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  1. #11
    Administrator
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    Jan 1970
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    2 US experts see PH under Aquino Asia’s next tiger economy
    By Michael Lim Ubac
    Philippine Daily Inquirer
    1:55 am | Sunday, August 5th, 2012
    1:55 am | Sunday, August 5th, 2012
    *2800*1443
    President Benigno Aquino III. INQUIRER FILE PHOTO
    The Philippines is now out of the doldrums and on the verge of an economic takeoff, according to two visiting foreign economists.
    *
    The Philippines under President Benigno Aquino III has the “best chance” of becoming a tiger economy in Asia as emerging markets led by China have started slowing down, while the debt crisis in the euro zone and the faltering United States economy continue to spook the markets, said Drs. Tyler Cowen and John Nye.
    *
    Cowen and Nye, who are both professors at the George Mason University in Washington, D.C., were two of several foreign speakers at the inaugural conference on Friday of the Angara Center for Law and Economics, a think tank founded by Sen. Edgardo Angara that will undertake economic research and innovative public policy solutions.
    *
    Nye, who has been named executive director of the Angara Center, is also research director at the Higher School of Economics in Moscow, Russia, a founding member of the International Society for the New Institutional Economics, and in 1997 became a National Fellow at the Hoover Institution in Stanford University.
    *
    Cowen’s most recent book, “The Great Stagnation: How America Ate All the Low-Hanging Fruit, Got Sick, and Will (Eventually) Feel Better,” was one of the most debated nonfiction books in 2011.
    *
    Economic liberation
    *
    “The Philippines has strong economic fundamentals,” said Cowen, citing the economic gains of the two-year-old Aquino administration, English proficiency and the Filipinos’ belief in education as the key ingredients for economic liberation.
    *
    “I would say, maybe, it has the best chance. It really depends on human agency and human volition and making [the] right choices,” he said.
    *
    “If you’re asking what should we look for in a country to be a future winner, I would say look for rising growth, look for a relatively stable fiscal situation. I think skills in English will become increasingly important, a belief in education even though a country’s educational institutions may have problems.
    *
    “And if I ask myself those starting questions, and then I look out there in the world, and I look at the globe and turn it around, guess which country my eyes stop on?” Cowen said.
    *
    Nye cited the “hot money flowing into the Philippines” and the rapid transformation of the country’s telecommunications industry—from very few telephone landlines in the 1980s to almost 80 to 90 percent of Filipinos owning cellular phones today.
    *
    Seize the moment
    *
    Recalling how he had witnessed the ebb and flow of the country’s economy as the longest-serving senator in the post-martial law era, Angara called on Filipinos to seize the moment.
    *
    He noted that successive governments after President Fidel Ramos failed to follow through on reforms that earned for the country the title of “Asia’s next economic tiger” before the advent of the Asian financial crisis in 1997.
    *
    “I remember very distinctly—I was Senate president in the mid-1990s—that because of close collaboration between the executive and the legislature, we pursued a common agenda and nearly made it,” said Angara.
    *
    “For the first time in history, we had a surplus because we introduced the value-added tax, we revamped the central bank, the education system, the health system and such. But in the end, the promise of the Philippines becoming the new tiger economy didn’t materialize because, I think, we dropped the ball at the last minute, and in many cases that has been the story of the Philippines,” he said.
    *
    “We were unable to sustain because we didn’t pursue the structural reforms that would have pushed it and would have sustained it and made us a true tiger. Now, we’re back to that potential, that promise. The potential can only be achieved by a series of key interventions,” he said.
    *
    The senator mentioned key reforms in the economy such as in human capital, health, education, science and technology, research, renewable energy and infrastructure as the areas to support to achieve the sustainable growth that would trickle down to the poor.
    *
    Angara singled out infrastructure development as the one that would speed up the “momentum of change” since this would connect economic zones and big islands in the country.
    *
    “Unless you provide mobility to labor, then you get stuck in Samar or Leyte, and they’ll do anything to get to Metro Manila and create those slums. Infrastructure is key. How many airports do we have that are unflyable because there are no connecting roads?” he said.
    *
    Poor policymaking
    *
    Angara personally invited Cowen and Nye, among other experts in law and economics, both foreign and local, to tackle global economic reforms and to identify the key factors for achieving economic growth.
    *
    “Now is an auspicious time to launch the center. President Benigno Aquino III is projecting a strong economic takeoff for the Philippines—and the center is in a position to contribute toward making growth sustainable,” he said.
    *
    “This is a small, initial step toward trying to open the Filipino mind to the outside world. As all the speakers have said, we try to create new ideas, new insights so that we can join the global conversation,” he said.
    *
    Angara said he had seen the “poor quality of policymaking in this country.”
    *
    Opportunities in recession
    *
    “We have really good research and researchers, but we have no organized research on strategic areas—research that will support lawmaking and administrative and executive policymaking.”
    *
    *
    The conference tackled wide-ranging issues such as global investment, human capital, corruption, international arbitration and enforcement, dispute settlements, and public policy issues in international trade and investment.
    *
    Cowen, ranked one of the world’s most influential thinkers by Foreign Policy magazine, led the panel discussion on “Globalization, Innovation and Economic Growth.”
    *
    He enumerated the current economic opportunities for developing countries as well as the issues on institutional reform and how to take advantage of the slowdown in the largest economies.
    *
    “Recession creates opportunities. What is it you are doing now to move forward?” he said.
    *
    According to Cowen, the Philippines has joined the ranks of a select group of emerging economies that global fund managers and investors are seriously taking notice of. The others are Indonesia and a few sub-Saharan countries.
    *
    Cowen’s plenary address was followed by lectures from eminent scholars in the field.
    *
    Focus on 2 areas
    *
    Nye explained the interaction among human capital, social norms and the creation of institutions, and the importance of simple and consistent rules that are clearly enforced to address corruption.
    *
    To achieve long-range changes, he said the Philippines should focus on two areas: simplify the rules and further open up the market.
    *
    “The most important change is the mindset of protection and nationalism. There are good reasons to protect the Philippine economy, but there are also bad reasons,” he said.
    *
    “Isn’t there some compromise where we loosen up these laws a little bit? I’m not talking about removing these laws, just opening up enough to attract more investments, more development, more decentralization so we can hire more of those workers here in the Philippines,” Nye said.
    *
    He talked of ways to “transition” the agriculture industry.
    *
    “If you look at China’s development, a lot of their developments over the past 40 years boils down to helping more people move from the countryside to the city and turning more cities into development areas,” he said.
    *
    He ended with a question better answered by President Aquino and his economic advisers: “How do you make the policy good and credibly consistent?”

