Friday, 24 July 2009

Philippines sees $8-B investments in tourism in 5 years

Manila Bulletin

The private sector is targetting another $8 billion worth of investments in the tourism sector and $30 billion tourism receipts by 2015 based on 32 million cumulative tourist arrival projection over a five year period.

Private sector tourism champion Samie Lim, who is also vice-chairman of the Philippine Chamber of Commerce and Industry (PCCI), told reporters they would be presenting these targets during the Tourism Summit on August 24-25.

“We are presenting these cumulative figures to impress upon government and to justify the incentives that would be granted to investors in the tourism sector under the Implementing Rules and Regulations of the Tourism Act,” Lim said.

Lim said the 5-year 2005-2010 Tourism program of the PCCI, a brainchild of Lim, is expected to fully attain its target of $8 billion in investments although they may be short of the 5 million tourist arrival projection by 2015.

Lim, however, said they are confident of hitting 4 million by 2010. Tourist arrivals have now reached 3.2 million.

The private sector is now gearing up for the crafting of the IRR and would like to ensure that the government would would stay faithful to its commitment for a private-public sector partnership in the promotion of the tourism industry.

Lim noted that the law has mandated for private sector representation in the Tourim Promotion Board, the marketing and promotions arm provided for in the Tourism Act.

He added that in the Regional Development Council of the Local Government Code has specified for private sector representatives but it turned out the members turned out to be wives or relatives of the local officials.

He stressed that the private sector representatives in the TPB and in the regional councils must be individuals who made a difference in the industry and not just simply a 30-year old practitioner, but who does not have a contribution to the industry.

Cebu Pacific marks one year at NAIA 3 with President Arroyo

The Working President (40)

Business groups bare wish lists for Arroyo’s final SONA


THE BUSINESS community wants President Gloria M. Arroyo to promise continued infrastructure spending and also rally her allies in Congress to pass 12 key bills when she delivers her last State of the Nation Address (SONA) on Monday, an informal poll of four organizations revealed.

Several groups also expressed concern over the House of Representatives’ plans to amend the 1987 constitution, with one particularly urging the President to dissuade supporters from doing so before her term ends next year.

"I hope she will touch on infrastructure. We expect a very lively discussion on this," Philippine Chamber of Commerce and Industry President Edgardo G. Lacson told reporters yesterday.

Mr. Lacson lauded the government for its performance so far as around 40% of the infrastructure projects in its midyear development plan had reportedly been completed.

"And the fact that we are not in a recession is another good indication. Peace and order is still under control ... and we have [a] noisy democracy," he added.

Mrs. Arroyo, Mr. Lacson said, should also push for the approval of 12 bills business groups listed at a Legislative-Executive Development Advisory Council meeting in June.

These are the Department of Information and Communications, Rationalization of Fiscal Incentives, Free Patent to Residential Lands, Pre-Need Code, Freedom of Access to Information, Real Estate Investment Trust, Anti-Smuggling, Amendment of the Customs Brokers Act, Electricity Rate Reduction, Uniform Franchise Tax on Distribution Utilities, OECD Tax Compliance Amendment, and the Land Use measures.

European Chamber of commerce of the Philippines Executive Vice-President Henry J. Schumacher echoed this yesterday, saying: "What I would like to see is she will outline reform legislation. The business community has provided a list."

American Chamber of Commerce of the Philippines Executive Director Robert M. Sears, for his part, called on the President to consider earlier recommendations on luring investments.

Mr. Sears, in a letter addressed to Executive Secretary Eduardo R. Ermita dated June 30, 2009 and made available to BusinessWorld yesterday, reiterated recommendations that include "passing reform legislation" and "building modern infrastructure faster," among others.

"[And] we encourage more aggressive removal of obstacles to competitiveness...," he said.

The Filipino groups went on to offer views on how the President should address the House’s plans for charter change.

"We expect her to give a review of her performance but doesn’t mean as much to us as a statement to relinquish power and not allow amendments to the constitution before June 30, 2010 [when her term ends]," Makati Business Club Executive Director Alberto A. Lim said.

New choppers for Air Force by 2010

Zaff Solmerin
Business Mirror

WITH an approved budget of P3.2 billion, President Arroyo has ordered defense and military officials to hasten the acquisition of brand-new combat helicopters so that these would be delivered before she steps down in 2010.

Antonio Romero, defense undersecretary for finance and military affairs, told reporters that the Department of National Defense is just waiting for the final decision of the Air Force on which aircraft to buy.

“The ball is now in the hands of the Air Force because the President wants the helicopters to be delivered before her term ends,” Romero said.

Romero said the Air Force had been given three options to consider and should be within the bound of the approved budget: retain the technical specifications of the aircraft, reduce the number of aircrafts with change of specifications particularly the payload capacity, or buy second-hand aircraft.

But if the technical specifications would be changed, this needs the approval of Defense Secretary Gilbert Teodoro and if the option is to purchase refurbished units, this should be approved by the President.

However, the last two options seemed unacceptable to the President since she wants brand-new attack helicopters, Romero said.

He said the Air Force has given the choice to either buy MG-530, the upgraded version of the current MG-520 already in use by the military, or the Super Cobra attack helicopters used by US forces in Iraq and Afghanistan.

“I cannot give you for now details about the specifications of a Super Cobra but I can assure you this is a very powerful attack aircraft with multiple weapons,” Romero said.

If the Air Force opts for the Super Cobra, Romero said the approved budget is good only for four to six units, while if the MG-530 were chosen, 12 can be purchased.

The new attack helicopters were supposed to have been delivered last year but the acquisition was temporarily shelved by Teodoro in 2008 after a fact-finding committee found merits on the complaint of anomalous bidding by a losing bidder in the P1.2 billion six night-capable attack helicopters.

Romero was among those investigated in connection with the anomalous bidding.

PNOC-EC remits P1B to Philippine government

Paul Anthony A. Isla
Business Mirror

PUBLICLY listed Philippine National Oil Co.-Exploration Corp. (PNOC-EC) on Thursday remitted dividends amounting to P1.002 billion to the government.

Jacinto Paras, PNOC-EC chairman, said the P1.002-billion worth of dividends came from the P3.05-billion net income his company incurred in 2008, which is the highest income attained since the company’s inception in 1976.

PNOC-EC’s P3.05-billion income can be attributed to the increase in revenues from the Malampaya Project and coal operations, brought about by higher gas and coal prices in the world market.

“The turnover of the dividends to Finance Secretary Margarito Teves reflects PNOC-EC’s support to the government’s thrust of generating funds to address the budget deficit,” Paras told reporters after the turnover.

Last month, PNOC-EC has initially declared P200 million in dividends at P0.099 per share, of which P199.6 million will be paid to the government, while P421,000 will be paid to stockholders.

An additional P802 million was declared on July 22 at P0.401 per share, of which P800 million will be paid to the government P1.69 million will be paid to public stockholders on or before August 26. These values translate to a total of P1.002 billion in dividends at P0.50 per share, of which P1 billion will be paid to the government and the remaining P2.1 million to public stockholders. PNOC-EC is 99.78-percent owned by the Philippine government through PNOC.

Amid the remittance of dividends to the government, Paras said the government is still exploring the possibilities for privatizing the company.

Paras said the government will review PNOC-EC’s privatization, although he added that the sale of the government corporation will ultimately depend on market condition. “There is also no final mode of privatization yet,” Paras said.

