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Thursday, January 31, 2008

The RP Economic Miracle Part 1

The Philippines, long lamented as an economic laggard or the “sick man of Asia”, whose checkered past has been marked by repeated false starts coinciding with frequent changes in political leadership, has finally found its redemption, and the whole world is cheering.

The UN has lauded the Philippines as the Success Story of the early 21st Century for accomplishing all the 8 Millenium Development Goals, specifically the eradication of extreme hunger and poverty, attainment of environmental sustainability, disease prevention, reduction of child mortality, and achievement of 100% literacy. The IMF and WB have praised the country, not only for its impressive record in sustained economic growth while simultaneously improving income distribution, but also for starting to become a net donor country to multilateral lending agencies to help poorer countries now eager to emulate or adapt the Philippine economic miracle. This was despite the Philippines' boldness to refuse compliance with IMF/WB conditions after it finally realized it had to stand up on its own, following instead in the footsteps of Asian tigers that prospered with little or no intervention from the US multilateral lending agencies.

For all these gains, Time Magazine honored all Filipinos “People of the Year” for 2020.

The 50-year communist insurgency and Moslem secessionist movements have all but ceased while the AFP and PNP have effectively stopped extrajudicial killings, eliciting commendations from the Vatican, Amnesty International, Communist governments like China and Vietnam, and the Organization of Islamic Countries. Crime and violence have disappeared along with vices like drug abuse and alcoholism, illegal gambling and prostitution. Gallup International now ranks 10 of the country's cities among the world's 100 most desirable to live in based on a comprehensive criteria including population density, livelihood opportunities and tax rates, cost of living, peace and order, sanitation and hygiene, availability of clean water and health services, and the air pollution index.

The country's rich natural endowments that have been restored – verdant rain forests and coastlines with white sands and clear blue waters warmed for 12 months by a tropical sun -- capped by the trademark hospitality of its people have combined to make it a magnet for 20 million tourists annually, and a retirement haven. Surveys consistently confirm that Filipinos have regained their ranking as the happiest and most optimistic people in the world, representing a 180-degree change from the loss of confidence and skepticism that has depressed a country for nearly two generations. Infant mortality is at its lowest, birth rate has declined to natural replacement levels due more to a responsible parenthood campaign rather than family planning and artificial contraception, while longevity has been rising and is now averaging 88 years old vs. 70 years old as recent as 12 years ago.

After growing at 8% in 2008 and 9% in 2009, the economy has been expanding at an average rate of +10% for the past 10 years starting in 2010, and is expected to reach $500 Billion in 2020, translating to a record per capita income of US$4,000. Impressively, the GINI coefficient, (the economic index to measure income inequality where a lower number denotes better equity), has dropped to below 0.20, an admirable feat and dramatic improvement from 0.50 within only 12 years, even significantly better than western and communist states. The middle income segment, powered by small and medium scale entrepreneurs, OFW returnees, an industrial work force, and a resurgent agriculture and fisheries sector has burgeoned from less than 30% up to 75% within the past 12 years.

Exports are surging at a blistering pace, driven by the country's bold decision to focus on organically-grown high-value food and health products from the Agriculture and Fisheries sector's bumper harvests in rice, corn, sugar, coconut, ocean and fresh water aquatic products; an Industrial sector powered by high-value information technology of silicon wafer fabrication and the manufacture of Filipino communications equipment; and a Mining sector credited by Greenpeace for responsible extraction feeding heavy industries such as steel-fabrication which in turn is helping produce Philippine-branded motorcycles and automobiles, buses and trucks running on clean and green Philippine biofuels led by malunggay, jathropha, sweet sorghum, sugarcane ethanol and cocodiesel.

The country has been able to turn its weakness as an economic laggard into a strength by capitalizing on the “latecomer advantage” – a dramatic departure from the mindset of previous government and economic planners of “let's quit since we can't compete”, by partnering with and learning from the mistakes of other nations, e.g., environmental sustainability, and collaborating with overseas Filipino scientists and engineers, the DOST as well as top schools to pursue “Filipinovation” and catapult the country in its development curve. BPOs reinvented themselves from being mere call centers to become a leading provider of business and economic solutions to the world's largest corporations – from knowledge process outsourcing to high-value services including CEO mentoring.

