Sayles pitch for RP

Filmmaker feels it’s vital to shoot in Bohol
By Bayani San Diego Jr.
Philippine Daily Inquirer
http://showbizandstyle.inquirer.net/entertainment/entertainment/view/20100406-262704/Sayles-pitch-for-RP

TAGBILARAN CITY, Philippines—It was Bohol or bust, as far as US independent filmmaker John Sayles was concerned.

Sayles, who just finished his 33-day shoot of the historical drama “Baryo” in the Visayan province, told Inquirer it was important for him to shoot his film in the Philippines.

After all, it was about the Philippine-American war at the turn of the 20th century.

He said he couldn’t see how Queensland, Australia or Shanghai, China could’ve doubled for the Philippines, as was the case in the World War II film “The Great Raid.”

The fiercely independent Sayles insisted on shooting in the actual country that was the setting of his screenplay inspired by his yet-to-be-published nonfiction book “A Moment in the Sun.”

“I felt I could only make this film here,” he said. “Plus, the Philippines has a real movie industry. Our cast and crew are film professionals who’ve experienced working in every type of movie.”

Government assistance

The Film Development Council of the Philippines was also helpful, he related. “The government facilitated getting people and things in and out of Bohol … and also helped in some tax structures.”

Maribojoc Mayor Leoncio Evasco Jr. was also accommodating.

“There’s a municipal ordinance that seeks to promote film production and arts and culture in Maribojoc (the film’s main location),” Evasco said.

Safe to shoot

Sayles asserted that it’s safe to shoot in the Philippines, contrary to the common impression in Hollywood.

“It’s just crazy. Insurance companies get paranoid and generalize,” he said. “They don’t realize that the Philippines is composed of thousands of islands.”

When something happens in Mindanao, it doesn’t necessarily affect Bohol, he explained.

Not that Sayles would turn his back on a challenge.

He shot in Mexico (“Men with Guns”) at a time when the military was battling with rebels. “There was a small revolution 15 miles away from us,” he quipped. “But I’m very careful about things like that.”

Rediscovering RP

After “Baryo,” he hopes more foreign productions would consider the Philippines as location.

“I think people will start rediscovering the Philippines,” he said. “A lot of American movies were shot here in the 1970s. My friend (and Oscar winner) Jonathan Demme shot here. So did Oliver Stone.”

According to producer and partner Maggie Renzi, Sayles has decided to stay in Bohol to edit “Baryo.”

Peso breaks into ‘44’ territory

Erik de la Cruz
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=23823:peso-breaks-into-44-territory&catid=23:topnews&Itemid=58

THE peso jumped into the 44-per-US dollar territory on Tuesday, hitting its strongest in nearly 20 months, as funds continued flowing into Asian markets amid growing optimism about economic- growth prospects in the region.

Investor interest in Asian currencies was further lifted after the Reserve Bank of Australia lifted interest rates by 25 basis points on Tuesday, and by upbeat data suggesting the US recovery from recession was intact, traders said.

The Philippine unit rose 0.2 percent to 44.93 against the dollar, from Monday’s close of 45.01. It hit a high of 44.82 early in the session.

A total $1.026 billion changed hands on the electronic trading platform of the Philippine Dealing & Exchange Corp., 29 percent higher compared with the previous session’s volume of $796.29 million.

Traders said the Bangko Sentral ng Pilipinas was rumored buying dollars from the market on Tuesday to slow the peso’s rise. The central bank was recently seen intervening with substantial dollar purchases.

“I think the peso appreciation trend will continue given the improving Philippine economic fundamentals and the onset of the remittance season,” said Marcelo Ayes, senior vice president and head of the financial-markets group at Rizal Commercial Banking Corp.

Overseas Filipinos are expected to send home more money for the expenses of their children before schools open in June.

“The peso is supported by inflows,” he said.

Investor appetite for risky but high-yielding assets in Asia continued to rise, with sentiment lifted by Friday’s upbeat US employment figures and better-than-expected data on services and home sales released on Monday.

Jose Arnulfo Veloso, head of treasury at HSBC Philippines, said Asian currencies were further boosted by the rate-hike move of Australia.

The rate hike, analysts said, suggested that economic growth in the region was gaining momentum. Other central banks in Asia have also lifted interest rates this year, including those of Malaysia and India.

DBS Bank of Singapore said the upward surge in industrial output in Asia that has been underway for more than a year now shows absolutely no sign of letting up.

The rest of the world is recovering and that adds some gas to Asia’s fire, both in terms of fundamental demand and improving confidence, DBS, Southeast Asia’s largest bank, said in a note.

“The market may test 44.70. If that is breached, the next key level is 44.50,î Ayes said. We see the peso hitting a high of 43.75 by May.

San Miguel entering expressway, train projects

E. N. J. David
BusinessWorld
http://www.bworldonline.com/main/content.php?id=8529

DIVERSIFIED conglomerate San Miguel Corp. yesterday confirmed it had begun the process to acquire shares in the proponents of the North Luzon East Expressway (NLEE) and the Metro Rail Transit 7 (MRT-7) projects, in a bid to gain a foothold in the infrastructure sector.

In a disclosure to the Philippine Stock Exchange, San Miguel said it was in talks with Ausphil Tollways Corp. to acquire 67% of the company.

San Miguel was previously reported to have acquired a majority stake in Ausphil Tollways, and would supposedly be involved in securing land for the expressway.

The NLEE will run from Commonwealth Avenue in Quezon City to Bulacan. The first phase of the project involves construction of an 18.9-kilometer road from Quezon City to Norzagaray in Bulacan. The second phase involves the construction of a 36.9-kilometer road from Norzagaray to Nueva Ecija.

San Miguel also disclosed it had signed a memorandum of understanding with the Universal LRT Corp. for a majority stake.

“The company has signed a memorandum of understanding with Mr. Salvador Zamora III for the purchase of a majority stake in the [MRT-7] Project,” the food-to-power conglomerate said.

Universal LRT is the main proponent of the MRT-7. Previously, it said financial adviser Morgan Stanley had approached San Miguel to be a part of the project.

The MRT-7 will be a build, transfer, operate, maintain, and manage project for a rail transit line that will extend from North EDSA or Epifanio de los Santos Avenue at the end of the MRT Line 3, to San Jose del Monte in Bulacan with 14 stations: North EDSA, Quezon Memorial Circle, University Avenue near the University of the Philippines, Tandang Sora, Don Antonio, Batasan, Manggahan, Doña Carmen, Regalado, Mindanao Avenue, Quirino, Sacred Heart, Tala and San Jose del Monte.

A transport terminal for buses will also be built in San Jose del Monte.

The proponent of the MRT-7 is seeking a 25-year concession, and expects to complete the line by 2013. Universal LRT is a consortium of the Tranzen Group, EEI Corp. and SM Prime Holdings. The consortium was granted the right to proceed with the project in 2008.

San Miguel also confirmed that it had secured the option to increase its stake in Private Infrastructure Development Corp. (PIDC) to 51% from 35% through subsidiary Rapid Thoroughfares, Inc. PIDC is a consortium of construction companies set to build the Tarlac-Pangasinan-La Union Expressway.

San Miguel’s “A” shares closed at P74.00 apiece in yesterday’s trading, up by 0.7% from its previous close of P73.50. “B” shares remained at P74.00.

