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Philippines Defence Forum

With high economic growth and high tension at SCS, Philippine will likely to choose KFX/IFX after 2024............ :devil:

Less expensive than F-35 but still uses Lockheed Martin technology and having two engine (better supercruise- at least two proven engine will create less problem than one new engine to get supercruise- /more payload in Stealth mode/ proven Engine) , at least 32 planes will likely be bought.

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Their main objective is to get MRF beyond 2018's. It could be F/A-18's or Gripen, but i doubt about KFX/IFX.
 
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Their main objective is to get MRF beyond 2018's. It could be F/A-18's or Gripen, but i doubt about KFX/IFX

With Lockheed Martin who eventually comes to KFX/IFX program as KIA partner, so there will be American stake on this program, similar like FA-50 program. As American great ally, Philippine should acquire F-35, but by considering its economic aspect, it is KFX/IFX that has more probability to be chosen. Of course we need to see the real result from this program first.

After 2024 something, it should be A STEALTH FIGHTER era, only Su 35 that in my opinion will still be hanging on at that time since this plane is also 4,5 gen aircraft and with its huge payload and very long range, it still can be used at that time for deep strike fighter (only coming after STEALTH fighter finish enemy radar and SAM).
 
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SCS/West PH Sea News:

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Zambales fishermen ask UN to intervene, stop China ‘harassment’ in West PHL Sea
By MARK MERUEÑAS
GMA News June 24, 2015 11:25pm


(Updated 8:52 a.m., June 25) Thirty-eight Filipino fishermen from Zambales on Wednesday sought help from the United Nations against Chinese maritime personnel who have allegedly been physically harassing them since April 2012 while trying to fish at Scarborough Shoal or Bajo de Masinloc.

In their letter, the 38 fishermen asked the UN to “urgently intervene and investigate” the human rights violations committed by China and its state agents against them in Scarborough Shoal, also called Panatag Shoal.

"We request that you urgently intervene, remind, and direct China and its state agents to respect the human rights—including the right to livelihood, the right to adequate food, and the right to life of the Filipino fisherfolks over their traditional fishing grounds and safe refuge in the Scarborough Shoal (Panatag Shalier Bajo de Masinloc),” said the fishermen, represented by the Center for International Law, in their letter.

The fishermen wanted the UN to “remind, declare, and direct” China to provide effective remedies and compensation for the human rights violations against them.

They cited China’s international obligation under the International Covenant on Economic, Social, and Cultural Rights; and the Universal Declaration of Human Rights; and customary international law.

The letter was addressed to Zeid Ra’ad Al Hussein, UN High Commissioner for Human Rights; Hilal Elver, UN Special Rapporteur on the Right to Food; and Idriss Jazairy, UN Special Rapporteur on the Negative Impact of the Unilateral Coercive Measures on the Enjoyment of Human Rights.

They cited the case of 56-year-old fisherman Macario Forones and his fellow Filipino fishermen aboard around 20 boats, who were told to “Go away, go away, 3 miles China Island,” by a group of armed Chinese personnel wearing orange uniforms and on board a speedboat on April 6, 2014.

Not too far away from the Chinese speedboat was a huge Chinese Coast Guard ship, with a helicopter parked on it.

As Forones’ group left and moved away from Scarborough Shoal, the helicopter pursued them and encircled them three times.

Saying the incident “traumatized” them, Forones and his companions never returned to the area and "have lost hope of returning to the shoal due to the ferocity of the Chinese state personnel. There is also a Chinese vessel patrolling inside the Scarborough Shoal.”

Forones’ cousin, Inocentes, who was among the fishermen allegedly harassed by the Chinese personnel that day, claimed developing a phobia from the incident, and insisted on never returning to the area even if he was offered P1 million.

Eight months later, in December 2014, another group of Filipino fishermen returned to Scarborough Shoal to fish, only to be driven away by armed Chinese personnel. The Chinese, on board small “file boats,” allegedly rammed the Filipino men's fishing boats and pointed guns at them when they refused to hand over their catch.

To get around Chinese personnel guarding the shoal, the Filipino fishermen would fish in the area at night, fishing at around 6 p.m. and leaving by 4 a.m. before patrolling Chinese men arrive.

Another fisherman, Nestor Calago, also complained of no longer being able to seek refuge in the lagoon of Scarborough Shoal during inclement weather due to the presence of Chinese vessels in the area. He eventually stopped going to Scarborough Shoal, and has suffered continuous financial losses, leading to his indebtedness.

The fishermen accused China of violating among others Article II of the International Covenant on Economic, Social, and Cultural Rights—to which China is a state party—and Article 25 of the Universal Declaration of Human Rights, which both recognize the right of everyone to an adequate standard of living, including adequate food.

China also allegedly violated Article 3 of the UDHR which gives everyone the right to life, liberty and security of person. China also violated the fishermen’s right, under customary international law, to the places of refuge for ships in distress in accordance with the right to life.

"The human rights violation of China and its state agents is made more pronounced by the fact that their violation is committed in Scarborough Shoal which is within the Philippines’ 200-nautical mile exclusive economic zone wherein the Philippines exercises sovereign rights over the living and non-living resources,” the letter said.

"And the sovereign rights that the Philippines exercises over Scarborough Shoal should be, inter alia, for the benefit of the Filipino fisher folks,” it added. —ELR/KG, GMA News

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Zambales fishermen ask UN to intervene, stop China ‘harassment’ in West PHL Sea | News | GMA News Online
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With Lockheed Martin who eventually comes to KFX/IFX program as KIA partner, so there will be American stake on this program, similar like FA-50 program. As American great ally, Philippine should acquire F-35, but by considering its economic aspect, it is KFX/IFX that has more probability to be chosen. Of course we need to see the real result from this program first.

After 2024 something, it should be A STEALTH FIGHTER era, only Su 35 that in my opinion will still be hanging on at that time since this plane is also 4,5 gen aircraft and with its huge payload and very long range, it still can be used at that time for deep strike fighter (only coming after STEALTH fighter finish enemy radar and SAM).

I have to disagree on there my friend on the Su35 the fighter on 4.5 left by that time would be Gripen E/F or the Eurofighter or Rafale. But anyhow by the way things are going i think we would just buy more FA50 or Gripens as main MRF fighter or just Gripens or Rafale since we have defense agreements with france mostly likely lease to own or payment scheme or maybe we get the F15Js or old F15 or the Strike Eagle or F16s either way it would be slow but surely we have a decent air force finally.
 
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Business News:

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Vivant investing P67 B for new power projects
By Iris C. Gonzales (The Philippine Star)
Updated June 27, 2015 - 12:00am


MANILA, Philippines - Cebu-based Vivant Corp., of the Garcia-Escano family is pouring in P67 billion for new power generation projects in the next three years, its chief operating officer Arlo Sarmiento said.

