Saturday, 18 August 2007

Gov't posts surprise budget surplus of P1.6B

Teves says fiscal program now back on track
By Michelle Remo
Full report at the Inquirer

MANILA, Philippines -- Proceeds of privatization sales and low interest rates helped the national government post a P1.6-billion budget surplus in July, prompting authorities to declare that the full-year fiscal target has become attainable despite a slippage in the first half.

The national government -- as distinguished from the overall public sector -- generated P104.0 billion in revenues as against P102.4 billion in expenditures, the Department of Finance reported Friday.

The performance in July “gives us confidence that the deficit will not breach the target of P63 billion for the entire year,” said Finance Secretary Margarito Teves, adding the government was sticking to the full-year goal amid doubts on its ability to do so.

Fiscal data for July brought the government's budget position in the January-July period to a deficit of P39.4 billion, compared with a target limit of P52.3 billion in the fiscal program for those seven months.


“We were fortunate in July because of the proceeds of the sale of PNOC-EDC [Energy Development Corp.] that contributed to overall revenues,” Teves said.

The government last month sold another 20 percent of PNOC-EDC, earning P15 billion.

The BIR in July collected P58.7 billion in revenue, surpassing its target of P57.8 billion for that month and slightly recovering from its shortfall in the preceding six months.

January-July collections by the BIR totaled P393.4 billion.

For the full year, the BIR is tasked to collect P765.8 billion.

The Bureau of Customs in July collected P20.8 billion in revenue, surpassing its target of P19.86 billion for that month after a similar dismal performance in the first half. Its January-July collection totaled to P113.0 billion.

For the full year, the Bureau of Customs is tasked to collect P228.2 billion.

The Bureau of the Treasury, which collects dividends from government corporations, contributed P5.4 billion to total revenues in July. Other government offices collected P19.1 billion.

Friday, 17 August 2007

Fraport loses case vs Philippines on NAIA-3

Original report at ABS-CBN News

The Philippine government has won a major victory after the International Center for Settlement of Investment Disputes threw out the petition filed by Germanys' Fraport AG against the Philippines, over a dispute regarding payment for the construction of an international airport terminal in Manila.

Solicitor-General Agnes Devanadera said, the ICSID dismissed the petition of German-port operator Fraport AG, which filed the case in September 2003, since the Philippines did not violate any investment treaty.

"That's why since it (Philippines) did not have any violation, our position stands that the ICSID does not have jurisdiction over the case."

Fraport AG of Germany filed a settlement dispute case against the Philippine government claiming it should be paid $425-million for building NAIA Terminal 3.

Devanadera said the legal victory will smoothen the way for an earlier opening of the mothballed international airport terminal.

2008 implementation set for ID system

Full report at BusinessWorld Online

The Unified multipurpose-identification (UM-ID) system, which is being implemented on a pilot basis in three government agencies is expected to be completed in the third quarter of 2007.

The full blown implementation of the system is expected to start next year after the selection of a private sector partner following prescribed build-operate-transfer (BOT) selection procedures, said a statement issued by the National Economic and Development Authority (NEDA).

Businesses optimistic on revenues — survey

Original report at Manila Bulletin

Businesses in the Philippines are more optimistic about the revenue prospects in 2008 than they were in 2006.

An international businesss report by Punongbayan & Araullo and UK-based Grant Thornton showed that their levels of optimism regarding the revenue performance are higher than both the East Asian average of 68 percent and the global average of 70 percent.

The report said that Philippine businesses are also more optimistic regarding profitability (65 percent) over the coming year than businesses globally (+52 percent).

About 70 percent of Philippine businesses expect employment to increase next year, 38 percent more businesses than in 2006.

The report noted that only India has a higher proportion of businesses (+74 percent) expecting employment growth globally.

About 48 percent more businesses in the Philippines reported an increase in employment in the last year, rising from by 28 percent in 2005 to 76 percent last year.

