Kristine Jane R. Liu
Homegrown fastfood giant Jollibee Foods Corp. has set aside a higher budget this year and will continue to open new branches despite a global economic downturn that has forced companies to adopt a wait-and-see stance.
At the sidelines of the company’s stockholders’ meeting on Friday, Jollibee Foods Chairman Tony Tan Caktiong said the fastfood chain would spend around P4 billion this year, up from last year’s P2.9 billion. A total of 186 new stores would be opened by the end of the year, the same number as last year’s.
"The fastfood business does quite well even in difficult times. Our best-case scenario is sustaining our first quarter growth for the rest of the year," Mr. Tan Caktiong said, adding however that Jollibee Foods would continue to monitor economic developments in the second half, especially the growth of overseas Filipino remittances.
Profits went up by 17% to P562 million from January to March, while revenues rose by 13.5% to P11.3 billion. Jollibee has already opened 37 new stores.
"We will continue to expand to countries that have a high overseas Filipino population," Mr. Tan Caktiong said, adding that Jollibee and Chowking stores would soon be opened in Qatar, Jollibee Food’s third Middle East market after the United Arab Emirates and Saudi Arabia.
Of the 186 new stores this year, 110 will be opened in the country while the rest will be overseas.
"The potential in other countries is still high. The fastfood business is just a population game," he said.
Jollibee Foods now has 651 branches nationwide and 49 overseas, and aims to have 4,000 stores all over the world by 2020.
Aside from the Jollibee brand, the fastfood giant also owns the Chowking Chinese fastfood chain, Red Ribbon bakeshop, Greenwich Pizza, the local Delifrance franchise, and the lower-end Manong Pepe’s restaurant.
The company has acquired a number of foreign restaurants in the past five years — Taiwanese noodle house Lao Dong, Beijing’s congee restaurant Hong Zhuang Yuan, Chinese fastfood chain Yonghe King, and the Chun Shui Tang tea house.
Last year, the company entered into a joint venture deal with US-based Chow Fun Holdings, LLC, giving Jollibee Foods a 12% stake in the US-based Asian restaurant for $950,000. Shares in the company rose by 4.25% or P2 to close at P49 per share on Friday.
Saturday, 27 June 2009
Kristine Jane R. Liu
RECESSION? COMPANY EXPECTS A RECORD YEAR
Gokongwei-led JG Summit Holdings, Inc. projects revenues and cash flow to climb between 15% and 30% in 2009 due to the steady growth of its four core businesses.
After the company’s stockholders’ meeting Friday, JG Summit President and Chief Operating Officer Lance Y. Gokongwei told reporters that without mark-to market losses, the firm would have a banner year.
"If we freeze day-to-day fluctuations in fuel prices, foreign exchange rates and the value of financial assets, we would have a record year," he said.
Mr. Gokongwei said during his presentation of the firm’s 2008 performance that JG Summit remains focused on its core businesses — food and beverage, airlines, property development and telecommunication — to sustain growth.
In 2008, JG Summit’s revenues jumped by 29.1% to P99.87 billion, while pre-tax earnings reached P25.11 billion. Despite these, the firm still incurred losses due to mark-to-market and foreign exchange charges.
Mr. Gokongwei said the firm has programmed P28 billion in capital expenditures for 2009, lower than P33.4 billion last year.
"The reduction [of the budget] is on the food side ... [Universal Robina Corp.] slowed down [on spending] because of the completion of the sugar refinery last year," he said.
JG Summit has allocated P12 billion for Digital Telecommunications Philippines, Inc., P7 billion for Robinsons Land Corp., P5 billion for budget carrier Cebu Pacific, and P3 billion for Universal Robina. The rest will be distributed between the petrochemical and financial services subsidiaries.
Mr. Gokongwei said Universal Robina, JG Summit’s top revenue and cash flow source, would continue to do well, but admitted that the market for snacks and beverage is weakening due to the early arrival of rains and the influenza A(H1N1) scare.
"The rains during the summer affected beverage sales ... Also, all these delays in school openings [due to the flu scare] are also affecting snack sales. Kids don’t have allowance [so there are lesser buyers]," he said.
The JG summit chief said Universal Robina’s overseas expansion is continuing, with plans to introduce a third beverage line in Vietnam soon.
Mr. Gokongwei also said crowds in the Robinsons malls have not yet thinned despite the recent news of the flu spread.
Gokongwei-led Cebu Pacific Air will spend P5 billion on new aircraft this year, expecting revenues to go up by almost a fifth due to higher passenger traffic and additional routes.
At the sidelines of JG Summit’s Holdings Corp.’s annual stockholders’ meeting on Friday, Cebu Pacific President and Chief Executive Officer Lance Y. Gokongwei told reporters this year’s capital expenditures for the budget airline is just the same level as last year’s.
Cebu Pacific has purchased two airbus A320s and two ATR aircraft, while two more ATRs will be delivered this year. The airline now has a fleet of 29 aircraft.
"We have placed orders for 15 more planes which will be delivered in four to five years and five additional orders will still depend on the demand in the next few years," Mr. Gokongwei said.
The budget carrier is confident it will record a 15% to 20% hike in revenues this year.
"We experienced an increase of 30% in passenger traffic in the first quarter of this year and we expect this trend to continue for the rest of the year," Mr. Gokongwei said.
Cebu Pacific claims a market share of 49.1% on operational routes in the Philippine airline industry.
It reported a 12% increase in passenger traffic for North Asia routes over the past twelve months ending May 31. Cebu Pacific has flights to China, Japan and South Korea, and is looking into adding frequencies to China and Japan with the delivery of more aircraft in the next three years.
Cebu Pacific, now said to be Asia’s third largest low-cost airline, flies to 15 cities in Asia and 32 domestic destinations using 21 Airbus and eight ATR aircraft, with an average fleet age of less than two years.
The Philippines will not slip into a recession as domestic demand will be boosted by remittances as well as government pump-priming, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
Consumption, which grew by just 0.8% in the first quarter, will strengthen as overseas Filipino workers are expected to continue sending money home despite the global downturn, central bank deputy governor Diwa C. Guinigundo said.
"I don’t think we shall go into a recession ... We expect consumption spending will recover with continued strength of remittances," he said in an e-mail to reporters.
"I don’t share the pessimism of both the [International Monetary] Fund (IMF) and the World Bank. Their premise is that remittances will decline ... We think its going to be flat, at the least."
The BSP expects remittances to total $16.4 billion in 2009, the same as last year.
The IMF has said it expects the Philippines to contract by 1% by yearend as remittances dip by 4% due to the financial crisis. The World Bank, for its part, warned that the economy may shrink by 5% due to weaker trade and capital flows.
The government, however, expects the economy to grow by 0.8-1.8% this year.
Mr. Guinigundo said the government could increase spending later in the year, and added that private sector investment could also add to growth.
"Public sector spending could also accelerate in the second half of the year," he said. "BPOs (business process outsourcing) will also provide additional growth driver."
