Saturday, 26 January 2008

Two presidential wannabes on the economy

Villar, Gordon press for infrastructure buildup
By Fel. V. Maragay
Original report at The Manila Standard

SENATE President Manuel Villar and Senator Richard Gordon said yesterday that the country should be steadfast in strengthening its economy even as they expressed the belief that it can withstand the current global financial and market turmoil, fueled by fears of a looming recession in the United States.

Villar, a businessman who made a fortune from the real estate industry, also called on the administration to build more infrastructure and spur economic growth.

Villar said Filipinos, instead of panicking, should look into the business environment of the Philippines and neighboring countries in Asia, that have maintained the pace of robust economic growth.

“I think we are on a steady course. And last year, most of the countries in Asia posted healthy economic growth. And we hope this trend will continue. But if it [the projected US recession] will hit Asia, then that will include us,” he told a radio interview.

Villar pointed out that while the United States is still the Philippines’ biggest trading partner, the country is not as heavily as dependent as before on the US having expanded its economic relations with China, Europe, Japan and other countries.

“We are gradually weaning our economy away from the US,” he said.

Gordon said the Philippines has “newfound strengths” that are sufficient to overcome the feared recession in the United States. He cited, for instance, the contributions to the economy of the Filipino overseas workers who, according to the estimation of the Bangko Sentral, remitted a record $14 billion of their income to the country last year.

He also noted that the country’s total exports reached $47.4 billion last year. He underscored the need to take advantage of opportunities to diversify and increase its trade with the Association of Southeast Asian Nations, East Asia, and other parts of the world. He said the Senate should not dilly-dally in ratifying the Japan-Philippines Economic Partnership Agreement that will remove the tariff on more products exported to Japan.

“The thing to do now is accelerate the completion of financial and capital market reforms still on the table so that new savings and hedging instruments will emerge that will be to the best advantage of Filipino workers overseas, while channeling those savings to productive investments. This is urgent given the continuing strengthening of the peso against the US dollars,” Gordon said.

Stressing the importance of enhancing the country’s competitiveness in a global economy, he urged Malacañang and Congress to jointly address the perennial investors’ complaint of high cost of electricity in the country.

“If there is going to be a review of the tax system, it has to start with the tax on electricity,” Gordon said in the light of the current move in Congress to exempt power from the coverage of the expanded value added tax.

But he branded the proposal to suspend the 12-percent VAT on petroleum products “ludicrous.”

Meanwhile, Villar urged the government to engage in massive infrastructure spending as a “firewall” to stop the “US contagion” from downing Philippine business.

“But whether America is in recession or not, the government should go on a construction spree to perk up the economy and lay down the infrastructure foundation of economic expansion,” he said.

President renews call on Myanmar to return to the path of democracy


DAVOS, Switzerland (via PLDT) -- President Gloria Macapagal-Arroyo said Friday Myanmar should return to the path of democracy by freeing freedom fighter Aung San Suu Kyi as part of its commitment when it signed the Association of Southeast Asian Nations (ASEAN) Charter in Singapore last year.

The President asserted this in her opening statement during the high-level plenary session of the 2008 World Economic Forum (WEF) tackling the role of ASEAN as an emerging Asian community.

In her four-minute speech, the President said that ASEAN is well aware of the Philippine position on the need for political reforms in Myanmar, stressing that the Philippine Senate would not ratify the ASEAN Charter unless Myanmar returns to the path of democracy.

During the signing of the ASEAN Charter by the 10 leaders in Singapore last year, the President noted that by signing the Charter, Myanmar had committed itself to democratic reforms and should start by releasing Aung San Suu Kyi.

"Not only are we committed to seeing political reforms in Myanmar. Our Senate will not ratify the ASEAN Charter, unless they see real political reforms take place in Myanmar. So we must work together to make the tough choices to make ASEAN to reel and Aung San Suu Kyi free," the President said.

ASEAN is composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Citigroup chair congratulates PGMA on RP's great economy


The chairman of Citigroup and Citibank has renewed his company’s commitment to work with the Philippines in the power sector and in privatization efforts as he congratulated President Gloria Macapagal-Arroyo and her economic team for the Philippines’ “great economy.”

This was revealed by Press Secretary Ignacio R. Bunye who furnished media with the highlights of the courtesy call of Citigroup/Citibank Chair William “Bill” Rhodes on President Arroyo at the Casa Bracke Klosters in Davos, Switzerland last Jan. 24.

Rhodes “congratulated the President and her team for the great economy, and noted that everything has gone better than projected,” said Bunye.

The Citigroup chair – who “renewed commitment to work with the Philippines in, among others, the power sector and in privatization efforts” – also promised the President, thus: “I will be happy to continue in helping the Philippines in the IBA (International Board of Advisors).”

Bunye said Rhodes discussed the ongoing slowdown in the US economy and is bullish on the Philippines’ chances of weathering the impact.

“Everyone is very positive about the Philippines -- the peso is at an all time high, and the President and her economic team have turned everything around,” enthused Rhodes who, however, warned about repercussions of what is happening in the United States.

“… We all need to be cautious in the next six months. Systemic risks, price stability, crisis prevention -- all of these come into focus,” advised Rhodes who pointed out that “the (US) credit markets are not yet back where they need to be, so there is uncertainty and turmoil…”

“One of the things we should be looking at is the possible global repercussion from what is happening in the US economy. The real question is not whether it is recession or just slow growth. The markets have to work through all these, plus the slowing US market will have a ripple effect,” surmised Rhodes.

For her part, President Arroyo, an economist, told the Citibank chair that she is well aware of the situation: “We realize the uncertainty of the situation, and the need to play our cards right. But knowing the danger and doing the right thing are two different things…”

“We are happy to be coming in from a strong position, but we still need to play our cards right,” the President stressed.

Still on the US economic slowdown, Rhodes said, “we are looking at a challenging situation over the next six months, not just for the US economy but worldwide.”

But Rhodes enthused, thus: “The Philippines is going into the crisis in very good shape. I think that the slowdown will only be for a couple of quarters, maximum three quarters… Everything I see about RP indicates that you are in best position to go into the crisis,” Rhodes further enthused.

President Arroyo created the International Board of Advisors (IBA) in 2001 to seek their views on her economic programs. It is composed of chief executive officers and noted businessmen from top international corporations.

Friday, 25 January 2008

PGMA to the Swiss Asian Chamber

President Gloria Macapagal-Arroyo’s speech during the Swiss Asian Chamber
"A Path to Permanent Economic Growth and Stability: Creating a New Philippines"
Wednesday, January 23, 2008
Savoy Hotel/Baur au Lac, Zurich, Switzerland

Thank you Mr. Zuellig. I’m glad you’re the one who introduced me because your family’s investments in the Philippines is one of the proofs that the Philippines is worth investing and staying in. Thank you.

Mr. Keller; Mr. Crusler(?); members of the Swiss Asian Chamber; Secretary Romulo; Secretary Favila; other officials of the Philippine government; ladies and gentlemen.

I thank the Swiss Asian Chamber for your warm reception and hospitality on this winter day and I thank each and every one of you for taking time out to join us today. I also want to thank those of you who visited the Philippines last year.

This meeting is timely because it‘s taking place during a period of great uncertainty for the global economy.

This is an especially crucial time for world leaders in business and government to band together to turn the challenges we face today into opportunities, challenges from the issue of climate change to volatility in the world markets and the rise of Asia against these uncertainties. So I’m glad that there is a Swiss Asian Chamber.

And within Asia, the Philippines offers a strategic location in this, our very fast-growing region of Southeast Asia. Our workforce is well educated, productive and English speaking, and we are cutting red tape to simplify the requirements for investment. In the midst of world uncertainties, we remain a competitive location for a wide range of manufacturing and high-end services.

The Philippines is on a path to permanent economic growth and stability. We have created seven million new jobs in seven years. We have achieved 28 consecutive quarters of economic growth even when many of our neighbors experienced negative growth or even recession at some time or another of the last seven years. In fact, our economy, which rose 7.1 percent in the first three quarters of 2007, is experiencing its fastest growth in more than a decade.