  2. #12
    Administrator
    Join Date
    Jan 1970
    Posts
    87
    Blog Entries
    6
    2 US experts see PH under Aquino Asia’s next tiger economy
    By Michael Lim Ubac
    Philippine Daily Inquirer
    1:55 am | Sunday, August 5th, 2012
    1:55 am | Sunday, August 5th, 2012
    *2800*1443
    President Benigno Aquino III. INQUIRER FILE PHOTO
    The Philippines is now out of the doldrums and on the verge of an economic takeoff, according to two visiting foreign economists.
    *
    The Philippines under President Benigno Aquino III has the “best chance” of becoming a tiger economy in Asia as emerging markets led by China have started slowing down, while the debt crisis in the euro zone and the faltering United States economy continue to spook the markets, said Drs. Tyler Cowen and John Nye.
    *
    Cowen and Nye, who are both professors at the George Mason University in Washington, D.C., were two of several foreign speakers at the inaugural conference on Friday of the Angara Center for Law and Economics, a think tank founded by Sen. Edgardo Angara that will undertake economic research and innovative public policy solutions.
    *
    Nye, who has been named executive director of the Angara Center, is also research director at the Higher School of Economics in Moscow, Russia, a founding member of the International Society for the New Institutional Economics, and in 1997 became a National Fellow at the Hoover Institution in Stanford University.
    *
    Cowen’s most recent book, “The Great Stagnation: How America Ate All the Low-Hanging Fruit, Got Sick, and Will (Eventually) Feel Better,” was one of the most debated nonfiction books in 2011.
    *
    Economic liberation
    *
    “The Philippines has strong economic fundamentals,” said Cowen, citing the economic gains of the two-year-old Aquino administration, English proficiency and the Filipinos’ belief in education as the key ingredients for economic liberation.
    *
    “I would say, maybe, it has the best chance. It really depends on human agency and human volition and making [the] right choices,” he said.
    *
    “If you’re asking what should we look for in a country to be a future winner, I would say look for rising growth, look for a relatively stable fiscal situation. I think skills in English will become increasingly important, a belief in education even though a country’s educational institutions may have problems.
    *
    “And if I ask myself those starting questions, and then I look out there in the world, and I look at the globe and turn it around, guess which country my eyes stop on?” Cowen said.
    *
    Nye cited the “hot money flowing into the Philippines” and the rapid transformation of the country’s telecommunications industry—from very few telephone landlines in the 1980s to almost 80 to 90 percent of Filipinos owning cellular phones today.
    *
    Seize the moment
    *
    Recalling how he had witnessed the ebb and flow of the country’s economy as the longest-serving senator in the post-martial law era, Angara called on Filipinos to seize the moment.
    *
    He noted that successive governments after President Fidel Ramos failed to follow through on reforms that earned for the country the title of “Asia’s next economic tiger” before the advent of the Asian financial crisis in 1997.
    *
    “I remember very distinctly—I was Senate president in the mid-1990s—that because of close collaboration between the executive and the legislature, we pursued a common agenda and nearly made it,” said Angara.
    *
    “For the first time in history, we had a surplus because we introduced the value-added tax, we revamped the central bank, the education system, the health system and such. But in the end, the promise of the Philippines becoming the new tiger economy didn’t materialize because, I think, we dropped the ball at the last minute, and in many cases that has been the story of the Philippines,” he said.
    *
    “We were unable to sustain because we didn’t pursue the structural reforms that would have pushed it and would have sustained it and made us a true tiger. Now, we’re back to that potential, that promise. The potential can only be achieved by a series of key interventions,” he said.
    *
    The senator mentioned key reforms in the economy such as in human capital, health, education, science and technology, research, renewable energy and infrastructure as the areas to support to achieve the sustainable growth that would trickle down to the poor.
    *
    Angara singled out infrastructure development as the one that would speed up the “momentum of change” since this would connect economic zones and big islands in the country.
    *
    “Unless you provide mobility to labor, then you get stuck in Samar or Leyte, and they’ll do anything to get to Metro Manila and create those slums. Infrastructure is key. How many airports do we have that are unflyable because there are no connecting roads?” he said.
    *
    Poor policymaking
    *
    Angara personally invited Cowen and Nye, among other experts in law and economics, both foreign and local, to tackle global economic reforms and to identify the key factors for achieving economic growth.
    *
    “Now is an auspicious time to launch the center. President Benigno Aquino III is projecting a strong economic takeoff for the Philippines—and the center is in a position to contribute toward making growth sustainable,” he said.
    *
    “This is a small, initial step toward trying to open the Filipino mind to the outside world. As all the speakers have said, we try to create new ideas, new insights so that we can join the global conversation,” he said.
    *
    Angara said he had seen the “poor quality of policymaking in this country.”
    *
    Opportunities in recession
    *
    “We have really good research and researchers, but we have no organized research on strategic areas—research that will support lawmaking and administrative and executive policymaking.”
    *
    *
    The conference tackled wide-ranging issues such as global investment, human capital, corruption, international arbitration and enforcement, dispute settlements, and public policy issues in international trade and investment.
    *
    Cowen, ranked one of the world’s most influential thinkers by Foreign Policy magazine, led the panel discussion on “Globalization, Innovation and Economic Growth.”
    *
    He enumerated the current economic opportunities for developing countries as well as the issues on institutional reform and how to take advantage of the slowdown in the largest economies.
    *
    “Recession creates opportunities. What is it you are doing now to move forward?” he said.
    *
    According to Cowen, the Philippines has joined the ranks of a select group of emerging economies that global fund managers and investors are seriously taking notice of. The others are Indonesia and a few sub-Saharan countries.
    *
    Cowen’s plenary address was followed by lectures from eminent scholars in the field.
    *
    Focus on 2 areas
    *
    Nye explained the interaction among human capital, social norms and the creation of institutions, and the importance of simple and consistent rules that are clearly enforced to address corruption.
    *
    To achieve long-range changes, he said the Philippines should focus on two areas: simplify the rules and further open up the market.
    *
    “The most important change is the mindset of protection and nationalism. There are good reasons to protect the Philippine economy, but there are also bad reasons,” he said.
    *
    “Isn’t there some compromise where we loosen up these laws a little bit? I’m not talking about removing these laws, just opening up enough to attract more investments, more development, more decentralization so we can hire more of those workers here in the Philippines,” Nye said.
    *
    He talked of ways to “transition” the agriculture industry.
    *
    “If you look at China’s development, a lot of their developments over the past 40 years boils down to helping more people move from the countryside to the city and turning more cities into development areas,” he said.
    *
    He ended with a question better answered by President Aquino and his economic advisers: “How do you make the policy good and credibly consistent?”

