FATF Blacklists Ecuador, Yemen, Vietnam, Upgrades Philippines

By Samuel Rubenfeld

The Financial Action Task Force said Friday (June 22, 2012) it added Ecuador, Yemen and Vietnam to its list of countries that haven't made sufficient progress in tackling money laundering and terrorist financing.

The three countries were slapped with a label saying they either didn't address deficiencies in fighting money laundering and terrorism finance, or that they didn't commit to an action plan with the FATF to deal with the issues.

"The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction," it said in a statement.

Ecuador, Yemen and Vietnam have each, the FATF said, taken some steps toward fixing the problem, though none of them have done enough to prevent the blacklisting.

Countries that fail to implement FATF's recommendations run the risk of being labeled as high-risk or uncooperative jurisdictions, thereby making it even more costly and difficult for those nations to do business with the banking systems of FATF members. The FATF's members include the U.S., Mexico, France and the U.K.

The FATF's last plenary was in February, when it updated its recommendations to include tax evasion and smuggling as "predicate offenses" to money laundering. It met last week in Rome.

Turkmenistan was cited as having "largely met its commitments" under the action plan, and is therefore no longer subject to monitoring by the FATF, it said.

In addition, the FATF added Afghanistan, Albania, Kuwait and the Philippines to its list of countries seen as countries making progress toward implementing plans to fight terrorism finance and money laundering.

The countries on the so-called "gray list" have strategic deficiencies in their systems for fighting the issues, but they have committed to action plans and are making progress in dealing with them.

The Philippines is by far the most notable in the list, because it was identified in February after the last FATF plenary session as not having made sufficient progress, putting it on a so-called "dark gray" list.

This month, the Philippines enacted an amendment to its money laundering law and a law to combat the financing of terrorism, both of which were lauded by the FATF on Friday. It "strongly encourages" the country to pass another pending change to the country's money-laundering law.

The FATF's announcement Friday upgraded the Philippines from the "dark gray" list to the "gray list." More coverage of the Philippines is available here, here and here.

Calling the announcement "positive news…particularly for our overseas workers and our economy," the country's Anti-Money Laundering Council said in a statement that the pending legislation would expand the definition of money laundering under Philippine law and increase the predicate crimes to include bribery, human trafficking, tax evasion and environmental crime.

"The Philippines will continue to contribute and support the global efforts against money laundering and terrorist financing in keeping with its commitment to good governance and upholding peace and order," the statement said. 

Wall Street Journal 

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Philippines bests India in call centers

Aegis PeopleSupport workers at their workstations inside the company's offices in Makati City, near Manila, Philippines, Nov. 11, 2011. Many companies have moved their customer service lines to Manila to take advantage of workers who speak American English and are familiar with American culture. Photo: Jes Aznar, New York Times.

Filipino accents and knowledge of America are a big competitive advantage.

It's midnight in Manila, and the capital is slowly waking up to the start of another working day. At the Worldwide Corporate Center office block, thousands of young Filipinos are crowding into endless open-plan offices. Once seated, they quickly start answering the questions and calming the frustrations of vexed American consumers beginning their own day on the other side of the Pacific Ocean.

These Filipinos are call-center workers. To outsiders it is hardly a glamorous profession, yet -- despite the antisocial hours -- these men and women have every reason to be as well-motivated and cheerful as they seem. They are well-paid and know that they work at the heart of their country's most dynamic industry.

The rise of what is known as business-process outsourcing (BPO) in the Philippines has been nothing short of phenomenal. The very first calls weren't taken until 1997, but today the sector employs 638,000 people and enjoys revenues of $11 billion, about 5 percent of the country's GDP.

Last year the Philippines even overtook India, long the biggest call-center operator in the world, in "voice-related services." The country now employs about 400,000 people at call centers, India only 350,000.

The Southeast Asian upstart, with a population of 101 million, is unlikely ever to surpass the Indian behemoth of 1.2 billion people across the entire range of outsourcing offerings, which also include all kinds of information-technology services.

Growth expected to explode

Yet, given its extraordinary growth so far, it is hard to ignore the Philippines' projection that its BPO industry could add another 700,000 jobs by 2016 and generate revenue of $25 billion. At that point the industry would make up a tenth of the country's GDP.

As in the call-center business so far, some of these new jobs will come at the expense of India. However, India's relationship with the Philippines in back-office work is more complex than the numbers suggest.

The main reason for the success of the Philippine call centers is that workers speak English with a neutral accent and are familiar with American idioms, which is exactly what their American customers want. Of these, many have taken to complaining bitterly about Indian accents, which no amount of "voice neutralization" coaching seems to have overcome. As a result, some Indian firms have been helping to move jobs to the Philippines by setting up call centers in Manila and other parts of the country.

Infosys and Wipro, as well as scores of other Indian firms, now have substantial operations there. And they aren't drawn to Manila by cheap labor: Wages in the Philippines are slightly higher than in India, since the Filipino accent commands a premium.

