Saturday, 15 September 2007

Coffee exports grow 27% in H1 of ’07

By Max V. de Leon
Original report at The Business Mirror

COFFEE exports grew by 27 percent in the first half of the year to $3.35 million as the Philippines shifted its focus on the higher-value processed coffee, the Department of Trade and Industry (DTI) reported Thursday.

The volume of shipment also increased from 1.12 million kilograms in the first six months of 2006 compared with 1.33 million kilograms in the first semester of 2007.

The International Coffee Coordinating Agency (ICOCA), an attached agency of DTI, said the bulk of the volume was soluble coffee with a 99-percent share.

Japan emerged as the top export destination with 86 percent, trailed by Korea with 7 percent, Malaysia with 2 percent, Thailand with 2 percent and Greece with 2 percent.

The green beans variety, with only 0.37 percent of total volume, also went mostly to Japan with 95 percent and China with 5 percent.

Shipment of roasted coffee rose by 49 percent from 1,353 kilograms in 2006 to 2,020 kilograms in 2007.

The US is the top destination for Philippine roasted coffee with 94.70-percent share, followed by the Kingdom of Saudi Arabia with 5.30 percent.

Trade Senior Undersecretary Thomas Aquino said the Philippines’ coffee exports sustained its growth in the last five years, reaching its peak in 2006 at $5.41 million.

Coffee exports amounted to $5.36 million in 2005, up 40 percent from 2004.

“We hope the sector could sustain its growth and continue to contribute to the growth of the export sector,” Aquino said.

ICOCA’s Special Export Authorization (SEA) program, meanwhile, accredited to two new exporters, the Vita Herbs Philippines Trading and Multiways Trading, bringing the total number of accredited exporters to date to 61.

Domestic coffee prices for Robusta green beans, meanwhile, showed a steady increase from January’s average of P77 per kilogram to P78 per kilogram in April, a jump to P83 in May and finally ending at almost P89 per kilogram by June 2007.

At these prices, it is expected many farmers would be encouraged to go back to coffee farming.

100 multinational execs name RP to top 7 destinations for investments

By Dennis D. Estopace
Original article at The Business Mirror

THE Philippines was named by a hundred executives of multinational companies as among the top seven destinations for new investments in the region, according to a recent survey by the Frontier Strategy Group.

In the survey titled “Shifting from the BRICs to the Future 7 (F-7): The Seven Markets That Will Drive Corporate Profit Growth in 2008 and Beyond,” the correspondent executives highlighted seven key markets—Indonesia, Inland Brazil, inland China, Mexico, the Philippines, Turkey and Vietnam—as “the most critical markets in achieving corporate growth and outperforming the competition in 2008 and beyond.”

The so-called BRIC markets—Brazil, Russia, India and China—had been hyped much earlier as vital markets.

The Frontier Strategy Group is a Washington-based consulting group and has former US ambassador to the Philippines Nicholas Platt as an advisor.

The survey showed the Philippines scoring 3.7 in terms of attractiveness of investment environment and 4 on the size of market opportunity on a scale with 5 being the topmost.

The country outscored Indonesia—at 2.7 and 1.3—but is behind Vietnam, with scores of 4.1 and 3.9.

The paper said that the group asked executives to take in account the following factors in attractiveness of the investment environment rating: foreign-investment restrictions, labor laws, work-force productivity, corruption, government transparency, political stability and legal-dispute resolution.

In ranking the markets based on size of the market opportunity, the group said it asked executives to choose “the markets in which they would be most interested in investing if attractiveness of the investment environment was not a factor.”

The paper said that rising wages, thinning number of skilled workers and market saturation of up to 70 percent in key cities the likes of Shanghai and Mumbai are the factors commonly cited by executives as reasons for the push toward new markets like the Philippines.

Likewise, they said there is a “likelihood of declining economic growth rates as governments attempt to contain inflation.” The Philippines has been posting lower inflation rates from the start of the year as monetary officials began mopping up liquidity and maintained low interest rates.

On the other hand, the pull factors these executives cited include the fast growth of the F-7 markets. Aside from large populations, “each economy is in the top quintile in terms of size [of the economy] and together they boast an average annual growth rate of 7.5 percent.”

Aside from these, the executives cited the seven markets as attractive because of “close proximity to some of the world’s largest markets” like Coastal China, Japan and India.

The Philippines was among those cited for its “increasing openness to foreign investments.”

The Philippines was cited as a desirable new investment destination by 17 percent of the executives surveyed, more than Indonesia with 9 percent, but trailing Vietnam with 28 percent.

“As the rates of profit growth in the traditional BRIC markets decline, companies will increasingly turn to the F-7, which have many of the same characteristics that initially put the BRIC countries on the radar screens of multinationals—large, fast-growing populations and economies, abundant labor forces, and increasing receptiveness to foreign investment,” said the report.

The survey said the most important success factor in these seven markets include aligning incentives with host governments and identifying joint ventures and merger and acquisition targets.

On the other hand, the factors “that keep executives up at night” included economic overheating and rising inflation, shortage of human resources, lack of access to natural resources and pollution, and environmental degradation.

A downturn in the US economy was also noted as the No. 1 threat to regional growth.

Mendoza mum on ZTE deal

By Jess Diaz And Paolo Romero
Original article at The Philippine Star

Transportation Secretary Leandro Mendoza remains tightlipped on the controversial $330-million national broadband network deal that he signed in the presence of President Arroyo in Boao, China in April.

On Thursday night, during the House appropriations committee hearing on his agency’s proposed P22.5-billion budget for next year, Mendoza refused to answer questions about the project, citing legal restrictions.

As Mendoza kept his silence, a son and namesake of Speaker Jose de Venecia Jr. vowed to identify to senators next week a “mystery man” who was with Commission on Elections (Comelec) Chairman Benjamin Abalos when the latter allegedly tried to bribe him with $10 million so he would withdraw from the competition for the broadband project.

Jose de Venecia III is a majority stockholder and co-founder of Amsterdam Holdings Inc. whose broadband proposal was rejected by the government in favor of China’s ZTE Corp.

“The Supreme Court has issued a temporary restraining order enjoining us from implementing this project. We are bound by the sub judice rule,” Mendoza told the appropriations committee chaired by Albay Rep. Edcel Lagman.

Mendoza would not even say if there was indeed a contract awarded to ZTE Corp. or if he signed it on April 21.

“My lawyer has told me that any question about the contract, I should not answer,” Mendoza said.

He said much as he wanted to talk about the supposed ZTE contract to “separate truth from fiction, fact from lies,” he is prevented from doing so by the sub judice rule.

But opposition Rep. Rufus Rodriguez of Cagayan de Oro said the rule does not cover the information the lawmakers wanted to extract from Mendoza.

“Those are not covered. What is covered is discussion of the merits of the cases pending in the Supreme Court,” he said.

