Saturday, 2 August 2008

Pres. Arroyo’s management of oil crisis praised by Washington Post’s senior energy writer

Oil Shock in the Philippines
Steve Mufson

Those of us who live in the United States have a tough time with high oil prices. But the Philippines doesn’t produce any of its own oil, and it’s having an even tougher time.

And that means tough times for the Philippines’ President Gloria Macapagal-Arroyo. Her popularity has fallen to a low point, lower than any president there since 1986, the year long-time leader Ferdinand Marcos was toppled from power. Moreover, while the nation’s growth rate is still good, inflation has climbed to 11.4 percent. Growth has slowed from 7 percent to 5.2 percent. Many members of Congress are demanding that Arroyo trim the 12 percent value-added tax on oil products, but she has refused. Tomorrow she is scheduled to deliver a nationwide address, and oil prices will be at the center of her talk.

Last week I talked to her secretary for trade and industry, Peter Favila. “Just like the other countries in the world, especially developing countries, everybody is suffering from the oil price,” he said.

Unlike many countries, which rely on coal or nuclear power, the Philippines still uses oil for electric power as well as transportation, so high prices have had a huge impact on utility rates as well as prices at the pump. (Hydropower provides 18 percent of the country’s electricity requirements, Favila said.)

One reason why some lawmakers in the Philippines want the value-added tax cut is that the higher the price of oil, the higher the tax revenues. So, they reason, the government can afford to cut the tax and give consumers a break.

But Arroyo, an economist by training, seems to have pursued a more sensible path. High prices will stimulate a drive to cut consumption, so she doesn’t want to blunt that incentive, which is important to help the country to start to reduce its reliance on oil. The Philippines has its own geothermal resources, the second biggest in the world after the United States, Favila said. The country could also develop solar and wind resources, and could encourage more efficent use of energy.

At the same time, Favila explained, the president is funnelling higher tax revenues from the oil tax to lower-income people, who have the most trouble coping with higher fuel prices. He said the government expects to collect about $1.7 billion from the taxes on fuel, more than usual. So it will put $420 million into fuel aid and other subsidies for the poor, up from $318 million last year. That's one-quarter of one percent of the country's GDP, which might not sound like much, but if the U.S. devoted a similar percentage of its GDP to fuel assistance programs, it would be spending about $35 billion a year -- not exactly pocket change. The Philippines has also put $90 million into social services in the last three months, he said. About $23 million has been set aside to help those who consume less than 100 kilowatts a month pay their utility bills.

“We are under pressure from lawmakers who say we should suspend the tax on imported oil products or lower the tax,” said Favila. “But what we’re trying to do is tax the rich who can regularly afford the pay and generate revenues to subsidize the poor. That is our program.”

Favila says Arroyo saw the threat of oil, credit and other economic pressures early last year. Dealing with it will take time, but now is the time to start even if prices come down in the months to come.

One can only hope that politicians in all countries, including our own, will avoid the easy tax solution and keep their eyes on the larger energy picture, as Arroyo has.

Wanted: 120 new immigration agents for NAIA 3

By Tarra Quismundo
Philippine Daily Inquirer

MANILA, Philippines—The Bureau of Immigration's office at the Ninoy Aquino International Airport (NAIA) is looking for 120 new immigration agents to fill counters at the newly opened NAIA 3 once the kilometer-long terminal opens in full in the coming months.

BI-Naia chief Ferdinand Sampol said 120 new immigration officers would be needed once NAIA 3 opens in full, expected to come in six to eight months as airport management continued repair and completion work in the facility.

“We are now short in agents because our operations were divided into three terminals. Some of the agents we have are only acting immigration officers or those who have a different plantilla position but work as agents,” said Sampol.

He said BI-NAIA would shuffle immigration officials at the old terminal to man 20 immigration booths at the new terminal, which started international operations Friday with flights of Cebu Pacific Air to Asian cities.

He said agents for NAIA 3 would be borrowed on per-flight basis from NAIA 1, where some 150 agents currently man departure and arrival counters.

“We have 10 counters at the arrival and 10 counters at the departure level. We do not have passport readers yet but we are fully computerized, we can process [machine-readable] passports manually for the meantime,” said Sampol.

The Manila International Airport Authority (MIAA) has announced that it would not accept any new airline transfers to NAIA 3 for the meantime while the terminal's closed sectors underwent repairs and finishing.

NAIA-3 finally hosts international flights

BusinessWorld Online

THE ONCE moth-balled Ninoy Aquino International Airport (NAIA) Terminal 3 finally hosted its first flights in and out of the Philippines yesterday, marking another step towards becoming the country’s premier gateway.

But the facility is still not 100% complete and it may take up to a year before other airlines, aside from Cebu Pacific and Philippine Airlines (PAL) brands PAL Express and Air Philippines, are allowed to use it, officials said.

Former task force NAIA 3 head Mike Defensor said the new terminal was running at 60% of its 13 million passengers-a-year capacity, a little over 10 days after it first opened for domestic commercial operations last July 22

Gokongwei-owned Cebu Pacific flew the first planes out and yesterday moved its international operations to NAIA-3. Both PAL Express and Air Philippines are domestic airlines.

Mr. Defensor, who has resigned from his appointed post after Cebu Pacific’s transfer, said airport officials will not let other airlines use the terminal until it is 100% ready.

Tirso G. Serrano, Manila International Airport Authority head of airport development, said it may take as long as a year before the airport is 100% complete. The automated baggage handling system is one of the things that still need to be worked out, he added.

NAIA-3 was supposed to open as early as 2002 but questions over the legality of the project contract led to the Supreme Court’s voiding the deal in 2003.

Legal issues have yet to be settled but the government has been able to operate the facility by paying an initial P3 billion in compensation to builder Philippine International Air Terminals Corp.

Friday, 1 August 2008

PGMA awards Country's Outstanding Policemen in Service (COPS)

President Gloria Macapagal-Arroyo poses with the 10 winners of the search for the 2008 Country’s Outstanding Policemen in Service (COPS) after she presented each of them a trophy and P200,000 in a simple ceremony held im Malacanang’s Ceremonial Hall. The commissioned officer cops awardees are P/Supt. Jonathan G. Calixto, Battalion Commander of the 1st Special Action Battalion of the PNP Special Action Force in Camp Bagong Diwa in Bicutan, Taguig City; P/Supt. Ronald O. Lee, division chief of the Police Anti-Crime and Emergency Response (PACER) in Camp Crame, Quezon City; P/Supt. Raynold A. Rosero, deputy chief of the Philippine Bomb Data Center Directorate for Operations in Camp Crame; and P/Supt. Alex B. Sintin, chief of the District Intelligence and Operations Unit of the Quezon City Police District; The non-commissioned officer cops awardees are SPO1 Annie Marie A. Anuary, chief of the Women and Children Concerns Desk of Zamboanga City Police Station 6; PO3 Anna Liza R. Reyes, human rights desk officer and finance and police community relations officer of the Antipolo City Police Station; SPO2 Josefa L. Lacandula of the Women and Children Concerns Desk of the Dumaguete City Police Station; SPO2 Oscar P. Bandoy, intelligence officer of the Intelligence Research Section of the Police Regional Office 8 in Camp Kangleon, Palo, Leyte; PO3 Dandy G. Ferriol, investigator of the Masbate Police Station in Masbate City; SPO1 Eman DM Orivida, operations sergeant of the 416th Police Provincial Mobile Group based in Macalelon, Quezon.

Philippine Olympic athletes call on President

For the latest Philippine news stories and videos, visit GMANews.TV

PGMA raises cash pot for first RP Olympic gold to P15 million

President Gloria Macapagal–Arroyo raised today from P10.5 million to P15 million the cash pot for the gold medal that Team Philippines will win in the 2008 Beijing Olympics which unreels Aug. 8 in the Chinese capital.

The President made the announcement during the courtesy call of Team Philippines on her at Malacanang’s Heroes Hall this afternoon.

“Congratulations and good luck,” the President said, as she shook hands with the athletes while encouraging them to bring home the Olympic gold that has proved elusive to the Philippines.

An Olympic gold medal would be first for the Philippines. The country has been participating in the World Games for 84 years, or since 1924, but has come up with only nine medals, none of them gold.

The Philippine Olympic Commission had earlier announced that the athlete who wins the first Philippine Olympic gold will receive P10.5 million. The President added P4.5 million to the kitty, upping the total cash pot to P15 million.

The President also gave $1,000 allowance to each of the athletes.

The last time the Philippines won an Olympic medal was in 1996 during the Atlanta Olympics when Mansueto ”Onyok” Velasco returned home with a silver.

In this year’s Olympic Games in Beijing from Aug. 8 to 24, the Philippines is sending 15 athletes who will compete in eight sports disciplines: boxing, taekwondo, shooting, archery, diving, swimming, athletics, and weightlifting.

The athletes and their corresponding fields of competition are as follows: Mark Javier (archery); Henry Dagmil and Maristella Torres (athletics); Henry Tanamor (boxing); Miguel Molina, James Wlsh, Ryan Arabejo, Daniel Coakley, and Christel Simms (swimming); Rexel Ryan Fabriga and Sheila Mae Perez (diving); Tshomlee Go and Mary Antoinette Rivero (taekwindo); Eric Ang (shooting); and Hidilyn Diaz (weightlifting).

The athletic delegation was accompanied to Malacanang by Philippine Olympic Committee (POC) President Jose Cojuangco Jr., Philippine Sports Commission Chair William Ramirez ,and Chef de Mission Monico Puentebella.

Team Philippines turned over to the President a set of the official uniform of the delegation, and the Chief Executive gamely put on a jacket.

In return, the President turned over to the Olympics-bound team the Philippine flag that reigning World Boxing Council lightweight champion Manny Pacquiao will carry during the parade of nations.

The Filipino boxing idol was appointed by the President as the country’s special Olympics envoy and flag-bearer during the parade of nations.

The President was also presented her and the First Gentleman’s accreditation papers to watch the Aug. 8 opening of the Beijing Games.

Philippine athletes warm up for Beijing

For the latest Philippine news stories and videos, visit GMANews.TV

Half a T3, better than none

Jojo Robles
The Manila Standard

Right now, it’s only half an airport terminal, pressed suddenly into service after lying fallow for nearly six years. But the Ninoy Aquino International Airport Terminal 3 looks truly impressive and world-class. And if the people in charge of maintaining the facility don’t fall down on the job, the terminal could be something we can all be proud of for many years to come.

As a journalist, I’ve done my share of travelling for years and I’ve always been amazed at how a country that virtually exports people by the millions each year can have such lousy airport terminals. In recent years, especially, when flying has finally replaced disaster-prone ferry boats as the primary means of domestic transportation for many Filipinos with the arrival of affordable budget carriers, the fact that we have some of the most decrepit and primitive terminals worldwide boggles the mind.

But the partial opening of Terminal 3 last week looks to change all of that. It took three administrations, seemingly unsolvable legal problems and serious (and lingering) doubts about safety and serviceability, but what was once derided as the biggest white elephant since the Bataan Nuclear Power Plant is finally open.

The new-old terminal is reputed to be twice the size of the so-called Centennial Terminal (Naia 2) used exclusively by flag-carrier Philippine Airlines and three times as large as the old Naia 1 still being used by the foreign airlines. Once it operates at full capacity, “T3” will able to handle 13 million passengers annually, ramping up the total capacity for all three Manila airports to 25 million people a year.

And the new terminal’s huge size can be felt immediately upon entering the cavernous entrance. That, and the cool airconditioning that’s sure to be a welcome respite for people who have to stay for hours at a time in the terminal before taking a plane that will get them to where they want to go.

Starting today, early T3 mover Cebu Pacific Air of the Gokongwei family will be flying all its planes (including those on its international routes) out of the terminal, after years of being treated like a second-class citizen at the airport. Moving to the spanking-new terminal from the old domestic hangar that it’s been using, in the words of one Cebu Pac official, is “like moving to a mansion after living in a hovel.”

The transfer to T3 (where Cebu Pacific has been allocated a total of eight gates) makes the upstart budget carrier’s goal of ferrying seven million people this year eminently attainable. Last week, the airline of Lance Gokongwei started flying all 110 domestic flights out of T3, beginning with a dawn flight to Caticlan using a turbo-prop jet with 48 people aboard.

