human capital, but it's due to lower physical capital accumulation and productivity growth," he said. He contends that Arroyo needs to pursue a clearer, deeper reform agenda, which aims to ensure the credibility of contracts, open and competitive bidding for infrastructure projects, deregulate key economic industries and liberalize the financial system.

"Continuous attention should be given to reducing transactions costs through eliminating red tape, simplifying the adjudication process, and strengthening the integrity and capability of key regulatory institutions," he said. Clearly there is still much work to be done before the Philippines enters the ranks of Asia's powerhouse economies. Yet, slowly but surely, barring another major political hic-cup, the economic picture is improving.

David Llorito is a researcher at the BusinessMirror, a Manila-based daily newspaper. He has more than a decade of experience in socio-economic research, policy analysis and business-economy journalism in the Philippines and recently won the Jaime V Ongpin Award for Excellence in Journalism (Explanatory Category) as well as the Australian Ambassador's Choice Award 2006.

sandrn

October 26th, 2006, 06:22 PM

BSP to prepay $215M of its outstanding obligations
By Des Ferriols
The Philippine Star 10/27/2006
http://www.philstar.com/philstar/NEWS200610270702.htm

The Bangko Sentral ng Pilipinas (BSP) has decided to prepay another $215 million of its outstanding debts, summing up its total prepayments for the year to $1.17 billion.

The BSP said it would prepay the term-loan facility in November to reduce its total debt stock, a move that was projected to save the BSP at least $32 million in interest payments.

BSP Governor Amando M. Tetangco Jr. said the portion that the BSP would prepay was originally scheduled to mature in 2008 although the larger portion was scheduled to mature in 2010.

"We have the external liquidity to do this so we are going to do it," Tetangco said. "We’ll save on interest payments."

Earlier this month, the BSP announced it would prepay some $460 million, a move made possible by the country’s strong international reserves on the back of strong foreign exchange inflows from overseas workers and foreign investments.

The $450-million facility was originally scheduled to mature in April 2007 and April 2009, the second loan prepayment that the BSP made this year after pre-paying a $500-million term loan in April.

The April pre-payment consisted of a $395.5 million term loan and $104.5 million floating rate notes.

The BSP’s borrowings are not related to the government’s budget deficit and stems mainly from its efforts to boost reserves which have plummeted to precarious levels after the Asian financial crisis in 1997.

The latest available data from the BSP indicated that the GIR reached a new record high in September of $21.56 billion as dollar inflows also reached record levels due mainly to the government’s heavy foreign borrowing.

According to the BSP, the GIR also increased due to inflows from the BSP’s foreign exchange operations which helped mitigate the foreign exchange requirements for payments of the National Government (NG) and BSP’s maturing obligations.

The BSP said the preliminary end-September GIR level was adequate to cover about 4.3 months of imports of goods and payments of services and income.

The country’s record-high GIR has pushed the balance of payments (BOP) to surplus, recorded at $2.528 billion for the first eight months of the year.

3cr

October 26th, 2006, 06:40 PM

Agrarian reform/assistance can only help our farmers if the funds/money actually gets to them otherwise it's no help at all.
FM funds handled by Palace vanishes
Not a centavo of P20M was received by ‘recipient’
BY PETER TABINGO
Malaya
http://www.malaya.com.ph/oct27/news1.htm

THE Office of the President received at least P53 million of the questionable releases by the Department of Land Reform from the confiscated Marcos Swiss deposits.

Of the amount, P20 million disappeared without a trace.

A review by the Commission on Audit of DLR’s expenditures in 2004 showed the agency transferred P20 million to the OP under the President’s Social Fund in December 2004 as "assistance to calamity stricken agrarian reform communities (ARCs) affected by typhoons Winnie and Yoyong."

According to the resident auditor of the OP, the sum was forwarded to the Department of National Defense-National Disaster Coordinating Council (DND-NDCC).

Along the way, the money vanished.

A letter of the resident auditor of the NDCC confirmed that not a single centavo of the P20 million from the President’s Social fund arrived.

Auditors were puzzled why DLR undertook such a fund transfer as NDCC had a P700 million appropriation under the 2003 re-enacted budget.

"The fund released to DND-NDCC was not yet liquidated to DAR and could not even be traced by the audit team leaders in both OP and NDCC books. The DAR’s (DLR’s) claim then that the (sum) was used to ease the difficulties of calamity-stricken ARCs has no basis," the COA said.

Also questioned was a P2 million "financial assistance" to the Aniban ng mga Magsasaka sa Niyugan Inc. under the National Anti-Poverty Commission-Farmer Secretariat Council, an agency also directly under the OP.

Auditors said NAPC had its own regular allocation of P49.544 million under the re-enacted 2003 national budget.

In addition, DLR handed P514,095 to the National Commission on Indigenous Peoples, another agency under the OP.

According to DLR, P334,095 was earmarked for "reimbursement of expenses during the NCIP’s consultative activities" while P180,000 was in the form of "financial support."

COA said NCIP also had its own regular allocation.

On whose authority the fund transfers were carried out remained murky as the executive committee of the Presidential Agrarian Reform Council had issued no resolution or order of special release.

The PARC disputed the portion of COA’s report that contained a negative review of a supposed P30-million livelihood development aid handed by DLR in 2004 to the National Council on Food Security and Job Creation (NCFJBC), yet another agency under the OP.

The amount was described as "long-term equity investment" in the Calauag, Quezon Province Integrated Coconut Processing Plant Inc. (CQPICPPI). Less than 18 months after getting the money, the project was shut down.

Again, not a single centavo could be accounted for.

With the money, NCFJBC was directed to "establish a coconut processing plant" whose earnings were supposed to be turned over to the National Agribusiness Corp. for "reinvestment in similar undertakings."

On inspection by the COA audit team of the plant site on Aug. 25, 2006, the area was silent and cold – as silent and cold as the trail of the P30 million it devoured.

DLR said it was exerting efforts to recover the investment, along with any cash it was hoping to find in the project’s bank account.

It said it was having difficulties in transferring CQPICPPI’s facilities to the government "due to the difficulty in locating the concerned officials who handled the project (the NCFJBC) because said office under the OP has been abolished."

PARC, in its response to the COA review, tried to pass the blame on former Budget Secretary Emilia T. Boncodin, who was allegedly responsible for proposing the investment during a cabinet meeting in September 2003.

COA, however, had the last word on who had the responsibility.

It said PARC-Excom Resolution No. 2003-93-01 says that, "whereas, in March this year, the Office of the President directed the establishment of a coconut processing plant…"

marites4

October 26th, 2006, 08:20 PM

wow 7percent in 2010 that's great news. the opposition politicians please don't bungle this up. Administration please continue with the reforms and don't get complacent.

Sinjin P.

October 27th, 2006, 02:31 AM

Chinese investors to put up 3
ethanol projects worth P3B in RP

By Jennifer A. Ng
Reporter

CHINESE businessmen are set to invest around P3 billion ($60 million) to put up three ethanol projects in Zamboanga and the Negros province.

Agriculture Secretary Arthur C. Yap disclosed that he is set to sign agreements with Chinese businessmen during President Arroyo’s state visit to China starting October 29.

Yap, who will join the President’s delegation said, he is set to sign two memoranda of understanding and one memorandum of agreement with Chinese businessmen for the construction of the ethanol projects.

“Each of the three ethanol projects would cost $20 million (P1 billion),” said Yap. The chief of the Department of Agriculture (DA), however, did not provide details on the ethanol projects.

The Chinese investors would join the list of foreign firms that have earlier expressed interest in putting up an ethanol plant.

Earlier, American firm Far East Biofuels has pronounced it is keen on putting up a “multibillion” peso ethanol plant in lahar-raved Pampanga.

A British-led firm, Bronzeoak Philippines Inc., has declared it is shelling out P1.5 billion to put up another ethanol plant in Bukidnon. The plant will have a capacity of 150,000 liters.

Other private firms, together with the government, have expressed interest in cashing in on the fuel ethanol trade.

Earlier, Herminio Teves Co. and Tao Corp. entered into a joint venture with the Trade department’s investment arm, the National Development Corp. (NDC), to develop and operate an integrated ethanol plant in Negros Oriental.

The joint venture, which will be called the Tamlang Valley Agricultural Development Corp., will undertake countryside land lease activities for fuel ethanol production.

Tamlang Valley is a 65 percent to 35 percent split between the private investors and the government, with NDC taking around 25 percent of the total equity. NDC, however, did not say how much it is putting up to form the joint venture.

The joint venture firm will lease approximately 20,000 hectares of public agricultural land in Tamlang Valley, Negros Oriental for the development and operation of an integrated ethanol plant.

The government is aggressively promoting the production of ethanol given the high cost of petroleum-based fuel in the international market today.

The country’s current demand for ethanol is being filled by imports mostly from Brazil and Australia.

Ethanol is a clean-burning, high-octane fuel that is produced from renewable sources such as sugar cane.

The increasing demand for this biofuel is expected to revive the glory days of the country’s sugar industry.

amras

October 27th, 2006, 02:52 AM

di ko alam kung bakit ako kinakabahan habang binabasa ang mga articles dito...

marites4

October 27th, 2006, 05:41 AM

Nasobrahan ka siguro ng kape.

adverg

October 27th, 2006, 06:28 AM

Baka walang gatas kaya siya kinabahan dahil puros caffein ang nainom niya, hehehe anyway whatsoever happen I will tend my belief to be optomistic.

beads_strawberries

October 27th, 2006, 07:25 AM

I hope that PGMA would bring back good news after she visits China these coming days. We all know that China is one sleeping giant that would be beneficial once we improve bilateral relations with it in terms of trade and investments.

Also, with the ASEAN summit to be held in Cebu this December, we can be assured of more positive effects in our economy.

chixbebe

October 27th, 2006, 11:49 AM

BSP confident of hitting inflation target in year

The Bangko Sentral ng Pilipinas (BSP) expressed confidence yesterday in achieving its four to five percent inflation target for 2007 while it continues to address the risks of future inflation.

In its Inflation Report for the Third Quarter of 2006, BSP said its key policy priority is the management of risks to inflation expectations and from second-round effects, particularly from wage setting.

The report added that BSP stands ready to act upon escalating risks to the outlook for inflation and to inflation expectations.

BSP confirmed that price pressures continued to ease in the third quarter of the year as headline and core inflation sustained their decline.

This sets that favorable agricultural production pushed down food inflation while the strengthening of the peso and easing in world oil prices helped bring down non-food inflation.

Demand-based price pressures, meanwhile, remained limited (as implied by the sustained easing in core inflation) due in part to weak credit activity and uneven improvements in demand conditions.

The report also highlighted that the market interest rates generally declined while the peso continued to strengthen.

Treasury bill rates eased on the back of continued strong demand for government securities and ample liquidity in the financial system.

“Nonetheless, the peso continued to strengthen against the US dollar on positive market sentiment owing to improving economic fundamentals, sustained dollar inflows from remittances and investments, and the general strengthening of Asian currencies,” the BSP report added.

Moreover, global economic activity remained strong in the first half of 2006, aided by strong consumer spending and resilient growth in services.

However, recent developments also suggested shifts in the pattern of global activity.

sandrn

October 27th, 2006, 11:49 AM

Philippine bonds hit record high
http://business.inq7.net/money/topstories/view_article.php?article_id=29071
Reuters
Last updated 02:23pm (Mla time) 10/27/2006

HONG KONG -- Asian dollar bonds rallied strongly on Friday, tracking other buoyant emerging debt markets, with sentiment also supported by a limited flow of new issues. Philippine 2016 bonds were traded at 111.50 and its 2031 bonds were at 109, a record high.

Overnight, the benchmark JP Morgan's EMBI+ index struck a record high of 397.68 points in New York trade.

"The rally started with the stronger Treasuries, then
Brazil provided an additional boost ... we are seeing buying across the board," said a Manila-based trader.

Five-year Philippine credit default swaps -- insurance-like contracts that offer protection against debt default or restructuring -- came in to a record low of 135/138 basis points.

Indonesian sovereign bonds also rose, with 2035 bonds rising an eight of a point to 118.375/118.625.

High-grade bonds rose, having posted only modest gains on Thursday when the US Federal Reserve's remarks supported the view that the US fed funds rate is likely to remain stable for several months.

Those comments had significantly boosted high-yielding bonds as investors chased riskier assets feeling more comfortable about the US interest rate outlook.

Benchmark 2014 bonds in conglomerate Hutchison Whampoa Ltd. moved in by 2-3 bps to 99/95 bps over comparable US Treasuries.

Its 2033 bonds traded at 155 bps, the narrowest spread this year.

Traders said the primary market was also boosting prices.

"New supply has not stepped up to the level that was expected, that is helping the rally as well," said a
Singapore-based trader.

With October almost over, new offshore bond issues so far this month have totalled $3.5 billion, much smaller than September's tally of $6.2 billion.

%u2014-------------------------------------------------------

Trade deficit narrowed to $621M in August
http://business.inq7.net/money/topstories/view_article.php?article_id=29049
Xinhua Financial News Service
Last updated 02:25pm (Mla time) 10/27/2006

(UPDATE) THE Philippines%u2019 trade deficit in August narrowed to $621 million from $726 million in the same period last year, the National Statistics Office said Friday.

This brought the January to August trade gap to $2.9 billion from $4.25 billion in the same period last year.

A trade deficit accounts for the cost of the country%u2019s imports and exports and is thus an indicator of how much foreign currency the country is earning.

Figures from the NSO show that imports in August grew 15.3 percent annually, and electronics imports, which comprise bulk of the country%u2019s purchases from other countries, rose 12.9 percent.

The Philippines imported for the first eight months $33.858 billion worth of goods. That%u2019s a 10.2 percent increase over the same period last year. Exports, on the other hand, grew 16.9 percent to $30.958 billion.

The double-digit growth in imports in August also reflected the impact of higher oil prices, the NSO said in a written statement.

Imports of mineral fuels, lubricants and related materials accounted for 19.3 percent of the total bill in August and posted an increase of 41.8 percent to $944.16 million.

Shipments from the US and Japan accounted for a third of the country's imports in August.

Accounting for 15.3 percent of the total bill, imports from the US fell 5.2 percent to $747.71 million. Exports to the US amounted to $808.54 million.

Shipments from Japan were billed at $591.98 million or 12.1 percent of the total, against export earnings of $632.04 million.

Economists at DBS Bank said the double-digit growth in imports was in line with the trade performance seen in Asia, and with the strong export growth of 21.4 percent for the month.

"Although we do not expect this growth momentum to be sustainable in the long run, it should at least hold up and decline gradually towards the end of the year or early next year," DBS said in a note.

The bulk of imports are raw materials for export products, which are mostly electronics.

sandrn

October 28th, 2006, 03:14 PM

Net foreign buying of stocks surges 108%
http://business.inq7.net/money/topstories/view_article.php?article_id=29210
Inquirer
Last updated 02:28am (Mla time) 10/28/2006

FOREIGN investors%u2019 purchases of Philippine stocks rose sharply in the January-September period, helped largely by improved sentiments in view of government efforts to reduce the budget deficit, the Philippine Stock Exchange (PSE) said Friday.

From January to September, net foreign buying on the PSE grew 108.8 percent to P42.2 billion from P20.2 billion in the same period last year, PSE president Francis Lim said.

Total foreign buying increased 32 percent to P226.6 billion from P171.7 billion while foreign selling rose 22 percent to P184.4 billion from P151.5 billion.

Average daily value turnover on the stock market rose 11.7 percent to P1.9 billion from P1.7 billion in January-September 2005.

Total value turnover grew 11.7 percent to P363.7 billion from P325.6 billion, fueled largely by gains in oil stocks (770 percent) and transportation issues (624 percent).

Total market capitalization rose 9.24 percent to P6.5 trillion at the end of September from P5.95 trillion at the end of December last year.

Latest official data show the national government recording a P14.3-billion budget surplus in August, bringing the January-August deficit to P34.2 billion from P80.8 billion in the same period last year, the PSE said.

The PSE also cited slowing inflation as helping to improve investor sentiments. It noted that in September inflation slid to 5.7 percent from 6.3 percent in August. With INQ7.net

MarkiiBoi

October 30th, 2006, 03:01 AM

Can the Philippines surprise on the upside?

By Manu Bhaskaran

With investors' minds focused on China and India, and the occasional flurry of interest in some emerging success stories such as Vietnam, the Philippines appears to have fallen beneath the radar screens of most global investors, except for those who focus on sovereign bonds-or some of the hardier hedge funds.

With is record of significant economic under-performance constant political turmoil, occasional massive currency depreciation and not infrequent capacity to irritate some of the foreign investors who did invest there, it is perhaps not surprising that all but the most robust of investors now tend to give the Philippines a miss. WE THINK THIS IS A MISTAKE--some good things are happening in the country, which provide upside surprises.

But first, it will be useful to look at the kind of countries that are beginning to emerge as a high-growth superstars. Unlike the earliers class of stars such as China, Singapore, South Korea or Taiwan, which were relatively orderly societies with some very obvious strengths, the news stars are a messier lot. India, for instance, shares similar traits with the Philippines- a messy and volatile democracy, a vocal left wing, a high degree of corruption, plenty of street agitation but also relatively well-educated workers and considerable entrepreneurship. Yet, India has now emerged as a superstar, growing at around 8% a year and becoming a world beater in many service and even some manufacturing activities.

More recently, the are signs that Brazil-another raucous, mess democracy with lots of problems such as crime and corruption-is also set to enjoy a significant acceleration in growth. The point we are making is that investors should not dismiss apparently “messy” countries such as the Philippines simply because they do resemble the orderly success stories they have become accustomed to in East Asia.

The CASE FOR THE Philippines

One reason India surprised the pessimists was that the gradual but steady accumulation of small positives can after a few years, become very powerful in setting off a sharp acceleration in economic growth. In India, it took some years before the reforms of the early 1990s and the trade reforms at the end of that decade unleashed supply side efficiency gains that became large enough to transform the Indian growth story. So, can the Philippines also do the same?

There are ground for optimism, First, the Philippines has undertake much reform in the past decade. Its trade sector is now slightly more open that Thailand's by some estimates, It has removed distortions such as oil subsidies-something that many more successful economies in East Asia have yet to fully pull off. Tax reforms have dramatically increased revenues-so much so that the budget is likely to return to balance in 2008, maybe even earlier.

Reforms in agriculture have sparked off a shift to higher-value crops, boosting incomes and creating new export products such as processed agriculture foodstuffs. Deregulated sectors such as aviation have seen spurts of growth, Spurred by such reforms, the supply side responsiveness of the economy has improved materially – the economy has been quick to respond to changes such as higher demand for its nurses by spontaneously creating nursing schools, for example.

Second, new growth areas are beginning to emerge. AT Kearney's survey of global services locations that are competitive for business process outsourcing (BPO) ranked the Philippines fourth in the world last year- huge change from being outside the top 10 in 2004. From virtually nothing in2000, BPO now employs several hundred thousand workers and its hunger for office space has created a boom in office construction and rentals in Manila.

The Philippines is also a winner from the accelerated ageing in developed economies – its healthcare workers, such as nurses, are in huge demand while labor-short developed economies are also increasing their employment of Filipino architects, engineers and other professionals, This has boosted remittances flowing into the country, giving it consumer spending, Tourism is also be revived.

In manufacturing, exports have surged recently- with new areas of competency emerging such as ship building, fashion garments and jewelry. Mining is set to emerge as a high-growth area, following the liberalization of ownership restrictions in that sector. The Philippines has large deposits of gold, copper, nickel and chromium.

Third, the conditions are falling into place for a revival in investment, which remains a black spot in the economy, with fixed investment actually contracting since early last year. The central bank's shift to inflation targeting is producing a structural fall in inflation.

Moreover the fiscal reforms that haved reduced its deficit also means that government is borrowing a lot less in the domestic markets, thus helping interest rates to fall. We believe that with inflation likely to fall more, we will see further drops in short-and long term interest rates, which will help spur investment and higher asset prices.

SO, WHAT'S THE BAD NEWS?

Unfortunately, the picture is not unblemished. Political uncertainty remains a deterrent to investors. But the political risk to growth goes beyond just intra-elite infighting.

The Philippines has two active insurgencies and its political structure is still regarded by many as retaining many feudal characteristics that allow a narrow oligarchy to control the system and run it in their interest. And politics does have major effects on the economy. For instance, next year will see mid-term elections for Congress-and, typically, such years see budgetary discipline failing and fiscal progress being reversed. IN addition, there remain structural weaknesses that reduce the Philippines' resilience to external shocks. For instance, non-performing loans remain uncomfortably high as do external debt and inflationary expectations.

Nevertheless, we believe that these problems are no so large that they will prevent at least a moderate acceleration in economic growth. There will be the occasional political strain but the squabbling politicians are also beginning to realize that the people are now tiring of unstable politics-they are demanding that politicians deliver the economic goods. We believe that, barring any major global slowdown, the Philippine could well see an up tick in economic growth that will boost its financial-asset prices.

Manu Bhaskaran is a partner and member of the board of Centennial Group Inc, and economics consultancy. With permission from THE EDGE SINGAPORE financial magazine.

chixbebe

October 30th, 2006, 09:46 AM

Debt payments rise 24%

A strong cash position brought about by improved revenue collections and controlled spending helped the government raise its debt payments by about 24 percent in the first nine months of the year, the Bureau of Treasury reported over the weekend.

Data show that the government spent P640.99 billion from January to September this year to service both its foreign and domestic obligations, or P123.1 billion more than the P517.89 billion it paid in the same period last year.

Principal payments rose 36.8 percent to P386.54 billion during the first three quarters of the year from P282.61 billion in the same period last year. Payments of principal domestic debt jumped 78.22 percent to P338.98 billion from P190.19 billion while principal payments to foreign creditors fell 48.54 percent to P47.56 billion from P92.41 billion.

Interest payments, meanwhile, grew 8.14 percent to P254.45 billion from P235.29 billion. Interest paid on domestic obligations rose 10.48 percent to P156.42 billion from P141.58 billion while interest paid on foreign loans inched up 4.61 percent to P98.03 billion from P93.7 billion.

The government saved P17.26 billion in interest payments due to the strong peso as well as low interest rates after programming P271.71 billion for interest payments in the first nine months of the year.

Results like this only means a stable economy...

marites4

October 30th, 2006, 09:53 AM

For those who are always criticizing GMA for not feeling the effects of a growing economy.

In India, it took some years before the reforms of the early 1990s and the trade reforms at the end of that decade unleashed supply side efficiency gains that became large enough to transform the Indian growth story.

well , well isn't this interesting . This is always the culprit cited by foreign investors as the missing link.
Political uncertainty remains a deterrent to investors. But the political risk to growth goes beyond just intra-elite infighting.

JustHorace

October 30th, 2006, 11:27 AM

Quoted from Rusty
View of RP from outside
By Raul J. Palabrica
Inquirer
Last updated 00:11am (Mla time) 10/30/2006

LAST WEEK, I ATTENDED a conference in Sanya, China on the latest funds and equity investment ideas in the international market.

In earlier times, meetings of this nature were held in Hong Kong, Singapore or other Asian financial centers. It is a tribute to China’s strong economy that it’s now considered a significant venue for discussions on financial deals.

The meeting was attended by executives of banks, investment companies and financial institutions based in Asia.

The participants were apprised of the new or hybrid instruments in the market that can generate additional capital or enhance the value of existing investment programs.

The description of some of the instruments sounded like an alphabet soup: CDO (Collateralized Debt Obligation), CRE CDO (Commercial Real Estate CDO), CLO (Collateralized Loan Obligation), EPICS (Economic Participation in CLO Securities) and CMBS (Commercial Mortgage Backed Securities).

The discussion was preceded by an analysis of the monetary policies of the United States, the economies of emergent India, Russia and Brazil and, as expected, investment opportunities in China.

Outlook

A London-based economist said China was “the wave of the future.” He predicted that its growth would eclipse all other countries, including the United States which was hobbled by record deficits caused by serious financial and foreign affairs problems (read: Iraq).

After citing various facts and figures, he stated what he considered unmistakable proof of China’s economic growth: The volume of its beef imports is the highest in the world.

In his book, a nation’s wealth is directly proportional to its beef importation!

An international investment company presented its study and forecast on the economic outlook in Asia for a 12-month period.

Its research showed China, Taiwan and India on top of the list. They were given an “overweight” rating, which means their development is expected to continue smoothly.

Next on the rung with a “market weight” rating were Singapore, Hong Kong, Korea, the Philippines and Thailand.

Although Hong Kong is a province of China, it is given a separate economic status because of its strong standing in the world’s economy.

The observation about the Philippines reads: “Illiquid, but better macro and good micro valuations/growth.”

Fair rating

At the bottom of the list -- with an “underweight” rating -- were Australia, Indonesia and Malaysia.

The outlook for Australia is “moderately constructive but better opportunities elsewhere.” Indonesia has “downside earnings risk and over-extended market.” Malaysia is “structurally negative but potential laggard play.”

A Malaysia banker did not take kindly to the gloomy forecast for his country. In a stinging voice, he questioned its accuracy and asked for its basis.

The presentor of the research paper groped for words to defend the integrity of his data without hurting the Malaysian’s bruised pride.

Like a seasoned diplomat, he avoided answering the question directly and instead enumerated what he felt were some of the economic problems that Malaysia is going through at present.

Mercifully, the Malaysian did not pursue his point further and quietly accepted the not-so-pleasant observation about his country.

Recommendation

When the subject of equity investments came up, a US-based financial analyst who led the discussion was asked about the countries he considers good areas for investment.

He quickly answered “China, India and the Philippines.”

Pressed to explain about his third choice, he explained that “he is bullish on the Philippines because it has turned the corner and has good economic fundamentals.”

During the evening socials, a Japanese investment banker talked to me and about the endorsement of the Philippines as an investment site.

He said the recommendation was supported by the data gathered by his company’s research staff.

“But,” he continued, “if you watch TV, most of the things I see about Philippines (sic) are military coups, political fighting, riot and killing of foreigners.”

I spent almost an hour explaining to him that local and foreign media tend to exaggerate the news and that things were not that bad as they have been presented.

What, in a sense, saved the night for me was a Taiwanese who sidled up to us in the course of our talk.

When he heard I was from the Philippines, he remarked he has visited Cebu and Boracay and that he had a nice time. That statement drew a smile from the doubting Japanese.

chixbebe

October 31st, 2006, 05:35 AM

P1.6-B Iloilo biomass power plant to start operations by next year
The 14-megawatt (MW) biomass co-generation power plant being put up by Central Azucarera de San Antonio (CASA) in Passi City, Iloilo at a cost of P1.6 billion will be operational by the first quarter of 2007.

The power facility will not only service the power requirements of the sugar mill but also help supply electricity to Passi City and the towns of Dueñas and San Enrique in Iloilo.

The co-generation facility will be powered by a 200-metric ton per hour suspension-fired bagasse boiler. It will use sugar cane bagasse, a refuse from sugar milling operations, to fuel the power plant.

While CASA said that about nine MW of the capacity will be used for operations and five MW will be allocated initially for commercial dispatch to local distribution utilities, it also foresees another 12-MW expansion for commercial dispatch in the midterm.

CASA’s co-generation plant is equipped with dual wet scrubbers to ensure compliance with air quality standards prescribed by the Department of Environment and Natural Resources (DENR).

Energy Secretary Raphael P. M. Lotilla, in a statement, hailed the sugar central’s decision to invest in its own co-generation plant fueled from the refuse of its own sugar milling operations.

"This not only increases renewable energy use in the country but also indicates a trend where large electricity users take steps to improve the cost efficiency of their operations and at the same time provide for their own power requirements," Lotilla added.

The country generates substantial fuel potential from biomass resources, such as bagasse or sugarcane residue, fuel wood, rice hull, coconut residue and animal waste, coming from extensive agriculture, livestock and forestry industries.

For instance, the Western Visayas, Eastern Visayas and Southern Tagalog regions where the traditional sugar centrals are located generate abundant supply of sugarcane bagasse. Research and field trials on biomass-based energy solutions show that integrating the collection and supply of sugarcane for sugar production and cane residue as fuel for energy production is an ideal method of utilizing cheap and widely available fuel resources for bagasse co-generation projects in the Philippines.

3cr

October 31st, 2006, 07:54 AM

Govt misses income-tax goal
(Flawed claims scheme seen responsible for leaks)
By Likha C. Cuevas, Reporter
Manila Times
http://www.manilatimes.net/national/2006/oct/31/yehey/business/20061031bus1.html

INCOME taxes collected from corporations, individuals, bank deposits and the sale of government IOUs fell short of the nine-month goal, according to Department of Finance data.

Income taxes collected by the Bureau of Internal Revenue (BIR) amounted to P280.891 billion, 5.2 percent less than the target of P295.442 billion for the January to September period.

The DOF said it had been encountering difficulties collecting last month owing to a smaller amount of government debt paper sales and lower interest rates.

Official data showed that income from Treasury bills was P6.6 billion short of its target of P31.587 billion for the first nine months and almost P1 billion short of its P3.4 billion goal for September alone.

Income from bank deposits was P6.84 billion less than the target of P21.372 for the nine-month period, and P1 billion less than last month’s target of P2.24 billion.

Although the BIR surpassed its corporate income-tax goal for September (P9.814 billion), it was P3.4 billion short of its nine-month goal of P147.861 billion.

A DOF study showed that the lack of data coordination between agencies and a problematic claims system have led to billions of pesos in forgone revenues due to income-tax holidays (ITH) granted businesses registered with the Board of Investments (BOI).

