Saturday, 31 May 2008

DOTC gives new timeline for NAIA-3 opening

By Rainier Allan Ronda
The Philippine Star

Transportation and Communications Secretary Leandro Mendoza confirmed the government’s plan to open the Ninoy Aquino International Airport (NAIA) Terminal III within the year.

According to Mendoza, NAIA Terminal III is among several airports that they plan to open until 2010.


The Manila International Airport Authority (MIAA), for its part, said that structural works had already been conducted on the airport facilities in the past months.


Philippines among least vulnerable to inflation shocks — Fitch

By Maria Eloisa I. Calderon
BusinessWorld Online

London-based Fitch Ratings has ranked the Philippines as one of the least vulnerable, among 73 rated emerging markets, to macroeconomic volatility arising from rising inflationary pressures.

The Philippines clinched the 59th spot in an index that ranked 73 Fitch-rated countries according to their vulnerability to inflation shocks, which the global debt watcher said could erode creditworthiness.

Fitch said rising inflation, rather than slowing economic growth, is the "principle challenge" facing policymakers in these emerging economies.

"Failure to contain inflationary pressures risks undermining macroeconomic stability and medium-term growth prospects," Fitch said in a report released yesterday.

"In the worst case scenario, investors will lose confidence in local currency assets, leading to volatile financial and currency markets," Fitch added.

The top 10 most vulnerable emerging markets, according to the index, are Jamaica, Ukraine, Kazakhstan, Bulgaria, Suriname, Latvia, Lithuania, Ghana, Vietnam and Sri Lanka.

"In Asia, Vietnam and Sri Lanka stand out as the only countries in the region in the top ten, while Malaysia, Taiwan and the Philippines demonstrate low risk," Fitch said.

Fitch currently rates Philippine sovereign debt papers ‘BB’, or below investment grade.

Friday, 30 May 2008

NAIA 3 to warm up with domestic flights

By Tarra Quismundo
Philippine Daily Inquirer

MANILA, Philippines -- Airport authorities are considering starting domestic flight operations in the new Ninoy Aquino International Airport Terminal 3 as they plan yet again a “partial phased opening” of the controversial facility.

Alfonso Cusi, the general manager of the Manila International Airport Authority (MIAA), said the domestic flights would be a kind of “warm up” to the long delayed operations of the controversial NAIA-3, which would later shift to international flights.

Cusi said in a statement that MIAA was pursuing “a deliberate strategy of partial and phased opening, starting with domestic flight operations and subsequently shifting to international flight operations on a selective basis.”

But this would be done after the conduct of appropriate engineering tests and assessment to determine the safety and operability of the different sections of the facility, he said.

Airport officials did not set a date for the start of the dry-run but said some 80 percent of air terminal systems, from baggage handling, loading bridges, and security screening to electrical, air-conditioning and fire protection, have been installed since the “completion work” began earlier this year.

“We are doing everything we can to undertake the review and testing of the most important electro-mechanical systems and provision for passenger services so that the terminal could be put into productive use at the soonest possible time,” Cusi said.

Last Wednesday, a delegation from the House of Representatives made a tour of the facility, the second visit of members of Congress in 2008.

Last January, members of the House oversight committee toured the terminal and saw for themselves the structural defects that the MIAA cited as the reason for the delayed opening.

Bacolod Representative Monico O. Puentevella, head of the House committee on transportation, headed the House members who went to look at the progress of the repairs and “completion work” at the terminal.

Puentevella said in a statement on Thursday that the committee approved a motion to support any decision that the MIAA board would make concerning the opening of NAIA 3

“We believe it is time to open Terminal 3 and the committee gives its full support to the (Department of Transportation and Communication) and the MIAA,” he said.

Damage from the collapse of the ceiling held back the terminal’s planned “rolling opening” in 2007. Private engineering consultants, TCGI Engineers and the Ove Arup & Partners HK warned that opening the facility would pose “life safety risks” to users.

MIAA intends to go ahead with the opening of the terminal even as legal cases continue to dog NAIA-3, including claims for payment brought against the government in international arbitration courts by the consortium that built the facility, the Philippine International Air Terminals Co. (PIATCo).

The Supreme Court earlier voided PIATCo’s controversial contract.

The government gained control over the facility by making a partial payment to PIATCo for the terminal’s construction cost.

Tirso Serrano, the airport development and corporate affairs chief, said the terminal would open “at the soonest possible time.”

“We have been addressing all the basic, pressing and most glaring life safety concerns such as the collapsed ceiling through a more comprehensive repair and strengthening program,” he said.

PGMA takes a break; no official schedule today


President Gloria Macapagal-Arroyo took time off today from her usual busy schedules after making rounds of the provinces the past two months.

Yesterday, the President was in Tawi-Tawi, one of the 20 poorest provinces, where she inaugurated the Modified Mariculture project, and observed the sprucing up of classrooms in Sibutu in preparation for school’s opening next month.