  3. #13
    PH one of the best performers in Asia: ANZ Bank

    ABS-CBNnews.com
    Posted at 08/06/2012 6:11 PM | Updated as of 08/06/2012 7:12 PM


    MANILA, Philippines - The Philippines is seen as one of the best performers in Asia, according to the chief economist of Australia-based ANZ Bank.

    In an interview with ANC's Coco Alcuaz, ANZ's chief economist for Asia Pacific Paul Gruenwald said the Philippine economy is "quite in a sweet spot."

    "We're quite positive on the Philippines. I just got back from a trip to New York. Investors are interested. We see an economy that is quite in a sweet spot. We've got (Philippine) growth very strong at 5-6% and inflation under control," he said.

    Gruenwald cited the Aquino government's efforts to improve public finances and expenditures, as well as the booming business process outsourcing industry.

    "(The Philippines) has two structural developments, which are quite positive. The Aquino government is very keen on improving public finances and we've seen a good deal of expenditure restraint and a bigger improvement in the government balances," he said.

    "Second is the BPOs, business process outsourcing, which seem to be providing a good spark for the domestic economy. So when you put them all together,we see the Philippines as one of the best performers in Asia."

    However, the Philippines is not entirely insulated from any fallout from the euro zone debt crisis and a slowing global economy.

    Gruenwald said the Philippines won't be as less vulnerable as Indonesia and India, which are domestic-driven economies.

    But the country may be stronger than the more open economies of Singapore and Hong Kong.

    "The Philippines is kind of in the middle of the pack. It's certainly important to see the euro debt crisis resolved. Europe is Asia's biggest trading partner, it's an even bigger trading partner than the US," the economist said. With ANC
    www.Gameface.ph: Changing The Face of The Game!

  4. #14

    Fresh paradigm needed

    By: Melba Padilla Maggay

    Philippine Daily Inquirer

    11:28 pm | Saturday, August 11th, 2012

    President Aquino’s latest State of the Nation Address was remarkable in a number of ways, not the least of which was its going for the visceral: He delivered it completely in Filipino, in an effort to communicate to those of us whose intelligence resides primarily in the stomach. Instead of abstract measures like GDP growth, the achievements detailed were concrete and to the point—more jobs, more classrooms, more roads, more rice production, achievements made more impressive because contrasted with the long and maleficent record of the past administration.

    It is tempting to dismiss these as a mere list of to-dos for a normal administration. It is easy to fault it for what was missing: a larger sense of vision, an overarching principle, or even just a programmatic framework behind the touted statistics.

    It could be argued that there was in fact a bigger frame that held all the discrete facts presented: the idea of “inclusive growth,” of enlarging the economy while first putting the basic needs of the poor—jobs to keep their heads above water, education to break the cycle of poverty for the next generation, roads and market accessibility for the poor farmer and trader, food security for all, and the promise of regional airports and better infrastructure for tourism, which happens to be one of the fastest ways of generating jobs for those whose only asset is the labor of their hands.

