Pangilinan-led tollway operator First Philippine Infrastructure Inc. and state-owned Philippine National Railways (PNR) are set to study the possibility of linking the North and South Luzon expressways by road and rail.
The link will be an integrated rail and tollway project, using the PNR’s right of way, which cuts across Metro Manila.
The project is an alternative to various plans to link the two tollways.
The government is planning to build a flyover that will connect C-5 Road to Commonwealth Avenue in Quezon City, so that vehicles from the South Luzon Expressway don’t have to deal with traffic on Epifanio de los Santos Avenue to get to the North Luzon Expressway. It will cost P420 million.
Another plan, worth P55 billion, is to extend the Skyway from Parañaque to Balintawak in Quezon City.
First Philippine Infrastructure and the PNR signed the deal "to explore mutually beneficial transportation infrastructure investment opportunities," the former told the stock exchange in a disclosure yesterday.
Under the memorandum of understanding, the two will conduct a pre-feasibility study.
Initial discussions are focused on the development of an 18-kilometer integrated rail and tollway project that will have "at-grade" and elevated roads over the existing PNR line.
"PNR as a pioneer government provider of rail services, intends to pursue related infrastructure projects with the view of expanding the scope of the national integrated transport system," said PNR Vice-Chairman and General Manager Manuel D. Andal.
Businessman Manuel V. Pangilinan entered the tollway business last year when his holding firm Metro Pacific Investments Corp. bought First Philippine Infrastructure from the Lopez family for more than P12 billion. This gave Metro Pacific two-thirds of the North Luzon tollway concessionare, Manila North Tollways Corp.
Metro Pacific also has investments in hospitals, real estate, and a water utility.
By Chino S. Leyco Reporter
The Manila Times
FIRST Philippine Infrastructure Inc. and state-owned Philippine National Railways are exploring mutually beneficial transportation infrastructure investment opportunities.
In disclosure to the Philippine Stock Exchange, PNR and First Infrastructure agreed to jointly conduct a pre-feasibility study for an alternative facility that will connect the North and South Luzon Expressways by way of an integrated rail and tollway project.
This will use the existing PNR line right-of-way that cuts across Metro Manila.
“We look forward to an opportunity of providing PNR our commercial and technical experience for the improvement and efficiency of the country’s infrastructure system,” Manuel Pangilinan, chairmaan of both First Infrastructure and Metro Pacific Investments Corp. (MPIC) said.
First Infrastructure said initial discussions are focused on the development of an approximately 18 kilometer integrated rail and tollroad project that will have a combined at-grade and elevated roadways over the existing PNR line right-of-way in Metro Manila.
“The Manila North Tollways Corp. and the Tollways Management Corp. under [First Infrastructure] have very well managed and maintained the North Luzon Expressway as a major national tollroad concession development. Our know-how and operating systems will support the PNR in its projects,” Ramoncito Fernandez, First Infrastructure president and chief executive said.
Pangilinan said the possible venture with PNR is part of MPIC’s thrust into infrastructure to help ease the congestion in the Greater Metro Manila transportation network.
Last year, First Infrastructure surprised the market when it announced that its major shareholders, First Philippine Holdings Corp. and Benpres Holdings Corp. both of the Lopez group, have decided to sell their respective stakes in the toll road business to MPIC.
Industry insiders said this latest share-swap is in line with MPIC’s condition to the Lopezes before the sale to complete the capitalization of First Infrastructure.
MPIC acquired the two Lopez companies’ First Infrastructure stakes for P12.2 billion, or P2.467 per share. This is lower than the company’s close during that day of P7.50 a piece.
The offer will represent a 99.84-percent ownership in First Infrastructure. First Holdings and Benpres each had a 51-percent and a 49-percent interest, respectively, in First Infrastructure, formerly City Resources Corp. The remaining 0.16-percent stake is publicly held.
Saturday, 31 January 2009
Friday, 30 January 2009
By Roel Landingin in Manila
Published: January 29 2009 05:04 | Last updated: January 29 2009 08:58
The Philippine economy grew by 4.5 per cent in the fourth quarter of 2008 from a year ago, surprising economists who had predicted a sharper slowdown in GDP growth from the 6.4 per cent in the same period last year because of the global downturn.
Despite the strong numbers, the Philippine central bank slashed key policy rates by half a percentage point on Thursday, as widely expected by the market.
The monetary authority cut its overnight borrowing rate to 5.0 percent and its lending rate to 7.0 percent. It also said there was room for further easing later.
It was the second 50 basis point cut in as many months and followed similar policy easing by central banks worldwide to stave off the effects of the global downturn.
Officials said economic expansion in the last three months of last year was buoyed by easing energy and food prices and higher remittances from Filipinos working abroad.
Consumer inflation fell to 8 per cent in December from a recent peak of 12.4 per cent in August. Remittances from Filipinos working overseas grew by 15.1 per cent in the first 11 months of the year to $15bn, as the number of Filipinos who left for jobs abroad went up by 27.8 per cent to 1.4m last year.
Strong consumer spending, which accounts for more than two thirds of the GDP, helped cushion the expected slowdown in GDP growth for the entire year to 4.6 per cent in 2008 from a 30-year high of 7.2 per cent in 2007. The annual rise in household spending, while generally weaker than the previous year, picked up slightly to 4.5 per cent in the fourth quarter from 4.1 per cent in the second quarter.
Ralph Recto, the economic planning secretary, said growth this year will likely slow further to 3.7-4.7 per cent as global demand for Filipino labor and merchandise exports ease. Manila is preparing a 330bn peso stimulus package, equivalent to a third of the budget, to create public works jobs and boost incomes through tax cuts and higher social security benefits, he said.
