Saturday, 25 April 2009

Gov’t remains hopeful Philippine economic growth will continue


MACTAN ISLAND, Cebu (PND) -- Contrary to the pessimistic forecast of the International Monetary Fund (IMF) of a zero growth of the Philippines’ gross domestic product (GDP), President Gloria Macapagal-Arroyo said her administration is looking forward to continued economic growth this year.

“As a result of dramatic reforms in revenue collection and generation, as a result of fiscal controls and banking and financial reform, we hope to continue our economic growth this year,” she told the 28th General Assembly of the Asian and Oceanian Stock Exchanges Federation (AOSEF) at the Mactan Shangri-La Resort, Thursday.

The President made no mention of the zero GDP growth forecast but Malacanang had earlier stated that the IMF projection was negated by current realities, notably the continuing rise in the remittances of overseas Filipino workers (OFWs), the increase in deployment of Filipino workers abroad and the adjustments in the budget deficit ceiling to pump prime the economy.

On Wednesday, the IMF lowered the Philippines growth forecast from 2.25 percent to zero, citing the twin problem of tighter credit conditions and lower global demand that have affected the economies of the Association of Southeast Asian Nations (ASEAN).

Bangko Sentral Gov. Amando Tetangco shared Malacanang’s optimism on the economy, saying the IMF forecast was “unlikely” to happen.

He was quoted as saying that “in the past seven years, the IMF has consistently underestimated Philippine GDP growth forecast by an average of about half a percentage point.”

In her speech before 80 top leaders of the 17 stock exchanges that comprise the AOSEF, President Arroyo noted that “the Asian economies have been weathering the global crisis better than other regions…”

“But that doesn’t mean that there are no challenges that we are facing. Indeed, today, the global challenges faced developed and developing nations alike. But, I am very glad that Asia is weathering it well.”

She pointed out that “in spite of the global economic downturn, like many countries in Asia, the Philippines is not standing still.”

“We have weathered the worst of the global crisis this far. That doesn’t mean we have not been affected. But we are holding our own,” she stressed.

The President said she remains “cautiously optimistic that our resources and plans will allow us to manage our way through this difficult time because we ‘rebooted’ our economy many years ago, and this has held us in good stead.”

“As members of the stock exchange, you must also simultaneously invest in making your own organization and your own industry efficient and competitive,” she urged the AOSEF.

“Investing to improve your methods of cooperation and synergy, investing to turn market challenges into market opportunities, investing to continue to play a role -- a leading role in the recovery of the economies of the region, investing in the renewed prosperity of the capital markets that you collectively represent,” she added.

Calling for a “pan regional body” to be dubbed the Asian Economic Council (AEC), the President pointed out that “an Asian Community, including Oceania, will strengthen our regional economy, our security and our prosperity.”

“During this time in the world -- as we all know, there are strains on alliances from the Middle East to the WTO, and we are facing, as you all know, one of the most powerful economic downturns in modern history so -- it is essential that new, vital alliances be forged to keep the world stable and strong.

“Some sort of Asian Community would certainly be a bold step in that direction. And your Federation uniting the bourses of Asia, East Asia and Oceania, is a very good start,” the President said.

Paging Madam President: please help these guys out of the SLEX traffic jam!

Peter Wallace
Manila Standard

I’m angry, very angry, and I can’t understand why no one else is. It used to take me 30 minutes to go from Alabang to Makati in non-peak hours. Now it takes up to an hour and a half! I understand this situation will exist for the next 18 months or so. And all I get is a small sign that says: “Sorry for the longer travel time.” Well I’m sorry but I can’t accept it.

I’ve looked at the construction and it seems pretty clear to me that one lane can be given back to us on each side with more careful arrangement of the equipment and materials. It currently seems to be laid out for best efficiency for the contractor. Fine—if it doesn’t inconvenience tens of thousands of people. But it does.

The three-foot-wide concrete barriers can be replaced with three-inch-thick steel barriers and everything can be located between the pylons with a minimal walking path on one side (southbound) past the pylons. Also, work can be done at night when traffic is light and stopped during peak hours with the barriers brought right in. The extra cost and inconvenience to the contractor is nothing compared to the huge cost of thousands of engines idling gas away and leading us even quicker into global warming, let alone the cost of lost business time of tens of thousands of workers.

