Devnews 2009 November 4

DevNews Wednesday; November 4, 2009 Peso-dollar rate: $1.00 = P47.730 Key national news coverage of the National Economic and Development Authority (NEDA) and other related news

There are 13 articles of note (3 neutral, 10 other) in the national press that can shape perceptions regarding NEDA and the economy.

neutral news RP on climate change: All plans BusinessMirror / Top News (link: http://www.businessmirror.com.ph/home/top-news/18131-rp-on-climate-change-allplans-.html) By Cai Ordinario THE Philippines may not yet be ready for climate change, as a self-assessment of national agencies, local government units (LGUs) and nongovernment organizations (NGOs) showed that implementing and mainstreaming climate-change programs are far from becoming a reality in the country. The assessment showed the climate-change adaptation capacity of the Philippines, based on the pilot study, was 2.57 out of a perfect score of 5. The score was derived as the mean of the ratings given by participants in the study. Shiela Encabo, National Economic and Development Authority (Neda) Agriculture Staff director and project coordinator of the Joint Program on Strengthening the Philippines’ Institutional Capacity to Adapt to Climate Change explained that a score of 1 meant that no climate-change-adaptation capacity has been put in place, not even a plan; while a score of 2 meant there are already plans; 3, plans are already being implemented; 4, implemented plans have been reviewed against the benchmark; and 5, plans have already been mainstreamed. “This means we have some plans but there is no implementation yet. Most of our climatechange-adaptation efforts are on the drawing board. The assessment shows that we have a lot of things to do,” Encabo said in a briefing with reporters on the sidelines of the Capacity Assessment-Validation Workshop in Pasig City on Tuesday. On the MTPDP, Encabo said that the country’s MTPDP is not yet climate-proofed and only discusses climate change under the Green Philippines portion of the updated 2004 to 2010 plan. SEE ALSO: RP not set for climate change, Inquirer / Headlines 1

Ethanol producers seek 20% increase in MFN tariff Business Mirror / Economy (link: http://www.businessmirror.com.ph/home/economy/18114-ethanol-producers-seek-20increase-in-mfn-tariff.html) By Paul Anthony Isla THE Ethanol Producers Association of the Philippines (EPAP) on Tuesday said it will seek the Tariff Commission’s nod for its petition to increase the most favored nation (MFN) tariff of ethanol to 20 percent from 1 percent. “Unless there is strong government support, investors will remain reluctant to commit billions of pesos into the Philippine ethanol industry,” Tetchie Cruz-Capellan, EPAP executive director, said. In a letter sent by EPAP to Tariff Commission Chairman Edgardo Abon, Capellan explained how the local ethanol industry has not progressed as much as predicted two years ago because it lacks equity investments and stronger political support. Capellan pointed out that the Philippines has to be aggressive in attracting foreign capital to sustain initial efforts on biofuels and reach the mandated E10 blend by 2011.

other news RP energy demand needs $104-B investment Business Mirror / Top News (link: http://www.businessmirror.com.ph/home/top-news/18133-rp-energy-demandneeds-104-b-investment.html ) By Cai Ordinario THE Philippines will need around $70 billion to $104 billion worth of investments to meet energy demand, which is expected to double to 79.6 million tons of oil equivalent (MTOE) by 2030, according to a new report released by the Asian Development Bank (ADB). In the ADB report “Energy Outlook for Asia and the Pacific,” the Manila-based multilateral financing institution said the country’s energy demand would grow by 2.4 percent every year to 2030, from 43.6 MTOE in 2005. The ADB said the key growth drivers would be the service and transport sectors. It said the economy would also remain as a net energy importer despite the government’s efforts to expand domestic energy-resource supply through increased renewable-energy technologies and alternative fuels. “The distinctive feature of the Philippines’ energy-demand structure is that the transport sector will account for 44 percent of the economy’s energy demands in 2030, and that about three-quarters of energy will be used for road transport. Without substantial energy-intensive 2

industries, energy demand by the industry sector is around 25 percent to 26 percent. This trend is forecasted to continue,” the ADB said.

Licking shortfall, BIR priority Business Mirror / Top News (link: http://www.businessmirror.com.ph/home/top-news/18134-lickingshortfall-bir-priority-.html) By VG Cabuag THE new leadership of the Bureau of Internal Revenue (BIR) vowed on Tuesday to do everything possible to narrow the agency’s collection shortfall for the rest of the year, while assuring stakeholders it will continue to pursue reforms started under Sixto Esquivias IV, who resigned on Friday. Senior Deputy Commissioner Joel Tan-Torres, named by President Arroyo as BIR officer in charge on Tuesday, said that although it will be difficult to achieve the collection targets set earlier, they will still try to close the gap by having several “high-profile” programs in the coming months as the Christmas season sets in. No figures were given, but Tan-Torres said they will focus on the temporary bazaars and retail establishments that will be set up during the season and will ask establishments to issue receipts.

Government to push higher-value offshoring services to boost local BPO sector Business Mirror / Economy (link: http://www.businessmirror.com.ph/home/economy/18116-government-to-push-highervalue-offshoring-services-to-boost-local-bpo-sector.html) By Max V. De Leon THE government will start highlighting in its investment missions the higher-value offshoring services that the Philippines is offering to help the business-process outsourcing (BPO) sector gain more businesses that are being presented by the recession. The Department of Trade and Industry (DTI) said from being a foremost offshore destination for voice-based services, the Philippine BPO sector has expanded its offerings to include higher-value services such as finance, accounting, architectural and engineering services, software development, animation, game development, and medical and legal transcription, among others. With this, the DTI will give more focus to these higher-value services in its trade shows and exhibitions, including the 10th e-Services Global Sourcing Conference and Exhibition set in February at the SMX Convention Center in Pasay City.

