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Friday, 8 July 2011
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The country's gross international reserves (GIR) stood at US$69.0 billion as of end-June 2011, higher by US$0.1 billion than the previous month's level of US$68.9 billion, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. announced today.
The slight increase in the reserves level was due mainly to the foreign exchange operations and income from investments abroad of the BSP. These inflows were partially offset by payments by the National Government (NG) and the BSP of their maturing foreign exchange obligations as well as revaluation losses on the BSP's gold holdings on account of the month-on-month modest decline in gold prices in June 2011.
The preliminary end-June 2011 GIR could cover 10.3 months worth of imports of goods and payments of services and income. It was also equivalent to 10.2 times the country's short-term external debt based on original maturity and 5.9 times based on residual maturity.1
Net international reserves (NIR), which include revaluation of reserve assets, reached US$69.0 billion as of end-June 2011, up by US$0.1 billion compared to the end-May 2011 NIR level of US$68.8 billion. NIR refers to the difference between the BSP's GIR and total short-term liabilities.
1 Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.
Thursday, 7 July 2011
by Macon Ramos-Araneta
THE Philippines has one of the largest domestic air passenger market in Southeast Asia now after it was reported that 16 to 17 million are flying every year to different parts of the country, the Department of Tourism said.
Speaking at Wednesday’s Balitaan sa Aloha Hotel forum, Tourism Assistant Secretary for International Promotions Benito Bengzon Jr. announced that just last year, 23 million Filipinos travelled domestic. He also said that out of the 23 million, 17 million traveled by air.
“Who would have thought that 15 years, 20 years back, the only ones who took the plane were the rich one, the businessmen or those who were trying to catch the tight schedule,” Bengzon said.
Nowadays, he noted that it has become easy for the ordinary Filipino to travel due to the entry of the low cost carriers which offer cheap airplane fares.
“And what we have now is that 16 to 17 million Filipinos flying every year to different parts of the Philippines,” Bengzon said.
While the DoT has been intensifying campaign overseas to lure more tourists to the country, Bengzon said they recognize the importance of domestic tourism.
“During difficult times, it’s actually the domestic market that will keep the industry afloat,” stressed Bengzon, who is also the department’s spokesperson.
As more and more Filipinos start to better appreciate local tourist destinations, Bengzon said they see this as an immense opportunity to hook up with institutional partners.
Just recently, he related that the DoT tied up with Smart Communications Inc. for the Pilipinas “Tara na Biyahe Tayo,” and Johnson’s & Johnson’s for a photo contest depicting the country’s tourist destinations.
Eric B. Apolonio
FOREIGN Affairs has reduced the waiting time for the new electronic passports to two weeks from two months after it hired more people to help verify applications and print the new documents, Assistant Secretary Victor Ledda said Wednesday.
“This is a very welcome development as we continue to work hard to improve the services in our regional consular offices and foreign service posts,” Ledda said.
He said the department reduced the waiting time for the new passports to 14 days in June from 60 days as late as April, and that the passports released in June rose 5.81 percent to 128,000 from 88,000 in April.
Some 7,500 people apply for e-passports daily, and they pay P950 for regular processing (2 weeks) and P1,200 for express processing (1 week). An e-passport may be delivered to any address in the Philippines by courier, for which the fee is P120.
The new passport is valid for five years. Its security features include invisible personalized information and an automatic finger print identification. The passport conforms to International Civil Aviation Organization standards, making it easier for the person carrying it to obtain visas and to be cleared at airports.
Foreign Affairs has so far issued 2,139,081 electronic passports since it started producing them on Aug. 11, 2009.
OUTSIDE THE BOX
There seems to be a never-ending conversation that the Philippines is growing economically without creating enough new jobs. The recent ban by Saudi Arabia of workers from both Indonesia and the Philippines has highlighted the situation.
Each job in the Philippines costs about P150, 000 to “create.” That means it would cost an investment of over P35 billion to have jobs for the 250,000 Filipinos who might not be able to work in Saudi.
As a side note, I believe the issue will be resolved, as it would be impossible to replace all those workers from Indonesia and the Philippines, unless, of course, things get much worse and the US starts sending people abroad.
One disturbing thing is that a lack of jobs globally is not something that just happened in the last couple of years. The other thing that is also troubling is that so many experts both in the government and academia know what the problem is, but cannot come up with a long-term solution.
In the US the Obama experts thought that if the government spent a lot of money, jobs would appear. They were right, but they were also wrong. By the government’s own numbers, each job created or saved cost the American taxpayers $278,000. Many of the jobs did not last long as they were project-based. Think about it. The government would have been more cost-effective giving 2.5 million unemployed people $100,000 cash each to go start their own business. Once again, government cannot create jobs no matter how many times the “propoor” advocates and the policy experts scream that message.
Maybe some basic thinking is necessary to solve the problem.
What is a “job?” A job is a specific task of employment, an occupation by which a person earns a living. Notice that a job is not a handout. Further, we have to assume that a person earns from a job because he produces a good or service with his time and labor.
