Video and Text by Pia Faustino
Friday, 30 July 2010
By Amy R. Remo
Philippine Daily Inquirer
ENERGY DEVELOPMENT Corp., the country’s biggest producer of geothermal energy, plans to invest some $1 billion over the next five years in greenfield power plants.
This move is expected to help propel EDC to become the top geothermal company in the world over the next three to five years.
The power firm plans to put up geothermal facilities that could generate a total of 230 megawatts (MW) within its existing concession areas, EDC president Richard B. Tantoco said during a briefing following the company’s stockholders’ meeting.
EDC also wants to start the construction of its 86-MW wind farm in Burgos, Ilocos Norte, sometime late this year or early next year, he added.
According to Tantoco, the company may spend as much as $3.5 million to produce a megawatt of geothermal power through its greenfield facilities, and about $2.5 million per megawatt for its wind power project.
Aside from the $1-billion investment needed for the new power plants, EDC has also earmarked a combined capital expenditure of P20.6 billion for projects to be undertaken this year until 2015. The amount will be used to rehabilitate existing power plants, conduct further drilling activities and improve the company’s facilities.
He further revealed that, for this year alone, the company had allocated close to P7 billion for capital expenditure.
In particular, the greenfield expansion and rehabilitation projects that are expected to be completed by 2015 will include the 150-MW Bacman geothermal plant and the 86-MW wind farm in Burgos, Ilocos Norte (2012); the 40-MW Tanawon and 20-MW Nasulo geothermal projects (2013); 50-MW Mindanao 3 geothermal project (2014); and the 40-MW Rangas geothermal project and 40-MW Kayabon project (2015).
Overall, Tantoco said the general target was to increase the company’s attributable generating capacity by 38 percent to 1,542 MW, from the current 1,116 MW, within a five-year period starting 2011.
“We are now in a position to decisively move on to our organic expansion after successfully acquiring all the National Power Corp. assets we targeted,” he said.
“We will be drilling in the Tanawon field of the Bacman concession by September. By July 2011, we will have a total of four rigs in Tanawon and one in Mindanao, all working to deliver the fuel supply for our growth projects,” Tantoco added.
EDC’s steamfield and power plant operations are now fully integrated with the acquisition of the 112.5-MW Tongonan 1, 192.5-MW Palinpinon and 150-MW Bacman geothermal plants from Napocor.
EDC also owns and operates the Unified Leyte plants, consisting of the 125-MW Upper Mahiao, 180-MW Mahanagdong, 232-MW Malitbog and 51-MW optimization plants.
To date, EDC remains the largest producer of geothermal energy in the Philippines, accounting for 62 percent of the total country installed geothermal capacity. Aside from geothermal, EDC also owns and operates the 122-MW Pantabangan-Masiway hydroelectric plants.
by Alena Mae S. Flores
Diversifying San Miguel Corp. has expressed interest to go into the nuclear power business, a ranking official said Wednesday.
SMC president Ramon Ang said the company was looking at nuclear power as part of the company’s generation portfolio over the long-term period.
Ang said San Miguel might get a joint venture partner for future nuclear power development projects and did not discount the possibility of a tie-up wih Korea Electric Power Corp.
“[We are] willing to partner with any expert in nuclear,” Ang said.
He said San Miguel was also interested in joining the privatization of the mothballed 600-megawatt Bataan Nuclear Power Plant.
“If the government will bid out Bataan [nuclear plant), we will join,” Ang said.
The Aquino government scrapped plans to revive the Bataan nuclear plant and is now looking at the best option to dispose of the asset.
Meanwhile, sources said San Miguel and Kepco had “agreed in principle” to pursue future power-related joint venture projects.
The source said the agreement might include the possible expansion in the capacity of the 1,200-MW Ilijan natural-gas power plant in Batangas province.
“We agreed to pursue future joint venture projects but no specifics,” the source said.
San Miguel manages the contracted capacity of the Ilijan gas plant after winning the auction in April. It will also manage the fuel requirement of the power plant.
San Miguel offered the highest bid of $480 million for the Batangas plant, which is operated by Kepco. San Miguel is now the country’s largest power player.
Kepco has been looking at expanding the Ilijan capacity, depending on the excess gas from the Malampaya project.
Kepco has been conducting talks with Shell Philippines Exploration B.V., operator of the Malampaya project for the excess gas, but no firm agreement has been reached.
Rolando Bacani, Kepco Philippines general manager for business development, earlier said the expansion would also depend on whether other companies will pursue liquefied natural gas facilities.
“Our expansion has been sidelined but if somebody will put up an LNG facility, then that will push us to expand,” he said.
Bacani said the LNG terminal would house imported natural gas that could be used to fuel power plants and the transport services.
Some investors have already expressed interest to put up LNG terminals in Quezon and Bataan.
Kepco officials said the company was prepared to invest over $400 million to expand the capacity of the Ilijan facility.
Kepco has also expressed interest to work with TeaM Energy Corp., a joint venture between Tokyo Electric Power Co. and Marubeni Corp., to expand the Ilijan facility.
by Jeremiah F. de Guzman
Bloombury Investments Holdings Inc. has started work on a $1-billion leisure hub in Entertainment City in Pasay City.
Bloombury broke ground to start the construction of an integrated resort complex on an 8.3-hectare property at the Bagong Nayong Pilipino-Entertainment City Manila. The Philippine Economic Zone Authority declared the area a special economic zone.
The company is the first among the four developers to start the construction in the Entertainment City.
Bloombury said the investment in the complex is estimated to initially reach $577 million and as much as $1 billion over the long-term period.
The integrated resort complex, named the Solaire Manila Project, will include a five-star, 500-room hotel covering some 165,000 square meters of floor area.
by Jenniffer B. Austria
DMCI Holdings Inc., the holding company of the Consunji family, plans to put up a new 600-megawatt power plant in Calaca, Batangas worth $760 million.
DMCI president Isidro Consunji told reporters after the annual stockholders’ meeting Wednesday that several firms, including Manila Electric Co. and Marubeni Corp. of Japan, had expressed interest to team up with the company to build the plant.
Consunji said either Sem-Calaca Power Corp., a wholly owned subsidiary of Semirara Mining Corp., or a joint venture with interested investors would build the new power plant.
Consunji said construction of the new power plant would start next year after the company completes the rehabilitation of the 340-MW Calaca coal-fired power facility.
Consunji said the rehabilitation of the Calaca power plant, which will start this week, aimed to increase the plant’s capacity to 550 MW. The company will spend $60 million for the rehabilitation and complete it by February next year.
DMCI Holdings, which owns 56 percent of Semirara, won the bidding for the Calaca coal-fired facility in July 2009 with a price offer of $361.7 million.
The Calaca facility consists of two 300-MW generating units designed to run as a base-load plant and use local coal from Semirara Island.
Consunji expects DMCI Holdings to post a net income of P6.3 billion in 2010 from P4.7 billion in 2009 on higher contribution from operating units.
Semirara Mining is expected to contribute P1.8 billion to the company while Maynilad Water Services Inc. will generate P2 billion in net earnings.
DMCI Construction, meanwhile, will account for P1 billion of DMCI Holdings’ total net profit while DMCI Homes will provide another P1.3 billion in income.
Share price of DMCI closed lower at P18.98 Wednesday from Tuesday’s close of P19.20.
Semirara ended lower at P108.80 from P110.20 Tuesday.
The Board of Investments, meanwhile, approved the application of Unisan Biogen Group to seek fiscla incentives for for its 10-megawatt biomass power plant in Barangay Muliguin, Unisan, Quezon under the Renewable Act of 2008.
The P1.673-billion project will use coconut husks, wood chips and other biomass wastes as fuels for the operation of the plant.
by Joyce Pangco Pañares
PALACE officials acknowledged Wednesday that there was nothing illegal in the way the previous administration released funds during the first half of the year, two days after President Benigno Aquino III slammed his predecessor for leaving only 10 percent of the national budget intact.
Budget Undersecretary Mario Relampagos said the Arroyo administration could have been more prudent in its spending, but all the releases were “well within the budget appropriation.”
Relampagos also corrected President Aquino’s statement that the government was left with only P100 billion, saying the right figure was P591.4 billion.
