Saturday, 10 December 2011

S. Korean firm eyes $1B power projects in Philippines

By: Amy R. Remo
Philippine Daily Inquirer

Korea Water Resources Corp., the leading water resources and power company in South Korea, is looking to invest as much as $1 billion in equity for various water and power projects in the Philippines over the next three years.

Specifically, K-Water is considering the installation of floating solar power systems at the Angat Dam and the construction of the Kapangan hydropower project in Benguet, said K-Water representative in the Philippines, Jiheun (Peter) Yun.

According to Yun, the company is willing to invest as much as $60 million to install the “floating solar power system” in any of the dams in Luzon.

Once installed, it will be the first of its kind anywhere in the Philippines, the company claimed.

K-Water has already begun talks with potential partners including the Ayala group and conglomerate San Miguel Corp.

K-Water explained in a separate statement that the floating solar power system involved the setting up of solar panels in a reservoir, which would allow it to generate higher power output and, at the same time, create an ideal environment for fish spawning since it constrains green algae.

Yun told reporters that the company would initially install a system that could generate 10 megawatts.

Read more:

Aviation trainer plans state-of-the-art simulator

Manila Times

A GLOBAL aviation training services provider on Friday said it would construct a state-of-the-art Airbus full flight simulator in Clark, Pampanga.

In a briefing, Kunal Sharma, chief operating officer of Alpha Aviation Group Philippines said the Airbus A320 Level D Full Flight Simulator would cost “more than $10 million.”

The new flight simulator would provide Alpha Aviation the capability to deliver 6,000 hours of training annually, roughly enough to prepare 300 new pilots for certification.

Sharma said Maybank is providing the financing for the acquisition of the state-of-the-art simulator.


The company said about 80 percent of the training it provides is for Filipinos employed by local airlines such as Airphil Express, Cebu Pacific, Zest Air, and Southeast Asian Airlines. International clients include Air Arabia and Jet Airways.

Launched in 2006, AAG Ph is one of three academies under the UK based provider of specialist training solutions to the international commercial aviation community.

Read more:

Whom we deserve

Manila Standard
They do it for the numbers; they do it for the show. We applaud our leaders’ antics however frivolous, reward them in the popularity polls, and then wonder why this country never seems to get anywhere.

The President’s Pulse Asia ratings for the third quarter this year show that he enjoys the approval and trust of the public, by 77 and 75 percent, respectively. What he did to deserve those figures still baffles; what he has done to get them is, however, palpable, if not blatant.

President Benigno Aquino III has become the ultimate crowd pleaser. He chooses his enemies well and times his tantrums to perfection. He foists himself as the touchstone upon which revered institutions such as the Supreme Court should be measured, and even members of the intelligentsia exclaim, “well done!”

He tickles them blue with the promise of vengeance, and the public proclaims him hero. Underperforming in anything outside of prosecuting the Arroyos, he was given by survey respondents “passing grades” on all national issues against which his performance was evaluated.

Read more:

Friday, 9 December 2011

Ex-Pres. Gloria Arroyo arrives at new detention site


UPDATED 4:16 p.m. - Former President Gloria Macapagal-Arroyo left the St. Luke's Medical Center (SLMC) in Taguig City past 3:00 p.m. Friday, and arrived at the Veterans Memorial Medical Center (VMMC) in Quezon City after an hour of travel to serve her hospital arrest.

The former Chief Executive, now representing Pampanga's second district in the House of Representatives, rode a coaster van that was part of a seven-vehicle convoy, a report on GMA News TV said.

A Pasay City court had ordered the transfer of Mrs. Arroyo, who was arrested last month after getting charged with fraud in the 2007 elections, to the VMMC by Friday. But her camp had questioned a government plan to airlift the former leader, saying it was not consulted.

Reports indicated that Mrs. Arroyo was ready to be transferred to VMMC as early as 6 a.m.

