BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)

PCCI URGES P-NOY TO PRIORITIZE EXPANSION OF SUBIC, BATANGAS PORT


JUNE 30 ---Alfredo M. Yao, President of the PCCI  The business community hopes President Aquino will finally put to rest the port congestion issue by making a priority the expansion of Subic and Batangas international ports before his term ends next year. Alfredo M. Yao, President of the Philippine Chamber of Commerce and Industry, (PCCI) said the resolution of the port congestion at the Manila ports tops its wish list of priority issues that they want President Aquino to make a policy statement during his last State of the Nation Address this month. “The port operation has improved a lot but sooner or later we will be hounded again by port congestion,” said Yao. Trade volume is expected to pick at the start of the second semester and with the robust economic growth, Yao expects congestion to be back again this year. The port congestion that hit the Manila port last year has caused considerable damage to businesses in the country and potential economic potentials. READ MORE...

ALSO: IMF queries budget credibility under PNoy


JULY 2 ---The International Monetary Fund (IMF) has taken issue on the transparency of the budgeting system under the Aquino administration despite the frequent spin of Budget Secretary Florencio “Butch” Abad, also the Liberal Party (LP) chief strategist, of reforms to make public funds open and accountable. In its report “Philippines: Fiscal Transparency Evaluation” which it released yesterday, the IMF indicated “budget credibility is undermined by the complexity and large flexibility of the annual budget framework.” It noted that the Philippines’ budget system has an unusually large amount of complexity and flexibility built into it.  “To some extent, this reflects the specific challenges the country faces, such as the frequency of natural disasters that require quick responses from the state. Also, at times difficult relationship between the Executive and Congress has delayed budget approval beyond the timeline envisaged by the Constitution and made the passage of supplementary budget legislation cumbersome. As a result, the annual budget law has become an imperfect indicator of the government’s priorities for resource allocation and service delivery, as budget outturns differ noticeably from the budget law,” the IMF added. READ MORE...

ALSO: Bare all guarantees, IMF tells Aquino govt


JULY 1 ---The International Monetary Fund said the Philippines hasn’t reported all its financial guarantees and urged the government to properly disclose its obligations.
Authorities have issued non-central bank guarantees equal to 47 percent of gross domestic product but have only reported those equal to 31 percent of GDP, the IMF said in its Fiscal Transparency Evaluation report prepared by a staff team based on information as of May 2014. “There is a range of other guarantees on issue that could cause a problem,” the IMF said in the report released June 30, citing guarantees to homeowners by state agencies and on old private-partnership projects. The mission discovered additional obligations through an incomplete survey of state-owned companies’ annual reports, it said. The Finance Department didn’t immediately respond to a request for comment on the IMF report. Still, President Benigno Aquino’s efforts to boost fiscal transparency are beginning to bear fruit, the IMF said. Since taking office in 2010, Aquino has undertaken closer scrutiny of spending plans and has cut the validity of most project approvals to one year from two. The government should survey all agencies and state-owned companies on outstanding contractual guarantees and create a regularly updated guarantee register, the IMF said. Issuance of guarantees should be considered within the budget process with a ceiling covering domestic and foreign currency guarantees, it said. READ MORE...

ALSO WORLD News:
Greece's bailout expires, country defaults on IMF payment


JULY 1 ---The word "NO", referring to the upcoming referendum, is written in red paint outside the Athens Academy building on Tuesday, June 30, 2015. Greek Finance Minister Yanis Varoufakis confirmed that the country will not make its payment due later to the International Monetary Fund. Capital controls began Monday and will last at least a week, an attempt to keep the banks from collapsing in the face of a nationwide bank run. AP Photo/Petros Giannakouris
ATHENS — Greece slipped deeper into its financial abyss after the bailout program it has relied on for five years expired at midnight Tuesday and the country failed to repay a loan due to the International Monetary Fund, deepening fears over whether it will be able to remain in the eurozone.
With its failure to repay the roughly 1.6 billion euros ($1.8 billion) to the IMF, Greece became the first developed country to fall into arrears on payments to the fund. The last country to do so was Zimbabwe in 2001. After Greece made a last-ditch effort to extend its bailout, eurozone finance ministers decided in a teleconference late Tuesday night that there was no way they could reach a deal before the deadline. "It would be crazy to extend the program," said Dutch Finance Minister Jeroen Dijsselbloem, who heads the eurozone finance ministers' body known as the eurogroup. "So that cannot happen and will not happen."  "The program expires tonight," Dijsselbloem said. READ MORE...