Manila traffic found costing economy $2 billion each year Bworld / Economy (link: http://beta.bworldonline.com/main/content.php?id=855) By BVB 3

TRAFFIC ALONG EDSA and other main roads in Metro Manila is estimated to be costing the economy at least $2 billion a year in terms of lost man-hours, according to a report posted by the World Bank on its Web site last August. The same report noted that traffic also has some costs that cannot be quantified in monetary terms, like causing the premature deaths of about 5,000 Filipinos annually. The World Bank said in its report that traffic congestion in Metro Manila is costing the country some P277 million daily or approximately $2 billion per year in terms of lost time of workers alone which averages about 41 minutes per worker. It added that, "in terms of health, air pollution in Metro Manila accounts for almost 5,000 premature deaths and costs about P962 million ($19 million) annually in hospitalization expenses and lost productive time due to illness."

Not enough domestic savings in RP to support investments Bworld /Economy (link: http://beta.bworldonline.com/main/content.php?id=847) By Daniel Anne B. Nepomuceno THE PHILIPPINES recorded a larger savings-investment gap of $873 million in 2008 -the widest in four years -- against $749 million the year before, indicating the economy’s continued reliance on borrowings to finance investments as savings remained lethargic. That made the Philippines a laggard among Southeast Asian economies in terms of mobilizing domestic resources to fund capital spending as measured by the savingsinvestment (S-I) gap. The S-I gap is computed as the difference between gross domestic savings and total investments. "The savings-investment gap of a country is important because it is the macroeconomic balance that reflects the state of the private sector in generating and using funds for economic growth," Cid L. Terosa, senior economist at the University of Asia and the Pacific, said in a recent interview.

Gov’t working to keep budget deficit in check Bworld / Headlines By GS Dela Pena MALACANANG yesterday said it would strive to keep the budget deficit in check as further deterioration might unduly alarm creditors and investors. Presidential Economic Spokesperson Gary B. Olivar said a worst-case scenario of a P300billion shortfall -- roughly 3.4% of gross domestic product (GDP) -- was manageable and compared well with Asian neighbors. Pressure to keep this year’s P250-billion deficit cap has mounted after the chief of the Bureau of Internal Revenue (BIR) quit last Friday, taking the blame for the agency’s failure to meet collection targets. 4

Banks ended credit tightening in Q3 Inquirer / Business (link: http://business.inquirer.net/money/topstories/view/20091103-233835/Banks-endedcredit-tightening-in-Q3) By Michelle Remo MANILA, Philippines--Banks ceased to tighten credit standards in the third quarter when the global economy started showing signs of recovery and eased concerns on lending. According to the latest Bank Loan Officers Survey conducted by the Bangko Sentral ng Pilipinas, lending institutions implemented a status quo in the third quarter on requirements sought from people and companies applying for loans. “Bank credit standards remained basically unchanged for enterprises and households for the third quarter compared with that in the second quarter,” according to the central bank, citing results of the survey.

RP, JBIC seen to sign pact for planned Samurai bonds Philstar / Business (link: http://www.philstar.com/Article.aspx? articleId=520074&publicationSubCategoryId=66) By Iris C. Gonzales MANILA, Philippines - The Philippines and the Japan Bank for International Cooperation (JBIC) are expected to sign a guarantee agreement for the government’s planned issuance of Samurai bonds or yen-denominated bonds. “There is now a general agreement on the guarantee cost which means that we are a step closer into executing a guarantee agreement,” National Treasurer Roberto Tan said yesterday. With this development, Tan said the government would now wait for the advise of underwriters on the right timing of the issuance.

Palace shows signs of waffling on oil freeze Malaya / Business (link: http://www.malaya.com.ph/11042009/news/news6.html) By Regina Bengco MALACAÑANG yesterday said the oil price freeze in Luzon will stay while the island is still under a state of calamity and that oil companies and businessmen should think about calamity victims more than their profits. The Palace also said the price control on oil products is temporary. "For as long as there is a state of calamity in Luzon, then the price control of oil will remain," said Lorelei Fajardo, deputy presidential spokesman. 5

However, deputy presidential spokesman Gary Olivar said President Arroyo might still lift the oil price freeze ahead of the lifting of the state of calamity in Luzon. The Joint Foreign Chambers (JFC), in a statement, called for the lifting of the oil price freeze as mandated by Executive Order 839, or at least an announcement of its termination date, citing its impact on forced losses on the petroleum, risk of future adequate supply, and disincentive to future investment.

Banking system’s H1 income up 32% Malaya / Business (link: http://www.malaya.com.ph/11042009/business/busi1.html) By Jimmy Calapati The Philippine banking system’s posted a hefty 32.6 percent growth in net income during the first half of the year despite of the global financial crisis that drove some countries into recession and some global financial institutions into bankruptcy. In a report, the Bangko Sentral ng Pilipinas (BSP) said the country’s bank turned in a combined profit of P33.3 billion during the first half, against P25.1 in the same period last year. As a result, there was a notable strengthening of major profitability ratios. The annualized earning asset yield stood at 7.9 percent, 27 basis points higher than the 7.7 percent ratio posted same period last year.

DIS Public Information Division - andrei bauzon

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