(STAR) By Zinnia B. Dela Peńa - Flag carrier Philippine Airlines (PAL) noted an increase in its passenger traffic by about five percent in January compared with the same period last year despite the downgrade of the country’s air safety rating by the US Federal Aviation Administration, a top company official said.

“We carried more passengers last month, mostly Filipinos residing in the US We’re happy that the Filipino community in the US is very supportive of us,” said PAL president Jaime Bautista.

He said PAL’s load factor in the US is almost 85 percent.

The airline company is due to report its financial results for the period April to December 2007 tomorrow.

Bautista hinted that the company posted better than expected financial results although net earnings slightly dropped due to higher fuel prices.

As the only Philippine carrier to fly to the US, PAL is committed to maintaining its US operations despite of the downgrade of the Philippines air safety ratings to Category 2 from Category 1.

A Category 2 rating means Philippine carriers can not expand services to the US PAL is the only Filipino airline that flies to the US which accounts for 30 percent of total revenues.

Bautista said PAL is increasing its routes in China and is planning on adding more flights to Los Angeles, San Francisco and Canada.

PAL earlier said it will spend P3.5 billion to refurbish its long-range wide-body fleet which comprises five Boeing 747-400 and four Airbus A340-300 aircraft. The project will be implemented in phases with the first aircraft sporting the new interiors in June 2008.

The entire program is due to be completed by the last quarter of 2009.

PAL said it plans to add state-of-the-art inflight entertainment systems new business class and economy class seats to the planes. It also wants to adopt a new, modern look emulating the Philippines’ tropical feel.

“The move is intended to address the growing popularity of business class service and the competitive pressures to upgrade the service,” PAL said.

PAL, which emerged from eight years of receivership last year, will complete this year its purchase of a fleet of 21 A320s, costing around $1.2 billion.

Where did the created wealth go? DEMAND AND SUPPLY By Boo Chanco Wednesday, February 13, 2008 (STAR)

If we are to believe the GDP/GNP growth figures of government, it would mean that a good amount of wealth had been created. But as we all know, most people complain that they hardly feel any beneficial impact from Ate Glue’s strong economic performance. “Mga mayayaman lang naman ang nakakaramdam nyan,” one distraught woman told a television reporter.

Apparently, that’s really what happened. I forwarded the analysis made by former business reporter Earl Victor Rosero, which I featured last Monday in this column, to Dr. Philip Medalla, a leading academic and economist who also was once Director General of NEDA. Dr. Medalla confirmed Mr. Rosero’s findings and that poor woman’s suspicions.

“People don’t feel the growth because much of it went improving the government’s balance sheet and to corporations and banks which used the higher profits to repair the damage done to their balance sheets by the Asian Financial Crisis,” Dr. Medalla explained. “Yes, there’s growth (and much higher growth) according to the NSCB but surveys of manufacturing establishments and households say otherwise.” He also poses some doubts on the reliability of NSCB’s statistics.

Here is the full text of Dr. Medalla’s reaction to Rosero’s number crunching.

“Boo, I did similar calculations, with exactly the same conclusions. The FIES and the National Accounts paint totally different pictures of the economy — not for 2003-2006, but also for 1997-2000 and and 2000-2003. On the other hand, the FIES showed much higher growth than the national income accounts in 1994 and 1991.

“Most analysts say growth is not trickling down and that growth is higher under GMA than previous presidents but people don’t feel it because much of the growth went to the rich and to repairing bank and corporate balance sheets. But as you know, I think growth is not being felt by the people (that government spent so much on “nararamdaman ko” ads is a good indirect proof of this) because growth is much lower than estimated by the NSCB.

“Yes, people don’t feel the growth because much of it went improving the government’s balance sheet and to corporations and banks which used the higher profits to repair the damage done to their balance sheets by the Asian Financial Crisis. But given the very high reported growth, there should have been some juice left for most families. Instead, real income fell for all deciles and real expenditures fell for most deciles in the FIES.

