Wednesday, 7 July 2010
Tuesday, 6 July 2010
Peza investments rise 59% to P61.3b
by Julito G. Rada
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2010/july/5/business3.isx&d=2010/july/5
Investments in the country’s economic zones grew 59 percent to P61.296 billion in the first six months of the year from P38.612 billion a year ago, reflecting economic recovery.
Peza director-general Lilia de Lima said in a report to Trade Secretary Gregory Domingo that P44.981 billion went into the expansion of existing projects while P16.315 billion were contributed by new companies in economic zones and IT parks.
Investments in expansion projects reached P24.521 billion on year while new ones reached P14.090 billion.
De Lima said the number of projects in the first half reached 246, with annual exports projected at $2.840 billion, up 92 percent from $1.482 billion on year.
Employment is projected to increase 5 percent to 44,127 from 41,977 on year.
Promotions and public relations manager Elmer San Pascual said Peza was sticking to its 15-percent growth investment target this year, 10 percent for exports and 10 percent for employment.
“We are sticking to it because there were goals [investments] which are yet to be realized. We are waiting for big investments which may possibly come in the second half of the year,” he said.
He said Peza was not likely to revise the P201-billion target set at the start of the year. “Surpassing P201 billion is very stiff and quite tough for us,” he said.
He expressed optimism that a number of investment pledges from investors in Japan and Taiwan would be realized in the second half of the year. “If those investments come in the second half, there is a possibility that the target of P201 billion would be realized,” he said.
De Lima earlier said meeting the investment target of P201 billion this year was possible following a good performance in 2009 when the agency surpassed its 10-percent growth target.
De Lima said investments in the electronics sector would help fuel the growth, noting last year’s performance.
San Pascual said a Taiwanese investor and a big Japanese company engaged in the manufacture of medical products were finalizing their investment sites in the Philippines.
He also said the medical tourism project of boxer Manny Pacquiao still needed a local government endorsement and an environment certificate before it is cleared by Malacañang.
What global economic crisis?
Written by John Mangun
Outside the Box
Business Mirror
http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=27300:what-global-economic-crisis&catid=28:opinion&Itemid=64
The news that the Bangko Sentral ng Pilipinas (BSP) expects second-quarter economic growth to be better than the 7.35 percent experienced in the first quarter of 2010 is significant. The BSP, unlike economic departments of the government such as Finance or Neda, tends to be more conservative and realistic.
The article carried in the BusinessMirror attributed the outlook to increased consumer spending, which, according to BSP estimates, accounts for some 70 percent of gross domestic product. The conclusion was that this increase in spending was due to increasing overseas remittances and outsourcing industry income.
While it was nice to see outsourcing mentioned in the same sentence as remittances for a change, the depth of spending that would generate over 7-percent economic growth is much greater than simply inflow of foreign funds from whatever sources.
There will be those who discount government numbers and immediately talk about mass poverty, if the Philippines can come near a 7-percent growth, it is very significant. Granted that the numbers are based off a miserable economic performance in 2009, still, something is happening here in the Philippines.
Critical to the growth of an economy is investment. Without capital investment, jobs are not created and individual wealth cannot grow. Both the Philippine Economic Zone Authority (Peza) and the Board of Investments (BOI) saw investments jump in 2010. Peza-approved investments for the first half went up by 59 percent to P61.3 billion, and the BOI said its approvals jumped by 318 percent to P170 billion.
Even as the BSP tended to dismiss a little of the impact of these investments, saying that it was partly due to the need to rebuild from the natural disasters of 2009, companies do not spend unless they think they can profit from their expenditures.
Further, the consumer who ultimately is the financial beneficiary of all this investment is not hesitating at all to buy and increase personal spending.
Although a good portion of the rest of the world is in financial panic mode, here in the Philippines there is a confidence and optimism that is surprising, as if business and consumers understand that the Philippines is in an entirely different place. The general mood seems to be one of “What global economic crisis?”
Look at the exploding activity in the residential real-estate sector. Every major property developer, Ayala, Century, Robinsons, Megaworld, Shoemart, and the rest, is building thousands of new units across the Metro area. Multiple tens of billions of pesos are being put into these projects almost nonstop.
The old conventional wisdom that these are being sold just to foreigners and balikbayan does not hold any more. Overseas remittances cannot be the only driver behind the profitability of this real estate. This is housing for local buyers.
