Saturday, 1 May 2010

The Philippines can be what it wants to be

We're not alone
Peter Wallace
Manila Standard

We keep complaining about how badly the situation has deteriorated here over the past decade or so. A trip overseas brought the matter more into perspective.

Elsewhere it can be far worse. Bangkok is of course, for us, the most glaring example as it is so closely aligned to us. But it’s by no means the worst. It seems all over the place there are countries in crisis and, and this is important, in almost every case because of corrupt or dictatorial leadership.

Most worrying would perhaps be the sinking of a South Korean warship by, by all indications, a deliberate attack from perhaps the most violated society in the world today—North Korea. Kim Jong Il has totally destroyed his country. The two Koreas prove my oft-raised thesis of just how important a leader is. Both countries were exactly the same before their separation in 1948, exactly the same people, exactly the same culture, heritage and history and geographically together. Yet one adopted democracy and enlightened leadership and is today the 15th largest economy in the world with its people’s per capita income, at US$28,000 ranking it number 24 in the world. And that per capita income quite widely shared. North Korea, on the other hand subsists with a low GDP per capita of $1,700. And a GDP of a miserable US$40 billion (and a huge inequality in the sharing of that) versus the South’s $929 billion—23 times as much.

What the South will do after this attack could have wide repercussions for all of us. The obvious, and correct, response, is to declare war. But North Korea is a nation with a huge army and nuclear weapons and an idiot who might use them. A very worrying time.

Dozens were killed in Pakistan by a suicide bomber of the Taliban in a country, like ours, where the internal strife has never been settled.

Iraq, of course, even outranks the Philippines in journalists killed, and far exceeds it in civilians killed on an almost daily basis—another 100 just the other day. While in Afghanistan the president and some of his senior officials were accused of massive fraud and corruption. President Hamid Karzai is also blamed for the rise of the neo-Taliban. Almost 9 years after the removal of the Taliban government, corruption and poverty are still widespread in this South-Central Asian country. Transparency International ranked Afghanistan as the 2nd most corrupt nation in the world. An estimated 18 million live on less than $2 a day; GDP per capita is only $800. The Fund for Peace reported that in the first quarter of 2008 alone, about 13,000 Afghans were displaced anew as violence occurred in “previously safe areas.” More than 130,000 were also displaced due to drought, violence and instability.

President Omar al-Bashir of Sudan has killed some 300,000 people and displaced 3 million more. He is wanted by the International Criminal Court in The Hague for crimes against humanity. There’s an election coming but Bashir has so manipulated it that the opposition has withdrawn its candidate. Chaos and confusion reign in Sudan.

Somalia, meanwhile, has failed to establish a functioning central government since 1991. The Fund for Peace ranked Somalia the most failed state in 2009. Poverty in Africa’s easternmost country is rampant with about 22 percent of its 9.1 million population, or about 2 million, still relying on food aid. Its GDP per capita is a miniscule $600. In 2008, Somalia was tagged by Reporters Without Borders as “Africa’s deadliest country for journalists.” Welcome to our world.

But it’s not just these, just listen to this. “In Kyrgyzstan, ousted leader Kurmanbek Bakiyev said he would formally resign if leaders of the coup that removed him from power guaranteed safety for him and his family. But the nation’s interim government said Bakiyev must either face trial or go into exile—without his family.”

So you see the Philippines isn’t doing so badly. But that doesn’t and won’t excuse the President if she tries some sort of similar undemocratic extension of her power.

But then again, who are we comparing to? Iraq? Afghanistan? Sudan? Is this the league we want the Philippines to be in? Why not want to belong to the group of Singapore, Malaysia, South (definitely not North) Korea—the ones who’ve done well? Why not us? This is where the comparison should be.

And this is where I get so frustrated. Here we are a country of marvelous people, rich in natural resources and beauty yet we lag behind everyone else who matters.

On this trip we talked to many Filipinos and their bosses were delighted with their hard work and dedication to the job. It can be the same back here, you should see my staff. Equally hard-working and dedicated, they’ll stay on until the job is done. Or come in on a weekend to complete it if it’s urgent.

One small example: one of the things that struck us most in Australia and Singapore was how clean they were. It costs next to nothing to be clean, just attitude. Being poor is not an excuse. In Singapore a street hawker with a small store lost his license and had to go to training because his food stall was dirty and had caused several people to get sick. Have you seen the food stalls in Malate? The concept of a license to operate let alone training on food handling, hygiene etc. is unheard of. Why?

The Philippines can be what it wants to be. To be classified as among the unstable nations of this world struggling past the throes of poverty. Or be among the affluent societies able to provide for the material needs of its citizenry. It’s all just a matter of attitude. And good leadership.

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Aurora Special Economic Zone Act lapses into law

Gerard S. dela Pena

President Gloria Macapagal Arroyo has allowed to lapse into law a measure aimed at increasing the competitiveness of industries in Aurora province and harnessing its natural resources.

Mrs. Arroyo allowed Republic Act (RA) No. 10083 -- which amends RA 9490 or the Aurora Special Economic Zone Act of 2007 -- to become law on April 22 by virtue of not affixing her signature on it. The measure is the consolidated version of Senate Bill No. 3408 and House Bill No. 6213.

Under the Constitution, the president may sign or veto a measure approved by both houses of the Congress 30 days upon receipt by the Palace. If the president does not act on it, the measure lapses into law.

The new law renames the Aurora Special Economic Zone into Aurora Pacific Economic Zone (APEZA).

It also provides for the expansion of the actual size of the economic zone, which is located in municipality of Casiguran in Aurora, to 13,852 hectares from the previous 480 hectares.

Another salient feature of the new law is the provision for the creation of a corporate body called the Aurora Development Corp. (ADC), which will act as the operating and implementing arm of the APEZA in managing the economic zone. The president is also given the power to nominate the president and chief executive officer of the ADC.

The 5% tax slapped on gross income of the exo zone locators was also restructured so that 2% will go to the national government’s coffers, 2% will be remitted to the treasurer’s office of the municipality, and 1% will go to the APEZA. Previously, locators were required to remit 3% of their gross income to the national government.

Economic zones are created to entice foreign investors to set up shop in the country by giving them perks such as exemption from certain taxes.

The latest data from the Philippine Economic Zone Authority showed that exports from economic zones reached $9.46 billion in the first quarter, almost 49% higher than year ago levels, due to the improvement in demand for Philippine-made products.

RP on track to meet deficit target says JP Morgan


Despite the large deficit incurred in March, the government is on track in meeting its budget shortfall for the year due to the expected slow down in spending for the second quarter as well as improved revenues, US investment banking giant J.P. Morgan said in a statement on Friday.

It said the government’s budget deficit for March reached P63.9 billion, roughly twice the budget shortfall incurred in January and February. The government’s deficit in January was of P37.1 billion, while the shortfall for February reached P33.2 billion.

J.P. Morgan said the large deficit in March was due to the rise in non-interest payment spending.

Expenditures for March totaled P160.7 billion.

J.P. Morgan said that while the government incurred a budget deficit of P134.2 billion in the first quarter -- which exceeded the P110.9 billion target -- "there are several reasons to expect improvement in the months ahead."

"Spending is expected to have slowed this month due to election-related restrictions placed on the fiscal authorities," it noted.

Lower spending, it said, combined with higher revenues in April, which is the tax filing month, should lead to a smaller second quarter deficit.

J.P. Morgan noted that the government has estimated tax revenues for the year based on a projection of 2.6% gross domestic product (GDP) growth. It said the government’s projection was too low as it expects Philippine GDP to be 4.5% this year.

It said that every 1 percentage point increase in GDP growth is equivalent to a P13 billion increase in nominal revenue collections.

It also said that so far, collections of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) have been higher than expected. BIR collections reached P173.9 billion, exceeding its goal by P16.2 billion in the first quarter, while the BoC collected P60.6 billion, exceeding its target by P5.4 billion for the same period.

But J.P Morgan noted that since expected privatization proceeds in the first quarter were not available as the government was unable to sell the assets, there is a risk to later revenues if the privatization receipts do not materialize.

The government intially set the first quarter as the deadline for the privatization of three assets: the sale of the 10% participating stake of the Philippine National Oil Co.-Exploration Corp. in the Malampaya natural gas project, the sale of a portion of the Food Terminal Inc. complex, and the lease of the property in Fujimi, Japan. It had expected to raise P30 billion from the privatization efforts, P14 billion of which was programmed to be spent in the first quarter.

The completion of the privatization of the assets was however moved to the second quarter due to difficulties encountered by the government.

"Despite the larger than expected budget deficit in Q1, improvement in Q2 should enable the government to meet its year-end target," J.P. Morgan said.

The government has programmed the shortfall to reach P34.2 billion in the second quarter. The government expects the budget shortfall to reach P293.5 billion this year. Last year, the deficit hit P298.5 billion, breaching the government’s P250 billion cap.

Metro Pacific wants to link two expressways


Metro Pacific Investments Corp. (MPIC) has submitted an unsolicited proposal for the final link of a project connecting the North Luzon and South Luzon expressways (NLEx and SLEx).

Speaking at the launch of the groundbreaking of an NLEx segement, MPIC chairman Manuel V. Pangilinan told reporters that Metro Pacific Tollway Corp. (MPTC) was offering to spend P17 billion to build the extension to Buendia.

"The project cost is around P17 billion for this road. This will have some elevated roads and a bridge over [the[ Pasig and we estimate that the right of way would cost the government P2.41 billion," Mr. Pangilinan said.