Not to be outdone, Lucio Tan’s PAL moved its two budget carriers—Air Philippines and PAL Express—to T3 as well, its first flights coinciding with the visit of President Arroyo to the new terminal. (A PAL statement says it was actually the first to use T3, where the airline’s chartered flight with the President aboard touched down upon her arrival from her recent state visit to the United States.)

* * *

There’s still a lot of work to be done before the new terminal is up to spec, however. Right now, only the north wing of T3 is being used, apparently because the southern portion of the building is still being checked and refurbished.

While the terminal’s airconditioning system seems to be functioning very well (so unlike the cranky, unreliable one at Naia 1) many parts of the occupied north section still lack paint. While we were there, the public-address system was obviously still being tested—any traveller automatically pays attention to the introductory chimes of the airport PA system, but last week at T3, the only announcement we kept hearing was “Mike, test. Test, mike.”

Also, only five of the so-called “bus gates” on tarmac level were being used when we visited. The upper-level tubes—the same ones that will give T3 the capacity to handle up to 28 planes at any given time—were still not functioning, although the departure areas outside these above-ground walkways were already being prepared.

The whole terminal—the part already in use, anyway—looked and smelled of newness, like a shopping mall that hasn’t been fully occupied yet. Even the toilets (another major pain for people who use Naia 1) were clean and fully-functioning. The floor tiles gleamed and lighting was adequate.

But while T3 looks like a worthy rival right now to Singapore’s Changi, Hong Kong’s Chek Lap Kok and all the other great international terminals that it wants to go head-to-head with, only proper maintenance will ensure that T3 doesn’t go the way of the flea market-cum-provincial bus terminal that Naia 1 has deteriorated into. One airport official says that reforms in the government procurement process, at least for the new terminal, could help ensure that T3 remains spic-and-span “because everything has to go through red tape, bidding and awarding, even for the chairs of the immigration people, bearings for the conveyor belts and fan belts for the air conditioners.”

Still, at T3, the Manila International Aiport Authority of general manager Alfonso Cusi has a golden opportunity to start fresh and make sure that the old bad habits and practices that bedevilled Naia 1—and the Centennial Terminal, to a certain extent—are avoided. Traffic can be better controlled, especially with the proposed P20 shuttle linking all three terminals, and with the soon-to-be-completed flyover on the South Superhighway outside the Villamor Air Base. Now, if he could only find a way to put an end to the practice of allowing busloads of well-wishers to meet every single arriving passenger, Cusi will have done his job.

These days, when there seems to be precious little to feel good about, the half-opening of T3 is bound to make travelling Filipinos a little prouder when they take a plane to go somewhere or to get home. Sure, at the end of the day, an airport terminal is only a way station, a holding area for people on the way to somewhere else.

But it makes us feel good as Filipinos to have such a good face to show to people coming in, and to see that same face when we leave for someplace else, as well.

Travel papers still processed manually at Terminal 3

Vito Barcelo, Joyce Pangco Pañares
The Manila Standard

For now, it’s the old fashioned way of clearing travel documents by the Immigration bureau at the Ninoy Aquino International Airport Terminal 3, according to a functionary.

Supervisor Ferdinand Sampol said a 30-member staff have been fielded to man the counters and do monitoring and investigation tasks as Cebu Pacific started its international flights at the facility today.

“We will have to do the manual processing as we have yet purchase another reading machines. We will have to use the laptops but will be connected to the main computers at the Naia 1,” he said.

Customs Naia collector Ricardo So said at least 20 employees would cover two shifts.

Naia 3 has spacious check-in area with 28 counters allocated to Cebu Pacific versus 22 at the cramped Domestic Terminal to the relief of the airline’s passengers, according to spokesman Candice Iyog.

A flight from Macau arriving 12:10 a.m will be followed by a 7 p.m. schedule to Hong Kong, returning at 11:55 p.m. as Cathay Pacific [sic] moves its entire domestic and international operations to the new terminal.

“Naia 3’s opening is a welcome development for us especially since we have outgrown both the domestic passenger terminal and Naia 1,” said Cebu Pacific president and chief executive Lance Gokongwei.

Philippine Airlines Express and Air Philippines have recently followed by transferring their domestic passenger and cargo flights.

General manager Alfonso Cusi of the Manila International Airport Authority said the facility is served by airport taxis and shuttle buses and a parking section for at least 2,000 vehicles.

Cebu Pacific covers 33 routes to 24 domestic destinations on 848 flights a week along with 19 routes to 16 Asian cities on 230 international flights weekly.

Ashmore here for ‘the long haul’

By Paul Anthony A. Isla
The Business Mirror

“WE’RE here for the long haul.”

This is what Petron Corp.’s new owner and fund manager Ashmore Group said on Thursday at the sidelines of Petron’s stockholders’ meeting.

“We are typically a long-term investment partner in a country where we do business with,” said Craig Webster, Ashmore head of legal and transaction management.

Webster is one of the four directors appointed by Ashmore along with Ashmore’s senior fund manager Seumas Dawes and Filipino businessmen Roberto Ongpin and Eric Recto.

Ashmore is a global asset-management company listed on the London Stock Exchange with assets totaling some $36.5 billion.

Ashmore acquired Saudi Aramco’s 40-percent stake in Petron for $550 million through its corporate vehicle SEA Refinery Holdings.

“As a long-term investor, we are willing to pour in additional capital to expand Petron’s business operations,” said Webster, adding that they will put in more as the business requires.

Webster admitted that they have yet to look at any possibility for the moment should the government decide to sell its remaining 40-percent interest in Petron.

“We will exercise our option at the right time. But the buyer should also get our consent since we have the option to exercise the first offer,” Webster said.

Ashmore earlier informed the Philippine Stock Exchange that it now has 50.75 percent of Petron’s total outstanding shares upon completion of its tender offer to other owners of the oil firm.

The issuance of the tender offer is in compliance with the Securities Regulation Code that requires the group to acquire at least 30 percent of a listed company’s equity within 12 months to protect shareholder interests. Unless beneficial to its shareholders and to public interest, the government earlier said it is not keen on taking advantage of the possible tender offer by Ashmore Group’s SEA Refinery Holdings or selling its stake in Petron Corp.

Ashmore bought the 40 percent of the Petron shares held by Saudi Aramco for $550 million.

The government said that if it sells the balance of 40-percent to Ashmore under this tender offer, Ashmore would automatically control 80 percent. But the government deems that selling its 40-percent interest in Petron should be done and sold at a premium considering that it is turning over control.

Owing to fiscal constraints and a policy that negates reverse privatization, PNOC earlier waived its right to purchase the 40-percent stake of Aramco Overseas Co. B.V. (AOC) in local refiner Petron Corp., giving instead the green light for Aramco to sell its shares to Ashmore.

PNOC, which separately owns 40 percent of Petron—with the remaining 20 percent of shares publicly traded on the Philippine Stock Exchange (PSE)—had, in effect, waived its right to first offer.

Consortium backs out of LRT loop part; MIESCOR interested in bid

Paolo Luis G. Montecillo
BusinessWorld Online

THE CONSORTIUM formed by Lopez-led First Balfour, Inc. and the Consunjis’ DMCI Holdings, Inc. has abandoned its bid for the computer and electronic component of the Light Rail Transit (LRT) loop project, citing the project’s constrictive budget.

In an interview, First Balfour Senior Vice-President Rey G. Villar said the company would not bid for the project anymore since it had ceased to become a profitable investment.

Construction of packages A1, A2 and B covering the main structures of the project worth P5.9 billion — awarded to the DMCI-First Balfour consortium — started on July 9. Bidding for package C of the project, which involves installation of signal and wiring equipment, failed in April after DMCI-First Balfour, the only party qualified to join the bidding then, did not submit documents.

Light Rail Transit Authority (LRTA) Administrator Melquidades A. Robles told BusinessWorld there were challenges in the pricing of the final phase of the project, having been quoted two years ago.

He said prices of copper and steel — two main components of package C — had gone up to unexpected levels. But the fact that there are still bidders means that there is no need to revise the project’s budget, he added. Mr. Robles said the whole LRT loop project is "still on schedule." LRT officials expect the link to be completed in time for the next presidential elections in May 2010.

Meanwhile, a unit of the country’s largest power distributor, the Meralco (Manila Electric Co.) Industrial Engineering Services Corp. (MIESCOR), plans to bid for the project.

"We can do [the project] 100%... We have the capability and track record," said a MIESCOR official who did not want to be identified.

He said the firm was still estimating the costs, adding that they have until Aug. 19 to submit an offer to the LRTA. The decision to bid for the project would still depend on the potential profit, the official said, adding that they would not compromise the quality of construction to cut costs.

He declined to comment on whether the company would ask the government to revise the budget. Several firms have also expressed interest in the project, Mr. Robles said.

The LRT loop will connect the LRT-1, which runs from Baclaran to Monumento, with the Metro Rail Transit (MRT-3), which traverses EDSA from Pasay City to North Avenue in Quezon City. The P6.4-billion project that will connect the two lines through the LRT-1’s Monumento station in Caloocan and the MRT-3’s North Avenue station is meant to alleviate traffic in the metropolis.

Everything ready for Cebu Pacific’s transfer to Terminal 3


BusinessWorld Online

THE NINOY Aquino International Airport Terminal 3 (NAIA-3) will move a step closer to reaching its full potential today as low-cost carrier Cebu Pacific Air, Inc. transfers its domestic and international operations to the once mothballed airport.

"It’s all systems go," Tirso G. Serrano, Manila International Airport Authority (MIAA) assistant general manager for airport development, said in an interview yesterday.

He said the Gokongwei-owned carrier’s transfer is a big milestone for the government since it can carry about six million passengers a year.

Mr. Serrano said the newly opened terminal is comparable to modern terminals in neighboring countries, but added that it still needs some improvements.

"We will be concentrating our efforts on improving [the terminal]... We really have to play catch-up with the rest of the world," he added.

After being idle for six years due to a legal dispute, the NAIA-3 finally opened on July 22, with Cebu Pacific partially transferring domestic flights to the terminal. Domestic flights of rival Philippine Airlines’ (PAL) low-cost brand, PAL Express, and unit Air Philippines moved to the terminal two days later.

The airport was conceptualized in the early 1990s and German consortium Philippine International Terminals Co. (Piatco) won the bidding for the project in 1997. The project broke ground that year and an opening was set for 2002.

But allegations of impropriety led to the Supreme Court nullifying the German group’s contract in 2003. Questions about the legality of the move and how the builder could be compensated led to lawsuits in both local and international courts by Piatco and its German partner, Fraport AG. The cases are yet to be resolved.

The MIAA has a court-approved possession of NAIA-3 after it paying Piatco a P3-billion downpayment in 2006. But it has yet to exercise full ownership of the property since it has not fully paid the balance.

The NAIA-3 is expected to decongest the metropolis’s airport system, consisting of the NAIA Terminal 1, the old Domestic Terminal; and NAIA Terminal 2, which is exclusive to PAL.

MIAA officials have said the old airport system, designed to handle 18 million passengers, was handling about 20 million passengers a year.

Mr. Serrano said they still have to work on the airport’s automatic baggage system. The terminal is expected to be in full swing by February 2009.

Cebu Pacific President and Chief Executive Officer Lance Y. Gokongwei earlier said the NAIA-3 is a welcome development for the carrier, which had outgrown both the domestic passenger terminal and NAIA-1.

Cebu Pacific operates 33 routes and 24 domestic destinations and operates 848 local flights per week. The airline also operates 19 international routes to 16 cities in Asia, offering 230 international flights a week. Operating both domestic and international flights under one roof should make the carrier more efficient.

Meanwhile, Rolando C. Estabillo, PAL vice-president for corporate communications, said the airline was in no hurry to move to the NAIA-3.

Except for PAL Express, all PAL flights fly out of the NAIA-2 or Centennial Terminal.

Meanwhile, Cebu Pacific is set to serve the General Santos City-Cebu City route starting Aug. 15, posing a challenge to PAL Express, which has been flying the route daily since May.

Candice Iyog, Cebu Pacific vice-president for marketing, said they would fly the route on Mondays, Wednesdays and Fridays. The plane will leave Cebu at 10:30 a.m. and arrive in General Santos an hour later. It then leaves for Cebu at noon.

"We will continue to expand our operations and will offer the lowest all-inclusive fares especially to new routes that have not been exposed to our low fares," Ms. Iyog said.

The carrier is offering an "all-in" airfare of P999 for flights between Aug. 15 and Nov. 30. The seat sale elapsed last week.

