Thursday, 19 March 2009

Philippine Public Works Department defends record

DPWH has taken steps to stem graft, says Sec. Ebdane

MANILA (PNA) -- Department of Public Works and Highways (DPWH) Secretary Hermogenes Ebdane Jr. said on Thursday stressed that steps have been initiated by his agency to address ``perceived anomalies and systematic weaknesses`` in public bidding and procurement in the implementation of infrastructure projects.

Ebdane was reacting to the Pulse Asia 2009 survey placing DPWH as the ``most corrupt government agency according to public perception.``

He said: ``We welcome the feedback that the survey provides on how we have addressed the concerns in fighting graft and corruption. It is unfortunate that the intensified efforts for expanding the infrastructure network across the islands and providing jobs from the economic stimulus plan are being overshadowed by the controversies arising from recent issues.``

He added that the public works and highways department ``will continue its job on the ground and ask the public to work with us in addressing these perceived weaknesses by continuing to interact with the DPWH on transparency and efficiency matters.``

Ebdane said his agency remains committed to re-intensify its efforts in strengthening its partnership with various institutions such as the World Bank, the Australian Agency for International Development (AusAID) and Bantay Lansangan.

Among DPWH`s various specific measures intended to deter collusion and prevent opportunities for corruption are:

--The adoption of post-qualification procedures that will determine the contractor`s capability after bids are submitted.

--While there are pre-qualification requirements, the post-qualification procedures protect the process. This also encourages the participation of more bidders, an indicator that the process is healthy and viable.

--The full participation of ``Bantay Lansangan`` or Road Watch which is supported by AusAID which is fulfilling its mandate to check on the procedures and process of ongoing and future projects of WB and other institutions.

--The organization of a new Project Management Office (PMO) for WB National Roads Improvement Project 2 (NRIMP) headed by Undersecretary Romeo Momo and Director Carlos Mutuc.

--The presence of Independent Procurement Evaluators, Independent Technical Audit, Financial Management Advisors, Organizational Effectiveness Advisors and Internal Audit Strengthening -- all co-financed by institutional partner AusAID to improve transparency and integrity of the procurement process. (PNA)

Manila river ferry to Napindan links up with C-6 route

Leo A. Estonilo and Joel M. Zurbano
Manila Standard

The Pasig River ferry sails further upstream to Napindan Channel while the Department of Public Works and Highways starts this month its P48-billion C-6 Expressway alignment.

Nautical Transport Services Inc., ferry owner, opened a satellite station in Nagpayong, Pinagbuhatan in Pasig City near the C-6 Napindan bridge, at its built-up section that doubles as a flood-control dike on the Laguna lake shoreline.

Ed Bondad, Nautical Transport president, said the entire 27-km downstream to Plaza Mexico in Intramuros, Manila could be covered in an hour and a half of traffic-free cruising.

“We’re doing 24 trips on weekdays,” he said, adding that at peak capacity of 150 passengers per boat daily, his six-vessel fleet of air-conditioned catamarans is rated for at least 3,000 riders.

Bondad said the Marikina line would have stops in Eastwood, Quezon City along with Riverbanks and Sta. Elena in Marikina City.

The ferry service is operated by the Pasig River Rehabilitation Commission, an agency under the Department of Environment and Natural Resources.

Malacañang has ordered the commission to lead the cleanup of the waterway and its tributaries by regulating dumping of domestic and industrial waste, relocating settlers, improving water quality and promoting its use as a linear park and an alternative transport route among other tasks.

According to Public Works senior undersecretary Manuel Bonoan, C-6 is a six-lane tollway connecting the North Luzon Expressway in Marilao, Bulacan and the South Luzon Expressway in Bicutan, Taguig City, designed to decongest the road network in Metro Manila and spur growth in Central Luzon and the Southern Tagalog provinces.

“The project is now under feasibility study. Within the year, the department will start implementing the first segment,” he said.

When the 65-km road is completed, motorists from Bulacan going to Laguna or Cavite and vice versa will be able to bypass congested main roads in the metropolis.

“Definitely, it will have an impact on traffic. The project will relieve the traffic on either Edsa or C-5,” said Bonoan.

As programmed, P39.195 billion of the road’s budget goes to engineering and civil works while P4.841 billion takes care of right-of-way acquisition; construction targets completion in 2018.

The road will cut through San Jose del Monte City in Bulacan, turn southward and pass through Rodriguez (formerly Montalban), San Mateo, Antipolo City, Angono, and Taytay in Rizal province, entering Taguig to reach the south tollway.

C-6 will be fused with the proposed Laguna de Bay Coastal Road to Alabang, Muntinlupa City, proceeding to Cavite province’s Bacoor, Imus, Kawit, Noveleta, and Cavite City.

The infrastructure package is bundled up in three segments: North Section, NLEX to San Jose del Monte, Bulacan (16.4 km); East Section, San Jose to Marcos Highway, Antipolo (25.5 km); and Southeast Section, Marcos Highway to SLEX (22.8 km).

More Filipinos saving, investing—BSP survey

By Lawrence Agcaoili
Manila Standard

More Filipino families are saving and investing money sent home by their relatives working overseas to cope with the full impact of the global economic crisis.

The Consumer Expectation Survey in the first quarter conducted from Jan. 12 to 23 by the Bangko Sentral showed that the percentage of households that allotted portions of remittances to savings and investments increased in the first quarter of the year from the fourth quarter of last year.

The survey also showed that one out of 10 households in the Philippines had at least one family member working or living abroad.

It added that the portion of remittances allotted for savings increased to 40 percent in the first quarter of the year from 35.8 percent in the fourth quarter of last year while the amount utilized for investments inched up to 5.9 percent from 4.7 percent.

The survey showed that 11.2 percent of the households that receive remittances from their relatives abroad bought houses.

Bangko Sentral Deputy Gov. Diwa Guinigundo told reporters that the increasing proportion of remittances allotted for savings and investments was good for the economy because the multiplier effects could be significant in the future.

“Savings and investments increase the pool of resources available to both households and companies for their credit needs. That helps sustain economic activity,” he said.

Guinigundo said there was room for further growth in the country’s level of savings, which is lower than other countries in the region.

Being who you are, and being proud of it

John Mangun
Outside the Box
Business Mirror

What am I? Well, I am a very good poker player, excellent public speaker and a fine enough cook to have worked as a sous chef on a cruise ship. I cannot sing or paint anything more than a wall or ceiling.

I cannot play the piano or rebuild an automatic transmission. I can find a position using a sextant and navigate and pilot a boat without error. I am too short for basketball and too small for football, but I can scuba-dive and endurance-swim. I am who I am, the product of 50 generations of genetics and much more than 50 years of life. That’s what makes people who they are and makes countries what they are.

