CONGRESS CAN TOUCH ONLY 36% OF 2015 BUDGET  

SEPT 15 --The proposed national budget for next year may be in the trillions, but Congress can touch only about a third of it, the chairman of the House appropriations committee said yesterday. The bigger part or two-thirds is in the form of mandatory appropriations like those for debt payments, salaries and internal revenue allotment (IRA) representing the share of local government units in national taxes, Davao City Rep. Isidro Ungab said.

“The P2.606-trillion expenditure budget for 2015 appears to be huge at face value. However, stripped of the virtually mandatory items amounting to P1.668 trillion or 64 percent of the total budget, only about 36 percent or P937.5 billion may be the subject of congressional debate,” he said. “The 64 percent includes, among others, allocations for personnel services (salaries) of P761.745 billion, financial expenses of P374.543 billion (which includes debt servicing of P372.862 billion), IRA of P389.860 billion, other automatic appropriations of P72.698 billion and foreign assisted projects of P69.574 billion,” he said.

He added that the 36-percent portion that is subject to congressional scrutiny is made of up maintenance and other operating expenses of various agencies amounting to P488 billion and about P449.5 billion for capital outlay for the implementation of various infrastructure projects and the acquisition of machinery and office equipment. Ungab made the statement at the start of plenary debates on the proposed 2015 budget. He said the spending proposal is 15.1 percent or P341 billion higher than this year’s P2.265 trillion.

“The 2015 budget is anchored on the premise that no one, especially the poor and vulnerable, will be left behind. Through this budget, the government intensifies its investments in priority programs and projects that seek to achieve inclusive and sustained development,” he said. He said in terms of allocation by sector, social services will get the highest share at P967.9 billion or 37.14 percent, followed by economic services at P700.2 billion or 18.05 percent, general public services, P423.057 billion or 16.23 percent; debt service, P399.4 billion or 15.33 percent; and defense, P115.530 billion or 4.43 percent. *READ MORE...

ALSO: Plenary hearings on P2.6-T 2015 national budget start 

SEPT 15 --House of Representatives is scheduled to begin budget plenary hearings on the
P2.606-trillion 2015 budget today. House Speaker “Sonny” Belmonte Jr. said that the budget should be passed on second reading before Congress goes on three-week break beginning Sept. 27. Davao City Rep. Isidro Ungab, the panel chairman, said he would sponsor the next year’s budget after the committee approved it Tuesday of last week without cuts. “On Monday morning, we will begin the sponsorship of next year’s budget and we hope to finish it on time,” Ungab stressed as the leadership targets to pass it on third and final reading when Congress resumes sessions on Oct. 20.

Aside from sponsoring, Ungab will tackle in the plenary the Debate on General Principles and Provisions of the national budget. Cebu Rep. Gabriel Luis Quisumbing, vice chairman of the House committee on appropriations, will defend the Department of Finance (DoF), including its attached agencies and corporations, Legislative-Executive Development Advisory Council (Ledac), and National Economic and Development Authority (Neda), including its attached agencies and corporations.

At the same time, Belmonte assured the public that his leadership is determined to approve the next year’s GAB on or before Sept. 26 as scheduled. “We will stick to our tradition of approving next year’s GAB and right now, we are on track to meet the target deadline,” Belmonte said. Like this year’s, P2.264-trillion GAA, Belmonte stressed that the 2015 national budget is also a “pork-less” one. Nevertheless, Belmonte said the House of Representatives would maintain the lumpsum appropriations, including calamity and contingency funds. “Lumpsum is necessary, for instance the calamity fund,” he stressed. *CONTINUE READING...

ALSO: Companies less bullish on Phl – poll  

SEPT 17 --Philippine companies are now less bullish about the country’s economy than in the previous quarter, according to a ThomsonReuters/INSEAD survey. In the report, Philippine business sentiment fell to 83 from 100, but with eight of 12 respondents showing a positive outlook.

Five respondents reported higher employment levels and new order and sales continued to show positive levels, with 11 companies reporting increases. The country’s GDP grew by 6.4 percent in the second quarter of the year, faster than the 5.6 percent in the first three months of 2014, but slower than the 7.9 percent in the second quarter of 2013. The unemployment rate in July 2014 hardly grew, registering a 0.6-percentage point decline to 6.7 percent from 7.3 percent in July 2013.

Underemployment went down to 18.3 percent in July this year from 19.2 percent in the same period last year. Business sentiment in other Asian countries also declined, based on the survey. Asia Business Sentiment Index fell to 66 in the third quarter from 74 in the previous quarter, its steepest decline in three years. A reading above 50 indicates an overall positive outlook.

HSBC Asian economic research co-head Frederic Neumann was quoted by Reuters as saying that “while growth is still robust across Asia, businesses are grappling with a number of challenges, including worries about rising interest rates as the Fed begins to press the brakes.” Meanwhile, the report said that Indian firms were the most positive, with a maximum score of 100 for the second consecutive quarter after pro-business leader Narendra Modi was elected prime minister. *READ MORE...

ALSO: Aquino visit to France seen to reap ‘economic, political, cultural gains’  

SEPT 17 --PHOTO: Ambassador Gilles Garachon. AFP FILE PHOTO. MANILA, Philippines — The French Ambassador to the Philippines sees the upcoming visit of President Benigno Aquino III to France as a big boost to the diplomatic relations of both countries. “President Aquino’s trip to France, as well as to the other European countries and to the European Union (EU), shows the existing partnership between our governments, as well as the continuing friendship between our peoples,” Ambassador Gilles Garachon said in a statement Friday.

