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Agri dept supports withdrawal of incentives given to Thai firm Category: Agri-Commodities Published on Sunday, 13 January 2013 19:27 Written by and PNA

THE Department of Agriculture (DA) will ask Malacañang to overturn the Board of Investments’s (BOI) granting of tax incentives to Thai-owned agribusiness company Charoen Pokphand Food Philippines Corp. (CPF), if not provide similar perks to local agricultural-industry players to level the playing field. The incentives granted are a six-year exemption from payment of income tax and a 10-year exemption from paying taxes and duties on imported breeding stocks and genetic materials. Industry leaders have called on the government to revoke these perks due to alleged preferential treatment. Speaking at the 6th Multi-Sectoral Agricultural Summit at Club Filipino in San Juan City on Friday, Agriculture Secretary Proceso J. Alcala asked industry players to formalize their proposal to revoke the tax holiday or suggest measures that will level the playing field with the Thai food giant. “Malacañang has already called a meeting for this [issue]. I’m asking you to come up with a resolution and recommendations on this so we can defend this,” Alcala told the attendees. In a resolution adopted during the summit, industry leaders warned that the “unlawful granting of incentives and tax breaks by the BOI to CFP, a foreign-owned corporation, will kill the swine, livestock, aquaculture, and other allied industries in the Philippines.” “The BOI move favoring CFP undermines our national sovereignty and food security. It will also result in the loss of employment for millions of Filipinos, as the agriculture sector employs 33 percent of the entire Philippine labor force,” they said. Rosendo So, Abono party-list chairman, said the government must address demands for the revocation of the incentives, as well as the need for a more effective anti-smuggling campaign.

“These two issues are our biggest concerns, although for hog and poultry producers, the incentives granted to [CFP] cause our biggest headaches,” So said. Party-list Rep. Nicanor Briones of Agap said the resolution showed that industry stakeholders are united. He astressed the need for the Bureau of Customs to address the rampant technical smuggling of prime-cut pork meat passed off as “offal.” Daniel Javellana Jr., chairman of the National Federation of Hog Farmers Inc., said the incentives must be revoked to level the playing field and curb the smuggling of prime meat cuts. “We have to save our industry. We hope President Aquino will hear our sentiments and not wait for us to close shop. We know that globalization is inevitable, but give us time to prepare,” Javellana said. Edwin Chen, president of the Pork Producers Federation of the Philippines Inc., said the BOI should also change its policy of not consulting other government agencies and agricultural stakeholders in granting the incentives to the Thai firm. Alcala was reportedly bypassed by the BOI in its decision to grant the perks. “CFP is just the tip of the iceberg. What is [left] to prevent other giant foreign firms from entering the country, distorting the playing field, flooding the market [with imported goods] and killing local producers?” Chen asked. Huge investment CFP reportedly purchased large tracts of land in various areas in Region 3 (Central Luzon) as its base of operations for its billion-peso projects. The company has invested P7.14 billion in the region. Its projects include hog parent stock farms in Tarlac and Bulacan provinces, a hatchery in Nueva Ecija province, and broiler farms in Bulacan. The BOI granted the incentives because of CFP’s huge investments. In its defense, the board said the firm’s projects were consistent with the agency’s Investment Priorities Plan, which includes agriculture as an area where foreign investment may be encouraged. Meanwhile, the committees on agriculture and food security in the House of Representatives have issued a joint resolution asking the BOI to suspend the implementation of the tax perks while it is being investigated. “Amid strong opposition from our local industry, and most especially our backyard hog raisers that account for 80 percent of our hog production in the country, it is time for

Congress to start a deep probe into this [as soon as possible],” Party-list Rep. Agapito Guanlao of Butil said. The 1,800 jobs to be generated by the Thai firm’s projects “will not compensate for the 7 million Filipinos who stand to be displaced if domestic hog and poultry growers close shop,” he added. ( and PNA)

In Photo:Agriculture Secretary Proceso J. Alcala speaks at the 6th Multi-Sectoral Agricultural Summit in Club Filipino, San Juan City, on Friday. (DA Photo)

DA, Unilever in talks for tamarind plantation By Czeriza Valencia (The Philippine Star) | Updated January 14, 2013 - 12:00am MANILA, Philippines - The Department of Agriculture (DA) is currently in talks with Unilever Philippines for the identification of possible sites for a proposed tamarind plantation that can supply the vegetable requirements of its Knorr products. High Value Crops Development Program (HVCDP) director Jennifer Remoquillo said that DA is currently making an inventory of existing tamarind cultivation areas. “Our first step is to make an inventory of existing tamarind planting areas,” said Remoquillo. She said that as part of the company’s corporate social responsibility initiatives, Unilever prefers to establish a plantation in areas cultivated by indigenous peoples (IP). “This is a corporate social responsibility initiative of Unilever, and they prefer IP cultivating areas in the Philippines, “ she said. The DA is promoting the cultivation of fruit-bearing trees like tamarind to strengthen the country’s natural ingredients industry and take advantage of the $400-billion global market for natural ingredients. Tamarind, which is abundant in the country, needs to be cultivated systematically to satisfy the requirements of instant sour broth makers. Other crops that are being pushed for cultivation by the department are lagundi and tumeric, both of which are known for their medicinal properties. Remoquillo said makers of instant sour broth mixes in the country still import at least 8,000 metric tons (MT) for their raw material requirements.

Banana Plantations Rehab Costing P7B By EDU LOPEZ January 13, 2013, 5:14pm The Davao-based Filipino Banana Growers and Exporters Association (PBGEA) has estimated that it would cost at least P7 billion to rehabilitate the banana plantations destroyed by typhoon Pablo in December, 2012. The banana growers said that a total of 14,176 hectares of banana plantations, mostly located in Compostela Valley Province hardest hit by the cyclone early December. Hardest hit were those owned by small growers totaling 9,020 hectares plus corporate farms with 5,166 hectares of Cavendish bananas destroyed. The whole of Mindanao is host to 80,000 hectares of banana plantations, making the crop one of the country’s top fruit export, second only to pineapple. Third largest is Philippine mango. PBGEA estimated that potential revenue losses of the banana planters in terms of lost harvests for this year was put at P8 billion. Seen not to be delivered as a result of the typhoon this year were close to 50 million boxes of raw bananas at US $4 per box. It was a big blow to one of the few export industries that defied the global trade slowdown last year to make up for the decline of the country’s manufactured exports for the whole of 2012 and keep Philippine total exports on the growth path in a very difficult year. Industry leaders doubted if the industry could recover fast enough to sustain doubledigit growth this year. Bananas and other typhoon sensitive crops found home in Mindanao during the past century due to its reputation of being the only typhoon-free part of the country. In the past two years, however, typhoons began hitting the region, first in Northern Mindanao centered at Cagayan de Oro City and only last December, Compostela Valley. Unused to typhoons, the region saw the death of thousands of people, heavy losses of properties including homes, livestocks and crops.

Low-Interest Loan For Replanting In TyphoonAffected Areas Opened By MELODY M. AGUIBA January 13, 2013, 5:13pm The Agricultural Credit Policy Council (ACPC) has opened a low interest-bearing P160million loan facility to support replanting efforts in Typhoon Pablo-ravaged areas. The loan would be made available by ACPC to cooperative banks to allow speedier processing and release. “It may no longer be necessary for a farmer to get certification (of having been typhoonaffected). For as long as they are from the affected barangays identified by local government units, they can be eligible for assistance,” said ACPC Director II Norman William S. Craft in an interview. The financing is specifically designated for four regions. These are Region10 (Bukidnon, Lanao del Norte, Camiguin, Misamis Oriental and Occidental; Region 11 (Compostela Valley, Davao del Norte, and Davao del Sur); Region 12 (South Cotabato, Sultan Kudarat, Saranggani, General Santos); and Region 13 or Caraga Region (Agusan del Norte and Sur, Surigao del Norte and Sur). The loan carries an eight percent interest rate plus a service fee of four percent, which has been considered low as financing for agricultural production has always been deemed a high-risk venture. “When this was proposed to the Council, we considered these farmers have already been affected by a calamity which is why at a 12 percent, that should already be all in — including interest and other charges,” Craft said. Regular charges of cooperatives that lend to farmers can reach to 23 percent. This includes 18 percent interest rate plus five percent service charge. Department of Agriculture’s Regional Field Units and local government units will furnish rural banks with a list of affected barangays. Rural farmers are among the most deprived when it comes to financing since planting of crops is exposed to risks of typhoons of 20 or more times a year. This is on top of other disasters — landslides or earthquakes. Through the Agri Agra Law, government has compelled commercial banks to put in money for crop production specifically by allowing cooperatives to retail their money. DA has placed at P30 billion the agricultural damage caused by typhoon Pablo.