It also helps that the country has a big pool of well-educated workers. The million or so Filipinos who graduate every year have few other options to choose from, besides emigrating. Working in a call center is considered a middle-class job: New recruits start at $470 a month.

The big question is whether the Philippine BPO industry, having conquered the call-center market, can now move up the value chain. To keep growing rapidly, and profitably, it needs to capture some of the more sophisticated back-office jobs, such as those processing insurance claims and conducting due diligence. In these businesses, called knowledge-process outsourcing and legal-process outsourcing, India still rules supreme.

Integreon offers a glimpse of what the future may hold. The firm occupies only a few discreet, very secure offices. It employs 300 people in Manila, 40 of them lawyers who help multinational law firms with litigation. Familiarity with America helps.

"It makes it very easy for us to do legal research for American firms," says Benjamin Romualdez, the firm's country manager.

This sort of operation is new in Manila, but Romualdez expects that he can find the skilled workers to double his workforce in the next five years. Western banks also have discovered the Philippines. JPMorgan Chase now has more than 25,000 workers on its payroll in the country, many of whom do much more than answering phones.

In short, the Philippines is set to compete with India across the BPO board.

StarTribune 

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USS Louisville - US submarine docks at Subic Zambales

A nuclear-powered attack submarine of the United States Navy arrived yesterday for a port call in Subic Bay, Zambales amid tension between the Philippines and China over Panatag (Scarborough) Shoal.

The USS Louisville would replenish supplies and give its crew an opportunity to take their rest and relaxation, according to a statement from the US embassy.

The embassy said the routine port call "highlights the strong historic, community, and military connections between the United States and the Republic of the Philippines."

The USS Louisville is the second US attack submarine that visited the Philippines since Washington announced plans to boost its presence in the Asia-Pacific region.

The first was the USS North Carolina that docked in Subic Bay last May 2012.

The port call was made as China and the Philippines are in a standoff near Panatag Shoal, located 124 nautical miles from the coast of Masinloc, Zambales.

The military, however, clarified that the visit of the Louisville has nothing to do with the territorial dispute between the Philippines and China.

"(The ship) has no mission in the Philippines except replenishment. That was stated in its diplomatic clearance. They have no activity involving the Philippine Navy," said Navy spokesman Col. Omar Tonsay.

He said there is nothing unusual even if the Louisville's visit came just a month after North Carolina's port call.

"I don't see anything unusual there if they will just replenish here in the Philippines. It's normal for ships to replenish," Tonsay said, adding that it was the US that sought clearance for the port call.

USS Louisville will dock in Subic Bay until June 30. The fast attack Los Angeles-class submarine is the fourth US ship to bear the name of the city of Louisville, Kentucky.

Journalists were not allowed to cover the visit of the submarine, which was commissioned on Nov. 8, 1986 at the Naval Submarine Base in New London, Connecticut.

The Louisville is 360 feet long, weighs 6,900 tons, and is armed with sophisticated MK48 torpedoes and Tomahawk cruise missiles.

The standoff in Panatag Shoal started on April 10 after Chinese maritime surveillance ships barred the Philippine Navy from arresting Chinese fishermen who were caught poaching and illegally harvesting endangered marine species in the area.

Manila had protested Beijing's actions in the shoal, which is within the Philippines' 200-nautical mile exclusive economic zone as provided by the United Nations Convention on the Law of the Sea (UNCLOS).

China maintained that it has sovereignty over the area even if it is a signatory of the UNCLOS.

Aside from Panatag Shoal, the Philippines is also claiming several islets, shoals, reefs and sandbars in the Spratlys group of islands, which is also being claimed in whole or in part by China, Vietnam, Malaysia, Brunei, and Taiwan.

Early this month, US Defense Secretary Leon Panetta said the US is planning to deploy a majority of its naval fleet to the Pacific by 2020.

Speaking to the delegates of the Shangri-La Dialogue in Singapore, Panetta said the move is in line with US efforts to boost its presence in the Asia Pacific.

He said the US naval assets would be realigned from a roughly 50-50 split between the Pacific and the Atlantic to about 60-40 split between those oceans.

Panetta said the move would involve key assets including six aircraft carriers, cruisers, destroyers, littoral combat ships, and submarines.

The US official claimed that the deployment was not meant to challenge China, which has been wary of Washington's plan to boost its presence in the region.

Panetta, nevertheless, said the US is "paying close attention" to developments at Panatag Shoal.

Information sharing not necessary

Meanwhile, Foreign Affairs Secretary Albert del Rosario said sharing with the US the information on Chinese intrusion in Philippine waters may not be necessary since Washington already has very sophisticated intelligence equipment.

Responding to a question during the Joint Membership Meeting of the Makati Business Club and the Management Association of the Philippines last month about how the Philippines shares with the US information about Chinese intrusion, Del Rosario said, "I think we do not have to send pictures to the US."

US Ambassador Harry Thomas Jr. said on Thursday that there is no doubt and no question that his government stands by its commitments under the Mutual Defense Treaty (MDT).

Asked about questions and doubts raised on US support to the Philippines on the issue of maritime dispute because of deep economic ties between the US and China, Del Rosario said it is an opinion everybody is entitled to.

