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| By Jun Vallecera |
| Reporter |
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| RESPONDING to an International Monetary Fund warning, Bangko Sentral ng Pilipinas governor Amando Tetangco Jr. said he will make openness and continuing reform the main defense against any more economic shocks, domestic or external. He added the IMF warning on certain “pockets of vulnerabilities”, cited in its most recent World Economic Outlook report, in emerging markets like the Philippines may be valid on certain economies but that the bank’s strong commitment to reform could mitigate or even negate these vulnerabilities as reforms put in place the past few years have done. “On the BSP side, we have maintained a flexible exchange rate policy, allowing market forces to essentially determine the exchange rate with occasional scope for BSP presence in the market only to smoothen excessive volatility. We continue to build up foreign currency reserves and have prepaid our foreign debt to reduce our vulnerability to external or exogenous shocks.” He added, “We have also recently liberalized foreign exchange regulations particularly those aimed at facilitating current and capital account transactions. These will help ensure that capital can freely flow to its most efficient uses. The latest foreign exchange liberalization makes the regulatory environment more responsive to the needs of an expanding, more dynamic economy that has become increasingly integrated with global markets.” The strong influx of overseas remittances and foreign investments has allowed the central bank to double the allowable forex purchases without need for documentary support—to $10,000—and removed the antisplitting rule that banks have used since 1997 to circumvent previously strict dollar transaction guidelines. The BSP also doubled the allowable dollar remittance cap sent overseas without prior BSP approval to $12 million, even as countries like Tetangco said these and many more reforms in the financial sector will ensure a healthy financial system. “A sound financial system is a critical pillar of an efficient economy [because] it aids in financial intermediation, investor protection, and overall confidence building. A stronger financial system also enhances the ability of the BSP to use the various instruments at its disposal to influence monetary policy.” |
Friday, December 14, 2007
Tetangco says reforms best buffer vs. shocks
Debt prepayment won't hurt financing for infra, Neri insists
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| By Rommer M. Balaba |
| Reporter |
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| THE government’s decision to retire some of its debt would not affect expenditures on infrastructure and services inasmuch as the Bureau of Treasury’s latest move means the country is longer “finance-starved,” Socioeconomic Planning Secretary Romulo L. Neri said on Monday. “It means we now have many funding options available with a lot of dollars coming in,” Neri added. Treasury officials early this month reported the planned purchase of $126 million in Brady bonds ahead of maturity on May 1, which represents final payment on a 1992 debt restructuring program. The purchase would mean net savings of $12.6 million and the freeing up of collateral worth $82.3 million in the form of US treasury bonds. “We will have no problem on expenditures since what it [Treasury] intends to do is pure treasury play and has nothing to do with revenues. In fact I would encourage them, even the Bangko Sentral ng Pilipinas to do it,” Neri said. Neri commented the government could tap on the high savings rate of Filipinos to finance productive activities. Government data put the savings –to-GDP (gross domestic product) ratio last year at 30.3 percent, which roughly is the average for the East Asian region. “It is a matter of spending [funds] on productive capacities… It is just a matter of having the right investment climate,” Neri said, to stimulate these savings to be poured into investments. And creating a conducive investment climate means working out on soft and hard reforms, which means clearing out risks of regulatory capture and putting the needed infrastructure, respectively, he added. |
Hard-living youngsters drive Philippine outsourcing
By Karen Lema
Reuters
Last updated 05:13pm (Mla time) 03/02/2007
MANILA, Philippines -- The Philippines' outsourcing industry is generating billions of dollars in revenues but executives fear employees are turning to caffeine, cigarettes and booze to deal with unsociable hours and demanding customers.
"I worry when I go to the call centers that we are spawning a generation of chain smoking, coffee addicts or worse, chain smoking beer drinkers,” Rosalie Montenegro, senior vice president of the Call Centre Business Group under Philippine Long Distance Telephone Co. (PLDT) told Reuters on Friday.
"It is a reality, because the social support has not kept up with the growth of job creation."
Around 200,000 people are employed in the Philippines' outsourcing sector, many of them hired straight out of college.
Quick access to a monthly salary -- entry level wages have risen as much as 69 percent since 2003 -- and an open office plan full of twentysomethings creates a hectic social life.
But the strange working hours -- 9 pm till 6 am to cater for the US market -- is wearying and going for a post-shift drink to unwind means boozing at daybreak.
Aside from modern offices, Montenegro said investments must be made in what she calls "social infrastructure" to promote the well being of the industry's employees, who are often spotted nabbing a quick cigarette outside their offices.
"We need to invest in social wellness of our kids because the next generation should be the highest focus going forward," she said.
COUNTRY CLUB
Montenegro said PLDT, the country's biggest phone company and a medium-sized player in the outsourcing sector, was considering building a country club for its call center agents.
Montenegro said she hoped other outsourcing companies would support such a facility.
She said health and wellness providers, like spas, gyms and fitness centers should also be encouraged to extend their operating hours to cater to the needs of stressed workers.
The Philippines, with a large pool of English speakers and a strong cultural affinity with the United States, is developing as a viable alternative to India in the global outsourcing market.
