Paolo Luis G. Montecillo and Jhoanna Frances S. Valdez
ECONOMIC GROWTH will likely accelerate in the remaining months of the year as domestic demand continues to strengthen on the back of benign inflation and steady growth in remittances, First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) said in their joint publication, Market Call, which they released late last Wednesday.
This optimism was shared by the Congressional Planning and Budget Department (CPBD), the think tank of the House of Representatives which released its September report yesterday that showed revised, higher growth projections for the year.
FMIC and UA&P said growth in gross domestic product (GDP) will likely hit 2.5% and 4.5% in the third and fourth quarters of the year, respectively.
"Most recent economic indicators are blinking more positively, giving an impression that the ’green shoots’ noticed earlier are beginning to sprout...We remain more optimistic for GDP growth in the second half of the year," the August issue of Market Call read.
While the report was prepared before the government released the second quarter data last Aug. 27, Market Call author Victor A. Abola, economist of UA&P, said in a phone interview yesterday that they were keeping their projections.
For his part, CPBD Director-General Rodolfo V. Vicerra said his group has raised its full-year GDP growth projection to 1.1%-1.9% from the earlier 0.6%-1.8% estimate.
"With the Philippine economy narrowly escaping a technical recession [in the first half], CPBD simulations indicate a slightly more sanguine economic outlook for 2009, with full-year GDP growth reckoned to range between 1.1%-1.9%. This is an upward revision from the CPBD’s projection last May, ranging from 0.6%-1.8%," his report read.
"Our outlook is a bit more optimistic than the official target range of 0.8%-1.8% adopted by the Development Budget Coordinating Council in June [but which is expected to be raised in a meeting next week.]"
CPBD revised its projections across all sectors: services are now expected to grow by a faster 2.4%-3% from an earlier 1.5%-2.6% projection; the industry sector to post a smaller contraction of -0.2% to -1.1% from an earlier forecast of -0.4% to -1.9%; as well as agriculture, fishery and forestry sector to grow by a slower 1.6%-2.2% from an earlier 2.7%-3.6% estimate due to the impact of an emerging El Niño condition in the Pacific.
Official data released last Aug. 27 showed the country posting GDP growth of 1.5% in the second quarter of the year, topping most forecasts for the period. This was also faster than the 0.6% year-on-year growth notched in the first quarter.
Aside from low inflation and growth from remittances from overseas Filipino workers (OFW), Market Call said a recovery in exports towards the end of the year will also help boost GDP growth.
The decline in exports decelerated for the second month in a row in June to 24.7% from the 26.9% drop posted in May.
"This is supportive of the view that economies of major markets around the globe are slowly recovering," Market Call said.
CPBD now expects merchandise exports to decline by 13.6%-16.7%, better than its earlier projection of -14.5% to -19.4%, even as demand for the country’s top exports — semiconductors and garments — remain weak amid a slow global recovery.
The government forecasts a contraction in exports ranging from -13% to -15% this year, but officials earlier this week said the actual result may turn out to be worse, given the weaker-than-expected recovery among the country’s major trading partners.
"[But] June marks the second consecutive month of contraction at a slower rate. In the following months, we can expect further improvement in exports as inventories are beginning to be built up in our export markets for the coming holiday season," Market Call said.
Likewise, remittances from overseas Filipino workers (OFWs) are expected to sustain their strong performance for the rest of the year, bucking earlier forecasts of a decline. OFW remittances, which made up about a tenth of GDP last year, grew 2.9% in the first half of the year.
"The [first half] figures of OFW remittances support our expectation...that it will post a flat to even positive growth this year. It also is supportive of economic growth for the country in the first half, given its significance to domestic consumption," Market Call said.
The Bangko Sentral ng Pilipinas expects remittances to just match last year’s level of $16.4 billion.
UA&P’s Mr. Abola said that although remittances have grown by single-digit rates so far this year, the benefits are amplified because of the peso’s depreciation. He said a weaker currency compared to last year means more pesos ending up in remittance recipient’s hands. In real peso terms, he said remittances grew 11.9% as of June.
