Bayani’s bolo brigade

Bayani’s bolo brigade

"The MMDA wants to pursue its plan to arm its traffic enforcers with bolos to protect themselves because Malacanang does not object to it, the agency said yesterday”—Manila Standard Today, Aug. 11, 2007

MAKATI City, August 30, 2007. Metropolitan Manila Development Authority Chairman Bayani Fernando launched yesterday the new MMDA traffic enforcement system in colorful ceremonies at the MMDA headquarters in Makati City.

Wearing a custom-made uniform with a shiny bolo on his waist, Fernando thanked President Arroyo for supporting his initiative and pledged to help the law and order campaign, including joining the war against the Abu Sayyaf.

Fernando waged a vigorous campaign to arm his traffic enforcers with jungle bolos, claiming that violent drivers, sidewalk vendors and squatters have hurt or threatened his employees. The police resisted the idea.

The chairman resisted suggestions that the MMDA use billy sticks and teargas. Spears and bow-and-arrow struck him as too medieval. For a while, according to sources, the agency considered using swords. But immediately thrown out was the proposal to use human excrement on unruly squatters and sidewalk vendors.

Fernando won the debate, ordered new uniforms for the enforcers, made them train in bolo fighting, read them the riot act and conducted a metro-wide PR campaign.

About 2,000 rayadillo-clad (the cloth used by the Katipunan revolutionists) traffic officers took part in the launch. They raised high their bolos when they rededicated themselves to their oath.

The MMDA originally wanted to import the kukri jungle bolo, the machete popular among the Gurkha warriors of Nepal who are serving the British army. Fernando was told Marikina-made steel is just as sharp.

About a hundred young good-looking enforcers were noticeably barefoot. They will be used for ceremonial functions and official state ceremonies, according to an MMDA source.

Fernando vowed the weapon was purely for self-protection and would be used only as a last resort. As part of their code of ethics, the enforcers will not take their bolo when visiting bars and cocktail lounges. The rules of engagement require that only rusty bolos may be used for demolitions that usually turn violent.

After the ceremonies, Fernando traveled with two groups that were deployed to Ayala Avenue and Roxas Boulevard. The enforcers demonstrated before assembled businessmen and diplomats their new system of enforcing traffic rules and the correct way to wear and use a bolo.

CNN Asia reported the unusual program, wondering what new perceptions of the Filipinos the world would get this time from Manila’s new experiment.

An unsung patriot

VERY few Filipinos have heard of Jose Kumilos but oral history among old-timers at the Home for The Aged in Pasay City remembers him as an unappreciated patriot who tried to do many great things for his country—and failed.

According to one story, when Emilio Aguinaldo wanted the United States to endorse the June 12 independence proclamation, he sent Kumilos to Washington, D.C., to lobby the White House and Congress. He failed because he traveled to Washington State instead of proceeding to the District of Columbia.

Some old-timers credit Kumilos for writing a set of advice for young Filipinos that uncannily recall popular counsel being circulated today. They recite the advice from memory that, according to those who could remember, was read them by their fathers and forefathers. The Kumilos Cartilla for Young Filipinos include:

Read the works of Rizal, Balagtas and other Tagalog writers for wisdom. Ignore the grammatical mistakes.

Pay your taxes even if the money goes to the Spanish government. This habit will help us because Tagalogs will rule the country one day.

If you have a servant, treat her well because that’s the human thing to do. She will also respect you and will not spit in your coffee or glass of water.

Patronize the national railways because it’s the only thing that unites us from Manila to Damortis, La Union.

Treat foreigners well—Spaniards, Chinese, Japanese, Americans—because someday they may run the economy.

Intramuros, Bagumbayan, the Pasig River, Manila Bay and the Botanical Garden will never be as clean and green as they appear today.

A plan is afoot to do a more extensive oral history on Jose Kumilos. His life is inspiring because it reflects the aspirations. failures and small victories of the Filipino.

‘Crispy pata’ for frequent fliers

WE rather like the Philippine Air Lines ad that invites us to
“fly all you can!” by offering two domestic tickets with every purchase of an economy class domestic ticket. It borrows from the buy-one, take-one concept but not, of course, from the eat-all-you-can promotion. We cannot fly all we want, even if we wish to.

Equally interesting is the BPI Express Credit ad that offers a free crispy pata— courtesy of Gerry’s Grill—with your “free BPI express credit card!”