"We stand by our treaty commitment. It's amazing to me that people would question that," Thomas told the media during the first Kapihan sa Embahada.

He said the US is concerned about the events in the West Philippine Sea (South China Sea), including the tensions surrounding Panatag Shoal, emphasizing that Washington opposes coercion by any nation to advance its claim and the US clearly supports the Code of Conduct between China and ASEAN.

But Thomas did not provide a categorical answer when asked about the provision in the MDT on an attack on one party being considered an attack on the other, saying it is hypothetical and the US hopes for de-escalation and no violence in the disputed waters.

"All we can say (is) we stand by our commitments and I'm not going to change that. The Secretary of State, the President of the United States have also said we stand by our treaty commitments," he said.

US embassy Political Counselor and acting Deputy Chief of Mission Joy Yamamoto said, "The language of the MDT demonstrates our very strong commitment to the Philippines."

Yamamoto and Thomas said the US supports settlement of the disputes in the West Philippine Sea towards the use of a rules-based regime in accordance with international law and the International Tribunal on the Law of the Sea (ITLOS).

Yamamoto said, "We've been very consistent throughout the dispute in supporting international law and settlement of this kind of dispute under international law, so we would support China and the Philippines settling the issue through international means."

China had accused the US of creating tensions in the region and repeatedly warned that territorial disputes over the West Philippine Sea were issues between China and claimant countries.

Beijing said it would not allow US involvement in territorial disputes.

The ambassador said the US has been very clear that it takes no side in territorial disputes or cross-cutting claims between several states, not just China, but urged all parties to sit down and iron out disputes in a peaceful and legal manner.

Although the US position is not to get involved in territorial disputes, Secretary of State Hillary Clinton recently testified before the Senate Foreign Relations Committee hearing concerns on the US accession to UNCLOS, where she said Chinese claims exceeded what was permitted by the UNCLOS.

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China Ship rammed Filipino Fisherman in Payaw off 78 NM Pangasinan- 1 dead, 4 missing 3 CD

A china ship with label "Hong Kong" rammed Filipino Fishing ship resting in "Payaw", a Philippine Government made artificial fish Sanctuary 78 Nautical Miles of Bolinao Pangasinan.

 A group of Filipino fishermen who were rescued after three days at sea has told authorities on Sunday (June 24, 2012) that their boat sank after being rammed by a Chinese vessel in the waters of Pangasinan Province.

The incident happened in the North of Panatag Shoal (Scarborough Shoal) where the Philippines and China have been engaged in a tense standoff since April 2012.

Philippine Coast Guard (PCG) commandant Vice Admiral Edmund Tan said on Sunday that four of the eight crew members of fishing vessel F/B Axl John were rescued last Saturday morning along the vicinity off Magsingal town in Ilocos Sur after the said vessel was reportedly rammed by a much bigger unidentified shipping vessel while taking shelter along a nearby "Payaw", (better known as artificial fish sanctuary) last June 20 along the vicinity off Bolinao in Pangasinan.

Tan disclosed that the group of eight which all came from the town of Bolinao went out for fishing venture last June 18 despite rough seas based on the report given to them by the Philippine National Police (PNP) in Pangasinan.

Around 11:45 p.m. of June 19, F/B Axl John was already filled with too much amount of sea water due to big waves and caused the fishing vessel to be partially submerged few hours later but the crew fortunately manage to secure the vessel to a nearby "Payaw" located around 78-nautical miles northwest of Bolinao where they take shelter and started to conduct some repairs to their damage vessel.

The PCG chief explained that while the crew members are continuing to fix the damage suffered by the vessel, another vessel making its way northward suddenly rammed the "Payaw" and the Axl John causing all the eight fishermen onboard to drift into different direction.

The boat owner identified as Jonalyn Hondrado who is a resident of Barangay Concordia in Bolinao said she received a phone call from Posio Balmores, the boat operator saying that the Axl John was rammed by what appeared to be Chinese vessel while it was anchored at the said fish sanctuary.

On the boat with Balmores were Christopher Carbonel, Lino Damian, Boy Balmores, Fred Celino, Arnold Garcia, Domy delos Santos and Amante Resonable, residents of Barangay Concordia and Barangay Arnedo.

Both Posio and Boy Balmores together with Damian and  Christopher  Carbonel were rescued around 8 a.m. of Saturday in the vicinity waters of Magsingal in Ilocos Sur and they were brought at the Gabriela Hospital in Vigan City for immediate medical treatment.

Unfortunately, Christopher Carbonel, 32 year old from island village of Dewey in Bolinao died few minutes later while his other comrade is still under observation while the two others were discharged on Sunday and were brought back to Bolinao.

Meanwhile, still missing are Celino, Garcia, Delos Santos and Resonable.

Tan on Sunday dispatched one the agency's rescue vessel, Tug Boat-271 to conduct a follow-up search and rescue operations for the three missing crew along the vicinity off Ilocos Sur.

A Notice to Mariners was also issued in all the maritime vessels in the nearby areas to be on watch out for the said three fishermen and render immediate assistance when spotted.