There is no attempt to manage traffic flow. Although they now have a designated lane for cars, buses and trucks (what else is there?) and another for cars only—that crashes into the construction as you near the skyway. It was the same with the expansion of the viaduct and now also is with the upgrading of SLEX, traffic is disrupted. It costs money to do it properly and I suspect that was not budgeted for in the government proposals to do the work. The contractors, of course, aren’t willing to use their own funds. It would be easy enough to amend the skyway and SLEX projects now to provide funds for traffic management. Something government should seriously, urgently consider.

The upgrading of NLEX shows it can be done. There the construction company did introduce traffic management as part of its mandate to do the project. As those of you who traveled at that time know, disruption to traffic flow was minimal and only for short periods in those instances where it couldn’t be avoided.

The President is reputed to be a micro-manager, here’s a good one for her to micro-manage. As an economist, she’d well understand the economic and social cost of this dislocation—and give us back another lane. Some traffic guidance officers also might help to speed traffic through if they’re properly trained. You can be sure the “cars only” lane won’t be obeyed unless there is policing of it.

If you too are angry, e-mail me (it’s at the end of the column). Let’s force an improvement. Or perhaps the contractor, if he reads this, will just make the changes anyway. Or show me why it really can’t be done.

Thursday, 23 April 2009

Philippines ready for recovery -- HSBC

Erik de la Cruz
Business Mirror

THE Philippines and the rest of Asia now appear to be on the road to recovery after seeing the worst impact of the global financial crisis on their economies in the first quarter of 2009, and the region will likely decouple itself from a possible second recessionary episode in the US and Europe.

Frederic Neumann, senior Asia economist at HSBC, said on Wednesday the Asian economy has entered a “transition” period after bottoming out in the first quarter, and looks set to stabilize in the second half of this year.

“We are probably already in the upswing,” Neumann told reporters. HSBC expects to see “very strong” growth in Asia in the second half.

Economic indicators in the first quarter were still “fairly negative” but second-quarter numbers should be better than what was seen in the first three months, he said.

For the Philippines, he said the main concern was the impact on consumer spending of the expected slowdown in remittances of Filipinos abroad.

“But so far the number is remarkably resilient. We were surprised how strong the numbers really are,” he said.

Remittances in the first two months of the year posted an annual 2.5-percent growth to $2.6 billion. The Bangko Sentral ng Pilipinas (BSP) attributed the increase to the rise in deployment of Filipinos abroad and the slowdown in layoffs.

In a worst-case scenario, Neumann said a 20-percent drop in remittances is possible this year. But a flat growth in remittances, which is what the BSP expects to see this year, cannot be ruled out, he said.

The Philippines is not expected to fall into recession but Neumann said HSBC has a “conservative” growth forecast of at least 1 percent for the country’s gross domestic product this year. The government has scaled down its growth estimate this year to 3.1-4.1 percent from 3.4-4.1 percent previously, taking into account the weakening of exports.

HSBC is looking at growth of at least 3 percent for the Philippines next year.

Neumann said the worst may be over as far as the US and Europe are concerned, but a strong recovery for those regions is not expected anytime soon.

“In any financial crisis, there is always a risk of a second dip. Now we’re seeing a sharp recession, which will be followed by a period or recovery, but then another episode of recession is possible,” he said.

“Early next year, we may see a second, mini-recession.”

It will take two to three years to nurse the financial system back to health, he said.

That’s the bad news. But the good news, he said, is that a “fundamental decoupling” of Asia from the West is now possible.

Neumann said there are “underlying forces” which will “lead to a fundamental disengagement of emerging markets from the developed world.”

“In our view, (Asia is) going to avoid the second dip that is expected in the US,” he said, referring to the “mini-recession” expected early next year.

Asian economies, he said, will be supported by domestic demand, which will likely get a strong boost from the fiscal stimulus plans in the region.

“On average, the stimulus packages in Asia are twice as big as those in the West,” he said. The Western economies, however, are the ones in deeper trouble.

Falling inflation in the region should also encourage consumers to spend, Neumann said.

“With inflation coming down, interest rates coming down, oil prices coming down, that should provide relief to domestic consumption,” he said.

Neumann said Asia’s strong financial sector should also help it decouple from the troubles in the West.

“Banks in Asia are fundamentally sound and we see excess liquidity in the banking system in the region,” he said. Those funds will help stimulate economic activity.

Politics and the stock market

John Mangun

The other day, I was speaking to a new acquaintance, a man named Bobby. We started talking, as “old men” often do sometimes, about the past. Then we caught up to the present and finally got around wondering about the future.

