Saturday, 28 May 2011
Friday, 27 May 2011
MANILA, May 26, 2011― Parañaque Rep. Roilo Golez has underscored the redundancy of a portion of the Reproductive Health bill during interpellation in Congress on Wednesday.
After disclosing a crucial inconsistency committed by Albay Rep. Edcel Lagman concerning a document referring to the RH Bill, then seguing into a reminder of the solon's false claims of proposed amendments to the bill being made, Golez stressed the redundancy of a portion of the measure, owing to a Republic Act signed into law in 2009.
The solon, after giving a rundown on Wednesday of the Magna Carta of Women's provisions concerning women's right to health and showing the same provisions contained in the RH Bill, said, "We have no need for this bill because this is like repacking something and making it appear as if it were your own, when it's not.
"I have shown that this [House Bill 4244] has been copied almost word for word, without attribution, from an existing law. Alam niyo, kapag ganitong kinopya lang, redundant na itong bill na ito as far as these provisions are concerned. Inulit lang eh."
Golez referred to parts of the RH Bill and the Magna Carta of Women―or Republic Act 9710―which specified access to "comprehensive health services" such as maternal care, safe and effective family planning methods, sexuality education, prevention and management of gynecological reproductive tract disorders and sexually transmitted infections (STIs), prevention of abortion, assistance to victims of violence against women and children, and prevention and management of infertility and sexual dysfunction.
The Parañaque solon likewise emphasized the close similarity between the list of definitions in the RH Bill―titled the Responsible Parenthood, Reproductive Health and Population and Development Act of 2011―and that in the 1994 International Conference on Population and Development (ICPD) Programme of Action.
The United Nations-organized ICPD, held in Cairo with almost 200 countries participating, formulated a programme of action which mandates all signatory countries to carry out various measures, including the following:
"As part of the effort to meet unmet needs, all countries are asked to identify and remove all major remaining barriers to the use of family planning services. Governments are urged to provide a climate that is favourable to good-quality public and private family planning and reproductive health information and services through all possible channels. The international community is urged to move, on an immediate basis, to establish an efficient coordination system and global, regional and subregional facilities for the procurement of contraceptives and other commodities essential to reproductive health programmes of developing countries and countries with economies in transition."
Golez then reiterated a statement made by US Secretary of State Hillary Clinton in recent years pertaining to the scope of reproductive health:
“You cannot have maternal health without reproductive health and reproductive health includes contraception and family planning and access to legal, safe abortions,” Clinton stated.
Though abortion is unlawful in the Philippines, "the abortion law can be amended at any time," the Parañaque congressman pointed out, adding that not a few citizens are concerned that the long-term plans for any piece of legislation on reproductive health may include the legalization of abortion.
Not only is a significant portion of the RH Bill redundant, he said; it appears to be also based on an international agreement―in which the Philippines is a signatory―that mandates governments worldwide to use all means at their disposal to push for reproductive health in their respective countries. (Diana Uichanco)
Thursday, 26 May 2011
OUTSIDE THE BOX
There is not anything resembling “business as usual” for the global economy today. The situation will not return to what we expect as normal any time soon. Anyone who says otherwise is a fool or a liar.
From the PIGS (Portugal, Ireland, Greece, Spain), we now have the PIIGS to include Italy. Italy’s fiscal outlook has just been downgraded to negative.
The West is smothered in debt. Spain’s outstanding debt owed to other nations’ banks is over $1 trillion. Italy’s debt is nearly $1.5 trillion. By comparison, Greece owes about $250 billion. There is not enough economic activity in the West to create the wealth necessary to pay off those amounts. And to keep those economies alive, all the Western countries need to keep borrowing more. It is an impossible fiscal situation.
There are only two options available. One is to allow both sovereign government and bank debt defaults whether they eventually call it restructuring, reprofiling, or readjustment.