In Bongao, the capital town of Tawi-Tawi, the President observed the distribution of rice to the poor.

Presidential Security Group (PSG) Chief Romeo Prestoza said the President then flew to Palawan where she spent the night.

Prestoza said the President’s activities in Palawan are private.

This week alone, the President had a very busy schedule as she went around the provinces checking on preparations for the opening of classes next month or looking after the relief and rehabilitation operations on typhoon-devastated provinces in Region 1 or inaugurating or groundbreaking vital infrastructure projects.

Last Tuesday, the President was in San Fernando, La Union to inaugurate two vital projects---the $550 million Asian-American Gateway and the P5 –billion Thunderbird Resort, that stand to spur economic development in the area.

She was in Sariaya and Lucena in Quezon province on Wednesday, where she inaugurated the Sentrong Pamilihan ng Produktong Agrikultura ng Quezon and visited an elementary school’s science laboratory room.

Last week, the President was in the Visayas and Mindanao to check on priority projects that would propel economic development in the countrysides.

Indeed, the Chief Executive is quite busy and she needs a little time out for herself.

Philippines set to open 8 airports in next 2 years


TRANSPORTATION Secretary Leandro Mendoza said eight airports would be completed in the next two years.

"By 2010 the Philippines will have airports of international standards to ease traffic and reduce business cost," Mendoza said during the opening of the two-day Expo on International Transportation and Logistics held at the World Trade Center.

He said this year alone, three airports, namely, the Ninoy Aquino International Airport (Naia) Terminal 3, the Clark or Diosdado Macapagal International Airport (DMIA) and the Buswanga airport will be opened in November.

Mendoza said they likewise consider opening the Davao-Iloilo Terminal, the Silay-Bacolod airport, the Laguindingan airport and the Panglao airport in Bohol.

Negotiation for the opening of the Zamboanga airport is also ongoing, he added.

"We expect traffic to double in particular the tourists' arrivals" Mendoza said, adding that this will help decongest the growing passenger traffic in the country.

Records of the Civil Aeronautics Board (CAB) showed that 11.24 million passengers were recorded last year or an increase of 11 percent from the 10.13 million posted in 2006.

Flag carrier Philippine Airlines (PAL) cornered the bulk with 2.38 million, of which 1.8 million were overseas.

Of the 11.24 million, about 5.8 million were outbound and 5.43 million inbound, higher than the 2006 arriving passengers with 4.56 million and around 5.26 million outbound.

Aside from PAL, Cebu Pacific carried 1.02 million passengers. Cebu Pacific has 12 international destinations while PAL has 25 destinations.

Asian Spirit had 8,052 international passengers as compared to the 5,810 recorded last year.

Meanwhile, foreign carriers Cathay Pacific Airways transported 1.33 million passengers last year; Singapore Airlines, 537,362; Northwest Airlines, 497,916; Japan Airlines, 435,429; Emirates Air, 448,482; and Korean Air, 414,319.

Likewise, CAB reported that domestic passenger traffic last year also increased by 22.7 percent to 10.39 million from 8.47 million in 2006 due to budget fares introduced by several airlines.

Cebu Pacific carried 4.45 million domestic passengers and PAL transported 4.03 million. Air Philippines had 1.17 million domestic passengers; Asian Spirit, 484,482; and Seair, 245,020.

For 2007, the country's domestic load factor was placed at 78 percent up by 73 percent in 2006. (MSN/Sunnex)

Gov’t sets medium-term growth targets


The Development Budget and Coordination Committee (DBCC) has approved the country’s economic growth targets for 2008-2010.

Given recent and regional trends, the DBCC reviewed the macroeconomic assumptions over the medium-term period and agreed to set the real GDP growth rates for 2008-2010 at 5.7-6.5 percent, 6.2-7.0 percent and 6.8-7.6 percent, respectively, DBCC Chair and Budget and Management Secretary Rolando Andaya Jr. announced today.

The DBCC chair clarified that there had been only a slight downsizing in the government’s original growth targets for the medium-term as an offshoot of the prevailing uncertainty in the world economy.

DFBCC records show that the revised growth targets were brought about by accelerating worldwide inflation given higher food prices and the record high and more volatile Dubai crude prices caused by supply and demand concerns, and the strong peso-dollar exchange rate which is assumed at P42-P45 and sustained strong inflows from OFW remittances, even as export growth decelerates given the global slowdown.

Merchandises exports are likely to grow at a slower rate of 6 percent this year and next year, before increasing by 8 percent in 2010. Imports likewise are projected to increase by 7 percent in 2008 and 2009, and by 9 percent by 2010.

The government is bent on balancing the budget by 2010 to enable the government to sustain the much-needed infrastructure and social programs in the next two years to provide for more jobs and poverty alleviation measures in the face of tougher external; conditions,” Andaya said.

