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ASEAN forum to adopt plans to make group more responsive
by DARIO AGNOTE
Kyodo News
SINGAPORE — The ASEAN Regional Forum (ARF) is set to adopt a raft of measures to get member-countries to work together in dealing with common security challenges when it gathers here for its annual meeting this week.
The fresh measures are meant to put decision-making on a fast track and foster ”concrete and practical cooperation” among the 27 members of ARF, the Asia-Pacific region’s premier multilateral security organization, according to official documents.
The innovations are hoped to make ARF more relevant and responsive to new global challenges, a discussion paper circulated by Singapore, the chair of this year’s meeting, says.
”ARF member countries should consider how to reinvigorate the ARF in the dynamic regional security environment in which it operates,” says the paper, adding that the grouping has to develop a clearer vision that will guide its future direction up to the year 2020.
A concept paper issued in 1995 envisioned ARF moving gradually through three stages: confidence-building measures, preventive diplomacy and, eventually, conflict resolution.
Deeper activities
The latest paper stresses the need to advance towards preventive diplomacy ”in a phased and prudent manner” while continuing with confidence-building measures, and for its members to engage in deeper regional cooperative activities.
”The ARF participants should consider the merits of the ARF developing institutional features like the Organization for Security and Cooperation in Europe and the Shanghai Cooperation Organization so as to make it more effective,” it says.
The ARF, whose core members include the 10 ASEAN countries and the United States, was established in 1994 after the end of the Cold War to promote dialogue and cooperation on security.
But while dialogue among member-countries has been robust and sometimes fiery, cooperation between and among its members has been variable.
Some countries with long-standing defense and security ties like the Philippines, the United States, Singapore and Japan have had no trouble working together in foiling terror plots and sharing intelligence reports. But practical cooperation is often still saddled with lingering, deep distrust.
Some ARF members have ”privately lamented” that the ARF is slow in making decisions, making it ”not responsive to fluid developments in the real world.”
”There are no clear provisions on how the ARF could quickly respond to an urgent situation or crisis,” the paper says, adding this problem has caused ”funding problems as some countries must synch this slow decision-making process to their fiscal cycles.”
The assessment paper has identified at least six ”problems” saddling the regional security grouping today that need to be confronted head-on, including its ”lack of concrete and practical cooperation,” its ‘’slow decision-making” process and lack of focus.
For instance, it notes that proposals for ARF activities are often put forward as early as October or November, but are not implemented until approved by the ARF in July or August of the subsequent year.
”The ARF requires more concrete and practical cooperation projects based on the collective needs identified in the ARF process,” says the paper, stressing the need for the ARF to focus on issues like counter-terrorism, transnational crime, disaster relief, non-proliferation and disarmament, maritime security and peacekeeping.
”Special expertise (in these areas) is necessary,” it notes.
ARF expansion
On the expansion of the ARF, the paper stresses the need ”to develop innovative ways and means to enhance its relevance to all its participants.”
It says ARF must maintain the so-called ”flexible moratorium” in dealing with countries who have outstanding applications like Kazakhstan, Kyrgyz Republic and Afghanistan.
”The expansion of ARF from 18 to 27 participants over the years has led some countries to complain that the forum has become too unwieldy, and that the dynamics have been affected with discussions becoming less informal and interactive,” the paper says.
”However, some countries suggested that we should look into the creation of observer-status for those countries interested in ARF activities, and that the ARF unit should look into this possibility,” it says.
On the increasing number of ARF meetings, the paper has voiced concern that some smaller countries are unable to attend every single meeting.
To be relevant, the paper says ARF needs to further study these measures and implement those which are ‘’suitable and appropriate” to the region.
Strengthen ASEAN and non-ASEAN
To ensure that ARF remains as the premier regional security institution, the paper stresses the need to strengthen both ASEAN and non-ASEAN participants’ role in the ARF process.
‘Although ASEAN has undertaken the obligation to be the ‘primary driving force’ of the ARF, a successful ARF required the active participation, support and cooperation of all participants. ASEAN must always be sensitive to and take into account the interests and concerns of all ARF participants,” it says.
