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                                                     Philippine Peso Exchange Rates
                                                     United States Dollar  44.464
                                                     Japan Yen              0.416
                                                     United Kingdom Pound 88.412
                                                     European Monetary     70.084
                                                     Union Euro

23-27 June


IMF trims RP growth forecast
The International Monetary Fund (IMF) has scaled down its growth projection yet
again from 5.8 percent to 5.2 percent this year. The IMF mission said that the
Philippines, together with its peers in the region, faced the twin challenges of a
slowing global economy and escalating food and fuel prices.

S&P affirms ‘stable’ outlook for RP
Global ratings agency Standard & Poor’s (S&P) reaffirmed yesterday its “stable”
outlook rating on the Philippines. S&P warned, however, that although its “stable”
outlook rating is still in place, stalling fiscal corrections could lower its outlook rating
to “negative”, especially if revenue erosion becomes a problem because of regressive
tax legislation.

Inflation seen to peak at 11% in Q3
The nationwide inflation rate is expected to hit double-digit level and may possibly
peak at 11 percent in August or September this year before going back within the
four to six percent projection for 2009. The factors behind the rise in inflation rate
would primarily be due to high oil prices.

Peso falls to lowest level in 9 months
The peso slumped to a new intra-day low of P44.73, the lowest in nearly nine
months, as inflation and interest rates concerns mount due to the cost-push effect of
market developments plus the recent typhoon that hit the country, devastating the
farm and agricultural lands worth P555 million.

RP most vulnerable in Asia next to Vietnam, says HSBC
The Philippines is the most vulnerable economy in Asia after Vietnam as rising prices
and a global slowdown threaten the country’s ability to pay for its ballooning trade
deficit, an HSBC economist said.

Philip Poole, HSBC’s chief economist for emerging markets, said the Bangko Sentral
ng Pilipinas was behind the curve in taming inflation — now at a nine-year high —
and that the threat to the economy was exacerbated by waning competitiveness of

Trade deficit hits $531 million in April
The country recorded a trade deficit of $531 million in April, with the import bill
rising 11.8 percent from a year earlier amid increasing crude oil prices.

For the first four months of the year, the trade deficit stood at $2.6 billion compared
to a deficit of $179 million in the same period last year.

Imports of mineral fuels, lubricants and related materials, with a 21.4 percent share
of the bill, rose 13.7 percent to $1.037 billion. Food imports also jumped sharply,
with cereals and cereal preparations registering a 222.9 percent increase to $239.95
million or 4.9 percent of the bill.

Central bank downscales investment expectations
The Bangko Sentral ng Pilipinas (BSP) has downscaled its projections for foreign
direct and portfolio investments to the country, citing the slowing global economy
and fragile market sentiment brought about by the strains in the global financial

In its midyear review of economic assumptions, the Monetary Board said foreign
direct investments (FDIs) may cap the year with net inflow of $2.6 billion, down from
its earlier projection of $4.2 billion. Investments will come mainly from mining,
manufacturing and beverage industries.



RP can become global shrimp player
The Philippines has gained a potential to become a global player in the shrimp
industry with its adoption of the white shrimp vannamei technology that’s enabling
faster national production growth.

It is estimated that the country’s production of vannamei shrimp will grow five times
from 20,520 metric tons (MT) in 2007 to 102,600 MT in 2011.

Hog raisers seek zero tariff on feed inputs
Hog raisers are seeking government assistance in the form of zero tariff on feed
ingredients and farm equipment and establishment of a diagnostic laboratory to help
them recover from the adverse impact of the diseases that ravaged their farms last

Feeds account for 65-70 percent of the industry’s cost, which has gone up to P80 a
kilo from P69 early this year. Last year, about 30 percent of the country’s backyard
swine farms were wiped out and more than 20 percent of commercial farms were
adversely affected by swine diseases, including a strain of the porcine reproduction
and respiratory syndrome.