He said he just wanted to know if there was indeed a contract with ZTE or if it was Mendoza who signed it as Malacañang announced in April or if Mendoza could furnish a copy of the supposed contract to the appropriations committee.

Rodriguez’s incessant pleas fell on deaf ears. He waited in vain for Lagman, who is also a lawyer, to force Mendoza to answer questions.

Apparently in an effort to placate the Cagayan de Oro congressman, Lagman reminded him of the testimony of Budget Secretary Rolando Andaya Jr. that there is no allocation in the P1.227-trillion proposed national budget for the payment of any China loan for the NBN project.

“I will be the first to be vigilant about this. I do not want our debt servicing funds, which already take up a large part of the annual budget, to increase. In fact, I have been advocating the repudiation of some loans,” he said.

Rodriguez was inconsolable. He reminded Lagman that under Marcos-era decrees, Malacañang is empowered to enter into loan agreements and to automatically appropriate loan payment funds without consent from Congress.

“Before we know it, this whole thing will be a fait accompli,” he said.

He said with Mendoza’s refusal to answer even simple questions about the alleged ZTE contract, “this administration, consistent with its policy of not being transparent, is keeping the people and their representatives in the dark on this unnecessary, gargantuan and grossly overpriced project.”

About two hours before Mendoza faced the appropriations committee, Trade Secretary Peter Favila told Rodriguez and other members of the Lagman panel that he was the wrong person to ask about the ZTE deal and pointed to Mendoza as the one who could best explain the issue.

Last Wednesday, Malacañang prevented Favila from appearing in the House Question Hour to shed light on the ZTE contract.

‘Mystery man’’

After vowing to reveal the identity of the “mystery man” in the bribery controversy, the younger De Venecia urged President Arroyo to abandon the project and use the funds intended for it for other more urgent projects like housing and water system.

“I was asked to attend the Senate investigation on Tuesday and I don’t know what to expect there but I’m sure the senators will ask me who this ‘mystery man’ is and I’ll tell them,” De Venecia III told The STAR in a telephone interview.

He said Abalos brought the “influential person” with him apparently to make him accept the $10 million bribe offer.

Abalos is facing investigation in the House of Representatives and the Office of the Ombudsman for allegedly lobbying for the ZTE in exchange for cash and other perks, including sexual favors.

It was alleged that the ZTE deal was overpriced by some $200 million and the difference was meant for bribes. Under the agreement, the government will borrow at least $330 million to fund the ZTE-led broadband project.

“I will just tell the truth before the Senate and hope that something positive comes out of this because I truly believe that this contract is dirty and corrupted,” De Venecia said.

“Our proposal is our investment to the Philippines and zero loan for the government. What’s hard to stomach is the overpricing and kickbacks which the Filipino people will pay for because of the loan,” he said.

He said he believes the President might have been misled by her Cabinet officials in pushing for the ZTE deal. “She will always be my President,” he said.

Senate to fight EO 464

Senate President Manuel Villar Jr. said the Senate would stand its ground against the enforcement of Executive Order 464 which bars Cabinet officials from attending legislative hearings without the president’s approval.

“We stand solidly by the decision of the Supreme Court that it is unconstitutional. We shall defend and fight for the right of the Senate to investigate and summon officials for accountability. This mandate was bestowed on us by the Constitution and there is nothing personal here. We must carry out our sworn duty,” Villar said.

“Under my leadership, the Senate shall be independent and cannot be dictated on,” he stressed.

“Agreements involving a huge amount such as this should have been made public, discussed and scrutinized with the participation of all concerned sectors in the interest of transparency,” he said.

He also chided administration officials for claiming that the broadband documents were stolen in China.

“This deal involves P16 billion and the documents disappear in thin air? Are we not being outrageous?” he asked.

Pro-administration Sen. Miriam Defensor-Santiago said yesterday she is in favor of an investigation of the broadband controversy despite Mrs. Arroyo’s statement that the country should honor its commitment.

“The President theorized that this is already a done deal because she said that we have to honor our contract. My understanding is that there is now a valid and effective contract,” Santiago said.

“If that is the case, this is a monetary matter. It may be that there will be a need for the monetary board to approve it,” she added.

“It appears that they all want the same contract, and that the public is being made to witness a spat along the lines of marital disagreement between movie stars and alleged billionaire playboys. It is not interesting or even amusing,” she said.

“We must be a government that honors contracts and agreements that go through the required processes despite media attacks,” Mrs. Arroyo said on Thursday.

Bugging denied

Abalos meanwhile laughed off allegations of De Venecia that he bugged the AHI official’s phone conversations with ZTE executives.

“All I can say is that it is ridiculous, period. I don’t know what to say anymore… It’s too much. Now he is saying that I am a bugger? That is incredible,” Abalos said.

“Right now, I understand, they (Abalos’ lawyers) are looking to file several counts of libel versus (Joey) de Venecia. I am leaving it to them already,” Abalos said.

“Nevermind my personal case. I have to deal first with the barangay and Sanggunian Kabataan elections. I don’t want to be drawn into something that is unproductive,” Abalos said. The poll chief is set to retire on February 2008.

Meanwhile, ZTE announced yesterday that the volume of GSM products it produced and marketed grew by 300 percent in the first half of the year compared to the same period in 2006.

In a statement, ZTE pointed out that “this remarkable record can be attributed to the company’s continuous efforts to develop new technology innovation and forge strategic partnerships with key telecommunications providers worldwide.”

Early this year, ZTE partnered with Global eNetworks in the United Kingdom. This marked the company’s entry into the European telecoms scene, the statement said.

“Thanks to ZTE’s Softswitch technology, our company will offer a high quality portfolio of telecoms facilities to a wide range of third-party quality resellers,” the firm said quoting Robert Rees, Director of Global eNetworks.

“These facilities will embrace a variety of services that include voice, SMS, content, IP Centrex, advertising and audio-visual conferencing, all of which will be handled by ZTE’s revolutionary technology,” Rees said.

US envoy renews appeal

US Ambassador Kristie Kenney reiterated yesterday her call for transparency in government contracts amid the broadband controversy.

“What we always encourage is transparency when you are looking at business dealings, so that dealings are conducted in an open and transparent manner and they benefit all,” Kenney said when sought for comments on the issue.

Kenney was at the Women’s National Electoral Assembly at the Philippine International Convention Center where President Arroyo was guest of honor.

She declined to speculate on the impact of her letter to former Socio-Economic Planning Secretary Romulo Neri last April 20 expressing the US government’s interest in the NBN project. “My conversations and letters are something that are private,” she said.

In that letter, Kenney asked the Philippine government to “take time to carefully review and consider the multiple expressions of interest that have been submitted, including those involving American companies.” A US company, Arescom Inc., submitted a $130 million proposal for the NBN but its proposal was rejected. Kenney did not mention Arescom in her letter. With Aurea Calica and James Mananghaya

Friday, 14 September 2007

Favila on ZTE deal: Go ask DOTC chief, not me

By Delon Porcalla
Original article at The Philippine Star

After being prevented by Malacañang last Wednesday from facing lawmakers on the questionable broadband project, Trade Secretary Peter Favila attended the House hearing on his department’s budget yesterday where he washed his hands of the controversy and passed the buck on a fellow Cabinet official.