”In this regard, some ARF countries need the support of better-endowed ARF participants, especially funding and convening meetings where possible in ASEAN countries,” it says.
The ARF comprises the 10 members of the Association of Southeast Asian Nations — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam — plus Australia, Canada, the European Union, New Zealand, the United States, Russia, Papua New Guinea, East Timor, Pakistan, North Korea, South Korea, Sri Lanka, Mongolia, Bangladesh, Japan, China, and India.
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=125901, July 22, 2008
RP stocks rise on lower oil prices
Stocks closed higher Monday as the recent pullback in oil prices provided investors “temporary” relief, but gains were capped amid persistent worries over the health of the United States economy and rising inflation.
The main index rose 27.10 points or 1.1 percent to 2,416.62.
The broader all-share index gained 14.13 points or 0.93 percent at 1,530.96.
Gainers outpaced losers, 55 to 32, with 52 stocks unchanged.
A total of 860.7 million shares worth P1.5 billion were traded.
“Last week saw a significant correction or drop in oil prices. This buoyed local and overseas markets. Although, this may be temporary as oil prices are likely to go up again,” said Joseph Roxas, president of Eagle Equities.
Light, sweet crude for August delivery fell 41 cents Friday to settle at $128.88 on the New York Mercantile Exchange, after hovering above $147 levels in the week ago. In early Asian trade, it rose 82 cents to $129.70 a barrel.
Inflation, largely pushed by skyrocketing oil and food prices, is running at 14-year highs. It hit 11.4 percent in June and is expected to peak above 12 percent this year.
On Thursday, the central bank raised its interest rates by half a percentage point, tightening policy for a second month in a row, to combat inflation.
Roxas said today’s low turnover reflects that the only few players left in the market were trading with extreme caution. “Most of them have gone out already,” he said.
Investors are keeping a wary eye over more corporate results from big US financial firms this week. Among them are Bank of America and Wachovia Corp. Also on tap are profit reports from Apple, Yahoo and Boeing.
The Dow ralled 3.6 percent on Friday, bouncing back from four weeks of heavy losses. The Federal Reserve’s move to give open credit to mortgage finance giants Fannie Mae and Freddie Mac, which were on the verge of collapse, somehow helped eased market concerns.
“It remains to be seen if the US rally would be sustained, given that more quarterly losses are expected from companies. Wall Street will also likely correct after Friday’s rally,” Roxas noted.
Index heavyweight Philippine Long Distance Telephone Co. rose P10.00 or 0.42 percent to P2,415.00.
Ayala Corp. jumped P10.00 or 3.9 percent to P267.50. Its units also ended in positive territory.
Property giant Ayala Land Inc. edged up P0.10 or 1.2 percent to P8.60 while Bank of the Philippine Islands climbed P1.00 or 2.6 percent to P39.00. Globe Telecom, the most actively traded issue, advanced P20.00 or 1.97 percent to P1,035.00.
Metropolitan Bank and Trust Co., the nation’s biggest lender, soared P1.50 or 4.9 percent to P32.00.
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=125873, July 22, 2008
I’m realizing that my attention on Philippine national development is actually a reflection of my own dream for myself: an existence and a future more prosperous than my past. Funny how the things we do ultimately teach us about ourselves and our inner desires.
Since this blog and since the correspondence with some of you that it has allowed me to enjoy, I have slowly been more and more open-minded about the direction of my professional life. The sharing we do has enabled me to see and think about what I truly want; it has allowed me to peel off layers of past expectations, past self-perceptions.
What started out to be a blog to help drum-up optimism on the Philippines that I feel is lacking out there is turning out to be a pretty effective excuse for me to think more deeply and honestly about what I want in life. This blog is helping me understand what I truly want out of life. It allows me to filter issues that distract.
But because this blog remains a space created for you, for us, I hope you have also been entertained by a few of my original posts about Clinton, Obama and Pacquiao. I promise there are more of those original posts to come. I’m still just getting comfortable with informal posting.