I keep reading things that bother me. The first is that the Philippines is not facing some of the same economic problems as those countries dependent on exports to the West because we were too stupid, too lazy or maybe too unlucky to have developed our export business during the last 20 years. They often say the Philippines could have done so much more had we gone into manufacturing. How we wasted opportunities and did not progress like our neighbors because we did not do what they did. Just look at China and Taiwan.

That reminds me of a nasty old aunt of mine who constantly said I was wasting my life because I did not train to be a doctor. Maybe I could have been a doctor except for one thing: I do not like being around sick people. And for five generations, no member of my family has ever been a doctor. Perhaps it is in my genes.

People have to do what they do best, based on the characteristics they are born with and their life experience. Just like countries.

America was never really good at making things. What America did well was growing food and inventing things. The food-growing came from having productive lands and farming methods. The United States ranks No. 65 among countries in terms of arable lands, but produces a disproportionately large portion of all the food consumed on the planet.

The individualism of Americans made possible men like Whitney, Edison, Ford and Gates to create things and processes like interchangeable parts, the light bulb, assembly-line manufacturing and computer operating systems.

But if you needed precision engineering like a camera or machinery, the Germans were the ones to see. Fine wines and other specialty agricultural products could only come from Italy or France. The British created the greatest trading companies and banks in history. The Japanese built the finest factories and manufacturing facilities the world has ever seen.

Using the resources that you have combined with the skills you possess is what a person and a nation does to be successful.

The Philippines can never be a major manufacturing nation capable of being an exporting force. The country does not have the resources, the geography or the cultural mindset.

The Americans were inventors because the culture was attuned to individual effort. The Germans had the intense discipline for precision. The Japanese could work in an ant-colony environment, with incredible cooperation and coordination lacking in most societies. And who better to create robust and sensual wines than Italians, who created the most lavish and extravagant form of entertainment—the opera?

And there is a social cost of being who you are. No one would ever expect a Brit to be the life of the party. How could he? Brits are bankers and accountants and money-counting merchants. Yet their offspring, the Australians, are loud and bold. Of course. They live in a desolate land where you can drive for two days and not see another living soul.

We read often how terrible it is that so many Filipinos work abroad. Separation perhaps diminishes the “Filipinism” of some Filipino families. Yet, perhaps the genetic and cultural quality of the Filipino makes our overseas workers extremely special and able to do jobs that no others can do.

Go to the thousands of schools and hospitals around the world and see the Filipinos in positions of high and important trust. Go to Japan, Hong Kong, Italy, Germany, Britain, the United States and Canada and see the thousands of children and elderly cared for by Filipinos. What other nation and people can claim that kind of respect? None. Mothers from nations around the world leave the nurturing and education of the children to Filipinos, not to anyone else.

With contempt and scorn, some, even here, call the Filipino “little brown Americans.” Yet, there are “little brown Japanese.” And Spaniards, French and Dutch. One time in the dead of winter, in the oil town of Stavanger, I met a “little brown Norwegian” who managed a hotel-restaurant. He was from Malolos. There is a television talk show in Tokyo hosted by Filipinos, all speaking perfect Japanese. A head of one of the world’s largest investment banks is a Filipino. The White House executive chef grew up in Sampaloc, Manila. Stories like these are endless as Filipinos have adapted and prospered in nearly every culture and nation on earth. The Filipino company driver working at the Saudi Telecom has the same “mother” as the ones that makes the newspaper front page. Many migrate away but many more, the vast majority, always come home.

Being truly a citizen of the world is something that the Filipino does better than anyone else. And like every other part of life of every life, this success has a price.

A nation, just like a person, must do what it does well.

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Wednesday, 18 March 2009

PGMA announces more belt-tightening measures


SAN FERNANDO CITY, Pampanga (PND) – Following up her directive for all government agencies to set aside 1.5 percent of their maintenance and other operating expenses (MOOE) for emergency employment, President Gloria Macapagal-Arroyo announced today additional “belt-tightening” measures to soften the impact of the global economic turmoil on the Filipinos.

Among those to be affected by strict cost-cutting measures is the celebration of the country’s 111th Independence Day on June 12.

Interviewed by Fernando “Perry” Pangan, Pampanga Press Club president, assistant vice president and general manager of Pampanga-based radio station DWRW-FM here, the President said the Independence Day program of activities, which cost up to P30 million in previous celebrations, will be dispensed with this year.

“We will do away with the parade and instead we will conduct a mega-jobs fair, combined with a concert,” the President said.

She pointed out that with the mega-jobs fair replacing the parade, new college graduates, displaced overseas Filipino workers (OFWs), out-of-school youths and other job hunters affected by the global economic crisis will have a better crack at employment opportunities.

She added that "very successful Filipino artists" will participate in the concert, which will also include a memorial for Francis Magalona, an artist whom the President said had "written many patriotic songs."

She reiterated her directive for government agencies to save fuel and electricity by using gasoline or diesel fuels “blended” with ethanol. She also renewed her call for electric consumers to use fluorescent instead of incandescent bulbs, saying the shift to fluorescent was paying off in terms of lower electric charges.

“I reminded government agencies this year na dapat ibaba natin ang ating electric consumption by 10 percent at dapat din yung mga nasa siyudad... yung 20 percent ng ating mga sasakyan ay dapat ipalit na sa mga non-fossil fuels using vehicles,” she said.

The President’s directive to local government units (LGUs) to set aside 1.5 percent of their MOOE will generate savings of P7 billion, enough to pay the wages of up to 180,000 workers over a six-month period.

The President likewise announced other belt-tightening measures to support her Comprehensive Livelihood and Emergency Employment Program (CLEEP) such as the restriction on the use of government vehicles.

She reminded government workers that “official vehicles cannot be used for personal purposes, that’s why during weekends such vehicles must stay in the garages of the agency and the guards must keep the keys.”

She added that the use of government security plates should be limited to officials with Cabinet rank “unless the guy or the girl faces an imminent threat to their lives or their safety.

“That would be the only exception, otherwise no personal use of these government vehicles,” she said.

These measures, the President said, would greatly help the CLEEP “especially the 39,000 (mostly from export oriented industries) na nawalan ng trabaho dahil sa global economic crisis.”

Philippine poll machines up for public scrutiny

Florante S. Solmerin
Manila Standard

The Filipino public, including computer hackers, will get a chance to test if the voting machines for use in the 2010 elections are foolproof, according to the Commission on Elections.

The “source code” of software that will run the voting machines will be put up for public review before election day, said Jose Tolentino, manager of the poll automation project.

That’s required under the poll automation law, Tolentino said.

