Saturday, 16 May 2009

Positive signs boost confidence in Philippine economy


Manila (16 May) -- National Economic and Development Authority (NEDA) Officer-in-Charge Rolando G. Tungpalan said that the latest global and local indicators are helping to boost confidence towards earlier-than-expected economic recovery. He said overseas Filipino workers (OFW) employment remains strong, inflation rate is falling, and exports and construction are improving.

"The crisis is not over, but there are positive signs that boost our confidence on the Philippine economy," he said.

At the same time, he reiterated that even with these developments, "the government must pursue more rigorously the Economic Resiliency Plan (ERP) and push for legislation on the needed revenue measures towards improving the economy and usher in development for the Filipino people."

Tungpalan said "in terms of overseas employment, job prospects include 15,000 to 20,000 jobs for highly skilled Filipino workers in Guam, 60,000 in Saudi Arabia, and 20,000 in Qatar".

The NEDA official added remittances from OFWs for the year would be at least the same level with the 2008 level of US$16.4 billion, citing that remittance expanded by 4.9 percent in February.

"We have the number of layoffs for each month after the global crisis broke out in September 2008. In each month, we had layoffs of 10,000 to 11,000 workers, even 14,000 in March. But in the first half of April, the number steeply dropped to only around 1,000. And firms have begun to rehire their displaced workers, as in the case of Cebu," Tungpalan added.

Another boost to the economy is the rapid decline in inflation, which steadily climbed in 2008 due to high food and fuel prices and reached its peak in August of that year at 12.4 percent. From then on, inflation has been falling and hit 4.8 percent in April 2009, the lowest in 16 months. "It will continue to decline, averaging 3.5 percent for the whole year. This in turn will boost personal consumption, which is 70 percent of gross domestic product," he said.

Tungpalan said that the country is witnessing a return of growth of exports, which has been negative since October for year-on-year growth. Exports in March 2009 was 30.9 percent lower compared to exports in March 2008. But for the first time, there is growth on a month-on-month basis. Exports in March 2009 was 15.9 percent greater than in February 2009, a sign that Philippine exports is recovering.

Construction is holding up, thanks to government infrastructure projects and lower Pag-Ibig rates, which are fueling mass housing. Industry leaders have noted that government is now taking the lead in infrastructure projects and that the demand in low-income housing continues to be strong, according to the NEDA official.

He quoted Anthony Fernandez, the president of the Philippine Contractors Association, who said that projects before was "60 percent private-led and 40 percent government; now, it's around 60-70 percent government."

Tungpalan also referred to Filinvest president Joseph Yap, who said, "So far, we're not even seeing a dip (in sales)…The mass market is still quite strong." Filinvest Land Incorporated devotes around 70 percent of its projects to the mass market and is in fact hiking its capital spending by 30 percent.

"The SM Group of taipan Henry Sy is investing PhP25 billion in the local economy this year to expand its retail, real estate, shopping mall, hotel, and banking in anticipation of growing demand for its products and services. Also, AVIDA, the affordable housing arm of Ayala Land, will be spending for a PhP1.5 billion middle income condominium to address the increasing demand for low- to middle-income housing," the NEDA official added.

Others have begun to take notice of the resilience of the Philippines, according to Tungpalan. "One article from the New York Times cited that the country's gross domestic product growth is 'the most sustained improvement since the mid-1970s', taking note of OFW remittances which have held up so far, call centers and outsourcing and the government's fiscal reform," he said. (NEDA-PIA XI)

Arroyo tops Philippine Presidents on economy—UA&P

Vincent Cabreza
Inquirer Northern Luzon

MANILA, Philippines—Which of the Philippines’ most recent Presidents succeeded in strengthening the economy and has the chance of having his or her economic legacy appreciated by future generations?

Will it be the “the lawyer, the housewife, the general, the actor or the cute economist?”

President Gloria Macapagal-Arroyo, the cute economist, is the winner, according to economists from the University of Asia and the Pacific (UA&P) at a briefing hosted by the Bank of Commerce in Baguio City last Thursday.

Each President’s performance was assessed in the context of the historical environment in which they ruled, said UA&P professor Emilio Antonio Jr., who is also president of the Center for Research and Communication Foundation.

Ms Arroyo, who has often said that she would want to be remembered for her contributions to the economy, may well be right, gauging by the relatively good health of businesses in northern Luzon, according to economist Ramon Quesada, former director of the UA&P School of Economics.

Economy moves

Antonio said it was during Ms Arroyo’s watch that the Philippine economy “definitely moved on” after the crisis of the martial law years.

According to Antonio, Ms Arroyo should be credited for the Philippines’ improved income and spending balance and manageable inflation rate.

This was a turnaround for the country after it was “brought to great heights and then great depths” by the “lawyer,” the late dictator Ferdinand Marcos, in the 1970s, Antonio said.

The “housewife,” President Corazon Aquino, tried to restore the economy but did not succeed, Antonio said.

‘Lost to us’

The “general,” former President Fidel Ramos, a hero of the first EDSA People Power Revolution, pursued industrialization but the 1980s and the 1990s—when he and Aquino took power— should “already be considered lost to us” because these decades saw a dramatic financial decline for the country, said Antonio.

The “actor,” ousted President Joseph Estrada who was convicted for plunder, won election a year after the 1997 Asian financial crisis which brought havoc to world trade, he said.

Antonio said the reforms, attributable to the Arroyo administration, “are probably the roots of the economy’s strong points.”

He said the “blows from the global recession” did not knock out the country because of the reforms introduced in the aftermath of the Asian financial crisis.

Tight watch on spending

Antonio cited the fact that the country’s price environment has stabilized since after the time of Marcos.

The inflation rate shot up to an average 14.3 percent during the martial law years, pulling up interest rates to 14.4 percent, according to a comparative chart drawn up by Antonio.

The inflation rate tapered down to 9.8 percent during Aquino’s term, gradually declined to 8.2 percent under Ramos and 6.6 percent under Estrada, until it reached 5.5 percent today, equipping the economy with a moderate 7.7 percent interest rate, said Antonio.

Consequently, the buying power of the average Filipino grew from 3.2 percent during the Marcos regime, to 4.1 percent under Aquino; stumbled to 3.9 percent under Ramos; restored to 4.1 percent under Estrada; and finally to 5.6 percent under Arroyo, he said.


The figures from the Marcos-to-Estrada years were the lessons that compelled Ms Arroyo to apply a tight watch on spending that allowed the country to earn three months’ worth of cash reserves this year, Antonio said.

As for what is in store for the economy, Antonio said he foresees an “onslaught of doomsday pronouncements” because financial turmoil in the United States is not about to end.

Politicians who are positioning themselves for 2010 will insist that we are on the brink of a big economic disaster,” he said.

According to Antonio, many economists subscribe to the conventional wisdom which states that when the US, a major trade partner, “sneezes, we catch pneumonia.”

But he said an internal review of businesses in the country would reveal that the problem is an erosion of competitiveness, weak employment generation and the private sector’s unwillingness “to bet on ourselves.”

“We should not blame the world,” he said.

Remittances to shoot up

Quesada said naysayers ignore the fact that the sustained remittances from overseas Filipino workers and Filipino migrants are expected to shoot up to P771 billion this year because of the improved peso-dollar exchange rate.

Antonio noted that the Philippines never caught the “recession virus” because the country’s troubles are shaped by “perceptions and fears.”

He said “asset markets remain jumpy due to bad sentiments [and] the effects of sentiments on spending and investment activities cannot be discounted.”

“Keep your cool,” he said. “Don’t lose your focus on business possibilities.”

Philippine property companies' income continue growth

Eton, Filinvest report higher profits

Two property companies reported higher profits for January to March, riding on higher sales from residential projects.

In a statement, Lucio C. Tan-led Eton Properties Philippines, Inc. said the company was able to recognize revenues from one project after construction activities progressed during the first quarter.

Eton Properties turned around to P18 million in profit from the P48-million loss in the first quarter 2008, while revenues jumped to P353 million. "The positive first-quarter results were mainly driven by revenue realized from the company’s One Archers Place project in Taft Ave. where construction activities have already reached the 10th floor as of March," the company said.

Eton Properties follows the accounting rule known as the percentage-of-completion method, in which revenues are recognized based on construction progress. This was the reason why the new property player incurred net loss last year.

Eton Properties said it expects higher profits this year from a number of projects, which include The Eton Residences Greenbelt in Makati, Eton Baypark Manila, Eton Emerald Lofts in Ortigas City, Eton Parkview Greenbelt, Belton Place in Makati, South Lake Village at Eton City in Laguna, and The Manors at North Belton Communities in Quezon City.

Meanwhile, Gotianun-led Filinvest Land, Inc. told the stock exchange that its net income grew by a tenth to P475.8 million from January to March, while revenues went up by 7% to P1.42 billion.

Real estate sales contributed the most with P948 million, followed by rental income both from residential and commercial properties.

Filinvest Land said residential sales reservations during the first three months of 2009 went up by 14% to P1.87 billion as demand for its core business of residential housing for the socialized, affordable and middle-income markets continue to remain steady.

The property company said its newest product line — medium-rise buildings or several five-storey buildings clustered around amenities — also continue to generate interest.

The company has four medium-rise projects, namely One Oasis Ortigas and Bali Oasis Marcos Highway in Pasig, One Oasis Davao, and One Oasis Cebu. Filinvest said Festival Supermall, PBCom Tower and Northgate Cyberzone in Alabang reported higher lease rates. To date, Filinvest’s total office building portfolio stands at over 132,000 square meters.

