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STRONG MACROECONOMIC FUNDAMENTALS BENEFICIAL TO DUTERTE GOVT - MOODY's
[ALSO: Contractualization: Pros and cons]


MAY 24 --Moody’s Investors Service said the administration of incoming president Rodrigo Duterte would benefit from the country’s strong macroeconomic fundamentals.
Moody’s vice president and senior credit officer Christian de Guzman said the victory of Duterte in the May 9 polls would not immediately affect the sovereign credit profile of the Philippines. “The incoming government will be formulating its economic and fiscal strategies against the backdrop of a favorable economic environment,” De Guzman said. De Guzman said the Philippines shows sustained high economic growth while also demonstrating price stability, a robust external payments position and debt consolidation. “We expect broad policy continuity in the country, with regards to economic and fiscal management,” he added. The country’s gross domestic product (GDP) growth accelerated to 6.9 percent in the first quarter from the revised 6.5 percent in the fourth quarter last year amid strong private consumption and robust investments. The country’s economic expansion in the first three months was the fastest beating China’s 6.7 percent, Vietnam’s 5.5 percent, Indonesia’s 4.9 percent and Malaysia’s 4.2 percent. Earlier, BSP Governor Amando Tetangco Jr. said there is no need at the moment to further stimulate the economy after the robust first quarter growth and with the impending rate hike by the US Federal Reserve. READ MORE...ALSO, Contractualization: Pros and cons -by Emmanuel Lopez...ALSO, P-Noy economic team starts transition plan 3...

ALSO: Japan shares G-7 push for inclusive growth with Asia, Africa


MAY 28 -Chadian President Idriss Deby Itno, third left, speaks with Japanese Prime Minister Shinzo Abe, third right, during their talks in Nagoya, central Japan, Saturday, May 28, 2016. Toru Yamanaka/Pool Photo via AP
NAGOYA, Japan — Japanese Prime Minister Shinzo Abe is sharing a push by the Group of Seven advanced industrial nations to promote inclusive growth across the globe in meetings with leaders of seven developing countries.
The bilateral summit meetings with leaders of Bangladesh, Chad, Indonesia, Laos, Papua New Guinea, Sri Lanka and Vietnam in this central Japanese city on Saturday followed a gathering with G-7 leaders after their annual summit, which was held in a nearby seaside resort. Chad's President Idriss Deby was representing the African Union at the meetings in Japan. At that session, the leaders agreed to promote infrastructure development to help boost growth, Japanese officials said. They also voiced their support for the G-7's stance on the need for peacefully settling territorial disputes according to law — a reference to frustrations over China's growing presence in areas of the South China Sea also claimed by its neighbors. Laos, Bangladesh and Papua New Guinea are among the poorest nations in Asia. Vietnam and Indonesia are two of the fastest-growing developing economies. During the summit, Abe expressed strong concern over slowdowns in China and some other emerging economies that have sapped global growth at a time when Japan and European nations are struggling to keep their own recoveries on track. A more than 50 percent plunge in commodity prices was a key signal of the risks to growth, Abe said. "What we are concerned about the most is contraction of the world economy," Abe said Japan has pledged to increase its development assistance, help finance an insurance fund for health emergencies in the developing world and to offer training to thousands of people in the developing world as part of its own contribution to bridging economic disparities. The G-7 meeting also endorsed an effort to help 500 million people in developing countries escape hunger and malnutrition by 2030. READ MORE...

ALSO: By Wilson Flores - Economic growth is not enough, people want social progress and better quality of life


MAY 24 -Why did the “Daang Matuwid” claims of the P-Noy administration face defeat in the polls, despite his annointed successor’s being highly educated, Wharton-trained former investment banker Mar Roxas? Are our government leaders and economists living on another planet? Why did the May 9 referendum on the Noynoy Aquino administration — as the President himself framed it on several occasions including Nov. 16, 2015 at the APEC Summit held in Shangri-La Makati in reply to CNN editor Andrew Steven’s query — result in a resounding political defeat for his “Daang Matuwid” administration, despite his anointed successor being highly educated, Wharton-trained former investment banker Mar Roxas?
Why was the outgoing government repudiated by voters despite six years of decent high economic growth and with P3 trillion per year of state funds to spend or even to give away as Conditional Cash Transfer (CCT), etc.? Why was it not enough that we have good economic growth rate and international credit rating upgrades? What were the shortcomings of the outgoing government which made voters go instead for Davao City Mayor Rody Duterte, the leader who is the exact opposite of the personality, governance style and ideas of our outgoing president P-Noy? What lessons can our new leader learn from the shortcomings of the well-intentioned, personally-not-corrupt President Aquino? READ MORE...

