Agriculture fund: Is it for real? By Val Abelgas | Posted on Nov. 16, 2012 at 12:01am | 223 views
It is reassuring to know that President Aquino is not leaving the farmers alone after all farm lands subject to land reform have been turned over to them. The President has ordered the release of P1 billion to fund an Agrarian Production Credit Program aimed at helping farmers across the country put up post-harvest facilities and buy farm equipment, and to finance other agricultural projects. Budget Secretary Florencio Abad said the implementation of the ACPC complements the Presidentâ€™s commitment to fully implement land reform across the country by 2016. Abad said the ACPC would help ensure the sustainable and effective production of crops nationwide in addition to boosting the income of farmer-beneficiaries. Prior to this, he said, agrarian reform beneficiaries received meager credit assistance, resulting in limited crop production and slower economic growth among beneficiary households.Land distribution to farmers who are tilling the land is just a part of a comprehensive agrarian reform program. A program that assists beneficiary farmers to increase productivity in their farm lands and improve their economic situation by providing them loans, infrastructure and marketing support, seeds and fertilizers and farm equipment, and training and education is what differentiates agrarian reform from land reform. Agrarian reform corrects centuries of injustice under a feudal society where non-tillers or landowners are the ones who benefit from the labor of the farmers or the tillers. It is hoped that by transferring ownership of the land to the farmers, they would be motivated to produce more since the products of their labor would benefit them directly, instead of going to the non-tilling landowners. However, it is imperative upon the government to provide support to the farmer beneficiaries to enable them to increase productivity and thereby increase their income from the land and be able to contribute to the national economy. Without this support, the land reform program is bound to fail and the farmers would eventually abandon their farms, or sell them back to the moneyed non-tillers. There have been many agricultural programs that were designed to help small farmers, but many of them failed because while the intent of the programs were noble on paper, it soon became clear that the initiators and implementors did not really have the interest of the farmers in mind, but only their own selfish interests.
One need not look far down history to see that under the kind of leadership that we have had, any land reform program was bound to fail. Under the administration of Gloria Macapagal Arroyo, billions of pesos were allotted to programs that were designed to help the farmers achieve economic independence. Among these were the P720-million fertilizer fund, the P3.1-billion irrigation project, the P5billion swine program, the P120-M Gintong Masagana Ani (GMA) program, and the P455-million ice-making machine program for fishermen For some reason, the release of the funds for all these projects was timed a few months before the elections in 2004, 2007 and 2010. The fertilizer millions apparently did not go to the farmers but went to the campaign kitties of the administration party’s candidates for congressmen, governors and mayors. The P5 billion that were supposed to be used to buy piglets for farmers were also obviously derailed because not a single piglet’s shriek was heard. What ever happened to the P3.1 billion for irrigation projects is unknown because I have not heard of a single dam or irrigation canal built under the program. And the P455 million probably froze before any ice could be made from the non-existent ice machines. Whatever happened to all those programs? Were they ever implemented? How much was released, and how much has been done? Will they ever be implemented? The politicians must stop using the farmers for their own agenda. The Philippines has been lagging behind its neighbors in agriculture, which propelled many Asian nations, such as Thailand, Indonesia, Taiwan, and Vietnam to rapid economic growth. The country needs to go back to the basics. Agriculture can provide the answer to spreading economic development to the provinces, which, in turn, will help decongest the urban centers. A successful agrarian reform program, with the government providing full support to the farmer beneficiaries, can help boost countryside development, and consequently, national economic recovery. We hope that the P1-billion fund released by the Aquino administration would jumpstart the rebound of the agricultural sector. Let’s hope that this program and other agricultural projects that would soon be launched by the administration would not follow the crooked path that Arroyo’s programs pursued. But then again, why is the P1-billion fund being released just a few months before the May elections? Just asking.
Lawmakers question P1-b crop insurance By Maricel Cruz | Posted on Nov. 16, 2012 at 12:01am | 190 views A party-list organization said the Philippine Crop Insurance Corp. should explain if its P1-billion coverage is enough for agrarian reform beneficiaries nationwide. In House Resolution 2816, COOP-NATCCO (Cooperative Network Party) Reps. Cresente Paez and Jose Ping-ay asked the House Committee on Agrarian Reform to summon the officials of the Department of Agriculture, Department of Agrarian Reform and crop insurance to appear with updated reports. They noted that the summary of production and indemnity for unmilled rice from 1981 to 2011 covered 3,373,656 farmers with 963,059 indemnified for P2,843,571,000 while corn covered 491,785 farmers over claims worth P681,716,000 from 1982 to 2011. â€œThe Aquino administration intends to increase farmer productivity and help facilitate the trade of produce. This will not be realized if there is inadequate protection against crop damages as a result of plants disease, natural calamities and other perils,â€? the billâ€™s authors said, quoting from a speech of President Benigno Aquino III. The P1-billion insurance coverage was taken up during the recent budget hearing on the 2013 general allocation. The crop insurance agency is a government-owned and controlled corporation attached to the Agriculture department.
AFC to boost agriculture By Ernesto M. Ordoñez Philippine Daily Inquirer 1:45 am | Friday, November 16th, 2012 The 71-percent increase in the Department of Agriculture’s budget in 2009 to P48 billion, from P28 billion in 2008, did not result in any growth in the agriculture sector. There was also no growth in 2010, just a 2 percent growth in 2011 and then another 2 percent growth as of the end of the third quarter of this year. This is despite the increase in the DA’s budget to P53 billion in 2012, with the 2013 budget now expected to reach as much as P73 billion, for DA and its attached corporations. Activating the Agriculture Fisheries Councils (AFCs) may well be the key to boosting agricultural growth and making the most of the increase in the DA budget. Agriculture Secretary Proceso Alcala, however, should still be commended for the 2 percent growth in 2011 and 2012. To accelerate that growth, DA will need a lot of help such as greater involvement in the AFC. The San Roque, Northern Samar, Municipal Agriculture Fisheries Council (MAFC) case is instructive. Last November 13, Mayor Andre Avalon phoned “Maunlad na Agricukultura” radio program host Francis Cansino. He asked how his municipality could benefit from the increased DA budget for 2013. He listened that morning to the weekly Alyansa Agricukultura report concerning several mayors who are not using the DA budget effectively because they were not serious about agricultural development. Avalon said he was not one of them. In fact, agriculture is his top priority. However, his municipality’s agricultural growth has been constrained by a severe lack of agricultural assistance. Avalon said Secretary Alcala was committed, hard-working and accessible. But something is lacking in the DA structure. For example, despite the increase in the DA’s budget, Avalon has been getting the same DA assistance every year since 2009: a multipurpose dryer worth approximately P500,000. It is useful, but the farmers can do without it. The dryers do save the farmers the trouble of drying their palay on paved roads, but the farmers can still make do with what they have.
