...the PH faster growth

Philippines to outpace peers

BusinessWorld Online

25April 2013

DEBT WATCHER Standard & Poor’s has raised its growth forecasts for the Philippines, citing the country’s insulation from tepid external demand.

 

The Philippines is expected to grow by 6.5% this year and 6.3% in 2014, outpacing the rest of Southeast Asia, the credit rater said in a report on Wednesday. For the entire region, the country was bested only by China, which is estimated to grow by 7.9% and 8% this year and next, respectively.

Last month, the baseline forecast of S&P for the Philippines was 5.9% in 2013 and 5.7% next year.

The country grew by a healthy 6.6% last year, beating market expectations and the government target of 5-6%. It aims to take on a higher growth trajectory in the coming years, eyeing 6-7% in 2013 and 6.5-7.5% in 2014.

“The good news for emerging Asia is that its economic fundamentals remain strong,” S&P said.

All sectors of the economy are doing well, it cited, such as households, corporates, financial institutions and governments. The region has learned from the 1997 Asian financial crisis, avoiding the excesses that has plagued the advanced economies.

However, this doesn’t mean that it is smooth-sailing from here.

“The not-so-good news is that emerging Asia is not a world unto itself. While the region has begun to drive a larger part of its own economic momentum in recent years, growth remains reliant, to varying degrees, on demand from the advanced economies,” S&P said.

The continued weakness of the United States and Europe means that demand for exports will be lukewarm while capital will be flighty and volatile, it explained.

This could drag down Asia, particularly the newly industrialized economies of Hong Kong, Korea, Singapore and Taiwan, since their economies are very open, making for a “decent but sub-par” performance in 2013. The credit rater likened it to flying an airplane without all the engines working.

Exceptions to the rule are China and the ASEAN-5 (Association of Southeast Asian Nations), composed of Indonesia, Malaysia, Philippines, Thailand and Vietnam.

“[They] are more domestically driven, and therefore continue to enjoy relatively high and stable growth rates. This is not the case elsewhere,” S&P said. -- Diane Claire J. Jiao

 

...the best microfinance environments

Editorial

Philippines Among Best Microfinance Environments

Manila Bulletin

February 20, 2013

 

The Philippines is a global leader in microfinance, having one of the best business environments for microenterprises. It ranked 4th out of 55 countries in the annual global survey “Global Microscope on the Microfinance Business Environment 2012,” released in 2012 by the London-based think-tank Economist Intelligence Unit (EIU). The Philippines posted a two-notch improvement from its 6th ranking in 2011. The report highlighted the country’s stable market and reforms initiated by public and private institutions to develop an enabling microfinance environment.

The EIU said the rankings recognized key efforts of the Bangko Sentral ng Pilipinas (BSP) such as raising the ceiling for “microfinance plus” that microenterprises and small businesses can avail of to fund their operations. Microfinance originally financed microenterprises or small livelihood activities but BSP expanded loan products to include microfinance housing, micro-agri loans, micro-insurance, and micro-deposits. There are 202 microfinance institutions operating in the Philippines.

In the 2nd quarter of 2012, the BSP, in Circular No. 748, eased its guidelines on microfinance lending to allow banks to disburse more funds in the countryside for agriculture and agrarian reform sectors.

The BSP, in Circular No. 782 on January 21, 2013, raised the threshold of microfinance clients to allow low-income clients access to credit such as housing microfinance. Low-income are those with income below P17,000 a month or P206,000 per year.

Microfinance is a way of providing financial services to entrepreneurs and small businesses lacking access to conventional banking. In the Republic of the Philippines, microfinancing is an activity dominated by rural banks, non-government and people organizations, with support from international donors. Rural and cooperative banks provide financial services to over 85 percent of cities and towns, under the Micro-enterprise Access to Banking Services of the Rural Bankers Association of the Philippines, supported by the United States Agency for International Development.

We congratulate the Bangko Sentral ng Pilipinas, headed by Governor Amando M. Tetangco Jr., in its efforts to promote microfinance as one of the powerful programs of the Philippine economy. CONGRATULATIONS AND MABUHAY!

 

...the World Economic Forum host (East Asia summit)

Philippines to host WEF in East Asia 2014

Aquino says foreign investors eager to ride on PH’s success

 

By Correspondent

Emirates 24/7

Monday, January 28, 2013

 

 

 

Philippine President Benigno Aquino attends a session of the

World Economic Forum at the Swiss resort of Davos. (AFP)

 

 

MANILA: The Philippines is now preparing to host the WEF, or World Economic Forum, in East Asia by next year.

 

This according to President Benigno Aquino III, who talked to reporters upon his arrival in Manila on Sunday afternoon from his first attendance at WEF in Davos, Switzerland.

“What I can say is that … they [some world leaders] praised our economic progress, and I felt their desire to continue with good governance, owing to what we have done here,” he said in Filipino, as quoted by the major daily Manila Bulletin.

Aquino was one of the keynote speakers at the forum’s Partnership Against Corruption Initiative (PACI). The others in the group were the heads of state from Mongolia, Peru, and India, who also brought good news about their growing economies.

In Zurich, where he spoke before a crowd of about 500 members of the Filipino-Swiss community on Saturday, Aquino said that foreign investors are now lining up to ride on the country’s economic success.

He told them that the Philippine Stock Exchange index (PSEi) may hit the 7,000-mark milestone within this year, or will reach 6,500 on February 8, his birthday.

The PSEi, seen as a bellwether of how the Philippine economy and the business landscape will fare, closed at 6,167.64 on Friday. It has hit new record highs for over 70 times since 2010, when Aquino first assumed office.

The Philippine peso, which closed at 41.05:$1 at the end of 2012, was the second-fastest appreciating Asian currency against the United States dollar last year.

Professor Klaus Schwab, who founded WEF, has lauded the Philippines for its economic reforms.
“If we further help each other, I won’t be surprised if we make it to the Guinness Book of World Records because of the strong performance of our stock exchange,” Aquino said, as quoted by Philippine Daily Inquirer’s Doris Dumlao.

He recalled how he joined some of the foreign trips made by her late mother, Corazon Aquino, when she became the country’s president after the exile of the strongman Ferdinand Marcos to Hawaii, leaving the Philippine economy in a quagmire.

“We went to Japan and we were almost begging for them to put up businesses in the Philippines,” he said. “But these days, there’s a long line of investors for us. They are eager to invest in a wide array of sectors from education and infrastructure to information technology.”

...the PH Stock market

PSEi climbs to 36th record high on foreign buying

 

 

SIEGFRID O. ALEGADO,

GMA News

December 7, 2012

 

 

The PSEi on Friday hit the 36th record high, closing a few points shy of the 5,800 mark, as foreign investments continued to pour into the market.

It gained 0.53 percent or 30.56 points to close at 5,794.2 points – its 36th record high year-to- date – while the broader all-share index rose 0.35% or 12.86 points to 3,716.46.

 

 

More than P4.080 billion shares valued at P8.667 billion were traded. But there were more losers than gainers at 89 to 74, while 47 stocks were unchanged.
 

"Essentially, what's on-going on is increased inflows of portfolio investments," said James Lago, head of reasearch at PCCI Securities Brokers Group.

 

 

Investors "who have maxed-out profits" in other markets went to the local bourse in search of better yields, Lago noted.

 

 

"They're moving some money out of China, India and Indonesia," he said.

 

 

Lago added that he expects a slight correction when trading resumes on Monday.

"Inflation in November, which has reached an eight-month low reaffirms the positive outlook on interest rates which also augurs well for the stock market," PSE president and CEO Hans Sicat said in a statement.

 

 

Benign inflation, which slowed to 2.8 percent in November, provided a springboard for stocks to climb its latest all-time high on Thursday, after taking a breather a day earlier.

 

 

Investors in search of higher returns have flocked into emerging markets amid sluggish growth in advanced economies.

