PHILIPPINE
Vol. 23, No. 3 March 2011
FACTSHEET The Month’s Highlights Political
The House votes 210-47 to impeach Ombudsman Merceditas Gutierrez in a voting that more or less followed party lines. Senators are also preparing for the impeachment trial which will proceed when Congress resumes on May 9. Malacanang and Congress reached ‘broad consensus’ on the priority bills submitted by the President for immediate passage. The final priority list includes: Fiscal responsibility; Rationalization of fiscal incentives; Anti-trust; Amendments to the BOT-Law; Amendments to the government procurement law; Amendments to EPIRA; Amendments to the Anti-MoneyLaundering Act; Amendments to the Labor Code; Water utilities reform; Better protection of whistle-blowers. The Commission on Appointments confirmed the appointment of Lt. Gen. Oban as chief-ofstaff of the Armed Forces of the Philippines, while bypassing the nomination of 6 cabinet members (Purisima, de los Reyes, Paderanga, Soliman, de Lima, del Rosario). The President named Air Force commander Lt. Gen. Eduardo Oban Jr. as the new chief of the Armed Forces of the Philippines, after Gen. David Jr. retired. He ordered Oban to pursue reforms. The President appointed newly retired Gen. David as the new immigration commissioner and asked him to undertake reforms in the bureau. A P500 million 1-month fuel subsidy for jeepney and tricycle operators has been approved by Malacanang as part of efforts to mitigate the impact of rising crude oil prices.
Economic
Key interest rates were raised with monetary authorities warning of stronger inflationary pressures and the possibility of further tightening. The move – a 25-basis point increase that pushed the BSP overnight borrowing and lending rates to 4.25% and 6.25% respectively – marked the first adjustment since July 2009. Gross international reserves of the country reached US$ 64 billion at the end of February.
The BIR has issued Revenue Memorandum Order No. 12-2011, dated March 17, prescribing the collection goals of the bureau’s units, which increased across the board, targeting P940 billion, up 9.25% from the goal in 2010. The ‘Larger Taxpayers’ unit is entrusted with a bigger share of the target.
new jobs were still not enough to keep up with the increasing number of Filipinos joining the work force.
The exposure of banks operating in the Philippines to the real estate sector posted a 10.2% increase in 2010 to P433.6 billion, representing 14.6% of the industry’s total loan portfolio.
While incurring a net deficit of US$ 133 million in February, the balance of payments surplus reached US$1.47 billion in the first two months of the year, up 32% from 2010.
South Cotabato’s ban on open pit mining will be implemented after the province’s governor signed the implementing rules and regulations of a disputed environment code. The BIR has asked Customs to require importers to present their latest income tax return in order to get permits for their shipments as the former noticed that a number of the country’s importers were not listed among the largest taxpayers. Two executive orders on ‘pocket open skies’ dated 14 March 2011 have been issued by Malacanang: EO 29 authorizing the Civil Aeronautics Board (CAB) and negotiators to ‘pursue more aggressively the international civil aviation liberalization policy’ and EO 28 which again splits the country’s negotiation panel into two. EO 28 recreates the Philippine Air Negotiating Panel and the Philippine Air Consultation Panel. Remittances of overseas Filipinos climbed 7.6% in January to US$ 1.476 billion. The Philippines emerged as the world’s fourth biggest recipient of remittances in 2010, behind India (US$ 55 billion), China (US$ 51 billion) and Mexico (US$ 22.6 billion). The report stated the remittances going to the Philippines at US$ 21.3 billion. The government posted a budget surplus of P13.4 billion in January as revenues jumped 47%. The January fiscal position reversed a deficit of P37.1 billion in January 2010. The government incurred a budget deficit of P314.4 billion in 2010, equivalent to 3.7% of GDP. Unemployment rose to 7.4% in January as
The net inflow of portfolio investments jumped 135% to US$ 727.17 million in the first two months of the year.
BSP data show that Foreign Direct Investments (FDI) reached US$ 1.71 billion in 2010, 12.7% lower than the FDI recorded in 2009. The Philippines will start the bidding process for 5 PPP projects worth US$ 1 billion later this month. Unfortunately, these initial contracts are saddled with ownership issues and lack guarantees. The Philippines remains the least preferred site in Southeast Asia for Japanese investment, a survey among 473 Japanese firms undertaken in November last year shows, at a time when Japanese firms are increasingly relocating from their homeland and from China. The BSP reported that bank lending growth accelerated further, posting an 11% expansion in January. The government has promised to increase the budget for easement and right-of-way costs in most of the PPP projects to facilitate their construction and hasten their completion to P15 billion. The country’s inflation spiked to a nine-month high of 4.3% in February from the revised 3.6% in January due to higher oil and food prices. The average inflation for the two months of the year stands at 3.9%. The National Telecommunications Commission (NTC) has ordered a review of the standards to be used for the country’s shift to digital television broadcasting technology. The NTC is considering the adoption of the new technology, the secondgeneration Digital Video Broadcasting (DVB2)