Bangko Sentral biggest Challenge: So much money coming in to the Country

Amando Tetangco, governor of Bangko Sentral ng Pilipinas, seen in this Oct. 8, 2012 photo, said interest rates will remain low this year even as growth will probably meet the government's 6 percent-to-7 percent target. Amando Tetangco, governor of Bangko Sentral ng Pilipinas, seen in this Oct. 8, 2012 photo, said interest rates will remain low this year even as growth will probably meet the government's 6 percent-to-7 percent target. Photographer: Julian Abram Wainwright/Bloomberg

Bloomberg published "Philippines Joins Korea in Weighing Steps to Curb Inflows" also explained how would it affects the country's economy if left uncontrolled.  

Philippine central bank Governor Amando Tetangco said he's studying more measures to counter excessive capital inflows lured by growth, joining South Korea and Singapore in warning that policy makers need to consider more steps to reduce the impact of such funds.

"Capital flows and the impact of these on the local economy and local financial markets" would be among the biggest challenges this year, Tetangco said in an interview in his office yesterday. "We continue to study what other measures can be implemented just in case there's a need to adopt more measures in the future."

Monetary easing in developed nations from Japan to the U.S. and Europe has spurred flows to faster growing emerging markets as investors seek higher returns, boosting Asian stocks to the highest in 17 months this week. Bangko Sentral ng Pilipinas can't rule out further reductions on the rate it pays on funds placed in its special deposit accounts after a cut last week, Tetangco said.

"It's becoming challenging to manage inflows with so much of it coming in and increasing liquidity in the system," said Santitarn Sathirathai, a Singapore-based economist at Credit Suisse Group AG. "What the central bank doesn't want is for these funds to go into speculative activities, like to the property sector."

The Philippine economy grew 6.8 percent last quarter from a year earlier, the government said today, beating the median estimate of 6.3 percent in a Bloomberg News survey. Gross domestic product increased 6.6 percent in 2012, it said.

Gradual Appreciation

Singapore central bank Managing Director Ravi Menon said yesterday Asian policy makers should allow a gradual appreciation of their currencies along with other measures to keep inflationary pressures contained as the region faces a "wall of money." South Korea should consider taxes on currency trading and bonds to help limit "speculative" inflows of capital, Deputy Finance Minister Choi Jong Ku said yesterday.

Thailand will set up a team of economists, including central bank Governor Prasarn Trairatvorakul, to study how to respond to short-term capital inflows, Finance Minister Kittiratt Na-Ranong said yesterday. The country won't impose capital controls or tax measures to curb fund flows, he said.

Interest rates will remain low this year even as growth will probably meet the government's 6 percent-to-7 percent target, Tetangco said.

"From our point of view, we do not see signs of overheating in the Philippine economy," the governor said.

New Limits

Bangko Sentral in 2012 announced limits on banks' currency forward positions and banned overseas funds from special deposit accounts. Last week it cut the rate it pays on 1.72 trillion pesos ($42 billion) in its so-called SDAs to 3 percent from more than 3.5 percent. It kept the benchmark overnight borrowing rate unchanged at a record-low 3.5 percent.

"By introducing more macro-prudential measures, they're able to target specific concerns unlike using the main interest rate, which is a blunt tool," Santitarn said.

Philippine outsourcing companies have called on policy makers to curb the peso's gains to sustain competitiveness. Inflows must be managed as currency gains may hurt exporters and low rates may spur asset bubbles, New York University Professor Nouriel Roubini said in a speech in Manila yesterday.

"We don't see evidence of stretched market conditions at this point in time but we continue to monitor," Tetangco said. "We don't target a particular exchange rate. Our policy is the same; we won't go against the fundamental trend but reserve the right to step in the market to smoothen excessive volatilities as may be necessary."

Top Performer

Capital inflows have boosted Philippine stocks and helped make the peso Asia's best-performing currency in the past 12 months.

The peso climbed to 40.55 per dollar on Jan. 14, the strongest level since March 2008. It was little changed at 40.66 as of 10:15 a.m. in Manila, according to Tullett Prebon Plc. The yield on the three-year peso bonds fell to 3.29 percent this week, the lowest since September 2011. The main stock index climbed 0.6 percent today, extending a record high.

The $225 billion economy is on the cusp of an investment- grade rating, President Benigno Aquino said this month. That would attract inflows, Tetangco said yesterday.

The Philippines has the highest junk rating at Moody's Investors Service, Fitch Ratings and Standard & Poor's. S&P raised the outlook to positive last month and said an upgrade is possible in 2013 on improved governance and public finances.

Encourage Outflows

The Philippines may consider further loosening foreign- exchange rules to encourage outflows, Felipe Medalla, a member of the central bank's Monetary Board, told reporters yesterday.

"We're not thinking of imposing holding period for investments in stocks," Medalla said. "If at all, maybe on fixed income, because people who go to fixed income do carry trade. We're studying everything."

South Korea's finance official Choi said yesterday his government may further tighten restrictions on banks' currency forward positions. South Korea on Nov. 27 capped currency forward positions at 150 percent of equity for branches of foreign banks. The limit is 30 percent of equity for domestic banks.

Tools other than interest rates have to be used as emerging-market economies such as the Philippines try to curb volatility, sustain growth and keep prices stable, Tetangco said.

