OVERALL CONSUMER OUTLOOK
Bangko Sentral ng Pilipinas
• For the Second Quarter
The overall consumer confidence index for the second quarter of 2007, although still negative, improved by over 7 points to -26.0 percent from -33.3 percent in the first quarter. The decline in the negative index indicated that the number of optimists increased relative to last quarter. The near-term outlook was more favorable compared to the results obtained in the last survey, with improved indices for the third quarter and for next year.
Behind this optimism was consumers’ more upbeat assessment on the country’s economic condition as well as their own family income and financial situations as the respective indices in the second quarter moved up by at least 7 points quarter-on-quarter. Consumers attributed the favorable economic outlook to the strength of the peso, stable prices of goods and more job opportunities. Meanwhile, new business opportunities, the employment of more household members, salary increases, and better proceeds from agricultural crops were some of the reasons cited by respondents for the expected improvement in household finances.
During the quarter, there were more optimists in NCR than in areas outside NCR (AONCR) as the confidence index of the former at -24.5 percent was slightly higher compared to the latter at -26.3 percent.
Consumers in all income levels in AONCR anticipated better conditions in the second quarter as their indices improved quarter–on–quarter. In the case of NCR consumers, indices were moderately lower quarter–on–quarter but considerably higher compared to year–ago levels.
• For the Third Quarter and Next 12 Months
Consumer confidence for the third quarter likewise improved as the index at -6.7 percent increased by 4.4 points from the index recorded during last quarter survey. Confidence indices for both the NCR and AONCR were higher quarter–on–quarter. For NCR, the index at -1.9 percent was the most upbeat since the start of CES in the third quarter of 2004.
Consumers’ outlook for the next 12 months was even more upbeat. Majority of respondents nationwide were optimistic that conditions would be better over the next 12 months as the index moved up to 5.8 percent (from 0.8 percent). The confidence index for NCR at 14.0 percent was the highest ever recorded since the survey started in 2004, while that in AONCR at 4.3 percent was a reversal from the negative index (–1.3 percent) recorded a quarter-ago.
Among the reasons cited behind the favorable outlook include normalization of the political situation, anticipation of improved governance by newly elected officials, expected business upturn, and increase in job opportunities.
Expenditures for Next 3 Months
The proportion of household respondents nationwide that anticipated that their expenditures on basic goods and services would rise in the third quarter slightly declined (index at 33.4 percent from 34.2 percent from the previous survey). The expenditure items expected to have higher increases than in the second quarter were those on education, clothing and footwear, and fuel due largely to school opening-related expenditures and increases in crude oil prices.
Buying Conditions for the Next 3 Months
Respondents from both the NCR and AONCR indicated improved prospects of buying consumer durables, motor vehicles, and residential properties. Buying condition indices edged up to 49.6 percent in the second quarter from 43.9 percent in the first quarter for the Philippines, 52.9 percent from 46.8 percent for the NCR, and 49.0 percent from 43.4 percent for AONCR.
Among the reasons cited for the favorable buying conditions in the second quarter of 2007 were: 1) increasing affordability of consumer durables due to easy installment terms and availability of surplus and sale items, 2) favorable weather conditions to evaluate real estate properties, and 3) lower interest rates.
Buying Intentions for the Next 12 Months
Despite improved buying conditions in the current quarter, consumers’ buying intentions for the next 12 months were marked with restraint, with the buying intention index for the next 12 months declining by 1.1 points to 19.6 percent. Except for consumer durables, all buying intention indices declined modestly from the levels last quarter, indicating that, consumers’ expenditures on big-ticket items such as motor vehicles and house and lot will be subdued in the next 12 months.
Selected Economic Indicators: Outlook for the Next 12 Months
Consumers nationwide who believed that the peso would strengthen against the US dollar outnumbered those who believed otherwise as the index reverted to a positive number (at 1.1 percent from -11.4 percent). This is also the first time since the start of the CES in the third quarter of 2004 that the exchange rate index in NCR turned positive which implied that majority of respondents were optimistic in the second quarter of 2007 that the peso will continue to strengthen in the next 12 months. Likewise, consumers nationwide expected the interest rate and the inflation rate to decelerate in the next 12 months. The unemployment rate was also expected to drop in the next 12 months.
Expenditures of Overseas Filipino Workers for the First Quarter
Survey results during the second quarter of 2007 showed that, next to food and other household needs (91.8 percent), most OFW households spent the remittances that they received on education at 53.1 percent. More than one in five of these households spent the remittances on medical expenses (24.2 percent) and on debt payments (22.9 percent). OFW households that indicated setting aside part of remittances for savings comprised 15.7 percent of the total OFW households. Meanwhile, about 6.0 percent allotted funds for purchase of assets (purchase of vehicles and house at 3.5 percent and 2.5 percent, respectively) and 4.5 percent for investment in business. The utilization pattern of OFW remittances was similar for both NCR and AONCR households.
About the Survey
The second quarter 2007 CES was conducted during the period 2-30 April 2007 with a sample size of 2,689 households in NCR and 2,562 households in AONCR for a total of 5,251 households nationwide. The households interviewed were drawn from the National Statistics Office’s (NSO) Master Sample List of Households, which is considered a representative sample of households nationwide. The said master sample was generated using a stratified multi-stage probability sampling scheme. The total survey response rate nationwide for the first quarter of 2007 was 97.1 percent. By area, the response rate was 94.9 percent in NCR and 99.3 percent in AONCR.
Saturday, 9 June 2007
Friday, 8 June 2007
BY JEFFREY O. VALISNO, Senior Reporter
Full report at BusinessWorld
Filipinos continue to be among the world’s top savers but are now allotting more of their spare cash for vacations and home improvements, a survey by information and media firm The Nielsen Company showed.
Based on the firm’s 2007 Global Consumer Confidence and Opinion Survey, six out of ten of the Filipinos surveyed said they would save their spare cash after covering essential living expenses.
AC Nielsen (Philippines), Inc. managing director Benedicto L. Cid, Jr. said the latest results were unchanged from the first half of last year, and that the percentage of Filipinos savers, at 63%, remains higher than the 53% Asia-Pacific average.
The survey also showed the Philippines ranked fifth among 47 countries in the list of top savers. Leading the pack was Thailand with 67%, followed by Taiwan with 66%, Singapore with 65%, and Indonesia with 63%.
Full report at BusinessWorld Online
Malacañang has replaced the head of the Bureau of Internal Revenue’s (BIR) Large Taxpayers Service (LTS) group for allegedly failing to meet revenue targets.
President Gloria Macapagal-Arroyo has issued Executive Order 625 which effectively removed Nestor Valeroso from his current position. Mrs. Arroyo named Cesar Charlie Lim as BIR Assistant Commissioner and the new head of the LTS group.
