By Lennie Lectura
Original Article at the Business Mirror
THE Light Rail Transit Authority has prequalified three bidders out of seven offers to vie for the consultancy contract for the construction of the North Extension railway project estimated to cost P6.57 billion. They are Metrolink JV, Schema Konsult-DCCD Engineering Corp.-Katahira & Engineers Asia, Inc.-Asia Halcrow Inc., and SPI-JCCS-WCI Joint Venture.
Transit authority administrator Melquiades Robles said the qualifiers have proven track records in the rail industry here and abroad.
He added that, “If undertaken by us, the project will only cost P6.57 billion since we already have the needed rolling stock and we will only have to construct four stations.” Earlier offers had quoted P34.2 billion, he said.
The extension project will connect Monumento Station in Caloocan City to the North Avenue Station in Quezon City with a 5.4-kilometer elevated line, thus making a loop from Baclaran, Pasay City to Monumento to North Edsa and back to Baclaran.
The project is one of the top priority projects of the Arroyo administration. It is expected to serve around 800,000 to one million passengers once fully operational. Robles said implementation is right on target and construction begins early next year.
The transit authority has a fleet of 135 light rail carriages, including 48 newly inaugurated third-generation trains, increasing its capacity to 40,000 passengers from 27,000 passengers per hour in both directions.
Saturday, 24 March 2007
By Lennie Lectura
Original Bangko Sentral Title: Consumer Confidence in NCR at All Time High in the First Quarter of 2007 [download report]
- GMANews TV: Consumers see bleak future for Philippine economy - BSP
- Inquirer: Filipino consumers remain pessimistic
- Manila Standard Today: Consumer confidence improving, says central bank poll
- The Manila Times Internet Edition: Consumers see a better year in ’07
- The Philippine Star: Consumer expectations turn negative -- BSP Poll
By Peter Wallace
Original Article at Manila Standard Today
There’s been a lot of argument as to whether the Philippines should provide tax incentives to new businesses. I’m at a loss to know why it’s even discussed.
All the countries competitive to the Philippines in Asia offer tax incentives. Are we to be the only one that doesn’t?
Is the Philippines such an attractive investment site that giving incentives isn’t necessary?
Let’s take just one country, the one that wouldn’t even have been considered 10 years ago.
Ten years ago, the Philippines was being compared to the rest of the Asean-5: Singapore, Malaysia, Indonesia, and Thailand. Today all of them are far ahead. Well, Indonesia has a few problems too, and as in the case of the Philippines, these problems show up in the investment numbers.
That one is Vietnam. Ten years ago, it wasn’t even on the radar screen. Vietnam has 85 million people, so it’s the same demographic size as the Philippines. Ten years ago, its gross domestic product was $20.7 billion, for a per capita GDP of $290. The Philippines was an almost $75 billion economy for $1,000 per person.
Today, Vietnam’s per capita GDP is estimated at $726 per person. It has since increased 150 percent. On the other hand, Philippine figures for the same period were up a much more modest 34 percent to $1,340 per person.
Vietnam is growing at 8 percent. The Philippines is growing 5.5 percent. Vietnam attracted $9.5 billion of foreign investment in 2006. The Philippines cornered some $2 billion, with almost half of that for expansion of existing companies. Clearly, it does not denote confidence the way new investments would.
Vietnam’s labor cost is $93/per month. The figure is double for the Philippines at $178.
Electricity cost for business is 5-6 US cents/kwh versus 10 US cents/kwh here—again, double.
Vietnam does not tax raw materials, components for export; profit repatriation or capital equipment.
The Philippines taxes them all. Am I getting the message across? Vietnam offers a 10 to 15 year holiday. You have to wonder why the $2 billion of foreign direct investments that did come here, did come here at all, don’t you?
We have a country where 4.1 million people (based on old, and correct definition) are unemployed (forget the percentages, they’re nonsense. Stick to living, breathing human beings: People). A young person working for his father on the farm, unpaid, isn’t employed, but he’s counted as though he is. Surely part of the definition of employed is that you’re paid. And paid decently.
Another 7.5 million are underemployed. That means they don’t get enough to live an even half way decent life. Then there’s 8.5 million who are overseas because they couldn’t get a good enough job here.
If I were president, my whole focus would be on creating paid full-time employment. All else follows: A job eliminates poverty. A job requires you to be educated. To do your job, you need to be healthy. And you need to be able to get to your job (that equates to roads, public transport etc. that must be provided).
It all comes down to jobs. Simplistic, yes; but that’s what works best. Keep it simple. Focus on jobs and all that is needed to create them. This out of the way, all other things start falling into place.
Give someone a job they just might vote for you—but a full-time, proper job please. One that lasts beyond the campaign period. One area that needs addressing is the over 30 years old Labor Code. It’s 33 years old and it’s out of date. The world has changed. The barriers have come down and the competition is fierce. The Philippines ranks 71st amongst 125 countries in the Global Competitiveness Report of the World Economic Forum. One of the reasons, if not the major reason, is the high cost of doing business. Here, investors incur additional and unnecessary cost due to bureaucratic red tape, graft and corruption, poor infrastructure, and inflexibility in the labor market. And the lack of flexibility in hiring and firing workers can be blamed to the rigidity and antiquity of Philippine labor laws.
Here you can’t be fired, so why work hard? It’s much better to just take it easy and enjoy life. I know that fear should not be a motivation, encouragement is, but an inevitable complacency sets in when you know you keep your job almost no matter what you do.
But I’m drifting off into a whole other topic: The outdated Labor Code. This is something to review at another time. What I’d like to get across now is the unavoidable need for tax holidays. They are not a loss of tax revenues because you get no taxes at all if no one comes.
And, anyway, it’s not a total loss. People who have job pay VAT on what they can now afford to buy. But before they do, when they get paid, they pay income tax.
The retail companies and those that don’t have a tax holiday, but benefit from people with jobs and money now buying their products pay taxes on the higher profits they now make.
If no one comes, no jobs are created. People have no money to buy the products they need. So companies can’t expand to produce the greater number of products they’d like to produce. People die because they can’t afford the hospital treatment they need—melodramatic, I know, but it actually is the case.
Government will get its income from the greater level of economic activity that occurs from all the companies that flock here (well, maybe not flock, but you know what I mean).
Employees with money, buy.
My son had some friends here recently on a “surfing safari.” They had a marvelous time, one all their friends will now know about. Friends who will follow —and spend money. They had such a good time they wanted to stay longer, and spend more money.
So what does this government do? Charge them P8,500 to extend their visa. What idiocy is this? There should be no charge for tourist visas, or their extension. In fact, why have a visa at all? Hong Kong doesn’t require one; you arrive at the airport with a valid passport and a reasonable demeanor you get one for free.
Thailand wants tourists. It got 12 million in 2005, the Philippines got 2.6 million, and I suspect half of those were balikbayans.
Maybe someone should do some serious research on this. But my superficial analysis says that the overall economy benefits by an amount greater than that lost from a holiday.
