The Philippines' rising economy to Star in 2050

BANKING giant Hongkong and Shanghai Bank (HSBC) announced recently that the Philippines can be one of the world's top economies by 2050.

It is encouraging that this independent and credible financial organization sees the enormous potential our country has for economic growth, and that if this potential is nurtured, the outcomes will be concrete and tangible and will provide benefits for the nation and its people.

In the HSBC report, the Philippine economy is forecast to rise 27 places upward to 16th rank less than 40 years from now.

The Philippines was also marked as one of 26 "fast-growth" countries expected to register "an average expansion of more than 5 percent per year."

Despite a "very low level of development," the report says the Philippines is among those countries that has made "great progress in improving fundamentals. As they open themselves to the technology available elsewhere, they should enjoy many years of 'copy-and-paste' growth ahead."

The Philippines was noted as being one of the "truly remarkable hot spots in Asia…. The star performer, however, is the Philippines, where the combination of strong fundamentals and powerful demographics gives rise to an average growth rate of 7 percent for the coming 40 years."

Noted as contributing to the country's progress are the "improvements in its economic infrastructure," with the "fast-growing population…expected to increase the country's labor force, which likewise benefits from the quantity and quality of education."

HSBC projected the Philippines's average gross domestic product growth at 8.4 percent from 2010 to 2020, 7.3 percent from 2020 to 2030, and 5.8 percent from 2040 to 2050.

The report stated further the following top 5 projections:

1. China is expected to become the No.1 economy,
2. United States will follow China,
3. India
4. Japan  
5. Germany

Germany will remain  in the top five, in that order.

Many smaller economies will move up, such as:

• Peru (to improve by 20 places),
• Egypt (+15)
• Nigeria (+9)
• Malaysia (+17)
• Ukraine (+19)

Many European countries may decline, especially those in Northern Europe, because of a smaller work force and the rise of developing nations—

• Denmark (-29)
•  Norway (-22)
• Sweden (-20)
• Finland (-19).

Among the factors that contribute to long-term economic growth are demographics—the size of the working population—and the opportunities for each individual to be more productive.

In order to create a milieu conducive to promoting productivity, there must be the following significant factors: opportunities for education, democratic governments, and strong rule of law.

Factors that could derail progress are war, energy-consumption constraints, climate change, and barriers to population movement across borders.

The report comes with a caveat: "We openly admit that behind these projections we assume governments build on their recent progress and remain solely focused on increasing the living standards for their populations….Of course, this maybe an overly glossy way of viewing the world."

The Philippines under President Aquino is already putting those measures for growth in place. Economic growth showed a strong uptick in 2011, when the Philippine Stock Exchange closed with a 4.1-percent gain. This made it Asia's best-performing economy for the year.

In another report, to create a climate conducive to more growth, the Association of Southeast Asian Nations is working toward "a unified trading bloc with free-flow capital by 2015." Electronic-trading links will be set up in Asian countries to "allow more investments and raise liquidity," starting in 2012 in Malaysia, Thailand and Singapore, followed later by the Philippines.

In addition, the Aquino administration has taken larger steps toward fighting graft and corruption via the Good Governance and Anti-corruption Cluster (GGAC) Plan for 2012-2016, which was approved on January 3. It will simplify and integrate the government's anti-graft and -corruption systems.

Necessary legislations and policies will be reviewed and strengthened, while digitization and innovations in government operations will be promoted, backed by an aggressive advocacy and communication campaign. Once these measures are in place, the government expects the business and economic environment to improve further.

President Aquino said as much in his toast at the vin d'honneur at Malacañang on January 13 (the ceremony is the Palace's traditional New Year's celebration for the diplomatic corps):

"We have already made great strides in our fight against corruption and poverty, as well as in our thrust to create a progressive economic climate guided by fair and honest practices. Local and foreign groups have acknowledged our triumphs by investing in our country, by lauding our efforts in open governance, and by supporting our programs.

"At the heart of our work for the next year lies a desire to secure for our people a better standard of life, and a brighter future. And all of you present here today are crucial to achieving that goal.

"This year, we will strengthen the programs that work for our countrymen, such as those in education, health, housing, and others like our Conditional Cash Transfer Program.

"We will not relent in our quest to hold accountable those who seek to perpetuate the culture of impunity in our country.

"We will continue to ensure the safety of our nation: by upgrading our defense capabilities, and by working to achieve peace, while pursuing lawless and criminal elements.

"We will continue to sustain the growth of our economy and create opportunities for employment.

"These are not without their challenges, but I am confident that so long as we stand together and remain consistent in our service to the public, our countrymen will be behind us every step of the way, as we work toward success."

* * *

PCSO News: the PCSO will be taking care of the bills of the victims of the Pantukan, Compostela Valley, landslide who are in government hospitals, and will also be assisting the victims of the December 10 plane crash in Barangay Don Bosco, Parañaque City.

The Beechcraft nine-seater was en route to San Jose, Mindoro, when it crashed at 2:15 in the afternoon in a residential area. According to the police report, there were 13 casualties and 15 to 20 houses, including the F. Serrano Elementary School, were burned. Sixteen persons were injured.

The PCSO is also working on a quick-response disaster- management initiative and is drawing up guidelines for this in consultation with the Department of Social Welfare and Development. More PCSO branch offices will also be opened nationwide in order to better address the needs of its beneficiaries.

