EU Cargotec Crane maker seen Growth Business in the Philippines

EUROPEAN crane maker Cargotec, which partnered with local automotive body builder Centro Manufacturing, expects brisk business in the Philippines, with developments in mining, construction, infrastructure and agriculture expected to kick up its sales.

"We have seen the positive economic indicators and we have reason to be optimistic that the Philippines is going to outpace its Asian neighbors in terms of economic growth in the next few years," Jan Vink, Cargotec Business Support manager for the Asia-Pacific region, said in a statement.

Vink said at the rate that the economy is expanding, various industries in the country will be in need of industrial and truck-mounted cranes, tail lifts, hooklifts and even garbage compactors to sustain their growth.

Cargotec, which manufactures Europe's leading crane brand Hiab, entered the market through Centro.

Vink said industries, such as mining, construction, infrastructure and agriculture, will drive the country's sustained economic growth.

"Factor-in increased government spending in infrastructure and an economy growing at a brisk 6.4 percent in the first quarter alone, these are reasons enough for us to invest on developing the Hiab brand aggressively in the Philippines with Centro as our business partner," he said.

Raphael T. Juan, Centro president, said a lot of positive macroeconomic indicators and policy changes, including the issuance of an executive order that clarified mining issues, will lead to increased economic activities in the industries that Centro and Cargotec are serving.

"The government has committed to continue with its heavy investments in infrastructure, driving a 6.6-percent growth in the construction industry. The road map for the Philippine auto industry will soon be issued. The commodities that flowed through the Philippine transport system increased by 4.7 percent last quarter. All these are positive indicators that Cargotec has seen before deciding to enter the Philippine market," he said.

Business Mirror 

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Basketball Smart Gilas Pilipinas Conquered Chinese Taipei Hailed

MARCUS Douthit (right) and Sol Mercado will play pivotal roles when Smart Gilas plays the US today. PBA.COM

TAIWAN– Philippine Basketball' Smart Gilas conquered Chinese Taipei in its home floor in a follow-up to its upset of Iran the last night, assuring itself of a tie at the top at the close of the 34th William Jones Cup at the TPEC Gymnasium.

Philippines' Team up against a talented enemy in very hostile territory, Smart Gilas-Pilipinas got an unlikely lift from the smallest man on the floor and moved within another win of ruling the Jones Cup basketball championship.

LA Tenorio, a 5-foot-8 guard who's struggled in this tournament big time, hit all 11 of his points in the fourth quarter and powered the Filipinos to a 76-72 victory over Taipei-A on Saturday before a raucous hometown crowd at the Taipei Physical Education College gym here.

 Tenorio, who has been bullied around in past games by taller, beefier guards, hit three triples in succession in the early part of the fourth period to give the Philippines the buffer it needed to cushion a hard Taiwanese finish.

 The Filipinos, who were together as a team for less than a month, rose to 6-1 with the victory and would need to upset the United States today in order to win the championship without any complications.

 Taipei bowed out of the title hunt after dropping to 4-3.

A firm handshake from a South Korean coach and some glowing words from members of Lebanon and United States squads clearly mirrored the respect earned by Philippine' Smart Gilas II after sending erstwhile unbeaten Iran crashing back to earth in the William Jones Cup Friday (August 24, 2012) in Taipei, Taiwan .

After steering Philippines' Gilas to a 77-75 win over the defending champions, coach Chot Reyes was met by Sang Beom Lee, the Korean coach, in the corridor leading to the media room to shake his hand.

Asian power Iran lost for a second straight night and the US team suffered a second upset as they fell to joint second place with Korea at 5-2, a game behind the Philippines.

Sweet-shooting forward Elie Stephan strung up nine triples and a total of 27 points while Jarrid Famous tossed in 17 markers and grabbed 12 rebounds as Lebanon stunned the US five, 70-67.

Korea, meanwhile, pounced on a weary Iran team for an 82-73 victory.

The Filipinos wrap up the championship without any complication if they beat the Americans in their game.

Iran plays Jordan and Korea takes on Chinese Taipei in the other key matches.

"At least with this win, we have our fate in our hands. We have had a good tournament so far, and we have to make it a great tournament tomorrow (today)," said coach Chot Reyes whose team is a win away from handing the country a first Jones Cup crown in 14 years.

"Obviously, the game against the US is for the championship, for all the marbles. The US team is tall, quick and very athletic. We need to find a way to stay with them," Reyes also said.

The Americans catch up with the Filipinos if they win, and any tie will be resolved by the quotient tiebreak system. Iran and Korea are the other teams that can still tie the Philippines.

Tenorio had his breakout game and emerged Gilas' man of the moment as he fired away three straight treys and scored a total of 11 points in the fourth quarter.