And if the government doesn’t have enough money because of the loss of this tax, maybe it forces it to be more efficient: leaner and meaner. It would fit in with the president’s directive to reduce red tape. Less red tape and faster service equate to lower cost.
In a utopian society, there would be no government, that’s what we should aim for. Now there’s an idea.
Friday, 23 March 2007
The Consumer Expectations Survey captures the economic outlook of consumers as an indication of the country's future economic conditions.
The Bangko Sentral ng Pilipinas launched the first nationwide Consumer Expectations Survey (CES) in the first quarter of 2007. Past CES from the third quarter of 2004 covered only the National Capital Region (NCR).
The nationwide Consumer Expectations Survey (CES) for the first quarter of 2007 showed that the overall consumer confidence index for the whole country was at -33.3 percent. However, consumer sentiment is expected to improve significantly in the next quarter and to turn positive in the next 12 months.
Download the latest issue: First quarter 2007
FRIDAY, MARCH 23, 2007 | STATISTICS & SURVEYS
Original Article at Gov.Ph News
The latest self-rated poverty (SRP) from Social Weather Stations, conducted last month, confirms the modest gains against poverty made by the Arroyo Administration since 2001.
The overall decline in SRP under President Gloria Macapagal-Arroyo is clear from the SWS chart which shows SRP staying steady just above 50%.
The February data will also cut average SRP under President Arroyo, already the lowest among the four presidents of the past two decades. Up to November 2006, average SRP in various administrations were: Aquino 63.4%, Ramos 62.2%, Estrada 59.6%, and Arroyo 57.3%.
Economic gains, first felt in capital, cuts poverty in Metro Manila.
The February data also shows that the country upturn, which is first felt in Metro Manila, has made a big dent in poverty in the National Capital Region (NCR), cutting SRP to39% last month, from 54% in November. As economic benefits spread further outside the metropolis, other regions will see poverty declining.
The spread of economic gains throughout the country has already cut poverty incidence to 23% of families last year, from 27.2% in 2000, according to the National Statistical Coordination Board.
In terms of individuals, that represents a decline of 5.5. million in the number of poor Filipinos, from 25.5 million in 2000 to 19.9 million last year. The medium term Philippine Development Plan targets a further reduction to 16.8 million by 2010.
Government social services help reduce household spending.
Monthly spending among households that rate themselves poor has held steady, and one big reason is the expansion of social services under the Arroyo Administration. Free elementary and high school education, Philhelath insurance, cheaper medicine, and low-cost Tindahan Natin outlets have cut family spending.
Thus, the Annual Poverty Indicators Survey, which assesses the living standards of the bottom 30%-40% in income, has shown steady gains in employment, education, and health since 1999. Most notably, indigent beneficiaries of PhilHealth now number 24 million, compared with 1.5 million in 2000.
These services will expand even more dramatically from this year on, thanks to increased government revenues and declining debt spending. In the 2007 budget, economic services and social services will grow by more than P30 billion each, even as debt service drops by about P20 billion.
Programs to fight hunger get top priority.
Hunger incidence has generally gone up and down with rice inflation, but since November, the two indicators parted ways. Hunger worsened in Luzon due to typhoons. Hence, government will redouble efforts to rehabilitate damaged areas, working with local government units (LGUs) of poor provinces.
FRIDAY, MARCH 23, 2007 | GOVERNMENT MANAGEMENT
Original Article at Gov.Ph News
President Gloria Macapagal-Arroyo signed today Republic Act No. 9401, or the 2007 national budget which allocates P1.126 trillion "as social payback to the people for the fiscal turnaround of their government," Budget Secretary Rolando Andaya Jr. said.
He said the President eschewed the traditional signing rites in Malacanang usually graced by members of Congress and instead signed the 1,162-page law in her Study sans fanfare.
"The budget will cure underspending, spur growth, fund infrastructure and finance human development in a manner that will be transparent," Andaya said.
To reflect the increase in revenues on expenditures, Andaya said all departments would get an increase on their allocations this year.
The Department of Education leads the list of recipients with a budget of P128.6 billion, P15.4 billion bigger than last year’s budget.
Included in the DepEd’s budget is P2.05 billion for the hiring of 16,390 teachers and P5.37 billion to build 7,326 classrooms.
Next is the Department of Public Works with P71.2-billion allocation, P28.7 billion bigger than what it had last year. "This will enable it to construct or upgrade 3,251 kilometers of roads and 1,312 flood control systems among others," Andaya said.
By sectoral allocation, economic services including agriculture, trade and natural resource will get 21.8 percent of the budget pie, while social services, consisting of health and education spending, corner 28.1 percent.
"The figures don’t lie: Tax dividends are heading towards the nation’s schools, day care centers, and hospitals," Andaya said.
General public services, on the other hand, account for 16.2 percent of this year’s spending; defense, 4.8 percent; and debt service, 28.3 percent.
The amount for interest payment is, however, on the decline to P303 billion this year from the 2006 level of P309 billion, "a trend that will be sustained in the years to come."
Interest payments this year could further dip if the peso continues to strengthen or stabilize below the 50 to a US dollar exchange rate," a development that would free more resources for social spending," Andaya said.
By object of expenditure, MOOE or maintenance and other operating expenses, make up the bulk of the budget, requiring P659.2 billion, or 58.5 percent of total programmed expenditures.
The amount already includes the debt service fund. The other big-ticket item in this cluster is the Internal Revenue Allotment, or local government share from national taxes of P183.9 billion.
Personal services, or the amount for payroll and pension contributions of active government employees and pension of veterans and retirees, will eat up 29.78 percent of the budget or P335.3 billion.
On the other hand, capital outlay spending this year is pegged at P131.4 billion, representing 11.68 percent of the spending ceiling.
In addition to roads and flood control, government will spend P8.3 billion to improve airports, and P193 million for new lighthouses and ports.
Andaya described the 2007 national budget "as catalogue of reimbursements for the taxes paid by the people, a redemption of our pledge to issue tax rebates in kind."
"The new initiatives are diverse as they will be felt on the ground. This budget will enable us to provide free meals to 1.5 million youngsters as incentive for attending class, recruit 3,000 policemen, send about 7,000 scholars to schools and colleges, immunize two million children, establish 2,400 outlets of Botika ng Barangay, and provide medical insurance to 4.4million poor persons, among others," the budget chief said.
"We are also setting aside P10 billion to repair storm-damaged areas," he said, referring to the Calamity Assistance and Relief Efforts or CARE funds.
Andaya said purchase of goods and services will be compliant with the Procurement Reform Act, which installs safeguards and civil society monitors in government bidding communities.
"In the budget execution phase, we will see to it that government will only spend for the right things, at the right price, for the right purpose, and by the right agency," he added.
This year’s P1.126 trillion budget is premised on total revenues of P1.118 trillion, resulting in a deficit of P63 billion, the last one to be incurred before government achieves a balanced budget in 2008.