Sarmiento said the group plans to invest in new facilities with over 450 megawatts in capacity, part of the company’s strategy of continuously expanding in the power industry.

“Vivant is always looking for opportunities to expand its generation portfolio. Starting 2015 up to 2018, the group expects to invest in power generation projects that involve construction of new facilities with total capacity of over 450 MW worth roughly P67 billion,” Sarmiento said.

He said the projects would help augment electricity supply in Visayas and Mindanao.

“These projects are deemed part of the solution for the worsening power problems in Visayas and Mindanao. Vivant’s participation will be close to P4 billion which should result to a 51 percent increase in its attributable generation capacity by 2018 as projects are completed,” Sarmiento said.

Last year, Vivant infused more than P1.6 billion in equity for its power generation business including its acquisition of a 40 percent stake in Minergy Power Corp. (MPC) and a 20 percent stake in Therma Visayas Inc. (TVI).

The companies are behind two coal-fired power facilities in Misamis and in Cebu.

“MPC is currently constructing a 3 x 55-MW coal-fired power generation facility in Misamis Oriental. Its completion by yearend 2017 should provide a new and stable source of power for the island of Mindanao,” Sarmiento said.

Similarly, Therma Visayas has broken ground on a 300-MW coal-fired power generation facility in Toledo City, Cebu.

Sarmiento said this particular project consists of two units, with the first one expected to be completed by end-2017 and the second to follow in the first three months of 2018.

He said Vivant continues to explore opportunities to expand and strengthen its power generation and electricity distribution business, its core business through acquisitions, green and brownfield initiatives or joint venture projects.

By end-2014, the firm’s attributable generation capacity has reached 249 MW, nine percent higher than 2013 levels. This increase was due to the completion of the Coron-Busuanga generation facilities of Calamian Islands Power Corp. (CIPC), 50 percent of which is effectively owned by Vivant through wholly owned subsidiary Vivant Energy Corp. (VEC), and the turnover to VEC of 17 MW “strips energy” from the Unified Leyte Geothermal Power Plants (ULGPP).

Last year, the company reported a net profit of P1.3 billion up 34 percent from the the year-ago level, fueled by Vivant’s generation business, which contributed P1.1 billion to the group’s bottom line, data from the company showed.

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Vivant investing P67 B for new power projects | Business, News, The Philippine Star | philstar.com
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Politics and National Security News:

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Petitions vs Bangsamoro deal may still be dismissed
By Edu Punay (The Philippine Star)
Updated June 27, 2015 - 12:00am


MANILA, Philippines - Supreme Court spokesman Theodore Te clarified yesterday that the high court has not yet given due course to the petitions filed by the Philippine Constitution Association (Philconsa) and former Negros Oriental congressman Jacinto Paras against the draft Bangsamoro Basic Law (BBL), which means the Court has not yet considered whether or not it can dismiss the petitions outright.

Lawyer Mohammad Al-Amin Julkipli, member of the government peace negotiating panel, said all the petitions lodged against the BBL revolve around one issue: does the proposal adhere to the Constitution?

He added that the end-goal in all these processes is the establishment of genuine political autonomy by building on what the Autonomous Region in Muslim Mindanao has achieved.

In making the clarification, Te said the high court would rule on whether to give due course to the petitions after receiving the comments from respondents chief peace negotiator Miriam Coronel-Ferrer, Moro Islamic Liberation Front (MILF) peace panel head Mohagher Iqbal, Budget Secretary Florencio Abad and the Commission on Audit.

He stressed that Iqbal is required to answer the petitions as a respondent, although it is not very clear if the Office of the Solicitor General can represent Iqbal in the case.

Last Tuesday, the high court ordered the government and the MILF to answer the petitions assailing the constitutionality of the Comprehensive Agreement on the Bangsamoro (CAB), including the earlier Framework Agreement on the Bangsamoro (FAB) and its annexes.

The respondents were given 10 days from receipt of notice to comply with the order.

Former government peace panel chief and now Supreme Court Associate Justice Marvic Leonen was named a respondent in the case, but court insiders said he would not be required to comment on the petitions. He has inhibited himself from the cases.

In their petitions last week, both Philconsa and Paras alleged that the government peace panel committed grave abuse of discretion in signing the FAB and CAB on Oct. 12, 2012 and March 27, 2014, respectively.

They said both agreements were a revival of the Memorandum of Agreement on Ancestral Domain (MOA-AD) forged by the Arroyo administration with the MILF, which was declared unconstitutional by the high court in October 2008.

The petitioners argued that the agreements violated Article X Section 1 of the Constitution, which authorizes and recognizes only five territorial and political subdivisions in the country: provinces, cities, municipalities, barangays and autonomous regions.

They added that the conduct of the peace process with the MILF violated Executive Order No. 125 issued by former President Fidel Ramos, which requires the presence of a panel of advisers composed of one each from the Senate, the House of Representatives and the Cabinet to be designated by the President.

Julkipli, in a previous Kapihan forum in Legazpi City, said he has reviewed various positions on the proposed BBL and listed 10 ‘myths’ that evolved from the public discussions.

He claimed these myths include: Bangsamoro will become an independent and separate state; BBL does not protect the rights of indigenous people; inclusion into the Bangsamoro will only need a local government resolution; the Bangsamoro will become an Islamic state; it will have its own armed forces; it will separate and have its own police force; its parliamentary system is unconstitutional; the BBL is flawed because it lacks a provision on decommissioning; the Bangsamoro government will receive P70 billion to P75 billion as funding for its first year of government; and the MILF does not represent the interests of all Muslims in the Philippines.

Julkipli said that when all the questioning is over, “it is still the people who will decide through a plebiscite after the draft BBL has been passed by Congress and the Senate and signed by the President.”

Also helping the Philippines in its peace process is Turkey, which is a member-state of the Organization of Islamic Cooperation, a bloc of more than 50 Muslim nations worldwide. – With Celso Amo

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Petitions vs Bangsamoro deal may still be dismissed | Headlines, News, The Philippine Star | philstar.com
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Palace condemns killing of CNN cameraman
By Delon Porcalla (The Philippine Star)
Updated June 27, 2015 - 12:00am


MANILA, Philippines - Malacañang yesterday condemned the murder of CNN Philippines cameraman Jonathan Oldan by an unidentified gunman in Cavite on Thursday.

“We condemn the killing of CNN Philippines’ employee Jonathan Oldan,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said.

“The Philippine National Police has been directed to pursue those who may have been responsible for his death so that the ends of justice may be served,” Coloma said.

Justice Secretary Leila de Lima has ordered the National Bureau of Investigation (NBI) to probe the killing of Oldan.

De Lima said she tasked the NBI to dispatch a team of investigators to Imus a few hours after the incident.

“Part of their assignment is to preliminarily determine whether the killing is work-related, subject to further evaluation by the administrative technical working group secretariat,” she said.

