Saturday, 1 September 2007

CELEBRATE

By Alex Magno
Original article at the Philippine Star
http://www.philstar.com/index.php?Opinion&p=49&type=2&sec=25&aid=20070831176

The President was visibly peeved the other day when a couple of academic economists raised some doubts about the accuracy of the second quarter growth figures government reported.

The growth figures, as we now know, are remarkably good. The numbers were so good, President Arroyo reported them herself. Our GDP grew an astounding 7.5% - the first time in 20 years we have managed to do so.

What makes this even more remarkable is that it comes on the back of 26 straight quarters of growth. That is unprecedented in our whole history. A regime of fiscal discipline, although it has cost the President some amount of political capital, has made that leap out of the chronic boom-and-bust cycles of the past possible.

But this is not what our bad news-oriented media chose to highlight.

Instead, television news coverage, almost predictably, picked out some obvious down-and-outers from the streets and used them as talking heads to say that they have not felt the growth. Of course it did not. Our economy can grow 100% year-on-year and you will still have people who will be poor or who will still fail in putting their own personal finances in order.

If we habitually choose to look at the national fate from the point of view of the habitual losers, we will entrap ourselves in the purgatory of pessimism.

I have some friends from the political left who have designed their lives so that they constantly make less than what they need. And then, day in and day out, they build a career out of whining, insisting always that the glass is half empty rather than half full.

The academic economists who raise issues with the methodology for computing our growth are people I have worked with for years and whose professional views I deeply respect. I have debated a number of economic issues with them and expect to see them next week for what should be an educational chat.

They do not question the basic trajectory of growth. They are raising some valid statistical questions that should soon be resolved.

Their most basic point is this: How could it be that consumption growth is so high and yet volume of production data indicated a minor decline?

The implication of that question is: If our people are consuming so much and our producers are producing slightly less, where are all those items of consumption coming from? In a market economy, people do not consume abstract things, they consume real products.

Also, if our economy is growing so much, why is government’s tax take growing at a significantly slower pace?

Government statistical people tried to account for the apparent discrepancy by pointing to the large informal sector characterizing our national economy. The informal sector is like a statistical black hole where transactions are not recorded and incomes are kept away from the eyes of tax collectors.

Regardless of how large our informal sector is, what happens there eventually registers albeit indirectly in the formal sector. It’s like when land masses move along fault lines, tremors register on the surface even if we do not see what is happening underneath.

Incomes, and the productive activity that causes them, may be concealed. But consumption cannot. In fact our badly designed tax system encourages concealment of actual incomes.

But even if one gets income from theft, when he eventually spends the money at the mall, his consumption registers in the VAT net. He may get away with his crime but never with his consumption. That is the beauty of shifting the tax system to the consumption side through such measures as the VAT: it spares tax collectors from having to be policemen as well.

What the discrepancy the economists are pointing to does is to identify more than just statistical pitfalls caused by the presence of a large undocumented section of the economy. It tells us that there is possible large-scale under-reporting by our producers. Also that smuggling is happening at such a scale that there is so much in the marketplace for consumers to buy that it registers as a yawning discrepancy in the macroeconomic figures.

The proper course therefore is not to persecute the statisticians but to lean harder on the agencies that are supposed to prevent smuggling and collect revenues more efficiently. At some point, too, we have to engineer the policies that will cause the informal sector to shrink and the formal sector to expand. Shifting to consumption-based taxation will do that because it will reduce the incentive to hide production and profit figures from one’s own government.

And while we do that, let’s not forget to celebrate.

There are a lot of things going for our economy - despite the propensity of some of our politicians and all our militants for creating destructive sideshows.

We have identified mineral deposits amounting to a trillion dollars that we have long neglected exploiting to national advantage because of archaic notions abut mining. Hopefully Lito Atienza, from where he sits at the DENR, will unleash this great driver of our economic growth.

We have managed to tame the debt problem, reducing our obligations not only as a percentage of our growing GDP but also in absolute terms. SWS reports fewer families reporting themselves poor and our employment picture is improving dramatically.

Those who fail to celebrate what we are doing right will continue to miss opportunities as they open up, condemning themselves to a life of permanent whining.

Statement of Cabinet Secretary Ricardo Saludo: Let's check the basis of reports

FRIDAY, AUGUST 31, 2007 | MASS MEDIA
Original article at Gov.Ph News
http://www.gov.ph/news/?i=18733

We call on media and the public to look into the basis of news and criticism.

Sometimes, we would quickly be suspicious just because of speculation and rumor, as may have happened with a TV contest and the allegations of some politicians.

Before we judge, it’s only proper to check the basis of a media report or comment.

If there are suspicions of corruption, a case and evidence can be filed with investigating bodies, as a congressman has done.

If it is a private firm involved, like a TV station, a complaint can be filed with the Department of Trade and Industry (DTI), which can investigate.

The same can be said for our economy. Government statisticians worked hard compiling and analyzing our gross domestic product (GDP) data.

Let us not impugn their painstaking efforts on the basis of text messages and comments expressing doubt but not presenting any data.

As for the question of whether people are benefiting from economic growth, we hope media will also feature some of the hundreds of thousands of Filipinos who got jobs, electricity, homes, health insurance, cheaper medicines and other benefits, not just those who may still not feeling the bounties of our progress.

We thank those in the media who report news with objectivity, balance and solid facts.

Business to educators: Tailor-fit curricula to industries’ demands

By Marie Jeannette P. Cordero
Original article at BusinessWorld Online
http://www.bworldonline.com/BW090107/content.php?id=004

The Philippine Chamber of Commerce and Industry (PCCI) yesterday asked educators to come up with curricula that will address the needs of industries especially in the areas of Mathematics, English, and Science and Technology.

In an education forum, Eduardo Guttierez-Ong, PCCI vice-president for training, education, and science and technology, said there is a need to integrate industry requirements with the academe to ensure more employment opportunities.

"According to [President Gloria Macapagal-Arroyo], the country has been producing quite a number of graduates every year. But we can see that there is no significant employment occurring in the numbers," Mr. Ong told BusinessWorld at the sidelines of the event.

He also noted the need to improve the ability of the teaching profession. "Train yourselves to be proficient in your work because there must be continuous development through seminars and training."

Meanwhile, Science and Technology director Ester B. Ogena said the government will increase the number of scholarship grants under an intensified science and technology curriculum.

She said the department will extend 400 scholarships for the training of science and technology experts, while the Commission on Higher Education will allot 310 scholarships for faculty development through masteral and doctorate programs.

"Strategies for bringing the gap between the curriculum of the academe and the standards of industries should be identified," Ms. Ogena said.

She challenged industries to define their needs so that schools may be able to respond, adding collaboration on research should be done for greater employment prospects.

Queena N. Lee-Chua, a professor at the Ateneo de Manila University, said at the same forum that the science and technology curriculum lacks coordination in research work, funds, manpower and qualified teachers, and a science consciousness among students.

New record for foreign trade

MARIA ELOISA I. CALDERON, Senior Reporter
Full report at BusinessWorld Online
http://www.bworldonline.com/BW090107/content.php?id=001

The country’s balance of payments (BoP) should hit a surplus of $6.3 billion this year — a new record — high, on expectations of sustained dollar inflows from overseas Filipinos and portfolio investments, the Bangko Sentral ng Pilipinas said yesterday.

The figure was a revision of the $2.9-billion surplus for 2007. The central bank changed its projection after the BoP posted a surplus of $4.5 billion in the seven months to July, already way above the initial full-year forecast.