Foreign exchange rules eased further
The central bank has given foreign investors easier access to foreign exchange to
allow them to lock in gains from trading of stocks and bonds.

Heeding a request from the Philippine Stock Exchange, the BSP’s policymaking
Monetary Board issued Circular 611, allowing custodian banks to sell foreign
currencies to foreign investors wishing to repatriate proceeds from shares
“borrowed” from the local bourse.

Central bank sees ’08 OFW remittances at $16.45B
The central bank, Bangko Sentral ng Pilipinas (BSP), expects cash remittances from
overseas Filipinos to hit a new record of about $16.45 billion this year, up 10 percent
from 2007 despite concerns that the slowdown in the world economy may squeeze
the inflows to a trickle.

Most of the remittances come from the United States, Saudi Arabia, the United
Kingdom, Italy, the United Arab Emirates, Canada, Japan, Singapore and Hong Kong.


Gov’t harmonizes various halal programs
Last February, the country has promulgated the Philippine National Standard for
Halal food, which will eventually lead to the alignment of the Halal food industry to
export standards.

Spearheading a Philippine Halal trade convention are the Department of Trade and
Industry, Department of Tourism, Department of Science and Technology,
Department of Agriculture, Department of Health, DTI-Autonomous Region in Muslim
Mindanao, and the Office of Muslim Affairs.

Bullish RFM revitalises business lines
RFM Corporation is aiming to revitalise its businesses and is aggressively aiming to
double its sales and net income in five years. Revenue target is P14 billion by 2012.
To achieve this, RFM is allotting capital expenditures of P800 million this year. So far,
they have spent P380 million for pasta manufacturing lines, P100 million for its meat
processing plant in Cabuyao, P50 million for its PET bottling lines, and P20 million for
flour milling.

This year, RFM is expanding its manufacturing facilities, specifically in PET bottle
blowing and filling lines for the newly launched iced tea, juice and vitamin water


SBMA to offer free rent to Taiwanese firms engaged in high-tech ventures
The Subic Bay Metropolitan Authority (SBMA) will offer free rent to Taiwanese
companies engaged in high technology ventures to encourage more investments in
the area.
SBMA have been pushing to attract companies in information and communication
technology (ICT), software design, biotechnology and the like. The rent-free
incentive was agreed upon during the joint economic conference between Taiwan
and the Philippines.

The new rent-free incentive will help the SBMA realize its long-term “Cyber-Subic”
program, which focuses on developing ICT facilities in Subic and roping in investors
in the so-called knowledge industries. The rent-free incentive, which will apply in
Subic and Clark free ports, will be good for three to five years and will cover firms
that will each commit a minimum investment of $25 million.

Multiply aims growth in RP, signs partnership deal
Global social networking web site is aiming to further grow its Filipino
subscriber base, following the signing of an exclusive marketing deal with ABS-CBN
Interactive, the multimedia arm of Lopez-owned ABS-CBN broadcasting group.

Founder and president Peter Pezaris who visited Manila for the formal announcement
of the tie-up, said counts some 2.2 million Filipinos, which he said, is a
viable advertising audience.

Accenture teams up with MIT on employee training program
Technology outsourcing company Accenture has teamed up with the Massachusetts
Institute of Technology (MIT) to provide professional training programs to the
thousands of Accenture employees around the globe. There are currently about
2,000 Filipinos enrolled in the program.

Gov’t to spend P7M to digitise patent database
The government, through the Intellectual Property Office of the Philippines, has
announced that it is allocating P7.28 million to digitise the database for patents and
trademarks documents registered with the agency from 1931 to 2007.

In a statement, IP Philippines said the digitisation project will be partly financed by
the World Intellectual Property Organisation (WIPO) as part of the IP Philippines-
WIPO bilateral co-operation program for 2008 to 2010.


