Philippine Public infrastructure spending up 36% to ₱106.4 Billion Php from January to May 2013

Public infrastructure spending continued its upward trend, rising to ₱106.4 billion from only ₱77.1 billion in the same period in 2012. This brings total disbursements to ₱751.2 billion. Photo: philSTAR

Philippine Public infrastructure spending grew 35.6 percent in the first five months of the year, reinforcing the government's commitment for sustained and inclusive economic growth.

The Department of Budget and Management reported that from January to May, infrastructure spending continued its upward trend, rising to ₱106.4 billion from only ₱77.1 billion in the same period in 2012.

This brings total disbursements to ₱751.2 billion as of May, up 12.4 percent from the previous year. Expenditures for this period also exceeded the 8.1-percent growth average for January-May disbursements since 2005.

"The implementation of program budgeting helped bring a more deliberate and strategic approach to spending, so that expenditures are closely aligned with President Aquino's campaign for long-term, inclusive growth," Budget and Management Secretary Florencio Abad said.

According to the World Bank, the Philippines needs to jack up its infrastructure spending  to provide that "fiscal spark that is still missing in the country's growth path" and to attract more foreign direct investments into the country.

Maintenance and other operating expenditures went up by 25.1 percent to ₱120.2 billion during the review period, mostly going to social welfare programs under the Department of Social Welfare and Development (DSWD), the Branding Campaign Program under the Department of Tourism (DOT), as well as expenses made to cover the 2013 National and Local Elections.

Abad said while disbursements under net lending fell, the decrease showed that the government was no longer covering for losses incurred by government-owned or controlled corporations.

He said the country's spending performance to date will act as a solid base for growth in the second semester of the year, as the government continues to ramp up spending.

"We are working actively with our Account Management Teams in key implementing agencies to sustain and further improve the pace of disbursements, as well as to eliminate expenditure bottlenecks that might prevent our agencies from making the most of their fund releases," Abad said.

Capital spending increased by 26.8 percent to ₱104.6 billion. More than half of the amount was used to cover the ₱60 billion in payments made by the DPWH to suppliers/contractors for various public infrastructure projects.

Other contributors to the increase are disbursements made for projects under the Department of Transportation and Communication as well as the construction of farm-to-market roads under the Department of Agriculture.

Personnel Services amounted to ₱237.7 billion, up 12.2 percent year on year largely due to the annualized salary adjustments as a result of the implementation of the Salary Standardization Law III, as well as claims for retirement gratuity and terminal leave benefits.

With report from philSTAR

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Investors to still favor the Philippines; least vulnerable to any sort of macro crisis

The Philippines is expected to continue its upward trend economic growth as it is least vulnerable to any sort of macro crisis  which usually encountered by major economies - Investors to still favor the Philippines

THE PHILIPPINES, seen as an Asian economy least exposed to risk, is likely to be favored by investors once the US Federal Reserve starts unwinding a stimulus program, a Japanese investment bank said.

"When the Fed starts tapering its quantitative easing, the likely implication is increasing investor differentiation across Asia, with a preference for sustainable over fast growth," Nomura said in its Global Markets Research report.

Foreign investors have been taking money out of emerging markets -- earlier favored given better returns -- after the Fed said it could start dialing back a bond-buying program given likely US economic recovery.

In the Philippines, the peso and stock market fell to multi-month lows late last month but have since made up some ground.

"The Philippines and Taiwan seem among the least vulnerable to any sort of macro crisis," Nomura said, adding that in the former, "sustainable growth" and "structural reforms" provided a cushion.

The Philippine economy grew by 7.8% in the first quarter, beating market expectations and the government's 6-7% full-year goal.

Inflation settled at 3% as of May, at the low end of the central bank's 3-5% target. An "infrastructure investment-led model supported by remittances, business process outsourcing and electronics exports continues to be highly supportive of strong growth momentum, which looks to be set in motion for the next couple of year," the bank said of the country.