Shares in Eton Properties did not move at P2.50 per share on Friday, while Filinvest Land shares went up by 3.12% or two centavos to P0.66.

Philippines' JG Summit’s Q1 income up

Don Gil K. Carreon

Gokongwei-led JG Summit Holdings, Inc.’s profits rose by more than a quarter in the first three months of 2009 due to the better performance of its various units, which range from snack and beverage manufacturing, to airlines, and property development.

In a disclosure last Friday, JG Summit said its net income reached P863.99 million in the first quarter, up from P675.85 million last year. Consolidated revenues, meanwhile, went up by nearly a fifth to P26.48 billion from P22.30 billion last year.

"The substantial growth was driven by the continued improvement in sales of and revenues of our core businesses: food, airline and real estate development, plus the revenue contribution of our telecom business particularly the wireless sector," it said.

JG Summit, however, noted that growth was somewhat tempered by the 35% decline revenues of its petrochemical business to P1.30 billion. Snack and beverage unit Universal Robina Corp. accounted for more than half of the revenues with P13.27 billion, followed by budget carrier Cebu Pacific Air, Inc. (P5.30 billion) and Digital Telecommunications, Inc. or Digitel (P3.21 billion).

JG Summit said its food unit’s growth was due to the more than a quarter increase in the sales of snacks, candies, chocolates and biscuits.

It attributed Cebu Pacific’s improved performance to the addition of five new routes, and the growth of Digitel, which operates under the Sun Cellular brand, to the increase in business of its wireless segment.

Consolidated cost of sales and services during the quarter climbed by 15.8% to P16.46 billion due largely to higher raw material expenses of the food unit as sales volume grew.

JG Summit’s mark-to-market losses more than doubled to P263.72 million from P91.59 million the previous year, as financial assets continue to be affected by the volatility in the markets. Interest income likewise went down to P490.51 million from P732.95 million.

The firm’s shares ended P0.020 higher at P4.30 on friday for a price-to-earnings ratio of 33.08.

Subic exports rise by half in 1st quarter


Firms at the Subic Freeport exported $359.45-million worth of goods in the first quarter, up 54.8% from year-ago levels, the Subic Bay Metropolitan Authority (SBMA) said in a statement on Friday.

The top 10 exporters of the freeport accounted for 92% or $332.33 million of export sales in that period.

"This makes us all the more confident that hard work on the part of the SBMA and the business locators here would enable us to pull through these hard times," the statement quoted SBMA Administrator and Chief Executive Officer Armand C. Arreza as saying.

Korean shipbuilder Hanjin Heavy Industries Co.-Philippines led the pack, with sales hitting $179.36 million.

The other nine leading exporters were manufacturers mostly of computers, appliances, and other machinery. They were:

  • Hong Kong cell phone trader Lets Do Mobile Philippines, $57.43 million;
  • Taiwanese computer maker Wistron Infocomm (Phils) Corp., $36.13 million;
  • Japanese ATM-maker Hitachi Terminals, $16.46 million;
  • Japanese micro-motor manufacturer Sanyo Denki, $16.23 million;
  • Japanese wood products maker Juken Sangyo $8.73 million;
  • Danish eyewear manufacturer Lindberg Subic, Inc. ($6.38 million);
  • Taiwanese lock maker Tong Lung (Phils.) Metal Industry ($4.34 million);
  • Taiwanese aircon maker Hitachi ($4.48 million); and
  • Japanese electronics sensor maker Nicera ($2.79 million).

The state agency reported earlier this week that investment pledges to the freeport — mostly in shipping, trading and tourism ventures — grew 13.6% to P1.5 billion in the first quarter from the same period last year.

Philippines' GREPALIFE holdings surpass P2.5-B mark

Manila Bulletin

Boosted by a 30 percent growth in gross premiums from its life insurance operations last year, Great Pacific Life Asssurance Corporation (GREPALIFE) reported that it surpassed the P2.5-billion mark last year.

GREPALIFE is the flagship life insurance firm of the Yuchengco Group of Companies (YGC), headed by Ambassador Alfonso Yuchengco.

Despite the volatile economic environment that affected the life insurance industry worldwide, GREPALIFE posted an additional P577 million in its 2007 amount of P1.92 billion, closing 2008 with P2.5 billion.

Reaching the P2.5-billion mark is considered a milestone as only less than a handful of life insurers have been able to breach P1 billion worth of new business.

This combined growth in gross premiums speaks volumes about the company’s resilience and stability, as well as the continued trust it enjoys from its policyholders. The strong sales performance of GREPALIFE is attributed to the solid and equal strength of its three main business channels i.e., Agencies, B-Secure (bancassurance channel) and Group.

GREPALIFE President and CEO Victor P. Quisumbing reiterated his stand that the company remains undaunted by the financial instability of the market and is in fact even more challenged by the current environment to perform its obligations to its customers.

“It is during times like these when things are uncertain that we in the life insurance business should do our best to give certainty and peace of mind to the people that we serve,” he said.

“GREPALIFE is exceedingly well capitalized, beyond the requirements of the Insurance Commission, while our investment portfolio remains prudent and well placed, making us more than confident of serving our policyholders and earning the trust of more customers,” he continued.

Quisumbing also prided the company’s modern plans that meet the market’s demand for traditional life insurance products with greater living and investment benefits. “Our My Life Series fit to a T the demand of the market for value for money whole life and endowment products,” he explained.

IEA forecasts big decline in oil demand

Manila Bulletin

PARIS (AP) – Oil consumption this year will fall at the sharpest pace since 1981 due to the crisis afflicting world economies, the International Energy Agency (IEA) said as it made new cuts to its forecast for crude demand.

In its closely watched monthly survey, the Paris-based agency said it now expects global oil demand to fall 3 percent to 83.2 million barrels a day this year, or 2.6 million barrels a day less than in 2008. It was the ninth consecutive monthly cut that the IEA has made to its oil demand forecast.

The estimate represents a slight cut to its last forecast of a 2.8 percent drop in demand this year, and comes on top of a 0.3 percent fall in crude consumption last year. It will be the first time oil demand has fallen for two consecutive years since 1982-1983.

Oil prices have jumped from near $50 a barrel earlier this month – and rose above $60 earlier this week – on hopes that the worst of the recession is over in the US, the world's biggest oil consumer.

Philippine remittances Remittances in March Hit Record High; First Quarter Level at US$4.1 Billion


Remittances from overseas Filipinos (OFs) coursed through banks reached a record high of US$1.5 billion in March 2009, representing a 3.1 percent year-on-year growth, BSP Governor Amando M. Tetangco, Jr. announced today. This brought the cumulative remittances in the first quarter of 2009 to US$4.1 billion, or an annual growth of 2.7 percent. Remittances from sea-based and land-based workers for the three-month period registered increases of 5.5 percent and 2.0 percent, respectively.

Remittance flows continued to be shored up by the steady labor demand for Filipino skills abroad, and the wider access to expanded money transfer services by overseas Filipinos and their beneficiaries. While concerns remain over the impact of the prevailing global economic crisis on the deployment of Filipino workers abroad, an assessment of the labor market situation by the Department of Labor and Employment (DOLE) and the Philippine Overseas Employment Administration (POEA) points to sustained demand for workers overseas. Apart from the double-digit growth (27.3 percent) in the number of deployed overseas Filipino workers in the first two months of the year, the POEA reported that of the total active job orders as of 12 May 2009, almost 37 percent (279,889) have been processed while the remaining 63 percent are still to be filled up. The bulk of the job orders were in the production, services, and professional skill categories.

Philippine overseas labor offices have also reported new job opportunities in markets that have not been severely affected by the global financial strains. In addition to the labor accords that have been signed between the Philippine government and some host countries (e.g., Canada, Australia, Japan, Korea, and some Middle East countries such as Qatar), prospective employment awaits Filipino workers in Algeria, particularly, in construction projects that would require professional and skilled workers. Governor Tetangco also noted the report of the BSP team that recently conducted a financial learning campaign for OFWs in Saudi Arabia which indicated continued demand for overseas workers as the Kingdom gears up for the construction of megacities. These developments provide continued optimism for stability in remittances, notwithstanding the displacement of some OFWs as a result of the global economic crisis. DOLE’s latest labor statistics showed that the increase in the number of displaced OFWs has slowed down as the government intensified its efforts to directly assist the displaced OFWs find alternative jobs in emerging markets and in countries that are least affected by the crisis.

For the period January-March 2009, the major sources of remittances were the U.S., Canada, Saudi Arabia, Japan, U.K., Singapore, Italy, United Arab Emirates, and Germany.

Update photos of Philippine National Railways rehab

Friday, 15 May 2009

Survey finds RP consumers more upbeat than most

Don Gil K. Carreon

FILIPINO CONSUMER confidence fell with rest of the world amid the economic downturn, but the Philippines continues to be among the most upbeat nations due to remittances from migrant workers and the continued outsourcing boom, an Internet poll conducted recently by research firm Nielsen showed.

The biannual Internet poll ran from March 19 to April 2, while the previous survey was from September 22 to October 6.

In a briefing yesterday, Victoria R. Santos, managing director of The Nielsen Media Company (Philippines), Inc., said Filipinos’ sentiment mirrored global uncertainty, as confidence dropped by six points to 96.

The survey, which involved 26,000 respondents in 50 countries, was topped by Indonesia with a score of 104, while South Korea, which narrowly avoided a recession in the first quarter, finished at the bottom with 31.

