National Broadband Network
Network Attack
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| The government can tap the existing broadband networks run by private telecommunications companies |
Businessmen and economists have banded together to ask the government to abrogate a US$330 million supply contract it entered into with a Chinese state-owned company to put up a national broadband network. In a statement released in June, the Makati Business Club, Management Association of the Philippines, Financial Executives Institute of the Philippines, Bishops-Businessmen’s Conference for Human Development, Foundation for Economic Freedom, and Action for Economic Reforms said that “building a national broadband network puts government in the business of business, and in one that it regulates.” The groups added that the move sends “wrong signals to those who have already invested in the telecommunications industry and to potential investors in the country.”
They reminded the government that while its role under Republic Act 7925 (the Telecoms Development Act of 1995) is to “develop and maintain an efficient, reliable, and universal telecommunication infrastructure using the best available and affordable technologies,” the same law also provides that public telecommunications services shall be provided by private enterprises. They questioned the government’s capacity to operate its own telecommunications network, citing the failed P10 billion “Telepono sa Barangay” project. Instead of expanding public calling stations nationwide, the number of stations actually dwindled and deteriorated over the years.
The six organizations believe that instead of spending such a large amount on a new broadband network—the US$330-million (P15-billion) contract value is enough to build 36,000 classrooms, 6,000 rural health centers, and 120,000 artesian wells—the more sensible option would be to maximize and expand the existing networks run by private telecommunications companies. Government agencies can lease bandwidth from them at market rates.
As planned, the national broadband network project involves the setting up of 300 base stations and 145 feeder stations to link up the country’s local government units and 25,844 barangays. The project also hopes to upgrade government telecommunications facilities.
Two private companies, Arescom and Amsterdam Holdings, had earlier submitted to the Department of Transportation and Communications cheaper build-operate-transfer proposals for an integrated broadband network at US$135 million and US$240 million, respectively. Nevertheless, on 21 April 2007, a Philippine government representative signed the supply contract with China’s ZTE Corporation.
| Signals |
 Headline inflation accelerated in May, reaching 2.4% from 2.3% the previous month, while core inflation remained steady at 2.6%. Inflation for food, beverages, and tobacco slowed down to 2.6% from 2.8% in April. On the other hand, inflation for nonfood items picked up for the second straight month to 2.1% from 1.9%.
 The national government’s fiscal deficit narrowed to P40 billion in January to April from P50 billion a year ago. While government spending expanded 8.1% to
P378.5 billion from P350 billion, revenue collections grew 12.8% to P338.5 billion from P300 billion. Meanwhile, the primary fiscal surplus shrunk 24.6% to P31.9 billion from P42.3 billion.
The country’s level of gross international reserves continued to rise in the past 18 months, reaching another record high of US$25.8 billion in end-May. It is equivalent to 4.8 months’ worth of imports of goods and payments of services and income.
The level of outstanding debt of the national government dropped 0.8% to P3.93 trillion in end-March from
P3.96 trillion a year ago. Domestic
debts dipped 0.6% to P2.18 trillion
from P2.19 trillion, while foreign debts likewise decreased 1.1% to P1.75 trillion from P1.77 trillion.
Net foreign direct investments grew 18.5% to US$710 million in the first quarter from US$599 million a year ago. Of this amount, net placements of equity capital jumped 106.7% to US$682 million from US$330 million. However, net reinvested earnings shrunk 52.9% to
US$8 million from US$17 million, and net other capital likewise contracted 92.1% to US$20 million from US$252 million.
Capital raised through the stock market rose 41.5% to P34.8 billion in January to May from P24.6 billion a year ago. Proceeds from initial public offerings, however, plunged to P2.9 billion from P9.1 billion a year ago.
Merchandise imports growth accelerated to 7.1% in January to March from 6.0% a year ago. The level of imports reached US$12.0 million as of March from US$11.2 million a year ago. |
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