Former President to be transferred by land Friday afternoon

Philippine forex reserves top $76b

by Roderick T. dela Cruz
Manila Standard

The country’s stock of dollars and other foreign exchange reserves hit a new record of $76.35 billion at the end of November, enough to cover all foreign debt, as remittances, outsourcing revenues, and foreign funds continued to flow into the country.

Bangko Sentral Governor Amando Tetangco Jr. said the gross international reserves rose $500 million from $75.83 billion recorded in October, led by higher income from investments abroad and foreign exchange operations of the Bangko Sentral, foreign currency deposits by banks and the national government as well as higher prices of gold.

The reserves over a 12-month period rose $15.78 billion or 26 percent from $60.57 billion registered in November 2010.

The Bangko Sentral was originally expecting the GIR to be in the range of $68 billion to $70 billion by end-2011, but that level was breached as early as July. The forecast was revised to $75 billion and later to $76 billion.

The increase in reserves was led by the strong balance of payments position of the Philippine economy, which is projected to yield a surplus of at least $10 billion this year, according to Tetangco.

At $76.35 billion, the foreign exchange reserves could easily cover the country’s total foreign debt amounting to only $61.4 billion as of June 2011.

“The end-November 2011 GIR could cover 11.2 months worth of imports of goods and payments of services and income. It was also equivalent to 10.7 times the country’s short-term external debt based on original maturity and 6.5 times based on residual maturity,” said the Bangko Sentral.

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.

Data showed that the gold components of the reserves hit $8.06 billion as of November, up from $7.9 billion in October and $6.9 billion a year ago.

Foreign investments of the Bangko Sentral grew to $66.22 billion in November from $65.9 billion in the previous month and $52 million a year earlier.

Other components of the reserves were $444.5 million in reserve position in the International Monetary Fund, $1.14 billion in special drawing rights and $482.6 million in foreign exchange.

Transfer of Mrs Arroyo!

GMA News exclusive interview with former President Arroyo

Thursday, 8 December 2011

Currency collapse or stock-market boom?

Business Mirror

‘There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final or total catastrophe of the currency system involved”: Ludwig von Mises

Ludwig von Mises died at the age of 92 in 1973. Yet his words written decades before tell exactly what is happening today.

The journey to debt oblivion began in 1913 when the US created the Federal Reserve Bank, a private institution that was given the power to control the currency. Events during the next 60 years, including the outcome of the two world wars, the creation of a socialist/communist state in Russia, and technological innovation, brought the US to the position of being the largest and most important engine of global economic activity. In 1971 the long- term plan to give major governments absolute control of currency was fulfilled by the ending of convertibility of currency to gold or silver.

You cannot have unlimited credit without having unlimited currency. For the last 40 years, the world has had both.

Italy and Spain, with a total population of just over 106 million, will need to borrow $330 billion in 2012 just to refinance their existing debt. That additional debt is the same as each working person in these two countries working an extra month for free, just to pay that debt. That is impossible. Only printed money can “solve” the problem.

The European Union will announce today or tomorrow a “solution” to its debt problem. However, as Dr. Mises stated clearly, the only viable option is to stop borrowing and work for as long as it takes to pay off the debt, this time with real created wealth. But that is not on the table for discussion.

The governments’ solution is to continue debt expansion but with more control. The bottom line is that money printing is not going to stop.

According to Mises, that will cause the collapse of the currency system.

The one thing that Mises could not foresee was that now, people in the West are totally dependent on the government for their existence.

In the West, one-third to one-half of total private economic activity goes back to the government in taxes. Those taxes are used to feed, clothe and shelter the people through handouts, subsidies, and government employment.

I think Mises underestimated the ability of the global governments to continue with a corrupt system. He believed the corruption of the debt- based system would cause its eventual failure. I think Mises was wrong. I believe governments can keep it going for as long as they want to.

However, there will be more dependence on the government for a person’s basic needs, a lowering of the standard of living in the West, and higher inflation.