According to Avalon, the P500,000 can instead be used to buy hand tractors for land preparation. These tractors can be shared by several farmers and are guaranteed to bring about more benefits. Avalon said: “Palay production can be increased from 60 to 100 cavans a hectare because of the much improved land preparation.” Avalon credits agricultural development insights such as these to San Roque’s Municipal Agriculture Fisheries Council (MAFC). This MAFC has 14 Barangay Agriculture Fisheries Councils (BAFCs) that interested farmers can join. The BAFC private sector chiefs, who compose the MAFC, then meet with Avalon to identify and resolve agricultural issues. When Avalon changed the MAFC meeting schedule from quarterly to monthly, significant improvements were achieved. “If the DA gives the MAFC more importance, the DA budget will be more wisely and effectively used. Monitoring the budget will also be better because the MAFC recommendations, not those from the ‘top down,’ will be followed,” Avalon said. Last November 12, NAFC Executive Director Ariel Cayanan achieved a breakthrough. In a Region 10 DA-DILG-LGU meeting in Cagayan, the DILG and the LGUs ordered that the AFC representatives at the regional, provincial and municipal levels become permanent members of the LGU Local Development Councils (LDCs). This supports Secretary Alcala’s direction of strengthening AFCs. The result is that not only the DA budget, but also the other LGU agriculture-related budgets, will be used to meet what the AFCs identify as their “real needs.” Spending and monitoring the agriculture budget through the Public-Private Partnership AFCs are sorely needed to boost Philippine agricultural development. (The author is chairman of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, and Trade and Industry. For inquiries and suggestions, e-mail firstname.lastname@example.org or telefax 8522112.) http://business.inquirer.net/93148/afc-to-boost-agriculture
Economy Posted on November 15, 2012 10:41:38 PM
Eastern Visayas seeks more funds for corn production TACLOBAN CITY -- The Department of Agriculture (DA) in Eastern Visayas is seeking more funds to improve corn production in the region in support of efforts to push for an alternative staple. Brenda J. Pepito, regional corn program coordinator, said DA is pushing for an annual budget of P46 million for the next five years starting next year. The program has a budget of P25.7 million this year. Under the 2012-2017 corn industry road map, the DA plans to distribute 10 mobile village-type corn mills, one to two dryers, six mechanical corn shellers, four tractors, and four corn planters in the region every year. "With the provision of corn post harvest implements and other facilities, we hope that farmers will be encouraged to cultivate corn, and increase consumption of this grain starting 2013 and onwards," Ms. Pepito told BusinessWorld. The DA distributed four mobile corn mills last year in Tacloban City, Abuyog, Dulag, Calubian, all in Leyte province. This year, 10 units will be given to farmersâ€™ groups in Sta. Rita, Samar; Isabel, Leyte; Basey, Samar; Dolores, Eastern Samar; Can-avid, Eastern Samar; Northern Samar province; and Merida, Leyte. "Based on our computation, if they have a single corn mill in every barangay, this can serve 35 to 40 hectares in one cropping. Every unit can mill 44,000 kilograms of corn grains in every harvest season. Facilities can also be used by nearby villages," Ms. Pepito said. The equipment are a grant from the national government, but either the local government unit or farmersâ€™ organization is required to put up a 15% equity. Consumption of white corn in the past was higher than the current per capita consumption of 5.6 kilograms, but Ms. Pepito said the absence of millers and dryers has discouraged corn farmers from planting. From Jan. to Sept. 2012, area harvested for white corn slightly increased to 37,868 hectares from 37,558 in 2011. Output during the period slightly went up to 52,026 metric tons (MT) from 50,465 MT last year. "Yield per hectare is 1.39 MT, still lower than other regions but this is a good indicator because we started the program with 0.6 per hectare harvest. That means technology has created an impact," she said. -- Sarwell Q. Meniano http://www.bworldonline.com/content.php?section=Economy&title=Eastern-Visayas-seeks-more-fundsfor-corn-production&id=61527
Nation Posted on November 15, 2012 10:00:52 PM
Seized rice to be auctioned off THE BUREAU of Customs (BoC) will bid out next week more than two million kilograms of smuggled rice, a notice published yesterday showed. The notice published in a newspaper stated that the agency will hold a public auction for four shipments of rice totaling 45,000 bags or 2.25 million kilograms from Vietnam on Nov. 22 at the Subic Bay Freeport Zone. The shipments were seized by the BoC at the Subic Port in June as these were declared as construction materials. The misdeclaration of imported or exported goods is a violation of Republic Act No. 9135 or The Tariff and Customs Code of the Philippines. Last September, the bureau filed with the Justice department smuggling charges against the traders involved in the deal.The notice states that all prospective bidders must be grain traders and importers accredited by the National Food Authority (NFA). The floor price for the shipments are set at earnings of at least 57.96 million.
1,288 per bag, which would translate to
Interested bidders must file and submit to the BoC by Monday a duly accomplished and notarized Bidders Information Form along with several documents, such as proof of NFA accreditation, certified true copies of their income and business tax returns, tax clearance and business permits.Firms must also pay a non-refundable registration fee of 2,000, and post a bond in an amount equivalent to 20% of the floor price of each sale lot up for bidding. "The bond shall be refunded to the losing bidder after the closing of the auction," the notice read. The highest bidder will be required to pay 50% of the bid price upfront upon announcement of the winning bid. The remainder of the payment must then be made by the next business day. According to the notice, interested bidders will be allowed to view the articles today and on Monday at the Subic Port. -- Bettina Faye V. Roc http://www.bworldonline.com/content.php?section=Nation&title=Seized-rice-to-be-auctionedoff&id=61520
Posted on November 14, 2012 07:46:53 PM
Cacao seedlings readied DAVAO CITY -- The Cacao Industry Development Association of Mindanao, Inc. (Cidami) plans to distribute free seedlings to farmers in Davao Region as it seeks to meet a commitment to supply US chocolate firm Mars, Inc. 100,000 metric tons (MT) of cocoa beans annually by 2020. Valiente D. Turtur, executive director of Cidami, said his group chose Malaysian hybrids UF18 and BR25 as the varieties to be distributed to farmer beneficiaries starting in Davao City. "Our native seedlings here are susceptible to pests, particularly the cocoa pod borer, unlike the Malaysian hybrids," he said in a recent interview. The Malaysian variety is expected to yield an additional ton of cocoa seeds per hectare per year. A hectare of farmland planted solely with cacao can earn for the farmer 200,000 annually if one tree produces two kilograms of beans. One of the requirements for receiving the seedlings, he said, is for the cacao growers to undergo training at the Farmer Field School of the Cacao Development Center, a project of Cidami. The group now works with 16,000 farmers, nearly a third of whom are in Davao City, covering a total of 10,000 hectares as it projects to start harvest by 2015. Davao Region harvests 7,000 MT of beans annually, and that already makes up about 80% of the countryâ€™s total production. In order to achieve the target set by the American chocolate maker, he said the region needs to plant at least seven million trees each year. Davao City has about 5,000 hectares of arable land that can be developed as cacao farms while the other provinces in the region, including major producer Davao Oriental, have 20,000 hectares already planted with cacao. With the help of Mars and US government-funded Agricultural Cooperative Development International-Volunteers in Overseas Cooperative Assistance (ACDIVOCA), around one million seedlings are already grown in 70 nurseries both in Davao City and Davao del Norte to be distributed to farmers. Meanwhile, foreign buyers from the US, China, Netherlands, UK, Japan, Belgium and Turkey are expected at the Kakao Konek conference in Davao City on Nov. 21-23. Lizabel B. Holganza, conference director, said her group expects at least 300 farmers, breeders, suppliers, technical experts, nursery owners and manufacturers to participate in the event. The event is organized by Cidami and ACDI-VOCA. â€“ JBE http://www.bworldonline.com/content.php?section=Agribusiness&title=Cacao-seedlingsreadied&id=61403
P265M to boost seaweed production Published on 16 November 2012 Hits: 59 Written by JAMES KONSTANTIN GALVEZ The Department of Agriculture (DA) has earmarked P265 million for 2013 to boost seaweed production in the country.
