WORLD ECONOMIC FORUM (WEF): HOPE FOR THE POOR?

APRIL 22, 2014  -All eyes are on Manila as about 600 delegates from 30 countries converge here today for the 23rd World Economic Forum (WEF) to discuss how the rapid East Asian economic growth could distribute its benefits more equitably among its 600 million people. The three-day meeting of representatives of business, government, civil society and academia convenes against a backdrop of not only impressive growth rates in the economic bloc, but also persistent disparities in competitiveness and development. President Benigno Aquino 3rd and his team will be joined at the meeting by Nguyen Tan Dung, Prime Minister of Vietnam, Susilo Bambang Yudhoyono, President of Indonesia, and U Nyan Tun, Vice-President of Myanmar. Under the meeting’s theme, Leveraging Growth for Equitable Progress, participants will discuss the opportunities to promote greater inclusion across East Asia, with a three-point agenda: achieving equitable progress, advancing models for sustainable growth and realizing regional connectivity. Big buzz phrases like “Asia’s next economic miracle” and “a dream of 600 million fulfilled” will not be in short supply when the 600 thinkers discuss the Asean Economic Community (AEC) during the event. The AEC, a long cherished dream among 10 Asean countries that is expected to launch next year will be a common market with a combined gross domestic product of about US$2 trillion, according to a report by McClatchy Tribune Information Services (MCT). By January 1 next year, tariff and non-tariff barriers across South-east Asia will be removed, and restrictions on services, investments and labor mobility eased. “This brings unprecedented opportunities for partnership, trade and foreign direct investment,” said WEF managing director Philipp Rosler. READ MORE...

ALSO: Global poverty down, Philippine poverty remains high

That the poverty situation in the Philippines has not improved has been the cause of much concern lately. According to the National Statistics Coordination Board, 27.9 percent of the population currently lives below the poverty line, a figure that was practically unchanged from the figure of 28.6 per cent and 28.8 respectively in the first half of 2009 and first semester of 2006, respectively. The figures are all the more disturbing because globally, the poverty situation has actually improved since 2005. According to the World Bank, the proportion of people living in extreme poverty — on less than $1.25 a day — fell in every developing region from 2005 to 2008. Moreover, the biggest recession since the Great Depression seems not to have thrown that trend off course. According to the Bank, “The progress is so drastic that the world has met the United Nations’ Millennium Development Goals to cut extreme poverty in half five years before its 2015 deadline.” Debating the causes of global poverty reduction --What accounted for this positive global trend since 2005? One school of thought is represented by Brookings Institution researchers Laurence Chandy and Geoffrey Gertz, who claim that the “stunning progress” is due to “the rise of globalization, the spread of capitalism and the improving quality of economic governance – which together have enabled the developing world to begin converging on advanced economy incomes after centuries of divergence. The poor countries that display the greatest success today are those that are engaging with the global economy, allowing market prices to balance supply and demand and to allocate scarce resources, and pursuing sensible and strategic economic policies to spur investment, trade and job creation. It’s this potent combination that sets the current period apart from a history of insipid growth and intractable poverty.” In short, the key for Getz and Chandy was market-oriented or neoliberal reforms, also known as “structural adjustment,” that radically reduced government intervention, eliminated barriers to trade and capital flows, and promoted privatization. READ MORE...

(ALSO) Noy at WEF last year: Now is perfect time to invest in Phl

NAYPYIDAW, June 8, 2013 –Being called the “brightest spark” in Southeast Asia and “Asia’s Rising Tiger,” President Aquino told businessmen attending the 22nd World Economic Forum (WEF) on East Asia here that the Philippines was ripe for investments. The President touted the reforms and the new mandate his administration received from the Filipino people in the last midterm elections. Aquino and members of his delegation arrived here yesterday morning for the forum and had separate meetings with Myanmar President Thein Sein, opposition leader Aung San Suu Kyi, and Klaus Schwab, founder and executive chairman of the WEF. “Today, all the factors are in place: political stability, low inflation and low borrowing rates, opportunities for growth in almost all sectors, a government committed to integrity and empowerment, and a people known the world over for their industry, loyalty, and creativity,” Aquino said during a luncheon hosted by Ayala Corp. The Zobel de Ayalas are longtime members of the WEF. READ MORE...