The technical working group under Administrative Order No. 35 signed by President Aquino in November 2012 created the inter-agency group to investigate unexplained killings and enforced disappearances, including those involving members of the media.

“If determined to be work-related, hence, an extrajudicial killing, then it will be assigned to a Special Investigation Team, to be monitored by the Special Oversight Team, as among the existing mechanisms under AO 35,” De Lima explained.

Initial reports said Oldan, 29, was shot dead by still unidentified gunmen in Barangay Pinagbuklod at around 5:15 a.m. last Thursday.

He was on his way to work when he was shot four times in the head, shortly after buying cigarettes at a convenience store along Bukaneg Street.

Supt. Federico Maranan, Imus police chief, said witnesses saw Oldan having an argument with an unidentified person after buying cigarettes. Then they saw Oldan running away.

Oldan is the third journalist to be killed this year and the 27th under the Aquino administration.

In its official statement, CNN condemned the killing.

“We deplore the killing of our colleague Jonathan Oldan. He was shot to death on his way to work this morning. We demand that his assailant/assailants be brought to justice. We condole with his family and loved ones in this most tragic and trying time. CNN Philippines condemns this act and will spare no effort to bring the criminal/criminals to justice,” the statement on the CNN website reads.

The National Press Club headed by Joel Sy Egco denounced the murder as it expressed its “utter disgust over the Aquino government’s lackluster efforts in preventing such heinous crimes.”

“The killing in cold blood of Mr. Oldan again highlights the government’s apathy, or lack of interest, over the horrendous state of media killings in the country,” Egco said.

The National Union of Journalists of the Philippines (NUJP) and the Justice and Court Reporters Association (JUCRA) both condemned the killing.

“Whether the incident was related to our work in covering the justice department and the judiciary or to any other motive, his brutal murder demands justice,” JUCRA said in a statement.

Oldan was a member of the press organization and covered the justice beat for almost a year. – With Edu Punay, Ed Amoroso

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Palace condemns killing of CNN cameraman | Headlines, News, The Philippine Star | philstar.com
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Business News:

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Government sticks to 7-8% growth target until 2016
By Zinnia B. Dela Peña (The Philippine Star)
Updated July 1, 2015 - 12:00am


MANILA, Philippines - The government has retained its economic growth assumptions of seven to eight percent for this year and next year, but noted that hitting the top-end of its target would be a challenge given some issues on the domestic front.

In a briefing following a meeting of the country’s economic managers yesterday, Budget Secretary Florencio Abad said the inter-agency Development Budget Coordination Committee (DBCC) agreed to keep the country’s economic growth forecasts unchanged despite the uncertainties on both global and domestic fronts.

“The upper target would be a challenge but it still remains to be within range observing many of the problems are mostly domestic in nature and therefore within the control of the government,” Abad said.

The country’s gross domestic product growth (GDP) slowed to 5.2 percent in the first quarter – the lowest in more than three years – mainly due to weak government spending.

“We’re working very had to address the problems that have been identified in order to accelerate state spending,” Abad said.

The government’s economic team, meanwhile, downscaled its growth forecast for net exports of services to 13.6 percent from 15 percent, taking into account what’s going on in the global market place which includes the outbreak of the deadly Middle East Respiratory Syndrome (MERS).

Last year, the economy grew by only 6.1 percent – below the government’s target of 6.5 to 7.5 percent and lower than the all-time high 7.2 percent growth in 2013 – due largely to public underspending.

Economists said the country needs to grow by at least seven percent annually over the medium term to reduce poverty.

Abad said the government has also kept the borrowing mix for 2016 at 85-15 in favor of domestic loans.

He said the proposed P3.005 trillion budget for 2016, equivalent to 19.5 percent of GDP, would be presented to President Aquino next week.

Of the proposed national budget for next year, P768 billion has been earmarked for infrastructure spending.

The DBCC, which sets the government’s macroeconomic targets and policies, expects favorable factors such as a sustained rise in remittances and continued spending for reconstruction to continue boosting growth in GDP or the value of all goods and services produced within the country.

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Government sticks to 7-8% growth target until 2016 | Business, News, The Philippine Star | philstar.com
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Index continues decline amid Greece concerns
By Richmond S. Mercurio (The Philippine Star)
Updated July 1, 2015 - 12:00am


MANILA, Philippines - The benchmark stock index trimmed its losses yesterday but still closed in the negative territory as issues surrounding Greece’s debt crisis lingered.

The Philippine Stock Exchange index (PSEi) dipped 0.03 percent or 2.88 points to finish on the losing end for the second consecutive session at 7,564.50.

The broader All Shares index likewise joined the descent as it fell 0.27 percent or 11.82 points at 4,319.59.

Analysts said players yesterday stayed at bay for sequels on Greece following Monday’s decision to impose capital controls as the country continued with its debt struggles.

“More negative news from Greece will have minimal effect henceforth. In fact, the sensitivity bias shifts to positive – a bigger reaction may be expected is a miracle agreement happens,” said Accord Capital Equities analyst Justino Calaycay Jr.

Most Asian markets suffered a different fate as that of the Philippines yesterday, with the uptrend led by Japan’s Nikkei which rose 0.6 percent.

Local counters were mixed, although those in the red dominated. Only financials and holdings firms posed gains while services companied took the largest drop at 0.88 percent.

Decliners whipped advancers, 118 to 61, while 45 stocks were unchanged.

Turnover value, however, surged to P10.68 billion from a thin P5.9-billion value the previous day.

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Index continues decline amid Greece concerns | Business, News, The Philippine Star | philstar.com
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PCCI bullish on 6.8-7% GDP growth
By Louella D. Desiderio (The Philippine Star)
Updated July 1, 2015 - 12:00am


MANILA, Philippines - The Philippine economy can grow by 6.8 to seven percent this year due to election and infrastructure spending, the country’s largest business organization said.

“I think a 6.8 to seven percent GDP (gross domestic product) growth is possible this year,” Philippine Chamber of Commerce and Industry (PCCI) president Alfredo Yao told reporters.

Among the major drivers of growth expected this year are poll-related expenditures as well as the implementation of infrastructure projects.

While strong economic growth is expected, Yao said the government needs to work on the passage of certain legislative measures which are seen positive for the economy and businesses, before the end of President Aquino’s term.

He said the President should approve the competition law which will create an independent Philippine Competition Commission to prevent businesses from engaging in unfair and anti-competitive acts.

The group is likewise pushing for the passage of the Customs Modernization and Tariff Act to make improvements in the Bureau of Customs.

The Bangsamoro Basic Law also needs to be approved in order to bring peace in Mindanao and enable the region to attract more investments.

As the port congestion negatively affected businesses last year in terms of delays of exports and imports, Yao said the government will have to work on encouraging more improvements to be made in other ports to decongest Manila’s.

