© Copyright, 2015 (PHNO)
 http://newsflash.org

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

SURVEY: MORE FILIPINOS OPTIMISTIC ECONOMY WILL GET BETTER NEXT YEAR
[Even if fewer thought their lives improved in the past year, the latest Social Weather Stations survey showed.]


AUGUST 4 --Filipino Victor San Miguel pats his dog named “Polgoso” as he takes a break after working the night shift at their tire repair shop in Manila, on Tuesday, July 21, 2015. More Filipinos are optimistic the economy will get better next year, even as fewer thought their lives improved in the past year, the latest Social Weather Stations survey showed. AP PHOTO/AARON FAVILA
More Filipinos are optimistic the economy will get better next year, even as fewer thought their lives improved in the past year, the latest Social Weather Stations (SWS) survey showed. The Second Quarter Social Weather Report, conducted on June 5-8, also showed that the proportion of Filipinos optimistic about the expected change in their quality of life was unchanged from the last quarter. Net optimism about the economy surged from +6 in March (27 percent optimistic, 20 percent pessimistic, rounded) to +15 in June (31 percent optimistic, 15 percent pessimistic). Asked about changes in their quality of life in the last 12 months, the proportion of those who said their lives improved (gainers) slid 4 points to 28 percent (from 32 percent in March), while those who said their lives deteriorated (losers) was at 26 percent (unchanged from March), for a net gainers rating of +3 (down from +6 in March). READ MORE...

ALSO: Proposed 2016 national budget prone to abuse in election year
[There are large lump-sum amounts including suspiciously for local governments]


AUGUST 6 ---There are large lump-sum amounts including suspiciously for local governments Research group IBON said that the proposed 2016 national government budget is vulnerable to abuse in the critical 2016 election year. There are large lump-sum amounts including suspiciously for local governments, as well as an apparent attempt to give the administration greater flexibility to declare savings and transfer funds in the middle of the year. The National Expenditure Program (NEP) submitted by the Aquino administration to Congress has greatly increased the amount of special purpose funds (SPFs). The SPFs are notorious for having large lump-sum amounts that do not undergo congressional or public scrutiny. SPFs increased by a substantial Php61.7 billion to reach Php430.4 billion in the proposed 2016 budget, the group noted. Among the SPF items is a conspicuous 69% increase (Php23.1 billion) in the allocation to local government units (LGUs) to Php56.5 billion. The new SPF for LGUs includes an almost 500% increase (Php15.3 billion) in a so-called local government support fund to Php18.4 billion, from being just Php3.1 billion in 2015. It is widely accepted that LGUs, up to the barangay level, are the base in ensuring electoral victories for national candidates especially in presidential races. The Department of Interior and Local Government (DILG) in particular also has budget items which appear inconsistent with its mandate to promote peace and order, ensure public safety, and strengthen local government capability. The proposed 2016 budget includes Php8.3 billion for DILG housing, water and other community projects that are presumably the purview of other government agencies. This includes Php643 million for housing in the National Capital Region (NCR), Php1.8 billion for water supply projects nationwide, Php1.8 billion for community projects in armed conflict-affected areas, and Php4.1 billion for bottom-up budgeting (BUB) projects for water supply and other projects. Increased SPFs for LGUs and redundant DILG allocations disprove the administration's claim that pork barrel items no longer exist in the national budget, IBON said.THIS IS THE FULL REPORT

ALSO: UNDERSPENDING IS THE FOCUS, NOT THE AMOUNT ---Global Research Report
[The Philippines should not be overly concerned with underspending but should focus on spending on infrastructure, according to the latest Global Research report of Standard Chartered Bank.]


