Myanmar Election result – Fits to Chair ASEAN: North Korea, Spratly Sea disputes

The leaders from the Association of Southeast Asian nations (ASEAN) meet in Phnom Penh, where competing claims to parts of the West Philippines Sea (South China Sea) and North Korea's planned satellite launch are dominating discussions.

Myanmar's political reform process has been a high-profile objective for the 10 member bloc of the Association of Southeast Asian Nations. Last November 2011 the group agreed to grant Myanmar the chair of the bloc in 2014 on the basis of its democratic reforms.

After Sunday's by-election result, which Myanmar or also called Burma had invited ASEAN representatives to observe, Indonesian Foreign Minister Marty Natalegawa praised the vote's execution.

"As far as Indonesia is concerned, this is a very good development. An important step in further making irreversible the democratization process in Myanmar."

This year's ASEAN chair, Cambodia, released a statement calling the election "successful" and "peaceful" and urged the international community to consider lifting longstanding economic sanctions.

ASEAN secretary-general Surin Pitsuwan said he was "encouraged" by the vote in Burma, also known as Myanmar.

"We hope that this will contribute to a more effective integration of Myanmar in the global community and Myanmar and ASEAN will be able to work on other issues that will be more meaningful and contributing to the well-being of the people of Myanmar, rather than being stuck on the issue of instability and lack of political reconciliation in Myanmar."

During the leaders' summit this, territorial disputes in the West Philippines Sea (South China Sea) are also expected to be a high-profile issue.

Four ASEAN members claim rights to parts of the Disputed Spratlys in Kalayaan Group of Islands'  West Philippines Sea (South China Sea), along with China and Taiwan.

At a meeting of foreign ministers on Monday (April 2, 2012), the Philippine's  Minister of foreign affairs, Albert del Rosario, urged his counterparts to take concrete steps forward on a collective code of conduct, or COC, for dealing with the dispute. Del Rosario said he hopes ASEAN will formulate its stance by the end of the year, but acknowledged the group remains divided over how to proceed.

"I think the difference of opinion lies in the fact that we are advocating a draft of the COC be prepared before we sit down with China. Others are taking the view that China should be invited to come in for the initial discussions."

ASEAN ministers also expressed concern over North Korea's announcement of a planned satellite rocket launch. Observers have said the rocket trajectory could see it head south near Philippines, Australian or Indonesian territory.

Indonesian Foreign Minister Natalegawa called on North Korea to refrain from the launch.

"We are obviously deeply concerned by the prospect of the launch of the satellite, both in terms of the safety and security issues. But most of all, and not least, in terms of the disruption it is causing to the conditions conducive for the resumptions of six party talks."

April 2, 2012 meeting of ASEAN foreign ministers is ahead of Tuesday's main leaders' summit.

ASEAN must first agree on Code of Conduct in West Philippine Sea before meeting with China

The Philippines said that the Association of Southeast Asian Nations (ASEAN) must first agree among its members on the draft of the Code of Conduct of Parties in the West Philippine Sea (South China Sea) before meeting with China.

Foreign Affairs Minister Albert del Rosario issued the statement during the ASEAN Foreign Ministers Meeting here in Phnom Penh, Cambodia on Monday (April 2, 2012). He reiterated that the West Philippine Sea issue should be resolved peacefully in accordance with international law.

Del Rosario, during the meeting, also reaffirmed the Philippines' commitment towards peace and stability in the Asia-PAcific region. "A decade ago, ASEAN and China signed the Declaration on the Conduct of Parties in the South China Sea in Phnom Penh," he said.

"As we commemorate the 10th anniversary of the said declaration, I would like to reaffirm our commitment to the maintenance of peace and stability in the region," he said.

The Foreign Affairs secretary also told the ASEAN Foreign Ministers meeting that a working group of the ASEAN Senior Officials Meeting is currently working to identify the main elements of the regional Code of Conduct.

He said that the Code of Conduct must contain "guidelines by which stakeholder-states are to conduct themselves in the West Philippine Sea; mechanisms on dispute settlement including the appropriate structure for its effective implementation; clarification and segregation of disputed from non-disputed areas in accordance with international law, including the United Nations Convention on the Law of the Sea; and provisions relating to cooperative activities, as may be appropriate, for the disputed areas."

Del Rosario also reiterated the Philippines' position to adhere to the primacy of international law, including UNCLOS, in resolving the territorial disputes over the West Philippine Sea.

