University Tower Malate

MANILA, Philippines Â– Overseas Filipino workers (OFWs) have been known to favor saving portions of their earnings but lately, the central bank has noted more of them have also begun making investments.

Every year, about $16 billion worth of foreign exchange is sent home by Filipinos working abroad and through the decades, the Bangko Sentral ng Pilipinas (BSP) said these inflows have supported private spending.

Consumer spending, according to BSP deputy governor Diwa Guinigundo, accounted for over 60 percent of the countryÂ’s economic production, making overseas workers the strongest economic drivers.

But Guinigundo said overseas Filipinos have only recently begun to develop the financial maturity for strategic spending Â– apportioning their earnings to consumption, savings and investments.

In the latest Consumer Expectations Survey conducted by the BSP, it was shown that investments made by families of overseas Filipinos have increased significantly in the second quarter of the year.

On the whole, the survey results indicated that OFW households utilized their remittances primarily for food, education, medical expenses, debt payments, and savings in the second quarter of the year.v Out of the OFW households surveyed, the quarterly survey indicated that 96.2 percent of these households spent part of their remittances for food and other household needs.

On the other hand, 68.2 percent of the OFW households used their remittances for education expenses, and more than half (51.1 percent) allotted remittances for debt payments.

The percentage of OFW households that utilized remittances to purchase consumer durables and motor vehicles increased to 25.9 percent and seven percent, respectively.

Meanwhile, the survey noted a broadly steady percentage of OFW households at 10.8 percent (from 11.2 percent in the previous quarter) allocating part of their remittances to amortization or full payment for houses purchased.

The percentage of households that allotted portions of remittances to savings dropped slightly to 38.3 percent (from 40.0 percent in the first quarter) but the survey showed this was not necessarily bad news.

According to the survey, the percentage that devoted a part of the remittances to investment increased appreciably to 8.3 percent in the second quarter from 5.9 percent in the first quarter.

Guinigundo explained that savings and investments increase the pool of resources available to both households and corporate borrowers for their credit needs. Â“That helps sustain economic activity,Â” he said.

Guinigundo pointed out that the countryÂ’s savings rate was much lower compared to other countries in the region although he said the national savings rate also included public savings.

Â“Public savings in turn depend on the governmentÂ’s ability to collect taxes and improve its fiscal position,Â” Guinigundo said. Â“All other things considered, there is further scope for higher level of savings.Â”

The BSP, however, is wary of encouraging savings at a time when the economy would need a sustained increase in spending to support activities that would cushion the impact of the global slowdown.

Â“Having the scope for higher savings does not mean of course that we should discourage consumption expenditure in the economy,Â” Guinigundo said. Â“Consumption sustains higher level of economic activity.Â”

Guinigundo added consumption expenditure could also be supported by higher level of savings and investment that in the future would give the consumer more and higher stream of future income.

According to the BSP, the shift was likely the result of growing pessimism over the countryÂ’s economic prospects which compelled families to save and invest rather than spend on consumables.

RP not likely to slip into recession

MANILA, Philippines Â– The Joint Foreign Chambers of the Philippines (JFC) is not expecting the economy to slip into a recession this year, thanks to the countryÂ’s strong remittance inflows and revenues from the information technology (IT) services sector.

In a report released yesterday, the seven-member chamber said money sent home by overseas Filipino workers (OFW) and revenues from the IT-enabled services sector will support the continued growth of domestic consumption, allowing the Philippines to show positive gross domestic product (GDP) growth in 2009.

Â“There is a chance of mild recession should global recovery be slow and remittance and service revenue flows deteriorate more than expected. But this seems unlikely,Â” the report said.

Â“The archipelago is the leader in East Asia in the deployment of overseas workers and in the IT-enabled services sector,Â” it added. Last month, consulting firm Ovum Plc. said government initiatives for technology adoption will drive the growth of the countryÂ’s IT sector.

OFW remittances hit a record $1.47 billion in March from $1.3 billion recorded in the previous month. Its growth rate, however, slowed to 3.04 percent as traditionally strong remittance sources, such as the United States and the Middle East, contracted or were flat.

For the full year, the Bangko Sentral ng Pilipinas (BSP) is expecting a flat growth in remittances, while the International Monetary Fund (IMF) projected a 7.1-percent decline. However, JFC said the growth of remittance inflows remain positive for the first three months of the year at 2.6 percent.

