Typhoon Won’t Deter Philippine Economic Growth

Bidding of  ₱30 Billion LRT extension begin to stop losing $3.27Billion USD due Traffic mess is still on progress?

Last week's deadly typhoon in the impoverished southern portion of the Philippines obscured what has been a year of remarkable achievement for the island nation. Pushed by a surge in consumption, the Philippine economy expanded at a 7.1% year-over-year pace in the third quarter, second only to the 7.4% growth of Asia's perennial leader, China.

The storm delivered a devastating human tragedy, with more than 500 deaths reported by Friday, but it won't have more than a small temporary economic effect because it was mostly confined to rural areas. Manila should quickly regain its recent stride under President Benigno Aquino III. The country's central bank has been able to cut its benchmark interest rate four times in the past 12 months to a record-low 3.5% since inflation is running below 3%. Budget deficits have been reined in. And the Aquino administration is now readying a boost in infrastructure spending, a program likely to get added backing following the storm. The government already has ambitious plans to improve air, rail, and road "connectivity," says Hak-Bin Chua, an economist for Bank of America Merrill Lynch in Singapore. "The Philippines is the turnaround story in Asia," he says.

Investors have taken note. The Philippines' main stock-market index is up 32% this year. "It has been a great year," says Alfred Dy, head of research for CLSA in Manila. Mostly off the radar of foreign investors, the volatile index is up nearly sixfold over the past decade. Only the Indonesian market's tenfold gain in that time has done better in Asia.

Can the gains continue? Yes. With its young, growing population, the Philippines should enjoy a demographic dividend that aging Asian societies like Japan, Korea, and Taiwan won't. The nation will have the region's fastest-growing labor force over the next decade, with more than a 30% rise in its work force. "That's very positive for sectors like consumer, banking, and infrastructure," says Alex Pomento, head of research at Macquarie Securities in Manila. Dy estimates remittances back home from the many Filipinos working abroad will rise about 5% next year.

The archipelago has other advantages. Corporate debt-to-equity ratios have dropped from 1.5 times 12 years ago to 0.6 times, giving the private sector more flexibility and resilience. Projected loan growth of 15% next year and further monetary easing will push growth. The country's booming business process outsourcing is expected to generate $17.5 billion next year, a rise of 25%.

Caution is urged on certain stocks. Blue chips like beer-to-utilities conglomerate San Miguel Corp. and banking- and property-based Ayala Land Inc., favorites of overseas investors, look fully valued at over 20 times this year's earnings. That's a big premium over the Philippine market.

More reasonable, says Dy, are conglomerates Metro Pacific Investments Corp., and JG Summit. Metro Pacific focuses on property and infrastructure and trades at 13.6 times next year's earnings. Dy has a 5.7-peso (14 US cents) price target, or 26% upside. JG Summit has broad exposure to the consumer sector through property, hotels, packaged food, and telecom as well as a low-cost airline. Dy has a 41-peso price target on JG Summit, which trades at 13 times next year's earnings.

Arguably the best play for US investors is the $150 million in assets iShares MSCI Philippines Investable Market Index Fund (EPHE), which has risen 47.7% this year. It could just be getting started.

(Assif  Shameen covers Asian markets from Singapore This articles was carried by Dow Jones) (http://is.gd/E2kxOr)

Manila Bulletin / Dow Jones

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Influential World economist to tout Philippines gains at investment summit in January

 World-renowned economist Nouriel Roubini

MANILA, Philippines - World-renowned economist Dr. Nouriel Roubini will tout the gains of the Philippine economy at the Philippine Investment Summit in January.

Roubini, co-founder and chairman of Roubini Global Economics and economics professor at New York University's Stern School of Business, will give the keynote address at the Philippine Investment Summit in Makati City on January 30.

Roberto Juanchito Dispo, president of First Metro Investment Corp., said the summit will be attended by foreign bankers, investors, fund managers and businessmen.

"(Roubini) believes in the growth story of the Philippines and he will be telling the audience, global fund managers and foreign investors that the Philippines may already be ripe for a credit rating upgrade, anchored on robust capital markets, record-setting equity markets, very strong economic fundamentals and robust local markets," he said on Mornings@ANC on Monday.

One of the world's most influential economists, Roubini had promoted the Indonesian economy, saying as early as September 2011 that the country is ripe for investment grade status. Indonesia was upgraded to investment grade early this year.

Dispo said Roubini's statements about the Philippine economy at the summit may help boost its prospects for investment grade status.

Organized by FMIC, the investment summit's theme is "The Philippine Economic Upgrade: A Bright Spot in Asia." The summit is being held amid the backdrop of the Philippine economy's strong performance.

