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PRESIDENT Benigno S. C. Aquino III delivered on Monday his third State of the Nation Address (SONA) at the House of Representatives. As is tradition, he outlined his policy agenda for the rest of his term and gave a detailed progress report to Congress, putting greater emphasis on economic breakthroughs and calling on legislators to act on several measures. President Benigno S.C. Aquino III delivers his third State of the Nation Address at the House of Representatives, as Senate president Juan Ponce Enrile and House Speaker Feliciano 'Sonny' Belmonte listen in. -- by JLC AQUINO: "What was once the sick man of Asia now brims with vitality. When we secured our first positive credit rating action, some said it was pure luck. Now that we have had eight, can it still just be luck? When the Philippine Stock Exchange Index first broke 4,000, many wondered if that was sustainable. But now, with so many record highs, we are having trouble keeping score: For the record, we have had 44, and the index hovers near or above 5,000. In the first quarter of 2012, our GDP grew by 6.4 percent, much higher than projected, the highest growth in the Southeast Asian region, and the second only to China in the whole of Asia...Once, we were the debtors; now, we are the creditors, clearly no laughing matter. Until recently, we had to beg for investments; now, investors flock to us." THE FACTS: Touting economic gains by citing GDP growth, the stock market, and credit upgrades has been staple fare in previous SONAs. In 2009, President Gloria Macapagal-Arroyo said: “[O]ur economy has posted uninterrupted growth for 33 quarters; more than doubled its size from $76 billion to $186 billion. The average GDP growth from 2001 to the first quarter of 2009 is the highest in 43 years … Our administration, with the highest average rate of growth, recording multiple increases in investments, with the largest job creation in history, and which gets a credit upgrade at the height of a world recession, must be doing something right, even if some of those cocooned in corporate privilege refuse to recognize it.” The recent announcement that the central bank is lending $1 billion in its reserves to a European crisis fund through the IMF does not mean the
Philippines has escaped its debt woes. From January to May, the government required P171.645 billion in net financing from domestic and foreign sources, according to data from the Bureau of Treasury. As of May 2012, the government’s outstanding debt was P5.15 trillion. In 2010, debt stood at P4.72 trillion. -- BW Research On record highs in the Philippine stock market: The Philippine Stock Exchange index (PSEi), composed of 30 blue-chip firms, has recorded 21 all-time highs since the start of the year, with the main index last peaking at 5,369.98 on July 5. The PSEi first breached the 4,000 level on Sept. 16, 2010 and the 5,000 mark at the close of March 2 this year, when it settled at 5,016.30. Before the President delivered his SONA on Monday, the main index slid by 1.37% or 71.49 points to close at 5,139.400 on the back of Spanish debt concerns. -- Franz Jonathan G. de la Fuente, BW reporter ============= BACKGROUND: Eight positive rating actions under Aquino's term: The Aquino administration has made it its goal to secure the Philippines' first ever investment grade credit rating by 2016. An investment grade credit rating would lower the borrowing costs and lure more foreign investments, both for the government and corporations in the country. November 2010: Standard & Poor's upgrades the Philippines' credit rating for the first time in 13 years, putting it at to BB -- two notches below investment grade -- from BB-. January 2011: Moody's Investors Service raises the country's credit rating outlook to positive from stable, signaling a possible upgrade in the next 12 to 18 months. It rates the Philippines at Ba3 -- three notches below investment grade. June 2011: Moody's awards the Philippines with a credit rating upgrade, noting the country's sustained macroeconomic stability and prudent fiscal management. This puts the Philippines on Ba2 -- two notches below investment grade. June 2011: Fitch Ratings puts the country at one notch below investment grade as it revised its credit ratings to BB+ from BB. The debt watcher cited "broadly favorable economic prospects."