Â“We expect remittances to return gradually over several years to 2008 volumes and to grow in rough proportion to global economic recovery,Â” JFC said. Last year, remittances increased 14 percent to $16.4 billion, accounting for 10 percent of GDP.

Meanwhile, JFC said the upcoming national elections will also boost the countryÂ’s GDP by less than one percent.

Â“Election spending should have a booster shot effect on GDP. But any recurrence of serious political intability could be a negative tipping point. Such risks require vigilance and avoidance of complacency,Â” the report said.

JFCÂ’s position in the report remain unchanged even as the National Statistics Coordination Board (NSCB) reported a 0.4-percent GDP growth for the first three months of the year, the lowest since the Asian financial crisis.

The latest figure was much worse than the governmentÂ’s 1.8 to 2.8 percent quarterly projection. But while the country is still posting positive growths, NSCB Secretary General Romulo Virola said the Philippines is already on Â“the brink of recessionÂ” not just based on GDP rates but on worrisome May to June leading economic indicators.

The indicators include the consumer price index, electricity consumption, exchange rate, hotel occupancy rate, money supply, number of new business incorporations, stock price index, terms of trade index, total imports, tourist arrivals and wholesale price index.

Labor, agri accords signed in Seoul

SEOUL, South Korea (via PLDT) Â— More Filipinos working or planning to work in South Korea have a reason to celebrate, following the extension of a bilateral agreement giving Filipino workers three years to work in South Korea.

South Korea is home to 60,000 Filipinos, most of whom are working here.

Labor and Employment Secretary Marianito Roque said the Republic of Korea (ROK) has given 8,000 slots for Filipino workers in the latest memorandum of understanding (MOU) between the two countries.

Roque is accompanying President Arroyo, who is on her second day of official bilateral visit here upon the invitation of South Korean President Lee Myung-Bak. After which, the President will be heading for Jeju Island for the Association of Southeast Asian Nations (ASEAN) Â– Republic Korea Commemorative Summit on June 1 and 2.

Roque signed the MoU with South Korea Labor Minister Lee Young-hee at the Blue House, which was witnessed by President Arroyo and President Lee.

Roque said the renewal of the MoU gives Filipino workers a chance to work in South Korea, particularly in the manufacturing sector, for a period of three years.

Prior to the renewal of the MoU, the two countries had agreed to give Filipinos a chance to work in South Korea for only a period of two years.

The MOU, which focuses on the employment permit system (EPS) of workers, started in 2004 and is constantly being renewed by the two governments.

Roque disclosed that another MoU, which is on cooperation in the field of labor and manpower development, focuses more on the technical aspect, particularly on the exchange of experts. This, he said, is expected to improve the technical capability of the countryÂ’s human resources.

Also in Seoul, the Philippine government is expected to bring home an estimated $500 million worth of new agricultural investments from two Korean private institutions in its bid to improve livelihood in the countryside.

"WeÂ’re computing that the investments that the agriculture (sector) is bringing home are about $500 million," Agriculture Secretary Arthur Yap said.

Yap is also part of Mrs. ArroyoÂ’s official delegation in this city.

The agriculture secretary said the Philippines has forged an agreement with two Korean private firms - Eco-Solutions and EnviroÂ–Plasma - that will benefit the Philippine agricultural sector.

He said that the Eco-Solutions is pegging $175 million for a two- year project to tap Sarangani, South Cotabato as a jatropha planting area.

"The Department of Agriculture (DA) is helping package the entire deal," he said.

The other Korean firm, Enviro-Plasma, is starting immediately a $300-million sugar bioethanol project in Central Luzon.

He said the DA helped iron out the project, which will be locally led by the Central Luzon Bioethanol Corp.

Enviro-Plasma said it is looking for a 40,000-hectare sugarland in Tarlac, Pampanga, Zambales, and Bataan for bioethanol production.

The Philippine Council for Industry and Energy Research and Development (PCIERD) in its Biofuels Science and Technology roadmap, includes the use of sugar from sugarcane for bioethanol and jatropha for biodiesel production.

The national government started its five percent total volume mandate last Feb. 6, three years after the Biofuels Act of 2006 was signed into law.

As for biodiesel, the government mandated two percent use of biodiesel blend starting last Feb. 6 from one percent since the law was passed in 2006. The country is targeting 60 percent energy self-sufficiency by 2010 from the current 57 percent.

