IMF Lauds Philippine Economic Policies

The International Monetary Fund (IMF) praised the Philippines for sound monetary and fiscal policies, while saying the central bank could let the peso rise further if needed in response to capital inflows.

"Prudent policies…have underpinned a strong recovery and supported confidence," the IMF said in its annual Article IV report on the Philippines, released Tuesday in Asia.

"The outlook for the near term is broadly favorable, but subject to significant external risks," the lender said. "In this context, the key policy challenge is to safeguard macroeconomic stability while building the foundations for stronger and more inclusive growth over the medium term."

The National Statistics Office (NSO) said Tuesday that inflation decelerated to a 29-month low in February, as price increases in food, beverages and most other commodities moderated,

The consumer-price index, the country's main inflation barometer, rose 2.7% in February from a year earlier, its slowest pace since September 2009, when inflation stood at 2.2%. Annual inflation in January was revised up to 4.0% from the initial estimate of 3.9%, and was 4.7% in February last year.

The central bank projected inflation in February settling within the 2.7%-3.6% range, while the median forecast of 10 economists polled by Dow Jones Newswires tipped the annual increase in the CPI at 3.3%.

Despite the easing inflation, economists doubt the Bangko Sentral ng Pilipinas (BSP) will lower policy rates further, given the two 0.25 percentage point rate cuts it has implemented this year and the three-percentage-point reduction in banks' reserve requirement effective next month.

"This supports our assessment that inflation is manageable. Over the policy horizon, we expect inflation to be below the midpoint of our target range [for the year] of 3%-5%," said Bangko Sentral ng Pilipinas Gov. Amando Tetangco in a statement.

Economists expect the central bank to leave overnight rates at the current levels for the rest of the year, unless the global economy slows further.

"Besides the influence of base effects, inflation is expected to remain nonthreatening for the year barring a sharp upswing in global crude prices," said Forecast Singapore Economist Radhika Rao. She noted that because of subdued demand-pull cost pressures and the policy scope available to the central bank, any unexpected spurt in retail fuel prices could be mitigated by temporary administrative measures.

"We expect the BSP to leave rates unchanged for the year, after last week's cut," Ms. Rao said.

Philippine monetary policy is "appropriately supportive" of the economy, the IMF said in its report, with inflation "firmly in the middle of the target range," while fiscal policy is "appropriately focused" on supporting growth in the near term while curbing the budget deficit over the medium term.

The lender expressed support for the Philippine central bank's policy of "allowing orderly adjustments of the exchange rate to market pressures." It said, however, that the bank has "scope for further flexibility of the exchange rate in response to sustained inflows" and could draw down its ample foreign reserves, suggesting Manila could intervene less to curb rises in the peso when investors pile into Philippine assets.

The IMF said the report was based on discussions with the Philippines that ended Dec. 13.

By WILLIAM MALLARD And CRIS LARANO - Write to William Mallard at william.mallard@dowjones.com

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China grabbing "Reed Bank" 50 Miles off Palawan Philippines

Colliding China and the Philippines in West Philippines Sea (South China Sea) over oil surveys

The looming conflict in the Philippines waters as china's aggression and assertiveness in invading neighboring territory flared over the oil race in the sea. The conflict begun last year 2011 when Lieutenant-General Juancho Sabban received an urgent phone call from an oil company saying two Chinese vessels were threatening to ram its survey ship, the Philippine commander's message was clear: "Don't move, we'll come to the rescue."

Within hours, a Philippine surveillance plane, patrol ships and light attack aircraft arrived in the area of Reed Bank in the West Philippines Sea (South China Sea). By then the Chinese boats had left after chasing away the survey ship, Veritas Voyager, hired by UK-based Forum Energy.

But the tension had become so bigger; Forum Energy chief Ray Apostol wanted to halt two months of work in the area.

"They were so close to finishing their work. I told them to stay and finish the job," Sabban, who heads the Western Command of the Philippine Armed Forces, said at his headquarters in Puerto Princesa on Palawan Island, the main Island of the Province of Palawan that administer the Spratlys Archipelago.

Reed Bank or Recto Bank is an undersea territory of the Philippines located 50 miles or 80 Kilometers from the province of Palawan believed to rich in oil and natural gas deposits

Over the next few days, Philippines President Benigno Aquino III would call an emergency cabinet meeting, file a formal protest with China, and send his defense secretary and armed forces chief to the Western Command in a show of strength.

The March 2011 incident is considered a turning point for the Aquino administration. The president hardened his stance on sovereignty rights, sought closer ties with Washington and has quickened efforts to modernize its military capability by spending billions.

A year later, Forum Energy is planning to return. Top company executives said the company intended to sail to Reed Bank within months to drill the area's first well for oil and natural gas in decades, an event that could spark a military crisis for Aquino if China responded more aggressively.