    The President himself summed these all up as the social and economic dividends of his “daang matuwid.” It is truly cause for rejoicing that corruption can be punished, that justice can now be had by both the poor and the powerful. One psychological gain of the will to put power behind good governance is what the Italian Camilo Cavour once said about a necessary trait for a statesman: “a sense of the possible.” Given the kind of governance we have been used to, it is indeed a novelty to believe that what used to look impossible before can now be done.

    But a hint of a cloud shadows this upbeat picture of what is ahead. Like the low-level discomfort of off-stage noise, it comes to the fore when things like modernizing aircraft and other military hardware get mentioned, or when so much is made of our credit ratings and standing abroad. While we must certainly defend our territorial waters and provide our soldiers decent pay and equipment, one wonders where the money for these big-ticket items is coming from, and at what price. More debts loom, our confidence to borrow boosted by our newfound standing as a lender to the European emergency rescue fund.

    Similarly, while we do not despise “the day of small things”—the many little changes that are happening, wrested inch by inch, from the recalcitrant forces that have beset us since the dismantling of martial law—we sense that something has yet to change fundamentally in the way we approach the problem of growth and poverty.

    It has been more than half a century since US President Harry Truman inaugurated the “development age” and the Bretton Woods institutions that would preside over it. The optimistic projection that poverty, injustice and ignorance shall inevitably get wiped out as societies clamber up this train of evolutionary progress as prophesied by Walt Rostow has yet to show up.

    Past globalization and the economic meltdown, the rise of underclasses in Europe and the unrest in Wall Street, even western economies are discovering that enlarging the pie will not necessarily have a “trickle-down” effect for the poor. We all have been lured into this unilinear idea of “development,” thinking that the way the West has developed can be universalized, and the problem of the poor solved by technology and merely market forces.

    Certainly, the crumbling of socialist economies tells us that imperfect market mechanisms are better than imperfect governments in creating wealth. But recent experience also tells us that growth can exist alongside increasing hunger.

    In much of the past decade, from 2003 to 2009, for instance, the economy grew by an average of 4.8 percent, but the poor increased from 19.1 million to 23.1 million. Mahar Mangahas of the Social Weather Stations has observed that the Philippines’ economic crisis is not so much in terms of finance, which mostly threatens the rich, as in the form of hunger, which is suffered by the poor. This has prompted the searching question raised at a Philippine Development Forum by the international donor community: “How come there is rising poverty and hunger in the midst of growth?”

    Part of the complex answer is the type of development we have been pursuing. Modernization is not always good for the poor. Even when government-sponsored growth results in unequivocal good, this still tends to bypass the poor. As an expert observes:

    “The benefits of economic growth in the formal sector of Third World economies tend to bypass the poor because modern-sector development projects, even those that are designated projects of national significance, do little to improve the productivity of the poor. A new power plant, a new hospital, improved seaport facilities, a new airport terminal, or a new timber mill may augment the standard of living of bureaucrats, the captains of industry, skilled workers and professionals in the formal work force, but will make barely a difference to the value-added generated by the firms that employ the poor, produce for the poor and sell to the poor.”

    Clearly, in a context where great social and economic imbalances exist, development initiatives will tend to benefit only a thin layer of the elite classes. Long ago, Gunnar Myrdal, speaking out of the caste system in India, already found that no amount of technical solutions can work within the disincentives posed by systemic inequality. “Greater equality,” he said, “is a precondition for lifting a society out of poverty.”

    It was once said, quite prematurely, that we are at the “end of history”; the once deadly ideological battles that used to preoccupy us are over. What is before us are only boring technical questions of how to make economies grow.

    No, the massive poverty that surrounds us demands a fresh paradigm that restores the poor at the center of our vision. We sense the seriousness of the Aquino administration in wanting to see to it that no one gets left behind. But this will not happen unless it has a clear and fresh sense of where we should be going and how to get there, apart from the development path others have marked out for us. This is the framing element we have been missing, and wish to hear, in future Sonas. Sana…

    Melba Padilla Maggay, Ph.D., is a social anthropologist and the founder and president of the Institute for Studies in Asian Church and Culture. E-mail her at melbamaggay@isacc.org.ph.
    FRIENDS LANG KAMI

  5. #15
    Why the Philippines can be a 'breakout nation'

    by Cathy Rose A. Garcia, ABS-CBNnews.com
    Posted at 08/16/2012 5:17 PM | Updated as of 08/17/2012 1:12 PM


    MANILA, Philippines - The Philippines can become one of the so-called "breakout nations," according to Ruchir Sharma, author of "Breakout Nations" and head of Morgan Stanley Emerging Markets Asset Management.

    "Breakout nations" are defined by Sharma as countries that have been beating growth expectations. Sharma noted the Philippines is one example since the economy has been exceeding expectations, albeit low expectations.

    "In the case of the Philippines, after being a laggard in Asia and an economy that was reduced to being a bit of a joke, expectations are being systematically exceeded. When I came back to Manila in 2010, after a long period of time, we could see the potential for that. Expectations were very low and there was a positive change going on in the Philippines," Sharma told ANC's News Now.

    One of the positive changes, Sharma said, is the Aquino administration's focus on good governance and anti-corruption campaign.

    "In Philippines, it is a combination of factors, starting with low expectations and a change in leadership that was much more focused on improving governance and the other faultlines in the Philippines such as corruption and cronyism," he said.

    The Philippines is expected to once again exceed growth expectations this year, but Sharma noted if the government pushes with its public private partnership program and mining reforms, it can grow even more.