The connector road is expected to decongest Metro Manila by providing an alternative to the main C-5 and EDSA highways, plus other major thoroughfares, with travel time savings of approximately 15 to 20 minutes.

MPTC’s proposal involves a start at the C-3 interchange and ending at the Buendia ramps going into the SLEx.

Mr. Pangilinan said MPTC would also be constructing the segments connecting the Manila North Harbor to the expressways.

"We’re also doing segments nine and 10. This is mostly an elevated expressway and will connect the North Harbor via C-3 which will cost about P6.8 billion to P7 billion," he said.

The full project, said Mr. Pangilinan, would cost some P23 billion and could be funded via internal equity or assistance from the Japan International Cooperation Agency.

Representatives of MPTC sister firm Manila North Tollways Corp. (MNTC) and the government staged a final inspection of the Mindanao exit of the NLEx extension on Friday. The road is scheduled to be opened to the general public next month.

In another development, MNTC president Ramoncito S. Fernandez said a planned dilution of shares was still be up in the air.

"We are coordinating with our mother company Metro Pacific Investments Corp. and looking at how a possible refloat will affect it. It’s still one option but we are being asked to evaluate if we are going to float, offering public or private funds or equity," Mr. Fernandez said.

He said MPIC needed to raise $200 million for projects and that Evercore Wealth Management had been tapped as a financial adviser.

MNTC is also awaiting formal notice from the Bases Conversion Development Authority regarding a negotiated bid for the Subic-Clark-Tarlac Expressway.

Mr. Pangilinan is also chairman of Philippine Long Distance Telephone Co. (PLDT). Mediaquest Holdings, Inc., owned by the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld.

Friday, 30 April 2010

Open season for calumnies

Manila Bulletin

Now is the time to remind people who call themselves Christians that there is a commandment of God which states: “Thou shalt not bear false witness against thy neighbor.” Election campaign period seems to give people license to spread calumnies and besmirch the good name of others. We must keep in mind that a sin of calumny cannot be forgiven if there is no restitution, i.e., the offender must do everything in his power to restore the good reputation of the offended. Every one has the fundamental right to a good name.

In this regard, I would like to borrow from the preaching of St. Josemaria Escriva, Founder of Opus Dei, on the “Christian Respect for Persons,” as contained in a collection of homilies entitled Christ is Passing By. Commenting on the impulse of the disciples to judge that a man born blind was either guilty of sin himself or was punished because of the sins of his parents, St. Josemaria affirmed:

“We cannot be surprised that many persons even those who think themselves Christians, act in the same way. Their first impulse is to think badly of someone or something. They don’t need any proof; they take it for granted. And they don’t keep it to themselves, they air their snap judgments to the winds.”

Having been brutally calumniated himself by people who considered themselves good, St. Josemaria identified himself with Jesus Christ: “Jesus suffered a campaign of slurs on his name, defamation of his irreproachable conduct, biting and wounding criticism. It is not unusual for some people to accord the same treatment to those who wish to follow the Master while fully conscious of their natural shortcomings and personal mistakes which, given human weakness, are so common and even inevitable. But our experience of human limitations cannot lead us to condone sins and injustices against the good name of anyone, even though their authors try to cover their tracks by just ‘wondering’ aloud. Jesus says that if the father of the family has been labeled Beelzebub, members of the household cannot expect to fare any better. But he also adds that ‘whoever calls his brother a fool shall be in danger of hell fire.’”

No one of us should be an instrument of calumniators by passing on to others text messages or emails containing negative comments about others unless we have verified the truthfulness of the criticisms beyond the shadow of doubt and making them known would prevent the election of an undesirable candidate. If the person being criticized is not a public official or is not running for any elective position, we do not have the right to spread even truthful information that would destroy his or her reputation. This is one good example of the Christian respect for persons.

For comments, my e-mail is

SLEX to be extended after May 2 turnover

Malaysia firm to take over SLEx operations
By Paolo Montecillo
Philippine Daily Inquirer

THE LOCAL UNIT OF MALAYSIAN conglomerate MTD Capital Berhad plans to spend up to P10 billion more to extend the South Luzon Expressway (SLEx) by at least 55 kilometers from Sto. Tomas in Laguna province to Lucena City, Quezon.

Isaac David, president of MTD Capital unit South Luzon Tollways Corp. (SLTC) said the company would break ground in May to extend the present 30-kilometer highway further south.

SLTC’s sister firm, Manila Toll Expressway Systems Inc. (MATES), has already secured the government’s approval to take over SLEx operations, which is currently being run by state-owned Philippine National Construction Corp. (PNCC).

The turnover will take place on May 2 at 12:01 a.m.

“We have already completed over 99 percent of the things that need to be done at SLEx,” David said in a recent interview.

In 2006, MATES was able to secure the contract to modernize and operate SLEx until 2036. In return, its affiliate SLTC would invest P12 billion to widen the highway and improve the toll collection system.

At present, revenue from highway operations amount to as much as P3 million a day.

The company last December tried to take over highway operations from PNCC. But the state firm resisted, saying that the move would result in the displacement of over 1,000 PNCC workers.

The state firm, which successfully obtained a restraining order from the Pasig Regional Trial Court, also argued that since SLTC had not yet completed all the work needed at SLEx, MATES had no right to take over.

Last April 15, MATES was able to secure a toll operations permit from the Toll Regulator Board (TRB), paving the way for its takeover of SLEx on May 2.

MATES told the board that 99.8 percent of roadwork had been completed, while company employees had started manning most of the toll collection booths at SLEx.

“The PNCC has been very cooperative. They’ve allowed our employees to man most of the toll booths, so I believe there will be a smooth transition this weekend,” David said.

SLTC is now preparing to extend SLEx by at least 55 kilometers to Lucena City, David said.

“We have already undertaken engineering due diligence. I think a year and a half from now, the project will start, but this will also depend on how soon the government provides the right-of-way,” David told the Inquirer.

The toll road currently spans 30 kilometers from Alabang to Calamba, Laguna. Once SLTC completes a short extension to Sto. Tomas, also in Laguna, the total length of the highway will be 37 kilometers.

Thursday, 29 April 2010

Inauguration of Footbridges Along Commonwealth Ave., Q.C

Masbate governor gives up arms hoard

Florante S. Solmerin
Manila Standard

Masbate Governor Elisa Kho on Tuesday surrendered 24 assorted firearms to Defense Secretary Norberto Gonzales in a ceremony witnessed by the peace and order council members in her province.

Major Harold Cabunoc, spokesman of the Army’s 9th Infantry Division, said the assault weapons include two M60 machine guns, 12 M16 rifles, one 40mm M203 grenade launcher, one M1 Garand rifle, three 9mm sub-machineguns and 5 caliber .45 pistols.

Cabunoc said the firearms were believed to have been used by Kho’s supporters during the 2007 elections. He did not say how the firearms ended up with Kho and why not one of the gun owners came forward to surrender.

But Kho’s gesture is not an assurance that there will be no more atrocities here, said Major General Ruperto Pabustan, commander of the 9th ID. “The armed groups identified with the opposing political candidates have not yet laid down their weapons,” said Pabustan.

“This surrender of firearms shows Kho’s sincerity in supporting the government’s drive to stop the election-related violent incidents, for which Masbate is widely known,” Pabustan said.

Southern Luzon Command (chief Lt. Gen. Roland Detabali said he was hopeful that other politicians in the province will follow the lead of Kho, who is seeking re-election.

At least 11 armed groups operate in Masbate, which logged 18 election-related violent incidents in the 2007 elections.

Last March 16, a 250-man military group composed of former United Nations peacekeepers was deployed in Masbate to help dismantle the private armies.

SM Prime hikes Reit offer size to $500m

Jenniffer B. Austria
Manila Standard

SM Prime Holdings Inc., the country’s largest shopping mall operator and developer, is increasing size of its planned real estate investment trust offering to $500 million from an initial $300 million due to strong interests from investors.

SM Prime executive vice president Jeffrey Lim told reporters following an annual stockholders’ meeting that the company planned to put between 15 and 18 shopping malls in the country into a Reit company that will be listed in the Philippine Stock Exchange by the second half of the year.

SM Prime has 36 malls in the Philippines and three in China.

“SM Prime believes we offer compelling story for Reit structure. We have matured assets that we can incorporate into the Reit in order to raise capital. Using the Reit strucuture, SM Prime will be able to expand malls here and also in China,” said Lim.

He said the company would use proceeds from Reit for expansion, debt payment and to “pay back shareholders.”

The Reit law provides a regulatory and tax incentive framework to real estate companies to raise cash by publicly listing their income-generating assets, such as malls or office buildings

SM Prime, meanwhile, said it would open 1 at least one mall each year in China over the next three years, increasing its outlets in the world’s biggest economy to to 10 by 2014.

SM Prime will open four malls in the Philippines this year—Novaliches, Tarlac City and Calamba and San Pablo in Laguna. The four will bring to 40 the company’s shopping malls in the country with total gross leasable area of 4.8 million.

SM Prime will also open one mall in Jiangsu province, China, by the fourth quarter of the year. SM Prime’s three other malls in China are in Xiamen, Jinjiang and Chengdu.

Medical City set to spend P200M for hospital hub in Angeles, Pampanga

Emilia Narni J. David

THE MEDICAL City, the Pasig-based hospital owned and operated by Professional Services, Inc., will spend about P200 million for a new facility in Central Luzon.