"On the Code of Conduct, it is important for ASEAN to first agree among themselves on the draft text of the code before meeting with China," Del Rosario said. "I reiterate that the Philippines adhere to the primacy of international law in resolving the disputes, the United Nations Convention on Laws of Sea (UNCLOS)."

"We believe that a rules-based approach under the dispute settlement mechanism established in UNCLOS is the legitimate solution in addressing conflicting and overlapping claims in the West Philippine Sea," the Foreign Affairs secretary added.

He further said that the Philippines hope that the Code of Conduct will be a real "move forward" not merely in terms of form, but more importantly in substance.

During the previous ASEAN summit, President Benigno S. Aquino III proposed the creation of a Zone of Peace, Freedom, Friendship and Cooperation (ZoPFFC) in the West Philippine Sea.

Following the UNCLOS; China is even taking advantage of their claim because they already won the disputes. If the United Nation will grant the disputes favorable to  the ASEAN countries then nothing to lose of china as they are just a mere claimant without actual ownership and a big lose to the Philippines and Vietnam who invested Billions to defend its territory from China's invasion.

If the United Nations will grant in favor of China; double winning of China as they are just a mere claimant without actual ownership and won the disputes. A triple lose could be for Vietnam and the Philippines as they would lose their territory plus they invested a lot to defend its territory.

If United Nations will grant fairly for 200 Nautical Miles Exclusive economic Zone then a new territory of China will born as Part of the Paracel could be officially recognize as territory of Vietnam and China but China and Taiwan would lost its claim in Spratlys as they are 900 Miles away from the claim islands which UNCLOS is not applicable to validate their claim. 

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Boracay ₱126 Million submarine water pipelines commissioned

Boracay, Philippines - With thousands of holiday revelers expected to converge on the world's famous resort island of Boracay this Holy Weekend, they can be assured of better access to clean, fresh water with the recent inauguration of a ₱126 Million submarine water pipeline.

The 1-kilometer pipeline constructed by the Boracay Island Water Co., (BIWC) a subsidiary of the Manila Water Co. Inc., runs from Caticlan to Boracay, and will augment the current 13-year-old pipeline which supplies water to the island from the mainland Malay town in Aklan.

Manila Water is a unit of the publicly-listed conglomerate Ayala Corp., and commonly known as the East Zone water concessionaire of Metro Manila.

During the inauguration ceremony for the pipeline on Friday, March 30 2012, Tourism Secretary Ramon Jimenez Jr. lauded BIWC for the improved water services and wastewater management in Boracay since the company began operating there in 2009.

Boracay as the world's famous beach resort must always offer the world class standard services and facilities to accommodate the Million visitors from the Philippines and International visitors to prove that It is more fun in the Philippines.

He said 96 percent of the island population on the island now enjoys 24/7 round-the-clock water supply, with the quality of its tap water 100-percent compliant with the strict criteria set out by the Philippine National Standards for Drinking Water.

"I salute the partnership between Boracay Water, the local government and the [Tourism Infrastructure and Enterprise Zone Authority] for turning things around and making things happen here in Boracay. As the premier tourist destination in the country, we need to ensure that the basic services such as water and wastewater services for the locals as well as tourists are well-provided.   This is also ensuring the sustainability of the island paradise for the years to come," he said.

The BIWC has been upgrading the wastewater management system of the island and hopes to reach its 52-percent target coverage by the end of the year from the current 31-percent coverage. The company's ₱ 78 Million project, inaugurated in April 2011, aims to improve the island's treatment plant located in Barangay Balabag to a world-class facility, and ensure the treated wastewater being flushed back into natural waters is within the strictest environmental standards that will keep its beach pristine.

Last August 2011, BIWC received a ₱ 500 Million loan from the Development Bank of the Philippines and Security Bank and Trust Corp. to finance its capital expenditures for its projects in Boracay Island.

The loan, obtained through the Philippine Water Revolving Fund, has the option to be increased to ₱1 Billion. The PWRF is a joint project between the national government, the United States Agency for International Development, and the Japan International Cooperation Agency. The fund was set up to help the country meet its own economic and human development targets under the Millennium Development Goals, a United Nations initiative, by 2015.

Boracay Island is the most popular tourist destination not just in the Philippines but already claimed its fame all over the world with 908,875 visiting in 2011, up 16.6 percent from 2010. In December 2011 alone, arrivals shot up by 34 percent from 2010 figures, generating P1.43 billion in tourism receipts for the government.