ALSO: World's first 'airport resort' to be built on Filipino island of Cebu; plans were announced today


JUNE 29 ---The construction of the new terminal is expected to be completed by 2018 It is claimed project will boost passenger capacity from 8 million per year By EMILY PAYNE FOR MAILONLINE PUBLISHED: 09:44 GMT, 29 June 2015 | UPDATED: 10:19 GMT, 29 June 2015
Last week TripAdvisor launched their airport section - a chance for the public to say what they really think about the world's airports - and coming in 2018 is a project the site's reviewers will really be able to get their teeth into. Introducing the world's first airport resort. Built in Mactan, on the Philippino island of Cebu, plans for the project were announced today. The brain child of GMR-Megawide Cebu Airport Corporation (GMCAC), it's claimed that the new terminal will boost the airport's passenger capacity to 12.5 million per year from the current 4.5 million. Scroll down for video An artist's impression of the Mactan-Cebu International Airport's 'resort' for completion in February 2018 +3 An artist's impression of the Mactan-Cebu International Airport's 'resort' for completion in February 2018 A vision of Mactan-Cebu airport's brand new terminaL. Last April, GMCAC signed a 25-year concession agreement to manage and refurbish the Mactan-Cebu International Airport (MCIA). As well as building the new 'resort hotel' which is due for completion in February 2018, the agreement covers the renovation of the existing passenger terminal building, slated to be completed in 2019. READ MORE...

ALSO from Philstar: Elitism in Phl banks; PWDs’ plight in BPOs


JULY 4 ---Banking sector still beyond the reach of Filipino masses The Philippine banking system, no matter its stated goal of achieving widespread financial inclusion, remains an elitist system in which the greater number of Filipinos with the greatest need for financial services remains effectively excluded. BUSINESS MIRROR NewsTop Newsby Bianca Cuaresma - June 28, 2015 0 167 This week the P14.12-trillion Philippine banking system was the subject of news reports in two contrasting lights.
On the one hand, Philippine banks — particularly the big universal and commercial banks — were praised for being well capitalized and “among the most best-placed [in Southeast Asia] to cope with new international regulations designed to protect economies from weaknesses coming from the [global] financial sector.” On the other hand, the banking system was criticized as “an elitist system in which the greater number of Filipinos, with the greatest need for financial services, remains effectively excluded.”  The paean came from credit-rating firm Moody’s Investor Service. It cited Philippine banks (under Bangko Sentral ng Pilipinas regulation) for exceeding the global norm of 6% minimum and 8% overall capital adequacy ratio — a buffer against potential losses — set by the Basel III regime. Philippine banks maintain 7.5% minimum and 10% overall ratios. READ MORE...

ALSO STANDARD EDITORIAL: Isolating Greece


JULY 3 ---Greece’s inability to pay its debt to the International Monetary Fund is a reminder of how the economies of the Philippines and other heavily-indebted countries suffered before turning the corner.
The Philippines in 1983 defaulted on its foreign debt shortly after the assassination of opposition leader Benigno Aquino Jr. The country then was running out of foreign reserves to pay banks and other creditors. No bank was willing to extend financial assistance to the Philippines, unless it took the bitter pill to revive the ailing economy. That meant, among others, putting an end to a regime of subsidies, floating the peso, raising interest rates to curb a spiraling inflation and increasing revenues or taxes to fund state expenditures. Fixing the fiscal house is paramount to the IMF. With no added revenues, any government will not function well in providing basic services to its people. New sources of foreign funds, aside from credits, must also be identified to correct the weakness in the balance of payments. Foreign investors will start coming in if they see fiscal discipline and a stable economic environment that starts with a manageable inflation regime. But first things first. A troubled government must first obtain the proverbial seal of good housekeeping from the IMF. A go-signal from the IMF will trigger the release of much-needed foreign loans and prompt foreign investors to place their bets again on the ailing economy. READ MORE...