The economy grew by just 0.4% in the first quarter, pulled down by the global downturn and historic declines in manufacturing and trade. The result had some officials saying the country was teetering on the bring of a recession and prompted the government to trim this year’s official growth forecast to 0.8-1.8% from 3.1-4.1%.
Friday, 26 June 2009
Despite the economic downturn, demand for mobile e-mail and mobile computing will drive local consumers to buy more smartphones in the Philippines, according to the general manager of Nokia Philippines.
Nokia Philippines general manager William Hamilton-Whyte said there is no stopping the growth in Nokia mobile phone sales in the Philippines despite the global financial crisis. "The global phone market was down 10 percent this year. In the Philippines, I have not seen any slowdown," he said in an interview.
Hamilton-Whyte said Nokia accounts for more than 50 percent of total mobile phone sales in the Philippines, which he described as a dynamic market.
He added, however that some mobile phone users in the Philippines may change their handsets less often as a result of the economic downturn. "Before it was 24 months before they change phones but because of the global crisis, it would be longer at maybe 30 months," he said.
Hamilton-Whyte said the the country's growth in mobile Internet is feeding demand for more sophisticated smartphones. "The Philippines is going to become no. 1 in Asia in terms of mobile email in three years. It is on track towards that goal. It is already now in the top five in the world in mobile email," he said.
"Mobile telecom and personal computers converge. Mobile phone manufacturers come out with mobile phones that look like personal computers while computer manufacturers come out with computers that look like mobile phones," he said.
Hamilton-Whyte said an example of this merger of technologies is Nokia's latest product, the N-97, which has a 32- gigabyte internal memory that is expandable to 48 gigabytes.
"Electronic devices are getting smaller and more powerful," he said.
The Nokia N-97, which debuted at the Peninsula Manil Hotel in Makati City Wednesday, retails for P35,000 in the Philippines.
The balance of payments (BOP) yielded a surplus of US$1.7 billion in Q1 2009, higher by 1.1 percent than the surplus posted in the same quarter a year ago. This developed even as the overall external environment remained relatively weak due to fragilities prevailing in the global economy. The favorable outturn in the current account more than negated the reversal of the capital and financial account to a net outflow during the quarter.
As a result of the continued slump in global demand, exports of goods, and consequently raw material imports for exports production declined, contributing partly to the slowdown in the country’s economic activity, with real gross domestic product (GDP) posting a 0.4 percent growth compared to the 3.9 percent growth in Q1 2008. However, the sustained surplus in the BOP in Q1 2009 is expected to support economic activity for the remainder of the year. The recorded surplus in the BOP also boosted the country’s gross international reserves (GIR) level to reach US$39.0 billion as of end-March 2009. This was higher by 3.7 percent compared to the end-December 2008 level of US$37.6 billion. At this level, reserves were equivalent to 6.2 months’ worth of imports of goods and payments of services and income (import cover). In terms of short-term external debt coverage, the reserves level was 5.6 times the country’s short-term external liabilities based on original maturity and 3.0 times based on residual maturity.
First Quarter 2009 Developments
Current Account. The current account recorded a surplus of US$2.2 billion (equivalent to 5.9 percent of GDP), higher by 69.2 percent compared to the US$1.3 billion surplus in the same quarter last year. The marked improvement was due to higher services and current transfers net receipts coupled with lower trade-in-goods deficit.
The trade-in-goods deficit narrowed by 22.9 percent to US$2.1 billion from the US$2.8 billion deficit recorded in the same quarter last year, given the larger contraction in imports of goods (US$5.2 billion) compared to that of exports of goods (US$4.6 billion). The global economic slowdown continued to take its toll on exports and imports which both posted double-digit declines following the recession in the economies of our traditional trading partners.
Exports of goods reached US$7.7 billion during the quarter. This level was lower than the US$12.3 billion recorded in the same quarter a year ago. Reeling from the impact of weak global demand, exports of goods started to decline in October 2008 and continued through February 2009. Most commodities performed worse than expected as recessionary trends in the country’s major trading partners such as the US, Japan, and China softened demand for foreign goods. Total imports of goods also declined by 34.4 percent, consistent with the slowdown in domestic economic activity and the global economic downturn. Imports of all major commodity groups, except consumer goods, posted double-digit negative growth.
The trade-in-services account registered a surplus of US$763 million in Q1 2009, higher than the surplus of US$557 million in the same quarter a year ago. The 37.0 percent improvement was due mainly to the combined effects of: a) higher net inflows in computer and information, construction, and other business services, specifically miscellaneous, business, professional and technical services which are comprised largely of business process outsourcing (BPO)-related transactions; and b) lower net outflows in transportation services (arising from lower outlays for freight, due in turn to reduced purchases of foreign goods), and insurance services. These more than offset the contraction in net inflows from travel and communication services.
The income account posted a higher deficit of US$308 million from US$194 million deficit in the comparable quarter a year ago due primarily to increased net payments in the investment income account. The widening of the deficit more than offset the improvement in the gross earnings of resident overseas Filipino (OF) workers which grew by 4.6 percent to US$1.1 billion.
Net receipts from current transfers rose by 4.5 percent to US$3.8 billion from the year-ago level, strengthened mainly by higher remittances of non-resident OFs which rose by 2.2 percent to US$3.5 billion. Remittance flows continued to be shored up by the steady labor demand for Filipino skills abroad, and the wider access to expanded money transfer services by overseas Filipinos and their beneficiaries.
Capital and Financial Account. The capital and financial account in Q1 2009 recorded a net outflow of US$758 million, a reversal of the US$507 million net inflow posted in the same quarter a year ago, on account of the negative balances recorded across the major financial accounts–direct, portfolio and other investments.
Direct investments in Q1 2009 posted a net outflow of US$8 million from a net inflow of US$272 million in the comparable quarter in 2008. The net outflow was attributable largely to the 83.5 percent decline in non-residents’ investments which stood at US$44 million during the quarter in review (from US$266 million in Q1 2008). In particular, the other capital account recorded a net outflow, moderating the impact of the net inflows in equity capital and reinvested earnings.
Portfolio investments reversed to a net outflow of US$146 million in Q1 2009 from a net inflow of US$540 million in Q1 2008, as investors remained risk averse amid the global financial stresses. Contributory factors behind the net outflows during the quarter included: a) net withdrawal of equity securities placements by non-residents in private corporations (US$384 million); b) bond repayments by the National Government (NG) (US$935 million) and some private corporates (US$21 million); and c) redemption by residents through secondary market purchase from non-residents of foreign currency-denominated bonds issued by the NG (US$254 million), some private corporates (US$144 million) and the BSP (US$16 million).
The other investment account net outflow reached US$651 million in Q1 2009, nearly three times higher than the net outflow during the comparable quarter last year. Underpinning this development were the following: a) grant of loans by resident banks to non-residents (US$430 million); b) net repayment of maturing short-term loans by resident banks (US$681 million) and some private corporates (US$8 million); and c) repayment of banks’ other liabilities (accrued interest expense) to non-residents (US$606 million).