Damaged crops were banana, P22 billion; corn, P1.6 billion; coconut, P1.1 billion; fisheries, P124 million; livestock, P361 million and rice, P476 million. Specific damage estimates were P2.6 billion for Region 10; P25.8 billion, Region 11; Region 12, P72 million; and Caraga , P471 million. Aside from Regions 10 to 12, also reported affected were Region 4-B, Palawan, P100 million; Region 6, Negros Occidental, P1.4 million; Region 7, Bohol, P19 million; and Zamboanga del Sur, P1.7 million. Agricultural facilities were also destroyed including irrigation, P1.2 billion; fisheries facilities, P34 million; and livestock facilities, P17 million.

Govt asked to rehab banana farms By Julito G. Rada | Posted on Jan. 14, 2013 at 12:01am | 358 views Farm owners and workers asked the government on Sunday to rehabilitate more than 14,000 hectares of banana plantations in Davao Oriental and Compostela Valley that a powerful typhoon ruined last December, which left tens of thousands of people homeless and out of jobs. The Pilipino Banana Growers and Exporters Association (PBGEA) asked President Aquino for an outlay of about P8 billion to finance the one-year rehabilitation of the farms planted with Cavendish bananas for exports. “Fast rehabilitation of the banana farms could spur economic activity in Mindanao and help people rebuild their lives,” a PBGEA official said. Hundreds of people were killed and injured when Typhoon Pablo, the worst to hit the area in more than 50 years, cut a path of destruction in the two provinces, which are mostly planted with bananas. It comprised about a fifth of the 80,000 hectares planted with bananas in Mindanao. Bananas is one of the country’s top exports after pineapple. Damage to banana farms caused by the typhoon was estimated at P8 billion and the Department of Trade said it could pull down the total merchandise exports this year.Party-list Rep. Fernando Hicap supported the quick rehabilitation of the farms but the big banana monopolies should be distributed to farm workers for free. “Malacanang should pursue the rehabilitation of devastated farms. But that should not be in the interest of banana monopolies because that is unfair and unjust to the Filipino taxpaying public and to the banana farm workers,” Hicap said. “There should be rehabilitation and the rehabilitated agricultural lands covered by banana plantations should awarded to farm workers for free,” he said. Hicap identified the monopolies as the 300-hectare Comval Tropical Fruit Inc, the vast tracts of banana lands in Compostela operated by Sumitomo Fruits, Inc. of Japan, the 1,000-hectare farm operated by Mindanao Alliance of Self-Help Societies, and the 14,000-hectare plantation in Davao City. Hicap said the banana growers used the sad plight of farm workers to call on government o rehabilitate the farms, which is an insult to the intelligence and dignity of farm workers and landless peasants in the region. With Gigi Muñoz-David

Government to borrow P120B from domestic lenders– report Category: Top News Published on Sunday, 13 January 2013 21:01 Written by Paul Anthony A. Isla / Reporter THE national government plans to borrow P120 billion from domestic lenders within the first quarter of 2013 in order to take advantage of the country’s low interest-rate environment. This was revealed by the Metro-bank Research Department in its latest report released on Friday. The Economic Weather Report said the government is inclined to tap the domestic lenders to provide 80 percent of its requirements, as it plans to reduce its exposure to foreigndenominated debts. It added that the government is also looking to issue dollar-denominated bonds to local investors this year in a follow-up to the successful issue in 2012, when it raised $500 million from the sale of dollar-denominated bonds in November. The report said the global economy faces an uncertain horizon in 2013 as economic events in the past year proved to be gloomy. “The spillover effects of the dragging saga of the euro-zone crisis are expected to persist this year as current policy stances continue to fall short of what is needed to prevent further weakening of economies. The US is also seen to post sluggish growth as structural weaknesses are still left unaddressed. Emerging economies will remain as the bright spots of growth opportunities,” it added. According to the Metrobank report, the Philippine peso is expected to maintain its strength and range to around P39.40 to a dollar by year-end judging from its upbeat performance compared to those of its Asian neighbors in 2012. The report said the currency landscape this year is seen to be likely driven by a number of factors that include diverging central bank policy, uneven progress toward sovereign-debt sustainability, political change, progress in Europe, growth in Asia and investors’ search for yield. In contrast, it added, the peso traded within the P40 to P44 range as shown by last year’s close of P41.05, or a 7-percent appreciation, from P43.94 at the start of 2012. The report said the peso is seen to be supported by the solid take-up of capital flows and still-robust remittances of overseas Filipino workers, and that it does not expect a steep

appreciation owing to intervention by the Bangko Sentral ng Pilipinas to smoothen exchange-rate volatilities. It noted that it does not discount a volatile period, especially in the first half of 2013, as financial markets remain cautious on the still-unresolved euro-zone debt crisis and the US fiscal cliff. The report said that the global foreign-exchange market experienced too much volatilities last year, adding that capital flows were driven by global growth deceleration, the continuing euro-zone crisis and central-bank policy responses. Inflation rate, based on the report, may slightly increase 3.6 percent this year due to tight supply in some commodity sector. The stronger peso and stable global commodity prices, however, are deemed to keep inflation manageable.

ODA commitments rise to $8.8B in Q3 2012 • •

Written by Tribune Monday, 14 January 2013 00:00

Total net commitment from official development assistance (ODA) amounted to $8.83 billion as of the third quarter of last year, which was a $318.31-million increase from the previous quarter, according to the National Economic and Development Authority (Neda).

“The increase in total net commitment was due to one newly-signed loan, one newlyeffective loan recorded during the quarter, and adjustments reflecting exchange rate fluctuations,” said Neda-Project Monitoring Staff (PMS) director Roderick Planta. The newly signed loan as of September 2012 is the Jalaur River Multipurpose Irrigation Project-Phase II, which has a net commitment of $207.88 million. The project’s lead proponent is the National Irrigation Administration.

On the other hand, the Flood Risk Management Project along Selected Principal Rivers 2 is the additional newly-effective loan reported in September with an amount of $95.83 million. The project’s lead proponent is the Department of Public Works and Highways.

Meanwhile, adjustments in loan net commitments to reflect exchange rate fluctuations amounted $14.60 million.Compared to the amount as of September in 2011, Planta said that total ODA net commitment as of September this year also grew by $410.74 million.

Total ODA net commitment as of September 2012 consisted of 74 loans, of which 67 are project loans worth $7.69 billion and seven are program loans worth $1.14 billion. From these loans, $496.58 million were already disbursed as of the same period. However, this was lower than the total disbursed amount of $942.98 million as of September 2011.

“During the third quarter of 2011, three single-tranche program loans registered full disbursements, while in the third quarter of 2012 a newly-effective program loan with a net commitment of $350 million is yet to disburse funds,” the NEDA official explained.

Planta also noted that the disbursement rate, or the loan amount’s level of disbursement against the annual target, declined to 45.45 percent from 74.07 percent during the same reference periods.$88b-in-q32012

Speaking Out

Banks: The need to save (First of Two Parts) By ATTY. IGNACIO R. BUNYE January 13, 2013, 5:47pm Why are banks important? Just a few weeks back, we observed National Banking Week — a special opportunity that seeks to highlight the benefits banks provide to society. National Banking Week, annually held every first week of January, enjoins all banking institutions and their branches to undertake promotional and publicity-generating activities regarding their significant role in the Filipino community, pursuant to Proclamation No. 2250 dated 10 December 1982. This year’s theme is “Masaganang Lipunan, Bunga ng Salaping Iniingatan. Mag-impok sa Bangko.” The Financial Consumer Affairs Group (FCAG) of the Bangko Sentral ng Pilipinas, in its weekly e-newsletter, stressed the need for continuing campaign efforts to highlight the importance of saving in banks. Citing the 2009 Consumer Finance Survey conducted by the Bangko Sentral’s Department of Economic Statistics, the FCAG disclosed that eight out of ten or 78.5 percent of Filipino households still do not have a bank deposit account. The survey further showed that 92.8 percent of that figure stated “the lack of money” as the primary reason for the absence of a bank account. On the other hand, the remaining 7.2 percent of the households cited the following: •Do not need a bank/cash account (1.7 percent). •Cannot manage an account (1.5 percent). •Minimum balance is too high (1.2 percent). •Do not like to deal with banks/financial institutions (1 percent). •Others not specified (1.8 percent). Lastly, the BSP data revealed that households in areas outside the National Capital Region were found less inclined to open bank accounts than those residing in Metro Manila.

“What people ought to realize is that saving money in banks is way more advantageous than keeping it elsewhere such as in piggy banks, in a locked drawer or cabinet at home, or through the traditional under-the-mattress approach,” the FCAG explained. The FCAG quoted the following reasons on why banks are important from financial websites • Safety—The bank remains the safest place to keep one’s money, according to FCAG. Banks maintain high security facilities that protect a depositor’s money from theft and safeguard it from the elements and other disasters such as fire, floods and the action of rodents or insects. • Interest—Instead of letting your money “sleep” at home, the FCAG advised, deposit it in the bank where it has the potential to earn interest. The amount you get may not seem like much, but rest assured that it grows over time and adds up very quickly (the FCAG referred to this as “the power of compounding interest”). It stressed: “The earlier you start saving in the bank and if you continue putting more money in the pot, the better.” (To be continued next week) Note: My book Central Banking for Every Juan and Maria is available at Fully Booked, Bonifacio Global City. Please call 8587000, 8587004 or 8587036 to reserve your copy.

