Globalization and International Trading (Import/Export)

[kiretoce]

Post away folks!


Link to Thread 1 in the Archives.

[jpdm]

RP yet to substantially
benefit from free trade

Malaya Business Insights
Dec.4, 2009

The Philippines has yet to substantially benefit from the growth opportunities of free and open markets, according Ambassador Manuel A.J. Teehankee, head of the delegation of the Philippines at the 7th session of the World Trade Organization Ministerial Conference the other day in Geneva, Switzerland.

Teehankee said that while in the last eight years the Philippines did finally achieve a level of economic stability with an average real growth in GDP of 4.8 percent based on policies that are anchored on open markets and economic fundamentals, "our experience and experimentation demonstrates that much more needs to be, and can be, done for or the Philippines to substantially benefit from the growth opportunities of free and open markets."

Even as we have experienced some economic stability, Teehankee said, the Philippines had in the past 20 years experience various boom-bust cycles generated by balance of payment problems, oil embargoes, political instability, global economic slowdowns, the Asian financial crisis, and many internal factors like low savings ratios, and low tax collection rates.

Teehankee said the Philippines had embraced industrialization, trade liberalization, and globalization, in the hope of winning the fight against poverty and underdevelopment.

But without specifying the Philippine experience, Teehankee said developing countries have sometimes adopted trade liberalization measures even without the required capability to compete with the more efficient firms of developed countries.

"To some extent, this has led to the closure of many domestic companies and the unemployment of personnel not prepared or adequately re-trained for other employment," Teehankee said.

"Globalization and trade liberalization have not necessarily improved and corrected persistent inequalities between and within countries," Teehankee said. At the working session 2 on "The WTO’s Contribution to Recovery, Growth and Development," Teehankee warned of the use of non-tariff measures in preventing the Philippines as well as other developing economies, gain market access.

During the session, Teehankee also pointed to making use of "aid of trade" for the Philippines and other beneficiary countries in helping them cope with the global financial crisis.

Teehankee warned the proliferation of non-tariff measures as a challenge that developing countries like the Philippines could face in trying to gain market access through the benefit of reduced tariffs.

"(Such challenge) would slow the phase of our development," Teehankee added.

Teehankee outlined how aid for trade can contribute to the recovery and growth process of beneficiary countries like the Philippines especially in the aftermath of the crisis when additional resources need to be mobilized.

He urged the WTO to spearhead a collaboration which addresses core problems for developing countries such as trade-related infrastructure, productive capacity, and domestic capacity, among others. (Irma Isip)

[DoggMann]

.... THE NEXT BUBBLE TO BURST....

... print print print ... print print print...



http://www.youtube.com/watch?v=eZA0q...el=inflationus

[TambayBlues]

Eto may nagkwenta ng balance sheet ng America. Looks like it validates the video posted by Doggman...

Run on the US Dollar

Nov 30, 2009 - 04:33 PM
By: DailyWealth

Porter Stansberry writes: It's one of those numbers that's so unbelievable you have to actually think about it for a while...

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.

Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from?

How did we end up with so much short-term debt? Like most entities that have far too much debt – whether subprime borrowers, GM, Fannie, or GE – the U.S. Treasury has tried to minimize its interest burden by borrowing for short durations and then "rolling over" the loans when they come due. As they say on Wall Street, "a rolling debt collects no moss."

What they mean is, as long as you can extend the debt, you have no problem. Unfortunately, that leads folks to take on ever greater amounts of debt... at ever shorter durations... at ever lower interest rates. Sooner or later, the creditors wake up and ask themselves: What are the chances I will ever actually be repaid? And that's when the trouble starts. Interest rates go up dramatically. Funding costs soar. The party is over. Bankruptcy is next.

When governments go bankrupt, it's called a "default." Currency speculators figured out how to accurately predict when a country would default. Two well-known economists – Alan Greenspan and Pablo Guidotti – published the secret formula in a 1999 academic paper. The formula is called the Greenspan-Guidotti rule.

The rule states: To avoid a default, countries should maintain hard currency reserves equal to at least 100% of their short-term foreign debt maturities. The world's largest money-management firm, PIMCO, explains the rule this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

So how does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.

The U.S. holds gold, oil, and foreign currency in reserve. It has 8,133.5 metric tonnes of gold (it is the world's largest holder). At current dollar values, it's worth around $300 billion. The U.S. strategic petroleum reserve shows a current total position of 725 million barrels. At current dollar prices, that's roughly $58 billion worth of oil. And according to the IMF, the U.S. has $136 billion in foreign currency reserves. So altogether... that's around $500 billion of reserves. Our short-term foreign debts are far bigger.

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So looking only at short-term debt, we know the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months. That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months – an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So... where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.

Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes this month. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they're not going to do is buy more of our debt. Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None owns even 1% of its total reserves in gold.

All of this is going to lead to a severe devaluation of the U.S. dollar... Which I expect to happen within 18 months. I examined these issues in much greater detail in the most recent issue of my newsletter, Porter Stansberry's Investment Advisory, which was published last week. Coincidentally, America's paper of record – the New York Times – repeated our warnings (nearly word for word) last weekend. Word is getting out.