Fianlly, this isn’t intended to be a revelation of my next steps, just a long-winded “Thank You” to those of you who daily encourage me to keep this blog going, and as a result, allow me to think about things more clearly.
Pacquiao to keep WBC lightweight title
Filipino boxing hero Manny Pacquiao has already made up his mind to keep his newly acquired WBC lightweight belt and continue to fight at the 135 pound division.
This means that he will surrender his WBC super featherweight title which he won from Mexican rival Juan Manuel Marquez last March via split decision.
“Nagbigay na ako ng instruction sa aking abugado na ipaalam sa WBC na ang 135 pound championship belt ang idedepensa ko… so ang 130 pound championship belt na napanalunan ko noong March ang igi-give up ko,” he said.
(I have already instructed my lawyer to inform the WBC that I will defend by 135-pound [division] championship belt… so this means the 130-pound championship belt I won last March will be given up.)
Pacquiao is bent on leaving the super-featherweight division, since he is already having great difficulty making 130 lbs.
He said he feels more comfortable at 135 lbs, and in fact has dared anybody to challenge him for the crown.
World Boxing Council president Jose Sulaiman earlier has given Pacquiao until July 28 to decide on which title to keep should he face Mexican Humberto Soto.
“The present double WBC world champion at lightweight and super featherweight, Manny Pacquiao of the Philippines, must announce by July 28 which title he has decided to keep,” the WBC said.
Sulaiman said if Pacquiao decides to relinquish the lightweight title, then he should defend the super-featherweight crown against Humberto Soto in his next fight.
The Filipino boxing superstar will be flying to the US next week to meet with Top Rank promoter Bob Arum and finalize talks about his possible fight with Soto on November.
Pacquiao also assured his fans that he will also push plans to climb the welterweight division and fight England’s prized fighter Ricky Hatton. With a report from Dyan Castillejo, ABS-CBN News
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryID=125412, July 17, 2008
PCIERD Bares S&T Priorities for 2008
Friday, 30 May 2008
The Philippine Council for Industry and Energy Research and Development (PCIERD) of the Department of Science and Technology (DOST) announces the specific areas where it will focus its resources on in 2008. Some of these areas are continuing but most were identified from last year’s consultations with industry as well as from PCIERD’s planning activities. These areas respond to the Medium Term Philippine Development Plan (MTPDP) of the government particularly on economic growth and job creation and the ever consistent priority on energy.
ENERGY
The PCIERD’s role in the promotion of the use of biofuels has been emphasized in the Biofuels Law. It can be recalled that with the positive result of the pilot coco-methyl ester (CME) commercial plant in Romblon, the PCIERD pushed for the use of 1% CME blend with diesel. The PCIERD has developed the roadmap on all research and development (R&D) related activities for the development of biofuels.
The Biofuel R&D program that it has submitted to the National Biofuel Board (NBB) entails S&T infrastructure support for the Biofuel Act that will cover from biofuel technology search, assessment, validation & documentation, alternative feedstock identification & development, feedstock raw material & biofuel analysis, performance testing of biofuel from different feedstocks, techno-economic viability assessment of biofuel production plant, technology promotion and transfer.
Aside from biofuels, PCIERD will continue its activities on the development of renewable energy such as micro-hydro, solar, wind, natural gas and marine. Except for marine energy, the PCIERD has demonstrated the viability of micro-hydro in communities far from the grid, solar power for irrigation, wind turbines installed in Pagudpud and Basco, Batanes by private entities and now with the 180 buses that will ply the South Manila Corridor using natural gas.
The PCIERD is also bent on promoting energy conservation with the aim of making it a way of life of the Filipinos.
BIOTECH
Like energy, the food sector is one of the areas that PCIERD continues to develop in terms of new products and technologies that use the country’s abundant food sources and with the application of biotechnology.
The PCIERD will thus look into food biotech, functional food as well as for the health-conscious who clamor for natural and wellness products.