DENR sees 17.6% hike in mineral sales
The Department of Environment and Natural Resources (DENR) is projecting sales of
mineral products from new and existing mineral development projects this year to
amount to $3.62 billion, a rise of 17.6 percent over last year’s sales value of $3.078

The increased mineral output would come from the new Carmen (Toledo) Copper
project, the Didipio copper-gold project, the Palawan nickel expansion project, the
Masbate (Arroyo) gold project, the Masara gold expansion, the Iligan and Manticao
ferronickel smelter project, the PASAR copper smelter expansion project, the
Philsaga gold project, the Sta. Cruz Candelaria nickel project and the Tubay nickel

Geograce signs deal with world’s 2nd largest miner for 7 projects
Listed miner Geograce Resources Philippines, Inc. has signed a deal with the local
subsidiary of the second largest mining firm in the world to jointly explore seven gold
and copper mining projects in Masbate.
In a disclosure to the Philippine Stock Exchange, Geograce said its board of directors
had approved the deal with Vale Exploration Philippines, Inc. The latter is a unit of
Brazilian Companhia Vale do Rio Doce (VALE), which is also the largest producer of
iron ore and pellets, and second largest producer of nickel.

Philex sees P5-B income this year on higher gold, copper prices
Philex Mining Corp. expects its net income to hit at least P5 billion this year, slightly
higher than its reported earning in 2007, company chairman Walter Brown said.

He said optimism of posting higher net income this year is premised on stable power
and production cost and higher gold and copper prices.

House body OK’s regulation of mining engineering
The House of Representatives committees of Civil Services and Professional
Regulation and of Appropriations approved the proposed regulation of mining
engineering under House Bill (HB) 4379, titled "Mining Engineering Act of 2008".

This expands the scope of mining engineering to include not just those involved in
the actual act of mining but also those who calculate, estimate, and certify mineral,
energy and water reserves; prepare mine feasibility studies, mine valuation or
auditing; engage in mine consulting; those who prepare environmental studies for
mining projects and monitor them; those working in government services that
require professional knowledge of mining engineering; as well as those who teach or
conduct reviews on professional mining engineering subjects in state-recognised and
-accredited universities, colleges, schools and institutes.


Philodrill eyes $70-86 million in income from Galoc oilfield
Listed oil miner Philodrill Corp. expects at least $70 million in profits from the Galoc
oilfield in Palawan province when operations go full blast in September.

This could go as high as $86 million based on a daily production of 22,500 barrels at
$125 per barrel.

DOE plans CNG, LNG terminals in Visayas
The Department of Energy (DOE) is planning to put up compressed natural gas
(CNG) and liquefied natural gas (LNG) terminals in the Visayas to help augment
power requirement in the province.

In its natural gas action plan for the period 2008-2030, the DOE said it would be
putting up at least two CNG refilling stations in Region 6 by 2010 to serve at least
100 to 500 units of tricycles. In 2020, additional CNG stations for the use of buses,
taxis and jeepneys will also be added.

FAO countries mull RP bid to produce biofuels from non-food crops
Agriculture Secretary Arthur Yap recently attended a high-level conference on world
food security in Rome, Italy, which was hosted by the United Nation’s Food and
Agriculture Organization (FAO).

The Yap-led Philippine delegation had called on industrialized economies during the
summit to assist developing economies like the Philippines produce biofuels from
non-food crops so as not to worsen the global woes arising from declining food
PNOC unit acquires jatropha oil extractor
To facilitate the development of biofuels, PNOC-Alternative Fuels Corp., a unit of
state-owned Philippine National Oil Co. (PNOC), acquired a set of equipment which
includes a small-scale jatropha expeller that can process around 120 kilograms of
jatropha seeds per hour.

Due to the volatile price of crude oil in the world market, the biofuels arm of state-
owned PNOC underscores the need to fast track the development of biofuels in the


DoE signs deal for mini-hydro plants in Catanduanes
The Government has signed three new operating contracts with Sunwest Water and
Electric Power Company, Inc. (SUWECO) to develop three mini-hydroelectric power
plants in Catanduanes.