BY FELIPE F. SALVOSA II, Sub-Editor
Filipinas work longer hours
ILO study asks how Pinays are able to balance work and family
Full article in BusinessWorld
Filipinos are defying the global pattern of men suffering longer working hours than women, a "role reversal" cited as an exceptional case in a 50-country study released yesterday by the International Labor Organization (ILO).
In the Philippines, women in paid jobs work an average of 41.3 hours a week while men log 40.4 hours, the ILO report said, citing data gathered in 2002. This is being driven by the services sector, where nearly half of all workers are employed.
Prof. Rene Ofreneo of the School of Labor and Industrial Relations of the University of the Philippines said the ILO study confirms the phenomenon of more Filipino women becoming breadwinners.
"Industries that are coming up, such as in services, are women-dominated. The labor market favors women," he told BusinessWorld. This is true in the call center, business process outsourcing, and garments industries, he added.
The findings also point to the "reality" of more men becoming "house-husbands," Mr. Ofreneo added. "The problem is that because of the traditional role [of women taking care of the family], women bear a double, even triple burden," he said.
Surprisingly, more Filipino men complain of being overworked, finding it more difficult to get a paid leave or take a holiday to be with family, and being unable to go to work late or leave early without losing pay. Interestingly, the data showed that Filipino men find it easier to manage the work-family balance.
GOTCHA By Jarius Bondoc
Friday, June 8, 2007
Full article at The Philippine Star
SUBIC FREEPORT — Tourists see only the beaches, duty-free shops and jungle theme parks. But behind all the fun sites of this economic zone straddling Bataan and Zambales is a construction boom of condominium-hotels.
Three big projects are rising all at once. Work began Nov. for a 150-room resort hotel at the 2.5-hectare MG Dream Village inside Subic Bay Industrial Park. Last weekend saw groundbreaking for the first of five 17-storey condos of Ampelos Tower on a 1.4-hectare lot at Subic Commercial and Light Industrial Park. Shipbuilder Hanjin Corp. is erecting its own condotel on a 3-hectare corner of the Ilanin Forest East.
All the construction is new money from Korea, and aim for Korean customers. The P500-million Dream Village, with health spas, golf driving range, swimming pools and resto-bars, recognizes Subic as the most visited spot of Korean tourists, says MG chairman Chang Young Ryu. Hong Shik Kim of KT Global that is behind the P150-million Ampelos Tower hopes to cash in on the high-end market. Hanjin’s P37-million condotel is for full shipyard operations by 2010, when the firm would be utilizing hundreds of Koreans among 30,000 staff and consultants. Subic Authority administrator Armand Arreza foresees more Koreans than ever touring the former US naval base that now hosts Korean restaurants, several smaller hotels, and a church.
Authority chairman Feliciano Salonga, concentrating meanwhile on the industrial side, says Hanjin’s shipyard is attracting more investments. Hanjin has booked $3 billion in orders since it plunked in $1 billion for a shipbuilding factory 14 months ago and dry-ran its facilities in March. The firm has opened a P240-million training school and is applying to expand its facility for another $1 billion.
Subic’s only downside, though, is that it continues to be a smuggling zone for politicians.
Delay in resolving Meralco petition blamed
By Euan Paulo C. Añonuevo, Reporter
Original report at The Manila Times
THE foreign business community in the Philippines has voiced concern over the slow pace of power-sector reforms, citing in particular lack of action on Manila Electric Co.’s (Meralco) rate-hike petitions.
In a letter to Energy Secretary Raphael Lotilla, the Joint Foreign Chambers of the Philippines expressed “ “profound concern [over Meralco’s] current financial situation and the pace of government action in resolving it.”
The group scored the Energy Regulatory Commission’s (ERC) delay in resolving Meralco’s rate adjustment petitions, all aimed at allowing the country’s largest electricity distributor to recover its purchased power charges.
Even though the Department of Energy has amended the implementing rules and regulations of the Electric Power Industry Reform Act (Epira) of 2001, the ERC and the Joint Congressional Power Commission, which monitors the implementation of the Epira, have yet to act on the matter.
Because of delays resulting from an earlier Supreme Court ruling preventing Meralco from automatically passing on increases in the cost of purchased power and fuel to consumers without public consultations, Meralco has been deferring payments to power suppliers for at least two months.
Meralco’s under recoveries of purchased power charges already reached more than P11 billion. The collection delay has prompted the company to negotiate for partial payment schemes with its suppliers, which include state-owned National Power Corp. (Napocor), independent power producers (IPP)s and the Philippine Electric Market Corp. (PEMC), operator of the wholesale electricity spot market (WESM).
The foreign business chamber, some of whose members are power suppliers, warned that “should Meralco collapse under the weight of the large cash deficits created by its generation cost under recoveries, [the distributor’s] private suppliers and private customers would see their investments impaired, their financing diminished or revoked and quite likely their employees furloughed.”
Moreover, if Meralco’s suppliers cease to allow deferrals and cease delivering power to their nonpaying customer, the company would be unable to service its customers.
The grid’s loss of capacity during a potential litigation would mean lack of supply during peak demand, and significant cost increases due to the resulting procurement of power from more expensive sources.
“The resulting blackouts and brownouts would damage manufacturing equipment, idle workers and generally have a disastrous impact on our members’ production, their investments and the Philippine economy, possibly for years.” the group said.
By Rommer M. Balaba
Original report at the Business Mirror
CONSUMER confidence remained steady in the first half of the year, with Filipinos having fewer reasons to worry about politics and economics, at the same time finding incentive to save, spend on gadgets, and even pay off debts, according to a survey by AC Nielsen (Philippines) Inc.
The market research outfit released the results of its regular survey Thursday when it called attention to the Philippines’ confidence index that now stands at 103 points, 3 points higher than last year although a percentage point lower than the previous semester’s 104 points.
Margin of error was pegged at plus or minus 4.4 percent in its 500-people survey population for the country. “Filipinos are increasingly becoming optimistic given the still minority yet steadily improving number of those who are very enthusiastic [about the Philippine situation],” said Benedicto L. Cid Jr., managing director.
Cid added the survey results confirm the positive news lately, especially the 6.9-percent gross domestic product growth in the first quarter, and the company believes its benefits were trickling down accounting for the positive views of the people.
The global average consumer confidence was estimated at 97 index points, with North America posting the highest among five regions at 107 points and Europe the lowest at 90 points.
Asia-Pacific was at 96 percent, Latin America at 95 points, and Eastern Europe, the Middle East and Africa at 92 percent.
For the Philippine setting, Cid noted Filipinos have progressively become optimistic on job prospects and the state of their personal finances that some are now more willing to part with their money.
“Unlike the previous survey rounds where there were political concerns like the impeachment attempt against President Arroyo. . .with that gone now, Filipinos are more confident,” he added.