 

 

This, has resulted in the PSEi being mostly bullish for most of the year. — VS, GMA News

...the improved PH key debt ratio

Risk perception of financial community on PH improving

Moody’s expects key debt ratio to fall below 50%

By Michelle V. Remo
Philippine Daily Inquirer

Monday, November 19th, 2012

Moody’s Investors Services has projected that the Philippines’ key debt ratio this year will fall below the 50-percent threshold, from a peak of 74.4 percent eight years ago, due to efforts to shore up revenue collection and reduce liabilities.

The credit watchdog also took note of the improving risk perception of the international financial community on the Philippines as a result of improving credit indicators.

The debt-to-GDP ratio—the proportion of the national government’s outstanding debts to the country’s gross domestic product—is a closely watched indicator of a country’s creditworthiness.

Based on international standards, a ratio of a maximum of 50 percent is considered “manageable.”

“Prudent fiscal management has combined with the solid performance of the balance of payments and economic growth to result in the steady improvement in key debt ratios [including the debt-to-GDP ratio],” Christian de Guzman, vice president and senior analyst for the sovereign risk group at Moody’s, said in a statement issued by Moody’s Monday.

As the country’s debt burden declines, Moody’s said, the government enjoys warm reception of the international market for the bonds that it sells.

For instance, Moody’s said, the $750 million in global bonds sold by the Philippine government this month indicated the significant appetite that investors have for instruments from the country.

The proceeds of the sale were used to partly finance the buyback of nearly $1.5 billion in outstanding debt paper.

Moody’s recognized the prudence of the buyback program, saying it helped the government trim its interest liabilities (given that the interest rate on the freshly issued bonds is lower than the rates of bonds repurchased) and extended the average maturity of its total debt (given that the freshly issued bonds have a longer maturity).

“The Philippines is exploiting favorable financing conditions to accelerate its ongoing debt liability management program,” De Guzman said.

Just this month, Moody’s raised the credit rating for the Philippines from Ba2 to Ba1, or from two notches to just one notch below investment grade.

Government officials hope the country will be given an investment grade by next year.

Meantime, Moody’s Analytics, a research firm and a sister company of the credit watchdog, said in a separate statement that it expects the Philippines to post a GDP growth of 5.2 percent for 2012 from 3.7 percent last year.

The government’s official growth target for this year is between 5 and 6 percent.

A 5.2-percent growth for the full year, however, indicates a slowdown in the second half from the 6.1-percent growth registered in the first semester.

“The Philippines’ economy likely decelerated mildly in the third quarter from the second quarter’s 5.9-percent year-on-year growth pace. This will keep 2012 growth above potential at 5.2 percent,” Moody’s Analytics said.

The projected slowdown on a quarter-on-quarter basis is due to adverse effects of bad weather on agricultural output, it said.

Meantime, the projection of a faster GDP growth for this year compared with last year is attributed to higher government spending, sustained rise in household consumption, and increased investments by domestic firms.

...the Pinoys in Kiwi country

Pinoys help rebuild NZ city destroyed by earthquake By Nicholas Jones  (The Philippine Star)  October 20, 2012

MANILA, Philippines - Filipinos will play a key role in rebuilding a New Zealand city devastated by earthquakes, an example of growing ties between the two countries to be strengthened when President Aquino visits on Monday.

 

Aquino will be in New Zealand for two days and will head a group including a large trade delegation and members of the Cabinet.

 

Trade and business cooperation will be a focus of the visit, with the Philippines targeted by New Zealand as its third-largest market for dairy exports such as milk.

 

But with New Zealand’s Filipino population growing rapidly, cultural ties are also bringing the two countries closer.

 

That has been underlined by Filipino tradespeople’s help in getting Christchurch back on its feet.

 

The city was devastated by a magnitude 6.3 earthquake in February 2011 which killed 185 people – including 11 Filipinos – and left much of the central city in rubble.

 

The cost of the rebuild is estimated at $25 billion and will continue for several years.

 

But with a total population of 4.4 million, there are not enough local tradespeople to get the job done.

Nathanael Mackay, manager of NZ Immigration’s Manila branch, said working visas for the Christchurch rebuild had already been granted to 157 Philippine nationals.

 

That number will grow as the rebuild intensifies, with New Zealand construction companies visiting the Philippines to recruit workers.

 

Up to 30,000 workers – local and foreign – will be required during different times of the work.

 

“The rebuild is expected to create a variety of work opportunities in the Canterbury region, particularly for skilled tradespeople such as painters, carpenters and plasterers,” Mackay said.

 

The Philippines was a main skilled labor market being targeted by New Zealand employers, the others being Ireland and the United Kingdom.

 

Mackay said his office had created a website with the relevant information, and stressed work visas needed to be obtained before arriving in New Zealand.

 

 

Cultural links

 

 

New Zealand Ambassador Reuben Levermore said the Christchurch recovery was just one way the countries were being linked culturally.

 

 

He said the Filipino community in New Zealand had almost doubled in size since the last presidential visit in 2007.

 

 

“Small numbers in Philippine terms... heading towards 40,000 people – but that’s also heading towards one percent of our population,” he said.

 

 

Most of those people were skilled migrants, Levermore said.
 

The Philippines is currently New Zealand’s fourth-largest source of skilled migrants.
 

“These are people who are engineers, nurses, IT professionals, and now dairy workers as well. And they have a good reputation,” Levermore said.

 

 

His sister has a dairy worker from Mindanao on her farm in New Zealand’s mid-Canterbury region.

 

 

“If you live in rural New Zealand, you’re probably not going to know much about the Philippines. But again, it’s that human element.”

 

 

Levermore said as people learn more about each other they would do more together – whether in tourism, business, or education.

 

 

“Maybe in time New Zealanders might start to think, I’ll go on holiday there. We go to Bali, we go to Vietnam and Thailand.”

 

 

Filipinos had proven themselves ideal migrants to New Zealand, Levermore said.

 

 

“They speak English, they are very outgoing, friendly people who integrate well. And the fact that most Filipinos are Catholic, means they connect well to our Catholic communities in New Zealand.”

 

 

Communications Secretary Ricky Carandang, speaking to The STAR before he flew to New Zealand this week, said those shared values were at the base of the countries’ relationship.

 

 

President Aquino’s party will also visit Australia after two days in New Zealand.

 

 

“It doesn’t always make it to the headlines, but the ties are deep, they are historical, and they are multi-faceted,” Carandang said.

 

“We are a Christian-based democracy. And there aren’t many of those in Southeast Asia. We have shared values with Australia and New Zealand.”

 

 

Business high on agenda

 

 

During the state visit, the Philippines and New Zealand are set to sign a number of agreements to expand business between the countries.

 

 

The finalization of the Philippine Dairy Development Program and a Memorandum of Agreement on geothermal energy cooperation are likely to be on the agenda.

 

 

Levermore said energy was an example of how New Zealand expertise could benefit the Philippines.

 

 

The countries had much in common in terms of energy generation, with both producing hydro and geothermal energy, he said.

...the next Tiger Economy (US expert)

2 US experts see PH under Aquino Asia’s next tiger economy

By Michael Lim Ubac
Philippine Daily Inquirer

Sunday, August 5th, 2012

 

 

 

President Benigno Aquino III. INQUIRER FILE PHOTO

The Philippines is now out of the doldrums and on the verge of an economic takeoff, according to two visiting foreign economists.

The Philippines under President Benigno Aquino III has the “best chance” of becoming a tiger economy in Asia as emerging markets led by China have started slowing down, while the debt crisis in the euro zone and the faltering United States economy continue to spook the markets, said Drs. Tyler Cowen and John Nye.

Cowen and Nye, who are both professors at the George Mason University in Washington, D.C., were two of several foreign speakers at the inaugural conference on Friday of the Angara Center for Law and Economics, a think tank founded by Sen. Edgardo Angara that will undertake economic research and innovative public policy solutions.