It never fails, though. At some point in the conversation, any new Filipino friend will make a comment to the effect that there is too much politics in the Philippines, and that is a major problem creator. Perhaps because I am an adopted child of the Philippines, this talk about bad politics comes almost as a Filipino apology of some sort to me.

I have been around this planet and this country long enough to know that the political scene in the Philippines is not much worse than most countries and much, much better than many. At least the Philippines has never had to evacuate foreign heads of state out by helicopter to avoid being trampled by rampaging protestors like they just did in Thailand.

And then when I dare ask the specific question of how Filipino politics has had such a perceived negative effect on the country, the answer never seems to fit with my question. But Filipino politicians are so corrupt, I am told. They say that all I have to do is just look at the elections here.

I hate to be a killjoy about the electoral process, but the recent protests in Thailand were all about ousting the current prime minister who “stole” the last election with the help of the military. And there are people in the USA still whining and complaining about the 2000 and 2004 presidential elections long after the winner has left office. Even two USA Senate races, voted on in November 2008, are still undecided because of alleged vote-padding by the poll workers. Sounds familiar, doesn’t it?

When it comes to corrupt politicians, though, the best example I am told is the “pork barrel” spending of public money to win elections. I hesitate to mention that both the term and practice of the “pork barrel” was invented in the 1870s by the Americans.

Right before the election, the local mayor or congressman would bring the wagon up to the front of the local saloon or bar, and unload a big barrel of salted pork so the boys would have some pulutan to go with their beer and whiskey while deciding who to vote for come election day. I bet politicians can say “pork barrel” in a hundred different languages.

However, I figure that there must be some truth to the idea that politics must have some negative or positive effect on the economy. I am just not sure how to measure that effect. I am a stock-market person, so maybe where I should be looking is at the market-price action as it relates to politics.

In the Philippines, we are probably fortunate that our legislators do not get heavily involved in trying to micro-manage business through legislation like they do in the West. Of course, we do get some attempts at expensive and silly laws that cost everyone money, based on some human global-warming fantasy. And occasionally, politicians with too much spare time and access to the Internet pass laws like the one requiring cell phones to be turned off at gas stations. At least that unwarranted hysteria did not cost us much money and did make some profit for the sign painters.

Perhaps one significant difference between the Philippines and the USA is that politics seems to go on here 365 days a year even when the Congress and Senate are in recess. In the USA, the legislators cannot do any damage to business and the economy when they are out of session and not passing bad laws.

So I did some research on how the Standard & Poor’s (S&P) 500 stock index performed with the US Congress in session and when they were off the job.

Between January 1, 1965, and December 31, 2008, when the US Congress was hard at work, the S&P 500 Index went up at an annualized rate of +0.31 percent. During those times that they were not at “work,” the annualized return was +16.15 percent. Between 2000 and 2008, the “Congress” effect was greater. Down 12.45 percent when in session; up 8.81 percent when they were on the road. The lesson: You won’t make money when Washington DC is running things.

Next year we have a presidential election. What might we expect between now and then?

Ignore the economic news. Forget brilliant stock-market analysis. Just place a big investment on the political process no matter how “bad” you think Philippine politics is.

In 1991, prior to the 1992 Ramos election, the stock market rose nearly 50 percent. Even the 1997 crisis could not stop a good rally prior to the Estrada election. And before May 2004, the market increased by about 15 percent. So it looks like you should follow a variation of that old stock-market formula; buy on the rumor (of the election) and sell on the fact (of who wins).

So buying stocks this year knowing that there will be an election next year will probably be a safe, profitable bet. I am going to say that the next time Bobby tells me that politicians are good for nothing.

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Wednesday, 22 April 2009

Philippines closely monitoring emergency employment program


Manila (PND) - President Gloria Macapagal-Arroyo has directed Cabinet officials to strictly monitor the implementation of the government’s emergency employment program particularly in Region IV and Bicol to immediately provide employment to Filipino workers affected by the global economic slump.

In a media briefing this afternoon in Malacanang, Press Secretary Cerge Remonde and Cabinet Secretary Silvestre Bello III said the job monitoring was focused particularly on Regions IV-A and IV-B, and the Bicol region which have been affected by a high rate of job displacements amid the
global economic crisis.

Economic zones in Laguna and Cavite employ thousands of Filipino workers.

“In two weeks time, the Cabinet officials will be monitoring the implementation of all pending projects especially the CLEEP or the Comprehensive Livelihood and Emergency Employment Program of government,” Bello said.