If you haven't taken steps to protect yourself from the coming devaluation – like owning gold and silver bullion, foreign real estate, and farmland – make sure you do it soon. The dollar rout is coming.

[jpdm]

Point is, the Philippine economy should be wiser and stop depending to much on the US or even the Japanese economy.

We have to diversify our economy and integrate it with other countries.

[Christendom]

Originally Posted by jpdm

Point is, the Philippine economy should be wiser and stop depending to much on the US or eve Japanese economy.

We have to diversify our economy and integrate it with other countries.

strong pa rin ang privatization technique nila...daming little thinktank at daming big brother

[jpdm]

RP doing better than most N-11 members

BY JIMMY C. CALAPATI
Malaya Business Insights
Dec 9, 2009

The Philippine economy is seen doing better than other emerging countries in the N-11 basket, according to global think tank Goldman Sachs and Co.

"The BRIC and N-11 economies, collectively, appear to be emerging from the global credit crisis better than the major economies. Within the N-11, Indonesia and the Philippines have positively surprised," Goldman Sachs said in its latest Economics Paper.

The term BRIC, for Brazil, Russia, India and China, was first used by Goldman Sachs economists eight years ago.

In 2005, the same economists coined N-11 or the next 11 economies that are worth keeping an eye on outside of BRICS.

The Philippines is one of these 11.

In Goldman Sach’s latest research note, the Philippines is seen doing better than most in the N-11 basket.

Within the BRIC and N-11 countries, the economists at Goldman Sachs said they can currently identify three groups:

The first group includes economies that have surpassed expectations. China is at the top of the list that, within BRIC, would also include Brazil and India.

"Of the N-11, we would include Indonesia and the Philippines in this group," Goldman Sachs economists said.

A second group contains countries that have largely performed in line with early projections, namely, Bangladesh, Egypt, Korea, Turkey, Nigeria and Vietnam.

The third group includes countries that have largely disappointed: Iran, Pakistan and Mexico.

While overall the BRICs and N-11 saw much sharper contractions than the developed countries, Goldman Sachs said that they also saw much stronger rebounds.

"Within the two groups, this picture is not uniform, and the extent of differentiation in the magnitude and speed of rises and falls is extraordinary," it said.

A number of countries are already back at their pre-2007 levels on a number of metrics, while others are recovering more slowly.

In terms of the differentiation, Goldman Sachs said it can identify three broad groups.

"One group comprises those that have displayed remarkable resilience during the global financial crisis.

This group of "winners" includes Brazil, China, India, Egypt, Indonesia and the Philippines. They have experienced a relatively mild slowdown, and have shown an impressive rebound in growth and activity this year, Goldman Sachs said.

It added that at the other end of the spectrum, Iran, Mexico, Pakistan and Russia have suffered more from the crisis.

"They stand out given the depth of their recessions and sluggishness of recoveries," Goldman Sachs said.

In-between lies another group that includes Korea, Nigeria, Turkey and Vietnam, which have also seen impressive rebounds despite relatively sharp contractions.

Goldman Sachs said the N-11 contribution to world growth has risen by a modest 1 percent in the last two years to 11 percent.

The contribution from all emerging markets as a whole was over 80 percent, as compared to the 2000-2006 average of 45 percent.

The G7 has only contributed 20 percent in the past two years.

While the 2000-2006 contribution to global growth was almost equally split between the developing and developed world, the last two years saw the trend change sharply, with the divergence mainly driven by the BRICs.

"On an individual country basis, all of the BRICs and seven of the N-11 (Bangladesh, Egypt, Indonesia, Iran, Nigeria, Philippines and Vietnam) contributed more to world growth in 2007-2008 than from 2000 to 2006," Goldman Sachs said.

The Philippine economy posted a modest expansion in the third quarter, backed by consumption, the government reported on Thursday.

The National Statistical Coordination Board (NSCB) said the gross domestic product, or the sum of all goods and services produced within the country, for the July to September period was at 0.8 percent, within the government’s forecast of 0.8 percent to 1.8 percent expansion for the whole year.

In the year’s first half, the country’s economy expanded one percent.

Analysts had said personal consumption expenditures (PCE), boosted by steady remittance from overseas Filipinos, likely supported the economy’s growth in the third quarter. PCE makes up about 70 percent to 80 percent of the GDP.

[jpdm]

Climate change: Rich must fund poor nations


Friday, 11 December 2009 00:00
Manila Times

FIRST, it looked like the division of the house in the ongoing UN Climate Change Conference in Copenhagen was clearly between the rich, developed nations and the poor, economically and industrially developing nations together with the poor, rather economically and industrially underdeveloped nations.

To simplify the dichotomy:

The rich countries are neither willing to make larger reductions in their greenhouse gas emissions nor willing to accelerate their reductions so that the goal of nearly no emissions is reached before our planet becomes irreversibly doomed. (The doom scenario is based on calculations of the scientists favored by the UN’s Intergovernmental Panel on Climate Change.)