In a press briefing at the Palace, the Budget official said the Arroyo administration had released P949.2 billion of the 2010 budget as of June 30 because infrastructure projects had to be pursued during the summer months.
Of the P591.4 billion left, P313 billion was for automatic appropriations such as interest payments and internal revenue allotments, P115.4 billion was for personal services, and P62 billion was for congressional initiatives.
Relampagos said the P100 billion figure that President Aquino mentioned in his State-of-the-Nation Address was the amount that he may declare as savings, which could be used to augment the administration’s priority programs.
“Legally, there’s nothing anomalous in the releases,’’ Relampagos said. “There’s nothing illegal because everything is within the authority granted by Congress to the executive branch to spend for the year.”
But Relampagos said the Arroyo administration could have been more prudent in its spending to prevent exceeding the budget deficit ceiling by P51 billion for the first six months.
With a P23-billion revenue shortfall, prudence dictated that the government should have lowered its spending, Relampagos said.
If revenue was not forthcoming and the government could not support the allotments that had been issued, then it shouldn’t be too quick to authorize more spending.
Presidential spokesman Edwin Lacierda denied that Mr. Aquino was trying to mislead the public in saying only P100 billion was left by the past administration for him to spend.
“There was no statement there to mislead the people. That’s the only amount that he had wiggle-room for,” Lacierda said.
JPMorgan Chase & Co., a leading global financial services firm, formally dedicated its new Global Service Center in Taguig City on Wednesday.
The 23-storey facility, the Net Plaza Building, is located in the eSquare Zone, Bonifacio Global City.
The occasion also served as a social event for key clients of the firm’s Investment Bank.
Roberto Panlilio, JPMorgan Chase & Co. Senior Country Officer, was pleased to announce the expansion of the Philippine operations. “We continue to be committed to leveraging the talent, creativity and passion of the Filipino people and to building a sustainable culture of innovation and value creation for the firm and its customers around the world,” Panlilio said.
The Net Plaza site has 6,100 seats, making it the firm’s largest facility in the country.
JPMorgan Chase & Co. has over 9,000 employees in the Philippines and close to 240,000 globally, serving over 90 million customers around the world, including the most prominent corporate, institutional, and government clients under its JP Morgan and Chase brands.
In 2005, the firm first established its Global Service Center in the Philippines, providing a wide variety of support such as analytics, finance, credit analysis, research, voice-based services, IT support, training, and other functions to its investment banking, treasury and securities services, retail financial services, and card services lines of business. JPMorgan Chase & Co. also maintains facilities in Net Quad, Taguig City; Philamlife Tower, Makati City; and eBloc Tower, Cebu City.
Senior Country Operations Officer Barry Marshall attributed a lot of the firm's success to employees reporting directly into the lines of business that they support, ensuring their greater understanding of the total end-to-end process and greatly impacting the company’s mission of providing quality financial services to the firm’s global clients. “We have had a strong 50-year history in the country, and we are committed to developing and ensuring an ideal workplace for all our employees both through our facilities and the corporate culture which we champion,” Marshall said.
According to Marshall, the production area was designed to be as comfortable and spacious as JPMorgan Chase & Co. offices worldwide. “We have installed ergonomic furniture in honeycomb-shaped work areas, and outfitted the entire Net Plaza building based on global specifications, down to the type of ceiling tiles used,” Marshall explained.
The Global Service Center in Net Plaza also houses a world-class Career Hub that manages a rigorous screening process, “enabling us to recruit the right kind of people, with the goal of transforming high potential individuals into high achieving, professional experts,” Marshall said.
To support its talent pool in the Philippines, JPMorgan Chase & Co. encourages employees to actively engage in a variety of lifestyle-enhancing activities, wellness programs, and corporate social responsibility initiatives. Recently, the world-renowned firm became one of the principal sponsors of the Mind Museum, an ongoing world class science museum project of the Bonifacio Art Foundation.
This continued focus on improving the employee experience resulted in the firm being recognized by the Philippine Economic Zone Authority (PEZA) as an Outstanding Employer in 2009.
By BERNIE CAHILES-MAGKILAT
World’s third largest content security provider Trend Micro Inc. has transformed its Philippine operation as its global hub.
Company chief executive officer Eva Chen told reporters on Wednesday’s inauguration of its new headquarters in Ortigas that they now employ 1,200 highly skilled Filipino IT engineers for the development of anti virus solutions and other internet threats to the data base of their clients.
The Philippine hub primarily does antivirus research, execute red alerts, provides support services to its head office and customers and software development.
The Philippine operation is supported by a back-up team in Texas that is also composed of 40 Filipinos, which are rotated every six months.
The Texas back-up team was created to provide redundancy of operation when the Philippine headquarters suffer some disruptions.
Company chief financial officer Mahendra Negi said the global company earned $1-billion revenues last year and is expected to post double digit growth this year.
Trend Micro, which is listed in the Tokyo Stock Exchange, was the first IT-enabled company that the Philippine Economic Zone Authority approved in 1998.
It has an initial investment of P182.680 million. The company is 99.90 percent Japanese-owned.
Trend Micro, which is known for producing anti-virus software such as PC-Cillin, estimates that that one new malware is created every 1.5 seconds and that 92 percent of the threats arrive via the internet.
The Philippine operation specializes in threat detection though its TrendLabs, which has the facility and trained people to come up with an anti-virus solutions quickly to avert the threat.
While the company has acknowledged challenges in looking for the right people with the right skills, it also provides higher than industry standards compensation.
For a fresh graduate, the entry salary level is P20,000 a month. The company also provides intensive training.
The company has suffered an attrition rate of 10 percent as some trained employes have been lured by better compensation packages to work abroad.
There was one instance when over 100 company engineers left for Singapore work.
By JONATHAN M. HICAP
Filipino whiz kids bagged 31 medals, including two team gold medals, in the International Math Competition (IMC) held in South Korea from July 25 to 29.
A total of 604 elementary and high school students competed in the contest in which 151 teams from 26 countries and territories, including China, Canada, Thailand, Australia, South Africa, Taiwan, Philippines, and host country South Korea competed.
“We are proud of our students’ performance in South Korea,” said Dr. Simon Chua, head of delegation and president of the
Mathematics Trainers Guild-Philippines (MTG), an organization of math experts that trained the students for the competition.
According to Chua and Rechilda Villame, MTG vice president, the entire Philippine team won two gold medals, one silver, 28 bronzes and 11 merit awards in the contest.
The two gold medals were garnered by Philippine Teams A and B in the team contest in the Korea Elementary Mathematics International Competition (KEMIC), the contest for elementary division. Teams A and B also won bronze in the group contest.
Team A is composed of Jason Joseph Fernandez of San Beda College-Alabang in Muntinlupa City, Kaye Janelle Yao of Grace Christian College, and Ma. Czarina Angela Lao and Vince Benedict Say, both students of Saint Jude Catholic School. On the other hand, Team B is composed of Raymond Joseph Fadri of San Beda College-Alabang, Andrew Brandon Ong of Chiang Kai Shek College, Austin Edrich Chua of Saint Jude Catholic School, and Nathaniel Joshua Balete of Philippine Institute of Quezon City.
The individual bronze medalists of the Philippine team in the elementary and high school divisions are: all the members of elementary Teams A and B – Miguel Lorenzo Ildesa of PAREF Westbridge School, Shawn Gabriele Cabanes of Zamboanga Chong Hua High School, Camille Tyrene Dee of Immaculate Conception Academy, Sarah Jane Cua of Pangasinan Universal Institute, Brendon Matthew Go of Xavier School, Audrey Celine Lao of Saint Jude Catholic School, Michael Brodeth of Philippine Science High School Main, Mikaela Angelina Uy of Saint Jude Catholic School, Justin Edric Yturzaeta of Jubilee Christian Academy, Kenneth Co of Philippine Science High School-Main, and Vance Eldric Go of Saint Jude Catholic School.
Elementary Team D won a bronze in the team and group contests while Team C bagged a bronze in the team contest. Teams C and D are composed of Magin Benedict Ferrer, Mark Davidson Cua, Miguel Lorenzo Ildesa, Sedrick Scott Keh, Gen Mark Tanno, Miguel Luis Rivera, Ramon Galvan III and Shawn Gabrielle Cabanes.
