Saturday, 6 February 2010
Roderick T. dela Cruz
US-based Citi Group is expanding in the Philippines, with the opening of 14 more branches of its thrift banking unit over the next four weeks.
“We will increase from 22 to 36 branches [of Citi Savings Inc.] in four weeks,” Sanjiv Vohra, country head for Citi Philippines, told reporters in a news briefing at Ascott Makati Thursday.
Vohra, who did not cite the investment cost of the the expansion, said it had to open the new Citi Savings branches simultaneously this month to preserve the licenses granted by Bangko Sentral. The licenses for the thrift bank operations are set to expire in March.
Vohra said the plan to open 14 savings bank branches, mostly in Metro Manila, had been in the pipeline for about a year.
“We have been working for it for over a year now. We have been working behind the scene,” he said.
Vohra also disclosed that starting tomorrow, the bank’s Citigold wealth management service would be available at its Citi Savings branch in Ermita, Manila. The service, which used to be exclusive to Citi commercial bank branches, will be rolled out in other branches of the savings bank in the coming months.
“We would like to expand the presence of Citigold to our Citi Savings branches,” he said.
Citi has six commercial bank branches and 22 savings bank branches.
Its Citigold product is a wealth management service provided to affluent clients with a minimum of P4 million in investment.
Citi remains optimistic about the credit market in the Philippines, which it sees expanding 8 percent to 10 percent this year.
“We expect credit card spending to go up specially with the growth in economy, election spending and remittance flow,” Vohra said.
The Citi Group has over a million credit card holders in the Philippines.
Haren Shah, director and senior investment strategist of Citi Asia Pacific, said the global economy was expected to recover this year with a 3.3-percent growth, led by the strong rebound in Asia, excluding Japan.
Inflation is expected to remain subdued in 2010, although emerging markets are more vulnerable to inflationary pressures that may require tighter monetary policy.
Citi strategists expect the United States and the United Kingdom policy rates to begin rising in late 2010 while European and Japanese policy rates are seen to remain stable throughout the year.
One of the painful facts about our society is that various elite factions, clans and dynasties control policy-making (which includes lawmaking) and governance.
These elite factions do not form a hegemonic unity. They have conflicting interests, foremost of which is, naturally, each faction’s aim to be Numero Uno or at least to be in the Numero Uno’s circle of allies.
But all factions and clans suddenly get united when it comes to frustrating reforms to make the Philippines genuinely democratic and make governmental graft and corruption more difficult.
It is therefore just to refer to these elites, in their role as preservers of the undemocratic and corrupt system of governance, as “the underminers of reform.”
The underminers have once again proved to be superior to the reformers in the power to pass and trash laws.
They prevented on Wednesday the ratification by the House of Representatives of the Freedom of Information (FOI) Law that the House-Senate bicameral conference crafted out of the House and Senate versions of the bill that had been earlier passed on third reading in both chambers of Congress.
The Senate had ratified the proposed law in its session on Monday, February 1. Expectations were high that the House would also ratify it on Wednesday. But it did not—for lack of a quorum.
The proposed FOI Act that gives the citizenry access to all government records (except those bearing on national security, but the officials refusing access have to amply explain why or they could be held liable under the law). It also requires all government transactions to be posted in government Internet websites.
Only 91 congressmen, out of 298, were present in last Wednesday’s session—the final one of the House of Representatives of the Fourteenth Congress until it reconvenes on May 31, for the purpose of serving (together with Senate) as the National Board of Canvassers for the presidential and vice presidential election. By law, the Congress, constituted as the National Board of Canvassers, proclaims the winning presidential and vice presidential candidates.
Killed by lack of a quorum
The absence of 207 congressmen killed the enactment of the FOI Law—which President Arroyo had earlier promised to sign and therefore enact once it is submitted to her.
Other important pending bills that have passed the two congressional chambers on third reading and
which had been consolidated into final versions by the bicam were also doomed by the House’s failure to ratify the bicam versions. These bills also would have led to reforms in governance and the economic infrastructures of our country—reforms that would loosen the elite groups’ anti-developmental grip on segments of the political economy.
Quezon Rep. Erin Tañada, a main proponents of the FOI bill, said technically speaking the House could still decide to ratify the bill when it reconvenes on May 31 and in the days in June before the life of the Fourteenth Congress ends. But he expressed pessimism. He said he had a hard time persuading the House leadership to even put the ratification of the FOI Law on last Wednesday’s agenda.
Referring to the underminers—but without using that term which we hope, with this article, would enter our English vocabulary as another name for the anti-reform elites—Congressman Tañada said, “They are afraid. What if the objective of the bill to apply accountability and transparency in all government transactions are realized and a lot of things come out into the open?”
Vigorous campaign for FOI Act must go on
We must, however, lose neither hope nor steam.
We must continue to press on for the enactment of the FOI Law.
If the miracle of the FOI bill’s ratification by the House does not happen from May 31 to that day in June when the Fourteenth Congress adjourns for good, it would be back to square one. The bill will again have to be debated in the House and in the Senate!
All Filipinos who wish to see our country’s government become more transparent, more accountable and less corrupt must wage a vigorous campaign for the enactment of the Freedom of Information Law.
CRIS G. ODRONIA REPORTER
With the Metropolitan Manila Development Authority (MMDA) opening urinals strictly for women along a major thoroughfare, female commuters and pedestrians no longer have to go anywhere to heed nature’s call. MMDA Chairman Oscar Inocentes and other officials of the agency and woman members of Rotary Club on Friday inspected the urinals along Epifanio de los Santos Avenue.
One urinal is under the Ortigas station of Metro Rail Transit 1 and two are at a provincial-bus terminal on Quezon Avenue.
The women’s urinals are four-wall cement slabs with polycarbonate roofing and doors. Painted in shades of green and adorned with flower drawings, they have slits near the ceiling for ventilation.
“We designed and built these facilities for the exclusive use of women. We’re just hoping that they will try to use these so we would know what further improvements we need to make for their comfort and convenience,” Inocentes said.
The female members of Rotary Clubs of Loyola Heights and Diliman North, both in Quezon City, who were invited to try out the newly opened toilets, approved the design of the facilities.
“This is really a boon for women,” said Rose Imperial, the public relations officer of the Rotary Club of Loyola Heights. “We’ve been so neglected by so many kinds of programs but this very basic thing is something else for us.”
Imperial encouraged women to try the urinals, saying that the design of the toilets considered foremost the safety of their users. “The only problem is that, it is a challenge for us women to maintain this but I think we can do it,” she said.
Each toilet, which measures 3 by 5 meters, has a lavatory and water supply. For security, it has doors that could only be locked by the user inside.
“We guarantee that the user cannot be seen outside. It is fully covered and is roofed. We have assigned people to maintain its cleanliness round-the-clock,” the MMDA chairman said.
Inocentes added that they would solicit comments and suggestions from the public in 15 days before discussing plans to put up similar facilities along major thoroughfares in Metro Manila.
“I am encouraging the ladies to use this first batch of urinals and give us feedback, whether it is positive or negative. This way, we would know which aspects we need to improve,” he said.
The MMDA chief added that each toilet, which costs between P15,000 and P20,000, would be manned by the MMDA personnel 24 hours a day to maintain cleanliness.
The urinals were designed by engineer Rowena Estrella of MMDA. Estrella said that among the factors she considered for the design of the toilets were safety, ventilation and durability.
by Jeremiah F. de Guzman
Listed Globe Telecom Inc. said Thursday that net profit after tax rose 11 percent to P12.6 billion in 2009 from P11.3 billion in 2008, despite slightly lower revenues on weak mobile business.
