INC- World’s biggest dome-arena in the Philippines to host AFF Suzuki Cup in 2016

INC- World's biggest dome-arena in the Philippines to host AFF Suzuki Cup in 2016

Football has been steadily rising in popularity in the Philippines in recent years and following their successful qualifiers for the 2014 AFC Challenge Cup in Maldives, the Philippines Football Federation (PFF) have officially declared its intention to host the AFF Suzuki Cup in 2016.

PFF is confident that they will be awarded the privilege to host the tournament and host it in their new and soon-to-be world's biggest dome-arena, named the Philippines Arena.

Works for the 50,000 capacity new stadium was inaugurated on August 17, 2011, and was the brainchild of Iglesia ni Cristo, one of the largest Church movement in the Philippines.

The stadium has a floor area of 74,000 square meters and its domed roof is nearly 36,000 square meters making it the largest dome arena in the world and costing a whopping USD 213 million.

"The PFF submitted a bid to host the Final Round of the AFF Suzuki Cup 2016," said Ed Gastanes, PFF's secretary general to InterAKTV.

"We hope to see completion (of Bulacan) in late 2014 of the football and track stadium and hope that in 2016, the PFF will be allowed to make use of the stadium for international competition."

PFF is also set to have a new home of its own after they failed to reach an agreement with the Philippine Sports Commission (PSC) for ownership of the current Azkal's homeground,  the Rizal Memorial Stadium in Manila.

PSC is planning to improve on its facilities and convert the playing surface from natural grass to artificial turf and was initially supposed to come under the supervision of Fifa as part of its Goal project.

But Fifa has ruled that under the agreement, PFF must gain full control of the venue, thus ending talk of cooperation between the PFF and PSC.

With no end to the deadlock, PFF is eyeing a plot of land in Sta. Rosa, Laguna and hopes to build a new home for the Azkals with additional training facilities.

Malaysia and Thailand hosted the 2012 Suzuki Cup and the next edition, to be held in 2014 has seen interest from Vietnam and champions Singapore, with the hosts expected to be announced by ASEAN Football Federation soon.

Goal.com

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Philippines Gets First Investment-Grade Credit Rating from FITCH

HONG KONG — The Philippines was once the sick man of Asia: badly managed, corrupt and poor.

Years of efforts by the government of President Benigno S. Aquino III paid off Wednesday, when the country received, for the first time, an investment-grade credit rating from one of the world's major ratings agencies.

The move, from Fitch Ratings, represented an important vote of confidence for the Southeast Asian island nation, which has been growing at a rapid clip for the past few years but whose per capita income is barely one-quarter that of the United States. The economy remains heavily reliant on money sent home from Filipinos working overseas, called remittances.

"This means much more than lower interest rates on our debt and more investors buying our securities," Mr. Aquino said in a statement. "This is an institutional affirmation of our good governance agenda: Sound fiscal management and integrity-based leadership has led to a resurgent economy in the face of uncertainties in the global arena. It serves to encourage even greater interest and investments in our country."

Fitch Ratings cited "improvements in fiscal management" begun under Mr. Aquino's predecessor, Gloria Macapagal Arroyo, as one of the reasons for its decision to lift the Philippines' rating from junk status, increasing it one notch, to BBB- from BB+. The rating applies to the country's long-term debt denominated in foreign currency.

The upgrade, Fitch said, reflected a persistent current account surplus, underpinned by remittance inflows, while a "strong policy-making framework" — notably effective inflation management by the central bank — has supported the overall economy in recent years.

Investors cheered the news of the upgrade, sending the main stock market index up 2.74 percent.

The upgrade had been widely expected for some time, helping turn the Philippines into something of an investment darling last year. The Philippine stock market soared more than 30 percent in 2012, one of the best performances in the world, and has risen an additional 17.8 percent so far this year — the third best in Asia after Japan and Vietnam. The Philippine peso has climbed 7 percent against the dollar since the start of 2012.

Foreign direct investment, likewise, rose 8 percent last year to $2 billion, from $1.9 billion in 2011, as investor confidence in the country has solidified since Mr. Aquino took office nearly three years ago.

"This is an upgrade that's overdue," said Norio Usui, country economist for the Philippines at the Asian Development Bank, which is based in Manila. "Financial markets have already fully incorporated it. Bold governance reforms under the current administration have changed consumers' and investors' sentiment. Prudent macroeconomic management has laid the foundation for the strong growth. This rating will give investors the confidence they need to give the Philippines a much closer look."

The country's promising demographics also seem to point toward bright economic prospects. While many Asian nations, including Japan, South Korea and China, are aging rapidly, the Philippine population of 94 million is one of the youngest in the region. About one-third of Filipinos are 14 or younger, according to World Bank data. That compares with 19 percent in China and 13 percent in Japan.

"Should the government implement policy to educate and provide jobs for the burgeoning population, the Philippines could capitalize on its demographic advantages to raise economic output," economists at HSBC wrote in a research report.

HSBC forecasts that the Philippine economy will expand 5.9 percent this year, slightly less than the 6.6 percent recorded in 2012 but well ahead of the 3.9 percent in 2011. Fitch Ratings on Wednesday estimated growth between 5 percent and 5.5 percent in coming years.

At the same time, the country faces considerable challenges. Infrastructure in much of the country remains poor and corruption widespread, despite progress under Mr. Aquino's administration. Growth has generated pockets of urban prosperity surrounded by vast areas of grinding poverty and few jobs.