“We are relying 100 percent on the Port of Manila. Why not use Batangas and Subic? There should be political will,” he said.

The group is also of the view the government should revisit proposals to make Clark Airport as the country’s main international gateway with Manila already congested.

Yao said he expects to hear about Aquino’s plans on the recommendations made in the upcoming State of the Nation Address.

The government has set a seven to eight percent growth target for this year.

For the first quarter, the Philippine economy grew 5.2 percent.

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PCCI bullish on 6.8-7% GDP growth | Business, News, The Philippine Star | philstar.com
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Public spending for infra, capital outlay up 40% in April
By Zinnia dela Peña (The Philippine Star)
Updated July 1, 2015 - 12:00am


MANILA, Philippines - Public spending for infrastructure and capital outlay surged by more than 40 percent to P23.3 billion in April as the government tried to catch up on disbursements which had been anemic in the past months, the Department of Finance (DOF) reported yesterday.

Budget Secretary Florencio B. Abad earlier said the government would speed up infrastructure spending in the second half to further prop up economic growth, which slowed down to 5.2 percent in the first quarter.

For the first four months of the year, total infrastructure disbursements amounted to P91.9 percent, 1.9 percent lower than last year’s level.

Based on the World Bank’s 2014 Logistics Performance Index, Philippine infrastructure is the worst among the six Southeast Asian nations including Singapore, Vietnam, Indonesia, Malaysia and Thailand.

Overall government expenditures registered a nine percent increase in April to P156.5 billion, bringing cumulative expenditures to P660.6 billion from January to April or 5.5 percent more than the amount spent in the same period a year earlier.

“Although spending for April grew year-on-year, much more needs to be done so that disbursements can move faster. Departments and agencies – particularly those with urgent, big-ticket items – should optimize their allocations so that we can look forward to more efficient spending and the faster delivery of services,” Abad said.

Abad said disbursements from Notices of Cash Allocation (NCAs) grew 17.3 percent in April. Strong performance by the Office of the President and the Department of Education (DepEd), Department of Public Works (DPWH), Department of Social Welfare and Development (DSWD), and Interior and Local Government (DILG), as well as the Autonomous Region of Muslim Mindanao (ARMM) drove performance up and offset contractions in tax expenditure subsidies and net lending.

“As we continue to reduce our debt burden, the government can provide greater budgetary support to key social and economic services. That means more funds for education, health care, and infrastructure development, among others,” Abad said.

Since the start of the year, DBM has implemented measures to clear the bottlenecks and structural weaknesses that contributed to the government’s underspending in 2014.

The majority of agency allotments were released at the start of the year, with 84 percent of the total obligation program released by end-April.

Abad said that while the government has already implemented measures to improve public spending, several institutional weaknesses still need to be addressed to ramp up state spending and support further economic growth.

Among these measures include improving planning capacities in the national and local governments. In this regard, the government has formed a sub-committee of the Development Budget Coordinating Coordination Committee (DBCC) that will be tasked to look into and evaluate project proposals costing less than P1 billion. This sub-committee will be headed by the National Economic Development Authority (NEDA).

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Public spending for infra, capital outlay up 40% in April | Business, News, The Philippine Star | philstar.com
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SCS/West PH Sea News:

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Time for the Philippines to Adjust its South China Sea Approach
By Richard Javad Heydarian
June 30, 2015


Manila should pursue dialogue with Beijing while it still can.

Growing territorial tensions in the South China Sea are taking a toll on the sizeable Filipino-Chinese community in the Philippines. Recently, one of the most celebrated Filipino writers went so far as to implicitly question the loyalty of the Filipino-Chinese community in an event of war with China, prompting vigorous rebuttals from leading Filipino-Chinese intellectuals.

Slowly, it is becoming clear that the Philippines’ territorial standoff with China not only carries the risk of possible conflict in disputed waters and a precipitous decline in Chinese investments. The increasingly toxic diplomatic exchanges between Beijing and Manila has been mirrored by equally – if not more – adversarial language in the public sphere, with some netizens stoking inter-ethnic tensions and undermining the Philippines’ proud legacy of multiculturalism.

Any objective analysis would pin the blame on China for stoking territorial tensions in the region, which in turn means that Beijing’s behavior is key to the resolution of the disputes. Nevertheless, the Philippines can still learn some lessons from its neighbors on how to better manage the ongoing disputes and best deal with the Chinese juggernaut. Diplomacy isn’t only about mobilizing allies and friends against your foes. It is also about keeping your enemies close and peacefully managing differences with even the bitterest foes.

For a long time, the Philippines has maintained considerable harmony between the majority (Christian) Filipino population and the minority (but highly influential) Chinese diaspora in the country, many of whom have converted to Christianity, learned the local language, and integrated themselves fully into the mainstream as full-fledged citizens. While it is common knowledge that the Filipino-Chinese businessmen rank among the richest in the country – overseeing major conglomerates that have powered the Philippine economy in recent years – few have emphasized how many of the Philippines’ most influential political figures have also been from the Filipino-Chinese Mestizo stock. Jose Rizal, the Philippines’ founding father, has a monument in his ancestral home in Qiongque Village in Jinjiang City. The Philippines’ incumbent president, Benigno Aquino III – and his late mother, the ex-president (Corazon) – has proudly publicized his Chinese lineage. A testament to post-colonial Philippines’ strong cosmopolitan pedigree is that it has hardly experienced anything that resembles the anti-Chinese protests, which engulfed neighboring countries like Malaysia, Indonesia, and Vietnam in recent decades.

But saber-rattling between the Philippines and China in the South China Sea has rendered long-dormant inter-ethnic tensions more visible in the public discourse. Meanwhile, in autocratic regimes such as China, anti-Filipino sentiments have gained steam. If things continue at their current pace, biases and adversarial discourses could crystalize into a powerful, popular lobby against any diplomatic compromise in the future, undermining prospects for the peaceful resolution of the South China Sea disputes on a bilateral basis.

In the Philippines, a growing number of people have come to view China as another Soviet Union bent on territorial aggrandizement and committed to spread its tyrannical (communist) ideology. Nowadays, it is common to hear people describing China as a “bully” that should not be negotiated with. In China, a growing number of people have come to see the Philippines as a “troublemaker”, which often acts at the behest of its former colonial master, the United States. In short, inter-state diplomatic brinkmanship is spilling into the mainstream public discourse, reinforcing longstanding prejudices and feeding zero-sum strategic calculations.


Learning from Others

The Aquino administration, especially Foreign Secretary Albert Del Rosario, has consistently suggested that diplomacy with China is practically fruitless. The default policy is to garner maximum international support and rely on an inherently uncertain legal maneuver against China. But the Philippines is not the only country that has been on the receiving end of China’s territorial assertiveness: Tokyo and Hanoi have been locked in a similar territorial standoff with Beijing.