The US military has also signaled its return to the area, with war games scheduled this month with the Philippine navy near Reed Bank, Palawan Province of the Philippines that China is bound to view as provocative.

"This will be a litmus test of where China stands on the South China Sea issue," said Ian Storey, a fellow at the Singapore Institute of Southeast Asian Studies. "They could adopt the same tactics as they did last year and harass the drilling vessels, or they might even take a stronger line against them and send in warships."

A decades-old territorial squabble over the South China Sea is entering a new and more contentious chapter, as claimant nations search deeper into disputed waters for energy supplies while building up their navies and military alliances with other nations, particularly with the US.

Reed Bank, Palawan Province is claimed by China in which is under the province of Palawan Philippines, it's just one of several possible flashpoints in the West Philippines Sea (South China Sea) that could force Washington to intervene in defense of its Southeast Asian allies.

US President Barack Obama has sought to reassure regional allies that Washington would serve as a counterbalance to a newly assertive China, part of his campaign to "pivot" US foreign policy more intensely on Asia after a decade of war in Iraq and Afghanistan.

Obama brought up the South China Sea at an Asia-Pacific summit in Bali in November. He had a surprise one-on-one with Chinese Premier Wen Jiabao on the subject, although Beijing had insisted the issue should not be on the agenda at all.

"As Southeast Asian countries run to the US for assistance, Beijing increasingly fears America aims to encircle China militarily and diplomatically," said Stephanie Kleine-Ahlbrandt, Northeast Asia director for the International Crisis Group.

"Underlying all of these concerns is the potential that discoveries of oil and natural gas beneath the disputed sections of the West Philippines Sea (South China Sea) could fuel conflict."

The area is thought to hold vast untapped reserves of oil and natural gas that could potentially place China, the Philippines, Vietnam and other claimant nations alongside the likes of Saudi Arabia, Russia and Qatar.

Manila is beefing up its tiny and outdated naval fleet and military bases, adding at least two Hamilton-class cutters this year and earmarking millions of dollars to expand its Ulugan Bay naval base in Palawan.

It's no match for China's fleet, the largest in Asia, which boasts 62 submarines, 13 destroyers and 65 frigates, according to the International Institute for Strategic Studies.

China last month launched the fourth of its new 071 amphibious landing ships that are designed to quickly insert troops to trouble spots, for example, disputed islands.

The US Navy has announced it will deploy its new amphibious assault vessels, the Littoral Combat Ships, to the "maritime crossroads" of the Asia-Pacific theatre, stationing them in Singapore and perhaps the Philippines.

Washington's renewed presence in the Philippines – a former US colony that voted to remove US naval and air bases 20 years ago – follows the US announcement last year of plans to set up a Marine base in northern Australia and possibly station warships in Singapore.

Manila is talking about giving Washington more access to its ports and airfields to re-fuel and service US warships and planes. The two countries will conduct war games off Palawan Island in late March – focusing on how to deal with a take-over of an oil rig in the West Philippines Sea (South China Sea).

China has warned oil companies not to explore in the disputed South China Sea, over which Beijing says it has "indisputable sovereignty". Chinese ships have repeatedly harassed vessels that have tried.

After ExxonMobil discovered hydrocarbons off the coast of Danang in central Vietnam, an area also claimed by China, one of China's most popular newspapers warned in October nations involved in territorial disputes should "mentally prepare for the sounds of cannons" if they remain at loggerheads with Beijing.

Despite the threats, the Philippines and Vietnam have continued to explore for oil and natural gas further offshore in the West Philippines and  South China waters, driven by persistently high oil prices and more advanced deepsea technology.

The Philippines had reported as many as 12 incidents of Chinese vessels intruding into its sovereign waters in the past year, an unusually high number, Sabban said.

In one of the most serious incidents last October, a Philippine navy ship seized Chinese fishing boats after colliding with one of them, prompting protests from China for their return. At least 12 Chinese fishermen have been arrested over the past year. Half of them remain in detention in Palawan.

"China has no right to tell us we should first ask for permission from them to explore the area," Sabban said. "We have explored that area back in the 1970s, so why can't we explore it now? We knew there was a substantial deposit of natural gas even before all of these things started."

Manila said Reed Bank, about 80 Kilometers or 50 nautical miles west of Palawan Island at the southwestern end of the Philippine archipelago, was within the country's 200-nautical-mile exclusive economic zone.

But Beijing believed it was part of the Spratlys, a group of 250 uninhabitable islets spread over 265 542km2, claimed entirely by China, Taiwan and Vietnam, and in part by Malaysia, Brunei and the Philippines.

While China prefers to solve the disputes one on one with its smaller Southeast Asian neighbor, Washington has sought to internationalize the issue, given half the world's merchant fleet tonnage sails across the sea and around these islets each year, carrying $5 trillion (R37.35 trillion) worth of trade.