Roman satirist and poet Juvenal wrote in A.D. 100, “The people anxiously hope for just two things: bread and circuses.” The Roman government gave out free wheat and staged expensive circuses to maintain power. It keeps the peoples’ minds off other issues, too.

On October 13, 2008, the title of this column was “The death of debt-based wealth” and I wrote, “The stock market? Wait a few weeks and you will see the best buying opportunity [probably near 1,950] since 2003 when the index was at 1,000.”

I was wrong. The Philippine Stock Exchange index hit a low of around 1,750 the week of November 21, 2008. In March 2009, prices started taking off to the current level of 4,300.

The reason I mention this is that in 2009, massive money printing started and the global stock market staged massive rallies. In the 21st century, there is no better “bread and circus” than a stock-market boom.

The government says it costs 5 percent more in November 2011 than in November 2010 for all your basic goods. Do you believe that is true with P200 pork and the current price of gasoline? But this is true; the PSE is 6.5-percent higher than in November 2010.

Western stock markets have performed poorly this year. The Dow Jones dropped 8 percent in early November when investors thought governments might allow default by “voluntary abandonment of further credit expansion.” During the last week of November, the Dow Jones rose 8 percent as the governments’ attempt to find a “solution” through money printing.

If you believe that governments will allow a currency collapse, head for the mountains. If you believe that they will find a “solution,” head for the Philippine Stock Exchange, as you should have in 2008.

Get your stock investment prepared now.


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

BlackRock's Bob Doll: Obama Goes on Attack to Hide His Weak Track Record

President Barack Obama has stepped up politically divisive campaign rhetoric and will continue to do so, often going negative because he's done little positive to heal the economy, says Bob Doll, chief equities strategist at BlackRock, the world's largest asset manager. [Read more]

(Hmmm....doesn't that sound familiar!?)

Wednesday, 7 December 2011

Birth control drugs can cause fatal blood clots

Birth control drugs under scrutiny
Manila Bulletin

WASHINGTON (AP) – Birth control drugs that were heavily promoted as having fewer side effects and the ability to clear up acne and other hormonal bothers are under new scrutiny from US safety regulators.

Research suggesting that newer birth control formulations are more likely to cause blood clots than older drugs has prompted the Food and Drug Administration to consider new safety measures in meetings later this week. The increased risk is slight, but significant because blood clots can cause heart attacks, strokes and blockages in lungs or blood vessels, which can be fatal.

Regulators could order new warning labels on several contraceptives that gained popularity in the last decade, including Bayer's pill Yaz, which was the best-selling birth control pill in the US for 2008 and 2009.

Yaz, its Bayer precursor Yasmin, and similar drugs use a version of a female hormone that appears to reduce side effects found in older drugs, including bloating and mood swings.

On Tuesday, a judge unsealed several court documents suggesting Bayer may have withheld data from the FDA about the blood clot risks of its drugs. The documents stem from expert opinion gathered by personal injury lawyers suing Bayer on behalf of patients.

Bayer AG spent more than $270 million on TV and magazine advertisements for Yaz between 2007 and 2010, according TNS Media Intelligence. Such big-budget campaigns are rare for birth control products. One advertisement featured young women singing the Twisted Sister anthem, “We're Not Gonna Take It,” while popping balloons labeled “moodiness,” “bloating” and “acne.”

Sales of Yaz have fallen since regulators forced Bayer to correct advertisements that overstated Yaz's benefits and as safety questions drew scrutiny in both the US and Europe.

FDA also is reviewing research on clot risks associated with Johnson & Johnson's weekly Ortho Evra patch, which is marketed as an “option for busy women who are looking to simplify life.” The drug uses a different version of the female hormone progestin.

Millions of women have used the products since they launched a decade ago, but recent studies comparing the medical histories of women taking the newer drugs to older ones suggest a slightly higher risk of blood clots in the legs and lungs. Last year, the US market for female contraceptive drugs totaled $3.4 billion, according to IMS Health.