The budget chief issued the assurance after an agreement was reached in the DBCC that the higher level of spending to help the poor cope with rising oil and food prices would likely result in the budget cap of less than 1 percent of GDP this year.

The finance department remains committed to its P1.2-trillion revenue target in 2008 to ensure that there are enough resources to cover our programmed spending for this year and the coming years,” Andaya said.

Palace confident of better growth in second quarter

By Mia M. Gonzalez and Cai Ordinario
The Business Mirror

THE Executive put on a brave face Thursday on news that growth in the first quarter was slower than hoped for, at 5.2 percent from last year’s 7.0 percent, saying the country will post better growth figures in the second quarter because of increased targeted spending on vital sectors. This, after the government abandoned its balanced-budget target for the year in favor of a P75-billion deficit.

The government’s economists had pinned the blame for the slackening on rising oil prices, the slowdown in the US economy and the negative effects of a strong peso.

“The results for the first quarter are still within expectation, but we expect to make up for it in the second quarter because the government will spend on necessary [items] to help vital sectors. And we can count on the government to take all the necessary steps to attain its revised 5.7-percent to 6.5-percent growth target for the year,” Press Secretary Ignacio Bunye said in an interview.

Budget Secretary Rolando Andaya Jr. said in a statement the government will meet its new balanced-budget target in 2010, and that the Department of Finance has committed to meet its P1.2-trillion revenue target this year “to ensure that there are enough resources to cover our programmed spending for this year and the coming years.”

The government, he said, is bent on balancing the budget by 2010 to enable it to “sustain the much-needed infrastructure and social programs in the next two years to provide for more jobs and poverty alleviation measures in the face of tougher external conditions.”

Cabinet Secretary Ricardo Saludo said, “With sustained investments and dollar inflows from OFWs, exports and tourism, we shall sustain our record 29 consecutive quarters of GDP expansion under President Arroyo.”

Bunye said that while external challenges are exerting pressure on economies around the world, including the Philippines, the government believes its reforms “are working to provide a firewall against major global economic disruptions.”

The economy, he opined, has “matured and diversified so much in the last few years that our economic turnaround is permanent.”

Bunye said the country’s 5.2-percent GDP growth for the first quarter “shows that our economy continues to have solid momentum” but “high oil prices and reduced global demand, particularly in the United States, for some of our nation’s exports have forced our economic team to reduce the target for GDP growth for this year,” originally set at 6.3 percent to 7 percent.

“The President is carefully monitoring economic developments to ensure that there is continued investment in key infrastructure that will enhance the competitiveness of the Philippine economy and in the education, health and other social programs that will improve the quality of life of millions of our countrymen and women who are impacted by the challenges brought about by the new global economic environment,” he said.

With the deferment of the national government’s target of achieving a balanced budget to 2010, the National Economic and Development Authority (Neda) said earlier it is eyeing a maximum deficit of 1 percent of GDP for the year.

The Development Budget Coordination Committee (DBCC) meeting on Wednesday decided to limit the deficit to 1 percent of the GDP or around P75 billion to increase the expenditure of the government and help shield Filipino consumers from the ill effects of high inflation, Neda Acting Director General Augusto Santos said.

“In order to sustain growth, in order for the economy not to suffer [a] less than desirable [economic state], the government needs to spend more to arrest the economic slowdown. Subject to certain information, we are thinking of an upper limit of 1 percent of GDP [as] budget deficit by end of 2008. One percent of GDP is about P75 billion,” Santos said in a press briefing on the National Income Accounts (NIA) in Makati City on Thursday.

He said that without the P75-billion spending of the government, the country’s GDP will only reach the lower end of the DBCC’s full-year GDP projection of 5.7 percent to 6.5 percent in 2008.

To finance the additional expenditure, Santos said the government will likely resort to a supplemental budget, which the Cabinet will submit to Congress soon.

Santos said the government is also open to foreign and local borrowing using a debt mix of 70 percent to 30 percent in favor of domestic borrowing.

He added that proceeds from the sale of government assets and a projected increase in tax collection would also be used to finance the P75-billion expenditure this year.

With this, Santos said the government expects public construction to pick up by the second and third quarters. As Neda chief, he earlier said it would be best to invest the additional funds in infrastructure projects.

The Neda also sees a continuation of subsidies. Currently, the government is subsidizing the cost of rice through the rice sold by the National Food Authority (NFA), oil import taxes, food for school and Pantawid ng Pilipinong Pamilya programs.

“It’s really a tough environment and it is putting pressure on the poor. [This is why the] government is consciously spending much more,” Santos said.

Earlier, the Neda expressed concern that around 6.4-million Filipino families earning a total gross income of P10,000 and below a month will become highly susceptible to high oil and food prices.

Santos said there are 4.7 million families earning a total gross income of P10,000 a month while there are 1.7 million families who are considered food poor and are earning less than P10,000 a month.