The Taiwanese had seized the momentum in the tight, exciting game, wiping away a seven-point deficit when Tenorio came through with his heroics disappointing the cheering home crowd.

Chan took charge earlier, knocking in four triples and a total of 14 markers as the Nationals sat on a 37-29 cushion at the half.

"I thought Taipei did a good job covering our shooters. But in doing that they gave up something and that's LA (Tenorio)," said Reyes.

The two teams actually engaged in a shootout with the Philippines going 11-of-26 from the three-point area as against Taipei's 10-of-27 clip.

The Taiwanese put up a tough fight with their constant motion offense and crisp shooting.

They had no answer on Tenorio in the end though.

Praises for Smart Gilas Pilipinas

Taiwan Local sportswriters had nothing but good words for the Filipinos. "That's the real Smart Gilas II squad. Very smart and very good," said one scribe.

In a complete turnaround from a team that was beaten, 92-71, by Lebanon the day before, the Nationals played with fire and passion with Marcus Douthit providing the power underneath and Gabe Norwood and Jeff Chan striking from outside.

Lebanese coach Ghassan Sarkis was not surprised with the result.

"I'm happy for your team for beating Iran. I know how good your team, you have a good coach and very smart players," said Sarkis.

While Gilas got raves from almost everybody, Iran was not impressed.

Leading scorer Samad Bahrami criticized the referees for their inconsistent calls, insinuating that the Filipinos got special treatment.

"The winner of this game is not true. We beat Lebanon by a big margin and Lebanon also beat them by a big margin, so there's a big difference," Bahrami said.

Iranian coach Mostafa Hashemi butted in: "We lost to ourselves."

Iran's arrogance did not sit well with some Lebanese officials.

"We also once beat them and they complained a lot. They think they're more superior and unbeatable. Some of their players were arrogant," one Lebanese player said.

The Iranians have gotten the ire of the crowd for their repeated complaints against officiating.

Meantime, Americans Gerard Anderson and Jermaine Dearman expect a close and exciting showdown with the Nationals when they clash today in what could be the championship match for the Gilas – granting it won over Taiwan A last night.

"It's going to be a good game, we played almost the same basketball only that they (Gilas) make a lot of kick outs while we finish it driving," said Anderson, who expressed willingness to play in the PBA someday. "Your team is very impressive."

Gilas is locked in a three-way tie for the lead with Iran and US at 5-1 with still two games left for all three teams.

To win the championship, Gilas must beat Taiwan A and US.

The Scores:

SMART GILAS-PILIPINAS 76 – Chan 14, Douthit 14, Tenorio 11, De Ocampo 11, Norwood 10, Fonacier 5, David 5, Mercado 4, Thoss 2.

TAIPEI-A 72 – Wen 18, Tsung 16, Chai 11, Lei 9, Hsueh 8, Cheng 5, Shih 3, Tai 2, Hsin 0, Chih 0, Yi 0.

Quarters: 16-all, 37-29, 54-56, 76-72

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Philippine Ambassador to China, North Korea & Mongolia suffers stroke

Ambassador Sonya Brady for China, Mongolia and North Korea

Philippine Ambassador to China,  North Korea & Mongolia Sonia Brady suffered a stroke in Beijing this week.

"Ambassador Brady suffered a stroke and is hospitalized where her condition is being monitored closely," Foreign Secretary Albert del Rosario confirmed Brady's condition in a text message to VERA Files.

An official statement released by DFA Spokesman Raul Hernandez late (August 24, 2012) Friday evening said:

"Ambassador Sonia Brady was brought to the hospital last Wednesday after she passed out in her residence in Beijing. She is undergoing tests and waiting for the results. Her condition is stable but she is under observation. "

"She is better now than when she was brought to the hospital last Wednesday," Hernandez added in a later text advisory.

Brady, who turned 71 on Wednesday, the day she was brought to the hospital, had just recovered from a mild stroke when she was named ambassador to China last May at the height of the standoff between Philippine and China maritime vessels in Panatag shoal.

Aside from China, North Korea and Mongolia are also currently under Brady's jurisdiction.

She is on her second stint at ambassador to China, having served in the same position from 2006 to 2010. She was ambassador to Thailand and Myanmar before she was named envoy to China.

From 1976 to 1978, Brady served as third secretary and vice consul and was later second secretary and consul of the Philippine embassy in China.

Brady was plucked from retirement after President Benigno Aquino III's first choice, family friend Domingo Lee, was bypassed by the Commission on Appointments several times.

Brady breezed through the CA as the members recognized her experience in China and diplomacy and the urgency of the situation.   She waited only a month to be confirmed.