Council to draw up plan making PHL more competitive Category: Top News Published on Sunday, 13 January 2013 20:37 Written by Jennifer A. Ng / Reporter AFTER the Philippines was adjudged as one of the worst places in the world to do business in by global ratings agencies, the National Competitiveness Council (NCC) recently summoned captains of industry to help it draw up a practical plan, complete with doable programs, to make the country more competitive. A rethinking of a competitiveness plan for the Philippines was called by NCC on the heels of a report made by the International Finance Corp., the investment arm of the World Bank, that the Philippines had slid down to become one of the worst places to do business in the whole world. In the Association of Southeast Asian Nations (Asean) region, it was second to the last in ranking, beating only Laos. Most members of the economic bloc had improved their ratings to the first 50 economies where doing business is easiest, with Singapore landing in the top five countries where doing business is easiest. The Asean also groups Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, Thailand and Vietnam. The plan, according to minutes of a special meeting called by Guillermo Luz, NCC private sector co-chairman, is to involve leaders of the business community in drawing it up and targeting its completion this year. It was further targeted that specific programs, supported with government and private-sector funds, will already be in full implementation when the Philippines will host the Asean Economic Summit in November 2015. All programs to be included in the proposed plan will be regularly monitored to find out how far government agencies and their partners in the business sector have gone in executing them.Pointed out as the country’s Achilles’s heel during a consultation meeting with business leaders, led by Jaime Zobel de Ayala, is the tedious system of processing business papers from registering a new business to getting permits and clearances where the Philippines was found to have the record of taking too long a time and requiring too many signatures. Getting all the needed papers to start a business in the Philippines takes up to three months, a statement released by the Philippine Exporters Confederation Inc. said. Luz said the strategic plan must only pick a few industries with high growth potentials chosen by the business leaders to lead the competiveness drive, like tourism, to give the plan more focus. Trade Undersecretary Adrian Cristobal Jr., however, disagreed. He pointed out that before the end of last year, up to 15 out of 50 strategic industries in the country have drafted their own road-map plans to lift the Philippines to industrialized status.

The Industry Clustering Boosts Micro, Small, and Medim Enterprises Sector January 13, 2013, 5:42pm In its first year of implementing industry clustering, the government was able to set up 354 new Micro, Small and Medium Enterprises (MSMEs), assisted 743 existing MSMEs, created 9,641 jobs, and generated P261.8-million domestic sales and $24.1-million export transactions. The gains were made through the National Industry Capacity Enhancement Project (NICCEP), launched on May 11, 2012, by the Department of Trade and Industry (DTI), to support the development of MSMEs. Labor-intensive MSMEs play a major role in socio-economic development, and job creation in both urban and rural areas, equitable income distribution, use of indigenous resources, and more dollar earnings. NICCEP, a three-year technical assistance agreement between DTI and the Japan International Cooperation Agency (JICA), spurs exports and generates investments. It provides a framework for public-private partnership and a strategy for inclusive growth. Under NICCEP, there is exchange of experts between the Philippines and Japan. Industry clustering is a major strategy under Philippine Development Plan 2011-2016. Clusters are groups of similar and related firms in a geographic area that share common markets, technologies, skilled workforce, and local suppliers. The project sets up common production centers to give MSMEs access to better technology, a better and wider market, and the global supply chain. Clustering was piloted years back for the jewelry industry in Bulacan, the bottled sardines industry in Zamboanga, and the furniture industry in Cebu, which attained export success and became models for the strategy. DTI and JICA adopted it to develop inter-related enterprises in provinces for foreign and domestic markets. NICCEP identified 24 pilot industry clusters nationwide. Covered by NICCEP are milkfish, dairy, coffee, bamboo, tourism, information and communications technology (ICT), health and wellness, wearable’s, and homestyles in Luzon; gifts, dÊcor and housewares, tourism, information and communications technology, and health and wellness in the Visayas; banana, mango, coconut, seaweeds, wood, mining, tourism, ICT, rubber, poultry, tuna, and palm oil in Mindanao. We wish the Department of Trade and Industry headed by Secretary Gregory L. Domingo and Japan International Cooperation Agency-Philippines Chief Representative Takahiro Sasaki, all the best and success in their partnership to spur the growth of Philippine enterprises. MABUHAY!

Domingo Sees 7% GDP Growth By BERNIE CAHILES-MAGKILAT January 13, 2013, 5:31pm Trade and Industry Secretary Gregory L. Domingo forecasts a 7 percent GDP growth in 2013 saying the gains of 2012 would be sustained by the expected influx of new foreign investments, implementation of huge infrastructure projects, improved consumer spending and improved exports. Early in 2012, Domingo projected the GDP for that year to hit over 7 percent making him the most optimistic Aquino Cabinet member. The government projected GDP in 2012 to reach 5-6 percent and 6-7 percent in 2013. Domingo, however, said his 2012 GDP projection may not be hit although the GDP is expected to settle at a high 6 percent noting that GDP growth already averaged 6.5 percent in the first nine months of the year. A source said initial data showed the domestic economy expanded between 6.8 to 6.9 percent in 2012. Domingo said the economy’s sustained growth would be able to support the government’s inclusive growth policy, which means inclusion of the poorest of the poor. Thus, he said, the government’s top two priority sectors are tourism and agriculture because these sectors employ mostly unskilled people in the provinces where poverty incidence is high. Domingo also noted the influx of major manufacturing projects with ongoing plant construction as a big factor that would ensure sustained growth in the next several years. With these new investments, he expects that electronics exports would regain its footing in 2013 to 2014 even with a weak global electronics market because the local industry has already expanded its market reach. Merchandize exports in the first 11 months of 2012 grew 7 percent to $48.026 billion from the $44.898 billion in the same period of 2011 as earnings in November grew 5.5 percent to $3.551 billion from the $3.366 billion in the previous year. Domingo further noted strong growth in major sectors such as manufacturing, services, and agriculture. According to the latest National Statistics Coordinating Board data, services sector grew by 7.0 % on the first three quarters of 2012, agriculture up by 4.1%, and the manufacturing sector with 3.9% growth rate.

Another reason for the growth is the Doing Business in Free Trade Area (DBFTA) Program, an awareness campaign that guides exporters in understanding emerging and new markets and explains the benefits of using Free Trade Agreements (FTAs) in conducting business abroad. Over 116 DBFTA sessions were conducted by the DTI nationwide last year and were attended by 11,074 participants coming from 5,833 companies. In addition, Domingo said the DTI will go full blast this year with its Shared Service Facilities (SSF) projects for the micro, small and medium enterprises (MSMEs). The DTI has allocated P700 million for the acquisition of 1,000 SSFs to be granted to industry clusters, cooperatives, and local government units nationwide to enhance the production capabilities of MSMEs. DTI targets to launch 25 SSFs in the first quarter this year. SSFs will help push for the development of the agriculture and agri-based sectors, which are mostly MSMEs but could attract more investments and create additional jobs in the countryside. The DTI will also continue to be aggressive in its investment promotions to attract more investors to the country. Last year, DTI’s lead investment promotion agency Board of Investments facilitated about 268 inbound missions comprised of 35 delegations and 233 company visits.

External Debt Servicing Declines 16.5% By LEE C. CHIPONGIAN January 13, 2013, 5:29pm The country’s foreign debt servicing as of end-September last year reached $4.78 billion, 16.55 percent lower compared to the same period in 2011 helped by the much improved foreign exchange rates, data from the Bangko Sentral ng Pilipinas (BSP) showed. The debt service burden which is the principal and interest payments on fixed medium and long-term loans has been decreasing because of loan repayments and adjustments to foreign exchange rates. As of the end of September, principal payments declined by 28.68 percent to $2.63 billion from $3.68 billion in 2011 while interest payments increased 5.27 percent from $2 billion to $2.15 billion. The central bank has been consistently ensuring that the external debt service level and the debt service ratio or outstanding external debt as a percentage of aggregate output or gross national income still reflects the country’s capacity to repay foreign obligations over a long-term horizon. Based on BSP data, the total outstanding external debt of both government and private sector amounted to $61.7 billion as of the end of the third quarter last year, 1.12 percent lower year-on-year but compared to the previous quarter ending in June, foreign debt inched 0.08 percent higher. But the outstanding external debt’s ratio vis-à-vis the GDP continued its decline to 25.6 percent compared to last year’s 28.4 percent. The external debt, which is all types of borrowings by Philippine residents from nonresidents that are approved and registered by the BSP, is lower on a year-to-date basis not only because of net repayments and the weakened US dollar but also because of higher resident investments in domestic debt papers. As of end-September the external debt ratio, a solvency indicator, dropped to 19.4 percent from 19.7 percent in June and 21.5 percent the same period in 2011. The debt service ratio that measures sufficiency of foreign exchange reserves to meet maturing obligations has improved to 7.3 percent as of the end of the third quarter. According to the BSP, the ratio has consistently remained well below the 20 to 25 percent international benchmark, which implied a “strong liquidity position relative to maturing obligations.” During the period, the central bank said the currency composition of external debt was unchanged with US dollar-denominated accounts accounting for 48.3 percent of total,

Japanese yen with 26.1 percent and multi-currency loans from the Asian Development Bank and the World Bank with 11.8 percent. About 13.8 percent of external loans are denominated in 18 other currencies. Most of these debts or 43.1 percent are owed to multilateral and bilateral creditors such as the ADB and the World Bank while about 36.1 percent are foreign holders of bonds and notes. The rest are foreign banks with 14 percent and foreign suppliers or exporters with 6.8 percent.