Teves, for his part, noted that the government would still like to privatize PNOC-EC within the year. “The timing could change within the year, it may not exactly be September or it could be later. However, our direction is towards selling off our 40-percent share of PNOC-EC, and we will also have to consider market conditions and price,” he said.

Teves noted that the government expects to generate between P10 billion and P11 billion from the sale of PNOC-EC. “There are [takers] though something will come out definitely once we provide the details such as bidding documents, terms of agreement and so on,” Teves said.

San Miguel eyes more toll roads

Miguel Camus
Business Mirror

San Miguel Corp. (SMC) is eyeing more partnerships with the Consunji-led DMCI Holdings Inc. after the two companies signed an agreement for SMC to participate in the consortium building the P15-billion Tarlac-Pangasinan-La Union Toll Expressway project.

At the sidelines of the company’s shareholders’ meeting on Thursday, SMC president Ramon Ang said the conglomerate is exploring other Northern Luzon road projects with DMCI, mentioning a plan to build a road connecting Nueva Ecija to Cagayan Valley, as well as another project connecting Rosario, La Union, to Laoag City in the Ilocos region.

“And we are looking at other opportunities to work with the Consunjis for toll-way projects,” said Ang, adding that the company is currently studying these various proposals.

SMC signed early this week an agreement to invest in Private Infrastructure Development Corp. (PIDC), the group currently developing the Tarlac-Pangasinan-La Union Toll Expressway set to be completed in 2012. PIDC is currently led by DMCI Holdings along with other construction companies.

SMC, which eventually plans to own a majority stake in PIDC, said the group will serve as the toll-way vehicle for the almost 120-year-old conglomerate.

The past two years for SMC were defined as a period of aggressive expansion into high-growth industries like oil refining, power generation and telecommunications. The firm is also eyeing the bulk water services industry through the $1-billion Laiban Dam in Tanay, Rizal.

SMC has recently been taking heavy flak for its aggressive venturing outside its core business, leading some to speculate that the conglomerate is planning to leave the food-and-beverage industry, but the firm’s top official assured may still be a long way off.

“We will not be out of our core business for as long as I am chairman of San Miguel,” Eduardo Cojuangco Jr. told reporters during the same event yesterday. “In fact, I think we will be more competitive in our food business.”

“For the food business, the best [return] we can get is 6 percent. Now, with 6 percent, will shareholders be forevermore happy with this?” asked the 74-year-old company head. “Now, in these things we are getting into, it will not go under 12 percent [return], so it’s double already right there.”

“Our diversification has already been successful,” said Ang.

Still, SMC shareholders on Thursday voted in favor of an exchange offer to convert 1.1 billion common shares to Series 1 preferred shares, which will carry no voting rights and are nonconvertible. SMC said this is meant to appease investors worried over their diversification strategy.

SMC reported a net income of P19.3 billion last year, or a 124-percent increase as compared to the 2007 income. Removing nonrecurring gains, however, SMC’s profit amounted to P7.22 billion, 4 percent more than in 2007.

SMC net income this year jumped 25 percent to P2.83 billion against the first quarter of last year.

It earlier acquired the government’s P30-billion 27-percent stake in power retailer Manila Electric Co., which it will pay over three years plus interest. It has also recently acquired a P1.8-billion 32.7-percent stake in Liberty Telecoms Holdings Inc. and is planning to launch a tender offer after working out management details with partner Qatar Telecom.

The company is also looking to complete a deal in the coming months for the acquisition of a major stake in another telecommunications company under rehabilitation, Express Telecommunications Co. It also maintains an option to buy a majority stake in local oil refiner Petron Corp.

SMC also said it is interested in entering the lucrative mining sector.

Thursday, 23 July 2009

Cebu Pacific to invest $1B

Airline to get 17 more planes
By Doris Dumlao
Philippine Daily Inquirer

MANILA, Philippines - The Gokongweis' Cebu Pacific Air will pursue a $1-billion expansion program, which calls for the purchase of 17 new aircraft over the next five years in anticipation of robust growth in passenger traffic.

CEB president Lance Gokongwei said yesterday in a briefing that the airline carried about 4.4 million passengers in the first half of the year, up 30 percent from the same period last year.

By the end of the year, the number is expected to hit nine million and further increase to 15 million by 2013.

Gokongwei said CEB, which operates 21 brand-new aircraft from the A320 family with an average fleet age of only 1.9 years, remained one of the fastest-growing carriers in Asia Pacific.

In 2008, passenger growth was at 23 percent.

“The markets continue to be strong. There continues to be strong demand from domestic tourism. There are some international destinations affected by A(H1N1) scare, primarily North Asia, although we feel [the effect] has diminished a little bit,” he said yesterday on the sidelines of the first anniversary celebration of CEB’s operations at Ninoy Aquino International Airport terminal 3.

“On the domestic side, profit growth has been good but there’s still a price war, so absolute price yields are down substantially,” he said.

The increase in passenger traffic in the first semester resulted in at least a 20-percent growth in revenue, Gokongwei estimated. He said the airline thus remained profitable in the first half and would likely remain profitable until the end of the year.

However, Gokongwei said business would likely be tougher in the second half because of three reasons: The onset of rainy season (which reduces appetite to travel), the dampening impact of rising oil prices on the cost side and the decline in fares (due to excess capacity).

About 85 percent of the 14-year-old airline’s refleeting cost would come from new borrowings.

On the international side, Gokongwei said CEB has a pending application to fly to Brunei and was considering other destinations, like Australia as well as new routes in Japan.

Molina leads RP world swimfest campaign

June Navarro
Philippine Daily Inquirer

SPEARHEADED BY OLYMPIANS AND reigning Southeast Asian Games champions, the national team gets a big boost in its build-up for the Southeast Asian Games by competing in the World Swimming Championships starting July 26 in Rome, Italy.

Beijing Olympians Miguel Molina, James Walsh and Daniel Coakley will lead the week-long RP campaign in the meet featuring entries from 150 countries.

Swimming chief Mark Joseph said the competition is easily the most prestigious event for the national tankers who are preparing for the Southeast Asian Games to be held in Laos on Dec. 9 to 18.

“We are very excited to see our swimmers race with the world’s best,” said Joseph. “This is the biggest delegation we have named to the world championships.”

Rookies Robert Walsh, Kendrick Uy and Charles Walker will join the other United States-trained swimmers in the men’s team while Marichi Gandioco and Erica Totten are expected to carry the load for the women’s squad.

A major competitiveness obstacle

Outside the Box
John Mangun
Business Mirror

During a telephone call with a group of potential investors from New York yesterday, I was asked the normal questions about the Philippines from those who are unfamiliar of what “da Pilipines” is really like.

The first question was a bit surprising as they asked what internal factors would cause major problems of political instability. I admit that I forgot what should have been the “media” answer: changing the Constitution. I know that subject is on the front page every few days, but then again, it does not seem like anyone really takes Cha-cha seriously anymore. It is almost like the topic is a mental game that the politicians play with each other that does not have any basis in day-to-day reality for normal people.

These investors asked what external factors might harm the business environment here and I, of course, mentioned the problems with the Islamic separatists in the south. But in truth, how in the world could you compare our problems with Indonesia, where they blow up a five-star hotel every couple of years? Yet Indonesia is supposedly higher on the list of countries favorable to foreign investors. Seems foolish to me.

We talked about the economy and the drivers of this economy like foreign remittances, outsourcing and the Philippines’ mineral wealth. Yet, as to be expected, the conversation kept turning back to what the greatest problems for foreign investors might be. I hope I made it clear it was not in the political arena, which seems to be what the foreigners are worried about.