"The policy rate remains the main instrument of monetary policy," he said. "Over the long run, we may develop an interest-rate corridor. What we did last week was an intermediate step towards that. It's a medium-term objective."

Bloomberg 

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Philippines is poised to join the world’s 10 fastest-growing economies

Consumer Boom Fuels Philippines as Neighbors Hit by Export Pain

The Philippines is poised to join the world's 10 fastest-growing economies this year and next as Filipinos buying goods from dresses to condominiums cushion a faltering in exports that's hurt the rest of the region.

The economy extended a fourth quarter of expansion of at least 6 percent, boosting full-year growth to 6.6 percent, faster than economists had forecast. Consumer spending has risen to about three-quarters of gross domestic product from 63 percent a decade ago, World Bank data showed. The Philippines will expand 5.5 percent this year, and 5.4 percent in 2014, putting it among the fastest-expanding economies, according to Bloomberg surveys.

"We have a generation that has a better lifestyle now," said Frances de la Cruz as she waited in line to pay $100 for a black dress and a belt at a Zara store in a packed mall in Manila on a recent Saturday. De la Cruz, a 31-year old call center director, is part of an industry that has helped spur 10 percent income growth in the nation from 2009 to end-2011, along with remittances and a burst of manufacturing from Japanese investment.

The consumer spending strength means the nation may be more resilient to global shocks compared with other Asian export- dependent economies from Singapore to Taiwan, where growth slumped in 2012 as demand for goods eased.

Since he took office in 2010, President Benigno Aquino has sought to transform the Philippines from a laggard to one of the fastest-growing economies in the region by increasing government spending, curbing the budget deficit and reducing corruption, taking the country closer to an investment-grade rating.

Tommy Hilfiger

Consumer spending in the nation, among the most consumption-driven in Asia, rose 6.9 percent last quarter, holding above 5 percent for an eighth quarter. That's spurred sales of brands from Tommy Hilfiger to home-grown Suyen Corp.'s Bench.

"The Philippines has proven it's got particular strength in mitigating external headwinds because its domestic demand has kept the economy running even as other nations suffered," said Vishnu Varathan, a Singapore-based senior economist at Mizuho Corporate Bank Ltd. "Now with Aquino boosting infrastructure, capacity building, the growth potential over the longer term is rapidly increasing. The Philippines is on a very good footing to remain the blue-eyed boy in the region."

The Philippine peso has risen about 5 percent in the past 12 months, the best performer among 25 emerging-market currencies tracked by Bloomberg. The benchmark Philippine Stock Exchange Index climbed to a record in January.

Demographic Dividend

Southeast Asia's second-most populous nation already enjoys a demographic dividend compared to many of its neighbors, with most of its population in the 15-to-64 working-age range. Its labor force will expand by almost 18 million, or 31 percent, to 75 million by 2020 compared with 2010, with a median age of 23.9, Merrill Lynch has predicted. That compares with 37.8 in China and 43.4 in South Korea.

"It's a young, booming population," said Trinh Nguyen, a Hong Kong-based economist at HSBC Holdings Plc. "There's an energy, a euphoria you can sense in the Philippines. The domestic market is burgeoning, thanks to strong population and income growth. This has attracted flows from foreign investors looking to capitalize on the consumption-driven economy."

Japanese investment into the Philippines grew about 30 percent in 2011, while global retailers including Harry Winston Diamond Corp., Uniqlo Co. and Forever 21 Inc. have opened shop or expanded operations recently. Auto sales rose 11 percent in 2012, according to the Chamber of Automotive Manufacturers of the Philippines.

Rating Outlook

Aquino, the son of former President Corazon Aquino, is increasing spending to a record this year while seeking more than $17 billion of investments in roads and airports to spur growth to as much as 7 percent in 2013. Standard & Poor's in December raised the country's sovereign rating outlook to positive, citing improved governance and public finances.

A peace agreement with Muslim guerrillas in the mineral- rich Mindanao island in October is forecast to bring about $1 billion in investment commitments. Aquino has also shown progress in the fight against graft, with Transparency International raising the country's ranking on its annual corruption index to 105 last year, higher than Indonesia at 118.

Exports, which made up about 30 percent of GDP in 2012, slowed in November from the previous month. The nation also remains reliant on remittances, which account for about 10 percent of GDP. The unemployment rate is 6.8 percent.

"Growth is uneven," Nguyen said. "The government needs to raise investment to create jobs and cut poverty to make growth more inclusive."

That hasn't deterred consumers like Charlotte Co, a 26-year old accounting analyst who bought a one-bedroom condominium for 3.2 million pesos ($79,000) in 2011 and purchased a bright yellow Céline Trio bag for $1,000 in December with her savings.

"I would be brave to invest if I don't believe things are really changing," Co said. (http://bloom.bg/XVmWwg)

Bloomberg 

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Philippine economy beats market expectations, expands 6.6% in 2012

The Philippine economy grew 6.6 percent last year — beating the expectations of the market, lending institutions and even the government itself — driven by the services, trade, real estate and construction sectors.

In a briefing on Thursday, NSCB chief Jose Ramon Albert announced that output for the fourth quarter hit 6.8 percent, pushing the full-year gross domestic product (GDP) beyond the government's 5 to 6 percent growth expectations for 2012.