Philippine authorities could not immediately verify if the vessel that hit the Axl John was Chinese.

Office of Civil Defense chief Benito Ramos was quoted by the Agence France Presse as saying the incident occurred north of Scarborough Shoal where the Philippines and China have been engaged in a tense stand-off since April.

"It's north of the Scarborough, though we could not determine how far in terms of distance or nautical miles," Ramos said.

Vice Admiral Tan meanwhile said that based on the statement given to them by one of the survivors, the vessel that rammed them was marked with blue and maroon paint both on the top and freeboard portions while a word "HONGKONG" was seen somewhere near the rear part of the ship.

The stand-off at Scarborough began in April, when a Philippine Navy ship tried to apprehend Chinese fishermen allegedly poaching in the shoal.

Chinese maritime security vessels prevented the PH Navy and Coast Guard from arresting the Chinese fishermen or confiscating their cargo of live sharks, clams and coral. –with additional reports from Agence France Presse.

The of recent clash is not exactly at the Panatag Shoal but it is in the northern part of the Shoal 78 Nautical miles in the waters of Bolinao, Pangasinan. The Philippines and China have been engaged in a tense standoff since April 2012 closer this area.

President Aquino earlier this month ordered two Philippine ships to pull out from the shoal during bad weather, a move that the Chinese said calmed tensions in the area.

While China said it would also ask its fishermen to leave the area, it stressed it had no intention of pulling out its bigger ships from there.

Last week, Aquino said the government will be re-deploying ships if Chinese vessels remain in the area.

"The guidelines are very clear," Aquino said.

"If there are vessels that are not ours, we have to send back our vessels. I have ordered them back (to port) because of the weather condition.

"If there's a presence in our territorial waters, then we will redeploy. But if there is no other presence or other vessels that might impinge on our sovereignty, there's no need to deploy," he clarified.

As of last week, there were still seven Chinese ships at the shoal, according to the Department of Foreign Affairs (DFA).

The dispute erupted in April after Chinese government vessels blocked Philippine authorities from arresting Chinese fishermen who were caught poaching and illegally harvesting endangered marine species like giant coral and sharks near the shoal.

Since then, both countries have maintained ships there to press their respective claims to the area.

China claims nearly all of the South China Sea, even waters close to the coasts of neighboring countries.

The Philippines says the shoal is well within its 200-nautical mile exclusive economic zone.

The shoal sits about 230 kilometers (124 nautical miles) off Masinloc town in Zambales. The nearest major Chinese landmass is 1,200 kilometers northwest of the shoal, according to Philippine Navy maps.

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WSJ: USA HAS BECOMING Unreliable Friend to Asian ALLIES

By MAX BOOT

The hardheaded case for President Obama's foreign policy rests on twin pillars: He is a tough commander in chief who does not hesitate to slay the nation's enemies, and he is "pivoting" from the Middle East to East Asia to confront the No. 1 threat to American power—China. There is some truth to both claims, but their essential hollowness has been revealed by a little-noticed defeat the U.S. has just suffered in a place few Americans have ever heard of.

Scarborough Shoal is a minuscule rock formation in the South China Sea that was discovered by an unlucky British East India Company ship, the Scarborough, which grounded there in 1784. This outcropping has been claimed by both China and the Philippines because of the rich fishing beds that surround it and the possibility of drilling for oil.

You would think that the Philippines would have the better claim, having built a lighthouse and planted its flag there in the 1960s. The shoal is only 140 miles west of Luzon, the main Philippine island, well within Manila's 200-mile "exclusive economic zone" as recognized under international law. It is 750 miles from the Chinese landmass.

Nevertheless, China is trying to assert its sovereignty over nine-tenths of the South China Sea based on tendentious historical "evidence" ranging from purported trips by Chinese explorers 2,000 years ago to a 1947 map issued by China's Nationalist government and recognized by no other state.

However unconvincing its claims, China is attempting to make good on them by sending fishing vessels and paramilitary patrol boats into disputed waters. In early April, a Philippine navy ship tried to prevent Chinese fishermen from poaching seafood from the area. Two armed boats from the Chinese Marine Surveillance Agency intervened and a standoff ensued.

Over the past two months, China sent more than 20 ships to the shoal, including as many as seven paramilitary vessels. The Philippines' interests were protected by two Coast Guard cutters. The standoff finally ended, at least for the time being, when the Philippines withdrew its vessels rather than risk losing them in an approaching typhoon.

The U.S. is bound to protect the Philippines under the terms of a 1951 treaty. Yet even as our ally was being bullied by China, the Obama administration adopted a pose of studied neutrality.

The Philippines has offered to submit the Scarborough Shoal dispute to an international tribunal under the Law of the Sea Treaty, which both Beijing and Manila have signed. But China refuses, no doubt knowing it would lose. The Chinese leadership must figure they have a better chance to assert their claim by force majeure because there is no way a weak state like the Philippines can stand up to them.