In his Twitter account, Agriculture Secretary Proceso Alcala said that the amount would be use for a more aggressive program on seaweed farming in strategic areas to lower the country’s reliance on imported seaweed. At the same time, Alcala urged the local industry to work hand-in-hand with the national government in crafting the national seaweed roadmap. “It is imperative that the Philippines step up its production in order to be self-sufficient and an excellent opportunity to generate livelihood opportunities for our coastal communities,” he added. Asis Perez, Bureau of Fisheries and Aquatic Resources director, said that majority of the budget allocated for 2013 will be used to buy inputs for some 24,000 new seaweed farmers nationwide. “This will be in the form of farm inputs and technical assistance to increase the current production level by about 11 percent in one year,” Perez said in a telephone interview. Based on BFAR data, seaweeds production accounts to over 70 percent of the total volume of country’s acquaculture production in 2011 at 1.84 million metric tons. Seaweeds are marine resources of various economic importance either used as food and non-food or as a source of raw materials in many industries such as pharmaceuticals, cosmetics, pet feed and fertilizers, among others.
Sampaguita growers get farm tools, supplies Category: Agri-Commodities Published on Thursday, 15 November 2012 20:31 Written by Joel P. Mapiles / Correspondent LUBAO, Pampanga—Gov. Lilia Pineda distributed farm tools and inputs to the sampaguita growers as part of the Sampaguita Mabanglu Livelihood Program of the provincial government. Pineda has been an advocate of this livelihood project that emanated from Lubao during her term as municipal mayor. She said the program is sustainable as long as the people are willing to plant and the government will always provide them the latest technology. “Many sampaguita growers benefitted from this livelihood that is why the provincial government encourage all the kapampangan with vacant lot to try planting ang make this one of their sources of income,” Pineda said. Luningning Vergara, provincial public employment service office manager stated, the tool and inputs were purchased from the two hundred thousand pesos grant of the Department of Labor and Employment (DOLE) Regional Office III. “DOLE in the region supported the sampaguita as livelihood because they had seen the sustainability of the program,”Vergara said. Initially, the farm tools, sprayers, irrigation pump, foliar fertilizers and insecticides were given to sampaguita growers from the four barangays of Lubao namely San Francisco, Sto. Domingo, San Roque Dau I and II. According to Maria David, municipal agriculturist of Lubao, there are 335 sampaguita producers in their town,100 in Guagua and 173 in Floridablanca. All are planting productive crops and harvesting flowers on a daily basis.
Visayan fishers vow to support fishing ban in Visayan Sea Category: Agri-Commodities Published on Thursday, 15 November 2012 20:32 Written by Jennifer A. Ng / Reporter COMMERCIAL fishing operators in the Visayan Sea assured the government that they will fully support the implementation of the four-month closed season for sardines and mackerels that will start Nov. 15 this year. They made the commitment during the send-off ceremony for the Bureau of Fisheries and Aquatic Resourcesâ€™ (BFAR) patrol vessels at the Port of Sta. Fe in Bantayan Island, Cebu. Angel Buan, secretary of the Alliance of the Philippine Fishing Federation Inc. along with three other leaders of local fishing associations expressed optimism that with full compliance, the significant increase in sardine catch experienced after the closed season in Zamboanga Peninsula last year would be duplicated in the Visayan Sea. However, their members have requested the bureau to look into the possibility of having a uniform schedule for the closed season with that in the Zamboanga waters taking into account the latest findings of the agency indicating that the sardines from both waters belong to the same stock and have similar spawning period. BFAR director Asis Perez said in a statement that the roe of a single sardine could contain as much as 600,000 eggs. Assuming that less than one percent of this would reach maturity during the four-month period, this would assure us 500 additional fish for each spawning sardine spared, he said. Sardine and mackerel production in Western and Central Visayas, the two regions that straddle that portion of the Visayan seas covered by the closed season, comprised about 10-13 percent of the total production of these food fishes. However, the countryâ€™s production had shrunk by some 24 percent from close to 600,000 metric tons (MT) in 2010 to only about 472,000 MT in 2011. The closed season for sardine and mackerel contained in Fisheries Administrative Order No. 167 was issued and had remained in effect since 1989. However, this is the first time that government paid serious attention to its implementation, Perez stressed. A total of six MCS or Monitoring, Control and Surveillance vessels of the BFAR will head off to strategic points in the Visayan Sea to ensure the compliance of commercial fishing vessels starting Nov. 15. The closed season will end on March 15, 2013.
“The role of our MCS vessels is to serve our people, especially the fishers. They are there to help fishers and prevent them from violating the law,” said Perez. Leonida Jusay, president of Bisaya Alliance of Fisherfolk and Operators for Reform appealed to all fishermen to spare also the catching of small or juvenile sardines, locally known as “lupuy” so it could grow to full maturity. Perez also encouraged the commercial sardine fishing operators and other small pelagic fishers formally organize themselves into a council similar to the National Tuna Council and other commodity organizations in order for them to develop their development road map and ensure the sustainability of the resource.