It earned $3.6 billion from outsourcing in 2006, up 50 percent from the previous year. The government estimates revenue could jump to $12.1 billion by 2010 as the industry diversifies.
Big outsourcing players from the United States such as Sykes Enterprises Inc., Convergys Corp., PeopleSupport Inc., Accenture Ltd. and eTelecare Global Solutions Inc. already have branches in the Philippines.
Last year, the world's largest maker of personal computers, Dell Inc., opened its first call center in the country and recently opened a second contact center.
"The Philippines is working very hard to achieve it's '10-10-10' vision of $10 billion dollars, 10 percent market share by 2010 and this is not going to happen by dreaming about it but by having a solid strategy," Montenegro said.
http://business.inquirer.net/money/breakingnews/view_article.php?article_id=52550
Editorial: Making pain worthwhile
Editorial:
Making pain worthwhile
GIVE Socioeconomic Planning Secretary Romulo Neri “A” for candor. Even his worst critics would have to grant that the head of the National Economic and Development Authority (Neda) sounds completely sincere when he concedes that amid the steady barrage of reports on “economic gains,” much of the basis of the bullishness are the positive financial indicators—not necessarily the indicators that signal flesh-and-blood issues like jobs, poverty and gaps in education and health care.
“We are trying to see how we can break out of this development impasse. It is hard to get anything done because of this, how to create more jobs. Many of the indicators are still finance-based. . . . the money market [is bustling], interest rates are down, the stock market is on all-time high, the deficit is down, the debt to GDP is down. All the indicators are good, but these are all financial indicators, so we have to convert these . . . into real benefits,” said the Neda director general.
Coming from an agency that should be the fulcrum of policy setting and planning in government, this brings hope that government officials are not living in two separate universes—one group obsessed only with meeting financial and monetary goals; and the second, with delivering avowed services to people. At the very least, Neda is signaling that it would help find a way for allowing these two sets of targets to intersect and give flesh to the government’s ultimate—and, truth to be told, its only goal, really—vision of helping people attain a better quality of life. Absent this marriage of goals, and we’re stuck in the same development debacle that has plagued the Third World since the ’80s.
This year, which GMA alternately calls the “boom year” and the “social payback year,” is actually the best time for pushing the envelope as far as enforcing the State commitment to its citizens is concerned. That is why Secretary Neri’s open acknowledgment of his angst provides some hope.
Year 2007 is a good time for compelling government—and even those in the private sector that benefit from cushy policies—to make good on the implicit promise to translate more gain into less pain. The Filipino people have faithfully borne the burden of expanded value-added taxes, along with the pain of other tax reforms: so faithfully in fact that Malacañang boasted on Wednesday that Singapore is loudly contemplating copying some of these reforms. One’s tempted to raise one’s eyebrows and ask sarcastically, “Oh, really?”
And yet, on second thought, this is a believable notion, considering the success with which the government’s EVAT ran a steam roller over our wallets to squeeze out additional revenues that it now says have made it awash in cash. While this was happening, our eight million migrant brother Filipinos kept a steady stream of dollars flowing into the country, thus bolstering the external sector so much so that this government also triumphantly announced prepayment of a substantial portion of the debt.
Indeed, the faithful adherence to the tough fiscal and monetary standards set by outsiders has borne fruit for the country—yielding savings in debt payment budgets as a result of lower rates; keeping inflation steady at modest levels; and getting upgrades on credit rating and better outlook reports that, in turn, are supposed to trigger inflows of investments.
And yet, at the end of the day, as Mr. Neri so humbly acknowledges, all of this would only have complete meaning if they translate into more tangible benefits for the people. The very same people whom Mrs. Arroyo said deserve some payback.
But a word of caution: payback is not to be simply equated with a barrage of infrastructure by a government claiming it is making up for underspending in the past few years of obsessing with fiscal balance. Especially in an election year. Payback must not spell mindless spending on “services” that are, truly, just ill-conceived scams from which to skim money for political campaigns or for lining some people’s pockets.
Payback means well-calibrated, well-planned programs and projects that not only fill the gap in infrastructure and services, but move toward a coherent, wholistic development plan for the most underserved areas, while boosting those with the most potential for attracting private investment.
Payback means a government or bureaucrats looking at every possible means for helping people maximize their meager assets or expand opportunities for bettering their lives without requiring so much state subsidy or encouraging mendicancy.
For instance, we are told one reason why finance and central bank officials were frowning on the grant of special subsidies for exporters reeling from the effects of an appreciating peso was that the government, basically, wasn’t doing the same for that other sector boosting the peso, i.e., the OFWs.
A simple example of how the government can show it cares is what happened in last year’s war between Israel and the Hezbollah in Lebanon. As a service, the central bank bought back a few thousand Lebanese pounds held by OFWs, which would have been impossible to convert at the height of the war last summer.
If it were truly so minded, there is no limit really to what a sincere government can do to translate at every turn possible a macro gain into a micro booster; transform a people’s sacrifice into some form of delayed gratification; and show people how to connect the dots between genuine reform and a better quality of life. That is, if it were truly so minded. One hopes Mr. Neri’s concern reaches epidemic proportions.