PSEi breaches 5,700 for first time to cap winning streak Category: Top News Published on Tuesday, 04 December 2012 20:41 Written by Miguel R. Camus with Mia M. Gonzalez / Reporters The benchmark Philippine Stock Exchange index (PSEi) closed above 5,700 for the first time on Tuesday, capping a seven‐day winning streak. The PSEi closed up 0.59 percent to a record 5,706.28 on Tuesday. All sub‐indices ended in the green, led by property firms. Investors snapped up shares of SM Prime Holdings Inc., the country’s largest mall developer, and BDO Unibank Inc., the nation’s largest lender, ahead of the holiday season, when consumer spending typically ramps up. Analysts said the PSEi, which is up over 30 percent since the start of the year, continues to benefit from excess liquidity as investors overseas turn to high‐growth economies in search of better returns. “It’s really hard to stop a train full of money,” Astro del Castillo, managing director at First Grade Finance Inc., said in a phone interview. “The momentum is there, with positive figures from the third‐quarter [gross domestic product, or GDP, growth].” The country’s growth, as measured by GDP, jumped 7.1 percent in the third quarter, its fastest pace since 2010, the National Statistical Coordination Board said last Wednesday. “This encourages investors to position for next year,” del Castillo said. He noted that while profit‐taking could occur given gains over the last week, investors, according to him, believe that there remains some “upside” to current levels moving forward. President Aquino said earlier that the performance of the PSEi leaves no room for doubt that it would soon breach the 6,000 level. He made the fearless forecast on Monday night at the PSE’s 20th anniversary at the Makati Shangri‐La Hotel in Makati City, where he said that “concrete action” is necessary to sustain the gains in winning investor confidence, as reflected in the stock‐market performance. “The way things are going now, there is no reason not to believe that the stock exchange will continue to perform well, and that we will be able to realize our dream, as promised by Eusebio Tanco, of breaking the 6,000 index, perhaps in the next 28 days,” the President added. Mr. Aquino congratulated the PSE for posting 56 highs in the last two‐and‐a‐half years, but said that “every achievement must not only be cause for celebration, but must also motivate us to work even harder.”
“The entire world has begun to train their spotlight on us. Let us prove to them, we are not yet done, we have more to show, and we will build even greater things on top of the foundations we have already laid down,” he added. The President said investor confidence may be bolstered by showing “prospective and active investors alike that the Philippines is open for business under new management, management that is putting an end to backroom deals and suspect transactions, so that business, trade and investment can flourish in an honest and level playing field.” “The government, through the Securities and Exchange Commission [SEC], has already put in place a number of reforms toward this goal, specifically in your sector,” he added. Mr. Aquino cited the Investor Protection and Surveillance Department of the SEC created in 2011 to guard against insider trading and other illegal investment schemes. He said SEC is completing a Capital Market Development Blueprint to improve and expand the Philippine capital market, including proposals to strengthen investor education. According to the President, the PSE Bell Awards for Corporate Governance helps promote integrity by honoring outstanding listed companies and trading participants compliant with relevant regulations, who contribute to stock‐market development and who possess best practices at par with international standards. He said that such measures are important “because investors need to know we are serious about protecting their interests, especially now that confidence in the Philippines is growing by leaps and bounds.” http://businessmirror.com.ph/index.php/news/top‐news/4578‐psei‐breaches‐5‐700‐for‐first‐time‐to‐ cap‐winning‐streak
IMF relaxes stance against capital‐control procedures Category: Top News Published on Tuesday, 04 December 2012 20:35 Written by Jun Vallecera / Reporter The International Monetary Fund (IMF) has softened its hardline position against capital‐control mechanisms in countries experiencing large volume of fund flows, saying such was now permissible in countries with excess foreign‐ currency reserves, for example. This was learned on Tuesday from Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr., who said in a text message that capital controls should be allowed in countries whose local currency was undervalued, its hoard of foreign currency was deemed adequate and whose economy was starting to overheat. “I think that’s a big change from the original position of the IMF, which said that member‐countries should avoid capital controls. This is a recognition that things have changed, that the world has changed,” he added. A number of analysts, including local‐currency traders and the Manila units of HSBC, have pointed out that the local currency the peso still has room to appreciate down the line and could, in fact, be expected to hit P38.50 per dollar or even higher over the next one or two months. That the peso has room to gain more strength relative to the most widely traded currency in the world, the US dollar, is an indication that its value has not been optimized. Latest data showed the peso having gained value by an average of 0.54 percent to P40.914 per dollar at the Philippine Dealing and Exchange Corp. the past four weeks and the flow of foreign funds moved inward with each proof of continued improvement or consolidation of the country’s macroeconomic underpinnings. The country’s foreign currency reserves, an indicator of capacity to finance maturing foreign obligations or pay for imported purchases such as oil for the various industries, stood at more than $82 billion, roughly 11 months of import of services and goods. Given the global threshold of just three months, the country’s reserves are nearly four times the acknowledged minimum level. On the matter of the economy overheating, however, Tetangco said this was far from happening given benign actual inflation of just 3.1 percent in October or at the lower end of the target range of 3 percent to 5 percent this year.
While the outlook for inflation acting up over the next 18 to 24 months forward cannot be ruled out, he added that such could not act up beyond 3 percent to 5 percent going forward either. “With the increasing integration of economies and financial markets, there are developments now that can affect the performance or the situation in a particular member even if that member has appropriate policies in place. But this is something that has got to be assessed on a country‐by‐country basis. Country‐specific conditions have to be considered in assessing whether capital controls are going to be appropriate for a particular country,” Tetangco said. He added that the BSP had been careful to approach the matter of capital controls from the point of view of the market. “What we have done is really to enhance our tool kit which now includes macro‐prudential measures. So it is not only the policy rate that is being used now [but] other tools are [also] being used like greater flexibility in the exchange rate, increase in the gross international reserve, forex [foreign‐exchange] liberalization, prepayments and other macro‐prudential measures, all of which we have used. So far, I would say that we’ve been able to manage the situation with the use of these tools,” Tetangco said. He meant tweaking not just the monetary levers including the rate at which the BSPO borrows from and lends to banks but such other tools as appropriate changes in the banks’ deposit reserves, capital charges on non‐deliverable forwards and similar instruments controlling peso‐liquidity levels in the system. “We may have to further enhance some of the tools in the tool kit. We are looking at that and see if there is a need to adjust the measures that we have adopted so far or if new measures are needed,” Tetangco said without being specific. http://businessmirror.com.ph/index.php/news/top‐news/4576‐imf‐relaxes‐stance‐against‐capital‐ control‐procedures
October borrowings doubled due to Treasury bonds’ launch Category: Top News Published on Tuesday, 04 December 2012 20:31 Written by VG Cabuag / Reporter Borrowings of the national government almost doubled in October as a result of the offering of the Retail Treasury Bonds (RTBs) during the month, data from the Bureau of Treasury showed. According to the data, the government’s gross borrowings reached P198.77 billion, more than 98 percent higher than the P100.15 billion in the same month last year. The increase was due to the launching of the RTBs, in which the government raised P188 billion in October with a single tenor of 25 years and a coupon rate of 6.125 percent. Domestic borrowings increased to P196.78 billion from P96.18 billion last year, while foreign borrowings dropped to P1.99 billion from P3.96 billion in 2011. The government sold P7.95 billion worth of Treasury bills and P831 million worth of Treasury bonds. Program loans amounted to P1.28 billion in October, while project loans totaled P702 million. The government’s total gross borrowings for the full year are programmed at P668.8 billion, 75 percent of which will come from domestic sources, while the remaining 25 percent will be sourced from foreign creditors. The Aquino administration borrows regularly from both domestic and international sources to augment the current budget. As there are still some issues in public spending, the government’s borrowing effort has also been turned into an exercise in liability management, which is meant to lengthen the country’s debt maturities and to buy back expensive papers. For January‐October, the government’s total gross borrowings stood at P799.81 billion, a 65‐percent increase from last year’s P484.94 billion. Gross domestic borrowings went up to P700.39 billion from P319.5 billion last year, while funds borrowed from foreign sources stood at P99.42 billion, down from the P165.44 billion in 2011. At the moment, the government borrows more domestically to shield the debt from external shocks due to the rise of the dollar against the peso and also to take advantage of the liquidity of the market. The Aquino administration hopes to bring the domestic borrowings to 80 percent in the coming years from the current 75 percent. For the full year, the government has a budget deficit ceiling of P279 billion, but only more than half of the amount has been reached as of October.
Palace order to fast‐track distribution of farmlands Category: Top News Published on Tuesday, 04 December 2012 20:30 Written by Mia M. Gonzalez / Reporter President Aquino has created an inter‐agency committee that will support the government’s rural‐ development efforts by studying and implementing reforms in institutional arrangements for land distribution and management, and provision of support services to farmers and fishermen. The President created through Administrative Order (AO) 34 the Inter‐Agency Committee on Institutional Arrangements for Land Management and Agricultural Support Services Delivery Across Rural Development Agencies, to be headed by the director general of the National Economic and Development Authority (Neda). “The committee shall facilitate the implementation of reforms in the institutional arrangements for land distribution, management and delivery of support services to farmers and [fishermen] as a means of enhancing the development efforts of government for the rural sector,” AO 34 stated. In issuing the order, the President cited the “need to create a committee to undertake a study on the institutional arrangements that will ensure the continuity and streamlining of land distribution and management, the delivery of agricultural support services, and the resulting reorganization and rationalization of concerned government agencies.” He said poverty alleviation, especially in rural areas, is a priority concern of the government. Mr. Aquino said that implementation of the land acquisition and distribution component of the Comprehensive Agrarian Reform Program (Carp) is to be completed by June 30, 2014. “The delivery of support services, agrarian‐reform beneficiary development and the smooth transfer of the mandate of the Department of Agrarian Reform [DAR] to the Department of Agriculture [DA] are continuing concerns of the government to ensure that the gains of land distribution under the Carp are sustained,” he added. Members of the committee are the heads of the DAR, DA, Departments of Environment and Natural Resources, of Justice, of Budget and Management and the Land Registration Authority. Under AO 34, the Development Academy of the Philippines and the Career Executive Service Board are encouraged to support and assist the committee “in the study and crafting of the reorganization and rationalization plans as may be called for to effect the institutional arrangements and transition.”
The Cabinet Cluster on Economic Development and the Neda Board are also enjoined “to review, study and endorse the results of the study, as well as the executive issuances and legislative measures that may be formulated.” The committee is expected to conduct a study on the continuity of land distribution and management and the provision of support services for the agriculture and fisheries sectors. The study will consider several factors, among them, the formulation of a transition plan for the post‐Carp scenario. The committee will submit an update report to the President in six months. http://businessmirror.com.ph/index.php/news/top‐news/4573‐palace‐order‐to‐fast‐track‐distribution‐ of‐farmlands
PHL can raise governance bars to be among Asia’s best by 2020 Category: Top News Published on Tuesday, 04 December 2012 20:29 Written by Miguel R. Camus / Reporter The non‐profit Institute of Corporate Directors (ICD) is keen on pursuing various reforms that would help raise the Philippines’s corporate‐governance standards and enable the country to be among the best in the region by 2020, a top executive said on Tuesday. ICD President Rex Drilon II told a media briefing that while the Philippines has been improving in some aspects of corporate governance, such as auditing and accounting, it continues to lag behind in other aspects, such as enforcement and perceived investors’ protection. One widely followed measure for corporate governance is the CG Market Watch, prepared by CLSA Asia‐ Pacific Markets, where the Philippine stayed near the bottom out of 11 nations in the region in recent years. The CG Watch 2012 showed that the Philippines ended at the 10th spot, an improvement from its bottom ranking in 2010, but unchanged from its 2007 rank. “Our target in ICD is to bring the Philippines from second to the last to the upper third by 2020,” Drilon said, adding that the country by then could unseat Thailand, which is ranked third after Singapore and Hong Kong in the CG Watch 2012. According to him, the 2020 target is just the “official” horizon set by ICD, but he said that the organization would like to see faster progress, given the market integration of the Association of Southeast Asian Nations, or Asean, by 2015. “While we say 2020, we really would like to do many things by 2015,” Drilon added. To achieve this goal, ICD turned to the Asian Corporate Governance Association, which came up with a list of suggestions. These include possibly contentious moves, such as revising regulations relating to preemption of rights, membership of auditing firms with the International Forum of Independent Regulators, more detailed data on enforcement and faster release of audited accounts. A measure disclosed before and which required more detailed filings on directors’ pay and bonuses was met with resistance. Drilon said a potential middle ground would be to reveal the “range” of compensation instead.
The Philippines in September formally adopted the Asean Corporate Governance Scorecard, which is seen to boost the profile of local corporations in line with the broader goal of promoting Asean as an asset class. Indonesia, Malaysia, Singapore, Thailand and Vietnam have adopted the scorecard. http://businessmirror.com.ph/index.php/news/top‐news/4572‐phl‐can‐raise‐governance‐bars‐to‐be‐ among‐asia‐s‐best‐by‐2020
Fish luring devices divide Asia‐Pacific tuna meet December 4, 2012, 8:04pm MANILA (AFP) ‐‐ Tuna‐harvesting nations of the Pacific argued at a key meeting in Manila Tuesday over how best to regulate devices that attract the giant fish, amid growing concern over depleted stocks, officials said. A call to extend an annual ban on fish aggregating devices (FADs) to four months was among the most contentious issues at the Western and Central Pacific Fisheries Commission meeting. An annual July‐September ban on FADS is already in place in waters that account for half the world's tuna catch, and a four‐ month ban would hurt small Pacific nations the most, said Palau fishing official Nanette Malsol. "We don't want to put any disproportionate burden on smaller countries," said Malsol, who chairs Parties to the Nauru Agreement (PAN), a coalition of small Pacific island nations. She said her group opposes the extension of the so‐called "closed period" unless smaller nations are compensated. FADS are made of buoys tethered to the ocean floor. They can attract huge numbers of fish, allowing boats to haul them in quickly rather than spending time and fuel searching for schools of tuna. Critics say fishing with FADS means juvenile fish are snared, as well as bycatch that includes threatened species like sharks, rays and sea turtles. About a dozen Greenpeace delegates staged a protest at the venue, calling for a total FADS ban to allow tuna stocks to recover. "FADS must be banned if we want to see our tuna stocks survive," the environmental campaign group's delegation head Lagi Toribau said. "Not only does it contribute to the rapid decline of fish stocks, it also results in a large amount of unwanted bycatch." Other delegates told AFP none of the 30 member‐nations and territories attending, including the US, China, Japan and Australia, favored a total FADS ban but many of them recognized the need to limit their use. However, they said they disagreed on how this should be done. Malsol said the American delegation opposed compensation for smaller nations. US‐based Pew Environment Group, which also sent delegates to the meeting, estimates between 47,000 and 105,000 FADS are in use worldwide. The International Union for Conservation of Nature (IUCN) has previously warned that global tuna stocks are fast reaching the limits of sustainability due to a lack of comprehensive catch‐limits.