Atty. Rojas is the general manager of the PCSO. E-mail: jrojas@pcso.gov.ph.

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BHP Billiton & 12 Oil Firms Start Drilling oil and gas in the Philippines

Philippines — Dubbing it as "the period of upturn in upstream petroleum investments" in the country, the Department of Energy (DoE) has announced that 10 to 12 wells have been committed by service contractor-firms in their drilling programs this year.

In a statement to the media, Energy Undersecretary Jay Layug disclosed that they have cornered "10-12 firm commitments to drill exploration wells and three workover wells from our service contractors."

This includes the following:

• Blade Petroleum for the Cadlao block in Northwest Palawan;
• Galoc Production Company (GPC) in Service Contract 14C, also in Northwest Palawan;
• Philippine National Oil Company-Exploration Corporation (PNOC-EC) in Cagayan basin;
• Gas2Grid in SC 44 and China International Mining Petroleum Company Limited (CIMP) at SC 49 in Visayas basin;
• Frigstad Energy at SC 50 in NW Palawan;
• Pitkin Petroleum at SC53 in Mindoro-Cuyo prospect; and
• BHP Billiton at its two blocks in Southwest Palawan.

Layug emphasized these drilling programs are part of the work commitments submitted by the service contractors to the energy department. "These are existing work programs under their respective service contracts," the energy official said.

Exploration wells are drilled to discover oil or gas and if these can be developed at commercial quantity; while workover wells may be pursued to improve flowrates, at proven finds or existing production fields.

Service contractors are required to submit a seven-year work program with the DOE; and that could entail drilling of several wells to determine if the oil or gas finds would merit declaration of commerciality.

While the department has not given exact figure on the investment costs, it was indicated that the rule of thumb for offshore deep well drilling could range from $80 million to $100 million; while those onshore may command an investment of $30 million to $50 million per well.

"We have seen an upturn in Philippine upstream petroleum industry this year as a result of current high-oil price market condition and the efforts of the DoE to revitalize the industry," Layug has noted.

For the oil and gas investors, the equilibrium price they have been hinging their investments on has been at $80 per barrel. Obviously though, current price trends have already surpassed that immensely.

Layug specified that the energy department's intent of re-igniting interests in upstream petroleum ventures is in line with the Aquino administration's thrust "to focus on resource development as a long-term plan of action in the hopes of finding indigenous oil and gas resources to reduce our dependence on imported petroleum and mitigate effects of oil price volatility."

The department will be offering 15 new petroleum service areas in biddings scheduled until July 2012.

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Philippines seeks another ASEAN support for possible China meet on Spratly row

Recently, the Philippines protested early year 2012 for another China's invasion to the Philippines territory in Sabina Shoal which is only a 82 Miles from the Philippines Main Island.

China rejected the protest of the Philippines and pronounced that they owned everything in the West Philippines Sea and voiced that it will call for another negotiation to settle Spratly.

The Philippines is committed and lead for the resolution of the Spratly and called anew for the support of the Association of Southeast Asian Nations (ASEAN) in having a meeting with China to resolve the territorial row involving the Spratly Islands.

Foreign Affairs Secretary Albert del Rosario made the call at the ASEAN Foreign Ministers' Meeting Retreat at Siem Reap, Cambodia, where he reiterated his stand for a rules-based solution to the problem.

"In the context of the Philippine position and the background on this issue, the Philippines reiterates its proposal that a meeting be held as soon as possible among the claimant states including China, under the guidance of ASEAN, to resolve the conflicting claims in the WPS (West Philippine Sea) based on the rules-based regime of (the United Nations Convention on the Law of the Sea). This proposal for constructive engagement should be acceptable to all," Del Rosario said.

He added the Philippines calls on all ASEAN Member States to endorse this proposed claimant states' meeting, which the Philippines is ready to host.

"We would also welcome other ASEAN Member States to host this meeting if they would like to unequivocally express their support for and advance a rules-based approach in the region," he said.

The text of his statement delivered last Jan. 11 was posted Sunday on the DFA website.

Aside from the Philippines and China, other claimants to the Spratlys include Taiwan, Brunei, Malaysia, and Vietnam. Of these, the Philippines, Brunei, Malaysia and Vietnam are members of ASEAN.

Only legitimate approach

Del Rosario maintained a rules-based approach is the only legitimate way in addressing disputes in the West Philippine Sea.

He said the dispute settlement mechanism established in the UNCLOS is the fundamental principle of the rules-based approach being espoused by the Philippines.

"I have emphasized this at the 44th ASEAN Ministerial Meeting (AMM) and 18th ASEAN Regional Forum (ARF) and again at the last ASEAN Foreign Ministers' Meeting, all held in Bali. This rules-based approach under UNCLOS also calls for the resolution of disputes through peaceful means. For this reason, the Philippines proposed to ASEAN the Zone of Peace, Freedom, Friendship, and Cooperation (ZoPFF/C) as the actionable framework to clarify and segregate the disputed land features from the non-disputed waters of the West Philippine Sea, and in the process, address the issue of the 9-dash line," he said.

He also said the Philippines has stated it is considering third party adjudication, arbitration or conciliation, as appropriate, in the context of the dispute settlement mechanism of UNCLOS.