President Gloria Macapagal-Arroyo has instructed all government departments to set aside 1.5 percent of their monthly operating expenses (MOE) to fund livelihood and employment projects under CLEEP.

Remonde said the 1.5 percent savings to be generated would reach a total of P7 billion a year, enough to finance 180,000 emergency employment for local workers.

Bello said National Anti-Poverty Commission (NAPC) Secretary Domingo Panganiban has reported that the implementation of CLEEP has generated emergency employment for 75,000 workers.

Bello added that job prospects are getting brighter, citing a report of the Department of Labor and Employment (DOLE) that more than 12,000 of the 30,000 workers displaced as a result of the global financial meltdown have already been rehired.

Bello said more workers will find employment as the Department of Public Worlks and Highways (DPWH) has been directed to create an additional 500,000 jobs to help the poor and spur the economy in light of the persisting global economic crisis.

Philippines' next international airport construction ahead of 2012 target

Passenger Terminal Today

Officials at Laguindingan Airport, the first international airport for Northern Mindanao, the Philippines, expect to see the construction reach 50 percent completion by the end of 2009. They predict construction will be complete by mid-2010. “We are even ahead of the accelerated target,” Misamis Oriental Governor Oscar Moreno said. The new airport has an estimated cost of US$167 million.

Moreno’s optimistic projection is matched by project manager Della Capicenio. She said that the first international airport in Northern Mindanao would be completed way ahead of schedule since it is now more than one-third complete. The airport is targeted to be fully completed on January 17, 2012.

Moreno said that based on the completion rate of the project, the case pending before the Court of Appeals regarding the remaining contested areas covered by the airport project has not really affected its construction. The threat of the tribal war by an indigenous people’s group affected by the airport project has not deterred Korean contractor Hanjin Heavy Industries and Construction from full-time construction.

The airport project is funded by a loan from the South Korean government under the Economic Development Cooperation Fund totalling US$106.73 million, with the remainder of funds coming from the Philippine government.

Philippines cranks up infrastructure spend

By Darwin G. Amojelar
Manila Times

THE Philippines cranked up spending on infrastructure projects to stimulate economic growth, data from the Department of Budget and Management (DBM) showed.

In the first two months of this year, agencies raised spending for capital outlays to P34.7 billion, 60 percent higher than the P21.7 billion spent for the same period last year.

“Higher spending for capital outlays due to frontloading of expenditures [is] consistent with the government’s plan to fast track spending to stimulate the economy,” the DBM said.

The Arroyo administration earlier unveiled a P330-billion stimulus package to pump-prime the economy by quickly disbursing the P1.4-trillion 2009 national budget amid the global economic crisis.

In the first half of the year, agencies have been ordered to spend 60 percent to 80 percent of the productive portion of their allocations amounting to between P84.6 billion and P112.3 billion, with particular focus on infrastructure.

Last year, the government spent only 30 percent of its budget.

Agencies that are supposed to frontload are the Departments of Education, of Social Welfare and Development, of Health, of Agriculture, of Agrarian Reform, of Public Works and Highways, of Transportation and Communications, and the National Irrigation Administration.

Socioeconomic Planning Secretary Ralph Recto earlier urged agencies to spend their budget to implement ready-to-go projects to help stimulate the economy.

‘“It’s either you use it or you lose it,” he said.

In the first half of last year, the government, which accounted for 20 percent of the country’s gross domestic product (GDP), spent only 30 percent of its budget. The planned front loading and spending for the first half of this year is expected to boost private sector confidence in the economy.

The Development and Budget Coordinating Committee expects the economy, as measured by the country’s GDP, to grow between 3.1 percent and 4.1 percent, lower than an earlier forecast of 3.7 percent to 4.4 percent.

Last year, Philippine GDP grew 4.6 percent, a marked slowdown from the 7.2 percent in 2007.

A proxy for economic output, GDP is the amount of goods and services produce in a country.

Tuesday, 21 April 2009

Philippines President: Poverty alleviation is over-arching goal of her administration


Naga City (PIA)-- President Gloria Macapagal-Arroyo stressed anew yesterday that poverty alleviation is her administration's over-arching goal.

In a one-on-one interview with Ms. Sonia Osorio Leano of DWOS Naga, DWML Legaspi and DZSL Daet at the Nueva Caceres University here, the President also expressed her gratitude upon being informed that the Bicolanos in the barangays now feel that indeed the government is determined to uplift the people's lives through the various anti-poverty programs already in place.