Gov’t Focus: Stronger Fiscal Position By CHINO S. LEYCO January 13, 2013, 5:26pm The Department of Budget and Management (DBM) expects the tax effort of the government to continue improving in the coming years in keeping with its ultimate goal of reducing public debt while increasing its tax take that should ensure a stronger and healthier fiscal position for the country. Data from the DBM showed that the national government plans to downscale its budget deficit to 2 percent of the country’s gross domestic product (GDP) starting this year up to 2016 when President Aquino’s term ends. “The fiscal year 2014 budget will continue the policy of fiscal consolidation,” the DBM said in its national budget memorandum that kicked off the preparation for the Aquino administration’s budget for next year. Aside from reducing the government fiscal deficit, the DBM said that the country’s tax effort would, likewise, continue to increase to around 17 percent by 2016. “The ultimate objective is to reduce the public debt and increase the government’s tax take to levels comparable with peer countries for a stronger and healthier fiscal position,” the DBM said. In the first semester of last year, the government’s tax effort increased to 13.3 percent despite the absence of any new revenue measure from 12.7 percent in the same period in the previous year. Meanwhile, as of October 2012, the national government debt stood at P5.359 trillion, while its budget deficit was at P127.3 billion at end-November, well below the P279.1 billion ceiling for the year, equivalent to 2.6 percent of the country’s GDP. “In view of the continuing economic weakness of Europe and the United States, it will be prudent for the government to strengthen its fiscal position and sustain its fiscal reform,” the DBM said. The budget department cited the need for more revenue generating measures. The Department of Finance (DOF) and the DBM have lined up several proposed measures to bolster state revenues, including the rationalization of fiscal incentives and the new mining regulations. “The success of these reforms will depend on the government’s strategy of aggressively pursuing tax administration reforms to improve tax compliance, expanding its revenue

base, and further sharpening its sector and geographical expenditure prioritization and execution,” the DBM said. “These reforms will also determine the extent of government’s ability to use its expenditures to push domestic economic activity,” the department added. Last year, President Aquino signed into law the long-delayed new excise tax law that is expected to generate additional P33.5 billion in revenues for 2013. Proceeds of the excise tax reform law will be used for the government’s universal healthcare program and the livelihood, training, and assistance needs of tobacco farmers and workers in the alcohol industry.

‘Bising’ weakens after dumping rain on Bicol By Helen Flores (The Philippine Star) | Updated January 14, 2013 - 12:00am

MANILA, Philippines - Tropical depression “Bising” weakened yesterday into a lowpressure area after dumping heavy rains over the Bicol region last Saturday, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) reported yesterday. The low-pressure area was spotted at 985 kilometers east of Aparri, Cagayan as of 4 p.m. yesterday. The weather bureau, however, warned operators of fishing boats and other small sea vessels to avoid sailing into the eastern coastal areas of Northern Luzon and Central Luzon due to heavy rains brought by the northeast monsoon. PAGASA said Bicol and the Samar provinces would experience cloudy skies with occasional light to moderate rainshowers and thunderstorms until today. Cagayan Valley, the Cordilleras and Ilocos would be cloudy with light rains. Metro Manila and the rest of the country will experience partly cloudy skies with brief rainshowers or thunderstorms.Bising, the second tropical cyclone to enter the country this year, brought rains that caused floods in low-lying areas in Albay and displaced at least 13,000 residents. Meanwhile, the National Disaster Risk Reduction and Management Council (NDRRMC) said 5,454 families in 66 barangays have been affected by the typhoon.The affected persons included those residing in flooded areas, those displaced and are now in evacuation centers or with their relatives, and those who lost properties. NDRRMC said 2,756 families or 7,880 persons were still staying in 25 evacuation centers. The affected residents were from Davao, SOCCSKSARGEN and Caraga regions. NDRRMC said 229 passengers, 30 rolling cargoes and six vessels in Albay have been stranded due to the bad weather. – With Alexis Romero

Organic Farming January 13, 2013, 4:50pm BUTUAN CITY (PNA) – A non-government organization, in partnership with the Department of Agriculture-Regional Field Unit-13 (DA-RFU-13) and the Provincial Agriculturist’s Office of Agusan del Sur planned to extend their one Integrated Diversified Organic Farming System (IDOFS) this year after showcasing a successful pilot project. Jimmy Geronimo, coordinator of the Agusanon Para Sa Bag-ong Pilipino, Inc. (Agus Pinoy), which holds office in San Francisco, Agusan del Sur, said that because of the initial success of their pilot IDOFS Farm Project, they are planning to start 13 more for this year. A one-hectare IDOFS techno-demonstration farm project located at Purok Sunrise in Barangay Buena Gracia, Talacogon town in Agusan del Sur, owned by farmer cooperator Elirey J. Cabatana, his wife Susan and their four children, was visited by a team of media practitioners, farmer leaders, and DA-RFU-13 personnel as one of the stops during a twoday expository tour to the DA Agricultural Projects in the region recently.

DENR Designates Water Quality Areas By ELLALYN B. DE VERA January 13, 2013, 4:23pm MANILA, Philippines --- An important river system in Mindanao has been designated by the Department of Environment and Natural Resources (DENR) as a water quality management area (WQMA) in line with Republic Act (RA) 9275 or the Philippine Clean Water Act of 2004. DENR Secretary Ramon Paje signed an administrative order designating the 35-kilometer Taguibo River in Agusan del Norte as a WQMA to protect the water body from further damage from development activities. The Taguibo River is a source of water supply for Butuan City and nearby towns, and plays a crucial role in local livelihood since it provides water for agricultural production. The river also serves as principal sustaining resource to aquaculture in the area, and supports food production and industry in its jurisdiction. Paje said the designation of WQMAs is an important tool in enforcing the Clean Air Act, as it calls for the protection of the water quality of river systems that are essential for livelihood and public health. “Just like what we are doing in other WQMAs, we have to maintain an acceptable water quality in the Taguibo River because it is a source of water supply, and livelihood of the people of Butuan City, as well as the towns of Magallanes and Remedios T. Romualdez in Agusan del Norte,” Paje said. The Butuan City Council had earlier passed a resolution recommending to the DENR secretary the designation of the Taguibo River as a WQMA, saying its present condition requires serious protection and management actions by the local government and several stakeholders located within the watershed area. Its inclusion as one of the WQMAs signifies the government’s commitment to providing clean water, which “is a basic right of every Filipino,” Paje said. “Access to clean water is a fundamental human right and it is the duty of the government to guarantee this,” he added. “Apart from that, access to safe drinking water and sanitation is among the eight Millennium Development Goals (MDGs) of the United Nations (UN) as a means to control the spread of water-borne diseases,” he said.

Paje also said that designating WQMAs will enable concerned officials both in the national and local levels to take focused interventions on specific water quality issues relevant to a particular locality. Under the Clean Water Act, the DENR, in coordination with the National Water Resources Board (NWRB), is mandated to designate certain areas as WQMAs using appropriate physiographic units such as watershed, river basins, or water resources regions to effectively enforce its provisions and improve the water quality of water bodies. The law seeks to provide a decentralized management system for water quality protection and improvement of rivers. Likewise, the DENR is tasked to create a governing board for each WQMA, which is chaired by a regional director of the DENR’s Environmental Management Bureau (EMB). Its members include the mayor and governor of the concerned local government unit, and representatives of relevant national government agencies, duly registered nongovernment organizations, and business and water utility sectors. The governing board serves as a planning, monitoring, and coordinating body. It also reviews the WQMA action plan prepared by the EMB. Under the WQMA, the DENR and the stakeholders address the water quality problems, sources of pollution, and the beneficial use of the receiving water body. They also determine what control measures to institute to effectively achieve water quality objectives or improvements. There are at least seven other WQMAs earlier designated by the DENR. These are the Sinocalan-Dagupan river system in Pangasinan, the Marilao-MeycauayanObando river system and areas within the Laguna Lake Development Authority’s jurisdiction in Luzon, the Tigum-Aganan watershed and the Iloilo-Batiano river system in the Visayas, and the Silway River and the Sarangani Bay in Mindanao.