ALSO: Business sentiment bullish after Duterte victory


MAY 28 -BSP deputy governor Diwa Guinigundo said the overall confidence index based on the Business Expectation Survey (BES) improved to 48.7 percent in the second quarter from 41.9 percent in the first quarter. Philstar.com/Aj Bolando
 Business sentiment turned bullish in the second quarter after the landslide victory of Rodrigo Duterte in the presidential elections, results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.
BSP deputy governor Diwa Guinigundo said the overall confidence index based on the Business Expectation Survey (BES) improved to 48.7 percent in the second quarter from 41.9 percent in the first quarter. He pointed out at the time the survey was conducted from April 1 to May 17, respondents had already factored in the results of the May 9 polls. “It is very difficult to say that but I think the numbers will show that the survey was taken from April 1 to May 17 so the election results are already clear that Duterte was a clear winner of the presidential elections,” Guinigundo said. He explained the overall confidence index for the second quarter normally picks up during election years. The confidence index is the percentage of firms that answered in the affirmative less the percentage of firms that answered in the negative. The confidence index rose to 43.9 percent in the second quarter from 39.1 percent in the first quarter during the 2010 presidential elections and to a high of 54.9 percent from 41.5 percent during the 2013 senatorial and local elections.

ALSO: By Babe Romualdez - Federal Republic of the Philippines?


MAY 22 -Babe Romualdez
There is no doubt – first on the agenda of president-in-waiting Rodrigo Duterte is the change in our system into a federal form of government. Whether this federal system would be patterned after the United States, Germany, Canada or Switzerland has yet to be clear. But from day one, the president-elect has been batting for federalism even long before he threw his hat into the presidential race. A Duterte team has already mapped out plans to disseminate information and spread the word about federalism to make people understand what the system is all about. The president-elect has given his team a timetable of two years to push through with this Charter change and submit the proposal either to a referendum or a plebiscite. All the moves indicate the incoming administration is certainly wasting no time, making sure that it will have the needed numbers to push for this systemic change in both houses of Congress, particularly in the Lower House where the impetus is expected to come. Duterte’s PDP-Laban has already formed coalitions with the Nacionalista Party, the Lakas-CMD and the Nationalist People’s Coalition (NPC), with other groups such as the Visayan bloc, the Makabayan bloc and the National Unity Party also expressing their support for the federalism agenda by going behind the bid of Davao del Norte Congressman Pantaleon “Bebot” Alvarez to become the next Speaker. In the Senate, it would most likely be a toss-up between Alan Peter Cayetano or Koko Pimentel for the position of Senate President, given the fact that the current ruling Liberal Party’s number has been diminished following the proclamation of seven non-LP candidates in the 12 winners of the recent senatorial race. NPC’s Tito Sotto is also throwing his hat into the Senate Presidential race. However, sources tell us Koko Pimentel has the support of the presumptive president-elect. Seasoned politicians agree that pushing for Charter change at the start of the Duterte term is the right move for various reasons. For one, this will dispel suspicions that the real agenda is term extension – something that stymied previous efforts to change the Charter during the terms of FVR and Erap Estrada. And as correctly pointed out by them, the shift to a federal form of government needs careful deliberation and will require sufficient time to accomplish considering the structural changes that will happen – not to mention the debates that will ensue. READ MORE...


READ FULL MEDIA REPORTS HERE:

Strong macroeconomic fundamentals beneficial to Duterte government – Moody’s 

MANILA, MAY 30, 2016 (PHILSTAR) By  Lawrence Agcaoili - May 24, 2016 - 12:00am - Moody’s Investors Service said the administration of incoming president Rodrigo Duterte would benefit from the country’s strong macroeconomic fundamentals.

Moody’s vice president and senior credit officer Christian de Guzman said the victory of Duterte in the May 9 polls would not immediately affect the sovereign credit profile of the Philippines.

“The incoming government will be formulating its economic and fiscal strategies against the backdrop of a favorable economic environment,” De Guzman said.

De Guzman said the Philippines shows sustained high economic growth while also demonstrating price stability, a robust external payments position and debt consolidation.

“We expect broad policy continuity in the country, with regards to economic and fiscal management,” he added.

The country’s gross domestic product (GDP) growth accelerated to 6.9 percent in the first quarter from the revised 6.5 percent in the fourth quarter last year amid strong private consumption and robust investments.

The country’s economic expansion in the first three months was the fastest beating China’s 6.7 percent, Vietnam’s 5.5 percent, Indonesia’s 4.9 percent and Malaysia’s 4.2 percent.

