MarketWatch: Indonesia and Philippines come of age –Twin Economies

Confluence of positive factors laying groundwork for strong growth

During the Asian financial crisis of the late 1990s, Indonesia and the Philippines were bailed out by the International Monetary Fund.

 

This year, they showed the world how far they've come from those dark days by pledging a billion dollars each to replenish the IMF's kitty.

 

With rapidly growing economies and rising incomes, the two countries are home to a large and young labor force, an expanding middle class and have stable, elected governments with policies inspiring investor confidence. They also have sturdy banks and enough foreign exchange reserves — more than a year's imports in the Philippines's case — to rebuff a misguided run on their currencies.See: Banks in Indonesia and the Philippines flourish.

 

In an economically vibrant Southeast Asia, Indonesia and the Philippines stand out as the region's "New Tigers" with the potential to leave a bigger imprint on global growth for years to come while the developed world struggles with excess debt and traditional regional heavyweights China and India lose momentum.

 

"You have a real contrast, which is why these markets have been doing well," said Andrew Swan, head of Asian fundamental equities at BlackRock. "We've had 3 to 5 years of great growth. But because there is so much room for growth, this can go on for so many more years."

 

Each has also received credit rating upgrades since 2011, with Indonesia now rated investment grade by Moody's and Fitch. Their stock markets are among the world's best performing since the end of 2008 — Indonesian shares tripled during the period from beaten-down valuations, and are closely followed by Philippine equities.See: Global investors key into Indonesia and the Philippines.

 

Unlike the West, government finances are shipshape. Jakarta's gross government debt was 25% of GDP in 2011, and Manila's 41%, according to IMF data, leaving both enough room to boost their economies in case of need.

 

The Philippines has a current account surplus of 2.74% of its GDP, thanks to remittances from its vast diaspora. Indonesia swung to a deficit in the first half of this year as lower commodity prices hurt exports, and as imports of capital goods and machinery increased.

 

Agriculture employs at least a third of the workforce in both countries, and domestic consumption is an important driver of their economies. That protects them from external shocks to an extent — both escaped a recession in 2009, when the Thai, Malaysian and Singaporean economies contracted. But both also need tens of billions of dollars in foreign direct investment, especially to create infrastructure and pursue industrialization.

 

Stocks are more expensive than in north Asia, and the two nations are by no means immune to global shocks. But barring a post-Lehman Brothers'-like blowout crisis — in or outside the euro zone — potential reward is seen outweighing risk on balance.

 

(MarketWatch)

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Philippines double Flights –Saudi, Air France-KLM cites Philippine-EU prospects

FRANCO-DUTCH airline Air France-KLM sees traffic between the Philippines and the European Union (EU) picking up in the long run from currently limited volumes, an official said in an interview after a briefing last Friday.

 

Asked on the plan of Philippine Airlines (PAL) to revive flights to Europe next year after an expected lifting of the current ban in that bloc on local carriers, Jurriaan Stelder, the foreign airline's new general manager for South China Sea, said the move may temporarily divide market share but that traffic should pick up eventually.

 

KLM Royal Dutch Airlines is currently the only carrier offering flights to Europe under its Manila-Taipei-Amsterdam route.

 

"There could be a temporary effect, but in the end, the demand will exceed the capacity again," Mr. Stelder said.

 

"There might be a temporary drop in traffic, because indeed, the same passenger traffic between the Philippines and Europe will be there and you will have to divide it between the two; therefore it will affect us," he explained.

 

PAL President Ramon S. Ang told reporters in July that the company is looking to revive flights to Europe next year, hoping that current government efforts will succeed in removing the "significant safety concern" cited by the International Civil Aviation Organization (ICAO) in December 2009, which in turn prompted EU in March 2010 to ban Philippine carriers from flying to Europe.

 

William K. Hotchkiss III, director-general of the Civil Aviation Authority of the Philippines, said last June that he hoped an ICAO audit set for late next month will yield favorable results. He said ICAO's concerns, such as "strengthening the organization and the training of qualified inspectors," were "being addressed."

 

Mr. Ang had said three Boeing 777-300ER aircraft will be delivered next year in preparation for more long-haul flights, including possibly to Europe.

