PRIVATE FUNDS EYED TO BANKROLL ASEAN ECONOMIC INTEGRATION
MANILA, May 22 , 2004 (STAR) By Rocel C. Felix - Member-countries of the ASEAN (Association of Southeast Asian Nations) wants to tap private sector funds to bankroll the groupís initiatives for the economic integration of the region by 2020.
Trade and Industry Secretary Cesar Purisima said the proposal was presented by the ASEAN Secretariat to the high level task force (HLTF) during the recent ASEAN Economic Ministers Retreat. Purisima said that ASEANís existing financial resources is only capable of funding 35 percent of the groupís approved projects intended to pursue economic integration. "The region has recognized that one way to mobilize resources within ASEAN is to seek ways to pursue partnership with the private sector," Purisima said.
ASEAN is focusing on the implementation of 11 priorirty integration sectors in its objective of creating an ASEAN Economic Community by 2020. The 11 priority sectors are agri-based products, air travel, automotive, e-ASEAN, electronics, fisheries, health care products, rubber-based products, textiles/apparel, tourism and wood-based products. To achieve integration, Purisima said "the ASEAN Community will have to subsume some of the present national prerogatives into a supra-national entity, which will require both economic and political adjustments."
Members agreed that in order to realize the vision, the region will have to be transformed into a legal union and body, wherein a charter defines rules for members. This is a departure from the current practice of consensus-building to resolve issues affecting members. Last March, ASEAN Ministers drafted the road map for the integration of the electronics sector leading to the ASEAN Economic Community by 2020. The road map seeks to accelerate the transformation of ASEAN into a single market and competitive base by that time.
RP to remain as Asiaís laggard, says UBS exec By Ted P. Torres (Star) 05/22/2004
The Philippines will likely remain lagging behind other countries in Asia as external factors continue to pose risk to the fragile economy, a foreign economist noted.
Jonathan Anderson, managing director for investment research and head of Asia Pacific economics for the Swiss financial giant UBS, said the domestic economy, while showing signs of improvement, remains highly vulnerable to external influences such as high oil prices, high interest rates, foreign currency movements, and the performance of other regional economies. At the same time, Anderson said the country could likewise be prone to pressures on the political front, with the winner in the recent presidential polls needing to implement the much-needed economic reforms, especially on public sector expenditures and revenue collections.
"He or she must initiate fiscal consolidation, reduce the debt burden, induce economic growth, improve governance and transparency in both public and private sector, and create a more conducive foreign direct investment climate," Anderson said in a press briefing yesterday. The Philippine economy is forecast to grow by five percent this year and contract to 3.5 percent in 2004. In contrast, the average regional growth rate in Asia, excluding Japan, is pegged at six percent. Even Indonesia, which is considered the other laggard in the region, would improve its growth performance from four percent last year to an estimated 4.4 percent this year and 4.5 percent in 2005.
The UBS executive also expressed alarm that the expected increase in interest rates by the United States Federal Reserve would impact heavily on the countryís growth as local interest rates are expected to follow suit. The Fed will likely increase rates by between 25 to 50 basis points every quarter, expected to peak to 3.75 percent by Dec. 2005.
Thus, the Philippines would move its 91-day Treasury bills from an estimated yield of 7.75 percent by end year to 9.25 percent by 2005. The 10-year bond rate , meanwhile, is seen to hover at the 13 percent level this year to 14 percent by end-2005. However, Anderson estimated the peso to remain at the high end of P55 to the US dollar this year, before weakening further to the P56:$1 level.
UBS is a global financial firm dealing in wealth management, investment banking, retail and commercial banking, and asset management. It manages assets worth up to 2.2 trillion Swiss francs.
Reported by: Sol Jose Vanzi
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