The Philippines, where 500 people were surveyed, ranked sixth overall and third among the 14 Asia-Pacific economies surveyed.

Only Taiwan posted a higher score at 63 compared to 60 from the previous period, while 48 of the 49 markets experienced a decline.

As a result, the global average went down to 77 from 84.

Nielsen said consumers in Russia (down 29 points), United Arab Emirates and Brazil (lower by 21 points each) suffered the biggest falls in consumer confidence in the last six months as currency devaluation, weakening export markets and falling commodity prices took its toll.

"Global consumers have been battered and bruised by the constant onslaught of bad news in the last six months," said James Russo, The Nielsen Company vice-president for global consumer insights, in a statement.

"Daily announcements of job cuts and company profit warnings, bankruptcies and foreclosures, lowered [growth] expectations and depressed manufacturing forecasts have combined to reduce consumer confidence and spending powers in their lowest levels since the post war year," he added.

Nielsen’s Ms. Santos noted that "although there is decline in consumer confidence, the sentiment of the Filipino consumers ranks among the highest in the world...We are not that low, in fact we rank among the most positive."

"This is possibly aided by sustained remittances from our overseas foreign workers and our continuously vibrant [business process outsourcing] sector. The remittances from the OFW sectors are holding and this is a very critical source of funds for continued spending for our economy," she added.

For his part, Augusto B. Santos, deputy director-general of the National Economic and Development Authority, agreed that sentiment dropped because of the global downturn, but remains relatively strong since the economy would still grow but at a slower pace.

"[The positive sentiment] will boost domestic consumption, which is a major component of the economy," he added.

Nonetheless, Filipinos are now less confident about their job prospects, personal finances on whether it is a good time to spend, the survey showed.

When it comes to spare cash, more Filipinos are considering putting these into savings (69% from 66%), with new clothes (35% from 39%), new gadgets (34% from 35%) and paying off of debts (32% from 37%) the next priorities.

"About seven in 10 Filipinos are saying that if they have spare cash they would rather save it, we are recognizing that there is still uncertainty out there," Nielsen’s Ms. Santos said.

"They remain more prudent when it comes to spending."

The Philippines finished third in the region when it comes to optimism about job prospects.

The survey also showed that the Filipinos who think the country is in recession is now up to almost 80% from the previous survey period, when only 67% respondents felt this way.

Dev't Bank of the Philippines net income up 47% in Q1

Erik de la Cruz
Business Mirror

THE Development Bank of the Philippines (DBP), the country’s fifth-largest bank in assets, on Thursday said its quarterly earnings jumped 47 percent, reflecting improved retail lending operations and gains from investment transactions.

Net income in the first quarter rose to P1.22 billion from P830 million in the same period last year. Gross income jumped to P4.96 billion from P3.86 billion.

Gross loan portfolio expanded slightly to P175.83 billion from P175.22 billion, the bank said in a statement.

Nonperforming loans dropped to P2.58 billion from P3.1 billion a year ago.

The state-owned bank grew its assets by about 7 percent to P301.51 billion as of end-March, from P281.88 billion a year ago.

Its capital-adequacy ratio, a measure of capital strength relative to its risk-weighted loan exposures, improved to 23.29 percent as of end-February from 21.36 percent a year ago.

Deposits continued to grow, reaching P103.35 billion as of end-March from last year’s P69.90 billion, with government deposits accounting for 71 percent of total.

The bank, which provides financing mainly for small and medium-scale enterprises, plans to put up 51 additional branches to expand its nationwide network to 128 by 2010, as it intends to do more retail banking starting this year.

Hanjin Subic’s top exporter

Written by Henry Empeño
Business Mirror

SUBIC BAY FREE PORT—Korean shipbuilder Hanjin Heavy Industries Co.-Philippines (HHIC-Phil) emerged as the biggest exporter in this free port in the first quarter after it posted $179.36 million in freight-on-board (FOB) value.

This was the first time for Hanjin to top Subic’s exporters’ list after establishing operations at the Redondo Peninsula here in 2006.

The shipbuilder, which had so far built four container ships at its Subic facility, dislodged long-time export champion Wistron Infocomm (Phils), the Taiwanese computer maker, which fell to third place with total exports of $36.13 million.

Hanjin boosted its run up to the first place by delivering two container vessels, the CMA CGM Topaz and the CMA CGM Opal, at the same time.

Overall, export production by companies in the Subic Bay Free Port Zone surged to $359.45 million in the period January to March, a 55-percent increase over the $232.21 in the first quarter last year. Armand Arreza, CEO of the Subic Bay Metropolitan Authority (SBMA), said the increase in export production shows that Subic “remains economically healthy despite the ongoing global economic downturn.”

“Recent indicators only show that Subic stays on top of the situation and the companies here remain resilient and productive,” added Arreza, pointing out that Subic’s first-quarter revenues also rose 9.3 percent.

After Hanjin, those that posted the biggest exports are Hong Kong cell phone trader Lets Do Mobile Philippines, with $57.43 million; Taiwanese computer maker Wistron Infocomm, $36.13 million; Japanese ATM-maker Hitachi Terminals, $16.46 million; Japanese micro-motor manufacturer Sanyo Denki, $16.23 million; Japanese wood products manufacturer Juken Sangyo, $8.73 million; Danish eyewear manufacturer Lindberg Subic Inc., $6.38 million; Taiwanese lock maker Tong Lung (Phils) Metal Industry, $4.34 million; Taiwanese aircon maker Hitachi, $3.38 million, and Japanese electronics sensor maker Nicera, $2.79 million.

Subic’s rising export production resulted in an increase in revenue collections in the first quarter with the combined collections of the Bureau of Internal Revenue and the Bureau of Customs reaching P1.29 billion, a slight increase over the P1.18 billion in the 2008 quarter.

SBMA records show the BIR collected P252.08 million in the first quarter, while Customs took in P1.04 billion to surpass its first-quarter target of P669.5 million by almost 60 percent.

Philippines' Jollibee Q1 net income up 17%

Still a lucky streak for the ‘Bee’ as Q1 net income rises 17%
Honey Madrilejos-Reyes
Business Mirror

FASTFOOD giant Jollibee Foods Corp. (JFC) said its net income in the first quarter jumped 17.2 percent year on year to P562 million on revenues that grew 13.5 percent to P11.34 billion.

The BusinessMirror reported earlier that the company, which owns leading brands like Jollibee, Chowking, Greenwich, Delifrance, Red Ribbon and Manong Pepe, defied market trend and posted growth despite the lingering global financial crisis.

However, Tony Tan Caktiong, Jollibee chairman and chief executive, said that while sales continued to be strong, the slowdown in the country’s economic growth and of the foreign markets, may dampen the company’s sales in the next quarters.

“The worldwide economic downturn has not changed our long-term goals and plans. In the short-term. Our operating plan calls for at least sustaining our most recent sales and profit growth rates,” he said in a statement on Thursday.

JFC is allocatingP4.0 billion for capital expenditures this year. The amount will finance mainly the opening of new stores, renovation of existing stores, commissary facilities and a logistics center.

“The plan is to open at least the same number of new stores in 2008 that totaled 186. The company also plans to continue pursuing the acquisition of businesses as part of its long-term growth strategy,” said its chief finance officer Ysmael Baysa.

As of end March this year, the JFC group operates 1,515 stores nationwide and 306 branches in various countries.

Fast ferry builder seeks white knight

MARITES S. VILLAMOR, Cebu Bureau Chief

CEBU CITY — Unless a strategic partner buys into the company or clients place new orders, Aboitiz-owned fast ferry builder FBMA Marine, Inc. might have to shut down its shipyard in Balamban after completing the last two high-speed catamarans it is working on.

"If that (a successful deal) kicks in, things will change," FBMA chairman and CEO Roberto E. Aboitiz told a news conference where he announced the retrenchment, effective June 15, of nearly half of the firm’s 198 regular workers.

New orders, he said, have not been received since the middle of last year. A high-speed catamaran was last rolled out of FBMA’s fabrication shop in August 2008 for a client in the Pacific island of New Caledonia.

"The market has dried up. This has been the situation since the middle of last year. We’ve been talking with other shipbuilders — they’re in the same situation," Mr. Aboitiz said.

"The world crisis now is too much to bear and it’s going to last a long time because there’s been overbuilding. A lot of vessels are just lying around," he said.

Buyers who are hindered by the global credit crunch are preferring second-hand vessels which cost lower, he added.

Doug Border, FBMA president and chief operating officer, said the firm was close to securing contracts, but these had been delayed and could possibly be dropped due to financing problems.

Mr. Border said FBMA was continuing to search for new orders and was trying to bring in a strategic partner.

"Balamban is a shipbuilding center. This is the place to build vessels. This is our selling point. This is our value proposition," Mr. Aboitiz said.

The company, meanwhile, is helping the 73 laid-off workers find alternative jobs. Mr. Aboitiz said arrangements were being made with bulk carrier builder Tsuneishi Heavy Industries (Cebu), Inc.

FBMA is now completing two high-speed catamarans for Wightlink, which provides ferry services between the Isle of Wight and mainland United Kingdom.

Aside from high-speed catamarans, FBMA also specializes in building medium-speed ferries, patrol vessels and specialist work boats for European, US, Australian and Asian ship operators. The company has been operating in Balamban since 1997.

Thursday, 14 May 2009

Philippine GDP growth may reach over 4% this year

Manila Bulletin

The Philippines may hit the high end of its 3.1-4.1 percent economic growth target this year, based on gross domestic product, this year, as new data showed a sharp decline in the country's exports started to ease in March.