Globe said non-recurring gains and lower taxes partly contributed to the higher profit.
Globe’s net income in 2008 fell 15 percent from P13.3 billion in 2007.
Service revenues stood at P62.4 billion in 2009, slightly lower than P62.9 billion a year ago.
Globe, owned by conglomerate Ayala Corp. and Singapore Telecommunications Ltd., said broadband and fixed line data revenues climbed 74 percent and 23 percent, respectively, while those of mobile service fell 4 percent.
Mobile service revenues accounted for 85 percent, or P53.3 billion, of Globe’s total revenues in 2009.
The second-largest telecommunications firm ended the year with a cumulative wireless subscriber base of 23.2 million, down 6 percent from the previous year’s 24.6 million. Combined average revenue per unit of both pre-paid and post-paid subscribers was at P185, down 10 percent.
Globe’s landline subscribers grew 40 percent to 589,331 in 2009 from 420,270 in 2008, while broadband customers jumped threefold to 715,472 from just 230,968.
Roderick T. dela Cruz
Banco de Oro Unibank Inc., the banking unit of the SM Group of retail tycoon Henry Sy, kept its position as the largest bank in the Philippines in terms of assets and loan portfolio last year.
BDO reported total consolidated assets of P856.2 billion in 2009, according to the separate consolidated balance sheets filed by publicly-listed banks with the Philippine Stock Exchange.
BDO had P491.8 billion in loans and net receivables as of end-2009, the largest among commercial and universal banks.
Metrobank Group trailed BDO as the country’s largest, with the George Ty-led bank registering combined consolidated assets of P844.5 billion in 2009, with P620.658 billion attributed to mother company Metrobank. The group declared P412.86 billion in loans and net receivables last year.
Bank of the Philippine Islands of Ayala Corp. ranked third with total consolidated assets of P713.06 billion, including P595 billion from the bank.
BPI had P378.1 billion in total consolidated loans and receivables in 2009.
Other publicly-listed banks such as the Philippine National Bank and Rizal Commercial Banking Corp. have not officially declared their 2009 balance sheet.
Union Bank of the Philippines of the Aboitiz Group reported consolidated assets of P241.3 billion, with P120.3 billion in loans and net receivables, while China Banking Corp. declared consolidated assets of P232.465 billion, including P106 billion in loans and net receivables.
China Bank said Thursday that its board ratified the acquisition of 80 common shares of China Bank Savings Inc. (formerly The Manila Banking Corp.) from five shareholders. The board also approved the reorganization of its management committee.
Meanwhile, Security Bank claimed it had the best asset quality among domestic universal banks, with its non-performing loans ratio averaging at 1.25 percent last year, below the industry average of 3 percent to 4 percent.
The bank, citing preliminary data on its unaudited balance sheet, said its “NPL cover remains unparalleled at 292 percent at the end of December 2009.”
Security Bank said asset base grew 5.8 percent year-on-year to P146.3 billion in 2009, on the back of higher lending activities.
The bank said it continued to focus on its lending activities with loans comprising 51.3 percent of total assets, as it diversified its commercial and corporate banking portfolio.
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Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that the country’s gross international reserves (GIR) level as of end-January 2010 rose to US$45.4 billion, higher by US$1.2 billion than the end-December 2009 level of US$44.2 billion, Officer-In-Charge Armando L. Suratos announced today.
The increase in the GIR level was due mainly to foreign exchange inflows from the National Government’s (NG) deposit of the proceeds from the reopening of its two bond issuances maturing in 2020 and 2034, as well as the BSP’s foreign exchange operations and income from its investments abroad. These receipts were partly offset by outflows arising from the payment of maturing foreign exchange obligations of the NG, foreign currency withdrawals by authorized agent banks (AABs), and revaluation losses on the BSP’s gold holdings due to a drop in the price of gold in the international market in January 2010 following recent gains in the US dollar.
The current GIR level could cover 9.2 months of imports of goods and payments of services and income. It is also equivalent to 10.1 times the country’s short-term external debt based on original maturity and 5.4 times based on residual maturity. 1/
Net international reserves (NIR) level, which includes revaluation of reserve assets and reserve-related liabilities, likewise rose to US$45.4 billion as of end-January 2010, US$1.2 billion higher than the previous month’s level of US$44.2 billion. NIR refers to the difference between the BSP’s GIR and total short-term liabilities.
1/ Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
Davao City (PND) -- President Gloria Macapagal Arroyo yesterday (Wednesday) hailed the country’s cyber industry as a strategic success and said whoever will succeed her in June should build upon what her administration has achieved in the industry to bring the Philippines to the verge of the first world in 20 years.
The President, who completed a one-day, four-city tour Wednesday with a visit to the Concentrix call center facility inside the Damosa IT Park here in the city, said that while much remains to be done in the cyber industry sector, she will be turning over in June to a new government “a new Philippines that is ready for the challenges of the first world.”
Earlier in the day, the President visited Iloilo, Bacolod and Cebu.
She said the strategic initiatives in information and communications technology (ICT) she launched at the start of her tenure in 2001 have turned the business process outsourcing (BPO) sector in the country into a $7.3 billion industry as of last year, enough to challenge, she said, the supremacy of India’s $9 billion-a-year call center sector.
“From scratch with only 2,000 workers before I became President, we have created a global powerhouse: the Philippine BPO industry,” said the President as she spoke before the officers of the ICT Davao Inc., the umbrella group for the more than 220 firms engaged in ICT-related business in the region.
Davao city is one of the 10 cities nationwide billed as “new wave cities “ of the Cyber Corridor, the ICT component of a 2006 program that mapped out five “Super Regions” for focused strategic development to hasten the tempo of national economic advance under the Arroyo administration. Also intended to move away certain industries from congested Metro Manila, the Cyber Corridor stretches from the Pampanga urban centers to Davao where ICT potentials and opportunities abound, like in Metro Manila and Metro Cebu.
According to Wit Holganza, a BPO entrepreneur and president of ICT Davao, they are highly encouraged by the Cyber Corridor concept so that her group is looking at making Davao the preferred destination for ICT investments, products and services.
President Arroyo said the strategic initiatives toward the Cyber Corridor have resulted in the dramatic rise in figures for cyber industry or ICT activities, especially the call center employment in the country.
She said that as of end 2009, a total of 446,000 were employed in the BPO sector, compared to the measly 2,400 in Y2000. For 2010, BPO employment nationwide is projected to shoot up to 1 million.
Other dramatic figures cited by the President were the increase of cell phone units in use nationwide to 170 million from 4 million in 2004 which account for the estimated 500 million to 600 million text messages and mobile calls reported each day; increase to 24 million as of September last year in the number of internet users in the country (from only 2 million in Y2000); and P5.5 billion in investments posted in the ICT sector in the first quarter of 2001.
The President said that the remarkable improvements in the Philippine cyber industry sector helped much to bail out the country from economic chaos and the political turmoil 10 years ago.
“The economy then was jammed in reverse and few investments and jobs were being created. It was a time of low salaries and high inflation,” she said.
“Into this dismal picture we stepped. I did not seek the Office of the President in 2001, it was thrust upon me. But rather than shirk from this onerous task, we rolled up our sleeves, determined to turn the Philippines around,” she added
She said the huge success of the cyber industry was attained by encouraging billions of investments in broadband services, providing the appropriate policy and legal environment like the creation of the Commission on ICT and removing too much government interference in the industry and supporting the industry with development programs for human capital, as well.