Cebu Pacific’s new route follows increased flight frequency from General Santos to Manila.

On top of its daily afternoon flights since October 2006, Cebu Pacific added morning flights to Manila and back every Monday, Wednesday and Friday.

Ms. Iyog said Cebu Pacific would also increase flights from Manila to Cotabato City in Central Mindanao from five times a week to daily, also starting on Aug. 15.

General Santos, the economic hub of Central Mindanao, is about four hours from Cotabato City.

Cebu Pacific’s provincial expansion will continue even as it expects to post losses in the second half due to high fuel costs and a traditional drop in air travel during the rainy season.

On Wednesday, Mr. Gokongwei told reporters demand for travel would continue to grow because of low fares, but rising oil prices continue to threaten profits. — with Romer S. Sarmiento

Thursday, 31 July 2008

Superwoman at the SONA

by Joey Concepcion
Thursday, July 31, 2008
The Philippine Star

This time, there was something special in the SONA for Go Negosyo. I was asked to attend since the President will be acknowledging the efforts of Go Negosyo in helping spur entrepreneurial development in the Philippines.

Click on the image to view SONA video For the past two and a half years, Go Negosyo has touched the lives of so many people, especially the micro and small entrepreneurs and young Filipinos. PGMA's acknowledgment in the SONA felt like receiving the Ramon Magsaysay Award. But, this acknowledgment is not for me but for the cause we represent. For our country to progress, we need to change the attitude of our kababayans into something positive and entrepreneurial. This is our advocacy. This means finding opportunities in every crises, finding solutions rather than dwelling on the problems… in "lighting a candle instead of cursing the darkness". This is the cause our community of entrepreneurs, advocates, the Micro SME Council members, and our corporate partners have firmly believed in.

This recognition is for the trustees of Go Negosyo who share the same vision: Tony Tan Caktiong, Joselito Campos, Felipe Gozon, Dr. Rolando Hortaleza, Carla Limcaoco, Ramon Lopez, Imelda Madarang, Socorro Ramos, Harley Sy, Vivienne Tan, Gov. Lray Villafuerte, Myla Villanueva, and Vicente-Andres Zaragoza and to the hundreds of active advocates and mentors who are dedicating time to reach out and 'pay forward' this time to the other aspiring entrepreneurs.

People ask me - how did I find the President's speech and why did she cite problems affecting the world such as the oil and food crisis. PGMA, in a way, reminds me of 'Superwoman', full of energy and with nerves of steel. She came face to face with the men and women in congress, even with what the news earlier stated that she has one of the lowest ratings. The President definitely has nerves of steel. I have to give it to her. She has gone through a lot of external challenges and survived. She deserves credit for helping this country attain record growth in 2007, sustaining the gains of earlier years.

In this year's SONA, PGMA was stressing that the Philippines is ready to weather the worst that could be brought about by the economic problems in America. In one of my previous columns entitled "Superman meets a kryptonite economy", I likened America to Superman, trying to save the world but ended up being in trouble.

The high price of oil and commodities are beyond our control. It is true that the economies of the world's highly-populated countries like China and India are growing and their people's purchasing power are increasing, affecting world demand. But the current hike in commodity prices are led mainly by hedge funds who bet on oil and commodities as they move higher, adding to their speculative nature.

Let's admit that the Philippines is in a much better situation in facing global challenges, since it is close to balancing its budget and has achieved a current account surplus. Pockets of opportunities in certain growth sectors like tourism, business process outsourcing, call centers, telecommunication and information technology niches have kept the country's growth potentials at high levels. I remember Mar Roxas, who was then the Trade Secretary under PGMA. He made these developments as one of his priorities, as he was supported by his boss PGMA. Moreover, overseas workers continue to contribute a lot to the country's GNP.

Today, positive developments have helped erase an oversupply in office space and have spurred the growth of more office condominiums, call centers and BPO buildings. Residential condominiums also continue to grow, since more people can now afford to buy homes. So, yes, the Philippines is in a much better situation in spite of a global slowdown. The growth in the real estate sector is a testimony that more people can now afford to buy homes. But, what happens to the people who cannot afford? This is where the VAT on oil can go to. We agree that government has to help provide the basics to specially-targeted poor communities. It is important that their basic needs are met, before they can think of getting into negosyo. Of course, the more enterprising one would take on a negosyo at once to improve his condition, starting very small, but working her/his way up the ladder, with sheer determination, financial discipline and creativity.

This is where government policies and programs must continue to support an entrepreneur-friendly environment, like tax relief for the microentrepreneurs, increase in micro-lending programs (with the passage of the Magna Carta for Micro Small and Medium Enterprises), or have bills that would provide tax exempt to coops and micro-lenders for a period of time. The VAT on oil will cover for any shortfall and would allow government to provide help to specific sectors in most need. We cannot keep changing the rules. With market forces influencing prices, eventually the price of oil will go down as it has gone down to 120 dollars and by year end, we may even see oil at levels of 100 dollars. Who knows by next year, it can be down to 80 dollars. High oil price will force people to change lifestyle, force people to save energy, ride the MRT, do carpooling, plan travels better, buy smaller cars. We can prod the government to develop more public transport systems, more LRT's, MRT's covering wider areas. Developing the north and south railways to bring down freight and transport costs are needed, following the models of America, Japan and even Europe. There is merit in accelerating the development of alternative energy source, or push for more exploration which we now see in Galoc, and others to follow. Even now, taxi's and private vehicles convert to LPG. Without oil being this high, we wont see an acceleration of efforts in this direction. This crisis situation, as we can see, presents new opportunities for entrepreneurs. As the whole world goes in this direction, there is no way but for oil prices to go down.

In a democratic environment, which we have today, it is almost difficult to please everybody. In the end, the real judgment of achievement is not measured through ratings but through factual successes in economic targets. The final report card will come in 2010, when she does transfer her leadership to the next Philippine President. You can only imagine the kind of report card President Bush will have as he transfers his leadership to the next American president. America, today, is at the brink of the worst recession or depression, with a humongous trade and budget deficit that so many generations of Americans will have to pay for. The almighty dollar which was once 85 cents to the Euro is now 1.57 to the Euro - close to 100% depreciation.

PGMA has to continue to move on, even if her decisions are not popular. She has nothing to lose as she is not running for re-election. She has to pursue the infrastructure development of more super highways and more airports. This will further allow the transportation of goods at lower prices and open great opportunities for the negosyantes, in terms of tourism and agriculture. Farmers will benefit the most, with their products being able to reach the market on time and at the lowest cost. By allowing greater competition in airlines, we see now lower prices of airline tickets despite jet fuel going up. Now with Fred Yao, one of Go Negosyo supporters, buying into Asian Spirit, we will see further competition and hopefully more areas of the Philippines will be covered.

The next area which PGMA mentioned in her SONA is self sufficiency in rice. Henry Lim Bon Liong, a Go Negosyo advocate, has always been pushing for high yielding varieties and hybrid rice. He has proven that farmers using hybrid rice have higher yields per hectare. PGMA has also mentioned in her SONA how her government's relentless pursuit of completing new irrigation systems in vast track of lands have helped Edwin Bandila of Carmen, Cotabato increased his irrigated farmland and rice yield from 35 to 97 cavans per hectare. While I am a believer of free trade, I support the position to allow protection of certain industries, if it means ensuring sufficient supply of basic items especially rice. Free trade must also mean fair trade. Some countries would export items that are in effect subsidized and thus are exported at lower prices, thus unduly hurting local producers.

PGMA is indeed a superwoman, an avid scuba diver who releases her stress under the sea. Maybe the silence underwater gives her the tranquility and peace even for just that moment. She has one and a half years to go, lets help her succeed, because her success is the Filipinos' success. To those who just cannot resist, it might help to read the nice email being sent around, entitled "Ducks quack, Eagles fly".

Ducks quack, Eagles fly:

"Years ago, my friend, Harvey Mackay, told me a wonderful story about a cab driver that proved this point. He was waiting in line for a ride at the airport. When a cab pulled up, the first thing Harvey noticed was that the taxi was polished to a bright shine. Smartly dressed in a white shirt, black tie, and freshly pressed black slacks, the cab driver jumped out and rounded the car to open the back passenger door for Harvey . He handed my friend a laminated card and said: "I'm Wally, your driver. While I'm loading your bags in the trunk I'd like you to read my mission statement." Taken aback, Harvey read the card. It said: Wally's Mission Statement:"To get my customers to their destination in the quickest, safest and cheapest way possible in a friendly environment.

This blew Harvey away, especially when he noticed that the inside of the cab matched the outside. Spotlessly clean!

As he slid behind the wheel, Wally said, "Would you like a cup of coffee? I have a thermos of regular and one of decaf." My friend said jokingly, "No, I'd prefer a soft drink." Wally smiled and said, "No problem. I have a cooler up front with regular and Diet Coke, water and orange juice." Almost stuttering, Harvey said, "I'll take a Diet Coke." Handing him his drink, Wally said, "If you'd like something to read, I have The Wall Street Journal, Time, Sports Illustrated and USA Today."

As they were pulling away, Wally handed my friend another laminated card. "These are the stations I get and the music they play, if you'd like to listen to the radio."

And as if that weren't enough, Wally told Harvey that he had the air conditioning on and asked if the temperature was comfortable for him. Then he advised Harvey of the best route to his destination for that time of day. He also let him know that he'd be happy to chat and tell him about some of the sights or, if Harvey preferred, to leave him with his own thoughts.

"Tell me, Wally," my amazed friend asked the driver, "have you always served customers like this?"

Wally smiled into the rearview mirror. "No, not always. In fact, it's only been in the last two years. My first five years driving, I spent most of my time complaining like all the rest of the cabbies do. Then I heard the personal growth guru, Wayne Dyer, on the radio one day. He had just written a book called You'll See It When You Believe It. Dyer said that if you get up in the morning expecting to have a bad day, you'll rarely disappoint yourself. He said, 'Stop complaining! Differentiate yourself from your competition. Don't be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd.'"

"That hit me right between the eyes," said Wally. "Dyer was really talking about me. I was always quacking and complaining, so I decided to change my attitude and become an eagle. I looked around at the other cabs and their drivers. The cabs were dirty, the drivers were unfriendly, and the customers were unhappy. So I decided to make some changes. I put in a few at a time. When my customers responded well, I did more."

"I take it that has paid off for you," Harvey said. "It sure has," Wally replied. "My first year as an eagle, I doubled my income from the previous year. This year I'll probably quadruple it. You were lucky to get me today. I don't sit at cabstands anymore. My customers call me for appointments on my cell phone or leave a message on my answering machine. If I can't pick them up myself, I get a reliable cabbie friend to do it and I take a piece of the action."

Wally was phenomenal. He was running a limo service out of a Yellow Cab. I've probably told that story to more than fifty cab drivers over the years, and only two took the idea and ran with it. Whenever I go to their cities, I give them a call. The rest of the drivers quacked like ducks and told me all the reasons they couldn't do any of what I was suggesting.

Wally the Cab Driver made a different choice... He decided to stop quacking like ducks and start soaring like eagles.

No one can make you serve customers well. You make the choice. That's because great service is a choice.

More update pictures of NAIA 3


Philippines still on mining radar; patience required

Reporting by Carmel Crimmins; Editing by Michael Urquhart
Thomson Reuters

* Still sticking to mining investment goal despite paltry inflows so far
* Chinese, Japanese firms joining others in exploration
* Important for foreign firms to have a local partner

MANILA, July 31 (Reuters) - Mining groups from Brazil to Australia are combing the Philippines for copper, nickel and gold but patience is required to see a return on investment, a top official said on Thursday.

Disagreement over contracts, communist rebel attacks, financial difficulties and local opposition have stalled some existing mining projects in the Philippines but with metal prices still high, overseas and local investors remain attracted to the Asian country's resources.

"The trend is going up," Horacio Ramos, director of the Mines and Geosciences Bureau (MGB), which issues exploration and mining permits, told Reuters in an interview.

Although only $68 million worth of investments were recorded in the first quarter, bringing total private funding in the minerals sector to around $1 billion since late 2004, Ramos said Manila was sticking to its goal of attracting $837 million worth of investments this year and $10.4 billion by 2011.

He pointed to plans by China's largest listed gold producer Zijin to raise its investment in a cold-copper project in the north to 60 percent and Ramon Ang, the president of food and drinks giant San Miguel, aiming to develop an iron ore deposit on the central island of Mindoro.