Nye, who has been named executive director of the Angara Center, is also research director at the Higher School of Economics in Moscow, Russia, a founding member of the International Society for the New Institutional Economics, and in 1997 became a National Fellow at the Hoover Institution in Stanford University.

Cowen’s most recent book, “The Great Stagnation: How America Ate All the Low-Hanging Fruit, Got Sick, and Will (Eventually) Feel Better,” was one of the most debated nonfiction books in 2011.

Economic liberation

“The Philippines has strong economic fundamentals,” said Cowen, citing the economic gains of the two-year-old Aquino administration, English proficiency and the Filipinos’ belief in education as the key ingredients for economic liberation.

“I would say, maybe, it has the best chance. It really depends on human agency and human volition and making [the] right choices,” he said.

“If you’re asking what should we look for in a country to be a future winner, I would say look for rising growth, look for a relatively stable fiscal situation. I think skills in English will become increasingly important, a belief in education even though a country’s educational institutions may have problems.

“And if I ask myself those starting questions, and then I look out there in the world, and I look at the globe and turn it around, guess which country my eyes stop on?” Cowen said.

Nye cited the “hot money flowing into the Philippines” and the rapid transformation of the country’s telecommunications industry—from very few telephone landlines in the 1980s to almost 80 to 90 percent of Filipinos owning cellular phones today.

Seize the moment

Recalling how he had witnessed the ebb and flow of the country’s economy as the longest-serving senator in the post-martial law era, Angara called on Filipinos to seize the moment.

He noted that successive governments after President Fidel Ramos failed to follow through on reforms that earned for the country the title of “Asia’s next economic tiger” before the advent of the Asian financial crisis in 1997.

“I remember very distinctly—I was Senate president in the mid-1990s—that because of close collaboration between the executive and the legislature, we pursued a common agenda and nearly made it,” said Angara.

“For the first time in history, we had a surplus because we introduced the value-added tax, we revamped the central bank, the education system, the health system and such. But in the end, the promise of the Philippines becoming the new tiger economy didn’t materialize because, I think, we dropped the ball at the last minute, and in many cases that has been the story of the Philippines,” he said.

“We were unable to sustain because we didn’t pursue the structural reforms that would have pushed it and would have sustained it and made us a true tiger. Now, we’re back to that potential, that promise. The potential can only be achieved by a series of key interventions,” he said.

The senator mentioned key reforms in the economy such as in human capital, health, education, science and technology, research, renewable energy and infrastructure as the areas to support to achieve the sustainable growth that would trickle down to the poor.

Angara singled out infrastructure development as the one that would speed up the “momentum of change” since this would connect economic zones and big islands in the country.

“Unless you provide mobility to labor, then you get stuck in Samar or Leyte, and they’ll do anything to get to Metro Manila and create those slums. Infrastructure is key. How many airports do we have that are unflyable because there are no connecting roads?” he said.

Poor policymaking

Angara personally invited Cowen and Nye, among other experts in law and economics, both foreign and local, to tackle global economic reforms and to identify the key factors for achieving economic growth.

“Now is an auspicious time to launch the center. President Benigno Aquino III is projecting a strong economic takeoff for the Philippines—and the center is in a position to contribute toward making growth sustainable,” he said.

“This is a small, initial step toward trying to open the Filipino mind to the outside world. As all the speakers have said, we try to create new ideas, new insights so that we can join the global conversation,” he said.

Angara said he had seen the “poor quality of policymaking in this country.”

Opportunities in recession

“We have really good research and researchers, but we have no organized research on strategic areas—research that will support lawmaking and administrative and executive policymaking.”


The conference tackled wide-ranging issues such as global investment, human capital, corruption, international arbitration and enforcement, dispute settlements, and public policy issues in international trade and investment.

Cowen, ranked one of the world’s most influential thinkers by Foreign Policy magazine, led the panel discussion on “Globalization, Innovation and Economic Growth.”

He enumerated the current economic opportunities for developing countries as well as the issues on institutional reform and how to take advantage of the slowdown in the largest economies.

“Recession creates opportunities. What is it you are doing now to move forward?” he said.

According to Cowen, the Philippines has joined the ranks of a select group of emerging economies that global fund managers and investors are seriously taking notice of. The others are Indonesia and a few sub-Saharan countries.

Cowen’s plenary address was followed by lectures from eminent scholars in the field.

Focus on 2 areas

Nye explained the interaction among human capital, social norms and the creation of institutions, and the importance of simple and consistent rules that are clearly enforced to address corruption.

To achieve long-range changes, he said the Philippines should focus on two areas: simplify the rules and further open up the market.

“The most important change is the mindset of protection and nationalism. There are good reasons to protect the Philippine economy, but there are also bad reasons,” he said.

“Isn’t there some compromise where we loosen up these laws a little bit? I’m not talking about removing these laws, just opening up enough to attract more investments, more development, more decentralization so we can hire more of those workers here in the Philippines,” Nye said.

He talked of ways to “transition” the agriculture industry.

“If you look at China’s development, a lot of their developments over the past 40 years boils down to helping more people move from the countryside to the city and turning more cities into development areas,” he said.

He ended with a question better answered by President Aquino and his economic advisers: “How do you make the policy good and credibly consistent?”

Other guest speakers included Dr. Alberto Simpser, professor Benito Arruñada, professor Tom Ginsburg, Dr. Yas Banifatemi, Dr. J. Romesh Weeramantry, Dr. Nils Eliasson, Dr. Chiann Bao and Prof. Jeff Waincymer. The day-long program was hosted by Cheche Lazaro of Probe Productions.

...the PH gender equality ranking

PH ranks 6th in WB on gender equality

 

By Ted P. Torres

The Philippine Star

06/24/2012

 

 

MANILA, Philippines - The Philippines ranks sixth out of 129 countries in gender equality, a World Bank (WB) study showed.

 

But WB country director Motoo Konishi said there are a lot of challenges remain despite the country’s advancement in gender equality.

“The maternal mortality rate is still very disturbing, cultural differences among the indigenous people still discriminate against women and of course, the prevailing poor economic conditions threatened by increasing natural disasters,” Konishi said at the formal launching last Thursday of the study entitled “Toward Gender Equality in East Asia and the Pacific.”

Konishi added that economic growth would not be sustainable unless the Philippine government puts in place more policies that encourage gender equality.

The WB report said worker productivity in the Philippines and the rest of the East Asia and the Pacific region has the potential of expanding by 18 percent if women are given wider space.

WB lead economist and principal author of the report Andrew Mason said East Asia and the Pacific region is vast and diverse, with large differences in economic and social progress, including toward gender equality.

“In some ways, women in the region are better positioned today than ever before to participate in, contribute to, and benefit from development. But much more needs to be done,” Mason said.

The report noted that Filipino women only get 76 percent of what men earn. Also, women in the Philippines and the rest of the region are more likely to work in small firms, the informal sector and lower-paid sectors.

“Healthier, better educated mothers have healthier, better educated children. So if we can make the right decisions and allocate the right resource now, we are also investing in the next generation of Filipinos,” the report said.

Social Welfare and Development Secretary Corazon Soliman, for her part, said much remains to be done even though the Philippines has achieved much in encouraging gender equality.

“If human beings were discriminated according to gender, then development is incomplete,” Soliman said.

She said of the 7.4 million underemployed in the country, 32.4 percent or 2.4 million are women, while 67.6 percent or 5 million are men.

Soliman also noted that a woman heads one in every five families and has more income compared to a male-headed family.

“In addition, these female heads are more highly educated than the male-led families,” she said.

Soliman said majority of micro-borrowers are women, as they are considered more credit-worthy than their male counterparts.

She said the Philippines is also known globally for having two female heads of state.