Medical City President and Chief Executive Alfredo R.A. Bengzon told reporters in a press briefing yesterday the hospital will establish a hub for its Central Luzon outpatient clinics in Angeles, Pampanga.

“For Luzon, we are going to spend P200 million to upgrade the facilities we have bought and to introduce our flagship programs. We will be setting up a world-class hospital hub for Central Luzon soon,” said Mr. Bengzon.

The new hub will have around 200 beds, he said.

Early this month, Medical City bought the Global Medical Network from Evangeline C. Johnson for P150 million. The Global Medical Network includes the Great Saviour International Hospital in Iloilo, Mercedes Medical Center in Pampanga, and three outpatient clinics in Dagupan, Cavite and Olongapo.

The network caters to United States military veterans living in the Philippines. Its founder, Ms. Johnson, is now a shareholder in Medical City.

Medical City said funding for the acquisition of the Global Medical Network came from the sale of 2,700 shares and internal cash.

Funding for expansion will come from internal funding and borrowings, officials said.

Medical City announced P700 million in total investments, including the new Pampanga hub, following the acquisition of Global Medical Network early this month.

Mr. Bengzon explained that Medical City would keep its medical centers in Pampanga, Dagupan, Cavite and Olongapo. The new hub will be a separate building.

Margaret A. Bengzon, head of the Medical City’s strategic services group, said the new hub in Central Luzon would begin construction in the third quarter of the year.

“The center in Angeles will have a groundbreaking in the third quarter.

Basically what we are looking for when expanding is somewhere where we can add value, [an area that is] not served well,” she said.

Medical City will also expand the Great Saviour International Hospital in Iloilo to 250 beds from 100. A new medical arts building to house doctors’ clinics will also be built; the hospital is just awaiting court approvals for the site before starting construction early next year.

Medical City also has a clinic in Guam to accept referrals for medical tourism.

Ms. Bengzon said that despite the increase in the group’s bed capacity, most of the growth would be coming from outpatients.

“Our inpatient volume is not growing as much so the growth is really in the outpatient clients. This is in the mid- to long-term,” she said.

Medical City has some 40 years of experience in hospital operation and administration, serving some 40,000 inpatients and 380,000 outpatients a year.

Metrobank Q1 profit up 32%

D. G. K. Carreon

THE METROPOLITAN Bank & Trust Co. (Metrobank), the banking arm of tycoon George Ty, said its net income rose by almost a third in the first quarter, on higher profits from its lending business.

In a statement issued yesterday, Metrobank, the country’s second largest bank in terms of assets, said it recorded a consolidated net income of P2.5 billion in the first three months of the year, improving from P1.9 billion in the same period last year.

Metrobank shares closed flat at P53.50 apiece yesterday.

The lender did not divulge, however, how much it earned from its lending business, only disclosing that it booked an operating income summing up to P11.4 billion in the first quarter, 6.8% higher year-on-year, due to higher fee income, income from remittance services, and gains from financial market sales and trading.

It said net loans and receivables rose by 2.1% to P338.7 billion due to higher demand for financing by various firms, but particularly by those engaged in power generation and distribution and real estate development.

It also said it saw “sustained volumes from the consumer and middle market segments.”

Operating expenses, meanwhile, rose by 9.4% to P7 billion, due to higher manpower expenses.

Metrobank said it ended the quarter with consolidated resources up by almost a tenth to P833.4 billion mainly due to an 8.6% growth in deposits to P602.1 billion.

The bank also said it opened a subsidiary in China -- Metropolitan Bank (China) Limited -- to capitalize on that country’s runaway economic growth.

“Metrobank’s branch and sub-branch in Shanghai were folded into the wholly-owned subsidiary, Metropolitan Bank (China) Limited (MBCL), the first foreign bank headquarters to be established in Nanjing, the capital of Jiangsu province, one of the fastest growing regions in China,” it said.

MBCL, which has a branch and sub-branch in Shanghai and a representative office in Beijing, will focus on entrepreneurs and private companies.

Metrobank said it has been authorized by the Monetary Board to invest up to 1.5 billion yuan in MBCL, which currently has 1.3 billion yuan in capital (P8.5 billion).

Korean water company submits highest offer for Angat power plant


A STATE-OWNED Korean water firm has submitted the highest offer for the 218-megawatt (MW) Angat hydroelectric plant, besting five other companies in a bidding staged yesterday by the Power Sector Assets and Liabilities Management Corporation (PSALM).

Korea Water Resources Corp. (K-Water) offered $441 million for the Angat plant, which PSALM Vice-President Conrad S. Tolentino said was "the highest bid and exceeded the reserve price."

The other bidders and their offers were First Gen Northern Energy Corp., $365 million; San Miguel Corp., $313 million; SN Aboitiz Power Pangasinan Inc., $256 million; Trans-Asia Oil and Energy Development Corp., $237 million; and DMCI Power Corp., $189 million.

"What we have is a very good price," Maria Luz L. Caminero, PSALM acting president, told reporters after the auction, referring to the Korean firm’s offer.

K-Water expects to fund the acquisition from internal funds and financing from the Korea Export Import Bank, said Byung Dal Kim, director at the company.

PSALM, in a statement, said it would "verify the accuracy, authenticity and completeness of the bid documents that K-Water submitted before the company can be formally declared the winning bidder."

"As soon as K-Water is officially declared the winning bidder, it will be obligated to operate and maintain the Angat Dam at no cost to the government," said PSALM.
PSALM assured that the privatization of the power plant will not negatively affect the disbursement of water from the Angat reservoir, which supplies over 90% of Metro Manila’s needs.

"The use of water by the winning bidder for the Angat HEPP (hydroelectric power plant) will be regulated by the National Water Resources Board," it said.

National Power Corp. (Napocor) spokesman Dennis S. Gana said hydropower plants are attractive to investors, since fuel is not a cost factor.

"The Angat dam is a hydro plant, so one does not need to spend on fuel anymore for it to run. And it also has no loans, no financial baggage," Mr. Gana said.

"It is already about 40 years [old] and is still good for about 25 years, although that could still be lengthened through additional investments."

Located in San Lorenzo, Norzagaray in Bulacan, the Angat power plant consists of four main units, each with a 50-MW capacity, that were commissioned between 1967 and 1968. To augment its operation, the plant uses five auxiliary units including two turbines capable of generating an additional 28 MW. The turbines, owned by the Metropolitan Waterworks and Sewerage System, were not part of the bidding.

With the sale of the Angat plant, PSALM’s privatization level has hit the 87.82% mark for generating assets in the Luzon and Visayas grids.

Privatizing 70% of the generating assets and contracted capacities of Napocor is one of the preconditions for open access and retail competition in the power industry under Republic Act 9136 or the 2001 Electric Power Industry Reform Act (EPIRA).
The 70% independent power producer administrator privatization target will be breached following a successful sale of the contract for the Malaya plant. The Malaya auction is scheduled to take place on June 16. -- with Reuters

PAGASA's high-grade rain gauge installed

Manila Bulletin

To prevent a repeat of the massive flooding brought about by storm “Ondoy” in the city and neighboring areas, a high-grade automatic rain gauge was set up Wednesday in Montalban, Rizal for a reliable and upgraded flood forecast system in the metropolis.

The rain gauge in Barangay San Rafael in Montalban is positioned inside the cell site of the Smart Communications, Inc. (SMART) to automatically send rainfall data to the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) through SMS (short message service).

The initiative is part of a program of the Philippine Disaster Recovery Foundation (PDRF) to help upgrade the country’s flood forecasting system.

The PDRF, headed by PLDT chairman Manuel Pangilinan, is the private sector arm of the Special National Public Reconstruction Commission created in the wake of the devastation brought about by typhoons “Ondoy”, “Pepeng”, and “Frank”. PAGASA Administrator Dr. Prisco Nilo said that installing a rain gauge in areas where bulk of flood waters come will help the agency monitor rainfall.

"We have set up automatic rainfall stations to improve monitoring of rainfall for timely and reliable warnings,” Nilo said.

“We are the first in Asia to co-locate our rain gauges in cell sites mainly because we enjoy the support of the private sector through the PDRF and the telco industry,” he added.

The rain gauge, which costs about P500,000, is a grant from the Korea International Cooperation Agency (KOICA).

“In installing our rain gauge in cell sites, we are guaranteed that our equipment is secured because of uninterrupted power supply and efficient data is transmitted,” he said.

Dr. Susan Espinueva, chief of the PAGASA’s Hydrometeorological Division, said a memorandum of agreement (MoA) was signed last March 22 with telecommunication companies Smart, Globe, and Sun for the co-location of rain gauges in the cell sites.

She said that about 15 to 20 rain gauge stations will be set up within the year, particularly in the Pasig-Marikina River Basin to prevent the occurrence of massive flooding at the time of another “Ondoy.”

Montalban was among the areas devastated by floodwaters due to a month’s amount of rainfall that Ondoy dumped in Metro Manila in about six hours in September, 2009.

“We will push this project not only in Metro Manila but also in other parts of the country,” he said.

Wednesday, 28 April 2010

Photo update: Metro Manila Skyway

Sample shot from "Metalblock"

SEAIR expects to outpace local airline sector in sales growth

Jessica Anne D. Hermosa

SOUTHEAST Asian Airlines, Inc. (SEAIR) expects both passenger volume and sales to grow by a fifth this year, a recovery from the economic downturn in 2009, an executive said.

New routes and an uptick in demand should drive growth, SEAIR Vice-President for Commercial Affairs Patrick Tan told BusinessWorld in a chance interview.