A career diplomat, Brady studied journalism at the University of Santo Tomas. She earned her Foreign Service degree at the University of the Philippines. She holds a master's degree in international relations from the University of Southern California in 1987.

Brady served as assistant secretary in the Department of Foreign Affairs Office of Policy and Coordination from 1999 to 2002.

(VERA Files is put out by veteran journalists taking a deeper look at current issues. Vera is Latin for "true.")

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U.S. Missile Shield Plan in Japan-Philippines Seen Stoking China Fears

The U.S. decision to expand its missile-defense shield in the Asia-Pacific region, ostensibly to defend against North Korea, could feed Chinese fears about containment by the U.S. and encourage Beijing to accelerate its own missile program, analysts say.

The new effort, which includes the deployment of an early-warning radar system, known as X-Band, in Japan—and possibly another in Southeast Asia such as Singapore or the Philippines —reflects America's deepening military and security engagement in the region after a decade focused on the Middle East and Afghanistan.

China's official response has been relatively muted so far. Zhu Feng, a leading Chinese security expert at Beijing University, said the U.S. announcement is "more likely to speed up an arms race."

A senior U.S. official acknowledged that the Pentagon faces a hard sell convincing China's People's Liberation Army that the missile-defense architecture isn't designed to encircle them. "It sure looks like containment," the official said.

U.S. State Department spokeswoman Victoria Nuland said the missile defenses aren't directed at containing China.

At a news conference Friday, Japan's defense minister Satoshi Morimoto confirmed that Tokyo and Washington "have had various discussions over missile defenses, including how to deploy the U.S.'s X-Band radar system." He added the government needed "a little more time" before disclosing details.

US Radar system installation in Europe for Iran's Missile System

The news of the U.S. plans, reported in The Wall Street Journal earlier this week, strikes a nerve in a region concerned about the growing assertiveness of China.

Many in Japan feel the nation should beef up its own defense capability and strengthen cooperation with the U.S. in the face of China's military expansion and North Korea's nuclear ambitions. India is alarmed about China expanding its naval presence in the Indian Ocean. Vietnam, meanwhile, is building stronger ties with the U.S. Navy, while the Philippines, too, is reviving its security relationship with Washington amid a series of territorial disputes with China in the West Philippines (South China) Sea.

However, security analysts say the strategy risks further antagonizing Chinese leaders, who are already under pressure from vocal nationalists to defend the country's strategic interests.

"China will make a meal of this politically. To them it underscores their propaganda points about the pivot to Asia revealing America's Cold War mentality, that its purpose is to contain China," said Carl Thayer, an Asian security expert at the Australian Defence Force Academy in Canberra.

China's Ministry of National Defense hasn't commented directly on the antimissile plans, but Thursday sounded a cautious note, saying, "China has always believed that antimissile issues should be handled with great discretion, from the perspective of protecting global strategic stability." China's Foreign Ministry separately echoed the sentiment.

China is developing sophisticated new missiles, including those potentially capable of striking U.S. aircraft carriers operating in the Asia-Pacific. Those efforts are in part aimed at denying regional access to the U.S., which could complicate Washington's efforts to defend Taiwan in the event of a conflict.

Analysts say China may now be tempted to churn full speed ahead with this program in an effort to overwhelm an enhanced missile defense with firepower.

"Attempting to overcome this reality would risk entering the U.S. into a race that it could not afford to wage, let alone win," wrote China security analysts Andrew Erickson and Gabe Collins in a commentary for The Wall Street Journal.

The senior U.S. official said that while the system could be overwhelmed by a large-scale Chinese attack, U.S. missile-interceptors guided by the X-Bands could repulse a more limited strike, protecting U.S. bases and ships. "You don't need to be 100% effective in order to create a situation where the other guy has to change his calculus," the U.S. official said.

Japan has mixed emotions about the nation's defense and its long-standing security alliance with the U.S. Finding a home for the X-Band radar won't be easy because of the growing grass-root opposition to the American military presence in Japan.

Japan already hosts an X-Band radar in the northern prefecture of Aomori. At the time it was installed in 2006, it faced concerns from local residents who feared presence of the radar would make them a target for potential enemy attacks. Others were opposed to the arrival of more U.S. personnel to man the facility.

The Pentagon says North Korea is the immediate threat driving decision-making on missile defense.

South Korea's Foreign Ministry declined to comment on the missile-defense plans, which follow a provocative rocket test launch by Pyongyang in April. The rocket, which the North Koreans said would deploy a satellite into space, crashed minutes after takeoff.

Pyongyang previously launched long-range missiles in 2006 and 2009, both of which also crashed soon after takeoff. U.S. intelligence agencies have long held that North Korea could have a missile capable of reaching the U.S. as early as 2015 or 2016.