“Construction is seen to be a key growth driver for 2009 as the government realigns the budget to implement fast-moving infrastructure projects,” he said.
The government is also implementing measures to help Filipinos who have lost local or overseas jobs because of the global economic slowdown. It is giving small non-collateralised loans to help them acquire new skills or set up a small business. So far, the government labour department reported that 18,000 factory workers have been laid off. Some economists are predicting the number could go up to a few hundred thousands.
Copyright The Financial Times Limited 2009
THURSDAY, JANUARY 29, 2009 | ECONOMY
MANILA (PNA) -- Despite the reeling effects of the global financial crisis, the Philippine economy posted a 4.6 percent gross domestic product (GDP) growth for 2008.
Latest statistics from the National Statistical Coordination Board (NSCB) show that the major growth drivers were trade, manufacturing, agriculture and fishery, construction and private services.
On the demand side, major contribution came from increased household spending aided by the growths in investment in construction and government consumption.
For its part, the agricultural sector grew by 3.2 percent from 4.9 percent while industry also posted a 5 percent expansion from 7.1 percent and services grew by 4.9 percent from 8.1 percent.
The NSCB also said the economy continued to keep pace with the population growth in the fourth quarter of 2008 as per capita GDP grew by 2.5 percent from 4.4 percent; per capita GNP by 4.3 percent from 3.9 percent.
On the expenditure side, consumer spending reported a lower growth of 4.5 percent from 6.2 percent in 2007. General government consumption expenditure accelerated slightly to 4.7 percent from 4.6 percent in the same quarter last year.
The growth was attributed to the effort made to augment the earnings of government employees.
Exports went down by 7.5 percent from a 3.9 percent expansion in 2007 largely on account of merchandise exports, which contracted by 9.2 percent from a 2.7 percent upturn in 2007.
Imports, on the other hand, declined by 1.2 percent from a measly 0.2 percent growth in 2007 as both merchandise imports and non-merchandise imports recorded negative growths. (PNA)
4th quarter posts stronger growth, surprises analysts
ECONOMIC growth beat expectations in the fourth quarter as higher remittances helped sustain consumer spending.
The gross domestic product increased 4.5 percent from a year earlier after a revised 5.0-percent gain in the third quarter, the National Statistical Coordination Board said yesterday.
Economists expected growth of 3.5 percent.
The economy expanded 4.6 percent last year, slowing from 7.2 percent in 2007.
“What saved us [from a recession] was the domestic economy,” Economic Planning Secretary Ralph Recto said, adding construction, real estate, food manufacturing, trade and outsourcing were the bright spots last year.
Growth in the services sector—the linchpin of the economy—dropped to 4.9 percent from 8.1 percent the previous year. Agriculture, which employs four in every 10 Filipinos, grew 3.2 percent compared with 4.9 percent in 2007, reflecting a drop in rice and corn production due to typhoon damage and high fertilizer costs.
Growth may weaken this year as a world recession cuts exports.
Already, major exporter Intel Corp. has closed its manufacturing plan in Cavite, laying off 1,800 workers and confirming fears of massive layoffs in the semiconductor industry.
The worst global financial crisis since the Great Depression may also crimp the remittances from overseas workers that fuel spending in the Philippines’ $144-billion economy.
The fourth-quarter numbers “show the resilience of the economy, but there will really be a slowdown,” said Jonathan Ravelas, a market strategist at Banco de Oro Unibank Inc.
“There will be hits” in exports and funds sent home from Filipinos aboard, he said.
Despite these concerns, Recto said he expected the economy to grow steadily due to increased spending on infrastructure projects, telling a briefing yesterday that achieving the government’s 3.7-percent to 4.7-percent growth target for this year would be a “welcome challenge.”
Vincent Tien You Tsui, economist at Standard Chartered Bank, said that although the economy slowed down in the fourth quarter and may slow further in 2009, the Philippines could escape outright recession.
“Overall, the Philippines will be better insulated from the collapse of external demand compared with other Asian economies,” as exports accounted for just a third of gross domestic product.
International Labor Organization economist Steven Kapsos said recent high-profile layoffs had not resulted in a marked increase in unemployment so far.
He said the crisis was likely to affect workers “in other ways that are somewhat more difficult to measure, such as declining hours of work, an increase in part-time work, and pressure for lower wages and less job security.”
Unemployment last year averaged 6.8 percent, or one out of 10 Filipinos in the workforce of 58.2 million. Despite the global slowdown, 3,000 Filipinos were still leaving their homes every day for jobs abroad.
About 10 percent of the population works overseas, and last year they sent home an estimated $17 billion, or one-tenth of GDP, and helped to fuel domestic consumption.
Luz Lorenzo, an economist and market strategist at ATR-KingEng Securities, believes the economy got a strong boost from private consumption because of lower commodity prices and increased government spending.
Consumer spending, which accounts for around 70 percent of the economy, rose 4.5 percent, reports said.
In peso terms, Philippine sales abroad dropped 9.2 percent and remittances gained 14.1 in the fourth quarter. Exports may fall 3 percent this year and electronics shipments 10 percent, the Export Development Council was quoted as saying.
In US dollar terms, remittance growth may slow to a range of between 6 percent and 9 percent this year as companies cut jobs and wages, according to the central bank. They rose 15 percent in the first 11 months of last year.
Recruitment for Middle East jobs may make up for weaker hiring in other countries, Recto said. Locally, companies may fire as many as 100,000 workers this year, he said.
