Saturday, 23 June 2012

DOST’s Sec. Montejo: Train projects on track

Business Mirror

SCIENCE Secretary Mario Montejo said he expects three train-related projects to be finished by December this year.

“I’m an incurable optimist,” Montejo told reporters noting that the monorail project in the University of the Philippines Diliman (UP Diliman) campus would be up and running before the year ends.

He said the inauguration would either be before or during the university’s annual Lantern Parade in December.

Likewise, the head of the Department of Science and Technology (DOST) added that the department and the Philippine National Railways (PNR) would sign a deal for the repair of the latter’s 40 coaches.

Montejo’s announcement came nearly three months after he said a failed bidding process has stalled the construction of an electric train in the UP Diliman campus.

And it is nearing a year since Montejo announced on July 2011 the project for a 500-meter monorail system called Automated Guideway Transit and which costs about P22 million.

Arthur Lucas Cruz, Metals Industry Research and Development Center (MIRDC) executive director, told the BusinessMirror in April that one of only two who bid for the construction of the elevated train was disqualified outright because they couldn’t meet the required standard.

“The other one was okay but upon scrutiny of their credentials, we discovered they can only build only up to 15 meters when they should be able to build up to 20 meters. Hence, we were forced to call it a failed bid last week,” Cruz said in April.

He added that their option was to go into a negotiated bid.

Montejo said the project was awarded to Miescor Builders Inc., a subsidiary of the Manila Electric Co.

“It’s not being treated as a replacement to the current transportation system in UP, that is, [Ikot and other] jeepneys,” Montejo said, adding that the mandate of the DOST is to develop technologies.

“Now, it’s up to UP or to private investors if they want to commercialize or further advance or develop the project.”

The DOST chief said that is also the case with the project with the PNR, which involves creating the motor and drive for the train coaches that remained unused since these donations by the governments of China and Korea arrived.

“We’re just developing the technology—the drive system and motor for torque—that the PNR may use so that these coaches can run again,” Montejo said.

He added that the DOST is also crafting the technology for a “road train,” which would be composed of five coaches linked together.

“We have talked with the MMDA [Metropolitan Manila Development Authority] and the DOTC [Department of Transportation and Communication] about this,” Montejo said.

He explained that the “road train” would run on rubber wheels with each coach having its own engine powered by electricity and fossil fuel.

Montejo said they expect to test this mass-transport vehicle also by December on Katipunan Avenue in Quezon City.

The DOST has awarded the development of the first all-Filipino mass-transport system to Miescor in a ceremony on June 19 as part of this year’s celebration of the Metals and Engineering Week.

In a statement, DOST’s MIRDC said Miescor, a construction and engineering company wholly owned by the Meralco Industrial Engineering Services Corp., would construct the 465-meter test track in the UP Diliman campus.

The Automated Guideway Transit System (AGTS) will run on a track that curves from the C.P. Garcia Avenue near the CHED Building to the College of Arts Building.

Secretary Montejo said the AGTS will be the future of mass-transport systems and added that it is one of the DOST’s high-impact technology solutions and is the first among the DOST’s several proposed public-transportation systems for Metro Manila.

The AGTS project is being monitored by the DOST’s Philippine Council for Industry, Energy and Emerging Technology Research and Development.

Composing the project team are engineers from DOST-MIRDC, UP Diliman and the Project Management Engineering and Design Service Office. The team aims to create a fully automated, driverless electric transportation that travels on an elevated rail or guideway.

The guideway will stand at an elevation of 6.1 meters supported by high-quality concrete material, while the train body will be composed of two adjoining coaches, each having 30-people capacity.

The coaches will roll on rubber tires instead of metal wheels to minimize track noise, and will have bogies to ensure comfort and stability.

Jonathan Puerto, officer in charge of the office of the deputy executive director of DOST-MIRDC, said the test track in UP Diliman will help MIRDC to fine-tune the technology’s mechanisms and operation, which include speed, stability, brake distance and power, among others.

“If all goes as planned in the construction of the guideway, we will be able to initiate the testing in October,” Puerto explained.

Besides being locally developed, the DOST’s AGTS is environment-friendly as it is nonpolluting and is seen to be reliable because it is fully automated. It is considered safe as the elevated guideway is projected not to get derailed or cause road accidents and at the same time helps reduce traffic congestion.

Secretary Montejo said some countries that are reaping benefits from the AGTS technology include the United States, Japan, Singapore and Canada.

(With Ramon Lazaro)

K+12 Basic Education Program in a nutshell

Business Mirror

THE K+12 Basic Education Program seeks to enhance the quality of education.
K+12 means Kindergarten and the 12 years of elementary and secondary education. Kindergarten refers to the five-year-old child who undergoes a standardized Kindergarten curriculum. Elementary education refers to primary schooling that involves six years of education (Grades 1 to 6) while secondary education refers to four years of junior high school (Grades 7 to 10 or High School Years First to Fourth) and two years of senior high school (Grades 11 to 12 or High School Years Fifth and Sixth).