Next time you get a hankering for “irresistibly free” crispy pata, call a designated number or visit any branch and you get a free card at the same time. Could the bank throw in a bottle of beer? Could PAL link up with BPI’?

Starting a business in the Philippines

Starting a business in the Philippines

It is not easy to start a business in the Philippines.

It takes 11 steps, 48 days and is costly—about 18.7% of income per person, and costs 1.8% of your minimum capital, per capita, according to World Bank data using figures supplied by the Philippines’ leading corporate law firms.

The bank studied how to start a business in the Philippines—all the procedures, how to obtain licenses and permits, completing the required notifications, verifications, or inscriptions for the company and employees with relevant authorities.

The bank also measured the time and cost of complying with each procedure under normal circumstances and the required minimum paid-in.

Cost is recorded as a percentage of the country’s income per capita. So 18.7% translates into $243, assuming per-capita income is $1,300.

Canada, which ranks No. 1 in ease of starting a business, requires just two steps, three days and 0.9% of per-capita income. There is no minimum capital.

The World Bank suggests that the easiest way to ease up on starting a business is to change the corporation code. “Eliminate the minimum capital requirement, make business registration administrative rather than judicial and allow registration notices to be published online or at the registry,” advises the bank. Get rid of the judges.

Business start-up takes 20 days more on average where judges have to approve the applications.

Serbia and Uganda avoided these delays by creating a new administrative registry. Bulgaria did the same in April 2006, despite fierce opposition from the judiciary. Honduras and Italy transferred registration from judges to private chambers of commerce.

In Serbia, the government decided that radical reform was better than wrestling with the existing system. The reform took nearly two years to complete, starting in January 2003 with a seminar on business registration in countries of the European Union.

In May 2004 parliament passed a law to create the new registry. Registration was simplified, and agencies linked through a central electronic database. The registry no longer has the authority to check the authenticity of data or to refuse registration if the application is complete. A “silence is consent” rule ensures automatic registration within five days.

As soon as the law came into force, the focus shifted to training and publicity. The registry’s director, named in July 2004, became the spokesperson in the publicity campaign. By January 2005, when the registry opened, everyone knew about it. New registrations increased by 43% in the first year.

Slovakia took a different approach, reforming in steps. In October 2003—in time for its entry into the European Union the following year—Slovakia passed the Act on the Commercial Register, transferring registration from judges to court clerks. Standard documents and clear filing procedures replaced substantive review by judges.

And Slovakia did not stop there. In July 2004 it cut the statutory time limit for issuing a trade license from 15 days to seven.

Three years after the commercial register act was adopted, opening a business takes 25 days rather than 103.

Reformers who want to start simple could consider administrative reforms first: Cut unnecessary procedures, create a one-stop shop for business registration, introduce standard application forms and a single business identification number and move any tax payments to after the business has started operations.

Creating one-stop shops for company registration was the most popular reform in 2005/06. But one-stop shops are not enough. Many other procedures may be required before a business can legally operate—such as obtaining documents and having them notarized, depositing initial capital or registering for social security.

One-stop shops work best when other start-up procedures are cut or simplified. For instance, El Salvador cut the time to start a business—with no changes to the law.

In 18 months start-up time dropped to 40 days and the share of satisfied customers rose to 87%.

But reformers went even further, transferring staff from the Ministries of Finance and Labor and the social security institute to the company registry. Entrepreneurs now register with all 4 agencies in a single visit and can open their business in 26 days—down from 115 before the reform.

Whatever reforms are made, reformers should advertise the changes and monitor their effect on new registrations. Most reformers are bad marketers.

So, few entrepreneurs know how much easier registration has become. El Salvador first established a one-stop shop in 1999, but local entrepreneurs thought it was only for foreigners. A lesson was learned. The second time around reformers staged two “ribbon-cutting” events with President Antonio Saca and Vice-President Ana Escobar. The media coverage ensured that everyone knew about the new system when it opened in January 2006.

Finally, reformers best stick to one principle—simplify. Cumbersome entry procedures mean more hassle for entrepreneurs and more corruption, particularly in developing countries.

Each procedure is a point of contact—an opportunity to extract a bribe. The cost of such systems is the forgone jobs that new firms would have created.

