Saturday, 4 July 2009

Philippine presidential elections 2010 -- The upcoming Manny Villar - Noli de Castro rivalry

By Efren L. Danao
Manila Times

The Philippines will definitely have a refreshingly new kind of election campaign should Vice President Noli de Castro and Sen. Manny Villar be the only presidential candidates in 2010.

Black propaganda and mud slinging have been par for the course in the hustings, but I don’t see them rearing their ugly heads in a fight limited to the two bosom friends. At the roundtable with Manila Times staffers, Senator Villar said he expects a friendly rivalry should de Castro run against him. (The two are members of the Wednesday Group that also includes Sen. Joker Arroyo, Sen. Kiko Pangilinan, Sen. Lito Lapid and former senator, now Socioeconomic Planning Secretary Ralph Recto.)

“I told Noli that even if we would become rivals, there is no reason for us to become enemies. I assured him that should he win, I will immediately concede on Day One. I value friendship,” Villar said.

There! That also removes a heated protest in a post-election scenario. How wonderful it would be to have such a peaceful election period from campaigning to post-proclamation! But remember, this is only if they are the only presidential candidates in 2010, which may not happen at all.

Kid gloves off vs. other rivals

Villar believes there would be up to four serious presidential candidates in 2010. Of course, he is one of the four, no ifs, ands or buts about it. And definitely, the gloves would be off should his rivals include Sen. Mar Roxas and Sen. Loren Legarda. The two had made no bones on wanting him out of the Senate Presidency since the First Regular Session of the Fourteenth Congress “to level the 2010 playing field.” And when they succeeded in installing Sen. Juan Ponce Enrile as primus inter pares at the Senate, they cited Villar’s alleged conflict of interest in pursuing the C-5 road extension project as one of the reasons why Villar should go.

“They should be explaining what they had done in their provinces instead of asking me why I had built the C-5 road extension project,” he said.

He prides himself in pushing for the project that he said would benefit millions of commuters from Southern Tagalog, especially Cavite, and Metro Manila. He said he has no intention of attending the hearing by the Committee of the Whole of the alleged double funding of the C-5 road extension project after the committee adopted the rules of the Senate Committee on Ethics headed by Sen. Ping Lacson.

Incidentally, Villar remains high in surveys despite that charge. A survey conducted by the Issues and Advocacy Center on May 18-25 gave this explanation: “Respondents have a hard time reconciling the stature of Sen. Villar as the richest member of the legislature with the charges that he pocketed an amount which is considered minuscule if ranged against his admitted assets. That fact that Sen. Villar’s accusers themselves lack credibility helped in allowing Sen. Villar to continue enjoying the sympathy of the public.”

Villar’s high poll rating

Some may question the legitimacy of Villar’s high rating but I say we in media have no right to do the questioning, not while The Star and Inquirer are both claiming to be the Number One newspaper; not while GMA 7 and ABS-CBN are both claiming to be the top television station.

Villar gave an inkling at the roundtable with The Manila Times that he would not back off from a bare-knuckled fight with rivals other than Noli. To be fair, he still has actually to name names in hitting at his potential rivals. On second thought, is this being fair? Anyway, readers could immediately identify the one he was referring to when he said: “Anybody can say ‘I will radically change society.’ But the question is, has he done anything radical? He has been living with his mother for a long time, and he will be getting married only at age 50.” Ouch! Boy Padyak, a.k.a Boy Bawang, would not like that.

I completely agree with him when he said the electorate should get out of their personality orientation and consider managerial ability, leadership and ability to implement plans as main consideration in voting for a presidential candidate. A change in orientation needs some doing, however.

At the roundtable, he also confessed that he was getting confused by all the rumors circulating around the country—no election, failure of election, declaration of martial law. But there is one thing that this confusion would not prevent him from doing—campaign. He has been going all over the country while saturating the air lanes with his ads. This early, he has already secured the pledges of several followers of President Arroyo. Will these pledges hold until May 2010? Abangan!

Biggest coverage of Philippine 2010 polls set

PDI joins ‘biggest coverage’ of 2010 polls
By Cathy C. Yamsuan
Philippine Daily Inquirer

MANILA, Philippines — Top Philippine companies, media entities, civic groups and academic institutions Friday banded themselves into a powerhouse pledging to provide the “biggest and most comprehensive” coverage of the 2010 elections, while helping protect the polls against fraud and ensure the results are delivered fast.

Leaders of the project said the group will field experienced journalists and use state-of-the-art technology as part of a nationwide effort to also urge Filipinos, including the young, to vote wisely.

The group is led by the Philippine Daily Inquirer (PDI), GMA News, Philippine Long Distance Telephone Co. (PLDT) and Smart Communications Inc.

The other partners include, Philippine Center for Investigative Journalism (PCIJ), Catholic Media Network (CMN), AMA Education System, Ateneo School of Government, De La Salle University, San Beda College, University of Santo Tomas, University of the Philippines School of Economics, Youth Vote Philippines, RockEd Philippines, Institute for Public and Electoral Reforms, Solar Entertainment Corp., Philippine Bar Association, National Citizens’ Movement for Free Elections and the Parish Pastoral Council for Responsible Voting.

Resources of 20 entities

The newly minted partnership signed a historic agreement that would combine the resources of 20 entities to deliver election results in the quickest possible time.

Election Commissioner Rene Sarmiento called the partnership “an impressive assembly of companies and institutions.” He hoped its efforts would prove to be “a providential collaboration that very good things will happen to our country.”

Optimism pervaded the signing of the agreement at the cavernous Studio 6 of the newly constructed GMA Network Studios in Quezon City.

Representatives of all the partners agreed that aside from quick transmission of results, voter education and a more comprehensive understanding of issues would be crucial.

Rooting for best

“I hope that this time, we will not just be rooting for the least of all evils but for the best for the country,” Marixi Prieto, chair of the PDI board of directors, said.

To do this, lawyer Felipe Gozon, president and chief executive officer of GMA, said the group planned “to educate, inform and empower voters to vote, and to vote wisely.”

“We are fortunate that the best of the best will be partners with us as coworkers in the biggest, widest and most comprehensive coverage of the 2010 elections,” Gozon added.

Manuel V. Pangilinan, chair of PLDT/Smart, said “devices have well advanced through the years and we are going to make them available” in the coverage of next year’s elections.

“We have to undertake a focused coverage especially because fears have been expressed that some people might resort to cheating to make their candidates win and thus extend their hold on power,” PDI publisher Isagani Yambot said in a statement.

Yambot added: “We in the media have to take the lead in exercising vigilance every step of the way—from the registration of voters, to the casting of ballots, to the canvassing and the reporting of the results.”

10,000 volunteers

Ambassador Amable Aguiluz V, chair of AMA Education System, announced he was committing “the entire resources of AMA” which would include “more than 10,000 dedicated and IT-competent student volunteers in major precincts and capitals” around the country.

More than 200 AMA campuses and over 10,000 computers and software will “act as hubs in transmitting critical data all over to the GMA operations center,” Aguiluz said.

“We will relay in real time the unofficial and partial tally as it is counted (in precincts) … We will give the correct tally, unofficial and partial, faster than you can say Kapuso,” he vowed.

54 broadcast stations

CMN’s Fr. Francis Lucas said his group was offering its 54 broadcast stations all over the country to help in the coverage.

Inquirer Interactive Inc. president Paolo Prieto said online news service would play a significant role especially since a huge percentage of overseas Filipino workers would rely on it for information on election issues and candidates.

“One objective is to get overseas Filipinos to exercise their right to vote. We want to get voters to feel they can make a difference,” Prieto said.

Bitter lessons

Representatives of academic partners stressed the need for an issue-based information program targeting voters.

“Transforming the politics of the country is a priority … We have to make the knowledge of issues available to a wider public,” said Dean Antonio GM La Vina, JSD, of the Ateneo School of Government.

DLSU’s Br. Armin Luistro said the project would help prevent “wholesale fraud,” adding that pubic awareness also meant the people “will avoid a repeat of the bitter lessons in the past.”

PCIJ executive director Malou Mangahas said the media were a crucial element in the elections because majority of the the voters were exposed to them.

Young voters

“It would be from what good or bad information media will dish out that our mostly young and mostly poor voters will build their impressions, biases, choices,” Mangahas said.

She said there would be 45 million voters next year.

“The total number of polling stations will be 82,000 precinct clusters, if we could conduct automated elections, or up to 220,000 precincts if we must return to manual elections,” she said.

Christine Jane Jorge, lead convenor of Youth Vote Philippines, said the majority of the young voters in the 2007 election failed to exercise their right of suffrage because they did not know they had to register before voting.

She pointed out that 54 percent of the voters at present are between 15 and 34 years old.

Philippines optimistic, positions for economic rebound

Tacloban City (PIA) -- The Philippine economy is on the rebound and is seen to be "moving upwards" towards the end of the year based on the conservative gross domestic product (GDP) growth forecast of 0.8 to 1.8 percent.

This report was first heard at the end of April during the media briefing conducted in Tacloban after the Cabinet Meeting presided by President Arroyo at the Tacloban City Airport's VIP Lounge on April 28.

This good news was presented by Deputy Director Rolando Tungpalan of NEDA who was assisted by Director Dennis Arroyo, also of NEDA, who reported the results of the Global Recession Impact Monitor (GRIM), a monitoring system set up on the instructions of the President to ensure that the global recession would not become a Philippine recession.

The formation of the Global Recession Impact Monitor (GRIM) is in line with the government's efforts to make sure that the Philippines would not slip into recession like two-thirds of the world.

In a joint press briefing on June 26 with Cabinet Secretary Bello, Deputy Director General Rolando Tungpalan said that in the first quarter, "we already saw a growth of positive 0.4 percent, which is expected to rise further until the end of the year".

