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Saturday, June 11, 2011

Net Foreign Direct Investment Inflows surge 142% in March 2011 - Banco Central

The Banco Central Sa Pilipinas / Bangko Sentral ng Pilipinas (BSP) reported  June 9, 2011 that net foreign direct investment (FDI) inflows surged 142 percent in March as equity infusion more than doubled while withdrawals declined.
BSP Governor Amando Tetangco Jr. said that net FDI inflows amounted to $167 million Dollar in March or $98 million lower than the $69 million inflows booked in the same month last year.
"All FDI components yielded positive balances during the month," Tetangco stressed.
Data showed that equity placements jumped 113 percent to $64 million Dollar in March from $30 million in the same month last year while withdrawals slowed down by 47 percent to $18 million from $34 million.
The net inflow of other capital account consisting largely of intercompany borrowing between foreign direct investors and their subsidiaries or affiliates in the Philippines jumped 146.2 percent to $96 million in March from $39 million in the same period last year while reinvested earnings fell 26.5 percent to $25 million from $34 million.
In all, Tetangco said net FDI inflows retreated by 16.6 percent to $471 million in the first quarter of the year from $565 million in the same period last year due to the tensions in Middle East and North African (MENA) states, the debt crisis in Europe, and the disasters in Japan.
"Investors remained cautious on account of the uncertainties brought about by the ongoing sovereign debt problems in Europe, the political unrest in the MENA region as well as the disasters that struck Japan," the BSP chief stressed.
Equity placements retreated by 7.6 percent to $121 million from January to March compared to $131 million in the same period last year while withdrawals plunged 53.5 percent to $40 million from $86 million.
Data showed that reinvested earnings plummeted 38.3 percent to $113 million from $183 million while other capital fell 17.8 percent to $277 million from $337 million.
FDI inflows retreated by 12.7 percent to $1.71 billion last year from $1.96 billion in 2009 as equity placements plunged 42.5 percent to $1.15 billion while equity withdrawals increased by 10.8 percent to $307 million.
The drop was attributed to the decline in equity capital investments in new and existing projects as investor sentiment was generally marked by cautiousness and uncertainties surrounding the sovereign debt crisis in some parts of Europe, geopolitical tensions in Korea, asset price bubble and overheating concerns in fast growing emerging markets.
Likewise, the BSP explained that large-scale investments arising from the privatization of a local power corporation and the acquisition of shares of a local beverage manufacturing firm were recorded in 2009.
These included the investment made by China's largest electricity provider State Grid Corp. and Monte Oro Grid Resources Corp. in state-owned National Transmission Corp. (Transco) that bagged a $3.95 billion concession contract as well as the decision of Japanese brewer Kirin Holdings to acquire a stake in Manila-based San Miguel Brewery of diversified conglomerate San Miguel Corp. worth 65.8 billion.
Monetary authorities are confident that FDIs would continue to pour into the Philippines to fund projects under the Aquino administration's public private partnership (PPP) scheme.

Word war Vietnam- China could not solve disputes in Spratly and Paracel- Philippines

The United Nations Convention on the Law of the Sea (UNCLOS) shows the light Blue Dotted line as 200 Nautical Mile Economic Zone for the Philippines, Vietnam, Brunei, Malaysia, China and Indonesia. The disputed Areas are just in the middle of the 3 SEAS (Vietnam’ East Sea, West Philippine Sea and South China Sea) The incident now is the other claimants of the Disputed Area is now entering to the Philippine Water which is not Disputed. Chinese Vessel fired the Filipino Fishermen inside the Philippine territory 67 Miles from Palawan Shore. China has no sovereignty over Spratly as directed by UNCLOS which china’s limit is only until the PARACEL and the disputed Areas outside the Philippine Water. The Philippines recorded already 6 invasion by china to the West Philippine Sea As of June 10, 2011.

Malacañang palace Manila appealed to China June 9, 2011 to refrain from issuing inflammatory statements that could start a counter-productive word war and to stop intruding into the West Philippine Sea, as well as the disputed Spratly Islands.

“The Republic of the Philippines has stated its position on the various territorial issues in the West Philippine Sea. We are committed to dialogue with other claimants. We call on all parties to refrain from inflammatory statements that would make it more difficult to reach a mutually agreeable solution,” presidential spokesman Edwin Lacierda said.

Lacierda told a press briefing that the Department of National Defense (DND) would undertake measures to protect Philippine territorial waters from incursions, especially in the Reed Bank in Western Palawan.

He said the Spratlys issue was taken up during a security cluster meeting in Malacañang Palace, Manila and the DND and the Department of Foreign Affairs (DFA) were tasked to resolve the matter.

