STRONGER PESO HAS LITTLE EFFECT ON EXPORTS
MANILA, MAY 15, 2007 (MANILA TIMES) By Angelo S. Samonte, Reporter - PHILIPPINE-MADE goods sold abroad are still competitive with their counterparts in Asia, as the peso has been appreciating in tandem with currencies in the region, the Bangko Sentral ng Pilipinas (BSP) said.
“The peso is moving together with other currencies in terms of appreciation and volatility. At this level, our competitiveness remains strong because the value of [the] peso hasn’t changed much,” BSP Governor Amando M. Tetangco Jr. told reporters.
The central bank said the peso’s 3.9-percent rate of appreciation and its 1.1-percent rate of volatility so far this year veer close to those of other Asian currencies.
The Thai bath is appreciating 8.6-percent onshore and 4.4-percent offshore; the Chinese yuan, 1.6 percent; the Australian dollar, 4.7 percent; the Japanese yen, 0.7 percent; and the South Korean won, 0.31 percent.
In terms of volatility, the Thai baht is moving 3.9 percent; the Malaysian ringgit, 1.0 percent; the Indonesian rupiah, 0.9 percent, the Chinese yuan, 0.4; the Singaporean dollar, 0.6 percent; and the Korean won, 0.65 percent.
Tetangco said the strong peso should be of no concern to exporters, as it reflects the Philippines’ improved economic performance and helps temper price increases.
The peso has risen about 15 percent against the dollar in the past two years and is one of Asia’s top-performing currencies. Strong export receipts, foreign investments and remittances by overseas Filipino workers have led to the local currency’s appreciation, flooding the domestic financial system with extra cash.
The BSP remains noncommittal with regard to any adjustment in its overnight interest rates, saying that while the benign inflation outlook could give it room for cutting rates, it should also be wary about strong liquidity growth.
BSP Deputy Governor Diwa C. Guinigundo said the above 20-percent expansion of the country’s money supply will likely push up inflation in the next 12 months. --With Maricel E. Burgonio
Manila Water seeks reconsideration
Government turns down Ayala-led multibillion-peso project in Cebu - By Darwin G. Amojelar, Reporter, MANILA TIMES
A CONSORTIUM led by Manila Water Co. Inc. (MWCI) failed to secure government support for its bid to supply water in the central province of Cebu, documents obtained by The Manila Times showed.
Costing about P2 billion, the Cebu Carmen Bulk Water Project is an unsolicited build-operate-transfer (BOT) venture involving the construction of a 30-kilometer pipeline for the province’s water supply. It is Ayala family-led MWCI’s first venture outside the East zone concession of the Metropolitan Waterworks and Sewerage System (MWSS).
The documents showed that state-run Metropolitan Cebu Water District (MWCD) has abandoned the proposal aimed at supplying water to its 1.5 million customers.
In a letter dated March 21, 2007, Armando H. Paredes, MWCD general manager, said the project failed to secure a notice of acceptance.
Paredes said more than 45 calendar days had lapsed since the proponent received the notice of approval and still no notice of acceptance was received by MWCD.
“Pursuant to Section 10.9 of the implementing rules and regulations [IRR] of the BOT Law, as amended, we regret to inform you that due to the failure of the original proponent to submit in writing as acceptance of all the terms and conditions of the approval by the approving body within 45 calendar days from receipt of the notice of approval, the unsolicited proposal is now deemed rejected by Metro Cebu Water District,” the letter addressed to Sherisa P. Nuesa, MWCI chief finance officer, read.
“In view of the forgoing, it is now moot and academic to discuss on the issue of reimbursement of development cost that the unsolicited proposal is now being officially rejected hereto,” the letter further read.
In a separate letter dated April 10, 2007, addressed to Finance Secretary Margarito Teves and Socioeconomic Planning Secretary Romulo L. Neri, Nuesa sought reconsideration of MWCD’s decision.
The MWCI executive wrote that the 2006 BOT Law IRR is not applicable to the project. “The project should be governed by the previous IRR, which does not have any formal acceptance requirements as provided for in the transitory provision found in Section 15.3 of the 2006 BOT Law IRR,” her letter read.
“Relative to the issue of development costs, we reiterate what we have been consistently relaying to MWCD, that the consortium is willing to negotiate on the amount . . . We are similarly open to explore an option of conducting the price challenge on the project with our without development costs, which will be determined by the NWRB [National Water Resource Board] after the award in accordance with law,” the letter further read.
“Mindful of your concern over private sector negative perception of the investment climate due to regulatory obstacles, particularly those applying to BOT projects, we request your assistance in clarifying this issue as we are under serious pressure from our partners and even other stakeholders,” it added.
In a letter to Paredes dated March 23, Nuesa said the project was endorsed to the National Economic and Development Authority (NEDA) on August 24, or before the effectivity of the 2006 BOT Law IRR, thus subjecting the proposal to the earlier IRR.
“Under the 1999 BOT Law IRR, there is no requirement, much less a time period, for the original proponent to make a formal acceptance of the terms and conditions of the approving body,” Nuesa wrote.
The project will cover construction and installation of rubber dam, two intake structures, a lift station, water treatment plant, treated water well and two booster pump stations. It will also include 30 kilometers of 1000-millimeter diameter transmission pipeline, access road, eight siltation dams, 7,500-cubic meter reservoir and a power substation.
Joining MWCI in the project is Stateland Inc. MWCI supplies water to 2.5 million customers in 24 cities that include Mandaluyong, Marikina, Pasig, Pateros, San Juan, Taguig, Makati, parts of Quezon City and of Rizal province.
In the first quarter, the water utility saw its profit dip by 15 percent to P509 million due to the expiration of its tax perk, even as revenues were up 19 percent.
Chief News Editor: Sol Jose Vanzi
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