Talking about the first quarter performance which some quarters claimed there would be declining overseas remittances, official statistics do not confirm what these projections are saying. Nevertheless, the government will not be complacent and will continue with its infrastructure investments, Deputy Director General Tungpalan said.

Business and consumer surveys indicate a growing upbeat sentiment. The precautionary savings that was felt in the first quarter was a very natural reaction of households because during uncertain times you don't know to what extent people take those precautionary measures, the Deputy Director General added.

The warning made by former Budget Secretary Benjamin Diokno of a 30 percent contraction in exports, is higher than the assumptions made by the International Monetary Fund in predicting the recession for the Philippines, the NEDA Official said.

"Based on the report of the exporters and the export captains, we are seeing a decline lower than what we expected. The numbers we are reading are about 13 and 15 percent, rather than the 18 percent (we projected) on the high side."

"The import figure of April increased, the contraction was greater than the previous month of 37 percent versus 36 percent. Again, the export sector was surprised why the numbers were lower. The imports contracted whereas they were expecting it to grow over the exports. Orders have been made in April and May," he said.

On credit rating agency, Moody's rethinking its credit rating for the Philippines in view of the decline in GDP rates, Tungpalan said, that "most of these assessments are based on the first quarter modest growth and we keep stressing the fact that the first quarter does not reflect the rest of the year's performance."

"We expect the economy to move upward. Even China has a very impressive first quarter growth at 6.1 GDP. In fact, Asia itself is now a very strong market for the Philippines. President Gloria Macapagal Arroyo has been instructing the economic managers to look at the opportunity of relating more with China than with our usual dependence with the North," he said.

Asia, widely considered as a very rich area, has prospects of expanding its economy. With a strong domestic economy, a strong export market, this means well for our sustainable growth, Deputy DG Tungpalan added.

With the measures the government has meticulously put in place, the Philippines is optimistic that the economy will continue to grow.

Franchising in the Philippines: Progress and Prospects

IDEA Corkboard

FRANCHISING has become an easy and convenient way to deliver goods and services to consumers. Aside from usual food and beverage establishments, other services such as salons, hotels, and many others are now also open for franchising.

Clearly, consumers are not the only ones benefiting from the welcome convenience offered by quick services or from the wider range of products and services made available to them.

Franchisers, in turn, also reap the benefits through profit.

It would be interesting to know what is behind franchising and how it exploded in the market.


Franchising has had a long history, but the concept is widely believed to have started from sewing manufacturer, Albert Singer.

The idea came about to address one common problem in business: funding.

In the 1850s, the Singer Company produced sewing machines, but could not pay its salesmen their salaries. As an alternative, the company created a network of dealers who paid Singer a fee to sell the machines. These first franchise owners made money for each sewing machine they bought from Singer and eventually resold within their particular territories.

Other prominent examples abound in history. Coca-Cola, for example, was originally created as a fountain drink until Benjamin Thomas and Joseph Whitehead obtained permission in 1899 to bottle the soda. Upon realizing that they alone could not afford to create a bottling company, the two created a franchise company that sold the right to bottle the cola to individual plants.

In the Philippines, franchising also traces its roots to the Singer Sewing Machine. In that period franchising was limited only to foreign businesses and public utilities services until the Philippine Franchising Association was created in 1995. During that time, there were only 111 franchise concepts which eventually grew to 967 concepts in 2007.

Lucrative business

Over the years, franchising has become a lucrative enterprise.

In the Philippines, the number of franchise concepts has grown by 19.8% in a span of 12 years to 2007.

In the same year, of the total number of franchise concepts, 43% are in the food sector, 28% and 21% involve retail and services, respectively, and 3% are engaged in specialized services such as hotel services and memorial services.

According to Philippine Chamber of Commerce and Industry President Samie Lim, franchising is a promising venture given the country’s growing consumer market and rising per capita incomes and rate of urbanization.

The emergence of the business-process outsourcing industry also gives opportunities for establishments to extend their operating hours to cater to different workers throughout the day, especially to those working in graveyard shifts.

According to Philippine Franchise Association (PFA) President Robert F. Trota, franchising remains a good business option amid the economic slowdown.

The continued inflow of OFW remittances also provides adequate support from both the supply and demand side. Remittances enable some households or persons to venture into franchising; at the same time, remittances also boost the consumption of goods and the patronage of various services that franchised establishments offer.

The overall effects on the economy have been substantial. In the latest PFA study presented by the chairman emeritus Samie Lim, income from franchising represents some five percent of the country’s gross domestic product from 2005 to 2007, which translates to approximately P106.75 billion for the economy. It is also an important means to create enterprise and generate employment, creating an estimated 200,000 franchise outlets and employing almost a million of Filipinos nationwide.

Department of Trade and Industry Undersecretary Zenaida Maglaya has noted that franchising is a sure and secure way to a successful business due to the availability of technology, formula, and the process, giving the entrepreneur an advantage since he or she will not necessarily start from scratch.


In addition to the emergence of the business process outsourcing units, the franchising industry also sees tourism as a road to market expansion for local businesses.

According to Franchising in the Philippines in 2008: Country Report, tourist inflows afford franchisers an opportunity to acquire concepts from the country where these foreigners come from to cater their needs and preferences.

In addition, the franchising industry can capture more investment in the forward and backward linkages in the tourism industry; in this case, they can venture into travel and transport services, hotel and other accommodation services, food and beverage, and others.

The franchising industry also boasts a competitive stance in franchising operations abroad. In fact, the Philippines ranked 4th in the world when it comes to franchising concepts (and 1st among ASEAN nations). With its success in the local market, some brands such as Jolibee, Bench, Max’s Restaurant, etc. have penetrated and established their grounds in the foreign market.

Indeed, the franchising industry has proven to be a successful business in the country, surviving even in tough economic times. Further, this business has indeed provided starting entrepreneurs a good head start in the world of business, given the readily available technology and process of running the franchise. With its growth in the local market and penetration in the international market, this venture is indeed a good business prospect.


* Rubio, Ruby Anne. RP leads ASEAN in franchising. BusinessWorld, 05 Jul 2007. Retrieved August
* “Franchising seen weathering down.” BusinessWorld. Volume XXI, issue 242. S1/1 “Franchising in the Philippines in 2008: Country Report”
* Seid, Michael H. History of Franchising: Where it all began…The evolution of franchising. Retrieved June 23, 2009
* Younger, Bill. The History of Franchising � The Creation of the Franchise Business. Retrieved August 28, 2008—-The-Creation-of-the-Franchise- Business&id=113608

For inquiries on IDEA, please contact Eduard Robleza at

Philippine bank lending and domestic liquidity up in May

Bangko Sentral
Media Releases
Bank Lending Continues to Grow in May

Outstanding loans of commercial banks including reverse repurchase agreements (RRPs) reached P2.1 trillion as it grew by 10.2 percent year-on-year in May, lower than the 13.4 percent increase registered in April. Net of RRP placements with the BSP, bank lending at P2.0 trillion also grew at a slower pace of 17.3 percent in May from 19.0 percent in the previous month. On a month-on-month basis, seasonally-adjusted data on commercial banks’ lending grew by 0.6 percent (for loans inclusive of RRP) and 0.4 percent (net of RRP) in May.

Preliminary data indicated that loans for production activities expanded year-on-year by 17.1 percent in May, slightly lower than the 18.1 percent growth reported in the previous month. Loans extended to the following productive sectors, which comprised nearly half of total loans, were major contributors to lending growth: agriculture, hunting, and forestry (which grew by 42.0 percent); real estate, renting and business services (26.5 percent); financial intermediation (32.4 percent); transportation, storage & communication (45.9 percent); and electricity, gas and water (35.5 percent). Loans to the following sectors likewise expanded, albeit marginally: other community, social and personal services; public administration and defense; health and social work; wholesale and retail trade; fishing; and mining and quarrying. Meanwhile, bank lending to manufacturing, construction, and education registered contractions during the month. In particular, manufacturing loans—which account for 16.3 percent of total loans—contracted by 32.8 percent.

Growth in consumption loans also moderated to 9.6 percent this month from 13.5 percent in the previous month, following the slower growth in auto loans and credit card lending, and the contraction in other types of loans.

BSP Governor Amando M. Tetangco, Jr. noted that bank lending growth has remained healthy despite indications that banks have tightened their credit standards and that more firms may have turned to the bond market for funding. The Governor affirmed the BSP’s commitment to ensure that liquidity conditions are supportive of the spending and investment needs of firms and households, while keeping a watchful eye on price stability.


Domestic Liquidity Continues to Expand in May

Domestic liquidity or M3 continued to post double-digit growth in May 2009 as it rose by 15.0 percent year-on-year, higher than the 13.7 percent recorded in the previous month. On a monthly basis, seasonally-adjusted M3 rose by 1.0 percent in May, a reversal of the 0.4 percent (revised) contraction in April.

The robust expansion in net foreign assets (NFA) at 19.8 percent in May continued to drive liquidity growth. This can be attributed primarily to the sustained growth in the NFA position of the BSP as well as of banks at 15.7 percent and 42.5 percent, respectively. Net foreign assets rose as the BSP continued to build up its international reserves, while banks reduced their foreign liabilities possibly as they paid off maturing obligations.

The growth in net domestic assets (NDA) also contributed to the expansion in domestic liquidity. NDA growth year-on-year accelerated to 8.4 percent in May from 4.2 percent in April as net domestic credits expanded by 18.3 percent. Growth in credits extended to the private sector remained strong at 18.2 percent, broadly similar to the 19.0 percent expansion posted in the preceding month. Meanwhile, growth in credits extended to the public sector accelerated to 18.7 percent from 11.3 percent, reflecting the double-digit growth in both lending to the National Government (18.7 percent) and to local government units and other public entities (18.5 percent).