“We understand their statements, they (China) claim that the entire South China Sea is theirs including Reed Bank. We have already mentioned that we encourage everyone to refrain from making inflammatory statements. Our goal here is to really have a peaceful resolution so it would be better for the parties to speak away from the cameras so discussions would be better,” Lacierda said.

Like the Philippines, Vietnam also said it was determined to protect the “incontestable” sovereignty the Disputed Sea archipelagos (Vietnam East Sea, West Philippine Sea and South China Sea), intensifying a war of words with China.

Beijing earlier accused the Philippines of harming its sovereignty by making “irresponsible statements” about Manila’s claims to parts of disputed islands in the West Philippines Sea and South China Sea.

China, Vietnam, the Philippines, Malaysia, Brunei and Taiwan all claim territories in the sea base in UNCLOS 200 Nautical Mile Exclusive Economic Zone, which covers an important shipping route and is thought to hold untapped oil and gas reserves.

China’s claim is to most of the sea’s 648,000 square miles (1.7 million square km), including the Spratly province of the Philippines and Paracel archipelagos which in disputed between China and Vietnam.

Tensions between Beijing and Hanoi are at their highest in years owing to long-standing territorial disputes over the potentially oil-rich Paracels and Spratly Islands.

The situation escalated in late May after Vietnam accused China of violating its exclusive economic zone stretching to 200 nautical miles.

Hanoi said that three Chinese marine surveillance vessels severed the exploration cables of a Vietnamese oil survey ship, violating the 1982 United Nations Convention on the Law of the Sea.

Manila accused China of intruding into the Philippines’ territorial waters as well and stressed it would continue oil explorations in Reed Bank, which was never disputed.

But despite the exchange of words, Lacierda said the relationship between China and the Philippines remained warm and that both countries were committed to resolve the dispute through dialogue.

“We believe in a multilateral approach on all the disputed areas, including all claimants of the South China Sea,” Lacierda said.

“I strongly believe that in our discussions with China, they are very, very hopeful for a peaceful resolution and this could be done diplomatically,” Lacierda added.

PHL offers framework for peace

The DFA said the Philippines is guided by its offer of a framework that transforms the South China Sea from an area of dispute to a Zone of Peace, Freedom, Friendship, and Cooperation (ZoPFF/C) by a segregation of disputed relevant features from the undisputed waters in the region consistent with UNCLOS.The disputed features if you could see the map is just between the West Philippines Sea, Vietnam’s East Sea and South China Sea.

The UNCLOS light blue dotted map is showing the area of more than 200 Nautical Mile Exclusive Economic Zone as “Disputed Areas”.  The sad thing is each claimant is overlapping and most of them are entering to the Philippine Waters just to claim the islands which is inside the Philippine Territory and part of the Spartly which is not part of the disputed Areas. The angst hit to the Philippines at this point as they are disturbing the daily business and activity of the Philippines within its territory.

Philippine President Aquino has referred to ZoPFF/C as a modality for ensuring that “what is ours is ours, and with what is disputed, we can work towards joint cooperation.”

Foreign Secretary Albert del Rosario earlier said the framework offered by the Philippines would reinforce the goal of the 2002 Association of Southeast Asian Nations (ASEAN)-China Declaration of Conduct of Parties in the South China Sea (DOC).

Del Rosario pointed out that the parties also affirmed the need for a binding Code of Conduct (COC) and agreed to work towards its realization under the DOC. A COC would concretely express the country’s collective goal for rules-based actions by all concerned parties.

“The Philippines has offered a specific framework for the resolution of differences and the pursuit of cooperation in the form of the ZoPFF/C,” the DFA said.

Del Rosario stressed that a rules-based regime is a requisite for securing peace and stability in the region.

He cited the Reed Bank or Recto Bank as part of the continental shelf of the western coast of Palawan. It is about 85 nautical miles from the nearest coast of Palawan and therefore well within the 200 nautical miles continental shelf of the Philippine archipelago under UNCLOS.

In contrast, it is roughly 595 nautical miles from the nearest coast of China.

“This means that the Philippines has unequivocal sovereign rights over Recto (Reed) Bank,” Del Rosario said. “Since the Recto (Reed) Bank is ours, it can only be exclusively developed by the Philippines. The Philippines may, however, invite foreign investors to assist in developing the area in accordance with Philippine laws.”

Del Rosario said the disputed features could be transformed into a Joint Cooperation Area for joint development and the establishment of a marine protected area for biodiversity conservation under ZoPFF/C.

“We are confident that ZoPFF/C represents an important contribution to securing peace, stability and progress in the South China Sea within a rule-of-law framework, and that the concept deserves serious and favorable consideration by countries with stakes in the South China Sea,” he said.

The Philippines’ policy in the South China Sea, both with respect to securing its terrestrial and maritime domain and to advocating dispute resolution and joint cooperation where applicable, is grounded on an unwavering adherence to international law, Del Rosario said.