He said that based on the National Statistics Office (NSO), Filipino families have an average size of five members. The Neda said this means a total of 32 million Filipinos will be severely affected by high commodity prices.

If food prices, particularly rice, increases further, Santos said the effect will become worse because 50 percent of the income of families go to food and 50 percent of the food budget is allotted to rice.

In order for families to avoid being susceptible to high prices, Santos said they need to earn a gross income of around P13,000 to P14,000 a month or a gross family income of P156,000 to P168,000 a year.

ASEAN on track for open skies by 2015

By Marites S. Villamor
BusinessWorld Online

MACTAN — Senior transport officials of the Association of Southeast Asian Nations, or ASEAN, yesterday pushed for signing this November of a multi-lateral agreement that would launch an open skies regime in Southeast Asia.

The officials also signed at the end of the three-day 25th ASEAN Senior Transport Officials’ Meeting here a memorandum of understanding on cooperation in aircraft accident and incident investigations to enhance aviation safety in the region.

Transportation Undersecretary Doroteo A. Reyes II, who led the Philippine delegation, said he did not see any more hurdles that would delay the signing of the Multilateral Agreement on the Full Liberalization of Air Freight Services and Air Services during the 14th ASEAN Transport Ministers’ Meeting in Manila in November.

"This has been discussed already. It’s [agreement] almost finished. There are just refinements that are being made on the grant of reciprocal rights," Mr. Reyes told reporters yesterday.

The target is to establish by 2015 a single unified aviation market within this region of over half-a-billion people.

Mr. Reyes said the multilateral agreement would pave the way for the phased removal of restrictions to air and air freight services within the region and mark the start of the implementation of an open skies policy. "This would be the start of open skies. [The agreement] is an approximation of open skies. And maybe by 2015, we will have full liberalization of air services," he added.

Under open skies, carriers would be able to fly over the territory of an ASEAN member-country, stop for refueling and maintenance servicing without boarding or disembarking passengers, transport passengers and cargoes from one country to another and operate connecting flights to a third country within the region.

This agreement should boost intra-ASEAN travel, Mr. Reyes said. Last year, over 24 million ASEAN nationals and some 30 million non-ASEAN nationals traveled within the region, an ASEAN tourism database showed.

The move to liberalize passenger and cargo air services in the region is also crucial to the creation of an ASEAN economic community by 2015. ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

In the Philippines, President Gloria M. Arroyo has designated the Diosdado Macapagal International Airport in Clark Freeport as port of entry under an open skies regime.

"Right now, the NAIA [Ninoy Aquino International Airport] is congested and Clark can accommodate the biggest aircraft. It has two runways while other airports only have one," Mr. Reyes said.

After the signing of the agreement in November, Mr. Reyes said they will meet with the airlines and get their inputs. "We will listen to their position. But it will always be the interest of the government and the people that will prevail," he added.

Thursday, 29 May 2008

Statement of Philippine Press Secretary Ignacio R. Bunye Re: Growth figures

While the Q1 GDP growth of 5.2% shows that our economy continues to have solid momentum, high oil prices and reduced global demand, particularly in the United States, for some of our nation’s exports have forced our economic team to reduce the target for GDP growth for this year to between 5.7% to 6.5%.

The administration is making adjustments to the Government’s fiscal program in order to support achievement of the GDP growth targets and the President is carefully monitoring economic developments to ensure that there is continued investment in key infrastructure that will enhance the competitiveness of the Philippine economy and in the education, health and other social programs that will improve the quality of life of millions of our countrymen and women who are impacted by the challenges brought about by the new global economic environment.

There are clearly challenges in the horizon that will have an impact on the Philippines, as with most other nations, but we are confident that our reforms are working to provide a firewall against major global economic disruptions and that our economy has matured and diversified so much in the last few years that our economic turnaround is permanent.

Gov't to inject add'l P75B into Philippine economy to avoid slump - NEDA

By Patricia de Leon

MANILA, Philippines - The National Economic and Development Authority (NEDA) on Thursday said the government is planning to pump prime the economy by at most P75 billion this year to prevent a "less than desirable" slump.

Acting NEDA Secretary-General Augusto Santos said most of this will be sourced from proceeds of the government's privatization efforts while the balance will be sourced through borrowings.

The government had been planning to end the year with a balanced budget, but Santos said economic managers have agreed to go overboard by at most 1 percent of gross domestic product or GDP in order to prevent a steep economic slump.

On Thursday, NEDA announced that the local economy rose 5.2 percent in the first quarter, barely making the lower end of an earlier announced target. Santos said the less than desirable performance is due to higher oil and food prices.

Santos said the government is preparing a supplemental budget to support the plan which it intends to submit to Congress soon.

Clark to assemble Italian planes

By Rendy Isip
The Manila Standard

CLARK FREEPORT—The Philippines’ fledgling aviation sector received a lift after an Italian defense contractor and a Filipino aviation firm signed a deal for the manufacture of training aircraft here.