Landbank, LRA tie up for faster title verification By Donnabelle L. Gatdula (The Philippine Star) | Updated January 14, 2013 - 12:00am MANILA, Philippines - The Land Bank of the Philippines has signed an agreement with the Land Registration Authority (LRA) for the establishment of an extension office that would facilitate speedy verification of land titles. The extension office/kiosk will be located at the Landbank Plaza in Malate, Manila. Landbank is the first government financial institution and in the banking industry to establish an LRA extension office. Specifically, the agreement between the two government-run institutions would pave the way for Landbank’s direct link and access to the LRA’s automated title verification system. “This launch marks Landbank’s continuing commitment to provide excellent customer service to our clients, especially to our priority sectors,” Landbank president and CEO Gilda E. Pico said. Pico further said, “the establishment of this kiosk enables us to significantly streamline our processes on title verification and facilitate faster loan processing.” Under the agreement, Landbank shall receive, process and issue LRA-approved Certified True Copies of Title for its official and exclusive use, using the “anywhere-to-anywhere” (A2A) capability of the computerized LRA system. The project, Pico said, would help reduce Landbank’s title verification processing time from the average 15 working days to within 24 hours. Pico said a series of tests and trainings have been conducted by the LRA for Landbank to ensure the secure connection of the project to the Land Titling Computerization Project (LTCP) environment. The establishment of such extension office is also one of the LRA’s ways to de-clog its Registry of Deeds offices and provide services to clients beyond usual working hours.

Tomato fights mosquitoes By Dexter A. See | Posted on Jan. 14, 2013 at 12:02am | 520 views

LA TRINIDAD—Dr. Ben Ladilad, president of the Benguet State University, said five graduates of the school have developed an anti-mosquito remedy from tomato. He said their study “Lycopersicum Solanum Leaf Extract as an Alternative Mosquito Repellant”, would be a respite from expensive commercial products. “We are proud of the achievements of our graduates,” Ladilad told the Manila Standard, noting the work of Collins Joe Francisco, Alexandra Pelino, Joan Grace Pistola, Maria Lucille Payangdo and Raiza Pumahing. “The tomato extract is diluted to plain water,” he said. In actual tests, hands of volunteers were exposed to mosquitoes using a solution of 25 percent extract to 75 percent water with satisfactory results. Being a vegetable bowl with planters raising crucifers, root crops and other garden crops, the province is ideal for students doing research on food productivity and health. Ladilad also cited an Israeli study on tomatoes as food that could help to lower blood pressure as well. In his case, four tomatoes in his daily diet was suitable alongside a healthy lifestyle.‐fights‐mosquitoes/     

Interior design law signed By Macon Ramos-Araneta | Posted on Jan. 14, 2013 at 12:02am | 422 views

Senator Antonio Trillanes lauded Malacanang for approving the Interior Design Act of 2012, which he said will ensure the sector’s global competitiveness. “I thank President Benigno Aquino III for signing the amended interior design law,” he said. Trillanes, chairman of Senate Committee on Civil Service and Government Reorganization, said the measure “is necessary for us to introduce changes which would modernize the practice of interior design in the country to make it at par with the international standards and to enhance the competitive edge of the Filipino interior designers.” He said the law that was signed last Dec. 15 amended a 1998 measure. Under the new law, regulations on the registration, licensing and the practice of interior design will be updated by institutionalizing mandatory continuing professional education of interior design professionals. As provided, special permits of foreign interior designers will be issued without prejudice to Filipino practitioners. Trillanes said Filipino interior designers have attained international recognition and have been admitted in different international organizations. According to him, Malaysia patterned its licensing and regulatory laws on interior design from our laws.‐design‐law‐signed/ 

Rare PH frog species dying By Macon Ramos-Araneta | Posted on Jan. 14, 2013 at 12:01am | 1,053 views

At least 11 rare species of Philippine frogs were at risk of being wiped out because of rapid environment degradation and their extinction could affect the human food chain, a environment protection group said on Sunday. Miguel Zubiri, convenor of the Pilipinas Ecowarriors, said the frogs, which are found only in the Philippines, have been added to the Philippines’ list of threatened species. “These frogs have been tagged either vulnerable or endangered,” Zubiri said. Zubiri identified the frogs as Mindanao fanged frog, Mindoro tree frog, Hazel’s forest frog, Gigante Island limestone frog, Lawton’s forest frog, Negros forest tree frog, Polillo Island forest tree frog, Rabor’s forest frog, Negros limestone frog, Mt. Data cloud frog, and Taylor’s Igorot frog. Frogs play an important role in the food chain. They prey on insects, including mosquitoes and such pests as locusts that cause extensive damage to farm crops. Species are tagged “threatened” once their habitats have suffered extreme depletion and their populations have shrunk to dangerous levels. Threatened species become endangered and their survival become unlikely if their risk factors remained unchanged. Zubiri said that other than pollution, the invasion of foreign frog species carrying highly infectious amphibian fungus also contribute to the collapse of Philippine frogs, which are the most excellent indicators of ecological health.

“Since frogs breathe and drink through their skin, they are directly exposed to their surroundings, whether these are forests, mountain streams, fastflowing rivers, lakes and ponds,â€? he said. The fungus attacks the skin of frogs and destroys their ability to drink water and absorb vital salts, Zubiri said. The predators of frogs include humans, birds, monitor lizards, snakes, civet cats and other frogs. The Philippines keeps a registry of wildlife species of priority concern for protection and conservation, in compliance with existing international and national laws. The catalogue is updated regularly by the Protected Areas and Wildlife Bureau. With Gigi MuĂąoz-David Tweet

150 local bills enacted into law since 2010 By Christine F. Herrera | Posted on Jan. 14, 2013 at 12:01am | 215 views

President Aquino has signed into law in the past two years 150 local bills that created 42 new high schools, two elementary schools, five congressional districts, and five component cities, House of Representatives Speaker Feliciano Belmonte said on Sunday. He said local bills under the Aquino Administration focused on countryside development and not just on simply renaming streets and highways all over the country. “Focusing on human resource development, among others, is being true to our mandate as representatives of the people,” Belmonte said. The five congressional districts were created in Quezon City, North Cotabato, Bukidnon and Palawan. Quezon City now has six districts, three districts each for North Cotabato and Palawan, while Bukidnon, which used to be a lone district, now has two districts. The five component cities include Bacoor and Imus in Cavite, Cabuyao in Laguna, Mabalacat in Pampanga and Ilagan in Isabela. The new high schools were created in Iloilo, Sorsogon, Bulacan, Aurora in Davao Oriental, Mountain Province, Zamboanga del Sur, Batangas, Leyte, Zamboanga del Norte, Marikina, Nueva Vizcaya, Davao Oriental, Camiguin, Camarines Sur and Southern Leyte.‐local‐bills‐enacted‐into‐law‐since‐2010/             


Birth certificate errors By Rita Linda V. Jimeno | Posted on Jan. 14, 2013 at 12:01am | 583 views

A little over two months ago, a new law which should interest and benefit many Filipinos came into force. This new law, R.A. 10172, authorized the City and Municipal Civil Registrars and the National Statistics Office to correct and amend typographical and clerical errors in the birth day and birth month of a person and in the entry of his or her sex. This is in addition to an earlier law which allowed the amendment of first names or nicknames without going through the judicial process. To the lucky ones who never had a problem about their birth certificates, this law might sound insignificant. But to the millions of Filipinos who have had to contend with varying difficulties in getting passports; or applying for visas to enter other countries; or taking government qualifying examinations; or being accepted into college or a job because of errors in their certificates of live birth, this new law is manna from heaven. After all, when one had any kind of erroneous entry in his birth certificate which conflicted with his other personal documents such his school records, government identification cards and others, he would have had to spend a substantial amount of money to hire a lawyer and to get the court to order the National Statistics Office and the Local Civil Registrar to amend his birth certificate. And since the process used to be exclusively judicial, one had to spend time too testifying in court to prove that what he wanted changed were mere clerical errors. Why is it that only typographical or clerical errors in a person’s first names, day and month of birth date and sex are allowed to be administratively amended? Because a change in other entries such as surname, year of birth, citizenship

and names of parents could result in the change of a person’s identity, blood lineage and legitimacy. This could then affect one’s liability for crimes, if any, or his liability for any civil or administrative case. This could also affect his rights to succession or inheritance; or his status, that is, whether he is a legitimate or an illegitimate child. This was the rationale for the old requirement that any change at all in the entries of one’s birth certificate needed to be scrutinized and approved by the courts. And this is still the reason why—even if clerical errors may now be amended administratively―the law requires that convincing proof be shown to establish that the errors sought to be changed are mere clerical ones. Therefore, for amendments that pertain to surnames, year of birth, names of parents and their marital status, as well as citizenship, one still has to go to court and file a petition for correction of entries. Under this new law, if a person wants to change the entry as to his or her sex, say from male to female, he has to show that, at birth, he was indeed born as male. He must therefore present his medical record at birth and a certification from an accredited government physician that he did not undergo any sex change or sex transplant. Apart from this, he has to present early school records, his baptismal certificate, or any equivalent religious certificate, to confirm that he has always been known as a male. And, he must personally file his petition for change of entry as to his sex at the Local Civil Registrar of the place where he was born and where his birth record is registered. He must also submit clearances from the National Bureau of Investigation, the Philippine National Police and the courts that he has no pending criminal, civil or administrative cases. Another requirement is the publication of the petition to give those with negative information about the applicant a chance to come forward to oppose it. Basically the same documentary requirements need to be submitted when one seeks to amend one’s birth day or birth month with the exception of the medical certificate by a government physician that the applicant has not undergone a sex change or sex transplant.