READ FULL MEDIA REPORTS HERE:

PCCI urges PNoy to prioritize the expansion of Subic, Batangas ports


Alfredo M. Yao, President of the PCCI 

MANILA, JUNE 29, 2015 (MANILA BULLETIN) by Bernie Magkilat June 30, 2015 -The business community hopes President Aquino will finally put to rest the port congestion issue by making a priority the expansion of Subic and Batangas international ports before his term ends next year.

Alfredo M. Yao, President of the Philippine Chamber of Commerce and Industry, (PCCI) said the resolution of the port congestion at the Manila ports tops its wish list of priority issues that they want President Aquino to make a policy statement during his last State of the Nation Address this month.

“The port operation has improved a lot but sooner or later we will be hounded again by port congestion,” said Yao. Trade volume is expected to pick at the start of the second semester and with the robust economic growth, Yao expects congestion to be back again this year.

The port congestion that hit the Manila port last year has caused considerable damage to businesses in the country and potential economic potentials.

READ MORE...

Yao stressed that the port congestion is a vicious cycle that come again and again if it is not addressed.

Yao would like the government to have the will to push for the expansion of the Batangas International Port, which is being operated by the Asian Terminals Inc.

If the capacity of the port is expanded all import and export cargo volume from and into the south should use the Batangas port rather than going to the Manila port and subject themselves to the burgeoning traffic of the city.

Expansion of the Subic ports, where the International Container Terminal Services Inc. has existing operations, need to be further enhanced.

It should be easier though to expand Subic because the Subic Bay Metroplitan Authority, which runs Subic freeport, is à government agency.

Subic port should be the main port for businesses operating in the northern part of Luzon, Yao stressed.

“At present, we are all relying on Manila ports and that is so inefficient,” he added.

“Government should come in and exercise its political will,” said Yao.

Aside from the port congestion issue, the PCCI also hopes the President to push for the enactment into law the long overdue Customs and Tariff Modernization Act among other priority bills pending in Congress.


TRIBUNE

IMF queries budget credibility under Noy
Written by Chito Lozada Thursday, 02 July 2015 00:00



The International Monetary Fund (IMF) has taken issue on the transparency of the budgeting system under the Aquino administration despite the frequent spin of Budget Secretary Florencio “Butch” Abad, also the Liberal Party (LP) chief strategist, of reforms to make public funds open and accountable.

In its report “Philippines: Fiscal Transpa-rency Evaluation” which it released yesterday, the IMF indicated “budget credibility is undermined by the complexity and large flexibility of the annual budget framework.”

It noted that the Philippines’ budget system has an unusually large amount of complexity and flexibility built into it.

“To some extent, this reflects the specific challenges the country faces, such as the frequency of natural disasters that require quick responses from the state.

Also, at times difficult relationship between the Executive and Congress has delayed budget approval beyond the timeline envisaged by the Constitution and made the passage of supplementary budget legislation cumbersome. As a result, the annual budget law has become an imperfect indicator of the government’s priorities for resource allocation and service delivery, as budget outturns differ noticeably from the budget law,” the IMF added.

READ MORE...

“While this has not affected macroeconomic and fiscal policy outcomes over the last few years — to the contrary, the authorities’ fiscal policy stance has been prudent and resulted in highly positive public debt dynamics — this could rapidly change should the political or external environment become less favorable,” it added.

The issues raised by the IMF were similar to those which the Supreme Court had raised on the Disbursement Acceleration Program (DAP) in which it ruled that Palace acts that created it through juggling of funds from the budget were unconstitutional.
On the budget structure, the IMF said “consistent with good practice, expenditure cannot be obligated without appropriations authorized by Congress.”
It said the structure of the budget is complex, as it encompasses a large number of earmarking, special purpose funds, and automatic appropriations permanently authorized by other laws.

On available appropriations in excess of initial budget assumptions, the IMF said total spending (obligations) during a fiscal year may deviate significantly from the initial budget assumptions.