The poor countries want the rich ones to increase their GHG reduction targets and schedule the reductions faster. They refuse to curb their own emissions according to the targets the rich countries want because this would mean retarding their (the poor nations’) industrial development, economic progress and ability to reach the level of prosperity and global competitiveness enjoyed by the rich.
And the poor nations also want the rich to fund their projects to acquire and develop technology to achieve zero emissions. They make this demand (which President Gloria Arroyo articulated eloquently in the last Asean summit with key developed nations) because they rightly see that the rich and developed countries reached their level of wealth and development by causing much of the ecological harm to our planet.

The harm the industrialization and economic success of the rich countries caused over the past century created the global warming and weather effects that hit the poor countries hardest. These have scant resources to mitigate the severe rains, typhoons, flooding and rising of the sea that devastate their farms and cities (just as Ondoy, Pepeng and Santi recently did to us.) Therefore, the rich countries must make up for their abuse of the planet and endangering the poor countries by funding their climate-change projects.

New division among developing countries

Then, in the past couple of days, however, a new dichotomy has surfaced within the ranks of the developing and poor countries.

China is the perceived—and in effect the self-appointed—leader of the developing countries and the Philippines seems to accept this pecking order. China has been insisting, prior to the opening on Monday of the Copenhagen conference, that (as President Arroyo had also stressed) the developed nations must provide adequate funding to help poorer countries fight climate change and its effects. Chinese officials, the official media of the People’s Republic and of the Chinese Communist Party, have called for “fairness and justice” and for the rich countries to accept the responsibility of helping the poor countries, which contribute so little to global warming, pay for their “transition to cleaner economics.”

“Whether developed nations, as repeatedly promised, can provide short-term financial aid to poor countries, and gradually establish a long-term support mechanism . . . is the key to realizing this fairness and justice,” said an editorial of the state-run Beijing News. And the Communist Party’s People’s Daily ran a commentary, saying: “Developed countries should promise . . . to provide more funding and technical assistance to developing nations, to help them achieve emissions reductions.”

As if to validate the Marxist thesis-antithesis-synthesis description of socio-political progress, in Copenhagen there is now a division within the poor and developing nations’ camp. (The thesis-antithesis-synthesis formulation is wrongly used to describe the thought of Hegel, thus the so-called Hegelian Dialectic. But Hegel never used these terms. Marx and Engels adopted the formulation to elucidate their theory on poverty, society and the political economy.)

As China, the World’s No. 1 GHG emitter, continued to press for more action and aid from rich developed countries, which China again accused of reneging on their promises to cut their emissions and to give financial support to poorer countries to cope with the effects of global warming, Tuvalu, a small Pacific island country, submitted a proposal to have a “legally binding amendment” to the 1997 Kyoto Protocol that would demand stricter and more substantial GHG emission reductions not just on the developed countries but also on China, India and the other richer and more successful emerging economies.

Support the Tuvalu proposal

Tuvalu and other Pacific islands fear being submerged by the rising seas when the ice caps melt. The Tuvalu proposals, backed by the poorest countries most vulnerable to climate change, want the major emerging nations to make heavy reductions in their emissions by 2013. China and India (two of the BRIC nations), Saudi Arabia and other rich developing nations, oppose the Tuvalu proposal.

The tiny island states and African countries reject the goal of limiting the rise in global temperatures to 2.0°Celsius (3.6 degrees Fahrenheit) from pre-industrial levels. This seems to be acceptable to most of the 192 countries in the Copenhagen conference although it was proposed by the world’s richest and most industrialized G-8 nations.

Tuvalu and others want to set a lower temperature rise cap of only 1.5 Celsius (2.7 Fahrenheit). They think this lower increase of heat would give their countries a chance of not being devastated by deep flooding or deadly drought.

Tuvalu’s head delegate, Taukiei Kitara, said on Thursday that the biggest emission constraints would still be on the rich developed countries but there must also be large demands on the rich and most polluting developing economies, foremost of which is China.

Where does the Philippine delegation stand on this controversy in Copenhagen? We tried but failed to get that information up to press time.

The Philippines must support the Tuvalu proposal. Most of our most important cities are extremely vulnerable to high sea rising after all—just like Tuvalu.

[jpdm]

Copenhagen, Climate and Globalization

Written by Walden Bello
Monday, 14 December 2009 18:41
Business Mirror

STARTING last week, representatives to the United Nations Climate Conference in Copenhagen started to wrestle with the challenge of climate change. At about the same time, influential actors in the World Trade Organization Seventh Ministerial Conference taking place in Geneva are trying to push for a conclusion to the nine-year-old Doha Round of trade negotiations. The two meetings are at cross-purposes and their juxtaposition highlights a profound reality: The world has to choose between free trade and effective climate management.

The global downturn: Relief for the climate

The last 12 months have seen the unraveling of a particular type of international economy: export-oriented and marked by the accelerated integration of production and markets. This globalized economy has been transportation-intensive, greatly dependent on ever-increasing, long-distance transportation of goods. For instance, a plate of food consumed in the United States travels an average of 1,500 miles from source to table. Transportation, in turn, is fossil-fuel intensive, accounting in 2006 for 13 percent of global greenhouse-gas emissions (GHG) and 23 percent of global carbon-dioxide emissions.