RP is No. 2 outsourcing nation in the world

By EMMIE V. ABADILLA
Manila Bulletin
http://www.mb.com.ph/articles/251343/rp-no-2-outsourcing-nation-world

Although the Philippines remains largely unknown to many global clients, it was the Number 2 offshore outsourcing nation in the world next to India while the National Capital Region (NCR) of Manila ranked number 4 among outsourcing cities after Bangalore, Delhi and Mumbai, confirmed the 2009 Global Services/Tholons Top 50 Emerging Outsourcing Cities report.

While the Philippines has only a tenth of India’s population, it has taken 15 percent of the offshore Business Process Outsourcing (BPO) market, just under one third of India’s offshore BPO market.

Even as businesses reeled from the global recession, the country’s BPO sector has continued to post double digit growth every year, stressed Business Processing Association of the Philippines (BPAP) CEO and President Oscar Sanez. “We have seen the strength and resilience of this industry despite the crisis.”

Last year, the contact center sector grew 20 per cent in revenues versus its 14 per cent growth in 2008. Overall, the BPO industry grew 19 per cent and hauled in $7 Billion revenues. “We are employing 442,000 people, of whom 70,000 entered the workforce in 2009. The industry currently contributes to 5 per cent of the Philippines Gross Domestic Product.”

For 2010, the BPO sector targets 26 per cent growth and projects revenues will total $9.5 Billion, according to the BPAP President. “We are back to our ratio of conducting three to four investor meetings a week. Some of those we win, some we don’t, but overall, we have seen the opening of many delivery centers last year. Now, there’s a surge of new inquiries about the Philippines.”

Significantly, investors believe that the BPO industry is “part of the solution to the crisis”, he underscored. “Many of them, under pressure to reduce their cost structure, have considered outsourcing and offshoring to boost their competitiveness.”

RP financial system resilient, says IMF

Manila Bulletin
http://www.mb.com.ph/articles/251347/rp-financial-system-resilient-says-imf

The International Monetary Fund said the Philippines' financial system appears resilient to a broad range of macroeconomic risks, helped largely by the considerable strengthening of local banks that dominate the financial sector.

"Since the Asian crisis of the late 1990s, a benign economic environment, bank restructuring and consolidation, and the shedding of non-performing assets have all helped improve bank soundness," the IMF said in an update to its Financial System Stability Assessment for the Philippines, released Monday.

"Partly as a result, the impact of the current global crisis has thus far been milder than initially expected. Although macroeconomic risks remain elevated, the banking system is well-capitalized and liquid, and asset quality is generally high," the IMF said.

Banks account for about two-thirds of the Philippine financial system's assets.

Stress tests suggest that the 10 largest banks are resilient to a wide range of credit, market and liquidity risks, the IMF said.

Still, it said that asset quality of thrift, cooperative and rural banks is weaker and provisions are low.

Trains to Alabang; New bus scheme eyed on C-5

Jeremiah de Guzman and Rio N. Araja
Manila Standard
http://www.manilastandardtoday.com/insideMetro.htm?f=2010/april/5/metro1.isx&d=2010/april/5

Philippine National Railways commuter service up to Alabang kicks off today to complete phase one of the NorthRail-SouthRail Linkage while C-5 gears up for the bus rapid transport to avoid the pitfalls of Edsa.

In an interview, general manager Manuel Andal said trips would cover the stretch from Tutuban in Tondo, Manila to Parañaque City.

“We’ll start our operation up to Alabang with 36 trains a day or 18 trains back and forth,” he said, noting that six sets of trains or 18 coaches will be fielded.

The first trains leave Tutuban and Alabang simultaneously 6 a.m.; the last trains leave their respective terminals at 7 p.m. daily.

Executive director Angelito Vergel de Dios, of the Metro Manila Development Authority, said the 19.7-kilometer C-5 road would make use of lessons learned from the Organized Bus Route Scheme of Edsa and its different bus firms competing for riders.

“We will be conducting a feasibility study to determine the viability of a bus rapid transit,” he said.

Then Chairman Bayani Fernando visited Latin America to observe the BRT system, which involved non-reliance on commissions as basis for setting the take-home pay of drivers and conductors.

The model has inner lanes devoted to the BRT with both outer lanes used by regular traffic.

“We have to regulate C-5,” De Dios said, calling for MMDA’s control of the circumferential route that joins the Coastal Road road to Cavite, along with South Luzon and North Luzon expressways.

He said Edsa gridlock was mainly due to the clutter of 90 bus operators doing business on limited space.

The $50-million initial NorthRail-SouthRail phase was bankrolled by Korean Export-Import Bank.

In March last year, 39th National Economic Development Authority Board confirmed the Investment Coordination Committee’s approval of a supplemental loan of $15 million or P645 million for the project.

The 34-km linkage’s delivery in November 2009 was delayed given a completion of around 90 percent at the time.

“Phase II of the Linkage Project is still pending with the [National Economic and Development Authority] Board,” Andal said.

At least $80.23 million would be needed for the rehabilitation and double tracking of the 27-km Alabang to Calamba of the PNR South Commuter Line along with the purchase of five train sets of three coaches each.

Biz outlook at 14-yr high

MV de Leon
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=23771:biz-outlook-at-14-yr-high&catid=23:topnews&Itemid=58

WITH the upcoming elections bringing hopes for a “fresh wind of change,” optimism of the country’s top businesses in the economy soared to a 14-year high, according to the latest Executive Outlook Survey of the Makati Business Club (MBC).

In the survey conducted last month, 89 percent of the respondents, who all belong to the MBC, believe that economic growth will be better this year compared with the 0.9-percent gross domestic product (GDP) expansion recorded in 2009

.

“This percentage of optimistic respondents is the highest in 14 years, surpassed only in July 1996 when 93.9 percent of respondents believed economic growth would be higher than the previous year,” the MBC said in a statement.

Alberto Lim, MBC executive director, said that besides the base effect considering last year’s 11-year low GDP growth, businesses are also anticipating a “fresh wind of change” with the May elections.

However, Lim said this optimism could easily be erased if businesses are not satisfied with the outcome of the elections.

“The assumption is there will be change, so the underlying reason for the confidence [lies in] the changes that will be brought by the elections. If the result of the election is not good, then that confidence will change. At least right now, there is hope because there is opportunity for change unlike last year,” Lim told the BusinessMirror.

In the 2009 survey, only 2 percent expected the 2009 economic performance to surpass the 2008 GDP growth rate.

This year, majority of respondents foresee a more favorable trend in 2010 for most of the other major economic indicators.

These include a stable peso (36.5 percent), higher levels of investments (66.2 percent), exports (74.3 percent), and imports (73.0 percent). M.V. de Leon

Second-quarter thoughts

John Mangun
Outside the Box
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=23750:second-quarter-thoughts&catid=28:opinion&Itemid=64

As we enter the second quarter of 2010, it might be helpful to look back at the first quarter, creating some sort of a report card for the economy and the nation.

But that would be completely boring and would simply be repeating all the things that you already know. The stock market is up. The peso is up. Remittances are up. Exports are up. Imports are up. Foreign fund inflow is up. Investment is up. What else do you need to know?

Maybe it would make more sense to look at what the second quarter might hold for the nation.