ENVIRONMENT
The past two years saw very erratic weather conditions in the country and worldwide. The El Niño and La Niña phenomena and the increased number of super typhoons literally wrought havoc to the economic activities of the country. With the pressing issues and concerns on climate change, the DOST, through PCIERD will continue to address all these concerns relating to the environment as well as educate the public on these occurrences including disaster management. One of the critical areas affected by variable weather conditions is water. Either there is over supply that they have to release water from the dams or the dams almost get dried up. This in turn affects our power supply. The PCIERD shall look into the development of a sustainable water management program.
SPECIAL PROGRAMS
While the PCIERD has set to put its resources and generate more funds to implement the above plans on food biotech, energy and environment, it shall also see to it that the programs it has nurtured through the years will be sustained. Considered as its special programs are the upgrading of testing laboratories, packaging, food safety, the virgin coconut oil (VCO) program as well as the high impact programs identified like coco coir and tropical wines and carbonated beverages.
Other Priority Areas (OPA)
In order that all its sectoral areas are covered, the PCIERD will not veer away from giving technical support to medium scale and micro-enterprises (MSMEs), give color to natural dyes, make ethnic foods become popular, develop indigenous materials and come up with more indigenous housing designs and materials.
All these plans and programs cannot be funded using a portion of the DOST budget allocation alone. Thus, with its linkages and the twinnings that it has established and will continue to firm up, the PCIERD shall look into collaborative undertakings with the private sector, the international science community as well as with academe and other g overnment agencies in order to come up with at least P250 million to implement the above activities.
Source: Philippine Council for Industry and Energy Research and Development (PCIERD) of the Department of Science and Technology (DOST), http://pcierd.dost.gov.ph/index.php?option=com_content&task=view&id=25&Itemid=27
Global group invests in RP geothermal plant
Reuters
A group of American, Australian, Spanish and Filipino investors have committed to invest $300 million to develop a 40 megawatt geothermal power plant in a southern Philippine province, a representative of the group said.
The group, called Guidance Management Corp (GMC), will initially spend $8 million to conduct geological surveys before drilling exploratory wells at the Amacan geothermal prospect in Compostela Valley province in the southern Mindanao region, Joaquin Rodriguez, GMC’s chairman, told reporters on Thursday.
“We will spend roughly around $300 million to develop the initial 40 MW capacity of the area, but we’re hoping that it could be more than 40 MW,” Rodriguez said.
The Energy department has awarded GMC a 50-year contract to explore geothermal projects in an area totaling nearly 47,500 hectares in Compostela Valley.
The Philippines, the world’s second-largest producer of geothermal energy after the United States, has 22 active volcanoes and sits on the seismically active Ring of Fire.
The country has an installed geothermal capacity of slightly more than 1,900 MW, but the government estimates the Philippines has untapped geothermal resource of at least 2,600 MW.
The Philippines wants to raise its geothermal capacity to 3,131 MW by 2013.
Geothermal power currently accounts for around 18 percent of the energy needs in the Philippines.
Energy Secretary Angelo Reyes said studies from the U.S. National Renewable Energy Laboratory have shown the Philippines’ geothermal resources has a capacity to generate 200,000 MW of power.
GMC also operates two coal mining projects in the central province of Negros, holds a geothermal service contract in the northern Kalinga province, and a $150 million biofuels project.
Another company that received a service contract from the government on Thursday was Basic Energy Corp, which will explore geothermal prospects in Mabini, Batangas province south of the capital.
The Mabini project, covering 3,841 hectares, has an energy resource that could possibly fuel a 20 to 40 MW power plant.
A third company, Biliran Geothermal Inc, has plans to spend $15 million to develop a geothermal project covering 22,394 hectares in the central Visayas region. The area is estimated to have at least 100 MW of geothermal energy.
Growing concern about greenhouse gas emissions released by conventional power plants, high oil prices and growing power demand have fuelled the popularity of geothermal power.
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=124782, July 10, 2008
…if you have an article related to Philippine development; Filipino, Filipino American, or Filipino Diaspora issues; politics her and abroad affecting Filipinos; Filipino boxers; Filipino martial arts, and Filipino humor that you would like to share using my blog, please feel free to post, or email to me at rbvergara@gmail.com.
Salamat.