The Philippine economy grew faster than the rest of Southeast Asia, despite oil price volatility and a global economic slowdown. Our international reserves are also at record levels. We have a balance of payments surplus, a low inflation rate and low interest rates.

Business and investor confidence is on the rise, the peso is one of the world’s best performing currencies, and our stock market has reached historic heights. Our budget is under control and we are raising unprecedented amounts of revenue.

The Philippines offers one of the best values in Asia for investment.

Over the last seven years, our administration and our people have aimed high. We have met the challenge of economic and fiscal reform. Seven years ago, expanding the taxpayer base, strengthening the peso and attracting foreign investment were our biggest challenges. To some, our goals of balancing the budget, lowering debt levels and raising employment seemed ambitious at best. Seven years down the road, our unwavering commitment to installing the necessary reforms to move our nation forward has allowed us to make important progress on all these fronts.

In the midst of world uncertainties, it helps that we have one of the best and most awarded central banks in the world, which has helped the Philippines achieve a stable macroeconomic environment that is making us much more resilient to external volatility. We are vigilant that our efforts should not be derailed by the sub-prime crisis and the subsequent credit crunch. We count on the Central Bank governor and his team, who operate independently, to continue to ensure stable macroeconomic fundamentals to support our robust economic growth during a time of continued global economic volatility.

Foreign investment in the Philippines has grown more than five-fold from 2003 to 2007. This surge of investments has been anchored by billion dollar plus investments by several major international companies, including Texas Instruments, which chose the Philippines over other locations including China for its $1.6 billion wafer fabrication plant, Korea’s Hanjin which is putting up two shipyards for $3.7 billion, making us the fourth largest shipbuilder in the world; Marubeni, Tokyo Electric and America’s AES which have put in billions in our electric power industry, and Mittal Global which has conveyed to me their plans for putting up a $1.6 billion integrated steel mill in Mindanao. Significant new investments are being made across the board in a number of industries, especially mining, technology, energy, tourism, business process outsourcing and infrastructure, are also creating significant investment opportunities for both domestic and international investors alike.

The Philippines is ranked among the most attractive off-shoring destinations in the world because of cost competitiveness and more importantly our country’s highly trainable, English-proficient, IT-enabled quality manpower. Our outsourcing sector has the potential to grow 40 percent per year from 2007 until 2010, which would put in on track to double its global market share in three years. This rate of growth also means revenues from the outsourcing sector would grow four-fold from the current level of $1.3 billion, and employment would triple to 900,000 jobs.

The government and private sector work together to develop talent to support the rising demand for quality workers in outsourcing and expand outsourcing capabilities to new locations across the country beyond the centers of Manila and Cebu to tap larger talent pools.

Some of the joint initiatives include training, funding for education, and creating awareness of career opportunities to attract more graduates to pursue jobs in the outsourcing sector. The government and the private sector also work together to reassess current tertiary and secondary education curricula to respond to the emerging needs of the market. To develop next wave cities, the government is developing IT hubs in Clark, Dumaguete and Iloilo to encourage greater levels of outsourcing investment in these locations.

In recent years, the outsourcing sector has expanded beyond call centers and IT to include a range of professional and business processes including accounting, human resources, financial analysis, design engineering, animation, medical services, legal services, insurance processes, banking processes, map making, publishing, content creation, and research.

We are certainly a leader in the outsourcing space, but we cannot underestimate the contribution of other high growth sectors to our economy: manufacturing, technology, mining, energy, tourism, and infrastructure.

Our strongest competitive advantage – our people – is also opening doors for us in medical tourism. The Philippines is recognized internationally for the uniquely Filipino brand of hospitality, care and compassion that makes us a competitive player in this sector. In fact, recently, the European Chamber of Commerce and Industry together with the American, Japanese and Korean Chambers of Commerce have endorsed our strengths in this area by forming a coalition to promote the Philippines as a health care destination for foreigners.

Mining is a key driver of our economy and an important sector that is bringing in significant levels of investment, creating jobs for the people and spurring exports.

The world’s biggest players from Australia, America, China and Japan have already been flocking to our country to invest and to conduct exploration.

Last year, investments have grown more than the last three years combined.

Mining will grow into a US$10 billion industry by 2010.

Our economy is booming, but like so many places in rich and poor nations alike, we must fight to close the gap in income inequality. There is no justification in this time and place in history that government policies should be tilted to maintaining the status quo that ensures the domination of the many by the few. And while I am fighting for social justice, I am fighting even harder for economic justice, for a strong economy is the best weapon for the liberation of the poor and oppressed.

We are now focused on further raising our competitiveness to sustain our momentum. For the first time in decades, less of our revenue is being used to service debt and more resources are being directed towards investment in human and physical infrastructure including education, health care and training as well as new bridges, roads and ports. Hopefully this will attract more investment, including Swiss investment.

We take pride in the discipline of our administration to focus on the economy and our overall economic health. Our economy is performing at an all-time high in every aspect. We are in a stronger position than ever to instill permanent economic change in our country and to work together to ensure we achieve long-term prosperity for many generations to come. There is no better time for investors to take advantage of the many opportunities crated by our strengthening economy.

World's top business leaders cite PGMA for excellent handling of RP economy


DAVOS, Switzerland (via PLDT) -- President Gloria Macapagal-Arroyo's handling of the Philippine economy, which is experiencing its fastest growth in more than a decade, is nothing short of phenomenal.

This was the consensus of the 11 members of her International Board of Advisors (IBA) who met with the President in Zurich before she proceeded to Davos to attend the annual meeting of the World Economic Forum (WEF).

Presidential Adviser for International Competitiveness Roberto Romulo, who attended the Zurich meeting on Wednesday, said the President decided way back in 2001 to create the IBA composed of chief executive officers (CEOs) and noted businessmen from top international corporations to seek their views and make comments on her economic programs.

During the meeting, Romulo said the advisors, including Zuellig Pharmaceuticals Chairman Dr. Stephen Zuellig and other key international players from various industries, freely expressed their views on the President's handling of the country’s economy.

According to Romulo, the advisors congratulated the President for her sound economic programs and praised the Bangko Sentral ng Pilipinas (BSP) for its excellent handling of the country's monetary policies.

Romulo said the advisors expressed concern over a possible revenue shortfall but Finance Secretary Margarito Teves, who also attended the meeting, explained that any shortfall could be offset by earnings from the government's ongoing privatization program.

The advisors also said that the Philippines is well on its way towards achieving a strong economy but expressed concern if the President's programs can be sustained even beyond her term in 2010.

Romulo said the President expressed confidence that her programs, particularly in infrastructure and education sector, are strongly in place and the Philippines would continue to reap the benefits of these investments regardless of who succeeds her in 2010.

Moody's investors upgrades Philippines credit outlook from stable to positive


DAVOS, Switzerland (via PLDT)- President Gloria Macapagal-Arroyo could not do but smile when Reuters senior reporter Steve Clark told her that international ratings agency Moody's Investors has upgraded the country's credit outlook because of her sound economic fundamentals.

This was the President's simple reaction as no one knows but probably an economist that her sound and sometime stringent economic reform measures would eventually pay dividends in the end.

"There has been a ratings upgrade from Moody's today and there is the good news for you," Clark said.

The President was among the world personalities interviewed live by Clark at 7:30 a.m. today (Swiss time) over the official television channel of the ongoing 2008 World Economic Forum here.

In newspapers today, Moody's senior vice president Tom Byrne announced that it raised the country's credit rating outlook from stable to positive because of the Philippines' stabilized public sector finances and lesser dependence on foreign money.

"Improved macroeconomic conditions and fiscal performance are mutually reinforcing each other. Low inflation has anchored inflationary expectations, despite upward pressure from high international food and oil prices," Byrne said in a statement.

The Philippines’ strong macroeconomic fundamentals resulted to a stronger peso and low domestic interest rates that have lowered debt service payments, allowing the government to invest in much needed infrastructure projects, Byrne said.

"The government has not masked inflation by subsidizing retail petroleum prices, thereby avoiding contingent fiscal liabilities and adding pressure on the balance of payments by encouraging higher oil imports," said Byrne.