President Gloria Macapagal-Arroyo’s upcoming State-of-the-Nation Address (SONA) will focus mainly on the economy and education, Deputy Presidential Spokesperson Lorelei Fajardo said today.
In a media briefing this afternoon (Thursday, June 25) in Malacanang, Fajardo said political issues such as the Constituent Assembly (Con-Ass) will be an unlikely topic when the President delivers her last SONA on July 27.
“There will be no political issues that would be discussed or tackled in the SONA. The President will be focusing on the economy and education,” Fajardo said.
The President is currently in Brazil after a hectic four-day working visit to Japan to work out better diplomatic relations and bring home more trade, investments, and other development assistance.
During her foreign trips, the President is also opening new job opportunities and finding ways to improve the welfare of overseas Filipino workers (OFWs) as part of her overall strategy to shore up the economy amid the global financial crisis.
Fajardo said that Charter Change or the mode of Con-Ass is a matter better left to the legislators, in respect to the co-equal branch of government.
“If they want to push through the Con-Ass or not, I think we have to leave it to them,” Fajardo said. “That is the position of the Palace.” (PND)
Jenniffer B. Austria
Ayala Land Inc. said yesterday it is starting to see the recovery of the high-end property market as reflected by a resurgence in reservation sales from March to May.
Ayala Land president Antonino Aquino in a briefing attributed the recovery of the high-end market to strong sales from local buyers.
“This is a case where good domestic market is the one helping push things along. The slowdown in the remittance has more than made up for by the domestic market,” Aquino said.
Figures showed that reservations sales of Ayala Land Premier, the company catering to the high-end market, rose 52 percent in March, 7 percent in April and 52 percent in May. Reservation sales in June are expected to approximate the growth in May.
“It was really the high-end market that was affected by the global financial crisis. But what we are seeing now is that high-end market is on the upswing. Over the last four months, we see positive trend in terms of sales for the high-end segment,” Aquino said.
Aquino hopes that the trend will continue in the second half of the year barring further turmoil in the global markets.
“The trendline is good and, of course, everything is premised there will be no further stressed on the global side. There is really nothing wrong on the domestic front. We continue to be fairly good,” Aquino said.
Sales to migrant Filipino workers remained weak as the bulk of the company’s sales of high-end projects come from United States, which has been badly hit by the financial crisis.
From a high of 30 percent, sales of Ayala Land Premier projects from migrant workers now account only for 10 percent to 15 percent.
Alena Mae S. Flores
THE government will receive this month its 60-percent share from the net revenues of the Galoc oil field off Palawan after the Energy Department declared its commercial viability.
Energy Secretary Angelo Reyes said Galoc Production Co., the operator of the Galoc field, would now proceed with commercial production after producing more than two million barrels of Palawan light crude since production tests started in October last year.
“Of course, this is only the start for future oil production in the country. This is a clear indication that the country is a viable investment location and we hope that this will entice future investors to set up their businesses here,” Reyes said.
Reyes ordered the termination of the extended production tests on June 19, the date from which the government’s share in the profits will be calculated.
The government is set to receive 60 percent of the net revenues, which refer to total revenues less the 70-percent cost-recovery granted to Galoc Production.
The Galoc field produced 20,000 barrels a day in the first 90 days of commercial production before eventually stabilizing to around 12,000 to 14,000 barrels per day.
The Energy Department said that once production has stabilized, flow testing will be undertaken over the coming weeks. Galoc oil production is expected to meet 6 percent of the country’s daily oil demand.
Galoc Production has already sold seven shipments to Korea, Japan and Thailand. It also sold 300,000 barrels to Petron Corp., the country’s largest oil refiner.
The field is estimated to contain 10 million barrels of recoverable oil reserves. But Singapore’s Gaffney and Cline Associates, which conducted its own assessment, reported that the field could contain up to 49 million barrels.
Galoc Production, which owns 58.29 percent in the consortium, is composed of the Vitol Group (68.6 percent), an international oil company, and Otto Energy Ltd. of Australia (31.4 percent).
Other members of the consortium are Australian firm Nido Petroleum Ltd. with 22.8 percent, Oriental Petroleum and Minerals Corp. (7.57 percent), The Philodrill Corp. (7.03 percent), UK firm Forum Energy Philippines Corp. (2.27 percent), Alcorn Gold Resources Corp. (1.53 percent), and PetroEnergy Resources Corp. (1.03 percent).
Galoc Production said the data obtained during the extended production test has “proved invaluable in providing sufficient confidence in reservoir performance to justify commencement of long-term production.”
Lenie Lectura with Armin A. Amio
THE Philippines now ranks the fifth-largest user of mobile e-mail in the world, according to a study made by Finnish mobile phone manufacturer Nokia.
The survey was conducted only since May 2008, when Nokia launched the beta version of its Ovi Mail e-mail service. Nokia Philippines has high hopes that in three years, the country will be named the top user globally.
“I tell you. After being named as the texting capital of the world, the Philippines will soon be the mobile e-mail capital of the world,” said Nokia Philippines general manager William Hamilton-Whyte. “That is why Nokia’s phones will all be e-mail capable.”
To be the e-mail capital of the world, Filipinos should have access to e-mail capable devices. And the cheapest and most convenient way to access the Internet is via mobile phones, said Hamilton-Whyte. At present, Indonesia holds the title as the largest mobile e-mail-user, “but this is largely because of the size of its population,” he explained.
Aside from accessing e-mail through personal computers, laptop, or PDAs, one can check, compose and browse over his e-mail through e-mail-capable handsets.
Nokia Philippines currently has 30 different models that can do mobile e-mail. The cheapest unit costs about P3,000.
Whyte said mobile e-mail is cheaper than sending text messages abroad, which costs from P10 to as much as P75. “In e-mail, you can say a lot of things than SMS, which is limited to a few hundred characters per e-mail,” said Whyte.
And people who don’t have Internet access at home would still have to take public transport to get to the nearest Internet café.
Mobile Internet browsing rate is P5 for 15 minutes for Globe Telecom subscribers and P10 for 30 minutes for Smart Communications Inc.
The Philippine population is now at 90 million. Of that, only 18 million have Internet access. “The reasons I cited will definitely push the usage of mobile e-mail in this country,” said Whyte during a press briefing yesterday of Nokia’s newly launched N97 handset.
The handset features a multitude of music, maps, games, media and applications via Ovi. The retail price is P34,000.
In the Philippines, Whyte said there are an estimated 5,000 new activations to mobile e-mail every week. A huge leap will be seen in the next 12 months. “We will see a big change. Mobile e-mail will be the next big thing. Within the next three years, we will make sure that mobile e-mail is the leading solution that will be used by mobile users.”