When a person seeking amendments to his birth day or month only has transferred residence but still lives within the Philippines and it is impractical and expensive for him to file the petition in his place of birth, he may file his application in the Local Civil Registry of his place of residence. For those who now live in a foreign country, they may file their petition in the Philippine Consulate nearest their residence. *** Equal Dignity and Respect. Former Supreme Court Chief Justice Reynato S. Puno launched his book entitled Equal Dignity and Respect on Friday, January 11 at the UP College of Law. No less than Senator Edgardo Angara and Chief Justice Ma. Lourdes A. Sereno led the attendees composed of incumbent and retired justices of the Supreme Court, the Court of Appeals, Sandiganbayan, the Court of Tax Appeals and legal luminaries. In the words of its author, the book “marshals all the legal and philosophical arguments supporting the thesis that the equal protection right, emboldened by the social justice imperative of our Constitution, must be construed as a spade that genuinely levels the playing field.” The book will be discussed in the coming articles in this column with the hope that this writer will do justice to it.‐certificate‐errors/                 

Maybank buys more D&L shares By Jenniffer B. Austria | Posted on Jan. 14, 2013 at 12:01am | 352 views

Maybank ATR Kim Eng Capital Partners Inc. said it exercised in full its option to acquire additional P691 million worth of shares of listed D&L Industries Inc., as part of the company’s initial public offering. D&L said in a disclosure to the stock exchange Maybank, which was the lead underwriter for the IPO, purchased additional 160.714 million shares at the same offer price of P4.30 per share. “With the exercise, D&L Industries sold in its initial public offering a total of 1,232,143,000 common shares for total gross proceeds of approximately P5.3 billion,” the company said. The sale of the overallotment shares further increased in the company’s public float to 33.4 percent. Maybank ATR earlier reported D&L’s IPO was two-times oversubscribed here and abroad and the overallotment set aside by majority shareholder Jadel Holdings was likely to be exercised since D&L shares were trading above its IPO price. Share price of D&L on Friday closed at a new high of P4.98 per share or 16 percent above its IPO price of P4.30 on strong foreign buying. About 80 percent of the company’s revenues come from the food ingredients business and 18 percent from specialty plastics, with the bulk supplied to the automotive industry.

D&L Industries expects to post stronger sales as the robust economy boosts consumer spending this year. D&L executive vice president Alvin Lao said consumer spending was seen to rise given the strength of the local economy, the low interest environment and the confidence of both local and foreign investors. D&L is primarily engaged in product customization and specialization for the food, plastics, and chemical industries. The company’s principal business activities include manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.‐buys‐more‐dl‐shares/                           

Local bills seen to spur countryside development Published on 14 January 2013

House Speaker Feliciano Belmonte Jr. over the weekend claimed that local bills passed during the 15th Congress would spur countryside development with education dominating the list of legislations passed. “Focusing on human resource development, among others, is being true to our mandate as representatives of the people,” Belmonte said. Of the 150 local measures signed into law by President Benigno Aquino 3rd within the three-year period, of from July 2010 to December 2012, 39 mandates the establishment of new national high schools all over the country, two elementary schools, three integrated schools and a national technical-vocational high school. About 64 separate local statutes, meanwhile, facilitated the separation of schools from mother institutions to usher long-term economy, efficiency in administrative management and wider coverage. The second regular session, according to records of the Committee on Rules chaired by Rep. Neptali Gonzales 2nd, saw the birth of five new component cities—Bacoor City and Imus City, Cavite; Cabuyao, Laguna province; Mabalacat, Pampanga province; and Ilagan, Isabela province. During the third regular session, Cotabato province was reapportioned into three legislative districts, like that of Bukidnon province, which was reapportioned into four legislative districts.

The new high schools have either risen or are about to in municipalities in the provinces of Iloilo, Sorsogon, Bulacan, Aurora Davao Oriental, Mountain Province, Zamboanga del Sur, Batangas, Leyte, Zamboanga del Norte, Marikina City, Nueva Vizcaya, Davao Oriental, Camiguin, Camarines Sur and Southern Leyte. Local laws were also enacted converting the Land Transportation Office (LTO) extension offices—in The Island Garden City of Samal, Davao del Norte; in Dasmariñas City, Cavite; in Tubod Lanao del Norte; and in Quirino, Luna, Apayao province—into regular district offices of the LTO. Still awaiting the President’s signature are numerous other local and national measures that rhyme into the national government’s development programs.‐local‐bills‐seen‐to‐spur‐ countryside‐development                         

World Bank: 7.1% 3rd Quarter GDP rate could be wrong Published on 14 January 2013 Written by RIGOBERTO TIGLAO


The reported 7.1 percent Gross Domestic Product (GDP) growth rate the Aquino administration and its cheering squads have been euphoric over may in fact be an over-estimation, and the actual figure could be as low as 5.7 percent. This conclusion is based on the World Bank’s December 2012 “Philippine Economic Update”. After mentioning the 7.1 percent growth rate in the third quarter, the Bank qualified in its seemingly trivial but really significant footnote: “Growth in the third quarter must be tempered by the fact that statistical discrepancy explains 1.4 ppt of the 7.1 percent growth. This suggests that either third quarter growth will be revised downwards or fourth quarter growth will be lower by around two percentage points as statistical discrepancy is zeroed out in the full year growth statistic.” “Ppt” means percentage points, which means that if the 1.4 percentage points is deducted form the 7.1 percent growth figure, the country’s GDP growth rate in the third quarter would be at a lower 5.7 percent. The “statistical discrepancy” refers to the differences between the results of the two approaches to measuring the GDP: either as expenditures or as incomes. While these two measures theoretically should amount to the same figure, it often doesn’t, due to either misreporting or delays in data submission. However, these discrepancies are reported only for GDP estimates for each quarter, with the full year GDP corrected for such discrepancies.

This is the first time that the World Bank in its regular quarterly updates on the Philippine economy drew attention to the magnitude of the “statistical discrepancy”, and to emphasize that a GDP figure should be “tempered.” In fact in past quarters, quarterly GDP figures were adjusted mostly upwards and only by less than 1 percentage point. For instance, the second quarter GDP rate was reported at 5.9 percent when it was announced in August. This has been revised to 6 percent. (However, the first quarter growth rate was reported in May at 6.4 percent; this has been revised though to 6.3 percent.) That a 5.7 percent growth figure could be more accurate is bolstered by the fact that this would be more in line with the first and second quarter growth rates of 6.3 percent and 6 percent, respectively. Historically, the GDP growth rate for the third quarter is the lowest among the four quarters, as this is the ‘pause’ period for the year, before and after the heightened Christmas production and spending. Whether an unintentional overestimation of the GDP’s third quarter growth rate or not, the “7.1 percent” GDP growth rate has been the administration’s most recent powerful propaganda tool, with the figure repeated again and again as a cheering chant to claim that 2012—despite lackluster exports, declining foreign investments, and typhoons that severely hit agriculture—was, as one newspaper put it, “one of the best years ever” for the country. However, either at 5.7 percent or 7.1 percent, these merely mask the fact that such levels were due to the very low 3.2 percent rate in the third quarter of 2011. This is the so-called low-base effect: a higher rate of growth will be computed if the starting level is low. Despite the World Bank’s caution on the third quarter GDP rate however, it remained modestly bullish on the Philippines, with its estimate of a 6 percent growth rate 2012 roughly similar to the “6 to

7 percent” forecast of Economic Planning Secretary Arsenio Balisacan. This indeed is a major improvement from the 3.9 percent in 2011, despite, as in the case of the third quarter, of the low-base effect. At a 6-percent growth rate though, the government though wouldn’t be able to use its shrill propaganda line that the Philippines is the fastest growing economy in South East Asia—Cambodia and Indonesia are (see table).‐stories/39317‐world‐bank‐7‐1‐3rd‐quarter‐ gdp‐rate‐could‐be‐wrong                                 

Basic education crucial to employment quality Published on 14 January 2013 Written by MAYVELIN U. CARABALLO REPORTER

Intensified investments in basic education are crucial in developing the capacities young Filipino workers, the National Economic and Development Authority (NEDA) said over the weekend. In a statement, NEDA Deputy Director General Emmanuel Esguerra noted an important aspect of the government’s inclusive growth platform is investing in human capital, particularly in the young population that comprise about half of the country’s workforce. “Investing in human capital, especially the youth that comprise a significant proportion of the Philippine population, is a major item in the government’s inclusive growth agenda,” the NEDA official stated. As outlined in the Philippine Development Plan: 2011-2016, inclusive growth refers to the rapid and sustained socioeconomic development that contributes to employment generation and poverty reduction. NEDA explained that inclusive growth can only be achieved through massive investments in infrastructure and human capital, as well as putting in place measures that support good governance. Also, the agency cited the October 2012 round of the Labor Force Survey (LFS) of the National Statistics Office, which showed that almost half, or 48 percent of Filipinos, willing to work are aged 15 to 34 years old. It added that similarly, this segment of the population comprised 46 percent of Filipinos who are employed during the period.