"With Standard & Poor's and Fitch Ratings having upgraded the sovereign to investment grade, we expect Moody's to follow in due course," Nomura added.

Countries tagged as "HIGH RISKS", meanwhile, were the following:

• China,
• Hong Kong
• India.

Countries tagged as "MEDIUM RISKS" were the following:

• Korea
• Malaysia,
• Singapore
• Thailand

Countries tagged as "LOW RISK" were the following:

• Philippines
• Taiwan

The Philippines is least vulnerable to any sort of macro crisis.

"China's high debt, property prices and slowing potential growth, Hong Kong's debt, property prices and current account and India's current account deficit, property prices, inflation and slowing potential growth" placed the three in dangerous territory, Nomura said.

It said that once the Fed tapers its stimulus, countries with "either weak economic fundamentals or that are too slow in normalizing macro policies and implementing structural reforms could struggle to attract investment."

With report from Business World Online

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Thailand: China threats (ASEAN Countries) unacceptable

A frontal view of Brunei's new Prime Minister's Office, the venue for the 22nd ASEAN Summit, in Bandar Seri Begawan. (Photo: Reuters / Bazuki Muhammad)

Chinese officials began their meeting with Asean foreign ministers in Brunei this week by accusing their 10 neighbors of an anti-Beijing conspiracy over disputed South China Sea territory. China singled out the Philippines, calling Manila a provocateur and threatening war.

It was hardly a display of Chinese diplomacy at its best. Now, China has agreed to discuss a code of conduct with Asean, but Beijing clearly is going to take a hard line in the talks.

Brunei is playing host this week to a string of meetings of foreign ministers from Asean, and from the group's partners and neighbors. There is no denying the political and historical issues at work at the meeting.

China has conflicting claims over the China Sea with Japan, South Korea and four Asean members _ the Philippines, Malaysia, Vietnam and conference host Brunei. Reasonable people would agree such a meeting of senior diplomats would provide a golden opportunity for discussions seeking solutions to vexing problems.

China's startling threats, made through the top mouthpiece of the ruling Communist Party, are worrisome.

Starting a discussion with a threat of violence seems unhelpful to any solution, and Beijing knows full well that abject surrender by its six disputing fellow members of the world community is no option.

The People's Daily, however, sent a different message on the eve of the Brunei meetings. It began with an attack on the Philippines for asserting its claim over parts of the Spratly Islands. The Communist Party's official journal then moved on to an attack on Asean as an "accomplice" to the Philippines, saying the 10-member group was trying to gang up on China by sticking together. Finally, it threatened: "If the Philippines continues to provoke China ... a counterstrike will be hard to avoid.

On the face of it, China's accusations range from exaggerated to false. It is ludicrous for Beijing, after its decades of stunning diplomatic successes and acceptance in every Asean country to now claim there is a conspiracy against China, on this or any issue.

Only one explanation seems logical. It is that China, once again, is attempting to gin up xenophobic nationalism as a national issue. The old, cold-war attempt by China to claim it is being isolated by all its neighbours will certainly fool no one outside the country's borders.

Beijing refuses to accept that any other country can feel as strongly or as righteously over China Sea territory as China itself. The attempt to belittle and denigrate other countries is beneath China. Yet Beijing officials continue to do just that. Now they are including all Asean countries, including Thailand, in their attacks and threats. This is unacceptable.

Brunei was hoping to lead a discussion of the great and dangerous problem of the China Sea disputes. Certainly, neither the host nor other Asean members was preparing for a threat of violence from one of the other guests. And here is the fact Beijing should be addressing _ China, Vietnam and the Philippines have all resorted to violence among themselves in the Spratly Islands in recent years. It achieved nothing,

Thailand and its Asean partners should spend this week counselling and urging each other to remain calm, as well as China, South Korea and Japan. There is no scenario to justify war in the Spratlys or the East China Sea. China in particular should tone down the anger, approach the code-of-conduct talks with an open mind, and vow to solve problems peacefully.

Editorial from Bangkok Post

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