“This visit is expected to reap economic, political, and cultural gains for both our countries, which we hope would lead to greater opportunities for bilateral cooperation. Perhaps next year, we could see a visit by French President François Hollande to the Philippines,” he said. Aquino will be travelling to four countries in Europe: Belgium, France, Spain, and Germany from Sept. 13 to 20. After Europe, Aquino will fly to the United States, where he will visit Boston, New York, and San Francisco from Septemer 20 to 23.

This is Aquino’s first trip as Philippine president to the European countries. Diplomatic relations between Philippines and France were first formalized in 1947. There are at least 51,000 Filipinos in France as of December 2012 figures of the Commission on Filipinos Overseas. The majority of them, around 42,000, are irregular in status while there are 8,600 permanent and 1,000 temporary Filipinos in France.

“Today, we are witnessing an exciting phase in bilateral relations between France and the Philippines,” Garachon said. “We are riding a momentum of increased cooperation between our two countries, which started when then-Prime Minister Jean-Marc Ayrault visited the Philippines in 2012,” he said.*READ MORE...

ALSO: Up 7.1% to $2.3 B, OFW remittances sustain robust growth in July 

SEPT 16 --Remittances from overseas Filipinos continued to grow robustly, expanding 7.1 percent
to $2.3 billion last July, data released by the Bangko Sentral ng Pilipinas (BSP) yesterday showed. For the first seven months of the year, remittances grew 6.4 percent to $15 billion.

The BSP attributed the consistent growth to the steady increase in remittance flows from both land-based workers with long-term contracts (up five percent), and sea-based and land-based workers with short-term contracts (up 8.4 percent). The remittance growth came as demand for skilled Filipinos abroad remained stable.

Bulk of cash remittances (about 79 percent) came from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Canada and Hong Kong. However, major banks with strong remittances businesses said the real bulk of international money transfers came from the Middle East, as a lot of remittances are booked through the US but originated from other destinations like the Middle East and North Africa.

Latest data from the Philippine Overseas Employment Administration (POEA) showed that for January-July 2014, job orders reached 540,037, of which 41.1 percent were processed job orders intended for service, production, and professional, technical and related employment in Saudi Arabia, the United Arab Emirates, Kuwait, Taiwan and Qatar. *READ MORE...

ALSO: Tan gets back PAL for $1.3 B   

SEPT 16 --The group of taipan Lucio Tan yesterday officially took back full control of national flag carrier Philippine Airlines Inc. (PAL) after paying as much as $1.3 billion to diversified conglomerate San Miguel Corp. (SMC).

The Tan Group celebrated the successful buyback by holding a party at the headquarters of Philippine National Bank (PNB) on Macapagal Boulevard in Pasay City. In his message, Tan said he was happy to take back full control of the national flag carrier, which he described as “special” to him.

“PAL is more than an airline company for me. It goes beyond investing – it is like family. PAL is never far from my thoughts,” the 80-year-old taipan said. The Tan Group was determined to take back full control of PAL – at whatever cost. “Whatever life’s problems, this is a place I can always return to and feel safe, secure and loved. Indeed, this is the reason why I decided to regain full ownership of PAL – because I love PAL,” Tan added.

A source privy to the negotiations yesterday confirmed that the payment amounting to as much as $1.3 billion was delivered to SMC for its 49 percent stake that it had acquired in April 2012. This brought to a close several months of negotiations between the two major shareholders of Asia’s oldest airline. The payment was also made exactly one week after both groups signed an agreement signifying SMC’s intent to sell and the Tan Group’s intent to buy the PAL shares.

The source pointed out that the amount represents the $500-million investment made by SMC to acquire a 49 percent stake in PAL two years ago, as well as over $800 million in advances made to the national flag carrier for its operations as well as massive fleet renewal program. The source said the Philippine unit of Swiss bank UBS AG handled the transaction. With the completion of the buyback, the Tan Group could take over management control of the national flag carrier. Tan serves as chairman of PAL while SMC president Ramon Ang is president and chief operating officer. *READ MORE...

ALSO Biz Buzz: Change of command at PAL  

SEPT 17 --PHOTO: Ramon S. Ang: Farewell INQUIRER FILE PHOTO --It was a busy Monday for the camps of San Miguel and Lucio Tan, as the final deal for Tan’s takeover of Philippine Airlines’ management was finally sealed. But the eventful day did not end there. That afternoon and through the evening, a tale of two parties unfolded—one welcoming back Tan at the helm of PAL and another, smaller group, bade San Miguel, and its chief Ramon S. Ang, farewell (for now).

The two events were also a study in contrast—both carried the full weight of an important transition in the history of what is the region’s oldest flag carrier. Tan’s “meet-and-greet” event occurred around 4 p.m. with hundreds of PAL employees—dressed in red—filling up the cavernous auditorium of Tan’s Philippine National Bank to listen to prepared speeches by the tycoon himself and the airline’s new general manager, Jaime Bautista (its former president).

Lucio Tan: Welcome back. INQUIRER FILE PHOTO --But it was way more than a meet-and-greet affair. The event carried the air of a fiesta, with stereo systems blaring and the thunderous chants of “Mabuhay si Chairman Tan” lacing the end of the billionaire’s speech.

Tan gave a heartfelt message on how the airline and its employees were special to him, how PAL was “not just another airline or corporation”, bolstering the perception that the “buyback” was motivated by more than mere business interests. Bautista, on a more serious note, outlined broad strategies like the need to review expansion plans, while “reminding those who remained loyal to PAL” that they would reap the rewards of their hard work.