Earlier, BSP Governor Amando Tetangco Jr. said there is no need at the moment to further stimulate the economy after the robust first quarter growth and with the impending rate hike by the US Federal Reserve.

READ MORE...

Tetangco said the strong growth in the first quarter was in line with market expectations and builds confidence that the 6.8 to 7.8 percent GDP expansion set by the Cabinet level Development Budget Coordination Committee for this year is achievable.

“This also confirms that policy settings are appropriate right now. We will, however, continue to be mindful, among others, of weather-related developments,” he said.

Agricultural production in the Philippines contracted by 4.53 percent in the first quarter of the year on the back of poor output of the crop and fisheries sector amid the prolonged El Niño and damage caused by typhoons Lando and Nona.

“While El Niño seems to be winding down it could still have residual effects on the crop cycle. In addition we may see the onset of La Niña by midyear,” he said.

Robust growth and the benign inflation environment have allowed the BSP to keep interest rates steady since September 2014. The country’s current monetary policy stance has been kept steady for 13 straight policy-setting meetings since October 2014.

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ALSO FROM PHILSTAR CPMMENTARY

Contractualization: Pros and cons By Emmanuel J. Lopez (philstar.com) | Updated May 27, 2016 - 4:49pm 2 4 googleplus3 2


"The termination of “endo”(end of contract) as a campaign promise of incoming president Rodrigo Duterte will create various repercussions to the Philippine economy." STAR/File

One of the ticklish issues that will confront the Duterte administration when its term finally commences at midday of June 30, 2016 is the continued existence or demise of job contractualization.

Despite several attempts to weed out this very contentious labor scheme, it has remained in effect until now.

The capitalist nature of the outgoing regime has not given emphasis on this supposed anti-poor policy of employment for reasons that may be both beneficial and otherwise to labor matters and stakeholders. But then we also have to acknowledge that many investors deem it wise to put their money in the Philippines because of the relatively cheaper labor cost, which to an extent is brought about by contractualization.

The termination of “endo”(end of contract) as a campaign promise of incoming president Rodrigo Duterte will create various repercussions to the Philippine economy. The labor force especially the proletariat sees endo as a tool of the capitalist to manipulate and exploit the vulnerability of laborers.

The laborers, as an offshoot of prolonged unemployment and uncompetitive nature, would rather accept a below par employment contract without full benefits enjoyed by a regular worker than have no paid employment.

'The termination of “endo”(end of contract) as a campaign promise
of incoming president Rodrigo Duterte will create various repercussions to
the Philippine economy. The labor force especially the proletariat sees endo as a tool
of the capitalist to manipulate and exploit the vulnerability of laborers.'

Although there are legal implications of endo because a company cannot just practice labor contracting wittingly or unwittingly without having in their company a roster of regular employees, it has nonetheless contributed a lot to the total employment and national income by way of short-term employment opportunities.

While endo has deprived many laborers of the opportunity to enjoy the full benefit of being a regular employee, the stringent measure normally applied to a regular applicant is relaxed in favor of an endo worker, resulting in a bigger participation of the entire employment sector.

Cancellation of endo would most likely post stringent requirements for the employers before new regular employees may be hired. Hiring regular employees in favor of contractual employees, we have to admit, entails a lot of costs perhaps more than double than what a contractual employee will get sans benefits.

Although this author would not favor a full implementation of contractualization, but the thought of full cancellation of the same would accelerate the unemployment statistics that we currently have.

Logic tells us that you cannot force the employers to give what they do not have. Much less force them to hire regular employees to fill in job vacancies.

To escape from the responsibility of carrying the load and additional cost of hiring regular manpower, firms would rather overload their current roster of regular employees with work in lieu of hiring regular employees.

'To escape from the responsibility of carrying the load and additional
cost of hiring regular manpower, firms would rather overload their current
roster of regular employees with work in lieu of hiring regular employees.'

This is the most plausible scenario that may transpire if the government will go for the full prohibition of contractualization.

Prudence dictates that contractualization should still exist in a case to case basis but with government regulation to avoid abuses by the employers. Firms in the infancy stage should be allowed to some extent to hire contractual employees until such time that firms can exist on its own and be stable enough to weather the challenges of investment risks.

'Firms in the infancy stage should be allowed to some extent to hire contractual
employees until such time that firms can exist on its own and be stable
enough to weather the challenges of investment risks.'

Unemployment and economic growth

With the current data on unemployment which stands at 5.8 percent, the incoming administration under the leadership of presumptive president Duterte stands to inherit around 3.48 million people who are unemployed.