Esguerra also admitted that the lack of workers with appropriate skills set is a major challenge, adding that the challenge is evident in industries that are knowledge-intensive and require a high degree of functional flexibility. “That is why the most important skill is being good at learning, and that is what investment in quality basic education is for,” he further said. The NEDA official mentioned that measures are being implemented to help enhance the competitiveness of workers and industries. For instance, he cited the rollout of the K to 12 Basic Education Program of the Department of Education that aims to produce holistically developed learners with 21st century skills who are prepared for higher education, middle-level skills development, and immediate employment or entrepreneurship. “This will signal to potential employers that the quality of Philippine labor is and will remain competitive and employable,” Esguerra added. Meanwhile, in a report released over the weekend, the National Statistical Coordination Board (NSCB) said that basic education is also an issue on why there are a huge number of unemployed college graduates. It cited results from the Labor Force Survey (LFS) which shows that despite the attainment of a college diploma, college graduates comprised at least 18 percent of the total unemployed, the third highest share in terms of educational attainment from 2006 to 2011. The NSCB noted that most of the unemployed college graduates are those who earned degrees on medical courses, trade, craft and industrial programs, engineering and architectural programs.

Top three vacancies On the other hand, the statistical board also cited the data gathered by the Bureau of Labor Employment Statistics (BLES) from their BLES Integrated Survey (BITS), which suggest that the top three hard to fill vacancies among professionals for the period January, 2009 to June, 2010 include accountants and auditors; electronics and communications engineers; and systems analysts and designers. “It may be observed that these top three hard to fill vacancies require specific technical requirements and most of which necessitates the passing of an eligibility exam,” it stated. Furthermore, the BLES survey also showed that the top three reasons why vacancies are hard to fill were the applicants lack needed competency/skill; applicants expect a high salary; and applicants lack years of experience. NSCB said that a factor that clearly affects employability of college graduates is the quality of instruction they received, adding that the rather low rates in passing rates for professional licensure examinations across the years is a cause for concern. The statistical board added that undoubtedly, the quality of learning in higher education has its roots in basic education. “After all, how can college students absorb what they are taught in college if they did not learn enough in basic education?” it remarked. NSCB further said that the quality of basic education is partly an issue of resources, citing the teacher-pupil ratio for primary education which has been relatively high compared to the corresponding ratio of neighboring countries, ranging from 31 to 35 pupils per teacher in 2006 to 2010. To address this problem, the statistical board mentioned that the Education department has been provided authority by the

Department of Budget and Management to hire an extra 61,000 teachers this year to be distributed among the public schools in the country. It also said that over the past decade, the Philippines have had only about 70,000 graduates of teacher education on the average per year, and about a fourth to a third pass the licensure for teachers, which means barely 18,000 to 23,000 on the average per year. NSCB stated that it is important to note that while the percentage of faculty members in higher education with post graduate education has been increasing from 2001 to 2011, the rate of improvement has been at a slow pace. “These may have implications on the quality of learning students will get, and in having students become prepared for the jobs they will be getting when they leave school,” it added.‐business‐news/39288‐basic‐education‐ crucial‐to‐employment‐quality                       

Global sentiments to influence PH stocks Published on 14 January 2013 Written by MADELAINE B. MIRAFLOR REPORTER

While coming off a record-breaking week, Philippine stocks might prove to be not immune toward global sentiments this week after it performed relatively flat in the last two days sessions of the previous week. Freya Natividad, analyst at online brokerage, said that the market may take more cues on the trends at the economic front and other global markets, like US and China. “Sequel monetary policy moves from industrialized markets’ central bank will be focused this week, particularly the European Central Bank’s [ECB] decision to hold interest rates at 0.75 percent,” Natividad said. She added that investors might also pay attention to economic numbers in the US, specifically on inflation and progress within their respective jobs market. “Within Asia, China will grab bulk of the headline, specifically on the nation’s ability to recover from consumer demand slowdown the previous year,” she noted. Jun Calaycay of Accord Capital Equities Corp. also said that the US will be at the market’s crosshairs, easing out Europe at least over the next couple of weeks. “After having ‘survived’ a close call over automatic tax increases over the New Year, attention shifts to the debt ceiling and spending cut debates, potentially yet another cause of shifting sentiments,” he explained. Natividad, on the other hand, cited another activity that may occur within this week’s trading. “As optimists and pessimists gather in deciding whether the local market would trounce past the 6,100 barrier, market players might check how long periods of ‘stabilization’ will be maintained, especially with the new-found momentum supporting the market [+42 percent week-on-week at P8.2 billion average],” she said. Natividad specified that intra-week occasion of declines, or periods of “pauses,” might be used to reposition excess cash, with equities seen to enjoy a larger weight in their respective portfolio basket. “For now, range-trading might be felt following the PSEi’s [Philippine Stock

Exchange] uptrend since December last year. Start selecting stocks that have lagged versus market counterparts, especially those that would benefit most from improved fiscal and corporate spending focus this year,” she added. For this week, immediate support is 6,000, resistance at 6,100 to 6,150. Last week, PSEi performed well by rising 80 points at 6,051 (+1.34 percent week-on-week), while participation reached P8.302 billion (+42.43 percent) on average, with gainers-losers at 94-79. Net foreign buying was P388 million.‐business‐news/39289‐global‐sentiments‐ to‐influence‐ph‐stocks                                     

Posted on January 13, 2013 11:12:29 PM

Growth potential improving THE COUNTRY’S growth potentials have improved given an expansion of productive capacity and better inflation expectations, a Bangko Sentral ng Pilipinas (BSP) official said.   “We have seen preliminary indications to suggest that the potential growth of the economy seems to be strengthening,” central bank Assistant Governor Cyd N. Tuaño-Amador said in an interview. She explained that investment, particularly from the private sector, drove growth in the past few quarters, and that full-time employment had also received a boost. “They are modest steps, baby steps, but the potential growth of the economy is slowly changing, slowly rising from the old path of 4.755%,” she claimed. Gross domestic product (GDP) -- the broadest measure of the economy -- grew by a better-than-expected 7.1% in the third quarter with an expansion seen across agriculture, industry and services. This took the nine-month gain to 6.5%, exceeding the full-year target of 56%. Consumer prices, meanwhile, have remained low and stable despite the rapid growth. Inflation averaged 3.2% last year, the slowest since 2007’s 2.9%. It likewise marked the fourth straight year that the BSP was able to keep inflation within its 3-5% target. “There seems to be favorable structural dynamics at work that have already changed the inflation mindset of those who set prices, such as firms and employers,” Ms. Amador said.

The central bank, she claimed, has shown that it is a “credible inflation fighter.” “The price-setters know the BSP can fine-tune policy settings so that, while from time to time the economy will be visited by some shocks, they know the central bank will have the appropriate responses.” University of the Philippines economist Benjamin E. Diokno, meanwhile, has a slightly different view “High inflation is associated with high growth if the economy is operating at or near full capacity,” the former Budget secretary said. “The economy managed to grow at above its long-run growth without triggering high inflation because the economy has excess capacity -excessive idle plant capacity and high unemployment and underemployment,” he added. Inflation is expected to ease further in 2013, settling at 3.1% -- down from the BSP’s earlier forecast of 3.9%. -- D. C. J. Jiao‐potential‐ improving&id=64224                   

Posted on January 13, 2013 08:12:20 PM

Peso may pare gains on firms’ dollar demand AFTER surging against the dollar last week, the peso may pare gains as companies purchase greenbacks to settle their midmonth offshore obligations, analysts said. The local unit surged by 30 centavos to finish at P40.61 to the dollar -a 58-month high -- against its P40.91-per-dollar close the week before. So far, last Friday’s close was the local currency’s strongest for the year. It was last seen this strong on March 7, 2008 when it finished at P40.85 per dollar. “We expect the peso to pull back against the dollar this week as we see strong demand for the dollars as corporates settle their mid-month obligations,” a trader said in a phone interview last Friday. However, in a separate phone interview, another trader disagreed, saying “The peso could still be supported by investors’ appetite for risky assets, including local stocks and the peso.” Both traders did agreed it would be a “quiet trading week” this week with no major economic data expected at home and abroad. “Dealers will continue to be watchful of external developments, particularly news from the US and the euro zone,” the first trader said. The peso is seen trading within the P41.40- to P41.80-per-dollar band this week. -- Ann Rozainne R. Gregorio‐may‐pare‐gains‐on‐ firms%E2%80%99‐dollar‐demand&id=64189 

Posted on January 13, 2013 10:07:59 PM

DA allots another P300-M for typhoon-hit farmers THE DEPARTMENT of Agriculture (DA) will allot another P300 million for farmers affected by Typhoon Pablo, bringing the total financial aid from the agency to around P500 million, an official said.   “[Agriculture] Secretary [Proceso J.] Alcala asked us to use part of the 2013 Quick Response Fund, a total of P500 million per year, for farmers affected by [Typhoon] Pablo,” National Rice Program Coordinator and Task Force Alayon Head Dante S. Delima said in a telephone interview yesterday. The Task Force will meet this Tuesday to discuss how much assistance will be needed. Mr. Delima said he estimates the additional aid to be around P300 million. The said financial assistance will be used to buy farm inputs, tools, fertilizers and relief goods, among others. He said the department will then ask the national government to replenish its Quick Response Fund to ensure that it will still have enough available funds for farmers that might be hit by typhoons this year. “The additional amount will enable us to help typhoon-hit-farmers by assisting them in the immediate rehabilitation of their farms,” Mr. Delima said.