Quality basic education is a right of every Filipino, therefore this is provided by government for free in public schools. Those who go through the 12 year program will get an elementary diploma (six years), a junior high-school diploma (four years) and a senior high-school diploma (two years). A full 12 years of basic education will eventually be required for entry into tertiary level education by School Year 2018-19.

Implementation of the K+12 Program will be phased. Universal Kindergarten was offered in School Year 2011-12. By School Year 2012-13, the new curriculum will be offered to incoming Grade 1 as well as to incoming junior high-school students. The target of the Department of Education is to put in place the necessary infrastructure and other arrangements needed to provide Senior High School education by School Year 2016-17.

Benefits of the K+12 Program

A.  To individuals and families:  An enhanced curriculum will decongest academic workload, giving students more time to master competencies and for co-curricular activities and community involvement, thus allowing for a more holistic development.

Graduates will possess competencies and skills relevant to the job market. They will attain Certificate of Proficiency, Certificate of Competency or National Certification in their areas of specialization.

Graduates will be better prepared for higher education.

The K+12 education is affordable. The cost of the additional two years in high school will be lower compared to a two-year college education.

The potential annual earnings of a K+12 graduate will be higher compared to the earnings of a 10-year high-school graduate. Graduates of the program will be recognized abroad.

B. For the society and the economy: K+12 will contribute to economic growth. Several studies have shown that improvements in the quality of education will increase GDP growth by as much as 2 percent.

K+12 will facilitate mutual recognition of Filipino graduates and professionals in other countries. A better educated society provides a sound foundation for long-term socioeconomic development.

Articles reprinted from Philippines Graphic, June 25, 2012

Friday, 22 June 2012

Work on all-Filipino monorail starts in UP

Manila Standard

THE government contractor that was commissioned to build the guideway for the country’s first all-Filipino monorail has already starting work on the P21.6-million automated guideway transit system that will be tested before the end of the year.

The contractor, Miescor Builders Inc., started diggings for the elevated test tracks a week before the ceremonial awarding rites at Manila Traders Hotel on Tuesday. The monorail is a project of the Department of Science and Technology.

Engineer Jonathan Puerto of the DOST’s Metals Industry Research and Development Center said the test track is being built at an empty lot in the University of the Philippines campus in Diliman, Quezon City.

“We expect to finish the construction within four or five months, or by October or November, then we can have the actual tests using the coaches,” said Puerto, stressing that the tests are necessary to finetune the system’s mechanisms and operation, including speed, stability, brake distance and power, among others.

Science and Technology Secretary Mario Montejo said the AGTS is the first of several high-impact technology solutions that is being developed by the department for the public transportation sector.

Montejo said many countries are already reaping benefits from their own AGTS technologies,  including the United States, Japan, Singapore and Canada. “If these countries can do it, so can the Philippines,” the secretary said.

Montejo said the guideway of the monorail will stand at an elevation of 6.1 meters supported by high-quality concrete material, while the train body will be composed of two coaches, each capable of carrying 30 people.

The coaches will  roll on rubber tires instead of metal wheels to minimize track noise, and will have bogies to ensure comfort and stability.

Aside from being locally developed, Montejo said the monorail is envisioned to be non-polluting, reliable and safe because it cannot be derailed or cause road accidents, aside from helping reduce traffic congestion.

Puerto said the 465-meter demonstration track will be at the largely vacant UP lot between the Commission on Higher Education building on C.P. Garcia Avenue and the College of Fine Arts on Emilio Jacinto Street.

After the pilot tests at UP, Puerto said the DOST will conduct  other feasibility studies before the DOST alternative mass transport system goes public.

“We will also delve on the economies especially the cost efficiency of running the system, engineered by the DOST,” Puerto said, adding that the monorail will be much cheaper than light rail transits due to its components.

(Published in the Manila Standard Today newspaper on /2012/June/21)

Why the PSE is goingn higher

John Mangun

Before any politician steps in to claim the credit, I am officially taking responsibly for the accomplishment of the Philippine Stock Exchange (PSE) going up during the next months.

I am, however, willing to share the recognition of this achievement with you and everyone else who is a stock-market investor because it is our money, not the governments’ nor the politicians, which will push prices higher.

Prices go up, not because of political policies or programs, and most certainly not due to politicians’ speeches. Stock prices advance because you and I firmly believe we can make money buying shares.

The stock market is the ultimate self-fulfilling prophecy. I think prices are going up. I buy. Because of my buying, prices go up. It’s magic!

There is an old stock market saying that when everyone is buying, you want to be selling. That is true. But very rarely does “everyone” buy or sell at the same time. What you want is to be doing what the majority of investors are doing. Right now, most investors are buying. When most investors are selling, I will sell also because the majority is the boss in moving prices.