AUGUST 6 --The StanChart report said while the 2015 fiscal deficit has been narrower than in 2013 and 2014, it does not fully agree with the view that more government spending automatically boosts growth. “An increase in government expenditure or the fiscal deficit has not historically correlated with GDP growth for the year or the year after. This implies that how the budget is spent is as important as the amount actually spent or that other drivers matter much more for GDP, such as remittances or the BPO (business process outsourcing) industry,” the report said. “Infrastructure spending is a greater concern. During our visit to Manila in March, we learned that our clients were more concerned about the implementation of investment and infrastructure projects than the external environment, market volatility or other non-economic factors,” it added. The bank also recast lower budget deficit ratio to gross domestic product (GDP) to 0.5 percent from 1.9 percent for the year, much lower than the government’s target of 2 percent. StanChart said a narrower deficit is not necessarily bad for the economy. “Spending quality is also important. Given sufficient fiscal space, focus is now likely to be on how infrastructure spending is executed,” it said. It also noted infrastructure spending has been speeded up, representing 10 to 15 percent of total expenditures. The Philippines’ budget deficit is expected to be at 0.5 percent of GDP by the end of the year, due to strong revenue growth and reduced public debt repayments. “We revise our 2015 budget forecast for the Philippines... We now expect a budget deficit of 0.5 percent of GDP in 2015 (versus previous forecast of 1.9 percent),” the “On the Ground” report stated. READ MORE...

ALSO: 2016 budget lump sums face scrutiny


AUGUST 10 --The House committee on appropriations starts today its deliberations on the proposed P3.002-trillion national budget for 2016. File photo/Ernie Peñaredondo
The House committee on appropriations starts today its deliberations on the proposed P3.002-trillion national budget for 2016 even as anti-corruption watchdogs said they have detected at least P500 billion in lump sum funds that are prone to abuse in an election year. The deliberations in the panel, chaired by Davao City Rep. Isidro Ungab, will start with a briefing by members of the Development Budget Coordinating Committee (DBCC), the inter-agency body that determines the overall economic targets, expenditure levels and budget of the government. Speaker Feliciano Belmonte Jr. earlier said Congress would study the budget proposal well to ensure government programs and their funding are justified. Based on sector, social services will have the biggest allocation of P1.1059 trillion, which is 36.8 percent of the proposed budget. Economic services took the second largest with P829.6 billion or 27.64 percent of the proposed budget, with transport and communications infrastructure getting the bulk. General public services will get P517.9 billion, debt burden P419.3 billion, and interest payment P392.8 billion. Defense will get P129.1 billion to fund the Armed Forces modernization in light of the territorial disputes in the West Philippine Sea. But former national treasurer Leonor Briones, lead convenor of Social Watch Philippines, said red flags were found in the proposed budget – including the P500 billion lump sums, special purpose funds, and un-programmed funds, which President Aquino can use at his discretion. “Since this year and 2016, the budget will be a big influence in the elections – that’s been the practice,” Briones told dzBB. “Of course if you’re the administration and you have a candidate, there’s always the preference for areas where your party is strong or where your candidate is based,” she said, adding regions identified with the opposition are expected to have less from the budget. READ MORE...

ALSO Proposed 2016 budget: billions of PPP funds allotted to support private sector profits
[These cover expenses for right-of-way acquisition and displacement of informal settlers by at least 13 road and expressway projects]


AUGUST 7 --Contrary to Pres. Benigno Aquino's claims that the government is not spending for public-private partnerships (PPPs) and that the private sector is even paying the government, billions of pesos are again allotted for selected PPP projects in the proposed 2016 national budget.
Like in the 2015 budget where funds were allotted to support big business profits, initial estimates made by IBON find that the 2016 National Expenditure Program (NEP) also has some Php65.9 billion allotted for a handful of PPPs implemented by the country's richest corporations. This is an increase from the Php52.7 billion PPP budget in 2015, the research group said. The proposed 2016 budget retains the Php30 billion-risk management program, which is the financial and regulatory risk guarantee to protect private profits against, for instance, disallowed fare hikes. Also maintained is the Php1.6 billion fund for amortization and lease payments on school buildings constructed by Henry Sy's Megawide Construction Corp. and its consortium partners. Moreover, there is a large increase in PPP strategic support funds which go more than double to Php24.8 billion. These cover expenses for right-of-way acquisition and displacement of informal settlers by at least 13 road and expressway projects of or eyed by the Ayala Corporation, San Miguel Corporation, Metro Pacific, Megawide, Aboitiz Equity, JG Summit and a few other big corporations. The 2016 NEP also includes at least Php9.5 billion for various Light Rail Transit (LRT) and Metro Rail Transit (MRT) projects, both of which are privatized or in the middle of privatization. Rail fares were already hiked substantially at the start of the year but additional LRT fare hikes are already being eyed by Metro Pacific and Ayala Corporation, the private sector winners of the LRT Line 1 expansion and operation project.(end) THIS IS THE FULL REPORT