(ALSO) Biz Buzz: The price of WEF exclusivity

How much does it cost for a company to be a top-tier partner of the World Economic Forum? A lot of money, apparently. With the coming of the Davos-based talkshop to the country’s shores, its officials also wooed a number of local conglomerates to join its growing club of members. Previous to the Manila edition of the WEF East Asia conference, Ayala Corp. and the International Container Terminal Services Inc. were the only Filipino companies in the exclusive club. Not anymore. Biz Buzz learned that at least two major Filipino conglomerates have ponied up the money to be part of the annual conference circuit (which includes exclusive invites to Davos, Switzerland every January, of course). San Miguel Corp. and the SM group of companies each paid about 250,000 Swiss francs—a little over P12 million at current exchange rates—for a one-year WEF membership. This is significantly higher than the 50,000-Swiss franc fee WEF used to charge up until last year.
(WEF organizers must have breathed a sigh of relief with the two new additions after some of their long-time corporate members complained about the fee hike.) Putting more money where their mouths are (as far as promoting the Philippines goes), both San Miguel and SM also shelled out substantial sums of advertising money to sponsor Philippine-related content on international cable TV news channels like CNN. For the exhaustive CNN coverage of the Philippines this week, Biz Buzz learned that San Miguel forked over a total of $300,000—about P13 million—for the cable network to air a string of stories promoting the Philippines as a business destination.
READ MORE...

(ALSO) LIVE: World Economic Forum on East Asia 2014 in Manila

As one of the economically fastest-growing regions in the world, ASEAN is one year away from launching the ASEAN Economic Community, a common market which will comprise 600 million people and have a combined GDP of nearly US$ 2 trillion. In this context, the 23rd World Economic Forum on East Asia will be held in Metro Manila, Philippines. Writing one of the greatest economic comeback stories in recent years, the Philippines is poised to be the strongest performing South-East Asian economy in 2014. Follow the LIVE streaming of sessions and updates from our business reporters. Contribute by using #WEFinPhl on Twitter or by logging in to the LIVE FEED below this article at the bottom of page... or click http://goo.gl/kbfuHZ to go to Philstar Business page.


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Hope for the poor?

MANILA, MAY 26, 2014 (MANILA TIMES) by The Manila Times Reportorial Team (see at foot of this article) - All eyes are on Manila as about 600 delegates from 30 countries converge here today for the 23rd World Economic Forum (WEF) to discuss how the rapid East Asian economic growth could distribute its benefits more equitably among its 600 million people.

The three-day meeting of representatives of business, government, civil society and academia convenes against a backdrop of not only impressive growth rates in the economic bloc, but also persistent disparities in competitiveness and development.

President Benigno Aquino 3rd and his team will be joined at the meeting by Nguyen Tan Dung, Prime Minister of Vietnam, Susilo Bambang Yudhoyono, President of Indonesia, and U Nyan Tun, Vice-President of Myanmar.

Under the meeting’s theme, Leveraging Growth for Equitable Progress, participants will discuss the opportunities to promote greater inclusion across East Asia, with a three-point agenda: achieving equitable progress, advancing models for sustainable growth and realizing regional connectivity.

Big buzz phrases like “Asia’s next economic miracle” and “a dream of 600 million fulfilled” will not be in short supply when the 600 thinkers discuss the Asean Economic Community (AEC) during the event.

The AEC, a long cherished dream among 10 Asean countries that is expected to launch next year will be a common market with a combined gross domestic product of about US$2 trillion, according to a report by McClatchy Tribune Information Services (MCT).

By January 1 next year, tariff and non-tariff barriers across South-east Asia will be removed, and restrictions on services, investments and labor mobility eased.

“This brings unprecedented opportunities for partnership, trade and foreign direct investment,” said WEF managing director Philipp Rosler.

On the ground, however, economists and bureaucrats are carefully managing expectations, saying this “dream” is likely to arrive as a “series of little bangs” rather than a seismic shift.

Neither would the AEC upend the way business is conducted.

Gradual integration

“Integration is a process. It is not going to be a big bang,” said Philippine Finance Secretary Cesar Purisima.

Europe, he pointed out, is still integrating more than three decades since the European Union was formed.

For Philippine Trade Secretary Gregory Domingo, the “big bang” already happened four years ago, when nearly all tariff lines in South-east Asia were rolled back to zero or near-zero.

The big shift will be in non-tariff barriers that could see countries such as the Philippines easing limits on ownership of key industries and opening up more sectors to foreign competition, he said.

Already, big lenders from abroad, including Singapore-based Bridge Financial Services, are anticipating a law that will allow them to own 100 percent of Philippine banks, Edward Garcia, former president of the Rural Bankers Association of the Philippines, told The Straits Times.