Both Zijin and Ramon Ang will receive financial and technical assistance agreements (FTAA) from the government, underlining that these will be large-scale projects.

Only two FTAAs have so far been issued in the Philippines. The last one was in 1995 for the Tampakan copper prospect, possibly one of the world's richest, held jointly by Xstrata Copper and Australia-listed Indophil Resources.

He said the government planned to alter the FTAAs this year to double the minimum level of investment to $100 million.

Ramos said China's CITIC Resources was interested in the Nonoc nickel mine in the south and Japanese companies, conscious of Chinese competition, were also on the prowl.

Pacific Metals, Japan's top ferronickel maker, has set up an office in the Philippines, Ramos said.

"I think the Japanese are worried if they do not invest in exploration then most of the minerals will go to China."


There are over 30 foreign companies with investments in the Philippines mining sector, including Brazil's Vale, world No.1 BHP Billiton and Anglo American.

Most of the projects are still at the exploration or feasibility stage and it will be years before production starts.

Manila was hoping that the Didipio gold-copper project, run by Australia's OceanaGold, would be up and running in the first half of 2009 but that has been delayed to the second half, at the earliest, due to rising costs and following a disagreement with the local government over payment for a quarrying permit.

BHP Billiton, meanwhile, is at loggerheads with its local partner Asiaticus, which has accused the larger group of moving too slowly in the development of their nickel project. The national government is trying to resolve the conflict.

"Those are part of the occurrences that accompany the development of the mining industry," said Ramos.

"If there are increasing investments on the ground there is always an increase in conflict."

One of the biggest challenges facing foreign mineral groups is overcoming local opposition to mining, often supported by a vocal network of NGOs and, in some cases, by powerful Catholic bishops.

Ramos said overcoming this opposition often required retaining a local equity partner.

"Companies have to be patient, they have to understand the cultural approach to the Philippines. My suggestion is that they should not go 100 percent foreign.

"They should go maybe 90 percent foreign, 10 percent Filipino to take care of the cultural approach. To take care of the political aspects."

President launches enhanced food for school feeding programme

GMA LAUNCHES THE "ENHANCED" FOOD FOR SCHOOL FEEDING PROGRAM -- President Gloria Macapagal-Arroyo entices a young elementary pupil of Flora East Central Elementary School to eat well as she leads the feeding of arroz caldo with malunggay powder to school children during the launching ceremony of the "enhanced" version of her highly successful Food for School Program (FSP) Thursday (July 31, 2008) at Barangay Poblacion, Flora, Apayao. The "enhanced FSP, dubbed as the National Supplemental Feeding Program, will provide public elementary students from pre-determined areas in the country with porridge (lugaw) everyday they attend classes. (Rolando Mailo/OPS-NIB Photo)

Overseas Filipinos transferred $17B, not $14.4B, in 2007

By Jun Vallecera
The Business Mirror

THE Philippines received $17 billion in foreign remittances last year, compared with $14.4 billion as reported by the Bangko Sentral ng Pilipinas (BSP), the Economist Intelligence Unit (EIU) said.

In its July 2008 report, the research and analytical arm of London-based The Economist magazine said this made the Philippines the fourth-largest in terms of total foreign remittances after India, China and Mexico.

These countries received $27 billion, $25.7 billion and $25 billion last year, respectively.

The EIU report, commissioned by remittance giant Western Union, sought to uncover the areas through which that much money flowing to emerging economies such as the Philippines could be put to good use.

The report validated the conventional wisdom that much of the money is not invested and is applied instead against consumption activities as the purchase of refrigerators and cars. The EIU report means some $2.6 billion passed through unofficial channels such as door-to-door services and through friends and relatives of overseas Filipinos.

BSP Governor Amando Tetangco Jr. said in a text message that $14.45 billion was remitted back to the Philippines by more or less 8 million Filipinos overseas.

The amount excludes an estimated $500 million that passed through unofficial channels, Tetangco said.

Remittances this year should reach $16.4 billion, according to an earlier projection by the BSP, he added.

The EIU study found that in countries such as Bangladesh, Brazil, Mexico, Nicaragua and El Salvador, the bulk of the remittances were used to purchase food and clothing.

Bangladeshis saved less that 7 percent of the money repatriated by nationals, Brazilians 4 percent, Mexicans 14 percent and Nicaraguans and recipients in El Salvador 2 percent, according to the study.

This is a pitiful situation as more than 1 billion people worldwide derive direct economic benefits from the remittance flows, the EIU said.

Government hopes to hike palay procurement from Central Luzon farmers

By Carlos Marquez Jr.
The Business Mirror

THE government, hoping to beef up its stocks of local rice with the targeted procurement volume from Central Luzon, sees a more earnest farming activity after the President had announced a P7-billion rice-production budget.

The National Food Authority (NFA) in Central Luzon aims to buy some 1.2 million bags from the farmers this year even as the procurement volume in last summer harvest season was low. The national target is 1.5 million bags.

The announced P7-billion rice-production budget will be infused to microfinancing institutions, thrift banks and rural banks throughout the country by the Land Bank of the Philippines, said Agriculture Secretary Arthur Yap in a national radio program Tuesday morning.

This is one form of providing incentives to the country’s rice farmers to ensure a steady supply of the staple, the other being the recently announced P1,700 given to each farmer selling 50 bags of unmilled rice to the state-owned food agency, Yap said.

Yap is optimistic the government can get a share of 10 percent from the domestic rice production this year. In the past two years, records showed the NFA had bought less than 1 percent of the country’s total rice production.

Rice growers in Central Luzon, however, are still reluctant to sell their produce to the NFA at P17/kg because the prevailing buying cost in the private trading stations is within the P20/kg-and-P25/kg bracket.

NFA Central Luzon manager Nicolas Crisostomo said it is just right as the government was able to play the role of palay “buyer of last resort,” and that is procuring the farmers’ harvest only when the private sector’s buying price is low.

Philippines to weather storm – economist

By Katherine Adraneda
The Philippine Star

A former head of the National Economic Development Authority (NEDA) has expressed optimism that the country could weather the prevailing ‘economic storm’ even as he projected that the Philippines still has to feel “a period of tightness” in the next two years amidst a persistent downturn in the global economy.

Dr. Cayetano Paderanga Jr., a professor at the UP School of Economics and socio-economic planning secretary during the Aquino administration, said that remittances from overseas Filipino workers (OFWs) “would carry us through”, but noted that the country could have coped better with an improved investment picture.

“Should we worry? There will be pain but maybe worrying too much is too much. We will survive this eventually,” he said during an interview at the sidelines of the mid-year economic briefing of the Institute for Development and Econometric Analysis, Inc. (IDEA) held the other day at UP Diliman.

Paderanga pointed out that the country has experienced a rather similar economic crunch in 1997 — the Asian crisis, and the country was able to surpass the challenge.

However, he believes that this time around the “global crisis’ shock is sharper.”

Paderanga said that from recorded data on “main growth drivers” such as Services sector, which includes Trade, Finance, Transportation, Communication, Storage (TCS), and private services, for the last quarter of 2007, the Finance sector appeared to be the only one that grew, aside from real estate, from 10.7 percent to 12.9 percent in the first quarter of 2008 mainly due to either increased loans or belt-tightening amdist rising inflation.

As for the expenditure-side growth, Paderanga said that almost all areas slipped during the first quarter of 2008. He said that personal consumption expenditure (PCE) was lower from 6.2 percent in the fourth quarter of 2007 to 5.1 percent in the first quarter of 2008 because of the continued rise in prices.

He said that government consumption indicated lower expenditures compared to 2007, which was an election year. He also said that capital formation recorded a negative growth in the first quarter of 2008 as there was a registered decrease in public construction and other investments, particularly in machineries

Moreover, the Exports sector “slack” in both merchandise and non-factor services while the Imports sector’s contraction was due to “lackluster performance of merchandise imports.”

Paderanga further noted that the country faces a “new set of clouds” this year, comprised of the global economic slowdown, inflation, and impending power crisis.

“The global economic slowdown as due to the US economic slowdown, which started with the bursting of the housing bubble in the US and he sub-prime mortgage crisis,” he explained.

“The inflation is due to rising prices of oil and rice, and the impending power crisis because there is worldwide shortage of coal and the rising oil prices . . . We (also) have insufficient generation capacity, high cost of electricity production due to outdated facilities, and an absence of energy policies that promote competitiveness,” he added.

Paderanga made it clear that even if prices of oil and rice stabilize, it would take some time for inflation to go down. Thus, he pointed out, the inflation rate “can’t go down anytime soon.” He said oil prices would probably not go down significantly within the year, and hence, inflation would continue to hound the country.

Interest rate adjustments, on the other hand, might take time to dampen inflation “because people will take time to adjust their expectations,” he also said.

“Considering external and domestic conditions, the economy is still on a higher growth path than in previous decades. The Philippine economy will survive,” Paderanga said.

Aboitiz group bags Tiwi-Makban power complex with $447-M bid

Open access becoming more feasible
By Donnabelle L. Gatdula
The Philippine Star

The Cebu-based Aboitiz group won the bidding yesterday for the Tiwi-Makban geothermal complex with a $446.88-million offer.

AP Renewables Inc., the corporate vehicle the Aboitizes used to bid for the 289-megawatt (MW) Tiwi geothermal power plant in Tiwi, Albay and the 458.53-MW Makban geothermal power plant in Laguna and Batangas, offered a higher bid than the only other bidder — First Luzon Geothermal Energy Corp. of the Lopez-controlled Energy Development Corp. which offered $368.44 million.

Power Sector Assets and Liabilities Management Corp. (PSALM) president Jose Ibazeta said the sale of Tiwi-Makban is crucial as this makes them closer to implementing open access, allowing big power consumers to choose their own suppliers for their requirements.

“We have reached the 68.78-percent privatization level. This is close to the 70-percent target that we have to achieve to be able to go to open access,” Ibazeta said. By October this year, PSALM hopes to hit the 73-percent privatization mark.

The PSALM chief added this will also set a trend for the sale of the independent power producer (IPP) contracts of the National Power Corp. (Napocor).

“The success of this bidding will make the sale of IPP contracts more attractive,” he said. PSALM, the entity in charge of the privatization of Napocor’s power plants and IPP contracts, will start selling the IPP contracts of the state-owned power plants by November this year.

For his part, Aboitiz Power Corp. senior vice president Luis Miguel Aboitiz said Tiwi-Makban would be the first geothermal facility in the group’s portfolio.

Aboitiz said they are currently evaluating the payment scheme for the acquisition of Tiwi-Makban but hinted this will mostly be raised through borrowings.

He said they have 60 to 270 days to come up with the 40-percent upfront payment to enable PSALM to turn over the plant to AP Renewables, a wholly-owned unit of Aboitiz Power which, in turn, is 75.59-percent owned by Aboitiz Equity Ventures.

Aboitiz said they are considering several options: prepay, pay in full, pay the upfront payment of 40 percent and/or take advantage of a seven-year financing scheme being offered by PSALM.

He said they are currently contemplating on availing the financial assistance being extended by PSALM to all winning bidders.

“This is an important achievement as this is the first geothermal plant bid out by the government,” Energy Secretary Angelo Reyes said.

“The successful bidding of this big-ticket plant also brings us closer to the achievement of all preconditions for open access which promises reasonable power rates for the Filipino consumer,” he added.

PSALM said once it has verified the accuracy, authenticity and completeness of all the bid documents that the winning group has submitted, AP Renewables will be declared the winning bidder for the Tiwi-Makban auction.

The government power privatization firm will then issue the Notice of Award to AP Renewables, formally informing the consortium as the winning bidder for the sale of the plant package.

PSALM has attached a total of 475 MW in power supply contracts to the Tiwi-Makban sale, providing the power facility’s new owners with a ready market for its electricity output.

With the addition of the successful sale of the Tiwi-Makban power complex, PSALM has now sold 14 of Napocor’s 31 plants or a total 2,597.93 MW of capacity for its Luzon and Visayas generating power plants.

In another development, the PSALM board declared the sale of the 620-MW Limay combined cycle power plant a failure after it was left with only one interested bidder who submitted the documentary deliverables before the deadline.

PSALM’s bidding rules explicitly state that the bidding for a power plant is considered failed if there is only one participant in the process.

PSALM also decided to rebid the Napocor facility by the latter part of the year.