ALSO: PAL to start nonstop Cebu-LA flights in March 2016


AUGUST 7 --Flag carrier Philippine Airlines will launch direct flights between Cebu and Los Angeles, USA, on March 15 next year, a move that increases connectivity while helping ease congestion in Metro Manila. The announcement was made months after PAL revived flights between Manila and New York as it sought to expand in the US. The expansion started after the US Federal Aviation Administration in 2014 restored the Philippines’ Category 1 safety rating after a downgrade six years before. “Our customers in Visayas and Mindanao have long clamored for direct flights between Cebu and the US due to the travel convenience this will bring,” PAL president and chief operating officer Jaime J. Bautista said in a statement.
“One can simply take a short hop to Cebu from any point in the Visayas and Mindanao and connect to Los Angeles, instead of flying all the way to Manila,” he added. “Foreign tourists and our kababayans in the United States will benefit from the flexibility of choice in terms of flights to and from the Philippines.” READ MORE....

ALSO Amaze with numbers: The picture ain’t as bright as BS painted
[According to PCCI president Alfredo Yao, this country is the weakest when it comes to protecting investors. It’s no secret that the wishy-washy policies and the inaction of some government agencies with regard to big-ticket infrastructure projects are turning off investors big-time.]


AUGUST 6 --“Amaze with numbers” must have been the marching order of the writers, who spiced up President BS Aquino’s State of the Nation Address with stats and figures to make it appear like the mewling is set to become a roaring tiger. Senator Bongbong Marcos did not mince words when he said he will do some actual fact check to figure our where or how the president conjured the numbers that he cited, or if the success stories that were presented actually reflect the situation of others. Party list representative Carlos Zarate was even more blunt, calling the administration to task for its “duplicity” and callously insulting the intellectual capacity of the people, and lying—repeat—lying with the “out-of-reality figures” presented during the SONA.
It’s not just the figures that are out of reality, even AVPs where people are singing Hosannas to the programs and accomplishments of the administration. All that drumbeating about the K-12 program turned to be such a dud with the Palace covering up the identity of the person responsible for producing that video where a girl claimed to be a graduate of the K-12 program. As usual, the Palace mouthpieces gave a roundabout answer when it was clear that the video was “so exaj”­—how can anyone claim to be graduate of the K-12 program that requires 13 years to complete when it was just implemented a few years ago? But back to the numbers. Jobs, for instance. It’s hard to understand why Filipinos continue to leave the country to look for decent jobs abroad when things are supposed to be so much brighter now than during the previous administration. And when the president started talking about the huge foreign direct investments that have come in, we were almost waiting for a cock to crow in victory or the yellow crowd to go woot! woot! with the requisite closed fist waving and shaking. READ MORE...


READ FULL MEDIA REPORTS HERE:

Survey: More Filipinos optimistic economy will get better next year


Filipino Victor San Miguel pats his dog named “Polgoso” as he takes a break after working the night shift at their tire repair shop in Manila, on Tuesday, July 21, 2015. More Filipinos are optimistic the economy will get better next year, even as fewer thought their lives improved in the past year, the latest Social Weather Stations survey showed. AP PHOTO/AARON FAVILA

MANILA, AUGUST 10, 2015 (INQUIRER) Inquirer Research - More Filipinos are optimistic the economy will get better next year, even as fewer thought their lives improved in the past year, the latest Social Weather Stations (SWS) survey showed.

The Second Quarter Social Weather Report, conducted on June 5-8, also showed that the proportion of Filipinos optimistic about the expected change in their quality of life was unchanged from the last quarter.

Net optimism about the economy surged from +6 in March (27 percent optimistic, 20 percent pessimistic, rounded) to +15 in June (31 percent optimistic, 15 percent pessimistic).

Asked about changes in their quality of life in the last 12 months, the proportion of those who said their lives improved (gainers) slid 4 points to 28 percent (from 32 percent in March), while those who said their lives deteriorated (losers) was at 26 percent (unchanged from March), for a net gainers rating of +3 (down from +6 in March).

READ MORE...