"I am very thankful that the people are directly benefiting from these government programs," the President said.

"Poverty alleviation is the over-arching framework for all government initiatives; and, in fact, the key focus of my economic reform program in the last few years has been to translate the economic gains from our reforms into real benefits for the people, most especially the poor and this remains our focus until the day I leave office," she said.

These poverty-alleviation programs include better access to healthcare for the poor, more jobs, livelihood programs, and education.

The President also said that due to the global economic crisis, many Filipino overseas workers (OFWs) have lost their jobs, thus the government came up with the Comprehensive Livelihood and Emergency Program (CLEEP).

Likewise, she has directed all government agencies to allot 1.5 percent of their budget for programs that will cushion the impact of the global economic crisis, especially on the poor.

Other anti-poverty initiatives of the government include the Food for School Program, cheaper medicines through the Botika ng Barangay, microfinance, the Pantawid Pamilyang Pilipino Program or Conditional Cash Transfer (CCT), and the Tindahan ng Bayan programs/projects.

The President attributed the success of these programs to the availability of additional resources generated by the expanded value added tax (EVAT).

"Without revenue to invest in people, there is no progress. With this revenue, we have been able to invest in physical and human infrastructure - roads, bridges, ports. We have been able to expand access to healthcare, improve education and expand social services. And believe me, raising the EVAT taxes was no picnic. It cost me politically - no one likes to raise taxes. But it was worth every point I lost in popularity to see the nation finally get moving," the President said.

The President added that new revenue was only part of the equation in balancing the budget. Building up new industries such as the business process outsourcing (BPO) sector and expanding trade relations to diversify economic bridges were equally important.

These economic reforms shielded the country from the harsh impact of the present global crisis, she said, adding: "All of these actions were taken before there was a hint of a global crisis. And thanks to the bitter pill of fiscal reform under EVAT, we have been spared the harsher backlash of the current global financial crisis."

The President further said that the government has put in place a cushion to help the poor with the establishment of new industries like BPO that will continue to boom.

She pointed out that a P330-billion Economic Resiliency Plan was put in place to ensure sustainable growth, create and save jobs, and protect the most vulnerable sectors against the harsh effects of the global crisis.

The Plan includes accelerated spending for infrastructure, granting additional personal tax exemptions and reducing corporate taxes, expansion of social protection programs such as conditional transfers, National Health Insurance, Pantawid Pamilyang Pilipino Program (4Ps), and Hunger Mitigation Program. It also includes the creation of new employment opportunities through the Comprehensive Livelihood and Emergency Employment Program (CLEEP) and through a range of other livelihood programs.

"We will continue on a path of fiscal discipline, targeted investment and targeted relief to our poor as we weather this global storm," the President said, even as she stressed the need for volunteerism for the Filipinos to weather the global economic crisis.

"Volunteerism is important, I hope all of us will join hands in facing this present global economic challenge and emerge a winner," she said. (PIA)

Selected Philippine Economic Indicators -- March 2009

March 2009 issue (released on 15 April 2009)

Note: The data series contained are updated as of the date of release of said report/publication. For more recent updates/revisions on selected indicators, please visit the SDDS page and the Key Statistical Indicators page.


Philippines fast tracks vital tourism and agri highway project in Cordillera


MANILA (PNA) -- Considered as one of the vital road networks in the Cordillera region, as it connects the major tourists spots and agricultural communities to the market areas, the Department of Public Works and Highways (DPWH) doubled its efforts to complete the remaining concreting works of the Banaue-Bontoc Road Project.

In his recent inspection, Public Works Secretary Hermogenes E. Ebdane Jr. instructed the DPWH Cordillera Administrative Region to take advantage of the remaining summer weeks and accomplish much of the programmed works.

Included in President Gloria Macapagal Arroyo's State of the Nation Address, the highway concreting project will cut travel time from Bontoc in Mt. Province to the famous rice terraces in Banaue, Ifugao from two or three hours to one hour.

Josefina Bangan, wife of a local farmer in Mt. Polis, said that although the project is yet to be completed, they have increased their profit from their vegetable business.

She said they are now able to sell their vegetable produce at much higher price which they could now deliver fresh from the farm to market centers.

DPWH Cordillera Administrative Region Director Roy Manao said that the project is already 35.89 percent complete and in coordination with the contractor, they are maximizing their efforts to complete the project on or before December this year.