The full-year 2012 figure was significantly higher than 2011's 3.7 percent and was slightly higher than the National Economic and Development Authority's (NEDA) 6.5 percent GDP growth expectation.

It was also higher than the market's media forecast of 6.2 percent as shown in a GMA News Online poll.

"The increase was fueled by the robust performance of the services sector led by trade and real estate, renting and business activities as well as the substantial improvements of manufacturing and construction," the National Statistical Coordination Board (NSCB) noted in a separate statement.

"On the demand side, household final consumption expenditure together with government spending, the recovery of capital formation and the remarkable performance of the external trade contributed to the healthy growth of the economy in the fourth quarter and the whole year of 2012," it added.

GMA News

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Philippines' property boom shows no sign of slowdown

 A property boom in Metro Manila, described as the best in two decades, has pushed construction in the Philippines to its highest growth in at least six quarters.

The Philippines is experiencing a property boom like no other with developments covering office buildings, housing projects, hotels and new shopping districts.

This is all being fuelled by confidence in the Philippine economy which grew at a notable 7.1 per cent in 2012.

With the Philippine economy growing at an impressive pace, experts said there will be no slowdown in the demand for real property market as the country rides on strong macroeconomic fundamentals and investor confidence.

CBRE Philippines' chairman Rick Santos said: "We are seeing a very strong government. The Aquino administration is doing a very admirable job. The strong leadership and a strong cabinet have been reflected on the confidence of the foreign investors. A lot of countries around the world now are getting investment downgrades. In the Philippines, we are seeing investment upgrades so that is very positive. The Philippines is becoming this overnight success that took 20 years."

Property developers are now enjoying brisk sales with vacancy rates falling to its lowest on record.

In some cases, pre-leasing for office spaces are committed for the next two years.

The challenge now experts said is how to cope with the unprecedented success.

Jose Antonio, founder and chairman of Century Properties Group, Inc, said: "The challenge is actually not only for us as a company. The challenge for our country is how to sustain this growth. How do we sustain it? It is really to plough back all the income of both the private sector companies and the government into sustainable projects and relevant projects.

"For example, it is very important for the government to expand our infrastructure. There is a big need and we know it. (The government needs) to hasten the infrastructure program of the government."

The government has allotted a record budget of over US$9 billion this year to upgrade the country's roads, ports, bridges and airports.

Industry experts believe the aggressive infrastructure spending will further real estate growth in the country. (http://bit.ly/10YCvow)

Channel News Asia 

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DOST ₱1 Billion, Phildev ₱5 billion Philippine PC Tablet Manufacturing for $100 each

"I look forward to the day when there's no longer imported PC (in the Philippines)." – Dado Banatao at the Gonegosyo Technopreneurship Summit. (Go Negosyo photo)

Very impressive and ambitious plan which been started the fund raising for the first Philippine design personal computer and pc tablet manufacturing initiated  Philippine Development Foundation (Phildev).

Reported at the Manila Bulletin (Friday) Philippines Can Supply PC Requirements would mean that the Philippines would stop relying on imported computers from china's low quality pc and would make the Philippines as a global supplier for affordable but good quality computers.

Manila Bulletin: With a skilled workforce capable of doing difficult chip design, this seemingly far-fetched vision is not impossible as the Philippine Development Foundation (Phildev) has already started planning this.

The Philippines should one day supply 100 percent of its own PC (personal computer) needs instead of shipping these in from South Korea, Taiwan, or China, according Silicon Valley-based technology entrepreneur Diosdado Banatao.

With a skilled workforce capable of doing difficult chip design, this seemingly far-fetched vision is not impossible as the Philippine Development Foundation (Phildev) has already started planning this.

Phildev is raising ₱5 billion from the private sector for this megaproject of which more than ₱500 million has already been raised.

"This (tablet computers) is a project we started last year. The tablet computer is just one component," said Banatao in an interview at the sidelines of the Go Negosyo Technopreneurship Summit.

"I look forward to the day when there's no longer imported PC because we're designing one. We have to gain confidence in developing products that are very viable. That's how developed countries did it, and we're buying their products"

The tablet computers are envisioned to be distributed to public schools at a very cheap cost at perhaps around $100 per unit. Software will be developed with the Department of Education and Department of Science and Technology. Government is reported to have also allocated around ₱1 billion for the project, but cost may be much more considering infrastructure requirement.

"By the time we're done deploying this, it will be a lot of money. The tablet is just one component of the project, there's infrastructure. Communication, long distance wifi, tablet, network – this whole thing will be needed by the Philippines," he said.

The Philippines must access the global market if it has to grow in technology ventures and bring a lot more wealth, said Banatao who founded Silicon Valley startups Mostron, Chips and Technologies, and S3 Graphics through which their IC design .

Investments should be made to become competitive in technology equipment, including PCs, in three parameters — performance, power consumption, and cost.

"In your smartphone, you'll see a bunch of chips. I've been kind of curious how many dollars were invested in making those work — with those three parameters. Roughly $3 billion were invested to make that smartphone work," said Banatao who design and manage design of chips that are now found in PCs and other electronic equipment.

There should be a complete intermarriage between business and science where workers have strong grasp on basic disciplines-- primarily math and science. The education system should be reformed for this.

