By Des Ferriols
The Philippine Star 05/12/2007
Foreign direct investments continued to surge in February, increasing by 33.5 percent as The Coca-Cola Company bought 65 percent of Coca-Cola Bottlers Philippines Inc. (CCBPI) from San Miguel Corp. (SMC).
The Bangko Sentral ng Pilipinas (BSP) reported yesterday that the transaction brought the net foreign direct investments (FDIs) in February to a net inflow of $551 million.
The February inflow, in turn, brought the two-month FDI level to $633 million, significantly higher by 33.5 percent than the $474 million in the same period last year.
According to the BSP, total net FDI inflows during the first two months of the year reflected the surge in net equity capital inflows which rose more than two-fold to $578 million.
"This was traced mainly to the acquisition in February by a foreign conglomerate of holdings of a local bottling company," the BSP said, referring to the Coca-Cola transaction.
CCBPI holds the Coca-Cola bottling agreement for the
Aside from the Coca-Cola transaction, the BSP said other foreign direct investments were channeled to the following industries: manufacturing (chemical products, electronics); mining (mineral processing); services (international courier, information technology development); real estate, financial intermediation, agriculture, and construction.
The BSP reported that reinvested earnings for January-February were also five-times higher, charting at $32 million compared to last year’s $6 million.
The BSP said retained earnings of foreign banks in their local branches were higher this year.
Meanwhile, loans granted by head offices to their subsidiaries in the
The reason for this, the BSP said, was the repayment of loans that local subsidiaries acquired from their parent companies abroad.
The major sources of FDI flows during the two-month period were the
Total foreign direct investments are expected to hit over $2 billion in 2007, boosted by strong investor confidence after the government managed to contain its fiscal deficit for two straight years.
The BSP expects net foreign direct investments (FDIs) to reach $2.119 billion in 2007, higher than the $1.895 billion in 2006.
Friday, May 01, 2009
051207: Foreign direct investments up 33.5% to $551M in Feb
051107: Net hot money inflow hits $1.089B in Jan-Apr
By Des Ferriols
The Philippine Star 05/11/2007
Net hot money inflow amounted to $1.089 billion in the first four months of the year, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.
Preliminary data ending April 28 indicate that total inflow amounted to $4.417 billion during the four-month period but outflow amounted to $3.327 billion, leaving only $1.089 billion in net inflow.
Despite the huge outflow, however, the total net inflow in the first four months of the year was 84.26 percent higher than last year’s $591 million as investors capitalized on the country’s positive economic prospects.
Last year, the total inflow was also significantly lower over the year ago level, amounting to only $1.96 billion while total outflows amounted to $1.369 billion.
Market analysts said investor confidence was boosted by the significant improvements in the country’s fiscal position and the subsequent improvement in the ratio of government’s total outstanding debt to gross domestic product (GDP).
They are also expecting stronger inflows following reports that Standard & Poors could upgrade its outlook ratings on the country’s actual credit rating after the election on Monday.
Despite the unexpected revenue shortfall in the first quarter of the year, investors appeared convinced that the Arroyo administration would still meet its fiscal targets by the end of 2007.
Following an international no-deal roadshow, investment banks said they felt optimistic that the fiscal program would stay on track, mainly because economic planners have previously demonstrated their commitment to meeting their targets.
Citigroup senior economist and public sector group head Vaughn Montes told reporters earlier that the credibility of the economic team was supporting this optimism despite the revenue shortfalls in the first quarter.
Investors are giving credence to the proposals laid out by the authorities on how they intend to realize the revenue targets this year," Montes said. "Aside from the one-off gains from the sale of assets, they are also expecting improvements in collection efficiency."
The Arroyo administration overshot its deficit target for the first quarter of the year, generating a budget gap of P52 billion in January to March as revenues fell dramatically short of expectations in the three-month period.
While brushing off speculations that the fiscal program was going off-kilter yet again, finance officials admitted they are considering ways to beef up revenues, mainly by going after one-time gains from the sale of assets and collection of its long-standing receivables.