Bangko Sentral ng Pilipinas Governor Amando Tetangco also reiterated that the current favorable outlook on inflation gives the monetary authority more leeway in setting policy rates.

Philippine exports tumbled 30.9 percent in March from a year earlier after falling an annual 39.1 percent the previous month and more than 40 percent in both January and December.

''The slowdown in the rate of contraction of our exports is encouraging, which makes achieving growth towards the higher end of our target GDP growth range more manageable,'' Tetangco said in an email message to Reuters.

The Philippines hopes to hit the high end of its 2009 growth target, as it spends more to stimulate the economy and with consumption holding up as remittances from overseas Filipinos stay flat at $16.4 billion this year from 2008.

Philippine BPO posting strong growth

The Sunrise Industry
Adam Jones
OBG Editorial Manager
Business Mirror

“Logic suggests that when economic pressure is high there should be increased demand for low-cost outsourcing, but in this instance the pressure appears to be too great. Not only have decision-making processes been slowed as a result of economic uncertainty, but enormous job losses have led to the resurgence of protectionism.”

Attaining the forecasted 20-percent to 30-percent growth would normally be quite an achievement for any industry; however, the aspirations of the sector laid out by the Business Processing Association of the Philippines (BPAP) were significantly higher and have certainly been dealt a significant blow recently. In November 2007 the BPAP, in collaboration with McKinsey & Company Global Consultants, published “Roadmap 2010”—a comprehensive, highly ambitious three-year plan to double the industry’s worldwide market share from 5 percent to 10 percent. Reaching this goal meant maintaining at least 40-percent growth from 2008 to 2010.

In 2006 McKinsey consultants estimated a global addressable outsourcing market of $450 billion, of which only 10 percent to 12 percent had been penetrated. Prospects for the Philippines were considerable and recessionary economies in the Americas and Europe should have forced more companies to outsource. Logic suggests that when economic pressure is high there should be increased demand for low-cost outsourcing, but in this instance the pressure appears to be too great. Not only have decision-making processes been slowed as a result of economic uncertainty, but enormous job losses have led to the resurgence of protectionism. These factors, combined with the collapse of the financial community, have, in turn, slowed growth in the outsourcing industry. Nevertheless, prospects remain bright for the long-term future of this young sector.

Ray Anthony Roxas-Chua III, the secretary of the Commission on Information and Communications Technology, recently stated to OBG that, “The year 2009 will surely test the resiliency of the BPO sector in the Philippines. Growth has been hindered by delays in decision-making among major firms, as well as rising economic protectionism in recessionary economies. On the other hand, quite a few firms will now have to seriously consider outsourcing simply because of their bottom lines. While we might not experience the same level of growth as in the past, we still anticipate a strong growth of 20 percent to 30 percent.”

The advantages that the Philippines maintains over competitors regionally and globally are quite clear today. With the third-largest English-speaking population in the world, the Philippines holds a significant lead over most of its competitors. Those countries that do boast of large English-speaking populations, such as South Africa, are not able to compete on a cost and/or quality basis with the Philippines. The country produces well over 400,000 graduates per year who are well equipped to perform a multitude of tasks. Low wages, operating costs and a customer-service-oriented culture all contribute to round out the Philippines as an ideal outsourcing destination.

The first decade in the life cycle of the BPO industry has focused primarily on the realm of voice services, such as contact centers (otherwise known as call centers). In fact, call centers in the Philippines jumped from four sites in 1999 to 280 sites in 2008, while in 2007 some 70 percent of the BPO work force was employed in a call center, generating 75 percent of the industry’s revenues. The impressive 50-percent growth figures achieved during the five years prior to the global economic crisis were primarily on the back of voice services. Today, maintaining the high growth figures is requiring a greater degree of sophistication, with a new frontier emerging to propel further industry expansion as a result.

Diversification in the BPO industry has come via the development of nonvoice services. These typically specialize in higher-returns office operations, such as legal, accounting, animation and medical-transcription services, and generally require a more skilled work force, which the country continues to produce in large numbers. In fact, many of the country’s educated accountants, nurses and engineers have been forced to seek employment outside of the country due to limited domestic job opportunities. The growing demand for nonvoice services means at least some of those overseas foreign workers may find adequate employment domestically. Increasing numbers of multinationals are also attracted to the Philippines in order to set up internal back-office operations.

According to Oscar Sanez, the CEO of BPAP, “The one advantage we have with nonvoice activities is that our universities are even more prepared to train graduates in these BPO functions compared with the generalist functions we hire for the voice sector. The voice sector requires supplemental intensive training courses, particularly in language proficiency and accent neutralization.”

He later added, commenting on the geographic widening of the industry, “While many young people come to Manila to work, we also know the city only produces 25 percent of the county’s university graduates. In the meantime, the telecoms infrastructure in the country’s ‘Next Wave Cities’ is now on a par with Manila, driven by the Cyber Corridor project [north-south fiber-optic network].”

Although the development of the BPO industry in the Philippines has centered on the Greater Metro Manila area for the majority of its brief existence, the spotlight is now shifting to what Sanez and the BPAP are labeling as the Next Wave Cities. These second-tier cities now offer a sufficient supply of quality labor, as well as adequate infrastructure to support the sector. Cities such as Cebu, Davao and Baguio have emerged not only as reliable alternatives to Manila, but in many instances preferred locations due to their notable cost competitiveness.

While the Philippines’ sunrise industry may fall short of achieving the lofty goals it set out for itself before the mounting effects of the US-led economic downturn, it is still arguably the premier outsourcing destination in the world based on quality, value and variety of services. When the outsourcing sector eventually meets the targets set by the BPAP in 2007, possibly in 2011 or 2012 instead of 2010, most experts predict the industry will contribute 8 percent to 10 percent of the country’s GDP. Quite an achievement for an industry still in its infancy. n

While the majority of industries are struggling to cope with the effects of the ongoing global economic downturn, the Philippines’ business-process outsourcing (BPO) sector is expected to post 20-percent to 30-percent growth in 2009. Although this is far short of the near-50-percent increase the industry enjoyed throughout 2004 to 2007, it will certainly play a major role in keeping the Filipino economy afloat during what is proving to be a challenging year.

Philippines' Landbank net profit jumps 40% in Q1

G. S. dela Peña

STATE-RUN Land Bank of the Philippines (Landbank) posted higher net income during the first quarter compared to a year ago on higher revenues from loans and foreign exchange trading.

In a statement, Landbank said its first quarter net income reached P1.7 billion, 40% higher than the P1.2 billion notched in the first quarter last year.

The bank attributed the growth to higher revenues from loans following the 42% expansion in its lending portfolio to P185.1 billion from P130 billion.

Loans were backed by an 11% growth in deposits to P326 billion from P292 billion.

Landbank also said it posted gains from foreign exchange trading but did not disclose figures.

"Our efforts to operate more effectively while undertaking focused marketing is aimed at further boosting our capabilities that will allow us to provide more credit support and technical assistance to our priority sectors," Landbank President Gilda E. Pico said in a statement.

The bank’s capital also grew by 9% to P38.7 billion from P35.5 billion.

Landbank plans to raise as much as P7 billion in Tier 2 capital within the month to strengthen its capital base.

The bank’s assets rose by 11% to P427 billion from P385 billion in the first quarter, enabling it to maintain its ranking as the fourth largest lender in the country.

The dying dollar and what it means to you

Outside the Box
John Mangun
Business Mirror

The financial and global economic game has changed. The result will be the most profound shift in wealth seen in our lifetimes. And you can be the ultimate winner because you are sitting here in the Philippines.

Often my ideas expressed in this column are characterized as the words of a mouthpiece of the government or the ravings of some fool who thinks the Philippines, for whatever reason, is some paradise on earth. Neither of this is true. However, the events unfolding in the USA and reflected on the global markets is going to make the next 12 months a historic turning point, particularly in the fortunes of the Philippines.

If you read yesterday’s BusinessMirror opinion page, I hope you caught William Pesek’s column entitled “Irrational Exuberance” about the huge increases in Asian stock markets this year. Pesek’s thesis is that regional markets are way out of control, showing “bubble-like” price action and are due for a rude awakening and fall. He could not be more wrong.

The historic strength of the dollar and the ability of the US Federal Reserve to control the value of the dollar have, in turn, controlled national economies from Albania to Zimbabwe and the long-term price of all commodities.

When crude-oil prices rose so high that the US economy started suffering greatly against the backdrop of the 2008 subprime crisis, the Fed simply raised the dollar value from 72 to 88 as reflected in the US Dollar Index against a global basket of currencies. Dollar up; crude-oil price down. Market reality kicked in in January 2009, and the dollar fell back to 80. But the USA, and particularly its government, needed some good news, most easily found in a rising stock market. So suddenly, the dollar went up again to 89, convincing investors that the worst was over, and they all rushed to buy US stocks, particularly foreign money, as they wanted to profit from a strong dollar.

But along came the economic proposals of the Obama administration. Since March, the dollar has dropped back to 82 and there is little the Fed can do about it. At the same time, the Asian markets, including the Philippines, have soared like an eagle in flight. Now Pesek thinks markets like ours going up is not justified. Oh yes, it is, and you have not seen anything yet.

Note these facts. The US government budget deficit is already twice as large as the total deficit for all of 2008. For every dollar the US government is spending, it is borrowing 50 cents to fund that spending. That kind of deficit spending has been unheard of in First-World countries. Second, the deficit situation is getting worse and will be a disaster before the year is over.