    "(The Philippines) seems to be on course to grow at 6%, which is a very good growth rate at a time when the global economy is so weak. Just imagine the potential when it gets a couple of economic things right, whether PPP, geting the power or mining sector sorted out, if it manages to get a couple of things right from here, the Philippine economy can do even better," Sharma said.

    There may be a lot of skepticism right now whether the Philippines can actually become a "breakout nation."

    "As investors and market observers that's what we almost like, you want skepticism because once a story is well-known to people, it's almost too late," Sharma said.

    "The Philippines has been an economy that has disappointed for a long period of time and I think there's a long way for the Philippines to go before it can convert many people and by the time many people are converted, you know its time to get skeptical. I think we are far away from that point right now."

    As for the so-called BRIC economies (Brazil, Russia, India and China), Sharma does not believe in the hype.

    "What happened with a lot of these BRIC economies is that hype has surrounded these economies and disappointment vis-a-vis expectations. Take the case of India, the growth rate during the boom was 9% and now it has fallen to 6%. It's not bad but versus expectations, that's a real disappointment. Same thing going on in China," he said.

    However, Sharma warns that economic success can be fleeting, as the star economies of one decade are rarely the stars of another decade.

    "That has to be the big lesson, looking back at Philippine history, in 1960s the Philippines was 2nd richest in Asia after Japan and supposed to be the next East Asian tiger with Burma and Sri Lanka and you know what happened to all of them - for the next 30-40 years, all those three economies systematically disappointed... Success is transient, it can last for a few years but it can be hard to sustain," he said.
    www.Gameface.ph: Changing The Face of The Game!

  6. #16
    Home › Business ›
    PH is Asia’s 'new darling of investors' - report

    ABS-CBNnews.com
    Posted at 08/30/2012 6:39 PM | Updated as of 08/31/2012 9:31 AM


    MANILA, Philippines - The Philippines is emerging as "Asia's new darling of investors," according to a report on Thursday.

    CNBC Asia published the article "Who Is Asia’s New Darling of Investors?" on Thursday, as the Philippines reported a 5.9% GDP growth rate in the second quarter, bringing its first half GDP growth to 6.1%.


    The Philippines' services-led growth has impressed several regional economists, especially since the second quarter GDP figure is one of the highest in Asia, next only to China and Indonesia. The Philippines' 5.9% GDP growth in the second quarter bested Malaysia (5.4%), Vietnam (4.4%), Thailand (4.2%) and Singapore (2%).

    Barclays Regional Economist Prakriti Sofat called the country as "Asia's rising star." Sofat also expects a credit ratings upgrade for the Philippines in the second half of the year.

    The CNBC article also quoted Medha Samant, Investment Director at Fidelity Worldwide Investment, as saying the Philippines is the "new market darling" for foreign investors. He cited the Philippines' "reduced fiscal deficit, strong domestic demand and high overseas foreign worker remittances."

    Aside from remittances, the country's business process outsourcing sector continues to experience strong growth.

    "The Phillippines BPO sector employs almost the same number as bank workers today…there are opportunities in this market that we are quite excited about," Medha said.

    The Philippines is the world's biggest call center hub, with $7.6 billion in voice service exports as compared to India’s $7 billion, according to US-based research firm Everest Group.

    The CNBC report comes on the heels of an article* "A Youthful Populace Helps Make the Philippines an Economic Bright Spot in Asia" published on The New York Times on August 27.
    www.Gameface.ph: Changing The Face of The Game!

  7. #17

    PH competitiveness ranking up by 10 notches

    First time country is in top 50% of world ranking

    By Michelle V. Remo

    Philippine Daily Inquirer

    11:47 pm | Wednesday, September 5th, 2012

    Enjoying a favorable economic performance and having a government that claims to put premium on its anticorruption drive, the Philippines leaped 10 notches in the global competitiveness ranking for the year to 65th spot out of 144 countries.

    The country’s latest performance followed a similar 10-notch jump to the 75th spot last year, resulting in an overall 20-notch jump so far under the Aquino administration.

    “The Philippines makes important strides this year in improving competitiveness—albeit often from a very low base—especially with respect to its public institutions,” The World Economic Forum (WEF) said in its 2012-2013 Global Competitiveness Report, which was released Wednesday worldwide.

    The WEF said the Philippines was one of the few countries that registered a double-digit improvement in ranking this year.

    The Philippines landed on the 65th spot after it registered an overall score of 4.23 points (out of 7 points) across all 12 categories considered by businesses as major areas for determining a country’s competitiveness.

    Guillermo Luz, cochairman of the Philippines’ National Competitiveness Council (NCC), said at a press conference Wednesday that this year was the first time the country landed on the upper 50 percent of countries ranked in the global competitiveness survey.

    He said the NCC was targeting the Philippines to join the upper one-third of the global competitiveness rankings by 2016, the end of the Aquino administration.

    12 pillars

    The survey on global competitiveness, which taps businesses as respondents, grades countries based on the following 12 categories or “pillars.”

    These are the following: [government] institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

    Luz said the Philippines registered improvements in 11 out of the 12 categories.

    Huge gain in institutions

    The Philippines gained the most in the “institutions” category, where it jumped 23 places to the 94th spot from last year’s 117th.

    In the “infrastructure” category, the country improved its ranking by seven places to 98th; for “macroeconomic environment,” up 18 places to 36th; for “higher education” and training, up seven places to 64th; for goods market efficiency, up two places to 86th; for labor market efficiency, up 10 places to 103rd; for financial market development, up 13 places to 58th; for “technological readiness,” up four places to 79th; for “market size,” up one place to 35th; for “business sophistication,” up eight places to 49th; and for “innovation,” up 14 places to 94th.