"It is disappointing some schools are being guided more by business than learning. If some schools understand what parents go through to send their kids to school, they will put more content in the kids' minds because the parents pay for it."

Intensive technical education is inevitable if the country has to take off economically

"What we do at Phildev is we're working with government to attack this (commercialized education). If you look at the curriculum, and there's no depth in science, you should worry you're not getting the return for your money," he said, stressing it's through technology that Japan and Germany arose from destruction in previous wars.

"Japan became the number two economy within less than 20 years after World War II because they're deep in technology."

In Silicon Valley, where there are no unions because enterprises pay for brains and hardwork, technology innovators dig inspirations from the basics, according to Banatao.

"When I was at Mapua, we always had a set of problems at the back of each chapter. I solved all the problems in the book, whether Physics, Math. I did this twice – once before the test and another before the finals. I know that's severe, but that's me. Somehow I thought there should not be problem I can't solve.

That shows excellence one can strive for," he said.

"I brought that practice to Stanford where I was competing with top one percent of students in the world."

Banatao's Tallwood Venture Capital, a startup funder, has more than $600 million in investment portfolio in technology enterprises. Tallwood has a local affiliate investing here, Narra Venture Capital represented by Dr. Paco Sandejas.

"The biggest companies in Silicon Valley grew because they're practicing entreprenereurs grounded in deep technology. There are no compromises in wanting to use or acquire that knowledge," he said.

The wifi technology is also continuing to evolve — so that Silicon Valley companies are doubling capacity of data transmission.

"We're continuing to put a lot more money for wifi. It's just a matter of time, and (the technology) is potentially violating Shannon law. Probably we'll spend about half a billion dollar. You'll see that it's impact on people's lives is amazing," he said.

The challenge to practice expertise in a technology craft should drive many to entrepreneurship.

"There's no job here that can really challenge me, so I left for the US. That confidence will allow you to become an entrepreneur. It's not easy to become an entrepreneur especially when you deal with technology. Chances are you will fail in nine out of 10."

Among the success factors to technology entrepreneurship are a compelling need — if someone has long been looking for this product for a long time until one's product comes; execution — a cohesive plan for the first year, second year and so on; and a strong technical and management team. This team is pertinent in bringing in the funding as this team's payroll would also require a significant amount while the company is still struggling to survive .

The creation of a market for a technology startup is really a painstaking effort. It can take five to 10 years to create a market. On the other hand, an existing market for an existing product would give an entrepreneur readily-available data on the market.

"You think you can create a market. But I advise startups 'Don't do that. It can take five to 10 years to create a market. The nice thing with the market if it's an existing market is it has a lot of data. Market research is crucial. It's easier to develop a product based on existing markets with identifiable needs."

There may be successful technology entrepreneurial successes like that of Facebook's Mark Zuckerberg.

But most of the time it takes more years to create a market, Banatao said. It took Bill Gates, for one, 15 years to develop the PC, and it took Michael Dell, Dell Inc. founder who is now $14 billion worth, some time too in developing direct marketing for the PC.

One has to offer something really good amid competition.

"There is something positive and negative in any market. There are a lot of players you can compete against. If you bring in something good to that market, you have markets right away. But with strong competition, you have to be that much better. It's hard."

"The key thing is in identifying a need. It has to be very compelling – a way to gauge that is if someone says 'This is what I've been looking for — that's a definition of compelling. No one has addressed that need."

Venture capitalists should be present to finance startups even while it is yet to achieve profitable operation.

"You either commit to be that good, or you get out. It's a relentless effort, and that's where the investors come in. They have to continue to support you if you need more money because its relentless."

Planning is important in ensuring that one's product does not go obsolete.

"I want a situation where I make my own product obsolete."

Monitoring of key results in a technology enterprise is a constant challenge.

At Tallwood Ventures, the key results and targets are right in front of each staff, Banatao said. Each staff has to come up with weekly reports, and part of that report are monthly objectives that came out of the operating plan.

"Every employee should be working on some objectives. It has to be that accurate."

There should be a strategic planning the result of which is a product roadmap. However, when there is a need to change plans, change should be done.

Tallwood invests in the semiconductor and related industries.

Its investment portfolio in technology enterprises includes Accent, offering communication and metering technologies for the Smart Grid industry; Alphion, photonics component manufacturer; Amulaire, engaged in metal injection molding processes; Astute, advanced storage processor company; and Audience, Sandbridge, and Tram, fabless semiconductor firms.

The others are Sirf, developer of silicon and software platform for high-quality digital audio-video; Wave Semi, low power programmable solution provider; Wilocity, gigabit wireless solutions enabler; Stream Machine, MPEG-2 video recording supplier; Silicon Clocks, timing products maker; and Rio, optical transmitter manufacturer. (http://bit.ly/Y63LBF)

Manila Bulletin 

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US MV-22 Ospreys Aircraft conduct training for PHL AF in Palawan Philippines

Maj. Joshua T. Fraser explains the capabilities of the MV-22B Osprey to members of the Philippine Air Force Jan. 23 at Antonio Bautista Air Base in Puerto Princesa, Palawan, Republic of the Philippines. Three Ospreys conducted low-altitude flight training Jan. 23 over Palawan, marking the Marine Corps' first Osprey training in the Philippines. PAF members accompanied Marines on the flights and provided ground control support for the Marines. Fraser is the operations officer for Marine Medium Tiltrotor Squadron 265, Marine Aircraft Group 36, 1st Marine Aircraft Wing, III Marine Expeditionary Force. (Photo by 1st Lt. Jeanscott Dodd)

CAMP FOSTER, Japan -- Three MV-22B Osprey aircraft with Marine Medium Tiltrotor Squadron 265, Marine Aircraft Group 36, 1st Marine Aircraft Wing, III Marine Expeditionary Force, based out of Okinawa, Japan, arrived in Puerto Princesa, Palawan on Jan. 22 to conduct bilateral training with elements of the Philippine Air Force.

