Saturday, 8 March 2008

Update on North-Southrail linkage

The rail rehabilitation of the Southrail started last Tuesday, March 4, 2008. The rehabilitation started near the historic Paco Railroad Station. The Manila belt line beside the Paco Railroad Station will celebrate its 100 years anniversary this coming March 25, 2008.

Click here for photos and more!
And more!

JPEPA will lead to massive flow of capital into RP – PIDS study

By Mary Ann Ll. Reyes
The Philippine Star

The Japan-Philippines Economic Partnership Agreement (JPEPA) would lead to the massive flow of Japanese capital and technology into the Philippines and these will be directed to help develop “sunshine areas” such as information and communication technology (ICT), environment and natural resource management, road building technologies and several other current and emerging national concerns, a study made by the Philippine Institute for Development Studies (PIDS) has said.

The PIDS study, written by economists Josef Yap, Erlinda Medalla and Rafaelita Aldaba, said the benefits from the JPEPA will go beyond expanding and liberalizing trade between Japan and the Philippines.

Yap, Medalla and Aldaba wrote that the likes of JPEPA “cover not only free trade agreements on goods but also a comprehensive economic partnership aimed at reducing development gaps, reducing the cost of doing business and addressing regional concerns.”

The other current and frontier national concerns of the Philippines that would benefit from Japanese capital, technology and expertise are trade and investment promotion, small and medium-scale enterprises, science and technology undertakings, transportation and tourism, said PIDS, a prestigious think-tank.

The Department of Trade and Industry said that these current and emerging national concerns will also immensely benefit from Japanese official development assistance (ODA).

The PIDS study said that one of the major attractions of JPEPA is that it is a “new age agreement” that breaks from the strict confines of the trading of good and expands into areas of development and cooperation which would immensely benefit the Philippines.

The ratification of the JPEPA will also demonstrate that the Philippines is in sync with the rest of region and the world on vital issues of trade and the vision of “shared prosperity, peace and stability,” according to the PIDS study.

What makes the ratification of JPEPA a very urgent and a pressing agenda, said the study, is location of the Philippines. It belongs to an increasingly growing and integrating regional economy that includes Japan, China, South Korea and the member-countries of the Association of Southeast Asian Nations (ASEAN).

The Philippines cannot simply isolate itself from this increasing economic integration, said the study, and cannot ignore the fact that the JPEPA will be good for the Philippine economy.

The PIDS study noted that international realities, such as the stalemate in the World Trade Organization-sponsored trade liberalization talks started in Doha, Qatar in 2001, have pushed countries in East Asia and the ASEAN to forge either trade agreements or the expanded economic partnerships.

“While the WTO multilateral negotiations have come to a standstill, countries have been seeking bilateral agreements such as new age partnerships,” the study said. The study added that the JPEPA falls under such type of bilateral agreements.

The League of Provinces of the Philippines (LPP) earlier endorsed the ratification of the JPEPA, citing the economic growth that the partnership agreement would deliver to the rural areas.

The LPP position on the JPEPA specifically cited what was mentioned in the PIDS study — the flow of Japanese capital, technology and expertise into current and emerging concerns such as ICT, promotion of trade and investments, boosting SMEs and improving the country’s road infrastructure.

The LPP said several Philippine provinces expect to sign partnership agreements with their counterparts in Japan once the JPEPA is ratified by the Senate.

The LPP also stressed that Japanese ODA will dramatically surge once the JPEPA is ratified.

Japan is the largest source of Philippine ODA. It is the leading source of foreign direct investment into the Philippines and is also the country’s second largest trading partner.

In 2006, Japan bought $7.7 billion worth of Philippine exports.

TUCP wants Senate to ratify JPEPA

Bernard U. Allauigan

The Senate has been asked to ratify "as soon as possible" the Japan-Philippines Economic Partnership Agreement (JPEPA) "in order not to keep the labor sector waiting longer for the opening up of a new market for Filipino workers," the Trade Union Congress of the Philippines (TUCP) yesterday said.

But they also said that they would have to ask for P2 billion "safety net" from the government for the workers who might be displaced by the freer entry of manufactured and other goods from Japan.

The TUCP gave its support to JPEPA after a "cost-benefit analysis," saying the country "stood to gain more" on the deal.

"We reckon that the potential economic gains outweigh the implied losses," the group’s spokesperson, Alex Aguilar, said.

By approving the bilateral trade agreement, "more investments from Japan could mean bigger employment opportunities for Filipino workers due to the setting up of more joint venture enterprises in the country utilizing skilled labor and local agricultural and mineral products," Mr. Aguilar, said in a statement.

"Trade between the Philippines and Japan could improve further with the lowering of tariff barriers allowing entry of commodities from both sides," said Mr. Aguilar.

The group added that approving the deal would help the agricultural sector in the country as this would "open more agricultural production for export to Japan [and] providing more jobs, especially in the countryside."

Several other groups have already called on the Senate to immediately ratify the deal, including the Semi-conductors and Electronics Industries of the Philippines and the Green Movement for National Progress, among others.

But the Fair Trade Alliance (FTA) has reservations, saying the deal is "unconstitutional" in its present form and that an amendment would be likely the answer for its ratification.

The Phil. Nurses Association, for its part, also opposed the approval of the treaty as Filipino nurses would be given "second class treatment" in Japan.

The Senate is yet to conduct a conditional concurrence on the treaty to look into its constitutionality before ratifying it.

RP call center seat capacity projected to grow 23% in 2008

Emmie V. Abadilla
Manila Bulletin

The country’s contact center industry is growing extraordinarily, with seat size projected to increase by 23 percent, close to 30,000 more, from the present 129,000 seats to 159,000 in the next 12 months.

However, the high attrition of 26 percent for fulltime agents and 37 percent for part-timers plus the low recruitment rate is a grave concern, according to the 2008 Asian Contact Center Industry Benchmarking Report.

Despite the high growth, one in four Filipino agents leave the industry. The average tenure of fulltime agents leaving is 22 months, with an average of 10 months for part-time agents.

Some 51 percent of agents leave the contact center industry entirely while 49 percent move to other contact centers. By contrast, team leaders stay for over 3 years and contact center managers stay longer at almost 6 years.

Agents leave the industry for lack of career path, lack of things to do, insufficient monetary rewards and lack of flexibility, according to Dr. Catriona Wallace, President of, the research firm which Autonomy etalk of the United Kingdom and California-based Genesys commissioned for the report.

The survey covered 539 contact center executives in 2,488 contact centers and 259,699 contact center seats across the Philippines, Singapore, China, India, Malaysia and Thailand.

The most effective strategies used to retain employees are financial incentives, reward and recognition programs as well as paying above market rates, according to the study.

"High levels of employee turnover can have a devastating effect on all aspects of customer service, disrupting operations and decreasing customer satisfaction as well as increasing costs for new hire training," Autonomy etalk Asia Pacific Director Don Lee pointed out.

Hence, organizations need to interest themselves in the career development and continuity of their agents. Formalized career development plans, coaching and training tools along with performance analytics can help, he suggested.

Significantly, the study also revealed that Asian contact centers are already in the midst of a transition period. They are evolving from the traditional service and support facilities cutting costs for client companies to becoming profit centers, generating revenues.

Already, 72 percent of the 124 call center companies operating in the Philippines, are already classified as profit centers, as opposed to Singapore, where only 32 percent of contact centers turn up sales.

"It shows that the Filipino contact center industry is leading the market in the region in this global trend of transitioning from cost to profit centers," Dr. Wallace underscored. "The contact center is fast becoming an organization’s most valuable revenue generating asset. Filipinos recognize this."

This makes it more important for local contact centers to address the setbacks besetting the industry, she acknowledged.

Friday, 7 March 2008

End-February 2008 GIR Surpasses US$36 Billion Mark

Bangko Sentral
(Click here to view table.)

The country’s gross international reserves (GIR) rose to a new record high of US$36.1 billion as of end-February 2008. This was US$1.3 billion higher than the previous month’s level of US$34.8 billion. The current GIR level could cover 6.3 months of imports of goods and payments of services and income. It was also equivalent to 5.2 times the country’s short-term external debt based on original maturity and 3.3 times based on residual maturity. [1]

The significant increase in reserves was attributed mainly to the National Government’s (NG) deposit of proceeds from the reopening of its global bonds, as well as the Bangko Sentral’s (BSP) net FX operations and income from its investments abroad. These inflows were partly offset, however, by payments of maturing foreign exchange obligations of the NG and the BSP.

The level of net international reserves (NIR), including revaluation of reserve assets and reserve-related liabilities, stood at US$36.1 billion from US$34.8 billion at end-January 2008. NIR refers to the difference between the BSP’s GIR and total short-term liabilities.


1 Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

More local officials air support for President Arroyo

Manila Bulletin

Citing the dramatic economic gains as the cornerstone of her presidency, more local officials yesterday expressed confidence in the capability of President Arroyo to govern and steer the country to progress.

