Saturday, 5 May 2007

Private sector, development partners/donors remain bullish on RP economic growth

Friday, May 04 2007 @ 03:38 PM BST
Original report at Balita Organization

Citing improved economic indicators and the dedication of a leader to grow the economy, the private sector led by the Philippine Chamber of Commerce and Industry (PCCI) and the country's development partners and donors have signified their "enthusiasm and interest" in continuing to be partners of the national government in pursuing development projects that would further improve the economy and eradicate poverty.

In their response to the call of the government for more private sector and business community participation in the "ready-to-go" infrastructure projects that would spur development and economic growth in the five super regions development plan of President Gloria Macapagal-Arroyo during the 2nd National Government Infrastructure Forum held Friday at the Shangri-La Hotel in Makati City, the PCCI and the development partners and donors expressed their "continued support" to the economic development of the country.

PCCI Chairman Ambassador Donald Dee said the improved macroeconomic indicators have "made investors look at the Philippines."

While noting that the government funding for infrastructure has doubled at present compared to 10 years ago, Dee said the government, in partnership with the private sector, must allot more funds for infrastructure projects.

Stressing that vital infrastructures have to be in place to further grow the economy and thus eradicate poverty, he urged the government for more coordination in the infrastructure planning and implementation.

He specifically called for the strengthening of the roll-on, roll-off (Ro-Ro) nautical highway as the Ro-Ro "is part of all of these infrastructure projects," referring to infrastructure projects lined up by the government for the development of the country's five super regions.

"There is a lot of work coordination that has to be done. The PCCI offers its support," Dee said as he committed that the 98 local chambers could be used, with "warm bodies to help you."

United States Agency for International Development (USAID) Mission Director Jon Lindborg stressed "urgency in terms of the implementation of the many development projects in the Philippines" to finally propel the economy that has many potentials to be globally competitive.

"Two years since I've been here, I've seen progress," he said as he noted that there are "many constraints and challenges" in the implementation of infrastructure projects.

Among these is the issue on privatization, where he noted "bureaucrats should not be in business usually."

Lindborg said "the stakes are high" but there are three things he wants the government and the private sector to put in mind: first, without infrastructure, no economy grows; second, without infrastructure, no poverty reduction; and third, infrastructure is so important in economic growth but there is also the need to devote time and effort in the soft infrastructure for progress which is peace and security.

"The critical approach is to ensure transparency, fair competition and sanctity of contracts," he said.

He also reiterated the US government's "continued support" to the Philippine government. (PNA)

USAID tells RP to fast track link between DMIA and Makati

Original report at GMANews.TV
05/04/2007 | 04:13 PM

The chief of the mission of the United States Agency for International Development on Friday urged the Philippine government to fast track the project that would connect the Clark Special Economic Zone, particularly the Diosdado Macapagal International Airport to Makati City without the hassle of battling massive traffic build-up along Edsa, Metro Manila's main thoroughfare.

Jon Lindborg, USAID mission director, told government officials on the 2nd National Government Infrastructure Forum, that the development of Clark would require political will.

"Clark has space and its runways are already there but I don't see anything to connect it to the city center.There's the expressway but once you get to Quezon City, it will take you quite a while to get to your destination," Lindborg said.

The Forum gave focus on 26 projects that would fall under the Luzon Urban Beltway Project. The projects consisted of 12 roads, seven railways, two airports, three seaport/Roll-On Roll-Off projects and two bulk water projects.

Cerge Remonde, director general of the Presidential Management Staff and head of the Infrastructure Monitoring Task Force, said these projects were part of the total 87 priority projects of President Arroyo all over the Philippines.

Remonde added that the plan to connect DMIA to Makati City would fall under several projects of the government. The projects that the government lined up included the rehabilitation of Edsa, The North Luzon East Expressway project, P3.09 billion; the P27.665-billion North rail; the Northrail-Southrail Linkage project worth P2.773 billion and the C6 Lakeshore Project , P5.5 billion and the C5 project worth P2.964 billion. - GMANews.TV

Inflation Pressures Remain Low

Media Release
Bangko Sentral

Price pressures remained low with headline inflation rising marginally in April to 2.3 percent from 2.2 percent in March. This brought the average inflation for the first four months of the year to 2.8 percent. The April inflation outturn was within the BSP’s forecast range of 2.0-2.7 percent and was sharply lower relative to the year-ago inflation of 7.1 percent. The modest uptick in price pressures was due largely to the faster increases in the indices for food, beverage and tobacco; fuel, light and water; and services. On a month-on-month basis, prices rose by 0.2 percent following the 0.1 percent price decline in March. Meanwhile, year-on-year core inflation was unchanged from the previous month’s level at 2.6 percent.

