Saturday, 29 May 2010

RP investment rate rises to 17.4% in Q1

Manila Bulletin

The Philippines' domestic investment rate rose to 17.4 percent in the first-quarter, higher compared with the 15.7 percent in the same period last year, data from the Department of Finance (DoF) showed.

But the January to March investment rate of the national government is still among the lowest compared with the neighboring states and way below the desirable level of at least 25 percent of gross domestic product (GDP).

Other Southeast Asian countries, like Indonesia has an investment rate of 25 percent, while Thailand got 28 percent, Singapore also has 22 percent and Vietnam with 38 percent.

The country's investment rate in the first three-months of the year, meanwhile, is an improvement compared with only 11.8 percent in the fourth-quarter of 2009.

The country registered an investment rate of 14.2 percent last year, a decline from 15.2 percent in the previous year.

Raul Fabella, an economist from the University of the Philippines, said the next president must set “ambitious but doable” targets that could influence the first few years of the succeeding administration, to achieve a 6 percent average annual GDP growth from 2010 to 2020. Fabella said the GDP growth should be accompanied with an annual investment rate of around 25 percent for the country to reduce poverty incidence to 10 percent by 2020.

In the first-quarter, the Philippine economy posted a 7.3 percent growth, that is the fastest pace since the second quarter of 2007, and beats the 4.4 percent median forecast of 15 economists surveyed by Bloomberg News.

Economic Planning Secretary General Augusto Santos, said the improvement in the global economy, brighter economic outlook, increased business and consumer confidence, and election-related spending all contributed to the resurgence in economic activities. (CSL)

FDIs surge to P45 billion in first quarter

Manila Bulletin

Foreign direct investments (FDI) surged to P45.7 billion in the first quarter of 2010, almost 12 times more the P4 billion approved in the same quarter in 2009.

National Statistical Coordination Board (NSCB) secretary-general Romulo Virola said the FDIs posted two consecutive quarter increases after four quarter declines.

The FDIs represent the cost of projects registered and approved by the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA).

Korea topped the list of foreign investors, pledging P23.8 billion or 52.1 percent of the total approved FDI.

Trailing behind are Japan and Singapore pledging P10.2 billion and P5.3 billion which accounted for 22.3 percent and 11.6 percent, respectively of the total FDI committed in the first quarter of 2010. The bulk of the approved FDI was intended to fund projects in manufacturing. Investment pledges in manufacturing were worth P42.9 billion growing 32 times the P1.3 billion committed a year ago.

PGMA to continue Mindanao peace initiatives in next Congress

President Gloria Macapagal Arroyo today vowed to continue her peace initiatives, particularly in Mindanao, after her term ends on June 30 and as soon as she has joined the next Congress as representative for Pampanga’s second district.

“When I became President, I declared a policy of all-out peace in Mindanao. As President, I have fought every day in office to bring that peace to that great island. I will continue to do so until the last minute of my term as President and maybe even beyond. As Congresswoman I will file the bills that I feel are needed in order to bring just and lasting peace in Mindanao,” the President said.

The President was the guest of honor and speaker this morning at the close of the two-day Roundtable Dialogue with International Negotiators jointly sponsored by Office of the Presidential Adviser on the Peace Process (OPAPP) and the Centre for Humanitarian Dialogue at the New World Hotel in Makati City.

As a new representative, the President said she will file a bill in Congress calling for a policy review towards an enhanced autonomy in the Autonomous Region in Muslim Mindanao (ARMM) to fully realize the aspirations of the Bangsamoro people.

“It will be an enhanced autonomy, that's one very basic bill that we will file,” the President said in a media interview after the event.

During her speech, the President said the individual experiences shared by the international negotiators in the conference are timely in helping find a solution to the decades-old problem in Mindanao.

“Mindanao is poised for peace. Whether we achieve it in the near future remains to be seen. For sure, there is more work to be done, but the efforts we have made over the last nine years have brought us closer to achieving long-term peace in the region,” the President said.

The foreign speakers invited to the Makati conference were former Indonesian Vice President Jusuf Kalla, who helped resolved several conflicts in Indonesia; Ireland’s Gerry Kelly, who played a key role in successful negotiations between the British government and the Irish Republican Army (IRA); Dr. Nureldin Satti, who helped bring peace in Sudan and Burundi; Prof. Omar Dajani, who participated in the negotiation between Israel and Palestine; and Aceh Gov. Irwandi Yusuf, who played a key role in the signing of the Helsinki peace talks between the Indonesian government and the Free Aceh Movement.

Also present from the Philippine side were Presidential Adviser on the Peace Process Annabelle Abaya and Government of the Republic of the Philippines (GRP) peace panel chief Ambassador Rafael Seguis.

The President said that since 2001, her administration has worked hard to bring peace and development to Mindanao to tap it’s potentials as the country’s food basket.

“We are making small but important steps toward long-term peace. We always knew from day one that this is a process that will take time and patience but what is important is that we are continuing to make progress in the right direction,” the President said.

To bring the country closer to the completion of the peace process, the President said various agreements have been signed over the last nine years with the Moro Islamic Liberation Front (MILF), including those with bearing to the ongoing peace negotiations facilitated by Malaysia and the 2003 ceasefire which holds until today..

“What is needed now is recognition by all parties that a political settlement will transform the peace on the ground to a permanent and just peace, and lead to better economic prospects and a brighter future for the people of Mindanao, That is the best result for everyone,” the President said.

The President thanked the support of the international community and other stakeholders in helping establish a new paradigm for peace aside from providing moral, financial and diplomatic support to the peace efforts in Mindanao. (PND)

Palace proposes joint meeting of Arroyo, Aquino Cabinets

By TJ Burgonio
Philippine Daily Inquirer

MANILA, Philippines— It looks like President Macpagal-Arroyo will have an early meeting with her presumptive successor, Sen. Benigno Aquino III, and an early reunion with some members of the “Hyatt 10.’’

Malacañang has proposed a joint Cabinet meeting of the Arroyo Cabinet and Aquino’s prospective Cabinet before June 30 to ensure a “seamless transition,’’ and Ms Arroyo has approved of this.

“There would be a very good transition, and establishing rapport and establishing a relation between the outgoing and the incoming Presidents,’’ Social Welfare Secretary Cecilia Yangco said of the planned joint meeting.

The Arroyo-created transition team broached the idea to Ms Arroyo at last Tuesday’s Cabinet meeting in Angeles City, Pampanga, and the President agreed to it, Yangco said.

“It was up to the other side to pick it up from there,’’ she said.

The transition team, which is chaired by Executive Secretary Leandro Mendoza, was looking at a date between June 1 and 20 for the joint Cabinet meeting, according to Yangco.


Philippine Star

MANILA, Philippines (Xinhua) - Social Welfare Secretary Celia Yangco said today that President Arroyo is planning a joint Cabinet meeting between the incoming and outgoing administrations to ensure a smooth transition of power in the Philippines by June 30.

Yangco said a joint Cabinet meeting, which could be presided jointly by outgoing President Gloria Macapagal-Arroyo and President-apparent Benigno Aquino III would establish a "very good transition and rapport" and "really promote unity and the sense of healing and togetherness" between the incoming and outgoing officials.

She said the Transition Committee, chaired by Executive Secretary Leandro Mendoza, will hold orientations for incoming officials in June.

But she admitted that the plan may not prosper because "it would depend on how the incoming administration will welcome this. " She said it was President Arroyo who initiated the moves to have a seamless transition.

Senator Aquino III won more than 13 million votes during the May 10 presidential election. The final results will be proclaimed by the Congress next month.

JP Morgan, Goldman Sachs turn bullish on Philippine economy

By Michelle Remo
Philippine Daily Inquirer

JP MORGAN HAS RAISED ITS growth forecast for the Philippines for 2010, acknowledging that its earlier optimistic outlook still turned out to be conservative given the robust expansion of the economy in the first quarter.

The investment bank now expects the economy, as measured by the gross domestic product (GDP), to grow 6.8 percent this year from its earlier forecast of 4.5 percent.

The government expects the economy to expand anywhere between 2.6 and 3.6 percent, although government officials are considering to revise the target upward following the release of the first-quarter economic performance.

“In line with most of the region, the Philippine economy started 2010 on a robust note [that is] much higher than market expectations,” JP Morgan said in its latest paper on the Philippines titled “Philippines: Economy Started the Year on a Very Strong Note.”

The investment bank said the faster-than-anticipated pace of growth in the first three months would likely prompt the Bangko Sentral ng Pilipinas to finally raise its key policy rates during the Monetary Board meeting on June 3 after keeping these at historic lows since July last year.