“Performance in the first quarter was the best since 2007. We expect at least 20% growth in [passenger volume] and revenue in 2010,” Mr. Tan said.

This increase will be higher than the industry average, he claimed, as the carrier serves a niche market of luxury leisure travellers.

The projection is upbeat as the airline is coming from a low base in 2009 when the industry felt the full force of the global economic downturn which first hit in late 2008, Mr. Tan said without elaborating.

Flag carrier Philippine Airlines, for instance, is expected to report a net loss for the fiscal year that ended March 31. Cebu Pacific, meanwhile, has projected a 15% growth in passengers to 10 million for 2010 after recording a 30% increase last year.

SEAIR’s launch of three more routes within the year will also boost sales, Mr. Tan said, declining to specify the additional destinations.

Already, SEAIR covers 13 domestic destinations including Boracay island gateway Caticlan, which accounts for the bulk of sales, and Batanes, which enjoys fast-growing demand, Mr. Tan said. The other local destinations are Manila, Clark, El Nido, Baler, Tablas, Busuanga, Borongan, Taytay, Zamboanga, Jolo and Tawi-Tawi.

SEAIR also flies one international route to Kota Kinabalu, Malaysia.

The airline has been in operation since 1995 and claims to have flown almost three million passengers.

RP mounts biggest expo participation

Manila Bulletin

The Philippines will mount the country’s first biggest participation in an overseas exposition to be held in Shanghai, China from May to October this year as part of the government’s drive to boost the country’s products and services.

Trade and Industry Secretary Jesli A. Lapus said the country’s participation to the World Expo in Shanghai will not be limited to merchandize items but also on urban development and new approaches to creating eco-friendly society, lifestyle and working conditions in the 21st century following the show’s theme of “Better City, Better Life.”

A total of 30 Filipino enterprises are joining the event from the urban planning sector led by Palafox Associates, Chemrez Technologies from the industrial goods sector and 30 other exhibitors from the gifts and housewares, food, health and wellness, mining, information technology, creative industries, furniture and furnishings, education services and tourism.

“This will be the biggest Philippine participation in an overseas expo. China is a vital partner for the Philippines and we view the Philippine participation as an excellent trade opportunity to demonstrate what our SMEs exporters and entrepreneurs can offer the world market,” said Lapus.

“We will show the world how Filipinos can build cities using eco-friendly materials that had been in the country for many years,” said Arch. Jun Palafox. Founder and managing director of Palafox Associates, a multi-disciplinary firms of architects, interior designers, engineers and urban planners with a clientele from more than 30 countries.

Lapus said that over 100 countries and 50 international organizations are attending the expo, which has an expected 70 million visitors from China and 200 international exhibitors.

“The Philippine participation is part of the government’s drive to further enhance the promotion of Philippine products and services while also sustaining the country’s presence in the world market,” said Lapus.

The pitfalls of mathematical economics

Manila Bulletin

Those who want to be professional economists in this day and age often require more mathematical skills than some engineers and natural scientists. Probably only physicists like the famous John Nash and electrical engineers need more sophisticated mathematics than economists. Although I stand to be corrected, civil and industrial engineers do not need to learn all the tools of difference equations or do not have to invert 200 by 200 Matrices as some economists are required to do in their study of business cycles or of the inter-dependences of hundreds of sectors within the economy. It is revealing that precisely, a physicist like John Nash (of "beautiful mind" fame) obtained his Nobel Prize in economics.

The pioneer in the "mathematization" of economics in the last century was the late Paul S. Samuelson who died last December 2009 at the age of 94. As reported by Michael Weinstein in The New York Times (December 14, 2009), quoting another Nobel laureate in economics, Robert Solow (who was one of the readers of my doctoral dissertation at Harvard): When economists "sit down with a piece of paper to calculate or analyze something, you would have to say that no one was more important in providing the tools they use and the ideas that they employ than Paul Samuelson."

Shortly after his death, an article appeared in the Financial Times authored by Stephanie Flanders entitled "Nobel laureate who turned economics from scattered thoughts to science dies." According to Flanders, Samuelson spent a large part of his career organizing scattered thoughts on economic theories since at least the time of Adam Smith in the 18th Century: "Welfare economics, the theories of consumption, capital accumulation, economic growth, finance and international trade all became subject to his rigorous 'picking and arranging'. It is difficult to name an important postwar debate in economics in which Samuelson did not play a role. He once boasted: 'My finger has been in every pie.' "

This work of systematization started with the doctoral dissertation at Harvard entitled The Foundations of Economic Analysis which he submitted in 1941 when he was only 19 years old. The dissertation contained only a few pages full of mathematical formulas. As Samuelson himself wrote: "To a person of analytical ability, perceptive enough to realise that mathematical equipment was a powerful sword in economics, the world of economics was his or her oyster in 1935. The terrain was strewn with beautiful theorems begging to be picked up and arranged in unified order." Through his pioneering work, economics began to comply with the definition of a "science", i.e. an organized body of demonstrated truths. Before this effort of systematic organization of theories, economics was known as political economy, a branch of philosophy. In fact, the first practitioners of economics such as Adam Smith, David Ricardo, and even Karl Marx were, strictly speaking, moral or social philosophers rather than economists in the present sense of the word.

There is no question that through the pioneering work of Samuelson, economics came closer to the empirical sciences such as physics and biology, by putting economic theories in quantifiable forms that could be subjected to empirical testing, especially through the tools of econometrics. As Weintein wrote in his article for The New York Times, "His early work, for example, presented a unified mathematical structure for predicting how businesses and households alike would respond to changes in economic forces, how changes in wage rates would affect employment, and how tax rate changes would affect tax collections." Indeed, a whole generation of Filipino economists have helped successive Governments at least from the time of President Marcos to use the tools of mathematical economics to determine the effects of varying monetary, fiscal and trade policies on prices, income and employment. The majority of these economists have been the top professors of the U.P. School of Economics, many of them actually occupying high positions in the various Administrations.

Unfortunately, however, the application of mathematical reasoning to economic problems – which at bottom are still predominantly human – led to a certain hubris which made some leading economists to avoid or even disdain moral considerations in looking for solutions to economic problems. Take the famous Edgeworth box diagram used in Welfare Economics. Without boring the nonspecialists in the intricacies of this geometric tool, it is often used by those who advocate completely free markets to demonstrate that the highest production from the available resources and the highest human satisfaction from limited consumer goods could be attained by allowing individuals to freely trade with one another. The starting point, however, could involve the rich controlling most of the resources and goods available. According to traditional welfare economics, the question of distribution of income and wealth is not to be decided in economics but in political science. Economists cannot make "value judgments" about what income or wealth distribution is just.

But somewhere along the way to actual policy implementation, the defenders of free market economics assumed that any government intervention is inefficient. Thus, the actual state of the very unequal distribution of income and wealth in most countries--including the United States--was unwittingly accepted as a given. Through the tools of mathematical economics, the free market advocates continued to argue that markets are self-correcting and automatically lead to highest levels of production and consumer satisfaction. In fact, it was also Samuelson who laid out the mathematics of stock price movements, an analysis that won for his student Mr. Robert Merton and Myron S. Scholes the Nobel Prize. These two designed formulas that Wall Street analysts use to trade options and other complicated securities known as derivatives. Well, everyone now knows that these "derivatives" were a major cause of the Great Recession in 2008 to 2009.

To avoid the pitfalls of mathematical economics, the practitioners of the science should also include in their assumptions that in the real world there are individuals who can be motivated by altruistic goals, i.e. that there are owners of business who can sacrifice profit in order to promote the welfare of their employees, protect their consumers from harmful products, or clean up the environment. They should also take account of the fact that there are necessary and efficient programs of intervention of the Government in promoting the welfare of the poorest of the poor who are left out by free market forces because they are either too hungry, too unhealthy, too unschooled, too unskilled, or too unhoused to be able to benefit from free market forces. Even if it means that the quantitative economists will have to reembrace the former profession of the political economists, despite their discomfort with "normative" statements, we need a new approach to studying the problems of poverty and unemployment. In this regard, with due respects to Paul Samuelson, I would like to recommend to the young economists today to consider as their role model another Nobel Laureate, Amartya Sen, currently a Professor of Economics at Harvard University, who is as steeped in mathematical economics as Samuelson, but also gives much importance to philosophy, anthropology, political science and sociology in his analysis of economic problems, especially in the developing countries of the world. For comments, my email address is

Tuesday, 27 April 2010

QTV: Smartmatic dismantles printer at NPO

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Ship delivering PCOS machines arrives in Basco, Batanes

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UnionBank 1st-quarter profit up 51% on lower interest expense

Erik de la Cruz
Business Mirror

ABOITIZ-LED UnionBank of the Philippines, the country’s eighth-largest bank in terms of assets at the end of 2009, posted a 51-percent increase in profit for the first quarter of 2010 as lower interest expense helped boost net interest income.

Figures released on Monday showed the bank’s net income for the three months to March hit P855.2 million, compared with P565.2 million for the same period last year.

Net interest income grew 19 percent to P1.72 billion despite a 5-percent drop in interest income on loans and receivables, as interest expense declined by 25 percent to P1.18 billion.

Deposit liabilities dropped by 4 percent, or about P7.7 billion, to P186.8 billion at the end-March from end-2009.

Net loans and other receivables contracted by 16 percent to 84.6 billion. This contributed to the 3-percent drop in resources to P236 billion.

Trading and investment securities contributed P1.08 billion to interest income, up 10 percent compared with P984.4 million for the same period last year.

