Friday, 2 November 2007

More firms bid for LRT-MRT loop project

By Rainier Allan Ronda
Original article at The Philippine Star

As many as 20 foreign and local groups have expressed their intent to participate in the public bidding to be held by the Light Rail Transit Authority (LRTA) for the P6.3-billion Metro Rail Transit (MRT)-Light Rail Transit (LRT) interconnection project.

LRTA administrator Melquiades “Mel” Robles expressed satisfaction with the large number of groups wanting to join the bidding.

“We think that it is an indication of a high level of trust by private groups that there will be a level playing field in the bidding process. And we think that their trust is not misplaced,” Robles told The STAR in an interview after he conducted a surprise inspection on the state of security and order at stations of the LRT Lines 1 and 2 yesterday morning.

Robles said the LRTA was taking all available measures to ensure a transparent and fair bidding.

“We really want the most capable entity or joint venture, the best proposal and the best deal for the government,” Robles said.

Among the 20 groups that purchased bid documents are Leighton Contractors, Inc. (Philippines)-A.M. Oreta & Co. joint venture consortium; Marubeni Corp.; Asset Builders Corp.; D. M. Consunji Inc.; Sumitomo Corp.; Romago, Inc.; R-II Builders, Inc.; and Siemens.

It was learned that the 20 groups expressed interest on undertaking one , two or all three of the project’s three packages. Robles said that the bidding process was so far going smoothly.

To ensure transparency during the bidding, Robles earlier raised a plan to invite representatives from civil society groups, the Catholic Bishops Conference of the Philippines, Philippine Contractors Association and Transparency International to observe the process.

The bidding process was started in earnest by the LRTA after it secured the National Economic Development Authority (NEDA) Board’s approval of the project, which involves building three rail stations to connect the MRT rail line at its current North Avenue-EDSA end station in Quezon City to the LRT Line 1’s Monumento, Caloocan station, creating a rail loop between the two rail lines.

On Nov. 28, 2006, President Arroyo directed Transportation and Communications Secretary Leandro Mendoza and Robles to proceed with the construction of the “LRT-MRT loop” after thorough evaluation of several construction options.

Last month, the NEDA Board approved a techno-feasibility study commissioned by the LRTA. Based on the study, the extension project will include the construction of the Balintawak, Roosevelt and North stations, which will be equipped with escalators and elevators.

LRTA said that with the rail loop project, the average daily ridership is set to increase by 66.16 percent or a total of 535,558 passengers from the current average of 322,309 passengers.

Funding for the project will be taken from the debt-paper sale of state-owned National Development Co. (NDC), amounting to P4.6 billion. The remaining P1.67 billion will be obtained through a General Appropriations Act enacted by Congress.

Thursday, 1 November 2007

Justice chief: JPEPA constitutional

Original report at The Manila Times

Acting Justice Secretary Agnes Devanadera is arguing that the Japan-Philippines Economic Partnership Agreement (JPEPA) is constitutional and does not violate provisions of national patrimony.

In a memorandum sent recently to Sen. Miriam Defensor-Santiago, chairman of the Senate Committee on Foreign Relations, Devanadera argued that nothing in the treaty could be construed as allowing the Japanese to own and manage public utilities, educational institutions, mass media outlets and advertising firms.

Retired Supreme Court justice Florentino P. Feliciano, in a memorandum October 5, claimed JPEPA failed to make the necessary reservations that will open up those areas of economic activities to Japanese investors, in violation of the Constitution. The areas are reserved for Filipinos. Feliciano asked the Senate to reject the treaty and return it to the executive department for renegotiation.

In a press statement Wednesday, Devanadera disagreed, arguing the reservation “would not be feasible or necessary …”

Devanadera said JPEPA provides a list of areas where the Philippines is committed to allow the entry of Japanese investors. In sectors not specifically committed, the Philippines is under no obligation to open its doors. Therefore, she added, there is no need to make any reservation, she said in the statement.

To bolster her position, Devanadera called attention to the fact that the treaty is silent on the mass media.

“A perusal of Annex 6 [of JPEPA], shows that under Communications Services, the Philippines did not provide any commitment or obligation relating to radio and television services, [but precisely] by the lack of any commitment, the Philippines retains full leeway to adopt or impose any measure in the present or future,” Devanadera said.

She added that the “Filipino First” policy, which the retired justice claimed to be at risk of being disregarded, remains unimpaired. The statement goes on to say that in any case, the constitutional provision does not mean that the Philippines is isolating itself from the outside world.

The issue has already been decided with finality when the Supreme Court, in Tañada v. Angara, held that the Constitution is not violated by national treatment provisions of the World Trade Organization.

Devanadera said Justice Feliciano himself, in his concurring opinion in Oposa v. Factoran Jr., saw the need for a healthy competition in business. Devanadera cited the retired justice on the issue: “All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign competition and trade practices that are unfair.”