The central bank’s rates are at 4 percent for overnight borrowing and 6 percent for overnight lending. The low interest rates were intended to encourage borrowings, which should boost consumption and investments.

JP Morgan said the BSP could start raising interest rates soon given that the economy has already shown a firm recovery.

Another investment bank, Goldman Sachs, also expressed a positive outlook on the Philippines.

“The [first quarter of 2010 performance] confirms that the recovery process is firmly underway and we expect it to continue to get support from the two engines of flows—stable remittances and growing IT [information technology] service exports,” Goldman Sachs said.

Friday, 28 May 2010

Philippine economy grows 7.3% in Q1, highest in 30 years

MANILA (PNA) -- The Philippine economy grew at a faster pace for almost three decades in the first quarter due to election-related spending and strong manufacturing industry, the government reported Thursday.

The National Statistical Coordination Board said the economy as measured by gross domestic product (GDP) grew 7.3 percent in the first quarter from 0.5 percent in the same period last year.

"The improvement in the global economy, brighter economic outlook, increased business and consumer confidence, and election-related spending all contributed to the resurgence in economic activities. These more than offset the adverse impacts of El Nino in the production of the agriculture sector, particularly the crops and fishery subsectors," Acting Socioeconomic Planning Secretary Augusto B. Santos said.

Santos added that the growth was driven by industry, fueled by the recovery in manufacturing.

In particular, products of petroleum and coal, food manufactures, and electrical machinery were the major contributors to the growth of the sector.

Services also improved with trade, private services, and finance, posting higher growth.

Santos said that the economic growth in the first quarter of 2010 translated to an increase in employment of 1.73 million.

Employment creation was seen more on services, followed by industry. The continued strong inflows of remittances and the increase in employment particularly in services both fueled consumption.

Overseas Filipino remittances also increased by 7 percent to reach US$ 4.3 billion in the first three months of 2010.

With the growth in remittances, Net Factor Income from Abroad increased by 24.9 percent, boosting Gross National Product to grow by 9.5 percent.

He said the Philippines growth, on the other hand, is less spectacular than its neighboring countries.

Singapore recorded a 15.5 percent growth in the first quarter; Thailand, 12 percent, and Malaysia, 10.1 percent.

The 7.3 percent growth of the Philippines was faster than Indonesia’s growth of 5.7 percent. It was also higher than the growth rate of Vietnam at 5.8 percent but slower than the growth rates of Taiwan, 13.3 percent; mainland China, 11.9 percent; Hong Kong, 8.2 percent; and South Korea, 7.8 percent.

Given this preliminary first quarter estimate, Santos said "we expect an upward revision in the full year 2010 GDP growth rate projection of 2.6 percent to 3.6 percent."

The Development Budget Coordination Committee shall meet in the coming weeks to discuss the revisions in these growth assumptions.

Notwithstanding, Santos said the government continues to monitor the downside risks to growth in order to timely implement the appropriate policies that would minimize their adverse impacts.

"First, there is the looming concern over the debt crisis in Greece which may have contagion effects in our financial sector, adversely affect our trade performance, as well as constrict inflows of overseas Filipinos' remittances," Santos said.

In addition, there is a growing possibility of La Niña developing immediately after the El Nino ends in June.

"The tragedies and debilitating experience brought by the strong tropical cyclones Ondoy and Pepeng last year should serve as a stern reminder for the need for disaster risk management," he said.


A GLORIOUS ending for the Arroyo administration and a BENEFICENT beginning welcomes the Aquino administration as GDP boomed with a growth of 7.3 percent in the first quarter of 2010 from 0.5 percent last year. Except for Agriculture which was parched by the El Niño dry spell and the saturated communication subsector, all subsectors of the economy drew vigor from the global economic recovery, election related stimuli and the unbridled growth of income of our OFWs. Manufacturing rebounded astoundingly, supported by hefty contributions from trade and private services, particularly recreational and business services.

On the demand side, increased consumer and government spending boosted by the solid performance of external trade and increased investments in fixed capital formation contributed to the highest economic growth since the second quarter of 2007.

With the worst of the global crisis seemingly over, notwithstanding lingering concerns over the eurozone, the sustained strong demand for the services and expertise of Filipinos abroad contributed to the 24.9 percent growth of Net Factor Income from Abroad (NFIA) from 28.7 percent last year, pushing GNP to grow by 9.5 percent from 3.3 percent the previous year. This is the highest GNP growth since the fourth quarter of 1988.

With the decline of palay, corn and sugarcane, the seasonally adjusted Agriculture, Fishery and Forestry sector posted zero growth in the first quarter after declining by 2.8 percent in the fourth quarter of 2009.

Industry grew impressively by 3.8 percent from an already record 6.3 percent gain in the previous quarter. The substantial rebound of the manufacturing sector contributed to the sustained growth of industry.

Services sector likewise posted a 3.6 percent growth for the first quarter of 2010 after declining by 0.1 percent in the previous quarter, as private services, trade and finance sub sectors posted substantively positive growths.

With projected population reaching 93.3 million at a slower pace than the growth of the domestic economy, per capita GDP grew by 5.3 from a decline of 1.4 percent. Per capita GNP grew by 7.4 percent from 1.3 percent while per capita PCE expanded by 3.9 percent from its year ago growth of 1.0 percent.

On the expenditure side, consumer spending continued to expand in the first quarter of 2010 to 5.9 percent from 3.0 percent last year. Government Consumption Expenditure (GCE) grew by 18.5 percent, the highest ever recorded growth, from 6.1 percent documented last year.

Investments in fixed capital formation snowballed to 15.7 percent, the highest since the fourth quarter of 2000, from negative 7.4 percent in the same period last year. Total investments in Construction expanded by 8.2 percent from 6.5 percent while Investments in Durable Equipment rebounded to 25.0 percent from negative 18.5 percent a year ago.

Total Exports surged to 17.9 percent from negative 14.6 percent last year as Merchandise Exports registered double-digit growth in the first quarter of 2010.

Total imports grew by 20.3 percent from negative 11.2 percent in the previous year largely attributed to the positive performances of both Merchandise imports and Non Merchandise Imports.

The terms of trade during the quarter posted a Trade Index of 109.4 percent from 105.8 in 2009. Trading gains f or the quarter amounted to 13.4 billion pesos.

GNP Implicit Price Index (IPIN) stood at 536.5 percent from 516.6 percent in the previous year or a 3.85 percent inflation.

Secretary-General, NSCB

Philippine GDP up 7.3% in Q1

Manila Bulletin

The domestic economy posted a 7.3 percent growth in the first quarter of the year, one of the highest in decades.

Economic Planning Secretary and National Economic and Development Authority (NEDA) Director General Augusto Santos said the improvement in the global economy, brighter economic outlook, increased business and consumer confidence, and election-related spending all contributed to the resurgence in economic activities.

“These have offset the adverse impacts of El Niño in the production of the agriculture sector, particularly the crops and fishery subsectors.

”Growth was driven by industry, fueled by the recovery in manufacturing. Products of petroleum and coal, food manufactures, and electrical machinery were the major contributors to the growth of the sector, said Santos.

Services also improved, with trade, private services, and finance posting higher growth. The economic growth in the first quarter of 2010 translated to an increase in employment by almost two million.

Santos noted that employment creation was seen more on services, followed by the industry sector. The continued strong inflows of remittances and the increase in employment particularly in services both fueled consumption.

Overseas Filipino remittances increased by 7 percent to reach US$4.3 billion in the first three months of 2010. With the growth in remittances, net factor income from abroad increased by 24.9 percent, boosting gross national product to grow by 9.5 percent.

With the preliminary first quarter estimate, Santos expects an upward revision in the full year 2010 Gross Domestic Product (GDP) growth rate projection of 2.6 to 3.6 percent.

National Statistical Coordination Board (NSCB) Secretary-General Romulo Virola noted that except for agriculture which was parched by the El Niño dry spell and the saturated communication subsector, all subsectors of the economy drew vigor from the global economic recovery, election-related stimuli, and the growth of income from (overseas Filipino workers (OFWs).

Manufacturing rebounded, supported by hefty contributions from trade and private services, particularly recreational and business services.

On the demand side, increased consumer and government spending boosted by the solid performance of external trade and increased investments in fixed capital formation contributed to the highest economic growth since the second quarter of 2007.

Santos said the government continues to monitor the downside risks to growth in order to implement the appropriate policies that would minimize their adverse impacts.

“First, there is the looming concern over the debt crisis in Greece which may have contagion effects in our financial sector, adversely affect our trade performance, as well as constrict inflows of overseas Filipinos' remittances.”