“After the technical evaluation committee has certified that the system works and it’s accurate, then the source code would be open to the public for review and then that source code will be deposited in escrow with the Central Bank of the Philippines,” Tolentino said at the press briefing held at the Comelec main office in Manila.

Tolentino was reacting to observations by former election chief Christian Monsod that the “source code” could still be manipulated.

“In other words, we’re not keeping the source code. Source code is the human readable instructions, so puwedeng tingnan ’yan line by line just to make sure that there is no malicious program inside that system and they would be available for the public for review. So we’re very transparent just to show to the public that we’re not hiding anything,” Tolentino said.

Tolentino also downplayed fears that the software is prone to hacking.

“We’ve always said that by the time a hacker is able to get into our system, the elections have been over and votes tallied. Our system has several layers of security. In fact, in those several layers of security we can immediately detect if there is an attempt to hack the system and we can immediately provide remedial measures,” he explained.

Any hacker, to make a mess of the software, will need a huge capacity computer to be able to gather all the data stored in the software.

Tolentino, meanwhile, said that three days before election day, they will let open for public to view the machines and even to political parties and candidates to allow them to fill up test ballots.

“From those ballots we’ll have a manual tally. After the manual tally, we’ll have to feed the ballots into the machine then we we’ll evaluate.”

The parties and candidates will sign those documents to show and certify that the machine is OK for use on election.

“We’ll close and seal the machine. The next time that the machine will be opened would be on election day. But it will be opened only in the presence of watchers and political parties, candidates and their representatives,” Tolentino said.

Even before they start the counting or the voting, the Bureau of Election Inspector will print out a zero report to show that there is no data previously stored in the counting machine, Tolentino said.

Ortigas to build 75-story building, Philippines' tallest

By Jenniffer B. Austria
Manila Standard

THE Ortigas group is building what would be the country’s tallest structure, the 75-story One Galleon Place in front of the Asian Development Bank in Ortigas Center, Mandaluyong City.

The 300-meter-tall building, which will house offices and a five-star hotel, will overshadow the 52-story PBCom Tower in Makati, a 55-story condominium being built by Anchor Land Holdings Inc. in Binondo, Manila, and the 66-story Federal Land Tower rising up in Taguig City.

The P20-billion project is being launched to commemorate Ortigas & Co.’s 75th anniversary, according to chief operating officer Rex Drillon.

The company is also spending another P20 billion on its first residential development project within a 12-hectare property in Bagumbayan, Quezon City.

Called Circulo Verde, the project involves the construction of 12 residential condominiums targeting middle and upper- income markets. The project is expected to be completed over 15 years.

This year, the company will be launching two residential towers: the 11-story Majorca and the 23-story Ibiza, with one-, two- and three-bedroom units priced at P80,000 a square meter, which is lower than the P85,000 that Megaworld Corp. offers in its projects in Libis, Quezon City.

The company aims to sell at least 200 units this year.

Drilon also disclosed plans to redevelop the 16-hectare Green-hills Shopping Complex into increase the space allotted to its flea markets, to about 400,000 square meters from 100,000 square meters now.

The company is building two floors of underground parking, a residential tower, a serviced hotel and shopping mall.

Ortigas has tapped RTKL to do a master plan for the area.

The entire project is expected to cost P20 billion.

Tourist arrivals in Cebu soar

Manila Bulletin

Despite the global financial crisis that resulted in the shutdown of businesses in various industries, the number of tourists that arrived in Cebu for the month of January alone showed there is no recession in the tourism industry here.

Last January, the number of Chinese travelers surprised tourism officials, posting an increase of 204 percent compared to the figure in the same period of 2008, said Department of Tourism Undersecretary Phineas Alburo.

“We were surprised at the figures because of the very significant increase,” said Alburo, although he was not able to provide the exact number of visitors for the month of January.

Russian visitors, who stay on an average of 12 days in Cebu, also increased by 133 percent, while visitors from the new market, India, soared by 108 percent in the first month of the year, despite the fact that the country does not have direct flights to and from India.

The figures are based on the records of the Bureau of Immigration regarding the number of tourists who landed at the Mactan-Cebu International Airport, said Alburo. Overall, he said tourist arrivals in Cebu tallied five percent growth.

“The industry has not been affected that much. The tourism industry in Cebu continues to be vibrant, and tourism-related businesses continue to hire people,” said the Cebuano undersecretary.

As this developed, Alburo said a direct Manila–New Delhi flight will open up by August to capitalize on the growing Indian market. The flights could be accelerated depending on the response of the market, he said.

Based on records, Indian tourists are the biggest spenders in Singapore, shelling out money for shopping and nightlife. These offerings are available in the Philippines, said Alburo, and with the direct flight to New Delhi, the number of Indian tourists is sure to increase.

Alburo also said that the DoT is in talks with other concerned officials to make the country more accessible to the Middle East market, which is now considered a big market for tourism.

Philippines seeks world-class meteorological status

Manila Bulletin

The Philippines is working on a world-class meteorological agency (WCMA) status as part of mitigating any adverse effects associated with climate change such as sea rise or temperature rise.

The WCMA status involves the upgrading of obsolete equipment that predict weather and the training of more climate experts in order to promote their skills to international standards.

This involves rehabilitation of existing Doppler radars, which produces velocity information, and the acquisition of new ones.

The country’s capacity to capture images of weather factors through satellite imagery should also be enhanced.

The country already has Doppler radars in Baguio, Baler, Hinatuan in Surigao, Virac in Ilocos, Guian in Samar, Aparri-Cagayan, Subic, Daet in Camarines Sur, and Tagaytay.

But a few more of these radars have to be constructed to further improve accuracy of weather predictions.

The country’s target is to achieve a WCMA status by 2013.

“We had the instruction from President Arroyo to upgrade our status to world class level. We need it because of our vulnerability to climate change due to our arhipelagic nature,” said DoST Secretary Estrella Alabastro in an interview.

Tuesday, 17 March 2009

Consumer Confidence Up in the Philippines

Media Releases
Bangko Sentral

Nationwide consumer confidence higher

Despite continuing concerns over recessionary conditions in the global economy, consumer confidence of Filipino households improved significantly quarter-on-quarter and year-on-year in Q1 2009, even as the number of respondents with a pessimistic outlook continued to be larger than the number of respondents with a favorable outlook. The overall consumer confidence index (CI) in Q1 2009 at -25.7 percent was higher by 14.6 index points relative to Q4 2008 and by 6.4 index points year-on-year. Improved consumer confidence was partly due to lower prices of oil and other food items, and positive news that the unfolding global financial crisis will not hit the Philippines as hard as other more advanced economies.

The optimists attributed their positive outlook to expected improvement in household finances, lower personal debts, and employment of more household members. Meanwhile, pessimists were concerned about low income, higher costs of agricultural inputs and increase in household expenses.