It was an effective rallying call to PAL’s workers (some of whom were moved to tears). After all, in the frenzy of reporting over the transaction, they remained the most overlooked bunch, despite their livelihoods depending much on PAL’s success or failure. A few hours later, at Ang’s Diamond Hotel, a more laid-back affair took place with about a hundred guests including many PAL officials and employees. But if the mood was more restrained, Ang didn’t show it upon arriving at the venue, hopping from table to table, greeting guests as if he had just bagged another major deal.*READ MORE...

ALSO Inquirer Editorial: PAL saga’s interesting turn  

SEPT 16 --The checkered story of the flag carrier, Philippine Airlines, took another interesting turn last week with full ownership and management reverting to the camp of taipan Lucio Tan.

This development ended a partnership with San Miguel Corp. head honcho Ramon Ang, the aggressive businessman who transformed the beer-based company into the highly diversified conglomerate that it is today.

SMC invested some $500 million in PAL in April 2012 in exchange for a 49-percent stake and full management control. Tan had agreed to a similar partnership for his lucrative Fortune Tobacco Corp., allowing Philip Morris to acquire a 50-percent interest and management control of the company. In the two years that Ang led PAL, many positive changes happened to Southeast Asia’s oldest airline, and to the local aviation industry in general. First was the naming of a new management team led by Ang as president.

On top of the team’s to-do list was to mend the severely fractured relationship between management and airline workers (the animosity had remained unresolved for decades). Immediately thereafter, an ambitious program was launched to replace PAL’s aging fleet. Deliveries started in the second half of 2013 with 12 Airbus units.

In the third quarter of 2013, the Aquino administration succeeded in having a European ban on flights coming from the Philippines lifted. This allowed PAL to mount flights to London beginning in November. It was even able to secure a slot in busy Heathrow Airport at no cost to the flag carrier. This airport slot reportedly trades at no lower than $20 million, if one is available. PAL continued its route expansion and, early this year, it launched flights to the Middle East, home to millions of overseas Filipino workers.

A major milestone in the local aviation sector was marked in the second quarter of 2014—the upgrade of the Philippines to Category 1 status by the US Federal Aviation Administration. It allowed the full utilization of PAL’s Boeing B777 to the United States starting in May. The aircraft, before the FAA upgrade, resulted in losses of $31.9 million in 2013.

Also this year, PAL added flights in premium profitable markets. It increased flights to Japan and secured slots at the Haneda Airport in Tokyo and opened Canadian routes that are now among the top five PAL earners. Last June, PAL also sealed a cooperation agreement with United Arab Emirates flag carrier Etihad, giving it more access to the Middle East market and connectivity to the rest of Europe, as well as synergies in the use of common facilities, front-desk offices at airport terminals and business lounges. Only recently, PAL obtained approval for the use of the Russian overflight, cutting down flying hours to London by as much as two hours per trip. *READ MORE...


READ FULL MEDIA REPORTS HERE:

‘Congress can touch only 36% of 2015 budget’

MANILA, SEPTEMBER 22, 2014 (PHILSTAR) POSTED SEPTEMBER 15, 2014 By Jess Diaz - The proposed national budget for next year may be in the trillions, but Congress can touch only about a third of it, the chairman of the House appropriations committee said yesterday.

The bigger part or two-thirds is in the form of mandatory appropriations like those for debt payments, salaries and internal revenue allotment (IRA) representing the share of local government units in national taxes, Davao City Rep. Isidro Ungab said.

“The P2.606-trillion expenditure budget for 2015 appears to be huge at face value. However, stripped of the virtually mandatory items amounting to P1.668 trillion or 64 percent of the total budget, only about 36 percent or P937.5 billion may be the subject of congressional debate,” he said.

“The 64 percent includes, among others, allocations for personnel services (salaries) of P761.745 billion, financial expenses of P374.543 billion (which includes debt servicing of P372.862 billion), IRA of P389.860 billion, other automatic appropriations of P72.698 billion and foreign assisted projects of P69.574 billion,” he said.

He added that the 36-percent portion that is subject to congressional scrutiny is made of up maintenance and other operating expenses of various agencies amounting to P488 billion and about P449.5 billion for capital outlay for the implementation of various infrastructure projects and the acquisition of machinery and office equipment.

Ungab made the statement at the start of plenary debates on the proposed 2015 budget.

He said the spending proposal is 15.1 percent or P341 billion higher than this year’s P2.265 trillion.

“The 2015 budget is anchored on the premise that no one, especially the poor and vulnerable, will be left behind. Through this budget, the government intensifies its investments in priority programs and projects that seek to achieve inclusive and sustained development,” he said.

He said in terms of allocation by sector, social services will get the highest share at P967.9 billion or 37.14 percent, followed by economic services at P700.2 billion or 18.05 percent, general public services, P423.057 billion or 16.23 percent; debt service, P399.4 billion or 15.33 percent; and defense, P115.530 billion or 4.43 percent.

* He added that to support the proposed budget, the Bureau of Internal Revenue and the Bureau of Customs have to collect P2.337 trillion, while the balance would be funded through borrowings.

“Once again, we will not allow these two major revenue generating agencies to have excuses for not collecting their targets. Congress has supported their reform initiatives, but they must remain answerable for any deplorable performance to the whole Filipino people,” he stressed.