BSP Governor Amando M. Tetangco, Jr. assured that the BSP remains committed to maintaining an appropriate level of liquidity to ensure the orderly functioning of the financial system and support the economy’s growth requirements, while guarding against any build-up in price pressures.

Philippine election automation a go

Emilia Narni J. David with Bernardette S. Sto. Domingo

After a week of suspense, the automation of the 2010 national elections is going to push through as the joint venture of Total Information Management (TIM) and Smartmatic Corp. has been rebuilt.

In a press briefing after a meeting with the two companies, Commission on Elections (Comelec) chairman Jose A.R. Melo said that TIM and Smartmatic have ironed out their issues and would be continuing their partnership.

"They threshed out everything. TIM and Smartmatic have signed the joint venture incorporation papers and the Comelec will be having a contract with the joint venture of both companies," said Mr. Melo.

Earlier yesterday, Press Secretary Cerge M. Remonde hinted at possibly shifting back to a manual process just to ensure the polls happen next year.

"The President has committed herself to full poll automation. But the Palace will continue to support Comelec. With or without automation, elections must push through," he said, citing President Gloria Macapagal-Arroyo’s speech during the celebration of Filipino-American Friendship Day.

Contract negotiations between the Comelec and the two companies were halted when both companies were unable to provide a certificate for incorporation of the joint venture. Later that same day, TIM announced that it is pulling out of its joint venture with Smartmatic on Monday citing disagreements on the control of disbursements.

On Tuesday, the Comelec brokered a meeting between both companies and gave a Friday deadline for a resolution.

Mr. Melo said that contract negotiations will continue but that "there are only one or two issues that are being threshed out so it is basically okay."

Both companies would be filing their papers for incorporation at the Securities and Exchange Commission on Monday.

"They will file [the incorporation] by Monday so maybe by Wednesday the joint venture will be incorporated already. By Friday we can sign the contract," said Mr. Melo.

He added that the Comelec is confident that both companies would any more misunderstandings because they would have signed a contract and would be criminally liable.

In a statement, TIM/Smartmatic said that it is committed to continue with the automation project.

"Smartmatic and TIM would like to manifest our assurance that the automation of the 2010 elections will push through, and that we stand behind the Comelec," the statement read.

Several options were laid before the Comelec if the contract with TIM/Smartmatic did not push through, including serious consideration to go back to manual elections.

Ramon C. Casiple, executive director of the Institute for Political and Electoral Reforms, told BusinessWorld that while the resolution is welcome there should be close watch in the interactions of both companies.

"All’s well that ends well but until next time. I am not optimistic that there will be no opposition and blockades anymore but it may be through other means," said Mr. Casiple in a telephone interview.

"We hope that all parties take [what happened] as a lesson and be very alert against [any] means of sabotage," he added.

Philippine overseas workers up 15% in 2008

Michael Paolo T. Jamias

The number of overseas Filipino workers (OFWs) who worked abroad rose 14.6% to 2.002 million last year from 1.747 million in 2007, data released on Friday by the National Statistics Office (NSO) shows.

Total remittance sent by these workers rose nearly a third (29%) to P141.904 billion from P109.806 billion.

Overseas contract workers (OCWs), or those with existing work contracts abroad, comprised 94% at 1.9 million of total OFWs, up 16.6% from the 1.6 million OCWs recorded in 2007.

A little more than a third (32.4%) of the OFWs were laborers and unskilled workers, which include domestic helpers, cleaners and manufacturing laborers. Those who worked in trade and related fields comprised 15.7%; service workers and shop and market sales workers, 14.3%; and plant and machine operators and assemblers, 13.0%.

Professionals accounted for 9.6%; technicians, 6.2%; as well as government officials, corporate executives, managers and supervisors, 2.7%.

OFWs from the Cavite-Laguna-Batangas-Rizal-Quezon, or Calabarzon, region accounted for 18.4%, Central Luzon, 14.5%; and the National Capital Region 14.0% — meaning that Metro Manila and surrounding regions made up almost half of the total number of OFWs.

On the other hand, Caraga reported the smallest share of OFWs at 1.2%, while the Autonomous Region in Muslim Mindanao, one of the country’s poorest, accounted for just 3.3%.

An NSO statement accompanying the data said that one out of five (20.4%) OFWs worked in Saudi Arabia, while one in every seven worked in the United Arab Emirates. Singapore, Hong Kong, Japan, Qatar and Taiwan were also popular destinations of OFWs. OFWs who worked in Europe comprised 9.4%, while those who worked in North and South America accounted for 8.4%.

Of the total cash remittances sent, 76.1% were coursed through banks and 11.8% through door-to-door services.

OFWs working in Asia, comprising 78.2% of all OFWs, sent the biggest cash remittance of P69.9 billion.

Among occupation groups, OFWs working as laborers or unskilled workers posted the highest cash remittance of P19.5 billion.

Philippine Overseas Employment Administration chief Jennifer J. Manalili said in a phone interview on Friday that her agency is "closely monitoring the situation [since] many countries are experiencing varying degrees of financial crisis" that has led their governments to "limit the number of foreign workers admitted to their territories."

University of Asia and the Pacific economist Victor A. Abola said OFW deployment should continue to grow despite the global economic slowdown. "I think, in absolute numbers, there will still be an increase," he said in a phone interview on Friday.

But Mr. Abola expects OFW remittances to be flat this year as well as next year, though "it could go down slightly by no more than 2%-3% [in 2010]."

He explained there is usually a "one-year lag" before remittances reflect the slowdown in the global market, which is expected to be hit hard this year.

Friday, 3 July 2009

Update on Philippine SONA projects (1st of 5)

Manila (PNA) -– President Gloria Macapagal-Arroyo's flagship projects designed to "close the loop" between the Philippines' Super Regions are nearing completion, while her other State-of-the-Nation Address (SONA) commitment programs such as economic reforms and poverty alleviation are gaining significant headway.

To start off, the "closing the loop" program under President Arroyo's Super Regions strategy is more than 80 percent complete. These are the priority infrastructure projects in the North Luzon Agribusiness Quadrangle (NLAQ), Luzon Urban Beltway (LUB), Central Philippines, and Mindanao Super Regions.

One such priority project is located within the Luzon Urban Beltway, wherein the North Luzon Expressway (NLEX) and Subic-Clark-Tarlac Expressway (SCTEX) has been interconnected.

"President Arroyo ordered the front-loading of infrastructure development projects with a specific directive that all infrastructure programs must be bid out during the first semester of the current year," says Deputy Presidential Spokesperson Lorelei Fajardo and Presidential Assistant for Region 3, in an interview with the Philippines News Agency (PNA).

Fajardo said that once the interconnection of SCTEX, NLEX and South Luzon Expressway (SLEX) is realized, the travel time between Subic in Zambales and Metro Manila will only take one hour and a half. "It used to be three hours, but now, it's a shorter time," she added.

"Travel time between Clark in Angeles City, Pampanga and Subic Naval Base in Olongapo City, Zambales will take 30 minutes, thanks to the North Luzon Beltway Hub of the Philippines," Fajardo said.

"Central Luzon is situated in the heart of Asia and it has so much potential," she said, adding this is the reason President Arroyo is hastening the completion of infrastructure projects such as the road networks.

The Malacañang official also said that SCTEX would eventually connect La Union province from Poro Point in San Fernando City to Baguio City in Benguet province, and also Quezon and Batangas provinces in the Southern Tagalog region through the NLE-SLEX linkage.

'Closing the loop'

"It's what you call 'closing the loop'. It's also known as Luzon Urban Beltway (LUB)," Fajardo said.

The priority infrastructure projects which "close the loop" are classified under the North Luzon Agribusiness Agricultural Quadrangle (NLAQ), the LUB's Transport and Logistics Infrastructure, Central Philippines Super Region Enhanced Central Philippines' Competitive Advantage in Tourism, and Mindanao Super Region Enhanced Agribusiness Development in Mindanao.

The NLAQ, according to Fajardo, involves the Dingalan Port Project in Aurora province and the La Trinidad Fruit and Vegetable Minimal Processing Plant in Benguet.

The LUB Transport and Logistics Infrastructure consists of Subic Bay Port Development Project, Batangas Port Development Project, Lucena Port, and Cawit Port in Boac, Marinduque.

Found in the Central Philippines Super Region Enhanced Central Philippines' Competitive Advantage in Tourism are access roads to the Bacolod-Silay Airport and Bohol Circumferential Road; Pantao Port in Albay, Jagna Port in Jagna, Bohol; Ubay Port in Ubay, Bohol; Siquijor Port in Siquijor; Maasin Port in Southern Leyte; Limasawa Port in Southern Leyte; New Iloilo Airport in Iloilo, and New Bacolod-Silay Airport in Negros Occidental.

Mindanao Super Region Enhanced Agribusiness Development in Mindanao covers the Diosdado Macapagal Bridge in Butuan City, 210-megawatt Clean Coal-Fired Power Plant in Misamis Oriental and Solar Power Plant in Cagayan de Oro City.

SLEX-STAR linkages

At present, the SLEX project is 76.87 percent accomplished. The Alabang viaduct in Muntinlupa City was opened to the public late last year, while Toll Roads 2 and 3 are scheduled to be completed in June and December 2009, respectively.

The SLEX project, costing P8.5 billion, involves the rehabilitation and upgrading of the existing 28.54-kilometer length of the expressway starting from the Alabang viaduct up to Calamba City in Laguna, and an additional 7.6-kilometer highway to be constructed from Calamba to Sto. Tomas in Batangas that will connect to the Southern Tagalog Arterial Road (STAR) 2.

