‘Electoral Mayhem’

The House of Representatives has approved a bill creating a Department of Information and Communications Technology. This should please businessmen, who have been pushing for a DICT for several years, and who last week listed other moves that the Aquino administration could undertake in its final months to raise levels of foreign direct investment.

FDI inflow in the first six months of the year dropped 40 percent to $2 billion from the $3.4 billion during the first half of 2014. New FDI projects also went down by 48 percent, from $5.4 billion in the first half of 2014 to $2.8 billion from January to June this year.

Last year was a record one for net FDI inflow, but the Philippines was still way behind its neighbors, with tiny Singapore getting a whopping $67.4 billion, Indonesia $25.7 billion, Thailand $11.8 billion, Malaysia $10.5 billion and Vietnam $6.6 billion.

In a statement, the Joint Foreign Chambers of the Philippines listed what can be done to encourage more FDI. The businessmen believe the suggestions can still be accomplished within the term of President Aquino.

The creation of the DICT will still have to be approved by the two houses of Congress and signed into law. The foreign chambers are also pushing for the enactment of the Customs Modernization and Tariffs Act and Freedom of Information Act as well as amendments to the Apprenticeship Act, BOT Act, Foreign Investment Negative List and the Right-of-Way law.

The investors want traffic congestion eased in Metro Manila and flight delays reduced at the NAIA. They are hoping there will be no repeat of the congestion in the Port of Manila and there will be no blackouts during the dry season next year. They want more public-private partnership projects awarded and VAT refunds for eligible companies processed quickly. They are also hoping that the Philippines will move to join the newly formed Trans-Pacific Partnership and show progress in negotiations for trade and investment treaties with the European Union.

フィリッピンの場合はインフラの不足が特にひどい。港湾の混雑や飛行場の整備遅れなどが特に目立つ。それ以前に前から問題になっている汚職のひどさもある。マルコスがフィリピンを台無しにしてしまった。

Philippine economic growth accelerated less than analysts estimated last quarter, underscoring the external risks that policy makers are guarding against even as spending by households and the government climb. The peso fell.

Gross domestic product increased 6 percent in the three months through September, the Philippine Statistics Authority said in Manila Thursday. That compares with a median estimate of 6.3 percent in a Bloomberg survey of 21 analysts, and a 5.8 percent pace in the second quarter.

President Benigno Aquino’s economic team is counting on consumption and state spending to boost growth to 6.9 percent this quarter, as the outgoing leader seeks to strengthen his infrastructure legacy and boost the resilience of one of Asia’s fastest-growing economies. Quickening growth supports Bangko Sentral ng Pilipinas’ decision to refrain from joining neighbors including Singapore and Thailand in adding stimulus this year, with most economists forecasting it will hold its benchmark rate until the third quarter of 2016.

"Weak global demand will drag on GDP growth even as the domestic economy remains pretty solid," said Michael Wan, a Singapore-based economist at Credit Suisse Group AG. "Services, consumption are still very strong and the growth recovery momentum is intact. The central bank is likely to keep rates unchanged."

The peso, which sank to a six-year low this month, fell 0.2 percent to 47.05 per dollar as of 11:18 a.m. in Manila, according to prices from Bankers Association of the Philippines. The Philippine Stock Exchange index was little changed.

Philippine election officials disqualified Grace Poe, a frontrunner in the May presidential race, from seeking the office over questions about her citizenship, a decision that risks creating chaos in the contest.

The seven-member Commission on Elections ruled that Poe, the adopted daughter of a popular movie icon and first-term senator, failed to prove she’s a natural-born Filipino citizen -- a legal requirement for the office, Chairman Andres Bautista said at a televised briefing in Manila on Wednesday. The decision comes after the Senate Electoral Tribunal affirmed her citizenship last month and rejected a lawsuit seeking to oust her from the senate. That case is on appeal at the Supreme Court, which may end up having to rule on her disqualification.

Poe, 47, was abandoned as a baby on the steps of a church in Iloilo city and raised by the late actor Fernando Poe Jr. Little is known about the nationality of her birth parents. While Poe renounced her citizenship in 2001 to reside in the U.S. with her husband, she later returned and became a dual Philippine-U.S. citizen.

“I’m a true Filipino who has lived in our country for more than 10 years,” Poe said in a statement. “I trust that the Supreme Court will favor the truth and the people’s right to choose their leaders.”

‘Electoral Mayhem’

“A scenario in which people end up voting for Poe just to see her irreversibly disqualified is bound to create more commotion, if not electoral mayhem,” said Richard Javad Heydarian, an assistant political science professor at De La Salle University in Manila. “Given her popularity, there’s bound to be a backlash.”