Some U.S. defense officials have said a third X-Band radar could be positioned in the Philippines, which would potentially help Washington and its allies more accurately track ballistic missiles launched from North Korea and part of China.

Raul Hernandez, assistant secretary at the Philippines Department of Foreign Affairs, said the Philippines hasn't been approached by the U.S. over basing an early-warning radar station there.

Some analysts warn that the U.S. plan may further destabilize a region that faces volatile territorial disputes, competition for resources and growing nationalism.

It may also force governments in the region to make uncomfortable choices. Sumathy Permal, a senior researcher at the Centre for Maritime Security and Diplomacy at the Maritime Institute of Malaysia, said that Malaysia values close ties with both the U.S. and China. "Malaysia may not want to upset either," she wrote in an email.

Lora Saalman, a Beijing-based researcher at the Carnegie Endowment for International Peace, said that the X-Band radar issue "cuts to the heart of China's overall military modernization and role in Asia."

However, she said a land-based X-Band radar is potentially somewhat less concerning to the Chinese than a sea-based one that could be more difficult for China to evade.

"So this land-based X-Band radar is not entirely a worst-case scenario for China," said Ms. Saalman.

—Adam Entous and Julian E. Barnes in Washington, Kwanwoo Jun in Seoul, P.R. Venkat in Singapore and Celine Fernandez in Kuala Lumpur contributed to this article.

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Philippine Investment Grade Credit Rating is on the Air

 

Finance Secretary Cesar V. Purisima and National Treasurer Roberto B. Tan led the Philippine delegation in meeting with banks and investor groups in Singapore on Aug. 21 and 22, the Investor Relations Office (IRO) said in a statement on Friday.

Also in the team were Bangko Sentral ng Pilipinas Assistant Governor Cyd Tuaño-Amador and IRO Executive Director Claro P. Fernandez.

"The Philippine government's economic team provided an update on the fiscal and macroeconomic situation of the Philippines, as well as on the milestones of the Aquino administration's governance reform agenda," the statement read.

Among these were the ₱760.92 billion in government revenues in the first semester, up by more than a tenth from the previous year, as well as the foreign exchange reserves which hit a record high $79.35 billion in July. Remittances from overseas Filipino workers also hit $10.13 billion in the first half, climbing 5.1% against yearago levels.

"The economic team highlighted that the consistent strong performance of the Philippine economy was achieved against the backdrop of continued global economic volatilities," the statement read.

"Despite the debt crisis in Europe, economic slowdown in China, and weak consumption in the US, the Philippines is structurally well positioned to sustain its growth," it continued.

The Philippines' credit rating momentum was another focal point in the meetings, especially as country bagged positive actions from Standard & Poor's (S&P) and Moody's Investors Service.

Just last month, S&P upgraded the Philippines' credit rating to BB+ from BB, taking the country to just one notch below investment grade. This is aligned with the BB+ credit rating granted by Fitch Ratings in June 2011.

In May, Moody's also raised its outlook on the country's Ba2 credit rating to positive from stable, indicating that an upgrade is likely in the next 12 to 18 months. The Moody's credit rating is the Philippines' lowest at two notches below investment grade.

"Given that the cost of protecting Philippine bonds against default for five years is lower than some investment-grade countries such as Russia, and considering that two out of the three major credit rating agencies rate the country one notch below investment grade, Secretary Purisima emphasized that the Philippines can clearly make its case for an investment grade status," the statement read.

"The reception was very positive throughout the investor presentations, with investors recognizing the strong performance of the Philippine economy... " it continued.

The Singapore roadshow followed a tour of the United States last June. This roadshow was supported by global banking giants Citigroup Inc., the Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc, ING Group, JP Morgan, Morgan Stanley and UBS AG.

Business World Online

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EPC Bidding Invitation- Cebu Bus Rapid Transit (BRT)

Proposed BRT running ways down middle of road with median stations

Bidding for Bus Rapid Transit (BRT) system for Cebu has moved forward with the Department of Transportation and Communications (DoTC) seeking proposals on Friday for project design and construction supervision.

The agency said in an invitation published in newspapers that the Cebu BRT, which is eyed to operate by 2015 with an estimated capacity of 330,000 passengers, "is a transport system with around 176 buses that will run through the dedicated and exclusive bus-ways from Bulacao to Talamban in Cebu, with a link to Cebu's South Road Property."

Business districts, residential areas, shopping centers and noted tourist locations will mark the bus routes, according to the invitation, with "33 stations along the corridor and a bus will be made available at each station every 2-5 minutes."

The DoTC said international and local consultancy firms may submit proposals for the project, which will have two phases.