He pointed out that the revenue target of P2.337 trillion represents a 15.8 percent increase over the 2014 level and is equivalent to 16.5 percent of gross domestic product.

“We have been privileged to represent our people and as we commence the plenary deliberation on the 2015 budget, we should not lose sight of the democratic fact that it is their voice, and not ours, that should be heard; that is their interests, and not ours, that should prevail; and that it is their money, and not ours, that we are appropriating,” Ungab told his colleagues.

Redefinition justified

Meanwhile, Budget Secretary Florencio Abad told reporters on the sidelines of the plenary discussions there is justification for President Aquino’s request for Congress to redefine government savings.

Aquino is seeking authority to suspend project appropriations for “justifiable causes” at any time during the budget year, declare the funds as savings and use them for other programs, activities or projects.

Under the Supreme Court ruling on the Disbursement Acceleration Program (DAP), the President is prohibited from suspending appropriations and using savings before the end of the year.

Abad said there are instances when funding should be suspended and realigned.

“For instance, a bridge or road project can no longer be undertaken in an area devastated by a typhoon, or a road project that gets entangled in a right-of-way issue in the courts. What are you going to do with the money in those cases? Those instances are justifiable causes for suspending and realigning funding,” he said.

He said the authority the President is seeking is not to impound appropriations arbitrarily.

For his part, Finance Secretary Cesar Purisima also told reporters that the proposed increase in the amount of tax-free bonus of salaried workers from P30,000 to P70,000 would result in a revenue loss of P40 billion to P60 billion.

“If it will be P60 billion, that is almost equivalent to our CCT (conditional cash transfer to the poor) of P62 billion,” he said.

Earlier, Executive Secretary Pacquito Ochoa Jr. said the new definition of savings that the President is seeking would not be used against administration critics.

“The President does not intend to use it to deny funds to political foes and critics,” he said.

He said Aquino is seeking a redefinition of savings so the government could use excess funds in a timely manner and not just before the end of the year, when appropriations in the national budget are about to expire.

Ochoa gave the assurance in response to apprehensions raised by Bayan Muna Representatives Carlos Zarate and Neri Colmenares.

The two said the proposed redefinition would go against the SC ruling against DAP.

“We beg to disagree, your honors. We believe that declaring and using savings before the end of the year is constitutional. That is why we have appealed the DAP ruling,” Ochoa told Zarate and Colmenares.

Cagayan de Oro City Rep. Rufus Rodriguez said Aquino and other officials who implemented DAP should not be blamed for the adverse SC decision.

“They conceived the program and implemented it in good faith. There should be presumption of regularity on their part,” he said.

FROM THE TRIBUNE

Plenary hearings on P2.6-T 2015 national budget start
Written by Gerry Baldo Monday, 15 September 2014 00:00

House of Representatives is scheduled to begin budget plenary hearings on the P2.606-trillion 2015 budget today.

House Speaker “Sonny” Belmonte Jr. said that the budget should be passed on second reading before Congress goes on three-week break beginning Sept. 27.

Davao City Rep. Isidro Ungab, the panel chairman, said he would sponsor the next year’s budget after the committee approved it Tuesday of last week without cuts.

“On Monday morning, we will begin the sponsorship of next year’s budget and we hope to finish it on time,” Ungab stressed as the leadership targets to pass it on third and final reading when Congress resumes sessions on Oct. 20.

Aside from sponsoring, Ungab will tackle in the plenary the Debate on General Principles and Provisions of the national budget.

Cebu Rep. Gabriel Luis Quisumbing, vice chairman of the House committee on appropriations, will defend the Department of Finance (DoF), including its attached agencies and corporations,

Legislative-Executive Development Advisory Council (Ledac), and National Economic and Development Authority (Neda), including its attached agencies and corporations.

At the same time, Belmonte assured the public that his leadership is determined to approve the next year’s GAB on or before Sept. 26 as scheduled.

“We will stick to our tradition of approving next year’s GAB and right now, we are on track to meet the target deadline,” Belmonte said.

Like this year’s, P2.264-trillion GAA, Belmonte stressed that the 2015 national budget is also a “pork-less” one.
Nevertheless, Belmonte said the House of Representatives would maintain the lumpsum appropriations, including calamity and contingency funds.

“Lumpsum is necessary, for instance the calamity fund,” he stressed.

* Ungab and House Majority Leader and Mandaluyong City Rep. Neptali “Boyet” Gonzales II echoed Belmonte’s statement, adding that Congress would pass the GAB that is Disbursement Acceleration Program-compliant.

“No more DAP clones or any kind of similar schemes in the national budget next year,” Ungab stressed.

“It (2015 GAB) has no pork barrel, no budget insertions and DAP-like appropriations,” Gonzales pointed out.

Eastern Samar Rep. Ben Evardone, vice chairman of the House committee on appropriations, vowed look into the legitimate concerns of the anti-pork advocates who complained that pork barrel remains in the proposed 2015 budget, adding they would be “more specific and justify the items in the budget which they consider as pork.”

“We will scrutinize every item in the proposed 2015 budget to ensure transparency. But, they should also understand that there are items which cannot be itemized like the appropriation for the Internal Revenue Allotment (IRA), debt-service, calamity and contingency funds, among others,” Evardone explained.

Bayan Muna party-list Rep. Neri Colmenares reiterated his appeal for Congress to restore the Commission on Elections’ (Comelec) P7-billion budget for Charter change (cha-cha), which was scrapped by the Department of Budget and Management (DBM) to fund people’s initiative referendum aimed at eliminating all forms of pork barrel system.

