Philippines deemed Better-positioned than others to face Global Risks

THE GLOBAL economy faces continued risks -- particularly from a mild recession in Europe and slowing growth in China - but the Philippines and some other countries should be able to better weather these pressures with support from strong domestic demand, Barclays Capital said in its report for this month, titled: "Global outlook: a cautious step forward."

The Philippines is also one of the countries that "can afford" to ease monetary policy in order to prod economic activity in the face of a global slowdown, the investment banking unit of Barclays Bank PLC said in its separate The Emerging Markets Quarterly 2011 report, also for this month, titled: "Glass half full -- take a sip."

Both reports were released before European Union (EU) leaders meeting in Brussels announced on Friday that they had committed to stricter budget rules but failed to agree to enshrine such controls in a treaty.

"Prospects for avoiding either a double-dip recession or a catastrophe surrounding the euro area debt crisis have improved somewhat over the past couple of months," Barclays Capital noted.

At the same time, it said that while risks of a double-dip recession and "a disaster scenario" for the euro zone have subsided, "there are significant headwinds to growth both in developed and emerging market countries, and the solution to the euro area debt crisis will be bumpy and difficult."

Barclays Capital said failure by EU authorities to deal promptly with the region's debt crisis has already done some damage to their economies.

"We now believe that a mild recession has begun, with negative growth in Q4 and Q1 [2012], before stabilization next spring," it said.

But while "risks of a sharper or more extended contraction are significant" Barclays Capital said "a severe European recession is likely to be avoided, especially if there is progress toward a resolution of the crisis."

"With increasing confidence that the next move in growth is up in most of the world outside of the euro area and diminished risks of disaster in Europe, the probability of a global recession has declined significantly," it added.

At the same time, it clarified that risks to the global economy do not come from Europe alone.

"Europe is the dominant risk in markets today, but it is not the only one," the report read.

"We raise China not because it is the largest, but because it is likely to play out in the near future."

While it said a pronounced economic slowdown in China was "quite unlikely", a particularly weak 6.6% growth Barclays Capital has projected for the first quarter next year could intensify market doubts over the depth and duration of that giant's growth deceleration.

"We think it is a bit early to feel confident that anxiety about the Chinese slowdown has peaked…," the report read.

In the face of "a mild recession in Europe and a soft landing in China," Barclays Capital said "growth in India, Malaysia, Thailand and the Philippines will likely hold up better, given their domestic demand" as compared to others in Asia and the Pacific.

The Philippine government reported late last month that gross domestic product growth slowed to 3.2% in the third quarter from 7.3% in the same period last year, supported by a particularly strong 7.1% annual growth in household spending.

But the 3.6% GDP growth in the nine months to September had all but put the government's 4.5%-5.4% full-year outlook this year out of reach.

Barclays Capital added that while inflation in so-called "emerging markets" is expected to ease next year, due largely to base effect, and monetary policy bias has shifted from controlling inflation to prodding growth, "we expect only China, India, Philippines, Indonesia and Thailand to cut rates next year."

In its last monetary policy review for the year last Dec. 1, the Bangko Sentral ng Pilipinas maintained policy rates at 4.5% and 6.5% for overnight borrowing and lending, respectively -- the fifth consecutive time it had done so -- but has signaled that it would be ready to ease its policy stance next year should the economy slow further and if inflation remains manageable.

Inflation rate has averaged 4.5% in the 11 months to November, still within the 3%-5% target range and just below the revised 4.53% forecast for the entire year.

Overall, faced with improved prospects for the global economy, Barclays Capital said, "We think it is time for investors to dip their toes in the water and begin to re-engage in measured and careful risk-taking.

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Philippines becoming International Healthcare Hub

By: Charles E. Buban

Philippine Daily Inquirer

Medical or wellness tourism is a term involving people who travel to a different country to receive treatment for a particular health condition or in other cases pursue activities that maintain or enhance their personal health and well-being to enjoy much lower cost of care, higher quality of care if not different care than they could get at their home country.

It is a huge global business—projected to reach $100 billion (₱4.32 trillion) by 2012.

From this figure, a total of $1.3 billion (₱56.2 billion) went to the Philippines from 2006 to 2010, thanks to foreign tourists and balikbayans who chose to get their healthcare and wellness services here.

Expensive medical treatment costs, as well as limited healthcare coverage in countries such as the United States and a number of countries in Europe, along with capacity constraints in these countries' healthcare facilities, are driving their citizens to seek elsewhere for more accessible, affordable and comparable medical and wellness services.

The Philippines wanted to grab a bigger share that is now being enjoyed by countries such as Singapore, Malaysia and Thailand.

During the 1st Philippine Global Healthcare Forum at the National Kidney and Transplant Institute, Health Secretary Enrique Ona acknowledged that the country already boasts world-class medical infrastructure and facilities (in fact, the top three tertiary hospitals located in Metro Manila even added hotel-quality facilities) as well as highly skilled and compassionate doctors, nurses and medical personnel.

Another advantage the secretary cited was the fact that the Philippines has the added competitive advantage of having English-speaking medical personnel.