050907: FCDU assets grow 14%, hit all-time high
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| ASSETS held by foreign currency deposit units totaled $23.6 billion at end-2006, nearly 14 percent higher than a year earlier and representing an all-time high, the Bangko Sentral ng Pilipinas reported on Tuesday. Some 80 percent of the assets consisted of deposits of $18.8 billion, itself a 14-percent increase from the end-2005 level of only $16.5 billion. This number is significant in that FCDU assets are seen as the country’s second-tier foreign exchange reserve, next in importance to the Bangko Sentral ng Pilipinas’ gross international reserves. At $23.6 billion, the FCDU assets were “the highest level recorded” that surpassed the end-1997 peak of $21.7 billion. Some 96 percent of the assets were owned by expanded license or the universal banks and their regular commercial bank counterparts, according to the BSP. The thrift banking system, which has FCDU assets of $1 billion, accounted for 4.1 percent of aggregate. The FCDUs generated net income reaching $777 million in 2006 or 25 percent higher than 2005’s net income of $622 million. The BSP said the FCDUs had an 8.6-percent increase in net interest income to $568 million and a 44.6-percent rise in noninterest income during the year. Complementing these was the 5.4-percent decline in operating expenses to $126 million. As a result, the return on assets stood higher, 3.5 percent in 2006, versus year-ago level of only 3.1 percent. The bulk of earnings from assets, or 96.3 percent, was generated by the big commercial and expanded license banks; thrift banks accounted for only 3.7 percent of those earnings, the BSP said. Nearly 36 percent of FCDU assets were in the form of marketable securities, up from only 32.9 percent in 2005. Of these investments, only 12.1 percent were held to maturity, significantly down from 14.6 percent the prior year. The FCDUs would also rather invest their assets than lend them to end users, the BSP noted. --J. Vallecera |
050907: FCDU assets hit all-time high of $23.6B
May 09, 2007
Updated 04:36:24 (Mla time)
The prior peak of $21.7 billion hit in 1997, the central bank, Bangko Sentral ng Pilipinas (BSP), said in a statement.
Deposits in FCDUs effectively form a layer of foreign currency reserves for the country, apart from the reserves kept by the BSP.
Of last year’s FCDU assets, investments accounted for $11.268 billion, up 12.7 percent from 2005.
Inter-bank loans accounted for $6.43 billion, and loans were $2.65 billion. Collectibles from other banks amounted to $2.489 billion. Collectibles from the BSP were $38 million.
“Asset preference shifted in favor of marketable securities,” the BSP said. “The proportion of assets held in this type of securities rose to 35.7 percent from 32.9 percent in the previous year.”
Liabilities of the FCDU system last year were largely in the form of deposits ($18.774 billion), which grew by 14.1 percent from 2005.
Loans made by FCDUs went mainly to the manufacturing, utilities, transportation, storage and communication sectors.
Nonperforming loans of FCDUs were 1.0 percent of total loans, compared with 1.8 percent in 2005.