Devanadera also said a mere treaty, like JPEPA, cannot supersede Constitutional provisions.

She said that among members of the Association of Southeast Asian Nations, it is only the Philippines which that has nationality and equity requirements for doing business in the country in its Constitution.

The Philippines does not need to make protection explicit in JPEPA, she said, “given the fact that we follow the doctrine that the Constitution prevails over a treaty.”

Wednesday, 31 October 2007

PGMA hikes cash allowances of public school teachers for purchase of classroom supplies

Original report at Gov.Ph News

In an effort to lessen the burden of public school teachers in the performance of their duties, President Gloria Macapagal-Arroyo has authorized the increase in their cash allowances for the purchase of chalks, erasers, forms, and other classroom supplies and materials from P300 to P500 each per annum.

Under Administrative Order No. 204 which she signed last Oct. 19, the President ordered the Department of Budget and Management to charge the funding support necessary to implement the order against the available savings of the national government.

The AO takes effect immediately.

The President cited in the AO that it is the enunciated policy of the state to provide quality basic education in public schools and support the needs of teachers by providing the environment for them to effectively undertake their functions in the classroom.

She also noted that teachers play an important role in molding their students to become model citizens of the country.

“I hereby order an increase in said cash allowance to lessen the teachers’ burden during actual teaching and enable them to better stir classroom interaction,” she stated in the AO.

RP money supply up 11.4% in September yr/yr



Philippine money supply in September rose 11.4 percent from a year earlier, less than the 14.9 percent rise in August, the central bank said on Wednesday.

September was the fourth month in a row that annual money supply growth came in below 20 percent.

Domestic liquidity growth slowed to an annual 19.4 percent in June -- the first time since November that it fell below 20 percent -- as the central bank mopped up red hot money supply through the use of high-yielding short-term deposit accounts.

Heavy inflows sustain peso rise

Original report at Bloomberg

The Philippine peso rose to a seven-year high as overseas funds bought the currency on optimism the economy will sustain its fastest expansion in almost two decades.

The nation's currency advanced for a second month as nationals overseas send money home before the start of a two-day holiday tomorrow and as the Christmas season approaches.

The peso has risen 3 percent this month, the best-performer of the 10 most-actively traded currencies in Asia excluding Japan, after the central bank deputy governor said the economy may have grown 7 percent in the third quarter.

``We are experiencing very heavy inflows from remittances and also from overseas players,'' said Ricky Cebrero, treasurer at East West Banking Corp. in Manila, who predicts the peso will trade as high as 42.50 per dollar at the end of the year.

The currency advanced 0.4 percent to 43.685 in Manila, according to Tullett Prebon Plc, the world's second-largest inter-dealer broker. The currency is trading at the strongest since July 2000.

New international routes opening in Visayas airports

By Roderick T. dela Cruz
Original report at The Manila Standard

New international routes will be opened to bring foreign tourists from Russia, China and Korea to different destinations in the Visayas over the next two months, according to Tourism Secretary Joseph Durano.

Durano said direct flights between Shanghai in China and Kalibo, the capital town of Aklan province, which has jurisdiction over the world-renowned resort island of Boracay, were expected to begin next month.

He said direct flights between Incheon City, where Korea’s main international airport is located, and Bacolod City, the capital of Negros Occidental province in Western Visayas, would also be mounted.

In December, international flights will be launched between Beijing, the capital city of China and Kalibo, according to the tourism chief.

He said more international flights would also be opened to bring visitors from Russia and China to Cebu, the main gateway in the Visayas.

Early this month, Asian Spirit launched new flights from Macau, China to Sta. Ana, Cagayan, which is being developed as a free port and gaming destination in the northeastern part of Luzon.

Durano said the plan aims to “internationalize our provincial airports” to bring tourists directly to major destinations, without passing Metro Manila.

The Department of Tourism earlier disclosed that a group of Korean investors was building an international airport in Carabao Island in Romblon to transform the island into the next Boracay.

Tuesday, 30 October 2007

Highlights of the BSP Inflation Report for Q3 2007

Media Release
Bangko Sentral

* The inflation environment remained benign in Q3 2007 despite increases in the prices of some commodities and services. The headline inflation rate rose slightly during the period reflecting uptrends in the prices of food, energy and educational services. The year-to-date average inflation rate remained at 2.6 percent, well below the average inflation a year ago and the target range for 2007 which is 4-5 percent. Core or underlying inflation, an indicator of the long-term trend in price pressures, also averaged higher in Q3 at 2.9 percent compared to 2.6 percent in the previous quarter. This, however, was still markedly lower than the 5.2 percent core inflation in the same quarter a year ago.