Meanwhile, FMIC, the investment arm of the country’s second largest bank Metrobank, said inflation will likely stay subdued this year, indicating stability in consumer prices. The firm’s report said oil and food prices, which drove inflation to a record high last year, will remain stable this year on the back of continuing tempered demand.
Friday, 4 September 2009
Paolo Luis G. Montecillo and Jhoanna Frances S. Valdez
Thursday, 3 September 2009
Outside the Box
Banking group UBS publishes its “Price and Earnings” report every three years.
What the “P&E” report gives is a comparison of the cost of living among 73 cities around the world.
The survey examines the cost of many items and services as a factor of how much a local worker must toil in order to afford those items. Not surprisingly, Oslo, Zurich, Copenhagen, Geneva and Tokyo are the most “expensive” cities on the planet. Mumbai, Delhi, Manila, Kuala Lumpur and Cairo are the world’s “cheapest.”
When the study began in 1971, the purpose was to bring some order and comparison in light of the collapse of the world’s currency-rate exchange. When currencies were backed by gold, there was little price differentiation, and you could anticipate exactly how much something would cost regardless of the city you were standing in. As the exchange rate of a dollar to an ounce of gold was fixed, the exchange rate between currencies, too, was fixed.
A hand-tailored suit in the 1900s cost about one ounce of gold, no matter where you bought it—in New York or London. An ounce of gold and one suit cost $20. Approximately, four British pounds Sterling bought that same gold ounce. So to a tailor in New York or London, it did not matter whether you paid in dollars or pounds; he could still exchange the paper money for a standard amount of gold.
By 1971, when the “P&E” report began, all that change. There was no single standard commodity like gold to measure costs between locations. Over time, they developed the “Big Mac Index.”
McDonald’s Big Mac sandwich was one of the few things that did not change from place to place. The size and ingredients were virtually the same everyplace, sort of like an ounce of gold.
Therefore, “cost” or “price” could be measured by how long a man in Manila or New York or Moscow had to labor to be able to purchase the almighty Big Mac as opposed to purchasing an ounce of gold.
In one sense, a Big Mac is “cheap” in Manila as it costs much less in dollar terms than in Zurich.
However, that bit of information is of little use, unless you are interested in traveling the world in search of the least-expensive fast-food item to pay for with your dollars. The more important fact is how long a local individual would have to work to purchase that Big Mac in his local currency.
If you are an average employee in Tokyo, you need to work only 12 minutes at your job to enjoy a Big Mac for lunch. In London only one minute more of labor gets you that same sandwich. Pity the poor Indonesian, though, who must clock in for 136 minutes, or the laborer in Mexico City, who has to stay on the job for two hours for his Big Mac. Here in Manila, it takes 88 minutes of work to buy a Big Mac.
Yet, it is not all that bad here in the Philippines. When comparing a basket of 122 goods and services, that “basket” costs $2,969 in New York, in Zurich $3,219 and $2,401 in Hong Kong, but only $1,166 in Manila. Of course in Mumbai, the basket costs only $916.
Food prices are less expensive in Manila. The same groceries that would cost you $526 in Los Angeles costs $251 here. And clothes prices in the Philippines are among the lowest in the world. A complete ladies’ outfit, consisting of suit, blazer/jacket, summer dress, pantyhose and a pair of shoes, goes for $120 here versus $250 even in Jakarta and a whopping $860 in Athens. That’s probably because we are closer to China than Greece is.
But we all know why prices are “cheap” in Manila; wages are so low in comparison. “Average gross hourly wages [before taxes and social-security contributions] can purchase the most in Copenhagen, Zurich and Geneva, followed by Los Angeles, Sydney and Miami. Bringing up the rear are Jakarta, Manila, Mumbai and Nairobi, where average gross hourly wages have been between 11 percent and 15 percent of the purchasing power of a salary in Zurich.” And the worst statistic is yet to come.