“However, men continue to dominate majority of the senior posts in electoral positions where women account for only 23.2 percent,” she said.

---

...the young Pinoy scientists 2

Filipino students to present research in Intel science tilt

 

By Nikka Garriga

loQal 

07 May 2012

 

 

MAKATI CITY, METRO MANILA—Eight young Filipino students will represent the country at this year's Intel International Science and Engineering Fair (Intel ISEF).

The delegates will present their own research studies that aim to build awareness in prevalent social, ecological and economic issues.

One of the participants, 17-year old Elson Ian Galang, will present an eco-friendly and economically-competitive version of a fabric made of fibers from fragrant screw pine or pandan.

Elson hopes to establish pandan fiber as a viable alternative to synthetic polyester in the Philippine fabric and garments industry.

Fifteen year-old Ven Gabriel Tan focused his study on the potential of herbal plants as source of copper ions in mined-out and heavy metal amended soil. The research focuses more on global resource conservation and pollution prevention efforts.

Tan, the youngest among the delegates, aims to offer mining communities a potential solution to address the issues of mining waste and contaminated soil.

Meanwhile, the team of Hazel Anne Hernandez, Julian Paolo Biyo, and Paul Caesar Flores will present their work on coral transplantation.

The group was awarded the Most Promising Young Scientists in the recently-held SEAMEO Young Scientists Congress. They hope to provide environmental and economic support to communities who rely on coral reefs for livelihood using bamboo and concrete materials for conservation efforts.

The work of 16 year-olds Bryce Años, Lanz Gabriel Jabla and Carla Lazara looks into the potential of sea hare ink to help treat diseases involving atrophy, the deterioration of a body part or tissue.

Sea hares are medium to large-sized sea slugs that secrete ink as a potent deterrent to predators.

“Sea hares may not the prettiest or most powerful of animals, but through our research, we found their potential to make a significant contribution to science and medicine,” Lazara said.

The Intel ISEF is the world's largest international pre-college science competition, providing an annual forum for more than 1,500 high school students from 65 countries to present their independent research.

Last year, Miguel Arnold Reyes bagged the second grand award in the Materials and Bioengineering Category and also got an asteroid named after him.

This year's delegates will compete in two team categories and two individual categories in Pittsburgh, Pennsylvania from May 13 to 18.

(Photo courtesy of Intel Philippines)

...the sick man of Asia no more

‘PH not sick man of Asia anymore’

By Doris C. Dumlao
Philippine Daily Inquirer

Saturday, May 5th, 2012

The Philippines, which has lately seen new record highs in stock market trading, is making good progress in creating a more favorable image in the international community, according to the Filipino chief executive officer of the Bank of Singapore.

 

 

“The image is improving a lot… It’s not the sick man of Asia anymore. There’s less corruption,” said Renato de Guzman, CEO of the global private bank, who was interviewed on the sidelines of the Asian Development Bank (ADB) annual meetings Friday.

 

 

According to De Guzman, the Philippines has learned well the lessons of the previous Asian financial crisis (of 1997), following which local banking regulators introduced an array of reforms that have kept the banking system “quite insulated” from the subsequent US financial crisis in 2008 and the lingering crisis in Europe.

“I think confidence is high,” said De Guzman who served as one of the panelists at a business forum within the ADB meetings sponsored by BNY Mellon. The forum discussed the impact of the US financial crisis three years after.


Revenue the weak spot

The banker is hoping the Philippines would merit a sovereign investment grade rating but does not think this would necessarily happen within the year.

“It’s the revenue that’s still the weak spot,” De Guzman said.

According to some analysts, the international credit-rating agencies are waiting for the Philippines to pass new revenue-generating measures in Congress before giving the much-coveted investment grade rating.

But even without such a rating, financial markets have priced Philippine debt as if it were investment grade, they said. For instance, they have allowed the Philippines to sell offshore bonds at a lower cost than investment-graded Indonesia.

De Guzman helped build the franchise of Dutch financial giant ING in the Philippines, which was among the 10 new foreign banks allowed to set up local branches in the mid-1990s. He then relocated to Singapore to head ING’s Asian private banking business which was sold to the OCBC Group in early 2010. The Bank of Singapore, which he heads, is an OCBC subsidiary solely focused on the private banking business.

Emerging markets

De Guzman said the Bank of Singapore was still upbeat on emerging markets.

“The growth rates are still there. The banking system is healthy. In terms of debt side, default rates are low and expected to remain low so I think there will still be more debt issuance. And then the debt to GDP (gross domestic product) is very low. Foreign debt against foreign reserves is very low. The fundamentals are very strong,” he said.

The Bank of Singapore has an “overweight” rating—or a recommendation to accumulate more assets than prescribed by the benchmark—on equities and high-yield emerging market debt.

“Even with the volatilities, there’s a lot of opportunity to buy,” he said.


PH stocks ‘very expensive’

In equities, De Guzman said his bank favored the US and China. In the case of China, he said valuations were very attractive.

On the other hand, stocks in the Philippines and Indonesia have become “very expensive,” he said.

Speaking at the BNY Mellon forum, De Guzman said private banking clients are demanding more risk management knowhow from their bankers and have become more selective in investing. They have also started doing business with multiple institutions instead of choosing just one.

Private banking clients now also favor simpler, more liquid assets and are giving a higher allocation to cash.


“They want more diversification,” he said, adding this meant that private bankers would have to offer “more tailored” solutions to high-net-worth clients.

Desmond Mac Intyre, president and CEO of Standish Mellon Asset Management Co., said investors were still chasing yield and in the past two years have been moving funds to emerging markets on a “strategic” instead of “tactical” basis.

“Ultimately it’s not a short-term phenomenon. It (emerging market) will be a structural asset class,” he said.



Whether it’s a central banker or a pension fund, investors will continue to turn to emerging markets as they focus on their liability management, said Mac Intyre.

...the preferred investment destination

PH seen becoming preferred investment destination of MNCs

By: Doris C. Dumlao
Philippine Daily Inquirer

Thursday, May 3rd, 2012

 

 

The Philippines is emerging as a favored investment destination of large multinational corporations seeking to diversify their global manufacturing operations as factory costs rise in China, an official of investment banking giant BofA Merrill Lynch said.

 

 

James Quigley, New York-based executive vice chairman for international corporate and investment banking at BofA Merrill Lynch, said in a briefing on Wednesday that 20 years ago, chief executive officers of big multinational corporations would say it was difficult to do business in the Philippines because everything would depend on who you know and whom you were connected to.

“But now I think there is greater transparency, higher fundamental comfort level of doing business in the country. As companies around the world diversify their manufacturing footprint, given the Philippines’ centralized location in Asia, its historical close ties with the United States, and because of its highly regarded free democracy that works, with its strong demographics, it is a place where you can move your manufacturing operations to other than China,” said Quigley, who is in town to attend the Asian Development Bank meetings.

“Should it continue to do the right thing—that will increase its share of FDI [foreign direct investment] flows,” he said. “I feel very strongly that as MNCs look to move labor-intensive manufacturing operations to emerging markets, the Philippines can increasingly become the preferred destination of those FDIs.”

Based on feedback from corporate leaders around the world, Quigley said investors were becoming “uniformly comfortable” with the actions of the Philippine government.

The BofA Merrill Lynch executive said investors were happy to see public fiscal sector surpluses, more equity and fixed capital formation and a sound local banking system.

“The demographics are compelling with a growing middle class, a need for significant infrastructure investments and the increasing world-class multinational companies based in Manila,” Quigley said.

The investment banker added that Manila was likewise logistically well situated within Asia. Today, he said worker remittances were still important but in the context of overall economy, it was becoming less important.
“There’s real growth locally. People are focused on demographics, on political stability and the success of the democracy and local policies,” he said.

At present, the investment banker said many multinational corporations were diversifying out of China in the same way that financial institutions spread out risk assets to mitigate earnings volatility or that asset managers invest in a pool of assets to temper volatility in returns.