Governors, city mayors, and congressional allies strongly condemned the calls for her to step down, labeling such calls us "unfair and unconstitutional."

La Union Gov. Manuel Ortega said the political crisis is being engineered by politicians aching to grab power before the 2010 presidential elections.

"There are also some sectors who, having an axe to grind against the President, want to impose their biased will on the greater majority of the people by exploiting mere allegations on ZTE NBN issue," Ortega said.

Gov. Alvaro Antonio, chairman of the Cagayan Provincial Development Council, led 20 mayors headed by Gattaran Mayor Ramon Nolasco, LMP chapter president, in expressing all-out support to President Arroyo.

Calbayog City Mayor Mel Senen Sarmiento, chairman of the Regional Development Council in Eastern Visayas, said, "The Filipinos should not be swayed and deceived by the scripted plays of oppositionists who have consistently played villain roles to national development."

Tarlac City Mayor Genaro Mendoza said, "PGMA is steering the nation to progress through an integral approach, taking into account the varied needs and requirements of the different local government units, advancing not only the interest of our city but the rights of every Filipino as well."

In a handwritten statement, Candon City, Ilocos Sur Mayor Allen Singson stated, "This is to signify our support for the present administration and President Arroyo. That charges against persons concerned should first be proven and not merely presumed."

Arlene Espinosa Zambo of Toledo City, Cebu said the "present political turmoil is without no doubt another baseless means to cause instability and anxiety among Filipinos. We, the people of the City of Toledo, condemn the call for the President to resign from office."

Jose Montelibano of Silay City, Negros Occidental, in his open letter of support, said, "We stand firm in our belief that you are not involved in any of the allegations being made by your detractors. We believe in your vision and have full trust that your leadership will see us through any political and economic crisis."

Bishops, Cabinet members to meet this time on corruption

Manila Bulletin

After a fruitful assembly that resulted in the revocation of Executive Order 464, Malacañang is arranging another meeting with Catholic bishops, this time to tackle the government’s anti-corruption initiatives.

Chief Presidential Legal Counsel Sergio Apostol said Cabinet members and Catholic prelates have agreed to meet again soon and discuss ways to improve the fight against official corruption.

"We agreed to hold another dialogue about fighting corruption in government," Apostol said in a phone interview, a day after President Arroyo bowed to the demands of the Catholic bishops to scrap the controversial EO 464 in a closed door meeting in a hotel in Pasig City.

He said the date and place of the second dialogue between the president’s men and religious leaders are still in the works.

Apostol admitted that the Catholic prelates are particularly concerned about how to speed up the prosecution of government executives involved in graft practices. He gave his assurance that the government remains sincere in putting behind bars officials found guilty of corruption regardless of their stature.

Deputy Presidential Spokeswoman Lorelei Fajardo said President Arroyo has already asked the Catholic bishops to join the government’s procurement transparency group.

Fajardo said the President was also impressed by the bishops’ program for monitoring the use of the Internal Revenue Allotment (IRA) by local government units during last Wednesday’s meeting. Fajardo said the president expressed hopes that the bishops’ IRA watch could be applied in all levels of government.

Last Wednesday, Mrs. Arroyo cancelled EO 464, which bans government executives from appearing in congressional hearings without her consent, following a meeting with the Catholic bishops and Cabinet members.

The president, however, has retained her right to invoke executive privilege to withhold confidential information on state affairs.

While it has not called on President Arroyo to resign, the CBCP, in a pastoral letter issued last week, asked her government to take the lead in the fight against corruption in government. It also called for the revocation of the order that restricts government officials from appearing in legislative inquiries without the approval of the president.

Thursday, 6 March 2008

Tire smuggling

Emil Jurado

There is a sector in business that has been trying to seek the help of Customs to combat rampant smuggling. I am referring to the Tire Manufacturers Association of the Philippines, which has been fighting the smuggling of tires from China, India, Thailand, Korea and especially from Indonesia, which are undervalued. This falls under what is called “technical smuggling.”

Under Customs’ implementation of the World Trade Organization-mandated Transaction Value System, imported tires are sold in the local market with more than 300 percent margin of landed cost.

Tire manufacturers have been appealing to Customs to upgrade the declared values of imported tires to no avail. Instead, the bureau issued Customs Memorandum nos. 30-2007 and 3-2008 which prescribed the basis in processing specific tire brands.

The tire manufacturers have a running battle with importers of Gajah Tunggal tires from Indonesia, whose valuations have been questioned. But it seems that importers have well connected lawyers with Customs, who have sought the classification of Indonesian tires appraised based on the shipment export values and not on the test values prescribed by the memorandum.


Another case of the tire manufacturers against the importers of the Indonesian tires is that Customs was found to have failed in keeping payment records, which is a violation of the Customs Tariff Code—a violation that merits P160 million fine. This case, however, has been pending with the Office of the Commissioner for more than a couple of years now.

Thus, it would seem that there are some people at Customs working on the side of the Indonesian tire importers, which in effect would mean the continued rampant undervaluation of tire imports. This also means loss of government revenues in millions of pesos.

This is just one aspect of importations that is penalizing local manufacturing. There are many more cases similar to this problem of the local tire industry that should be looked into not only by Customs Commissioner Napoleon Morales, but also Finance Secretary Gary Teves. All to prevent more shortfalls in its collection target.

Completion of big-ticket infrastructure projects to boost PGMA’s goal of uplifting lives of Filipinos


President Gloria Macapagal-Arroyo’s goal of uplifting the lives of the ordinary Filipino is expected to receive a big boost with the implementation of vital infrastructure projects nationwide, Department of Public Works and Highways (DPWH) Secretary Hermogenes Ebdane said today.

Ebdane made the statement this afternoon during the taping of “The Cabinet Speaks,” a weekly television program hosted by Press Undersecretary Martin Crisostomo and Balita reporter Evelyn Quiroz over Channel 4.

He cited DPWH’s major accomplishments in the coffee table book entitled, “Stone and Steel,” a visual directory of over 2,000 roads, bridges and other infrastructure projects from 2001 to 2007.

Despite the high cost of acquiring road-right-of-way (RROW), Ebdane said the Arroyo administration has achieved unparalleled accomplishment in the infrastructure sector as well as in the implementation of reforms involving project administration and management.

These reforms include the establishment of a transparent bidding process through the Internet, and the Road Watch. The latter enables the private sector to ensure that minimum requirements in government project implementation are met.

Ebdane said more major infrastructure projects will be completed before the President’s term ends in 2010 since, unlike in previous years, government projects of the Arroyo administration are assured of adequate funding.

The President is pushing for massive investments in the infrastructure sector, especially in the completion of much-needed national highways, bridges, farm-to-market roads, irrigation systems, among other facilities, to create more and better economic and job opportunities nationwide.

She has pointed out that infrastructure projects create more jobs aside from enticing businessmen to invest in the country.

Ebdane said that among the major ongoing infrastructure projects that will be completed before the end of 2009, or by the first quarter of 2010 at the latest, is the Halsema Highway which will connect Baguio City and the provinces of Benguet, Mountain Province, Ifugao, Kalinga, Apayao and Cagayan.

Also undergoing construction or rehabitation are the Subic-Clark-Tarlac Expressway; South Luzon Expressway (SLEX) up to Calamba; Panay Circumferential Road, and the Zamboanga-Siocon-Sirawai Road.

Scheduled to be inaugurated early next month is the Tarlac-La Union Expressway in Luzon.

Other ongoing infrastructure projects include the Baler airport which is being transferred to Casiguran; Ilocos-Cervantes Road going to the Cordilleras; Zambales-Pampanga-Nueva Ecija Road to Dingalan, Aurora;

The Marikina-Infanta-Real Road Project; Mindoro-Panay Island Road Rhabilitation; and three big projects that would shorten travel between the northern and southern tips of Palawan.

Once these projects are completed by 2010, the President would surely achieve her objective of transforming the Philippines into a modern nation by investing heavily in vital infrastructure facilities, Ebdane said.

HSBC execs call on PGMA; vow to add 6 metro branches & new BPO centers


Two top executives of the Hongkong & Shanghai Banking Corporation Limited (HSBC) paid a courtesy call today on President Gloria Macapagal-Arroyo in Malacañang and vowed to continue investing in the country.

In town is the HSBC’s chief executive for the Asia-Pacific region, Alexander Flockhart who told Palace media that HSBC Philippines has a total of 9,000 personnel – 2,000 of them in the bank, and 7,000 of them in their BPO (business process outsourcing) centers.

President Arroyo -- who was wearing an avocado green pants ensemble with matching green open-toes heels – received Flockhart and HSBC Philippines president and CEO Mark Watkinson in Malacañang’s Music Room.