A DOF source said that businesses file income-tax returns with the BIR and claim their ITH without undergoing the verification process with the BOI. Because the BIR has no current list of BOI-registered businesses and the kind of ITH these entities are entitled to, the tax agency would process these claims without knowing if the ITH privilege has lapsed.

The DOF study showed that the BIR receives the BOI’s report on businesses that claimed ITH after the three-year prescription period has lapsed instead of the prescribed 30 days. Under the Tax Code, the BIR can no longer initiate an audit investigation after three years.

The study said the tax agency’s reported ITH claims jumped to P46.6 billion in 2002 while BOI reported only P8.6 billion. By 2003 and 2004, the BIR reported P25.1 billion and P19.4 billion ITH claims while the BOI reported only P6.7 billion and P7.6 billion, respectively.

Because of these huge revenue losses, the Department of Trade and Industry (DTI) and the DOF will sign a memorandum of agreement that would enable the BOI to fast track its ITH verification to give the BIR enough time to act on the claims.

___________________________________________

False claims of tax perks worse than previously thought
Inquirer
http://business.inq7.net/money/topstories/view_article.php?article_id=29644

THE Department of Finance has found that from 2000 to 2004 the government lost an average of P12.7 billion in potential revenue a year because of false income tax exemption claims made by unscrupulous companies, a department official said.

In 2004 alone, the amount reached P11.8 billion, compared with P5.0 billion earlier reported, the official said, citing findings of a study done by the department.

Flaws in the process of verifying income tax exemption claims were largely to blame for some companies' getting away with fraud, the official said.

Companies registered with the Board of Investments (BoI) and the Philippine Economic Zone Authority (PEZA) are entitled to a four- or six-year income tax holiday as an incentive for engaging in businesses that the government deems as priorities.

Under the current practice, a BoI- or PEZA-registered company filing an income tax return submits its claim of income tax exemption to the Bureau of Internal Revenue (BIR). The BoI and PEZA verify the claim and inform the BIR on whether the claim is valid.

There are instances when the BoI takes long to inform the BIR that a claim is invalid, the finance department official said.

Under its rules, the BoI may take a maximum of 2.5 years to evaluate the validity of tax exemption claims. However, under the tax laws, the BIR can go after a delinquent taxpayer only within three years from the reference tax period.

To address these problems, the official said, the BIR will sign memoranda of agreement with the BoI and PEZA that will include such provisions as interconnection of databases for easy verification of income tax holiday claims.

beads_strawberries

October 31st, 2006, 07:56 AM

It seems foreign investors are confident with the way our economy moves forward. A recent survey reported by Japan External Trade Organization (JETRO) shows that Japanese firms doing business in the Philippines post a positive outlook with our economy.

Even other international organizations have recognized that our economy is improving. If only we can be as optimistic as them.

3cr

October 31st, 2006, 08:04 AM

RP ‘serious’ about competing for investments -- Arroyo
By Joel Guinto
INQ7.net
http://newsinfo.inq7.net/breakingnews/nation/view_article.php?article_id=29766

NANNING, China -- President Gloria Macapagal-Arroyo made a last-minute pitch for more Chinese investments in the Philippines as she wound up her five-day official visit to the communist state on Tuesday.

Speaking at the opening of the China-ASEAN (Association of Southeast Asian Nations) Business and Investment Summit (CABIS) here, Arroyo said her government's efforts at fiscal reform showed that the Philippines is "serious about competing for foreign investments."

The CABIS gathered government officials and business leaders from China and the 10-member ASEAN.

"Thus, I take this opportunity to invite China to look at the Philippines as a destination for even greater Chinese investment, particularly in the areas of mining, infrastructure development, agriculture, fisheries, as well as housing," she said.

"Our workforce is well educated, productive and English-speaking. The government has taken the difficult decisions to raise the additional revenues needed to invest in infrastructure and services to create an economic environment that is conducive to investment," she added.

Arroyo left for Hong Kong at noon Tuesday where she will have a closed-door meeting with businessmen on Wednesday morning, and private time with her family until Friday.

Earlier Tuesday, Arroyo, as ASEAN chairperson, and Chinese Premiere Wen Jiabao inaugurated the 3rd China-ASEAN Expo.

The two leaders also presided over the China-ASEAN Commemorative Summit on Monday, in commemoration of the 15th anniversary of dialogue and relations between the regional bloc and China.

During her stay, Arroyo witnessed the signing of several trade agreements including the Chinese government's funding for the North and South Rail projects, a $1-billion technical assistance grant for the mothballed Nonoc nickel mines in Surigao del Norte province, and three agreements for the production of the biofuel ethanol in the central and southern Philippines.

3cr

October 31st, 2006, 08:06 AM

Investments in ecozones surge 37.3%
By Abigail L. Ho
Inquirer
http://business.inq7.net/money/topstories/view_article.php?article_id=29642

INVESTMENTS registered with the Philippine Economic Zone Authority (PEZA) jumped 37.3 percent to P62.9 billion in the period from January to Oct. 10 from P45.8 billion in the same period last year, following approval of nine locator projects in special economic zones, the PEZA said.

The nine projects total close to P4.8 billion in investments and are expected to average $21.1 million in annual export sales, PEZA Director General Lilia de Lima reported to Trade and Industry Secretary Peter Favila.

The projects are expected to create 672 jobs, she added.

Of the nine, two projects relate to information technology and total P245.8 million in investments, she said.

From Jan. 1 to Oct. 10, a total of 290 locator investments together amounted to P49.8 billion. Sixty-one investments of developers of economic zones amounted to just over P13 billion.

In the same period last year, there were 268 locator investments, totaling P41.4 billion, and 37 developer investments, totaling P4.4 billion.

In full-year 2005, the PEZA registered around P67 billion worth of investments.

This year, registered investments may increase by more than 10 percent, the PEZA said.

3cr

October 31st, 2006, 08:14 AM

Sus ginoo...

100 million Filipinos (by 2010)
Manila Times
http://www.manilatimes.net/national/2006/oct/31/yehey/opinion/20061031opi1.html

BETWEEN 2010 and 2012 the Philippines will welcome its 100 millionth citizen and become the 13th most populous country in the world.

This development should interest us as news has spread that the United States population reached 300 million in the last week of October. Much of the increase came from immigrants, mainly from Asia and Latin America. For the first time, Latinos outnumber blacks in America.

That the Philippines would have 100 million souls by 2010 is not surprising, given that the rate of population increase is a brisk 1.95 percent annually, down from 2.3 percent, and given that there is no national program to moderate population growth.

The population has galloped at such a speed because the government has allowed the Catholic Church to dictate the national population policy. The Church opposes family planning, preferring the natural or “rhythm” system of contraception to artificial ones.

Most Filipino presidents, afraid to risk fire and brimstone from the Church, have blown hot and cold on population management. Only President Fidel V. Ramos had dared to promote responsible parenthood through a range of contraceptions, but other chief executives were not as astute or forward-looking.

Unwilling to lose the Catholic vote (there is none, but an assertive Catholic Bishops Conference of the Philippines loves to nag the presidents), Ramos’s successors have turned their backs on population policy, preferring to give that responsibility to local governments.

The optimists—including Church leaders, academics and civic leaders—say the Philippines can comfortably perpetuate the current rate of population increase and accommodate a population of 100 million or more at no damage to the quality of life and to the environment.

The thoughtful ones worry that an unchecked expanding population is worrisome given that our natural resources—water, land, and food, among others—are limited and are already strained by current demands. The ability of the government to deliver basic essential services to a multiplying population is also questionable.

The optimists cite the experience of China and India, each with more than a billion mouths to feed, as examples of economies that can overcome the challenge of overpopulation. People who see the glass half-empty reply that our current rate of development, the capacity of the economy to grow, our global competitiveness and the national vision of our leaders do not match those of the two Asian giants.

The pressure of overpopulation will fall heavily on the cities and metropolitan areas where migration is unrelenting. Authorities will have a huge problem meeting the insatiable demand for more jobs, homes, power, water, cleaner air, food, transportation, health services and living space.

Already, 85,236,913 Filipinos are competing for elbow room. About a third are surviving at the poverty level.

A population of 100 million may not be mind-boggling, given that we are counting our foreign and domestic debts by the billions and the national budget has reached more than P1 trillion. But with the increasing unemployment, brownouts, water shortage, the proliferation of slums, growing homelessness, air and water pollution, environmental degradation and the erosion of the natural resources, we have to ask ourselves how long we can keep up with a growing population without sacrificing quality of life.

Sinjin P.

November 1st, 2006, 02:44 AM

‘RP poised for real-estate boom’
MIGRANT WORKERS’ MONEY DRIVING RESIDENTIAL SEGMENT GROWTH

By Dennis D. Estopace
Reporter

THE Philippines hasn’t yet reached the level of boom that it experienced before the real-estate bubble burst in 1997, but it is definitely “poised to ride that boom, especially in the mid-rise residential segment.” That fearless forecast was made Tuesday by veteran realtor Melesa D. Chua, president and chief executive of Quadrillion Group of Companies.

Quadrillion recently held a groundbreaking of its five-story residential property development project in Parañaque City.

Quadrillion, the property business arm of CDC Holdings Inc. that Chua also owns, likewise acts as sales agent for other property developers like Ayala Land Inc. and SM Property Development Inc.

Chua reorganized her real estate business five years ago after buyers shied away from the market in 1999.

“I had to take a rest. We were badly hit that time,” added Chua, who began selling properties in 1989 with the sale of Pasig City’s Cristina Tower units at P12,000 to P16,000 per square meter.

Today, units in vertical projects or condominium are sold at a low P35,000 per sq m, she added.

“But we’re not seeing an echo of the crisis a decade later,” Chua said, adding she is confident that the market today has changed, notably with the aesthetic and cosmopolitan taste of overseas Filipino workers (OFWs).

In 1997, a currency crisis that hit Thailand forced its neighbors to hike interest rates, thereby bloating chattel mortgage prices.

Currently, monetary authorities continue to lord over a low-interest rate regime.

Analysts say the large bulk of financial security is due to the increasing flow of OFW remittances pumping into a consumer-driven Philippine economy.

At the height of her business as a real-estate agent, Chua’s credits included the sale of the Juan Luna Gardens (P57 million), The Bellevue III (P249 million), Le Meriche (P244 million), and Ursular Grandeur Mansions (P16 million).

“Those who made money through rental income and appreciation of their properties that time saw their earnings going down up to P45,000 a month at the height of the crisis,” Chua said.

Today, Chua said, they are seeing an uptick in the earnings albeit not in the province of the precrisis levels.

“The property sector is not overheating because we haven’t experienced a boom; maybe next year,” Chua said.

Despite that, her firm’s subsidiary Quadrillion Sales Inc. booked P200 million in total sales among Filipino communities in Japan, Hawaii, Vienna and London between June and September this year.

In a statement, the firm said half of that total amount were sales for the Ayala project Serendra in Bonifacio Global City, for which Quadrillion is an accredited broker.

by The Business Mirror

DoggMann

November 1st, 2006, 04:18 AM

http://www.latimes.com/business/la-ft-filipino30oct30,1,5138319.story?coll=la-mininav-business&ctrack=1&cset=true

GLOBAL REPORT / FINANCIAL TIMES
Filipinos investing in their roots
Affluent emigrants are borrowing against their equity for second homes in their native land.
By Roel Landingin, Financial Times
October 30, 2006

MANILA — The Philippines did away with imperial measurements more than 20 years ago, but these days Filipino real estate agents are learning again to describe property sizes in square feet rather than square meters.

It's just one of the many ways that Philippine property companies are adapting to the growing demand for second homes in Manila from affluent Filipino immigrants in the U.S., one of the few countries in the world still using a version of the British imperial measurement system.

Having to shift from meters to feet is well worth the effort. Home purchases in Manila by Filipino Americans and other wealthy overseas Filipinos are helping fuel a property boom in the country's capital. Ayala Land, the country's largest property developer, now sells one-third of its high-rise residential units to overseas Filipinos, up from only 16% two years ago. In the first half of 2006, Ayala's residential sales — more than half its total revenue — soared 59% to $134 million from a year earlier.

More than 8 million Filipinos — one-tenth of the country's population — live and work overseas, with almost 1 million more leaving each year to chase opportunities abroad. Although most take low-paying jobs as construction workers, domestic helpers or ship workers, a growing number serve as health professionals. Their remittances reached $10.7 billion last year, making the Philippines the third-largest recipient of remittances after India and Mexico.

At least 60% of Ayala's sales to overseas Filipinos were made to Filipino Americans. Many left the Philippines in the 1970s after President Ferdinand Marcos imposed martial law, said Dave Rafael, the head of Ayala Land's international sales unit.

"While highly successful and already settled in the U.S., they still have strong links with the Philippines, where they want a second home to stay in for a few months each year," he said.

Rafael said soaring U.S. property prices have allowed homeowners there to borrow and finance homes in the Philippines.

Residential prices in Manila's Makati central business district, where most of Ayala's residential towers are situated, have risen 7% this year after rising 5% last year, according to Colliers International.

The property consulting firm forecasts that home property values will rise 13% more by mid-2007, reaching levels not seen since 1997 and the heady days immediately before the Asian financial crisis. Rents are expected to rise 13.2% next year.

Higher demand for residential units has pushed down vacancy rates in condominium towers in the Makati district to 10.4% at the end of June from 14.6% last year, Colliers said

Home buying in Manila by Filipino Americans and other overseas Filipinos extends the property boom in the office market to the high-end market for residential condominiums.

Office-space prices and rents began to rise in early 2004 as a result of demand from the growing number of call centers and business processing outsourcing facilities in Manila. The number of outsourcing workers has more than tripled to 162,000 last year from 1999 as companies take advantage of the large and cheap pool of English-speaking college graduates.

New and bigger outsourcing facilities in the Philippines are likely to halve office vacancy rates in the Makati district to 2.7% next year, said Richard Raymundo, research director at Colliers' Manila unit.

If the outsourcing workforce grows by at least 20% a year from 2006 to 2010, the industry will need an additional 658,000 square meters (7.1 million square feet) of office space during the five-year period, more than twice the room needed by the industry in the last six years, Raymundo said.

3cr

November 2nd, 2006, 01:53 AM

SWS: 2.9 M families experiencing hunger
By Helen Flores
The Philippine Star
http://www.philstar.com/philstar/NEWS200611020403.htm

At least 2.9 million Filipino families or 16.9 percent of a projected base of 17.4 million households experienced hunger in the past three months, results of the latest Social Weather Stations (SWS) survey showed.

The survey, covering 1,200 households and conducted from Sept. 24 to Oct. 2, also showed that more than half or 51 percent of Filipinos consider themselves poor. This is, however, lower than the 59 percent who said they were poor in the second quarter of 2006.Hunger incidence at this level (16.9 percent of households) was first reached in March though it went down to 13.9 percent in June. It has been at double-digit levels since the second quarter of 2004.

The SWS said that families who reported having gone hungry "often" or "always" went up by 4.6 percent in September from 3.4 percent in June. This means an increase of more than 800,000 households experiencing severe hunger.

Meanwhile, those who experienced moderate hunger, or those who reported that they experienced hunger "only once" or "a few times" in the last three months, rose to 12.3 percent, or 2.1 million households, from 10.1 percent in the previous quarter.

There was, however, a decline in hunger incidence in Metro Manila, from 15 percent in June to 12.8 percent in September. However, it rose in Mindanao from 17.3 percent in June to 21.3 percent in September.

Hunger incidence also went up from 10 percent to 14.7 percent in the rest of Luzon and from 17.7 percent to 19.7 percent in the Visayas.

The SWS said the "self-rated poor" was down in all areas except in the Visayas, where it went up from 59 percent to 66 percent. In Metro Manila, the number of self-rated poor households went down from 54 percent in June to 46 percent in September. In Luzon and Mindanao, it went down from 59 percent to 45 percent and from 61 percent to 53 percent, respectively.

"The results indicate that while some families managed to cross the borderline of poverty, other families began to suffer the deep deprivation of hunger," the SWS said.

The budget that poor households say they need to escape poverty is P10,000 in Metro Manila, P5,000 in Mindanao, and P6,000 in the Visayas and the rest of Luzon.

The SWS said such money-value thresholds were already attained some years ago, even though the cost of living increased greatly every year. Since the money-cost of living is actually rising, a declining or unchanging poverty threshold means that households are lowering their living standards, or belt-tightening.

The SWS said its survey questions about household poverty and hunger were directed to the heads of households. Error margins of ±3 percent for national percentages and ±6 percent for regional percentages should be applied, it said.

Malacañang to work harder

Malacañang vowed to work harder to reduce hunger and poverty incidence in the country though officials said economic gains may have only been slow in reaching the people.

Presidential chief of staff Michael Defensor and newly appointed National Anti-Poverty Commission (NAPC) chairman Domingo Panganiban maintained that the economy is growing and the government is determined to make the people benefit from it.

"This is a self-rated survey and this would mean that maybe our economic gains have not been felt yet," Defensor said in a telephone interview. "But this does not mean that government is not doing anything about it."

He stressed that most financial and economic institutions, including the World Bank, agree that inflation and growth in the country are steady while the stock market and the peso as well as the fiscal position are getting stronger.

He also said that empirical data showed that millions of people have been lifted out of poverty in the past two years and that many provinces have "graduated" from the list of the poorest provinces in the country.

Because of fiscal reforms, Defensor said the government has more money to spend for pump-priming the economy and for social services.

The Palace, he said, has long started cracking the whip on agencies that have not been spending their allocations on time, especially agencies with infrastructure projects that would generate jobs.

However, one of the major factors that impeded the government from spending as much as it wanted to this year, despite its improving fiscal position, was the non-passage of the 2006 national budget.

"We will study this survey, which could serve as our guide in our policies," Panganiban said.

He identified five provinces that are considered "very vulnerable" to poverty — Masbate, Tawi-Tawi, Sulu, Zamboanga del Norte and Eastern Samar. Some 1,800 barangays in these provinces were deemed as "top priority" to benefit from the anti-poverty campaign of the government.

Panganiban stressed that under his leadership, the NAPC would focus its attention on programs for "very vulnerable provinces" and intensify efforts to provide for their needs.

"We will try to reconcile government data with the SWS survey. If the areas in the survey would not match those in our identified vulnerable areas, then there could be something wrong with their survey," he said.

_____________________________

Poor nutrition = poor literacy
By S.A. Maguire
The Philippine Star
http://www.philstar.com/philstar/NEWS200611020711.htm

While news that some P1.12 billion in fresh funding had been earmarked for 76,000 state scholars in the proposed 2007 national budget, it’s disturbing that poor health is causing more and more children to drop out from school. According to Congressman Eduardo Gullas, P441 million had been set aside for the scholarship program of the Commission on Higher Education (CHED) for some 34,475 college students while almost P70 million has been allocated to subsidize more than 3,000 Philippine Science High School scholars. However, reports from the Department of Education (DepEd) indicated that out of 100 pupils who enter grade one, only 83 manage to continue to grade two, a trend which has been going on for the last 30 years. Out of 70 who graduate from grade six, 63 enroll in first year high school, but only 23 actually end up entering college and an even more dismal number of 14 get to earn a degree. As for the quality of education these graduates get, this is an altogether different issue. The revelation that most kids eventually become school drop outs due to malnutrition has prompted DepEd Secretary Jesli Lapus to remark that these kids are likely to suffer from low literacy levels later in life. The recent disclosure by the International Labor Organization (ILO) that the number of unemployed youth in the Philippines are increasing, with the deteriorating quality of education cited as one of the major reasons for unemployment. Hopefully, DepEd would be able to develop programs that would address health, nutrition and other issues that affect the ability of children to learn well.

3cr

November 2nd, 2006, 01:58 AM

Rebel taxes boost costs of RP infrastructure projects
By Ma. Elisa P. Osorio
The Philippine Star
http://www.philstar.com/philstar/NEWS200611020705.htm

The payment of revolutionary tax to armed rebel groups is one of the reasons why the government is charged higher for infrastructure projects in the country, a management consultancy study pointed out.

According to C. Virata & Associates Inc., out of the 16 foreign-assisted road projects that they studied, 14 of the lowest bids received by the government are above the government mandated approved budget for contract (ABC).

The ABC serves as the limit of the bid price that will be eligible for locally-funded projects. For foreign assisted projects, it is the basis for determining the feasibility of the bid price received.

The study showed that the bids received ranged 26 percent to 51 percent above the ABC or an overall average of about 32 percent higher than the government’s estimated cost of construction.

The study further noted that for all four Japan Bank for International Cooperation (JBIC) projects, the lowest bids received ranged from 28 percent to 32 percent above the ABC.

C. Virata & Associates said this is because the construction firms factor in the payment of revolutionary tax, although the government does not recognize the payment of these fees as real costs.

Revolutionary tax is protection money collected by rebel groups, mostly members of the New People’s Army (NPA).

According to the study, these costs are anticipated and included by the contractors in the estimation and preparation of their bids.

"Actual incidents of equipment being razed/burned have been cited where the contractor fails to pay these informal fees," the study stated.

Accordingly, the contractors set aside between one percent to three percent of the total actual cost for revolutionary taxes.

These taxes fall under the construction firm’s indirect costs.

Last June, President Arroyo ordered the military to intensify its crackdown against the armed insurgents collecting revolutionary taxes.

3cr

November 2nd, 2006, 02:03 AM

Ignoring Asian risk doesn't reduce it
By Jephraim P Gundzik
http://www.atimes.com/atimes/Asian_E.../HJ17Dk01.html

Asia's stock markets have performed remarkably well in 2006. All of the region's markets have recovered from the sudden and severe downturn in May, which was driven by fears of tightening global liquidity.

While gains have flattened in Japan, South Korea and Thailand, equities in the Philippines, India and Indonesia have powered ahead, apparently ignoring the fact that both domestic and external factors are pushing investment risk sharply higher.

The surprisingly strong performance of Asian equities is closely linked to the renewed vigor of US equity markets, which have moved higher since July in anticipation of an economic "soft landing" - itself an increasingly risk-laden assumption. With risk premium for stocks thin or non-existent, the probability of a sharp and sustained correction of equity markets in Asia and the US is increasing.

The blind eye watches at home

Domestic factors have pushed investment risk in Thailand, the Philippines, Indonesia and India significantly higher in 2006. These factors will continue to elevate investment risk in 2007. Thailand's recent military coup, warmly described as the "Silken Coup", has alleviated investment risk in the minds of many investors who believe that political and social stabilization will soon follow.

Though Thailand has finally rid itself of the divisive Thaksin government, its very difficult to believe that the country's new military rulers will be able to sustain political and social stability.

Thaksin's weak legitimacy eventually brought him down. However, the unelected junta that now controls the government suffers from even weaker legitimacy. With elections postponed for at least one year, ample time exists for social unrest to return, especially if elections are postponed again next year.

In the meantime, governance will probably continue to deteriorate, opening the door wider to intensification of the Muslim insurgency in southern Thailand. Political uncertainty and social instability are likely to become an increasing drag on economic growth. A politically motivated crackdown on public and private sector corruption could also weigh on economic growth. Slower economic growth means weaker profit growth and falling equities - the specter of which is not discounted in valuations.

Weak legitimacy also continues to dog the Gloria Macapagal-Arroyo government in the Philippines, which faces pivotal legislative elections in May 2007. Government efforts to scrap these elections by revising the constitution are unlikely to be condoned by the Supreme Court. This sets the country up for one of two political scenarios in 2007, both of which are will provoke a further erosion of governance. In the first scenario, the Arroyo government discards the judgment of the Supreme Court and unilaterally undertakes constitutional change, canceling the 2007 elections. In the second scenario, the Arroyo government abides by the Supreme Court's decision and legislative election go ahead.

The first scenario will produce widespread social unrest and greater political instability. The second scenario will give Arroyo's opposition greater legislative representation and revive impeachment proceedings against the president, also creating political instability. In addition to increasing political and social instability, the Philippines' domestic and foreign-supported insurgencies are likely to continue intensifying, further undermining already very weak governance. The Philippines will probably pay a heavy economic price for increasing instability and deteriorating governance in 2007 - a price not discounted in equity valuations.

As in the Philippines, escalating international terrorism is also expected to pose an increasing threat to political, social and economic stability in Indonesia and India in 2007. Southeast Asia's deadliest terrorist organization, Jemaah Islamiyah (JI), remains well-entrenched in Indonesia. Though JI currently appears to be concentrating its terrorist attacks on the Philippines, a renewed burst of terrorism in Indonesia is likely over the next several months. JI has managed successful terrorist attacks in Indonesia annually since 2002.

The probability of a spectacular terrorist strike is also increasing in India, which was devastated by multiple bombings in July. These bombings are a clear message that Kashmir-based Muslim insurgents have returned from battles in Iraq and Afghanistan ready to fight India for control of Kashmir. Terrorism will further undermine governance in India, already weakened by government coalition politics and an escalating domestic insurgency.

Its impossible to find commentary on the political, social and economic impact of terrorism and escalating insurgencies on Asian countries in traditional bank and brokerage research. Banks and brokers simply don't have the resources or the will to examine these issues - a factor that has distorted risk perception, obliterating risk premiums.

Goldilocks or the wolf?

On top of increasing domestic investment risk, investors also seem oblivious to external factors that are pushing investment risk to unprecedented heights in Asia. The diplomatic vacuum that has characterized the Bush administration since 2000 has led North Korea down the nuclear weapons path, the latest turn of which produced the country's recent nuclear test.

A nuclear-armed North Korea in itself does not necessarily elevate security risk in Asia. However, the same cannot be said for Washington's reaction to North Korea's nuclear capabilities, which the Bush administration is responsible for nurturing.

Washington's efforts to garner Security Council support for extreme sanctions against North Korea, including a de facto naval blockade, are unlikely to be successful. This will force the US to implement these extreme sanctions outside the UN with the support of just a handful of other countries, leading to further escalation in the conflict between Pyongyang and Washington. Escalation means more nuclear and missile tests by North Korea and more saber-rattling by the US, both of which increase the probability of a military confrontation between the two.

There is no risk premium for South Korean equities reflecting the increasing probability of a military conflict on the Korean peninsula - a conflict that could destroy South Korea's economy in a matter of hours. Japan's equity market is also trading in a fog. Tokyo has already imposed more stringent economic sanctions on North Korea in response to Pyongyang's nuclear test. The government of Prime Minister Shinzo Abe will almost certainly join the Bush administration's coalition of the witless, which will try to inspect all ocean-going freight to and from North Korea. Such a provocation could encourage Pyongyang to strike at Japan, which is in easy missile range. The rapidly escalating conflict between the US and North Korea not only increases investment risk in South Korea and Japan, it also elevates investment risk across Asia, which could suffer enormous economic fallout. Another economic risk ignored in Asia is the increasing probability that the US economy will fall into recession in 2007. Equity markets in the US have advanced by about 10% since July with the Dow Industrials notching up record highs recently. This performance is predicated on the assumption that economic growth in the US will gently slow, pushing inflation down and allowing the Federal Reserve Bank to cut official interest rates.

The global equity market euphoria over a Goldilocks economic deceleration in the US has been fueled by the Federal Reserve, which has refrained from further monetary policy tightening ahead of the November mid-term elections though inflation remains clearly on the rise. This has created an unprecedented situation where bank governors publicly fret about rising inflation yet fail to tighten monetary policy appropriately - an obvious indication of the political foundation supporting the current monetary policy "pause".

By holding official interest rates steady, the Fed is increasing rather than decreasing the probability of a recession in 2007. The monetary and psychological boost that the Fed is providing to the US economy will inevitably quicken already rising inflation. This will force the Fed to aggressively tighten monetary policy after the November elections.

The result will be a sharp slowdown beginning in the first quarter of 2007. Given the fact that inflation is rising and US economic activity has reaccelerated, the Fed would be extremely lucky to manage the "soft landing" investors are anticipating in 2007. Luck is a very weak investment philosophy.

Asia's equity markets will blindly follow as the DJIA in the US continues to rack up new record highs predicated on the diminishing probability of a soft landing despite rapidly increasing domestic and external investment risks.

However, these gains, and much more, will evaporate once investors' risk perceptions become more closely aligned with actual investment risk. The next 12 months are likely to prove extremely volatile for equity markets in the US and Asia, as the US economy weakens and regional instability increases in Asia.

heathcliff

November 2nd, 2006, 09:11 AM

We're still struggling against the odds of a growing population. The government should continue in the positive direction it is taking in its efforts on the fiscal and economic front, and also focus greater effort at removing the bottlenecks that prevent macroeconomic gains from being felt at the microeconomic level.

Access to microfinancing is also a big problem in rural areas. But with the new order promoting better access to microfinancing, government must lay down sufficient guidelines to ensure against non-payment of borrowers.

sandrn

November 2nd, 2006, 12:15 PM

Moody's raises outlook on RP debt to stable
http://www.abs-cbnnews.com/storypage.aspx?StoryID=54981
Moody's Investors Service said on Thursday it raised its outlook on Philippine debt to stable from negative, as the market expected, due to sustained improvements in government revenues and lower dependence on foreign debt.

The affected ratings include the B1 long-term government foreign- and local-currency ratings, the B1 foreign-currency bank deposit ceiling and Ba3 foreign currency country ceiling.

"We stated in February that a change in the Philippines' rating outlook to stable from negative would depend on the achievement by the government of its 2006 fiscal targets coupled with prospects of further deficit reduction in 2007 and beyond," said Moody's Vice President Thomas Byrne.

"Based on fiscal performance through the first three quarters of 2006, it seems likely that the government will readily meet its deficit reduction target for the year as a whole. Although the full-year result for expanded value-added tax (EVAT) receipts is not available, total revenue collection from tax and non-tax sources seems likely to reach the annual target," said Byrne.