Yap also disclosed that the country has forged an agreement with the Rural Development Administration of Korea for a technical tie-up.

The Rural Development Administration of Korea is South KoreaÂ’s research and extension arm in agriculture, which can help the country in developing food processing technologies, especially in preserving and prolonging top local fruitsÂ’ shelf life.

"It is worth noting today that the Philippines is still the number one supplier of bananas, pineapples, and mangoes and is the second largest supplier of coconut products and by-products in South Korea," Yap said.

He also noted that the Korea International Cooperation Agency has given a study grant for Malinao Dam in Bohol worth P800-million.

"This will be an P800-million expansion project for the next three years. This would ensure that we can now water the entire service area of the irrigation project in Malinao dam," Yap disclosed.

The expansion project will cover 5,000 hectares of irrigated land from the previous 3,200 hectares.

Aside from the two new investments, the agriculture sector is also a beneficiary of the latest MOU between the Philippines and South Korea, including the establishment of a rice processing complex in Sta. Barbara, Pangasinan; Pototan, Iloilo; Pilar, Bohol; and Matanao, Davao del Sur; and agricultural, scientific, and technical cooperations.

Peso a shelter in the financial storm

MANILA, Philippines -- The peso has outperformed most emerging market currencies so far this year and is likely to prove a store of value in 2009 as the economy is less vulnerable to the factors hammering markets elsewhere.

The country is likely to be the only nation in Southeast Asia to post a sharp pick up in its balance of payments surplus in 2009, partly the result of loans and privatization proceeds.

The economy is also less dependent on exports compared with its Asian neighbors, an unexpected bonus when world trade is shrinking and big markets are in recession.

The country's banks have little exposure to the credit problems being experienced elsewhere and the government's finances are far less reliant on overseas debt than in the past.

The big unknown is remittances from Filipinos working abroad, a driver of domestic consumption and pillar of the country's balance of payments. But even in this sector, the Philippines may be better off than many other countries.

"I think what is making it an outperformer is really because of the fact that our number one export, which is really people as reflected in the remittance numbers, will probably be resilient," said Wilfred Song Keng Po, managing director for fund management at AIG Investments in Manila.

"I'm looking at 10 percent decline for remittances as a worst case scenario," he said.

The peso has held its ground so far in 2009. It is down just 1.0 percent against the dollar, when other emerging market Asian currencies are down an average of more than 3.0 percent. Emerging currencies elsewhere are down an average of 5.0 percent.

At 48 per dollar on Tuesday, analysts said the currency might drop to around 50 in coming months if remittance flows disappoint -- a modest fall compared to those already seen in other currencies. The Korean won, Asia's worst performer, is down almost 9.0 percent and has been far more volatile.

NURSES, DOCTORS, HELPERS

The central bank expects 2009 remittances to match 2008's record level of $16.4 billion. Analysts say that is optimistic.

A Reuters poll forecast a 6 percent drop, the biggest fall in nine years and the first drop since 2001.

Remittances are the biggest source of overseas income in the Philippines, generating over a tenth of gross domestic product.

And as the fourth-largest recipient of remittances in the world behind Mexico, China and India, the 14th, third and 12th biggest economies in the world, the Philippines punches well above its economic weight as the 45th biggest economy.

A report prepared for the World Bank sees remittance flows from overseas workers to East Asia and the Pacific falling as much as about 8.0 percent this year, in line with its forecast for developing countries in general, after rising about 7.0 percent in 2008 and by double digits in 2007 and 2006.

Still, the forecast of a drop in remittances for the Philippines this year appears less gloomy compared with an official estimate of a 10 percent fall in such inflows to Indonesia, where remittances reach about 4.0-6.0 percent of GDP.

Filipinos are spread out overseas and hold varied jobs -- from nurses and lawyers to domestic helpers -- providing some resilience in remittances.

"Overseas Filipinos are well diversified geographically. This is unlike overseas Mexican workers, who are almost all in the US," Cem Karacadag, analyst at Credit Suisse, said in a note.

Housing seen as bright spot for RP

MANILA, PhilippinesÂ—Unmet demand for housing will reach between 423,000 and 687,00 units this year, ensuring that the real estate sector remains one of the bright spots of the domestic economy amid the worsening global financial crisis, a government official said.