April is income-tax-paying month just like in the Philippines. Hundreds of billions of dollars pour into the Federal treasury. Yet last month, for the first time in memory, government spending in April was greater than revenues by some 30 percent. That deficit is paid for through borrowing and by printing dollars.

The dollar at 82 instead of 88 has caused the recent jump in oil prices. US gasoline prices are at a 10-week high, which just happens to coincide with when the dollar started dropping. The last thing the US economy needs right now are high fuel costs, and yet the Fed has done nothing to stop the dollar dropping (and oil going up) because they cannot. The USA cannot pay for its spending except by printing dollars, and this uncontrolled printing of currency cannot lead any place except to major inflation.

When the dollar reaches 80 on the dollar index, this will signal the beginning of a major spike in US inflation. At 70, this inflation will be obvious to the global markets and not be considered just an oil-spike event. At 60, the US economy will be spiraling out of control.

Although US interest rates will climb, foreign money will stay out as the interest-rate income will be more than offset by dollar devaluation. Money will flood into stock markets like the Philippines as a “safe haven.” The Philippine peso will move to a range of 40 to 42 within 12 months. Foreign investors will make profits from both stock prices going up and peso appreciation. Nominal oil prices will move much higher, but increases here will be offset by the peso’s strength. Gold will easily break $1,100. 

Pesek is wrong about the course of Asian markets. Asian markets are forecasting what is going to happen in the USA, and what is going to happen in countries like the Philippines.

The Philippine peso at 40. Inflation at 4 percent. The stock market at 2,500. These are just some of the kinds of economic numbers we have not experienced all at the same time before. We will in 2009, and this will be a positive game-changer for the Philippines and for all of us.

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Wednesday, 13 May 2009

Worst is over for Philippine economy

Signs show the worst is over for RP, economic planner says
Regina T. Aguilar

MACTAN, CEBU — The global and the domestic economies are showing signs that the worst is over, an official of the National Economic and Development Authority (NEDA) said yesterday.

From a rebound of 15.9% growth in exports last March from five consecutive months of decline, to increasing employment opportunities overseas, to rehiring of laid-off workers — all amid a muted inflation environment that is expected to boost consumption — signs are showing that "the worst seems over...for the Philippine economy," NEDA Deputy Director General Rolando G. Tungpalan told reporters after a Cabinet meeting here. "Inflation is now down to 4.8%. It is rapidly falling and will boost personal consumption," he said.

He also referred to the statement in mid-March of US Federal Reserve Chairman Ben S. Bernanke that recession there could end this year, triggering a rally in global markets. The US remained the Philippines’ single biggest export market, accounting for 17.3% of total exports last March, followed by Japan with 15.4% and China with 10.6%.

Almost 100,000 jobs are now also available abroad for the Filipinos, said Mr. Tungpalan. About 15,000-20,000 jobs are being offered in Guam, 60,000 in Saudi Arabia and 20,000 in Qatar.

He also noted that, here in Cebu itself, export firms are rehiring laid-off workers to meet demand that is picking up abroad.

Nationwide, the number of displaced workers fell to 1,026 last April 1-15 from 14,512 in March, he noted.

Philippines' Petron to spend $1 billion for upgrade

Reuters with a report from J. B. F. Santos

THE PHILIPPINES’ top oil refiner, Petron Corp., plans to spend as much as $1 billion to upgrade its facilities, which it will partly fund through bonds and a preferred share issue.

Ramon S. Ang, company chairman and CEO, said after an annual meeting yesterday that bonds worth P10 billion would be issued in two tranches, with the first half likely in May or June.

"We were [also] thinking of issuing P15 billion worth of preferred shares," he told reporters.

Earlier, Petron said in a statement it would invest as much as $1 billion "for additional facilities to enable the full conversion of residual products to more valuable gasoline, diesel, LPG and propylene".

It said funds could come from an offering of fixed rate notes and retail bonds, but Mr. Ang said the only plans for now were the bonds and the preferred share sale.

Petron has a capacity of 180,000 barrels per day and sells nearly 40% of the Philippines fuel requirements. The company is undertaking the second phase of an expansion plan for its petrochemical venture.

Petron President Eric O. Recto said some P450 million had been allocated to finance an additional 200 stations nationwide.

"It’s a different model, typically our service stations cost quite a bit more than that ... these are the micro filling stations," Mr. Recto said.

"It’s a way to address competition. There’s no denying that [the smaller players] have made inroads," he added.

The firm currently has 1,300 gas stations and added just 35 last year.

Mr. Ang said the expansion was "in line with our strategic initiative to strengthen the company’s core business and ensure our market dominance."

Philippine food and beverage conglomerate San Miguel Corp. has an exclusive option to buy a 50.1% stake in Petron from UK investment firm Ashmore Group.

Ashmore’s holdings in Petron are held by its wholly owned subsidiary SEA Refinery. The group currently holds a total of 90.57% in Petron after it bought out the government in December in a $544-million deal.

San Miguel, which is diversifying into power and heavy industry, has until December 2010 to exercise the option to buy the Petron shares.

Mr. Ang, who is also the president of San Miguel, said in the statement there were significant opportunities for synergy between the two companies.

"Early indications from various institutions signify a high level of interest for our planned fund raising activities," he said. "This positive response means they recognise the company’s solid fundamentals, undisputed market leadership and potential synergies with San Miguel."

Petron said its January-March net income climbed by a third to P874 million. Analysts expect 2009 net profit to rise about 30% to P5.2 billion.

Petron shares yesterday rose to P5.70 from P5.60.

Philippine outsourcing firms ramp up recruitment campaign

BPO firms ramp up recruitment campaign
Manila Bulletin

The business process outsourcing (BPO) industry is intensifying its recruitment and staffing campaign to meet the needs [of] the sector.

The industry has already 60,000 new jobs this year, bringing its total projected employment 700,000 to 800,000 by 2011.

Oscar Sanez, Philexport trustee for the information technology (IT) services sector, said: “The growth of between 20 to 30 percent this year is still going to be remarkable given the global (bleak) outlook facing the industries right now. While there are challenges in this crisis, we are confident that these can be achieved,” he said.

Sanez based his optimism on the robust growth of the non-voice BPO which is growing at a faster rate than the call center sector now comprising two-third[s] of the BPO industry.

Non-voice BPO includes back-office/knowledge process outsourcing, legal and medical transcription, digital animation, information technology (IT) outsourcing and game development.

“Employment is certainly a positive prospect. While we probably will not hit the one million employment goal given to us, we will be getting close to between 700,000 to 800,000 workforce by 2011,” he said.

Tuesday, 12 May 2009

Tourism Act of 2009 enhances the Philippines' tourism competitiveness

LAPU-LAPU CITY (PND) --- The Philippines’ tourism industry can be more globally competitive with the signing into law today of the National Tourism Act of 2009 by President Gloria Macapagal-Arroyo during the “One Visayas Summit on Climate Change” at the Imperial Palace here.

The Tourism Act of 2009 or Republic Act (RA) 9593 declares it a national policy for tourism to be one of the country’s engines of investment and employment, and of growth and national development.

The President noted during the one-on-one regional interview that the signing of the tourism statute in Cebu is appropriate at this time, as the province is the “number one international destination in Asia” while the Visayas region is the country’s tourism center.

RA 9593 declares "a national policy for tourism as an engine of investment, employment, growth and national development, and strengthens the Department of Tourism (DOT) and its attached agencies to effectively and efficiently implement that policy, and appropriates funds therefore."

With the new law, the DOT has been “given a bigger jet engine so we can climb up. It provides us more capability and resources to make our tourism industry very globally competitive” as the law allows the setting up of a system of accreditation, standards-setting and classification to make the tourism industry globally competitive, said Tourism Secretary Ace Durano.

The Act declares that tourism is an "indispensable element of the national economy and an industry of national interest and importance, which must be harnessed as an engine of socio-economic growth and cultural affirmation to generate investment, foreign exchange and employment, and to continue to mold an enhanced sense of national pride for all Filipinos."

The new law empowers the DOT to strengthen the different agencies attached to it in order to more efficiently and effectively coordinate the functions and resources of government for tourism promotions and development programs, as well as eliminate overlaps of functions.

The Act also reorganizes the Philippine Convention and Visitors Corporation (PCVC) into the Tourism Promotions Board (TPB), a body corporate responsible for the marketing and promotion of the Philippines as a global tourism destination by highlighting its tourism products and services.

It also reorganizes the Philippine Tourism Authority (PTA) into the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), a body corporate mandated to designate, regulate and supervise tourism enterprise zones (TEZs) as well as develop, manage and supervise tourism projects in the country.

Meanwhile, the Duty Free Philippines (DFP) will become the Duty Free Philippines Corporation (DFPC), a body corporate mandated to operate the duty and tax-free merchandising system in the country.

The Act provides that the TPB and TIEZA will each have a capitalization of P250 million to be subscribed by the national government.

The Act also establishes "tourism enterprise zones" in strategic areas, including Cebu, Davao, Bohol, Laguna, Cavite, Boracay, Palawan and Iloilo, to lure foreign investors and tourists to visit places rich in history and culture.

Thus, it will spur the creation of jobs and open additional channels for the infusion of much-needed investments as well as give the people the power to pull themselves out of the economic recession.

The new law also provides TPB funding from investment earnings of the Tourism Promotions Trust; appropriation from the national government of not less than P500 million annually for at least five years from the time of its constitution; 70 percent of the 50-percent net income of the DFPC accruing to the DOT; and at least 25 percent of the national government share remitted by international airports and seaports to the National Treasury.