 

"We would welcome Philippine Airlines to fly to Europe because it will help develop the market between the Philippines and Europe," Mr. Stelder said.

 

"If you look at the market -- flights between Europe and Manila -- and if you compare that to other similar countries, like Indonesia and Vietnam, it has much less traffic," he added. "With more options to fly, the market will grow."

 

Cebu Pacific has said it is also looking at flights to Europe after it starts long-haul operations to the Middle East next year.

 

"I am confident that we will be able to hold on to our passenger numbers for sure if we continue to develop the aviation sector between the Philippines and Europe," Mr. Stelder said, noting the airline's load factor along the Manila-Taipei-Amsterdam route is "around 90%."

 

Civil Aeronautics Board data show KLM Royal Dutch Airlines flew 84,897 passengers through the country in the first half, down 34.22% from the previous year after the carrier stopped direct flights between Manila and Amsterdam amid calls to abolish the 3.5% common carriers tax on foreign airlines. While the House of Representatives approved the bill scrapping this tax last May, the measure remains at the committee level in the Senate

 

Saudi Arabia expands and doubled flight frequencies

 

An increasing demand for air travel between the Philippines and the Kingdom of Saudi Arabia prompted the two states to renegotiate and expand the number of flights between their respective airports.

 

 As a result, KSA and the Philippines agreed – during air talks last Monday and Tuesday – to increase the number of flight frequencies to 21 per week from 10, Carmelo Arcilla, Civil Aeronautics Board executive director told reporters Wednesday.

 

 Also agreed was to have an unlimited number of flights between Dammam, the Kingdom's eastern province, and Clark International Airport in Pampanga, Arcilla added.

 

 "The parties signed a new agreement increasing the allowed flight frequency for the airline of each country from the current 10 flights per week to 21, on the route Philippines to Jeddah/Riyadh and unlimited between Saudi Arabia and Clark and also between the Philippines and Damman," he said.

 

Transportation Undersecretary Jose Perpetuo Lotilla led the Philippine panel in the talk with their Saudi counterparts, with Arcilla sitting as vice chair.

 

Other members of the panel were representatives from the Departments of Foreign Affairs, Trade and Industry, Tourism, and Labor and Employment.

 

Business World Online, GMA News

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Philippines Lead Asia reports 326% increase in smartphone sales in 12 months

Telecom Lead Asia: The Philippines has reported 326 percent increase in smartphone sales over the last 12 months.

 

The emerging telecom market has become the fastest-growing market for smartphones in Southeast Asia.

 

According to GfK, the country recorded the highest jump in smartphone market share among its neighboring countries in the region, growing from 9 to 24 percent.

 

The growth in the country was significantly higher than the 78 percent growth posted in Southeast Asia's seven major markets, namely the Philippines, Singapore, Malaysia, Thailand, Indonesia, Vietnam, and Cambodia.

 

In July this year, GfK reported that one of four Filipinos own a smartphone, driven by the increasing affordability of smartphone devices across the country.

 

Filipino consumers bought five times as many smartphones in the first five months of this year compared to a year ago, bringing smartphone sales to almost 1.7 million units as of May this year.

 

"With major manufacturers announcing their intentions to launch low-end smartphones priced below $100, smartphones will be within the reach of an even larger pool of consumers and the market is expected to grow even faster when these models are made widely available," said GfK digital technology account director Gerard Tan.

 

According to IHS, smartphone shipments in 2013 are forecast to account for 54 percent of the total cellphone market.

 

Globe Telecom said it offers a range of smartphones bundled with its postpaid plans. For Plan 299, subscribers can get the latest Android devices such as the Huawei Y100 or Samsung Champ Deluxe Duo for free, complete with a consumable postpaid plan for calls, texts, and mobile internet.

 

The telco carries a complete suite of smartphone devices offered across its postpaid plans, available for free or at a minimum cashout payable for 24 to 30 months.

 

"Globe has maintained a strong partnership with some of the world's leading device manufacturers, empowering us to bring the latest smartphones to the country under our flagship postpaid plans," said Martha Sazon, head of Globe Postpaid.

 

Globe's postpaid base has grown by 76 percent within the last two years. In the last twelve months, Globe Postpaid has already added close to 348,000 new subscribers, bringing total subscriber count to 1.6 million, a 28 percent increase.