Central bank Governor Amando M. Tetangco, Jr. said a higher current account surplus and a "substantial improvement" in the capital and financial account should prop up the BoP position.

The BoP summarizes foreign trade and financial transactions. Its current account component measures all trade in goods and services, while the capital and financial account shows "hot money," or portfolio investment, flows into and out of the country.

A large BoP surplus is a positive economic indicator pointing to net dollar inflows that usually accompany improved sentiment toward the local investment.

Mr. Tetangco said the current account is expected to post a surplus of $6.4 billion this year, an upward revision of the $6 billion initial forecast.

The healthy current account would be driven by remittances, which is expected to grow to $14.037 billion in 2007 from last year’s $12.9 billion. If money coursed through informal channels were to be included, remittances could reach as much as $14.7 billion this year, Mr. Tetangco said.

Government’s contract with ZTE Corp. to be investigated further

Full report at BusinessWorld Online
http://www.bworldonline.com/BW090107/content.php?id=071

The Philippine Chamber of Commerce and Industry (PCCI) will further investigate the controversial national broadband network (NBN) contract between the government and China-based ZTE Corporation.

"We must still see the contract before condemning the people behind it. We must push transparency for this case so that we can assess the points to be reviewed," Samie Lim, president of PCCI told reporters in a forum yesterday.

He said that the PCCI is already planning to ask Department of Transportation and Communication (DoTC) Secretary Leandro R. Mendoza to participate in the inquiry with the business chamber.

"In the next few days, as facts are uncovered, we will be able to see the truth behind the controversies," Mr. Lim added.

DOF to vet broadband project

By Iris Gonzales
Full report at the Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070831155

Finance Secretary Margarito Teves ... assured the DOF will review the terms of the loan agreement for the controversial NBN contract offered by the Chinese firm.

He said the Finance department can thumb down the project if it finds the loan unattractive for the government. The cost of the project is $330 million which will be borrowed by the Philippine government from the Export-Import Bank of China.

“We will negotiate the terms of the loan and make sure the offer is based on international standards,” Teves said.

Teves said he had already signed a $400-million loan facility with the Chinese government’s Exim Bank but stressed that this is sort of an open loan for any development project which the Philippines wants to pursue.

Teves said it was up to the government to choose which projects to fund with the loan.

“We will make sure that the project is legally sound and justifiable,” Teves added.

NG needs $865M to take over MRT-3

By Iris C. Gonzales
Original report at the Philippine Star
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2007083165

The National Government (NG) needs $865 million to take over the build-lease-transfer contract of the Metro Railway Transit 3 (MRT-3) and save on financing costs, Finance Secretary Margarito Teves said yesterday.

Spending such a huge amount on the project is more practical for the government given MRT-3’s huge financing costs, the Finance chief said.

“We have six months to raise the amount,” Teves told reporters.

The Department of Finance (DOF) is still studying whether it would secure a loan or issue bonds to raise the needed funding.

Teves said that the proposed buyout or refinancing would save the government $380 million in savings on subsidies.

The National Government has been studying ways on how to restructure the payments owed to the Japanese operator of MRT-3 Tespi Corp., a subcontractor of Sumitomo Corp.

It wants to pay its obligations ahead instead of paying $2 billion until 2025 or the end of the contract.

An earlier study estimated that the government could save $1 billion from the early buyout of MRT3 or half of the remaining payments due until 2025.

Teves said that under the proposed buyout or refinancing deal, the government would take over the project and again offer it to new investors.

He said concerned parties agreed to give the government until February next year to raise the $865 million to finance the proposed buyout.

The government proposed to buy out the rail transit operator led by the Fil Estate group because it can no longer afford to subsidize its operations.

Under the contract, the government has committed a 15-percent return on equity to the private investors in the MRT-3 project.

Its subsidies amount to $3.3 million a month for equity payment and $1.67 million for maintenance costs.

Public subsidy amounts to P48 a passenger. With a daily ridership ranging from 420,000 to 430,000, the government pays at least P20.46 million a day given the minimum fare of P10 a passenger.

Business groups hail RP’s strong GDP growth in Q2

By Marvin Sy
Original report at the Philippine Star
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2007083163

The various business organizations in the country welcomed yesterday the latest economic figures presented by the government, showing a higher than target growth for the second quarter of the year.

Members of the business community, including the foreign chambers of commerce and industry and local industry groups, lauded the administration for making good on its commitment to invest in and develop infrastructure and human capital which has paved the way for the entry of more investors into the country.

One of the fast-growing sectors of the economy, business process outsourcing remained bullish on the prospects of the sector in the next three years.

According to Oscar Sanez, chief executive officer of the Business Processing Association of the Philippines, the growth of the sector in the country has been sustained and has placed the Philippines as high as number two in the world next to India.

“The market size is huge based on the study and while India is the dominant leader, there is a big chance that the Philippines may be the clear number two worldwide,” he said.

Sanez noted that in 2006, the sector registered $3.5 billion in export revenue and he sees this level continuing to grow over the next three years.

“We’re looking to get as high as $12 billion by end-2010, employing about a million people, and that’s an achievable goal,” he said.

Sanez noted that human capital formation has greatly contributed to the growth of the BPO sector as investors continue to look to the Philippines because of the large base of English speaking information technology-qualified employees.

“Every week we talk to potential investors who would want to locate in the Philippines. We’re happy that we’re getting the support of not only the partners in the private sector but in the government sector, particularly the DTI and even CICT,” Sanez said.

To further expand the development of the sector, Sanez said that they are launching three major initiatives namely talent development, promoting the development of new cities outside of Metro Manila and Cebu and strengthening the business environment by promoting better BPO for investors.

The mining sector, which posted a 33 percent growth rate for the second quarter from just 3.3 percent during the same period last year, also saw further growth in the next few years.

Benjamin Philip Romualdez, president of the Chamber of Mines of the Philippines, said that the sector expects around $500 million in investments for the year.

“We are just beginning in the mineral sector to move our industries forward. This year we expect $500 million in our sector and our export growth has been doubling from last year to this year and the previous year’s as well,” Romualdez said.

For 2008, he said that another $1 billion in new investments is expected “which will certainly have a multiplier effect on the economy.”

Romualdez called on the government and the business community to help the sector in developing the downstream industries such as nickel, copper, iron and manganese production considering that the Philippines is the one of the world’s largest sources of these minerals.

“We might as well focus on small industries that can produce value-added products in the sectors that can create more jobs and we hope we can do this in the rural areas so we can decongest some of the industrial centers here in Metro Manila,” he said.

The Federation of Philippine Industries, through its president Jess Arranza, said that the investments made by the government in intellectual, physical and security infrastructure would enhance the level of confidence of the business sector.

Arranza said that the FPI has been actively involved in the government’s efforts to curb smuggling in order to recover the significant amount of revenues lost.

NAIA shuttle and NAIA 3 remediation works in a few days

Vito Barcelo
Original article at the Manila Standard
http://www.manilastandardtoday.com/?...ce1_sept1_2007

The Manila International Airport Authority will provide free shuttle service starting this month at the Ninoy Aquino International Airport and the Manila Domestic Airport.

MIAA general manager Alfonso Cusi said the program will benefit airline passengers, as well as airport employees.

“The free shuttle service will ensure the safety of airline passengers, especially those with connecting flights, as well as those of airport workers as they travel between the terminals under the MIAA’s management,” said Cusi.

Cusi said the Land Transportation Franchising and Regulatory Board has already approved the free shuttle program.

Meanwhile, Takenaka Corp. is set to resume work at the Naia Terminal-3, vowing to shoulder the expenses needed to finish the facility, according to the manila International Airport Authority.

Cusi said the Japanese contractor has been mobilizing its equipment and manpower to get the job rolling this week.

He said Japanese engineers would also determine the scope of remediation on the structural defects, which caused the cancellation of the terminal’s rolling opening last March and April.

Two weeks ago, the International Center for Settlement of Investment Disputes dismissed the complaint filed by German port operator Fraport AG against the Philippine government over the expropriated airport project.

The Washington-based arbitration body has ruled that the Philippines has not violated any international trade treaty, rendering it without jurisdiction over the dispute.

Fraport AG, one of the foreign partners of the local consortium that built Naia-3, filed the case in September 2003 before the ICSID in an effort to recover its investments said to amount to $425 million.

The Supreme Court found the build-operate-transfer contract of Philippine International Air Terminals Co. for Naia-3 “null and void” after President Gloria Macapagal Arroyo declared it “onerous” and offered to buy out the project’s proponents, including Fraport.

The decision of the International Center for Settlement of Investment Disputes is a big boon to the investment climate in the country, said a Fraport AG stockholder who blew the whistle on anomalies in the air terminal project.

Georg Wengert, an accountant and financial consultant in Germany who learned about the lapses while visiting the Philippines in early 2000, owned an undetermined number of Fraport shares which entitled him to attend stockholders meetings and questioned the projects.

The firm had filed at least 20 harassment charges to cow him into silence over the Naia-3 scandal.

Wengert, who claimed that the verdict had vindicated him, said he was not surprised by the decision of the ICSID, an agency of the World Bank hearing investment disputes of member-countries, junking Fraport’s $425-million claim against the Philippines. He said he knew, based on the minutes of the board meeting sent to him by an insider, the violations committed by Fraport and Piatco, its local partner.

With the ICSID ruling and the expected favorable decision from the International Chamber of Commerce, legal minds indicate that the expropriation case may as well be thrown away to avoid sending a wrong signal to the international investing community that crime pays handsomely.

Piatco claimed the Naia-3 construction cost $565 million as its pending claim with the Singapore-based ICC shows.

Government lawyers are optimistic over a favorable Singapore verdict since the two cases were identical and the same set of evidence were submitted to debunk Piatco’s claim.

Friday, 31 August 2007

Abalos defends self on broadband deal

DE VENECIA RELATED TO COLUMNIST WHO MADE REVELATIONS
Original article at News.Balita
http://news.balita.ph/html/article.php/20070830184432036

Chairman Benjamin Abalos of the Commission on Elections (Comelec) today admitted dealing with China’s ZTE Corporation, including a visit before the May polls, but denied allegations the contacts were not connected with the controversial National Broadband Network (NBN) project nor with Comelec itself.

The Comelec official’s connection with ZTE Corporation was first revealed by a columnist of a major daily, whose wife is related to House Speaker Jose de Venecia.

The columnist’s revelations, including Abalos’ alleged junkets and “sexcapades” in China on ZTE’s funds, were picked up by minority Rep. Carlos Padilla and was the subject of a recent privilege speech at the House of Representatives.

Padilla’s move was apparently aimed at triggering impeachment proceedings against Abalos, who, as Comelec chairman, can be removed from office only by impeachment or resignation.

But in an interview with the Philippines News Agency, Abalos simply laughed off the allegations , which he described as “simply incredible… people will not bite that kind of story.”

For now, he said, he is just leaving the idea of being impeached “to the propriety and sanity of most congressman,” laughing as he mentioned Padilla’s name.

According to Abalos, he had been to ZTE Corporation, near Hong Kong, “long before the elections” of May 2007. But if his detractors believe and have proof that such visit were illegal, “they can go ahead and file a case against me,” he expressed.

In reference to his supposed train ride from Hong Kong to ZTE Corporation, leaving his wife at a Hong Kong Hotel to cavort with other women, Abalos laughed once more and said: “I have no idea there is such a train connection.”

Even his own wife, with whom he is very close and publicly affectionate, cannot help but laugh at the insinuations of infidelity, according to Abalos.

The chairman said that some ZTE officials are known to him but there was never any talk between them of Comelec’s computerization program or of the broadband deal. “I do not know what the NBN is. Who am I to (broker) such an arrangement?”

”It’s true I escorted them to the office of (Finance Secretary Gary) Teves but that was in 2005 or last year,” he explained. At the time, ZTE Corporation was looking to invest in projects in Davao. “I did it as a Filipino.”

ZTE, a Chinese government-owned company, will provide materials and services for a broadband agreement between the Philippines and China.

A Philippine-based company owned by de Venecia’s son, Jose III, was a rival for the project, but was booted out during the early stages of preliminary talks.

Speaker de Venecia has a very pivotal and decisive role in impeachments moves. (PNA)

PGMA envisions brighter future for RP over 3 years

THURSDAY, AUGUST 30, 2007 | ECONOMY
Original report at Gov.Ph News
http://www.gov.ph/news/?i=18718

San Fernando City, La Union -- President Gloria Macapagal-Arroyo is determined to secure a brighter future for Filipinos for the next three years.

She bared her vision during an interview recently over Radio Mindanao Network and DZXL where she said, "For the next three years what I want to do is to translate the positive results of our economic reform into real benefits for our people."

The President promised that her remaining years in office will see huge investments in human infrastructure, social services, the educational system and infrastructure facilities, to improve the competitiveness of the Philippines, attract more investments both local and foreign, create more jobs and help improve the lives of our people.

She said that her administration will step up the crackdown on graft and corruption, bolster the campaign against terrorism and bring peace to Mindanao.

To achieve this vision the President proposed a P1.227 trillion national budget for 2008, about P90 billion more than the P1.136 trillion outlay in 2007.

The bulk of the proposed budget will be spent for infrastructure projects such as construction of roads, bridges, ports, airports, school buildings, housing, hospitals and other development projects.

The Chief Executive is confident that her objectives for the country would be attained by pouring government resources into major development projects which will yield high-impact dividends for the people, bolster national stability and spur rapid economic growth.

Mrs. Arroyo expects greater influx of foreign investors into the country in the years ahead, especially when the on-going construction and rehabilitation of various national highways and communication facilities are completed.

"Investments create jobs", she said.

To secure a healthy future for the people, the President also increased the budget of the Department of Health by 22 percent or P2.715 billion including the P1 billion fund for the upgrade and improvement of services of government hospitals..

The President have plans to modernize the Mindanao Regional Hospital and make it Kidney, Lung, and Heart Center in Region 10.

Similarly, the Davao Medical Center, the Bicol Regional Training Hospital in Legaspi City, and the Vicente Sotto Memorial Hospital in Cebu City will be upgraded so that people in these areas don't have to go to Manila for special treatment.

Meanwhile, the President urges Congress to pass and approve the proposed 2008 budget and other important bills including the bill for affordable, quality medicines. She also seeks the cooperation of the Senate in the ratification of the Japan-Philippines Economic Partnership Agreement (JPEPA), as she calls all the Filipino people to help her administration achieve its goals of economic growth and peace. (PIA La Union)

PGMA: Poverty reduction our over-arching goal

THURSDAY, AUGUST 30, 2007 | GOVERNMENT MANAGEMENT
Original report at Gov.Ph News
http://www.gov.ph/news/?i=18719

President Gloria Macapagal-Arroyo said today that her administration’s bold economic reforms are not only working, they are producing the much-needed funds for the government’s efforts to reduce poverty in the country.

In a press briefing this morning in Malacanang, the President explained that alleviating the widespread poverty is the over-arching goal of her administration.

Reducing poverty is also the driving force behind her economic reform programs, she added. Poverty reduction is “our over-riding objective -- ang pagbalansiyado ng kaban ng bayan ay unang hakbang lamang; gumagawa tayo ng matagal nang dapat gawing pamumuhunan sa human at physical infrastructure.”

The President said upgrading the country’s competitiveness forms part of her administration’s strategy for poverty reduction. Investments create additional jobs – “mas maraming trabaho, mas konting kahirapan.”

Kasama rito ang bilyun-bilyong piso sa edukasyon, kalinga sa kalusugan at training; kasama ng bilyun-bilyon sa mga bagong tulay, kalsada, pantalan…”

Hanggang ngayon, mataas ang ating hinahangad – naharap natin ang hamon,” the President said, even as she pointed out that earlier, “no one thought we could get more revenue, cut down on tax cheats, strengthen the peso and move the stock market.”

Recalling the initial pessimism that her economic reforms would work, the President said, “No one thought we could bring our budget into balance, pre-pay our debts, at dagdagan ang trabaho – ngunit nagawa natin. Our new-found money for investments allows us to pick up the pace of growth.”

Umu-ubra ang ating plano sa ekonomiya– today we have the latest glowing indicators to show for it,” the President said.

The Chief Executive rattled off the latest accomplishments of her administration, saying: “For the second quarter of the year, gross domestic product or GDP rose by 7.5 percent – the fastest in two decades.”

“Gross national product or GNP rose by 8.3 percent – this brings our first semester economic growth to 7.3 percent … (and) “we’re confident of meeting our full-year growth forecast of 6.1 to 6.7 percent,” she said.

Admitting that a lot of work remains to be done, the President said the government cannot rest on its laurels: “Dapat hindi tayo magpahinga, kundi sumulong at i-sustento ang momentum sa susunod na tatlong taon. Ita-translate natin ang mga positibong resulta ng ating mga reporma sa ekonomiya sa mga tunay na biyaya para sa taong-bayan.

“To sustain our expansion… (and) to boost the domestic economy,” the President called on the business leaders present “to join hands with our economic team in advancing crucial initiatives toward faster and faster growth.”

The initiatives include the following: (1) achieve our revenue and deficit targets to maintain investor and creditor confidence and keep the flow of low-interest capital strong; (2) intensify domestic growth and investment, especially micro, small and medium enterprises, exports and agri-business, tourism and infrastructure, and addressing business concerns over power costs and red tape; and (3) “be merciless in ripping through undue obstacles in the way of long-overdue priority infrastructure.”

She said she had given “strict marching orders to the BIR (Bureau of Internal Revenue) and (the Bureau of) Customs in three meetings since July to hit their targets or else – and they have been meeting their targets.”

She added that “with resolute collection and payment of the right taxes, we shall all enjoy ample, cheap funds for business and development.”

The President also called on Trade and Industry Secretary Peter Favila to “please slash more red tape, as well as the drag of power costs on our exporters and manufacturers.”

She also reiterated her directive to the Department of Energy (DOE) last week “to ensure our power cost production strategy.”

“DOE has committed to privatize half of National Power Corporation’s generating capacity in the months ahead, along with the National Transmission Corporation (Transco) which has attracted interest from nine consortia.”

The President also said she hopes Congress would prioritize the bill amending the Electric Power Industry Reform Act (EPIRA) and open access for industrial users of electricity a reality.

For the third initiative, the President said she assigned the clearing up of the obstacles impeding priority infrastructure projects to the super regions champions, the infra agencies, state corporations, and the infra-monitoring task force of the Presidential Management Staff (PMS).

“Let us end the days when our public works were held back by huge deficits and reenacted budgets. To this end, I also urge Congress to speedily enact next year’s budget for hopefully even faster growth in 2008,” she said.

The President also directed the PMS to push government and private financial institutions and non-government organizations “na magpahiram sa mga micro, small at medium na negosyo – ito ang saligan ng ating ekonomiya, dapat palawakin natin sila sa sapat na pautang at technical assistance.”

Among those present during the presentation of the 2007 Second Quarter and First Semester Economic Performance were Roger Dallas, president and manager of the American Chamber of Commerce of the Philippines; Toshifumi Inami, president of the Japanese Chamber of Commerce and Industry of the Philippines; Jesus Arranza, president of the Federation of Philippine Industries; and Benjamin Philip Romualdez, president of the Chamber of Mines of the Philippines.

Gov't on track to meet full year 6.1 - 6.7 percent growth target -- PGMA

Original report at Gov.Ph News
THURSDAY, AUGUST 30, 2007 | ECONOMY
http://www.gov.ph/news/default.asp?i=18721

President Gloria Macapagal-Arroyo said today that the government is on track to meet its full year economic growth target of 6.1-6.7 percent.

In a press briefing in Malacanang this morning, the President said that based on additional data, the country’s gross domestic product (GDP) grew by 7.3 percent in the first semester of the year.

“We are confident of meeting our full year growth forecast of 6.1-6.7 percent. Based on additional data, our statisticians have also revised the first quarter GDP growth. And that’s why I said that GDP grew in the first semester by 7.3 percent,” she said.

GDP is defined as the market value of all final goods and services produced within a country in a given period of time.

Citing latest economic indicators, the President said that in the second quarter of the year, GDP rose by 7.5 percent, the fastest in 20 years, while gross national product (GDP) hit 8.3 percent.

“This brings our first semester economic growth to 7.3 percent,” she added, as she attributed the country’s improved economy to all Filipinos here and abroad.

She warned, however, against complacency. “While our economy has reached a new level of maturity and stability with one of the strongest macroeconomic fundamentals in two decades, we must sustain the momentum” of economic growth, she said.

“To sustain our expansion and global business, we must undertake more efforts to boost the domestic economy. We call on the business leaders gathered here to join hands with out economic team in advancing crucial initiatives toward faster and faster growth,” the President said.

In her report on the Performance of the Philippine Economy for the Second Quarter of 2007, Estrella Domingo, assistant secretary general of the National Statistical Coordination Board (NSCB), said the GDP growth for the second quarter of 2006 was 5.5 percent while that of the GNP was 6.4 percent.

During the same period this year – April to June 2007 – the growth rate for GDP was 7.5 percent while that for GNP was 8.3 percent.

For the first half of 2006, the GDP growth rate was 5.6 percent compared to this year’s 7.3 percent; while last year’s GNP growth rate was 6.4 percent compared to 8.0 percent this year, Domingo added.

Domingo also noted that during the second quarter of 2007, the industry sector grew by 8 percent compared to last year’s 4.4 percent.

She attributed this to the big jump in the growth rate in the mining and quarrying sub-sector which registered a record 33.3 percent growth this year, compared to only 3.3 percent last year.

The construction sub-sector of the industry sector also recorded a growth rate of 21 percent during the same period, compared to last year’s 4.0 percent.

Thursday, 30 August 2007

STATEMENT OF SOCIOECONOMIC PLANNING SECRETARY AUGUSTO B. SANTOS

ON THE RELEASE OF THE SECOND QUARTER 2007 NATIONAL INCOME ACCOUNTS
http://neda.gov.ph/ads/press_releases/pr.asp?ID=888

It is heartening to note the sustained strong performance of the economy in the second quarter, exceeding the forecasts by both NEDA and private firms. Gross domestic product (GDP) rose by 7.5 percent and gross national product (GNP) by 8.3 percent. Meanwhile, GDP growth for the first quarter was updated, yielding a higher growth rate than earlier thought, at 7.1 percent. This brings first semester growth to a strong 7.3 percent.

The upbeat response of productive sectors further reinforced our macroeconomic fundamentals. While agriculture grew moderately at 3.9 percent, the distinct pick up in industry (8.0%) and services (8.4%) boosted the economy. On the demand-side, growth was stimulated by household and government consumption, which expanded by 6.0 and 13.5 percent, respectively. Capital formation (8.2%) also grew robustly compared to the 1.5 percent growth recorded in the same period last year. Merchandise exports however, slowed down to 5.9 percent from its double digit growth (21.7%) in the same period a year ago.

In agriculture, palay production (4.4%) remained healthy on account of increases in area harvested due to better irrigation and policy interventions (i.e. DA-GMA Rice Program). High value crops, fishery and forestry also supported the sector’s growth.

From a lackluster performance last year, the mining and quarrying sector sustained its growth in the first quarter. Quarrying also got a boost from the uptick in construction on account of the property market boom and strong growth in public construction (39.6%). Meanwhile, almost all services sub-sectors thrived. They were led by finance (11.8%), transportation, communication and storage (9.8%), private services (8.6%) and trade (8.4%). The country’s sound macroeconomic fundamentals and strong corporate profits drove up the Philippine Stock Exchange Index (PSEI). Growth was seen as well in the higher earnings of banks and other financial services providers. Affordable airfares and intensive marketing promotions continued to prop up the air transport sector.

The upturn is a telling sign for us that the full year official target of 6.1-6.7 percent GDP growth is quite attainable, notwithstanding some uncertainties. On the external front, the continued weakness of the US economy and volatile oil prices continue to pose downside risks. Nonetheless, the steady economic expansion in Europe and Japan, as well as the fairly strong performance of other Asian economies, are positive developments. On the domestic front, the effects of the prolonged dry-spell may drag the performance of agriculture in the second half.

The second quarter growth also reflects the continued stronger demand for labor, pushing the unemployment rate lower to 7.4 percent in the April labor force survey from 8.2 percent the year before.

All these seem to say that the macroeconomic reforms implemented have been effective thus far. But with this positive development, we cannot afford to be complacent. We have to continually raise the bar to ensure the economy’s solid growth, so that economic gains increasingly benefit the Filipino people.

The government must push for policies to sustain macroeconomic stability, modernize agriculture and effectively transform it into agribusiness, strengthen small enterprises, expand export markets, protect our environment, and realign the national budget to spend more on social services, particularly education and health. The government must implement reforms to improve productivity and boost the investment climate. This involves upgrading infrastructure, cutting loose from policies that distort market competition, sustaining fiscal reforms, and achieving political stability. We need to speed up the pace of implementing key reforms to ensure increasing growth over the medium-term.

Thank you.

Philippines Posts 7.5 Percent GDP Growth

By Karl Lester M. Yap and Luzi Ann Javier
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqQ9x9rjRcxo&refer=home

Aug. 30 (Bloomberg) -- The Philippine economy expanded at the fastest pace in two decades as the government spent more on roads, bridges and schools and consumers bought mobile phones and new homes.

The $117 billion Southeast Asian economy grew 7.5 percent in the three months ended June 30 from a year earlier, from a revised 7.1 percent gain in the first quarter, President Gloria Arroyo said in Manila today. The pace exceeded the 6.5 percent median estimate of all 15 economists in a Bloomberg News survey.

Arroyo has said she wants to boost economic growth to as much as 6.7 percent this year from 5.5 percent last year to ease poverty in a nation with an average income of $1.66 a day. The first cut in borrowing costs since 2003 is fueling consumer spending.

``The expansion in the second quarter was a function of strong government spending and private investment and consumption which offset weak exports,'' said Edward Teather, an economist at UBS AG in Singapore. ``Growth momentum has accelerated in the last three quarters, raising the possibility that the Philippines growth has shifted up a gear.''

UBS raised its 2007 growth estimate to 7.1 percent from an earlier forecast of 5.9 percent. It also raised the estimate for next year to 6.5 percent from 6.1 percent.

Second-quarter growth was the strongest since the fourth quarter of 1989, according to data compiled by Bloomberg. The Philippine peso rose 0.3 percent to 46.675 per dollar at 1:56 p.m. in Manila and the benchmark stock index surged 3.5 percent to its highest in three weeks.

Interest Rates

``The combination of strong growth coupled with manageable inflation will allow us to maintain our neutral policy stance,'' central bank Governor Amando Tetangco said in a text message sent from his mobile phone today.

The central bank kept its benchmark interest rate unchanged at 6 percent on Aug. 23 after lowering borrowing costs in July for the first time since 2003 to spur growth. Inflation is close to a seven-year low.

``This is a strong indication that we are on the right track towards a sustainable and meaningful economic growth that is felt by the majority of our people,'' Finance Secretary Gary Teves said in a mobile-phone text message.

Consumer spending, which accounts for about 70 percent of the economy, increased 6 percent after a 5.9 percent gain in the first quarter, according to a report today from the National Statistical Coordination Board. Services expanded 8.4 percent, led by banks and other financial institutions.

Election Spending

Election-related spending also helped boost consumer spending, Economic Planning Secretary Augusto Santos said. The Southeast Asian nation had 48,967 candidates who ran for the Senate, House of Representatives and local government positions in the May 14 elections, according to the Commission on Elections Web site.

Government spending accelerated by 13.5 percent in the second quarter from a year earlier, after a 9.9 percent rise in the first three months of 2007.

The government plans to spend 1.18 trillion pesos ($25.3 billion) this year, 13.8 percent higher than what it spent in 2006 as it accelerates construction of roads, bridges, and schools.

The government can ``sustain'' infrastructure spending, Budget Secretary Rolando Andaya said today.

Capital spending rose 8.2 percent as companies bought more equipment to expand production. It rose 6.9 percent in the first three months of the year.

Outlook Revisions

``The economy has taken many by surprise and the market will probably revise its outlook as result of this,'' said Paul Joseph Garcia, who helps manage $1.8 billion as chief investment officer at ING Asset Management in Manila.

The pace of second-quarter growth may be the third-fastest among the six Southeast Asian economies tracked by Bloomberg after Singapore and Vietnam.

Thailand's GDP probably expanded 4.1 percent in the three months to June 30, according to economists' estimates. The government report is due Sept. 3. Malaysia's economy grew 5.7 percent, a government report showed yesterday.

Exports, which account for about two-fifths of Philippine gross domestic product, increased 4.2 percent, after expanding 9.9 percent in the previous quarter.

U.S. Exports

Weaker U.S. demand is hurting Asian export-dependent economies, which are almost twice as reliant on sales abroad as the rest of the world. Malaysia yesterday said shipments of manufactured products dropped in the second quarter.

Remittances rose 7.8 percent in the second quarter, slowing from a 14.1 percent pace in the previous three months. Growth in funds sent home by Filipinos abroad that's been driving consumer spending is slowing as fewer people find jobs overseas.

Agricultural production grew 3.9 percent in the second quarter, slowing from 4.1 percent. Industrial output rose 8 percent, quickening from the prior quarter's 6.3 percent pace. Services increased 8.4 percent.

Philippine Q2 GDP up 7.5% yr/yr; Q1 revised to 7.1%

FASTEST PACE SINCE 1987

By CHARO LOGARTA AND JUDITH BALEA
Original report at ABS-CBN News
http://www.abs-cbnnews.com/topofthehour.aspx?StoryId=90446
10:07, 30-Aug-2007

The Philippine economy grew 7.5 percent in the second quarter from a year earlier, President Gloria Macapagal Arroyo announced in a briefing at Malacanang.

The economy grew 6.9 percent year-on-year in the first quarter.

The government hopes to boost growth to between 6.1 and 6.7 percent this year.

====

Original report at GMANews.TV
http://www.gmanews.tv/story/58337/RP-economy-surges-75-in-Q2-fastest-pace-in-2-decades
10:05, 30-Aug-2007

The Philippine economy expanded 7.5 percent in the second quarter of the year, the fastest pace of growth in two decades, the government said Thursday.

In a press conference held in Malacañang Palace, the government announced that the faster-than-expected economic expansion in the period was due mostly to “the vibrant industry and services sector."

"The services sector remained the linchpin of the economy with its 8.3 percent growth," the government said.

On the demand side, household spending and exports drove GDP. Spending was boosted by sustained remittances from overseas Filipino workers, the government said, as Net Factor Income Abroad surged 16.6 percent in the second quarter.

Higher NFIA boosted gross national product, an economic measure that measures economic activity by Filipinos abroad, to 8.3% in the second quarter.

In the first quarter, the country’s gross domestic product, the standard measure of economic activity, grew a revised 7.1 percent. This brought first half economic growth to 7.3 percent.

Wednesday, 29 August 2007

Marinduque and Elephant Fantasy Island

Marinduque photos (http://marinduque.net/)
Marinduque photos (http://www.43places.com/places/view/290073)

Photos and slideshow (http://www.luxuryrealestate.com/568373)
Photos and slideshow (http://www.privateislandsonline.com/elephantisland.htm)
Photos (http://community.webshots.com/album/424310820dKNzSs)

NAIA 3 on YouTube

A Drive By (http://www.youtube.com/watch?v=tTHP-AO0A7M)

New Iloilo International Airport on YouTube

THE VIDEOS

Outside the airport (http://www.youtube.com/watch?v=r_RZ2VWi3ho)
Outside the airport--night shot (http://www.youtube.com/watch?v=XMWsRm_hbco)
Pre-departure area (http://www.youtube.com/watch?v=I9T79S55V4A)

P1.28 B released for AFP

ARMED FORCES LAUDED FOR GAINS IN REBEL CAMPAIGN
By GENALYN D. KABILING
Original report at the Manila Bulletin
http://www.mb.com.ph/MAIN20070829101505.html

President Arroyo has authorized the release of P1.28 billion for the increase in combat pay of soldiers and for the purchase of new protective gears for frontline troops as she praised the Armed Forces of the Philippines (AFP) for successfully neutralizing rebels’ lairs in Mindanao.

At the commemoration of National Heroes’ Day in Cagayan de Oro City last Monday night, the President said the government will use the savings from the bidding under the military’s modernization program for additional salary benefits and equipment for soldiers.

"In gratitude for our soldiers and Marines who gave up their lives in these past battles, I direct the Department of Budget to authorize the Armed Forces to avail (itself) of the use of these savings to increase the combat pay and force protection of our soldiers and Marines," Mrs. Arroyo said.

The President also ordered Budget Secretary Rolando Andaya Jr. to allocate P145 million a year for additional pay of soldiers engaged in actual combat operations.

She said members of the Philippine Army and Marines would get an additional P150 per day of "actual combat," a significant increase from the previous P240 per month.

AFP chief of staff Gen. Hermogenes Esperon Jr. was asked to release the guidelines for the latest combat pay hike.

The President also noted that Air Force pilots already receive a 50 percent salary differential as flying fee while the Navy gets a 25 percent differential for naval duties.

"Part of the gains from our economic measures is being used to modernize all the armed forces and improve the fighting conditions of our soldiers," the President said.

Aside from combat pay hike, the Chief Executive said the military also deserves improvement of their self-protective gears when in the battlefield.

She ordered the purchase of 3,000 new sets of helmets and armored vests to be equally divided to the Marines, Army and other special combat units. "This shall be charged to the savings in the Capability Upgrade Program," the President said.

The new equipment was in addition to the 3,100 sets received by the Army and the 5,000 given to the Marines last February.

"These have been distributed to line units to afford better force protection to the lead elements of units in operations," she said.

At the same event, the President also paid tribute to the soldiers and their leaders for the elimination of Abu Sayyaf leaders and Jemaah Islamiyah militants during the monthlong campaign against terrorism in Mindanao.

"Our soldiers have hit them hard and with success. This is due to our forces’ heroism and to the fact that the terrorists’ lair is becoming narrower because our grasp on peace in Mindanao has become wider. The outcome of peace is a new era of economic development," she said.

Chinese loan caps sneaky ZTE deal

THE BIG STORY OF THE DAY
GOTCHA By Jarius Bondoc
Original article at the Philippine Star
http://www.philstar.com/index.php?Opinion&p=49&type=2&sec=25&aid=20070828126

On the sly the government signed last weekend a loan from China to fund the purchase of broadband gadgets from Chinese ZTE Corp. It was a final act of sneakiness to ram a project of dubious use and costing. Filipinos will now have to pay 20 long years $330 million (P16 billion) for something that was hidden from them.

The loan signing was made with no prior public notice. Only now is info surfacing that staff from China Export-Import Bank arrived two weeks ago to review various loan bids of the Philippine government. ZTE veep Yu Yong and finance woman Fang Yang also flew in Friday afternoon to lobby for insertion of the $330 million in the 2007-2008 loan package. Minister of Commerce Bo XiLai then arrived Saturday to approve $1.8 billion in all, including an excessive $400 million for ZTE’s broadband network.

Even the bigger amount now raises questions. Trade Sec. Peter Favila could only say it was China’s wish to help. Finance Secretary Gary Teves and Transport Sec. Larry Mendoza were tight lipped. Sectors questioning the purchase are now wondering if ZTE’s tag price has risen again — from $262 million during talks with transport officials in Feb. to $330 million for the Apr. supply contract signing in Hainan.

Mr. Bo was said to be looking forward to seeing again Economic Sec. Romulo Neri, but learned he had been replaced only last month. Neri’s fall from the Cabinet had to do with his resisting the ZTE deal, according to ex-congressman Rolex Suplico who petitioned the Supreme Court to stop it.

Fast breaks marked the ZTE deal from the start. In a Cabinet meeting in Nov. President Arroyo had told Neri and technology chief Ramon Sales she wanted the broadband project done by Build-Operate-Transfer. That way, there would be no cost to government and no loan would have to be taken out. Still, DOTC officials signed a purchase deal, with a Chinese loan at a hefty 4-percent interest and a sovereign guarantee to repay at all costs.

Two bids came ahead of ZTE’s to build the telecoms setup for much less or no cost to government. Yet when ZTE offered $262 million in Feb., it got the DOTC’s ear. Arescom of USA and Nasdaq-listed Wireless Facilities Inc. cried that their $135-million tag was ignored. US Ambassador Kristie Kenney wrote Neri on Apr. 20 to caution against undue haste. The next day Mendoza and Yu signed the deal in China, with Arroyo witnessing. There was no explanation why ZTE’s price rose from $262 million to $330 million. There was no explanation of what the network was for to begin with.

Businessmen and competitors were stunned. Six groups called for abrogation of the deal: Management Association of the Philippines, Finance Executives’ Institute, Foundation for Economic Freedom, Makati Business Club, Bishops-Businessmen’s Conference, and Action for Economic Reform. The Phil. Chamber of Commerce and Industry asked for at least a review. Like what happened to ZTE competitors, all were ignored by the DOTC. Pressed for a copy of the contract during a forum in June, DOTC deputy Lorenzo Formoso claimed the only two copies were stolen in a hotel room hours after the signing.