The ratings agency also warned some of Filipino senators against their move to suspend the value-added tax on oil products as a stop-gap measure to cushion the impact of the high prices of oil in the world market.

Byrne said such a move would deprive the government from raising the much-needed revenues from the implementation of tax reforms.

PGMA renews call for advancement of Doha Round of Trade Talks


DAVOS, Switzerland (via PLDT)—President Gloria Macapagal-Arroyo renewed her call for the advancement of the World Trade Organization (WTO) Doha Round of Talks in a meeting here on Thursday with Ms. Susan Schwab, the US Permanent Trade Representative to the WTO.

Philippine Trade and Industry Secretary Peter Favila said that in the meeting held at the Casa Bracke in the ski resort of Davos, the US sought the Philippines' commitment "to have an ambitious outcome of the Doha Talks."

"The President did say that she is not changing her position. In fact, she has called upon her colleagues in the ASEAN (Association of Southeast Asian Nations) to get this moving forward," Favila said.

The Philippines is included in the G-33, a grouping of developing countries that coordinate trade and economic issues pertinent to negotiations within the WTO.

During the Philippines' chairmanship of the 12th ASEAN Summit in Cebu in 2006, the ASEAN leaders approved the President's proposal for a stand-alone statement that reinforces the region's commitment to the Doha Round of Talks calling for a fair and liberal global trade
and offers a tangible means to reduce poverty globally, particularly in the ASEAN region.

However, negotiations continue to hang in the air as industrialized countries refused to cut down on their subsidies, particularly to their farming sectors.

Developing countries have been asking the developed nations to remove their agricultural subsidies to level the playing field that have resulted in trade distortions and made their products artificially cheaper.

The President has a scheduled meeting here with WTO Director General Pascal Lamy to push for the conclusion of an agreement to reduce these subsidies to provide increased market access to developing countries such as the Philippines.

When front page articles turn into gossip columns

Saludo raps daily on 'false headlines'

Cabinet Secretary Ricardo Saludo cautioned the public today to be “wary of occasional but prominent distortions” in the headlines of the Philippine Daily Inquirer.

In a statement, Saludo slammed the PDI for distorting his statement Thursday on media coverage of conflict situations such as the Manila Peninsula Hotel siege by renegade soldiers.

In a frontpage report headlined: “Now Malacanang accuses media of conducting trial by publicity vs PNP,” the PDI reported that Malacanang had “turned the tables on the media and accused journalists of conducting a ‘trial by publicity’ against the Philippine National Police.”

“Cabinet Secretary Ricardo L. Saludo slammed journalists for finding fault in the PNP’s move to justify a tough stand on media reporting on coups and other crisis situations,” the PDI report said.

In his statement today, Saludo retorted that as it “did recently with Education Secretary Jesli Lapus, the PDI has wrongly attributed a statement to Cabinet Secretary Ricardo Saludo.”

Saludo pointed out that contrary to the PDI headline story, he “never ‘accused media of conducting trial vs PNP’ or ‘slammed journalists for finding fault in the PNP’s move to justify a tough stance on media reporting on coups and other crisis situations.”

He asserted that nowhere in his Thursday statement was there any mention “of journalists’ misgivings over the PNP’s position on the coverage of crisis events. The only reference to ‘trial by publicity’ is regarding ‘charges of unlawful acts during the uprising,’ not media criticism of the PNP.”

Saludo added that, in fact, he had “urged that any suspected offenses, like the alleged help given to an escaped rebel soldier, be subjected to due process, as media have also advocated.”

He said that like him, Lapus was also a victim of misreporting in the Jan. 3 frontpage story of the PDI which was “wrongly titled ’DepEd chief: RP education has sunk to its lowest level.’”

Lapus wrote the PDI to deny the false report and set the record straight but the newspaper did not print the denial.

“In the interest of truth and fairness, readers should be wary of occasional but prominent distortions in Inquirer headlines,” Saludo said.

Philippines scraps helicopter deal after probe

Reporting by Manny Mogato; Editing by Carmel Crimmins

MANILA, Jan 25 (Reuters) - The Philippines halted the award of a 1.2 billion peso ($29 million) helicopter supply contract to a local partner of Boeing Co's McDonnell Douglas after an inquiry showed irregularities in the bidding procedures.

Defence Undersecretary Ariston delos Reyes said on Friday that they would re-tender for six night-capable attack helicopters after an inquiry found "serious flaws" in an earlier tender in September 2007.

"The bidding process was not properly observed," delos Reyes told a news conference at the army's main base in Manila, adding the contract was awarded to a supplier whose product failed to meet the basic technical requirements.

Asian Aerospace Corp., a local partner of McDonnell Douglas, won the bidding with an offer to sell MD530F attack helicopters.

Another bidder, Poland's state-owned PZL-Swidnik S.A., had protested the bidding procedures, saying the MD530F fell short of the technical requirements of 3,000 kg payload. The U.S.-made aircraft only has a payload of 1,500 kg.

Poland was offering to supply the Philippines its advanced version of the Russian-made Mi2 Plus attack helicopters, known as Kania (Kitty Hawk), a NATO-certified aircraft.

A third bidder, Italy's Agusta-Westland was disqualified because it could not guarantee to deliver the aircraft within a 12-month period.

Delos Reyes said a separate inquiry to determine the liability of some officials involved in the bidding process was ongoing.

He said there was an attempt to change the aircraft's technical specifications during the tender.
"The alteration of the specs (specifications) happened in the preparations of the bidding documents, this is the responsibility of the bids and award committee," he added.

The Philippines opened the bidding in September 2007 as part of its plan to acquire new helicopters and step up efforts to defeat communist rebels and Islamic militants.

Arroyo has given the military about 7 billion pesos to upgrade its fleet of Vietnam-era aircraft, part of a long-term 210 billion peso-modernisation plan to catch up with better-quipped neighbours in Southeast Asia.

Currently, the Philippines has 85 UH-1H and 22 MD520 attack helicopters, but only about half of them are in flying condition. Most of the aircraft were donated by the United States as part of its military aid.

GSIS investing $5B in global, local instruments

Cheryl Arcibal
Original report at GMANews.TV

State-run pension fund Government Service Insurance System on Friday announced that it will be investing a total of $5 billion in fixed income, equities and properties here and abroad.

GSIS president and general manager Winston Garcia, also told reporters that the pension fund is initially investing $1 billion this year in global markets, and another $1 billion locally.

The investment will be split in half between fixed income and equities and properties.

“The GSIS is looking for some strategic investments locally after disposing of our San Miguel shares worth about P14 billion," Garcia said at the sidelines of the Investment Management Agreement signing between GSIS, Credit Agricole Asset Management and ING Investment Management.

Despite the volatlity in the global markets, Garcia said the GSIS thinks it is wise to grab the opportunity when everything is “starting very low."

Indians flocking to RP flying schools on ‘boom’ forecast

By Recto Mercene
Original article at The Business Mirror

INDIA, the second economic powerhouse in Asia after China, is preparing itself for a forecast boom in its airline industry by sending 21,000 would-be pilots to learn from other countries, and in the Philippines about 1,000 of them are already learning how to fly.

This was gathered by BusinessMirror from an interview with Ronie Briones, a senior aviation-safety officer of the Air Transportation Office, which issues certificates to qualified pilots, air carriers, airline operators and chartered airline companies.

He said there are also other foreigners learning to fly here but most of them are from India; the rest are from Nepal, Pakistan, Sudan, Saudi Arabia, Malaysia, Korea, Japan and China.

The Indians are enrolled in 39 flying schools, 19 of them in the National Capital Region. The rest are scattered in Cebu, Clark, Dumaguete and Zamboanga, where the student- pilot starts by flying the single-seater Cessna 150, Piper Tomahawk or the four-seater Cessna 172.

Aeroflight, one of the flying schools near Villamor Air Base, has about 300 Indian students enrolled and one of them, Manish Pratap Singh, a 20-year-old from Uttar Pradesh, said of the 1,000 Indian students in the Philippines, about 50 to 60 are women.