Sorting out the blood clot risk of birth control drugs is especially difficult because all hormone-based drugs increase the risk of clotting. Further complicating the matter is that clots can be caused by factors such as smoking, obesity or family history.

Yaz, Yasmin and other pills containing a synthetic hormone called drospirenone are the focus of a discussion Thursday. The next day's meeting focuses on the Ortho Evra patch, which uses the hormone norelgestromin.

Bayer says its studies have shown no difference in blood clot risk between its drugs and the older birth control drugs. But several large, independent studies suggest the risk with Yaz and similar medications is slightly higher. The latest analysis by the FDA estimates the risk of a blood clot with drospirenone-containing pills is 1.5-fold higher than other hormone-based contraceptives. That translates into an estimated 10 in 10,000 women on the newer drugs experiencing a blood clot, compared with 6 in 10,000 women on older contraceptives, according to the FDA.

“It's a very small percentage of patients that develop these, but it's such a serious side effect that I think doctors have to use a lot of caution,” said Dr. Jennifer Wu, of Lenox Hill Hospital in New York.

Even if Yaz and other newer drugs get additional warning labels some doctors say they don't expect to stop prescribing them. They point out that the risk of blood clots with any birth control pill is still far lower than that associated with pregnancy and birth, when hormone levels and reduced blood flow increase clotting risk.

“At the end of the day I tell my patients the absolute risk is still very, very low compared to pregnancy and post-partum risk,” said Dr. Rebecca Starck, of Cleveland Clinic's Fairview Hospital. “There are still many benefits to combination birth control pills.”

The Ortho Evra patch already carries warning labels about an increased risk of blood clots compared with pills. Some, but not all, studies suggest patch users have twice the risk of clots. The FDA will try to further define that risk using the latest data.

Most birth control drugs use a combination of two female hormones, estrogen and progestin, to stop ovulation and help block sperm. But for decades many women have reported bloating and mood swings as side effects.

Tuesday, 6 December 2011

Get ready for the big move

Business Mirror

AT a luncheon many years ago, I had the privilege of sitting across the table from Dr. Sixto K. Roxas. Dr. Roxas is a man to be listened to, as his experience is so wide. An educator, corporate executive and investment banker, this is a man who comes to the conversation with a perspective that is enviable.

Dr. Roxas studied the history of the Philippines and came to conclusion that every six years, more or less, the nation went through a tumultuous period that created far-reaching changes. Long years after our conversation, the Estrada impeachment proceedings began and eventually Gloria Macapagal-Arroyo became the President. It has been nearly 11 years since Edsa 2 and like then, the climate is turning tumultuous.

However, I have no intention of entering the conflict of discussion about separation of powers and such. There are others more qualified than I to figure out the “rights” and the “wrongs” and the implication of all the players’ actions.

I will speak, though, about the stock market.

The business headlines yesterday tell part of the reason I find stock-market trading irresistible. The Philippine Daily Inquirer said, “Philippine stocks forecast to rise” while the Philippine Star quoted opinions that, “Stocks seen listless this week.” Can both opinions be true? Absolutely. In a sense, the writers of those headlines represent the basic contrary opinions of the stock-market participants; the buyers and sellers.

As I have said so many times before, buyers buy because they believe prices will never be any lower than today. Otherwise, why buy now? Sellers believe prices will never go any higher and that is what makes for a stock market.

Do not think either, that the opinions held by the buyers and the sellers at the stock market are any less emotional and strong as the opinions held by those in the political arena. Everything is clearly black and white. For politics, it is always that opinions are either right or wrong. For the stock market, it is always that prices will go up or down. There is no gray area.

While the front pages of the newspapers talk about the tug-of-war going on in the political front, there is no less a “war” happening on the Philippine Stock Exchange between the buyers and the sellers that will determine the future of stock prices.

Buyers believe that conditions will move prices higher; sellers believe the opposite and see prices moving lower in the months ahead. Simplistically, some pundits believe that presidential power must be strongly used for the good of the country. Others are convinced that strong control of that power is most important.