The President said her revisiting of the Cyber Corridor is a review of the legacy of accomplishments she will leave the Filipino people when she steps down in June.
RP BPO industry closes in on India - PGMA
Lipa City, Batangas (5 February) -- With 90 million people, the Philippines is about to overtake India and its one billion population as the world's top business process outsourcing (BPO) destination.
During a visit to the AMA Computer and Learning Center (ACLC) campus here, President Gloria Macapagal-Arroyo said the country generated BPO revenues of $7.3 billion last year, not far behind India's $9 billion earnings. This was a 300 percent increase from the start of the Arroyo administration nine years ago.
Revenues aside, employment in the industry also went up from 4,000 in 2001 to 500,000 last year.
This year, the BPO industry is projected to generate revenues of between $10 billion and $13 billion and employ one million workers.
The President recalled that in her first State of the Nation Address in 2001, she vowed to create wealth by developing labor-intensive, skills-intensive services such as ICT (information and communications technology) and tourism.
"We did it from scratch," the President said. "We created what is today a global powerhouse: the Philippine BPO industry. We achieved this by encouraging broadband service providers to invest in digital infrastructure by providing a clear policy and legal environment through the creation of the Commission on Information and Communications Technology (CICT), and by developing our human capital."
The President also pointed out that investments in digital infrastructure has brought down the cost of international calls from 40 cents to two cents a minute through voice-over-Internet protocol (VOiP), resulting in the increased number of Internet users from two million to more than 24 million today.
With this VOiP technology that integrates telephony with the Internet into more than one international telecommunications gateway, "no Taiwan tremor or tsunami can cut off cyber services from their global clients," the President said.
To date, more than 5,000 public schools have computer laboratories while almost 4,000 state schools have been connected to the internet.
The President said the government already invested P35.5 billion in technical education and training skills, of which P1.69 billion went to BPO scholarships.
"Much work remains to be done, but I am determined to turn over to the new government a new Philippines ready for the challenge of giving the nation First World status in 20 years," the President said.
CEBU CITY (PND) -- President Gloria Macapagal-Arroyo yesterday lauded the province of Cebu for being named the Top 2009 Emerging Global Outsourcing Destination by Tholons, a global outsourcing advisory firm.
Tholons is India-based, with branches in the world’s major capitals. In a recent survey, it ranked Cebu at the top of 50 cities all over the world in scale and quality of workforce, modern infrastructure, risk profile, cost of operation, and quality of life.
In her speech before officers and employees of Qualfon Quality Contact Services at Asiatown IT Park here, the President said the city’s world-class workforce nicely dovetails with the Cyber Corridor established by her administration.
In her 2006’s State of the Nation Address, the President announced the creation of the Cyber Corridor, where ICT (Information and Communications Technology) and BPO (Business Outsourcing Process) firms can locate their operation.
"Aside from miles and miles of roads that is now three-fourths complete, a 200-megawatt power plant will be constructed here next year. And as we can see, Asiatown IT Park facilities are available to accommodate ICT-BPO locators,” the President said.
"Cebu is attractive to investors because of the high quality of graduates from nine universities and 50 colleges," the President said.
The President stressed that the rise of the $7-billion BPO industry can be traced to her administration’s strategic investments in three areas, namely connectivity infrastructure backbone, appropriate policy and legal environment, and human capital.
She said the government heavily invested in human development by providing more than 5,000 schools with computers, 4,000 of them with Internet connection.
According to the President, she has established three times more technical schools than the three previous administrations combined.
“Thanks to the Cyber Corridor, billions of pesos in investments poured into the country, creating half a million jobs in BPO industry alone,'' she said. “It is this big number of livelihood opportunities that is part of the legacy I am leaving behind.”
LAHUG, Cebu City (PND) – President Gloria Macapagal-Arroyo today promised to sign the Expanded Senior Citizens Act with all its provisions intact.
“I will certainly not veto it,” the President told reporters after her visit to the Qualfon Quality Contact Services here this afternoon.
The proposed law exempts senior citizens from the value added tax. It thus gives them the full 20-percent discount when purchasing medicines and other consumer services. Under the law currently in force they get to enjoy only an 8 percent discount because of the imposition of the 12 percent VAT.
Already ratified by both the House of Representatives and the Senate, the bill also entitles indigent or non-pensioner senior citizens to a monthly pension of P500; free medical insurance and disability assistance through PhilHealth, including free anti-flu and anti-pneumonia vaccines; and a P2,000 burial assistance.
The discount also applies in hotels, restaurants and similar establishments; cinemas, theaters and other places of culture, leisure and amusement; and funeral homes.
Friday, 5 February 2010
Cai U. Ordinario
WITH a presidential election under way and the expected recovery in exports, the National Economic and Development Authority (Neda) held out the possibility on Thursday that the interagency Development Budget Coordination Committee (DBCC) may have underestimated the growth projection this year.
Neda Acting Director General Augusto Santos said growth in 2010 could be higher than the 2.6-percent to 3.6- percent gross domestic product (GDP) growth range estimated by the DBCC last year.
Santos said that with this, there may be a possibility the DBCC will revise its 2010 growth estimates upward. However, the Neda chief said the DBCC had not, to date, set a date for discussing this.
“My gut feel is that we may have to review the macroeconomic figures. We feel that we may have underestimated the growth potential of the Philippine economy this year, 2010. It [growth] can be bigger than the 2.6-percent to 3.6-percent [estimate],” Santos told reporters on Thursday.
Santos explained that the elections alone could easily account for around 5 percent of whatever the GDP growth rate would be in 2010. In 2007 Santos said elections accounted for a little over 4 percent of the 7.2-percent growth.
He noted that 2007 was also an election year. The only difference of 2007 with 2010 is that the 2010 elections will be a presidential election and would therefore mean higher election spending.
“In 2007 our GDP growth was [around] 7 percent. Out of that 7 percent, [less than 5 percent] of the 7 percent was due to election spending and it was not even a presidential- election. So i can say roughly, election- spending contribution to GDP growth this year will more or less be 5 percent of whatever is that GDP growth rate number. These are all rough calculations,” Santos explained.
The recovery in exports, owing to the pull-up effect of the global economic recovery, is expected to contribute significantly to growth. This will be supported by the recovery in electronics exports.
Santos also sees a base effect on exports since exports growth last year was really low. Exports started contracting in late 2008 but hit the lowest growth in January of 2009, with a contraction of 40 percent.
In the January to November 2009 period, exports were still contracting by 24.6 percent to $35.004 billion from $46.403 billion registered during the same 11-month period in 2008.
On the other hand, Santos said the only dampening effect would possibly come from higher oil prices. Santos said that while the DBCC assumes that Dubai crude could be within $70 to $90 per barrel, oil prices could easily increase. He said this will be brought about by the global recovery.
“While oil prices have a dampening effect on economic growth, there are other factors which would push up economic growth—the recovery of our exports, principally electronics, and the increasing offshoring and outsourcing businesses here, and then increasing OFW (overseas Filipino worker) remittances which, as you know, boost consumption,” Santos said.
The Neda chief also sees some recovery in agriculture. While the sector is expected to be severely affected by the El Niño phenomenon in the first quarter of 2010, the government’s cloud-seeding program, among other measures, is seen to contribute to its recovery.