A downturn in the export-dependent global economy thus brings about a significant downturn in carbon emissions as well. It spells relief for the climate. In 2009, the drop in the level of greenhouse gas emissions (GHG) has been the largest in the last 40 years. The thousands of ships marooned by lack of global demand in ports such as New York, Singapore, Rio de Janeiro and Seoul means a significant reduction in the use of high-carbon Bunker C oil, which is used in 80 percent of ocean shipping. The cutback in air freight has meant a significant reduction in the use of aviation fuel, which has been the fastest growing source of GHG emissions in recent years.

Deglobalization as opportunity

In response to the collapse of the export-oriented global economy, many governments have fallen back on their domestic markets, revving them up via stimulus programs that put spending money in the hands of consumers. This move has been accompanied by a retreat from globalized production structures or “deglobalization.”

Writes the Economist, “The integration of the world economy is in retreat on almost every front.” While the magazine says that corporations continue to believe in the efficiency of global supply chains, “like any chain, these are only as strong as their weakest link. A danger point will come if firms decide that this way of organizing production has had its day.”

For many environmentalists and ecological economists in the South and the North, the unraveling of the export-oriented global economy spells opportunity. It opens up the transition to more climate-friendly and ecologically sensitive ways of organizing economic life. But the fossil fuel-intensiveness of global transport and freight is merely one dimension of the problem. Environmentalists insist there must be a change in the reigning economic model itself. The global economy must make a transition from being driven fundamentally by overproduction and overconsumption to being geared to real needs, marked by moderate or low consumption, and based on sustainable and decentralized production processes.

Accordingly, the assumption of most policymakers in the North that consumption trends can continue—and that the only challenge is the transformation of the energy mix and the adoption of technofixes such as biofuels, “clean coal,” nuclear power, carbon sequestration and storage, and carbon trading—is not only based on illusions but positively dangerous. Indeed, the climate problem cannot be addressed strategically without addressing the inherently environmentally destabilizing dynamics of capitalism —its incessant drive, motivated by the search for profit, to transform living nature into dead commodities.

Instead of heralding this transition to a much less fossil-fuel-intensive and ecologically sustainable production, most technocrats and economists see only a temporary retreat from export-led growth until global demand makes the latter viable again. The policy debate in establishment circles focuses on who will replace the bankrupt American consumer as the engine of global demand. With Europe stagnant and Japan in almost permanent recession, the hope is that China’s growth will be the basis of global reflation. This is a mirage. China’s 8.9-percent annualized growth in the last quarter is due to their current stimulus, a $585-billion program that has been funneled mainly to the countryside. Domestic demand will likely cease to grow once the money is spent. A limited spurt of cash will not transform Chinese peasants into the saviors of the global economy. After all, because they bore the costs of the country’s export-oriented economy, these peasants have seen their incomes and welfare severely erode over the last quarter of a century.

The Doha dead end

But however this debate over the global consumer of last resort is resolved, the World Trade Organization (WTO) and its most influential members, both from the North and the South, hope that completing the Doha Round at the Seventh Ministerial Meeting in Geneva will bring about a resumption of the carbon-intensive march toward globally integrated production and markets.

The preoccupation of economists and policymakers with the export engine to revive the global economy, which often excludes concerns about the negative impact of export-led globalization on the climate, is a dangerous divide leading up to Copenhagen. Says John Cavanagh, director of the Institute for Policy Studies: “We have economic policymakers concerned with reversing recession and ecological economists concerned with strategic ways of reversing climate change talking past one another.”

State of play on the climate

The climate negotiations have their own share of problems, even without the WTO threat. In the lead-up to Copenhagen, the focus of the climate discussions has been on two issues: mitigation and adaptation. Both are stymied, largely owing to the positions of the industrialized (Annex 1) countries. On mitigation, pivotal developed countries have so far resisted offering legally binding cuts. And what voluntary cuts they have offered are slight. In the case of the United States, President Obama’s nonbinding commitment is to reduce GHG by 17 percent from 2005 levels. This translates into an insignificant 4-percent reduction from 1990 levels, which serve as the benchmark for serious cuts. The Intergovernmental Panel on Climate Change has asserted that a 25-percent to 40-percent cut in GHG by 2020 is the minimum figure that would keep global mean temperature from rising above two degrees centigrade during this century. And, already, the latter is said to be an underestimate.

In the area of adaptation—assisting the poorer countries to prepare themselves for the consequences of climate change—the negotiations have been held up by the rich countries’ reluctance to come up with the minimum amounts of aid necessary, to transfer technology unconditionally, and to channel the sums to the developing world through institutions apart from the World Bank, which they control.