On the other hand, he said the Philippines also proposed during the November AMM a meeting of claimant states in the West Philippine Sea to specifically include China, to resolve these claims and define the non-disputed and the disputed areas for the purpose of establishing a Joint Cooperation Area.

The rules-based approach calls for: solving the issue peacefully in accordance with the rule of law, particularly international law and UNCLOS the multilateral participation of various stakeholders to account for the various perspectives and interests.

"As we work on building the ASEAN Community, it behooves Member States to now play a positive and meaningful role to solve the disputes peacefully in accordance with the Treaty of Amity and Cooperation (TAC) and reach a stage whereby we are able to help resolve sensitive issues decisively without letting such issues fester and adversely affect the progress of our bilateral or multilateral relations," Del Rosario said.

Code of conduct

Del Rosario also said all are eager to move forward on the Code of Conduct to resolve the issues in the West Philippine Sea.

He said the Philippines is ready to accept a Code of Conduct that calls for the primacy of international law, including UNCLOS, in resolving the disputes in the West Philippine Sea.

"It is ready to accept a Code of Conduct that espouses the concrete and actionable activities to foster cooperation in the West Philippine Sea in the context of international law. And, lastly the Philippines is willing to commit to a Code of Conduct that addresses the very core of the issue and that is to define, clarify, and segregate the disputed areas from the non-disputed areas in the West Philippine Sea," he added.

He pointed out ASEAN is at a critical juncture of playing a momentous role for the resolution of the disputes in the West Philippine Sea.

"We must now muster the will as an ASEAN Community to face these sensitive issues with determination. As you may appreciate, we believe that this is the only way for all of us to move forward and be able to demonstrate ASEAN's leadership in the global community," he said.

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Aquino Govt appeals to US to remove 'withholding element' in military aid

The Philippines appealed to the United States to remove the "withholding element" from its military assistance program, saying there is no factual basis for perception of worsening human rights situation in the country.

Foreign Affairs Secretary Alberto Del Rosario made the appeal as he met yesterday with visiting members of the US House Appropriations Committee at the Department of Foreign Affairs (DFA) with whom he discussed bilateral issues including defense, security development assistance and good governance.

"We talked about areas of continued assistance and what priority request we have from the US," Del Rosario told reporters following the meeting with the US lawmakers.

Del Rosario said he requested the withholding mechanism in the US Foreign Military Financing (FMF) dropped as the US Congress continues to withhold a portion of US assistance to the Philippine military until the Philippine government meets certain conditions related to solving and prosecuting cases of extrajudicial killings.

"As a result, their thinking is that we are not quite up to standard in terms of our human rights standard in the Philippines. We are trying to live those standards so that withholding element can be removed," Del Rosario said.

"We are asking them to revisit that because we do not like the idea that we are being portrayed as a human rights violator which is not factual. As a matter of fact, we are trying to address that perception and we do have very specific mechanisms to be able to do that," he added.

US Ambassador Harry Thomas Jr. informed representatives of Philippine-based human rights groups during a discussion at the US Embassy on Oct. 21, 2011 about the withholding of US assistance to the Philippines.

Human Rights Advocates (PAHRA) chairperson Teodoro de Mesa led representatives of human rights groups during the meeting with Thomas.

Thomas said the US Embassy was encouraged by the pledge that President Aquino made in his 2010 State of the Nation Address to curb extrajudicial killings in the Philippines.

Thomas noted however that the 2010 US Department of State Human Rights Report on the Philippines included assertions of cases of extrajudicial killings that occurred under the Aquino administration.

He expressed concern regarding the slow pace of investigations and prosecutions of past cases.

Thomas said that from 2007 to 2010, the US government extended $3.5 million in grants to the Philippine government and non-government organizations to strengthen their capacity to address human rights violations.

He said the US government would continue to press for progress on addressing past cases and the ongoing problem of extrajudicial killings in the Philippines.

The human rights groups' representatives informed Thomas of their ongoing projects and suggested measures that could significantly improve human rights conditions in the Philippines.

Del Rosario, meanwhile, said he also followed up the Philippine government's request for third Coast Guard Cutter and a squadron of F16 fighter jets under defense articles.

"We are following up on our request for our third Coast Guard Cutter. As you know the second one we are awaiting delivery. We are also following up our request for the F16. We are asking for a squadron to be considered for the Philippines," he said.

Del Rosario said that in December, the US expressed willingness to help the Philippines obtain a squadron of F-16 to improve its defense capability but stressed there is no discussion yet on stationing of US naval vessels in the Philippines.

He noted plans to station US navy ships in the region including Singapore but there was no discussion yet of stationing of naval vessels in the Philippines.

Del Rosario and Defense Secretary Voltaire Gazmin will visit the US in February or March to meet with their counterparts.

Del Rosario said the US is ready to help improve the Philippines' defense capability.

He said the planned acquisitions had already been discussed with US Secretary of State Hillary Clinton and other US officials.

Clinton delivered during her visit to Manila in November a strong message of assurance and support for the Philippines in protecting its maritime domain and improving territorial defense. Clinton delivered her message on the deck of an American warship that arrived in Manila for her visit.

The territorial conflict and heightened tensions between China and the Philippines over the resource-rich West Philippine Sea (South China Sea) remains a critical factor in bilateral relations between China and the Philippines.