This P864-million road project covers the construction of 94.12 kilometers of Portland cement concrete pavement from Brgy. View Point in Banaue to Sumani in Bontoc. It also includes the construction of a drainage system, slope protection works and installation of road safety devices such as guardrails and road signs. (PNA)

Manila-Bicol railway resumes before yearend

President Arroyo says economy and people of Bicol to benefit from this very positive development

By Angelo S. Samonte
Manila Times

The rail service of the Philippine National Railways (PNR) that connects Manila and the Bicol region is expected to resume before year-end, President Gloria Arroyo announced Monday.

The President said she is confident that the rehabilitation of the Manila-Bicol PNR line would be completed before the end of 2009, paving the way for the resumption of the train service after three-year cancellation.

The government is committed to modernizing the country’s infrastructure to spur economic development in the countryside, Mrs Arroyo said, adding that the rehabilitation of the PNR’s Manila-Bicol railway line is now being fast-tracked.

The restoration, rehabilitation and modernization of the existing lines of the PNR is envisioned to be the key to the development of Central and Southern Luzon as it is expected to provide effective and efficient means of transportation to and from Metro Manila and the provinces in Northern and Southern Luzon.

The PNR has said that the rehabilitation of the Manila-Bicol railway line would benefit some 20,000 passengers daily.

When completed, the railway rehabilitation project will lead to the resumption of the long-distance train services between Metro Manila and the Bicol Region up to Matnog in Sorsogon. The line will eventually link Luzon to the Strong Republic Nautical Highway System.

The President said PNR General Manager Manuel Andal informed her that repairs and upgrading works of train stations in the Bicol area started last March while the repair of the tracks will start in May.

“By the time of the Penafrancia fiesta next September, commuter train travel between Iriga City, Camarines Sur and Tagkawayan, Quezon will already be in place,” she said.

“The movement of larger volumes of passengers and commodities by rail will serve to further strengthen the economic ties of Manila to the production centers of the South. The economy and people of Bicol will no doubt benefit from this very positive development,” she added.

The rehabilitation program started in September 2007 includes building a new PNR station with ticketing booths, waiting areas and cyclone wire fencing. Blumentritt, Tayuman, Alabang and Muntinlupa stations are currently under construction. The railway lines are also being fixed for the use of new trains recently bought by the PNR.

The Philippine National Railways is a state-owned railway system established under the Department of Transportation and Communications as an attached agency. It currently operates around 479 kilometers of track in Luzon, where most railway infrastructure is located. The PNR through the decades has been synonymous with the Philippine rail system.

The PNR aims to link key cities within its scope of operation and serve as an instrument in national socio-economic development. It is among government agencies that recently received financial subsidy from the central government worth P74 million.

The shift of global power

John Mangun
Business Mirror

On May 28, 1588, the Spanish Armada sailed from Lisbon with the intent of invading and conquering the British Isles. The Spanish had the decided advantage with over 200 ships to the 130 ships of the English, and in armament as well; its available firepower was 50 percent more than that of the English.

Three physical qualities and two psychological factors determined the outcome some three months later and forever changed the course of the world, as global economic power shifted from the Spanish to the British.

The British ships were smaller and more maneuverable, able to change course more quickly. British guns, although less powerful, were able to fire a longer distance, allowing British ships to attack outside of the range of the Spanish guns. The firepower of the British was more balanced. Much is made of the bad weather and strong winds that forced the Spanish Armada out of battle position. Yet the British ships also faced this severe weather. The difference was that the Spanish ships were designed and fitted to sail before the wind, not against the wind as the British vessels could do.

England possessed two particular strengths lacking in the globally dominant Spanish. The British were much more patriotic, united, and nationalistic. Further, their seamen and sailors had endured decades, if not centuries, of hardship and suffering, navigating the harsh and unforgiving northern oceans.

A similar shift of global power may be taking place 420 years later, and the outcome may be determined by similar differences between the “powerful” and the “second line” countries.

There are three power blocs in the world; the G-7 (the United States, the UK, Germany, Canada, Italy, France, Japan), the BRIC (Brazil, India, Russia and China), and everyone else. Forget the G-20. The G-20 is a joke and a fabrication of the G-7 to make the “G-13” feel important and think they have a voice and power on the world economic stage.

For the last 35 years, the G-7 has dominated the global economy and, in effect, the rest of the world. The G-7 dog wagged the global tail. It was not long ago that we, particularly in the Philippines, accepted as truth, “When the United States sneezes, the world catches cold.”