July 2011: S&P affirms the Philippines' BB credit rating, remarking that the upside and downside risks to the country remain balanced: strong external liquidity and economic growth were offset by high debt and low income levels. September 2011: The Philippines jumps 10 spots from 85th to 75th -- its biggest leap yet -- in the World Economic Forum's 2011 World Competitiveness Report, driven by improvements in infrastructure, ease of doing business and public trust. May 2012: Moody's raises the outlook on the country's Ba2 credit rating to positive from stable, recognizing the "faster-than-expected" fiscal consolidation and "active" debt management. -- by Diane Claire J. Jiao, Senior Reporter ============= AQUINO: "When we began office, there were 760,357 household-beneficiaries of the Pantawid Pamilyang Pilipino Program. Our target: 3.1 million within two years...This is a long-term project, with far-reaching impact. The research is in its initial stages, but already the figures show promise. Based on data from the DSWD: 1,672,977 mothers now get regular checkups; 1,672,814 children have been vaccinated against diarrhea, polio, measles, and various other diseases; 4.57 million students no longer need to miss school because of poverty." THE FACTS: The Pantawid Pamilyang Pilipino Program was started by the previous administration. It was launched by President Arroyo in November 2008. In 2009, Arroyo said in her SONA: “Cash handouts give the most immediate relief and produce the widest stimulating effect. Nakikinabang ang 700,000 na pinakamahihirap na pamilya sa programang Pantawid Pamilya.” -- BW Research ============= AQUINO: "What we want: True, universal, and holistic health care. This begins not in our hospitals, but within each and every household: Increased consciousness, routine inoculation, and regular checkups are necessary to keep sickness at bay. Add to this our efforts to ensure that we prevent the illnesses that are in our power to prevent. For example: Last year, I told you about our anti-dengue mosquito traps. It is too early to claim total victory, our scientists are rigorous about testing, but
the initial results have been very encouraging. We tested the efficacy of those mosquito traps in areas with the highest reported incidence of dengue..." FACT: The development of mosquito traps was already mentioned in President Aquino’s 2011 SONA. -- BW Research ============= AQUINO: "We are ending the backlogs in the education sector, but the potential for shortages remains as our student population continues to increase. Perhaps Responsible Parenthood can help address this." THE FACTS: Note that President Aquino did not explicitly talk about passing a bill, much less the “Reproductive Health” bill being sought by various groups. The Senate bill, SB 2865, is titled “An Act Providing for a National Policy on Reproductive Health and Population and Development”. The House version, HB 4244, is titled “The Responsible Parenthood, Reproductive Health and Population and Development Act of 2011”. The term “Reproductive Health,” which is the subject of international agreements, is wider than “Responsible Parenthood,” and in some countries is taken to include access to abortion. See President Aquino’s own views on the matter. -- BW Research ============= AQUINO: "Let us keep in mind: there are about a million new entrants to the job market every year. The jobs we have produced within the past two years total almost 3.1 million. As a result, our unemployment rate is declining steadily. In 2010, the unemployment rate was at 8 percent. In April 2011, it dropped to 7.2 percent, and dropped further to 6.9 percent this year. Is it not an apt time for us to dream of a day where any Filipino who wishes to work can find a job?" THE FACTS: • The unemployment rates for April 2011 and April 2012 have no statistical difference, according to the National Statistics Office. Meanwhile, based on the results of the April 2010 Labor Force Survey (LFS), 35.411 million Filipinos were employed. Compared with the April 2012 LFS, 37.841 million Filipinos had jobs, or an increase of 2.43 million jobs. -- BW Research
• BusinessWorld columnist Benjamin E. Diokno, a UP economist, warns that the slightly better unemployment numbers are masking the poor quality of jobs. -- BW Research • Adult unemployment has indeed declined in May from a record-high hit last quarter, the Social Weather Stations (SWS) said, but the tally remains historically high. Results of a second-quarter survey that were made exclusive to BusinessWorld put the adult unemployment rate at 26.6%, equivalent to some 10.9 million individuals, from first quarter’s record peak of 34.4% (13.8 million). But since SWS began surveying it, adult unemployment was below 15% from 1993 to March 2004, and ranged from 16.5% to 19.0% from August 2004 to March 2005. It has been above 20% in 23 out of 26 surveys from May 2005 to December 2011. -- Noemi M. Gonzales, BW reporter ============= AQUINO: We have suffused the nation with light--and it is this light, too, that has exposed