The Philippines formally accepted in May the turnover of a US Coast Guard (USCG) Hamilton-class cutter acquired by the Philippines through the US Foreign Military Sales program. The cutter was refurbished and renamed BRP Gregorio del Pilar. It is now the largest patrol ship in the Philippine Navy.

Reference: Philstar News

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Malacañang Palace grateful for Philippines’ improved ranking on economic freedom

Malacañang Palace  expressed gratefulness over a report that Philippines had risen in the world economic rankings to 107 from 115 previously despite a challenging global economic environment published January 14, 2012.

It also welcomed the HSBC Expat Explorer Survey result, which ranked the Philippines as the eighth friendliest country in the world.

The 2012 Index of World Economic Freedom released on Thursday said among 179 countries rated, the Philippines had the 107th freest economy with a score of 57.1. The report said the country's score was 0.9 point higher than last year, attributable in large part to a significant improvement in business freedom.

Deputy presidential spokesperson Abigail Valte said over dzRB that the Philippines improved its ranking because of economic expansion and the efforts of the government to pursue legislative reforms to enhance the business environment.

"We are also happy to note that even the report itself, an assessment from (a) third party, notes that our regulatory efficiency has been notably enhanced. This is what President Aquino has always been saying - that we are really after efficiency and government. We have been trying to streamline systems. Business registration that will take anywhere between 24 to 48 hours can now be done in 15 minutes. These are the small things that can help businessmen who want toinvest in the Philippines," Valte said.

"And the other good news, we're also happy to note that in one of the surveys conducted by HSBC... And this is why we believe that it really is more fun in the Philippines like what the Department of Tourism is saying," Valte said.

Asked whether the WEF report could counter the claims of former president and now Pampanga Rep. Gloria Macapagal-Arroyo against the Aquino administration, Valte said "these are (assessments) by third (parties) who have no axes to grind against the present administration."

"Some people will say, of course the administration will always promote what is good, what is good with the economy and people on the opposite side of the fence will almost, will always promote what is good about them and what is bad about the present. But at least this is a third party assessment and we can see the recommendations and positive findings as well the points that the third party has also raised," Valte said.

Valte said the WEF report cited that despite some progress, "corruption continues to undermine prospect for long-term economic development and the judiciary, which remains susceptible to political interference and it does provide effective protection for property rights or transparent enforcement of the law."

Valte said President Aquino himself had assured the international community that he would continue to be relentless in the fight against corruption and run after those perpetuating the culture of impunity.

"While some people chose to oversimplify and say that corruption is not the only problem, that's true, there are a lot of other problems that we need to face but this one has big impact on our economy," she said.

"This is what we have been concentrating on again in the past year," she said.

"As regards the comment on the judiciary which remains susceptible to political interference, that is up to a separate branch of government to determine how they will take that observation...On the part of the executive, what the President is saying is when it comes to prosecution, your case must be strong, never let the delay come from the executive branch. Now when it comes to the adjudication of cases, that is something that is up to the judiciary to resolve. Before it takes six years to have conviction or acquittal, it is the judiciary that must take steps to ensure that there will be speed (in the) dispensation of justice," Valte said.

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Gloria Arroyo a ‘huge failure’ of the Philippines’ Economy

Malacañang Palace turned the tables on former President Gloria Macapagal-Arroyo and branded her administration as "a huge failure" a day after the Arroyo camp came up with a critique citing the Aquino administration's supposed shortcomings in running the economy after taking over in 2010.

"Repeatedly, the performance of her government, the economic as well as the political, has been exposed as a huge failure over the past nine and a half years," Budget Secretary Florencio Abad told reporters.

Abad, who served as Aquino's campaign manager in the 2010 election, said that Arroyo had refused to acknowledge that she turned over a messy state of affairs to her successor.

"She was given the rare opportunity through People Power to lead differently but she turned her back on her big opportunity. We ended up suffering from those years of very bad governance," he added.

No research needed

Abad said one wouldn't have to do a thorough research to dispute the points raised in Arroyo's paper such as the substantial growth rate inherited by the Aquino government.

"The question is, what legacy? The numbers may have grown but if you look at the poverty incidence, it has worsened. Look at the employment numbers, it has worsened during their time," Abad pointed out.

In contrast, Abad cited the renewed confidence the credit ratings agencies have given the Philippines under President Aquino.

"In the 18 months of this presidency, we had five upgrades in our rating, the last one was the Standard and Poor's. We hope within the next two to three months there can be a ratings upgrade," Abad said.

"What is different from this administration's economic policy is that it is not detached from the measures on the improved governance especially transparency and accountability in the use of public funds which was absent totally in the last administration," he added.

The economy, student

In her paper titled, "It's the Economy, Student," Arroyo took a jibe at President Aquino's "obsessive pursuit" to demonize her and erase her legacy.

The paper was read by a University of the Philippines economics professor at a press conference at the Manila Hotel on Thursday.

According to her spokesperson, Elena Bautista-Horn, Arroyo wrote the paper "in her spare time" during her recuperation, hospitalization and hospital detention between October and December 2011.

According to Arroyo, the gains achieved by previous administrations "are being squandered in an obsessive pursuit of political warfare meant to blacken the past and conceal the dark corners of the present dispensation. Rather than building on our nation's achievements, this regime has extolled itself as the sole harbinger of all that is good."