In the high school division or the Korea Invitational World Youth Mathematics Inter-City Competition (KIWYMIC), Team A composed of Janssen Lawrence Chan, Michelin Ang, Camille Tyrene Dee and Sarah Jane Cua bagged a silver medal in the team contest.
On the other hand, high school Teams B, C, and D composed of Aldrich Aldwin Mayoralgo, Brendon Matthew Go, Julius Vincent Sy, Audrey Celine Lao, Hubert Yao, Keefe Collin Tan, Michel Brodeth, Mikaela Angelina Uy, Justin Edric Yturzaeta, Kenneth Co, Neil Jordan Chua Goy, and Vance Eldric Go won a bronze each in the team contest. Team D also won a bronze in the group contest.
The team leaders and coaches of the RP team are Villame, Dr. Eduardo Dela Cruz, dean of the Arellano University School of Education; Robert Degolacion, Joseph Wee, Isidro Aguilar, Jonathan Glorial, Manuel Kotah, Rodello De Asis, and Eugenia Guerra.
China was declared overall champion in the contest. Other countries that competed in the IMC are Bulgaria, Bangladesh, Brunei, Cyprus, Hong Kong, India, Indonesia, Iran, Macau, Malaysia, Mexico, Mongolia, Nepal, Nigeria, Singapore, Sri Lanka, Zimbabwe and United Arab Emirates.
Thursday, 29 July 2010
Philippines to sell peso-denominated bonds overseas for the first time
Bloomberg, with Elaine Ramos Alanguilan
THE government plans to borrow P766.4 billion and to raise at least another $200 million this year to finance infrastructure spending, Finance Secretary Cesar Purisima said Tuesday.
He said the Philippines was confident it would win a higher debt rating under President Benigno Aquino III, and that it planned to sell peso-denominated bonds overseas for the first time in the next quarter.
“We will probably start issuing within the next three to four months depending on the market situation,” Purisima said.
The notes would have maturities of five-to-10 years and the sales would help “diversify our sources of funding and better manage our liabilities,” he said.
Mr. Aquino took office June 30, and his government has since outlined plans to borrow P766.4 billion or $17 billion this year—8 percent more than his predecessor’s target—to plug a budget deficit forecast to reach a record P325 billion.
Budget Secretary Florencio Abad said the administration was looking at what’s left of this year’s budget to finance priority programs and yet keep its expenditures within the deficit ceiling.
He said the previous administration had already spent 61 percent of this year’s P1.54-trillion budget, so that only 6.5 percent or P100 billion was left to spend on programs with a direct impact on social development.
“At a mere 6.5 percent of the total budget, [the P100 billion] offers very little room for flexibility to provide immediate and necessary development interventions for the remainder of the year,” Abad said.
Mr. Aquino on Monday pledged to build more roads and ports to help achieve an annual economic growth of at least 7 percent, a pace of expansion achieved just once in the last three decades.
The deficit might widen to 4 percent of the gross domestic product this year from 3.9 percent in 2009, Purisima said.
He told Bloomberg he aimed to reduce the shortfall to 2 percent of national output and increase tax revenue to 16 percent by 2013 to help win upgrades from credit-rating firms. Tax collection last year was equivalent to about 13 percent of GDP, he said.
The Philippines’ long-term foreign-currency debt ratings are Ba3 at Moody’s Investors Service and BB- at Standard & Poor’s, three levels below investment grade. Indonesia, Southeast Asia’s biggest economy, is rated one level higher at both Moody’s and S&P.
“We will get that upgrade; the sooner the better,” Purisima said.
“I do believe we should probably be rated at least equal to Indonesia.”
The Philippines would continue to sell foreign-currency debt abroad and planned to add to this year’s sale of debt to Filipinos working abroad, Purisima said.
The government sold $1.5 billion of dollar-denominated bonds and Y100 billion ($1.1 billion) of the so-called Samurai notes in the first quarter, and $500 million worth of dollar- and euro-denominated debt to Filipinos overseas in April.
The planned global issue of peso-denominated bonds would offer similar yields as local debt and at maturity would be settled in US dollars at the prevailing exchange rate, Purisima said.
The peso has strengthened 0.6 percent to 45.97 to the dollar so far in 2010, and has appreciated in four of the last five years.
The average spread on Philippine dollar bonds has shrunk to 198 basis points, or 1.98 percentage points above similar-maturity Treasuries, from 291 a year ago, according to JPMorgan’s EMBI Index.
The gap ended last week at 196, the lowest premium since May 3. The overall average spread on the EMBI+ index is 278 basis points.
“Peso global bonds is something we’d welcome,” said Edwin Gutierrez, who manages about $5 billion of emerging-market debt at Aberdeen Asset Management Plc in London.
“The dollar bonds have fallen so much in yield and investors need relatively higher-yielding bonds in local currency.”
LISTED First Metro Investment Corp., the investment banking arm of the Metrobank Group, posted a surge in first half profits on the back of increased earnings from its fund raising activities.
READ MORE (http://www.bworld.com.ph/main/content.php?id=14966)
Written by Cai U. Ordinario
THE National Economic and Development Authority (Neda) has indicated that the extension of the Light Rail Transit 2 (LRT2) to the Marcos Highway and the previously proposed road linking the South Luzon Expressway (Slex) to the North Luzon Expressway (Nlex) were among the “strongest contenders” for the public-private partnerships (PPP) being pushed by the Aquino administration.
Rolando Tungpalan, Neda deputy director-general for investment programming also mentioned Laiban Dam as a “good candidate” for PPP. In this connection, the Abacus Consolidated Resources & Holdings Inc. yesterday disclosed to the local bourse its proposal to undertake the Laiban Dam project through a P60-billion joint venture with the government.
The extension of the LRT2-to-Marcos-Highway line will start from the Santolan Station where the line now ends, to the Masinag Market. The previously proposed connector road that would link Slex with Nlex was initially proposed to be funded through a loan from the Chinese government.
Tungpalan said PPP projects could also be derived from the Comprehensive Infrastructure Investment Program, which already identified “ready to go” projects. The only thing lacking in these projects is funding.
“I think the marching orders are we want the PPP processing time reduced to six months. This now puts the onus on the implementing agencies to have better quality proposals so that implementation bottlenecks are addressed,” Tungpalan said.
He also said that if the government was bent on changing some provisions in the joint venture guidelines and the build-operate-transfer (BOT) implementing rules and regulations, the President only needed to issue an Executive Order (EO) to adopt and implement the changes.
If an EO would be used, the changes in the joint-venture guidelines or BOT rules will not hamper the government’s plan to increase PPPs to spur economic growth, Tungpalan said.
Joint ventures and BOT projects would reduce government expenses in public undertakings like infrastructure projects.
The joint-venture guidelines and the BOT rules are currently being reviewed by the interagency Infrastructure Committee in preparation for the government’s plans for more PPPs to help finance big-ticket infrastructure projects.
In his first State of the Nation Address (Sona), the President said undertaking PPPs can boost the economy and address the country’s development constraints, considering that of the P1.54-trillion 2010 budget, only P100 billion or 6.5 percent can be used for the remaining six months of the year. This means that only around 1 percent of the total budget can be used for each month until the end of 2010.
Tungpalan said that because of this, Neda wanted to be more proactive in seeking PPPs. He noted that in the past, the government merely waited for proposals to come in. Now, given the need to significantly push for PPPs, Neda will have to start telling agencies which projects can have the most economic benefits, in line with the priorities of the Aquino administration.
Earlier, the Philippine Constructors Association (PCA) Inc. urged the Aquino administration to revise the joint-venture guidelines created by the Arroyo administration to increase transparency and accountability in these kinds of PPPs.
PCA executive director Manolito Madrasto said the PCA is seeking the extension of the Swiss Challenge to at least 180 days from the current 30 calendar days and the inclusion of the Neda Investment Coordination Committee oversight on all joint-venture projects.
A Swiss challenge is a process by which other private groups could still come forward to make an offer to match the bid of the proponent.
Under the guidelines, only the head of the government entity concerned is given the authority to approve the proposed joint- venture agreement, regardless of amount. Clearance from the departments of Finance and Budget and Management would be required only when the joint-venture agreement requires national government undertakings, subsidies or guarantees.