Favila told the House appropriations committee that it was Transportation Secretary Leandro Mendoza who could best explain the questionable $329 million broadband deal involving the ZTE Corp. of China.

“I’m a little bit at a loss here because this is a (Department of Transportation and Communications) project. As I understand, the DOTC is the implementing agency. I’m just as amazed as you are. I honestly don’t understand. That’s why I am looking for answers to it,” Favila told the committee.

“As trade secretary, my responsibility really is to look after the bilateral relations that we have. I asked the Speaker why DTI (Department of Trade and Industry)? And I haven’t received an answer yet to this date. Not that I’m questioning the Speaker but I’m just seeking a clarification,” Favila explained.

Asked by Rep. Rufus Rodriguez of Cagayan de Oro to explain his absence at the Question Hour on Wednesday, Favila said he was willing to attend but was prevented at the last minute by Executive Secretary Eduardo Ermita.

“I think the Speaker is well-informed. And I sent him a reply, which is an indication of my desire to cooperate. Nonetheless, I received an instruction from the executive secretary. As to what reasons I would not know. I will ask him your honor,” he said.

“We asked you to bring a copy of the loan agreement, precisely for transparency. Would you say Malacañang does not want transparency? It’s more of an exploratory request, not an investigation,” Rodriguez said.

But panel chairman Rep. Edcel Lagman reminded Rodriguez that he could ask questions about the ZTE contract only when it is the time for Mendoza, or Ermita to testify.

Marikina Rep. Marcy Teodoro, a member of the administration bloc, said he supports the move of the chamber to conduct an in-depth investigation. “I think this should be investigated because this is a loan.”

Finance Secretary Margarito Teves earlier said that what was signed was not a contract but only a memorandum of understanding.

Honor deal

A day after the Supreme Court (SC) issued a temporary restraining order on the NBN project, President Arroyo maintained the government must honor all legal contracts and agreements.

She issued the statement in her speech at the launching of the Bishops Ulama Conference with the Armed Forces and the Philippine National Police in Malacañang Wednesday night.

She however also said her administration will fully abide by the decision of the courts on “matters of dispute.”

“We live by the rule of law. We abide by what the courts of the land decide. We must be a government that honors contracts and agreements that go through the required processes despite media attacks,” Mrs. Arroyo said adding that “we must be a government that abides by what the courts of the land decide on matters of dispute.”

Asked by reporters after the ceremony to elaborate on her speech, the President said: “As long as the contracts go through the right process, we are required to comply with them.”

Not a contract

As far as former socioeconomic planning secretary Romulo Neri is concerned, the only document that was signed regarding the national broadband network project was a prospective supplier’s agreement.

Neri said that the supplier’s agreement alone could not be implemented as a contract since it still requires the signing of a loan agreement.

“It’s a prospective supplier’s contract I think. I haven’t seen the contract that’s why my impression is that it’s a prospective supplier’s contract,” he said.

Neri pointed out that the usual practice for projects financed by official development assistance loans from institutions such as the World Bank and Asian Development Bank is that a loan agreement should come before the supplier’s agreement.

However, he said that it is not unusual for the Department of Finance to do it the other way around, particularly when it involves Chinese funding.

“In our case, normally when we do it with the World Bank and the ADB, we sign the loan agreement first before any supplier’s agreement is done. Opposite sila (It’s the opposite with them),” Neri said.

“Apparently Finance does that because China normally requires a supplier’s contract before they process any loan agreement,” he added.

Neri, who was recently moved to the Commission on Higher Education, recalled that what was brought before the NEDA was the NBN project proposal only.

Neri said that he does not know what the TRO is for since there is no contract to implement yet.

“I haven’t seen the TRO yet. I understand it stops the implementation. There’s no contract to implement yet because the contract is not yet effective,” he added.

Lawyer Oliver Lozano filed yesterday a supplemental impeachment complaint against Commission on Elections Chairman Benjamin Abalos for alleged influence peddling in connection with his reported brokering for ZTE.

The three page complaint which was sent to the offices of opposition Rep, Carlos Padilla and Sorsogon Rep Jose Solis cited news articles on the allegations by a son and namesake of Speaker Jose de Vencia Jr. regarding attempts by Abalos to bribe him with $10 million to back out of the competition for the broadband project. – With Paolo Romero, Marvin Sy, Perseus Echeminada

Wednesday, 12 September 2007

Global OFW deployment reaches 1M, remittances US$ 14B

Original article at Gov.Ph News

MANILA, Sept. 12 (PNA) -- The Department of Labor and Employment (DOLE) on Wednesday said that the global deployment of overseas Filipino workers (OFWs) is expected to reach and breach the one-million mark, while total OFW remittances are expected to approach the 14 billion US dollars level by December this year.

Labor and Employment Secretary Arturo D. Brion said that as of mid-year 2007, OFW deployment had already breached the 0.5 million mark in more than 190 destinations worldwide.

At this growth rate, the labor chief expressed confidence that the total deployment figures will reach if not surmount the one million level worldwide this year.

Based on the latest report of the Philippine Overseas Employment Administration (POEA), Brion said that global OFW deployment had reached 725,999 as of August 31, 2007, representing more than two-thirds (72.6 percent) of the total one-million global OFW deployment goal in 2007.

Brion earlier indicated that from January to July this year, the deployment of OFWs in the new hire category increased in several host destinations, including Canada, Italy, Cyprus, New Zealand, and New Caledonia due to the demand for Filipino skilled workers in their industries.

He said the percentage of Filipino professional and technical workers went up by two percentage points to 14.4 percent in the first half of 2007 from 12.4 percent in the same period in 2006, with high end skills accounting for more than two-thirds (73 percent) of the total new hires.

Meanwhile, the rehires increased by 2.5 percent to 361,655 from January 1 to August 31, 2007, compared to 352,908 in the same period last year.

In addition, the total contracts per worker processed by POEA for overseas Filipino seafarers have expanded by 15.9 percent to 279,922 from 241,522 during the same period.

In the meantime, the Labor Secretary cited a report of the Bangko Sentral ng Pilipinas that global OFW remittances have reached a record seven billion dollars in the first six months of 2007, which is 18.1 percent above the level recorded in the same period last year.

As the trend sustains, Brion said total global OFW remittances may well approach and breach 14 billion dollars in 2007, noting the BSP's report that the 1.1 billion dollars remitted in June this year "marks the 14th straight month that OFW remittances have sustained at more than one billion dollars monthly."