While this week’s WEF meeting will focus on the economic promises of Asean 2015, rising geopolitical tension in the region will not be far from the minds of the delegates.

China, which has seen its territorial dispute with the Philippines worsen in recent months, is apparently snubbing the host by sending just a token delegation to the forum this year.

Aquino sent invitations to Chinese President Xi Jinping and Prime Minister Li Keqiang, but both did not even bother to reply.

The closest to a state official that China will have in Manila is an executive dean of Peking University.

Vietnam and China are also locked in a tense stand-off over a giant oil rig the Chinese towed into waters claimed by both countries.

Despite the growing tension, delegates expect the over-arching message from the forum to be one of pragmatism.

“My belief is that pragmatism rules, and a pragmatic view of the situation would suggest that peaceful resolutions of these issues would be made,” said the EU-Asean Business Council’s Donald Kanak.

PH back from the brink

Guillermo Luz, private sector co-chairman of the National Competitiveness Council (NCC) and former executive director of the Makati Business Club (MBC), said the forum could showcase the Philippines as a viable economic, financial, and investment hub for foreign visitors.

Chief market strategist Jonathan Ravelas of BDO Unibank, Inc. said the Philippines, being the host country, has reached an important milestone.

“Our economic ‘back-from-the-brink’ story is one of the best, if not the best, in recent years, being an economy with the youngest population in Asia, and with sustainable growth ranging from 6 to 7 percent,” Ravelas told The Manila Times.

However, aware that the country’s growth rates are high, what the WEF is likely to want to check out during the forum is the sustainability of that growth, said Alvin Ang, economist at the University of Santo Tomas.

“The forum will be an opportunity for the Philippines to say ‘yes, growth will be sustainable,’” Ang said.
The private sector plays a big part in that growth, particularly in job generation.

“We should raise the point that WEF member countries can help the Philippine economy grow by investing in it, in the productive sectors that could create jobs to sustain the current growth path,” Ang said.

Manufacturing offers many possibilities, he said. The sector needs more foreign direct investment so it can be more integrated into the Asean market.

Presenting what the Philippines has to offer to the global investment community with a stronger, broader, deeper participation from the both the private and public sectors will help Filipinos better understand the concerns of the investing community and be able to act on these concerns as soon as possible, said Jun Neri, Bank of the Philippine Islands chief economist.

The country has a big chance of success in vying for a share of the global market in services, but will have a more difficult time competing in agriculture and manufacturing if the current productivity does not improve, Neri said.

Luz underscores the country’s advantage in terms of manpower. “In the area of people, we have an advantage—but only if we educate and train our people,” he said.

“We will also have the largest working-age population [ages 18 to 64] over the next 30 to 40 years. If we educate and train our people for high-value jobs here or across Asean, that places the country in a strong position,” Luz said.

Local private industries and corporations that have been preparing and will continue to prepare for the 2015 target date for AEC will be able to compete better in areas that have not yet been liberalized.

“Those who do not prepare will suffer,” Neri added. MAY CARABALLO, MADELAINE MIRAFLOR, VOLTAIRE PALAÑA, RITCHIE HORARIO WITH MCT

FROM THE INQUIRER

Global poverty down, Philippine poverty remains high
By Walden Bello INQUIRER.net 2:33 pm | Monday, June 10th, 2013


BELLO

That the poverty situation in the Philippines has not improved has been the cause of much concern lately.

According to the National Statistics Coordination Board, 27.9 percent of the population currently lives below the poverty line, a figure that was practically unchanged from the figure of 28.6 per cent and 28.8 respectively in the first half of 2009 and first semester of 2006, respectively.

The figures are all the more disturbing because globally, the poverty situation has actually improved since 2005.

According to the World Bank, the proportion of people living in extreme poverty — on less than $1.25 a day — fell in every developing region from 2005 to 2008. Moreover, the biggest recession since the Great Depression seems not to have thrown that trend off course.

According to the Bank, “The progress is so drastic that the world has met the United Nations’ Millennium Development Goals to cut extreme poverty in half five years before its 2015 deadline.”

Debating the causes of global poverty reduction

What accounted for this positive global trend since 2005?

One school of thought is represented by Brookings Institution researchers Laurence Chandy and Geoffrey Gertz, who claim that the “stunning progress” is due to “the rise of globalization, the spread of capitalism and the improving quality of economic governance – which together have enabled the developing world to begin converging on advanced economy incomes after centuries of divergence.