Nokia recently launched four affordable Nokia handsets that support Ovi Mail. These handsets cater to the lower-segment of the market, targeting the youth. Price ranges from P5,000 to P7,500 each.
AS of June 12, the Philippines became the largest WiMax broadband Internet zone in Southeast Asia. Globe Telecom and Intel lit up the large-area wireless broadband for Luzon, the Visayas and Mindanao marking the official rollout of WiMax in the Philippines.
Just as Cavite once served as the staging ground for the Philippine revolution’s spread throughout the archipelago, the province was the proving ground for Worldwide Interoperability for Microwave Access (WiMax), where computer processor manufacturer Intel Philippines and Globe jointly conducted trial deployments for WiMax. Now, broadband Internet connections over WiMax technology have put underserved areas in the country’s three major islands online.
“Intel is delighted to take part in the launch of Globe Telecom’s WiMax services in the Philippines,” Intel Corp. vice president and Asia-Pacific general manager Navin Shenoy said. “Around the world, service providers and government are deploying fourth-generation [4G] WiMax networks to help bridge the digital divide and bring affordable, high-speed mobile broadband to their citizens.”
WiMax is a wireless broadband Internet access technology that provides high-speed and constant access to the worldwide web across large areas and areas previously inaccessible to Wi-Fi (wireless local access network) broadband users—such as parks and while in transit from city to city. WiMax, Shenoy said, allows its users to access large amounts of data, such as movies and multimedia content on a variety of devices, including desktop personal computers (PC), ultramobile PCs and mini-desktop PCs loaded with the Intel Atom processor, mobile Internet devices, laptops and smart phones.
Shenoy also said WiMax “is the first 4G solution available today that meets the pent-up demand for high-speed, wireless Internet access.” Such access potentially offers businesses outside urban areas, field workers connected to their offices by remote access, health workers in far-flung areas, teachers and students with vital Internet access anywhere, at any time.
According to Shenoy, WiMax “is the right technology, available at the right time, for countries to accelerate broadband in aid of economic recovery.” With the help of “revolutionary” 4G technology, Shenoy said WiMax is extending the reach of broadband Internet connectivity “to more locations than ever before and at more affordable costs.”
Intel Philippines country manager Ricky Banaag said, “The value proposition of 802.16e WiMax is the Internet as it was meant to be: Open, fast and mobile. The commercial rollout represents a significant milestone in the growth of WiMax both globally and domestically. With the rapid growth of mobile devices in the country, Intel believes that Globe Broadband’s WiMax network will further accelerate the adoption of mobile computing in the Philippines.”
Banaag noted that the demand for broadband access is so high worldwide that WiMax has been deployed in 139 countries to serve a market of 430 million people, a number that grows daily. The difference between Wi-Fi and WiMax is that the first one provides wireless broadband within a radius of 30 feet from the hot spot, while the latter signal transmits connectivity over kilometers and is capable of blanketing entire cities with a single signal. WiMax is also compatible with Wi-Fi and will compensate where signals are weak.
Singapore, Taipei and Baltimore in the United States are among the first adopters of WiMax technology and their local government units and law enforcement agencies are now constantly online using Wimax. Shenoy explains WiMax as a technology that “combines the familiarity of Wi-Fi with the mobility of cellular [phone technology] that will deliver personal mobile broadband that moves with you.” Now that WiMax has been launched in the Philippines, “soon, mobile WiMax will blanket large areas—metropolitan, suburban or rural—delivering broadband access at speed similar to existing broadband.”
WiMax service is initially available through Globe Broadband in South Luzon, the Visayas, Cagayan de Oro City and selected areas of Metro Manila for as low as P795 a month. The areas Globe chose to initiate WiMax connectivity were “previously difficult to provide [with] Internet access, infrastructure-wise,” Globe consumer broadband business group head Menchie Orlina said.
Thursday, 25 June 2009
Pinoys opting for value, not luxury, amid crisis
JESSICA ANNE D. HERMOSA
FILIPINOS ARE LESS likely to indulge in luxuries than other Asian shoppers this year even as they are among the most optimistic that personal finances will soon improve, a regional poll showed.
Consumers in the country are more driven by value than status unlike most of their neighbors, according to data from the "Eye on Asia" survey which was made available yesterday to BusinessWorld.
The review, made by marketing communications firm the Grey Group in January, culled responses from 33,000 people in 16 Asia-Pacific economies: Australia, Bangladesh, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand, and Vietnam.
The Philippines consistently ranked in the bottom half of the 16 for most questions on the importance of buying luxury items.
"We found that Philippines typically scored fairly low. They don’t feel they need this... They are not status seekers, but more value seekers... They may not be ready for the luxury boom seen in other Asian countries," Grey Korea Chief Strategy Officer Steve Yi said in a telephone interview.
"More developed countries typically want to be more indulgent. In general, the more urbanized nations tend to believe it is much more important to indulge," Mr. Yi said.
Asked whether it is important to indulge oneself to cope with the stresses of modern life, the 500 Filipino respondents had a score of 2.97 compared to the Asian average of 3.09, putting the country in the bottom sixth. South Korea topped the list and was interestingly trailed by Sri Lanka and Bangladesh.
Asked whether they believed in "treating myself to life’s pleasures as often as I can", Filipinos again ranked in the bottom sixth.
Smaller purchases may be the key, with the Filipino respondents indicating they were amenable to the purchase of "little luxuries", this time with responses near the Asian average (a score of 2.83 versus the 2.85 median).
The survey, which segmented consumers into shopping tribes, went on to classify Filipinos more as "perceived value seekers." Forty-one percent fell into this category which is described as consumers who want added value, emotional connection, and reliability.
This came as Filipinos ranked fourth in the list of Asian consumers concerned about household finances. Vietnam, Sri Lanka and Korea were the top three. Indonesia was at the bottom after China.
The rest of the Filipino respondents fell into four other "tribes." Nearly a quarter are "new brand enjoyers," a fifth are "function firsts" and just roughly a tenth seek status when making a purchase. The smallest segment, 5%, are "individualist believers" that want trendy brands.
But compared to other Asian consumers, Filipinos are more optimistic when it comes to the state of their individual finances in the future. Nearly half or 48% of the Filipino respondents believe their household finances will get better in the next year.
"Filipinos are a little above the average of 40%," Mr. Yi said. The relative optimism, he explained, may be because the financial crisis has hit developed countries harder.
SLOWDOWN, yes. Recession, no. “I disagree with that [World Bank] analysis. How can we be in recession when our employment increased by 1.37 million?”
That was Dr. Victor Abola, economics professor at the University of Asia and the Pacific, adding that the WB may have jumped the gun in seeing “outright recession this year” in the Philippines.
In its report “Global Development Finance 2009: Charting a Global Recovery,” the Washington-based bank said the Philippines is one of five countries in the East Asia and Pacific region that will post negative growth this year, with Malaysia forecast to post the highest contraction of 4.4 percent.