So confident are Filipinos they were ranked fifth among 47 surveyed nationalities in terms of their propensity to save their excess cash, with 63 percent of the respondents indicating such intent. Unstable conditions usually impel people to spend more just in case inflation eat up most of their savings.
About a third of Filipinos were now also inclined to buy new gadgets such as MP3 players, DVDs or cellular phones, new clothes or even pay off loans including credit-card accounts, he said.
Cid also talked of the surge of intentions to go on vacations or holidays, with about a third of those surveyed saying they have been thinking of such time off. “It shows local tourism can still be buoyant.”
Thursday, 7 June 2007
By Maila Ager
Last updated 07:19pm (Mla time) 06/07/2007
MANILA, Philippines -- (UPDATE) With her senatorial slate receiving a sound drubbing at the polls, President Gloria Macapagal-Arroyo on Thursday called for everyone, winners and losers, to be “magnanimous” after a “contentious” electoral battle.
“We congratulate all the winners in the election and all those who are still to be proclaimed. We thank all the candidates of whatever party or political persuasion who fought hard and well to win the votes,” Arroyo said in her speech at kickoff ceremonies for the centennial celebration of the first Philippine Congress at the House of Representatives in Quezon City.
“The campaign has had its contentious moments. But it’s time to be magnanimous win or lose,” she said.
She said this is the time to close all chapters of strife and recrimination and electoral battles to pave the way for the chapter of national consolidation and solidarity.
“We call upon the nation to close the contest of the ballot and step up the contest of all fields, all for one and one for all,” she said.
It was the first time the President spoke about the results of the May 14 elections after a weeklong trip to Europe and China.
Of the 10 senators proclaimed by the Commission on Elections Wednesday, only two belonged to Team Unity.
The 11th and 12th slots, yet to be proclaimed, are occupied by opposition candidates Antonio Trillanes IV and Aquilino Pimentel III.
Despite this, the President remained confident of the continuing support of Congress, noting the overwhelming numbers of her allies in the House of Representatives and in the local governments
“The overwhelming victory of our coalition in the House of Representatives and in the local governments is a continuing mandate of reform, unity, more work and less politics,” she said.
“We all have a mandate to look forward and leave behind the contentious past,” she added.
The President took the opportunity to commend the 13th Congress for passing tough reforms like the expanded value-added tax measure and taking “painful but necessary steps” to achieve its goal.
For the first time, she said, the country’s budget is now under control.
Arroyo also welcomed the 14th Congress and called on its members to write a new chapter in the history of the legislature by writing away gridlock, terror, and destitution.
She said she is confident the next Congress will use its power to “take up significant steps forward everyday in the next three years, embracing a future of peace, solidarity, stability and prosperity.”
“This 14th Congress looks like it will be the most powerful Philippine legislature in terms of number, talent and with God's grace, unity,” Arroyo said.
Bangko Sentral ng Pilipinas
The country’s gross international reserves (GIR) rose further to US$25.8 billion as of end-May 2007, or US$700 million higher than the end-April 2007 level of US$25.1 billion. The increase in reserves was due mainly to inflows from the BSP’s foreign exchange operations, receipts from investment income abroad, as well as proceeds of the BSP’s share from the release of collateral on the Brady Bonds which were prepaid by the National Government in April 2007. (It may be recalled that the Philippine Brady Bonds were collateralized loans. Thus, prepayment of the bonds freed up these collateral. Of the US$103 million amount of freed collateral, including interest earned, US$85 million was credited to the BSP and the balance to the NG.) These inflows were partly offset, however, by the debt service payments of the BSP and the NG on their foreign obligations.
In terms of reserve adequacy, the current GIR level can cover about 4.8 months of imports of goods and payments of services and income. This level is also equivalent to 5.1 times the country’s short-term external debt based on original maturity and 2.7 times based on residual maturity. (Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.)
Net international reserves (NIR), including revaluation of reserve assets and reserve-related liabilities, likewise rose to US$25.7 billion from the end-April 2007 level of US$25.1 billion. NIR refers to the difference between the BSP’s GIR and total short-term liabilities.
Bernardo V. Lopez
Full article at BusinessWorld Print Edition
There are a lot of similarities between Piatco’s NAIA 3 deal and ZTE’s broadband supply deal. First, they are both huge contracts involving potential huge “commissions” to government officials. Second, the price keeps growing, to allow for "commissions", or declining, to fend off rival bids. Third, both deals involve a "Swiss challenge" as a tool to intercept unsolicited bids. Fourth, like the original PIATCO contract which the Senate declared null and void, the ZTE blatantly overpriced.
The only difference between Piatco and ZTE is that, for ZTE, the original deal was signed without any bidding process, which makes it illegal, and which precisely is why it is overpriced.
Second ‘virtous cycle’ of reforms needed, says World Bank exec
BY FELIPE F. SALVOSA II, Sub-Editor
Full report at the BusinessWorld Online
One risk that can put off development is a sometimes cultural tendency to be complacent in the middle of reforms, and there are signs pointing to backsliding amid the temporary gratification of a rising peso and a booming stock market, the outgoing World Bank representative to Manila yesterday said.
Joachim von Amsberg, World Bank country director, told BusinessWorld he was a little bit more worried now than before of this risk materializing, judging from the weak tax collection performance in the first quarter.
"Focus on the fiscal reforms for the past two or three years has generated very large benefits for the country. Keeping that focus is actually quite critical, especially because some of the recent revenue collection numbers have not been very good," he said.
Mr. von Amsberg, who took over as country director in mid-2004, is leaving Manila for a new posting in Jakarta next month after witnessing fiscal reforms supposed to help bring the Philippines out of poverty.
"There is a very high tendency to divert good intentions to all kinds of different directions," he said.
"There has not been probably a time when policy reforms would lead to such quick benefits. Because there is so much liquidity and so much eagerness to invest in countries and markets that present the right conditions, and since the Philippines has so many good ingredients for a very dynamic economy, it takes relatively few steps to actually become an attractive investment destination," Mr. von Amsberg said.
He warned that it was very easy to lose credibility again and for the Philippines to "fall back into a scenario of vulnerability."
A case in point is Malacañang’s recent decision to allow a controversial tax amnesty bill to lapse into law, which would allow tax evaders to escape punishment.
"That’s where I think all forces in the country again would have to come together and reinforce the importance of staying on track in tax administration reform," Mr. von Amsberg said.
A "real way" to overcome the risks, the World Bank representative said, is to set up a second "virtuous cycle" of reforms - reforms that would lessen government regulation and improve governance that should attract foreign direct investments.
The first cycle, involving fiscal reforms and tax administration, ensuring that money is spent on public expenditures, and reducing corruption, has led to the positive reaction from financial markets. But portfolio investments or hot money can easily flow out of the country at the slightest hint of instability, he noted.