“Next is the growing possibility of La Niña developing immediately after the El Niño ends in June. The tragedies and debilitating experience brought by the strong tropical cyclones “Ondoy” and “Pepeng” last year should serve as a stern reminder for the need for disaster risk management,” said Santos.

With the much stronger economic rebound of most of our neighboring Asian countries, Santos said the Philippineshas to implement the necessary reforms that will improve the country's competitiveness to sustain the first quarter growth in the succeeding quarters, amidst increasing uncertainties.

Santos stressed the need to further improve our performance, especially in factors where the country has ranked low like business efficiency and infrastructure.

“Equally crucial is the need to improve revenue collection. While remaining committed to fiscal consolidation program over the medium term, public resources should be efficiently and effectively channeled primarily to quality infrastructure and human capital.”

“We should take advantage of the renewed confidence of both businesses and consumers to direct the country to a level of growth that is not only high but also pro-jobs and inclusive,” said Santos.

Santos added that 2010 will be a new chapter for the country. “We welcome the inspiring first quarter performance of the Philippine economy. Together with the generally smooth and peaceful elections held last May 10, we should take advantage of these positive developments in renewing our efforts for our country’s development,” said Santos.

Arroyo leaves successor to deal with Imelda Marcos jewels

M. Gonzalez & Z. Solmerin
Business Mirror

PRESIDENT Arroyo on Thursday stopped the Presidential Commission on Good Government (PCGG) from pursuing the auction of the jewelry collection of former First Lady Imelda Marcos, as she would rather let her successor deal with the matter.

Executive Secretary Leandro Mendoza said in a statement that the President made the decision as “time has run out” for the disposition of the assets under her administration.

“President Gloria Macapagal-Arroyo today ordered the Presidential Commission on Good Government to hold off any further moves leading to the auction of the jewelry of former First Lady Imelda Marcos. . . .President Arroyo is now leaving it to her successor to decide on the final disposition of the Imelda Marcos jewelry,” Mendoza said.

He said he conveyed the President’s directive to PCGG Commissioner Ricardo Abcede. Mendoza said that while the PCGG has gained “much headway” in auctioning off the jewelry collection, Malacañang believes that “time has run out on the process, and is best left to the incoming administration.”

Abcede had consistently expressed his intent to realize the sale of the jewelry collection despite criticisms about the propriety of doing so with barely a month before the end of the Arroyo administration. The PCGG official had said that he would like to see through the transaction, considering all the preparations he had made.

This had put him on a collision course with other commissioners who did not want to rush the sale.

On Wednesday commission information chief Nicanor Zuares said Abcede was at the Bangko Sentral ng Pilipinas at around 1 p.m. with a representative from Christie’s. “[As] per information by Commissioner Abcede, he would be at the BSP cash department at 1 p.m. today together with Christie’s auction-house representative [Raymond] Sancroft-Baker. Mr. Baker will start appraising the Roumeliotes collection after representatives of the Bureau of Customs [BOC], PCGG, Office of the President and Commission on Audit [COA] retrieve the jewelry sets from the vault of the BSP and brought to a room for appraisal and inventory.”

On Tuesday PCGG Chairman Camilo Sabio, with members Narciso Nario, Tereso Javier and Jaime Bautista, slammed Abcede for acting on his own to have the fortune appraised for purposes of bidding the jewelry collections. They wanted the next administration to do it if it so decides to avoid speculations of “midnight transactions.”

This pushed the commission en banc to pass a resolution on the issue, but Abcede would not hear from his colleagues.

Suarez said Abcede also informed him that a gemologist from another auction house—Sotheby’s—will arrive on May 27 to likewise appraise the “sets of jewelry [he] said that by Friday, all appraisals would be completed, after which a final meeting with the Department of Finance, COA, BOC and PCGG would be held.”

Abcede knows the commission en banc’s position—“It is true that the PCGG has yet to pass a resolution authorizing the sale of the Marcos jewels, just as it is true that I have been spreading myself thin working at breakneck speed paving the way for the much-delayed sale to finally take place.”

“It is true that in a collegial body such as the PCGG, plurality of opinion, rather than sheepish unanimity, is more the rule than the exception. If some colleagues of mine in the PCGG think it’s too soon to convert those billion-peso jewels into cash, more than 20 years after they had been confiscated by the government, I’ll just have to say I am of a different stripe than they,” he added.

“If the PCGG thinks the Arroyo presidency should await the presidency of Noynoy Aquino before taking steps to auction off the jewels, then the PCGG will hear a loud—and yes, disrespectful—NO! from me, the next time we meet en banc,” he said in clear defiance of all objections.

RP to assess feasibility of $1.6-B iron, steel facility

Written by Jonathan L. Mayuga
Business Mirror

DUE to the unstable and increasing prices of iron and steel in the world market, the Philippines will conduct an assessment on the viability of establishing an integrated iron-and-steel facility in the Philippines.

Environment Secretary Horacio Ramos said President Arroyo has directed the Department of Environment and Natural Resources (DENR) to conduct the assessment on the impact of the iron-and steel-price increase to the local economy, particularly in terms of possible higher prices of vehicles and consumer products.

According to Ramos, the country is endowed with iron resources that can supply the iron ores and concentrates for the planned integrated iron-and-steel facility. 

“With that, the possibility of making the iron-and-steel industry as a major backbone of the country’s industrialization program is extremely favorable,” he said.

At the same time, President Arroyo has approved several recommendations made by the DENR chief, including the creation or revival of a work and study group for the “Integration of the Philippine Iron/Steel Industry Utilizing Indigenous Iron Ores.”

One of the DENR chief’s recommendations is to study the option of imposing government control on the exports of iron ore within the next five years, taking into consideration the need to conserve the resource for the possible establishment of iron ore/steel processing plants, as well as the rights and privileges of companies exploring or producing iron. 

This should also include a study on possibly imposing controls on the price of substitute materials, which price might increase, he said.

According to Ramos, the increase in the price of iron and steel in the world market requires the government to conduct an assessment of the iron-ore potential of the country.

The iron-ore deposits, particularly in Sta. Ines, Antipolo, Rizal; Abra de Ilog in Occidental Mindoro; Misalip in Zamboanga del Norte, should now be revisited, he said.

According to Ramos, most of the known Philippine iron ore deposits, terrestrial or offshore, are magnetite deposits that are suitable for a direct-reduction furnace.

The DENR chief also recommended that a study be made on the viability of setting up an iron processing or steel plant, which will require a minimum feed requirement of 2.4 million tons per year.  The estimated capital expenditure for such a plant is pegged at $1.6 billion.

Ramos also recommended a review or assessment of the package of incentives that can be given to mining companies producing iron ore and to companies willing to put up iron ore/steel plants in the Philippines

The DENR chief has directed the Mines and Geosciences Bureau (MGB) to come up with an updated resource inventory for iron and other iron-bearing deposits.

Edwin Domingo, the MGB officer in charge, said it will take a year to conduct such iron-and-steel inventory.

The proposed iron-and-steel facility is a brainchild of the Board of Investments under the Department of Trade and Industry, the Metals Industry and Research Development Center of the Department of Science and Technology, and the MGB. 

Under the assessment of the viability of establishing an integrated iron-and-steel facility in the country, the MGB has lined up a number of activities, namely, market studies, resource inventory of iron and other ferro-alloy deposits, characterization and assessment of Philippine iron ores, laboratory analysis and pilot-testing for upgrading of magnetite iron ores for the production of sponge iron or pig iron as feed to the iron-and-steel industries.

In the past two weeks, Ramos noted that the price of iron ore in the world market has shot up to $120 to $130 per metric ton from the $70 per metric ton (MT) price in 2009.

The increase was attributed to the strong demand for mineral in the world market, especially in Asian countries and some European countries like Russia, for the manufacture of cars and other machineries in these countries, Ramos said.

According to the MGB, as of 2009, the Philippines has a total of 493.5 billion MT of iron resource with an average grade of 44.2-percent iron.

The record further showed that the country’s iron resource is distributed in different locations all over the country, like Bulacan, Ilocos Norte, Cagayan, Sorsogon, Paracale in Camarines Norte, the Mindoro provinces, Leyte, Negros Occidental, Zamboanga, the Agusan provinces, the Davao provinces and Cebu.

As of 2008, the total export of iron ores and concentrates, including roasted iron pyrites, to the People’s Republic of China, Taiwan, Hong Kong and Japan reached 76,500 gross tons, amounting to P84.4 million freight-on-board value, the National Statistics Office–Foreign Trade Statistics revealed.

Meanwhile, the country’s total import of the same mineral commodity during the same period from the Netherlands, Brazil, Switzerland, Papua New Guinea, and the People’s Republic of China, and Japan reached 237,700 gross tons, amounting to P220.6 million free-on-board value.