* Output growth continued to broadly strengthen, with Q2 2007 GDP accelerating to 7.5 percent from the 7.1 percent registered in Q1 2007. On the demand side, GDP growth was boosted by strong household spending, improving capital investments, and robust government consumption. Likewise, other demand indicators, such as land and rental values, residential and office vacancy rates, sales of commercial vehicles and appliances, energy consumption, as well as employment, showed improvements in Q2. On the supply side, the key driver to growth was services, accounting for more than half of total GDP growth. GDP growth was broad-based as other production sectors contributed to the economic expansion, with industry output surging by 8.0 percent and agriculture expanding by 3.9 percent.

* Domestic interest rates in the primary market rose starting in July following the announcement of the higher-than-programmed fiscal deficit for the first semester. Primary market interest rates in Q3, although higher than their levels in Q2, were lower compared to those of the previous year, indicative of continued ample liquidity in the system. Meanwhile, the yield curve shifted downward in Q3 2007 relative to the previous quarter as bond prices recovered after falling in the weeks following 17 August, which was the height of the fallout in the US subprime mortgage sector.

* Domestic financial markets remained resilient and have stabilized in the face of rising global risk aversion due in part to the problems in the US subprime mortgage market. Domestic financial markets have recovered by the end of Q3 from their downturn in the days leading to 17 August, when US equities experienced a sharp downturn due to the US subprime mortgage problem. Investor sentiment improved by the end of Q3 on signs of some recovery in global financial markets by September, better fiscal numbers in Q3, and ample liquidity in the financial system. Sustained foreign exchange inflows helped maintain the firmness of the peso, which still registered an appreciation in Q3 amid the rise in risk aversion in August.

* The global economy continued to grow in Q2, but growth is expected to slow down in the near term. Growth was mainly supported by buoyant economic activity in emerging markets. However, risks to the global economic outlook have increased recently, mainly because of the subprime mortgage problem in the US. Global financial markets have stabilized after the 18 September 2007 Fed meeting, when the target for the federal funds rate was cut by 50 basis points. Subsequently, global equities have recovered and global credit spreads have narrowed. Meanwhile, the risk of rising global inflationary pressures remained due to increasing resource utilization, capacity constraints, and rising global commodity prices.
* Domestic liquidity growth continued to decelerate for the fourth consecutive month in August. M3 growth slowed down to 14.9 percent year-on-year in August from 19.4 percent in June 2007. The growth of domestic liquidity was tempered by the fall in net domestic assets, following the policy measures implemented by the BSP in May.

* The latest baseline forecast indicates a benign inflation outlook over the policy horizon. The inflation forecast over the policy horizon was lower this quarter compared to the previous period. Lower actual inflation, significant deceleration of liquidity growth for four consecutive months, and the firmer peso accounted for the downward revision in the baseline forecast. Favorable supply of food due to normalizing weather conditions and well-anchored inflation expectations also helped explain the subdued inflation environment.

* Risks to the inflation outlook remain, even as they have moderated. The prospect of continued strong capital inflows and the resulting expansion in domestic liquidity continue to pose a risk to the inflation outlook. A resumption of volatility in world oil prices could also pose a threat to inflation. Possible additional wage hikes and increases in utility rates may add pressure to inflation as well. In addition, the uptrend in global non-oil commodity prices could result in higher inflation in 2008.

* However, the risks to the inflation outlook are considered to be manageable. The monetary measures implemented in May have moderated the impact of domestic liquidity on inflation. In addition, a firm peso is expected to moderate the impact of higher world oil and global food prices on domestic inflation going forward. The marked improvement in investments during the quarter would also help mitigate any potential overheating in the economy as it would help improve the capacity of the economy to absorb additional demand-side pressures.

* On 12 July 2007, the Monetary Board decided to maintain a neutral monetary policy stance by implementing two complementary moves during its policy meeting. The tiering system on placements with the BSP was lifted and the BSP’s key policy interest rates were adjusted to 6.0 percent for the overnight borrowing or reverse repurchase (RRP) rate and 8.0 percent for the overnight lending or repurchase (RP) rate. The Monetary Board considered this policy stance as neutral relative to future inflation and output. It noted data showing the effectiveness of the additional liquidity management measures implemented in early May 2007. Meanwhile, there were indications that the tiering scheme has had a beneficial impact on bank lending to the productive sectors of the economy even as non-bank sources of financing were becoming increasingly available to the corporate sector.

* On 23 August 2007, the Monetary Board decided to maintain the BSP’s key policy interest rates at 6.0 percent for the overnight borrowing or reverse repurchase (RRP) rate and 8.0 percent for the overnight lending or repurchase (RP) rate.

Clark free port to put up new power grid by 2009

By Rendy Isip
Original report at The Business Mirror

CLARK FREE PORT, Pampanga—The state-owned Clark Development Corp. plans to set up another power grid to stabilize the power supply inside the Clark special economic zone.