Other macroeconomic assumptions of the budget include real GDP growth rate of 6.1–6.7 percent and foreign exchange rate of P48-P50 to US$1.
FRIDAY, MARCH 23, 2007 | COMMENTARY
Original Article at Gov.Ph News
We note these findings of high self-rated poverty but the official, concrete data on poverty incidence show a picture that is improving for each passing year.
For instance, the average self-rated poverty during different administrations is as follows: Marcos 64.5, Aquino 63.4, Ramos 62.2, Estrada 59.56 and Arroyo 56.32.
Nonetheless, this administration is working on specific conditions and areas that must be subject to action and relief. The government is doing this under the stewardship of President Arroyo and we are already making a dent on poverty although we realize that a long road lies ahead.
There are no quick fixes for poverty and hunger which must be the subject of relentless, focused efforts based on a clear vision and platform--to ensure that economic gains are felt and enjoyed by the poor and everyone is lifted up the social ladder.
In the meantime, the President’s signing into law of this year’s budget will increase the flow of social returns to the people in terms of adequate food on the table, decent jobs and broader access to basic social services.
At the same time, the budget would shore up confidence and investments and give us the wherewithal to modernize the economy through broader digital and physical infrastructure that will open more jobs and windows of opportunity to leverage the spirit of enterprise, excellence and productivity of the Filipino.
FRIDAY, MARCH 23, 2007 | GOVERNMENT MANAGEMENT
Original Article at Gov.Ph News
President Gloria Macapagal-Arroyo expressed hope today that the Senate would "ratify speedily" the Japan-Philippines Economic Partnership Agreement (JPEPA) so as to enhance the facilitation of goods and services between the Philippines and Japan.
"We should have done it at the same time with the anti-terror bill," the President said during an interview with Japan’s Jiji Press at Malacañang’s Orchids Room this morning.
The President said the assurance from Japanese Prime Minister Shinzo Abe that Japan would care about the Philippine environment would hopefully pave the way for the JPEPA’s ratification by the Senate.
The President transmitted to the Senate last Nov. 17 the certified true copy of the JPEPA together with the Instrument of Ratification for the latter’s consideration.
"At the end of the day, it’s still their (the senators) call. We can only propose," the President said.
She said the Philippines would benefit from the JPEPA’s eventual implementation as Japan would be "opening up its agricultural market for the Philippines."
"It (JPEPA) is beyond market access. It includes human resource development, financial services, information and technology, energy and environment, science and technology, transportation and infrastructure," the President said.
She added that Japan would also be opening up its healthcare services market, where Filipino nurses and caregivers would be allowed to work in Japan.
The JPEPA was signed on Sept. 9, 2006 by President Arroyo and then Japanese Prime Minister Junichiro Koizumi on the sidelines of the 6th Asia-Europe Meeting held in Helsinki, Finland
The agreement would strengthen the economic cooperation between the Philippines and Japan through increased cross-border flow of goods, persons, investments and services.
It also provides for the protection of intellectual property rights, controlling ant-competitive activities and improvement of business environment.
Among the salient points of the JPEPA are the following:
* Almost 95 percent of Philippine exports will face zero duties;
* Both parties shall eliminate the tariffs on almost all industrial goods within 10 years from the date of entry into force;
* Access to the Japanese market of Philippine service providers will be enhanced and non-discriminatory treatment, with limited exceptions, will be guaranteed;
* A formal arrangement for the acceptance of Philippine nurses and caregivers into Japan will be established.
Concurring with the ratification of the JPEPA were the Department of Trade and Industry (DTI), Bureau of Customs (BOC), National Economic and Development Authority (NEDA), Department of Labor and Employment (DOLE), Intellectual Property Office (IPO), Department of Budget and Management (DBM),Tariff Commission, and the Department of Justice (DOJ).
By Fel V. Maragay
Full article at the Manila Standard Today
President Gloria Macapagal Arroyo announced yesterday that the government will go ahead with the extension of the Metro Manila Skyway from Bicutan to Alabang in Muntinlupa City.
The President said she was informed by Philippine National Construction Corp. president Ma. Theresa Defensor Asuncion that the PNCC board will ratify today the joint investment proposal with Citra Metro Manila Tollway Corp. for the continuation of the Skyway project called Stage 2.
The Skyway extension would make it more convenient to travel between Metro Manila and the Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) areas in the Southern Tagalog region—and make the city prettier, President Arroyo told the 28th national conference of the Employers Confederation of the Philippines at the Manila Hotel.
The Skyway project, an overhead motorway along the South Luzon Expressway, is a priority of the Department of Public Works and Highways in the Calabarzon.
Earlier, Trade Secretary Peter Favila gave Citra a deadline to submit a completion plan for the Skyway extension project.
Stage 1 of the project covers Buendia to Bicutan. Stage 2 from Bicutan to Alabang covers 9.9 km., while Stage 3 from Buendia to Balintawak covers 13 km.
Roderick T. dela Cruz
Original Article at the Manila Standard Today
The start of two major infrastructure projects in Luzon will generate 27,000 new jobs, according to the head of Luzon Urban Beltway, one of the super regions created by President Gloria Macapagal Arroyo last year.
Secretary Edgardo Pamintuan, who is in charge of overseeing the implementation of infra projects in Metro Manila, Central Luzon, Cavite-Laguna-Batangas-Rizal-Quezon region, and Marinduque and Mindoro provinces, identified the two projects as the Light Rail Transit Line-1 extension to Cavite, and the 300 million liters per day bulk water supply project in the southern part of Metro Manila.
Pamintuan said the P55-billion water project, which is set to start in May, would employ 10,000 workers during its construction period and an additional 100 workers during plant operation while the P37.56-billion ($683 million) LRT project would employ more than 17,000 workers upon its start in December.
He said this would bring to 40,000 the total number of workers employed during the construction of major infrastructure projects in Luzon, noting that at present some 11,000 workers are employed by seven ongoing projects.
“This is what’s happening in the LUB grounds. Two of our projects are expected to employ more than 27,000. Already, seven of LUB ongoing projects gave jobs to more than 11,000 Filipino workers and we expect more in our area because we have 25 infrastructure projects,” he said.
Thursday, 22 March 2007
Last updated 05:52pm (Mla time) 03/22/2007
Original Article at the Inquirer
SINGAPORE -- Singapore-based budget carrier Tiger Airways said Thursday it would scale back flights to the Philippines because of unresolved regulatory issues.
From Sunday, the airline will fly to Clark Field north of Manila nine times a week, down from the current 14.
"Tiger Airways has been forced to make this cutback due to the continued uncertainty regarding the regulatory situation at Clark," the airline said in a statement.
An executive order had "practically rescinded" an open skies policy set out in a previous government directive eight months ago, resulting in foreign airlines facing possible restrictions, it said.
Executive orders are issued by the Philippines president, Gloria Arroyo.
The joint foreign chambers of commerce in the Philippines have asked the government to more clearly define rules on air traffic rights at Clark and another airport at nearby Subic Bay to ease the entry of low-fare carriers, Tiger Airways said.