The big event for the next three months will be the election and inauguration of a president and countless other national and local officials. Unfortunately, again the election focuses on character rather than competency, on popularity rather than policy.

Almost everything connected to the political process makes the election for president a beauty contest. Although it seems that everyone complains about that fact, everyone encourages the beauty-pageant mentality. The media breathlessly announce the latest opinion polls on the candidates. And the survey itself does not do anything to enhance the political discussion or help change the way voters choose a candidate. The only question asked is “If the elections were held today, whom would you most probably vote for?”

Voters are the most important and least respected part of the political process. If the surveys were honest, they would ask questions like “What do you think of Candidate A’s singing?” or “Which candidate has the best campaign colors?”

Why not ask the voters “Which candidate has the best ideas for improving the economy?” or “Which candidate has the best ideas for improving peace and order in Mindanao?”

Two things would then happen. The voters might start thinking about issues and policy and not about popularity. Further, if the candidates received a low rating on “The Issues,” they might start addressing the issues with solid and precise policy ideas instead of thinking about which starlet would better dress up their campaign sorties.

When it comes to policy, we get general statements that “Government must do more to improve the economy.” When they move into specifics, worst case is to form some sort of committee to talk about it, hold hands together, and hope real hard for an effective agenda. The best case of policy discussion goes only a little farther. “We need to help small and medium enterprises with additional government funding and assistance.” Okay, what exactly does that mean and how do we do it efficiently and effectively, and how is it paid for?

Electing government leaders based on something other than clearly stated policy ideas and programs is fine. However, then no one has the right to complain when the elected official does not have any ideas or when those ideas are a failure. You get what you pay or vote for.

On to a more enjoyable topic. The Philippine stock market is poised and getting ready to reach to and break above the historic high. It is clear in the last three months that the economy has generated an abundance of excess cash that is finding its way into the stock market. Forget all the expert nonsense of whether or not stock prices are too high or too low. This rally is not about current valuation. It is all about future corporate value. It has taken hundreds of millions of pesos of investment in the Philippine Stock Exchange to raise prices this high and it will takes hundreds of millions more over the next months to go even higher. But it is going to happen.

Why is money flowing into the stock market? Well, excess cash is not going overseas to buy condos in San Francisco, that’s for sure. In spite of the poverty problem, overall per-capita income is rising in the country. More money in the broad economy means more money in the stock market. Investors are looking not only at future corporate earnings, but they are looking at companies increasing their return on equity and their return on investment. What that means is that local Filipino firms are making more money based on the amount of worth of their company. As a company makes more return on the amount of capital in the company, the value of that company becomes greater reflecting in a higher stock price.

Finally, investors are looking at the amount of confidence local companies have in their own future. When you see large companies increasing their capital expenditure and making significant reorganizations in their structure, these are companies that are optimistic about the months to come.

Having said all these nice things about the Philippine economy, there is one factor that has been slow to rally, and that is bank lending. Interest rates have been very low this past year. Conventional wisdom would say that if the banks can borrow at low rates, then they would tend to be aggressive lenders. Not in the Philippines.

Bank lending has been stagnant in light of the increasing economic activity. While local banks are out of the internal financial markets for the most part, neither have they increased lending activity domestically. I believe that over the next three to six months, banks will move to put more money into the economy through their lending.

Bank earnings have been fine but not growing because of their restrained lending. The banks need to increase their business activity to keep pace with the general economic growth. Increased lending by the banks will in turn increase overall business activity.

The first quarter is history and it was a good beginning to 2010. The second quarter should be a continuation of this established trend.



E-mail comments to mangun@gmail.com. PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.

Razon enters Pagcor ‘Bay Shore’ project

ENJ David
BusinessWorld
http://www.bworldonline.com/main/content.php?id=8465

BUSINESSMAN ENRIQUE K. Razon, Jr., head of multinational port operator International Container Terminal Services, Inc. (ICTSI), has bought a gaming company that will build a casino at the Bagong Nayong Pilipino project.

State-run Philippine Amusement and Gaming Corp. expects to start construction at the Bagong Nayong Pilipino project later this year. Four firms have already been given casino licenses, including Bloombury Investment Holdings, Inc.

In a statement, Mr. Razon said he had acquired a controlling stake in Bloombury Investment Holdings, Inc. from Jose Ch. Alvarez, owner of Columbian Motors Corp.

“[Mr. Razon] has acquired a controlling interest in Bloombury from fellow businessman Jose Ch. Alvarez, and is set to infuse fresh equity of P5 billion or $100 million,” the statement said.

Bloombury is one of four companies granted a provisional license by the Philippine Amusement and Gaming Corp. (Pagcor) to operate and establish gaming and entertainment facilities at the Bay Shore Bagong Nayong Pilipino Entertainment City project at the Manila Bay Reclamation Area in Parañaque.

Other companies granted licenses were Travellers International Hotel Group, Inc., the partnership between the Andrew L. Tan-led Alliance Global, Inc. and casino-resort operator Genting Hong Kong Ltd., SM Investments Corp. and Universal Entertainment Corp. (formerly Azure Corp.), the leading manufacturer of gaming machines worldwide and co-investor in the Wynn chain of casino-hotels in Las Vegas and Macau.

Rafael Butch A. Francisco, president and chief operating officer of Pagcor, earlier said construction at the Bay Shore Entertainment City was expected to begin in the latter part of the year.

Mr. Razon’s entry into the Pagcor project came after his exit from the power transmission business. Last month, Henry Sy, Jr.’s OneTaipan Holdings, Inc. bought Monte Oro Grid Resources Corp. from Mr. Razon’s group for $350 million.

Monte Oro owns 30% of National Grid Corp. of the Philippines, the private utility that runs the country’s power transmission highway.

Mr. Razon’s statement said Bloombury was in the final stages of design development for its project in Bay Shore.

“Construction is expected to commence by the third quarter of this year,” at an estimated cost of $400 million for the first phase.

Upon completion, “the complex will include two five-star luxury hotel towers of over 1,000 rooms within a world-class entertainment and convention facility,” the statement read.

The complex will be “fully operational in two years and is expected to stimulate growth not only in the hotel and restaurant sector, but also in the construction and services sectors.”

Mr. Razon’s ICTSI operates the Manila International Container Terminal. Other key operations are in Brazil, Poland, Ecuador and Madagascar.

At the end of 2009, ICTSI’s revenues dropped to $421.7 million, or 9% from $463.1 million in 2008. Net income fell by 15% to $54.9 million in 2009 from the $64.2 million in the previous year due to the decline in global trade.

Shares in ICTSI closed at P23.50 apiece in yesterday’s trading, up 1.07% from the previous close of P23.25.

Presidential, Vice Presidential bets visit NPO, Smartmatic warehouse (March 11, 2010)

Voters Education Animation Project

(Tagalog)


(Cebuano)

First Pacific’s Philippine investments last year adds up to about $1.3 billion

Miguel R. Camus
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=23680:first-pacifics-philippine-investments-last-year-adds-up-to-about-13-billion&catid=24:companies&Itemid=59

HONG KONG-based conglomerate First Pacific Co. Ltd.,  led by  businessman Manuel V. Pangilinan,  invested $1.3 billion or almost P60 billion in the Philippines last year after snapping up key power and mining assets.