Alenia Aermacchi of Italy and Aerotech Industries Philippines Inc. signed the agreement to build 18 SF 260F aircraft trainer on April 24, and they will be used by the Philippine Air Force.

The aircraft, spare parts and services to be provided by Alenia will cost the government $13.8 million.

“The agreement will definitely boost the Philippines’ aviation industry,” said Teresa Parian, Aerotech Industries’ chief operating officer.

“The agreement is up to 2015, which means that all orders that Alenia Aermacchi will receive worldwide up to that period will be assembled in and supplied out of the Aerotech Philippines facility.

“Considering that 27 armed forces use SF 260 trainer aircraft all over the world, with about 1,000 units in operation, Alenia Aermacchi estimates 100 new units of this aircraft type will be sold in the next five years,” Parian said.

In a statement, Alenia Aermacchi said it would start delivering the aircraft to the Air Force next April, and that and all planes would be supplied within 18 months.

2008 Q1 GDP at 5.2


The domestic economy continued to remain firm notwithstanding the growing difficulties in the external environment. Therefore, for the first quarter of 2008, gross domestic product (GDP) grew by 5.2 percent while the gross national product (GNP) extended its run to expand by 7.3 percent on account of the 30.3 percent growth registered by the country’s net factor income from abroad as compensation inflow grew by 7.2 percent and property income increased by 22.8 percent.

Going into the details, the 3.0 percent growth posted by the agriculture sector can be traced to the higher output of palay, corn, banana, coconut, and poultry. In addition, the significant increase in the country’s agro-based exports particularly coconut products, pineapple, coffee, rubber, and seaweeds also helped prop up the sector. The services sector rose at a healthy 6.9 percent, bolstered by real estate, finance, and trade. The real estate subsector continues to be buoyed by demand for office space as well as residential spaces from OFWs. However, industry growth was sluggish at 3.9 percent compared to the 6.6 percent posted in the same period in 2007, on account of the decline in public construction and weak exports. Noteworthy though is the mining sector’s continued robust performance due to the 22.6 percent rise in copper output in the first quarter of this year.

On the demand side, the external sector continues to struggle in an environment characterized by high oil prices and weak global demand. Nonetheless, domestic demand provided significant support to overall economic growth as both consumer and investor confidence held up well in the first quarter. Private consumption expenditure rose further by 5.1 percent as households consolidate their income on food (5.4%), transportation and communication (12.2%), household furnishings (9.7%), beverages (3.0%), household operations (2.8%), and miscellaneous expenses (2.8%). Overall capital formation registered a respectable growth of 7.3 percent in real terms. A noteworthy development is the strong growth in investment coming from durable equipment, which grew by 8.2 percent. Data showed increasing investments in agriculture, textile, sugar milling, mining and construction machineries, pulp and paper, air and water transport, and office machines. These investments are seen to enhance the competitiveness of and productivity in these industries.

Looking forward, given the uncertainties and risks prevailing in the external environment, full-year GDP growth is expected to settle between 5.7 – 6.5 percent. During the meeting of the Development Budget Coordination Committee (DBCC) yesterday, the members of DBCC committed to finetune the fiscal program in order to support this growth.

Wednesday, 28 May 2008

President Arroyo launches mariculture project in Tawi-Tawi tomorrow

SIBUTU, Tawi-Tawi – President Gloria Macapagal-Arroyo will launch here tomorrow (Thursday) a mariculture development project, a government livelihood intervention program designed to bail this province out of poverty.

Tawi-Tawi is the country’s poorest province.

The President will lead the capsule-laying ceremony of the Tawi-Tawi modified mariculture development project at the municipal grounds here, an anti-poverty project that would directly benefit more than 52,000 coastal dwellers and fisherfolks in the neighboring island towns of Sibutu and Sitangkai.

She will also award a P2-million check for the scholarship program of the Institute of Fisheries and Marine resources, as well as distribute various fishing gears for the 10 fishermen association in the province.

The ceremonial fish-stocking activity at the mariculture will also feature colorful cultural presentations by local residents on board the 100 Badjao lepahs (vintas).

Lone District Rep. Nur Jaafar said the project, with an initial funding of P15 million, is expected to place Tawi-Tawi on the map as the mariculture capital of the country.

As the “epicenter of the world’s largest coral triangle,” Tawi-Tawi boasts of an immense biodiversity and a renowned homegrown talent in fish farming.

With the project, Jaafar said high-value fishing production is expected to generate about P200 million in additional revenues for the province in a year’s time.

This tax take is expected to increase by more than double within four years.

Jaafar said the mariculture project will mean more jobs and livelihood opportunities for the more than 52,000 coastal dwellers and marginal fisherfolks who will be trained in scientific and environment-friendly fish farming techniques by experts from the Department of Agriculture’s Bureau of Fisheries and Aquatic Resources (DA-BFAR) and the Mindanao State University-Tawi-Tawi College of Technology and Oceanology (MSU-TCTO).