"If we don't develop our positions in our exclusive economic zone, then we will only be giving it away and will be at the losing end," Saban said. – Reuters 

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BCDA Funds Boost Philippines AFP Capability with recent upgrades

6 APC M113

CAMP GENERAL EMILIO AGUINALDO, Quezon City – The Armed Forces of the Philippines (AFP) was able to complete a total of 43 modernization and capability upgrade projects amounting to ₱4.7 Billion which was rooted out from the AFP's shares and proceeds remitted by the Bases Conversion and Development Authority (BCDA).

Out of the 43 completed projects, 19 were already delivered to the AFP and are now being used in the performance of our troops' duties.

Among the delivered for the Philippine Army (PA) were the following:

• 1,621 Night Fighting System and
• 6 APC M113
• 402 Squad Automatic Weapon for the three Major Services and 8,100 Force Protection Equipment for Philippine Army (PA) and Philippines Navy ( PN).

For the Philippine Air Force (PAF):

• 18 Basic Trainer Aircraft and one Aerial Camera

For the Philippine Navy (PN)

• 2 Multi-purpose Attack Craft,
• 4 Landing Craft Utility and 76mm Ammunition;

Multi-Purpose attack craft

For the General Headquarters:

• 1 Integrated Radio Tracking System,
• Base Communication Network Project,
• Mobile Communication Network and Special Operations Communication Equipment,
• Improvement of four AFP Medical Center Operating Rooms and Busbus Station Hospital

For the Public Affairs:

• 62 units of Audio-Visual System.

And for the last tranche of remittance for 2011, the BCDA turned over recently ₱2.64 Billion to the national government as proceeds from the disposition of former military bases. As one of the long-term major beneficiaries, the AFP got the largest share of ₱2.37 Billion. This will add-up to the total previous remittances by BCDA amounting to ₱12.7 Billion which paved way for the obligation of the military's modernization projects.

The military is truly grateful for this particular milestone by the BCDA. The amount generated will be exhausted in observance of the budget execution guidelines by the military in other outlined and obligated projects. This will further equip the AFP in the necessary requirements of its capability upgrade and modernization projects which does not only benefit the men and women in uniform, but ultimately the whole Filipino nation as well.

Shares of the military will augment its BCDA funds to be consumed in the purchasing of obligated projects which fall under the AFP Modernization Program. Acquisition of several military equipment and the improvement of other military facilities across the country have been some of the major undertakings of which BCDA shares becomes a major contribution.

Aside from the shares received in the disposition of mentioned lots, the military also received share from non-sale transactions in forms of leases from several corporations.

Transactions of BCDA in which the military had its shares include the sales of Fort Bonifacio, DOE/JUSMAG property in Quezon City, expanded Big Delta lot, and Camp Bagong Bantay.

The disposition of former military camps such as the current Bonifacio Global City and Newport City brought about the turnover of the said amount to the national government. Said camps used to be the biggest military bases formerly known as Fort Bonifacio and Villamor Air Base.

The turned over amount is seen by BCDA President and CEO Arnel Casanova as very opportune for the government agencies that benefitted from their earnings to consume their respective share through the advancement of their projects.

"We, at the BCDA believe that it is only fitting to compensate our soldiers' hardship and sacrifices by contributing to the advancement of their capabilities and equipment so that they will be able to fulfill their mandate more efficiently and effectively. We sincerely appreciate the honorable service of our hardworking soldiers especially those who are in the frontlines bravely risking their own lives to make sure that our citizens are able to live a safe and peaceful life," Casanova said.

"We are truly inspired and grateful for the achievement of BCDA as their recent milestone provided more opportunities for the government in the realization of existing programs. The military will compensate the recent juncture with our sustained efforts in delivering better public service to the country and further boosting our external capabilities to uphold our sovereignty and integrity of our national territory," AFP Chief of Staff, LtGen Jessie D. Dellosa said.

Source: Armed Forces of the Philippines (AFP)

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PH Football Azkals Sorry Ramos for Sexual Harassment Scandal

By Olmin Leyba (The Philippine Star)

MANILA, Philippines - Azkals team manager Dan Palami has apologized to Cristy Ramos, the match commissioner of the recent Phl XI-Malaysia showdown at Rizal Memorial who was offended by some of the Azkals' behavior during her pre-game inspection at the team's dugout.

"On behalf of the team, I sincerely apologize to Commissioner Ramos for the distress this situation has caused her," Palami said in his official statement, assuring Ramos of prompt action on the matter.

Two Azkals, Angel Guirado and Lexton Moy, are under fire for their banter before the Malaysia gig that Ramos perceived as "sexual harassment and disrespect." She filed a complaint with the Asian Football Confederation (AFC) and met with Palami and officials of the Philippine Football Federation (PFF) last Friday, the same day the Azkals left for Nepal for the final stretch of preparations for the AFC Challenge Cup.