Personal optimism remained steady at +36 (42 percent optimistic, 6 percent pessimistic) in June, from +37 (42 percent optimistic, 5 percent pessimistic) in March.
Net economic optimism rose across classes: From -2 to +9 among class ABC; from +6 to +15 among class D; and from +9 to +21 among class E.

Across areas, while net optimism about the economy decreased by 7 points in Metro Manila, from +14 in March to +7 in June, it increased by 15 points in Luzon outside Metro Manila (from +2 to +17) and by 14 points in Mindanao (from +5 to +19). It was unchanged in the Visayas (from +13 to +14).

Net gainers by area declined in Metro Manila (from +8 to +2), and in Mindanao (from +7 to -5). It went from +9 to +8 in Luzon outside Metro Manila, while in the Visayas it was at -1 (from -2 in March).

Net gainers by class, on the other hand, likewise dropped by 8 points among class ABC (from +20 to +12) and by 16 points in class E (from +4 to -12), while it remained steady in class D (from +6 to +5).

Across areas, net personal optimism increased in Mindanao to +40 (from +35 in March). It was at +36 in Metro Manila (from +39), at +37 in Luzon outside Metro Manila (from +40), and at +29 in the Visayas (from +28).

Across classes, a significant increase was noted among class E, where it rose 11 points to +39 (from +28 in March). It slid among class ABC to +37 (from +41 in March), and among class D, where it was at +35 (from +38 in March).


IBON OFOUNDATION

Proposed 2016 national budget prone to abuse in election year 6 August 2015 |

There are large lump-sum amounts including suspiciously for local governments

Research group IBON said that the proposed 2016 national government budget is vulnerable to abuse in the critical 2016 election year. There are large lump-sum amounts including suspiciously for local governments, as well as an apparent attempt to give the administration greater flexibility to declare savings and transfer funds in the middle of the year.

The National Expenditure Program (NEP) submitted by the Aquino administration to Congress has greatly increased the amount of special purpose funds (SPFs). The SPFs are notorious for having large lump-sum amounts that do not undergo congressional or public scrutiny. SPFs increased by a substantial Php61.7 billion to reach Php430.4 billion in the proposed 2016 budget, the group noted.

Among the SPF items is a conspicuous 69% increase (Php23.1 billion) in the allocation to local government units (LGUs) to Php56.5 billion. The new SPF for LGUs includes an almost 500% increase (Php15.3 billion) in a so-called local government support fund to Php18.4 billion, from being just Php3.1 billion in 2015. It is widely accepted that LGUs, up to the barangay level, are the base in ensuring electoral victories for national candidates especially in presidential races.

The Department of Interior and Local Government (DILG) in particular also has budget items which appear inconsistent with its mandate to promote peace and order, ensure public safety, and strengthen local government capability. The proposed 2016 budget includes Php8.3 billion for DILG housing, water and other community projects that are presumably the purview of other government agencies.

This includes Php643 million for housing in the National Capital Region (NCR), Php1.8 billion for water supply projects nationwide, Php1.8 billion for community projects in armed conflict-affected areas, and Php4.1 billion for bottom-up budgeting (BUB) projects for water supply and other projects.

Increased SPFs for LGUs and redundant DILG allocations disprove the administration's claim that pork barrel items no longer exist in the national budget, IBON said.


MALAYA

UNDERSPENDING: IT’S THE FOCUS, NOT THE AMOUNT By ANGELA CELIS on August 06, 2015

The Philippines should not be overly concerned with underspending but should focus on spending on infrastructure, according to the latest Global Research report of Standard Chartered Bank.

The StanChart report said while the 2015 fiscal deficit has been narrower than in 2013 and 2014, it does not fully agree with the view that more government spending automatically boosts growth.

“An increase in government expenditure or the fiscal deficit has not historically correlated with GDP growth for the year or the year after. This implies that how the budget is spent is as important as the amount actually spent or that other drivers matter much more for GDP, such as remittances or the BPO (business process outsourcing) industry,” the report said.

“Infrastructure spending is a greater concern. During our visit to Manila in March, we learned that our clients were more concerned about the implementation of investment and infrastructure projects than the external environment, market volatility or other non-economic factors,” it added.