The Big Mac index is being over taken by the “iPod Index.” An iPod nano (with 8 GB of storage) costs only 10 hours of labor in Miami or Sydney. While in Manila you must work about 128 hours to buy it. Of course, that is better than in Mumbai, where 177 hours of work can buy the iPod.
While it might be fun, even intellectually stimulating to look at all this data, in truth, it is a bunch of nonsense. For the price of a Big Mac in Manila, you could feed yourself very well with healthy food for a whole day. Trading the price of a Big Mac in New York would not buy you a day’s worth of real food.
And that iPod? You and I both know where we can get an “iPod” for “one-five only” and we are assured that it has the same components inside as a “real” iPod. It probably does, too.
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Tuesday, 1 September 2009
Civil works on the Northrail project is expected to be completed as early as this month in time for its much anticipated opening next year.
One of the flagship projects of President Gloria Macapagal-Arroyo, the NorthRail project is envisioned to provide an efficient transport system between Metro Manila and Central and Northern Luzon and provide solution to the traffic problem and help decongest the metropolis.
The initial phase of the Northrail Project entails the reconstruction and upgrading of the rail line from the existing Caloocan Station to the Diosdado Macapagal International Airport (DMIA) in a bid to develop the Clark Special Economic Zone (CSEZ) as the foremost transshipment logistics hub in the Asia-Pacific region.
Phase I of the project is the dual-track rail service from Caloocan to Malolos, Bulacan under Section 1. Section 2 completes the rail service from Malolos to the DMIA.
The railway project from Caloocan to Malolos will interconnect and improve access to major transportation facilities in the Manila-Clark-Subic economic triangle, particularly Fort Bonifacio, Clark SEZ, Subic SEZ, and Poro Point in La Union.
The North Rail project Section I will have stations in Caloocan, Valenzuela, Marilao, Bocaue, Guiguinto, and Malolos.
So far, some 20,000 families residing within the rail line's right of way have already been relocated by the National Housing Authority (NHA).
Last April, the President approved the P645-million supplemental loan for Phase 1 of the NorthRail-SouthRail linkage project that will provide an efficient transport service and encourage urban development in other areas in Central, Northern, and Southern Luzon.
Phase 1 of the project covers the rehabilitation of the 34-kilometer rail section from Caloocan to Alabang, and the track renewal from Caloocan to España.
Last July, the President also launched the new trains of the newly-revitalized Philippine National Railways (PNR) by riding the new train from Tutuban to Buendia, which is expected to stretch up to the Bicol region by next year.
The NorthRail-SouthRail projects are among the flagship infrastructure projects enumerated by the President in her State-of-the-Nation Adress (SONA), particularly for the five super regions of the country that were programmed to catapult the country into First World status by 2020.
The Northrail project from Malolos to Clark is pegged at P39.3 billion; the Southrail project linking Metro Manila, Calamba and up to Bicol is estimated at P48.5 billion.
The President's major SONA projects are expected to enhance the country's economic growth and create jobs and leave behind a legacy of sustained development, prosperity and progress for generations to come.
Through the President's effective tax reforms, the government
has improved revenue efforts to generate about P6.5 trillion over the medium term to help fund these vital projects.
From 2004 to 2007, public infrastructure spending increased from P37.4 billion to P117.3 billion, an unprecedented figure reflecting the administration's seriousness to enhance the country's global competitiveness. (PND)
Erik de la Cruz
PHILIPPINE Trust Co., also known as Philtrust Bank, posted a 40-percent jump in net income for the first half of 2009 largely due to its high-yielding placements with the Bangko Sentral ng Pilipinas (BSP) and investments in government securities.
The bank of newspaper publisher and hotel owner Emilio Yap posted a six-month net income of P587.5 million compared with last year’s P419.7 million.
Net income for the second quarter rose 58 percent to P346.3 million from P219.7 million last year.
While maintaining its conservative policy, the bank said it continued to grow rapidly, with total resources increasing to P77.15 billion as of end-June from P71.46 billion at the end of 2008.