“Gone are the days of over-concentration of manufacturing in one jurisdiction, and CEOs, from the standpoint of good corporate governance and business practice and risk management, are looking to diversify their manufacturing facilities. I think the Philippines stands to benefit from that,” he said.

Other emerging markets in Asia that were attracting a lot of interest from those setting up overseas factories were India, Indonesia, Vietnam and Thailand.

...the good payer

Japan: Philippines A Good Payer

Manila Bulletin

27February 2012

OSAKA, Japan - The Philippines has yet to settle some ¥ 965 billion (P512.4 billion) worth of development packages it borrowed from Japan in the past years, making it the fourth country across the world with a huge outstanding loans based on the list of the Japan International Cooperation Agency (JICA).

But the good news is that the Philippines has no current pending loans from Japan and is assessed to be a good payer, according to Michino Yamaguchi, of the JICA-Media Division.

"The Philippines repays the outstanding loan steadily," said Yamaguchi.

Based on JICA records, most of the loan packages were spent to transportation-based projects like building of roads, bridges, ports, and airports across the Philippines.

From 1971, Japan has already infused some ¥ 757 billion in the transportation-based projects, accounting for 35 percent of the entire development loan assistance to the Philippines.

Commodity loans came next with 19 percent, followed by electric and power-related projects with 13 percent, Agriculture/Forestry/Fisheries with 11 percent and Irrigation and Flood Control with 10 percent.

A total of $20.5 billion has already been lent to the Philippines via Japan's Official Development Assistance (ODA) to the Third World Countries, but only ¥ 965 billion remain unpaid so far.

"As the Philippines is classified to be a Lower-Middle-Income country based on Income Category of the World Bank, the terms and conditions of Lower Middle Income Countries are applied," said Yamaguchi.

As a lower middle income country, the Philippines is accorded concessional terms on its ODA loan availment. These include a 1.4 percent interest with repayment period of 30 years, including a 10-year grace period.

Topping the JICA list is Indonesia, followed by China then India. Completing the Top 10 list are Vietnam, Pakistan, Thailand, Sri Lanka, Egypt, and Turkey.

Tsutomu Kudo, director of JICA-Media Division, said the ranking is as of 2010 as he explained that they are yet to wait until the end of next month to complete the figures for 2011.

"These loans have to be repaid," said Kudo, as he noted a downtrend on the amount being allocated by Japan for development assistance to the needy countries since 2005.

Kudo admitted that the downtrend was brought by the global financial crisis in the past years but he revealed Japan's plan to increase the ODA fund in the coming years.

But this time, he said the funds will be focused on countries that need most of foreign assistance like African countries.

JICA is the executing agency of Japan's ODA and works in more than 150 countries. Aside from granting loans, it also uses other ODA tools such as technical assistance and providing study grant to students and professionals of Third World countries.

...the path of high growth potential

Philippine economy seen heading toward high-growth path

CLSA study sees start of private investment cycle

By: Doris C. Dumlao
Philippine Daily Inquirer

 Monday, February 27th, 2012

 

 

“The transformation continues for Asia’s once most promising..." - Mitzie de Dios, CLSA Asia-Pacific

 

 

The Philippines is undergoing a renaissance that looks all set to bring the economy to a higher trend growth and power stocks to new heights, according to regional investment house CLSA Asia-Pacific.

 

In a research titled “The Eagle Flies Again” dated February 20, the CLSA report written by analyst Mitzi de Dios said that like the rare endangered Philippine eagle, a private sector investment cycle was a rare sighting in the country. But now, it said the country was on the cusp of another investment cycle for the first time in 15 years driven by political stability, rising business confidence, low interest rates, robust balance sheet and the country’s long-term demographic potentials.

“The Philippines soars like an eagle, again,” the research said, adding, however, that this time around, there was hope that this nascent recovery would not be as endangered as that rare eagle.

After years of false starts and missed opportunity, there was a real sense of optimism building in the business community, the research said, suggesting the time was right for the Philippines to shed the stigma of being the “sick man of Asia.” Beyond the huge remittances from overseas Filipinos, CLSA said the country could now count on other major growth drivers.

“The transformation continues for Asia’s once most promising. The service sector continues to grow with the BPO [business process outsourcing] segment underpinning rising employment and per capita spend. Tourism and gaming are other drivers,” the research said.

Well known globally for the Philippines’ quality service sector, CLSA said the BPO sector would likely see its employment doubling to 1.2 million and generating revenues of $25 billion by 2016. The employment opportunities will keep more locals at home while per capita income should improve and the middle class continue to grow, the research said.

The country’s middle class was growing at 9 percent a year and by 2015 could well represent a fifth of the Philippines’ population, the research said.

“For sure the country’s middle class is still nascent, especially in areas such as investment. Most have their savings in fixed income and have yet to invest in equities in a big way,” it said.

CLSA recounted that the last investment cycle in the Philippines took place in the early 1990s under President Ramos, who deregulated the telecom and banking sector, which coincidentally laid the foundations for the growth and development of the BPO industry over the past decade.

In the past 12 years, the country’s gross domestic product growth averaged 4.54 percent with population growth of 2.6 percent in the past 10 years. CLSA said trend GDP growth should be higher starting 2013.

“The country’s economic growth has lagged its regional peers. But, without much fanfare, the economy has transformed itself into an emerging services center, laying the foundations for today’s growth,” it said.

What all this meant for stock market investors, CLSA said, was that old reliable names and upcoming companies would be the ones investors should own. By sector, it said conglomerates, banks, construction and infrastructure firms would likely outperform.

CLSA has recommended a “conviction buy” on Ayala Corp., Metro Pacific Investments Corp., Cebu Air, Philippine National Bank, Security Bank and Robinsons Land Corp.

For specific infrastructure play, CLSA also has “buy” ratings on construction firms Megawide Corp. and EEI Corp. and a buy rating on Metrobank.

Bonifacio Global City was cited as a “microcosm” of the change afoot in the broader economy. “Fifteen years ago it was a military camp most famous for the incarceration of Sen. [Benigno “Ninoy”] Aquino.

Today, it is home to high offices, luxury residential towers and upmarket shopping centers catering to the emerging middle class,” the research said.

The CLSA report also noted that total tourist arrivals hit an all-time high of 3.9 million in 2011 and was forecast to grow at double-digit rates over the next few years, eventually hitting more than eight million by 2016. The tourism industry employs 3.7 million people and tourism receipts accounts for 2 percent of GDP.

...the underrated (economy)

Purisima tells ratings agencies: PH is underrated

 

ABS-CBNnews.com

Posted at 02/21/2012

 

 

MANILA, Philippines - The Philippines deserves a second look on its credit rating, Finance Secretary Cesar V. Purisima told representatives of two ratings agencies in London.

 

Purisima had a meeting with representatives of Fitch Ratings and Moody’s Investors Service, where he updated them on Philippine economic developments.

"I met with them (Fitch and Moody’s) to continue our dialogue on the strength and resiliency of the Philippine economy, as well as to discuss our view that the Philippines continues to be underrated," he said, in a statement.

"The market has already recognized the Philippines’ resilience and the strength of our credit standing and is rating us as investment grade... In fact, our bond issuance in January marked the lowest USD coupon ever achieved by an Asian Sovereign for a bond with a tenor greater than ten years," Purisima said.

The credit rating agencies took note of the Philippine government's improving debt and revenue ratios. They were also encouraged by the Aquino administrations efforts to improve tax administration and push for sin taxes.

"The ratings agencies are very keen on our push for reforms in the sin taxes. A World Bank study estimates that we could gain as much as 1.3% of GDP in additional revenues from reforms in the sin taxes like uniform tax rates and indexation. Such an improvement in our tax base would definitely boost our drive towards investment grade," Purisima said.

