Moody's upgrade Philippines credit rating to Investment grade- level with S&P, Fitch, and JICA

The Philippines won a rating upgrade from Moody's Investors Service, completing the nation's ascent to investment rank as President Benigno Aquino leads a growth resurgence that's outpacing the rest of Southeast Asia.

The rating on Philippine government debt was raised one level to Baa3, Moody's said in a statement today, citing "robust economic performance," ongoing fiscal and debt consolidation, political stability and improved governance. The outlook on the rating is positive. Stocks and the peso rose.

Aquino, who won control of the Philippine Congress in May elections, has pledged to accelerate reforms needed to ensure the nation's economic revival is sustained. His efforts won investment-grade credit scores from Standard & Poor's and Fitch Ratings earlier this year, while the country's expansion of 7.5 percent in the second quarter matched China's pace.

"The upgrade was expected; what is a bit surprising here is the positive outlook, making them more bullish than other rating agencies," said Euben Paracuelles, an economist at Nomura Holdings Inc. in Singapore. "It's a big plus for Aquino, reflecting the success of fiscal reforms and growth sustainability. There's a distinct possibility of another upgrade before he steps down in 2016."

The peso climbed to a two-week high, extending gains to 0.6 percent to 43.125 against the dollar as of the noon break in Manila. The Philippine Stock Exchange Index climbed 0.5 percent, reversing an earlier loss.

'Most' Influential

The $250 billion Philippine economy, which was more than twice the size of Malaysia and 10 times bigger than Singapore's in 1960, was termed "the sick man of Asia" as it lagged behind its peers in following decades. Now, the World Bank forecasts growth will exceed 6 percent every year until 2015.

Expansion (PHGDPYOY) held above 7 percent for a fourth quarter in the three months through June, defying a regional slowdown as the nation remained one of Asia's best performers. The Asian Development Bank yesterday raising its growth forecast for the Philippines for this year to 7 percent and to 6.1 percent next year, even as it cut its predictions for developing Asia.

Aquino, named by Time magazine as one of the world's 100 most influential people this year, has raised tobacco and liquor taxes to narrow the budget deficit, ousted the top judge for illegally concealing his wealth, and pledged to seek more than $17 billion in infrastructure investments.

Withstand Pressure

"The Philippines' economic performance has entered a structural shift to higher growth, accompanied by low inflation," Moody's said today. "The new growth path is being reinforced in part by improved fiscal management." The move puts the Philippines on par with Turkey and Spain.

Fitch was the first to upgrade the Philippines in March, with S&P following in May. In contrast, Fitch cut Malaysia's credit outlook July 30 to negative from stable, while S&P lowered Indonesia's outlook to stable from positive in May. Moody's today lowered its outlook on Brazil to stable from positive, citing deteriorating debt and investment ratios and evidence the economy is going through a low-growth period.

Global bond yields showed investors ignored 56 percent of Moody's and 50 percent of rival S&P's rating and outlook changes last year, more often than not disagreeing when the companies said governments were becoming safer or more risky, data compiled by Bloomberg show.

Benchmark Rate

Bangko Sentral ng Pilipinas kept the benchmark interest rate at 3.5 percent for a seventh meeting in September after inflation eased to a four-year low in August. The nation will withstand pressure stemming from the impending reduction of the Federal Reserve's stimulus, with growth exceeding 7 percent this year, Governor Amando Tetangco said in an interview yesterday.

The World Economic Forum ranks the Philippines 59th in its 2013-2014 Global Competitiveness Index, up from 65 the previous year. Fujifilm Corp., a maker of cameras and medical equipment, and Sonion A/S, which makes high-end microphones and components for audio headsets and hearing aids, are among companies that began production at new factories in the Philippines this year.

Aquino plans to boost infrastructure spending to a record next year, and add jobs to reduce poverty levels that are unchanged since before he took office in 2010. The nation's unemployment rate is among the highest in the region.

With report from Bloomberg

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Palawan’s Oyster Bay into NAVAL Bay conversion prepared for Obama’s Visit; New home for 2 Hamilton warships

Oyster Bay and Ulugan Bay, Palawan, Philippines - A 100 Miles distance from the Spratly Islands which is now claimed by Mainland China as their own. 

As Obama plans Asia tour, postcard Philippines isle symbolizes U.S. pivot

Its mangrove-fringed coral reefs support an abundant fish population. Its deep, blue waters are unmuddied by the monsoons that batter the western Philippines coastline.

But a planned visit by U.S. President Barack Obama to Asia starting this weekend could herald the start of dramatic changes to Oyster Bay, a postcard-perfect cove on Palawan Island that the Philippines expects to transform into a port for its naval frigates and eventually for American warships - all overlooking the disputed South China Sea.

Developing this remote island paradise into a military facility could exacerbate tensions with China, whose sovereignty claims over the vast, mineral-rich South China Sea, one of the world's most important waterways, set it directly against U.S. allies Vietnam and the Philippines. Brunei, Taiwan and Malaysia also claim parts of the sea.