“Available appropriations continuously exceed the obligation program, since unobligated appropriations from the previous year can to some extent be carried over and a so-called Unprogrammed Fund is available to be released during the year under pre-defined circumstances,” it said.

“In 2012, the government released half of the authorized fund, increasing the obligation program by more than four percent,” it added.

On flexibility during execution, the IMF said the Executive has considerable leeway in shaping both the allocation and composition of expenditure through four channels.

“First, the President can reallocate appropriations between agencies to a large extent.

Second, appropriations are gradually released to departments by the Department of Budget and Management (DBM), based on its assessment of whether the government will be able to meet its overall fiscal deficit target, implying that spending entities cannot initially access all their programmed appropriations.

Third, the Unprogrammed Fund and continuing appropriations can be released. And fourth, some other budget lines (related to Special Purpose Funds and some other appropriations) are transferred to the main budget lines of government agencies during the year for implementation,” the IMF said.

The IMF said that while large contingencies help build a buffer against shocks such as natural disasters, an ability to expand the spending envelope significantly beyond the fiscal policy objectives entails risks to macroeconomic stability and the achievement of development objectives.


“This is even the case when safeguards appear to be in place, such as access criteria or linking additional appropriations to the availability of revenue or financing,” it added.


The report said improvements are needed in a few areas, “especially to capture of risks from guarantees and PPPs (Private-Public Partnership) programs, assess the scope of tax expenditures, and introduce a longer-term perspective in the fiscal sustainability analysis.


MANILA STANDARD

Bare all guarantees, IMF tells Aquino govt By Karl Lester M. Yap | Jul. 01, 2015 at 11:01pm

The International Monetary Fund said the Philippines hasn’t reported all its financial guarantees and urged the government to properly disclose its obligations.

Authorities have issued non-central bank guarantees equal to 47 percent of gross domestic product but have only reported those equal to 31 percent of GDP, the IMF said in its Fiscal Transparency Evaluation report prepared by a staff team based on information as of May 2014.

“There is a range of other guarantees on issue that could cause a problem,” the IMF said in the report released June 30, citing guarantees to homeowners by state agencies and on old private-partnership projects.

The mission discovered additional obligations through an incomplete survey of state-owned companies’ annual reports, it said.

The Finance Department didn’t immediately respond to a request for comment on the IMF report.

Still, President Benigno Aquino’s efforts to boost fiscal transparency are beginning to bear fruit, the IMF said. Since taking office in 2010, Aquino has undertaken closer scrutiny of spending plans and has cut the validity of most project approvals to one year from two.

The government should survey all agencies and state-owned companies on outstanding contractual guarantees and create a regularly updated guarantee register, the IMF said. Issuance of guarantees should be considered within the budget process with a ceiling covering domestic and foreign currency guarantees, it said.

READ MORE...

The IMF, however, cited the government’s public financial management reform strategy, which has helped initiate a wide variety of reforms, which are beginning to bear fruit.”

“In light of this, the evaluation against the 36 principles of the draft Fiscal Transparency Code… is broadly favorable. Fiscal reporting is relatively comprehensive, frequent and timely, with many areas of good and advanced practices,” IMF said.

It said the coverage of public sector units’ stocks and flows was well-developed. However, it said the coverage of the public sector as a whole lacks consolidated data for the public sector and general government sub-sectors.

“Comparability of fiscal data from various reports and of budget out-turns against the original budget is not always possible, reflecting a fragmentation of agencies involved,” it said.

It also said that while audits of individual agencies’ financial reports were undertaken, there was no separate independent audit of the consolidated Annual Financial Reports, which is different from the international practice. With Julito G. Rada


PHILSTAR

Greece's bailout expires, country defaults on IMF payment By Elena Becatoros and Derek Gatopoulos (Associated Press) | Updated July 1, 2015 - 3:56pm 0 1 googleplus0 0


The word "NO", referring to the upcoming referendum, is written in red paint outside the Athens Academy building on Tuesday, June 30, 2015. Greek Finance Minister Yanis Varoufakis confirmed that the country will not make its payment due later to the International Monetary Fund. Capital controls began Monday and will last at least a week, an attempt to keep the banks from collapsing in the face of a nationwide bank run. AP Photo/Petros Giannakouris

ATHENS, Greece — Greece slipped deeper into its financial abyss after the bailout program it has relied on for five years expired at midnight Tuesday and the country failed to repay a loan due to the International Monetary Fund, deepening fears over whether it will be able to remain in the eurozone.