The bank attributed the growth to a 31.83-percent, P5.562-billion increase in “due” from the BSP, arising from what it described as a “more effective management” of reserve deposits and from higher fixed-term deposits placed in the central bank’s special deposit accounts (SDA).
Banks have reported huge gains from interest income from their placements with the SDA, a monetary liquidity-management tool that allows the BSP to mop up excess liquidity in the system in order to keep inflation manageable. “The bank’s higher asset base and correspondingly more efficient utilization of capital generated improved earnings compared to the same period last year,” Philtrust said in notes accompanying its results.
The bank’s interest income for the first half grew 21 percent to P2.6 billion from P2.15 billion last year.
The bank said it had also been aggressive in trading bonds and other securities, resulting in a 63-percent increase in gains from available-for-sale securities and a 31-percent increase in interest on held-to-maturity securities.
Service charges and other operating income surged by 139.7 percent due to higher volume of government bonds and other securities sold or redeemed.
These gains offset the 50-percent decrease in income from foreign-exchange trading, it said.
Interest expense increased by 22.5 percent due to higher level of deposits compared with last year’s level.
The bank’s deposit base expanded 9.5 percent to a record P66.15 billion as of end-June from last year’s level of P60.4 billion.
Its capital-adequacy ratio, which measures capital strength against risk-weighted assets, stood at 33.11 percent as of end-June, well above the minimum regulatory requirement of 10 percent.
Yap was previously looking to expand his banking business by acquiring Philippine Bank of Communications (PBCom) from its Filipino-Chinese owners.
In May, however, Philtrust announced it was no longer interested in acquiring PBCom, which recorded a return on equity of negative 18.9 percent as of end-June.
A controlling interest of 67 percent in PBCom is supposed to be sold to a new investor this year in accordance with the financial-assistance agreement signed in 2004 by the Nubla, Luy and Chung families—the bank’s three major shareholders—with the Philippine Deposit Insurance Corp.
Philtrust ranked 16th-biggest in terms of assets among the country’s 38 regular and expanded commercial banks.
Outside the Box
The newspaper headlines have finally caught up with all the gloom and doom coming from the economic experts, primarily with University of the Philippines on their résumés. Read this: “GDP growth for second quarter contracts 3.9 pct,” “GDP shrank 3.5 percent in the second quarter from a year earlier,” and “GDP in the second quarter contracted 4.9 percent from a year earlier.”
Sorry, my mistake. Those are the headlines, respectively, from Malaysia, Singapore and Thailand. The Philippines headlines read, “On an annual basis [year to year], second-quarter GDP climbed 1.5 percent.” In fact, the Philippines’ “second-quarter gross domestic product growth at a seasonally adjusted 2.4 percent from the first quarter was the highest since 2.4 percent in the first three months of 2007, and beat market estimates” (Reuters). Actually it only beat the “market estimates” of the “experts.” The confidence factor of local businesses and prices on the Philippine Stock Exchange have been predicting a good second quarter for the last three months. It is only the “experts” that are surprised that the Philippines is doing comparatively so well in the face of a global recession/depression.
The reason is simple; the Philippine economy does not depend on the United States.
The Japanese just concluded a dramatic election that potentially will change the course of that nation. The ruling Liberal Democrats, which have held power for 55 years, were handed a landslide defeat at the hands of the Democratic Party of Japan (DPJ). What is critically significant is that the DPJ ran on a platform moving the economy toward less dependence on the US.
Those countries, which include almost every one in Asia, that depend on the US for their wealth-building are looking for any bright spot, real or imagined. Most of the bright spots are imaginary.
Asian exporters saw their numbers decrease, but not as bad as in the first quarter. That is like saying the cancer is still growing but at a slower pace. Dependence on the US is still a terminal disease.
The US is headed for even more economic trouble over the next six months both from internal and external factors.