More important, this is sustainable economic activity with the positive results reaching far into the future. People do not just buy condos; they must also buy the furniture, appliances, and the rest to live in these condos. And next to these condos rise shopping centers, creating more employment and more wealth. The multiplier effect for a development that eventually holds several thousand residents is far-reaching, from local transportation like jeepneys and tricycles to the banks that provide the financing to buy the units.
In addition, the desire to invest is reaching deep into the structure of the economy. While the government cautions that the country faces the serious potential of a power deficiency, companies are turning to this sector also as a profitable venture. Phinma group is planning to put up a 270-megawatt (MW) coal-fired power plant in Batangas.
The range of investments is large. Metro Pacific Investments (MPI) has been systematically and aggressively buying hospitals all over the country. MPI sees P10 billion in annual revenues when it eventually secures 3,000 beds within five years. Currently MPI owns Riverside Medical Center in Bacolod, Makati Medical Center and Cardinal Santos Medical Center in Metro Manila, and Davao Doctors Hospital in Mindanao. MPI is also looking at smaller hospitals in the provinces.
The significance of this kind of an investment cannot be ignored. A company of MPI’s size and stature venturing into rural health care improves health-care delivery in those areas with, again, a great multiplier economic effect.
I particularly like this statement: “Nestlé Philippines Inc., Friday announced an initial investment of P4.3 billion over two years for a new factory in Tanauan, Batangas, to expand production capacities of coffee creamer and milk products to cope with a strong domestic market.” From the Nestlé CEO John Miller, “This is an investment in the future.” Notice the words “strong domestic market.”
While the exporters are worried about an appreciating peso, in truth, business looks good for that sector also. “Semiconductor and Electronics Industry of the Philippines Inc. chairman Arthur Young said in an interview with Philexport News and Features that the industry has scaled up its export projection for the whole year to a range between 25 percent and 30 percent.” And coconut oil replaced garments as the country’s second-largest export for the month of April with a 372-percent growth.
Those in the media and too many of those in the Philippine stock market still believe that the Philippines is some sort of branch office or subsidiary of the West. It is just not true anymore. The Philippine economy has matured to the point where it is beginning to stand on its own. Sure, remittances from all sources are still critical and vital. But with every quarter that passes, the country becomes more self-reliant and confident of that self-reliance.
There is a long way to go. Agriculture, power generation, less dependence on imported energy sources are all top priorities. But the Philippines is not the basket case of the 1990s anymore. And the more people that realize that and get on board with pushing and demanding government policies and personal behavior to achieve economic prosperity, the sooner that prosperity will become a reality.
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Bumps ahead to test gov’t
Analysts stress need to address fiscal situation
BusinessWorld
http://www.bworld.com.ph/main/content.php?id=13750
THE AQUINO ADMINISTRATION appears to have hit the ground running but fiscal headaches -- some of the new president’s making -- could test its resolve to move the country forward.
Fiscal consolidation and a correction of the downturn-induced slippage, analysts said in two reports, are necessary if President Benigno C. Aquino III is to avoid disappointing both his voters and investors.
This would require more than just administrative improvements, economists Margarita D. Gonzales and Romeo L. Bernardo of research firm GlobalSource Partners said in a July 3 report titled "A Good Start."
They noted that while Mr. Aquino had put together a "commendable" economic team, he had also hampered fiscal managers by populist promises such as not adopting new taxes.
"Although there are well-known low-lying fruit including the eradication of wholesale oil smuggling, estimated revenue gains from this exercise would hardly be enough to bring back the country’s tax effort ratio to around 15%, which is the new government’s announced goal," they said.
The ratio was at 13.1% last year.
Tax administration improvements, the economists claimed, added just 0.6% and 0.5% to gross domestic product (GDP), respectively, during the terms of Mr. Aquino’s mother, the late Corazon C. Aquino, and her successor, Fidel V. Ramos.
Global experience, meanwhile, has shown that achieving a revenue collection improvement equal to of 1% of GDP "would already be a feat."
The economists also noted that Mr. Aquino’s campaign slogan of "Kung walang corrupt, walang mahirap (without corruption, nobody will be poor)" had created expectations that would be difficult to meet.
Poverty eradication, they said, requires "broader solutions encompassing a complete set of reforms". Failure to deliver on inaugural speech promises of emergency employment, better education, universal health insurance and housing -- which means added spending -- could set the president up for "quick disappointment of his voters."