This practically puts to naught the 6.9 percent GDP growth the country was able to accomplish in the 1st quarter of 2016.

The growth component was mainly consumer-driven fuelled primarily by election spending estimated to be within P10-12 billion. This amount of fund injection created temporary employment opportunities that generated an income that contributed to the 1st quarter growth rate. This, however, is a short-term “economic bliss” that after certain “honeymoon period” will go back to its previous dilemma of exclusive growth, an economy reserved for the ruling oligarchy.

Countless growth have been experienced but the people who consider themselves poor remain unyielding, the number of unemployed remain at more than 3 million. Graft and corruption remain unmoved, putting it in the upper index of most corrupt nations of the world.

Tall order

Despite the tall order that awaits the incoming Duterte regime, the resounding mandate that he received during the last election puts to emphasis the people’s high trust in his leadership. One thing going for the incoming president that perhaps distinguishes him from his predecessor is the fact that he approaches the nation’s problem with “coolness’ and serenity. If you are in this mood, it is most likely you will make a good account of yourself and your decision.

His micro approach to the problem as exemplified by the news item he heard about the group of pushers arrested in Tanauan, Batangas. The pushers were made to parade in the streets as if to imitate the traditional “Flores de mayo” but this time renamed “Flores de Pusher,” for purposes of putting them to shame for their criminal acts.

Perhaps in jest, incoming president Duterte made pronouncements that these people may have been dead if he was in the position of the mayor. His ability to put premium and emphasis even for this simple police matters if he continues doing it during his term, will endear him to people. It shows that he does not want himself isolated from the most basic problem of the society — the society that elected him and catapulted him to the highest position of the land.

"His ability to put premium and emphasis even for this simple police matters
if he continues doing it during his term, will endear him to people.
It shows that he does not want himself isolated from the most basic problem
of the society — the society that elected him and
catapulted him to the highest position of the land."


Emmanuel J. Lopez, Ph.D. is an associate professor at the University of Santo Tomas and the chair of its Department of Economics. Views reflected in this article are his own. For comments email: doc.ejlopez@gmail.com

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RELATED FROM PHILSTAR

P-Noy economic team starts transition plan 3 0 Share Prinz Magtulis - May 24, 2016 - 12:00am


We take transitioning seriously and view it as an integral part of organizational development,” Finance Secretary and economic team head Cesar Purisima said in a statement. P-Noy economic team starts transition plan 3

MANILA, Philippines - A little over a month before they leave office, economic managers of the Aquino administration are busy with the transition to the incoming administration.

“We take transitioning seriously and view it as an integral part of organizational development,” Finance Secretary and economic team head Cesar Purisima said in a statement.

Related Stories EDITORYAL - Unahin ang sector ng agrikultura P77-B tax reform proposal up for Duterte perusal Incoming DOJ chief sets probe on DAP “We want to ensure the new team has all the means and resources on day one,” he added.

At his department, a draft comprehensive tax reform bill that would add P141 billion in additional revenues leads the documents to be turned over to incoming finance chief Carlos Dominguez.

The bill, Finance director Elsa Agustin said, would lower income tax, but increase value-added tax and charge more products with excise levy. Other details will be released soon.

Additionally, a “transition document” and a four-volume “manual of institutional knowledge” are also being prepared to tackle the current state, protocols and recommendations for DOF and its clusters.

The agency handles revenue generation, liability management, privatization and state corporations.

On the spending side, Budget Secretary Florencio Abad said two documents are being readied namely a technical report of the budget process and budget reforms undertaken since 2010.

“The principal one however is the Philippine Financial Management bill, which will consolidate all laws, orders, rules and other issuances related to (the budget),” Abad said in an interview last week.

READ MORE...

“We have made some strides particularly on the technology used for the budget, doing away with allotment orders with GAA (General Appropriations Act) as release document,” he added.

Implementing rules of the procurement law were also revised to rationalize documentary requirements and fast track bidding process.

“These are formal defects which unnecessarily delay the bidding for months,” Abad said. The revised rules are already approved, but pending publication.

At the National Economic and Development Authority (NEDA), director-general Emmanuel Esguerra said he is “prepared to brief” incoming Socio-economic Planning Secretary Ernesto Pernia.

The Public-Private Partnership (PPP) Center under NEDA is also getting ready.

“We are gift wrapping the projects to tie up loose ends...We are also crafting a 10-year strategic plan, which are broad themes to improve policy and capacity for better projects,” executive director Andre Palacios said in a phone interview.

He also expressed optimism that their proposed PPP Act in Congress, which will institutionalize the Center, will finally be approved.