"It is with deep regret that we will not be able to commit any more destinations or additional flights to Clark until the current regulatory uncertainty is resolved," Tiger Airways chief executive Tony Davis said.
03/22/2007 | 06:19 PM
Full Story at GMANews.TV
National government employees will get a pay raise equal to 10 percent of their basic salary by July this year by virtue of Executive Order 611, which President Gloria Macapagal Arroyo signed Thursday.
In a statement sent to the media, Budget Secretary Rolando Andaya said the EO also provides for pay adjustments for the government's uniformed personnel, who, aside from the 10 percent raise, will also be getting an additional P1,200 in their monthly allowance at the beginning of July.
Uniformed employees include soldiers, policemen, jail guards, firemen and Coast Guard personnel.
Once the pay hike takes effect, Andaya said a Teacher I, which occupies Grade 10 in the 33-grade government pay scale, will get roughly P1,000 more a month, while a Teacher II, a notch higher in the salary ladder, will get a pay increase of P1,054 a month.
Andaya said the P10.3 billion needed to cover the pay adjustment is already provided for in the the P1.126-trillion 2007 national budget which President Arroyo also signed on Thursday.
03/22/2007 | 05:38 PM
Original Article at GMANews.TV
President Gloria Macapagal Arroyo has signed into law the P1.126-trillion national budget for 2007, with all departments getting increased allocations, Budget Secretary Rolando Andaya Jr said Thursday.
Radio station dzBB reported that Mrs Arroyo vetoed "technical items" in the budget but it was not immediately known what these were.
Last year, Congress failed to pass the 2006 budget, forcing the government to operate on a P907-billion budget reenacted from 2005.
Andaya said that under Republic Act 9410, all departments would get additional funds, led by the Department of Education which will receive P15.4 billion more.
The DepEd will get P128.6 billion budget, of which P2.05 billion will be used to hire 16,390 more teachers and P5.37 billion to build 7,326 additional classrooms.
The Department of Public Works and Highways got the second-highest allocation among line agencies, with P71.2 billion or P28.7 billion higher than last year.
The Department of National Defense was allocated P54.3 billion; the Department of Interior and Local Government, P51.3 billion; state colleges and universities, P17.3 billion; the Department of Agriculture, including funds for the Agriculture and Fisheries Modernization Act, P17.3 billion.
The Department of Transportation and Communication got P16.9 billion; Department of Health, P11.5 billion; and the Department of Justice, P9.3 billion.
The Commission on Elections will get P9.17 billion.
The government also allocated P303 billion for the debt interest payments, accounting for P28.3 percent of the national budget.
The Department of Budget and Management said maintenance and other operation expenses (MOOE) made up bulk of the budget, allocating P659.2 billion or 58.5 percent of total programmed expenditures.
The government expects to collect P1.118 trillion in total revenues to fund this year’s national budget. This will result in a P63-billion deficit which the government believes will be the last one to be incurred before the country achieves a balanced budget in 2008.
The budget department's macroeconomic assumptions include real gross domestic product (GDP) growth rate of 5.1 to 6.7 percent and a foreign exchange rate of P48 to P50 to a dollar.
The government will also set aside P10 billion for Calamity Assistance and Relief Efforts (CARE) funds to rehabilitate storm-damaged areas.
Malacañang earlier said the President would sign the budget on or before March 24 to avoid accusations it would be used for the May 14 elections.
Presidential Chief of Staff Jose Salceda said the delay in the signing by Mrs Arroyo is intentional because the Palace does not want to be accused of using the 2007 budget for election-related expenses.
Salceda said if the budget is signed on March 24, it would be covered by the election ban, which prohibits the use of fresh government funds and resources and the redeployment of personnel until after the election period.
He added that the 2007 budget would likely take effect after the elections.
Thursday, March 22, 2007
Original Article at the Philippine News Agency
CLARK ECOZONE, Pampanga, March 20 (PNA) – The Clark Investors Locators Association (CILA) on Monday expressed its gratitude to President Gloria Macapagal-Arroyo for taking the cudgels for over 300 foreign and local investors at the Clark Freeport Zone.
CILA and four other business groups in Pampanga have reiterated their call on the national government to rescind Executive Order 500-A (EO 500-A) which allegedly restricts development of the Diosdado Macapagal International Airport (DMIA).
CILA president Frankie Villanueva said President Arroyo has shown her concern for the investors at Clark.
Villanueva also reiterated the position of the business groups that the suppressive policies of the Civil Aeronautics Board (CAB) should not hamper the development of the Clark Airport.
A joint resolution dated March 15, 2005 signed by Villanueva, Renato Romero, president of Pampanga Chamber of Commerce and Industry, Inc., Myra Rivera, president of Metro Angeles Chamber of Commerce and Industry; Freddie So, president of Angeles Filipino-Chinese Chamber of Commerce and Mike O. Go, president of San Fernando Filipino-Chinese Chamber of Commerce and Industry called for the rescinding of EO 500-A.
The joint resolution stated that “Executive Order No. 500 (series of 2006) laid the proper policy for the expansion of air services to the DMIA by facilitating access by air carriers to such airport.”
According to the joint resolution, EO 500-A is "contrary to the policy of the liberalization of Philippine skies embodied in EO 500 and reiterated by President Arroyo during the first national Competitiveness Summit on October 6, 2006.”
“There is a need to restore the memorandum towards liberalization generated by the issuance of Executive Order No. 500 through the repeal of EO 500-A," it said.
CILA and the four business groups actively “support the current initiatives for the issuance of an alternative executive order dubbed as EO 500-B.”
The business groups also actively campaigned to preserve the gains of liberalization through concerted efforts organized under the auspices of the said organizations and other associations committed to the continued expansion of air services to the Central Luzon region.
Calls for the rescinding of EO 500-A cropped up anew after the Civil Aeronautics Board (CAB) incomplete [sic] defiance of President Arroyo’s grand plan for DMIA issued a three-month Foreign Air Carrier Permit (FACT) to Singapore-based Tiger Airways to the consternation of businessmen, local executives and non-government organizations.
CILA earlier expressed fear the grand plan of President Arroyo to develop DMIA will be severely affected by what it described as the “suppressive policies” of CAB.
“There is a strong danger that Tiger Airways will actually pull out from Clark,” Villanueva said. The Singapore-based Tiger Airways had brought inmost of the inbound and outbound international passengers at DMIA which last year posted over 480,000 international and domestic passengers, a 110 percent increase form 2005 at 232,313 passengers. (PNA)
By Rommer M. Balaba
Full Article at the Business Mirror
LOCAL public-private partnerships (PPP) remain infrequent in spite of the Philippine government’s list of projects suited for such funding scheme because of weaknesses in the Build-Operate-Transfer system now in place, Australian consulting firm GHD (Gutteridge Haskins & Davey) said on Wednesday.