Now the question is, who provides the employment? A job is provided by a business that requires an employee. And what does a business exist for? It does not exist to provide jobs. A business is a profit-making enterprise. That is the fact that the “experts” cannot get into their thinking. So why does a business employ a person? Because the business believes that creating a job would generate more profits for the business.
Profits create jobs that create more profits that create more jobs.
If you start with that simple economic fact, then it is very simple to create more jobs. The whole cycle begins with the business profits. More profits equal more jobs, because employment is a side effect of the goal of profit-making. If you want to drive employment higher, make it as easy as possible for new businesses to start up and make it as easy as possible for business to make profits.
Perhaps when you read that it would take P35 billion to create jobs for 250,000 overseas workers, you felt a little discouraged. No need to feel depressed. In 2010 the net after tax profits of all the companies listed on the Philippine Stock Exchange was P286.53 billion. And remember, that is only 253 companies.
Therefore, if the profits of these 253 firms could only be increased by 10 percent, theoretically, there would be available cash to create 250,000 new jobs.
What the government can do to help create jobs is to let companies grow their profits, grow their business and, therefore, grow their employment. When business is allowed to make profits, they grow and hire more employees.
Shoemart is the largest retailer in the Philippines. At the end of 2000, SM had built 10 malls. Currently, SM has 41 malls, with another 12 under construction or in the planning stage. Around the time when there were only 10 SMs, there was some controversy that Shoemart employed contract workers for most of their sales-floor employees. It is true that these workers did not enjoy the benefits of tenure. However, these people did have jobs and there were many applicants for each position. Contract employees created more profits for the company, and that is not a bad thing as many “proworker” advocates said it was.
Because SM was able to maximize profits, the company’s outlets have grown fourfold since then and created thousands of direct employment and tens of thousands of indirect jobs. Of course, this is not due just to employing contract labor but you get the idea.
If the government were serious and smart about job creation, there only need be one piece of paper with a list of the 10 things that government could do to increase business profits.
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1. What happened to the first expose that 7 bishops received Pajeros from President Arroyo through PCSO for their personal use? It is quite simple to put a closure to this issue – just look into your records and reveal the names of the Bishops involved. Perhaps leaving the so called expose open ended would serve your motives better? And what really are your motives? To tell the truth? But why do you keep people guessing as to the truth of these Pajeros and the Bishops who were supposed to have received them?
2. Now that the Pajero issue remains a black mark on suspected Bishops, who one after the other categorically denied that they had solicited or received any Pajero for personal use, what do you wish to gain by redirecting your attack – that some bishops, indeed, received SUVs? If so, why did you not mention that PCSO donated each of the vehicles to Bishops or dioceses for purposes of social action, promotion of health, poverty alleviation, human development – all for the sake of the poor? After all that is their explicit request for help and is contained in the Memorandum of Agreement that both PCSO and beneficiary sign.
3. Why do you say that the donations to the Bishops were anomalous and unconstitutional? Does not the typical PCSO MOA with the beneficiary say that it is the mandate of the PCSO to provide assistance for health programs, health services, other services and charitable purposes? And therefore that the grant is not only meant for medical and health services? Do you think that Bishops and religious institutions use such grants for their own self-interests and not for the poor? Do you think that the cooperation of the Church in your work violates the principle of separation of Church and State? Do you think that by such donation you are establishing one religion as the State religion considering that your grants are given to different religious denominations for the sake of the poor?
4. Why do you single out some bishops in your so called expose when by simply looking into your records from the time of President Cory Aquino up to President Gloria Macapagal Arroyo, you will find donations to hundreds of religious groups of different denominations through the years for purposes of helping the poor? Would you have us believe that a thorough 2008 and 2009 audit on PCSO donations revealed only Bishops as beneficiaries and not other religious groups? And why do you claim that some three or four years after the “Garci tapes these grants were given to buy Bishops’ support against moves to oust President Arroyo? Do you think that all past Presidents, acting through PCSO, were unwise in having different religious denominations help in alleviating poverty, providing medical and health services, and doing development work for the poor? Did Presidents from the time of President Cory to the time of President Arroyo, acting through PCSO, violate the Constitution?
5. In brief, all the above questions beg the question of motives. What are your real motives in selectively targeting some bishops to whom PCSO gave grants for the sake of the poor?
6. Are you telling the whole truth and nothing but the truth? Or are you giving disinformation to discredit the Bishops for motives of your own?
+Orlando B. Quevedo, O.M.I.
Archbishop of Cotabato
July 3, 2011
Posted Thursday, July 07, 2011
Tuesday, 5 July 2011
Outside the Box
The Philippine Stock Exchange (PSE) closed at a historic high yesterday with the Composite index hitting 4,421. It’s about time. No excuse for it not happening sooner.
But I absolutely knew it was going to happen yesterday. In fact, any “expert” could have easily figured it out. All you had to do was watch the Azkals destroy Sri Lanka on Sunday at Rizal stadium. The resilience and dominance of the Philippine soccer (ok, football!) best illustrates the Philippine stock investor as much as anything else. Stock investors battled their way through a huge amount of selling these last three months at the 4,300 level.