Philippines 4th in world’s franchising sector
BY Ben Arnold O. de Vera Researcher
The Philippine franchising sector accounts for a significant part of the country’s gross domestic product, and is a key driver of the country’s economic growth, the Philippine Franchise Association (PFA) said.
Local franchising business has accounted for 5 percent of the GDP for the years 2005 to 2007, putting in an estimated P106.75 billion to Philippine economy, according to a collaborative study carried out by PFA and the University of Asia and the Pacific.
The study also revealed that some 200,000 franchise stores all over the country employs, on the average, four to five employees per outlet, thus providing jobs to about one million Filipinos.
PFA also noted that franchising activity has not only been prominent in the metropolitan areas, but also in the countryside. “There are many well-known national brands that originate in the regional areas,” said Bing Limjoco, PFA chairman, citing Julie’s Bakeshop, which started operations in Cebu and currently the largest bakery chain in the country.
The PFA study also showed that many of the prominent local franchises began as small and medium enterprises until they grew into large-scale corporations, among which are fast-food giant Jollibee, which started out as an ice cream parlor, and Max’s Restaurant, which was initially a family business.
Moreover, some 30 Filipino franchise companies are expanding overseas, especially in the Asean region, US, Canada, the Middle East, China, India and UK, said Robert Trota, PFA president. Trota said that local-based franchisers such as Red Ribbon Goldilocks, Bench and Kamiseta, among many others, are already competing globally, adding that Filipino food, clothing and services franchises are on a par with international brands.
According to PFA, the Philippines is now the fourth in the world and the leader in the Asean region in terms of the number of franchise concepts and franchise outlets.
Source: The Manila Times Online, http://www.manilatimes.net/national/2008/july/10/yehey/business/20080710bus2.html, July 10, 2008
Fitch: RP bank system improved but challenges ahead
SINGAPORE – Fitch Ratings on Tuesday commented that while operating fundamentals of the Philippine banking system have improved over the past four to five years thanks to the progress in resolution of NPLs, improved capitalisation and enhanced regulation, it nevertheless continues to be weak owing to a volatile operating environment and the lack of a sustainable earning assets profile.
The agency noted that despite the recent improvements, the Philippine economy remains weak due to limited fiscal flexibility, high inflation and persistent political uncertainty.
In a special report on the Philippine banking system to be published soon, Fitch noted that a salient feature of the Philippine banking system has been the historically weak demand for bank credit (comprising 33% of GDP in 2007).
This could be attributed to the dominance of the services sector and to a lesser extent the agrarian sector, which require relatively less investment outlay as well as limited activity in the consumer banking space.
Even though banks have recorded higher lending growth over the last two years, the agency believes this momentum may not be sustainable due to the more challenging operating environment in the future. As such, a rather high 25% of the banking system assets are allocated as investments, mostly in government debt securities, which has resulted in the banking system depending on trading income.
However, the agency observes that such dependence in the present rising interest rate environment could erode the banks’ earnings through lower trading gains and possibly even actual or mark to market losses.
Since the implementation of the Special Purpose Vehicle (SPV) Act in 2002, the system’s gross non-performing assets (NPA)/total assets ratio improved to 5.9% at end-2007 from 13.2% at end-2002. The SPV Act, which expired in May 2008, facilitated the reduction in NPLs, but had a lesser impact on reducing foreclosed properties.
Due to the current less benign economic environment, the resolution of foreclosed properties is likely to remain slow and loan quality may even start to somewhat deteriorate although NPLs were well reserved at 80% at end-2007.
The capitalisation levels in the system provide moderate support for the Philippine banks to weather the higher operating-environment related risk. The various types of capital instruments, which were raised since 2006 have helped to preserve the capital adequacy ratios against the negative impact of Basel II accord, which was adopted in July 2007.
The Philippine banks have presently adopted the standardised approach for credit risk and the basic indicator approach for operational risk.
While the Philippine banking system consists of 847 banks, including more than 700 rural & cooperative banks, the core of the banking system is formed by 38 universal and commercial banks that account for 87% of the system assets, with the top three banks accounting for nearly 33% of the system assets.