The peso’s rise, he pointed out, was due more to the dollar weakening than the peso becoming a stronger currency. In fact, in terms of the euro, there is no such thing going on, he said.
Longer-term reforms, he said, would quickly lead to a rapid flow of "real" or direct investments that are harder to uproot. "Investments generate jobs, and the growth will be more sustainable. The boom will feed in itself," Mr. von Amsberg said.
So far, the expected flow of foreign direct investments is missing or is just beginning, he said.
The multilateral lender feels strongly about reducing regulation and making it easier to do business in the Philippines, where it takes 11 steps and 48 days to set up a new business, and 23 steps or 127 days to secure licenses to make a warehouse up and running.
Another crucial step is to free up heavily protected industries to competition, particularly airlines, the maritime sector, and cement.
"The flag on the tail of the aircraft has become less important," Mr. von Amsberg argued.
He said a clear example is the successful dismantling of the quasi-monopoly enjoyed by the Philippine Long Distance Telephone Co. for decades, which has led to lower rates, more phone firms to choose from, and better telecommunications services.
Freeing up the airline industry should mean more tourist revenues and more people able to fly because of cheap tickets, Mr. von Amsberg said.
The government must also take politics out of lending programs, he said. The World Bank was very public on its opposition to a Palace order last year that sought a revival of notoriously inefficient state microfinance programs, which threatened to crowd out private lending. The order was later amended and watered down.
"It’s pretty straightforward. Banking should be left to bankers and the government should stick to policies," Mr. von Amsberg said.
The World Bank, he said, has become a credible voice because it makes sure its policy recommendations are correct and pursue the "common good."
"If you look at the numbers, the Philippines does not need the World Bank. That means if we try to push policies without convincing Filipinos that they are the right policies, we won’t go anywhere," he said.
"It’s really very clear. We are lending right now between $200 million to $400 million a year to the Philippines, a tiny fraction of the national budget and investments. The Philippines has access to the bond market and can borrow money ... So we have no leverage in that way."
"But Philippine leaders have and hopefully will continue to use the World Bank that they co-own for advice and for cheap financing. That means that our arguments need to be convincing to the government, civil society, and academics — forces that build public policy," Mr. von Amsberg said.
By Jonathan L. Mayuga
Full report at the Business Mirror
THE Montalban Methane Power Corp. (MMPC) formally launched Wednesday what may be considered as the first and biggest waste-to-energy project in Asia that would put to good use Metro Manila’s garbage dumped in Rodriguez, Rizal.
Dubbed as the “Rodriguez Landfill Methane Recovery and Electricity Generation Project,” the enterprise expects to generate 15 megawatts of electricity over a period of 10 years starting in January 2008.
Mining mogul Salvador B. Zamora II, who owns MMPC, is investing P1.5 billion in the project.
Under the build-own-and-operate scheme, MMPC is aims to capture landfill gas (LFG), or more commonly known as methane, from the 14-hectare landfill to produce electricity, enough to provide 15,000 households with power.
Methane is a flammable gas derived from decaying wastes. Local scientists have been doing research on how to put to good use methane because of the garbage crisis that was heavily felt in Metro Manila in 2001, with the closure of the Payatas dump in Quezon City.
The project, experts said, will boost the country’s campaign against the adverse effect of global warming, noting that methane, one of the greenhouse gasses that are being emitted by the garbage at the Rodriguez Landfill will be put to good use. Methane is 21 times more potent as an environment pollutant than carbon dioxide.
“The Philippines is expected to make waves in the battle against global warming once the project starts to convert the sanitary landfill into a methane gas exploration project for energy generation,” says Annabelle Abaya, a representative from the Office of the President who attended the project’s formal launch in Makati City on Wednesday.
Under the Kyoto Protocol, certified emission reductions, or CERs, are issued in return for a reduction of atmospheric carbon emissions where one CER is equivalent to an emission reduction of one ton of carbon dioxide.
By ALEX MAGNO
Original article at the Philippine Star
The Philistines succeeded in taking down Ralph Recto.
They did so by turning their backs on the requirements of economic statesmanship — and the need to properly educate the people on the hard facts of proper fiscal management. Instead, they pandered to the miseducated, exploited their ignorance and tried to make political hay by senselessly agitating against a modern form of taxation.
Principal among these was losing opposition candidate John Osmeña. He tried to build support for his candidacy by ranting against the VAT, peddling the misinformation that it was anti-poor and glossing over the glaring benefits this revenue measure had brought about. He was pandering to populism, worshipping at the altar of fiscal irresponsibility.
This losing candidate suggested that the VAT would be repealed if he were elected senator. That itself is a misrepresentation. All legislation on revenue measures emanates from the House, not the Senate. And the House is not likely to ride the bandwagon of fiscal irresponsibility, not with the overwhelming (and expected) majority of the pro-administration coalition in that chamber.
Fortunately, John Osmeña is not more politically important than the electoral outcome indicates. Otherwise, his opportunistic ranting against a perfectly sane revenue measure might have caused the nation a credibility crash. Our credit rating might have been downgraded. Investors might have held back. And the economic blossoming we now see might not have happened.
Remember that the economic renaissance we are now experiencing began exactly the day after the expanded VAT was enforced. This was on the expiration of the Supreme Court restraining order resorted to by misguided and grandstanding politicians who sought judicial intervention on a matter of fiscal policy after they had lost on the legislative floor.
After the expanded VAT came into effect, the budget gap began to close. Our need to borrow quickly declined. The peso gained strength. Inflation was tamed. Investments began to stream into our economy. Our debt service load became lighter.
In a word, after taking the bitter pill the good times began to roll.
Taking the bitter pill required a lot of political courage. At the House, Speaker de Venecia cracked the whip to get the measure through. At the Senate, Ralph Recto argued the case for VAT before his reluctant colleagues. And when the time came to implement it, President Arroyo did so — during the ebb in her presidency, when some of her allies defected and an impeachment case was being initiated against her.
The expanded VAT did not make the President popular. But it made our economy strong. That is what economic statesmanship is all about.
If our economy has been weak and erratic for years, it was for want of economic statesmanship among those who previously led the nation. No one, previously, wanted to court unpopularity as the cost for doing what was right.
And so in previous governments, we borrowed rather than taxed — until the debt load crashed on us and brought our economy to failure.
Now, with the new revenue measures, we have turned a new leaf. We will finance our way to development and no longer rely on debt. That is what national self-reliance means in this new world.
Doing that requires heroic political leadership. Ralph Recto delivered that sort of leadership.
I worked with him when he took up the cudgels at the House for the bill liberalizing the retail trade after his other colleagues chickened out due to strong pressure from vested interests. Retail trade was liberalized and a revolution in consumption and distribution patterns followed in its wake. Irony of ironies, those who funded the campaign against liberalization benefited the most from its happy consequences.