In her State-of-the Nation Address (SONA) last year, the President announced unprecedented investments in the Super Regions, the country’s blueprint towards achieving First World status in 20 years, including the establishment of a mariculture park in Tawi-Tawi.

Philippine Science High School awardees received by President Arroyo

Adrian Patacsil, 17 and Rachel Ruth Cahilig, 16 from Philippines Science High School present to president Gloria Macapagal-Arroyo a microtremor device made from a scrap materials that won the Distinguished Achievement Award at the recent concluded Intel International Science and Engineering Fair 2008 (Intel ISEF) held in Atlanta, Georgia USA. The President was presented a prototype of a microtremor recorder capable of conducting microtremor analysis or predicting the stability of a structure during her visit Wednesday May 28, 2008 to Intel Technology Philippines in Cavite City. There is currently only one microtremor recorder in the country, and it is housed in the Philippine Institute of Volcanology (Phivolcs). (Rey Baniquet/OPS-NIB Photo)

RP prepays $468M of foreign debts in Q1

By Jun Vallecera
The Business Mirror

CONTINUED foreign inflows that boosted the country’s level of foreign-currency reserves allowed the economic managers to pay ahead of schedule $467.6 million worth of foreign debts in the first three months.

This was but a fraction of the foreign debt prepayment the government undertook last year totaling $2.995 billion.

But there is optimism that more could be paid ahead of schedule again this year, according to Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr.

In an e-mail, Tetangco said $169.3 million or 36.2 percent of total prepayments for the period were for public-sector foreign IOUs.

The balance totaling $298.4 million was for private-sector foreign debts.

Much of this was possible because of sustained foreign inflows that allowed the BSP to accumulate gross international reserves totaling $36.7 billion as at end-April this year.

Such was also possible because foreign direct investments posted a net inflow totaling $327 million in the first two months alone.

Tetangco said the investments came at a time when fund managers took a generally cautious stance on investing in emerging markets like the Philippines, given the prevalent global uncertainties.

Robust remittances from more than eight million overseas Filipinos workers (OFWs) also allowed the economy to pay its foreign debts ahead of time.

OFW remittances in the first quarter alone totaled $4 billion, higher by 13.2 percent from a year ago.

Tetangco said OFW remittances in March alone totaled $1.4 billion, the highest recorded monthly level ever.

Foreign-debt prepayments in 2006 totaled only $4.4 billion.

Prepayment helps ease the compulsion to borrow overseas and represents a boost to the peso that has weakened against the US dollar in recent weeks.

RP tuna exports to US rise 25% in first quarter

By RS Sarmiento
BusinessWorld Online

GENERAL SANTOS CITY — The country’s tuna exports to the United States bounced back in the first quarter this year from the same period in 2007, said an online tuna market news site, citing data from the US National Marine Fisheries Service (NMFS).

Such performance placed the Philippines next to Thailand as the second largest tuna exporter to the US, said a posting at Thailand cornered 16% of the entire US tuna market in the first quarter of 2008.

Tuna products shipped by the Philippines to the US surged 24.5% to 12,799 metric tons this first quarter from 10,278 MT in the first quarter of 2007, cited from the NMFS, an agency under the US Department of Commerce’s National Oceanic and Atmospheric Administration.

Companies' 2008 Q1 Net Earnings

(Figures cited are in Philippine pesos.)
(Click here for Companies' 2007 Net Earnings.)

San Miguel Corporation [360%] 11B
Philippine Long Distance Telephone Company (PLDT) [21%] 10.4B
Philamlife [16%] 4.8B
SM Investments Corp. (SMIC) [15%] 3.8B
Globe Telecom [32%] 3.4B
San Miguel Brewery Inc [37%] 2.5B
Ayala Land Inc. (ALI) [42%] 1.83B
SM Prime Holdings, Inc [7%] 1.6B
Bayan Telecommunications Inc [20%] 1.51B
Aboitiz Equity Ventures, Inc (AEV) [9%] 1.18B
Aboitiz Power Corp [143%] 1.01B
Megaworld Corp [29%] 1.01B
Security Bank [10.3%] 835.7M
Vista Land [89%] 781M
China Bank [7%] 703M
Manila Electric Company [23.2%] 655M
Manila Water [22%] 625M
Filinvest Development Corp. (FDC) [192%] 554M
Philippine National Bank (PNB) [48%] 457M
GMA Network [6%] 454M
RCBC Savings Bank (RSB) [15%] 212M