With its failure to repay the roughly 1.6 billion euros ($1.8 billion) to the IMF, Greece became the first developed country to fall into arrears on payments to the fund. The last country to do so was Zimbabwe in 2001.

After Greece made a last-ditch effort to extend its bailout, eurozone finance ministers decided in a teleconference late Tuesday night that there was no way they could reach a deal before the deadline.

"It would be crazy to extend the program," said Dutch Finance Minister Jeroen Dijsselbloem, who heads the eurozone finance ministers' body known as the eurogroup. "So that cannot happen and will not happen."

"The program expires tonight," Dijsselbloem said.

READ MORE...

The brinkmanship that has characterized Greece's bailout negotiations with its European creditors and the IMF rose several notches over the weekend, when Prime Minister Alexis Tsipras announced he would put a deal proposal by creditors to a referendum on Sunday and urged a "No" vote.

The move increased fears the country could soon fall out of the euro currency bloc and Greeks rushed to pull money out of ATMs, leading the government to shutter its banks Monday and impose restrictions on banking transactions for at least a week. Greeks are now limited to ATM withdrawals of 60 euros ($67) a day and cannot send money abroad or make international payments without special permission.

But in a surprise move late Tuesday, Deputy Prime Minister Yannis Dragasakis hinted that the government might be open to calling off the popular vote, saying it was a political decision.

The government decided on the referendum, he said on state television, "and it can make a decision on something else." It was unclear, however, how that would be possible as Parliament has already voted for it to go ahead.

With its economy teetering on the brink, Greece suffered its second sovereign downgrade in as many days when the Fitch ratings agency lowered it further into junk status, to just one notch above the level where it considers default inevitable.

The agency said the breakdown of negotiations "has significantly increased the risk that Greece will not be able to honor its debt obligations in the coming months, including bonds held by the private sector."

Fitch said it now considered a default on privately-held debt "probable."

Hopes for an 11th-hour deal were raised when the Greek side announced it had submitted a new proposal Tuesday afternoon, and the eurozone's 19 finance ministers held a teleconference to discuss it.

But those hopes were quickly dashed.

German Chancellor Angela Merkel said she ruled out further negotiations with Greece before Sunday's popular vote on whether to accept creditors' demands for budget reforms.

"Before the planned referendum is carried out, we will not negotiate over anything new," the dpa news agency quoted Merkel as saying.

Greece's latest offer involved a proposal to tap Europe's bailout fund — the so-called European Stability Mechanism, a pot of money set up after Greece's rescue programs to help countries in need.

Tsipras' office said the proposal was "for the full coverage of (Greece's) financing needs with the simultaneous restructuring of the debt." It did not provide details.

Dijsselbloem said the finance ministers would "study that request as we should" and that they would hold another conference call Wednesday.

Dragasakis, the Greek deputy prime minister, said the country's new proposal "narrows the differences further."

"We are making an additional effort," he said. "There are six points where this effort can be made. I don't want to get into specifics. But it includes pensions and labor issues."

European officials and Greek opposition parties have been adamant that a "No" vote on Sunday will mean Greece will leave the euro and possibly even the EU.

The government says this is scaremongering, and that a rejection of creditor demands will mean the country is in a better negotiating position.

In Athens, more than 10,000 "Yes" vote supporters gathered outside parliament despite a thunderstorm, chanting "Europe! Europe!"

Most huddled under umbrellas, including Athens resident Sofia Matthaiou.

"I don't know if we'll get a deal. But we have to press them to see reason," she said, referring to the government. "The creditors need to water down their positions too."

The protest came a day after thousands of government supporters advocating a "No" vote held a similar demonstration.

On Monday, European Commission President Jean-Claude Juncker made a new offer to Greece. Under that proposal, Tsipras would need to accept the creditors' proposal that was on the table last weekend. He would also have to change his position on Sunday's referendum.

