|
Philippine Business Magazine: Volume 8
No. 4 - News & Updates
Presidential State Visits
Time to Market
President Gloria Macapagal-Arroyo
began her series of State Visits this year to Malaysia, Brunei,
and Singapore, all within the month of August.
With Malaysia as her first stop, the President was
accompanied by members of her Cabinet and a business delegation
headed by Philippines-Malaysia Business Council Chairman Ricardo
Romulo. The group was in the Malaysian capital on 7-9 August, meeting
with Malaysia’s key government officials and businessmen.
 |
| President Arroyo witnesses agreements
for partnerships between the Philippines and Malaysia |
While in Kuala Lumpur, the President paid a courtesy
visit to Malaysian Prime Minister Mahathir and King Salahuddin Abdul
Aziz Shah at the Parliament House. The two governments took the
opportunity to discuss matters concerning Southern Philippines,
particularly Mindanao. A ceasefire agreement was signed among the
Philippine government, the Moro Islamic Liberation Front, and the
Moro National Liberation Front. Another major issue taken up was
the importance of the East ASEAN Growth Area and how it could help
strengthen trade and investments and boost tourism among members,
which include the Philippines and Malaysia.
From Malaysia, the President returned home via Davao
City, to demonstrate the region’s importance in her economic
agenda. In the less-than-two weeks she was back, she hosted the
visit of Indonesian President Megawati Sukarnoputri before again
leaving for her State Visit to Brunei on 22 August. From Brunei,
President Arroyo proceeded to Singapore on 24 August where she was
joined by a business delegation headed by Philippines-Singapore
Business Council (PSBC) Chairman Guillermo Luchangco.
The PSBC played a key role in the planning and implementation
of the business program for the State Visit. The Council organized
four meetings with the President or Cabinet secretaries including
a lunch for Bangko Sentral Governor Rafael Buenaventura, Finance
Secretary Jose Isidro Camacho, and Energy Secretary Vince Perez
on 24 August. The lunch was attended by the Singapore financial
community. Another briefing by President Arroyo’s economic
managers was given the following day, this time to the larger Singapore
business community in the manufacturing, telecommunication, and
other sectors.
| Signals |
|
The country’s balance of payments position deteriorated
to a deficit of US$797 million in the January-May period from
a surplus of US$397 million a year ago. The current account
surplus narrowed to US$1 billion from US$2.5 billion. Export
demand from the country’s major markets, US and Japan,
slowed down to US$13 billion from US$13.8 billion. Because
of the drop in imports of capital goods, imports declined
to US$12.2 billion from US$12.4 billion.
The capital and financial account deficit bloated to US$3.5
billion in the January-May period from US$602 million a year
ago. Net outflows of portfolio and other investments reflected
the servicing of maturing bonds and notes. Flows of direct
investments, however, posted a net inflow of US$523 million
from US$977 million.
Meralco sales to industrial users grew by 5.2% in the first
half of the year. Average capacity utilization of manufacturing
firms, however, slightly slowed down to 77.9% in the first
semester from 79.8% a year ago. Manufacturing’s volume
of production index likewise decelerated to 7.8% from 10%.
This was driven by weak manufacturing sales volume, whose
growth declined to 3% from 10.6% a year ago.
Sales volume of all types of appliances combined shrank by
8.9% in the January-July period to 3.5 million units from
3.8 million units a year ago. Individually, though, sales
of some appliance items registered growth during the period:
VCD players (216%), room airconditioners (94%), microwave
ovens (68%), gas ranges (14%), refrigerators (10%), stereo
components (8%), and washing machines (4%).
The Board of Investments surpassed its P50 billion investments
target for the whole year in the first seven months. Costs
of projects approved already reached P86.92 billion from P17.44
billion last year. More than half of these investments belong
to the infrastructure and industrial sector, 20% will go to
public utilities, and 12% to ICT-related projects. Domestic
investments expanded to P41 billion from P2.2 billion. Foreign
investments grew to P14.3 billion from P4.5 billion. Singapore
was the top investor with P9.4 billion.
 |
The global glut in electronics resulted in a decrease in
investments approved by the Philippine Economic Zone Authority
from P55.4 billion to P23.6 billion. Investments in information
technology related projects, however, doubled to P1.29 billion.
Foreign and local investors registered with PEZA placed their
expansion plans on hold as export earnings among economic
zones grew by only 5% to US$11.3 billion from US$10.7 billion
during the first seven months. The Laguna Technopark Inc.
emerged as the top dollar earner with a revenue of US$2.3
billion, 5% lower than last year’s US$2.4 billion.
|
Human Development Report
Technologies for Human Development
The United Nations Development Programme’s
(UNDP) Human Development Report 2001 carries the theme: “Making
New Technologies Work for Human Development.” It talks about
how people can create and use technology to improve their lives.
In the report, the Philippines was cited for being
able to gain political empowerment through technological breakthroughs
in communications, referring to e-mail campaigns and text messages
that helped topple former president Estrada.
The UNDP report also showed that the Philippines improved
its human development level, placing 70th out of 162 countries being
monitored for human development achievements. Although the rank
was a seven-notch climb from the 77th spot the year before, the
Philippines still remains in the category of countries with “medium”
human development. On top of this year’s list are Norway, Australia,
and Canada which slid to third after ranking first in the last three
years.
The report also assessed for the
first time, technology achievements of 72 countries, ranking them
into four groups: leaders, potential leaders, dynamic adopters,
and marginalized. The Philippines ranked 44th, categorized as a
dynamic adopter of technology.
Genetically-Modified Crops
Food Security
Recently, the use of genetically-modified (GMO) crops
to increase food production was the topic of national debates. But
for Dr. Emil Javier, head adviser of the Biotechnology Conference
of the Philippines, the risk associated with GMO crops is manageable
and in other cases negligible.
He stresses that the GM technology – the transfer
of genes from chromosomes of one organism to another — is a
quantum leap of technology whose application should be maximized
to meet food security in the country. By selecting traits of plant
strains that are best suited to the local environment, the country
can take advantage of biotechnology especially in the area of increasing
food production for sustainability. Dr. Javier’s views support
the premise set in the UNDP report that the use of GMOs is an important
cornerstone to ensure food security in developing countries.
Dr. Javier stresses the need for government to be
the lead advocate in using the GM technology. It should also give
more funding and support for food safety research.
|
Appointment of Malaysia Assurance Alliance International Assurance
Ltd by MAA General Assurance Philippines to serve as its technical
adviser in providing technical support to its Philippine office
