Sunday, July 27, 2008

Macapagal's State of the Nation Address

As Gloria Macapagal-Arroyo prepares to give her State of the Nation (SONA) address today, we can examine how well she has delivered on some of her economic promises from last year and from earlier addresses.

One of the president's most noteworthy achievements is the reduction of the federal deficit from P200 billion in 2003 to P12 billion in 2006. This year the government has announced that it will balance the budget despite the worldwide inflation woes. The reduction of the deficit, though, has not come through drastic cuts in government expenditure. In fact, the national budget has gone up by about 80 percent over this period.

What has made this possible is the expanded valued added tax (E-VAT) on petroleum products.

Macapagal has delivered on building infrastructure. In fact, she is built more than any president since Marcos and without the same authoritarian powers to bypass the bureaucratic red tape of the current process.

The NAIA 3 terminal, for example, at Manila's international airport is already partially open and is expected to begin receiving international flights by around Aug. 8. The Subic-Clark segment of the Subic-Clark-Tarlac Expressway (SCTEx) opened on April 29, and has since collected daily tolls of about P550,000. Construction has started on both Clark North and Clark South and two Japanese contractors have agreed to build four SCTEx interchanges.

Refurbishment of airports in the Visayas and other parts of the Philippines is also well underway. A number of airports have just started receiving flights from major domestic airlines after years of absence.

The NorthRail project has been a subject of controversy but according to the administration the rail system is still scheduled for "substantial completion" by the original target date of Feb. 2010. We should bear in mind that the Northern Luzon rail line was not originally Gloria's baby. It was conceived many years before she came into office, but it has been this administration that has gotten the project off the ground.

Most of the anger directed at Macapagal in terms of her economic performance has been related to the current high price of fuel and food, both of which are due to external factors beyond the government's control. However, prices in the Philippines have still remained lower than those in other Asian countries, in no small part due to the funds provided by the E-VAT tax.

Wednesday, July 23, 2008

iPhone in Asia

iPhone will be available in 20 more countries on August 22. It's not known exactly which countries will be included but the short list of 50 countries under consideration include the Philippines, Macau, Singapore and India.

The iPhone is already shipping to Australia, Hong Kong, Japan and New Zealand in Asia-Pacific region. In some areas, people waited in line for two days to get the new gadget.

A mock iPhone is on display at the first day of the release in Hong Kong, Friday July 11, 2008. As Apple rolled out its newest iPhone in Asia Friday, dealers and buyers said it's only a matter of time _ maybe as little as a few days _ before the popular device hits the region's thriving underground marketplace. (AP Photo/Kin Cheung) (AP/KIN CHEUNG)

Models hold the new iPhones during the first day of the release in Hong Kong, Friday July 11, 2008. (AP Photo/Kin Cheung) (AP/KIN CHEUNG)

A customer shows Apple's new 3G iPhone mobile handset at the Softbank shop in Tokyo on July 11. Apple's international launch of its iPhone 3G has begun in several Asian countries. (AFP/Yoshikazu Tsuno)

Sunday, July 20, 2008

ASEAN and Japan

Japan has tended to be rather cool to Asian integration in the past. About two decades ago, there was considerable effort to initialize an Asian economic union but Japan's reticence was the major cause of the movement's downfall.

There have, though, been Japanese leaders who have recognized the value of the concept including former Prime Minister Takeo Fukuda back in 1977. Fukuda liked what he saw in the Association of Southeast Asian Nations or ASEAN and backed the idea of unity between Japan and the grouping of nations.

Just this year, Prime Minister Yasuo Fukuda, the son of Takeo, mentioned important goals for Japan that mirrored the "Fukuda Doctrine" of his father.

Japan now backs integration movements that would include ASEAN plus Three, including Japan, China and South Korea; the Asian Community -- which includes ASEAN plus Three leaders and their counterparts from Australia, India and New Zealand, and smaller interregional trade relationships. In all cases, ASEAN will serve as the central connecting point.

And we've seen for the first time, the Japan International Cooperation Agency enter into a formal agreement with ASEAN to cooperate on meeting specific goals including creating an ASEAN hub by 2015, and the formation of an East Asian free trade area by 2020 or earlier.

Thursday, July 17, 2008

Cambodia, Thailand to hold talks on temple dispute

Tensions continue to build on the Cambodia-Thailand border over the Preah Vihar Temple despite and agreement to hold talks on the issue.

Many Thais are angry that the culturally Cambodian temple located in disputed territory was recognized as a Cambodian World Heritage site.