Additional provisions for impairment losses of P106.7 million were lower compared with P171 million booked in the first quarter of 2009. Net interest income after impairment losses, thus dropped to P1.6 billion.

The bank also booked lower income from service charges, fees and commissions, which dropped 18 percent to P152.5 million.

Trading gains rose 55 percent to P213.7 million.

Earnings per share improved to P5.33 from P3.52 in the same quarter last year.

UnionBank, which is partly owned by state-administered pension fund Social Security System and Insular Life Assurance Co. Ltd., recently opened three new branches, increasing its total branch network to 178.

Shares in UnionBank rose 50 centavos, or 1.2 percent, to P43 on Monday. The bank will pay on June 4 to shareholders as of May 11 a cash dividend of P2.20 per share.

Profits of DMCI Holdings nearly triple in ’09

N. J. C. Morales

PROFITS of Consunji-led DMCI Holdings, Inc. almost tripled last year to P4.683 billion on the back of huge earnings from mining, real estate and water distribution.

“Operational results from all business segments showed significant improvements from the previous years,” DMCI Holdings said in a report to the Philippine Stock Exchange.

Growth was attributed to higher billed volumes and increased tariff rates charged by the water utility; new big-ticket projects for construction; more real estate units sold; and higher coal exports.

DMCI is into water distribution with Metro Pacific Investments Corp. under Maynilad Water Services, Inc., which operates the west zone concession of Metro Manila.

Profits of the water utility ballooned to P1.675 billion last year from just P81 million in 2008.

Net income from coal mining operations on Semirara Island through DMCI Mining Corp. also jumped to P1.164 billion from P460 million year on year.

Real estate, through D.M. Consunji, Inc. and DMCI Homes, also registered higher profits, at P1.02 billion last year from P758 million in 2008.

Shares in DMCI Holdings shed P0.25 each yesterday, closing at P15.25 from P15.50 on Friday.

OFWs snap up government’s dollar, euro bonds

Louella D. Desiderio

OVERSEAS Filipino workers (OFWs) and their beneficiaries, seeking attractive investment vehicles, snapped up at the multi-currency retail Treasury bonds offered by the government.

BDO Capital and Investment Corp. President Eduardo V. Francisco said in a text message yesterday that the reception of the OFWs to the bond issue was very strong.

“(It was) very strong as expected. Lots of OFW beneficiaries came to our branches,” he said.

BDO Capital and Investment Corp. is one of the selling agents of the euro- and dollar-denominated bonds.

The other selling agents -- BPI Capital and Investment Corp., the Development Bank of the Philippines, First Metro Investment Corp., ING Bank, Land Bank of the Philippines, Metropolitan Bank and Trust Co., and the Philippine National Bank -- either declined to comment or were unavailable for interviews yesterday.

National Treasurer Roberto B. Tan said in a telephone interview yesterday that over $400 million has been raised from the sale of three-and five-year retail Treasury bonds denominated in US dollar and euro.

“We have almost reached the full amount of $500 million,” he said.

The government has been cleared to sell $1 billion in dollar- and euro-denominated retail bonds but has decided to sell just half of this amount.

It targets to sell $400 million worth of dollar bonds and 75,000 worth of euro bonds. The offer period, which began April 21, ends today.

Mr. Tan, however, did not provide a breakdown of how much has been raised so far from both dollar and euro bonds.

OFWs and their families, however, can still buy the bonds from the selling agents until next month.

“OFWs have 30 days (from April 21) to buy the bonds,” Mr. Tan said.
Twenty percent of the $500-million bond offer has been allocated to OFWs, and the rest to institutional investors.

Overseas Filipinos who buy the bonds will be exempt from the tax on interest income. -- Louella D. Desiderio

Ayala Land Inc. partners with El Nido to open new resort by mid-2011

Miguel R. Camus
Business Mirror

REAL estate giant Ayala Land Inc. (ALI) is making good on its plan to grow its tourism portfolio, disclosing on Monday a new partnership with a veteran resort operator in Northern Palawan.

In a filing with the local stock exchange, Ayala Land said it is setting up a joint venture with Asian Conservation Co.

To be 60-percent owned by Ayala Land, the venture is in line with the company’s intent to develop “responsible tourism destinations” in the area.

Asian Conservation, through its subsidiaries under the Ten Knots Group, owns and operates the high-end El Nido Resorts in Lagen and Miniloc Islands.

Ayala Land said the partnership would serve as a vehicle to start new developments in Palawan.

In particular, a company spokesman said the venture is now focusing on a new “high-end” El Nido resort in Pangulasian Island, which was targeted to open by mid-2011.

“We are excited to have Asian Conservation as our new partner, not just for their unique experience in managing island-resort properties, but also for their strong adherence to a quadruple bottom line approach in preserving the environment around their resort properties,” said Antonino Aquino, Ayala Land president and chief executive officer.

Ayala Land first ventured into the resort and leisure segment with Anvaya Cove, a premiere residential enclave and resort in Morong, Bataan. The company quickly followed this with a similar development called Amara in Cebu.

“We are pleased to have ALI as our strategic partner, given their strong corporate philosophy on sustainability and their proven track record of building world-class real estate projects,” said Vicente Perez, chairman of Asian Conservation.

The coming financial disaster

John Mangun
Outside the Box
Business Mirror

‘The Bank for International Settlements or BIS is an international organization which fosters international monetary and financial cooperation and serves as a bank for central banks. The BIS fulfills this mandate by acting as a forum to promote discussion and policy analysis among central banks and within the international financial community, a center for economic and monetary research, a prime counterparty for central banks in their financial transactions, and agent or trustee in connection with international financial operations. Established on 17 May 1930, the BIS is the world’s oldest international financial organization.”

Last month, the BIS released a short 26-page working paper titled,“The future of public debt: Prospects and implications” by Stephen G. Cecchetti, MS Mohanty and Fabrizio Zampolli [CLICK HERE TO DOWNLOAD FIRST EDITION--FEBRUARY 2010. CLICK HERE TO DOWNLOAD REVISED EDITION--MARCH 2010]. I mentioned this report in a previous column last week. The facts and conclusions of this report are nothing less than staggering in their implications for the future.

The economic prosperity of the developed countries over the last 20 years is an illusion. That prosperity was paid for with borrowed money that cannot be repaid. In order to protect the global financial system, debt levels have exploded in the last two years. The current debt levels are unsustainable, virtually unsolvable, and will inevitability lead to a fundamental change in the world economic structure.

Assume you earn P1 million per year. That makes you a high-roller, income-wise, by local standards. Assume your debt load is P600,000, which is probably on the low side. Your annual debt repayment would be about P120,000. As long as your income remains the same and you do not add more debt, you are in pretty good financial shape.

Now assume your debt is P1 million and your repayment is P200,000. Your financial condition is marginal and a little tight.

Go further and raise your debt to P2 million with repayment at P400,000 and you are in big trouble.

Perhaps the most fundamental indicator of government financial health is the debt-to-GDP (gross domestic product) ratio—how much debt is a government carrying in relation to the total economic output of the country. Of course, this does not take into account the “income” the government earns from taxing the GDP, but that is another story. But basically this debt/GDP ratio is an indication if a government is borrowing ahead of the nation’s economic production. The financial fear is that a nation carrying too much debt will default, causing an economic collapse.

The Philippines Debt/GDP is about 60 percent. Many developed nations exceeded 100 percent after World War II and none defaulted. Japan has been running at 150 percent for years and it has not defaulted. Greece is now at 130 percent and will default without immediate help. The US is at 90 percent, the UK at 80 percent, with Asia at 40 percent. So is there a reason for concern? Most definitely.

First, the amount of government debt has increased by 75 percent to 100 percent in the developed countries over the last two years. Debt bubbles have happened before, but not combined with the impact of a major economic slowdown. Previously, the problems of exploding debt bubbles were solved by economic growth. This time the economic growth was fueled by the debt bubble. The past 10 years has been like maxing out one of your credit cards and calling that an increase in income. Never in history has so many large economies borrowed money and called it economic growth. For example, all those houses that were built in the West that employed tens of millions were paid for with borrowed money. Cut off the credit like now and all those jobs disappear, perhaps never to return, because there is no real wealth creation to keep the economies going.

Further, in the West and particularly the US, hundreds of billions of dollars were borrowed to buy goods (primarily from China) that created little, if any, home-country economic activity. What is going to generate the income to pay that debt? Every business owner knows this truth. You never, if possible, borrow money unless you can use that money to make more money.

Second, if you have ever run into trouble with your personal credit cards, you know exactly what I mean. Borrowing creates the illusion of wealth. You use your credit card to buy that huge imported refrigerator and wall-size TV, in addition to sensibly fixing up your house, increasing its value. But the big electricity bill that comes in every month must be paid for with real income. And if you do not have the income to cover the additional expenses, you borrow more.

Governments and people think exactly the same. Hard-earned money is spent wisely; too often, borrowed money is spent extravagantly. During the borrowing boom of the last two decades, governments created spending programs that can only be funded with borrowing. There is not enough tax revenue—income—to cover these expenditures.

There are other factors in this situation that I will discuss on Thursday, as well as looking at the long-term consequences and the solutions that governments may resort to. And, of course, we must look at where the Philippines figures into this global chaos. This is a grave matter that is changing the world we thought we knew.

In the meantime, if you would like a soft copy of this BIS paper, send me an e-mail. I guarantee it is worth your time to read it.