Nonperforming assets were 0.4 percent of total assets, compared with 0.7 percent in 2005, the BSP said. With INQUIRER.net
http://services.inquirer.net/express/07/05/09/html_output/xmlhtml/20070509-64863-xml.html
050707: Personal Finance: Money mistakes to avoid
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| In a time when money is hard to come by, you should be a lot smarter in managing your finances. Previously, I’ve written about expense busters that can save you thousands of pesos every month. These included avoiding all forms of gambling, excessive drinking, smoking, drug abuse, designer labels, expensive hobbies and extra-marital affairs. The savings you get from shunning these things can build up to millions over the long term. Below are additional common money mistakes that many people commit and cost them loads of money. . . sometimes, without them realizing it. 1. Having a deck of credit cards: If you are one of those whose wallets are overstuffed with credit cards of every color you are setting yourself up for a lifetime of debt. The aggressive marketing of card issuers and the relative ease by which you can get credit cards have reinforced our society’s culture of spending, which has resulted in an ever-growing number of people stuck in a debt hole. A credit card is not a source of money but a tool (a very convenient and efficient tool) to let you spend money you still haven’t earned. Credit cards tend to give you the power to purchase anything, anytime and once you start to use it recklessly, you can get into financial trouble pretty fast. Get rid of those credit cards; you only need one for emergency use. As much as possible pay in cash; this will help you cut down your spending 25 percent to 30 percent. If you have to buy on credit then try to pay your bill in full the next month to avoid paying high interest charges… and you still get to earn those reward points. (The missus got a home entertainment system through earned points even though the card company has gained little from interest charges because she often pays the balance in full.) Credit card balance is one of the most expensive kind of debt (next only to your local “5-6” loan shark), so keeping it to a minimum will save you a lot of money. 2. Impulse buying. Both men and women fall prey to buying on impulse and often it involves items that you really don’t need but only serves to provide a short-lived feeling of satisfaction to address an instant craving. Unrestrained impulse buying can put your finances in a bind because money for essential needs is diverted to something else and you could be forced to borrow. Always have a spending plan or a list when you buy things and resist the temptation of purchasing an item that’s not on your list. Avoid places where you easily get tempted to spend even if you don’t have any plans to do so. These could be shoe stores, sporting goods shops, Japanese restaurants, etc. In my case, it’s bookstores. And don’t let yourself get into double trouble by buying on impulse with your credit card. That’s a big no-no! 3. Investment scams. I have relatives and close acquaintances who have lost their lifetime savings running into millions (and irreparably damaged relationships) to investment scams. People are victimized by scams because of their burning desire to earn big quickly and without much effort, which is exactly how most investment scams are trumpeted. Who wouldn’t want to earn 4 percent to 5 percent monthly doing virtually nothing? When a friend or relative tells you about an exciting, powerful and sure-fire money-making investment or business, don’t take their word for it. Do your homework and try to gather as much information as you can about the scheme. Ask questions, a lot of questions. Ask professionals like registered financial planners who know about investment risks and what are realistic rates of return. Just because you trust your cousin or your in-laws doesn’t mean you also have to trust their favorable “analysis” and recommendation of an investment scheme (unless of course they are experts in this field). Saying no to their offer doesn’t mean you love them less. It would also help if you educate yourself about personal finance so that you can easily spot a scam when it presents itself. 4. Low interest accounts. Interests on regular savings accounts have dropped to jokingly low levels. To me, P10,000 earning a pitiful P80 in one year, coupled with being charged P200 monthly for falling below the minimum maintaining balance is a big mean joke. And if you consider the expenses for your regular trips to the bank, it’s obviously a losing proposition. So, why even bother to open savings accounts when you’re probably better off keeping it at home, saving yourself some precious time and money by not going to the bank? I will never understand people who keep most, if not all of their money in regular savings accounts. The amount you ought to keep in these very-low interest earning accounts is the minimum balance required to keep you from paying charges plus enough money to cover your expenses in one month. All the rest should be placed in accounts or investment vehicles that pay or have the potential to earn more than the prevailing inflation rate. For instance, if the average inflation rate stands at 4 percent, you can put your money in a time-deposit account that earns 5 percent or more. If you can handle some risks, you can place your money in well-managed mutual funds or UITFs, which have the potential to earn double-digit returns. For the more intrepid investor the stock market can be your playground. 5. Buying too many things that decline in value. This has most likely something to do with trying to keep up with the “neighbors.” By neighbors, I mean not just the next-door neighbors but also those distant individuals (perhaps relatives or celebrities) that the big spender is trying to emulate. The couple Ron and Clarissa (not their real names) has only one child but their garage is packed full with eight vehicles including a sports car and a souped-up Hummer. What’s the big idea? It’s a good thing they can afford it. But there are many who can’t afford it (or doesn’t need to) yet you find them accumulating a lot of stuff that only degrades and loses value over time. Do you really have to own more than a hundred pair of shoes or dress differently every day at the expense of having zero savings? Do you really have to have a TV in every room in the house just like your best friend? Who made the rule that you have to buy the latest cell phone even if your previous one is only six months old and working perfectly fine? Do you really have to own three cars even if your wife can’t drive? Try to calculate the amount you are spending to maintain these unnecessary luxuries and you will probably have second thoughts of getting another one. Before you buy something that is nonessential consider the effect it will have on your finances and how it will take you even farther away from accomplishing your financial goals. Try to look for a less expensive way of accumulating pogi points. Come to think of it, a big, fat bank account or investment portfolio will score you a lot of pogi points. Your choice! Alvin T. Tabañag is a registered financial planner and a member of the RFP Institute and the Financial Planning Association ( Join the Seventh RFP Program (July 7-August 25, 2007). Visit www.rfp-philippines.com, or inquire at info@rfp-philippines.com /Tel. No. 6342204. |
050507: April inflation inches up to 2.3%
By Des Ferriols
The Philippine Star 05/05/2007
The nationwide inflation rate inched up to 2.3 percent in April, ending a 12-month downtrend that had seen inflation hit a 20-year low of 2.2 percent in March, the National Statistics Office (NSO) reported yesterday.