Gonzalo Benjamin A. Bongolan, president of the Home Guaranty Corp., said housing demand in 2009 was estimated at between 643,422 and 913,480 units.

However, supply has rarely exceeded 200,000 units in the past eight years and peaked at 221,000 in 2008.

He said that supply grew 27.6 percent last year from some 173,000 the previous year, which is believed to have been due to the record 7.2-percent growth in the gross domestic product in 2007.

Bongolan said that in the same period, there was a 141-percent increase in the supply for condominiums and 55 percent in low-cost housing units, which he said indicates a growing preference for these packages.

Also, the HGC chief said the default rate of housing loans, or loans used to buy a residential property, settled at 7.62 percent as of 2007 from a 10-year peak of 13.87 percent in 2000.

For loans used to develop a subdivision or condominium, the default rate slid to 13.25 percent from a high of 38.97 percent in 2002.

Â“We are observing a growing preference for developmental housing loans and continued lending by government agencies and banks,Â” Bongolan said.

He said the governmentÂ’s economic stimulus package, especially in infrastructure spending and monetary expansion should benefit the housing and real estate sector.

Still, Bongolan also said the sector was being threatened by the job crisis both here and abroad as well as the projected weakening of the dollar.

These may give rise to defaults on loans due to layoffs and retrenchments and the reduction of housing demand from OFWs.

OFW remittances hit record high of $16.4 billion

MANILA, Philippines - Despite the global financial crisis, remittances from Filipinos working abroad beat expectations, rising by 13.7 percent to hit a record high of $16.4 billion in 2008 from a year ago level, the Bangko Sentral ng Pili-pinas (BSP) reported yesterday.

Last yearÂ’s remittances exceeded the central bankÂ’s target of $16.3 billion.

For December alone, remittances hit $1.4 billion, an increase of 0.8 percent over the same period in 2007, the BSP said.

The major sources of remittances in 2008 were the United States, Saudi Arabia, Canada, the United Kingdom, Italy, the United Arab Emirates and Japan.

Â“Amidst the challenges posed by the global financial market strains and the economic downturn experienced by host economies, remittances from overseas Filipinos remain a dependable source of foreign exchange for the economy,Â” BSP Governor Amando M. Tetangco Jr. said.

He attributed the increase to sustained demand for Filipino workers abroad, particularly professionals and skilled workers.

Government figures show that Filipinos who went abroad to work in 2008 rose 27.8 percent to $1.376 million.

The central bank said it expects a contraction in the number of workers deployed to countries that are suffering from the global financial crisis but it added that there appeared to be strong demand for workers in countries such as Canada, Bulgaria, Australia, the United Arab Emirates and Qatar.

The Philippines is one of the worldÂ’s leading sources for skilled and unskilled workers with up to nine million people, about 10 percent of the population, living and working in 140 countries.

Their remittances have become a major pillar in supporting the economy contributing to about 10 percent of the countryÂ’s gross domestic product.

The government has been promoting the deployment of more workers overseas as the world financial crisis sent exports plunging 40 percent in December.

Preliminary data from the Philippine Overseas Employment Administration (POEA) showed that the number of Filipinos deployed abroad in 2008 rose considerably by 27.8 percent to 1,376,823 from 1,077,623 in 2007.

BSP chief sees no ratings downgrade

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said he does not expect an outlook or ratings downgrade this year despite the difficulties to be faced by the economy in the wake of the global slowdown.

Fitch Ratings earlier said it was retaining its Â“stableÂ” outlook on the Philippines, while other countries have been put on negative watch because of the effects of the US financial crisis and the ensuing economic recession.

Tetangco expressed optimism that the same sentiment is likely to carry across to the other credit ratings agencies as they evaluate the countryÂ’s prospects this year.

Â“I think the Fitch move to keep our outlook stable is a general view among other rating agencies,Â” Tetangco said. Â“I think weÂ’ll do okay as long as we keep on track.Â”

However, he added this would depend on government actions in the coming months and how regulators would be able to implement the economic stimulus plan.

Â“It all depends on how we will handle the challenges,Â” Tetangco said. According to him, the implementation of the economic stimulus plan would be critical to stable ratings, regardless of whether the government spends more than the 2009 prescribed budget or net.

There have been criticisms that the Arroyo administrationÂ’s P300-billion plan would not be enough since it has already been in the 2009 budget since before the crisis became into a full-blown meltdown.