Goals for this year include generating P75 billion in additional revenues from the EVAT and reducing both the national government and public sector deficits to 2.2 percent of GDP. In addition, he said, smaller deficits and the country's improved external payments position have allowed the government to commence modest external debt prepayment, helping to reduce its reliance on foreign-currency-denominated debt and to ease its debt burden.

"Looking forward, we believe the government will continue to face formidable challenges in strengthening its fiscal position, and deficit reduction may not be as readily achievable as in the past several years," said Byrne.

"Political spending pressures will also increase in the run-up to the scheduled May 2007 congressional elections."

He said the economic necessity to try to catalyze the country's very weak investment growth rates through public infrastructure spending will also place additional pressures on the budget in 2007 and beyond.

"Exceptionally large increases in revenue generation achieved through reform and administrative tightening may have run their course," said Byrne. "Political will on the part of the administration and strong support in the Congress will be necessary for the Philippines to sustain its recent accomplishments."

In the meantime, he said, despite the marked improvement in fiscal performance in the past year, the Philippines remains highly indebted compared with its rating peers.

Government debt-to-GDP and government debt-to-revenue ratios will likely remain at levels elevated well above Ba and B rating category averages, and interest payments on debt will likely continue to absorb more than 30 percent of national government revenues this year and next year, despite the fall in domestic interest rates and a stronger exchange rate in 2006.

"For the rating to move up, there will need to be continued significant deficit reduction and decreased reliance on external financing by the public sector," said Byrne.

"Ultimately, debt ratios will need to be reduced from their current high levels and will need to move much closer to levels consistent with Ba-rated countries."

On the other hand, he concluded, relapse in fiscal discipline or macroeconomic instability that leads to disruption in the government's access to debt markets or to renewed volatility in the exchange rate or interest rates would be negative credit developments.

Markets had priced in an upgrade in the Moody's outlook with the government widely expected to keep its budget deficit far below target for a second straight year after the imposition of a key sales tax reform.

Local financial markets had already closed for the day when the announcement was made. The peso ended at 49.71 per dollar from its close on Tuesday at 49.84. Wednesday was a public holiday in the Philippines.

Moody's rates Philippine debt at four notches below investment grade, with Standard & Poor's at three below and Fitch Ratings at two below.

S&P and Fitch raised their outlooks on Philippine debt to stable from negative early this year after the government imposed a sales tax reform that has led to stronger revenues so far this year. Reuters

marites4

November 2nd, 2006, 05:55 PM

lots of really good things happening in the economic front. Now if they can just control the population then we're all set.

kiretoce

November 2nd, 2006, 09:12 PM

Philippines' economy set for acceleration
Reuters

The Philippine economy is set to accelerate next year and its currency still has room to rise, President Gloria Arroyo said yesterday.

She forecast economic growth of between 5.5 and 6.5 per cent in 2007, up from a government estimate of 5.6 per cent or more growth this year and 5 per cent in 2005.

The Philippine peso this week hit its highest level in more than four years at 49.73 to the US dollar and markets are on watch for possible central bank intervention to curb the strength of the peso and other Asian currencies.

Arroyo, however, said the peso was not too strong.

"I think it can rise more," she said at a press conference in Hong Kong after attending a summit in China with the Association of South East Asian Nations.

While Manila was sensitive to exporters whose goods would become less competitive with the rising peso, government efforts to cut red tape were reducing costs and helping offset the impact of the rising currency, she said. Importers, meanwhile, were benefiting from the strengthening peso.

She would not comment on whether she expected the Philippine central bank, which is independent of her administration, to intervene in the currency market.

"I can't tell the central bank governor what to do," she said, adding that she thought the bank had been making the right policy choices for the economy.

The peso's strength has been underpinned by the country's economic growth. However, pushing economic growth beyond 6 per cent is seen as essential for cutting poverty.

Arroyo said she hoped the economy would achieve sustainable growth of 7 per cent a year by 2010.

One factor that concerns investors and analysts is the security situation in the Philippines.

Security forces have been fighting Muslim groups in the southern region of Mindanao as well as communist guerrillas for decades. The government is trying to seal a peace deal with the biggest Muslim rebel group, the Moro Islamic Liberation Front, but talks have stalled and this week the government missed a self-imposed deadline for a new initiative.

Arroyo said she was confident both sides would succeed in reaching a lasting peace settlement despite current differences.

beads_strawberries

November 3rd, 2006, 07:15 AM

Moody's upgrade of the Philippine's rating must have proven that the political situation is stabilizing despite efforts to taint the administration. Politicking has always been a part of the country. But this did not prevent the present administration from instituting fundamental reforms for the economy.

adverg

November 3rd, 2006, 12:26 PM

It's like a chain reaction, we will see the result in sometimes.

ikra

November 3rd, 2006, 03:03 PM

baaah... i just do hope no more politicking happens sinceit really is going to disrupt our momentum

shadow_can2003

November 4th, 2006, 01:07 AM

^^Good thing, tahimik ang mga alipores ni Estrada.

jun_of

November 4th, 2006, 02:17 AM

More money for health, education, jobs, roads
By Gil C. Cabacungan Jr., Michelle Remo, Doris Dumlao
Inquirer
Last updated 02:37am (Mla time) 11/04/2006

Published on page A1 of the November 4, 2006 issue of the Philippine Daily Inquirer

FOR the first time in a generation, the Philippines will have surplus money to build schools and infrastructure, expand public health services, and create more jobs, President Macapagal-Arroyo said last night.

Returning from a weeklong visit to China, Ms Arroyo was buoyed by the outlook upgrade on the Philippines by Moody’s Investors Service, saying this would provide “direct benefits” to Filipinos—a view shared by official and independent economists, who saw the upgrade as a sign of better things to come for the country.

“For the first time in a generation, we now have the money for long overdue investments in our people and our nation,” Ms Arroyo said in her arrival statement.

“We have the first fruits of our reform—surplus money, not debt—to invest in infrastructure, education and healthcare and attract new investments to create good, high-paying jobs in the Philippines,” she said.

more -> http://newsinfo.inq7.net/inquirerheadlines/nation/view_article.php?article_id=30511

OtAkAw

November 4th, 2006, 07:16 AM

^^Good thing, tahimik ang mga alipores ni Estrada.

Hay nako dapat talaga manahimik na yang mga yan eh, sila ang dahilan kung bakit nahihirapang mag-take off ng todo todo ang bansa naten.

garzland

November 4th, 2006, 10:58 AM

^^ Yap, they should have kept their mouth shut a long time ago...:)

ikra

November 4th, 2006, 11:26 AM

lol.. if only erap didnt win.. but you know if he did not win, this country would have gone off some directin.. which is hard to imagine

Taz08

November 4th, 2006, 03:55 PM

This is the time we've all been waiting for.......GO PHILIPPINES....

Askal82

November 4th, 2006, 07:15 PM

Exporters are hurting from currency appreciation? I think its time for them to think out of the box by improving and innovating their products in order to increase its value. The exporters should realize that times are changing and they have to adopt new strategies to compete. The government is already doing its part to decrease the cost of doing business. It has to come down with attitude. The 'bahala na' view is related to the 'pwede na mentality' - a fatal detour that could essentially cripple their ability to survive.

amigo32

November 5th, 2006, 01:20 AM

Yeheeeyyyyy!
Yahooooooo!

dabert

November 5th, 2006, 02:04 AM

why would exporters worry about not earning that high anymore when a lot of Filipinos cannot even afford to eat three times a day?

3cr

November 5th, 2006, 10:43 AM

OFWs propping up economy, admits GMA
Daily Tribune
http://www.tribune.net.ph/headlines/20061105hed3.html

In an apparent slip of the tongue, President Arroyo has publicly acknowledged and probably for the first time that one big external factor — migrant labor — is propping up the Philippine economy.

“I want to thank the millions of hardworking Filipinos, including our overseas workers, who have come together to help turn around our economic fortunes. The bandwagon of Filipino productivity and excellence is pulling us forward in the world,” a Malacañang statement yesterday quoted the Chief Executive as saying last Friday evening upon her arrival at the Ninoy Aquino International Airport from a week-long working visit to China.

Mrs. Arroyo, during her more than five years in Malacañang, had credited her supposed managerial expertise as a major reason behind the also supposedly sound performance of the country’s economy. She had referred to overseas Filipino workers (OFWs) as “modern-day heroes” but did not openly mention their remittances in the billions as the money shoring up the often deficit-wracked economy.

The President, in her arrival speech, pointed out that the latest sovereign credit rating upgrade on the Philippines is “another important step forward for the Filipino people to build the country and raise the quality of life and help lift the poor from the grip of poverty.”

Moody’s last Thursday cited ongoing fiscal reforms implemented by the Arroyo administration as main reason for it to remove its negative outlook on the Philippines nine months after Standard and Poor’s and Fitch Ratings made similar upgrades. It noted the country’s progress in reducing its fiscal deficits and dependence on external financing for the upgrade.

In her speech, the President also pointed out that “for the first time in a generation, we have now the money for long overdue investments in our people and our nation. We have the first fruits of our reform — surplus money, not debt — to invest in infrastructure, education and healthcare and attract new investments to create good, high-paying jobs in the Philippines.”

Moody’s Investors Service “raised our outlook in recognition of the huge progress we have made in the Philippines to reform our economy and take control of our economic future,” she said.

Mrs. Arroyo’s visible elation from the upgrade, according to a detained congressman, is allegedly a sign that the President is “seriously hallucinating.” Thus, Party-list Rep. Crispin Beltran, in a statement, also yesterday said, the President “must immediately step down on the grounds of mental incapacity.”

Beltran, who has been in jail for months for alleged involvement in coup against Mrs. Arroyo last February, was reacting to her arrival statements that the Philippines now has surplus money to build schools and infrastructure, expand public health services and create more jobs. He said the President “pegging her hopes for the country on an improved credit rating” is misplaced, citing “the hundreds of Filipinos losing their jobs everyday, the widespread and increasing incidence of hunger and the hundreds of thousands more having no access to the most basic social services such as healthcare, education and housing.”

The congressman added Malacañang “has manipulated facts and figures to hide the true extent of poverty in the country and to project an improved fiscal situation. Beltran said 80 percent of Filipino families fall below decent living standards and the government, over the last five years or so, had lessened its allocations for vital social services, with those for education falling by five percent and health by 19 percent. He added the government continues to make high borrowings to promote the image that there is economic growth, when annual net borrowing rose from P175 billion in 2001 to P219.4 billion in 2005 and annual payments jumped from P274 billion in 2001 to P679 billion in 2005.

Earlier last Thursday, Beltran said the improved credit rating from Moody’s simply means that that “the national government can continue making loans. In short, the creditors will keep making money from demanding debt payments with high interest rates, on the one hand, and, on the other, the Arroyo government can continue making loans to fund its own corruption and twisted economic projects that benefit foreign investors without aiding the local economy,”.

The rating, according to him, is “self-serving.”

Beltran said foreign creditors and their adjunct agencies know that the election season is coming, and “it is a time when money literally flows like water if only through the hands of the big-time politicians and the incumbent executives of the national government and local government units. They want to project an improved fiscal image for the Philippines so investors can begin placing their bets on whom they want to win in the elections and who can support their business agendas.”

He was referring to the scheduled May 2007 local and national elections.

____________________________________

Teves warns Gloria on campaign splurge
Daily Tribune
http://www.tribune.net.ph/business/20061106bus1.html

The country’s top economic manager seems unsure whether the Arroyo government can stick to fiscal prudence in the run-up to next year’s national elections.

Finance Secretary Magarito Teves has warned against any spending spree, especially just ahead of congressional and local elections in May next year, when the temptation to dole out money to poor provinces to win votes will be strong.

“We need to take a close look at the expenditure side because they (Moody’s officials) are concerned about the elections,” he cautioned.

Moody’s Investors Service upgraded its outlook on the country’s key ratings to “stable” from “negative”, raising hopes that its credit rating would be raised and reduce its borrowing costs.

The ratings outfit, however, sees Manila continuing to face challenges in the form of political spending pressures ahead of the May 2007 mid-term elections.

For actual sovereign credit rating to move up, it said debt ratios would need to be reduced from their current high levels and closer to levels consistent with Ba-rated countries.

Moody’s praised the Arroyo administration for reducing the country’s reliance on foreign currency-denominated debt, as well as easing its debt burden overall.

The outlook boost is expected to drive forward the Philippine government’s attempt to put together billions of dollars in funds to rebuild the country’s decaying infrastructure, officials say.

The outlook upgrade by Moody’s, widely seen here as the most pessimistic among the major global credit rating agencies, has been portrayed by President Gloria Arroyo as a vote of confidence on the government’s economic reforms.

In particular on the “tough decisions” she made to broaden the Philippines’ narrow revenue base with a series of unpopular tax reform laws over the past two years.

Arroyo says the extra revenues will allow the government to balance the national budget by 2008 as well as splash out on an ambitious wish list of priority infrastructure projects including roads, airports, seaports, and rail systems that she outlined in her annual state of the nation address to Congress in July.

Government officials say poor infrastructure is a key hindrance to doing business in the Philippines.

“Infrastructure expands markets, which in turn, creates new opportunities for increasing the scale and scope of economic activities and expanding employment,” Economic Planning Secretary Romulo Neri said in a statement.

He said the government priority was to improve strategic transport infrastructure, including roll-on, roll-off ports and attached highway systems to interconnect the Southeast Asian archipelago.

Others are roads and rail systems that will decongest Manila, the building and expansion of roads and airports to tourism hubs, and “affirmative action projects” for impoverished areas or areas wracked with insurgency, such as the southern region of Mindanao.

Budget Secretary Rolando Andaya has said the four-year infrastructure spending program would cost about P372 billion.

Half of the funding would come from the 2007-2010 national budgets while the private sector would be asked to tender for 68.4 billion pesos’ worth of projects, or 18.39 percent of the total.

The rest would be funded with development aid from foreign countries as well as state-run Philippine firms and the local governments.

Philippine business has cheered the Moody’s statement, with share prices at the Philippine Stock Exchange surging to nine-year highs and the peso pushing up below 50 to the dollar.

Analysts now expect the central bank to lower its policy rates, reducing the cost of money for investment.

Shortly before Moody’s announced its decision on Nov. 2, the central bank decided to maintain its key overnight borrowing rate at 7.50 percent but only for bank placements up to P5 billion. It now charges lower rates for all placements in excess of P5 billion.

Neri said the fiscal reforms needed a follow-through on the microeconomic level, including the liberalization of the airline industry, promoting private sector participation in the government’s “nautical highway” projects, improving the regulatory environment in these industries, and enhancing power sector competition to reduce high energy costs.

“While we are doing well in our macroeconomic reforms particularly on fiscal and monetary policies, we need to follow through with microeconomic reforms to create more jobs, reduce unemployment, and poverty and hunger incidence,” he added.

3cr

November 5th, 2006, 10:57 AM

Peso, stocks climb on rating upgrade
Manila Standard
http://www.manilastandardtoday.com/?page=news1_nov4_2006

ECONOMIC planners welcomed a rating agency’s improved outlook on the Philippines even as the peso surged to a fresh four-year high and the stock market rallied for the 11th consecutive session.

The peso rose to P49.69 to the dollar from P49.71 Thursday, and the Philippine Stock Exchange Index increased by 1.7 percent, its best finish since July 1, 1997, after Moody’s Investor Service upgraded its outlook on Philippine debt to stable from negative on Thursday.

“The mood right now is very positive,” said Spencer Yap, BPI Securities’ assistant vice president. “There are foreign inflows and the market is very bullish.”

“We’ve been showered with a lot of positive economic news,” AB Capital Securities research director Jose Vistan said. “Oil prices are declining, the peso is strong and interest rates are falling. And now we also have good news from Moody’s.”

Finance Secretary Margarito Teves said the upgrade would result in lower interest payments for the Philippines—provided the peso’s exchange rate remained steady and oil prices US interest rates did not kick up.

“All these taken together may affect… a favorable trend, but if the trend continues, we may expect a further decline in interest rates.

Budget Secretary Rolando Andaya Jr. said the upgrade would result in lower borrowing costs for the government and private borrowers, as well as attract more foreign investors to the Philippines.

He said the peso’s appreciation would also result in savings of P22 billion from the government’s lower interest payments.

“Because the risk factor is minimized, borrowings will be less costly for public and private entities, he said. “This [upgrade] strengthens our resolve to further reduce the deficit.

President Gloria Macapagal Arroyo said Moody’s upgrade was a vote of confidence in her economic reforms.

“The upgrade… is a major vote of confidence in the economic reforms I have undertaken since taking office,” she said in a statement.

Moody’s removed its negative outlook for the Philippines nine months after rivals Standard and Poor’s and Fitch Ratings made similar upgrades. It cited the country’s progress in reducing fiscal deficits and its dependence on external financing for its upgrade.

Moody’s rates Philippine debt at four notches below investment grade, Standard and Poor’s at three below, and Fitch at two below.

3cr

November 5th, 2006, 11:02 AM

Govt to rein in budget despite next year’s polls
By Lawrence Agcaoili
Manila STandard
http://www.manilastandardtoday.com/?page=business3_nov4_2006

Economic managers yesterday allayed fears that the Philippines would breach the programmed budget deficit of P63 billion next year due to higher spending resulting from next year’s elections.

Finance Secretary Margarito Teves told reporters yesterday after the fourth monthly draw of the Premyo sa Resibo that the government would closely monitor expenditures next year.

“Spending has to be monitored closely because [credit rating agencies] are looking at the kind of discipline that we are facing despite the fact that normally election period or election activities are associated with heavier spending,” Teves said.

He said the government would vow to deliver on its promise to trim the budget deficit to P63 billion, or 0.9 percent of gross domestic product next year, from the proposed P125 billion, or 2.1 percent of GDP this year.

“For the meantime, we are trying to stick by our program of having a budgetary deficit of not more than P63 billion, or 0.9 percent of GDP next year,” he said.

3cr

November 5th, 2006, 11:13 AM

RP infrastructure revamp draws closer after ratings boost
Manila Bulletin
http://www.mb.com.ph/MAIN2006110578924.html

MANILA (AFP) - A ratings boost last week is expected to drive forward the government's attempt to put together billions of dollars in funds to rebuild the country's decaying infrastructure, officials say.

Moody's Investors Service upgraded its outlook on the country's key ratings to ''stable'' from ''negative'', raising hopes that its credit rating would be raised and reduce its borrowing costs.

The outlook upgrade by Moody's, widely seen here as the most pessimistic among the major global credit rating agencies, has been portrayed by President Gloria Arroyo as a vote of confidence on the government's economic reforms. In particular on the ''tough decisions'' she made to broaden the Philippines' narrow revenue base with a series of unpopular tax reform laws over the past two years.

Arroyo says the extra revenues will allow the government to balance the national budget by 2008 as well as splash out on an ambitious wish list of priority infrastructure projects including roads, airports, seaports, and rail systems that she outlined in her annual state of the nation address to Congress in July.

Government officials say poor infrastructure is a key hindrance to doing business in the Philippines.

''Infrastructure expands markets, which in turn, creates new opportunities for increasing the scale and scope of economic activities and expanding employment,'' Economic Planning Secretary Romulo Neri said in a statement.

He said the government priority was to improve strategic transport infrastructure, including roll-on, roll-off ports and attached highway systems to interconnect the Southeast Asian archipelago.

Others are roads and rail systems that will decongest Manila, the building and expansion of roads and airports to tourism hubs, and ''affirmative action projects'' for impoverished areas or areas wracked with insurgency, such as the southern region of Mindanao.

Budget Secretary Rolando Andaya has said the four-year infrastructure spending program would cost about P372 billion ($ 7.49 billion).

Half of the funding would come from the 2007-2010 national budgets while the private sector would be asked to tender for P68.4-billion worth of projects, or 18.39 percent of the total.

The rest would be funded with development aid from foreign countries as well as state-run Philippine firms and the local governments.

However, Finance Secretary Magarito Teves warned against any spending spree, especially just ahead of congressional and local elections in May next year, when the temptation to dole out money to poor provinces to win votes will be strong.

''We need to take a close look at the expenditure side because they (Moody's officials) are concerned about the elections,'' he cautioned.

Moody's praised the Arroyo administration for reducing the country's reliance on foreign currency-denominated debt, as well as easing its debt burden overall.

However, the ratings outfit sees Manila continuing to face challenges in the form of political spending pressures ahead of the May 2007 mid-term elections.

3cr

November 5th, 2006, 06:40 PM

Exporters want peso's champions to shut up already
By Gil C. Cabacungan Jr.
Inquirer
http://business.inq7.net/money/breakingnews/view_article.php?article_id=30562

HURTING from the strengthening of the peso, exporters want government officials and financial experts not to further exacerbate their woes by toning down their exuberance over the growing strength of the local currency.

Since the government and banks cannot do anything to rein in the peso's rise, Philippine Exporters Confederation Inc. (Philexport) president Sergio Ortiz-Luis said they should at least "keep their mouths shut” and avoid putting more fuel into the peso's climb that has been a bane to exporters.

"We're not asking the government to step in and order the BSP (Bangko Sentral ng Pilipinas) to intervene. We just want them to stop adding to the hype, and that includes the foreign bankers too,'' he said.

Ortiz-Luis explained that too much positive talk on the peso's rally, specifically predictions that it would strengthen further below the P49-to-$1 mark, has only increased speculation in “this direction.”

"It has become a self-fulfilling prophecy. Although some of the peso's strength has been market-driven, we can't help but wonder how much of this rally has been hyped by the players?'' asked Ortiz-Luis.

He said a strong peso is not conducive to exports because it makes local products more expensive to foreign buyers.

"What is most disheartening is that our indigenous exports like furniture, handicrafts, and processed foods are the ones getting hit by a strong peso. At below 50, some exporters have to cancel their orders because they would be shipping their products at a loss,'' he said.

Ortiz-Luis said that 30 percent of the country's export earnings were generated by indigenous products which account for 80 percent of all labor in all export industries.

While the government has promised to provide support to exporters through tax exemptions, Ortiz-Luis said these measures were too minimal to offset the impact of a strong peso.

aranetacoliseum

November 5th, 2006, 08:07 PM

panu yan sbi ni GMA 7% ang growth natin starting 2010........last term nya dba 2010 bka nmn ung pumalit sa kanya ala ERAP............

cra ang pinagpaguran ni GMA.....

ikra

November 5th, 2006, 09:17 PM

panu yan sbi ni GMA 7% ang growth natin starting 2010........last term nya dba 2010 bka nmn ung pumalit sa kanya ala ERAP............

cra ang pinagpaguran ni GMA.....
that is what i fear the most.... I want people to vote for a well educated president... who has good background... and basically knows what theyre doing.

Erap was an iconic image but I am sure he has no sense of good direction as to what to do with the country's economy... -_-

I dont know why people in the philippines are such bad voters... -_-

not just that... i dont get it why presidential candidates are not knowledgable as well.... dammit!

le Reine

November 6th, 2006, 05:06 AM

^I'm worried about the election spending this 2007. I just hope that the government could control their spending. If they could and would not do it, it would surely be a big problem.

marites4

November 6th, 2006, 07:52 AM

yeah that is one of the investors concerns about us. We are boom and bust cycle. Plus the politicians crab mentality of not practicing continuity with reforms and programs started by their opponents.

demented_pigeon

November 6th, 2006, 08:59 AM

^^ maybe we should start voting for candidates with programs of government and start to vote for parties rather than personalities.

3cr

November 6th, 2006, 09:03 AM

^^ Yup like how it is suppose to be in the first place! :okay: :okay: :okay:

3cr

November 6th, 2006, 09:11 AM

Very True. Quite sad the armed forces can't seem to nip this problem in the bud. Definitely not good for the economy.
Security risks in RP hiking costs for investors — study (http://www.philstar.com/philstar/News200611060403.htm)
By Ma. Elisa Osorio
The Philippine Star 11/06/2006

Peace and order problems have made investing in the Philippines expensive, a study prepared by a management consultant company said.

In the study, C. Virata & Associates said business contractors have to deal with higher insurance costs and, in many cases, "revolutionary taxes" from communist rebels.

The study said insurance premium usually reaches about 2.5 percent of the total cost of a project due to negative security perception. Normally, only 1 percent of the cost of a project represents insurance cost, according to the study.

Furthermore, many businesses particularly those in the countryside are subject to the so-called revolutionary taxes from rebel groups. Contractors usually set aside 1 percent to 3 percent of total project cost to avoid being harassed by armed groups particularly New People’s Army (NPA) rebels.

"Actual incidents of equipment being razed/burned have been cited where the contractor fails to pay these informal fees," the study stated. These "taxes" usually fall under the contractor’s "indirect costs."

In June, President Arroyo ordered the Armed Forces of the Philippines to do more to stop NPA rebels from collecting revolutionary taxes.

marites4

November 6th, 2006, 09:21 AM

^^ maybe we should start voting for candidates with programs of government and start to vote for parties rather than personalities.

yup i'd like to vote for borgy and Kris Aquino myself, since they're slated to butt heads at the next presidential race.

demented_pigeon

November 6th, 2006, 09:25 AM

maybe there are some of the liberal economic policies that the government shouldn't immediately act on whenever the WTO or the IMF insists. i think some old policies should be used. there should be incentives and protection given to local industries that are competing in the global market. filipino companies should be encouraged to make investments in our country that will compete with the foreign direct investments. also, we should not even entertain moves by economic powers to "open" up our markets unless these countries will put to an agreement the issue of their continued subsidy of their agricultural products which results to the dumping of their goods on our market. there should also be an encouragement of science, engineering, and other sciences and related technologies that will aid in industrialization. witout these, we will fail to reverse the tide of labor migration and labor exportation. we should make it our goal to make our country's economy sustainablt enough to assure enough jobs for all filipinos in order to reverse the filipino diaspora.

3cr

November 6th, 2006, 09:36 AM

We're not really that influential in world politics and the Philippines is considered small potatoes kasi in the over all scheme of things (world economy) which is why we are always at the mercy of others as oppose to the other way around since we actually need them more so than they need us. Now if we have nuclear capabilities like what North Korea is doing now (a threat), maybe the world powers will be more inclined to listen to such demands. And because we don't, all the more we ,Filipinos, have to be more self reliant (sariling sikap) and selfless/honest (less kurakot) para sa ikauunlad ng ating bansa at kabuhayan.

chixbebe

November 6th, 2006, 11:30 AM

THE BANGKO SENTRAL NG PILIPINAS expects the inflation rate to go below 6.8percent by the end of the year and even lower to 4.5 percent next year.

This despite the BSP's decision on Thursday to pay lower interest on excess money placed by banks with the monetary authority to encourage banks to lend out more money.

The BSP last implemented this tiering system in 2003 and 2004.

BSP Governor Amando Tetangco Jr. said on Friday the BSP sanctioned the tiering system because the outlook on inflation was favorable, due to the recent easing of oil prices, ample agricultural production and the appreciation of the peso against the US dollar.

"At the same time, there are risks. But at the end of the day, the expectation is for inflation to be mild," Tetangco said.

"Right now, we are over the 4-5 percent target. We are currently at 6.8 percent, but we think the 2006 average could be below 6.8 percent and the deceleration will continue to 4.5 percent next year," Tetangco said.

Even with the 14.5-percent growth in domestic liquidity or m3 in September from 12.4 percent in August, the policy-making board Monetary Board kept the BSP's overnight borrowing rate at 7.5 percent and lending rate at 9.75 percent last week.

But with the tiering system, only the first P5 billion in overnight money will enjoy the 7.5 percent published rate.

The interest on the next P5 billion will be 200 basis points lower or 5.5 percent and placements in excess of P10 billion will yield only 3.5 percent.

This system thus makes it unattractive and even costly for the banks to lend more than P5 billion to the BSP, since the interest rate is lower than inflation.
Domestic liquidity or m3 is the broadest measure of money and is used to estimate the entire money supply in an economy.

It includes money in circulation, demand deposits, money market funds and short-term repurchase agreements

3cr

November 6th, 2006, 05:44 PM

The negative side of GMA's OFW strategy/push...

Swelling ranks of OFWs draining local talent pool
By Daxim Lucas 11/06/2006

An influential multilateral funding agency has urged both the public and private sectors to implement more initiatives to reverse the effects of a "brain drain" caused by the swelling ranks of overseas Filipino workers (OFWs).

The Manila-based Asian Development Bank has warned that the sustained export of skilled Filipino labor could eventually end up discouraging foreign investments if the local talent pool continued to decline.

"Brain drain has an impact on foreign direct investment as capital will flow only into economies with perceived adequate supplies of skilled labor in key sectors," the bank said in a book released last week titled "Converting Migration Drains into Gains."

"One of the greatest concerns about brain drain is that the continued migration of skilled workers reduces overall productivity," it added.

The 66-nation member organization defines brain drain as a situation when a country's diaspora is disproportionately made up of skilled workers, causing the source country to experience a decline in average-per-worker income. Eventually, educational investments in the source country--such as tuition paid for nursing or computer skills courses in the Philippines--become subsidies for the destination country.

The ADB pointed out that the country's migrant labor force "encompasses a disproportionate share of the most productive age group (those between 25 to 44 years old)," which suggests a loss, even for temporary and limited periods, of "those with the most experience, on-the-job training, and likely supervisory skills."

The group also represents "a disproportionate share of individuals with greater number of years of education, especially those who have completed bachelor's or higher degrees."

To protect the local economy from the ill effects of a "brain drain," the ADB urged the various stakeholders in the local community to focus on programs that would encourage Filipinos working overseas to share talents and skills gained abroad with their locally based counterparts, or a so-called "brain gain."