Earlier, the Department of Agriculture (DA) said it is setting aside P570-million intervention measures for the palay sector to offset the effects of the El Niño dry spell on rice production.
This amount is part of the P1.7 billion the DA will realign from its regular budget in 2010 to carry out measures to reduce expected production losses in agriculture.
Of the P570 million, Agriculture Undersecretary Bernie Fondevilla said P40 million will be spent for cloud-seeding over 342,043 hectares of watershed areas, and the rest, for setting shallow tube wells and pump irrigation system open-source servicing 18,000 hectares of land.
Wilma Inventor Miranda
THE year 2010 is bringing about a rosy picture for the outsourcing industry. For the past years, I have always relied on the predictions of Everest Research Institute and I am not disappointed. As one who is not only actively involved in the outsourcing industry by profession but also as an advocate of the industry through my writings and through forums I organized for the Financial Executives Institute of the Philippines (Finex), I am careful on the resources from which I base the information I pass on to my readers and to the public as a whole.
Every start of the year I would write an article on the state of the outsourcing industry for the coming year. These articles were only focused on the finance and accounting outsourcing (FAO) sector because of the lack of space, and because this is the area where the services of our company is involved.
According to Everest Research Institute, 2010 will witness new contracts which will translate to a 20-percent growth in finance and accounting fees. In terms of expansion of scopes and renewals, there will be a 15-percent probable growth. This, despite the tough times in 2009 and the expected cost rationalization of certain industries in 2010. However, demand will become diverse—aside from the manufacturing and CPG industries, demand for outsourcing services will also increase from utilities, financial services and media. Geographically, demand will sprout in increasing number from Continental Europe and Asia-Pacific beyond the United States, which is the usual big customer.
Services will be more on by phases approach rather than a “big bang” approach, as Everest Research Institute termed it. Contract would be more of average in size with a modest shift toward large deals.
In the Philippines, I can see a big potential for growth. In December alone while I was still enjoying my holidays, I was receiving calls from potential clients who were looking for a complete outsourcing of their whole accounting department (not just in certain phases). With these kinds of calls, I really don’t mind if my holidays are interrupted— those are very much welcome interruptions.
This year will also see more of an end-to-end processing such as P2P (Pay to Procure), O2C (Order to Cash) or R2R (Record to Report) rather than piecemeal or functional processing. The past years, majority of the offshore outsourcing were more on AP processing (more of the functional type rather than end-to-end) since this is more efficient for a company to outsource rather than doing it in-house, especially if the provider is in another country. But this year it will not be only AP processing but more of P2P.
As I mentioned in my last month’s article, knowledge processing and the demand for analytics will be on the rise in 2010. This is a higher level type of processing examples of which are regulatory compliance, internal audit, risk management and other specialized F&A services. Not many outsourcing providers can offer these services because of the lack of expertise.
Although the past years saw a gradual emerging of platform-based FAO offerings, this year such services will have more demand from the market. This is because there is an increased competitiveness and suppliers have to come up with their own market differentiators, which could come in the form of innovative solutions such as these platform-based offerings. Other innovative solutions can come in the form of specialized services and industry-specific offerings.
In the same paper of Everest Research Institute, it foresees 2010 as a year for a revival of growth for the Philippines and India. However, this growth will lead to temporary shortages in talent and sharp increase in wages and attrition. Nevertheless, this will be a good problem for the industry, the problem being a consequence of a potential growth. The best thing the country can do is to find ways to avoid or overcome those problems so that 2010 will truly be a banner year for the outsourcing industry in the Philippines.
Globalization is the name of the game these days, and because of outsourcing, the Philippines has been in the map recently, being one of the favorite offshore destinations of companies abroad. Like India, we are making a name for ourselves, and look how far we have gone. From an unknown tropical island, we have emerged as one of the popular countries in outsourcing.
(Wilma Miranda is the chairperson of the publications committee of Finex. For comments, please e-mail her at firstname.lastname@example.org.)
Free Enterprise is a rotating column of members of the Financial Executives Institute of the Philippines, appearing every Wednesday and Friday.
Marvin A. Tort
I used to have higher regard for the Senate than the House of Representatives, primarily for two reasons: the quality of the chamber membership, with my perception that senators are more competent legislators than congressmen; and the Senate’s focus on national interests as opposed to the House’s preoccupation with local and even parochial issues.
But last Wednesday’s Senate session indicated to me that perhaps the Senate has already outlived its usefulness and that maybe the new administration, with a new Congress, should finally take time to review the Constitution. I have become more convinced that now is the time to amend the Charter and pave the way for the creation of a unicameral legislature.
Imagine having national interest held hostage by a group of senators as they opted to wittingly absent themselves from session and thus prevent a quorum. And obviously, without a quorum, the Senate could not go about its business. As such, the session was adjourned shortly after opening, with a number of important issues left hanging, including allegation of unethical behavior by a senator now running for president.
As voters contemplate a new set of legislators this coming May, perhaps the Wednesday episode should remain fresh on their minds as they also contemplate whether to abolish the Senate and opt to go unicameral. After all, one cannot help but feel shortchanged by some of the senators voted into office six and three years ago.
Without a Senate, people would not have wasted their votes in electing to the Senate a jailed mutineer who was never allowed to hold office. Over 11 million people who voted Antonio Trillanes into office in 2007 as the No. 11 senator never got anything for their vote, not a thing. In a unicameral setup, given the same circumstances, only a local district would have been deprived of representation, but not a national constituency—perhaps 50,000 voters, but not 11 million.
In a unicameral setup, legislative work cannot be held hostage by lack of quorum if 11 or 12 lawmakers wittingly absent themselves from the session. In a unicameral legislature composed of over 300 parliamentarians, it is highly unlikely for the majority to bum around and skip work all at the same time. The likelihood of a stunt like the one at the Senate last Wednesday is higher in a chamber of only 22 (with Trillanes in jail and Lacson out of the country) than in a chamber of over 300.
And while a unicameral legislature may be unwieldy because of the sheer number of delegates debating an issue, it can also perhaps hasten the legislative process because there will no longer be a need for counterpart legislation from another chamber, and there will not be a need for a bicameral conference committee to reconcile differences between two versions of a similar or consolidated bill.
Also, experience shows us that the check-and-balance structure supposedly promoted by a bicameral legislature does not necessarily work efficiently in the Philippine setting. Ultimately, check and balance here relies more on the quality of legislators elected into office rather than the system and structure of the institution they are elected into. Even the best structure will fail without appropriate electoral reform. In electing lawmakers, the prevailing impression is garbage in, garbage out.
It is disgusting how some senators can seemingly spurn, even temporarily, their sworn oath to serve the public and to uphold the Constitution. I cannot imagine how their boycott of last Wednesday’s session had actually served public or national interest, even assuming there were no important bills to tackle at the session. If at all, their absence seems to benefit only one of their colleagues, but definitely not the voting public.
And even assuming that some senators were absent only as a protest to push a matter of principle, as elected senators of the Republic they do not enjoy the luxury of advocating a personal political agenda at the expense of national interest. Has it not been said that one’s loyalty to his or her party (or ally) should end where his or her loyalty to the country begins?
And for the sake of argument, even assuming that the C-5 controversy under investigation is motivated more by politics rather than the pursuit of truth and justice, senators do not enjoy the option of publicly bucking the system and the processes they themselves have instituted and have sworn to uphold. Why did they even bother to get elected to the Senate if they did not intend to be governed by its rules?