Arroyo's claim that the "politics of division" was to blame for the current economic slump did not sit well with Abad.

"Politics of division? The Filipino people, as surveys and surveys show, have never rallied solidly behind a President as they have shown in support of P-Noy's (Aquino's nickname) anticorruption, good governance and poverty-reduction programs," Abad said.

Vote of confidence

Abad pointed out that even the international community had given the Aquino administration its "vote of confidence."

The budget chief then reminded Arroyo that she, too, could learn a thing or two from Aquino, an economics graduate and a student of Arroyo at Ateneo de Manila University.

"One important lesson that Arroyo should learn from P-Noy is that you cannot separate good governance from economic expansion. One needs the other," said Abad.

In her paper, Arroyo defended the gains of her nine-year presidency but took potshots at the performance of the Aquino administration.

Arroyo, now the representative of the second district of Pampanga who is under hospital arrest for electoral sabotage, accused Aquino of the very ills that bedeviled her presidency and for which she was unable to resolve.

She noted that Aquino was embroiled in "too much" politics. She decried the alleged "use of black propaganda and character assassination" to try to erase her legacy and undo the gains of her nine-year term.

Source:  Philippine Daily Inquirer

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In The Know: Philippines' Eagle - Monkey Eating Eagle

WINGED VICTORY. The Philippine Eagle's wing span of 7 feet is world's broadest. Pag-asa shows off at the eagle sanctuary in Davao City. EDDIE JUNTILLA/PHILIPPINE EAGLE

MANILA, Philippines—"Pag-asa" was conceived through artificial insemination and was laid in November 1991 by captive Philippine Eagle Diola using mate Junior's semen.

It was Diola's fourth fertile egg and the first to hatch.

The severe power crisis in Mindanao threatened the egg's survival, with the generator that automatically provided electricity during power outages conking out once every four hours.

Then Eagle Camp manager Domingo Tadena and his staff had to wrap the egg in a water-filled rubber pack, the temperature of which was carefully calculated and maintained.

A quake also briefly threatened Pag-asa's survival, as did an apparent thinning of the egg. The timely application of colorless nail polish proved effective in hardening the shell.

Pag-asa's eventual hatching in 1992 was the result of 10 years of research and experimentation on the country's national bird.

American Express Bank adopted Pag-asa in 1992 and has been providing financial aid to the Philippine Eagle Foundation (PEF), a Davao-based nonprofit, nongovernment organization dedicated to saving the endangered species and its rainforest habitat.

Before Pag-asa, only 37 eagles had been identified to exist in the Philippines—13 in captivity and 24 associated with wild nests.

As part of the efforts to boost the dwindling eagle population in the wild, Kabayan, an eagle also bred and hatched in captivity, was released to the wild in 2004—the first captive-bred eagle thus released.

The Philippine Eagle is a 3-foot-high rainforest raptor with a wingspan of 7 ft—the broadest in the world. Deforestation and hunting have threatened its survival.

It is estimated that only 400 pairs of these eagles remain in the islands of Luzon, Samar, Leyte and Mindanao. Thirty-six eagles, 18 of them bred in captivity, are housed at the PEF Center located at the foothills of Mt. Apo in Davao.

Ana Roa, Inquirer Research

http://newsinfo.inquirer.net/128151/in-the-know-philippine-eagle

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Philippines, Peru among emerging-economy stars by 2050: HSBC

LONDON: The Philippines and Peru will be among emerging economies that become much more prominent in the next few decades, helped by demographics and rising education standards, with the Philippines set to leapfrog 27 places to become the 16th largest economy by 2050, HSBC predicts.

The bank expects China to overtake the United States as the world's biggest economy by 2050, and says strong growth rates in other developing countries will help drive the global economy.

"Plenty of places in the world look set to deliver very strong rates of growth. But they are not in the developed world, which faces both structural and cyclical headwinds. They are in the emerging world," the bank said in its report 'The World in 2050'.

It based its forecasts on fundamentals such as current income per capita, rule of law, democracy, education levels and demographic change.

HSBC projects the Philippines economy is poised to grow by an average of 7 percent annually over the next 40 years, while Peru should average annual growth of 5.5 percent over the same period.

The sheer pace of population growth in countries such as Nigeria and Pakistan means that these economies will swell in size to be included among the 100 biggest economies even if their incomes on a per-capita basis remain low.

HSBC said lower scores for rule of law in Latin America constrained its per-capita income projections for the region though it noted that Brazil was making headway in this aspect.

"The losers are the small population, ageing economies of Europe," added the bank, which says the demographics in much of Europe underscores concerns about the debt problems faced by many of the continent's governments.

'COPY AND PASTE' If sufficiently open to modern technology, developing countries could enjoy many years of robust GDP growth

although they could struggle for growth drivers once they have adapted to technological advances, HSBC said.

"The initial years of development could be described as 'copy and paste' growth, as countries open themselves up and adapt to the world's existing technologies. Once the 'copy and paste' growth is complete ... many economies struggle and get stuck in what is often known as the middle-income trap."

"But many of the countries we are considering are still at such an extremely low level of development that there are years of this 'copy and paste' growth ahead," it added.

It was here that many of the pessimism about China was misplaced, the bank argued.