Following the consolidation among some of the larger banks over the past few years, ownership concentration has increased with some large private banks being majority-owned by Filipino business families with other significant business interests.
While such ownership concentration could lead to conflicts of interest and is potentially a concern, Fitch notes that standards of corporate governance in the Philippines have somewhat improved over the years, albeit at a gradual pace.
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=124561, July 10, 2008
NEDA chief: RP can still meet 2008 growth target
By CHARO LOGARTA and MICHELLE OROSA
The National Economic Development Authority (NEDA) remains confident that the country’s growth projections will be met this year, despite a global economic slowdown and high commodity prices.
The government initially expected economic growth, as measured by gross domestic product, to come in between 5.7-6.5% this year. To attain this, NEDA Director General Augusto Santos said, the government was prepared to forego its plan to balance the budget this year, to prop up spending to the tune of P75 billion on projects such as infrastructure and social services.
But because of the unabated rise in commodity prices, Santos said the government may have to revisit its goals for the year in September, and revise targets to factor in effects of the global downturn.
Finance Secretary Margarito Teves earlier announced that the government was revising its growth projections for the year, widening its target to 5.7-6.6%, as it expects the global downturn to hit the economy hard in the second half before tapering off next year.
Santos added that the government is also looking at revising inflation targets from 3-5% to 7-9% for 2008, factoring in the transport fare hike to be implemented on Friday this week.
He explained that transport costs constitute second-round effects to inflation, such that every 1% increase in transport fares translates to a 0.017% increase in inflation. The current P7.50 to P10.00 fare hike for jeepneys, for example, already constitutes a 10% increase.
“But we are hoping that inflation will taper off towards the latter part of the year, as oil price movement is expected to slow towards the fourth quarter,” said Santos.
Santos said that the government has so far never missed its targets, and at the very least, has always been able to hit the lower end of its target range.
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=124637, July 10, 2008
RP is ‘hottest real estate market in Southeast Asia’ — consultant
By LALA RIMANDO
abs-cbnNEWS.com/Newsbreak
Tourism, offshoring and onshoring are driving the property market in the Philippines to the top of real estate investors’ list, an executive of a global property consulting and research firm said.
Trent Frankum, general manager of the Philippine office of CB Richard Ellis Group (CBRE), a Los Angeles-headquartered real estate adviser to investors and occupiers, spoke about the topic, “The Philippines – the hottest market in Southeast Asia,” during the Investment and International Property Expo in Hong Kong last June.
In the audience were property experts and investors from featured property experts and investors from global companies headquartered in
Asia, Australia, and the UK.
“Investment opportunities in tourism, infrastructure, mining, and real estate remain high in the Philippines,” said Frankum.
“Foreign investors are looking at the positive effects of the stable Philippine peso, increasing tourist arrivals, the BPO boom, and the positive effect of overseas Filipino worker (OFW) dollar remittances into the country.”
New hotels
In 2007, tourists arriving in the Philippines reached a little over three million, a far cry from the years when tourist arrivals hovered at two million. New markets such as those from Russia, Middle Eas, China, and Korea are expected to help in sustaining tourism growth.
Projected tourism arrivals in 2008 is at 3.4 million, which will generate revenues of about US$5.8 billion.
Property companies have taken advantage of this boom as “New hotel and resort developments are currently in strategic business locations such
as Makati City, Fort Bonifacio, and the Bay Area as well as top tourist destinations such as Cebu and Boracay, further enhancing industry prospects,” Frankum said.
According to Frankum, hotel room occupancy rates rose to 73.06 percent in 2007 from 71.95 percent in 2006.
New development projects include the US$153 million Kingdom Hotel, a combined hotel and residential condominium that will rise in Makati
City.
Meanwhile, the offshoring and outsourcing boom continued to create opportunities in the residential and office markets.
Almost 800,000 sqm for BPO offices
Multinational companies that operate business process outsourcing businesses in the Philippines are pushing their expansion projects. Frankum cited Accenture, a US-based IT company, which leased additional 1.3 million square feet.
