Saturday, 8 September 2007

Consumer Confidence Continues Rise in Q3


Bangko Sentral ng Pilipinas
Media Release
http://www.bsp.gov.ph/publications/media.asp?id=1643
09.07.2007
Click here for full report and charts.

Nationwide Consumer Outlook

The nationwide consumer confidence index (CI) for the third quarter of 2007 sustained its upward trend to -23.6 percent from -26.0 percent in the second quarter. Although the index is still negative, the trend indicates a rising number of optimistic consumers compared to the last quarter’s level. Survey results also showed that more households anticipate better economic and family financial conditions in the fourth quarter as the index turned positive at 4.1 percent. Likewise, the confidence index for the next 12 months increased to 7.9 percent from 5.8 percent in the previous quarter survey.

The more upbeat consumer outlook for the current quarter was buoyed up by favorable economic conditions, higher family incomes and better family financial positions. In particular, the outlook on these factors for the third quarter improved relative to the quarter-ago level by 4.3 points, 2.5 points, and 0.4 points, respectively, despite remaining in the negative territory. Consumers attributed the favorable economic outlook to the strength of the peso, stable prices of goods and more job opportunities. The reasons cited by respondents for the expected improvement in household finances included employment of more household members, salary increases, an expected business upturn, and higher savings.

It is noteworthy that the improvement in overall outlook was felt most keenly by low-income consumers (with monthly income of less than P10,000) who anticipated better conditions during the third quarter. Their outlook on the country’s economic conditions and own family income increased quarter-on-quarter by 6.6 points and 3.6 points, respectively. Meanwhile, the same outlook indices of consumers from the higher-income groups slightly weakened or were broadly unchanged.

NCR and AONCR Consumer Outlook

The third-quarter CI for the National Capital Region (NCR) improved relative to the outlook in the previous quarter. Similarly, the overall CI for Areas Outside the National Capital Region (AONCR) showed a sustained improvement. For the next quarter, confidence indices for the NCR and AONCR were higher compared to the results in the previous survey. For the first time since the CES was conducted in the third quarter of 2004, the next quarter index for NCR turned positive at 2.6 percent which indicated that majority of the consumers were optimistic about their outlook for the next quarter. The outlook of consumers from AONCR was also markedly more optimistic as the index gained 11.8 points from the previous survey results to surpass the NCR index at 4.3 percent.

Consumers in NCR and AONCR were bullish for the next 12 months. All outlook indices in NCR by component and income groups turned more favorable. For the first time in the past 10 quarters, even those in the low-income group were optimistic that the country’s economic condition and the family financial conditions will be better in the next 12 months. The reasons cited for the favorable outlook in the next 3 and 12 months were the expected release of end-of-year bonuses, the increase in job opportunities, lower debt payments, anticipation of improved governance by newly elected officials, and an expected business upturn.

Expenditures for Next 3 Months

Consumers nationwide anticipated that their expenditures on basic goods and services in the fourth quarter would rise (with an index of 35.1 percent compared to 33.4 percent in the second quarter) in preparation for the holiday season. The expenditure items with higher confidence indices were those on food, clothing and footwear, electricity, and hotel and restaurants.

Buying Conditions for the Next 3 Months

The majority of respondents indicated that the prospects for buying consumer durables, motor vehicles, and residential properties were appreciably better in the third quarter of 2007. Buying condition indices exceeded the 50 percent mark at 53.6 percent nationwide, 56.4 percent for the NCR, and 53.2 percent for AONCR.

Buying Intentions for the Next 12 Months

The nationwide buying intentions index for the next 12 months improved by 1.8 points to 21.4 percent (from 19.6 percent in the last quarter’s survey). Increases were noted in buying intention indices for all consumer items. Indices in the NCR and AONCR showed the same broad trends as the nationwide trend.

Selected Economic Indicators: Outlook for the Next 12 Months

The number of consumers nationwide who believed that the peso would strengthen against the US dollar continued to rise as the index moved upward sharply to 19.4 percent from only 1.1 percent in the second quarter survey. Meanwhile, declines were observed in the indices for the unemployment rate, the interest rate, and the changes in prices, indicating that an increasing number of consumers expected that unemployment, interest rates, and prices will go down in the next 12 months.

Expenditures of Overseas Filipino Workers for the Third Quarter

Over 90 percent of OFW households spent the remittances they received primarily on food and other household needs during the third quarter. More than 50 percent of these households (53.9 percent) spent their remittances on education, about one in every three spent it on debt payments, and one in every four spent on medical expenses. Meanwhile, there was a quarter-on-quarter increase in the number of OFW households that indicated setting aside part of their remittances for savings (from 15.7 percent to 19.8 percent).

About the Survey

The Q3 2007 CES was conducted during the period 2-27 July 2007 with a sample size of 5,093 households, broken down into 2,558 households (50.2 percent) in NCR and 2,535 households (49.8 percent) in AONCR. 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.

Naia 3 repair to be completed in February

By Mia Gonzalez
Original article at the Business Mirror
http://www.businessmirror.com.ph/0907&082007/nation06.html

REPAIR works on the Ninoy Aquino International Airport Terminal 3 (Naia 3) are expected to be completed in February 2008, Manila International Airport Authority general manager Alfonso Cusi said on Thursday.

Cusi told reporters that the Naia 3 cannot be opened this year because of technical issues that have to be resolved to ensure the safety of its users.

“The timeline [for completion and remediation] is February 2008,” Cusi said, but declined to specify the target opening of the long-awaited facility. He said that repairs on Naia 3, which began in August, are expected to last for six months.

Cusi also said that Miaa consultants and representatives from Naia 3 builder Takenaka Corp. are discussing the extent of repairs to be made on the airport, and will submit their technical assessment on September 15.

Cusi said that while only 2 percent of the airport remains to be completed, there are remediation works on structural defects that have to be carried out.

He said there is no chance of a soft opening of Naia 3 this year because “safety is our primary concern.”

“We have to make sure that all the safety issues are addressed first before we take any initiative. The whole terminal will be at risk if we don’t rectify the defect ... [It will] not [be] this year because we have to consider the safety issue,” he said.

On the move of Fraport AG to appeal the decision of the International Center for the Settlement of Investment Disputes (Icsid) in Washington, which had dismissed its $425-million claims from the Philippine government for the construction of Naia 3, Cusi said the government is confident that the decision would be upheld.

“We are very confident that we have proof. We already won the case and we got favorable judgment,” he said.

Fraport’s claim is based on the government’s alleged violation of the Philippine-German Treaty on the Promotion and Reciprocal Protection of Investments, which the Icsid decision contradicted.

He said Fraport’s move to appeal the ruling is “part of legal procedures.”

Borrow

FIRST PERSON
By Alex Magno
Original article at the Philippine Star
http://www.philstar.com/index.php?Opinion&p=49&type=2&sec=25&aid=20070907164

The Wall Street Journal featured a flattering front-page story about the Philippines’ dramatic economic turnaround in its August 31 issue. The story confronts the usual characterization of the country as “the perpetual sick man of Asia” with an upbeat examination of our “unexpected recovery.”

The front-pager was illustrated with three particularly important graphs. The first one showed central government revenues as percentage of GDP exceeding the critical 15% threshold at the close of 2006. The second one showed the strong rebound in the exchange value of the peso through most of 2006 and the first half of 2007, until global financial volatility took its toll. The third bar graph showed the steady upward creep of our foreign currency reserves at it moved closer to the $24 billion level.

The third graph is a little obsolete. The latest word from our monetary authorities is that our foreign currency reserves could actually hit $30 billion this year, way above projection.

We already know the latest numbers regarding our roaring GDP. The already startling 6.9% growth in the first quarter was closely reviewed — resulting in an upward adjustment to 7.1%. In the second quarter, we posted a breathtaking 7.5% growth rate.

The response of our economic managers to the unexpected surge in our economy is prudent, to say the least. The original year-end growth target of 6.1% will be maintained.

While our stock market, which responds to short-term stimulus, reflected the anxieties over the subprime mortgage crisis in the US, the strategic indicators tell us that optimism in the accumulating strength of the Philippine economy is the more appropriate disposition.

Which brings us to the matter of the outstanding national debt, which is always clouded with superstition, ignorance and orthodoxy.

To this day, there are organized groups demanding that we renounce our national debt. If, perchance, that stupid proposition gains any political ground, the entire equation of economic dynamics we worked so hard to compose will unravel in a matter of hours.

But set aside that truly outlying “freedom from debt” proposition and look at the other orthodoxies that might enjoy a broader audience and seem relatively sane. The most important of these is the disposition that we should not borrow more.

There are times when that disposition is the correct one to take. These are times when interest rates are high and our economic growth low. During such unhappy times, an additional debt service will take its toll on government’s ability to fund social services and build domestic infrastructure.

Today, however, we find ourselves in a different season. Interest rates are low. Our economic growth is surging. The peso is stronger and therefore the peso value of our external debt is lesser.

As a means to rein in the peso’s advance, we have actually prepaid some of our obligations. When correctly timed, and when we do this to replace costlier debt with cheaper debt, that is not a wrong thing to do.

In the proposed 2008 budget, government allots P624 billion for debt service. Of that amount, less than half (P295.8B) goes to interest payment and the major portion goes to paying down the principal. That is a very good debt service profile.

In addition, our debt service next year, as a percentage of our GDP goes down to 8.6% from the 9.3% of GDP programmed for this year. If the peso strengthens and the GDP grows faster than anticipated, that will even be a better picture.

The lower our debt service is as a percentage of our GDP, the more we can bargain for better rates. And so as our economic performance gains momentum, we can continue transfusing expensive debt with cheaper debt.

Which brings up this truly heretical question: Since the nature of the game is for our economic growth to continue outpacing our debt, might it be wise to borrow some more in order to escalate our growth at a rate higher than any increase in debt service? What is important is to ensure the expansion of our economy is significantly faster than the expansion of our debt.