Like the Spanish of four centuries ago, the G-7 would not accept and did everything to destroy any challenge to its economic power. Agricultural nations were never able to compete against Western government farm subsidies. Countries like Japan would impose unrealistic trade measures and standards to ensure that products from countries like the Philippines would never reach their markets. High Western tariffs stopped “Third World” countries from ever developing their manufacturing capability. The rise in the last 10 years of the BRIC countries was unplanned and a result of their geographic size, dominant geographic position in their region, and population size.

The economic power of the G-7 bloc led it to believe that it could also sway the politics of the rest of the world. The purpose of the Spanish invasion by its Armada was to overthrow Queen Elizabeth I in favor of a government more willing to allow Spanish global domination.

Like the Spanish, over the last decades the G-7 became fat and lazy, too used to the good times and its positions of power and dominance. Now its power is eroding due to its own policies and the resulting events of those policies. Had the Spanish not tried to invade England, British global power might have never been developed.

Similar to the British of 1588, nations like the Philippines have economies more nimble, more balanced, and more adaptable to changing global economic conditions. For all of the domestic in-fighting, countries like the Philippines have recognized for years that the G-7 nations are ultimately economic adversaries, if not outright economic enemies, who are interested in only their own interests.

And there is no comparison between the ability and strength of nations and people like the Philippines to endure and prosper through hardship.

But colonial mentality is a vice and a bad habit that is hard to break. Every stock-market comment that says our market must wait for the United States to go up is an example of an awful mentality. In 2009, the emerging markets are the dog wagging the Western stock-market tails.

As of last Friday, the US market was down 5 percent in 2009. The Philippine Stock Exchange is up more than 10 percent and we are lagging behind some of our peers. Look at other Philippine-like markets: Peru—up 45 percent, Argentina—up 14 percent, Sri Lanka—up 12 percent, Chile—up 12 percent, Ukraine—up 10 percent, and Greece—up 11 percent.

This year will mark the beginning of the end of G-7 global dominance and the shift of power to nations like the Philippines. No, it will not come at once any more than the defeat of the Armada marked an immediate change of global power. It was, though, the beginning of the end.

This realignment of economic strength is not without risk. Nations like the Philippines will be under immense pressure to stay within the fences established by the G-7. And the only way for the Philippines to be successful in establishing its global economic identity is to keep its money at home, its eyes on the world, and its heart and mind focused on this nation.

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Philippines deliberates on lifting foreign ownership cap

J. F. S. Valdez

THE HOUSE of Representatives yesterday started plenary discussions on a resolution that seeks to lift the 40% limit the Constitution imposes on foreign ownership of corporations and alienable lands.

Speaker Prospero C. Nograles of Davao City (1st district), principal author of House Resolution (HR) 737 — a "Resolution Proposing Amendments to Sections 2 and 3, Article XII of the Constitution to Allow the Acquisition by Foreign Corporations and Associations and the Transfer or Conveyance of Alienable Public and Private Lands" — reiterated to reporters in a press conference yesterday that the resolution will tackle only this economic provision and will not touch other areas of the Charter.

Business and opposition leaders have cautioned congressmen against using the move to amend economic provisions to sneak in initiatives to extend the terms of incumbent elected officials, starting with the President.

Mr. Nograles earlier said HR 737, which had been approved by the committee on constitutional amendments last Feb. 3, would be accompanied by a resolution still to be filed by Camarines Sur Rep. Luis R. Villafuerte (2nd district) that would convene Congress into a constituent assembly. Mr. Nograles said yesterday that this proposal still has 175 signatures — 22 signatures shy of the two-thirds vote (197) needed to be approved in plenary.

Mr. Villafuerte’s resolution focuses on Article XVII Section 1 of the Constitution which states: "Any amendment to, or revision of, this Constitution may be proposed by: (1) The Congress, upon a vote of three-fourths of all its members."

The change could be achieved by converting Congress into a constituent assembly, through the holding of a constitutional convention or through a people’s initiative that would require voting by legislative district.

Edgardo G. Lacson, president of the Philippine Chamber of Commerce and Industry, said in a phone interview yesterday that while his group supports the initiative to ease terms of the Constitution’s economic provisions, even this has to be done carefully.

"We support the resolution, but it cannot be across the board, it should only be sectoral...This should not apply to all industries, because some may benefit and some might be harmed due to this proposal. Congress should first study up to what extent it can ease on the economic provisions," he said, citing ancestral land and media ownership as examples of areas where caution should be observed.