Other major offshoring and outsourcing service providers continue to develop sites in Metro Manila and Metro Cebu.
According to CBRE research, a total of 731,871 square meters of property in Metro Manila has been earmarked for new offshoring and outsourcing facilities this year, with 189,614 square meters already pre-committed before commencing construction.
“Offshoring and outsourcing will continue to drive demand for real estate, particularly in the office space market,” Frankum said.
In addition, major financial companies such as HSBC, Citigroup and JPMorgan have been expanding Philippine sites of their respective customer support operations. HSBC currently has four locations, which totals to 859,200 square feet, and plans to open more sites. Citigroup and JPMorgan, on the other hand, have 214,812 and 107,400 square feet of space leased, respectively.
Complementing the office construction frenzy is the residential market.
In Makati alone, there are upcoming 18,143 residential condominium units coming in between 2008 and 2013. In nearby Fort Bonifacio, there are 33 residential condominium units being constructed between 2008 and 2012. That translates to additional 11,652 units.
High construction cost
CBRE’s optimism, however, will be put to test as prices of construction materials, especially steel, have almost doubled. Financing costs of property buyers or lessors are also expected to hike as the central bank is poised to increase interest rates to ease inflation worries.
Property companies, such as Ayala Land, Megaworld and Vista Land, have already increased their prices from five to 20 percent.
Source: ABS-CBN News Online http://www.abs-cbnnews.com/storypage.aspx?StoryId=124462
BSP vows to act on double-digit inflation
Agence France-Presse
MANILA – The governor of the Philippine central bank Amando Tetangco said Wednesday it was ready to take “necessary action” with inflation widely expected to have hit double-digits last month.
Ahead of the release Friday of June inflation data, he said “inflation will reach double-digits beginning in June” and peak within the next three months.
He said it would then settle to an average of 7.0-9.0 percent, which is above the government’s target.
The bank last month hiked key interest rates by 25 basis points — to 5.25 percent for the overnight borrowing rate and to 7.25 percent for the overnight lending rate — after inflation hit a nine-year high of 9.6 percent in May.
Tetangco also said “the Monetary Board believes that there are already indications that supply-driven pressures are beginning to feed into demand.”
The central bank “remains committed to pursuing the necessary monetary action to address the risks to inflation and inflation expectations and ensure the achievement of the central bank’s price stability objective,” he added.
The central bank expects 2009 inflation to ease to 4.0-6.0 percent.
“In the absence of persistent sharp surges in oil prices, base effects should produce lower inflation rates next year and beyond,” Tetangco said.
“Meanwhile, favourable projections for global and domestic agricultural output should help to stabilise food prices.
“The slowdown in global economic activity is also expected to contribute to moderating demand for oil and food products, which should enable an easing in imported commodity prices.”
Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=123816
Russia’s New President Sees Larger Economic Role
Published: July 3, 2008
MOSCOW — Russia’s new president, Dmitri A. Medvedev, less swaggering than his predecessor but as touchy about criticism from abroad, said in an interview that an America in “essentially a depression” was in no position to lecture other countries on how to conduct their affairs.
As soaring oil revenues bolster the Russian economy and Kremlin confidence, Mr. Medvedev brushed aside American criticism of his country’s record on democracy and human rights. He also declared that a revived Russia had a right to assume a larger role in a world economic system that he suggested should no longer be dominated by the United States.
Mr. Medvedev made his comments in a meeting this week with a small group of foreign journalists a day after the American treasury secretary, Henry M. Paulson Jr., appealed in Moscow for Russian investment in the United States. The symbolism of the visit resonated here, in that only a decade had passed since the Russian economy was in shambles and the country was desperate for Western aid.
Mr. Medvedev seemed to be seeking in the interview to raise his profile before attending the Group of Eight meeting of industrialized nations next week in Japan. Mr. Medvedev heads Russia in tandem with his predecessor and mentor, Vladimir V. Putin, who is now prime minister and is still widely considered Russia’s preeminent leader.