He said 21,000 fellow Indians are learning how to fly in such places as the United States, Canada, Australia, and New Zealand besides the Philippines.

“This is a very competitive profession. There is a potential need of about 3,000 to 4,000 pilots in the near future but five times of that are enrolled in flying schools all over the world,” said Singh.

Abhimanyu Talwar, another 20-year-old trainee from New Delhi, is enrolled at the Flight and Simulator Training School with a dozen other fellow Indians. He chose to come to the Philippines rather than the US or Australia because it takes less time to graduate here.

“The flying hours required [in the US or Australia] are the same to be a licensed private pilot but I can finish the course here in six months, while it would take me more than a year if I take the same lessons in Australia or New Zealand,” he says.

He pays about P7,000 per hour of flying and would have spent about P2.3 million by the time he has logged about 40 hours to get his private pilot license.

In India, he says that the government requires he should have accumulated 1,500 flying hours before he gets accepted by the airline companies.

According to Briones, many foreigners choose the Philippines over other countries because they can easily get student visas or special student permits.

Nikhil Mittal, 19, from New Delhi, said he finds it easy to study in the Philippines because of the proficiency of the Filipinos in English. He also said it would take him two years to get his license in India because of the lack of training planes and flight instructors.

He is confident of making it as a commercial airline pilot, saying there are 10 or 12 airline companies in his country, Air India being the biggest.

Mittal, whose father is in the pharmaceutical business, said many fellow Indians are taking to the air, lured by a high salary that averages at about $12,500 (P512,500) a month.

Most of the students interviewed by the BusinessMirror agree Philippine flying schools have high standards with very proficient instructors. Mittal said “the quality is better than India.”

On studying in neighboring Asean countries, Singh said it is difficult to enroll in Bangkok because a would-be pilot needs to be a Thai citizen, while Malaysia enforces a different law when it comes to foreign students wanting to fly there.

Maynard Halili, owner of flying school Airwork, said these Indian students mostly come from well-to-do families, or are sponsored by an Indian company.

Ironically, his school has no Indian student because they accept only corporate or helicopter pilots for advanced training, one of the few schools catering to the “high-class” status.

Briones said he found the Indian student first rate in passing a grueling examination that encompass rules of the air, navigation, weight-and-balance, meteorology, civil air rules, and search and rescue.

There is a separate test on powerplants, which is about aircraft engines.

UPDATE 3-Kuwait firms plan $10 bln Philippines investments

By Ulf Laessing

KUWAIT, Jan 15 (Reuters) - Kuwaiti firms including logistics provider Agility plan to invest more than $10 billion in infrastructure projects in the Philippines, the company leading the group said on Tuesday.

The firms and one non-Kuwaiti company plan to develop airports, ports, railways, power stations and telecommunications, Kuwait investment firm Al-Abraj Holding Co said in a statement.

The deal is pending a signing with the Philippine government expected at the World Economic Forum in Davos, Switzerland, later this month, Abraj Deputy Chairman Sameer Nasser Ali Hussein told Reuters.

The Philippines government has said it wants to invest 1.7 trillion pesos ($41 billion) in its power, water, telecommunications and transport industries by 2010. Last year, it offered 10 infrastructure projects worth $2 billion to foreign investors.


Gulf Arab states and companies, buoyed by record oil prices, have been looking to invest more in Asia, where economies are growing faster than in Europe and the United States, traditional destinations for their surplus funds.

Qatar's $60 billion sovereign wealth fund, the Qatar Investment Authority, said last month it plans to spend at least $850 million in Indonesia, its biggest commitment to the country.

Kuwait's Abraj said the group would set up a holding company in Europe, of which the Kuwaiti partners would own 75 percent and British firm Argon, acting on behalf of Philippine authorities, 25 percent. This could change a little, Hussein said.

He said Abraj wanted to raise the money possibly through an initial public offering, while Philippine institutions would also contribute to the project.

Kuwaiti partners include International Leasing & Investment and al-Mal Investment Co, Abraj said.

Agility said negotiations were continuing. "A big part of this project would come to Agility," Hussein said.

The biggest investment from the Middle East in the Philippines is a 40 percent stake held by state-owned Saudi Aramco in Petron Corp, the largest oil refiner in the country. (Additional reporting by Manila newsroom; Editing by Louise Ireland, Paul Bolding)

LRT-MRT loop construction to start in May

By Rainier Allan Ronda
Original report at The Philippine Star

Actual construction work on the P6.3-billion Light Rail Transit-Metro Rail Transit (LRT-MRT) loop project could start as early as this May, the LRT Authority (LRTA) said yesterday.

LRTA administrator Melquiades Robles said they have already wrapped up the pre-qualification of groups that will join the public bidding for the contract.

The rail agency had successfully conducted the pre-qualification of bidders for the project’s Package C, with the joint venture of DMCI and First Balfour being the lone pre-qualified bidder last Wednesday.

The DMCI-First Balfour joint venture was also the lone prequalified bidder for the project’s Package A1.

For Package A2, the pre-qualified bidders are DMCI-First Balfour joint venture, F.F. Cruz-Filsystems joint venture, and the Cavite Ideal International Resources group.

For Package B, the pre-qualified bidders are DMCI-First Balfour, and the F.F. Cruz-Filsystems joint venture.

Robles said the bidding proper for Package A1 was set on March 19, Package A2 on March 20, Package B on March 21 and Package C on April 1.

After the bidding, Robles said that construction work on Package A1, A2, and B could start by May and work on Package C could start by June.

The project’s Package A involves the foundation and viaduct construction component and Package B involves the station construction. Package C involves the electro-mechanical components of the rail line extension project.

The LRTA seeks to complete the LRT-LRT loop project – which will connect LRT Line 1 at its Monumento Avenue end-station in Caloocan City with the MRT at its end station in North Avenue, Quezon City through the construction of three stations along EDSA – by April 2010.

Thursday, 24 January 2008

RP Sustains Growth in 2007, Best Macro Fundamentals in 30 Years

Bangko Sentral
Media Releases

The growth momentum of the Philippine economy in 2007 was sustained on the strength of solid macroeconomic fundamentals, the best in 30 years, which were realized through prudent macroeconomic policies and continued structural reform efforts. Broad-based economic expansion was achieved in a low inflation environment. Inflation averaged 2.8 percent in 2007, well below the 4.0-5.0 percent target range for the year and the lowest annual average in 21 years. The country generated a robust external surplus position of US$8.6 billion in 2007 on the back of sustained inflows of remittances from overseas Filipinos and higher capital inflows. This contributed to the firmness of the peso, which averaged P46.15 per US dollar in 2007, and provided the BSP the opportunity to build up its international reserves, which reached a historic level of US$33.7 billion as of end-December 2007.

The health of the banking system continued to improve with key performance indicators reflecting its overall soundness. Bank lending expanded, while asset quality improved significantly with the banking system’s average non-performing loan (NPL) ratio declining to 5.3 percent as of October 2007. Moreover, banks remained adequately capitalized with average capital adequacy ratio of 19.3 percent as of end-June 2007, which was above the statutory level set by the BSP at 10.0 percent and the Bank for International Settlements’ (BIS) standard of 8.0 percent.

To allow freer and more efficient cross-border movement of foreign exchange, the BSP implemented two waves of reforms in its foreign exchange regulatory framework during the year, first in April, followed by a second wave of liberalization in December. The first phase of reforms was geared towards providing markets greater access to foreign exchange for outward investments and over-the-counter transactions. Meanwhile, the second phase of liberalization aimed at promoting greater integration with international capital markets and risk diversification supportive of an expanding economy with global linkages and at streamlining the documentation and reporting requirements on the sale of foreign exchange by banks.