The plants will displace 43,000 barrels of fuel oil equivalent yearly, which will save
the country $5.8 million in foreign exchange per year. The projects will also cut
carbon dioxide emission of 15,446 tons annually.

Gov’t sells P172-M subtransmission assets
The National Transmission Corp. (TransCo) has sold P172 million worth of
subtransmission assets in Cebu to Visayan Electric Company, Inc. (VECO).

In January 2005, TransCo and VECO finalised negotiations for the contract to sell
worth P171.75 million of the assets — one of the biggest single-cash deals since
TransCo’s subtransmission asset divestment program started in 2004. VECO is the
biggest utility in Southern Philippines, with more than 275,000 customers. It is
owned and managed by the Aboitiz and Garcia families of Cebu


Longer railway in Panay eyed
The Transportation and Communication department wants to extend the planned
Panay rail project to Caticlan to accommodate tourists particularly those going to
Boracay island, a government official said. The extended project will reach 200
kilometre from the initial plan of 117 kilometre, costing more than $400 million.


Marinelink to invest P1.67B on new ships
Filipino-owned Marinelink Tankers Inc. has invested P1.67 billion for the operation of
two new domestic shipping vessels.

The first project, which has an estimated cost of P750 million, involves the
acquisition and operation of a brand new 3,600 dead-weight (DWT) double-hulled
internationally classed petroleum tanker to transport petroleum products from
refineries and terminals to oil depots and bulk plants along coastal routes all over the
Philippines. The vessel will be fitted with the Purple Finder security system, a global
positioning system (GPS) device.
Meanwhile, the second project for registration on pioneer status by the company is
for a new 6,300 dead-weight (DWT) double-hulled internationally classed petroleum


Alliance Global, Genting seen to invest $1B in ‘Tourism City’
Alliance Global Group Inc. (AGI), the listed holding firm of real estate magnate
Andrew Tan, and its partner, The Genting Group of Malaysia, are expected to invest
over $1 billion for the development of the proposed Pagcor Tourism City to rise at a
reclaimed land area along Manila Bay.

SMIC eyes foreign partners for Batangas hotel project
The Hotel Investment Group of the Sy family’s flagship firm SM Investments Corp.
(SMIC) is in talks with foreign operators for its planned five-star hotel in Pico De Loro
in Nasugbu, Batangas. By end-December 2008, the group is expected to have a total
of 660 hotel rooms and is seen to grow further to 1,394 guestrooms by the first half
of 2010.

SMIC, in partnership with Accor, the owner of the Sofitel brand of hotels, will also
build a five-star, 400-room hotel in Mactan, Cebu estimated to cost P2.8 billion. The
Sofitel Cebu Hotel is slated for opening at the end of the year.

Foreign tourist arrivals up 7%
Foreigners visiting the Philippines reached close to 1.4 million in January to May,
with Americans registering the most number of visits, followed by Koreans and
Europe posted a 15% increase in visitor arrivals in the same month. Fast-growing
European markets included the United Kingdom, Russia and Spain.


Customs bans tax-free imports of resins, critical raw materials
The government has stopped the tax-free importation of critical raw materials for the
food, electronics, and other export industries that require imported quality packages.

A total ban on bonded warehouse importation of resins used in the manufacture of a
wide range of plastic products for the domestic and export markets, purportedly to
curb technical smuggling through the bonded warehouse system, took effect on June
20, despite strong protests aired by end-users.

SBMA approves 85 projects worth $ 210 M in January-May period
Subic Bay Metropolitan Authority (SBMA) has approved a total of 85 new projects
worth $ 210 million, for the January to May this year, further boosting Subic’s claim
as one of the country’s leading investment destinations.

Data from the SBMA Business Group indicate that Korean firms continue to provide
the biggest investments pouring into Subic.
News compiled by:
UK Trade & Investment
British Embassy Manila

Manila Bulletin
Philippine Daily Inquirer
The Philippine Star
Business World

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