The poor countries that display the greatest success today are those that are engaging with the global economy, allowing market prices to balance supply and demand and to allocate scarce resources, and pursuing sensible and strategic economic policies to spur investment, trade and job creation.

It’s this potent combination that sets the current period apart from a history of insipid growth and intractable poverty.”

In short, the key for Getz and Chandy was market-oriented or neoliberal reforms, also known as “structural adjustment,” that radically reduced government intervention, eliminated barriers to trade and capital flows, and promoted privatization.

Seemingly convincing, this explanation, when subjected to close analysis, falls apart.

There is another, and indeed, more credible way, of interpreting the results. The dismal period of little progress from the 1990s to 2005, occurred during the high noon of neoliberal reform and globalization.

This was the period of widespread structural adjustment in the global South.

As admitted by Chandy and Gertz themselves, this period of so-called economic reform had the following features: “Excluding China, the…decrease in global poverty becomes an increase of 100 million. In the world’s poorest region, sub-Saharan Africa, the poverty rate remained above 50 percent throughout the period, which, given the region’s rapid population growth, translated into a near doubling in the number of its poor. Similarly in South Asia, Latin America and Europe–Central Asia there were more poor people in 2005 than there were a quarter of a century earlier.”

So what accounted for the improvement in the global poverty picture since 2005?

What happened was that from the early 2000’s, governments the world over began throwing off the shackles of neoliberalism. In the 1980’s and 1990’s, Latin American countries were the most ardent followers of neoliberal reform.

But with little to show for this except deepening poverty and rising inequality, many governments radically change course in the first decade of the 21st century. Government intervention, economic nationalism, redistributive populist policies that promoted both equity and expanded internal markets, and the commodities boom triggered by China’s development made up a potent combination that reversed trends in poverty.

In Africa and Eastern Europe, the story was much the same: a pragmatic shift away from neoliberalism. In East Asia, most countries, with the exception of the Philippines, managed to avoid comprehensive structural adjustment even as they rhetorically praised market reforms to high heavens. And in the aftermath of the Asian Financial Crisis of 1998, most threw off or softened the neoliberal measures they had selectively adopted, like capital account liberalization.

Departures from orthodoxy

Even some establishment circles now recognize that the neoliberal approach codified in the so-called “Washington Consensus” was way off the mark.

As former World Bank chief economist Justin Yifu Lin has noted, “It was not an effective economic strategy for most developing countries, which typically are trapped in multiple levels of distortions and need gradually to gradually organize their transition out of these second-, third- or nth-best situations.”

In short, the neoliberal framework “ignored the requirement that developing countries’ governments play a key role in overcoming the issues of coordination and externality in the process of technological innovation, industrial upgrading, and structural change.”

The missing link

What are the implications for the Philippines, one of the countries that bucked the trend towards reduced poverty? One lesson is that the Conditional Cash Transfer (CCT) Program is not enough. As Jose Ramon Albert, the secretary general of the National Statistical Coordination Board, has written, “(T) he CCT is not expected to immediately yield significant changes in incomes that will make the poor cross the poverty line, as it is investment in human capital—particularly in education and health, where the impact may be seen in five to 10 years.”

The CCT is meant to contain poverty, to prevent it from getting worse. It merely serves as a supplement to a more comprehensive strategy designed to spur development, create jobs, and reduce poverty.

That comprehensive strategy is what is missing. It is the reason why significant gains in the war against poverty continue to elude the Aquino administration.

Encouraging signs, discouraging signs

Nevertheless, there are encouraging signs.

Contrary to the views of ultra-neoliberal economists like Bernardo Villegas, passage of the Reproductive Health Law is recognition, albeit belated, that the gains of economic growth are for naught if they just get channeled to consumption by a rapidly growing population instead of serving as investment for expansion of the economy.

Slowly, there is seems to growing realization that the neoliberal paradigm that we absorbed from the International Monetary Fund and the so-called Chicago School of Economics is fundamentally flawed. For example, the Department of Trade and Industry has created an “industrial policy” task force that envisions, rather timidly though, a greater government role in picking and supporting industries that would create jobs, diversify the economy, and trigger sustained development. Industrial policy is taboo among neoliberals.

For the most part, however, our policymakers are imprisoned in the neoliberal paradigm. The Central Bank and Department of Finance continue to see inflation as the dragon to be slain, biasing them against an active and flexible fiscal policy that would put the focus on job creation. Another article of faith is being a “model debtor.”

