World Bank: Philippines & the Asia Pacific Dollar remittances higher amid inflation

The Asia Pacific Region – Map (A formation of a standing roaster)

Despite its ballooning inflation rate, the Philippines posted the second highest growth of remittances among developing countries for 2010, the World Bank said in a report released to the Philippine media Tuesday.

In the World Bank Outlook for Remittance Flows for 2011 to 2013, economists Sanket Mohapatra, Dilip Ratha, and Ani Silwal reported that remittances to the Philippines, adjusted for inflation in local currency terms, grew by -1.4 percent in 2010. The top performer in this area was China, which grew by 1 percent.

Published under the World Bank Migration and Development Brief on Monday, the report places these figures in the context of the “quick" recovery of developing countries from the 2008 global financial crisis.

“Officially recorded remittance flows to developing countries recovered quickly to $325 billion in 2010 after the global financial crisis," the World Bank explained. “But they have not kept pace with rising prices in recipient countries."

Overall, the World Bank said remittances to developing countries grew 5.6 percent in US dollar terms in 2010, “but grew by a smaller 3.9 percent after accounting exchange rate changes, and fell by 2.7 percent after adjusting for inflation."

In 2010, the Philippines’ inflation rate grew to 3.8 percent from 3.2 percent in 2009, according to the National Statistics Office.

 

Philippines among top recipients

With $21.4 billion in remittances, the Philippines took the fourth largest share of remittances among developing countries in 2010, the WB said. The largest recipient was India with $53.1 billion, followed by China with $51.3 billion, and Mexico with $22 billion. It shows that the strong performing economy of the Philippines tried to race with the Giants Economies like China, India and Mexico.

In US Dollars, the World Bank said remittances to the Philippines grew by 8.1 percent in 2010 — the fourth largest growth in US-dollar terms, next to Vietnam with 17 percent, Lebanon with 11.3 percent and Pakistan with 11.1 percent. The Philippines’ growth in this area ties with that of Egypt.

In local currency terms, the Philippines fared as the 8th among the 10 largest recipient countries in 2010, the World Bank said. The country posted a growth of 2.3 percent in this area, trailing Vietnam, Pakistan, Lebanon, Egypt, Nigeria, China, and Bangladesh.

“The reduction in local currency value of remittances implies hardship for recipients, and increased pressure on migrants to send more to maintain the purchasing power of their remittances," the World Bank noted.

For the East Asia and Pacific region, which includes the Philippines, the World Bank projected a growth of 6.8 percent in remittance inflows last year, 8 percent for 2012, and 9.5 percent for 2013.

“Given the volume of remittances flowing to developing countries, innovative financing tools such as diaspora bonds and remittance-backed bonds are being viewed as potential sources that can finance infrastructure and development projects at lower cost and longer maturities," the World Bank added.

 

Effect of Middle East, North Africa crisis

The multilateral bank also said the effect on migration of the political turmoil in parts of North Africa and the Middle East “appears to have been largely localized within the region."

“Outside the North Africa and Middle East region, the remittance recipient region that could be affected by the crisis is South Asia," the WB said.

However, the bank noted a “lack of reliable and high-frequency data on both migration and remittances during the crisis in North Africa and the Middle East."

“Basic facts on the impacts of the crisis for migrants and recipient countries are simply not available," the World Bank said. “There is urgent need for rapid monitoring systems in both migrant-sending and -recipient countries through improved data collection and dissemination of high-frequency data on migration and remittances."

Earlier this month, the Bangko Sentral ng Pilipinas reported that overseas Filipino workers’ remittances rose by 5.9 percent in the first quarter of 2011 amid earlier fears of a decline due to the political unrest in Middle East and North Africa, and the disasters in Japan

 

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teh Philippines PNR - 2 Billion investment for Mayon Volcano Tain offer World Class train amenities

PNR restoring South Luzon railways

the Philippines: The train service that can take travelers from Metro Manila to Naga City in under 10 hours is set to make a comeback in the next few months, promising to help the Bicol Region maximize its immense potential for economic growth.

The state-run Philippine National Railways (PNR) has been working on the Manila-Naga rehabilitation since the start of the Aquino administration.

Following a test-run earlier this month, the PNR on Wednesday declared that the dream of reviving the fabled “Bicol Express” could soon be a reality.

“In my assessment, the Bicol test-run we conducted was 95-percent successful and we are nearing our objective to put back in operation the commercial PNR trips to the Bicol region,” PNR General Manager Junio Ragragrio said.

“We were delighted to reach Naga City from Manila in less than 10 hours. We were even more in high spirits on our return trip to Manila the following day since it only took us nine hours going back,” he said.

The 10-hour mark had become the PNR management’s yardstick because it takes an average of 10 hours to get to Bicol from Manila by bus. Making it in less time means the PNR train service can become an alternative means of transport for people who cannot afford to go by plane.