Biogas Investment In Valenzuela Imperiled By Expropriation By CARLO S. SUERTE FELIPE December 4, 2012, 8:02pm MANILA, Philippines ‐‐‐ An ordinance seeking to expropriate a portion of 15‐hectare in Barangay Lingunan, Valenzuela is being questioned by the private company that owns the land. Geo Specialist said the 1‐hectare lot sought to be expropriated is part of the 15‐hectare property it owned that it allowed to be used by the Valenzuela government at the time for former Mayor Jose Emmanuel Carlos as a dumpsite. The company said the move in the city council to pass an expropriation ordinance is hampering its plans to use the property as waste‐to‐fuel power plant. Adee Uson, Geo Specialist spokesperson, said the company has entered into an agreement with ASEA Gaz Asia Ltd and its local partner Aboitiz Equity Ventures (AEV) to developed the property into a biogas plant. Recent tests showed that the property, after more than a decade of being used as a waste landfill, now has the potential to produce liquid biomethane (LBM) in commercial quantity. Asea Gaz Asia and AEV signed a memorandum of agreement last June in London which was witnessed by President Noynoy Aquino. The agreement covered a $150‐million investment into a biogas plant. However, the plan may be hampered by the more to expropriate part of the planned site for the biogas plant. "We are not questioning the process of expropriation but rather the existence of a public purpose behind it. As citizens of Valenzuela, we are concerned about how the city's limited resources are spent," she said. Uson said the establishment of a biogas plant in Valenzuela would mean increase in tax revenues, reduction of fuel and transportation costs, employment, cheaper expenditure for solid waste management, and reduction in the release of greenhouse gases to the environment, among others. Meanwhile, Valenzuela City Public Information Officer Anna Mejia said that the City Council is conducting sessions reviewing the expropriation ordinance. "Anything that will benefit the constituents will be favored by the local government. We don't see any harm with the project. We'll have to wait for the further review of the proposal," Mejia said.
Moderate Tax Rates, Local Tobacco Firm Pleads By MARIO B CASAYURAN December 4, 2012, 7:49pm MANILA, Philippines ‐‐‐ A local cigarette manufacturer, Associated Anglo‐American Tobacco Corporation (AAATC), pleaded with the Senate yesterday to moderate the high tax rates to be imposed on cigarettes as the bicameral conference committees of the Senate and the House of Representatives meet today to iron out their differing versions of the ‘’sin’’ tax bill. “We are not asking that the bill would be scrapped but merely that its rates and the schedule that the tax hikes are to be imposed would be made more reasonable so as not to wipe out small companies such as ourselves in one fell swoop. While a few pesos may sound inconsequential when held up against the capital and profits of multi‐national companies such as PMFTC, ITI and BAT, for a small company such us living on the margins it can be a matter of survival or closure,’’ Blake Clinton Y. Dy, AAATC vice president, said in a letter to Sen. Ralph G. Recto, former chairman of the Senate ways and means committee. Dy wrote Recto to express his gratitude for how he handled the excise tax bill in committee hearings and on the Senate floor. A copy of the Dy letter was distributed to Senate reporters just before the Senate held its regular afternoon regular session. Recto resigned his committee chairmanship after Malacanang and the Department of Finance (DoF) criticized him for submitting a committee report that sought a P15 billion to P20 billion additional excise tax collection for the first year, way below the projected P60 billion annual tax collection for sin taxes sought by government. He was replaced in acting capacity by Sen. Franklin M. Drilon, chairman of the Senate finance committee, who later reduced the projected tax collection from cigarettes and alcohol to P40 billion. Recto is a member of the Senate bicameral conference committee that will meet with its House counterpart today. ‘’It is a rare gentleman who will put himself on the firing line when all political sense dictates otherwise. We cannot begin to imagine the torment you have endured for us at hands of your own party, the executive branch and their private sector cohorts just for giving our company a fair say on the Senate floor,’’ Dy said. Dy said his company is paying an average of P6.8 million per month at a rate of P2.72 per pack for 2.5 million packs of cigarettes.
‘’Under the approved Senate bill, assuming uniform sales, in 2013 we would have to pay P30 million every month, by 2014 P37.5 million pesos, by 2015 P45 million, by 2016 P52.5 million, and by 2017, P65 million. So you see, sir, from P6.8 million per month to P65 million per month; from P812.6 million a year to P780 million a year. All of which must be paid in advance before we can sell any of our products,’’ he said. Given such conditions, Dy explained, ‘’we cannot hope to survive the coming years.’’ ‘’The bills were clearly slanted towards importers as operating a factory here would be much more costly than just bringing product in from abroad. In a few years time, the foreigners and smugglers will own the industry,’’ he said. Expressing sadness at the turn of events, Dy said his ‘’company operated in the Philippines for 63 years since 1949, employed hundreds of Filipinos over the years and bought majority of its tobacco stock locally despite cheaper foreign alternatives, that we would be consigned to financial ruin at the behest of foreigners and their local proxies.’’ ‘’My family has poured 40 years of hard work to survive in the face of stiff competition against companies, many magnitudes larger than our ourselves, but it will be our own government and not fair competition that will wipe us out,’’ he said. Dy apologized for using strong words to convey the desperation that he and his family feel at the looming tax imposition. ‘’Again I reiterate my humble plea to the honorable senator to push for more moderate rates and periods in the excise tax bill so that our company might see another tomorrow,’’ he said. http://www.mb.com.ph/articles/384406/moderate‐tax‐rates‐local‐tobacco‐firm‐pleads#.UL6jH‐TBPSs
‘DAR chief offers only excuses for slow work on CARP’ Category: Nation Published on Tuesday, 04 December 2012 18:56 Written by Marvyn N. Benaning / Contributor TASK Force Mapalad (TFM) has criticized Agrarian Reform Secretary Virgilio de los Reyes “for offering only excuses for his pathetic work on land acquisition and distribution [LAD] under the Comprehensive Agrarian Reform Program [CARP].” In a statement, TFM‐Negros President Alberto Jayme reacted to the claim of de los Reyes that the Department of Agrarian Reform (DAR) has failed to meet its targets since the areas now covered are “contentious” and subject to “tedious processes.” Jayme stressed that de los Reyes’s eight‐page answer to accusations that he has failed to deliver on the promises made by President Aquino to protesting farmers and Roman Catholic bishops owing to [the] DAR’s own bureaucratic structure is “lamentable since it betrays his little interest to make the department’s machinery work in compliance with the President’s marching orders.” He took exception to de los Reyes’s excuse that the DAR was not primed to work on LAD since its bureaucracy “never changed,” and even argued that while there were 524 employees in Region 1 to work on 2,500 hectares of undistributed land, there were only 178 employees tasked to distribute 131,000 hectares of land in Negros Occidental. “This is not a reason that a working agrarian reform secretary must invoke to justify the failure to follow President Aquino’s orders. Neither should it be advanced to show that Mr. de los Reyes’s hands are tied. If he is really up to par, he should have whipped everyone into line but he has not. The results show that instead of speeding up the LAD, he has shifted gears and managed to distribute only 1,099 hectares of land in Negros island from January 2012 to October 31, 2012,” Jayme argued. “However, the DAR itself has admitted that it only accomplished 25 percent of its target of 180,000 hectares by September 30, 2012, distributing only 45,241 hectares. That period represents 75 percent of the entire year. By [the] DAR’s own reckoning, the already bad record would go down to 18 percent if the backlog of 74,653 hectares is added to the 180,000‐hectare target. If this is not a sorry record, we do not what is,” Jayme argued. Taking a closer look on Negros Island, de los Reyes’s record becomes dismal, the TFM leader explained. However, the actual area distributed from January to October 31 was only 45,392 hectares, or only 18 percent of the target, including the backlog. For the three quarters of this year, the LAD accomplishment in northern Negros Occidental was only 871 hectares, with another 229 hectares considered as non‐CARP areas, for a total of 1,099 hectares.
As the current target for that section of the province is 17,483 hectares, the DAR official accomplishment rate is only 5 percent. It becomes worse if the backlog of 10,539 hectares is added, the total would be 29,022 hectares, and the accomplishment rate would plunge to only 3 percent. For southern Negros Occidental, only 780 hectares were distributed, or 8 percent, compared to the 2012 goal of 9,445 hectares. That brings the backlog in southern Negros Occidental at 5,694 hectares. The total area to be distributed is still 15,139 hectares. “We do not judge a book by its cover. No matter how de los Reyes decorates his defense with legal arguments, the fact remains that he is a mile behind his target. Facts are facts, and we have fairly argued since the June 14 meeting with the President that [the] DAR should pursue a more active, no‐nonsense work on LAD,” Jayme added. De los Reyes has been trying to defend himself by arguing that it was not to his advantage that he is now working on the distribution of private agricultural land (PAL), which comprise 90 percent of all lands under LAD, and between 25 percent and 30 percent of these properties can be tagged as “problematic.” If, indeed, the DAR secretary cannot prove equal to the task, Jayme asserted, “then he should be ready to relinquish his post and turn over all his responsibilities and functions to those who can muster enough political will to perform the tasks of implementing a strategic social justice program.” Jayme lamented the fact that de los Reyes even talked at length about the achievements of the DAR under his watch, saying his accomplishment of 111,889 hectares last year “was not far from the average.” He said “it was thoroughly strange for de los Reyes to make a splash about the big numbers in the last quarter and his bragging about the accomplishment of the DAR in filing for the registration of emancipation patents and Certificates of Landownership Awards covering 23,701 hectares with the Land Registration Authority as if this function is not part of hios department’s regular functions.” In conclusion, Jayme explained that aside from putting other agencies to task for the slow LAD process, de los Reyes also turns his artillery against “the country’s chaotic and archaic land titling system.” The TFM leader said this argument runs against the very grain of CARP, a social justice program and the legal basis of LAD, which intends to emancipate farmers from bondage to the soil. http://businessmirror.com.ph/index.php/news/nation/4552‐dar‐chief‐offers‐only‐excuses‐for‐slow‐ work‐on‐carp
Anchors aweigh Category: Opinion Published on Tuesday, 04 December 2012 17:47 Written by The BusinessMirror Editorial
AS everyone knows by now, the Philippine economy rose by 7.1 percent to post a remarkable 6.5‐ percent gross domestic product growth in the third quarter of 2012. This has triggered optimism that expansion would translate into an overall 6‐percent growth by year‐end, defying earlier lower projections. That the economy is on a roll and poised to do even better in the coming months is seen in the way various departments are moving in step with the rest of the national government to stay the course. Take the Department of Labor and Employment (DOLE), which is focusing on inclusive growth by generating more productive and decent jobs. Labor Secretary Rosalinda Baldoz has called on her officials and personnel to fast‐track labor‐governance reforms to improve jobs creation and spur productivity. In addition, she reported that the DOLE’s National Conciliation and Mediation Board achieved a 99.5‐ percent success rate in mediating disputes, saving companies P846 million in 10 months and saving the jobs of more than 10,000 workers. It is true that industrial peace is essential in attracting foreign investment and protecting the tenure of Filipino workers. The department is, therefore, on the right track in speeding up the resolution of labor disputes. Labor‐governance reforms being implemented by the DOLE, including the emphasis on tripartism and inclusive social dialogue, enforcement of occupational safety and health standards, and wage‐system reform, can definitely contribute to the continued growth of the economy and should be vigorously pursued.
Another agency, the Department of Social Welfare and Development, is doing its own share in promoting inclusive economic growth. Social Welfare Secretary Corazon Soliman reported this week that 3 million households have benefited from the government’s Pantawid Pamilyang Pilipino Program (4Ps), with cash grants paid to eligible and compliant household‐beneficiaries amounting to some P20.3 billion from January to October 2012. According to Soliman, the program’s beneficiaries cover 1,408 cities and municipalities in 79 provinces nationwide. Of the more than P20‐billion cash grant, P10 billion was for health and the rest for education. As the centerpiece poverty‐alleviation program of the Aquino administration, the 4Ps appears to be working according to expectations. By helping the poorest of the poor, the 4Ps is restoring the hope that the government is there to help them. The latest Social Weather Stations survey showed that 31percent of Filipinos are optimistic that the economy would improve in the next 12 months and only 14 percent said otherwise, resulting in a “very high” net score of 17+. With bright prospects for the economy, it is our hope that sustained growth would ultimately benefit the common people, and lead to tangible improvements in the quality of life of those on the margins of society. This is what inclusive growth is all about. http://businessmirror.com.ph/index.php/news/opinion/4528‐anchors‐aweigh
‘Beer‐y’ good deals brewing in ‘sin’ tax bicam? Category: Opinion Published on Tuesday, 04 December 2012 17:16 Written by Ed Javier / Firebrand
A LANDMARK piece of legislation is set to be finalized with the formal naming of members of the joint bicameral conference committee, composed of members of the Senate and the House of Representatives. The Senate contingent will be led by Sen. Franklin Drilon, acting chairman of the Senate Committee on Ways and Means. Joining him are Senators Sergio Osmeña III, Panfilo Lacson, Ralph Recto, Ferdinand Marcos Jr., Alan Peter Cayetano and Pia Cayetano. Breaking‐news reports as of this writing indicate that Rep. Isidro Ungab (Third District, Davao City), chairman of the House ways and means panel, has been named as head of the House contingent. He will be joined by Majority Leader Neptali Gonzales II (lone district, Mandaluyong City), Representatives Janette Garin (First District, Iloilo province), Henedina Abad (lone district, Batanes province), Jocelyn Limkaichong (First District, Negros Oriental province), Eric Singson Jr. (Second District, Ilocos Sur province), Luis Villafuerte (Third District, Camarines Sur province) and Arnulfo Fuentebella (Fourth District, Camarines Sur province) from the majority bloc. Rounding up the group is Minority Leader Danilo Suarez (Third District, Quezon province). Presumably, these groups represent the best and the brightest from both houses of Congress when it comes to matters relating to taxation, and issues and concerns on “sin” taxes. I sure hope so. After all, there has been incredible pressure from powerful business groups armed with vested interests as to how the tax burden should be carved out. It will be interesting to see how these supposedly enlightened minds from Congress will come up with a final version that is truly reflective of an equitable distribution of the tax burden on the tobacco and alcohol industries.
House Bill 5727, authored by former Cavite lawmaker and now Transportation Secretary Joseph Emilio Abaya, proposes a total incremental revenue of P31.35 billion on the first year of implementation for the restructured excise taxes on tobacco and alcohol products. Of this amount, P26.87 billion shall come from cigarettes, P3.03 billion from fermented liquors and P1.45 billion from distilled spirits. Pretty lopsided in favor of beer and alcohol, don’t you think? Quite frankly, this undue bias for influential business interests assaults our personal sense of fair play. The Senate version, Senate Bill 3299, seeks to achieve total revenues of P40 billion from tobacco and alcohol taxes on the first year. Of this aggregate amount, P24 billion (60 percent) will come from cigarettes and P16 billion (40 percent) from alcoholic drinks. Why the seemingly unfair advantage given to booze, I will never know. It makes me tipsy just thinking about it. Could the upcoming elections have anything to do about this unjust tax burden? Your guess is as good as mine. That is why I call on all responsible Filipino citizens to remain vigilant during this critical juncture of the final crafting of the sin‐tax bill. A lot is riding on this measure. It purports to increase the revenue base of the government and address the increasing social costs of alcohol and tobacco consumption. The public should keep a close eye on the possible horse‐trading deals that could transpire in the bicameral committee, which some astute political observers have taken to calling the “Third Congress.” This is where sleight‐of‐hand wizardry can somehow magically insert provisions in the final bill that are nowhere to be found in the original version. Far too often, an important legislative measure comes out of the bicameral committee looking like a mutant version of its former self. Just look at what happened to the anti‐cybercrime law, which raised howls of protest from Filipino netizens. We all should scrutinize how our elected officials in the bicameral panel will hammer out the final provisions of the sin‐tax bill. For instance, there should be no changing of the technical definitions of a particular product in order to put it under a different classification and avoid paying higher taxes. This ruse is so passé. There have been calls to make the bicameral meetings open to the public, but this has met stiff resistance from some of the personalities involved. I wonder why. Nevertheless, the attention of the media shall be trained on the historic proceedings of the bicameral committee. The people wait with bated breath as to what the outcome of this contentious measure shall be. Would there be an equitable distribution of the tax burden on consumers of tobacco and alcohol? Let’s wait and see.