China has been Japan’s archrival for decades, if not centuries, while Vietnam’s very national identity has been forged through its millennium-old struggle against its powerful northern neighbor. Yet, both countries have been more proactive and creative in engaging China without compromising their territorial interests.

Despite the ugly standoff in the East China Sea, Japan’s nationalist leader, Shinzo Abe, took a huge gamble when he pursued a formal dialogue with Xi Jinping on the sidelines of APEC in Beijing in 2014. Soon after their awkward handshake, Japan and China resumed high-level talks among their defense and foreign ministries, paving the way for various confidence-building measures to manage their territorial disputes and avoid accidental clashes in contested areas.

As for Vietnam, at the height of its dispute with China last year, it doubled down on engagement with China. After hosting China’s leading foreign policy advisor, Yang Jiechi, Vietnam dispatched a top official, Le Hong Anh, to Beijing to deescalate tensions. This was followed by the setting up of the third hotline between the two neighbors’ relevant agencies. Earlier this year, Vietnam’s party chief, Nguyen Phu Troung, made a high-profile visit to Beijing in order to explore additional mechanisms to prevent another ‘oil rig’ crisis and maintain robust economic ties between the two neighbors.

For both Hanoi and Tokyo, it was important to make sure their territorial standoff with China did not lead to conflict and undermine critical economic linkages with Beijing. At the same time, this has not prevented them from fortifying their position on the ground, ramping up their presence close to disputed waters, and enhancing their defensive capabilities.

In contrast, Aquino and Xi are yet to hold a single formal summit; the two countries are yet to sign a single hotline; and Chinese investments in the Philippines have been effectively frozen. Obviously, as the more powerful party, Beijing should take the initiative and make necessary compromises to show its good will. But Manila can also pick up a few tactical lessons from Hanoi and Tokyo, who have heeded the advice of the great Italian thinker Niccolo Machiavelli who once said: “Keep your friends close, but your enemies closer.”

Richard Javad Heydarian is an assistant professor in political science at De La Salle University, Manila, and the author of “Asia’s New Battlefield: US, China, and the Struggle for the Western Pacific.”

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Time for the Philippines to Adjust its South China Sea Approach | The Diplomat
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SCS/ West PH News:

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DND slams China's completion of reclamation activities in West Phl Sea
By Alexis Romero (philstar.com)
Updated July 1, 2015 - 6:52pm


MANILA, Philippines - The Department of National Defense (DND) on Wednesday slammed China’s announcement that it has completed its reclamation in the West Philippine Sea (South China Sea) and warned that the “illegal” activity could lead to untoward incidents.

DND spokesman Peter Galvez said China should stop militarizing the region and heed calls for it to follow the international law.

“We reiterate that their illegal island building if not stopped only draws the world closer to further uncertainties and untoward incidents with irreparable consequences,” Galvez said in a text message.

“The Chinese government should refrain from militarizing the region, stop deceiving the peace-loving Chinese people and submit to the call of all nations for them to peacefully abide by the internationally accepted rules as stipulated in UNCLOS (United Nations Convention on the Law of the Sea),” he added.

On Tuesday, China Foreign Ministry spokesperson Hua Chunying said that the land reclamation in the disputed Spratlys chain has been completed.

“It is learned from relevant departments that, the land reclamation project of China's construction on some stationed islands and reefs of the Nansha Islands (Spratlys) has been completed recently as scheduled,” Hua said.

“In the next stage, the Chinese side will start the building of facilities to meet relevant functional requirements,” she added.

Hua said the facilities would “mainly provide various civilian services” and would “enable China to better perform its international obligations” in maritime search and rescue, disaster prevention and mitigation and marine scientific research, among other areas.

While China is making it appear that the facilities are for civilian operations, Hua admitted that “necessary military defense requirements” would also be fulfilled.

China has embarked on a massive reclamation program in Panganiban (Mischief), Zamora (Subi), Kagitingan (Fiery Cross), Kennan (Chigua), Mabini (Johnson South), Burgos (Gaven) and Calderon (Cuarteron) Reefs, areas that also being claimed by the Philippines.

Satellite photos showed that China is constructing artificial islands with airstrips, radar systems and military barracks.

The Philippines has decried China’s activities, saying they go against the 2002 Declamation on the Conduct of Parties in the South China Sea, which prohibits actions that would change the status quo in disputed areas.

The island-building has also destroyed coral reef systems in the West Philippine Sea, resulting to an economic loss of about $281 million per year, according to the Philippine government.

China has repeatedly claimed that it has sovereignty over the reefs and has accused the Philippines of “creating an illusion” that it is the victim of the territorial dispute.

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DND slams China's completion of reclamation activities in West Phl Sea | Headlines, News, The Philippine Star | philstar.com
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Palace: West Philippine Sea documentary not meant to anger China

By Louis Bacani
Updated Tuesday June 30, 2015 - 12:32pm


MANILA, Philippines - The government did not intend to anger China with the release of a documentary on the West Philippine Sea (WPS), Malacañang said Tuesday.

Communications Secretary Herminio Coloma Jr. said the documentary is not targeted at China as it seeks to inform Filipinos about the sea dispute between the two nations.

"We aim to create greater awareness about the historical, legal and economic aspects of the issues pertaining to the WPS. A well informed citizenry will be able to make enlightened choices and decisions," Coloma said in a text message to reporters.

"The documentary is aimed primarily to our citizens. We cannot and do not expect others to agree with contents and manner of presentation," he added.

On Monday, the Chinese Foreign Ministry Spokesperson Hua Chunying said they were "strongly dissatisfied with the groundless criticism by the Philippine documentary, which ignores the facts and confuses right and wrong."

"By misleading and deceiving the public, the Philippines plots to gain sympathies and play the victim," Hua said.

She said the Philippine government is "hyping up" the sea dispute and fueling a confrontation between the Chinese and Filipinos.

Released by Coloma's Presidential Communications Operations Office in coordination with the Department of Foreign Affairs, the three-part documentary details the Philippines' ownership over some of the disputed islands in the South China Sea.

The first part was shown during the celebration of the country's 117 years of independence on June 12 while the second episode was released last week.

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Palace: West Philippine Sea documentary not meant to anger China | Disputed Seas - Philstar.com
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On the unrelated news, this month in the Philippines is the "Philippine-Japan Friendship Month".
 
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"By misleading and deceiving the public, the Philippines plots to gain sympathies and play the victim," Hua said.

Ya B please cant even prove your stupid @$$ claims
 
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National Development News:

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Philippines starts building world's first resort airport
By Louis Bacani (philstar.com)
Updated June 29, 2015 - 3:24pm


MANILA, Philippines - President Benigno Aquino III on Monday led the groundbreaking ceremony for the "world's first resort airport" in Cebu.