 

(pix for this article is sourced from intellasia.net)

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Philippines seeks ₱75-Billion PPP funds for rehabilitation 25 State hospitals

Public-Private partnership (PPP) investments are critical to the rehabilitation and improvement of 25 ailing government hospitals for ₱75 billion (at ₱3 billion each), according to an official of the Department of Health (DOH).

 

Health Undersecretary Dr. Teodoro Herbosa announced on Tuesday that the government is infusing ₱3 billion as counterpart funds for the initial improvement of these government hospitals to make them attractive to prospective PPP investors.

 

"If the government alone were to handle the rehabilitation of these 25 hospitals, it would take us more than 25 years to do it because of limited funds and the bureaucracy," Herbosa said at a briefing on PPP projects at the British Embassy in the Philippines.

 

He said the Philippine Orthopedic Center, whose medical infrastructure he said became outdated in 1960, is one of the government hospitals up for PPP investment with an estimated amount of ₱5.6 billion.

 

Herbosa, who heads the DOH Task Force for PPP and Health Facilities Enhancement Program, said the DOH Vaccine Self-Sufficiency Program is also being offered for PPP investment worth P1.2 billion.

 

To highlight key PPP investment opportunities in the Philippines, the United Kingdom Trade and Investment is hosting a seminar mission for British investors and companies on November 8 and 9 in Manila to help them explore opportunities on PPP and infrastructure investments in the country. A similar mission will also be held in Vietnam.

 

The Manila mission aims to provide a platform for British companies engaged in the Aquino administration's PPP program, enabling them to present their areas of expertise and capabilities before an audience of government agencies, key industry players, local suppliers and services firms that are potential partners of the British firms.

 

Britain is the country's largest investor in the past decade with combined net foreign direct and net portfolio investments from 1999 to 2010 worth $12 billion.

 

London said PPP projects that can be explored in the Philippines could reach 10 billion pounds to include roads, ports, airports, rail, health, education, power, water and agriculture.

 

It added that these projects, which had been made a priority for rollout from 2012 to 2013 and will cost £3.3 billion, include transport projects estimated at £2 billion and infrastructure projects at £1.3 billion.

 

The British Embassy is sending Herbosa and key government experts from the DOH, the Department of Transportation and Communications and the Department of Finance to London from October 7 to 15 to engage with British experts on the PPP program.

 

Herbosa said medical cost would not increase when the 25 government hospitals are "semi-privatized" under the program.

 

Under the rehabilitation plan, he added, 30 percent of hospital beds are for patients who can afford to pay and 70 percent will be reserved for sponsored patients, including the poor and those from the lower middle class, whose expenses will be shouldered by PhilHealth.

 

Among those targeted by the plan are Jose Reyes Memorial Hospital, Jose Fabella Hospital, San Lazaro Hospital, Quirino Hospital and National Mental Health Hospital.

 

ABS-CBN News

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Philippines offer investment space for Japanese Factory closed in China

The Philippines is seeking to lure investment from Japanese companies that are being hurt by their country's bitter territorial dispute with China, a senior trade official said Wednesday.

 

Japanese firms in China have been targeted in recent weeks by demonstrators angered by the row over the Japan-held Senkaku Islands in the East China Sea, claimed by China, which calls them Diaoyu, forcing some to shut down.

 

Philippine Trade Undersecretary Cristino Panlilio said the government was courting 15 of these companies with the best potential for relocating some of their operations from China to the Philippines.

 

"We don't want to say we want to take advantage of the misery of others but we're trying to be practical and help the Japanese," Panlilio told reporters.

 

"We have marching orders to our trade attaches to approach these Japanese companies, both in China and Japan."

 

He declined to name the companies that were being approached.

 

To attract the Japanese, Panlilio said the government was offering tax incentives while promoting a well educated population, economic stability and President Benigno Aquino's efforts to stamp out corruption.

 

He said that without the diplomatic tensions, rising labor costs in China were already making the Philippines more attractive for Japanese companies.

 

Panlilio said the Philippines undertook similar sales pitches in Thailand and Japan last year after those countries suffered natural disasters that forced manufacturers there to halt production.