The challenges in these two areas are daunting enough. And yet, unless the question of which economic model or strategy the countries of the world should move toward is front and center in Copenhagen, even the most ambitious agreements arrived at on mitigation and adaptation will be simply a Band-Aid. Unless the negotiators in Copenhagen dethrone the Doha model, the fundamental driver of climate change—an export-oriented globalized capitalist economy based on perpetually rising consumption—will continue to reign.



Walden Bello is a member of the House of Representatives of the Republic of the Philippines, president of the Freedom from Debt Coalition, a senior analyst of Focus on the Global South, and a columnist for Foreign Policy In Focus.

[jpdm]

RP to seek inclusion of Subic-Clark-Kaohsiung corridor in Taiwan-China free-trade area


Written by Max V. de Leon / Reporter
Tuesday, 15 December 2009 20:15

TAIPEI—Not wanting to be left behind, the Philippines will be seeking to gain a ticket to the proposed Taiwan-China Economic Cooperation and Framework Agreement (Ecfa) by asking Taipei to include the Subic-Clark-Kaohsiung economic corridor in the negotiations for the planned free-trade area (FTA).

Ambassador Antonio Basilio, resident representative of the Manila Economic and Cultural Office (Meco) here, said there are now concerns that most of the Taiwanese investments that are supposed to go to the Philippines will just again be diverted to China with the forging of the Ecfa.

This, he said, makes it more pressing for Meco to ask the Taiwanese government to consider expanding the Subic-Clark-Kaohsiung economic corridor to include some southern provinces of Mainland China and have it incorporated in the proposed Taiwan-China FTA.

“So this will be our assurance. We will probably formalize this proposal in the next JEC [Joint Economic Conference] meeting [of the Philippines and Taiwan],” Basilio told the BusinessMirror.

The next JEC, which serves as the venue for the Philippines and Taiwan in coming up with new bilateral cooperation programs, is scheduled early next year.

Taiwan and China, on the other hand, are scheduled to negotiate the terms of the Ecfa, which is the initial step in the opening up of trade between the Chinese nations, in the first half of 2010.

Basilio said all the three countries will benefit from the expanded economic corridor because they will be able to complement each other in manufacturing through seamless production lines in their respective economic zones, aside from according all parties larger markets.

He said with the addition of the Philippines in the picture, the products to be produced by China and Taiwan will gain access to the 600-million Asean market. They will also be able to gain benefit from the skilled work force of the Philippines, particularly in the higher end of the value chain.

The Philippines, meanwhile, will be able to get some of the investments.

He said aside from the fears of diversion of Taiwanese investments to China, the Philippines will also lose out more Taiwanese tourists to the Mainland with the Ecfa. “In tourism, we are feeling it now,” he said.

To prevent this from happening, Basilio said the Philippines will have to sell the idea of an expanded version of the economic corridor involving southern China.

The Philippines and Taiwan are now in the final stages of the completion of the requirements in the Subic-Clark-Kaohsiung economic corridor, which is supposed to funnel Taiwanese investments to the economic zones of Subic and Clark, where they will enjoy preferential treatment.

[jpdm]

Former finance secretary says RP
to benefit from US interest in Asia

BY JIMMY CALAPATI
Malaya Business Insights
Dec.16, 2009

Former finance secretary Roberto de Ocampo yesterday said that he sees a vision of hope for the country next year, adding that the country "is fortunate to be in the right part of the world."

"Expected improvement in global conditions will provide greater impetus for growth. The US is actively re-engaging with Asia where growth is projected to be highest, compared to other regions in 2010," said De Ocampo, in a forum organized by the Asian Institute of Management.

He stressed that domestic demand will strengthen next year, supported by election spending.

He also sees improvement in the labor market due to a rise in business confidence in the second half on the assumption of a smooth election and transition in government.

For 2010, the former finance chief said that he sees gross domestic product (GDP) growing between 3 to 4 percent, remittances growing between 4 to 6 percent and exports staying in the positive territory after slumping by around 20 percent this year. "Net exports are expected to make a slight contribution to GDP growth," De Ocampo said. But if there are good news, De Ocampo also sees possible bad news for the economy.

"Despite the Philippines’ projected growth for 2009 and 2010, hurdles will keep the Philippines from achieving pre-crisis level growth, top of which is a non-conducive business environment, as illustrated by the country’s dismal ranking in competitiveness surveys," De Ocampo said.

The Economist Intelligence Unit conducts a survey that spans five years on business environment rankings (BER) in 82 countries with first place being the most conducive for business.

For 2004-2008, the Philippines ranked 51st It ranked 52nd for 2009-2013.

For the World Bank’s Doing Business Report, economies are ranked on their ease of doing business, from 1 – 183, with first place being the best.

A high ranking on the ease of doing business index means the regulatory environment is conducive to the operation of business. The Philippines ranked 144th and 141st out of 183 economies for 2009 and 2010 respectively.

Also, the Philippine economy ranks 104th freest of 183 countries included in the 2009 Index.

Its score, 56.8, is 0.8 point higher than last year, primarily reflecting improvements in monetary freedom and investment freedom.

The Philippines ranks 20th out of 41 countries in the Asia–Pacific region, and its overall score is slightly below the world average.