We know that both China and Japan have financed their exports to the USA by loaning money to purchase their goods. Two things are changing. The first is that neither country is interested in becoming the “casino financier” for the US anymore. Second, if these economies are determined as they appear to be to shift away from dependence on US exports, there is no reason to loan any more money. The day of reckoning is soon coming to the US and will hit around November. If the US cannot sell the massive quantities of debt paper that they normally do to China and Japan, then the only alternative is a very large devaluation of the US dollar. The result will be a sudden and greater downturn in Asian exports.
Domestically, unemployment continues to increase. The Obama administration is counting on the US consumer to bail out the economy. But increasing unemployment decreases consumer spending even more, causing more companies to fire workers, creating more unemployment and a larger decrease in consumer spending. The only solution to break this vicious cycle is increased government spending. But the government is out of money, probably cannot borrow in the quantities it needs, and the economy will sink even further.
The Philippines’ only significant “dependence” on the Western economies is through overseas Filipino remittances. We have seen that despite the global economic downturn, remittances have not been damaged. Further, the government’s decision to keep the peso at an artificially low rate has given those remittances a boost in purchasing power here at home. Whether it will make economic sense to keep the peso weak remains to been seen over the remainder of 2009, but for now, it is working well.
The Philippine Stock Exchange (PSE) may be the most visible barometer of the future economic condition of the Philippines. And here, the picture could not be much brighter. As long as we keep seeing commentaries in the press about the potential for a large decline in stock prices, all is well.
Although the PSE index has risen from the February 2009 low of around 1,800 to the current 2,800, the best is yet to come for individual issues. From my latest Market Update: “We are just about ready for the indictor line to break above the ‘zero’ mark. This is critical and very important. This last time the Monthly Buy Signal moved above ‘Zero’ was in January 2004, and once that Buy signal broke ‘Zero’, the PSEi went from 1,500 to 3,500, more than doubling. You are part of the greatest PSEi price rally since the one that began in 1990 after the ’89 coup attempt, and that over the next eight years then, prices nearly quadrupled.”
In other words, the last six months have merely been the opening act for what is yet to happen. A comment in one of yesterday’s newspapers about prices on the PSE being expensive is wrong. What stock prices are telling us now is that over the rest of this year and into 2010, corporate profits will catch up with stock prices, even as prices go still higher, anticipating even higher future profit growth.
Unlike most of the other global stock markets, Philippine investors are buying the hard-earning generating assets of listed companies, not merely dreams about a better future. Investors in the PSE are forecasting a bright economic future, putting their money where their optimism is. They will be well rewarded betting on the Philippines.
Monday, 31 August 2009
Business sentiment turns sharply higher
Business sentiment continued to improve in Q3 2009 as the overall confidence index (CI) reverted to positive territory. This is the first time since Q3 2008 that optimists outnumbered pessimists. The CI, at 18.4 percent, jumped sharply by 31.3 index points year-on-year and by 21.0 index points quarter-on-quarter. The buoyant outlook carried on to Q4 2009, with the CI at 33.7 percent, higher by 20.0 index points quarter-on-quarter and by 17.1 index points year-on-year. This upbeat trend in business sentiment sustained the positive development observed in the last quarter’s survey results. The favorable sentiment was also consistent with the emerging outlook of improving global economic conditions based on readings suggesting stabilization and/or recovery in key economic indicators.
The improvement in domestic macroeconomic fundamentals (i.e., subdued price pressures/declining inflation, easing interest rates, rising overseas Filipinos’ remittances, and the relatively stable peso) helped lift business sentiment. Moreover, the expected seasonal pick-up in consumer demand in the last quarter of the year may have contributed to the optimistic outlook for Q4 2009.