Amidst the development, he bared that major banks in the Philippines have now joined hands to develop a distinct and more affordable global remittance system benefiting the OFWs in linkage with the Department of Labor and Employment, particularly its newly established National Reintegration Center for OFWs (NRCO).

"I laud BSP for ensuring global remittance services, in effect making it more convenient and efficient for OFWs to remit their earnings," Brion said, adding that the synergy between the NRCO and banking institutions will boost reintegration of the country's modern day heroes to the economic mainstream on their return. (PNA)

How Joey de Venecia discovered overprice

By Jarius Bondoc
Original article at The Philippine Star

Recounting events of Dec. 2006, Joey de Venecia says Comelec chief Ben Abalos at first tried to buy him out of the NBN bidding for $10 million. When he turned him down, Abalos allegedly changed tack and strived to make it look like they were partners. There was the tete-a-tete that Abalos called at his office in Intramuros, Manila, for DOTC Assistant Sec. Lorenzo Formoso to witness. And there was the meeting with ZTE Corp. bigwigs in China on Dec. 27 where Abalos stressed he was with the son of the Speaker, so they better come across with the promised commissions.

It was during that Shenzhen meeting when Joey confirmed to himself that kickbacks were to be paid. Earlier, though, he discovered how much.

Abalos has refused to talk about Joey’s revelations and denies any link to the $330-million (P16-billion) ZTE deal. My requests for live talk-radio interviews the past several Saturdays have been turned down. All three of us reportedly will be summoned to the Senate to tell all we know.

Joey was reluctant to join that Shenzhen meeting. Not only was it smack in the middle of the Christmas holidays. He also was worried where Abalos’ lobbying for ZTE would take him, given the $10-million bribe offer. At that time, Joey’s Amsterdam Holdings Inc. already had made an offer to DOTC to undertake the NBN on its own, no cost or risk or loan to the government, for $240 million. All AHI wanted in return was for government to subscribe to half of its built capacity, but at 25-percent lower than other telcos.

Abalos said he wanted to introduce Joey to ZTE execs. Joey replied that he already knew them as suppliers of his Broadband Philippines Inc. Abalos insisted that Joey join him even for just one day at Kempinski Hotel near ZTE headquarters in Shenzhen’s Nanshan district. Remembering his reelectionist dad’s instructions to be nice to the old man, Joey relented.

Before seeing the ZTE top guns, Joey was ushered into Abalos’ suite. There he was shown ZTE’s proposed equipment supplies, with a notional price of $262 million. Joey was surprised that, for such huge amount, ZTE’s telecom backbone would cover only 30-40 percent of the country. His AHI budget of $240 million, arrived at with the help of ZTE managers in Manila, was for 80-percent coverage.

Joey faxed what he now calls “the Abalos design” to his technical men in Manila. Under instructions to confer with George Zhu Ling, ZTE’s Philippine country manager, the technologists reported back their findings. Based on the specified supplies, ZTE’s real price should only be half of $262 million, or about $130-$132 million.

Incidentally, a third competitor, Arescom Inc. of California, earlier had offered to sell the same telecom system as ZTE’s for only $135 million. Last week Filipino telco executives, studying DOTC’s claims in newspaper ads, said they easily could supply the same system for only a third of ZTE’s final contract price of $330 million. In short, basic prices from different sources are about the same.

Joey pointed out the price discrepancy to Abalos. He recalls the latter telling him that if they partner in the deal, AHI should mimic the ZTE rate, then cover the off-book commission of $130 million or so. It would be easy, Joey recalls being cajoled into accepting, “my law firm will fix the papers.” Yeah, right, and I go to jail for money laundering, he said to himself.

The matter was left hanging. ZTE vice president Yu Yong and project chief Fan Yan had arrived and were waiting for them downstairs. Joey, Abalos and four cronies of the latter proceeded to the meeting room. There Abalos allegedly pounded his fist on the table to stress the need to release the money because top Filipino officials and “the party” were waiting.

So from Joey’s recollection, there was overpricing of $130-132 million in the original ZTE price of $262 million in Dec. 2006. But why did the figure rise further to $330 million by the time it was signed by DOTC Sec. Leandro Mendoza and Yu Yong on Apr. 21? The answer perhaps lies with then-NEDA Sec. Romy Neri.

In broadcast interviews, Neri has said that Abalos did bring the ZTE brass to him to discuss the NBN project. But he would neither confirm nor deny being offered P200 million to approve it. Will he neither confirm nor deny too that a big businessman stepped in sometime Feb. and Apr. 2007 to include another $70-million overprice — this time for a political party? That tycoon reportedly is responsible for Neri’s yanking out of the NEDA.

The total overprice runs up to $200 million (P10 billion). Sen. Panfilo Lacson says part of it already has been paid out. No wonder the huge sums going to nasty PR operators nowadays, including P200,000 apiece to defend the deal and P300,000 to malign the critics.

* * *

It was supposed to be held last Monday till today at the Wack Wack Golf and Country Club on the behest of Abalos, a former president. But the three-day summit of electoral reformists and Comelec officials has been postponed indefinitely. No date or venue has been reset for a long-delayed assessment of the May 2007 midterm election and discussion of loopholes in election laws.

NAIA 3 repair, opening now on track

Original article at The Manila Times

The Manila International Airport Authority (MIAA) is on track in meeting its target opening of the Ninoy Aquino International Airport Terminal 3 following successful negotiations with Japanese contractor Takenaka Corp.

MIAA and Takenaka may be able to sign the construction work agreement in the next two months, owing to Takenaka’s full cooperation with the remaining work that need be done at NAIA 3.

Based on its projection, the MIAA said the soft opening of NAIA 3 will be in the first quarter of 2008 and the full opening will be in the first half of next year.

Robert Uy, MIAA head executive assistant, noted that Takenaka representatives were positive and responsive in the current negotiations unlike previously reported where they refused to accept responsibility of the structural defects that were discovered by MIAA’s consultants.

Takenaka’s participation in the NAIA 3 is crucial as it holds the codes of the different systems of the terminal.

Four groups have been formed to thresh out details of the NAIA 3 issue: structural integrity, testing and commissioning, construction work agreement, and oversight committee.

The government is planning to repair all the defects by December in preparation for the soft opening.

The opening of NAIA 3 has been postponed several times due to legal and structural issues.

The government took over the facility in December 2004 through an expropriation case filed by the government against the Philippine International Air Terminals Co. Inc. (Piatco). The case is still pending with Branch 117 of the Pasay Regional Trial Court.

The NAIA 3 Commission has yet to start its assessment of the real value of the NAIA 3 property owing to an objection of the MIAA to the appointment of DG Jones as appraiser.

DG Jones will help the commission in determining the just compensation that will be paid by the government to Piatco.

The firm earlier submitted a fee of $1.9 million for the assessment but agreed to lower it by at least 20 percent. No final amount has been announced.

The World Bank’s International Center for Settlement of Investment Disputes dismissed last August 16 the case filed by Fraport in October 2003 against the Philippines to claim its investment of $425 million in Piatco.