Despite the slight uptick, the April inflation rate was still an improvement over the 7.1-percent rate posted in the same period last year.
BSP Governor Amando M. Tetangco Jr. said that despite the slight rise, "the overall inflation outlook remains favorable."
The April figure was well within the two to 2.7 percent level projected by the BSP and the 2.2 to 2.7 percent level forecast by several economists.
Inflation in the first four months of the year stood at an average rate of 2.8 percent, well below the government’s target of four to five percent inflation for the whole year.
Month on month, consumer prices in April were up 0.2 percent, after registering a 0.1 percent drop in March from February.
The BSP chief earlier said the full-year inflation rate could be lower than the government’s target, given the trend since the start of the year and efforts to curb the inflationary impact of a surge in liquidity due to the strong inflow of remittances from overseas Filipinos workers (OFWs).
"The challenge of high liquidity will be addressed by our additional monetary tools, which will take effect on May 10," Tetangco said.
"The relatively benign inflation numbers provide some room for the BSP to maintain loose monetary conditions despite rapid money supply growth," said Frederic Neumann, an economist at HSBC Holdings PLC in
The BSP will take deposits from pension funds and insurers starting May 10 to absorb money that might otherwise fan inflation amid campaigning for May 14 national elections and record amounts of cash being sent home by OFWs.
Inflation rate in the National Capital Region (NCR) was 2.1 percent in April, the same rate recorded in March. On the other hand, the inflation rate in Areas Outside the National Capital Region (AONCR) increased to 2.4 percent in April from 2.3 percent in March.
According to Tetangco, the April result also confirmed BSP’s expectation that inflation rate would start moving up slightly in the second quarter as the base-effect of the revised value-added tax rate started to diminish.
While domestic liquidity continued to grow rapidly, the BSP has refused to ease its headline overnight borrowing rate of 7.5 percent and its lending rate of 9.75 percent.
The BSP decided to take steps to arrest the rapid growth in money supply, setting moves to mop up liquidity from the system by luring government deposits away from banks.
The new measures, according to the BSP, are expected to ultimately slowdown the growth in domestic liquidity to below 20 percent, a level that the central bank said it considered "sustainable and not inflationary".
"We think that all our policy settings at this time are still appropriate," Tetangco said. "The recent price developments are consistent with the BSP and the market’s expectations of a generally benign inflation outlook."
However, Tetangco said the MB is still concerned over the strength of monetary growth which could build up inflationary pressures over the medium term.
To address the potential risks, Tetangco said the MB has decided to encourage government owned and controlled corporations especially the Government Service Insurance System (GSIS) and the Social Security System (SSS) to deposit their funds with the BSP.
The BSP has also allowed the trust department of banks as well as non-banking institutions with quasi-banking functions to avail of the BSP’s special deposit account (SDA) facility.