"One of the most commonly cited reasons for concern about China is the high rate of investment as a percentage of GDP ...(But) we believe the strong rate of investment is entirely justified - providing China with much needed basic infrastructure," it said.

The bank said high levels of education in central and eastern Europe meant that the region could enjoy strong income per capita growth in the coming years before weak demographics eventually sap economic growth.

"While education rates are similar (to the West), the average income per capita in the central and Eastern Europe block is just one fifth that of the developed world. For this reason ... economies have great scope to catch up in income per capita," it said.

"Some of the smaller Eastern European countries - Romania, the Czech Republic and Serbia - (should) all do extremely well, particularly in the coming decade, before demographics prove to be more of a drag."

Source: From the Economic Times

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Bright economic prospects kept boosting shares in the Philippines

Investors' optimism on the Philippines economy continue to send share prices climbing on Tuesday to a new record high of 4,591.26 before tapering off by the final bell.

The bellwether Philippine Stock Exchange index nevertheless ended the session just below record at 4,561.08, up by 0.42 percent or 19.48 points. The broader all-share index added 0.4 percent or 12.38 points to 3,106.43.

Trading volume reached 3.45 billion shares worth ₱6.25 billion ($142.36 million) with 100 stocks advancing, 57 declining and 42 unchanged.

Of the six counters, only the mining and oil sector bucked the trend and succumbed to profit taking.

Brokerage DBP-Daiwa Securities, Inc. said investors remain bullish on the economy given expectations of lowered rates to support business growth.

"The continued easing of the country's inflation rate provides enough justification for a possible policy rate cut by the central bank in order to spur economic growth and alongside the planned rollout of government infrastructure projects," the brokerage said.

DBP-Daiwa Securities said lower interest rates are supportive of the banks 'lending business as cost of borrowing would relatively be cheap.

This, it said, is the key reason as for the strong stock performance of the major banking stocks at the start of this year.

In fact, the country's top three banks, Banco de Oro Unibank, Inc. (BDO), the Bank of the Philippine Islands and Metropolitan Bank and Trust Co. were Monday's top gainers.

The brokerage also noted that there was a strong value turnover among these issues signaling the "incessant appetite for these high beta counters."

Also, equities across the globe were trading higher.

Dow Jones industrial average index finished Monday's session with a gain of 32.77 points. Neighboring Asian stock markets also traded positively today.

Stocks in the 30-company index were mostly up. Although investors booked their BDO gains, the two other banks continue their upward trek.

In other corporate news, port operator International Container Terminal Services Inc. is eyeing $150 million from an overseas debt sale to finance new projects for 2012.

ICTSI said proceeds from the offer will be used to develop greenfield projects, potential acquisitions and general corporate purposes.

Philippines' economic outlook: indicators support PHL economic growth

The economy will grow by 5 percent to 6 percent this year on government spending, consumer demand and overseas Filipino workers' (OFW) remittances, First Metro Investment Corp. (FMIC) said in a briefing Tuesday on Philippine economic outlook.

FMIC, a unit of Metrobank Group, is "cautiously optimistic" about the Philippine economy, noting current indicators point to robust investment inflows, strong market appetite, lower borrowing cost, ample liquidity and faster capacity to pay debt.

"The outlook for 2012 is very positive," said Francisco Sebastian, FMIC chair. "The country is in very good shape with its macro-economic fundamentals still intact."

Public debt is lower, inflation has eased and government remains serious with its fiscal and reform measures, he said.

However, threats like economic slowdown in China, a protracted debt crisis in the European Union and a weakening of commodities market remain, FMIC noted.

Also, the country is facing the La Niña weather phenomenon until February and that may weaken agriculture output.

Roberto Juanchito Dispo, FMIC president, said the economy will level up this year in terms of macro-economic fundamentals and capital markets.

'De facto upgraded'

Despite the US and European crises, OFW remittances will grow by 5 percent to 7 percent and inflation will stay within 3.5 percent to 3.7 percent because of stable crude oil prices, Dispo noted.

Exports are will also recover from a negative 4.3 percent to 5.7 percent growth while imports will increase by 10 percent, according to the FMIC president.

FMIC sees the peso-dollar exchange rate slip in favor of the US currency at ₱43:$1 to ₱45:$1 as the US recovers and outperforms Japan and Europe.

The equities market is likely to perform better, with the Philippine Stock Exchange index hitting 5,000 by year's end because of low interest rates, slower inflation and a credit rating upgrade, according to the Metrobank Group unit.

Growth drivers will include consumer spending, investments in tourism sector, and infrastructure development under the Aquino administration's public-private partnership program.

Monetary policy will relax the first quarter and stay relatively stable the rest of the year.

As such government securities will have relatively low rates, including 3 percent for 91-day Treasury bills, 4.75 percent for 5-year and 10-year notes and bonds, and 6 percent for 25-year notes.

With this outlook, the Philippines is "de facto upgraded" with both onshore and offshore markets already pricing the country's debt instruments at investment grade levels, said.

He cited the sale of $1.5-billion, 25-year global bonds last week at a yield of 5 percent.

Last year, Fitch Ratings raised the country's long-term foreign currency bond to BB+ from BB or a notch below investment grade. Moody's Investors Service also upgraded Philippine currency bonds to Ba2 from Ba3.