“I don’t know where they’re coming from, but it appears their emphasis is on Q1 figures,” said Abola. He said his university estimates the country’s GDP will grow 4.06 percent this year and 4.92 percent next year.
He surmised the WB, formally known as the International Bank for Reconstruction and Development, used first-quarter GDP figures that the National Statistics Coordination Board placed at 0.4 percent, or teetering on recession.
However, Abola said based on UA&P’s computation, the estimated figure should be revised upwards “or in any case, it will not be that low.”
He said neither the World Bank nor NSCB data considered the impact of other factors like government spending, which he estimates to have been at 21.25 percent of GDP for the quarter.
On the first two months of the year, Abola said they estimate government spending to be about 20 percent, including interest payments. “I believe the fiscal stimulus that the government launched this year has impacted on the economy, thus the higher employment in April.”
Based on the Labor Force Survey, the unemployment rate improved to 7.5 percent in April 2009 from 8 percent in the same period last year. The labor force grew by 3.8 percent, slightly less than the employment growth of 4.3 percent.
Abola said considering that April is the month when new entrants to the labor force come in, the figure is significant “since it tells us a different story on unemployment.”
He suspects the business process outsourcing and health industries may have absorbed the graduates while other new entrants may have gone abroad for work, thereby trimming the unemployment levels.
The April figures show only domestic employment, however, “and with that figure, that means the labor force is growing.”
“We’re in a slowdown but not in a recession or heading towards it. I’m not being optimistic. I’m just saying the numbers don’t lie,” he concluded.
Outside the Box
SO what did we do wrong? Is it something the Philippines said? Did the country somehow offend the Western experts? Maybe they are just angry that their forecasts have been wrong. Or perhaps they are jealous of our small success. Whatever the reason, over the last few months the Philippines has been subject to the most incredible amount of economic bashing possible.
I wrote back in February that over the 2008 Christmas holiday, the foreign economic forecasts for the Philippines, mostly positive before, had suddenly turned negative. The shift was like the difference between night and day.
Of course, we have to note what these people say. I mean when the International Monetary Fund, the largest financial institution in the world, and the World Bank (WB) talk, you should listen. Back then, the general comment was that the Philippine economy was super dependant on overseas remittances, and those remittances were going to drop like a rock. In fact, remittances were supposed to be much lower in 2009 than ever before.
A funny thing happened. The amount of remittances did not go down. Sure, the rate of growth is slower, but the dollar value of the remittances is historically high.
On Monday, the newspaper headlines (which look like they are written by the foreigners) screamed “OFW remittances plunge amid economic decline.” Is there a local journalism award for the most blatantly bogus headline? Actually, remittances from the US are dropping. But the fact still remains that overall remittances are higher in 2009 than in 2008.
Along the same lines, Philippine Airlines was going to have to field extra flights to bring all the fired overseas Filipino workers home. That has not happened either. The fact is that overseas deployments are higher this year than in the last, and thousands of job offers are going unfilled.
I mean, these guys are supposed to be experts and the year is almost half over. When are all these economy-killing things going to happen?
Exports have been badly hurt by the near economic collapse of the West. And the job losses have been devastating to the people who were let go. But the total number of jobs created has more than offset the losses, as evidenced by the April numbers that are much better than in 2008.
The Philippine Economic Zone Authority registered an 18-percent increase in investments to P9.75 billion in May from P8.25 billion in 2008, which will create over 6,000 new jobs as against some 3,000 in May 2008.
Now comes the WB predicting that the Philippines is going to absolutely, positively go into a recession this year. A week ago, we had a conference of all the local gloom-and-doom experts saying the same thing. You know what else? In April 2009, just two months ago, the WB predicted 1.9-percent growth for the Philippines. Interesting!
I think I may have found the reason the Philippines is being bashed so much by the world financial community and their local supporters. From the Inquirer: “The World Bank said there was nothing extraordinary about the Philippines that would keep it immune from the crisis gripping the world economy.”
Excuse me if I am impolite, but that is absolutely, positively one of the most stupid comments I have ever read, showing complete ignorance of the country. Maybe all these people are just plain dumb. If not extraordinary, at least the Philippine economy is different from most other nations.
As shown by the general economy, in spite of our exports being down by 40 percent, our exports have only a minimal overall impact on the nation, unlike many of our neighbors where 20 percent to 30 percent of their gross domestic product (GDP) depends on export earnings. Perhaps the WB experts were watching Hayden Kho videos instead of doing their economic research.
Then the WB tells us that the Philippines is in deep trouble because there will be a large reduction of foreign money coming in this year. Guess what? We have always had the smallest bite of the foreign-investment pie. Unlike other countries, the Philippines GDP does not depend on foreign investment.
I cannot understand why the experts, local and foreign, are still predicting such a dire and dismal economic future for the country when nothing in the last six months supports that view. It is almost as if they are hoping and praying that the Philippines will sink into economic disaster.
Most important, we are not dependant on the US and Europe for our economic survival and prosperity like other neocolonial countries. I think the “experts” hate that fact about the Philippines.
Maybe if we were being forced to beg the World Bank to borrow a few billion dollars to stay alive, they would be more optimistic. If you are a banker, you are always favorable to the people who owe you money, and do everything you can to get the others to borrow from you, including telling them how bad they are supposedly doing.
A side note: On Tuesday, June 17, at 9:40 a.m., I sent an alert to the stock-market investors I advise to sell short-term trading positions. If you are riding out this necessary and important correction, not to worry. The correction will end. When we bottom out at support, the next leg up will be around 400 to 600 points.
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Abigail L. Ho
Philippine Daily Inquirer
MANILA, Philippines - Despite the economic crisis, the local franchising industry expects to still expand and even extend its reach to foreign markets.
According to Philippine Franchise Association chair and Francorp Philippines chief executive Alegria Limjoco, the industry remained optimistic despite the overall doom-and-gloom situation, as the franchising business was not likely to be as hard hit as other industries.
She related that when the Asian financial crisis struck in 1997, the franchising industry showed relative resilience, with both established and new entrepreneurs continuing to invest in the sector.
“Those who bought a franchise in 1997 are now regulars in the golf course,” she said in a statement.
This time around, amid predictions of a slowdown in consumer spending due to the global recession and the spread of the A(H1N1) flu virus, she said the industry was unlikely to suffer “enormous future decline.”
The franchising industry, in fact, could provide returning overseas Filipino workers and even retrenched workers the opportunity to remain productive and generate much-needed income.
“Franchising does well in good times, and even better in challenging times,” she said.
“With our young and large population whose needs are fully matched by the products and services of the highly creative members of the PFA, market demand will remain up and the economy can post decent growth,” she added.
Written by Alma Anonas-Carpio
Business intelligence (BI) tools are now trickling down from the enterprise level to the small and medium enterprise (SME) arena as German software firm SAP AG announced the release of BusinessObjects Explorer software that helps act quickly and make effective decisions based on real-time data
SAP BusinessObjects Explorer brings together search and navigation capabilities from the SAP BusinessObjects portfolio with SAP NetWeaver Business Warehouse Accelerator software that will help users navigate through mountains of business data with speed and efficiency.