the crimes that occur in the shadowed corners of society. What the Filipino works so hard for can no longer be pilfered. Crime volume continues to decline across the country. In 2009, over 500,000 crimes were recorded--this year, we have cut that number by more than half, to 246,958. Moreover, 2010’s recorded 2,200 cases of carnapping has likewise been reduced by half to 966 cases this 2011." THE FACTS: The National Statistical Coordination Board’s Web site explains why 2009 is the basis for comparison: “In 2009, PNP has implemented (sic) a new crime reporting system wherein the crime data for 2009 was set as the baseline for future research, study and comparison. Hence, crime statistics in 2009 cannot be compared with those crime data obtained during the previous years (2008 and earlier) as the parameters are no longer the same.” Comparing 2010 vs 2011, various media outlets reported last January that the crime rate went down by 23%. -- BW Research ============= AQUINO: "True unity and reconciliation can only emanate from genuine justice. Justice is the plunder case leveled against our former president; justice that she receives her day in court and can defend herself against the accusations leveled against her. Justice is what we witnessed on the 29th of May. On that day, we proved that justice can prevail, even when confronted with an
opponent in a position of power. On that day, a woman named Delsa Flores, in Panabo, Davao del Norte, said “It is actually possible: a single law governing both a simple court reporter like me, and the Chief Justice.” It is possible for the scales to be set right, and for even the rich and powerful to be held accountable." THE FACTS: • The case of Delsa Flores involves more than just non-declaration of assets in the Statement of Assets, Liabilities, and Net Worth (SALN). Aside from her failure to disclose her market stall, Ms. Flores was also found to have collected salaries for two different posts. The 1997 Supreme Court decision states: “By her own admission, respondent had collected her salary from the Municipality of Panabo for the period of May 16-31, 1991, when she was already working at the RTC. She knew that she was no longer entitled to a salary from the municipal government, but she took it just the same. She returned the amount only upon receipt of the Court Resolution dated January 17, 1996, or more than five (5) years later. We cannot countenance the same. Respondent’s conduct is plain dishonesty.” (Source: Lawphil.net) -- BW Research ============= AQUINO: "We challenged the [Department of Energy] and the National Electrification Administration], allocating 1.3 billion pesos to light up an initial target of 1,300 sitios, at the cost of one million pesos per sitio. And the agencies met the challenge--they lit up 1,520 sitios, at a total cost of 814 million pesos. They accomplished this in three months, instead of the two years it took the people that preceded them. Secretary Rene Almendras, I give you credit; you never seem to run out of energy. With public service, you are not only ever-ready, but like an energizer bunny too--you keep on going, and going, and going." FACT: The rural and sitio electrification program was supposed to be given around P7 billion budget and its original goal for October to December 2011 was 1,410 sitios not 1,300. -- Emilia Narni J. David, BW senior reporter REACTION: From Philippine Independent Power Producers Association, Inc. president Ernesto B. Pantangco: "PIPPA remains committed to support the President's growth initiatives and specifically Sec. Rene "Energizer" Almendras' policy directions in energy. We are determined to find solutions to make electricity prices more competitive in the near future." -- Danessa Rivera, BW reporter
AQUINO: "When it comes to growth and development, agriculture is at the top of our priorities. Secretary Alcala has been working nonstop to deliver us good news. Before, it seemed as though the officials of DA cultivated nothing but NFA’s debts. The NFA that our predecessors took over had a 12-billion peso debt; when they left office, they then bequeathed to us a debt of 177 billion pesos. For so long in the past, we were led to believe that we were short 1.3 million metric tons of rice, and that we needed to import 2 million metric tons to address this shortage. They ordered rice as like it was unlimited―but because we had exceeded far more than what we needed, imported rice went to rot in the warehouses." FACT: Actual import figure in 2010 was 2.4 million metric tons, as per the National Food Authority (NFA). -- Bettina Faye V. Roc, BW reporter ============= AQUINO: "In just our first year, we reduced the annual shortage of 1.3 million metric tons to just 860,000 metric tons. This year, it is down to 500,000―including a buffer stock to dip into in times of calamity. And, if the weather cooperates, we’ll be able to export rice next year." FACT: Rice exports, according to Sec. Alcala, will be limited to high-quality types of rice, such as aromatic and long-grain varieties. -- Bettina Faye V. Roc, BW reporter ============= AQUINO: "Secretary Alcala has said that key to our success is a feasible irrigation program and the assiduous implementation of the certified seeds program. What is galling is that this knowledge is not new―it simply wasn’t applied. If they had only done their jobs right, where could we have been by now? Look at our coconut industry: Coconut water, once treated as a waste product, is now being utilized by our farmers. From 483,862 liters exported in 2009, to 1,807,583 liters in 2010, to a staggering 16,756,498 liters of coco water exported in 2011. And where no one previously paid heed to coconut coir, we