It would serve the best interests of the entire nation if we keep a close eye on possible hanky‐panky and other inappropriate deals at this critical point in our history. Elections will be held next year and those with the most ammunition in terms of financial resources will have a higher chance of winning. I just hope the distinguished gentlemen and ladies in the bicameral committee will remain true to their calling of serving the common good, not just their personal interests. Enough said. http://businessmirror.com.ph/index.php/news/opinion/4525‐beer‐y‐good‐deals‐brewing‐in‐sin‐tax‐ bicam
Act vs rice smuggling, farmers urge government Category: Agri‐Commodities Published on Tuesday, 04 December 2012 19:32 Written by Max V. de Leon / Reporter RICE farmers and millers have urged the government to act against rampant rice smuggling in the country, saying that it threatens the Aquino administration’s goal of achieving rice self‐sufficiency next year. In a statement, Abono Party‐list Chairman Rosendo So said rice smuggling has led to the crop swamping the market, lowering demand. “Farmers fear that prices for locally produced grain would drop further. Millers are not buying because they cannot compete with the sheer volume of smuggled rice that has been flooding the market,” So said. “We are appealing to the government not to be deaf to our pleas. Addressing the problem of rice smuggling will not only help Filipino farmers, but will support President Aquino’s vision of a rice‐self‐sufficient Philippines by 2013,” he added. Congress has sounded the alarm on the public perception that the Philippines has become a “center of rice smuggling” after rice smuggled from India and Vietnam were seized recently in ports in Zambales province’s Subic town and Albay province’s Legazpi City, respectively. The illegally imported rice is worth P487 million. President Aquino has announced that the country will no longer import rice next year, and that it will be in a position to export long‐grain aromatic rice. But So warned that this would not happen if rice smuggling continues. “If the government is really serious in achieving the targets set by the President, then they should heed this emergency call. Smuggling is killing the local rice industry, and if farmers and millers close shop since they could not compete with smuggled rice, the government can kiss their rice self‐sufficiency target goodbye,” he said. Rep. Jerry Treñas (lone district, Iloilo City), chairman of the House committee on good government and public accountability, recently launched an inquiry on the illegal rice imports. He said the probe was not only in aid of legislation, but also to prosecute smugglers and their protectors in government. Senate President Juan Ponce Enrile has expressed alarm that National Food Authority import permits were used to provide legal cover for smuggled rice. http://businessmirror.com.ph/index.php/business/agri‐commodities/4558‐act‐vs‐rice‐smuggling‐farmers‐urge‐ government
NGO hits US for ‘blocking’ PHL’s bid to extend rice protection Category: Agri‐Commodities Published on Tuesday, 04 December 2012 19:28 Written by Jennifer A. Ng / Reporter A NON‐GOVERNMENT organization (NGO) has criticized the United States for allegedly blocking the request of the Philippines to extend a special protection on rice traded under the World Trade Organization (WTO). According to Philippine government representatives, the WTO’s Council for Trade in Goods failed to arrive at a decision on the Philippines’s bid to extend the quantitative restriction (QR) on rice due to concerns raised by a “few influential members.” “We are alarmed that the US appeared to be bent on blocking our QR request, while other nations that [previously] raised reservations are now agreeable to it. [The QR] is important in our bid to achieve rice self‐ sufficiency in 2013. Allowing liberal importation will surely hamper our farmers’ motivation to produce more for our domestic needs,” said Aurora Regalado, convener of the Rice Watch Action Network (R1), in a statement. R1 campaigned for the extension of QR on rice in 2005, citing the unfair competition caused by the free influx of imported rice, aggravating the poor state of local farmers and the local rice industry while the country continued to struggle for rice self‐sufficiency. The government has been working on the QR with its goal to achieve rice self‐sufficiency in 2013. The group lauded the government for this resolve as poor farmers strive to uplift their livelihood and contribute to developing the local rice industry. “While the QR for rice is important, it is equally essential to ensure the judicious implementation of other interventions, such as the National Food Authority’s [NFA] procurement of a significant portion of local palay [unhusked rice] at a higher price than the market rates, irrigation facilities, investments in post‐harvest facilities, affordable credit to finally get us to our dream of self‐sufficiency,” said Jaime Tadeo, spokesman of the National Rice Farmers Council. The QR on rice under the WTO allows the Philippines to limit the volume of rice that can be imported by the Philippine government through the NFA. The protection ended on June 30, but the WTO temporarily waived the lifting of rice QRs so that the Philippines could conduct bilateral talks with other countries after it requested an extension for another three to five years. The Philippine delegation to the WTO noted that rice is the predominant staple in the Philippines and the primary source of employment for at least 2.4 million farmers, the majority of whom are small landholders.
DA eyes ways to end land conversion Category: Agri‐Commodities Published on Tuesday, 04 December 2012 19:26 Written by Jennifer A. Ng / Reporter THE Department of Agriculture (DA) will start identifying strategic rice‐production areas in the Philippines next year in its bid to provide lawmakers a basis for enacting into law a measure that would end the conversion of irrigated rice farmlands to real‐estate subdivisions. Agriculture Assistant Secretary Dante Delima said lawmakers are asking for a database of these strategic rice‐production areas that they could include in a land‐use bill. “The department is looking at [finishing] the mapping of production areas in the country before the end of 2013. This is one of the projects [that] we will undertake with the International Rice Research Institute,” Delima said. Despite the continuous conversion of productive farmlands to other uses, Agriculture Secretary Proceso J. Alcala assured that it would not pose a serious threat to the government’s efforts to achieve rice self‐ sufficiency. “The expansion of irrigated farmlands planted [with] rice is outpacing the conversion of some farmlands to other uses,” Alcala said. Eufemio T. Rasco Jr., executive director of the Philippine Rice Research Institute (PhilRice), said the rate of land conversion may have been maintained in recent years. PhilRice and the Bureau of Agricultural Research, both attached to the department, led the conduct of a previous survey on the rate of land conversion in the country. “I wouldn’t be surprised if about 9,000 hectares of irrigated farmlands are still being converted to other uses. For one, urbanization is moving at a fast rate and most of irrigated farmlands are near urban areas,” Rasco said. A survey conducted in 2008 found that an average of 9,000 hectares of farmlands devoted to rice are converted or planted with other crops every year. Of that figure, former PhilRice Executive Director Leocadio Sebastian said, about one‐third of the rice lands are irrigated. The inclusive period for the survey was from 2002 to 2007. “The number is significant because it accumulates. [The production lost] increases if you take into account the irrigated rice lands that were converted,” Sebastian said in 2009.
At an average palay (unhusked rice) production of 4 metric tons per hectare using certified seeds, the Philippines was projected to have lost a minimum of 36,000 MT of palay during the first year of the survey period. By 2007, the potential palay production that was lost due to the conversion of rice lands was estimated at about 200,000 MT. Addressing the loss of these farmlands is crucial, a former DA official said, especially in light of the Philippines’s efforts to stop importing rice from other countries. http://businessmirror.com.ph/index.php/business/agri‐commodities/4556‐da‐eyes‐ways‐to‐end‐land‐ conversion
Treasury bureau sells P9‐billion T‐bonds, fetches 4% coupon rate Category: Banking & Finance Published on Tuesday, 04 December 2012 19:55 Written by VG Cabuag / Reporter THE Bureau of Treasury sold 10‐year Treasury bonds worth P9 billion at auction on Tuesday, resulting in an all‐time low yield for the paper. The paper fetched a coupon rate of 4 percent, some 75 basis points lower than the 4.5 percent recorded at the previous auction on September 11. At the secondary market, the 10‐year debt is being traded at 4.425 percent, higher than the awarded rate of the government. Tenders reached P33.06 billion, more than three times oversubscribed. National Treasurer Rosalia de Leon, head of the auction committee, said aside from a string of good news on the Philippine economy, investors are scrambling to participate in the remaining auctions for the year. The latest auction was the second to the last for 2012. “A lot of inflows are going into government securities on market expectations that the peso will appreciate [against the dollar] further,” de Leon said after the auction. Investors are elated over the recent news that the Philippines achieved a 7.1‐percent gross domestic product growth rate in the third quarter of 2012. Since November, investors are swamping the auction of government securities, including the offering of 10.5‐year onshore dollar bonds, in which the Aquino administration raised $500 million. “We’re happy that we have set a benchmark so that other companies may also tap into the onshore dollar bonds for their needs,” de Leon said. She added that the government might consider conducting auctions regularly, depending on market conditions. “We’re exploring that option [of offering the dollar bond auction on a periodic basis] also for our funding requirements next year. But it depends on the liquidity of the market.” Part of the proceeds from the latest auction will go to pay the maturing debt of the Power Sector Assets and Liabilities Management Corp. or to buy back expensive debts that were previously issued by the government. http://businessmirror.com.ph/index.php/business/banking‐finance/4560‐treasury‐bureau‐sells‐p9‐ billion‐t‐bonds‐fetches‐4‐coupon‐rate
PHL not looking into global market for natural ingredients Category: Regions Published on Tuesday, 04 December 2012 18:08 Written by Manuel T. Cayon / Reporter DAVAO CITY—The Philippines is not yet looking into the trillion‐dollar market for herbal and other natural ingredients, of which the country is known for their endemic presence, a manufacturer and researcher of herbal ingredients and products said. Researches done by Dr. Rainier B. Villanueva, founder of Rainiers Research and Development Institute (RRDI), said the global market for natural ingredients was expected to reach $3 trillion last year. He said this was the estimate made by the US‐based Standard Research Institute. The same research institute estimated the market value of the industry at $1.9 trillion the previous year, he said. “Did we partake of this rich market?” he asked farmers and tribal families who attended the Farmers’ Summit on Biotechnology held on Nov. 22 at the Grand Regal Hotel here. The summit was organized by the Biotechnology Coalition of the Philippines. He said the country was yet to appraise the magnitude of the opportunity opened to any country that would embark on planting the herbs, plants and crops whose extracts were needed in “herbal medicines and nutraceutical and cosmeceutical products.” He said the market keeps on growing, “driven by demographic, economic and social trends.” “Although the Philippines is relatively a young population, many of the developed nations are aging, and many people now prefer food and medicine that are natural,” he said. International groups have been certifying the health and safety of many herbal products and medicines, he said. “At the same time, many afflictions and diseases have been linked to the synthetic substances put in food and products,” he said.“There is a general consumer dissatisfaction with conventional treatment, therapies and drugs now.” Despite the huge and increasing demand for natural extracts in the industry making drugs and pharmaceutical products, and cosmetics and fragrances, Villanueva said local manufacturers have not seen adequate production from local farmers and producers that could have tapped the export market.
“We want farmers to earn and share in the profit. This would allow them to improve on the capabilities of their farms, upgrade their maintenance, harvesting and production,” he said. The government, he said, “should act as conductor in all these, to unite and synchronize production where the market needs these products.” Villanueva is the president of the Chamber of Herbal Industries of the Philippines Inc. He established RRDI in 1989 and was the first to formulate the lawat (Litsea glutinosa), a medicinal plant traditionally known for hair and skin nourishment. This won him an award in the 27th Salon International des Inventions held in Geneva, Switzerland. http://businessmirror.com.ph/index.php/news/regions/4543‐phl‐not‐looking‐into‐global‐market‐for‐ natural‐ingredients
Land survey to mark ARMM boundaries Category: Regions Published on Tuesday, 04 December 2012 18:05 Written by Butch D. Enerio / Correspondent CAGAYAN DE ORO CITY—The Autonomous Region in Muslim Mindanao (ARMM) on Sunday launched the implementation of its Forestland Boundary Assessment and Delineation (FLBD) project as it gears toward full development of the region’s land area. Mujiv Sabbihi Hataman, ARMM governor, said the endeavor will demarcate on the ground the boundaries of the alienable and disposal (A and D) lands, particularly the area’s remaining forest. The survey will start from Lanao del Sur and will continue to Basilan, Maguindanao, Sulu and Tawi‐Tawi. The ARMM signed a memorandum of agreement with the Department of Environment and Natural Resources (DENR) this year for the implementation of the P44‐million FLBD project, which is expected to be finished in May 2013. Hataman said that aside from identifying the A and D and forest lands, mineral lands and national parks are of importance in the project. “In this way, we will be able to determine appropriate management intervention and protect our remaining forest cover as well as develop areas where there are economic potentials,” Hataman said. The FLBD is themes “Unang tanda para sa Kagubatan, Simbolo nang Handa, Matatag, Makabago, at Maka‐kalikasang Bangsamoro” that will lay down the economic road map of the upcoming Bangsamoro government. “This forestland marker is important as we lay down our development road map, where areas will be properly identified as potential for agroforestry development and establish protected area systems,” said Hadji Kahal Kedtag, DENR‐ARMM secretary. Hataman said the participation of local government units especially in the province of Lanao del Sur is critical for the success of the FLBD project. “We earnestly enjoin our honorable mayors and their respective Sanggunian Bayan to support us in the implementation of this project. We cannot do this alone and we need to muster all our resources and achieve the involvement of the local officials,” Hataman said. He said whatever comes out of the project would be for the development of the Bangsamoro people and the ARMM in general.