Tuesday, 11 September 2007

Int'l finance group sees RP GDP jumping 7% in '07

Full report at GMANews.TV

Institute of International Finance Inc., an international association of financial institutions, expects the Philippine economy as measured by the gross domestic product to expand seven percent this year.

In a study entitled Outlook Update Philippines dated September 10, IIF said the country's GDP would also jump 7.5 percent in 2008.

Morales supports Teves on plans to overhaul the BOC

Original article at Gov.Ph News

MANILA (PNA) -- Bureau of Customs Commissioner Napoleon Morales has supported the plan of Finance Secretary Gary Teves to revive previous proposals to overhaul the revenue collection agencies of the government, namely, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC).

Morales agrees with Teves that if the BOC is exempted from the salary standardization of the government, the bureau will be able to perform better by giving its employees and personnel attractive compensation and retirement packages.

“If we treat and reward our men better, they will perform better,” he said.

The BOC chief said that in other countries, customs’ yearly budgetary allotment is a percentage of the targeted revenue collections for the year, giving the agency more funds to operate and give incentives to its personnel to hit goals.

But in the Philippines, the budget of the BoC is only one-half percent of the P228 billion target set for this year.

“Our budget is only 1.2 billion this year, 900 million goes to salaries and wages and the remaining 300 million goes to utilities and operational expenses. We do not have money to improve facilities and regularly train and evaluate our people. We have to rely on international grants for this,” Morales said.

“If this will push through, we can truly achieve two of the five-point agenda I defined when I took office as commissioner, namely, to professionalize customs personnel and improve and develop the quality of corporate life in the BOC,” he added. (PNA)

Statement of Cabinet Secretary Ricardo Saludo: DOTC explains broadband project to Cabinet

Original report at Gov.Ph News

After the Cabinet meeting today, Transportation and Communications Secretary Leandro Mendoza reviewed with several secretaries the key aspects of the National Broadband Network (NBN) project.

Secretary Mendoza showed how the project would save the government more than P3 billion a year. The annual cost will be P990 million when repayments begin on the proposed 20-year, 3 percent interest rate concessional loan to fund the project, after five years' grace period.

On the other hand, DOTC explained, the NBN system would provide telecom services now costing P4 billion yearly for national agencies alone, plus billions more for local governments, government corporations, community e-centers, and other state entities down to the poorest municipalities.

The NBN system will have 300 WiMAX wireless broadband stations to serve 25,800 offices nationwide. These facilities are several times larger than the systems proposed by competing suppliers.

Secretary Mendoza also recounted the procurement process:
- DOTC/CICT review of rival proposals for more than a year.
- NEDA Board approval of project proposal.
- Advice from the Government Procurement Policy Board that NBN is covered by executive agreement (EA) with no public bidding.
- China's designation of ZTE, a state telecom firm, as supplier under the agreement.
- Department of Justice opinion that the contract was indeed covered by EA.

Secretary Mendoza added that the ZTE contract still awaits Department of Budget and Management (DBM) commitment to allocate funds for loan payments (forward obligation authority), and a loan agreement with China's Export-Import Bank yet to be negotiated by the Department of Finance.

The DOTC head noted that cases relating to NBN are now in the Supreme Court and the Ombudsman, where testimony and other evidence on legal and governance issues may be filed. He supports the President's longstanding policy of upholding transparency, integrity, the government and the public interest, and the inviolability of valid contracts in all government transactions.

Supreme Court issues TRO vs $329-M ZTE broadband deal

Original report at GMANews.TV

The Supreme Court en banc has issued a temporary restraining order (TRO) against the implementation of the controversial $329-million national broadband contract between the Philippines and Chinese firm ZTE Corp.

In a four-page resolution, the high bench ruled that, "Acting on the instant petition, without giving due course to the petition, to issue a TRO, effective immediately and continuing until further orders from this Court."

It also prevented "respondents and any of and all persons acting on their behalf from 'pursuing, entering into indebtedness, disbursing funds and implementing the ZTE-DOTC (Department of Transportation and Communication) broadband deal and project.'"

Magistrates sided with the TRO request of Iloilo Vice Gov. Rolex Suplico asking to declare the ZTE contract as "unconstitutional."

This request was consolidated with the petition lodged by rival firm Amsterdam Holdings Inc (AMI), which was founded by Jose "Joey" de Venecia III. Joey is the son of House Speaker Jose De Venecia Jr.

The high bench did not act on Suplico's plea to set oral arguments.

It also granted the request of ZTE lawyers for 20 more days or until September 28 to comment on Suplico's petition. ZTE tapped the services of the Angara Abello Concepcion Regala and Cruz Law Offices for its legal concerns in the Philippines.

In his taxpayer's suit, Suplico chided the government for "entering into indebtedness, disbursing funds for, and implementing the deal without competitive, transparent and public bidding."

"The terms of the contract in question, insofar as it obliges the government to incur a foreign loan in the amount of $330 million runs afoul of constitutional and statutory proscriptions on incurring public debt and contracting and/or guaranteeing foreign loans," he said.

Suplico insisted that the contract violated Section 20, Article 7 of the Constitution which requires the government to gain the consensus of Bangko Sentral's Monetary Board before entering into sovereign loans.

Aside from allegedly failing to go through a public bidding, Suplico said the contract was in violation of the Telecoms Policy Act mandating the government to privatize all its telecoms facilities.

The Department of Justice (DOJ) previously gave its conditional approval to the deal. President Gloria Macapagal Arroyo signed the broadband deal last April 20 in Hainan, China.

DOTC officials earlier claimed that they lost the contract at a hotel room in China. They have maintained that there are no copies of the deal.

Elections Chair Benjamin Abalos has received flak after being pampered by ZTE officials, something which he described as a courtesy mutually accorded by "golfing buddies."

Abalos claimed that he merely pointed ZTE executives to Philippine officials while the agreement was forged.

Senator Panfilo Lacson had claimed receiving information that the contract was padded by $198 million because of kickbacks that went to an elections official, as well as a "Big One" and a "Little One."

In Congress, the Department of Science and Technology (DOST) told the House appropriations committee that the government never consulted them about the broadband deal even if the matter was within the agency's expertise.

Worse, DOST Secretary Estrella Alabastro said the government allegedly ignored her office's proposal to source the project funding from foreign-assisted Official Development Assistance (ODA) funds, but the National Economic Development Authority (NEDA) allegedly failed to take action on this.

The $329 million needed to bankroll the national broadband network project will be acquired through a 20-year loan.

Under the reported contract terms, the amount will be payable in 15 years with a 3-percent annual interest and a five-year grace period.

Trade and Industry Secretary Peter Favila as well as DOTC Secretary Leandro Mendoza are being eyed by congressmen to shed light on the controversy.

Parañaque Rep. Roilo Golez warned the two Cabinet officials from invoking their rights to self-incrimination to skirt questions from congressmen.