Key lawmakers withdraw support for reproductive health bill

Church hails withdrawal of two congressmen
Arlie Calalo, Rio N. Araja
The Manila Standard

TWO congressmen are set to withdraw their measure that would have been included in the consolidated reproductive health bill now pending at the House of Representatives.

Romblon Bishop Jose Corazon Talaoc told reporters that it was his best Episcopal anniversary gift ever when Romblon Rep. Eleandro Madrona informed him that he decided to withdraw his support for the measures.

The 58-year-old Talaoc could not hide his happiness over the decision of Madrona who is the chairman of the House committee on ethics and privileges.

“I am celebrating my 5th Episcopal anniversary now so I think this is the best gift for me ever,” he said in a phone interview.

Earlier, Batangas Rep. Mark Llandro Mendoza had withdrawn support for the pending measure. Both Madrona and Mendoza had filed a measure on the right of the people to be given information about reproductive health services.

Confirming Mendoza’s move, Lipa Archbishop Ramon Arguelles, whose pastoral territory covers Mendoza’s legislative district, said the lawmaker revealed his “change of heart” in a letter to the prelate last June 28.

“He apologized for his position,” Arguelles said.

Talaoc, who was in his hometown in Tangalan, Aklan, said the lawmaker phoned him and disclosed that “he is backing out” from the proposed measure.

Talaoc said that Madrona will be coming out with a formal letter signifying his total withdrawal of support for the reproductive health measure.

“Rest assured that I will be backing out of the bill and I will always support the stand of the Church,” Talaoc quoted Madrona as saying.

Fr. Melvin Castro, executive secretary of the Commission on Family and Life of the Catholic Bishops’ Conference of the Philippines , lauded the move made by the two legislators.

“We praise and thank God. Our prayers and hope that many will follow suit,” he said.

Castro called on lawmakers who are supporting the bills on population control to rethink their position and withdraw their signatures.

“We beg our lawmakers, whom we love and respect, to drop the entire bill altogether,” he said.

Meanwhile, reproductive health advocates yesterday deplored the Catholic Bishops’ Conference of the Philippines over its tough stance against artificial birth control and minced no words for boxing champion Manny Pacquiao and his “ignorance” on contraceptives.

Rep. Liza Maza of Gabriela party-list, Benjamin de Leon of The Forum for Family Planning and Development Inc., and Ramon San Pascual of the Philippine Legislators’ Committee on Population and Development Foundation Inc. blamed the Catholic Church for the “confusion” of the people, particularly couples, in supporting the use of contraceptives as a means of family planning.

“This issue is something that divides the country,” San Pascual told reporters.

Philippine 2nd quarter growth stronger despite challenges—Neda

Roderick T. dela Cruz with AP

THE economy probably grew as high as 5.7 percent in the second quarter from 5.2 percent in the first three months, boosted by the finance, trade and real estate sectors and the robust expansion in business process outsourcing, an official said yesterday.

“We expect a growth of around 5.7 percent based on the numbers I have seen,” said Augusto Santos, deputy director general of the National Economic and Development Authority.

The National Statistical Coordination Board will release the official growth figures for the first half in the third week of August.

Santos, who turned over the top management of the government’s highest economic planning body to former Senator Ralph Recto on Tuesday, said Recto’s challenge was how to sustain growth until 2010 amid rising food and energy prices.

“What we need to focus on now is how economic growth can be sustained,” he said.

“We have less than two years, or 22 months, to go before the [national] elections.”

Recto, who once served as chairman of the House committee on economic affairs, said he would consult former Economic Planning Secretary Cielito Habito on many economic issues.

He said he would push for the retention of the 12-percent value-added tax on petroleum products unless those lobbying for its abolition could present a better alternative.

The critical issue was how to spend government resources more effectively to help the poor, Recto said.

“Oil prices will continue to increase, so we have to plan for the future,” he said.

Meanwhile, oil prices continued a three-week slide Wednesday in Asia as expectations that this year’s surge in energy costs are undermining US gasoline demand sent crude below $122 a barrel.

In Manila, the peso finished higher against the US dollar, closing at 44.15 yesterday against 44.38 on Tuesday.

Investors expect more evidence of falling gasoline consumption when the US Energy Department’s Energy Information Administration releases its weekly oil inventory report later Wednesday, said Mark Pervan, a senior commodities strategist with ANZ Bank in Melbourne.

“People are looking closely at the deteriorating demand for petrol,” Pervan said.

“The market will probably fence-sit... ahead of the DOE numbers.”

Gasoline stocks were expected to rise 400,000 barrels in the petroleum supply report, according to the average of analysts’ estimates in a survey by energy research firm Platts.

The survey also showed that analysts projected crude oil inventories to fall 1.3 million barrels.

Light, sweet crude for September delivery rose 3 cents to $122.22 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract dropped $2.54 to settle at $122.19 a barrel on Tuesday.

Wednesday, 30 July 2008

NAIA 3 update photos




PGMA launches vegetable-enriched noodles

President Gloria Macapagal-Arroyo views a display of Proud Harvest Vegetable-Enriched Canton Noodles Wednesday (July 30, 2008), during the launching of vegetable-enriched canton noodles at the Dagonoy Public Market, San Andres, Manila. (Rey Baniquet/OPS-NIB Photo)

Central Bank sees July inflation at 11.2-12%

By Des Ferriols
The Philippine Star

The Bangko Sentral ng Pilipinas (BSP) expects inflation in July to come in a range of 11.2 to 12 percent, signalling a slower pace of annual price increases after a spate of big jumps.

“While the inflation rate may be higher, it nevertheless indicates some moderation in pace,” BSP Governor Amando M. Tetangco Jr. said.

If data, to be released on Aug. 5, shows annual inflation in July hit 12 percent, it would be a fresh 14-year high. But it would also be a more modest increase in the annual inflation rate compared with rises seen in previous months.

Annual inflation in June was recorded at 11.4 percent.

Since March, the annual inflation rate had been jumping between one and two percentage points each month largely due to the soaring price of fuel and food.

World oil prices have retreated from a record peak above $147 a barrel on July 11 to around $125 amid worries over slowing demand and yields in the secondary Philippine debt market have fallen on hopes of an improving inflation outlook.

The BSP, which hiked rates an aggressive 50 basis points this month, expects annual inflation to stay around 12 percent until November before starting to level off, hitting single digit levels in the second quarter of next year.

But Tetangco said last week that further rate hikes could not be ruled out at the moment given risks to the consumer price outlook.

The government increased transport fares earlier this month and it expects to give more subsidies to the poor using revenues from the expanded value added tax (EVAT) to shield them from rising food and fuel costs.

There are also calls for the government to increase minimum wages and the BSP expects the salary increments to come at 5.5 percent this year and 6.5 percent next year.

The central bank expects average inflation this year to hit nine to 11 percent and six to eight percent next year compared to 2.8 percent in 2007.

The BSP has already raised its key policy rates by 50 basis points and revised its projected inflation yet again, expecting prices to soar to as high as 12 percent but not until October this year.

“Inflation control is the foremost priority of the BSP,” Tetangco said. “The MB noted that concurrent and interrelated shocks to the economy have contributed to elevated inflation readings.”

According to Tetangco, the BSP also noted second-round effects have set in, indicated by the rise in core inflation. “Our baseline forecasts show the risk of inflation exceeding the inflation targets for 2008 and 2009,” he added.

Tetangco said, however, that the BSP still expect inflation to start easing at the end of the year although the levels would be even higher than expected.

The BSP has revised its projected 2008 inflation from seven-nine percent to a higher average of nine to 11 percent this year mostly because of the expected adjustment in fare and wages.

The BSP said that although wage laws allowed wage boards to adjust wages only once a year, wage board authorities could allow more adjustments “if extraordinary circumstances” warranted such an action.

Business group backs VAT

By Elaine Ruzul S. Ramos
The Manila Standard

The Makati Business Club has called on President Gloria Macapagal Arroyo to retain the 12 percent value-added tax despite calls for a moratorium on its collection amid rising costs of fuel and other commodities.

In a statement, the group said the crisis besetting the economy was not a short-term problem but a long-term reality, and that oil prices would remain high.

“Removing VAT on oil would benefit the rich far more than the poor as the rich consume far more oil than do the poor. The benefit to the poor would, in fact, be marginal,” said the group, which is often critical of President Arroyo.

Latest available family income and expenditure data show the rich and upper middle class account for 40.3 percent of the country’s total oil consumption; the lower middle class, 54.3 percent; and the poor, a mere 5.4 percent.

The group also warned the assumed windfall, or excess revenues, of P18.6 billion from the VAT on oil products this year might not be realized.

“With industries slowing down as people consume less, streets clear as people use cars less, and profit margins are squeezed [some companies will even suffer losses], the tax base falls, so the excess revenues from VAT on oil simply offsets the likely below-target performance elsewhere,” said the group.

It added the minimal 0.6-percent improvement in tax collection in the first quarter included the higher-than-target VAT collections on oil. Without it, there would have been a shortfall, it said.

It added that the downward adjustment in economic growth target by the government itself indicated the difficulty to be expected in meeting targeted revenues of P1.109 trillion.

“Without the excess revenues from the oil VAT, it is estimated that collection would be short by about P19 billion this year, even if we assume that the minimal improvement in tax collection efficiency in the first quarter is sustained. And if the oil VAT is entirely removed, the shortfall would be P73 billion [the originally projected yield of P54 billion plus the P19-billion shortfall in other taxes],” the group said.

It said the government would have already incurred a budget deficit even before the contemplated extra spending of P93.6 billion to boost the economy by a modest 5.7 percent.

It said the deficit from additional spending would increase the risk of a fiscal crisis.

“Simplistic solutions, like dole-outs or removing VAT on specific sectors, could do more harm than good. So before anything is decided, it should be carefully, fully researched. Then, and only then should a decision be made,” it said.

The group instead called on Congress to pass a supplementary budget to give jobs to the poor like repairing roads, filling potholes, building classrooms, putting in small irrigation dams and bridges, and many more.

Koreans plan a new Baguio in Zambales

By Cecille Garcia
The Manila Standard

PALAUIG, ZAMBALES—A South Korean firm has completed a study that it says will transform Mt. Tapulao—the “Zambales High Peak”—into another Baguio City and a top tourist destination in Asia.

Developer Dong Ho Co. says the Mt. Tapulao project will be patterned after Genting Highlands, one of Malaysia’s top tourist draws, and will need an initial $2 billion to start.

The Zambales peak is 2,037 meters above sea level and forms a contiguous chain of mountains in Central Luzon. It can easily be transformed into a world-class eco-tourism complex while preserving the natural environment, says Sang Hyun Park, vice chairman and director of Dong Ho’s Overseas Project Division.

It wasn’t clear if Dong Ho did the study on its own or on commission, and what it expected to get out of it.

Zambales Gov. Amor Deloso says Mt. Tapulao can rival Baguio City because it has the same pine trees and cool climate. “Actually, the name Tapulao in the local dialect means pine tree,” Deloso said.

Dong Ho says an initial $2 billion will be needed to build five-star hotels, leisure facilities, casinos, conference centers, a concert hall, condominium and villas, and an 18-hole golf course.

Some 450-hectares of Mt. Tapulao will be transformed into an eco-tourism complex. Mt. Tapulao will also have wellness and healing centers, a spa, health and fitness gyms, and facilities for medical tourism.

Dong Ho says it will provide water quality management services and prevent air pollution, soil erosion and sedimentation. It will put up waste treatment facilities and develop a recycling system.

Palauig Mayor Generoso Amog says the project will bring progress to his town and boost the residents’ standard of living.

“We welcome the Mt. Tapulao project because it will surely bring economic growth to our town,” Amog said.

Dong Ho’s study took into account expanding the road network to complement the recently opened Subic-Clark-Tarlac Expressway through a new access road.

“The project was designed using the W-Growth corridor as an integrated development program in Central and Northern Luzon,” Park said.

PAL posts $ 30.6-million FY income

The Manila Bulletin

Despite skyrocketing aviation fuel costs, Philippine Airlines (PAL) remained in the black for its fourth consecutive fiscal year (ending March 31, 2008), earning a total of $ 30.6 million, the flag carrier disclosed to the Securities and Exchange Commission yesterday.

PAL’s earnings was $ 99.9 million lower than the previous fiscal year’s total of $ 130.5 million, due mainly to the absence this time of extraordinary gains that boosted the airline’s revenues a year ago.