"The flights we are conducting are important for our pilots and crews to maintain proficiency. The routes here provide a great venue for low-altitude training" said Maj. Joshua T. Fraser, operations officer for VMM-265.

The low-altitude flight training will take place on routes approved by the Government of the Philippines that have been used previously in flight training exercises. Philippine Air Force personnel will accompany the U.S. Marine contingent and provide ground control and other interoperability training.

"The Marines are flying by the same rules and regulations the Philippine Air Force abides by and utilizing similar routes to ones flown by our aircraft" said Tech. Sgt. Edwin Agang, operations chief for 570th Composite Tactical Wing, Philippine Air Force.

The U.S. Marines and Philippine Air Force personnel will also share expertise on humanitarian assistance and disaster relief operations during classes and discussions on the ground. Marines will also give a presentation on the capabilities of the MV-22 Osprey to the Philippine Air Force and both countries' service members will participate in a cargo loading exercise on the aircraft.

"We appreciate the Marines coming here to train with us and are glad to host and support them at our base" said Agang. (http://bit.ly/11YnBDE)

US Marines Official Website

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AUSTAL Ship: Building relationships in the Philippines for warship order?

Philippine President Benigno Aquino and Austal Engineering's new CFO Greg Jason unveiling a plaque to officially open the company's shipyard in Cebu, the Philippines

Building relationships in the Philippines

Three years ago, Perth-based shipbuilder Austal's new chief financial officer, Greg Jason, discussed his career aspirations with chief executive Andrew Bellamy, who told him he needed more operational experience if he wanted to become finance chief.

He subsequently took on the role of chief operating officer Asia, based in the Philippines, where he has been overseeing the mobilization of the Cebu shipyard.

When former CFO Richard Simons resigned in October Jason says he immediately put his hand up.

"I'd made a commitment to mobilize the Philippines shipyard and that was almost completed so the timing was pretty good," he says.

"Now I have been responsible for delivering the numbers not just commenting on them."

Days into his new role, Jason gave Philippine President Benigno Aquino a tour of the Cebu shipyard at its grand opening.

He invited the president to attend the event after both men spoke at an Australian government-organized trade forum in October.

"The Philippines exports a lot of labor, and so many of the local workers are proud to be manufacturing and exporting something," says Jason. The president seems pleased to see that Austal is not just building in the country but transferring some intellectual property, he says.

In the long term, Jason hopes Austral will win contracts from the Philippine government.

To be successful offshore it is important to build relationships with stakeholders, including government agencies, by meeting face to face, he says.

"If you allow consultants and advisers to get in the way it becomes harder to articulate yourself, and harder to understand what the other side wants."

"The Philippines has worked hard to change its image as a more investment friendly country."

"People don't want to lose face so you have to be very careful to praise publicly and if there is any negative feedback which needs to be delivered coach privately. "

Jason relocated back to Perth late last month, but he expects to spend a considerable amount of time travelling to the Philippines and the US. (http://bit.ly/V5sXpJ)

Financial Review 

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Google open its fifth office in Southeast Asia in Manila

Julian Persaud says Google is in the Philippines "for the long term."

Google Opens Office in Manila

Google is expanding its presence in the Philippines, opening its first office in the increasingly Internet-savvy Southeast Asian country.

"The Philippines is a key country in Southeast Asia in terms of its digital economy and tech-savvy population," Julian Persaud, managing director of Google in Southeast Asia, said at an event Wednesday marking the milestone office in Manila. "This new office will allow us better engage with our local users, partners and advertisers."

Google's move reflects the growing use of the Internet in the Philippines.

According to a report by the Asia Digital Marketing Association, 33.6 million Filipinos tapped into the Internet in 2011. That's already about one third of the population. By 2016, the report said, 59 percent of the population will be turning to the Internet, for everything from shopping to building a business to connecting with friends.

Google opened its first regional office in Southeast Asia in 2007. It also has regional offices in Malaysia, Thailand and Indonesia. Google officials said they will hire some people, but didn't say how much the latest investment will be.

Persaud said Google will be in the Philippines "for the long term."

The move follows such Google activity in the Philippines as the launch of Free Zone, which allows those with Internet-capable mobile phone and a Google account to use Google services for free, including Gmail and Google Search.

Government Undersecretary Manuel L. Quezon III said he was pleased by Google's latest step.

"We are delighted that Google has decided to set up an office in Manila," Quezon said. "Their presence is a testament to their commitment to the Philippines. We hope that Google's entry will encourage more local businesses to go online and tap into international markets."