Flockhart said HSBC is very interested in the Arroyo administration’s development of BPOs, and that “if opportunities arise, we are happy to grow our bank in certain areas in the country.”

He added that he proposed to the President for the government to open up the banking sector to 100-percent foreign ownership to make banks more competitive.

The HSBC Asia-Pacific CEO also said he mentioned to the President about the “good growth in the tourism infrastructure and the generally positive outlook in agriculture.”

For his part, HSBC Philippines’ Watkinson said the bank is adding six more branches this year in Metro Manila, to bring the total to 30 branches.

Watkinson also announced that HSBC is into “great expansion” mode, and that it is soon opening a new BPO center along Commonwealth Avenue in Quezon City where some 3,000 people will be employed.

President Arroyo leads sendoff of relief goods to flood-devastated Eastern Samar


Food, water, used clothing and medicines were airlifted this morning to Eastern Samar as part of a massive relief and rehabilitation efforts organized by the government for the flood-ravaged province.

President Gloria Macapagal-Arroyo led the sendoff for the Hercules C-130 transport plane carrying the relief goods bound for Borongan, the capital of Eastern Samar

Called a “Caravan of Hope,” the relief effort for the stricken Eastern Visayas province was dubbed as one of the largest multi-agency disaster assistance operation.

Forty-four government agencies and non-government organizations (NGOs) led by the Philippine Amusement and Gaming Corporation (Pagcor), the Department of Health (DoH) and the Department of Public Works and Highways (DPWH) have pulled resources and manpower together to assist the victims of the massive flooding in the province.

Among the items included in the initial relief and rehab mission are 10,000 relief packs composed of assorted used clothing, blankets, mosquito nets, medicines and basic commodities such as rice, noodles, coffee and sugar.

Thirty-four medical personnel from the DOH accompanied the relief packs.

In Borongan, medical personnel from Manila will be augmented by other DOH doctors and nurses from the health department’s regional office in Tacloban City.

The President was joined at the sendoff ceremony by Social Welfare Secretary Esperanza Cabral, Defense Secretary Gilbert Teodoro, League of Cities of the Philippines president Benhur Abalos and Eastern Samar Gov. Ben Evardone.

PGMA kicks off construction of mass housing for 8,673 homeless Cavite families


GENERAL TRIAS, Cavite--President Gloria Macapagal-Arroyo broke the ground today for the construction in Barangay Pasong Kawayan in General Trias of the 53-hectare row-type housing project dubbed as “Pamayanang Maliksi Cavite Mass Housing Project.”

The President, during the rites, laid the time capsule containing the blueprint of the project and some coins for luck with the assistance of Vice President Noli de Castro, Cavite Gov. Ireneo “Ayong” Maliksi, Rep. Elpidio Barzaga Jr., Rep. Joseph Emilio Abaya, Carmona Mayor Roy Loyola, General Trias Mayor Luis Alanday Ferrer and Public Works and Highways Undersecretary Ramon Aquino.

After, the ceremony, the President distributed 15 certificates of lot allocation of Pamayanang Maliksi.

At least 8,673 Cavite families stand to benefit from this row/duplex-type of houses that will be built on 32 or 48-square meter lots. It is the country’s first provincial mass housing to be built by the province of Cavite in partnership with the R-11 Builders.

The President also handed over to General Trias Mayor Ferrer for distribution to his constituents 125 scholarship vouchers worth P1,175,000 under PGMA Training for Work Scholarship Program for welding and finishing course for call center agent and slaughtering.

Tanza Mayor Marcus Arayata, Trece Martires City Mayor Melencio Desagun, Jr and Mayors League President Mayor Roy Loyola also received their respective share of scholarship vouchers with the same amount intended for their constituents.

She also gave away 25 “Galing Mekaniko” kits and 25 “Galing Masahista” kits to the Cavitenos.

In celebration of the 2008 Women’s Month, the President released 23 white doves to signal the month-long observance of the said women’s month in this province.

The 2008 Women’s Month celebration will revolve around the theme of the 52nd Sessions of the United Nations Commission on the Status of Women, “Financing for Gender Equality and the Empowerment of Women.”

This year’s international theme shall focus on the need to generate resources to finance initiatives on gender equality and empowerment of women, while the local theme is “CEDAW ng Bayan: Yaman ng Kababaihan.”

The President noted that CEDAW is a UN Convention on the Elimination of all Forms of Discrimination Against Women.

She said that CEDAW fights for the rights of women worldwide.

Ipinagbubunyi natin ang tema ng Buwan ng Kababaihan, CEDAW ng Bayan : Yaman ng Kababaihan. Ipinagmamalaki natin ang ating bansa gawa ng kinikilala tayo na mahusay sa pagtupad ng CEDAW na pinagmumulan ng kabuhayan at pagtatanggol ng karapatan ng kababaihan kaya’t tayo sa buong mundo ay pang-anim na bansa sa husay ng pagsunod sa mga panukala ng CEDAW,” she said.

SIA Engineering teams with Cebu Pacific for Clark facility

Agence France-Presse

SINGAPORE - SIA Engineering Company Ltd. said Wednesday it has teamed up with the Philippines' Cebu Pacific Air to establish a maintenance facility at Clark Airport north of Manila.

Under a memorandum of understanding, SIA Engineering will hold 65 percent of the joint venture and Cebu Pacific Air will own the remaining 35 percent, the Singapore firm said in a statement.

The joint venture plans to construct three aircraft hangars over a period of three years to provide heavy and light maintenance, repair and overhaul services for Cebu Pacific and other carriers.

SIA Engineering is a subsidiary of Singapore Airlines, while Cebu Pacific is a low-fare carrier owned by the family of Filipino tycoon John Gokongwei.

Singapore budget carrier Tiger Airways and Malaysia's AirAsia both fly to Clark Airport, a former US Air Force base north of Manila.

Inflation rate climbs to 5.4% in February due to oil prices

Manila Bulletin
Click here for full report from National Statistics Office

Rising prices of essential commodities and services pushed up the country’s annualized inflation rate to 5.4 percent in February from 4.9 percent in January as higher rates.

National Statistics Office administrator Carmelita Ericta says higher prices were registered in all commodity groups except in fuel, light and water (FLW). Inflation a year ago was 2.6 percent.

In Metro Manila, the inflation rate rose to 4.1 percent in February from 3.9 percent n January. This was effected by the higher upward adjustments in the annual rates in all the commodity groups except in fuel, light and water.

Bangko Sentral ng Pilipinas Governor Amando Tetangco said yesterday that inflation accelerating in February to its highest since October 2006 wasn’t a surprise and within the monetary authority’s expectation due to higher prices of oil and other commodities.

"The February inflation of 5.4 percent comes within our forecast range of 4.8 percent and 5.5 percent. As I had mentioned before, we are expecting monthly inflation rate to trace a hump-shaped path," said Tetangco in a text message.

"The risks to this outlook continue to be elevated oil and commodity prices, which we, at the moment, expect to taper off toward the latter half of the year," he added.

Tetangco said the central bank continues to monitor price developments to ensure that its assessments "remain valid." The BSP targets average inflation of between 3 percent and 5 percent this year.

Q&A on the Exchange Rate Impact: How Much, What We Can Do, and What's Next

Bangko Sentral

In general, a firm currency is welcome news as it reflects positive developments in the country’s economic fundamentals,

In 2007, as the Philippine economy grew at its fastest rate in 31 years, the Philippine peso emerged as one of the top performing currencies in Asia and hit a 7 ½-year high of P41/US$1 in December 2007.

For Filipino consumers, a firmer peso meant lower prices in peso terms for imported goods and services. For instance, a stronger peso shielded the Philippines from the full impact of record high world oil prices. Based on our estimates, prices of oil products would have been higher by about P2.00 per liter if the peso had not appreciated against the US dollar. This would have raised transport fares and consequently food prices as well for Filipino consumers.

On the other hand, for sectors whose earnings are denominated in US dollars, a firmer peso is not a positive development. This includes exporters as well as overseas Filipinos and their dependents who now receive less pesos for every dollar they exchange.

Given this, discussions have been divided on whether a firm peso is ultimately a positive or a negative for our country.

It is in this context that we saw the need for this series of Questions & Answers. We hope that through this, we are able to promote better understanding of issues related to exchange rate developments and the government’s policy responses to these issues.

Wednesday, 5 March 2008

Top exec of Citicorp Advisory Board cites impressive gains of RP economy


The chairman of the US-based Citigroup International Advisory Board (CIAB) said today he was deeply impressed by the phenomenal achievements of the Philippine economy.

James Wolfensohn, who paid a courtesy call on President Gloria Macapagal-Arroyo in Malacanang this morning to “renew friendship,” said the economic strides made by the Philippines under the Arroyo leadership have been amazing.

He thanked the President for the “opportunity to talk to you.”

From a precarious meltdown mode in 2001, the Philippines vaulted into No. 25 position among the largest newly industrialized emerging markets in the world in 2007, according to the International Monetary Fund (IMF).