“Rest assured that your DENR‐ARMM with the guidance of our regional governor will continue to work for the betterment of our environment not only for the present generation but for the future generation as well. We will always adhere to the ‘Matuwid na Pamamahala Tungo sa ARMM na Masagana’t Mapayapa,’” Kedtag said. http://businessmirror.com.ph/index.php/news/regions/4542‐land‐survey‐to‐mark‐armm‐boundaries
Apeco obtained ‘huge’ funding other than GAA, claims group Category: Economy Published on Tuesday, 04 December 2012 20:15 Written by Jonathan L. Mayuga / Reporter A significant amount of budget for the Aurora Pacific Economic Zone (Apeco) has been coursed “stealthily” through at least five government agencies, according to the Task Force Anti‐Apeco. In a statement, the group said that funds for Apeco are coursed through the Departments of Transportation and Communications, Public Works, Science and Technology, Trade and Industry, and Agriculture, belying the claim of Sen. Edgardo Angara that Apeco only spent P915.8 million between 2008 and 2012. The group was rebutting the senior lawmaker’s privilege speech, justifying the proposed budget for Apeco. According to the group, the amount cited by Angara, proponent of the controversial Apeco, cites only direct Notice of Cash Allotment releases to Apeco, which explains why the figure appears to be literally understated. Some of these funds coursed through other agencies of the government include Apeco’s P142‐million 1.2‐kilometer (km) airstrip in Barangay Esteves, Casiguran, allegedly funded through the Department of Transportation and Communications and the Civil Aviation Authority of the Philippines. Another allocation being eyed as follow through of such program is the P92‐million 0.3‐km airstrip extension; Apeco’s P63‐million port improvement project in Barangay Dibacong, Casiguran, funded through the Philippine Ports Authority (to be followed by a P2.4‐billion international seaport construction project); the P1.66‐billion Baler‐Casiguran highway leading to Apeco allegedly funded by loans from the Korean Economic Development Cooperation Fund—the approval of which in 2012 was a basis for a conflict‐of‐interest complaint from former Chief Justice Renato Corona’s Defense Panel during his 2012 impeachment trial. The group added that Apeco received a P30‐million flood‐control project implemented in Casiguran’s Calabgan river through the provincial Department of Public Works and Highways, which involved quarrying operations that provided mineral materials for Apeco’s airstrip; a P10‐million mariculture fish cage park initiated with the Bureau of Fisheries and Aquatic Resources, and promoted as an Apeco livelihood project; and a P35‐million housing project funded by the Congressional Funds of the Lone District of Aurora, which was promoted locally as an Apeco project for the indigenous people. http://businessmirror.com.ph/index.php/news/economy/4567‐apeco‐obtained‐huge‐funding‐other‐ than‐gaa‐claims‐group
DTI defends BOI grant of tax perks to Thai hog, poultry firm Category: Economy Published on Tuesday, 04 December 2012 20:16 Written by Max V. de Leon / Reporter The government will formally hear the complaints of local hog and poultry raisers on the decision of the Board of Investments (BOI) to grant fiscal incentives to a multibillion‐peso integrated farm project of Thai firm Charoen Pokphand Foods Philippines Corp. (CPFPC). Trade Undersecretary Adrian S. Cristobal said he is calling a meeting with stakeholders from the poultry, hog and feeds industry on December 5 after the National Federation of Hog Farmers and Bounty Fresh raised the issue of the registration of CPFPC. “We welcome the ongoing discussions among stakeholders of the poultry, hog and feeds industry. The outcomes of these discussions will help us review and study closely the opportunities and gaps in the industry,” Cristobal said. He, however, defended the BOI’s grant of tax incentives to CPFPC, saying it is consistent with national policy and rules. “The registration of CPFPC is consistent with the Investments Priorities Plan [IPP], the country’s blueprint for investment promotions, where agriculture or agribusiness is included as one of the preferred investment activities,” he said. The BOI approved the grant of incentives to CPFPC’s integrated broiler production project as it qualified for pioneer status, allowing the company to receive various perks, including six years of income‐tax holiday. The approved P2.326‐billion broiler project includes parent stock farms in Tarlac and Bulacan as well as a hatchery in Nueva Ecija, and broiler farms in Bulacan. The farms are expected to produce up to 21,847 metric tons annually and will begin operations in February 2013. CPFPC is a unit of Thailand’s Charoen Pokphand Foods Public Co. Ltd. Through incentives, the BOI encourages existing as well as new investors to invest in expansion or modernization projects to be funded by capital coming from internal and/or external sources. Both the swine and aqua feeds project of CPFPC were governed by the BOI’s 2011 IPP, and granted pioneer status but with non‐pioneer incentives. On the other hand, the Broiler Project is governed by the 2012 IPP and granted pioneer status and pioneer incentives. “The BOI continues to approve, register and grant incentives to qualified agri‐projects. These projects include among others, feed, hog and poultry projects, which range from micro‐ to large‐sized projects.
From 2004 to September 2012, the OI has registered 45 feed, hog and poultry projects. Of these, three are owned by CPFPC, while the rest are Filipino‐owned enterprises,” the BOI said. Local producers earlier expressed fear that the tax incentives given to CPFPC would give the Thai firm the luxury of pricing its products lower than its competitors, thus, creating an unhealthy competition. http://businessmirror.com.ph/index.php/news/economy/4568‐dti‐defends‐boi‐grant‐of‐tax‐perks‐to‐ thai‐hog‐poultry‐firm
Big Banks Register 15% Annual Earnings Growth In 9 Months By LEE C. CHIPONGIAN December 4, 2012, 6:27pm The country’s 37 universal and commercial banks reported a 15 percent year‐on‐year income growth for the first nine months of the year as loans and deposits, as well as trading gains continue to prop up profits. Based on data from the Bangko Sentral ng Pilipinas (BSP), as of the end of the third quarter, the big banks posted profits of P80.113 billion, up from same period last year of P69.628 billion. The universal and commercial banks, which control 97 percent of the total banking resources, reported modest net interest income growth of 2.8 percent to P149.239 billion. The trading gains‐driven non‐interest income however surged 16 percent year‐on‐year to P96.88 billion. Trading in treasuries or securities continue to be one of the industry’s main but largely speculative source of revenues. For the third quarter period, the big banks’ return on equity rate dropped to 12.33 percent from the same time in 2011 of 12.44 percent. Return on assets, in the meantime, rose to 1.58 percent from 1.52 percent. BSP data also showed that the banks’ cost to income ratio was higher at 63.74 percent from 62.7 percent last year. In a report the central bank said the expanding economy, which grew 7.1 percent in the third quarter for a full nine‐month growth of 6.5 percent and exceeding the 5‐6 percent government targets for 2012, is providing the banking system ample range to grow and help it fulfill its role of strengthening the financial system. With banks’ delivering double‐digit growth for the past year on expanding loans, deposits and assets accounts, the BSP said asset quality and solvency indicators have been improving. As of the first quarter for example, banks reported strong capitalization with an industry capital adequacy ratio average of 16.85 percent which indicated that banks remain solvent. The Tier 1 capital also exceeded international standards at 14.31 percent. Banks’ loan and asset quality as measured by non‐performing loans and non‐performing assets ratio have also continued to be at low, if not its lowest, levels in 15 years or since the 1997 Asian financial crisis.
As of end‐September, NPL ratio improved to 2.05 percent. In the first nine months the big banks reported P69.94 billion past due loans, lower than the previous month’s P70.43 billion and the same period in 2011 of P74.33 billion. The industry’s total loan portfolio, in the meantime, increased to P3.41 trillion from P3.378 trillion in the previous month and P3 trillion last year. Of the 37 big banks, 20 are universal banks and 17 are commercial banks. Combined, these banks operate 4,928 branches as of the end of the first semester. As of end‐June, the entire banking sector’s – including thrift banks and rural banks – totaled P7.4 trillion, up 5.6 percent year‐on‐year. The central bank said these funds are channeled mostly to loans and portfolio investments. In terms of asset size, the country’s top three biggest banks are the Henry Sy‐ controlled BDO Unibank, Metropolitan Bank & Trust Co. of the Ty family, and the Ayala Group’s Bank of the Philippine Islands. Government banks, Land Bank of the Philippines and Development Bank of the Philippines are the fourth and fifth largest banks. http://www.mb.com.ph/articles/384364/big‐banks‐register‐15‐annual‐earnings‐growth‐in‐9‐ months#.UL6o4‐TBPSs
NEDA Crafts Post‐2015 Action Plan By EDU LOPEZ December 4, 2012, 6:17pm The National Economic and Development Authority (NEDA) is crafting a sustainable development action plan that would define the country’s development goals after the 2015 deadline of the millennium development goals (MDGs). Socio‐economic Planning Secretary Arsenio Balisacan stressed that post‐2015 process and activities are crucial within the context of the government’s efforts in achieving the MDGs. Balisacan told participants of the first national consultation of the post‐2015 development agenda on Monday in Pasig City the importance of localizing the development goals and initiatives and in forging public‐private partnership in the areas of financing, technical assistance and advocacy. “We have to look beyond 2015 through an assessment of what we have achieve and what we have to do,” said Balisacan. The United Nations has been conducting broad‐based consultations on MDGs in several countries, including the Philippines. “We have been faced with challenges in our resolve to achieve the MDGs as we continue to face critical issues especially poverty, equity, and environmental degradation. These are issues that we have to be dealt with through actions and mechanisms consistent with the country’s commitment under the Rio+20. In defining the country’s post‐2015 development agenda from a Philippine perspective, Balisacan underscored the need to engage the different development stakeholders in order to collectively craft the future and further amplify the voice and aspirations of all sectors, especially the poor and marginalized. “Our efforts to achieve inclusive growth and sustainable development hinge on objectively defining critical socioeconomic issues and crafting time‐bound goals with measurable targets,” he said. “We need to ensure the coherence between the post‐Rio+20 and post‐2015 development framework as a crucial complementation in crafting the sustainable development goals,” Balisacan added. Earlier, the Philippine Council for Sustainable Development (PCSD) has firmed the action plan for next year and beyond. “This long‐term action plan will ensure that sustainable development is mainstreamed into the national, regional and local plans. The country’s perspective on the Future We Want, the outcome document of the Rio+20 Conference, calls for concerted action and effective governance mechanisms that will facilitate the desired outcomes in the long‐term,” Balicasan added. (EHL)
Oct. Gov’t Borrowings Reach P199B By CHINO S. LEYCO December 4, 2012, 4:36pm Borrowings of the national government doubled in October due to the sale of retail bonds targeted at local small investors, data from the Bureau of Treasury showed yesterday. The government’s gross borrowings in October this year reached P198.77 billion, significantly higher compared with P99.15 billion in the same month last year, based on the documents from the treasury bureau. Of the total gross borrowings during the month, the government tapped bulk of its financing need from the domestic market with P196.78 billion from P96.18 billion in the same month in 2011. The government’s local borrowings last month was composed of fixed rate retail treasury bonds with P118 billion. Meanwhile, the government borrowed less during period from foreign lenders, declining by 49 percent to P1.99 billion from P3.97 billion in the same month last year. In January to October, the government’s total borrowings stood at P799.81billion, higher compared with P460.83 billion the country incurred in the same period last year. At end‐October, the biggest contributors to government’s debt were the issuances of global bonds that accounted for P66.03 billion in January and the weekly sale of fixed rate debt papers. The government also sold P179.79 billion worth of retail bonds in February. The government’s borrowing in the first 11 months of the year is expected to increase after concluding three debt management activities in November. Last month, the national government raised $500 million from its onshore sale of dollar denominated notes as well as the sale of $750 million global peso bonds and attracted approximately $1.5 billion in offer from a buy back program. The government now plans that the sale of dollar denominated bonds to local investors to be included in the government’s regular borrowing program in the coming years to help create dollar demand and dampen the peso’s rise. http://www.mb.com.ph/articles/384336/oct‐gov‐t‐borrowings‐reach‐p199b#.UL6pAOTBPSs
Third Quarter Philippine Economics Growth December 4, 2012, 5:10pm Exceeding analysts’ expectations, the Philippine economy grew 7.1% in the third quarter of 2012, the highest in Southeast Asia and second highest in Asia, the National Statistical Coordination Board (NSCB) reported on November 28, 2012. The growth resulted in Gross Domestic Product (GDP) expanding by 6.5% in the first nine months, above the target range of 5‐6%. It was the highest under the Aquino Administration, driven mainly by services sector. The Philippines posted the fastest economic growth in the Association of Southeast Asian Nations, followed by Indonesia (6.2%), Malaysia (5.2%), Vietnam (4.7%), Thailand (3.0%), and Singapore (0.3%). “Increased consumer and government spending, increased investments in construction, and third consecutive quarter of external trade growth contributed to highest quarterly growth since the third quarter of 2010,” the NSCB said. “GDP growth was due to sustained confidence in government that has consistently equated good governance with good economics,” Malacañang said. Comprising half of GDP growth, the services sector expanded 7% in 3rd quarter, due to “robust performances of transport, storage, and communication, financial intermediation and real estate.” The booming Business Process Outsourcing industry and strong Overseas Filipino Worker (OFW) remittances fueled commercial and residential property take‐up. Agriculture expanded 4.1% on higher palay and corn production despite the storms in July to September, 2012. Exports rose 22.8% in September from a year earlier. Inflation eased to four‐month low of 3.1% in October, while remittances surged to record $1.8 billion in September. Public construction in 3rd quarter climbed 23.7% from a year earlier, while government and household spendings were up 12% and 6.2%, respectively. Agencies said the reforms by President Benigno S. Aquino III and sustained confidence in his leadership had led to improved fiscal management, transparent public spending, and better overall business environment that helped fuel growth. The National Economic and Development Authority said, “our efforts at good governance are beginning to bear fruit. We are on our way to surpassing our growth target of 5‐6% and higher growth in 4th quarter of this year.” We congratulate Republic of the Philippines President Benigno S. Aquino III and Vice President Jejomar C. Binay, as well as the Philippine Economic Team, other Officers and Personnel, for their partnerships in keeping the momentum of Philippine economic growth. CONGRATULATIONS AND MABUHAY! http://www.mb.com.ph/articles/384352/third‐quarter‐philippine‐economics‐growth#.UL6qFOTBPSs
Tuna Overfishing By JIM GOMEZ December 4, 2012, 4:47pm MANILA, Philippines (AP) – Pacific island nations and environmentalists raised an alarm Sunday over destructive fishing methods and overfishing that they say are threatening bigeye tuna — the fish popular among sushi lovers worldwide. Palau fisheries official Nanette Malsol, who leads a bloc of Pacific island nations, said at the start of a week‐long tuna fisheries conference in Manila that large countries should cut back on fishing, curb the use of destructive fishing methods, and respect fishing bans to allow tuna stocks to be replenished in the Pacific, which produces more than 60 percent of the world’s tuna catch. The annual meeting of the Western and Central Pacific Fisheries Commission, which regulates commercial fishing in the vast expanse of waters from Indonesia to Hawaii, is to approve steps aimed at protecting the bigeye and other threatened tuna species, along with giant whale sharks. More than 600 delegates from about 40 Asian and Western countries, along with environmental activists, are attending. Malsol said she expects heated debate. Proponents of the multibillion‐dollar fishing industry have squared off with conservationists in the past over the best ways to protect the bigeye and other species without considerably setting back the lucrative business. Bigeye and yellowfin tuna, which can grow to 8‐9 feet (2.4‐2.7 meters) long and weigh more than 450 pounds (200 kilograms), are not in immediate danger of being wiped out, but have been hit hard by overfishing. The fish are used mostly for steaks, and in the case of bigeye, sushi. The fisheries business in the western and central Pacific region, estimated to be worth about $5 billion annually, has drawn increasing numbers of industrial fishing fleets, which have caused tuna stocks to fall since the 1960s. “This week it’s up to the big fishing nations to show the world what they are going to do to cut overfishing of bigeye tuna,” Malsol said. Repeated telephone calls and messages to industry officials seeking comment Sunday were not answered. Many fleets are using so‐called “fish aggregation devices” — various types of floats which are used to lure vast numbers of tuna. When schools of tuna have massed under the devices, fishing vessels alerted by sensors approach and scoop up their catch with giant nets. Between 47,000 and 105,000 fish aggregation devices, made from bamboo, palm fronds, plastic or old nets, have been deployed worldwide to attract a wide variety of marine life. The method is used to
catch nearly half of the world’s tuna and has contributed to the overfishing of bigeye tuna across the Pacific Ocean, according to the US‐based Pew Environment Group. Aside from tuna, sea turtles, sharks, and juvenile fish have often been caught and killed. “The deployment of tens of thousands of drifting fish aggregating devices in the world’s oceans with little to no oversight is extremely worrisome,” said Amanda Nickson of the Pew Environment Group. “The fishing industry is not currently required to account for its use of FADs. It is being allowed to gamble with the health of the ocean, and it is time for governments to require full accountability and management of this proliferating and risky fishing gear,” Nickson said. Conservation efforts, however, have been tough to implement and have sparked disagreements. Greepeace activists said they will submit evidence to the fisheries commission detailing violations of regional tuna fishing rules by Southeast Asian countries including allowing fishing vessels to operate on the high seas without permits and required observers onboard. A decision by the fisheries commission to exempt the Philippines from purse seine fishing — an industrial technique in which a net is used to surround and capture schools of fish — in a large swath of the Pacific has sparked complaints from other nations. The exemption was given to discourage Philippine fleets from fishing in territorial waters off the country’s eastern coast, which are known spawning grounds for tuna that later spread out to the Pacific. Philippine Agriculture Secretary Proceso Alcala asked the fishing commission to extend the exemption, which he said started last October and would end in February next year. http://www.mb.com.ph/articles/384341/tuna‐overfishing#.UL6qPOTBPSs
FARM INITIATIVE December 4, 2012, 4:42pm KORONADAL CITY (PIA) – The Region‐12 office of the Department Agriculture (DA‐12) is intensifying its fight against pests and diseases on crops in the villages. The DA‐12 and the Regional Crop Protection Center had gathered recently more than 1,000 members of the Bantay Peste Brigades also called “pest scouts” across Region‐12 in the first Regional Bantay Peste Brigade Forum. Dr. Jesus Binamira, Integrated Pest Management Kasakalikasan program director, said the National Crop Protection supports the objectives of the Food Staples Self‐sufficiency Program of the department.