The BSP continued to pursue its major advocacies in the areas of export promotion, microfinance, small and medium enterprises and financial literacy and other information programs in 2007. More specifically, to assist the export sector, the BSP contributed P50 million to the Export Promotion Fund (EPF) of the Export Development Council’s (EDC). The EPF is envisaged as a public-private sector partnership, which will focus on capacity building projects, to help promote the sustained growth and competitiveness of the export sector. The BSP also organized symposiums for exporters on hedging and the different hedging products offered by banks. Cognizant of the significant economic contribution of remittances to the country, the BSP carried out initiatives to improve the overseas Filipinos’ remittance environment. During the year, the BSP launched the OFW web portal which links web pages on remittance products and services, network, and service fees/charges of participating banks. Transparency in bank charges enables overseas Filipinos to shop for cheaper and better service providers. At the same time, this encourages greater competition among remittance agents and promotes lower remittance fees and charges. Moreover, the BSP in coordination with other institutional partners continued to conduct the financial learning campaign to promote a culture of savings and investments among OFWs and their families by informing them of alternative opportunities for the utilization of remittances, e.g., savings/investments in financial instruments, or savings in small- and micro-business ventures.

The BSP’s policy thrust over the medium term will remain rooted on its twin mandates of maintaining price stability and fostering a sound banking system. Monetary policy will continue to aim at addressing potential risks to inflation to ensure stable prices conducive to sustained economic growth. Inflation is expected to be within the 4.0 percent + 1.0 percentage point target for 2008. The BSP will also continue to push for the implementation of vital financial sector reforms needed to maintain a strong banking system and develop a vibrant capital market that would be able to respond to the emerging challenges of growing global integration.

RP-China trade volume surges to record high $30.62B in 2007

By Veronica Uy

MANILA, Philippines -- The trade volume between the Philippines and China in 2007 surged to a record high of $30.62 billion (or about P1.3 trillion), an increase of almost ten-fold from $3.14 billion in 2000, the Chinese embassy here said Thursday.

Chen Hong Ying, counselor for the economic and commercial section of the Chinese embassy in Manila who provided the Chinese customs data, called this bilateral trade growth in 2007 "phenomenal."

He said the 2007 trade volume surpassed the $30 billion goal for 2010 that was set in 2005 when Chinese leader Hu Jingtao visited the Philippines.

The Chinese embassy official said the average annual increase in bilateral trade between the two countries is a high of at least 35 percent.

"Since the start of the 21st century, the vigorous growth trend [between the two countries] is very prominent … By year 2006, [the trade volume] hit $23.41 billion or 360 times as much as that of 1975 when the two nations established diplomatic relations," Chen said.

The Chinese embassy official said the increasing trade volume between the Philippines and China "strongly indicates the huge development potential of bilateral trade."

Chen said the Philippines is China's 19th biggest trading partner, and fourth among the ASEAN countries. (Other ASEAN countries include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, and Vietnam.)

On the other hand, Chen said that China is now the third biggest trading partner of the Philippines, and the first if Philippine trade with Hong Kong and Taiwan are included.

Chen attributes the consistent trade growth to "the continuous strengthening of the friendly bilateral relationship. The frequent exchange of high-level visits by the leaders of both countries has greatly promoted the comprehensive cooperation between two sides in every field. The leaders of both countries have spoken highly of the bilateral relationship entering a golden age."

Chinese Premier Wen Jiabao has visited the Philippines, while President Gloria Macapagal-Arroyo has visited China four times in one year. Chen said Arroyo's four-time visit to China "breaks the record ever made by a leader in visiting a specific country."

The Chinese embassy official said that from 2000 to 2007, the balance of trade between the Philippines and China has always been in favor of the Philippines, increasing from $220 million in 2000 to $15.62 billion in 2007.

Chen said Chinese exports to the Philippines consist of electronic products, textiles and clothing, steel, and light industrial products, among others. On the other hand, he said Philippine exports to China consists 80 percent electronic products.

"The trade complement between two sides needs to be enhanced," he said.

PAGCOR sees 1M jobs, 10M tourists for $10-20B project in next 5 years

By Jenniffer B. Austria
Original report at The Manila Standard

State-owned gaming firm Philippine Amusement and Gaming Corp. is finalizing the issuance of gaming licenses to two foreign operators that have expressed plans to put up casinos within the 800-hectare Pagcor City in Pasay City.

Pagcor chairman Ephraim Genuino told reporters that the issuance of the licenses would coincide with planned launching of the Pagcor City in the second quarter of the year.

Genuino declined to identify the two foreign companies but said they were among the biggest casino operators in the world.

Genuino earlier said several investors from Japan, United States, South Korea and Europe had expressed strong interest in investing in the entertainment complex.

He earlier identified the Loutraki group, one of the biggest casino operators in Europe, as one of the casino operators interested in setting up operations on the reclaimed Pagcor property in Manila Bay.

Genuino said only 5 percent of the total property would be devoted to casinos. He said a big chunk of the property would be geared for other developments such as themed park, hotels, wellness center, retirement village, residential condominiums, office developments and commercial centers.

Genuino cited that Japanese investors were interested in developing a retirement village within the area to cater to the rapidly expanding retiree market.

The project, which is estimated to cost between $10 billion and $20 billion, will be developed in three phases.

The first phase involves the construction of a hotel casino, a theme park and a casino. Projects under the phase one will be completed over the next two years.

The second phase involves the establishment of residential condominiums, resort and additional hotels and casinos while the third state covers the construction of service hospitals, retirement village and wellness center.

With the completion of Pagcor City, Genuino expects tourist arrival in the country to reach 10 million over five years. Some one million jobs will also be created from the development of the project.

Pagcor City will help the Philippines catch up with Macau, Asia’s casino capital, and Singapore, which recently allowed the two casinos.

Pagcor in 2006 registered an income of P25 billion from casino operations, almost up 10 percent from P23 billion in 2005.

Kuwait Cos To Build In Philippines; Set Up $10B Fund-Report

Original report at Zawya

BEIRUT, 15 January (Zawya Dow Jones)--A consortium of Kuwaiti companies led by Al Abraj Holding CoAl Abraj Holding Co, Al Abraj Holding Company has signed a contract for mega development projects in the Philippines and for setting up a $10 billion investment portfolio to fund these projects, Kuwait-based al Qabas daily reported Tuesday.

The consortium, which includes Agility, Al Mal Investment Co and International Leasing & Investment Co, will develop projects in Philippine's Batangas Province in partnership with the U.K.-based firm Aragon [Argon?], the paper reported.

The projects include the construction of an international airport, an international port, railways, oil storage facilities, and an electric power station in addition to residential areas.

To implement these projects the developers will set up a joint venture which will be 75%-owned by the Kuwaiti side and 25% by Aragon [Argon?], the paper reported.

President to meet with Aragon group in Davos

Original report at Gov.Ph News

ZURICH, Switzerland (via PLDT)—In a move to advance the country's energy independence program, President Gloria Macapagal-Arroyo will meet with the officials of the Aragon Financial Group (AFG) Wednesday afternoon in Davos, her first activity in the ski resort city after arriving Tuesday night at the Zurich International Airport from Manila.

The President is scheduled to meet with the Aragon Group executives at 5:15 p.m. Wednesday (Swiss time, 12:15 a.m. Thursday in Manila) at the Casa Bracke in Klosters, Davos.

The financial group is assisting oil and natural gas companies that need funding from financial partners such as private investors, venture capital, equity and institutional and banking sources.

The AFG has available funding for natural gas projects in the United States and is currently looking for clients with existing operations that require funding through build-operate-transfer (BOT) scheme, debt finance, equity refinance and even merger.

The financial group could help the government in its policy to ensure continuous and adequate supply of energy through integrated and intensive exploration, production, management and development of the country's indigenous energy resources such as oil and natural gas.

The natural gas industry in the Philippines began with the operation of the Malampaya gas-to-power project in offshore Palawan that now has three gas-fired power plants with a capacity of some 2,760 megawatts.

However, this output is insufficient to advance the government's program to utilize natural gas for cheaper public transport operation costs.

Also, the country still needs to explore and develop more energy sources to lessen its dependence on imported and expensive fossil fuel.

Under Executive Order No. 473 that was signed by the President in November 2005, the Department of Energy (DOE) has been tasked to pursue the immediate exploration, development and production of crude oil from the Camago-Malampaya reservoir.