The near-term outlook for inflation remains essentially unchanged. The BSP believes that overall price trends continue to support an outlook of a generally benign inflation environment over the policy horizon. Demand-side pressures have remained manageable while supply-side pressures have continued to ease in recent months given stable food prices, good weather conditions, and the strengthening peso. In the absence of further adverse shocks, emerging forecasts by the BSP indicate that average inflation in 2007 may fall below the 4.0-5.0 percent target range while the 2008 inflation may settle at the low end of the 4.0±1.0 percent point target.

Going forward, the BSP will continue to keep a close watch over risks to the inflation outlook, particularly those coming from a sustained rapid growth in domestic liquidity.

USAID official says RP needs to spend more for infrastructure

By Marianne V. Go
Original report at The Philippine Star 05/05/2007

The Philippine government faces certain challenges that need to be addressed if it hopes to get a more enthusiastic response from international funding agencies, the head of the local unit of the United States Agency for International Development (USAID) said yesterday.

One such challenge is to allocate more funds to infrastructure, said USAID mission director Jon D. Lindborg.

Speaking at the Second National Government Infrastructure Forum, Lindborg said the mere submission of a "wish list" for funding is not likely to be received with enthusiasm by prospective donors.

"We heard it all before. You gave us a list and promised to do it, but nothing happened."

Lindborg was reacting to presentations made by Agriculture Secretary Arthur Yap, Tourism Secretary Joseph H. Durano, Secretary Edgardo D. Pamintuan of the Subic-Clark Alliance for Development (SCAD) and Presidential Advisor on Mindanao Development Jesus G. Dureza.

The USAID official noted that the foreign donor community has grown weary over repeated appeals by the Philippine government for funds to support its various infrastructure projects.

He pointed out that just as in the World Bank-sponsored Economic Development Forum held in Cebu just last March, "challenges remain" that the Philippine government has to address.

First and foremost, Lindborg pointed out, is the inadequate budget provided by the Philippine government for infrastructure which is a mere five percent of the gross national product (GNP).

Lindborg also noted the inefficient prioritization of existing infrastructure projects; lack of public sector coordination and planning; the so-called "regulatory capture"; bureaucracy in business and the sanctity of contracts.

Lindborg cited the Ninoy Aquino International Airport Terminal 3 as the "poster child" of the Philippines’s infrastructure problem and a symbol "of what could go wrong here."

Philippine Chamber of Commerce and Industry chairman emeritus Donald Dee also expressed the private sector’s frustration in participating in government infrastructure projects considering the legal entanglements and the lack of capacity of implementing agencies.

Economist Peter Wallace echoed Lindborg’s concern about the inadequate government allocation for infrastructure expenditures suggesting that the allocation should be closer to eight to 10 percent of GNP.

Wallace was also concerned that the congressional cut of the 2007 budget and the projected government revenue shortfall this year of P6 billion would only aggravate the matter.

Wallace, along with the American Chamber of Commerce director John Forbes, also cited the lack of sanctity of contracts, again citing the NAIA Terminal 3 case.

Local economist Washington Sycip took exception to repeated calls for transparency, pointing out that while the Philippines is accused of corruption and is constantly pushed for more transparency, Malaysia also practices its own form of granting government projects and requiring instead contributions to its major political party.

Sycip argued that "each country has its own way of doing things."

In fact, Sycip appeared to espouse a "strong arm tactic" in getting things done more efficiently. He noted that "Malaysia can award (contracts) without any bidding and has excellent highways, while we have bidding but we have lousy highways."

He also recalled that the creation of the Baguio Export Processing Zone to initially get Texas Instrument’s investment 28 years ago was facilitated by the issuance of an Executive Order by President Marcos during the Martial Law years.

Despite the criticism, Sycip stressed the belief that infrastructure development is still the best way to address the country’s poverty problem.

April inflation up .1% from March

By Roderick T. dela Cruz
Full report at the Manila Standard

Inflation, or the rate of increase in consumer prices, slightly rose to 2.3 percent in April from a 20-year low of 2.2 percent in March.

The April headline inflation, however, was a significant improvement from the 7.1 percent recorded a year ago.

The Bangko Sentral ng Pilipinas earlier projected an inflation rate of 2 percent to 2.7 percent for the month.