“We hope the next government will continue where we left,” he said.

So far, the incoming government of Rodrigo Duterte has not yet named other members of its economic team aside from Dominguez and Pernia.

As prescribed by the Constitution, Duterte will take over by noon of June 30.


PHILSTAR

Japan shares G-7 push for inclusive growth with Asia, Africa (Associated Press) | Updated May 28, 2016 - 2:49pm 1 5 googleplus0 0


MAY 28 -Chadian President Idriss Deby Itno, third left, speaks with Japanese Prime Minister Shinzo Abe, third right, during their talks in Nagoya, central Japan, Saturday, May 28, 2016. Toru Yamanaka/Pool Photo via AP

NAGOYA, Japan — Japanese Prime Minister Shinzo Abe is sharing a push by the Group of Seven advanced industrial nations to promote inclusive growth across the globe in meetings with leaders of seven developing countries.

The bilateral summit meetings with leaders of Bangladesh, Chad, Indonesia, Laos, Papua New Guinea, Sri Lanka and Vietnam in this central Japanese city on Saturday followed a gathering with G-7 leaders after their annual summit, which was held in a nearby seaside resort. Chad's President Idriss Deby was representing the African Union at the meetings in Japan.

At that session, the leaders agreed to promote infrastructure development to help boost growth, Japanese officials said. They also voiced their support for the G-7's stance on the need for peacefully settling territorial disputes according to law — a reference to frustrations over China's growing presence in areas of the South China Sea also claimed by its neighbors.

Laos, Bangladesh and Papua New Guinea are among the poorest nations in Asia. Vietnam and Indonesia are two of the fastest-growing developing economies. During the summit, Abe expressed strong concern over slowdowns in China and some other emerging economies that have sapped global growth at a time when Japan and European nations are struggling to keep their own recoveries on track. A more than 50 percent plunge in commodity prices was a key signal of the risks to growth, Abe said.

"What we are concerned about the most is contraction of the world economy," Abe said

Japan has pledged to increase its development assistance, help finance an insurance fund for health emergencies in the developing world and to offer training to thousands of people in the developing world as part of its own contribution to bridging economic disparities.

The G-7 meeting also endorsed an effort to help 500 million people in developing countries escape hunger and malnutrition by 2030.


PHILSTAR

Economic growth is not enough, people want social progress and better quality of life BULL MARKET, BULL SHEET By Wilson Lee Flores (The Philippine Star) | Updated May 23, 2016 - 12:00am 4 1206 googleplus3 4

Why did the “Daang Matuwid” claims of the P-Noy administration face defeat in the polls, despite his annointed successor’s being highly educated, Wharton-trained former investment banker Mar Roxas?

Are our government leaders and economists living on another planet? Why did the May 9 referendum on the Noynoy Aquino administration — as the President himself framed it on several occasions including Nov. 16, 2015 at the APEC Summit held in Shangri-La Makati in reply to CNN editor Andrew Steven’s query — result in a resounding political defeat for his “Daang Matuwid” administration, despite his annointed successor being highly educated, Wharton-trained former investment banker Mar Roxas?

Why was the outgoing government repudiated by voters despite six years of decent high economic growth and with P3 trillion per year of state funds to spend or even to give away as Conditional Cash Transfer (CCT), etc.?

Why was it not enough that we have good economic growth rate and international credit rating upgrades? What were the shortcomings of the outgoing government which made voters go instead for Davao City Mayor Rody Duterte, the leader who is the exact opposite of the personality, governance style and ideas of our outgoing president P-Noy?

What lessons can our new leader learn from the shortcomings of the well-intentioned, personally-not-corrupt President Aquino?

READ MORE...

Lack of inclusive economic growth. True, there has been a boomlet of new condominiums enriching our top realty developers and constructions of new glitzy urban shopping malls in our major cities; but much of this economic growth is consumer-driven, fueled mainly by our unsung heroes, the millions of overseas Filipino workers who last year pumped a record US$29.7 billion into the Philippine economy.

This is the world’s third highest foreign exchange remittance volume by a nation’s overseas workers. To have inclusive growth, we need more investment-fueled growth in factories, farms, tourism ventures, etc. to create millions of new jobs here in the Philippines!

Another catalyst of Philippine growth is our BPOs, which is good for our economy but which largely benefit the educated, urban-based and generally English-speaking segments of our national population. The rural and urban poor are left behind.

Failure to improve people’s quality of life. Nonstop public gloating through self-congratulatory praise releases on “high economic growth” are meaningless and even irritating for most Pinoy people, because, generally, quality of life has declined.