A legislative agenda to increase competitiveness and attract investors

A legislative agenda to increase competitiveness and attract investors

THE global economy is a complex mix of government and business relationships that can be influenced positively only with a good standing and effective messages delivered with suitable communication skills. To succeed in this globalized world, each country has to devise its own plans for success, identifying markets for its particular set of products, services, and business opportunities. A country with beautiful natural surroundings, great tourist destinations, and wonderful exports is likely to enjoy a positive image, an identity that will serve to multiply its exports, tourism, and lure investors. Among the other factors that spell economic success, it is important that nations should have marketing strategies and a legislative agenda that can survive leadership changes.

With the aim of boosting the country’s competitiveness and attracting more investors, 17 local and foreign business groups have called on the 14th Congress to act on a list of proposed new laws which would greatly elevate the level of economic growth of the Philippines. These business organizations are active in the National Competitive Council, a collaboration between the government and the private sector whose main function is draw up and redefine an action agenda to attract investors to the country. Local business chambers and industry associations called on lawmakers to establish an ad hoc committee on competitiveness composed of key committee chairmen that would advise the Senate and the House of Representatives on a legislative agenda.

Included in the legislative wish list agenda is a call for changes in the Build-Operate-Transfer Law, the Local Government Code, the Customs Brokers Act, and the Magna Carta for Small and Medium Enterprises. The business groups also requested new laws ensuring freedom of access to information, reforming land administration, institutionalizing the use and promotion of renewable energy, simplifying taxation on net income and rationalizing taxes on the financial sector and providing fiscal incentives as well as restrictions on foreign investments.

These present great opportunities for the country to build on recent gains, establish a good reputation in the world, enable it to export its products, and attract investments to develop its economy. The ability to thrive in the economy in an investment road ridden with potholes will rest heavily on a country’s capacity to use and create laws favorable to the business community and beneficial to the economy.

The nation in Arroyo’s eyes

The nation in Arroyo’s eyes

A State of the Nation Address (Sona) is interesting not only for what it says but also for what it does not say. The nation hears not only the speech but also its silences. Every Sona reveals a president’s way of seeing, and there is no way of excusing its blind spots by referring to the speaker’s limited time.

In a speech lasting 56 minutes, Gloria Macapagal-Arroyo took her listeners on an archipelagic tour of the Philippines. She hopped from island to island, identifying regional growth centers by their main political players and sponsors, and cheerfully acknowledging their presence in the audience. You realize that what is being described is not merely a location map of the new infrastructure, but the whole terrain of political patronage -- the path of the gravy train.

Unseen and unmentioned is the state of the people living in these regions. Do they have jobs? Do they have enough food on their tables? Are there enough schools and teachers for their children? Are they adequately sheltered? Do they have water, electricity and basic medical care? Are they safe in their homes? How did they vote in the last election, and what messages might they be sending out by the way they voted?

What set the 2007 Sona apart from the past Sonas of this administration was the bravura and callousness that attended its entire delivery. Ms Arroyo sounded as if she was the winner of the recent election. She spoke as if the problems that have troubled our society over the past years -- the political killings, the mass hunger and unemployment, the threat of renewed conflict in Mindanao, the government’s continuing dependence on massive foreign and domestic borrowings, etc. -- are nothing but figments of her enemies’ imagination.

For the first time, Ms Arroyo gave the nation an idea of what she thought defined the limits of her powers: none. “From where I sit, I can tell you, a President is always as strong as she wants to be.” I think only a dictator can say that with a straight face. Do we still wonder why our institutions are weak?

I used to think that former Chief Justice Artemio Panganiban’s rebuke of Ms Arroyo’s Presidential Proclamation 1017 was sharp. Justice Panganiban had written: “Some of those who drafted PP1017 may be testing the outer limits of presidential prerogatives and the perseverance of this Court in safeguarding the people’s constitutionally enshrined liberty. They are playing with fire, and unless prudently restrained, they may one day wittingly or unwittingly burn down the country.” I now think it was too subtle, and that it had fallen on deaf ears. This president is not in the business of testing “the outer limits of presidential prerogatives.” She recognizes no such limits.

The wonder of it all is that Ms Arroyo could, in the same breath, talk about her vision of a modern Philippines in the coming years. “We will have achieved the hallmarks of a modern society, where institutions are strong. By 2010, the Philippines should be well on its way to achieving that vision.” This is empty rhetoric. She said nothing that would substantiate that vision. Modernity is not just about physical infrastructure. It is about institutions, a way of running the complex affairs of a nation.

But all these blind spots and omissions should not surprise us anymore. The key to Ms Arroyo’s rise to power and political survival has been precisely her ruthless disregard for institutions. She justifies it as a normal survival reaction to the demands of a “degenerated” political system. (That clumsy word comes from one of her previous Sonas).