But foremost among De Ocampo’s bad news is the increasing deficit, which he projects will reach between 3.5 to 4.2 percent of GDP next year, roughly around P375 billion, P100 billion more than this year’s year-to-date deficit of P266 billion.

"The government’s ambitious revenue targets may not be reached since it has not been able to win legislative approval for revenue-strengthening proposals, such as excise tax reforms and changes in fiscal incentives to investors," De Ocampo said.

Also, while overseas demand for Filipino labor in healthcare and other basic services is projected to remain strong, adjustments in the global economy could result in lower demand in some sectors.

"Filipino seafarers would be affected by the slow growth in world trade volume and (other OFs will also be affected by) the projected continuation of high unemployment in advanced economies," De Ocampo said.

So how to avert the bad news?

Strengthening revenue collection efforts was foremost in De Ocampo’s mind.

"My advice would be to not think of raising taxes, rather collect much better," De Ocampo said.

He also suggested that a better economic strategy be adopted.

"Focus on what we can best offer – service and tourism. Learn from the crisis. No need to be export-led like Japan," De Ocampo said.

The government should also increase business confidence, which De Ocampo said is likely to happen if the country is able to peacefully elect the next President. "Therefore, the elections must take place and be perceived as clean," De Ocampo said.

[jpdm]

Subregional trade scheme
eyed for RP-Taiwan

BY IRMA ISIP
Malaya Business Insights
Dec.16, 2009

TAIPEI. -- The Philippines is eyeing the expansion of a trade and investment preferential treatment scheme with Taiwan to include the southern region of China so the country will not be left out of a looming closer integration of the economic ties between China and Taiwan.

Antonio I. Basilio, resident representative and managing director of the Manila Economic and Cultural Office (MECO), said the Philippines is tapping the sub-regional arrangement as Taiwan and China prepare to forge a free trade agreement, the negotiation of which could start as early as next year.

The Taiwan-China deal has spawned fears that Taiwan’s investments, which are focused on Southeast Asia, would go to China instead.

The Philippines and Taiwan earlier forged an alliance under the Subic-Clark-Kaohsiung economic corridor, giving preferential treatment to locators in the economic zones.

Basilio said the Philippines is floating the idea of expanding the arrangement to include the southern part of China, covering Guangzhou, Fujian and Hainan, provinces which host a lot of Taiwanese locators, and areas that complement the Philippines’ and Taiwan’s industrial and agricultural sectors.

He said the plan, leveraging on the strong relationship with Asean, could also be widened further to include the Brunei-Indonesia-Malaysia-Philippines East Asean growth area or BIMP-EAGA, leveraging on Taiwan’s involvement with Asean that it is trying to push an FTA with the bloc as Asean+3½.

But Basilio does not see the sub-regional scheme taking off until Taiwan gets an FTA with China.

"This is a concept or vision to get people interested," he said.

But Basilio admitted that the existing economic corridor concept has not resulted in significant investments from Taiwan to Subic and Clark as Taiwanese locators in these zones cannot sell in the domestic market.

"The key here is for them to be able to sell to the domestic market," Basilio said.

The Philippines and Taiwan have yet to agree on the rules of origin which define the local content requirement of goods made by Taiwanese locators in Subic and Clark.

"They (Taiwanese) are not comfortable with the current formula," Basilio said.

Taiwan wants a lower 25 percent local content while the Philippines is asking for 40 percent. The current formula limits to 30 percent of the entire production that the firm can sell to the local market. Products beyond the hurdle are imposed the regular tariffs.

Basilio said if the local content hurdle is met, companies would be able to increase the volume of sales.

So far companies like Golden Sun and Tong Lung have expanded their operations in Subic under the economic corridor agreement.

One positive impact of the economic corridor is the harmonization of customs procedure for goods entering Subic, Clark and Taiwan

[Askal82]

Originally Posted by jpdm

Point is, the Philippine economy should be wiser and stop depending to much on the US or even the Japanese economy.

We have to diversify our economy and integrate it with other countries.

Originally Posted by Christendom

strong pa rin ang privatization technique nila...daming little thinktank at daming big brother

Not only that. Their governments got control of TECHNOLOGY especially US. Knowledge is really power, not just wealth. We know that US is running a huge trade deficit with China. If China suddenly withdraws their Dollar reserves in favor of Euro or Gold, it might trigger the Third World War because US won't simply pay their debts that run into trillions of dollars when China is demanding assurance. There's a reason why America doesn't want to simply sell their failing car and other heavy industries from a technological point of view.

The Philippines should develop their own body of knowledge through education and hard research and development which the government barely pays attention. Only through that means the country can find the ways to become economically self sufficient enough to create a working domestic economy that doesn't rely too much on external trade further exposing itself in a failing global economy. It's about time to abolish the labor export industry.

[lgseccionph]

Somali officials to visit Manila; anti-piracy cooperation on agenda

MANILA, Dec. 19 (PNA) -- Somali Deputy Prime Minister Abdurahman Aden Ibrahim Ibbi heads a high-level delegation due to officially visit the Philippines on December 21 to 23, the result of an invitation by President Gloria Macapagal-Arroyo when she met a few African Union leaders in Tripoli last August.