The engineering, structural, civil and mechanical design will form the first phase, while the second phase 2 will comprise the "supervision of the transit way and the supporting infrastructure during the construction."

The DoTC media relations department, meanwhile, said the contract to build "will be [auctioned off through] another bidding," while the BRT system will be operated by the agency and the local government of Cebu.

Interested groups should have the following qualifications, according to the announcement:

"Should have been in the construction design and supervision business for a minimum of 10 years prior to the issuance of this request for expression on interest,"

"Have completed at least two similar contracts in combination of phase 1 and phase 2 within the last five years"; and

"Must also comply with the World Bank's policy on conflict of interest" as the agency intends to apply for financing from the Washington-based lender to finance, in part, the cost of the system and consulting services.

DISASTER RESPONSE EQUIPMENT

In a separate notice also published on Friday, the DoTC is soliciting bids for ₱152 million worth of disaster response equipment for the Philippine Coast Guard (PCG), in addition to the ₱521 million worth of equipment procurement for the same agency that it rolled out last month.

"This procurement will ensure that the national headquarters of PCG will have an additional 40 rubber boats and three M35 6x6 trucks while each of the 12 PGC district offices will also have one M35 6x6 truck," the bidding notice read, adding that the equipment "will be used to facilitate timely response to disaster situations."

The DoTC has pegged its budget for the 15 units M35 6x6 truck at ₱120 million. Pre-bid conference has been set for Sept. 6 while submission of bidding documents, which may be acquired at ₱20,000 apiece, will be on Sept. 18 at the PCG office in Port Area in Manila.

The agency, meanwhile, has allotted ₱32 million for the 40 units of rubber boats. Bidding has been set for Aug. 24 also in the port area, with bidding documents worth ₱30,000 apiece.

The DoTC last month invited bidders for the ₱521-million procurement of "300 units of aluminum, V-shaped hull boats, 81 units of rigid hull inflatable boats, 50 units of rubber boats, six units of jet skis, 2,586 units of common life vests, 1,724 units of flares, 862 units of VHF handheld marine radios, 862 units of life vests, and 431 units of megaphones."

Bidding was initially set for Aug. 8 but was cancelled due to the torrential rains that battered the capital early this month.

Business World Online

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Thousands to take PMA exam Sunday Aug 26, 2012 Walk-in Accepted

Thousands of aspiring military cadets will flock testing centers on Sunday (August 26, 2012) for this year's Philippine Military Academy (PMA) entrance exam, the Armed Forces of the Philippines (AFP) said.

As of August 18, the PMA has already recorded 12,500 applicants who are expected to gather at the 37 testing centers nationwide, according to the AFP Public Affairs Office.

The PMA is also expecting 3,000 to 5,000 walk-in applicants during the examination day. Last year, a total of 15,873 aspiring soldiers took the test, wherein a total of 1,120 passed while a selected 123 rose as appointed cadets.

But the academy is also expecting the number of applicants to increase after the minimum height requirement for cadets was changed by the institution.

The minimum height requirement has been lowered to 5'0" both for male and female. Previously, aspiring male cadets should be at least 5'4" in height while female applicants should be at least 5'2."

"The widening of the pool of cadet candidates assures a deep-selection of those who possess the qualifications PMA is looking for in its cadets," PMA Superintendent Major General Nonato Peralta Jr. said.

He added that the academy's Non-Maltreatment Policy towards newly-accepted cadets would also motivate applicants to pursue their military aspirations.

"Also, with the staunch and resolute commitment of the Academy to eradicate hazing in the cadet corps, PMA is geared towards providing a more responsive and relevant training environment that is people-centered and observant of human rights," Peralta said.

Another factor that would encourage students to consider a career in the military is the AFP Modernization Program backed by the present administration, according to General Jessie Dellosa, AFP Chief of Staff.

"We hope that with the significant headways in our modernization and capability upgrade program, more youths who aspire to be in the military service particularly those who dream of becoming professional soldiers, pilots and sailors will be motivated to take the examination," Dellosa said.

In his latest State of the Nation Address, President Benigno Aquino III, who is also the AFP Commander-in-Chief, said that his two-year-old government has already poured a total of P28 billion into the AFP Modernization Program. The amount will soon match the P33 Billion set aside for the program in the past 15 years.

Aquino said that if the proposed AFP modernization bill is passed in Congress, the government will be able to allocate P75 billion for defense within the next five years.

The AFP said it is now acquiring equipment listed in its Medium Term Acquisition Plan covering the years from 2013 to 2017. The institution added that this year's successful applicants who will compose the PMA Class of 2017 would be the first beneficiaries of AFP's future defense acquisitions.

An aspiring PMA cadet must be a natural-born Filipino citizen, physically fit, single and has never been married.