STRONG ARROYO LEGACY CITED
By Ronnel Domingo
Philippine Daily Inquirer
Related report in Business Mirror.
Related report in BusinessWorld.
MANILA, Philippines—Renewed investor confidence in the country and less red tape can help push economic growth rate up to 8 percent next year, Socioeconomic Planning Secretary Cayetano Paderanga Jr. said Wednesday.
“We will work on what we need to do in order to obtain a growth rate ... somewhere around seven to eight percent by 2011,” Paderanga said.
Paderanga told reporters that streamlined business procedures and more transparent investment measures could help bring in the money needed to speed up growth.
“We feel that with some of the changes [the new administration will pursue], especially in government procedures and infrastructure, there will be increase in investment opportunities,” he said at a press briefing.
This year’s economic growth is expected to exceed the target of 5-6 percent.
The economy has grown an average of about 4.4 percent over the past 10 years, and analysts have said the country needs to maintain growth at 7 percent to substantially cut poverty.
Paderanga said a top priority was to make the Philippines more attractive for investors and multilateral agencies, and this would be done by eradicating corruption and cutting red tape.
“We are hoping that with the new administration, we can get more credibility so that domestic and also foreign investors will start looking at our country,” he said.
In his State of the Nation Address on Monday, President Benigno Aquino III said he wanted to develop public-private partnerships where private capital would help finance big projects such as a new rail line through the main island of Luzon.
Mr. Aquino said private investment was desperately needed because the Arroyo administration had bled the nation’s coffers nearly dry through misrule and corruption.
Paderanga, also the director general of the National Economic and Development Authority (NEDA), said that one of the main thrusts of the Aquino administration would be the improvement of infrastructure.
He said infrastructure needed in business process outsourcing, tourism and agriculture would be given priority.
Electricity, transport, water
The administration will invest in infrastructure related to electricity, transport, water, irrigation and solid waste management, Paderanga said.
“We hope this might lead to a higher secular growth rate,” the NEDA chief said. Secular growth refers to expansion of the economy without the government taking extraordinary measures.
“We also hope that by next year, [such] changes that we would be making would start to have an effect,” he said.
Fragile global recovery
But this will depend on the external environment, Paderanga said. “The global economic recovery is still fragile and we have to watch that.”
In a prepared statement, Paderanga said the administration would gear up for sustained economic growth by providing an enabling environment for private sector investment through a stable macroeconomic environment.
Analysts agreed that the Philippines could achieve economic growth of up to 8 percent, particularly after a surprisingly strong growth of 7.3 percent in the first quarter.
“We have sufficient domestic savings and, if foreign investment comes in, that will provide the additional booster,” said Victor Abola, economics professor at the Manila-based University of Asia and the Pacific.
Jose Vistan of AB Capital Securities agreed the growth targets could be met, but only if investor confidence improved.
“We need a lot of capital. It will take a lot of hard work. We have to prove ourselves first as an ideal investor destination,” he told Agence France Presse.
Arroyo’s strong legacy
Abola and Vistan also said that, despite Mr. Aquino’s criticisms of former President Gloria Macapagal-Arroyo, she had left him strong economic fundamentals to build upon.
“Gloria Arroyo has been demonized by the media but ... the reality is that we are in the best position economically (since the 1980s),” Abola said.
Even Paderanga acknowledged that the country’s savings and investment rates were rising thanks to stable inflation and interest rates, providing a crucial platform for increasing growth.
NEDA assistant director Myrna Asuncion said there was a good chance that growth in April-June may be higher than the 7.3 percent recorded in the first quarter.
“Most of the indicators in the second quarter are higher than in the first quarter,” Asuncion said in an interview. “Indicators such as automotive sales and exports are up, inflation is within target and the banking sector remains strong.”
She said government economic managers already considered the 5-6 percent target for this year “quite conservative.”
“Some estimates are higher [than that range], but we would have to wait for second-quarter numbers before we could revise the full-year target,” Asuncion added.
She said growth in the second quarter was “leaning toward the high end of the target,” with indications of higher consumption because of the May elections.
The government is expected to announce economic growth data late in August.
“Definitely, second semester growth would be lower than 7 percent because you don’t have the effect of election spending,” Asuncion said. With reports from Agence France-Presse and Reuters
Written by John Mangun
Outside the Box
You need to be serious about increasing your wealth starting today. Not tomorrow, today.
The next 12 months are going to bring wealth-creating opportunities to the Philippines not seen in a decade or more.
Sure, I know that I am going to get a ton of e-mail telling me all the things that are bad about the Philippines. I am used to it. When in early 2009 I said the stock market was going to rally like never before, I was called a pro-Philippines propagandist who was out of touch with reality. The ones who agreed with me doubled the value of their investments in less than a year. And I am telling you it is going to happen again.
While those who are mostly interested in politics listened to President Aquino’s State of the Nation Address (Sona) perhaps with mixed feelings, those who are interested in making hard-earned profits should be jumping for joy. This is the most pro-business speech coming from the lips of a government official or politician since the days of Fidel Ramos.
The people expected Mr. Aquino to speak about good governance, corruption, wasteful spending and all the other sins that the government too often commits and outline a clear and concise and feasible program for solving those problems. He did.
In fact, his speech could have lasted only a few minutes. All the President needs to do and accomplish to resolve so many of the harmful issues facing this country and the economy was contained in two long sentences.
“The never-ending horror story of registering business names, which used to take a minimum of four to eight hours depending on the day, will be cut down drastically to 15 minutes. What used to be a check list of 36 documents will be shortened to a list of six, and the old eight-page application form will be whittled down to one page.”
If the President can accomplish that single task at the Department of Trade and Industry and then cascade that policy throughout every government agency and department, he will have changed the way the Philippine government has been doing business with the private sector for the past 50 years.
Every government document that both the average citizen and the billion-peso corporation need approved increases tenfold the opportunity for public corruption. Every hour that is spent dealing with some inefficient government bureaucracy diverts financial resources that would otherwise be used for productive individual and national wealth building.
Although criticized by some who believe that the government should be some sort of rich Santa Claus, the President’s comments about the Metro Rail Transit (MRT) were honest and factual. “The government tried again to buy the people’s love. The operator was forced to keep the rates low. In effect, the guarantee given to the operator that he will still be able to recoup his investment was not fulfilled. Because of this, LandBank and the Development Bank of the Philippines were ordered to purchase the MRT.”
The build-operate-and-transfer (BOT) scheme was brilliantly implemented here in the Philippines and became a model for other countries to follow. Yet, government politicization of the BOT with the MRT project nearly killed this method of financially sound and profitable partnership between the public and private sector. If the President holds to his promise to “make sure that the build-operate-and-transfer projects will undergo quick and efficient processes. A process that used to take as short as a year and as long as a decade will now only take six months,” it will create a potential flood of new infrastructure projects.
You need to start increasing your wealth by turning off CNN, CNBC and all the other nonsense foreign news and concentrate on what is happening right here. Yesterday’s newspapers were filled with stories of Philippine economic activity.
Imports went up 35 percent so far in 2010, the leader being electronics inputs, which are then exported as finished products. The Philippines imported $2.85 billion more than it exported but the vast majority of things we purchased from aboard—transport equipment, industrial machinery, minerals and fuels, all help increase economic activity and growth.
The country’s manufacturing output grew 25 percent in May and the sales of locally made goods rose 25 percent also. Average capacity utilization in May 2010 for total manufacturing increased to 83 percent. Compare with the US at 72 percent.
This increase in activity is showing up in corporate profits. Philippine Savings Bank (PSBank) recorded a net income nearly 30 percent higher than during the first half of 2009. Food-and-beverage conglomerate RFM Corp. nearly tripled its profit in the first half this year.
Companies are spending their profits to make even more money. Robinsons Land Corp. is spending P1 billion to redevelop five malls this year. Ayala Land Inc. plans to invest as much as P10 billion in property projects over the next two to three years at Fort Bonifacio. San Miguel Corp. intends to raise about P75 billion through issuing new shares, the country’s biggest stock sale ever. And that P75 billion will go for expansion and acquisition.