In a filing to the Hong Kong Stock Exchange last month, First Pacific said the bulk of the capital spending was used to make its ownership debut in power retailer Manila Electric Co. (Meralco) and to strengthen its hold over gold and copper miner Philex Mining Corp.

In particular, First Pacific invested the lion’s share, or $934 million, to enter Meralco through Pilipino Telephone Corp. (Piltel), a unit of telco giant Philippine Long Distance Telephone Co. (PLDT) unit and Metro Pacific Investments Corp., after it bought shares equivalent to 34.5 percent in the country’s largest electricity distributor.

First Pacific is a part owner of PLDT and is also the parent company of Philippine holding firm Metro Pacific, which has interests in toll road, hospital, water supply and port operation businesses.

Along with local affiliate Two Rivers Pacific Holdings Corp., First Pacific also spent $313 million to buy an additional 20.6 percent of Philex, almost half of which was acquired through a block sale from  a group led by former trade minister Roberto V. Ongpin.

The foreign conglomerate likewise spent another $69 million to boost Philex’s ownership in the Silangan Mindanao Mining Co. Inc. in Northern Mindanao and to increase its stake in Pitkin Petroleum Plc. to a fifth.

The buying spree last year was bigger than the $1 billion spent on Philippine-based investments in 2008.

“Following a period of significant investment activities, the company’s focus remains intently on improving performance of the group’s businesses and delivering higher profits and value in 2010,” First Pacific told the Hong Kong bourse.

This, as the group said it will  “continue to explore investment opportunities in existing core businesses across the region.”

Just three months into 2010, acquisition hungry First Pacific further bolstered its ownership in Philex and Meralco.

In late January, First Pacific, through Two Rivers, secured another 5.9 percent of Philex from state-run pension fund Government Service Insurance System for P6 billion.

The transaction brought the group’s ownership to 46.6 percent, sealing its place as the single-largest shareholder in the country’s largest miner.

In addition, Metro Pacific last week also concluded a P22.4-billion deal to buy another 6.6 percent of Meralco from Lopez-led First Philippine Holdings Corp. This brings the First Pacific Group’s holdings in the power retailer to over 41 percent.

Rival San Miguel Corp., which is also diversifying into power, mining and infrastructure, owns 27 percent of Meralco.

As part of the plan, the group plans to transfer most of its Meralco shares this year to newly formed holding company, Beacon Electric Asset Holdings Inc.

Beacon Electric already holds a fifth of Meralco and plans to raise this to 34.8 percent, or just shy of the tender offer rule, when Piltel transfers a 13.7-percent Meralco stake in May this year.  

The consolidation of shares under one company will allow the holding firm to access debt financing for any potential Meralco purchases in the future, using its own shares in the power retailer as collateral.

First Pacific said recurring profit grew 20 percent last year to $286.6 million. This was primarily boosted by the $205.3 million contribution of PLDT to the group.

First Pacific also owns Indonesia-based PT Indofood Sukses Makmur Tbk, a listed food manufacturer and distributor.

The company is presently chaired by Indonesian tycoon Anthoni Salim.

Smart allots P16.4 billion for capex

Lenie Lectura
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=23679:smart-allots-p164-billion-for-capex&catid=24:companies&Itemid=59

SMART Communications Inc. has programmed P16.4 billion for capital expenditures (capex) this year, 3.8-percent higher than last year’s P15.8 billion.  

The cellular firm said capital spending this year will be focused on expanding and upgrading the company’s transmission network facilities to meet increased demand for cellular and broadband services.

Smart’s capex forms part of its parent firm’s P28.6-billion allotment for spending this year. The budget of the Philippine Long Distance Telephone Co. (PLDT) for consolidated capex requirements is approximately P28.6 billion. Of this amount, approximately P16.4 billion is allocated to Smart, about P10.8 billion to PLDT and the remaining amount is for the phone giant’s other subsidiaries.

Smart reported that due to its access to PLDT’s network assets, the cellular firm has been able to achieve significant capex than its current competitors. This, it said, translates to an improved ability to price competitively and target the mass market subscriber base, while retaining profitability. Based on existing equipment purchase contracts, Smart expects incremental capex per net additional subscriber to amount to less than $50.

“For 2010, we expect that cash from operations should enable us to increase the level of our capex for the continued expansion and upgrade of our network infrastructure. We expect to make additional investments in our core facilities to maximize existing technologies and increase capacity to accommodate expected continued increases in call volumes as a result of unlimited voice offerings and other promotions,” PLDT said.  

The phone giant said capital spending may be adjusted depending on “future strategic initiatives.

“We may be required to finance a portion of our future capital expenditures from external financing sources, which have not yet been fully arranged. There can be no assurance that financing for new projects will be available on terms acceptable to us or at all. If we cannot complete our development programs and other capital projects, our growth, results of operations and financial condition could be materially and adversely affected,” PLDT reported.

The cellular business faces challenges given the high market penetration, the increasing preference for unlimited offers and multiple SIM ownership, as well as competition from social networking and broadband.

The PLDT Group’s total cellular subscriber base for 2009 grew to 41.3 million subscribers, a 17-percent growth year-on-year. Smart added 6.1 million subscribers, compared with 5.2 million in 2008. Smart Buddy recorded net additions of over 1.6 million subscribers in the fourth quarter of 2009 to end the year with 24.2 million subscribers while Talk ‘N Text added approximately 500,000 subscribers to end 2009 with 17.1 million subscribers.

A large part of the PLDT Group’s total revenues is currently derived from cellular services. Wireless service revenues rose to P95.8 billion in 2009, 2-percent higher than the P93.6 billion reported in 2008.

The cellular penetration rate is estimated to have reached about 83 percent, counting multiple SIM card ownership.

“The growth of the cellular communications market depends on many factors beyond our control, including the continued introduction of new and enhanced cellular devices, the price levels of cellular handsets, consumer preferences and amount of disposable income of existing and potential subscribers. Any economic, technological or other developments resulting in a reduction in demand for cellular services may harm our business,” PLDT said.  

Smart continues to invest in its cellular and multi-platform broadband networks while upgrading its existing transmission, core and access facilities.

Smart’s 3G (third generation) mobile services and high-speed packet access networks now cover 50 and 44 percent of the country’s population, respectively.

The 3G network revolutionizes mobile technology by providing more capacity, faster data rates and richer data and video applications. Smart has been deploying its 3G network in urban areas where there is a demand for mobile broadband applications and where 3G mobile units are more likely to be available. Spectrum constraints, said the cellular firm, will not affect Smart’s expansion plans for GSM (global system for mobile communications) in the future.

Smart was awarded a 3G license by the NTC in 2005 and received the largest radio frequency allocation of 15 megahertz (MHz). Smart chose the 1920-1935 MHz and 2110-2125 MHz spectrum, the range that would best enable it to rapidly deploy its 3G network nationwide and at the same time offer the highest quality of 3G service.

Easter Greetings from Pope Benedict XVI

(RECIPROCATE THE POPE'S BLESSING WITH YOUR PRAYERS. CLICK HERE.)