She knows that what has worked for her is not the rule of law but the system of patronage that permits her to buy the support of politicians and generals. What she may not know is the brittleness of any form of authority that rests chiefly on remunerative and coercive power. It breaks as soon as the resources run out. Worse still, this style of leadership tends to invite reprisals, while offering no protection against them, once the ruler is out of power.

“It is my ardent wish that most of the vision I have outlined will be fully achieved when I step down,” she said toward the end of her speech. Almost every one noticed that she did not say when that was going to be. Under the Constitution, her term ends in 2010. But, once we consider how she managed to get this far, it becomes easier to understand why a lot of people don’t believe her and why they think a push for constitutional change is likely to be attempted again.

She doesn’t even need to demand Charter change on her behalf. Someone is bound to say it for her, to shout to the world how we cannot live without Gloria Macapagal-Arroyo. Mass demonstrations and posters will suddenly appear on our streets to bring this message of great urgency to the public. This theme will be picked up by a chorus of columnists and commentators who, even as they sing hosannas to Ms Arroyo, will note the absence of worthy leaders among those currently waiting in the wings.

Nothing, perhaps, can be more wretched than the future of a bratty autocrat about to lose power. “They say the campaign for the next election started on May 15, the day after the last. Fine. I stand in the way of no one’s ambition. I only ask that no one stand in the way of the people’s well-being and the nation’s progress.” But who is she to expect anyone to subscribe to her pre-modern notion of “the people’s well-being and the nation’s progress”? Isn’t this what is supposed to be debated in a democracy?

Short

Short

When President Gloria Macapagal-Arroyo unveiled her administration’s P1.7-trillion Public Investment Program for the last three years of her presidency, the question on everyone’s lips was an unbelieving, “Where will she get all that money?” Ms Arroyo hastened to supply the answer by citing three major funding sources: P1 trillion from revenue collections, P300 billion from the earnings of government corporations, and P400 billion from private investments, local government units and foreign assistance. Those figures hardly reassured those who suspected that she did not have her feet planted firmly on the ground. But while such carping and cynicism were expected from her usual critics, whether in the opposition or the media, what caught administration officials by surprise was the public airing of similar doubts by the London-based Fitch Ratings.

The day after the President delivered her State of the Nation Address, Fitch declared that the government would not be able to carry out its “ambitious” infrastructure development program unless there was a “significant improvement in tax collection.” The government’s revenue collection effort during the first six months has been disappointing, the international credit rating agency said, noting that while real economic growth was believed to have averaged 6.5 percent in the first half of 2007, “the 3.4 percent growth in tax receipts was rather poor.” Because of the revenue shortfall, Fitch said, the government would not be able to achieve its goal of holding the budget deficit down to P63 billion, and the full-year deficit would balloon to P125 billion.

Finance Secretary Margarito Teves promptly disputed Fitch’s basis for its gloomy prediction, saying it didn’t count the expected proceeds from the sale of some government assets. He said that with the privatization of some big-ticket items and improved collections, the government would still be able to keep the deficit at P63 billion for the whole year.

The fact remains, however, that both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) have failed to achieve their collection targets so far this year. The BIR, which was given a collection target of P373.3 billion for the first half of the year, managed to collect only P334.7 billion. The BOC collected P92.2 billion against its target of P105.3 billion. Thus, the two principal tax collecting arms of the government fell short of their targets by a total of P51.7 billion. And this is the reason the actual deficit widened to P41 billion compared to the target of P31 billion.

Despite the confident pose they put on, Teves and other officials are obviously very much worried by the shortfalls in revenue collection. And they should be, for the administration’s infrastructure program, which the President intends to be the country’s springboard to First World status, hinges on the government’s ability to raise funds.

Right now those ambitious projects look like pure fantasies, given the poor performance of the government revenue-collecting agencies. With this year’s revenue shortfall, the targets given to the BIR and BOC under the proposed 2008 budget don’t seem realistic at all: P845 billion for the BIR, up 14 percent from its P740 target for 2007; and P254.5 billion for the BOC, up 10 percent from this year’s P231 billion.