Once completed, the SLEX-STAR linkage will provide access to the Port of Batangas and offer a seamless nautical and land highway that will save both time and transport cost for both passengers and freight.

It will relieve traffic on the old highway and significantly reduce travel from 46 minutes to 26 minutes when traveling from Sto. Tomas, Batangas to Alabang, according to a statement from the Presidential Management Staff (PMS).

"The extension of the SLEX is a major infrastructure project. It will not only ease and speed up travel to and from Batangas and Laguna but also connect the CALABARZON (Cavite-Laguna-Batangas-Rizal-Quezon) to the Luzon Urban Beltway and NLAQ through other priority infrastructure projects such as the C5-NLEX-SLEX Link, Subic-Clark-Tarlac Expressway (SCTEX) project and Tarlac-Pangasinan-La Union Expressway (TPLEX) project," the PMS reported.

"With this project, new centers of business and commerce in the South are expected to open, which would help decongest Metro Manila," PMS Secretary Hermogenes Esperon Jr. said in a report, adding "this would provide our exporters faster and safer access to the Free Port Zone in Subic and the airport in Clark and the Ninoy Aquino International Airport (NAIA)."

To make sure that the project is completed on time, Esperon said "the Pro-Performance Team is pressing the adoption of a 24-hour work shift and constant monitoring of the rate of accomplishment of the remaining sections of SLEX."

C5-NLEX-SLEX interconnection

Fajardo said the Department of Public Works and Highways (DPWH) recently kicked off the construction of the P520-million Tandang Sora-Luzon Avenue flyover crossing Commonwealth Avenue in Old Balara, Quezon City that will interconnect the North Luzon Expressway (NLEX) and the South Luzon Expressway (SLEX).

The infrastructure is one of the vital links in the 41-kilometer NLEX-SLEX project of President Arroyo.

"DPWH has started the implementation of this project which is in line with the instructions of the President to interconnect the two expressways and eventually to the Manila-Cavite Coastal Road in Las Pinas City via C-5," Fajardo said.

On the other hand, DPWH Undersecretary Romeo Momo, in charge for Luzon operations, explained in a report that the construction involves the completion of a flyover that would directly connect Tandang Sora Avenue (Old Balara side) to Luzon Avenue in Quezon City. It measures more than 500 lineal meters, including approaches with four lanes at two lanes per direction.

He said the structure also has access or service roads on both sides for vehicles coming from and going to Commonwealth Avenue and C-5 and vice versa.

"Once the project is completed, it will be beneficial to all motorists and businessmen in the area," Momo said.

Motorists, especially those coming from Katipunan Avenue would no longer use U-turn slots in Commonwealth Avenue to go to Luzon Avenue as the project directly connects both ways.

The implementation of the project is in coordination with the Quezon City government and the Metropolitan Manila Development Authority (MMDA).

In August 2008, Public Works and Highways Secretary Hermogenes Ebdane Jr. signed an agreement with Quezon City Mayor Feliciano Belmonte, wherein the latter assumed the responsibility of securing road right-of-way and some civil works.

Meanwhile, two multi-billion-peso flood control projects –- the Agno River Flood Control Project Phase II and the CAMANAVA (Caloocan-Malabon-Navotas-Valenzuela) Flood Control Project -- are nearing completion with 90 percent accomplishment. The CAMANAVA project is expected to ease flood problems in Metro Manila.

Two-minute check-in at Manila airport

Vito Barcelo and Roderick T. dela Cruz
Manila Standard

Using bar code technology, checking in at the Ninoy Aquino International Airport can take as little as two minutes, said a port operator official.

General manager Alfonso Cusi, of the Manila International Airport Authority, said starting yesterday, international operations at Terminals 1 and 2 (new wing) have been upgraded from magnetic tape to bar code for both boarding passes and baggage tagging.

Records show that the two terminals on the average have a combined load of 69 outbound flights daily.

“We would like to improve and shorten the business process at the airport by replacing the outdated technology with a more modern, efficient system,” he said, noting that the neighboring airports in Singapore, Hong Kong, Macau and Guam have already installed their own versions.

Arinc Inc. was awarded a three-year contract to supply, install, operate and provide maintenance support of the new common use check-in at the two terminals for departing flights and passengers.

Arinc managing director Randy Pizzi said MIAA would have enough flexibility to further improve services particularly in cutting queuing time.

MIAA assistant general manager Tirson Serrano said the system would handle almost four million outbound passengers at the Naia 1 and 1.6 million passengers at Naia 2, using the 85 check-in counters and 15 boarding gates at Terminal 1 along with 40 check-in counters and 16 boarding gates at Terminal 2.

Philippine unofficial reserves increased sharply to $4.17b in May

Eileen A. Mencias
Manila Standard

THE Bangko Sentral’s unofficial reserves nearly doubled to $4.172 billion at the end of May from $2.366 billion reported at the end of April, according to data released by the central bank.

The central bank’s unofficial reserves refer to dollars and other foreign currencies that the central bank earned in foreign exchange swaps. They are not counted as part of the gross international reserves.

The central bank started the foreign exchange swaps in 2007, when huge foreign exchange inflows boosted the value of the peso. The swaps prevented the release of too much liquidity in the system.

Steady remittances, an inflow of $497.58 in stock market investments and the proceeds from official development assistance loans were not enough to offset the $1.248 billion the country had to pay for maturing foreign loans in May, causing the $55-million shortfall in the balance of payments.

Despite the month-on-month deficit, however, the balance of payments still yielded a surplus of $2.143 billion in the first five months of the year, just slightly lower than the $2.182-billion surplus reported for the same period last year.

A surplus in the BoP helps support the local currency because it means the economy generated more foreign exchange than it had to pay. A deficit in the BoP means the economy did not generate enough from exports, investments and remittances or loans to pay its imports and foreign loans.

The central bank had forecast a $700-million surplus in the BoP this year, suggesting that there will be significant outflows by the end of the year.

The national government, however, is reviewing its borrowing strategy for the year after it increased its budget deficit target. An increase in foreign borrowings will significantly shore up the BoP.

The central bank expects remittances to amount to some $16.4 billion this year, the same as last year’s, but some sectors have warned of a contraction.

Cebu Pacific now mounts more flights than Philippine Airlines

Roderick T. dela Cruz
Manila Standard

CEBU Pacific yesterday claimed that it has overtaken Philippine Airlines as the largest airline in the country in the number of weekly flights, citing data from Official Airline Guide, a global flight information and data solutions company.

The Gokongwei-owned budget carrier said it now ranked 65th among the world’s airlines in having the most weekly flights based on the June 2009 Official Airline Guide data.

“This new leadership milestone was a result of the airline’s sustained focus on offering the newest planes and the lowest possible fares to its passengers,” said Candice Iyog, Cebu Pacific vice president for marketing and distribution.

Cebu Pacific had 1,665 weekly flights compared to PAL’s 1,566. PAL was ranked 72nd in the list of 100 largest airlines.

Delta Airlines topped the list with 26,898 weekly flights, followed by American Airlines with 24,893 and United Airlines with 23,996.

Among Asian airlines, China Southern Airlines had the highest ranking at 11th place with 9,440 weekly flights.

Cebu Pacific said it was now Asia’s third largest low-cost carrier as it served 32 domestic destinations and 14 cities in Asia.

Iyog said the airline was poised to further expand its reach as it took delivery of more new aircraft. It had ordered 15 new Airbus A320s for delivery from 2010 until 2013 and was considering to buy five more.

By 2013, Cebu Pacific should have 27 Airbus aircraft and 10 turbo-prop ATRs, the youngest aircraft fleet in the Philippines, she said.

“We are about 40 percent cheaper on average than the other airlines,” Iyog said.

“So with low fares, new planes, and the convenience we offer by flying from four hubs—which allowed direct flights within regions and did away with flying via Manila—we in effect are offering what the people want and need.”

Cebu Pacific uses its four hubs in Manila, Cebu, Davao and Clark to fly 1,401-times weekly within the Philippines and 264 times weekly in Asia.

“We will continue to seek ways to expand and make more people fly,” Iyog said.

“We have a great business model that has shown domestic growth despite the present global downturn. We are confident that our march to further growth will continue.”

Cebu Pacific carried 6.7-million passengers in 2008, and it expects to carry close to nine million this year.

Philippine External Debt Drops by US$1.4 Billion in First Quarter of 2009

Bangko Sentral
Media Releases

As of end-March 2009, outstanding Philippine external debt declined by US$1.4 billion to US$52.5 billion, from the US$53.9 billion recorded in December 2008. On a year on year basis, the debt stock dropped by nearly 4 percent to US$2.1 billion from US$54.6 billion in March 2008.

External debt refers to all types of borrowings by Philippine residents from non-residents that were approved/registered by the Bangko Sentral ng Pilipinas (BSP).

Major External Debt Ratios

BSP Governor Amando M. Tetangco, Jr. observed that: “Major external debt indicators remained at prudent levels in the first quarter of the year.” Gross international reserves (GIR) stood at US$39.0 billion at the close of the quarter bringing the ratio of reserves to short-term external debt to 6.0 based on original maturity, from 5.4 in December last year, and maintaining a comfortable level of 3.4 based on remaining maturity. Short-term accounts under the second concept pertain to obligations with original maturities of one year or less, plus amortizations on medium and long-term accounts falling due within the next 12 months, i.e., from April 2009 to March 2010.