The fastest-growing economy in Southeast Asia, the Philippines posted a real gross domestic product (GDP) growth rate of 7.3 percent last year, its fastest pace in 30 years.

Wolfensohn told the President he was amazed that the country’s economy managed to reach its present position in less than six years since the President took the reins of government in 2002.

The President said that this was possible because of the brave men and women who make up the overseas Filipino work (OFW) force.

She said OFW remittances, which constitute 11 percent of the country’s GDP, have been instrumental in the breakthrough in the economy as well as the reduction of the budget deficit in 2007.

She also explained that more and more Filipino professionals, including nurses, engineers and doctors were getting jobs abroad, particularly in Saudi Arabia.

The President explained that there has been a sharp shift in the OFW mix from what used to be predominantly domestic workers decades ago to today’s highly-skilled professionals.

“Now, of the two million OFWs currently working in Saudi Arabia, only 100,000 are domestic helpers, the rest are professionals,” the President told Wolfensohn.

She added that a large portion of the OFWs going abroad is composed of nurses “who undergo rigid training” in Philippine nursing schools and hospitals.

To meet the increasing demand for Filipino nurses abroad, she has instructed the upgrading of primary hospitals to secondary hospitals “so that more nurses can train” in them, the President said.

Primary hospitals, she pointed out, have not yet been properly equipped to produce qualified nurses, unlike secondary hospitals which have adequate facilities and personnel to train nurses.

Wolfensohn was accompanied by his wife, Elaine and CIAB members Uwe Morawetz, Sugaporn Bertrand and Helen Pan.

Finance Secretary Margarito Teves was also present during the courtesy call.

Metered taxis roll out at NAIA


The Manila International Airport Authority (MIAA) on Wednesday started mobilizing 100 units of brand-new sedans as metered taxis at the Ninoy Aquino International Airport Terminals 1 and 2.

"We have been wanting to give a new alternative transport system at the NAIA. We are therefore proud to have initiated and spearheaded this new service that we are offering primarily to passengers and airport users. Now they have a cheaper but safe mode of transportation," said MIAA general manager Alfonso Cusi.

Cusi said the metered taxi will implement a P70 flag down rate for the first 500 meters and additional P4 for every succeeding 300 meters.

The flag down rate is higher than the P30 flag down for regular cabs operating in Metro Manila. Cusi said they expect the metered airport taxis to be lower in fares than the P1,200 normally charged by current taxi coupon service for passengers who are going to the northern part of Metro Manila.

"For the further protection of users, the taxi meter units are equipped with the receipt dispensing feature. Dispatch slips will be issued to them indicating the plate number of the taxi unit, breakdown of the tariff as approved by the Land Transportation and Franchising Regulatory Board (LTFRB) and contact numbers that they can reach to report any act of abuse or discourtesy," Cusi said.

Taxi companies as well as their drivers have been accredited by MIAA and the Department of Tourism. The drivers, Cusi said, have undergone the DOT’s "Mabuhay Host Program" or the LTFRB’s "Drivers Training Program."

All taxi units are equipped with two-way radios and a top light with the signage "Airport Taxi". It will be exclusively for airport operations to and from the NAIA terminals.

MIAA is expected to deploy around 300 metered taxi units in the coming months and will operate within the Mega Manila (provinces of Cavite, Rizal, Bulacan and Laguna)

"We appeal to our dear passengers to always take airport accredited transport for their own protection. The average fare difference of the tourist metered taxi from that of the regular metered taxi may be a little higher but the benefit to the users far outweighs the cost that will be incurred by making it as an alternative," Cusi said.



Army general suspended over corruption charges


MANILA, Philippines - A Philippine Army general and an enlisted personnel were placed under a six-month preventive suspension on Wednesday over their alleged involvement in an extortion racket.

The Office of the Ombudsman suspended without pay Maj. Gen. Jose T. Barbieto, commanding general of the Army's 4th Infantry Division based in Camp Edilberto Evangelista, Cagayan de Oro City. S/Sgt. Roseller Echepare was also slapped with the same penalty.

In a five-page order, the Ombudsman said the two officials were charged with the violation of RA 3019 (Anti-Graft and Corrupt Practices Act) and RA 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees). The complaint was filed by several personnel of the 4th Infantry Division.

“Applicants are being extorted money in the amount ranging from P25,000 to P30,000 in order to guarantee their enlistment in the Army without having to pass the standard procedures adopted by the Armed Forces of the Philippines," the complainants said in the complaint.

The complainant further alleged that the money collected from candidate soldiers are being given to Barbieto through his alleged “bagman," Echepare.

The complainants also claimed that when candidate soldiers are unable to produce the amount, they are given the option to pay through salary deduction, to be given to Echepare or deposited to the Landbank account of Barbieto’s brother, Marlo.

In a complaint-affidavit, one of the complainants stated that he discovered the anomaly on January 31, when a group of young male strangers approached him, seeking his help to get enlisted as candidate soldiers.

He said the young men stated that “they can only pay the amount of P10,000 each because they came from poor families and cannot afford the P25,000 that CG, 41D (Commanding General, 4th Infantry Division) is allegedly asking, according to a certain SSgt Echepare."

Another complainant narrated that his brother-in-law sought his help to be enlisted as he was disqualified due to hearing problem. He said he was advised to approach Echepare to be able to help his brother-in-law. He claimed Echepare told him, “makapasok ang bayaw mo kahit may depekto basta may SOP na P25,000."

He added that they were only able to produce P20,000 which they gave to Echepare on the first week of January 2008. He said Echepare accepted the money but stated that “ide-deduct na lang sa kanilang sweldo ang P5,000."

Another complainant stated that he passed the AFP qualifying exams but another person took the exam for him.

He said after his training in April, 2007, he expected to receive P27,000. However,the amount of P25,000 was deducted from it allegedly because his mother requested for it. “Sa pag uli nako sa amo unya gepangutana na akong mama ang iyang tubag wala kuno siya magpadeduct sa ako (When I went home, I asked my mother but she said she did not ask for the deduction)."

Assistant Ombudsman Mark E. Jalandoni cited Sec. 9 of the Rules of Procedure which gives the OMB power to preventively suspend public officials. AFP Chief of Staff Gen. Hermogenes Esperon Jr was directed to immediately implement the order.

Poverty worsened between 2003 and 2006

National Statistical Coordination Board

Poverty incidence increased to 26.9% for families in 2006 compared to 24.4% in 2003. This is however lower than the 27.5 % poverty incidence in 2000.

Click here for complete report.

Will Singapore firm finish NAIA-3?

By Joyce Pangco Pañares, Roy Pelovello, Macon Ramos Araneta
Manila Standard

THE government plans to tap the Singaporean firm CNA Group to finish Terminal-3 of the international airport after deciding to terminate the services of Japanese firm Takenaka Corp., an official said yesterday.

Alfonso Cusi, general manager of the Manila International Airport Authority, made the statement even as President Arroyo signed into law an act creating the Civil Aviation Authority, which is aimed at boosting aviation standards.

The US Federal Aviation Administration lowered the Philippines’ aviation rating in December, and that put a crimp on Philippine Airlines’ plan to boost services in the United States, among other things.

The FAA downgraded the Philippines’ rating from Category 1—meaning it complies with international standards—to Category 2, which means it is deficient in one or more aviation standards.

At the House, Bacolod City Rep. Monico Puentebella, chairman of the transportation committee, said higher standards would see the Philippines’ return to a Category 1 rating.

Cusi said Takenaka last week asked to be allowed to finish the terminal, which has not been used because officials are questioning its soundness.

“About 20 sub-contractors of Takenaka have formed a consortium to be headed by the Singaporean group,” he said.

“If they are chosen, the price might even be lower than what was pegged by Takenaka because we now remove their profit value as the main contractor.”

CNA, a Takenaka sub-contractor, is among Singapore’s top 50 companies and has completed big-ticket projects such as the Nanyang Polytechnic University and the Yangon International Airport.

The group is now expanding the Changi International Airport and Changi Prison Complex-B in Singapore.

Cusi said the airport authority’s board was “being very careful” about Takenaka’s request to finish Terminal-3.

“We have to study it carefully. This is already their third request, and it might amount to nothing again,” he said.

Cusi said the airport authority had already requested the Government Procurement Policy Board to rule on its motion to have another contractor designated for the terminal.

Airport officials had suspended Takenaka as the project’s contractor for refusing to acknowledge experts’ declaration of structural defects in the terminal after a portion of its ceiling collapsed in March 2006.

Takenaka is a sub-contractor of Philippine International Air Terminals Co., the consortium that won the contract to build the terminal in the mid-1990s.

But the Supreme Court rejected the contract in 2004 after finding the amendments on the original contract were grossly disadvantageous to the government.