"It will be politically fatal [for them and the government] if they invoke their right against
self-incrimination. And if they don't show up it will not be good for the administration. It would appear that they are trying to hide something," Golez said.

For his part, House Minority Leader Ronaldo Zamora found the DOTC's excuse that the documents were lost to be unbelievable.

"It is clear that the contract is now being changed. They are trying to suit the contract to respond to various claims. It shouldn't take all this long just to reconstitute this contract," he said. - GMANews.TV

Foreign investments rise 16%

By M. E. I. Calderon
Full report at the BusinessWorld Online

NET FOREIGN direct investments (FDIs) into the Philippines jumped 16% in the first half of the year, underpinned by the country’s improving macroeconomic fundamentals, the Bangko Sentral ng Pilipinas (BSP) said in a statement yesterday.

FDI net inflows for the January-to-June period hit $1.2 billion, compared to last year’s $1.05 billion, already exceeding the central bank’s forecast of $1.08 billion for 2007.

"The macroeconomic gains realized in the first semester, such as the strong external payments position, decelerating inflation, and the robust second-quarter GDP (gross domestic product) growth are expected to provide more confidence-boosting support to the country’s investment landscape," the statement quoted BSP Gov. Amando M. Tetangco, Jr. as saying.

Teves to revive bid to overhaul BIR and BOC

By Iris C. Gonzales
Full article at The Philippine Star

Finance Secretary Margarito Teves will revive previous proposals to overhaul the government’s two main revenue agencies, the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), with the end goal of making them more efficient.

Teves said he wants to professionalize the BIR and the BOC by giving them more room to hire more competent workers.

“The idea is for the BIR and the BOC to move out of the Salary Standardization Law,” Teves said.

This way, the salaries offered by the BIR and the BOC would be higher or at par with those offered by the private sector.

Teves said there was a need to develop a highly professional agency by giving employees a more attractive package.

“The intention is to make the agencies more professional,” Teves told reporters. He believes that more competent and professional people will be more attracted into joining the two organizations.

“This is just an idea. There is nothing definite yet,” he said as he conceded that there will be resistance from BIR and BOC employees.

Republic Act 6758 or the Salary Standardization Law, sets a uniform salary rate for all government employees but some state-owned corporations and financial institutions including the Bangko Sentral ng Pilipinas (BSP) are exempt from this rule.

The BIR has roughly 11,000 employees while the BOC has around 4,000 employees.

The legal dimensions of a scandalous contract (II)

By Josefina T. Lichauco Former DOTC secretary
Original article at The Philippine Star
Tuesday, September 11, 2007


II. Violations of standard procedures: a) The creation of a “Legal Monster” has resulted from the use of the term “Executive Agreement” to justify the failure to observe the provisions of our Philippine Procurement Act which requires a public bidding. Calling it first a “g to g” contract, short for “government to government” contract, was an unfortunate, if not stupid mistake. I have never come across this terminology at the UP College of Law or the Yale Law School. “Government to government” most likely is a descriptive phrase for the NBN/ZTE contract that was entered into between a government agency (DOTC) on one side, and ZTE Corporation on the other. Remember I still do not have a copy of the contract and am just relying on news reports and the remarks of DOTC Assec Lorenzo Formoso who happens to be the official who speaks out for the DOTC in defense of the NBN project.

“G to g” metamorphosed into an “Executive Agreement” when an Opinion was officially requested from the Department of Justice (DOJ), and the latter issued the requested statement that indeed the NBN contract was an Executive Agreement hence, exempt from public bidding requirements.

b) This is precisely the moment when the “Legal Monster” was born. A country like China, therefore, who is overflowing with foreign exchange reserves, approximately US$1.3 trillion, desirous of unloading some of her reserves, looks for naïve states, offering a product at a certain price with a supposedly concessional loan, and succeeds in seducing the victim–state. Putting the label of an Executive Agreement over the transaction and you’ve got a naive state seduced and in fact transfixed, so that no downward negotiation of the price happens, in fact, if we are to believe the reports, since this transaction started with a much lower price, the negotiation was indeed an upward one. The price, as reports go, is US$329 Million or Php16 billion. This is what the monster looks like right now.

It is important to have a public bidding because this was, plain and simple, a supply contract.

According to Prof. Harry Roque of the UP College of Law, who is also director of the UP Institute of Legal Studies of the UP Law Center, whose expertise in both Public and Private International Law I respect, an Executive Agreement is, in simple terms, a “written agreement between two sovereign states governed by International Law.” The only difference, he says, between an Executive Agreement and a Treaty is that the latter has to be confirmed by the Senate. This is fundamental in International Law.

Was the NBN/ZTE contract an agreement between two sovereign states? Of public knowledge is the fact that Mrs. Arroyo flew from the sickbed of an ailing husband to witness the signing of what DOTC itself called a “contract” that however was “stolen” soon after it was signed. Absolutely no copies were available, computer copies or any copies whatsoever, even though it was later announced that the contract had been “re-constituted and re-signed.”

The signatories were DOTC Secretary Leandro Mendoza and a mere Vice-president of ZTE, not even a senior vice-president. There certainly was a breach of protocol here. China’s Head of State was visibly absent. And, this absence, after the Philippine Head of State flew to China coming back the same day. Isn’t this not only a breach of protocol but an insult to the dignity of our country? This is what we now call an Executive Agreement exempt from the public bidding rules of our country, tied not only to Chinese technology, meaning, Chinese supplier-companies, but tied to a specific contractor, the now infamous ZTE Corporation, and, which is worse, stuck to a specific price tag which never got the opportunity to be negotiated downwards at all.

c) Isn’t this a very callous and inhumane manner of tying the Filipino people to a debt of Php16 billion? The 3% rate of interest, in my experience, is not a concessional rate to rejoice over. The JBIC (Japan Bank for International Cooperation) gives loans at much lower rates. The 20-year repayment period with a 5-year grace period is no big deal. This is standard for concessional loans.

Why did we even bother to get excited over such a deal? Were there side attractions? Is this what this legal monster has done to us, our children, and our children’s children?

d) What about the loan agreement announced as signed, but copies of which were not made available to the citizenry, a violation of a specific constitutional provision, with attendant criminal and civil sanctions? If this loan agreement, as was the case in the Northrail project and other Chinese-funded projects, then, Chinese law is the governing law. Since we do not have copies of it and the substance of the agreement, not having been published, all kinds of conjectures abound.

When the DOTC published a full-page advertisement upholding the sanctity of the NBN/ZTE contract, they used the Abaya v. Ebdane case as one of their legal bases to justify their contention that the ZTE contract was an Executive Agreement. Firstly the Abaya case is still under a Motion for Reconsideration and cannot be a judicial precedent. There is still no “res judicata” on it. For all intents, the case is still pending.