The Obama administration did not orchestrate an international campaign to rally support for the Philippines. And it failed to take the most dramatic step of all by not sending an American destroyer or other warship to Scarborough Shoal. Would doing so have risked war with China? Hardly. In fact China is the classic bully with a glass jaw.

For evidence, look no further than the tiny Pacific Island of Palau. In late March, at virtually the same time that the Scarborough Shoal standoff was beginning, a Chinese fishing vessel illegally entered Palau's waters. When the poachers ignored repeated demands that they leave an area designated as a shark sanctuary, police from Palau's Fish and Wildlife Division opened fire, trying to sink the offending vessel.

The result: one fisherman dead and 25 captured. A couple of weeks later, under the terms of a deal with China, the poachers were fined $1,000 each and flown back home. The Chinese must have been furious, but their diplomat on the scene had nothing to say except "it is a good outcome."

No one is suggesting that either the Philippine or U.S. navies should have opened fire over the Scarborough Shoal dispute. But it is a sad day when Palau (population 20,000) is more assertive in standing up to Chinese aggression than the United States of America. The nations of Asia are watching carefully and making their calculations accordingly. In their eyes, the U.S. just became a less reliable friend.

Mr. Boot is a senior fellow at the Council on Foreign Relations and author of the forthcoming "Invisible Armies: An Epic History of Guerrilla Warfare from Ancient Times to the Present" (Liveright).

Wall Street Journal Opinion

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Philippine external debt ratio goes down but total foreign debt rises

The external debt ratio of the Philippines, or the total foreign debt taken as a percentage of the country's gross domestic product (GDP), has dropped in the first quarter of this year.

In a press statement issued on Friday, the Bangko Sentral ng Pilipinas (BSP), the country's central bank, said the external debt ratio was down to 27.4 percent from January to March this year from the 29.5 percent registered for the same period last year.

However, the BSP said that in absolute terms, the outstanding external debt of the Philippines in the first quarter rose to 62.9 billion U.S. dollars, up by 3.3 percent from 60.9 billion U.S. dollars as of the same period last year.

The BSP explained that despite the increase in the absolute amount of debt incurred by the government and the private sector for the first quarter, the debt ratio dropped because the growth of GDP in the first quarter was much faster. The country's GDP grew by 6.4 percent in the first quarter, a big jump from the 3.7 percent full-year growth in 2011.

According to BSP officials, the country's outstanding foreign debt grew because of an increase in investments.

"The increase is due largely to 2.3 billion U.S. dollars net availments (excess of borrowings over repayments) as investment and business activities by both public and private sector entities escalated due to the upbeat business sentiment," the BSP said.

Despite the higher debt level, major external debt indicators remain at prudent and comfortable levels in the first quarter, the BSP added.

The National Statistical Coordination Board (NSCB), the Philippine government agency tasked to monitor and evaluate all economic data, said that the mix of indicators used to forecast economic developments points to sustained growth for the country in the second quarter of 2012.

After a decline in the third quarter of 2011, the composite leading economic indicators, or LEIs, accelerated over the next three consecutive quarters, strongly indicating a continuation of positive outlook for the country's economy, NSCB said.

In a report posted on its website, the NSCB said that the LEIs grew 0.125 in the second quarter of the year from a revised 0.064 in the first quarter.

NSCB Secretary General Romulo A. Virola said growth in LEIs hinted at better prospects for business and, thus, economic expansion for the rest of the year.

Of the 11 indicators that make up the composite LEI, seven contributed positively in the second quarter of 2012, the NSCB said.

The LEI System, or LEIS, was developed by the NSCB and the National Economic and Development Authority to serve as basis for short-term forecasting of macroeconomic activity in the country.

The NSCB has also estimated that as of the end of last year, every Filipino owed 51,675 pesos (1,200 U.S dollars), to domestic and foreign creditors.

The Philippines has now a population of more than 95 million.

Despite its huge debt burden, the Philippines managed to lend 1 billion U.S. dollars to the International Monetary Fund (IMF).

Malaca?ang, the seat of the Philippine government, said that it was an obligation on the part of the Philippines to help countries in dire need of funding through the (IMF) as it brushed off criticisms that it was improper for the government to lend money when it needs funds for programs to alleviate poverty and hunger in the country.

Edwin Lacierda, President Benigno Aquino's spokesperson, justified the move by saying that the Philippines had been a recipient of IMF assistance for the past 40 years.

"Now that we have been considered a creditor nation, we feel it is our obligation to assist those nations who require funding from IMF," Lacierda said in a press briefing.

Lacierda said that contribution of 1 billion U.S. dollars to IMF's standby fund of 456 billion U.S. dollars "would also help in stabilizing the crisis that's going on in Europe."

"It is our responsibility; it is part of our obligation (to the) IMF who has assisted us during our times of crisis in the Philippines," Lacierda said.

In a separate statement, BSP Governor Amando Tetangco said the Philippines will get returns from the loan it extended to the IMF.

Tetangco said that for nearly 40 years until 2006, the Philippines itself was a net borrower from the IMF. "We finally fully paid our loans to IMF in December 2006 as the implementation of continuing reforms has made our economy stronger," he said.