"A migrant-sending country such as the Philippines should see more brain gain programs and knowledge transfer initiatives, not just by overseas-based migrant networks or individuals, but also by groups of returned OFWs nationwide, by civil society groups and academic research institutions, by the business and government sectors, and by international organizations," the bank said.

It added that brain gain activities should deserve more attention from multilateral organizations, donor agencies and host countries of skilled Filipino migrants. This can be done through avenues such as official development assistance windows.

The ADB pointed out, however, that the onus for converting the brain drain into brain gain lies most heavily with the government.

"Some think that the government is unable to integrate the vital role of international migration into national development policy," the ABD book said.

"While the Medium-Term Philippine Development Plan has portions that discuss how overseas Filipinos can contribute to development, they do not provide a clear and broad policy perspective for the country," it added. "Public policy can make or break any knowledge transfer program."

Government statistics showed that there were 7.9 million Filipinos overseas as of end-2005, either as contract workers, permanent residents or undocumented migrants.

"Distributed across 193 countries, overseas Filipinos have come to be regarded as very significant contributors to the country's economic development," ADB said.

Last year, they sent home $10.6 billion, which was roughly equivalent to a tenth of the country's total economic output for a year or about half of the government's foreign currency reserves.

The Bangko Sentral ng Pilipinas expects OFW remittances to top $11.8 billion by year's end.

Askal82

November 7th, 2006, 02:02 AM

^^ maybe we should start voting for candidates with programs of government and start to vote for parties rather than personalities.

Not parties but platforms. Platforms that can provide long-term economic growth, financial and political stability.

demented_pigeon

November 7th, 2006, 03:17 AM

^^ that goes without saying...

beads_strawberries

November 7th, 2006, 05:55 AM

DoggMann

November 7th, 2006, 09:59 PM

http://business.inq7.net/money/topstories/view_article.php?article_id=31180

Reserves hit all-time high of $22.27B

Inquirer
Last updated 02:21am (Mla time) 11/08/2006

THE gross international reserves (GIR) breached the $22-billion mark at end-October to reach an all-time high of $22.27 billion despite some foreign debt prepayments made by the central bank.

The GIR was up by about $680 million from $21.59 billion at end-September and by $4.2 billion from end-October 2005, the central bank, Bangko Sentral ng Pilipinas (BSP), reported Tuesday.

“The higher end-October GIR 2006 was mainly a result of inflows from the BSP’s foreign exchange operations and income from investments abroad,” BSP Governor Amando Tetangco Jr. said in a statement.

The continued buildup of the reserves allowed the BSP to retire last month $446 million in loans and debt notes ahead of their 2007 and 2009 maturities. This was on top of the servicing of maturing foreign-exchange debts by the BSP and the national government during the period.

The GIR, which includes the BSP’s gross foreign currency holdings, gold reserves, Special Drawing Rights currency of the International Monetary Fund, is an indicator of the country’s ability to pay for imports and foreign debts.

Tetangco said the end-October GIR was enough to cover about 4.4 months’ worth of imports of goods and payments of services.

It was also equivalent to four times the country’s short-term foreign debt based on original maturity.

The foreign exchange reserves buildup since the start of the year is supported by proceeds of the government’s foreign borrowings, cash remittances from overseas Filipino workers, foreign direct investments and foreign portfolio investments. With INQ7.net

sugarboy

November 7th, 2006, 11:51 PM

OFW money has central bank worried on inflation

Inquirer
Last updated 02:20am (Mla time) 11/08/2006

INFLATION has eased to a two-year low but the central bank, Bangko Sentral ng Pilipinas (BSP), is worried about possible upward pressure on consumer prices because of cash pouring in from overseas Filipino workers (OFWs) in time for the Christmas holidays.

BSP Governor Amando Tetangco Jr. said Tuesday that inflation rate would likely continue to slacken up to yearend, but added, “The BSP would remain watchful of the potential inflationary impact of foreign exchange inflows such as OFW remittances, and any shift in the public’s inflation expectations, as we enter the last quarter of the year.”

He said “the BSP remains strongly committed to achieving the inflation target for 2007, and pays close attention to any evidence of rising inflation expectations and emerging second-round effects on price- and wage-setting behavior.”

“Authorities also continue to closely monitor liquidity conditions in view of their potential impact on inflation,” he added.

To a considerable extent, “price-setting behavior” and “liquidity conditions” pertain to money and spending by families of OFWs, who remit billions of dollars to their families, most of which goes to consumption.

Household spending is traditionally highest during the Christmas season, which in the Philippines starts in November and lasts until early January.

The National Statistics Office reported Tuesday that inflation fell to its lowest level since June 2004, to 5.4 percent in October, bringing the January-October average to 6.6 percent.

Nonetheless, Tetangco said, the BSP “also continues to expect average inflation for 2007 to settle within the government’s 4.0-5.0 percent target in the absence of further adverse shocks.” With INQ7.net

marites4

November 8th, 2006, 01:41 AM

Yup that is the bad side to these remittances. Businesses are unscrupulous. THey will jack up the prices as long as there are people who will keep buying their products. Even if the local wage cannot afford them the ofws remittances can support such ridiculous prices.

beads_strawberries

November 8th, 2006, 06:09 AM

^^ Aside from the forex reserves hitting another record high, the inflation rate continues to goes down from 5.7% to 5.4% this time. The inflation rate is one of the indicators to show that even the masses have their share on the benefits of the growing economy.

With these and the resurgent stock market, our economy continues to move forward for the benefit of the people.

chixbebe

November 8th, 2006, 12:06 PM

Right...Big corporations also reports what gains they had since our economy booms.

MEGAWORLD Corp. almost doubled its net income from January to September 2006 on strong sales of its residential projects in key areas in Metro Manila compared with its performance in the same period last year, with its net income rose to P1.5 billion during the period, up by 92 percent from the same period last year. Total revenues jumped to P6.4 billion or a 62-percent increase from last year’s.

Truly, this indicates how our economy performs this time. We may not notice that in no time, we are fully loaded with investors coming from the different countries asking for a place for them.

ikra

November 8th, 2006, 03:55 PM

^^ Well, a political party is defined as a group of people with the same ideologies and political principles. I am one of those who adhere that we should not vote for mere personalities but for parties with good platforms that will certainly benefit the people and the country. We should not be persuaded because they are simply popular but we should vote for those people who would really be serving the public.

In as much as we are experiencing economic gains now, hopefully the next batch of public officials would continue these economic reforms.

thats why a parliamentary system is better at doing this compared to presidential... Prime minister is basically a head of a party, where a mjority of the seats of parliament belongs to his party. Now there are still people who are not in the same party, or the opposition who have seats in parliament. The number of seats is dictated by the percentage of the people voting for the parties. Unlike pinas, the president would wanna do this, but his/her cabinet members are from opposition.. in the end nothing is done

chixbebe

November 9th, 2006, 10:21 AM

CONFIDENCE in the Philippines among Japanese firms operating here turned positive for the first time in 18 months, reaching a rating of 2.8 points in October, according to the latest survey of the Japan External Trade Organization (Jetro).

Jetro's latest monthly diffusion index survey showed that business sentiment for the country picked up despite confidence in Southeast Asia remaining "subdued" last month.

The ratings measure year-on-year changes in business outlook for the current month and the next two or three months ahead.

Ratings are expressed as diffusion indices, which show the difference between positive and negative responses.

Since Jetro started the poll in June 2001, Philippine ratings bottomed at negative 40.9 in December of that year and peaked at 22.9 in September 2004 before dipping to current ratings.

Jetro explained that the aim of the survey was to provide up-to-date information on business conditions in the Asian economy to help companies develop more effective business strategies.

Firms were asked to compare earnings prospects, supply and demand, inventory, sales prices and accounts receivable with the same period a year earlier.

Philippine-based respondents in the August survey included 180 firms engaged in businesses involving oil, chemicals, steel, metals, electric and electronic machinery, transportation machinery and other manufacturing concerns as well as construction, real estate, transport, communication, commerce, services and other non-manufacturing activities.

mygz14

November 9th, 2006, 10:36 AM

Article posted November 9, 2006, 4:50 pm

The peso may strengthen to P46 per dollar by end 2007 and the stock market's main index may test its all-time high of 3,447 next year, with the economy getting a boost from mineral exports and dollar remittances from overseas Filipinos, said local fund management group Philequity Fund Inc.

For the rest of the story:
http://www.gmanews.tv/breakingnews.php?sec=2&id=20406

chixbebe

November 10th, 2006, 10:09 AM

3 more bank mergers seen

The Bangko Sentral ng Pilipinas (BSP) said it expects up to three more bank mergers until next year as the banking landscape shifts dramatically following the merger of Equitable PCI Bank and Banco de Oro.

BSP Governor Amando M. Tetangco Jr. told reporters that for reasons of size, competition and strategic footing, authorities were expect two to three more bank mergers to immediately follow.

"Naturally, they want to be more competitive in the market," Tetangco said. "Aside from what already happened, I wouldn’t be surprised if two to three more banks merged up to next year."

Driven by the growing sophistication of the financial market as well as the large investment outlays required to adapt new technologies, bank regulators said it seems unlikely that the consolidation trend is drawing to a close.

BSP Deputy Governor Nestor Espenilla Jr. told reporters earlier that the banking industry in general is moving in the right direction and consolidation is only part of the process.

"The industry is at that point where if they want to continue playing, they need to make what are sometimes large investments," Espenilla said. "If they do not have the critical mass, the investments required in technological requirements alone could be prohibitive."

Espenilla said that banks that do not have this critical mass have the option of either merging with other banks or scaling down to play in specific niche markets.

Even the movements among the country’s largest banks, according to Espenilla, could not be conclusively considered as completed since the upheaval in the global financial market is also far from over.

The merger between Equitable and BDO, for instance, placed BDO as the surviving entity squarely in second place among the country’s biggest banks.

Espenilla said the growing sophistication of the banking industry and the technologies being developed to cope with this growth often required considerable investments.

However, Espenilla admitted that the Philippine market is not big enough to support large consolidations and even from a geographic standpoint, there would be niches that only certain banks would be able to serve.

"We know for a fact that big banks do not serve smaller customers and small customers are often turned off by big banks," Espenilla said. "This means there will continue to be niches in this type of market."

mygz14

November 10th, 2006, 10:53 AM

Article posted November 10, 2006, 4:10 pm

Jollibee Foods Corp. on Friday said it will merge three of its fastfood chains to simplify operations and improve efficiency.

In a statement, Jollibee said that pending the approval of the Securities and Exchange Commission, it will consolidate Chowking Food Corp., Greenwich Pizza Corp., and Baker Fresh Foods Philippines Inc.

For the rest of the article:
http://www.gmanews.tv/breakingnews.php?sec=2&id=20512

Louman

November 10th, 2006, 11:39 PM

mygz14

November 11th, 2006, 04:01 PM

Merge all three of them? There's at least two places here in Los Angeles where there is a Chowking and a Jollibee right next to each other. Another Chowking is about to open in LA (yes. this one is next to a Jollibee). I don't want to see either restaurants close down because of the merge.

Yeah, they would merge Chowking, Greenwich and Baker Fresh Foods (Owner of Delifrance) but not Jollibee. The new entity would be called Fresh N’ Famous Foods Incorporated. It would be the second largest food service in the country after Jollibee :)

marites4

November 11th, 2006, 09:28 PM

Economic growth not a fluke’
By Aurea Calica
The Philippine Star 11/12/2006

The real thing.

President Arroyo declared yesterday that the country’s new economic growth "is not a fluke, not a one-time upsurge" as she expressed elation over the P54-billion revised value-added tax (RVAT) collections, the surging stock market and increasing exports and investments.

Mrs. Arroyo said indicators show that the country’s growth was sustainable and she vowed to raise the ranking of the Philippines in the United Nations Human Development Index (HDI) amid these steady economic gains and new revenues.

HDI rates countries based on wealth, life expectancy and education. The Philippines has not moved from last year’s 84th rank out of the 177 countries in the index. The country ranked better than its Southeast Asian neighbors Indonesia (No. 108), Vietnam (No. 109), Cambodia (No. 129) and Myanmar (No. 130).

Mrs. Arroyo reiterated that P22 billion was slashed from next year’s interest payments for foreign debts. The savings were allocated for education (P16 billion), health services (P5 billion) and social welfare (P1 billion).

"Our people have led the march back to our fiscal health, they will enjoy the first gains. We shall wield new revenues to accord every Filipino a life of dignity, productivity and human security against the backdrop of larger reforms in governance," she said in a speech during the 70th founding anniversary celebration of the Securities and Exchange Commission at Malacañang.

"As we translate our economic gains into broader social justice, we also extol the sense of productivity of every Filipino that is keeping our strong niche in the world competition. Economic growth, competitiveness and social justice are our key thrusts to a better future," Mrs. Arroyo said.

She commended the SEC and the whole economic team for leaving "no stone unturned to bring the economy back on track and keep it humming."

"The results of that synergy are now out there for all Filipinos to appreciate and enjoy. International investors and ratings houses are giving us the thumbs up," she said.

Mrs. Arroyo cited the P645 million revenues that the SEC remitted to the Bureau of Treasury, which was P139 million above target for the whole year.

Exports increased by over 15 percent this year, she said, and the P54-billion RVAT collections in nine months also exceeded target by P1.4 billion. She also noted the stock market was experiencing an extended bull run, hitting a nine-year high.

Mrs. Arroyo further said by the end of August, foreign direct investments rose 21 percent, amounting to $1.3 billion and the combined Bureau of Investments-Philippine Economic Zone Authority record of investments for 10 months of this year reached P220 billion and might hit P240 billion or more by year-end.

"We commend our revenue agencies for a job well done, but most of all we extol the Filipino taxpayer who continues to exercise the patriotic duty of paying the right taxes," she said.

"We will continue to increase our tax collection efficiency, seal revenue leakages and maintain disciplined spending as we clear more hurdles along the road and open broader opportunities for enterprise and jobs," Mrs. Arroyo said.

The President said a strengthened poverty reduction campaign would continue through a comprehensive anti-hunger program to bring affordable food to the 10 poorest provinces.

"While working on our pro-poor programs, we are giving equal attention to the policy, systems and physical reforms that created the environment for sustainable growth," she said.

"We aim to be part of the First World in 20 years by loosening the grip of poverty at the grassroots. Our immediate objective is to give the poorest of our people the basic amenities of food, water, electricity, health services, education and decent jobs with which they will improve the quality of their lives," Mrs. Arroyo said.

The finance department said net revenues from RVAT from January to September put the VAT revenue collection on track to meet the P75 billion target for the whole year.

The department said the Bureau of Customs reported collections of P41.9 billion, exceeding its target by P3 billion. In contrast, the Bureau of Internal Revenue missed its target by P600 million, collecting only P12.8 billion.

It added the BoC registered higher collections due to the increased value of the importation of oil (P1.8 billion) and coal (P0.4 billion).

On the other hand, the BIR’s collection shortfall was attributed to the decline in the volume of domestic oil production, which shifted the VAT collections to imported oil, a revenue flow captured by the BoC.

Finance officials said the BIR performance also suffered due to higher input VAT claims by downstream industries, which reached P400 million during the period. Yield from input VAT cap and crediting also turned out lower yields of P7.9 billion and P2.9 billion, respectively.

The VAT is considered the easiest tax scheme to administer because of the self-collecting mechanism embedded in the system as well as the magnitude of the paper trail that allows tax administrators to track tax payments.

Finance officials said the government’s VAT collection efficiency rose to 70 percent in 2005. In the first nine months of the year, the rate was approaching 75 percent.

Sinjin P.

November 12th, 2006, 10:10 AM

Newsbreak: Gov't running out of manna for LGUs

By Miriam Grace A. Go, Newsbreak

IT’S BEEN 15 years since local government units (LGUs) realized that their share in the internal revenue allotment (IRA), as mandated in the Local Government Code, isn’t enough to cover their financial requirements. For 15 years, too, their lobby for an increase in the yearly collection of the Bureau of Internal Revenue has been futile. No, the national government told the LGUs countless times, the pie isn’t going to be sliced any other way.

Yet, LGUs don’t seem to be looking for alternative sources of funds, either. Until now, a decade and a half since the Code gave them powers to create their own sources of revenues and to collect taxes and fees that will go exclusively to them, nearly 90 percent of LGUs still depend on the IRA to finance 75 percent of their operations and services.

With most of the money going to the salaries of local government employees, very little is left to fund development programs that could bring progress to the localities. Under the Code, local governments can collect real property and business taxes.

They can also enter into enterprises, such as public markets, parking services, etc. Another law passed the same year as the Code, Republic Act 6976, allows LGUs to enter into joint ventures with the private sector (like build-operate-transfer or BOT projects), to float bonds, receive grants, and take out loans from banks.

In 1996, the Department of Finance (DOF) was well aware of the financial burden that LGUs were facing. It recommended ways for LGUs to be able to cope with the financial demands of devolution, such as:

• Increase BOT arrangements for LGUs.
• Develop the LGU bond market.
• Help convince private banks to lend to LGUs more.
• Make government financial institutions more involved in LGU financing.
• Restructure the Municipal Development Fund to finance more long-term undertakings.
• Improve the LGUs’ capacity to raise their own revenues.
• Tap ODA technical assistance and financing.

Still, in a publication in 2005, the DOF found it "disturbing" that "only a small minority of local governments [has] taken advantage of the new financing options made available to them." Less than 10 percent of them partnered with the private sector in some projects.

The experiences of some LGUs also showed that the design of bonds here are not friendly to LGUs, unlike in other countries. Windows for LGU loans in private banks remain small, too, although the World Bank and the Asian Development Bank are trying to address these concerns.

A few LGUs—including those in the low-income brackets—dared to test their new powers to earn or acquire money outside the IRA. They have been able to sustain these successful experiments, and in some cases even after the local executives who initiated the projects had left. To us, their experiences are the best argument against the common—although not necessarily invalid—assumption that LGUs won’t be able to perform and deliver well unless the IRA pie is cut 50-50, 60-40, even 70-30 in favor of the locals.

Indeed, some local governance experts observe, the IRA has discouraged LGUs from trying hard enough, or from trying at all. With at least three-fourths of the cost of local-governance-as-usual already ensured in the monthly, automatic releases from the national government, LGUs may not be compelled to look for extra income beyond the real property taxes and business permit fees that they may not even be collecting aggressively.

The cycle has become so frustrating that some experts and progressive local officials have suggested two immediate solutions:

• For the national government to put up an equalization fund. After the IRA is distributed according to the present formula, additional funds can be given to very poor LGUs that have the potential of doing good by helping them gain their bearings.

• For the IRA share to be determined by the performance of individual LGUs, not just by land area and population. If they work harder to collect local taxes and deliver better services to their constituents, they will have additional IRA. The complacent LGUs will then be forced to move.

There have been attempts at inter-LGU undertakings, mostly in the areas of health services, environmental protection, and social services. Contiguous localities are encouraged to come up with joint programs that address common concerns, thus making the implementation efficient and less costly. Rarely have there been collaborations in planning.

Many LGUs remain cool to the idea, however. One reason could be that if there are many planners and leaders whose approval should be sought in every step of the project, it will be difficult for corrupt officials to take kickbacks from the projects.

Aser Javier, director of the Institute of Development Management and Governance in UP Los Baños, gives two other reasons. One, "intervening political interests and interference are…a demotivation" to joint undertakings. Two, "integration can be politically interpreted as a loss of geographic turf."

He studied the case of Siquijor province and a few of its municipalities, where German funders backed out of an integrated development planning project for the LGUs. The local governments put up a data center that would assist each of them in planning and budgeting. Political bickering between some of the mayors led the LGUs to stop giving their shares to the center’s common fund. The provincial government is trying to salvage the project using its own funds.

As usual, politics, aside from the limited IRA, is the other scourge to LGU initiatives toward financial stability and independence.

We document in this special report two other cases that have the makings of this. Politics is dangerous to the financial health of LGUs, and stakeholders shouldn’t spend the next 15 years watching this unravel before them.

sandrn

November 12th, 2006, 07:49 PM

Government plans more loan prepayments
http://www.mb.com.ph/BSNS2006111379498.html
By LEE C. CHIPONGIAN

The National Government and the Bangko Sentral ng Pilipinas are prepaying more loans to reduce the country’s debt, including its outstanding obligations from the International Monetary Fund, officials said.

"It would be a good signal to the market that we’re paying our debt," Finance Secretary Margarito B. Teves said Friday night.

The NG and the BSP announced over the weekend that the government will prepay selected loans from the Asian Development Bank worth $ 70 million, which will save NG $ 5.4 million in interest payments. A total of seven ADB loans are going to be prepaid with fixed interest rates ranging from 7.7 percent to 11 percent and loan maturities ranging from 2008 to 2013.

"There’s a penalty (in prepaying loans) but we’re more than able to cover that," said Teves.

BSP Governor Amando M. Tetangco Jr. said the central bank, which has already prepaid $ 1.17 billion of its loans this year may have to retire more loans before the end of 2006. "Titingnan namin kung meron pa kaming pwedeng i-prepay (We will see if we can prepay more loans)," he told reporters in a separate press briefing. The early retirement of the $ 1.17 billion saved BSP $ 32 million in interest payments.

The BSP in particular, is eyeing prepayment of the $ 223.9 million last IMF obligations.

Government sources said the IMF credit is probably the next loans in line to be retired. "Prepayment of the IMF obligations is always considered as an option … but we (may also) decide to let it pass when the PPM (Post Program Monitoring of the IMF) ends April next year," the source explained.

The Philippines has been a member of the IMF since December 27, 1945. According to the IMF mid2006 PPM report released last September 27, PPM will expire on April 2007. By that time, the outstanding credit to the IMF will fall to below ten percent of quota.

Based on IMF projections (as of September) the remaining Philippine credit outstanding with the multilateral agency is $ 223.9 million or 17.2 percent of quota; for 2007 its $ 31.4 million or 2.4 percent of quota; and for 2008-2009 zero.

Prepayment sends a positive signal to the market that one, stock of debt is going down; two, the government is saving on interest payments; and lastly that the government is now more than capable of settling its foreign exchange obligations. As of June 2006, the country’s external debt is lower at $ 53.9 billion.

This month the BSP is prepaying another $ 215 million term loan facility, its third this year. Tetangco said the country has "enough external liquidity" and that the prepayment will allow the central bank to save on interest payments. The BSP first prepaid a 0-million obligation last April that was due last October. Also in October, it announced it was prepaying $ 460-million worth of loans and notes.

marites4

November 13th, 2006, 01:29 AM

RP growth can’t be ignored — Palace
By Paolo Romero
The Philippine Star 11/13/2006

Malacañang chided its critics yesterday for refusing to acknowledge the country’s economic gains brought about by the Arroyo administration’s fiscal reforms.

Press Secretary Ignacio Bunye said the international financial community has already taken notice of the Philippines’ economic growth, with some foreign institutions taking steps to further strengthen the country’s investment climate, including upgrades in credit ratings and outlooks.

"Our drive for economic strength and social justice has not escaped the eyes of the international community," Bunye said.

"It seems that the economic turnaround, under the Arroyo administration, is now an international open secret. Only the most rabid detractors of the President still don’t know about it," he said.

Mrs. Arroyo on Saturday said the economic growth did not happen by chance, even as she vowed to finally break the boom-bust cycle, which has characterized the country’s economy for the past decades.

Citing latest reports, Bunye said the international media have noticed that the country’s average gross domestic product (GDP) growth has been higher than at any time since 1961 to 1965, when the Philippine economy was second to Japan.

He said the country’s inflation rate remains stable amid the volatile prices of crude oil in the world market.

Job creation has "been the best for decades" while the continued surge in the stock market as well as the steady appreciation of the peso all reflect the confidence of investors in the country, Bunye said.

Bunye pointed out the recent assessment of the Business Times of Singapore is typical of the new international image of the Philippines.

"With the fiscal deficit and public debt heading downwards, infrastructure spending going up, and investor confidence returning, the Philippines has its best chance since the 1960s to stake a claim to being a player in Asia’s economic renaissance," Bunye quoted the news report.

National Security Adviser Norberto Gonzales said opposition leaders and critics have been opposing practically every reform measure initiated by Mrs. Arroyo.

He claimed critics do not want the President to succeed even if the programs are urgently needed and would benefit the people.

Gonzales said opposition political leaders actually agree with the economic reforms being undertaken by the administration but they do not want her to take credit for the positive results.

"They (political opponents) do not want her to succeed in her economic and political reforms because it would make her look good and even ensure that the administration would continue to be in government," he said.

"What they want is to remove her and install themselves so they would be the one to take credit."

Gonzales claimed an opposition senator, after a heated debate during a public hearing, had approached him and privately acknowledged the economic reforms of Mrs. Arroyo but pointed out his job is to criticize the President.

Meanwhile, Gonzales’ Partido Demokratiko Sosyalista ng Pilipinas (PDSP) urged Malacañang to address what they called "flawed investment policies and glaring education-labor mismatch" that prevents the economic gains from being felt fully by the youth sector, particularly new college graduates.

The Demokratiko Sosyalistang Kabataan ng Pilipinas (DKSP) said youth unemployment rate in the country has reached an alarming figure despite the growing economy.

Michael Eric Castillo, head of the education and program committee of the DSKP, pointed out that as of July this year, half of the 2.91 million unemployed are in the 15 to 24 age group.

Castillo made the statement in reaction to a recent report of the International Labor Organization that youth unemployment is on the rise in developing countries, including the Philippines.

The report said the number of jobless youth is highest in Metro Manila and Southern Tagalog provinces.

Castillo said the unemployment rate has been on the rise even if the economy posted respectable GDP growth at 5.5 percent in the 2nd quarter of 2006.

Last year, only 700,000 jobs were created while 1.29 million new workers joined the labor market, which meant a shortage of 590,000 jobs in just one year, he said.

While the government’s policies have led to the country’s economic growth, Castillo said the economic programs do not necessarily promote labor-intensive investments.

"It is also ironic that youth unemployment is highest in Metro Manila and Southern Tagalog. These areas regularly post higher income compared to other regions. It is also in these areas where most of the investment parks and Special Economic Zones are located," he said.

The poor quality of education also contributed significantly to youth unemployment. This is because few workers possess the right competencies for the available jobs, indicating education-employment mismatch, Castillo pointed out.

He said degree-granting colleges and universities produce some 350,000 graduates annually but only 20 percent of these find jobs.

On the other hand, 60 percent of the 1.3 million graduates of vocational courses find employment.

Rajah_Soliman

November 13th, 2006, 01:51 AM

this seems to be true...... "walang ko-contra ha!!!!" :lol: :lol: :lol:

RP growth can’t be ignored — Palace
By Paolo Romero
The Philippine Star 11/13/2006

National Security Adviser Norberto Gonzales said opposition leaders and critics have been opposing practically every reform measure initiated by Mrs. Arroyo.

He claimed critics do not want the President to succeed even if the programs are urgently needed and would benefit the people.

Gonzales said opposition political leaders actually agree with the economic reforms being undertaken by the administration but they do not want her to take credit for the positive results.

"They (political opponents) do not want her to succeed in her economic and political reforms because it would make her look good and even ensure that the administration would continue to be in government," he said.

"What they want is to remove her and install themselves so they would be the one to take credit."

marites4

November 13th, 2006, 02:28 AM

Yeah speaking of the devil , I just saw them in the news , no doubt planning another attack. Binay, LOi and unggoy Estrada, TAtad, Susan roces and low and behold sitting next to them is senile TITO GUIngona. He forgot which side he's on. Make me sick as if they're any better and corrupt free.
THese politicos who are they fooling ,they're all the same feathers they care not about the economy or the welfare of the squatters.
OUR kind of POLITICIANS is the number one reason that always holds us back.

sandrn

November 13th, 2006, 02:34 AM

Yeah these zilch head politicians should be jailed. Wala silang karapatan umupo sa puesto dahil ilulubog lang nila sa kabobohan at kababuyan and Pilipinas.
Ang kapal ng mga mukha!
Yuck, Yuck, Yuck Kadiri sila.

DoggMann

November 13th, 2006, 04:08 AM

http://www.mb.com.ph/BSNS2006111379497.html

Investments grow 33% in first 10 months this year

By BERNIE CAHILES-MAGKILAT

Investments hauled by the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) in the first ten months this year soared P219.88 billion, reflecting a 33 percent increase from P165.67 billion in the same period last year.

Trade and Industry Acting Secretary Elmer C. Hernandez, who is also managing head of the BoI, said the strong investments inflow is indicative of a strong economic turnaround.

"Our fiscal reforms are paying off and these have boosted investors confidence for the country. We are upbeat," Hernandez said.

There were 568 projects registered by the BoI and PEZA or 17 percent more than 486 projects approved in the first ten months last year. Investments are measured by the cost of registered projects. Once fully operational, these projects are expected to generate 112,163 jobs or 19 percent higher than 94,721 jobs from the projects registered in the same period last year.

Of the total investments, the BoI generated the bulk of P153.42 billion or 29 percent higher than the P119 billion in the same period last year.

On the other hand, PEZA contributed P66.46 billion or 42 percent more than P46.67 billion investments inflow in the same period last year.

Local investors contributed the bulk of the total investments with P135.3 billion or 36 percent increase over P99.5 billion in the January-October last year. Likewise, foreign equity investments were up 28 percent to P84.6 billion from P66.2 billion in the comparative period last year.

In terms of nationality, the Americans overtook the lead from the Japanese as the country’s foremost investors.