Agusan Norte farmers earn P2M from first squash harvest Category: Agri-Commodities Published on Thursday, 15 November 2012 20:30 Written by Ramonito P. Maestrado BEFORE the introduction of Mindanao Rural Development Program (MRDP) in the municipality of Santiago, Agusan del Norte, people in the different barangays were not organized. Some were unresponsive and uncooperative in the activities of the barangays. They were indulged in their own respective livelihood, and farming seemed not to be their promising venture. Others were engaged in illegal mining, illegal fishing, illegal logging, and illegal-card games just to meet the family’s. In 2010, with the introduction of the MRDP Community Fund for Agricultural Development (CFAD) component, the lives of the people gradually changed. With the inputs from the municipal LGU, the Department of Agriculture, and loan proceeds from the World Bank, the residents organizes themselves into a people’s organizations (PO’s). They tried their best to be accredited in the municipal LGU, the Cooperative Development Authority (CDA), the Securities and Exchange Commission (SEC), the Department of Trade and Industry (DTI) or the Department of Labor and Employment (DOLE). Under the CFAD component, 10 people’s organizations benefited from the program. With a total project cost of P2.5 million, the local POs prioritized cattle, squash and abaca production. A total of 60 beneficiaries received the 60 heads of cattle. Another 60 beneficiaries got involved in squash and abaca production, with 60 hectares of lands allotted for cultivation. During a relatively short period of time, the MRDP is changing the lives of the people. With the implementation of the projects, the residents’ attitude changed dramatically. From being indifferent, they learned to become responsible and cooperative. More idle lands were developed into productive agricultural lands which led to an increase in the households’ incomes. Today, farmers are active in the different activities of the organization and the community, and are more empowered particularly in sustaining the projects funded by the MRDP. Ponciano M. Nino, PO President of Tagbuyacan Upland Farmers for Agricultural Development (TUFAD), said, “The MRDP greatly helped us increase our income through squash production, thereby letting our children continue their studies in college.”
The POs planted 20 hectares of land with squash. Their first harvest gave them P2 million. They have begun gathering their second harvest which appears to exceed their first harvest. **** Ramonito Maestrado is the head of the MRDP program in his hometown Santiago, Agusan del Norte. He attended a three-day seminar workshop on â€œWriting Success Stories for Development Projectsâ€? sponsored by the MRDP . He said this is his first attempt at writing a success story. http://businessmirror.com.ph/index.php/business/agri-commodities/3133-agusan-nortefarmers-earn-p2m-from-first-squash-harvest
Farmers, Luisita Massacre victims’ relatives storm Aquino home in QC Category: Nation Published on Thursday, 15 November 2012 20:41 Written by Jonathan L. Mayuga / Reporter FARMERS stormed President’s Aquino’s home on Times Street in Quezon City on Thursday to condemn the highest official of the land, a heir to the vast sugar estate of the Cojuangco family in Tarlac, for the violent dispersal that led to the brutal deaths of seven farmers eight years ago. The protest, spearheaded by the Alyansa ng mga Manggagawang Bukid sa Asyenda Luisita (Ambala) burned pictures of the President and his two uncles, Danding and Peping Cojuangco, to condemn the Cojuangco-Aquino’s alleged part in the violent dispersal of the striking farmers eight years ago. Seven protesters were killed, and scores were wounded and arrested during the dispersal. Violeta Basilio, mother of Jhayvie Basilio, the youngest among those killed during the dispersal, wants the “masterminds” behind the massacre punished for the crime, as well as the perpetrators. Florida Sibayan, Ambala vice chairman said members of the Cojuangco-Aquino family are the most accountable for the crime. “They were the ones who requested for police and military assistance,” she said. From day one when the farmers led by United Luisita Workers’ Union (Ulwu), Central Azucarera de Tarlac Labor Union and Ambala staged the picket, the Cojuangcos wanted the picketers dispersed, said Sibayan. It will be recalled that on November 16, 2004, government forces were ordered to disperse the farmers’ picket line in front of the sugar mill after Patricia Santo Tomas, then the secretary of labor, assumed jurisdiction over the labor dispute. “The Cojuangcos made sure that known leaders in the negotiation were secured before the military and police launched its attack on the striking farm workers to prevent bigger outrage from the public,” Sibayan said.The police who investigated the case said the protesters were infiltrated by suspected members of the New People’s Army. Both Ambala and Ulwu through the help of its mother federation, the Unyon ng mga Manggagawa sa Agrikultura, filed a petition to reopen the Hacienda Luisita case in 2010, but a resolution approved by former Ombudsman Merceditas Guitierez absolved former President Gloria Macapagal-Arroyo, former Armed Forces Chief of Staff Hermogenes Esperon, former Northern Luzon Command Chief Romeo Dominguez, former Central Luzon Police Commander Quirino de la Torre, Santo Tomas and the Cojuangcos. http://businessmirror.com.ph/index.php/news/nation/3138-farmers-luisita-massacre-victims-relativesstorm-aquino-home-in-qc
Philippine economy seen to slow down in 3Q Published on 15 November 2012 Hits: 483 Written by MAYVELIN U. CARABALLO REPORTER
Weather disturbances may slow down the Philippine economy in the third quarter of the year, however, a recovery was seen in the fourth quarter as the government plans to accelerate infrastructure and other capital outlays, a think tank said in a newsletter on Wednesday.
“The prolonged negative impact of the heavy rains and floods in August will certainly result in a slightly slower GDP [gross domestic product] growth in Q3 [third quarter], but a strong recovery is expected in 4Q [fourth quarter], as the national government plans to accelerate infrastructure and other capital outlays, and private firms are reporting slightly better-than-expected earnings in 3Q,” First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) Capital Markets Research said in the November issue of The Market Call. The think tank added the that positive external and internal assessments in late October upheld the growing and widespread belief that the economy is grounded on solid footings, and is likely to be in the throes of becoming a Tiger economy in the current decade. It cited different international lenders such as International Monetary Fund, World Bank and Asian Development Bank, which have raised their forecast for the country’s economic growth for 2012. It also mentioned Moody’s upgraded credit rating for the country’s foreign-denominated debt papers to a just a notch lower than investment grade, putting its evaluation at the same grade as those of Standard and Poor and Fitch Ratings. The think tank also praised the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) in cutting the policy rate by 25 basis points (bps) to 3.5 percent, a second recordlow achieved in 2012. “The latest rate cut should enable banks to lend more, with money growth expanding more than in 3Q. SDAs [Special Deposit Accounts] are likely to start declining with the narrowing interest rate spread between domestic and foreign Treasury bills,” it continued. Projected inflation rate On the other hand, the think tank projected that inflation rate may settle to 3.5 percent for the remaining quarters of the year, because of low crude oil prices and ample food supply. It stated that in terms of fiscal spending is expected to step up even more in the fourth
quarter as government agencies’ absorptive capacity improves and election spending begins. “Nonetheless, we do not expect the full-year deficit to only reach P220 billion, which is only 2 percent of GDP,” it asserted. Meanwhile, FMIC and the UA&P also announced that merchandise exports are likely to bounce back to positive growth territory, as the recoveries in East Asia, Association of Southeast Asian Nations and the United States gain traction. “Nevertheless, full-year growth should remain single-digit,” it added. “The peso will have an appreciation bias, but this will be moderated by a further 25 bps rate cut in December and macroprudential measures that the BSP is prepare to put in place to avoid further erosion of PH economy’s competitiveness,” the think tank concluded.