"While we may finally be treading the right path towards inclusive and sustainable development," Loren Legarda, a Philippine senator, said in reaction to the upgrade, "the challenge remains for us to ensure that there will be overall improvement in the lives of majority of Filipinos."

Renato M. Reyes Jr., secretary general of the left-leaning social organization Bayan, said the upgrade was "meaningless" as far as the poor were concerned. "It will not necessarily generate jobs and lead to sustainable growth," he said. "It looks good only on paper and will only benefit big business. Expect Aquino to milk this for the 2013 elections."

Recent developments in the southern Philippines, moreover, have highlighted the differences between the prosperous and peaceful north and the impoverished and unstable south. In February, gunmen from the southern Philippines caused a major security crisis in Malaysia when they took over an isolated village in the state of Sabah. Mr. Aquino has faced significant domestic criticism of his handling of the crisis.

Richard Foyston, the chairman of Navis Capital, which is based in Kuala Lumpur and has about $3 billion in shares and private equity investments in Southeast Asia, cautioned that the Philippines' economy remained highly dependent on household spending and on remittances from Filipinos working abroad.

Household spending makes up a big proportion of the Philippines' economy because spending on infrastructure and industry has for years lagged behind the country's peers in Southeast Asia. Remittances, meanwhile, rose 6.3 percent to $21.4 billion last year, the equivalent of 8 percent of gross domestic product.

"That fills a gap, but it is a sign of an imbalance," Mr. Foyston said, referring to the remittances. "The capability and talent and willingness to work and invest, all those things that are good for an economy, have not been put to work at home in the Philippines."

In May, elections will be held in the two houses of the Philippine legislature. Mr. Aquino, who is not up for re-election, has campaigned aggressively for his legislative allies, who are crucial for continuing his reform agenda.

Floyd Whaley reported from Manila. Neil Gough contributed reporting.

The New York Times

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Manila’s Payatas dump site residents benefits the clean energy from Methane

AFP © Philippines turns trash into clean energy windfall

Philippines turn trash into clean energy windfall

Manila - Payatas residents experienced a first kilowatt power generated from the methane gas and now more likely benefiting the power from the garbage. Mrs.  Teresita Mabignay does her ironing using free electricity on the slope of a garbage dump, an unlikely beneficiary of efforts to turn the Philippines' growing rubbish problems into a clean-energy windfall.

Mabignay lives at the base of one of Manila's largest landfills, which was the first in the country to have its methane gas converted into power as part of a United Nations' programme aimed at tackling climate change.

Decomposing rubbish produces methane, which is one of the greenhouse gases that scientists blame for global warming, and turning it into electricity saves it from rising up into the atmosphere while reducing the need to burn fossil fuels.

The methane is captured with pipes that are dug into the landfill, similar to wells that extract gas from under the ground or ocean. Methane is then sucked down to a power station at the bottom of the dumpsite and pumped into generators to make electricity.

For the past few years Mabignay and other housewives from the slum community at the bottom of the Payatas landfill have been given free access to the power at a hall built at the dumpsite.

"It really helps because it cuts down on our electricity bills... sometimes we use the savings to buy food," said Mabignay, 50, whose husband earns the equivalent of about $200 a month working as a security guard at the dumpsite.

The company behind the project, Pangea Green Energy Philippines, could afford to be generous with its electricity as it was earning hundreds of thousands dollars to capture and convert the gas.

Under the UN programme, industrialized countries can meet their Kyoto Protocol commitments to cut greenhouse gas output by funding projects that reduce emissions in developing nations such as the Philippines.

Companies in developing countries earn credits for reducing emissions, each equivalent to one ton of carbon dioxide. The credits are then sold to companies, institutions or governments in industrialised countries to offset their emissions.

Pangea president Jennifer Fernan Campos said the Payatas energy project was set up to take advantage of the UN scheme, with the first kilowatts generated in 2008.

"We are also very gratified to be helping the environment and the community. In our own little way we are mitigating greenhouse gas emissions," she said.

Thousands of renewable energy projects in developing countries have been registered under the UN's Clean Development Mechanism since it began in 2005, including wind farms, solar stations and hydropower dams.

There have also been many waste-to-energy projects, with four others in the Philippines starting up after the pioneering Pangea operation, according to industry website www.cdmpipeline.org.

However the market price for each ton of greenhouse gas that companies save started dropping sharply in 2010, partly because of the economic meltdown in Europe which was the biggest source of revenues.

"Our rate is a floating one so when the market collapsed, we suffered," Fernan Campos said, explaining they made the mistake of not locking in a higher price when they had the chance.

Industry experts have warned the carbon trading scheme is in danger because of the collapse in prices, and many clean-energy projects face an uncertain future.

However Fernan Campos said the Payatas project had become commercially viable without the UN-channeled money.

She said Pangea this month expanded capacity from 200 kilowatts to one megawatt, and began selling directly onto Manila's electricity grid.

Previously the electricity generated at Payatas had just been used to power operations at the landfill and for the nearby slum communities via the ironing project and neighborhood street lights.

The amount of greenhouse gases that are now being saved at Payatas is the equivalent to taking 18,000 cars off Manila's roads, according to Fernan Campos.

