Devnews 2009 November 24

DevNews Wednesday; November 24, 2009 Peso-dollar rate: $1.00 = P46.060 Key national news coverage of the National Economic and Development Authority (NEDA) and other related news

There are 14 articles of note (14 other) in the national press that can shape perceptions regarding NEDA and the economy.

other news Lawmaker says SICPA is like controversial NBN Philstar / Business (link: http://www.philstar.com/Article.aspx? articleId=526439&publicationSubCategoryId=66) By Jess Diaz MANILA, Philippines - The House committee on ways and means has asked the Bureau of Internal Revenue (BIR) to temporarily put on hold the Swiss challenge bidding for the P18 billion revenue stamps labeling for cigarettes proposed by the Lausanne-based SICPA Product Security Inc. Deputy Speaker Eric Singson (Lakas-Kampi, Ilocos Sur) said committee members want the BIR to exercise caution in pursuing the project which he likened to the scandal-ridden $328 billion National Broadband Network project. Singson said congressmen have noted many loopholes in the Swiss firm’s proposal for the BIR to adopt its stamp security system of monitoring cigarette sales and ensuring that excise tax on the product is properly levied.

Farm, infrastructure projects get P23 billion from Japan aid agency Business World/ Economy (link: http://www.bworld.com.ph/main/content.php?id=2091) By DGKC and GSDP THE JAPAN International Cooperation Agency (JICA) will sign today the loan agreements for official development assistance (ODA) totaling ¥44.988 billion to the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP), which will use the funds to finance agriculture and infrastructure projects. In a press release yesterday, the international aid agency of the Japanese government said the ODA loans are broken down into ¥14.608 billion and ¥30.38 billion yen -- equivalent to a total of P23 billion -- to Landbank and DBP, respectively. 1

JICA said DBP can use the loan -- for the Logistics Infrastructure Development Project -- to finance infrastructure like roll on-roll off terminals and vessels; toll roads; maintenance equipment; as well as cold chain, packaging, transport and distribution facilities. The Landbank loan, called the Agricultural Credit Support Project, will be used to provide financing to small farmers and fishermen, as well as to small- and medium-scale enterprises. SEE ALSO: RP to get P23-billion yen loan from JICA, Philstar / Business (link: http://www.philstar.com/Article.aspx?articleId=526433&publicationSubCategoryId=66) Japan extends half-a-billion dollar assistance to Philippines, Manila Times / Business (link: http://www.manilatimes.net/index.php/business/6627-japan-extends-half-a-billiondollar-assistance-to-philippines) JICA OKs P23.85B ODA loans, Malaya / Business (link: http://www.malaya.com.ph/11252009/busi7.html) Jica, 2 state banks to sign P23B ODA agreements, Inquirer / Business (link: http://business.inquirer.net/money/topstories/view/20091124-238140/Jica-2-statebanks-to-sign-P23B-ODA-agreements)

Remittances, spending in polls expected to drive 2010 growth BusinessWorld / Economy (link: http://www.bworld.com.ph/main/content.php?id=2089) By L. D. Desiderio ROBUST REMITTANCES from Filipinos overseas and the impact of spending for national elections will drive growth to accelerate in 2010, HSBC said yesterday. In a briefing yesterday, HSBC Philippines Treasurer and Head of Global Markets Jose Arnulfo "Wick" A. Veloso told reporters that Philippine gross domestic product (GDP) is expected to expand by 4.2% next year, compared to the government’s own projection of 2.6%-3.6%. For this year, the government sees GDP growth falling within the 0.8%-1.8% range.

P2.5-B infra funds front-loaded Business World / Top News (link: http://www.businessmirror.com.ph/home/top-news/18936-p25-binfra-funds-front-loaded.html) By Mia Gonzalez THE government may front-load as much as P2.5 billion to ensure the “timely” completion of several priority infrastructure projects, Malacañang said on Tuesday. 2

Presidential Management Staff (PMS) head Hermogenes Esperon Jr. said in a news briefing that he had proposed the front-loading of funds during the Cabinet meeting, which he will further discuss with Budget Secretary  Rolando Andaya Jr. so that the amount “will just be enough for the works that are involved up to end of the year.” Esperon said the P2.5 billion may be sourced from the calamity fund. The projects are the Camanava Flood Control and Drainage Improvement Project, Cansaga Bay Bridge of the Cebu North Coastal Road Project, Cebu Provincial Road linking to the Cansaga Bay Bridge, and the Dinagat-Loreto section of the Dinagat Island Road Network Project.