The bank also recast lower budget deficit ratio to gross domestic product (GDP) to 0.5 percent from 1.9 percent for the year, much lower than the government’s target of 2 percent.

StanChart said a narrower deficit is not necessarily bad for the economy. “Spending quality is also important. Given sufficient fiscal space, focus is now likely to be on how infrastructure spending is executed,” it said.

It also noted infrastructure spending has been speeded up, representing 10 to 15 percent of total expenditures.

The Philippines’ budget deficit is expected to be at 0.5 percent of GDP by the end of the year, due to strong revenue growth and reduced public debt repayments.

“We revise our 2015 budget forecast for the Philippines... We now expect a budget deficit of 0.5 percent of GDP in 2015 (versus previous forecast of 1.9 percent),” the “On the Ground” report stated.

READ MORE...

The paper also said StanChart has maintained its 2016 budget deficit forecast of 2 percent of GDP for the Philippines.

Latest government data showed that as of end-May, the government incurred a fiscal surplus of P86.4 billion, 915 percent higher than the P8.5 billion surplus in January to May last year.

Revenues in the five-month period grew by 16 percent to P922.2 billion, while expenditures increase by 6 percent to P835.7 billion.

The Department of Budget and Management said government disbursements in the second quarter are expected to show some improvements compared to the dismal performance in the first three months of the year, which led to a slower GDP growth of 5.2 percent.

The government has been repeatedly criticized for spending below program despite the need for more infrastructure.

The research paper said government spending is expected to pick up in the second semester as the Aquino administration enters its final year in office.

“On a positive note, the government’s financing needs have dropped. We believe this will provide the fiscal room needed for increased spending on social and economic services,” the report stated.

--------------------------------------------------------------

RELATED FROM MANILA STANDARD

Govt expenditures accelerated in June By Gabrielle H. Binaday | Aug. 06, 2015 at 11:50pm

The government incurred a P72.7-billion budget deficit in June as public spending accelerated 17 percent from a year ago, the Finance Department said Thursday.

The agency said the budget shortfall in June was higher by16.3 percent than the P62.5-billion deficit registered a year ago and reversed the consecutive surplus posted in April and May. The June deficit also surpassed the government’s deficit target of P29.21 billion.

“As we close out the first half of the year, we continue to see robust growth trends across the board--be it from the revenue generating agencies or the expenditure side. June shaped up to be a good month for our fiscal story as performance at the BIR [Bureau of Internal Revenue] and the BOC [Bureau of Customs] jumped by double digits,” said Finance Secretary Cesar Purisima.

The agency said despite the June deficit, the government’s budget position still yielded a surplus of P13.7 billion in the first half, in contrast to the P53.97-billion deficit in the same six-month period last year. The government set a deficit target of P155.083 in the first half and P283.7 billion in the whole 2015.

The department said the primary balance, which nets out debt interest payments, ended with a deficit of P53.5 billion in June, or 25 percent higher than P42.9-billion deficit in June last year.

The government, however, recorded a primary balance surplus of P169.9 billion in the first half, up by 61 percent from P105.8 billion a year ago.

READ MORE...

Revenue collection increased 18 percent to P163.6 billion in June while expenditures jumped 17 percent to P236.2 billion. Expenditures during the month also exceeded the P190.75-billion target.

“We are seeing a strong showing on the expenditure side as well, with the 17-percent growth posted this month a high water mark for the year. This reflects the government’s continued commitment to accelerate the use our ample fiscal space for critical investments to our economy and people.” Purisima said.

Budget Secretary Florencio Abad said the improvement in public spending was due to the adoption by government offices of new reforms.

“I think the reason for that uptick is the combination of some of the programs that got matured this quarter and also the measures adopted upon by the very strong instructions coming from the President [Benigno Aquino 3rd] to set up delivery unit to monitor and submit it on the seventh day of the month,” he said.

“We have been working closely with the agencies in the faster movement of the execution of the programs,” Abad said.

Data showed that in the first half, revenues rose 16 percent to P1.08 trillion while public spending increased 9 percent to P 1.072 trillion.

The Bureau of Internal Revenue’s collection in June increased 16.4 percent to P109.6 billion, bringing first-half collection to P705.9 billion, or 10 percent higher than P643.20 billion in the same period last year.