In his Senate valedictory, on the day he conceded defeat in his bid for re-election, Ralph said he would rather be correct than popular. I felt sad twice over when he said that.
First, because what is correct should not be unpopular. The first task of modern political leadership is to educate the citizens well about what is good for the commons.
Second, if advocating for a correct revenue measure means shutting out the rest of one’s political career, then who else will stand up for fiscal discipline — the keystone to our nation’s sustainable progress. Who will hold up the candle of economic literacy in the chaos of our politics and the small-mindedness of our populist media?
That populist media — especially those semi-literate babblers on AM radio who militantly refuse to keep abreast with modern knowledge — is the other Philistine that took Ralph down. Everyday during the campaign period, these babblers ceaselessly lambasted VAT and lambasted Ralph for sponsoring this measure at the Senate. Good grief, even the bishops had railed against VAT for being “immoral” — against the mountain of evidence demonstrating that this measure has been the springboard for our economic salvation.
To his credit, Ralph did not evade the issue of VAT during the campaign. Instead, he used his political advertising to educate the public about the benefits of this modern revenue measure. Rather than resorting to a song-and-dance routine to keep the ignorant entertained, he used his candidacy to be a teacher to the people.
Thank you, Ralph for all the work you have done in helping modernize our economic policy architecture. Millions will benefit from that.
We must now live with a Senate that, without you, will be vastly less economically literate.
By JESS DIAZ
Original report at The Philippine Star
With the country having achieved nearly seven-percent economic expansion during the first quarter of this year, a higher growth rate of eight percent to nine percent is attainable, former Albay Rep. Joey Salceda said Wednesday. In a statement, Salceda said the 6.9-percent first-quarter growth in gross domestic product (GDP) "decisively vindicates the feasibility of Plan 7-8-9, which was audaciously propounded" by him last Feb. 6, a few days after President Arroyo appointed him as her chief of staff.
"Underlying trends show there is sufficient momentum for growth acceleration, swinging around the seven-percent GDP growth for the rest of the year. The key remains with BIR (Bureau of Internal Revenue) and BOC (Bureau of Customs) performance and vigorous privatization, which is the growth driver this year," he said.
He added that foreign investments should accelerate growth to eight percent next year, while domestic investments should further expand such growth to nine percent in 2009.
Salceda is former chairman of the House economic affairs and appropriations committees. He is now Albay governor. He remains an occasional adviser on the economy of President Arroyo, who was his Ateneo economics teacher. His Plan 7-8-9 was derived from Speaker Jose de Venecia’s 747 economic program, which calls for seven percent growth for seven consecutive years.
The President adopted De Venecia’s 747 blueprint two years ago, but it was only last quarter that the nation attained growth close to the program’s target. The first quarter expansion is the highest in nearly two decades.
Salceda said his Plan 7-8-9 aims to achieve "a three-year surge in GDP growth" to reduce poverty.
"High growth targets are the only means to substantially reduce poverty from 27 percent (of the more than 80 million Filipinos) to 17 percent by 2010 (when Mrs. Arroyo’s term ends)," he said.
He added that foreign investors now laud his economic plan "for being desirably ambitious."
To sustain the first quarter growth and accelerate it to seven percent, he proposed open market access for power users consuming one megawatt a month, further foreign exchange liberalization, renewal of the franchise of the Philippine Gaming and Amusement Corp. (PAGCOR), and the opening of the controversial Terminal 3 at the Ninoy Aquino International Airport.
PAGCOR needs its franchise renewal so it can attract foreign investors for its $20-billion gambling and entertainment center project at the reclaimed area along Roxas Boulevard in Pasay City and Parañaque.
The Senate and the House have already approved a bill renewing the PAGCOR franchise, but House approval of the measure was questioned, prompting the chamber to delay its transmittal to Mrs. Arroyo for her signature.
Salceda also proposed that the government reduce its budget deficit this year to P63 billion by selling its remaining shares in telecommunications giant Philippine Long Distance Telephone Co. (PLDT). Malacañang recently sold a bloc of PLDT shares worth more than P25 billion.
For 2008, Salceda suggested that Malacanang sell the National Transmission Corp., which owns power transmission facilities throughout the country and which is valued at $3 billion.
The Palace should also sell big-ticket power plants and remaining shares in San Miguel Corp. and Manila Electric Co. (MERALCO), he said. At the same time, it should give workers a badly needed tax relief, he said.
He sees investments from Filipino businessmen accelerating growth to nine percent in 2009.
Wednesday, 6 June 2007
Visits to Vatican, Fatima: A rare opportunity to renew moral and spiritual faith-based governance --- PGMA
TUESDAY, JUNE 5, 2007 | RELIGION
Original report at Gov.Ph News
LISBON, Portugal (via PLDT)--- Stressing that the series of events that led to her visits to the Vatican City and the Shrine of Our Lady of Fatima were Divine Providence’s intercession, President Gloria Macapagal-Arroyo said today the experiences she had the last four days renewed her moral and spiritual faith-based governance.
In an informal conversation over breakfast today at the Four Seasons Hotel Ritz here, the President said her audience with Pope Benedict XVI last Monday, her attendance at Sunday’s canonization of St. Marie Eugenie and now the pilgrimage to the Shrine of Fatima in Portugal were unplanned but constituted a series of events that led to the realization of these trips.
"The events gave me a rare opportunity for prayer, thanksgiving, reflection, and renewal of spiritual and moral strength and political will for faith-based governance," the President enthused.
She said her trip to the Vatican City was upon the invitation of the Alumnae Association of the Assumption College, since the Assumption Sisters played a very crucial role in the eventual canonization of St. Marie Eugenie, the foundress of the Religious of Assumption.
The President is an alumna of the Makati-based Assumption College, having attended her elementary and high school years there.
On the other hand, the President said her audience with the Holy Father was upon the invitation of the Vatican.
"I am very lucky I got to see the Pope (twice) in the two years that he is the Pope," the President said.
She attributed this to the Philippines being a very devout Catholic country and that the Holy Father is "very happy about our public policy that can be a model…that to follow the precepts of the Church yet the economy still does well."
Describing her meeting with the Holy Father as "very fulfilling" and fruitful, she said the Pope once again gave his blessings and support for her.
"He was very supportive…he commented that the economy was doing well. I informed him that our growth rate is very good and our reduction of poverty rate by one percent every year is well on the way to meeting the United Nations Millennium Development Goals by 2015," the President said.
Other issues discussed during her one-on-one meeting with the Pope included the peace process in Mindanao in which she informed the Pontiff of the "soft and hard power" efforts of the government to finally achieve lasting peace in Southern Philippines.