Finance officials have been scrambling to find ways of pushing up collections, starting with the sacking of Internal Revenue Commissioner Jose Mario Buñag for the BIR’s failure to deliver the targeted revenue. More recently, the revenue district offices were ordered to conduct a tax-compliance audit, aimed at flushing out tax cheats. There was also the successful bidding for the coal-fired power plant in Masinloc, Zambales, which fetched $930 million. With some luck, the government might yet be able to prove Fitch wrong as far as the deficit is concerned.

But the administration cannot bank on the sale of government assets to bridge the gap between revenues and expenditures, much less to finance its infrastructure-building program; there are only so many of those assets, and soon everything will be gone. The key is efficiency in tax collection, which seems to be the direction the government is taking.

Filipinos should hope the effort to collect the right amount of taxes will succeed this time. Otherwise, the administration might ask Congress to pass new tax measures, which would again penalize honest taxpayers and continue to reward tax evaders.

What's Davao City's share of GMA's legacy?

What's Davao City's share of GMA's legacy?

JUST BY being an engineer does not a good city engineer makes. Like with the big named hospitals in the country which are managed or administered by non-doctors the city engineer's office needs a macro-manager, one who sees beyond the math and physics of infra projects which are the concerns of the engineers.

A city engineer is one who should assist the chief executive in determining what and where the infrastructure projects are needed most and how will these benefit the constituency. He is a manager not the doer. In short, he does not need to be an engineer. Of course, the ideal thing is to have an engineer heads the city engineer's office for as long as that engineer knows the rudiments of management.

The CEO is not akin to a private construction firm. The CEO is part of a unique political setup that involves the nuances of politics, planners and public interests.

I am putting my two cents worth of idea on this subject because since the exit of Jun Evasco (who is now mayor of Maribojoc, Bohol) as head of the CEO, no one has yet been appointed to his post. An ideal candidate to the post would have been Mario Luis Jacinto who heads the City Planning and Development Office. Jacinto is an engineer too. But Louie, I heard, has begged off for health reasons.

Celso Gempesaw appears to be a man Mayor Duterte has great trust on. Problem is the mayor does not want to remove him from TMC (Traffic Management Center) because he is doing a great job managing traffic. I personally think that TMC is too small a task for Gempesaw it can now be passed on to a subaltern. If he is that good, Celso deserves bigger responsibilities like the CEO.

The City Engineer of Davao must look beyond what traditionally are the tasks of the CEO. I think that the past heads of this department have not done justice to the post.

Look at our road network. We are stuck with 2-lane and 4-lane roads. I do not know whether the engineers have done their homework in presenting plans to turn over some city roads to the national government. We have to conserve our resources and urge the national government to allocate funds for the construction, upgrading and maintenance of roads. This can only be done if we turnover these infrastructures to the national government. Over-passes built from the pork barrel of our congressmen are not the kind of structures we should prioritize. About 90% of these are useless and had served only as temporary abodes of rugby boys, stalls of ambulant vendors and worse, as latrines of vagabonds and addicts.

We need to widen our roads to six or eight lanes. Our city fathers must open their eyes to windows of opportunities. I mean, I think that Mayor Duterte is among the closest allies that President GMA held with high regard. Our city politicians, planners and engineers must come up with a wish list for Mayor Duterte to present to Malacanang. I think that the city officialdom have not asked for any special favors from the President. I would suggest, for example, that the national road south and north of Davao city poblacion be expanded to ease congestion. Or, consider building a parallel road to the existing highway. The city is growing and bursting at the seams. It is about time the national government allocate substantial budget for new infrastructures otherwise we will be suffocated at the rate progress is going on.

We have to ask GMA a share of her legacy. But even as the President may have a special fondness for our city and its leadership we have to show her workable plans and prove to her the significance of these plans before she will order the release of a single cent from the national coffers. This should be the main task as a starter for whoever will sit in the CEO chair.

Where the money is

Where the money is

SAN Miguel Corp. paid Goldman Sachs millions to identify growth opportunities, initially on power.

That is how serious SMC is in its diversification effort. The money paid Goldman is well spent. The investment bank is probably the world’s best strategic planner today.

A consortium led by tycoons Ramon S. Ang, Henry Sy Jr. of SM and Joselito “Butch” Campos of Del Mon­te gained the upper hand in the auction of the state power transmission TransCo. following the failure of bidding in four tries.

In the last attempt, only three bidders were left for the right to operate TransCo for 25 years—Ramon Ang’s San Miguel group with Tenaga, operator of Malaysia’s National Grid, as its technical partner; the group of Enrique Razon of International Container Terminal Services, Inc. (ICTSI) with the Satte Grid Corp. of China as technical partner, and the group of Ricky Delgado who has an Italian partner.