Tuesday, 27 May 2008

$550-million AAG cable network gives Philippine Cyber Corridor big boost

PARTNERSHIP BUOY -- President Gloria Macapagal-Arroyo affixes her signature on the yellow buoy otherwise known as the "Partnership Buoy" to formally inaugurate the Philippines leg of $550-million, 20,000 kilometer Asia-America Gateway (AAG) fiber cable network project Tuesday (May 27, 2008) at Barangay Baccuit in Bauang, La Union. The project, scheduled to be completed by late 2008, is expected to meet the forecasted explosive growth in bandwith requirements for new and revolutionary broadband applications such as IP, video, data and other multimedia services. Assisting the President are chairman Manuel Pangilinan of the Philippine Long Distance Telephone (PLDT) Company and La Union Gov. Manuel Ortega. (Alfredo Pancratio/OPS-NIB Photo)$550-million

BRGY. BACCUIT, BAUANG, La Union -- The Cyber Corridor super region that cuts across the North Luzon Growth Quadrangle down to Mindanao got a big boost today with the launching of the Philippine leg of the $550-million, 20,000-kilometer Asian American Gateway (AAG) fiber cable network in this barangay.

In her message after she pulled the cable and haul in the symbolic '''Partnership Buoy'' that signaled the formal inauguration of the 2nd International Landing Station of the AAG, the President said the information and communications technology sector in the country would now be provided with resiliency and redundancy of service that is not easily disrupted by natural disasters.

'What a great international partnership,'' the President said of the AAG network, which is owned by a consortium that include the government of Brunei, Telstar of Australia, AT &T of the United States, Bharti of India, CAT of Thailand, PLDT of the Philippines, PT Telkom of Indonesia, Telekom of Malaysia, StarHub of Singapore and VNPT of Vietnam.

The President said the award-winning communications system will support the rapidly growing business process outsourcing (BPO) and call centers industry, and strengthen the country's bid as the most favorable investment destination for BPOs and call centers.

''The AAG international cable system and landing station represent a big boost to the continued growth of our ICT-related industries, especially off-shoring and outsourcing which depend on reliable international broadband services,'' she said.

''Our call centers cannot afford a few seconds of redundancy,'' the President said, as she stressed that the AAG fiber optic cable network would ''provide us with a resiliency and redundancy of service that is not easily disrupted by natural disasters, such as the Taiwan earthquake of December 2006,' she added.'

''The IT companies can breathe easier now,'' the President said.

The President recalled that in her 2007 State of the Nation Address (SONA), she mentioned that “no Taiwan tremor can cut off our cyber services from their global clients, PLDT and Globe are investing P47 billion in new international broadband links through other regional hubs.''

''And here it is,'' the President said, as she underscored the need to invest in vital transport, digital and human infrastructure which ''remains central to the ability of our nation to break the historic cycle of despair and to meet the challenges of the future.''

As of last year, 300,000 Filipinos were employed in the BPO industry, which also generated $5 billion in revenues.

The industry target is to create one million new jobs and generate $13 billion in revenues by 2010.

The President vowed that the government would continue investing heavily in new infrastructure, as she cited the help and support of private companies in building vital infrastructure projects.

With the private sector like the AAG Network spending on vital infrastructure, the government is spared the need to undertake the construction of these facilities, thus boosting its goal of balancing the budget.

The AAG project will link Malaysia to the US via Singapore, Thailand, Brunei, Vietnam, Hong Kong, the Philippines, Guam, Hawaii and the US West Coast through an undersea cable system.

Scheduled to be completed this year, the project will provide the much-needed direct access and diverse routing between Southeast Asia and the US.

Geof Holland, Alcatel-Lucent survey and engineering manager, said the undersea cable will be embedded two and a half meters below the surface of the seabed to avoid any damage from fishermen and typhoons.

He said a geographic mapping was done before they chose the Bauang location because of its good coastline and bay.

Monday, 26 May 2008

Photos of MRT2--Manila

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US firm to build P4-B hybrid power plant in Mindoro

By Juancho Mahusay
The Philippine Star

CALAPAN CITY – An American company is putting up a P4-billion wind-diesel hybrid energy power-generation facility in Oriental Min­doro that will produce at least 25 megawatts for the whole Mindoro island.

The Philippine Hybrid Energy Systems Inc. (PHESI), a unit of Breeze Electric Llc of the United States, is targeting commercial operation in January 2010 to supply electricity to the estimated 200,000 consumers of Oriental Mindoro Electric Cooperative (Ormeco) and Occidental Mindoro Electric Cooperative (Omeco).

Ormeco distributes electricity to over 99,000 customers in 421 barangays, while Omeco has over 46,000 customers in 135 barangays.

The PHESI power plant will supply about 23 percent of Mindoro’s annual electricity demand.

The Board of Investments has granted full incentives to the project since it falls under the Investment Priorities Plan’s Energy-Power Generation using indigenous and renewable energy.

BOI managing director Elmer Hernandez said projects like PHESI’s are also eligible for pioneer status.

MMDA, MIAA to beautify roads leading to NAIA

By Michael Punongbayan
The Philippine Star

Roads leading to and from the Ninoy Aquino International Airport (NAIA) complex will soon undergo a major facelift in an effort to boost Metro Manila’s image as a haven for tourism, trade and investment.