The next quarter outlook at -6.2 percent also improved relative to the previous quarter. However, it was lower by 2.8 index points relative to Q1 2008.

Respondents also expected that conditions would improve over the next 12 months as the index increased to -2.3 percent from -10.7 percent in Q4 2008. However, the index was lower by 8.9 index points compared to 12-month ahead outlook during the Q1 2008 survey.

Consumer confidence across all income groups up

Consumer confidence across all income groups similarly improved. Respondents from the highest income group were the most confident. Specifically, respondents from the high and middle income groups were optimistic that family income would increase in Q1 2009 with CIs of 11.0 percent and 6.7 percent, respectively. In the case of the low income group, while the index remained negative at -19.3 percent, it improved by 7.5 index points quarter-on-quarter and by 4.0 index points year-on-year.

Expenditures for next 3 months to rise

Survey results indicated that more households nationwide expected that their average expenditures on basic goods and services would go up in Q2 2009 with a CI of 40.7 percent. However, there were fewer respondents who said that their expenditures would rise compared to the previous quarter’s survey as indicated by the 4.3 percent decline in the index quarter-on-quarter. This may be partly explained by the deceleration in inflation rates and the observed tendency of consumers to cut back spending in Q1 to save for the coming school enrollment period in Q2.

Buying conditions improve in Q1 2009

The proportion of respondents who considered Q1 2009 as a favorable time to buy reached 17.5 percent, a slight increase from 15.0 percent a quarter-ago, but lower than the year-ago level at 20.4 percent. Buying conditions for a house and/or lot were highest at 24.8 percent, up by 2.8 percentage points from Q4 2008. There were also more respondents who considered Q1 2009 as a good time to buy consumer durables (16.5 percent from 14.0 percent in Q4 2008) and motor vehicles (11.3 percent from 9.1 percent in Q4 2008).

Among the reasons cited by respondents on the favorable buying conditions on big-ticket items in Q1 2009 were: 1) affordability, 2) good investment options, and 3) for the convenience of family members.

Buying intentions for the year ahead positive

Despite the positive outlook for Q1 2009, the proportion of respondents that indicated their intentions to buy big-ticket items (namely, consumer durables, motor vehicles, and house and lot) in the next 12 months remained relatively steady at 7.5 percent. About 10 in every 100 respondents indicated intention to buy consumer durables, 8 in every 100 indicated intention to buy a house and lot, and 5 in every 100 indicated intention to buy motor vehicles in the next 12 months.

Selected Economic Indicators: Outlook for the next 12 months

Consumers anticipated that the peso would continue to depreciate against the US dollar in the year ahead as the CI on the exchange rate in Q1 2009 survey registered a negative index at -10.8 percent. The unemployment rate and interest rates were expected to rise with CIs at 72.4 percent and 45.4 percent, respectively. Moreover, more consumers than otherwise expected that the prices of basic goods and services would go up in the next 12 months with CI of 46.2 percent. However, of those expecting upward price pressures, their inflation expectations have moderated. Except for the unemployment rate index, all the indices showed that the number of respondents which expected weaker indicators in the next 12 months declined.

Expenditures of Overseas Filipino Workers for Q1 2009

Based on survey responses, one out of ten households has at least one OFW as family member. In Q1 2009, most OFW households spent their remittances primarily on food and other household needs (94.7 percent of households who received remittances), education (69.8 percent), medical expenses (55.2 percent), and debt payments (48.5 percent). The percentage of households that allotted portions of remittances to savings increased to 40.0 percent (from 35.8 percent in Q4 2008). Those that utilized remittances for investments increased to 5.9 percent in Q1 2009 (from 4.7 percent in Q4 2008), while 11.2 percent of OFW households used remittances for purchasing houses. The utilization pattern of remittances was similar for both NCR and AONCR households.

About the survey

The Bangko Sentral ng Pilipinas started conducting the Consumer Expectations Survey (CES) in the National Capital Region in Q3 2004. The CES became a nationwide survey starting Q1 2007. For Q1 2009, the CES was conducted during the period 12-23 January 2009 with a total sample size of 5,487 households, of which 2,724 (49.6 percent) were from NCR and 2,763 (50.4 percent) from AONCR. The CES samples were drawn from the National Statistics Office’s (NSO) Master Sample List of Households, which is considered a representative sample of households nationwide. The said master sample was generated using a stratified multi-stage probability sampling scheme. The nationwide total survey response rate for Q1 2009 was 96.4 percent (broadly similar to 96.6 percent in the last survey).

For inquiries, please contact the Department of Economic Statistics

Philippine January 2009 Remittances Reach US$1.3 Billion

Media Releases
Bangko Sentral

Remittances from overseas Filipinos (OFs) coursed through banks managed to post a 0.1 percent growth in January 2009 despite the challenging external environment,” BSP Governor Amando M. Tetangco, Jr. reported. Remittances during the month remained above a billion-dollar mark at US$1.3 billion. It was noted that the increase in remittances from sea-based workers counterbalanced the contraction in remittances from land-based workers, mainly from the US. The January growth, however, was lower compared to the 15.0 percent growth a year-ago.

The slowdown in deployment beginning November 2008 (and the subsequent contraction in December by 5.8 percent), and the reported displacement of some land-based Filipino workers (OFWs) in some countries due to the global economic downturn contributed to the very modest increase in remittances in January.

While there are mounting concerns about the effects of the recessionary conditions in the global economy on the continued employment of Filipino workers abroad, latest data on overseas deployment for January 2009 provided some optimism for stability if not a pick-up in remittances next month. Preliminary data obtained from the Philippine Overseas Employment Administration (POEA) showed that the total number of deployed overseas workers in January 2009 grew year-on-year by 25.3 percent to 165,737 from 132,285 a year-ago. The double-digit growth in the number of deployed OFWs is expected to add to the base of potential remitters moving forward.

Also providing support for the sustained deployment of OFWs is the POEA’s report on employment opportunities in some host countries which have forged hiring agreements with the Philippines such as Canada, Australia, Japan and in selected Middle-East countries like Qatar, specifically in healthcare, education, power/energy, and real estate sectors.

Meanwhile, in line with national efforts on jobs facilitation and preservation, the Department of Labor and Employment (DOLE) has sent labor teams in crisis-affected host countries like South Korea, Taiwan and the United Arab Emirates (Dubai) to help displaced Filipino migrant workers find alternative jobs within the same country or in the region of employment. The labor teams also aim to tap other work opportunities for displaced workers by profiling their skills for possible job matching and referral to other companies in the host countries.

For January 2009, the major sources of remittances were the U.S., Saudi Arabia, Canada, Singapore, Japan, U.K., Italy, and United Arab Emirates.