TransCo could cost from $2.6 billion to $4.5 billion but the cash required of the winning bidder could be just 10 percent of that.

TransCo is a hugely profitable enterprise, being a monopoly.

In 2006 it had an operating income of P16.2 billion ($345 million), a return on gross utility revenue of P24.29 billion. In 2004 its return on sales was also a hefty 62.2 percent.

Properly managed, Trans­Co could yield its operator between $500 million and $800 million in annual free cash or EBITDA.

Not everybody with mo­ney can buy TransCo. A bidder must be 60 percent Filipino. It must have $300 million of net worth. It must have a foreign technical partner whose transmission experience includes 50,000 miles of power lines.

There are three major reasons why San Miguel is keen to diversify: one, thinning margins on beer; two, shrinking beer demand; and three, the market shift to brandy, as Filipino taste moved upscale.

Thus, SMC will go into power, mining, infrastructure, utilities, and property development. These businesses are extremely more profitable than brewing and selling beer.

In 2006, SMC posted return on sales of four percent—P10.17 billion net income on record revenues of P249.65 billion. The P249 billion made San Miguel the country’s largest company in sales but the P10.17 billion made it one of the well, modestly profitable. So it is not a question of just generating revenues. It is more a game of generating profits.

Based on average equity of P145 billion, SMC’s P10.17 billion represents a return on equity of seven percent—below the bank-lending rate of about 10 percent.

TransCo claims a return on equity of 10.89 percent in 2005 and 12.42 in 2004 but analysts believe ROE could be as high as 20 percent, given the right focus and the right management.

Luzon’s biggest power producer, Mirant, makes easily P10 billion from its two power plants, Sual and Pagbilao. Those plants were bought this year by Tokyo Electric and Marubeni. Their Team Energy paid $4 billion for the plants and will spend another $350 million to expand capacity. It takes three years to put a power plant on stream.

In her SONA July 23, President Arroyo admitted to a power shortage in Luzon and Mindanao over the next two years, by 150 megawatts and 210 megawatts, respectively. Visayas is even now suffering from occasional brownouts. Overall, the country needs probably as much as 3,400 megawatts of additional power capacity. It costs $1 million to install a megawatt.

In 2006 the Lopezes’ First Gen Corp. made 14 percent return on sales from power generation; their Meralco electricity retailer made 6.58 percent but its profits are understated. Meralco’s share price rose seven-fold in the last year, to P116 a share, reflecting higher demand for power and electricity shortages, with the booming economy. Meralco buys electricity from another Lopez company, First Gen, at a price twice that it pays Napocor.

The power business is extremely good. The economy has been growing by about five percent in the last six years releasing pent-up demand for energy that present supply cannot meet.

In water, the value of the Ayala family’s investment in Manila Water rose from P2 billion in 2001 to P22 billion in 2006, ten times in just five years. It’s not brilliance but high pricing. Manila Water got a 50 percent rate hike per year for five years. Any business that gets a 50 percent yearly price increase cannot lose money.

Property is another mega­bucks producer. In 2006 Henry Sy’s SM Development Corp. generated a whopping 69 percent return on sales—P984-billion profits out of revenues of P1.43 billion.

In mining in 2006, Philex Mining chalked up a 30.6 percent return on sales. Coal producer Semirara Mining reported 12.1 percent. There is a worldwide shortage of minerals and China, the world’s fastest-growing economy, wants to buy everything it can lay its hands on.

Long wait for Manila airport

Long wait for Manila airport

It’s not just collapsing ceilings that are bedeviling Terminal 3 of the Ninoy Aquino International Airport. President Arroyo, after enumerating in her State of the Nation Address the other day a long list of airstrips being built and airports being expanded or renovated nationwide, said the NAIA-3 could collapse in a powerful earthquake. She invoked public safety as the top consideration in opening the terminal, but fell short of saying outright that the yearend deadline she gave for the opening of the facility would no longer be met.

Collapsing ceilings can be blamed on deterioration from non-use. On the other hand, a facility that cannot withstand the earthquakes that periodically strike this archipelago, which lies along the quake-prone Ring of Fire, suffers from structural defects — something that can be blamed on the builder. The original Philippine white elephant, the Bataan Nuclear Power Plant, was abandoned after experts warned that it was built near an earthquake fault. The Philippine government at least ran after Westinghouse, which built the plant. But Philippine officials accused of receiving multimillion-dollar kickbacks for the project, led by dictator Ferdinand Marcos, went unpunished.