INFO CONGRESS DAVAO CITY (PIA) – The recently concluded 2012 Mindanao Communicators Congress here yielded 12 resolutions seeking to institutionalize information offices, to widen network and collaboration among communicators, and to thank supporters of the event. Presented during the plenary session on the last day of the congress, the resolutions gave spirit and amplified support towards the realization of this year’s theme “Communicating Mindanao’s Opportunities and Best Practices.” The Mindanao Communicators Congress and Workshop is hosted by the Davao Region with PIA Regional Director Efren F. Elbanbuena at the helm of organizing the event. http://www.mb.com.ph/articles/384338/farm‐initiative#.UL6sE‐TBPSs
Capital controls should serve only as measure of last resort – BSP By Prinz P. Magtulis (The Philippine Star) | Updated December 5, 2012 ‐ 12:00am
MANILA, Philippines ‐ The Bangko Sentral ng Pilipinas (BSP) should use capital controls as a “last resort” to manage risks of inflows to the local economy, BSP Deputy Governor Diwa Guinigundo said yesterday. “The monetary authorities have numerous policy tools yet unused to address the capital flow problem...Thus, we consider capital controls as measure of last resort,” Guinigundo said in a text message to The STAR. In a new policy paper, the IMF has recommended the use of capital controls in scenarios involving an overheating economy, risks on asset bubble formation and overvalued currency and if structural reforms take too long to make their way to the economy. It also highlighted the need for “country‐specific” controls – which should be targeted, transparent and non‐discriminatory – if foreign exchange reserves have already ballooned to excessive levels that taming the currency strength through dollar purchases is already incurring more costs than benefits.
“To some extent, these conditions appear to be emerging in the Philippines,” Guinigundo said, adding that policymakers still have various tools which they can deploy aside from outright buying of dollars. BSP, which has generally kept a market‐determined exchange rate, has kept scope for intervention to temper an appreciating peso, which closed at 40.87 to a dollar yesterday. A strong peso trims the value of dollar export earnings and remittances from overseas Filipinos. Aside from this, however, BSP has instituted a number of reforms this year targeted at shunning speculative inflows flooding the country. Among them are the ban on foreign funds on special deposit accounts and increasing capital charges on non‐deliverable forwards to 15 percent from 10 percent. “We reserve the right to use any one of (these tools), including capital flow management measures and macroprudential measures, depending on actual need and specific macroeconomic situation,” Guinigundo explained. Guinigundo warned, however, that capital controls tend to have “temporary and diminishing” effects, an observation also stated by IMF in warning against substituting macroeconomic reforms with inflow‐ controlling measures. Sought for comment, Emilio Neri, economist at the Bank of the Philippine Islands, said instituting capital controls should already be considered. “At the very least however, feasibility studies on capital controls must already be undertaken,” Neri said in a phone interview. “Since it will require policy coordination between fiscal and monetary authorities, studying its pros and cons now will be helpful,” he added. Neri however acknowledged that BSP’s moves have so far been bearing fruits, noting that “if not for those, peso could have really breached the 40‐level already.” “We are seeing the biggest appreciation from the peso but I think the BSP has indicated they still have a lot of tools to use. I think they will use them first before they decide to resort to capital controls,” he said. http://www.philstar.com/business/2012/12/05/880367/capital‐controls‐should‐serve‐only‐measure‐ last‐resort‐%E2%80%93‐bsp
Index breaches 5,700 mark By Zinnia B. Dela Peña (The Philippine Star) | Updated December 5, 2012 ‐ 12:00am
MANILA, Philippines ‐ The local stock market rallied to another historic high yesterday, breaching the 5,700 mark as investor sentiment continued to be upbeat despite declines in most Asian markets. The Philippine Stock Exchange index (PSEi) surged 33.58 points or 0.59 percent to finish at a new record high – its 34th this year amid a rosy economic outlook. Value turnover, however, declined to P8.29 billion on volume of 3.09 billion shares. The Philippines also got another vote of confidence when the PSEi was included in CNN’s list of 40 best‐ performing stock markets around the world this year. The Philippines was ranked ninth, having gained more than 30 percent since the start of 2012. According to CNN, the list included stock markets which posted “healthy gains” despite “a volatile year and a slowing global economy. Venezuela topped the list with year to date gains of more than 200 percent so far this year. It was followed by Egypt, Turkey, Pakistan, and Nigeria.
“At this point, there appears no stopping the market’s rush to more record closes before the year comes to an end. Two major concerns eased: a compromise on Greece’s situation and a reversal in China’s manufacturing numbers. A third thorn may soon be lifted – that is, if the US manages to avoid the fiscal cliff,” said Accord Capital Equities Inc.’s Jun Calaycay. “With everything appearing to fall into place over the short run, the only thing that pulls the market down are intermittent profit‐taking which are in no way heavy enough to reverse the bullish trend,” Calaycay said. http://www.philstar.com/business/2012/12/05/880371/index‐breaches‐5700‐mark
10‐year T‐bond tumbles to new record low of 4% By Prinz P. Magtulis (The Philippine Star) | Updated December 5, 2012 ‐ 12:00am
MANILA, Philippines ‐ Yield of 10‐year Treasury bond (T‐bond) fell to a new record low yesterday as the country’s sound economic fundamentals lured investors to the bond market. The benchmark paper fetched a coupon rate of four percent, down from 4.75 percent in the previous auction last Sept. 11. The issue was nearly three times oversubscribed with tenders reaching P33.086 billion against a P9‐ billion offer. “There was a string of good news in the country – slower inflation, strong growth – which drove demand in the auction,” National Treasurer Rosalia de Leon told reporters after the auction. The economy grew by a surprising 7.1 percent in the third quarter, beating market expectations and the fastest in Southeast Asia. This brought the year‐to‐date average to 6.5 percent, way above the official five to six‐percent target for the year.
Inflation, on the other hand, remained manageable at 3.2 percent as of October, within the low‐end of the central bank’s three to five‐percent target for the year. Official inflation data for November will be released today. “There are expectations that inflation will continue to be slow,” De Leon said. The Bangko Sentral ng Pilipinas (BSP) expects November inflation at between 2.7 and 3.6 percent. A bond trader agreed, saying that local factors have been pushing rates on government bonds to record lows lately. Recent auctions also resulted in lower rates for Treasury bills (T‐bills) across all tenors. “There is still strong demand for government papers on the back of the country’s solid fundamentals. There was good appetite,” the trader said in a phone interview. Also yesterday, the $500‐million dollar bonds issued to local investors last week have been listed at the Philippine Dealing and Exchange Corp., the secondary market for bond traders. In her speech, De Leon acknowledged the series of liability management conducted by the government. Aside from the onshore dollar bonds, the government also issued $750 million in global peso notes, proceeds of which were used to finance partial amount of the $1.5‐billion debt buyback. The latter was meant to retire existing expensive foreign debts. “The listing of this issue in the organized market, and service by the sub‐registry with its tax assumption features are all part of the plan to bring an attractive investment instrument to our domestic investor base, and allow it to trade with as little costs as possible,” De Leon explained. http://www.philstar.com/business/2012/12/05/880373/10‐year‐t‐bond‐tumbles‐new‐record‐low‐4
'Pablo ' maintains strength as it moves over Palawan (philstar.com) | Updated December 5, 2012 ‐ 9:47am MANILA, Philippines ‐ Public storm signal no. 3 has been declared over northern Palawan including Calamian group of Islands as typhoon Pablo continues to pack maximum sustained winds of 130 kilometer per hour near the center and gustiness of up to 160 kph, the weather bureau said Wednesday. "Typhoon 'Pablo' is expected to be at 440 km northwest of Puerto Princesa City by [Thursday] morning and by Friday morning it will be at 780 km west of Calapan, Oriental Mindoro, " Philippine Atmospheric, Geophysical and Astronomical Services Administration. Areas under signal no. 2 include the rest of Palawan, Antique, Iloilo, Guimaras, Bohol, Siquijor, Southern Cebu, Negros Oriental and Negros Occidental. Meanwhile, Occidental Mindoro including Lubang Island, Oriental Mindoro, Romblon, Aklan, Capiz and the rest of Cebu are still under signal no. 1. "Estimated rainfall amount is from 10 to 18 mm per hour (heavy ‐ intense) within the 400 km diameter of the typhoon," PAGASA said. Fishing boats and sea vessels were also told to stay away from seaboards of Southern Luzon, Visayas and Mindanao. http://www.philstar.com/nation/2012/12/05/880931/pablo‐maintains‐strength‐it‐moves‐over‐palawan
'Pablo' displaces more than 11,000 families (philstar.com) | Updated December 4, 2012 ‐ 5:15pm
The revised forecast track of Typhoon "Pablo" as of 6 p.m., December 4, 2012. Image from PAGASA website MANILA, Philippines ‐ Thousands of families have been displaced as typhoon "Pablo" (international name Bopha) continued its onslaught in Mindanao and parts of Visayas on Tuesday. At least two persons from Davao Oriental, including an old woman whose house was hit by a toppled palm tree, have been reported killed due to the typhoon's onslaught. The National Disaster Risk Reduction and Management Council (NDRRMC) said that a total of 11,871 families or 57,501 individuals have been affected by the typhoon in Eastern Visayas, Northern Mindanao, Davao and Caraga regions. A total of 3,268 passengers, 148 rolling cargoes, 93 vessels and 49 motor boats were stranded in ports around the country. A total of 65 flights were also cancelled due to the typhoon.
The NDRRMC said that seven towns in Surigao del Sur, including Tandag, Bislig, Hinatuan, Tagbina, Barobo, Lianga and Lingig are experiencing a total power outage. Also experiencing a power blackout were Carmen town in Agusan del Norte and Pilar town in Surigao del Norte. It added that erratic communication is also being experienced in Pilar gown due to damaged cell sites. Classes in all levels were also suspended in Cebu City, Dumaguete City in Negros Oriental, Caraga region, and Region 11, as part of preemptive measures being enforced by the NDRRMC. In Compostela valley, a landslide occurred in the inland municipality of New Bataan affecting land travel to Montevista and the mining town of Monkayo. “So far we are still monitoring the area of Bukidnon, specifically in the area of Mt. Kitanlad the source of the Cagayan River channel,” NDRRMC chief Benito Ramos said. 'Pablo' picks up speed again The Philippine Atmospheric Geophysical and Astronomical Services Administration (PAGASA) said in its 5 p.m. bulletin on Tuesday that "Pablo" accelerated as it continued to move towards the Siquijor and Negros Oriental area. The weather bureau said that as of 4 p.m., the typhoon's eye was estimated at 60 kilometers southeast of Dumaguete City. The storm slightly weakened, packing maximum sustained winds of 160 kilometers per hour and gustiness of up to 195 kph. The typhoon was moving west northwest at a speed of 24 kph. The estimated rainfall of "Pablo" within its 500 kilometer diameter was 10 to 18 millimeter per hour or heavy to intense rains. The typhoon was expected to remain over land until Wednesday and start leaving the Philippine area of responsibility by Friday. Public storm warning signal number 3 remains hoisted over the northern part of Palawan including the Calamian Group of Islands, Bohol, Siquijor, the southern part of Cebu, Negros Oriental, southern part of Negros Occidental, Iloilo, Guimaras, Antique, Lanao del Norte, Misamis Occidental and Zamboanga del Norte. Signal number 2 is placed over the rest of Palawan, Aklan, Capiz, the rest of Cebu including Camotes Island, the rest of Negros Occidental, Misamis Oriental, Agusan del Norte, Bukidnon, Lanao del Sur and Zamboanga del Sur including Sibugay. Signal number 1 is hoisted over Occidental Mindoro, Oriental Mindoro, Romblon, Leyte including Biliran, Southern Leyte, Surigao del Norte including Siargao, Surigao del Sur, Dinagat, Agusan del Sur, Davao del Norte, Compostela Valley, North Cotabato and Maguindanao.
PAGASA said that areas under storm warning alerts may be hit by flashfloods and landslides. Jaime Laude http://www.philstar.com/nation/2012/12/04/880261/pablo‐displaces‐more‐11000‐families
Gov’t to make economic growth more inclusive, responsive By Aurea Calica (The Philippine Star) | Updated December 5, 2012 ‐ 12:00am MANILA, Philippines ‐ The government is determined to make economic growth more inclusive and responsive to the needs of every Filipino, President Aquino told a gathering of stock market players and officials. Speaking at the 20th anniversary of the Philippine Stock Exchange Inc. Monday night, Aquino said he was expecting the stock market to break the 6,000 index “perhaps in the next 28 days.” “The entire world has begun to train their spotlight on us. Let us prove to them: we are not yet done, we have more to show, and we will build even greater things on top of the foundations we have already laid down,” the President said. “It is up to all of us to harness our potential and steer the economy towards inclusive growth that satisfies the pursuit of profit, promotes equal opportunity, and elevates the standard of living of every Filipino,” he said. In his speeches, Aquino would say the government is very careful about spending because it wants gains felt sooner rather than later – such as in quality of education, provisions of basic needs through conditional cash transfer program, electricity and water to every household. He said it won’t be long before ordinary Filipinos feel the effects of the record 7.1 percent growth in the third quarter, the robust stock market performance, as well as credit rating upgrades. “While we certainly have much to be thankful for, I have always believed that every achievement must not only be cause for celebration, but must also motivate us to work even harder. After all, the record highs, increase in equities, and outstanding GDP growth are symbols of the potential we have to create a broader and more dynamic Philippine economy,” Aquino said. “Perhaps, more than anyone, you understand the need to be forward looking – that everything we do today must be calculated and measured if we are to reap benefits in the future. Investors, after all, are prospective. So, while you know that each all‐time high signifies the continued confidence of investors, you also understand that, in order to sustain this confidence, we must bolster it with concrete action,” he said. “There is no better way to do this than to show prospective and active investors alike that the Philippines is open for business under new management: management that is putting an end to backroom deals and suspect transactions, so that business, trade, and investment can flourish in an honest and level playing field,” he said. “The brightest of futures is ours for the taking. But we must be reminded that every time the bell rings, every time we close another trading day with an all‐time high: there are levels still to breach, and that everyone, whether in the government, private sector, or civil society, must do their part to ensure that we sustain the confidence of the world,” Aquino further said. Sales pitch
Aquino said he was taking all opportunities to promote the Philippines as an investment destination and that it was good the PSE also undertook measures to protect its integrity. He cited a recent meeting with the Prime Minister of Norway, Jens Stoltenberg, during which he asked the Norwegian leader to increase investment in the country. Norway’s Government Pension Fund Global actively seeks places to invest in. “Norway has quite a significant investment here already, and because they invested in our blue chip stocks that are performing so well, it was so easy to elicit a smile from them when we were inviting them to expand these investments,” he said. “In many ways I am the salesman‐in‐chief of the country; and I must congratulate you on being a part of why it is that much easier to invite investments to our shores. Being bullish on the Philippines is increasingly contagious because our success is based on real fundamentals and not merely snake‐oil salesman fantasies,” Aquino said. The President urged the PSE to continue its reform measures as average daily turnover had climbed to P7.61 billion from P4.95 billion in 2010. PSEi’s performance has never been better, Aquino noted, with 56 record highs in the past almost two and a half years and coupled with the 7.1 percent GDP growth for the third quarter. “Growth that surpassed all expectations shows us that the Philippines has come a long way since then,” he said. Aquino said the government, through the Securities and Exchange Commission (SEC), has already put in place a number of reforms – such as setting up an Investor Protection and Surveillance Department specifically to guard against insider trading and other illegal investment schemes. Just last October, the department – along with partner agencies – ordered Aman Futures Group Philippines Inc. to stop its unregistered securities as well as its public solicitation of investments, which had already victimized so many people who did not heed the warnings, Aquino said. The President said the SEC was also finalizing a Capital Market Development Blueprint to improve and expand the Philippine capital market, including proposals to strengthen investor education, through an integration of various programs already offered by the SEC, PSE, and other similar entities, and to improve the equity market by promoting online trading, among others.