Takenaka: try and try again

Takenaka seeks reconsideration anew
Bernardette S. Sto. Domingo
BusinessWorld Online

JAPANESE FIRM Takenaka Corp. is asking the government anew to allow it to complete the Ninoy Aquino International Airport Terminal 3 (NAIA-3) after it was taken out of the project for its failure to meet safety standards.

Manila International Airport Authority (MIAA) General Manager Alfonso G. Cusi said this is the third time that Takenaka had sought for reconsideration from the government.

"Takenaka gave us a letter last week signifying their willingness to work. I would not prejudge it, but I would say that we are evaluating it. We will reply to their letter tomorrow [today]," he said in a telephone interview yesterday.

MIAA last month terminated talks with Takenaka, the original contractor for the mothballed airport terminal project.

Transportation Secretary Leandro C. Mendoza declined to say if Takenaka is now fully out of the picture, saying only that "it’s still herethey [sic] filed for reconsideration and there’s no action yet." He stressed the government will not operate the NAIA-3 until all "structural defects" are repaired.

Mr. Cusi said his agency is also awaiting the Government Procurement Policy Board’s decision on whether the government can do away with a competitive bidding for a new contractor and instead proceed with a negotiated bidding. "I requested the board just yesterday to conduct a special board meeting to discuss this issue so we won’t waste more time. We want to know their decision. We are actually ready to bid it out, but that will take time," he said.

He stressed the government’s third-quarter target to open NAIA-3 would no longer be realistic if another competitive bidding were to be conducted.

Solicitor General Agnes V.S.T. Devanadera had earlier said her agency had issued a legal opinion on the matter, saying public bidding was not needed for the remediation, as the project needs to be completed immediately.

MIAA Assistant General Manager Junie Paras, for his part, had said the state lawyer’s legal opinion should allow them to immediately scout for a new contractor. MIAA has so far received a formal proposal from Singaporean firm CNA Group Ltd. on a turnkey basis, he said. CNA Group had yet to confirm the offer in an e-mail inquiry as of yesterday afternoon.

Turnkey is an undertaking by which the contractor supplies, installs, or purchases items for a project that is ready for immediate use, occupation, or operation. The contractor is paid after start of the project’s full operation.

In 2003, the Supreme Court voided the contract with investor Philippine International Air Terminals Co., Inc., citing irregularities. The facility has remained unopened due to disputes over compensation.

The government has been wary of Takenaka’s work, especially after the collapse of a portion of the airport’s ceiling in 2006. —

Philippine Muslim fighters see uncertain future if peace prevails in Mindanao

By Jason Gutierrez, Agence France-Presse

CAMP DARAPANAN, Philippines: After a protracted 30-year insurgency which has seen up to 150,000 people killed, Muslim rebels are facing an uncertain future as peace finally looks near in the southern Philippines.

With talks due to resume this month between the Philippine government and the Moro Islamic Liberation Front (MILF) many young Muslims in this sprawling rebel camp in Min­danao are trying to come to terms with the prospect of peace.

Government negotiators and the MILF leadership are optimistic the final hurdles to peace can be overcome by granting limited autonomy to the Muslim minority in this predominant Roman Catholic Southeast Asian nation.

For many of the 12,000 MILF rebels, especially the young, peace is likely to bring an uncertain future.

MILF chief Murad Ibrahim, in a rare interview with AFP, said he was worried for their future, especially for those born into war and the many whose parents and older relatives have died as “martyrs.”

At 58, Ibrahim is seen by many as more pragmatic and moderate than his predecessor Salamat Hashim, the Egypt-trained MILF founder who espoused continued jihad for a Muslim homeland. Salamat died of a heart attack in 2003.

“We cannot fail in this struggle for peace,” said Murad, who long ago traded his military fatigues and combat boots for gray safari suits and loafers.

“If we fail, we will be in a far worse situation.”

Murad said it was too early to talk about disarming his men as “we still have to reach a political settlement that will be beneficial to everyone.”

With a ceasefire and peace talks now entering their fifth year Murad says the longer the talks drag on “we run the risk of spoilers entering the picture.”

The spoilers he refers to are the Indonesian-based Jemaah Islamiah (JI) and Abu Sayyaf—both of which have links with al-Qaeda.

Moro fighter Abdullah, who uses one name, says he is concerned about the future.

A young man in his early 20s clutching a rusty M-60 machine gun, he is a veteran of many jungle battles and is ready, he says, to die for the cause.

“I have not been to a battle since last year,” Abdullah says, perspiration trickling down his brow. He is wearing mismatched fatigues that bears a striking resemblance to those used by Sri Lakan Tamil insurgents.

“I have had many adventures with this gun, I sleep with it and never go anywhere without it,” he says. “I cannot part with my weapon.”— “it’s not in my blood to be a farmer”—Abdullah says he is not prepared to lay down his weapon even if a final peace deal is signed.

“It’s not in my blood to be a farmer,” he said.

Abdullah’s sentiments are shared by many MILF guerrillas, notably the second and third generation fighters whose elders formed the core of the first mujaheeds who fought the insurgency in the 1970s.

Security analysts say the biggest problem faced by the government is disarming the rebels, with younger MILF fighters opposed to the peace deal seen as highly susceptible to more radicalization by groups such as the JI and the Abu Sayyaf.

“With the history of the Min­danao conflict, these groups are always there to exploit the situation,” says Julkipli Wadi, an Islamic studies professor at the University of the Philippines who has closely followed the insurgency.

“The JI and the Abu Sayyaf could form strategic alliances with these young fighters who may not want to part with their firearms,” Wadi said.

Yusuph Abisakir, the mild-mannered administrator at the sprawling Camp Darapanan that spans several towns in central Mindanao, says he hopes that the rigid command structure of the MILF’s Bangsamoro Islamic Armed Forces (BIAF) would keep cadres in line once a peace deal is signed.

“I have not seen any open resentment” to the talks, Abisakir said, adding that many of the fighters want to see peace achieved in their lifetimes.

“But of course no one will agree to give up their firearms,” said Abisakir, whose job is to give spiritual and military guidance to the more than 1,000 regular MILF fighters in the camp.

Government and the MILF are mulling the possibility of transforming the rebels into a “territorial force” to guard areas to be covered under a final peace deal. They would not be disarmed, rather than slowly integrated into government forces.

Another idea is for government to buy the guns outright and offer jobs to the rebels.

For MILF field commander Toks Guiwan, whose two young sons are also fighters, such talk of disarmament only upsets his men.

“It’s dangerous talk, my men have known no other job than to fight,” he says.

Quebec is third Canada province to invite RP workers

Charissa M. Lucci
Manila Bulletin

Quebec could be the third Canadian province to welcome skilled Filipino workers after it expressed interest to sign labor agreements with the Philippines, the Department of Foreign Affairs (DFA) said yesterday.

Quebec Premier Jean Charest earlier told Philippine embassy officials that a partnership with Manila would facilitate the recruitment of more Filipino workers which would address the labor market gaps in his province.

Quebec is "very interested in labor agreements" with the Philippines, which would increase recruitment of skilled, semiskilled and unskilled Filipino workers to Quebec under its Provincial Nominee Program, Philippine Ambassador to Canada Jose S. Brillantes reported to the DFA, quoting the Canadian Premier.

During his three-day official visit to Quebec City, capital of the province of Quebec, last week, Brillantes met Charest at the latter’s office to extend the Philippine government’s gratitude for Quebec’s unwavering support to the Filipino workers and to discuss possible areas of cooperation.

"Quebec wishes to build a strong reputation as a place where those who choose to live and work in Quebec are treated as its own citizens," Charest was quoted as saying.

The Canadian Premier also praised Filipino immigrants for being "efficient, hardworking, ambitious, and determined to improve their lives," pointing to his versatile Filipino woman employee as an example.

Among the issues discussed during the meeting between Brillantes and Charest were the sistercity agreement between Manila and Quebec City, the protection and promotion of cultural diversity and the recognition of foreign credentials.

The Philippine embassy delegation also met Yolande James, Minister for Immigration and Cultural Communities, who described the Filipino community in Quebec as "active and vibrant."

She said the province has started mapping out ways to address its labor needs, adding that it has an agreement with the federal government that allows it to select its own immigrants.

James said Quebec is offering French language courses to its immigrants.

The Philippine delegation also met with the nearly 100-family strong Filipino community in the city to disseminate information on the Philippine government’s programs for overseas nationals, and to address their labor- and immigration-related concerns.

According to the Foreign Affairs and International Trade Canada, the number of temporary workers coming to Canada from around the world has soared in recent years.

In 2006, Canada opened its door to about 8,529 Filipino workers. The figure is expected to increase following the growing demands for temporary workers.

The Philippines is expected to deploy 30,000 Filipino skilled workers every year for the next 12 years in the Canadian province of British Columbia following the recent signing of a memorandum of understanding between the two countries.