The applicant should be at least a high school graduate and at least 17 years old but not a day older than 22 years on April 1, 2013. He or she should also have no administrative or criminal case.

Successful applicants will be received officially on August 1, 2013 at the PMA Campus in Fort Del Pilar, Baguio City. PMA graduates are guaranteed an officer in the Army, Air Force, or Navy.

"We hope that more Filipino youth will be motivated to face the greater responsibility of serving our country and better practice the principles of patriotism, nationalism and discipline that can be best learned from the military training," Dellosa said.

Sunstar 

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$1.8 Billion Philippines defense upgrade preparation for the next Battlefield -The West Philippine South China Sea

Tensions are rising again in Southeast Asia as competing claims over the resource rich West Philippines (South China) Sea push closer to boiling point.

In the latest series of provocations, China launched "combat-ready" patrols, offered disputed ocean blocs for sale and set up a garrison and new administration on Sansha. Vietnam countered with continued military overflights of the contested Spratly Islands despite warnings from Chinese officials.

With Philippine President Aquino announcing a $1.8 billion upgrade in defense forces the inevitable regional arms build-up has begun.

One would hope that countries in the region would take concerted action. That hope would be misplaced.

While the region shudders at the thought of open conflict affecting a major artery of Asian trade, no collective action has been able to resolve the situation. ASEAN couldn't even reach agreement on a routine joint public statement at the end of their annual gathering this year. Not that another non-binding piece of paper would have had any real influence. A 2002 Code of Conduct signed by ASEAN members and China to resolve the disputes peacefully continues to be ignored as countries vie for potentially lucrative natural resources.

An increasingly militarized land and sea grab continues despite calls for peaceful resolution. With the U.S. in full Asian tilt, the South China Sea dispute is shaping up to be the first major test of its Pacific re-engagement. What the U.S. Can or should do remains woefully undefined.

There is no longer any question that as the power vacuum expands, force, not the power of the pen defines boundaries. Beijing increasingly asserts its claims within a map of its own making while a troubling and influential undercurrent gathers momentum.

China now claims the entire South China Sea, brushing the shores of its neighbors and flying in the face of international norms. Call it the conventional "first-strike" option supported by influential Chinese think tanks and the popular state-controlled press—quick and decisive military engagement to convince Vietnam and the Philippines to back down. It worked in China's favor during a 1974 stand-off over the Paracel Islands.

Enter the U.S., seen by many as a natural hedge against excessive Chinese influence. The State Department issued a lukewarm statement on the South China Sea urging all parties to find a peaceful solution to the impasse. Senator McCain called China's moves "provocative."

Beyond routine drills and port calls with the Philippines, Vietnam and India the U.S. has taken a decidedly cautious approach. Peaceful resolution of territorial claims and a unified Southeast Asian response, not a military confrontation with China, remains a core U.S. foreign policy objective. That may be increasingly difficult to achieve as China presses its claims, recently "escorting" an Indian naval flotilla from its port call with Vietnam and hailing it with "welcome to Chinese waters."

US Military Position when China attack the Philippines

In June Philippine President Aquino sought reassurance that U.S. defense obligations would kick-in should they be attacked. The U.S. refused to take sides in the territorial dispute, a long standing policy, but reaffirmed its commitment to the bilateral Mutual Defense Treaty. At a minimum this entails immediate consultations should hostilities break out. It does not, however mean automatic military action.

Even interest from the rest of Southeast Asia for greater U.S. engagement remains tentative. Vietnam continues joint exercises with China, keen to maintain balance with its main trading partner to the north. Non-claimant states including Thailand, Singapore, Cambodia, Indonesia and Laos have shown no interest in "taking sides", though U.S. engagement is certainly welcome. For its part China has been quick to use trade retaliation including a sudden technical hold on Philippine fruit imports, banning million of Dollars Philippine Banana rotting in its gate-port of entry.

If history is any guide the unintended consequences of even a limited military skirmish may prove hard to control. The situation remains even more volatile with a leadership transition underway in Beijing as nationalistic and even jingoistic tendencies rise throughout the country. Appeasement also has its discontents. This is the fine line the U.S. must tread.

There are no signs that the cycle of provocation and push-back will end any time soon. It should be no surprise if boat ramming incidents between fishing vessels and cutters eventually turn more confrontational. Perhaps the greatest U.S. influence will be containing any escalation by its presence alone, helping to thwart the notion that China can launch a limited attack on its neighbors without consequences.

Despite China's preference the U.S. can and will remain a Pacific power, guarantor of the common interest, strengthening cooperation among parties, and routinely testing free access to international waters.