Respondents from both the National Capital Region (NCR) and the Areas Outside the NCR (AONCR) registered more upbeat outlook for the third quarter. However, NCR respondents were more bullish on the economy than their counterparts from the AONCR in Q3 and Q4 2009. Firms located in the AONCR have a generally positive outlook in Q3 2009, with the exception of respondents from Region I. The outlook of respondents from Region I was weighed down by the pessimism of firms in the services sector, mainly due to the seasonal slowdown in tourism-related business activities (i.e., hotels and restaurants and transportation businesses) during the rainy season. In terms of the quarter-ahead outlook, all regional respondents have a favorable view of the macroeconomy for the next quarter.
All types of businesses (i.e., importers, exporters and those engaged in dual activities) expected more favorable economic conditions in Q3 2009 as their confidence indices turned positive. This favorable outlook of businesses continued for Q4 2009 as their indices were higher than in Q3 2009.
The outlook of all firms by employment size likewise improved year-on-year and quarter-on-quarter. The CIs across firms were all positive for the last two quarters of the year. Large-sized firms were the most optimistic in Q3 2009, while medium-sized firms were the most bullish in Q4 2009.
More buoyant business sentiment is evident across all sectors
All sectors were bullish about the macroeconomy in Q3 2009, with the indices climbing year-on-year and quarter-on-quarter.
The construction sector had the most favorable business outlook, with CI at 37.3 percent. The services sector was likewise upbeat in Q3 2009, with a CI at 20.2 percent, an increase by 23.0 index points and 19.2 index points year-on-year and quarter-on-quarter, respectively. This improved optimism reflected the positive views of all sub-sectors, particularly financial intermediation and community and social services. Notably, the financial intermediation sub-sector recorded the highest year-on-year and quarter-on-quarter increase among sub-sectors. This trend could be attributed to the resilience of the Philippine banking system amid the global financial strains.
The CIs of the industry sector (at 18.8 percent) as well as of the wholesale and retail trade sectors (at 12.8 percent) were also higher quarter-on-quarter and year-on-year, and this could signal more buoyant consumer demand starting in the current quarter.
Looking ahead to the next quarter, all sectors continued to post positive indices for Q4 2009. The services sector was most optimistic with a CI at 41.0 percent. Among the services sub-sectors, financial intermediation posted the most improved CI. Closely behind was the hotels and restaurants sub-sector, which expected brisker business during the Yuletide season.
More firms were bullish about their business operations
Respondents were also bullish that their operations would continue to be favorable in Q3 2009 as indices were higher relative to levels recorded a year ago and during the last quarter. Firms in the construction sector were the most optimistic, followed closely by firms in the services sector.
Despite the improving outlook of firms on their own operations, the average capacity utilization in Q3 2009 slightly declined to 68.9 percent compared to last quarter’s 69.2 percent.
Expectations regarding credit access and financial conditions improve
The credit access index (CAI) continued to improve in Q3 2009 at -0.8 percent from -7.2 percent in Q2 2009. The current CAI indicated that the number of firms that expected tighter access to credit was almost equal to the number of firms that expected otherwise.
The financial condition index, which is an indicator of internal liquidity, likewise improved at -17.4 percent from -26.8 percent in Q2 2009. This implied that fewer number of respondents expected liquidity problems in Q3 2009 compared to the previous twelve-month period and the preceding quarter.
Employment outlook turns positive and the number of industrial firms with expansion plans increases
The employment outlook index for Q4 2009 turned positive at 9.4 percent, after being negative for the past three quarters. The employment outlook continued to be favorable for the construction and services sectors (specifically hotels and restaurants, real estate, renting and business activities and financial intermediation sub-sectors), consistent with their positive macroeconomic outlook in Q3 2009.
Meanwhile, 17.4 percent of industrial firms (from 16.0 percent in the last quarter survey) indicated that they have expansion plans for Q4 2009.
Competition remains a major risk to business
Competition, weak demand, and financial problems were considered by the respondents as the key risks to business activity in Q3 2009.