The nation may miss its target of one million outsourcing jobs in 2010, the Business Processing Association of the Philippines said this week. Electronics manufacturers are firing workers and reducing work hours, the Semiconductor and Electronics Industries of the Philippines Inc. association said. Holcim’s local unit this month said it was cutting production 12 percent on weak demand.
“Our administration must harness all the resources and the unity we can muster to provide job creation and economic stimulus at a time when it is most needed,” President Arroyo said in a speech yesterday at the Clark Special Economic Zone.
“The global financial turmoil has spread and jeopardized the well-being of people across the globe,” she added. “Two-thirds of the world is in recession but we should all be proud that our country is growing.”
Recto this month said Mrs. Arroyo’s economic stimulus plan aimed to spend 60 percent to 80 percent of this year’s infrastructure budget in the first half.
The central bank last month cut its key interest rate for the first time in 11 months, lowering the benchmark to 5.5 percent from 6 percent.
Services increased 4.9 percent, industrial production gained 5 percent, and agriculture climbed 2.8 percent, according to yesterday’s report. Government spending rose 4.7 percent.
Bangko Sentral Deputy Governor Diwa Guinigundo last week said there was room for further rate reductions as the global recession may be “longer and deeper” than initially expected.
Nine of 13 economists surveyed by Bloomberg expected the central bank to lower borrowing costs again, by half a percentage point to 5 percent, with the rest predicting a quarter-point cut.
“The monetary board would likely adopt a cautious stance given the still strong growth compared to other economies in the region,” said Frederic Neumann, a Hong Kong-based economist at HSBC Global Research who expects the central bank to lower its benchmark by 25 basis points.
“There’s no need for aggressive rate cuts at this stage.” Roderick T. dela Cruz, Joyce Pangco Pañares, Bloomberg, AP, AFP
By EMMIE V. ABADILLA
The Manila Bulletin
The Philippines remains as the text capital of Asia Pacific, with Filipinos sending 2.37 billion text messages or SMS (Short Messaging Service), of the total 6.37 billion texts sent over messaging firm Acision’s regional network over the 2008/2009 Christmas and New Year period.
Now with 66 million Filipino mobile subscribers, texting in the Philippines increased 65% compared to the 2007 Holiday period, reaffirming that SMS still remains the communication mode of choice, according to Acision.
Overall, SMS traffic surged 40% in Asia Pacific during the period, forming the bulk of traffic. On the other hand, Multi-media Messaging Service (MMS) messages which include images, audio and video, rich text, totalled 9.54 million, company data revealed.
Indonesia ranked second to the Philippines, with 1.193 billion SMS sent, followed by Malaysia, with 1.075 billion, and Pakistan, with 763 million.
However, in terms of year-on-year growth, Pakistan traffic volume grew by 253% compared to last year during the same period. Australia grew 57% while Indonesia went up 27% and Malaysia, 13%.
Thursday, 29 January 2009
The Business Mirror
The Philippine economy in 2009 will grow at no less than 0.5 percent below 2008 growth. Take the final gross domestic product number for 2008 that will be released in a month or so, subtract that 0.5 percent, and that is the absolute worst-case scenario for 2009. My best-case scenario is that the economy will grow at a rate of 0.7 percent higher than for 2008. The only exception would be in the event of a major natural disaster.
How can I be so sure? I am not an economist. I do not have a research “think tank” at my disposal. I do not use any sort of economic models.
As I mentioned weeks ago, major financial institutions have Philippine grow estimates ranging from 1.8 per cent to over 5 percent. How could there be such a wide disparity among these experts? They supposedly use the same data to make their predictions. They speak to the same business and political leaders. They have the same training and experience. Yet, they cannot agree and, in my opinion, most are going to be completely wrong. And I am going to be right.
Economic forecasting is based on economic models. In other words, if this happens, then that will happen, because all parts of an economy interconnect and interact. Seems simple. Every business owner understands the principle. Extending your retail-store business hours may increase the number of customers you serve, but also increases operating expenses. Then you calculate to see if that move would be profitable. That is a business model.
An economic model works the same way, but you must know and understand all the factors. I believe that most of the economic models do not have a clue about how the Philippine economy really works.
Note that about 70 percent of the beer that San Miguel sells is through sari-sari store-type operations. In order for the traditional economic models to work properly and the forecasting that comes from them, you must know what happens. You must be able to calculate the economic impact of a bottle of beer from before it is manufactured, all the way to the last drop finished on a Friday-night drinking spree. But after the San Miguel truck drops off a few cases at your local sari-sari store, the economic models are dumb and blind. And that is why the economists can rarely get a handle on this economy, particularly in these times of many uncertain variables.
The cap on the bottle of Red Horse I drink every night says the price is P26. Except the nearest store charges P28, and the one a little farther away prices at P27. No one at Deutsch Bank,
JPMorgan, UP, the National Economic and Development Authority or any another expert knows that my neighbors and I pay 5 percent to 8 percent more than the “official” price. Their forecasts are based, incorrectly, on P26.
Every month the owner, Lola Beng, pays P350 on her memorial plan. None of the experts have any idea where that money comes from. They can count the payment but cannot count her income contribution to the economy. There aren’t any ORs and she does not file any tax return. Lola pays a teenager to deliver me a half-case once a week. She pays him and I tip him, again, off the books. He buys 2T oil and tires for his motorbike without any records. When he eats at the local karinderya, the value-added portion of the price of his meal does not show accurately. And this scenario is repeated a hundred different ways, a million times a day in the Philippines. It all adds up.
If a public official can testify before a congressional hearing that he did not report nearly a million pesos in bank transactions for his business “that’s part of the informal economy,” and any profits on which taxes were probably not paid, how can the “informal” economy and its impact on the total economy ever be measured?