The country's growth has attracted massive investments and technology transfer from neighboring Asian countries led by Greater China, a unified Korea and the ASEAN Economic Community, which in turn, have unleashed a virtuous cycle of growth in employment, household incomes, demand creation, expansion of production capacity and inventory, and higher value-added to the economy. The US and Japan continue to be among the top 10 but the country has largely decoupled from them as principal sources of investment, loans and partners in trade. The most significant contribution however has come from the Middle-Eastern countries as OPEC member-states sent a cumulative $100 billion worth of aid, soft loans and investment with the multiple objectives of hitting 3 birds with 1 stone – to help uplift impoverished Moslem Mindanao; mass-produce green biofuels to diversify its dwindling petroleum reserves and clean the planet we all share. The stock market index has reached a record 10,000 and real estate market values continue to appreciate, not driven by leveraged speculators, but by cash payments from a growing middle class that has improved its financial IQ to save and invest for the future.

Even the nation's long and world-renowned reputation for rampant graft and corruption previously institutionalized in all levels of government, and labeled cynically as SOP (Standard Operating Payola) has been miraculously erased. Government bureaucracy has been reduced drastically from a record-high of 1.5 million by half, releasing 750,000 people to become entrepreneurs and agribusinessmen. As a result of government's new image, fresh university graduates are now flocking to join the ranks of civil servants as public salaries have risen to levels competitive with the private sector, and the best and the brightest Filipino youth pursue their dreams of serving the country before themselves.

Perhaps the best indication of the country's turnaround is the drying up of the supply of Overseas Filipino Workers (OFWs), who used to number a previous high of over 8 million. Now they are officially down to less than 1 million, all of whom enjoy higher pay and benefits of free housing and international education for their children with annual home leaves to the Philippines. The reverse migration started in 2008 and since then, 7 million have returned over the past 12 years, eclipsing the “brain gain” phenomenon witnessed in other labor-exporting countries like China, India and Vietnam, but not before acting as tourism ambassadors to personally invite millions of their grateful hosts to visit a land where the people are as warm and sunny as the tropical climate. Many returnees have joined the academe, the government or the private sector as advisers to share their expertise gained from years of successful overseas work, while others became entrepreneurs by setting up collective ventures. OFW cooperatives are now engaged in more productive sectors like agriculture and fisheries, mining and industry, instead of following the herd mentality of opening a sari-sari store or buying a passenger jeepney.

As a result, the GDP has undergone a dramatic structural transformation on both supply and demand sides. What used to be a service-dominated economy is now more balanced among Agriculture, Industry and Services, while on the demand side, Consumption, which used to dominate by as much as 70%, continues to grow but its contribution is now down to only 30% because of the acceleration of more productive Investments, financed by astronomically high domestic savings rates, and Government Spending on physical infrastructure and public education, health and nutrition, funded by increasing tax revenues plus a resurgent Export sector. Consumption spending has also undergone a dramatic change as Filipinos decided to stop overspending on instant gratification, and started to practice frugality that increased savings rates for reinvestments. Borrowers themselves disbursed bank loans more judiciously, and with better financial management and fiscal prudence, defaults declined, leading to less foreclosures and stronger credit expansion from banking and financial institutions that rewarded their creditworthiness.

Foreign debt, which used to choke off the country with onerous amortizations, has diminished to a negligible ratio of <10%>

It seems that the “sick man of Asia” has discovered a renewed sense of confidence and faith in its own God-given talents and strengths, skills and capabilities, reminiscent of the Gospel accounts when Jesus performed miracles on the sick, the lame, and the lepers, even bringing the dead back to life, when He said, “Your faith has made you well.”