Back to Dr. Sixto’s cycles. Twelve years ago the Philippine Stock-Exchange index was priced at 2,000. Now the index is well above 4,000. Sure, there have been ups and downs, with the index falling as low as 1,000 in 2003. However, the market is up over 100 percent in 12 years.

Dr. Sixto told me of minor three-year cycles also. Now it gets interesting. From 2000 to 2003, the market was down 50 percent from 2,000 to 1,000. In the next three-year cycle, the market doubled up from 1,000 back to 2,000. During the period 2006 to 2009, prices went on the roller coaster, first going higher by 75 percent and then falling all the way back down to 2006 levels in 2009. And the ride was not over. From 2009 to now, nearly in 2012, we again have witnessed the index double from 2,000 to over 4,000.

What’s the point?

The point is that the stock market is now building an incredible amount of pressure to make a large move not seen since beginning in 2000.

One column here could give you a very detailed and hopefully accurate prediction that prices are going to reach highs that are unexpected. Likewise, another could equally give you an analysis of why prices are going down, much in the same way the two newspaper headlines disagree.

There are clues all around us as to what the future will bring if we know where and how to look for them. Pagasa said a few days ago that we would have some rain this week. It was not a guess or a hunch or magical wisdom. It was a reading of the evidence in front of them. Only, they have the experience to understand and interpret the data.

If you are a stock-market investor, come by and subscribe to the Premium Area to get prepared.

We are soon going to see movement on the PSE that we will look back on as a monumental event.


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

Monday, 5 December 2011

Subdued growth

Manila Standard
The Aquino administration clearly missed the boat on boosting the economy this year. With nearly P300 billion in budget deficit to spare, the government did not take advantage of the leeway. The result of the underspending was evident—the economy grew just 3.2 percent in the third quarter when it could have fared much better.

The 2011 budget enacted by the Aquino administration allocated billions of funds for pump-priming activities in the hope of achieving a 5-percent to 6-percent economic growth amid the weak global environment and falling export markets. The government, instead, chose to be “cautious” and withheld spending on infrastructure projects.

The economic managers appeared to have failed to apprise President Benigno Aquino III of the severity of the global market conditions resulting from the Arab Spring, the deadly earthquake in Japan in March, and the worsening debt crisis in the Eurozone. All these unfolded in succession while the US, the world’s largest economy, struggled to create jobs and lift its gross domestic product.

The confluence of these events increased world oil prices, put Japan, the world’s third-largest economy, into deeper recession, and slowed down global expansion. Philippine exports reeled in the face of a dwindling global market, especially for electronics, and the local economy petered out.

The government, for unexplained reasons, did not bother about what was happening to the rest of the world, nor did it resort to pump-priming to counter the effects of the slowing global economy. It continued to underspend, with cement and construction companies feeling the brunt of the restrained economic activities.

Economists acknowledge that government spending is key to boosting growth. It will again be a critical factor in the coming months. Bangko Sentral Governor Amando Tetangco Jr. agreed that government spending must pick up to spur economic growth in the coming quarters.

Tetangco said while lower interest rates would increase economic activity, public expenditures were “a more effective way of generating internal growth.”

The previous administration had “front-loaded” the bulk of the deficit spending, especially in infrastructure, in the early part of the year to take advantage of the good weather conditions. There is no reason why the current administration could not do the same. The multiplier effect of pump-priming is too great to ignore.

Pro-RH rallyists get paid

No delay but RH bill won’t be passed this year—Enrile
By Christian V. Esguerra
Philippine Daily Inquirer

Are opponents of the reproductive health (RH) bill intentionally delaying the passage of the measure or are its proponents simply in a hurry?

Senate President Juan Ponce Enrile on Thursday doubted Senate Bill No. 2865 would be passed by the chamber before Congress goes on its Christmas break in two weeks.