Customs collection grew 15 percent year-on-year to P31.5 billion in June and 3 percent to P178.6 billion in the first half.


PHILSTAR

2016 budget lump sums face scrutiny By Paolo Romero (The Philippine Star) | Updated August 10, 2015 - 12:00am 0 0 googleplus0 0


The House committee on appropriations starts today its deliberations on the proposed P3.002-trillion national budget for 2016. File photo/Ernie Peñaredondo

MANILA, Philippines - The House committee on appropriations starts today its deliberations on the proposed P3.002-trillion national budget for 2016 even as anti-corruption watchdogs said they have detected at least P500 billion in lump sum funds that are prone to abuse in an election year.

The deliberations in the panel, chaired by Davao City Rep. Isidro Ungab, will start with a briefing by members of the Development Budget Coordinating Committee (DBCC), the inter-agency body that determines the overall economic targets, expenditure levels and budget of the government.

Speaker Feliciano Belmonte Jr. earlier said Congress would study the budget proposal well to ensure government programs and their funding are justified.

Based on sector, social services will have the biggest allocation of P1.1059 trillion, which is 36.8 percent of the proposed budget.

Economic services took the second largest with P829.6 billion or 27.64 percent of the proposed budget, with transport and communications infrastructure getting the bulk.

General public services will get P517.9 billion, debt burden P419.3 billion, and interest payment P392.8 billion.

Defense will get P129.1 billion to fund the Armed Forces modernization in light of the territorial disputes in the West Philippine Sea.

But former national treasurer Leonor Briones, lead convenor of Social Watch Philippines, said red flags were found in the proposed budget – including the P500 billion lump sums, special purpose funds, and un-programmed funds, which President Aquino can use at his discretion.

“Since this year and 2016, the budget will be a big influence in the elections – that’s been the practice,” Briones told dzBB.

“Of course if you’re the administration and you have a candidate, there’s always the preference for areas where your party is strong or where your candidate is based,” she said, adding regions identified with the opposition are expected to have less from the budget.

READ MORE...

She warned the administration would embark on various projects, of which many will be “unsustainable” or discontinued after the elections.

Among the lump sum funds reported earlier were the P430.4-billion special purpose funds (SPF), which was increased by P61.7 billion for 2016; the P74.9 billion allocated for local governments (broken down as P56.5 billion for local government units and P18.4 billion for local government support fund); and P8.3 billion for Department of the Interior and Local Government (DILG) projects.

Free debates Ungab encouraged his colleagues to actively participate in the deliberations, pointing out that free and full debates on the proposed budget will be allowed.

“We will focus first on the macro-economic assumptions and the general parameters the administration used in putting together the proposed national budget for next year. After that, we will go into the details – department by department, agency by agency. We hope to do that in the next two to three weeks,” he said.

He hopes the proposed spending program will be presented in plenary and approved on second reading by October.

Invited to today’s hearing were Budget Secretary Florencio Abad, Finance Secretary Cesar Purisima, Economic Planning Secretary Arsenio Balisacan, and Governor Amando Tetangco of the Bangko Sentral ng Pilipinas.

Aside from Purisima, expected to be on hand to answer questions on revenues are Internal Revenue Commissioner Kim Henares and Customs Commissioner Alberto Lina.

On Tuesday, the Philippine Charity Sweepstakes Office and Philippine Amusement and Gaming Corp. will defend their budgets. The Civil Service Commission, Commission on Human Rights and Commission on Audit will take their turn on Wednesday while the Department of Justice (DOJ) and the judiciary will defend their budgets on Thursday.

Leyte Rep. Ferdinand Martin Romualdez, leader of the independent bloc, said they will go over the proposal closely and also seek an accounting of disbursements of discretionary funds in the 2015 General Appropriations Act.

The President had always submitted his budget proposal a day after his State of the Nation Address (SONA) to give the House and the Senate enough time to approve the outlay before the end of the year.

In his SONA on July 27, Aquino said he had always avoided a reenacted budget, which would have given him a lot of discretion over appropriations. The proposed P3.002-trillion budget, titled, “Paggugol na Matuwid: Saligan sa Tuloy-tuloy na Pag-unlad,” is Aquino’s sixth and last spending proposal.