Higher credit ratings lower the price of a nation's debt and allow governments to easily borrow for infrastructure projects, and an investment grade attracts global institutional investors.

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US-China rivalry behind fresh corruption charges in the Philippines

By Joseph Santolan

9 January 2012

Graft and corruption charges were filed against former Philippine President Gloria Macapagal Arroyo on December 28. The charges stem from a scandal that erupted in 2007 over the alleged rigging of bids for the construction of a national broadband network (NBN) on behalf of a Chinese corporation, Zhongxing Telecommunication Equipment (ZTE). This is the second set of charges filed by President Aquino's administration against Arroyo and clearly reveals what lies behind Aquino's political battle against the former president: the geopolitical struggle between China and the United States in the region.

Arroyo is currently under arrest in the Philippine Veterans Memorial Medical Center on charges that she committed electoral fraud during the 2007 senatorial elections on behalf of candidates from her Lakas-Kampi-CMD party. Electoral fraud is a charge that precludes the possibility of posting bail, and was thus the first case filed by the Aquino administration in a rush to prevent Arroyo from leaving the country.

The electoral fraud case that the government has filed against Arroyo is threadbare, built on the testimony of a single witness. Norie Unas, a former provincial administrator from the southern province of Maguindanao, has sworn that he overheard Arroyo issue orders to engage in cheating in the 2007 election. No evidence beyond this claim has been presented.

In 2009, the political clan of the Ampatuan family massacred 59 people, 34 of them journalists, in one of the bloodiest acts of electoral violence in the Philippines in years. Unas, the Aquino administration's sole witness, has been repeatedly accused by witnesses in the Ampatuan trial of not only being party to planning the massacre but of having ordered the backhoe that was being used to bury the bodies in a mass grave. It is widely speculated that Unas cut a deal with the Aquino administration to testify against Arroyo in return for immunity in the Ampatuan case.

There is a wealth of evidence that Arroyo cheated in the 2004 presidential election. Presenting a case against her for this, however, would expose the entire corrupt political system in the Philippines, implicating both her and her rivals. Aquino, a congressman in 2005 when the election fraud scandal broke, defended Arroyo, then an ally, against charges that she rigged the election.

The political blitzkrieg now being carried out against Arroyo is at its base not about corruption or poll fraud. It is about the shift that occurred during her administration, reorienting the Philippines' economic and political ties away from the United States and toward China.

In 2007, the Arroyo administration proposed to construct a national broadband network connecting all Philippine government offices and was soliciting bids from private contractors for the construction. Three corporations bid: ZTE, a Chinese state corporation; Amsterdam Holdings, a local start up backed by Chinese firm Huawei Tech; and the US telecommunications company Arescom. Arescom significantly underbid both rival offers.

The US ambassador sent a letter to Arroyo urging fair and transparent consideration of all proposals. Arroyo favored the more expensive ZTE bid over its rivals. The head of Amsterdam Holdings, son of the long-time speaker of the House of Representatives, cried foul. Accusations emerged of bribery and secret deals cut during golf games. The bid from Arescom was entirely left out of the Philippine press.

Lurking behind the sordid mess of who said what and to whom is a simple fact: Arroyo gave a massive infrastructural contract to a Chinese state corporation over a rival bid from a US firm.

This NBN-ZTE deal, as it became known, was part of a trend. In the same year, the lucrative contract for the operation of the Philippine power transmission grid, TransCo, was given to the China State Grid over a rival bid from San Miguel Corporation. Thirty five percent of the San Miguel Corporation bid of $US3.905 billion came from the US-based Texas Pacific Group—now TPG Capital—one of the world's largest private equity firms, specializing in leveraged buyouts.

Leading the TPG bid was Ernest Bower, who, according to WikiLeaks cable 07Manila3966, met with US Ambassador to the Philippines Kristie Kenney to discuss the widespread rumors of corruption on the part of the Arroyo administration in the TransCo bidding. The cable concluded, "It is unlikely that we will ever know whether collusion took place in this bidding, or whether there were other irregularities. There is a consensus among Filipinos that Congress will get its share when the franchise comes before it." Bower is now head of the Southeast Asia section of the Center for Strategic and International Studies (CSIS), an important think tank behind the Obama administration's "pivot" to Asia and aggressive imperialist maneuvers against China.

Other substantial contracts were bid out to Chinese corporations, including the construction of a 90-kilometer railway, Northrail, in late 2004, at the time one of the largest Chinese-funded projects in Southeast Asia.

Aquino has been consolidating political power against his rival Arroyo for the past year. At every turn he has had the support of Washington. US diplomatic attaches supplied his administration with evidence of corruption on the part of high-ranking military officials beholden to Arroyo. The day Aquino announced that he would be prosecuting Arroyo for corruption; US Pacific Commander Admiral Robert Willard visited him and promised to ensure additional US military supplies in the mounting tensions with China over the South China Sea. The day Aquino prevented Arroyo from leaving the country, though she had not yet been charged with any crime—a clear violation of the Philippine constitution—Hillary Clinton visited Manila. She praised Aquino, offered additional US economic aid and promised that US would supply the Philippines with a second warship.