---

...the "sick man of Asia" no more

Philippines tries new tack: healthy man of Asia

By Rosemarie Francisco and Jason Szep,

Reuters

02/20/2012

The Philippines, the perennial "sick man of Asia", has rarely looked healthier and investors are placing their bets.

MANILA, Philippines - It is getting busy in Cristino Naguiat's spacious 5th-floor office overlooking Manila Bay.

The chairman of gambling regulator Philippine Amusement & Gaming Corp is fielding calls and booking appointments to meet possible investors in a sprawling gambling and entertainment project his government hopes will rival Las Vegas in five years.

Among them: Casino billionaire Francis Lui of Galaxy Entertainment Group Ltd and executives from Melco Crown Entertainment Ltd, controlled by Australian billionaire James Packer and the son of Macau gambling mogul Stanley Ho.

"There is growing interest. The fact that in just two weeks I have had two visitors from big companies in Macau says something about it," said Naguiat, a veteran of the gaming industry.

"Investors are having a second look at the Philippines. The fundamentals are very good."

The Philippines, the perennial "sick man of Asia", has rarely looked healthier and investors are placing their bets.

Its stock market, the best performer in Asia last year, is up nearly 13 percent this year to a record high on Monday. Benchmark 10-year government bond yields are down about 44 basis points, as prices jump.

Overseas buying of Philippine stocks hit a record $938 million in the fourth quarter, and the pace has quickened this year, according to TrimTabs Investment Research.

Economic growth is projected at about 4 percent despite global headwinds, about middle for the region.

Easing inflation, among the lowest in Southeast Asia at 3.9 percent in January, gives the central bank room to cut rates by at least another quarter-point this year. Infrastructure spending is rising.


Pressure on President

But as investors crowd into Manila's hotels, pressure is growing on Philippine President Benigno Aquinas III to go beyond usual half-hearted attempts to crack down on corruption, fix a stifling bureaucracy and find new streams of revenue in a country whose earnings usually end up in the hands of the elite.

Several crucial tests loom, including his pursuit of graft allegations against Gloria Arroyo, who until June 2010 was president, and the impeachment trial of the Supreme Court's chief justice, accused of protecting Arroyo from investigation.

Both cases could determine whether the Philippines moves ahead or withers again as a choice for investors after a brief spell of optimism.

Although he enjoys a 72 percent approval rating after 1-1/2 years in office, the odds are stacked against him.
"He is trying to transform the mindset of the people from being always suspicious to being hopeful, trustful of government," said Philippine Secretary of Finance Cesar Purisima in an interview at his home in a leafy Manila neighborhood.


"Blooming tiger"

The "rise" of the resource-rich Philippines has been hailed before, only to disappoint. About a third of the archipelego's 94 million population still lives below the poverty line, fuelling an exodus of 4,000 workers a day joining a huge Filipino diaspora seeking opportunities abroad.

In the 1950s, it boasted one of the highest per capita incomes in Asia. President Ferdinand Marcos, however, intervened with two decades of dictatorship.

Optimism surged anew when Marcos fled a "People Power" revolt in 1986 that swept to Aquino's mother, Corazon, to the presidency. On January 30, 1997, then-Finance Secretary Roberto De Ocampo uncorked champagne on the stock-exchange floor as share prices pierced all-time highs, toasting "the blooming tiger economy of Asia" and predicting the Philippines would soon catch up with South Korea and Singapore.

Another flutter of optimism occurred in mid-2007, as the economy approached its best performance since the 1990s, pushing up stock prices and luring back foreign investors. Yet again, hopes were crushed.

Corruption, cronyism and personality-driven politics flourished, squeezing the life out of reforms.
The $200 billion economy is on stronger footing this time.

Corporate balance sheets are in the best shape in a decade with gearing of less than 60 percent. The government's budget gap has narrowed to about 2 percent of the economy from a record 5.3 percent in 2002. Remittances from overseas Filipinos remain steady at 10 percent of GDP, and consumer debt as a proportion of the economy is just 7 percent, the lowest in Asia.

"The Philippines economy is clearly at the stage where it will be attracting more investor interest," said Prakriti Sofat, regional economist at Barclays Capital.

UBS offered an even rosier view. "We think the Philippines has one of the most attractive medium-term investment and consumption growth stories among emerging markets," its economists said in a Jan. 11 report, calling it a safe haven in turbulent times.

The buzz is drawing inevitable comparisons with another booming Southeast Asian former basket-case: Indonesia.

Both mostly escaped fallout from Europe's debt crisis. Both limped to the International Monetary Fund for bailouts in the Asian crisis of the late 1990s. And both have since built up their reserves and slashed debt. In the Philippines, foreign exchange reserves have more than tripled since 2005.

Indonesia has been rewarded with a return to investment grade status. Many think the Philippines is next.
Standard & Poor's Corp upgraded its outlook on Philippine debt in December to positive from stable. In June, Fitch Ratings raised the Philippines to one notch below investment grade, citing better government finances, a more stable economy and "favorable economic prospects".

"If Indonesia is investment grade, we cannot be two notches below Indonesia," Purisima said.

Like Indonesia, the Philippines' public debt as a percentage of GDP is falling, dipping to 57 percent from 79 percent in 2005. Indonesia, its population and economy more than twice the size, has done better, halving the ratio to 23.5 percent, according to Bank of America Merrill Lynch economists.


"Cautious"

But making money in the Philippines remains difficult.

Its stock prices are among Asia's most expensive. Investment protection laws are opaque and government revenue is the weakest in Southeast Asia at just 13 percent of the economy. Long-running Communist and Muslim insurgencies and complex regulations deter mining investments.

"The economy seems to be on the mend, however when you look at the stock market, it is relatively small for a country that size and the good stocks are very expensive," said emerging-market investor Mark Mobius, executive chairman of Templeton Asset Management Ltd in San Mateo, California.

Valuations have been rising: the MSCI's index of the Philippines, for instance, trades at 15.2 times 2012 earnings, up from 13.5 times a year earlier. Compare that to Singapore's 13.3 times, Malaysia at 14.3, Thailand at 10.6 and Indonesia at 12.90 times.

The problem, however, goes beyond high prices.

"You have to be quite cautious when looking at the Philippines. What's needed in the Philippines are more IPOs, more companies going to the market," said Mobius.

Just eight companies launched initial public offerings (IPOs) to list their shares in the Philippines between 2008 and 2011, a sharp contrast to 76 in Indonesia, 85 in Malaysia, 50 in Vietnam and 49 in Thailand, according to Reuters data.

That, too, appears to be changing. The Philippine Stock Exchange forecasts a doubling in total fund-raising to about $4.7 billion this year after foreign inflows into stocks rose more than three-fold in the first six weeks of the year to $351 million, overtaking net buying for all of 2009.


Multinationals needed

But Aquino needs to attract more than just portfolio money. He needs spending by multinationals.

The Philippines attracted just $1.7 billion, or 2.3 percent of the $75.6 billion of foreign direct investment (FDI) that flowed into the 10 members of the Association of South East Asian Nations in 2010, trailing Singapore, Indonesia, Malaysia, Vietnam and Thailand, the most recent ASEAN data shows.

In the 10 years to 2010, the country's annual net FDI never exceeded $2 billion.

"You have to look at the foreign investors negative list (FNL) -- no changes in 10 years; it essentially stayed the same," said Jeffrey Woodruff, executive director of the American Chamber of Commerce in Manila, referring to the list of sectors with limits to overseas investors.

"The only changes came in allowing investment in gambling, which took place a few years ago. Other than that, there's been no change in the FNL for a decade," he said.


Graft, mining troubles

A report from the World Bank's private sector arm, the International Finance Corporation, helps explain the trickle in investments: the Philippines ranked 136th out of 183 economies globally for the ease of doing business last year, and scored even lower for starting businesses. Overall, it was one place worse than the Sudan and two behind Syria.