But Tetangco said he was less concerned with the amount allocated by the government than with its capacity to actually implement the programs and spend the money.

Â“The important issue is for the money to be spent, it doesnÂ’t matter if it is not new money,Â” Tetangco said. Â“It is the money that you are spending that would create economic activity and generate growth.Â”

London-based Fitch Ratings said earlier it was maintaining its stable outlook on the Philippines, saying that the country was Â“reasonably healthyÂ” despite the tumult in the global economy.

Tetangco said FitchÂ’s decision indicates confidence on the countryÂ’s ability to weather the global slowdown, even a recession in its major trading partners.

A stable outlook means that the Philippines would stay at its current credit ratings until the next Fitch review.

Fitch managing director James McCormack singled out the Philippines, along with China and Indonesia, as the only countries that were not in Fitch RatingsÂ’ negative watch.

Tetangco said FitchÂ’s action affirmed the view of moentary officials that the countryÂ’s strong external position would support its fundamental stability through the gloom of the global economic slowdown.

Â“The Philippines is still reasonably healthy, public finance is well-managed in the last couple of years,Â” McCormack said, adding that weaker growth in the region was not necessarily negative from a sovereign creditorÂ’s perspective.

Crisis dampens interest in home loans

December 05, 2008
Doris Dumlao
Philippine Daily Inquirer

The global financial meltdown has turned overseas Filipinos jittery in buying homes for their households, dampening prospects on local banksÂ’ consumer lending.

The countryÂ’s two biggest thrift banks recorded contractions in overseas FilipinosÂ’ housing loan applications in OctoberÂ—15 percent at BPI Family Savings Bank and 20 percent at Philippine Savings Bank (PSBank).

It was the first time in about five years that the banks had seen a decline in new loan application from overseas Filipinos. That sector used to provide lucrative business for banks, particularly remittances and consumer lending.

Â“The drop has been quite visible,Â” PSBankÂ’s Pascual Garcia III said in an interview with the Philippine Daily Inquirer on Thursday.

Â“We wonÂ’t feel it immediately because there were (new loan) bookings done three or six months back,Â” BPI Family Bank vice president for retail mortgage division Jocelyn Sta. Ana said in a separate interview. Â“They have already made their down payment. But in terms of new loan applications, there is a drop.Â”

Consumer lending by banks in the Philippines grew by 20 percent last year, fueled by overseas Filipinos keen on buying homes. It was earlier reported that overseas Filipinos accounted for as much as 60 percent of new loan transactions with the countryÂ’s biggest thrift banks last year. Given the gloomy global environment, Garcia said the whole banking sector would be lucky to attain a 10-percent growth in overall consumer lending next year.

Â“This may continue as they adjust to whatÂ’s happening worldwide,Â” Garcia said. Â“Some have lost their jobs, and even those who havenÂ’t, they are nervous and would thus rather postpone making major decisions.Â”

Garcia said, Â“Until the job situation stabilizes, you will probably see them refraining from [making] these kinds of purchases and investments.Â”

Sta. Ana said it was unsure whether the slump in October was the beginning of a downtrend. Â“Housing is still a basic need of any Filipino family, so there will still be a need for people to get durable goods,Â” she said Filipinos based in the US were the ones seen to be hardest hit by the global financial meltdown.

Â“We heard that some have canceled purchases with (property) developers,Â” Garcia said.

Remittances from overseas Filipinos, however, have remained robust this year despite the global crisis. In the first nine months, remittances reached $12.3 billion, or 17.1 percent higher than the level in the same period a year ago, based on the latest report of the central bank. With editing by INQUIRER.net

GMA signs EO launching job generation visa

http://www.op.gov.ph/news.asp?newsid=22826 - November 17, 2008

President Gloria Macapagal-Arroyo signed today an executive order that would allow foreigners to stay in the Philippines indefinitely provided they will employ at least 10 Filipinos.

The President signed the Executive Order (EO) No. 758 during a brief program held this morning at the Malacanang Rizal Hall and attended by Immigration Commissioner Marcelino Libanan, Trade and Industry Secretary Peter Favila, Justice Secretary Raul Gonzales, Special Envoy Francis Chua, and Shameem Qurashi, chairman of the Philippine Association of Multi-National Council Regional Headquarter, Inc.