Private-sector business has built a great momentum over the last 12 months and it is evident in the stock market, corporate profits and expansion, and in economic activity. If the administration can focus its efforts on even just the practical things mentioned in the Sona, then that momentum will grow and flourish at an even faster pace. When the President speaks of public-private partnerships, I hope he means it. The private sector has been waiting a long time for the public sector to come on board to help this country realize and achieve its economic potential. The private sector has been doing all the heavy lifting and it is about time for the government to properly do its share.
E-mail comments to email@example.com. PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.
Tuesday, 27 July 2010
CLICK HERE TO VIEW TABLE
Remittances from overseas Filipinos (OFs) coursed through banks grew year-on-year by 6.5 percent in May 2010 to reach US$1.6 billion, the highest monthly remittance level recorded by the Bangko Sentral ng Pilipinas (BSP). As a result, cumulative remittances for the first five months of the year amounted to US$7.4 billion, higher by 6.6 percent relative to the level registered in the same period a year ago, BSP Governor Amando M. Tetangco, Jr. announced today. Increased remittances were noted from both sea-based and land-based workers (expanding by 8.8 percent and 6.0 percent, respectively).
The steady stream of remittances continued to emanate from the stable demand for professional and skilled Filipino workers worldwide as well as the wider access of overseas Filipinos and their beneficiaries to a broader array of products and services offered by banks to cater to the various needs of their clients, including facilities for payment of utility bills and food delivery from selected food chain stores with established tie-ups. These are the key factors that support the optimistic outlook for sustained remittance flows through the rest of 2010.
Preliminary data obtained from the Philippine Overseas Employment Administration (POEA) indicated that for the first half of the year, approved job orders aggregated 302,844, of which about 35 percent consisted of processed job orders for service, professional, technical, and production and related workers. The bulk of these processed job orders were intended for the manpower requirements of Saudi Arabia, United Arab Emirates and Taiwan. Apart from these prospective employment opportunities, the POEA also reported the deployment in May this year of 119 selected health workers comprising the second batch of nurses and caregivers under the Japan-Philippines Economic Partnership Agreement (JPEPA) which was implemented in 2009.
The main country sources of remittances were the U.S., Canada, Saudi Arabia, Japan, the U.K., Singapore, United Arab Emirates, and Italy. The combined flows from these countries represented 81.5 percent of the total remittances reported by the banks.
ROBERT JA BASILIO JR., GMANews.TV
President Benigno Aquino III missed his opportunity to "cash in on his political capital," when he failed to propose sin tax amendments during his first State of the Nation Address (SONA), two economists interviewed separately by GMANews.TV said.
Using his political capital, President Aquino should have proposed to reform the Philippines' excise tax system, a move that requires legislation, said Victor Abola, an economist at the University of Asia and the Pacific.
"It was a missed opportunity," Abola said. "A new president always comes in with a lot of good capital and he should have exercised it."
Successfully amending the excise tax law would have raised as much as P20 billion in taxes on alcohol and tobacco products for the first year of implementation alone.
Filomeno Sta. Ana, a coordinator of the non-government policy advocacy group Action for Economic Reform (AER), agreed.
"The process of reforming sin taxes should begin now," he told GMANews.TV in a separate interview. "After all, how long does it take Congress to approve this kind of legislation?"
After the first year of collecting newly-adjusted sin taxes, the government is expected to earn P40 billion yearly, previous estimates from the Department of Finance (DOF) said.
Additional revenues sourced from the initiative could be used to spend for health, education, and infrastructure as well as plug a budget shortfall that is expected to reach P325 billion this year.
If no sin tax reform measures are undertaken, Sta. Ana warned that by 2012, excise taxes will erode revenue and that "will aggravate the problem."
Taxes collected from alcohol and tobacco products are composed of four categories, each with different rates.
Although subject to adjustment every two years from 2005 to 2011, the law reportedly is prone to abuse, supposedly allowing companies to report lower sales figures.
Abola also emphasized the need to raise revenues in the short term.
Like Sta. Ana, Abola welcomed the Aquino administration's efforts to file tax evasion and smuggling cases.
However, he said that "the key issue in the short term" is to "hike tax revenues" and that might be difficult especially without new taxes, a promise that Aquino announced during his bid for the presidency.
Aquino's SONA "looked at the past," Abola said, adding that it was just a "sideline."
"Instead, [the SONA] should have focused on the future. We should do whatever is necessary," he added.
Another proposal that the government should look at, according to Abola, would be to raise the corporate income tax rate to 32 percent.
The rate stands at 30 percent now.
The corporate income tax rate was raised to 35 percent and then slowly reduced as part of the Expanded Value Added Tax law that was passed in 2005.
He also called for the revocation of an executive order, signed by former President Gloria Macapagal-Arroyo, that cut oil import taxes to zero from three percent.
The increase of oil prices is not from the tax, Ebola said, adding that "the rise of inflation from taxing oil imports is negligible." - KBK, GMANews.TV
THURSDAY, 22 JULY 2010 20:43
THE case of the unnamed Filipino maid who inherited a whopping P200 million (S$6 million, or $4 million), including an apartment in an upscale part of town, from the Singaporean doctor she served over two decades, is more than just the usual tale of good fortune, or of someone hitting the jackpot.
Those who see it as just that miss the point entirely—that this isn’t the usual fate of Filipino migrant workers, and was the result of a combination of factors: the innate good nature of both the maid and her employer, not to mention the abiding faith of both and their sincere affection for each other, despite the differences in class, culture and intellectual levels; the twist of fate, that the Singaporean doctora, who remained unmarried and had mostly doted on one nephew who regularly visited her, had early on seen the Pinay maid as “family” in almost all aspects, especially after the Filipina took care of the doctor’s ailing mother in the last three years of the latter’s life; then, too, consider that the labor and legal frameworks in Singapore are quite advanced---enhanced, in the last 15 years, by the celebrated case of Flor Contemplacion, which, for all its bitterness, left both Asean neighbors with lasting lessons on how to treat each other’s peoples. Thus, because of the above and other factors, Christine (the name bestowed on the maid by The Straits Times, which had the exclusive story on what it called “The 6-M maid”) came into the vast windfall, but it’s not as if she was like a lucky bettor in a lottery. To be fair to both Christine and the Singaporean employer, who died last year at age 66, the inheritance—and the decision to include her in the will—was a decision that had long ago been made, and Christine and the other relatives of the doctor knew about it. In short, it was a logical offshoot of a long relationship whose lessons should not be obscured by the hugeness of the amount.
It’s often been said that Filipino labor, though relatively costlier in a region where it must compete with millions of, say, Chinese workers charging much lower rates, is valued in many parts of the world because of the English competency of most Pinoys, not to mention their other skills, especially if they are graduates of the sciences, engineering or are IT experts. And yet study after study, and surveys of employers and businessmen around the world, have borne out the inescapable fact, as well: the English and other skills aside, the Filipino genes are wired for goodwill and harmony, for intuitiveness and for high “EQ” (emotional quotient) levels, and a sense of sacrifice that make the people easy to work and live with. We at home don’t usually notice it, or just take it for granted, because we’re caught up in the daily, mundane miseries wrought by traffic, poor services, or corruption at all levels. We start to appreciate the things of value in what has been called “the safety net of character” only when our countrymen live and work abroad, and then we begin to hear or learn about what others have to say about them.
It took Christine more than 20 years for the world to notice that even in a progressive country like Singapore, the most ordinary worker can make a difference. The wonder of it all is that she didn’t set out to make a mark, much less inherit a fortune. As she told The Straits Times, “I’m the luckiest maid in Singapore, with or without the money.” All she wanted was to provide for a family back home, but to her credit—and that of the doctor who treated her like a daughter—they never lost sight of what matters most in this world.
THE story of Christine broke just about the same time that another life, that of “heartist” Joey Velasco, ended.
Velasco died young (43) but, like Christine, made a huge mark with his over 100 paintings showing Christ in daily encounters with the most ordinary, mostly suffering, people.
The most famous of these, Hapag ng Pag-asa (Table of Hope), depicted Christ at the Last Supper, but with street children around him. It was his first and, according to his astounding story, was the result of an epiphany—at a point when he flirted with the thought of ending it all—where some strange force made him paint, even though he had no formal training.