Abad said the 2016 budget “consolidates all the reforms started in 2010 and sets a firm foundation for the continuity of reforms beyond this administration.”

“The fiscal position for FY (fiscal year) 2016 will translate to an obligation budget ceiling of P3 trillion, up by P394 billion or 15.1 percent more than the FY 2015 budget of P2.606 trillion,” he said.

Of the P3-trillion outlay, he said 80 percent or P2.419 trillion would “be eaten up by the forward estimates or the cost of ongoing programs and projects.”

“This leaves funds available for expanded and new programs and projects of P580.9 billion, nearly one-fifth of the proposed budget ceiling. This additional fiscal space will be directed towards addressing critical funding gaps in various sectors,” he said.

He added that the government expects to collect revenues amounting to P2.697 trillion, 18.5 percent more than estimated total collections this year.

Abad pointed out that public spending would continue to aim to focus on good governance and anti-corruption, ensuing inclusive growth, sustaining the growth momentum, managing disaster risks, and forging just and lasting peace.

The proposed budget is 15.2 percent higher compared to the P2.606-trillion national budget for this year with the DBM saying the programs and projects supporting “rapid, inclusive, and sustainable” growth were given priority.

Government expenditures under the 2016 proposed budget are seen climbing to 19.5 percent of the country’s gross domestic product, higher than the 18.7 percent ratio estimated for this year.

The proposed budget also increased the fiscal space to P580.9 billion for new programs and projects, or double the P287.3 billion allocated this year.


IBON FOUNDATION RESEARCH

Proposed 2016 budget: billions of PPP funds allotted to support private sector profits 7 August 2015 |

These cover expenses for right-of-way acquisition and displacement of informal settlers by at least 13 road and expressway projects

Contrary to Pres. Benigno Aquino's claims that the government is not spending for public-private partnerships (PPPs) and that the private sector is even paying the government, billions of pesos are again allotted for selected PPP projects in the proposed 2016 national budget.

Like in the 2015 budget where funds were allotted to support big business profits, initial estimates made by IBON find that the 2016 National Expenditure Program (NEP) also has some Php65.9 billion allotted for a handful of PPPs implemented by the country's richest corporations. This is an increase from the Php52.7 billion PPP budget in 2015, the research group said.

The proposed 2016 budget retains the Php30 billion-risk management program, which is the financial and regulatory risk guarantee to protect private profits against, for instance, disallowed fare hikes. Also maintained is the Php1.6 billion fund for amortization and lease payments on school buildings constructed by Henry Sy's Megawide Construction Corp. and its consortium partners.

Moreover, there is a large increase in PPP strategic support funds which go more than double to Php24.8 billion. These cover expenses for right-of-way acquisition and displacement of informal settlers by at least 13 road and expressway projects of or eyed by the Ayala Corporation, San Miguel Corporation, Metro Pacific, Megawide, Aboitiz Equity, JG Summit and a few other big corporations.

The 2016 NEP also includes at least Php9.5 billion for various Light Rail Transit (LRT) and Metro Rail Transit (MRT) projects, both of which are privatized or in the middle of privatization.

Rail fares were already hiked substantially at the start of the year but additional LRT fare hikes are already being eyed by Metro Pacific and Ayala Corporation, the private sector winners of the LRT Line 1 expansion and operation project.(end)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.


INQUIRER

PAL to start nonstop Cebu-LA flights in March 2016  By: Miguel R. Camus @inquirerdotnet Philippine Daily Inquirer 06:46 AM August 7th, 2015



Flag carrier Philippine Airlines will launch direct flights between Cebu and Los Angeles, USA, on March 15 next year, a move that increases connectivity while helping ease congestion in Metro Manila.

The announcement was made months after PAL revived flights between Manila and New York as it sought to expand in the US. The expansion started after the US Federal Aviation Administration in 2014 restored the Philippines’ Category 1 safety rating after a downgrade six years before.

“Our customers in Visayas and Mindanao have long clamored for direct flights between Cebu and the US due to the travel convenience this will bring,” PAL president and chief operating officer Jaime J. Bautista said in a statement.

