TERM OF THE DAY


Source: Bureau of Micro, Small and Medium Enterprise Development- Department of Trade and Industry


Normal value Price charge for a product on the domestic market of the


producer. Used to compare with export price in detemining dumping


business The ˜Manila Times THURSDAY December 9, 2010


Money supply growth, bank lending eases T


BY LAILANY P. GOMEZ REPORTER


HE growth in the country’s money supply moderated in October amid a slowdown in bank lending, the


Bangko Sentral ng Pilipinas (BSP) said


on Wednesday. In a statement, the BSP said do- mestic liquidity or M3 reached P4 trillion in October, mirroring a slower growth of 7.7 percent from 10.5 percent in September. On a monthly, seasonally ad- justed basis, M3 contracted by about


0.9 percent following an expansion of 2.1 percent in September. BSP Governor Amando Tetangco Jr. said the growth in money supply was attributed to the increase in net for- eign assets, albeit at a slower pace of 10.2 percent from 12.8 in September.


Taguig, Valenzuela cities top business-friendly list


BY DARWIN G. AMOJELAR SENIOR REPORTER


THIRTEEN out of 20 cities carried out regulatory reforms to make it easier to start and operate a business in their localities, according to a joint report of the International Fi- nance Corp. (IFC) and World Bank. In their Doing Business in the Philippines 2011, IFC-World Bank said 65 percent of the cities benchmarked for the second time since 2008 showed positive reforms in at least one of the three areas measured – starting a business, reg- istering property, and dealing with construction permits.


The report said it is easiest to start a business in General Santos, obtain construction permits in Davao City, and register property in Valenzuela. Janamitra Devan, IFC-World Bank vice president for Financial and Private Sector Development, said the progress in regulatory im- provements at the local level in the Philippines is an important step to- ward expanding business opportu- nities throughout the country. “A regulatory environment where entrepreneurs can start a business and then grow their firms can ex- pand opportunities for the poor,” Devan said.


The report said many of the im-


provements came from re-engineer- ing business processes, reducing fees, and using new technology. For starting a business, Pasay eliminated two procedures in the business permit application process. Notaries in Caloocan, Malabon,


Navotas and Valenzuela reduced their fees for preparing sales deeds


and related documents, saving money for local entrepreneurs. Cebu City’s Register of Deeds completed the nationwide land titling computerization project, which cut in half the time required to register a property title from 10 to five days.


Doing Business in the Philippines


2011 documents the wide variations in local business regulations across the country.


The high number of procedures, expenses, and requirements remain the biggest challenge for local en- trepreneurs.


While no single city does equally


well on all three indicators, Taguig and Valenzuela are


consistently ranked in the top


seven across all three indicators. The study was conducted in part- nership with the Asian Institute of Management Policy Center. It was funded by the Australian Agency for International Develop- ment, the Canadian International Development Agency, the United States Agency for International De- velopment, and the Investment Cli- mate Advisory Services of the World Bank Group.


Last month, IFC-World Bank’s Doing Business 2011 report showed that the country’s ranking in terms of ease of doing business fell by two notches to 148th from the 146th last year. The report surveyed 183 economies. Out of the nine criteria used in the study to measure a country’s competitiveness, the Philippines scored poor in terms of dealing with construction permits at 156th place from last year’s 111th.


»M3 GROWTH 10.5


(in percent) 11


9 7


7.7 September October The BSP’s net foreign assets posi-


tion went up 20.3 percent in Octo- ber from 19.2 percent in September owing to foreign exchange inflows


in the form of remittances, portfo- lio investments and export receipts. The net foreign assets of banks


however went down by 42.3 per- cent, faster than the 22.6 percent contraction in September owing to the upsurge in their foreign liabili- ties coupled with a decrease in for- eign assets.


The BSP said the expansion in net domestic assets decelerated to 1.8 percent in October relative to the 5.1 percent in September.


Credits extended to the private


sector went up 10.1 percent, in line with the continued uptrend in bank


lending amid the pickup in domes- tic demand.