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Philippines with other 19 countries Pledges Billion Dollars to Boost IMF

20 Countries Pledges to Boost IMF (International Monetary Fund) to save Europe

1. Belgium - $13.2 Billion
2. Brazil - $10 Billion
3. Britain (UK)- $15 Billion
4. China - $43 Billon
5. France - $41.4 Billion
6. Germany - $54.7 Billion
7. India - $10 Billion
8. Italy - $31 Billion
9. Japan - $60 Billion
10. Mexico - $10 Billion
11. Netherlands - $18 Billion
12. Philippines - $1 Billion
13. Russia - $10 Billion
14. Saudi Arabia - $15 Billion
15. Spain - $ 19.6 Billion
16. Sweden - $10 Billion
17. Switzerland - $10 Billion
18. Singapore - pledged smaller undisclosed amount
19. South Africa - $2 Billion
20. South Korea - $15 Billion
21. USA - refused to pledge

President Aquino administration's pledge to lend $1 billion USD to the International Monetary Fund (IMF) on Friday drew mixed reactions.

A militant labor group slammed the administration's pledge, saying the funds should be spent for Filipinos suffering from widespread unemployment, poverty, malnutrition and hunger.

On the other hand, an administration ally in the House praised the government for agreeing to pitch in to the IMF's fund-raising efforts to bail out tumbling economies in Europe.

"Planet Earth to the Aquino government: The Philippines is still a poor country," the Kilusang Mayo Uno (KMU) said in a statement.

But Valenzuela Rep. Magtanggol "Magi" Gunigundo said the move to lend $1 billion from the country's gross international reserves to the IMF would "actually hit two birds with one stone."

KMU said the pledge, which was announced at the recent Group of 20 meeting in Mexico by Bangko Sentral ng Pilipinas governor Amando M. Tetangco Jr., would most likely be sourced from taxpayers' money and go to the IMF's "war chest" for helping economies distressed by the current severe economic crisis.

"What were they thinking? That amount can be used to improve social services such as education, health, and housing and build basic industries to generate employment," KMU chair Elmer Labog said.

"Where will the Aquino government get this huge amount? From a new tax measure, which will worsen the poverty and hunger being experienced by workers and the people?" he asked.

"We will earn interest and help our kababayans or overseas Filipino workers in Europe to keep their jobs by helping their economies survive the current turmoil," said Gunigundo. "If Europe's economy falls, our OFWs in the region will lose their jobs not to mention our exports will also fall."

Gunigundo said that while the Philippines does have its own problems, "we should have a global perspective considering that what happens in Europe will be felt in other regions such as Asia and the US."

Philippines with other 19

The country is one of an additional 12 that contributed to new crisis-fighting funds now amounting to $456 billion, the IMF said in a statement. The latest level is up from the $430 billion committed last April.

"Countries large and small have rallied to our call for action, and more may join," the statement quoted IMF Managing Director Christine Lagarde as saying.

The Bangko Sentral ng Pilipinas (BSP) said the country wanted to help promote global economic and financial stability.

"The BSP's commitment to the Fund's bilateral borrowing facility is the Philippines' show of support...," central bank Governor Amando M. Tetangco, Jr., said in a text message.

The new pledges to boost IMF resources were made during a recent G20 meeting in Los Cabos, Mexico, although the Philippines is not part of the group of major economies.

"Having facilities such as this in place does not indicate -- one way or the other -- that the view is such that the situation can worsen," Mr. Tetangco noted.

"Rather, prudence dictates that the best time to have safety nets in place is when you don't need them yet. The facility is there when it is needed," he added.

The Philippines is a participant in the IMF's Financial Transactions Plan (FTP). From the country's contributions, the IMF drew down 96.4 million special drawing rights (SDR) or approximately $148.9 million as of the end of last year.

Participation in the FTP since 2010 paved the way for the country' admission to the IMF's New Arrangements to Borrow (NAB) facility. The Philippines' commitment under this facility amounts to 340 million SDRs or about $524 million.

As of April, the IMF had drawn 34.7 million SDRs or $53.5 million from the NAB commitment to extend assistance to Portugal and Greece.

Dennis Botman, IMF resident representative, also welcomed the Philippines' new commitment.

"The [Philippine] government has made a generous contribution to the global firewall and the IMF is impressed by, and indeed grateful for, the strong support demonstrated by the Philippines," he said in an e-mail.

"This commitment will greatly help the collective endeavor to rekindle growth, restore confidence, and create jobs to put the global economy on the path of sustained recovery." Earlier this year, IMF made the call for additional resources to deal primarily with the euro zone debt crisis and its possible spillover.

BSP chief: $1B loan to IMF will earn interest, goodwill

Having near record-high foreign reserves of $76 billion, the Philippines is "capable of lending $1 billion" that will earn interest while helping other countries beset with financial problems, Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. pointed out Wednesday.

 "The Philippines is supporting the global efforts to stabilize the world economy and maintain it on a growth path.  This is the reason why the Philippines is extending a $1 billion loan to the IMF," Tetangco said in a statement.