From only one airline serving the destination in 2006, now all major Philippine carriers as well as chartered international flights are bringing in local and foreign tourists direct to Kalibo, the capital of Aklan, or Caticlan, the jump-off point to Boracay Island Paradise.

Last year business tycoon Ramon Ang of San Miguel Corp. also funded the renovation of the Caticlan airport terminal, while its main runway is now being lengthened to accommodate jets.

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Taxation - Mining Laws in the Philippines, Copper, Gold, Zinc

With an estimated population of about 94 million people, the Philippines is the world's 12th most populous country. An additional 11 million Filipinos live overseas.

The national economy of the Philippines is the 45th largest in the world, with an estimated 2011 gross domestic product (nominal) of $216 billion. Primary exports include semiconductors and electronic products, transport equipment, garments, copper products, petroleum products, coconut oil, and fruits. Major trading partners include the United States, Japan, China, Singapore, South Korea, the Netherlands, Hong Kong, Germany, Taiwan, and Thailand. Its unit of currency is the Philippine peso (₱ or PHP).

Philippine Finance Minister Cesar Purisima said new rules governing mining in the Country, home to some of World's richest deposits of Copper, Gold, Zinc and Nickel, are likely this summer (March – May 2012), but that the government does not intend to block contracts from going forward in the interim.

The new rules are aimed at eliminating corruption and improving environmental protection. They will require mining operators to turn over around 50% of net profits to the government, Mr. Purisima said.

He added that existing contracts will not be reopened, but will be subject to the stricter environmental rules.

Philippine President Aquino during an interview said the mining in the Philippines is just about exploiting the resources and after that it's no more, in fact mining is only 2% of Economic contribution to the Philippines so it is better to prioritize the tourism and ban the mining in all tourism areas.

Mr. Purisima, speaking on the sidelines of a meeting of finance ministers of the Association of Southeast Asian Nations in Cambodia, said the International Monetary Fund's charter should be expanded to give it more oversight over Global financial risks such as the derivatives market.

"Given the huge amounts, the uneven regulation, an institution such as the IMF can take the lead in helping harmonize things," Mr. Purisima said.

He said the Philippines pays investment grade returns on its debt and he expects it will get an upgrade from the 3 major ratings firms.

"Here we are focusing on things we can control: strengthening revenues, continuing to improve our budget, and setting the proper environment for a faster growth rate," he said.

Mr. Purisima noted the Philippine's reserves are at historic highs, its current account surplus remains strong, due largely to remittances from overseas workers, and its banking sector is well capitalized.

The new laws eliminate some tax incentives and raise taxes on tobacco and alcohol, and are expected to strengthen the Philippines' fiscal situation boosting the case for a ratings upgrade, he said.

A newly industrialized country, the Philippine economy has been transitioning from one based on agriculture to one based more on services and manufacturing. Of the country's total labor force of around 38.1 million, the agricultural sector employs close to 32% but contributes to only about 13.8% of GDP. The industrial sector employs around 13.7% of the workforce and accounts for 30% of GDP. Meanwhile the 46.5% of workers involved in the services sector are responsible for 56.2% of GDP.

The economy is heavily reliant on OFW remittances which surpass foreign direct investment as a source of foreign currency. Regional development is uneven with Luzon—Metro Manila in particular—gaining most of the new economic growth at the expense of the other regions, although the government has taken steps to distribute economic growth by promoting investment in other areas of the country. Despite constraints, service industries such as tourism and business process outsourcing have been identified as areas with some of the best opportunities for growth for the country. Goldman Sachs includes the country in its list of the "Next Eleven" economies.

Bank lending expanded by 19.3 percent by the end of 2011, a pace of growth that the central bank said should help speed up growth of the Philippine economy in 2012.

The Bangko Sentral ng Pilipinas reported that outstanding loans of universal and commercial banks in the country amounted to P2.79 trillion by the end of 2011, up by 19.3 percent from that registered the year before.

The rise in bank lending aided the 6.3-percent growth of overall liquidity within the domestic economy, the BSP also said. It reported that "M3? – a broad measure of liquidity that includes currencies in circulation, savings and other types of deposits, money-market funds, etc. – amounted to P4.7 trillion by the end of 2011, up 6.3 percent year on year.

The credit growth of 19.3 percent is considered robust by central bank officials, as bank lending was growing by only around 10 percent in the previous two years.

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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