Toward the end, I was asked simply what the greatest hindrance was to doing business in the Philippines. Corruption came to mind but I have done extensive business in some of our neighboring countries, and, unless you are dealing with major government contracts, corruption is quite manageable by comparison.

At the end, I said that in my humble opinion, the greatest challenge to foreign investors as well as to the average Filipino is the inefficiency of the bureaucracy of the government. And please note this: it is not the people of the bureaucracy but the system itself. You know what I mean. Why does it need to take two hours or more to get a driver’s license? Imagine what more inefficiency you face setting up and operating a multi-million-peso business.

Any large organization, public or private, must have a bureaucracy to function. But if a company like San Miguel or Ayala Corp. created and maintained the layers of bureaucratic structure as the government does, they would be unprofitable very quickly, just like the government is.

It seems as if private enterprise works to streamline and improve efficiency in its bureaucracy whereas the government thrives on making its structure more complex, tortuous, lengthy and difficult and, therefore, ultimately more expensive.

However, cost is not the main issue. Efficiency is. And an efficient system is always more cost effective. And an inefficient system, public or private, is a breeding ground for corruption.

As vital as the government bureaucracy is to the nation, improvement of the bureaucracy is a very low priority. I can remember only one instance in all the past presidential campaigns when a single candidate spoke of the bureaucracy. This was when senator Juan Ponce Enrile ran for president and spoke of the need to rationalize and bring greater professionalism to the system. The one and only time. Yet government bureaucracy is a vital and pervasive part of our lives.

Government programs to facilitate a “one-stop” approach to the handling of services provided by the bureaucracy are good and often effective. But it has been two years since the long-awaited Republic Act (RA) 9485 or the Anti-Red Tape Act of 2007 (authored by Sens. Juan Flavier, Edgardo Angara, Aquilino Pimentel, and Panfilo Lacson) became law. I wonder how much you know about this important legal stride in improving the bureaucracy. This law should be a crucial step in redefining “doing business in the Philippines.”

Yet perhaps the most important factor in improving government services and the delivery of those services is the public itself. We accept, allow and even encourage bureaucratic efficiency by our acceptance of the problem. RA 9485, if implemented well, demands that all government, not just at the national level, become more efficient and, therefore, less corrupt. However, it requires the public to help. The public must demand that government live up to the mandate of this law.

The new survey of global competitiveness again showed the Philippines is lacking against our global competitors. Yet we make this competitiveness issue seem much more overwhelming than it really is. Most of the competitiveness issues from labor inefficiencies to the government’s fiscal policies can either be adequately handled by private-sector operations or are “nonthreatening.”

But an inefficient government bureaucracy, which business must interact with on an almost daily basis, is crucial. Let’s be honest. The ‘”face” of the government is found across the counter at the Land Transportation Office and how well it handles your situation. And yes, I do remember when it used to take half a day or more to get your driver’s license. Things are better.

On a personal note, beginning next month, I will publish a weekly market update, with trading strategies based on technical analysis which gives entry prices and timing. If you would like subscription details and an example of this weekly update, now available only to members of the Portfolio Trading Program, please e-mail me.


PSE stock-market information and technical analysis tools provided by Inc. E-mail comments to

Wednesday, 22 July 2009

PGMA guest at Cebu Pacific anniversary

President Gloria Macapagal-Arroyo will be the guest of honor at the first anniversary of Cebu Pacific Air which began operations at the Ninoy Aquino International Airport Terminal 3 last year with a flight to Caticlan and has since grown to include international flights.

The President will be welcomed by Alfonso Cusi, Manila International Airport Authority (MIAA) general manager; Lance Gokongwei, CEB president/CEO and his father, CEB Chairman Emeritus John Gokongwei Jr. and Tourism Secretary Ace Durano.

Secretary Durano is expected to deliver the welcome remarks, which would narrate the impact of Terminal 3 and the international airports of the country on foreign visitors setting foot on Philippine soil.

The keynote speech will be rendered by Secretary Leandro Mendoza of the Department of Transportation and Communications, after which Durano, Mendoza, Cusi and Lance Gokongwei and his father, John, will lead the ribbon cutting to open the photo gallery featuring the country’s varied destinations.

The photos on exhibit were taken by John Chua, a creative photographer with over three decades of experience in creative photography.

The President, assisted by Secretaries Mendoza and Durano, MIAA General Manager Cusi and John and Lance Gokongwei, will honor the 36th million passenger of the Cebu Pacific with an award. (PND)

Philippine president to inaugurate new geothermal power plant

President Gloria Macapagal-Arroyo will grace tomorrow the ceremonial launching of the 458-megawatt Makban geothermal power plant to highlight the Philippines’ position as the second largest producer of geothermal energy next only to the United States.

The President will lead the Aboitiz Power Launch on Wednesday night at the NBC Tent, Fort Bonifacio Global City in Taguig City.

The MakBan geothermal plant was acquired by the Aboitiz Power Corp. (APC) last year from the implementation of reforms in the energy industry.

Among those who will welcome the President are Aboitiz Chairperson Endika Aboitiz, Aboitiz Vice Chairman Jon Ramon Aboitiz, and APC president & CEO Erramon Aboitiz.

Assisting her are Finance Secretary Margarito Teves, Energy Secretary Angelo Reyes and Energy Regulatory Commission (ERC) Chairman Zenaida Ducut.

The APC is expected to present to the President their CleanEnergy symbol of commitment for sustainable energy development.

Last year, the government-run Power Sector Assets and Liabilities Management Corp. (PSALM) turned over the 289-megawatt (MW) Tiwi and 458.53-MW Makiling-Banahaw (MakBan) geothermal power plants to APC after winning the bidding to operate the plant.

At the Tiwi-Makban geothermal power plant, 10-15 new geothermal wells are being eyed for drilling by Aboitiz Power Renewables Inc. (APRI) and Chevron Geothermal Philippines Holdings Inc. (CGPHI) within the next 3 years.

Each well is expected to produce about 7 to 8 MW of power. Exploration is expected to start by the 2nd quarter of 2010.

APC is planning to invest $150 million over the next four to five years to rehabilitate the Tiwi-Makban facilities and increase power generating capacity from 462 MW to 517 MW.

The Aboitiz group said that they are positioning themselves to be the premiere clean energy producer in the country by tapping renewable energy sources to fuel their power plants.

Aboitiz Power and its partners represent the largest private renewable energy producer in the country, with several hydro and geothermal assets in its generation portfolio. Aboitiz Power also owns the 2nd and 3rd largest distribution utilities known for their operational efficiency.

Currently, Aboitiz is operating several hydro-electric power plants in the country aside from holding electricity distribution rights in Mindanao and in the Visayas. (PND)

Palace supports full automation of 2010 polls

President Gloria Macapagal-Arroyo strongly supports the full automation of next year’s elections.

Press Secretary Cerge M. Remonde said in a press briefing in Bukidnon that Malacanang is consistent with its desire to attain poll automation and that President Arroyo has earlier reiterated that there will be elections next year.

Malacanang, he added, trusts the Supreme Court in handling controversial cases. He was referring to the recent action of the Concerned Citizens Movement asking the Supreme Court to stop the Commission on Elections from releasing payments for the automation project.

“We believe that Supreme Court knows what is best, and they know how to handle the particular issues,” he noted.

Remonde pointed out that the direction of President Arroyo’s administration is clear and that it supports the full automation of the 2010 polls.