A government’s duty is to be vigorous and interventionist in helping redistribute the benefits of economic growth and equalize opportunities with better infrastructure (not lousy congested airports, traffic-clogged streets and lack of high-speed trains), affordable medical services, decent pension levels for retirees, guaranteed peace and order (not much crime or illegal drugs), affordable housing, etc.

Multibillion- peso doleouts in conditional cash transfers alone are not enough — government should do more!

“Daang Sarado” or lack of major infrastructure projects despite world’s historic record low interest rates. Philippine STAR editor in chief Ana Marie Pamintuan on May 20 wrote comparing the number of tourists visiting Mexico to ours: “Mexico?

Last year alone, a whopping 32.1 million foreign tourists (went there) — in contrast to the 5.4 million arrivals in the Philippines, way below the 10 million target of daang sarado.”


INQUIRER's DAXIM LUCAS

Business journalist Dax Lucas wrote: “In six years, I’ve never heard any Yellow acknowledge that Philippine economic growth was boosted by the lowest global interest rates in human history. Lowest interest rates, cheapest funds and most liquidity in human history... and this is all the economic growth you could muster? Make no mistake about it: we will never see interest rates this low ever again in our lifetimes. We missed a once-in-a-lifetime chance to fund big-ticket infrastructure projects cheaply (nearly free, in fact).”

Better infrastructure is one way for government to equalize opportunities and lift the poor, via tourism, agriculture, better lives. Despite the marketing savvy of Tourism Secretary Mon Jimenez, how could we in the Philippines possibly hit that 10 million target for tourists if the national government has failed to quickly undertake major infrastructure projects?

San Miguel Corp. boss Ramon Ang at the outset of P-Noy’s term had offered to build a new international airport for the country at zero cost to us taxpayers and scheduled to finish it before P-Noy’s term expires; that visionary plan was not approved and there were no alternative plans started in six years.

I urge new President Rody Duterte to please do something with our horribly congested and inefficient Ninoy Aquino International Airport (ironically named in memory of P-Noy’s late dad).

Low foreign direct investments. Without huge foreign investment inflows, no country could solve thje problems of poverty, unemployment and lack of inclusive economic growth despite all the praise releases in local or foreign media.

Why has the Aquino government failed to woo bigger foreign investments despite our much-ballyhooed international credit rating upgrades? Why do we attract fewer FDIs than Indonesia, Myanmar, etc.? Is it due to our woeful infrastructure, our bad peace and order image abroad, our still having one of ASEAN’s highest business tax rates, Asia’s most expensive electric power rates, or President Aquino’s resistance to multi-sectoral appeals for Charter or constitutional change on those restrictive economic provisions?

Failure in agriculture. I don’t understand why the outgoing administration’s agriculture secretary has been repeatedly accused of failure by even some stalwarts of the ruling Liberal Party. Why were no reforms made?

At one time, there were even two cabinet-level officials in charge of agriculture and both cabinet secretaries reportedly even disagreed with each other. Millions of our poorest are rural farmers and their families; when will we make our vast arable lands and our rich aquatic resources enrich our people and the Philippine economy?

Failure in upholding balanced foreign policy to gain economic benefits. One of the glaring failures of the Aquino administration is its inability to craft and uphold a balanced foreign policy guided only by the Philippines’ strategic and economic national interests.

Not only have bilateral ties with the world’s second biggest economy, China, sunk to its worst levels while our neighbors Indonesia and Thailand are cooperating with China to build high-speed trains, I heard our traditional good relations with oil-rich countries Russia and Iran, etc. have also been neglected. In stark contrast, pragmatic South Korea has the best win-win diplomatic and trade ties with China despite political and even North Korea disagreements.

Double-digit economic growth needed to solve poverty. Last but not least, I’ve written this many times before, even during the term of former President Gloria Macapagal Arroyo who was my macro-economics professor at the Ateneo de Manila University. Government leaders should be more humble and truthful. We in the Philippines need sustained double-digit economic growth of 10 percent per annum or more for several years for us to realistically overcome the age-old problem of massive poverty!

It is not accurate for politicians to crow about our “having the highest economic growth in Asia” and comparing our country to the world’s second and third largest economies like China and Japan, or even to our richer neighbors Thailand or Malaysia, due to the smaller base of our economy or gross domestic product (GDP).

Our government bragging about our economic growth is comparable to, say, an SME-sized realty entrepreneur, like myself, bragging to the world that I earned 200-percent growth in my 2015 net profits and therefore comparing myself to SM Prime Holdings, Inc. — which had a 2015 profit growth of “only” 54 percent, or Ayala Land which had a growth of “only” 19 percent. Such a comparison completely ignores the reality that SM Prime 2015 profits totaled P28.3 billion and Ayala Land 2015 profits totaled P17.6 billion! No comparison!