The launch, announced at Sapphire 2009, marks another milestone in SAP’s successful acquisition and integration of Business Objects. This new solution offers the “most significant and largest combination of SAP and Business Objects technology to date,” SAP Southeast Asia senior director Eric Sin said recent press briefing. “No other vendor offers such a unique combination of navigation, search and scalable in-memory acceleration for the enterprise.”
The new software suite features “an Internet-style search box as its interface,” Sin said, adding that the program “is designed for users without any prior information technology expertise. Anyone can now explore and retrieve business information through simple keyword searches. The overall experience is as simple as browsing the Internet or an online store and appealing to users who are not currently served by business intelligence tools.”
According to Sin, “if you can use Windows, web browsers and search engines like Google, you can use SAP BusinessObjects Explorer.”
“Many businesses in the Philippines, particularly SMEs, make decisions based on instinct,” SAP Philippines business manager Jennie Ligones said. “While this may be acceptable for smaller enterprises in a not so cut-throat business environment, it is not feasible to grow an enterprise with this kind of decision making.”
“SAP BusinessObjects Explorer enables management to make better and more educated decisions. We hope that with its availability in the Philippines, local businesses will be better equipped to weather the current economic crisis,” Ligones said.
Studies have shown that the majority of business users make decisions based on “gut feel” and do not have access to the data they need to do their jobs, often to the detriment of productivity, agility in the marketplace and resulting in flawed decision-making, Sin said. “SAP BusinessObjects Explorer solves this problem by making data readily available to business users and enabling them to make sense of massive amounts of data quickly.”
“Given the current economic reality, it is critical for companies to have easy access to accurate information and gain immediate insight into their business and stay ahead of the competition. No longer will critical business information be elusive—SAP BusinessObjects Explorer represents the next generation of BI in which any business user can find the data needed to contribute to his or her organization’s success,” Simon Dale, SAP senior vice president and head of the company’s Business User Organization for the Asia-Pacific and Japan, said in a statement issued at the briefing.
SAP also announced that it is now investigating the possibility of expanding its partnerships with computer and computer-peripherals and software makers IBM, Hewlett-Packard, Dell and Fujitsu to help make SAP BusinessObjects Explorer faster and easier to deploy by combining and optimizing hardware and software solutions.
Tuesday, 23 June 2009
MANILA (PNA) -- The Pro-Performance System (PPS) Steering Committee or the Pro-Performance Team composed of leaders from the government, business and private sectors and civil society groups, led by Presidential Management Staff (PMS) Secretary Hermogenes Esperon Jr., will inspect Tuesday the ongoing rehabilitation and upgrading works at the Southern Luzon Expressway (SLEX) to fast-track the project’s completion this year.
The Pro-Performance Team will motor from Muntinlupa City to Sto-Tomas, Batangas and inspect on the ground Toll Road 1 (Alabang Viaduct), Toll Road 2 (Sta. Rosa-Calamba) and Toll Road 3 (Calamba-Sto.Tomas).
Joining Esperon in the project inspection are Pro-Performance Team members Ambassador Marita Jimenez of the Asian Development Bank (international development organizations), Ambassador Donald Dee of the Philippine Chamber of Commerce and Industry (business sector); Caritas Manila Executive Director Fr. Anton Pascual (religious sector), Manila Broadcasting Company President and Kapisanan ng mga Brodkaster ng Pilipinas (KBP) Vice President Ruperto Nicdao Jr. (media), National Youth Commission Chairman Richard Nalupta (youth) and Engineer Joyce Palacol of the Philippine Charity Sweepstakes Office (PCSO) representing PCSO General Manager Rosario Uriarte (national government advocacy).
Esperon said that President Arroyo wants the priority infrastructure projects, or those identified in her State of the Nation Addresses (SONAs), including the SLEX rehabilitation and upgrading project, to be completed this year.
To date, the SLEX project is 76.87 percent accomplished. The Alabang Viaduct was opened to the public late last year, while Toll Roads 2 and 3 are scheduled to be completed in June and December 2009, respectively.
According to Esperon, the Pro-Performance Team embarked on a more intensified project monitoring, including inspections and stakeholder meetings, to ensure the completion of the President’s 72 ongoing priority infrastructure projects and five national programs, or those identified in her State of the Nation Addresses (SONAs).
Last week, the Pro-Performance Team inspected two multi-billion flood control projects – the Agno River Flood Control Project Phase II and the KAMANAVA (Kalookan-Malabon-Navotas-Valenzuela) Flood Control Project. Both projects are nearing completion with 90 percent accomplished.
The SLEX Project, costing P8.5 billion, involves the rehabilitation and upgrading of the existing 28.54-kilometer length of the expressway starting from the Alabang Viaduct up to Calamba in Laguna, and an additional 7.6-kilometer highway to be constructed from Calamba to Sto. Tomas in Batangas that will connect to the Southern Tagalog Arterial Road (STAR) 2.
Once completed, the SLEX-STAR linkage will provide access to the Port of Batangas and offer a seamless nautical and land highway that will save both time and transport cost for both passengers and freight. It will relieve traffic on the old highway and significantly reduce travel from 46 minutes to 26 minutes when traveling from Sto. Tomas, Batangas to Alabang.
“The extension of the SLEX is a major infrastructure project. It will not only ease and speed up travel to and from Batangas and Laguna but also connect the CALABARZON (Calamba-Laguna-Batangas-Rizal-Quezon) to the Luzon Urban Beltway and NLAQ through other priority infrastructure projects such as the C5-NLEX-SLEX Link, Subic Clark Tarlac Expressway (SCTEX) project and Tarlac-Pangasinan-La Union Expressway (TPLEX) project,” said Esperon.
“With this project, new centers of business and commerce in the South are expected to open, which would help decongest Metro Manila,” Esperon said, adding “this would provide our exporters faster and safer access to the Free Port Zone in Subic and the airport in Clark and the NAIA.”
“To make sure that the project is completed on time,” Esperon said, “the Pro-Performance Team is pressing the adoption of a 24-hour work shift and constant monitoring of the rate of accomplishment of the remaining sections of SLEX.”
Other members of the Pre-Performance Team include Union of Local Authorities of the Philippines (ULAP) President Mayor Benjamin Abalos Jr. (local governments) and Jose Rizal University President Vincent Fabella (academe).
Abigail L. Ho
Philippine Daily Inquirer
MANILA, Philippines – Despite the tough economic environment, local pharmaceutical companies expect a 12-percent growth for the year, higher than the industry’s earlier projection of 7 percent.
In a statement issued Monday, the Pharmaceutical and Healthcare Association of the Philippines said Filipino firms could take advantage of a number of expiring patents this year, as well as those that had lapsed over the past two to three years.