The CCM has asked the High Court to nullify the Comelec deal with Smartmatic and Total Information Management (TIM).

It had earlier questioned the legality of the contract and requested the court to issue a temporary restraining order on the signing of the deal on July 10. Although the court did not stop the signing, it set a hearing on July 29. (PND

PGMA asks Filipinos to continue praying for former President Aquino

President Gloria Macapagal Arroyo has requested continued prayers for the health and recovery of former president Corazon Aquino who is battling cancer.

Press Secretary Cerge M. Remonde said that President Arroyo and the Palace have been continuously praying for the health of the country’s former leader. Her recovery, he said, is always included in the prayers of the Chief Executive.

Remonde made the statement after the youngest daughter of the former president, Kris Aquino, informed media that the health of Mrs. Aquino has deteriorated since she was confined to the hospital.

The 76-year old former leader was diagnosed with colon cancer early last year and had undergone a series of chemotherapy sessions and surgery.

The Aquino family has requested the public to continue praying for the former president so that her pain may be lessened. It has also expressed gratitude for the outpouring of prayers and love for Mrs. Aquino who is currently confined at the Makati Medical Center.

The former president catapulted into power three years after her husband and opposition leader Benigno “Ninoy” Aquino Jr. was assassinated in 1983. Mrs. Aquino headed the historic people power movement that toppled late dictator Ferdinand Marcos in 1986. (PND)

Farm, fisheries No. 1 job creator in the Philippines

Ira Karen Apanay And Jefferson Antiporda
Manila Times

The farm and fisheries sector created additional 412,000 jobs this year, making it the No. 1 job generator for the first quarter of 2009, according to Presidential Economic Adviser and Gov. Joey Salceda of Albay.

Salceda on Tuesday said that based on data of the Bureau of Labor and Employment Statistics, employment in the farm and fisheries sector as of April 2009 was estimated at 12.318 million, which is higher by 3.47 percent compared to 11.905 million for the same period last year.

“Philippine agriculture created more jobs than the trade sector, which only ranked second with 345,000 jobs,” he added. “This proves that the Arroyo government’s decision to reverse 30 years of official neglect of the agriculture sector through sustained, higher public investments is now reaping positive results.”

Agriculture Secretary Arthur Yap said that the increased spending for agriculture “has proved to be timely and effective.”

Yap added that focusing on irrigation and other rural infrastructure has already yielded positive results with palay or unhusked rice production expanding by 5.1 percent or double its average growth a year ago.

He said that rehabilitation and restoration work of the National Irrigation Administration (NIA) has allowed farmers to plant an additional 69,000 hectares of farmland or 5.7 percent more than last year.

“Such gains were the result of President Gloria Arroyo’s increased spending on agriculture, P25.36 billion in 2007, P35.39 billion in 2008 and P46.86 billion this year,” Yap added.

More stimulus

Salceda has recommended to the government to pour more “stimulus funds” into Philippine agriculture, particularly into irrigation, to sustain the sector’s resilience and its status as a primary growth driver even in the midst of a global financial contagion.

“Without the agriculture growth contribution, GDP [gross domestic product] would have been sub-zero. Despite the obvious odds, its 2.1-percent increase in gross value added may not be stellar but it was the highest among the sectors which best proves the logic of government budgetary stimulus, specifically to the Department of Agriculture,’’ he said.

GDP, a key economic indicator, is the total cost of all goods and services produced in a country in a year.

He added that the Department of Agriculture’s policies in the last two years have enabled the agriculture sector, which accounts for 20 percent of the economy, to remain resilient while every other sector had gone into a slump.

From 2001, the start of the Arroyo presidency, to the present, the government was able to generate a total of 8.95 million jobs in the private sector and at least 12 million jobs were created through government projects, according to the Department of Labor and Employment (DOLE).

Also, the department said in a statement, it was able to give jobs to at least 7.78 million individuals who have sought its assistance.

“This only shows that President Gloria Arroyo was able to fulfill her promise . . . and whatever type of assessment [is to be] made by anyone, the DOLE data on job generation can’t be contested,” Assistant Secretary Reydaluz Conferido said during the weekly Kapihan ng Bayan news forum in Quezon City.


Agreeing with Salceda

The research group agreed with Salceda that the largest number of jobs created was in the agriculture sector, which registered a 408,000 increase (not 412,000, according to Salceda) in jobs but saw year-on-year growth in production falling 0.7 percentage points in the first quarter of 2009 from the same period last year.

“Clearly, even the surprisingly large job creation in April 2009 from the year before was not enough to increase household incomes and corresponding consumption—highlighting the need for genuine policies that will create sufficient and quality jobs, beyond government’s token measures like supposed emergency programs and job fairs,” it said.

San Miguel Corp takes driver’s seat in road project

By Jenniffer B. Austria
With AFP
Manila Standard

FOOD and beverage giant San Miguel Corp. said yesterday it will take a “significant” stake in a P15-billion toll road project as it diversifies beyond its core brewing business.

Listed San Miguel told the Philippine Stock Exchange it signed a non-binding agreement to acquire a significant stake in Private Infrastructure Development Corp., the consortium behind the Tarlac-Pangasinan-La Union Toll Expressway project.

The partners in the 88-kilometer toll road were all construction firms, and the final agreement would be subject to government approval, San Miguel said without giving other details.

“This is in line with our diversification plans and we’re happy to be a catalyst for the infrastructure needs of the country,” said San Miguel president and chief operating officer Ramon Ang.

“The North to Central Luzon stretch is a potentially dynamic industrial corridor and the proposed expressway will make it easier and more cost-effective to move goods and people from one point of Luzon to another,” Ang said.

“As a food and beverage conglomerate with one of the most developed distribution networks in the country, we have a strong interest in making it happen.”

Under the plan, the 88-kilometer expressway will extend from La Paz, Tarlac, to Rosario to La Union. The expressway is expected cut by half the travel time to Baguio from Manila.

Informed sources said San Miguel wanted a 49-percent stake in the consortium, with an option to go up to 51 percent.

DMCI Holdings Inc. now has 34-percent equity stake in the consortium.

Lopez-owned First Balfour Inc. also owns 34 percent but assigned its option to participate in the project to Metro Pacific Investments Corp. when the group sold its tollways business to Metro Pacific.

The other members of the consortium are EEI Corp., R.D. Policarpio and Co. Inc., D.M. Wenceslao and Associates Inc., J.V. Angeles Construction, J.E. Manalo and Co. Inc., New Kanlaon Construction Inc. and Rockford Development.

Metro Pacific earlier said that it might only join one leg of the expressway project since initial studies showed it wsa only financially viable from Capas, Tarlac, to Gerona, and that there wsa not much traffic from Gerona to Rosario, La Union.

Construction of the Tarlac-La Union expressway is scheduled from 2009 until 2013. The consortium is now talking to banks and other financial institutions to help raise funds to finance the project.

The winning consortium will invest P13 billion in the project while the Public Works Department will finance the remaining P2 billion, mainly for right-of-way.

In the past year, San Miguel has also taken a significant stake in Manila Electric Co. and oil refiner Petron Corp., and is now in venturing into telecommunications with Qatar Telecom into as part of its diversification.

San Miguel also said it was interested in acquiring the Philippine and regional operations of Dole Food Co., the world’s largest fruit and vegetable producer.

“We confirm that the company is interested in Dole Food Co. and its other units in the Asia-Pacific region,” San Miguel said.