Bad gov’t service? Text 0908‐8816565 By Michael Punongbayan (The Philippine Star) | Updated December 5, 2012 ‐ 12:00am MANILA, Philippines ‐ Reporting and complaining about inefficiency, discourtesy, and even red tape in government offices is now a text message away. Since almost every Filipino has a cellular phone, the Civil Service Commission (CSC) announced yesterday the launching of a faster way for the public to air their grievances and expect action through short messaging system (SMS). CSC chairman Francisco Duque III said citizens may now access the government’s central helpline, dubbed Contact Center ng Bayan (CCB), not just by a phone call but also by sending a text message to 0908‐8816565. He bared that opening additional channels or means for reaching the complaints center will make it easier and more convenient for the public to complain about inefficiency, discourtesy, and fixing in government services. “Through the Contact Center ng Bayan (CCB), we aim to engage citizens to be the primary drivers of the kind of service they want to get from their civil servants,” Duque said. Last Sept. 27, the CSC, with members of the CCB steering committee from the Information and Communications Technology Office (ICTO) and Department of Trade and Industry (DTI), launched the program. For its initial implementation, six agencies including the CSC, National Computer Center, Bureau of Internal Revenue, Philippine Health Insurance Corporation, Department of Health, and the DTI have electronically interconnected their call centers to the CCB. The CCB is accessible nationwide by dialing 1‐6565 using PLDT, Smart, and Digitel landlines, Mondays to Fridays, from 8 a.m. to 5 p.m. with each call to charge P5.00 plus VAT. http://www.philstar.com/headlines/2012/12/05/880659/bad‐gov%E2%80%99t‐service‐text‐0908‐ 8816565
Disqualified party‐list group seeks SC relief By Edu Punay (The Philippine Star) | Updated December 5, 2012 ‐ 12:00am
MANILA, Philippines ‐ The party‐list group Binhi‐Partido Ng Mga Magsasaka Para Sa Mga Magsasaka (BINHI) has asked the Supreme Court (SC) to immediately act on its bid for a temporary restraining order against the decision of the Commission on Elections (Comelec) last week disqualifying the group from participating in next year’s elections. In an urgent motion for special raffle filed yesterday, BINHI said there is extreme urgency for the high court to act on its petition and issue a status quo ante order before it goes into long holiday recess from Dec. 12 to Jan. 9 next year. Otherwise, petitioner argued, it could be deprived of its right to participate the May 2013 polls should the SC later on grant its petition and declare it a qualified party‐list group. BINHI lawyer Charita Agdon cited Comelec’s schedule, showing the official list of candidates to be included in the ballots to be printed next month, is set to be finalized this month. Agdon argued BINHI would be deprived of its fair chance to prepare in the remaining six months for the midterm polls if it does not make it to the list.
Agdon said this is clear “irreparable injury” the petitioner stands to suffer should the high court fail to stop the implementation of the Comelec resolution it questioned in a petition last Monday. The high court has not acted on BINHI’s petition, which was not included in the agenda of yesterday’s en banc session since it was filed late Monday afternoon. It will be included in the SC’s session next Tuesday, a day before the high tribunal goes into month‐long break. While in recess, the high court usually acts only on urgent petitions that involve either national security or life‐and‐death situation. The Chief Justice calls for special en banc sessions on those extremely urgent cases. Several disqualified party‐list groups have made the same manifestation before the SC. In its petition, BINHI asked the SC to stop the “whimsical, abusive” cancellation of its accreditation and registration by Comelec for the mere reason that its members are affiliated with a cooperative in Cabanatuan City. Specifically, the group asked the SC to immediately enjoin the poll body from implementing its resolution last Nov. 28 by covering the petitioner with the status quo ante order earlier issued on other similarly situated party‐list groups. The group argued the Comelec acted without jurisdiction or with grave abuse of discretion in canceling its registration, considering it has fully complied with requirements under the law. The group cited as basis an earlier resolution dated Nov. 19, 2009 where the Comelec granted the accreditation and registration of the group as a sectoral party duly representing the peasants, farmers and farm tillers sectors covered in Section 5 of Republic Act 7941 or Party‐list System Act. BINHI also questioned why the Comelec disqualified it simply because its members also belong to the Cabanatuan City Seed Growers Multi‐Purpose Cooperative. http://www.philstar.com/headlines/2012/12/05/880597/disqualified‐party‐list‐group‐seeks‐sc‐relief
Growth without joy By Amando Doronila Philippine Daily Inquirer 10:06 pm | Tuesday, December 4th, 2012 The 7.1 percent Philippine economic growth in the third quarter “posted the fastest expansion” within the Asean (Association of Southeast Asian Nations), gloated Socioeconomic Planning Secretary Arsenio Balisacan. He said that the year‐to‐date growth was already 6.5 percent, prompting him to predict that the full‐year growth would likely surpass the government’s target of 7 to 8 percent. “Next year we expect this momentum to continue,” Balisacan said. Don’t celebrate too prematurely, Mr. Secretary. In a volatile economic climate, either global or domestic, nothing remains static and predictable. In fact, some leading figures in private business are not carried away by the government’s optimistic forecasts, given that the administration craves credit for being responsible for—or being the driver of— this unaccustomed surge, which appears to some hard‐boiled businessmen as a one‐off phenomenon, or a fluke. For example, Aurelio Montinola III, president of the conservative and prudent Bank of the Philippine Islands, is somewhat skeptical. In a speech at the “Man of the Year” awards of the Management Association of the Philippines on Monday, he said that the 7.1‐percent growth made it likely that the pace of continued expansion at the upper end of the 5‐ to 6‐percent growth is attainable. “I think we have a very good chance to do 6 percent this year, and the big bet is we can do another 6 percent next year,” he said. To sustain growth and make it inclusive, it is necessary to have an average 5‐ to 6‐percent growth every year for the next five or six years. Questions were raised in business circles over whether the high‐growth rate benefited only the middle and upper classes while bypassing the poor classes. A recent survey of the Social Weather Stations (SWS) in the third quarter found 31 percent of the 1,200 respondents optimistic of an economic improvement, while 14 percent were not. SWS interpreted this result as “very high” at the net score of +17. The survey was conducted last August, and its results were first published by the BusinessWorld newspaper. According to SWS, net economic optimism was “very high” in seven out of the last 10 surveys, and the August survey results were up from May’s “high” of +8. But there’s a downside. Asked about the quality of their life over the past 12 months, 21 percent of the respondents said it had improved, while 28 percent said it had worsened, for a net score of ‐8 percentage points.
Net personal optimism dropped from +39 to +30 in Luzon areas outside the metropolis, from +37 to +36 in Metro Manila, and from +18 to +17 in the Visayas. It only increased in Mindanao from +20 to +22. By socioeconomic class, personal optimism decreased in classes ABC (from +34 to +32), class D (from +32 to +28) and class E (from +24 to +20). Malacañang declined to comment on why personal optimism had dipped but said this should improve in the coming months, based on the third‐quarter growth. How economic growth translated into flow of benefits to reduce poverty is shown in a United Nations report for 2012. In its report on the growth outlook for Asia‐Pacific, the Nations Economic and Social Survey of the region wrote on the Philippines. A summary of the May 2012 report follows: Economic growth weakened due to declining exports and lower public spending, but in response to weak growth, a disbursement acceleration program was announced in October 2011. In terms of foreign direct investment (FDI) inflows, the Philippines continued to lag behind other major economies in the subregion, receiving only $1.3 billion in 2011, similar to the 2010 level. The country faces many challenges, including a high share of non‐wage earners and large infrastructure gaps. The share of workers earning wages and salaries, as opposed to the self‐employed and unpaid family workers, also remains low. At the same time, income inequalities have led to a slower reduction of poverty and to higher rates of self‐rated poverty. On government intervention in providing social subsidies to ameliorate poverty, an Inquirer research shows: As of June 2012, the Conditional Cash Transfer (CCT) program has reached out to a total of 3,014,586 families, more than the 2012 target of 3 million. Between January and February 2012, the program reported a compliance rate of 95.89 percent among mothers who visited the healthcare centers for checkups and immunization for babies; 97.97 percent among mothers who brought their children to healthcare centers for deworming; 95.15‐percent attendance rate in day care centers among children; and 96.40‐percent attendance rate for primary and secondary schoolchildren. In May, SWS found that self‐rated poverty dropped to an estimated 10.3 million Filipino households, or 51 percent of the total households in the country. The figure declined from 11.1 million households, or 55 percent. The effectiveness of the CCT is under review in a congressional oversight committee: to look into whether it is being used as a poverty alleviation measure or as an electoral vote‐buying scheme for the 2013 mid‐term elections. Sen. Franklin Drilon, chair of the committee and a leading member of President Aquino’s Liberal Party, is scrutinizing the 2013 national budget, which contains a proposal to fund the CCT with P45 billion. The program distributes money to the poorest families in the country. http://opinion.inquirer.net/42119/growth‐without‐joy
Move to shift sin tax burden bared By Macon Ramos‐Araneta | Posted on Dec. 05, 2012 at 12:01am | 339 views Two senators on Tuesday said moves were afoot to shift the burden of new sin taxes from alcohol to tobacco, but both refused to say where they got their information. “I understand that some functionaries in the government are toying with the idea, maybe due to policy considerations or pressure,” said Senate President Juan Ponce Enrile. “The burden will be passed to tobacco farmers who will be hurt more.” Senator Ralph Recto said he also heard about the new efforts to reduce the tax take from the alcohol industry, from P16 billion to P11 billion, and shifting the burden to the tobacco industry. Neither Enrile nor Recto would say where their information came from, or vouch for the accuracy of the reports. Under the Senate version of the sin tax bill, the government hopes to generate P40 billion in new taxes from the alcohol and tobacco industry, with the former accounting for 40 percent or P16 billion and the latter taking up 60 percent or P24 billion. In contrast, the House version of the bill aims at a total tax take of P31 billion, but puts most of the burden on tobacco companies, which will account for P26.8 billion, while the alcohol industry chips in only P4.48 billion. Differences between the two versions are scheduled to be reconciled in the bicameral conference committee. On Tuesday, the PhilTobacco Growers Association again attacked the Aquino administration for protecting sugarcane farmers while punishing tobacco workers with high taxes. The group’s leader, Saturnino Distor, said the sugarcane farmers supply the basic ingredients for liquor and distilled spirits. Distor added that moves to adopt the skewed House version of tax sharing betrayed the Palace’s “hidden agenda” to favor the alcohol industry in the new sin tax bill. “Why is it that the Palace always punishes tobacco farmers? Is it because our President is a hacindero and he needs to protect the interests of the Cojuangco family?” Distor said. He recalled that the Central Azucarera de Tarlac, a sugar refinery controlled by the family of President Benigno Aquino III, had even lobbied against the new sin taxes. At that time, the House bill still considered a 50‐50 tax sharing arrangement, but when the bill was finally approved, it was skewed heavily in favor of the alcohol industry, Distor said.