Still, the flag carrier’s posted profits on the first year after emerging from an eight-year receivership in September, 2007, an indicator of its financial health, PAL executives pointed out.

More importantly, PAL’s operating revenue rose 15 percent to $ 1.46 billion in fiscal year 2008, leading to an operating profit of $ 84.3 million exceeding fiscal 2007’s $ 70.3 million by 20 percent.

Total revenues for the period grew by $ 110.5 million, or 8 per cent, to $ 1.504 billion with the strong performance of passenger operations. In all, PAL carried 7.6 million passengers on 47,403 flights during the year, for an average load factor of 79.5 percent .

Revenue passenger kilometers (RPK), the industry’s most common measure of demand, topped 17.5 billion.

All these statistics rose from year-ago levels, when PAL carried 6.9 million passengers on 42,506 flights, for a load factor of 76.9 percent and RPK of 16.1 billion.

Cargo contributed $ 119.5 million in revenues, with 122,672 tons lifted during fiscal year 2008.

"While modest, these results confirm that PAL has strong fundamentals enabling it to weather challenges including constant oil-price shocks," PAL president Jaime J. Bautista underscored. "PAL is also well-positioned for an expected rebound in the market."

However, PAL’s expenses surged by 18.3 percent to $ 1.540 billion from the previous year’s $ 1.302 billion, mainly as a result of the huge jump in jet-fuel prices. In 2008, the average price of fuel spiked to $ 89.52 per barrel from $ 79.81 per barrel in 2007.

This added $ 68.2 million to PAL’s fuel bill, which swelled to $ 470.1 million during the year.

Despite this, PAL management continued to reinvest in the company’s long-term viability by upgrading the fleet, systems and human-resource assets and by introducing new products.

The launch last May of a new, low-fares brand, PAL Express, and the restoration of a network of mostly secondary routes served by turbo-propeller aircraft exemplifies this thrust, Bautista noted.

At present, the flag carrier is in the midst of a comprehensive, P3.5-billion cabin refurbishment on its current wide-body fleet. Soon, PAL will introduce a new bi-class product alongside a major upgrade of its plane interiors and amenities.

PAL expects its wide-body modernization program will peak late next year when the first of six Boeing 777-300ER aircraft enters service. The state-of-the-art, ultra-long-range jets will be used mainly on the key trans-Pacific routes.

This develops as PAL completes the major part of its narrow-body fleet upgrade program later this 2008. The last two of 15 firm orders comprising Airbus A319 and A320 jets are scheduled for delivery before the year-end, giving PAL one of the youngest narrow-body fleets in the region.(EVA)

Tuesday, 29 July 2008

Double-digit remittance growth trend seen continuing

By Doris Dumlao
Philippine Daily Inquirer

Cash remittances from overseas Filipinos are expected to continue their double-digit growth trend in the next few years, New York-based think tank GlobalSource said.

“We can reasonably expect remittances to continue growing robustly in the future,” GlobalSource said in its latest monthly report. “Our forecast for the annual change in these flows this year is 10 percent, or even higher. Based on recent trends, the rate is unlikely to fall far below the 13.2-percent growth registered in 2007, and may even reach government’s expectation of about 14 percent.”

The report, written by Filipino economists Romeo Bernardo and Margarita Gonzales, cited several factors that would support the growth in remittance flows, which in turn would help the Philippines register foreign exchange surpluses even amid soaring oil prices and a slackening global economy.

The report noted that a geographically diverse pool of overseas Filipino workers was serving its purpose, making up for slumps in some areas.

While the US economy had slowed down, for instance, it noted that Middle East economies were growing rapidly on account of high oil prices. Thus, the number of deployed workers expanded in such destinations as the United Arab Emirates, Qatar and, of late, even Saudi Arabia, already the largest employer of Filipinos worldwide, accounting for about a fifth of total deployment.

“Together, the three economies employ over a third of the total number of temporary overseas workers, with the region [West Asia] as a whole providing work for nearly half,” GlobalSource said.

GlobalSource also said many US-based Filipinos were in work fields less sensitive to a recession, such as healthcare and education.

With official data taking into account only those transfers coursed through the banking system, the report said the sustained rise in remittances partly reflected better capture of these funds.

The central bank said this was due to the increased presence of commercial banks, as well as local money transfer agents, in countries where Filipinos tend to cluster.

“With a sturdy growth trend in remittances, we are quite optimistic the balance of payments (BoP) can still post a surplus even under currently high world oil prices, and that domestic growth can still be supported by overseas Filipino-funded demand,” GlobalSource said.

Every month, Filipinos abroad, now numbering nearly nine million, equivalent to over one-fourth of the Philippine labor force, send home about $1 billion, allowing the country to continuously post current account and BoP surpluses. Edited by

Unthinking ABS-CBN headline: "GMA’s SONA stats don’t show complete picture"

Of course, ABS-CBN. Give her several hours and she can give you the complete stats. Question is: can you stay put in your seats?

Gov't to embark on a massive info campaign on VAT

The government is embarking on a massive information campaign on the benefits derived from the implementation of the value added tax law or VAT, especially to pro-poor programs.

Press Secretary Jesus Dureza, in a statement issued today, noted that the poor or the masa “who are the direct beneficiaries of the VAT law are either uninformed or being misled and manipulated.”

“Otherwise, they who are the less burdened but are the beneficiaries would have welcomed President Arroyo’s SONA,” Dureza further said.

“There must be an effort to inform (the public) about the reforms the President continues to do,” he added.

Dureza thus sees the urgent need to launch a massive information campaign on the VAT “which we will do” as he called on all the advocates of the masa “to join us.”

“We are all in this at this time of crisis. The President issued an appeal to all political ,religious, civil society, etc., and let’s all heed it for the country’s sake,” Dureza said.

The President, in her 8th State-of-the -Nation Address delivered Monday at the Batasan Complex before the joint session of the 14th Congress, reiterated her stand on not scrapping the implementation of the VAT, specifically the 12 percent imposed on petroleum products.

The President stressed that VAT is important for the country to be able to cushion the impact of soaring oil and food prices especially to the poor.

The President said if the VAT on oil will be scrapped, only the rich will benefit as 84 percent of oil and 90 percent of power are consumed by the rich.

On the other hand, revenues collected from VAT is given back to the poor in the form of power subsidies, scholarships, livelihood loans, better healthcare services through the upgrading of primary hospitals to secondary healthcare facilities, among others.

“We started before SONA, we will continue even beyond SONA period,” Dureza said of the information campaign.

Philippine June coconut oil exports up 23% on yr


Philippine coconut oil exports grew 23 percent in June from a year earlier, reversing a decline in May, preliminary data from the United Coconut Associations of the Philippines Inc (UCAP) showed.

Total shipments in the first half surged nearly 39 percent from a year ago, in line with government estimates for first half exports, with most coconut plantations recovering from typhoon devastation in the last two years.

Coconut oil prices in the global market climbed 4.6 percent in June from May and 60.8 percent from a year earlier, the UCAP said in a report.

Coconut oil inventory in Rotterdam, Europe's biggest port and the centre of global coconut oil trade, more than doubled to 5,496 tons by the last week of June from the record low of 2,612 tons in May, but below than the 9,523 tons in the same month last year, the report said.

The Philippines is the world's biggest exporter of coconut oil.

Jollibee acquires 12% stake in US restaurant

By Zinnia B. Dela Peña
The Philippine Star

Fastfood giant Jollibee Foods Corp. (JFC) has signed an agreement to acquire a 12- percent stake in US-based Chow Fun Holdings LLC, which owns a casual dining restaurant serving pan-Asian food, for $950,000 (roughly P42.75 million).

Chow Fun’s Jinja Bar and Bistro serves Southeast Asian cuisines, featuring dishes from Japan, China, Thailand, Vietnam, Malaysia and Singapore. It has two outlets in New Mexico — Sta. Fe and Albuquerque.

In a disclosure to the Philippine Stock Exchange, JFC said the acquisition is being made “to enhance its capability in developing Asian food restaurant concepts for the mainstream consumers in the United States as part of its long-term strategy. “

Jinja Bar and Bistro uses fresh, authentic ingredients and adds distinctive twists to popular dishes such as potstickers, noodle bowls, tempura, and beef and fish dishes.

When completed, the deal would be JFC’s fifth overseas acquisition following Lao Dong (a chain of full-service restaurants in Taiwan and China serving beef noodles), Hongzhuangyuan ( which offers a variety of local Chinese food centered around congee), Yonghe King (which serves Chinese food using a Western fastfood service system) and teahouse chain Chun Shui Tang.

The move is likewise part of JFC’s efforts to build its steadily growing restaurant chain overseas.

JFC is the country’s largest food service network with a total of 1,686 stores as of end-June this year, 1,479 of which are located in the Philippines while the remaining 207 are based overseas.

JFC said it “will continue to enter into joint ventures and alliances with institutions and individuals in conjunction with building its internal organization capability in order to achieve its long-term objectives.”

JFC through its subsidiaries operates 51 restaurants in the US as of June 30, 2008 — Jollibee (15), Red Ribbon (23) and Chowking (13) — practically all in the West Coast serving mainly Filipinos living there.

Notwithstanding the slowdown in the US economy and consumer spending, JFC is aggressively expanding its operations in the world’s largest economy with plans to open 25 new stores this year or 54 percent higher than the 2007 level.

In the next few years, JFC plans to open more stores in other cities in the US, Canada and Hawaii.

JFC said its businesses in the US are earning a return on investments above the group’s cost of capital.

JFC also owns pizza-pasta chain Greenwich, upscale delicatessen DeliFrance and the carinderia-type Tio Pepes.

Mindanao rice, corn yields up in 1st quarter

The Manila Bulletin

Mindanao is living up to its tagline as the country’s food basket by posting robust performance in rice and corn production during the first quarter of 2008.

Data from the Department of Agriculture’s Bureau of Agricultural Statistics show that the island produced a total of 999, 212 metric tons of rice during the first three months, up by 4.78 percent in the same period last year.

A large bulk of rice output came from Region XII which contributed a total of 380, 327 metric tons to the total production. ARMM and Region XI also boosted the total rice production by contributing 193,228 and 142, 928 metric tons, respectively.

Among the Mindanao regions, Caraga registered the highest growth at 12.85 percent. This was followed by Region X at 10.92 percent. Region XII at 10.11 percent, Region IX at 5.93 percent and Region XI at 4.06 percent while ARMM registered negative growth at (9.10) percent.

"We would like to reiterate that the current rice supply is sufficient to meet the daily requirements of the island and the current rice prices are expected to go down during the harvest season," said Undersecretary Virgilio Leyretana, chair of the Mindanao Economic Development Council (MEDCo) said.

Around 3,546,120 bags of rice are reportedly needed to meet the rice requirements before the harvest season in August. The rice inventory is expected to reach 3.805 million bags of rice. This implies that the rice supply is sufficient to meet the needs during the lean months, which is from June to September. Rice supply, however is expected to rise during the harvest season in August.

Meanwhile, corn production hit a double-digit growth of 22.31 percent in the first quarter, marking a total output of 883,409 metric tons from just 722, 269 metric tons in the same period last year.

Caraga region also registered the highest growth of corn output at 56.55%. Following Caraga in terms of corn production growth are Region XI at 51.38 percent, Region X at 40.18 percent, Region XII at 35.51 percent. Region IX registered negative growth at 2.10 percent.

Monday, 28 July 2008


28 July 2008




Thank you, Speaker Nograles. Senate President Villar. Senators and Representatives. Vice President de Castro, President Ramos, Chief Justice Puno, members of the diplomatic corps, ladies and gentlemen:

I address you today at a crucial moment in world history.

Just a few months ago, we ended 2007 with the strongest economic growth in a generation. Inflation was low, the peso strong and a million new jobs were created. We were all looking to a better, brighter future.

Because tough choices were made, kumikilos na ang bayan sa wakas. Malapit na sana tayo sa pagbalanse ng budget. We were retiring debts in great amounts, reducing the drag on our country’s development, habang namumuhunan sa taong bayan.

Biglang-bigla, nabaligtad ang ekonomiya ng mundo. Ang pagtalon ng presyo ng langis at pagkain ay nagbunsod ng pandaigdigan krisis, the worst since the Great Depression and the end of World War II. Some blame speculators moving billions of dollars from subprime mortgages to commodities like fuel and food. Others point of the very real surge in demand as millions of Chinese and Indians move up to the middle class.

