Archive for December 2010

2.8 M unemployed, 7.1 M underemployed

December 15, 2010

The results of the 4th quarter (October) labor force survey was released yesterday by the National Statistics Office (NSO). Here are the important results as of October 2010:

Unemployed, 2.80 M (vs. 2.72 M in October 2009), unemployment rate this quarter remains at 7.1 percent of the labor force.

Underemployed, 7.14 M (vs. 6.88 M in October 2009), underemployment rate at 19.6 percent. See other data here.

So the combined number of unemployed plus underemployed this quarter remains high at 9.94 M people. The challenge to create more jobs in the economy remains very important.

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RP 2010 exports might reach $52 B

December 13, 2010

Philippine merchandise exports for January to October 2010 has already reached $43.05 B. This is $11.65 B larger than the January to October 2009 level of $31.40 B. Huge jump, indeed.

If the $4.3 B per month average exports this year will continue, if not grow larger, then the end-2010 level might reach $51.7 B or more, an all-time high. Total merchandise exports in 2008 reached $49.1 B, then dropped to $38.3 B in 2009 due to the global financial turmoil.

Top 25 corporate taxpayers in 2009

December 13, 2010

Unit in P million:

1. SMART COMMUNICATIONS INC., 10,196.1
2. GLOBE TELECOM, INC., 5,495.4

3. CHEVRON MALAMPAYA LLC, 4,190.8
4. SAN MIGUEL BREWERY INC., 3,578.8
5. NESTLE PHILIPPINES INC., 3,549.0
6. PLDT COMMUNICATIONS AND ENERGY VENTURES, INC., 3,528.2
7. SHELL PHILIPPINES EXPLORATION, B.V., 3,237.2
8. MANILA ELECTRIC COMPANY, 2,794.4
9. FORTUNE TOBACCO CORPORATION, 1,879.6
10. SM PRIME HOLDINGS INC., 1,815.2

11. HOME DEVELOPMENT MUTUAL FUND, 1,744.9
12. TEAM SUAL CORPORATION, 1,598-2
13. FIRST GAS POWER CORPORATION, 1,512.8
14. HOLCIM PHILIPPINES, INC., 1,437.6
15. ENERGY DEVELOPMENT EDC CORPORATION, 1,427.8
16. METRO RAIL TRANSIT CORPORATION, 1,356.5
17. QUEZON POWER (PHILIPPINES), LIMITED CO., 1,344.6
18. CE CASECNAN WATER AND ENERGY COMPANY, INC., 1,082.6
19. MANILA WATER COMPANY, INC., 1,047.9
20. PHILIP MORRIS PHILS MANUFACTURING INC., 1,008.7

21. GMA NETWORK INC., 1,007.6
22. PNOC EXPLORATION CORPORATION, 953.0
23. MONDE NISSIN CORPORATION, 904.6
24. MEAD JOHNSON NUTRITION PHILIPPINES, INC., 899.9
25. WYETH PHILIPPINES INC., 878.1

source: BIR, www.bir.gov.ph

More power plants in Mindanao

December 10, 2010

Businesses and households in Mindanao and other part of the country will face serious power shortages in the coming years if no new power plants will be constructed and commissioned. The commissioning of four new power plants within the next five years in Mindanao to produce at least 400 MW  from one power company alone is good news.

To be built and commissioned in Mindanao alone, among others, are the following: a 200-megawatt (MW) coal-fired power plant in Maasin, Sarangani; another coal-fired plant with a capacity of 100 MW in Zamboanga City; and two hydroelectric plants, 17 MW and 30 MW, in Sarangani. See the news report today here.

The opponents of coal power plants for environmental reasons should reconsider their position. Regular power outages kill businesses, which kill job creation, which contributes to more unemployment and more poverty. Most coal plants these days have modern features that reduce their polluting emissions.

BPO race, India vs. Philippines

December 8, 2010

Some interesting numbers here on the subject.

1. Call centers, new hiring as of October 2010: India 13,800, Philippines 15,000.

2. Call center revenues as of October 2010: India $5.3 B, Philippines $5.5 B. Projections for end-2010: India $5.5 B, Philippines $5.8 B.

3. Overall business process outsourcing (BPO) industry: India $47 B, Philippines $9 B.

So, in the call center sub-sector, the Philippines is now ahead of India. But in the overall BPO sector, to include software development, engineering designs, investment research, medical transcription, etc., India is still way ahead.

The Business Processing Association of the Philippines (BPAP) projects that the sector can grow from this year’s $9 B revenue to $20 to $25 B by 2016. Likewise, direct employment can rise from this year’s estimated 500,000 people to 900,000 by 2016. See the relevant news report today, RP said leading only in call center business.

Whether the Philippines will overtake India in the overall BPO sector or not, is less important compared to having a consistently rising employment and revenues of the sector in the Philippines. At around 1.4 million new job entrants every year, Philippine-based companies need to expand and create more jobs every year.

Forex reserves might reach $65 B this year?

December 7, 2010

Just about 3 weeks ago, Bangko Sentral ng Pilipinas (BSP) Governor Armando Tetangco estimated that the bank’s gross international reserves (GIR) might reach $60 B by the end of this year. The GIR as of end-October then was $57 B.

Then something happened last month. The incremental increase in monthly GIR was not just $2 B, but $4.15 B, so that the end-November forex reserves was at $61.3 B already. Was it because of the debt crisis worries in Ireland and Spain? Because of the uneasiness in the Quantitative Easing (QE) in the US? Because of the huge inflow of returning Filipinos from abroad? Because of huge inflow of Koreans after the artillery shooting between the two Koreas late last month?

Whatever the reasons were, the huge inflow of dollars into the country in just one month caused worries in several sectors as the Peso – US$ exchange rate touched the 43 level for several days. There were also worries that the BSP intervened hard last month by buying up lots of dollars to raise the GIR and strengthen the peso, which reduces the peso value of the country’s foreign debt and debt payment.

If the monthly increase in forex reserves will continue at $4 B, then the end-2010 GIR of the BSP will reach $65 B. An all-time high of course. Though this may be interpreted as improving business environment of the country, it can also be seen that business environment elsewhere are simply bad, resulting in the migration of capital and investments into the Philippines, temporarily or permanently.

Up to 10 M tourists this year?

December 7, 2010

The Bureau of Immigration (BI) said that from January up to the first week of December this year, more than 6 million returning Filipinos abroad (“balikbayan”), overseas Filipino workers (OFWs) and foreigners have landed in the country. Thus, BI projects that about 8 to 10 million returning Filipinos and foreigners will arrive in the country this year. See the news report today  here.

One implication of this huge inflow of foreign visitors and returning Filipinos, is also the huge inflow of foreign currencies, especially US dollars, into the country. But this will not necessarily result in further peso appreciation as those dollar inflows will also be used for importation of various goods and services. Besides, there are also many Filipinos and expats here who will need foreign currencies as they are also travelling abroad.

Nonetheless, these developments would add to more economic opportunities in the country.