She said the project had a host of other environmental benefits, including less direct air pollution for people living close by. The extracted methane gas could also no longer contaminate the water system.

Nevertheless, Greenpeace and some other environment groups oppose waste-to-energy projects, arguing their green credentials are often exaggerated and that they create a financial incentive for more rubbish to be dumped.

"The only way to address the issue of methane generation from waste is to stop the rubbish going to the landfill in the first place," Greenpeace Philippines programme manager Beau Baconguis said.

"Having such projects in place encourages the generation of waste, rather than eliminating it, because you need waste to run the facility."

Baconguis said there was no vision from the Philippine government to reduce waste, and that Manila's roughly 12 million residents were producing between 6,000 and 8,000 tonnes of rubbish every day.

However Fernan Campos insisted Pangea was not lobbying for, or encouraging, more waste to be dumped at Payatas.

She said the local government had implemented recycling and other waste-reduction policies in recent years that had seen the amount of rubbish going into the landfill drop from 1,800 to 1,200 tons a day.

"We are just clearing whatever is there, and helping the environment at the same time," she said.

Yahoo News

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Philippines will Loan Half Billion US Dollars from Japan for Railway & Bohol Air

Japan to lend Philippines $570 Million for rail, airport

The Philippines would borrow more than $570 million from Japan to fund an expansion of the capital's light rail system and a new airport for one of the nation's top tourist attractions.

More than three-quarters of the package will be for the Manila Light Rail Transit system's expansion to two neighboring provinces, the foreign department and the Japanese embassy said in separate statements.

The transport department is expected to tender shortly for the 81.3-billion-peso ($1.98-billion) project, which will provide urgently needed alternatives for people commuting between Manila and nearby areas.

"This project... (will be) contributing to the mitigation of road congestion in Metro Manila," a Japanese embassy statement said.

The light rail expansions, covering 15.7 kilometers (9.7 miles), are due to be completed by 2015.

The loan will also provide part of the financing of a $190.5-million airport planned on Panglao island adjacent to Bohol island.

This will replace a small airport now in operation on Bohol, which has seen massive growth in tourist traffic in recent years, the embassy statement said.

Japanese ambassador to Manila Toshinao Urabe signed and exchanged notes on the projects on Monday, the two governments said.

Neither side disclosed details about the terms of the loan, worth 54.03 billion yen ($573 million), nor when the money would be distributed.

Japan has accounted for about a third of all official development assistance to the Philippines in recent years, according to the embassy.

Global Post

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GOING GLOBAL: Filipino competitiveness is NOT GOOD, IT’S GREAT!

Illustration by REY RIVERA

By James Michael Lafferty

MANILA, Philippines -I was a panelist last week in the Euromoney Philippines Investment Forum along with many dignitaries, including President Benigno Aquino III and Secretary of Finance Cesar Purisima. One of those "standard" questions came up concerning, "What can the Philippines do to improve competitiveness?" I think many people were shocked at how bullish I am on the Philippines. And I am not saying there is nothing to improve upon. It is just that, from my vantage point of leading multinationals in this country, this nation is incredibly competitive! Let me tell a few stories to explain why.

I have worked for some of the biggest and most respected consumer goods companies: Procter and Gamble. Coca-Cola. And now BAT. And on five continents and over 40 countries.

In every country, there are indeed competitors — some local, but typically the ones concerned being other multinationals. Like when I was at Coke, my biggest worry was Pepsi most of the time, not the local cola brand.

There is, however, one nation that stands out. Where the local companies are so good, so well run, that they represent the big competitive risk. And that country is right here, the Philippines!

Let me give some examples.

P&G is the biggest laundry detergent company in the world. By far. And in normal cases, the key competitors are companies like Unilever, or Henkel, as examples. But not here. In my time leading P&G, the leader of the laundry detergent bar segment, which was nearly half of the market, was a great brand called Champion from Peerless. A local company. Well run. A very formidable competitor. They were winning market shares. And they deserved it, doing a better job of delivering real consumer value. I respected them. And they made me better.

You can see the same in many, if not most, consumer categories. Diapers have EQ, a brilliant local brand. Toothpaste has Hapee. And there are many more: Splash Corporation, Belo Skincare, Alaska Milk — all local Filipino companies that are well run, hyper-competitive, and winning market shares.

I have never seen a market like this. So competitive. So good at turning out world-class companies and talent.

My two favorite examples start with iced tea. I can only imagine if I was a consultant, and a local company came to me and asked, "Do you think we can win if we enter a category dominated by Coca-Cola, Pepsi Cola, Unilever, and Nestle?" My answer would be, "Don't be crazy, you are taking on four monsters. Go find something else to compete in!"

Well, I am glad my friend Lance Gokongwei and his colleagues at URC never asked me. Because what they did is extraordinary. They entered. They had the unique name, flavors, and distribution strategy of C2. And in a few short years, they took the lead from the big boys. It's about as impressive a story as there is. In fact, it's a lot more impressive in my view than the story of Bill Gates starting up in a garage!

Finally, when I retired from P&G and left the Philippines, sadly, for my new role in Nigeria as CEO of Coca-Cola, I met in my first week in Lagos with my top customer, an owner of the largest fast-food chain called Chicken Republic. We were chatting and he asked me where I came from. I answered, "The Philippines." And I will never forget his answer.

"Oh, my gosh! That's neat! My hero is a Filipino."