Inflation in the first four months of 2007 averaged 2.8 percent, lower than the government’s target of 4 percent to 5 percent for the whole year.

The National Statistics Office said the year-on-year core inflation, which excludes selected food and energy items, remained at its March rate of 2.6 percent.

DOTC told to explain $329-m deal

Original report at the Manila Standard

The government’s Infrastructure Monitoring Task Force has directed the Department of Transportation and Communications to explain its $329.5-million deal with a Chinese company for the national broadband network, which was allegedly sealed without the benefit of a public bidding.

Claiming that transparency must be observed in the implementation of government-initiated infrastructure projects, Presidential Management Staff director general and task force chief Cerge Remonde said the department must respond to accusations that the agreement did not pass a competitive bidding process.

During the 2nd National Government Infrastructure Forum held at the Makati Shangri-La Hotel yesterday, Peter Wallace of the Wallace Business Forum said the business community was worried about the sanctity of the contract for the broadband project.

Remonde asked transportation and communications officials to address investors’ concerns over the broadband project, but it turned out that no official from the department attended the infrastructure forum.

The department is in charge of implementing most infrastructure projects in the pipeline, including railways and telecommunication projects. Roderick T. dela Cruz

Friday, 4 May 2007

WB to finance LRT, Bicol projects

Full report at Manila Bulletin

The World Bank will finance two of the 10 "ready to go" infrastructure projects earlier identified by the Department of Finance.

DoF yesterday said the World Bank will participate in funding the P6.209-billion Line 1 North Extension Project (LRT-1) and the P1.115-billion Bicol Emergency Power Restoration Project.

Last March the government named 10 "high-impact" infrastructure projects and offered these to donor and funding agencies. Priority projects include public works such as roads and bridges, irrigation (for agri-based sectors), rail and power projects.

The biggest infrastructure project worth P35.5 billion is the construction of the Light Rail Transit Line 6 which will extend the existing Line 1 from the Baclaran station to the cities of Paranaque, Las Pinas, and the adjoining municipalities of Bacoor, Imus, and Dasmarinas in Cavite.

Thursday, 3 May 2007

Higher growth goal set

By Maricel E. Burgonio, Reporter
Original report at The Manila Times

THE Development and Budget Coordinating Committee (DBCC) on Wednesday approved a higher economic growth target for next year on the back of new policy reforms that will enhance the tourism industry.

The DBCC upgraded the country’s growth target range to between 6.2 percent and 6.8 percent in 2008 from the original forecast of 5.91 percent to 6.65 percent.

Finance Undersecretary Gil Beltran said the government will pursue an open skies policy to free up the domestic airline industry and encourage more tourist arrivals.

The DBCC also programmed inflation to range from 3 percent to 4 percent, while the peso is seen at 48 to 50 to the dollar.

Texas Instruments to invest $1B in RP

By Lira Dalangin-Fernandez
Full report at the
Last updated 04:29pm (Mla time) 05/03/2007

MANILA, Philippines -- US-based Texas Instruments Inc., the world's biggest maker of mobile phone chips, is planning a second plant in the Philippines, costing $1 billion.

President Gloria Macapagal-Arroyo said the investment was the "single biggest investment" by a foreign firm and that the Philippines got it amid "fierce competition" from neighboring countries.

BSP to Implement New Liquidity Management Measures

Media Release
Bangko Sentral ng Pilipinas

Effective on 10 May 2007, the BSP will implement the following measures to enhance its liquidity management:

1. Encourage GSIS, SSS, and other government-owned and -controlled corporations (GOCCS) to deposit funds with the BSP;
2. Allow trust entities under BSP supervision to deposit funds with the BSP; and
3. Allow special deposit account (SDA) placements of banks to be considered as alternative compliance with the liquidity floor requirements for government deposits.

These measures are intended to help prevent potential inflationary pressures that could build up over the medium term as a result of rapid money supply growth driven mainly by foreign exchange inflows, which in turn have been encouraged by strong macroeconomic fundamentals and positive market sentiment on the country’s economic prospects. The measures were drawn up following a series of consultations undertaken by the BSP with GOCCs, the banking industry, and financial market players.

The Fixed-Term Deposit Facility for GOCCs is an existing facility but the BSP is encouraging the GOCCs to make greater use of this instrument by pricing it more competitively and in line with the BSP’s policy interest rates.