Philippines' SM looks to China to fuel further growth

Ian Sayson and Frank Longid
Manila Standard

BILLIONAIRE Henry Sy, whose retail empire has made him the richest man in the Philippines, may build as many as three malls a year in China to expand in the first major economy to rebound from the global recession.

“We have 34 malls in the Philippines and China is a market that’s 13 times bigger” by population, said Hans Sy, president of SM Prime Holdings Inc., a unit of his father’s SM Investments Corp. SM Prime, the country’s biggest mall operator, is spending P5.5 billion this year in China.

SM Investments, whose 63-percent share-price gain this year has outperformed the Philippine benchmark, is increasing capital spending for 2009 by almost a third. Expanding in China, the world’s most populous country, might help open opportunities for the family’s other businesses, said Teresita Sy-Coson, Henry Sy’s eldest child and vice-chairman at SM Investments.

“The malls will be an excellent outpost for the group,” said Alex Pomento, Philippine strategist at Macquarie Group.

“They get a gauge of China’s consumer pulse and a springboard for the group’s other businesses.”

SM Prime planned to open one mall a year in China starting 2010 and might accelerate that pace to as many as three shopping centers annually by 2013, Hans Sy said.

Many Chinese provincial officials had visited the Philippines and they saw what we are doing here, and they wanted to replicate that, ‘‘Sy-Coson said.

‘‘Even now there are invitations from provincial officials to go into their areas.’’

Henry Sy, 84, immigrated from China at the age of 12 and built the country’s fourth-biggest listed company from a shoe store he started in 1948, amassing a net worth estimated by Forbes magazine at $2.7 billion.

SM Investments, whose assets include Banco de Oro and the SM supermarket and department store chain, forecasts profit will grow between 12 percent and 14 percent this year, chief financial officer Jose Sio said.

The company kept its target even after the government cut the low end of its economic growth forecast from 3.1 percent to 0.8 percent, the weakest since 1998. Funds sent home by overseas Filipinos were sustaining consumer spending at SM-branded shops and malls, Sy-Coson said.

Remittances, which account for 10 percent of the Philippine economy, grew 2.8 percent to $6.98 billion in the first five months from a year ago. The inflows reached a record $16.4 billion in 2008, 11 times the country’s total net foreign direct investment, and it is forecast to hit the same level this year.

About 20 percent of the consumer spending passes through SM Investments’ malls and stores, and the company captures 33 cents of every dollar spent by families of Filipinos working abroad, according to Macquarie’s Pomento.

SM Prime sought to boost the share of its spending in China as it acquires more sites for expansion, Sio said. This year’s investment in China is 46 percent of the P12 billion SM Prime will spend on expansion.

China’s $3.21-trillion economy is 22 times the Philippines’ $144 billion. China’s economic growth accelerated to 7.9 percent in the second quarter, while the Philippines’ slowed to 0.4 percent in the first quarter, the weakest in a decade.

“China has a big consumer market, it will continue to evolve,” Henry Sy said in an interview, which was also attended by Sy-Coson, Sio and Hans Sy.

‘‘It has improved and can do things better than other countries,’’ said Sy, who started selling rice, sardines and soap at his father’s Manila store in 1936.

SM Prime doesn’t sell retail space, preferring long-term recurring rental income to short-term gains, and will apply the same principle in China, said Hans Sy. SM Prime would focus on the mainland’s emerging cities because their development and consumers’ profiles closely resemble those at home, he added. Bloomberg

US architects, designers seek Philippine partners

Manila Bulletin

American architectural and design firms are looking for strategic partnership with local developers and architects to complement its huge integrated property development in China in the Philippines.

Susan Barlin, Malacanang special envoy on tourism and CEO of BIG International, has put together about 30 world renown architects in the U.S. to undertake the huge property development in China.

According to Barlin, the first development they would undertake is a 400-hectare property in Hebei, China into a self-contained city. The project is in collaboration with the local government of Hebei province.

Barlin stressed the need to tap well-established and prestigious architectural firms in the US to lend credence to the local development into the international market.

“The concept can easily be copied if the developer has no relationship with renowned architects. If the project has the right partner then it can easily be positioned in the world map,” Barlin said.

“It’s not about how rich but the confidence, but the smooth processes that arise when you collaborate and forge strategic partnerships with the world class because that woutd pave the way for faster alliances. It is very difficult to start from the scratch,” she pointed out.

Barlin said there are ideal places in the country that can be developed into a world class self-contained city.

BIG International is also doing the same strategic alliances for property developments in Hungary, Samoa and various cities in Latin America, which are all promoting themselves as retirement havens.

“We are looking for a local developer that we can collaborate with to replicate our China project in the Philippines,” Barlin said.

Under the plan, the project would be promoted on a membership basis wherein investors in each development would be entitled to the amenities being offered in the other project and vice-versa.

‘Underperformance’ criticized anew by BSP

P. L. G. Montecillo with a report from A. D. B. Romero

UNDERSPENDING by the government came under fire again yesterday, with the Bangko Sentral ng Pilipinas criticizing weak state efforts as dulling monetary interventions aimed at propping up the economy.

The lack of fiscal responses from the government, a central bank official said, has prompted investors to demand higher risk premiums for public debt papers and led to higher lending rates for consumers.

"Monetary policy can only do so much ... we cannot do anything about risk aversion," BSP Assistant Governor Cyd N. Tuaño-Amador told reporters.

Her remarks came a day after the government announced that it had kept its first half budget shortfall within target at P153.4 billion. Along with this, however, were missed revenue targets and below-target expenditures.

Government officials said spending, particularly for infrastructure, had improved significantly and the Budget department said it was preparing a 2010 budget that would focus on preparing the country for a global economic recovery.

Final figures are still be being determined, Budget Secretary Rolando G. Andaya, Jr. said on Monday, but he added stimulus spending could be higher than the P160 billion which is part of an overall P330-billion Economic Resiliency Plan.

The BSP, among other responses, has cut its key overnight borrowing rate by a total of 200 basis points since December of last year. The move aims to discourage banks from keeping money with the BSP and instead lend to the public. Clients, meanwhile, will be encouraged to borrow from banks via lowered interest rates.

"But that doesn’t happen because risk premiums are on the rise, so the transmission of lower rates is harder," Ms. Tuaño-Amador said.

The BSP has said only around 40% of its policy cuts have been passed on in the form of reduced lending rates, a claim she reiterated yesterday. "That means the pass-through of the BSP’s policy rates is not complete," Ms. Tuaño-Amador said.

A slowing economy has prompted the government to cut its growth forecast for the year to just 0.8-1.8% from 3.1-4.1%. It also raised its deficit cap to P250 billion, noting the need to pump-prime the economy.

State revenues for the first half totalled P545.7 billion, below the target of P581.4 billion, while expenditures hit P699.1 billion, short of the programmed P736.5 billion.

"News like the [government’s] underperformance — that’s a dampener for growth and that will impact risk aversion," Ms. Tuaño-Amador said.

Declining revenues have forced the government to issue more debt papers, the last being last week’s $750-million global bond issue. The supply of government debt in the market has lead to higher rates and investors have also demanded better yields from what they perceive as risky holdings, Ms. Tuaño-Amador said.

In last week’s auction last week, the yield on the 91-day Treasury bill, used by banks in pricing loans, climbed to 4.5% from 4.954% previously.

Ms. Tuaño-Amador said the BSP could do little to offset the government’s fiscal slack.

"It’s not our responsibility," she said. "We will react on the basis of the inflation outlook."