“There are no pork barrel funds in this year’s budget. They were misinformed of what had happened,” Colmenares, who reportedly benefitted P25-billion worth of DAP funds, stressed as his group is gathering least 5.2 million signatures to scrap pork barrel funds and criminalize its allocation and use.

FROM PHILSTAR

Companies less bullish on Phl – poll By Ted Torres (The Philippine Star) | Updated September 18, 2014 - 12:00am 0 0 googleplus0 0

MANILA, Philippines - Philippine companies are now less bullish about the country’s economy than in the previous quarter, according to a ThomsonReuters/INSEAD survey.

In the report, Philippine business sentiment fell to 83 from 100, but with eight of 12 respondents showing a positive outlook.

Five respondents reported higher employment levels and new order and sales continued to show positive levels, with 11 companies reporting increases.

The country’s GDP grew by 6.4 percent in the second quarter of the year, faster than the 5.6 percent in the first three months of 2014, but slower than the 7.9 percent in the second quarter of 2013.

The unemployment rate in July 2014 hardly grew, registering a 0.6-percentage point decline to 6.7 percent from 7.3 percent in July 2013.

Underemployment went down to 18.3 percent in July this year from 19.2 percent in the same period last year.

Business sentiment in other Asian countries also declined, based on the survey.

Asia Business Sentiment Index fell to 66 in the third quarter from 74 in the previous quarter, its steepest decline in three years.

A reading above 50 indicates an overall positive outlook.

HSBC Asian economic research co-head Frederic Neumann was quoted by Reuters as saying that “while growth is still robust across Asia, businesses are grappling with a number of challenges, including worries about rising interest rates as the Fed begins to press the brakes.”

Meanwhile, the report said that Indian firms were the most positive, with a maximum score of 100 for the second consecutive quarter after pro-business leader Narendra Modi was elected prime minister.

* In contrast, Taiwanese businesses were the most negative, with a score of 33.

“Chinese companies polled were neutral about their prospects, which led China’s score in the third quarter to drop to 50 from 67. China’s economy is expected to grow 7.3 percent this year, its weakest pace in 24 years,” a Reuters report said.

Singapore also turned in a third-quarter reading of 50, a sharp drop from the previous quarter’s score of 67.

Politics also helped businesses in Indonesia, Southeast Asia’s largest economy, to achieve an overall positive score of 75 in the third quarter. Indonesians recently elected President Joko Widodo, who is believed to be more business friendly than his predecessor.

FROM THE INQUIRER

Aquino visit to France seen to reap ‘economic, political, cultural gains’ By Matikas Santos |INQUIRER.net5:11 pm | Friday, September 12th, 2014


Ambassador Gilles Garachon. AFP FILE PHOTO

MANILA, Philippines — The French Ambassador to the Philippines sees the upcoming visit of President Benigno Aquino III to France as a big boost to the diplomatic relations of both countries.

“President Aquino’s trip to France, as well as to the other European countries and to the European Union (EU), shows the existing partnership between our governments, as well as the continuing friendship between our peoples,” Ambassador Gilles Garachon said in a statement Friday.

“This visit is expected to reap economic, political, and cultural gains for both our countries, which we hope would lead to greater opportunities for bilateral cooperation. Perhaps next year, we could see a visit by French President François Hollande to the Philippines,” he said.

Aquino will be travelling to four countries in Europe: Belgium, France, Spain, and Germany from Sept. 13 to 20. After Europe, Aquino will fly to the United States, where he will visit Boston, New York, and San Francisco from Septemer 20 to 23.

This is Aquino’s first trip as Philippine president to the European countries.

Diplomatic relations between Philippines and France were first formalized in 1947. There are at least 51,000 Filipinos in France as of December 2012 figures of the Commission on Filipinos Overseas.

The majority of them, around 42,000, are irregular in status while there are 8,600 permanent and 1,000 temporary Filipinos in France.

“Today, we are witnessing an exciting phase in bilateral relations between France and the Philippines,” Garachon said.

“We are riding a momentum of increased cooperation between our two countries, which started when then-Prime Minister Jean-Marc Ayrault visited the Philippines in 2012,” he said.

* The following will be Aquino’s schedule according to the French Embassy:

-The President will be arriving in Paris on September 17 from Brussels, Belgium, and will leave for Berlin, Germany on September 19.

-Upon his arrival in Paris, President Aquino will be welcomed with military honors at the Arc de Triomphe and will proceed to the Elysée Palace for a bilateral meeting with French President François Hollande.

-Both heads of state will witness the signing of agreements in the areas of culture, education, transportation, and communications, among others.

-A joint communiqué will be given before the press, to be immediately followed by a lunch hosted by President Hollande.

-President Aquino will then proceed to the Hotel Matignon later in the afternoon for bilateral talks with French Prime Minister Manuel Valls.

-In the morning of September 18 at the Intercontinental Hotel, President Aquino will formally open the Philippines-France Business Council organized by the Mouvement des entreprises de France (MEDEF) International and the Department of Trade and Industry.

(MEDEF International is a non-profit private-funded organization that represents over 4,000 French companies operating all over the world.)

-President Aquino will then proceed to the Institut français des relations internationales (IFRI), a Paris-based think tank, to deliver a policy speech.

Tan gets back PAL for $1.3 B
By Lawrence Agcaoili (The Philippine Star) | Updated September 16, 2014 - 12:00am 0 24 googleplus0 0

MANILA, Philippines - The group of taipan Lucio Tan yesterday officially took back full control of national flag carrier Philippine Airlines Inc. (PAL) after paying as much as $1.3 billion to diversified conglomerate San Miguel Corp. (SMC).