Credits to the public sector


slowed by 6.7 percent on the back of the 7.9 percent moderation in loans extended to local governments and other public entities.


The BSP said outstanding loans of commercial banks, net of banks’ reverse repurchase placements (RRPs) with the BSP, grew by 8.4 percent in October, down from 9.8 percent in September. Inclusive of RRPs, outstanding loans of commercial banks grew by 9.1 percent, also lower than the in-


BY KRISTA ANGELA M. MONTEALEGRE REPORTER


LOCAL share prices bounced back Wednesday on account of bargain- hunting and fund managers’ win- dow dressing while the peso slumped against the dollar. At the Philippine Stock Exchange, the composite index rose 23.17 points, or 0.55 percent to 4,221.09, while the broader all-shares index gained 22.45 points, or 0.78 percent to 2,914.62. Gainers beat losers, 79 to 50, while 48 stocks were unchanged. A total of 1.33-billion shares worth P7.82 billion were traded. “The local market found an easy footing right off the bat, encouraged by improving conditions in recent


areas of concern,” Jun Calaycay of Accord Capital Equities Corp. said, adding that the market opened at its low and built up gains of up to 31.81 points. Concerns over Europe’s debt prob- lems have already faded after the European Union and International Monetary Fund bailed out Ireland. US President Barack Obama also shrugged off a possibility of a dou- ble-dip recession. “There seems to be a host of posi-


tive news coming out lately as we head deeper into the final month and move closer to the end of 2010, both from internal or domestic and external sources,” Calaycay said.


The Dow Jones in- dustrial average, how- ever, fell 3 points, or 0.03 percent to 11,359.16 after enthu- siasm over tax cuts sub- sided.


Local stocks also got a lift from fund managers, who have already started positioning for the seasonal yearend window dressing, AB Capi- tal Securities Inc said. Overseas funds entered the mar- ket as foreigners were net buyers at P104.03 million. For Thursday, the market is expected


to move sideways because of the ab- sence of fresh leads, analysts said. PSEi support would temporarily rise to the 4,200 level with immedi-


B 1


crease of 10.2 percent in September. On a month-on-month, season- ally adjusted basis, lending de- creased by 1.3 percent for loans in- clusive of RRPs and by 1-percentage points for loans net of RRPs. The central bank said the growth in bank lending showed that the economic outlook for the country remained positive. “The BSP affirms its commitment to help provide the appropriate mon- etary and financial conditions for con- tinued credit expansion while fulfill- ing its primary mandate of maintain- ing price stability,” Tetangco said.


Window-dressing, bargain-hunting lift stock market


ate resistance at 4,250, said Calaycay. Speculation that China will hike interest rates to stem inflation in the world’s second largest economy caused the peso to shed 25 centavos to close at 43.80 against the US dol- lar from Tuesday’s 43.55 finish. At the Philippine Dealing System, the peso-dollar exchange rate opened at 43.63, or 8 centavos weaker from Tuesday’s close. It moved to a high of 43.81 and a low of 43.46. Trading volume reached $1.222 billion from $1.83 billion the pre- vious trading day.


The peso-dollar pair is expected to trade within 43.60 to 43.90 in a daily range and 43.60 to 44.20 in a weekly range.


WITH REPORT LAILANY P. GOMEZ Govt cancels petroleum bidding amid COA findings


BY EUAN PAULO C. AÑONUEVO REPORTER


THE Department of Energy (DOE) has postponed this month’s bidding for oil and gas contracts pending the resolution of government’s stand on corporate taxes meted on exploration and development firms. Energy Secretary Jose Rene


Almendras said the agency canceled the bidding for petroleum contracts until it addresses the Commission on Audit’s (COA) concerns on taxes. “We were hoping that we would be


able to push through with it pending the resolution, but recent meetings with COA have given us an impression that it is probably best not to for the time being,” he said.