More businesses reported an increase in employment last year in the Philippines than any other country worldwide.

However, the report stressed the lack of availability of a skilled workforce is the most restricting constraint on expansion for businesses in the Philippines.

Philippine businesses are not restricted by these factors as much as other countries within the East Asian region .

The report said that the shortage of orders or reduced demand in particular is well below both the East Asia average and global average.

The proportion of business owners in the Philippines reporting an increase in stress levels is 12 percent lower than in 2006.

About 64 percent of businesses have experienced a rise in stress levels, less than East Asian average of 73 percent, but still higher than the overall global average of 56 percent.

In order to gain insight into how business owners manage stress, the survey also asked about how many hours they work a week.

On average, business owners in the Philippines work 49 hours per week, less than the global average of 53 hours.

The proportion of Philippine companies exporting has decreased in the last year. About 27 percent of Philippine businesses now export, 9 percent less than last year.

This is now below both the proportion of businesses exporting across East Asia (30 percent) and globally (34 percent).

Philippine businesses are much more likely to see globalization as an opportunity than a threat to their business.

About 70 percent of businesses view globalization as an opportunity and just 18 percent view it as a threat. Businesses in the Philippines as a whole are slightly less likely to see globalization as a threat (15 percent) compared to businesses in East Asia, and globally.

Businesses globally are also much less likely to see globalization as an opportunity (55 percent) compared to businesses in the Philippines.

More businesses in the country (68 percent) cited energy costs as having a major impact on cost pressures than anywhere else worldwide.

Cost pressures are similar to the East Asian and global average in all other areas except for property costs, that was cited by 27 percent of businesses.

The majority of business owners in the Philippines (55 percent) also cited raw material costs as having a major impact on cost pressures.

BOP surplus reaches $4.542B in 7 months

By Des Ferriols
Full report at the Philippine Star

The country’s balance of payments (BOP) position rose to $1.343 billion in July, pushing the seven-month figure to a $4.542 billion surplus, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The seven-month BOP surplus is already $1.6 billion more than the $2.9-billion surplus projected by the BSP for the whole of 2007.

BSP Governor Amando M. Tetangco Jr. told reporters that the surge in the BOP surplus was traced to the sustained remittances from overseas Filipinos and the significant increase in foreign portfolio flows.

According to Tetangco, there was also a large improvement in the balance of trade with higher exports generating higher foreign exchange inflows.

“The surplus could have been higher without prepayments by the National Government and the BSP,” he said.

Tetangco said the BSP’s outlook on the BOP continued to be positive despite the current gyrations in the stock market and currency markets arising from the credit crisis in the US.

Net ‘hot money’ inflow hits $3.6B

By Des Ferriols
Full report at the Philippine Star

Lured in by eagerly-awaited public offers, net foreign portfolio investments or “hot money” soared to $3.6 billion in the first seven months of the year, hitting $1.1 billion in July alone.

The August numbers are expected to be a dramatic reversal. But for July, data from the Bangko Sentral ng Pilipinas (BSP) showed that net inflows soared more than three times last year’s levels.

The BSP said that the increase in net inflows of registered foreign portfolio investments was due to several large initial and follow-on offerings.

On the other hand, preliminary August data indicated that at least for the first two weeks of the month, inflows remained strong, with the total year-to-date level at $10.528 billion on a gross basis.

Outflows for the period, on the other hand, amounted to $7.01 billion for a total net inflow of $3.517 billion from January to the first two weeks of Aug.

GMA in Clark: TI, Sunpower, Asahi, and education reforms

GMA breaks ground for $1-B TI plant
By Ding Cervantes
Full article at the Philippine Star

CLARK FREEPORT, Pampanga – President Arroyo led here yesterday the groundbreaking for the $1-billion manufacturing plant of Texas Instruments – its biggest investment outside the United States.