But he made it clear that he and the other senators who had expressed reservations about the bill were not trying to delay its passage.

“I don’t think it will pass this year,” he said at the weekly Senate media forum. “There are (still) many issues to be clarified. We are not delaying it.”

Majority Leader Vicente Sotto III earlier cried foul over the allegation of Senators Pia Cayetano and Miriam Defensor-Santiago, cosponsors of SB 2865, that some senators were trying to torpedo the bill.

On Monday, Cayetano took the floor and manifested her desire to move for the termination of the period of interpellation. “There do not seem to be any other senators who have indicated their desire to interpellate,” she had said.

“I take exception to the fact that they mentioned the word ‘delay,’” Sotto said. “The last thing I would want to do is not discuss the RH bill. I want to discuss it because I want an intelligent vote from the members of the Senate. I want them to find out more about the bill, like what is happening in the House (of Representatives).”

Still in line to interpellate Cayetano and Santiago are Sotto, Enrile, Ralph Recto, Panfilo Lacson, Loren Legarda, Ramon Revilla Jr. and Lito Lapid. Lacson is the principal author of another version of the RH bill.

“We are not delaying. We still have plenty of questions… I have just started discussing the economic impact of this bill because I am concentrating on the population aspect. I have not yet dealt with the religious aspect. There is (also) a security aspect in this bill,” Enrile said.

“I would support this bill if it is only to provide health measures to womanhood. But this has an impact on our country and its future, not only in terms of health but (also) in terms of economic growth, its security and viability as a country.”

Early this year, the Reproductive Health Advocacy Network (RHAN) received P4.4 million from the United Nations Population Fund to push for the passage of the RH bill before the end of 2011. Dr. Junice Melgar, RHAN secretary general, admitted that her group solicited the amount because it “has no ongoing funding.”

Based on RHAN’s budget proposal, the amount was to be spent on activities such as “education and mobilization” program. One item worth P2,837,500 was to go to organize “two nationally coordinated (and) high-profile mobs.”

The group scheduled the “peak” of its pro-RH rally for September and set aside P1,750,000 to organize a rally of “at least 5,000 people.” Each participant was supposed to receive P350.

Sunday, 4 December 2011

Enforce the sub-judice rule

Manila Bulletin

MANILA, Philippines — The recent filing of the criminal case against former President and now Congresswoman Gloria Macapagal Arroyo raises several public speculation on the case as to whether it will be fairly decided.

On this score the rule of sub-judice comes to play which rule the general public may not be fully aware hence a short discussion on the matter.

Sub-judice – under or before a judge or court; under judicial consideration: undetermined (Black Law Dictionary). In plain language, it is resolving or deciding of a pending case in court. Thus, for the sake of fairness, it shall not be commented on during its pendency. Doing so, shows lack of respect for the integrity and impartiality of the court and may prejudice the right of the parties. Like any other person, the judge may succumb or be influenced by it either deliberately or unconsciously.

For this reason, courts can cite for indirect contempt any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice (Sec. 3 (d), Rule 71 of the Rules of Court). This proper conduct may be in the form of comments on the merits of the case like innocence or guilt of the accused, the credibility of the witness or the strength or the weakness of the case of the plaintiff and the defendant of vice-versa. The aforequoted rule is considered as a valid commitment of the constitutional right of freedom of speech.

However, despite its prejudicial effect, violation of sub-judice rule proliferates because of the failure of either parties or the court to have the violators of the rule cited for contempt or they themselves violate it. And then the losing party will complain that he did not get a fair trial or decision of the case but because of other consideration. On this score, for a fair and just administration of justice with the integrity of the court held in high esteem, the court and parties themselves, including the media in all forms, most refrain from making any comment on a case pending in court. In turn, the court should strictly enforce punitive action on any violation through contempt procedures either on its own initiative or upon complaint of the offended party.

And now is the time to do it before the administration of justice degenerates to a decision of the mob, especially when it involves the former President of the country.