Whatever the reasons, we are on a roller coaster ride of oil price hikes, high food prices and looming economic recession in the US and other markets. Uncertainty has moved like a terrible tsunami around the globe, wiping away gains, erasing progress. This is a complex time that defies simple and easy solutions. For starters, it is hard to identify villains, unlike in the 1997 financial crisis. Everyone seems to be a victim, rich countries and poor, though certainly some can take more punishment than others.

To address these global challenges, we must go on building and buttressing bridges to allies around the world: to bring in the rice to feed our people, investments to create jobs; and to keep the peace and maintain stability in our country and the rest of the world. Yet even as we reach out to those who need, and who may need us, we strive for greater self-reliance.

Because tough choices were made, the global crisis did not catch us helpless and unprepared. Through foresight, grit and political will, we built a shield around our country that has slowed down and somewhat softened the worst effects of the global crisis. We have the money to care for our people and pay for food when there are shortages; for fuel despite price spikes.

Neither we nor anyone else in the world expected this day to come so soon but we prepared for it. For the guts not to flinch in the face of tough choices, I thank God. For the wisdom to recognize how needed you are, I thank, you Congress. For footing the bill, I thank the taxpayers.

The result has been, on the one hand, ito ang nakasalba sa bayan; and, on the other, more unpopularity for myself in the opinion polls. Yet, even unfriendly polls show self-rated poverty down to its 20-year low in 2007.

My responsibility as President is to take care to solve the problems we are facing now and to provide a vision and direction for how our nation should advance in the future.

Many in this great hall live privileged lives and exert great influence in public affairs. I am accessible to you, but I spend time every day with the underprivileged and under represented who cannot get a grip on their lives in the daily, all-consuming struggle to make ends meet.

Nag-aalala ako para sa naka-aawang maybahay na pasan ang pananagutan para sa buong pamilya. Nag-aalala ako para sa magsasakang nasa unang hanay ng pambansang produksyon ng pagkain ngunit nagsisikap pakanin ang pamilya. I care for hardworking students soon to graduate and wanting to see hope of good job and a career prospect here at home.

Nag-aalala ako para sa 41-year old na padre de pamilya na di araw-araw ang trabaho, at nag-aabala sa asawa at tatlong anak, at dapat bigyan ng higit pang pagkakakitaan at dangal. I care for our teachers who gave the greatest gift we ever received – a good education – still trying to pass on the same gift to succeeding generations. I care for our OFWs, famed for their skill, integrity and untiring labor, who send home their pay as the only way to touch loved ones so far away. Nagpupugay ako ngayon sa kanilang mga karaniwang Pilipino.

My critics say this is fiction, along with other facts and figures I cite today. I call it heroism though they don’t need our praise. Each is already a hero to those who matter most, their families.

I said this is a global crisis where everyone is a victim. But only few can afford to avoid, or pay to delay, the worst effects.

Many more have nothing to protect them from the immediate blunt force trauma of the global crisis. Tulad ninyo, nag-aalala ako para sa kanila. Ito ang mga taong bayan na dapat samahan natin. Not only because of their sacrifices for our country but because they are our countrymen.

How do we solve these many complex challenges?

Sa kanilang kalagayan, the answer must be special care and attention in this great hour of need.

First, we must have a targeted strategy with set of precise prescriptions to ease the price challenges we are facing.

Second, food self-sufficiency; less energy dependence; greater self-reliance in our attitude as a people and in our posture as a nation.

Third, short-term relief cannot be at the expense of long term reforms. These reforms will benefit not just the next generation of Filipinos, but the next President as well.

Napakahalaga ang Value Added Tax sa pagharap sa mga hamong ito.

Itong programa ang sagot sa mga problemang namana natin.
Una, mabawasan ang ating mga utang
and shore up our fiscal independence.

Pangalawa, higit na pamumuhunan para mamamayan at imprastraktura.

Pangatlo, sapat na pondo para sa mga programang pangmasa.

Thus, the infrastructure links programmed for the our poorest provinces like Northern Samar: Lao-ang-Lapinig-Arteche, right now ay maputik, San Isidro-Lope de Vega; the rehabilitation of Maharlika in Samar.

Take VAT away and you and I abdicate our responsibility as leaders and pull the rug from under our present and future progress, which may be compromised by the global crisis.

Lalong lumakas ang tiwala ng mga investor dahil sa VAT. Mula P56.50 kada dolyar, lumakas ang piso hanggang P40.20 bago bumalik sa P44 dahil sa mga pabigat ng pangdaigdigang ekonomiya. Kung alisin ang VAT, hihina ang kumpiyansa ng negosyo, lalong tataas ang interes, lalong bababa ang piso, lalong mamahal ang bilihin.

Kapag ibinasura ang VAT sa langis at kuryente, ang mas makikinabang ay ang mga may kaya na kumukonsumo ng 84% ng langis at 90% ng kuryente habang mas masasaktan ang mahihirap na mawawalan ng P80 billion para sa mga programang pinopondohan ngayon ng VAT.
Take away VAT and we strip our people of the means to ride out the world food and energy crisis.

We have come too far and made too many sacrifices to turn back now on fiscal reforms. Leadership is not about doing the first easy thing that comes to mind; it is about doing what is necessary, however hard.

The government has persevered, without flip-flops, in its much-criticized but irreplaceable policies, including oil and power VAT and oil deregulation. Patuloy na gagamitin ng pamahalaan ang lumalago nating yaman upang tulungan ang mga pamilyang naghihirap sa taas ng bilihin at hampas ng bagyo, habang nagpupundar upang sanggahan ang bayan sa mga krisis sa hinaharap.

Para sa mga namamasada at namamasahe sa dyip, sinusugpo natin ang kotong at colorum upang mapataas ang kita ng mga tsuper. Si Federico Alvarez kumikita ng P200 a day sa kaniyang rutang Cubao-Rosario. Tinaas ito ng anti-kotong, anti-colorum ngayon P500 na ang kita niya. Iyan ang paraan kung paano napananatili ang dagdag-pasahe sa piso lamang. Halaga lang ng isang text.

Texting is a way of life. I asked the telecoms to cut the cost of messages between networks. They responded. It is now down to 50 centavos.

Noong Hunyo, nagpalabas tayo ng apat na bilyong piso mula sa VAT sa langis—dalawang bilyong pambayad ng koryente ng apat na milyong mahihirap, isang bilyon para college scholarship o pautang sa 70,000 na estudyanteng maralita; kalahating bilyong pautang upang palitan ng mas matipid na LPG, CNG o biofuel ang motor ng libu-libong jeepney; at kalahating bilyong pampalit sa fluorescent sa mga pampublikong lugar.

Kung mapapalitan ng fluorescent ang lahat ng bumbilya, makatitipid tayo ng lampas
P2 billion.

Sa sunod na katas ng VAT, may P1 billion na pambayad ng kuryente ng mahihirap; kalahating bilyon para sa matatandang di sakop ng SSS o GSIS; kalahating bilyong kapital para sa pamilya ng mga namamasada; kalahating bilyon upang mapataas ang kakayahan at equipment ng mga munting ospital sa mga lalawigan. At para sa mga kalamidad, angkop na halaga.

We released P1 billion for the victims of typhoon Frank. We support a supplemental Western Visayas calamity budget from VAT proceeds, as a tribute to the likes of Rodney Berdin, age 13, of Barangay Rombang, Belison, Antique, who saved his mother, brother and sister from the raging waters of Sibalom River.

Mula sa buwang ito, wala nang income tax ang sumusweldo ng P200,000 o mas mababa sa isang taon – P12 billion na bawas-buwis para sa maralita at middle class. Maraming salamat, Congress.

Ngayong may P32 na commercial rice, natugunan na natin ang problema sa pagkain sa kasalukuyan. Nagtagumpay tayo dahil sa pagtutulungan ng buong bayan sa pagsasaka, bantay-presyo at paghihigpit sa price manipulation, sa masipag na pamumuno ni Artie Yap. Sa mga LGU at religious groups na tumutulong dalhin ang NFA rice sa mahihirap, maraming salamat sa inyo.

Dahil sa subsidy, NFA rice is among the region’s cheapest. While we can take some comfort that our situation is better than many other nations, there is no substitute for solving the problem of rice and fuel here at home. In doing so, let us be honest and clear eyed – there has been a fundamental shift in global economics. The price of food and fuel will likely remain high. Nothing will be easy; the government cannot solve these problems over night. But, we can work to ease the near-term pain while investing in long-term solutions.

Since 2001, new irrigation systems for 146,000 hectares, including Malmar in Maguindanao and North Cotabato, Lower Agusan, Casecnan and Aulo in Nueva Ecija, Abulog-Apayao in Cagayan and Apayao, Addalam in Quirino and Isabela, among others, and the restoration of old systems on another 980,000 hectares have increased our nation’s irrigated land to a historic 1.5 million hectares.

Edwin Bandila, 48 years old, of Ugalingan, Carmen, North Cotabato, cultivated one hectare and harvested 35 cavans. Thirteen years na ginawa iyong Malmar. In my first State of the Nation Address, sabi ko kung hindi matapos iyon sa Setyembre ay kakanselahin ko ang kontrata, papapasukin ko ang engineering brigade, natapos nila. With Malamar, now he cultivates five hectares and produces 97 cavans per hectare. Mabuhay, Edwin! VAT will complete the San Roque-Agno River project.

The Land Bank has quadrupled loans for farmers and fisherfolk. That is fact not fiction. Check it. For more effective credit utilization, I instructed DA to revitalize farmers cooperatives.
We are providing seeds at subsidized prices to help our farmers.

Incremental Malampaya national revenues of P4 billion will go to our rice self-sufficiency program.

Rice production since 2000 increased an average of 4.07% a year, twice the population growth rate. By promoting natural planning and female education, we have curbed population growth to 2.04% during our administration, down from the 2.36 in the 1990’s, when artificial birth control was pushed. Our campaign spreads awareness of responsible parenthood regarding birth spacing. Long years of pushing contraceptives made it synonymous to family planning. Therefore informed choice should mean letting more couples, who are mostly Catholics, know about natural family planning. [underscoring supplied]

From 1978 to 1981, nag-export tayo ng bigas. Hindi tumagal. But let’s not be too hard on ourselves. Panahon pa ng Kastila bumibili na tayo ng bigas sa labas. While we may know how to grow rice well, topography doesn’t always cooperate.

Nature did not gift us with a mighty Mekong like Thailand and Vietnam, with their vast and naturally fertile plains. Nature instead put our islands ahead of our neighbours in the path of typhoons from the Pacific. So, we import 10% of the rice we consume.

To meet the challenge of today, we will feed our people now, not later, and help them get through these hard times. To meet the challenges of tomorrow, we must become more self-reliant, self-sufficient and independent, relying on ourselves more than on the world.

Now we come to the future of agrarian reform.

There are those who say it is a failure, that our rice importations prove it. There are those who say it is a success—if only because anything is better than nothing. Indeed, people are happier owning the land they work, no matter what the difficulties.

Sa SONA noong 2001, sinabi ko, bawat taon, mamamahagi tayo ng dalawang daang libong ektarya sa reporma sa lupa: 100,000 hectares of private farmland and 100,000 of public farmland, including ancestral domains. Di hamak mahigit sa target ang naipamahagi natin sa nakaraang pitong taon: 854,000 hectares of private farmland, 797,000 of public farmland, and Certificates of Ancestral Domain for 525,000 hectares. Including, over a 100,000 hectares for Bugkalots in Quirino, Aurora, and Nueva Vizcaya. After the release of their CADT, Rosario Camma, Bugkalot chieftain, and now mayor of Nagtipunan, helped his 15,000-member tribe develop irrigation, plant vegetables and corn and achieve food sufficiency. Mabuhay, Chief!

Agrarian reform should not merely subdivide misery, it must raise living standards. Ownership raises the farmer from his but productivity will keep him on his feet.

Sinimula ng aking ama ang land reform noong 1963. Upang mabuo ito, the extension of CARP with reforms is top priority. I will continue to do all I can for the rural as well as urban poor. Ayaw natin na paglaya ng tenant sa landlord, mapapasa-ilalim naman sa usurero. Former tenants must be empowered to become agribusinessmen by allowing their land to be used as collateral.

Dapat mapalaya ng reporma sa lupa ang magsasaka sa pagiging alipin sa iba. Dapat bigyan ang magsasaka ng dangal bilang taong malaya at di hawak ninuman. We must curb the recklessness that gives land without the means to make it productive and bites off more than beneficiaries can chew. At the same time, I want the rackets out of agrarian reform: the threats to take and therefore undervalue land, the conspiracies to overvalue it.