In her speech at the groundbreaking ceremonies, Mrs. Arroyo said the new facility is “our image model in demonstrating that the Philippines has become an increasingly competitive location for manufacturing and high-skilled jobs, along with services , and the booming call center business.”

“I am happy this $1-billion TI facility here will be producing from semi conductor chips to wafer bumps,” she said. The new plant sits on a 32-hectare property..

The new TI plant is expected to employ 3,000 Filipinos. The TI plant in Baguio, established 27 years ago, has 3,000 Filipino employees.

“Incidentally this is not the only expansion we are celebrating because in Baguio they (TI) are now on a $50-million expansion as well,” she said.

With its new facilities here and in Baguio, TI’s Philippine operations “will have the biggest number of employees in the entire TI family.”

She said the Clark-Subic area has been attracting investors because of its “strategic location.” “For instance, on the other side of the Clark-Subic road under construction, we have another billion dollar investor Hanjin already operating a shipyard,” she said.

She also noted that another US firm, Sunpower, is expanding its initial $200-million investment in solar panels by another $200 million to triple capacity.

“TI is doing wafer bump for general use. Sunpower is doing wafer bump just for solar panels. The Sunpower expansion is leading to an expansion of Asahi Glass to supply the glass for the panels and the expansion of Asahi Glass is also triggering exploration of silica in Pangasinan,” Mrs. Arroyo said.

“All of these make us the best value and the best place to invest in Asia,” she pointed out.

“We offered a strategic location in our fast growing region. We are just three hours away from the capitals in our region. That is the reason why we are developing Clark and Subic into a logistics and service center,” she added.

She also said her administration is pushing for amendments to the Electricity Power Industry Reform Act (EPIRA) to spur greater competition in the power sector and help bring down electricity rates.

“We hope this will contribute to decreasing power rates in our country. If that’s not enough, we are also working on a legislation to have open access and increase competition so that our rates will go down more quickly,” she said.

The President also cited the need to “reengineer our education system” to make it responsive to the requirements of growing industries.

She cited as an example the curriculum of the University Foundation (AUF) in Pampanga headed by former Clark Development Corp. president Emmanuel Angeles, which is tailor-made for TI requirements.

The President disclosed her issuance recently of an administrative order for the creation of a “high level task force that will reengineer our educational system.”

The task force will be composed of four representatives from the government and five from the business and academic sectors. The four government representatives are the education secretary, the presidential assistant for education, and the chairpersons of the Commission on Higher Education and the Technology Education Skills Development Authority or TESDA.

Thursday, 16 August 2007

Mining investments to hit $1.6B

By Marianne V. Go
Original report at the Philippine Star

Some $1.6 billion in investments will be poured in by existing local mines next year, Mines and Geosciences Bureau (MGB) director Horacio C. Ramos said yesterday.

The projected amount is more than triple the $400 million to $500 million that will be invested this year, Ramos said.

Ramos said the upcoming investments include those that are about ready to start their operation. These include Atlas Consolidated Mining and Development Corporation, Oceana Gold Ltd., and Filminera Resources.

According to Ramos, Atlas, has brought in some $18 million worth of heavy equipment and is scheduled to start production in about a year.

Filminera, has gotten approval for its mineral processing permit and only needs approval for its feasibility study, Ramos said, adding that he has assured Filminera that the MGB would fast-track the approval of the FS upon its submission.

He said, Filminera could start operations within the year as it has also invested about P120 million for its start-up.

Ramos predicted that next year would be the start of a mining boom in the country as several mining firms would concretize their investments.

Local mining executives acknowledge that the Philippines is experiencing a positive phase in its development with the government now pushing the mining sector as an investment opportunity from its previous stance of just tolerance.

Global mineral prices, Ramos said, continue to hold steady, assuring reasonable returns for mining investors.