The Metro Manila Development Authority (MMDA), Manila International Airport Authority (MIAA) and Ayala Properties will jointly undertake the physical improvement of the roads.

“This initiative is in support of the government’s thrust to give the premier gateway to our country a world-class character,” MMDA Chairman Bayani Fernando said.

Under the development plan, hundreds of squatter families occupying six roads within the vicinity of the NAIA complex will be relocated to vacant lots in the area, where they can avail of the government’s socialized housing program.

The project will cover the MIA, NAIA, Domestic and Airport Roads as well as Tramo and Andrews Avenue.

The plan also includes the construction of a bridge to connect the NAIA complex to Quirino Avenue; the repair and widening of uneven and narrow sidewalks; the burying of utility wires; and the installation of high-mast lampposts along sidewalks.

The MMDA has also forged a tie-up with the MIAA and the Pasay City government to ease traffic going to and from the NAIA complex through a new traffic scheme that includes a 24-hour ban on cargo trucks, buses and tricycles on Domestic Road and Andrews Avenue. The scheme will be enforced soon.

The proposed NAIA development plan is an offshoot of an earlier directive by President Arroyo to the MMDA, MIAA and related agencies to undertake physical improvements at the NAIA complex and address the other concerns of all stakeholders in the airport.

Sunday, 25 May 2008

Photo updates NAIA 3 related infrastructure

Photo updates NAIA 3 related infrastructure (

Read updates on this project.

Whatever happened to JPEPA?

The Manila Times

First, it was Intel, the world’s largest manufacturer of computer chips, from which we heard news that it would have to make China—not the Philippines—its base for expanded activities in manufacturing more advanced products in Asia. Now, it is the United Parcel Service (UPS), the world’s largest package delivery company, which in 2010 will move its intra-Asian hub now at the Clark Freeport also to China.

But what is the Philippines doing in the face of all these setbacks? We are giving mixed signals to foreign investors. We cannot seem to put our act together.

One item that could offset the departure of such major investors as Intel and UPS is the Japan-Philippines Economic Partnership Agreement (JPEPA). The executive branch crafted it, of course with their Japanese counterparts, as a hedge in the event of an economic slowdown in the US, our number one trading partner, and throughout the world.

After protracted public hearings, which started late last year, the Senate seems to have relegated the treaty to the backburner.

This was done after the Japanese government indicated that it was not inclined to sign side agreements to the pact. Sen. Miriam Defensor-Santiago, chairman of the Senate foreign relations committee, has said that the Senate was willing to adopt the treaty but only through a “qualified concurrence” or subject to additional side documents that the two countries must agree and sign.

Of course this was not acceptable to the Japanese government because the Japanese Diet has already ratified the treaty without any side documents.

The Japanese government has earlier agreed to sign an exchange of diplomatic notes assuring that it would not export toxic waste or hazardous materials to the Philippines, an issue that has been used by anti-JPEPA critics to scare the senators from adopting the accord.

The diplomatic notes or protocols were signed by Foreign Affairs Secretary Alberto Romulo and his Japanese counterpart, then Foreign Minister Taro Aso during the official visit of President Arroyo to Tokyo in May last year.

But that assurance notwithstanding, the Senate asked for more side documents to correct what it termed as constitutional infirmities in the treaty.

Now, nobody knows when the treaty will be submitted to the Senate plenary for concurrence or whether it will be ultimately junked.

If the JPEPA is junked, we would be missing a great opportunity to cushion the impact of a full US and global recession.

First, our exports to Japan, our second biggest trading partner, will suffer. Japan would obviously prefer exports from countries with which it has bilateral economic accords such as Singapore, Malaysia, Thailand and Indonesia.

Second, direct foreign investments from Japan will also go to these four countries. Under the JPEPA, the Board of Investments has projected Japanese FDIs to increase to P222.5 billion by 2010. This additional investment could have generated some 350,000 new jobs.

Third, opportunities for foreign health workers would be opened to citizens from the four countries but not to the Philippines. This means that our Filipino nurses and care givers would not be able to take advantage of the higher salaries offered by Japan to these workers.

Fourth, without the JPEPA, the country would lose an expected increase in total tax revenues amounting to P7.7 billion as a result of increased economic activities and the surge of exports to Japan.

At the core of the treaty is liberalized trade in goods and services between Japan and Philippines. The effect of liberalized trade on employment is obvious. As tariffs on our agricultural and manufactured exports to Japan are eliminated or lowered, production in our farms and factories will expand, creating more jobs and helping solve the age-old problem of poverty in our country.

Our senators do not seem to look at things that way. Otherwise, they would do something about JPEPA right away. By dilly-dallying action on the JPEPA, they have become unwitting tools of the forces of retrogression and economic stagnation.