The BSP also allowed the SDAs of banks to be counted as alternative compliance with the liquidity floor requirements for government deposits. — With AFP
043007: BSP debt paper mulled
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| By Jun Vallecera |
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| THE Bangko Sentral ng Pilipinas plans the issuance of a new monetary tool, a debt paper that will help it deal more effectively with excess money supply without exposing itself to potentially costly interest expense, but such would require amending the central bank charter. BSP Governor Amando M. Tetangco Jr. knows that the plan enticing the state-owned pension funds with market-determined interest rates could prove costly and would in fact diminish their ability to produce a surplus at the end of the year. Still, the BSP is determined to entice the pension funds before the already-surging domestic liquidity growth translates to high inflation down the line. What he has in mind, he said on Sunday, is the ability to issue a debt paper that the BSP charter, or Republic Act 7653, currently prohibits him from selling. “We will include it in the proposed amendments to RA 7653. If approved, it will provide the BSP with an important additional instrument to address potential money supply expansion which may be in excess of what is needed to maintain low inflation and promote sustainable economic growth,” Tetangco said. He reiterated that domestic liquidity growth, or M3, is not yet a threat to inflation but acknowledged that it could not be allowed to continue expanding as it has. Normally seen expanding at around 13 percent, M3 growth accelerated by 21.4 percent in December last year, picked up speed averaging 22.8 percent in January, and was tracked at 22.4 percent in February. His colleagues at the policy-setting monetary board have come up with antiliquidity measures described by some as “baby steps” rather than decisive strides against the gathering inflationary momentum. The measures include asking the Government Service Insurance System and the Social Security System to participate in a special facility that offers a still-undetermined interest rate of return “set by market.” But what is clear is that the facility, even if successful in controlling surging domestic liquidity, will cost the BSP plenty. Deputy BSP Governor Diwa Guinigundo, stung by the “baby steps” comment, told reporters the amount to be siphoned off should the GSIS and the SSS bring their money to them “should be enough to bring down the liquidity growth to below 20 percent.” This is important because liquidity growth sustained over a 12-month stretch was potentially deadly to the economy. Guinigundo disputed the “baby step” tag, saying analysts were only saying that because they only considered its impact on reserve money, not on domestic liquidity which is a broader measure of money. Computed with the money multiplier, not just reserve money, the analysts would have reconsidered the magnitude of the impact of the measure, Guinigundo said. |
042607: BTr resumes issuance of 1-yr T-bills
By Des Ferriols
The Philippine Star 04/26/2007
The Bureau of the Treasury (BTr) said yesterday it will resume the issuance of one-year Treasury bills (T-bills) next week.
National Treasurer Omar Cruz told reporters that the BTr would be auctioning off P1 billion worth of 91-day T-bills on Monday, along with P2 billion worth of 182-day notes and P2 billion worth of the one-year notes.
Last week, the BTr cancelled the issuance of one-year T-bills, reducing down its scheduled borrowing from P5 billion to P2 billion.
Cruz said the BTr had been studying market preferences since the beginning of the year which clearly indicated that the T-bill market is largely being driven only by customer requirements.
"It’s a very illiquid market now and the people who are still there are those who need to fill up their clients’ requirements," Cruz said. "In view of the market’s limited appetite for longer-dated securities shown by limited tenders and trades, we decided to cancel the one-year notes at the previous auction."
Next week, however, Cruz said the BTr will resume the issuance of the one-year T-bills, speculating that the market "has returned" after its apparent lack of appetite for the one-year notes.
If this appetite does not materialize as expected, however, Cruz said the BTr is ready to suspend the issuance of longer-tenor notes and resume only when there is enough demand.
Cruz said the government would rather issue more bonds where the market appetite was concentrated rather than continue issuing one-year notes that no one wanted.
Cruz said the demand for the short-end notes was spurred mainly by bank clients who need 90-day money. The longer-end, however, attracted only throw-away bids.
"This market is now strictly dictated by client requirements," Cruz said. "If bank clients did not need these instruments, they wouldn’t bother with it at all because it is very illiquid."