Narciso Reyes, who has more than 16 years of digital marketing and finance experience in Asia and the U.S., has been named country manager for the Philippines.

"We're excited to be deepening our investment in the Philippines with the opening of our office here in Manila," Mr. Reyes said.

"Our local team will be committed to providing better services to our Filipino users and to helping businesses — large and small — grow locally and globally, contributing to the growth of the Philippine economy,'' Mr. Reyes said.  "We envision Google as part of everyday Filipino lives and as a partner in the development of local communities, culture and business." (http://on.wsj.com/Xxqxja)

Wall Street Journal 

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President Aquino, delegation leaving for Switzerland on Jan. 23 World Economic Forum

President Benigno Aquino III will leave shortly before midnight of Wednesday, Jan. 23, for Davos-Klosters in Switzerland for the World Economic Forum (WEF), Malacañang said Saturday.

Deputy presidential spokesperson Abigail Valte said Aquino and his delegation will leave at 11 p.m., and return to the country on Sunday, Jan. 27.

"He was invited to give the keynote speech at the partnership against corruption event where he will share the Philippine experience in battling corruption," Valte said on government-run dzRB radio.

She also said Aquino will meet and discuss issues with global business leaders, and make a pitch for the Philippines as "under new management and we are open for business."

Aquino will also meet with the Filipino community in Zurich on Jan. 26 before returning to Manila, she added.

Valte said Aquino's delegation will have Cabinet members, including:

1. Foreign Affairs Secretary Albert del Rosario
2. Finance Secretary Cesar Purisima
3. Budget Secretary Florencio Abad
4. Trade Secretary Gregory Domingo
5. National Economic and Development Authority head Arsenio Balisacan
6. Cabinet Secretary Rene Almendras
7. Presidential Communications Development and Strategic Planning Office head Ramon Carandang

An article on Radio TV Malacañang (RVTM) said some 1,000 member-companies and heads of state will participate at the annual WEF meeting.

It said the WEF aims to facilitate global, regional and industry transformation.

"The President is scheduled to address the WEF's activity on 'Anti-Corruption Reception' hosted by the forum's partnership against corruption.  A series of meetings will also take place at the sidelines of the said forum which includes the ASEAN plenary session on 'Resilience in Diversity,'" it added.

RTVM said Aquino will also meet the Filipino community in Zurich where donations will be turned over to the Philippine government for the victims of Tropical Cyclone Pablo (Bopha). (http://bit.ly/VdhHsT)

GMA News 

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Manila, Cebu Up the List of Preferred BPO location in the World

Manila and the Cebu City again carved their name as among the top preferred outsourcing destinations in the world, ranking third and eighth in the list of emerging business process outsourcing (BPO) sites based on a study by investment advisory firm Tholons.

Manila's ranking improved by a notch from last year, an indication of the improving status of the country in terms of being a preferred BPO site around the world.

"Cebu is now ranked 8th in the Tholons Top 100 Outsourcing Destinations Report for 2013, which is a rank higher than in 2012," said Cebu Investment and Promotions Center (CIPC) Managing Director Joel Mari Yu.

"This means Cebu City continually displays its great competency in the global outsourcing industry," he said.

Yu added that the improvement is a "big thing" to celebrate in the face of challenges in manpower availability.

Apart from Cebu and Manila, Tholons cited five other cities in the Philippines – Davao, ranked No. 70; Sta. Rosa, Laguna, No. 84; Iloilo City, No. 93; Bacolod City, No. 94; and Baguio City, No. 99.

Cebu Educational Development Foundation for Information Technology Inc. (Cedf-it) Executive Director Jun Sa-a said Cebu deserves to be promoted in the 2013 Tholons list as it has proven it could scale and improve the quality of its manpower.

"This is a proof that the Philippines is giving India a serious challenge in this industry," Sa-a said.

Jerry Rapes, chief executive officer of Exist Global, shared the sentiment. He attributed Cebu's improved ranking to the hard work and collective effort of industry players, government and the academe.

"This is a validation that what we are doing is good but we should not just maintain that standing, we should move forward," Rapes said.

Availability and quality of workers were among the criteria in selecting the top outsourcing destinations. CIPC estimates that there are about 95,000 people employed in the BPO industry in Cebu.

It also said that the average of 24,000 college graduates produced every year, complemented by skilled young individuals who want to start their careers in the BPO industry, has helped Cebu strengthen its reputation as a BPO destination.

"The primary roadblock for Cebu to advance higher is the lack of qualified manpower," Yu said.

He admitted that while Cebu City has good infrastructure, demonstrated its capability in almost all IT spectrums, it still falls short in providing the industry with qualified IT/BPO workers.

Yu said that in 2012 alone, about 20,000 to 25,000 jobs were generated by new companies that set up businesses in Cebu.

"Cebu continues to have challenges to face before it can become the top business process outsourcing destination, especially because the competition in many surrounding areas of Asia is fierce. Cebu will have to work to continue to build its reputation as an outsourcing leader to make it to the top," Yu concluded (http://bit.ly/VvLpKI)

Manila Bulletin 

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More Business Missions to Investment opportunities in the Philippines

The Philippines is experiencing a record number of inbound business missions. The Board of Investments (BOI) recorded a total of 487 inbound business corporation visits from January to October, 2012 – 147 individual company visits and 34 multi-company delegation missions.

The Department of Trade and Industry expects the visit of more business missions from six countries –

1. German
2. Sweden
3. Italy
4. England
5. Turkey
6. France

The above six countries to explore investment opportunities to help attain the goal of R300 billion investments this year are on top of traditional investment sources such as Japan, South Korea, and Taiwan. The increase in inbound missions is attributed to transparency and dynamism of the Aquino Administration, and the confidence of foreign investors. The Philippines is among the world's booming markets; international credit ratings agencies upgraded its rating to an investment grade, citing a steady growth pace. There is also renewed interest from the United Kingdom (UK), France, and Canada, and growing interest in non-traditional markets like Russia, Turkey, Middle East (Oman, Iran, Qatar, Kuwait, Abu Dhabi), and Nigeria.

In November 20-23, 2012, the Philippines welcomed, for the first time in 65 years, a big Italian business delegation, the Confederation of Italian Industries, Italy's biggest association of manufacturing and services companies, that met with trade associations here such as the Philippine Chamber of Commerce and Industry, the Federation of Filipino Chinese Chamber of Commerce and Industry, the Italian Chamber of Commerce of the Philippines, and the European Chamber of Commerce of the Philippines. The UK Trade and Investment, the body that connects UK firms to the global market, is considering ways to tap the Republic of the Philippines' economy and invest in infrastructure, health care, and transport.

A Philippine business mission to Ankara, Turkey, last year presented to investors the country's growing economy, indicated by unprecedented growth in the stock market, inflow of overseas Filipino workers remittances, steady export growth, 22% increase in BOI approvals, domestic financial sector, efficient revenue collection, and improving global competitiveness ranking. In 2012, there were 18 outbound missions, a number of which were BOI-led, to Taiwan, Singapore, Korea, Malaysia, Japan, Hong Kong, China, Australia, and Cambodia, for prospects in electricity generation and transmission, hydropower, tourism, energy, e-vehicle, agro-business, shipbuilding, and investments in economic zones and in Mindanao.

The Manila Bulletin, led by its Chairman of the Board Dr. Emilio T. Yap, President and Publisher Atty. Hermogenes P. Pobre, Executive Vice President Dr. Emilio C. Yap III, Editor-in-Chief Dr. Cris J. Icban Jr., Business Editor Loreto D. Cabañes, Officers and Employees, congratulate the Department of Trade and Industry headed by Secretary Gregory L. Domingo and Board of Investments Managing Head Undersecretary Adrian S. Cristobal Jr., and wish them all the best and success in their partnership to attract more foreign investors to the Philippines. (http://bit.ly/Xb3LgQ)

Manila Bulletin 

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Taiwan tagged “the Philippines” as China’s most bullied country – Japan come to the rescue.

"The China Post" online news paper tagged "the Philippines" as China's heavily bullied country.

The Senkaku island disputes with China and Taiwan is the boiling point which evaporates Japan from the close pot and landed to the Philippine' tropical shore for Military strategic alliance.  

It is not in the eye of Japan to make alliance with the Philippines in connection with the territorial disputes with china as it would only hurts their sweet economic relation that would probably affect Japan's economy, but a destiny which is sit to happen has finally happened.

Japan is closing their factories in china and in a migration exodus with South Korea to move their factories to the Philippines because of the rising labor costs in China.

The rising labor cost in China could not be the only reason but also the island disputes with china in the Ieo do of South Korea's Exclusive economic Zone and Senkaku Island of Japan.

The recent aggressive action of china in claiming the thousand of Kilometers distance - Southeast Asean territories triggered a worry to South Korea as china send a signal to control the Ieo-do (Ieo Island) in the southwestern part of Jeju which was administered by South Korea pushing them to intensity their new Military base in the area to protect their territory.

Japan on the other hand suffered an economic sanction of china for the Senkaku Island disputes reason why Japan jumps to the Philippine for alliances as their mostly protected economic success with china is fading fast as sunset.

When the Philippines is crying for help from the USA during the Scarborough Shoal's Stand-off with china, USA is hesitant to commit with the Philippines's signed MDT. Opposite from what the Philippines is hoping for, a Philippine envoy was sent to the White House to ask for public commitment that the USA will honor the Mutual Defense Treaty (MDT) but ended up with embarrassment as the USA ignored the Philippines with a word "We will not take side in any sea dispute with other Asian countries".

Japan has lost all the choices than to make alliance with the very weak defense Philippines as one of the most important country which is heavily bullied by china's invasion in its territory. This is the second plan to Japan which seem to be timely and mostly welcome by the Philippines.

"The China Post" online news paper's published article titled "Japanese foreign minister visit shot in the arm for Philippines" also tagged the Philippines as Chinas' heavily bullied country.

The China Post: Seven decades after the Japanese invasion of the Philippines, history has taken an ironic turn as the two former enemy nations pivot their relations on a security alliance under the threat of Chinese expansionism in the East China Sea and the West Philippine Sea (South China Sea).

This alliance is anchored on the security architecture linking the United States, Japan, the Philippines and Vietnam — all onetime enemies, not only in World War II but also up until the Vietnam War in the 1960s and 1970s.