Thursday, 27 May 2010

Factories sustain double-digit output growth


DOUBLE-DIGIT growth was sustained by the manufacturing sector for the fifth consecutive month in March, the government yesterday said.

Factory output, as measured by the volume of production index (VoPI), rose by 23.1% in March from a year ago, a reversal from last year’s 15.3% slump, the National Statistics Office (NSO) said.

March’s gain, however, was slower than February’s 32.5%, marking the third straight month of a slowdown in output growth. Industry experts, however, were optimistic that the uptick would not fizzle out.

"Basically, it shows a very good indication of a broad-based recovery and it supports the strong exports recovery, especially the electronic products as well as petroleum and basic metals," University of Asia and the Pacific economist Victor A. Abola said in an interview.

"The growth is still positive and not necessarily a bad sign, and even if March’s growth was slower, it was only a base effect since the economy in 2009 was doing badly," added Felipe M. Medalla, Socioeconomic Planning secretary during the Estrada administration.

"In some ways, the manufacturing sector is doing well, since some companies are increasing their production activities because of global recovery and our exports industry," Philippine Chamber of Commerce and Industry Chairman Emeritus Miguel B. Varela said.

University of Asia and the Pacific economist Peter Lee U said, "the double-digit growth is due to the recovery of the global economy, although the growth in electrical machinery and petroleum helped the sector."

Of the 20 major sectors covered by the monthly survey, petroleum products led gainers with output climbing by an annual 84.2%, though slower than the previous month’s 154.6% growth.

"Both refineries of Shell [Philippines LLC] and Petron [Corp.] are operating this year which explains the significant increase," said Zenaida Y. Monsada, director at the Department of Energy’s oil industry management bureau.

"Last year, Shell and Petron shut down their refineries, although not completely, since there was still little production," she added.

Index heavyweight electrical machinery upped production by 38%, while food production rose by a meager 0.6%, easing from February’s 1.2%.

"I think consumer consumption is steady, however, some might have a change in priorities given it was elections, but it will probably boosts now since elections is over," Mr. Varela said.

Other sectors posting double-digit increments were miscellaneous manufactures (57.3%), basic metals (50.6%), transport equipment (47.7%), furniture and fixtures (39.6%), wood (39.6%), leather (37.5%), machinery except electrical (34.5%), rubber and plastic products (26.0%), fabricated metal products (20.7%) and beverages (16.2%).

Manufacturers of footwear and wearing apparel slashed production by 24.7% in March. Tobacco output tumbled by 34.6%, reversing the 18.5% gain posted a month earlier.

The volume of net sales, a measure of demand, rose at a slower pace of 21.7% in March compared to January’s 29.2%.

Of the 470 establishments covered by the survey, only 12.9% reported having operated at full capacity.

Mr. U noted that the output trend for the manufacturing sector was still upward.

"I think the manufacturing sector would continue to post double-digit growth, not as strong as 30%, but most probably in the mid-20%, as long as the issues in the euro zone won’t affect it," he said.

Mr. Abola also shared the same view, saying: "I think we should continue to see a double-digit growth in the second quarter and in the early part of the third quarter."

Imports rise highest in 7 years

March’s 38.9% growth a reversal of 36.2% slump 12 months ago

PHILIPPINE IMPORTS climbed by 38.9% to $4.54 billion in March -- the strongest in seven years -- on the back of double-digit upticks for key products, the government yesterday reported.

The result for the month was a turnaround from the 36.2% slump recorded a year earlier, and was the highest since January 2003.

Growth for the first quarter was 32.7% to $12.73 billion, the National Statistics Office (NSO) reported, also a reversal from the 34.3% dip notched during the same period in 2009.

Electronic products, which accounted for a third of the total import bill, rose by 35.4% to $1.5 billion in March, reversing last year’s 41% fall.

Other top imports that recorded double-digit gains were oil, cereals and cereal preparations, transport equipment, industrial machinery and equipment, iron and steel, plastic, telecommunication equipment and electrical machinery, and chemicals.

A Cabinet official said the results signaled a revival in consumer demand and were a testament to a rebound in exports, even as sentiment among economists was mixed.

"With robust gains from all major commodity groups, particularly capital goods, consumer goods, and mineral fuels and lubricants, inward shipments for the month recorded the highest year-on-year increase since January 2003," Acting Socioeconomic Planning Secretary Augusto B. Santos said in a statement.

Bernardo M. Villegas, an economist at the University of Asia and the Pacific , said the latest import data tracked the double-digit growth in exports and reflected a "strong" economy amid global recovery.

Exports surged by 43.8% in March.

"Most of our exports are import-dependent so there should be no surprise on why the import figure is picking up especially now that exports are showing strength due to increased demand from trading partners," Mr. Villegas said in a telephone interview.

HSBC economist Frederick M. Neumann, meanwhile, said a drop in world oil prices would cut second quarter imports growth.

"Imports in March was strong, driven by higher exports and oil prices but it must decline in the second quarter due to lower oil prices," said Mr. Neumann, who expects imports to grow by 14.9% this year, in a separate phone interview.

Former Budget Secretary Benjamin E. Diokno, for his part, dismissed the gains as driven merely by election spending and a "low base" effect from last year.

He raised the possibility of imports topping exports, which he said translates to a wider trade gap that would hurt economic growth.

"The economy is not yet back to its pre-crisis level," Mr. Diokno, an economist at the University of the Philippines, said.

Semiconductor and Electronics Industries in the Philippines, Inc. President Ernesto B. Santiago confirmed increased purchases of raw materials for the manufacturing of electronic products amid improving global demand.

"Imports should be picking up as we are now even looking at revising our current 20% growth forecast for electronic exports to probably within the range 20-25%," Mr. Santiago said.

Japan was the country’s biggest source of merchandise in March, accounting for a 13.2% share of the total import bill.

Mr. Santos said the Philippines joined its neighbors Indonesia, China, Taiwan and Thailand in reporting double-digit growth in imports in March.

Economists, however, were of the consensus that imports growth would slow in the second semester, although they said the full-year number should fall within the government’s official 11-13% target.

The troubles that are not the Philippines’

Written by John Mangun
Outside the Box
Business Mirror

If we had any common sense as did our forefathers, the hot days of this prolonged dry season should slow us down.

But this is the 21st century, when everyone is wired to the world 24/7 and no one takes a break. A stranger might think, though, that a country like the Philippines—stuck in the middle of the ocean and physically separated so far from the rest of the world—might have a different outlook on life.

In fact, we should. So little that happens in the rest of the world comes close to touching these islands. Yet there seems to be the overwhelming—and I think a little psychotic—need to feel part of the bigger global picture, especially when it comes to negative events and situations.

A local commentator talked about the situation on the Korean peninsula the other day. From the drama and fear in the words that were used, you might think that he was talking about a running gun battle taking place a few streets away. Except for the few thousand Filipinos in South Korea, from a realistic standpoint, who cares?

Another says that the Philippines faces a large political and social risk. Why? Look at what is happening in Thailand. Thai protesters closed the central business district for a month and ended by burning down Thailand’s largest department store because a prime minister was ousted for corruption. If I remember correctly, the same thing happened in the Philippines 10 years ago. Except that after the protest, Filipinos went to Shoemart to shop, not to set it on fire.

I have written extensively these last weeks about the global financial markets. In truth, it is only an interesting intellectual exercise, because my analysis is that the worst-case scenario if the whole thing falls apart is relatively neutral for the Philippines.

The local stock market is performing badly. Yet every single comment and analysis you read about why local stocks and the peso are going down talks only about things happening half a world away, with no thought as to why these events have anything at all to do with the Philippines.

Our banking system is virtually uninvolved, not holding any of the bad debts of Europe. A comment about crashing European economies hurting our exports cannot even quantify the effect because exports are such a small part of the Philippine economy. All the conversation that we heard last year about thousands of overseas workers being sent home was so wrong that no one even mentions it anymore. It is hard to say it when overseas-worker remittances keep hitting records month after month.

The local financial press gives blow-by-blow coverage and analysis of the falling stock markets in New York and Europe as if it was important to the Philippines. You know what? I really do not care if they closed all those stock exchanges. Not one centavo of my wealth depends on what happens on those stock markets, and that is true for 99.9 percent of all Filipinos. How about you and your wealth?

The US dollar rises against the dying euro, and locals rush to sell pesos. Eventually, they will regret it. But in the meantime, crude-oil prices are falling like a rock, bringing local gasoline prices down. Yet we cannot take full advantage of the oil-price drop because some people here are betting on the US economy and currency, instead of putting their faith in the Philippines. I really wish these people would take their dollars and move to the US. They would probably be happier, and the Philippines would probably be better off.