Commission spokesman Margaritis Schinas said the offer would also involve unspecified discussions on Athens's massive debt load of over 300 billion euros, or around 180 percent of GDP. The Greek side has long called for debt relief, saying its mountainous debt is unsustainable.

A Greek government official said Tsipras had spoken earlier in the day with Juncker, European Central Bank chief Mario Draghi and European Parliament president Martin Schulz.

Meanwhile, missing the IMF payment means Greece is cut off from new loans from the organization. And with its bailout program expiring, Greece will lose access to more than 16 billion euros ($18 billion) in financial support it has not yet tapped.

On the streets of Athens, long lines formed again at ATM machines as Greeks struggled with the new restrictions on banking transactions.

The elderly have been hit particularly hard, with tens of thousands of pensions unpaid as of Tuesday afternoon. Many also found themselves completely cut off from any cash as they do not have bank cards.

The finance ministry said it would open about 1,000 bank branches across the country for three days beginning Wednesday to allow pensioners without bank cards to make withdrawals. But the limit would be set at 120 euros for the whole week.


DAILY MAIL.UK.COM

World's first 'airport resort' to be built on Filipino island of Cebu; plans were announced today By EMILY PAYNE FOR MAILONLINE PUBLISHED: 09:44 GMT, 29 June 2015 | UPDATED: 10:19 GMT, 29 June 2015


The construction of the new terminal is expected to be completed by 2018 It is claimed project will boost passenger capacity from 8 million per year By EMILY PAYNE FOR MAILONLINE PUBLISHED: 09:44 GMT, 29 June 2015 | UPDATED: 10:19 GMT, 29 June 2015

Last week TripAdvisor launched their airport section - a chance for the public to say what they really think about the world's airports - and coming in 2018 is a project the site's reviewers will really be able to get their teeth into.

Introducing the world's first airport resort. Built in Mactan, on the Philippino island of Cebu, plans for the project were announced today.

The brain child of GMR-Megawide Cebu Airport Corporation (GMCAC), it's claimed that the new terminal will boost the airport's passenger capacity to 12.5 million per year from the current 4.5 million.

Scroll down for video An artist's impression of the Mactan-Cebu International Airport's 'resort' for completion in February 2018 +3 An artist's impression of the Mactan-Cebu International Airport's 'resort' for completion in February 2018 A vision of Mactan-Cebu airport's brand new terminal

As well as building the new 'resort hotel' which is due for completion in February 2018, the agreement covers the renovation of the existing passenger terminal building, slated to be completed in 2019.

In a promotional video (URL below), the airport claims it 'feels like a resort' that it's 'not just a gateway, it's a destination' and invites guests to extend their holidays by hour hours earlier or later to make the most of its facilities. After a five month delay, the construction of the new terminal will finally start on June 30.


After a five month delay, the improvement of the Mactan-Cebu International Airport will start this month

After a five month delay, the improvement of the Mactan-Cebu International Airport will start this month 'It will not only cement our place on the global map as a major tourist and business destination, it will boost the local economy and is projected to generate jobs especially in Cebu,' said Department of Transportation and Communications Secretary Joseph Emilio Abaya in a statement.

Improvements to the airport have already started taking place, including a new security check system to speed up the processing time for departing guests, additional check-in, immigration counters and waiting areas and redesigning seating areas.

The MCIA is the second busiest airport in the Philippines catering to a growing number of tourists to the area and the gateway to the popular Visayas and Mindanao regions in the Philippines.


The Mactan-Cebu International Airport caters to the growing number of tourists to the Philippines' popular Visayas and Mindanao regions.

The Mactan-Cebu International Airport caters to the growing number of tourists to the Philippines' popular Visayas and Mindanao regions TripAdvisor's new airport pages mean airports will now be open to the same raging scrutiny as hotels, attractions and restaurants - following the launch of TripAdvisor's new section devoted to them.