As I have said many times, the peso is going to continue to appreciate. That is the first reason why the market is going up. Foreigners like to invest in countries’ stock markets where the currency is appreciating. Their investment gains from the stock price going higher and from the currency going higher. For local investors, as I mentioned before, if my gasoline and other imported products’ costs are lower because of a stronger peso, there is more money to put into the market. Also, many local companies’ raw material and capital costs will be lowered thus making them more profitable.

The Bangko Sentral ng Pilipinas cannot hold the peso back from market appreciation without suffering large foreign-currency losses. The appreciating trend is in place and that will move stock prices favorably.

The idea that the local market is expensive in relation to other regional markets is not entirely valid. Using a Price Earnings Ratio (PER), our market is higher. However, a more accurate reflection of relative value is PEG or Price to Earnings Growth. This measures the growth of company profits against price. Here the Philippines is better than the others and therefore allows for additional longer term price appreciation. PER is a snapshot; PEG shows the profit trend and forecasts future price potential. PHL wins.

The government’s expectation of getting a higher credit rating soon is wishful thinking. The global financial institutions have no intention of letting this happen. They want to buy as much the PHL government debt at the current higher interest rates. They will hold off a ratings change as long as possible.

When the higher rating comes through, their holdings of government debt paper will be worth more and they will have locked in a high interest rate. In fact, if you have long-term cash holdings that you do not need to touch, buy the PHL government 10-year bonds. You will be happy you did.

However, that credit-rating increase will come in early to mid 2013. All PHL interest rates will go lower and will create more cash in the system, a portion of which will go to stock market purchases, pushing prices higher. Real estate sales will also benefit from lower interest rates and help push up the price of the property companies listed on the PSE.

Major listed companies in the Philippines have two strong financial advantages that will show up in higher stock prices. Unlike in the West, our corporations have cash and also available credit. Quietly, many local firms are forming joint ventures with and even buying financially distressed Western firms. The government may not know how to take advantage of the global financial crisis but local companies do know how. These companies are gaining markets and profits at the same time.

Buy the peso. Buy the PSE. Both are going higher.

Tuesday, 19 June 2012

European Elections: What they mean

John Mangun
Business Mirror

THE Greek election on Sunday was hailed in the global financial press and by the markets as a breakthrough in solving Europe’s financial problems.
Nothing could be farther from the truth.

The Greeks decided to give the political group, the New Democracy (ND) party, a slight edge in the voting.

The ND campaigned it would agree to the austerity measures imposed by the European Union (EU) in return for continuing to use the euro currency and for additional EU money to keep the country running.

While the Greeks were voting, so were the French. In France the anti-austerity Socialists won big. But the French Socialists also are committed to the euro. And it is the euro and the bureaucrats’ and politicians’ jobs that all of this is about.

The Greeks, French, Spaniards and Italians have absolutely no intention of putting programs in place that will significantly reduce government expenditures to a level necessary to stop the debt crisis. The only viable solution is drop the euro, print local money, and devalue out of the debt problem. That is the solution that has always worked before but it will not happen.

But if even one country returns to its former currency, the euro and, in effect, the EU, is dead. There would be no need for a European Central Bank, a European Commission, or a European Parliament, putting thousands of politicians and bureaucrats out of jobs.

There is no intention at this point on either side of the Atlantic Ocean to solve the debt problem with a rational government economic growth policy. It is all and only about political power.

The new leader of Greece said the vote was “a victory for all Europe.” Not quite. It was a victory for politicians of the wild spending countries against the people of the few hard-working nations.

What was revealed on Sunday is how the game is going to be played in the coming months.

Spain, Italy and Portugal (and perhaps France before long under the Socialists) need massive amounts of bailout money. But the citizens of those countries are not going to accept anything more than minimal financial pain.

The credibility of every major political party in all the EU countries dies if the euro goes.

The people wanted cradle-to-grave government benefits without having to pay for them. The politicians told them lies to get elected. When people want the impossible, only liars can satisfy them.

The vote on Sunday was nothing less than blackmail. The voters said, if you want the euro to live, you must pay us to stay. And everyone, the central banks, the financial markets and the politicians, are all happy with this arrangement.

The Federal Reserve, the ECB and the Bank of Japan are now able to create as much money as they want. There cannot be any sort of hyperinflation if all the major currencies are being printed. All three currencies, the dollar, euro and yen, will maintain their relative value against each other.

The debt crisis will continue as will the money printing.

But the true winners of Sunday’s elections are countries with sound fiscal policies and a sound currency. Like the Philippines.

Although the government is doing all that it can to discourage foreign investment with the total disaster of its mining policy, foreign money will come to this country. The PSE will go to 5,800 to 6,000. The peso will appreciate to 40. Economic growth will continue at relatively high levels.

While the ignorant say that our stock market is not “cheap,” that will not matter because of peso appreciation. You are willing to pay a higher price for your stock if your gasoline price is lower. Some worry about a nonexistent property bubble. They ignore the intrinsic value of PHL condos and office space against other countries.

The party is not over. The Greeks just bought more hard liquor for everyone and the central banks are glad to print the money to pay for it.

E-mail to, Web site is, and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by COL Financial Group Inc.