Under E.O. 473, the Philippine National Oil Company (PNOC) that manages the Malampaya operations, or its designated subsidiary, was likewise directed to engage the participation of third parties, if necessary, in the exploration, development and production of crude oil in the country.

After her meeting with the Aragon Group officials, the President will also entertain a courtesy call of the executives of the Dredging International NV, a Dutch-based company that has more than 100 years of experience in river dredging, building ports and reclamation projects in Europe, South America, Australia, Singapore and Africa.

Under Executive Order No. 380 signed by the President in October 2004, reclamation has been identified as one of the primary sources of government revenue generation under the Medium Term Philippine Development Program (MTPDP) from 2004 to 2010.

PGMA makes SSS card as core of unified multi-purpose ID system

Original report at Gov.Ph News

President Gloria Macapagal-Arroyo has ordered that the Social Security Identification (ID) system be made as the core of the country’s unified multi-purpose ID system.

In an executive order she signed last Jan. 16, the President ordered the Social Security System (SSS) to implement this through the streamlining and harmonization of the identification systems of all government agencies and government-controlled corporations.

In other countries like the United States, the Social Security card is the most used ID system. The Philippines’ SSS itself has some 12 million card-carrying members.

In her Executive Order No. 700, President Arroyo ordered the SSS administrator to “take over the work of the Director-General of the National Economic and Development Authority (NEDA) to implement the streamlining and harmonization of the ID systems of all government agencies and government-owned and controlled corporations towards a unified multi-purpose ID system.”

On April 26, 2005, Executive Order No. 420 had required all government agencies and government-owned and controlled corporations to streamline and harmonize their ID systems, and authorized the NEDA director-general to implement the same.

So far, “some work has been done by the NEDA on the assignment,” and so the SSS administrator “shall build on the work already done by the NEDA director-general,” says EO 700.

EO 700 mandates the NEDA and the National Statistics Office (NSO), as well as all other agencies identified by the SSS, to “assist the SSS in developing the unified multi-purpose ID system.”

The SSS shall use its funds to carry out the objectives of EO 700 which takes effect immediately.

Government sets up one-stop-shop centers for investors

By Ma. Elisa P. Osorio
Original report at the Philippine Star

To cut down bureaucratic red tape, the government has set up one-stop-shop centers throughout the country where investors can finish all their required transactions with the different state agencies under one roof.

Trade Secretary Peter B. Favila, who was designated by President Arroyo as the country’s anti-red tape chief, said 10 of these centers formally called National Economic Research and Business Assistance Centers (NERBACs) are now operational.

These 10 NERBACs are located in the DTI Regional Offices of Ilocos, (Region I); Cagayan Valley, ( Region II); Central Luzon, (Region III); Western Visayas, (Region VI); Central Visayas, (Region VII); Eastern Visayas, (Region VIII), Northern Mindanao, (Region X); Davao, (Region XI); SOCCSKSARGEN, (Region XII) and Cordillera Autonomous Region (CAR).

Regions IV-A, IV-B, V, IX and CARAGA will be launching their respective NERBACs within the year.

“NERBAC shall cut red tape and create more investments in the countryside. NERBAC houses different National Government agencies under one roof to assist investors and entrepreneurs in their information and business licensing requirements,” Favila said.

This, he added, will also improve effectiveness and efficiency in government services. Created by virtue of RA 7470, Favila said NERBAC offers a myriad of government services for start-up and expanding business that include business licensing and registration, knowledge and information management, and proactive investment marketing.

He said the one-stop-shops effectiveness are already being felt in Cebu, which was able to reduce by 30 percent the processing time for DTI’s business name application, and processing of 3,129 new Business Names, 339 business names renewal, 97 contractors’ accreditation and 187 other licensure needs.

NERBAC-Davao, on the other hand, has also served export documentation to 491 exporters, issuing 2,009 export declarations and licenses and generating $283 million in export sales.

“The goal of NERBAC is to ensure that accurate and timely information and assistance are provided to our clients, developing our business environment to be more friendly and conducive for investments in the regions,” Trade Undersecretary for Regional Operations Carissa Cruz-Evangelista said.

SBMA tallies $ 1.67-B investments

Original report at The Manila Bulletin

A total of 164 projects with combined investments of $ 1.668 billion were registered last year pushing the cumulative total in the Subic Bay Freeport to $ 5.43 billion.

Subic Bay Metropolitan Authority (SBMA) Administrator Armand Arreza said the 2007 figures represented a 17 percent increase over investments registered in 2006, which totaled $ 1.42 billion, and boosted Subic’s cumulative total by 44 percent.

"This is reflective of the SBMA’s thrust to focus on the maritime industry as a core business, and in the continuing program to attract investors in logistics and tourism," he added.

For instance, he noted, the biggest investment committed in 2007 came from Hanjin Heavy Industries and Construction Co. (HHIC-Phil), which poured in $ 684 million on top of its original $ 1-billion investment in 2006.

"These new investments represented a growing line of business opportunities that investors now find in Subic," Arreza said.

Aside from the Hanjin expansion, a joint Taiwanese-Filipino venture in power production contributed the biggest chunk of new investments here in 2007.

This is the Redondo Peninsula Energy, Inc. (RPEI), which committed $ 431.6 million to put up a coal-fired thermal power plant near Hanjin’s shipyard site at the Redondo Peninsula.

The next biggest new investors are ABG Shipyard, Inc., an Indian company that will engage in ship building and repair with a capitalization of $ 100 million; Kyung An Co. Ltd. (Korean), with $ 80 million for a casino and hotel project; Paradise Consulting & Development Corp. (Korean), with $ 36.7 million for a condominium-type hotel and related leisure facilities; and Wide Tree Leisure and Development Corp. (Korean), with $ 12 million for a hotel and restaurant business.

A year-end report on Subic’s performance also indicated that the active workforce in the free port totaled 74,181 at the end of 2007, an increase of 17 percent over the 2006 record of 63,485.

Of this total, 31.37 percent are employed by the services sector, 20.78 percent by construction firms, 17.94 percent by manufacturers, and 2.07 percent by private households.

Total revenue collections in Subic, meanwhile, also increased by 38 percent last year — from P4.45 billion in 2006 to P5.32 billion in 2007.

The 2007 revenue is composed of a P1.35 billion collection by the Bureau of Internal Revenue (BIR), and a P3.97 billion cash collection by the Bureau of Customs.

Arreza said the Subic Bay Freeport has been taking "big strides" in terms of investment generation by breaching the $ 1 billion level starting 2006.

In contrast, a generally flat investment performance was recorded since 2001 before Arreza and SBMA Chairman Feliciano Salonga took over the SBMA helm in September 2005.

Figures from the SBMA Market Research and Planning Department showed that year-on-year investments in Subic stood at $ 2.12 billion in 2001, but fell to $ 82 million the following year. This further dipped to $ 41 million in 2003, $ 64 million in 2004, and $ 28 million in 2005.

The SBMA recorded a banner year in 2006 and became the country’s top investment promotion agency when it signed in Hanjin, which committed $ 1 billion for its shipyard project.

Tuesday, 22 January 2008

DOTC pushes ‘broadband’

New name, new partners, same network project
By Darwin G. Amojelar
Original report at The Manila Times

Only a word distinguishes the new broadband project being pushed by the Department of Transportation and Communications (DOTC) from the controversial one that President Gloria Arroyo scrapped last year for allegedly being tainted with corruption.

The Transportation department on Monday said the government is still keen on the implementation of a broadband network that will cover the entire country, this time through the Government Broadband Network project. What President Arroyo cancelled was the National Broadband Network project.

“We have a continued dialogue with the private carriers,” DOTC Secretary Leandro Mendoza said. “We want the project to continue because that’s actually a strategic project and the country needs that,” Mendoza added, referring to the national broadband.

The government broadband is designed to be a fully integrated single Internet protocol-based platform that will allow seamless voice, data and video connectivity within and among national, regional, local government agencies, including government-owned and -controlled corporations.

Mendoza said the agency is still studying the mode of procurement.