There is no way economic forecasts can be made accurately when the forecasters have very little idea about the way the money flows and how the economy functions.
Furthermore, negative perceptions are created based on totally incomplete information and analysis. Read this: “The value of imported mineral fuels, lubricants and related materials plunged 44 percent to $539 million” in November 2008 from November 2007. Well, obviously, oil imports “plunging” means the economy is in very bad shape because people do not have money for gas and business is not using fuel to deliver products. Wrong, wrong, wrong.
In November 2007, crude oil averaged nearly $90 per barrel; in 2008, the price was below $50. Of course, our import bill for oil went down. Nearly 30 percent of the drop in Philippine imports for November was because of cheaper oil prices. And that is good for the economy.
Electronic imports fell like a rock. But electronic exports contribute slightly more to the economy as the outsourcing business, both in foreign revenue and employment. And because demand is down, computer prices are also dropping like a rock. A brand-new HP computer selling in the United States two months ago for $900 is now priced at $300. A year from now, the headlines will read, “Electronic imports up 50 percent.” That is the way the markets work. And that headline will not give an accurate picture, either.
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The Business Mirror
BAGUIO CITY—La Trinidad valley is known as the Salad Bowl of the country, because of the fruits and vegetables grown here and in other parts of Benguet province.
Little known is the ingenuity of early Chinese settlers here and in the province in general when it comes to business, an enterprising spirit that gave rise to what has become the lifeline of industry in this region—agriculture, especially in semitemperate vegetable farming.
The Spring Festival, or the Chinese New Year, which this year fell on January 26, celebrating the Year of the Ox, was celebrated in the city with the traditional dragon parade and a forum on the contribution of the Chinese in Baguio and Cordillera.
Dr. Charles Cheng, recipient of the city’s outstanding citizen’s award for descendants of early Chinese settlers here, delighted a big audience on snippets from his research on the topic.
“When the Americans built Camp John Hay in the early 1900s as a rest-and-recreation area for soldiers of World War II, the Chinese capitalized on the love of the Americans for green salad,” he said.
The Chinese raised semitemperate vegetables and turned areas blessed with an abundance of water, like La Trinidad, New and Old Lucban, Happy Homes, into gardens. They cultivated lettuce, watercress, pechay, celery and others now popularly known as vegetables from the province.
From the Chinese, Cheng said, came the early secrets of producing sweet tasty vegetables. The first Chinese farmers pounded empty pods of soybeans for fertilizer.
In the 1950s, two Chinese well-versed in agriculture sciences bulldozed and made garden terraces along the mountain trails, traversing the towns of Buguias, Sayangan and nearby places. They also found a way to draw water from the rivers and irrigate the gardens.
A Chinese farmer named Rubustiano Choy was known as the Potato King. He produced eight to 10 kilos of potatoes in 1955 and 1956. A certain Mayor Yap of Buguias was also named Celery and Womboc King for his unusually large vegetables.
Even the rose flower industry of Benguet had its roots traceable to the Chinese. A certain story on this is akin to some sort of a miracle. Cheng said a nun gave a certain Ruben Cantala a rose, on which petal he saw the face of Jesus Christ. He then went to the Antipolo church and offered the flower there. Afterward, he dreamed that he must propagate roses. On his return to Baguio, Cantala grafted roses, the irony of which is what we call American roses. Today Baguio-Benguet is also known as the rose capital of the country.
Names of Benguet and neighboring provinces also speak of the early relationship between the Chinese and the regions. Sayangan, another vegetable-producing town in the province, was so named by the Chinese because they saw how the farmers there gambled away their money each payday. Sayang in Chinese, according to Peter Ng, president of the Cantonese Association in Baguio, means to squander money.
Dagupan, Ng said, also comes from the Cantonese word Dai - kupan, meaning big chunks of investment.
Lingayen is really the story of Lin Feng, popularly known as Limahong, written in history by the Americans as a pirate. “He revolted against the Emperor and was thus driven out of China, and found his way to the Philippines with his men, attacking Intramuros in 1574, and killing Martin de Goiti,” said Michael Ang, a professor of the University of the Philippines-Baguio, during the said forum. Limahong then retreated to Pangasinan, where legend has it he was caught by the Spaniards.
Cheng, however, says there was really no testimony to what really happened.
He said he researched the archives of China and found a material that says the so-called Lingayen tunnel was really dug by Limahong and his men to escape the Spaniards. The tunnel was an escape route that led to the Agno River and the Benguet towns of Bokod, Buguias and Kabayan. Ling is a family name, and Ku stands for a person, and Yan for people.
Chinese influence in the Cordillera region, said Cheng, can be seen in the hanging coffins, which can be found in China. “The Chinese buried them hanging from high places as it was believed [the dead] would be nearer to their creator. Also, wild animals would not be able to eat the corpses.”
Cheng added that Igorot houses without pillars are influenced by Chinese architecture. China and the Philippines were once linked and long ago separated geographically by forces of nature.
“[People from] Yunan province look like the Cordillerans. They have the same rice terraces and celebrate rituals with gongs and the same dances,” Cheng said.
Cheng explained that, by heart and soul, those of Chinese descent here definitely like Filipinos. That is why people should “treat us as Filipinos. If the Philippines progresses, so do we.”
He noted there is no written record of any conflict between the Chinese and the Filipinos.
In fact, the Spaniards and the Japanese were not able to penetrate the Cordillera region. An anecdote tells of how the Chinese made friends with the people of Cordillera. A hunter named Chu-gi entered Vigan and found a trail that led him to Bokod, Mountain Province. When he felt hungry, he shot and roasted a deer. The aroma of roasted meat wafted toward the village. The natives came and all shared in the sumptuous roast. “There goes the beginning of the canao,” Cheng said, referring to the traditional communal festivities of the mountain tribes. Chu-gi’s descendants can still be found in Mountain Province.