The Governor also cited the continuing improvement in the country’s external debt ratios which relate total outstanding debt to Gross National Product (GNP ). During the first quarter, a moderate improvement was noted from 29.0 percent to 28.8 percent. The present ratio is also much lower than the 32.6 percent recorded a year ago. Using Gross Domestic Product (GDP1 ), the ratio remained stable at 32.3 percent since end-2008. As an indicator of solvency, the ratios have been observed to be generally declining since 2002, and are currently at their lowest levels since their peak in 1986 when they reached 99.8 percent for debt to GNP and 97.7 percent for debt to GDP.

The external debt service ratio (DSR), on the other hand, was estimated at 10.3 percent 2 during the first quarter, slightly higher than the 9.6 percent recorded in December 2008 and 9.8 percent in March 2008. The ratio, which relates total principal and interest payments to exports of goods and receipts from services and income (which include remittances by overseas Filipino workers), is a measure of liquidity, or the adequacy of the country’s foreign exchange earnings to meet maturing principal and interest payments. It has consistently remained below the 20 to 25 percent international benchmark.

Please refer to the attached table for the time series data from 2000.

Changes in External Debt Stock

The US$1.4 billion contraction in debt stock during the first quarter resulted from the US$1.3 billion negative foreign exchange revaluation adjustment largely on account of the weakening of the Japanese yen against the U.S. dollar. The currency of reporting for Philippine external debt statistics is the U.S. dollar and the debt stock is revalued using exchange rates as of end of the report quarter.

Residents’ investments in Philippine debt papers issued abroad increased by about US$540 million during the quarter, correspondingly reducing the external debt stock. This was, however, partially negated by net availments of foreign borrowings of less than US$270 million, and upward audit adjustments of more than US$200 million.

Debt Profile

The external debt portfolio remained predominantly medium to long term (MLT) in nature at the close of the first quarter, with MLT accounts representing 88 percent of total. The weighted average maturity for all MLT accounts (those with maturities longer than one year) was estimated at 20 years; public sector borrowings had longer average tenors of nearly 22 years, compared to 11 years for the private sector. Short term external debt, which accounted for 12 percent of debt stock, consisted largely of inter-bank borrowings and trade-related obligations.

Total public sector external debt dropped to US$39.3 billion, or by US$1.0 billion from US$40.3 billion in December 2008, mainly as a result of negative foreign exchange revaluation adjustments (US$1.2 billion), with yen-denominated debts accounting for the bulk (US$960 million).

Private sector external debt similarly declined to US$13.2 billion by the first quarter of the year from US$13.5 billion in December 2008. With the decline in both public and private sector borrowings, their share to total remained at the end-2008 levels of 75 percent and 25 percent, respectively.

The creditor profile also remained unchanged: official creditors (consisting of multilateral institutions and bilateral creditors) continued to have the largest exposures at 45 percent of total, followed by foreign holders of bonds and notes with 33 percent, and foreign banks and other financial institutions, 16 percent. The rest of the creditors were mostly foreign suppliers and buyers.

The currency composition of external debt was likewise the same as of end-2008: U.S. dollar-denominated accounts represented 51 percent of total; Japanese yen-denominated accounts, 29 percent; multi-currency loans from the Asian Development Bank and the World Bank, 10 percent; and the rest of the accounts comprising the 10 percent balance were denominated in 16 other currencies.


1 Based on annual GNP/GDP (annualized for March 2008 and March 2009)
2 Based on annual Debt Service Burden and Exports of Goods and Receipts from Services and Income (annualized for March 2008 and March 2009)

Thursday, 2 July 2009

Thomson Reuters opens call center in the Philippines, vows to be a ‘long-term’ investor

Jeremiah F. de Guzman

DATA PROVIDER Thomson Reuters Corp. yesterday opened a customer service facility in Taguig that will serve as the company’s primary English-language support center for clients all over the world.

The new 500-seat customer support center at Megaworld Corp.’s McKinley Hill will provide 24-hour global support and serve as a "single point of contact to pre- and post-sales support."

"This will complement our non-English support centers in Geneva and Sydney. Also, our global head directing our technical support teams nationwide will [be based] here in Manila," Thomas Frossel, Thomson Reuters global head of customer service, told reporters.

More than 80 professionals have already been trained to man the call center.

"Having a background in finance and other business matters is an advantage but we also provide extensive training so that the quality of service is ensured," Mr. Frossel said.

The site started operations on May 25 with agents taking calls from businessmen, investors, and traders all over the world.

Thomson Reuters’ Philippine site operations manager Raoul Teh said the site is expected to be "fully maximized" in two years.

"We are currently coordinating with local universities such as the University of the Philippines, De La Salle University, Ateneo de Manila University, and University of Santo Tomas for recruitment," Mr. Teh said.

"[Aside from this site] there are a lot in the pipeline, but we still cannot disclose details at this point. Manila has been the epicenter of foreign businesses in offshoring their services," Mr. Teh added.

Mr. Teh also said Thomson Reuters’ legal content operation training programs have started.

"There are roughly 50 people being trained for six to eight weeks and the facility for this project is expected to be opened around the third quarter of this year," he stated.

"Thomson Reuters is committed to having a long-term relationship with the Philippines and we will continue to roll out significant investments in terms of facilities, premises and training," Mr. Frossel said.

New York-based Thomson Reuters provides information to decision makers in the financial, legal, tax and accounting, scientific, health care, and media markets. The company employs more than 50,000 employees in 93 countries worldwide.

It has contact centers in Bangalore, Gdynia, Beijing, Geneva and Sydney.

Thomson Reuters reported $3.12 billion in revenues in the first quarter, with $224 million in profits from continuing operations. This was an increase from $1.8 billion and $193 million, respectively, in the same period last year.

The erstwhile Thomson Corp., the family-owned Canadian publisher, bought the British news service Reuters for $17.2 billion in 2007.

Philippine central bank says remittance growth possible

P. G. MONTECILLO, Reporter

THE AMOUNT of money sent home by Filipinos working abroad could rise this year, bucking observers’ expectations of a contraction and official forecasts of zero growth.

Continued demand for overseas Filipino workers (OFW) in other countries, which is expected to offset a downturn in the United States, could lead to a positive remittance result, the Bangko Sentral ng Pilipinas (BSP) said.

"Remittances for the full year 2009 are expected to exhibit a flat growth even with the mounting concerns about the effects of the recessionary conditions in the global economy," the central bank said in a newsletter released yesterday.

"[But] with the continued growth in remittances for the first four months of 2009, the projected flat growth for the full year 2009 is turning out to be relatively conservative," it read.

"While there are expectations that remittances could contract in 2009, there are favorable developments that provide some reason for optimism."

The BSP cited data from the Philippine Overseas Employment Administration which showed demand for OFWs from countries such as Canada, Bulgaria, Australia, the United Arab Emirates and Qatar.

The BSP also noted a trend of countries shifting to higher-skilled OFWs who receive better pay and conceivably will send more money home.

Latest central bank data showed remittances up by 2.6% to $5.5 billion in the January-to-April period from a year earlier. They reached a record high of $16.4 billion last year, or a 13.7% growth over 2007.

Both the International Monetary Fund and the World Bank expect remittances to the Philippines to decline by 4% this year as the global economic downturn threatens OFW employment.

Philippine franchising industry seen to grow 10% in ’09

Max V. de Leon
Business Mirror

THE Philippine franchising industry is poised to grow by up to 10 percent this year, driven by the rapid expansion of locally bred concepts both here and abroad.

Robert Trota, president of the Philippine Franchise Association (PFA), said even with the crisis, none of the group’s members have indicated that they will be experiencing decline in sales this year.

“No one came and said, ‘We are down this year.’ Some are saying they are up 3 percent at the minimum to as high as double digit,” Trota told reporters.

With this, local brands such as Mang Inasal and Generics Drug Store have set impressive expansion targets of more than doubling their current number of stores.

Some have also set their sights abroad such as Tokyo Tokyo and Potato Corner. Other homegrown concepts such as Max’s Restaurant, Jollibee, Reyes Haircutters and some fashion brands like Bench are also increasing their presence in other countries.

Trota said the industry has lots of reasons to be bullish, especially with more prospective franchisees expected to come in to their fold as a result of the early retirement and retrenchment that was precipitated by the crisis.

Also, Trota said remittances from overseas Filipino workers are still growing.

Aside from this, Trota said the banks in the country are willing to lend to the franchise industry, with the Bank of the Philippine Islands (BPI) promising to give loans to those that will get recommendation from the PFA.

Samie Lim, PFA chairman emeritus, said when the economy is bad, more people are buying franchises, particularly those who were retired or retrenched.

“They have the money, the time, the training as some of them were former managers, and they have the connections. These are the recipes that you need to succeed in franchising,” Lim said.

Trota said the PFA currently has about 240 member-brands. About 65 percent of them are homegrown. In 1995, he said, the industry was 85-percent foreign concepts.

Lim said there are 30 more local brands that are going international.

Cultural differences; biz vs politics

Outside the Box
John Mangun
Business Mirror

Cable Television is great for the person who is obsessed with a particular subject. You can watch 24/7 news, weather, cartoons, fashion, sports, business, science fiction, crime, history, almost anything under the sun. And now coming to the Philippines, although not on cable television, will be 24/7 coverage of politics.

I would be the last one to complain about wall-to-wall coverage of the political scene. The problem I do see is that the average person does not understand how different politics is from the rest of our world.

Last Tuesday, I spoke of the inherent differences between the “business model” and the “political model” of doing things. It is not necessarily a judgment call as such of which thought process and model are best. It is just that we need to understand that although politicians often walk and talk like their business counterparts, they are far removed from what might be best described as the “business culture.”

Although we want to believe that government and politics are not the same animal, in truth, they are because the underlying driving force of all government—from the executive and legislature to the department that processes your driver’s license—is politics. In business, any type of business, the profit motive is the driving force. Even your local charitable “non-profit” organization is driven by a type of profit motive in that they must bring in enough revenue and spend less than that revenue in order to survive and thrive.