Despite suffering for years from a kidney ailment, Velasco offered his limited time to that singular passion: to depict Christ as the one Great Comforter in daily life. The paintings became the centerpiece for a unique fundraiser that allowed Joey, with the help of other Good Samaritans like Tony Meloto’s Gawad Kalinga, to help some of his favorite “models,” the street urchins, find permanent, albeit modest, homes, and a steady source of livelihood for their families.
His death has brought grief to many and, not unexpectedly, drew many famous people whom he inspired, including President Aquino, to his wake. But there wasn’t the slightest trace of bitterness in those he left behind—only the certainty that the Best Friend had finally taken him into His embrace.
The Filipino achievers who routinely make their mark around the world never fail to do us proud. But it’s the likes of Christine, in Singapore, and Joey, in Manila, who show us why, the soaring achievements aside, Filipinos are prized because, for the most part, they don’t lose sight of what
(I) Aquino cites problems, solutions
Blasts erring gov’t officials
By GENALYN KABILING
President Benigno Aquino III Monday pledged to put an end to wastage of public finances and run a clean and efficient government, as he deplored certain policies and official acts of his predecessor and the government agencies under her.
The President spent the first half of his first State-of-the-Nation Address (SONA) before a joint session of Congress baring six anomalies allegedly committed by the Arroyo government before he laid down his solutions to the nation's woes.
Among these were the nearly depleted national budget, midnight appointments in the state-run water agency, and other financial troubles in agencies concerned with infrastructure, power, and rice importation.
Mr. Aquino, who enjoys a high trust rating based on latest opinion polls, said his administration is committed to take the “straight path” in growing the economy while curbing poverty and corruption in the country.
He also divulged plans to forge "private-public partnerships" to fund infrastructure projects and other social services without hurting government finances. Several bills seeking to strengthen the economy and peace and order were presented in the speech that lasted 36 minutes and punctuated by 31 applauses.
While his government deals with the daunting challenges ahead, he appealed to the people to be ready to take “sacrifices,” particularly in finding solutions rather than engage in “never-ending complaints.”
“For a long time, our country lost its way in the crooked path. As days go by (since I became President), the massive scope of the problems we have inherited becomes much clearer. I could almost feel the weight of my responsibilities,” he said.
"This report is merely a glimpse of our situation. It is not the entire picture of the crises we are facing. The reality was hidden from our people," he added.
Aquino cited the depletion of the 2010 national budget. The President said in the first six years of this year, government expenditure exceeded revenues. The deficit further increased to P196.7 billion. ”Our collection targets, which lack P23.8 billion, were not fully met, while we went beyond our spending by P45.1 billion,” he said.
Of the 2010 national budget of P1.54 trillion, only P100 billion or 6.5% of the total budget can be used for the remaining six months of the current year. “Roughly 1% of the total budget is left for each of the remaining month. Where did the funds go?”
Of the P2-billion calamity fund, around P1.4 billion or 70 percent was already spent “at a time when the rainy season has yet to set in, P1.4 billion or 70% was already spent,” according to the President.
He also bared that Pampanga, home province of former President Arroyo, received P108 million from the calamity fund. Of this, he said P105 million was released to one district on election month, apparently alluding to the second district of Pampanga.
He said his government will step up the campaign against tax evaders, citing the filing of a new case every week by the Bureau of Internal Revenue and the Bureau of Customs. He also pledged to stop extra judicial killings, saying his government will make murderers accountable.
In fighting corruption in government, he said he will sign an executive order forming the Truth Commission to be led by former Chief Justice Hilario Davide Jr. “We will search for the truth on the alleged wrongdoing committed in the last nine years,” he said.
Admitting government funds are insufficient, he said public-private partnership is the “new and creative approach” to the nation’s long-standing problems on education, infrastructure, health, military, police, among others.
As part of his planned public-private partnership, Mr. Aquino said that there have been many proposals from local and foreign investors to provide the country’s needs.
“Although no contract has been signed yet, I can say that ongoing talks with interested investors will yield fruitful outcomes,” he said, citing a looming investment to build an expressway from Manila traversing Bulacan, Nueva Ecija, Nueva Vizcaya, up to Cagayan Valley, “without the government having to spend a single peso.”
On national defense, he said that an investor is interested in leasing the Navy headquarters on Roxas Boulevard and the Naval Station in Fort Bonifacio, adding it plans to take care of the funding necessary to transfer the Navy Headquarters to Camp Aguinaldo . “Immediately, we will be given 100 million dollars. Furthermore, they will give us a portion of their profits from their businesses that would occupy the land they will rent. In short, we will meet our needs without spending, and we will also earn,” he said.
In order to attact more investors and generate more jobs, the President vowed to streamline the process of doing business in the country “to make them predictable, reliable, and efficient for those who want to invest.”
He said the Department of Trade and Industry has cut down to 15 minutes the process of registering business names from a minimum of four to eight hours depending on the day.
“What used to be a check list of thirty-six documents will be shortened to a list of six, and the old eight-page application form will be whittled down to one page,” he added.
He appealed to the local government units to review their own procedures while the government looks for more ways to streamline our processes to make business start-ups easier.
He disclosed plans to convene the Legislative Executive Development Advisory Council (LEDAC) to press for the passage of key legislations.
Among the priority bills are Fiscal Responsibility Bill, amendment of the procurement law, anti-trust law, national land use bill, National Defense Act, Whistleblower’s Bill, and Witness Protection Program. “There is a need to review our laws. I call on our lawmakers to begin a re-codification of our laws to ensure harmony and eliminate contradictions,” he said.
On the peace process, he reiterated his commitment to talk peace with the Muslim separatist group and the communist rebels.
“We will learn from the mistakes of the past administration, which sprung upon the people an agreement reached without consultation from all concerned. We are not blind to the fact that it was done with political motivation, and that the interest behind it was not that of the people,” he said.
He said now is a time for sacrifice to facilitate a better future. Saying freedom comes responsibility to do good to others and country, he called on the media, especially those in radio and print, to the block-timers and those in community newspapers, to “take the cudgels in policing your own.”
“May you give new meaning to the principles of your vocation: to provide clarity to pressing issues; to be fair and truthful in your reporting, and to raise the level of discourse with the public,” he said.
Apart from the depleted national coffers, the Presiden also disclosed the financial troubles of Metropolitan Waterworks and Sewerage System. He called on MWSS top officials to step down for their extravagant allowances and benefits.
“Just recently, people lined up for water while the leadership of the MWSS rewarded itself even though the pensions of retired employees remain unpaid,” he said.
Mr. Aquino also said he was shocked that each member of the MWSS board of trustees receives R2.5 million a year exclusive of car service, technical assistance, and loans. Watersheds intended to ensure adequate water supply were converted into housing for the top officials of the MWSS.
“We cannot remove them from their positions quickly because they are among the midnight appointees of former President Arroyo. We are investigating all of these things. But if they have any shame left, they should voluntarily relinquish their positions,” he said.
As for the anomalous infrastructure funds, the President said the past government funded only 28 projects of the 246 priority safety projects amounting to P425 million. He said 218 projects were replaced with 70 infrastructure projects that weren’t in the plans.
“The 425 million pesos originally asked for became 480 million pesos, increasing because of projects allocated for a favored few. These projects make no sense: unstudied and unprepared for, sprouting like mushrooms,” he said.
Putting a stop to these irregular projects, he declared that under his administration, “there will be no quotas, there will be no overpricing, the funds of the people will be spent for the people.”
Five days before the past administration ended, Mr. Aquino disclosed that they ordered the release of P3.5 billion for the rehabilitation of those affected by typhoons Ondoy and Pepeng.
“This was supposed to fund eighty-nine projects. But nineteen of these projects amounting to 981 million pesos didn’t go through public bidding. Special Allotment Release Orders hadn’t even been released and yet the contracts were already signed,” he said.
He cited Public Works Secretary Rogelio Singson for stopping these anomalous transactions, saying all must go through the proper bidding, and the funds will be used to provide relief to typhoon victims.
The President also accused the past government of sending National Power Corporation to near financial ruin.
He said from 2001 to 2004, the government forced Napocor to sell electricity at a loss to prevent increases in electricity rates. “The real motivation for this is that they were preparing for the election. As a result, in 2004, Napocor slumped deeply in debt. The government was obligated to shoulder the200 billion pesos it owed,” he said.