When patents expire, local manufacturers could start introducing generic versions of patented drugs. This would not only expand the domestic firms’ markets, but would also reduce the cost of medicine.
“Market competition is evident with the strong growth of the local pharmaceutical industry. This growth is driven by the entry of more generics due to patent expiry of several products in the last two to three years,” PHAP executive director Reiner Gloor said.
The share of local manufacturers in the drug market is also seen to rise to 38 percent and will likely continue to expand through 2010 and beyond.
PHAP said multinational drug firms were expected to grow by only 4 percent this year.
As of this month, the combined growth of local and multinational pharmaceutical firms came up to 7 percent.
In 2008, the industry grew by more than 10 percent to reach a market value of P116 billion.
In the meantime, Gloor said PHAP member-companies maintained their stance that the maximum retail price (MRP) provision of RA 9502, or the Universally Accessible Quality and Cheaper Medicines Act, should only be used as a “reserve instrument.”
“Its imposition is not necessary, given the existing market competition and wide availability of alternatives in the same therapeutic classes included in the initial MRP list,” he said.
He said there would be more generic competition in the market anyway, so there was no crucial need for MRP at this point.
Reuters, Justin S. Gatuslao and Paolo Luis G. Montecillo
Full article at http://www.bworldonline.com/BW062309/content.php?id=002
THE PHILIPPINES will avoid a recession with second-quarter growth expected to outperform the first three months of the year following accelerated state spending, government officials yesterday said.
The claim — questioned by economists and former Cabinet officials — came as the World Bank said the Philippines would fall into a recession this year.
"We expect things to be better than the first quarter," said Rolando G. Tungpalan, deputy director general of the National Economic and Development Authority (NEDA).
Mr. Tungpalan said "things are looking better now", primarily due to infrastructure spending under the P330-billion Economic Resiliency Plan (ERP), 60% of which, he said, would be spent in the first semester.
Consumer spending, he added, has already started to improve because of the recent school opening. Another factor that will contribute to better growth is the continued inflow of overseas Filipino worker remittances.
"I cannot imagine a second quarter worse than the first quarter," Mr. Tungpalan said. "Surely there is no recession. Resiliency will win over recession."
Mr. Tungpalan echoed comments by his boss, Socioeconomic Planning Secretary Ralph G. Recto, who last month said the economy was certain to grow this quarter, buoyed by spending.
The government has cut its growth target to 0.8-1.8% this year from 3.1-4.1% following a poor first quarter.
The economy shrank 2.3% in the first three months from the previous quarter, the worst in two decades, bringing annual first-quarter growth to 0.4%.
The International Monetary Fund expects the economy to shrink by 1% this year and the World Bank yesterday announced that it expected the Philippines to contract by 0.5%.
The new World Bank forecast was rejected by a colleague of Mr. Tungpalan, NEDA policy planning director Dennis A. Arroyo, who said "We still believe we’ll still be growing this year."
"Because of the delay in the budget, the first quarter GDP (gross domestic product) result, of course, was low," he said.
"The first quarter did not benefit from the ERP spending, so growth was slow for the period ... but now we have the money to spend."
Outside the Box
HOW does the Philippines stay alive economically? Ruthless politics, a feeble manufacturing industry, an entrenched oligarchy, being geographically fragmented, two armed insurgent ideologies.
The list is long, formidable and challenging to any sort of economic growth. Yet, this nation has progressed and keeps progressing regardless of the obstacles. Why?
It would be hard to find any economic or political expert that would note this, but in fact, the Philippines has a strong free-market system that has allowed the nation to push against those factors that would otherwise keep it as a “basket case.”
Filipinos look back to the Edsa Revolution of 1986 as the beginning of the march to economic freedom. That is incorrect. Economic freedom through the free market came to the Philippines with the inauguration of Fidel Ramos as president in 1992.
With that freedom, the free markets have allowed the Philippines 17 years of economic expansion.
In the late 1980s, the Philippines was a basket case, the economy held tight, strangled by the “crony capitalism” of Ferdinand Marcos.
After the ouster of Marcos, the Philippines believed that with political freedom would come economic prosperity. But this was not to happen. The reason is that there was little difference between a crony-controlled economy and a government-controlled economy.
Ironically, there are some disturbing similarities between the Marcos economic policies of 25 years ago and the economic polices of the United States and Europe in 2009.
Philippine banks were owned by a favored few and lending was, in effect, controlled by the government. We were told the United States government takeover and control of automobile-manufacturing firms is for the good of the nation. Marcos said the same thing of his government’s control and oftentimes ownership of telecommunications, power generation, natural resources, public-construction works and transportation.
When Corazon Aquino took power, there was an incredible optimism about the future. But the dream was never realized during her presidency. The blame is placed on the political instability that shadowed each day of her administration. Yet, politics is only partly guilty for the stagnant economy.
Ramos brought the economic dream to a reality not through political stability, but by releasing the benefits of the free market.
Today, as in 1992, few if any of the aforementioned impediments to growth have changed. The one fundamental change is that the free market is alive and well in most sectors of the Philippine economy.
By 1992, a decade-and-a-half of government destruction of the free market, all in the furthering of creating a “New Society,” had taken a great economic toll. The tight regulation of sea and air transportation had reduced domestic travel to a shambles. Control of the power sector eventually caused 12- to -18-hour-a-day blackouts for several years. The government monopoly of telecommunications created a normal waiting time of five years to have a simple telephone installed.
The death, no, the murder of free- market capitalism reached to the lowest level of the economy. Taxicab franchises throughout the country were awarded only to those who had the capital to field a large number of units. Competition was minimal; service was also minimal.
Nearly from day one of his administration, Fidel Ramos sought to bring the free market back to life. The government ended the power crisis within 18 months by granting licenses to independent power producers. But old habits die hard, and the free market was subverted by the government guaranteeing purchase contracts regardless of demand.
Economic sector after sector was taken out of government control. Competition was encouraged through deregulation and the privatization of transportation, communications and energy, to name a few. From one carrier, government-owned Philippine Airlines, now half a dozen compete in a domestic market which grew by 20 percent in first-quarter 2009 over 2008.
Telecommunications is fiercely competitive, making the Philippines the wireless capital of the world if 200 million text (short messaging system, or SMS) messages a day is any measure. Nearly $200 million worth of banking transactions per day in the Philippines are wireless.
Privatization and deregulation of the petroleum industry has created a climate where same-company gas stations compete through pricing. And the difference in pump prices of gasoline between the “major” and “minor” players can be as much as 10 percent.
The most creative adherence of the Ramos administration to free market principles was the creation of the build-operate-transfer (BOT) scheme for public-works projects. Private capital, investing for profit and not the public good, have built dozens of large-scale projects that will eventually be turned over to the government at virtually no cost, freeing public capital for those services better supplied by the government.
We can also measure the success of the free market in the Philippines by looking at areas still under government control. Rice prices are quasi-controlled through the National Food Authority. And “poor” rice farmers economically suffer under price controls in order to benefit the “poor” consumers. But there is not enough domestic rice production, so the poor consumers must pay higher prices for imported rice. No one wins under this pricing scheme.