"Since the players have already left the country for the AFC tournament, a dialogue between them and commissioner Ramos is not possible at the moment. Nonetheless, we will not put off the investigation even as we prepare for a major tournament," said Palami, who postponed his flight to Nepal to discuss the incident report with Ramos right away.

"I will sit down with my players and staff and get to the bottom of this," he added.

 Ramos took offense with Guirado being in his undies during the inspection, which is supposedly not an unfamiliar sight at dugouts during pre-games, and Moy's alleged statement on bra size that the Azkals claimed were not directed at Ramos at all. Palami expressed belief there was "no intention to disrespect" Ramos or any official.

"In my personal experience of the usual goings-on in the men's locker room, the tension, excitement and nervous energy before a match often result in a lot of boisterous bantering. For someone who walks into this situation, this might appear as bordering on disrespect.

"But again, I am speaking only from my personal experience. I was not witness to the particular incident which was the subject of the incident report. Until I hear from all sides, I cannot comment substantially on the matter," Palami said.

He stressed that management and the PFF is taking the alleged incident seriously. The PFF is conducting a parallel investigation while awaiting further instructions from the AFC.

"Like commissioner Ramos, I also believe that sexual harassment should not be tolerated in any situation. I will look into the circumstances of this alleged incident and cooperate with any investigation. If it is proven that there was in fact malicious intent, I will make sure that proper sanctions are meted out," Palami said.

The Azkals arrived in Kathmandu, Nepal last Friday, and hope to stay focused despite the controversy to prepare for their AFC Challenge Cup bid beginning March 9 against defending champion North Korea.

"I still wish all the best for the Philippines," Ramos said in a radio interview.

"Gusto kong manalo ang Pilipinas, why not, di ba eh Filipino rin naman tayo, taga-Pilipinas. Ngunit ang sinasabi ko lang din mag-ingat din sila. Isa-puso nila, isa-diwa, isaisip nila na Filipino sila at sila ay dapat magpakita ng katanggap-tanggap at kung ano ang pinakamaganda sa lahi natin (I want the Phl Azkals to win since I'm a Filipino too. But what I'm just trying to say is they should be conscious and careful of their actions. They should put into heart that they're Filipinos and they should display all the good things about our race)," she added.

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PSEi Philippines March 2012 0 Stocks hit 77.7 points record high, heralding economic rebound

ADB recently reported 5% predicated gworht for Philippines economy 2012. With the bullish performance of the Philippine stock market during the last two days that culminated in a new record high of 5,016.30 in Friday's trading, the economy is now poised for a rebound.

This was what an elated President Benigno Aquino III told reporters over the weekend in Calapan City in Oriental Mindoro, south of Manila, where he inaugurated a mini-hydroelectric plant that would provide electricity for some 45 villages in the area.

According to Aquino, the stock market is "the clearest and fastest" indicator of renewed business confidence in the country.

The main Philippine Stock Exchange index (PSEi) surged 1.57 percent, or 77.69 points, to close at an all-time high of 5,016.30 Friday. On Thursday morning, the PSEi rose more than 2 percent to an intraday high of 5,011.09 before paring down gains and closing at 4,938.61.

Aquino said that the PSEi could have breached the 5,000 level much earlier had it not been for the political tension in the Middle East and the financial crisis in Europe.

Local stocks hit an all-time high first on Thursday on expectations that the Bangko Sentral ng Pilipinas, the country's central bank, would cut interest rates to boost the economy.

The BSP indeed cut its main policy rate by 25 basis points after the market closed to a record low of 4 percent to help cushion the domestic economy from the global slowdown.

The bullish local stock market performance could be attributed to the continued strong inflow of portfolio investment or hot money into the country.

According to the BSP, the net inflow of foreign portfolio investments into the country hit $586 million in January, a sharp 250.3 percent increase from the $167 million net inflow a year ago.

The BSP said the figure was four times the $140 million recorded in December 2011.

A report by the PSE said that the local stock market attracted droves of foreign investors in the first two months of the year, driving valuations higher and lifting the main index to unprecedented heights.

Net foreign buying at the local stock market amounted to ₱22.72 billion ($532 million) during the January to February period, a dramatic turnaround from the $7.65 billion ($179 million) in net selling recorded in the same period last year, the PSE reported.

In the early part of 2011, investors were dumping emerging- market equities due to concerns over rising inflation.? This time around, however, sound macroeconomic fundamentals are luring more funds into the region, benefiting the Philippines whose stock market was the region's best performer in 2011.

The main-share PSE index pierced through the 5,000 or the first time in history in Thursday's trade.? Since the start of the year, the index has gained by 13 percent.