 

He said those efforts had paid dividends with companies such as Toshiba, Canon, Toyota and Hitachi increasing their presence in the Philippines.

 

The Philippines is trying to reverse a trend that has seen its manufacturing sector struggle to remain competitive with China in recent years.

 

The manufacturing sector made up 17 percent of the Philippines' total economy in 2011, down from 26 percent in 1980, according to government data.

 

ABS-CBN News

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Bidding ₱30 Billion LRT extension begin to stop losing $3.27Billion USD due Manila Traffic mess

 

DOTC open Bidding ₱30 Billion LRT extension to Southern Manila

The notorious traffic on Metro Manila's roads is not just a daily annoyance that millions of Filipinos have to live by.  The country loses billions of dollars worth of human productivity, according to a transportation official.

 

A recent study showed that Metro Manila traffic could cost the Philippine economy $3.27 billion a year in productivity due to wasted man hours and higher freight costs, among other problems, the Department of Transportation and Communications (DOTC) said.

 

Citing the study's findings, DOTC Undersecretary Rene Limcaoco said this highlighted the need for the government to accelerate the rollout of transportation-related projects to catch up with the country's ever-expanding needs

 

"The obvious thing the Philippines needs is to expand its infrastructure to meet the country's economic goals," Limcaoco said, speaking at the 2012 Philippine Energy and Infrastructure Forum on Tuesday.

 

"Our infrastructure stock is clearly insufficient," he said. "It drives a certain point home for us in government," Limcaoco added.

 

The study covered the year 2011, and was conducted by the DOTC together with the University of the Philippines National Center for Transportation Studies.

 

Limcaoco said traffic does not only lead to thousands, if not millions, of wasted man-hours on a daily basis, it also adds "friction" to trade by making the movement of goods from one point of the country to another more difficult.

 

Bulk of the country's imports and exports still pass through the international cargo terminals in Manila port district in Tondo.

 

Fortunately, the Aquino administration has taken the appropriate steps to remedy the country's situation by allocating more than two-thirds of the government's infrastructure budget for transportation-related projects under the DOTC, according to Limcaoco.

 

"Properly implemented infrastructure raises overall productivity reduces the cost of production, and most important for us, greatly enhances opportunities for the poor," Limcaoco said.

 

The best way to solve Metro Manila's traffic situation was the development of the country's train lines, which has become the DOTC's number one priority, Limcaoco said.

 

He said the DOTC would start accepting bids for the P30-billion civil works component of the Light Rail Transit (LRT) line 1 Cavite Extension project by next month. The prequalification stage to screen interested bidders ends this week.

 

The other half of the LRT 1 project, which will cost another P30 billion, will involve the purchase of 156 new train coaches that will be funded through an overseas development assistance (ODA) loan.

 

Another priority project that recently secured approval from the National Economic and Development Authority (NEDA) was the LRT line 2 East Extension to Antipolo.

 

Both projects are expected to benefit the dense populations in the areas they serve, which are on the outskirts of Metro Manila.

 

"Mass transportation is an effective equalizer. It creates new living spaces. With reliable rail systems, additional residential areas are made liveable," Limcaoco said. "Now, a less affluent person can live farther away and have cheaper home expenses, but still be able to work in the city same as someone more affluent who might live closer," he said. "This equalizes the playing field between rich and poor," he said.

 

Inquirer

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Oxford Business Group – Philippine Economy Motors Ahead

Growth in the Philippines is expected to continue at a steady clip over the next two years, spurred by proactive government and central bank measures to improve governance and boost macroeconomic performance. There is concern, however, that slowdowns in Europe, the US and China could dampen full-year growth figures.

 

Economic expansion in the first half of the year came in at 6.1%, with GDP expanding 6.3% in the first quarter and 5.9% in the second, according to the National Statistical Coordination Board. The expectation among analysts, officials and international institutions is that robust growth will continue through the rest of the year and into 2013, though forecasts of the exact rate differ. Some expect the current pace to be maintained, while others see a slight cooling to just below 5% for the full year.

 

The economy has been supported by a number of factors, including government spending on construction, which was up 46% on the first half of 2011, according to international press reports, and strong domestic demand, stimulated in part by growing remittances from Filipinos living abroad. As the IMF noted in a statement at the end of its July staff mission to the country, a spike in net exports and fixed investment earlier in the year have also helped drive growth.