NEDA aims to halve poverty by 2016


THE National Economic and Develop- ment Authority (NEDA) said the government is eyeing to cut the poverty incidence by half before President Benigno Aquino 3rd ends his term. “The official target that we have is the Millennium Development Goals. That’s essentially what we’re following. The government is committed to that, so in a way, that’s how NEDA looks at it,” Socioeconomic Planning Secretary and NEDA Director General Cayetano Paderanga told reporters. The country’s commitment to


attaining the MDGs stipulated the reduction of extreme poverty and hunger from 24.3 percent in 1991 to 14.6 percent in 2006 and to 12.5 percent in 2015. The MDGs are based on the United


Nations Millennium Declaration endorsed by all 189 United Nations member-states in 2000.


which is the total value of final goods and services produced in the country. For this year, the government


expects GDP to grow between 5 percent and 6 percent. In the third quarter, the economy


expanded by 6.5 percent from 0.2 percent in the same period last year. In the first nine months, the


economy expanded by 7.5 percent from 0.7 percent last year. The country’s recent growth


■ Cayetano Paderanga To meet the government target to


cut poverty by half, Paderanga said a 7 percent to 8 percent growth in the next six years is ideal. “The reason why we would like to


target a 7 percent to 8 percent GDP is that what we think is necessary to really make a dent on poverty and move the country forward,” Paderanga said. GDP refers to gross domestic product,


performance compares well with Asian neighbors. The Philippines is ahead of Indonesia


(5.8 percent), Malaysia (5.3 percent), and South Korea (0.7 percent). Nonetheless, the Philippines trail the


economies of China (10.6 percent), Singapore (10.6 percent), Vietnam (7.2 percent), Thailand (6.7 percent) and Hong Kong (6.8 percent). DARWIN G. AMOJELAR


■ Jose Rene Almendras


The DOE earlier lined up 12 to 15 oil and gas sites for auction this month in its bid to jumpstart the stalled bidding for petroleum contracts. Since awarding 13 of such


contracts since 2005, manpower changes at the department and, recently, COA’s concerns on govern-


ment’s revenue sharing agreement with petroleum contractors, have put the bidding for upstream oil and gas projects on the backburner. COA questioned why the Malampaya consortium led by Shell Philippines Exploration B.V. was allowed to deduct their corporate income tax, which amounted to roughly P53 billion from 2003 to 2009, from government’s 60-percent share in the gas field’s revenues. Presidential Decree 87 of 1972


allows service contractors to deduct all operating and capital expenses up to 70 percent of their gross income. The remaining 30 percent will be divided between the contractor (40 percent) and the government (60 percent). Once the


oil firms recover their cost, the revenue sharing is shifted in favor of the government. The Malampaya is the country’s


largest natural gas field to date. It fuels three power plants with a combined capacity of 2,700 megawatts. Because of the country’s reliance on


imported fuel, the DOE has been hoping to develop similar resources through the private sector. But with the continued delay in the bidding of oil and gas exploration and development projects, Almendras said the DOE would instead push through with the auction of coal contracts. “Although there are many more


areas available, we will push through with coal. We will push through with all others except for oil and gas,” he said.


Hyundai may bolt out of Campi


BY BEN ARNOLD O. DE VERA REPORTER


THE Philippine distributor of Korea’s Hyundai Motors will bolt out of the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi), according to industry sources, as the government’s per- ceived bias for exporters exacerbates the fragmenta- tion in the sector. Sources said Hyundai Asia Resources Inc. (HARI) would likely withdraw membership from 15-year old Campi, which groups 16 companies.


They said HARI is responsible for the delay in the release of last month’s vehicle sales report jointly prepared by Campi and the Truck Manufac- turers Association.