"The trek past the 5,000 index marks a very significant milestone in PSE history.? Central banks, especially in the larger, developed economies, have put in place various measures to make sure that we avoid a widespread collapse, and this has provided a rallying point among global markets. Coupled with the country's own growth story, we are hopeful that this rally will continue," PSE president and chief executive officer Hans Sicat said in a press statement.

Total market capitalization at the PSE as of Feb. 29 stood at $9.31 trillion ($218 billion), up 5.91 percent from the level in the same period last year.

Turnover for the first two months reached P331.87 billion ($7.77 billion), 69.47 percent higher than the level a year ago.

According to recent research analysis undertaken by the regional investment house CLSA Asia-Pacific, the Philippines "is undergoing a renaissance that looks all set to bring the economy to higher growth and power stocks to new heights."

The CLSA said that like the rare endangered Philippine eagle, a private sector investment cycle was a rare sighting in the country.

But now, the CLSA said, the country was on the cusp of another investment cycle for the first time in 15 years driven by political stability, rising business confidence, low interest rates, robust balance sheet and the country's long-term demographic potentials. "The Philippines soars like an eagle, again," the analysis said.

For the banking sector, Ron Rodrigo of DBP-Daiwa Securities was reported as saying that there were expectations that the Philippines may soon get a credit rating upgrade.

This helped sustain positive sentiment, Rodrigo said, a day after the BSP trimmed its key interest rates.

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Philippines Unemployment drop bolsters economic optimism for 2012

THURSDAY, 01 MARCH 2012 21:16         

By: CAI U. ORDINARIO (http://businessmirror.com.ph)

The National Economic and Development Authority (NEDA) is confident that the increase in the number of employed Filipinos will boost the optimism for the economy this year.

Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. said data from the National Statistics Office showed that the government created more than a million jobs last year. The quality of jobs also improved as indicated in the Labor Force Survey (LFS).

"Last year the country generated more employment from the previous year. Employment level rose by 3.2 percent or 1.156 million, largely on the strength of the continued growth in services and the recovery in agriculture, although there was a slowdown in the industry sector," Paderanga said in a statement.

Paderanga also said the country has a better unemployment figure compared to the United States, which has an unemployment rate of 8.3 percent in January 2012. He explained that this is because the character of our economy is different from those of developed nations.

He added that the government's infrastructure investments this year, such as those that will be used for public-private partnerships, will also boost the economy and enable small and medium enterprises to attain "economies of scale" in their operations and therefore, hire more workers.

"Infrastructure investments will actually go a long way because when you connect the economy, then our own small businessmen will have a bigger market to look at and therefore we may start attaining economies of scale, although this means more competition among them but we think in the end it will be good for everybody that they become more productive," Paderanga explained.

Data showed out of the 61.9 million Filipinos aged 15 years old and over, about 40 million were in the labor force or economically active in 2011. This translates to an annual labor force participation rate (LFPR) of 64.6 percent, higher than the LFPR in 2010 which was at 64.1 percent.

The NEDA added that despite an increase in the LFPR, the quality of employment remained positive last year, with strong growth in wage and salary employment which posted a 4.6 percent growth; modest growth in full-time employment, 1.5 percent; and slight easing of the unemployment rate to 7 percent in 2011 from 7.3 percent in 2010.

However, Paderanga said that while the Philippines may have fewer unemployed persons, the country would compare unfavorably to developed economies in terms of underemployment, which increased from 18.8 percent in 2010 to 19.3 percent in 2011.

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Philippines rejects China’s joint oil exploration proposal

The joint development of areas in the West Philippine Sea (South China Sea) that "are clearly ours is not a viable solution" to our problem with China, according to Foreign Secretary Albert del Rosario.

As for the potentially resource-rich Spratlys group of islands, the Philippines is "open to considering joint development in the disputed areas," Del Rosario told the Philippine Daily Inquirer Sunday.

Del Rosario said that during his meeting last week with Wang Yingfan and Wang Chungui, two former Chinese ambassadors to the Philippines who were here on a goodwill visit, he "reiterated our position that we are open to inviting China in the Recto Bank as an investor to be governed by [our] laws."

The Recto Bank (Reed Bank), he pointed out, was an "integral part of the Philippines and, as such, cannot be jointly developed."

"To do so would be in violation of our Constitution," he said.

The Recto Bank had drawn China's interest several months ago when the Philippine Air Force discovered several Chinese vessels in its vicinity.

UNCLOS is the other option

As another option, Del Rosario said "we again asked if China would join us in availing of the dispute settlement mechanism under the United Nations Convention on the Law of the Sea," or UNCLOS.

He said he told his guests the government was "endeavoring to look at all means to arrive at a peaceful solution of the disputes in the West Philippine Sea in accordance with international law, specifically UNCLOS."

Apart from China's suggestion that the Philippines revisit the concept of joint development of the Spratlys, the two sides also discussed "how both nations are advancing our bilateral agenda while treating contentious issues separately, and the view that we should not accept all that appear in the press as being factual," Del Rosario said.