In the interview, Mr. Medvedev was asked about a call by Senator John McCain, the presumptive Republican presidential nominee, to bar Russia from the Group of Eight because of its record on democracy. Mr. Medvedev, who easily won the presidential election in March after the Kremlin dismantled the opposition, responded that the question of democracy was irrelevant to the Group of Eight and, besides, the United States had more pressing matters to attend to.
“The Group of Eight exists not because someone likes or dislikes it, but because objectively, they are the biggest world economies and the most serious players from the foreign policy point of view,” Mr. Medvedev said. “Any attempts to put restrictions on anyone in this capacity will damage the entire world order.”
He added: “I am sure that any administration of the United States of America, if it wishes to succeed, among other things, in overcoming essentially a depression that exists in the American economic market, must conduct a pragmatic policy inside the country and abroad.”
Mr. Medvedev said world leaders should realize that the credit crunch and gathering global recession signaled that the worldwide economic architecture needed to be overhauled. He did not specify how this should be done, but indicated it should entail a reduction in the influence of the United States.
“It has to be improved, it has to be more up-to-date, better protected from risks, and it must not suffer from national egoism[cq], financial and economic egoism[cq], but must be more fair towards other countries — this is absolutely evident,” he said. “This system cannot be oriented towards only one country and only one currency.”
A former law professor who has spent much of his career as a behind-the-scenes bureaucrat, Mr. Medvedev demonstrated a wide-ranging knowledge of foreign and domestic issues, confidently answering questions for 90 minutes without notes and speaking in long paragraphs without stumbling. The president, who is 42, spoke only in Russian but did not need an interpreter to understand questions posed in English.
Mr. Medvedev provided no glimpses of disagreements on policies or strategy with Mr. Putin, though their stylistic differences were readily apparent. Whereas Mr. Putin occasionally responds to questions with blunt retorts or salty language, Mr. Medvedev tends to offer demurrals and then to engage in a kind of academic discussion of issues.
As he has many times in recent weeks, Mr. Medvedev championed his proposals to reduce corruption, which he acknowledges is endemic in Russia. He was then asked whether he believed that corruption could be beaten back considering that the country’s political system is dominated by a single party, Mr. Putin’s, United Russia.
“A system that was built on the idea that one party holds all the truths demonstrated its weakness 20 years ago,” Mr. Medvedev said. “It failed to cope with new challenges and ceased to exist. That’s why to ensure the competitive ability of our country on a global scale, we must make use of political competition, among other things. But it must be sensible. This is to say, competition, correctly built.”
Mr. Medvedev indicated the he would not involve himself in the case of Mikhail B. Khodorkovsky, the former oil oligarch and Putin opponent convicted of financial crimes and sent to a Siberian prison. The authorities have recently brought new charges against Mr. Khodorkovsky, while his lawyers have mounted a campaign for his release.
Some political analysts have described Mr. Medvedev as more liberal than Mr. Putin and others in the Kremlin, in part because Mr. Medvedev did not serve in the security services. (Mr. Putin is a former K.G.B. agent who was head of its successor agency, the F.S.B.)
Mr. Medvedev often says his background as a lawyer plays a crucial role in his world view, and when he was asked about his reputation, he returned to that theme. He said that when he was a student, he learned of the importance of the law, and of the right to private property. He said he also realized that there needed to be a struggle in Russia against what he has termed “legal nihilism.”
“For me, these are the ideas that I absorbed when I studied at university, as well as the value of human rights,” he said. “And in our country, they are based on the Constitution. Human rights and freedoms also must be defended unconditionally, and should be the priority of any government. It’s up to you as to how this set of values should be described.”
Asked about his political enemies, Mr. Medvedev conceded that some prominent people were disgruntled over his ascent, though he would not name them.
“I am positive that a certain number of politicians and a certain part of the population is not quite happy with the current configuration of power,” he said. “But this is what is called democracy.”
He added: “It would be ridiculous to name the destructive forces one by one. I am not an adherent of conspiracy theories. In real life, everything is so much simpler, if not banal.”
Source: The NY Times, http://www.nytimes.com/2008/07/03/world/europe/03medvedev.html?_r=1&hp&oref=slogin
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