The Department of Transportation and Communication (DOTC) said the project covers the construction of a new world-class international passenger terminal building at the Mactan-Cebu International Airport and the renovation of the existing terminal and its conversion into an exclusively domestic facility.

The project is envisioned by concessionaire GMR-Megawide Cebu Airport Corporation (GMCAC) to be regarded as the first resort airport in the world.

The DOTC said the construction of the new terminal will be completed by 2018 while the renovation of the existing terminal is slated to be finished in 2019.

DOTC Secretary Joseph Abaya said the project is "touted to be the start of Philippine airports matching the best in the world."

"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," Abaya said.

In a statement, Presidential Spokesperson Edwin Lacierda said the project aims to increase the airport's annual passenger capacity from 4.5 million to 15 million.

"Improvements such as these help to stimulate our economy and boost our country’s reputation as a tourist and business destination," Lacierda said.

The project is the first airport public-private partnership (PPP) undertaking of the Aquino administration.

In 2014, GMCAC won the auction for the 25-year PPP contract after offering the government a premium bid of P14.4 billion. Operations and maintenance of the airport was turned over to the consortium last November.

GMCAC has started implementing "soft improvements" to the existing terminal or those improvements which did not require major civil works to enhance passenger experience at the gateway.

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Philippines starts building world's first resort airport | Business, News, The Philippine Star | philstar.com
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Business News:

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Philippines among most restrictive in SEA on FDI
By Danessa O. Rivera (The Philippine Star)
Updated July 2, 2015 - 12:00am


MANILA, Philippines - The Philippines is among the more restrictive economies in the Southeast Asian region when it comes to foreign direct investments (FDIs), a recent study by the Economic Research Institute for Asean and East Asia (ERIA) showed.

This was among the findings of the ERIA discussion paper titled “FDI Restrictiveness Index for Asean: Implementation of AEC (ASEAN Economic Integration) Blueprint Measures” authored by Shandre Mugan Thangavelu of the University of Adelaide-Institute of International Trade. It compared the situation between 2010 and 2014.

The paper noted developing economies in the Association of Southeast Asian Nations (Asean) tend to have a more open policy towards foreign investments compared to economies with more developed and mature industries.

“This suggests that economies with developed industries tend to adopt FDI policies to protect their domestic industries,” Thangavelu said.

The developing economies include Cambodia and Vietnam, while the more developed economies are Malaysia, Indonesia, Philippines and Thailand.

The author pointed out Vietnam and Cambodia have adopted key FDI policies to maintain their momentum of economic liberalization and integration in the region.

On the other hand, the more developed Asean economies of Malaysia, Thailand, Indonesia and the Philippines “have not progressed further from their relatively higher investment base and this poses an important challenge for their competitiveness.”

“These countries have to liberalize their services sector as it will become an important component of their growth,” Thangavelu said.

A major drag for the Philippines in terms of attracting FDIs is Executive Order (EO) 98 or the 9th regular Foreign Investment Negative List (FINL), which was signed by President Aquino on October 2012.

“The average score of specific commitments for the Philippines declined because of its Executive Order 98,” the author said, pointing out in particular the closure of its real estate services to foreigners.

Business groups have slammed the 9th FINL as “too negative” and had called on government to open more activities to foreigners.

It had a long list of professions restricted to Filipinos and set a a 49-percent limit to foreign equity in lending companies and a 60-percent cap on the foreign ownership of investment houses and financing companies regulated by the Securities and Exchange Commission.

But with the 10th FINL signed by the President just last month, the Philippines may be up for some improvements in terms of FDI restrictiveness.

The new list removed the foreign ownership restriction on lending firms, investment houses and financing companies and trimmed down the list of professions reserved only for Philippine nationals.

Meanwhile, the policy paper noted that Asean economies are protective in communication and transport sectors such as telecommunication, air, rail, and water transport services sectors.

“First, we observed that transport services are the least open to foreign firms. Of the various transport services, rail and road transport are the most protected by the domestic economy,” the author said.

Across the region, the paper also noted the manufacturing sector is more liberalized for foreign investment compared to the services sector.


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Philippines among most restrictive in SEA on FDI | Business, News, The Philippine Star | philstar.com
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Another Asian bank enters Philippines
By Kathleen A. Martin (The Philippine Star)
Updated July 3, 2015 - 12:00am


MANILA, Philippines - The Bangko Sentral ng Pilipinas has approved the entry of another Asian bank, a top official said yesterday.

“MB (Monetary Board) approved last Thursday, June 25, but they have not announced (the name) yet,” BSP Deputy Governor Nestor A. Espenilla Jr. said in a text message.

Espenilla said the foreign bank has acquired 100 percent of a domestic thrift bank so it would not have to set up a branch in the country.

This marks the fifth foreign bank allowed entry in the country following the passage of the amended foreign banks law in July 2014.

At present, the BSP is evaluating an application from one bank, Espenilla said.

RA 10641 or the amended foreign banks law removed the cap on foreign banks in the country earlier set at 10.

Foreign banks have been allowed to buy as much as 100 percent of any local bank, amending a previous provision that only permits them to own up to 60 percent of any Philippine bank’s voting stock.

The implementing rules and regulations was released in November last year by the BSP and the application process started in late December.

Since January, the BSP has approved the entry of Japan’s Sumitomo Mitsui, South Korea’s Shinhan Bank, Taiwan’s Cathay United, and the Industrial Bank of Korea.


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Another Asian bank enters Philippines | Business, News, The Philippine Star | philstar.com
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Philippine budget system needs improvement – IMF
By Zinnia B. Dela Peña (The Philippine Star)
Updated July 3, 2015 - 12:00am


MANILA, Philippines - The Philippines obtained a favorable score in the International Monetary Fund’s Fiscal Transparency Evaluation but there is still room for further improvement in some key areas particularly the budget system, the multilateral lender said.

“Overall, the country complies with generally good practices across all pillars, although with several areas for improvement in each of them,” the IMF said in its June 2015 report.

The objective of the FTE was to assess the Philippines’ fiscal reporting, forecasting and budgeting, and fiscal risks analysis and management practices against the standards set by the IMF’s draft FTE.

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

For one, the country’s fiscal reporting was seen to be relatively comprehensive, frequent and timely with many areas of good and advanced practices.

The IMF, however, noted a number of weaknesses in the quality and integrity of fiscal data, partly reflecting multiple agencies having responsibilities for fiscal reporting.

It said while external auditing of individual government entities is the responsibility of the Commission on Audit (COA), it is also assigned the task of compiling the government annual financial reports, which is contrary to international standards.

Apart from these, the IMF noted the Philippine budget system’s unusually large amount of complexity and flexibility, which complicate fiscal reporting and give rise to vulnerabilities.

“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,” the IMF said.