Expectations on key economic indicators likewise improve
Firms anticipated that the peso will weaken, that inflation will rise, and that interest rates will decline in Q3 2009. However, there were fewer respondents with expectations of a weakening peso and rising inflation compared to those in the previous year and in the preceding quarter. Notably, the CI for inflation at 4.4 percent in Q3 2009 was lower by year-on-year and quarter-on-quarter. Likewise, the number of respondents that indicated that the peso would depreciate in the current quarter (CI at -4.2 percent), decreased relative to the previous year and quarter. For Q4 2009, firms anticipated that the peso will appreciate, and that inflation and interest rates will increase.
Survey response rate at 76.2 percent
The Q3 2009 BES was conducted during the period 1 July-14 August 2009. There were 1,389 firms surveyed nationwide. Respondents were drawn from the Securities and Exchange Commission 2008 Top 7,000 Corporations as follows: 514 companies in NCR (37.0 percent) and 875 firms in AONCR (63.0 percent), covering all 17 regions nationwide. The survey response rate for this quarter was 76.2 percent, lower than last quarter’s 77.6 percent. For NCR, the response rate was 73.2 percent (from 80.4 percent last quarter); and for AONCR, the response rate was 78.1 percent (from 76.0 percent). A breakdown of responses received by type of business showed that 10.4 percent were importers, 7.8 percent were exporters, and 14.7 percent were both importers and exporters. Sixty-seven percent of the respondents were neither importers nor exporters or did not specify their firm type.
P. L. G. Montecillo
QUARTERLY GROWTH results for the Philippines will be positive for the entire year, international analysts said, making the country one of a few to achieve the feat.
The economy will also likely grow at the high end of official government targets — currently at 0.8-1.8% for the year — given prospects of an improvement from the second-quarter result of 1.5%.
Growth in the first quarter was 0.6%.
In a commentary dated August 27, the International Institute of Finance (IIF) said the Philippines would dodge a recession this year and described the forecast feat "remarkable."
"After a one-quarter decline in the first quarter, GDP rose in the second quarter, and the yearago rate was 1.5%," said the IIF, the global association of financial institutions.
Seasonally adjusted, the economy contracted by 2.1% in the first quarter, then rebounded to 2.4% in April to June.
The annual growth of 1.5% topped the government’s forecast of -0.1% to 0.9% for the period.
The IIF, which counts as members over 370 financial institutions in more than 60 countries, said: "The Philippines is on a very short list (along with China and Indonesia) that will go through this downturn without posting a negative yearago quarterly GDP growth rate."
The country’s strong performance was attributed largely to an uptick in domestic demand, which was boosted by increased government spending and the steady flow of remittances from overseas Filipino workers (OFWs).
Dutch financial giant ING, meanwhile, said the central bank’s recent Business Expectations Survey — which showed a marked improvement in optimism — pointed to a good chance of continued acceleration for the rest of the year.
The confidence index posted a score of 18.4% for the third quarter, better than the -2.6% in previous period and a low of -23.9% in the first quarter.
"The Business Expectations index tracks year-on-year real GDP growth and it’s pointing to an acceleration to 4-5%," said Tim Condon, chief Asia economist at ING Financial Markets Research Group.
"As everywhere else in Asia, second-quarter GDP surprised on the upside," Mr. Condon pointed out in a note issued during the weekend.
Local brokerage firm Philippine Equity Partners, Inc. (PEP) shared the view, noting that while vital sectors like exports and investment spending shrank for the third consecutive quarter, they may have already hit bottom.
PEP analyst Jojo Gonzales, in a comment dated August 28, cited consumer spending, which posted a 2.2% expansion in the second quarter from 1.3% a quarter earlier.
PEP hiked its forecast for the economy, which it previously said would likely expand by 1.4% this year, to 1.8%.
By Delon Porcalla
MANILA, Philippines - The construction of the P3-billion modern international airport in a small island near Romblon province – dubbed as the best and nearest alternative to the overcrowded resort island of Boracay – would start soon, local officials said.
Romblon officials led by Rep. Eleandro Jesus Madrona and Gov. Natalio Beltran III said the groundbreaking of the Carabao Island International Airport (CIIA) would start next month.