Top Story Posted on November 15, 2012 11:41:10 PM
‘Sin’ tax bill may be OK’d by Senate on Monday INTERPELLATIONS on the priority "sin" tax bill ended Wednesday evening at the Senate and the chamber could end up voting on the measure this coming Monday, a legislator said. "We now go to... the period of individual amendments," said Senator Franklin M. Drilon, ways and means committee chairman, referring to Senate Bill (SB) 3299. He said the target of final approval by Monday remained, although Senate action could be delayed as the bill still has to be certified as urgent by President Benigno S. C. Aquino III. "I do not know for a fact whether it has been certified," Mr. Drilon said. "If not, there should be no problem about certification." Presidential certification will allow the Senate to dispense with the constitutional requirement of three readings on separate days for any bill to be passed. Mr. Drilon last week sponsored a substitute to the original SB 3299 of Sen. Ralph G. Recto, the former ways and means committee chair, that was widely criticized as being watered-down. SB 3299 is now expected to generate about P45 billion in additional revenues, from P14 billion, via reforms to excise taxes on tobacco and alcohol products. House Bill 5727, approved in June, is expected to generate P30 billion in incremental revenues. Senate approval next week will pave the way for the formation of a bicameral conference committee that will reconcile the chambers’ versions of the "sin" tax reform, which the government wants passed before the year ends. http://www.bworldonline.com/content.php?section=TopStory&title=%E2%80%98Sin%E 2%80%99-tax-bill-may-be-OK%E2%80%99d-by-Senate-on-Monday&id=61542
Visayas Assured Of Enough Fish By Mars W. Mosqueda, Jr November 15, 2012, 5:56pm CEBU â€” The Bureau of Fisheries and Aquatic Resources (BFAR) is assuring the public that there will be no shortage of fish supply in the Visayas region as the three-month fishing ban in the Visayan Sea took effect starting yesterday, November 15. The agency made such pronouncement after residents in the Visayas expressed fears that a 90-day ban on sardines and mackerel fishing in the Visayasn Sea could result to a lack of supply for fish in the region. BFAR yesterday sent at least six vessels to patrol the Visayan sea to ensure that the fishing ban is implemented and the apprehension of violators. BFAR director Asis Perez earlier said the coverage of the prohibition on sardine and mackerel fishing will start from the mouth of the Danao River on the northeastern tip of Bantayan Island to Madridejos, through the light house on the Gigantes Island to Clutaya Island, and to Culasi Point in Capiz province. (Mars W. Mosqueda, Jr.) http://www.mb.com.ph/articles/381610/visayas-assured-of-enoughfish#.UKW4GWcTgok
Higher Excise Tax To Affect Tobacco farmers – Marcos November 15, 2012, 8:01pm Don’t kill the goose that lay the golden eggs. This was the plea of Senator Ferdinand R. Marcos Jr. on the Malacañang-favored “sin” tax bill that seeks to impose high excise tax rates on the tobacco industry. Tobacco is produced in Northern Luzon where Marcos and Senate President Juan Ponce Enrile come from. Enrile had vowed to protect the Ilocano tobacco farmers as his blood roots are in the Ilocano-speaking areas of Northern Luzon. He claimed that the “sin” tax bill appears to favor foreign brands of cigarettes. The Marcos plea was made during his interpellation Wednesday night of Senator Franklin M. Drilon, acting chairman of the Senate ways and means committee, who is pushing for a Senate approval of the increased tax on sin products – cigarettes and alcohol- that estimated to bring in P40 billion to P45 billion in government revenues. The tobacco farmers who produce are expected to be adversely affected by the imposition of higher excise tax on cigarettes should be extended help, Marcos said. A tobacco farmer in Ilocos Norte and Ilocos Sur has an average tobacco farm of about .7hectare, a little higher in La Union and other provinces such Pangasinan and those in the Cagayan valley. There are about 18,000 farmers engaged in tobacco farming. While the Drilon substitute bill seeks to collect some P26 billion from the cigarette industry, Marcos felt that the actual figure might be P20 billion. Marcos also questioned the assumptions of the Drillon measure which was substituted in place of the measure sponsored by Sen. Ralph G. Recto. Recto recently resigned as Senate ways and means committee chairman after Malacanang and the Department of Finance (DOF) derided his committee report that sought a P15 billion to P20 billion revenue take from the tobacco and alcohol industries, well below the DoF-favored bill. Marcos said that the Drilon measure would trigger smuggling of cigarettes, would not get the desired revenue collection estimate of P26.8 billion and would not reduce the number of smokers.
The son of the late President Ferdinand E. Marcos said he would introduce amendments to the Drilon bill when the Senate resumes regular session on Monday in a bid to have senators take a vote Monday night. Also as chairman of the Senate finance committee, Drilon is scheduled to submit for plenary debate the proposed 2013 P2 trillion national budget. These two urgent measures are targeted for approval before Congress goes into a fourweek Christmas break starting December 22.
JV Eyes Agro-Tourism Promotion By JONAS REYES November 15, 2012, 5:43pm OLONGAPO CITY â€” Congressman JV Ejercito has a vision of making this country into an agricultural hub for Southeast Asia, while also realizing tourismâ€™s full potential. Ejercito said that if ever he is blessed to become a senator, he will focus on the agricultural industry of the country. He plans to make the Philippines self-sufficient in terms of rice production. Ejercito said that with the current state the country is in, it would be best if the Filipinos would focus more on the land they have and hone their farming skills. Ejercito also said that tourism would be a major subject for him since he believes that an influx of foreign currency inside the country would lift the economy whilst creating more jobs for the unemployed. Meanwhile, Ejercito said that he is appealing to the government not to privatize hydropower plants in Mindanao and instead focus on dredging the river where the hydropower plants get power from. He added that the river that supplies the water to move the huge turbines of the plant are heavily silted and very much in need of dredging. Ejercito said that with production cost of less than P1 per kilowatt hour and a selling rate of P3 per kwh, it is only right that the hydroelectric power plant be maintained by the government.