    Drop in health, primary education

    The only category where the Philippines registered a slippage was in “health and primary education,” where it fell six places to 98th.

    The country’s favorable performance in the “institutions” category reflects the success of the Aquino administration in convincing the business sector that there has been an improvement in governance, Luz said.

    Of the 15,000 businesses that responded to the global competitiveness survey for this year, 132 came from the Philippines.

    On macroeconomic environment, Luz attributed the country’s improved ranking to the country’s favorable economic performance.

    The Philippine economy grew 5.9 percent in the second quarter from a year ago, making the country one of the fastest-growing economies in Asia. This brought its average growth rate for the first semester to 6.1 percent, making the government’s full-year growth target of 5 to 6 percent attainable.

    Infra spending low

    But Ramon del Rosario Jr., chairman of the Makati Business Club, said a lot of work still had to be done in several areas to help ensure that the Philippines reaches the upper-third rankings in 2016.

    To reach the upper upper third, the country must improve significantly on infrastructure development and market efficiency, particularly labor market efficiency, Del Rosario said.

    Despite increases in government spending on infrastructure this year, infrastructure investment in the Philippines remains one of the lowest in the region.

    Infrastructure spending in the country is estimated to be equivalent to less than 3 percent of its gross domestic product, below the 5 percent average for Southeast Asia.

    “Despite these very positive trends, many weaknesses remain to be addressed. The country’s infrastructure is still in a dire state, particularly with respect to sea and air transport, with little or no progress achieved to date,” Del Rosario said at the press conference.

    He said businesses considered infrastructure a vital area in deciding whether to invest in a country.

    With its improved performance this year, the Philippines has beaten Vietnam, which enjoyed better rankings in the previous years. This year, Vietnam ranked 75th.

    The Philippines, however, continues to lag behind other major Asian economies in the competitiveness rankings.

    Hong Kong ranked 9th, Taiwan 13th, South Korea 19th, Malaysia 25th, China 29th, Thailand 38th, Indonesia 50th and India, 59th.

    Singapore remained the highest ranking among Asian countries, landing on the second spot, the same as its last year’s ranking.

    Switzerland was again named the most globally competitive country.

  8. #18

    Let’s get moving

    By Peter Wallace

    Philippine Daily Inquirer

    1:00 am | Thursday, September 6th, 2012

    The second-quarter GDP growth of 5.9 percent was unexpectedly strong and boded well for the full-year growth outcome. For the first time in many years, what’s happening in the world is of more concern than what is happening in the Philippines. Among the world’s countries, the Philippines now stands out as a stable, growing economy in a sea of doubt for the Western world and turmoil for the Middle East. Plus a China that’s beginning to show cracks.

    The growth rate even compares quite well to other Asian countries for the first time in a long while. It is better than Malaysia’s 5.4 percent, Vietnam’s 4.4 percent, Thailand’s 4.2 percent and Singapore’s 2 percent. Only Indonesia (6.4 percent) outpaced the Philippines among comparable economies in Southeast Asia.

    It was a bit slower than the 6.3-percent growth in the first quarter, which could indicate a worrying trend. But the average growth of 6.1 percent in the first half of 2012 was still a significant improvement from 4.2 percent in the same period last year. The projected growth of 5-6 percent now seems more certain of attainment. But this means it will decelerate in the second half as the sluggish world economy will have its inevitable impact on exports, and the effect of the low base particularly in infrastructure spending in 2011 will begin to dissipate (the second half of 2011 was stronger than the first half). Something more toward the middle of the range can be expected, with a continuance into 2013 when growth will in part be driven by money finally being spent on public-private partnership projects.

    But the government is still not spending anywhere near enough on infrastructure, and this remains not only a drag on the economy but also a severe deterrent to investment. I spent nine hours on the road last Saturday going to a village in the near north—a trip that should have taken three hours max. Six hours wasted. You can’t do business like that.

    And this is beginning to stand out to me: Infrastructure with all its high leverage impact must be built at a much, much faster rate. It is hoped that the importance of that will be recognized by the new secretary of the Department of Transportation and Communications, where so many of the PPP projects reside. But the real recognition of urgency must be at the very top—the President.

    P-Noy must put all the weight of his enormous powers behind building. Roads, airports, seaports, railroads, power plants and water systems must be built, not just planned or promised, with extreme urgency. The government must spend a minimum of 5 percent, preferably 8 percent (yes, not the historic 2-2.5 percent of GDP, and PPP must add another percentage point. And that must be in 2013, not in some lazy time in the future.

    Too much of the economy is still on the consumption side. It is not driven as a healthy economy needs to be—by supply. The 7-percent+ sustained growth needed to include the poor has to be driven by strong production of goods and services. Services alone can’t do it. The less educated need factory jobs. Manufacturing must be vastly expanded to create those jobs. That has yet to occur, and won’t occur without change.

    Something that will help that to occur is opening up the economy. The ill-considered restrictions in the Constitution need to be lifted. And they may be if the President can be convinced of the need and, importantly, be convinced that a scurrilous Congress won’t hijack the debate and lengthen term limits, too. It’s a legitimate fear given the reputation of politicians, but we think in this case an unwarranted one. There’d be enough public opposition to temper their ambitions.