Last month, visiting Canadian Premier Gary Doer signed a memorandum of understanding with Labor Secretary Arturo Brion for the deployment of skilled Filipino workers in Manitoba.

Tuesday, 4 March 2008

PGMA signs into law Civil Aviation Authority Act of 2008

President Gloria Macapagal-Arroyo signed into law today the Civil Aviation Authority Act of 2008 that stands to update and strengthen the international framework of the country's civil avaition industry and meet the standards set by the International Civil Aviation Organization (ICAO).

CAAA 2008 abolishes the Air Transportation Office (ATO) and in its stead creates the Civil Aviation Authority (CAA), which is mandated to set a comprehensive, clear and impartial rules of the aviation industry.

Under the new law, the CAA shall be an independent regulatory body with quasi-judicial and quasi-legislative powers with corporate attributes.

The CAA shall be an attached agency -- for the purpose of policy coordination -- to the Department of Transportation and Communications (DOTC).

In her message before the signing of the CAAA, the President thanked Congress for passing the law.

''This is a good sign for our country and the world that the government continues to serve the people and push for more needed reforms to enhance good governance,'' she said.

The President pointed out that with the new law in place, ''you can now fly safely and we expect the tourism industry to continue its bullishness, and more investments will come pouring in which will translate into more new jobs for our people.''

''Today's enactment of the Civil Aviation Authority law is an opportune time to underscore the immense value of the rule of law,'' she said, even as she stressed that ''the rule of law is the foundation and protection of every citizen’s rights of peace and order in society, and of confidence in our country among investors in the Philippines and around the world, which is indispensable in attracting investment and jobs for our people.''

Under the new law, the CAA will enjoy fiscal autonomy and its personnel would be exempted from the Salary Standardization Law.

It shall be governed by a board composed of Cabinet members with the DOTC secretary as chairman.

The CAA is allowed to maintain its revenue collection of about P3 billion annually to be used for the improvement of its facilities and the training of personnel as well as improving airline safety facilities.

Under the law, no airline or plane would be exempted from paying landing or communications fees or whatever fees that would be imposed under the Act.

The implementing rules and regulations of the CAAAP are to be out within six months after today’s signing of the new law.

Transportation Secretary Leandro Mendoza said that with the new law, the Philippines is well on its way to regaining its safety status in the international aviation community.

The US Federal Aviation Authority (FAA) had downgraded the Philippine aviation status from Category 1 to Category 2 over concerns about the safety of the country's airports and air carriers.

With a centralized aviation body, it is expected that the downgrade would be reversed in June when the FAA undertakes a new assessment of the safety standards of the country’s airports and air carriers, Mendoza said.

President Arroyo tells detractors to wait for 2010 elections

Amid calls by her detractors to resign, President Gloria Macapagal-Arroyo declared anew today that she will step down only when her term ends in 2010.

“Until that day, I will continue to push for reforms so I can hand over a strong nation to the next leader,” she said in Filipino.

The President made the statement before signing into law the Civil Aviation Authority Act (CAAA) of the Philippines of 2008, in simple rites held at the Rizal Hall of Malacanang.

“I will be true to the Constitution and to myself who has been mandated to leave the post when my term ends in 2010,” she said.

The President assured her audience that included Vice President Noli de Castro, legislators and the diplomatic community, that “in the Philippines, there is and there shall continue to be due process, rule of law, and utmost respect for the Constitution. This is my pledge to you as your President and commander-in-chief.”

She added that she agrees with her critics that the law and the country should be above politics and personal popularity.

She pointed out that she would “adhere to the law because this was what every elected official has promised to do even if my critics refuse to understand and give political color to it.”

“That is why we uphold the principle of due process in investigating and adjudicating criminal allegations against any citizen, whatever the political cost. No one’s rights must be sacrificed just to spare government from the ire of protesters and the fire of politicians,” the President said.

After the CAAA signing ceremonies, a Cabinet meeting was held at the Aguinaldo State Dining Room to discuss the International Law of the Sea and the Philippine claim over resource areas within the country’s territory, including the Spratley group of islands.

“Through this claim, we shall advance the rights and interests of our nation in harnessing these rich resources,” the President said.

She also thanked former Solicitor General Estelito Mendoza for extending his “unrivaled expertise to help strengthen the Philippine claim on this very valuable portion of our national patrimony.”

Developer to change Metro Cebu skyline

By Rhia de Pablo
The Freeman

Keen on fueling Cebu’s robust business community and complementing the fast-paced shift of the modern Cebuano lifestyle, real estate developer J. King and Sons deems to change the skyline of Metro Cebu with their series of high rise development projects.

After inaugurating the tallest tower in the Visayas and Mindanao area late last year, J. King and Sons has recently inaugurated two more of their development projects to be undertaken this year: their Ultima Residences in Ramos and their Ultima Prime, the fourth tower in Fuente.

“With all our high rise investments going on, we want to change the skyline of Cebu in the next three to four years as we want to contribute to the development of the city and generate employment that will be complementary to the growth of the local economy,” said Richard King, the CEO of J. King and Sons in an exclusive interview.

Ultima Residences in Ramos is a 30-storey condotel housing development aimed to provide middle to higher income market ranges a descent home at the heart of Metro Cebu. The property has already been sold 75% even before it broke ground. The Ultima Prime on the other hand provides 28 levels of exclusive and low density high-end housing facility considered to be the “crème de la crème” of J. King’s condominium housing developments.

But despite critics saying that Cebu is not yet ready for condo living, King pointed out that condominiums nowadays actually provide real estate investors with practical offers both beneficial and economical considering the increasing cost of gasoline and the longer time consumed for out-of-town travels due to the city’ rapid traffic congestion brought about by the multiple developments and business activities within the area.

“We are offering a different lifestyle that will enable them to work and live within the city and at the same time earn from their investments. Buying a house outside the metro is not logical these days because it can be a waste time and money for gasoline in the long run” added King.

He further added that few years back, Cebu was not yet ready to adopt condo living but with the lifestyle shift seen these days, it now serves several advantages for residents working or studying in the city.

“We never thought of going into high rise development but having seen that most residents from urbanized cities in the world are living within high rise buildings and that Cebu is fast becoming an urbanized metropolitan so we started with our conquest in Fuente,” revealed King.

Having seen Cebu’s fast adaptation of urban living that is becoming similar with Manila, J. King and Sons believe that the sky rise developments they have started will mark the solid boom in the city’s real estate industry.

“Cebu has already attracted several foreign investments and this being the case, the city is also fast becoming a metropolitan city that can already accept the idea of high rise living. With the congestion of the city, the concept now for developments is to go up,” said King.

He also added that the good number of buyers from the net composed of overseas Filipino workers, balikbayans and foreigners who have heard a lot of about Cebu are also fueling the fast development of the high rise development in Cebu.

Cebu hotels post highest occupancy rate last year

By Ehda M. Dagooc
The Freeman

Last year, Cebu has achieved its highest occupancy rate in the history for upscale resort accommodations, thus the need for five-star accommodations is an immediate concern for Cebu’s tourism industry.

Department of Tourism (DOT-7) regional director Patria Aurora Roa said that it was the first time in the history of Cebu’s tourism industry that expensive rooms, such as those five-star resort rooms posted nearly 90 percent average occupancy rate for the whole year of 2007.

“The need for more five-star room accommodations had been our problem in Cebu. Last year’s figure in high occupancy further indicated Cebu’s need for high-end accommodation,” Roa said in an interview with The Freeman.

From January to February of this year, resorts in Mactan Island, specifically those five-star facilities enjoyed an average occupancy rate of 85 percent.

Roa hopes that this figure may encourage other investors to fast track their plans to build expensive and high-standard resort rooms in Cebu. It may not be necessarily in Mactan but in other islands and areas in the province as well.

In a separate interview with Abaca Boutique Resort and Restaurant owner Jason Hyatt, he said that he is set to open nine exclusive Abaca suites in the next few weeks.

Abaca will be the first entity to open a super high-end boutique resort, or personalized accommodation facility in Cebu with overnight room cost ranging from P19,000 to P25,000.

Abaca will also pioneer the trend in providing the extra high-end service standard for every room with dedicated personal butler in some of its few expensive suites.

According to Hyatt, the company is going to have a dry of the first nine suites for commercial operation. Depending on the result, the company is willing to add more chic and expensive rooms maximizing the 5,000 square-meters property in Punta Engaño, in Mactan Island.

Five-star resort Shangri-La’s Mactan Island Resort and Spa is also planning to add more rooms, to add to its over 500 five-star accommodation facilities.

Roa said Cebu needs five-star accommodation facilities, as it is strongly attracting wealthy tourists from all over the world.

Also, in an earlier interview with Hong Kong based businessman Martin S, Yeung, he announced that his family’s company, MSY Holdings Inc., will soon open a six-star resort facility off in the northern coastline of Daanbantayan.