On the other hand, the funding for TIEZA will come from 50 percent of travel tax collections; a reasonable share from the collections of the Office of Tourism Resource Generation; income from projects managed by the TIEZA; and subsidies or grants from local and foreign sources.

Meanwhile, the DFPC will have a capitalization of P500 million, and funding for its operations will be sourced from its internally generated income and other receipts.

"The law primarily promotes the tourism industry through the development and integration of tourism concepts, regulates standards for the operation of the tourism industry and establishes a tourism infrastructure program," said Sen. Richard Gordon, principal author of the measure.

"With the faithful implementation of this measure, the nation can have a better institution to regulate and promote tourism and install the necessary infrastructures to make our country truly world-class," he added.

The DOT will lead the establishment of a tourism infrastructure program and coordinate with other agencies to identify vital access roads, airports, seaports and other infrastructure requirement in identified tourism areas, Gordon added.

Philippines reports 14.7% increase in 2008 deployments

Manila (12 May) -- Administrator Jennifer Manalili of the Philippine Overseas Employment Administration (POEA) said there is a 14.7 percent increase in deployments in 2008 as compared to the figures in 2007.

The Malacanang press report disclosed that Administrator Manalili said more Pinoys got hired abroad last year as she disputed claims of some players in the recruitment industry that the number of overseas deployments is diving. .

She also clarified that land based new hires in 2008 reached 376,973 which is 20.3 percent higher than 2007 and far from what the source in the newspaper reports claimed.

The 2008 POEA final report also revealed that the Middle East —particularly Qatar, UAE, Oman and Kingdom of Saudi Arabia —continued to be the favoured destination for OFWs where there was 33.9 percent increase for new hires as compared to 2007 statistics.

OFW contracts processed in 2008, Manalili said, registered 1.464 million which is 12.1 percent increased compared to 2007 figures, the Malacanang press report disclosed. (PIA 6)

Philippine National Bank net income in ’09 seen best in 7 years

Erik de la Cruz
Business Mirror

THE Philippine National Bank (PNB) on Monday said its first-quarter net income jumped 59 percent from year-ago level to P728 million, making it optimistic that 2009 will see the bottom line figure hitting the highest level in seven years.

It gave no exact figure for the full-year forecast. The bank earlier posted a 25-percent decline in net income last year to P1.12 billion due mainly to mark-to-market losses in investments.

“The upsurge in profitability came on the strength of sustained volume growth in its core businesses, improved yield profile and effective management of risks,” the bank, the country’s sixth-largest in assets as of end-2008, said in a statement. Total assets, however, fell to P276.2 billion as of end-March, from P276.8 billion a quarter-ago.

Lending increased by 31 percent, boosting net interest income by 61 percent to P2.1 billion. Deposits increased by 11 percent to close to P200 billion.

Net gains from foreign-exchange transactions surged 172 percent to P1.6 billion, and PNB said this offset the effect of mark-to-market losses on investment securities.

The bank said earnings improved despite the rise in operating expenses, which include a “significant” retirement expense following its implementation of an early retirement program which began in December 2008. No figures were disclosed.

The bank has begun offering a retirement package to its employees ahead of its merger with Allied Banking Corp. Both banks are controlled by tycoon Lucio Tan.

Provisions for impairment and credit losses were also increased by P265 million as it took a “conservative” stance in evaluating its loan portfolio.

Further provisioning was a “well-placed” move, the bank said, “as the local economy remains vulnerable to adverse developments following the global financial crisis.”

Its nonperforming-loans ratio improved to 7.8 percent as of end-March, reflecting the reduction in bad loans by close to P1 billion to P9.8 billion as of end-March.

The bank registered a capital-adequacy ratio—a measure of capital expressed as a percentage of risk-weighted credit exposures—of 18.1 percent, well above the minimum regulatory requirement of 10 percent.

PNB said its merger with Allied Bank was still awaiting regulatory approvals which are contingent on the completion of Allied Bank’s divestment of its 28-percent equity share in California-based Oceanic Holding (BVI) Ltd., which wholly owns Oceanic Bank Holding Inc. prior to the merger.

The merger was supposed to be completed by end-2008 but was pushed back by six months due to regulatory issues.

“Even with the delay, both banks have made significant progress to fast-track the integration process,” PNB said.

High-growth global activities source of optimism for the Philippines

Written by Jun Vallecera
Business Mirror

AUTHORITIES are looking to three different but high-growth places around the world not just for support but for continued optimism on the external sector, particularly on forecast remittances of millions of overseas Filipino workers (OFWs) seen dipping by as much as 30 percent this year.

According to the Bangko Sentral ng Pilipinas, sustained infrastructure buildup as well as expanded social services in Saudi Arabia, Japan and the US protectorate of Guam were seen to dampen the debilitating impact of the ongoing global economic downturn on forecast OFW remittances this year.

While the BSP has painted a zero or no-growth scenario for remittances this year, Deputy BSP Governor Diwa Guinigundo said in no way were these seen to contract in magnitude as deep as 30 percent, according to projections by the British-owned bank HSBC.

“Based on what we know today, there is basis for us to be less pessimistic than what these doomsayers and experts are saying about our OFW remittances this year,” Guinigundo told reporters.

HSBC, which handles the bulk of all remittances sent home each year by millions of OFWs, sees the volume contracting by 20 percent up to 30 percent from last year’s $14.45 billion.

The International Monetary Fund sees it contracting by at least 7.5 percent, and the World Bank by 4.5 percent.

According to Guinigundo, in places like Saudi Arabia where the deputy governor of the Saudi Arabian Monetary Authority personally bared plans for the buildup of local infrastructures, demand for Filipino workers was seen sustained this year.

In the old Saudi capital of Jeddah, for example, one project to refurbish the look of the city will cost $45 billion and involve 40 percent of all labor by Filipinos, he said.

“Filipino labor is still much preferred because we are known as fast workers and understand English instructions,” he said.

The American military decision to relocate its military base in Okinawa, Japan, further southeast to Guam, requires the recruitment of between 20,000 and 30,000 workers—most of them likely Filipinos, Guinigundo added.

This does not include the positive impact to be generated by thousands of Filipinos in the medical-care sector recruited under the Japan-Philippines Economic Partnership Agreement (Jpepa), according to Guinigundo.

That agreement, he said, requires the sending of Filipino hands totaling 2,000 to 3,000 this year alone.

He reiterated that the zero-growth scenario the BSP drew this year for OFW remittances was deliberately conservative.

But for reasons just cited, there really is ground to argue that OFW remittances this year should post positive growth instead, Guinigundo said.

Managing your assets

Outside the Box
John Mangun
Business Mirror

It must be difficult to know what direction your money should be moving when you read all the diverse opinions. Until conditions change, it is necessary to keep hammering about adjusting your asset placement. We are still at the beginning of a shift in what will work and what will not work to make you wealthier.

Last year was a year to conserve, become more efficient and wait out the inflationary spiral. This year is the time to break out that idle money and let it grow.

Yesterday, one of our local experts was writing about the stock market and how great an investment in the Philippine Stock Exchange would be. Except, virtually every reason he cited was based on what is happening in the USA. Makes no sense.

Further, anyone who bets on the USA right now has more guts than brains, I am afraid. That economy is losing 500,000 jobs a month and even the Obama administration is projecting no employment growth until 2010. The dollar is already taking a hit in the world markets as the euro reached 1.36 from a recent low of 1.32. This is significant.

China is set to report that its exports feel the least last month in the past four months. No reason to get excited, though, as this is a result of inventory replacement and some consumer optimism, but not in the USA.

Our local stock market is breaking into a new long-term rally that will last months and push prices near historic highs. You must get onboard if you want to increase your wealth. Every sector of the Philippine economy, except exports, is growing, and that growth is being and will continue to be reflected in local stock prices. Stocks like Megaworld are up more than 100 percent from 2008 lows, and yet, the rally has just started.

As mentioned before, your totally safe money that you will not need for some time should be placed in one-year bank time deposits or in Philippine government debt. The government is going to lower interest rates to rock bottom as long as the peso does not weaken against the dollar. There is absolutely no reason for local interest rates to be high except to protect the value of the peso. The lower rates go, the more lending and general economic activity is generated. Inflation is forecast to be 4 percent for 2009. This is an incredible improvement over 2008 and will lead to a spurt of economic growth not predicted by the foreign wizards. This low inflation rate will cause a drop in interest rates. You need to lock in high returns now.

And the movement of interest rates is another reason to stay far away from the dollar. I do not care who is calling for a weaker peso through the end of the year. They are wrong, wrong, wrong.

Remittances will grow, at the worst, by a near double-digit amount. Dollar inflows from the outsourcing business are unstoppable. All the negative talk about poor FDI (foreign direct investment) is valid but can be offset by local investment.

Local investment is more important than FDI. Local investment does not pull out; it is vested in the Philippines. The Shoemart group is spending P12 billion to build four new malls this year. That is worth twice as much as any foreign investment over the long term. Yet there is foreign investment that seems to be ignored by the “experts.” New Philippine Economic Zone Authority investments are up 30 percent over 2008. Note this about the “distressed” IT sector. From Philippine Star: “Texas Instruments [TI] has announced that its new assembly and test facility is now fully operational here and is ramping production with the latest packaging technologies. Earlier, the CDC said TI is expected to invest some $1.5 billion in its facility here.”