American investments in the registered projects for the periodreached P35.18 billion more than double the P12.96 billion investments last year while Japanese investments slipped to P18.05 billion from P26.38 billion last year.

The infrastructure sector receives the highest investments with P93.51 billion as against P59.21 billion investments in this sector in the first ten months last year.

The manufacturing and services sector received P100.35 billion in investments lower than the P111.14 billion investments in the January-October last year.

The manufacturing projects are mostly engaged in electronics business and are mostly owned by Japanese firms.

The IT sector registered a good show with 56 percent increase in investments inflow to P12.91 billion from only P8.29 billion in the same period last year. There were 107 IT projects registered for the period.

"This is very significant because the IT investments are going into software development and business process outsourcing operations which have higher value added than mere call center operations," Hernandez said.

Hernandez further said the government’s IT missions abroad are also paying off with the continuing entry of IT companies in the country.

The major projects approved in the first ten months was led by GN Power Ltd. Co., a Naru-registered firm, which proposed to put up its second power project for a 600-megawatt coal fired power plant in the country at a cost of P43.9 billion.

Other major projects include the 3 –G projects of Smart Telecommunications (P33.178); Globe Telecom Inc. (P5.48 billion) and DigitaI Mobile (P6 billion); Upland Banana (P4.6 billion); San Carlos BioEnergy Inc. (P2.28); and Lepanto Consolidated Mining (P3.3 billion).

Based on the trend of investments inflow, the BOI and PEZA are expected to attain the targeted P250 billion investments for this year, which is 10 percent higher than last year’s total investments inflow.

The government is vigorously promoting investments in ten priority sectors such as mining, electronics, health and wellness, fashion jewelry, garments, IT, and infrastructure and automotive.(BCM)

marites4

November 13th, 2006, 04:19 AM

Malacañang chided its critics yesterday for refusing to acknowledge the country’s economic gains brought about by the Arroyo administration’s fiscal reforms.

Press Secretary Ignacio Bunye said the international financial community has already taken notice of the Philippines’ economic growth, with some foreign institutions taking steps to further strengthen the country’s investment climate, including upgrades in credit ratings and outlooks.

"Our drive for economic strength and social justice has not escaped the eyes of the international community," Bunye said.

"It seems that the economic turnaround, under the Arroyo administration, is now an international open secret. Only the most rabid detractors of the President still don’t know about it," he said.

Mrs. Arroyo on Saturday said the economic growth did not happen by chance, even as she vowed to finally break the boom-bust cycle, which has characterized the country’s economy for the past decades.

Citing latest reports, Bunye said the international media have noticed that the country’s average gross domestic product (GDP) growth has been higher than at any time since 1961 to 1965, when the Philippine economy was second to Japan.

He said the country’s inflation rate remains stable amid the volatile prices of crude oil in the world market.

Job creation has "been the best for decades" while the continued surge in the stock market as well as the steady appreciation of the peso all reflect the confidence of investors in the country, Bunye said.

Bunye pointed out the recent assessment of the Business Times of Singapore is typical of the new international image of the Philippines.

"With the fiscal deficit and public debt heading downwards, infrastructure spending going up, and investor confidence returning, the Philippines has its best chance since the 1960s to stake a claim to being a player in Asia’s economic renaissance," Bunye quoted the news report.

cONSIDERING SINGAPORE is our no. 1 critic ,but we don't need their reaffirmation anyway since they've never had anything good to say about the PI. They even have an economic magazine which includes all the SE asian countries except the PHILS. what a slap in the face.

National Security Adviser Norberto Gonzales said opposition leaders and critics have been opposing practically every reform measure initiated by Mrs. Arroyo.

He claimed critics do not want the President to succeed even if the programs are urgently needed and would benefit the people.

Gonzales said opposition political leaders actually agree with the economic reforms being undertaken by the administration but they do not want her to take credit for the positive results.

"They (political opponents) do not want her to succeed in her economic and political reforms because it would make her look good and even ensure that the administration would continue to be in government," he said.

"What they want is to remove her and install themselves so they would be the one to take credit."

Gonzales claimed an opposition senator, after a heated debate during a public hearing, had approached him and privately acknowledged the economic reforms of Mrs. Arroyo but pointed out his job is to criticize the President.

Meanwhile, Gonzales’ Partido Demokratiko Sosyalista ng Pilipinas (PDSP) urged Malacañang to address what they called "flawed investment policies and glaring education-labor mismatch" that prevents the economic gains from being felt fully by the youth sector, particularly new college graduates.

The Demokratiko Sosyalistang Kabataan ng Pilipinas (DKSP) said youth unemployment rate in the country has reached an alarming figure despite the growing economy.

Michael Eric Castillo, head of the education and program committee of the DSKP, pointed out that as of July this year, half of the 2.91 million unemployed are in the 15 to 24 age group.

Castillo made the statement in reaction to a recent report of the International Labor Organization that youth unemployment is on the rise in developing countries, including the Philippines.

The report said the number of jobless youth is highest in Metro Manila and Southern Tagalog provinces.

Castillo said the unemployment rate has been on the rise even if the economy posted respectable GDP growth at 5.5 percent in the 2nd quarter of 2006.

Last year, only 700,000 jobs were created while 1.29 million new workers joined the labor market, which meant a shortage of 590,000 jobs in just one year, he said.

While the government’s policies have led to the country’s economic growth, Castillo said the economic programs do not necessarily promote labor-intensive investments.

"It is also ironic that youth unemployment is highest in Metro Manila and Southern Tagalog. These areas regularly post higher income compared to other regions. It is also in these areas where most of the investment parks and Special Economic Zones are located," he said.

The poor quality of education also contributed significantly to youth unemployment. This is because few workers possess the right competencies for the available jobs, indicating education-employment mismatch, Castillo pointed out.

He said degree-granting colleges and universities produce some 350,000 graduates annually but only 20 percent of these find jobs.

On the other hand, 60 percent of the 1.3 million graduates of vocational courses find employment.[/QUOTE
oopps i made an error

beads_strawberries

November 13th, 2006, 07:04 AM

As news reports said, investments inflows went up to 33% this October. Aside from this, our bullish stock market, continuous flow of OFW remittances and stronger peso keep us going forward.

All of these economic gains could be translated for the benefit of the people through programs in line with super regions projects such as infrastructures, research and development and information technology sector.

chixbebe

November 13th, 2006, 11:42 AM

Investments hit P219.88b in 10 months

Combined investments registered with the Board of Investments and the Philippine Economic Zone Authority reached P219.88 billion in the first 10 months of the year, up 32 percent from P165.67 billion a year ago.

BoI-registered projects grew to P153.42 billion, 29 percent higher than the P119 billion posted last year, while Peza-registered projects went up 42 percent to P66.46 billion from only P46.67 billion.

“We are still upbeat. There is continued confidence. Government’s fiscal measures are paying off because these have increased investor confidence,” said Trade and Industry Undersecretary and officer-in-charge Elmer Hernandez.

The two agencies have expected combined investments to hit over P250 billion at year-end.

heathcliff

November 13th, 2006, 12:18 PM

Mrs. Arroyo reiterated that P22 billion was slashed from next year’s interest payments for foreign debts. The savings were allocated for education (P16 billion), health services (P5 billion) and social welfare (P1 billion).

This is good. Because of its fiscal gains, the government can appropriate more money to making the country's eco gains felt by ordinary Filipinos.

aranetacoliseum

November 13th, 2006, 05:24 PM

galing talaga ni ARROYO!!!

ikra

November 13th, 2006, 06:12 PM

hehehehe... yep her hard work, and the filipinos hard work to... to the ofw's, those honest government officials and such :)

marites4

November 14th, 2006, 12:18 AM

Yep there are some few honest govt. officials. Hats off to them and multiply their tribe. LIke my deceased aunt who has an honest govt. worker ,never stole a penny. She was poor considering she was the chief budget officer of the court of appeals. As far as hardworking i don't know about that cause I always found them taking naps during office hours or off to Robinson's mall window shopping.

sandrn

November 14th, 2006, 02:29 AM

You know what the truth was?
The bogus Risk Analysis of Foreign Financial Institutions (ex. Morgan Stanley sharks and the likes) is more destructive to RP economy than the “perceived exaggerated risks” that these institutions had identified. The risk analysts of these foreign financial institutions would enumerate a checklist of “supposed to be risks” they gathered from hell knows where. The media and more hearsay, perhaps. They don’t even know the real situations inside RP. They’d been sitting on a leather couch in a foreign place while analyzing RP’s risks. Their scare tactics were bought by the foreign investors since the late 80's. See how they painted the Philippines as a risky country to do business since 1986 and onwards. The Philippine economy plunged deeply when the number of foreign investments shunned RP and many manufacturing facilities closed down and refused to invest. This to the delight of other Asian countries hungry for foreign investments. Our lost, their gain. A valid reason why we should hate the foreign financial institutions, and get back at them, and slap them with money.

On the lighter side of things, one smart movie that tackles the perils of risk analysis is the Hollywood film “Along Came Polly” which starred Ben Stiller and Jennifer Anniston. Although the risk analysis exposed in the movie focused on the risks within the insurance industry, at least you get a picture of how it’s done by a company’s risk analyst. It is the same regardless of the kind of industries, whether financial or not. Watch this movie and see how stupid risk analysis really is. It is one scare tactic used by the foreign financial institutions that destroyed the Philippine Economy. Now, let us show them that they may be successful in trashing our country then, but they could never destroy us. Now bring them on! Let’s fight!

http://www.alongcamepolly.com/images/ACP-keyart.jpg

marites4

November 14th, 2006, 02:48 AM

sandrn

November 14th, 2006, 02:55 AM

v ...it got lost on the previous page and I would julst like to reiterate how they ruined the RP economy!

You know what the truth was?
The bogus Risk Analysis of Foreign Financial Institutions (ex. Morgan Stanley sharks and the likes) is more destructive to RP economy than the “perceived exaggerated risks” that these institutions had identified. The risk analysts of these foreign financial institutions would enumerate a checklist of “supposed to be risks” they gathered from hell knows where. The media and more hearsay, perhaps. They don’t even know the real situations inside RP. They’d been sitting on a leather couch in a foreign place while analyzing RP’s risks. Their scare tactics were bought by the foreign investors since the late 80's. See how they painted the Philippines as a risky country to do business since 1986 and onwards. The Philippine economy plunged deeply when the number of foreign investments shunned RP and many manufacturing facilities closed down and refused to invest. This to the delight of other Asian countries hungry for foreign investments. Our lost, their gain. A valid reason why we should hate the foreign financial institutions, and get back at them, and slap them with money.

On the lighter side of things, one smart movie that tackles the perils of risk analysis is the Hollywood film “Along Came Polly” which starred Ben Stiller and Jennifer Anniston. Although the risk analysis exposed in the movie focused on the risks within the insurance industry, at least you get a picture of how it’s done by a company’s risk analyst. It is the same regardless of the kind of industries, whether financial or not. Watch this movie and see how stupid risk analysis really is. It is one scare tactic used by the foreign financial institutions that destroyed the Philippine Economy. Now, let us show them that they may be successful in trashing our country then, but they could never destroy us. Now bring them on! Let’s fight!

http://www.alongcamepolly.com/images/ACP-keyart.jpg

sandrn

November 14th, 2006, 03:00 AM

that is very true, it's almost like they can blacklist you if you're the country of the decade, and so the stigma and reputation sticks which can be difficult to reverse. I remember some foreign banks specially those based in Singapore predicting the peso to hit an all time low 60 visavis dollar by year end. And our colonial mentality takes their forecasts as bible truth.
Remember that we must never trust them. They will do anything to paint a grim picture of our economy to their advantage. It's the only weapon they have to get ahead. They'd done it before and they will do it again and again.

Noticed that when the Peso started gaining against the US dollar, they started trying to paint a grim picture again that the Peso's rise is bad for the Philippines.
They seem to worsten any negative reports, and the positive ones they would try to look for loopholes which is nothing but false.
To hell with them!

chixbebe

November 14th, 2006, 10:41 AM

It all over the news today that our bad debts dropped to 7.43% in September. Bad debts held by local commercial banks dropped to 7.43 % of total loans at the end of September from 7.54 % in August and 9.44 % a year earlier coming from BSP.

The industry’s non-performing assets (NPA) ratio, which includes non-performing loans, property and other assets, fell to 7.68 percent in September from 7.78 percent the previous month and from 9.19 percent a year ago.

Tetangco said the lower non-performing loan (NPL) ratio was due to the decline in both the stock of NPLs and a small increase in loan portfolio.

adverg

November 14th, 2006, 11:29 AM

Ewan ko ba bakit kasi pinagdidikdikan nung iba na sila ang tama at di si Arroyo, the truth has come along the way, whether we like it or not it is time for us to move forward disregard of our personal interest. If I can recall some of my post before, this is the answer to this issue right now, those who opposed to the administration is not really aiming for the welfare of the whole Filipino people but for their own personal interest. As to the claimed by adviser Norberto Gonzales, he is definitely true, they (opposition) agreed to the programed design by Arroyo but they cannot accept that Arroyo who received the credit of it. They are afraid that Arroyo would continue this missions until 2010 because if this will fulfill until that time, result will eventually comeout and that is the basis that the poisoned mind of every Filipino will divert into new visions and awake that they or we must support the government implementing it because it is for all our sake. And that is the worst moment that they(oppositions) don't. want to happen since if it will happen that is the end of they're happy days. A simple phrase, Arroyo who hardly planted the seeds, and when it grows and time to harvest, they (oppositions) are the one who want to get the blessings. Think about it.....

adverg

November 14th, 2006, 11:37 AM

@ Sandrin
Seems you got the right point on that, I already highlighted it but some opposed me but I cannot blame them coz I have no basis also. But I am strongly believed, our country is cursed not by superstitious power but cursed by physical power, please think it again.....

dancethingy

November 14th, 2006, 12:44 PM

OtAkAw

November 14th, 2006, 01:55 PM

Remember the chant sa Ghostfighter on GMA7???

Yung

TAPUSIN! TAPUSIN! TAPUSIN!!!!

I say, isigaw natin yan sa lahat ng opposition na wala ng ginawa kungdi magpaka-aswang! Kudos to Mrs. Arroyo, turns out she's right all along, and her allies and advisers as well.

beads_strawberries

November 15th, 2006, 09:20 AM

I love watching Ghostfighter. lol

The World Bank recently upgraded the country's growth forecast which shows another positive outlook for us. This optimism shows as US businessmen continue to visit the country in contemplation of investing here in the Philippines.

Hopefully we'll reach our fiscal targets.

chixbebe

November 15th, 2006, 09:53 AM

Indeed. That raise only proves that with the help of resources and talents, we can still achieve progress and economic stability.

heathcliff

November 16th, 2006, 10:30 AM

That's why i think its great that Arroyo herself and her economic team are travelling the globe to sell the philippines. I think we need to reach out to investors ourselves and try to combat all those negative images financial institutions are trying to convey. We as Filipinos abroad should try to dispell this crazy image as well. Many in Asia looked to us with envy during the post WW2 and when we tripped they gained.

I agree. We can still recover and even surpass our former glory. We just have to get up from wallowing and not let the doomsayers convince us that our country is hopeless.

It's also not just the government's duty to polish up the image of the country. It's the duty of each Filipino who loves the Philippines to correct the false impressions of people of other countries about us.

mygz14

November 16th, 2006, 03:45 PM

SOURCE: http://www.gmanews.tv/business.php?sec=3&id=21136

Article posted November 16, 2006, 3:20 pm

For a change, the Philippines has a rare, if probably good, problem: How to spend money fast, rather than how to earn more of it.

Economic managers said Thursday the government has to spend P47 billion in the next six weeks, before the year ends, after the supplemental budget was approved by Congress. Otherwise, the unutilized funds will have to revert to the national coffers.

Finance Secretary Margarito B. Teves told reporters that revenue collections remained strong in October, despite the failure of the Bureau of Internal Revenue (BIR) to meet its internal monthly collection target.

Budget Secretary Rolando Andaya Jr. said his department was looking at an additional P14-billion allotment for local government units.

In order to use up the rest of the supplemental budget, Andaya said the government has also decided to settle part of the government's arrears with the Government Service Insurance System (GSIS) amounting to P6 billion.

Also under consideration was the possible front-loading of the P6-billion guarantee for the Home Guarantee Corporation and the P1-billion allocation for airport and aviation development programs.

"These are all items already in the budget," said Andaya. "We'll have to spend on them one way or the other so it might as well be funded out of the supplemental budget."

"My marching orders are to spend," Andaya said. "I just have to keep in mind that P105-billion ceiling. As long as the deficit stays at that level, we're good."

The finance department reported that the government spent P23.3 billion on debt service in October, rounding up the cumulative 10-month total to P277.8 billion, compared to last year's P267 billion.

Excluding debt service expenses, Teves said the government generated what is known as a primary surplus amounting to P17.5 billion.

This was an indication that excluding debt services, public spending was kept well within the government's capacity to finance out of internally-generated revenues. - GMANews.TV

kiretoce

November 16th, 2006, 03:52 PM

^^ They should spend it on....

01. Education intiatives
02. Healthcare solutions
03. Infrastructure projects
04. Charitable organizations

marites4

November 16th, 2006, 05:10 PM

right^^
They shouldn't have a problem on how to spend it as there are countless areas need upgrading and improvement as long as it doesn't go to their pockets. Why don't they use it to pay down our govt. devt, less interest to pay next year or use it to repair Naia 3. Or the shitty domestic airport.

Sinjin P.

November 17th, 2006, 08:55 AM

SM reopens doors in Guam

By MA. Stella F. Arnaldo
Special to BusinessMirror

AN SM Store will reopen its doors Friday, November 17, at the Agana Shopping Center in Guam.

In an exclusive interview with BusinessMirror, Elizabeth Sy, president of GFPP Inc., which does business as Agana Shopping Center, said, “SM Department Store has been a success in the Philippines; a trend we expect will continue in Guam. Our goal is to continue our long-standing tradition in providing our customers with the best fashion, value, quality and service in diverse market and become the store of choice in Guam.”

Henry Sy Sr., SM founder and patriarch of the Sy family, graced the blessing and ribbon-cutting ceremony on Thursday, along with his children, Tessie, vice chairman of SM Investments Corp. (SMIC), and Elizabeth, who is also senior vice president of marketing for SM Prime Holdings. Guam officials and key judges, business leaders, senators, business partners and organization heads, graced the event.

Jorge Mendiola, senior vice president for SM Inc., expressed confidence the department store will be able to compete head on with the larger retailers on Guam, such as Macy’s, Ross and DFS Galleria. “Because of our experience in the Philippines, we believe we can offer the right assortment [of goods] both to locals and tourists.”

About 30 percent of the population on Guam trace their roots to the Philippines. The local Chamorro population, especially those who come to Manila regularly for business meetings, medical checkups and treatments, are also familiar with the SM brand.

Mendiola said the department store will basically just offer “dry goods” to the shopping public and will not unduly compete with the Guam retailers in the shopping mall, like Payless. The SM Group also owns the Agana Shopping Center.

Besides its own brands, the SM Store will carry known Filipino brands like Freego, Urban Wear, Hawk, Parental Advisory, IZOD, Napoleon, among others, while those from the US will be Roxy, XOXO, Nine West, Kenneth Cole, Calvin Klein, Levi’s, Jones of New York, said Ms. Sy.

The SM Group was one of the earliest Filipino investors on Guam and operated a shoe store in the 1970’s. “We earlier had a store in Guam which we closed and we planned to revive it when we renovated the [Agana Shopping] mall,” Mendiola said.

beads_strawberries

November 17th, 2006, 09:19 AM

BSP announced that we attained a balance of payments surplus of $3.155 billion in the first 10 months of the year. Said surplus is 37 percent higher from the previous $2.304 billion earlier recorded.

Now, that seems to be another indicator that keeps foreign investments coming in.

heathcliff

November 17th, 2006, 10:41 AM

Remember that we must never trust them. They will do anything to paint a grim picture of our economy to their advantage. It's the only weapon they have to get ahead. They'd done it before and they will do it again and again.

Noticed that when the Peso started gaining against the US dollar, they started trying to paint a grim picture again that the Peso's rise is bad for the Philippines.
They seem to worsten any negative reports, and the positive ones they would try to look for loopholes which is nothing but false.
To hell with them!

Not much different from our own political opposition who put faith in all bad news coming from foreign institutions/entities but find loopholes in or totally disregard the good news. The only difference is that it's more unpardonable because they are our own countrymen who try to depress the country's prospects so they can use it as propaganda against the administration.

MarkiiBoi

November 17th, 2006, 10:49 AM

IMF upgrades RP growth outlook

The International Monetary Fund (IMF) said Friday it expected the Philippine economy to grow at an annual rate of 5.5 percent this year and 5.75 percent in 2007, upgrading its previous forecasts.

In a mid-year assessment, the IMF had previously said annual economic growth in the Southeast Asian country was likely to be 5 percent this year and 5.5 percent in 2007

shadow_can2003

November 17th, 2006, 01:27 PM

metrosuburban

November 17th, 2006, 06:52 PM

nobody wants to listen to them anyway, hindi naku naniniwala sa 2 yan, mali-mali naman talaga sila magforecast eh...

Lili

November 17th, 2006, 09:55 PM

^^ They should spend it on....

01. Education intiatives
02. Healthcare solutions
03. Infrastructure projects
04. Charitable organizations

I believe they should pay first arrears in debt servicing. This way, those interests and surcharges will stop growing.

sandrn

November 20th, 2006, 03:51 AM

Bad loan ratio improves as of Sept.
http://www.manilatimes.net/national/2006/nov/14/yehey/business/20061114bus3.html
By Maricel Burgonio, Reporter

The Bangko Sentral ng Pilipinas (BSP) reported some improvements in bad loan ratio of universal and commercial banks (U/KBs) as of end-September owing to the decline in nonperforming loans (NPL).

The NPL ratio of U/KBs declined by 0.11 percentage point to 7.43 percent in September this year from 7.54 percent in August, the BSP said.

Reduction in NPL ratio reflects the industry%u2019s improvement in asset quality, with banks disposing of bad assets through special purpose vehicle (SPV) or public auction.

BSP said the extension of the implementation of SPV law could further dispose of bank%u2019s bad assets of more than P100 billion.

SPV aims to encourage financial institutions to get rid of bad assets to create liquidity that can be used to generate economic growth and rehabilitate businesses in distress.

According to the BSP, the NPL ratio posted significant decline year on year by 2.01 percentage points at 9.44 percent in September last year.

The banking sector also saw drop in NPL level by 0.83 percent to P143.10 billion in September this year from P144.30 billion the previous month.

On the other hand, total loan portfolio (TLP) climbed by 0.60 percent to P1.925 trillion in September from last months P1.914 trillion.

Banks%u2019 real and other properties acquired (ROPA) ratio tapered off by 0.05 percentage point to 4.45 percent in September from 4.50 percent last month, with ROPA stocks standing at P184.97 billion. This is a drop to P186.13 billion last month from P200.15 billion a year ago.

Total nonperforming assets (NPA) ratio, which composed of NPL and ROPA, also slide by 0.10 percentage point to 7.68 percent in September from 7.78 percent the previous month.

The BSP also observed drop in total NPAs to P318.24 billion in September from last month%u2019s P320.75 billion.

It added that banks%u2019 past due ratio went up to 8.20 percent from 8.10 percent with total past due loans and items in litigation increasing to P159.09 billion from P156.18 billion a month ago.

beads_strawberries

November 20th, 2006, 08:01 AM

News averred that RP exports are reportedly set to be up by 45B next year. More so, remittances are seen to rise continuously to 14.1B next year according to Bangko Sentral ng Pilipinas.

Despite a trend of global economy slowing down, we still expect these positive gains. It just goes to show that the economy is gearing towards stability.

chixbebe

November 20th, 2006, 10:29 AM

Third quarter GDP expected to be ‘good’

The government expects good economic growth for the third quarter as companies posted positive income for the first nine months of the year, a ranking official said over the weekend.

"I think they are good, corporate profits being what they are," said Dennis Arroyo, National Economic and Development Authority assistant director for national planning and policy staff.

In an interview with reporters at the sidelines of the Eagle forum in Ateneo, Arroyo said all indicators point to a good third quarter gross domestic product (GDP).

Although he declined to give an estimate, Arroyo said the 4.9-percent to 5.3-percent forecast of the Ateneo Graduate School of Business may be reached. "With the positive development, I can see that happening," he noted.

Arroyo said exports and consumption are among the drivers of the GDP.

In fact, the export market has overperformed this quarter. The government only expected exports to grow eight percent but actual numbers doubled the forecast figure at 16 percent. Arroyo said exports have been growing strongly with electronics making up 64 percent of total exports.

On the consumption side, Arroyo said the government expects it to remain healthy as Filipinos continue to move abroad for work.

"The OFW (overseas Filipino workers) market will drive consumption. I think it is steady," he noted.

Arroyo said that as of latest count, OFW inflows are up 14.4 percent, substantially, above the government’s expectation of 10 percent.

The increased remittances from OFWs has resulted in the construction of more SM malls.

Currently, SM has 29 stores nationwide. Arroyo said by 2007, the Sy family plans to put up four to five more malls and that same number every year thereafter.

"This is fed by the OFW phenomenon," Arroyo explained.

However, Arroyo noted that the government’s supplemental budget will have no effect on the third quarter GDP.

"It may be felt on the fourth quarter but the budget doesn’t stress on construction and infrastructure but for spending for teachers," he explained.

chixbebe

November 22nd, 2006, 10:44 AM

Exporters urged to focus on China
By Ma. Elisa P. Osorio
The Philippine Star 11/22/2006

Local exporters should shift their focus from the US to China as a possible market for their goods to help counter the expected slowdown in American consumption next year, a top economist said.

"East Asia is doing well so there must be a re-orientation of exports towards East Asia," Intal said. "The US market is not as critical."
According to the data from the National Statistics Office, the United States remains the largest consumer of Philippine exported products with almost 20 percent of the country’s total exports bought by American consumers.

For his part, Raul V. Fabella, dean of the University of the Philippines School of Economics said the exporters must likewise re-consider their exports from manufactured goods to agricultural products.

"There will be hallowing out of manufacturing in the Philippines because of Chinese manufacturers. They have to move to a niche area to survive," Fabella noted.

However, he said the country can take advantage of the growing demand for food in China.

"The Chinese market will be needing agricultural products and a lot of food," he said.

Unfortunately, Fabella noted that the country has failed to take advantage of the situation by exporting food and agriculture products to China.

"We haven’t been able to get our act together in terms of agriculture," Fabella pointed out.

According to him, the country has lost so much opportunity. "We have to get our act together in food production especially in high value products like fruits."

marites4

November 22nd, 2006, 06:12 PM

Can you imagine two billion mouths eating rice daily. That's alot of rice.

TheAvenger

November 22nd, 2006, 07:01 PM

deleted

TheAvenger

November 22nd, 2006, 07:07 PM

Can you imagine two billion mouths eating rice daily. That's alot of rice.

that's a lot of profits for capitalist rice exporter. however it seems it will be cheaper for china to buy rice from california since the americans can produce
rice at less cost than here in Pinas. that's why before we usually import California rice.

Globalization and trade liberalization is more favorable to the 1st world than to us from the 3rd world or the lost world.

marites4

November 22nd, 2006, 07:35 PM

No, i think they now import most oftheir rice from Thailand and Vietnam.

heathcliff

November 23rd, 2006, 07:33 AM

Palace issues clarification on micro-finance (http://www.manilastandardtoday.com/?page=business2_nov23_2006)
By Lawrence Agcaoili

Malacañang has issued an executive order addressing the concerns of the private sector as well as multi-lateral lending agencies in the implementation of the government’s micro-finance program.

Finance Secretary Margarito Teves told reporters yesterday that President Gloria Macapagal Arroyo had signed Executive Order 558-A clarifying the overall framework in the implementation of government credit programs contained in EO 558 issued on Aug. 8.

“We have addressed the concerns of our stakeholders, the microfinance institution and agencies implementing the microfinance programs,” Teves said.

Under the new EO, credit programs to be implemented under the auspices of EO 558 will support the poverty alleviation thrusts of the government and focus only on the municipalities and barangays identified by the People’s Credit and Finance Corp.

These are areas where there are no identified and available participating financing institutions such as banks, cooperatives, and non-government organizations that serve the needs of the poor and the marginalized sectors of the economy.

Teves said the Department of Social Welfare and Development would immediately implement and provide necessary credit assistance and other support services in the unserved areas.

...

It is true that it's very difficult to obtain loans in many areas in the Philippines, although there are also many capable would-be entrepreneurs but they are hindered by the inaccessibility of funding.

The credit programs to be implemented under EO 558 will apparently focus on those areas identified by the People's Credit and Finance Corp. So that would allay apprehensions of non-payment by the loan beneficiaries.

3cr

November 23rd, 2006, 10:22 AM

Price-fixing probe tags PSALM as the culprit
By Euan Paulo C. Añonuevo
Manila Times
http://www.manilatimes.net/national/2006/nov/23/yehey/business/20061123bus4.html

The Market Surveillance Committee of the Philippine Electricity Market Corp. (PEMC) has tagged the Power Sector Assets and Liabilities Management Corp. as the culprit behind the high-price movements at the Wholesale Electricity Spot Market (WESM).

In its investigation, the MSC said PSALM “has behaved anticompetitively and abused market power during peak hours in the billing period August 26 to September 25, 2006, following offers of unusually high, similar price bids on the third month of the WESM’s market operation.”