“But it is not just the household surveys that are not detecting growth that is being reported by the NSCB. The Volume of Production Index (VOPI) from the Monthly Integrated Survey of Selected Industries (MISSI) of the NSO (census) has declined and yet the NSCB is reporting growth in real manufacturing value added. BIR’s collection is not reflecting the high growth either.

“Yes, there’s growth (and much higher growth) according to the NSCB but surveys of manufacturing establishments and households say otherwise. So either all the surveys are wrong or GDP growth rates are over-estimated. Moreover, the same NSCB’s estimates of Gross National Income (GNP adjusted for the worsening of the international terms of trade) shows that after adjusting for taxes, private purchasing power is not growing as fast as NSCB’s estimate of personal consumption expenditures.

“Expect more ‘nararamdam ko’ ads.”

Food prices

Alas, things can only get worse as international food prices continue to go up. Even in more progressive Malaysia, government had to suppress a protest rally over high food prices. Figures from the Rome-based UN Food and Agriculture Organization show food prices globally soared nearly 40 percent in 2007, helping stoke protests in Myanmar, Pakistan, Indonesia and Malaysia.

It does seem that Filipinos are more patient than their neighbors. As the SWS survey we cited last Monday, Pinoys just tend to tighten their belts. But… for how long? Food protests have a way of turning into food riots, as we have seen in other world and regional capitals.

A report from Agence France-Presse quotes Joachim von Braun, from the International Food Policy Research Institute as having observed that Asia’s growth has left many of its poor behind. They spend between 50 and 70 percent of their meager incomes on food, making price rises especially debilitating.

Von Braun also cited data from the UN Food and Agriculture Organization (FAO) that showed rice prices soaring to around $270 a ton by July 2007 from about $160/ton in January 2000. In the Philippines, rice prices surged 7.5% from a year earlier in January, along with oil-driven rises in other commodities that make up the consumer price index.

Vietnam said it would suspend rice exports, and India did so last year, said Duncan Macintosh, Manila-based development director for the International Rice Research Institute. More recently, unexpected snowstorms swept across rice growing areas in China, where rising food costs have already raised the fear of unrest. Speculators have even begun betting the price of items like wheat and rice will rise, making the picture still more volatile, AFP reports.

Is our government even starting to worry about a food crisis? Agriculture Secretary Arthur Yap had been warning about rising international prices for rice. Increasing local production has its limits, basically poor irrigation facilities. Secretary Yap has made the rehabilitation of our irrigation facilities among his department’s priorities, but it is not possible to reverse years of neglect in the short term.

If Ate Glue knows what is good for her continued stay in Malacanang, she had better show a lot more proactive efforts in the area of food security. They have to make sure unscrupulous traders do not hoard rice and other foodstuff. A food riot would do what the past series of coups and the NBN expose failed to do. That seems pretty obvious.


I like doing the weekly grocery shopping if only because it gives me a sense of the market. Last Saturday, the cost of onions, local or imported, was P110 a kilo at Robinson’s Supermarket in Galleria, Ortigas Center. It had been in three digits for a number of weeks now. We (with Marichu Villanueva) brought up this problem with Secretary Yap a couple of weeks ago when he showed up at the Tuesday Club.

The Agri Chief was disturbed by the report. But he was candid enough to say that it was partly his fault because he agreed to the request of the local onion traders to give the local farmers a breathing spell by stopping the importation of onions. Hence, even the Customs people started stopping onion smugglers with highly publicized raids.

Stopping importation to help farmers is one thing. But what is this I heard that they have now allowed importations but the same onion traders are also now cornering the importation of onions? This is a cartel which shouldn’t be allowed if this government is to protect consumers. I can understand helping local farmers but they make no money out of this scheme. Only the already wealthy traders do.

Incidentally, stopping the importation of onions from China or elsewhere is also a violation of WTO rules. What is happening here?

Chief News Editor: Sol Jose Vanzi

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