TERM OF THE DAY future time.
Source: Bureau of Micro, Small and Medium Enterprise Development- Department of Trade and Industry
Forward rate An estimate of what an interest rate will be at a specified
business The Manila Times MONDAY BY DARWIN G. AMOJELAR SENIOR REPORTER
Local stocks seen to climb this week
BY KRISTA ANGELA M. MONTEALEGRE REPORTER
LOCAL share prices are seen to continue with its ascent this week as investors become more confi- dent to take positions on easing concerns overseas. “The market will still be bullish.
Funds somehow closed their books in November so there was heavy profit- taking last month,” Joseph Roxas of Eagle Equities Inc. said. “Let’s forget 2010. Investors are
now looking at earnings forecast for 2011 so stocks become cheap again,” he added. However, profit-taking will be a
constant presence as investors balance their investments’ profit margin and liquidity requirements over the Christmas season, Jun Calaycay of Accord Capital Equities Corp. said. Last week, the main index grew
2.94 percent as positive develop- ments overseas fuelled upbeat investor sentiment. With limited catalysts domesti-
cally, local stocks will likely take its cue from overseas markets, analysts said. The US market may provide another good lead after Wall Street finished its best week in a month with the Dow Jones industrial average gaining 19.68 points, or 0.17 percent to 11,382.09 on Friday. US stocks shrugged off a weaker-
than-expected employment report and held on to its gains as inves- tors chose to be encouraged by a crop of favorable economic indicators and positive outlook on consumer spending. Confidence also returned to the
market as worries on the Eurozone debt problem waned. “The problems that threatened
to pull the bull back into its cage are still present. Investors’ perception of their impact has been diminished,” Calaycay said. Trading range is seen to be
between the 50-exponential moving average of 4,100 and resistance at 4,220, AB Capital Securities Inc. said. For the rest of the year, the local
market may consolidate, especially since there will be very few potential market moving news that can push local stocks higher, AB Capital said. It also that concerns of a domestic slow down may also linger. “Notwithstanding, there could be a positive bias as investors position ahead of the seasonal year end window dressing,” the brokerage said.
HE Aquino administration plans to propose a higher loan assistance from the Asian Development Bank
»ADB LOAN 0.969
(in billion dollars) 1.5
(ADB) to finance water and power projects
for the next two years. Documents from the National Economic and Development Au- thority (NEDA) showed that the indicative assistance for ADB lending next year has increased to $1.39 billion from this year’s $969 million.
Projects to be financed by ADB
next year are the Water Develop- ment Project ($50 million); Phil- ippine Solid Waster Management Sector Project ($41 million); Com-
1 0
prehensive/Integrated Develop- ment for Agusan River Basin Project ($100 million); and Infrastructure of Rural Productivity Project Phase 2 ($80 million).
Other projects that identified next
year are the MFF Climate Change Investment Program ($100 mil- lion); Metro Cebu Water Supply Project ($70 million); Power Distri- bution Reform Program ($200 mil- lion); Manila East Sanitation Im-
(Actual) 2010
manila
times@gmail.com D ecember 6, 2010
B 1
Gov’t seeks higher loan from ADB T
1.39
(Proposed) 2011
provement Project ($100 million); Manila West Sanitation Improve- ment Project ($100 million); Justice Reform Program ($300 million) and Investment Climate Program ($250 million). For 2012, the indicative loan as- sistance amounted to $1.35 billion. These are the Rural Infrastructure
ERC caps power transmission firm’s revenues
BY EUAN PAULO C. AÑONUEVO REPORTER
THE Energy Regulatory Commis- sion (ERC) has approved the maxi- mum annual revenue of the coun- try’s power transmission monopoly for the next five years.