The monthly industry sales


data is released to media on the eight day of the succeed- ing month, as the two groups add up their member- companies’ sales during a meeting held every sevent of the month. Elizabeth Lee, Campi presi-


dent, said in a text message on Wednesday that the associa- tion is “giving one member time until end of day today to submit their sales. That member was not able to submit during the monthly regular Campi sales report meeting yesterday.” Separately, Maria Fe Perez-


Agudo, HARI president and chief executive officer, told reporters on Tuesday night that the company was unable to submit its sales report because


Banks must embrace technology leaps T


HE huge strides, done at a diz zying pace, in technological ad-


vances should be considered a boon in providing banking serv- ices and rural banks should not shirk from exploiting such emerg- ing technological tools in making their services more efficient. This, in a capsule, was how the


Rural Bankers Association of the Philippines (RBAP) is facing up to the challenges posed by advances in telecommunications and infor- mation technology that is chang- ing the face of banking services. RBAP Executive Director Vicente Mendoza recently told delegates of a RBAP forum in Cebu City that operation of banks in far-flung ar- eas of the country is not an excuse not to embrace emerging tech- nologies but instead it is impera- tive for banks to adopt these ad-


vances to reach the widest part of their intended clients.


Internet use and the number of mobile phones were the catalysts of the technological revolution in banking services. While Internet penetration remains low at about one in every four Filipinos, one in two owns a cellphone, thus creat- ing a huge base for technological leaps in banking services. Mendoza even noted that the


21.5 percent of the entire popula- tion using the Internet, based on a survey of a reputable pollster, is a substantial platform for mobile banking services. The RBAP had long recognized the huge potential of technology in improving banking services, the reason for its partnership with the United States Agency for Interna- tional Development (USAID) for


the Micro-Access to Business Solu- tions (MABS) program, which ex- tensively uses mobile phones to speed up rural banks’ services to its clients. A survey done by MABS, in sup- port of the program, showed that as much as 67 percent of micro- credit borrowers, who are mainly farm workers and small business owners, possess cell phones while 25 percent of the remainder indi- cated easy access to a mobile phone within their household. The full array of banking serv- ices is fast being provided through mobile technology and the ben-


efits from the use of mobile phones extend beyond banking. Last July, Globe launched a pro- gram that provides free text agri- cultural advices.


The still-growing number of Filipinos residing in the coun- tryside’s willing to embrace new technologies makes it an im- perative for rural bankers to, themselves, stay a step ahead in adapting to advances in commu- nications and the dissemination of information.


Mendoza cited the need to keep in step with advances in the fields of technology, microfinance, the


latest banking trends, risk govern- ance and corporate management, fraud and anti-fraud measures to enhance and secure the interest of the rural banking sector. Keeping with the times will not only mean improved effi- ciency for rural banks but also a chance to improve their finan- cial standing, as well as the use of technology reduces operating risks and creates stronger oper- ating fundamentals. Thus, Mendoza said that em- bracing technology is a must for rural banks to exist in a banking landscape where commercial banks are increasingly penetrating areas and markets where we have traditionally dominated. Bigger banks are able to exploit technology advancement faster be- cause of their financial muscle and


rural banks will have to compete or perish. RBAP’s research arm, the Rural Bankers Research and Develop- ment Foundation, has become an indispensable partner of banks in the countryside’s to keep them in tune to the latest in banking tech- nology through trainings and seminars.


The RBAP is training its re- sources to prod members to keep pace with new technologies and open their eyes to new ideas of doing things. Innovation is key to competing in an increasingly complex bank- ing field that is dominated by tech- nological advances.


Hard work and willingness to embrace new ideas, in turn, are re- quired as a mean of survival in an evolving banking world.


they have been busy with a recent product launch as well as with the Christmas parties for dealers and the media. Industry sources said HARI


may leave Campi to focus on its leadership over the Associa- tion of Vehicle Importers and Distributors (AVID). AVID—formed only in June


this year—groups nine car importers. Perez-Agudo is AVID’s president. She had said HARI is “just an


associate member” of Campi. Four Japanese-led assem-


blers, lone exporter Ford Group Philippines, and the Motor Vehicle Parts Manufacturers Association of the Philippines Inc. last year formed the Philippine Automotive Com- petitiveness Council Inc.


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