On confirmation Wednesday from MSC that PSALM has breached trading rules, the PEMC, operator of WESM, immediately ordered a price correction of affected electricity bills in the third and fourth billing month since WESM opened.

It also directed the implementation of mitigating measures to safeguard the interests of consumers and to reduce market imperfections arising from the design and structure of trading teams.

But Nieves L. Osorio, PSALM president, said her office has yet to receive a copy of the official report that was released yesterday. “We will study the report as soon as we receive it.”

The higher fluctuation in the price of electricity in the spot market was earlier uncovered by PEMC’s independent MSC, triggering allegations of price manipulation at the local electricity bourse.

To avoid similar incidents in the future, the MSC has pushed for the approval of several measures. These include the transfer of the management and control of at least 70 percent of the total energy output of IPP power plants under contract with the National Power Corp. to IPP Administrators, additional guidelines on acceptable and unacceptable behavior for all trading participants and the accelerated implementation of the universal levy for stranded contract cost and stranded debt.

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PSALM SAID TO HAVE ‘ABUSED MARKET POWER’
Prices found manipulated in power mart
Malaya
http://www.malaya.com.ph/nov23/busi1.htm

The Philippine Electricity Market Corp., operator of the wholesale electricity spot market, said the state-run Power Sector Assets Liabilities and Management Corp. (PSALM) had "abused market power" and manipulated prices in the spot market.

PEMC recommended the transfer of PSALM’s trading responsibilities to the private sector.

PSALM had denied any improper trading. Its president Nieves Osorio said the traders acted in "good faith".

"We are aware that our traders are under tremendous pressure to recover the huge losses incurred during the first two months of WESM operations when the load weighted average prices or LWAP were way below the rates previously approved by the ERC," she added. "We believe that our traders acted in good faith."

"We are reviewing our operations and adopt necessary measures to ensure that WESM will continue to work to allow competition to force cost efficiencies in the power generation business for the benefit of consumers," Osorio said.

PEMC said PSALM had pushed up prices on the wholesale spot market, which opened in late June, during peak hours in the billing period Aug. 26 to Sept. 25.

The agency trades on behalf of plants with a total capacity of 6,000 megawatts, or about half that of the main island of Luzon.

Some of the plants are owned by the National Power Corp (Napocor) and others by privately-owned independent power producers (IPPs) holding contracts with the Napocor.

PEMC recommended that the control and management of at least 70 percent of the IPPs’ energy output be transferred to IPP administrators who should come from the private sector.

"The board is just saying implement the law," PEMC President Lasse Holopainen told Reuters. "The whole point of deregulation is to remove the government from the industry."

A power sector reform law in 2001 provided for the creation of IPP administrators who would contract out and trade the power generated by the IPP-owned plants. But administrators have yet to be named.

PEMC also recommended additional trading guidlines for the mart.

Holopainen said the market would void the average power prices generated in the third and fourth billing month of the market’s operation and use the average price in the second month.

The spot market opened in June with the promise of improved efficiency in the trade of electricity by producers and large distributors including Manila Electric Co.

Osorio said she still has to receive the PEMC official report.

3cr

November 23rd, 2006, 10:32 AM

RP only Asian country in gender-sensitive list
Manila Standard
http://www.manilastandardtoday.com/?page=news5_nov23_2006

THE Philippines is the only Asian country that made it to the top 10 gender-sensitive states in the list of the World Economic Forum released yesterday.

The group ranked the Philippines as sixth most-gender-sensitive after Sweden, Norway, Finland, Iceland, and Germany.

“The Philippines is distinctive as the only Asian country in the top 10,” the group said in a statement.

“The new index assesses countries on how well they are dividing their resources and opportunities among their male and female populations regardless of the overall levels of these resources and opportunities.”

The Philippines scored perfect points in literacy, enrollment in primary, secondary and tertiary schools, healthy life expectancy, and equal professional opportunities.

But the Philippines could do more in the number of women gaining positions in the Cabinet and female politicians getting elected, the group said.

Cabinet Secretary Ricardo Saludo said President Gloria Macapagal Arroyo was pleased with the group’s assessment report.

“President Arroyo is one of only two female heads of state in Asia,” he said. “Gender sensitivity is really important for her and for her administration because she is personally pushing for this.”

Saludo said government efforts to provide equal opportunities and equal access to women were in line with the Philippines’ commitment to meet the United Nations’ Millennium Development Goals, including female empowerment.

The World Economic Forum’s survey covered 115 countries and used publicly available indicators drawn from international organizations for the ranking.

3cr

November 23rd, 2006, 10:35 AM

RP revenues not enough
By Eileen A. Mencias
Manila Standard
http://www.manilastandardtoday.com/?page=business1_nov23_2006

FitchRatings yesterday said the Philippines must increase further its revenues and show a better performance than other developing countries in order to get a credit rating upgrade.

“The Philippines’ short-term story is very good but the medium-term is not quite as positive,” FitchRatings head of Asia sovereigns James McCormack said at the Philippine Economic Society meeting yesterday.

“I wouldn’t anticipate rapid ratings changes because of some medium-term issues that need to be addressed.”

FitchRatings rates 100 countries, with the Philippines having the second lowest revenue to gross domestic product ratio after Costa Rica.

McCormack said the Philippines received a stable outlook in February because of better economic growth numbers, good fiscal performance and positive external accounts that allowed it to pre-pay some of its foreign debt.

“The Philippines’ economic growth outlook continues to be favorable even with the slowdown in the global economy... [but] the deficit of P63 billion [for 2007] may be ambitious and our expectation is that it could be larger than that,” McCormack said.

FitchRatings warned of spending pressures next year after restraining the deficit when Congress failed to pass this year’s budget.

“There are spending pressures here. The President alluded to the need to increase infrastructure but in order to actually undertake that infrastructure spending, revenue has to go up some more,” McCormack said.

“The spending needs are there and it will affect growth because the Philippines, if we compare it to other countries in Asia, the growth performance here has lagged most of the region partly due to low public investment. Investments here relative to GDP is also the lowest in Asia as is its real per capita income growth,” he added.

The Philippines has a foreign currency issuer default rating of BB, similar to that on Azerbaijan, Brazil, Colombia and Costa Rica. Its external finance requirement, in comparison to its foreign reserves, is the second lowest among its peers, next only to Azerbaijan.

McCormack attributed the Philippines’ robust external position to heavy remittance flows that resulted in a current account surplus.

“In order for the rating to move up, the Philippines has to improve over time as it has been doing, but it also has to improve relative to other countries with the same rating level,” McCormack said.

FitchRatings is concerned on how government will raise revenues needed to finance its infrastructure requirements, taking into account that public investment is already low and investment relative to GDP is the lowest in Asia.

FitchRatings said the political arena remained a concern.

“The Charter Change is a distraction. It was why the 2006 budget was not passed. The market sentiment may move up or down depending on the political environment that we expect to be possibly noisy with elections in May,” McCormack said.

3cr

November 23rd, 2006, 10:37 AM

Economic growth seen to be strong next year
By Darwin G. Amojelar and Maricel E. Burgonio, Reporters
Manila Times
http://www.manilatimes.net/national/2006/nov/23/yehey/business/20061123bus1.html

THE Philippine economy will be strong in 2007, but high government debt and low investments hinder improvement in the country’s credit rating outlook, local and foreign economists said Wednesday.

“We see a stronger economy in 2007 than in 2006. The short-term macroeconomy is relatively good,” Felipe Medalla, former socioeconomic planning secretary and economist at the University the Philippines, said during the 44th annual meeting of the Philippine Economic Society.

However, Medalla added that the economic outlook for the long term may not be that good owing to election-related spending in May next year.

In an interview on the sideline of the PES event, James McCormack, Fitch Rating, Inc.’s head of Asia Sovereigns, said “a positive outlook” for the Philippines “is not something we anticipate.”

McCormack also said the country’s fiscal balance is still favorable in the short-term, but deficit goal is at risk owing to the anticipated election spending.

McCormack projected that the country’s gross domestic product (GDP) is likely to grow 5.5 percent next year, but interjected that “since 1990, the Philippines had the lowest investment/GDP ratio in Asia.”

Saying that public infrastructure spending in the Philippines is less than 2 percent of GDP at the same time that interest payments are three times higher than infrastructure spending, he urged for more government spending on infrastructure, besides higher tax revenues, to sustain economic growth in the medium term.

Earlier, Sanjar Dhar, lead economist for the World Bank in the Philippines, said that the big challenge for next year is how the government will behave, spending-wise, in the next election.

“I think it is important to demonstrate even in an election period that the government fiscal targets are respected [and] the efforts of tax administration continue. It is important to maintain good performance through the election period,” Dhar said.

Cielito Habito, economist at the Ateneo de University projected that GDP will grow 4.9 percent to 5.6 percent in 2007, inflation will reach 5.5 percent and unemployment will hit 8.9 percent.

Habito said to sustain growth, the government should improve tax collections and administrations, focus on small and medium enterprises mobilize savings into more productive and satisfactory closure on leadership legitimacy questions.

In addition, McCormack stressed that the Philippines’ “debt ratio should come down relative to the other countries rating level.”

The country has debt-to-gross domestic product ratio of 70 percent in 2005. To post significant progress in economic growth, McCormack said the ratio should fall to 40 percent.

Last February 2006, Fitch upgraded the country’s rating outlook to stable from negative but maintained foreign currency issuer default rating of BB and local currency issuer default rating of BB+.

It will review the country’s sovereign classification in the first quarter of 2007. “Our view will not depend on upcoming elections but based on the medium-term issues,” McCormack said.

For sovereign rating weakness, he cited economic growth prospects and public finances. For sovereign rating strengths, McCormack noted the recent fiscal performance and robust external sector.

Fitch is focusing on public finance, particularly on the revenue collection performance and public spending in the assessment of the country’s fiscal position. The national government has programmed to balance its budget gap in 2008.

The World Bank forecasts Philippine GDP to grow to 5.7 percent next year, higher than its earlier forecast of 5.6 percent. The Philippine government expects GDP to grow by 5.7 percent to 6.5 percent in 2007.

3cr

November 23rd, 2006, 10:41 AM

Competitiveness as an ideology
By Philip M. Lustre Jr.
Manila Standard
http://www.manilastandardtoday.com/?page=business7_nov23_2006

It would seem that the three top offi-cials of the regulatory National Telecom-munications Commission have adopted “enhanced competition” as their mantra.

Commissioner Ronald Solis and deputy commissioners Jorge Sarmiento and Jaime Fortez have often invoked in the commission’s decisions the ultimate need to enhance competition in a telecommunications market that has been largely skewed in favor of the ruling duopoly of Philippine Long Distance Telephone Co. and Globe Telecom.

This is not to say that something is wrong or sinister in the decisions. This is to indicate that competitiveness has assumed ideological dimensions in many decisions and programs of the commission. In a country that has always been accommodating to hordes of rent-seekers masquerading as entrepreneurs, the presence of a mindset shaped by the rigors and demands of competition typifies a fresh wind of change. Competitiveness as a worldview is an extremely demanding animal, but it is most welcome.

Simply stated, competitiveness, as an ideology, is the bedrock of a free market system. An economy cannot profess adherence to free market without considering the necessity to improve the goods and services it produces. Stay competitive or get waylaid—this is the rule of thumb. In short, the compelling need to stay competitive is the only way to assure survival amid the vagaries of the highly volatile global economy.

The emergence of competitiveness as an ideological mooring has been gaining adherents even among the most hard-boiled free marketers for a host of reasons. First, competitiveness is populist. Highly competitive products and services are essentially cheaper than those that are not. Hence, consumer welfare is the primary objective. Second, competitiveness has a bias for change. The requirement for creativity, ingenuity and even expediency just to stay competitive and afloat is tremendous. In most instances, change is the only recourse.

Third, competitiveness requires technological competence. It is inconceivable for any entity desiring to be competitive to forego technological support. It is even very dependent on technology. Fourth, competitiveness is compatible with the world order. In fact, the essence of the current international economic order lies on competitiveness.

Last but not least, competitiveness is utilitarian. It favors many entities but the losers in competitive battles. It eliminates the undesirables, the lazy, the incompetent, and the unimaginative.

Knowing the requirement to make the Philippine information and communications technology sector as competitive as possible, the commission has taken the initiative to put in place by early 2007 an overall competition policy. As explained, the new competition policy would not only curb abuses that are being committed by the big telecommunications carriers on smaller carriers but stop them from dictating their terms to the detriment of millions of users. Consumer benefit is the ultimate goal.

The overall competition policy seeks to create a significant market power regime in the country, where the big telcos would have additional obligations. Moreover, the competition policy would compel carriers to adhere to an interconnection template, mandate them to publish their price offerings before they launch their any service package and institutionalize wholesale of telecommunications services to develop a new set of retailers. The competition policy is undergoing public consultations.

This is not all. The commission is now working to recall unused and underused radio frequencies and pursue the enactment of the separate bills that seek to strengthen and convert the commission into the National Information and Communications Commission and create the Department of Information and Communications Technology. The recall of unused and underused radio frequencies is intended to stop the practice of frequency hoarding, which has affected those legitimate operators, who could not operate because of the unavailability of radio frequencies.

This hoarding has adversely affected consumers because they have to endure limited choices. The State has the right to recall them because it owns them and they form part of its patrimony. By recalling those unused and underused radio frequencies and giving them to legitimate entities for immediate use, consumers would find a more enhanced competitive environment. At the moment, the commission is completing an inventory of all radio frequency holders to determine the entities that have failed to use the previously awarded frequencies, he said.

It would appear that the commission itself has embraced competitiveness as an ideological underpinning in the moves it is taking. However, competitiveness is not a simple state of mind, or a mindset for taking an action. The bigger consideration is that competitiveness is a way of life. When pursued vigorously, it is an ideological framework that could lift the nation from its current economic morass and stagnation.

3cr

November 23rd, 2006, 10:51 AM

No change in RP rating outlook — Fitch
By Ma. Elisa P. Osorio
The Philippine Star 11/23/2006
http://www.philstar.com/philstar/NEWS200611230702.htm

International ratings agency Fitch Ratings said it does not anticipate upgrading the stable outlook it gave the Philippines last February unless the government is able to address the weak revenue performance.

"We are not contemplating immediate change (in ratings)," James McCormack senior director for Fitch Ratings Asia Sovereign Group said during a meeting of the Philippine Economic Society yesterday.

"A positive outlook is not something we anticipate," McCormack said. "The debt ratio is still high."

The ratings company will have a "full review" of its classification of the Philippines in the first quarter, he said.

Fitch rates Philippine debt BB, two levels below investment grade. The firm raised its outlook in February to stable from negative. Moody’s Investors Service Inc., which rates the nation’s debt four levels below investment grade at B1, this month raised its outlook to stable.

According to McCormack, the government needs to address the medium-term fiscal issues.

He said the country is expected to do well next year but the condition is expected to worsen in the coming years unless a radical change is imposed.

PES past president and former Finance Undersecretary Romeo L. Bernardo agreed and said the country has great short-term performance but "very dim" medium-term outlook.

"We are like a terminally ill-patient who is having a good day," Bernardo said.

Moving forward, McCormack said the biggest challenge of the Philippines is its weak revenue performance.

"There is quite a sharp drop in terms of revenue and gross domestic product (GDP). The money simply isn’t there to spend," McCormack noted.

He added that the current capital spending cannot be sustained in the medium term. "Revenues have to shoot up."

For the month of September, the Bureau of Internal Revenue, the country’s main collecting agency, has failed to meet its collection target.

Despite this, McCormack said the country does not need to implement new taxes. Instead, tax collection must be improved.

For the country to upgrade its ratings, McCormack advised spending on infrastructure projects.

In order to address medium-term fiscal issues, McCormack said building infrastructures like roads and bridges will encourage both public and private investment.

"This (infrastructure investment) would stimulate growth overtime," he explained.

For the past 16 years, McCormack said the country is not investing. This practice has earned the Philippines the title of the country with the lowest GDP- to-investment ratio in Asia .

"This is quite a serious problem. The Philippines is slipping to a low medium term growth trajectory," McCormack said.

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Poll spendings to pose fiscal risks, says Fitch
Daily Tribune
11/23/2006
http://www.tribune.net.ph/business/20061123bus2.html

Spendings related to next May’s congressional elections will be closely monitored by London-based credit watchdog Fitch Ratings, which expressed worries that massive government outlays by the Arroyo administration may pose fiscal risks

The government’s 2007 budget deficit goal is “aggressive” and at risk from spending related to next May’s congressional and local elections, Fitch Ratings said.

Fitch will hold its annual ratings review on the country in the first quarter of 2007.

The government is aiming at a P63-billion budget deficit next year or 0.9 percent of gross domestic product (GDP), from an estimated deficit of P115 billion or 1.9 percent of GDP by the end of the year.

“We are expecting some spending pressures related to the elections,” Fitch head of Asia sovereigns said.

Reining in the budget deficit this year was helped along by lower-than-expected spendings due to a reenacted budget from last year. Expenditure is expected to climb next year as the Arroyo administration is expected to fight tough to keep control of both houses of Congress and local governments next year.

McCormack said it was still too early to expect any upgrade in the country’s credit rating despite the introduction of a broader and higher sales tax early this year that lifted revenues.

Fitch raised the country’s sovereign debt outlook to stable from negative earlier this year after the new tax was introduced but maintained a credit rating on the country at two notches below investment grade.

Rivals Moody’s and S&P rate it at four notches and three notches below, respectively.

The country is the second-largest issuer of sovereign bonds in Asia after Japan and a credit rating upgrade would cut the cost of servicing its debt and lift investor confidence in the country.

3cr

November 23rd, 2006, 10:52 AM

Gov’t rules out new tax measures
By Des Ferriols
The Philippine Star 11/23/2006
http://www.philstar.com/philstar/news200611230701.htm

The government has ruled out further tax reform measures until after the elections, but the International Monetary Fund (IMF) is pushing for more reforms in the financial and power sectors.

The IMF has been pushing for changes in the country’s excise tax laws as well as investment incentives laws that cost the government billions of pesos in terms of foregone revenues.

However, Finance officials said they would not push Congress to take up any major tax-related reform measures, least of all the proposed consolidation of the government’s controversial investment incentives laws.

Even with political limitations, however, the IMF said the Arroyo administration should push for reforms in the financial and power sectors.

"I don’t think the authorities necessarily require new tax measures right away, it is just something that should remain on the table," said IMF senior adviser James Gordon.

"But there are initiatives in the power and financial sectors that definitely need to be completed," he said.

Chief among these necessary reforms, Gordon said, was the proposed Credit Information Systems Act which is pushing for the creation of a credit information bureau and the Corporate Recovery Act which is intended to update the country’s bankruptcy laws.

"Right now, the mission welcomes the positive developments in the financial sector including sales of non-performing assets, bank consolidation and the introduction of new international financial reporting standards," Gordon said.

According to Gordon, the implementation of Basel II in July next year should lead to further progress in the financial sector, aligning the country with the increasingly transparent international standards.

However, Gordon said the IMF still considered it necessary for the government to complete its tax reform program. "New tax measures such as the rationalization of tax incentives will likely also be needed," he said.

Without further tax measures, the IMF said earlier that the plan of the Arroyo administration to increase spending would keep the fiscal deficit at two percent of gross domestic product (GDP).

According to the IMF, balancing the budget and increasing infrastructure spending would not be possible without additional tax measures on top of the recent tax reforms that increased the value added tax rate to 12 percent from 10 percent.

The Arroyo administration has repeatedly said it would not consider any more tax measures at least until after 2007, but few analysts believe that the increase in the value-added tax rate would be enough to sustain the fiscal momentum.

According to the IMF, achieving both objectives would require further increases in revenue and additional tax measures would be needed to sustain fiscal consolidation.

In the report, the IMF said that although additional revenue could be generated from tax administration measures that would ensure the full implementation of existing tax policies, this would not be enough.

While strengthening of tax administration has the potential to yield part of the needed additional resources, the Fund is of the view that additional tax measures will also be needed," the IMF said.

"By staff calculation, increasing capital spending by 1.5 percent of gross domestic product over the medium term while balancing the budget would require revenues to rise by about 3 percentage points of GDP," the IMF said.

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Palace asked: Account for P4.6-B dev’t fund
By Angie M. Rosales
Daily Tribune
11/24/2006
http://www.tribune.net.ph/headlines/20061124hed1.html

Senators yesterday demanded that Malacanang show its book of accounts and explain before them as well as to the public where their P4.6-billion so-called “pork barrel” for last year went, considering that practically no fund releases were made to finance their respective projects.

Sen. Panfilo Lacson took the floor during continuing budget deliberations to raise the sentiments of his colleagues, noting that only three of the current 23-strong chamber were given allocation of their priority development assistance fund (PDAF).

The opposition lawmaker said he had been approached by a number of his fellow senators to speak on their behalf to require Malacañang and the Department of Budget and Management (DBM) yield their records of fund releases.

Figures culled from the DBM’s official Web site showed that for the year 2005, only administration Senators Manuel “Lito” Lapid, Ramon “Bong” Revilla and Ralph Recto received portions of their PDAF by as much as P100 million each out of the more than P200 million allotted to each senator.

In the House of Representatives, Lacson said, several opposition congressmen were also not given their P70-million pork allotment. Since he became senator, he has given up his own pork barrel but decided to raise the issue anyway at the request of his colleagues.

The PDAF is an item in the General Appropriations Act and therefore a provision of law. Under the 2005 budget, the Senate had been given an allocation totaling P4.6 billion as PDAF.

“This (PDAF) is not the money of President Arroyo. This is part of the country’s coffers. What right do they have to say who should or should not be given funding and how much?” Lacson asked.

“If there are really no funds available, their usual line is that there are no funds available. But they’re saying a different thing, that there are more than enough funds available. So what’s the reason why there had been no releases? So it only goes to show that this is a deliberate move, whimsical in refusing funding (for our constituents),” he said.

The Tribune earlier reported the fund releases to the three administration senators several months ago, citing the same source of information, the DBM Web site, on the heels of another report on alleged withholding of PDAF of the senators, especially those so-called staunch critics of Mrs. Arroyo.

Lacson said some senators are thinking of bringing the matter to the Supreme Court to compel the DBM to release the funds. The senator added Malacanang cannot use the argument that it should not release money to those criticizing or destabilizing the President. “If the DBM violates the law, he should answer for it, he does not have immunity from suits,” Lacson pointed out.

Sen. Pia Cayetano, who ran under the administration coalition K-4 in the 2004 elections, said she has not received any releases on her pork barrel lately. Cayetano indicated the reason could be her brother’s political differences with the President’s family. Her brother, Taguig-Pateros Rep. Alan Peter Cayetano, has been sued for libel by Mrs. Arroyo’s husband Jose Miguel “Mike” Arroyo, whom the congressman accused of having a secret account in a German bank.

“I don’t know why else my (PDAF allocations) are not being released,” Sen. Cayetano said, noting the lack of funds has imperiled some of the programs she has pledged to finance such as those for the University of the Philippines-Philippine General Hospital and other health projects. Malacanang “should look into the situation without malice,” she added.

Lacson also proposed that pork barrel funds, which he said are a major source of corruption, should be rechanneled for the salary standardization of government employees instead.

Just as eating pork is taboo in the Islam faith, he said, pork barrel funds should be prohibited for the serious threat they pose not only to lawmakers’ integrity but also to the government’s anti-graft efforts.

“Pork barrel funds have been proved to be a source of evil. Because of the pork funds, many lawmakers have succumbed to the wishes of Malacañang, all in the name of so-called development,” Lacson noted.

He suggested that the pork barrel funds be used to bankroll the salary standardization of government workers, who have been seeking a wage adjustment to make ends meet.

Lacson, who heads the Senate committee on civil service and government reorganization, said the salary set-up for government employees at present heavily favors those at the upper levels, with the rank-and-file employees still getting low pay.

Yet, he added, many projects involving millions of pesos in taxpayers’ money, but labeled as pork barrel funds, are diverted to the pockets of many corrupt officials and contractors. This is why, the senator said, he had rejected his pork barrel allocation and proposed an amendment to the national budget to exclude his pork barrel allocation.

“Pork per se is not bad. What is bad is if the legislator falls to the temptation of getting commissions or rebates from contractors and suppliers. Such legislators give their colleagues a bad name,” he added.

He manifested that he is giving up his P200-million pork barrel allocation, a “tradition” he has maintained since 2002. He said the gesture aims to reduce the budget deficit, “not to help this administration but to help this country and to help the economy.”

marites4

November 23rd, 2006, 07:38 PM

Wow Romeo L . Bernardo says the PHils is like a terminally ill patient having a good day. Who is this guy? What an outlook.
So does that mean the country will inevitably die? What happens to the 90 million people living in it?

3cr

November 24th, 2006, 12:15 AM

Bayanihan dazzles US after 50 years due to price fix — PEMC
By Riza Recio
Daily Tribune
11/24/2006
http://www.tribune.net.ph/business/20061124bus1.html

The Energy Regulatory Commission (ERC) will decide on the option on determining electricity prices during the period that the electricity spot market operator found price manipulation engaged into by state power assets holding firm Power Sector Assets Liabilities Management Corp. (Psalm) but consumers should brace for higher electricity prices, according to spot market operator Philippine Electricity Market Corp. (PEMC).

PEMC president Lasse Holopainen said the ERC has the option to either rule to let the PEMC administer the prices for the contested period covering September or employ the time-of-use rate scheme of state firm National Power Corp. in which discounts are given during hours of lean power demand.

Either way, electricity consumers were warned to brace themselves for higher bills in December as a result of the market collusion undertaken by Psalm.

Holopainen Psalm’s market price manipulation will subject customers to pay more in electricity bills.

The situation, if PEMC will be ordered to administer pricing on September that would affect December electricity bills, will be similar to paying electricity during calamities, force majeure and national emergency, according to Holopainen.

The price of electricity at spot market trading almost doubled to 4.853 per kilowatthour in September compared to prices when the spot market opened in late June.

“There’s direction to that manipulation, market collusion (referring to Psalm). It’s how the prices were derived, they were all similar,” described Holopainen on the findings of price collusion against Psalm’s four trading teams.

Holopainen said investigations on price manipulation was undertaken on the request of dominant electricity distributor Manila Electric Co..

Energy Secretary Raphael Lotilla said the ERC has the jurisdiction over the pricing that would be employed for the month when the price fixing occurred.

The PEMC board, nevertheless, wanted to reverse the price offers for September to the administered price rate during August, the second full month of the spot market’s operation.

“The PEMC board decided that, to adjust the price immediately, there will be a correction of the billing for the third month,” he said.

“It will, however, be the ERC to decide whether to apply administered price or time-of-use in this correction of the Wesm price,” he noted.

_____________________________________

Congress readies sanctions on Psalm, Napocor execs
By Angie M. Rosales
Daily Tribune
11/24/2006
http://www.tribune.net.ph/business/20061124bus6.html

The Joint Congressional Power Commission (JCPC), which oversees the reform program in the power sector, is considering sanctions on officials of not only state power assets holding firm Power Sector Assets and Liabilities Management Corp. (Psalm) that was tagged for price fixing at the power spot market but also state power firm National Power Corp. (Napocor).

“What happened to the Wholesale Electricity Spot Market was structurally due to the composition of the Wesm and Psalm, the Psalm board is composed of Cabinet members chaired by the secretary of Finance, vice chairman is the secretary of the Department of Energy (DoE) while the board is also chaired by the DoE secretary and the members are Psalm, Napocor and Transco (National Transmission Corp.) and all the energy companies and some of the generating companies,” Sen. Joker Arroyo said.

“So the interlocking relationship is incestuous. How can you have a trade proceeding when Psalm, the supplier of 50 percent is also there playing the role of the trader. That’s the cause of all these. They have to correct this structurally that the membership should not be that way.

“Otherwise, this incestuous relationship will cause a problem and also because what is happening now is that Psalm and Napocor were trying to recover their losses through the spot market or Wesm and these damages, of course the public and that is what they should answer for,” Sen. Joker Arroyo, who presided over the JCPC meeting, said.

“I asked that question, they did not say directly but they (said) they intend to recover, meaning at least it is not, I don’t use the word manipulation, but recover past losses…the formula they adopted to recover past losses, that was not justified,” Sen. Arroyo said.

Nonetheless, Senator Arroyo disclosed that panel members are not yet prepared to make recommendations as to what sanctions are to be imposed against concerned officials as the JCPC is yet to be furnished a copy of the full report submitted by the surveillance committee tasked by PEMC to conduct the investigation.

Sen. Sergio Osmeña III, panel member, said any sanctions should be carried out by the Energy Regulatory Commission (ERC), the body overseeing the supervision of the power industry.

In standing pat to their position, Sen. Arroyo pointed out that Psalm and Napocor officials should not get involved in the daily trading at Wesm considering that Psalm’s task is to privatize State-owned power assets while that of the Napocor is to generate power.

“That’s not their mandate. Their mandate is to privatize. The role of Napocor is to generate power. Trade? I don’t know about that,” he commented to reporters.

During the proceedings, the senator directed DoE Secretary Rafael Lotilla to render a full report by Monday on the losses incurred by Napocor and Psalm from questionable trading at Wesm.

“There will be losses here, so we want to know who will shoulder the losses. Who caused it? When did this happen? How would it be paid? These are some of the questions we want answered before the Senate takes up the proposed 2007 budget of the Energy department on Monday,” Senator Arroyo said.

Osmeña pointed out during an interview that the alleged price manipulation situation also happened just before the 2004 presidential elections when President Arroyo ordered Napocor to bring down its electricity rates, supposedly to win public support, resulting in about P74 billion losses.