"It really is the economic fundamentals that are lifting the economy at large -- the fairly strong exchange rate, low interest rate, adequate liquidity in the market... The infrastructure program is beginning to kick in, that will translate to a lot of projects being completed in the country. It's a main attraction for foreign investments to come in," Dispo said.

The FMIC president said the Philippine economic growth is being fueled by remittances and the business process outsourcing industry.

He allayed fears of the strong peso's negative effect on OFW remittances and profits of BPO companies.

"The strong peso means lesser pesos for OFW remittances and for BPO call centers... But BPO call centers are now moving out of the metropolis and to the provinces, where there are lower electricity, lower labor costs, which offsets the stronger peso," he said.

"OFWs may complain they can buy less, but you'd be surprised the reason why inflation rate for October dipped to 2.6% is that we have lower cost of food, fuel and transport. Since our country imports much of our food and oil, strong peso means these foreign goods are becoming cheaper and this translates to lower consumption costs for consumers. It somewhat offsets. We've seen this in the inflation numbers. The one that drove inflation lower is the lower cost of food, oil, transport and utilities," Dispo said. (http://is.gd/EYQGqM)    

ABS-CBN News

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Japan PM Shinzo Abe vows to rearmed Japan with Nukes to counter China – Philippines OK

The Philippines, the Past and the Future with Japan

The Philippines one a victim of Japanese Invasion, killing thousands of Filipinos, enslaving them, abused their women, killed their children and other so many horrible form of abused by japans to Filipinos but the China's invasion to the Philippines territory seems to be more scary than what Japanese did to the Philippines resulting to its support to have a super Power Japan to counter China.

The limit of the future power of Japan still unpredictable if it won't also invade the Philippines to dig back their hidden treasures left untouched hidden  in the mountains of Luzon, Visayas and Mindanao.

Philippines backs rearming of Japan

The Philippines would strongly support a rearmed Japan shorn of its pacifist constitution as a counterweight to the growing military assertiveness of China, according to the Philippine ­foreign minister.

"We would welcome that very much," Albert del Rosario told the Financial Times in an interview. "We are looking for balancing factors in the region and Japan could be a significant balancing factor."

The unusual statement, which risks upsetting Beijing, reflects alarm in Manila at what it sees as Chinese provocation over the South China Sea, virtually all of which is claimed by Beijing. It also comes days before an election in Japan that could see the return as prime minister of Shinzo Abe, who is committed to revising Japan's pacifist constitution and to beefing up its military.

A constitutional revision that upgraded Japan's Self-Defense Forces to a fully fledged military would allow it far more freedom to operate and could change the military balance in Asia. In spite of its official pacifism, Japan's armed forces do not lack for hardware. Its navy has about 50 large surface ships, compared with China's 70-odd.

Support from other Asian nations for a rearmed Japan could embolden Mr. Abe to change the constitution.

Beijing has long raised the specter of a return of Japanese militarism. The attitude towards Japanese rearmament in the Philippines, itself colonized by Japan, suggests regional fears of an assertive China may be beginning to trump memories of Japan's aggressive wartime actions.

This month, the Philippines objected strongly to an announcement that maritime police from China's Hainan province would intercept ships entering what it considered its territorial waters.

Beijing has started issuing passports that include a map of its "nine-dash" claim to almost the entire South China Sea, parts of which are also claimed by Vietnam, the Philippines, Brunei, Taiwan and Indonesia. The Philippines has refused to stamp the new passports in protest.

"The Philippines has contended all along that the nine-dash claim is an excessive claim that violates international law," Mr. del Rosario said.

Southeast Asian countries concerned about what they see as an abrupt change in China's "peaceful-rise" diplomacy have welcomed the renewed commitment to the region by the US in the form of its "pivot". Mr. del Rosario said Manila had agreed to more US ship visits and more joint training exercises.

The region is also closely watching Beijing's stand-off with Tokyo over the Japanese-controlled Senkaku islands, known as the Diaoyu in China.

Regional countries have struggled to present a united front against China, which prefers to deal with each capital bilaterally. Last June, the Association of Southeast Asian Nations failed to issue a final communiqué after Cambodia refused to endorse language referring to recent naval stand-offs with China.

In July, Japan and the Philippines signed a five-year agreement to strengthen military co-operation though exchanges of personnel and technology. Japan is providing 12 new patrol ships for the Philippine coast guard, financed with a combination of soft loans and foreign aid grants.( http://is.gd/BjYyVV)

Financial Times 

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