The commission’s decision came out on the same day that a new poll showed her tied for the lead. Poe and Vice President Jejomar Binay each had 26 percent support in a poll by the Social Weather Stations conducted between Dec. 12 and 14. They were followed by Mar Roxas, President Benigno Aquino’s preferred successor, with 22 percent and Davao City Mayor Rodrigo Duterte with 20 percent. Senator Miriam Defensor-Santiago, who’s making a third bid for the presidency, trailed with 4 percent.

The presidential bid by the 70-year-old Duterte, a crime-busting mayor and a self-confessed womanizer, is also being reviewed by the commission. Duterte managed to enter the race last month, after the filing deadline, by replacing a registered contender from his party.

The Philippine peso fell the least in emerging-market Asia this week as the country’s robust economy insulated it from China’s slowdown and rising U.S. interest rates.

The peso lost 0.3 percent to 47.155 a dollar at the close in Manila, taking its drop this week to 0.2 percent, according to prices from Bankers Association of the Philippines. It has declined 4.5 percent over the past 12 months, with only the Taiwan dollar performing better among Asian developing nations.

Buoyed by remittances from overseas workers and a growing business-process outsourcing industry, the Philippines is forecast to outpace the rest of Southeast Asia’s developing-nation economies and grow 6 percent this year, according to Bloomberg surveys. The Philippines has buffers to counter risks from China, higher U.S. interest rates and oil-price volatility, Bangko Sentral ng Pilipinas Governor Amando Tetangco said at a forum in Manila on Thursday.

“Investors still need to search for the best hedges to a widely-anticipated strong U.S. dollar scenario and I think the Philippine story is still the best in the region,” said Alan Cayetano, head of foreign-exchange trading at Bank of the Philippine Islands in Manila. “We are still susceptible to further peso depreciation but we have a good chance to outperform most of our Asian peers in the medium term.”

The yield on the 10-year government bonds fell one basis point to 4.11 percent, according to a end-of-day fixing by Philippines Dealing & Exchange Corp. The yield rose one basis point this week.

2015年の成長率は5.8％（2016-1-31）

サービス業が好調で+6.7％であった。
インフラ投資と外資の進出で+13.6％の固定資本投資が増えた。

輸出は+5.5％であった。中国向け輸出は鈍化している。

フィリピンにとっての石油下落の得失（2016-2-1）

Bloomberg; 2016-2-1

フィリピンは非産油国なので原油の値下がりは歓迎だが、海外出稼ぎ労働者が多く、彼らは仕事を失うものが少なくない。通貨も高くなる。

Cheap oil should be a good thing for a country like the Philippines that imports almost all of its fuel, but there are 10 million reasons why that may not be the case.

That’s how many Filipinos work overseas, many of them on rigs, tankers and as domestic help or construction workers in oil-producing nations in the Middle East. Together they sent home $22.8 billion in the first 11 months of 2015, around 10 percent of gross domestic product. The potential for a slowdown in remittances is being closely monitored, the central bank said last week.

A prolonged period of oil at less than $30 a barrel could create an economic headache for the successor to President Benigno Aquino, who steps down in June, and may further weaken the peso, which has fallen the most in Southeast Asia this year. The negative impact on remittances and less revenue from fuel taxes will outweigh the positive effects, according to Benjamin Diokno, the country’s budget secretary from 1998 to 2001.

“We’re heavily dependent on overseas Filipino workers,” said Diokno, who is now an economics professor at the University of the Philippines in Manila. “Some of them are coming home also in part due to war, which only magnifies the problem.”

More Widespread

The share of remittances coming from the Middle East could be as high as 40 percent, compared with 23 percent in the official data, according to a Jan. 27 research note by Michael Wan, a Credit Suisse Group AG analyst in Singapore. Remittance growth slowed to 3.6 percent in dollar terms last year through November, from 5.8 percent in 2014, central bank data show. Volumes have held up reasonably well so far, said Wan.

That could change as the impact of a 29 percent drop in Brent crude over the past six months forces Saudi Arabia to cut generous subsidies to its citizens, while the United Arab Emirates’ Etihad Rail suspended a major rail project this week after firing almost a third of its workforce. Brent recovered to around $35 on Monday after falling to a 12-year low of $27.10 a barrel on Jan. 20.

“Before, when the trouble would be concentrated in one of the countries in the Middle East and North Africa, the workers could just simply move to a neighboring country and find employment,” central bank Governor Amando Tetangco said Jan. 25. “Now the trouble is more widespread.”