The author is a business graduate from the UP and an industrial economist from the UA&P-CRC. He has a 25-year career in various roles in Corporate Planning, Marketing, Sales, and General Management across Asia-Pacific, and a recipient of the Agora Award for Marketing Excellence. He is now President of Business Mentors, Inc., a newly-formed management consultancy firm and Regional Director of ZMG Ward Howell, Inc.

Source: Good News Pilipinas

Moody's raises RP ratings outlook to positive

Moody's Investors Service has raised its outlook on Philippine ratings to positive from stable, citing the government's easing dependence on external financing.

"Improved macroeconomic conditions and fiscal performance are mutually reinforcing each other," said Moody's senior vice president Tom Byrne in a statement released in Manila Friday.

The ratings include long-term government foreign and local-currency ratings, foreign-currency bank deposit ceiling and foreign currency country ceiling.

Byrne said a stronger Philippine peso and lower domestic interest rates have significantly lowered debt service payments "freeing budgetary resources for much-needed infrastructure spending, which is helping to resuscitate the long-languishing levels of investment in the country's economy."

"The government has not masked inflation by subsidizing retail petroleum prices, thereby avoiding contingent fiscal liabilities and adding pressure on the balance of payments by encouraging higher oil imports," said Byrne.

"This policy also avoids running into political problems down the road, if subsidies were to become too costly and needed to be rolled back," he said.

He said smaller budget deficits and the country's improved external payments position have allowed the government to prepay external public sector debt and to shift budgetary financing to depend less on foreign funding.

"We believe the government will continue to face considerable challenges in sustaining progress in strengthening its fiscal position, and deficit reduction may not be as readily achievable as in the past several years," said Byrne.

"Populist, political maneuvering in Congress may water down the tax effort, and spending pressures may increase well before the 2010 presidential election."

Source: Good News Pilipinas

RP reef one of 7 WoW nominees

The 96,000- hectare Tubbataha Reef, Asia's best marine park, has been nominated as one of the seven new Wonders of the World.

Tubbataha, a reef ecosystem in the middle of the Sulu Sea, along with around a hundred other natural attractions across the continents have been selected and officially recognized last July 2007.

Alex Marcaida, an environmental advocate here, urged Filipinos to vote and give chances for Tubbaataha to make it to the top 21 finalist in the prestigious search for new world wonders.

He said Tubbataha's "underwater world of wonders" is one of best few places on earth and it's worth voting for.

Seven nominees like Chichen Itza of Mexico, Christ Redeemer of Brazil, Colosseum of Italy, Taj Mahal of India, Great Wall of China, Petra of Jordan and Machu Picchue of Peru already garnered one million votes to represent global heritage throughout history.

Tubbataha declared as World Heritage Site by United Nations Educational, Scientific and Cultural Organization (UNESCO) in 1993 and it has consistently generated P4 million pesos from dive tourism from January to December this year.

The reef, located some 182 kilometers (113 miles) southeast from this city, is home to 10, 000 coral reefs, 483 species of fish, two nesting species of marine turtles, nine species of marine mammals.

The reef's islets are among the last breeding strongholds of seabirds in Southeast Asia.

Angelique Songco, park manager, said tourism income will be used for conservation, research and monioring and other park-related management job which pegged at P10 million annually.

Personnel of Philippine Navy, Philippine Coast Guard (PCG) and other uniformed men in Western Command have also contributed to the conservation of Tubbataha through manpower and logistics support.

Tubbataha is reportedly contributed ecological value of P840 million every year in the country's economy in terms of fisheries and tourism.

Story courtesy of Philippine News Agency

Wednesday, December 12, 2007

Despite political woes, RP economy still grows

For more than 20 years the Philippine economy has been held to ransom by political bickering and a succession of failed coup attempts, but there are signs that this is now changing.

The short-lived siege of a luxury Manila hotel by a group of soldiers on November 29 hardly made an impact on the economy with the stock market ending the day 1.2 percent higher.

The siege followed the assassination of a prominent Muslim congressman in a bomb blast outside the House of Representatives on November 13 and an accidental shopping mall explosion which killed 11 people on October 19.