In a decision, the regulator ap-
proved the National Grid Corpora- tion of the Philippines’ (NGCP) rev- enue requirement of P40.47 billion in 2011; P41.65 billion in 2012; P43.37 billion in 2013; P44.39 bil- lion in 2014; and P44.12 billion in 2015 for the third regulatory period 2011 to 2015. The respective amount would be
used by NGCP for operating and capital expenses of the power grid. As of end-2009, the country’s virtual power highway was made up of 19,425 circuit kilometers of trans- mission lines and 23,853 megavolt- amperes of substation capacity. In addition to this, NGCP earlier rolled out plans to put up a number of transmission projects to help ease trans- mission line constraints in the grid, which has caused unstable supply of electricity and spikes in power rates. From the fourth quarter of 2010 to the first semester of 2011, NGCP will commence with 11 transmis- sion line and substation projects to allow new power plants to be
brought into the grid, to meet growth in demand, and to improve the reliability and N-1 requirements of the Philippine Grid Code. ”N-1" refers to the capability of
the power grid to withstand the loss of a major line without a customer experiencing a power interruption. Based on the NGCP’s spending forecast for the next five years, the ERC pegged the company’s average transmission rate at P364.75 per kilowatthour per month (kWh/mo) for 2011; P362.43 per kWh/mo in 2012; P360.54 per kWh/mo in 2013; P359.37 per kWh/mo in 2014; and P358.39 per kWh/mo in 2015 to cover its revenue requirements.
Onslaught of dollars to make policy decision difficult – Bangko Sentral
BY LAILANY P. GOMEZ REPORTER
THE Bangko Sentral ng Pilipinas (BSP) said the level of foreign capi- tal flows in the country is not alarm- ing but this could make policy de- cision more difficult. BSP Deputy Governor Diwa Guinigundo said foreign exchange (FX) flows driven by both push fac- tors—like excess liquidity abroad, search for yield and risk appetite— and pull factors—such as prospects of sustainable growth, favorable ex- change rate dynamics, interest rate differential—could “indeed compli- cate the conduct of monetary policy in the Philippines.” However, the net amount of portfolio flows or hot money in terms of fundamentals flows in- cluding exports, remittances, rev- enues from business process outsourcing and other services re- ceipts are not large enough. “At least not yet; hence, much of the exchange rate movement cannot be primarily ascribed to these short- term flows,” Guinigundo said. Data from the central bank
showed that transactions in foreign portfolio investments surged to $3.446 billion as of November 18 compared with the $372.02 million in the same period last year.
“I believe the BSP has done the right things so far. We have allowed the exchange rate to absorb the shocks, we have taken the opportu- nity to build our gross international reserves and, in the process, help temper sudden, prolonged and large swings in the peso movement,” Guinigundo said. “We continue to do mopping up operations to reign in the liquidity impact of these FX flows,” he added. Domestic liquidity or M3 picked up in September to reach P4.1 tril- lion, or 10.5 percent faster than the 8.6 percent in August, while bank lending continued to grow albeit at a slower pace of 9.8 percent in Sep- tember compared with 12.5 percent in August.
Guinigundo also brushed aside speculations that a price bubble is forming in the equities and real es- tate sectors. “The peso’s real effective ex- change rate indicates continued ex- ternal competitiveness. Most impor- tant, we have enjoyed robust eco- nomic growth in an environment of price stability,” he said.
The BSP official said that mon- etary authorities have enough tools to handle the current pace of capi- tal flows aside from the conven- tional monetary tools.
Banks’ exposure to the real estate sector was capped and holding pe- riod of non-resident deposit was also enforced.
“There seems to be very little appreciation of the fact that mi- cro-prudential measures are also in place to ensure that banking institutions in the Philippines are properly capitalized, expo- sures to any one industry or bor- rowers are avoided and these are something that the BSP contin- ues to review regardless of the business cycle,” he said. “We, therefore, consider capital controls only as a last resort. We are far from that position. Our exchange rate is broadly reflective of funda- mentals, there is still some scope for reserve buildup to ensure we have the resources in the event of a sud- den capital stop and reversal, and the economy is not at any risk of overheating,” Guinigundo said. He said monetary officials view capital controls with great caution since these can only tem- porarily prevent foreign currency inflows, but not the amount over a longer period.
Capital controls could introduce “distortionary elements” in the lo- cal economy and discourage long- term capital flows.