Be with me on this. There must be a path where justice and progress converge. Let us find it before Christmas. Dapat nating linisin ang landas para sa mga ibig magpursige sa pagsasaka, taglay ang pananalig na ang lupa ay sasagip sa atin sa huli kung gamitin natin ito nang maayos. Along with massive rice production, we are cutting costs through more efficient transport. For our farm-to-market roads, we released P6 billion in 2007.

On our nautical highways. RORO boats carried 33 million metric tons of cargo and 31 million passengers in 2007. We have built 39 RORO ports during our administration, 12 more are slated to start within the next two years. In 2003, we inaugurated the Western Nautical Highway from Batangas through Mindoro, Panay and Negros to Mindanao. This year we launched the Central Nautical Highway from Bicol mainland, through Masbate, Cebu, Bohol and Camiguin to Mindanao mainland. These developments strengthen our competitiveness.

Leading multinational company Nestle cut transport costs and offset higher milk prices abroad. Salamat, RORO. Transport costs have become so reasonable for bakeries like Gardenia, a loaf of its bread in Iloilo is priced the same as in Laguna and Manila. Salamat muli sa RORO. To the many LGUs who have stopped collecting fees from cargo vehicles, maraming, maraming salamat.

We are repaving airports that are useful for agriculture, like Zamboanga City Airport.
Producing rice and moving it cheaper addresses the supply side of our rice needs. On the demand side, we are boosting the people’s buying power.

Ginagawa nating labor-intensive ang paggawa at pag-ayos ng kalsada at patubig. Noong SONA ng 2001, naglunsad tayo sa NCR ng patrabaho para sa 20,000 na out of school youth, na tinawag OYSTER. Ngayon, mahigit 20,000 ang ineempleyo ng OYSTER sa buong bansa. In disaster-stricken areas, we have a cash-for-work program.

In training, 7.74 million took technical and vocational courses over the last seven years, double the number in the previous 14 years. In 2007 alone, 1.7 million graduated. Among them are Jessica Barlomento now in Hanjin as supply officer, Shenve Catana, Marie Grace Comendador, and Marlyn Tusi, lady welders, congratulations.

In microfinance, loans have reached P102 billion or 30 times more than the P3 billion we started with in 2001, with a 98% repayment record, congratulations! Major lenders include the Land Bank with P69 billion, the Peoples’ Credit and Finance Corporation P8 billion, the National Livelihood Support Fund P3 billion, DBP P1 billion and the DSWD’s SEA-K P800 million. For partnering with us to unleash the entrepreneurial spirit, thank you, Go Negosyo and Joey Concepcion.

Upland development benefits farmers through agro-forestry initiatives. Rubber is especially strong in Zamboanga Sibugay and North Cotabato. Victoria Mindoro, 56 years old, used to earn P5,000 a month as farmer and factory worker. Now she owns 10 hectares in the Goodyear Agrarian Reform Community in Kabasalan, Zamboanga Sibugay, she earns P10,000 a week. With one hectare, Pedro and Concordia Faviolas of Makilala, North Cotabato, they sent their six children to college, bought two more hectares, and earn P15,000 a month. Congratulations!

Jatropha estates are starting in 900 hectares in and around Tamlang Valley in Negros Oriental; 200 in CamSur; 300 in GenSan, 500 in Fort Magsaysay near the Cordero Dam and 700 in Samar, among others.

In our 2006 SONA, our food baskets were identified as North Luzon and Mindanao. The sad irony of Mindanao as food basket is that it has some of the highest hunger in our nation. It has large fields of high productivity, yet also six of our ten poorest provinces. The prime reason is the endless Mindanao conflict. A comprehensive peace has eluded us for half a century. But last night, differences on the tough issue of ancestral domain were resolved. Yes, there are political dynamics among the people of Mindanao. Let us sort them out with the utmost sobriety, patience and restraint. I ask Congress to act on the legislative and political reforms that will lead to a just and lasting peace during our term of office.

The demands of decency and compassion urge dialogue. Better talk than fight, if nothing of sovereign value is anyway lost. Dialogue has achieved more than confrontation in many parts of the world. This was the message of the recent World Conference in Madrid organized by the King of Saudi Arabia, and the universal message of the Pope in Sydney.

Pope Benedict’s encyclical Deus Caritas Est reminds us: “There will always be situations of material need where help in the form of concrete love for neighbour is indispensable.”

Pinagsasama-sama natin ang mga programa ng DSWD, DOH, GSIS, SSS at iba pang lumalaban sa kahirapan sa isang National Social Welfare Program para proteksyonan ang pinaka-mahihirap mula sa pandaigdigang krisis, and to help those whose earnings are limited by illness, disability, loss of job, age and so on—through livelihood projects, microfinance, skills and technology transfer, emergency and temporary employment, pension funds, food aid and cash subsidies, child nutrition and adult health care, medical missions, salary loans, insurance, housing programs, educational and other savings schemes, and now cheaper medicine—Thanks to Congress.

The World Bank says that in Brazil, the income of the poorest 10% has grown 9% per year versus the 3% for the higher income levels due in large part to their family stipend program linking welfare checks to school attendance. We have introduced a similar program, Pantawid Pamilya.

Employers have funded the two increases in SSS benefits since 2005. Thank you, employers for paying the premiums.

GSIS pensions have been indexed to inflation and have increased every year since 2001. Its salary loan availments have increased from two months equivalent to 10 months, the highest of any system public or private—while repayments have been stretched out.

Pag-Ibig housing loans increased from P3.82 billion in 2001 to P22.6 billion in 2007. This year it experienced an 84% increase in the first four months alone. Super heating na. Dapat dagdagan ng GSIS at buksan muli ng SSS ang pautang sa pabahay. I ask Congress to pass a bill allowing SSS to do housing loans beyond the present 10% limitation.

Bago ako naging Pangulo, isa’t kalahating milyong maralita lamang ang may health insurance. Noong 2001, sabi natin, dadagdagan pa ng kalahating milyon. Sa taong iyon, mahigit isang milyon ang nabigyan natin. Ngayon, 65 milyong Pilipino na ang may health insurance, mahigit doble ng 2000, kasama ang labinlimang milyong maralita. Philhealth has paid P100 billion for hospitalization. The indigent beneficiaries largely come from West and Central Visayas, Central Luzon, and Ilocos. Patuloy nating palalawakin itong napaka-importanted programa, lalo na sa Tawi-Tawi, Zambo Norte, Maguindanao, Apayao, Dinagat, Lanao Sur, Northern Samar, Masbate, Abra and Misamis Occidental. Lalo na sa kanilang mga magsasaka at mangingisda. In these provinces and in Agusan Sur, Kalinga, Surigao Sur and calamity-stricken areas, we will launch a massive school feeding program at P10 per child every school day.

Bukod sa libreng edukasyon sa elementarya at high school, nadoble ang pondo para sa mga college scholarships, while private high school scholarship funds from the government have quadrupled.

I have started reforming and clustering the programs of the DepEd, CHED and TESDA.
As with fiscal and food challenges, the global energy crunch demands better and more focused resource mobilization, conservation and management.

Government agencies are reducing their energy and fuel bills by 10%, emulating Texas Instruments and Philippine Stock Exchange who did it last year. Congratulations, Justice Vitug and Francis Lim.

To reduce power system losses, we count on government regulators and also on EPIRA amendments.

We are successful in increasing energy self-sufficiency—56%, the highest in our history. We promote natural gas and biofuel; geothermal fields, among the world’s largest; windmills like those in Ilocos and Batanes; and the solar cells lighting many communities in Mindanao. The new Galoc oil field can produce 17,000-22,000 barrels per day, 1/12 of our crude consumption.
The Renewable Energy Bill has passed the House. Thank you, Congressmen.

Our costly commodity imports like oil and rice should be offset by hard commodities exports like primary products, and soft ones like tourism and cyberservices, at which only India beats us.
Our P 350 million training partnership with the private sector should qualify 60,000 for call centers, medical transcription, animation and software development, which have a projected demand of one million workers generating $13 billion by 2010.

International finance agrees with our progress. Credit rating agencies have kept their positive or stable outlook on the country. Our world competitiveness ranking rose five notches. Congratulations to us.

We are sticking to, and widening, the fiscal reforms that have earned us their respect.
To our investors, thank you for your valuable role in our development. I invite you to invest not only in factories and services, but in profitable infrastructure, following the formula for the Tarlac-Pangasinan-La Union Expressway.

I ask business and civil society to continue to work for a socially equitable, economically viable balance of interests. Mining companies should ensure that host communities benefit substantively from their investments, and with no environmental damage from operations.
Our administration enacted the Solid Waste Management Act, Wildlife Act, Protection of Plant Varieties, Clean Water Act, Biofuels Act and various laws declaring protected areas. For reforestation, for next year we have budgeted P2 billion. Not only do forests enhance the beauty of the land, they mitigate climate change, a key factor in increasing the frequency and intensity of typhoons and costing the country 0.5% of the GDP.

We have set up over 100 marine and fish sanctuaries since 2001. In the whaleshark sanctuary of Donsol, Sorsogon, Alan Amanse, 40-year-old college undergraduate and father of two, was earning P100 a day from fishing and driving a tricycle. Now as whaleshark-watching officer, he is earns P1,000 a day, ten times his former income.

For clean water, so important to health, there is P500 million this year and P1.5 billion for next year.

From just one sanitary landfill in 2001, we now have 21, with another 18 in the works.
We launched the Zero Basura Olympics to clear our communities of trash. Rather than more money, all that is needed is for each citizen to keep home and workplace clean, and for garbage officials to stop squabbling.

Our investments also include essential ways to strengthen our institutions of governance in order to fight the decades-old scourge of corruption. I will continue to fight this battle every single day. While others are happy with headlines through accusation without evidence and privilege speeches without accountability, we have allocated more than P3 billion – the largest anti-graft fund in our history – for real evidence gathering and vigorous prosecution.

From its dismal past record, the Ombudsman’s conviction rate has increased 500%. Lifestyle checks, never seriously implemented before our time, have led to the dismissal and/or criminal prosecution of dozens of corrupt officials.

I recently met with the Millennium Challenge Corporation, a US agency that provides grants to countries based on governance. They have commended our gains, contributed P1 billion to our fight against graft, and declared us eligible for more grants. Thank you!

Last September, we created the Procurement Transparency Group in the DBM and linked it with business, academe, and the Church, to deter or catch anomalies in government contracts.
On my instruction, the BIR and Customs established similar government-civil society tie-ups for information gathering and tax evasion and smuggling monitoring.

More advanced corruption practices require a commensurate advances in legislative responses. Colleagues in Congress, we need a more stringent Anti-Graft Act.

Sa pagmahal ng bilihin, hirap na ang mamimili – tapos, dadayain pa. Dapat itong mahinto. Hinihiling ko sa Kongreso na magpasa ng Consumer Bill of Rights laban sa price gouging, false advertising at iba pang gawain kontra sa mamimili.

I call on all our government workers at the national and local levels to be more responsive and accountable to the people. Panahon ito ng pagsubok. Kung saan kayang tumulong at dapat tumulong ang pamahalaan, we must be there with a helping hand. Where government can contribute nothing useful, stay away. Let’s be more helpful, more courteous, more quick.

Kaakibat ng ating mga adhikain ang tuloy na pagkalinga sa kapakanan ng bawat Pilipino. Iisa ang ating pangarap – maunlad at mapayapang lipunan, kung saan ang magandang kinabukasan ay hindi pangarap lamang, bagkus natutupad.

Sama-sama tayo sa tungkuling ito. May papel na gagampanan ang bawat mamamayan, negosyante, pinunong bayan at simbahan, sampu ng mga nasa lalawigan.

We are three branches but one government. We have our disagreements; we each have hopes, and ambitions that drive and divide us, be they personal, ethnic, religious and cultural. But we are one nation with one fate.

As your President, I care too much about this nation to let anyone stand in the way of our people’s wellbeing. Hindi ko papayagang humadlang ang sinuman sa pag-unlad at pagsagana ng taong bayan. I will let no one – and no one’s political plans – threaten our nation’s survival. Our country and our people have never failed to be there for us. We must be there for them now.

Maraming salamat. Magandang hapon sa inyong lahat.