Invariably, how can the Senate expect people to willingly submit themselves to its processes if senators themselves question the same processes and refuse to abide by them? Should there be a set of rules only for senators and another set of rules for all others? If this should be the case, then perhaps it is truly time to abolish the Senate. God save the Republic.
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Thursday, 4 February 2010
Outside The Box
Once again the Arroyo administration is caught in a storm that could not have happened fifteen years ago or so.
The latest controversy is about the advertisements that were designed to cast this administration in a favorable light. Gallons of ink have been used to print tens of thousands of words showing to the ultimate degree how the administration’s economic and social development numbers are slanted and biased, untrue and distorted, ‘lies’ at the taxpayers’ expense just to fool the public into thinking that the wonderful world of the Philippines has changed so much for the better during the last ten years.
I am shocked. To think that a government would use public funds to tell the people that it did such a great job. This must be the first time it has ever happened since mankind crawled out of the caves and started speaking in complete sentences. I am being sarcastic of course.
But many of the local columnists and ‘experts’ are acting as if the Arroyo administration just invented the idea of political propaganda.
In the interest of keeping these pundits’ blood pressure and cholesterol levels down in the future, let me share some practical wisdom. All governments in every country at one time or another try to convince the people of their excellent job performance. And the more authoritarian and dictatorial the government, the more instances of propaganda.
For me, the ads were sort of like the resume of the Arroyo administration. We all know that our resume is designed to cast our past performance in the most favorable light. And if making a resume filled with half-truths, distortions, and bias were a mortal sin, I am afraid heaven would be much less crowded. Especially with us from the media and the press.
In truth, the critics of the administration did exactly the right thing fact checking and calling the administration on the information and data that was included in the ads. That is the right thing to do. But it did strike me as kind of funny that a newspaper would criticize the ads and at the same time were being paid hundreds of thousands of pesos to print the ads. If they were so concerned about the truthfulness and the waste of public money, why didn’t they just refuse the business?
Frankly, I assume that there are many like me that could not care any less about this issue. But it is surprising that the administration would have pushed through with this idea knowing that every little detail was going to be reviewed and examined like the Shroud of Turin for authenticity. The only legacy of this event will be that the administration came off looking like they tried to bend the record and failed. In the end it becomes disadvantageous except of course for the newspaper that increased their advertising revenue for the month.
In the good old days of the 20th century, yesterday’s newspapers were thrown away and quickly forgotten. What you printed last as long as the person with the best memory could remember. But with the internet and archiving, everything seems to last forever and everyone has access to a storehouse of information. The internet never forgets.
One of the most vocal critics of the Philippine education system also wrote in 2006 that the Philippines was so bad in English that it was hard to believe that the Philippines could ever compete against any other country in the outsourcing business. But that person would never admit to being totally and foolishly wrong in their analysis. And it is ironic that the newspaper in which this particular column appeared now publishes headlines like “$16 million BPO Center Opens” and “1000-Seat Service Delivery Centre Opens In the Philippines”.
But all of us ‘experts’ are the same. I sincerely beg you not to ever look in the archives of the Biz Mirror at some of my more ‘brilliant’ predictions from the past. It would just be embarrassing for both of us.
The information available on the internet is a valuable tool to keep everyone, not just governments, honest and truthful. But it is a double-edged sword. The internet spread the foolishness of global warming and at the same time, internet access to information exposed the scientific fraud and deception.
Whoever in the administration that designed the content of these ads is still living in the 20th century, the mid 20th century. As companies hire a computer hacker to test their cyber security, so to should someone have been given the task to test the validity of the political spin that frankly became embarrassing to the government. All this clamor could have easily been avoided while at the same time given an accurate but still politically flattering appraisal.
The information in these ads was plain silly. To say that the debt “ratings” improved when in fact it was the overall financial “outlook” that improved under Arroyo, made the ads look that they were not only grossly misrepresenting the truth but also ignorant about the meaning of the information presented.
Any goodwill that might have been created was not only lost but the ads were counter-productive. Haven’t they heard of Google?
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By Michelle Remo
Philippine Daily Inquirer
MANILA, Philippines—Standard & Poor’s has projected that the Philippine economy will outperform the government’s expectation and grow by 3.7 percent this year.
The government has set its economic growth target for 2010 at a range of 2.6 to 3.6 percent.
S&P said the Philippines will be able to follow through on its growth performance last year, when the country barely avoided a recession and grew by 0.9 percent while many other countries had registered contractions.
In its latest report, entitled “Global Credit Portal,” the credit-rating firm said one of the Philippine economy’s strengths is sustained growth in domestic consumption, which countered the ill-effects of declines in export incomes.
by Jeremiah F. de Guzman
Two US-based business process outsourcing companies plan to hire over 3,000 workers this year after launching their respective facilities in the Philippines Tuesday.
CSS Corp. and UST Global opened their BPO centers in Fort Bonifacio, Taguig City with capacities of 1,000 and 400 seats, respectively.
“We are looking at hiring around 1,000 people in the next 12 months,” Sajan Pillai, UST Global chief executive, told reporters in a media briefing.
UST Global has over 200 people filling the newly-launched 400-seat facility in Fort Bonifacio.
Pillai said the company planned to occupy more floors in the next few months and was looking at opening another site in the Philippines, preferably in new wave cities like Cebu.
Pillai said UST Global expected its workforce to grow between 3,000 and 5,000 over the next three years.
UST Global expects revenues of $32 million from its BPO facility in the country this year and over $150 million in annual income in the next three years after the firm beefed up its workforce.
Headquartered in Viejo, California, UST Global is part of the $60-billion Comcraft group, which has over 7,000 employees in India, Vancouver and Chile.
CSS, meanwhile, will beef up its workforce from 400 to around 2,000 this year in its bid to become a strong player in the Philippine BPO sector.
“On the BPO part of our business, we see that our Philippine delivery center will contribute 20 percent to 25 percent in our revenues in the next few years,” CSS chief executive Nick Sharma said.
He said the company’s $15-million new delivery center was the first phase of a long-term investment in the Philippines. CSS is looking at sites in the provinces for its second facility.
CSS Philippine delivery center is the second-largest BPO facility of the company, next to its operation in Chennai, India. It also has operation centers in Utah and Poland.
P12B earmarked for 11 new malls in RP, China
By JAMES A. LOYOLA
SM Prime Holdings Inc., the country’s biggest mall developer, is planning to raise $300 million from both domestic and international investors by being among the first to issue real estate investment trusts (REITs) in the Philippines.
In an interview yesterday during the opening of the new P500 million annex in SM City Fairview, SM Prime executive vice president Jeffrey Lim said they are currently shopping for a financial adviser that will help them package the fund raiser.
He said they have yet to decide how many and which malls will be included in the asset pool but noted that these will have to be ones that are already providing a regular stream of profits.
Lim said they can be expected to issue the REITs as early as May when the implementing rules and regulations for the REIT law have already been issued. He noted that the law has already been published and the IRR should come out 90 days after the law becomes effective.
“REITs will help develop the capital market by bringing in new investors while allowing us to unlock the value of our properties,” said Lim noting that the size will have to be big enough to attract foreign investors who will provide the issue with liquidity.
Lim said proceeds from the REIT offer will help fund the firm’s capital expenditures program this year amounting to P12 billion of which P8 billion will be used to start construction of five new malls in the country while P4 billion will be spent for its expansion in China.