Philippines' February BOP surplus at $469

MANILA, March 16 (Reuters) - The Philippines recorded a balance of payments surplus of $469 million in February after a surplus of $1.735 billion in January, the central bank said on Monday.

The central bank has predicted a BOP surplus of $700 million in this year. The cumulative surplus in the first two months of the year has reached $2.204 billion.

The overall BOP surplus in 2008 fell to a four-year low of $89 million after a record $8.58 billion in 2007.

(Reporting by Karen Lema)

San Miguel Sets Philippine Record With $800 Million Bond Sale

By Cecilia Yap and Clarissa Batino

March 16 (Bloomberg) -- San Miguel Brewery Inc., the Philippines’ biggest beermaker, raised 38.8 billion pesos ($800 million) in a record bond sale by a non-government borrower, four people with knowledge of the matter said.

The Manila-based company priced three-year 8.25 percent notes, five-year 8.875 percent notes and 10-year 10.5 percent bonds to pay about 250 basis points more than similar maturity government debt, said the people, who declined to be identified before an official announcement.

“We thought it would be 25 to 50 basis points higher,” said Rafael Algarra, treasurer at Security Banking Corp. in Manila. “That means the market is actually more inclined on this issue than we thought.”

Debt-free San Miguel Brewery last month said its board approved borrowing as much as 38.8 billion pesos in local currency or dollars to help the company buy land and beer brands from parent San Miguel Corp., which has said it expects to complete the asset sales by April. The brewer, whose profit last year jumped 25 percent to 10 billion pesos, will be buying brands that control 95 percent of the Philippines’ beer market.

Benchmark three-year bonds traded at 5.72 percent today, while five-year debt yielded 6.322 percent and 10-year securities yielded 8.054 percent, according to Philippine Dealing & Exchange Corp.

San Miguel Brewery will pay an extra 250 basis points to 325 basis points over secondary market rates, according to “unofficial pricing guidance” relayed by underwriters to potential investors, the company said on March 3. A basis point is 0.01 percentage point.

Dollar Bonds

President Ramon Ang on March 4 said San Miguel Brewery won’t need to borrow in dollars if the peso sale is subscribed in full. He hasn’t replied to messages from Bloomberg News today seeking comment.

The brewer hired Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Royal Bank of Scotland Group Plc and UBS AG to help it sell about $500 million in bonds, people familiar with the situation said last month.

Banco de Oro Unibank Inc. held the record for a Philippine non-government borrower from its sales of 10 billion pesos in bonds in November 2007 and May 2008, according to data compiled by Bloomberg.

To contact the reporters on this story: Cecilia Yap in Manila at To contact the reporter on this story: Clarissa Batino in Manila at

PGMA releases P125M in housing support to disabled soldiers, families of soldiers killed in action


FORT DEL PILAR, Baguio City (PND) – President Gloria Macapagal-Arroyo announced today the release of P125 million in housing assistance to “disabled soldiers and the families of soldiers killed in action.”

The more than 1,000 beneficiaries of the housing assistance program will receive P180,000 each.

The President made the announcement in her speech keynoting the 104th Commencement Exercises of the Philippine Military Academy (PMA) here.

“Yesterday, I instructed the release from the President’s Social Fund (PSF) of more than P125 million, the biggest release I have ever had from the President’s Social Fund,” she said.

The President pointed out, however, that while her administration will not waver in its commitment to help disabled soldiers and families of soldiers killed in action, the global economic crisis highlights the need for government to “tighten its belt and live within its means.”

“But even as we help provide homes to the families of the disabled and the slain in these challenging economic times, the government must tighten its belt and live within its means just like the average Filipino household,” she said.

The President listed down several measures the government is undertaking to ensure that resources are spent wisely, among them, her directive to all government agencies, including the Department of National Defense (DND), the Armed Forces of the Philippines (AFP) and the PMA to set aside 1.5 percent of their maintenance and other operating expenses (MOOE).

The President has directed all government agencies to reserve 1.5 percent of their MOOE to fund an emergency employment program. The presidential directive is expected to raise P7 billion, enough to pay the wages of at least 150,000 workers over a six-month period.

The President’s order last year for government offices “to start electricity and fuel-saving measures” was paying off by substantially lowering energy consumption.

She said that the savings and revenue generated by the belt-tightening measures will be used to provide, among others, “emergency employment” to Filipino workers during a six-month period.

As an example, the President cited Defense Secretary Gilbert Teodoro Jr. who, as “Emergency Employment Champion for Region 12 (Central Mindanao), will undertake job generation programs for “towns in that region that belong to the 100 poorest towns in the country.”

She also said that the government has stepped up its job matching program "to make information about job vacancies available to more people simultaneously with accelerated skills training program" through the Technical Education and Skills Development Authority (TESDA).

Aside from the Emergency Employment Program, the President said that the savings from the MOOE would be used to feed schoolchildren.

"So from your savings, the savings from the military camps, I ask them, including PMA to spend part of the savings for providing breakfast for day-care, pre-school or grade 1 children in the schools nearest or within the camp," the President said.

"We must tackle many challenges at once to keep our economy and way of life going strong. On the part of government, we must live within our means and run a lean efficient government, including the DND, the AFP, the PMA and the units that you, our young graduates will soon be commanding," she said.

Philippine President inaugurates new international airport in north

PGMA inaugurates San Fernando City, La Union airport

SAN FERNANDO CITY, La Union (PND) – President Gloria Macapagal-Arroyo inaugurated this afternoon the newly completed San Fernando City Airport (SFCA) and pledged to be the first passenger to contract a chartered international flight out of the SFCA next month.

The President announced her intentions during a briefing and tour of the SFCA’s facilities conducted by Poro Point Management Corporation (PPMC) director Mary Jane Ortega.

The President is set to attend the Association of Southeast Asian Nations (ASEAN) meeting with its dialogue partners China, Japan and Korea (more commonly known as ASEAN+3) from April 10 to 12 in Thailand and decided to use the SFCA as the jump off point for her trip to push for the province's tourism viability.

“I will fly out on Good Friday,” the President said visibly pleased that her “pet project” for the people of La Union was finally completed.

Transportation and Communications Secretary Leandro Mendoza, who accompanied the President for the inauguration said the President was very happy that the SFCA was finally operational because it will further boost the business, agricultural and tourism capability and viability of the province.

“Magandang development ito because access to and from the gateway to Northern Luzon particularly Baguio City, the Sacada area, the other parts of northern Luzon and to the province of La Union also is further boosted and will thus provide tourists, residents and businessmen greater ease to get here,” Mendoza said.

“At the same time, gateway ito for the other Asian-Pacific countries who want to use the SFCA as their entry point because this airport can accept international flights,” he added.