24-Hour Rule: Every Step Deserves an Improvement L
AST week, I intended to write about sex in government service
and how it could help beat red tape in the bureaucracy. But after talking to some government servants, I dis- covered that there’s a slim chance for bureaucrats to have sex in dilapi- dated bureaus with wooden walls full of holes, although they continue to admit that still—they have an ex- tremely large evidence of red tape. The reason is that majority of these government servants are not even aware that there’s an Anti-Red Tape Act, a law that requires them to devise ways to make it easy for the populace to transact business. For example, why do we spend almost one whole day whenever we transact business with the National Statistics Office, National Bureau of Investigation, Social Security Sys- tem, Land Transportation Office, Department of Foreign Affairs, among other (bad word) agencies? I’m not certain who digs up such information, or who pays for the digging, but I read somewhere about a speculative article that these government workers would still try to make it difficult for you and me so that we could come up with
REYLITO A.H. ELBO
grease money. You know what I’m talking about
here. It’s an old issue that we keep on hearing many times over, if not experienced it personally. But then I realized I may be sounding overly repetitive here. Pardon me, but I’m trying to emphasize the beauty of having the 24-Hour Rule applied in government service, and of course to private corporations. So anyway, what’s this 24-Hour
Rule that we’re talking about? It came to me when I read the Dec. 2 article on How Ford Profits from its ‘24- Hour Rule’ by Bernie Fowler which was published by Harvard Business Review. It’s all about quick turnaround practice when Ford employees and manag- ers are required to solve a problem in 24 hours.
If an individual can’t solve a prob- lem in one day, then he or she is required to escalate it to the boss or the concerned team. Ford’s rule is unmistakeable: “You have 24 hours to take a new emerging issue, try to understand it and see if you can re- solve it yourself. After that, you have to go public with it.” It’s an embodiment of what
Ford’s CEO Alan Mullaly has told his team—“You can’t man- age a secret.” So I say that Ford’s 24-Hour
Rule represents a threat to our gov- ernment bureaucracy. That’s why it should remain a secret, as the nothing-doing bureaucrats are ex- pected to say it. Of course, the bureaucracy needs political will in the same way they need the help of profes- sional industrial engineers and kaizen (continuous improvement) advocates to help improve govern- ment work procedures. If for some reasons, you still don’t know what to do, all you have to do as a taxpayer expecting a de- cent government service is to stand at the door of an agency while ap- pearing to be at a lost on what to
do, and within seconds a helpful worker will approach to see if you have any spare change. Of course, not all government
workers are bad and incorrigibly inefficient.
Some are exactly “very” bad and incorrigibly inefficient. One obvi- ous example of this is found in gov- ernment offices with workers who are openly accepting money from the public when they’re not even performing any cashiering function. I’ve said this before, but it needs to be said again in the in- terest of emphasis. Graft and cor- ruption is worse than we could imagine. But this does not mean that it cannot be licked. One simple solution is for us—
taxpayers to take a hard look at every work process in government service. Then ask one basic question: “Is there a better way?”
But don’t make it appear that you’re offering something.
Rey Elbo is a consultant specializing in human resources and total quality man- agement as a fused interest. Send feed- back to
kairoshq@info.com.ph or fol- low me on Twitter @reyelbo.
Development Project ($100 mil- lion); Integrated Coastal Resource Management Project II ($100 mil- lion); Southern Philippines Sec- ondary Education Project ($200 million); Mindanao River Basin ($100 million); Power Sector In- vestment Project ($100 million); Davao City Water Project ($100 million); Power Sector Develop- ment Program ($350 million ) and Local Government Finance and Budget Reform Program Phase 2 ($300 million). In 2009, the Philippines was the third-largest recipient of loan assist- ance from ADB among Southeast Asian countries. Manila received $1.18 billion in ADB loans last year, up from $820 million in 2008, to counter the world economic slowdown.
BIR says old laws block effective tax collection
BY KATRINA MENNEN A. VALDEZ REPORTER
THE Bureau of Internal Revenue (BIR) said old laws are keeping the agency from collecting the right amount of taxes.
BIR Commissioner Kim Jacinto- Henares said that they are setting up a new system to strengthen its tax audit as hindrances such as out- dated laws prevent the government from determining the right amount of income that individuals and cor- porations are earning.