Senator Franklin Drilon has committed to keep the burden sharing at 60‐40, with the tobacco industry accounting for the larger share. Enrile on Tuesday reminded Drilon about his promise during a caucus on the sin tax bill. On Monday night, the House of Representatives named the members of its panel to the bicameral conference committee on the sin tax bill. The House contingent will be headed by Davao City Rep. Isidro Ungab, chairman of the House committee on ways and means, House Majority Leader and Mandaluyong Rep. Neptali Gonzales II, Iloilo Rep. Janette Garin, Batanes Rep. Henedina Abad, Negros Oriental Rep. Jocelyn Limkaichong, Ilocos Sur Rep. Eric Singson Jr., Camarines Sur Rep. Luis Villafuerte, Camarines Sur Rep. Arnulfo Fuentebella; and House Minority Leader and Quezon Rep. Danilo Suarez. Ungab said the House and Senate panels will hold their bicameral meeting today at 10 a.m.With Maricel Cruz http://manilastandardtoday.com/2012/12/05/move‐to‐shift‐sin‐tax‐burden‐bared/
Agency’s loss now at P12B By Manila Standard Today | Posted on Dec. 05, 2012 at 12:01am | 254 views The Commission on Audit has expressed alarm over the ballooning deficit of the Home Guaranty Corporation which it said “continues to cast doubt on its ability to provide a viable shelter program” for poor Filipino families. “HGC has been continuously incurring losses since 2002, the year when it first floated the zero‐coupon bonds….From 2002 to 2011, (HGC) has been adversely affected by the financial charges that bond flotations entailed,” said Supervising Auditor Teodora Lacerna in the COA Report for 2011. Of the P22 billion zero bonds floated, the HGC netted P12.136 billion, the report added. COA said the HGC’s accumulated deficit is now at P12.771 billion and had been operating on a negative working capital since 2004 with current liabilities at P6.102 billion exceeding its current assets of P3.172 by P2.928 billion as of Dec. 31, 2011. “HGC’s accumulated deficit of P12.771 billion continue(s) to cast doubt on its ability to provide a viable shelter program for the homeless, ” the COA reported. Because of the losses that started in 2002, HGC’s net worth went down to just P2.953 billion in 2010. At the end of 2011, while its net worth went up to P4.605 billion, it is due to a donated capital from the Urban Bliss projects which was recorded in December 2011. The COA said it is doubtful that HGC will be able to perform its mandate since its total guarantees has amounted to P78.339 billion, or 20 times more its net worth of just over P4 billion. HGC has unpaid guaranty obligations at P3.484 billion while outstanding debenture bonds totaled P1.908 billion, P1.307 of which will mature in 2012. Because of the obviously misguided engagement in a zero bond float, the COA suggested that HGC stop its bond floatation initiatives and just accelerate its disposition of foreclosed assets so it can pay off its ballooning debts. http://manilastandardtoday.com/2012/12/05/agencys‐loss‐now‐at‐p12b/
Road works suspended By Rio N. Araja | Posted on Dec. 05, 2012 at 12:00am | 79 views Road diggings and excavations way across Metro Manila have been suspended effective midnight of Dec. 10 until midnight of Jan. 4, 2013 to ease congestion caused by increased vehicular and pedestrian traffic during the holidays. Chairman Francis Tolentino said the temporary moratorium is in response to the public’s call to improve the Christmas traffic situation caused by various road diggings and repairs. However, flagship projects of the government, emergency leak repairs or breakage of water lines of Manila Water and Maynilad are exempted from the moratorium. The MMDA chief said violators of the said prohibition will be fined with not less than P3000 but not more than P10,000, or imprisonment of not less than 30 days but not more than six months, or both fine and imprisonment as decided by the court. http://manilastandardtoday.com/2012/12/05/road‐works‐suspended/
Land reform body formed By Joyce Pangco Panares | Posted on Dec. 05, 2012 at 12:02am | 179 views President Aquino has created an inter‐agency committee to ensure continued support for the government’s land acquisition and distribution even after the expiration of the Comprehensive Agrarian Reform Program in 2014. Under Administrative Order No. 34, Mr. Aquino said the delivery of support services and agrarian reform beneficiary development must continue to ensure that the gains of CARP, which should be completed by June 30, 2014, will be sustained. “There is a need to create a committee to undertake a study on the institutional arrangements that will ensure the continuity and streamlining of land distribution and management, the delivery of agricultural support services, and the resulting reorganization and rationalization of concerned government agencies,” the President said. Some 900,000 hectares are still up for distribution under CARP and the inter‐agency body has been tasked to study the transition plan for the post‐CARP scenario. Necessary executive issuances or legislative measures based on the findings of the study may also be formulated by the body. The body will be headed by the National Economic and Development Authority director general while the secretaries of agrarian reform, agriculture, environment, justice, and budget and the administrator of the Land Registration Authority will serve as members. Mr. Aquino also asked the Development Academy of the Philippines and the Career Executive Service Board to provide full support and assistance to the committee. Malacañang has been lukewarm to a bill extending the CARP for another five years, insisting that the government is on target in completing land acquisition and distribution under the existing law. Deputy presidential spokesperson Abigail Valte said all notices of coverage should have been issued before CARP expires. “Even if we have reached the June 2014 deadline, as long as the notices of coverage have been issued, the process will continue,” Valte said. DAR will finish issuing notices of coverage for landholdings 10 hectares and above by December 2012. “As for landholdings below 10 hectares, DAR’s target is to finish issuing notices of coverage by July 1, 2013,” Valte added
The CARP law was enacted during the administration of then President Corazon Aquino and was then hailed as a landmark social justice legislation, but the law contained a loophole for stock distribution option that allowed Hacienda Luisita, the vast sugar estate owned by the Cojuangco family, to be exempted from being parceled out to farm workers. http://manilastandardtoday.com/2012/12/05/land‐reform‐body‐formed/
Spanish group, ABI form dairy company By Julito G. Rada | Posted on Dec. 05, 2012 at 12:02am | 302 views Dairy products maker Grupo Leche Pascual of Spain and Asia Brewery Inc. of taipan Lucio Tan formed a joint venture company that will distribute Creamy Delight yogurt in the Philippines. GLP president Tomas Pascual said the group teamed up with ABI to form AB Pascual Foods to take advantage of the rosy outlook for the Philippine yogurt market. “We see a very good potential for [Creamy Delight] yogurt in the Philippines because of the big gap in daily yogurt consumption here,” Pascual said. Pascual said the newly‐formed company, created on a 50‐50 equity sharing, would distribute pasteurized yogurt through sari‐sari stores nationwide. He said it was possible the company would manufacture yogurt in the long run once AB Pascual Foods stabilized its presence in the local market. “Right now, AB will import from Spain approximately 2.6 million kilograms per year, or equivalent to one million cases. Each case weighs three kilos,” Pascual said. ABI chief operating officer Michael Tan said once Creamy Delight established its foothold in the market, followed by the setting up of a manufacturing facility, the joint venture would “eye other Asean markets.” Tan said AB planned to establish a manufacturing plant in Laguna, possibly in Cabuyao. Creamy Delight is considered Spain’s top quality yogurt. Creamy Delight, priced 40 to 50 percent cheaper than other brands, has a distinct taste and sweet combination. Pascual said the advanced technology that involves pasteurization would allow the yogurt to be available in sari‐sari stores without being refrigerated. Creamy Delight is made from 100‐percent fresh premium imported milk collected daily from the fields of Spain and controlled by quality standards. http://manilastandardtoday.com/2012/12/05/spanish‐group‐abi‐form‐dairy‐company/
The genesis of ‘deposit substitutes’ By Gerry Geronimo | Posted on Dec. 05, 2012 at 12:01am | 123 views
The issuance by the Finance Department of Revenue Regulations No. 14‐2012 on November 7, 2012 caused not a slight tremor in the financial districts. Businessmen, especially the underwriters, have all along been secure in the thought that “public” meant at least 20 people. For this reason, devices were concocted to execute borrowings which, although large in total amounts, were nevertheless small in terms of people borrowed from. For as long as the number of lenders were small, which was uniformly defined as less than 20, the disclosures and other safeguards, designed to protect the presumably unsophisticated investor did not kick in. The premise is that the 19 lenders who had the capacity to pick up the receivable at such huge amounts each were, or at least ought to be, financially sophisticated enough to make their own analysis and evaluation of the investments being offered to them. Hence, there was no need to treat them like they were babes in the woods. It came to pass that in those days the approach of money managers and advisers to the allegedly sophisticated 19 or less investors was to convince them to not deposit their moneys in the bank. Bank deposits were the relationship of choice for the financial hoi poloi, they who did not have the learning to understand the intricacies of investing. But for the sophisticated 19 or less, the relationship would be through banker’s acceptances; promissory notes; repurchase agreements; certificates of assignments or participations, both with recourse; and other documents which despite their high fallutin names were of course, merely debt instruments. These documents were in lieu, or in place, of deposits; hence they came to be called “deposit substitutes.” Thus, the term “deposit substitute” as a legal term, is in my mind a Philippine invention. It was written into the law upon the recommendation of the Joint IMF‐CBP Banking Survey Commission on the Philippine Banking System, co‐chaired by Dr. Armand Fabella. The Commission submitted its recommendations to Central Bank of the Philippines Governor Gregorio S. Licaros on January 25, 1972 in advance of the full report. The idea was to have the recommendations considered by the Monetary Board early enough and in time for submission of amendatory legislation to Congress which was then in session. Apparently not too many, except, as now revealed in his
autobiography, Juan Ponce Enrile, were unaware of the martial law that was to be declared about eight months later. It was the general observation of the Commission that “more recently, the alternative forms of deposits and placements appear to have benefitted primarily the large well‐entrenched corporate entities with foreign affiliations, their creditworthiness having been more easily established. Also, the rise of new forms of financial intermediation, in terms of financial instruments and institutions, has created a gray area of regulation.” Among those gray areas of regulation was the inability of the Central Bank to effectively take control of the volume of money generated by the credit operations of the financial system due to the lack of clear authority to impose reserve requirements and interest rate ceilings on alternative forms of raising funds from the public. Explaining Recommendation 17, the Commission observed that the so‐called “deposit substitutes are alternative forms of liabilities which partake of the nature of deposits.” This functional identity, notwithstanding, however, the Commission further noted that “They are not at present included among deposit liabilities subject to reserve requirements.” This was the reason why “banks and non‐bank financial institutions have increasingly resorted to attracted these deposit substitutes and to issuing a variety of debt instruments to document the transactions.” It was in the context of this need to make more effective the monetary control of the Central Bank that “deposit substitutes” was defined by the Commission as “alternative forms of obtaining funds from the public, other than bank deposits, through the issuance, endorsement, and acceptance of debt instruments for the borrower’s account, which may include but need not be limited to, bankers acceptances, promissory notes, participations, certificates of assignments, and similar instruments with recourse, and repurchase agreements.” The recommendation of the Commission first became part of banking law when the definition of “deposit substitute was written into the Central Bank Act as Section 100A by Section 52 of Presidential Decree No. 72 issued on November 29, 1972. With this entry, it was inevitable that the term “deposit substitute” would also get into tax law. The term “public” was defined, under Section 22(Y) of the National Internal Revenue Code, for purposes of taxation, as “twenty (20) or more individual or corporate lenders at any one time.” Section 2 of Revenue Regulations No. 14‐2012 thus did no more than return to the original and consistent core thinking on “deposit substitutes” when the term became part of the Philippine legal landscape. It was no more than a return to basics. No need nor occasion for the financial community to belly ache. (For comments, e‐mail me at firstname.lastname@example.org.) http://manilastandardtoday.com/2012/12/05/the‐genesis‐of‐deposit‐substitutes/
China prepares to grow veggies on Mars, moon Published on 05 December 2012 Written by AFP BEIJING: Chinese astronauts are preparing to grow fresh vegetables on Mars and the moon after researchers successfully completed a preliminary test in Beijing, state media reported. Four kinds of vegetables were grown in an “ecological life support system,” a 300 cubic meter cabin which will allow astronauts to develop their own stocks of air, water and food while on space missions, Xinhua news agency said Monday. The system, which relies on plants and algae, is “expected to be used in extra‐terrestrial bases on the moon or Mars,” the report said. Participants in the experiment could “harvest fresh vegetables for meals,” Xinhua quoted Deng Yibing, a researcher at Beijing’s Chinese Astronaut Research and Training Center, as saying. “Chinese astronauts may get fresh vegetables and oxygen supplies by gardening in extra‐terrestrial bases in the future,” the report said, adding that the experiment was the first of its kind in China. China has said it will land an exploratory craft on the moon for the first time next year, as part of an ambitious space program that includes a long‐term plan for a manned moon landing. The Asian superpower has been ramping up its manned space activities as the United States, long the leader in the field, has scaled back some of its programs, such as retiring its iconic space shuttle fleet. In its last white paper on space, China said it was working toward landing a man on the moon—a feat so far only achieved by the US although it did not give a time frame. http://www.manilatimes.net/index.php/news/world/36661‐china‐prepares‐to‐grow‐veggies‐on‐mars‐ moon
Teachers prefer incentive over performance bonus Published on 05 December 2012 Written by Neil A. Alcober EDUCATIONAL group Teachers’ Dignity Coalition (TDC) on Tuesday urged the Department of Budget (DBM) to retain the P10, 000 productivity enhancement incentive (PEI) for all government employees or raise it to P15, 000 instead of the P5, 000 PEI and performance‐based bonus (PBB). The group argued that until now, most of the employees from the Department of Education, especially the teachers are not aware on the amount of their bonus. “We appreciate the generosity of the government for granting this bonus, however, we appeal that the P10, 000 PEI it granted since 2007 be retained or raised regardless of the amount of the PBB,” Benjo Basas, TDC national chairman, said in a statement. “We further hope that said bonus will be given on time,” he added. In previous years, Basas said that PEI is released to government employees before Christmas break. “However, since the guidelines to determine the performance of agencies was only released by the inter‐agency task force lead by DBM last November 12, the agencies would have a hard time to comply with the intricate requirements to determine the eligibility of agencies and employees to the performance‐based bonus.” Basas added. According to the Executive Order No. 80 of this year, which is also the basis of the IATF’s MC No. 2012‐03, government officials and employees would be entitled to a PEI of about P5,000 and a performance‐based bonus that varies depending on the performance of the agency and the individual employee. TDC also warned that division and disparity in the field may occur due to these guidelines. “For this particular year, we are not convinced that this performance‐based bonus shall be implemented. It might cause disparity and would further divide the field. Everyone would be comparing his/her bonus to colleagues and perhaps would question the evaluation process.” Basas explained. Basas clarified however that his group is not against giving incentives to performer and agrees that the
non‐performing employees or agencies should have less incentives. “But we should be very careful in evaluating the performance of individuals and agencies. There should be a clear‐cut policy and incontestable process. Our fear is that if we let the evaluation of performance to discretion of the unit head, objectivity might be questionable. Given the time left for the whole system to do it, then it might be prone to inconsistencies,” Basas said. http://www.manilatimes.net/index.php/news/nation/36691‐teachers‐prefer‐incentive‐over‐ performance‐bonus