Consequently, religiously paying the foreign debt according to the harsh terms of the creditor now regularly takes up 20-25 per cent of the government budget, restraining spending for infrastructure that has been identified by many as one of the key bottlenecks to sustained growth and leaving little fiscal space for funding pro-poor initiatives.

Guided by the idea that it is foreign corporations and the rich that are the source of wealth, the government is stuck with tax, investment, and incomes policies that favor these groups while shifting the burden of providing revenue to the middle class and the poor via VAT and excise taxes.

Structural reforms that would raise the incomes of the poor and make them a source of demand to spur economic growth are either stalled or moving at a snail’s pace: agrarian reform, for example, is scheduled to end in the middle of 2014, yet over 900,000 hectares nationwide remain to be distributed to land reform beneficiaries.

Meanwhile, the World Bank-derived mantra of “inclusive growth” serves as the rhetorical canopy for a comprehensive proactive macroeconomic strategy that does not exist.

Chinese and Latin lessons

In working out a post-neoliberal macroeconomic strategy for the Philippines, our government might want to pick up the best practices from East Asia and Latin America. From the experience of China and other successful East Asian countries, Lin, the World Bank’s former chief economist, underlines the role of the state as “strategic facilitator,” in contrast to neoliberal thinking that frowns on all kinds of state intervention.

According to him, “[I]t is important for a country to have a committed, credible, and capable government to perform the information, coordination, and externality compensation functions…By playing such a role, the state can overcome market failures and facilitate industrial upgrading and structural transformation.”

Corruption on government is a problem, but in rooting it out, one cannot throw out the baby with the bathwater. An activist government is central to economic transformation, as our neighbors’ experience has shown, contrary to neoliberal chatter about the “virtue” of the do-nothing state.

Our technocrats and economists might also find it worth their while to read former Financial Times correspondent Hal Weitzmann’s recent book titled Latin Lessons: How South America Stopped Listening to Washington and Started Prospering.

Though not uncritical of their policies, the book underlines the central role in Bolivia, Ecuador, and Venezuela of redistributive reforms favoring the lower classes over the upper classes, and national interests over foreign interests.

Hugo Chavez’ popularity in Venezuela stemmed not so much from his anti-Washington rhetoric but from the fact that his policies favored the lower half of society at the expense of the rich and foreign oil corporations.

And Argentine President Nestor Kirchner righty deserves his exalted place in the continent’s economic history. He defied foreign creditors and paid only a slightly quarter for every dollar that Argentina owed foreign bondholders.

The result – as foreign debt payments amounting to billions of dollars were rechanneled to the domestic economy – was that Argentina went from depression in 2000 to 2002 to energetic growth that averaged 10 per cent from 2003 to 2008.

The challenge of the next three years

The challenge in the final three years of the Aquino administration is to lay a new macroeconomic paradigm for sustained development. Retaining the old neoliberal framework, though in more pragmatic from, will ultimately erode the gains the administration has made in successfully battling corruption and containing poverty via the CCT program. The economy may continue to grow impressively, but this alone will not be sufficient to reduce poverty and inequality. And rapid growth, alongside continuing or increasing poverty and inequality, is, as the history of revolutions has shown, a prescription for continuing social instability.

The president has shown his dogged determination in cleansing the government of corruption. Will he show the same crusading spirit for reform in economic policy by setting aside the conservatism and caution of his advisers and placing the country on a new, dynamic macroeconomic path?

*Walden Bello, a specialist in international political economy, is author or co-author of 18 books, the latest of which are Capitalism’s Last Stand? (London: Zed, 2013) and Food Wars (London: Verso, 2009)

REPORT LAST YEAR FROM PHILSTAR

Noy at WEF: Now is perfect time to invest in Phl By Aurea Calica (The Philippine Star) | Updated June 8, 2013 - 12:00am 13 308 googleplus0 10


JUNE 8, 2013: President Aquino addresses participants at the World Economic Forum in Myanmar.

NAYPYIDAW – Being called the “brightest spark” in Southeast Asia and “Asia’s Rising Tiger,” President Aquino told businessmen attending the 22nd World Economic Forum (WEF) on East Asia here that the Philippines was ripe for investments.

The President touted the reforms and the new mandate his administration received from the Filipino people in the last midterm elections.

Aquino and members of his delegation arrived here yesterday morning for the forum and had separate meetings with Myanmar President Thein Sein, opposition leader Aung San Suu Kyi, and Klaus Schwab, founder and executive chairman of the WEF.