042607: Philippine stock index climbs
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| By Ian C. Sayson |
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| THE “A significant part of our imports are raw materials for the products we sell overseas,” said Ron Rodrigo, head of research at Manila-based Unicapital Inc. “We should see a pick up in manufacturing and exports activities.” Manila Electric Co. (Meralco) rose after reporting electricity volume grew in the first quarter. Ayala Land Inc. advanced to its highest in almost 11 years after an affiliate said it plans to spend P1 billion on developments in central The Philippine Stock Exchange index rose 17.50, or 0.5 percent, to 3309.43 at the close of trading, trimming an earlier gain of as much as 0.7 percent. It’s up 3.3 percent this month. Manila Mining Corp. rose after the exchange said it will be one of three companies to join the benchmark stock index next month. Imports rose 9.9 percent in February after gaining 1.1 percent in the previous month as manufacturers bought more raw materials to make laptops and video players for exports, the government said earlier Wednesday. “The higher imports are a positive signal” because it “could lead to gains in exports,” said April Lee-Tan, head of research at Manila-based stock brokerage CitisecOnline. Exports, which grew at a slower pace in February partly because of the stronger peso, make up two-fifths of the economy. Meralco MERALCO’S Class A shares, which are reserved for Filipinos, gained 50 centavos, or 0.7 percent, to P68.50, extending a 2.3-percent climb in the previous three days. Its Class B shares, which have no ownership restrictions, added P1, or 1.5 percent, to P69, a nine-day high. The company said Wednesday that first-quarter electricity volume grew 3.7 percent from a year ago driven partly by stronger demand from commercial and industrial customer. The utility also said Wednesday after trading closed that it posted a P532 million first-quarter profit on P48.19 billion of sales. It had a P748 million loss a year ago on sales of 41.61 billion. International Container, which runs the nation’s largest international port, rose 50 centavos, or 1.8 percent, to P28. “ Cebu Holdings was unchanged at P4.40 after sliding as much as 2.3 percent earlier Tuesday. The stock advanced to a record P4.40 on April 23. Manila Water Co., which services the eastern half of the Philippine capital, gained 50 centavos, or 4.6 percent, to P11.50, after rising 4.8 percent in the previous two days. The stock may climb to P13.50 in the next 12, said Deutsche Bank AG, which raised its share price target by 23 percent from P11. Index changes CLASS B shares of Manila Mining, which have no ownership restrictions, gained 0.1 centavo, or 3 percent, to 3.4 centavos, its biggest gain since April 16. Its Class A shares, which are reserved for Filipinos, were unchanged at 3.1 centavos. Benpres Holdings Corp., one of the three companies that will be replaced in the index, fell 5 centavos, or 1.4 percent, to P3.60. Filinvest Land Inc., which will also be displaced, declined 2 centavos, or 1.1 percent, to P1.86. “Investors tracking the index will shift part of their allocations to stocks that will be included in the benchmark,” Tan said. “These changes will be felt by the stocks affected by the revision.” Along with Benpres and Filinvest, Semirara Mining Corp. will also be taken out of the index and replaced by Manila Mining, Universal Robina Corp. and First Gen Corp. on May 16, according to Philippine Stock Exchange president Francis Lim. Lim said the swap is part of the regular review of the index to make sure that the benchmark reflects the stock market. First Gen, the nation’s third-largest power producer, gained as much as 50 centavos, or 0.9 percent, to P59 before closing unchanged at P58.50. Semirara Mining, the largest Philippine coal producer, lost 50 centavos, or 1.9 percent, to P26.50, its first decline in four days. Universal Robina fell 50 centavos, or 2.9 percent, to P16.50, after falling as much as 4.4 percent earlier Wednesday. Shares worth P3.27 billion were traded, 20 percent less than the six-month daily average. Losers beat gainers 66 to 45, with 52 stocks unchanged in the broader market. |
Thursday, April 30, 2009
010807: Ending poverty should be the main goal
| Editorial: |
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| Ending poverty should be the main goal |