“In addition, the existing budget framework allows for the government to significantly alter the composition of expenditure during the course of the fiscal year,” the IMF said.

To address the country’s fiscal transparency gaps, the government must focus on publishing a set of budget documents that provides the public with the means to track the operations of government from one year to the next and over the course of the year; and compare the budget to the final accounts on a transparent basis.

Other reforms include better allocation of resources to priority areas over the medium-term, delineating more rigorously the government’s policy activities from purely commercial activities and ensuring that consolidated financial reports are audited in a fully-independent manner.

“High-quality reporting on public finances is fundamental to fiscal transparency. It provides a sound basis for analyzing and understanding the government’s financial position and performance, for forecasting and budgeting, for designing appropriate fiscal policies and managing risks, and for holding governments to account,” the IMF said.

Budget and Management Secretary Florencio Abad said the IMF’s report validates the Aquino administration’s good governance agenda.

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Philippine budget system needs improvement – IMF | Business, News, The Philippine Star | philstar.com
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PSEi takes cue from upbeat Asian bourses
By Richmond S. Mercurio (The Philippine Star)
Updated July 3, 2015 - 12:00am


MANILA, Philippines - Share prices posted slight gains for a second consecutive session yesterday as investors remained cautious on the aftermath of Greece’s payment default to the International Monetary Fund.

The Philippine Stock Exchange index (PSEi)rose 0.04 percent or 3.16 points to close at 7,578.31, while the broader All Share index picked up 0.11 percent or 4.62 points at 4,334.99.

“Volatility prevailed as fund managers weigh the merits of Greece securing a different loan via the European Stability Mechanism, plus precedence of its move to default on its loan with the IMF. This might be visible in the currencies mart, as a potential ‘Grexit’ keep investors on their toes,” said Grace Cerdenia, research head at F Yap Securities.

Stocks took inspiration yesterday from the upbeat Asian markets which was captained by Japan’s Nikkei which firmed up 1.1 percent.

Local counters were led by property firms which added 1.14 percent, while holding firms and financial companies moved the opposite direction and declined 0.43 percent and 0.41 percent, respectively.

Advancers edged out decliners for a second consecutive session, 87 to 64, while 62 stocks were unchanged.

Turnover value was upbeat at P7.6 billion compared to the previous day’s P6.46 billion.

“So far the index is holding at 7,560 support.Formidable resistance to support a bullish move will be the break on the upside from pivotal level 7,760, the upper end of the downtrend channel. If broken convincingly could mark an exit from the downtrend and lead to a possible sideways move/consolidation or even a reversal.

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PSEi takes cue from upbeat Asian bourses | Business, News, The Philippine Star | philstar.com
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Business News:

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Infra underspending to result in lower GDP
By Ted P. Torres (The Philippine Star)
Updated July 5, 2015 - 12:00am


MANILA, Philippines - The Aquino administration’s underspending is seen to be a major threat to the country’s growth, the Australia and New Zealand Banking Group Ltd. said.

“Unless public spending fires up, risks to Philippine full-year economic growth outlook skew to sub six percent for the full-year 2015,” ANZ said.

While still tagging the Philippines as the “strong man of Asia,” the ANZ expressed concern that GDP growth could weaken if public underspending especially in the infrastructure side would continue.

“Philippines growth below six percent will be both an unusual and an unexpected event,” it said in a report.

The government expects the local economy to grow by six to seven percent this year.

ANZ said even if investors turn negative on growth in the short term, growth differentials would be minimal as foreign investors might return to the market as opportunities become enticing. But improvement or otherwise in the fiscal balance occurring as a result of fiscal underspending would be considerable, it added. With remittances providing a structural current account surplus, renewed public spending should serve to add to the resilience of the Philippines as the US Fed tightening cycle commences.

Likewise, the upcoming presidential election could fire up public spending. But in the absence of this, a growth/ fiscal balance trade-off falls into place, ANZ said.

“The strong man of Asia seemed a little bit unsteady on his feet over the first quarter of 2015,” ANZ said.

The Philippine economy slowed to 5.2 percent in the first quarter mainly due to state underspending.

Economic growth made a considerable downside surprise in the first quarter on the back of weak net exports - which the bank views as being aligned to the soft US GDP profile over the same period – and ongoing weakness in government spending.

With inflation seen to ease in the coming months, ANZ expects the Bangko Sentral ng Pilipinas to maintain its key policy rates for the remainder of the year.

For 2016, the foreign bank is forecasting Philippine GDP to hit six to 6.1 percent.

“This easing of fiscal policy should see the Philippines as one of the first Asean central banks to follow the Fed higher,” ANZ said.

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Infra underspending to result in lower GDP | Business, News, The Philippine Star | philstar.com
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Moody’s sees factory output picking up in May
By Kathleen A. Martin (The Philippine Star)
Updated July 5, 2015 - 12:00am


MANILA, Philippines - Factory output growth could have picked up in May after easing to a dismal 1.4 percent in April amid an improving US economy, Moody’s Analytics said in a research note.

“Industrial production in the Philippines likely enjoyed a partial rebound in May… Oil prices finding a floor has helped chemical production, while improvements in US demand are lifting manufacturing,” the research firm said.

Moody’s Analytics has forecast manufacturing growth to have risen to 3.5 percent during the said month.

“Higher government spending in coming months will lift domestic demand and, in turn, food production, the highest component of the survey,” the company said.

Official May factory output data will be released on Friday, July 10.

Latest government data showed manufacturing output, as measured by the volume of production index, climbed by only 1.4 percent in April after rising by 16.1 percent in March.

The expansion was driven by increases in the manufacture of chemical products, tobacco products, furniture and fixtures, basic metals, textiles, printing, machinery except electrical, paper and paper products, leather products, and beverages.

However, the value of production index contracted by 4.2 percent in April from a growth rate of 10.9 percent last March due to a decline in the sales of petroleum products, food manufacturing, electrical machinery, miscellaneous manufactures, fabricated metal products, wood and wood products, transport equipment, and furniture and fixtures.

The manufacturing sector has helped the economy achieve a stellar growth of 7.2 percent in 2013. Last year, factory output growth was only in single digits except during the second quarter when it was between 10 and 12 percent.

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Moody’s sees factory output picking up in May | Business, News, The Philippine Star | philstar.com
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MJIC raises P674M for Chinatown hotel project
By Richmond S. Mercurio (The Philippine Star)
Updated July 5, 2015 - 12:00am


MANILA, Philippines - MJC Investments Corp., a company majority owned by the Manila Jockey Club Inc. of the Reyno family, has raised P673.79 million from additional shares subscription by an investor group from Hong Kong.

MJIC said its board of directors accepted the offer of the strategic investors headed by Teik Seng Cheah, to subscribe to an additional 673.79 million shares to be taken from the company’s increase in its authorized capital stock.