Devt Bank of the Philippines expands flagship Roro project to include northeastern Luzon

Erik de la Cruz
Business Mirror

STATE-owned Development Bank of the Philippines (DBP) has expanded the coverage of its flagship project, the Sustainable Logistics Development Program, by extending a P64.7-million loan to a company that will acquire two ferry vessels for the roll-on, roll-off (Roro) service in northeastern Luzon.

DBP, in a statement, said it signed the loan agreement with Northeastern Luzon Pacific Coastal Service Inc. (NLPCSI) last week.

The company will purchase ferry vessels that will serve the provinces of Cagayan, Isabela and Aurora.

The vessels will provide an affordable, reliable and convenient mode of transporting passengers, agricultural and marine products from coastal towns and to mainland markets, the bank said.

DBP president and chief executive officer Reynaldo David said the opening of this missionary route will improve economic conditions and harness the tourism potential of northeastern Luzon, subsequently generating more employment opportunities for residents, particularly of coastal towns, in the area.

According to NLPCSI president and chief executive officer Jose Mari Ponce, who is also administrator of the Cagayan Economic Zone Authority, the DBP-financed initiative will link two economic zones—the Aurora Economic Zone and the Cagayan Free Port.

The bank’s flagship project aims to modernize the country’s infrastructure and logistics system for the efficient transport of passengers and basic commodities.

The Road Roll-On, Roll-Off Terminal System (RRTS) is a component of such project.

In May, David said the bank was evaluating 41 RRTS projects worth P5.86 billion.

The bank has identified 20 new missionary Roro routes, but only nine have so far been made operational through DBP financing.

The government aims to establish 49 Roro routes under its Strong Republic Nautical Highway project.

A new route which connects the town of Pasacao in Camarines Sur to Masbate and Romblon was recently made operational through DBP financing.

The bank was also planning to acquire a Roro vessel that will ply the Calbayog, Northern Samar-Kawayan, Biliran route.

This would cut down travel time to Cebu City from Calbayog by more than two hours, it said.

P7-B ADB-funded Philippine infrastructure project goes full blast

Jonathan L. Mayuga
Business Mirror

ABOUT 779 of the poorest towns in the country are set to benefit from the massive infrastructure buildup of farm-to-market roads, community-owned irrigation systems and potable-water systems.

The Department of Agriculture (DA) has targeted the poorest communities in 41 provinces from Southern Tagalog, Bicol, Eastern Visayas and Mindanao.

The project, called Infrastructure for Rural Productivity Enhancement Sector (Infres), was funded with a $150-million (roughly P7 billion) supervised loan from the Asian Development Bank (ADB), plus counterpart funding by the national government and local government partners.

In a report to President Arroyo and Agriculture Secretary Arthur Yap, undersecretary for field operations and Infres project director Jesus Emmanuel Paras said as of the end of May this year, the physical infrastructure component of the project was 60-percent complete.

Of the targeted 1,478 kilometers of farm-to-market roads, 1,034 kilometers are either finished or in final stages of completion, representing 70 percent. Out of a target of building 2,305 hectares of community-owned irrigation systems, 1,454 hectares are now irrigated for a completion rate of 63 percent, while 18 out of the targeted 37 potable-water systems have been built, representing 49 percent.

The two other components of the project include capability building of local government units, beneficiary communities, nongovernment organizations, people’s organizations and the DA, and project management coordination that facilitates project implementation.

The bulk of the funding, Paras said, went into the roads, irrigation systems and potable-water systems which got $109 million from the ADB, the national government and local governments.

In all, Paras reported, 148 contract packages were awarded. Of these, 47 have been completed and 99 are in full blast. Released funds have totaled P998,885,842 or roughly one-seventh of the total loan. Three-fourths of the released fund has been liquidated.

Paras said all of the projects were closely monitored through consultation visits by DA regional field units whose technical staff helped local governments fix engineering, financial and other concerns.

Tuesday, 21 July 2009

3,000 Philippine govt. workers to benefit from new housing project

Close to 3,000 government workers stand to benefit from the government housing project within the New Bilibid Prison reservation in Muntinlupa following its groundbreaking this morning by President Gloria Macapagal Arroyo and Vice President Noli de Castro.

The new socialized housing project on the 41-hectare gently rolling property will be offered to employees of Office of the President, Department of Environment and Natural Resources, the Department of Justice and its attached agency the Bureau of Correctional and the City of Muntinlupa.

Property developer, R-II Builders represented by its chairman Reghis Romero III and president/CEO Pol T. Sanchez were among those who witnessed the ground breaking and laying of the time capsule officially marking the start of project development.

Romero said the developers have one year, from today, to finish the development of the property, the construction and selling of the housing units that the company builds. R-II is tasked with the first phase of development in 16.76 hectares covering 1,495 units.

Before the President arrived, Vice President de Castro instructed the housing agencies under him—the Housing and Urban Development Coordinating Council, the Philippine Home Mortgage Finance Corp., PagIbig and the National Housing Authority—to offer the houses and lots to all other government employees if these are not taken by priority clients.

“Offer the houses and lots built to other government employees after four months that the OP, DENR, DOJ, the Bureau of Correctional and the City of Muntinlupa will not buy the units through their PagIbig Fund contributions,” the VP told developers RII Builders and its counterpart, the Baque Corporation which will develop 1,491 units in Phase 2 of the property. (PND)

Metro Pacific readies Philippine expressway projects

Jeremiah F. de Guzman
Business World

METRO PACIFIC Tollways Corp. is pushing through with a P36-billion, five-year plan to build roads to make the North Luzon Expressway (NLEx) more accessible to motorists and eventually connect it to the South Luzon Expressway (SLEx).

The infrastructure subsidiary of Metro Pacific Investments Corp. identified P28 billion worth of projects, starting with P2.1 billion for a road that will connect the NLEx to Mindanao Ave. in Quezon City, known as NLEx Segment 8.1.

Ramoncito S. Fernandez, president and chief executive officer of Metro Pacific Tollways, said funding for the road construction was raised through a loan from the Philippine National Bank, around P500 million of which has already been drawn.

The NLEx Segment 8.1 project, which is a two-lane, 2.7-kilometer expressway, started construction last April and will be completed by April of next year, company executives had said.

Mr. Fernandez also said a road project that would connect the NLEx to Manila’s port area was in the pipeline, with a budget of around P10 billion.

A road will be constructed to connect the NLEx to the C3 train station, which is operated and owned by state-led Philippine National Railways (PNR). Another road will be built up to the port area.

Around P16 billion has also been allotted for the construction of an elevated tollway over PNR’s right of way between its C3 and Buendia stations.

Mr. Fernandez said the construction of the "skyway" connecting the NLEx to SLEx would take two to three years, while the tollway connecting the NLEx to the port area is a five-year program.

Funding for the projects will be raised from overseas development assistance or private funds, he said.

Mr. Fernandez declined to disclose other components of the P36-billion plan.

Mr. Fernandez described the first-half financial performance of Metro Pacific Tollways as good.

"We are doing well in both revenues and profits," he said.

Metro Pacific Tollways, formerly First Philippine Infrastructure, Inc., reported a net income of P312 million in the first quarter with P309 million attributable to parent company Metro Pacific Investments.

Subic is new hub of US-based cargo forwarder Atlas

Henry Empeño
Business Mirror

SUBIC BAY FREE PORT—Atlas Shippers International Inc., one of the leading door-to-door cargo forwarders in the country today, has signed up as a business locator in this free port, setting up a new distribution hub here for balikbayan boxes sent from abroad.