Obama is scheduled to leave on Saturday on a four-nation, week-long tour to Asia. But the uncertainty caused by a government shutdown that began on Tuesday could force him to postpone his plans. "You know, we'll see obviously what happens as the week unfolds," White House spokesman Jay Carney said on Monday.

At the moment, however, Obama is scheduled to round off his tour with a stopover in Manila, which is seen as a strong signal of U.S. support for the Philippines despite Washington's professed neutrality in the South China Sea dispute.

Rebuilding ties with the Philippines, including helping to upgrade its ill-equipped military, has been an important part of a U.S. rebalancing of its strategic focus towards Asia that is seen as a bid to check China's growing power.

President Benigno Aquino has launched a $1.8 billion modernization program and revived plans to build new air and naval bases at Subic Bay, the largest U.S. military installation in Southeast Asia before it was shuttered in 1992.

Also on the cards is the development of Oyster Bay, which lies about 550 km (340 miles) southwest of Manila.

"It will be a mini-Subic," Commodore Joseph Rostum O. Peña, commander of the Philippines' western navy, said in the first public comments about converting Oyster Bay into a major naval base.

A future port here would extend the reach of the navy's two frigates, both former U.S. Coast Guard cutters, over the disputed Spratly Islands, in the southern part of the South China Sea, he said in an interview from his office overlooking the mouth of the bay.

Long-held plans to develop the port were resurrected by President Aquino after for purchasing each $15.15 million (x 2) US Dollars, now the Philippine Navy's largest ships, in 2011 and 2012.

Oyster Bay is about 160 km (100 miles) from the Spratlys.

"In Manila, the leaders must move behind rhetorical blandishments about a new spirit of partnership and start to detail specific actions that will strengthen Philippine defense capabilities," said Patrick Cronin, an Asia-Pacific security expert at the Center for a New American Security in Washington.

That includes building a permanent home for the Philippines' two big warships. It also means finding strategic areas where the United States could rotate troops, ships and naval aircraft — all within easy reach of territory claimed by Beijing.

"Oyster Bay may be the best choice," said Cronin.

INCREASINGLY ASSERTIVE

China has grown increasingly assertive in the West Philippines Sea's 200 Nautical miles exclusive economic Zone and other ASEAN seas reaching the coast not just the Philippines but also Vietnam, Brunei, Indonesia and Malaysia, one of Asia's biggest security headaches. On Sept 3 the Philippines accused China of preparing to build a new structure on the Panatag shoal (Scarborough Shoal) in the sea in violation of the Declaration of Conduct, a non-binding confidence-building agreement on maritime conduct signed in 2002 by China and the 10-member Association of Southeast Asian Nations (ASEAN).

These maritime tensions provide an uneasy backdrop to Obama's Asian tour that includes a regional summit where he is expected to urge China and Southeast Asian nations to resolve differences over the South China Sea.

Efforts to ease the tensions by agreeing a binding Code of Conduct (CoC) between ASEAN nations and China have advanced at a painfully slow pace, with no major breakthrough expected at the East Asia Summit in Brunei that Obama will attend.

China has repeatedly warned the United States to stay out of the South China Sea dispute. Washington has not publicly taken sides, but in July Secretary of State John Kerry reiterated his country's strategic interest in freedom of navigation through the busy sea and its eagerness to see a CoC signed.

The proposed code would not touch on countries' territorial claims, but would set rules governing the behavior of ships to reduce the risk of misunderstandings that could cause conflict.

China is in "no rush" to sign the CoC, said its Foreign Minister Wang Yi in August. Talks between Chinese and ASEAN officials in Beijing in late September went nowhere. Chinese state media warned in June that a "counter-strike" against the Philippines was inevitable if it continued to provoke Beijing.

China's foot-dragging on the CoC has firmed Manila's resolve to strengthen its military, said a senior Philippine diplomat.

"Of course, we are for peaceful means to resolve dispute," he said, also requesting anonymity. "However, we want a capability that would make other states think twice before they do something foolish in the disputed areas."

In Manila, U.S. and Philippine officials are thrashing out a framework agreement which would improve the Asian nation's ability to protect its maritime borders and increase the number of American ships, planes and troops temporarily stationed there. A fourth round of talks began on Tuesday.

The two sides hope to conclude the deal by Obama's arrival, but a senior Philippine military officer familiar with the negotiations said this was looking unlikely. "There are some legal issues they have to untangle," he said, speaking on condition of anonymity.

A former U.S. colony, the Philippines is ambivalent about the presence of American military personnel, as the populist Aquino is acutely aware.

His late mother Corazon was president when the Philippine Senate voted in 1991 to terminate the Military Bases Agreement, which forced American military personnel to leave the giant Subic Bay facility the following year.

Aquino has vowed to radically boost the Philippines' ability to defend itself by the time he leaves office in 2016. This requires U.S. help, and analysts say the U.S. "pivot" toward Asia could allow him to seek it on more equal terms.

NO FISHING HERE

Oyster Bay's initial upgrade will cost an estimated ₱500 million pesos ($11.5 million) and is due to be finished by 2016, the year Aquino leaves office, said Commodore Peña.