So I, of course, asked, "Who is that?"

His answer was, "Tony Tan, the founder of Jollibee. And let me tell you why. I am today the biggest fast food chain in Nigeria. But we know McDonald's is coming. And it is scary, all their money and might and PR. But we have hope. Because somewhere out there in this world, there is a local chain that has succeeded in beating McDonald's, and keeping leadership. And that is Jollibee."

I loved it. Even in the middle of Nigeria, the excellence of Filipino business is recognized and cheered.

Nine months later, upon the gracious invitation of Tony Tan and his team at Jollibee, I escorted my Nigerian customer and his team to Manila for a one-week visit with Jollibee to learn. It was a wonderful experience, and the entire group could not say enough good things about Jollibee, their leadership, and their commitment to excellence. It is a great, great company.

I could go on and on. This country has amazing competitiveness. Yes, we can do more. We can continue to truly knock down barriers to free market competition, to level the playing field like was recently done in tobacco, to allow more companies to enter and invest. We can continue to push for investment-grade ratings, to open up more capital markets to our businesses. We can upgrade more infrastructure.  The administration is pushing all the right buttons. Anyone can see it.

And I tell you this: with the amazing base of talent, skill and competitiveness this nation has right now, if we fix these things, it will be downright exciting — and scary to some — how competitive this country's businesses can be.

The Philippine Star

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Rating Agencies 'Behind the Curve' on Philippines - the fastest growing economies in ASEAN

One of Southeast Asia's fastest growing economies - the Philippines - got a ratings upgrade last year, but its finance secretary Cesar Purisima told CNBC the agencies were still "behind the curve" and the Philippines deserved a higher credit rating.

All three agencies Fitch, Moody's Investors Service and Standard & Poor's have kept the Philippines at one notch below the coveted investment grade. The latter two agencies upgraded the rating to that level only last year.

"The market rates are two notches above investment grade already, so we're borrowing at a much cheaper cost than our credit rating. So I think they [the credit rating agencies] are way behind the curve," said Cesar Purisima.

The Southeast Asian economy has benefitted from strong growth in recent years. It grew by 6.6 percent in 2012 and the government is targeting similar growth in 2013.

Answering a question on why the Philippines was "obsessively" pursuing a credit ratings upgrade Purisima said: "No it is not obsessive. It's just making sure that they recognize what is the proper rating of the Philippines."

The finance secretary also said he was planning to develop the local bond market by trying to encourage more corporates to borrow from the market rather than from banks.

"Economies have cycles. And in a down cycle if the majority of borrowing is through banks, then you risk creating problems in the banking system. But if you have a big share in the bond market then it is just asset prices," he said.

Purisima said Philippines' turnaround has been fueled by a transformation in the quality of governance.

"Good governance equals good economics. Basically that is what held back the Philippines in the past - bad governance," he said.

However, unemployment levels remain a sticking point for the growing economy. The Philippines' unemployment rate increased to 7.1 percent in the final quarter of 2012 from 6.8 percent in the third quarter.

The government is directing resources into the tourism, agriculture, business process outsourcing (BPO) and infrastructure sectors to create more jobs, said Purisima.

CNBC News

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Bloomberg: Philippines Beats Indonesia as Aquino III Finds Favor: ASEAN Credit

The yield on the junk dollar bonds of the Philippines is at a record discount to higher-rated Indonesian notes as confidence in the nations' leaders diverges.

Philippine President Benigno Aquino III, 53, halfway through a six-year term, increased taxes and ousted the country's top judge last year for illegally concealing his wealth, impressing Pictet Asset Management and Kokusai Asset Management Co. Indonesian President Susilo Bambang Yudhoyono, 63, who is in his final year in office, failed to cut fuel subsidies in 2012 as the annual shortfall in the current account rose to a record.

"In terms of fundamental reforms, the Philippines is improving while Indonesia is not," Wee-Ming Ting, the Singapore-based head of Asian fixed income at Pictet Asset, which oversees $29 billion of emerging-market debt globally, said in an interview last week. "The yield gap between their hard-currency bonds is likely to stay or widen until Indonesia starts to implement real reforms."

Philippine debt due 2037 yielded 3.97 percent on March 5, 91 basis points less than similar-maturity securities from Indonesia, according to data compiled by Bloomberg. The spread, which was 72 as of 1:12 p.m. in Manila, increased from 26 basis points a year ago. The outperformance raises question marks over why Moody's Investors Service and Fitch Ratings have left the Philippines' rating unchanged after raising Indonesia from junk status more than a year ago.

Dollar Sales

The Philippines may shun the global bond market this year, breaking a run of sales that stretches back a decade as it boosts domestic borrowing, Treasurer Rosalia de Leon said this month. Indonesia said in February it would sell dollar debt in the first half of 2013.

Aquino's government recorded a current-account surplus of $7.2 billion for the first nine months of last year as remittances from overseas workers increased 6.3 percent in 2012 and revenue from foreign companies outsourcing functions, including call centers, to the Philippines rose 18 percent.

In Indonesia, the broadest measure of trade swung to a deficit of $24.2 billion in 2012, the biggest annual shortfall since Bloomberg began compiling the data in 1989, from an excess of $1.7 billion in 2011. The government spent 211.9 trillion rupiah ($22 billion) on fuel subsidies last year, discouraging the energy saving required to reduce its import bill.