The BOT system’s fragmentation and inconsistency is particularly prominent on toll road projects that have high tendencies of product and process failures because of the “disconnect” between the government agencies involved, GHD’s Peter Benson added in his presentation at the National Economic and Development Authority.
“A mindset change is needed… the BOT law needs to reflect the principles of PPP with the private sector engaged in a more structured way,” Benson explained.
By J. Vallecera, M. Gonzalez
Full Article in the Business Mirror
THE big wait for the signing into law of the 2007 budget continues, after Wednesday’s expected signing didn’t push through.
The inexplicable delay, according to finance officials, is tolling on the government’s vaunted massive infrastructure program, because for as long as no budget is in place, multilaterals like the World Bank cannot move to fund these.
Palace officials earlier said that President Arroyo will sign the P1.126-trillion national budget “on or before March 24” so that it would be covered by the election ban and thus prevent administration foes from suspecting Malacañang of election-related spending.
By Mia M. Gonzalez and Estrella Torres
Full Article at the Business Mirror
AS the Palace trumpeted on Wednesday two multibillion-dollar investments by big Chinese firms in the country, the Philippines’ top salesmen abroad—its diplomatic corps—complained about the utter lack of tools with which to make foreign business put the country under their radar.
Philippine heads of posts in various Western countries have raised concern on the lack of investment promotion materials and trade attachés to assist them in promoting trade and investments for the Philippines.
The issue was raised at the opening of the three-day policy consultation of the heads of posts hosted by the Department of Foreign Affairs (DFA), where Trade Secretary Peter Favila urged Philippine ambassadors in more than 100 diplomatic posts to help the government attract investments abroad.
Favila said Philippine embassies and consulates are key to opening doors for investments by negotiating with officials in host countries to consider pouring their resources in the country.
“If we [can] gain access to these decision makers, as the country’s representative, your post is crucial in gaining access to the highest levels of decision making in both public and private sectors in your posts, you can open doors and clear the ground for us so that the job of our trade investment officer is better facilitated,” said Favila in his keynote speech in the policy consultation for the Philippine heads of post held at the Rennaissance hotel in Makati.
During the open forum, ambassadors put a damper on Favila’s go-get-’em exhortation with the reality check: they often struggle in dealing with trade and investment promotions for the country because of the lack of materials and information for queries on investment procedures.
Some ambassadors, mostly from Middle East countries, are also often swamped with problems of migrant workers.
“We have a problem in terms of representation. Maybe we can ask trade attachés to come to Vienna. We need to know how to do things, materials that we need to have and to respond to certain queries. We should look at Europe more and more,” said ambassador Linlingay Lancalale.
Ambassadors also noted there are not enough ‘warm bodies’ from the trade office to welcome business delegations to discuss trade opportunities.
“We need the necessary warm bodies when heads of states come here addressing a business conference. The President of Croatia (Mr. Stjepan Mesic) is coming to the Philippines for a state visit on April 3 and 4. He is bringing some business people mostly concentrated in areas of shipping and energy. May I request your office to send the necessary Philippine counterparts [to meet them],” said an ambassador for a European post.
Meanwhile, ambassador to the United Kingdom Edgardo Espiritu reiterated the need for the government to follow up on the continued interest of foreign investors in the country, especially in the areas of outsourcing.
He noted that HSBC’s outsourcing operation here employed 6,000 people, and more British firms are eyeing the Philippines. But, he said, the government is not following up the investment interest of these firms.
Philippine ambassador to Qatar Isaias Begonia raised the recent creation of Doha’s investment office where a total of $20 billion in investments are being identified.
“The government of Qatar is now looking for areas where it could invest its money. The Philippines needs to make sure it attracts investments from Qatar but our efforts are mostly concentrated on problems of OFWs,” said Begonia.
Ambassador to Greece Rigoberto Tiglao said a lot of Greek private firms approach the embassy looking for investments but the embassy does not have enough materials to provide them.
Favila said the government now only has 21 trade attachés deployed abroad compared to the “respectable number” in the previous years. The department proposed to deploy at least 10 trade attachés but it was turned down during the budget hearing.
He said at least 10 posts for trade attachés are set to be opened in Europe, United States and China. However, only six qualified for the posts out of 80 applicants.
Original Article in The Philippine Star
Takenaka has refused to repair any structural defects discovered in the facility, Manila International Airport (MIAA) General Manager Alfonso Cusi said.
"In the letter that we received on March 15, they are denying responsibility and passing blame onto others."
Cusi told The STAR that Takenaka has issued an unfavorable response to their letter requesting that the structural defects be corrected immediately.
He said the letter signed by project director Ken Kurebayashi sought meetings with MIAA consultants to discuss technical matters.
By Rhodina Villanueva
The Philippine Star 03/22/2007
Full Story at The Philippine Star
The Pasay City Regional Trial Court (RTC) has allowed Japanese construction firm Takenaka Corp., the contractor engaged by the Philippine International Air Terminals Co. (Piatco) to build the Ninoy Aquino International Airport Terminal 3, to intervene in the expropriation case of the mothballed facility.
In a two-page order, Judge Jesus Mupas of the Pasay City RTC said that, apart from Takenaka, Asahikosan Corp., the project’s procurement supplier, can also actively participate in the case.
WEDNESDAY, MARCH 21, 2007 | ECONOMIC ZONES
Original Article at http://www.gov.ph/news/?i=17429
President Gloria Macapagal-Arroyo bared today a $2-billion fresh foreign investments that would greatly help accelerate the conversion and development of former military bases in the country into economic zones and make the Philippines "one of the best values for money in Asia for investors."
Speaking at the 28th national conference of the Employers Confederation of the Philippines (ECOP) this afternoon at the Manila Hotel, the President said she was informed last night by Trade and Industry Secretary Peter Favila of the new tourism investments in former military bases now under the Bases Conversion and Development Authority (BCDA).
"Just last night, I got a call from Secretary Peter Favila, he was with the Shanghai World Trade group. And they gave me the good news of a forthcoming $2 billion tourism investments in the BCDA," the President said.
She said this good news was confirmed to her during the visit of Chinese Ambassador Li Jinjun this morning in Malacañang.
"We believe the Philippines is one of the best values for money in Asia for investors," the President said.
"There has been a surge in investments. Exports, notwithstanding the strong peso, our exports growth in January was 27 percent," she added.
The President signed Republic Act No. 9400 yesterday converting the Clark Special Economic Zone in Pampanga into a freeport zone.
The Clark Freeport Zone is the country’s second freeport after the Subic Freeport and Special Economic Zone that provides several incentives to locators.
The President said the freeport zones, particularly Clark, will continue to spur investments in the super regions in Luzon, level the playing field in investments, and create well-paying jobs such as call centers and business process outsourcing (BPOs) providers.
As political stability dawns in the Philippines, the President said her administration would continue to liberalize the investment climate, including liberalizing the cement industry to make it less costly to invest in factories and public infrastructure such as roads and bridges.