Madrona said the construction of the modern international airport, expected to be fully operational by 2012, is a private-sector initiative.
Investors from Europe, Japan, South Korea and Taiwan have earlier expressed interest in the island as an alternate site for their investments. The site is located in San Jose town, an island in Romblon that can be reached by a 15-minute boat ride from Boracay.
San Jose, just a 30-minute flight away from Manila, is a carabao-shaped island. The proposed world-class airport project, when completed, can accommodate Airbuses planes [sic] and other similar huge aircraft.
Madrona said the CIIA could be an alternate to the existing airports in Tugdan, Alcantara in Tablas Island in Romblon, Kalibo and Caticlan in Aklan, which foreign and domestic tourists use in going to Boracay.
Caticlan airport has been closed recently for renovation.
San Jose town Mayor Fil Tandog said the island is like Boracay with white sand beaches and crystal-clear waters ideal for diving.
Tandog said the island, popularly known as Isla de Carabao, is four times bigger than Boracay.
Tandog revealed that several foreign investors from Taiwan, Korea, Japan and US have already visited his town and signified their intention to invest in the island to put up hotels, restaurants, golf courses, resorts and other modern amenities.
With the signified investments, prices of prime property in the municipality went up from P150 per square meter to as much as P500.
Beachfront rates, on the other hand, are much higher – ranging from P4,000 to P5,000 per square meter.
Real estate in San Jose is much cheaper compared to Boracay because properties in the virgin island are virtually unoccupied and owned by original settlers who have been residing in the area for years.
Members of the provincial board in Romblon led by Fred Dorado hailed President Arroyo for taking the initiative to put the region in the country’s tourism map.
Dorado assured foreign and local investors that they would enact a measure to lower the taxes in the province.
The construction of the airport is expected to generate entrepreneurial opportunities and new jobs, thereby increasing economic activities for the people of the municipality, including the remaining 14 towns of the province, officials said.
Beltran added the airport in Carabao Island will provide steady jobs and income for all the residents where fishing and farming remain the main sources of livelihood.
Sunday, 30 August 2009
MOST opposition politicians, bishops, opinion makers and coffeeshop analysts would not accept President Gloria Arroyo’s word that she will step down from office when her term ends in 2010.The critics want us to believe that Mrs. Arroyo will not ride into the sunset but has plans to stay on.
We heard different. Malacañang insiders, persons claiming to be her friend, and namedroppers say proofs abound that the President will quit politics and become a plain citizen after her last night at the Palace. Those who claim to know cite the following goings-on:
The President has started to write her memoirs and has asked Presidents Clinton, Bush and Carter for advice.
She has started packing.
The GSIS has been contacted to compute her retirement pay and other pension benefits.
She plans to form an exclusive Saturday Group with Presidents Ramos and Estrada as members.
The first reunion of the Arroyo Cabinet will be held in December 2010.
She plans to play the role of Senior Adviser and has begun to read the memoirs of former Singapore Prime Minister Lee Kwan Yew.
She is considering a teaching job at her alma mater.
Her first vacation will be to Disneyland with her grandchildren.
She wants to make fuller use of her Senior Citizen ID card and privileges.
She has begun collecting her speeches and writings for publication.
She has begun to look into the resumes of the Presidential Security Group members who will provide her security during retirement.
She has organized a transition team to work with the next administration and to ensure a civil transfer of power.
On the day President Harry Truman retired, according to biographer Matthew Algeo, HST got up early, packed the trunk of his car, and did something no other former president has done before or since: He hit the road.
“No Secret Service protection. No traveling press. Just Harry and his childhood sweetheart Bess, off to visit old friends, take in a Broadway play, celebrate their wedding anniversary in the Big Apple, and blow a bit of the money he’d just received to write his memoirs . . . hopefully incognito.” Truman didn’t get the privacy he wanted but had a good time anyway.
President Arroyo may surprise us with something new when she retires. She could change her trademark hairdo, become a global spokesman for interfaith dialogue or begin a new career as travel consultant.