Meanwhile, trust entities under BSP supervision will be allowed to deposit in the BSP’s SDA facility. Such placements will be treated as separate from those of the parent institution but will be likewise subject to SDA guidelines, including the tiering scheme. On the other hand, the eligibility of SDA placements with the BSP as alternative compliance to the liquidity floor requirement will provide banks with greater flexibility in meeting the prudential requirements for government deposits.

Consistent with its commitment to prudent monetary policy, the BSP will continue to pay close attention to the potential risks to inflation, notwithstanding the benign inflation outlook. The monetary authorities believe that the new measures can prove effective in reining in strong liquidity growth, and therefore stand ready to reassess the settings for monetary policy once the impact of the new measures is fully transmitted to the financial system.

Wednesday, 2 May 2007

Gov’t changes growth targets

Full report at BusinessWorld Online
BY JUDY T. GULANE, Senior Reporter

The interagency Development Budget Coordination Committee (DBCC) is projecting economic growth, as measured by gross domestic product (GDP), to keep surging in 2008 and the next two years on the back of strong macroeconomic fundamentals.

The growth rates, however, are lower than those set out in the official medium-term development plan, but officials yesterday said the assumptions on which the earlier goals were made were no longer valid.

In its meeting yesterday, the DBCC approved economic growth assumptions of 6.2-6.8% next year, 6.3-6.99% in 2009 and 6.54-7.37% in 2010. GDP has been projected to grow between 6.1-6.7% this year.

The DBCC also projected gross national product (GNP), which includes remittances from overseas Filipinos, to grow by 6.21-6.92% in 2008, 6.7-7.43% in 2009 and 6.97-7.83% in 2010. GNP is expected to grow by 6.2-7.1% this year.

The DBCC is composed of the Finance and Budget departments, National Economic and Development Authority (NEDA), the Bangko Sentral ng Pilipinas, and the Office of the President.

The growth assumptions for 2007 up to 2010 are lower than those in the Medium-Term Philippine Development Plan (MTPDP) for 2004 to 2010, which targeted GDP growth of 6.5-7.5% in 2007 and 7-8% in 2010.

PGMA unveils comprehensive Labor Day package

Original article at Gov.Ph News

President Gloria Macapagal-Arroyo unveiled today a comprehensive Labor Day package which, she said, is her administration’s way of "bringing the benefits of a strong economy to every worker."

In her speech before labor union leaders and workers at the packed Folk Arts Theater, the President announced the package of benefits for government workers, among which are the following:

* 10 percent increase in salaries starting July this year;
* P5,000 collateral-free loan that could be availed of starting May 2; and
* 10-month salary loan to be prepared by the Government Service Insurance System (GSIS).

Hand-in-hand with these benefits, the President said, is the Social Security System’s (SSS) intensification of its Flexi-Fund for overseas Filipino workers (OFWs), and the coverage of informal workers.

An OFW Pension System, according to her, is in the works, and the Bangko Sentral ng Pilipinas is coming up with steps to decrease the cost of remitting cash to the Philippines.

"That is why, I’m saying our national agenda is focused on creating good paying jobs, stable prices and bringing the benefits of a strong economy to every worker," she pointed out during the 105th Labor Day celebration organized by the Department of Labor and Employment (DOLE).

"Noong Women’s Day, naunawaan ko… napag-alaman ko na iyong mga manggagawa ng pamahalaan ay hindi pala naabutan ng microfinance, kaya bukas sisimulan natin iyong microfinance program kung saan ang bawat empleyado ng pamahalaan na gustong humiram sa microfinance ay magkakaroon ng five thousand pesos pautang na walang collateral. Gagawin natin yan bukas," she announced.

Aside from the 10-month salary loan, the GSIS, she said, is also increasing its scholarship grants, lowering interest rates, restructuring housing loans, expanding hospitalization support, and improving its service via computerization.

The Overseas Workers Welfare Administration (OWWA), for itself, will reserve P50 million for skills upgrading and bridging programs "para iyong ating mga seafarers ay puedeng maging mga engineer and deck officers."

The Philippine Charity Sweepstakes Office (PCSO), for its part, will give funds for the Migrant Workers Scholarship Fund while the Bureau of Immigration and Deportation (BID) will henceforth remove escort services in airports and seaports.

And still for the OFWs, the Philippine Overseas Employment Administration (POEA) will use 10 percent of its earnings to strengthen the campaign against illegal recruitment.

For the informal sector, the DOLE will set up a P50-million livelihood fund for the parents and family members of child laborers, in accordance with the principles of the International Labor Organization’s Child Labor Program, the President said.