“Today, all the factors are in place: political stability, low inflation and low borrowing rates, opportunities for growth in almost all sectors, a government committed to integrity and empowerment, and a people known the world over for their industry, loyalty, and creativity,” Aquino said during a luncheon hosted by Ayala Corp.

The Zobel de Ayalas are longtime members of the WEF.

“In our country, you have the recipe for sustained, inclusive growth that benefits investors and the public alike. All that is left is for us to engage each other, and work together – and this is precisely why we are here today,” he said.

The President called on the businessmen to see challenges in the Philippines as opportunities as they could come and build the much-needed infrastructure as well as participate in the agriculture and tourism sectors.

With a 7.8 percent gross domestic product growth in the first quarter, investment grade from Fitch Ratings and Standard and Poor’s, victory in the last elections, reforms in various aspects to make the country conducive to business, the President said businessmen should no longer have doubts about coming to the Philippines.

“This is the perfect time to invest in the Philippines. More and more opportunities have been created... both as a result of and as an affirmation of our commitment to reform, and we are here today to share these opportunities and invite you to work with us,” Aquino said.

He said the development of infrastructure is necessary for the growth of all other sectors.

“Right now, the Philippines is behind its ASEAN (Association of Southeast Asian Nations) counterparts in this regard, including the state of our roads. Instead of seeing this as a setback, we choose to see it as an opportunity to make quality investments into infrastructure. So, we have increased our budget for infrastructure, from $4.86 billion in 2012 to $5.94 billion in 2013. This more than $1-billion increase will go toward paving all unpaved sections of our national road network, and developing airports and other transport hubs in the country,” the President said.

“At the same time, we also know that harnessing the expertise of the private sector will help us accelerate infrastructure development, which is why we are fostering greater engagement and partnership between the public and private spheres. We have already rolled out a number of projects; some are under construction, while others are still open for participation – from the construction of classrooms, and the rehabilitation, operation, and management of hydroelectric power plants, to the construction of highways,” he said.

Agriculture, tourism

Agriculture and tourism are two other priority sectors, Aquino said, not only because they “make the most of our country’s strengths, but also because they create jobs, complement existing livelihoods, and ignite rural development.”

He said the lack of infrastructure and support to farmers, among others, hampered the growth of the agriculture sector in the past and to remedy this, the government went back to basics, improving irrigation systems and constructing and rehabilitating farm-to-market roads.

“We are also moving up the value chain and discovering new uses for certain products. For example, the coconut water that was once discarded as a waste product today has become a booming industry in its own right. From 2010 to 2011 alone, coco water exports increased by more than 700 percent in value and more than 800 percent in volume, with large demand coming from countries like the United States, Australia, and the Netherlands – and the sector is still growing,” Aquino said.

He said tourism is another sector whose attraction is obvious, not only to those who are looking to invest or set up business but also to those just looking to enjoy themselves.

“The Philippines is in high demand, with 4.3 million tourists in 2012 discovering that, indeed, it’s more fun in the Philippines. With publications like Conde Nast Traveller, the New York Times, and Travel and Leisure Magazine trumpeting our beaches, nightlife, and diving – not to mention the Filipino hospitality that has made our people so famous – we are confident that we will meet, and hopefully even surpass, our 2016 target of 10 million tourist arrivals,” he said.

“So I want to take this opportunity to invite you to come and visit the Philippines, whether for a vacation, for business – perhaps to explore the hotel industry, or for the World Economic Forum on East Asia 2014, which will be held in our country. Whatever it is that you may be looking for – business opportunities in the sectors I have mentioned, or in manufacturing, shipbuilding, and information technology and business process management; a secluded and beautiful beach in Palawan, or the most lively street dancing in any of our festivals – I am certain that you will find it in our country, and find it more fun at that,” Aquino said.

Key legislation

Aquino also cited key legislation on responsible parenthood and sin taxes that were enacted, as well as the framework agreement on the Bangsamoro that was signed between the national government and the Moro Islamic Liberation Front, paving the way for a final, enduring peace in the southern part of the country.

“As you may know, the Philippines has recently concluded midterm elections to elect candidates to the Senate and Congress – a process I viewed as a referendum on my first three years as President. The idea was that if the public was in agreement with the direction in which my administration was taking the country, they would elect our candidates into the legislature. Of the 12 Senate seats up for election, the voters gave us nine. In Congress, the Liberal Party and its coalition partners also have a majority,” he said.

“To me, this is an affirmation of the mandate that I won in 2010 and a vote for continuity. If the public continues to share my vision for the country, as they have done in the past years, then anyone who aspires to succeed me would do well to continue down the path we have taken – and continue the tradition of good governance and public service, as well as the reform agenda that has brought the country so much success,” the President said.