Major banks will fail. Lending will come to a halt, as will economic activity. The standard of living will drop like a rock. Governments will be forced to stop most of the social safety nets as interest rates will go up to very high levels on any lending that is available. Forty-five million Americans depend on the government for at least a portion of their daily bread. Commodity prices will fall significantly as people will simply be too poor to buy goods and services. Wages will drop as companies will have a large labor pool willing to work for much less just to survive.
Those who see this outcome for the future believe that we will see oil at $25 a barrel, as well as gold at $250 per ounce. And the US dollar will rise 50 percent from its current value, as any performing loans that are still around will need to pay creditors in dollars. Further, the US will be the only safe haven from social and political unrest and chaos.
Imagine an individual overwhelmed by debt. Finally, giving up ever trying to pay, the bank is called to take back the house, the car is returned to the finance company, and all the goodies are sold at a garage sale just to buy food as the old lifestyle dies and a new poorer way of living starts.
That is the deflation scenario.
Unlike you and me, governments can create money. A government needs funds to pay its debts, just print it. If no one wants to buy government debt, have the central bank print the money and buy government debt issued by the Department of Finance or Treasury. We call this Quantitative Easing (QE). If the banks or corporations have problems paying their debts, print more money and loan it to them at near-zero interest rates. Bail them out.
QE is nothing more than currency debasement. The Roman Empire was destroyed as the emperors debased the value of the currency. Wanting to spend money the government did not have, they just created more currency. From about A.D.190 to around A.D. 290, the silver content of Roman coins went down from 95 percent to 0.5 percent. Prices increased by 1,000 percent. Since the creation of the US Federal Reserve in 1913, the US dollar has lost 95 percent of its purchasing power. What cost $1 in 1914 now costs $21. Put another way, the price of that $1 item in 1914 has increased 2,100 percent in less than 100 years.
The rate at which money is now being created and currencies debased can lead to hyperinflation. That is the inflation scenario.
Continued debasement of currencies gives the impression of economic growth just as the emperor Caracalla doubled soldiers’ salaries with a silver coin worth as much.
The ‘inflationists’ believe that governments will not take the social turmoil and economic downturn that deflation brings and will continue QE hoping that the economies will recover. Governments are willing to risk the threat of hyperinflation.
One of these two scenarios, at least to some degree, will happen in the next one to two years. It is inevitable.
The Philippines, like several other nations (Thailand and Malaysia, for example), will escape the brunt of the potential coming disaster.
A deflation event will slow growth but we have several things going in our favor unless the government totally makes a mess of it.
Domestic output and local consumption is strong, much stronger than in China, for example. Outsourcing is a crucial income earner, and this business would even grow stronger in a period of Western deflation as companies reduce costs to survive. Overseas workers’ remittances will continue, if not exactly grow. Spain has more than 20- percent unemployment, yet Spain’s Filipino worker remittances are up 17 percent over 2010. The Philippine economy is not dependent on manufactured goods exported particularly to the West. Likewise, the Philippines is not a commodity exporter, prices of which would fall dramatically during a deflationary period. Beneficially, the prices of commodities that we must import would be cheaper. The Philippines does not have any asset-price bubbles: real estate, wages, stock market.
Currency-induced cost-push inflation is the fear of “inflationists,” and it is all about the US dollar.
The dollar will fall severely in terms of purchasing-power value. Gold will go to $2,000 and oil will see $200. All hard-asset prices will rise, including stock markets and commodities. Although interest rates will increase, bank lending will also rise. The world will be flooded with less valuable currency.
Imported goods and raw materials could go up significantly in the Philippines. That is the worst scenario. However, the Bangko Sentral ng Pilipinas has the ability to mitigate this by increasing the value of the peso to offset increases in the price of imported goods. However, it comes at a cost. Fortunately, we have enough foreign-currency reserves to help maintain the value of remittances in peso terms and to help maintain the flow of foreign direct investment.