The Department of Labor is monitoring the situation in the Middle East in the light of the possible retrenchment of Filipino workers there, although has yet to see any major job losses, Communications Secretary Sonny Coloma said in a statement on Monday. The department “is prepared to assist workers that may be affected in securing alternative employment and livelihood opportunities,” he said.

Job Losses

As well as declining oil prices, a more general slowdown in global trade is affecting the job prospects of Filipino seamen. Many drillers and oil-service companies have suspended operations and shipping companies are also hurting, said Nelson Ramirez, the president of United Filipino Seafarers.

“I have talked to one of the biggest crew suppliers of offshore vessels,” he said in Manila. “They have many laid-up ships. There will be more job losses.”

That could take a toll on the Philippines’ current-account surplus,which narrowed to $5.6 billion in the nine months through September from $6.8 billion in the year-earlier period, according to the central bank. Gross domestic product, already rising the fastest among Southeast Asia’s major economies at a 5.8 percent pace in 2015, will increase 6 percent this year, a Bloomberg survey shows.

While there’s already a slowdown in remittance growth from the Middle East, the current account will remain in surplus, said Joey Cuyegkeng, an economist at ING Groep NV in Manila. He forecast the peso, which dropped 7.5 percent over the past 12 months, will fall another 2.3 percent by the end of the year.

External risks are on the rise, but the Philippines has enough buffers in place including $80.6 billion of foreign-exchange reserves and growing revenue from its business-process outsourcing industry, said Paulo Magpale, treasurer at BDO Private Bank Inc. in Manila.

Bigger Cutbacks

“We won’t be shaken easily during bad times,” said Magpale, who forecast the peso will strengthen 1.4 percent by the end of the year. The peso fell 0.1 percent to 47.68 a dollar as of 12:25 p.m. in Manila on Monday, according to Bankers Association of the Philippines. The currency has dropped 1.1 percent this year.

Slowing remittance growth is unlikely to have a major impact on Philippine GDP, according to Credit Suisse’s Wan, who is forecasting expansion of 6.2 percent this year. Weaker private consumption usually leads to expatriate Filipinos sending more money home to help families through tough times and savings on fuel costs will spur domestic spending, he said.

“The real test might be yet to come,” said Wan. ”If oil prices continue to head lower, we could see bigger cutbacks by Middle East governments, which will weigh on remittance prospects.”

The country’s Gross Domestic Product (GDP) in the fourth quarter of 2015 grew by 6.3 percent, the highest quarterly growth for the year. The growth, however, is slower than the 6.6 percent posted in the same period of last year.

The fourth quarter GDP was driven by the Services sector which accelerated to 7.4 percent from 5.6 percent while Industry decelerated to 6.8 percent from 9.1 percent. On the other hand, Agriculture contracted by 0.3 percent from a growth of 4.2 percent in the previous year.

The fourth quarter growth paved the way for the economy to grow by 5.8 percent for the whole year of 2015 from 6.1 percent in 2014. Services was the main driver of the economy at 6.7 percent growth from 5.9 percent the previous year. Industry and the entire Agriculture both decelerated with 6.0 percent and 0.2 percent from 7.9 percent and 1.6 percent, respectively.

Meanwhile, Net Primary Income (NPI) from the Rest of the World grew by 5.4 percent in the fourth quarter of 2015 from 1.4 percent the same period last year, driving the Gross National Income (GNI) to post a growth of 6.2 percent from the previous year’s 5.7 percent

- See more at: http://www.nscb.gov.ph/sna/2015/4th2015/2015qpr4.asp#sthash.ISepkZCo.dpuf

The United States and the Philippines announced last Friday that five of the country’s military bases would be opened up to American forces under the Enhanced Defence Cooperation Agreement (EDCA). The implementation of the Philippine basing arrangement is just one component of the accelerating US military build-up throughout the Indo-Pacific region as part of the Pentagon’s encirclement and war preparations against China.

The two countries signed EDCA in 2014 but the Philippine Supreme Court only rejected legal challenges to the agreement in January. Last week’s announcement followed two days of high-level discussions in Washington on an offer by the Philippine administration in February to make eight bases available to the US military.

The five “agreed locations” include the Antonio Bautista Air Base on Palawan Island, directly adjacent to the contested Spratly Islands in the South China Sea. Over the past year, Washington has dramatically heightened tensions with Beijing, denouncing its land reclamation activities and “militarisation” of the South China Sea. Last October and again in January, US navy destroyers directly challenged Chinese maritime claims by intruding into the 12-nautical-mile territorial limit around Chinese-administered islets.