 

A recent report note by HSBC economist Trinh Nguyen suggested that the continued success of the country's business process outsourcing (BPO) industry, which has benefitted from companies in the developed world looking to lower costs during the crisis, had contributed to GDP expansion from the private sector.

 

Proactive policy-making by the government and central bank has also been important. The Bangko Sentral ng Pilipinas (BSP) has cut interest rates three times in 2012 to record-low levels to support growth and curb rises in the Philippine peso, one of Asia's best-performing currencies thus far this year. In its September meeting, the BSP kept rates unchanged, at 3.75% for overnight borrowing and 5.75% for overnight lending.

 

The government has won considerable praise for its management, including reforms of governance and efforts to tackle corruption, as well as maintaining a steady macroeconomic course. As the IMF said, "macroeconomic conditions remain generally sound and the authorities' policy management is supporting confidence".

 

Solid economic management puts the government in the enviable position of being able to loosen fiscal policy if the global economic situation worsens considerably. It has also helped the Philippines achieve ratings upgrades, enhancing the country's appeal to investors, as well as bringing in the resources to finance much-needed infrastructure investments that should help ease economic bottlenecks and underpin longer-term growth.

 

Arsenio Balisacan, the economic planning secretary, has told the international press that he expects the economy to prove resilient, despite global uncertainties, with full-year growth at the upper end of the government's 5-6% target range.

 

Similarly, the Capital Market Research Centre, a Philippine think-tank established by a local investment firm and a university, expects growth to reach 5.5%-6% in 2012, despite economic difficulties in Europe and the US, both of which are major export markets for the Philippines.

 

The centre's upbeat forecast is based on the expectation of a continuation of strong domestic demand and government spending, as well as smoother bank lending, offsetting a possible slowdown in exports. While the organisation expects a slowdown in the third quarter, in the final three months of the year, it sees growth picking up again, helped by the stimulus effect of pre-election spending both in the US and at home. Relatively low inflation expectations should benefit consumer spending, it added.

 

The economic outlook is thus positive, but authorities and investors alike are aware that this good news should not mask downside risks and structural weaknesses. Despite the impressive first-half growth figures, the stock market's reaction seemed to focus on the fact that year-on-year growth slowed from the first quarter to the second, and quarter-on-quarter growth was only 0.2%, despite government spending, low interest rates and high credit growth.

 

Perhaps the biggest short-term risk is a worsening of the global economic climate: in addition to concerns over Europe and the US, China's medium-term growth and stability prospects are also worrying. The international outlook is the main reason the IMF takes a more cautious view than some on the Philippines; in its July statement, it said, "growth is expected to stabilise around 4.8% and 4.9% in 2012 and 2013, respectively, in line with soft global economic conditions".

 

Longer-term issues hampering the country's economic performance also persist: efforts to overhaul the administration, address corruption and upgrade infrastructure all reflect long-standing weaknesses and will take some time to run their course. Reforms to increase tax take and tackle anti-competitive practices are also priorities.

 

Oxford Business Group

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Anomalous $593-million Dollars loan from China for Northrail project to be returned

THE PHILIPPINES has committed to return some $593 million in loan from China for a railway project that was dropped due to anomalies in the procurement process, a Cabinet official said.

 

"In the middle of the Panatag (Scarborough) shoal controversy, China suddenly called off its ODA (overseas development assistance) that they lent us for the Northrail project," Local Government Secretary Manuel "Mar" A. Roxas II said yesterday after meeting with Chinese Vice-President Xi Jinping and Foreign Affairs Minister Fu Ying last week.

 

"We have the money and we can pay this (loan). According to Secretary (Cesar) Purisima of the Finance (department), they have started negotiations to pay this in installment over the next two years," he explained.

 

The 80-kilometer Northrail project that was supposed to link the northern part of Metro Manila with the Diosdado Macapagal International Airport in Clark, Pampanga, was suspended in March 2010 pending review of the contract with China National Machinery Industry Corp. (Sinomach).

 

The Supreme Court eventually ruled that the project was contrary to law as it did not undergo proper bidding process.