The Tan Group celebrated the successful buyback by holding a party at the headquarters of Philippine National Bank (PNB) on Macapagal Boulevard in Pasay City.

In his message, Tan said he was happy to take back full control of the national flag carrier, which he described as “special” to him.

“PAL is more than an airline company for me. It goes beyond investing – it is like family. PAL is never far from my thoughts,” the 80-year-old taipan said.

The Tan Group was determined to take back full control of PAL – at whatever cost.

“Whatever life’s problems, this is a place I can always return to and feel safe, secure and loved. Indeed, this is the reason why I decided to regain full ownership of PAL – because I love PAL,” Tan added.

A source privy to the negotiations yesterday confirmed that the payment amounting to as much as $1.3 billion was delivered to SMC for its 49 percent stake that it had acquired in April 2012.

This brought to a close several months of negotiations between the two major shareholders of Asia’s oldest airline.

The payment was also made exactly one week after both groups signed an agreement signifying SMC’s intent to sell and the Tan Group’s intent to buy the PAL shares.

The source pointed out that the amount represents the $500-million investment made by SMC to acquire a 49 percent stake in PAL two years ago, as well as over $800 million in advances made to the national flag carrier for its operations as well as massive fleet renewal program.

The source said the Philippine unit of Swiss bank UBS AG handled the transaction.

With the completion of the buyback, the Tan Group could take over management control of the national flag carrier. Tan serves as chairman of PAL while SMC president Ramon Ang is president and chief operating officer.

* Former PAL president Jaime Bautista, who served as chief negotiator for the Tan Group during the talks, has been appointed general manager of the airline.

“The first step is to go back and review where we stand and plot a new direction,” Bautista said.

The source added that Ang is expected to remain PAL president and COO at least for another month or during a transition period.

In April 2012, SMC’s wholly owned subsidiary San Miguel Equity Investments Inc. (SMEII) acquired a 49-percent equity interest in Trustmark Holdings Corp. for $500 million. Trustmark owns 97.71 percent of PAL Holdings, which in turn owns 84.67 percent of PAL through PR Holdings Inc.

With SMC on board, PAL embarked on a massive fleet renewal program involving the acquisition of 100 brand new aircraft.

PAL entered into its first purchase agreement with Airbus for a firm order of 44 A320 aircraft with options for 20 A321 NEO aircraft for delivery in fiscal years 2014 to 2020.

It also signed a second purchase agreement for a firm order of 10 A330-300 and options for another 10 aircraft for delivery in fiscal years 2014 to 2016.

However, PAL and Airbus agreed to a contract amendment last March wherein the number of orders of A330-300 aircraft would be reduced to 15 instead of 20.

It also agreed to acquire eight A321 NEO. The airline has until 2017 to exercise its right to purchase four A321 NEO aircraft.

As of end-June, PAL has received a total of 17 aircraft from Airbus, including 10 A330 and seven A321. The fleet of the PAL Group, including PAL Express, stood at 85 as of end-June.

With the Tan Group back at the helm, it is not clear whether PAL would pursue the ambitious fleet renewal program or put the aircraft orders on review.

However, the Tan Group is looking at taking in Abu Dhabi-based Etihad Airways as partner for a 40-percent stake in the national flag carrier.

Asia’s oldest airline is set to mount flights to New York via Vancouver in March next year instead of the original schedule of October as the US Federal Aviation Administration upgraded the aviation security rating of the Philippines back to Category 1 from Category 2 last April.

It is also looking at flying to other major cities in the US including Florida, San Diego and Chicago, as well as other cities in Europe such as Paris, Rome and Amsterdam after mounting direct flights to London last November after the European Union lifted the ban imposed on Philippine carriers.

PAL booked a net income of P1.49 billion in the second quarter of the year from a net loss of P1.08 billion in the same quarter last year.

FROM THE INQUIRER

Biz Buzz: Change of command at PAL By the staff |Philippine Daily Inquirer5:49 am | Wednesday, September 17th, 2014


Ramon S. Ang: Farewell INQUIRER FILE PHOTO

It was a busy Monday for the camps of San Miguel and Lucio Tan, as the final deal for Tan’s takeover of Philippine Airlines’ management was finally sealed.

But the eventful day did not end there. That afternoon and through the evening, a tale of two parties unfolded—one welcoming back Tan at the helm of PAL and another, smaller group, bade San Miguel, and its chief Ramon S. Ang, farewell (for now).

The two events were also a study in contrast—both carried the full weight of an important transition in the history of what is the region’s oldest flag carrier.

Tan’s “meet-and-greet” event occurred around 4 p.m. with hundreds of PAL employees—dressed in red—filling up the cavernous auditorium of Tan’s Philippine National Bank to listen to prepared speeches by the tycoon himself and the airline’s new general manager, Jaime Bautista (its former president).


Lucio Tan: Welcome back. INQUIRER FILE PHOTO

But it was way more than a meet-and-greet affair. The event carried the air of a fiesta, with stereo systems blaring and the thunderous chants of “Mabuhay si Chairman Tan” lacing the end of the billionaire’s speech.

Tan gave a heartfelt message on how the airline and its employees were special to him, how PAL was “not just another airline or corporation”, bolstering the perception that the “buyback” was motivated by more than mere business interests.