________________________________

AFTER BEING FOUND MANIPULATING PRICES AT SPOT MARKET
ERC may force PSALM to return profits
By MYLA IGLESIAS and JP LOPEZ
Malaya
http://www.malaya.com.ph/nov24/busi1.htm

The Energy Regulatory Commission can order the PSALM to return profits it may have earned from fixing prices at the wholesale spot market according to chairman Rodolfo Albano Jr.

While ERC has yet to receive the official report from the Market Surveillance Committee which found the Power Sector Assets and Liabilities Management to have manipulated prices, Albano said the ERC can even cap or order price controls on the market.

He said under the power reform act, ERC can impose price controls and order the disgorgement of excess profits.

Meanwhile, Energy secretary Raphael Lotilla said mistakes in the nascent wholesale electricity spot market should be expected.

PSALM president Nieves Osorio said traders were under pressure to recover the losses during the first months in WESM operations which forced them to try to recoup their losses by hiking prices on the succeeding months of trading.

Traders’ efforts to even out the losses led in prices shooting up by 73 percent in the third month of operations compared to the first two months and another 58 percent more in the fourth month compared with the second month.

In August to September the load weighted average rate (LWAP) went up to 4.853 kwh the rate in the spot market compared with the first month’s price of 2.788 kWh and in July to August of 3.079 p/kWh.

Sen. Joker Arroyo, chairman of the Senate energy committee, said "I do not want to use the word manipulate. But the PSALM created a formula to cover-up its losses that resulted to higher prices in the spot market. That’s clear. And I don’t know how they can get out of that.

Osorio insisted her agency did not engage in price manipulation.

She told senators that PSALM was able to sell power at a lower cost during the first two months of WESM because only variable costs – like the prices of fuel in the world market – were factored in.

She added additional costs, like fixed costs paid by government due to its contracts with independent power producers, were considered in the formulation of the cost of electricity in the third trading month after PSALM realized it was incurring millions of pesos because of lower power prices.

Philippine Electricity Market Corp. President Lasse Holopainen told senators they charged PSALM of abuse of market power after investigation showed that "instructions from top officers" forced trading teams to jack up their recommended costs.

Sen. Gregorio Osmeña III briefly explained the alleged price manipulation: "They brought down and manipulated power costs in the first two months to look good in the public. Prices went up in the third month because government had to recover money it lost from the price manipulation."

He said the price fixing was done to "please Mrs. Arroyo," whom he noted had even bragged the drop in power prices when WESM started its operations.

3cr

November 24th, 2006, 12:21 AM

This is another factor the Philippines is considered a risky country for foreign investment. Gov't must put an end to this problem if it seriously wants to improve/change foreign perception of investing and doing business in the Philippines.

Foreign terror leaders in and out of RP, admits NSA chief
By Sherwin C. Olaes
Daily Tribune
11/24/2006
http://www.tribune.net.ph/headlines/20061124hed2.html

Despite deployment of thousands of troops and increased intelligence gathering to track down suspected foreign and local terrorists, National Security Adviser Norberto Gonzales yesterday admitted there are international groups freely roaming in Mindanao and strengthening their forces.

The NSA chief, during a forum on internal security operations and counter-terrorism in Clark Field, Pampanga, revealed that aside from the two Indonesian bombers who have links with al-Qaeda terror network – Umar Patek and Dulmatin, whom he said were hiding in Mindanao, there are other foreign terrorists who are freely entering and leaving Mindanao for the past months now.

“There are others, not only them,” Gonzales stressed, adding the two Indonesians are the “principals.”

Dulmatin and Patek were tagged as the ones who masterminded the 2002 bombings in Bali, Indonesia, that left at least 200 persons dead.

He said authorities only got such intelligence report now but assured the government would do its best to protect the public and run after the unidentified foreign terrorists.

Gonzales refused to give other details for security and operational reasons but stressed any terror activities will not be tolerated by the national government.

He urged the public to be calm as “these foreign terrorists were at a manageable level.”

President Arroyo, for her part, said she already got a positive answer in her request from US President George W. Bush to help in the fight against terrorism in the country.

She added she had asked Bush “to have a deeper and broader involvement in the peace process in Mindanao.”

“And they have identified eight senior persons from the US Embassy in Manila to be able to work with our peace process panel,” Mrs. Arroyo stressed.

She said the war on terrorism should be fought with concerted efforts among the national and local governments, the police and the military, adding the Mindanao peace process “must be factored heavily in our blue print for internal security.”

A total of 7,500 Marine and Army soldiers are currently pursuing the group of Abu Sayyaf chieftain Khadaffy Janjalani, Dulmatin and Patek.

Armed Forces of the Philippines (AFP) Chief of Staff Gen. Hermogenes Esperon, for his part, also yesterday said the military has a credible information indicating that Janjalani, Dulmatin and Patek, who are among the terrorist leaders wanted by the United States, are still in Jolo, Sulu, province amid recurring reports that they have already fled to either Basilan or Lanao del Norte.

“They are still there…we have good reports that would attest to that,” the military chief told reporters during a separate press briefing at Camp Aguinaldo in Quezon City.

He added the military leadership is reorganizing the deployment of thousands of government forces currently deployed in the jungles of Sulu.

Esperon said Operation Plan Ultimatum had undergone an earlier revision after its execution last Aug. 1.

“This is phase three of that fragmentary order,” the AFP chief stressed, referring to the fresh revision.

Esperon initially refused to answer questions about the new strategies they are adopting under the new phase of operation, saying “That’s too tactical, very operational,” but assured that the new plan does not call for the deployment of additional troops.

Asked on the difference between phase three of the operation from the first two phases, the military chief said: “It’s rearranging troops on the group, that’s all to it. There will be no additional (troops that would be deployed).”

Meanwhile, driven by common fear of terrorism, leaders of the Association of Southeast Asian Nations are set to raise the ramparts against security threats when they hold the 12th Asean Summit in Cebu City on Dec. 11-13.

Like some of its Asean partners, particularly Indonesia, the Philippines has had its share of terrorist attacks from the al-Qaeda linked Muslim terrorist cell Abu Sayyaf.

In 2002, Malaysia, Thailand and the Philippines forged an agreement in Kuala Lumpur calling for cross border sharing of information on terrorism and other security concerns, but it contained no specific measures to implement the accord.

_________________________________________________

Runaway population explosion must be controlled if the gov't wants to improve the economic condition as well as the economy of the country as a whole; otherwise efforts in improving the situation will be futile and come up short of expectations with the current rate of population increase we're experiencing. What happened to family planning and programs associated with population control? GMA herself said this is not a popularity contest so she should make the hard and wise choice to do what it takes even if it means displeasing the Church over condom use and other contraceptives to prevent unwanted/unplanned pregnancies.

FVR hits kowtowing to Church on population[/SIZE]
BY ASHZEL HACHERO
Malaya
http://www.malaya.com.ph/nov24/news7.htm

THE country could be in a major crisis five to six years from now if the Arroyo administration does not change its policy on population, President Fidel Ramos said yesterday. Ramos, a Protestant, said the policy is subservient to interest groups like the Catholic Church.

"I ask of you here what are the same characteristics of such countries as Ireland, Austria, Italy, Spain, Argentine, Chile, Poland, Cuba and Mexico? They are all predominantly Catholic and yet they have low population growth rate which translates to better economic development," he said, citing a recent United Nations Human Development report.

Health workers and academicians have said the strong influence of the Church, which is opposed to artificial methods of family planning like the use of contraceptives, is to blame for the high population growth rate.

Ramos called on government to adhere to commitments under the 1994 Cairo summit on population, which called for the interlinking of the population program with long-term sustainable development.

"The Arroyo administration’s population policy can be generally described as flip-flopping, perhaps due to the unwarranted subservience to the Catholic Church," he said.

This, he said, has resulted in the "runaway" population growth rate of 2.36 percent annually, or about 1.6 million babies born every year. Economic development could not keep pace with this growth rate, he said.

The country‘s population stands at 87 million. At the current growth rate, it will reach 100 million in five to six years and 115. 7 million by 2025. The National Economic Development Authority is targeting an annual growth rate of 1.9 percent.

Economic experts said the economy should expand by 8 to 10 percent in the next 10 to 12 years to enable it to cope with the population rate.

"If the government had a strong population policy in place, the incidence of hunger and poverty as reported by the surveys would not have been so high as to cast doubt on the positive effects of the economic growth," Ramos said.

A recent survey of the Social Weather Stations showed a record of 2.9 million Filipino families experiencing hunger. It also showed that the 13.9 to 16.9 percent incidence of hunger in the first three quarters of the year was markedly high compared to last year’s 12 to 16.7 percent.

Ramos said the right policy is to give married couples the freedom of choice.

He said the Arroyo government’s population policy is not consistent even with its concept of "responsible parenthood" as it reverses the country’s commitment to international treaties on population agreed upon during the 1994 summit and at the succeeding conference at Beijing in 1995 and Copenhagen shortly after.

"The declaration of President Arroyo before the United Nations last year that the funding from the organization will be used to promote only natural methods of family planning under its official program slogan being propagated as responsible parenthood is actually a distortion, and misleading of the concept according to the 1994 International Conference on Population and Development," he said.

As a consequence, he said, foreign donor groups such as the US Agency for International Development had to withdraw or scale down their regular support for the country’s reproductive health and family planning program by 2008.

Arroyo, in a statement during a high-level plenary meeting of the United Nations General Assembly, said the "funding given by the United Nations to our national government for reproductive health should be dedicated to train married couples in a natural family planning technology which the World Health Organization has found effective compared to artificial contraceptives."

She also said artificial contraception accounted only for 2 percent of the decline in birth rate, while a combination of such factors as natural family planning methods and breastfeeding contributed 98 percent.

Ramos said while he favors the use of contraceptives and other artificial methods of family planning, he does not look at abortion as a way to control population.

"Abortion should never be promoted as a method of family planning," he said, adding the solution is a program that promotes responsible parenthood and the participation of men and women in family planning, and people empowerment.

3cr

November 24th, 2006, 11:17 PM

7 " most corrupt" agencies named by Palace commission
Daily Tribune
11/25/2006
http://www.tribune.net.ph/headlines/20061125hed3.html

The Presidential Anti-Graft Commission (PAGC) yesterday identified the seven “most corrupt” agencies which it said are now the object of its high-profile investigation.

The seven agencies as identified by PAGC Chairman Constancia de Guzman are Bureau of Immigration (BI), Bureau of Customs (BoC), Bureau of Internal Revenue (BIR), Philippine National Police (PNP), Land Transportation Office (LTO), Department of Public Works and Highways (DPWH) and Department of Education (DepEd).

The heads of these agencies are seen as proteges of President Arroyo and had been accommodated in the bureaucracy for their role in in helping her take the presidency away from now detained President Joseph Estrada.

De Guzman said she based the assessment on the number of graft cases against officials and employees of the seven agencies but she refused to identify those involved in such cases.

In duetime, she added, the commission will identify the officials involved in the graft complaints as investigation is still ongoing.

De Guzman said she had created a high-profile team that will monitoring the graft cases and activities in the seven agencies.

“We’re hopeful that our special team will be the key for faster resolution of cases. We are serious in purging graft and corruption to make sure that the government will effectively deliver the basic services to our countrymen. I wish to reiterate that we will not (enter into a) compromise with anybody who will be found guilty,” she added.

The total of 22 cases referred to the team are expected to be resolved within 90 days.

This year, the PAGC said it has has resolved 82 cases, which include eight dismissals and three suspensions of presidential appointees.

“Genuine efforts are being exerted to eventually eliminate graft. I wish to encourage my co-workers in government to cut their involvement (in) any form of corruption. I’d like to remind them that the shame and scandal that will be suffered by their families will be immeasurable,” De Guzman said.

__________________________________________

General Out to Quell Opposition vs GMA’s NorthRail, Expressway Projects?
BY DABET CASTAÑEDA
Bulatlat
http://www.bulatlat.com/news/5-36/5-36-rail.htm

A peasant congressman from Central Luzon said that the heightened militarization in the region – which is taking place while Maj. Gen. Jovito Palparan was designated commander of the 7th Infantry Division last September – has a hidden agenda: To neutralize the people’s dissent over two priority projects of President Gloria Macapagal-Arroyo.

Is there a relationship between government’s flagship projects and heightened militarization in Central Luzon (CL)?

The designation last September 2005 of military officer Jovito Palparan as division commander of the 7th Infantry Division of the Philippine Army (ID PA) based in Fort Magsaysay, Laur, Nueva Ecija was meant to quell opposition to two flagship projects of the government, namely the North Luzon Railways Corporation (NorthRail) and the Subic-Clark-Tarlac Expressway Project (SCTEP), a House party-list representative said.

In a press conference in Quezon City Oct. 12, Anakpawis (toiling masses) Party-list Rep. Rafael Mariano said that alleged involvement in political killings seems to have become one of the grounds for promotion in the military.

“The immunity granted by Malacañang to Palparan despite charges of human rights violations hurled against him serves as encouragement for the other officers and members of the institution to engage in similar counter-insurgency operations that target civilians and sow fear and terror over civilian populations,” Mariano told reporters.

Palparan, who has been promoted by President Gloria Macapagal-Arroyo from colonel to major general in two years, has been accused of human rights violations. Under investigation earlier by the Commission on Human Rights, the justice department and then Congress, he was linked by rights watchdogs to the killings of activists in the Mindoro province and the Eastern Visayas (EV) region.

Both areas are rich in mineral deposits. During Palparan’s stint in those areas, local organizations there stressed that his designation was part of the government’s plan to dampen the opposition to mining activities there.

As a result of public clamor and widespread accusations against Palparan, the Commission on Appointments (CA) decided to defer the confirmation of his promotion to a two-star general.

Mariano, who traces his peasant origins in Nueva Ecija, said that despite the CA’s decision, Palparan remains a “model general” for beleaguered President Macapagal-Arroyo. Proof of this is his assignment to CL where the general is again expected to “deliver.” For Mariano, the latter word refers to quelling opposition to the President’s pilot projects in the region.

“Sowing fear”
As commander of the 7th ID, Palparan currently heads two brigades (702nd and 703rd) and six battalions (24th, 48th, 56th, 69th, 70th, and 71st) of the PA covering eight provinces in CL. Palparan’s ID is under the Northern Luzon Command (Nolcom).

Since he assumed the military top post in CL, the human rights alliance Karapatan-CL (Alliance for the Advancement of Peoples’ Rights-CL) has documented a total of 23 victims of human rights violations and international humanitarian law. Twelve of these victims have been killed allegedly by the military.

The manner in which the violations have occurred is ruthless and has sown fear among villagers, Karapatan-CL said in its Oct. 12 statement. The group’s fact-finding missions showed that the victims were killed or abducted inside their homes with the incidents witnessed by their own families.

The group’s reports also showed a pattern of how the alleged military perpetrators operate. The perpetrators are said to attack at midnight, the victims are shot several times in the head and body and the victims are left in public places.

“These are done specifically to sow fear among the people,” said Sr. Cecile Ruiz, chair of Karapatan-CL.

Pilot projects
Central Luzon is currently the area for two controversial flagship projects of the government.

The $503-million NorthRail is a railway modernization project and a joint venture of the Philippine and Chinese governments. The project spans from Caloocan City (Metro Manila) through Clark Airbase, Pampanga (CL) to the Subic Freeport Zone in Zambales (CL) with two extensions running from Caloocan City to Fort Bonifacio (Metro Manila) and from Clark heading toward Poro Point in La Union (Northern Luzon). The first phase is a 32-km stretch from Caloocan to Malolos, Bulacan (CL).

The Stop NorthRail Project Coalition (SNPC), one of the project’s opponents, stressed that the contract entered into by the two countries is onerous, one-sided and inimical to Filipinos. A report by the law center of the University of the Philippines also has similar finding. The project is currently under Senate investigation.

The SCTEP, on the other hand, is the sixth in the President’s 10-point agenda. Spearheaded by the Bases Conversion Development Authority (BCDA), it is funded by an P18-billion loan ($322.41 million, based on an exchange rate of P55.83 per US dollar) from the Japan Bank for International Cooperation (JBIC).

This expressway project passes through the 6,453-ha. Hacienda Luisita property. The latter is the vast sugar estate owned and operated by the family of former President Corazon Cojuangco-Aquino who belongs to the powerful Cojuangco clan in Tarlac.

According to its website, the BCDA says that the SCTEP is designed to provide the “shortest, direct and efficient link” among areas in Central Luzon, specifically the Subic Bay Special Economic Zone and Freeport Zone in Zambales, the Clark Special Economic Zone in Pampanga and the Luisita Industrial Park in Tarlac.

Opposition
Opposition to the NorthRail project particularly comes from urban poor dwellers along the railways whose homes will be demolished once construction reaches their area. About 20,000 families could lose their homes and livelihood for the project’s first phase alone.

In a statement, the SNPC said blood is bound to spill once the government pursues this project. During a violent demolition last Sept. 21, the group said, the Philippine National Police (PNP) and the Provincial Mobile Group (PMG) injured seven urban poor dwellers from the town of Meycauayan. The report said the victims’ heads were hit by crowbars while their arms, chests and legs were hit by the demolition crew’s mallets and hammers.

So far, the project’s construction has torn down around 7,000 homes in the cities of Caloocan, Malabon and Valenzuela in Metro Manila. More families will soon find themselves homeless as Macapagal-Arroyo issued as early as last Nov. 8 Administrative Order (AO) No. 11. The AO authorizes the National Housing Authority (NHA) to take charge of demolitions and forced relocations of affected residents.

But government relocation has proven to be disastrous for the urban poor dwellers hit by the NorthRail construction.

In an interview with Bulatlat in October 2004, a number of those relocated in a hilly village in San Jose, Del Monte, Bulacan complained of shortage of water, food, electricity and other necessities, not to mention government neglect after their relocation.

On the other hand, sugar and mill workers in Hacienda Luisita who went on a simultaneous strike last Nov. 6 are blocking the construction of the SCTEP as they also stand to lose their homes once the project gets underway.

Moreover, the cane workers who are farm-worker beneficiaries (FWBs) under the government’s Comprehensive Agrarian Reform Program (CARP) are demanding the immediate implementation of the Department of Agrarian Reform’s recommendation to revoke the estate’s Stock Distribution Plan (SDP).

The SDP is an option under the CARP that allows landowners to operate their landholdings as corporations. If this plan is recalled, the land will be up for distribution to FWBs. The latter in turn will demand that the land should remain undivided.

The mill and cane workers’ opposition to the project and their militancy to uphold their strike are, however, met with military brutality, reports show. After facing the bloodiest picket line dispersal last Nov. 16 which left seven dead, scores injured and disappeared, the hacienda workers continue face military threats.

Deployed inside the hacienda itself are around 300 soldiers from three companies of the 69th Infantry Battalion and the 703rd Infantry Brigade. Practically each of the 11 villages comprising the hacienda has a military detachment, it was learned.

Second wave
Union members now see the strong military presence as the “second wave” of its kind after the government tagged the hacienda workers’ strike as a “national security threat.”

The first quarter of this year witnessed the killing of four hacienda workers’ supporters (i.e., peasant leaders Marcelino Beltran and Victor Concepcion, Tarlac City Councilor Abel Ladera, and activist-priest William Tadena). Five activists also disappeared, including the President’s distant relative Danny Macapagal.

In the book Trinity of War (Book III) published by the Nolcom, it said “The combined labor-agrarian unrest (in Hacienda Luisita) did not only cripple Luzon’s biggest sugar refinery and sugar plantation; it will also subsequently affect the government’s program to boost CL’s economic development.”

It added, “Disrupting the SCTEP’s construction through the Hacienda Luisita strike,… will slow down efforts by the national government to speed up the socio-economic development in CL and address widespread poverty that is a breeding ground of rebellion.”

Sr. Cecile said in the Oct. 12 press conference that if Palparan continues to sow terror in order to assure the continuation of the government’s flagship projects, human rights violations, especially the killings, will continue.

3cr

November 25th, 2006, 12:00 AM

Manufacturing output tumbles ahead of Yuletide season
BY DARWIN G. AMOJELAR
ABS CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryId=57316

Manufacturing output continued to tumble for the ninth month in September as most of the major sectors produced less during the period, the National Statistics Office said Friday.

In its latest Monthly Integrated Survey of Selected Industries, the NSO said the volume of production index, which gauges the level of output on an annual and monthly basis, dropped 8.3 percent in September from the revised 8 percent in August.

The NSO attributed the decline to the two-digit drop in 13 major sectors, such as machinery excluding electrical, leather products, textiles, tobacco, footwear, wood and wood products, petroleum products, electrical machinery and publishing and printing.

On a monthly basis, VOPI also slipped 3.5 percent from a positive growth of 5.4 percent in August as the index was pulled down by the weak performance of makers of leather products, chemical products, rubber products, wood and wood products and machinery excluding electrical.

The NSO said only 10.2 percent of manufacturing firms operated at full capacity, with the average for all manufacturers estimated at 80.2 percent. More than half, or 57.5 percent, of the establishments operated at 70-percent to 89-percent capacity, while 32.3 percent of the establishments operated below 70-percent capacity.

Similarly, the value of production index went down by 0.1 percent in September from 6.3 percent in August, led by the machinery excluding electrical, leather products, textiles, chemical products, publishing and printing, tobacco, petroleum products, wood and wood products, and rubber products.

On a month-on-month basis, VAPI dropped 3.7 percent from 4.4 percent in August due to weakness among makers of leather products, chemical products, rubber products, petroleum products, wood and wood products, and machinery excluding electrical.

3cr

November 25th, 2006, 12:12 AM

DTI opens own call center in bid to reduce red tape
By Ayen Infante
Daily Tribune
11/25/2006
http://www.tribune.net.ph/business/20061125bus3.html

The Department of Trade and Industry (DTI) has set up its own call center to handle consumer complaints and reduce red tape, DTI undersecretary Zenaida Cuison Maglaya said.

All issues concerning business transactions with agencies attached to the DTI may also be accessed through the call center, she said.

The call center, launched yesterday, was in line with the government’s initiative to address red tape as ordered by the Arroyo administation under Executive Order 557, Maglaya added.

DTI Direct, which can be reached through telephone number 751-3330, serves as DTI’s mechanism for adopting a no-wrong-door policy in order to provide fast, reliable and uniform customer support, according to Maglaya.

Maglaya said establishing the call center is part of a department-wide effort to improve and simplify the delivery of its frontline services.

“Now, we are offering the public a single number where they can inquire on or access our services. We want to save our clients the time and frustration of being given the run-around by providing their needed information or assistance at the soonest time possible,” Maglaya said.

Maglaya added that the DTI has already implemented new measures to reduce processing time, cost and requirements for clients when obtaining the necessary business permits or licenses.

Among these she said were the cancellation of some requirements by the DTI-National Capital Region which no longer requires business name registration applicants to submit two passport-size pictures and other government agencies requirements such as Professional Regulation Commission ID and Bureau of Food and Drugs permit.

Apart from this, the Philippine Contractors Accreditation Board has minimized its documentary requirements for renewal of contractors licenses which translates to a reduction in transaction cost by as much as P2,500.00 and in processing time from 68 down to 15 days or by about 78 percent.

The Board of Investments, meanwhile, has trimmed down processing days and waived the fees for the application of Cement and Copper Export Clearances, and has put-up a help desk to accommodate queries and complaints, among other initiatives.

The International Coffee Organization Certifying Agency has also cut processing time of Coffee Export Clearance by 80 percent and accreditation of coffee exporters by 60 percent, besides doing away with collection fees.

3cr

November 25th, 2006, 02:33 AM

Palace, Senate unite against budget increase
By Juliet Labog-Javellana
Inquirer
http://newsinfo.inquirer.net/breakingnews/nation/view_article.php?article_id=34609

IN A RARE occurrence, the Senate and Malacañang are now on the same side against the House of Representatives on the questionable increases placed by the House in its version of the 2007 national budget.

Budget Secretary Rolando Andaya Jr. and the President's economic managers took the Senate position that the House-approved 2007 budget was unconstitutional because it increased the budget submitted by President Gloria Macapagal-Arroyo. They effectively rebuffed Representative Jose Ma. Salceda, the House appropriations committee chair, who said they just realigned certain portions in the budget.

"Increasing it as proposed by the Executive is unconstitutional,'' Andaya told Senate finance chair, Senator Franklin Drilon, during floor deliberations at the Senate.

Andaya went as far as advising the Senate to stick to the budget submitted by the President. He said he tried to dissuade the House from introducing increases, to no avail.

"I was not consulted on this matter but I got the word of it and I informally sent them my sentiments but obviously, the pressure of looking for areas to cut was just too much and instead of looking for these areas (the House cut the interest payments and) just added on to the expenditure level. It's the more convenient way out but not necessarily the wisest way out,'' Andaya said.

Senator Miriam Defensor-Santiago pointed out Wednesday that the House did an unconstitutional and "mind-numbing'' act of increasing the budget by over P8 billion by stuffing them in different departments.

She said that Article VI, Section 25(1) of the Constitution states that: "The Congress may not increase the appropriations recommended by the President for the operation of the government as specified in the budget.''

Drilon and the other senators fully agreed with Santiago, saying even Secretaries Andaya, Margarito Teves of finance and Romulo Neri of socio-economic planning, who make up the Development Budget Coordinating Committee took the same position.

But Salceda said Santiago "got it all wrong'' since there was no change in the P1.126 trillion budget for 2007 as proposed by Malacañang, although he admitted that the House reduced interest payments on foreign loans by more than P8 billion and transferred the amount to infrastructure projects.

But Andaya maintained the House realignment was illegal. He and Drilon agreed that by changing the exchange and interest rate assumptions for the budget, the House was being fiscally irresponsible because it could result in a bigger budget deficit.

Drilon and Senate President Manuel Villar rallied in support of Santiago.

"That is questionable. We will insist on our position in the bicameral (conference committee) that this cannot be done,'' Villar said.

Drilon said the House move could be a major issue in the bicameral conference level, but expressed confidence the Senate position will be upheld.

"Yes, even Senator Joker Arroyo said that the Senate and Malacañang are on the same side on this,'' said Drilon, who had called for the President's resignation in July 2005.

Andaya said the House slashed the interest payments for debt service by P18.7 billion and used this to increase the programmed new appropriations. The President proposed P641.1 billion in new appropriations but the House increased it to P649.3 billion.

Drilon said that while the House cut interest payments by P18.7 billion, the net increase over the President's budget was only P8.2 billion since reductions were made on other items in the budget and some portions of foreign-assisted projects.

When Drilon asked Andaya if he ever did that when he was House appropriations chair, Andaya said: "Being a lawyer like yourself Mr. Chairman, I think that's legally questionable,'' Andaya told Drilon.

"And from a management standpoint, that is fiscally questionable to say the least. More so that we view the 2007 budget as our launching pad to having a balanced budget by 2008. So it's important that what we say in terms of deficit which is .9 percent of GDP (Gross Domestic Product), it's important that we stay within that target. Any deviation from that might send the wrong signals, Mr. Chairman,'' Andaya said.

Drilon said changing the assumptions on the exchange and interest rates was a "very risky proposition'' because it could result in a bigger deficit if the peso weakened and interest rates went up next year contrary to House projections.

Drilon said the House effectively questioned the assumptions made by the President's economic managers when they came up with the budget.

Drilon said the House move increased the projected budget deficit to P71 billion from P63 billion, thus the chamber increased the President's P1.126 trillion to P1.134 trillion.

Andaya then gave this advice to the Senate: Stick to the P63 billion deficit. Drilon said the Senate committee did this by adopting the Malacañang budget.

Andaya said the automatic appropriations in the budget (which stand at P552.2 billion for 2007) are "not subject to approval but merely for the information of Congress.'' The automatic appropriations include the interest payments.

"Maybe they (House) think that we (Congress) approve even the automatic appropriations when we do not. It's probably to save them the trouble of looking for areas where they can slash,'' Andaya said.

Villar said the House had argued that interest payments were touched by Congress in the past and that this had always been a gray area. Villar, however, said discretionary actions on the budget should stop.

overtureph

November 25th, 2006, 07:31 AM

A lesson from Vietnam for Filipino economists

Inquirer
Last updated 01:25am (Mla time) 11/25/2006

Published on Page A14 of the November 25, 2006 issue of the Philippine Daily Inquirer

VIETNAM serves a lesson that should shock and awe our mainstream economists if only they were not so dense. And this is: Developing countries can successfully resist the domination of the United States and other Western countries, win a war and prosper without foreign aid and advice.

The Nov. 18-19 Apec summit in Vietnam highlighted the “economic miracle” of Vietnam which, only three decades ago, had just emerged from 30 long years of anti-colonial war, starting in 1945 against the French and ending in 1975, after a 10-year war against the United States.

Fortune, America’s magazine that promotes capitalism, reported in its Nov. 20, 2006 issue: “Over the past 15 years, Vietnam has reduced the population living below the poverty rate of less than $1 a day to 8 percent from 15 percent -- a feat not even China can match.” It also noted that Vietnam has now the fastest-growing economy in the world, second only to China, with a GDP (gross domestic product) growth of 8.9 percent last year. GDP growth in China was 9.9 percent and in India, previously second to China, it was 7.6 percent. Foreign direct investment (FDI) as percent of GDP was 3.8 percent in Vietnam, 3.3 percent in China and .08 percent in India. All these take place even as the United States has rejected normal trade relations with Vietnam.

On the other hand, the poverty rate in the Philippines is around 40 percent (US CIA figures), despite continuing US economic and military aid. With a lower (as yet) per capita income ($660 for Vietnam and $1,400 for the Philippines), socialist Vietnam’s poverty level is much lower because of a more equitable distribution of income. The exodus from Vietnam after the US defeat has reversed -- more and more educated Vietnamese are returning to their homeland to participate in nation-building. In the Philippines, the diaspora goes on unabated.