Convened by HealthCORE, a private corporation specializing in healthcare research and communications and the official Philippine representative of National Accreditation Board for Hospitals and Healthcare Providers of India, the 1st Philippine Global Healthcare Forum discussed and exchanged information on how the Philippines, with the help of India, can develop into an international healthcare hub.

Medical tourism capital

India is regarded as the medical tourism capital of the world, offering the latest technological advances, experienced and expert physicians and surgeons and world-class patient care.

During the forum, India's Dr. Sanjiv Malik said the Philippines becoming a regional giant is something that is very achievable as the country already has a caring people.

"Your Filipino nurses, doctors and healthcare professionals give the highest level of caring and compassion to patients—it's in your DNA. What you need to do next is to modify your present healthcare practices and systems to conform with international benchmarks. When you do that, you are already on your way to providing the best healthcare to your people and to becoming an international healthcare hub," he advised.

He related that when India improved its international healthcare services, its entire healthcare sector also improved.

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"India was able to upgrade its healthcare system to international standards. As a result, both overseas patients and Indian patients are now receiving international quality health services and medical treatments at prices that are affordable to them," Malik said.

India and the Philippines are now working together under a memorandum of understanding to exchange knowledge, expertise and training in various areas of healthcare and medicine for their mutual benefit.

These areas include medical education, public health, hospital management, health tourism, drugs and pharmaceutical products, medical consumable products, medical equipment, communicable disease control and surveillance, and traditional and alternative medicine.

A much-improved medical tourism, forum guests acknowledged, will have immediate effect in improving the country's economy, much like the business process outsourcing industry is doing at the moment, while retaining its medical talents in the country and reducing the brain drain and its social and economic costs.

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Netherlands & S. Korean firm eyes $1B power projects in Philippines

Korea Water Resources Corp., the leading water resources and Power Company in South Korea, is looking to invest as much as $1 billion in equity for various water and power projects in the Philippines over the next three years.

Specifically, K-Water is considering the installation of floating solar power systems at the Angat Dam and the construction of the Kapangan hydropower project in Benguet, said K-Water representative in the Philippines, Jiheun (Peter) Yun.

According to Yun, the company is willing to invest as much as $60 million to install the "floating solar power system" in any of the dams in Luzon.

Once installed, it will be the first of its kind anywhere in the Philippines, the company claimed.

K-Water has already begun talks with potential partners including the Ayala group and conglomerate San Miguel Corporation.

K-Water explained in a separate statement that the floating solar power system involved the setting up of solar panels in a reservoir, which would allow it to generate higher power output and, at the same time, create an ideal environment for fish spawning since it constrains green algae.

Yun told reporters that the company would initially install a system that could generate 10 megawatts.

K-Water is still considering whether the system will be installed at the Angat Dam or in other dams, such as the San Roque (Pangasinan) facility, Casecnan (Nueva Vizcaya) or the Caliraya-Botocan-Kalayaan (CBK).

According to Yun, K-Water is set to conduct a feasibility study by early next year. This study is expected to be completed within six months. The actual construction of the power plant will take another six months.

"This is the first time (in the country) that the floating solar power system will be constructed within a water reservoir. In Europe and the US, similar projects … are being installed in oceans and/or rivers," Yun said.

It was only last year that K-Water started installing the system in a water reservoir. That same technology has been in use in Europe and the United States for the past decade.

Yun, meanwhile, assured the public that a power facility in water reservoirs would not pose hazards to the environment or to surrounding host communities, citing the company's experience in South Korea.

He stressed that the facility would not contaminate the water reservoir, such as the Angat Dam, which currently provides 97 percent of the water requirements of Metro Manila.

Since the initial project will have a 10-MW capacity, the company plans to sell the electricity to other private firms, Yun said.

As for its planned hydroelectric power project in Kapangan, Benguet, K-Water earlier announced that it would invest $200 million for a 65-MW facility.

Liquigaz expanding business in Philippines

Liquigaz Philippines Corporation., the local unit of SHV Gas of Netherlands, is planning to expand its business in the country by offering fuel products other than liquefied petroleum gas (LPG).

Liquigaz president and managing director Santanu Guha told reporters that although SHV Gas almost gave up its Philippine business a few years back, the management changed its direction and decided to stay put.

"We are looking at all the emerging countries, because as you are aware, Europe is going through a very bad phase. You have to invest somewhere else and Asia is the place which people around the world are seeing as an emerging (region). It is expected that the next 25 years will belong to Asia," Guha said.

"That's the reason our management has decided to stay here in Philippines and give it more time to focus on the deployment of products for brand build-up, not only in the LPG business but in other types of fuels as well," he added.

When asked if Liquigaz would participate in the local downstream oil retail sector once it decides to retail other types of fuel products, Guha said it was an option but nothing was definite.

Liquigaz is maintaining a bullish outlook on the Philippines despite an expected slower growth this year.

"Our results in 2011 have not been every good because of the fluctuation in gas prices as well as in foreign exchange—we're importing in dollars but selling in pesos. Those fluctuations were bad for us," Guha said.

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