To try to address that, the government has set up one-stop-shops in 252 economic zones to help investors.

Outside those areas, however, lie thickets of red tape and bribes for permits.

Mining investments are especially difficult.

In 2005, the Philippines' Supreme Court upheld a law allowing full foreign ownership of mining projects. Top global miners such as BHP Billiton started investing, lured by an estimated $1 trillion in untapped mineral resources. But strong opposition from the Catholic church, mine accidents, a strong anti-mining lobby and the previous unpopular government's unwillingness to counter public opinion drove most miners away.

Xstrata Plc's $5.9 billion Tampakan project in southern Philippines, Southeast Asia's largest undeveloped copper-gold prospect, has yet to move off the drawing boards, caught between local and national policies on mining.

Turning that around and improving decrepit infrastructure are central to Aquino's plans as he tries to attack graft and low tax revenue that have undermined public spending.

December's successful bidding of the Philippines' first public private partnership project, the Daang Hari SLEX expressway, will be followed by at least $1.8 billion in similar auctions this year and $17 billion in the next five years.

"The Philippines appears to be at an inflection point," said Pauline Ng, investment manager for the Pacific at JP Morgan Asset Management, which oversees $102 billion in Asian client assets. "Sectors like industrial land, property, toll roads and cement will be key beneficiaries of investment-led growth."

The country is plagued by chronically low tax collection and domestic credit too is falling -- at 8 percent as of June 2011 from around 17 percent in 2008 and well 15 percent in Indonesia and Thailand.

Aquino, 52, has vowed to enforce tax rules better before imposing new taxes or raising them. But he hasn't got far. Tax revenue rose to 12.3 percent of GDP last year, barely up from 12 percent in 2010 when it was the lowest in at least a decade.

He has now begun to raise duties on alcohol and tobacco -- steps that could generate $1.4 billion in 2012 and $2.75 billion by 2014 if passed by Congress.

He hopes these and other measures will lift the economy's growth rate to as fast as 8 percent during his single term mandate that runs to 2016.

He enjoys almost unprecedented support. He is the first president since his mother to have backing of both chambers of Congress after winning elections in May 2010 by a record margin.

He owes part of his popularity to his revered family name and its reputation for probity. His father, Benigno, was an opposition leader assassinated during the Marcos era.

"This is a rare occasion in the Philippines where you have a president who has the largest mandate ever and he wants to use that mandate to really transform the country," Purisima, the Secretary of Finance, said.
But it is unclear whether he will succeed in his biggest challenge of all: a confrontation with what he calls an obstructionist judiciary beholden to his predecessor.

As his government attempts to impeach Supreme Court Chief Justice Renato Corona, the stakes could hardly be higher. If the impeachment fails, Aquino has said it would virtually destroy his efforts to end corruption.

The final decision rests with the Senate where Aquino's party faces a struggle to win enough support to convict Corona.


Young population

Fund managers such as Ng see opportunities for gains in stocks exposed to consumers. UBS, for instance, likes PLDT , the country's largest telecommunications company, and BDO Unibank Inc.

Part of the Philippines' allure is its youthful population. Half the population is under 20 years old, many speak English -- a legacy of its past as an American colony - and the population itself is projected to swell to 190 million by 2040.

Remittances from more than 10 million overseas workers are a growing source of growth, pumping $20 billion into the economy last year.

The Philippines' business-outsourcing industry, including call centres, is also growing fast. It is projected to generate revenue of at least $13 billion this year, rising 20 percent from 2011 and more than four-fold from six years ago.

Aquino also has another wager that plays directly into hopes to transform Manila into a Southeast Asian Las Vegas.

He has targeted a rise in tourism to about 10 million visitors by the end of his term, from about 3.9 million now.

The Philippines awarded four licenses in 2008 and 2009 to operate casinos in a gambling and entertainment complex in Manila. Each Philippine licensee agreed to invest $1 billion over five years. Three of the four licenses went to a venture between Genting Malaysia Bhd and Alliance Global Group Inc , Philippine property developer Belle Corp, and ports tycoon Enrique Razon's Bloombury Investments Holding Inc.

But why should a wealthy gambler from China come to the Philippines instead of gambling resorts that have sprouted in Singapore, Macau in China and Genting in Malaysia?

"No gambler will play and lose everything in the same casino," Naguiat, the gaming regulator, said. "Look around. We're part of this circle. They'll go to Macau, they'll go Genting. They'll go to Singapore and they'll go to the Philippines."

...the bright prospect

After lean 2011, bright economic forecast and rosy signs for '12

GMA News

February 19, 2012

Economic planners of the Aquino administration are sticking to their merchandise exports forecast of 10 percent this year, despite their failure to meet their 2011 projection, National Economic and Development Authority Director-General Cayetano Paderanga Jr. said Sunday in a statement.

The NEDA chief did not give specifics on what the Aquino administration will do in the short term to attain the $62.3 billion goal – an uphill climb from $47.9 billion last year. He reiterated an oft-repeated remark about “diversification strategies... to minimize the country's vulnerability to adverse shocks, both external and domestic.”

Historical data on Philippine exports show 2009 and 2011 as decline years. From the dip in 2009, the exports sector recovered in 2010. Economic planners are hoping for a similarly strong performance in 2012.

Meanwhile, the Wall Street Journal painted this weekend a rosy picture of early 2012. "Investors appear to be responding positively" to Aquino's anti-corruption campaign, according to the newspaper's correspondent James Hookway, highlighting in particular the charges brought against ex-President Gloria Arroyo and the impeachment trial of Chief Justice Renato Corona.

The Journal reported that the Philippines in January sold $1.5 billion in US-denominated bonds "at a yield comparable with those of European countries such as Spain and Italy."

"International financial markets are reassessing the Philippines' place in the global pecking order as concerns over Europe's financial health increase," Hookway wrote.

Recovery from 2011

That is welcome news after the doldrums of 2011. The National Statistics Office (NSO) said last Feb. 10 that goods exports fell “20.7 percent to US$3.3 billion in December 2011 compared to the previous year, with full-year earnings for 2011 contracting by 6.9 percent.”

NEDA chief Paderanga said the export sector is still expected to earn $62.3 billion this year but there could be “significant downside risks to projections, associated with the weak global demand resulting from slower growth in advanced economies and other major markets such as the Peoples Republic of China and ASEAN..."

He chose to take a medium-term view that stresses “trade logistics, business and policy environment, labor productivity, the link between exporters and micro, small and medium enterprises, research and development, and technology in order to move up the value chain and enhance the competitiveness of the export sector."

Paderanga said contract manufacturers of electronics exports “could continue to experience weak growth in 2012.” This sub-sector is responsible for more than 50 percent of merchandise goods shipped out to the rest of the world. The value of outbound electronics shipments plunged nearly 24 percent to $23.72 billion in 2011.

"Industry reports noted that contract manufacturing business, which is composed of electronic manufacturing services and original development manufacturing, is anticipated to decline slightly worldwide in 2012. It was also reported that total contract manufacturing revenue will decline by approximately one percent (or US$3 billion) from US$360 billion in 2011," said Paderanga.

Exporters see growth areas

Philippine Export Confederation (Philexport) president Sergio Ortiz-Luis Jr. points to non-electronics exports and the markets of Japan, China and the United States as the “good news” sectors.

Ortiz-Luis stressed in a recent message to his Philexport colleagues that “our non-electronics products are now performing” as evidence by the “minimal” decline in total exports compared to the plunge in electronics exports.

He specifically noted the growth in earnings of exporters of automotive electronics, fruits and vegetables, furniture, basketwork, and garments.

As to markets, Ortiz-Luis said, “Japan gave indications of recovery” followed by the United States and China.

Japan, China, Thailand and Taiwan were the Philippines' top export markets that took in more merchandise shipments from Filipino producers in 2011. Presented are the export growth rates in 2011.