CDC president Levy Laus told Standard Today they are planning to set up another power grid because of the electricity outages that occur inside the freeport.

Laus said the freeport gets its electricity from the power grid in Mexico town which supplies power to the more than 400 locators in the economic zone, but the grid is being run by the National Power Corp. so CDC could do little about the outages.

‘Right now, we are planning to set up another power grid that would be connected to the Concepcion-Tarlac area to stabilize the electric supply and prevent power outages as well as fluctuations in electricity inside Clark which is causing a problem to the locators,’’ Laus said, adding that it may take two years to set up the new grid.

He said several industrial companies have complained of the power outages and fluctuations that are causing problems.

‘‘We are doing our best to provide an ample supply of electricity in Clark, but we cannot do anything once a power outage occurs because it is being supplied by the NPC,’’ he added.

Laus said the government company will put up special transmission lines exclusively for the requirements of the American company Texas Instruments which will establish a manufacturing facility in Clark. He said that these special transmission lines will also be connected to the Concepcion-Tarlac power grid.

In 2003, the CDC terminated an agreement with Clark Power Corp. and Clark Electric Distribution Corp. after a series of power outages that crippled the operations of locators inside the special economic zone.

The CDC took over the power distribution operations inside the zone after it failed to pay some P80 million in arrears and failed to stem electricity outages that caused losses to some companies inside Clark.

RP bond market posts hefty growth – BSP

By Des Ferriols
Original report at The Philippine Star

The bond market has undergone explosive growth in the last year, the Bangko Sentral ng Pilipinas (BSP) reported, with daily trades more than double this year.

BSP Deputy Governor Nestor Espenilla Jr. said that although the local bond market was less established and developed than its equities counterpart, a strong investor demand has led to the surge in the local debt market.

According to Espenilla, structural changes that improved the efficiency, regulation and risk management in the debt market also contributed significantly to this growth.

Espenilla said that secondary trading in government securities was up this year, despite the actual decline in the issuances of the National Government which has been able to reduce its deficit and consequently, its borrowing requirements.

However, Espenilla said strong macroeconomic fundamentals and the increased liquidity introduced by the government’s domestic bond exchange program made the difference in the secondary market.

According to Espenilla, the average daily volume of around P5.2 billion for the period ending Oct. 18, 2007 was up by more than two times the average daily volume of P2.5 billion for the same period last year.

“To support this growth and to improve transparency, major market infrastructure reforms are being undertaken,” Espenilla said. “Among these are the operations of the fixed income exchange.”

In an attempt to catch up with the more developed debt markets in the region, the local financial sector has been undergoing a major restructuring that saw improvements in the efficiency of the trading platform which allows efficient execution of orders.

Espenilla said the straight through processing (STP), for instance, allowed government securities traded at the fixed income exchange to be automatically settled via the ROSS Philpass deliver versus payments system.

As long as they were STP-eligible, government securities traded between the banks were settled automatically, thus eliminating the need for manual settlement of transactions.

“As a result, investors can transact with greater efficiency and transparency,” he said. “They can easily obtain prices and other information on government securities (they want) to invest in.”

Sunday, 28 October 2007

MacroAsia sees $225-M revenue from new hangar

By Zinnia B. Dela Peña
Original article at The Philippine Star

Lufthansa Technik Philippines (LTP), a joint venture between tycoon Lucio Tan’s MacroAsia Corp. and Germany’s Lufthansa Technik AG, is expecting to generate at least $225 million in revenues this year with the launch of its new hangar in Pasay City.

Started in March this year, the construction of the $6.5-million hangar facility will expand LTP’s aircraft maintenance, repair and overhaul capability.

“Provision of the necessary tools and equipment, totaling about $4 million has been started so as to bring the hangar to productive use,” MacroAsia said in a statement.

MacroAsia holds a 49-percent stake in LTP while Lufthansa owns the remaining 51 percent.

Located at the MacroAsia Special Economic Zone in NAIA, Pasay City, LTP’s new hangar will have additional capacity to accommodate one wide-body aircraft (Boeing B747-400/800, B777-300, A340-600) and two A320s at one time.

“The projected additional annual revenues from this new hangar is about $14 million for 35 C-check events in a year,” MacroAsia said.

LTP services principally the aircraft fleet of Philippine Airlines, and has also served through its seven-year existence more than 27 airlines from all over the world. Its recent clients include Qantas, Cathay Pacific, Gulf Air and Virgin Atlantic.

It currently showcases Filipino competencies in a global aviation setting and consistently delivers excellent turn-around times for aircraft servicing. With this reputation, more airlines are entrusting the servicing of their aircraft in Manila, thus requiring LTP’s facility expansion.