Stock-market “experts” told me I have been heavily buying stocks for the last four months because of what is happening in Greece. It is as if the first thing I say to my wife every morning is, “Can I have some coffee dear, and what is the overnight spread on Greek 90-day bill against the 180 Eurobond?”
Any commentator that talks about Greece should be required by law to include one sentence why the Greek debt situation negatively impacts on the Philippines.
Yesterday’s market action was precisely what we want to see at the beginning of a long-sustained rally. The market opened strongly. Some profit-taking came in at mid-session although there was not a flood of selling. The close was firm taking prices off their lows. One hundred issues traded higher and volume was a rampaging P7.2 billion. This is totally good stuff for investors. Now back to the reasons for all these wonderful things happening at the PSE.
A comment about stock trading said that now, investors have a positive outlook about the Philippines for the second half of 2011. In truth, stock investors have been positive since October 2008 when the market reached its recent low and since then the index has risen 120 percent from 1,800. The only people who have not been optimistic about the long-term future of stock prices are the “experts.” Ask any investor who bought Ayala Corp. at P150 (now P320), San Miguel at P40 (P119), SM Dev. Corp. at P3 (P8.50) or Megaworld at P0.60 (P2) back then if they have been pessimistic.
Ask any investor who bought these stocks 12 months ago if they have been pessimistic: Semirara Mining at P50 (P200), Security Bank at P50 (P100), DMC Inc. at P15 (P40), and Jollibee at P60 (P90).
While a favorable view of the future of the country does play a role in moving stock prices higher, particularly at the beginning of a rally as in 2008, other more basic factors come into focus at the point where we are now.
Talk to some bright people and you will get a negative response about the next 12 economic months. Economic activity is moving but at a pace that is not exciting. The government’s economic progress is dismal, no matter what the press releases say. Nothing has been done with the much-repeated Public-Private Partnership Program. All talk and no action with something that could have added at least 0.5 percent to gross domestic product. One department is sitting on tens of millions of dollars of foreign direct investment that they refuse to approve. Finance sounds like a branch of the US administration talking nothing but increased government spending and higher taxes.
While the economy is no great deal right now, investors are sitting on plenty of money. There is a tremendous amount of excess personal cash right now and the only investment that feels comfortable is the stock market. Sort of like the US. Frankly, no one trusts the US government to make economic sense and they want their money to be liquid as in the stock market. Nearly the same attitude applies here in the Philippines. Bottom line is that there is an abundance of money to fuel a sustained stock-market rally.
Putting your money in a bank is completely foolish from a rate of return basis. The real interest rate, the difference between what you earn and the inflation rate, is zero.
Property is still a good buy but not as a buy-low-sell-high type of investment. Buy a condo and rent it for current income, not capital gain.
The market is going up and will continue to go up (my forecast is 4,800 to 5,200 long term) because the corporate value of listed companies is growing at a much, much faster rate than the economy.
Finally, look at the front-page chart of the PSE and the peso. The peso is up 1.5 percent from the recent low. The PSE is up 7 percent in the same period. Now tell me again about Greece.
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Sunday, 3 July 2011
MIGUEL JAIME G. ONGPIN
MANILA, Philippines -- The Azkals roundly defeated Sri-Lanka 4-0 in a rain-drenched game that saw Rizal Memorial Stadium filled to just under 13,000 fans; an attendance not seen since the early 1980’s, during the reign of track phenomenon Lydia De Vega.
The Philippine Air Force’s Chieffy Caligdong struck early in the first half as he fired in the crowd that was the Sri Lankan defense. The shot bounced off the goalpost and into the Sri Lankan net.
The Philippine team dominated the entire game with crisp passing, a solid defense; and sound goalkeeping that negated almost all offensive attempts from Sri Lanka.
Standing out in the midfield was Stephan Shrock who had a superb game in delivering the ball to the offense.
Some time midway into the First Half Phil Younghusband found himself in front of the net and had the patience and presence of mind to beat his defender and flick the ball away from himself and the oncoming Sri Lankan goalkeeper, later to reconnect with the ball and slide a ground ball into the Sri Lankan goal making it 2-0.
The First Half ended with that score in a performance showing that the Azkals had finally found their rhythm and finally capitalized on their offense and passing which had badly misfired in the First Leg in Colombo.
The Second Half saw the continuation of the rugged game with Aly Borromeo and Stephan Shrock being issued Yellow Cards, both players will miss the First Leg game with Kuwait.
In the latter part of the Second Half Angel Aldeguer Guirado; much like Phil Younghusband in the first half, flicked the ball away himself and the rushing Sri Lankan keeper and followed through on a slightly bouncing ground ball to make it 3-0.
Stephan Shrock was streaking towards the Sri Lankan goal from the corner post area when he was brought down in the Penalty Area by a defender.
The referee awarded a Penalty Shot which was taken by Phil Younghusband.He calmly converted the penalty shot which flew high into the center of the net and making it 4-0.
The score may have been higher had the Azkals been able to convert on several offensive opportunities. The team was comfortable playing on home soil and a much better pitch than in Colombo. They were also cheered on by their nearly 13,000 home fans.
The Azkals will now advance to the next round of World Cup Qualifiers when they face Kuwait in 2 legs later this month.