This tectonic shift in defense realignment in the Asia-Pacific region was underlined by the historic visit to the Philippines last week of Japanese Foreign Minister Fumio Kishida.

The pivotal position of the Philippines in this nascent realignment was highlighted by the fact that Manila was the first Southeast Asian capital Kishida visited in his four-nation Asia-Pacific swing following the election on Dec. 26 of nationalist Prime Minister Shinzo Abe. Kishida's tour included Singapore, Brunei and Australia.

Like Japan, the Philippines and Vietnam bear the brunt of China's pressure in asserting its claims on territories in the East China Sea and West Philippine Sea, claimed by partners in the emerging alliance. The disputes have caused tensions in the region that have raised fears these could ignite dangerous flash points, leading to war.

Strategic Partner

Kishida's visit underscored the Philippines' role as Japan's strategic partner in the Asia-Pacific region. In a message ahead of his arrival, Kishida cited the importance of Japan's Asian neighbors, particularly the Philippines, in advancing the security between Japan and the United States to counter the rise of China as a military power in the region.

The Philippines and Japan have defense treaties with the United States that are the anchors of its security system in the Asia-Pacific.

Kishida did not disguise the security accent of his tour and Japan's concern over the rising tensions between Tokyo and China over disputed islands in the East China Sea.

"Currently the strategic environment in the region continues to change significantly," Kishida said. "Japan, as a responsible democracy, will play a proactive role in the stability and prosperity of the Asia-Pacific region. I believe that it is important to strengthen the Japan-U.S. alliance and deepening collaboration with neighboring countries which are developing under freedom, democracy and market economy."

The meetings between Kishida and Philippine officials went beyond platitudes and rhetoric. They agreed, among other things, to enhance the military hardware of the Philippines to resist aggressive actions by China in the strategic waterway where Beijing is locked in territorial disputes with the Philippines, Vietnam, Brunei, Malaysia and Taiwan.

Common Challenges

The Wall Street Journal reported that Philippine Foreign Secretary Albert del Rosario and Kishida "discussed the common challenges" that the two countries "face in terms of the apparent assertions of China," as well as the "possibility of sharing their strategies in dealing with these issues."

In concrete terms, Japan has agreed to provide the Philippines with 10 multirole response vessels to assist the Philippine Coast Guard (PCG) in better patrolling Philippine maritime territories. According to Del Rosario, the patrol boats are expected to arrive in the Philippines in 18 months.

The military procurement from Japan followed an increasing flow of weapons and armaments over the past two years from the United States, Italy and France to beef up the firepower of the PCG — the weakest maritime defense force among the countries with rival claims in the West Philippine Sea.

China's maritime forces have been prowling at will, with impunity, in waters where the Philippines, for instance, claims ownership of islands as part of its exclusive economic zone under international law.

Kishida's visit came as a shot in the arm for the Philippines, the country most bullied by China. In an interview with the Financial Times newspaper last month, Del Rosario said the Philippines would strongly support a rearmed Japan shorn of its pacifist constitution as a counterweight to the growing military assertiveness of China.

Balancing Factors

"We would welcome that very much," Del Rosario said. "We are looking for balancing factors in the region, and Japan could be a significant balancing factor."

The statement upset China, which has accused the United States, Japan and their allies in the emerging realignment of building a ring for the "encirclement" of China.

At the end of Kishida's visit, President Aquino poured fuel on the fire of China's concern with a statement that a stronger Japan would be a counterweight to the "threatening" presence of China in the West Philippines Sea.

At a joint press briefing with Del Rosario, Kishida called for stronger ties with the Philippines to "ensure regional peace," amid tense territorial disputes in the West Philippine Sea.

"On the political and security front, we agreed on strengthening policy dialogue and enhancing maritime cooperation on other matters," Kishida said.

This was music to the ears of Philippine officials. The president and Kishida also discussed "common challenges" that both the Philippines and Japan face with China's growing assertiveness in the West Philippine Sea.

More important to Filipinos is that the Philippine-Japan entente has gone beyond tough words without teeth. The meetings with Kishida hit hard ground. They talked about Japanese help in improving the PCG's capability — so Philippine naval ships can fire back and sink enemy ships.

"The acquisition of multipurpose vessels is undergoing serious consideration," Del Rosario said.

This is the kind of language that China respects because these are words backed by military hardware.

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Many Economy Army abroad, the OFWs are crying from shame of having their beloved country left without them is heavily bullied. They are crying that the Philippines has lost its dignity for its inability to protect its territory as it is ill-equipped and weakest arm in Asia.  Several nationalistic groups informally formed by OFWs to generate fund for the armament upgrade for the Armed Forces of the Philippines but before it's launching, it ended up a BIG SNUB, from the Chief of Staff of the Philippines, General Jessie Dellosa as it believes to contribute only severe conflict and trouble with china.

The campaign for fund raising for Armament upgrades ended to tears of the loving and nationalistic compatriots abroad as no approval given to them.

My Fellow Citizen, day by day we are facing more and more complication and challenges in our backyards as not only 1 or 2 countries but several neighbors are interested to invade our land in the West Philippine Sea.

This is Prince Dan We, one of the editors of the Rebuilding for the Better Philippines would leave you my word of the day.

"I love the Philippines more than my life; I am willing to die to protect this country from the invaders. Will you join me?" 

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