Three years ago, Aquino said he came into office faced with the task of uprooting a long-entrenched culture of corruption and impunity in government – the key to revive the economy and foster broad-based growth for the people.

‘Climate of confidence’

Aquino said the procurement and budgeting processes had to be reformed, taking away funding from programs that did not work and pouring resources into those that would benefit the people the most – social services, health, education, infrastructure development.

“All this was done while adhering to strict standards of accountability and transparency. These same standards allowed us to make improvements to our revenue collection mechanisms, with our Bureau of Internal Revenue collections growing by 28 percent. This was achieved without raising taxes,” the President said.

Aquino said it was clear that good governance had “created a climate of confidence” in the Philippines, citing the soaring of the stock market over the past years while analysts the world over had given different names to the country’s success.

“I have heard our country called a hotspot, Asia’s Rising Tiger, or the brightest spark in Southeast Asia, just to name a few. These accolades are not unwarranted. For the first time in history, the Philippines is rated investment grade by two major credit rating agencies. These agencies have cited our robust growth as well as the low and stable inflation rate in the country – all while many other economies are experiencing slowdowns. In fact, the Philippine economy has consistently surpassed all expectations so far: full-year growth for 2012 was at 6.8 percent – higher than our growth assumption of 6 percent – while in the first quarter of 2013, our economy expanded by 7.8 percent,” Aquino said.

On the production side, the President said the first quarter growth was the result of the expansion of all major sectors: agriculture expanded 3.3 percent; services, by seven percent, and industry by 10.9 percent. – With Alexis Romero

FROM THE INQUIRER

Biz Buzz: The price of WEF exclusivity By the staff Philippine Daily Inquirer
12:06 am | Friday, May 23rd, 2014

How much does it cost for a company to be a top-tier partner of the World Economic Forum?

A lot of money, apparently.

With the coming of the Davos-based talkshop to the country’s shores, its officials also wooed a number of local conglomerates to join its growing club of members.

Previous to the Manila edition of the WEF East Asia conference, Ayala Corp. and the International Container Terminal Services Inc. were the only Filipino companies in the exclusive club.

Not anymore. Biz Buzz learned that at least two major Filipino conglomerates have ponied up the money to be part of the annual conference circuit (which includes exclusive invites to Davos, Switzerland every January, of course).

San Miguel Corp. and the SM group of companies each paid about 250,000 Swiss francs—a little over P12 million at current exchange rates—for a one-year WEF membership. This is significantly higher than the 50,000-Swiss franc fee WEF used to charge up until last year.

(WEF organizers must have breathed a sigh of relief with the two new additions after some of their long-time corporate members complained about the fee hike.)

Putting more money where their mouths are (as far as promoting the Philippines goes), both San Miguel and SM also shelled out substantial sums of advertising money to sponsor Philippine-related content on international cable TV news channels like CNN.

For the exhaustive CNN coverage of the Philippines this week, Biz Buzz learned that San Miguel forked over a total of $300,000—about P13 million—for the cable network to air a string of stories promoting the Philippines as a business destination.

Of course, notwithstanding the money San Miguel and SM are spending to promote the country… a few Cabinet officials are still bent on blocking their projects, we hear. Tsk tsk. Daxim L. Lucas

Off to Davos

Still on San Miguel Corp., company sources said SMC had signed up for a membership category that gives five of its top executives access to WEF’s regional and global meetings, including the high-powered annual meetings in Davos, Switzerland early next year, in the next 12 months.

SMC president Ramon S. Ang confirmed his conglomerate’s debut on the WEF network yesterday.

Another new corporate member recently signed up by WEF is telecommunications giant Philippine Long Distance Telephone Co. Doris C. Dumlao

Business in government

At the session on the education-entrepreneurship-employment nexus during Thursday’s World Economic Forum on East Asia, the panelists—which included SM Investments Corp. vice chair Teresita Sy-Coson—were asked what role should governments play to boost entrepreneurship.

For Sy-Coson, governments need not be bothered to oversee entrepreneurial development.

“We cannot wait for government; it will take a long time. Government has a role to play in many aspects. That’s why there are entrepreneurs—they know how to navigate” even without governments’ help, she said.

Instead, “businessmen should be in government,” Sy-Coson added, eliciting cheers from the audience.

She later clarified to reporters that she “was just joking” and that she meant that “people with business backgrounds should be in government.”