are now experiencing a shortage due to the high demand of exporters. We are not wasting this opportunity: we are buying the machines that will process the coco fibers. We have allocated 1.75 billion pesos to invest in, and develop, this sector." FACT: According to a May press release from the Philippine Coconut Authority, coconut water exports in 2011 were at 16.68 million liters valued at $15.11 million and not 16.76 million liters as stated in the SONA. -- Bettina Faye V. Roc, BW reporter ============= AQUINO: "We likewise engaged stakeholders in a level-headed discussion in crafting our Executive Order on mining. The idea behind our consensus we reached: that we be able to utilize our natural resources to uplift the living conditions of the Filipinos not just of today, also of the following generations. We will not reap the rewards of this industry if the cost is the destruction of nature. But this Executive Order is only the first step. Think about it: In 2010, 145 billion pesos was the total value derived from mining, but only 13.4 billion or 9 percent went to the national treasury. These natural resources are yours; it shouldn’t happen that all that’s left to you is a tip after they’re extracted. We are hoping that Congress will work with us and pass a law that will ensure that the environment is cared for, and that the public and private sectors will receive just benefits from this industry." FACT: Figures are correct, according to data from the Mines and Geosciences Bureau. However, the Chamber of Mines of the Philippines, in an earlier statement this year, said taxes, fees and royalties from mining do not completely reflect the industry’s actual contribution to the local economy, which it said includes mining firms’ social development programs in their host communities and direct and indirect employment created because of mining. -- Bettina Faye V. Roc, BW reporter ============= AQUINO: "And we are building an environment where progress can be felt by the majority." THE FACTS:
• Second quarter surveys of the Social Weather Stations (SWS) show improvements in economic indicators where self-rated hunger and poverty eased reversing the rising trend in the past three years. The number of Filipino families who claimed to have experienced hunger went below 20% for the first time since June 2011, but it still fell short of surpassing the Aquino administration’s lowest record of 15.1%. A May 24-27 poll, the results of which were made exclusive to BusinessWorld, found 18.4% of respondents--or an estimated 3.8 million families--said they had nothing to eat at least once in the past three months, an improvement from the record-high 23.8% in March. The same survey found that families who view themselves as “mahirap” slipped four points to 51%, equivalent to an estimated 10.3 million families, from 55% or 11.1 million in March. A bigger six-point decline was recorded with respect to being poor in terms of food, as the ratio dropped to 39%, or 7.9 million families, from 45%, or 9.1 million, previously. -- Noemi M. Gonzales, BW Reporter AQUINO: On the Scarborough territorial dispute: "The situation in Bajo de Masinloc has been the source of much discussion. Chinese fishermen entered out territory. Our patrol boats intercepted some of their ships, which contain endangered species. As your leader, it is my duty to uphold the laws of our country. And as I did, tension ensued: on one hand, the Chinese had their Nine-Dash Line Theory laying claim to almost the entire West Philippine Sea; on the other, there was the United Nations Convention on the Laws of the Sea, which recognized the rights of many countries, including that of China itself." BACKGROUND: Tension between the Philippines and China flared up after eight Chinese fishing boats were caught by the BRP Gregorio del Pilar, the Philippines’ biggest warship to date, carrying fish, corals and other endangered species harvested from Scarborough shoal or what the Philippines call Panatag. A Chinese maritime surveillance vessel arrived at the scene triggering the standoff early April. The Chinese government claims ownership of the Panatag (or Huangyan island in Chinese) although it is just off the coast of Zambales. It is situated within the 200-nautical mile exclusive economic zone (EEZ) of the Philippines and is about 750 miles (1,200 kilometers) from China’s nearest point in Hainan. -Noemi M. Gonzales, BW reporter