The thought came up as I read through the summary of a paper presented by a bunch of intrepid economists from the UAP. The paper argued that we might have reached a critical threshold in the heroic effort to bring down the inflation rate, now running at under 3%.

There is an underside to low inflation as basic economics teaches us: that is low growth. While a low inflation rate keeps the purchasing power of wage-earners from eroding, at a certain point the effort to hold down inflation could imply foregoing opportunities in creating more employment. Preventing erosion of purchasing power means nothing to those who are, in the first place, unemployed.

The NSO reports that the inflation rate for the month of August was only 2.4%. That happens despite a drought that has brought about scarcity in the number of agricultural products. During this month, crude prices also rose. The peso weakened slightly. And our economic growth roared.

This might sound heretical to the community of fiscal conservatives I am identified with: that inflation rate is a bit too low. We could actually be throttling our actual growth potential.

Low inflation coinciding with moderately high GDP growth is any economic manager’s dream. It is easy to be content with this condition. But should we?

I think we should pull in Joey Salceda from the boondocks for a minute and ask him to talk to us again about achieving 8% or even 9% growth. There might be some amount of opportunity costs out there we have not thought about hard enough.

The legal dimensions of a scandalous contract

By Josefina T. Lichauco, Former DOTC secretary
Original article at the Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070907187

(First of two parts)

These past few weeks have been replete with horror stories and very valid concerns about the now infamous National Broadband Network (NBN)/ZTE contract. This may not even exist, inasmuch as, in spite of the formal written requests for a copy of the contract and the loan agreement – if they indeed do exist because DOTC officials have announced successively that they do – no copy has been sent, seen, touched or even smelled.

I do not intend to write about any of the scandalous exposés, but, as a former DOTC secretary and undersecretary for many years in this particular infrastructure agency – 19 years to be exact – I feel a compelling urge to write about the violations of law and the legal processes and procedures from the initiation of the conceptualization of the project until its execution, being familiar with them.

It was during my time as Usec for Communications when RA 7925 was initiated and passed in 1995; so with RA 8792 (E-Commerce Act) of 2000. We did give our comments on both drafts and did some coordination with the people responsible for their passage. This article of mine will be divided into “Violations of Laws” and “Violations of Standard Procedures.”

I. Violation of Laws: a) the specific mandates of demonopolization, liberalization and privatization found in RA 7925 are intended to be followed, not violated! One of the fundamental rationales for the enactment of this law was not only the heavy burden of obsolescence which the government sector can certainly not afford to suffer, especially as regards the extremely rapid pace of technology. The telecom private sector, the “telcos” as I fondly call them since they started their operations during my incumbency at the DOTC, are in business for profit, bearing in mind, I hope, that their business as a telco is a public service.

After the demonopolization and liberalization efforts of government which really started in 1987 through Department Order 87-188, the telecom private sector has become the most profitable sector in the country today, with Smart, Globe and PLDT earning huge profits surpassing, from the point of view of net income, even the members of the banking, manufacturing, etc. sectors. Aside from this are the operation and maintenance expenses, should government operate a network which can come up to very high figures.

b) The E-Commerce Act of 2000 (RA 8792) and its IRRs (Implementing Rules and Regulations) were blatantly violated. DOTC Asec Lorenzo Formoso, during a TV interview where I was also an interviewee, pronounced that they are only following the provisions of Sections 40 and 41 of the IRRs of the E-Commerce Act. This is not true! Its falsity lies in the fact that the “Declaration of Policy” at the beginning precisely of the IRRs, section 1, Part I, demolishes his legal basis. This “Declaration of Policy” precisely provides that “The State recognizes the vital role of information and communications technology (ICT) in nation-building…and the primary responsibility of the private sector in contributing investments and services in telecommunications and information technology; …and the need to marshal, organize and deploy national information infrastructures, comprising both telecommunications networks and strategic information services, including their interconnection to the global information networks, with the necessary and appropriate legal, financial, diplomatic and technical framework, systems and facilities.”

It is so clear and specific that it is private sector investments that have to be involved in ICT development, expansion and upgrade. Enacted in 1995, RA 7925 is the basic law governing telecom development in our country, and unless an amendatory or abolishing law is passed, it remains firmly in our statute books. When the IRRs provided in its section 40 for an electronic online system to be established by government, this provision should have been taken in light of its very own Section 1, Part I, Declaration of Policy. The “electronic online network” under section 40 is supposed to be undertaken through the telcos like Globe now offering broadband services. And PLDT will be ready with its New Generation Network (NGN) by mid-2008.

It is such a ridiculous assertion by the DOTC to use sections 40 and 41 of the IRRs for their legal basis in order to be able to implement what, to my mind, and that of a great many others, is a scandalous and shameless contract with the Chinese firm ZTE. If the DOTC intent is to consider the IRRs as law, it is important for them to know that the IRRs’ Declaration of Policy was copied verbatim from the E-Commerce Act of 2000 (RA 8792).

And if they don’t believe in the predominance of the Declaration of Policy in the IRRs, the law is there, to let them know that they have in truth and in fact, committed another violation of law, which is the E-Commerce Act.

c.) The fundamental law of the land, which we all know is the Constitution of the Philippines, provides in its Section 7, Art. III Bill of Rights: “The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.”

This is a fundamental right of every Filipino and any limitations to this right can only be done through the enactment of a law.

Why is the DOTC not complying with the formal requests for a copy of the contract? DOTC Secretary Leandro Mendoza announced, in fact, a couple of weeks ago that the DOTC had successfully “reconstituted the contract,” since there were no copies available, no computer copies, or any kinds of copies whatsoever, so that it had to be reconstituted. The announcement that was given was, in very precise terms of the DOTC secretary: “The contract has been reconstituted and re-signed.” That was loud and clear. Unfortunately, up to this writing, no copies were made available.

Is it because this announcement was premature, because the loan agreement had not yet been signed? But before the loan agreement can be signed, the Constitution provides under its section 21, Article 12, that: “Foreign loans may be incurred in accordance with law and the regulation of the monetary authority. Information on foreign loans obtained or guaranteed by the Government shall be made available to the public.” In the following section, it is provided that, “Acts which circumvent or negate any of the provisions of this Article shall be considered inimical to the national interest and subject to criminal and civil sanctions as may be provided by law.”

Having announced that the loan agreement has been signed, where indeed is a copy of it? The public is entitled to “information on foreign loans.” The citizen is entitled to copies of both the contract documents and the loan agreement. Why has not the DOTC recognized this basic right of the citizen? For these violations, criminal and civil sanctions may accrue. Does the DOTC know this? Is the sequential order of the actions being arranged in a studied premeditated manner, so that the Monetary Board approval will come first, followed by the Loan Agreement, and then finally the contract? Remember that the Monetary Board has not approved the loan.

(To be continued Monday)

Friday, 7 September 2007

Economic optimism spreading in the Philippines

By Carlos H. Conde
Full article at the International Herald Tribune
http://www.iht.com/articles/2007/09/07/business/philecon.php
Published: September 7, 2007

Economy - and optimism - on the rise in Philippines

A year ago, Bernadette Sembrano took a gamble.

Using her savings and some money borrowed from the bank, she bought a piece of land in a middle-class suburb here and built two rows of townhouses on it.

She intended to sell the units to overseas Filipino workers, the main drivers of a property boom in this island nation of 85 million. But so far she has only found one buyer for the eight units.

"I am such an optimist," said Sembrano, who works days as a television journalist.

Her optimism is widespread in the Philippines these days, where the government last week reported that the economy grew at an annual rate of 7.5 percent in the second quarter, the fastest rate in 20 years. It is a remarkable event for a country plagued by political scandals and military mutinies - two perennial problems that have prevented the country from emerging from an economic rut.

Stronger economic growth is already changing the lives of many ordinary citizens, who have new jobs and see bridges and roads springing up.

There are doubts about the true vigor of the economy - related to increased government spending ahead of an election and the sustainability of fiscal overhauls.

And, like elsewhere in Southeast Asia, the Philippines is vulnerable to a possible slowdown in the U.S. economy if problems in the housing market begin to spill over into other sectors.

But for a country that has seen so much turmoil and poverty since the 1970s, the Philippines' recent economic resurgence, however fragile, has nevertheless been a welcome surprise to economists.

President Gloria Macapagal Arroyo, a U.S.-educated economist, has taken credit for much of this, having implemented measures - she imposed higher taxes and improved revenue collections, to name two - that her political opponents and critics relentlessly questioned and opposed.

"While our economy has reached a new level of maturity and stability with one of the strongest macroeconomic fundamentals in two decades, we should not rest," Arroyo said after the release of the latest growth figures. "We're the only administration that has not experienced negative growth in any quarter. "

One person benefiting is Alisa Lugar-Escanlar, 31, who quit her job as a restaurant manager early this year and applied as a call-center agent at eTelecare Global Solutions, one of the country's largest call-center companies.

She is happily riding out a boom in the Philippines' growing services sector, which makes up half the economy and grew 8.4 percent in the second quarter.

Outsourcing services are transforming the lives of thousands of Filipinos in ways not seen in the past three decades.

Call centers have been credited with reducing the number of unemployed and creating a new class of moneyed, mostly young Filipinos. The Asian Development Bank estimated that 11 percent of those entering the labor force up to 2010 would be hired by call centers.

"I didn't want to work in a call center at first but I tried it and realized that I liked it better than my old job," Escanlar said. Her life, she said, has been much better since then because she and her husband are now able to save money and buy more.

One of the most visible areas of growth is public construction, which grew at an annual rate of 39.6 percent in the second quarter. New bridges and roads are everywhere, particularly in the capital.

Although the government admitted that the rise in public infrastructure spending is linked to election spending in May, Arroyo emphasized last week that funding for infrastructure was "in the front line in our campaign to reduce poverty."

Such spending could continue, said Luz Lorenzo, an economist at ATR Kim Eng Securities in Manila. "Who is doing the spending? The government," Lorenzo said. "Will it stop? No. Do they need to borrow money? No, because most of these are domestically financed."

The optimism has also given a lift to the stock market, attracting ordinary individual investors for the first time.

Phillip Hagedorn, president of the Mutual Fund Management Company of the Philippines, called the increase in retail investors "unprecedented," which he said indicated a growing confidence in the market among Filipinos.

The benchmark stock index in the Philippines is up 11 percent so far this year, compared to a 23 percent gain for Vietnam and a 23 percent rise for Thailand. China's CSI 300 index is up 164 percent this year.

Arroyo said last week that the challenge now is to ensure that this growth trickles down to the poorest Filipinos, many of whom are skeptical about the government's pronouncements of development.

VP de Castro detractors risking their own careers

Political pot made to boil prematurely
BIG DEAL
By Dan Mariano
Original article at the Manila Times
http://www.manilatimes.net/national/2007/sept/05/yehey/opinion/20070905opi2.html

Last week this corner e­choed the concern of many quarters that the 2010 political pot is being made to boil prematurely. There were, at least, two dead giveaways: the revival of the “Hello, Garci” controversy and the hatchet job on Vice-President Noli de Castro, viewed by many as a likely successor to President Arroyo.

With impeachment out of the question, an objective of the rehashing of issues against Mrs. Arroyo is to diminish the value of her endorsement of her preferred successor. The hatchet job on de Castro is designed to take him out of the running.

Whoever are behind this two-pronged assault need to reassess their battle plan; it could blow up in their faces.

Conventional wisdom has it that at this juncture of a sitting president’s term, aspirants to the highest office of the land should be focusing on their own official performance. In 2010 they will have to present their accomplishment report. Now is the time for them to work on a glowing roster of achievements. Demolishing their strongest rivals has to be triggered just before the official campaign period commences.

Why then have de Castro’s adversaries launched their demolition job this early? Could it be that two and a half years away from the actual election they are already gripped by panic? Their fear is entirely understandable, however.

For the most part, de Castro has shied away from the media spotlight, virtually dropping out of the political radar screen. Nonetheless, he has been steadily earning a lot of respect for the work he has done in his assigned task.

The President named de Castro the government’s “housing czar” following the 2004 election. When the appointment was announced, his detractors were reportedly jubilant. They saw the Veep’s appointment as the proverbial rope with which he was supposed to hang himself. How wrong that projection has proved to be.

Three years after he was named housing boss, de Castro has not only shown that he is up to the challenge; he has also done things an ordinary appointive official would not have dared do.

Take, for instance, the massive relocation of some 17,000 squatter families from the NorthRail project site. For years relocation along the railway from Caloocan City to Malolos, Bulacan, had encountered popular resistance—not to mention political inertia.

The squatter problem actually became a convenient excuse for lengthy delays in the NorthRail project—until de Castro came into the picture.

I do not know what de Castro did and how he did it. I am not a member of his pep squad and will not trumpet his feats. Yet, his accomplishment is far too visible to ignore.

The squatter—OK, “informal settler”—colonies at North­Rail’s project site and route are no longer there. Undeniably, de Castro paved the way for the commencement of the long-delayed project.

For this alone the anti-de Castro demolition squads have reason to press the panic button this early.

Evidently, de Castro took his housing assignment—and not just the NorthRail project—seriously. After admitting he needed time to learn the ropes, he immediately immersed himself in the job and proved to be a quick study. Now, despite the absence of hoopla, the housing sector has become a sunshine industry.

His putative rivals in 2010 are well aware of this—thus, the premature hatchet job.

The problem with trying to smear de Castro’s reputation at this point is that the effort might just result in what is called the “vaccine effect.”

Remember what Dr. Jonas Salk did? The scientist experimented with injections of weak viruses into otherwise healthy subjects. The result: The subjects developed the ability to fight off diseases even in their most virulent form.

At this stage in the 2010 presidential derby, a campaign to demolish someone like de Castro is, at best, the political equivalent of a weak virus. If the detractors insist on this strategy, they could end up immunizing him from further attacks.

Rather than engage in anonymous calumny, de Cas­tro’s rivals would be better off expending their resources on trying to match—or even surpass—the Vice-President’s accomplishments.

It is much too early for them to be smearing reputations, whether the Vice-President’s or anybody else’s.

VP de Castro makes the Northrail-Southrail project possible

An example of good governance
By Alvin Capino
Original article at the Manila Standard Today
http://www.manilastandardtoday.com/?page=alvinCapino_sept7_2007

There are two major infrastructure projects that many people hope would come to full fruition during the incumbency of President Gloria Macapagal Arroyo. The first is the long-derailed (pun intended) Northrail project. The second is the interconnection between the North Luzon Expressway and the South Luzon tollways.

The Northrail project has been trying to get off the ground since the administration of former President Fidel Ramos. I have personally seen the blueprint and concept of that project. And while many only see its downside, it is clear to me that the project is good, in fact crucial, for both Metro Manila and Central Luzon.

It will transport goods and people faster and more comfortably. It will facilitate the transfer of most of the international flights from the Ninoy Aquino International Airport to the Diosdado Macapagal International Airport at Clark.

And where people and goods travel fast, so does progress come at a similar pace.

There is, however, some sad news and good news about this project. The sad news is that the public servant who tried so hard to get the project off the ground passed away recently. It is sad that my friend Jose “Jun” Cortez did not live long enough to see the Northrail vision become a reality. His untimely demise reminds us of Moses, who died without entering the Promised Land.

The good news is that Cortez passed away knowing that what is needed to get the project moving has finally been put in place. Earlier, the Housing and Urban Development Coordinating Council under Vice President Noli de Castro succeeded in doing what had only been attempted in the past—the relocation of close to 17,000 families.

The relocation was a vital component of the project. Without the clearing of the site for the route, stations and depot, there would be no Northrail project to speak of. Following De Castro’s success, the vision for the vital infrastructure is one step closer to realization.

Our many conversations both with the late Cortez and other persons involved in the Northrail project helped us realize the gargantuan magnitude of the task of resettling people—especially if you are talking of nearly 20,000 families. Never mind the cost involved. The more difficult aspect of the task is convincing them to see the bigger picture, and in so doing helping them appreciate the importance of a right-of-way for the rail line.

Dealing with grandstanding politicians who tried to project themselves as protector of the informal dwellers has also been a problem. But De Castro was able to deal with them with a display of political will seldom seen in our politicians.

On this, the value of President Arroyo’s appointment of the vice president as housing czar has come to the fore. Much of the success with the 17,000 families can be traced to the vice president’s passion for dialog with the masa, a talent honed by years of public service via the broadcast medium.

De Castro’s success in the masa dialogs provides good insights on how to win the hearts of ordinary Filipinos. While De Castro is remembered for hard-hitting commentaries during his high-profile AM radio days, the Northrail people say it is his listening skills that won the masa over.

The common folks don’t like being preached to. De Castro does not come to preach, he comes to listen, I am told. There are instances when the vice president takes a hard stance and even scolds crowds. But because he has already listened, the common folk believe De Castro has earned the right to speak.

We are informed that the vice president is putting the same formula to work in the effort to clear the path for the road network that will link the North and South expressways. The project will allow transporters of goods from Northern Luzon to the southern provinces to bypass the heart of the metropolis. In short, the link will decongest Metro Manila.

The problem is facing the same challenge: Relocating those living along the project’s right-of-way. The good news is that De Castro has begun dialogs and appears to be winning initial rounds.

Just recently, De Castro got a commitment from a landowner for a prospective purchase of the latter’s property at a much lower price. The commitment means it is possible for those affected by the North-South expressway link to be relocated within the metropolis rather than in the provincial cites of HUDCC. That would hasten the relocation and, ergo, the project.

I am not calling attention to De Castro’s successes in his urban renewal and infrastructure support roles to drumbeat his feat. No, there are more than enough people willing and ready to do that for him. But it’s good to note his accomplishments in the hope that his formula could be followed by other public servants, especially by some more recent appointees to the President’s Cabinet.

The formula is simple: Listening instead of preaching, exhibiting simplicity and humility instead of arrogance and displaying political will instead of pompous publicity.

The feat is proving to be costly for De Castro. His successes have begun to exact a stiff political price. I heard from reliable sources that the demolition job on the vice president will be escalated to neutralize him this early and eliminate him from the 2010 presidential race. It appears some quarters who have disdain for the vice president are not sparing resources in a bid to cripple him. All because he is perceived as a political threat.

It’s hard to blame those behind some of the presidentiables from feeling this way. Any person who is at home with the Filipino masa and who has their trust is definitely a threat. And any person like the vice president who can convince them to give up their homes and relocate for the sake of an infrastructure project that will benefit others is an even greater threat.

Unfortunately, the hatchet job will not focus on the vice president’s performance. Apparently, the designers of the smear campaign believe they cannot demolish him on the basis of the quality of his job. They will center on his person and on those closest to him.

That’s an ugly demolition strategy. But that’s Philippine politics for you.

As they say, all is fair in love and politics. And the vice president must have seen that truth a long time ago.

Scrapping $329-M ZTE deal may strain RP-China ties - PCCI

CHERYL ARCIBAL
Full report at GMANews.TV
http://www.gmanews.tv/story/59511/Scrapping-329-M-ZTE-deal-may-strain-RP-China-ties---PCCI

The Philippine Chamber of Commerce and Industry and the Philippine Exporters Confederation on Friday cautioned the government from scrapping the controversial $329-million national broadband deal with the Chinese company ZTE Corp. of China, saying such a move may strain trade ties between the Philippines and China.

“To scrap the deal is a little bit premature... China has already said that it is difficult to deal with the Philippines," Donald Dee, PCCI chairman told GMANews.TV.

Dee said this in reaction to a paid advertisement put out by influential business groups Makati Business Club, Management Association of the Philippines, Financial Executive Institute of the Philippines, Foundation for Economic Freedom Inc., and Action for Economic Returns asking the government to "rescind" the deal.

...


"That (rescinding the contract) would be unfair to all those people accused because they would be denied the venue to clear their names and air their side on the matter," Dee said.

He added that nobody really knew for sure what was on the deal and the technical specifications of the national broadband that ZTE would be provide to government agencies.

In a separate interview, Sergio Ortiz-Luis, Philexport president, echoed Dee's sentiments and said that calling for the nullification of the deal would be rash. Instead, Ortiz-Luis urged the government to come clean about the details of the contract.

“Let the government show the details of the contract. But calling for its nullification is quite rash considering that we do not know what is it about," Ortiz-Luis said.

Arroyo: China is RP friend but not 'in place' of US

By Nadia Trinidad
Original report at ABS-CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryId=91477

President Arroyo on Friday extolled the Philippines' relations with emerging supereconomy China, while making sure she doesn't hurt the feelings of her superpower ally, the United States.

Interviewed on the sidelines of the APEC (Asia-Pacific Economic cooperation) summit in Sydney, Australia, Mrs. Arroyo described China as a friend, and even "a very good big brother" to her country.

Arroyo however said "it's not necessarily 'in place' of the United States" as both countries have their own unique relationship with the Philippines.

"There's a role for China, there's a role for the US," said Arroyo.

She further explained that "while the US is the largest economy in the world, still remains so, China on the other hand is the fastest growing economy in the world. So they have their own unique characteristics. We welcome China's growth and we feel that China has been quite conscious of its responsibility on the world stage and it's been a very good big brother to us in the region, as America has been a very good ally also especially for the Philippines."

While being a staunch supporter of the US for decades now, the Philippines has strengthened its trade relations with China -- a country that has increasingly challenged the US for dominance on the world stage.

The Philippine government has signed multimillion dollar deals with China, among them, the controversial National Broadband Network (NBN) deal with ZTE Corporation which the Department of Transportation and Communication chose over the US defense contractor Arescom Inc.

In Manila, US Ambassador Kristie Kenney have since spoken against the NBN deal with ZTE, which the Arroyo administration stands pat on.

End-August GIR Surpasses the US$30 Billion Mark

Bangko Sentral ng Pilipinas
Media Release
http://www.bsp.gov.ph/publications/media.asp?id=1644
09.07.2007
Click here to view table.

The country’s gross international reserves (GIR) reached an all-time high of US$30.3 billion as of end-August 2007. This level is US$2.3 billion higher than the end-July 2007 level of US$28.0 billion. Sustained foreign exchange inflows enabled the Bangko Sentral (BSP) to build up its reserves level while at the same time service its debt and those of the National Government. Receipts of income from investments abroad also contributed to the increase in the GIR level.

In terms of reserve adequacy, the current GIR level can cover 5.6 months of imports of goods and payments of services and income. This level is also equivalent to 5.9 times the country’s short-term external debt based on original maturity and 3.2 times based on residual maturity. 1

Net international reserves (NIR) level, including revaluation of reserve assets and reserve-related liabilities, stood at US$30.3 billion from the end-July 2007 level of US$28.0 billion. NIR refers to the difference between the BSP’s GIR and total short-term liabilities.

---------

1 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.

Thursday, 6 September 2007

Engineering battalion off to Basilan

AFP
Full report at BusinessWorld Online
http://www.bworldonline.com/BW090607/content.php?id=073

THE GOVERNMENT yesterday dispatched a military engineering battalion to the war-ravaged southern island-province of Basilan, where thousands have been displaced by an ongoing offensive against Islamic militants.

The group, composed of more than 200 Navy and Air Force combat engineers will "conduct a full-scale development program to rebuild and rehabilitate" infrastructure on the island, said Navy chief Vice-Admiral Rogelio Calunsag.

The group will build a road along the coast of the rugged island, schools, buildings and clean water systems, he told the send-off ceremony. Officials said the group would not be actively engaged in fighting, but could retaliate if attacked by Abu Sayyaf militants.

The population control fallacy was debunked 35 years ago

AS I WRECK THIS CHAIR
By William M. Esposo
Original article at the Philippine Star
http://www.philstar.com/index.php?Opinion&p=49&type=2&sec=25&aid=20070905149

On March 22, 1972, Ernesto Macatuno of the pre-Martial Law Sunday Times Magazine featured the arguments of the eminent Professor Emmanuel Q. Yap (then secretary-general of the Asian Development Center and head senior member of the Congressional Economic Planning Office) against population control as a means of curbing poverty.

In 1972, Population Control was already a burning issue even when there were only 37 million Filipino mouths to feed and the Philippines was still a leading economy in Asia.

Following are excerpts from that article as these views relate to specific aspects of the Population Control issue.

Roots of the population control fallacy


“This is a favorite line of the World Bank. Its president, Robert McNamara, has been telling us Asian nations that we are poor and will always be poor and will become even poorer because our population continues to grow at too fast a rate.”

“I find it obnoxious, this interference of the state on an individual’s sacred right. While those who advocate family planning say that they work on persuasion, and that nobody is forced to submit to the methods of birth control they teach, I say that there is a very thin line dividing persuasion and compulsion.”

Enough resources to meet the needs

“The Philippines has enough natural resources and the technological know-how and the intelligent people to support a population twice and even thrice the present one. At 37 million I consider the Philippines still under populated.”

“It is true that the great masses of the Filipino people are poor, very poor. But this is not because there are too many of them and that there are too few resources, but that the resources and the technological know-how are used for and are controlled by only a few Filipinos and foreigners.”

Immorality of population control

“In other words, the majority of Filipinos are being robbed of their right to use and enjoy and live by the country’s resources and technological know-how. And here come these proponents of family planning now telling them that it is because they produce too many babies. These poor families can support more children if only they are not deprived of the use and enjoyment of the country’s resources.”

The economy, not population, should adjust

“I say that the economy must be adjusted to the people, not the people to the economy. What we need to do is not to curb our population growth, but to rationalize our economy, meaning that we must develop an economy that is for, of and by the people. What we have at present is a maldistribution of wealth and an irrational use of our resources and industries. What we have is an economy controlled and owned by only a few Filipinos and vested foreign interests.”

“If the administration has developed the ability to effectively exercise the imperatives of Filipino political economics we would not have to succumb to ridiculous impositions and economic policies such as the admonition of Western powers that we must gear our population to our rate of economic growth.”

“We have what it takes.”

Not the solution

“A small population for the Philippines is no guarantee that it will move ahead at a faster rate, that there will be an equitable distribution of wealth or means to acquire wealth with more resources to be divided among a less number of people. We cannot honestly say, for example, that the Philippines was economically and socially better off at the turn of the century, when our population was not even one-third of the present one. The comforts and conveniences around us that we now take for granted were non-existent then. In short, science and technology have improved the quality of life of the Filipinos, and will improve it further with the rationalization of our economy.”

“But now that we are an independent country, we’ll have to stand on our own feet. We cannot continue to rely on US help in the same manner that we should stop allowing these impositions of the United States on our economy.”

* * *

Like your Chair Wrecker, Prof. Yap did not see the logic or wisdom in seeking to eradicate the victims of an inequitable socio-economic-political system rather than to change the system that promotes large scale poverty.

Seven years before this Sunday Times Magazine article was published, the Philippines was recognized as the second best economy in Asia — next only to Japan. We became a laggard not because we made more Filipinos babies but because the wealth of the country was monopolized by the few who control the Philippine economy.

Who is to dictate which Filipino is to be allowed to be born or not? Are we to listen to Robert McNamara the disgraced architect of the Vietnam War?

Who is to say that the Filipino who will not be allowed to be born is going to be the next Apolinario Mabini, the great National Hero who was born to a poor family? Following the logic of population control advocates, Jesus Christ would not have been born.

National Broadband: Neri, PGMA, Lacson and Abalos

By Marvin Sy and Rainier Allan Ronda
Excerpts from Philippine Star report
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070905183

NERI REFUSED OFFER

Neri was reportedly offered P200 million to support the ZTE deal but the NEDA chief refused and reported the bribe attempt to President Arroyo.

Mrs. Arroyo allegedly told Neri not to accept the bribe but sign the ZTE contract anyway.

Neri, who is currently acting chairman of the Commission on Higher Education, neither confirmed nor denied the report that he was offered a P200-million bribe to approve the ZTE contract.

“I cannot comment on that (alleged bribe offer). I cannot prove whatever I say,” Neri told The STAR.

Neri admitted that he approved the NBN project when he was at NEDA.

“We approved the broadband project. But we did not approve the suppliers. The choice of supplier was Department of Transportation and Communication’s choice,” Neri clarified.

He said the NBN project’s concept is good and the controversy is over the choice of the supplier and the project cost.

Ermita said that he recently discussed the ZTE contract with Mendoza, who informed him about the two cases filed.

“If there are complaints pertaining to this particular issue which is a very hot issue, I think the recourse here would be to go to court,” Ermita said.

“If there are people who question the conduct, transparency of any transaction pertaining to any government project, maybe the best thing for them is to come out with evidence and go to court so that this could be resolved with finality,” he added.

MENDOZA TELLS PGMA NOT TO LISTEN TO MEDIA

As far as Mendoza is concerned, Ermita said that the secretary has already discussed the issue with the President.

Mendoza informed the President that she does not have to believe everything that is coming out in the media and that the courts will come out with the truth.

“The President is confident that the Cabinet officials involved are competent in handling it and would come out with a good conclusion,” Ermita said.

He added that Mendoza continues to enjoy the confidence of the President in spite of the allegations being raised against him and the ZTE deal.

************************************

By Federico D. Pascual Jr.
Excerpts from Philippine Star report
http://www.philstar.com/index.php?Opinion&p=49&type=2&sec=25&aid=20070905147

LACSON'S FIGURES

Sen. Panfilo Lacson told the press how kickbacks from the ZTE deal would be apportioned. He said with an omniscient air:

“Inside info has it that $55 million will go to a Comelec official, $68 million was supposed to bankroll the May 14, 2007, mid-term elections, $85 million to the Big One and the Little One, and the overprice balance, to some equally corrupt DoTC officials and the rest of the ‘usual boys.’”

If Lacson cannot identify his sources, can we presume that the figures he cited are the kickbacks he would demand if he were the one pushing the ZTE deal? Are those his going rates for comparable transactions?

ABALOS: RESIGN THEN FIGHT LIKE HELL

I wish Abalos would consider resigning if only to shield the Comelec from the splatter — and fight his tormentors “like hell.” If he is indeed innocent, that is the honorable and effective way to deal with the demolition job on him.

Wednesday, 5 September 2007

China offers to sell military choppers to RP

Reuters
Original report at ABS-CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryID=91226

China has offered to sell eight utility helicopters to the Philippine military as it seeks to replace its Vietnam war-era aircraft, a Philippine Air Force official said on Wednesday.

Defense ties between China and the Philippines -- a longtime US ally -- have grown steadily since 2004 when the two sides launched an annual security dialogue.

Beijing has since donated $2.5 million worth of engineering equipment to the military to help it carry out development projects in areas where communist and Muslim rebels operate.

On Monday it promised another $2 million in military aid.

An Air Force officer, speaking on condition of anonymity, said Beijing had invited them to evaluate its tear-shaped bodied Z9 series utility helicopters manufactured by the Harbin Aircraft Manufacturing Company.

"We have a team of pilots evaluating the Chinese-made Z9 series helicopters in Harbin," an Air Force general, who declined to be named, told Reuters. "We're also looking at another type of aircraft that China was offering to sell at cheaper prices."

The Philippines has 40 helicopters, mostly second-hand, donated by the United States as part of military assistance to fight communist rebels and Islamic militants in the south of the mainly Roman Catholic country.

Manila has set aside P3 billion for new utility helicopters.

The government is also looking at buying up to eight attack helicopters at a cost of P1.2 billion ($25.8 million) and opened bids on Wednesday.

Boeing Co.'s McDonnell Douglas unit, Agusta Westland of Italy and a state-owned company from Poland are bidding for the attack helicopter contract. The winner will be announced within the week.

In January, President Arroyo promised to spend P5 billion on new helicopters to replace the military's ageing fleet of UH-1H and Bell choppers.

Two helicopters have been lost in recent accidents, including one in April when a chopper on a training flight hit a motorcycle in the central Philippines, killing nine people.

PGMA expresses elation over performance of Grade 6 pupils in Nat'l Achievement Test

TUESDAY, SEPTEMBER 4, 2007 | EDUCATION
Full report at Gov.Ph News
http://www.gov.ph/news/?i=18751

President Gloria Macapagal-Arroyo expressed elation today over the outstanding performance of Grade 6 pupils in the National Achievement Test (NAT) conducted nationwide last March.

The NAT results showed that the 1.6 million Grade 6 pupils from about 30,000 public elementary schools obtained a mean percentage score (MPS) of 59.94 percent, or 5.28 percent higher than the 2 percent increase envisioned by the Bureau of Elementary Education (BEE) of the Department of Education (DepEd).

Visibly pleased, the President congratulated DepEd for the fete, especially the children’s impressive showing in mathematics, science and English.

Education Secretary Jesli Lapus announced the good news of the Grade 6 pupils’ performance in the NAT during the round table discussions with the math and science student champions this afternoon at Malacanang’s Heroes Hall.

In his power point presentation, Lapus informed the President that based on the test results, the test-takers notched a 12.36 percent improvement in math, 10.28 percent in science, and 12.45 percent in English subjects compared to last year’s MPS.

He described the 2007 NAT result as a breakthrough in DepEd’s campaign to improve and deliver the quality of education in public schools.

SSS shining example of fight vs corruption – PGMA

TUESDAY, SEPTEMBER 4, 2007 | GOV'T SERVICES
Original report at Gov.Ph News
http://www.gov.ph/news/?i=18749

Iloilo City -- President Gloria Arroyo said the accomplishments of agencies like the Social Security System (SSS) is one shining example of the fact that government has undertaken strong and steady effort to curb graft and corruption through criminal justice, administrative controls and procedural reforms.

The President lauded the performance of the SSS, through a radical reform program, after it faced financial collapse six years ago and its funds were in danger of running dry by 2015.

"Now SSS is back on its feet, stronger and more resilient than ever, with its credibility regained ranking 3rd in the polls of institutions effectively fighting corruption," the president said.

Arroyo also said the reform of SSS was part of the hard-fought economic reform battles through which the Philippine economy has finally broken loose from its historic legacy of lethargy.

She added that with SSS assets having risen to P248 billion and it investment income P15.58 billion in the last six months, the peso is strong enough to allow the government to invest in job creation, better health care and more educational opportunities.

Arroyo further said this financial strength of the SSS has allowed government to increase the SSS pension twice in a year, the latest the 10% effected August this year, which is SSS 50th anniversary gift to the Filipino people.

Added to this is the condoned penalties and restructured housing loans which allowed 6,000 SSS members to keep their homes, as well as enabling the speedy grant of housing loans to calamity victims and various loans for sickness and other personnel emergencies.

Meanwhile, SSS Iloilo Branch Manager Raul Casiano said the SSS financial health is brought about by the fact that SSS fiscal analysts are always focusing on sound investments, quality service and fiscal discipline. (PIA 6)

Myths and lies about the NBN and CEP

Editorial
The Business Mirror
http://www.businessmirror.com.ph/09052007/opinion01.html

FINANCE Secretary Margarito Teves recently told reporters the controversial national broadband network (NBN) and the Cyber Education project (CEP) deals with China are under review. The NBN contract, according to Teves, is far from perfect.

Indeed, the Department of Finance (DOF) should review them thoroughly and with great transparency because, if these deals push through, Filipino taxpayers are going to pay for them in the next 20 years. The amount is huge: $829 million in all, covering $329 million for the NBN and another $500 million for the CEP, for projects with dubious technical and economic merits.

“Far from perfect” is an understatement. Those deals have always been suspicious. They seem to possess most, if not all, indicators of anomaly, and the government has not explained properly the deals to the public. In fact, government agencies like the Department of Transportation and Communications (DOTC), which has been enthusiastically pushing the deal, and the National Economic and Development Authority (Neda), have been obfuscating the issue. The myths and lies thus far spawned are simply adding to the confusion.

At least three major myths or lies are easily detectable.

Myth number 1—DOTC officials say it’s the best deal the government could ever have. It will save the government bureaucracy close to P4 billion in government expenses on communications, including landline calls, cellular-phone calls and Internet connections.

DOTC officials say the NBN and the CEP deals are the most technologically superior vis-à-vis the proposals offered by competitors Filipino-owned Amsterdam Holdings Inc. (AHI) and the American firm Arescom. DOTC officials say AHI’s offer is limited to the urban areas while Arescom is satellite-based, which is supposedly expensive to maintain.

In truth, it was President Arroyo herself who clarified that the bulk of those communications expenses by government are accounted for by mobile- phone calls, and government officials are going to continue using the facilities of the telcos. Recent advertisements by the DOTC indicate that government will even continue relying on existing private Internet providers despite the NBN. The DOTC says that government agencies will save through NBN’s voice-over-internet calls among themselves. That is true, but they are not saying something crucial: the government will still have to pay the telcos when it has to call outside of the NBN backbone.

Right now one would never know the true worth of the NBN, because there are just too many unknowns. From the original amount of only $135 million (Arescom’s offer), the amount has inflated to more than $800 million after the government spun off the CEP from the original NBN component. Besides, both supply deals were not subjected to either a Swiss challenge or international bidding, so there’s no chance of knowing the real score.

And if indeed, a satellite-based technology as proposed by Arescom is obsolete and expensive, why did the government agree for such technology to be used in the other controversial cyber twin, the CEP? The fact is that the DOTC’s technical working group has always proposed a single backbone for both the NBN and CEP and has opposed satellite-based technology.

Myth number 2—The NBN will address the “digital divide.” This is Neda’s line, a dig at the private telcos, which officials say make money by concentrating their operations in the major cities but neglect the countryside. Neda officials say the NBN is a perfect foil to this trend.

In truth, the NBN won’t address the digital divide. The backbone the NBN is going to build will be used solely by government agencies, including about 50 percent of the barangay halls. Yes, barangay halls, but not the barangay residents! Residents in remote barangays will have to wait for the rollout of private telecoms before they can even fantasize about flying in the ethereal realm of the digital world.

And myth number 3—The government needs a dedicated state-owned and controlled Intranet and separate backbone for “national security” reasons. The government, DOTC officials say—and echoed by Neda—has to own and control that backbone so that neither a snoop nor a malevolent hacker could do mayhem.

This argument is really the craziest. The truth is that government has been using private networks for its e-mail and other communications needs since time immemorial, but “security issues” was never a problem. It has never been a problem during the time of President Fidel V. Ramos, a former general who probably appreciates “national security” more than anybody else in the DOTC. Besides, if “national security” were an issue here, then wouldn’t it be riskier to entrust government’s information to a foreign state? Unless they’re saying a foreign government is trusted more than the Filipino private sector.

In our midst today are huge multinationals owning sensitive intellectual property, including patents and trade secrets worth billions of dollars greater than the Philippine GDP. Yet these MNCs never felt compelled to build their own separate fiber-optic backbone. Imagine a situation where everybody lays down fiber-optic cables for “security reasons.” Wouldn’t that be the ultimate “spaghetti sa ibaba,” underneath our soil and the seas?

But private firms do have their own private and secure network, not by having their own separate physical backbone, but by buying capacities from existing privately run backbones—PLDT and Telecphil. For instance, it’s not uncommon for these huge firms to use Telecphil facilities for their Philippine operations while connecting to the PLDT backbone for their fiber-optic link to their headquarters in the US. And security has never been an issue because there are a thousand and one ways of securing them.

If there’s one agency that should be crazy about having a “secure network,” it should be the Department of Interior and the Local Government (DILG). The truth, according to sources from Neda, is that the DILG was never enthusiastic about the project, and this is why Arescom’s proposal, initially offered to the DILG, went nowhere. According to Neda sources, DILG officials thought the backbone was not their priority, thus giving DOTC officials the opportunity to disregard Arescom and endorse ZTE to the Neda Investment Coordination Committee.

The two deals could also be examined on transparency, governance and economic issues—something the professors of the University of the Philippines School of Economics have done extremely well without any reply from either the Neda or DOTC. The DOF should cover all these issues before even thinking of approving the deals.

We dare the DOF to make its own review open to the public.

MRT-LRT1 Extension, Laguindingan and NBSA changes approved

Neda-ICC approves three projects
By Cai U. Ordinario
Original report at the Business Mirror
http://www.businessmirror.com.ph/09052007/economy03.html

THE National Economic and Development Authority (Neda)-Investment Coordination Committee (ICC)-Cabinet Committee (CC) has approved the extension of the LRT Line 1, the Laguindingan Airport and the changes in scope of the Bacolod (Silay) Airport.

The extension of the LRT Line 1 is in line with the plans of the government to purchase the contract for the MRT 3 from the Metro Rail Transit Corp. The Laguindingan Airport project is among the 25 official development assistance projects that have cost overruns, while the Bacolod Airport project has yet to be completed.

Neda documents stated that the P5.98-billion LRT Line 1 North Extension Project will close the MRT-LRT loop by extending Line 1, which ends in Monumento station, to the North Avenue Station of MRT 3. It is proposed by the Light Rail Transit Authority.

The project involves the construction and detailed design of a 5.71-km elevated line with two new intermediate stations, Roosevelt and Balintawak, and a terminal station, the LRT 1 North Avenue station.

“The Balintawak station will provide modal interchange with bus and jeepney services entering Metro Manila from the north via the North Luzon Expressway,” the Neda document read.

The project will be implemented for a period of two years. Construction will begin in 2008 and will be completed by April 2010.

The Neda-ICC-CC, meanwhile, also approved the additional funding requirement for the Laguindingan Airport Development Project worth P2.47 billion. The original cost of the project was P5.39 billion.

“The construction work was originally scheduled to be implemented for four years. The loan validity is from June 19, 1988, to December 19, 2002. With the granting of [the] additional loan, the loan closing date was extended up to January 13, 2008,” the Neda document read.

The additional loan will be extended by the Export Import Bank of Korea through EDCF and Export Credit. Around $8.2 million will be taken from the EDCF, while $62.75 million will come from Export Credit.

The Laguindingan Airport will decongest the Cagayan de Oro Airport, whose 250,000 annual passenger capacity has already been exceeded. It will also cater to commercial flights going to Iligan, whose airport ceased operation in 1992 after Philippine Airlines stopped flights going to the province.

On the other hand, the Neda-ICC-CC approved the one-year extension, additional scope of work and budget increase of the new Bacolod (Silay) Airport Development Project.

“A total of P3.93 billion has been disbursed by the project. [Of this amount], P2.52 billion were from the loan proceeds and P1.4 billion from the GOP counterpart.

The expenditures are mainly used for construction works, payment for consultancy services and VAT, and for local development cost, among others,” the Neda document read.

The Department of Transportation and Communications requested to increase the project cost by 39.8 percent to P1.75 billion from the original P4.4 billion. As of June 2007, the project’s overall physical accomplishment was 98.52 percent. The project should have been completed in January 2007.

The project’s loan validity period is from May 1999 to May 2006 for Phase I and Phase II will be from September 2001 to September 2007. The original implementation schedule for the airport was from 1999 to 2004, and 2000 to 2004 for the Tacloban Airport.

Philippine August annual inflation at 2.4%

Reuters
Original report at ABS-CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryId=91159

Philippine consumer prices rose 2.4 percent in August from a year earlier, at the low end of the central bank's forecast range of 2.3 to 3.2 percent, the statistics office said on Wednesday.

Philippine annual inflation was 2.6 percent in July.

Core inflation, which strips out some volatile food and energy items, reached an annual 2.9 percent in August compared with 3.0 percent in July.

The base year for the data is 2000.

Edsa MRT breakthrough

WHAT HAPPENS WHEN GOVERNMENT, PRIVATE SECTOR AND CONSUMERS UNITE
HIDDEN AGENDA
By Mary Ann Ll. Reyes
Original article at The Philippine Star
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27&aid=2007090495

We have learned some very valuable lessons recently. One, we must not look down upon the potent power of popular advocacy. Second, we must not underestimate the resolve of the Arroyo government to respond favorably to what people are asking for.

It will be recalled that many months ago, several quarter pooh-poohed an urgent crusade launched by a group called “Edsa para sa Masa” to cajole the government into improving the state of the EDSA MRT.

The clamor may have been greeted by a ho-hum attitude by many, and so was the prospect of a positive response from the government. But we were wrong. The clamor by the group seems to have been heard. And Finance Secretary Gary Teves made an announcement over the weekend that answers the call — the buy back and refinancing of the EDSA MRT contract at $865 million no less in an all-in package that is much less than the original slated amount of $1.4 billion.

Teves said the government has decided to buy out the EDSA MRT contract from the private consortium that funded the construction of this infrastructure under the build-lease-transfer scheme during the Ramos administration. The government will have to shell out more than $865 million in an all-in package for the buy out. But this will result in savings of some $380 million for the National Government.

Teves calls the move “refinancing”, meaning the government will borrow cheaper money to pay off the expensive debt. The original obligation costs between 15 to 18 percent per annum — the cost of money at the time that the EDSA MRT was being planned and built. That would have been its cost during the entire 25 years of the contractual obligation between the government and the private consortium.

But things are different today. As we pointed out in our columns on this issue in March of this year, the government can actually borrow from the international financial sector at much, much lower rates — between six to eight percent per annum.

Here is part of what we said in March: “The much, much lower rates are the happy result of the confluence of positive events, among them, the country’s good revenue generation record (particularly in 2006); the strong peso; and the overall good reputation that the country is enjoying, thanks to the bitter pill we swallowed (otherwise called expanded value added tax)”.

We must add to this the international recognition that President Arroyo’s financial and fiscal management policies have recently earned.

It will be recalled that, as early as March this year, we supported the reported plans for the refinancing of the obligation, noting that by pre-paying the obligation, the government can generate savings enough to fund the extension of the line from North Triangle to Monumento.

Kudos to Secretary Teves for the decisiveness and the will to get this solution off the ground.

More important, we take our hats off to President Arroyo whose economic acumen must have pinpointed this window of opportunity. The EDSA MRT moves ensure that she can sustain her infrastructure development program while ridding the government of a major financial burden.

Credit should also go to the private sector groups which currently comprise the EDSA MRT consortium. The prospective government savings of $380 million computed and announced by Secretary Teves also represents the revenues foregone by the consortium.

Our sources say the private sector group could have stood its ground and insisted that all parties abide by what the 25-year contract say. To have done so would have only benefited them. But Secretary Teves’ patience and persistence in convincing the private sector group to support the move has truly paid off.

The secret must have been in President Arroyo’s ability to get all parties to work for “the greater good”. And for a total absence of “greed” that could have spurred a private sector resistance to the idea of giving up $380 million in future revenues after the government shells out the buy-back amount of $865 million no less in an all-in package. This is a rare moment of outstanding government-private sector cooperation that we must savor.

And albeit grudgingly, let’s ask the EDSA para sa Masa group to take a bow, too. Their determined clamor, amid the condescension and suspicion of some, must have done much to push the government to get the buy out/refinancing solution rolling and off the ground.

We do not know how soon the commuter group could get its wish of new trains for EDSA MRT and for the extension of the line to cover the remaining six kilometers of EDSA that is not yet covered by the train service.

But they took the first step. And that step proved to be a giant one. Whichever way one looks at it, the group’s first step brought them closer to their dream — a more comfortable and faster travel along the country’s busiest thoroughfare.

A dream we all share.

Tuesday, 4 September 2007

$3B COSCO hub deal hangs in the balance

Philippines eyes $3B COSCO hub deal
By Rosemarie Francisco, Reuters
Original report at ABS-CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryId=91073

The Philippines is trying to seal a $3 billion deal with China's largest shipping conglomerate, COSCO Group, to develop a logistics hub and other ventures, but will have to fend off rivals Thailand, Malaysia and Indonesia, an official said on Tuesday.

China Ocean Shipping (Group) Co is interested in building a regional hub, a maritime school and an industrial zone and investing in mining in the Philippines, Francis Chua, Manila's special envoy for trade and investment, told Reuters.

But the Southeast Asian country will need to show it can deliver on its promises after nearly $5 billion worth of farm deals with China have so far failed to produce results.

COSCO Group, which earlier announced it was selling its dry-bulk shipping fleet for $4.6 billion to its China COSCO Holdings unit, is looking at several locations on the main Philippine island of Luzon, including two former U.S. naval bases at Sangley Point and Subic.

If COSCO invested in Subic, north of Manila, it may strike a partnership with local port operator ICTSI, Chua said.

COSCO is also considering investing in Bataan or Batangas provinces, both facing the South China Sea, or in Baler, Quezon province, which faces the Pacific Ocean, he said.

COSCO was not immediately available for comment.

Chua said he would meet COSCO group President Wei Jiafu, a former ship captain, in Beijing this month to discuss possible investment, their second meeting in around three months.

"I want to hear from him what is the bottomline here. What would it take for him to say 'yes' immediately?," said Chua, a stockbroker and electronics manufacturer.

"I'll ask him what are the lingering issues. Once he gives me his minimum requests, then I have to go back to the government ... that will be the clincher," he said.

COSCO is also in talks with other Asian countries about a regional hub as it seeks to expand to meet growing requirements from its Asian, U.S. and European clients, said Chua, who became ambassador for Chinese trade in December.

His task was expanded in June to cover other countries.

PATCHY

After years as a regional laggard, the Philippines is revving up again due to strong consumer demand, a booming outsourcing sector and relative political calm.

The economy grew at 7.5 percent in the second quarter, its fastest annual pace in 20 years, but analysts have said the country needs to attract more foreign investment to keep the momentum going.

Net foreign direct investment reached $2.35 billion last year, less than 2 percent of GDP, as bureaucracy, corruption and creaking infrastructure put off investors.

In January, the Philippine government signed 18 farm deals with China and committed to find large parcels of land for Chinese firms to produce crops at lower cost for the Philippines and China.

The biggest of the 18 deals involved a planned $3.8 billion investment by the Fuhua Group in 1 million hectares of high-yielding corn, rice and sorghum.

But Chua said the government was finding it difficult to make available 1 million hectares for lease due to resistance from local farmers and the difficulty of finding large contiguous parcels of land in the archipelago.

"Frankly, it's difficult to locate land here in our country."

PGMA earmarks P8 billion for irrigation, P5 billion for FMRs under 2008 budget

Full report at Gov.Ph News
http://www.gov.ph/news/?i=18746
MONDAY, SEPTEMBER 3, 2007 | PROGRAMS/PROJECTS

PALAYAN CITY, Nueva Ecija – President Gloria Macapagal-Arroyo said here today that the government has earmarked P8 billion for irrigation projects and P5 billion for farm-to-market roads (FMRs) under the national budget for 2008.

She said the P8 billion allocation is enough to irrigate an additional 100,000 hectares of farmlands, while the P5 billion will fund the construction of 3,000 kilometers of farm roads nationwide.

The President helicoptered to Barangay Manggahan, this city this morning to inaugurate the P295-million Aulo Dam.

“Sa 2008, naglaan tayo ng P5 billion para sa mahigit tatlong libong kilometro ng kalsadang bukid. Sa irigasyon naman, P8 billion ang gugugulin, mas mataas ng kalahating bilyon sa badyet ngayong taon. Sandaang libong ektarya ang magkakaroon ng bago o isinaayos na patubig,” she said.

The President added that some P3.4 billion will also be used to rehabilitate existing irrigation projects through the National Irrigation Administration (NIA).

“Hahawakan ng National Irrigation Administration o NIA ang P3.4 billion ng badyet sa irigasyon para sa pagpapaayos ng mga patubig na itinayo natin.”

N. Mindanao investments jump 152%

By Roderick T. de la Cruz
Original article at the Manila Standard
http://www.manilastandardtoday.com/?page=business4_sept4_2007

Fresh investments that flowed into the five provinces of Northern Mindanao jumped 152 percent in the first quarter of 2007 from a year ago, according to the National Economic and Development Authority.

Citing data from the Northern Mindanao Regional Economic Situationer, Neda’s regional office in Cagayan de Oro City reported that investments in Northern Mindanao hit P4.4 billion in the January-March period this year, up from only P1.7 billion during the same period in 2006.

Northern Mindanao consists of the provinces of Bukidnon, Camiguin, Lanao del Norte, Misamis Occidental and Misamis Oriental.

Bukidnon contributed the largest share of P2.7 billion or 62 percent of the region’s total investments during the period, most of them in the areas of infrastructure and services, which included the construction of an additional facility for water distribution.

Misamis Oriental accounted for P858 million or 20 percent of the total investments. Investments in the economic zones in Misamis Oriental comprised 27 percent of the total provincial investments that included the Pilipinas Kao expansion project and the construction of a freezing and storage facility at the Phividec Industrial Estate.

Metals, service and trading sectors brought in the most number of investments in Lanao del Norte, which accounted for 15 percent of the total investments in Region 10.

These included the renovation of a furnace of a metal company, construction and expansion of commercial enterprises, resort facilities, construction and supply distribution centers, cellsite construction and gas refilling stations.

Misamis Occidental cornered 2 percent or P98.8 million of the total investments, most of them in the form of business name registrations in the trading and service sectors. Investments were spent for resort facilities, forest-based distribution centers, real estate and fishing and poultry farms.

‘Super City’ to rise in Bulacan

By Dino Balabo
Tuesday, September 4, 2007

SAN JOSE DEL MONTE, Bulacan – A “super city” will soon rise in one of Bulacan’s most populous areas, following the construction of the $1.2-billion Metro Rail Transit 7 (MRT) in the next two years.

Mayor Eduardo Roquero told The STAR that the “super city” will rise at the 200-hectare former Puyat property in Barangay Tungkong Mangga here where the first inter-modal terminal will be constructed.

The inter-modal terminal will be the last terminal of the 20.7-kilometer MRT-7 line that will start from SM City North EDSA in Quezon City, where the MRT-2 north station is located.

According to Roquero, the super city will have commercial, residential spaces on high-rise buildings similar to that of Eastwood estates in Libis.

“We expect more investments to pour into San Jose del Monte even before the construction for the MRT-7 begins,” he said.

Construction will be handled by the Light Rail Transit Corp. and will start between late 2008 and early 2009. It is expected to be completed by 2010.

Aside from the MRT-7 project, Roquero also said the construction of the Circumferential Road 6 (C-6) is about to start.

The 40-kilometer C-6 project will branch out of the North Luzon Expressway between its Malolos and Marilao segments.

He said at least 20,000 workers will be initially employed by the two mega-infrastructure constructions and stressed that it will be a big boost to the economy of the city with about 500,000 residents.

In preparation for the said mega projects, Roquero said they are preparing for the education of the city’s workforce.

“Initially, we allotted P5 million in our Annual Investment Plan (AIP) for the education of our skilled workers, including masons, and other construction workers,” Roquero said.

He added that they will also offer computer secretarial and janitorial courses to upgrade the skills of their workforce.

San Jose del Monte was converted into a component city of the province through a plebiscite on Sept. 10, 2000.

This year, the city is celebrating its seventh anniversary as a city.

BIR, Customs meet August targets

By Iris C. Gonzalez
Full article at the Philippine Star
http://www.philstar.com/index.php?Business&p=49&type=2&sec=27

The government’s two main revenue generating agencies met their collection targets for August, the second month in a row that goals were reached this year, a sign that government revenues are back on track after a weak first half.

Customs Commissioner Napoleon Morales told reporters yesterday the agency, the country’s second biggest tax collector, hit its target of P20.2 billion in August. “We hit the target,” Morales said.

He said the enhanced efforts by the agency to curb smuggling and boost collections have paid off despite the continued strengthening of the peso against the dollar which lessens the value of import tariff payments received by the Bureau of Customs (BOC).

“Every one peso appreciation results in P2.2 billion in revenue losses for us. Despite this, we estimate that our August collection will be 13 percent over than the same period last year,” Morales said.

In July, the BOC’s collections rose to P20.8 billion, above its P19-billion target and also higher than the P16.4 billion it collected in the same period last year.

The Bureau of Internal Revenue (BIR), which accounts for two-thirds of the government’s tax take, likely met its collection goal of P82 billion for August based on initial data, said an official of the agency who requested anonymity.

“We will achieve the goal according to preliminary figures,” said the BIR official.

BIR collections for July rose to P58.7 billion or 20.1 percent higher than the P48.9 billion recorded in the same period last year.

The preliminary figures from the two tax agencies indicate that government’s revenues are likely back on track in August, similar to July after a disappointing fiscal performance in the first half of the year.

ZTE issues statement on broadband deal

By Paolo Romero
Full article in the Philippine Star
http://www.philstar.com/index.php?Headlines&p=49&type=2&sec=24&aid=20070903190

Officers of ZTE Corp. [has] finally issued a statement to shed light on the NBN contract.

Zhang Shumin, ZTE director of sales, said that since March this year, ZTE’s participation in the proposed broadband project has been subjected to malicious and unjustified attacks by other parties.

“We have been quiet because we know these are all baseless accusations. The time has come, however, to let the public know the truth. There was complete transparency in the proposal, evaluation and approval of ZTE’s application for the Philippines’ NBN contract,” Zhang said.

“I have to clarify here again the fact that ZTE, China’s largest listed telecoms solution provider, is the first proponent for the NBN project contrary to allegations by competitors,” he said.

He said that ZTE submitted its original proposal to the Commission on Information and Telecommunications (CICT) in April 2006, earlier than other applicants, and made a number of iterations to address the multi-dimensional requirements of the government.

CICT eventually endorsed the proposal to the National Economic and Development Authority in September 2006, and after careful evaluation by the Infrastructure Division of NEDA, the proposal was forwarded to the DOTC for assessment.

In March 2007 the ZTE proposal was jointly endorsed by the DOTC and CICT to the NEDA board for review, which the NEDA board approved.

“There was no undue haste in the evaluation of the ZTE proposal. It went through a six-month evaluation from CICT and NEDA, and another four months at the DOTC for final evaluation and comparison to other proposals which, incidentally, were late in submission. The dates our proposals were submitted and endorsed to various government agencies have been officially recorded and are totally verifiable,” Zhang said.

Monday, 3 September 2007

Those amazing Filipina cops

Rob suspect dies in shootout with female cops
Original report at ABS-CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryID=90939

Female officers of the Quezon City Police District shot and killed a robbery suspect who engaged the policewomen in a firefight in Quezon City Monday afternoon, DZMM reported.

Correspondent Kaiser Daquita said the police have yet to identify the suspect who died in the shootout on Kanlaon Street in Barangay Sta. Teresita.

The gunbattle took place after the victim identified only as "Tess," a call center agent, sought police help. Tess said the suspect took her purse at gunpoint after she emerged from a fastfood restaurant.

As the suspect took off, female members of QCPD's General Assignments Section gave chase.

The police said the suspect fired the first shots and forced the policewomen led by Senior Inspector Cherrie Lou Donato to shoot back.

It was learned that the area where the shootout took place is known for its frequent robbery incidents.

Free shuttle services now available all over NAIA

By Tarra Quismundo
Original report at the Inquirer
http://globalnation.inquirer.net/news/news/view_article.php?article_id=86181

MANILA -- Providing safe passage through Manila's airport terminals, the Manila International Airport Authority (MIAA) launched this month free shuttle services for all airport users, including passengers running after connecting flights and employees rushing for time-in.

Coasters have started conveying passengers and airport personnel around the Ninoy Aquino International Airport (NAIA) Terminal 1, the NAIA Centennial Terminal and the Manila Domestic Airport (MDA) for free as part of MIAA's program to provide safety and convenience to all airport users.

The vehicles have been operating 16 hours a day, MIAA said.

"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 MIAA General Manager Alfonso Cusi in a statement.

Free shuttles will be available to passengers and employees who need a ride from NAIA 1 to a local flight at the MDA and back, to and from the old international terminal to Centennial Terminal, and from the Centennial Terminal to the MDA and back.

The Land Transportation Franchising and Regulatory Board (LTFRB) gave the green light to the program, MIAA said.

"We, at the MIAA, are doing this as part of public service to protect passengers and airport workers from holdup men, abusive taxi drivers and operators of colorum vehicles plying the routes connecting NAIA 1 and 2 and the Manila Domestic Airport," said Cusi, in reference to complaints he received.

Earlier, MIAA required all drivers of accredited airport transport firms to get MIAA identification cards to set them apart from non-accredited drivers. The measure was enforced to deter violations and ensure easy identification of chauffeurs in cases of abuse.

Airport officials have been implementing programs to improve passenger service as they aim to achieve, within a year, certification from the ISO (International Organization for Standardization).

MIAA's airport development office recently gathered airport agency chiefs in a two-day seminar on ISO-standard passenger service practices: from initial inspection and check-in to immigration check and final security screening at the departure area, and baggage retrieval and customs check at the arrival area.

RP tax agencies meet August collection targets

Reuters
Original report at ABS-CBN News
http://www.abs-cbnnews.com/storypage.aspx?StoryId=90911

The country's two main tax agencies said Monday they had met their collection targets for August, indicating that government revenues were back on track after a weak first half.

Customs Commissioner Napoleon Morales told reporters that the agency, which is the country's second biggest tax collector, hit its target of P20.2 billion ($435 million) in August.

The Bureau of Internal Revenue (BIR), which accounts for two-thirds of the government's tax take, likely met its collection goal of P82 billion for August based on initial data, said an official of the agency who asked for anonymity.

Third visit from Cosco

Cosco firms up plans for $3-B hub
By Ronnel Domingo
Original report from the Inquirer
http://business.inquirer.net/money/topstories/view_article.php?article_id=86169

A TEAM of experts from Chinese shipping giant China Ocean Shipping Co. will be making a third visit to the country to figure out how to split a $3-billion regional cargo hub between Sangley Point and Subic.

Francis Chua, presidential adviser on China trade and investments, said in an interview that the team had visited twice in July to look over the former US naval bases.

Cosco originally considered building a base at Sangley Point in Cavite, where it would collect shipments from various points in the region, before sending these out to the United States and other destinations in the Pacific.

President Gloria Macapagal-Arroyo has issued an executive order mandating the development of Sangley Point into an international logistics hub.

But Chua said the Cosco team, comprising experts from the group's diverse operations in the region, had seen the advantages of locating in Subic as well. He added Cosco did not want to pass up on either site.

"(My office and Cosco) are working to have this project started promptly," Chua said. "I have reason to believe it could be within the year ... this is a very crucial investment (for both sides)."

In an earlier interview, Chua, who is also honorary president of the Federation of Filipino-Chinese Chambers of Commerce and Industry, said Cosco wanted to build a shipping hub at Sangley Point, because of its nearness to Manila, as well as in Subic, because it offers the best option for eventual expansion of operations.

Chua said that while Cosco was studying Sangley and Subic, local government executives in other provinces across the country also offered alternative sites for the project.

He also said that Cosco was prepared to foot the entire bill for the development of whichever site was chosen, including land reclamation and port construction.

Cosco needs about 50 to 100 hectares on which to build a pier and container yard.

Founded in 1961 as an international shipping carrier in China, Cosco is now a $17-billion corporation that provides services in freight forwarding, shipbuilding, ship repair, terminal operation, trade, financing, real estate and information technology.

Cosco owns and operates a merchant fleet of some 600 vessels, with total carrying capacity of up to 35 million dead-weight tons.

NBN loan under review

FINANCE CHIEF HINTS PROCESS FAR FROM SEALED
By J. Vallecera, M. Gonzalez, B. Fernandez
Full article in the Business Mirror
http://www.businessmirror.com.ph/09032007/headlines01.html

THE fate of the controversial national broadband network (NBN) continues to hang, with the finance chief indicating the $400-million loan facility from the Chinese government that supposedly will finance it was still being processed, and there was still a possibility the contract may be shot down.

As this developed, the chairman of the Senate trade and commerce committee urged the Executive to halt the NBN, noting that, “Contrary to the position of the DoF, it is highly unusual for government to enter into a blanket loan with the China Ex-Im Bank without defining what this loan is for.”

The Palace on Sunday urged critics to stop assailing the project, where the name of Commission on Elections Chairman Benjamin Abalos was dragged because of his acquaintance with the Chinese state firm ZTE—the NBN proponent—and to just await court action on a case filed by opposition congressmen.

...

In an e-mail, Teves said a number of things have yet to happen, including actually identifying the controversial $330-million national broadband network as recipient of a loan agreement also from the Chinese government.

He dropped broad hints of shooting down the project altogether, for instance.

“As part of standard procedure in government-to-government projects like the NBN project, the financing component would have to be approved by the Department of Finance (DOF).

“I believe that it is my responsibility to learn more about this project which will be supported through borrowings,” Teves said.

How long the review and evaluation would take he did not specify, saying only the process could take “several levels of approval before a loan agreement is actually negotiated and executed.”

“We just started with the first step with the signing of a memorandum of understanding (MOU) with the Export and Import Bank of China for the availability of a total $400-million credit facility for the Philippine government,” according to Teves.

He said there was this offer from the government of China for the Philippines to take advantage of a loan agreement: “The projects for financing under this proposed facility have not yet been identified.”

Sen. Mar Roxas urged Teves, however, to reconsider the government’s loan contract with China Export and Import Bank to finance the $330-million ZTE contract, among other big-ticket projects, despite unresolved questions about the controversial broadband project.

In our history, contracts conceived in secret have been the source of anomalies and abuse,” he said, citing contracts involving independent power producers, the Venable agreement, among others.

“Now, we are signing an P81-to-P90-billion loan agreement for a project whose contract we have yet to see, and which obviously was the result of political lobby rather than public interest,” he added.

To finance the total loan amount in the future, he said each Filipino will have to shoulder P920 to P1,023. This is on top of the outstanding debt of the national government of P3.676 trillion as of end-2006, or P45,383 each Filipino.

Roxas said the questionable circumstances surrounding the NBN project send signals that the Philippine government “has not practiced transparency, fairness and good judgment in entering into another foreign loan. Even the loss of the contract documents, and the eventual ‘reconstitution’ of the same, makes the entire transaction highly irregular,” he said

The broadband project is not even a priority project in the minds of the people, he said.

Earlier, a paper by professors of the UP School of Economics, which was first reported on by Business Mirror, said the NBN project flunked all economic arguments, starting with the first question: Whether the State should still set up another cyber backbone when two existing private ones are running well and have much unused capacity. Private business can very well put in the money to increase or improve the existing backbones to suit additional demand from government agencies, without saddling taxpayers with a foreign loan-funded project, the paper argued.

“The Executive branch is imposing on the people another dollar-denominated loan without explaining to them what this loan is for. Worse, we may soon start paying this loan without even seeing the ZTE contract itself. I urge the Finance department to dump the ZTE project and seriously consider not taking the loan,” Roxas said.

But even if the broadband network project were so identified, Teves said he would still seek legal advice from the Department of Justice.

“Even assuming that the NBN project is identified for financing under this facility, given the legal cases currently surrounding this project, we would be seeking the guidance of the Department of Justice on this matter before proceeding further,” he said.

...

Malacañang on Sunday appealed to critics of the government’s deal with ZTE Corp. to allow the courts to weigh the veracity of their claims instead of airing through the media their allegations of irregularities on the project.

In an interview with Palace reporters, Chief Presidential Counsel Sergio Apostol welcomed the statement of Teves, saying this did not say that Comelec chief Abalos had tried to push for the project award to ZTE.

On Teves’s clarification, Apostol said: “That’s good. I think the allegations should stop already pending the related case filed in court. Let the court decide and weigh the evidence.”

...


Apostol also defended Abalos against resignation calls, noting that Teves himself had clarified that Abalos made no attempt to interfere in deliberations on the NBN project, which the DOTC awarded to ZTE.

“This allegation is unfair to him. Calling for his resignation is very unfair. There is no evidence against him, he never interfered, according to Secretary Teves. He just played golf and met these guys but talked nothing about the contract,” Apostol said.

Over the weekend, Teves explained that while Abalos did introduce Teves to some ZTE officials, it is in the context of a processing plant that the Chinese firm wanted to build in Davao, and not the NBN contract.