I hope our new set of leaders led by President Rody Duterte will be more humble, realistic and bold in comprehensive socio-economic reforms so that they can lead the Philippines into a better, more just, more progressive and more peaceful future.

Economic growth or GDP statistics are meaningless and can be outright lies, if we do not translate these figures into better quality of life for the people and true social progress!

* * *


WILSON LEE FLORES

Thanks for your feedback! E-mail willsoonflourish@gmail.com  or follow WilsonLeeFlores on Instagram, Twitter, Facebook and http://willsoonflourish.blogspot.com/


PHILSTAR

Business sentiment bullish after Duterte victory By Lawrence Agcaoili (The Philippine Star) | Updated May 28, 2016 - 12:00am 15 179 googleplus1 0


BSP deputy governor Diwa Guinigundo said the overall confidence index based on the Business Expectation Survey (BES) improved to 48.7 percent in the second quarter from 41.9 percent in the first quarter. Philstar.com/Aj Bolando

MANILA, Philippines - Business sentiment turned bullish in the second quarter after the landslide victory of Rodrigo Duterte in the presidential elections, results of a survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed.

BSP deputy governor Diwa Guinigundo said the overall confidence index based on the Business Expectation Survey (BES) improved to 48.7 percent in the second quarter from 41.9 percent in the first quarter.

He pointed out at the time the survey was conducted from April 1 to May 17, respondents had already factored in the results of the May 9 polls.

“It is very difficult to say that but I think the numbers will show that the survey was taken from April 1 to May 17 so the election results are already clear that Duterte was a clear winner of the presidential elections,” Guinigundo said.

He explained the overall confidence index for the second quarter normally picks up during election years. The confidence index is the percentage of firms that answered in the affirmative less the percentage of firms that answered in the negative.

The confidence index rose to 43.9 percent in the second quarter from 39.1 percent in the first quarter during the 2010 presidential elections and to a high of 54.9 percent from 41.5 percent during the 2013 senatorial and local elections.

READ MORE...

“We saw that the readings of business expectations continue to be very bullish for the second quarter,” Guinigundo added.

Incoming finance secretary Carlos Dominguez III (photo) presented the eight-point economic agenda of the Duterte administration last May 12.

“The eight-point program would have been perused by the business respondents and the first point is precisely to continue with macroeconomic policies and to make sure that tax reforms will be pursued,” he said.

Rosabel Guerrero, director of the BSP’s Department of Economic Statistics, said respondents were more upbeat in the second quarter due to election related spending in the run-up to the May 9 polls and the sustained increase in orders and projects leading to higher volume of production.

The respondents, she added, also cited the anticipated demand during the summer with the influx of foreign and local tourists.

She explained the bullish sentiment was also caused by the introduction of new and enhanced business strategies, the expansion of businesses and product lines, the improving conditions in the local economy as well as some advanced economies, particularly in Asia.

“Their more positive outlook was further driven by expectations of more favorable macroeconomic conditions in the country, particularly low inflation and stable interest rates as well as sustained foreign investment inflows,” she said.

Guerrero pointed out business sentiment in the Philippines mirrored the improving business outlook in South Korea, Canada, France and the Netherlands but was in contrast to the deteriorating views of those in the US, the United Kingdom, Germany, China and Australia.

For the third quarter, she said business optimism remains higher, although the outcome was lower with the confidence index declining to 45.3 percent from 49.6 percent due to the rainy season, lower consumer demand as households prioritize enrollment expenses, and expectations of higher oil prices.

Guinigundo said the business respondents are very clear that they are less bullish or optimistic for the third quarter due to the rainy season, enrollment and higher oil prices and not because of the incoming Duterte administration.

“We can say that business respondents are prepared to see how the new administration, the new political leadership will navigate the economic and financial waters and we hope that this is going to continue,” he added.

The country’s gross domestic product (GDP) growth accelerated to 6.9 percent in the first quarter of the year from the revised 6.5 percent in the fourth quarter, making it the fastest growing economy in Asia.

The country’s GDP has registered a positive growth for the past 69 straight quarters.

Economic managers have penciled a GDP growth of between 6.8 and 7.8 percent this year after slowing down to 5.9 percent last year from 6.1 percent in 2014 due to weak global demand and lack of government spending.


PHILSTAR

Federal Republic of the Philippines? Babe Romualdez - May 22, 2016 - 12:00am


Babe Romualdez

There is no doubt – first on the agenda of president-in-waiting Rodrigo Duterte is the change in our system into a federal form of government.