Southeast Asia should not overestimate this involvement and under-prepare itself thinking that their fishing fleets or contested boundaries will fall under U.S. protection. All countries in the region need to develop their own capabilities while engaging in greater regional military cooperation. The U.S. should be seen as the military of last resort, not first. At the same time China should not underestimate U.S. resolve to maintain the peace.

 

Brian P. Klein, Contributor

Brian P. Klein, Contributor is a writer and global strategist focusing on macroeconomic, geopolitical, and security issues. He has served as a U.S. diplomat in China and India.

BUSINESS INSIDER 

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Sereno Named As First Woman Philippine Chief Justice

Taking the seat that Chief Justice Renato Corona vacated is Associate Justice, now Supreme Court Chief Justice Maria Lourdes Sereno.

CJ Sereno has been appointed by Philippine President Benigno "Noynoy" Aquino III on August 24, 2012.

CJ Sereno hails from the University of the Philippines and is now the first woman to take the position as Philippine Chief Justice.

Aside from that, the 52-years old Sereno is currently the youngest appointed justice in the history of the Supreme Court.

Below is the official statement of the Philippine government as published in the Official Gazette.

Statement of Presidential Spokesperson Edwin Lacierda:

On the new Chief Justice of the Supreme Court of the Philippines

In the midst of this period of deep mourning for the loss of Interior and Local Government Secretary Jesse Robredo, the President is cognizant of his constitutional duty to appoint the next Chief Justice of the Philippines. He has therefore decided to appoint Associate Justice Maria Lourdes Punzalan Aranal-Sereno as the 24th Chief Justice of the Supreme Court.

The President is confident that Chief Justice Sereno will lead the judiciary in undertaking much-needed reforms. We believe the Judicial Branch of government has a historic opportunity to restore our people's confidence in the judicial system.

Sereno appointment wins high praise from senators

At least three senator-allies of President Benigno Aquino III on Friday praised the appointment of Associate Justice Lourdes Sereno as the 24th chief justice of the Supreme Court.

"We welcome the appointment of Associate Justice Maria Lourdes Punzalan Aranal-Sereno as the 24th Chief Justice of the Supreme Court," Senator Francis Pangilinan said in a statement released Friday.

 "A well deserved appointment. The first lady-CJ," Senator Franklin Drilon said in a separate statement.

 "It's a very good choice.  [It's] a historical move and long-term [a] strategic one," Senator Koko Pimentel said in a text message to GMA News Online.

 Sereno, who was Aquino's first appointee to the Supreme Court, will serve for 18 years since the retirement age for justices is 70.  She turned 52 just last July.

Pangilinan and Drilon, who are members of Aquino's Liberal Party, said Sereno will have the "opportunity to institute reforms" in the judiciary.

 "We hope her relative youth and her passion and dynamism will invigorate the moribund and antiquated system of justice in the country. Nothing less than sweeping and comprehensive reforms will do to ensure that the crisis facing the judiciary will be overcome, and we will need the energy, creativity and stamina of a new generation of jurists to do just that," said Pangilinan.

 Pimentel, who will also run under Aquino's LP in the upcoming 2013 elections, likewise said, "Now, the chief justice cannot use the lack of time as an excuse not to be able to pursue and implement her vision for the judiciary."

 Senate Majority Floor Leader Vicente Sotto III, for his part, said that the appointment was a "presidential prerogative."

 "If she is the choice, then let's hope for a more vibrant SC and judiciary," he told GMA News Online in a text message on Friday.

 Sereno will be replacing former chief justice Renato Corona, who was unseated by the Senate in a historic 20-3 vote after a four-month trial that started on Jan. 16.

Sources: Gold Star Daily & GMA News online

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PENTAGON Missile Defense in ASIA will include the Philippines

The United States (US) is already planning an expansion of its missile defense in Asia, including the Philippines.

In a report from the Wall Street Journal, the buildup will supposedly be used to counter threats from North Korea and China.

The report said: "The expansion comes at a time when the U.S. and its allies in the region voice growing alarm about a North Korean missile threat. They are also increasingly worried about China's aggressive stance in disputed waters such the South China Sea, where Asian rivals are vying for control of oil and mineral rights."

The report quoted Congressional Research Service missile-defense expert Steven Hildreth, who said that the US is looking "longer term at the elephant in the room, which is China."

The report added that the expansion includes the deployment of an early-warning radar in the southern part of Japan.

The deployment of the so-called X-Band radar there is still being discussed, however. Earlier, both the allies already ruled out the deployment in Okinawa because of disapproval from residents.

As such, "Some U.S. defense officials have focused on the Philippines as the potential site for the third X-Band, which is manufactured by Raytheon Co. Pentagon officials said a location has yet to be determined and that discussions are at an early stage," the report added.