While the local press is filled with stories from the West, what is not mentioned at all is what is happening, the good things that are happening in the Philippines.

The largest single foreign investment in the history of the Philippines is ready to come together. Now you would think that would be front-page news, told over and over again. Xstrata Copper, headquartered in Brisbane, Australia, is going to invest $5.2 billion for the first phase of developing perhaps the most important mining project in all of Asia. The Tampakan copper field in South Cotabato is considered of critical strategic importance for economic development across Asia because it is Southeast Asia’s largest untapped copper-and-gold deposit. Literally, tens of thousands of direct and indirect jobs will be created, and the multiplier effect of that investment will be enormous. Zijin Mining Group Co., China’s largest gold producer, is set to buy Australia’s Indophil Resources’ stake in Tampakan for $493 million. Zijin Mining has more confidence in the Philippines than many Filipinos.

Ayala Corp. unit Integreon, a leading global outsourcing company for back-office work, signs a 10-year contract with a large British legal and tax firm worth over $800 million, and a local “expert” says that outsourcing in the Philippines is near the end of the road. And local investors have sold Ayala shares for the last several months.

Realize a few things. The unemployment rate is higher in the US than in the Philippines. By almost every measure of fiscal and financial soundness and stability, the Philippine national treasury is in better condition than most of the European Union countries. While more than 10 percent of all US banks are on the watch list and are ready to fail, our local banks exceed existing global banking standards and are even financially stronger than the new banking standards that the major Western governments say must be implemented to insure their banking system does not totally collapse.

I am trying to figure out the mindset of someone who seems to wish the Philippines was a part of the world’s problems. Maybe it is not a mindset. Maybe it comes from standing under the hot El Niño sun too long without an umbrella.

Buy the peso. Buy the PSE.

E-mail comments to mangun@gmail.comThis e-mail address is being protected from spambots. You need JavaScript enabled to view it . PSE stock-market information and technical analysis tools provided by Inc.

Wednesday, 26 May 2010

New Bicol port seen to boost inter-island commerce

San Pascual, Masbate (PND) -- President Gloria Macapagal Arroyo will inaugurate a new strategically-located RoRo (roll-on-roll-off) port in Bicol when she visits this town for the first time on Thursday (May 27).

The P46.3 million RoRo port here, conceptualized as a “bridge between Luzon and the Visayas,” was completed last year but blessing and inauguration will be held when the President sets foot in this remote town on Thursday.

President Arroyo will be the second president to visit this town, after her father President Diosdado Macapagal, who was here on December 28, 1962.

The port project was supervised by the Philippine Ports Authority under the Strong Republic Nautical Highway program of the President.

San Pascual, is bordered by Camarines Sur in the north, Albay in the east, Bundok Peninsula of Quezon in northwest, and Sibuyan Island of Romblon and Ticao Island of Masbate in the south.

This town, a 3rd class municipality with an income of P63.7 million in 2009, produces copra, cattle, hogs, goats and fish products. The town is located at the northernmost tip of Burias Island, one of the islands that make up Masbate province. It is has 22 barangays with a population of 41,736.

"We are very happy that the President will visit us even if we are just a small municipality in this island of Masbate," San Pascual Mayor Zacarina Lazaro said.

The new port can accommodate bigger cargo and passenger vessels passing through routes to and from Quezon, Masbate, Romblon, Cebu and Davao.

The upgraded port facilities include a (9m x 11m) RoRo ramp, (6m x 7m) trestle deck and two (2) sets of 9-pile breasting dolphin. The port also is a safe docking port for cargo vessels during tropical storms.

With this port's strategic position, Lazaro said trade and commerce in and around the province will be significantly enhanced, with the benefits seen to trickle down directly to the municipality and its people.

"It opens bigger trade market for us as we can now easily bring our products to Camarines Sur, Quezon, Romblon, Cebu, General Santos in Davao and some other provinces in Visayas and Mindanao'" Lazaro said.

Lazaro also said the port will boost local tourism as San Pascual has numerous tourist spots like Sumbrero Island and Tinalisayan Island which are inhabited by green sea turtle or pawikans.

Corona pushes national healing

by Rey Requejo
Manila Standard

Chief Justice Renato Corona on Tuesday appealed to President-elect Benigno Aquino III to reconsider his confrontational attitude toward the Supreme Court, saying that Mr. Aquino is in a strong position to initiate the national healing process.

“I am urging everyone to be sober about things. We should not fight among ourselves, we are not enemies. We in the judiciary and those in the executive department are not necessarily friends but we do not need to be enemies,” Corona said, in an interview aired over radio station DzRH.

“Our people at this point want national healing from the mudslinging during the recent elections. Our people are seeing a new chapter in the history of the country because we have a new president who gives new hope for opportunities and an improvement in the life of our countrymen,” Corona said.

Aquino, who vowed not to recognize President Arroyo’s appointment of Corona as chief justice, has said that he would rather prefer to take his oath of office before a village chieftain than follow the tradition of being sworn in by the chief justice.

When asked for comment on reports that Aquino is now considering taking his oath of office before his colleague, Associate Justice Conchita Carpio-Morales, Corona said he does not feel bad about it.

“I do not have a reason to have ill-feelings because under the Constitution there is no requirement for the incoming presidency to be sworn in before the chief justice. It’s his prerogative and his right to choose before whom he will take his oath,” Corona said. “There is even no room to feel bad about it.”

“Our countrymen would not want to see their leaders fighting among themselves. It is unbecoming and does not speak well of the administration of Senator Aquino,” Corona observed.

Court spokesman and administrator Jose Midas Marquez earlier welcomed the decision of Aquino to take his oath of office before Justice Carpio-Morales, instead of a barangay chairman as he previously planned.

Marquez expressed hopes that Aquino would eventually allow newly appointed Chief Justice to administer his oath of office, once he is proclaimed President.

Nonetheless, Marquez said Aquinos taking his oath of office before Associate Justice Conchita Carpio-Morales is “recognition of the independence” of the judiciary as a co-equal branch of government.

“It shows respect for an institution, but it would be better of course if you take your oath before the head of the institution, Marquez said.

Morales said they respect Aquino’s preference for Morales over Corona. “That’s Senator Aquino’s discretion, that’s his prerogative. There’s no law saying he should take it before the Chief Justice,” Marquez stressed.

“It shows respect for an institution, but it would be better of course if you take your oath before the head of the institution,” Marquez said.

Marquez said he is not discounting the possibility of resolving the controversy between the Aquino camp and the high court by next month.

“There’s a new president who will lead the country to greater heights. These are co-equal branches of government that are independent from each other and should work together for our country to move forward. I hope things can be patched up before June 30,” Marquez said.

Corona made himself available for a series of radio and television interviews to defend the legality of his appointment as successor of Chief Justice Reynato Puno who retired last May 17 and expressed his readiness to congratulate president-elect Aquino as well as the other officials who won during the first automated elections on May 10. “I’m not starting on the wrong foot . somebody else is,”Corona said, in an apparent allusion to Aquino’s statements that he would not recognize him as the chief justice and would not take his oath before him.

“I will send him congratulatory letter in the same way I will send my congratulations to the vice president and senators and I have written a number to my friends in Congress. It’s just basic courtesy, I don’t have to like him for me to congratulate him,” Corona said.

The new Chief Justice reiterated that all the legal obstacles have been removed before he accepted his appointment as chief justice.

We all went through the process from A-Z, as provided in the Constitution and it is every lawyer’s dream to be a supreme court justice, what more a Chief justice?”

P2-B engineering laboratories up in UP Diliman soon

Dennis D. Estopace and Juei Villaruel
Business Mirror

THE University of the Philippines is constructing several buildings worth P2 billion in its Diliman, Quezon City, campus for laboratories that could enhance the research and testing capability of the UP National Engineering Center (NEC).

Dean Rowena Cristina L. Guevara of the UP College of Engineering (UPCOE) said the Mining, Metallurgical and Materials building is scheduled to open its first two floors in August.

The building for the Energy Engineering (EgyE) and Environmental Engineering (EnE) programs will rise on a 4,000-square-meter lot and will house 10 laboratories for both programs, according to the UP Diliman web site. Ground-breaking rites for this building were held last month.

A Building-Research Service (BRS) edifice is also planned; it will have a laboratory for fire-testing full-scale wall panels, according to BRS director Nathaniel B. Diola. He said the laboratory, which will be the first test facility of its kind in the Philippines, aims to transform prototypes into commercial stages.

The UP NEC is mandated by law to strengthen and ensure a steady supply of technical manpower in the various fields of engineering and of developing technologies that use indigenous resources appropriate to the needs of local industries.