Whether this federal system would be patterned after the United States, Germany, Canada or Switzerland has yet to be clear. But from day one, the president-elect has been batting for federalism even long before he threw his hat into the presidential race.

A Duterte team has already mapped out plans to disseminate information and spread the word about federalism to make people understand what the system is all about. The president-elect has given his team a timetable of two years to push through with this Charter change and submit the proposal either to a referendum or a plebiscite.

All the moves indicate the incoming administration is certainly wasting no time, making sure that it will have the needed numbers to push for this systemic change in both houses of Congress, particularly in the Lower House where the impetus is expected to come.

Duterte’s PDP-Laban has already formed coalitions with the Nacionalista Party, the Lakas-CMD and the Nationalist People’s Coalition (NPC), with other groups such as the Visayan bloc, the Makabayan bloc and the National Unity Party also expressing their support for the federalism agenda by going behind the bid of Davao del Norte Congressman Pantaleon “Bebot” Alvarez to become the next Speaker.


CAYETANO, PIMENTEL

In the Senate, it would most likely be a toss-up between Alan Peter Cayetano or Koko Pimentel for the position of Senate President, given the fact that the current ruling Liberal Party’s number has been diminished following the proclamation of seven non-LP candidates in the 12 winners of the recent senatorial race.

NPC’s Tito Sotto is also throwing his hat into the Senate Presidential race. However, sources tell us Koko Pimentel has the support of the presumptive president-elect.

Seasoned politicians agree that pushing for Charter change at the start of the Duterte term is the right move for various reasons.

For one, this will dispel suspicions that the real agenda is term extension – something that stymied previous efforts to change the Charter during the terms of FVR and Erap Estrada. And as correctly pointed out by them, the shift to a federal form of government needs careful deliberation and will require sufficient time to accomplish considering the structural changes that will happen – not to mention the debates that will ensue.

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Former Chief Justice Puno

People who support federalism – among them former Chief Justice Reynato Puno – believe that this system will result in a more participative kind of government because the local level will have relative autonomy from the national (or central) government.

Economists also believe this systemic change could spur real growth and prosperity that could reach far-flung areas especially in Mindanao, since a federal form of government will give local governments more power to decide and craft solutions that are tailor fit to their economic situation – reducing poverty and unemployment in the process.

I’m one of those who believe that it’s the system that spawns corruption and not the other way around.

What happened with the PDAF and DAP is a clear example of corruption in the current system.

Unfortunately, President Aquino did not support the RBH (Resolution of Both houses) principally authored by Speaker Sonny Belmonte to amend the economic provisions in our current charter.


PNoy

A simple insertion of the words “unless otherwise provided by law” would have sufficed to quash all those suspicions that the proposed amendments could be open to abuse.

Given the reality of the ASEAN economic integration, amending the economic provisions has become more important than ever to attract foreign businessmen to invest in the country – since creating much needed jobs is a key component in spreading the wealth especially with the population reaching 120 million by 2022.

Let’s face it – protectionist provisions that limit foreign ownership in certain industries and sectors like advertising and media are simply ridiculous.

Even restricting land ownership is absurd; foreigners can’t take the land with them and most likely it will revert to Filipino ownership over time like what happened to the Pebble Beach Golf Course and the Rockefeller Center bought by “Japan Inc.” in the late 1980s. Less than a decade later, they were sold back by the Japanese to a US-based tycoon.


ALVAREZ

Incoming speaker Bebot Alvarez and several congressmen are ready to support the shift to federalism which could pave the way for lasting peace in Mindanao, as this would provide the best alternative to the scuttled proposal for the Bangsamoro Basic Law (BBL) since both essentially have the same concept – autonomy for the areas under the ARMM.

Senator Miriam Santiago correctly pointed out that a constitutional amendment would be needed to create the proposed Bangsamoro entity which had problematic provisions that were at odds with the current 1987 Constitution.

Alvarez did not mince words when he said he felt sorry for those who put their hopes on the BBL because they were “taken for a ride” by the outgoing administration that allegedly knew from the very beginning that it would be impossible to implement the BBL unless amendments are made on the current constitution.

The fact is, constitutional amendments are long overdue because the restrictive and unclear provisions have made it very difficult for the country to sustain growth momentum and achieve real progress.

Whether a federal form of government will work or not remains to be seen.

The only thing that is permanent in this world is change, and 16 million people took their chances and voted for a man who represented change.

We will soon find out if indeed change will come – for better or for worse.


Chief News Editor: Sol Jose Vanzi

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