 

The high-speed railway was to have linked Manila with a northern province and eventually with the former U.S. Clark Air Base, which President Benigno Aquino III's administration plans to convert into the country's main airport. The U.S. abandoned Clark after it was damaged by the 1991 eruption of Mount Pinatubo.

 

The long-delayed railway was one of a number of planned infrastructure projects that Aquino ordered reviewed when he took power in 2010 to ensure they were not tainted by corruption. The Supreme Court ruled earlier this year that a lower court could hear allegations that the railway project was illegal because it was awarded without competitive bidding.

 

The Philippines has drawn more than $180 million from a $400 loan China agreed to provide for the project, according to Roxas' office.

 

Roxas said Aquino's administration wants to continue the project if the contract can be renegotiated to conform with Philippine laws. But he said Chinese officials demanded earlier this year that the loan be repaid because the project has stalled.

 

"All procurement by the government must comply with the procurement law. So this contract is not effective anymore," he said.

 

Mr. Roxas said this means the Philippines would have to drop the contract with the Chinese firm.

 

Amid the controversy, Mr. Roxas said the Northrail project will push through.

 

"The North Rail Corp. would have to reassess the needs. As for the government, our plan for a high-speed rail connection in Clark will continue. Whether it will be on the PNR (Philippine National Railway) alignment or some other alignment, that's another decision," he said.

 

At the same briefing, Mr. Roxas said the Philippines and China vowed to continue improving ties amid "irritants" in its already tensed relations over competing claims in the disputed West Philippine Sea (South China Sea).

 

"As I conveyed to Vice-President Xi, talk-talk is better than no talk," he said.

 

"So, the fact that we are talking at the highest levels, the fact that messages are reliably conveyed, I think, is a good step, is a good foundational step so that the DFA and the other negotiators can build upon whatever foundations or whatever fundamentals may have been established in this meeting," Mr. Roxas said.

 

The Secretary was sent as special envoy to the China-ASEAN (Association of Southeast Asian Nations) expo held last week where he also met with high ranking Chinese officials.

 

Meanwhile, the Commission on Audit (CoA) vowed to finish its audit report on the anomalous Northrail project in two to three months.

 

CoA Chairman Maria Gracia Pulido-Tan told the Senate finance committee hearing yesterday that audit highlights have already been released to the Northrail Corp., but the entire project has never been audited "from the very beginning" since it started in 2003.

 

Ms. Tan said the commission's audit on the project began last year and they have finished the audit highlights yesterday.

 

She said the commission is waiting for the "agency to comment on the findings" before they release the full report.

 

Build and Technology Transfer

 

Roxas went to China prepared, as he said he has asked the Chinese counterparts to comply to certain provisions compelling the State Grid Corporation of China to transfer technology to the National Grid Corporation of the Philippines as part of the contract when it bought a significant stake in the NGCP.

 

"As per contract in the National Grid, there ought to have been technology transfer. Apart from the technology transfer, the contract also stipulates that they train our men on how to handle the controls of our electric grid. It would be awkward on our part to see foreigners in control of the grid — would there be black-outs or not? What if  there would be roll or shortage in supply, it is us who would be affected. Who would be at the receiving end of the sufferings.

 

It is upright that Filipinos take control of the grid and in the same manner that decisions would be confined among us", stated Roxas, who went on to say that the "SGCC's stake at the NGCP doesn't make them (China) immune from compliance on contract provisions, so they should do what has been stated in the contract".

 

China-Philippines  Panantag Scarborough Shoal Standoff

But despite meeting top-level Chinese leaders, Roxas  failed to secure the much needed access for the local banana exports, which have been subjected to what Filipino exporters described as an extremely stringent procedure seen to keep Philippine fruit exports out of China.

 

Roxas apparently made sure this issue on the trade embargo on local banana exports would be discussed.

 

He however claimed that the Chinese government appears firm on its claim of phyto-sanitary issues as basis of the restriction on the local banana products, which were prevented entry since summer this year.

 

Roxas said that amid the insinuations by his Chinese counterparts that had phyto-sanitary issues as the compelling factor on the restriction, China has reportedly maintained an open option seen to keep the Philippines as among the countries from where China gets to import goods.