Historical data on Philippine exports show 2009 and 2011 as decline years. From the dip in 2009, the exports sector recovered in 2010. Economic planners are hoping for a similarly strong performance in 2012.

Data of the NSO support the Philexport president’s observations. Among the highest growth rates in agro-based product exports in 2011 were:

• Coconut oil - $1.78 billion
• Centrifugal and refined sugar - $354.3 million
• Fruits and vegetables - $978.5 million
• Shrimps and prawns - $367.58 million

Other sectors also chipped in last year to make up for the decline in electronics exports:

• Garments - $1.89 billion
• Wood manufactures - $1.68 billion
• Chemicals - $1.89 billion
• Processed food and beverages - $1.03 billion
• Copper metal - $1.13 billion
• Gold - $214.39 million

Japan, Taiwan, Thailand and China were among the country's top 10 markets and all four posted significant increases in export growth rates while other markets in the top 10 recorded declines.

— Earl Victor Rosero/LBG/HS, GMA News

...the all-time high index

Philippine stocks surge to an all-time high in liquidity-driven rally; PSEi up 2.39%

By VICTOR D. SOLLORANO,

GMA News
February 17, 2012

Share prices on the Philippine Stock Exchange surged to an all-time high in a liquidity-driven rally on Friday, boosted by hopes of a bailout package for debt-ridden Greece and positive economic data from the US.

The main PSEi rose 114.14 points or 2.39 percent to close at 4,880.1, following three successive days of declines.

More than 9.895 billion shares valued at P8.292 billion were traded.

“This is a liquidity-driven rally,” said Mark Angeles, head of research at First Metro Securities Brokerage Corp.

“There are liquidity flows recurring… coming in with the optimism on US jobs data” and the bailout package for Greece, said Angeles.

The previous PSEi high was on Feb. 2, 2012 at 4,822.08 points.

Year-to-date, the PSEi has gained 11.6 percent. Friday's performance was also the index's highest point growth since October 7, 2011 when it posted a gain of 118.74 points, the PSE said in a statement.

This was also the index's highest percentage growth since October 7, 2011

when it posted a gain of 3.1 percent.

Intraday, the PSEi hit a new high at 4,886.99 points surpassing the previous

record intra-day level of 4,855.00 points posted on February 6, 2012.

"Hopes towards a second bailout for Greece as well as positive data on the US jobs and housing markets have boosted today's trading following tepid market movement in the past days. Strong corporate and local fundamentals have in turn pushed the market further as the gains we posted today topped the other market rallies in Asia." said PSE president and CEO Hans B. Sicat.

Other Asian markets reacted positively to those developments.

“Asian shares rebounded on Friday on signs euro zone officials will soon approve a long-awaited bailout for Greece, reducing the risk of a debt default, and after jobs and manufacturing data pointed to a healthier US economy," according to a Reuters.

MSCI's broadest index of Asia Pacific shares outside Japan rose as much as 1.4 percent, recovering most of the losses during Asia's trading day on Thursday when worries about a delay in signing a Greek deal sparked fears of a Greek default, the Reuters report noted.

US jobless claims unexpectedly fell last week to a near four-year low, January housing starts came in better than forecast, and the pace of factory activity in the US Mid-Atlantic region gained momentum in February.

The Standard & Poor's 500 Index rose to 1,358.05 on Thursday, a nine-month high, boosted by the US data.

"Sentiment has brightened to encourage risk taking," said Masayuki Doshida, senior market analyst at Rakuten Securities.

"An easy monetary environment continues, with another liquidity injection scheduled later this month from the European Central Bank and expectations a March default by Greece can be avoided spurring 'risk-on' momentum," he said.

Euro zone officials said on Thursday they were putting the finishing touches to a second bailout deal for Greece for approval on Monday, with a focus on how Greece can prioritize debt repayment and ways to ensure Athens commits to reforms.

As global central banks create money, the financial system gets awashed with cash, said First Metro’s Angeles.

“Creating such liquidity drives equities higher and bond yields lower,” Angeles added.

Winners led losers 123 to 56, with 28 issues closing unchanged during Friday’s trading on the PSE. — With Reuters/KG, GMA News

...the bull-run

Philippines stock index hits new record high


By: Doris C. Dumlao
Philippine Daily Inquirer
Tuesday, January 10th, 2012


MANILA, Philippines—The local stock index broke to a new record high on Tuesday as yield-seeking investors loaded up on blue chips in anticipation of good prospects for corporate earnings in a low-interest rate environment this 2012.

The main-share Philippine Stock Exchange index gained 19.48 points, or 0.43 percent, to close at a new record high of 4,561.08. This exceeded the previous record close of 4,550 posted on Aug. 1, 2011.

Tuesday’s upswing was led by the property counter, which surged by 1.17 percent.

Value turnover amounted to P6.26 billion. There were 100 advancers that edged out 57 decliners while 42 stocks were unchanged.

Investors snapped up shares of PLDT, Metrobank, AGI, Ayala Corp., EDC, Philex, Globe, DMCI, ICTSI, URC, ALI, Metro Pacific Investments, BPI, RLC, Aboitiz Power, First Gen and Megaworld. PNB was likewise higher in active trade.

On the other hand, there was profit-taking on BDO and Lepanto “A” (open only to local investors).

Bede Lovell Gomez, assistant vice president at First Metro Investment Corp., said that after outperforming most regional markets in 2011, the local bourse would likely perform even better this year and target the 5,000 mark by yearend.

Gomez said strong investor appetite on the local stock market was being driven by low interest rates, manageable inflation, implementation of infrastructure spending under the public-private partnership framework, a potential credit rating upgrade and bright prospects for tourism.

“Our theme for 2012 will focus on infrastructure, gaming and consumer sector,” Gomez said.

...the credit rating

Philippine credit rating on track for upgrade

BSP expects investment grade status within a year

By: Ronnel W. Domingo
Philippine Daily Inquirer

Wednesday, January 4th, 2012

 

The Philippines’ global credit rating may be raised to investment grade within a year following five “positive actions” from credit watchers in 2011, according to the central bank.

Diwa Guinigundo, Bangko Sentral ng Pilipinas deputy governor, said Wednesday that in six months to a year, it is possible for the country to attain an upgrade of “a notch or two,” especially after Standard and Poor’s improved its outlook on the country from “stable” to “positive” last month.

For borrowings from foreign lenders, Moody’s Investor Service and S&P rate the country “BB” and “Ba2,” respectively, both indicating two notches below investment grade.

But Fitch Ratings marks the country with “BB+,” which is just a step away from the level where a country’s capacity to pay off its debts is perceived to be “adequate.”

A two-notch upgrade would bring Moody’s and S&P ratings to investment grade, as a one-step uptick will do with Fitch ratings.

“If the direction of the country’s economy stays on course, I think we have sufficient basis to be confident that we shall receive a credit upgrade that we deserve,” Guinigundo said.

He said the domestic economy continued to grow in 2011 despite problems elsewhere in the world that affect the Philippines, such as the fiscal predicaments of the United States and certain countries in the European Union.

He also said that the inflow of funds from abroad remained strong with remittances from overseas-based Filipinos reaching some $16.5 billion in the 10 months to October and gross international reserves hitting $76 billion.

Guinigundo said the Philippines had been accorded “two slots” for a possible upgrade, which a positive outlook—such as that of S&P—makes all the more seemingly attainable.

“Fitch was almost immovable but they moved,” he added. “Whatever improvement from the current (ratings) is welcome, but we deserve investment grade based on our assessment.”

A credit rating upgrade would mean lower borrowing costs for the country, which would translate to easier access to funds for companies and individuals.

Last December when S&P changed its Philippine outlook to positive from stable, company analyst Agost Bernard said the move was meant to reflect the assessment that the Philippines’ external vulnerability had diminished.