Libanan, who thanked the President for signing EO No. 758, said the PresidentÂ’s action is timely because the launching of the job-generation visa would mitigate the negative impact of the current economic meltdown on the Philippine Economy.

EO No. 758, which has the effect of a law, prescribes guidelines for the issuance of a special visa to non-immigrants for employment generation.

Libanan said in an interview after the signing of the executive order that it would be easier now for foreigners to do business in the country as EO No. 758 waives the requirements for visa applications and encourages them to bring their investment into the country.

He said a foreigner who employs 10 Filipinos must invest at least P200 million because one job creation costs P10 million. This would be an active investment because the foreign investors pay monthly compensation to their employees, Â“thus it revolves the economy, hindi tulad ng nangyayari ngayon na inactive ang investments.Â”

Under the guidelines, the BI shall issue Special Visa for Employment Generation (SVEG) to a foreigner engaged in viable and sustainable commercial enterprise, trade or industry that has in its employ at least 10 Filipinos.

Foreigners who acquire the visa are considered special non-immigrants with multiple entry privileges and conditional extended stay, without need of prior departure from the Philippines.

Also, the same visa may be extended to the visa applicantÂ’s spouse and dependents under 18 years of age, whether legitimate, illegitimate, or adopted.

The guidelines also provide that aside from investing in a particular business, the visa applicant must also have a genuine intention to remain in the Philippines and he or she must not be a risk to national security.

President Arroyo directed the BI to continuously monitor the continued compliance by the visa holders of the SVEG, and authorized the BI commissioner to revoke the visa of a foreigner found to have violated the conditions of his visa.

HSBC sees Asia staying resilient Forecasts 'respectable' growth of 7% this year

PHILIPPINE DAILY INQUIRER - November 12, 2008

BRITISH banking giant HSBC sees developing countries in Asia in a much better position to withstand the current global financial turmoil than during the 1997-98 regional currency crisis. While emerging Asia would slow down alongside the global downturn triggered by the US credit crunch, the region--the world's fastest growing in the last few years--would likely remain resilient, HSBC group chief operations officer Michael Geoghegan said in an international teleconference late Monday.

He said Asia outside Japan would still sustain a respectable growth of 7 percent this year.

"If the world economy slows, Asia will be impacted, but unlike the Asian crisis, the Asian economies are strong. They have strong reserves, current account reserves and each country is capable of stimulating domestic demand," Geoghegan said.

He noted that Asian stock markets have already fallen by 40-50 percent this year but the outlook was now turning to be "modestly positive."

"Asia is certainly still stronger than in other parts of the world and will remain stronger than in other parts of the world," he said.

HSBC would like to see contribution from emerging markets rising to 60 percent as a ratio of its business.

"We will continue to focus on core business, accepting deposits and lending," he said.

Asked whether HSBC was interested in some of the assets of beleaguered US financial giant AIG, he said the group would "look at opportunities as they arrive" but could not comment at this point in time.

In the Philippines, he said HSBC would continue to build opportunities in business process outsourcing or global resourcing. HSBC recently opened its second BPO hub along Commonwealth Avenue, Quezon City.

HSBC's pre-tax profits hit $4.3 billion in the third quarter, higher than a year ago, despite loan write-offs in the United States. Loan impairment charges in the United States rose by $700 million from the second quarter.

Arroyo pushes P100-B fund For pump-priming economy amid world crisis

PHILIPPINE DAILY INQUIRER - October 23, 2008

President Gloria Macapagal-Arroyo is supporting a plan to set up a P100-billion program aimed at upgrading expressways, roads and bridges as a means to pump-prime the economy amid the global economic slowdown.

Speaking before business leaders, the President said Wednesday she was open to tapping government financing institutions (GFIs) for the proposed fund, as she outlined contingency plans against a recession in the United States, a major trading partner of the Philippines.

Arroyo said Donald Dee, chairman emeritus of the Philippine Chamber of Commerce and Industry (PCCI), had suggested that P50 billion would be drawn from the GFIs and an equal amount from private banks.

Â“I welcome the proposal given to me on the platform by Donald,Â” she said in her speech at the Philippine Business Conference and Exposition, an annual event of the PCCI.

Dee said the proposed P100-billion fund for infrastructure upgrade was an offshoot of a brainstorming he had with Romulo Neri, president of the state-run pension fund Social Security System (SSS), and Reynaldo David, president of state-owned Development Bank of the Philippines (DBP).