Wednesday, 15 August 2007

P8-B Gil Puyat Ave.-NLEX Skyway project

Chinese firm opts to build Stage 3
Original article at the Manila Bulletin

China Road and Bridge Corp. (CRBC) has opted out from Stage 2 project (Bicutan to Alabang) of the Skyway with the Citra Metro Manila Tollway Corporation (CMMTC), the joint venture between the Citra Group and the Philippine National Construction Corp. (PNCC), finally exercising its option to undertake the R8-billion elevated expressway (Stage 3).

The Chinese group is interested in undertaking the Stage 3, which will continue from the existing Skyway in Buendia to connect to the North Luzon Expressway (NLEX) cutting through Manila.

Trade and Industry Secretary Peter B. Favila told reporters that CMMTC is going to start construction this quarter or 30 days from the issuance of the Notice to Proceed by the Tollways Regulatory Board (TRB).

Stage 2 is a 6.88-kilometer tollroad from Bicutan to Alabang. It is a continuation of the Stage 1, a 9.3 kilometer skyway, which starts from Magallanes to Bicutan.

It could be recalled that in April this year, the Indonesian-owned Citra has invoked that it has the Supplemental Toll Operations Agreement (STOA) as well as the funds to pursue the project.

The China Road and Bridge Corp. had expressed interest to undertake the long-delayed completion of the Skyway project and its extension and linkup with the North Luzon Expressway for an estimated P54 billion.

But the Indonesians hold the STOA, which empowers them to build and operate the Skyway. CITRA already has completed the first stage of the project covering the Buendia to Bicutan stretch.

Citra has committed to complete the project by 2010 although instead of the original 1999 completion schedule.

Should Citra failed to comply with the 30-day period by which to commence construction, the Indonesians are going to lose the contract to other proponent[s].

The Citra Group, which is headed by the daughter of former Indonesian Prime Minister Suharto, was supposed to have defaulted its right to construct Stage 2.

The Indonesian group, which completed the construction of Stage 1 (Buendia to Bicutan involving 14 kms.) at a cost of 4 million in 1998, was given up to 2006 to exercise its option to undertake Stage 2.

Its joint venture firm, CMMTC, had already constructed 12 advance columns in preparation for the construction of Stage 2 of the skyway.

The Chinese, on the other hand, had proposed to complete the Skyway by constructing of Stage 2 from Bicutan to Alabang and Stage 3 from Buendia to Balintawak for a total project cost of P54 billion.

In fact, it has submitted a proposal to complete the skyway to the National Economic and Development Authority for approval.

The P54 billion-project cost would be funded by the Chinese through concessional loans and equity portion.

Meantime, Stage 3 of the Skyway project proposes to extend the Skyway from Buendia following the old South Super Highway to Quirino Ave. and crossing through Araneta up to the Nagtahan Bridge to connect to C-3 out of Bonifacio going to Balintawak.

But Favila [said] that construction of Stage 3 is met with a huge right of way problem as it has to go through the busy districts in Manila. Already, the local government of Manila has expressed reservations over the planned construction of the Skyway.

The government has yet to decide on what agency would be the implementing arm for the Stage 3 project.

The Skyway will then be connected to the Alabang viaduct, which is being rehabilitated by MTD Capital Bhd. of Malaysia. MTD is also undertaking the project in joint venture with PNCC.

The Skyway project, an overhead motorway along the South Luzon Expressway, is one of the priority projects of the Department of Public Works and Highways (DPWH) in the CALABARZON area under the President’s 10-point agenda.

The completion of the extension project is seen to further spur movement of goods and services within the Cavite-Laguna-Batangas-Rizal-Quezon growth area. (BCM)

Dollar remittances $1.1B in June

Original report at ABS-CBN News

Dollar remittances from Filipinos working overseas totaled $1.1 billion in June, bringing the level in the first six months of the year to $7.03 billion, up 18 percent from a year earlier.

Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo raised the forecast on remittance level this year to $15 billion from earlier target of $14 billion. Guinigundo said the new forecast was equivalent to about 11 percent of GDP and more than 50 percent of forex reserves.