As to the Fatima pilgrimage, the President said a "prayer friend" advised her to visit the Shrine of the Mother of Rosary to thank the Virgin Mary for the "miraculous healing of my husband and this opportunity came about." She enthused that her trip to Portugal would also be a very appropriate time to meet with the incoming president of the powerful economic bloc, the European Union.
Portugal will assume the EU presidency this July and President Arroyo, being the present chair of the Association of Southeast Asian Nations would push for the realization of the EU-Asean Free Trade Agreement.
Tuesday, 5 June 2007
By ALEX MAGNO
Original report at the Philippine Star and ABS-CBN News
The rebellion, it seems, was over as soon as it began.
Luis Villafuerte tried to field an apparently nonchalant Pablo Garcia to contest the post of Speaker of the House of Representatives. The attempt failed to snowball as this faction might have expected. The vast majority of the elected congressmen of Kampi rushed to pledge their support for an unprecedented 5th term for Jose de Venecia.
Villafuerte and Garcia presented their challenge in the name of Kampi, the second largest representation at the House. But they could not muster more than a handful from within that party.
Kampi chairman Ronaldo Puno, through his brother congressman-elect Robbie Puno of Antipolo, called in the troops. They all showed up at de Venecia’s home late last week and signed a manifesto outlining a legislative program of reform — and, pledging “militant” support for de Venecia as speaker.
By Friday, last week, more than a majority of all the congressmen assembled at the de Venecia residence and joined the Speaker for a luncheon with the President at Malacañang Palace. The mutiny is quashed. The battle for Speaker of the House is over.
There will still be, of course, an election. The opposition at the House, led by Rep. Ronaldo Zamora, is trying their best to scrape together 15 votes for their own nominee for Speaker. That is a mere formality. Should they muster 15 votes, Zamora will become the Minority Floor Leader.
Villafuerte and Garcia are not the only casualties in this decisive turn of events. The other casualty is the opposition project of mounting a third impeachment attempt at the House.
Twice before, de Venecia mustered the numbers and successfully defended President Arroyo from the effort to dislodge her from power. That effort, we now know, is part of a conspiracy to force a transfer of power. It is an unseemly conspiracy driven by oligarchic money, marginalized political blocs and desperate radical groups.
By trivializing the impeachment process, making it a handy tool for partisan goals, this conspiracy could have brought the nation into another episode of intense political tumult. Such an outcome would have aborted the dynamic economic growth we now enjoy.
That conspiracy is still alive. According to the grapevine, the new scenario was to generate enough political energy from fanning the perception that the last elections was stolen.
But the opposition won the major share of Senate seats. They did not lose much in the local elections because they had fielded few candidates to begin with. That outcome, and the general public satisfaction with the conduct of our notoriously imperfect elections, takes the wind out of the devious scenario being nursed by the troublemakers.
We do not know yet who will sit as Senate President. That will be the outcome of discreet negotiations among the barons who sit in the chamber rather than among political parties dealing more openly in the public eye.
We do know that Jose de Venecia will sit as Speaker for an unprecedented 5th term when the new Congress opens on the third week of July. Because of that, we are certain that the House, at least, will continue as the source of innovative and forward-looking legislation.
De Venecia, we know, is much more than a master coalition-builder. He is also a committed visionary and extremely creative lawmaker.
From the law that enabled our banks to process remittances from our overseas workers, to the design of a legislative-executive development advisory council, to the build-operate-transfer law, de Venecia has opened many opportunities for our national economy to prosper.
He is a man of tireless imagination. Sometimes, many of his ideas are too far ahead of conventional thinking that people suspect him of exaggerating. Take his proposals for a debt-for-nature swap and his advocacy for a global inter-faith dialogue. Both have been adopted as advocacies of the United Nations.
His advocacies brought de Venecia to the diplomatic field. The past few years, he has relentlessly pushed the Asian Parliamentary Assembly (APA) closer to the idea of an Asian Parliament. A resolution to that effect was won last November in Tehran.
De Venecia has, the past few years, pushed his idea of a common Asian fund to ensure currency instability and prevent a repeat of the 1997 Asian financial crisis. That idea is now being actively entertained in many Asian capitals.
More cutting-edge legislation is promised by the “Declaration of Unity for Reform” — the document endorsed by 160 (possibly more) congressmen rallying behind de Venecia’s leadership.
Much of that declaration focuses on improving our economic policies to keep the growth momentum we have now achieved. It commits to speed up market-opening measures to catch Asia’s new wave of growth, put constitutional, political, electoral and institutional reforms in place as soon as possible, and raise our country’s competitiveness by further lowering the costs of doing business here.
The policy orientation indicated by the declaration assures us a continuation of the trajectory of reforms undertaken by the present leadership. De Venecia’s record as far as getting things done at the House makes the core principles of that document all the more reassuring.
At least, as far as the House is concerned, we have an indication of the drift of policy thinking. The question now is whether the Senate — a chamber likely to be embroiled in the competing political ambitions of several of its members — will be a functional instrument in consolidating the nation’s economic gains.
By Roderick T. dela Cruz
Original report at the Manila Standard Today
BORACAY Island, Aklan—A Korean real estate company will start the construction next month of an international airport at Carabao Island, which is being eyed as the “Next Boracay.”
Carabao Island, part of San Jose town south of Romblon, is a 15-minute boat ride from the smaller island of Boracay, and has the same white-sand beaches and pristine waters, according to Tourism Secretary Joseph Durano.
Durano said Carabao Island is about four times the size of the 10-sq. km. Boracay, which accommodated more than half a million visitors last year. It is closest to the Puka Beach, the northern part of Boracay.
“We expect the groundbreaking of the airport at Carabao Island by the end of the month,” said Durano, who, together with Undersecretary Eduardo Jarque Jr., visited the new large hotel developments in Boracay.
Durano said the San Jose airport, which will have a 4,000-meter runway, is part of the tourism masterplan being developed by Euro Asia & Group Holding, a Korean company headed by Byoung-Youn Park.
Korean tourists, representing two-thirds of total foreign guests in Boracay, numbered 124,618 in 2006. In the first four months of 2007, foreign visitors were up 40 percent.
Portions of Carabao Island, Durano said, had already been leased out to the Korean company, which committed to put up the necessary infrastructures before establishing commercial establishments.
“Everything is being planned in Carabao Island,” he said. “It will have the same model as Mactan in Cebu.”
The tourism chief said the development of Carabao Island will relieve Boracay of too much pressure from tourists, in the wake of constant power outages caused by peak demand from more than 250 resorts and hotels on the island. Most resorts here have their power generation sets ready in case of brownouts.
Ma. Victoria Jasmin, director of the Office of Tourism Standards, which is in charge of endorsing tourism projects for fiscal incentives, said the Korean company was applying for the declaration of the entire Carabao Island as a tourism economic zone.