He said the resumption of the Bicol Express would open doors of opportunities ranging from boosting local tourism to stirring up economic activities in Southern Luzon.

 

Trains could help for tourist access – Southern Luzon Tourist Destination

The popular tourist destinations in the Bicol area include the Camsur Watersports Complex (CWC) in Camarines Sur. Mayon Volcano, known for its near-perfect cone shape, is also in Bicol.

Another eco-tourism destination is the town of Donsol in Sorsogon, where tourists are able to swim with whale sharks.

Several projects were on the table for the Bicol Express route, including the renovation of several train stations traversing the provinces of Laguna, Quezon, Camarines Sur and Albay.

“The PNR would like to be among the major catalysts and a partner in the further development of the country connecting provinces via a comprehensive railway system,” he said.

“The railways system during the early growth of this nation during the Spanish and American times was the very backbone of social and economic progress. It was done before and it can be done again,” he said.

The test-run was conducted during the weekend using a newly refurbished locomotive train with several tourist-class coaches and covered a distance of more than 400 kilometers.

Earlier, PNR would spend P1.8 billion for the rehabilitation of the train line. About P200 million would go to the acquisition of new trains and rehabilitation of existing ones.

 

PNR World Class train amenities

The rest would be spent to fix the 400-kilometer stretch of track from Manila to Bicol that had deteriorated and become unusable in the past few years due to neglect.

He said train cars called “sleeper coaches” were used during the test-run to check its journey worthiness. All train coaches in the Bicol Express will be air conditioned, he said.

Also included in the test-run was a locally refurbished passenger coach with several reclining chairs with a fit and finish comparable to imported train cars. It has better amenities to compete with imported first-class air-conditioned bus.

“We are offering three classes of train cars once we start operations of the Bicol Express. We have the tourist class where we have reclining chairs with more leg room compared to commercial buses”.

The newly installed amenities should help attract more passengers to use the train line, which he sees as a better alternative to busses.

Other amenities include widescreen LCD monitors with state-of-the-art sound system to allow passengers to comfortably watch movies during the long trip.

“We also have two types of sleeper coaches. One is a family suite that is good for a family or ‘barkada’ of four to six persons. And we also have the executive class for passengers who would like extra privacy during the lengthy tour, and part of the attraction is the inclusion of a dining car with an ambiance of first-class restaurant.”

 

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Energizing the $2 Billion US Dollar Bataan Nuclear Power Plant - Philippines

The Bataan Nuclear Power Plant, which has lain dormant since it was completed in 1984 at a cost of $2.3 billion US Dollar, will be opened to tour groups to teach them about nuclear power, said regional tourism director Ronald Tiotuico.

Tiotuico said the move was timely amid increased public interest in the issue following the crisis at the Fukushima nuclear power plant in Japan, caused by a huge earthquake and tsunami on March 11.

"It's a learning experience. You can see all the machinery, all the equipment and learn what happened in Fukushima and how it will not happen in Bataan," he told AFP.

He stressed that the plant was safe as the uranium fuel had been removed long ago.

The 620-megawatt plant, located in Bataan province about two hours' drive from Manila, was built under then-president Ferdinand Marcos to help deal with energy problems following the oil price crises of the 1970s.

But after Marcos was overthrown in a popular revolt in 1986, his successor Corazon Aquino refused to put it into operation, citing safety concerns such as the plant's location near an earthquake fault and active volcano.

It has since become a huge white elephant, costing the government millions of dollars in maintenance.

About the Bataan Nuclear Power Plant (Philippines)

Bataan Nuclear Power Plant is a nuclear power plant, completed but never fueled, on Bataan Peninsula, 100 kilometers (60 miles) west of Manila in the Philippines. It is located on a 3.57 square kilometer government reservation at Napot Point in Morong, Bataan. It was the Philippines' only attempt at building a nuclear power plant. It stands on a 357-hectare lot owned by the government. The plant is only 9 kilometers away from a dormant volcano called Mt. Natib. Because Mt. Natib stands between the Philippine Fault and the West Luzon Fault, seismic activity is likely to occur in the area and plant operation is deemed unsafe.

During the plant's construction, a Westinghouse light water nuclear reactor was installed. Had the plant been operational, the equipment would have used pressurized water to generate steam from the nuclear reactor's heat.

The reactor was capable of holding 1878 megawatts of heat energy. It would have generated approximately 621 megawatts of electricity.

The technology the plant was supposed to operate on was from the 1970s. Following the US Nuclear Regulatory Commission, however, it was further improved in order to prevent incidents like the Three-Mile Island nuclear accident that took place in March 1979.

It was commissioned by president Ferdinand Marcos and building commenced in 1976. The plant's construction was completed in 1984.

When Marcos was overthrown and replaced by Corazon Aquino, the nuclear power plant project was scrapped. The Chernobyl accident of 1986 had the public protesting against the plant's operation. Another major concern is that the nuclear plant is located in an area where earthquakes are likely to occur.