I am a student of politics, having obtained a couple of degrees in the subject. In my idealistic youth, I thought that politics was all about the administration of power and the ideology of how to administer that power for the public good. I realized though that politics was not about ideology any more than business is but simply another way to gain and control wealth.

The purpose of a business is also to gain and control wealth, and this is accomplished by providing a product or a service. San Miguel says give us your money, we will give you beer and, according to its core purpose, by doing so, “Making everyday life a celebration.” San Miguel sells the idea that its beer makes life a celebration.

Government attempts to gain and control wealth by selling an ideology. All governments basically say, give us your money and in return, we will give you a better life, because you need government to “Make your life better.”

From many years of study, I concluded that, after a few hundred years of experience, the world’s beer brewers did a better job of living up to their promises than the world’s governments.

You see, most politicians and government people, deep in the hearts, know that “business” is more successful than “government.” How many politicians do we hear telling us that they intend to run government like a business? However, it never happens and governments continue to be unsuccessful. Why is the political model usually unsuccessful? The cultures are inherently and forever different.

Within any business, everyone must work together for that business to be successful. A great business is made up of great team players. But in politics and government, ultimately, there are only winners and losers; there is no such thing as a team. On a team, sometimes a player must make a personal sacrifice so that the team can prosper. That would never happen in government. A team does not exist and every player is looking to be the next superstar, and does everything possible to hold that position.

Even the language is different. Notice that in government, stealing is called corruption. The word corruption means perverted, infected, tainted, almost like having a disease over which the individual has no control. In business, stealing is called stealing; taking something that does not belong to you. Stealing is a conscience act, not like getting the swine flu because you did not wash your hands properly.

In government, the objective is to get a consensus or general agreement of opinion. A business rarely operates by consensus. Usually decisions are ultimately made by one person or, at the most, one small team. But more important, that person or team is held accountable and takes reasonability for the decision. In government and politics, there is little personal responsibility because the decision was reached by a consensus. And the power of decision-making is always divided. The President blames Congress; Congress blames the President.

But you might say, a government has to answer to the electorate in the same way that a company must answer to its shareholders as San Miguel does. A couple of points:

At San Miguel, the shareholders cannot directly fire the president of the company as with the government. Further, shareholders look at the performance of the company, not directly at the performance of its president. A company president might resign, saying that his bad decisions hurt the company. Even in basketball, a player might bench himself because his performance is hurting the team. When was the last time you heard of a nation’s president resigning, saying his bad decision hurt the government? I think the answer is never.

We often say that things could be different if different people were running government. I think not. There are many great people in government, so the problem must not always be the people. Maybe it is the flawed culture of government.

PSE stock-market information and technical analysis tools provided by Inc. E-mail comments to

Wednesday, 1 July 2009

Philippine govt remains upbeat about automated election

Angelo S. Samonte, Llanesca T. Panti And Francis Earl A. Cueto
Manila Times

Malacañang remains optimistic that the automation of the 2010 elections will push through despite the withdrawal of the Filipino partner of Barbados-based Smartmatic International, the winning bidder, from the project.

During a media briefing on Tuesday, Press Secretary Cerge Remonde cited President Gloria Arroyo’s full support for poll automation, which she said would help ensure the conduct of honest, orderly, peaceful and credible elections next year.

Vice President Noli de Castro also on Tuesday said that pushing through with poll automation, whether full or partial, was more acceptable to the people than reverting to the manual election system for 2010.

He warned against going back to manual elections, saying such move will just stir fears of cheating.

“Failure to push through again with poll automation may be perceived by the people as another scheme to perpetuate election fraud,” de Castro said.

“The credibility of the national elections is an absolute necessity to attain political stability that the country and the Filipino people need to achieve progress. Filipinos deserve a meaningful exercise of their right of suffrage,” he added.

Sen. Manuel “Mar” Roxas 2nd said that manual elections would be “disastrous” for the country.

Sen. Francis Escudero said that the Comelec still has time to comply with the law but should the Comelec determine that poll automation is now unfeasible, it should prepare itself for the manual implementation of the 2010 elections.

But Sen. Francis Pangilinan also on Tuesday said that he was dismayed at Comelec’s suggestion to go back to manual voting.

“We urge the Comelec to be creative, think out of the box and salvage the situation. Our country, our children do not deserve the mediocrity, the mess and the inutility being displayed here by government in this botched deal,” he added in a statement.

Faiilure on the part of the poll body, Pangilinan said, “sends the impression that the government is inutile and incapable of providing urgent reforms.”

Philippines an emerging global IT and ITES leader

Cai U. Ordinario
Business Mirror

THE Philippines has joined the ranks of the world’s emerging information-technology (IT) and information technology-enabled services (ITES) players which are slowly catching up with India, the world leader in both industries.

This is the assessment of the World Bank, which, in a report titled “Extending Reach and Increasing Impact” in its publication Information and Communications for Development 2009 listed the Philippines, China and Mexico among the world’s emerging IT and ITES leaders.

IT services include hardware and software maintenance, network administration and system integration, help-desk services, application development and consulting, as well as activities in engineering, such as mechanical design, production and software engineering.

ITES are services that can be delivered remotely using telecommunications networks. These include services for industries like banking, insurance and telecommunications, as well as functions that exist across industries such as human-resources management, finance, administration and marketing accounta.

“Developing countries have been very successful in IT services and ITES. Undoubtedly, India is the global leader in both industries. However, China, Mexico and the Philippines are also emerging as potential players in this space,” the study stated.

The World Bank said the global distribution of offshore IT service markets showed the Philippines already accounted for 1 percent of the market. In IT services India accounted for 54 percent, followed by Canada with 29 percent; Ireland, 8 percent; China and Central and Eastern Europe, tied at 3 percent; and other sources, 2 percent.

In terms of the global distribution of offshore ITES markets, the World Bank study showed the Philippines accounts for the third-biggest market share at 15 percent. India accounted for the biggest share with 37 percent, followed by Canada with 27 percent.

ITES markets that trailed the Philippines were Ireland and Mexico with a market share of 5 percent each, Central and Eastern Europe with 4 percent, China with 2 percent, and other sources, 5 percent.

The same study said the Philippines is now considered the leader in the East-Asia and Pacific region, accounting for as much as 56 percent of all Information and communications technology (ICT) goods exports.

Other economies in the East Asia and Pacific also considered leaders in ICT goods exports are Singapore which accounted for 46 percent; Malaysia with 45 percent; Hong Kong, China, 42 percent; and China, 31 percent.

The World Bank said the expansion of IT services and ITES creates significant economic and social benefits, especially for developing countries like India and the Philippines.

India, the World Bank said, exported more than $40 billion worth of IT services and ITES in 2007. This represented one quarter of the country’s total exports and nearly half of its service exports.

The study cited data from the Business Processing Association of the Philippines (BPAP) that IT services and ITES employed 345,000 people as of mid-2008 and are projected to directly employ close to 1 million people by the end of 2010.

“Employment of this scale means that the sector would account for 27 percent of all new jobs created in the Philippines by 2010” the bank said.

Another important positive impact of the growth of IT services and ITES is on the status of women. The study said that in the Philippines, women account for 65 percent of the total professional and technical workers in IT services and ITES.

In India, women make up 30 percent of the IT services and ITES workforce—a much higher rate of female participation than in the services sector in general—and this share is expected to grow to 45 percent by 2010.

“More than half of call-center employees are women. In both countries, women fill a greater number of high-paying jobs in IT services and ITES than in most other sectors of the economy,” the World Bank said.

One of the advantages of the Philippines, according to the World Bank, is an American-based approach in education. This not only refers to a bilingual education system but in specific areas of study that are crucial in delivering IT services and ITES.

Universities in the Philippines, the bank said, offer courses in finance and accounting modeled after the US’ Generally Accepted Accounting Principles (GAAP). This has made the Philippines a natural choice for US banks and financial institutions seeking to offshore portions of their operations.

“Developing globally benchmarked skills in partnership with leading standards organizations helps not only maintain a certain level of quality, but also align skills with industry requirements,” the bank stressed.

Services growing globally

The services sector is growing globally—it already accounts for 70 percent of employment and 73 percent of gross domestic product (GDP) in developed countries and for 35 percent of employment and 51 percent of GDP in developing countries.

The study said IT services, a component of the services sector, represents a $325-billion annual potential market, according to McKinsey & Co. estimates.

As for ITES, estimates of the size of the market varies. The bank said analysis by McKinsey & Co. suggested that the annual potential market for ITES was $150 billion in 2007.

However, the bank said a Gartner Research in 2008 saw the global market growing from $171 billion in 2008 to $239 billion in 2012. There are more optimistic estimates, the bank said. This included the one from Nasscom-Everest in 2008, which suggested that the global ITES market will be worth $700 billion to $800 billion by 2012.

Filipinos get first crack at Guam’s 10,000 jobs

Max V. de Leon
Business Mirror

THE governor of Guam practically promised that Filipino workers will be among the favored workers to be hired for the estimated 10,000 jobs that will be opened with the infrastructure buildup for the transfer of the American base there from Okinawa in 2014.

Gov. Felix Camacho, in a press conference at the sidelines of the Guam Trade Mission on Tuesday at the New World Renaissance Hotel in Makati, said the Filipinos are high on the list next to the locals and those from other US territories nearby, because of their English-speaking capability, skills level and experience in working overseas.

Aside from this, Camacho said there is already a familiarity between the Philippines and Guam since Filipinos were recruited for Guam’s reconstruction after World War 2.

It has been reported that the number of jobs for the base transfer could not be filled by local labor alone, availability for which was reported to be way below that required.