He said the government investment unit National Development Co. (NDC), the DBP and the SSS had committed P10 billion each to the public sector counterpart of the fund, and he would next talk with other GFIs and banks to complete the fund.

The SSS, DBP and NDC Â“will invest jointly with the private sector to create the growth momentum,Â” Dee said. Â“For every peso that you put in, you will have a seven times multiplying effect in terms of the jobs that it will create.Â”

At a news briefing in MalacaÃ±ang later in the afternoon, Finance Secretary Margarito Teves said the PCCI proposed tapping half of the P100 billion from GFIs so as not to touch the national budget.

When asked whether the government was realigning funds from GFIs for the infrastructure upgrade, Teves said, Â“Not necessarily. Implicitly, they have money for this outside of their own commitments or existing priorities.Â”

Sen. Manuel Roxas II has proposed that P100 billion from the proposed budget for 2009 be realigned to benefit food, education and health sectors to cushion the impact of the global financial crisis on the country.

An economic adviser to the President, Gov. Jose Salceda of Albay province, is also calling for a realignment of a part of the proposed budget for next year. He wants the realignment of P33 billion from capital spending to direct subsidies for education, health service and food.

In her speech, President Arroyo said the P100-billion program was getting the support of various sectors.

Â“We hope the private banking sector will join in this,Â” she said.

Â“In that way, we can put our money in human capital formation, which will provide direct income and services to the poor during the coming period,Â” she added.

The President said the economy could withstand the effects of a US recession because of the solid banking system in the country, increasing foreign exchange remittances from overseas Filipino workers, a growing business process outsourcing (BPO) sector, a manageable budget deficit, and slowing inflation, among other good economic factors.

Â“The Philippine economy has certain shock absorbers,Â” she said.

In her speech, the President said the government should upgrade the countryÂ’s infrastructures under a Comprehensive Integrated Investment Program (CIIP) to stimulate the economy.

The CIIP contains projects funded by both public and private sources, including the national budget, official development assistance, cost sharing between the national government and local government units, private-public sector partnerships, joint ventures, among others.

The government has placed at P2 trillion the investment requirement to implement the CIIP from 2008 to 2010.

The transport sector alone will need P755 billion under the program. Arroyo said the government would increasingly tap the private sector for priority transport projects under the build-operate-transfer (BOT) law.

These projects include the Tarlac-Pangasinan-La Union Toll Expressway, C-6 Road, Manila-Cavite Coastal Road, the North Metro Manila Skyway, Southern Luzon Expressway and Southern Luzon Arterial Road.

Â“But if the US recession happens, we would need more private financing and BOT so that we can realign some of our infrastructure money to strengthen programs that promote human capital formation,Â” Arroyo said.

These programs include conditional cash transfers, scholarships, rice procurements and health insurance, among others, designed to carry families through an economic slowdown.

Dee said the government would go ahead with the upgrade of major infrastructure projects whether or not the United States slid into recession.

He said of the PresidentÂ’s message: Â“What sheÂ’s saying is, Â‘IÂ’m not going to wait. IÂ’m going to do it to make sure that the economy is sustained.Â’Â”

The President also announced other strategies to pump-prime the economy and shield different sectors from the impact of a US recession:

Heightened monitoring of displacements of overseas workers, and the setting up of a P250-million livelihood fund for displaced overseas workers.
Procurement of one million metric tons of Â“palayÂ” [rice before milling] from farmers beginning this coming harvest season, up from 100,000 metric tons last year.
Increasing the insurance coverage of depositors from P250,000 to P1 million through a bill to be filed by Rep. Joseph Violago.
Marketing Philippine BPO as a Â“cost-cutting solutionÂ” for US firms.

Â“This is a time for business groups to take advantage of the strength and financial liquidity of our banking system to expand your role in your respective markets,Â” the President told the business leaders. Edited by INQUIRER.net

Amid crisis, RP an island of calm

THE PHILIPPINE STAR- October 15, 2008

The Philippines remains Â“an island of calmÂ” amid the global financial storm because of its good macroeconomic fundamentals, an official of Standard & PoorÂ’s said.

Press Secretary Jesus Dureza and National Economic and Development Authority (NEDA) deputy director general Rolando Tungpalan made public the statement of Agost Bernard, S&PÂ’s associate director, during a news briefing in MalacaÃ±ang yesterday.