The country’s biggest telecom players, among them Globe Telecom Inc., Philippine Long Distance Telephone Co. (PLDT), Bayan Telecommunications Inc. and Digital Telecommunications Phils. Inc., have expressed interest to help the government in reducing its communications expenditures.

The DOTC said the government broadband project should be run through IP-based or NGN platform. NGN is the latest technology for voice and multimedia communications based on open-architecture design made possible through Internet protocol technology.

Globe, PLDT, and Digitel are aggressively rolling out NGN technology to improve their services.

Unlike the proposal of Zhong Xing Telecommunications Equipment Co. Ltd. (ZTE) for the $330-million NBN project, the government project will run through a Wimax (Worldwide Interopera-bility for Microwave Access) system. ZTE had won the contract for the national broadband over three other bidders. Under the contract, ZTE will construct a total 14 microwave relay stations, including regional cluster base stations.

The DOTC said the government broadband’s services and applications requirements include the secured Intranet and other services for the government including, secured email services, data transfer and video conferencing and voice-over Internet Protocol (VoIP) terminal and services, with free calls within government agencies nationwide and access charging only for outside calls. Other requirements, it added, are Internet connectiviy and mobile communications.

The government-broadband project plans to connect all national government offices with about 2,4000 connections; all cities and municipalities with 1,628 connections; and about 50 percent of all villages nationwide with 22,000 connections.

The government’s annual communications expenditures are estimated to be P4 billion. Of this outlay, agencies spend P1.9 billion; government corporations, P1.1 billion; and local governments, P700 million.

New W. Visayas airports beckon to foreign carriers

By Nanette L. Guadalquiver with Chrysee G. Samillano
Original report at BusinessWorld Online

SILAY CITY — The opening of the P5.6-billion New Bacolod-Silay Airport here last weekend is expected to draw international flights to Negros Occidental province, starting from other Southeast Asian countries.

Along with the new airport in Cabatuan, Iloilo, also in Western Visayas, the new airport here will be declared as an international gateway based on the standards of the International Civil Aviation Organization.

Transportation and Communication Secretary Leandro R. Mendoza said the government will declare within the month that Bacolod-Silay airport will be opened to flights from neighboring countries.

Mr. Mendoza said he expects the New Bacolod-Silay Airport to trigger industrial and commercial development, in the same way that Mactan Cebu International Airport now has industrial zones nearby.

He said the country will host the Association of Southeast Asia Nation (ASEAN) transportation ministers meeting this December, at which month the Philippines will also sign an agreement to declare a regional "open skies" for ASEAN carriers.

"The more international destinations we have, the better for the country because we are going to be competitive," Mr. Mendoza said.


The new airport here, situated about 20 kilometers north of Bacolod, was opened 10 years after it was brought to the drawing board with funding from the Japan Bank for International Cooperation.

Eiichi Oshima, deputy chief of mission of the Japanese embassy in Manila, noted that Negros Occidental has the fifth highest air passenger traffic nationwide which increased by 50% in the last decade.

The opening of the new airport led to the closure of the 72-year-old Bacolod airport despite efforts by a local lobby group, led by Bacolod Mayor Evelio R. Leonardia, for its retention.

Mr. Mendoza said the Bacolod airport cannot continue commercial operations simultaneously with the Silay airport for safety reasons.

Vice-President Noli de Castro, who led the inauguration rites Friday, said the opportunities the new airport could bring to Silay City and to Negros Island "does not mean that Silay’s gain is Bacolod’s loss."

"Now Bacolod can concentrate on its competitive edge in commerce, business and the service sector," Mr. De Castro said.

Being a highly urbanized city, Bacolod has a great potential to develop central business districts and commercial mixed-use areas, he said, adding the old airport site — given its location and the developments in its immediate surroundings — can be transformed into a business district.

In Iloilo City, property developer Megaworld has acquired the old Iloilo airport site for development into residential and commercial areas.


Meanwhile, Mr. De Castro said that, by the second quarter, work will start on the 500-meter extension of the Silay airport runway to accommodate larger aircraft from the United States and Europe. Today, the 2,000 meter runway can accommodate a 300-seater Airbus 330.

Bacolod Rep. Monico O. Puentevella, chairman of the House of Representatives Transportation committee on transportation, is also pushing the construction of the 10-kilometer road linking the Bacolod circumferential road to the new airport. The new road is expected to cut travel time from Bacolod to only 15 minutes.

Mr. Leonardia said he will ask the Air Transportation Office (ATO) not the remove the equipment at the old airport.

The mayor has met with Bacolod City police director Senior Supt. Ronilo Quebrar to ask for help in securing the airport equipment while city officials lobby for the reopening of the old airport.

ATO officials earlier said the equipment at the old airport would be transferred to a proposed new airport in Kabankalan, also in Negros Occidental.

The Bacolod Airport was established in 1936 while Bacolod was declared a city in 1938.

Agri sector posts 4.68% growth in 2007

By Marianne V. Go
Original report at The Philippine Star

Farm output rose 4.68 percent last year after rice and corn harvests recovered from an early dry spell, putting the overall economy well on track to record over seven percent growth in 2007. The agriculture sector grew 3.84 percent in 2006.

The agriculture sector accounts for around a fifth of economic output and is heavily reliant on rice and corn as well as tropical fruit such as bananas, pineapples, mangoes and coconuts.

Total production of the crops, livestock, poultry and fishery subsectors amounted to P971.8 billion last year.

Fourth quarter growth last year for the sector was 5.65 percent, with the crops subsector expanding by 8.8 percent and the livestock subsector by 2.96 percent.

The fourth quarter 2007 growth of the poultry subsector was 0.91 percent, while the fisheries subsector expanded by 3.79 percent.

In a press conference, Agriculture Secretary Arthur Yap said that for 2008, the Department of Agriculture hopes to attain a growth of 4.5 percent to 5.5 percent. The DA is relying on the continued growth of the fishery subsector, particularly municipal and aquaculture, and on increased rice and corn production.

“I have a forecast of overall fourth quarter economic growth of seven percent that assumes agricultural growth of 4.7 percent,” said Luz Lorenzo, an economist at ATR Kim-Eng Securities.

“Now that agricultural growth is 5.65 percent, that even allows for some shortfall in other sectors to make my forecast.”

The Philippine economy has already grown an average of about seven percent over the first nine months of 2007. Fourth quarter data will be announced within a few weeks.

The DA is projecting a growth of up to 10 percent for the fishery subsector this year, while rice production is targeted to increase by 5.78 percent and corn by 10 percent.

The fisheries subsector remained the leading growth contributor in 2007, accounting for 25.44 percent of total agricultural output.

The fisheries subsector posted a growth of 6.81 percent last year with gross receipts amounting to P180.7 billion at current prices. Commercial fisheries expanded by 10.4 percent, while aquaculture and municipal fisheries both grew by five percent.

The crops subsector, which accounts for 47.56 percent of total agricultural output, posted a growth of 5.57 percent with gross output value amounting to P510.3 billion.

Palay production increased by 5.96 percent, while corn production grew by a much faster 10.77 percent.

The livestock subsector, which accounts for 12.98 percent of total agricultural production, posted a modest growth of 2.38 percent with a gross output value of P163.2 billion.

Hog output went up by 2.72 percent while carabao and goat production registered growths of 5.02 percent and 2.31 percent, respectively.

The poultry subsector, which accounts for 14.02 percent of total agricultural output, managed to squeeze a growth of 0.31 percent with gross output value amounting to P117.7 billion.

The DA said farmgate prices, increased by an average of 4.48 percent.

The poultry subsector registered the biggest price increase averaging 6.44 percent.

Fishery products recorded an average price gain of 3.53 percent while prices of crops went up by an average of 5.17 percent.

Livestock prices went up by 2.6 percent.

Monday, 21 January 2008

Fewer Pinoys see selves as poor

Self-rated poverty score best since 1987
Full report at BusinessWorld Online

FEWER FILIPINO FAMILIES, around 8.1 million of them, regard themselves as "mahirap" or poor, a new Social Weather Stations (SWS) survey showed.