BY JOSEFA L. CAGOCO, Reporter
Full Story at BusinessWorld
Shanghai-based Shimao Property Holdings Ltd. plans to invest $2 billion-$4 billion in hotel, entertainment, as well as in mixed development buildings for office, residential and commercial use in the Philippines within the year under long-term leases, Trade Secretary Peter B. Favila told reporters yesterday.
Shimao Group chairman Hui Wing-Mau, named by Forbes as having one of the 10 biggest private fortunes in China in 2002, will sign today a memorandum of understanding (MoU) with Bases Conversion Development Authority (BCDA) Chairman Aloysius R. Santos and President/CEO Narciso L. Abaya, said Mr. Favila.
BCDA Vice-President Aileen Anunciacion R. Zosa told BusinessWorld in a separate interview that the MoU involves giving Shimao all the data it needs to conduct a feasibility study for projects in Bonifacio Global City. "The agreement will give the Shimao Group a foothold to a sizeable portion of land in Bonifacio Global City," she said, adding this will be Shimao’s first venture in the Philippines.
Mr. Favila told reporters both the government and Shimao hope a formal signing will be held during President Gloria Macapagal Arroyo’s visit to Shanghai late next month.
Wednesday, 21 March 2007
By Rommer M. Balaba
Full Article at the Business Mirror
SOCIOECONOMIC Planning Secretary Romulo Neri expects the gross domestic product to be boosted by the robustness of economic activities, particularly by a strong surge in export receipts as well as consumer consumption so that he believes GDP would hit at least 6 percent this first quarter. The 2007 target is 6.1 percent to 6.7 percent.
Neri said, “Our exports grew 27.3 percent [in January] despite the fact it is negative in December . . . We are hoping for Q1 to be near 6 percent, although I would not hazard a guess on the growth even if it is already two and a half months into the first quarter.”
Newly appointed presidential chief of staff Jose Salceda earlier claimed the economy is in a 3-year growth spurt, beginning this year, and that growth could potentially reach 7 percent, 8 percent next, and 9 percent in 2009.
Neri added the first-quarter rate should be backstopped by higher spending and consumption. “We probably would have a little spurt on consumption because of election spending. If the candidates spend P30 billion that is about half a percentage of GDP additional spurt.”
At the same time, Neri said key infrastructure projects funded by the donor community scheduled to be started this year should also help boost growth.
Posted Wednesday, March 21, 2007
TUESDAY, MARCH 20, 2007 | ECONOMIC ZONES
Original Story at http://www.gov.ph/news/?i=17421
CLARK FREEPORT ZONE, Pampanga—President Gloria Macapagal-Arroyo signed here today two laws that would further boost the former Clark Special Economic Zone, now renamed Clark Freeport Zone (CFZ), as an investment haven.
One of the two new laws is Republic Act No. 9400 or "An Act Amending R.A. 7227, as Amended, Otherwise Known as the Bases Conversion and Development Act of 1992 and for Other Purposes."
The other law is R.A. 9399 or "An Act Declaring a One-Time Amnesty on Certain Tax and Duty Liabilities, Inclusive of Fees, Fines, Penalties, Interests and Other Additions Thereto, Incurred by Business Enterprises Operating Within the Special Economic Zones and Freeports."
One of the major amendments to R.A. 7227, now embodied in R.A. 9400, officially declared Clark, which used to be a special economic zone, as a freeport zone that would cover 4,400 hectares of the former Clark Air Base.
Prior to the signing of R.A. 9400, the 4,400-hectare area was under the administration of the Clark Development Corporation (CDC), the implementing arm of the Bases Conversion Development Authority (BCDA).
The rest of the 29,000-hectare reverted base lands located in Angeles City, Mabalacat and Porac towns in Pampanga and Capas and Bamban in Tarlac would now be under the jurisdiction of the Philippine Economic Zone Authority (PEZA).
R.A. 9400 also expressly provides the exception of 29.5 hectares of land near Clark’s main gate--22 hectares for commercial use and 7.5 hectares of the Bayanihan Park--from being part of the freeport.
"The exempted areas would not enjoy the same tax incentives as provided for locators inside the designated freeport zone but this would give local business enterprises a level playing field," CDC president Levy Laus said.
The law further states that "the CFZ shall be operated and managed as a separate Customs territory ensuring free flow or movement of goods and capital equipment within, into and exported out of Clark, as well as provide incentives such as tax and duty-free importation of raw materials and capital equipment."
However, exportation or removal of goods from the territory of Clark to other parts of the country will also be subjected to Customs duties and taxes under the Tariff and Customs Code of the Philippines, as amended by the National Internal Revenue Code.
Another provision of the new law is that no national or local taxes would be imposed on registered businesses inside Clark but they would instead pay five percent tax on Gross Income Earned, divided as follows: three percent to the national government and two percent to the municipality or city where they are located.
Amendments to R.A. 7227 also include the declaration of several areas such as Bataan, Poro Point, Morong and John Hay as special economic zone where the same tax and duty privileges are expressly provided in R.A. 7227.
The Remedial Tax Amnesty or R.A. 9399 grants tax amnesty to registered businesses within the freeport and special economic zones.
Business enterprises may avail of the benefits of remedial tax amnesty granted on tax and duty liabilities, including fines and penalties and interests incurred or might have been incurred as a result of the Supreme Court rulings in July 2005.
R.A. 9399 also provides that business enterprises in the said areas are required to pay P25,000 within six months from the effectivity of the law.
R.A. 9400 was the result of the consolidation of Senate Bill 2260 and House Bill 5064, while R.A. 9399 was a combination of Senate Bill 2259 and House Bill 4901. Both laws were authored by Senator Ralph Recto and were certified as urgent by the President.
Among those present during the signing ceremonies held near the flagpole of the Clark Parade Grounds were House Speaker Jose de Venecia Jr., Senator Recto, Finance Secretary Margarito Teves and Trade Secretary Peter Favila.
Posted Wednesday, March 21, 2007
Tuesday, 20 March 2007
TUESDAY, MARCH 20, 2007 | COMMENTARY
Original Article at http://www.gov.ph/news/?i=17415
We always take these reports with a sense of urgency and we want to pinpoint the specific areas and communities where hunger may be rife so that effective intervention can be mounted.
I shall continue to see to it that nobody is left behind in the social payback of economic growth, and fighting hunger shall be a constant priority in strategic and immediate levels.
On the strategic level, the government is advancing agricultural production programs, broadening and speeding up the food distribution system and balancing out price disparities and fluctuations.
On the immediate level, we have put up rolling stores in poor communities, checked food prices in the markets and made sure food transport routes are running smoothly from farm to market.
The overall drive for investments and jobs will also help dent the incidence of hunger although we know that this issue cannot be totally attributed to poverty and lack of opportunity but also to the spending patterns of the people.
I ask our people to spend on the basics first before the luxuries so our children will have enough to eat. All aspects must be dealt with so the whole citizenry can be healthy and productive.