It has been cheaper to insure Philippine debt against non- payment than Indonesia's since July 2011. Five-year credit- default swaps on the former's bonds dropped 40 basis points to 96 basis points in the year through yesterday, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market. Those on Indonesia's notes fell 20 basis points to 131.

'Policy Slippages'

Standard & Poor's said in April 2012 it refrained from awarding Indonesia investment-grade status as the country's push to lure investment was at risk from "policy slippages" such as the failed attempt to cut fuel subsidies earlier that year. President Yudhoyono said this week that his government is weighing the pros and cons of raising fuel prices or choosing another method that would more effectively target the subsidies at poorer consumers in a nation where almost one in five people lives on less than $1.25 a day, according to the World Bank.

Both countries have the highest junk rating of BB+ from S&P, which raised the outlook on the Philippines rating to positive in December, saying a revision is possible this year as public finances and governance improve. Aquino said in January the nation "is on the cusp" of winning an investment-grade rating. Moody's rates Indonesia at its lowest investment grade of Baa3, while it assesses the Philippines one level below that at Ba1.

Corruption Perceptions

"The Philippines' credit has been improving while there are some short-term concerns about Indonesia's macroeconomic management," Takahide Irimura, Tokyo-based head of emerging- market research at Kokusai Asset, which runs Japan's biggest mutual fund, said in a March 5 interview. "Political situations in both countries have been stable, but Yudhoyono's term ends soon" raising concern about what will happen next, he said.

Yudhoyono, who campaigned on promises to reduce corruption in 2009, has been beset by recent scandals within his own Democrat Party. Last year, Muhammad Nazaruddin, the former treasurer of the party, was sentenced to four years and 10 months in prison for taking 4.68 billion rupiah in bribes.

The Philippines is now seen as less corrupt than Indonesia, according to Transparency International's Corruption Perceptions Index. It improved to 105th place in 2012 from 139th in 2009, a year before Aquino became president. Indonesia was ranked 118th last year, slipping from 111th three years earlier, according to the Berlin-based watchdog's website.

Priced In

Indonesia's dollar bonds are "slightly more attractive" than its neighbor from a valuation perspective because Philippine bonds have already priced in an investment-grade status, Jonathan Liang, a Hong Kong-based senior portfolio manager for fixed income at AllianceBernstein LP, which oversees $437 billion globally, said in a March 7 e-mail interview.

Gross domestic product in Indonesia will increase 6.3 percent in 2013, while the Philippine economy will expand 5.9 percent, according to the median estimates of economists in Bloomberg News surveys. Authorities in Jakarta plan to invest more than $300 billion by the end of next year on infrastructure and manufacturing facilities, Coordinating Minister for the Economy Hatta Rajasa said in December.

"Indonesia continues to devote a meaningful amount of capital towards fixed-asset investment, helping to alleviate bottlenecks in its economy, which we believe will help them sustain long-term economic growth and lower inflation," Liang said.

'Weak Momentum'

Pioneer Investments said it prefers the Philippine's local- currency debt due to the "weak momentum" for the rupiah notes. The Philippine 10-year peso bond yield slumped 87 basis points this year to 3.53 percent today, while the Indonesian rate added 26 basis points to 5.45 percent, data compiled by Bloomberg show. Indonesia's securities returned 0.6 percent this year, compared with 7.8 percent for the peso-denominated notes, according to indexes compiled by HSBC Holdings Plc.

The peso will strengthen 2 percent against the dollar in 2013 after rallying 6.8 percent last year, according to the media estimate of economists surveyed by Bloomberg. It strengthened 0.1 percent today to 40.597. The rupiah will advance 0.7 percent this year after weakening 5.9 percent in 2012. It was little changed at 9,701 today.

Hakan Aksoy, a fund manager at Pioneer in London, which oversees 156 billion euros ($203 billion) of assets, said his company was short against its benchmark for rupiah bonds, meaning the firm holds less than the index it follows.

'Inflow Bandwagon'

"After the election in Indonesia, we may increase our position," he said in a March 5 interview. "We also expect to see lower rupiah levels in the meantime."

Developing-nation bond funds have attracted inflows of $15.3 billion in the first two months of this year, compared with $10.1 billion in the same period in 2012, according to EPFR Global. Overseas investors raised their holdings of Indonesian local-currency government notes by 46.1 trillion rupiah in the six months through March 13 to 284.8 trillion rupiah, according to finance ministry data. There are no equivalent figures available for the Philippines.

"We are still more positive on the Philippines than on Indonesia," Pictet's Ting said. "Indonesia is riding on the emerging-debt inflow bandwagon and benefiting from that. If they do not take the opportunity to address their structural problems, it will not be nice when outflows start."

As published in Bloomberg read more here

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Philippines cited as Standout - 74% led over all ASEAN countries

Philippines cited as standout

THE PHILIPPINES is poised to be the standout in Southeast Asia yet again, leading the pack in terms of economic growth and investor confidence, Standard Chartered Bank has projected.

In a survey of more than 900 investors in the Association of Southeast Asian Nations, Manila emerged as the frontrunner among other key cities in the region, the British banking giant said in a report yesterday.

"The Philippines was the standout country in terms of the strength of on-the-ground sentiment… We expect the Philippines to see stronger investment growth this year, sustaining the strong momentum from 2012," Standard Chartered said.