Ang, citing the studies and writings of Teresita Ang See, said there are more Filipinos of Chinese descent, or Tsinoy, belonging to the younger generation 49 years old and below. Compared with the Tsino, known as the old guards, or those born in China and of pureblooded parents, the Tsinos who live in the Philippines see themselves as pure Chinese and remain loyal to their country of birth.
Tsinoys have Western names and Chinese surnames like Michael Ang, while the Tsino has both given and family names in Chinese. Tsinoys are comfortable in the company of non-Chinese and speak Tagalog or English more than Chinese. They go to Philippine schools and are “Westernized.”
The first wave of Chinese who came to Baguio was the Cantonese from the province of Canton. They helped build Kennon Road. Cheng said around 3,520 Chinese men—not Japanese workers—toiled to build Kennon Road. During this time, intermarriages with local people took place, especially since Igorot ladies cooked meals for the Chinese. Courtship and marriage happened with the use of sign language.
In the 1930s, another wave of Chinese, the Fukienese from Fujien or Amoy, came to settle in Baguio.
Other Chinese who settled in the region taught the Ibaloys—original inhabitants of Benguet—how to pan for gold.
Cheng said from 1910 until before 1945, 85 percent of business establishments in Baguio were owned by Chinese. This has slowly declined, as many of the younger generation have migrated elsewhere.
The Manila Standard
THE PLDT group led by Manuel Pangilinan has acquired a majority share of the Philippine Star group of publications for an undisclosed amount, sources close to the transaction said yesterday.
As part of the agreement, the Belmonte family will stay on as minority shareholders with a management contract for three years. The deal covers the printing press, the broadsheet and several tabloids, including The Freeman of Cebu.
The Philippine Star is scheduled to hold a board meeting today to discuss the details of the purchase.
The minority shareholders, including the estate of the late Star publisher Maximo Soliven and physician Charles Chante, have agreed to the purchase, according to the same sources.
By Alena Mae S. Flores
The Manila Standard
PTT Philippines Corp., a subsidiary of PTT Public Co. Ltd. of Thailand, will invest P500 million for its expansion plans in the country this year, a ranking company official said.
PTT Philippines president Siripong Phoungpaka told reporters that it would spend bulk of the investment for the construction of additional retail stations around the country.
Siripong said the company planned to put up around 16 stations in selected areas this year, bringing its total number of stations to 50 by the end of 2009.
Each station costs between P5 million and P25 million, depending on the location and size.
He said PTT would spend P6 million for the blending of its facilities to comply with the mandate to mix gasoline with 10 percent ethanol starting Feb. 6.
Ethanol, also called gasohol, is an alternative fuel source produced from organic matter. It is a byproduct of fermented carbohydrates ,such as starch or sugar found in agricultural crops.
PTT yesterday launched its Performa 95 plus (E10) gasoline at its Park n’ Fly Service Station in Pasay City.
Siripong said PTT would buy its ethanol requirements from Thailand. PTT’s parent company, owns 11 ethanol plants in Thailand.
“An ethanol plant costs about P1 billion. Our plan to invest in an ethanol plant in the Philippines will depend on market demand,” the official said.
He said E10 in Thailand cost around P8 to P9 per liter cheaper than regular gasoline, which makes the product more attractive to consumers.
Siripong said the government of Thailand through the energy fund subsidizes the price difference as a form of promotion for alternative fuels.
He said the Philippine government can reduce the cost of ethanol by P3 to P4 per liter during the start of the ethanol program by removing the excise tax on imported fuels.
By Jenniffer B. Austria
The Manila Standard
Property giant Ayala Land Inc. yesterday secured a P2.38-billion financing facility to help fund the company’s capital expenditures this year.
The company currently has P8 billion in cash.
Ayala Land chief finance officer Jaime Ysmael, in a disclosure to the stock exchange, said the facility, which is in the form of privately placed fixed rate corporate notes issued by the company, would come in three tranches with maturities of five, seven and 10 years.
“The proceeds are intended for general corporate purposes, including capital expenditures,” Ayala Land said.
Joint lead managers for the facility were Insular Investment and Trust Corp., First Metro Investment Corp. and BPI Capital Corp.
Ayala Land earlier said it would spend P20 billion in capital expenditures this year and had no plans to slow down in the construction of real estate projects despite the expected economic downturn.
Ayala Land president Jaime Ayala earlier said the company would remain aggressive with its expansion plans and saw growth in the office sector as well as housing projects, especially those catering to the low- and middle-income groups.
Funding for the P20-billion capital expenditure will be internally generated and could be sourced from peso borrowings.
The company said it was prepared to make adjustments on its strategies and planned to focus on horizontal housing developments and residential condominiums that offer lower price points to buyers.
The company said Avida Land, which caters to the low-income segment, and Alveo Land, which is for the middle-income market, continued to show strong growth in sales.
Meanwhile, Ayala Land will push through with the redevelopment of Glorietta mall and add several floors of office buildings as well as a three-star hotel on top of the shopping center.
To fly friendlier skies
MAKATI BUSINESS CLUB
BY VIVIEN SUERTE-CORTEZ
TOURISM REMAINS one of the country’s major growth drivers. In 2007, visitor traffic reached 3.1 million and total international tourist spending reached $4.9 billion.Each tourist spends an average of $1,200 each trip and can support one job for an average Filipino worker for one year.