By Katrina Mennen A. Valdez and Darwin G. Amojelar
Full Article (related to EO500B) at The Manila Times
The Clark International Airport Corp. has requested the Commission of Election to exempt the airport from the election-related ban on construction as its expansion has been scheduled to start next month.
“By April, we expect the expansion to start and we are seeking exemption from Comelec on the construction ban,” Victor Jose Luciano, CIAC president and chief executive, told reporters.
Luciano explained the bidding for the DMIA expansion is ongoing and the pre-qualification has started last Thursday. “I think there were six bidders [who submitted intentions] for the construction of DMIA,” he said.
“We expect to finish the construction either October or November,” he added.
The estimated cost of the project is P160 million, Luciano disclosed. Of the total cost, P68 million will be for the rehabilitation and expansion of the DMIA passenger terminal I alone and the rest for the purchase of X-ray machines, baggage conveyor belts and other equipment.
Luciano said the Bases Conversion Development Authority would write to Comelec requesting exemption the infrastructure of CIAC under BCDA.
The CIAC chief said the expansion of the terminal would add one million passengers capacity. The current capacity of the terminal is one million passengers.
“The actual passengers for the first two months of the year are very promising. In January our growth was 50 percent higher over January last year,” Luciano said.
Last year, DMIA’s international and domestic passengers reached more than 500,000.
Joint Foreign Chambers call for liberal RP aviation policy
By BERNIE CAHILES-MAGKILAT
Original article at Manila Bulletin
The Joint Foreign Chambers of Commerce of the Philippines has urged government to adopt a liberal aviation policy to ensure continued growth of the Diosdado Macapagal International Airport (DMIA) into a regional transport and logistics hub in Asia.
Foreign businessmen said that once Executive Order No. 500-B to repeal EO 500-a is signed by President Arroyo, it will lay the legal basis and ensure a long-term policy stability for growth and investments in DMIA, the joint statement said.
"The Philippine government policy to create a stable, progressive environment for growth and investment at Clark is just beginning to yield positive results in passenger and cargo service at the former United States Air Force base," the statement said.
E.O. 500-A removed the fifth freedom rights, which allows airlines to pick up passengers in either Clark or Subic, proceed to a third country before returning to their home country. There are now three new carriers in Clark — Air Asia, Hong Airways, Tiger Airways and Asiana Airlines.
In 2006, nearly 500,000 passengers arrived at DMIA, an increase of more than 110 percent from the 225,000 passenger in 2005.
In cargo service, the American carrier UPS has made DMIA its main intraAsian hub, linking Clark and major Asian cities with the global operations hubs of UPS in Louisville, Kentucky USA and Cologne, Germany.
In pushing for the repeal of EO 500-A, the Joint Foreign Chambers cited the developments in Central Luzon like the opening of the Subic-Clark-Tarlac Expressway late this year.
Singapore-based carrier Tiger Airways, which flies from Singapore to Clark and Macau and which accounts for 51 percent or 238,000 of the 470,000 total passengers at the DMIA in 2006, could Abandon Clark and the Philippines. Tiger paid P100 million in landing and other fees to Clark International Airport Corp. in 2006.
The Civil Aeronautics Board, which earlier said it will come up with a new EO that will repeal EO 500-A issued by President Arroyo aimed at relaxing restrictions on foreign carriers and encourage them to increase flights to Diosdado Macapagal and the Subic Bay international airports has yet to come up with the EO. "Actions of the Civil Aeronautics Board could jeopardize the success of government policy," the Joint Foreign Chambers said.
The delays in coming up with a new EO is due to several conflicting positions of the different stakeholders in the industry. Inputs from CAB showed that only 3rd and 4th freedom rights are automatically granted, while 5th and 7th freedom rights are subject to more qualifications. But reciprocity is still not a requirement and reciprocal benefits to Philippine carriers are not guaranteed.
The draft EO 500-B reiterates the CAB’s mandate to unilaterally grant unlimited 3rd, 4th, 5th and 7th freedom rights to foreign air carriers. It expands EO 500 by including the implementing rules and regulations that were not in EO 500.
In addition, planners are faced with the reality that existing air treaties allow 68 foreign carriers to operate to Clark, but only five have been actually availing themselves of their rights.
There are also criticisms on the draft EO because while it seeks to grant 7th freedom rights to foreign airlines, it does not guarantee similar rights to Philippine carriers.
Under EO 500B, Thai Airways or Japan Airlines, for example, can base airplanes 94n Clark and fly from Clark to various airports in Asia, Middle East, Europe and the United States. But Philippine Airlines, Cebu Pacific or Asian Spirit cannot just open an international base from Clark and fly to other countries — not even to Thailand or to Japan (the home countries of Thai Airways and Japan Airlines).
The Philippine carriers will have to first beg or fight for similar or reciprocal rights. In the event that other countries give new, even if limited, privileges to Philippine carriers, they will surely extract new concessions in the process.
The proposed EO 500B may even be unconstitutional some quarters said because the Charter mandates that trade policy be based on equality and reciprocity. Section 13, Article XII, of the Constitution provides: "Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity."
Moreover, by granting 7th freedom rights to foreign airlines, EO 500B would in effect be allowing them to run a public utility operating out of the Philippines.
On the other hand, former congressman and presidential adviser Rene Diaz said there is still a window of opportunity that all stakeholders pooling their ideas could exploit.
The mere fact that the small carriers are able to come in, and do business although on a limited scale, shows that EO 500B does not totally shut them out. He said that the big airlines that have not bothered to service DMIA have no right to complain of the tight situation in Clark or that they were being squeezed out of the picture.(BCM)
Government urged to allow foreign carriers to set up base in Clark
By Ma. Elisa P. Osorio
Original Article at The Philippine Star 03/20/2007
The Joint Foreign Chambers of the Philippines is asking the government to allow foreign carriers to set up at the Diosdado Macapagal International Airport (DMIA) in Clark, a perk not enjoyed by domestic carriers.
In a statement, the representatives of various international chambers pushed for the approval of Executive Order 500-B.
EO 500-B has been met with criticism because while it seeks to grant seventh freedom rights to foreign airlines, it does not guarantee similar rights to Philippine carriers.
For example, Japan Airlines may base in Clark and fly to destinations in Asia, Middle East, Europe and the United States. However, Philippine Airlines, Cebu Pacific or Asian Spirit cannot simply open an international base from Clark and fly to other countries.
The country will still have to bargain for reciprocal rights, a right that was given by the Philippines to the other nations for free should the EO pass.
Meanwhile, the foreign chambers stressed that EO 500-B must be adopted in order to ensure long-term policy stability and ensure growth and investment. They warned that to do otherwise can jeopardize the success of government policy.
"The Philippine government policy to create a stable, progressive environment for growth and investment at Clark is just beginning to yield positive results in passenger and cargo service at the former United States Air Force base," they said.
"But they also pointed out that actions of the Civil Aeronautics Board (CAB) could jeopardize the success of government policy."