Regardless of what the future holds, the Philippines can prosper through it all. We have a strong domestic economy. Our economy does not rely on the West. Our banking system is financially sound. Our economic house is strong enough to weather whatever storm the global economic condition brings to the Philippines.
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Wednesday, 25 May 2011
Tuesday, 24 May 2011
OUTSIDE THE BOX
Perhaps, you have known a person whom doctors described as “terminally ill,” or sick to the point that death was inevitable and would come sooner than later. “But I just saw him a few months ago, and everything seemed fine.” While sudden, brutal deaths receive the headlines, death for most is a process—going from healthy to sick, ill, then terminally ill.
In a sense, we are better-equipped psychologically to deal with sudden disasters than with a slow, creeping catastrophe. The ancient Roman city of Pompeii was destroyed by a volcanic eruption that lasted two days. The ancient Greek city of Ephesus in Turkey was founded in 6000 B.C., becoming one of the most important ports on the Aegean Sea. By A.D.1090, it was nothing more than a small village. Silting and sedimentation of the seaport by the Cayster River over 1, 000 years eventually moved the ocean more than 5 miles away from the original city. The “instant” disasters are easier to take, for we console ourselves with the idea that there was nothing that we could have done to prevent the problem.
Pompeii died violently, almost instantly in fire; Ephesus died slowly as its life-giving river stagnated. However, both cities were terminally ill for centuries as the pressures that led to their deaths built up. Make no mistake. The global economy is in intensive care, if not terminally ill.
This is the big picture. The Economic Cycle Research Institute (Ecri) reports that its long leading indicator of global industrial growth is at 0.1, near the lowest level since January 1980. By comparison, January 2009, the number was 0.8 and in mid-2010, it stood at 0.7. From Investor’s Daily: “There’s a downturn in global industrial growth in clear sight, said Ecri managing director Lakshman Achuthan. Output has already started to decelerate in the US, Europe and key emerging-market countries such as China that have driven the global economic recovery.”
I am sorry, but any talk of a global economic recovery is a fantasy. You cannot have economic growth when the lifeblood of the economic system, the financial sector, is in desperate trouble.
Europe’s debt problems were supposed to have been solved with the bailout of Greece. Now Greece is ready to default, closer to financial Armageddon than before the $145-billion rescue. Ireland fell next with $125 billion and the most recent, Portugal, is getting $37 billion. Now Spain is ready to fall, and could need $250 billion.
The US continues to fall. That economy survives on consumer purchases and US consumers have not been this worried (and reducing spending) since October 2009, during the depth of the Great Recession.
Forget about China saving the world. Their main market, the US, cannot buy enough goods for China to be the financial rescuer. And China has other problems. From Bloomberg: “China faces the worst power shortage in seven years as the economy grows faster than forecast and some utilities cut production or shut.” China’s growth does not translate into global growth, as China is less than 10 percent of global economic activity; the US accounts for over 30 percent.
The Philadelphia Federal Reserve Bank just released its May 2011 survey. This is the reaction to the housing and business activity numbers in that report. Eric Green, chief economist, TD Securities, New York: “It’s pretty ugly. The Philly Fed index was a lot weaker than expected.” Kathy Lien, director of Currency Research, GFT, New York: “All the numbers that we just saw were extremely, extremely bad.” Tom Porcelli, US economist, RBC Capital Markets, New York: “It was, I think, in a word, pretty ugly.”
One of two scenarios will play out in the next 12 to 18 months: fire or ice. Put in simple terms we can all appreciate: very high inflation with crude oil priced at $250 per barrel or stagnated economic activity, deflation, and $25 for that same barrel. Fire puts gold at $2,000; ice drops the price to $200.