If you want some investment bargains, get your focus outside of Metro Manila. There is a tremendous amount, relatively speaking, of wealth building and investment in the provinces. A weekend trip North or South will open up both real-estate and business opportunities that you are missing here in the metropolis. Not only is the “smart” local money quietly buying assets in the province, but also foreign money is investing there. Witness the expansion of the outsourcing companies in Iloilo, Bacolod and other provincial locations.

Your liquid and available cash should be distributed in the following manner. Get 25 percent into interest rate-locked investment right now. I guarantee that the interest rate you will receive in a month will be lower than what you can receive today.

Put 40 percent to 50 percent of your cash into the stock market. Forget about looking for the “hot tip” stocks. Go buy the “household name” companies. Thirty-percent to 40-percent return through the rest of 2009 will be normal. And here again, buying stocks in a month or two will cost you more. Go buy some real estate, but not the high-end properties. Get out of Metro Manila in order to find better value for the purchase price. Provincial real estate is a long-term hold where you will see a five-year double-your-money proposition.

I will say it again, and probably again and again. If you do not substantially increase your wealth in 2009, you have no one to blame but yourself.

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Monday, 11 May 2009

Philippine National Bank Q1 net income rises by 59%

Gerard S. dela Pena

LUCIO Tan-led Philippine National Bank (PNB) on Monday reported a 59% increase in its net income for the first quarter of this year to P728 million from P457 million during the same period last year.

A sustained rise in lending volume and better earnings from its foreign exchange transactions lifted its profits for the period, the bank said.

Its net interest income went up by 61% to P2.1 billion from P1.3 billion, driven mainly by the 31% increase in its loans and receivables, as lending to corporate, consumers and small and medium enterprises expanded with new accounts and higher utilization of existing borrowers.

The bank's deposits for the period also grew by 11% from last year to P200 billion while net gains from foreign exchange transactions grew by 172% to P1.6 billion from P571 million.

The significant gains in its foreign exchange transactions offset the rise in its expenses, which were driven by higher retirement expense in line with its early retirement program ahead of its merger with Allied Banking Corp, the bank said. —

More BPO firms flock to the Philippines amid crisis

Karen Flores

More jobs just keep on coming to the Philippines this year as business process outsourcing (BPO) firms continue to expand their operations in the country amid the economic crunch.

Industry group Business Process Association of the Philippines (BPAP) said the outlook remains positive for the Philippines as members expect a 200 percent growth in employment this year. The growth will come from both existing and new players.

Leading outsourcing firm Convergys, for instance, is on a roll with its expansion plans for the country this year, opening three new contact center facilities in Cebu, Quezon City, and Laguna last month.

The new centers added some 2,900 jobs to the country's workforce, bringing Convergys' total headcount to 16,000.

To further increase the size of its already huge workforce, Convergys Senior Vice President for Human Resources Clark Handy said the company has been offering a two-day Oral Communications in English Program for teachers.

He added that Convergys has been working with the local government to ensure the availability of top talent for their business.

"We believe this initiative will directly impact the future success of the BPO industry and ensure an English proficient talent pool for our future growth and for the country's global competitiveness," he said in an interview last month.

On the other hand, BPO company Affiliated Computer Services Inc. (ACS) is also planning to add 2,000 more seats in the next six months as it continues to strengthen its presence in the country through its offices in Makati, Pasay, and Cebu.

"We are very excited about prospects in the Philippines," ACS Executive Vice President Ann Vezina said. The Philippines is the second largest offshore facility of ACS with some 3,000 employees, led only by India with 5,000 seats.

Around 70 percent of ACS's operations is based in the United States, with the remaining 30 percent offshore. Vezina said the company is aiming to reverse the ratio in the coming months, which may translate to even more job opportunities for the country.

New entrants

The market is also faced with new entrants this year as HP Outsourcing Philippines Inc. and Thomson Reuters Legal have recently expressed their interest to put up facilities in the country for their respective businesses.

HP Outsourcing Philippines, a subsidiary of the Hubport Group, recently signed a memorandum of agreement with the Mindanao State University-Iligan Institute of Technology (MSU-IIT), a university known for its information technology and engineering programs, allowing the BPO firm to put up its office there.

The 24-hour facility will serve two functions: as a remote office for Hubport's commercial operations, and as a virtual computer laboratory for the on-the-job training of MSU-IIT students on web design, animation, transcription services, and other skills. Students who are part of the program have higher chances of employment at Hubport.

Leading data provider Thomson Reuters, on the other hand, will be putting up its first facility in the Philippines that is devoted exclusively for their legal content business. Despite this, the company has been in the country for 63 years, with its operations including customer support and content operations, among many others.

In a press briefing last month, Thomson Reuters Legal said the type of work planned for the Manila facility would involve document receipt, copy preparation, conversion of source documents, application of coding to documents, and data load support.

There has been no specific timetable yet for Thomson Reuters Legal's operations in the country, although company officials said they are hoping to start operating in the Philippines before the year ends. They are also considering McKinley Hill at the Bonifacio Global City in Taguig as a site for their facility.


The economic crisis has forced most companies to cut down on production costs such as manpower and rentals to survive, making them move some of their businesses offshore.

This has greatly benefited the Philippines as the BPO industry served as a sponge for the surplus of graduates that other sectors could no longer absorb.

A recent survey conducted by the Business Process Association of the Philippines (BPAP) revealed that 95 percent of BPO executives and human resource managers had a positive outlook for job growth for the industry in 2009. Specifically, industry players are expecting a 200-percent growth in employment this year.

"With at least 97 percent of surveyed companies providing moderate to high-value services, and 95 percent expecting employment growth, the question for the industry whether current academic standards and curricula are aligned with the increasingly complex requirements of the BPO industry," BPAP Research Director Gigi Virata said.

The biggest growth is expected from companies that employ 5,000 to 10,000 personnel, with 33 percent expecting jobs to grow between 11 percent and 15 percent in 2009, the survey said.

Filipino talent

The Philippines, with its low labor costs, right skill sets, proficiency in English, and cultural and social affinity with the United States, has become an attractive site for outsourcing operations.

But above all these, industry players cited the availability of high-quality talent in the Philippines, making the country an ideal location for their businesses. Specifically, BPO companies saw managerial talent and leadership skills in Filipinos, giving them an edge over other countries.

"The talent of the people, education, fluency in English, work ethic, young and dynamic workforce, I could go on and on. [The Philippines] is a very special place," said Fred Gordon, Vice President for Content Operations of Thomson Reuters Legal, told reporters last month.

Convergys Senior Vice President for Human Resources Clark Handy added:
"Employees who are well-educated, English-proficient, and have a strong understanding of US culture are the keys to Convergys' success."

For her part, Vezina said the Philippines has a lot of talent that gives them the complexity that they need given the diverse business portfolio of ACS. "We see the Philippines as having more than just voice," she said, adding that Filipinos also deliver well in terms of total benefits outsourcing, finance and accounting, and human resources.

as of 05/11/2009 2:31 AM

Where Philippine economic growth comes from

No Free Lunch : Not just any growth
Cielito Habito

MANILA, Philippines—Hardly anybody believes that our economy will not continue growing this year. That’s good news. Even as Singapore and Thailand have already suffered severe contractions, we are among those in East Asia still expected to grow positively, albeit much more slowly. People may differ on how much they expect the Philippine economy to grow this year, but almost everyone expects some growth. And most still expect the economy to grow faster than our population does (which is around 2 percent a year), which means that average income per person will still grow.

So where will this growth come from?

Internal demand

One thing is certain: Foreign demand will not drive our growth this year. Our export figures have been dismal lately, at double-digit negative growth rates since at least the middle of last year, and we all know why. But unlike Singapore, Thailand and Japan where exports have been a dominant source of demand for their products, we export a much smaller part of our production. That is, the bulk of our production is still bought by Filipinos themselves—through household consumption spending, through spending by businesses for investment, and through government expenditures. And so far, we can expect such spending to continue growing enough to offset the dramatic fall in demand from cash-strapped foreigners—and hence still achieve positive overall growth this year.

Which sectors have been benefiting most from this internal demand that continues to grow? Let’s look at the latest available data to get a clearer picture of the situation. The latest production figures we have are for the last quarter of last year; data for the first quarter of 2009 are due for release at the end of this month still. The latest jobs data are as of January. Thus we still can’t be sure about more recent developments.

Filipinos less fed

Our domestic production of goods and services (GDP) grew by 4.5 percent on an annual basis as of the last quarter of last year. That pace of growth did not come from agriculture (including fisheries and forestry), as it grew by only 2.8 percent. Rather, it came from services, which grew 4.9 percent, and industry, which grew 5 percent. But the numbers suggest that agriculture at least grew fast enough to make up for population growth. In other words, farm production grew fast enough to ensure that each Filipinos’ potential share of the overall bibingka (as President Ramos used to fondly illustrate it) has not shrunk. Or did it?

A closer look at the detailed data shows that production of key food crops actually fell. Rice and corn dropped by 2.2 and 4.6 percent respectively. Coconut was also down 0.3 percent. Livestock other than poultry grew only 1.4 percent (thus less than population growth). It was fisheries (11.1 percent), bananas (5.2 percent), poultry (4.5 percent) and forestry (5.3 percent) that gave the boost to make the overall agriculture, fishery and forestry sector grow 2.8 percent.

Note that bananas and fishery products are mostly exported. In the case of the latter, the seemingly impressive growth was really driven by tuna exports, which grew a whopping 79.2 percent (238.3 percent in the previous quarter). We can’t say, then, that each Filipino at least had more fish and bananas to enjoy, even as they had less of rice, corn, coconut and other crops. In sum, agriculture has actually not grown enough to feed each Filipino at the same level as before.