Furthermore, the Supreme Court has changed its mind in the past. The Court will have to balance good governance, bearing in mind that the national interest is involved in such exemptions from public bidding for ODA (Overseas Development Assistance) contracts, as well as the requirements of transparency and accountability in government, against our obligations under International Law, especially where International Law is seemingly being used to avoid domestic laws. And of course, let us not forget the violation mentioned in Part 1, and which is section 20, Article VII of the Constitution and which provides: “The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board and subject to such limitations as may be provided by law.”

Where is the concurrence of the Monetary Board? I still contend that the sequential order of events is being arranged, in order to give way to the validity of the Loan Agreement and the supply contract with ZTE. It could be, that this prior approval is necessary before the element of validity can be claimed by both the Loan Agreement and the supply contract, both already announced as signed by the DOTC. Where is it indeed? What dates will all these documents bear when they are all released to the public?

e) The extremely hasty procedure undertaken by the DOTC/CICT (Commission on Information and Communications Technology) is shown by the fact that there were no TORs (Terms of Reference) and no Pre-feasibility and Feasibility studies undertaken, and this should not be one done by the contractor. In accomplishing the so-called “Scope of Work”, a preliminary detailed engineering study is usually undertaken especially for an infrastructure project of this magnitude. In my 19 years with the DOTC, I have never seen such a speedy study/approval/signing process which characterized the NBN/ZTE project. In order to avoid cost overruns, these actions/processes have to be undertaken.

f) If the intent of the DOTC and the CICT is to harness the provisions of their charter EO 269, dated 12 January 2004, as legal bases for the project, there is absolutely no provision they will be able to obtain which even remotely provides for the CICT to implement the massive broadband network project which the resigned chair of the CICT had first undertaken to implement. Under Section 14, Powers and Functions of EO 269, par.(d) is the only paragraph where the gruesome misconception could have happened, so that the originator of this sinful project, completely mindless of existing laws, RA 7925 the fundamental law governing telecom development, and RA 8792 the E Commerce Act, both providing for private sector investments to be utilized in the development, expansion and upgrade of networks. There is no way anyone could have misconstrued or misinterpreted the very specific provisions of the law.

On the 26th of March 2007, at a speech before Singaporean and Filipino businessmen Mrs. Arroyo was quoted as saying before the Singapore-Philippine Business Council: “We want to be a first-world country like Singapore in 20 years… there is something else that Singapore is famous for and that is its high standard of transparency in government. This is another thing we have to emulate.”

ZTE’s Mr. Zhang said: “There is complete transparency in this project.” We, the citizenry are shocked.


Secretary Leandro Mendoza will have a lot of explaining to do.

Monday, 10 September 2007

NBN: On whose side is Lacson?

GMA News reported today that "opposition Sen. Panfilo Lacson on Monday said the Philippine may find itself in a bind if it scraps the deal it signed with ZTE Corp. of China.

Lacson said that aside from the Philippine government's failure to earmark funds in the national budget for the broadband deal, it needs ZTE's consent to scrap the deal.

"That's the bind the government is in. How do you turn your back on a signed contract? And I still don't understand how the DOTC could declare the contract as lost," he said.

Lacson also questioned the government's claim it can still scrap the deal, noting that no less than President Arroyo flew all the way to Hainan province to witness it.

Even though an agreement on the loan project has yet to be inked, Lacson said the deal was virtually done, signed before no less than the Philippine president.

Under such circumstances, he said it is not possible for the Philippine government to turn its back on a deal without the consent of the other party.

"The fact is, there's already an agreement between two parties. The agreement as the contract would suggest had been signed by [Transportation and Communications Secretary Leandro] Mendoza representing the Philippine government, and on the other side, the vice president of ZTE ... And if you recall, no less than President Arroyo flew to Hainan to witness the signing ceremony," he said.

"The government cannot say it will not push through with the project because it has become too controversial. Now that the President apparently has already issued a directive to review or get the recommendation of the Cabinet to review the contract, it still entails the permission of the other party. The government cannot just say it will scrap the contract because it cannot stand the controversy," he said.


With this recent statement it's hard to figure out which side Lacson is on. Is he for the contract or is he against it? Why the sudden switch from "no" to "hold it"? Interesting twist in the plot. Hmmmm.....

Net Foreign Equity Capital Inflows More than Twice at US$1.6 Billion in First Half of 2007

Bangko Sentral
Media Release

Net foreign equity capital during the first semester more than doubled to US$1.6 billion from only US$781 million during the same period in 2006. 1 Gross equity capital placements which aggregated US$1.7 billion were infused mainly in manufacturing (electronics, health and chemical products), services (international courier, information technology development), construction, mining, real estate, financial intermediation, and agricultural industries. Bulk of the investments came from the U.S., Japan, Singapore and South Korea.

Meanwhile, repayments by local subsidiaries of their intercompany loans to their mother companies led to the reversal in the other capital account to a net outflow of US$372 million during the six-month period. Other capital account consists primarily of intercompany borrowing/lending between foreign direct investors and their subsidiaries/affiliates in the Philippines. On the other hand, the reinvested earnings account, though minimal, remained in surplus at US$20 million in the first half of 2007.

Despite the repayment of intercompany loans, the cumulative six-month net foreign direct investments (FDI) posted a net inflow of US$1.2 billion. The first semester FDI net inflows were higher by 16.0 percent compared to the same period in 2006.

The macroeconomic gains realized in the first semester, such as the strong external payments position, decelerating inflation, and the robust second quarter GDP growth are expected to provide more confidence-boosting support to the country’s investment landscape.


[1] Reflects adjustment after audit; net equity capital outflow in May 2007 was revised downward by US$261 million to reflect reclassification of outflow from non-residents’ withdrawal of equity capital to residents’ investments abroad.

Intl visitors to RP up by 11 pct

Original report at ABS-CBN News

International visitor arrivals to the Philippines soared 11.6 percent in July 2007 from a year ago, as foreign tourists looked beyond the security headlines to enjoy the country's magnificent spots, the Department of Tourism (DOT) said Monday.

Data from the Tourism Research and Statistics Division show that foreign visitor arrivals hit a record of 281,032 in July 2007, compared to 251,884 during the same month last year. It was also higher than 250,227 arrivals registered in June.

"There was no single month this year that arrivals fell below 200,000 this year," said Tourism Secretary Joseph Ace Durano. "This is a milestone year for the tourism industry."

The double-digit increase in arrivals from Korea, China, Hong Kong, India, France, Germany, Denmark, Finland, and Sweden led the overall growth in July and offset the decline in arrivals from Japan and slower growth in arrivals from the United States.

In the first seven months of 2007, total volume of visitor arrivals hit 1.81 million, up by 8.2 percent from 1.672 million arrivals during the same period in 2006. The DOT said it hopes to attract at least 3 million visitors this year, in line with its medium-term target of 5 million visitors by 2010.