SM Prime is starting construction this year of malls in Calamba (Laguna), Tarlac, Novaliches, Masinag (Antipolo), and San Pablo (Laguna) which are targeted for opening in 2011. In China, construction will start in Chong Qing.
For next year, SM Prime will start building malls in General Santos City, Commonwealth Avenue in Quezon City, Lanang (second mall in Davao City) and its second mall in Cebu to be located in La Consolacion, South Reclamation project.
Lim said they expects [sic] to add 300,000 square meters to their current gross leasable area of 4.5 million square meters this year and another 300,000 to 350,000 square meters next year.
According to Lim, SM Prime is expected to post a net income growth of 8 to 10 percent in 2009 on the back of revenue growth of 12 to 15 percent, boosted by earnings of new malls as well as rising sales from existing malls.
He added that the firm also expects 2010 to be a better year financially based on the forecast economic growth of as much as 4 percent combined with the opening of five more malls this year.
Neil Jerome C. Morales
LISTED SM Prime Holdings, Inc., the country’s largest mall operator, will invest P12 billion this year to put up 11 new malls until 2011, an official said yesterday.
The Henry Sy-led firm is looking to tap the new Real Estate Investment Trust or REIT Law and secure about $300 million of funds to help finance the expansion.
The new malls will ensure profit growth of the firm, which likely rose by 8%-10% last year, Jeffrey C. Lim, chief finance officer of SM Prime, told reporters at the sidelines of the formal opening of SM Fairview’s second annex.
“[Capital expenditure] for this year will be about P12 billion. We are spending P8 billion for the Philippines and P4 billion in China,” Mr. Lim said.
This will be the second straight year that SM Prime will spend P12 billion, after almost doubling investments from P6.5 billion in 2008 -- P6.5 billion for the Philippines and P5.5 billion for China -- to open three new malls.
This year, SM malls will rise in Calamba and San Pablo in Laguna, Tarlac City, Novaliches in Quezon City, Masinag in Antipolo, and in Suzhou in China, Mr. Lim said.
“There are several options for us, but the major fund-raising vehicle we will look at is the REIT,” Mr. Lim said.
But SM Prime has yet to decide the number of malls to be included in the REIT pending the law’s implementing rules.
In December, the REIT bill, which will allow companies to use the pooled capital of investors to buy and manage property and mortgages, lapsed into law.
A surplus in the REIT proceeds might be used to pay debts, Mr. Lim said. Next year, SM Prime has maturing debts of $30 million.
At the end of the year, SM will have 41 local malls totaling 4.5 million square meters, and four malls in China. “We will also start to construct malls that will open in 2011,” Mr. Lim said.
Next year, SM malls will rise in General Santos, Commonwealth in Quezon City, Lanang in Davao City, La Consolacion in the town of Liloan in Cebu, and in the town of Chongqing in China.
It’s a close race
By ELLALYN B. DE VERA
Four months to the May 2010 elections, the presidential contest has become a neck-and-neck race between frontrunner Senator Benigno "Noynoy" Aquino III and his closest rival, Senator Manuel Villar Jr., with the latest Pulse Asia survey showing Aquino nursing a narrow two percentage lead.
The results of the nationwide survey conducted from January 22 to 26 with 1,800 respondents showed Villar (Nacionalista Party) catching up fast with Aquino (Liberal Party) with ratings of 35 percent and 37 percent, respectively, considered a statistical tie.
Compared to the December 2009 survey, the electorate’s support for Villar improved by 12 percentage points from 23 percent, while preference for Aquino declined by eight percentage points from 45 percent.
Pulse Asia pointed out that the only other presidential candidate with a double-digit preference is former President Joseph Estrada (Pwersa ng Masang Pilipino) at 12 percent, although Estrada’s numbers also declined by seven percentage points compared to the December survey.
Across regional areas, Aquino took the lead in the National Capital Region with 38 percent support against Villar’s 24 percent.
The two frontrunners registered nearly the same preference in the rest of Luzon outside of Metro Manila (Aquino, 37 percent; Villar, 36 percent); Visayas (Aquino, 41 percent; Villar, 38 percent); and Mindanao (Villar, 36 percent; Aquino, 33 percent).
Across socio-demographic groups and taking the error margins for the subgroups into account, Aquino led among Class D (40 percent) and among the elderly aged 65 years and over (42 percent).
Meanwhile, Villar led in the 25-34 age group with 42 percent.
Pulse Asia explained that voter preferences for the two leading candidates are essentially the same across other socioeconomic classes and age groups.
Voter preferences for the other presidential candidates did not register marked changes between the two survey periods in December and January. Former Defense Secretary Gilbert “Gibo” Teodoro (Lakas-Kampi-CMD) has five percent, Jesus is Lord evangelist Bro. Eddie Villanueva (Bangon Pilipinas) with two percent.
Senator Richard Gordon (Bagumbayan) has one percent, Senator Jamby Madrigal (independent) with 0.5 percent, Olongapo City Councilor JC Delos Reyes (Ang Kapatiran Party) with 0.3 percent, consultant Vetallano Acosta (KBL) with 0.2 percent, and Nicanor Perlas (independent) with 0.05 percent.
In the vice presidential race, nearly half of the voters or 47 percent said they would vote for Senator Manuel “Mar” Roxas II (LP), while Senator Loren Legarda (NP) ranked second with 28 percent and Makati City Mayor Jejomar Binay (PDP-Laban) in third place with 13 percent.
Among the vice presidential bets, only Roxas and Legarda registered significant movements in voter preference between Pulse Asia’s December 2009 and January 2010 surveys, with an increase of eight percentage points for Roxas and a decline of nine percentage points for Legarda.
The other vice presidential candidates garnered at most 2 percent voter preference. Metropolitan Manila Development Authority (MMDA) chairman Bayani Fernando has 2 percent; actor-politician Edu Manzano, 2 percent; former Securities and Exchange Commission chairman Perfecto Yasay, 1 percent; broadcaster Jay Sonza, 0.2 percent; and lawyer Dominador Chipeco Jr., 0.07 percent.
Despite its candidate’s narrowing lead, the Liberal Party said it remains confident that Aquino will maintain his lead over Villar.
LP campaign manager Florencio Abad said the survey ratings would change significantly once the public learns about the truth behind the P6.2-billion C-5 Road Extension scandal being linked to Villar.
Abad said Villar’s rating shot up "purely due to his huge war chest,” which he said has enabled the former Senate President to flood the broadcast media with his campaign ads, "a far cry to the little air time that Aquino has been able to get due to limited financial resources."
Villar has reportedly outspent the LP standard bearer with a ratio of seven to one in TV advertisements from January 22 to 24, the period when all of the pre-election surveys were conducted.
"This is a gimmick that private companies usually engage in to improve the ratings of their products in market research services," Abad said.
Abad said the LP will intensify Aquino’s television ads during the campaign period to “stabilize his lead.” (With a report from Kris Bayos)
Wednesday, 3 February 2010
Originally published 1 February 2010
Outside The Box
You may have happened to see that President Arroyo visited the offices of Business Mirror last week for lunch. We are told that this is part of an effort on her part to make her more easily accessible to the press and perhaps at the same time, meet in a friendlier environment.
The luncheon was hosted by Business Mirror owner Ambassador Antonio L. Cabangon Chua, one of the very few men that I hold with the highest degree of respect. Tony would have made a good president except for probably failing as a politician. I think he is too straightforward and outspoken for the political arena. But that is another story.