“One can simply take a short hop to Cebu from any point in the Visayas and Mindanao and connect to Los Angeles, instead of flying all the way to Manila,” he added. “Foreign tourists and our kababayans in the United States will benefit from the flexibility of choice in terms of flights to and from the Philippines.”

READ MORE...

PAL said the new service would start on its 75th founding anniversary. The thrice-weekly service will use the 254-seater bi-class Airbus A340 with 36 lie-flat seats on business class and 218 seats on regular economy.

The flag carrier operates 35 weekly flights to mainland US and two US territories combined

From Manila, PAL operates 11 weekly flights to Los Angeles, 10 weekly flights to San Francisco and four weekly flights to New York.

PAL has five weekly flights each to Guam and Honolulu. The new US service from Cebu will bring to 38 the total number of frequencies to the US per week.


MANILA STANDARD OPINION

The picture ain’t as bright as BS painted By Boy P. | Aug. 06, 2015 at 11:35pm

“Amaze with numbers” must have been the marching order of the writers, who spiced up President BS Aquino’s State of the Nation Address with stats and figures to make it appear like the mewling is set to become a roaring tiger. Senator Bongbong Marcos did not mince words when he said he will do some actual fact check to figure our where or how the president conjured the numbers that he cited, or if the success stories that were presented actually reflect the situation of others.

Party list representative Carlos Zarate was even more blunt, calling the administration to task for its “duplicity” and callously insulting the intellectual capacity of the people, and lying—repeat—lying with the “out-of-reality figures” presented during the SONA.

It’s not just the figures that are out of reality, even AVPs where people are singing Hosannas to the programs and accomplishments of the administration. All that drumbeating about the K-12 program turned to be such a dud with the Palace covering up the identity of the person responsible for producing that video where a girl claimed to be a graduate of the K-12 program.

As usual, the Palace mouthpieces gave a roundabout answer when it was clear that the video was “so exaj”­—how can anyone claim to be graduate of the K-12 program that requires 13 years to complete when it was just implemented a few years ago?

But back to the numbers. Jobs, for instance. It’s hard to understand why Filipinos continue to leave the country to look for decent jobs abroad when things are supposed to be so much brighter now than during the previous administration. And when the president started talking about the huge foreign direct investments that have come in, we were almost waiting for a cock to crow in victory or the yellow crowd to go woot! woot! with the requisite closed fist waving and shaking.

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Conveniently omitted, of course, is the fact that compared to our Asean neighbors (even those that experienced economic slumps), the Philippines’ $6.2 billion FDI is pathetic. Singapore attracted $67.5; Indonesia had $22.6 billion, Thailand $12.5 billion, Malaysia $10.8 billion, while Vietnam recorded $9. But hey, we beat Cambodia ($1.7 billion) and Myanmar ($946 million, up from the previous $584 million) and Laos with $721 million (up from $427 million)—countries that have just recently opened up and facing big democratic and political challenges.

It’s this weak FDI inflow that has caused a slump in hiring for online jobs, in particular the BPO/IT sector. According to the Monster Employment Index Philippines—a gauge of online job posting activity that records the industries and occupations that show the highest and lowest growth in recruitment activity locally—“slow hiring in the first half of Q2 can be attributed to Philippines’ weak Foreign Direct Investment, where figures have fallen by over 50 percent,” it said.

MEI though is positive that the upcoming elections will boost online hiring activities—which come to think of it, is really expected because more election years always spur more economic activities in almost all sectors/industries—from printing to manufacturing (for give-aways or tokens). Even telcos will see more happy days when the campaign period officially begins (especially because MEI says the telecoms/ISP industry remained stagnant at 0 percent year-on-year).

The Philippine Chamber of Commerce and Industry has also warned about looming slowdowns in FDI inflows, citing the restrictive policies of the government.

According to PCCI president Alfredo Yao, this country is the weakest when it comes to protecting investors. It’s no secret that the wishy-washy policies and the inaction of some government agencies with regard to big-ticket infrastructure projects are turning off investors big-time.

Throw in port congestion, confusing tax regulations, poor transport systems and of course the traffic and you have a surefire formula to make potential investors turn tail and look elsewhere – like Vietnam or Myanmar for example.

And this administration has the nerve to ask us to elect somebody that would continue what it has started?


Chief News Editor: Sol Jose Vanzi

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