According to the secretary, the retired ambassadors were "very appreciative (they) came to enhance our friendship and cooperation."

Earlier, he told this paper that "their visit serves to put substance in the initiative (of China and the Philippines) on friendly visits."

During President Benigno Aquino III's state visit to Beijing last August, both sides declared 2012 and 2013 the "Years of Friendly Exchanges" between the two Asian neighbors.

Philippines should adopt Chinese Deng Xiaoping Solution & set aside fighting?

Wang Yingfan during his visit to the Philippines told a media forum organized by the Chinese Embassy that the Philippine government should consider the "Deng Xiaoping Solution" to the Spratlys dispute, which is, setting aside the territorial quarrel in favor of a joint exploration and development of the disputed waters.

Wang, who served in Manila from 1988 to 1990, stressed "it is time for cooperation, not confrontation, not fighting."

He said he had "talked with some important people in your government that we should work hard to find ways that are acceptable to both sides that we must work hard to prepare the ground so that we could share the resources together."

According to Wang, the response he got "was very encouraging. They said they would consider this kind of thinking. So with patience, with goodwill and with hard work, we could find a way out that's agreeable and acceptable to both sides.    "

Wang also advised Filipinos to "spend your energy on economic development."

He said it would be some time before the two Spratlys claimants could find a solution to the dispute.

Wang also warned the Philippines against bringing the United States into the equation, saying this would be unacceptable to China which would "certainly react" if that happened.

Wang stressed that allowing the US to meddle in the six-nation Spratlys conflict was another story. "That would make the issue more complicated and more difficult to settle among ourselves," he said.

The Philippines and China claim all or part of the Spratlys along with Vietnam, Taiwan, Malaysia and Brunei.

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1+1 = Asia Pacific Freedom U.S.A. & the Philippines

The new equation is born for the new era of the USA and the Philippines relations.

The U.S. and the Philippines are working together to counter terrorism, increase maritime security and assist in humanitarian efforts.

The United States is revitalizing its long-standing alliance with the Philippines in order to meet the challenges of the 21st century.  "In many ways," said U.S. Assistant of Secretary State for East Asian and Pacific Affairs Kurt Campbell, "we are writing a new chapter in our relationship and turning the page from a legacy of paternalism to a partnership of equals."

In recent Congressional testimony Assistant Secretary Campbell and Acting Assistant Secretary of Defense Peter Lavoy noted that the United States and Philippines are allies committed to sustaining global and regional peace, security and prosperity. 

While the U.S. and the Philippines remain committed to countering al-Qaida-linked terrorist groups in the southern Philippines, including with the support provided by the Joint Special Operations Task Force, the two countries are also increasing their cooperation in maritime security and humanitarian and disaster assistance.

Assistant Secretary Campbell added that the U.S. and the Philippines are also building a stronger economic partnership.  The U.S. is the second largest trading partner of the Philippines and one of its largest foreign investors. 

But more needs to be done to enhance the commercial relationship, particularly in removing certain trade barriers, which the United States believes unfairly penalize U.S. products, including Philippine restrictions on frozen meat imports.

The U.S. and Philippine governments have committed to a joint development approach in addressing the main constraints impeding equitable, broad-based economic growth for Filipinos.  Primary focus involves support for the Aquino administration's anti-corruption efforts. 

Assistant Secretary Campbell noted that Philippine president Benigno Aquino has brought his "integrity, passion and commitment" to the fore in seeking to follow through on his campaign pledges to root out corruption in the Philippines.

President Aquino has given his personal attention to addressing the scourge of human trafficking and there has been significant progress under his leadership.  The U.S. supports government and civil society institutions that are working to prevent victimization, rescue those who have been abused, and expeditiously apprehend and prosecute perpetrators.

"The vital ties between the Philippines and the United States are strong and growing stronger," said Assistant Secretary Campbell, "and we must continue to invest in them to serve the interests and answer the concerns of our people, to maintain security and the conditions for progress, and to keep following the fruitful pursuits of peace."

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Philippine Navy & Coastguard Joint Patrol in Spratly – China ordered NO..

The Philippine Coast Guard (PCG) and the Philippine Navy (PN) will jointly conduct offshore patrol on West Philippine Sea (WPS), a task mandated under the newly-created National Coast Watch System (NCWS) by virtue of Executive Order No. 57, signed and issued by President Benigno C. Aquino III last September.

Addressing the PCG graduating class of Advance Boarding Officers' Course (ABOC) conducted by the United States Coast Guard (USCG) Mobile Training Team held at the PCG headquarters last week, newly-named PCG chief of staff Commodore Aaron T. Reconquista said, of late, the PCG has been mandated with a leading role in the West Philippine Sea in terms of enforcement of national laws particularly relative to customs, immigration and quarantine (CIQ).