I have to say that I felt honored to be able to attend this lunch with the President. I know that in the Philippines, we tend to behave and have the mindset of a small village where everyone is ‘equal’ and everyone knows everyone else’s business. I mean tens of millions of Filipinos are constantly and intimately involved in Kris Aquino’s terrible relationship life. Maybe a little too involved. But that is the Philippines.
Sitting and listening to President Arroyo though, made realize some things.
I am not a total stranger to politicians. I have had the pleasure of numerous business meetings and the inevitable after-business-beer with a current presidential candidate with whom I have attended several purely social functions. I have shared an afternoon coffee and brandy with a former President on a couple of occasions. A Vice-President hopeful used to occasionally attend a casual lunch for some local columnists. My local Congressman is a very good person who is always accessible to his ‘ordinary’ friends.
Nevertheless, this lunch with the President was different and made me realize a few things.
I had briefly met the President once before, soon after she became Vice-President. Of course, that was a ‘lifetime’ ago and the responsibilities and the years change people. But I can say that then she seemed ‘fresher’, less burdened than she does now. Of course, that is to be expected now that she has weathered nine years as the leader of 90 million Filipinos.
But as I listened to the chat at the lunch table, I realized that there were actually three persons sitting at the head of the table. There was Gloria Macapagal Arroyo the President of the Philippines, Arroyo the politician, and Gloria the person, all three very different personalities.
The President struck me as someone who had grown into the duties and responsibilities of the job well. If the President is the Chief Executive Officer of the country, then this lady knows her job. She had the facts and data at her fingertips as a good CEO should. And when she was unsure, she had the professionalism and self-confidence to both admit that and to pledge to find out what the truth of the matter was. The President had a sense of self-confidence that was both appropriate and satisfying.
The Politician was more predictable and in truth, as with all politicians, slightly annoying. It is just the nature of the game. A politician must by definition cast themselves in the most favorable light and defend the record without being too obvious in defending their record.
The Person was much more interesting and enjoyable to be around than the Politician. She spoke with one of the other women at the table about a slight allergy she was having, her doctor’s advice, and the exchange between the two women was typical and pleasant.
The three personalities of the President, Politician, and Person were always there and came out in intriguing ways.
Mrs. Arroyo began speaking about education and the needs of the country. She said, as the Politician, that her Administration had built more classrooms than any other President. But then the ‘President/CEO” said that she had fought hard to make the bureaucracy understand that it was acceptable to just build even first and second grade classrooms for the time being until a full elementary school could be completed because it was a good positive start. Then the Person, who obviously does have a keen interest in the children’s education, took over describing what she had seen and heard visiting schools around the nation. She sounded like a parent who could identify with other parents trying to build a better life for their children.
Certainly when you vote for an officeholder, you must consider all the three parts including the Politician and Person as well as the Position. However, the political and election process keeps us from ever getting a clear picture of the Person, who after all, maybe the most important part . . . or maybe not. I know of one Senator who is perhaps one of the most disagreeable people I have ever met. I personally cannot understand how anyone could ever like this person. Yet as a Senator, I do not think you could find any more knowledgeable or hardworking office holder.
We take too much of our impressions of the candidate and existing office holders from the press and media. The campaign trail is about as close to reality as Disneyland. One new aspect of American politics is the Town Hall meeting where a small group of citizens go one on one with the candidate as the exchange is televised. This might be something that should be tried in the Philippines. I think it would be good for both the people and the politicians. And more importantly, I think both could handle the familiarity and closeness, free of press and media interference.
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Joyce Pangco Pañares
PRESIDENT Gloria Arroyo said Monday the government will renegotiate a $500-million loan agreement with the Export-Import Bank of China that will finance the Malolos-to-Clark section of the Northrail project, and to ensure that safety and engineering standards are met.
“We have the option to renegotiate the agreement instead of extending the loan agreement. It is probably better to renegotiate the terms of the agreement,” Mrs. Arroyo said.
“The project has become controversial because under the agreement, Chinese laws are upheld. If we renegotiate it, we can ensure that our own standards are used,” the President said.
China’s Export-Import Bank earlier provided a $400-million loan for the $503-million section 1 of Northrail Phase 1 that will have stations in Caloocan, Valenzuela, Bocaue, Guiguinto, and Malolos.
Section 2 will run from Malolos to the Diosdado Macapagal International Airport in Clark.
North Luzon Railways Corp. acting president Zoilo Andin Jr. said clearing operations for the railway’s section 2 had started, while the Chinese firm Sinomach, which used to be known as China National Machinery and Equipment Corp. Group, was working full blast on the railway tracks for section 1.
Deputy presidential spokesman Gary Olivar said a renegotiated contract would entail using local safety and engineering standards if these proved to be more stringent than those provided for by Chinese laws.
Olivar said the loan amount might also have to be adjusted.
The Northrail Project is expected to reduce travel time from Caloocan to Clark by an hour and 49 minutes, while the Northrail-Southrail link will make travel from Caloocan to Calamba, Laguna, shorter by an hour and 20 minutes.
Rise in foreign capital inflow to prop up currency
By Michelle Remo
Philippine Daily Inquirer
THE BANGKO SENTRAL NG PILIPINAS expects the peso to remain strong this year and help temper the rise in consumer prices, keeping it within the government’s ceiling.
According to the BSP, the strength of the peso will be sustained this year given the improvements in investment sentiment worldwide. Confidence, especially on emerging economies, will help increase foreign capital flows that, in turn, will keep the peso strong.
“The appreciation of the peso resulting from foreign exchange inflows could temper the increase in domestic prices of imported commodities,” according to the minutes of a recent meeting among members of the BSP’s Monetary Board.
The peso’s appreciation to the 46-to-a-dollar level started late last year as portfolio inflows to emerging markets began to rise due to easing global economic concerns.
Monetary officials said the Philippines and other emerging economies would benefit from renewed investor confidence given the resiliency shown by these countries at the height of the global.
Although the peso remains in the 46 level, it temporarily moved into the 45 territory in January.
Latest “hot money” data from the BSP showed that the Philippines registered $147 million in net foreign portfolio investments in the first two weeks of January, improving from $121 million in the same period last year.
According to the minutes of the Mon etary Board meeting, the BSP further said that inflation outlook of the private sector remained benign and in line with the government’s official target.
The BSP this year has set a goal of keeping inflation within a range of 3.5 and 5.5 percent. Monetary officials said its latest estimates showed that the average increase in consumer prices would not reach 5 percent and likely settle at only 4.7 percent.
An appreciation of the local currency makes imported goods cheaper in peso terms, thereby tempering the overall increase in prices.
The BSP said it would keep a policy of allowing a market-determined exchange rate.
The BSP claims it only intervenes in the market in cases of sharp volatility—be it appreciation of depreciation—of the local currency that may cause severe disruptions to business operations of exporters and importers.
Apart from a relatively strong peso, the modest growth of the economy is also expected to temper inflation. The domestic and global economies are only starting to gradually recover from the downturn, and growth rates will only be modest, the BSP said. Consequently, demand for goods and services will increase minimally.
Average inflation for 2010 may be faster than the 3.2 percent registered last year, the BSP said, but it will remain within tolerable levels.
“The widely held assessment is for commodity prices to increase moderately in the future given the outlook of a gradual global economic recovery,” the BSP said.
Tuesday, 2 February 2010
Louella D. Desiderio
AYALA-LED Bank of the Philippine Islands (BPI) yesterday reported a 33% increase in its consolidated net income in 2009 due to higher net interest and non-interest earnings.