    Opening up the economy will go well beyond those sectors that will directly benefit; it will change perception (and perception drives decision). It will say: Everyone is equally welcome here, come in and be fairly treated. We believe the President will be convinced; Congress leaders already are. So a fully open economy by the second half of 2013 (a plebiscite may be held together with the May midterm elections) is now in the cards. Let’s hope the President agrees to it.

    On the other hand, the President’s single-minded focus on addressing corruption may be starting to have a life of its own. But it’s a life that needs a decade to mature, and that means a leader equally determined beyond 2016. That means that the cleanup should be institutionalized so that it will be hard to reverse. That will be difficult to do, and I give the President less than a 50-percent chance of doing so.

    What will help is to fully computerize in an integrated fashion all government services (as I’ve said before, it’s hard to pass a brown envelope under the table to a computer). The creation of a Department of Information and Communication Technologies will be an important step in achieving that. A bill has been approved on third and final reading by both the House and the Senate. The measure is currently up for bicameral committee approval. But then the President may veto it if he can’t be urgently convinced of its need (it’s not among his priorities).

    It highlights a problem with the presidential system, which is that it panders to the hierarchical nature of the Philippines. There’s a reverence for the boss (I like that) at a level not common elsewhere. A Philippine president is almost royalty. A parliamentary system somewhat levels the field. A prime minister is a first among equals, and may be taken out by a simple vote of confidence if he doesn’t perform. That alone is a good reason to fully review the Constitution, but perhaps too risky now. Let the country settle down to a more stable course first.

    But let’s get moving.

  9. #19

    Phl up 10 notches to 65th in competitiveness

    By Louella Desiderio

    (The Philippine Star) Updated September 06, 2012 12:00 AM

    MANILA, Philippines - The Philippines was among the countries showing the most improvement in terms of competitiveness as its ranking went up to 65 this year from 75 last year, the World Economic Forum (WEF) said.

    The WEF said in its Global Competitiveness Report released yesterday that the country placed 65th out of 144 countries in the survey conducted from April to June.

    Makati Business Club (MBC) chairman Ramon del Rosario said at the report’s launch yesterday this is the second straight year the country climbed 10 places up the competitiveness ladder.

    The country placed 75th last year, an improvement from the 85th spot in 2010.

    Del Rosario noted that as the Philippines got a record-high global competitiveness index score of 4.23, it is now in the upper 45 percentile of economies assessed by the WEF, better than the previous high of 53 percentile in 2008 and 2011.

    “The sustained and rapid advance of the Philippines in the global competitiveness index owes a lot to improvements in 11 out of the 12 pillars of competitiveness considered by the Global Competitiveness Report,” he said.

    He said the institutions pillar went up 23 places to the 94th spot, while the infrastructure pillar jumped seven places to the 98th spot.

    The macroeconomic environment pillar went up 18 places to the 36th spot, while higher education and training also improved by seven places to rank 64th.

    Other pillars which showed improved rankings were good market efficiency which placed 84th from 86th; labor market efficiency which went up 10 places to 103; financial market development which rose to 13 places to 58; technological readiness which climbed four places to 79; market size which was up to 34 from 35; business sophistication which increased by eight places to 49; and innovation which was up 14 places to 94.

    The only pillar which did not see an improved ranking was health and primary education as none of the indicators under that category posted gains.

    Out of the 11 indicators listed by the report, the Philippines placed 50 and below in 25 indicators.

    The indicators considered as the country’s competitive advantages are HIV prevalence, available airline seat kilometers, degree of customer orientation, willingness to delegate authority, domestic market size, extent of staff training, affordability of financial services, government budget balance, financing through local equity market, cooperation in labor employer relations, reliance on professional management, state of cluster development, quality of management schools, foreign direct investment and technology transfer, foreign market size, soundness of banks, extent of marketing, quality of the educational system, ease of access to loans, regulation of securities exchanges, firm level technology adoption, gross national savings, local supplier quantity, intensity of local competition and availability of financial services.

    Despite gains, the report cited that there are still many weaknesses that needed to be addressed.

    “Corruption, inefficient government bureaucracy, and inadequate infrastructure still remain the top three problematic factors for doing business in the Philippines,” Del Rosario said.

    He noted though that the weaknesses have been cited by fewer survey respondents, showing that the perception corruption has not been stamped out is being addressed.

    Compared to seven other countries in the Southeast Asian region, the MBC noted that the Philippines is now two steps above bottom from next to bottom last year.

    The Philippines is ahead of Vietnam, which placed 75th and Cambodia which ranked 85th.

    Guillermo Luz, private sector co-chair of the National Competitiveness Council, said in the same event that they are relatively happy with the improvements in the rankings.

    He noted though that more action still needs to be done in areas which remain to be top concerns of the business community in order to achieve the goal of being counted among the top 30 percent most competitive by 2016.

    “Work in progress no longer counts... The business community is looking for results,” he said.

    Meanwhile, Malacanang expressed elation over the Global Competitiveness Report that showed the Philippines climbing another 10 notches to 65th out of 144 economies.

    According to Presidential spokesman Edwin Lacierda these significant gains in the competitiveness of the Philippines were concrete affirmations of the success of the reforms that government continued to implement and foster.

    “Notable gains were made with respect to Philippine public institutions (94th, up 23 places) and public trust in politicians (95th, up 33). This represents a steady renewal of social trust and the strengthening of our institutions as a result of the reforms the Aquino administration has pursued since 2010,” Lacierda said.