Those seeing near-hyper inflation are worried about the fate of the dollar with the US Federal Reserve creating money from thin air at an unprecedented rate. John Williams at Shadowstats.com: “The US economic and systemic-solvency crises of the last four years only have been precursors to the coming Great Collapse: a hyperinflationary great depression. Prerequisites to the crisis unfolding include the Federal Reserve moving to monetize US Treasury debt; the US dollar losing its traditional safe-haven status; the US dollar losing its reserve status; the federal budget deficit and Treasury funding needs spiraling out of control.” Too much “funny money”—US dollars in circulation cause prices to skyrocket as the value of dollars in terms of the goods it buys goes down. The other side, the “deflationists,” believe the views of financial author Harry S. Dent and stock-market analyst Robert Prechter. Allow me to say that I think both Dent’s and Prechter’s market analysis is not just wrong but often foolish. Perhaps, I am just jealous since they have published 20 books and I have more than 20 rejection letters. Nonetheless, deflation is a real possibility and deserves an understanding of the arguments.
Deflation occurs when prices fall as demand weakens. In this case, demand weakens because people in countries like the US are becoming poorer. No jobs, no money, no consumer buying, no economic activity, no demand. As demand falls, prices go down because no one can afford to buy. Dent sees this happening; commodity prices collapsing and a rising dollar. Dent “argues that the collapse of asset bubbles will bring a multiyear bull market for the greenback that could take us up 40 percent from here. Debt defaults not only create bond shortages, they foster dollar shortages, as well.”
In effect, the “inflationists” see debt default forcing the need for printing more dollars and resulting inflation. All prices rise, including stock prices. The “deflationists” see default as creating demand for dollars, which reduces printing but creates economic stagnation. Stock markets crash along with other asset prices.
We will continue this on Thursday with the implications of both for the Philippines.
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by Roderick T. dela Cruz
Philippine banks continued to enjoy strong profit after a record performance last year, with six of them declaring a net income of at least P1 billion each in the first quarter of 2011.
Metropolitan Bank & Trust Co. was the most profitable bank in the January-March period, when it booked a net income of P3.1 billion, up 21.2 percent on year.
Bank of the Philippine Islands, the most profitable bank in 2010, booked a net income of P2.8 billion in the first quarter, up 4.5 percent year-on-year. The Ayala-controlled bank reported a record net income of P11.3 billion last year.
It was followed by state-owned lender Land Bank of the Philippines which reported that profit grew 10 percent to P2.77 billion in the first quarter, on the back of higher loans and investments.
Banco de Oro Unibank Inc., the largest bank with assets of more than P1 trillion, also saw its profit soar by 18 percent to P2.44 billion, as a result of the bank’s diversified revenue stream and tempered growth in operating expenses and conservative provisioning.
Rizal Commercial Banking Corp., the country’s fifth-largest private bank, declared a net income of P1.02 billion in the first quarter of 2011, on higher trading gains.
Security Bank Corp., the 10th largest private domestic bank, reported that net income rose 8.5 percent to P1.01 billion during the January-March period, as assets jumped 27.8 percent to P183.5 billion.
While it did not achieve the P1-billion profit threshold for the period, United Coconut Planters Bank said net income rose 11 percent to P640 million in the first quarter, which put it “on track to surpassing the P2.4-billion full-year net income reported in 2010.”
Other universal banks, however, reported slimmer profits in the first quarter. Union Bank of the Philippines, the banking unit of the Aboitiz Group, said first-quarter net income fell 17.2 percent to P708.28 million.
Sunday, 22 May 2011
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HOUSE COMMITTEE PROTEST ON HABITAT CONFERENCE AGENDA
by Joyce Pangco Pañares
IT was supposed to be a courtesy call of a world boxing champion on the President of the Philippines, but it turned out to be a verbal sparring match over the controversial Reproductive Health bill.
President Benigno Aquino III took the opportunity to once more push the RH bill and explain his five-point stand on the need to make available to couples contraceptives and natural family planning methods to Sarangani Rep. Emmanuel Pacquiao during the latter’s courtesy call at the Palace on Friday.