La Union Governor Manuel Ortega meanwhile said he was in state of “euphoria” over the President's visit to personally inaugurate the SFCA because “this is a red-letter day” and is a “milestone as far as the province of La Union is concerned.”

Built at a cost of P477,934,752.35, SFCA’s facilities can now accommodate Boeing 737 and Airbus 320 aircraft. International flights carrying tourists and businessmen from Hong Kong and such countries as China, Taiwan, Japan, Thailand, Malaysia, Singapore, Indonesia, Vietnam and Korea can fly in and out of the SFCA.

Construction began in May 2007 and was completed on February 1, 2009.

People are capital, not cost

Bong Austero
Manila Standard

We all know we’re right smack in the middle of a global crisis because everyone has been making references to it nonstop—it’s practically coming out of people’s ears. Of course we’ve also become aware of the crisis because contrary to what some so-called experts so brazenly claim, we’re not deaf and blind. And we’re definitely not stupid.

The effects of the crisis are quite obvious.

I still have to watch a newscast, read a newspaper or magazine, listen to a radio talk show, or even sit through a briefing or lecture without someone making a reference to the global crisis and use it as some kind of a justification for all kinds of arguments and decisions—many of them horrendously unwarranted. Obviously, many of the messages being put out there are not even empowering or inspiring.

And horror of all horrors, there is now a cottage industry of business organizations and individuals cashing in on the crisis, under the guise of providing expert advice on how to survive it. I am talking about countless fora, symposia, seminars, workshops, conferences, lectures, and all other modern-day variations of the Delphi oracle being organized for the sole purpose of providing us information—most of which we already know, and advice— most of which we’ve already been practicing.

I’ve sat through many of these—as invited reactor, as facilitator, and as participant. I tell you, many of these sessions are pure unadulterated balderdash. I am not generalizing of course—some do offer valuable insights and practical tips. But most are just plain money making ventures. They invite so-called experts who, more often than not, turn out to be American management consultants. They trundle out statistics culled from the Internet, bring out the equivalent of fortune-telling crystal balls, and then begin spewing what they think are expert analysis and counsel.

In a number of occasions, I actually wished we Filipinos weren’t so polite and courteous so that we could give these experts the tongue-lashing that they so deserve. For example,

I sat at a forum recently where an American management consultant went on and on about his theories about what caused the global crisis and what countries could have done differently. I wanted to stand up and point out to him certain facts that he was glossing over. One, the global crisis was sparked by unabated greed, yes; but which country championed it? And if he and his contemporaries were really such great experts, why didn’t they predict and head off the debacle to begin with?

A colleague of mine recently told me a horrendous story that wasn’t really unusual—like I said, it seems to be the norm today—but which floored me because it happened at a forum organized by the Bankers Association of the Philippines and attended by the shakers and movers of the local banking industry.

In that particular forum, one foreign consultant offered what he thought was a brilliant deduction: The reason why the Philippine banking industry has been spared so far from a meltdown is because—hold your breath—Philippine banks are still behind in terms of global banking trends and technologies and Philippine bankers are not quite there yet in terms of technical expertise to understand the complexities of the hybrid financial schemes and products. What utter nonsense, what arrogance! I was surprised he was able to get out of that forum alive.

The foreign experts we can ignore and snicker at. But what do we do with people in the country—Filipinos—who have gotten into the act and started preaching messages of doom? I was at another forum Wednesday last week supposedly organized to discuss how to manage human capital in a downturn environment. I went to the forum expecting to hear about creative approaches in human capital management in these difficult times.

The very concept of human capital is built on a sacred assumption—that people are capital, not cost. Therefore, I expected to hear about what could be done or what others are doing to save people, or to use a cliché, how to cut costs to save people rather than cut people to save costs.

As expected, the initial prognosis was not good as statistics that outlined the breadth and scope of the global crisis was presented. But eventually, the global consultant (British, I think) showed statistics that indicated everything is not lost and that in fact, for countries like the Philippines, there are valid indicators to be optimistic and hopeful. He then went on to talk about what other countries have been doing to manage human capital issues.

Most of the thesis centered on creative approaches to managing executive compensation (yeah, it seems this is the major challenge since people on top of the hierarchy corner a huge percentage of the overhead).

What unsettled me though was the general drift of the discussion after the talk. One after another, Filipino managers began asking about and discussing better ways to say no to labor unions asking for increases, laying off people, declaring redundancies, etc. In short, they were on full crisis mode and seemingly raring to cut heads. I am aware that certain companies are really left with no other choice but to reduce headcount. But let’s get this straight: Not everyone is in that same dire situation.

I looked at the profile of the participants and noted that most of them belonged to companies that are generally insulated from the crisis so far such as outsourcing, banking, academe, consumer products, pharmaceuticals, etc. These industries are not badly hit and don’t really have to resort to drastic measures, and yet it seems they have already been converted into the ranks of the prophets of doom. It can be argued that many among us are just being proactive and are practicing strategic thinking. But there is a huge difference between being prepared and having a defeatist attitude. I am afraid that many among us are needlessly overreacting and making drastic decisions such as reducing people without considering the long-term cost to the business of these wrong decisions.

It is really sad that it is very easy for foreign companies to come into the country, set up business here, enjoy a windfall, and then when the going gets tough, pack up and leave—with the promise that just like Douglas MacArthur, they will return. When conditions are better, of course. On the other hand, local companies because of our complex value system, which prescribe malasakit, pananagutan, pakikiramay, pakikipag-kapwa, etc, are supposed to have a difficult time at it.

But it seems not anymore. It is tempting to heap the blame on foreign influences to explain the seeming shift in the way we are dealing with people issues as a result of the crisis. But that’s not really the case. It’s really the absence of a strong anchor—or core—that makes us prone to perpetuating the very same things that cause the global crisis to begin with: Unabated greed, lack of concern for others, not valuing people and relationships. In the end, it is people who will enable companies to weather the crisis - it is people that will bring in the revenues, fix the problems, plug the gaps, etc. Making people the first casualty of a crisis just does not make for good business sense.

Philippine Government to nationalize Edsa MRT line

By Eileen Mencias
Manila Standard

REVERSING its privatization policy, the government is taking majority control of Metro Rail Transit Corp. to give itself leeway in expanding the passenger capacity of the Metro Rail Transit 3 on Edsa, an official said yesterday.

“We’re trying to complete our purchase of majority of the shares, hopefully in the next few days or maybe in one week or two weeks,” Finance Secretary Margarito Teves said.

The takeover is to be done through state-owned LandBank and Development Bank of the Philippines, which would buy the shares of private stockholders, Teves said at the sidelines of the Chamber of Thrift Banks’ convention.

“This will only be temporary because eventually we’ll dispose of the shares,” Teves said.