Some 74% of investor-respondents in Manila expect to see better business prospects in 2013 compared to the year before, dwarfing scores in Jakarta (46%), Bangkok (44%), Singapore (44%) and Kuala Lumpur (41%).

The survey also found that investors in Manila are most worried about the European, American and Chinese markets this year. No one cited the Philippines as a concern. In comparison, 47% of investors in Kuala Lumpur said their own country worried them, followed by 43% in Singapore, 35% in Jakarta and 19% in Bangkok.

The peso is expected to get stronger, with 86% of investors in Manila saying they expect to see their currency appreciating against the dollar in 2013. Only 67% of investors in Bangkok, 52% in Kuala Lumpur, 50% in Singapore and 35% in Jakarta thought the same.

"We are optimistic that the Philippines will outperform the region and enjoy another year of strong growth momentum in 2013," Standard Chartered said.

It forecast that the country could grow by 5.8% this year and 6.1% next year, beating its 10-year average of 5.2%. The estimates, however, fall below the government targets of 6-7% and 6.5-7.5%, respectively. This follows the banner performance in 2012 when the gross domestic product (GDP) growth hit a stunning 6.6%, beating market expectations and the official goal of 5-6%.

According to Standard Chartered, the economy will likely be driven by domestic consumption yet again. Public and private investment should pick up too but exports could remain weak, acting as a "negative but limited drag on growth."

It also expected further progress in the public-private partnership (PPP) program, after eight projects -- mainly in infrastructure, transport and power -- were rolled out last year and others lined up for launch this year.

PEACE TO PROVIDE LIFT

Another upside to growth is the peace deal with the Moro Islamic Liberation Front, it added. Citing its studies, the peace deal could add 0.1 percentage point to GDP in its first year of implementation, increasing to 0.3 percentage point by the fifth.

Standard Chartered also expects the Bangko Sentral ng Pilipinas (BSP) to keep policy rates on hold for now, then raise it by as much as 50 basis points by yearend. Rates could then be kept steady at that level next year.

Policy rates -- the benchmark for interest rates -- are at record lows of 3.5% and 5.5% for overnight borrowing and lending, respectively.

The rate hike could be prompted by an increase in the pace of inflation, it said. Higher energy and food prices, robust consumer spending and base effects could combine to push up inflation rate to 3.6% this year and 4% in 2014. These are well within the BSP target of 3-5% but much higher than the forecast full-year averages of 3% and 3.2% for 2013 and 2014, respectively.

The peso should remain strong, the bank said, underpinned by strong economic fundamentals. The local currency could climb to P39 against the dollar this year and P38 the year after.

The peso appreciated by some 6.8% against the greenback in 2012 -- one of the strongest performers in the region -- closing at P41.05 on the last trading day. So far this year, it has traded within the P40-to-a-dollar territory, much stronger than the P42-45 exchange rate assumed by the BSP.

Lastly, Standard Chartered said that reduction of the fiscal deficit is on track, especially with the recent increase in excise taxes on liquor and cigarettes, propelling the Philippines to bag its first ever investment grade credit rating.

The bank anticipates the deficit to fall to 1.8% of GDP in 2013 and 1.6% in 2014 -- against the cap of 2% for both years -- roughly equivalent to P238 billion and P266.2 billion, respectively.

"We expect at least two of the three main credit rating agencies to upgrade the Philippines to investment grade by end-2013…" it said.

"The case for investment grade is supported by a number of factors, including a resilient economy, a current account surplus, stable fiscal policy and the narrowing of the budget deficit."

The Philippines currently stands at one notch below investment grade with the three major credit rating agencies. It has a Ba1 rating with Moody's Investors Service and a BB+ rating with Fitch Ratings and Standard & Poor's. –

Read more in Business World Online 

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Philippines compromised for Allowing China Export to Europe used the Philippines to avoid TAX

Bloomberg reported 27 Nation bloc in Europe Extends Levy on Chinese Stainless-Steel Screws to Philippines.

The European Union extended to the Philippines a tariff on stainless-steel screws and bolts from China, saying Chinese exporters used the country to evade the levy meant to aid EU producers like Italy's Bontempi Vibo SpA.

The EU said Chinese exporters of stainless-steel fasteners shipped them to Europe via the Philippines to dodge the 27.4 percent duty. This is the outcome of a probe that also covered Malaysia and Thailand, where the EU concluded that no Chinese circumvention took place.

The import tax "was circumvented by trans-shipment via the Philippines," the 27-nation bloc said in a decision today in Brussels. The extension exempts two Philippine companies -- Multi-Tek Fasteners Inc. and Rosario Fasteners Corp. -- and will take effect after publication in the EU's Official Journal within a week.

The EU renewed the trade protection against China in January 2012 for another five years to help European producers that also include Bulnava Srl of Italy, Germany's Reisser Schraubentechnik GmbH and France's Ugivis SA counter below-cost, or "dumped," imports from the Asian country. The 27.4 percent levy is the maximum of three rates, which depend on the Chinese exporter. The lowest levy is 11.4 percent.

At the time, the EU also reimposed for five years anti- dumping duties as high as 23.6 percent on stainless-steel fasteners from Taiwan.

The extension of the maximum levy against China to the Philippines is the outcome of a circumvention probe that the EU began last June and will apply retroactively to imports as of that time, when the bloc also began to register shipments of stainless-steel fasteners from the Philippines.