If the NAIA-3 suffers from structural defects that could endanger public safety, the government should also go after those responsible for the project. Earlier reports said it could take up to P2 billion to make the NAIA-3 operational. The scandal over the project has already damaged the image of the Philippines, especially in Europe, as an investment destination. The country is also suffering from the failure to open a badly needed new airport terminal while other Asian countries are racing to build larger and more modern airports.

The Philippines has neither the means nor the political will to build a bigger premier airport outside Metro Manila. But it can show the world that it is doing something to penalize those behind the construction of yet another white elephant. If we can’t have a new airport terminal, we should at least see certain individuals behind bars. But who should be indicted? This project was cancelled because it was supposed to be onerous. The contractor is challenging this and has taken the Philippine government to an international arbitration court. The mess is unlikely to be untangled any time soon. Juan de la Cruz has a long wait ahead for a new airport terminal.

Invest, Invest, Invest

Invest, Invest, Invest

In turning around the economy and sustaining our trajectory of growth towards first world status in 20 years, we also need to do three critical things: invest, invest, invest!

This was the gist of the President’s State of the Nation Address (SoNA) yesterday, as she highlighted the need to invest in physical, intellectual, legal and security infrastructure; to invest in social safety nets through cheaper medicine, affordable housing, and better schools; and to invest in peace in Mindanao, crushing terrorism and putting a stop to human rights abuses.

The next three years, according to the President, will set record levels of well thought-out and generous investments in those areas.

To highlight this Administration’s priorities as reflected in the Superregions announced in the 2006 SoNA, this year’s SoNA started with far-off Mindanao, moving to Central Philippines, the North Luzon Agribusiness Quadrangle (NLAQ) and the Luzon Urban Beltway (LUB).

Of course, the Cyber-Corridor cuts across the entire archipelago, and showcases private investments in a capital-intensive but revenue-rich sector.

Among the highlights of this year’s SoNA are the 3,000 kilometers of Farm-toMarket Roads, for which R3 billion has been allocated. About 300 kilometers of those roads have already been built in Mindanao; 200 of 600 kilometers of farm-tomarket roads for NLAQ are also completed.

The restoration of irrigation for over a million hectares has also increased productivity in agriculture.

The RORO ports, major roads and highways, and bridges that constitute the backbone of the Strong Republic Nautical Highway, have reduced cost of agricultural cargo from the farms to the markets, where cost of freight and cost of transport was cut by half, or more than half.

The President’s report card is replete with facts and figures, targets and timelines. July 10, we inaugurated a R1.7 billion bridge in Butuan City; July 11, we formally opened the Ozamis City Airport.

Earlier this year, the new Iloilo Airport was inaugurated. The Bacolod-Silay Airport, on the other hand, just needs an access road, and should be completed by November, this year.

In NLAQ, construction of the Halsema Highway is well underway. Airports for movement of agricultural produce are also being planned.

Additional investments in education — R29 billion — were also announced, as part of the investments in the safety nets. In fact, the launching of a student loan fund should be good news for both parents and students, and school administrators.

The President reserved in her SoNA a special place of honor for the Filipino achievers, those who excelled in international academic competition, the outstanding farmers, multiawarded scientists in research and development, etc.

A source of personal pride, among those cited by the President, because he is a fellow-Cebuano, is Congressman Dodong Gullas, for his work in regionalizing the old DepEd payroll starting in 2004, together with Tessie Aquino Oreta. He is one Cebuano who does us proud.

Prouder still, is the fact that one of those cited by the President is Diona Aquino of the Presidential Management Staff who vested a whole field of international students in an academic competition of governance in China.

Research and development, better education, access to affordable health services and cheap medicines, major infrastructure, peace and security, and sound fiscal policy, are the fundamentals the President promised to put in place during her tenure, so that all that will remain for her successor is "to gather the harvest."

These fundamentals will only be as strong and sound as the President who will establish them. And this President has shown all that in the past six years.

In fact, in an almost one-hour speech constantly interrupted by applause from a gallery filled almost to the rafers, the longest applause leading to a standing ovation chained with a closing statement that this President can be as strong as she wants to be.

Big SME dreams

Big SME dreams

Cerge M. Remonde

MIDDLE of last week, I was back in Cebu to lead and witness the opening of the country’s first Small and Medium Enterprise (SME) Industrial Park, under the auspices of Planters Development Bank, which is considered the country’s first privately-owned development bank for SMEs.