Increasing foreign tourist arrivals leads to increased creation of direct and indirect jobs in the tourism service industry. Thus, the Department of Tourism is targeting 5 million tourist arrivals to generate $5 billion by 2010. To do this, aviation experts say the country needs 10 million airplane seats, with at least 6 million seats to service Northeast Asian markets with a projected growth rate of 20% per year.
Thirteen years ago, affordable airfare and multiple airline choices were not available. It was the passage of Executive Order 219 in 1995 that transformed the domestic and international civil aviation policy of the Philippines. EO 219 designated at least two Philippine carriers and opened the floodgates to cheaper and punctual flights with the entry of Cebu Pacific, Asian Spirit (now Zest Airways), Seair, and Air Philippines.
EO 253, released in 2003, aimed to strengthen EO 219 by expanding air services to the Diosdado Macapagal International Airport at the Clark Freeport Zone, and the Subic Bay International Airport at the Subic Bay Freeport Zone.
The measure opened up the DMIA and SBIA to international air cargo operators and resulted in a major jump in commercial air cargo. The liberalized charter policy under the Civil Aeronautics Board’s Resolution No. 23 also aimed to enhance the development of the secondary gateways. It enabled low-cost airlines to fly to Clark to create new markets and provide alternatives to passengers.
The liberalized air policy was further bolstered when EO 500 was signed on January 2006, designating the DMIA and SBIA as developmental routes. It allowed budget airlines to fly to DMIA without limitation on traffic rights, capacity, and air freedom rights except cabotage (transport between two points within the country).
However, seven months after its promulgation, EO 500-A was issued, which required budget airlines to be designated first by their country of origin. It also limited airlines to third and fourth air freedom rights only, meaning budget airlines could no longer fly to a third country.
Presently, although it has made gains, the Philippines still lags behind its Southeast Asian neighbors—Malaysia, Thailand, Singapore, Indonesia, and Vietnam—with regard to number of tourist arrivals.
Compared to its neighbors in 2007, the Philippines, with 3.1 million arrivals, was sixth. Malaysia led with 20.9 million visitors; followed by Thailand, 14.5 million; Singapore, 10.3 million; Indonesia, 5.5 million; and Vietnam, 4.2 million.
In the 2008 Travel and Tourism Competitiveness Index report published by the World Economic Forum, the Philippines ranked 81st among 130 economies. The ranking was based on the scores and rankings of each economy in three sub-indices: travel and tourism regulatory framework; business environment and infrastructure; and human, cultural, and natural resources.
The report indicated that matters of concern that the Philippines needs to address are “safety and security (ranked 113th), health and hygiene levels (91st), and a transport and tourism infrastructure that requires upgrading.”
Air access is important as the country gears itself to be a competitive player in the tourism industry. By 2006, the Philippines’ long-standing bilateral air service agreements with South Korea, Japan, Taiwan, Singapore, Hong Kong, Malaysia, Thailand, United Arab Emirates, Netherlands, and Germany had already reached a level of full or high utilization of entitlements. This means that the parties to the ASAs were close to reaching the maximum seat and flight capacities set forth in their respective agreements.
Since May 2007, the Philippine air panel has held air talks with key markets. The successful conclusion of new air agreements with South Korea, Canada, New Zealand, Macau, Hong Kong, and Thailand has significantly expanded air access to and from the Philippines, particularly through the DMIA.
In less than two years, from a combined 23,850 airplane seats per week, the Philippines increased its entitlements to at least 58,100 seats per week to Korea, Macau, New Zealand, and Hong Kong.
DMIA alone gained 12,600 seats per week in new entitlements as a result of their proactive stance and visibility during the conduct of air talks. The recent air talks also led to new and increased entitlements to other secondary gateways, such as Davao, Cebu, and Laoag.
In the south, the Philippines signed in November 2007 a memorandum of agreement to enhance economic growth in the East ASEAN Growth Area, which covers Mindanao and Palawan for the Philippines. The MOA effectively put in place an open skies policy by granting fifth-freedom traffic rights to selected airports in the BIMP (Brunei, Indonesia, Malaysia, Philippines) region. It also encouraged the development of international gateways—in Davao, Zamboanga, General Santos, and Puerto Princesa—covered by the agreement.
In November last year, transport ministers of the Association of Southeast Asian Nations (ASEAN) signed three deals that seek to liberalize freight and other air services in the region, namely Multilateral Agreement on the Full Liberalization of Air Freight Services, the Multilateral Agreement on Air Services, and the ASEAN Framework Agreement on the Facilitation of Inter-State Transport.
The adoption of an open skies policy means foreign airlines will be able to operate unlimited services in the country. Save Our Skies, a nongovernmental organization that advocates fair trade and fair skies, believes, however, that the country’s skies are part of the national patrimony.
They also believe that foreign flight entitlements should be subject to reciprocity. The principle of reciprocity dictates that for every entitlement granted a foreign carrier, the same concession must be given to the Philippines by the foreign carrier’s country. The group Fair Trade Alliance also believes the same and pointed out that countries with landing rights in various airports in the country have not granted the same privileges to the Philippines. For instance, Macau denied Asian Spirit’s application to operate in Macau, while Tiger Airways can fly freely between Clark and Macau.
On the other hand, various overseas Filipino workers’ groups, local business chambers, and the National Competitiveness Council argue that liberalizing restrictions will better serve the national interest of the Philippines. For the Civil Aeronautics Board, “national interest” should take into consideration the larger interest of the country, especially the users of air services.
Moreover, reciprocity is not simply about reciprocal flights but reciprocal benefits that would have a large impact on the country’s economic development.