“It is not exclusive but the likelihood is that most will be from the Philippines,” said Camacho.

He said Filipinos need not worry about fighting it out with Chinese workers for the military bases-related projects because for security purposes, the US government had decided the Chinese will not be included in the hiring.

Their estimate is that Guam would need up to 15,000 construction workers for various infrastructure projects valued at about $15 billion over five years, he added.

He said Guam and the nearby territories will only be able to fill in about 5,000 of the required number of workers.

David Tydingco, senior vice president of Guam-based contractor Younex, said Filipino workers will only be shelling out minimal expenses if they are recruited because the contractors will shoulder most of the costs.

He said a construction worker will earn from $12 to $25 an hour in the base construction depending on his skills.

Camacho said aside from construction, there are also opportunities in health care, especially with the federal government exempting Guam from the national quota rule for the recruitment of foreign workers. The suspension of the quota restriction for Guam will start on November 28.

Although there are career opportunities as federal workers in Guam, the construction workers will be required to go back home after their projects are completed, a provision that will be in their contracts.

Tydingco said based on their projections, all the necessary infrastructure such as the roads, expansion of the seaport and airport, utilities and power, as well as the horizontal and vertical developments, will probably take up to 2016 to complete.

Recruitment of workers, Camacho said, will start probably early next year.

Guam and the Philippines will also set up a business chamber that will facilitate prospective partnerships between their private sectors.

No Philippine recession: study

Cai U. Ordinario
Business Mirror

THE impact of the global financial crisis on the Philippine economy will likely cut the country’s gross domestic product (GDP) growth to 2.4 percent in 2009, according to an independent analysis released by First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) Capital Markets Research.

However, this was still higher than the latest projection of the interagency Development Budget Coordination Committee (DBCC), which revised the country’s full-year growth projections downward. The DBCC now sees GDP to be within a range of 0.8 percent to 1.8 percent in 2009.

Nonetheless, the FMIC-UA&P Capital Markets Research group said the projection is lower than the 3.8-percent GDP growth posted in 2008. This was based on the latest data revision of the National Statistical Coordination Board (NSCB) released in May.

The group also maintained a “no recession” scenario for 2009, and even said a 1.5-percent GDP growth is possible at the end of the first half of the year, which would signal a “bottoming out” of the Philippine economy.

“Taking off from the basic trends so far and seeing a weak recovery in the United States, Europe and Japan, but robust growth in China, we expect the economy to bottom out in the first half of the year [and pick up] to 2.5 percent to 3.5 percent GDP growth in the second half; on average, the year should slow down to 2.4 percent from 3.8 percent in 2008,” the FMIC-UA&P Capital Markets Research group said in the June 2009 edition of The Market Call.

The group also sees headline inflation rate in the Philippines averaging 3.3 percent this year and increasing to 4.2 percent in 2010. This will be due largely to higher crude-oil prices.

The FMIC-UA&P Capital Markets Research group also expects inflation to go below 1 percent in July and August. However, inflation is expected to hit 4 percent in December.

Meanwhile, interest rates are expected to remain low since the 91-day T-bill rates are seen to slow down to a low of 3.5 percent by August and inch up to 4 percent by year-end.

“(The) benchmark 10-year T-bonds should follow a similar pattern, dropping to a moderately low of 7.2 percent by September and flatten toward year-end, a slight downward bias. The third-quarter yields do not go down as fast as the headline inflation rate and the likely rate cut, because of larger fundraising during the quarter,” the group said.

Labor and employment

The increase in employment in the April round of the Labor Force Survey, released in the second week of June, came as a surprise, according to the FMIC-UA&P Capital Markets Research group.

Considering the severity of the global economic recession, this is considered a positive development and would be a good sign that a recession will not be possible in the near term.

The group said despite the fact that there was an increase in the number of those who worked less than 40 hours per week, this only reflected the shift that businesses needed to make to avoid laying off employees.

Filipinos who worked less than 40 hours a week increased to 41 percent of total employment, higher than the 35.6 percent in 2008.

“We should consider that the 1-million decline in those working at least 40 hours per week moved to the lower category of falling below the benchmark time. Netting this out from 2.4 million still gives 1.4 million new part-time employees. Even in the unlikely assumption that these only worked 50 percent of the time, the net increase in employment would still be some 700,000, or 2.2-percent increase for a year. That is still above the population growth of anywhere between 2.0 to 2.2 percent,” the group added.

Weaker peso

The group sees the peso further depreciating in the second half of 2009, mainly due to slower overseas Filipino worker (OFW) remittances and negative double-digit growth, costlier oil imports and a higher fiscal deficit.

The group sees the peso hitting P48.11 in July, P48.28 in August, and P48.51 in September. The group said the peso has been trading at around P47 to P48 for the most of mid-May to June, largely a fallout of the crisis in the US economy and other international markets.

“It finally broke the 48-per-dollar mark when the government revised its growth forecast for 2009 from 3.1 percent to 4.1 percent to just 0.8 percent to 1.8 percent. The government’s raising of the deficit ceiling from P199.2 billion to P250 billion also contributed to the weakening of the peso against the dollar. This projected budget shortfall of 3.2 percent of GDP, together with a rally in the greenback, continues to weaken the peso,” the group said.

Another major factor for the depreciation of the peso is the slow increase in OFW remittances, largely because the peak months of OFW remittances have passed. A depreciation in the peso, the group said, is needed to boost remittances.

“Given that we are now past the months with high OFW remittances, we do not expect dollar remittances to post large growth rates. Nevertheless, we should still expect positive growth given the sustained deployment of migrant workers to different countries,” the group said.

Tuesday, 30 June 2009

Building boom in Manila

Tony Macapagal
Manila Standard

At least 243 construction projects, 43 in depot-laden Pandacan, are lined up across Manila indicating a reinvigorated sector, said a city official.

Engineer Melvin Balagot, building office chief, in his report to Mayor Alfredo Lim, said the list of clearances and permits issued has lengthened amid what is described as a global financial crunch.

“This ongoing building boom clearly shows that investors have confidence the way our city officials and employees are doing their given tasks. Also, our local residents and constituents have trust and faith in the manner we enforce and implement rules, regulations and guidelines, especially the building code,” Lim was quoted as saying in commending Balagot and his staff.

A list furnished Standard Today by Balagot showed a 25-story condominium on Ongpin Street in Binondo owned by Presscon Philippines Inc.; a 10-story condo on De las Alas St.; Sta. Ana owned by CDC Realty Inc.; a nine-story building corner of Narra and Padre Algue streets, Tondo owned by Giant Star Realty Corp.; a 10-story commercial building near the Robinsons Place in Ermita belonging to Ronnie Ong; a seven-story commercial edifice on Antonio Rivera St., Tondo owned by Hui Fuk Tong and Carlito Go; a seven-story residential-commercial building on Apacible St., Paco owned by Peter See; a six-story residential apartment on Cristobal St., Sampaloc owned by Simplicia Chuachico; a six-story residential apartment on V. Concepcion St., Sta. Cruz owned by Manuel Tamayo (of Perpetual Help College Manila); a six-story commercial structure on Margal corner Don Quijote streets, Sampaloc owned by JR Realty and Development Corp. Philippines; a six-story apartment on M. Hizon St., Sta. Cruz owned by Aljane Anatalio; four five-story clusters in Sampaloc; and one in Tondo in the low- to medium-rise segment.

In the high-rise category projects in various stages of construction are a residential/commercial on P. Noval St., Sampaloc owned by S & R Finance Corp.; a building on Leon Guinto St., Malate owned by Ocean Star Realty Inc.; a building on Taft Ave., Malate owned by The Tower Corp.; a commercial building on Juan Luna cor. T. Paez streets, Tondo owned by Tiu Kim Tia; a building on Soler St. owned by R & S Tower Inc.; and one on Alvarado St., Binondo owned by Uniworld.

According to Balagot, the building rush translates to added business and realty tax revenue for the city coffer.

“More taxes collected will mean more school rooms, free medicines, free school supplies, paved roads, benefits for our workers, cops, teachers and medical hands, feeding sessions and wheelchairs for the less fortunate to be provided by our government,” he said.

Balagot said his staff would be inspecting dormitories and boarding houses to make sure they conform to regulations on fire safety, ventilation, hygiene and other provisions of the building code.

He said a task force would determine structures to be “condemned and must be demolished immediately” to prevent accidents due to collapsing buildings.

Voyage of the Balanghai (I)

Pasig-based call center opening second Philippine site in Bacolod; to hire 2,000

Nanette L. Guadalquiver

BACOLOD — Outsourced service provider Transcom Asia is hiring 2,000 call center agents for its Bacolod operations that will commence next month, the Bacolod-Negros Occidental Federation for Information and Communications Technology (ICT) has announced.

Transcom, a leading business process outsourcing (BPO) company in Europe, will occupy the information technology (IT) zone at Lopue’s South Square, to be known as Transcom Center Bacolod. The company started hiring call center agents last week.

Councilor Jocelle Batapa-Sigue, chairman of the Bacolod ICT Federation, said Transcom’s entry to Bacolod came after she presented to the company’s officials various special economic zones for IT in Bacolod. These IT zones are accredited by the Philippine Economic Zone Authority.

Transcom Center Bacolod will be the 14th accredited site in Bacolod, and once issued a presidential proclamation, will be the eighth IT economic zone in the city.

Last year, Transcom, which specializes in customer relationship and management and credit management services, opened its first Philippine call center in Pasig.

Established in 1995 in Sweden, the company has 21,000 employees speaking 33 languages in its 75 global service centers across 29 countries in North Africa, Asia, Europe, and North and South America.

With Transcom locating to Bacolod, the city now hosts four major call centers, including Teleperformance, TeleTech, and Convergys, as well as three medium-sized BPO companies — Focus Pacific Communications, Next Level IT Teleservices, and Telequest BPO Center.