Finance Posted on November 15, 2012 08:27:01 PM
Peso slides for the fourth trading session CORPORATE demand for dollars and risk aversion on the back of weak US retail sales data pushed the peso lower against the greenback for the fourth straight trading session yesterday. The local unit shed 14 centavos to settle at P41.26 per dollar against its P41.12-per-dollar close last Wednesday. The local unit has dropped a total of 21 centavos as of yesterday against its P41.05-per-dollar close last Friday. “At the start of trading we saw corporate demand for dollars, causing the peso to open weaker,” a trader said in a phone interview yesterday. The peso opened at P41.15 to the dollar, three centavos lower than its P41.12-per-dollar close the previous day. Companies purchase dollars during the middle and towards the end of the month to settle obligations. “There was also risk aversion among investors yesterday after the US reported weak retail sales data for October,” another trader said in a phone interview yesterday. The US Commerce department last Wednesday reported that retail sales in October dropped by 0.3% after a 1.3% rise in the previous month. “Weak retail sales data indicated low spending among consumers, will will drag business growth and US economic recovery,” the second trader explained. The peso is seen trading within the P41.15- to P41.35-per-dollar band today. Dollars traded yesterday rose to $688.25 million, higher than the $588.50 million traded the day before. -- Ann Rozainne R. Gregorio
Top Story Posted on November 15, 2012 11:43:42 PM
By Diane Claire J. Jiao, Senior Reporter
IMF’s Lagarde in town INTERNATIONAL MONETARY Fund (IMF) Managing Director Christine Lagarde is in the Philippines to meet with the government and the private sector to discuss the country’s role in the global economy. Ms. Lagarde arrived yesterday and is scheduled to call on President Benigno S.C. Aquino III in Malacañang today, accompanied by IMF Asia-Pacific Director Anoop Singh and IMF Resident Representative Shanaka Jayanath Peiris. Talks will be held with economic managers such as Finance Secretary Cesar V. Purisima, Budget Secretary Florencio B. Abad and Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo. At the top of the agenda will be the state of the global economy and its impact on Asia, which has driven growth during the downturn. As the IMF expects the global economy to grow by just 3.3% this year and 3.6% in 2013, attention is expected to focus to the ways in which the region can keep itself strong and resilient, particularly through further economic cooperation. "I am not talking about political integration or the kinds of monetary union we see in Europe and in various other parts of the world. Rather, I am talking about the broader promise of economic cooperation in two areas in particular-trade and finance," Ms. Lagarde said in Malaysia on Wednesday. Regional trade has tripled in the last decade. While China is typically the source of many finished products, the economic giant is also shifting towards consumption, which opens a large market to the rest of Asia. Financial integration, meanwhile, is lagging behind trade cooperation, with most portfolio investments in Asia sourced from advanced economies. Business leaders and students will also get to meet with the IMF chief, who clinched her post in July after the resignation of Dominique Strauss-Kahn. She is the first woman to lead the IMF. Ms. Lagarde is scheduled to head next to Cambodia for the East Asia Summit, but an IMF spokesman said she would be cutting her Asia trip to attend a crucial eurogroup meeting in Brussels. -- with a report from Reuters
Nation Posted on November 15, 2012 09:59:50 PM
Smoking among minors to stop with high prices ALMOST A million of Filipino youth are "current smokers" and a stick of cigarette priced at 10 will force them to stop the habit, said a Social Weather Stations (SWS)-commissioned survey.
"Eight percent of Filipino minors aged 13-17 are current smokers, 4% are previous smokers, while the bulk of 88% are non-smokers," according to the survey commissioned by Health Justice Philippines and presented to the Senate media yesterday. The "current smokers" "usually smoke five cigarettes a day," the report said. The survey found out that "current smokers" equivalent to 832,000 Filipino youth will stop smoking if the price of cigarette per stick is raised to 10. The minors who have stopped smoking numbered 469,000 while non-smokers numbered 9.4 million, Vladymir Joseph V. Licudine said in a press conference, citing the survey results. Health and demography committee chairman Senator Pilar Juliana "Pia" S. Cayetano said in the same event that a stick of cigarette today costs 1.60. Current smokers’ "reasons for smoking" a particular brand are taste (34%) and price (25%), the survey said. The survey was conducted from Aug. 24-27 using face-to-face interviews of 1,200 youth. Asked to comment on youth smoking, Ms. Cayetano said: "There’s no single solution. It has to be a combination of these measures (Senate Bills 3299 and 3283)." SB 3299 is the chamber’s measure restructuring excise tax on tobacco and alcohol products. The measure, as expected by health advocates, will stop the youth from smoking as cigarette prices will increase. SB 3283 seeks to require "picture-based health warnings" on packages of cigarette and tobacco products. It is pending second reading approval. "I’m hoping na umusad siya ngayon kasi [that SB 3283 will advance]… it will be a partner bill to the sin tax," Ms. Cayetano added. A similar measure at the House of Representatives is pending in the committee. --Kathryn Mae P. Tubadeza http://www.bworldonline.com/content.php?section=Nation&title=Smoking-amongminors-to-stop-with-high-prices&id=61519
Basel 1.5 easy for many rural banks — RBAP prexy • •
Written by Ed Velasco
Friday, 16 November 2012 00:00
Majority of the members of the Rural Bankers Association of the Philippines (RBAP) didn’t have hard time adopting to Basel 1.5 effective January 2012 because majority of the association’s members are stable and sound, the association’s president confirmed.
Edward Garcia, RBAP president, said despite the raise in capital charge on real and other properties acquired (Ropa) and operational risk, RBAP members were able to comply to the global banking reforms.
“There are some that have encountered difficulties and some that have no problems at all. We do not have the complete statistics,” Garcia explained to The Daily Tribune.
There are around 600 RB head offices in the country with combined branches of 2,700, according to the group’s website.
The official said majority of their members didn’t have hard time because their capital adequacy ratio (CAR) is 18 percent, which is way above the Bangko Sentral ng Pilipinas (BSP)-set allowable minimum limit of 10 percent to 12 percent.
“The industry CAR is around 18 percent so way above the requirement of 10 percent,” the RBAP president explained.
He said the raise in capital charge for both facets is hard to meet, especially if a bank, whether RB, thrift, universal or commercial.
“Any capital charge will have an impact on CAR which is the ratio being closely monitored by BSP. Any bank that will fall below will be required to infuse fresh capital or face closure,” he said.
He pointed out that aside from high CAR, many of RBAP members are stable as far as nonperforming loan is concerned.
Garcia earlier explained that the industryâ€™s NPL ratio is around 2.15 percent, way within the BSP limit of two to 2.5 percent.
Under Basel 1.5, all stand alone RBs and thrift banks were mandated to raise capital charge on Ropa from 10 percent to 15 percent and on operational risk from four to 12 percent of average gross income.
â€œCapital charge on operational risk of four to 12 percent of average gross income has also been included to take into account other normal bank operating risks,â€? BSP deputy governor for supervision and examination sector Nestor Espenilla was quoted earlier.