The current trends in the Philippine aviation industry seem to point that we are well on our way to liberalizing our skies. The country’s tourism target by 2010 is realistic provided that the industry continues to grow at least 20% every year. This can be done by aggressively seeking new markets and enhancing our relationship with current ones.
Secondary gateways must be opened to new markets, while airport infrastructure should be developed and rationalized. The country needs to optimize our airports’ current capabilities and proceed with expansion plans for the airport terminals to accommodate future capacity.
The case of the DMIA in Clark is well documented—“build it and they will come.” As a result of the CAB’s Resolution No. 23 and EO 500, the DMIA became an international gateway utilized by South Korea’s Asiana Airlines, Malaysia’s Air Asia, Singapore’s Tiger Airways, and the United Parcel Service. The airport’s passenger traffic rose by 950% from 49,546 in 2004 to 470,867 in 2006. There has also been an at least 70% increase in tourist arrivals, from 55,000 visitors in 2005 to 93,000 in 2006, boosting the tourism industry and real estate business in the Clark area. At least $200 million in tourism receipts were generated in 2006.
Competition has lowered airfares, provided more airline choices, and, evidently, increased local economic development. OFWs and their families are now able to hold reunions more often because of the more affordable plane fares. And, in this liberalized environment, the country’s two flag carriers and smaller industry players have been posting profits.
The fast-paced growth of the tourism industry indicates that it has been responding to the increasing number of passengers and tourists. Discounting a few hiccups, the Philippines’ target of 5 million tourist arrivals by 2010 may soon be within reach.
The Makati Business Club is a private non-stock, non-profit business association. It is dedicated to addressing economic and social policy issues which affect the development of the Philippines. For inquiries on MBC, please contact Isabel A. Lopa at firstname.lastname@example.org.
Wednesday, 28 January 2009
WEDNESDAY, JANUARY 28, 2009 | PROGRAMS/PROJECTS
MANILA (PNA) -- The government’s anti-hunger program has yielded new job opportunities for nearly 1.4 million unemployed or underemployed poor folk.
National Anti-Poverty Commission (NAPC) Secretary Domingo Panganiban on Wednesday said new jobs were created through the expansion of micro-finance services, construction and maintenance of farm infrastructure, coconut inter-cropping and aggressive rice seeds subsidy and skills training programs.
The figures were based on the 2008 accomplishment report of the National Nutrition Council (NNC) on its Accelerated Hunger Mitigation Program (AHMP).
"The creation of jobs for hungry folk is among the primary objectives of the Accelerated Hunger Mitigation Program (AHMP) and we are pleased to say that our efforts to ensure jobs for the poor have been successful," said Panganiban.
He made the announcement even as government moves to strengthen its anti-poverty and anti-hunger programs in the face of the global economic meltdown.
NAPC will lead a "Forum on Hunger Mitigation, Population Management and Poverty Reduction" at the Institute of Small Scale Industries at the University of he Philippines in Diliman, Quezon City Thursday to assess the government’s pro-poor and anti-hunger policies and targets for 2009.
Key government officials, the basic sectors, and representatives from the United Nations’ Food and Agriculture Organization (FAO) and the UN Population Fund are expected to attend the forum.
"The intent of the forum is to build on our accomplishments in the fight against poverty and hunger, improve program policies and implementation structures, and ensure that all of President Gloria Macapagal Arroyo’s pro-poor and anti-hunger targets for 2009 are met," said Panganiban.
For her part, NAPC Assistant Secretary Dolores de Quiros Castillo said that the government’s micro-finance program had already created over a million new jobs for the poor as of July last year.
"Another 292,372 poor folk were trained for higher paying jobs through the government’s various skills training programs," she added.
Around 38,507 rural workers also found new earning opportunities through the "Coconut Inter-cropping Program" of the Department of Agriculture (DA).
Another 10,761 more workers were hired for irrigation projects while some 26,326 Filipinos were put to work on roadside maintenance projects.
"The President has issued clear orders for all agencies to fast track and intensify government anti-hunger measures and pro-poor programs this year. She has emphasized the need for more jobs for hungry Filipinos," the NAPC chief said. (PNA)
Tuesday, 27 January 2009
TUESDAY, JANUARY 27, 2009 | OFW
MANILA (PNA) -— Data from the Philippine Overseas Employment Administration (POEA) show that monthly salaries of overseas Filipino workers (OFWs) abroad have doubled despite the prevailing global crisis.
“The salary rates of Filipino professionals and other skilled workers in the Middle East are still increasing. While other countries are laying off workers, you will be surprised that there has been no drop in the salaries of workers in the Middle East and other OFW destinations,” Lito Soriano, a local recruitment official, said.
Countries in the Middle East have not been affected by the crisis. “In fact, the salaries for our professional workers rose by 50 percent or even higher compared to 2006 to 2008 levels,” he said.
From a minimum monthly salary rate of US$ 1,200, Filipino engineers are now being offered a monthly pay of US$ 3,000 and above, he added.
Soriano said the Middle East is still the best place to earn at this time because employers are shouldering the board and lodging of their employees.
The increasing trend in salary rates and rising demand for OFWs in the Middle East are due to an ongoing construction boom, and is expected to continue until 2010. “We see a huge jump in the number of re-hires this year and the next,” he said.
Meanwhile, the government is finding ways to provide employment to OFWs who have lost their jobs abroad.
Government’s economic managers are currently re-mapping a common legislative economic agenda that will factor in OFWs who might be laid off from the US, the Middle East and Europe.
The POEA said reports on OFWs losing their jobs because of the creeping global recession is a serious concern, and that government should come up with policies and programs anchored on real facts and figures.
With the advent of advance computing technology, it is no longer impossible for the government to get specific names, employment history and field of specialization of unemployed OFWs, the agency said.