Transforming Oyster Bay into a major naval base will cost much more, said some officials.

Current budget constraints prevent the United States from building ports, said Cronin, although some money for Oyster Bay could be sourced from a contingency budget aimed at supporting exercises and defense cooperation.

Last year, U.S. and Philippine commandos staged a mock amphibious assault near Oyster Bay as part of annual military exercises. Local people, who subsist from fishing, are resigned to further disturbances.

"We not allowed to fish in the bay anymore," said Jesus Agpao, 48, head of a local fishermen's cooperative, pointing to where four small Philippine Navy vessels were already moored. He fears bigger ships will pollute the bay and scare away their catch.

Local resident Lorenzo Layacan, 67, said four of the area's five village chiefs opposed the new naval base, fearing the bars and brothels that sprang up around Subic Bay to serve U.S. sailors on shore leave would come up in Oyster Bay as well.

"They are afraid the young women will become prostitutes," said Layacan.

With report from Reuters

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Philippine Golden Rice research for Vitamin A at IRRI: ethical and approved

Written by: Bob Zeigler (IRRI, Philippines)

As the ethical and regulatory oversight of Golden Rice-related research conducted at other institutes has recently been questioned, some might wonder about how our Golden Rice research is conducted. I'd like to tell you a little about IRRI's commitment to the highest standards of ethics and regulatory compliance in our own research and development work on this potentially life-saving crop.

To research Golden Rice thoroughly and ensure its safety, we have to do all sorts of tests—in the laboratory, in the greenhouse, and out in the field. At IRRI, all of our research that involves genetic modification is overseen by an Institutional Biosafety Committee (IBC) that is responsible for ensuring that we comply with local and international regulations and guidelines in the conduct of our experiments.

IRRI's IBC is composed of three IRRI scientists, two scientists from the University of the Philippines Los Baños, and four representatives from the local Los Baños and Bay communities around the IRRI headquarters. It works under the Philippine regulatory framework, called the Biosafety Committee of the Department of Science and Technology (DOST-BC), which oversees IRRI's IBC and, through the IBC, all research on genetically modified rice at IRRI. No GM organisms can be used in IRRI's research without prior authorization from DOST-BC.

We're lucky to be working in the Philippines because it has such a thorough, transparent, and independent regulatory system for biotechnology.

In addition, all Golden Rice field trials in the Philippines are conducted under permits issued by the Bureau of Plant Industry of the Department of Agriculture (DA-BPI), the national regulatory authority in the Philippines for crop biotechnology research and development, after they established that the trials will pose no significant risks to human health and the environment. This assessment was based on a step-wise evaluation that included contained and confined field evaluations.

Thanks to this transparent and open system of regulation, anyone can go and see for themselves details of what is approved and when, via the DA-BPI online approval registry. If you care to look closer, you can see the Golden Rice field trial approvals: Golden Rice is on page 5 and 6 under the Philippine Rice Research Institute.

The same principles apply in the other countries where we are working on Golden Rice. We follow national regulations and adhere to internationally established guidelines and procedures for the safe use of genetically modified crops, including the Codex Alimentarius (Principles and Guidelines for Food Safety Assessment of Foods derived from Modern Biotechnology), OECD Consensus Documents, and the Cartagena Biosafety Protocol.

As you may have gathered, I strongly believe that all research should be conducted with appropriate checks and measures in place to ensure that it is done in not just an ethical way, but so that it is fully approved by all appropriate regulatory bodies. I insist that all GM rice research at IRRI is conducted with required approvals on hand, following well-established protocols for the safe use of biotechnology.

I cannot speak for what happened with the Golden Rice research in China, as IRRI and our partners working with us on Golden Rice were not involved. But it is important to note that the Tufts study wasn't a safety trial, because existing research was already available that showed that beta-carotene in Golden Rice was as safe as beta-carotene in other foods. As the statement from Tufts notes, their review found no concerns related to the safety of the research subjects. From all reports, it is very clear, perhaps more importantly, that no one was harmed in any way in the China trials. To the contrary, the studies showed unequivocally that Golden Rice is an effective way to improve the Vitamin A status of deficient children. This is great news, indeed!

I was disappointed, of course, to hear from Tufts that the research itself was found not to have been conducted in full compliance with the appropriate board policy or relevant regulations.

But I don't think that these lapses should be used as a cynical excuse to stop all Golden Rice research, or indeed to be used as an inflammatory attack point to suggest that everyone involved in Golden Rice research has misguided intentions or that the research should be stopped.

Golden Rice offers a very unique opportunity to improve the nutrition of people—particularly of women and children in Asia—who are not reached by current interventions to reduce Vitamin A deficiency.

Vitamin A deficiency is a major public health concern, and it has not been overcome yet. We need more solutions and we need solutions especially targeted to helping rice consumers. My job is to make sure our research is conducted properly, with the best interests of those rice consumers at heart. I hope our work shows that Golden Rice is safe and effective and that it is judged on its potential to help people, not on who has helped develop or research it along the way, or anything else, but simply on its value to humanity.

IRRI

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