‘Holiday economics’ revisited Published on 05 December 2012 Written by Mike Wootton Well the Rizal Day holiday is now behind us for this year, but thank goodness Christmas is now coming up with its plethora of local bazaars and shopping opportunities. Another longer break to look forward to and yet more opportunities to go “malling” and spend on gifts for Christmas. There is always a holiday or a special event to look forward to in the Philippines, and people do like to make the most of them. The day before a holiday the atmosphere is palpable, you can feel the holiday spirit gripping people, the increase of traffic at about late morning or lunchtime the day before, and the need to force your way through the throngs of people in the shopping malls. All this is fine and nice and enjoyable if you really are in a position to make the most of it. Problem is that I suspect that most people are in fact not in any position to make the most of it, they continue to worry about their ability to meet the loan repayments, buy liquefied petroleum gas or firewood, get load for their cellphones, meet the ubiquitous Meralco (Manila Electric Co.) bill and handle all the other items involved in life’s challenges. But people are pushed to spend, spend and spend whether they can afford it or not. It is not right that they should not be pushed so hard. It’s strange that they don’t see the connection between their individual responsibilities to make a contribution to economic development and their “enjoyment” of life—don’t they care, have they just lost hope, or are they waiting for a miracle? The Philippines consistently ranks as one of the happiest countries in the world. Filipinos like to party, to go out and meet their friends, to enjoy life or so it would appear. But underneath all this enjoyment the fiestas, the holidays, the drinking and joking are a people who really should be guided towards taking life a bit more seriously for their own best interests and who really cannot afford so much carousing if their life quality is to be improved. There is little in the way of business activity that moves very fast in the Philippines at any time, let alone when holidays are in the air [apart from debt collectors, and even they frequently leap in based on incorrect information]. A holiday of which there are many—26 national holidays at last count, let alone the city holidays, fiestas and other events necessitating enjoyment, just slows business down and disrupts economic progress even further. Of course, material things are not necessary in order to have a happy life, but neither should the state encourage hedonism in a socioeconomic environment weighted heavily toward poverty. Business, and that includes the business of the state, should be encouraged to act in a way that brings about real economic development rather than the smoke and mirrors which sometimes is passed off as
economic progress. Admittedly Singapore, one of the beacons of fast and sustained economic progress, contains apparently the world’s unhappiest people, according to a recent survey. The Philippines and its hedonism brings to mind Emperor Nero fiddling while Rome burns. My thinking is that the Philippines right now needs to take life a bit more seriously, not to become full of miserable people but to just cool off a bit with the holidays and the holiday attitude—“oh it’s a holiday, we can leave this matter over until next week then we’ll have a look at it.” Let’s “get real,” economic progress which everybody desperately needs, will not happen by itself, it needs lots of work and effort commitment, focus and determination (and a lot less of doing business the “Philippines way”) so let’s get moving please—don’t leave it until next week, do it now, today . . . There are many people who actually work on holidays, at weekends and after hours and obviously that effort and commitment is admirable, but working in isolation of the rest of the Philippine business and government contacts, who are all off enjoying themselves in the malls at the beach, or otherwise, can be a frustrating experience. I do that and I do it because I enjoy my work, frustrating though it is. I see that there are 10 national public holidays in Singapore [even more multi‐ethnic than the Philippines]. Could this be why they are reported as the unhappiest nation I wonder, even though partly because of the lack of holidays, they do have the spending power? Mike can be contacted at email@example.com http://www.manilatimes.net/index.php/business/business‐columnist/36673‐holiday‐economics‐ revisited
Posted on December 04, 2012 11:29:34 PM
GIR forecasts raised THE BANGKO Sentral ng Pilipinas (BSP) has raised its gross international reserves (GIR) forecast for this year as a strong domestic economy continues to attract inflows. Central bank Governor Amando M. Tetangco, Jr. said foreign reserves were expected to reach $83 billion by yearend, up from an earlier estimate of $77.5‐78 billion. For next year, Mr. Tetangco said reserves could rise even further to $86 billion. In a text message, central bank Deputy Governor Diwa C. Guinigundo said the $83‐billion forecast for this year could pay for more than 11 months’ worth of imports. Reserves hit a new peak in October, inching up to $82.093 billion from September’s $82.029 billion. The central bank attributed the increase to foreign exchange operations as well as investment income. The GIR indicates a country’s capability to pay for imports and service foreign debts. The economy grew by 7.1% in the third quarter, surpassing market expectations and bringing the country’s year‐to‐date growth to 6.5%, above the government’s 5‐6% target. The robust growth prompted the central bank to revise its balance of payments (BoP) surplus forecast for this year upward to $6.8 billion from $2.6 billion. The surplus stood at $6.435 billion as of October. The BoP indicates the country’s transactions with the rest of the world. A surplus means more funds flowed into the economy than went out, providing a cushion against external volatility. Foreign direct investments (FDI) are also expected to hit $1.5 billion this year, higher than the initial estimate of $1.2 billion. The figure is expected to increase to $2.2 billion in 2012. FDI totaled $1.038 billion as of August, up by 61.2% year‐on‐year. ‐‐ Bettina Faye V. Roc http://www.bworldonline.com/content.php?section=TopStory&title=GIR‐forecasts‐raised&id=62463
Posted on December 04, 2012 11:25:54 PM
House OK’s changes to law vs dirty money A MEASURE seeking to strengthen the country’s anti‐money laundering laws moved forward in the House of Representatives yesterday. "House Bill (HB) 6565 is approved on second reading," Deputy Speaker Lorenzo "Erin" R. Tañada III (4th district, Quezon) said during the session. The bill covers banks, money changers, pre‐need companies and others. Dropped from coverage were casinos (including internet casinos), real estate agents and precious metals dealers ‐‐ included in the Senate version ‐‐ as a "compromise" to hasten the bill’s passage in the House. "That is where the opposition is," banks and financial intermediaries committee chairman Rep. Sergio F. Apostol (2nd district, Leyte), who is also the bill’s sponsor, said. The amendment was raised by Minority Leader Danilo E. Suarez (3rd district, Quezon). Mr. Apostol stressed the need to pass the bill into law before the 15th Congress ends next year, following the President’s move to certify the bill as urgent. "There is pressure to pass it in the 15th Congress," he added. Legislators go on a holiday break from Dec. 22, 2012 ‐ Jan. 20, 2013 and again from Feb. 9 ‐ June 2, 2013 for the May mid‐term elections. Third reading approval of HB 6565 will "depend on the House leadership," Mr. Apostol told BusinessWorld. HB 6565 expands the list of covered institutions under the Anti‐Money Laundering Act of 2001, provides a broader definition of money laundering and increases the number of predicate crimes to include bribery, malversation of public funds, human trafficking, tax evasion and environmental offenses. Its approval is being rushed to avoid sanctions by the Financial Action Task Force, which last October held off from a threatened blacklist given some progress in Congress. http://www.bworldonline.com/content.php?section=TopStory&title=House‐OK%E2%80%99s‐changes‐ to‐law‐vs‐dirty‐money&id=62461
Posted on December 04, 2012 08:22:47 PM
Peso stays flat as BSP mulls cap on NDFs THE PESO closed flat against the dollar yesterday despite remittance inflows after the central bank hinted of curbs on the use of a currency hedging tool. The local unit closed at P40.87 per dollar, just a centavo stronger compared to its P40.88‐per‐dollar finish last Monday. It traded within the P40.86‐ to P40.95‐per‐dollar range. The peso has so far appreciated by 6.77% against its P43.84 per dollar close as of Dec. 29, 2011, the last trading day of 2011. “The peso traded within a tight range yesterday due to lack of strong leads from the market, but it depreciated against the dollar after a statement from central bank Governor Amando M. Tetangco, Jr. hinting they have room to not cut banks’ reserve requirement and they are looking at setting a cap on banks’ NDFs (non‐deliverable forwards),” a trader said in a phone interview yesterday. Banks must comply with an 18% reserve requirement. NDFs, meanwhile, allow banks to hedge against fluctuations in the foreign exchange rate. They can also be used to speculate on the exchange rate, however, prompting the central bank to raise the capital charge on them beginning in January 2012 to curb speculation. “We saw some banks buying the dollars after the news came out,” the trader added. “A cap will limit dollar inflows, which will allow the central bank to further temper the peso’s sharp appreciation. However, this will result in less liquidity in the market. When there is less supply of dollars and there is high demand for it, then the dollar will appreciate,” the trader explained. The central bank has been seen buying dollars in the past days to temper the peso’s ascent against the greenback. In a separate phone interview, another trader said: “Continued remittance inflows supported the peso, thus closing at P40.87 yesterday.” The local unit is seen trading within the P40.85‐to P41‐per‐dollar range today. Dollars traded yesterday rose to $736.35 million from $632.802 million. ‐‐ Ann Rozainne R. Gregorio http://www.bworldonline.com/content.php?section=Finance&title=Peso‐stays‐flat‐as‐BSP‐mulls‐cap‐on‐ NDFs&id=62421
Posted on December 04, 2012 10:12:22 PM
Coconut agency hikes fees THE PHILIPPINE Coconut Authority (PCA) has increased its analysis and laboratory fees on the back of rising costs. The increase in laboratory fees was approved by stakeholders in a recent consultative meeting, the agency said in a press release yesterday. PCA Administrative Order No. 2, which was also released yesterday, said: "there is a need to meet the rising costs of chemicals, laboratory supplies and maintenance of laboratory equipment of the Authority." Laboratory fees were adjusted as a result of higher prices of chemicals; culture media; columns; aluminum plates; gases such as argon, acetylene, carbon dioxide, oxygen, compressed air, nitrogen, propane; and laboratory supplies, the coconut industry agency explained. Costs associated with maintenance and calibration of equipment also went up, the agency also said. In its press release, the PCA said its Product Quality Control and Research Division laboratory provides "services such as chemical, microbiological, aflatoxin [analyses] and is establishing polycyclic aromatic hydrocarbon analyses of coconut and its by‐products to ensure quality/ies." Meanwhile, the Plant and Soil Analysis Division provides analyses of soil and coconut leaf, other crops and fruit trees, fertilizer, water and other agricultural samples, the PCA said. "The increase is justifiable based on the increase [in costs] of consumables and maintenance of the pieces of equipment," PCA Administrator Euclides G. Forbes said. Analysis and laboratory fees were adjusted for the first time since 2003, Mr. Forbes said. ‐‐ R. J. R. Portillo http://www.bworldonline.com/content.php?section=Economy&title=Coconut‐agency‐hikes‐ fees&id=62441
Posted on December 04, 2012 10:21:21 PM
Manila still at bottom half of quality of living survey MANILA kept its ranking at the bottom half of an annual survey on "quality of living," behind major cities in the region save for those in Indonesia and Vietnam. The country’s capital ranked 128th among 221 cities in human resource consultant Mercer LLC’s Quality of Living Survey, which guides multinationals in compensating employees sent to overseas assignments. Manila also ranked 120th in a separate ranking on city infrastructure. The Mercer survey, conducted from September to November, evaluated cities based on 39 indicators grouped into 10 categories: political and social environment; economic conditions; social‐cultural environment; health and sanitation; schools and education; public services and transportation; recreation; consumer goods; housing; and natural environment. Scores were weighed against a baseline, New York City, which was assigned 100 points. Other Southeast Asian cities ranked in the survey were Singapore at 25th, Kuala Lumpur at 80th, Bandar Seri Begawan at 97th, Bangkok at 115th, Jakarta at 138th, Hanoi at 147th, and Ho Chi Minh City at 149th. Singapore was the highest ranked Asian city in the survey. Four Japanese cities ‐‐ Tokyo, Kobe, Yokohama and Osaka, followed. Hong Kong was ranked 70th, followed by Seoul at 75th, Taipei at 85th and Shanghai at 95th. Beijing ranked 109th. "A noticeable gap can be seen among Asia Pacific cities where several cities have improved in the region partly because they have been investing massively in infrastructure and public services," said Phil Stanley, Mercer’s Asia Pacific global mobility leader, in a press release. "Competition among municipalities has been continuously increasing in order to attract multinationals, foreigners, expatriates and tourists. Yet a considerable number of Asian cities rank in the bottom quartile, mainly due to high political volatility, poor infrastructure and obsolete public services," he added. The top five cities in the survey were Vienna, Zurich, Auckland, Munich and Vancouver. "In order for multinational companies to ensure their expatriates are compensated appropriately and an
adequate hardship allowance is included in compensation packages, they must be aware of current events and local circumstances," said Slagin Parakatil, senior researcher at Mercer. In terms of infrastructure, Singapore was the highest ranked in the world, followed by Frankfurt and Munich at second place, Copenhagen at fourth, and Dusseldorf at fifth. Kuala Lumpur was ranked 77th while Brunei’s Bandar Seri Begawan stood at 79th place. Ho Chi Minh City was at 137th place. ‐‐ E. N. J. David http://www.bworldonline.com/content.php?section=Economy&title=Manila‐still‐at‐bottom‐half‐of‐ quality‐of‐living‐survey&id=62445
Mga fish vendor sa Pangasinan, apektado sa red tide advisory Posted by Online Balita on Dec 4th, 2012 // No Comment PANGASINAN – Umaangal ang mga nagtitinda ng isda sa Sual sa Pangasinan dahil sa matumal na bentahan ng shellfish sa kanilang lugar, dulot ng red tide advisory na ipinatutupad sa mga bayan ng Anda at Bolinao. Ayon sa mga vendor, kakaunti na lang ang kanilang benta at maging ang mga residente ay nangangamba ring makakain ng mga shellfish na kontaminado ng red tide toxin. Sinabi ng mga vendor na dati ay malakas ang bentahan nila ng tahong at talaba, ngunit nakaapekto ng malaki sa mga tinder ng isda ang red tide advisory sa Bolinao at Anda. Dahil dito, napipilitan ang mga dating nagtitinda ng shellfish na magbenta na lang ng isda, ngunit maliit lang ang kanilang kita. – Liezle Basa Iñigo http://www.balita.net.ph/2012/12/mga‐fish‐vendor‐sa‐pangasinan‐apektado‐sa‐red‐tide‐advisory/
Pangingisda, tiyaking ligtas, ‘di nakapipinsala Posted by Online Balita on Dec 4th, 2012 // No Comment Ni Ellalyn B. De Vera May 100,000 fish aggregating device (FAD), na karaniwang ginagamit upang makapanghuli ng mga tuna at iba pang isda ay “extremely worrisome,” ayon sa isang pandaigdigang tuna conservation group. Inilabas ng Pew Environment Group ang unang taya sa paggamit ng FADs sa pulong ng Western and Central Pacific Fisheries Commission (WCPFC) sa Maynila nitong Linggo, na layuning mapagtuunan ng atensiyon ang lumalawak at hindi kontroladong paraan ng pangingisda. Ang taya ay batay sa mga datos na kinalap mula sa mga nalathalang scientific literature, industry expertise at mga dokumento mula sa mga regional fisheries management organization na nangangasiwa sa pangingisda ng tuna. “The deployment of tens of thousands of drifting fish aggregating devices in the world’s oceans with little to no oversight is extremely worrisome,” sabi ni Amanda Nickson, director of tuna conservation ng Pew Environment Group, said. Ginagamit ang FADs para makaakit ng tuna at iba pang isda. Umaabot ng 50 metro sa dagat at maaaring yari sa iba’t ibang materyales, gaya ng kawayan, lumang lambat at plastic ribbon. Maaaring lumutang nang matagal at makaakit ng maraming lamang‐dagat, talamak ang paggamit ng FAD dahil mas maraming isda ang nahuhuli. Ginagamit ang FAD sa paghuli sa halos kalahati ng mga tuna sa mundo at bunsod ng labis na paghuli sa big eye tuna sa Pacific Ocean. Bukod dito, libu‐libong nakalutang na FAD ang inaabandona o nawawala bawat taon, kaya lalong lumalala ang problema sa karagatan. http://www.balita.net.ph/2012/12/pangingisda‐tiyaking‐ligtas‐di‐nakapipinsala/
Spanish dairy company ties up with ABI to sell yogurt in RP •
Written by Tribune
Wednesday, 05 December 2012 00:00
An owner of a Spanish dairy company has expressed his confidence on the Philippine economy as he ventured on forging an agreement with one of the country’s beverage giant to market his product locally. “This is a good place to start. The Philippine market presents so many exciting new opportunities for us,” enthused Tomas Pascual, president of Grupo Leche Pascual (GPL), during the launching of the Asia Brewery Inc. (ABI) Pascual Foods, at the ballroom of New World Hotel Monday night. “We are ready to invest. (We are lucky) to find a partner who knows the market very well,” Pascual said, as he commended ABI chief operating officer Michael Tan. Tan, for his part, said “we have the same passion for consumers and the same desire to succeed. Now, delving into a yogurt market, we are re‐energized and true to our mission of delivering great quality products available to Filipinos.” The newly formed company, ABI Pascual Foods, will market GPL’s major dairy product, the Creamy Delight, a yogurt which they believe will revolutionize Filipinos yogurt experience. Grupo Leche Pascual has been producing milk and milk products for the last 40 years and it has a network of 600 distributors in Latin America. Lucio Tan‐owned ABI, for its part, is the most modern large scale fully integrated brewery in Southeast Asia. It has international tie‐up with world renowned brewing company to develop the premium sector of the market and the licensee manufacturer of international brand beers such as Carlsberg, Budweiser Colt 45 and Labatt. “Our heritage is making products that are healthy and satisfy the needs of our consumers worldwide,” Pascual said, adding that “we take great pride and invest heavily in the highest quality standards that we implement on a daily basis.” Tan said the product will be sold at a price 40 to 50 percent lower than the price of the same product being sold at the market now (which ranges from P30 to P105). “This is something unique we intend to bring the product down to the general trade,” Tan added. Creamy Delight will be initially marketed in the Philippines and with import volume of one million boxes a year. Tan and Pascual said they intend to make Manila as the business center as they expand their market in the Southeast Asian region in the near future. They also added that once the product has created its own local market niche, they would consider producing the product locally. “In two or three year’s time, we might consider setting up a factory in Cabuyao,” Tan said, as he explained that they will fill the gap on consumers’ consumption of yogurt in the country. http://www.tribuneonline.org/index.php/business/item/7742‐spanish‐dairy‐company‐ties‐up‐with‐abi‐to‐sell‐ yogurt‐in‐rp