The survey results, made exclusive to BusinessWorld, showed self-rated poverty incidence as of December at 46% from 52% three months earlier.

The result was an improvement for the Arroyo administration, which matched its previous best in June 2004, and was one of the lowest scores since 1987.

SWS data show the last time self-rated poverty went below 50% under President Gloria Macapagal Arroyo was in June 2007 (47%) and prior to that in August 2005 (49%).

The only time self-rated poverty was lower since the SWS started its quarterly surveys was in March 1987, at 43%.

RP golfers Rosales, Delasin win women's World Cup

Full report at ABS-CBN News

The tandem of Jennifer Rosales and Dorothy Delasin of Team Philippines bagged the fourth edition of the Women's World Cup of golf in Sun City, South Africa Sunday following an impressive finish that included four birdies in the last four holes.

Rosales and Delasin had a final round of seven-under-par 65 in the best ball (each team member playing their own ball with the best score on each hole counting) to give them a 54-hole aggregate of 18-under-par 198, an Agence France-Presse online report said.

Korea's Ji-Yai Shin and Eun Hee Ji finished second on 200 following a final round 67, with Taiwan (Amy Hung and Yun Jye Wei) and Japan (Shinobu Moromizato and Miki Saiki) tying for third on 203, Saiki eagling the par-5 closing hole with its island green to move up a spot.

France's Gwladys Nocera and Virginie Lagoutte-Clement, who is four months pregnant, were fifth all on their own on 205 following 67.

"Thanks to all you fans out there and thanks to Dorothy for the wonderful golf she played," said a tearful Rosales after she and her partner had collected the trophy.

"This win was all about the teamwork and the team spirit Jennifer and I enjoyed over the three days and it's a win we want to dedicate to the people of the Philippines," said Delasin who like Rosales, campaigns on the LPGA Tour.

Philippines GSIS set to sign 1 bln usd management deal with Credit Agricole, ING

By Enrico de la Cruz
Original report at Forbes

MANILA (Thomson Financial) - Philippine pension fund Government Service Insurance System (GSIS) said it will sign on Friday an investment management agreement with Credit Agricole Asset Management (Singapore) Ltd and ING Investment Management.

Credit Agricole and ING will manage GSIS' planned overseas investments worth at least 1 billion US dollars.

'The (deal) is a pioneering program of the Philippines' largest pension fund to further expand its portfolio horizon by exploring investment opportunities abroad, consequently resulting in higher returns to the fund of GSIS members,' GSIS said in a statement.

GSIS, which has all 1.4 million state workers as members, is seeking to place about 12 percent of its total assets in fixed-income instruments, securities and private equity in Asia, Europe and the US.

ING manages 503 billion dollars in assets while Credit Agricole handles assets worth 725 billion dollars, according to GSIS.

Yao Group acquires Asian Spirit and SEAir for possible merger

By Bernie Cahiles-Magkilat
Original report at The Manila Bulletin

The Yao Group of Companies has acquired Asian Spirit, the country’s first and only cooperative airline concentrating on least traveled routes, in possible merger with Southeast Asian Airlines (SeaAir), a chartered flight airline that the company is also acquiring.

A source privy to the negotiation said that company chairman Alfredo Yao signed the purchase agreement for a total buyout of Asian Spirit middle of last week. The source, however, did not reveal the amount involved in the buy-out.

The source further noted that Asian Spirit may be merged with Seair.

A top official said that Yao noted the potential of air travel given the booming tourism business not just in the Philippines but in the entire Asian region.

This aggressive homegrown company, famous for its beverage products under the Zesto group, is eyeing for a majority 60 percent stake in SeaAir.

Asian Spirit was established by the Airline Employees Cooperative (AEC), a group of 36 founding members with varied airline discipline, in September 1995 as a domestic passenger airline with the mission to operate scheduled services to tourist destinations and secondary and tertiary airports where other airlines don’t dare to operate.

Asian Spirit endeavors to develop other destinations with tourism potentials, in line with the Department of Tourism’s Master Plan. The AEC is registered with the Cooperative Development Authority under the Office of the President of the Republic of the Philippines and other governing agencies.

The company made a stir when it flew to secondary and tertiary routes that have often been neglected and without dependable airline service.

It flew to San Jose, Cauayan, Boracay, Masbate, Virac, Daet, Batanes and Tablas developing these routes and re-established linkage with Manila.

Antonio G. Buendia Jr. served as company president and Joaquino Ernesto L. Po as vice-president.

The company, however, suffered financially as bigger airlines put up a strong competition in the routes that Asian Spirit had developed and cultivated.

For instance, it used to fly to Tagbilaran but when Cebu Pacific dumped its rates Asian Spirit was forced to cease serving the Tagbilaran route.

The source said that with the acquisition of Asian Spirit, the Yao Group is expected to merge it with Seair, a chartered flight airline operating short routes in the country’s tourist destination islands, to beef up its operations.

The source added that Yao had finalized a 60-percent stake in Seair late last year.

Under the plan, the Yao Group plans to expand SeaAir’s limited chartered flight operations in the country as well as fly to other countries in the region.

SeaAir had plans to compete in the booming regional budget air travel with the expansion of its operations to Singapore and Macau after it forged an agreement with Tiger airways for a long term lease of two A320s.

The company is just awaiting for an approval by the Civil Aeronautics Board to fly the international routes.

Earlier, the company also planned to fly to Macau and Singapore using two A320s from the Diosdado Macalapagal International Airport in Clark .

The two aircrafts will be added to Seair’s existing fleet of 7 LET-410 planes, four Dornier 328 aircraft, the restored vintage Do24ATT seaplane.

Once all the necessary clearances obtained, the company may proceed with its plan to ask for incentive package before the Board of Investments.

It is the first 135 airline of the Philippines which complies with ISO 2001 standards.

At present, SeaAir operates its own in-house maintenance is located in an approx. 1,200 sq. meters facility at Clark Airfield, Pampanga.

It has 13 aircraft of which 8 are 19-seater Let 410. The remaining 5 aircraft are available for hire and consist of 2 Dornier-28 ( 9 passengers) , 1 Piper Cherokee ( 3 passengers),1 Alouette and 1 Citabria.

It flies to select destinations in the country including Clark, Antique, Bacolod , Baguio , Baler, Bantayan, Basco, Caticlan and Kalibo, Busuanga, Butuan, Cagayan de Oro, Calbayog, Camiguin Catarman, Zamboanga, Jolo and Tawi-Tawi.

Sunday, 20 January 2008

VP de Castro inaugurates new Bacolod-Silay Airport

Original report at the

MANILA, Philippines -- Transportation and Communications Secretary Leandro R. Mendoza opened yesterday for commercial operations the P5.7-billion New Bacolod-Silay Airport.

The new Bacolod-Silay Airport will replace the existing Bacolod City Airport.

Located in Barangay Bagtic, Silay City, the new airport was built to cater to the increasing number of passenger and cargo traffic in Negros Occidental and its influence areas.

"It will boost the business and economic activities in the Western Visayas region," Mendoza said.

Vice President Noli de Castro led the inauguration ceremonies together with Secretary Mendoza.

Construction of the new airport was funded under the New Bacolod (Silay) Airport Development Project of the Japan Bank for International Cooperation (JBIC) for P5.6 billon.

Project contractor is Takenaka-Itochu Joint Venture (TIJV), while the consultant is the Pacific Consultants International (PCI).

The new airport has a control tower that is capable of handling all weather and night landing operation.

The runway can accommodate an Airbus A-330 aircraft, while the apron can hold five aircrafts at a time.

The terminal building is equipped with state-of-the-art passenger boarding bridges, flight information display system, mechanized baggage handling system (inbound and outbound baggages), security X-ray machines, elevators and escalators.

The terminal has three floor levels. The ground floor is designed to hold 12 check-in counters, public concourse, arrival area and information counter. The second floor has the pre-departure area with VIP and CIP lounges, ATO offices, Airport Security holding room, clinic and nursery rooms, while the third floor serves as the view deck with a concession area and electro-mechanical rooms.

The airport is also equipped with crash, fire and rescue vehicles and airport maintenance equipment.