Resurrectio Domini, spes nostra! The resurrection of Christ is our hope! This the Church proclaims today with joy. She announces the hope that is now firm and invincible because God has raised Jesus Christ from the dead. She communicates the hope that she carries in her heart and wishes to share with all people in every place, especially where Christians suffer persecution because of their faith and their commitment to justice and peace. She invokes the hope that can call forth the courage to do good, even when it costs, especially when it costs.

Today the Church sings “the day that the Lord has made”, and she summons people to joy.

Today the Church calls in prayer upon Mary, Star of Hope, asking her to guide humanity towards the safe haven of salvation which is the heart of Christ, the paschal Victim, the Lamb who has “redeemed the world”, the Innocent one who has “reconciled us sinners with the Father”. To him, our victorious King, to him who is crucified and risen, we sing out with joy our Alleluia!

--Easter 2009

Seair nears 3-M passenger mark as it turns 15

By Daxim Lucas
Philippine Daily Inquirer
http://business.inquirer.net/money/topstories/view/20100403-262154/Seair-nears-3-M-passenger-mark-as-it-turns-15
SEAIR WEBSITE HERE

What should a company do when bread and butter business is encroached upon by larger rivals with more money to burn?

Specifically, what should an airline do when the lucrative route that it specializes in is invaded by rivals that can deploy more flights with larger aircraft that can carry more passengers?

For niche carrier Southeast Asian Airlines, the answer is simple: find new markets and new routes to develop, while retaining as its core business, its dominance in the Manila-Boracay air service.

“What we’re doing is developing other tourist routes to areas that are either underserved or those that have been ignored altogether,” says Seair co-founder and co-owner Nikos Gitsis.

“At the same time, we continue to focus on Boracay which is really our most important market at this time,” he adds.

Helping tourism

Gitsis cites the airline’s flights to Basco, Batanes—the northernmost province of the Philippines—which has long been neglected by other carriers, but is now slowly coming back to life as a tourist destination with Seair’s help.

“We do serve a critical service to the Philippines which is to provide service to these smaller, niche destinations,” he says. “That’s where we continue to use our strength.”

Gitsis—a Greek national who founded Seair 15 years ago with German Iren Dornier and a group of Filipino investors led by Tomas Lopez Jr.—conceded that the airline’s business model is not a cheap one to operate, often involving a significant amount of capital and energy to develop new routes.

“We have to spend money [to create interest in new destinations],” he says. “And when we do break open the market, everyone comes in. That’s our advantage and disadvantage as a niche carrier.”

According to Dornier, the case of Basco is a prime example of a Seair-style operation that is simultaneously an important business proposition and a vital part of the overall tourism development program of the country.

“We are working with various stakeholders here, from the national government, the local government, as well as the private businesses in the locality,” he says.

No smooth sailing

Nonetheless, things haven’t been smooth sailing for Seair in the recent year, just like all other players, as the airline industry struggled with the high cost of fuel and the decline in air travel brought about by the global financial crisis.

“We’re happy that we got past the last couple of years which were very difficult for all airlines,” Gitsis says. “Now we’re the second oldest airline in the Philippines. We’ve turned 15.”

According to the company, it posted record-breaking ticket sales from January to February of 2010, more than 40 percent than what it generated for the same period in 2009. The growth was attributed to an enhanced online ticketing system, the longest continuous—and more importantly, reliable—direct flight to Caticlan, improved passenger services such as complimentary transfers, and the development of new destinations.

“It looks very promising now,” he says. “The last few months have been very promising for Seair. Moving ahead, we’re looking forward to maintaining that strength and maintaining what we’ve achieved.”

Boracay still strong

Despite the “encroachment” of larger carriers into its lucrative main route, the airline’s founders believe that the Manila-Caticlan service will remain its main revenue driver for the foreseeable future.

“Boracay is the heart of our operation so we serve it with zeal,” Gitsis says. “For other airlines, it’s just another route. They have many others. They provide a mass market approach while we provide specialized service.”

From its humble beginnings as a company ferrying passengers and cargo on two nine-seater aircraft to Boracay and Palawan in 1995, it now operates four Dornier 328 turboprop aircraft and six LET 410s, while maintaining two hangars at the Clark Special Economic Zone.

Seair flies to 12 local destinations and, to date, has flown almost three million passengers -- a big number for a small airline flying to “small” destinations.

P164-million vital projects eyed for Samal Island

Manila Bulletin
http://www.mb.com.ph/articles/251011/p164million-vital-projects-eyed-samal-island

ISLAND GARDEN CITY OF SAMAL (Igacos), Davao del Norte (PNA) – The local government here is set to implement some P164 million worth of environmental projects that will make sure the island is able to maintain its clean environment despite the influx of tourists and establishments.

Igacos Mayor Aniano Antalan said the Environmental User’s Fee (EUF) which will be collected from all visitors going to the island is expected to raise funds for these projects from various sources.

Antalan said City Ordinance No. 156, Series of 2009, created the EUF – a sustainable revenue-generating mechanism that allows the local government to manage, develop, and protect the environment by charging fees to tourists and visitors in exchange for enjoying the area.

The EUF is appropriately called the “Blue-Green Ticket” which was implemented this Holy Week.
This means that tourists, scuba divers, mountaineers, and mountain bikers who visit the island will have to pay P5 each. However, local residents here will not be charged the EUF.

“We expect to collect at least P1 million from the EUF during that time,” City Environment and Natural Resources Officer Edward Sisor said.

Antalan said they need at least P91 million for the city’s sanitary landfill project, P11.5 million for the waste water treatment facility, P1.5 million for the slaughter house, P6.5 million for the coastal park, P3.5 million for the Penaplata Park, and P50 million for a treatment facility.

He said that local government environmental protection is one of the goals of his administration but they can only do this if they have enough resources to protect the environment, considering the influx of tourists in the area.

Davao Gulf is one of the key biodiversity areas in the world and it could be the last frontier in this part of the globe, he added.

Resort owners and operators on Samal Island are in full support of the environmental projects being implemented by the local government, knowing that it would ultimately benefit the island’s tourism industry.

The island’s business sector is aware of the ecological threats faced by the Gulf as a result of solid waste and wastewater pollution, illegal fishing, and pesticide residues.

The threats were confirmed by Dr. Victor S. Luis, Jr., a consultant of the United States Agency for International Development (USAID)-funded Philippine Environmental Governance Project Phase 2 or EcoGov.

Meanwhile, Davao City Councilor Leonardo Avila, who is also the chairperson of the Davao Gulf Management Council, said they are aware of the risks being faced by Davao Gulf because of the development in and surrounding the area.

“Davao Gulf is one of the most diverse marine ecosystems in the world and it hosts 17 species of mangroves, 44 species of seaweeds, and at least five species of marine turtle,” Avila said.

He said this alone should convince the local governments and the private sector along the area to be concerned about protecting the environs of the Davao Gulf.

One indication of the increasing pollution in the Davao Gulf area, Avila said is the declining bangus catch which used to be a major livelihood in nearby Panabo City, Davao del Norte.

Seafarers forever

By BERNARDO M. VILLEGAS
Manila Bulletin
http://www.mb.com.ph/articles/250951/seafarers-forever

Forever may be too ambitious a word. But I can say that as long as there are Filipinos, there will be Filipino seafarers, especially officers, manning the international ships.

Even if in the next twenty years, endowed with more enlightened and honest leaders, we can succeed in eradicating poverty in the Philippines, there will continue to be hundreds of thousand of Filipinos working aboard ships all over the world.