In the past these events would have sent the economy into a tail spin. But the Economist Intelligence Unit recently forecast that economic growth in 2007 would hit 6.8 percent, the highest in 20 years.

Similarly the economy now seems unperturbed by constant corruption accusations against President Gloria Arroyo, who is determined to stay the course and end her term in 2010.

Although she has pardoned former president Joseph Estrada who was sentenced to life for corruption recently, a shadow will always hang over Arroyo and the seizure of power in 2001 when the military withdrew its support from the former movie actor.

Filipinos are tired of all the political bickering and military adventurism, said Nestor Aguila, president of DA Market Securities.

"These things are just seen as a nuisance today. Nobody cares about it," he added.

The Philippine Business Leaders Forum, part of The Economist group, said in a recent commentary: "Growth is up, the budget deficit is down, the peso is going through the roof, remittances are at an all-time high in spite of the fall of the dollar and business confidence is booming."

James Lago, of Westlink Global Equities, said: "The Arroyo administration may have its problems but the local invstment community has come to terms with that. The fact is there is no solid alternative. "Despite rumblings against her the general public would rather live with the Arroyo administration," Lago said.

Even concerns over corruption no longer seem to be a deterrent to foreign investment. "The top countries in the world for foreign investment today are China and India and they have an extensive history of corruption," remarked John Forbes, director of the local American Chamber of Commerce.

It is in the area of economic reform, however, that business leaders still see problems. Forbes said that if the right reforms are implemented, the Philippines could see 35.8 billion dollars in new foreign investment from 2007 to 2010.

He identified 17 bills -- covering topics like customs brokerage, land administration and credit information -- that are ready to be passed into law and could help accelerate economic growth but which have largely been ignored by the legislature.

In a recent speech before the country's business community, Donald Dee, the usually soft-spoken chairman of the Philippine Chamber of Commerce and Industry, lashed out at the country's politicians.

"We are sick and tired of all these political noises. We are sick and tired or our leaders pointing their fingers at each other," he said. Although the economy still faces numerous challenges, such as rising oil prices, the weakening US dollar, continuing fiscal concerns and the possible effects of the US subprime credit crisis, it has still shown impressive growth in recent months.

The World Bank, in a report on Asia-Pacific economies, praised the Philippines as "the best performing economy among Southeast Asian middle income countries." "This indicates that (economic) growth for the year could reach or exceed 6.7 percent, which is on upper end of the government's target range for 2007," the World Bank said.

The economy's strength has been credited to the huge remittances of the millions of Filipinos working overseas, the booming business process outsourcing (BPO) sector at home, strong domestic demand and the resilience of the export industry. But business leaders have also identified other potential growth areas like tourism, mining, infrastructure, power and biofuels.

Article written by Mynardo Macaraig of AFP

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Source: Good News Pilipinas

Lyceum triumphs in Asian Choirfest

The Lyceum of the Philippines University Chorale scored a unique achievement for the country with a harvest of two gold medals and one silver in the 1st Asian Choir Games held at the Jakarta International Expo, Kemayoran, Jakarata, Indonesia.

In its triumphant maiden sally into international competition, the LPU Chorale was one of the 120 choirs competing in 21 categories. Organized by Interkultur Germany. Contestants came from 13 Asian countries, including Australia, China, Japan, Korea, Malaysia, Singapore, Sri Lanka, Thailand, Vietnam, Indonesia and the Philippines.

The Asian Choir Games held three competitions – the Qualification Round, Asian Open and Asian Choir Championships. The LPU Chorale joined the Qualification Rounds for three categories, namely Mixed Youth Choir, Folklore and Musica Sacra, facing all three and moving up to the Asian Choir Championships. Here the group scored highest, winning gold medals for both Mixed Youth Choir and Musica Sacra and a silver for Folklore.

The group's repertoire for the Mixed Youth category were Les Chants des Oiseaux, Alleluia, Magtanim Ay Di Biro and Kasar Mie La Gaji. For Folklore, it was Chua-av, Tinig ng Lupa and Pokpok Alimpako, and for Musica Sacra, the songs were Cantate Dommo, Ave Maria Stella, Gloria and Jauchzet Dem Herm.