Cambodian soldiers walk in the foggy morning as they patrol around Preah Vihear temple, Preah Vihear province, Cambodia, Thursday, July 17, 2008. Cambodia and Thailand escalated their troop buildup Thursday at disputed territory near the historic border temple despite moves to hold talks next week to defuse the flare-up in tensions, a Cambodian general said. (AP Photo/Heng Sinith)

Radio Australia

Cambodia-Thailand talks next week on temple standoff
AFP - 6 hours ago
PREAH VIHEAR, Cambodia (AFP) - Cambodian and Thai officials will meet next week to resolve a standoff over their disputed border close to an ancient temple, officials from both countries said Thursday.
Cambodia, Thailand deploy more troops The Associated Press
Political tensions driving temple row BBC News

Saturday, July 12, 2008

Asian Development Bank encourages regional integration

The Asian Development Bank (ADB) released a new study suggesting that the growing integration in Asia including the formation of the planned ASEAN and Asian free trade areas is healthy for the world economy.

The integration offers a new platform to promote growth, strengthen trade links, and reduce poverty, the ADB said in a new study, entitled "Emerging Asian Regionalism: A Partnership for Shared Prosperity."

The study also suggested that while Asian economic integration is market-led, to tap the full potential of regional interdependence, Asian economies need to boost their ties through closer dialogue and policy coordination.

Although environmentalists encourage local production whenever possible, the free and fair movement of commodities, products and people is essential in establishing a healthy balance between nations, and to help prevent shortages.

According to the new study, Asia is lacking in economic integration as compared to other regions.

The study highlights that Asia is less integrated in finance than in trade but financial markets are now larger, deeper, and more sophisticated than they were a decade ago. With the growth of trade and financial ties, Asia's macroeconomic interdependence has also increased.

Thursday, July 10, 2008

Commentary: Is Oil Industry behind Biofuel Scare?

The Guardian is claiming there is a "secret" World Bank report claiming that high food prices have been caused by the demand for biofuels.

If true, it would not be surprising considered that the banking industry is pretty much in bed with the oil industry.

Most sober studies show that there could not be any close connection between the price of food and the demand for biofuel. On the contrary, it is the rise in petroleum-based fuel, fertilizer and other costs that is one of the main culprits. Weather patterns are also largely to blame.

Just a little common sense would bring the realization, for example, that biofuels can have little connection with rice shortages since the edible portion of the rice plant is not used to make biofuel.

Commentary: Solution to world food crisis lies in revealing real truth
Xinhua - 3 hours ago
by Fei Liena, Ming Jinwei BEIJING, July 10 (Xinhua) -- The unrelenting rise in food prices has become a matter of grave concern for many countries.
Exclusive: we publish the biofuels report they didn't want you to read
World Bank report could undermine biofuel support Reuters

Wednesday, July 09, 2008

Philippines takes measures to buoy economy

After experiencing its fastest economic growth in many years during 2007, the Philippines is expected slower but still healthy growth this year due to the skyrocketing inflation.

Rising fuel and food prices in the Philippines are part of a global crisis due to the high cost of oil and the hoarding of rice and other grains.

For the first time in a decade, Manila will put off trying to balance the budget in favor of providing subsidies to alleviate the surging fuel and food costs.

Philippine foreign reserves are at a record $37 billion due to massive foreign investment and remittances and the privatization of a power plant. The government is looking toward new technologies to help with the food crisis. Hopefully though, it will not get lured into the dangers of biotechnology and genetically-modified foods.

One area it is known to be researching are ways to alleviate the environmental impacts of aquaculture.

Another recent project is the "Zero Garbage" initiative that encourages households to compost and plant their own gardens, and community gardens to supplement their food stocks, help clean the air locally and reduce the burden on the local government in disposing of mountains of garbage.

Commuters queue outside a train station in Manila in this June ...
Mon Jul 7, 8:51 PM ET

Commuters queue outside a train station in Manila in this June 16, 2008 file photo. Increasing numbers of Filipinos are leaving their cars at home and taking public transport to ease the burden of soaring fuel costs. As inflation soars in the Philippines and gasoline prices climb relentlessly, more and more commuters in the capital are squeezing into suburban trains and public buses, putting an enormous strain on the services. To match feature PHILIPPINES-INFLATION/TRANSPORT REUTERS/John Javellana/Files


Thursday, July 03, 2008

Geothermal Energy could sustain Indonesia and Philippines

Interesting news report on geothermal energy, particularly in the Philippines and Indonesia.

Analysts believe countries in the so-called Pacific "ring of fire" could derive enough energy to fully power their domestic economies. But there are high costs involved, and tapping into "volcano power" is potentially fraught with danger.

One of the responses by Mario Marasigan, head of the Energy Utilisation and Management bureau at the Philippines Department of Energy, though illustrates one of the problems in developing this resource.

The main issue that besets our renewable energy development, particularly geothermal, is the huge upfront cost that is required for any development of geothermal resources. The cost of drilling one hole during the exploratory stage of resource development will take a lot of investor requirement. You know for Filipino investors, to come up with the huge investment cost for geothermal energy development is a little difficult. So it would take a multinational corporation to develop these kind of resources.

Here again is a typical situation of a developing country waiting for external sources to develop its basic infrastructure. I have no doubt that the Philippines, both business and government sources, could pony up the money to finance these projects if the will was there.

More opinions on geothermal and other sources of renewable energy for Southeast Asia can be found Global Voices Online.