Reconquista underscored the US team of instructors for sharing their expertise, knowledge and skills with the PCG, particularly the members of PCG special operations group (SOG) headed by Cdr. Marco Antonio Gines, who, undoubtedly acquired knowledge and skills from the four-week training course – two weeks spent in training instructors-counterparts, and two weeks in training new 26 students on advance boarding course. "We are indebted to the US government for extending to us this assistance and to the United States Coast Guard (ASCG) mobile training team facilitated by the US embassy staff," he said.

He extended the warm felicitations and words of thanks of the whole PCG headed by its commandant Vice Admiral Edmund C. Tan to US embassy deputy economic counselor Mr. Brent Christensen, US charge' d Affaires Ms. Leslie Basset, Export control and Boarding Security (EXBS)regional advisor Mike Mcnamara, US naval attache to the Philippines Capt. Jack Sotherland, and the entire USCG Mobile training team for the time they shared with the PCG, who benefited from the training course.

The conduct of the ABOC is really quite timely, said Reconquista. "Today's terrorists are not particularly concern about converts, and rather than wanting a seat at the table, they want to destroy the table and everyone sitting on it,!" stressed the PCG chief of staff.

Reconquista, an alumnus of Philippine Military Academy (PMA) and the United States Coast Guard Academy (USCGA), disclosed that the 2nd USCG cutter will be handed over to the Philippine Navy soon. Expressing excitement, he told US brass present at the rites, "perhaps through your representation, the 3rd USCG cutter would be for the PCG, as the trend in maritime law enforcement is shifting to law enforcer operators like the Coast Guard, in contrast to the aggressive nature of the 'gray ships."

President Benigno Aquino III created the National Coast Watch System (NCWS) to expand the country's naval and maritime security operations to preserve the Philippine territory, protect its people and resources from maritime threats, through Executive Order No. 57 that has made the NCWS the 'central inter-agency mechanism' for a more coordinated approach on maritime issues, and security operations, to enhance governance of the country's maritime domain.'

China Order the Philippines over Spratly

Former Chinese Ambassador to the Philippines Wang Yingfan warned that dragging the United States in the disputed West Philippine Sea (South China Sea) would be unacceptable to China and Beijing "certainly would react" if that happened.

"We could forge good neighborly relations and work out something that's beneficial and acceptable to both sides… You are happy and we are happy. Maybe, you're half-happy and we're half-happy, but it's acceptable to both sides," Wang said in a media forum on Wednesday organized by the Chinese Embassy.

Wang ignored the previous incidents of poaching and firing of Chinese Naval Force to the Filipino fishermen fishing in the Sea of Palawan.

Wang, who served in Manila from 1988 to 1990, said there was nothing wrong with the Philippines acquiring used US warships for defense purposes and that "any nation must do something (to improve) their own national defense."

"It's understandable. No problem," he said. "I know your Navy is very much backward in equipment. If you buy warships from the United States, I would understand."

But Wang, who said he still advised his government on regional issues despite his retirement, asserted that allowing the United States to meddle in the six-nation Spratly Island dispute was another story.

More complicated

"If it really happens that the United States and your country would talk about the South China Sea and how you should work together, I think that would be something which cannot be accepted by the Chinese," he said.

"If (the Americans) involve themselves in the territorial dispute, there will be problems with China. If that happened, the Chinese government certainly would react," he added.

That is why it would be "wise for the nations concerned in this region, including the Philippines, not to introduce Americans into the disputed waters," Wang said.

Six claimants

"That would make the issue more complicated and more difficult to settle among ourselves," he said.

The Spratlys are a chain of up to 190 isles, reefs, coral outcrops and banks believed to be sitting atop large deposits of oil and natural gas.  A Chinese report quoted by US authorities estimates there are 225 billion barrels of oil in the area.

The isles and their waters are claimed wholly or in part by China, Taiwan, the Philippines, Vietnam, Malaysia and Brunei.

President Benigno Aquino III has said the gas deposits in the disputed territory are so enormous that they would dwarf the Malampaya oil and gas fields.

Wang Yingfan and another retired Chinese diplomat, Wang Chungui, who was ambassador to Manila from 2000 to 2004, are in the Philippines on a weeklong goodwill visit as part of the two countries' friendly exchanges, the embassy said.

'Deng Xiaoping solution'

Wang Yingfan pushed for the so-called "Deng Xiaoping solution" to the dispute—setting aside the territorial quarrel in favor of joint exploration and development.

Xiaoping solution is unfavorable and unacceptable to the Philippines as the whole Spratly's Archipelago is under the territory of the old Sultanate State of Sulu during the 1400 years. The Chinese invasion to the Philippines territory in Spratly wouldn't mean that they would have the rights over the wealth in the Spratly but just a forever dream as the Philippines will never surrender to China's power.