Tulong mula kay Sen. Marcos at Enrile, inaasahan ng mga tobacco farmers Posted: Thu, 15 Nov 2012 16:09:26 +0000
LAOAG CITY â€“ Dalawang senador ang inaasahan ng mga tobacco farmers sa Ilocos na lalaban para sa kanila kontra sa kontrobersiyal na Sin Tax Bill. Ayon kay Ernesto Calendas, national president ng Tobacco Growers Association, inaasahan nila na sina Sen. Bong Bong Marcos at Senate President Juan Ponce Enrile na tatayo para sa kanila sa Senado. Aniya, magiging patas sana ang mga senador sa pagsasabatas sa naturang panukalang batas at siguruhing walang masasaktan at lalong maghihirap. Mariing kinokontra ng mga tobacco farmers ang pagsasabatas sa Sin Tax Bill dahil siguradong ito ang magiging dahilan ng pagkamatay ng industriya ng tabako at lalong maghirap ang kabuhayan ng mga magsasaka. Una nang inihayag ng Sen. Frank Drilon, chairman ng Senate ways and means committee, na walang dapat ang mga magsasaka. Sa kikitain umano mula sa P40 bilyon sa buwis ay P6 bilyon ang ilalaan sa mga magsasaka upang masyportahan sa kanilang kabuahayan. Ani Drilon, kung tutuusin mas malaking porsyento ang inaangkat na raw materials ng mga cigarette manufacturers kaysa kinukuha sa mga lokal na magsasaka. http://feeds.feedburner.com/blatest-news
PH ship tagged in ‘fish laundering’ Published : Friday, November 16, 2012 00:00
FISHING vessels registered in the Philippines, Indonesia and Cambodia have been filmed “laundering” illegally caught tuna, environment activist group Greenpeace International said Thursday. Greenpeace said it recorded the transferring of skipjack and yellowfin involving four ships just outside Indonesia’s exclusive economic zone in the Pacific Ocean on Wednesday, with the tuna likely meant for the canned market. Two Indonesian vessels and one Philippine ship were transferring their hauls on to the Cambodian boat so that the location of their catches would remain secret, according to Greenpeace oceans campaigner Farah Obaidullah. Obaidullah was speaking by telephone from aboard Greenpeace’s MY Esperanza, which has been sailing through the Pacific looking for illegal fishing activities and is continuing to follow the Cambodian-registered ship. Obaidullah said the practice of transferring tuna from one vessel to another in international waters was a common way for companies to hide their illegal fishing in various countries’ exclusive economic zones. AFP http://www.journal.com.ph/index.php/news/national/41640-ph-ship-tagged-in-fishlaundering
Save tobacco industry — Marcos Published : Friday, November 16, 2012 00:00 Article Views : 15 Written by : Bernadette E. Tamayo
SENATOR Ferdinand Marcos Jr. has appealed to the government not to totally destroy the local tobacco industry in its desire to increase the taxes on cigarette products in order to generate Php40 billion revenue for health programs. He also urged the government to assist tobacco farmers who will be affected by the proposed Php40 billion “sin tax” measure which he described as “unrealistic.” The government needs an additional Php26 billion to finance the enrolment of five million more poor Filipinos under PhilHealth. Marcos is set to introduce amendments to the substitute sin tax bill sponsored by Sen.Franklin Drilon, acting chairman of the Senate Ways and Means Committee. “Maayos na ang sistema ngayon. Kung ang nais nilang itaas (ang buwis) h’wag biglain dahil masisira ang buong industriya. Do not kill the goose that lay the golden eggs,” Marcos said in a briefing. Marcos, who hails from Ilocos Norte, one of the tobacco producing provinces, said that at least 18,000 farmers will be affected in his hometown by the planned steep increase in the prices of locally-produced cigarettes. “Kung papalitan ang sistema alalayan ang ma-di displace. Huwag mong wasakin ang industriya. Ang proposal nila ay
makakakolekta ng P26 billion. Sa aking interpelasyon kahapon (kay Senator Drilon) hindi aabot doon. Ang sin taxes ay napaka- kumplekado,” he said. Marcos also expressed concern over proposals to put pictures on cigarette labels that depict the ill-effects of smoking. “It will affect the tobacco industry,” he said. http://www.journal.com.ph/index.php/news/national/41637-save-tobacco-industry-marcos
Recto slams bloated tobacco tax hikes Published : Thursday, November 15, 2012 00:00 Article Views : 76 Written by : Marlon Purificacion
SENATOR Ralph Recto has expressed disbelief over the Department of Finance’s bloated figures and flawed assumptions in projecting incremental revenues from the proposed excise tax increases on tobacco products, where consumers are presumed to buy even more expensive brands despite higher prices triggered by a tax shock. In his interpellation on the proposed excise tax measure presented by Sen. Franklin Drilon, Recto asked how the DOF expects to collect more revenues under the absurd assumption that smokers would be expected to “uptrade” instead of “downtrade” when taxes are excessively increased. Consumers usually downtrade or turn to less expensive cigarettes to be able to continue their smoking habit when retail prices of their favorite brands increase. But under the DOF scenario of raising an additional Php40 billion in revenues from tobacco excise tax hikes, it expects smokers to continue their habit by buying costlier brands. Recto noted that the tax category for the premium, imported brands is even called the “phantom tier” because the government does not collect a significant amount of taxes from them. Premium imported brands have zero market share under
the current excise tax system. In 2011, low-priced brands accounted for 2.97 billion packs of cigarettes sold, representing a 64% share of market. Mid-priced brands accounted for 451 million packs or 10% of the market, and high-priced cigarettes, 1.1 billion packs or 25%; the premium important brands had negligible market share, Recto noted. But under the Drilon bill, the DOF assumed that this phantom tier would, out of the blue, generate sales of 955 million packs and enable the government to collect fresh revenues amounting to Php27 billion, which is more than half of the Php40 billion target. http://www.journal.com.ph/index.php/news/national/41545-recto-slams-bloatedtobacco-tax-hikes
DOH starts 5-year tobacco control Â Published on 16 November 2012 Written by LYDIA C. PENDON
ILOILO CITY: The Department of Health (DOH) has embarked on a five-year national tobacco control strategies to arrest and reduce smoking and second-hand smoke from cigarettes. Dr. Ivanhoe Escartin, director of the National Tobacco Control Coordinating Office, National Center for Health Promotion of DOH, said that the 2011-2016 national program will focus on compliant laws and policies aim to the reduction of smokers and second-hand smokes. Escartin was in Iloilo City on Thursday of November 15, to lead in the dissemination forum by curbing the tobacco epidemic through implementation of consolidated tobacco control efforts in the regions and the whole country. Among the strategies are the strategy to increase prices of cigarettes through the sin tax, graphic health warning on the dangers pose by smoking, reduction of second-hand smoke in designated smoking areas, and the expanded fight against tobacco advertising, promotion and sponsorship and a cohesive program on smoking cessation with clinics not only in health centers and health stations but also in schools, work places and shopping malls. Escartin said that 28.3 percent of the adult population or roughly 17 million Filipinos are smokers and the figure needs to be reduced drastically. Escartin said that DOH is targeting a modest 50 to 60 percent of total local government units in the country by 2016 as Red Orchid awardees showing local government units concerns against smoking.