Atlas used the port of Subic as an entry point for the first time on Thursday, officially marking the US-based firm’s intent to establish its hub for Northern Luzon operations here.

The first cargo, a 40-foot cargo container that held 420 balikbayan boxes, took off from the Atlas branch in Covina, California, on June 24 and arrived here on July 15.

Atlas president Joel Longares said they decided to locate in Subic to take advantage of tax incentives in this free port, as well as lower tariff rates compared with charges at the Port of Manila, complete support facilities and infrastructures, faster document processing, and strategic location made more accessible by the Subic-Clark-Tarlac Expressway (SCTEx).

Longares said the first container to arrive through the port of Subic will be a test run to determine the viability of this port as the sole discharging point for Luzon.

“We’ll have to determine if we could save money this way,” said Longares, explaining that boxes for delivery to Southern Luzon will be trucked from Subic to their hub in Las Piñas City.

Longares also predicted that other shipping lines and cargo handlers may follow suit.

“It’s only a matter of time before the others locate here,” he said. “Aggressive marketing is just what the Subic free port needs [to attract other shippers].”

Longares said the company’s cargo load, which come from branches in Australia, Hong Kong, Italy and the United States, is expected to peak at about 30 containers per month.

With this projection, Atlas will hire about 50 employees for its Subic hub, where they will also install cargo-sorting equipment.

With Subic as their hub of operations, Longares said he expects the company to grow significantly and even expand to service outbound cargoes.

The company’s warehouse in Las Piñas will be maintained for their Southern Luzon operations, he said.

Meanwhile, Subic Bay Metropolitan Authority (SBMA) Administrator Armand Arreza noted that the business sector is now taking notice of the advantages of using the port of Subic, which boasts of two container terminals with a combined capacity of 600,000 ten-foot equivalent units.

“This is a small beginning towards greater things to come,” said Arreza, referring to the Atlas decision to use the port of Subic.

He said the SBMA’s efforts to promote Subic Bay as a maritime gateway for Luzon and a prime logistics hub for Southeast Asia is now really paying off.

They’re trying to kill the Philippines!

Outside the Box
John Mangun
Business Mirror

Twenty years ago, the local press touted stories of how the US government and particularly the US Central Intelligence Agency were involved in a series of continuing efforts to influence, if not undermine, the Philippines. Looking back, that paranoia was probably justified at least to a certain extent.

The Philippines prevailing against the pressure is best illustrated by the cancellation of the bases agreement which turned over Clark and Subic to the Philippines. Of course, we might argue whether the Philippines maximized the potential of those two properties in the last 18 years. But that is beside the point. The Philippines decided to chart its own destiny on the bases and that is undoubtedly a good thing.

For some reason, as I have said so many times before, there seems to be a need in the Western institutions to tell the Philippines what should be done, how Filipinos should be running and managing the country.

No matter which nation comparable to the Philippines in size and economy that I look at, I cannot find examples of this pervasive “advice- giving” that the Philippines receives.

Maybe it is because of the Philippines’ recent colonial past under American rule. Perhaps it would have been better, at least from gaining the world’s respect, if the colonizers had been forced to leave at gunpoint as from so many other nations, rather than with a ceremony and a Philippine flag-raising. Maybe the Philippines would be more respected if, upon independence, the nation had disintegrated into a civil war like India, Vietnam and to a lesser extent China, after the World War II occupation by Japan ended. 

However, whatever the cause, I am convinced that no other nation is subjected to the large amount of “expert” advice as the Philippines is, and most of that advice is simply bad, sometimes, very bad.

It is as if they are trying to kill the Philippines.

Last week, the World Bank strongly suggested that that government raise taxes on oil products. This suggestion was justified by the World Bank as a method to increase government income as “plunging revenues could ‘jeopardize’ a government-spending package aimed at boosting growth.” I could be diplomatic like Economic Planning Secretary Ralph Recto when he said in a statement that “raising taxes on oil products isn’t an immediate priority for the government.” But instead I will describe the idea exactly as it should be described: absolutely brain-dead.

Raising government taxes on oil products at this time would guarantee a disaster for this economy. The World Bank “suggestion” again shows, no, proves, that they have no understanding of this economy. Further, it proves that the World Bank is committed to making sure that the free market in the Philippines is killed.

The Philippine economy has always been able to maintain a well-balanced level between supply of products and demand for those products to keep prices stable and inflation low. Therefore, our inflation is determined by external factors like high world oil prices. Now that oil prices are way down, our inflation problem is almost non-existent. So here comes the World Bank telling the government to create inflation. That is not a great pro-poor, pro-everybody policy.

Further, the socialist, big-government policies of the World Bank want you to give your money to the government through higher taxes and then the government will use your money through a “government spending package aimed at boosting growth.” Now raise your hand if you think the government can spend your hard-earned money with more efficiency, less waste, and spend it more productively than you can.

Institutions like the World Bank hate countries like the Philippines and people like Filipinos that do not rely on big government for economic survival and prosperity. You see, in fact, they believe that you are just too stupid to make financial decisions yourself and you need them, the government, to spend your money “wisely.”

There are many, many types of foreign intervention that is not healthy for this country or this economy. Take the environment movement. Several prominent politicians are high on the “save the planet” crusade. Their speeches accurately imitate the worst nonsense from the West. They scream and shout about how the Philippines must join the global-warming hysteria while ignoring the fact that India and China, both 10 times larger than the Philippines, both disregard the bad environment policies of
the “First World.” If these politicians really want to “save the planet,” perhaps they should start with Metro Manila. The biggest, most immediate, costly environment problem in the National Capital Region is flooding.

Last week the economy lost tens of millions of pesos worth in lost productivity because of the rains. Certain legislators want to spend hundreds of millions of your pesos on “renewable energy.” Congress wastes its time and your money on windmills while children drown and infrastructure is damaged from a flooding problem that has never been adequately addressed. Why?

Because it is so easy to get advice and sometimes money from organizations like the World Bank to solve problems that they think are important, regardless if it has nothing to do with the daily lives of Filipinos.

The more we listen to the advice of “experts” and institutions which care nothing about this country or its people, the more time and effort we lose for truly solving our problems.

On a personal note, beginning next month, I will publish a weekly market update, with trading strategies based on technical analysis which gives entry prices and timing. If you would like subscription details and an example of this weekly update, now available only to members of the Portfolio Trading Program, please e-mail me.

PSE stock-market information and technical-analysis tools were provided by Inc. E-mail comments to

McCann scores big at Tambuli Awards

Business Mirror

Bringing home a sparkling array of gold, silvers, bronzes and platinum, McCann Worldgroup Philippines emerged as the biggest winner at the UA&P’s Tambuli Awards held on July 10. Highlight of the victory was the agency scoring the prestigious Carmencita Esteban Platinum Award, and bagging the Effectiveness Agency of the Year trophy.

The Carmencita Esteban Platinum Award is the highest distinction given in the competition, awarded to the campaign that has “effectively achieved integration demonstrated by a remarkable advancement in business performance while at the same time espousing a genuine commitment to social goals.” McCann Erickson and Coca-Cola bagged this much-coveted prize for Coke’s “Family Bonding on the Coke Side of Life.” This earned McCann Erickson’s Effectiveness Agency of the Year trophy. Coca-Cola, one of McCann’s biggest clients, was named the Effectiveness Advertiser of the Year.