In announcing the high-level visit, the first since Foreign Minister Abdurahman Jama Barre came to Manila in 1979, the Department of Foreign Affairs (DFA) said it is "expected to boost the Philippines’ anti-piracy efforts."

The DFA indicated that Manila and Mogadishu would explore possibilities of cooperation and training in maritime security, combating piracy, aquaculture development, search and rescue, law enforcement operations, marine environmental protection, and human resource development.

"The visit is expected to boost the Philippines’ anti-piracy efforts," DFA announced, noting that "as the supplier of about a third of the world’s shipping manpower, the Philippines is directly affected by the scourge of piracy."

Ibbi, who is also the Minister of Fisheries and Marine Resources of Somalia, is scheduled to meet with officials of the Philippine Coast Guard, the Philippine Navy, the Bureau of Fisheries and Aquatic Resources, and the Civil Service Commission.

The Jakarta-based Somali resident ambassador to Manila, Mohamud Olow Barow, and Somali Navy Commander Admiral Farah Ahmed Omar complete the entourage.

Training Somali maritime authorities may help curb piracy off the coast of Somalia, where numerous international vessels have been hijacked by Somali pirates in recent years, DFA added.

Somalia is known to Filipinos in the Mindanao peace process as a member of the Organization of Islamic Conference (OIC) Committee on the southern Philippines conflict resolution.

But its sea coast and territorial waters are also infamous as a hotbed of high-seas piracy, where a number of Filipino seafarers -- 54 at the latest estimate -- are still among international captives held by pirates in inland Somalia. Many of such pirates are supposedly indentured fishermen looking to kidnap ransoms as a quick source of livelihood.

President Arroyo was in Tripoli last August 31 and appeared at the Special Summit of the African Union, where she drummed up participation in the now-deferred Non-Aligned Movement Special meeting which Manila was to have hosted this month.

At the sidelines, she met with Somali President Sheikh Sharif Sheikh Ahmed and extended the invitation, offering the Philippines’ assistance in training and strengthening the capabilities of the Somali Coast Guard and civil service.

Manila-Mogadishu diplomatic relations have not fully developed, partly due to the prolonged civil strife in Somalia.

DFA Undersecretary for Policy Enrique A. Manalo will host a luncheon for the Somalian guests. (PNA)

[lgseccionph]

PGMA calls for new world order in fight against global warming

COPENHAGEN, Dec. 18 (PNA) -- President Gloria Macapagal-Arroyo late Thursday issued an appeal for collective action by all nations to address the harsh effects of global climate change, as she stressed that participating countries must not leave the unprecedented summit “without a deal.”

Speaking before other top delegates to the climate change summit at the Bella Center in this Danish capital, the President warned that the hour is late and the need to do something about global warming is urgent.

“We come to Copenhagen in partnership with other nations to find a way to meet the harsh impacts of climate change and avert a global crisis,” the President said. “The problem will certainly take years to solve, but we need to start the process now.”

The United Nations Climate Change Conference, held Dec. 7-18, is hosted by the Kingdom of Denmark. Some 183 countries have sent in their president or prime minister making the affair the biggest gathering of top-level government officials in history. It also attracted tens of thousands of print and broadcast journalists, members of non-governmental organizations, tourists and curiousity seekers.

Taking her scheduled slot a few speakers after President Nicolas Sarkozy of France, President Arroyo urged developed countries of the world to own up to their responsibility.

According to President Arroyo, developing countries are the least responsible for the global warming but they suffer the most from its ill-effects.

The Philippines, for instance, emits only 1.6 tons of greenhouse gases per capita, while the world’s average is six tons per capita. For any meaningful progress in the effort to avert disaster, recent studies suggested, emission must be brought down to three tons.

Tragically, “we are one of the top 12 countries, identified by the United Nations at risk from climate change,” she said. “Two recent typhoons cost the Philippines $ 4 billion or 2.7 percent of GDP. Over 600,000 hectares of farmland were destroyed.”

The same typhoons affected nine million people and claimed 900 lives.

“We cannot afford to leave Copenhagen without a deal,” the President told her fellow top-level delegates.

But for an equitable outcome, she said, developed countries must lead in reducing emissions “under the principle of common but differentiated responsibility.”

The President appealed to rich countries to establish a financial mechanism that will facilitate a seamless transfer of technologies necessary to fight the global warming phenomenon.

“We applaud Secretary [Hillary] Clinton’s ground breaking announcement that the United States is prepared to work with other countries toward a goal of jointly mobilizing $ 100 billion a year by 2020 to address the climate change needs of developing countries,” she said.

The President said that equally essential to the establishment of global funds from which developing countries can draw is their replenishment from time to time when there is need for it.