In February, CAB awarded Singaporean-based carrier Tiger Airways, which flies from Singapore to Clark and Macau, a three-month operating permit from April to June 2007. The earlier permit granted Tiger was for six months, the traditional worldwide industry practice of setting schedules.
The chambers said CAB justified its decision for shorter operating permit saying it needed time to assess the complaints of local carriers.
"This is punitive action by any terms, unqualified and unjustified as the complaints of the local carrier were not substantiated or verified for merit," the chambers said.
They added that if Tiger was to cancel their flights in the country because of the shorter permit, other carriers will be very wary to enter such an "uncertain market".
This, the chamber said, will then jeopardize the government’s infrastructure projects because the physical expansion and construction of the DMIA is backed by the fees paid by the carriers.
According to them, the government has continuously encouraged airlines to use Clark but only a few have heeded this call. They said the approval of EO 500-B can remedy this.
"In the absence of service to Clark by designated carriers and to accelerate the development of DMIA as a premier air destination, the legal fundamental for the carriers to use DMIA outside the protocols of the bilateral agreement has taken place with the consent of the CAB and should continue and be regularized."
Foreign chambers eye liberal aviation policies
By Elaine Ruzul S. Ramos
Original Article at Manila Standard
The Joint Foreign Chambers of Commerce of the Philippines will push for further liberalization of the country’s aviation policies to assure the viability of the Diosdado Macapagal International Airport at Clark in Pampanga as a regional air transport and hub in the region.
In a statement, the Joint Foreign Chambers recommended the adoption of Executive Order 500-B, which was earlier endorsed by the National Competitiveness Council.
The group said the legal fundamentals for carriers to use the Diosdado Macapagal airport outside the protocols of the bilateral agreements must remain in place to accelerate the airport’s development as a premier air destination.
“An Executive Order from the President defining the Rule on Traffic Rights to Clark and Subic will lay the legal basis. EO 500-B will meet this purpose. To ensure long-term policy stability and ensure growth and investment, the Joint Foreign Chambers recommend the adoption of EO 500-B endorsed by the National Competitiveness Council,” the joint chambers said.
EO 500-B repeals EO 500-A, which allows national carriers of other countries to fetch passengers to and from the Clark and Subic international airports.
President Gloria Macapagal Arroyo issued EO 500 in August 2006 to relax restrictions on foreign carriers and encourage them to increase flights to Diosdado Macapagal and the Subic Bay international airports.
— Beverly T. Natividad
Original Article at BusinessWorld Online
Vol. XX, No. 166
Tuesday, March 20, 2007
Corruption and unpredictable policies are keeping much-needed investments away from the Philippines, clear macro-economic gains notwithstanding, Socioeconomic Planning Sec. Romulo L. Neri said in a forum yesterday.
Investments, in turn, hold the key to finally enabling the poor to feel the benefits of macroeconomic gains due to increased employment.
In a forum held by the Ateneo de Manila University’s Economic Policy Reform and Advocacy, entitled "Regulating the Regulators: Why our economic gains redound to a few," Mr. Neri said microeconomic reforms will have to be done in the airline, ports, shipping, telecommunications, and power sectors.
In his presentation, Mr. Neri compared the economy to an elephant whose limbs are made up of economic growth factors, namely, monetary, fiscal, investments, and savings.
He explained that investments and savings serve as the fore legs, since these factors spur growth.
Mr. Neri noted that the country has already stabilized its economy by keeping interest rates and the fiscal deficit low, hence, managing the monetary and fiscal side of its economy. He said the national government has also managed to gain some fiscal savings enough to take on priority infrastructure spending this year.
With the investment limb still weak, however, the country is finding it hard to "unleash rapid economic growth."
"The challenge now is how to translate economic gains for gains that people would feel. I think the key is in bringing in investments. With more investments, there will be more stable jobs and people will be less hungry," said Mr. Neri.
Today, investments account for just 15% of the country’s gross domestic product (GDP), compared with China’s 40% of GDP.
Mr. Neri said prospective investors are being turned off by corruption, policy distortions, weak institutions, and poor governance.
For instance, he said, "it then becomes very risky to invest here because the rules are always changing."
Lack of investments, he said, impacts more on the poor than any other social stratum due to high unemployment, low income, poor education, and poor health.
A big part of the problem, he said, lies in the phenomenon called "regulatory capture," by which agencies that are entrusted with the task of regulating industries are themselves heavily influenced by the very sectors they are supposed to oversee. He cited as examples the Civil Aeronautics Board (CAB), Philippine Ports Authority, Maritime Industry Authority (Marina), National Telecommunications Commission, and the Energy Regulatory Commission.
He said addressing this problem will help bring down fees and other costs that are turning away investors. Citing the 2006 World Bank Report on Cross Border Trading, Mr. Neri said the Philippines has the highest port and terminal handling cost (or cost to export a container) compared with other Southeast Asian markets. A 20-footer container, for example, will cost $1,336 to export from the Philippines, compared with $848 from Thailand and $382 from Singapore.
Vicente T. Suazo, Jr., Marina administrator, said in an interview that high sea transport costs are due mainly to shipping firms failing to combine cargoes and harmonize schedules for shipping to one destination in order to save on costs. Since the shipping industry is deregulated, he said, Marina cannot dictate on shipping practices. "This is a business decision. Without cargo consolidation and a rationalized schedule, prices are high because, in effect, you pay for the empty spaces," said Mr. Suazo.
Carmelo L. Arcilla, CAB executive director, argued in a separate interview that CAB has been "at the forefront of efforts to liberalize the air transport industry." For instance, he said, CAB is encouraging low-cost carriers to serve more routes in the Philippines.
Monday, 19 March 2007
MONDAY, MARCH 19, 2007 | COMMENTARY
The strength of the peso is boosting social amelioration by denting the price of water, gasoline, LPG and food.
We are making headway in the social payback of economic growth and this is the real story taking place in the lives of the people.
The combined potency of a robust economic blueprint and the productivity of Filipinos here and abroad has caught the eye of investors and political observers who are now seeing a permanent trajectory of economic and political stability.
The focus of the world is not only on the Philippine economic wonder but the way we are making democracy work while keeping the threat of terror at bay.
We are consolidating the political, economic, social and security ramparts of nation-building in a manner and pace that has never been done; and this is a tribute to the resiliency, excellence, spirit of enterprise and courage of the Filipino people.
Posted Monday, March 19, 2007
Sunday, 18 March 2007
By Jacob Cunanan
Full Report in Business Mirror
CLARK SPECIAL ECONOMIC ZONE, Pampanga – Indignant investors here and local government officials in the area lashed at the Civil Aeronautics Board (CAB) for thwarting President Arroyo’s grand vision to develop the Diosdado Macapagal International Airport (DMIA) into a world-class logistics hub and passenger terminal.
The stakeholders’ move came after the CAB recently cut the Foreign Air Carrier Permit (FACP) of Singapore-based low-cost carrier Tiger Airways from six months to three months.
Posted Sunday, March 18, 2007