Asked if anyone in the influential Sy family plans to enter politics, she replied: “No, definitely not.”

Instead of venturing into the political realm, Sy-Coson would rather further expand family-run BDO—which its website proclaims to be the country’s biggest bank in terms of total resources, capital, customer loans, total deposits and assets—in Asean. Ben de Vera

The diplomat

TORN by the feud between his uncle Roberto V. Ongpin and British fund Ashmore, Philippine Bank of Communications and ISM Communications Corp. chair Eric Recto is now playing the diplomat who seeks to find a truce between two parties whose relations are as chilly as that of the Philippines and China.

Recto has remained friendly to both parties and he simply laughed off rumors that, after buying out RVO’s interest in PBCom and ISM, he’s supposedly organizing a coup d’etat to take on RVO’s other companies (like Philweb Corp. and Alphaland Corp.).

The four biggest stockholders of PBCom are now the following: Recto (24.19 percent), Nubla family (21.38 percent), ISM (21.38 percent) and Telengtan Brothers (10.645 percent). In ISM, the principal stockholders are now Montorfino Holdings (which bought Philweb’s 24.3-percent stake last year) and two Ashmore-owned British companies (20.52 percent). Montorfino is jointly owned by Recto and Ashmore, indicating that the bad blood between the fund and RVO has not affected the nephew. And since Recto co-exists well with Ashmore, there’s talk that he’s trying to patch things up between the feuding groups.

Asked if he thinks it is still possible to find a middle ground for RVO and Ashmore, Recto said: “There is always hope.” Doris C. Dumlao

Swift and safety

Pop star Taylor Swift will be in town next month not only for a much-anticipated concert but also to help automotive giant Toyota promote road safety.

Toyota has announced that the launch of its first road safety campaign in the Asean will coincide with seven-time Grammy Award winner’s upcoming Red Tour in Manila, Bangkok, Jakarta, Kuala Lumpur and Singapore.

To be screened during the concerts of the American singer-songwriter is a video message where she preaches the importance of wearing a seatbelt, as a Toyota study conducted in five Southeast Asian countries last year found out that only one out of four drivers and passengers wears seat belts while on the road. Ben de Vera

$300-M club loan

SM Prime Holdings, now Southeast Asia’s largest property developer, has mandated five foreign banks to arrange a five-year $300-million club loan to fund landbanking and mall development in China. The club loan is expected to be finalized by June.

The participants in the loan syndication are Standard Chartered, HSBC, ING, Chinatrust Commercial Bank and Mizuho Corporate Bank, banking sources confirmed.

It was earlier announced that SM Prime would raise fresh funds for the construction of its massive mall in Tianjin, China, which will be opened next year. It has also acquired a new location for a future mall in the city of Yangzhou (central Jiangsu province), historically one of China’s wealthiest cities and known for producing great merchant families, poets, painters and scholars across different dynasties. Doris Dumlao

High tech Cavitex

Heavy traffic is unavoidable, but long lines to pay toll on expressways may become a thing of the past if RCBC’s soon-to-be-launched “test product” picks up.

The Yuchengco-led bank will introduce by June a prepaid toll payment card for motorists plying the Manila-Cavite Expressway or Cavitex.

RCBC global transaction banking group head Gary Villanueva says the Cavitex MyWallet card will be the first prepaid card payment system for a toll way in the country.

Machines will be installed at Cavitex toll plazas where motorists can swipe their loaded MyWallet cards.

If this venture becomes successful, RCBC may eventually also offer MyWallet services to other toll operators and even the light rail transit systems, Villanueva adds. Ben O. de Vera

E-mail us at bizbuzz@inquirer.com.ph. Get business alerts and a preview of Biz Buzz the evening before it comes out. Text ON INQ BUSINESS to 4467 (P2.50/alert).

FROM PHILSTAR

LIVE: World Economic Forum on East Asia 2014 in Manila By PhilstarLIVE (philstar.com) | Updated May 22, 2014 - 1:30pm 8 62 googleplus1 2


The 23rd World Economic Forum on East Asia will be held in Metro Manila, Philippines. WEF

MANILA, Philippines — As one of the economically fastest-growing regions in the world, ASEAN is one year away from launching the ASEAN Economic Community, a common market which will comprise 600 million people and have a combined GDP of nearly US$ 2 trillion.

In this context, the 23rd World Economic Forum on East Asia will be held in Metro Manila, Philippines. Writing one of the greatest economic comeback stories in recent years, the Philippines is poised to be the strongest performing South-East Asian economy in 2014

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