As Cabinet Oversight Official for Micro, Small and Medium Enterprise, it is now part of my job description to keep an eye and have a hand in MSME developments, nationwide.

After hopping from a bridge inaugural in Butuan to the Mindanao Security Summit in Cagayan de Oro City, I had to disengage from the Presidential party and skip Ozamiz City to attend the Cebu SME launching. We took the boat to Cebu, heading straight into a storm that battered the Super Ferry, Our Lady of the Rule. The all-night pitch and roll notwithstanding, the trip was tolerable, and we survived. And the short drive from the port to the industrial site dissipated whatever seawater was left in our system.

Located 23 kms. south of Cebu City at Barangay Cantao-an in the town of Naga, the PlantersBank SME Industrial Park is actually part of a 250-hectare industrial, residential and commercial development, aptly called New Cebu Township One, or NCTO.

"The SME Industrial Park represents another pioneering initiative by PlantersBank to provide Filipino SMEs with opportunities and avenues for business growth," PlantersBank chairman and CEO Ambassador Jesus P. Tambunting said at the launching. "The project will enable them to consolidate operations, widen exporting potentials, and most importantly, benefit from the fiscal incentives extended to locators in an export processing zone area," he added.

Also at the launching were Philippine Economic Zone Authority Director General Lilia de Lima, a dear friend from way back, the light and beacon of EZ investments whose vision of export growth has been shared by at least three (3) Presidents.

Governor Gwen Garcia, who has come back from a narrow electoral margin in 2004 to the biggest landslide ever in 2007, was also there, together with Naga Mayor Valdemar Chiong and, of course, our amiable host, Ambassador Tambunting.

The PlantersBank SME Industrial Park is located in a prime location, complete with facilities and amenities to help SMEs grow. There is ample water supply, and a power plant is virtually embedded in the facility, Naga being host to a major power plant.

Projects like this are welcome and accorded full support by government, as they enhance and bolster the SME sector’s absorptive capacity which, if not attended to, could impair our ability to download funds and expand the SME client base.

By the end of this year, the government’s SME program is expected to release P32.3 Billion in SME loans. From this, we hope to generate and support 2.2 million jobs.

From 2004 to February, 2007, a total of P96 Billion had been released by government lending institutions to 47,198 SME accounts.

The Filipino SMEs, according to Amb. Tambunting, are vital components of economic growth and sustainability, and the industrial park will be one way for ensuring their efficient transactions to meet growing demand in both local and foreign markets. The park, he added, is a one-of-a-kind facility for SMEs.

Locators will have a chance to own, not just lease, their plant premises, allowing for long-term planning. More importantly, the facilities are already in place, as seen from the site where the launching was held.

In fact, a most unique aspect of this project is that even before it was launched, as many as seven or eight locators had already signed up. The NCTO, actually, already has major locators in other developed sites.

PlantersBank prides itself in its understanding and support for the big dreams of Small and Medium Enterprises.

Naga has big dreams. And has apparently found the bankers for those dreams.

Government to tap anew retail bond market

Government to tap anew retail bond market

Maria Eloisa I. Calderon

The government is selling treasury bonds to retail investors the week after next, heeding calls from the market for new debt papers to replace maturing ones.

In a memorandum to banks, acting National Treasurer Roberto B Tan said the Bureau of the Treasury will auction off on July 23 at least P8 billion worth of retail treasury bonds (RTB) with three- and five-year maturities.

The bureau scrapped its planned five-year Treasury bond auction to give way to the RTB offering.

"To provide an investment opportunity for RTB investors, the Republic of the Philippines through the Bureau of the Treasury will auction on July 23, 2007, 3-and 5-year RTBs [with issue date of August 1, 2007] in a minimum aggregate nominal principal amount of P8B," read the memo dated July 12.

"The Bureau is making this announcement ahead of the scheduled auction date to allow the prospective selling agents to start marketing the said bond issue," it added.

Retail T-bonds are sold for as low as P5,000 each.

Bond dealers said appetite for the retail bonds has shored up as the highly liquid market scours for other investment options.

About P38 billion worth of RTBs matured in June, and another P35 billion worth of these papers are maturing this month, a bond dealer said.

"The market has been anticipating an RTB issue since last month. We’ve been asking if the government will replace the maturing RTBs," a bond dealer said.