 "We are a member of the global community of nations and it is also in our interest to ensure economic and financial stability across the globe," he added.

 This pledge to the IMF fund marks the third time that the country has extended a helping hand to other countries that were in troubled fiscal waters. In the past months, the country pitched in for a fund to assist troubled European economies and another buffer fund, the Chiang Mai Multilateral Initiative.

Getting used to being a creditor nation

Tetangco recalled that the Philippines was an IMF borrower for 40 years until 2006.

"We finally fully paid our loans to IMF in December 2006 as the implementation of continuing reforms have made our economy stronger. Today, our economic fundamentals are sound, our banks are able to meet domestic credit needs, and we are capable of lending $1 billion from our international reserves to the IMF," the BSP chief noted.

At the G20 Leaders' Summit in Los Cabos, Mexico, IMF managing director Christine Lagarde thanked the countries " large and small (that) "have rallied to our call for action, and more may join."

"I salute them and their commitment to multilateralism. As a result, total pledges have risen to US$456 billion, almost doubling our lending capacity," she said.

Lagarde explained that "(t)hese resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members. They will be drawn only if they are needed, and if drawn, will be refunded with interest." 

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Illegal China-bound 50,000 tons iron ore seized - Philippine Authority

[image from: Wikipedia]

Philippine authorities seized a huge amount of iron ore intended to be smuggled to China, as part of a long-running battle against illegal miners.

The 50,000 tons of iron ore, believed to be worth more than $2 million, were found stockpiled near a private wharf at a coastal mining town in the eastern province of Camarines Norte, mines bureau head Leo Jasareno said.

A cargo ship was seen anchored at a distance, and it was believed to be waiting for the ore to be loaded when the raid happened.

"The shipment was supposed to go to China and they were clearly intending to smuggle it out."

Jasareno said the ore was extracted illegally because the mining companies involved did not have a mineral export permit, adding one was suspected to be a front for a Chinese firm.

Initial estimates by the bureau's experts placed the shipment's value at $50 per metric tonne, or $2.5 million, he added.

The Chamber of Mines of the Philippines last year warned of Chinese companies using Filipino fronts to take advantage of a law reserving small-scale mining for locals.

The seizure last week came four months after the government deported eight Chinese nationals caught working illegally for a mining firm. More than 100 other Chinese have been detained for similar offences over the past two years.

In 2010, a diplomatic row broke out between Manila and Beijing after police detained but eventually freed 80 Chinese found working illegally at a mine site on the main island of Luzon.

The Philippines is believed to have some of the biggest mineral reserves in the world. The government estimates the country has at least $840 billion in gold, copper, nickel, chromite, manganese, silver and iron.

But the mining industry remains relatively small because of laws that discourage investment and a very strong anti-mining lobby led partly by many activists.

Hitching production in China

About 98% of iron ore is used to make steel - one of the greatest inventions and most useful materials ever created.

This very important element is also used for the metallurgy products, magnets, high-frequency cores, auto parts, paints, printing inks, plastics, cosmetics (eye shadow), artist colors, laundry blue, paper dyeing, fertilizer ingredient, baked enamel finishes for autos and appliances, industrial finishes. Black iron oxide: as pigment, in polishing compounds, metallurgy, medicine, magnetic inks, in ferrites for electronics industry.

In 2010, China led the for the highest iron ore production with an estimated of 900 million metric tons resulting to the fast getting scarce of the local resources and currently needs to import the materials from around the world to meet its demand.

With the rising demand of war weaponry, electronic products and high end technology equipment, iron ore demand will also keep rising. 

The getting scarce of natural resources of china will push their government to continue expanding going south or particularly the Philippines which is remained as the world's largest unexploited mineral reserves.

Scarcity of iron ore as a raw material of the production would hinder to produce a product because it is a no substitute element.  Recycling could be suitable but with the high demand, it could not meet the demand for mass production and it would hamper the output. In absence of this element, china could not produce valuable products needed to sustain and to save their downward trend economy. 

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6 countries Aircraft Supplier will deliver 12 +6 fighter jets to Air Force by 2013

The Philippines Air Force will acquire 12 fighter jets and 6 other fixed-wing aircraft by 2012

18 Aircraft for the Philippine Air force could be delivered to the Philippines by 2013 according to Defense Assistant Secretary Patrick Velez. The jet fighters and fixed wing aircraft would be acquired from suppliers from 6 countries that are based from

1. South Korea
2. Italy
3. United Kingdom
4. Russia
5. Brazil
6. USA

Each jet costs about ₱1.2 billion peso or $28.4 Million USD, he added.

Velez said the six fixed-wing aircraft will be used to boost the military's counter-insurgency operations.

"These (six air assets) will replace the aging OV-10 Broncos (of the Air Force)," he said.

Officials are still finalizing details of the six air assets, which may be acquired from the United States, South Korea and Brazil.

Meanwhile, the Air Force expects for the delivery of the other armaments upgrade until 2016 for the following:

• 6 surface attack aircraft and lead-in fighter trainers
• Long-range patrol aircraft
• One air defense radar
• Special mission aircraft

Earlier, the Air Force said two of its cargo planes undergoing repairs are expected to be ready for operation by October 2012.