Another boutique resort will also be built soon by the company in Malapascua Island, which is considered to attract the affluent market from all over the world, including Hollywood personalities.

Arroyo signs law creating Civil Aviation Authority


MANILA, Philippines - President Gloria Macapagal Arroyo on Tuesday signed into law Republic Act 9497, paving the way for the creation of the Civil Aviation Authority of the Philippines (CAAP).

President Arroyo said the creation of the CAAP will ensure safer and more secure flights, and that it has been part of the bills she has been asking Congress to pass.

The move came months after the United States-based Federal Aviation Authority (FAA) downgraded the Philippines' aviation rating.

To recall, the US FAA on December 26 revised the Philippines' aviation safety oversight category from Category 1 to Category 2 due to "serious concerns" about the ATO's oversight of air carrier operations.

Category 2 means the FAA has assessed the Philippine Civil Aviation Authority as not being in compliance with ICAO.

The Philippine Travel Agencies Association had expressed alarm over the downgrade saying it will negatively affect the country's tourism industry. Also, the country's flag carrier Philippine Airlines stands to lose 10% of the revenues of its US operations as a result of the downgrade.

Under the proposed bill that was approved by the Lower House, CAAP - which will be attached to the Department of Transportation and Communication (DOTC) - is envisioned to have the power to generate, dispense and retain its revenue and income independent from the budgetary restriction of the Congress and the power to hear and decide civil aviation cases.

The CAAP Board of Directors will have the DOTC secretary as chairman ex-officio and the director general as vice chairman. Members include the secretaries of Finance, Foreign Affairs, Justice, DILG and one from the private sector to be appointed by the president of the Philippines.

The director general will be the chief executive officer of the authority.

Baguio ecozone investment inflow up


Baguio City Economic Zone (BCEZ), one of the four public ecozones under the Philippine Economic Zone Authority, expects to realize a minimum of P6.887-billion investments inflow this year doubling last year’s P3.667 billion following the developments of more ecozones and tourism retirement facilities within Baguio City, the summer capital of the country.

In a report to PEZA director-general Lilia B. de Lima, BCEZ zone administrator Tereso O. Panga said these new ecozone developments within the summer capital of the country include SM Cyberzone, Alpha PCM and PR Halili IT.

Panga also cited the development of three tourism ecozones – John Hay tourism; Hankyung Retirement Ecozone and Baguio Country Club Retirement Ecozone.

In addition, PEZA’s annexation of a property by the Bases Conversion Development Authority will pave the way for Moog Control Corporation’s $ 105-million phase 4 expansion program.

According to Tesoro, these projects form part of the 12 committed investments for the ecozone this year.

Projects with pending PEZA Board approval include the Baguio Country Club Retirement Ecozone, a new project with an investment cost of P100 million.

Korean-owned Hankyung Retirement Ecozone has also a pending registration with PEZA. It has an estimated cost of $ 10 million.

Other new projects with pending applications include JFS Precision Technology Corp., a precision tooling venture with P30 million investments; Mobilution, a Korean own mobile phone folder assembly and CDMA manufacturer for $ 1.5 million investments; Apha-PCM IT building and PR Halili IT Center with P5 million each investments.

The expansion projects for this year are estimated to add P4.472 billion in new investments including Moog’s phase 4 expansion project with $ 105 million. Moog, an American-owned firm, is a supplier to Texas Instruments, which is BECZ’s single biggest exporter and one of PEZA’s top exporters.

Other expansion projects include NTUI Phase 2, a Filipino-owned call center with P4.5 million project cost; Sitel (formerly Clientlogic) Phase 3 with investments of $ 5.5 million; LTX Asia International Phase 2 with $ 1.3 million; Contaq Masters, a Filipino-owned facilities provider with P5 million; and a Norwegian facilities provider.

In 2007, BCEZ reported a slight 5 percent decline in total exports of $ 3.373 billion from $ 3.538 billion in 2006.

Panga explained in his report to De Lima that the slight drop in overall annual exports in 2007 over 2006 was a result of Texas Instruments’ slightly lower sales volume.

BCEZ’s output accounts for 98 percent of the region’s manufactured goods. Its electronics exports accounted for 39 percent of the Cordillera Autonomous Region’s total gross output and its 2 percent gross income tax remittances to the local government unit averages P100 million.

In terms of employment, Panga reported that BCEZ posted a 28 percent increase in average monthly employment with total direct jobs generation of 7,230.

Monday, 3 March 2008

Millennium Development Goals on track - President Arroyo

CALAMBA CITY, Laguna – The Philippines is right on track to achieve the Millennium Development Goals (MDGs) agreed upon by the countries of the world way before the target date of 2015, President Gloria Macapagal-Arroyo said today.

In her speech opening the Women's Month celebration at the New Calamba City Hall here this morning, the President said the government's efforts to achieve the MDGs has earned the Philippines the Top 6 spot among countries with the highest rate of goals achieved.

"On schedule tayo sa pagtataguyod ng UN Millennium Development Goals (MDGs) na gender equality pagdating ng 2015," the President said.

Aside from gender equality, the MDG is also composed of "eradicating extreme poverty and hunger; achieving universal primary education; reducing child mortality; combating HIV and AIDS, malaria and other diseases; ensuring environmental sustainability; and developing a global partnership for development," the President said.

"Pang-anim tayo sa pangkalahatan sa buong mundo sa gender parity. Tayo lamang ang bansa sa Asia na nasarado ang gender gap kapwa sa edukasyon at kalusugan, at isa lamang sa anim sa buong mundo na nagakawa nito," the President added.

The eight Millennium Development Goals (MDGs) – which range from halving extreme poverty to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015 – form a blueprint agreed to by all the countries of the world and all the leading international development institutions.

They have galvanized unprecedented efforts to meet the needs of the world's poorest.

Tagbilaran airport landing

By Pilotokoto

Economy can grow by 8 to 8.3%, says Habito

Philexport News and Features
The Philippine Star

The domestic economy can grow between eight and 8.3 percent this year in spite, not because, of government.

The bold forecast was made by economic professor and former economic chief Cielito F. Habito during an economic briefing he made before members of the elite Makati Business Club (MBC) and the Management Association of the Philippines (MAP) in a hotel in Makati City last week.

The country’s economic chief during the Ramos administration revealed that the Ateneo Center for Economic Research and Development (ACERD) which he heads, used the real business cycle model of measurement to arrive at such a high growth forecast.

“We used the same model in arriving at a seven plus growth rate at the beginning of last year but we suppressed our findings because it was hard to believe it could happen,” he admitted. The domestic economy was reported to have grown by 7.3 percent last year.

He, however, warned that there are signals that may weigh down the projection. These include falling imports, falling exports and the appreciating peso.

He also pointed out some excess baggages that continue to weigh down on sustainable growth in the country namely, tax evasion, smuggling, massive graft and corruption and regulatory capture.

Most of these baggages are handiworks or with the connivance of high officials in government which prompted the economist to stress that the projected high growth will happen despite, instead of because, of government.

Among the plus factors, he said, is the continued expansion of foreign investments in the Philippines despite the ongoing political circus. “The foreigners know something in our country we do not know,” he told the largely Filipino businessmen audience.

The problem on low investment rate here, he continued, is that Filipino entrepreneurs are not investing in their own country.

He explained during an interview after his speech that the large investments for this year will be pushed through even with the trouble in the political front. He gave as an example the setting up by Texas Instruments of a larger electronics manufacturing plant in the Clark Special Economic Zone and the expansion program for the increase of water supply for Metro-Manila.

“The water supply expansion plan has to be done or Metro Manila will be suffering from water shortage problems by 2010,” he explained.

Explaining why people seem not to feel the impact of the 7.3 growth rate last year, he said that geographically, high growth happened in Metro Manila, Metro Cebu and other urbanized centers.

“Growth is not happening in the rural areas where jobs are needed most,” Habito explained. —

World Bank hails RP fiscal performance

By Iris C. Gonzales
The Philippine Star

The World Bank (WB) has lauded the government’s fiscal efforts, noting that the budget deficit is almost zero.

Nevertheless, the Washington-based institution is ready to extend at least $800 million a year or $1.7 billion for the next two years if the Philippine government needs financial assistance.

Bert Hofman, World Bank’s Philippines country head said the amount is in the lender’s updated country assistance strategy program earlier agreed upon with the government.

Hofman, however, noted that fiscal authorities are doing good in their efforts to contain the deficit and may not need to borrow as much.

“Right now they are doing relatively in the fiscal side so they have not as much need as before to borrow so they probably won’t make it to $850 million,” he told reporters over the weekend.

But while he noted that the government’s budget deficit is almost zero, he said that a lot of the deficit reduction has come from expenditure reduction.

This, he said, means that “not enough were spent on a couple of things such as infrastructure, health care and education.”