But not to worry, Formoso said, they had reconstituted the papers, so available to interested parties. The competitors and business groups wrote DOTC for copies. They got no reply within the required 15 days. More than a month later, DOTC said in a newspaper ad that copies for the contract, for which three generations of Filipinos will pay, is confidential.

ZTE and Filipino lobbyists have always employed slyness because the project appears indefensible. Not only was Arroyo’s desire for B-O-T disregarded, but also the Telecoms Policy Act of 1995. That law requires the government to relinquish the industry to the private sector for competitive improvement. But the ZTE deal would require government to operate and maintain the broadband system and even allot annual budgets for it.

Professors Emmanuel de Dios and Raul Fabella of the UP School of Economics said the government would only botch up the job of running a huge telecoms system. After all, it had failed to run three smaller versions, for which billions of pesos also were wasted. The two economists also debunked the DOTC’s claims that government would save in the long run from its annual telephone and Internet bill of P4 billion. They showed that government would spend P5 billion more overall during the 20-year loan period.

Mr. Bo’s loan signing comes in the midst of mounting opposition to the ZTE deal among senators and congressmen. Ironically, the minister had warned Chinese enterprises in a Dec. speech in Beijing to take precautions against economic, political and security risks as they step up overseas investments. Rep. Carlos Padilla said upon learning of the contract signing that “Minister Bo XiLai would be violating his own warning if he does not move to avoid being embroiled in legal and political troubles here in the Philippines.” He said Bo should await the resolution of the Supreme Court case before making any move about the broadband controversy.

DOTC, ZTE execs face graft raps

By Delon Porcalla
Full article at the Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070828154

Transportation Secretary Leandro Mendoza and two of his deputies, along with four Chinese executives were charged with graft before the Office of the Ombudsman yesterday.

Nueva Vizcaya Rep. Carlos Padilla said he filed the charges against Mendoza, Transportation Assistant Secretaries Lorenzo Formoso and Elmer Soneja, and Hou Weigi, ZTE Corp. chairman; Yu Yong, vice president; George Zhu Ying, chief Manila representative; and Fan Yang, executive director.

“I asked the Ombudsman to immediately punish Secretary Mendoza and his co-respondents,” he said. “They have done the nation a disservice.”

Padilla said graft was committed when the Department of Transportation and Communications “unilaterally awarded” the $330-million broadband project to Chinese telecommunications firm ZTE.

“The officials I have charged before the Ombudsman, including the officials of ZTE, are liable for misleading the public and executing this anomalous contract and should be punished accordingly,” he said.

Padilla said Mendoza and his co-respondents violated the Anti-Graft and Corrupt Practices Act, the Telecommunications Policy Act, the Build-Operate-Transfer Act, and the Government Procurement Act.

“There was no bidding done for this project, and under the law, all telecommunications projects of the national government have to be bidded out,” he said.

“In this case, all aspects of the contract are suspicious because this has been kept under wraps.”

The Department of Justice has become a “laughingstock” in government circles in light of its legal opinion favoring the ZTE project, when the DOTC did not even give the DOJ a copy of the contract in question, Padilla said.

On the other hand, Mendoza said yesterday he will welcome the filing of a case in court to put the matter before the proper forum and put an end to the issue.

“We are now working with the Office of the Solicitor General to finalize our comments on the case,” he said.

“In view of the SC taking cognizance of the case, the matter is now considered sub-judice, which means that the case is now in the hands of the court.”

Tuesday, 28 August 2007

Chinese loan hit; raps readied vs DOTC, ZTE execs

By Delon Porcalla
Full report at the Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070827214

An opposition congressman wants the Chinese Export-Import Bank to put on hold the guaranteed loan for the controversial broadband contract between the government and China’s ZTE Corp. until the legal and political issues surrounding the project are resolved.

Nueva Vizcaya Rep. Carlos Padilla also vowed to file graft charges against Transportation Secretary Leandro Mendoza, assistant secretaries Lorenzo Formoso and Elmer Soneja, and some Chinese officials for the anomalous ZTE contract.

...

Padilla said ZTE chairman Yu Yong, vice president George Zhu Ying (the company’s representative in Manila) and executive director Fan Yang, should also be held liable for the questionable broadband deal.

According to Padilla, the Chinese government should at least have waited for the resolution of a taxpayers’ suit filed with the Supreme Court by former Iloilo congressman and now Vice Gov. Rolex Suplico against the officials involved in the ZTE deal.

Padilla said he is prepared to explain in detail next week the alleged conspiracy – including massive payoffs – that led to the signing of the contract.

He said Mendoza and the other DOTC officials, including ZTE officers, rushed the signing of the P16-billion negotiated contract in Boao, China last April despite protests from other private companies and expressions of concern from the US government.

In signing the deal, Padilla said Mendoza and the other officials imposed a P16-billion foreign debt burden on Filipinos. Other private companies had offered to undertake the broadband project at no cost to the government, Padilla said.

He added that the awarding of the contract to ZTE was inconsistent with President Arroyo’s instructions at a Cabinet meeting in November 2006 that the NBN project be implemented at no cost to the government.

Padilla said in rushing the signing of the contract, the officials violated the Government Procurement Act and the Telecommunications Policy Act, which requires public bidding for government telecommunications projects.

The University of the Philippines’ School of Economics, in a report, argues that laying down a broadband backbone is economically unsound as it would only force private telecom firms to impose higher broadband rates in the Philippines, already one of the highest in Asia.

Business groups, including the Makati Business Club, the Management Association of the Philippines and the Bishops-Businessmen’s Conference, have asked Mrs. Arroyo to rescind the contract and re-allocate funding for it to other government projects like construction of school buildings.

The NBN is envisioned as a nationwide telecommunications infrastructure that will deliver voice, data and Internet services to link all government offices across the country.

Before the signing of the contract, US Ambassador Kristie Kenney sent an official letter to the Philippine government asking it to re-consider the contract and conduct a transparent bidding for the project.

US firm Arescom Inc. and its partner Nasdaq-listed Wireless Facilities Inc. complained of being unfairly disregarded by the Philippine government despite their less-expensive offer. Wireless boasts of having built broadband networks for the US State Department and other high-security US agencies.

Filipino firm Amsterdam Holdings Inc. also accused the DOTC of sidelining its “unsolicited proposal” for the project in violation of the build-operate-transfer law. The law allows a private contractor to undertake a project at no cost to the government and recover its investments only after a certain period.

Monday, 27 August 2007

Skyway to Alabang construction begins

Click here for GMANews.TV video.

ZTE deal conceived in hotel ‘sexcapades’

WHAT REALLY HAPPENED BEHIND THE SCENES
By Jarius Bondoc
Original article at the Philippine Star
http://www.philstar.com/index.php?Opinion&p=49&type=2&sec=25&aid=20070826167

Filipinos are so morally degenerate that they sell their votes, Comelec chairman Benjamin Abalos laments. He could be right.

But can anyone be more degenerate than a high Comelec official who lobbied for the ZTE deal for sex and money? As morality expert, Abalos can judge. That Chinese sale of an exclusive broadband setup for the Philippine government is of dubious need. Yet it would force Filipinos to pay $330 million for 20 years at 4-percent interest — to enrich instantly the Comelec official and his cohorts.

The Comelec official was in Shenzhen at least eight times from Sept. 2006 to Feb. 2007. He flew to that southern China city all expenses paid by ZTE Corp., China’s third largest telecoms maker owned 50 percent by generals. ZTE’s headquarters is in Shenzhen’s Nanshan district, close to the flashiest hotels, restaurants and fairways.