Ms. Batapa-Sigue said that last week, she met with Transcom Asia Country Manager Siva Subramaniam and presented human resource plans and programs of the ICT federation that will ensure sufficient manpower for new outsourcing companies coming to Bacolod.

Every year, Negros Occidental produces more than 14,000 graduates from 1,318 schools, including 53 registered technical schools. The province also has about 40 institutions of higher learning and various computer, call center, and medical transcription training providers accredited by the Technical Education and Skills Development Authority.

Ms. Batapa-Sigue said Bacolod, which ranks fifth in the "Top Ten Next Wave Cities" list, needs to increase its human resource pool to meet the demands of new ICT businesses.

"This means ensuring that potential employees have good English communication skills," she added.

The federation is marking the National ICT Month with the theme "English: Your Key to Global Competitiveness" with activities such as an interactive orientation for about 50 public school English teachers on the IT-BPO industry standards of the English language, as well as an inter-school English olympics.

On Sept. 10 to 12, Bacolod will host a "Cyber Corridor Roadshow" with the Commission on Information and Communications Technology, to be participated by representatives from the academe as well as potential investors, IT entrepreneurs, government officials, and private sector practitioners.

BPO firm sets up Asia-Pacific headquarters in the Philippines

J. F. de Guzman

MASSACHUSETTS-BASED Stream Global Services, Inc. yesterday opened its second site in the Philippines, which will also serve as its Asia-Pacific headquarters, completing a $12-million (P570-million) investment.

"Our investment in this site reached $12-13 million just including the facility and the technology that we have utilized," Stream Global Services Chairman and Chief Executive Officer R. Scott Murray said at the sidelines of the inauguration of the new site at the annex of SM City North EDSA in Quezon City.

If training costs are included, total investments would reach $20 million by the end of 2009, he said.

Stream SM North, a 1,400-seat facility, is the second call center of Stream Global Services in the Philippines. Its first site in Makati opened in 2008 and employs 600 workers.

"To date, we have more than 800 employees in the Philippines and we’ll have around 3,000 employees including this new site by yearend 2009," Duane Cummins, Stream Global Services regional vice-president for Asia and the Pacific, told reporters yesterday.

Mr. Murray said the work force in the Philippines could reach more than 5,000 in the next 12 months.

Another site will be opened before the end of the year but he declined to disclose additional details.

"We have been here in the Philippines in the last 10 months examining the feasibility and success of the local BPO (business process outsourcing) industry. And so far, we are determined to open a new one but plans are still tentative," he said.

Craig Weinstein, Stream Global Services vice-president for corporate services and government relations, said: "We are considering provincial locations for this new site that we will open this year."

Mr. Murray also said the company is also looking at possible acquisitions to expand its presence in the local BPO industry.

"We are considering the Philippines a strategic hub for offshore services ... The country already has an established call center industry," Mr. Murray noted.

Stream Global Services expects its work force worldwide to reach 200,000 in the next five years, generating at least $10 billion in revenues annually.

Stream Global Services, listed on the American Stock Exchange, employs more than 17,000 workers in 34 service centers in 19 countries.

It describes itself as "a trusted advisor to some of the largest technology, retail, entertainment/media, telecommunications and related companies in the world," with services covering technical support, customer retention, and revenue generation.

Stream Global Services reported $135.6 million in revenues in the first quarter, down from $140.4 million last year. But profits went up to $1.7 million for the three months ending March 31, from $1.2 million in the same period last year.

Aside from the Philippines, the BPO firm is opening new sites in Egypt, Brazil, and Tunisia this year.

What’s the worry over automated elections?

Manila Bulletin

MANILA, June 24 (Reuters) — The Philippines’ Commission on Elections (Comelec) is signing a $150-million deal with a Barbados-based company this week to automate balloting at the presidential polls next year, hoping to avoid fraud and speed up results.

About 50 million Filipinos are choosing a president, vice president, nearly 300 members of the two-chamber legislature and more than 17,000 local government officials through the as yet-untested automated system.

Lawmakers, political groups and analysts have cast doubts over the automated process. Many fear chaos due to potential machine breakdowns and delays in result transmission, which could lead to a failed election and political limbo.

Such scenarios are making local financial markets nervous.

Here are some questions and answers about the plan to automate the vote count in the Philippines.

Why automate the elections?

Hounded by allegations of poll fraud and manipulation of vote counts in past elections, the Philippines has embarked on a major project to automate voting, using machines that can scan ballots, print and transmit results that could declare winners within two hours at the local level and about 36 hours at the national level.

About 82,200 precinct count optical scan (PCOS) machines will be deployed nationwide. Each machine is programmed to read about 1,000 ballots from four to five polling precincts at 350,000 locations across the archipelago.

The elections commission said the automation process will minimise human intervention in the process and reduce allegations of fraud. It would speed up the electoral process, giving it a result within two days instead of the weeks it has taken in the past.

Can it be done?

Lawmakers, politicians and analysts have expressed concern over the readiness of the country’s election agency to automate balloting because of the introduction of a brand-new system that has never been tested anywhere in the world.

At a congressional oversight hearing in the Senate, lawmakers frowned on the lack of planning by the election agency, including delivery, testing and actual operations of the machines.

There were also concerns over the financial and technical
capability of the Barbados- based company and its local partner that have won the contract for the poll automation.

There were also legal questions raised over the ownership of company due to rumours that the Venezuelan government may have control over it.

What happens next?

Critics fear that allies of President Gloria Macapagal Arroyo could exploit any perceived malfunction in the automation process to invalidate the elections.

Candidates could lean on irregularities and flaws to contest results and a massive failure in the process could result in a power vacuum if no winners are declared on June 30, 2010 when terms of office of all elected officials, from the president down to municipal councilors, will expire.

Any potential civil unrest arising from the confusion over the failed automated process could be used as a pretext for declaring martial law and subsequently extend Arroyo’s term beyond June 2010.

Arroyo is not eligible to contest under constitutionally set term limits for elected officials. Critics accuse her and her allies of trying to amend the Charter to remove those limits, but it appears the move to revise the Constitution may not succeed.

Thus, her critics are worried that Arroyo and her allies may be pushing flawed automated balloting to create a scenario that will work in her favor.

What are officials saying?

Election commission officials are confident the automated balloting will succeed despite fears of technical problems and also say tallying of votes can be done manually if machines fail.

James Jimenez, a spokesman for the elections agency, said voting will still be done manually and only the counting is being automated, so if the machines break down, the ballots can be counted. There are also enough spare machines to replace any defective and malfunctioning PCOS.

Gabriel Claudio, the president’s political adviser, dismissed as “unfair’’ and “malicious’’ the speculation that the administration was preparing to make automated elections fail and keep Arroyo in power beyond June, 2010.

Claudio said the President was determined to hold credible, honest, and fast elections next year, a legacy that her government wanted to leave behind.

Metrobank unit sees Philippine inflation at 0.2% and BSP rate cut in July

Erik de la Cruz
Business Mirror

WITH Philippine inflation expected to decelerate to just 0.2 percent next month, the Bangko Sentral ng Pilipinas (BSP) may deliver next week its sixth cut in key interest rates since December, according to First Metro Investment Corp. (FMIC).

The strong base effect, given the high consumer prices last year, and weak demand for oil due to the global economic slowdown, will bring down inflation to below 1 percent in July and August, FMIC said in the June issue of the Market Call.

The Market Call is published every month with inputs from some economists at the University of Asia and the Pacific (UA&P). FMIC is the investment banking arm of the Metrobank Group.

“With the easing inflation outlook, we may expect yet another rate cut [of 25 basis points] in the next Monetary Board meeting scheduled on July 9 to further stimulate the apparently weak economy,” the report said.

The BSP has slashed its key policy rates by a total of 175 basis points since December to 4.25 percent for the overnight borrowing facility and 6.25 percent for the overnight lending facility, to help stimulate economic growth amid the global recession.

After five rate cuts in the past six months, central bank officials recently said they were maintaining the bias to continue easing monetary policy.

Inflation was at an 18-month low of 3.3 percent in May, and is projected to ease to 1.4 percent this month.

Expectations of further policy easing from the BSP have risen after the government early this month decided to scale back its growth estimate this year to a range of 0.8 percent up to 1.8 percent, from the previous range of 3.1 percent up to 4.1 percent.

The target revision came after first-quarter growth came in much weaker than anticipated at 0.4 percent.

The research team of FMIC and UA&P expects the gross domestic product to have expanded by 1.5 percent in the first half of the year, “either because the first-quarter advanced GDP estimates would be revised upward, or if not, the heavy government spending will be translated into actual economic activity in the second quarter.”

“What we are now expecting is an upward revision of first-quarter growth come August to around 1.8 percent, as more data [come in],” it said. “If that happens, we may see a slowdown of second-quarter growth to 1.0 percent.”

But if there is only a slight revision in the first-quarter estimates, the analysts said the additional government spending will have to be reckoned in the second quarter, with growth seen hitting 2.4 percent.

The economy, they said, was likely to have bottomed out in the first half of the year, and growth would pick up to 2.5 percent to 3.5 percent in the second half.

Full-year growth is thus expected to hit 2.4 percent, above government estimates but slower than the 3.9-percent expansion last year, taking into account “the basic trends so far” and a weak recovery in the US, Europe and Japan, and robust growth in China, they said.

The FMIC-UA&P analysts expect inflation to slowly to creep from below 1 percent in July and August up to 4.0 percent by December as the third quarter lows are dominated by base effects.

Inflation should average 3.3 percent this year and edge up to 4.2 percent next year due to higher crude-oil prices, they said.