Gov’t quizzed on exit strategy Business World / Headlines By ADBR A VISITING International Monetary Fund (IMF) team has asked the government about its "exit strategy" and plans to cut the budget deficit, to which officials said they replied by giving assurances that stimulus spending would be cut once the economy picks up. The matter, Finance Undersecretary Gil S. Beltran told BusinessWorld yesterday, was raised in a meeting last week that was part of an annual Article IV consultation the Washingtonbased lender conducts with its member economies. "They (IMF team) just wanted to know our exit strategy, how to consolidate public sector finances when recovery starts ... They asked us how are we going to reduce the deficit," Mr. Beltran said.

BOC expects to miss 2009 target by P36 billion Philstar / Business (link: http://www.philstar.com/Article.aspx? articleId=526430&publicationSubCategoryId=66) By Iris C. Gonzales MANILA, Philippines - The Bureau of Customs (BOC) expects to collect only P237 billion this year due to weak imports brought about by the lingering impact of the global financial turmoil. Customs Commissioner Napoleon Morales said the agency is likely to miss its revised collection target of P273.5 billion by “more or less, P36 billion.” “It’s because of the different factors,” he said, noting the impact of the recession, low import volume and typhoons Ondoy and Pepeng that recently hit the country which Morales said, dampened economic activities. RP tenders boost Thai rice prices Malaya / Business (link: http://www.malaya.com.ph/11252009/busi9.html) By Reuters 3

BANGKOK - Thai rice prices, which have jumped almost 9 percent since Manila launched its first import tender in October, are likely to extend gains on strong demand for the staple, traders and exporters said on Tuesday. Although Thai exporters are likely to win only a small portion of 1.8 million tons sought by the Philippines, huge demand from Manila and a poor crop in drought-hit India are expected to push benchmark Thai prices higher. Thai exporters are likely to be awarded only 15 percent, or some 300,000 tons, of the total Manila wants to buy through three tenders in December, said Chookiat Ophaswongse, president of the Thai Rice Exporters Association.

New crisis looms with prolonged low interest rates Inquirer / Business (link: http://business.inquirer.net/money/topstories/view/20091124-238136/New-crisislooms-with-prolonged-low-interest-rates) By Daxim Lucas SHANGHAI, CHINA— Central Banks around the Asia-Pacific region—taking their cue from the US Federal Reserve—may be laying the groundwork for the next financial crisis by relying too much and too long on low interest rates to help their economies recover from the global financial crisis. To head off this possibility, monetary authorities in developed countries should start implementing so-called “exit strategies” that would prevent the creation of asset price bubbles due to excessively cheap funds, according to participants in the two-day Common Agenda Round Table (CART) here. The forum brought together senior journalists and academics from the Asia-Pacific and the United States to tackle political, economic and social issues affecting the Asean region, along with economic powerhouses China and Japan. During one discussion on the global crisis and its implications for Asia, forum participants pointed out that loose monetary policies around the world, but especially in the US, were encouraging investors to borrow funds at low interest rates. These investors then invest the funds into higher yielding investments in emerging markets like the Philippines, fueling sharp increases in asset prices, including those of shares listed on stock markets.

Debt service tops P574 B in 10 months Manila Bulletin / Business (link: http://www.mb.com.ph/articles/231027/debt-service-tops-p574-b-10-months) By Lee Chipongian The government paid debt service of P574.72 billion as of end-October, according to data from Bureau of the Treasury (BTr). 4

The total was P25 billion or 4.5 percent more than what was paid in September. The government’s program for debt service this year is P702 billion, of which P211.94 billion are payments on foreign loans and P490 billion for domestic loans. In 2008, the government paid debt serving of P612.7 billion. For the month of October, debt service amounted to P25.7 billion, lower compared to the previous month’s P61.27 billion. The total interests paid in the first 10 months was P249.41 billion, higher than endSeptember’s P235.283 billion while principal dues were also higher at P325.31 billion from P313.73 billion.

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