Each new step in the prosecution of Arroyo has been spearheaded by the various groups of the Philippine 'left.' Bayan Muna, the largest party-list organization with ties to the Maoist Communist Party of the Philippines, filed the NBN-ZTE case charges against Arroyo. Bayan Muna representative Neri Colmenares indicated clearly the direction that further prosecution of Arroyo would take in a message sent to the press on December 29. He called on the Aquino administration to turn a microscope on any deal that "China is involved in, including the Northrail project, for possible anomalies."

The Aquino administration's prosecution of Arroyo serves the interests of Washington in its increasingly tense confrontation with China. The filing of the NBN-ZTE case is simply the most transparent evidence yet of this.

See more in World Socialist Website

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China's Warship Intruded Philippines Sabina Shoal - December 2011 - Gains another Protest

Photographed through the window of a closed aircraft, an aerial view shows Pag-asa Island, part of the disputed Spratly group of islands, in the South China Sea located off the coast of western Philippines on Wednesday July 20, 2011. (AP Photo/Rolex Dela Pena, Pool)

Read more: http://www.ctv.ca/CTVNews/World/20120108/philippines-accuses-china-maritime-intrusions-120108/#ixzz1isWb6PbM

Philippines accuses China of maritime intrusions in December before Christmas

MANILA, Philippines — The Philippines has protested to China over three Chinese vessels that intruded into its waters last month, in the latest flaring of tensions over disputed West Philippines Sea (South China Sea) regions.

The Philippines accused China of intruding into its "maritime jurisdiction" after three Chinese ships were spotted last month in disputed areas in the West Philippines Sea (South China Sea), the Department of Foreign Affairs said on Sunday.

China, the Philippines, Brunei, Malaysia, Vietnam and Taiwan have conflicting claims in the Spratlys, an area believed to contain huge deposits of oil and gas in the South China Sea

A Philippine foreign ministry statement said it had summoned the Chinese embassy's charge d'affaires on Thursday to convey "its serious concerns over recent actions of the People's Republic of China in the West Philippine Sea".

Manila refers to the South China Sea as West Philippine Sea to strengthen its claims on parts of the Spratlys. Philippine troops occupy nine islands and shoals in the Spratlys.

Citing reports from the defense and military establishments, the foreign ministry said two Chinese vessels and a Chinese navy warship were seen around Sabina shoal in the Spratlys on December 11 and 12, respectively.

Sabina shoal is around 124 nautical miles from the western island of Palawan and is within "Philippine sovereignty and maritime jurisdiction".

The Philippine government expressed its "serious concerns" to the Chinese Embassy after the three vessels, including a Chinese navy ship, were sighted near Sabina Shoal in the South China Sea on Dec. 11 and 12, Foreign Secretary Alberto del Rosario said Sunday.

In May 2011, Philippines protested China of intrusions into its territory, citing six instances, including one in March when two Chinese patrol boats tried to ram a survey ship.

The disputed ownership of oil-rich reefs and islands in the West Philippines Sea (South China Sea), through which $5 trillion in trade sails annually, is one of the biggest security threats in Asia.

"These intrusions of the Chinese are clear violations of the 2002 ASEAN-China Declaration on the Conduct of Parties (DOC) in the South China Sea as well as the provision of the United Nations Convention of the Law of the Sea (UNCLOS)," the foreign ministry said.

Regional military commander Lt. Gen. Juancho Sabban said a Philippine navy patrol ship and an air force plane kept watch from a distance until the Chinese vessels left the country's territorial waters.

The three vessels apparently came from the Chinese-occupied Mischief Reef in the disputed Spratly Islands then cruised into Philippine waters on their way back to China as part of a regular shifting of forces, he said.

"We were watching them. They did not drop anchor or unload construction materials and appeared to be just passing through," Sabban told The Associated Press.

The Chinese Embassy in Manila did not immediately respond to a request for comment.

In Beijing, Chinese Assistant Foreign Minister Liu Zhenmin told the official Xinhua News Agency that the situation in the South China Sea "is peaceful and stable." China will always opt for negotiations to peacefully resolve disputes on "some islands ... and the demarcation of parts of the sea," Liu said.

Claimants should set aside the disputes and pursue common development ahead of a solution, Liu said, reiterating that outside "forces" should not meddle in the conflicts. China has repeatedly warned the U.S. not to intervene in the disputes.

Del Rosario said the new Chinese intrusions violated a 2002 accord between China and the Association of Southeast Asian Nations that discourages claimant countries to the South China Sea's disputed Spratly Islands from taking aggressive steps that could ignite tension or confrontations.

China, the Philippines and four other claimants have long been locked in a tense dispute over potentially oil- and gas-rich West Philippines Sea (South China Sea) territories, including the Spratlys.

Many fear the region could be Asia's next flash point for conflict.

The Philippines and Vietnam separately accused Chinese vessels of repeatedly intruding into Spratlys areas under their control and sabotaging oil explorations in their regular territorial waters in the first six months of last year.

China denied the claims and reiterated its sovereignty over most of the South China Sea.

Amid the disputes, the Philippines turned to the United States, a defense-treaty ally, to strengthen its underfunded military, one of Asia's weakest. The Philippine navy relaunched an old U.S. Coast Guard cutter as its biggest warship last month to guard its waters near the Spratlys.

President Benigno Aquino III and other top Philippine officials plan to travel to the United States this year to seek two more ships and a squadron of F-16 jets, according to del Rosario.

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