The World Bank hopes to see the tax-to-gross domestic product (GDP) ratio go up so the government can do more.

“The other area that we feel is very important for development performance is the investment climate in the Philippines. Investment is still relatively low and it is not that easy to invest and there is a lot of difficulties in investing in the Philippines not only because of the rules and regulations but also the competitive situation has its challenges. So we hope to see some improvements there then we could even further increase our commitments,” Hofman said.

The government hopes to balance the budget this year after decades of incurring deficits. Last year, the deficit stood at P9.4 billion.

The Bureau of Internal Revenue (BIR) has a collection goal of P845 billion while the Bureau of Customs (BOC) has a revenue target of P254 billion.

Multilateral lenders such as the World Bank are keeping a close watch on the government and whether it would be able to meet its goal of balancing the budget this year.

Sunday, 2 March 2008

High prices of mining commodities perk up country's mining sector

Office of the Press Secretary

Forecasts by mining authorities that the prevailing high prices of mining commodities could continue until 2010 or even 2016 bodes well not only for the mining sector but also for the whole country, according to Press Secretary Press Secretary Ignacio R. Bunye.

The growth of the mining “industry will surely allow ordinary Filipinos to benefit, not just through employment in mining companies amid the surrounding communities, but by investing in, and profiting from, mining stocks,” he said in his column The View from the Palace.

Bunye was commenting on the outcome of the highly successful lecture series, Going Public and Building Confidence – How to Undertake an IPO, in Makati City last Friday.

The eighth in a series of lectures on the mining industry organized by the Chamber of Mines of the Philippnes and the Philippine Stock Exchange over the last few months at the Intercontinental Ballroom in Makati City, the lectures drew various prominent businessmen, mining professionals, service providers, investment bankers and mining company executives.

The forum attendees were “undoubtedly encouraged by the forecasts of the speakers from UBS AG that today’s high prices for mining commodities can be expected to continue until 2010, or even 2016 if the demand from China continues,” Bunye said.

He noted that investors in the “mining industry are among the most appreciative of the fertile ground for investment that the President (Arroyo) has worked hard to achieve.”

The Palace official pointed out that also in Manila last week was a mining mission organized by Austrade, which included visits outside Metro Manila.

“Members of the (Austrade) delegation who have been traveling here for a number of years have had a chance to compare the ‘wait and see attitude’ of many companies from just a few years ago back to their ‘gung ho’ attitude about the Philippines today,” Bunye said.

“We certainly should not let them down by continuing to streamline procedures in the government bureacracy, ensuring consistency in policies, and providing stability in leadership,” he added.

The government foresees investments in the mining sector to exceed $10 billion by 2011.

This year alone, investments in the sector is expected to reach $892 million, and surge further to $1.4 billion in 2009.

China’s demand for mining commodities, which is expected to grow by about 10 percent, is fueling a mining boom in the country which has huge mineral resources waiting to be tapped.

Manila madness makes me out to be a first-timer

Banker/Road Warrior
South China Morning Post
March 02, 2008

A lot of the people I come across on planes seem to be experiencing air travel for the very first time ... particularly this morning. After explaining to the chap who was in my seat when I got on board the plane that the large numbers and letters on his boarding pass are an indication of where he is expected to sit, I am squashed up against the window in economy class watching four stewardesses try to get 200 people, each with two or three large plastic bags of carry-on luggage, to sit down, stop talking on their phones, leave their seats upright and fasten their seat belts long enough for the plane to take off.

It doesn't work of course. As soon as the flight attendants do up their own seat belts, out come scores of mobile phones, and texting and calling begin again.

And what am I doing here in this economy class pandemonium?

Well, I'm on my way to Manila and, thanks to several factors, I'm flying economy. But the flight is fairly short, and with my iPod on my head and my eyes closed, I manage to endure the trip without having a panic attack.

Once on the ground in the Philippines, everyone stands up the moment the plane touches down. The flight attendants go into action, but to little avail.

Once off the plane, I endure the mild embarrassment of not tipping the three-piece band playing "When the Saints Go Marching In" as I walk past.

Manila must be the only airport in the world that has live music playing as you disembark. It must be very disheartening to watch thousands of people rush past without so much as a nod.

Once through immigration, I find my way to my car and, although the driver gets lost on the way, nobody at the first meeting seems to mind my late arrival.

Meetings in the Philippines are always entertaining. Any major client is almost always going to be a family company. So the meeting will include a lot of people with the same last name, and a surprising number of folks who look like teenagers. It is important to understand that you are meeting the right people--those teenagers have more money than you can imagine.

As soon as you begin speaking, the entire room will take out at least one of their phones and start sending text messages. Don't take it as a sign that they're not listening. People here are quite confident texting while listening to a presentation from a banker, just as they can text while watching a movie, text while having dinner with their wives, or text on one phone while talking on another.

I'm returning the same day and I soon find myself back at the airport. Wherever I can I use e-tickets, a brilliant innovation that makes it unnecessary to carry a plane ticket any more. Unfortunately, it has its downside.

"Passport and ticket," says the security guard at the entrance. I hand over my passport and say: "I don't have a ticket. Mine's an e-ticket."

"Please show me the printout of your e-ticket," says the guard.

"I don't have a printout. I get an e-ticket so I don't have to carry a ticket or anything else."

"Sorry. No entry without a ticket or printout," he explains without even the slightest hint that he sees the problem this clearly creates for me.

After explaining myself at length to him, I learn that in another part of the airport building it is possible to get a printout.

Once I find this door and someone eventually turns up to help all of the people waiting, I am able to get hold of a printout of my e-ticket. By this time, unfortunately, I am running very late.

I cut queues, I run through the terminal, I apologise to people I bump into, and I argue with the airline staff who tell me that I'm already too late and I make it just on time. I slump red-faced into my economy class seat, still clutching my passport, my shoes and my belt, which I didn't have time to put back on after the security made me take them off.

As I am catching my breath, I'm sure I hear somebody behind me say: "A lot of peple you see on airplanes are travelling for the very first time."

(Contact Alan Alanson at

Construction of P5-B Cagayan Int’l Airport to start this year

By Charlie Lagasca
The Philippine Star

TUGUEGARAO CITY – The construction of another international airport is set to start this year as part of the national government’s continued efforts to transform this country’s northernmost part into a world-class tourism and business investment destination.

Jose Mari Ponce, administrator of the Cagayan Economic Zone Authority (CEZA), said that the construction of the airport, with an initial funding of P5-billion, would be a joint venture between CEZA and a multinational private firm with technical and supervisory assistance from the Department of Transportation and Communications.

The airport, which would be similar to that of the Diosdado Macapagal Airport in Clark Field, Pampanga, in terms of technology and capability, would be co-financed by a Spanish bank through an open credit scheme, Ponce said.

“It is a priority for CEZA to build the airport this year to complement the rapid development of the Cagayan Special Economic Zone and Freeport,” said Ponce, also the CEZA’s chief executive officer.

Based in Santa Ana, Cagayan, CEZA, which is under the Office of the President, was created in 1995 through Republic Act 7922. It covers the whole of Santa Ana town and the neighboring islands in the municipality of Aparri.

At present, CEZA has 68 local and foreign investors with initial combined investments of more than P8 billion, all for the development of CEZA as a first-class tourism destination and a major transshipment point for trade in the Asia-Pacific rim.

The airport, Ponce said, will have a runway of more than P1,500 meters to accommodate bigger aircrafts that would be expected to come in regular flights once the CEZA goes into full operation.

“The airport will be complemented by various infrastructure and information technology projects that will solidify the position of the Freeport and economic zone as a tourism and investment destination,” he said.

While the airport is under development, CEZA, he said, will be using the newly developed San Vicente Airstrip in Santa Ana to accommodate chartered flights from Manila through a joint use agreement with the Philippine Navy.

To complement the soon-to-be-inaugurated airport, the CEZA also has an international port in Port Irene.

To date, the construction of a multi-million-peso international hotel whose groundbreaking was led by President Arroyo last year is now ongoing while three online casinos managed by various international investors are operational and are being patronized by tourists from overseas.

Congress, public works and JPEPA update

Manila Bulletin

Nograles assures House approval of vital measures
Amid the political noise, House Speaker Prospero C. Nograles yesterday assured the nation of the passage of important measures by Congress aimed at restoring the people’s confidence in government.

Good roads perk up economy
The Department of Public Works and Highways (DPWH) is out to prove that good roads are the key to the speedy movement of products and services, thus perking up the economy.

Economic study foresees inflow of Japanese capital, technology
The Japan-Philippines Economic Partnership Agreement (JPEPA) will lead to the massive flow of Japanese capital and technology into the Philippines and these will be directed to help develop "sunshine areas" such as information and communication technology (ICT), environment and natural resource management, road building technologies, and several other current and emerging national concerns, a study made by the Philippine Institute for Development Studies (PIDS) has said.