On the other hand, Executive Director Iñigo Garingalao of Iloilo City’s anti-smoking task force, reported that the city is a Red Orchid Awardee given by the health department. However, Garingalao added that the city does not have yet an ordinance against outdoor advertising cigarette billboards. With this discrepancy, the task force is working closely with coordinating government agencies to get down cigarette billboards in five city barangays. http://www.manilatimes.net/index.php/news/regions/35414‐doh‐starts‐5‐year‐tobacco‐control
P265M to boost seaweed production Published on 16 November 2012
Written by JAMES KONSTANTIN GALVEZ
The Department of Agriculture (DA) has earmarked P265 million for 2013 to boost seaweed production in the country. In his Twitter account, Agriculture Secretary Proceso Alcala said that the amount would be use for a more aggressive program on seaweed farming in strategic areas to lower the country’s reliance on imported seaweed. At the same time, Alcala urged the local industry to work hand-inhand with the national government in crafting the national seaweed roadmap. “It is imperative that the Philippines step up its production in order to be self-sufficient and an excellent opportunity to generate livelihood opportunities for our coastal communities,” he added. Asis Perez, Bureau of Fisheries and Aquatic Resources director, said that majority of the budget allocated for 2013 will be used to buy inputs for some 24,000 new seaweed farmers nationwide. “This will be in the form of farm inputs and technical assistance to increase the current production level by about 11 percent in one year,” Perez said in a telephone interview. Based on BFAR data, seaweeds production accounts to over 70 percent of the total volume of country’s acquaculture production in 2011 at 1.84 million metric tons. Seaweeds are marine resources of various economic importance either used as food and non-food or as a source of raw materials in many industries such as pharmaceuticals, cosmetics, pet feed and fertilizers, among others. http://www.manilatimes.net/index.php/business/top‐business‐news/35404‐p265m‐to‐boost‐seaweed‐ production
Foreign portfolio investments reach $1.5B Published on 16 November 2012 Written by RAADEE S. SAUSA
Portfolio investment transactions for October reached $1.5 billion, up by 1.7 percent and 67.9 percent for September 2012 and October last year, respectively, as a result of Moody’s upgrade of the Philippines’ credit rating, an upgrade by the Asian Development Bank of its economic growth forecast for the Philippines, encouraging third quarter corporate earnings reports and economic fundamentals, the central bank said on Thursday. Bangko Sentral ng Pilipinas (BSP) said that outflows also rose by 35 percent from $1.1 billion a month ago to $1.5 billion, yielding net inflows of $40 million. The net inflows were much lower than those recorded last month ($402 million) and a year ago ($237 million) as profit taking triggered heavy sell-offs in listed securities, even as registered invetments in these instruments rose by $38 million on a monthly basis, it added. The BSP, meanwhile said that the United Kingdom, United States, Singapore, Switzerland and Hong Kong were the top five investor countries for the month. The US continued to be the main beneficiary of outflows from investments. Registration of inward foreign investments with the BSP is voluntary. It entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of dividends/profits/earnings that accrue on the registered investment. http://www.manilatimes.net/index.php/business/top‐business‐news/35401‐foreign‐portfolio‐ investments‐reach‐1‐5b
Hot money plunges in Oct. FOREIGN portfolio investments plunged in October as the Philippine Stock Exchange (PSE) saw heavy sell-offs, the Bangko Sentral ng Pilipinas (BSP) said. INVESTORS pocketed gains from stock investments in October, triggering $1.5 billion in foreign portfolio investment outflows that month. -- AFP
Net inflows of the so-called “hot money” -- because of the ease with which they enter and leave the country -- fell to $40.16 million last month, 83.09% lower than the $237.44 million recorded the previous year and 90% less than the $402.43 million posted in September. “The net inflows were much lower than those recorded last month and a year ago as profit taking triggered heavy sell-offs in PSE-listed securities, even as registered investments in these instruments rose...” the BSP said in a statement yesterday. Gross inflows of hot money hit $1.538 billion in October, 67.89% more than the $916.25 million the year before. It was also the second-highest level seen this year, after the $2.156 billion notched in July. This surge was due to the continued strength of the Philippine economy, particularly as Moody’s Investors Service raised the country’s credit rating to Ba1 from Ba2, the central bank cited. Other factors included the Asian Development Bank’s higher forecast of 5.5% for Philippine growth this year from the initial outlook of 4.8%. Corporates also did well in the third quarter while macroeconomic fundamentals -- gross domestic product, peso, interest rates and inflation -- continued to be strong. Despite these gains, gross outflows totaled $1.498 billion, 120.68% more than the $678.82 million last year. It was the second-highest since the $1.799 billion in February. The United Kingdom, the United States, Singapore, Switzerland and Hong Kong were the top investor countries for the month. The US was the main beneficiary of outflows of foreign portfolio investments. Broken down based on the investment instruments, $262 million went to peso-denominated government securities and $34 million to peso-denominated time deposits, while $256 million flowed out from PSE-listed securities and $50,000 from money market instruments. For the 10 months to October, net inflows of hot money reached $2.664 billion, with gross inflows of $14.71 billion and gross outflows of $12.046 billion. The BSP has forecast that net inflows of hot money would hit $4.5 billion this year, 10% more than the $4.078 billion in 2011. This outlook, though, is up for review this month. -- Diane Claire J. Jiao
EastWest Bank net up 12% on trading, lending income EAST WEST Banking Corp. (EastWest Bank) posted a 12% increase in its net income in the nine months to September, after it took advantage of trading opportunities in the first half and healthy demand for loans among individuals and private firms. In the report it filed with the Philippine Stock Exchange, the Gotianun-led bank reported P1.36 billion in net income as of September, up from the P1.21 billion in the year before. Its net interest income climbed by 22% to P4.32 billion as total loans increased by 36% to P60.97 billion. Corporate loans grew by 35% to P28.14 billion; auto loans by 39% to P10.7 billion; mortgage loans by 52% to P6.02 billion; and credit card receivables by 27% to P15.12 billion. EastWest Bank said its net interest margin -- roughly, the spread between the interest earned from loans and the interest paid on deposits -- rose to 7% from 6.5% due to robust loan growth, particularly, consumer loans, the reduction in high-cost deposits, and the increase in current and savings account deposits, which replaced the high-costing deposits. EastWest Bank’s non-interest income, meanwhile, surged by 84% to P2.9 billion, on the back of higher gains from securities and foreign exchange trading. Securities trading yielded P1.17 billion, up by 410% from a year earlier, while foreign exchange trading brought in P193 million, 71% more from last year. “[T]he bank took advantage of the favorable market conditions during the first half of the year,” EastWest Bank said. Service charges, fees and commissions rose by 17% to P1.29 billion due to “expansion of [EastWest Bank’s] business, particularly with respect to fees generated by retail banking and consumer lending.” Sale of repossessed assets produced P90 million, 187% higher than a year ago. On a quarterly basis, the bank earned P446 million in the third quarter, P450 million in the second, and P460 million in the first. As of September, its return on equity, a key measure of performance, was 12.3%, falling from 16.2% in September last year. “This was expected as the bank has yet to leverage the P4.75 billion in new capital from [the Filinvest Development Corp.] and the [initial public offering],” it explained. FDC, majority owner of EastWest Bank, made capital infusions in the bank last year. The bank also launched an IPO in April, and listed on the stock exchange in May. Bank shares gained 70 centavos or 2.8% to close at P25.45 apiece yesterday. Since May 7, they have gained 29%.
On the expenditure side, EastWest Bank’s operating expenses rose by more than half to P5.77 billion from P3.67 billion as it continued to spend on expansion, targeting 230 branches by the end of the year. It currently has 217 branches nationwide. EastWest Bank said it is confident hitting its P1.8 billion target for the year as it continues to focus on growing its consumer and mid-market businesses.