A menu of possible government assistance can even be automatically generated through the aid of computing technology. “This will help the government determine what kind of assistance they would need,” the agency said.
“If they have entrepreneurial skills, maybe the government can refer them to the Department of Trade and Industry for assistance in putting up their own business, or give them re-employment priority for available job opportunities in countries which continue to have a demand for overseas contract workers.”
POEA highlighted the need for the creation of an accurate and comprehensive central database of Filipino workers here and abroad who have lost their jobs in the aftermath of the global financial crisis. (PNA)
Paolo Luis G. Montecillo
LOCAL START-UP airline Spirit of Manila Airlines Corp. took delivery of its first aircraft last week, which it will use for planned flights to the Middle East and other Asian destinations from the Clark Freeport in Pampanga.
In a statement, the company said it received its first plane, a 150-seater Boeing 737-300, on Jan. 20. It was renting the aircraft from Spirit Leasing Corp.
"This will usher in the preparation of Spirit of Manila Airlines of its intended operations at the Diosdado Macapagal International Airport in the Clark Free-port Zone," the company said.
The company signed the lease agreement with Spirit Leasing Corp. in August.
Meanwhile, Spirit Leasing Corporate Communications Consultant Eric A. Apolonio said negotiations between the company and the airline for the lease of larger planes to be used for long-haul flights to the Middle East were ongoing.
The airline, which was originally incorporated in January last year as an aircraft leasing firm, declined to say how much it was paying for the rent.
Mr. Apolonio, who is also the spokesman of Spirit of Manila, said the airline would need several more aircraft to serve the routes approved by the Civil Aeronautics Board (CAB).
The airline plans to start flights to Asian destinations in the first quarter.
In November, the CAB approved Spirit of Manila’s applications to fly to Taiwan and Macau in Asia, and Kuwait, Bahrain and Dubai in the Middle East.
No other local airline flies to the Middle East. Flag carrier Philippine Airlines halted flights to the Middle East, which the company considers an unprofitable route.
Spirit of Manila is the latest Filipino-owned airline that will offer international and regional passenger services from Clark to key Asian and Middle Eastern countries.
The carrier recently bought a 10-hectare property at the Diosdado Macapagal International Airport in Clark to house its fleet of Boeing aircraft. The company will soon start building large hangars for aircraft maintenance services to the airport’s regional and international carriers.
By GENALYN D. KABILING
The Manila Bulletin
President Arroyo yesterday announced a P300-million housing program for members of the police force in appreciation of their hard work and courage in keeping peace and order in the country.
Apart from providing decent homes for the men and women of the Philippine National Police (PNP), the President also ordered the upgrading of police clinics into small hospitals, establishment of more drug stores near police camps, among other benefits for the police force which, she said, has regained public trust.
"Over the weekend, I talked to Budget Secretary Rolando Andaya Jr. to allocate R300 million for police housing. And the Secretary of Interior and Local Government Ronaldo Puno will confirm to you that I instructed him to have the bidding for the whole amount done in the next few days," she said during the 18th anniversary rites of the PNP in Camp Crame, Quezon City.
Using revenues earned from fiscal reforms, the President said her government has already built housing units for policemen at Camp Bagong Diwa in Bicutan, Camp Makabulos in Tarlac, Camp Castañeda in Silang, Cavite, and Camp Capistrano in Cagayan de Oro City. "There are also 400 hectares reserved for them in San Miguel, Bulacan," she added.
The R300-million fund is part of the P1.7-billion requested by the police to bankroll the construction of housing projects for 67,400 police personnel who do not have their own houses.
The President also directed Puno and Health Secretary Francisco Duque III to improve the facilities of police clinics in the country’s poorest provinces, including the Autonomous Region of Muslim Mindanao, Cordillera Administrative Region, and Caraga region.
She asked Puno to establish more "Botika sa Barangay" inside and near police camps so members of the police force are able to buy low-cost medicines.
The government drug stores, the President said, should be set up in Tawi- Tawi, Zamboanga del Norte, Maguindanao, Apayao, Surigao del Norte, Dinagat Islands, Lanao del Sur, Northern Samar, Masbate, Abra, Misamis Occidental, Agusan del Sur, Kalinga, Surigao de Sur which have the "biggest poor population and most hungry population."€
In giving the package of benefits, the President thanked members of the police force for their courage and dedication to duty in manning stations, responding calls for help, and keeping order in communities.
Mrs. Arroyo also commended the police for erasing perceptions of doubt and fear and regaining public trust, citing a survey showing the PNP is the government’s 6th best performing agency.
She praised the police for decreased crime incidence, particularly street crimes, bank robbery, kidnapping, and carnapping, while upholding human rights and following operational procedures.
The President noted that the government has stretched funds to implement programs to uplift the plight of policemen, citing salary increases, and access to better health care. She said government resources were set aside to carry out the PNP modernization, including purchasing equipment and hiring of 12,000 police recruits last year.
This year, the President said she expects the police to further improve their service to the public and continue to maintain peace and order.
With the shift of peace efforts to authentic dialogues with communities, she said the police must activate and strengthen the local peace and order councils that will consolidate and monitor peace and order plans in various communities.
"Our policemen and women have been valuable contributors to the peace in Mindanao and to the peace all over the country--in the countryside, in the streets," she said.
Mrs. Arroyo said she has high expectations for 2009 as a comeback year for peace and progress in the conflict-torn region with former PNP chief Director General Avelino Razon Jr as the new presidential peace adviser.
She said government peace negotiators have been directed to touch base with Malaysian facilitators as well as with the Moro Islamic Liberation Front for the resumption of peace talks.