There is no question that Filipinos are preferred over other nationalities by international shipping companies, whether they be Japanese, Norwegian, or American.

Filipinos take to the sea as fish in water. It will not be poverty that will drive them to become maritime professionals but their innate talents and their competitiveness. Seafaring is a permanent professional choice for many Filipinos, especially those coming from regions like Iloilo, Cebu and island economies where there is a long-time tradition for males to choose working abroad ships as a profession.

Furthermore, our maritime schools – already among the best in the world with the help of Japanese and Norwegian companies – will get even better. We shall be turning out more maritime personnel who can become officers.

This prediction of mine is based on an extraordinary happening in 2009, a year when hundreds of international shipping vessels were mothballed in the international ports of Singapore, Hong Kong, and even Subic.

Despite the precipitous drop in the volume of trade, the amazing thing is that remittances from Filipino sailors aboard foreign ocean-going vessels sent to their relatives a whopping $3.4 billion, an increase of 12.06 percent from $3.034 in 2008. This increase was more than twice that of the total OFW remittances in 2009 which was 5.1 percent. These figures were contained in a report of former Senator Ernesto F. Herrera, Secretary-General of the Trade Union Congress of the Philippines (TUCP).

Something even more impressive is the 78.82 percent increase of the remittances from Filipino sailors based in Europe which totaled $1.156 billion compared to $509.594 million in 2008.

According to industry sources, this sterling performance was due to the retirement of aging European officers who were being replaced by equally competent young Filipino officers. This trend will intensify as Europe continues to suffer from rapid aging (the so-called demographic winter), especially in the Scandinavian countries which host the headquarters of the major international shipping lines.

On the side of the Philippines, there is an increasing number of world-class training programs for officers like the one recently established by the Japanese enterprise NYK in tandem with the Transnational Diversified Group headed by Roberto Delgado. There is also the University of Cebu which has a partnership with the International Maritime Employers Committee (IMEC), an organization based in London representing 125 shipping companies worldwide. According to IMEC, there could be a shortage of 200,000 trained and competent marine officers in the next two years.

In an article in this paper, Malou Mozo recently reported that Odd Magne Skei, Director for the Norwegian Training Center (NTC), the operational arm of the Norwegian Maritime Foundation of the Philippines Inc. said that high priority is given to Filipino seafarers by NTC on board Norwegian-owned, controlled, managed, or operated vessels.

Mr. Skei had high praises for Filipino maritime professionals: "Filipinos are known in the industry to be highly skilled professionals and for their loyalty, which is why they deserve the good pay they get for their services. The world's shipping business needs Filipino seafarers."

These complimentary words explain why 25 percent of seafarers all over the world are Filipinos. International passenger and cargo ships would be paralyzed if Filipinos were to stop working as maritime professionals.

As Secretary Herrera reported, Filipino sailors now contribute 20 cents out of every US dollar sent home by all OFWs. As poverty is reduced in the Philippines and less workers have to go abroad because of dire economic necessity, this percentage will increase even more.

Because this profession will be a permanent one in the Philippines, leaders of this industry will have to be very conscientious in searching for solutions to the social problems that result from an otherwise lucrative profession. I am referring to the necessary absence of many fathers from their respective families for several months in a given year.

Especially for growing children, this absence can cause psychological problems. Employers of these seafarers must be proactive in helping to minimize the social and psychological costs of the absent father.

The families must be provided with modern communications technology (e.g. Skype) so that there can be frequent (even daily) conversations between the parents and their children.

The number of months of home leave must be lengthened as much as possible. The children (especially teenage boys) must be helped by psychologists or guidance counsellors to minimize the trauma of long separations.

The period of having to work abroad a ship could be shortened by preparing the maritime professionals for alternative income-generating occupations back in the Philippines through entrepreneurial training or the acquisition of other professional skills such as management or information technology.

I am glad to observe that a good number of Philippine manning companies are already implementing some if not all of these interventions to address the social problems faced by families of maritime professionals.

For comments, my email address is bvillegas@uap.edu.ph.

NEDA mulls hiking 2010 growth target

Manila Bulletin
http://www.mb.com.ph/articles/250802/neda-mulls-hiking-2010-growth-target

The National Economic and Development Authority (NEDA) will probably recommend raising the 2010 growth target by the middle of the year amid improving exports and remittances.

“There is strong evidence that recovery prospects are solidly entrenched,” NEDA Director Dennis Arroyo said in interview. The government had forecast growth to accelerate to between 2.6 percent and 3.6 percent in 2010 from last year’s 0.9 percent, an 11-year low. NEDA is the central economic planner.

Growth in Asian economies from China to Indonesia is accelerating as the global recovery from the worst postwar recession boosts the region’s exports. Overseas remittances will climb 8 percent this year, faster than the Philippine central bank’s 6 percent forecast, Moody’s Investors Service said in a report Friday. It kept a stable outlook on the nation’s Ba3 debt rating, and expects growth at the top end of the government’s target.

“Growth is nascent and will have to be nurtured by low interest rates, which we can afford to have because inflation is contained,” said Marcelo Ayes, a senior vice president of Rizal Commercial Banking Corp. in Manila. “Remittances and business process outsourcing, which is a form of exports, support the economy.”

Bangko Sentral ng Pilipinas this month kept its benchmark interest rate unchanged at a record-low 4 percent for the sixth straight meeting to support the recovery. Authorities are unlikely to increase borrowing costs in the first half of 2010 to avoid endangering an economic rebound that’s just starting, Governor Amando Tetangco said March 22.

The Philippines’ $167 billion economy expanded 1.8 percent last quarter from a year earlier, accelerating from a decade-low 0.4 percent in the previous three months. Economic Planning Secretary Augusto Santos said March 22 the economy probably expanded by between 2 percent and 3 percent this quarter.

Any changes to the current target may be considered some time in June, when the nation has elected a successor to President Gloria Arroyo, the NEDA planner said.

RP eyed to become SEA food safety hub

By MELODY M. AGUIBA
Manila Bulletin
http://www.mb.com.ph/articles/250805/rp-eyed-become-sea-food-safety-hub

The Philippines is eyed to become a food safety hub in South East Asia with the $2-$5 million Traceability Center for Agro-Industrial Exports (TRACE) being put up here by the United Nations Industrial Development Organization (UNIDO).

The Philippine Trace, or P Trace, will be the South East Asian counterpart of the Egyptian Trace, or E Trace, earlier put up by UNIDO which has already become the food safety center in the African-Mediterranean area.

Projected to be completed within three years perhaps beginning June this year, it will be completed over a shorter period of time than the five-six year period that it took to establish E Trace.

“There’s a growing interest in food traceability, and this has an impact on all exporters of food products from the Philippines to Europe. If you don’t have a traceability system, you can’t export to Europe,” said Gerardo Patacconi, Quantity Standards and Conformity head of UNIDO’s Trade Capacity Building Branch, in an interview at a P Trace forum.

Patacconi cited Carrefour and TESCO, a British merchandising retail chain which is third largest global retailer just next to Wal-Mart and Carrefour, no longer accept suppliers that do not have food traceability systems.

The food safety center will enable Filipino exporters of food products to Europe and other developed countries like the United States and Japan to sustain and raise export to Europe.