The listed company said the additional equity infusion would support the firm’s capital build-up program intended for the completion of its hotel and entertainment project in Sta. Cruz, Manila.

“The transaction shall provide the corporation with funds for the ongoing construction of its hotel and entertainment project, a five-star hotel, tourism and entertainment hub which is located on its 7,510-square meter property at San Lazaro Tourism and Business Park (SLTBP) in Santa Cruz, Manila,” MJIC said.

The 18-story hotel and entertainment project is planned to have 160 suites, a 1,000-person capacity column-less ballroom, more than 5,000 square meters of themed event space, and more than a thousand parking slots.

It is targeted to be fully operational within the year.

“This project marks the first-ever construction of a five-star hotel and high-end entertainment project of this scale to be built in the heart of Greater Chinatown,” the firm said.

After due bidding, MJIC said it has chosen Datem Inc. as the general contractor for the civil works of the hotel and entertainment project with a contract value of P926 million.

SLTBP is currently home to the SM San Lazaro mall and a high-end residential condominium project jointly developed by Ayala Land and MJIC.

MJIC was initially incorporated to be engaged in the mining business, but its business has already diversified to focus on the growing Philippine tourism industry.

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MJIC raises P674M for Chinatown hotel project | Business, News, The Philippine Star | philstar.com
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National Development News:

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People like Bob Ong would HATE to hear this news...

On lifting foreign equity restrictions
HIDDEN AGENDA By Mary Ann LL. Reyes (The Philippine Star)
Updated July 5, 2015 - 12:00am


Just recently, Vietnam announced in a landmark decree it is lifting the 49 percent foreign equity limit in public companies, subject to certain exceptions such as in banking, beginning September. Decree 60 is intended to boost Vietnam’s stock markets and provide an extra boost to the equitization of State enterprises.

But our trade officials say there is nothing to worry about. According to Trade Undersecretary Adrian Cristobal Jr., they do not anticipate being affected by Vietnam’s decision, saying we are in a better position in aspects of the economy such as macroeconomic fundamentals and the banking system.

From being Asia’s economic giant next only to Japan in the post-war era, the Philippines failed to catch up. Frontrunners Singapore, Thailand, Malaysia and Indonesia are too far in front and the Philippines can only hope to compete with second-tiers Vietnam, Cambodia and even Myanmar.

Philippine Chamber of Commerce and Industry (PCCI) president Alfredo Yao acknowledged the fact that Vietnam is our competitor so we have to be better than them.

For his part, Makati Business Club (MBC) executive director Peter Angelo Perfecto said Vietnam’s move “is an added plus for their competitiveness” and “the Philippines must consider similar policy shifts that... allow us to compete more aggressively with our neighbors.”

Meanwhile, Philippine Stock Exchange (PSE) president Hans Sicat said Vietnam’s move would give it a potential comparative advantage over the Philippines, everything else being equal. This, he added, may be more pronounced as Asean economic integration takes place and financial market integration also moves forward.

Over the last five years, foreign direct investment (FDI) inflows into Vietnam rose from $7.6 billion in 2009 to $9.2 billion in 2014. In contrast, FDI inflows to the Philippines only totaled $1.963 billion in 2009 and rose to $6.2 billion in 2014.

The reversal of fortunes actually started at the turn of the century when Vietnam’s FDI inward stock surpassed that of the Philippines, $14.73 billion against $13.762 billion.

In 1990, the Philippines was way ahead of Vietnam, as its FDI inward stock totaled $3.268 billion compared to Vietnam’s paltry $243 million. But by 2014, Vietnam’s FDI inward stock already reached $90.99 billion, or over a third more than the Philippines’ $57.093 billion.

The good thing is that foreign and local business leaders believe the FDI battle is not yet over for the Philippines. That is, if policymakers and lawmakers will be serious enough to do a makeover of the local business environment that analysts see as hostile to investors and investments.

Alongside poor infrastructure, a high tax regime and an unpredictable policy climate marked by government’s perceived penchant for changing rules midstream and flouting its contracts with private partners, one more facet that has turned off the business community is the inward-looking Constitution that is overly protective of local businesses.

Analysts believe the protectionist provisions of the 1987 Charter, particularly the rule that puts a 40 percent cap on foreign ownership, is a major deal-breaker, as it is anathema to investors at this day and age when globalization has spawned an increasingly borderless world.

Bank of the Philippine Islands (BPI) associate economist Nicholas Antonio Mapa observed that Vietnam’s move “could further limit the ability of the Philippines to attract FDI flows given the many impediments to investment in the country.”

Foreign ownership restrictions has been cited in the past as a reason NOT to invest in the Philippines, he said.

Henry Schumacher, executive vice president of the European Chamber of Commerce of the Philippines (ECCP), shared the concern of local business leaders, believing the solution lies in a proposed legislation that aims to make the country as attractive as, if not more attractive than, Vietnam and Asean’s other FDI magnets.

Schumacher said Vietnam’s lifting of its foreign ownership cap makes it “more attractive for foreign investors, especially in the light of a hardly improved FINL (Foreign Investment Negative List) and the withdrawal of House Resolution No. 1, which was supporting the amendment of the economic provisions of the Constitution which, in turn, could have led to more competition in the country.”

Had Congress passed it before its June recess, the Philippines would have beaten Vietnam to the draw as the resolution seeks to open the Constitution to amendments lifting foreign ownership caps for businesses.

But there is still enough time for both Houses to pass the resolution of both Houses as the 16th Congress still has seven working months left to work on it.

Under the resolution principally authored by House Speaker Feliciano Belmonte, resolution, a five-word phrase —“unless otherwise provided by law”—shall be added to seven economic provisions of the 1987 Charter to allow greater participation of foreigners in Philippine businesses.

With the insertion of “unless provided by law,” the resolution will remove restrictions or caps on the following: exploration, development, and utilization of natural resources; alienable lands of the public domain, including agricultural, forest or timber, mineral lands and national parks; conveyance of private lands; reserved investments; grant of franchises, certificates, or any other forms of authorization for the operation of public utility; ownership, control and administration of educational institutions; and ownership and management of mass media and on the policy for engagement in the advertising industry.

The inclusion of the five-word phrase means that amending the Constitution would only require a simple legislation that needs to be approved by both the Senate and the House — and then subjected to a plebiscite.

Unlike ordinary legislation, constitutional amendments require an absolute three-fourths vote by both Houses of Congress.

Hence, for the resolution to move on to a plebiscite, it needs to muster at least 217 votes in the 289-member House and at least 18 votes in the 24-member Senate.

But once approved by Congress, the resolution does not have to be signed by President Aquino into law like the regular enrolled bills passed by both chambers, because it needs only to be ratified through a plebiscite synchronized with the 2016 polls.

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On lifting foreign equity restrictions | Business, News, The Philippine Star | philstar.com
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