From 2004 to May 2010, the UP NEC offered 325 training programs to more than 8,000 participants all over the country.

More than 1,400 were from different electric cooperatives and distribution utilities in the Philippines.

Meanwhile, the NEC’s geodetic engineering updating program for students who had been unable to finish their studies has graduated 1,327.

Formally established on January 27, 1978, the NEC has served as the UP COE’s research and extension arm.

Naia 3 readied for more international carriers

Written by Recto Mercene
Business Mirror

REPAIRS are ongoing at the Ninoy Aquino International Airport (Naia) Terminal 3 (T3), which will be ready for occupancy within eight months by at least three more international air carriers.

The airport general manager, lawyer Melvin Matibag, announcing this at a press conference yesterday, said the P2-billion repair job will involve fixing the boarding bridges, the baggage conveyors, fire-alarm system, and an automated computerized system announcing the arrival of every flight.

Matibag also said Terminal 2 (T2) would be expanded by clearing Nayong Pilipino, a 36-hectare property paid for by the Manila International Airport Authority (MIAA), which supervises the operations of Naia.

The MIAA would construct a cargo area at what is now Nayong Pilipino and, at the same time, clear the way for an underground pipeline running across Runway 13-31 to facilitate the supply of aviation gas (avgas) to T3. At present, the avgas depot servicing Terminals 2 and 3 is located near T2, making it necessary to transport the avgas supply to T3 by truck.

Matibag also announced during the press conference that he will submit his courtesy resignation on June 30, the last day of the Arroyo administration.

Matibag said the T3 repairs started after Japanese contractor Takenaka released the subcontractors from their contractual obligations in the terminal. The “release” gave the subcontractors the go-signal to repair their own infrastructure in T3 without fear of getting sued by Takenaka for breach of contract.

“We would be happy to relinquish control of T3 to the coming administration, knowing full well that it will be ready after the repair and rehabilitation of important facilities there,” Matibag said.

It was largely through the efforts of Matibag and former MIAA manager Alfonso Cusi that Cebu Pacific transferred operations to T3, where it now practically enjoys a monopoly of the new terminal.

“Cebu Pacific is handling from 28,000 to 30,000 passengers a day at T3,” Matibag said. Last year the air carrier registered 8.8 million passengers, a 30-percent increase over the previous year.

Matibag said he will leave Naia with a surplus of P400 million, although his target for half of the year was P800 million.

Zero tariff on oil, steel approved

Manila Bulletin

ANGELES CITY, Pampanga – The government will lose as much as P4 billion in annual revenues following the Arroyo administration's decision to impose zero tariffs on imported petroleum products and midstream steel products in a bid to stabilize supply and lower their prices in the domestic market.

President Gloria Macapagal Arroyo approved Tuesday the recommendation of the Cabinet-level inter-agency Committee on Tariff and Related Matters (CTRM) on tariff reductions of said products during a National Economic and Development Authority (NEDA)-Cabinet meeting at the Angeles University Foundation here.

The President’s approval of the schedule of tariff cuts on rice, coconut oil, sugar, and other raw materials for detergents and yarns in compliance with trade commitments with the Asian regional bloc will further reduce the government's revenue base.

Apart from correcting tariff distortions arising from free trade pacts with the Association of Southeast Asian Nations (ASEAN), Finance Secretary Margarito Teves Jr. said the reduced tariffs on the said products sought to promote economic activity as well as ease the burden of the public from high prices.

Teves, speaking to reporters after the Cabinet assembly, said the most favored nation rate of imported crude oil, refined petroleum products would be slashed from 3 percent to zero under the ASEAN Trade in Goods Agreement.

In slashing the oil tariff duties, the government must also follow the provision of the Oil Deregulation Act, which mandates a “single and uniform” tariff for petroleum products, according to Trade Secretary Jesli Lapus.

The temporary lifting of the 7 percent duty on hot rolled coils (HRC) and cold rolled coils (CRC) also meant as relief for the local galvanizing industry, Lapus told reporters. He noted that steel companies earlier threatened to raise their prices by 3 to 5 percent amid surging prices of ore in the world market.

Teves said the steel tariff, however, would revert back to the 7 percent rate once the country's lone HRC/CRC steel producer, Global Steel Philippines Inc. (GSPI), returns to normal operations. GSPI has been unable to supply the Filipino Galvanizers, Inc. (FGI) with HRC and CRC due to financial problems and high world prices of steel.

He said the tariff removal on HRC and CRC would also result in savings in raw material costs to the downstream sector. The Philippines is a net importer of HRC, CRC as well as galvanized iron sheets.

With the elimination of import tariffs, Lapus said oil and steel companies are expected to slash the prices of their products to benefit the consumers and “not necessarily pocket their savings.” “This is a revenue loss for the government but a gain resulting in a lower cost of living for the public,” he said.

As part the country’s trade commitment to ASEAN, Teves also announced that the Arroyo government has committed to maintain a tariff of 40 percent on its imports of rice from the ASEAN until January 1, 2015, when the rate shall be reduced to 35 percent.

Tariffs on sugar imported from ASEAN countries will also be kept at 38 percent until 2011 and will be lowered to 28 percent in 2012, 18 percent in 2013, 10 percent in 2014, and 0-5 percent in 2015.

Teves said the NEDA-Cabinet board also approved the tariff reduction of mixed alkylbenzene (raw material of detergents) and mixed alkylnaphthalene from 3 percent to 1 percent as well as monofilament yarns from 10 percent to 1 percent.

Tariff on refined coconut oil will be slashed from 10 percent to zero, Teves said. “This product will also be moved from the sensitive list to the normal track of preferred tariff in consistent with the tariff reduction agreement among members of the ASEAN,” he said.

Teves admitted that the government would lose P3 billion in revenues from the implementation of the oil tariff cuts and another P400 million to P1 billion in the tariff reduction of other materials.

To replace the foregone revenues, he urged the incoming leadership to be keep an open mind and remain “flexible” in endorsing a number revenue generating measures, such as higher taxes on alcohol and tobacco products and sales tax on goods and services.

He said the next administration should also look into the improving tax administration and collection as well as intensifying the campaign against smuggling to boost revenues.

Despite its failure to balance the budget, he assured that Arroyo government would leave a “manageable” fiscal situation to the administration of presidential frontrunner Sen. Benigno Aquino III.

With Aquino's wide popular support, he said the incoming leader could adequately explain to the public about the need to stabilize the government's finances to rein in the budget deficit during his “honeymoon period.”

The President is expected to issue the executive orders to formalize the implementation of the tariff cuts in the coming days, Teves said.

Petron Corporation earlier pushed for the removal of the 3 percent most favored nation (MFN) tariff on petroleum products. The company has complained that importers of refined oil products in Association of Southeast Asian Nations (ASEAN) are in better shape since they can bring in their products from other Southeast Asian countries at zero tariff under an ASEAN free trade area. The local oil firm on the other hand pays 3 percent duty on the crude oil imported from the Middle East and incurs additional cost for the refinery.

Savings from the duty-free importation, meantime, are expected to result in lower cost of production estimated at $68.64 or P3.088 per metric ton CRC for galvanizers. This may be passed on to consumers at estimated 5 percent price reduction per sheet.

Tuesday, 25 May 2010

The Banksters

John Mangun
Outside The Box
Business Mirror

The past two weeks have shown the absolute chaos in the global financial markets, the rampant speculation and manipulation of those markets, and the complete inability and helpless incompetence of sovereign national governments to do anything about it.

Read this from the president of one of those governments about the financial institutions and banks: “Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the (Central) Bank to speculate. When you won, you divided the profits amongst yourselves, and when you lost, you charged it to the Bank. Beyond question this great and powerful institution has been actively engaged in attempting to influence the elections of the public officers by means of its money. You are a den of vipers and thieves.”

The problem is that those words were spoken by US President Andrew Jackson in 1832 and nothing has changed since then.

The record of the last two weeks:

The European Union (EU) and the US put up $1 trillion to support the euro and guarantee the sovereign debt of Greece and others. The gangsters in suits, the “Banksters” sell all the debt they can at a premium government-supported price and then sell the euro to levels that threaten the EU itself while pocketing a nice portion of that $1 trillion.

Western stock markets react somewhat favorably to the bailout and then are sold down when the financial press, in the hands of the Banksters, paint more gloom and doom, saying primarily that $1 trillion may not be enough. The Banksters’ greed is unlimited.

The price of gold, which trading is dominated by the public buying and holding physical gold, not by the Banksters who hate gold, rises to historic levels as a flight to currency safety and to other hard assets takes place to protect hard-earned wealth.

The Banksters made billions selling European government debt and the euro, forcing EU government-debt interest rates to rise, prompting the Banksters to buy back in, for an even higher profit on that debt.