He said the task force is also providing free petroleum products for farm machines like tractors to hasten land preparation for new cropping. He added that the task force will also provide farmers with relief goods for five months while they are waiting for their harvests. Task Force Alayon (which is a Moro word for “cooperation�) is a team organized by the department to implement the various interventions for farmers hit by Typhoon Pablo. According to DA data, the total amount used for various interventions has already reached P235 million. The department has set aside P57.89 million for rice farms, while corn farms received P57.89 million. Typhoon-affected farms growing high value crops received P48.49 million, while livestock farmers received P29.76 million in financial aid. The different attached agencies of the DA have allocated P75.17 million for irrigation, P1 million for the fiber industry, P8.86 million for coconut farmers, P3.5 million for fisheries, and P139,650 for the plant industry. The cost of damage caused by Typhoon Pablo is P30.53 billion with banana farms incurring the highest cost amounting to around P19.82 billion, department data showed. Damage to cavendish banana farms is P9.71 billion while lakatan and cardaba (locally known as saba) banana farms incurred P2.1 billion and P8 billion respectively. Damage to coconut farms amounted to P7.22 billion, while rice farms incurred damage costs reaching P197 million. Corn farms suffered P362 million and damages, while farms growing high value crops like coffee, cacao, vegetables, rubber and fruit trees) had a total damage valued at P2 million.

Abaca plantations incurred P233,000 worth of damage, while livestock and poultry raisers incurred P327,000. Agricultural facilities were also damaged by Typhoon Pablo. Fisheries infrastructures that were damaged were valued at P53.49 million. Irrigation facilities that were destroyed and damaged were valued at P829 million. Typhoon Pablo (international name Bopha) made its landfall in Davao Oriental on Dec. 3, 2012. It then moved towards Palawan and then towards South China Sea. The storm turned towards Northern Luzon after it was blocked by a high pressure area on Dec. 9 before it finally dissipated on Dec. 10. -Raymond Jun R. Portillo‐allots‐another‐P300‐ M‐for‐typhoon‐hit‐farmers&id=64208                       

Posted on January 13, 2013 10:05:16 PM

Young workers are keys to growth -- NEDA  

DEVELOPING the capacity of the youth sector is crucial in achieving sustainable and inclusive growth, the National Economic and Development Authority (NEDA) said in a statement yesterday.   “Investing in human capital, especially the youth that comprise a significant proportion of the Philippine population, is a major item in the government’s inclusive growth agenda,” NEDA Deputy DirectorGeneral Emmanuel F. Esguerra was quoted as saying during a World Bank-sponsored event for the youth. According to NEDA, inclusive growth can be achieved through realizing improvements in the country’s infrastructure and human capital development. This can be further achieved through good governance, the statement read. NEDA said that according to the Labor Force Survey released last October, 35-year-olds comprise almost half of Filipinos who are willing to join the workforce. The group also comprises 46% of employed Filipinos during the same period, it said. However, the need for workers with more “appropriate skills” has been blocking the country from attaining its full potential, Mr. Esguerra said. This “challenge” is more apparent in “knowledge-intensive” industries, he added. -- Richard Jacob N. Dy‐workers‐are‐keys‐ to‐growth‐‐‐‐NEDA&id=64207   

Metrobank: GDP to reach 6%, peso to hit P39 per dollar in ’13 • •

Written by Ed Velasco

Monday, 14 January 2013 00:00

The Philippine economy will grow by at least six percent this 2013 while inflation will be around 3.6 percent and the peso will continue to strengthen against the dollar to P39.40 by the second quarter. These are the fearless forecasts of Metrobank, the second biggest bank in terms of assets. According to the bank, the country posted a stellar third quarter growth of 7.1 percent, the fastest growth in the Asean region. Metrobank said the six percent growth can be achieved through the help of solid consumption spending, higher government spending and favorable outlook for the real estate and tourism sub-sectors. “Growth (for 2012) was driven by solid consumption spending, increased government spending, revitalized industry sector and significant improvement in external trade. Average GDP growth for the first three quarters of the year is at 6.5 percent,” the bank said. In the interest rates arena, the bank said the rates will remain subdued on rosy economic prospects, high market liquidity, expectations of credit rating upgrade and manageable inflation. “At the last meeting for 2012, the Monetary Board decided to keep policy rates steady at 3.5 percent (for borrowing rate) and 5.5 (for lending rate) after slashing rates by a cumulative total of 100 basis points since the start of the year. The MB said that the “benign inflation outlook and robust domestic growth provide adequate room to keep policy rates unchanged.” If Metrobank sees bright prospects for gross domestic product (GDP), inflation and local currency, it sees differently how the crisis in Europe will continue to dampen other countries, including the Philippines. The spillover effects of the dragging saga of the Eurozone crisis are expected to persist this year as current policy stances continue to fall short of what is needed to prevent further weakening of economies, the bank said.

“The forecasts and outlook of Metrobank research are based on present conditions and trends. These are revisited regularly and reports are released regularly as well,” a source at the Metrobank research team told The Daily Tribune. Metrobank used to be the biggest bank in the Philippines in terms of assets at over P700 billion until it was overtaken by Banco de Oro in late 2008.‐metrobank‐gdp‐to‐reach‐6‐peso‐to‐ hit‐p39‐per‐dollar‐in‐%E2%80%9913                                   

DTI to launch machines, equipment for coffee industry area in CAR • •

Written by Aileen Lor

Monday, 14 January 2013 00:00

The Department of Trade and Industry (DTI) will launch a Shared Services Facility (SSF) for the coffee industry cluster in the area of Cordillera Administrative Region (CAR). This was scheduled after some screening proposals and the conduct of public bidding supply. “After screening proposals and conducting public bidding for the supply of SSF last year, we are finally launching the coffee machines and equipment for the coffee industry in the CAR,” DTI Undersecretary for regional operations and development Merly Cruz said. The launch will be Jan. 16 in Tabuk City, Kalinga. Meanwhile, with a simultaneous launching in Apayao, Benguet, Ifugao and Mountain Province, the event will be attended by local government officials of the five proponent provinces in the region; co-operators, coffee growers, processors, micro, small and medium enterprises (MSMEs) and some stakeholders. SSFs are believed to provide the “big push” for MSMEs as the former will give the latter an opportunity to be more competitive to local and global markets. “The coffee industry’s access to SSF will be complemented by other strategies of the DTI for the ‘big push’ for MSMEs,” the official said. “These strategies are industry clustering, product development, market promotion, credit and financing, and microenterprise development assistance and support,” Cruz said. She said such strategies support President Aquino’s social contract, particularly in bringing about conditions conducive to the sustained growth of the business sector, mainly in the countryside,” Cruz added. The coffee industry in the CAR is one of the 24 pilot industry clusters in the country identified through the National Industry Cluster Capacity Enhancement Project (NICCEP). The project aims to help increase the contribution of selected priority industry

clusters to the Philippine economy. It is a three-year project that is funded by the Japan International Cooperation Agency which is in cooperation with the DTI to help develop and mobilize pilot industry clusters nationwide. Along with the launching is the conduct of regional MSME caravan that “is intended for the MSMEs of the coffee industry clusters, especially the proponents of the National Export Development and Competitiveness (Nedac) funded SSF,” Cruz said. Nedac funds were intended for SME assistance and promotion. It was initially sourced from the Office of the President amounting to P100 million. Out of this amount, P60 million was included in the DTI’s 2012 budget for SSFs. Approved total budget for SSFs as of 2013, amounted to P700 million.‐dti‐to‐launch‐machines‐equipment‐ for‐coffee‐industry‐area‐in‐car                         

2013 01 14 - QUEDANCOR Daily News Monitor  

News monitor for 2013 01 14

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