RP INKS $410-M WB LOANS
MANILA, OCTOBER 4, 2006 (STAR) By Paolo Romero - The Philippines signed yesterday three loans worth $410 million with the World Bank (WB), the country’s biggest assistance package from the multilateral agency since the late 1990s.
President Arroyo witnessed the signing of the three loan agreements by Finance Secretary Margarito Teves and World Bank Country Director Joachim von Amsberg in Malacañang yesterday.
The World Bank, whose stated goal is to reduce poverty, said the loans will help finance the National Government’s (NG) basic education and health reform programs as well as state-owned Land Bank of the Philippines’ financing package for local government units (LGUs).
"The increase in World Bank investments in the Philippines has become possible because of the country's improved fiscal policies, von Amsberg said. "With a more sustainable fiscal situation, the Philippines can benefit from increased volumes of low cost financing from official lenders such as the World Bank."
The $200-million loan for basic education, payable over 20 years and with an eight-year grace period, seeks to strengthen school management and improve teaching effectiveness.
The $110 million loan for the health sector, also with the same terms, will provide health insurance for indigents as well as improve health service delivery for disease prevention and regulate pharmaceuticals, the bank said.
The education and health programs will be implemented by the Department of Education and Department of Health, respectively. Both programs are designed to support strategic priorities in the national budget to help both the health and education departments improve governance and finance expenditures critical for delivering health and education services.
The remaining $100 million will be provided to the Landbank for financing local government efforts to improve public service, infrastructure and social services.
The World Bank noted recently that while the Philippines had been acclaimed as one of the most highly educated countries, national and international tests in recent years have shown that the quality of education was slowly eroding.
"Local government units play a very important role in reducing poverty incidence in the Philippines. This World Bank loan will go a long way in enabling LGUs fulfill their mandate of managing their growth and development programs," Finance Secretary Margarito Teves said. – With AP
Stocks continue to drop on fears of Milenyo’s impact The Philippine Star 10/04/2006
Stocks fell yesterday on concern property losses and lost wages due to typhoon Milenyo may damp consumer spending, hurting earnings of companies.
Typhoon Milenyo, the strongest to hit Manila since 1995, smashed into the Philippine capital on Sept. 28, knocking down power and communication lines in the city and other parts of Luzon island. Work was curtailed for two days and power has not been fully restored.
"Property losses will force people to cut back on spending," said Paul Joseph Garcia, who helps manage about $1.2 billion at ING Investment Management. "The brown outs forced companies to shutdown temporarily and this affects daily wage earners."
The Philippine Stock Exchange Index lost 20.19, or 0.8 percent, to 2,522.50 at the noon close. Losers beat gainers 62 to 30. The market dropped 0.6 percent Monday. The index hasn’t dropped for two or more consecutive days since a five-session slide ending Aug. 25.
Stocks may extend declines, Garcia said.
"The adverse impact on the economy and earnings of the companies hasn’t been fully factored in by the market," he said.
Philippine Long Distance Telephone Co. (PLDT), the nation’s biggest company, dropped P35, or 1.6 percent, to P2,215. Ayala Corp., owner of the country’s largest builder, dropped P5, or 1.1 percent, to P460.
Metropolitan Bank & Trust Co., fell 50 centavos, or 1.2 percent, to P41.
"The weakening of US economy is also aggravating the situation," Garcia said. "This is bad for global equities and has a negative impact on local stocks."
Manufacturing in the US expanded less than forecast last month, while spending on home construction fell for a fifth straight month. US-based Filipinos account for over half of remittances paid back to the Philippines.
"The US is our biggest trading partner," said Astro del Castillo, managing director of First Grade Holding Inc., a financial management and advisory company in Manila. "Any sign that its economic expansion may be weakening could affect us."
Slowing growth in exports may make it harder for the Philippine government to meet its goal of boosting economic expansion to at least 5.5 percent this year.
"We were expecting a rebound given the peso’s rice past the 50 to the dollar mark but that obviously was not enough to inspire investors to go back into the market," said Rommel Macapagal of Westlink Global Equities.
"Investors are looking for excuses to unload and then buy on dips. I think overall sentiment though remains positive given improving economic fundamentals," said Lawrence de Leon of Accord Capital Equities. – AF
Chief News Editor: Sol Jose Vanzi
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