 

"They said that this was part of their SPS or sanitary-phyto-sanitary protections for their domestic industry. Nonetheless, there was some mention of their continuing to be open to importing Philippine bananas. There was no talk at all about volumes, timetables, or such," averred the 'special envoy'

 

Local banana exporters posted more than a billion dollars in loses after China declined entry of cargo vessels that had local banana exports on board. Roughly 300 shiploads of bananas were rotten, spoiled and wasted, resulting from what many consider as the consequences that Philippines got amid a stand-off at the Panatag Shoal.

 

Sen.Antonio Trillanes, who served as Aquino's back channel in China on the issues with China over the disputed territorial waters, claimed to have eased the situation to the point of there being  no Chinese ships within the Philippine claimed shoal but stays in international waters, as well as claiming that the banana exports to China have resumed.

 

Apparently, none of what he claimed had basis.

 

Meanwhile, the designation of Roxas as special presidential envoy to China could only be because of the perception that  Aquino no longer sees Senator  Trillanes as an effective backchannel negotiator over the disputed Scarborough Shoal.

 

Sen. Francis "Chiz" Escudero yesterday echoed the assessment earlier made by  Sen. Miriam Defensor-Santiago after Trillanes himself blew his cover.

 

"The revelation came from Trillanes himself. Whoever engages in backdoor (talks) will no longer be rendered effective if that person is now on the front door and same can be said for whoever is acting as the backchannel if he's now the front channel. That's probably the reason President Aquino named Roxas as special envoy to China," he said.

 

Roxas' entry into the picture will not in any way put Trillanes in a bad light since the latter's supposed role in resolving the tension with China may have already been over and done with, Escudero said.

 

Escudero, former chairman of the Senate committee on national defense and security, likewise shared Senate President Juan Ponce Enrile's contention that no state secret was divulged the latter's public disclosure of so-called "Brady notes" or the report supposedly prepared by Philippine Ambassador to China Sonia Brady to Foreign Affairs Secretary Albert del Rosario.

 

"I don't see any national security component in the Brady notes. These are Brady's notes on an opinion of one senator related to her.  I cannot categorize to anyone that whatever I say constitutes national security especially in that kind of manner of conversation, on subjects that do not entail national security of the country.

 

When asked about his categorical statement whether there were state secrets that were put out in the open, Escudero expressed belief that there were none.

 

"The problem there is that we do not have any law regarding any (state) secret, confidential (information)," he said.

 

While there are documents from the Departments of National Defense (DND) and Interior and Local Government (DILG) that are labelled confidential, there's no enabling law that provides punitive action for whoever will mishandle such information.

 

"What is confidential, what is secret? What is top secret? What is secure, the level of clearances? There is no law on this that outlines what such documents are," he said.

 

It's a different matter on issues concerning information disclosed in an executive session as the Rules of the Senate explicitly provides that whatever transpired in the proceedings cannot be divulged by anyone, otherwise, a penalty will be imposed based on the ethics and rules of the upper chamber, the senator claimed. Angie M. Rosales

 

Business world Online, the Daily Tribune 

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Australia’s Macquarie placing $600M in Philippines’s PPP projects

 

One of the world's largest financial services companies is investing up to $600 million to finance infrastructure projects under the Aquino administration's public-private partnership program.

 

Sydney, Australia-based Macquarie Group said the fund allotted to the Philippines is more or less on a par with the $1.2 billion the group placed in India and the $1 billion in China.

 

"The Philippines is very important to the Macquarie Group. There is a good combination of strong economic growth and sound prospects for the economy," said Michael de Guzman, managing director of the group's Manila office.

 

In fact, the Philippines is the first country in Southeast Asia where Macquarie invested some of its funds, because of  sound macroeconomic fundamentals and growth potential, De Guzman told reporters on the sidelines of the "2012 Philippine Energy & Infrastructure Business Meeting."

 

According to its website, Macquarie has $339 billion worth of funds under its management.

 

Under the PPP initiative, Macquarie is eyeing to finance the Light Rail Transit (LRT) 1 extension to Cavite from Baclaran, the proposed P10.2 billion Mactan-Cebu International Airport, and the Ninoy Aquino International Airport Expressway project.

 

While foreign investors are interested in placing their money in Philippine projects, BDO Unibank chairperson Teresita Sy-Coson said local banks have more than enough liquidity to raise at least $1 billion for infrastructure projects under the government's PPP initiative.