To this day, the Bataan Nuclear Power Plant has remained unused. Up until April 2007, the Philippine government had to pay 155,000 dollars every day to pay for the loan that funded the power plant's construction.

History of the Philippine Nuclear Energy Program

In 1958, the Philippine Atomic Energy Commission (PAEC) was established in accordance with Republic Act 2067 which was supported by President Carlos P. Garcia.

In 1973, the Philippine economy was under a lot of pressure due to the oil crisis. With the intention of finding an alternative energy source, Marcos decided in July of that year to construct a nuclear power plant.

Workers started building the power plant in 1976. Construction was put on hold in 1979 because of the Three Mile Island accident that happened in the United States. A survey of the unfinished power plant showed that it had more than 4,000 defects. It was also pointed out that one of the biggest safety issues behind the BNPP's construction was that its location was prone to earthquakes.

The BNPP was finally completed in 1984. Its construction cost the government $2.3 billion. With its Westinghouse light water reactor, BNPP was supposed to generate 621 megawatts of electric energy.

In 1986, the Marcos Regime ended and Aquino was installed into the presidency. In April of that same year, the Chernobyl disaster happened. This was one of the major reasons Aquino did not push through with the operation of the BNPP.

The Philippine government tried to legally charge Westinghouse Electric Co. for fraudulent schemes in the installment of the Westinghouse nuclear reactor. However, the United States court turned down the case.

Succeeding administrations were strained to pay off the debt incurred for the BNPP's construction. They also tried to come up with ways in order to convert the nuclear power plant into a fossil fuel-based energy source, but such plans were deemed economically infeasible.

In 2008, a team of surveyors led by Akira Omoto was commissioned to survey the BNPP for possible rehabilitation. The Philippine government is waiting on the team's report.

History of the Bataan Nuclear Power Plant

The Philippine nuclear program started in 1958 with the creation of the Philippine Atomic Energy Commission (PAEC) under Republic Act 2067. Under a regime of martial law, Philippine President Ferdinand Marcos in July 1973 announced the decision to build a nuclear power plant. This was in response to the 1973 oil crisis, as the Middle East oil embargo had put a heavy strain on the Philippine economy, and Marcos believed nuclear power to be the solution to meeting the country's energy demands and decreasing dependence on imported oil.

Construction on the Bataan Nuclear Power Plant began in 1976. Following the 1979 Three Mile Island accident in the United States, construction on the BNPP was stopped, and a subsequent safety inquiry into the plant revealed over 4,000 defects. Among the issues raised was that it was built near major earthquake fault lines and close to the then dormant Mount Pinatubo.

By 1984, when the BNPP was nearly complete, its cost had reached $2.3 billion. Equipped with a Westinghouse light water reactor, it was designed to produce 621 megawatts of electricity.

Marcos was overthrown by the People Power Revolution in 1986. Days after the April 1986 Chernobyl disaster, the succeeding administration of President Corazon Aquino decided not to operate the plant. Among other considerations taken were the strong opposition from Bataan residents and Philippine citizens.

The government sued Westinghouse for overpricing and bribery but was ultimately rejected by a United States court. Debt repayment on the plant became the country's biggest single obligation. While successive governments have looked at several proposals to convert the plant into an oil, coal, or gas-fired power station, these options have all been deemed less economically attractive in the long term than simply constructing new power stations.

2000's

Despite never having been commissioned, the plant has remained intact, including the nuclear reactor, and has continued to be maintained. The Philippine government completed paying off its obligations on the plant in April 2007, more than 30 years after construction began.

On January 29, 2008, Energy Secretary Angelo Reyes announced that International Atomic Energy Agency (IAEA) 8-man team led by Akira Omoto inspected the mothballed Bataan Nuclear power station on rehabilitation prospects. In preparing their report, the IAEA made two primary recommendations. First, the power plant's status must be thoroughly evaluated by technical inspections and economic evaluations conducted by a committed group of nuclear power experts with experience in preservation management. Second, the IAEA mission advised the Philippines Government on the general requirements for starting its nuclear power program, stressing that the proper infrastructure, safety standards, and knowledge be implemented. The IAEA's role did not extend to assessing whether the power plant is usable or not, or how much the plant may cost to rehabilitate. On February 1, 2010, National Power Corporation (NAPOCOR) started evaluating the financial plan of Korea Electric Power Corporation (KEPCO), assessing that it may cost $1-billion to rehabilitate the nuclear plant.

On February 22, 2011, the Philippine government will reimburse the National Power Corporation (NAPOCOR) ₱4.2 billion (US$96 million) it spent for maintaining the mothballed Bataan Nuclear Power Plant. It requires an average of ₱40 million a year just to maintain it. In May 2011, it was announced that the plant would be turned into a tourist attraction.

 

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