“We don’t want to be involved in the business, and we will go back to privatizing it again.”

The government started buying the shares in the MRTC late last year following a deal signed in August 2007 between the Transportation and Finance Departments and the private consortium led by the Fil-Estate group. The deal called for a government buyout of the consortium’s build-lease-transfer contract for the rail transit system.

At the time, it was estimated that government would be paying $865 million for the remainder of the contract while realizing savings of up to $380 million, according to sources.

The government had initially planned to buy the MRT shares through the National Development Co., but the latter raised concerns on the impact of that purchase on its profits.

Teves said LandBank and Development Bank had been able to buy the MRT shares at a price lower than what the government had initially envisioned.

“The figures are different now. I think DBP and LandBank were able to purchase the shares lower than originally envisioned,” Teves said.

“As you know, it was not a complete process because there were kinks... but the direction is the same: to have control to enable us to expand.”

MRTC is majority owned by a holding company, MRT Holdings Inc., a consortium that originally consisted of Ayala Land Inc., Anglo Philippines Holding Corp., Fil-Estate Management Inc., Ramcar Inc., and Greenfield Development Corp.

Over the years, some of the original shareholders divested from the holding firm and sold their shares to fund managers.

The MRT 3 line is a 16.9-kilometer system running from North Triangle in Quezon City to Taft Avenue in Pasay City.

The government guaranteed MRT a return on equity of 15 percent a year to get the railway project started, which was a relatively high return when compared to those in other industries.

Sources said the government initially considered refinancing the loans to cut interest costs, but buying out the shares of MRTC appeared to be more feasible.

The government needed to expand the capacity of MRT 3 given the huge volume of passengers it was now servicing, said the same sources who refused to be identified because they are not authorized to talk about the subject.

At its peak during the Christmas holidays, MRT 3 was ferrying 27,000 passengers per hour in one direction.

But expanding the line’s capacity faces obstacles because there are many covenants in the build-lease-transfer agreement between the original shareholders and the group of hedge funds they had sold out to.

The refinancing of the MRT 3 debt was also hounded by tax issues that had to be resolved between the Transportation and Finance Departments.

Monday, 16 March 2009

Philippine airport's terminal 3 capacity upped to 32M passengers a year

Manila (10 March) -- With the opening of Ninoy Aquino International Airport (NAIA) Terminal 3 to commercial operations, the country's main gateway increased its terminal capacity to 32 million passengers a year, the Manila International Airport Authority (MIAA) said.

According to MIAA General Manager Alfonso Cusi, they are committed to become a globally competitive organization for providing airport facilities and services consistent with international standards, expressed continuing progress and milestones gained in 2008.

"The newly opened terminal is now operational, catering to domestic flights to most local destinations and international flights to Asian countries," he said.

Cusi added the agency has also plans for terminal expansion focusing on capacity building efforts to better handle the increasing passenger traffic and is projected for the next five to 10 years.

"We believe that the increase in passenger traffic is due to the aggressive marketing and promotional ad efforts of domestic airlines and also to the opening of NAIA terminal 3, as we are able to accommodate more passengers because of the added space the new facility provides," Cusi said.

Aside from the opening of NAIA 3, the MIAA has also embarked on modest but useful improvements aimed at maintaining the prestige of NAIA being the main gateway of the country.

Cusi said the improvements of terminal 1 Arrival Lobby and other renovations to give it more updated look and make it more functional to address the changing operational needs of the gateway.

"Despite limited space for expansion, it has been steadily improved as a facility that is both friendly and useful to its passengers and stakeholders well. This is obviously a provided concern for the NAIA in its continuing effort to be at par with other international airports worldwide," Cusi explained.

To further manifest, MIAA serious efforts to make the NAIA terminals safe, as metered taxis were introduced form passenger's safety and convenience and also free shuttle services from and to all three NAIA terminals have also been put into place.

A new security equipment have also been acquired, and other facility upgrades been made and more judicious housekeeping is being practiced.

"I am delighted to receive some positive feedback lately from passengers and users of NAIA who have noticed our humble accomplishments and some improvements. We are joining heads as we are aggressively pursue improvements not only in terms of terminal maintenance but also enhancements in key areas such as passenger safety, security and convenience through it's new service branding dubbed as the "smiling airport," Cusi added.

Moreover, the MIAA is also extending its assistance in the upgrading and construction of Caticlan Airport.

"We promise to share decades of expertise of the MIAA/NAIA personnel in international and domestic airport management and we can only be too glad and willing to extend help for the building of the Panglao and Caticlan airports," he said.

Cusi added it also boosts passenger traffic within the country which is pursuant to objectives and thrust of the national leadership and will be good for the tourism sectors. (PNA)

Metro Pacific looking into Philippine airport project

Metro Pacific to extend NLEx to La Union
Tonette Orejas
Philippine Daily Inquirer

ANGELES CITY—The Metro Pacific Investment Corp. (MPIC) is considering investing in projects on the extension of the North Luzon Expressway up to Rosario, La Union, and the Terminal 2 of the Diosdado Macapagal International Airport (DMIA) at Clark Freeport.

President Gloria Macapagal-Arroyo will lead the groundbreaking rites for the NLEx expansion on April 8, said Manuel V. Pangilinan, MPIC chair, in an interview after the Holy Angel University here conferred on him an honorary doctorate degree in humanities and a medal of honor on Friday.

The expansion plan, with a tentative investment of P15 billion, is within the time frame set, he said.

It came four months after the MPIC bought the First Philippine Infrastructure Inc. that gave the MPIC a 67.1-percent stake in the Manila North Tollways Corp., NLEx franchise holder, and 46 percent equity in the Tollways Management Corp.

The acquisition was “doing very well and already complete,” said Pangilinan.

The MPIC is also considering venturing into the Terminal 2 project at the DMIA that is being pushed by the government-owned Clark International Airport Corp. (CIAC), he added.

The CIAC has set the minimum investment at P4 billion. The proposed facility intends to serve three million passengers yearly.

“We’re also looking at the airport. We have not decided yet. Of course, I want to see if it’s okay. I hope we could do it,” Pangilinan said in Filipino.

He said he made a site visit to the DMIA in February. The government developed the DMIA from the aviation complex left by the United States military when it pulled out of Clark in 1991. The 2,500-hectare airport is fitted with two 3-km runways.

The CIAC board has allowed its joint venture selection committee to accept unsolicited proposals for the Terminal 2 project and reduced the requirements after the first bidding failed in 2008.

In the joint venture scheme, the CIAC and the proponent will take a 30-percent and 70-percent ownership share, respectively. The proponent will build, design, finance, equip and operate the Terminal 2.