Bautista, on a more serious note, outlined broad strategies like the need to review expansion plans, while “reminding those who remained loyal to PAL” that they would reap the rewards of their hard work.

It was an effective rallying call to PAL’s workers (some of whom were moved to tears). After all, in the frenzy of reporting over the transaction, they remained the most overlooked bunch, despite their livelihoods depending much on PAL’s success or failure.

A few hours later, at Ang’s Diamond Hotel, a more laid-back affair took place with about a hundred guests including many PAL officials and employees.

But if the mood was more restrained, Ang didn’t show it upon arriving at the venue, hopping from table to table, greeting guests as if he had just bagged another major deal.

* Or maybe he did, with SMC over a $1 billion richer post-transaction, after turning the carrier around in just two years. Or it could have been the next big targets for the conglomerate, of which we hear there are plenty.

Halfway through the evening, beneath Yurakuen restaurant’s silver and crystal cherry blossom trees, Ang, too, gave a speech explaining the circumstances of the sale and why it had to be done.

The contents, of course, are strictly confidential but if verified, might poke holes into the perception that SMC was in the business of just flipping assets.

Those brief comments also drew some tears and a standing ovation of about 37 seconds long. (Yes, we counted.)

With the welcoming and goodbyes all but done, PAL now undergoes the process of sorting out its future plans.

And as we say in this space, abangan!–Miguel R. Camus

More interested

Now that San Miguel Corp. has sold back its stake in Philippine Airlines to the Lucio Tan group, the question on many people’s minds is whether Ramon Ang will still pursue his plan of building a mega-airport on reclaimed land at Manila Bay (or anywhere else the government will let him).

After all, it seems to many observers that Ang’s interest in building an airport came hand in hand with his mission of bringing PAL back to profitability.

For PAL to achieve better returns (better than where the SMC chief left it upon turnover to Tan), it was crucial for a bigger airport with more runways to improve operational efficiency at the flag carrier.

Biz Buzz learned that, far from being deterred by the return of PAL to Tan, Ang remains interested in building something like the $10-billion project he had proposed to Malacañang.

More importantly, Ang’s moves will no longer be hobbled by regulatory restrictions and fears that any airport business would be in a conflict-of-interest situation with SMC’s owning an airline.

We had the chance to pose the question to the SMC chief Tuesday on whether he is still interested in running an airport, and his loaded reply was: “Yes…. More pa.”–Daxim L. Lucas

‘Rice’ to the challenge

While in Europe to attend his first meeting as board member of the International Basketball Federation (Fiba), businessman Manuel V. Pangilinan, aka MVP, accepted the so-called rice bucket challenge from his friend Henry Lim Bon Liong, CEO of Sterling Paper Group of Companies and hybrid rice producer SL Agritech Corp.

MVP announced via micro-blogging site Twitter on Tuesday that upon his return from Madrid and Hong Kong, he would donate 100 sacks of rice to indigent families.

“A good cause, a better idea,” MVP said of the rice bucket challenge presented by Lim.

Drawing inspiration from the viral Ice Bucket Challenge that seeks to raise funds and awareness for amyotrophic lateral sclerosis or Lou Gehrig’s disease, the rice bucket challenge was started in India to encourage people to donate a bucket of rice to the less privileged.

MVP and Lim are currently hatching a potential partnership in rice production, which is in line with the First Pacific group’s increasing focus on agriculture and commodities. “Discussion (is) going on,” Lim said.

By the way, the rice bucket challenge has no need for participants to pour rice over their heads. However, it requires the posting of picture of the participant handing over the uncooked bucket of rice meant for the needy and tagging other people to take up the challenge.–Doris C. Dumlao and Tina Arceo-Dumlao

Alpha’s offer

Using a narrowing leeway for minority shareholders to exit, soon-to-be delisted Alphaland Corp. has set a tender offering to acquire all shares held by small investors at P9.03 apiece. The tender offer by the property development firm of businessman Roberto V. Ongpin will run from Sept. 17 until Oct. 15 this year.

The duty to buy the shares has been devolved to subsidiary Alphaland Development Inc. because it does not have sufficient unrestricted retained earnings to acquire the shares. Some 2.99 million common shares held by minority shareholders are covered by the tender offer. Tower Securities Inc. was mandated as the transaction broker.–Doris C. Dumlao

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).

Up 7.1% to $2.3 B: OFW Remittances sustain robust growth in July
By Ted P. Torres (The Philippine Star) | Updated September 16, 2014 - 12:00am 0 17 googleplus0 0

MANILA, Philippines - Remittances from overseas Filipinos continued to grow robustly, expanding 7.1 percent to $2.3 billion last July, data released by the Bangko Sentral ng Pilipinas (BSP) yesterday showed.

For the first seven months of the year, remittances grew 6.4 percent to $15 billion.

The BSP attributed the consistent growth to the steady increase in remittance flows from both land-based workers with long-term contracts (up five percent), and sea-based and land-based workers with short-term contracts (up 8.4 percent).

The remittance growth came as demand for skilled Filipinos abroad remained stable.

Bulk of cash remittances (about 79 percent) came from the United States, Saudi Arabia, the United Arab Emirates, the United Kingdom, Singapore, Japan, Canada and Hong Kong.

However, major banks with strong remittances businesses said the real bulk of international money transfers came from the Middle East, as a lot of remittances are booked through the US but originated from other destinations like the Middle East and North Africa.