Alberto A. Lim, Makati Business Club executive-director, said that while moves to ease economic restrictions in the Constitution favor business, any initiative to change the Charter should be acted on after the elections next year, in order to make sure incumbent officials do not benefit. "We believe using a non-controversial provision [like the foreign ownership cap] is a ploy to garner 197 signatures to be able to fast-track amending the Constitution through a constituent assembly. Any change to the Charter should be done after 2010," he said in a phone interview.

Reps. Ana Theresia N. Hontiveros-Baraquel (Akbayan), Saturnino C. Ocampo and Teodoro A. Casiño (Bayan Muna), Liza L. Maza and Luzviminda C. Ilagan (Gabriela), and Rafael V. Mariano (Anakpawis) said in a press conference yesterday that they will file a motion to return HR 737 to the committee level, arguing that the proposal "was not deliberated upon enough in the committee and was railroaded."

Philippines' Jollibee to open 3,000 overseas stores

Manila Bulletin

Jollibee Foods Corporation is aiming to open 3,000 stores overseas over the next 10 years, about 75 percent of the 4,000 stores it hopes to have operating by 2020.

“We envision that by the year 2020, Jollibee will already have 4,000 stores, 75 percent of which are outside the Philippines,” said Jollibee vice president for international operations Dennis Flores.

He noted that “we know it will be tough to achieve but if you look back 30 years ago when this company started, would you have believed how it has grown this big from just an ice cream parlor.”

Fresh from opening its store in Queens, New York last February 14 its first in the East Coast, USA Jollibee has already set its sights on other populous cities.|

Flores said 12 more stores are in the works for Jollibee’s operations in Asia this year four each in Saudi Arabia and Vietnam, two in Dubai and one each in Qatar and Brunei. Macau is also another area that is currently being considered.

In the US, Jollibee hopes to open seven more stores in various locations Plaza Bonita in San Diego, Rosemead and New West Covina in South California, Village Square and Colonnade both in Las Vegas, Oceanside in San Diego, and Concorde Seafood City in North Carolina before the end of 2010.

“As of the fourth quarter of 2008, our foreign operations accounted already for 15.9 percent of our system wide sales. Our aim is to derive at least half of our revenues from outside of the Philippines at some point in the future, both from organic growth and acquisitions even as we expect our Philippine business to sustain a healthy growth rate in the years to come,” said JFC chairman Tony Tan Caktiong.

Monday, 20 April 2009

Philippine President reiterates belt-tightening directive


Manila (PND) - President Gloria Macapagal-Arroyo has reiterated her directive to all government agencies and instrumentalities to adopt strict belt-tightening measures and stop all unnecessary and wasteful spending in these “challenging economic times.”

In Administrative Order No. 261, the President pointed out that the government stands to generate P7-billion savings from a “government-wide, one-and-a-half (1.5 percent) reduction of maintenance, overhead and operating expenses.”

She noted that an Independence Day Parade alone costs the government about P30 million. As part of the cost-saving measures, the Independence Day Parade this June 12 will be shelved.

“Instead, a mega-jobs fair shall be organized to enable the 40,000 workers displaced by the global crisis find employment or livelihood,” the AO 261 said.

The government, the President said, “must pour all savings and revenue into programs that help the poor and the middle class.”

AO 261, which the President signed on April 7, is a follow up to Executive Order (EO) No. 782 that she issued earlier this year.

Under EO 782, all government agencies and instrumentalities, including all departments, bureaus, attached agencies, government-owned and controlled corporations and government financial institutions, were directed to reduce their respective maintenance, overhead and operating expense (MOOE) budgets by 1.5 percent.

Savings generated by EO 782 was set aside for emergency employment for the next six months of 2009.

The President stressed that in early 2008, all government agencies and entities were directed to undertake electricity and fuel-saving measures, including but not limited to the consumption of fossil fuels, which was ordered cut down by 25 percent, and electric consumption by at least 10 percent.

Under the EO, air-conditioners should be turned off at 4:30 p.m. except those of offices with 24-hour work, while incandescent bulbs were ordered replaced with compact fluorescent lamp.

Similarly, 20 percent of vehicles owned by the national government were ordered converted to the use of natural gas.

In AO 261, the President directed that vehicles of the national government, including those of GOCCs, which are not “issued to an official and are not on official trip, shall be garaged in the agency office, and the keys shall be kept by guards, during weekends and holidays.”

The President also enjoined all local government units (LGUs) to adopt the cost-saving measures mandated under both EO 782 and AO 261 and other relevant issuances.