The statement was also part of TungpalanÂ’s presentation to President Arroyo during a NEDA Cabinet Group meeting at the Palace on the current global economic developments.

Â“The Philippines is Â‘luckyÂ’ because they have made the necessary adjustments and reforms when times were still good. So they are facing the global market problems and economic slowdown from a considerably improved position, compared to what they were in three to four years ago,Â” Tungpalan said quoting Bernard.

Â“The Philippines is an Â‘island of calmÂ’ currently, while there is turmoil in the higher rated and previously stable countries,Â” he said. The S&P official apparently was referring to Malaysia and Thailand but Tungpalan declined to confirm this.

The NEDA official did not read BernardÂ’s entire statement but said it was part of an email of the S&P official to the Investor Relations Office of the Department of Finance the other day.

In an earlier report, S&PÂ’s said the global financial crisis will not threaten the PhilippinesÂ’ credit ratings but the government must improve its fiscal position.

The President earlier called for a coordinated regional action to help cushion the effects of the global economic slowdown.

The countryÂ’s economic contingency plan as well as the performances of the stock markets around the world was discussed during the Cabinet meeting. Press Secretary Jesus Dureza said Mrs. Arroyo is expected to issue a statement today on her call for a region-wide approach to addressing the financial crisis.

He said Mrs. Arroyo had dispatched Finance Secretary Margarito Teves, Socioeconomic Planning Secretary Ralph Recto and Budget Secretary Rolando Andaya to the US to discuss her proposal.

The economic managers were expected to return to the country yesterday and report to the President.

Tungpalan said the improvement in the stock markets around the world Â“gave us a boost of confidence in where we are right now.Â”

He said there Â“seems to be better comfortÂ” from the initiatives taken by developed countries to address their financial problems. But he said the Philippines will not let down its guard.

Mrs. Arroyo earlier told an economic forum that despite the looming recession in the US and in other major economies in Europe, the Philippines will not experience negative growth at least until next year.

Â“There is no doubt that we live in unsettled times today. The world is at a tipping point,Â” she said.

She said the setbacks from Â“the past year and the past weeks are real and profound. It will take time and perseverance to put the pieces back together.Â”

She said that while a recession in advanced economies is a cause for concern, Â“we are in best position to be able to weather such slowdown.Â”

Â“It (reform) is paying off. Our economy is more resilient today than ever before,Â” she said.

Â“We have created almost seven million jobs in seven years. Our international reserves cover six months of imports and the reforms have given us some running room to weather the wave of global price shocks that reverberated across the world this year,Â” Mrs. Arroyo said.

Â“It hasnÂ’t been easy but Filipinos are tough and resilient and that is one of our sources of competitiveness,Â” she said.

Â“We have pulled together. We have been able to draw on additional revenues to provide targeted investments in food and fuel to keep our poor afloat until a better day,Â” she pointed out.

She argued that while some economies in the region were experiencing recession in 2001, the Philippines was posting growth.

She said the administration is doing everything it can to keep the countryÂ’s fundamentals stable.

The country, she said, has already diversified its export markets and that the US is no longer its No. 1 market but China.

Â“Our banks are well capitalized and the innate conservatism of our bankers is matched by the prudential foresight of our regulators,Â” Mrs. Arroyo said.

RP is now Southeast Asia's hottest property market

MANILA STANDARD TODAY - July 3, 2008

The Philippines is now the hottest real estate market in Southeast Asia, thanks to the business process outsourcing industry boom, said property services company CB Richard Ellis Group Inc.

Trent Frankum, CB Richard Ellis Philippines general manager, said the offshoring and outsourcing boom in the Philippines had created new opportunities for the real estate market.

"Major investors and businesses are looking at the Philippines because it is one of the largest English-speaking nations in the world and has 33.5 million Filipinos in the workforce," Frankum said in a statement.

He made the assessment at the recently held Smart Investment and International Property Expo, the largest and longest-running real estate expositions in Asia held in Hong Kong.

The expo showcased global real estate market opportunities and featured property experts and investors from global companies based in Asia, Australia and the United Kingdom.

Frankum said major multinational business process outsourcing firms were expanding their presence in the Philippines.

He cited Accenture, which has leased 1.3 million square feet. Other companies, such as Teletech, have built six facilities outside Metro Manila.