Philippines' Zest Airways to acquire 7 new aircraft

Manila Bulletin

Zest Airways Inc., formerly Asian Spirit, is investing $150 million this year for the acquisition of five brand new aircraft to beef up its existing seven aircraft as the company adds new local destinations and regional routes.

Donald Dee, Zest Air chairman, said the new fleet acquisition would include two airbuses worth $100 million and three turbo jets to complete its refleeting program.

This means that Zest Air would have a total of 11 aircraft flying to tourist destination areas.

Last year the company spent $170 million for capital expenditure, Dee said.

Dee said the airbuses would be serving both existing and new destinations. At present, Zest Air

flies from Manila to Virac in Catanduanes, Busuanga, San Jose (Mindoro), Marinduque, Cebu, Calbayog, Catarman and Caticlan.

Today, March 16, Zest Air will add Puerto Princesa, Naga, Legaspi, Iloilo, Kalibo, Tacloban, Bacolod and Tagbilaran.

Within the year, the company is also expected to launch its regional routes that may include Hong Kong, Macau, Beijing, Xiamen, Kota Kinabalu, Kuala Lumpur, Singapore and Japan.

"We have a good fighting chance, we are competing head-on with the big two market players for Caticlan and Cebu," Dee said but refused to reveal its passenger load factor except to say that they a poor third for now.

The Zest-O Group of Companies, which is owned by businessman Alfredo Yao, acquired Zest Air, formerly Asian Spirit, in the second quarter last year but only took over operations in July of same year.

Yao also has a pending acquisition bid for another small airline Sea Air, which caters to specific tourist destinations in the country. Negotiations, however, have been on an on-and-off basis.

Dee noted that the negotiations have dragged too long but refused to say if the Zest-O Group has already shelved the acquisition bid.

Zest Airways, which is still using the old domestic terminal, is also prepared to transfer to the NAIA 3 before end of this year.

Earlier, Yao said that his entry into the airline business was in anticipation of the country’s booming tourism industry.

He said the country’s tourism industry was not affected by the global economic meltdown saying that it would be cheaper for tourists from neighboring countries such as China, Korea and Japan to go to the Philippines instead of the U.S. and Europe.

"Why not look at the good side, our country is a tourist destination, it has beaches and golf courses that are more attractive than Thailand’s," Yao said.

Yao also pointed out that the Philippines is a lot closer to Japan and Korea than Thailand.

Sunday, 15 March 2009

Philippine upbeat call centers, other BPOs shrug off meltdown

By Paul M. Icamina, Special Reports Editor
Manila Times

AMID worldwide gloom and doom, local call centers are upbeat this year and for the following years when they expect to corner 10 percent of the $130-billion global market by 2010.

They and the whole business process outsourcing (BPO) industry has defied gravity as a major source of foreign exchange even as incomes from product exports and remittances from Filipinos working abroad are rolling downhill.

The BPO industry has an impressive record rarely seen hereabouts: the remarkable +30-percent average annual export revenue growth in the last two years.

The Commission on Information and Communication Technology sees a 20-percent to 25-percent industry growth this time, down from the 35 percent last year.

That is still an impressive figure of 90,000 new jobs, but modest compared to 372,000 slots last year when revenues peaked to $6 billion (P291 billion in today’s pesos).

The BPO industry has ballooned beyond call centers, although voice calls still dominate most work stations. More BPO jobs are now in animation, graphics, publishing, game and software development, legal aid, finance and accounting, architectural and engineering designs, business research analysis, medical transcription—the list goes on.

The high-brow tasks ease concerns that call centers are luring the country’s best and brightest away. “We want to tell concerned parents that their graduates are not just telephone operators,” says Gigi Virata, executive director for information and research of the industry group Business Processing Association/Philippines (BPA/P).

“The investors keep coming,” says BPA/P’s Executive Director for Industry Affairs Jonathan de Lu-zuriaga. “We meet at least one prospective locator a week more often than not.”

“Companies abroad have only two choices these days—outsource or surrender and close shop,” he says, pointing out the financial meltdown has made the Philippines even more attractive because it allows foreign companies to tighten their belts without sacrificing their service.

Read: It is much cheaper for foreign companies to outsource Filipino labor than hire workers at home.

The Philippines ties with India as the lowest labor-cost provider, roughly12 percent of the cost of equivalent jobs in the United States.

Huge, talented labor pool

The Philippine labor pool is huge and talented: Half a million new college graduates a year, half of them with degrees in business, engineering or IT.

Then there are the tax holidays and other economic incentives. And low rentals, one-fourth the cost in Mumbai and lower than in Hanoi and Shanghai.

What wraps up the deals are familiar sights of McDonald’s, Kentucky Fried Chicken, Starbucks and Krispy Kreme along most busy call center areas. With a diet like that, how can investors go wrong?

Last year, more than 10 foreign companies set up shop here.

More than 600 companies are currently in the BPO industry, half of them in support industries like telcos, training and recruitment houses, real estate companies, software and hardware vendors and system integrators.

By the end of 2008, the BPO industry employed over 370,000. The target for 2010 is to have 800,000 full-time employees.

In the next three to four years, projections are such that one out of 10 jobs created will be in the BPO industry.

“The Philippines became attractive to major players because of our English-speaking capability, our affinity to the US, and similarities in terms of jurisprudence and general acceptable accounting practices,” says de Luzuriaga.

The global economic crisis has forced companies abroad to turn to low-cost sources such as the Philippines. The latest BPA/P survey released last week shows an industry forecast of a 10-percent to 15-percent growth in employment this year. This is lower than the government’s 20-percent to 25-percent forecast.

Business confidence is at an all time high: 95 percent of BPO executives and human resource managers surveyed expect to increase their workforce in 2009.

Double-digit growth

Half of them expect their workforce to increase by over 15 percent. Those employing from 1,000 to 15,000 employees expect an average increase from a low of 6 percent to a high of 10 percent. Mid-sized companies of 5,000 to 10,000 employees expect an even higher spike of up to 15 percent this year.

Asked if these are electronic sweatshops, Virata remarks: “it must be the most comfortable of sweat shops,” pointing to amenities such as in-house spas, gyms and even media lounges for the lucky ones.

The smokers, of course, aren’t allowed and they congregate on the building steps, outdoor cafes, sidewalks and street corners. Buildings with a lot of young people smoking outside 24/7 are sure to be call centers.

They are lighted even at night and attract fast-food chains that cater to the young, single, hip and moneyed crowd. The day and night activity virtually eliminates the crime risks in what used to be dark streets.

At night, all floor spaces are alight and connected to clients where it is day. Call centers demand very high connectivity that requires sophisticated infrastructures. The connectivity has spilled over to the masses, bringing down to about half the cost of household broadband connection to the Internet.