“What the public thought they saved from electricity, we are now paying for using public coffers. Not only are we paying for the cost of electricity; we are also paying for the interest arising from the debt,” he said.
The President said if the money borrowed was used properly, there would be added assurance that constant supply of electricity is available. “However, this decision was based on bad politics, not on the true needs of the people. The people, after having to sacrifice, suffered even more,” he said.
Another anomaly committed by the past government was in the operations of the Metro Rail Transit. The President said the government tried again “to buy the people’s love” by keeping the fare low.
“In effect, the guarantee given to the operator that he will still be able to recoup his investment was not fulfilled. Because of this, Landbank and the Development Bank of the Philippines were ordered to purchase the MRT. The money of the people was used in exchange for an operation that was losing money,” he said.
On the dismal funds of the National Food Authority, he said the past government has imported rice more than what was needed.
In 2004, the government bought 900,000 metric tons of rice despite a shortage of only 117,000 metric tons. In 2007, around 1.827 million metric tons of rice were purchased to meet a shortage of only 589,000 metric ton.
(II) No irregularity in gov't funds cited in SONA — Horn
By DAVID CAGAHASTIAN
Former President Gloria Macapagal-Arroyo's spokeswoman said on Tuesday that President Noynoy Aquino's State of the Nation Address (SONA) did not clarify which figures he was citing when he said only P100 billion remains in the annual budget.
Elena Bautista-Horn said Mr. Aquino's figures are different from the official figures on government expenditures from January to June of this year, which were released by the Bureau of Treasury, the agency that records the actual spending of the national government.
The Bureau of Treasury released the official figures of the government's actual disbursements from the national budget last July 21, 2010 when it was already under Finance Secretary Cesar Purisima.
"From January to June 2010, the total disbursements amounted to P788.8 billion — 13% higher than the comparable disbursements in 2009. Excluding interest payments, the total disbursements increased by 16%. Actual disbursements in June amounted to P126.7 billion," the bureau's statement said.
Horn said Mr. Aquino should clarify how he arrived at the figures that only P100 billion in the national budget are available for his government for the remainder of the year, because the official figures indicate that about 49 percent of the P1.54 trillion national budget remains unspent.
The Liberal Party, which controls the House of Representatives, has also offered to give a supplemental budget to Mr. Aquino's administration this year, though it is not yet clear whether the national budget had indeed been depleted.
"He said he would give more details aside from what he had already announced to the press even before he delivered the SONA, but he said nothing new," Horn said.
Horn also disputed Mr. Aquino's allegations that P105 million in calamity funds were released for the 2nd district of Pampanga, which is now represented in Congress by Mrs. Arroyo.
Horn said the Department of Public Works and Highways (DPWH) has confirmed that no calamity funds were ever released to the 2nd district of Pampanga this year, as attested to by six mayors of the municipalities in the district.
Bernardo M Villegas
There are two sides to the oft-used title of this column. The positive side: the size of the population is a tremendous asset, both as a source of manpower and as a base for a domestic market on which the economic growth of a country can be sustained, despite periodic ups and downs in the global market. Without a large population, many of whom have been sufficiently educated through the decades, the Philippines would not be attracting such high-growth sectors as electronic and semiconductor manufacturing and business process outsourcing. It would not have been able to send abroad millions of Filipinos to earn billions of dollars that they remit back to the Philippines. Without a large population, the Philippines would not have been able to avoid a recession in 2009, when most of our neighbors with smaller populations suffered negative growth rates in their GDP. The other two countries in Southeast Asia that avoided a recession are Indonesia and Vietnam, two populous countries with large domestic markets. Indeed, population matters.
The other side is negative, as can be inferred from a recent interview with one of the best demographers the Philippines has produced. A person I highly respect for her professional competence, U.P. demographer Mercedes Concepcion recently lamented the lack of a population management policy in the Philippines. She would like to see a much lower fertility rate than the 3.1 babies per fertile woman we presently have. She considers the current population growth rate (about 1.95 % annually) too high for the country's resources. Like a top business executive to whom she referred, she is alarmed at seeing large families populating squatter areas in places like Pasay, Payatas, Taguig and other depressed areas in the Metro Manila area.
She looks back with nostalgia at the Marcos era when she claims there was an effective population management program.
I respectfully beg to disagree with Dr. Concepcion. The squatter areas with large families in the Metro Manila area are only a consequence of at least three decades of an erroneous policy of utterly neglecting countryside and rural development. The National Capital Region is overpopulated (with 18,163 persons per square kilometer as compared to the national average of 313 persons) because for decades, we used up most of our resources in trying to create inward-looking, import-substitution industries that sooner or later collapsed when subjected to global competition
towards the end of the last century. If we had instead devoted the same resources to building farm-to-market roads, irrigation systems (for all the major crops and not only for rice), post-harvest facilities and other rural infrastructures, today our per capita income would be higher than those of Thailand, Malaysia and Indonesia, because we had a head start in the l950s as the most developed economy in the region with the exception of Japan.
Countries with much less land and even less natural resources like South Korea, Taiwan, Singapore and Hong Kong have population densities far higher than ours. Singapore has 7,223 persons per sq.km., Hong Kong 6,501, Taiwan 625 and South Korea 483. Ours is about 313 persons per sq.m. Except for overcrowded Metro Manila, the most densely populated regions are Region VI (Central Luzon) at 473 persons; Region VII (Central Visayas) at 472 persons; and Region 1 (Ilocos) at 402 persons All their population densities are less than that of South Korea, that has a per capita income close to $20,000 (as compared to our less than $3,000). If we had made use of our resources in a more intelligent way, even if our population continued to increase as it did, we would have had the wherewithals to eradicate poverty in the countryside, which today is where 70 % of the poor in the Philippines reside.
Those who advocate bringing down the growth rate of the population by birth control are barking at the wrong tree. They should focus all their efforts on correcting the biases against agricultural development, labor-intensive industries and small and medium-scale enterprises that decades of the wrong economic policies created. The poor in the rural areas need many children because the only resources they have are these human resources. It would be the height of insensitivity to ask a small farmer with a few hectares of land to stop at two children.
Abandoned by society, with poor roads, no irrigation, no post-harvest facilities, he needs as many hands as possible just to eke out a living. With better infrastructures and education, this
need will disappear and there will be natural forces that would lead to a more rapid decline in fertility. There would be no need for a state-sponsored population management program.
Development--especially of the rural areas--is indeed the best contraceptive, as the late President Ronald Reagan of the U.S. insisted.
My perception of the population control program aggressively pushed by the Marcos regime in the late 1970s and early 1980s is different from that of Dr. Concepcion. During the deliberations of the Constitutional Commission convoked by the late President Cory Aquino, I chaired the Committee on the National Economy. In some of our committee meetings, there was a lively debate about whether or not to remove the provision in the so-called Marcos Constitution mandating the State to adopt a population management policy. The late Blas Ople, who was Minister of Labor during the Marcos era, reported that the population management program under the Marcos Administration was ineffective and wasteful of resources. I remember him describing how disorganized the program was so that condoms being distributed in the countryside were not being used for preventing birth but in covering hanging fruits to protect them from insects. After hearing this and similar reports, the whole Constitutional Commission voted in a plenary to remove any reference to population management from what became the 1987 Constitution.
I also highly suspect survey findings which state that Filipina mothers have one child more than they actually desire. These surveys are funded by agencies that have a birth control bias. Although there may be exceptional cases, the poor are more intelligent than population control advocates describe them to be. If they have four or more children, it is because, as in the case of the farmer's household, they need workers in their farms to make up for the lack of infrastructures. Those who have large families in urban areas are thinking of the long-term insurance that many children can give to them. Because of their being left to their own devices by society, they find safety in numbers. To make a sweeping generalization that married couples who are poor but have
many children have been irresponsible is a typical condescending view of the well-to-do. Wittingly or unwittingly, the educated elite who talk about the poor producing children like rats are implying
that only the rich should have many children. I know that this is not the intention of all birth control advocates. But their constantly harping on the need for the poor to limit the number of children smacks of the selective breeding for which Hitler was infamous.