Since international law must be observed, the secretary said it behooves the Philippines to embrace this imperative to the fullest.

Chinese Ambassador Liu Jianchao said on Thursday that the current dispute between Manila and Beijing and claims that led to the lodging of a diplomatic protest all started with a “bad rumor.”

Liu said the incident last Feb. 25 involving a Chinese naval vessel that fired warning shots near Filipino fishing vessels at Quirino Atoll, the incursion of Chinese ships at the West Philippine Sea (South China Sea) and the harassment by Chinese vessels are rumors and untrue.

Sen. Francis Pangilinan joined calls yesterday for the administration to act on the reported Chinese “bullying” of the Philippines over the Spratly Islands.

“Why the high-handed and arrogant posturing (by China)?” asked Pangilinan, chairman of the Senate committee on agriculture.

Pangilinan described as “most unfortunate” Liu’s statement asking all parties to stop searching for mineral resources in the disputed areas.

Liu’s statement came after Beijing asked Manila to refrain from unilateral actions that could affect China’s sovereignty.

“Coming as it does from the second largest economy in the world is quite disturbing. China’s insistence that other nations must first seek its permission in moving about these disputed waters is high-handedness and arrogance that is unnecessary if indeed a peaceful resolution is what we all seek. They talk peace yet they do so with arrogance and high-handedness,” Pangilinan said.

“We should not be bullied by this undiplomatic posturing. The Philippines has a long history of freedom and popular uprisings against tyranny and the arrogance of power. We will never allow any superpower to bully us into submission,” Pangilinan added.

The Aquino government recently lodged a protest in the United Nations over the harassment by a Chinese vessel of a Department of Energy vessel.

Senate President Pro-Tempore Jinggoy Estrada urged the Aquino government to settle through diplomacy the Philippines dispute with China over the Spratlys.

Estrada, chairman of the Senate committee on labor and human resources development, said the Philippines should use its diplomatic ties with other countries that are also claiming territory at the Spratly Islands.

“We have to solve it diplomatically. We cannot fight them. We have to deal also with the other countries like Vietnam, Indonesia, Malaysia and China, which have claims in the Spratlys. What is due us, is due us,” Estrada said.

Estrada also said that the Philippine government has no other alternative but to resolve the Spratlys issue diplomatically.

“The Philippine government should never give up… What we need is a dialogue,” Estrada said.

Armed Forces of the Philippines chief Gen Eduardo Oban Jr. said soldiers deployed in the Philippine-held Kalayaan Island Group are under orders to avoid “miscaculation” in all their dealings with other military forces in the disputed Spratlys to avoid further complicating the security situation in the region.

But Oban said that if the troops are facing hostile actions, they are also under orders to shoot back.

“If they (intruders) are hostile towards us and firing at us, we will shoot back,” Oban said at the Manila Overseas Press Club (MOPC) forum last Thursday night at the Intercontinental Hotel in Makati City.

Filipino forces conducting maritime and aerial territorial patrols over the country’s exclusive economic zone in the West Philippine Sea are also under orders not be confrontational but when push comes the shove, the troops have to defend themselves, Oban said.

“While we try to avoid miscalculations (so as not to complicate the security situation in the KIG), we will shoot back if fired upon,” Oban said.

China issued another Warning to Vietnam

China has again warned Vietnam to halt all activities that it says violate its sovereignty in disputed waters in the South China Sea after an incident involving vessels from the two communist nations.

Hanoi protested to Beijing after what it described as a “premeditated” attack on an exploration ship in its waters.

Vietnam said a Chinese fishing boat “intentionally rammed” the exploration cables of a vessel, chartered by state energy giant PetroVietnam, conducting a seismic survey inside its 200 nautical mile exclusive economic zone Thursday.

But, apparently referring to the same incident, China gave a different version of events in a report carried by official news agency Xinhua early Friday.

Chinese foreign ministry spokesman Hong Lei said China had indisputable sovereignty over the Spratly Islands.

He said Chinese fishing boats were chased away by armed Vietnamese ships on Thursday morning. During the incident the fishing net of one of the Chinese boats became tangled with the cables of Vietnamese oil exploring vessel, which China says was operating illegally in the area.

According to Beijing’s account, the oil exploration boat continued dragging the Chinese vessel for more than an hour.

The Chinese fishermen were forced to cut off the fishing net before the two vessels lost contact, Xinhua said.

“This has seriously endangered the safety of the Chinese fishermen,” Hong said.

Hong said oil exploration in the area and the actions of the Vietnamese vessels had grossly infringed on Chinese sovereignty, calling on Hanoi to stop all such action.

Relations between Beijing and Hanoi have grown increasingly tense in recent days over a long-standing dispute related to the sovereignty of the Paracel archipelago and the Spratly Islands.

 

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