Energy costs are outrageously high, a remnant of Marcos’s National Power Corp. and Ramos’s guaranteed pricing, nonfree-market generation and noncompetition, which hampers development.
The Philippines is not a freewheeling capitalist system by any means. Corporate taxes are very high. Regulation and red tape can be stifling. But it is a free-market economy, and the empirical evidence shows the gains and benefits of the free market even in this underdeveloped nation.
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Erik de la Cruz
THE Philippines has been described to be now teetering toward a recession, and political uncertainties ahead of the 2010 elections are clouding the country’s future, but some of the top local chief executives remain upbeat regarding the domestic economy’s performance.
Through interviews of the country’s top CEOs, audit and business-advisory firm Isla Lipana & Co. —the Philippine member-firm of the global PricewaterhouseCoopers network—found that many executives are still bullish about their organizations’ growth prospects.
The firm launched on Monday night its project called Philippine Resiliency: A Gem Uncovered—or Project PR—which involved publishing in a booklet the insights of CEOs of some of the country’s largest and most important companies.
Interviewed were at least 25 CEOs, according to Isla Lipana managing partner for tax Alexander Cabrera. Among those who gave positive insights were staunch critics of the government, he said.
Outgoing Isla Lipana chairman and senior partner Tammy Lipana said: “Project PR sought to confirm the upbeat view of the featured CEOs of the country’s economic performance and gauge their confidence in the resiliency of the Philippines given what is expected to be a long and deep global economic downturn.”
Those who shared their insights through the project include Jaime Augusto Zobel de Ayala of Ayala Corp., Aurelio Montinola III of Bank of the Philippine Islands, Erramon Aboitiz of Aboitiz Equity Ventures, Tony Tan Caktiong of Jollibee Foods Corp., Lance Gokongwei of JG Summit Holdings, Pedro Roxas of Roxas Holdings, and Rex Drilon II of Ortigas & Co.Ltd.
The heads of sectoral organizations also shared their views, including Corazon de la Paz-Bernardo of the International Social Security Association, Ramon del Rosario Jr. of the Makati Business Club, and Oscar Suarez of the Business Processing Association of the Philippines.
“It is heartening to note that these top CEOs are indeed unfazed by the global economic slump and, in fact, are enthusiastic about what is in store for the Philippines and their companies over the long term,” Lipana said.
“We hope foreign investors and other stakeholders will share their optimism on the Philippines,” she said.
The launching of the Philippine Resiliency booklet was one of the highlights of the 87th anniversary celebration of the firm at Dusit Thani Hotel in Makati City on Wednesday night.
Also formally announced was the change in leadership of the firm, with Lipana retiring as chairman and senior partner and incumbent vice chairman Judith Lopez taking over. Lipana has reached the retirement age of 55.
Lopez, whose term begins on July 1, joined the firm in 1978 and became a partner in 1991. She has served as the firm’s vice chairman since 2006 and as managing partner for assurance since 2001.
Monday, 22 June 2009
AFP with a report from Alexis Douglas B. Romero
TOKYO — President Gloria Macapagal-Arroyo supports wider cooperation in stabilizing Asia’s financial market, including creating a regional version of the International Monetary Fund.
In an interview with Japanese media on Saturday, she praised as a great success the expansion of the Chiang Mai Initiative (CMI), a currency swap framework to guard against financial crises, the Nikkei business daily said.
The scheme, involving the Association of Southeast Asian Nations (ASEAN), Japan, China and South Korea, was launched in 2000 following the 1997 Asian financial crisis.
The ASEAN-plus-three agreed in May to expand the CMI’s size to $120 billion from the original $80 billion proposed in 2008. Japan and China will each contribute $38.4 billion and South Korea $19.2 billion.
"The Asian bond market initiative is something we should now push," Mrs. Arroyo was quoted by the Nikkei as saying on a visit to meet Prime Minister Taro Aso and business leaders.
The president was referring to efforts by regional governments and private companies to revitalize the market by issuing bonds denominated in local currencies.
Mrs. Arroyo said the idea of establishing an Asian version of the IMF should be the next subject to be studied by the region to strengthen its financial stability, according to the Nikkei.
She said she "agrees" with the idea, it added.
"I am even in favor of a pan-Asian economic community that would cover not only the East Asian Summit, but other parts of Asia like the Middle East, Central Asia, South Asia and Oceania," Mrs. Arroyo said.
In Manila, deputy presidential spokesman for economic affairs Gary B. Olivar said the creation of an Asian version of the IMF could help spare the region from the impact of a financial crisis and would promote greater economic integration.
"Although we support free trade, we have to strike a balance. While we engage with the world, we also have to be self-sufficient," he said in telephone interview.
"We should also strengthen intra-regional trade and financial flow. I can say that she (Mrs. Arroyo) is in favor of a close economic integration in the region."
An economic partnership agreement between Tokyo and Manila took effect last December, opening the door for Philippine nurses and caregivers to work in Japan.
While in Tokyo, Mrs. Arroyo obtained a Japan Bank for International Cooperation guarantee of up to $1 billion for a planned Samurai bond offer.
Manila and Tokyo also signed two official development assistance loans worth $456 million, and agreed to convene a joint working group that will draw up a bilateral social security agreement.
Mrs. Arroyo yesterday left Tokyo following a four-day visit and will proceed to Brazil where agreements in agriculture and bioenergy are expected to be signed. She is scheduled to return to Manila on Friday.
The Bangko Sentral ng Pilipinas (BSP) is remitting P5-billion as dividend payments to the National Government based on its 2008 income.
BSP’s dividend payments will be included in the agenda of the next Monetary Board meeting for notification.
In 2007, the BSP did not pay dividends since it lost P87-billion and P113-billion more from its foreign exchange and liquidity management operations – for example dollar buying – to temper the exchange market volatility.
BSP has to remit 75 percent of its net earnings to NG based on Section 2 of Republic Act 7656 or the law requiring government owned or controlled corporations (GOCCs) to declare dividends under certain conditions to the NG. Except for BSP, all GOCCs and government financial institutions remit only 50 percent of its net income to the main government.
The Commission on Audit (CoA), referring to the same law, said the BSP has been under-declaring its dividend payments to the NG for several years.
As of 2007, CoA said the BSP has back dividends that it has to pay NG in the amount of P16 billion. The Department of Finance agrees with CoA and has been in discussion with central bank officials for the payment of this amount.
But, as argued by the BSP citing Republic Act 7653 or the New Central Bank Act (in Sections 43, 44 and 132), the central bank has authority to maintain reserves “as necessary” and may deduct amounts in favor of maintaining reserves when calculating its net profit.
According to sources citing official documents, the BSP posted an unaudited net income of around P7 billion last year, a sharp reversal to the P87-billion loss the institution suffered in 2007.