The motives of professionals like Dr. Concepcion are noble. They are truly concerned about the sufferings of the poor. They are, however, proposing the wrong solution. Limiting population can backfire. It is much better to spend our resources on the direct solutions to mass poverty, such as countryside development, technical skills training of the unemployed youth, microcredit for the poor, social housing, the nurturing of small and medium-scale entrepreneurs and many others. Countries like Singapore and Thailand that implemented aggressive population control programs are now regretting the dire consequences of family planning, such as the rapid aging of the population and the scarcity of manpower. There is no need for us to inflict these problems on future generations.
For comments, my email address is firstname.lastname@example.org
Sunday, 25 July 2010
P-Noy/Pinoys, the Balangays, and SoNA
EMPOWERING THE FILIPINO PEOPLE
By FORMER PRESIDENT FIDEL V. RAMOS
“The spirit of change is again alive in the Philippines. An era of political embarrassment and economic hardship could be over, and the future promises fresh opportunities for us upon which to build a better Philippines. The question is how our leaders and people choose to approach such opportunities and adopt them for our national benefit. Clearly, it is time to begin working together again, and helping each other with solutions, instead of becoming each other’s problems.” – from Volume V, “Bulletin of FVR Sermons”
Last Friday, July 23, the Manila Bulletin and the Ramos Peace and Development Foundation launched Volume V of “FVR’s Sermons” entitled “Another Ending, Another Beginning: Recapturing Our Nation’s Destiny.” This book could be useful for P-Noy’s first SoNA and help him motivate Pinoys to work as a national team during his term.
By now, President Benigno Aquino’s SoNA scheduled for tomorrow, July 26, should be almost ready – including valid inputs from Cabinet Departments, civil society/sectoral groups, think-tanks, business chambers, investigative journalists, people’s organizations, etc.
Yes, almost finalized – except for significant last-minute retouchings by P-Noy himself to be incorporated in the official Malacañang version. After all, it’s his SoNA, not anybody else’s.
Leading the way as skipper
P-Noy’s SoNA should not be a recitation of the problems of the nation – because most of those are already well-known.
Hopefully, he will focus more on what he visualizes the Philippines should be at the end of his watch and beyond – and, equally important, how he proposes to navigate our ship “Pilipinas” towards a better future with higher quality Filipinos on board.
According to Calixto Chikiamco, prominent economic analyst: “That would portray P-Noy as having a developmental vision – the way forward to the future and the goal with which to unify the country...” (Business World, July 19).
With or without wang-wang, the leader must, by his unswerving dedication, inclusive balance, and strategic focus, lead the way – even as he insures that regardless of external shocks or internal mishaps, the nation’s progress moves forward/upward.
P-Noy has taken over the skipper’s responsibility to guide and navigate our only ship (on which all Pinoys are on board, including OFWs, dual citizens, and the unborn) towards the Promised Land of a more bountiful future. His success in fulfilling that vision would recapture our nation’s destiny of a better life and a place of respect/dignity in the community of nations.
The rebuilding of the nation is the work of all hands, and not just of one leader. It takes the collective effort of the citizenry to make this happen – through unity of purpose, solidarity in values, and teamwork in nation-building.
Filipinos can prevail and succeed – no matter how high the goal – if we put our act together. Our Mt. Everest team displayed exceptional harmony that all can emulate. Their virtues of caring, sharing, and daring for each other throughout their arduous journey to the “roof of the world,” 29,035 feet high, enabled them to surmount each crisis along the way.
Clearly articulated in our Constitution’s preamble is the Filipino’s ambition: “To build a just and humane society and establish a government that shall embody our ideals and aspirations, promote the common good, conserve and develop our patrimony, and secure to ourselves and our posterity the blessings of independence and democracy under the rule of law and a regime of truth, justice, freedom, love, equality, and peace.”
Certainly we are today a nation confirmed in our constitutional democracy – strengthened by the trials we have weathered. Today, nevertheless, we are still one of a few countries burdened with the combined weight of communist insurgency and a Muslim separatist rebellion. Organized crime makes our streets unsafe and threatens citizens in their homes.
Social services have lagged badly behind the rise of population and the migration to our cities of poor rural people. Neighborhoods are deteriorating with too many families lacking adequate housing, sanitation, and potable water.
Our education and health services are under unbearable strain. And, every day of delay in meeting these problems makes them more intractable and adds to the absolute poverty of millions of kababayans. The test is whether we can act with dispatch today to answer these challenges – not tomorrow.
No better example can be given to our leaders than that of three youthful Pinoys and three Pinays who climbed to the top of Mt. Everest in May, 2006, and May, 2007, respectively. The lessons of intrepidity, audacity and grim determination – exemplified by their incomparable feat – should not be missed by those elected to lead us.
Infrastructure development and public finance
Because it entails much planning and time to implement, we must now aggressively push connective infrastructure-building. This will not only create jobs. It will also give investors proof of Philippine resolve to provide growth solid foundations for sustainable development.
Our priorities are arterial national highways, urban mass transport and expressways, farm-to-market roads, clean power from recyclable sources, and major water conservation/flood control structures to serve 100 million Filipinos by 2016.
For continuity/efficiency, all these should be provided multi-year funding. To finance infrastructure development, we must be unrelenting in collecting what is due the government in taxes and other revenues. This can be attained by cracking down on tax evaders. Tax evasion can be curbed if government can show that scalawags – whoever they may be – will not go undetected/unpunished.
We cannot make do with our present revenue base unless we improve our meager 13 percent tax effort to the level of ASEAN’s 18% average. Development has a price that must be paid by both ordinary people and the big taxpayers/non-taxpayers.
To maintain economic stability, we need continued fiscal and monetary discipline, principally by keeping the budget deficit and inflation within manageable/acceptable levels.
We should then be able to mobilize development financing for both agriculture and industry – not just through government financial institutions but primarily through the private banking sector, whose corporate responsibility is to be government’s effective partner.
The quality of governance
Just as crucial as the vigor of the economy is the quality of governance. This is why we must strive to make the Philippine state more effective – in policy-making, economic management, and project implementation (where corruption is more prevalent). By opening up our economy, modernizing our material and human assets, and raising workers’ productivity, we should be able to attract more investments and technology-exchange.
Quality governments respond effectively to domestic challenges, and ingeniously mitigate external demands imposed by globalization. Quality governments plan for long-term progress rather than quickie political advantages.
They do not obstruct broad-based strategic initiatives but, instead, facilitate cooperative relationships with both private business and civil society. For the common good, quality governments continuously adapt their economies and capacities to changing conditions.
The object of political reform should be the delivery of quality governance – whose first task is to ensure enduring stability as the foundation of sustainable development.
P-Noy’s six-year journey and the Balangay voyage
Our Mt. Everest summiteers – Leo Oracion, Pastor Emata, Dr. Ted Esguerra, Carina Dayondon, Janet Belarmino, and Noelle Wenceslao under Team Leader Art Valdez – have now evolved into “Balangay Voyagers,” reinventing themselves from world-class mountaineers into similarly world-class seafarers. Their principled motivation in embarking upon this maritime adventure is simple, yet admirable.
In Art’s words: “In our Balangay voyage, we will share our self-image and self-assertion that the Filipino can do the impossible.
By exhibiting Filipino ingenuity and native survival skills in this modern age with the use of ancient seafaring technology, we aim to rekindle our people’s adventurous and pioneering spirit along with our maritime expertise which colonialism took away.”
Tomorrow, July 26, they depart from Zamboanga to start the ASEAN leg of their Balangay voyage which will take them southward to Malaysia and Brunei, westward to Vietnam, and finally northward to China to arrive in October for the climax of the 2010 Shanghai World Expo.
To our Everest summiteers now Balangay voyagers, your supporters wish you: “Fair winds and following seas.” As we bid you safe travel, expect that in the countries you visit, there are also our global Pinoys waiting to proudly welcome you. We hope P-Noy provides you official and moral backing.
The same supportive messages of goodwill and successful achievement from well-wishers go to P-Noy as captain of the larger ship “Pilipinas” as he leads us across stormy seas plus unknown dangers along the way.
The Balangay could become the catalyst to stir national pride again among Filipinos. Dr. Jose Rizal in his historic SoNA, “The Philippines, A Century Hence,” predicted that “we are capable of greater things.”
Please send any comments to email@example.com. Copies of articles are available at www.rpdev.org.