The official enjoyed debauchery, but he covered it. In most trips, he first flew with his wife to Hong Kong. Leaving her to shop, he would then proceed by first-class train to Shenzhen. There, ZTE executives met him each time with gifts: two women, one for the day, the other for the night. He would take the women along to their golf games, meetings and cocktail-dinners, as if bragging of his sexual prowess.

ZTE execs feted the Comelec man like a king, for they needed something big from him. The firm had gotten wind of RP’s national broadband network and wanted to bag it. There were just two pesky little problems — two competitors with superior bids. But ZTE knew how to prevail in Philippine government contracting. That’s precisely why it befriended the high Comelec official. ZTE’s business style is to zip into a third world country with lots of money, looking for the most influential state official to buy off. In the NBN case, it was a man whom politicians from both the administration and the opposition would consider king during the election campaign.

The ZTE deal was conceived during “sexcapades” in high-class hotel rooms. Between “naps” of the Comelec official with the gift-woman of the moment, ZTE execs would discuss with him the delicate matter of project pricing. The first price broached was $262 million, a figure that the official tossed around his cohorts in Manila, and from which they stood to get $130 million in kickback. It did not matter that ZTE competitors were offering much less; bribery would be the key to get other officials cooperating. So for good measure, they upped the price to $330 million, with the kickback rising to $198 million. Quickly they shook on it, for the Comelec official was in a hurry to get back to his Chinese moll. At one point, an aide kidded him about his “stamina in bed.” Whereupon, the official pulled out of his pocket the secret of his “staying power”: long red pills billed as the Chinese version of Viagra. Warned of its harmful cardiac side effects, he just chuckled.

Mood swings marked the Shenzhen sorties. One meeting on Dec. 27 was particularly heated. The Comelec man wanted his share of the loot paid fully and in advance, and pounded his fist on the table to stress his point. Fang Yang, the female finance officer, just as adamantly stressed that they needed to see something in exchange for the $3 million they already had given him then. Another time, the hotel drinking spree of ZTE execs, the Comelec official and their dates simply got wild. Guests complained of the racket the official caused chasing his moll down the corridor.

Unknown to the Comelec man, expatriates working in Manila had spotted him in Shenzhen. Chinese competitors of ZTE too have complained to Beijing of its unfair means of bagging contracts. And Filipinos also saw him golfing and meeting with communications bureaucrats in Manila.

Incidentally, Ms Fang presently is in Manila for a make-or-break meeting with Beijing and Philippine officials. Yu Yong, the ZTE vice president who signed the stolen-but-reconstituted-but-secret contract with the Dept. of Transportation and Communications on Apr. 21 in Hainan, flew in with her Friday night. They were to negotiate Sunday with visiting Chinese Minister of Commerce Bo XiLai and Philippine finance managers the inclusion of the $330 million in Beijing’s priorities for lending.

Did Ms Fang meet with the Comelec official during the weekend? It’s said that she already had released another $2 million to him in May, and is about to deliver more.

And so Abalos may wish to determine which between vote selling or selling the country blind is more degenerate. Meanwhile, the ZTE contract was signed in Apr. at the height of the election period, when government officials are forbidden from awarding supply or construction projects. Does Abalos have an opinion at least on that?

RP, China sign $1.8-B loan for ZTE, others

NO CLARIFICATIONS ON QUERIES OFFERED
By Paolo Romero
Original report at the Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070826135

The Philippines and China have inked a $1.8-billion loan agreement to finance big-ticket projects in the country, including the controversial $330-million National Broadband Network (NBN), officials said yesterday.Trade Secretary Peter Favila said the signing took place without fanfare on the sidelines of the ASEAN Economic Ministers (AEM) meeting held at the Shangri-La Hotel in Makati City on Saturday.

Favila said the agreement was signed by Department of Finance (DOF) officials and representatives of the China Export and Import Bank.

He said he represented the Philippine government together with Finance Secretary Margarito Teves and Transportation Secretary Leandro Mendoza in the signing with Chinese Minister of Commerce Bo Xilai who attended the AEM.

Favila said the loan facility was higher than expected and during his bilateral meeting with Bo at the AEM, the Chinese official indicated that the Philippines could expect more if warranted.

“This loan facility is a clear manifestation of China’s commitment to help us. Now it is up to us if we want to be helped,” Favila told The STAR.

Favila stressed the main architect of the package was the DOF.

Favila was designated minister-in-charge or the government’s point man for business in China with Bo as his counterpart for ease in coordination.

He said the facility was also one of the outcomes of the economic cooperation pact earlier signed between the two countries.

Favila claimed the terms were “very concessional” but did not elaborate and referred the issue to DOF officials.

The agreement already includes funding for the $450-million CyberEducation program and the NBN project with ZTE Corp. of China, as well as for the Northrail and Southrail projects.

The Northrail and Southrail projects are proceeding smoothly while the NBN, which would link all government agencies and offices, is facing stiff opposition from rival proponents and some lawmakers.

“The minister said the facility is for projects the government would like to nominate and it would be discussed if they would be qualified,” Favila said.

Favila though admitted numerous government agencies and departments have been lobbying for their respective pet projects for funding by the loan agreement. “They’re (projects being pushed) so many,” he remarked.

Mendoza, the chief proponent of the ZTE contract, earlier said the Department of Transportation and Communications (DOTC) is just awaiting the results of the DOF negotiations with the China Eximbank for the deal to finally push through.

Mendoza claimed they were able to secure a favorable opinion from the Department of Justice (DOJ) in saying the memorandum of agreement signed between the DOTC and ZTE in Boao, China last April was a government-to-government deal, which means that no bidding is required for the NBN project.

The deal took a mysterious twist after DOTC Assistant Secretary Lorenzo Formoso admitted losing the originals of the signed documents. He claimed the documents were stolen from a hotel room of a Philippine diplomat shortly after the signing.

Officials said the DOTC managed to reconstitute the missing contract.

Favila admitted Mendoza’s presence at the signing practically meant the ZTE deal will finally be implemented.

Among those opposing the contract is the US-based Arescom, and Amsterdam Holding Inc. (AHI), a local firm owned by Jose de Venecia III, son of Speaker Jose de Venecia Jr.

The two firms contended the ZTE deal was onerous, violated the Built-Operate-Transfer (BOT) laws and unconstitutional because similar contracts should have gone through a public bidding.

The two firms also claimed they have submitted much lower bids.

AHI, however, asserted their proposal was superior since it does not require a loan, much less a sovereign guarantee, since it would be fully privately funded.

Iloilo Vice Gov. Rolex Suplico earlier filed a petition before the Supreme Court against the DOTC to stop the deal.

Favila said the controversy over the ZTE contract was briefly touched during his meeting with Bo who appeared unfazed over the opposition.

He said Bo expressed full support of the NBN project and pointed out ZTE and its rival Huawei, a partner of AHI for its own proposal for broadband project, are actually top caliber companies in China on good standing with experience in countries all over the world.

“I think he (Bo) understands that we have some domestic processes and he did not appear worried at all,” Favila said.

AHI counsel Marinelle O’Santos, for her part, claimed she was not aware of the signing but expressed alarm that such a move has been made.

“Up to now, nobody has seen a copy of the (ZTE contract). I think the Filipino taxpayers would want to know what kind of debt they are shouldering and going to pay for the next 20 to 25 years,” O’Santos said.

She debunked claims from Mendoza that anyone who would formally write to the DOTC would get a copy of the supply contract it signed with ZTE.

O’Santos claimed writing to Mendoza and Formoso for a copy of the deal but the request had been ignored.