In a disclosure to the Philippine Stock Exchange, the bank, the country’s third largest in terms of assets, said its unaudited net income for 2009 reached P8.5 billion, up from P6.4 billion in the previous year.
“After all the doom and gloom at the beginning of the year, we are grateful that BPI had solid growth and earnings in almost all sectors in 2009,” BPI President and Chief Executive Operating Officer Aurelio R. Montinola III was quoted as saying in the disclosure.
BPI shares shed a peso to close at P44.50 apiece yesterday.
BPI said its total revenues rose by 15% due to the 10% growth in its net interest income and 25% increase in non-interest income. BPI did not provide the amounts.
Net interest income grew due to a 9% increase in the bank’s average asset base and improvement in net spreads.
Net loans, however grew by only 2%, as multinationals tapped other funding sources.
The bank, however, notched increases in credit card loans, SME loans, consumer loans and middle market company loans.
The bank’s non-interest income, meanwhile, BPI said, was up due to earnings from securities trading.
The bank recorded a securities trading gain of P1.5 billion, a turnaround from losses in the previous year.
BPI said there were also gains from asset sales, rental, income and insurance operations and saw increases in various fees and commissions. It did not provide figures, however.
BPI’s unaudited total resources reached P725 billion, 9% higher than in 2008.
Total funds managed by the bank was up by 22% to P1 trillion.
Deposits grew by 7% to P579 billion, while assets under management increased by 50% to P439 billion.
Remittances posted a 15% growth as the bank accounted for more than 20% of the overseas Filipino remittance business.
“While there continue to be differing views on the strength of the recovery in 2010, we are confident that BPI will continue to serve its clients in a proactive financial advisory manner and be an innovative financial trailblazer in this new decade,” Mr. Montinola said.
“With the global economic recovery under way, we expect BPI to even perform better in 2010.”
BPI recently launched a mobile microfinance bank and has partnered with the Philippine American Life Insurance Co. for its bancassurance business.
Sunday, 31 January 2010
by Jeremiah F. de Guzman
Asia Broadcasting Systems, a major satellite operator in Asia, is transferring the control of $800 million worth of equipment to its Subic facility this year.
ABS chief executive Tom Choi said in a statement that the company would beef up its workforce by over 50 percent in two years and train staff for the transfer of the control operations to the Subic center from the southern part of Hong Kong.
“In short, an $800 million worth of satellite equipment will be controlled in our operating center in Subic,” Choi said.
The Subic center, he said, would control five of the company’s satellites—ABS 1, ABS 1-A, ABS 2, ABS 5 and ABS 6.
The satellites serve the firm’s markets in Asia-Pacific, Russia, Africa and the Atlantic. ABS recently acquired Mabuhay Satellite Corp. of the Philippines, which operated the Agila-2 satellite, now renamed ABS-5.
Choi said ABS would invest over $5 million for training and additional infrastructure in its ground facility in Subic, adding that the firm would hire a minimum of 20 new employees this year.
“The investment will include new control equipment, new software, big antennas and satellite control equipment that will all be located in our Subic control center,” he said.
Choi added the company would spend an additional $300 million for another satellite to replace Agila 2 in preparation for its retirement in five years.
“Our investments in the Philippines will be long term,” he said.
ABS, whose control operations are in Hong Kong, said its main clients in the Philippines are telecommunication and broadcasting firms, including Philippine Long Distance Telephone Co., Bayan Telecommunications Inc., GMA Network Inc. and ABS-CBN Broadcasting Corp.
ABS in November signed an agreement for the purchase of Mabuhay Satellite’s business.
“ABS will maintain all of Mabuhay’s operations in the Philippines and the staff will be integrated with the ABS team,” Choi said.
He said revenues from the Philippines would account for 15 percent to 20 percent of the total after the merger.
By EMMIE V. ABADILLA
Within the next two years, Asia Broadcast Satellite (ABS) is investing US$800 million in 5 satellites to be controlled by Filipino staff from its hub at the Mabuhay Satellite Corporation (MSC) Subic Space Center, announced ABS CEO Tom Choi.
ABS plans to list in the 3 big international bourses within the next three years.
Initially, ABS is sinking in $205 million at MSC, which it has bought for an undisclosed price and then $300 million to build a second satellite, ABS2. “This acquisition is strategic for ABS,” he acknowledged.
The company, one of the youngest satellite operators in Asia, is expanding its satellite fleet and business worldwide by procuring new high powered satellites and expects 15 percent of its revenues will not [sic] come from its Philippine operations after the consolidation of MSC.
MSC was the first Philippine entity to own and operate a communication satellite. Its Agila 2 satellite, launched in 1997, is good for another half decade. It covers Asia, from India to the Philippines, Japan to Indonesia and connectivity to the USA from its spot beam over Hawaii. Its transponders provide capacity for TV distribution, DTH and VSAT services in the Philippines, Coastal China, Taiwan and Hong Kong.
“The acquisition will ensure the future continuity of MSC’s Subic Space Center and ensure its expansion to support ABS growing satellite operation needs,” acknowledged MSC CEO Gabriel Z. Pimentel.
ABS currently hosts over 90 channels on its ABS-1 satellite, making it one of the fastest growing and top satellite distribution platforms for Cable TV in the Indian Ocean Region. Its ABS2, slated to be operational in 2012 and operated from Subic, will be one of the largest FSS satellites to be launched over the Eastern hemisphere.
Together with ABS1, it will be the most powerful orbital position in the Asia Pacific and Indian Ocean region.
Overall, ABS will use its Subic control center to operate 5 satellites Agile 1 and 2, ABS1, 1a, 2 and 6.
“The MSC acquisition will augment the Philippines capability to fly multiple satellites to serve markets in Asia, Russia, Africa and the Atlantic Ocean,” according to Choi. “
A large American satellite manufacturer will provide training and engineering support for our Filipino staff to fly the five different satellites.”
By ARIS R. ILAGAN
Barely less than a hundred days before the May 10, 2010 elections, officials of the Commission on Elections (Comelec) Saturday again gave their assurance on the poll body’s readiness to implement the country’s fully automated elections despite the glitches during the first phase of field testing on the newly acquired Print Count Optical Scan (PICOS) voting and counting machines last week.
Citing at least three “good news” on the poll body’s preparations for the conduct of the May 10 elections, Comelec Commissioner Rene Sarmiento said they are optimistic that the poll body is ready to implement the first automated elections.
First, Sarmiento said there are about 14,800 PICOS machines that have already arrived in the country while another batch of 8,000 will be delivered in the coming days.
He added that a total of 48,900 electronic voting machines are expected to be delivered in the first week of February, expressing confidence that the entire 82,200 PICOS units will be delivered by February 21, the deadline set by the Comelec for Smartmatic Company.
Second, Sarmiento said that the Comelec has forged a memorandum of agreement with the Department of Education (DepEd) for the conduct of training of the teachers who will man the voting and counting machines during the elections. The training, he said, will start on February 10 as scheduled.
Third, he assured that the technical problems incurred during the first field testing operations in Taguig last week have been solved, claiming that the initial phase of the testing was “generally okay.”
Sarmiento, along with Commissioners Luisito Tagle, Armando Velasco, Lucenito Tagle, and Gregorio Larrazabal, took turns in answering queries about the poll body’s readiness in undertaking the automated polls during a forum initiated by radio station DZMM and held at the Pamantasan ng Lunsod ng Maynila.