PHILIPPINE
Vol. 22, No. 10 October 2010
FACTSHEET The Month’s Highlights
Political
The President ordered the filing of charges against top officials, including Manila Mayor Lim and Manila’s former police chief, in connection with the Aug. 23 hostage-taking incident, but cleared close friend DILG USec. Rico Puno. Backed by a supportive Congress, the President granted amnesty to detained Sen. Antonio Trillanes and more than 300 rebel officers and soldiers who took part in three military uprisings against his predecessor. The Supreme Court issued a status quo ante order on E.O. 2 which revoked so-called midnight appointments of former president Arroyo. President Aquino is headed for another legal battle at the Supreme Court as the tribunal was asked to declare as unconstitutional the EO suspending all allowances, bonuses and incentives of officials of government-owned and –controlled corporations and financial institutions. Delayed delivery of poll materials forced the Commission of Elections to postpone elections in 1,732 barangays nationwide. According to the Armed Forces, the Barangay Elections were generally peaceful.
Economic
The Philippines has managed to move five notches in an international corruption perception survey (134th of 178) despite an unchanged score, a Transparency International report shows. Imports grew by 22% to US$ 4.4 billion in August. With exports valued at US$ 4.8 billion, a trade surplus of US$ 347 million was recorded for that month. For the first eight months, total imports rose by 26.1% to US$ 35.324 billion; exports reached US$ 32.970 billion during the same period, resulting in a trade deficit of US$ 2.354 billion. Monetary authorities approved a fourth phase of reforms in its foreign exchange regulatory framework, liberalizing existing restrictions on capital outflows to address the strong inflows of capital into emerging markets, including the Philippines, and temper the strong appreciation of the peso against the dollar.
In an attempt to curtail oil smuggling, the Bureau of Customs requires accreditation of oil importers and hired 6 global survey firms to monitor fuel shipments in RP ports. The BSP reported a 41% drop in the net inflow of foreign direct investments in July to US$ 222 million from US$ 377 million in July 2009. The total net FDI inflow in the 7-month period registered a 42% decline to US$ 954 million from US$ 1.18 billion last year. Investments registered with the PEZA rose by 32% to P80.6 billion in the first nine months of the year from P61.0 billion a year ago. The BOI reported that approved investment projects hit P192 billion in the Jan to Sept period, compared to P45.2 billion in the same period of last year. The net inflow of foreign portfolio investments or ‘hot money’ surged 520% to US$ 1.42 billion in the nine months ending September. The DTI is pushing for the amendment of the Labor Code, which contains provisions that are making the country increasingly uncompetitive in the global arena. Bent on getting as many businesses involved in PPP projects, the government is thinking of ways to mitigate ‘unforeseeable’ risks related to such projects, according to DTI’s Domingo. Remittances from overseas Filipino workers reached US$ 1.5 billion in August, up 9.8% from the US$ 1.33 billion remitted last year. Remittances in the Jan to August period went up 7.4% to US$ 12.2 billion. Annual inflation eased to a ten-month low of 3.5% in September, strengthening expectations that monetary authorities will keep policy rates unchanged. The average inflation rate for the 9-month period stands at 4.1%. Gross international reserves hit US$ 53.75 billion in September, breaching the central bank’s full-year forecast. The BOI has approved tax and other incentives for Dana Fresh Agri-Development, Inc.’s P314.25 million cavendish banana project in Malandag, Sarangani.
The growth of profits of listed companies eased to 20% in the first half from 46% in the same period of last year. The country’s balance of payments hit a record surplus of US$ 6.54 billion as of the end of September, compared to US$ 3.7 billion recorded in the same period of last year. Government is set to bid out mining claims, abandoning the old practice of ‘first come, first served’, as a way of generating additional funds for the public coffers. Finance officials reported a September budget shortfall of P31.7 billion, a result that raised the nine-month tally to P259.8 billion, 80% of the full year ceiling of P325 billion, but well below the P373.7 billion ceiling for the period. The Supreme Court has finally lifted the TRO on the government plan to hike toll fees at the South Luzon Expressway, however, the implementation of toll fee increases is still delayed. The BSP has put on hold banks’ applications to issue debt instruments such as Hybrid Tier 1 or 2 capital, as it is coming up with new rules on capital adequacy in view of Basel 3. Cabinet officials have recommended adoption of an open skies policy and President Aquino is open to considering the proposal.
Business
DOE has accredited Philcarbon Inc. as a Class A energy services company (ESCO) in the Philippines. AgriNurture Inc., a leading supplier of fresh and processed agricultural food products, has signed an agreement to acquire 51% each of Sunshine Supplies International Co. Ltd. and Xiamen Wantaixing Trading Corp. for a combined US$ 2.5 million. The President has disapproved a project to dredge Laguna de Bay, saying he found it pointless to spend P18.5 billion just to move dredged matter from one area of the lake to another nearby site. A Belgian dredging firm is involved in the project.