Source: Bloomberg 

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WEF lists Philippines as one of tourism sector's “rising stars”

(Updated 11:54 a.m.) The World Economic Forum reported on Thursday that the Philippines now one of the world's "rising stars" and the most improved Asian nation in terms of travel and tourism.

The Philippines "is the most improved country in the region," WEF said in its "Travel and Competitiveness" report, noting the country's "comparative strengths" in natural resources, price competitiveness, and a "very strong" prioritization of the sector.

In the WEF ranking of 140 countries, the Philippines placed 82, up from 94 in the WEF 2011 list that  covered 139 countries.

"Government spending on the sector as a percentage of GDP (gross domestic product) is now first in the world, and tourism marketing and branding campaigns are seen to be increasingly effective," the WEF report read, referring to the Aquino administration's tourism initiatives and branding—"It's more fun in the Philippines"—campaign.  

"In addition, the country has been ensuring that several aspects of its policy rules and regulations regime are conducive to the development of the... sector," it added.

WEF listed better protection of property rights, more openness toward foreign investments, and few visa requirements for foreign visitors as areas where the Philippines fared well in terms of policy.

In a statement on the report's release, WEF called the Philippines along with Panama—whose ranking jumped to 37 from 52—as the world's "rising stars" due to " policy improvements supporting the [travel and tourism] industry."

The report noted the Philippines should improve on other areas to further raise its ranking.

"However, other areas—such as the difficulty of starting a business in the country, in both cost and length of the process—remain a challenge," the report  read.

"Moreover, safety and security concerns; inadequate health and hygiene; and underdeveloped ground transport, tourism, and ICT (information and communications technology) infrastructure are all holding back the potential of the economy's competitiveness," it added.

Last month, Tourism Secretary Ramon Jimenez said his department is targeting a bigger contribution of  tourism to the GDP and partnering with other agencies in improving travel infrastructure and policies.

The government wants to attract 10 million foreign tourists in the country. Last year, there were 4.3 million foreigners who traveled to the Philippines.

The WEF report, meanwhile, noted that Switzerland remained as the world's most competitive travel and tourism destination in 2013.

Germany maintained its second best ranking, while Austria inched up to the third spot from fourth place.

Conceived in 1971 by European business leaders, WEF is an independent international organization that aims to engage business, political, academic and governments to shape global, regional and industry agendas.

The Travel and Tourism Competitiveness Report 2013 assessed 140 economies based on the extent of  factors and policies in place to develop and make the sector more attractive. — Siegfrid Alegado/VS,

GMA News

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China Naval Fleet Haixun 21, 31, 166 Arriving West Philippines Sea; Warship BRP Alcaraz again delayed

Philippine Warship BRP Ramon Alcaraz

Despite the Philippines' repeated protests and condemnation of China's incursions into the West Philippine Sea (South China Sea), a fleet of Chinese surveillance ships has again sailed into the contested waters on "regular patrol missions," Chinese state media reported.

The Maritime Safety Administration of Hainan said the fleet composed of the Haixun 21, the Haixun 31 and the Haixun 166 left the province's Sanya port for patrols in the disputed waters, according to a report in China's state-run Xinhua news agency.

"The missions will strengthen china's maritime law enforcement capacity and test the patrol team's rapid response abilities in the disputed Sea," the report said.

The patrols "will monitor maritime traffic safety, investigate maritime accidents, detect pollution, and carry out search and rescue work," it added.

The patrol is China's second known ship deployment in the West Philippine Sea. It previously dispatched two ships from the city of Guangzhou in southern China.

China earlier announced fishery patrols in the West Philippine Sea, prompting "strong objection" from the Philippines.

The Department of Foreign Affairs did not immediately issue any statement on Saturday but it had many times in the past condemned similar Chinese patrols as violations of the Philippines' established maritime borders.

The Philippine government in January went to a United Nations (UN) arbitral panel to put a stop to China's incursions in the West Philippine Sea. The legal action also seeks to invalidate China's nine-dash line claim, which places almost all of the West Philippine Sea islands within Chinese territory.

China has refused to participate in the compulsory process, a decision that could boost the Philippines' case before the ad hoc tribunal, says a world expert on international law.

"If China does not participate, it will not be able to submit evidence and make legal arguments. So it's really strengthening the Philippines' chances at the tribunal," said Tom Ginsburg, a professor of international law at the University of Chicago.

He conceded, however, that while any UN tribunal decision on the case would be binding, China's compliance would be another matter.

2^nd PHL Warship Again delayed for more sophisticated Trainings for Mk38 Mod 2

The arrival of the BRP Ramon Alcaraz, the second warship acquired by the Philippines from the United States, has been moved to August due to the need to conduct more training for its crew.

Navy spokesman Lt. Cmdr. Gregory Fabic said yesterday that the training of Filipino sailors and the refurbishment of the vessel are still ongoing.

"Their trainings are extensive, training in terms of equipment and shipboard evolution. The travel time takes about two months so it will arrive in August," Fabic said in Filipino.

BRP Ramon Alcaraz will have two Mk38 Mod 2 automatic cannon systems and will be among the first ships in the world to be equipped with state-of-the art cannon systems.

The Mk38 Mod 2 is designed to counter high-speed maneuvering surface targets which system would be installed also in almost all US surface ships by 2015.