Previously, Air Force commander Lt. Gen. Lauro de la Cruz said the repair of a C-130 plane would be completed by July 2012, while the other aircraft would be rolled out in October 2012.

The two cargo planes would complement the lone C-130 aircraft of the military – a C-130 Hercules aircraft – which is being used to carry supplies and troops.

Four brand-new combat utility helicopters are also expected to arrive in November 2012.

The four constitute the second batch of Sokol combat utility helicopters acquired from Polish company PZL Swidnik SA.

The first four Sokol helicopters arrived last February. The acquisition of the eight helicopters cost ₱2.8 billion, including support equipment, spare parts and training.

A 2010 report by the Commission on Audit (COA) said the Air Force "virtually has a non-existent air deterrent capability" due to aging air assets.

As of 2010, only 27% of all air assets 91 of the 339 aircraft in the Air Force inventory are full mission-capable, 24% or 81 units are inactive and the rest are for disposal, COA added

As of 2010 for the total 339 Aircraft of the Philippine Air force

• 91 units – Mission Capable
• 81 units – Inactive (For repairs and others)
• 167 units – For disposal (Vintage WWI assets /Junk)

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CPP NPA Accused Aquino Not disclosing USA-PHL signing comeback in Clark Military Base

Old Image of the Clark Airbase from aviationspectator.com: An air to air left underside view of an F-4 Phantom II aircraft from the 3rd Tactical Fighter Wing, Clark Air Base, Philippines, and a Thai air force F-5F Tiger II aircraft in formation during the joint Thai/US Air Force Exercise COMMANDO WEST VIII. Both aircraft are armed with AIM-9 Sidewinder missiles.

Aquino trip paved the way 'for return of US military base' in Luzon

Philippines President Benigno Aquino should reveal the alleged signing of an agreement that gives docking and landing rights to ships and aircrafts of the United States at the former US bases in central Luzon, sources said.

President Aquino is "obliged by national interest to reveal the truth about his agreement with Gen. Martin Dempsey," chair of US Joint Chiefs of Staff, who was at Malacanang, the presidential palace in early June, prior to Aquino's official visit to meet US President Barack Obama in Washington DC on June 8, Fernando Hicap, national chairperson of Pamalakaya, an organization of fisherfolk, told the Star.

Aquino allegedly paved the way "for the virtual return of US military bases in Central Luzon," the 47-year old Communist Party of the Philippines (CPP), said in a statement on June 6.

The agreement was to "to give the US military unrestricted prerogative to make use of the naval and airport facilities of its former military bases in Clark, Pampanga and Subic, Zambales [both in central Luzon]," the CCP claimed.

The CPP quoted the alleged agreement as saying that US naval ships and military aircraft can use facilities only with "prior clearance from the Philippine government".

"It is an insignificant caveat" to make the government appear to have the right to assert its sovereignty, the CPP said.

The agreement could mean "deployment of large numbers of American troops, naval warships, aircrafts, drones and other military facilities on a level unprecedented since the 1946 Military Bases Agreement was rejected [by the Philippine Senate] on September 17, 1991," the CCP warned.

It could also mean weakening of the "Philippines to exercise an independent foreign policy" and the "Philippines' sovereign right to choose its friends and enemies," the CPP added.

This will allow the US "to use the Philippines as a staging platform for its interventionism, power-projection and hegemony-building efforts in the Asia-Pacific region, in outright violation of Philippine sovereignty," said the CPP.

If the agreement really exists, "the entire country is in danger of becoming an even larger American military base," Eleanor de Guzman, deputy secretary of Bayan, a leftist political party, told Bulatlat, a news website.

Roots is the China's invasion

The tightening grip of alliance between the Philippines and USA is largely influenced by the China's interest to control majority of the Philippine waters in the West Philippines Sea (South China Sea).

With the Scarborough Shoal Standoff between China and the Philippines 120 Nautical Miles off the Philippines Island Luzon make the Philippines lawmakers who voted out the USA Military base of the Philippines in 1991 was a big mistake.

Philippines Senator Juan Ponce Enrile one of the law makers who voted and ousted the largest American Airbase in the Pacific voiced out that Alliance between USA, Australia and the Philippines is very important to counter China's aggressive expansion towards the Philippines territory and must welcome the Visiting Forces Agreement (VFA) Australia and more strengthen the Balikatan for USA and the Philippines.

Philippine leftist and activist protesting, vandalizing and breaking the US emblem in the US Embassy Manila to show against the recent US-PHL Balikatan exercises while China and the Philippines face-off in the Scarborough Shoal of the Philippines Waters in Zambales Province.

The highest level of incidence in the seas is he Standoff of between China and the Philippines in Scarborough Shoal (Panatag Shoal) making the incident a highlight around the world.

Though china refused from internationalizing the dispute of the West Philippines Sea, the world seen it as china's belligerents in action in the waters of the ASEAN countries.

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