    “Contributing to this favorable ranking are strong scores in transparency in policy formation (up 23) and fairness in awarding of contracts (up 19). Improvements were also noted in minimizing the following: diversion of public funds (up 27), wastefulness of government spending (up 23), and irregular payments or bribes (up 11),” he added.

    Although the judicial situation remains at 111th rank, Lacierda noted that the new court leadership is expected to address the quality of judicial decisions. – With Aurea Calica

  10. #20

    Consistency is needed

    By Peter Wallace

    Philippine Daily Inquirer

    1:08 am | Thursday, September 27th, 2012

    I want to plagiarize today, except that I’ll give credit so I suppose that exonerates me. I’m going to summarize an article in The Economist of Sept. 15. It seems that with the positive business attitude now prevailing, the Department of Trade and Industry-Board of Investments has a great opportunity to go out and sell. But the first thing it must do is gain recognition that the Philippines even exists.

    Here’s The Economist discussing Vietnam: “Now, with slower growth, huge business debts and more competition from places such as Cambodia, Indonesia and Myanmar, the problems loom large.”

    Why isn’t the Philippines even mentioned? Is Burma (Myanmar) really that attractive, or Cambodia? Aung San Suu Kyi is out, but surely there’s a very long way to go before you’d feel secure investing there. I find this a lot. It’s not that the Philippines is relegated to an also-ran position; it’s that it’s not mentioned at all when investment comparisons are made. I’ve never figured out why. The realities here are as good as elsewhere—and improving, if a true comparison is made.

    The Economist also had this to say on Vietnam: “The whole episode (a bank scandal) reminded investors that after years of sloppy management and exuberant lending, Vietnam’s banks are in dire shape; and that corruption and waste pervade the economy. This was never a secret, but during the boom years in the middle of the past decade, when the economy was growing by 8 percent a year and foreign investment was pouring in, nobody much cared.” Philippine banks are in excellent shape, with a nonperforming loans ratio of a little over 2 percent, an annual average profit and asset growth (2008 to 2011) of 18 percent and 9 percent, respectively, and more money than they can lend out (mind you, they can be a bit more adventurous here and lend to more small entrepreneurs).

    “…[C]onfidence in the Vietnamese economy, especially among Western investors, is tumbling. Foreign direct investment into Vietnam, at $8 billion for the first seven months of the year, is a third lower than a year earlier.”

    Confidence is tumbling? That $8 billion is juxtaposed against a mere $1 billion here. That’s a “tumble” we’d welcome.

    The Economist continues: “The privileged place of the state enterprises—accounting for two-fifths of the country’s output—is chiefly responsible for all the graft, misallocation of resources and mad spending that drags Vietnam down. Foreign executives say it is a nightmare doing business there.”

    “As in China, the Communists cling to the state enterprises as a means of keeping political control over the economy. Yet it means that politically connected but incompetent managers have been allowed to build up sprawling empires.”

    Now, is that a better place to do business in than here? Why do so many think so when, as the numbers show, $42 billion went into Vietnam in the past decade, and $16 billion here? There’s a huge disconnect between perception and reality. Certainly, the Philippines is no idyll when wanting to start or do business, but others are little better. We’ve just read about Vietnam, but what about Thailand or Indonesia? (I’ll concede Singapore, Hong Kong, even Malaysia.)

    My perception (and anecdotal evidence) is that the subsidiaries of multinationals here do as well as, or better than, subs of the same companies elsewhere. I’d like to research it but no one seems interested in funding that research.

    Yet new business doesn’t come. There are a number of reasons, and I and many others have highlighted these interminably. Let me focus on just one in this column: consistency. You don’t invest for six years, you invest for 50 or 100 or even more (Nestlé has been here for 101 years, Coke 100). But Philippine administrations seem to think they must change the rules of the game to prove they are different.

    What’s happening in mining today is a perfect example of that. The rules were there. They were reasonable, understood, and accepted. Now they’ve been capriciously (that’s the correct word) changed. Even companies with existing operations have been affected as the furor over contract renewals surfaced with the release of EO 79’s implementing rules and regulations.

    Contract sanctity is inviolate. It is a party’s word of honor to uphold an agreement; it cannot be unilaterally changed or, worse, cancelled. Corruption is the only valid reason to question a contract. Yet Philippine administrations, including this one, have shown themselves willing to change contracts for “the good of the nation.” And maybe such changes would be, but YOU CAN’T DO THEM. You have a contractual obligation to honor.

    And don’t pretend it will be by mutual agreement. There’s nothing “mutual” about a government negotiating, just ask the independent power producers during GMA’s reign.

    Even if the administration backtracks on the conditions of EO 79—and it certainly should, not just on the 25-year lease renewal, but on much else—the damage has been done: The Philippine government’s word can’t be trusted. Just ask Thales-Sumitomo, whose contract, signed by the government, has been in abeyance for over a year. Or BDC, who is suing the government for the cancellation of its contract to dredge Laguna de Bay. Maybe it wasn’t the best solution, but it was a signed contract. If there were valid reasons to cancel—and they’d have to be very strong—then full and immediate recompense must be made. There was no such thing.

    It’s not just contracts, it’s all aspects of business. If you register to do business here, you are in effect entering into a contract with the government. You promise to operate ethically and honestly, to pay your taxes, to look after your employees, and service your customers. The government in return promises to provide you a fair, decent environment within which to operate, where the rules are known and consistent.

    Otherwise, you go to Vietnam.
    FRIENDS LANG KAMI


 
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