The US military will also have access to Basa Air Base north of Manila, Fort Magsaysay (a huge army base), Lumbia Air Base in Cebu and Mactan-Benito Ebuen Air Base in Mindanao. Defence Secretary Ashton Carter is due to visit Manila next month to finalise arrangements. However, Philip Goldberg, US ambassador to the Philippines, told the media he expected the initial movement of supplies and personnel to begin “very soon.” The US Congress has set aside $66 million for the construction of military facilities in the Philippines.

Beijing condemned the new basing deal and warned of the potential for conflict. A comment published on Saturday by the state-owned Xinhua news agency accused Washington of “muddying waters in the South China Sea and making the Asia Pacific a second Middle East.” On Monday, foreign ministry spokeswoman Hua Chunying pointed to the hypocrisy of the US accusing China of “militarising” the South China Sea, exclaiming: “Isn’t this kind of continued strengthening of military deployments in the South China Sea and areas surrounding it considered militarisation?”

As the US prepared to move military forces back into its former colony, General Dennis Via, chief of US Army Materiel Command, revealed to the media last week that Washington had secured other basing arrangements in Asia, including Vietnam, Cambodia and other unnamed countries. Under these deals, the US army will be able to stockpile equipment to enable troops to be deployed more rapidly to the region.

Via emphasised that the “activity sets” would be geared to low-intensity operations such as multinational training exercises and relief operations. “We are looking, for example, at in Cambodia placing a combat support hospital,” he said.

Reassurances that the US military presence will be benign are worthless. As in the Philippines, the Pentagon is treading carefully so as not to immediately inflame opposition to a foreign military presence. In the case of Cambodia and Vietnam, the death and destruction wrought in both countries by Washington’s neo-colonial war in the 1960s and 1970s is deeply etched into popular consciousness.

Washington has already forged closer diplomatic, economic and military relations with the Vietnamese regime, including backing its more aggressive stance in its disputes with China in the South China Sea. The US has lifted embargoes on the sale of arms to Vietnam, conducted joint military exercises and is seeking greater access to port facilities. However, the placement of US army supplies inside Vietnam for the first time since American troops were forced to withdraw in 1975 marks a turning point in the regime’s collaboration with US imperialism.

Beijing will be even more concerned about Cambodia’s decision to host US military equipment. The Cambodian regime has close ties with China and has attempted to block US efforts to press the Association of South East Asian Nations (ASEAN) to take a more confrontational stand against China over the South China Sea. Nevertheless, the US has been developing defence ties with Cambodia since 2006. These include limited training, port calls and joint exercises. Washington has also been exploiting the Lower Mekong Initiative to drive a wedge between Cambodia, Vietnam, Laos and Thailand, on the one hand, and China which is building dams on the upper Mekong River, on the other.

The latest basing arrangements with the Philippines, Vietnam and Cambodia come on top of the stationing of the US navy’s littoral combat vessels in Singapore and closer military collaboration with Indonesia and Malaysia. The rapid expansion of the US military presence in South East Asia goes hand in hand with the restructuring of permanent American military bases in South Korea, Japan and Guam, the upgrading of the US strategic partnership with India, and preparations to station long-range strategic bombers in northern Australia.

The US build-up is part of the Obama administration’s “pivot to Asia,” formally announced in 2011—a comprehensive diplomatic, economic and military strategy aimed at subordinating China to Washington’s interests. The “pivot” has greatly inflamed potential flashpoints for war throughout the region, particularly through its provocative activities in the South China Sea.

Speaking in Canberra last week, Admiral Scott Swift, commander of the US Pacific Fleet, delivered another broadside against China, declaring that “freedom of the seas” was “increasingly vulnerable to a state-led resurgence of the principle of might makes right.” He declared that he was troubled by “the undeniable signs of militarisation in select parts of the region, unprecedented in scope and scale.”

The cynicism of such statements knows no bounds. The US navy has not only carried out two “freedom of navigation” operations within territorial waters claimed by China, but earlier this month dispatched the nuclear aircraft carrier, the USS John C Stennis, along with its associated strike group, to the South China Sea for four days of exercises and patrols. Over the past quarter century, the US has ridden roughshod over international law on the basis of “might makes right” to engage in a continuous succession of wars, military interventions and provocations.

Now Washington is preparing for war on an even more terrible scale with China and pressing countries throughout the region into line. Swift’s visit to Canberra coincides with a concerted campaign to pressure the Australian government to mount its own “freedom of navigation” operation in the South China Sea—a reckless military exercise that always entails the risk of a miscalculation or mistake triggering a broader conflict.