Philippines is optimistic in 2012

The Philippine government is optimistic that prospects for 2012 and the near term are positive, given the current performance and significant developments in the local and global economies.

Socio-economic Planning Sec. Cayetano Paderanga, Jr. stressed that there are several factors for this optimism — holiday season spending, increased business and consumer confidence, a more stable macroeconomy, and steady consumer sentiment.
“We will also experience the full implementation of the P72 billion disbursement acceleration program of the government
in 2012,” said Paderanga.
Public construction and government consumption and services are likely to pick up in the coming quarters due to quick
releases and faster utilization of the program.
As of November 8, 2011, the Department of Budget and Management has already released PP43.4 billion or 60.2 percent of the total program cost.

NEDA has identified measures to boost exports such as diversification of exports and policies for closer integration with
fast-growing ASEAN economies.

“The economic managers have already asked our export promotion people for more complete programs that the cluster can recommend to Malacanang for funding.”

The services sector is expected to support growth, particularly real estate. Production in the agriculture sector will be boosted by the implementation of the Food Staple Self-Sufficiency Roadmap for 2011-2016.

Private consumption will be driven by increased spending of households in the year-end, particularly on items related to food and utilities.

Spending will be supported by broadly stable commodities prices and consumer sentiment indicates more optimism for 2012, said Paderanga.

The domestic economy grew by 3.6 percent in the first three quarters of 2011, lower than the 8.2 percent growth in the same period last year.

Sec. Paderanga noted that the country’s growth in 2011 was affected by the global economic slowdown amid uncertainties in Europe, continuing weakness of the US economy, and disasters in Japan, which led to weak exports.

The domestic growth was weakened by the contraction in the construction sector, which was pulled down by lower government spending, given the process improvements and project reviews for public construction projects.

On the supply-side, the services sector remained the largest contributor to growth in the first three quarters of 2011 with a 4.7 percent expansion.

Agriculture production has been sustained as the sector continued to recover from the El Niño in 2010 and despite the typhoons in the third quarter that caused losses and damages in the sector.

The industry sector decelerated to 1.4 percent as the decline in construction and utilities weighed down the sector’s growth.

On the demand side, growth was driven mainly by household expenditure boosted by consumer confidence, manageable growth in prices of basic commodities and sustained inflow of remittances from overseas Filipinos.

Total exports declined by 3.7 percent due to slow pickup from the supply-chain disruptions caused by disasters in Japan, weaker demand from major trading partners that are currently experiencing economic slowdown,
and currency appreciation.

Signs of recovery
Despite recent relatively slow economic perfor­mance, FMIC and UA&P Capital Market Research said the economy has showed signs of recovery amid the continued appreciation of the peso.
Inflation rate will return to below-5% pace for the rest of the fourth quarter of  2011 as a stable weather condition would normalize food prices on top of the declining fuel pump prices.
The report noted that dollar remittances form overseas Filipino workers (OFWs) would continue to be robust during the Christmas season with a full year remittance growth forecast at 6-8%.
FMIC and UA&P expects the peso-dollar exchange rate to be contained even with the instability of the global market given that the Philippines has a high foreign exchange reserve.
The government would keep its high-spending ways to stimulate the economy as fiscal deficit for 2011 would hit P180 billion.
Key policy rates would likely be reduced in the first quarter of 2012 as inflation rate would decelerate further at the same time that advanced economies continue to hob­ble.
Multinationals trim growth forecast
The Asian Development Bank (ADB) has projected a 4.8 percent growth of the country’s gross domestic product (GDP) in 2012 from the expected 3.7 percent growth in 2011.

The Philippine government has maintained its gross domestic product growth (GDP) forecast of 4.5 to 5.5 percent for 2011 and 5 to 6 percent in 2012.

ADB expects  economic growth to ease this year and remain close to levels in 2012.
Differences will depend on openness to trade and capital investments as well as the capacity of domestic demand to sustain growth.
Economic growth in emerging East Asia will continue to moderate into 2012 as growing sovereign debt problems in Europe and an anemic US economy raise the spectre of a deep global economic downturn.
“In the event that both the eurozone and the US economies contract sharply, the impact on emerging East Asia would be serious yet manageable, the ADB report said.

“The turmoil emanating from Europe poses a growing danger to trade and finance within emerging East Asia; so the region’s policymakers must be prepared to act promptly, decisively, and collectively to counter what could be an extended global economic slowdown,” said Iwan J. Azis, head of ADB’s Office of Regional Economic Integration.

Meanwhile, the World Bank (WB) is expecting  economic growth to moderate at 3.7 percent in 2011, weighed down by weak global demand as well as low public spending in the first three quarters of the year.

“Our projection hinges on the successful implementation of the government’s disbursement acceleration program and an acceleration in private consumption and investment, which have begun to grow faster in the last quarter,” WB country economist Karl Chua.

Growth in 2012 is projected to improve to 4.2 percent in line with regional forecasts. Higher 2012 growth hinges on improvement in exports, acceleration of public-private partnership (PPP) projects and private sector investment, and a full recovery of public spending.

Chua noted that the government is instituting important measures to improve transparency and accountability in public spending. Once these institutional reforms are in place, spending is expected to fully recover at cost-effective levels with more resolute impact on the country’s growth and development, Chua added.

Growth prospects for the Philippines and the Asean region are constrained by global uncertainties and by the impact of natural disasters.
“The slow progress towards the resolution of the debt problems in the Eurozone has intensified investors’ concerns over global growth and stability.”
“As capital flowed out of emerging markets into relatively safer havens, portfolio investments were reversed and stock markets lost value in East Asia,” the WB report said.
However, improving the investment climate in the Philippines through measures such as upgrading infrastructure to attract private investments will help the country ride out the global turbulence brought about by the Eurozone crisis and the fiscal woes of the United States.
The WB report maintains that the Philippines is well-positioned to cope with any new financial shock that might evolve from the current global turmoil.

“The country is well-insulated from the global financial crisis owing to a significant improvement of macroeconomic fundamentals and regulatory reforms already in place following the Asian financial crisis of 1997-98.”

However, the OECD Southeast Asian Economic Outlook predicted a higher growth for the six Southeast Asian economies — Indonesia, Malaysia, the Philippines, Singapore, Thailand and Viet Nam — at 5 percent for 2011 and 5.6 percent in 2012.

The OECD report noted that global uncertainties and natural disasters shed a negative light on the growth prospects of the region as the overall Southeast Asia will have a solid growth performance through 2016.

As growth in external demand moderates for the region, ASEAN economies are turning towards domestic drivers of growth in the medium term and are beginning to explore ‘green growth’as an alternative strategy for long-term sustainable development.

Inter-agency task force to harmonize reporting process

The Philippine government has created an inter-agency task force that would harmonize, unify, streamline and simplify all existing monitoring and reporting requirements and processes.
The task force is headed by Department of Budget and Management (DBM) as chair and co-chaired by the Office of the Executive Secretary (OES) with the National Economic and
Development Authority (NEDA), Presidential Management Staff (PMS) and Department of Finance (DOF) as members.
The inter-agency task force would develop a common set of performance scorecard and design a government executive information system.
It would also involve the Civil Service Commission (CSC) and the Career Executive Service Board (CESB) in order to align the Strategic Performance Management (SPMS) of CSC and the Career Executive Service Performance Evaluation System (CESPES).
Other government departments, offices or agencies, such as the Commission on Audit (COA) and the Office of the Ombudsman would be invited by the task force to provide their insights on the harmonization process.
The task force would also involve the private sector, through the National Competitiveness Council (NCC), for the purpose of providing inputs and aligning other advocated performance management systems.

The Development Academy of the Philippines (DAP) would serve as the secretariat of the task force as well as its technical resource institution.

Philippine handicrafts eye 10% growth in 2012

The Philippine Chamber of Handicraft Industries, Inc. (PCHI) is targeting a 10 percent export growth for 2012 as more orders are coming in.
PCHI president Dennis Orlina said that negotiated sales were estimated at $3 million with more sales booked from quality and new foreign buyers.

The United States and Europe remained the biggest buyers of Philippine products. A few of these buyers came from Germany and Netherlands.

Orlina said an aggressive ten percent growth in 2012 from 2011’s estimated $80 to $90-million revenues is attainable.

The local market could grow along with the global handicraft market which is rising eight to 12 percent a year.

However, industry players need to undertake various strategies to become cost competitive and realize target growth.

“We are looking at alternative avenues and the possibility of relocating in some areas where we can get cheaper operational expense,” he said.

To lower transport costs, Orlina said it is imperative for the country to harness its alternative energy resources.

He added other fuel options like the liquefied petroleum gasoline (LPG) should be also considered to reduce inter-island and land freight.

Orlina also underscored the importance of strengthening the value chain which is a critical link in the development of handicraft industry.

Filipino job applicants prefer local jobs

Ninety-eight percent of applicants registered in the Philipine’s online job matching system, the Phil-JobNet, prefer local jobs even as employment opportunities in the business process outsourcing (BPO) sector continue to remain robust.
Labor and Employment Sec. Rosalinda Baldoz said opportunities in the BPO sector, particularly for call center service workers, rose consistently from the first to the third quarters of 2011, sustaining their number one position among all other Phil-JobNet vacancies and affirming the Philippines’s status as the BPO hub of the world.
The Bureau of Local Employment (BLE) report showed that BPO job vacancies reached 11,237 in the first quarter; 13,454 in the second quarter; and 15,130 in the third quarter of 2011.
“BPO companies continue to expand their business operations in the Philippines. On the demand side, from the year 2010 to the past three quarters of 2011, call center service workers hold the number one position in the vacancy list,” said Criselda Sy, BLE director.
To further boost employment in the BPO sector, Sec. Baldoz noted that the Technical Education and Skills Development Authority (TESDA) is expanding to key cities of the country the further development of skilled workers capable of filling the in-demand opportunities in the BPO sector.
Baldoz said the government had already released a P1.1-billion disbursement acceleration fund to TESDA that would be used to develop qualified skilled labor in the five priority sectors. Of the amount, P500 million is earmarked for the development of “near-hires” in the BPO sector.
In the third quarter of 2011, the BLE reported that customer service assistant held the number two slot in the Phil-JobNet, followed by domestic workers, carpenters, and drivers.
On the supply side, the position of production worker topped the list of positions sought by Phil-JobNet registrants in the third quarter, followed by nurses, service crew, sales clerks, and cashiers.
Baldoz said that these jobs posted by local employers complement the employment strength of the BPO sector and increase the potential for matching appropriately skilled Filipino labor for other industries.
The Phil-JobNet, the official job portal of the government in the Internet, fits the aim of President Benigno S. Aquino III, in his 22-point policy platform on labor and employment, “to make us more competitive and employable while promoting industrial peace based on social justice and address the labor mismatch problem by promoting better coordination between employers, academia, and government, through strengthening both public and private sector labor market information and exchange.”
The DOLE  encourages job seekers, including fresh graduates entering the country’s labor force for the first time, to consider meticulously the career paths they would prefer to pursue.
“Students and skill trainees ought to meticulously study and consider in-demand but not oversubscribed courses, and to opt for skills training, upgrading, or retooling that would boost their competitiveness and employability,” Baldoz said.

“Our labor market information system, including the Phil-JobNet, is there to provide data that would assist them in making informed, confident decisions to build a productive future,” she added.

Philippine imports up 12% in first 10 months

Philippine’s total imports grew by 12.2 percent to $50.5 billion in the first 10 months of the year compared to $45 billion posted during the same period in 2010.
The National Statistics Office (NSO) reported that total merchandise imports for October 2011 posted a modest growth of 2.3 percent to $5 billion from $4.9 billion in 2010.
Total trade for October 2011 grew by 6 percent to $9.1 billion from $9.6 billion in October 2010.  Thus, the balance of trade in goods (BOT-G) registered a deficit of $932 million, higher than last year’s deficit at $116 million.
Import bill for electronic products in October 2011 dropped by 20 percent to $1.23 billion  from $1.54 billion registered in October 2010.
Among the major groups of electronic products, semiconductors having the biggest share at 17.6 percent, also contracted by 27.4 percent from $1.220 billion last year to $885.55 million in October 2011.
Imports of mineral fuels and lubricants rose by 28.4 percent to $1.15 billion from $902.82 million last year.
Transport equipment registered as the country’s third top import for the month with 6.7 percent share to total imports and valued at $337.49 million, down by 9.1 percent from $371.32 million posted a year ago.
Industrial machinery and equipment contributing 5.3 percent to the total import bill was the country’s fourth top import for the month with payments placed at $267.20 million, an annual growth of 13.4 percent from last year’s $235.60 million.
Fifth in rank and with a 2.6 percent share to total imports was iron and steel amounting to $132.89 million; higher by 38.6 percent from its year ago level of $95.89 million.
Imports of plastics registered $123.77 million, up by 2.2 percent from last year’s record of $121.09 million.
Other top imports for October 2011 were chemicals valued at $122.39 million (2.4%); telecommunication equipment and electrical machinery amounted to $98.90 million (2.0%); cereals registering the highest positive annual growth of 68 percent in October 2011 to $84.94 million (1.7%); and medicinal and pharmaceutical products, $78.25 million (1.6%).

Filpinos are hopeful for the new year

Ninety-five percent of adult Filipinos are entering the New Year with hope rather than with fear (4%), according to the Fourth Quarter Social Weather Survey conducted from December 3 to 7, 2011.

This matches the all-time high 95% in 2002 who were hopeful of entering the 2003 New Year. It is also 2 points higher than the 93% who entered 2011 New Year with hope.

Hope with the coming year has customarily been at high levels, starting at 87% when SWS first polled about it in December 2000 and 88% in December 2001.

New Year hope reached its record-high 95% in December 2002 and 90% in December 2003 before it declined to 81% in December 2004 and 85% in December 2005.

It rebounded and remained steady at 91% to 92% from 2006 to 2008 before it declined to 89% in 2009.

It recovered to 93% in December 2010 and again reached record-high 95% in December 2011.

The survey question was patterned after polls conducted annually by the Allensbach Institute of Demoskopy in Germany.

Hope with the coming year is widespread in all areas, with record-highs in Mindanao and Metro Manila.

Compared to 2010, New Year hope increased by five points in Mindanao, from 89% to 94%, a record-high for that area that was first reached in 2002. 

It stayed at record-high 96% in Metro Manila.

It hardly changed in the Visayas, from a record-high 97% in 2010 to 96% in 2011, and in Balance Luzon, from 94% to 95%.

New Year hope is also high in all socio-economic classes, with a new record-high set among class E.

Compared to 2010, New Year hope rose by four points among the very poor class E, from 89% to a new record-high 93%. This surpasses the previous record-high of 91% in 2002, 2003, 2006, and 2007.

New Year hope stayed at record-high 97% among the middle to upper classes ABC.

It hardly changed among the masa class D, from 95% to 96%

New Year hope is higher among those who expected a happy 2011 Christmas than among those who expected a sad Christmas.

Of the 64% who were looking forward to a happy 2011 Christmas, almost all (97%) also look forward to 2012 with hope.

On the other hand, of the 11% expecting a sad Christmas, 89% are hopeful of 2012.