Pacquiao countered with concerns over whether the RH bill would result in abortions, and whether the government would finance the procurement and distribution of condoms and other contraceptives, Deputy Presidential spokeswoman Abigail Valte said.
The meeting between the President and Pacquiao showed no signs of the animosity that has marked the raging debate between the supporters and critics of the RH bill, with the world champion gifting Mr. Aquino with the yellow gloves he had worn when he outclassed challenger Shane Mosley on May 8 in Las Vegas.
Valte, however, acknowledged that there were no signs that the boxing champion’s anti-RH stance had changed during the meeting.
The Air Force is taking delivery of four combat-utility helicopters in November, according to Armed Forces chief Gen. Eduardo Oban Jr.
The purchase of helicopters, worth P2.8 billion, is part of the Armed Forces’ modernization program to boost its aerial capability in support of the internal security operations, Oban said.
The helicopters are supplied by Swidnik of Poland. Which won the supply bidding in 2009.
Also due for delivery are two-seater trainer planes worth P621.67 million supplied by the Italian Aermacchi company; the upgraded (attack helicopters) MD520 MG units worth P240 million and erial camera (for helicopters) worth P50.98 million.
For the Navy, due for upgrade is one unit of British-made Peacock under the Jacinto Class Patrol Vessel project worth P353.65 million.
South Korea is also expected to deliver the Chamsuri class gunboat worth P279.97 million and a landing craft utility costing P178.93 million; a radio 20W worth P231 million; 2 1/4 ton troop carrier, and 1 1/4 ton troop carrier.
The Army expects to take delivery of night fighting system worth P341.49 million, and CMO audio/visual system worth P37.88.
“What I can say is for 2011 we will be able to enhance our capability particularly in patrolling our territorial waters,” Oban said.
On top of these deliveries, the Navy is also expecting the arrival of a Hamilton-class cutter in August. The vessel costs P1.2 billion to P1.5 billion. The US Coast Guard has phased out Hamilton vessels from its fleet.
by Jenniffer B. Austria
A unit of fastfood giant Jollibee Foods Corp. signed an agreement with Viet Thai International Joint Stock Co. to set up a venture that will own and operate restaurants in Vietnam, Hong Kong, Macau and Southern China.
Jollibee said in a statement to the Philippine Stock Exchange that Jollibee Worldwide Pte. Ltd. planned to invest $25 million for 49 percent of the venture in Vietnam and 60 percent of the partnership in Hong Kong. Part of the investment will fund the venture’s purchase of an additional restaurant chain, Jollibee said.
Viet Thai and related parties will own the balance in the joint ventures and receive an advance in the amount of $35 million. The money will be repaid with an interest at the rate of 5 percent per annum in 2016.
“Upon completion of such acquisition, the joint venture is expected to have a total of 139 outlets across its brands, including 118 in Vietnam and 21 international stores in five countries,” Jollibee said.
The Vietnam-based Viet Thai has extensive experience in the food and beverge industry as owner and operator of Highlands Coffee, Hard Rock Cafe and several smaller food outlets. It also owns and operates Hard Rock Cafe in Hong Kong.
Jollibee, meanwhile, said it would acquire all 20 Chowking stores in the United States owned by Fortune Food Co. Inc. for $16 million. Fortune Food operates 18 Chowking stores in California and one each in Nevada and Washington.
Fortune Food owns and operates all Chowking stores in the US as the master licensee.
Jollibee said the acquisition would put in a position to take a more active role to further growth of the Chowking business in the United States.
Jollibee said the profit of the Chowking stores in the US was positive in 2010 with sales totaling $19.2 million.
Jollibee last week reported that first-quarter net income dropped 10 percent to P622 million on year due to higher costs of inputs.
Sales from restaurant chains in the Philippines grew 13.1 percent, driven by the Jollibee and Mang Inasal brands. However, other domestic businesses posted a decline in same store sales during the quarter due to inflation pressure on consumer spending.