The late Deng, who led China from 1978 to 1992, steered the world's most populous state toward a market economy in the 1980s.

Wang Yingfan stressed "it is the time for cooperation, not confrontation, not fighting."

"I talked with some important people in your government that we should work hard to find ways that are acceptable to both sides, that we must work hard to prepare the ground so that we could share the resources together," he added.

"The response was very encouraging. They said they would consider this kind of thinking. So with patience, with goodwill and with hard work, we could find a way out that's agreeable and acceptable to both sides."

'China's Solution will come but not the UNCLOS'

Instead of wasting time talking about the Spratlys dispute, Wang said it would be better if Filipinos "spend your energy on economic development."

He said "it would take some time before we could find a solution (to the dispute)" but he was "optimistic that that will come."

Foreign Secretary Albert del Rosario has said a "rules-based" approach based on international law is the key to settling the dispute and that the Philippines expects nothing less from the other Spratlys claimants.

Following a recent meeting between the Philippines and China in Beijing, the Department of Foreign Affairs said the two sides had agreed to promote bilateral relations, such as on energy, science and technology, disaster mitigation, law enforcement and maritime cooperation.

The Chinese foreign ministry has said both countries have agreed not to let their quarrel over the Spratlys "affect the broader picture of friendship and cooperation" between them.

China had warn the Philippines several times that the Philippines would pay the price after Philippine Navy catch the Chinese poacher who is illegally killing green turtles in the West Philippines sea, recently Chinese government mouthpiece even call for  the China government to sanction the Philippines by economic disruption and even fired several Filipino fishermen in the Philippine waters during the last year.

China's belligerent behavior towards the Philippines have recently slow down after the USA pronounced its full support to the Philippines if there is any invasion from external force to the Philippine territory.

Though invasion happened as the china controlled few islands and shoal near the Palawan Island under Palawan jurisdiction; still the Philippines failed to drive away the current illegal occupation of china in around Sabina shoal.

China loosen its tight grip over the Spratlys archipelago after US intervene of its aggression in the 1400 year old territory of the Sultanate State of Sulu which is the Spratly Archipelago.

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Philippines Lifted Ban - Au Pairs for European Countries

The Philippines on Wednesday (February 23, 2012) lifted a ban on sending Au Pairs to all European countries after new protection guidelines were issued, the Department of Foreign Affairs (DFA) said. The ban to European countries lasted for 14 years since 1998 due to racial and economic discrimination towards the poor Filipinos from the Philippines from the rich European countries.

The ban on the deployment of au pairs to European countries has been lifted after the ad-hoc Technical Working Group (TWG) issued a new set of guidelines, Foreign Affairs Secretary Albert del Rosario announced yesterday.

The DFA said that the new guidelines are meant to facilitate the departure of the "au pairs" and at the same time to provide them safety nets and protection. A strict monitoring system will be put in place at all Philippine embassies and consulates in Europe for the protection of Filipino au pairs, the Philippine Star reported.

The new "Guidelines on the Departure of Au Pairs to Europe" were approved to facilitate the departure of au pairs and provide safety nets and protection.

The ad-hoc TWG is composed of the Department of Foreign Affairs (DFA), Department of Labor and Employment (DOLE), Department of Education (DepEd), Bureau of Immigration (BI), Philippine Overseas Employment Administration (POEA) and Commission on Filipinos Overseas (CFO).

Under the new guidelines, procedures for the departure of au pairs have been simplified and the documentary requirements were set to the minimum.

A strict monitoring system shall also be put in place in the Philippine embassies and consulates general in Europe for the protection of au pairs. The DFA will act as the lead agency in formulating policies on the au pair scheme.

Departing au pairs only need to submit the following to the BI at the port of departure: a contract of engagement duly authenticated by the Philippine embassy or consulate general in the area of destination, valid passport with au pair visa, and a CFO certificate/sticker.

The DFA said au pairs need not go through the DOLE or POEA procedures as they are not considered overseas Filipino workers (OFW).

Au pair is a term used to describe those between 18 and 30 years of age, unmarried and without any children, placed under a cultural exchange arrangement with a European host family for a maximum stay of two years, unless otherwise allowed by host countries.

Under the au pair scheme, the au pair is placed in an immersion program in cultural and language learning in the specific European country of destination. He or she shall live with the host family at par (au pair) or on an equal basis with the immediate members of the host family, shall be given pocket money, share in child care, light household chores and responsibilities previously agreed upon in an au pair placement contract between the au pair and the host family.

The ban was imposed in 1998 due to isolated cases of abuse of the system by some unscrupulous elements. In 2010, the ban was lifted for Switzerland, Norway and Denmark.

Del Rosario advised prospective au pairs not to go to third party go-betweens since the procedures have been simplified at the least cost for the Filipino au pairs.

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