The Pag-IBIG Fund, meanwhile, will release P6 billion worth of dividends to its members while another P30 billion, according to the President, will be reserved for loans for tuition and emergency medical needs.

To protect job applicants who spend so much in personal funds surfing the web for jobs which may be non-existent, the President ordered the DOLE to start investigating job web sites.

The labor sector had earlier come up with a manifesto enumerating its wishes, including the setting up of an Internet Monitoring Office at the DOLE because of the proliferation of attractive job sites that turn out to be duds.

The Labor Sector also asked for the exemption from taxes of workers earning P15,000 a month or less, especially those earning only the minimum wage.

For the sugar workers, Sugar Livelihood Centers costing P25 million will be built in Regions III, VI and X, according to the President. Another P12.6 million will be reserved for the Sugar Workers Socio-Economic Program.

Meanwhile. Press Secretary Ignacio R. Bunye said today the "President’s Labor Day package exemplifies the fruits of tripartite consultation as applied to building a strong nation and a better future for us all."

Bunye, who is also the Presidential Spokesperson, pointed out that the "record of this administration in creating jobs, promoting skills, training, and securing industrial peace speaks for itself."

"The challenge is for every day to be a day of national pride and productivity for all workers, including our overseas Filipino workers (OFWs). It is this noble challenge that inspires government to put together a package of new benefits and programs to meet our workers’ needs," Bunye said.

"Labor Day is a tribute to the sterling role of Filipino workers, here and abroad, for driving our economy forward. It is to their betterment that we owe the country a unified platform for national cohesion; an understanding for constructive engagement across all sectors," he stressed.

Bunye added: "Today, as we enter the homestretch of the campaign period, let us give labor the importance that it deserves by discussing the issues close to every Filipino worker’s heart: decent wage, job security, shelter, and a better quality of life."

Govt OKs PAL use of Naia 3

The question still is how soon
Original report at GMANews.TV

Airport officials have allowed Philippine Airlines, the country's flag carrier, to cater to
international and domestic passengers at the mothballed Ninoy Aquino International Airport (NAIA)-Terminal 3.

Philippine Airlines (PAL), owned by Chinese-Filipino tycoon Lucio Tan, exclusively operates the NAIA Terminal 2.

Alfonso Cusi, general manager of the Manila International Airport Authority (MIAA), told dzBB
radio that the government only has the best interest of air commuters in mind.

He said the move would prove to be of convenience to PAL passengers, who will may no longer need to transfer terminals at the NAIA.

Tan, through his Asia's Emerging Dragon Corp. (AEDC), has eyed taking operational control of the entire NAIA terminal 3.

Aside from problems regarding the facility's construction contracts, the opening of the NAIA Terminal 3 has been indefinitely postponed pending measures to ensure its structural safety.

RP to sue Takenaka over Naia3 construction flaws

Original report at GMANews.TV

The Philippine government on Wednesday said it is now preparing to level charges against Takenaka Corp., the Japanese firm that built mothballed airport NAIA Terminal 3 for its "shabby" construction of the facility.

“They (Manila International Airport Authority) are preparing to level charges against Takenaka for the shabby job that they have done because of what had been found out to be defects, structural defects," Executive secretary Eduardo Ermita told reporters during a press briefing.

Ermita said if Takenaka is charged, it will no longer handle the repairs currently being made on NAIA 3, and that government would have to contract another group.

Government officials met with Takenaka executives last April 30 to request the Japanese company to repair the defects on the airport. An assessment by consultants TCGI Engineers Co. and Ove Arup & Partners HK showed that the facility could only withstand an Intensity 4 quake and could collapse in the event of an Intensity 6 quake.

Alfonso Cusi, MIAA general manager, said in a telephone interview that during their meeting with Takenaka last April 30, the Japanese company questioned the basis of the findings of TCGI and Ove Arup and asked for “more technical meetings."

“We do not need more technical meetings because it will just delay the opening of the airport. What we need is the terminal," Cusi said.

He said MIAA has referred the matter to the government’s legal team led by Solicitor General Agnes Devanadera for its study.

Transportation Secretary Leandro Mendoza said last week that the repair of the airport’s defects would be covered by Takenaka’s warranty. He estimated the cost for repairs plus the two percent of the project left undone at over P100 million.

Mendoza said the repairs would take another four to six months and the terminal would be reinspected afterwards. He said this will inevitably postpone the airport's opening to sometime next year instead of within the second half of 2007.

He said government is not rushing the construction and repair of the airport because it wants “a very structurally safe and sound terminal. -