The Philippines have lodged several protests against China for its incursion in several disputed areas, including the Scarborough Shoal.

China earlier rebuked a senior diplomat of the US there after he raised concerns over the tensions in the disputed West Philippine Sea.

The US embassy's deputy chief of mission was even summoned to explain.

ABS-CBN News

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Philippines Snubs Chinese funds for infrastructure projects – Self suffice

Philippines is no longer going for a loan from China to fund the ₱2.7-billion rehabilitation of the Navotas Fish Port Complex, as well as Phase 2 of the P7-billion Casecnan Multipurpose Irrigation and Power Project.

"Financing the [Navotas] project using government funds is an option that we are considering," Agriculture Undersecretary for Operations Joel Rudinas said in an interview with reporters Thursday.

 "The upgrade of the Navotas Fish Port Complex has been identified as a very necessary, if not, a critical project," Rudinas added.

The Agriculture Department was looking at borrowing up to ₱2.56 billion from the China Export-Import Bank to upgrade the 35-year-old port complex.

"We figured that the required funding is not that big anyway," Rudinas said. "I suppose the Philippine government can finance it on its own," he added.

The National Economic Development Authority (NEDA) board is yet to approve the project, even though the Cabinet-level NEDA-Investment Coordination Committee approved it in May.

The Agriculture Department said it would present new financing options for the Navotas Fish Port Complex to NEDA. No date was set for the presentation.

Previously, government said it will shoulder ₱137 million for the rehabilitation of the fish port, which is expected to stabilize fish supply and prices in Metro Manila.

By improving the infrastructure for unloading, the Agriculture Department expects trade in fisheries products to increase by 60 percent to 210,806 metric tons (MT) in 2015 from the current average of 131,934 MT a year.

The National Capital Region sources 80 percent of its fish requirements from the Navotas Fish Port.

On Wednesday, Agriculture Secretary Proceso Alcala said the Philippine is also no longer interested in getting financial assistance from China for the second phase of the P7-billion Casecnan Multipurpose Irrigation and Power Project.

Manila earlier asked the Beijing for ₱5.29-billion loan to fund the project.

Instead, the Philippine government has turned to South Korea. Agriculture officials said Manila already asked for a credit facility from the Korean Exim Bank for the irrigation component of the Casecnan project.

GMA News

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July 2012 Philippines int’l reserves hit up $79.3Billion

Philippines' preliminary gross international reserves (GIR) rose to $79.3 billion as of end-July 2012, data from the Bangko Sentral ng Pilipinas showed.

This is higher by $3.2 billion than the end-June 2012 GIR of $76.1 billion.  It has already breached BSP's full-year forecast of between $77.5 and $78 billion.

BSP Governor Amando Tetangco said that the end-July 2012 GIR level could adequately cover 11.7 months worth of imports of goods and payments of services and income.

It is also equivalent to 10.7 times the country's short-term external debt based on original maturity and 6.4 times based on residual maturity.2

Short-term debt based on residual maturity refers to outstanding external debt with original maturity of one year or less, plus principal payments on medium- and long-term loans of the public and private sectors falling due within the next 12 months.

He said that the increase in the end-July 2012 GIR level was due mainly to the foreign exchange operations of the BSP, foreign currency deposits by the Treasurer of the Philippines (TOP), income from investments abroad of the BSP, and revaluation gains on the BSP's gold holdings arising from the increase in the price of gold in the international market.

 "These were partially offset, however, by outflows for the payments by the National Government (NG) of its maturing foreign exchange obligations and foreign currency withdrawals by authorized agent banks (AABs)," Tetangco said.

Net international reserves (NIR), which include revaluation of reserve assets, increased by $3.2 billion to reach $79.3 billion as of end-July 2012, compared to the end-June 2012 NIR of $76.1 billion.

NIR refers to the difference between the BSP's GIR and total short-term liabilities.

Tetangco said that the country's external payments position "continue to benefit from large OFW remittances, rising BPO earnings and the strong capital inflows."

Remittances coursed through banks during the first five months of the year amounted to $8.3 billion, higher by 5.3 percent relative to the level registered in the same period a year ago.

Fund transfers from land-based workers increased by 2.8 percent to $6.4 billion while those from sea-based workers grew by 14.6 percent to $1.9 billion.

Meanwhile, the Philippines registered lower balance of payments (BOP) surplus last June at $14 million, lower than year-ago's $222 million and month-ago's $138 million.

BOP is the difference between a country's foreign exchange inflows and outflows on a particular period and represents the country's total transactions with the rest of the world.

Last June, the central bank trimmed, among others, the BOP target for this year to $2.6 billion from $2.8 billion on account of the weak global economy.

(Malaya)

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