Topping the sources of tourists in the Philippines during the seven-month period were Korea, with 375,010 visitors on a 16.7 percent growth and the United States with 362,896 on a 1.8 percent increase from a year earlier.

The increase in arrivals was achieved this year despite the different security concerns such as the kidnapping of Italian priest Giancarlo Bossi, the bombings in central and western parts of Mindanao, and escalation of hostilities between government troops and Islamic rebels in the island provinces of Sulu and Basilan in Mindanao.

"So far, in my sales missions abroad this year, I have not been asked about security issues a single time. What they asked is where are new hotels opening," Durano said.

Jose Clemente III, president of the Philippine Travel Agencies Association, confirmed this, saying the business is good this year, although this is being limited by lack of new hotels and tourism infrastructure, which may affect the government's goal of drawing in five million tourists by 2010.

The tourism department expects tourism receipts to top $2.9 billion or P133 billion this year, on the back of a 20.1 percent annual growth in average tourism expenditure.

Durano said private businesses continue to benefit from this growth as the amount goes directly to the hotels, restaurants, spas and resorts, souvenir shops, entertainment and transportation services, which are the front liners of the tourism sector.

Local firm asks Supreme Court to open ZTE deal papers

Original report at ABS-CBN News

Filipino firm Amsterdam Holdings, Inc. on Monday asked the Supreme Court to order the Department of Transportation and Communications to open access to and provide copies of the contract and other documents related to the controversial $330-million National Broadband Network (NBN) project.

The company also asked the high tribunal to issue a preliminary injunction against the DOTC and other government agencies involved in the project to stop them from entering into any agreement or engaging in any activity for the implementation of the NBN until the legality of the entire contract is determined.

In a petition for mandamus to be filed by AHI president Nathaniel Sauz and other AHI officials, the company sought full access to the contract and other documents related to the project in line with the 1987 Constitution’s provision on the right to information of every citizen.

“Pursuant to Article VIII, Section 5 (1) of the Constitution, to remedy the continuing injury to petitioner AHI and, more importantly, to uphold the people’s constitutional right to information, petitioners respectfully beseech this Honorable Court to make a determination on whether or not respondents are justified in withholding information regarding the multi-million dollar NBN Project,” AHI said in its petition.

It asked the Supreme Court to “to allow herein petitioners access to all agreements entered into with the Government of China, ZTE Corporation, and/or other entities, government instrumentalities, and/or individuals with regard to the National Broadband Network project.”

AHI complained to the High Tribunal that despite a formal request for a copy of the contract in letters to DOTC Secretary Leandro Mendoza and Assistant Secretary Lorenzo Formoso last Aug. 2, 2007, the DOTC has not complied nor replied to their request.

The Filipino firm insisted it should have won the contract as it submitted the first complete unsolicited proposal for the project and offered to build the NBN at no cost to the government, unlike ZTE’s which required the Philippine government securing a $330-million loan from the Chinese government.

“Despite having been initially entertained by the DOTC, CICT, as well as by the National Economic Development Authority, AHI was eventually shut out from the NBN project,” AHI complained.

Under the Build-Operate-Transfer (BOT) Law, the DOTC should have acted on AHI’s unsolicited proposal and subjected it to a “Swiss challenge” instead of being junked in favor of the government-to-government proposal of ZTE.

AHI told the High Tribunal it considers its proposal for the NBN project superior over the ZTE contract and a third offer by an American firm because the government will not spend a single centavo for the broadband network. Aside from this, AHI would give the government a by 25 percent discount for broadband services compared to the rates offered by private telcos.

In comparison, the Philippines would be indebted to China by $330 million under the ZTE contract. An offer by American firm Arescom, Inc. also would be financed by a soft loan from the US government under its official development assistance (ODA) program.

RP, China agree to resolve ZTE case

By Paolo Romero
Full article at The Philippine Star

SYDNEY (via PLDT) - The political ramifications of the controversial $330-million national broadband network (NBN) contract have prompted President Arroyo to discuss the deal with her Chinese counterpart to resolve the issue, Press Secretary Ignacio Bunye said here yesterday.

Bunye said Mrs. Arroyo took the opportunity to discuss the terms of the deal during her 30-minute bilateral talks with Chinese President Hu Jintao at the Hotel Sofitel yesterday, where she raised the possibility of reviewing the NBN deal to resolve the issues surrounding the contract with Chinese firm ZTE Corp.

“She (Mrs. Arroyo) suggested that Trade and Industry Secretary Peter Favila and China Commerce Minister Bo Xilai work together to resolve the issue,” Bunye said.

Bunye did not reveal details of the discussion, saying only that both leaders had agreed their governments should work together.

“She assured President Hu that she would discuss the (NBN) matter further with her Cabinet,” Bunye said.

Bunye said Hu had agreed with Mrs. Arroyo’s suggestion.

The inclusion of the NBN deal in the agenda of the two leaders’ talks highlighted the sensitivity and magnitude of the controversy surrounding the ZTE contract.

Mrs. Arroyo’s Cabinet officials noted the adverse implications of the contract which prompted them to review and make a recommendation whether to push through or drop the deal.

Sunday, 9 September 2007

PGMA to mining firms: Income from mines must trickle down to host communities

Original report at Gov.Ph News

SYDNEY-- - President Gloria Macapagal-Arroyo said on Saturday that the economic progress derived from mining activities must trickle down to the host communities.

Environment and Natural Resources Secretary Lito Atienza said this was the advice of the President to Australian mining giant BHP Biliton and other mining firms operating in the Philippines.

Mining enterprises must “engage the local community more” to avoid problems in their areas of operation, specifically with local groups,” the President said during her meeting with BHP Biliton chief executive officer (CEO) Chip Goodyear at the Four Seasons Hotel in Sydney.

The President also said mining concerns must “settle their problems with their partners.”

“We welcome mining investments. We welcome mining firms that give due concern to the environment and to the community,” Atienza quoted the President as saying.

“I think the Australian issue is not much about the environment. It’s really more of the community,” the President said, according to Atienza.

BHP Billiton is developing four nickel exploration sites in the Philippines, including a potential $1.8 billion project in the mineral-rich southern island of Mindanao.

The mining firm has been encountering some problems with disgruntled local groups opposed to its nickel mining plans.

Atienza said he came to Sydney with the President to have bilateral meetings with Australian mining companies.

He added that he would be advising local companies on how to deal with mounting opposition to Australian mining projects across the Philippines.

Australian and New Zealand firms are estimated to account for an estimated one-fourth of the investments in the Philippines’s booming mining industry.

The Arroyo administration has identified the minerals industry as one of the engine of growths considering the immense natural endowments of the country.

The Philippines is the fifth mineralized nation in the world, the third richest in gold, fourth in copper, fifth in nickel and sixth in chromite.

The President has always batted for sustainable mining activities in the country, the former Manila mayor said.

Atienza said that this year alone, investments in mining could reach as much as $600 million and $10-$11 billion in 2010-2011.