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Suited up for an agenda

Business Mirror

ONE of the most interesting stories that Filipino first-timers to the United States like to share is going shopping, especially in those outlets in the suburbs where the best brands may be bought at bargain prices, and picking out clothes with the pride of someone eagerly anticipating being seen in them.

On one such trip, one journalist once recalled a first-time sojourn to Secaucus outlet in New Jersey and picking out several stylish Geoffrey Beene shirts, and then being taken aback, but pleasantly surprised, by the label: “Tailored in the Philippines.”

Of course, the reactions to such tags may vary depending on the mindset of the shopper. Some tourists get disappointed looking for something indigenous to a place, say, Australia, and finding 8 out of 10 souvenir items being made in China. That’s globalization for you. But back to the Geoffrey Beene shirts. As many Filipino tourists and shoppers have discovered through the years, a good chunk of the branded items, especially clothes, that they’d dreamt of buying in America were fashioned or crafted by their countrymen’s hands. Not surprising, considering the presence of so many export-processing zones here.

Now, with the recent elevation to the US Congress of the proposed Save Our Industries (SAVE) Act, labor leader and former senator Ernesto Herrera sees great economic opportunity in the sense that the bill enables the freer entry of Philippine-made garments into the highly lucrative US market.

“We are counting on the next Philippine president to move fast so that the US bill may hopefully be enacted before the November midterm elections there,” said Herrera, secretary-general of the Trade Union Congress of the Philippines, in a statement at the weekend.

While the bill is envisioned to “save” ailing American textile producers, it would also benefit the Philippines’ labor-intensive garments industry in a big way, according to Herrera, former chairman of the Senate Committee on Labor, Employment and Human-Resources Development.

He said the bill will “allow Philippine-made garments to enter the US market with considerably fewer restrictions, as long as the clothes use American textiles,” Herrera said.

He said ready to wear (RTW) clothes made in the Philippines using American textiles would enjoy definite advantages such as lower duties, thus making them even more price-competitive when they reach US stores.

“This will surely encourage more apparel makers from the US to build new factories here, bring in American textiles, harness skilled Filipino workers to design, cut and sew the garments, and then re-export the RTW clothes back to the US,” Herrera said. This is a throwback to the 1990s, when many such US firms were tapping factories in the Philippines to fashion the garments sold in US stores, including, yes, the Geoffrey Beene line then.

Per Herrera’s estimates, the local garments industry, now employing some 150,000 Filipinos, could easily add 100,000 new jobs once the US bill is enacted. He noted that local contract manufacturers for American apparel makers would also benefit, Herrera said.

“The Philippines already has a solid reputation when it comes to the manufacture of garments meant for American stores, particularly the high-end ones,” according to Herrera.

Such great economic potential, though, could be lost if the next administration after May 10 fumbles and fails to lobby the US Congress for the SAVE bill. Here’s one more vital addition to the proposed agenda of the new president, whoever he may be. With no pun intended for those great Filipino tailors of global brands, it seems this next president has his work cut out for him on this issue, at least.

Monday, 26 April 2010

PGMA to inaugurate Agusan Sur Jumbo Bridge

VERUELA, Agusan Del Sur – President Gloria Macapagal-Arroyo will inaugurate tomorrow (Monday, April 26) the P78.9 million San Jose Vicente A. del Rosario Jumbo Bridge, a project intended to improve transportation means and spur the socio-economic development of this municipality and its neighboring towns.

The Chief Executive will be welcomed by Agusan Del Sur Governor Maria Valentina Plaza, Veruela Mayor Salimar Mondejar, Agusan del Sur former Governor Adolf Edward Plaza, Barangay Chair Arnold Dairo and DAR-13 Director Faisar Mambuhay.

The President will then lead the inaugural drive-through along the 140 linear meter long bridge and later get a project briefing and then followed by short public program.

Some 5,000 Agusan del Sur residents as well as local officials and farmers are expected to attend the event.

The road project is a single lane – 140 lms PSCG (pre-stressed concrete girder) bridge constructed over the Agusan River with bridge approaches, slope protection and vehicles guard rails. The bridge is composed of four spans of 35.00 lms.

With the construction of the bridge, travel of people and products from Maharlika highway going to Veruela and back will be reduced by about 60 kms. This will lessen transportation costs and open investment opportunities not only in the area but also with its neighboring towns like Loreto, Sta. Josefa and Trento. (PND)

PGMA to inspect Tawi Tawi road project

Simunul, Tawi Tawi—President Gloria Macapagal-Arroyo will inspect tomorrow (April 26) the newly-nationalized circumferential road in this island whose conversion from a provincial road under Republic Act No. 4659 is expected to accelerate the P75 million road project.

The President is the first Chief Executive of the country to visit this 6th class island-municipality--- one of 11 island towns of Tawi Tawi province.

This is also her first time to visit this island town as well.

The President is expected to land at Sanga Sanga airport in Bongao, the provincial capital, where she will be met by Gov. Sadikul Sahali and Lone District Rep. Nur Jaafar.

The President will be joined by Public Works Secretary Victor Domingo and Press Secretary Crispulo Icban Jr.

Upon landing, the President and party will walk toward the multipurpose center where a short program will be held.

Other than President Arroyo, the only high national leader who visited Simunul was the late President Marcos, but the latter was then the senate president when he reached Tawi-tawi, according to Simunul Mayor Benzar N. Tambot.

The circumferential road measures 19.4 kilometers and spans 15 barangays with a total population of 38,239.

Basic produce of these remote barangays are fish, seaweeds, copra and other agricultural commodities.

Tawi Tawi, the country’s southernmost area, is known for its marine products such as sea shells, sea cucumber, sea urchins and abalone. During low tide, goods could hardly be brought to the market due to poor roads. Its current road system of only 25 kilometers is a combination of concrete and dirt road. It has four secondary ports.

Worth mentioning about the province is its high literacy rate of 80 percent with 21 elementary schools and 7 high schools. Around 99.85 percent of its population is Muslim and the rest Christians. The dialect is Sinama and the ethnic group is called Sama.

Its main tourism attraction is the pillar remnant of the 629-year old Sheik Makdum Mosque and its pristine beaches like La Island, Venus Tonggusong, Bakong and Sangay Siapo.

Simunul’s fishing grounds are the Bongao Bay and Sibutu Strait which thrive with tuna, grouper, flying fish, snappers, mullet, parrot fish, squids, octopus and lobster. (PND)

Villar mom comes out to defend son

Maila Ager

MANILA, Philippines – (UPDATE) An emotional mother of presidential candidate Senator Manny Villar came out in public for the first time Monday to defend her son against allegations that he was a liar, especially on his claims that he came from a poor family.

When asked why she decided to face the media, Curita “Nanay Curing” Villar broke into tears, saying, "Kasi aping-api na ‘yung anak ko e [My son is being persecuted]."

Asked how she knew that her son was being criticized, she said, "Kasi nababasa sa dyaryo e. Nasasaktan din mga katapid niya. Minsan kinuwento sa akin, nasasaktan din naman ang mga kapatid niya [They read it in the newspapers. His siblings are also hurt, I am told that his siblings are also hurt]."

Nanay Curing, 86, has been blind since 2007.

"Diyos ko kayo na lang po ang bahala [My God, I leave it up to you],” she said in between tears. "Mahal na Birhen ikaw na ang tumestigo sa aking mga anak...kayo na po ang magtanggol sa mga anak ko [Virgin Mary, you be the witness for my children… please defend them]."

"Kawawa naman po siya. Nagtiis na nga po ako ng hirap, naapi na ako sa palengke pati ba naman ang anak ko? Pati ba naman ang anak ko, naapi pa ngayon? [My poor son. We endured poverty. I was oppressed in the public market and now even my son? Even my son is being maltreated now]." she said.

"Akala nyo ba di ako nasasaktan dun sa pinagsasabi sa anak ko? Halos ikamatay ko na. Halos ikamatay ko na [You think I don’t get hurt with what is said about my son? It almost killed me. It almost killed me]," Nanay Curing as she broke down again.

It was at this point when the senators' sisters – Gloria, Lourdes, Cecille and Vicky – stopped the interview.

While Lourdes was being interviewed after the press conference, Gloria lost her temper when a reporter asked the reason for the briefing, saying that this might be misconstrued that the mother was being used by Villar in his campaign.

"Patay na kanyang ina, sinasama pa...Buti nga nanay ko nakakapagtanggol pa sa kapatid ko. ‘Yung ina nila patay na ginamit pa nila di ba? [Their mother is dead but they still include her… Our mother is still alive so she can defend my brother. Their mother is dead but they still use her)" said Gloria, who was apparently referring to Villar's rival, Senator Benigno "Noynoy" Aquino III and his late mother, former President Corazon Aquino.

"Sino ba ang unang nanggamit? Hindi ba lahat ng posters niya? Andun ang nanay at tatay niya, so kami ngayon lang kami lumilitaw kasi sobra na, personal na [Who used their mother first? Didn’t they put their mother and father on all their posters? We came out just now because it’s all too much, it’s getting personal]," she lamented.

"Bago nila kami tapunan ng putik, tingnan muna nila yung mga putik sa mukha... Hindi kami nanggagamit ng aming magulang, sumasagot lang kami sa kanila. Sila ang nauna [Before they hurl mud at us, they should look at the mud on their own faces. We don’t use our parents, we are only answering them. They did it first]," she further said.

Gloria also criticized television networks ABS-CBN, GMA7, and other media practitioners for allegedly being unfair to her brother.