“One of the hindrances is the Secrecy of Bank Deposits [law], which ideally we should no longer have that law as other countries don’t have that. But realistically, it would be an uphill battle. Thus, we need to do the reforms within our control such as this,” Jacinto- Henares said.
She said data from other sources, such as bank accounts, can be used for cross-checking tax assessments and the income tax statements filed with the agency. To remedy the situation, the agency is instead strengthening its internal audit to bring down the corruption and connivance among taxpayers and its officers, which would result in an improved rev- enue collection.
The BIR, which accounts for at
least two-thirds of the government’s income, is tasked to collect P860 billion this year.
Jacinto-Henares said that under the new system, the BIR head of- fice will examine all the tax assess- ment made by its Revenue District Offices (RDOs) and its corre- sponding collections. “We will be choosing dockets in a regular basis, investigate the ex- aminers, supervisors and its RDOs,” she said. Under the new system, the tax administrator said the BIR would be able to determine the amount of taxes that should be paid by each taxpayer against the tax assessment that an RDO makes.
“If the assessment and their [RDOs] collections are low, they should be able to justify how it happened. Otherwise, they will have to face the corresponding con- sequences,” she said. “We will ask them to present the docket before us. And they should be able to explain how come the tax assessment do not match with the actual tax liability,” she added. BIR has about 12,000 workers
nationwide, at least 2,000 of which are examiners or those tasked to as- sess taxpayers’ deficiencies. “All of them will be covered by the new system and this is their chance to perform better,” she said.
Use Facebook for holiday greetings, NTC urges
TO prevent network congestion, the government has urged Filipinos to use Internet social networking sites to greet their loved ones instead of sending texts or placing voice calls on Christmas and New Year. In a statement, the National
Telecommunications Commission (NTC) said the public can use other means of sending greetings, like online social networking sites such as Facebook, Twitter or Friendster. The regulator said voice and text traffic normally increases four-fold during the holidays. NTC earlier estimated about 500
million to 600 million text messages are sent everyday. The country’s total mobile subscribers are at least 84 million. Last year, the agency issued
Memorandum Order 10-12.2009 to ensure that all telecommunication firm’s respective networks and facilities are ready to handle the expected increase in the volume of traffic. The NTC order also said that telcos should provide a sufficient number of
technical and other staff throughout the Christmas holidays. In addition, telcos should assign point persons who will act as contacts for all matters pertaining to network congestion and breakdowns during the period. The NTC also warned the public against the proliferation of text scams during the holiday season. To avoid being victimized by such
schemes, the NTC said the public should be mindful of the cellphone numbers and the contents of the messages they receive. The agency emphasized that text
scams are usually messages that come from unlisted private eleven-digit numbers asking for load or cash. ”The best thing to do is to simply
ignore or delete such messages,” the regulator said. The NTC said the public should
report these unidentified numbers and their messages directly to their mobile telephone companies or to their One- Stop Public Assistance Center. DARWIN G. AMOJELAR
STOCKHOLDERS’ MEETING SCHEDULE Stockholders’ Meeting Schedule Company Petron Date July 12, 2010 Time Place 2pm-3pm
Valle Verde Country Club, Capt. Henry Javier Street, Oranbo, Pasig City
Philippine Seven Corp. 3pm-4pm July 15, 2010 Ruby Ruby B Room, Level 4, Crowne Plaza Galleria Manila, Ortigas Avenue corner
The top recipient of ADB assistance
in 2009 was Indonesia with $2.18 billion from $1.09 billion in 2008. It was followed by Vietnam with $1.93 million in 2009 from $789.7 million in 2008.
ADB said that it had helped the
government mitigate impact of the global financial meltdown through policy-based operations and a $500-million Countercyclical Sup- port Facility loan.
It also said that it also had helped promote energy efficiency and healthcare, particularly for mothers and children. ADB provided a $3-million grant under the Asia Pacific Disaster Re- sponse Fund to help Filipinos af- fected by ‘Typhoon Ondoy’, which devastated Metro Manila and nearby provinces in 2009.
BEYOND THE BUZZWORDS
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