PHILIPPINE
Vol. 22, No. 12 December 2010
FACTSHEET The Month’s Highlights Political
The President signed the 2011 P1.645 trillion budget into law, at the same time vetoing 13 items, while placing a number under conditional implementation. He rejected provisions that limit the power of the Executive branch and those considered as ‘riders’ or are prohibited by the Constitution. Among the vetoed items was the imposition of a debt-to-GDP cap of 55%. The President lobbied for the Fiscal Responsibility Bill which seeks to require Congress to ensure that revenue-eroding measures be matched with revenue-generating ones. The Philippines will sign a logistics supply deal with China to source military equipment to combat domestic security threats. The Supreme Court declared that the Truth Commission, created to investigate alleged corruption by former President Gloria Macapagal-Arroyo, was unconstitutional. Malacanang will appeal the ruling. The Senate concurred with Malacanang’s grant of amnesty to soldiers who rebelled against the Arroyo administration. The Commission on Appointments confirmed the nominations of four Cabinet members: Tourism Sec. Lim, DepEd Sec. Luistro, Agriculture Sec. Alcala and Public Works and Highways Sec. Singson.
The Sandiganbayan Second Division has granted former military controller Carlos Garcia, on trial for amassing P303 million in ill-gotten assets, bail for the non-bailable offense, after Garcia managed to strike a plea bargain with cor. Tindalo St., Makati City, Metro Manila, Philippines state prosecutors.| Website: www.eccp.com ; 759 6690 | Email: info@eccp.com
ean Busi n ess Com m u n ity Economic
The country’s balance of payments hit an alltime high in November with a surplus of US$ 3.9 billion. The surplus for the 11-month period stands at US$ 13.178 billion, compared to the US$ 5.206 billion surplus in the same period of last year.
The country’s current account surplus posted a 13.3% growth to US$ 7.019 billion in the first nine months of the year. A combination of higher revenues and ‘judicious’ spending resulted in a budget surplus in November of P482 million, a result that trimmed the 11-month budget deficit to P268.9 billion. The government is confident of keeping the 2010 deficit below the P325 billion ceiling. The government has cancelled 19 ‘overpriced’ airport civil works contracts with Takenaka Corp., as part of a review that started last July of deals awarded by the Arroyo administration in its ‘few remaining months’. Imports in October rose by 28.4% to US$ 4.89 billion. Exports in October expanded by 26.4% to US$ 4.738 billion, resulting in a trade deficit of US% 112 million. The prospects of the US$ 5.2 billion Tampakan mining project received a boost after national authorities (DILG) stressed the primacy of the 1995 Mining Act over ordinances passed at the local level. The government has ordered South Cotabato to shelve an open pit mining ban but the province governor says the controversial ordinance will stay in place until repealed by local officials or nullified by a court. Annual inflation inched up to 3.0% in November due to higher oil and electricity prices, bringing the average inflation for the 11-month period to 3.8%. The country’s gross international reserves reached a total of US$ 61.05 billion at endNovember, exceeding the country’s foreign debt which stood at US$ 59.8 billion as of end-September. New oil and gas drillings in the country will temporarily be halted after the Department of Energy postponed the public contracting
rounds on oil and gas contracts pending the resolution of a dispute with the Commission on Audit. Sec. Almendras said that the public energy contracting round on coal and geothermal will, however, push through. Foreign direct investments in developing countries like the Philippines grew by 17% in 2010. FDI inflows in the Philippines reached only US$ 1 billion in the first 8 months, down 38% from a year ago. In September, FDI reached a meager US$ 66 million. T h e N a t i o n a l Te l e c o m m u n i c a t i o n s Commission’s last minute decision (3 weeks before the previous administration left office) in choosing Japanese digital television standards (over the European standards) for use in the Philippines, has raised eyebrows of several broadcast sector stakeholders. A total of P200 billion worth of fresh 10- and 20-year bonds was issued by the government after a debt swap intended to lengthen its debt maturity and create bench-mark papers closed on Dec. 10. The strong economic growth is not creating a sufficient number of jobs; the unemployment rate stayed at 7.1% in October. Filipinos abroad sent home at total of US$ 1.67 billion in October, bringing the 10-month remittances to US$ 15.45 billion, 7.9% up from the same period of last year. The ERC has been given an extension until March 31, 2011 to come up with a proposed feed-in tariff for renewable energy. Meanwhile, the DOE is tapping the help of the World Bank to come up with a globally accepted feed-in tariff and renewable portfolio standard for renewable energy projects. The ERC has given the PSALM until March 15, 2011 to submit a revised petition for universal charge to recover Napocor’s stranded costs and debts.