Defense officials previously said the BRP Alcaraz would arrive in the country by January or February this year. The schedule was pushed back to April, with officials citing the same reason – the need for Navy personnel to undergo training.

Fabic noted that the use of the ship's equipment requires technical knowledge.

"The (pieces of) equipment are sophisticated like those used for navigation, fire control," he said.

RP Alcaraz was acquired from the US Coast Guard, after the acquisition of BRP Gregorio del Pilar in 2011, and was largely used for drug and migrant interdiction, law enforcement and search and rescue.

The acquisition of the naval assets was intended to enhance the military's maritime defense capability.

Security officials bared plans to fast-track the military's upgrade program amid efforts by China to shore up its presence in the West Philippine Sea (South China Sea). Officials, however, maintain that the upgrade efforts are not directed against any country.

BRP Alcaraz can accommodate up to 180 officers and sailors. The vessel was named after Commodore Ramon Alcaraz, a Navy officer who commanded a patrol boat that shot three Japanese aircraft during World War II.

The government spent more than ₱600 million to acquire the ship.

The defense department plans to acquire two more warships within the first quarter.

Among the countries that are ready to provide defense assets are US, Italy, South Korea, Spain, Israel, Croatia and Australia.

With reports from RFTBP, philSTAR, and INQUIRER

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Philippines’ elite swallow country’s new wealth

Optimism is soaring that the Philippines is finally becoming an Asian tiger economy, but critics caution a tiny elite that has long dominated is amassing most of the new wealth while the poor miss out.

President Benigno Aquino has overseen some of the highest growth rates in the region since he took office in 2010, while the stock market has hovered in record territory, credit ratings have improved and debt ratios have dropped.

"The Philippines is no longer the sick man of East Asia, but the rising tiger," World Bank country director Motoo Konishi told a forum attended by many of Aquino's economic planning chiefs recently.

However economists say that, despite genuine efforts from Aquino's team to create inclusive growth, little progress has been made in changing a structure that for decades has allowed one of Asia's worst rich-poor divides to develop.

"I think it's obvious to everyone that something is structurally wrong. The oligarchy has too much control of the country's resources," Cielito Habito, a respected former economic planning minister, told AFP.

He presented data to the same economic forum at which Konishi spoke, showing that in 2011 the 40 richest families on the Forbes wealth list accounted for 76 percent of the country's gross domestic product (GDP) growth.

This was the highest in Asia, compared with Thailand where the top 40 accounted for 33.7 percent of wealth growth, 5.6 percent for Malaysia and just 2.8 percent for Japan, according to Habito.

According to the Forbes 2012 annual rich list, the two wealthiest people in the Philippines, ethnic Chinese magnates Henry Sy and Lucio Tan, were worth a combined $13.6 billion.

This equated to six percent of the entire Philippine economy.

In contrast, about 25 million people, or one quarter of the population, lived on $1 a day or less in 2009, which was little changed from a decade earlier, according to the government's most recent data.

Some of the elite families have dominated since the Spanish colonial era that ended in the late 1800s.

Prominent Spanish names, such as Ayala and Aboitiz, continue to control large chunks of the economy and members of the families are consistent high placers on Forbes' annual top-40 wealth list.

Their business interests range from utilities to property development to banking, telecommunications and the booming business process outsourcing industry.

Many of the ethnic Chinese tycoons, such as Sy and Tan, got their start soon after the country gained post-World War II independence from the United States.

The tendency for the same names to dominate major industries can be partly attributed to government regulations that continue to allow near monopolies and protections for key players.

For decades after independence from the United States in 1946, important sectors such as air transport and telecommunications were under monopoly control, according to a Philippine Institute for Development Studies paper.

Despite wide-ranging reforms since 1981, big chunks of the market remain effective oligopolies or cartels, it said.

Habito said the path to riches for the few is also helped by a political culture that allows personal connections to easily open doors.

The Aquino government's mantra since succeeding graft-tainted Gloria Arroyo's administration has been good governance and inclusive growth, and their efforts have been applauded by the international community.

The government is spending more than $1 billion this year on one of its signature programmes to bridge the rich-poor divide.

The conditional cash transfers programme will see 15 million of the nation's poorest people receive money directly in exchange for going to school and getting proper health care.

However Louie Montemar, a political science professor at Manila's De La Salle University, said little had been done at the top end to impact on the dominance of the elite.

"There's some sense to the argument that we've never had a real democracy because only a few have controlled economic power," Montemar told AFP.

"The country dances to the tune of the tiny elite."

Nevertheless, the government and economists say there are many other reforms that can be taken to bring about inclusive growth.

Analysts said the most direct path out of poverty was improving worker skills, using higher tax revenues to boost spending on infrastructure, and rebuilding the country's manufacturing sector.

To this end, many economists endorse the Aquino government's cash transfer programme as well as reforms to the education system, which include extending the primary and high school system from 10 to 13 years.

But for people such as mother-of-five Remy del Rosario, who earns about 1,500 pesos ($36) a week selling cigarettes on a Manila roadside, talk of structural reform and inclusive growth mean little.

With her bus driver husband out of work, the family has no savings and her income is barely enough to cover food, bus fare, and prescription medicines.

"Other people may be better off now, but we see no improvement in our lives," she said. (http://bit.ly/Ximlsw)

AFP/ INQUIRER Business 

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