“Humans started the problem,” she said. “Humans can solve it.” (PNA)

[TambayBlues]

Chinese Pig and Geese Farmers Hoarding Metals

Before getting into to the relationship between copper and pork products, I want to draw your attention to what makes me nervous, have a look at these photos from China. They are excerpted from a China Central Television Channel (CCTV) program documenting private speculation and hoarding of metals throughout the country. According to an associate of mine at an Asia-focused hedge fund who was just in China, “It’s pervasive; people are piling this stuff up in their backyards.”

(“It’s pervasive”)

Some of the more telling lines from a translated script of the CCTV program (which I assume to be accurate) include:

* Wang Chao lived in Anxin county of Hebei province (rural area). He is in charge of a metal scrap collecting company. He used to purely take commissions for collecting scrap. Since 1H 2009, he started stocking scraps. He told CCTV his business now is like 'gambling'. Not only him, Mr Wang said many people in his town have stocked a lot of metal at their home.

* They told CCTV they believe the metal prices will 'certainly rise', and they have 'a lot of' stocks. For example, he said, in Laohetou county, every household has dozens to hundred tonnes of copper. Nobody wants to sell. They believe copper price will goes back to Rmb70,000/tonne from currently Rmb40,000/tonne.

* Traders in Wenzhou city of Zhejiang province: A business man told CCTV, they use a lot of bank loans and bought a lot of metals for stocking. For one warehouse, he stocked at least 15 Kt to 20 Kt of copper. For his total personal metal inventories, he invested Rmb1-2 bn. He believe all metal prices will surge with inflation.

* A non-ferrous metal warehouse manager, Mr Qin Baoqing in Wusong District of Shanghai. He said many metals cannot be put in their warehouse, so they have to leave them in the backyard. Many stocks have not been moved for 3 months now. For example, he said, they have many aluminium stocks from Lanzhou Aluminium, Guizhou Aluminium etc.

* He Jinbi from Maike (metal trading company). He told CCTV they saw many farmers in Guangdong province stocking more than 100 tonnes of aluminium at home. These people used to raise geese for living.

* Because the interest rate is too low in China. Many farmers could make hundreds of RMB profits per tonne, with dozens of Rmb per tonne cost of interests. They use their existing inventories to borrow more from banks. Banks are very 'happy' to lend to them.

[a side bar here: China’s 4 trillion stimulus package equals about 15% of GDP and according to the Financial Times, bank loans are up ~140% this year to ~8.6 trillion Yuan and official State investment accounts for 88% of GDP growth. What we are witnessing is Chinese savers experiencing negative real interest rates in their savings accounts: much worse than in the US. At the same time they are able, in fact motivated, to borrow money at rates that are less than the inflation rate. Hence, the massive government stimulus combined with unlimited cheap money has fueled a soaring stock market, real estate prices, and as presented here, commodity speculation. Approximately 60% of the stimulus money is estimated to have gone into these speculative sectors.]

* On the other hand, many stock brokerage firms in China have become futures trading companies this year. Stock brokerage firms are very rich of cash. Private investors plus those brokers have at least invested Rmb20-30 bn in metal futures market. In 2008, only 50 bn Rmb were in the Shanghai futures market. This year, the number has increased to 80 bn Rmb. Everyday, he said, there are more money flowing into the market.

The CCTV program concludes, “Many speculations in metals have sent mis-leading signals to the government and disordered the market. The government should pay enough attention to it.” (the Chinese version can be read here.)

A September 17 Bloomberg story by Singapore-based Glenys Sim reports that “Private investors in China, the world’s largest metals user, have stockpiled ‘substantial’ quantities of copper as the government ramps up stimulus spending to spur the economy.” The article points out that pig farmers and other speculators have amassed in the order of 50,000 tonnes of copper. That is about half the level of inventories tallied by the Shanghai Futures Exchange.

[kenken94]

Originally Posted by jpdm

Point is, the Philippine economy should be wiser and stop depending to much on the US or even the Japanese economy.

We have to diversify our economy and integrate it with other countries.

Most ng mga pinakamalalaking trading partners natin e.g USA and Japan eh nasa gitna ng krisis. Sana naman mabalance yung dependency natin at huwag lang puro sa America at Japan.

[jpdm]

Originally Posted by kenken94

Most ng mga pinakamalalaking trading partners natin e.g USA and Japan eh nasa gitna ng krisis. Sana naman mabalance yung dependency natin at huwag lang puro sa America at Japan.

Tama ka roon.

Dapat pagtuunan natin ng pansin ang iba pang bansa outside Japan, US and Europe.

We should try strengthening our trade relations with ASEAN, China, Africa and Latin America.


We should also try to trade with former Eastern bloc countries like Poland, The Baltic States, Central Asia and Middle East.

[Carjel]

Originally Posted by jpdm

Tama ka roon.

Dapat pagtuunan natin ng pansin ang iba pang bansa outside Japan, US and Europe.

We should try strengthening our trade relations with ASEAN, China, Africa and Latin America.


We should also try to trade with former Eastern bloc countries like Poland, The Baltic States, Central Asia and Middle East.

Don't forget INDIA..

[kenken94]

yung mga Latin American countries like Mexico, Brazil, Venezuala atbp. ay maganda ring gawing major trade partners.