Narrow base

The details of the industry and services sector growth also give a more sobering picture. In industry—composed of mining/quarrying, manufacturing, construction and utilities—the fast growers are just mining/quarrying (12.1 percent) and construction (13.1 percent). But as it turns out, the seemingly impressive mining growth came almost entirely from the Galoc oil field in Palawan (crude oil is classified under mining). Copper, gold, chromium and the rest of metallic minerals all dropped steeply, reflecting the plummeting demand from China. Construction growth came primarily from private construction (17.8 percent vs government’s 3.2 percent), driven by the still brisk growth in real estate (16.7 percent). As we have explained before, this is due to people shifting their wealth from shaky financial assets to more secure real properties. This narrow base for industry’s overall 5-percent growth explains why the sector had actually still lost 121,000 jobs as of January—not exactly the kind of growth we’d like to see.

We still gained a total of 565,000 jobs in the year as of January, but this is only about half of what we need to catch up with new jobseekers every year. The new jobs came almost entirely from services, which by all indications were mostly in the form of informal sector (aka “underground economy”) jobs.

This pattern of growth achieved in the past year should be a fairly reliable indicator of the kind of growth we will achieve this year. It is comforting to know our economy will still keep on growing as a whole. But clearly, more needs to be done so that the benefits of the growth will be shared more widely. We will have to return to that in succeeding columns.

Comments welcome at

Air talks add flights between Philippines, Singapore

Lenie Lectura & Jacob Cunanan
Business Mirror

THE tourism industry’s desire to have more flights to Singapore, among other destinations, has been realized with the increase in airline seat entitlements between the Philippines and that city-state to 26,200 a week.

This was one result of the successful amendment of the Philippines and Singapore air services agreement (ASA) last week that Clark International Airport Corp. (CIAC) president Victor Jose Luciano called “a landmark agreement,” especially for the Diosdado Macapagal International Airport in Clark, Pampanga.

The air talks held in Singapore on May 6 and 7 alloted 11,200 weekly seat entitlements between Manila and Singapore for each side—from 8,700. It also allotted 10,000 seats for each side between Clark and Subic free ports and Singapore; and 5,000 seats to Cebu and Davao cities and back.

Civil Aeronautics Board (CAB) Deputy Executive Director Porvenir Porciuncula said, “We have been asking them since last year to include other points in exchange for their request that more entitlements be added between Manila and Singapore. What has been agreed upon may still be not enough to service demand of Singapore and local carriers.”

He said Philippine Airlines (PAL), Cebu Pacific and Zest Air have all expressed interest in applying for additional flights to Singapore.

PAL flies 20 times per week between the destinations while Cebu Pacific has 18 weekly flights. Zest Air has yet to launch its maiden flight to Singapore pending approval of its application.

Luciano said upon his arrival from the air talks on Friday. “The amended agreement translates to 50 flights weekly between Clark and Singapore, both for passenger and cargo. This air agreement is very good for Clark and the future.”

“Not only that, Clark was given fifth freedom rights to any point around the world, except to the United States and Canada, where air carriers can go beyond Clark to pick up passengers to other destinations in the world and they can do that at the rate of 14 flights per week,” he added.

Luciano is a member of the RP Air Panel headed by Transportation Undersecretary Doroteo Reyes. The other members are the CAB and officials from the Departments of Foreign Affairs and of Tourism, from the CIAC, and representatives of local airlines.

The panel is headed to Spain on May 19 and 20 for similar negotiations. The ASA with Brunei had been signed April, with flight entitlements for both countries increased to two carriers from the previous one, and to seven flights a week from five.

The panel also concluded in March air talks with Australia, resulting in seat entitlements of 6,000 seats from 2,500, for flights between Manila and Clark to Sydney, Brisbane and Perth.

Philippine domestic spending resilient in Q1

1st-quarter corporate results show consumption resilient
By Darwin G. Amojelar, Senior Reporter and Chino S. Leyco, Reporter

FILIPINO consumers have brushed off the impact of the global financial crisis as spending remained resilient in the first quarter of the year, powering the earnings of consumer businesses.

Last week, the country’s two biggest telecom service providers as well as its largest shopping mall operator reported growth in the first quarter despite a global downturn that is expected to cut Philippine economic expansion to no more than 4 percent this year from 4.6 percent last year and a three-decade high of 7.3 percent in 2007.

Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc., which together make up over 80 percent of the domestic market, announced a 4 percent and 3 percent up tick, respectively. The marginal improvement indicated that people in the text messaging capital of the world are still pressing their alphanumeric keypads albeit at a less-than-frenetic pace.

Seven out of every P10 in telco revenues were generated by their wireless business, thus fueling a legislative clamor for a tax on text messaging. Its affordability has made text-messaging a national past time, promoting mobile-phone use into the hottest consumer business since the late 1990s.

In a country where consumers remain the main driver of economic expansion, telco use has become a barometer of overall household spending. The industry contributes about 4 percent to gross domestic product (GDP).

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

The National Economic and Development Authority (NEDA) earlier projected that GDP may have grown between 2.1 percent and 3.1 percent in the first quarter. For the full year, the country’s economic managers see GDP expansion hitting anywhere from 3.1 percent to 4.1 percent.

Remittances boosted consumption

Based on his company’s first-quarter results, Manuel Pangilinan, PLDT chairman said there is some indication that the economy is still in the black. He said overseas Filipino worker (OFW) remittances boosted consumption in the first three months of the year.

From January to February, OFW remittances, which contribute 10 percent to economic growth, grew 2.5 percent to $2.6 billion, according to the Bangko Sentral ng Pilipinas (BSP).

In its most recent survey, the BSP said consumer confidence improved in the first quarter to -25.7 percent from -32.1 percent and -40.3 percent in the first and fourth quarters last year.

The BSP said this was partly due to lower prices of oil and other food items, as well as positive news that the unfolding global financial crisis will not hit the Philippines as hard as other countries.

Ernest Cu, Globe president, agreed the weaker peso and lower inflation boosted consumer spending.

“When the peso depreciates, we have more remittances floating in the system available for spending,” he said.

The peso average 47.79 to a dollar in the first three months compared with the P40.95:$1 exchange rate in the same period last year.

“Despite earlier apprehensions that our core businesses would already be negatively impacted by the global recession, we are pleased by our strong performance in the first quarter of 2009—activations for the period were the highest in recent history and revenues continue to grow,” Napoleon Nazareno, president and chief executive of PLDT and unit Smart Communications Inc. said.

Astro del Castillo, managing director of First Grade Holdings said the first quarter earnings were not bad despite the softening.

“Remember our biggest scare is the remittances. There’s a slowdown, but it was not really a slump,” he said.

The analyst said the promotional offerings and price adjustments of the companies particularly the telcos helped stimulate consumer demand.

High foot traffic, healthy sales growth

“I think the economy is resilient . . . we’re not seeing the effect [of the crisis] in the first quarter,” Pangilinan said, adding that besides PLDT, the first quarter financial reports of the banking and retail industries were likewise “positive.”

Indeed, SM Prime Holdings Inc. announced signs of improving economic conditions, citing the 18-percent jump in its revenues in the first quarter after last year’s slump.

“The SM malls continue to enjoy high foot traffic and healthy sales growth,” Hans Sy, SM Prime president said.

At end-March, consumers resumed spending on entertainment, as SM Prime’s cinema ticket sales improved 8 percent year-on-year.

Last year, when inflation hit a 17-year high of 12.5 percent in August, the company’s entertainment segment suffered a drop in ticket sales, while commercial center sales slumped 13 percent.

Sy said skyrocketing commodity prices triggered lower spending last year.

This year, he said consumer spending would hold up as inflation moves at a much slower pace, amid the continued inflows of OFW money and a weaker peso.

Gregory Domingo, executive director of parent firm SM Investment Corp., said that even if remittances failed to grow this year, the “$16 billion is still a huge amount of money that would support our operations.”

In the fourth quarter last year, personal spending grew at its fastest pace in three years.

Moving forward, the BSP said consumption growth would stay resilient and drive economic expansion this year, citing the continued inflow of remittances from abroad and the expansion of malls in Metro Manila and provincial areas.

Pre-election spending to influence demand

“As we get on [to] the second half of the year, there could be some pre-election spending that might start the system, therefore influence demand,” said Alberto de Larrazabal, Globe head for treasury.

Ferdinand de la Cruz, the telco’s wireless business head, said the company is giving “all good value offering[s]” because the environment is still uncertain.

“You have to really offer good value whether on the postpaid or on the prepaid [to drive demand]. Promos make the service more affordable,” he said.

With the current shift to bulk packages and slower subscribers’ growth, average revenue per user (ARPU) is going down, Nazareno of PLDT said.

“We’re not seeing the situation dragging us down, although we are noticing that there are people taking advantage of bucket price promos. People are going to value for money,” he said.

Sunday, 10 May 2009

Philippine President signs tourism law in Cebu

President Gloria Macapagal-Arroyo signs Tuesday (May 12) the Tourism Act of 2009 in Cebu City, the country’s tourism capital. The signing into law of the tourism bill will coincide with the opening of the newest and one of the biggest hotels in the southern island province.

Press Secretary Cerge Remonde said the President will sign the law “in a very special ceremony at the tourism capital of the country, which is my home city, at 12 noon in conjunction with the inauguration of the new Imperial Hotel in Cebu.”

The President will also hold the Cabinet meeting in Cebu City on Tuesday.