She specifically pointed to GMA7 personalities Arnold Clavio and Winnie Monsod.

"Bigyan niyo naman ng tsansa kapatid ko. Alamin niyo naman ang katotohanan bago kayo magsalita. Yang ABS-CBN na ‘yan masyadong unfair sa kapatid ko yan, Channel 7 very unfair sa kapatid ko...[Give my brother a chance. Find out the truth first before you start talking. ABS-CBN and Channel 7 have been very unfair to my brother],"she said.

"Masyado kayong unfair, you media people, you are unfair. Yang si Clavio na yan si Monsod na yan, my God, ‘di nila kami kilala para sabihin yan [You are so unfair, you media people, you are unfair. Clavio and Monsod, My God, they don’t know us for them to be able to say those things against us]," she said.

"Yang Channel 2 na yan kung apihin yang kapatid ko sa media, kung bigyan ng airtime ang kapatid ko, hindi makapagtanggol ang kapatid ko sa mga sinasabi ng kalaban e. Ang airtime ng mga kalaban napakatagal, ang kapatid ko pinapasasdahan lang nila ang mukha [Channel 2, they mistreat my brother through media. They don’t give him enough airtime to defend himself against the accusations of his opponents. The other camp’s airtime is so long while they only show my brother’s face in passing]," she further said.

Instead of mudslinging, Gloria said presidential candidates should focus on track-records and accomplishments

After calming down, Nanay Curing again talked to the media and even rendered a song for them.

She gave a few lines of the song "Stardust," which Gloria said her mother would sing with the senator during family gatherings.

Nanay Curing ended her interview with one appeal to the media, "Pakiusap ko lang, pakiusap ko lang, maniwala kayo sa kanya [Villar]. Galing sa puso niya ang kanyang itutulong. Di po paimbaaw. Maawa po kayo sa amin. Mahirap man kami, mayroon kaming pusong maawain. Maawa po kayo sa anak ko [My only request is for you to believe in him. He will help from the bottom of his heart. Have pity on us. We may be poor but we have merciful hearts. Have pity on my son]."

BDO Leasing posts 29 % profit growth for Q1

Erik de la Cruz
Business Mirror

THE reporting season for first-quarter corporate earnings has begun on an upbeat note in the Philippines, with BDO Leasing and Finance Inc.—a listed unit of tycoon Henry Sy’s Banco de Oro Unibank—posting a 29-percent profit growth on higher revenue.

BDO Leasing, in a regulatory filing, said net income for the three months to March jumped to P69.6 million from P53.9 million for the same period last year. It has a wholly owned subsidiary, BDO Rental Inc., which is engaged in renting and leasing of equipment.

Revenue grew 24.5 percent to P583.6 million, 92 percent of which accounted for interest, discounts, rent and service fees. This was primarily due to the increase in lending to P12.4 billion from P8.8 billion in March 2009.

Interest and financing charges amounted to P80.2 million, consisting of financing charges on borrowings totaling P66.7 billion and interest expense on leased deposits of P13.4 million.

“Financing charges increased by P0.8 million versus March 2009’s P81 million due to the increase in bills payable from P4.1 billion in March 2009 to P6.4 billion in March 2010 to fund business growth,” the company said.

Cost of borrowings, however, de-creased from a range of 5.6 percent to 7.4 percent in March 2009 against a range of 4.3 percent to 4.6 percent in March 2010. Total provision for credit losses amounted to P50 million as of March 2010 compared with P15 million a year earlier.

BDO Leasing has nine branches located in Makati City, Cagayan de Oro City, Cebu City, Dagupan City, Davao City, Iloilo City, Dasmariñas, Angeles City and San Pablo City.

It competes with other financing companies affiliated with other banks, independent financing companies, and other financing companies affiliated with diversified financial-services firms.

Its principal competitors are Orix Metro Leasing & Finance Corp., a unit of Metropolitan Bank & Trust Co.; BPI Leasing Corp.; LBP Leasing Corp.; Japan PNB Leasing & Finance Corp.; UCPB Leasing and Finance Corp.; First Malayan Leasing and Finance; and Allied Leasing.

BDO Leasing had total assets of P13.5 billion at the end of March, representing a 22-percent growth over year-ago size of P11.1 billion and reflecting the increase in net loans of P2.3 billion.

It posted a 61.4-percent revenue growth for 2009 but net income dropped to P300 million, compared with the previous year’s bottom line of P366 million, because of depreciation costs and “more conservative” provisioning.

The company last year obtained regulatory approvals to issue up to P8 billion of short-term commercial papers (STCPs). It planned to use the proceeds to repay maturing obligations, a move that will bring down funding costs, and to fund new ventures.

In December Philippine Rating Services Corp., or PhilRatings, announced it had assigned a “PRS 2 minus” rating to the company’s proposed debt issue. The indicates the company’s “strong” capability to pay both the principal amount and interest on the STCPs.

According to PhilRatings, the rating took into account the prospective borrower’s “solid” market position, “sound” capital base, continuing benefits being derived from its synergy with parent company BDO, as well as the “relatively positive” prospects for the local leasing and finance industry.

BDO Leasing has the largest asset and equity base and is seen as the least leveraged among the country’s bank-affiliated leasing and finance companies.

Ayala, Lopez firms rank tops in corporate governance

Miguel R. Camus
Business Mirror

LISTED firms under the Ayala and Lopez groups continued to dominate the top slots in the 2009 Corporate Governance (CG) scorecard, organized every year by an association of professional company directors.

In a statement, the Institute of Corporate Directors (ICD) released a list of 30 top-ranking public companies, double the number in 2008.

In a phone interview, ICD executive director Marlon R. Marquez said more firms took the CG scorecard last year or 214 listed firms, from 169 in 2008.

The Philippine Stock Exchange has 250 publicly listed companies.  

The list included Ayala Corp., Ayala land Inc., Bank of the Philippine Islands, Cebu Holdings Inc., Cebu Property Ventures and Development Corp., Energy Development Corp., First Gen Corp., First Philippine Holdings Corp., Globe Telecom Inc., Manila Water Co. Inc. and Philippine Long Distance Telephone Co.

Companies that managed to score between 90 percent to 94 percent include: Aboitiz Equity Ventures Inc., Aboitiz Power Corp., Aboitiz Transport System Corp., ABS-CBN Broadcasting Corp., Alaska Milk Corp., Benpres Holdings Corp., Centro Escolar University, China Banking Corp., GMA Network Inc., Highlands Prime Inc., Panasonic Manufacturing Philippines Corp., Petron Corp., Philippine Savings Bank, Security Bank Corp., Semirara Mining Corp., SM Development Corp., SM Investments Corp., SM Prime Holdings Inc. and Union Bank of the Philippines Inc.

“We are very happy with the results as they show continued improvement in compliance and corporate governance practices among our listed companies,” said Jesus Estanislao, ICD chairman, in a statement.

Estanislao called on companies to go beyond “mere compliance.

“On this end, the ICD is now working with select CG top-ranked companies on a corporate governance improvement pathway, cultivating a real governance culture within their organizations through a Performance Governance System,” he said.

Last year, ICD expanded the project and launched separate scorecards for banks, government-owned and controlled corporations/government financial institutions and insurance companies. 

Now on its fifth year, the CG Scorecard project is jointly administered with ICD’s partners,  namely: the Securities and Exchange Commission, the Philippine Stock Exchange, the Institute of Internal Auditors of the Philippines, the Ateneo Law School and the Center for International Private Enterprise.

ICD grades firms based on disclosure and transparency (25 percent), board responsibilities (25 percent), rights of shareholders (20 percent), equitable treatment of shareholders (20 percent) and role of stakeholders (10 percent).

The companies are allowed to use a template survey to conduct a self-assessment, which will be reviewed by a team from the Ateneo Law School and then a third validator, before going through analysis then ranking.

In 2009, 11 firms scored 95 percent and above.

BM Editorial: Whiff of fresh air

Business Mirror

EVERY once in a while, some refreshing bit of news lifts our collective spirits, giving rise to hope that despite the relentless dose of bad news about corruption and incompetence in government and the sense of national drift, some progress is being made in little pockets here and there.

One such refreshing bit of news is the signing of the Philippine Technology Transfer Act of 2009, envisioned to hasten the process of technology commercialization and broaden the scope of protection of intellectual-property (IP) rights in government research and development institutions, or RDIs.

Expectedly, leaders of the science community in the Philippines, led by the Department of Science and Technology, which has always been in an uphill struggle to hasten this process of converting technological gems into commercial successes—thus attaining human progress, boosting economic growth and rewarding talent—would be elated by the signing of the law. Officially, it’s known as Republic Act 10055 (An Act Providing the Framework and Support System for the Ownership, Management, Use, and Commercialization of Intellectual Property Generated from Research and Development Funded by Government and for Other Purposes), or simply the Philippine Technology Transfer Act of 2009.

“We are optimistic that this new law, a landmark policy on technology transfer, will revolutionize the commercialization of technologies generated by researches funded by taxpayer’s money,” Science Secretary Estrella Alabastro was quoted as saying.

Secretary Alabastro hopes that by fast-tracking the journey of technologies to the market, they can also plug brain drain and encourage students to pursue research and development (R&D) studies.

Yet another loss is represented by the fact that technologies generated through public funds remain untapped or are being archived in laboratories around the country.

Before the law, technology transfer was characterized by a lack of well-defined and unifying policy on technology transfer; insufficient investment in technology transfer and commercialization; weak private-public collaboration in R&D and commercialization; and lack of well-defined IP regimes in R&D institutions.