Last week the US and German governments passed laws to help curtail the speculation in an attempt to bring some order back to the financial markets and protect the wealth of the hundreds of millions of ordinary citizens who have a portion of their wealth in the stock markets and whose economies depend on stable and fairly valued currencies.

In retaliation, the Banksters sell paper gold on the commodity futures exchanges, not physical gold which they do not own, driving down the price of gold and raising the price of the euro which they had bought at much lower prices when they drove the euro down during the previous week. On one day last week, 66 tons of “paper gold” were sold in one day, one of the largest changes in history. Driving the price of gold down also makes the US dollar go up, the same dollar that they bought the week before when they sold the euro.

The Banksters profited on the euro, the dollar, and European government debt at the same time that tens of millions across the West are jobless, losing their homes, many facing financial ruin, and looking at a bleaker future. A den of vipers and thieves.

Further, to show their power, they “paper sell” the western stock markets again devastating the portfolios of individual small investors who actually invest and do not speculate for the short term. Hundreds of billions of dollars of small investor wealth disappeared as the Banksters put the profits in their pockets.

In order to keep the masses from rioting in the streets, the Bankster-controlled financial press still keeps talking about the wonderful economic recovery in the US. While the public sees their wealth evaporate and their economies deteriorate, they are being fed the lies that everything is really “all good.”

Every American knows that the US economy is driven by consumer spending. So, remarkably, with every retail-spending report there is no bad news. The lie is that as long as retail spending is going up even slightly, the economy is recovering. Except, the US government keeps extending jobless benefits and cash handouts paid with more debt, since there is no job creation. By extending unemployment benefits, it has temporarily maintained consumption, although at historically low levels, for millions of people.

Although every American knows people who have been out of work for a long time and cannot find a job, the official unemployment numbers stay at single digit. Why? Change the official definition of unemployment. If the same measure was used today as was used during the Clinton administration, the official unemployment rate would be 22 percent. But that would cause real panic—something the Banksters cannot afford.

However, after having said all of this, this drunken orgy of financial chaos will come to an end. Both fortunately and unfortunately, it must come to end as it always has in the past as the Banksters, the financial vampires, suck the last drop of blood before the victim becomes useless to them.

This soon-to-come end is fortunate because global markets and economies will once again begin to rebuild. It is unfortunate because the human cost will be enormous as the economies and markets lie in rubble, nearly destroyed by the Banksters and the incompetent governments which they own.

And the Philippines? Where are the world’s best-performing stock markets? Southeast Asia, including the Philippines. Which countries are showing sustained growth through the turmoil? The Philippines and countries like the Philippines. Which countries have a continuing positive balance of payments? The Philippines and countries like the Philippines. Which countries are showing current- account surpluses? The Philippines and countries like the Philippines.

And once again, and maybe forever. Buy the peso. Buy the PSE. Oh, and buy local property. We are going to see another boom here as the local outsourcing business is exploding and overseas Filipinos come home to retire.

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

Monday, 24 May 2010

Inaugural of the Paving of the Junction National Road Bitnong Belance Nueva Vizcaya Boundary Road Project

Business confidence rises to near high in Q2 2010

Bangko Sentral
Media Releases

Business confidence rises to near high in Q2 2010

Business sentiment was more buoyant in the second quarter of 2010, with the overall confidence index (CI) rising to 43.9 percent from 39.1 percent in Q1 2010 and -2.6 percent in Q2 2009. The confidence index is computed as the percentage of firms that answered in the affirmative less the percentage of firms that answered in the negative with respect to their views on a given indicator. 1

The current quarter CI approximated pre-2008 crisis levels when business optimism reached its peak during the period Q4 2006 - Q4 2007. The improved business outlook is consistent with the expected broad-based, solid economic growth this year which draws support from the recovery in export revenues, moderate inflation, steady growth of overseas Filipinos’ (OFs) remittances and stable peso. Businesses also attributed their bullish outlook to the anticipated higher consumer spending attendant to the May national elections. The favorable business sentiment likewise mirrored the improving business confidence in countries such as Hong Kong, Indonesia, Singapore, Germany, Italy, and the United States.

Business optimism in both the National Capital Region (NCR) and Areas Outside NCR (AONCR) continued to improve in Q2 2010 relative to the outlook prevailing a quarter ago. NCR respondents were notably more positive in their business outlook than respondents based in AONCR, indicating that economic conditions and prospects remained more favorable in NCR compared to that in AONCR.

Following the continued gradual recovery in global trade and improved external demand for Philippine goods, respondents involved in exporting and dual international trading were the most bullish in their outlook in Q2 and Q3 2010, with the CIs reaching all-time high levels since the nationwide survey commenced in Q1 2007.

All firms, regardless of the size of operations, remained positive in their business outlook in the current and next quarters. Large firms were the most optimistic followed by the medium and small firms.

Optimism remains across sectors

Reflecting the improved overall business sentiment on the macroeconomy, businesses across sectors continued to have a more favorable outlook in Q2 2010.

The services sector had the most favorable outlook, pulled up largely by the heightened optimism of the financial intermediation sub-sector which benefited from key reforms that helped ensure steady asset expansion, improving overall asset quality and ample liquidity and solvency of the domestic banking system. Contributing also to the improved sentiment of the services sector were the buoyant outlook of the renting and business activities as well as hotels and restaurants sub-sector.

The sentiment of the industry sector continued to improve, with mining and quarrying, and manufacturing exhibiting greater optimism. Improving metal prices and the robust growth in exports, particularly the rebound in the country’s top dollar earner – electronics, provided the impetus for a more positive outlook in Q2 2010.

Similarly, the level of optimism of the wholesale and retail trade sector remained high, buoyed by respondents’ expectations of higher consumer spending in the domestic market due partly to the opening of the school year in June and election-related spending that spurred business activity in the sector. Meanwhile, the business outlook of the construction sector remained upbeat and stable.

Expectations for the next quarter tracked those in the current quarter with all sectoral indices moving on an uptrend year-on-year. Consistent with the usual downtrend in the business cycle during the rainy season, all sectors’ outlook for Q3 2010 declined quarter-on-quarter.

Positive sentiment on own business operations continues

Businesses’ outlook about their own operations showed a mixed pattern across sectors. The industry and services sectors indicated a more positive outlook, partly explained by the expected increase in the total orders and improved business activity. Meanwhile, the optimism of the other two sectors, although remaining positive, declined quarter-on-quarter. The expected pile-up of inventory due to sluggish activity in the wholesale and retail trade sector in the previous quarter slightly pulled down the sentiment of wholesalers and retailers.

Credit access and financial conditions of firms are more favorable

Credit access continued to be favorable in Q2 2010 as more firms reported a significant increase in their access to credit compared with their quarter- and year-ago levels. Financial conditions likewise improved but remained tight as the index remained in the negative territory at -5.0 percent. These survey results could possibly be due to the combined effects of continued easing of banks’ credit standards and tightening conditions of the firms’ loan contracts.

Employment expectations show a high level of optimism in the next quarter

The employment outlook index at 19.9 percent, although lower from its quarter-ago level, indicated that hiring of additional employees is expected to continue in Q3 2010. Favorable employment prospects were anticipated in the services sector (specifically renting and business activities, and financial intermediation sub-sectors).

More firms have plans for expansion

Consistent with the more positive outlook of the industry sector about their own operations, more firms indicated expansion plans for Q3 2010. Expansion plans were noted across all sub-sectors, with the mining and quarrying sub-sector recording the highest year-on-year growth.

Competition, weak demand and financial problems limit business activity

Competition, weak demand (leading to low sales volume), and financial problems were the key challenges to business activity in Q2 2010. These three business constraints were the same factors identified by the respondents since Q1 2009.

Higher inflation and interest rates as well as a stronger peso are expected in Q2 and Q3 2010

Respondent firms expected inflation and interest rates to go up and the peso to appreciate in Q2 and Q3 2010. However, fewer respondents during the quarter expected that inflation and interest rates would go up compared with the previous quarter’s survey results. In contrast, more firms expected the peso to appreciate compared with their quarter- and year-ago levels.

The anticipated appreciation of the peso in Q2 and Q3 2010 could stem from sustained foreign exchange inflows arising from the improved performance of exports, steady OF remittances, and foreign direct and portfolio investments.

The survey response rate is 75.1 percent

The Q2 2010 BES was conducted during the period 5 April – 7 May 2010. There were 1,632 firms surveyed nationwide. Respondents were drawn from the Securities and Exchange Commission’s Top 7,000 Corporations, as follows: 603 companies in NCR (36.9 percent) and 1,029 firms in AONCR (63.1 percent), covering all 17 regions nationwide. The survey response rate for this quarter was 75.1 percent. For NCR, the response rate was 75.3 percent (from 77.6 percent last quarter); and for AONCR, the response rate was 74.9 percent (from 70.4 percent).