The LPU Chorale is composed of 29 members under the baton of Choirmaster Nicanor Infante, with Rosario Garcia as assisting artists.

Giving their full support to the group were LPU president Atty. Roberto P. Laurel, RP Ambassador to Indonesia Vidal Querol, Consul General Catalino "Jun" Dilem, the Filipino community in Indonesia, including Erlinda Humberson, Clarissa Bannelos-Sugbayo, Dolly Ann Carag, Aileen Buensuceso and Franciscus Lim, Jon Kudero of Hyatt Hotel and Bro. Pete Lapid of St. Peter Canissius Church, Jakarta.

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Source: Good News Pilipinas

Friday, November 16, 2007

Himig Singers sweep Asian Choir Games

A Filipino choir group has cemented the Philippines' reputation as a nation of natural-born singers.

The multi-awarded Himig Singers of Davao City swept the First Asian Choir Games held in Jakarta, Indonesia, from Nov. 2 to 10, winning the top prize in the mixed vocal ensembles category, besting rival groups from China, Malaysia, Russia, South Korea, Sri Lanka and Thailand.

They performed the Visayan folk song "Usahay" (Sometimes), "Circle of Life" by Elton John and the gospel hymn "Walls of Jericho."

Other Philippine groups also won top prizes in other categories in the Jakarta tilt.

In the mixed youth choir category, the Lyceum University of the Philippines Chorale took the gold diploma, a mere point away from the Gema Sangkakala Youth Choir of Indonesia, which was declared champion.

The Lyceum Chorale won the silver diploma in the folklore category while the Mandaue City's Mandaue School for the Arts Children's Choir finished second after Indonesia's Voice of YPJ, which was declared champion.

Philippine representatives also performed well in the Asian Open phase of the contest, with Quezon City's Coro de Sta. Cecilia winning the silver diploma in the mixed vocal ensembles category and the Mandaue School for the Arts Children's Choir bagging the gold in the children's choir category.

The Himig Singers won the National Music Commission for Young Artists awards in 1990 and 1993. It also brought home the Award of the Audience at the 2004 Vivace International Choral Festival in Veszprém, Hungary.

In 1997, the group won first prize in the mixed category and the grand prize in the 26th International Youth and Music Festival in Vienna, Austria, garnering the highest rating ever of 99.93 percent in the history of the competition.

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Source: Good News Pilipinas

UE Chorale sweeps Int'l Singing Contest

The University of the East Chorale bested over 35 choirs from around the world, including two others from the Philippines, to win the prestigious Grand Prix at the 2007 Busan Choral Festival & Competition in Busan, South Korea.

The UE Chorale's Grand Prix win is a victory for the Philippines and UE, signifying as it does “International Excellence in Classical and Pop Music.” This is underscored by the fact that the UE-based singing group also won the Gold Medal in the Competition's Classical and Pop Categories.

The competition proper of the 2007 Busan Choral Festival & Competition was held from November 1 to 3, 2007, at the Busan Cultural Center in South Korea. This was the second year in a row the UE Chorale swept the international chorale competition's Grand Prix.

Last year, the UE Chorale won not just the Grand Prix but also the Gold medal in the Pop category and the Silver medal in the Classical category. Both Competitions saw performances by choirs from all over the world, including the USA, Asia and Europe; this year, two other Philippine groups besides the UE Chorale took part: the University of Visayas Chorale and the Philippine Male Chorale.

In line with the Festival, the UE Chorale, who were in South Korea this year since October 1 until their return to the Philippines last November 4, held 27 concerts in various venues throughout South Korea, including Korea University and Cheong-Ju University. They won the Classical category Gold medal last November 1, the Pop category Gold medal on November 2 and the Grand Prix on November 3.

UE's world-class chorale is led by Ms. Anna Tabitha Abeleda-Piquero, the group's Musical Director and Conductor.

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Source: Good News Pilipinas