| 'Pababa ang kahirapan [Poverty is declining],” President Arroyo said in her speech last week during the inauguration of the P745.5-million Domalandan Bridge that links Dagupan City and Lingayen in Pangasinan to the western parts of the province. The President pointed out that during the first half of her term, the number of families living below poverty line went down to 24 percent from 28 percent in 2000. Forgive us if the latest presidential pronouncement of a 4-percent decline in poverty levels during the first five years of her term, that is, from 2001 to 2005, doesn’t exactly excite us enough to make us ecstatic. What worries us is that a mere 4 percent of the poor have been emancipated from poverty in the past five years, and given this performance, we can expect just another 4 percent to be freed from the clutches of deprivation until the end of her term in 2010. If the antipoverty program proceeds at such a snail’s pace, then it is perfectly understandable that we should raise questions as to whether this government is really making a dent on the poverty situation in the country amid its claims of much improved economic conditions. If we’re not mistaken, recent surveys indicate that roughly half of the population consider themselves poor. And if we’re to believe other surveys indicating that many Filipinos go hungry every day, then we have a far worrisome picture from what the President says. In other words, we have here a yawning gap between official claims and survey results that keeps us wondering whom we should believe. To be sure, there’s enough good news on the economic front that gives us ample cause for optimism that things will be better this year. The Bangko Sentral ng Pilipinas revealed on Friday that the country’s gross international reserves (GIR) in 2006 reached $23 billion, beating the government target of $22 billion. The end-2006 GIR level is $4.51 billion more than what was recorded in 2005, a surge attributed to accumulated reserves from huge dollar inflows in 2006. The current level of reserves was accumulated despite the prepayment of the country’s $220 million remaining loan from the International Monetary Fund, and another prepayment of $72 million worth of assorted loans from the Asian Development Bank. The year-end GIR—equivalent to four times the country’s short-term external debt based on original maturity and 2.3 times based on residual maturity—would be enough to cover about 4.4 months worth of imports of goods and payments of services and income, according to the BSP. The country’s balance of payments (BOP) position—the sum of all the trade in goods and services—also improved last year. While the BSP has yet to disclose the December BOP, the November position has already bested the projected $2.8-billion BOP position for 2006. The country’s 11-month BOP surplus of $3.138 billion was higher than the $2.134-billion BOP surplus recorded over the same period last year. The surplus shows that the country has more than enough foreign reserves to meet all of its foreign currency-denominated obligations. Meantime, the national government’s budget deficit for 2006 is likely to settle at P81 billion, better than the projected P125 billion set under the fiscal program last year. This would be the fourth straight year of decline, and that is a plus on the government’s balance sheet last year. Viewed in the context of the continuing appreciation of the peso, the surge in the stock market, increased revenue collection, and record levels of remittances by overseas Filipino workers, the other macroeconomic fundamentals, including the all-time high in our foreign exchange reserves, the surplus in our balance of payments and the reduction in our budget deficit all point to better prospects in 2007. But while these are clear economic gains, the proof of the pudding is in the eating. These gains should translate to immediate benefits to those living on the edge of poverty. They should translate to a better life for poor Filipinos in the long-term, and not just fatten up the bank accounts of those already enjoying the wealth of this country. One recalls that after she took her oath of office in January 2001, Mrs. Arroyo said in her inaugural speech that she would work to eliminate poverty in the country by the end of the decade, or by 2010. That deadline disturbed not a few Filipinos, because the 1987 Constitution says that the President should serve for only six years, and she was saying then that she intended to remain in office until 2010, or a good 10 years in Malacañang. But maybe that should be of no import now; what matters is that she delivers on her promise. Last week, Mrs. Arroyo assured the public that the political noise that goes with the midterm elections in May will not be a threat to sustaining the economic gains her administration has achieved, and that her economic team is determined to work harder to meet the government’s macroeconomic targets for the year. Let’s certainly hope so, because the poor, the hungry and the desperate cannot wait forever for deliverance.
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