A breakdown of responses received by type of business showed that 12.0 percent were importers, 7.2 percent were exporters, and 13.6 percent were both importers and exporters. About two-thirds of the respondents were neither importers nor exporters or those that did not specify their firm type.


1 A positive CI indicates a favorable view.

Filipino sailors sent home $888M in 1Q, up 11%

But Greek debt crisis worries labor center

MANILA, Philippines—Filipino sailors on foreign ocean-going vessels wired home a total of $888.949 million in the first quarter, up 11.04 percent or $88.414 million from the $800.535 million they remitted over the same three-month period in 2009, the Trade Union Congress of the Philippines (TUCP) said over the weekend.

In a news release, TUCP secretary general and former Senator Ernesto Herrera said the 11.04 percent growth in the money sent home by sailors was nearly double the 5.96-percent increase in the cash remitted by land-based migrant Filipino workers in the first quarter.

"We remain bullish overall about the potential growth in remittances from Filipino sailors in the months ahead," said Herrera, former chairman of the Senate committee on labor, employment and human resources development.

"However, we are also deeply worried about Greece's lingering debt crisis, which could depress economic conditions as well as shipping activity in Europe," added Herrera, whose labor center includes the Philippine Seafarers' Union.

Of the 10 biggest sources of remittances from Filipino sailors, six are European countries, Herrera pointed out.

The top 10 sources of Filipino sailors' remittances are the United States, Japan, Norway, Germany, the United Kingdom, Singapore, Greece, the Netherlands, Hong Kong, and Cyprus, according to Herrera.

Remittances from Filipino sailors based in Greece were still up 18 percent in the first quarter to $34.7 million versus $29.3 million a year ago.

However, Herrera also noted that remittances from Filipino sailors based in Norway, the Netherlands, Cyprus, Denmark, Ireland, and Sweden were actually down an average of 20.81 percent.

Last week, the Bangko Sentral ng Pilipinas reported that total remittances from all migrant Filipino workers, whether based on land or at sea, reached $4.339 billion in the first quarter, up 6.96 percent from $4.057 billion over the same period in 2009.

In 2009, Filipino sailors sent home a record $3.4 billion, up $366 million or 12.06 percent from $3.034 billion in 2008.

Remittances from Filipino sailors have more than doubled since 2005, when they sent home only $1.669 billion.

The Working President (452)

Deposits of 10 big banks rise 8.8% to P3.3t

Roderick T. dela Cruz
Manila Standard

Deposits of the country’s 10 biggest banks rose 8.8 percent to P3.317 trillion at the end of March from P3.050 trillion year-on-year, outpacing the loan growth in the first quarter of the year, according to data compiled by Land Bank of the Philippines.

The country’s 10 largest banks extended a combined loans of P1.854 trillion at the end of March this year, up by just 0.2 percent from P1.850 trillion a year ago.

Banco de Oro Unibank had the largest deposits of P678.6 billion as of end-March, up 6.9 percent from a year earlier, while Metrobank had P602.3 billion on an 8.6-percent growth. Bank of the Philippine Islands had P558.8 billion in deposits, representing a 7.9-percent increase from a year ago.

LandBank, the country’s fourth largest, saw the highest growth of 25.1 percent in deposits amounting to P407.8 billion in March from P325.9 billion during the same month in 2009.

BDO remained the largest bank lender with P449.4 billion as of March, up 6 percent from a year ago. Metrobank saw its loans tumble 9.1 percent to P333.5 billion while BPI improved its lending by 5.9 percent to P320.7 billion.

The combined assets of the 10 largest banks grew 9.5 percent to P4.407 trillion as of March from P4.025 trillion a year ago. BDO was the largest bank with P848.5 billion, followed by Metrobank with P821.1 billion and BPI with P684.7 billion.

LandBank also posted the highest growth of 22.3 percent in assets, which hit P522.4 trillion as of March.

Occupying the fifth to 10th spots in terms of asset size were Philippine National Bank with P283.3 billion as of March; Rizal Commercial Banking Corp., P282.6 billion; Development Bank of the Philippines, P273.6 billion; UnionBank, P233 billion; CitiBank, P231 billion; and China Bank, P226 billion.

In terms of capital, Metrobank topped the list with P73.2 billion, higher than BDO’s P69.8 billion and BPI’s P63.6 billion. LandBank had P50.3 billion in capital, which also rose the fastest at 29.2 percent from a year ago.

RP seen to surpass US as geothermal producer

Dennis D. Estopace
Business Mirror

THE Philippines is expected to leap over the United States as the world’s top producer of geothermal power, according to a report by the Geothermal Energy Association (GEA).

The report “Geothermal Energy: International Market Update” identified 70 countries with projects under development or active consideration, a 52-percent increase since 2007. “Projects under development grew the most dramatically in two regions of the world, Europe and Africa.”  

Nevertheless, “The [Philippine] government hopes to increase the on-line capacity to 3,100 megaWatts (MWs) within a decade and to surpass the US as the geothermal power production leader,” said the GEA report released Friday. The GEA report pegged the Philippines as the second-highest producer with 1,904 mWs. “Energy from geothermal power makes up approximately 18 percent of the country’s electricity generation.”

Of the top 24 countries the GEA report listed, the US leads in producing geothermal power with 3,086 MWs, followed by the Philippines and Indonesia (1,197mWs). Thailand is in the last spot, with only 0.3 MW installed capacity.

The GEA report said these countries increased power online by 20 percent since an International Geothermal Association (IGA) report in 2005. “With over 10,000 MWs installed, geothermal power is providing electricity worldwide to over 52 million people.”  

Citing Department of Energy data, the report noted the Philippines total estimated potential of untapped geothermal resource is about 2,600 MWs.

Notably, as much as 40 percent of the world’s geothermal potential is found not in the Philippines but in Indonesia, according to the report.

Citing BusinessMirror stories, the report noted the Energy department has as of April awarded bids for 8 out of 10 geothermal sites under the Philippine Energy Contracting Round. It noted, too, the department’s review of twogeothermal contract areas—Sta. Lourdes-Tagburos, Palawan, 1 MW, and Cagua-Baua, Cagayan, 40 MW.

 The DOE also reportedly awarded two geothermal service contracts to Philippine National Oil Co.-Renewables Corp., with an estimated total generating capacity of 40 MW.

 The GEA report cited the Philippines as only one of nine countries that had “significant” power production developed since the GEA identified in 1999 the 39 countries having the potential to meet 100 percent of their electricity needs through domestic geothermal resources.

GEA executive director Karl Gawell was quoted as saying these countries’ geothermal power production represent, however, “only a small fraction” of the power potential “we could be utilizing. Even if we assume the lowest possible projections for geothermal potential, the vast majority of countries don’t fully use their geothermal resource.”  

In 2009, the GEA estimated the Philippine geothermal power potential is from a low of 3,500 MWs to a high of 5,730 MWs.

Operator of 7-Eleven chain triples profits

NJC Morales

PROFITS OF listed Philippine Seven Corp., the local licensee of convenience store chain 7-Eleven, more than tripled to P50.1 million in the first quarter due to economic recovery and aggressive marketing strategies.

Further expansion has been set by Philippine Seven for the year in a bid to take advantage of higher consumer spending.

System-wide revenue, a measure of sales of all corporate- and franchise-operated stores, rose by 24.5% to P2 billion.

EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 86% to P133 million, from P71.6 million year on year.

The firm said higher earnings allowed it to expand through internally generated funds.

“The improvement in sales can be attributed to various factors such as the positive effect of a recovering economy, good weather conditions, and increased spending in connection with the national and local elections,” Philippine Seven said in its financial report.

In the first three months of the year, Philippine Seven increased stores by 27% or 99 stores to 470, employing a total of 1,136 workers.

“Intensified promotion activities capitalizing on the election campaign implemented at the store level also contributed to sales growth,” Philippine Seven said.

Moreover, new franchisees like oil company Chevron Philippines, Inc. “boosted the store base and resulted into higher franchise revenues of P96.6 million.”

The company said it “plans to achieve the 500th store milestone during the year.”

Philippine Seven secured the exclusive right to operate 7-Eleven stores in the Philippines from Texas-based 7-Eleven, Inc. in 1982.

7-Eleven derives its revenues from retail sales of merchandise, commissions, rentals, and franchising activities.

Shares in Philippine Seven, whose profits went up by 84% to P155.8 million last year, were last traded on May 20 at P12 each.