Not surprising, the number of technologies developed by local researchers and protected under the patent system is alarmingly low.

The signing of the technology- transfer law is, however, just a first step. Crucial challenges remain, not least of which is the perennial lack of resources for fast-tracking the process and for encouraging more R&D work even as the ripe-for-market technologies are being shepherded; and very basic, as always, the need to support greater science education in the country. On the last one, it’s ironic that many Filipinos who had the good fortune of getting higher education and training abroad have achieved so much; for the most part, it’s the First World that has benefited from their talent, being their sponsors.

It is hoped that things will change with the new law.

Sunday, 25 April 2010

New oil field ready in Q2

by Alena Mae S. Flores
Manila Standard

Nido Petroleum Ltd. of Australia is set to put the Tindalo oil field into commercial production within this quarter with the arrival of a drilling rig in northwest Palawan next week.

Nido Petroleum said in a disclosure to the Australian Stock Exchange Friday that the Aquamarine Driller rig completed a stopover in Singapore and was now headed to the Tindalo oil field.

“The rig will be offloaded... and towed to the Tindalo location by the support vessels Pacific Battler and Pacific Challenger,” said Nido Petroleum deputy managing director Joanne Williams.

She said the company had mobilized key personnel and equipment to join the rig at site off northwest Palawan. “All other equipment is ready for service and completing its mobilization to site on schedule,” she added.

Nido Petroleum owns a 42.4- percent interest in the Tindalo exploration block covered by Service Contract 54-A. Kairiki Energy Ltd., another Australian company, holds 30.1 percent while Trafigura Ventures III BV, one of the largest independent trading commodity firms, owns 15 percent. TG World Corp. holds the balance of 12.5 percent.

Nido Petroleum earlier said it expects to draw first oil of around 7,000 to 15,000 barrels per day from the Tindalo field. It said it was investing $20 million to bring the first well into production.

Nido Petroleum discovered the Tindalo-1 well in October 2008 before plugging it for future production. It said the Tindalo field had estimated recoverable oil reserves of 5.1 million barrels.

Nido Petroleum owns a 22.879 percent in the oil-producing Galoc oil field within SC 14, also off northwest Palawan. Galoc started production in October 2008.

Nido Petroleum in February awarded two contracts for the supply of major equipment required by the Tindalo oil field development project.

It signed contracts with Knutsen Shuttletanker Pool AS for the floating storage and offloading vessel and Weatherford Asia Pacific Pte. Ltd. for the production processing equipment.

Williams said the awarding of the contracts kept the company on track to deliver first oil by the second quarter.

BDO sees ’10 profits surging on construction loans

Manila Standard

Banco de Oro Unibank Inc., the lender owned by Henry Sy, the richest man in the Philippines,
expects earnings to climb for a second year in 2010 as power companies and home builders increase borrowing.

The bank’s earnings of about P2 billion in the last two quarters of 2009 were “sustainable,” Nestor Tan, the bank’s president, said in an interview. At that rate, Banco de Oro’s 2010 earnings would jump by at least 30 percent from P6.04 billion a year earlier, according to Bloomberg calculations.

Bangko Sentral forecasts lending growth of 10 percent or more this year as loan demand and spending recover from the global credit crisis and the collapse of Lehman Brothers Holdings Inc. Power outages across the country have also boosted the need for construction funding as utilities, including Aboitiz Power Corp., plan to build plants.

“We’re looking at higher profit, putting the crisis and Lehman behind us,” Tan, 52, said Thursday. “Big-ticket items” like spending on energy and infrastructure projects would probably come after the May 10 elections, he said.

Aboitiz Power, the country’s second-largest power distributor, has said it may spend $2 billion to build and buy power plants in the next three years after low water levels across the country reduced output at hydroelectric plants. San Miguel Corp., the biggest food and beer maker, this month said it could access as much as $8 billion in funding as it expands in energy, rail and toll roads.

Banco de Oro will raise $250 million from a share sale ending Friday, boosting the ratio of capital to risky assets to 14 percent from about 12.5 percent, Tan said, to support loan growth of 15 percent to 20 percent.

Armed with fresh capital, the bank was targeting smaller lenders to add to its network of 735 branches and accelerate lending growth, he said. The bank has increased its assets by almost 14 times since 2000 through acquisitions.

“We’re still looking at acquisitions,” Tan said, adding that Banco de Oro was in discussions with Export & Industry Bank Inc. and had “exploratory talks” with Asiatrust Development Bank.

Palace names five officials to lead transition commitee

by Joyce Pangco Pañares
Manila Standard

THREE Cabinet officials will join the transition committee formed by President Gloria Arroyo to ensure a smooth turnover of power to the next president on June 30.

Presidential Management Staff director general Elena Bautista said National Economic and Development Authority director general Augusto Santos, Budget chief Joaquin Lagonera, and Press Secretary Crispulo Icban Jr. will form part of the transition committee.

Bautista said she expected the President to sign the administrative order organizing the committee next week.

A draft copy says Executive Secretary Leandro Mendoza will serve as chairman while Bautista will be the vice-chairman.

Icban has already formed his own team that will spearhead the transition process at the Office of the Press Secretary.

Press Undersecretaries Rogelio Peyuan and Romeo Junia were designated chairman and co-chairman for the office’s transition team.

President Arroyo, who has already made a public call for election observers to monitor the conduct of the country’s first automated national polls on May 10, said ensuring a smooth transition was her most important legacy.

“There is no more important legacy than to leave the nation with a free and fair elections and a smooth transition to a new government. Our people deserve to have confidence that their vote counts and that our democracy works,” she said.

“Let us do everything to make sure the new president and his team hit the ground running when they assume office.’’

The transition committee is expected to plan the June 30 turnover ceremony, introduce career officials to the new president, inventory Palace property, and brief officials on Palace policies.

Sumifru builds Davao agro-industriall ecozone

Manila Bulletin

Sumifru Inc., a joint venture of Sumitomo Corp. of Japan and businessman Paul Cuyegkeng, is establishing a special agro-industrial economic zone in Davao City to beef up its banana and vegetable exports.

Company adviser Miguel Varela told reporters at the sidelines of the conclusion of the two-day 31st National Employers Conference at the Manila Hotel said the company is expanding its existing banana plantation in Davao City .

The company is expanding its Davao banana plantation with P5.5 billion worth of investments. In 2004, Sumifru poured in P2.1 billion for the existing Davao farm.

Varela said the company’s proposed special agro-industrial economic zone has been approved by the Philippine Economic Zone Authority and is just awaiting Malacañang’s signature for its proclamation.

Cuyegkeng is a former head of the Dole Philippines, the country’s biggest exporter of pineapples. Now, Sumifru is the country’s biggest exporter of Cavendish bananas. It is the biggest exporter of Cavendish bananas to Japan.

Sumifru Corporation enjoys the Sumitomo "Integrated Corporated Strength", an integrated corporate strength comes from synergies of talents of more than 30,000 group employees, each of whom has the expertise in his/her field to create and implement new businesses.

Aside from producing bananas, Sumifru is also engaged in the sourcing, shipment, distribution, and marketing of fresh fruits, specially the giant cavendish bananas, of the highest quality.

The company brings its products through a fully integrated value chain from its genebank to its logistics and distribution and coldchain systems.

rroyo backs families of massacre victims

Manila Bulletin

Press Secretary Crispulo Icban Jr. has reiterated the government’s commitment to the families of the Maguindanao massacre victims that President Gloria Macapagal-Arroyo will rally behind their quest for justice.

He gave the assurance during the nightfall indignation rally on Friday which was organized by the Malacañang Press Corps (MPC) at the Don Chino Roces Bridge (formerly Mendiola Bridge).

Huwag kayong mawawalan ng pag-asa at habang ako ay nandiyan, makaka-asa kayo ng aking tulong. Nasa likod ninyo ako at ang ating Pangulo,” Icban told the families and relatives of the victims during the rally. (Don’t lose hope. As long as I am there (as press secretary) you will have my support. The President is behind you.”

He said his heart goes with the family of the victims, citing that among those slain was his General Santos City-based reporter, Bong Reblando. Icban was the editor-in-chief of the Manila Bulletin prior to his post as Mrs. Arroyo’s press secretary.

The Press Secretary said he had a conversation with General Santos City-based Reblando shortly before the tragic incident.

Malacañang Press Corps president Paolo Romero, a senior reporter of the Philippine Star, said the rally served as reminder to the government that the MPC is keenly watching the status of the Ampatuan case.

President Arroyo has ordered Justice Secretary Alberto Agra to submit a weekly status report on the Ampatuan case, rejecting reports that Agra has resigned from his post.

Executive Secretary Leandro Mendoza said the President, who wanted the immediate resolution of the case, tasked Agra to regularly report the status and to immediately submit his recommendation in the wake of ouster calls against him.

There was already a motion for reconsideration appealing to scrap Agra’s earlier decision.

Mendoza said Agra and his panel will be carrying out the earlier directive of Malacañang ordering the acting Justice secretary to review with state prosecutors his move to scrap the multiple murder charges against Autonomous Region in Muslim Mindanao (ARMM) Governor Zaldy Ampatuan and Maguindanao Vice Governor Akmad Ampatuan in connection with the November 23 massacre of 57 people, including 32 journalists in Maguindanao. He said the review will be done in conjunction with the motion for reconsideration filed by the lawyers of the victims.

One more of thousands of Pinays who got talent