The UN Conference on Trade and Development (Unctad) “has called on poor nations to be more interventionist and to strengthen their national economies in a similar manner to China,” according to an Agence France-Presse report dated Nov. 9, 2006. The annual report of the agency said that the standard reforms and deregulation promoted by the Washington-based World Bank and International Monetary Fund have failed to create enough growth or cut poverty. For 40 years, the Philippines has been a ward of the US-led WB-IMF. It has piously swallowed all the US-WB-IMF policy prescriptions but it has never gotten out of the purgatory of poverty.

Vietnam has used China as the model of its economic policies, after China copied that of Japan, the first Asian country to industrialize. Jose Rizal once counseled: If the Philippines must progress, we must study how other countries became successful economically and we must follow them. Our people must realize this or continue to live in humiliating poverty.

MANUEL F. ALMARIO (via e-mail)

Copyright 2006 Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

http://opinion.inquirer.net/inquireropinion/letterstotheeditor/view_article.php?article_id=34652

MAXTON

November 25th, 2006, 08:21 AM

Congress bicam panel OKs biofuels bill
P35-B annual savings seen

By Philip Tubeza, TJ Burgonio
Inquirer
Last updated 04:11am (Mla time) 11/24/2006

Published on Page A1 of the November 24, 2006 issue of the Philippine Daily Inquirer

IT’S THE COUNTRY’S “pioneer” legislation which mandates the use of fuel other than oil.

A congressional bicameral conference committee yesterday approved the proposed Biofuels Act of 2006 which requires the use of clean alternative fuels such as ethanol mixed with gasoline that is expected to save the country P35 billion in annual oil imports.

“This is the best Christmas gift our Congress can give to the Filipinos. Our people have waited long for this law to come to reality,” said Rep. Juan Miguel Zubiri of Bukidnon, the main author of the biofuels bill.

Members of the committee from the House of Representatives and the Senate met for five hours until 2 a.m. at the Rembrandt Hotel in Quezon City to reconcile differences in their respective versions of the bill.

After ratification by the two chambers, the bill will be sent to President Gloria Macapagal-Arroyo for her signature.

Zubiri said the measure would be the “pioneer legislation in the Philippines as far as the use of alternative fuels is concerned.” He said another bill pending in the Senate was the Renewable Energy Bill.

The proposed Biofuels Act provides for the mandatory use of biofuels, stating that all liquid fuels for motors and engines sold in the Philippines “shall contain locally produced biofuel components.”

Within two years from the effectivity of the law, the annual total volume of gasoline fuel actually sold and distributed in the country should contain at least 5 percent bioethanol, Zubiri said.

The amount of bioethanol in gasoline would be increased to 10 percent four years after the law is passed “as determined and recommended by the National Biofuels Board,” he said.

Some petroleum companies are already mixing in 10 percent ethanol with gasoline.

For diesel fuel, Zubiri said that a minimum of 1 percent biodiesel “by volume” would be blended into all diesel engine fuels sold in the country upon effectivity of the law’s implementing rules and regulations.

Indigenous raw materials

This amount would be increased to 2 percent within two years, he added.

“The sale of biofuels shall be VAT (value-added tax) zero-rated with the raw materials used, such as coconut, sugarcane, cassava and corn shall also be VAT zero-rated,” Zubiri said.

“We expect investors to expedite applications for ethanol plants, thus creating new employment for our people and in turn increasing the income for our farmers as the demand for their produce increases,” he said.

Zubiri said substituting 10 percent of the country’s imported oil with indigenous fuel would save the country P35 billion a year from its oil import bill.

He added that the country also had enough land planted to crops that can guarantee a steady supply of biofuel.

Grow oil

“We have the means to ride on the alternative fuels boom. We have 2.4 million hectares planted to corn, 3.2 million hectares to coconut, 390,000 hectares to sugarcane, 330,000 to cassava and camote,” Zubiri said.

“If we don’t have oil to drill, then we must grow oil from our soil. The lambanog that causes drunk driving can also run cars. Cassava is best not just as pie but petrol. And corn that can be made into healthy breakfast can also fuel our cars,” he said.

Zubiri said that those who attended the bicameral conference committee included Senators Aquilino Pimentel, Manuel “Mar” Roxas II, Sergio Osmeña III and Pia Cayetano.

The House contingent included Zubiri and Representatives Alipio Badelles (Lanao del Norte), Arthur Defensor (Iloilo), Bienvenido Abante (Manila), Eduardo Veloso (Leyte), Danilo Suarez (Quezon), Generoso Tulagan (Pangasinan), Luis Villafuerte (Camarines Sur), Jose Carlos Lacson (Negros Occidental), Alfredo Marañon III (Negros Occidental) and Florencio Noel (An Waray party-list).

Zubiri said the law’s passage would also be a signal to “at least a dozen investors” who were prepared to plunk in “billions of pesos” for factories that would produce fuel out of plants.

“The players are just waiting in the wings and are ready to go in once the regulatory framework is in place,” he said.

6 firms

Citing a report of the Biofuel Alliance, Zubiri said six firms were in the “exploratory stage of venturing into ethanol projects.”

The report identified the firms as Alcantara and Sons, Chemphil Group, Marubeni, the Teves Group of Negros Oriental, NU3 Food based in La Carlota City, Negros Oriental, the one in Pampanga led by the Cobarrubias family, and the Passi, Iloilo, consortium of sugar planters, Zubiri said.

“In addition, a foreign group, two sugar centrals and two companies that would like to manufacture coconut-based biodiesel are also interested,” he said.

Zubiri said that if these two companies decided to invest in biofuels, they “would join two early birds -- the San Carlos ethanol plant and another one in sugar-growing Bukidnon.”

Cut dependence on imports

“This is one of the most, if not the most, exciting piece of legislation passed by Congress because it will cut off our umbilical cord of dependence on fossil fuel from the Middle East and at the same time, reduce pollution,” Senate Minority Leader Aquilino Pimentel Jr. said.

Sen. Richard Gordon said the measure would not only reduce dependence on imported oil, it would also protect public health and the environment and generate jobs.

The bicameral conference, which began at around 8 p.m., proceeded smoothly for the next few hours with one panel quickly agreeing to adopt the other panel’s “superior, more comprehensive” provisions with a few amendments in a relaxed mood at the hotel ballroom.

What sparked long debates were the provisions in Senate Bill No. 2226 barring ethanol plants from operating within a certain distance of sugar mills, and empowering the Department of Energy to lower the mandated blends seven years after the law takes effect.

But in the end, the House and Senate panels reached a compromise.
http://newsinfo.inquirer.net/inquirerheadlines/nation/view_article.php?article_id=34485

nayki

November 26th, 2006, 04:25 AM

A new Delhi-based global conglomerate is building a multibillion-dollar international city in the Philippines to cater to the world’s second-home market.
Zoom Developer Ltd. has tapped the services of the country’s top architectural firm Palafox Associates to handle the master and urban planning requirements of the project, which involves some 10,000 hectares near Metro Manila.
“Aside from second homes or vocational houses for various nationalities, the international city will have complete facilities that will serve the needs of the residents including health, education, and even employment,” said Zoom Developers chief executive officer for infrastructure Rumneek Bawa.
“Our plan includes the construction of an industrial park as employment hub, a 6-star hotel, and an international convention center as part of its many world-class facilities, virtually making the project a tourism-related enterprise,” Bawa added.
He said Zoom Developers on Monday signed an agreement with existing firm in the Philippines to implement the project under a joint venture, which was brokered by Leon Katz, president of the US-based Commercial Brokers Inc. (www.cbire.com).
A commercial real state investment specialist, Katz was the one who also introduced urban planner Felino Palafox Jr. to Bawa and the joint-venture partner to start the project.
Katz said Palafox Developer had been tapped by Zoom Developer for its other property development projects in India and China using Filipino professionals.
Zoom Developers employs 8,000 employees of 19 different nationalities in four continents - North America, Europe, Middle East, and Africa.
With this international city project of Zoom Developers, the Philippines becomes the 10th host country of its global operations after United States, Canada, United Kingdom, Germany, Spain, Sri Lanka, United Arab Emirates, Mauritius, and Zimbabwe.
The company is engaged in large-scale production of cement, steel, aluminum, and other construction materials as it engage in engineering, information technology, infrastructure and real state development, among others.
Bawa said his company decided to expand in the Philippines, specifically in property development for the global second-home market, after the meeting with the Barlin Group of Companies in Hong Kong last September.

marites4

November 26th, 2006, 08:26 AM

Is that true. that's good news if it is. Whats the difference between a five star and a six star hotel. I'm kind of behind with these things.

evangelistik

November 26th, 2006, 04:28 PM

Is the Philippines Finally Turning Around?
Growth is up. The deficit is down. President Arroyo has survived impeachment threats. The service sector is thriving. Yet much remains to be done
by Assif Shameen

Workers are hurriedly putting together the finishing touches on the International Convention Center in Cebu, one of the Philippines' oldest cities, ahead of a summit of East Asian leaders next month. No one, not even Philippines President Gloria Macapagal Arroyo, is sure whether the new convention center will be ready in two weeks to receive dignitaries from Japan, China, South Korea, and Southeast Asia. Indeed, a nearby hotel may be dragooned as a backup venue.

However the fact that the center is even close to completion is significant. It is all part of a concerted rebranding effort underway under Arroyo's leadership for this sprawling archipelago—long viewed as a politically unstable economic underachiever. "We want the region and the world to see that the Philippines has arrived," Arroyo said during an exclusive interview with BusinessWeek.com on Nov. 20.

Maybe Arroyo has arrived too, in a way. That she is even around to host the summit is nothing short of a miracle. A year ago, Arroyo's five-year-old administration was under siege. Almost daily street demonstrators called for her ouster in what was billed as "People Power III." That was not a good place to be, considering two previous people power waves of protest led to the removal of dictator Ferdinand Marcos in 1986 and Joseph Estrada in January 2001.

Deficits Almost Eliminated
Amid rumors of military coups (that never transpired), Arroyo also managed to narrowly avoid an impeachment trial in the Congress over allegations of government corruption and vote fraud. Along the way, though, she stayed focused on economic reforms, pushing through tax hikes to cope with the country's massive fiscal problems and ushering in other revenue-boosting measures. The economy is now in the best shape it has been since the 1950s. "I have said all along there is no gain without pain," she points out.

Economists have boosted growth forecasts this year to 5.6%—and to more than 6.5% in 2007. Chronic budget deficits have almost been eliminated in a nation that was under scrutiny from credit agencies as a government-default candidate. Moreover, foreign investors are testing the waters again. Foreign direct investments hit $1.2 billion last year and likely will grow to $2 billion this year based on preliminary data. "We are now ready for a take-off," Arroyo insists.

Analysts enjoy the Philippines turnaround story even though they say much more needs to be done. "Stronger economic fundamentals and growth are starting to feed off one another," notes Rob Subbaraman, an economist for Lehman Brothers in Hong Kong.

Long Way to Go
Indeed, he is so impressed with the turnaround that Subbaraman says "credit rating agencies should start rewarding the Philippines for its economic growth" with upgrades. "The reforms have reached a critical point where virtuous spirals are developing," he thinks.

Others warn against complacency. Manu Bhaskaran, a regional economist with consultancy Centennial Group in Singapore, believes that "although Philippines has made all the right noises, done a lot of the necessary things, and moved forward on painful restructuring and reforms, it still has a long way to go" because the rest of Asia hasn't stood still. "They need to build infrastructure, invest in education, deregulate, privatize state assets," he adds.

Still, none of this is to downplay Arroyo's successful shock therapy. She sold higher taxes to the public by declaring clearly the country was "in the midst of a fiscal crisis" about two and a half years ago. As a result, public sector deficit as a percentage of gross domestic product has fallen to 2%, from 5.5% in 2003. This year the Philippines budget deficit looks set to narrow and may be eliminated by 2008. A "balanced budget and lower public debt means there is money available to build infrastructure," says Cabinet Secretary Ricardo Saludo.

Cash From Abroad
Good times elsewhere in the region are also boosting Philippines economic growth both in terms of exports, and the huge wave of remittances that come from the country's massive diaspora of workers overseas. That is in turn boosting domestic spending.

Filipino workers—maids in Hong Kong and Singapore, construction and hospitality industry workers in the oil rich Middle East, and health-care professionals in Europe and North America—are expected to send back $12.3 billion worth of wages and savings to family members in 2006 through official channels and perhaps another $1.1 billion through unofficial ones.

And given the country's critical role in supplying global health-care workers, that inflow of capital seems sure to continue. Nearly 10 million Filipinos now work overseas and Saludo thinks the health-care needs from aging populations abroad is creating new job opportunities for Filipino nurses and caregivers. "We are training more nurses and caregivers to cope with this global shortage," he says. Some analysts think overseas remittances could rise to $20 billion over the next five years.

Some Resentment Remains
The country is trying to develop more service sector jobs rather than compete with China and Vietnam, where wages are extremely low, for manufacturing ones. "Not every country can be the factory to the world and just export manufactured goods," says Saludo. "While we are trying to revive and grow our manufacturing sector, we are focusing on strength in services like tourism and outsourcing."

While some Filipinos still resent Arroyo for her tax hikes and subsidy cuts, foreign investors have reason to be fans. The Manila Composite Index is up 45% this year, one of the best performances worldwide in 2006. There is a fairly strong pipeline of privatization deals through the end of the year. And Arroyo is now developing ambitious new plans to develop 'super-regions' on the island chain.

Remarkable Turnaround
One development involves a new expressway between two former U.S. military bases—the Subic naval base and Clark airbase—which will connect with a new port and airport. She recently unveiled a $20 billion infrastructure spending program that will help the Philippines catch up with the rest of Asia.

If Arroyo can avoid any major scandals and keep up the economic reforms during her remaining three-plus years in office, a sustained revival is a real possibility for the Philippines. If so, it would be one of the more remarkable turnaround stories in the developing world. And her legacy could be a substantial one.

Source: Businessweek Asia. http://www.businessweek.com/globalbiz/content/nov2006/gb20061122_205897.htm?chan=globalbiz_asia_today%27s+top+story
November 22, 2006, 9:19AM EST

marites4

November 26th, 2006, 07:24 PM

It's scary. fingers crossed.

AH-7Raja

November 27th, 2006, 04:00 AM

whats scary about it? hey man be proud atleast GMA is doing a fine job for us!

no matter how she sounds and looks, mag mukha man syang pandak na tsonggo, binabaeng hitler, etc., karamihan naman dyan ay mga paninira lang ng mga siraulong komunista pati mga kalaban nya sa politika na ayaw mawala ang hudas na "pork barrel" nayan.

kaya kahit anong sabihin ng mga tao sa kanya, as long as she's uplifting our economy, she's good. thats all we care. ofcourse there is no overnight magic here, slowly we will grow higher and poverty will go down gradually.

then we can dance again when we gain our long lost glory years! :banana:

marites4

November 27th, 2006, 05:04 AM

it's scary that things are going good and then some idiot will throw a hatchet and shit will hit the fan.
Can't people read between the lines.

Louman

November 27th, 2006, 07:07 AM

it's scary that things are going good and then some idiot will throw a hatchet and shit will hit the fan.
Can't people read between the lines.

Did someone say President (name of celebrity/religious leader/communist/coup leader with no political experience, as in holy-shit-did-the-country-just-vote-to-send-itself-back-three-decades-in-economic-achievements) ? lol

heathcliff

November 27th, 2006, 10:24 AM

it's scary that things are going good and then some idiot will throw a hatchet and shit will hit the fan.
Can't people read between the lines.

Well, her political enemies are laying their cards on the forthcoming elections. If what the surveys are saying will be realized, then all GMA's efforts could go down the drain. More than ever, we should join forces behind her and not allow that family reunion in the Senate to happen. We should also watch out for the seats in the House of Representatives. If the opposition gets enough seats there, they could easily oust GMA, evidence or no.

chixbebe

November 27th, 2006, 10:48 AM

Megaworld sees revenues growing 49% to P13.33B

Upscale property developer Megaworld Corp. expects its revenues to grow by 49.3 percent to P13.33 billion next year on real estate sales of nearly P10 billion.

In documents filed with the Philippine Stock Exchange (PSE), Megaworld said the company is expecting to post a real estate sales of P6.16 billion for this year, mainly coming from its residential condominium projects in McKinley Hill, Forbes Town Center in Fort Bonifacio, Taguig City and Eastwood City in Libis, Quezon City.

Megaworld is eyeing a net profit of P1.9 billion by the end of the year from only P1.17 billion in 2005. The figure is expected to increase further to P2.88 billion in 2007.

Rental income is seen to rise by 37 percent to P956.29 million from the projected 2006 figure of P698.29 million due to escalation and new leases booked during the year.

Hotel revenue is likewise projected to increase by 10 percent year-on-year. The company expects hotel revenues to reach P230.68 million and P254.06 million this year and next year, respectively.

Megaworld said the collection of receivables will be based on the usual terms of payments to the buyers between 40 and 48 months.

For next year, Megaworld said it is allotting P7.6 billion for the development of new projects and landbanking activities.

Funding will come from the company’s planned P10 billion stock rights offering in early 2007. The bulk of the sales proceeds or P4 billion will go to the development of the hotel, retail and office components of Cityplace, Megaworld’s first project in Manila’s Chinatown.

About P3 billion has been earmarked for landbanking activities, P2 billion for working capital requirements and the remaining P1 billion for the continued expansion of Eastwood’s business process outsourcing office building.

Megaworld is offering two shares for every five common shares held by stockholders as of record of December 15 at a price to be determined on December 7, based on a 10 to 30 percent discount to the last 10 trading days‚ volume weighted average price.

The offering will run from Jan. 2 to 9 while the listing of the shares has been set on Jan. 17.

sandrn

November 28th, 2006, 03:01 AM

RP govt bonds fastest-rising in Asia amid bid to cut deficit
http://www.businessmirror.com.ph/front04.php
By Kabir Chibber and Wes Goodman
Bloomberg

PHILIPPINE government bonds are rising the most in Asia as faster economic growth helps President Arroyo fulfill her pledge to eliminate the budget deficit.

The nation’s peso-denominated debt returned an average 6 percent this quarter, the most among 10 Asian bond markets tracked by HSBC Holdings Plc. The gain for the whole region was 2.8 percent. The price of the country’s 7 percent 10-year notes maturing April 2016 gained 10.2 percent.

“We saw some value, we bought,” said Marco Miguel Javier, who helps oversee the equivalent of $4.8 billion in Manila at BPI Asset Management, the biggest Philippine money manager.

“The government’s on track for its budget targets. I’m bullish.”

The rally marks a turnaround from June when 10-year yields surged to the year’s high, partly as Parliament blocked budget proposals, opposition lawmakers tried to impeach Arroyo and after street protestors sought her resignation.

The yields rose to 12.2 percent on June 15, the highest in Asia after Indonesia. They fell back on signs of progress toward Arroyo’s goal of ending the budget deficit by 2008. The government on July 17 reported a third monthly fiscal surplus, the longest run in almost 11 years.

Extra yield

The 7-percent bond fell last week after Bangko Sentral ng Pilipinas, led by Governor Amando Tetangco, suggested it may reverse a November 2 interest-rate cut. The yield rose 12 basis points to 6.80 percent.

The extra yield investors earn on 10-year dollar-denominated Philippine bonds over US Treasuries of a similar maturity has narrowed to 1.89 percentage points from 2.94 points in June.

Ng Kheng Siang, who helps manage $183 billion of debt at State Street Global Advisors in Singapore, predicts bonds will resume gains, pushing yields to 6.5 percent by the end of June. That would give investors a 5.5-percent return.

“There was bound to be some correction,” said Ng.

“Fiscal improvements will still underpin the market. I’m sanguine about the prospects for the bonds.”

Moody’s Investors Service on November 2 raised its rating outlook on Philippine debt to stable from negative as a narrower deficit reduces the risk of a default. The shift means Moody’s isn’t inclined to cut its B1 rating, which is four levels below investment grade.

Credit-default swaps

The country had P3.95 trillion ($80 billion) of outstanding debt in August, according to the Treasury.

A credit-default swap based on $10 million of the government bonds fell to $130,000 per year from $257,000 five months ago, according to data compiled by Bloomberg. The five-year contracts, conceived to protect bondholders against default, pay the buyer face value in exchange for the notes in the event of a default.

Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a country’s ability to repay debt.

An improved rating outlook may lower government borrowing costs that eat up about a third of Mrs. Arroyo’s budget.

The government may pay less interest on its P6-billion sale of 20-year bonds on December 5. The yield on the bonds has dropped 81 basis points to 8.29 percent since securities of the same maturity were last sold on September 19.

‘Most important’

“The most important issue for the Philippines has been fiscal consolidation and the accounts have really improved,” said Nicolas Schlotthauer, who helps manage $4.5 billion in emerging-market debt at DWS Investment GmbH in Frankfurt.

Schlotthauer has added to holdings of Philippine debt this year.

Some investors say gains in bonds have gone too far.

The rally turned into a rout after central bank Deputy Governor Diwa Guinigundo on November 21 said policymakers will review a November 2 decision to lower the overnight rate on deposits of more than P10 billion to 3.5 percent from 7.5 percent.

“There’s a lot of complacency and an underappreciation of risk,” said V. Anantha-Nageswaran, Singapore-based head of Asia and Middle East research at Bank Julius Baer & Co., Switzerland’s largest independent money manager. Bonds “are overvalued.”

The yield premium for holding Philippine 10-year debt denominated in dollars over that of the US should be around three percentage points, he said.

Budget deficits

The Philippines has suffered persistent budget deficits, and decades of political and economic instability.

Bonds pared losses between November 22 and 24 as investors bet the economy will grow faster and inflation will slow.

The International Monetary Fund on November 17 raised its forecast for Philippine economic growth this year and next, citing rising exports and improved investment prospects.

It increased this year’s growth forecast to 5.5 percent, from 5 percent, and for 2007 to 5.8 percent from 5.5 percent, according to a statement released in Manila.

Slower inflation

Finance Secretary Gary Teves on November 16 said this year’s deficit may narrow to P100 billion, 20 percent less than he initially forecast, as the government raised value-added tariffs and clamped down on tax evasion.

The Arroyo administration forecasts inflation may slow to 4.3 percent next year as falling fuel prices and a stronger peso cut import costs. Consumer price increases will probably average less than 6.6 percent in 2006, according to the central bank.

“There’s been a huge improvement in the fiscal situation in the Philippines,” said Simone Gervasi, a money manager in Milan at CAAM SGR SpA, a unit of Credit Agricole SA, France’s second-largest bank by assets. “It’s looking very positive.”

sandrn

November 28th, 2006, 03:55 AM

Gov't hopes to prepay ODA loans
http://business.inquirer.net/money/topstories/view_article.php?article_id=35099
Inquirer
Last updated 03:36am (Mla time) 11/28/2006

AFTER announcing plans to retire some of its Brady bonds earlier than scheduled, the government will look for ways to prepay some debts in the form of official development assistance (ODA), National Treasurer Omar Cruz said.

The credit terms of some ODA do not allow prepayment, but "if there is an opportunity to pay [ODA] in advance, then we will do so," Cruz told reporters.

The country's biggest sources of ODAs are the Japan Bank for International Cooperation, the Asian Development Bank and the World Bank.

This year, about $900 million of the $4-billion total foreign debt requirement is ODA. Next year, the government intends to borrow $1.2 billion worth of ODA.

The Bureau of the Treasury earlier announced that it would exercise in December its call option to retire $165.3 million worth of Brady bonds earlier than scheduled.

"This prepayment is part of the debt management strategy of the government intended to reduce its dependence on foreign borrowings," Cruz said. With INQ7.net

3cr

November 28th, 2006, 08:52 AM

Factories relocating due to high power costs
Daily Tribune
11/28/2006
http://www.tribune.net.ph/business/20061128bus1.html

The high cost of electricity is driving away hundreds of foreign investors from the Philippines, leading to huge job losses and anemic economic growth, Benpres Holdings Corp. chief executive and chairman Oscar Lopez said.

Lopez urged the government to slash taxes and royalties and to plan well ahead for the needs of the next generation despite overcapacity that he said has plagued the sector since 1999.

Lopez’s flagship Benpres, owns power plants and power distributor Manila Electric Co. (Meralco), among others.

His son Federico Lopez, president of unit First Gen Corp., said Meralco has lost betwen 400 and 500 industrial subscribers over the past year, which suggests manufacturers may be moving elsewhere “due to high power rates.”

Oscar Lopez, his father, said the Philippines had one of the world’s lowest electricity rates in the late 1960s but this regime was gone forever due to peso depreciation, inflation and rising oil prices.

While Lopez blamed the government for using the price of electricity as a political tool by “suppressing and subsidizing power prices” instead of addressing the root cause of high costs, Benpres’ independent power producer (IPP) operator First Gen Corp. announced plans to bid for more hydroelectric and geothermal plants owned by state-run National Power Corp. (Napocor).

First Gen echoed Lopez’s call for the government to consider scrapping taxes and hefty royalties on indigenous power sources such as natural gas, hydroelectric and geothermal to lower prices and woo investment.

“We will go for most of the hydro assets, geothermal assets,” First Gen vice chairman and chief executive Peter Garrucho told reporters, adding the company would be selective about coal-fired plants being sold by debt-laden Napocor.

Despite a surplus generating capacity, the average industrial tariff in the country is 11 cents per kilowatt-hour, about double that of neighbors and foreign direct investment (FDI) rivals Malaysia, Indonesia, Thailand and Vietnam, Lopez said.

Lopez, chief executive and chairman of Benpres Holdings Corp. said an outmoded royalties and tax regime kept power rates high and drives the industry toward imported energy supplies such as coal and oil.

“It’s a major obstacle that holds us back from competing effectively with neighboring Asian countries for manufacturing jobs,” he told the Foreign Correspondents Association.

Benpres also owns interests in broadcasting, toll roads, construction, property and electronics.

Despite the deregulation of the power sector in 2001 and increased use of locally available power generation to about 70 percent of total demand, “we still haven’t narrowed the gap in our electricity prices vis-a-vis our neighbors,” he said.

Lopez-owned power plants use natural gas from the offshore Malampaya field but its gas purchase agreement was indexed to crude oil prices, which have more than quadrupled compared to 1998.

Meralco is still repaying customers about P30 billion in charges that the Supreme Court ruled illegal three years ago. AFP

MAXTON

November 28th, 2006, 11:08 AM

Product trends favor RP electronics

http://www.mb.com.ph/BSNS2006112880885.html

By BERNIE CAHILES-MAGKILAT

The continuing strong demand for wireless communications devices, notebook computers, and a variety of products that enable Internet connectivity will most likely drive the growth of the electronics industry in the Philippines, said Arthur Tan, president of the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI).

"This trend favors Philippine-based semiconductor companies producing digital signal processors or DSPs and analog integrated circuits (IC), storage device and mobile handset, original equipment manufacturers (OEMs), and electronics manufacturing service (EMS) providers catering to these segments," explained Tan.

Global sales of DSPs, added Tan, are projected to grow at a compounded annual growth rate of over 16 percent until 2009 due to the continued increase in demand for mobile phones. "For Philippine-based companies, there are plenty of outsourcing opportunities from OEMs in the automotive, medical, and industrial electronics segments."

Electronics make up the major bulk of Philippine exports. In 2005, Philippine electronics exports reached billion. The Philippine produces 100 percent of Nokia’s DSPs and 80 percent of Siemen’s and Ericsson’s under Texas Instruments that is based in the Philippines for three decades.

Likewise, the Philippines supplies 50 percent of the world’s requirements for hard disk drives from top three global suppliers: Fujitsu, Toshiba, and Hitachi.

In the forthcoming ASEAN Electronics Business Opportunities Exhibition and Conference (AEBOEC) and reverse trade fair (7 December, Makati Shangri-La), Philippine-based companies look forward to partnering with other companies in the Asean, as well as attract potential investors.

Other exhibitors in AEBOEC are companies from Thailand , Indonesia , Singapore , Malaysia , and Cambodia . Expected delegations to the exhibit are members of the British Trade and Investment Center and Korea Trade Investment Promotion Agency.

Reports said that most electronics buyers are adopting a ‘ China plus’ strategy instead of relying heavily on China for its electronics requirements. As such, countries like the Philippines stand to benefit from the strategy.

The Philippines has established a solid reputation in electronics manufacturing. Large multinational and semiconductor companies and homegrown EMS providers have served global demand for many years. Every year, the country produces 72 million magnetic heads, 36 million DSPs, 30 million hard disk drives or HDDS, 11 million liquid crystal display units (LCDs), and 8 million optical disk drives (ODDs).

Some of the global electronics companies in the Philippines are Intel, Texas Instruments, and Philips. Three of the largest HDD producers in the Philippines are Hitachi , Fujitsu, and Toshiba.

"Developing our competency is the top priority of the industry. We aim to upgrade the skills of Filipino engineers to meet the industry’s requirements, and elevate the industry to higher value activities to attain and attract investments," said Tan.

Together with the government and the academe, SEIPI established the Advanced Research and Competency Development Institute to provide training and competency development support for the industry.

SEIPI has identified seven key program for the country’s electronics and semiconductors industry for 2006-2007: competency development, allied and support industry development, retention of existing companies and attraction of new companies, values formation and cultural transformation, government advocacy, organizational improvement, and focused marketing of the country industry in the US, Europe, Japan, and Asia.