 

Banks are – in fact – excited for the PPP program to go full swing to benefit from the highly liquid financial market.

 

"The delay means delayed business. We are hoping that these projects would be bidded out soon," Sy-Coson added.

 

De Guzman, however, said Macquarie is also eyeing to fund power projects including power plants that run on coal, gas, and renewable energy.

 

The group earlier partnered with the state-run Government Service Insurance System and Asian Development Bank, pooling their funds under the Philippine Investment Alliance for Infrastructure, especially to finance infrastructure projects.

 

GMA News

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Investment rating for the Philippines in Q1 2013, Strong Economy, HK tourist Influx up inspite of ban

 

There are two good reasons why the Philippines will likely get an investment grade credit rating in early 2013, a monetary official said

 

The Philippines may get an investment grade by early 2013, according to projection by.

 

One is the country's sound macroeconomic fundamentals and positive perception by the international capital market, economist and Monetary Board member Felipe Medalla told a convention of Thrift banks, where he was the keynote speaker.

 

"We should be getting an investment grade, hopefully early next year," Medalla said.

 

The other reason is interest rates.

 

Philippine bonds carry lower yields than bonds of peers with similar credit ratings, an indication that credit rating agencies are behind the international capital markets in assessing the country's creditworthiness, Medalla said.

 

Philippine foreign exchange reserves reached a record of over $80 million as of end-August, the economist noted, saying that level of reserves gives Bangko Sentral the flexibility to cushion the impact of capital flight by foreign investors fleeing from emerging markets.

 

Bangko Sentral could also used its reserves to shield the peso from sharp declines, thus keeping the foreign exchange stable if need be. "The Philippines is practically invulnerable to capital flow reversals," Medalla said.

 

Moody's Investor Service has given the Philippines a credit rating of two notches below investment grade, while Fitch Ratings and Standard & Poor's assessed the country's creditworthiness just a notch under investment grade

 

Philippines Economy 2012 Remains Strong

 

International credit watcher Standard & Poor's raised its growth forecast for the Philippines for 2012, even as it downgraded its outlook for other economies in Asia and the Pacific, saying the country has the capability to withstand unfavorable developments in the global economy.

 

In its latest report titled "Asia Pacific Feels the Pressure of Ongoing Global Economic Uncertainty," S&P said it now expected the Philippine economy to expand by 4.9 percent, instead of the earlier projection of 4.3 percent, this year.

 

On the contrary, the credit-rating firm lowered its growth projections for several economies and kept its previous forecasts for a few others in the region to take into account the impact of the prolonged debt crisis in the eurozone, the still lackluster growth of the United States and the slowdown of China and India.

 

S&P said the unfavorable developments in the world's biggest economies were expected to dampen growth of many Asia-Pacific countries, except for the Philippines.

  

More HongKongers Tourists Arrive Visayas  for Travel Restriction in Manila

 

In spite of the updated black travel advisory of the Hong Kong Security Bureau on the Philippines, an official from the Department of Tourism (DoT) yesterday said that the tourism industry has already bounced back from the restriction and expects an even bigger growth rate from the Hong Kong market by the end of the year.

 

"We are happy to report that visitor arrivals from Hong Kong from January to July, 2012, reached 67,844 representing a growth rate of 1.71 percent," said Assistant Secretary for International Promotions Benito Bengzon Jr.

 

According to Bengzon, the alert issued two years ago is still in place but the DoT continues with its marketing and promotions program for the Hong Kong outbound travel market.

 

The Hong Kong Special Administration Region's black travel advisory is a warning to its citizens to avoid all travel to a country placed under the category.

 

The Hong Kong Security Bureau updated its black travel advisory to the Philippines underlining the risk of possible terrorist attacks.

 

"Serious hostage-taking incident happened in Manila on August 23, 2010. Residents should avoid all travel to the country; those who are already there should attend to personal safety and exercise caution," the advisory said.

 

The black travel advisory was issued after the August 23 hostage-taking incident in front of the Quirino Grandstand where a dismissed police officer hijacked a bus full of Hong Kong tourists.

 

Live Trading News, GMA News, Manila Bulletin 

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