In addition to the two top honors, McCann Erickson scored a variety of accolades for effective campaigns from its roster of big-brand clientele: a gold for Most Effective Family-Oriented Brand Campaign for Coca-Cola’s “Family Bonding on the Coke Side of Life”; a silver for Most Effective Teens Brand Campaign for “iamninoy”; two bronzes, one for Best Insight and Strategic Thinking category, for Biogesic’s “Ingat” and another for Best Innovative and Integrated Media Campaign for Skelan’s “Ayos na ang Buto-Buto.”

Universal McCann, the agency’s media arm, also won a bronze for Best Innovative and Integrated Media Campaign for Jollibee’s “Jollitown” and two silvers for two categories for J&J’s “Botelya”—one for Most Effective Family-Oriented Brand Campaign and another for Best Small-Budget Product Brand Campaign.

Nandy Villar, McCann Erickson’s managing director, is jubilant over the triumph: “The Tambuli Awards is a truly meaningful recognition, and we thank the judges for giving us this honor. While most advertising awards focus on creativity, the Tambuli Awards put as much emphasis on business results as it does to positive values. In that sense, it awards campaigns that are good for business and society.”

Monday, 20 July 2009

Philippine Gov’t set to propose 136 infrastructure projects for P15-billion Japanese loan


THE GOVERNMENT has identified 136 infrastructure projects to be proposed for funding by a P15-billion official development assistance (ODA) package from the Japan International Cooperation Agency (JICA).

Development Bank of the Philippines (DBP) President and Chief Executive Officer Reynaldo G. David said that the loan package, signed in Japan during President Gloria M. Arroyo’s visit last month, is intended for the so-called logistics infrastructure development project to be executed by the DBP.

“To be funded are critical infrastructure projects such as ports and farm-to-market roads,” he told reporters in Malacañang last week.

He said the $308-million loan, or about P15.4 billion, should be utilized efficiently so the Philippines can secure additional loans from JICA.

The logistics infrastructure development project is an investment financing facility that can be accessed by private corporations, government-owned and controlled corporations and local government units mainly to finance infrastructure and support systems for the so-called Strong Republic Nautical Highway program, particularly access/toll roads, bulk grains highways, and cold chain facility network.

The loan program, to be implemented from 2009-2014, has a maturity of 30 years, inclusive of a 10-year grace period at 1.4% interest per annum.

It is part of a $456-million ODA package from JICA that is expected to help raise at least 53,000 new jobs for Filipinos.

The other program under the same package, worth $148 million, will be used to fund the agricultural credit support project to be executed by the Land Bank of the Philippines, the Palace had earlier announced. This project will make available short, medium and long-term funds to address the credit needs of agribusiness players.

It is expected to benefit 43,000 farmers and fishers, 220 small and medium enterprises and 30 large agribusinesses during the first five years of implementation.

It would also help finance some 43,250 sub-projects and create about 53,230 new jobs.

The government earlier said the new ODA loan packages were sourced come from a multi-billion-dollar facility that Japan has committed to provide developing Asian countries amid the global financial crisis.

Sunday, 19 July 2009

Laguindingan Airport project photo update


Philippine GDP to grow at least 4% in 2009

Manila Bulletin

The bad news: for the first time in the lifetime of most of us, the world's Gross Domestic Product will decline in 2009 as a result of the global economic crisis especially victimizing the developed nations in the world, including East Asian tigers like Japan, Singapore, Taiwan, Hong Kong and South Korea. The positive growth of 4 to 8% of emerging markets like China, India, Indonesia and the Philippines will not be enough to counteract the steep declines of as much as minus 7 to 9% of the industrial nations.

The good news is that the Philippines is one of the few countries in East Asia that will register a positive growth rate. I am willing to bet that our GDP will grow at 4% or more, despite the gloomy prognostications of some of the leading international agencies and multinational banks. The forecast of 1 to 2% coming from these international institutions have given short shrift to relatively strong performance of the agricultural sector on the income side and of private consumption expenditure on the demand side. With the focus of the stimulus package of the Government on agricultural production and countryside infrastructure, incomes in the rural areas can grow at 4% or more. With OFW remittances remaining at the same level as last year of over $16 billion, the purchasing power of the households of the OFWs will increase by some 6% as a result of the depreciation of the peso.

The marginal propensity to consume of these households is quite high. That is why private consumption expenditures will increase by at least 4 %. The foreign analysts do not fully understand the dynamics of OFWs. Filipinos overseas workers are in a category much higher in quality than the average immigrant worker from such countries as India, Mexico, Turkey, Romania, Peru, etc. My almost two years of recent residence in Spain gave me an opportunity to observe closely the exceptional qualities of Filipino immigrant workers as compared to other nationalities. They are usually in personal services that require above-average human qualities of smooth interpersonal relations such as in nursing, caregiving, waitering, customer relations, teaching, and domestic services. Not only are Filipinos well known for their very cheerful dispositions. They also practise personal hygiene that is uncommon to other cultures. Anyone who has traveled far and wide in the Philippines would know that even the poorest of the poor in this country take a bath everyday, even if they have do it in the middle of the public square, using public faucets. As a matter of fact, there are restaurants in Barcelona--where I just spent almost two years as a Visiting Professor in a business school--that employ only Filipinos as waiters.

My message to the foreign analysts is that their forecasting models do not take into account the fact that Filipino workers will be the last ones to be laid off, especially in countries whose demand for immigrant workers comes predominantly from the swelling ranks of senior citizens who now account for close to 20% of the population in almost every European country, not to mention in Japan and other Northeast Asian countries. That is why even if Filipino workers in the textile and other manufacturing industries in such countries as Taiwan and South Korea will be sent home, the number of new Filipino workers that will deployed in nursing, caregiving, teaching, and domestic services in the aging societies will at least equal if not outnumber the OFWs coming home. Even in the international shipping industries, in which Filipinos account for 25 % of the manpower, the feedback I get from the shipping companies in Manila is that the new seamen being deployed outnumber those who are being sent home as ships are being mothballed massively in such international ports as Singapore and Hong Kong.

Another reason why I think that the Philippine GDP will grow at 4% or more in 2009 is the additional stimulus that will come from the billions of pesos that the candidates for the May 2010 elections, which spending can be expected to start during this coming Holy Week and will gather steam by Christmas 2009. Considering the lead time needed for campaigning in this country, the bulk of the expenditures will actually be in 2009. Already one could notice all the pictures of potential candidates in the Metro Manila area appearing in posters containing their hearty congratulations to the students of high schools and universities graduating in March 2009. My own personal calculation of all the spending of presidential, senatorial, House of Representatives, and local officials is about 80 billion pesos.

In fact, some of my professional colleagues think that this amount is an underestimate. Be that it may, such an amount will go a long way to stimulate consumption spending just at the right time when the economy needs a boost. My advice to companies that market consumer goods and services is to be aggressive and creative in capturing all this purchasing power that will come especially from the Philippine countryside.

I am glad that our leading mall operators have spread their retailing outlets far and wide in the rural areas and are not focusing only on Metro Manila. The regions that will especially benefit from the growth of 4% or more will be Northern Luzon, Central Luzon, Southern Tagalog, Central Visayas, Northern Mindanao and Southern Mindanao. Especially benefiting from the expansion in consumer demand in the regions outside of the National Capital Region are the logistics or supply chain companies. Expect the Philippine Nautical Highway to be especially busy in 2009, not only in the transport of goods but in the increasingly buoyant domestic tourism. As they cut back on traveling abroad, many middle-income Filipinos (there is an estimate of 14 million of them) will be traveling to tourist spots in Palawan, Bohol, Negros Oriental, Southern Tagalog and other regions.

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