Food traceability involves the use of food safety certification like the Hazard Analysis Critical Control Point, Good Manufacturing Practice (GMP), Good Agricultural Practice (GAP), Halal certification, and technologies.

This is in order to control transport of contaminated food and also trace the origin of food that proves unsafe to human health and effectively stop the sourcing of food from this origin.

The P Trace which is part of UNIDO’s Global Food Safety Initiative (GFSI) will train food safety experts in the country in E Trace in Egypt.

“The idea is to establish food safety competency in each crop. Each crop will have its own system to manage the supply chain,” said Patacconi.

The P Trace can make the Philippines a center for training of other potential food safety experts in the region.

Mitsubishi makes ‘BEEP,’ jeepney alternative

http://img01.carview.co.jp/minkara/blog/000/015/771/070/15771070/P1.jpg

http://www.topgear.com.ph/images/articleImages/news/Mitsubishi_Almazora_BEEP/Mitsubishi_Beep_2.jpg

http://www.mitsuklub.hu/image/beep.jpg


Manila Bulletin
http://www.mb.com.ph/articles/250806/mitsubishi-makes-beep-jeepney-alternative

Filipino-owned bus body builder Almazora Motors Corporation (AMC) and Mitsubishi Motors Philippines Corp. are tying up for the assembly of “BEEP” (Bus-jeep), a viable mass transport alternative to the popular public utility vehicle the jeepney that is going to compete with Isuzu Philippines Corporation’s similar “Microbus” version.

MMPC CEO and president Masahiko Ueki said that “BEEP” would be available for sale in June this year at an initial price of P1.8 million versus IPCs “Microbus,” which has a price range of P1.2 million to P1.5 million depending on its specification.

The BEEP body is locally designed and manufactured by Almazora Motors, while the chassis is supplied by MMPC using brand-new FUSO Canter light duty truck which complies fully with Philippine emission and safety regulations.

“MMPC aims to fulfill its role as an automotive industry mover in the Philippine economy and society through the introduction of this BEEP,” Ueki said.

The “BEEP” is a micro-sized bus which is suitable for crowded cities such as Metro Manila. It was designed for the primary purpose of modernizing Metro Manila’s public transport using an entirely new chassis, he said.

“The auto industry should not only care about selling brand-new vehicles but also take a lead role in improving the mass transport system. And since no assembler has really pursued to modernize the public transportation, MMPC as a socially responsible automotive company have collaborated with Almazora to come up with a better solution for mass transportation,” Ueki added.

Though the price is double that of a brand new FX unit, Ueki said the BEEP would ensure double revenue potential since it has more seating capacity. Return of investment is expected to be faster because of higher revenue compared to jeepneys.

In addition, since the BEEP utilizes entirely new truck chassis, vehicle financing is also possible thru the banks. Banks normally do not allow financing for even brand new jeepneys since it is backyard assembled and utilizes surplus components. Inspired by European Gruau Microbus which exemplifies safety, convenience and modernism, the BEEP is designed for use as city passenger service.

It has a seating capacity of 26 passengers (seating for 18 including driver and standing for 8).

The BEEP responds as a feasible option to alleviate pollution and also the worsening traffic problem in Metro Manila with its appropriate size and compliance to emission standards.

The government recognizes that the jeepney is a problem that has defied solution. The Department of Transportation and Communication (DoTC) has reported that jeepneys contribute 50% of the pollution in Manila. Also the traffic flow in Metro Manila is worsened by oversized jeepneys with excessive turning radius that usually clog the U-turn slots.

Currently the jeepney population as reported by the DoTC is around 400,000 units, 70,000 of which are in Metro Manila. (BCM)

Pagcor remits P1.6 billion to gov't in January-February

By CHINO S. LEYCO
Manila Bulletin
http://www.mb.com.ph/articles/250807/pagcor-remits-p16-billion-govt-januaryfebruary
Internet-based Casino Gaming Website (http://www.egamesonline.com.ph).

The Philippine Amusement and Gaming Corporation (PAGCOR), under the stewardship of Efrain C. Genuino, Chairman and Chief Executive Officer, has remitted P1.6 billion to the national government coffers in the first two-months of the year.

Data from the Bureau of Treasury showed that in February, the regulator of casino gaming in the country had remitted P815 million, higher by 3 percent compared with the P792 million in the previous month.

Under the law, PAGCOR is required to remit 5 percent of its net winnings to the Bureau of Internal revenue BIR) as franchise tax, and 50 percent of the 95 percent balance goes to the Bureau of Treasury.

To date, PAGCOR is operating 13-branches and 25 exclusive clubs, open in major cities across the country.

Last month, MJC Investments Corp. (MIC) told the Philippine Stock Exchange that it will build a hotel casino in the former San Lazaro race track in Manila in partnership with PAGCOR.

The holding firm disclosed that it entered an agreement with Pagcor, which would establish, manage and operate a casino in the hotel that MIC would construct.

This hotel will be built on MIC’s 1.4-hectare property within the San Lazaro Tourism and Business Park in Santa Cruz, Manila.

The site is part of the former racetrack, the San Lazaro Hippodrome that has been registered with the Philippine Economic Zone Authority, entitling it to tax perks and other incentives.

Under a property-for-share swap undertaken in April 2008, MIC accepted Aries Prime Global Holdings Inc. as the transferee of Manila Jockey Club Inc.’s non-core assets. Aries used to be the majority owner of MIC before the sale of its entire stake in June 2007.

In January, PAGCOR had launched its latest gaming service, www.egamesonline.com.ph, the first Internet-based casino gaming website.

E-Games Online is operated by Philweb Homeplay, Inc., a subsidiary of PhilWeb Corporation, and will offer traditional casino games like blackjack, baccarat, roulette and slots to Filipino players that are 21 or older.

Philweb said that the suite of games, which covers everything found in a “land-based” casino, is presented with state-of-the-art graphics and high speeds, thanks to enterprise-class servers from PhilWeb.

Giant Thai agri-business firm puts up P1-billion hog production facility in Tarlac

By BERNIE CAHILES-MAGKILAT
Manila Bulletin
http://www.mb.com.ph/articles/250808/giant-thai-agribusiness-firm-puts-p1billion-hog-production-facility-tarlac

Charoen Pokphand Foods or CP Foods, a wholly-owned subsidiary of Thailand’s largest agri-business group, the giant Charoen Pokphand Foods Public Company Limited (CPF) is investing P1.042 billion in hog production facility in Concepcion, Tarlac.

The investment would complement its P2.36-billion aqua feed mill plant in Capas, Tarlac.

“CP Foods continues to raise the level of its investment commitment by expanding their operations in the country. The project will contribute substantially to the SME sector since their main market will be hog raisers in the country,” said Trade and Industry Secretary Jesli A. Lapus.

The project will entail the construction of a great grand parent stocks (GGPs) farm, a grand parent stocks (GP) farm and a farm for breeder finishing hogs.

The feed requirements of the three (3) farms will be culled by the company through feed mill tolling agreements with a chosen feed mill adjacent to the farm sites.

Lapus added that the project “shall boost the opportunities in the food sector particularly in the hog raising industry. A steady supply of hogs will ensure stable prices for the public as consumer confidence continues its upswing recovery.