The review website, a platform for all too honest remarks, is now encouraging travellers to rate every detail of their experiences at airports from the shopping, cafes and restaurants, and airline lounges.

wo hundred global airports will be listed on the pages, which TripAdvisor says will allow the public to rate the amenities as well as find the cheapest flights to that airport

WATCH VIDEO PROMO: >>>>> http://goo.gl/AmSMXR
Last April, GMCAC signed a 25-year concession agreement to manage and refurbish the Mactan-Cebu International Airport (MCIA). In a promotional video, the airport claims it 'feels like a resort' that it's 'not just a gateway, it's a destination' and invites guests to extend their holidays by hour hours earlier or later to make the most of its facilities.


PHILSTAR OPINION

Elitism in Phl banks; PWDs’ plight in BPOs AT GROUND LEVEL By Satur C. Ocampo (The Philippine Star) | Updated July 4, 2015 - 12:00am 0 2 googleplus0 0


Banking sector still beyond the reach of Filipino masses The Philippine banking system, no matter its stated goal of achieving widespread financial inclusion, remains an elitist system in which the greater number of Filipinos with the greatest need for financial services remains effectively excluded. BUSINESS MIRROR NewsTop Newsby Bianca Cuaresma - June 28, 2015 0 167

This week the P14.12-trillion Philippine banking system was the subject of news reports in two contrasting lights.

On the one hand, Philippine banks — particularly the big universal and commercial banks — were praised for being well capitalized and “among the most best-placed [in Southeast Asia] to cope with new international regulations designed to protect economies from weaknesses coming from the [global] financial sector.”

On the other hand, the banking system was criticized as “an elitist system in which the greater number of Filipinos, with the greatest need for financial services, remains effectively excluded.”

The paean came from credit-rating firm Moody’s Investor Service.

It cited Philippine banks (under Bangko Sentral ng Pilipinas regulation) for exceeding the global norm of 6% minimum and 8% overall capital adequacy ratio — a buffer against potential losses — set by the Basel III regime. Philippine banks maintain 7.5% minimum and 10% overall ratios.

READ MORE...

(However, Philippine banks remain weighed down by P82.816 billion in bad assets they acquired as loan collaterals during the 1997 Asian financial crisis. Standard and Poor’s, another credit-rating outfit, blamed this condition for the banks’ main focus on commercial lending to big companies and trading in treasury notes — but which netted them P32.77-billion profits in the first quarter of 2015.)

The elitist tag emerged from a special report, run by the Business Mirror, based on data provided by the World Bank and BSP. For instance:

• Only 31% of Filipino adults own a bank account, the smallest percentage (called “banking penetration level”) among the five original ASEAN member-states. The comparative figures are: Indonesia, 36%; Thailand, 78%; Malaysia, 81%; and Singapore, 96% (per 2014 World Bank Global Findex Data, released last April).

Such low banking penetration level, the World Bank pointed out, parallels the figures for per capita gross domestic product, with our country chalking up the lowest. The figures are: Philippines, $2,765.1; Indonesia, $3,475.1; Thailand, $5,779; Malaysia, $10,538.1; and Singapore, $55,182.5.

To boost GDP growth and reduce poverty, the International Monetary Fund urged increasing the provision of bank services. This, it added, would boost consumption spending, encourage entrepreneurship and investments by micro, small and medium enterprises, and reduce the recourse to informal lenders at usurious rates.

The Asian Development Bank chimed in, saying: In 2005, almost 2/3 (or 17 million) of poor Filipino families couldn’t access microfinance services – although 4.1 million families engaged in microenterprise activities.

BSP data show that as of end-March 2015, there were 10,456 bank branches and 16,068 automatic teller machines installed in the country. However, 595 municipalities, out of 1,490 (more than 1/3), don’t have banking facilities.

Why haven’t more Filipinos opened bank accounts (even among the so-called middle class, only 30% have accounts)? Per the BSP National Baseline Survey on Financial Inclusion, here are the reasons:

Majority (65.1%) of respondents cited “lack of funds” as the main hindrance; 16.9% said they didn’t need a bank account; 11.2% claimed it’s expensive to maintain one; 9.8% found the minimum deposit balance required too high; 7.6% said the nearest bank was too far away; 4.6% claimed they had no valid IDs; 3.3% said the interest rate was too low; and 2.5% didn’t trust the banks.

The BSP avers that it has begun taking steps to bring banking services to the majority of Filipinos, but hasn’t adopted any timeline for its fulfillment.