Mr. Aquino, they said, should make use of his current political capital -- he won over 40% of the vote in the May 10 elections -- to push reforms as he has "little time to waste, especially as financial market sentiment is becoming less forgiving of growing fiscal deficits and debt ratios with the world eventually exiting recession and reversing from a fiscal stimulus mode."
GlobalSource highlighted two measures -- excise tax adjustments and the rationalization of fiscal incentives -- as among those needed, adding that hopefully it would take "not that long" for economic managers to prod Mr. Aquino.
"We are confident though that the new government will live within its means in the meantime, as fiscal authorities will likely ensure that spending will be controlled," the economists said.
But they warned that the 2010 deficit could top P300 billion, rising to as high as 3.8% of GDP and exceeding the 3.6% target, given uncertain privatization prospects and the P145.2-billion first half cap having been substantially overshot by P17 billion in May.
GlobalSource also said that the central bank was expected to "stall exit plans" as inflation remained moderate. The report noted monetary authorities’ expectations that remittances would "normalize" to 5-6% growth in the near future, among other external indicators, and said analysts saw the domestic stock market remaining bullish and could "still approach highs reached in 2007."
"This confidence, especially of local investors, is bolstered by studies showing how equities typically jump 12 months after an election, with this coming year unlikely to be an exception in view of the smooth turnover of leadership and the new president’s strong mandate," Global Source said.
Meanwhile, in a research note dated June 29, the Institute of International Finance (IIF) said the Aquino administration’ "first order of business would be to correct the fiscal slippage."
But the IIF -- a global association of financial institutions -- said the government should be able to do so before investors lose their confidence, noting state debt of less than 60% of GDP and an economy that has recovered from last year’s downturn.
"Fiscal adjustment will complement President Aquino’s anti-corruption campaign, so his first budget due out in the third quarter should reveal much about the new government’s intentions," it said in the report, titled "Philippines: New President’s Fiscal Policy Headache."
It noted that the global crisis had interrupted the previous government’s gains in controlling the deficit which, excluding privatization proceeds, was kept below 2% of GDP between 2006 and 2008. Crisis-induced revenue weakness and pump-priming expenditures pushed this to 3.9% last year and even higher to 6.9% as of the first quarter of 2010.
The revenue picture, however, has since improved, the IIF said, as it cited gains by the tax and customs bureaus, among others.
Limited market reaction has supported the tack that had been adopted, it said, adding that large reserves -- at a record $41 billion in May -- and a balance of payments surplus "help assuage near-term market concerns."
The economy, the IIF said, could rebound to 6.2% growth this year from 2009’s 1.1%, moderating to 5.2% in 2011.
"All this suggests that President Aquino is likely to take the window of opportunity provided by favorable economic trends and market support to correct the fiscal slippage and set a positive tone for his administration," it said.
Monday, 5 July 2010
Don’t pooh-pooh growth
By BERNARDO M. VILLEGAS
Manila Bulletin
http://www.mb.com.ph/articles/265203/don-t-poohpooh-growth
It is fashionable among critics and skeptics to pooh-pooh the growth of 7.3% in GDP attained during the first quarter of 2010. The usual line is that the high growth is not accompanied by poverty reduction and increase in employment. Too many people are still living in dehumanizing poverty. Too many workers are unemployed or underemployed. These criticisms are useful to the extent that they remind us that the end all of human development is development for each and every person and of the whole person.
It would be tragic, however, if the new Administration is not going to try its best to attain a GDP growth of 7 percent or more annually during the next six years. Economic growth is not a sufficient condition for eradicating poverty. But it is a necessary condition. Countries in Asia that have succeeded in eradicating or at least diminishing poverty in the last 30 years have done so because they have attained growth of 7 percent or more for 10, 20 or more consecutive years. The notable case is China that has liberated 300 or more million of its citizens from abject poverty because its leaders have known how to make the Chinese economy grow at an average of 9 to 10% for two decades. At a less dramatic rate, India and Vietnam are doing the same thing. Soon Indonesia will follow. These emerging markets are following the example set by Singapore, Taiwan, Hong Kong and South Korea in the last century when their economies also grew at rates of 9 to 11 percent annually for two decades.
Economic growth provides an economy with the necessary resources to spend on education, health, housing and the infrastructures that address directly the needs of the poor. In the last 30 years, the Philippines has not attained the necessary growth rate to make a significant impact on mass poverty.
This is very well stated in a most comprehensive report on Poverty in the Philippines published by the Asian Development last year. Written by Filipino economist Dr. Fernando Aldaba, the well documented report contrasts the Philippine experience with those of its peers in the Asia Pacific region: "Poverty and inequality have been recurrent challenges in the Philippines and have again come to the fore in the wake of the current global financial crisis and rising food, fuel, and commodity prices experienced in 2008. The proportions of households living below the official poverty line has declined very slowly and unevenly in the past four decades, and poverty reduction has been much slower than in neighboring countries such as the People's Republic of China (PRC), Indonesia, Thailand and Vietnam. The growth of the economy has been characterized by boom and bust cycles and current episodes of moderate economic expansion have had limited impact on poverty reduction."
I am sure President Noynoy Aquino is fully aware of the fact that the target year of the United Nations Millennium Development Goal (MDG) is 2015, the year before his last as President of the Philippines. His economic advisers must have informed him of the accomplishments so far of MDG goals. As reported in the ADB Report, the following gains have been made under the last Administration: (1) decrease in the proportion of people living in extreme poverty; (2) visible improvements in household and population poverty indicators; (3) maintenance of net enrollment rates by sex at both elementary and primary education levels; (4) reduction in infant deaths per 1,000 live births; (5) prevalence of HIV\AIDS below the national target of 1% of the population; (6) improvements in environmental protection; and (7) active participation in the World Trade Organization.
I have made no secret about my strong disagreement with the United Nations, the Asian Development Bank and other international agencies that have a fixation on population control. As I have written countless of times in these columns, there are enough natural forces that have reduced the fertility rate from a high of 6 babies per fertile woman in the 1970s to 3.1 today. In the next 20 years, the decline will continue so that within another generation, the Philippines will reach the replacement rate of 2.1 babies per fertile woman through increased education of women, especially in the poor regions of Mindanao; increased urbanization; later marriages; and the practice of responsible parenthood by the lower-income families facing extreme poverty, with the help of NGOs and business enterprises. I suggest that the next Administration focus completely on maternal health and forget the very controversial reproductive health programs. I find it more reasonable that mothers should be helped to deliver safely rather than to stop them from being mothers in the first place.
I disagree with one of the conclusions of the ADB report, i.e. that high levels of population growth are direct causes of poverty. As my colleague at the University of Asia and the Pacific, Dr. Roberto de Vera, has pointed out in his research on Philippine demography, large families are poor not because they are large. What distinguishes a large family that is well-to-do from one that is poor is the level of education of the head of the family. This conclusion of Dr. de Vera once again highlights the importance of spending a larger portion of the government budget on education. Where will the government get the funds to spend more on education? From the relentless fight against corruption promised by President Aquino during the campaign. Close to P400 billion can be made available annually for government spending if tax evasion of P200 billion and another P200 billion from misappropriation of public funds are prevented.
To summarize, the fight against poverty will require attaining economic growth of 7 percent or more for the next two decades, starting the next six years under President Noynoy Aquino. To attain this growth rate, the government must continue to invest in critical infrastructures, especially in the countryside.
There must also be an all-out effort to promote private investments in such high-growth sectors as energy, infrastructures, tourism, agribusiness, business process outsourcing, education, health care and medical tourism, and logistics. The role of foreign direct investments will be critical here, as has been shown by the experiences of China, Vietnam and Indonesia. All unreasonable restrictions against FDIs must be removed in the first year of the Aquino II Administration. For comments, my email address is bvillegas@uap.edu.ph.
Sunday, 4 July 2010
President Aquino's speech during AFP change of command
GMANews.TV
http://www.gmanews.tv/story/195050/president-aquinos-speech-during-afp-change-of-command
Ito ang unang pagkakataon kong makasama kayo bilang inyong Pangulo at inyong commander-in-chief. Ngunit noong Miyerkules, natanggap ko na ang inyong unang parangal: hindi lang ako, kundi ang buong sambayanan ay nagalak sa propesyonalismo, disiplina, at kurtesiyang inialay ninyo hindi lang sa akin, kundi sa buong bansa.
I commend all of you: officers and men and women of our Armed Forces, for the dedication to duty you displayed during the last elections. Kayo ang tagapagtanggol ng ating estado: ito ay nakasaad sa ating Saligang Batas. Karapat-dapat lamang na ang unang pahayag ko sa inyo bilang inyong Pangulo ay ang pagpapaabot ng pasasalamat ng sambayanang Pilipino sa pagganap ninyo ng inyong mga tungkulin sa nakaraang kampanya at halalan: wala kayong kinilingan kundi ang mamamayang Pilipino. Wala kayong piniling panig kundi ang pagpapalakas lamang ng ating demoksraya.
Sa araw na ito, nais ko kayong kausapin nang tapat at nang walang paliguy-ligoy. Marami tayong haharapin na pagsubok. Alam ko na pinakinggan niyo ang aking Inaugural Address at alam na ninyo na malapit kayo sa aking isipan. Makakaasa kayo na ang inyong mga pangangailangan ay tututukan ng aking administrasyon.
Katulad ng sinabi ko noong Miyerkules, nagsisimula ang wastong pamumuno sa pagpili ng mga wastong pinuno. Our Constitution explicitly provides for civilian authority over the military. That is why your commander-in-chief is a civilian, and his alter ego for the Department of Defense is one, too. This is why the Secretary of National Defense, while a distinguished veteran officer, has spent ample time in civilian life. This is also why your senior officers must undergo confirmation by the Commission on Appointments of Congress.
Within the Armed Forces, there is a structure that places a general officer at the head of the officer corps together with your major service commanders. This is why we have a chief of staff who is appointed by the commander-in-chief.
Noong Hunyo 29, aking ipinakilala si retired Lt. Gen. Voltaire Gazmin bilang aking Secretary of National Defense, at si Lt. Gen. Ricardo David bilang susunod na AFP chief of staff. Nandito tayo ngayon upang saksihan ang assumption of command ni General David, at upang ipaabot ko sa kaniya, at sa inyo, ang mga magiging patakaran ng ating pamahalaan.
I expect of you professionalism, integrity, discipline, valor, and hard work. You can expect the same of me.
Ang inyong propesyonalismo – ang pagsusunod sa mga utos na legal, sa wastong paraan ng walang pasubali - ay posible lamang kung nagsisimula ang propesyonalismong ito sa mga hanay ng inyong Pangulo at mga heneral. Wala akong duda na nais ng ating officer corps na panatilihin ang kanilang integridad. Makakasiguro kayong lahat na ang inyong Pangulo at ang ating Kalihim Gazmin ay hindi gagamitin ang sistema ng pagpili at pagpromote upang pairalin ang pansariling interes.
Ang iba sa ating mga officers na kamakailan lamang ay hindi nakaabot sa deadline ng Commission ng Appointments, ay makakasiguro na ang kanilang mga promotion ay isusumiteng muli sa simula ng sesyon ng Kongreso. Katulad ng sinabi ko noong Pangulong-halal na ako, sisiguraduhin lang natin na basta’t dumaan sa wastong proseso ang mga promosyong ito, ipapadala natin ang mga ito sa lehislatura.
Ngunit kahit nakatanggap na ang inyong mga koronel at heneral ng karapat-dapat na promosyon, kung ang ating mga kawal ay kulang sa kagamitan, benepisyo at tirahan, wala sa atin ang makakagawa ng ating mga tungkulin.
Alam nating lahat na kakambal ng isang masiglang ekonomiya ang kapayapaan at seguridad. Without stability we cannot expect people to invest in our county. Achieving and maintaining stability is your obligation. Ngunit, naiintindihan ko na mahirap itong makamit hangga’t hindi sapat sa kagamitan at kaalaman ng ating hukbong sandatahan. Hangga’t hindi natutugunan ang mga pangangailan ng bawat sundalo, paano matutugunan ng bawat sundalo ang pangangailangan ng sambayanan?
Tell us what you need and we will give it to you, as long as they are based on principles of professionalism and utilitarianism; as long as they will benefit the whole institution and not only the interests of a few. If we use and allocate our resources efficiently, we will not only be able to improve the well-being of our armed forces but also that of our citizenry. With a livelier and more responsive economy, we will be able to further address your needs.
Kaya inatasan ko si Secretary Gazmin na siguraduhin na ang modernisasyon ng ating hukbong sandatahan ay hindi lamang maitutuloy, kundi higit na magiging instrumento pa para sa pagpapatibay at pagpapalakas ng inyong pagmamahal at pagsisilbi sa sambayanan. Kasama na dito ang pagpapalawak ng inyong hanay, dahil habang dumoble na ang ating populasyon, nanatili pa rin ang inyong bilang. Sibilyan man o militar, hindi kailangang puro pagtitiis ang tadhana ng Pilipino. Uulitin ko ang sinabi ko sa bayan at sa mundo: hindi tama na ang nagmamalasakit ay kinakawawa.
Therefore, the things I expect of you, and which you can expect of your commander-in-chief, are things necessary to undertake the modernization of our armed forces. If all of us follow the rules, and insist on professionalism, integrity is enhanced. If we undertake our tasks with discipline, we can confront all challenges with the valor the history of our country has proven we all have. If we all work hard, we can find creative solutions to our problems, assured of strategic harmony within the armed forces, and between the civilians and the military.
I say strategic harmony because we must confront the reality that over the past years, strategy took a back seat to tactical considerations. I believe that the military functions best when the civilian and military leadership all share a clear understanding of the national security, and have crafted a clear plan which in turn can properly inform tactical decisions.
Ang ating bagong chief of staff ay nagpatunay na ang mga konsiderasyong ito ay maisusulong niya anuman ang pagsubok na haharapin.
We will need the experience, the expertise, and known probity of General Ricardo David, who shares my view that our national security objectives should be a multi-stakeholder effort focused on protecting our rights and civil liberties. He brings with him years of experience as NOLCOM commander which, I am confident, will likewise benefit the rest of the nation, not just Luzon.
In General David, I expect not only decisive leadership, but an innovative spirit that would drive reform in the Armed Forces, as well as the effective and efficient realization of the national defense and security thrusts that I have just outlined. I ask everyone to support your new chief of staff, to follow the chain of command and to look forward to proud and glorious days ahead.
As our country suffered, so have our soldiers, and the situation could only worsen unless priorities are met. Simple problems and deficiencies have compounded over the years due to corruption, which our administration has vowed to stop. I expect the entire Armed Forces of the Philippines to be the vanguard of the government’s quest to reform itself, to clean up its own backyard to serve as the model and inspiration for other government agencies.
With your long tradition of sustaining the high military ideals of honor and discipline, sacrifice and dedication to serve the people and country, I am certain that the Armed Forces will once again take the lead in delivering our country and our people lasting peace and stability, development and social progress.
Men and women of the armed forces: to adopt the words of Winston Churchill, I will give you the tools to do your job. I will hold all of you to the highest standards not because I doubt you, but precisely because I have the fullest confidence in all of you. You have done well and will do even better; I will be fair, just, and supportive. I expect you to be the same. Our people expect no less of all of us, and I know that you will further consecrate yourselves to defending our democracy, and that you will fight for our Republic, for the liberty and prosperity of our people.
Sa ating kasundaluhan, kasama ninyo ako sa adhikaing magkaroon ng repormang makabuluhan, makatao, maka-diyos at maka-bayan. Maraming salamat po sa inyong lahat! Mabuhay ang Hukbong Sandatahan ng Sambayanang Pilipino!
Foreign currency deposits hit $24b
by Roderick T. dela Cruz
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2010/july/3/business2.isx&d=2010/july/3
Bank deposits denominated in the US dollar and other foreign currencies hit a record level of $24.062 billion as of the first quarter of 2010, Bangko Sentral reported Friday.
The figure was up 13.7 percent from just $21.168 billion year-on-year and 6.4 percent higher from $22.617 billion in the fourth quarter of 2009.
About 98 percent of the deposits came from Filipino depositors, and the balance from non-residents, Bangko Sentral said.
Outstanding loans granted by foreign currency deposit units of banks, however, fell 6 percent year-on-year and 2.3 percent quarter-on-quarter as of end-March, as many companies and individuals decided to repay their short-term loans, instead of obtaining new ones.
With the contraction in FCDU loans and expansion in deposits, the overall loans-to-deposits ratio declined to 19.8 percent in the first quarter from 21.5 percent in the fourth quarter.
Bangko Sentral said the outstanding loans granted by FCDUs of banks fell $115 million to $4.8 billion as of end-March from $4.9 billion in December.
It attributed the decline to higher loan repayments, which in effect reduced “the potential risk to FCDU borrowers posed by adverse foreign exchange movements.”
An FCDU is a unit of a local bank or a branch of a foreign bank granted with a license by Bangko Sentral to receive foreign currency-denominated deposits or extend foreign currency loans.
Foreign currency loans dipped $311 million or 6 percent from $5.1-billion level in March 2009 as a result of the transfer of certain FCDU loans to an offshore branch of a foreign bank that had the effect of reducing the FCDU loan portfolio.
Outstanding loans with medium and long-term maturities that are payable over a term of more than one year accounted for 64 percent of total foreign currency loans.
Strong RP civil society the envy of Singapore
By DJ Yap
Philippine Daily Inquirer
http://globalnation.inquirer.net/news/breakingnews/view/20100701-278546/Strong-RP-civil-society-the-envy-of-Singapore
SINGAPORE—If there was something ultra-rich Singapore could learn from the still-developing Philippines, it would be how to have a more engaged civil society, a Singapore official here said.
Lionel Yeo, chief executive officer and dean of Singapore’s Civil Service College, praised the Philippines for having such a strong civil society that had taken on some roles traditionally assumed by government.
“When I visited Manila a few years ago, I was struck by the strength of its civil society,” Yeo said in response to a question about the ideal division of roles between government and private sector to ensure the sustainable future of cities.
On the sidelines of the World Cities Summit at Suntec City here held from June 28-July 1, Yeo spoke before reporters from several Asian countries, including the Philippines.
Social infrastructure
In some governments like Singapore, he said the residents expected the government to take a leadership role in providing what he called “social infrastructure,” which included housing, education and health.
In Singapore, Yeo said all residents enjoyed free basic education and heavily subsidized housing and health care.
But the context is different in other countries, like the Philippines, where the civil society has taken a much more participatory role in such social infrastructure programs.
He cited the “massive programs” of Gawad Kalinga, a nongovernmental organization which constructs low-cost houses for indigent families around the country.
“Personally, I would like to see Singapore have the same kind of active civil society,” Yeo said.
Sharing experiences
The official said the summit sought to be a platform in which local government officials and ministers could share each others’ experiences and best practices in urban management.
The goal, he said, was to replicate some of these practices in other countries, while considering their different histories and contexts.
Yeo admitted that no two cities are the same; thus what worked for one would not necessarily work in another, although by adapting these practices with the city’s profile, they could still be of great help.
The event drew several hundred local executives, academics and policy-makers who came to share and discuss practical and sustainable strategies to respond to the challenges faced by an increasingly urbanized world.
Saturday, 3 July 2010
MMDA spy cameras show President following traffic rules
By Niña Calleja
Philippine Daily Inquirer
http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100703-278896/MMDA-spy-cameras-show-President-following-traffic-rules
MANILA, Philippines — On their screens linked to spy cameras on the road, personnel of the Metropolitan Manila Development Authority (MMDA) watched the President pass through Edsa, stop at every red light and make U-turns like an ordinary motorist.
“We are very impressed,” MMDA General Manager Robert Nacianceno said yesterday after monitoring the convoy of President Aquino on its way to Camp Aguinaldo for the military handover ceremony.
“We kept talking about it over the radio. It was amazing to see our President setting an example for our motorists,” Nacianceno said.
Nacianceno advised Aquino, however, that if he wanted to survive the heavy traffic in Metro Manila and avoid being late for his appointments, he should leave his house “earlier than usual.”
“He is showing us that a government official is a public servant and, thus, must serve the people. How will you do that if you always get ahead and take advantage of your constituents?” he said.
Reminder to violators
Nacianceno said Aquino’s policy banning the use of street sirens had helped the MMDA enforce traffic regulations.
“Every time we apprehend those with blinkers and sirens, traffic enforcers would say ‘Even the President follows the rules.’ Violators will now be ashamed to evade the law,” he said.
Nacianceno said he and other MMDA officials were no longer resorting to unnecessary counterflows on the road. “Nakakahiya (It’s embarrassing),” he said.
Even cops must obey
The Manila Police District (MPD) director, Chief Supt. Rodolfo Magtibay, reminded policemen to themselves obey traffic rules, including avoiding the use of blinkers and sirens in non-police operations.
Apart from avoiding use of blinkers and sirens on their private vehicles, policemen driving motorcycles should always wear crash helmets and heed traffic signs.
Magtibay particularly warned policemen against driving against the flow of traffic and flaunting their badges when stopped for traffic violation.
“How can we expect private motorists to obey traffic rules if the policemen themselves are disregarding them,” Magtibay said.
Manila policemen caught violating traffic rules will be charged administratively, he said.
Quezon City police operatives said the anti-sirens policy should be reviewed so not to hamper their operations.
“We volunteered to dismantle the devices in compliance with an order and avoid possible administrative charges, but guidelines should be issued because there are police operations where these gadgets are needed,” said one officer, who asked not to be named for fear of sanctions.
With reports from Jeannette I. Andrade and Nancy Carvajal
Pancake buying Indon, Thai restaurant chains
by Jenniffer B. Austria
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2010/july/2/business2.isx&d=2010/july/2
Pancake House Inc. is expanding in Southeast Asia by acquiring restaurant chains in Thailand and Indonesia.
Pancake House president Martin Lorenzo told reporters after the annual stockholders’ meeting that the company was in talks with the owners of one restaurant in Indonesia and another in Thailand for the planned acquisition. The purchase of the two brands is expected to cost between $10 million and $15 million.
Lorenzo, without naming the restaurant brands, said he hoped the transactions would be completed within the year.
He said the Indonesian restaurant had 80 outlets while the Thai chain had 30. Both brands are in the fast casual segment of the market with cashflow of between $6 million and $7 million annually.
“We believe that the fastest way to expand in Southeast Asia is by acquiring brands in these areas,” Lorenzo said.
He said the acquisition of the two restaurants would increase the contribution of overseas operations to 40 percent of the company’s revenues from just less than 5 percent.
The local company has several Pancake House branches in Malaysia.
Pancake House is looking at system-wide sales to grow by 15 percent to P2.6 billion from P2.2 billion in 2009 and cashflow to increase to P340 million from P300 million a year ago.
Pancake House operates several restaurant brands, including its flagship brand Pancake House, Dencio’s, Kabisera, Singkit, Teriyaki Boy, Sizzlin Pepper Steak and Le Coeur de France.
Lorenzo, meanwhile, said the company planned to acquire a popular roadside barbeque restaurant and transform into a fastfood chain.
San Miguel and Metro Pacific in Clark airport talks
by Jeremiah F. de Guzman and Cecille Garcia
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2010/july/2/business1.isx&d=2010/july/2
Diversifying conglomerate San Miguel Corp. confirmed Thursday that it is in talks with Metro Pacific Investments Corp. to build a modern terminal building in Clark Airport.
San Miguel made the disclosure after the chairman of Clark International Airport Corp. said Metro Pacific chairman Manuel Pangilinan was holding negotiations with San Miguel president Ramon Ang to jointly construct a second terminal in Diosdado Macapagal International Airport in Clark, Pampanga.
“Mr. Pangilinan has already expressed intentions to contract the construction and management of the DMIA terminal II in partnership with San Miguel Corp. president Ramon Ang and the government should act swiftly to be able to realize the project without delays,” said Nestor Mangio, chairman of CIAC and concurrent head of Subic-Clark Alliance for Development.
Mangio told Manila Standard after the inauguration of the P308-million DMIA Terminal 1 Expansion Building over the weekend that Pangilinan, also chairman of Philippine Long Distance Telephone Co., had expressed strong interest to invest billions of pesos in tourism and transportation-related projects in Central Luzon.
Metro Pacific recently bagged the contract to maintain and operate the 94-kilometer Subic-Clark-Tarlac Expressway. It also operates the 8-km Subic Tipo Road that connects SCTEx to the Subic Bay Freeport.
Mangio said DMIA also planned to build a high-speed railway system and airport hotels, similar to those in Hong Kong International Airport to complement the DMIA terminal expansion project.
“We have been asked to look at international airports, and we’re looking at it. All I know is the country needs a new international airport,” Pangilinan earlier said.
A Malaysian consortium, Bristeel Overseas Ventures Inc., earlier offered to invest $150 million to develop and expand DMIA Terminal to reach a passenger capacity of seven million annually. It proposed to enter into a joint venture agreement with CIAC on the project.
CIAC, however, said a joint venture special committee appears to favor Philco Aero Inc.’s proposal to instead build a second terminal building for the airport expansion.
DMIA Terminal 2 will San Miguel’s second investment in an airport project after acquiring a majority stake in Caticlan International Airport Development Corp., the developer of Caticlan Airport off Boracay Island.
DMIA, which is 85 km away from Naia, is the main airport serving the immediate vicinity of the Clark Special Economic Zone.
It is host to several foreign budget carriers, including Tiger Airways of Singapore, Air Asia of Malaysia and Asiana Airlines of Korea and local airlines like Cebu Pacific Air, South East Asian Airlines and Spirit of Manila Airlines.
The carriers fly to routes such as Kuala Lumpur, Kota Kinabalu, Hong Kong, Macau, Bangkok and South Korea with connecting flights to the US, China and Japan.
Clark, which is part of major growth corridors, is about one-and-a-half to four hours away from other major Asian destinations.