In addition, this project will benefit local suppliers of feeds as the company will buy feeds from adjacent sites.

Its breeder hogs will have a capacity of up to 25,000 head for sows and 500 heads for boars which could produce slaughter hogs of over 1,100 MT of GP fatteners and roughly 2,500 MT of Parent Stock (PS) fatteners. The breeder hogs will be sold on a per head basis regardless of weight while the slaughter of hogs will be sold live to viajeros with prices based on weight.

The market for the parent stock breeders will be the owners and operators of small, medium and large hog commercial raisers around Luzon, Visayas and Mindanao. Identified markets include Bulacan, Pampanga, Pangasinan, Tarlac, Zambales, Ilocos Sur, Ilocos Norte, La Union, Nueva Ecija, Isabela, Laguna, Cavite, Rizal, Batangas, Quezon, Camarines Norte, Albay, Sorsogon, Bohol, Negros Occidental, Negros Oriental, Cebu, Aklan, Iloilo, Davao Oriental, Davao Occidental, North Cotabato, South Cotabato, Bukidnon, Agusan del Norte, and Agusan del Sur.

The investment will employ 80 personnel as commercial operation is scheduled to start on January 2011.

April 2 -- Remembering Pope John Paul II

Another $1-B bond sale set

Jun Vallecera
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=23635:another-1-b-bond-sale-set&catid=23:topnews&Itemid=58

THE Bangko Sentral has approved the proposed $1-billion bond sale targeted at overseas Filipino workers and called the “OFW Bond.”

But it was curious for the national government to label it an “OFW Bond” sale when only a small portion, no more than 20 percent of the total, was actually set aside for migrant workers, official sources said on Wednesday.

Senior officials said the bulk of the sale is expected to come from the various foreign-currency deposit units (FCDUs) of local banks and from institutional buyers cultivated through the years by Finance Secretary Margarito Teves and Bureau of Treasury chief Roberto Tan.

Should the bonds prove attractive for the FCDUs and they buy it all, there should be no new dollars coming into the system and thus no additional pressure for the exchange rate to move up.

Tan previously said a full $1-billion bond sale was too daunting, which was why they planned a sale involving only $500 million that already includes the sale of $100 million in euro-denominated bonds.

Hopefully, the officials said, both Teves and Tan would have reconsidered the “OFW” tag and replace it with something more accurate.

The bonds form part of move to bridge the year’s P293-billion budget deficit, which they partially addressed with a $1.5-billion global bond sale in January, followed by $1.1 billion worth of samurai bonds in February.

Teves said the bond-sale proceeds will help underwrite the P100-billion follow-up fiscal stimulus package needed to ensure the economy will continue to expand this year from actual growth of just 0.9 percent last year in terms of the gross domestic product.

The Chinese economic bubble

John Mangun
Outside the Box
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=23629:the-chinese-economic-bubble&catid=28:opinion&Itemid=64

IT is probably appropriate to talk about China on a day during a week when no one is really interested in the financial markets and the global economy because no one is really interested in talking objectively about China at any time.

China has become the world’s beauty queen, strolling down the catwalk in a designer gown, dripping with jewels for all to see, and without a care in the world.

Yet behind closed doors when the makeup comes off, there may be little more than dyed hair, cosmetic teeth and a surgically enhanced body.

Becoming a major player in the past decade, China has made billions of dollars of investments, particularly in mineral wealth, venturing into countries and forming business partnerships that seemed unlikely just a short time ago. Chinese influence has reached into every corner of the planet. In what seems like just a moment, it has eclipsed Japan as the economic leader of Asia.

The global political influence of China is seen in almost every geo-political move from the Middle East to North Korea and even South America.

Western concerns about Iran’s nuclear program must be validated with China. As the Obama administration heads into a nasty trade war with Brazil over agricultural subsidies, both sides look over their shoulders at China to see which way the Red Dragon may turn.

The Chinese business/government economic culture is supposedly geared to the long term, in line with the thought of Confucius, “If a man takes no thought about what is distant, he will find sorrow near at hand.”

However, if you look at Chinese economic policy through the past decade and today, most policy has been dominated by short-term thinking, oriented toward immediate gains. And economic bubbles are a guaranteed result of that sort of economic policy.

As the US borrowed with no thought to having to pay those debts in the future, China, too, followed policies with little concern about future consequences.

A decade ago, China embarked on a program of economic growth at any cost. It sold its manufactured goods to the US to fuel that growth. China kept its currency artificially cheap to energize its exports. When the US ran out of cash, it loaned billions to keep the US buying its goods in order to keep its 10-percent annual growth rate going. Because of its huge foreign reserves and its willingness to loan all the funds the US consumer needed to “Buy Chinese,” US interest rates went lower and lower, creating an unprecedented demand for cheap borrowed money to buy more cheap goods and eventually “cheap” homes.

When growth is the only objective, foolish decisions are made. China built the largest shopping mall (by leasable area) in 2005 that, even now, is 99-percent empty. In 2001 China created the prefecture-level city of Ordos costing hundreds of millions. Yet the city is a “ghost town” with a population density of 17 people per kilometer (Cebu City is 750).

As China built its export markets, domestic consumption actually fell from an historic average of 60 percent of the total economy to less than 30 percent today, the lowest domestic consumer contribution to the economy of any other nation. With exports dropping 20 percent in 2009, China has spent $1 trillion to stimulate its economy. By comparison to GDP size, that is like the US spending $5 trillion in stimulus. Today, as much as 95 percent of China’s growth is attributable to government investment.

At least 20-percent government stimulus has gone into the stock market and real estate. China has flooded its economy with infrastructure and real-estate projects to maintain high employment. In 2009 new commercial floor space doubled and residential real-estate prices increased 25 percent. The Chinese continue to build new skyscrapers even though existing ones stand vacant.

The policies that China is pursuing, holding the line with stimulus until exports recover, are based on the belief that those exports will rebound on the back of a growing US economy. China has more faith in Obama than the rest of the world. Because of the lack of domestic demand, they have no choice.

If the US economic-growth engine can begin to absorb Chinese goods at the pace before, China can substitute this economic activity for its stimulus efforts.

 But if they cannot replace the stimulus money with export income, China is in deep trouble.

 For a decade, China’s economy grew on its exports. Now the economy is growing on unsustainable government infrastructure projects that do not continue to create growth in the future. Private project spending funded by cheap stimulus lending is constructing office buildings that no one is occupying and buying real estate at higher and higher speculative prices. The money is not building small/medium enterprises that create lasting employment and lasting growth.

 China can use its massive foreign reserves only so far in the domestic economy. As those dollars are turned into renminbi for local spending, it is inevitable that they will have to revalue their currency upward, putting future pressure on their exports.

 If the global economy cannot soon absorb Chinese exports to grow that economy, the bubble that has been created by government stimulus will burst because China will not be able to sustain its stimulus spending without creating high inflation, already at a 16 month high.

 The world will face severe consequences if China experiences a meltdown or even a slowdown. Commodity prices will fall. Chinese demand for industrial goods will fall. The dollar will fall while US interest rates will rise as Chinese appetite for US debt drops.

 China’s long-term future may be wonderful, but in the short run, the world has a Chinese bubble on its hands, an economic bubble that has the potential to explode



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