***

PWDs (People With Disabilities)

Meantime, I got an emailed request from two co-founders of a social-media group called Call Center Philippines, Alvin Felipe Gultiano and Karl Anthony Marquez.

They are requesting this space to help publicize their letter to the National Council on Disability Affairs calling attention to the plight of call-center/business process outsourcing workers who are persons with disabilities, or PWDs.

Space limitation disallows me from running the full letter, addressed to Carmen Reyes-Zubiaga, NCDA executive director. So let me just cite or paraphrase its salient points:

•Many PWDs have found gainful employment in the BPO industry (no definite number given). An example: Antonio Baradi, who has worked for 10 years and has been promoted to operations manager. His being a PWD “mattered much less than his capacity, talent and skill,” and his success story “continues to inspire other PWDs seeking stable, rewarding and fulfilling employment.”

• But for Antonio and fellow PWDs “going to and from BPO centers is a big struggle since the infrastructure to make their trips easier are not there. Going to office and returning home safely is a big obstacle course for PWDs working in BPOs.”

• To address this problem – by establishing a PWD-friendly environment --, NCDA is urged to coordinate with local government units in areas with high concentration of BPO offices: Metro Manila, Metro Cebu, Bacolod, Baguio, Cagayan de Oro, Clark, Dagupan, Davao, Dumaguete, Iligan, Iloilo, Iriga, Lipa, Naga, Olongapo,Tacloban, Urdaneta, and other cities.

• “Measures like having unobstructed sidewalks, railings, wheelchair-accessible entrances, 1.2-meter-wide ramps, and PWD exits and bathrooms will go a long way in helping improve work and mobility for PWDs working in (BPOs) around the country.” (In fact, Batas Pambansa Blg. 334 and related laws require the provision of such facilities.)

• Furthermore, commercial establishments should adhere to the discounts (20%) and priority access mandated by the Magna Carta for Persons with Disability. After all, the letter pointed out, many businesses benefit from the economic boost of the BPO industry in these cities.


MANILA STANDARD EDITORIAL

Isolating Greece Jul. 03, 2015 at 12:01am

Greece’s inability to pay its debt to the International Monetary Fund is a reminder of how the economies of the Philippines and other heavily-indebted countries suffered before turning the corner.

The Philippines in 1983 defaulted on its foreign debt shortly after the assassination of opposition leader Benigno Aquino Jr. The country then was running out of foreign reserves to pay banks and other creditors. No bank was willing to extend financial assistance to the Philippines, unless it took the bitter pill to revive the ailing economy. That meant, among others, putting an end to a regime of subsidies, floating the peso, raising interest rates to curb a spiraling inflation and increasing revenues or taxes to fund state expenditures.

Fixing the fiscal house is paramount to the IMF. With no added revenues, any government will not function well in providing basic services to its people. New sources of foreign funds, aside from credits, must also be identified to correct the weakness in the balance of payments. Foreign investors will start coming in if they see fiscal discipline and a stable economic environment that starts with a manageable inflation regime.

But first things first. A troubled government must first obtain the proverbial seal of good housekeeping from the IMF. A go-signal from the IMF will trigger the release of much-needed foreign loans and prompt foreign investors to place their bets again on the ailing economy.

READ MORE..

Greece on Tuesday became the first advanced economy to default on an IMF loan payment after Athens failed to reach an agreement with a group of lenders over a bailout program. With little foreign exchange reserves, the populist Greek imposed capital controls, including a limit on cash withdrawals.

Greece can exit the eurozone and try to chart its own economic path. It can refuse the bitter pill and go against the economic prescriptions of the IMF. Through it all, however, Greece will become a pariah in the global banking circle, unless it finds the way to repay its creditors.

The Greek debacle may have little effect on the Philippines and the rest of Asia, which are experiencing an economic boom. But the economic crisis on that part of the world should keep government leaders on their toes. It can still happen to any country that relies heavily on populist policies.


Chief News Editor: Sol Jose Vanzi

© Copyright, 2014 by PHILIPPINE HEADLINE NEWS ONLINE
All rights reserved


PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE