Australia extends P72-million aid to support peace initiatives in Mindanao

Australia has granted an additional P72 million in assistance to the Philippines to support peace initiatives in Mindanao.
 
Australian Minister for Foreign Affairs Bob Carr  said: “Expanding our support for peace in Mindanao is a concrete statement of Australia’s concern for the poor of that long-suffering region, and our interest in the achievement of long-lasting peace.
 
Australia has pledged P52 million to the Mindanao Trust Fund to help improve livelihoods, health, and education in conflict-affected communities.
 
“We commend the Philippine government and the Moro Islamic Liberation Front (MILF) on their excellent progress towards peace. Australia is very proud to support their efforts. Peace is a pre-requisite for the development and poverty alleviation that is so sorely needed in this poverty-stricken part of the Philippines,” said Carr.
 
Australia will also provide P20 million to the World Bank and UN to assist the MILF with training, policy advice and technical assistance to finalize the Bangsamoro Basic Law.
 
The law will establish the new region of Bangsamoro, replacing the Autonomous Region of Muslim Mindanao. Australia’s support will strengthen law, justice and governance, and help out with transition programs for former combatants.
 
“Australia shares the hope of the Philippine government and the MILF that a peace agreement will end the decades-long conflict. We will continue to work with our partners and the people of Mindanao to ensure the benefits of peace are felt by all.”
 
Australian Ambassador to the Philippines Bill Tweddell said: “This additional support demonstrates the Australian government’s continuing commitment to contribute to peace and security in Mindanao.”
 
“Australia’s aid program is making a difference by working closely with Philippine Government agencies and various peace and development partners to improve the delivery of basic and social services in Mindanao, particularly in the priority areas of education and peace-building.”
 
In recent years around half of Australia’s aid program in the Philippines has gone to Mindanao. Australian aid is introducing education opportunities in vulnerable and remote communities where school-based education has not been possible due to decades of ongoing conflicts.
 
In the past year Australian aid has helped build over 400 community learning centres, providing access to basic education to more than 11,000 children in Mindanao.
 
Australian aid is also boosting the ability of local communities and security forces in the southern Philippines to work together to better manage conflict situations, as well as bringing women’s voices into peace negotiations.
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Enhancing competitiveness to attract more investments, generate more jobs

The Philippines has to further boost competitiveness and attract investments to the regions in order to generate more employment and reduce poverty in rural areas.
 
Socio-Economic Planning Sec. Arsenio Balisacan told participants of the first regional competitiveness summit that spreading economic growth will provide alternatives to investors who would be able to take advantage of the resources and unique attributes offered by different regions. 
 
“For the people, it would mean better opportunities for employment, and having the ability to provide for a better life for their families. This would also give people more chances to contribute to the development of their community and their country,” said Balisacan.
 
He stressed that achieving inclusive growth would require development in the periphery through integration of the lagging areas or regions with the fast-growing, leading areas or regions of the country.  
 
 
Sixty-two percent of the entire country’s economic growth is concentrated in Metro Manila, CALABARZON, and Central Luzon.
 
Based on first semester 2012 poverty estimates, poverty incidence is highest in the Autonomous Region Of Muslim Mindanao, SOCKSARGEN, Eastern Visayas and Zamboanga Peninsula.
 
On the other hand, poverty incidence is lowest in the National Capital Region, CALABARZON, and Central Luzon. Fifty seven percent of establishments and 65 percent of employed are concentrated in these areas.
 
“We need an impetus that will encourage new businesses to open in areas where development is most needed,” said Balisacan.
 
“As other centers of development are created, we encourage growth not only in these regions but in the whole country.  We hope to contribute to these efforts by spearheading the formulation of area development plans (ADPs), which aim to transform less developed but resource-rich areas into globally competitive areas,” he said.
 
The ADPs have identified specific areas based on natural economic units or natural-resource boundaries that shall be given focus to boost development in the farthest areas of the country.
 
The Philippine Development Plan (PDP) 2011-2016 and the various regional development plans have also identified priority industries which are seen to have the highest growth potentials and can generate the most jobs. 
 
Balisacan said more emphasis will be given to employment generating sectors such as manufacturing, agriculture, tourism, IT-BPO, agri-business, and housing.
 
Infrastructure projects have been programmed to support growth in these industries in the peripheral regions. 
 
As of the first quarter of 2013, 926 local government units (LGUs) or 57 percent of all 1,634 LGUs in the country have streamlined their processes and reduced the time to register businesses to 5 days for new applications and 10 days for renewal. The Philippine Business Registry has reduced average processing time to register businesses to 30 minutes.

Philippines sees increasing imports

The Philippines is expecting an improvement in the importation of capital goods in the near term following a decline in May 2013 as businesses particularly the mining and quarrying subsector continue their expansion plans.
Socio-economic Planning Sec. Arsenio Balisacan noted that imports of raw materials and intermediate goods amounted to US$2.2 billion in May 2013, which is higher by 13.3 percent compared to US$2 billion in May 2012.

“This favorable performance mainly reflected the broadly upbeat sentiments of the business sector in the second quarter of 2013. Based on the Bangko Sentral ng Pilipinas (BSP) business expectations survey, firms cited expansion of businesses, new product lines, brisker business and seasonal uptick in demand as the factors behind their buoyant outlook,” he said.

Semi-processed raw materials, which accounts for about 87 percent of total raw and intermediate goods, expanded by 11.1 percent,  driven primarily by materials for the manufacture of electrical equipment (20.6%), manufactured goods (13.2%), embroideries (211.5%), and animal feeds (10.6%), according to the National Statistics Office (NSO).

Balisacan said that the rebound in importation of materials and accessories for the manufacture of electrical equipment may have been due to the anticipation of a higher global demand for electronics.

“International industry analysts see that semiconductor industry will grow moderately in 2013.  This may signal a recovery in the country’s electronics exports in the coming months following a series of contractions since December 2012,” he said.

Import payments for consumer goods grew by 7.9 percent to US$712.9 million in May 2013 from US$660.8 million in the same period in 2012.

“This positive outturn mirrored the improved outlook of consumers in the second quarter of 2013 as a result of optimistic employment expectations and strong macroeconomic fundamentals.  Based on BSP’s consumer expectations survey for the second quarter of 2013, consumers generally view the period as a favorable time to buy durable goods,” said Balisacan.

Balisacan pointed out that major trade-oriented economies in the East and Southeast Asian region posted annual contractions in merchandise imports in May 2013, except for Hong Kong (9.1%) and Malaysia (0.5%).

“Japan recorded the steepest decline in imports among selected Asian countries during the period.  The contraction in Japan’s overseas purchases by 13.1 percent may have resulted from the year-on-year depreciation of yen against the US dollar,” Balisacan said.

Other countries that recorded negative imports performance in May 2013 were Taiwan (-8.0%), South Korea (-4.6%), Singapore (-3.4%), Indonesia (-2.2%), Thailand (-2.1%), and China (-0.3%).

For the first five months of 2013, the total value of merchandise imports contracted by 3.6 percent to US$24.8 billion from US$25.7 billion in 2012, according to the NSO.

Balisacan said that most Asian counterparts also recorded negative import performance for the first five months of 2013.  Among them are Japan (-8.7%), Singapore (-4.4%), South Korea (-2.8%), Indonesia (-1.8%), and Taiwan (-0.9%). 

On the other hand, Hong Kong (13.8%), Malaysia (5.3%), China (8.2%) and Thailand (5.7%) posted positive import performance.

Philippine imports drop 2.4% in May

Philippine imports in May 2013 posted a 2.4 percent drop to $5.25 billion from $5.38 billion in the same period last year.
 
The National Statistics Office (NSO) attributed the decline to the negative growth in six out of 10 major commodity groups such as cereals and cereal preparations, transport equipment, electronic products, mineral fuels, lubricants, plastics, and chemicals.
 
Aggregate imports for the first five months of 2013 amounted to $24.755 billion, down by  3.6 percent compared with $25.683 billion in the same five months of last year.
 
Total external trade in May 2013 declined by 1.6 percent to $10.151 billion from $10.317 billion recorded during the same month in 2012. 
 
Accounting for 24.3 percent of the aggregate import bill, electronic products topped the list with payments amounting to $1.276 billion, down by 10.6 percent over last year’s figure of $1.427 billion. 
 
Among the major groups of electronic products, semiconductors, having the biggest share of 19.0 percent, decreased by 8.2 percent from $1.088 billion in same month a year ago to $999.39 million in May 2013.
 
Imports of mineral fuels ranked second with 22.4 percent share and posted a negative annual growth rate of 8.7 percent from $1.290 billion in May 2012 to $1.178 billion in May 2013. Shipment of this product in terms of volume grew by 19.7 percent compared to its recorded volume in May 2012.
 
Transport equipment was the country’s third top import for the month with 6.0 percent share to total imports valued at $316.80 million in May 2013, down by 13.8 percent from previous year’s level of $367.70 million.
 
Industrial machinery and equipment, contributing 5.4 percent to the total import bill was the country’s fourth top import for the month amounting to $281.90 million, up by 5.1 percent compared to last year’s value of $268.35 million.
 
Fifth in rank and with 3.2 percent share to the total imports, other food and live animals recorded $169.03 million worth of imports, higher by 23 percent from last year’s level of $137.37 million.
 
Other top imports in May 2013 were ores and metal scrap valued at $142.55 million, registering the highest annual growth rate of 7,022.6 percent among the top 10 imports; iron and steel amounting to $140.32 million; plastics, $132.79 million; organic and inorganic chemicals, $130.01 million; and cereals and cereal preparations, $118.89 million. 

South Korean traders forge partnership with Philippine trade groups

The Korea Importers Association (KOIMA) has forged an agreement with Philippine trade associations to further strengthen bilateral trade and increase exports to South Korea.
 
KOIMA has agreed to cooperate in leveraging opportunities in commercial and industrial development, investments, and joint ventures.

KOIMA regularly conducts sourcing activities overseas to obtain raw materials for the production of export goods. Philippine-Korean trade grew from US$5.5 billion in 2007 to $7.4 billion in 2012.

Exports increased from $2.2 billion in 2011 to $2.9 billion in 2012, making South Korea the sixth largest market for Philippine exports.

On the other hand, imports from South Korea rose from $4.4 billion in 2011 to $4.5 billion 2012, making it the Philippines’ fifth top source of imports.

South Korean Ambassador Lee Hyuk said his country lacks natural resources and is looking to tap the Philippines, blessed with natural wealth, to supply his country with a range of manufacturing raw materials.

These include agricultural, steel, mineral, and petrochemical products. There is also a growing need for electronic components and high-tech materials required for genetic engineering, nanotechnology, robotics, and next-generation semiconductors. 

Philippine economy posts 7.5%, the highest growth in Asian region

The Philippine economy as measured by the gross domestic product (GDP) grew by 7.5 percent in the second quarter of 2013 compared to the same period last year. 
 
Socio-economic Planning Sec. Arsenio Balisacan stressed this significant economic growth is the fourth consecutive quarter that the GDP has been expanding above 7 percent.
 
“We have been experiencing growth of above 6 percent since the first quarter of 2012,” noting that the second quarter expansion was above the 6-7 percent target set by the Development Budget Coordination Committee (DBCC) this year,” said Balisacan.
 
While the first quarter growth was slightly higher at 7.7 percent, this 7.5 percent second quarter growth is well within the target range of 7 to 8-percent GDP growth as originally outlined in the Philippine Development Plan or PDP for 2011 to 2016.
 
“This only confirms that the Philippine economy is now on a higher growth trajectory and the fastest growing economy among emerging economies in the ASEAN region,” said Balisacan.
 
The 7.5-percent growth, which is the same as that of China, surpasses the growth rates of the other economies in the ASEAN region.
 
Indonesia grew by 5.8 percent, Viet Nam by 5 percent, Malaysia by 4.3 percent; Singapore by 3.8 percent, and Thailand by 2.8 percent.
 
“Our growth rate is significantly higher than that of Hong Kong with 3.3 percent, Japan with 2.6 percent, Chinese Taipei with 2.5 percent, and South Korea by 2.3 percent,” said Balisacan.
 
Baliscan also pointed out that the composition of Philippine economic growth shows signs of an economy that is in the process of rebalancing, moving from being largely consumption-driven to becoming investment-led and industrialized, with the ability to provide higher quality jobs for Filipinos.
 
Over the last three quarters, capital formation has been growing more rapidly than household consumption and the growth of industry has so outpaced that of the services sector, said Balisacan.  Double-digit growth rates were noted in fixed capital and the manufacturing subsector in the last quarter.
 
On the demand side, household and government spending account for the bulk of GDP as  investments were growing and taking the lead in the medium term, given its double-digit growth for the past two quarters, said Balisacan.
 
“We are able to grow at a fast pace despite the contraction in exports.  This internal dynamism indicates greater consumer and business confidence in the domestic economy, as we have continued to keep our macroeconomic fundamentals in check.”
“While other economies that were growing at a fast rate are now decelerating due to global slowdown, the Philippine economy has shown an ability to withstand external shocks,” said Balisacan.
 
However, Balisacan underscored the need to address the agriculture sector which slightly contracted for the first time since the first quarter of 2012, even as some subsectors within agriculture posted growth.
 
Corn and palay production declined by 25.9 and 1.8 percent, respectively, in the second quarter of 2013 due to the intense heat experienced in Ilocos and Cagayan Valley regions and farmers harvesting their crops in advance in anticipation of the drought. 
 
Balisacan said the strong performance of various subsectors has tempered the contraction in the agriculture sector. 
 
The fisheries subsector, which comprises almost one-fifth of the sector, grew by 3.3 percent, while poultry and livestock expanded by 6 and 3.9 percent, respectively. 
 
The contraction in agriculture confirmed NEDA’s earlier observation in the April 2013 round of the Labor Force Survey where employment in agriculture-related activities registered a loss of around 624,000 workers from a year ago, compared to about 224,000 and 380,000 additional employment generated in the industry and service sectors, respectively.
 
Balisacan said the seasonality in the agriculture sector poses a challenge to growth and employment.  He stressed that need to diversify agricultural production and to move towards further processing of agricultural products particularly food.
 
“We are pleased that overall, our economic performance in the second quarter of 2013 indicates that we are on track with our targets. Our strategic initiatives as outlined in the PDP continue to be implemented and are bearing fruit,” he said.
 
Balisacan said that with strong macroeconomic fundamentals, the country has the means to manage risks that arise with volatilities, including those of the stock market and the Philippine peso. 
 
He also noted that inflation remains stable, interest rates continue to be low and with strong current account to cover 12 months worth of imports. 
 
“The increased diversification of exports as indicated by the decline in the share of electronic products from 70 percent to 50 percent of total exports has made us less susceptible to trade-related shocks.”
 
“While we are not completely immune to external shocks, our positive actions that have facilitated economic restructuring and rebalancing have given us greater resiliency.”
Balisacan said that the government is committed to sustaining this growth and making it more inclusive so that every Filipino benefits from and contributes to development.
 
 

Filipino consumers among the world’s most optimistic

Filipino consumers remain as one of the world’s most optimistic and show growing focus on saving for the future, according to the latest consumer confidence index by global information and insights company, Nielsen.
 
The Nielsen survey of consumer revealed that the Philippines recorded a three point increase with an index of 121, making it home to the world’s second most confident consumers.
 
This is the highest consumer confidence index for the Philippines since the fourth quarter of 2010 when the index was reported at 120
 
 “The high confidence levels continue to sweep across Southeast Asian consumers compared to the rest of the world,” said Stuart Jamieson, managing director, Nielsen Philippines.
 
“Similar to its neighbors in Southeast Asia, foreign investments are coming in and a growing number of consumers are entering the middle class in the Philippines, driving the positive outlook we are observing.”
 
Filipino respondents also feel the most positive about local job prospects over the next 12 months with 77% saying that local job prospects are excellent.
 
This makes Filipino consumers the most optimistic in the world on local job prospects followed by Indonesia (75%) and India (72%).
 
Filipino consumer perception of personal finances for the year ahead has remained relatively stable over the past four quarters, reflecting the general perception across Southeast Asia.
 
 Filipinos at 79% follow Indonesians, who have the most optimistic view on their financial position with 84 percent saying their personal finances were good or excellent – the highest in the world for Q2 2013 and 30 points above the global benchmark of 54.
 
More than half of Filipino respondents indicated that spending on items wanted or needed over the next 12 months would be good.
 
 While Filipino respondents show a great readiness to spend, still seven out of 10 are saving their spare cash, making them among the world’s biggest savers. Filipinos join an all-Asian list of the top 10 savers in the world.
 
Nineteen per cent of Filipino respondents also said they utilize their spare cash to invest in shares and mutual funds, at par with the global average.  Compared to their Southeast Asian peers, Filipinos are behind Indonesians who are well above the global average at 33%, Malaysia (30%), India (25%), Singapore and Thailand (24%).
 
“Despite the general optimism that Filipinos are feeling they are still protecting themselves against future fluctuations in the global economy and other external factors. The increase in disposal income gives them opportunities to consider augmenting their savings and investing in mutual funds,” said Jamieson.
 
Aside from saving, new technology also holds strong appeal for Filipino consumers. Around a third of Filipino consumers (31%) are spending their spare cash on new technology products along with Thais (34%), Vietnamese (32%), Indonesians (31%).
 
Filipinos (83%) are among three consumers in Southeast Asia who have changed their spending to save on household expenses over the past year. The three key areas where consumers have made a conscious effort to reduce spending include new clothes, out-of-home entertainment, and their gas and electricity usage.
 
“The decision on Filipino consumers on how they will spend their cash will remain to be strongly influenced by caution as financial security continues to be a high priority,” said Jamieson.

South Korea reaffirms commitment to Philippines’ rice self-sufficiency

South Korea has reaffirmed its commitment in helping the Philippines achieve rice self-sufficiency and food security following the inauguration of the US$3.25 million rice processing complex (RPC) in Matanao, Davao del Sur on Friday.
 
The rice processing center is equipped with state-of-the-art, post-harvest facilities and technologies that will improve the efficiency of rice production, milling, drying and storage thereby reducing post-harvest losses and enhancing rice quality.
 
The complex, with a total area of 10,000 square meters, has a drying capacity of 3,600 metric tons per year, a milling capacity of 3 MT or an equivalent of 60 cavans per hour, a milling recovery of 65% and a storage capacity of 22,000 bags.
 
Korean Ambassador Lee Hyuk has stressed South Korea’s recognition of the importance of agriculture and rural development.
 
“This facility emphasizes the primacy Korea puts on agriculture. More importantly, it represents what the Korean government and people deeply care about – the alleviation of poverty and hunger and the promotion of economic growth,” he said.
 
KOICA vice president Han Choong Sik said the success of the partnership is built on the belief that agriculture is the bedrock of the Philippine economy.
 
“We are now more than ever committed to continue and steadily increase our development assistance to the sector ranging from irrigation, rice production, seafood processing, agro-industrial development, and livestock improvement.”
 
“These initiatives will surely contribute to the Philippine government’s goal of inclusive growth and poverty reduction,” Han said.
 
The rice processing center project was made possible through a US$13 million grant from the Korean government.
 
The project  is being implemented by the Korea International Cooperation Agency (KOICA) in partnership with the Department of Agriculture (DA) and the local governments of the project sites.
 
Aside from Davao del Sur, the Korean government had established rice processing centers in Aurora, Pangasinan, Bohol and Iloilo.

Semiconductor exports seen to improve for the rest of 2013

The Philippines is expecting an improvement in the export of semiconductors in the remaining months of the year due to the anticipated increase in global demand.
 
Socio-economic Planning Sec. Arsenio Balisacan said prospects for semiconductor exports could improve as global demand for electronics is likely to increase in the near term.  
 
“This prospect is consistent with the higher global sales of semiconductors in May 2013 due to the expected expansion in demand, mostly for memory and logic products,” said Balisacan.
 
He noted that the almost-flat exports growth in May 2013 was due to the performance of manufactured goods with earnings down by 11.3 percent compared to the same month in 2012.  Outward shipment of electronics, which are under manufactured goods, was also lower by 9.3 percent for the same period.
 
“After posting a year-on-year increase in April 2013, the value of export receipts from semiconductors dropped in May 2013, due to reduced shipments to Hong Kong, China, Japan, Taiwan, Thailand and Malaysia.  These Asian neighbors accounted for 45 percent of our semiconductor export revenues during the period,” he said.
 
Balisacan reiterated the importance of increasing investments in science and technology (S&T) to further improve the exports sector.
 
“At present, high-technology exports in manufacturing are largely concentrated in three product groups, namely electronics, garments, and machinery and transport equipment.  Thus, we need to harness appropriate S&T to address the constraints and challenges facing the sector,” he said.
 
These challenges include weak forward and backward linkages of low value products with other industries, problems of small- and medium-scale enterprises (SME) in terms of their competitiveness and linkages with large industries, among others.
 
“To lessen our export dependence on mainly electronics and semiconductors, we hope that our private sector partners will also diversify and expand production of high value products and increase investments on the linkages of our industries,” said Balisacan.
 
Balisacan noted strong export performances in the value of other mineral products (119.3%), wood manufactures (87.8%), chemicals (55.0%), other manufactured products (26.7%), processed food and beverages (59.8%), consumer electronics (281.5%) and bananas (60.0%).
 
“The sizable increase in shipments of other mineral products contributed to the 136.8-percent increase in the export of mineral products in May 2013.  Exports of other mineral products to Japan, China, and South Korea accounted for most of the growth in mineral product exports in May 2013,” he said.
 
Other mineral products include those related to salt, sulfur, plastering materials, lime and cement.
 
As to the performance of banana exports, Balisacan expects this trend to continue after May 2013 based on pronouncements made by the Bureau of Plant Industry (BPI) that shipments of Cavendish bananas are set for delivery to the United States by June 2013, after several months of delay.
 
Meanwhile, receipts from petroleum exports increased by 521.3 percent to US$129.7 million in May 2013 from US$20.9 million in May 2012.  “This was due to the significant increase in the volume of exported petroleum, which grew by 672.0 percent year-on-year,” said Balisacan.
 
Comparing the country’s May 2013 exports performance with selected Asian economies, the NEDA official said that Thailand recorded the steepest decline (-5.2%), partly due to the Thai baht appreciation and the adverse effect of prevailing global weaknesses in developed economies.  Malaysia (-3.1%) and Indonesia (-1.8%) also recorded declines for the said period.
 
On the other hand, Viet Nam posted a 20.9-percent growth that was supported by higher shipments of communication products, textile and garments, footwear, electronics and crude oil during the period.frtdlee  It was followed by Japan (10%), Hong Kong (4.6%), South Korea (3.2%), Singapore (2.8%), China (1.0%), and Taiwan (0.9%).

Philippine export earnings in May post slight decline

The country’s export earnings in May 2013 posted a slight drop of 0.8 percent to $4.891 billion from $4.932 billion recorded in the same period last year.
The National Statistics Office (NSO) attributed the drop to the negative growth of five major commodities such machinery and transport equipment, ignition wiring sets, articles of apparel and clothing accessories, electronic products and metal components.
The aggregate merchandise exports for the first five months of 2013 showed a decrease of 6.0 percent from $22.445 billion in 2012 to $21.093 billion in 2013.

 Accounting for 35.4 percent of the total exports revenue in May 2013, electronic products emerged as the country’s top export with total receipts of $1.731 billion, down by 9.3 percent from $1.908 billion registered last year.

Semiconductors posted earnings worth $1.39 billion, down by 1.9 percent from $1.41 billion registered in May 2012.

Other manufactures recorded as the country’s second top export with revenue valued at $396.42 million, up by 36.5 percent compared to $290.32 million in same period a year ago.
Ranked third in May 2013 was machinery and transport equipment with earnings amounting to $343.85 million, down by 40.4 percent from its year ago level of $577.09 million
Export of other mineral products posted a 189 percent growth to $332.14 million from $114.72 million recorded in the same month last year.
Woodcrafts and furniture with export revenue of $306.92 million, up by 74.7 percent followed as the fifth top export earner in May 2013.
Other tope exports were chemicals with export earnings of $229.26 million, up by 48.0 percent; metal components with export receipts of $138.07 million lower by 1.1 percent; petroleum products registering the highest year-on-year change of 521.3 percent to $129.66 million; articles of apparel and clothing with proceeds billed at $128.51 million down by 14.7 percent; and ignition wiring sets with total receipts of $109 million down by 5.4 percent compared to same period last year.