The problem, she said, is that the island already has a thriving local population who own pieces of land in five barangays. San Jose town, which encompasses the whole Carabao Island, has about 10,000 residents.
“Their masterplan involves integrated resort development which will include construction of hotels, resorts and retirement villages,” Jasmin said.
She said the original plan aimed to build an international airport in San Jose capable of handling large Airbus or Boeing planes that will bring passengers to Boracay. But under the Korean masterplan, Carabao Island will now be the major attraction, with Boracay as the day-two destination.
Caticlan airport, which is about a 10-minute boat ride from Boracay, can handle only small turboprop planes, while it takes another two hours to reach Kalibo airport by land.
Asked how much the Korean group would invest, Jasmin said there were no official figures yet, but the amount is expected to be big, considering the extent of development it plans.
OUTSIDE THE BOX
Original from the Business Mirror
The first quarter economic growth is the highest in 17 years. Why is anyone, especially the “experts,” surprised at the nation’s performance?
I have been telling you for the past nine months that the Philippines was doing great. Oops, there I go again trying to take credit, like some others I know, for something I had nothing to do with.
Actually, it is the Philippine Stock Exchange (PSE) that has been telling you and I and the world that the Philippines has entered a booming economic period.
Have all the experts forgotten one of the important things that a stock exchange does? The stock market is an important component of the “leading economic indicators.” That means, what happens in the stock exchange becomes clearly evident in economic numbers several months down the road.
The fact that economic growth roared in the first quarter should have been expected.
Over the last year, interest rates have decreased to the lowest level in modern Philippine economic history. When interest rates go down, money is freed for other wealth-creating purposes like spending and expansion.
Furthermore, the money supply has grown significantly over the last year. An increase in money supply, the amount of cash in the system, translates into inflation and higher prices or investment of all types. And everybody, including the “experts,” know that inflation is virtually at a standstill despite very high fuel and energy costs.
Granted that all of these factors bear on one another, it is unlikely that the stock market would rise in times of high interest rates and high inflation. However, the 50-percent increase in the stock prices since July 2006 is the best indication of the favorable climate that the Philippines has worked in for a year.
Analysts said that the 150-point increase in the PSE Index on Thursday and Friday was in reaction to the “surprise” of the gross domestic product (GDP) numbers.
Wrong. The 1,500-point increase was in anticipation of the first quarter GDP. Thursday and Friday market action was primarily from people who missed the 20-percent increase of stock prices in 2007 who suddenly jumped on board the train that left the station in July 2006.
The most amazing quote I read about the market/economy was this: “The market’s upbeat on higher-than-expected GDP growth that may translate to robust corporate earnings growth in the next few quarters.”
I will not embarrass the person who said this by naming him or her. Why is this comment so inaccurate? Simple common business/economic sense.
Look. Ask yourself this question: what is it that makes up the numbers that create a 6.9-percent year-on-year increase in growth? Answer: positive and profitable economic activity. Meaning, the GDP is high due to substantial growth in corporate revenues and earnings in the first quarter. Where has this person been hiding? Didn’t he/she see double-digit corporate profits for each of the last two quarters?
The “robust corporate-earnings growth” created the robust economic growth.
Of course, there is another viewpoint. From the Inquirer: “While the markets welcomed the higher-than-expected GDP growth, the research group Ibon Foundation Inc. pooh-poohed the growth as superficial and largely due to the ‘scandalous campaign spending’ by politicians in the May elections. Ibon research head Sonny Africa estimated the total campaign spending to be at least P31 billion and as much as P50 billion.”
The total Philippines GDP in dollar terms is approximately $120 billion. That means during every quarter, the economy generates about $30 billion. Therefore, if the highest estimate of campaign spending of $1 billion is correct, campaign spending contributed less than 3 percent of the total GDP.
However, the most important argument against the effect of campaign spending is found in consumer-spending growth. The growth of personal spending grew in the first quarter of 2007 at nearly the same rate as in previous quarters.
The enlightening statistics that validate the GDP numbers are these. In the first quarter, construction investment grew by 7.3 percent; merchandise exports, 10.3 percent; mining and quarrying, 11 percent; and agriculture, fishery and forestry, 4.2 percent. All these sectors were up significantly from the last. And the PSE has been telling us for months that this was going to happen.
Are these economic numbers for real? Just keep checking stock prices as a very good indicator of what the economic future holds in store for the Philippines.
Full report at BusinessWorld Online
The Philippine real estate industry continued to post significant growth last year, posting a rise of 17.1% in gross value added (GVA), the fastest annual growth achieved since 1967, the National Statistical Coordination Board said in a statement yesterday.
Original report at ABS-CBN News
Philippine consumer prices rose 2.4 percent in May from a year earlier, in the middle of the central bank's projection of 2.1 to 2.8 percent, mainly due to higher oil prices.
Consumer prices climbed 2.3 percent in April from a year earlier.
Core inflation in May, which strips out some volatile food and energy items, reached an annual 2.6 percent, the same as in in April, the statistics office said.
The base year for the data is 2000. - Reuters
Monday, 4 June 2007
SUNDAY, JUNE 3, 2007 | GOVERNMENT MANAGEMENT
Original report at Gov.Ph News
After launching wide-ranging fiscal and economic reforms, Malacañang’s next target of restructuring is the electric power sector.
In her meeting with officials of Australian mining companies in Canberra during her visit Down Under last week, President Gloria Macapagal-Arroyo said she would institute initiatives that would address the concerns of investors about the power sector, especially power costs and supply.
Press Secretary and Presidential Spokesman Ignacio R. Bunye, in his column, View from the Palace, which comes out tomorrow (Monday) in the Manila Bulletin, said the President assured the Australian mining executives that their misgivings about power supply in the Philippines would be given priority attention.
“The President announced that her next area of economic reform is in the electric power sector,” Bunye said.
He said that “the next Congress is expected to introduce reforms to the Electric Power Industry Reform Act (EPIRA).”
“When the EPIRA was passed in 2001, the President recognized that it was not perfect, but it was vital to pass it at that time, rather than wait for a legislative masterpiece that was next to impossible,” Bunye added.
He said the President’s appearance before the Asia Society gave her the opportunity to respond to various questions by Australian business leaders on mining and energy in the Philippines.
“The key players in Australia’s highly developed mining industry are very keen on working on mining projects here, considering our vast mineral resources and highly trained professionals in geology, exploration, mining engineering and metallurgy,” Bunye said.
06/04/2007 | 01:01 PM
Original report at ABS-CBN News
The Philippine Senate will be tackling the New Central Bank Act, amendments to the Electric Power Industry Reform Act, and the Fiscal and Non-fiscal Incentives Bill when it resumes session Monday afternoon, Senate Majority Leader Francis Pangilinan said.