Latest data from the Philippine Overseas Employment Administration (POEA) showed that for January-July 2014, job orders reached 540,037, of which 41.1 percent were processed job orders intended for service, production, and professional, technical and related employment in Saudi Arabia, the United Arab Emirates, Kuwait, Taiwan and Qatar.

* Meanwhile, cash remittances coursed through banks (also referred to as the formal sector) grew six percent year-on-year to $2.1 billion in July 2014.

This brought cash remittances for the seven-month period to $13.5 billion, higher by 5.8 percent than the $12.7 billion in the comparable period in 2013.

In particular, cash remittances from land-based and sea-based workers rose five percent (to $10.3 billion) and 8.5 percent (to $3.2 billion), respectively.

Remittances in 2013 grew 7.6 percent to hit a record $25.1 billion, and is forecast to grow at least seven percent this year.

Based on World Bank statistics, global remittance flows is forecast to reach $559 billion this year from $529 billion in 2013.

East Asia and the Pacific and South Asia are the top remittance regions with similar $117 billion in 2013. East Asia and the Pacific is forecast to account for $130 billion this year, while South Asia would likely report international money transfers worth $127 billion.

Last year, the top five remittance countries were India, China, the Philippines, Mexico and Egypt.

INQUIRER EDITORIAL

PAL saga’s interesting turn Philippine Daily Inquirer12:40 am | Monday, September 15th, 2014


LUCIO TAN: SPETEMBER 10, 2014 --The Philippines’ second richest man will regain full control of Philippine Airlines by buying back a 49-percent stake from San Miguel, the firms said on Tuesday, in a deal reportedly worth $1 billion. Lucio Tan is to take back the stake he sold to San Miguel two years ago, according to disclosure statements filed with the stock exchange that did not disclose the price. “The two biggest stockholders of Philippine Airlines… signed a joint agreement whereby (San Miguel Corp.) expressed willingness to sell its 49 percent stake to the group of Dr. Lucio Tan,” a San Miguel statement said. PAL Holdings, the airline’s holding company, issued a similar statement.

MANILA --The checkered story of the flag carrier, Philippine Airlines, took another interesting turn last week with full ownership and management reverting to the camp of taipan Lucio Tan.

This development ended a partnership with San Miguel Corp. head honcho Ramon Ang, the aggressive businessman who transformed the beer-based company into the highly diversified conglomerate that it is today.

SMC invested some $500 million in PAL in April 2012 in exchange for a 49-percent stake and full management control. Tan had agreed to a similar partnership for his lucrative Fortune Tobacco Corp., allowing Philip Morris to acquire a 50-percent interest and management control of the company.

In the two years that Ang led PAL, many positive changes happened to Southeast Asia’s oldest airline, and to the local aviation industry in general. First was the naming of a new management team led by Ang as president.

On top of the team’s to-do list was to mend the severely fractured relationship between management and airline workers (the animosity had remained unresolved for decades). Immediately thereafter, an ambitious program was launched to replace PAL’s aging fleet. Deliveries started in the second half of 2013 with 12 Airbus units.

In the third quarter of 2013, the Aquino administration succeeded in having a European ban on flights coming from the Philippines lifted. This allowed PAL to mount flights to London beginning in November.

It was even able to secure a slot in busy Heathrow Airport at no cost to the flag carrier. This airport slot reportedly trades at no lower than $20 million, if one is available. PAL continued its route expansion and, early this year, it launched flights to the Middle East, home to millions of overseas Filipino workers.

A major milestone in the local aviation sector was marked in the second quarter of 2014—the upgrade of the Philippines to Category 1 status by the US Federal Aviation Administration. It allowed the full utilization of PAL’s Boeing B777 to the United States starting in May. The aircraft, before the FAA upgrade, resulted in losses of $31.9 million in 2013.

Also this year, PAL added flights in premium profitable markets. It increased flights to Japan and secured slots at the Haneda Airport in Tokyo and opened Canadian routes that are now among the top five PAL earners.

Last June, PAL also sealed a cooperation agreement with United Arab Emirates flag carrier Etihad, giving it more access to the Middle East market and connectivity to the rest of Europe, as well as synergies in the use of common facilities, front-desk offices at airport terminals and business lounges.

Only recently, PAL obtained approval for the use of the Russian overflight, cutting down flying hours to London by as much as two hours per trip.

* In marketing, Ang’s team successfully completed the “One Brand” strategy this year (with the slogan “one face, one system, one quality”) to create a sustained positive image for both PAL and PAL Express.

All domestic flights were moved to PAL Express for focus and to avoid overlaps and what businessmen call cannibalization. As a result, PAL Express became profitable this year.

Another management strategy was “the right plane for the right destination,” which implemented standards on fuel load per type of aircraft per destination.

PAL noted that this significantly reduced technical stops on the US flights and resulted in savings of about $1 million a month. Fuel accounts for about 60 percent of the airline’s total cost.

All these were reflected in PAL’s financial statements. The adjusted comprehensive loss for the fiscal year ending March 2012 of $130.1 million was brought down to $122.6 million in fiscal year 2013, and further to $30.89 million as of December 2013 (first nine months of its fiscal year from April 2013).

In the first half of 2014, operations turned around with an adjusted comprehensive income of $7.62 million.

These indications suggest that SMC’s entry into PAL, with Ang at its helm, was a good thing indeed.

Tan’s group has hopefully learned something on how to keep the airline operating efficiently, profitably—and harmoniously with labor.

At this point in the airline’s corporate life, going back to the old style of management will do PAL more harm than good.


Chief News Editor: Sol Jose Vanzi

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