Congress has until June 6, when it shall adjourn sine die, to pass these priority bills.
"The Senate is ready to hit the ground running now that the elections are almost officially over. We are very much looking forward to passing measures that respond to the pressing needs of our people," Pangilinan said.
Pangilinan said the Senate would also work for the passage of the bill making the National Labor Relations Commission, the final arbiter of labor disputes, except in cases of gave abuse of discretion, graft, fraud, a question of law or serious errors in the findings of facts.
The Senate would also push for the passage of bills addressing the use of government ambulances and the creation of new courts. Pangilinan said the Senate will also look into several environmental bills that seek to create protected areas, and other pending local bills.
"After the rigors of the campaign, we would like to channel our attention now to these measures. The members of the 13th Congress remain eager to return to work. We will remain an efficient, relevant, responsive and independent branch of government ready to champion the cause of our citizens," Pangilinan said.
06/04/2007 | 09:31 AM
Original report at GMANews.TV
The Philippine property sector has a bright future ahead of it as it benefits from increasing remittances from overseas workers and higher government spending, international brokerage firm Macquarie Research Equities said.
In a note dated May 29, Macquarie said the property sector still has “a long way to go." In the short term, the firm said the sector may enjoy a 12-18 month up-cycle.
“The Philippine property sector is supported by a very bright macro outlook. (Gross domestic product) growth is set to be the strongest since 1998, thanks to robust overseas remittances, combined with long-awaited government spending coming through with the resolution of fiscal woes. Also, interest rates are on the way down," the firm said.
In the first quarter of 2007, the Philippine economy grew 6.9 percent, its fastest pace in 17 years, boosted by a strong local currency, low inflation, and government pump priming.
Macquarie head economist Bill Belchere projects that the country’s economy will rise 6.5 percent this year. This, the firm said, will primarily be driven by record-high overseas remittances, “which are finally being complemented by the prospect of government spending materializing for the first time since the 1997 crisis."
“Pump priming has been made possible by the government finally resolving its perennial problem of running a large budget deficit. Thanks to the expansion of the tax base, along with increases in rates, government revenue collections have improved dramatically, thus placing the government in a position to balance the budget in the next two years, while leaving room for accelerated expenditures," Macquarie said.
The research firm said that among the property industry’s subsectors, the residential segment has the best long-term growth prospects.
“The reason is that it is a largely under-penetrated sector, using various metrics. This includes mortgages-to-GDP, which, at 2% for the Philippines is still among the lowest of any country in the region. The government also estimates a minimum annual backlog of 500,000 residential units. While this would include families with limited income levels, Philippines, as a country, has a low level of home ownership," Macquarie said.
Growth in this segment will also be driven by OFW money, the firm said, citing a Colliers Philippines report showing that roughly 30 percent of remittances coursed through banks are used for property-related spending.
By Wes Goodman
Original report at Bloomberg
June 4 (Bloomberg) -- The Philippine peso extended a rally to the strongest since September 2000 on optimism the pace of economic growth will attract international investors. Bonds fell.
The currency climbed 1 percent, the biggest fluctuation of any currency today, as the benchmark Philippine stock index advanced to a second straight record. The gains came after the government last week said the expansion in gross domestic product quickened in the first three months of the year, fueled by consumer spending and exports.
``We're seeing more substantial flows into the equity markets because of the GDP number,'' said Jonathan Ravelas, assistant vice president for economic research at Banco de Oro- EPCI Inc. in Manila. ``That helped push up the peso.''
The currency climbed 1 percent to 45.635 against the dollar as of 1:56 p.m. in Manila, according to Tullett Prebon Plc, the world's second-largest inter-dealer broker. It may strengthen to 45.50 per dollar in the next two weeks, Ravelas said.
The peso led gains in Asian currencies today, outperforming the Indonesian rupiah, Japanese yen and Thai baht. The economy expanded 6.9 percent in the first quarter from a year earlier, versus 5.5 percent in the previous three months, the National Statistical Coordination Board said.
The world's biggest movers are based on changes in price yield and are screened for the size of the market and the amount of daily trading.
Consumer prices rose 2.5 percent in May from a year earlier, quickening from 2.3 percent in April, according to the median forecast in a Bloomberg News survey of nine economists before the government reports the figure tomorrow.
Seven-year bonds fell, pushing their yields to the highest in four weeks. Inflation erodes a bond's fixed payments.
The yield rose 7 basis points, or 0.07 percentage point, to 6.66 percent, according to the Philippine Dealing & Exchange Corp. in Manila. The price of the 12 3/8 percent note due in March 2014 fell 0.4434, or about 44 pesos per 10,000 pesos face amount, to 130.8473. Bond yields move inversely to prices.
``We expect bond yields to move higher,'' said May Taco, who helps oversee the equivalent of $5 billion at BPI Asset Management in Manila, the biggest money manager in the Philippines.
Inflation probably stopped slowing, which will lead the central bank to raise interest rates in the third quarter of 2007, she said.
The central bank last week kept the overnight rate at which it borrows from banks at 7.5 percent, which applies to the first 5 billion pesos ($109.5 million). For amounts more than that the central bank pays lower rates of 5.5 percent and 3.5 percent in its tiered system, which was introduced in November.
Taco is cutting the duration of her holdings. Duration measures a portfolio's sensitivity to changes in interest rates, and a lower number indicates a more bearish position.
By Wes Goodman
Original report at Bloomberg
June 4 (Bloomberg) -- The Philippine peso rose, extending a rally to the strongest since September 2000, on optimism the pace of economic growth will attract international investors.
The currency climbed as the benchmark stock index advanced to a second straight record. The gains came after the government last week said economic expansion quickened in the first three month of the year, fueled by consumer spending and exports.
The peso climbed 0.7 percent to 45.765 against the dollar as of 9:53 a.m. in Manila, according to Tullett Prebon Plc, the world's second-largest inter-dealer broker.
The peso led gains in Asian currencies today, outperforming the Indonesian rupiah, Japanese yen and Thai baht. The economy expanded 6.9 percent in the first quarter from a year earlier, versus 5.5 percent in the previous three months.
Sunday, 3 June 2007
By Evelyn Macairan
Original report at The Philippine Star
As reported in ABS-CBN News
Immigration Commissioner Marcelino Libanan reported on Saturday that the agency had collected P543.8 million in immigration fees during the first four months of the year.
Libanan said the collection from January to April is six percent higher than their target and this is the first time the agency collected more than half-a-billion pesos in just four months.
He said the bureau’s collection for the first quarter of the year recorded an increase of P58 million, which is 12 percent higher than the P485.5 million collected during the same period last year.
He attributed the improved immigration fee collection to the continued increase in the number of foreigners, both tourists and businessmen, visiting the country.