Unemployed + Underemployed is 26.2%

Posted September 21, 2011 by Alas, Oplas & Co., CPAs
Categories: Uncategorized

 

The National Statistics Office released last week its 3rd quarter, July 2011 Labor Force Survey. The results are not good. Unemployment rate + underemployment rate in July 2011 was 26.2 percent of labor force, while it was only 24.9 percent in July 2010.

Philippines    July 2011 1/       July 2010    

 

   Population 15 years and over (in ‘000) 62,054 60,928
   Labor Force Participation Rate (%) 64.3 63.9
   Employment Rate (%) 92.9 93.0
   Unemployment Rate (%) 7.1 7.0
   Underemployment Rate (%) 19.1 17.9

The underemployed are those who have work but are still looking for extra work, mainly to augment their income. Meaning, they compete with the unemployed in looking for work. This should be a wake up call for the current administration to do more in encouraging more job creation in the economy.

 

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Gold rush and Philippine mining

Posted September 13, 2011 by Alas, Oplas & Co., CPAs
Categories: Uncategorized

Gold prices almost breached the $1,900 per troy ounce late last month as the uncertainty over the US debt limit hike bill was on-going.

Philippine mining will surely benefit from this continuing “gold rush”. We would like to see more transparent and more accountable system of mining via well-registered mining companies, local or foreign. Environmental fragility should be considered in the extraction of gold and other precious metals and minerals.

On PLDT-Digitel merger

Posted September 13, 2011 by Alas, Oplas & Co., CPAs
Categories: Uncategorized

The government, through the National Telecommunications Commission (NTC), will soon rule whether it will not stop the planned merger of PLDT/Smart and Digital/Sun cellular with the former as the surviving entity. Even big businesses also need extra resources, perhaps the Gokongwei group sold out so it can have more money for its real estate and mall development (Robinsons), airline expansion (Cebu Pacific) and other businesses.

Consumers and telecom subscribers like us would naturally fear that a two-players industry (Smart and Globe) would not be to our advantage as we shall have only two choices, instead of three or four or more, in a really competitive environment. Our problem is that the Constitution limits the entry of foreign players like any of the big telecom companies in the US, Europe, Japan and other countries. With 40 percent maximum foreign equity, they will have a hard time looking for those big local players who can put up the 60 percent equity. So we just hope that a two-players industry will not result in higher telecom rates later.

Skyway over Edsa

Posted September 13, 2011 by Alas, Oplas & Co., CPAs
Categories: Uncategorized

There is a proposal from the DPWH to build a 22-kilometers long, 6-lanes skyway along EDSSA, from Roxas Blvd to Balintawak. This would effectively connect two tollways, the Cavite Coastal Road and North Luzon Expressway (NLEx). If this project will push through, it will have plenty of positive effect on business and the economy.

DPWH Secretary Singson said they are looking at two funding, one is a foreign loan from ODA-JICA (Japanese government) or via private tollway operators. Given the high public debt of the government (please see our previous discussions on this subject below), private-funded infrastructure projects like the proposed Skyway over Edsa, or Skyway intersecting Edsa would be a better alternative. Government should focus on retiring many of its public debt, to reduce the huge interest payment annually, so that future savings can be used for other infrastructure like more roads and skyways in other big cities outside of Metro Manila.

Greece’s debt default fears

Posted September 12, 2011 by Alas, Oplas & Co., CPAs
Categories: Uncategorized

European and Asian stock markets yesterday suffered serious declines because of new fears that Greece, despite being given some Euros 200 B (US$ 272 B) of bail out money (actual + promised), will ultimately default on its debt payment. Among the first to be hit were big French banks which hold billions of dollars of Greece debt papers.

This global financial turmoil due to big debt burdens of the US and many European governments will drag their respective corporate and household sectors. Not good also for emerging markets like the Philippines which have huge economic ties (trade, investments, tourism, etc.) with those countries on both sides of the Atlantic. We just have to focus on our internal house cleaning, learn to live within our means, as our modest contribution to help contain whatever serious contagion in global credit and finance.

Interest payment on foreign debt securities, Philippines

Posted August 22, 2011 by Alas, Oplas & Co., CPAs
Categories: Uncategorized

As shown in the table below on Foreign Debt Service of the Philippine Government, foreign debt securities comprise the bulk of the country’s external debt service burden. These are debts with high interest rates and other charges, from 4 to 10.6 percent p.a. or several times larger than the London Inter Bank Offered Rate (LIBOR) of around 1 percent. Here is the interest payment alone for some of those foreign debt securities.

source: DBM, BESF 2012, Table B.22 http://www.dbm.gov.ph/BESF2012/B/B22.pdf

* Notes:

  1. These foreign debts were meant purely for budgetary support, ie, to finance the budget deficit.
  2. Only loans with more than $50 M in interest payment in 2010 (1st block) and in 2012 (2nd block) are included here.
  3. The Loan Account name indicates (a) amount loan, (b) interest rate and other charges, and (c) year of loan maturity.

These numbers do not look good. Long term loans with high interest rates.

 

 

Tourism challenge

Posted August 19, 2011 by Alas, Oplas & Co., CPAs
Categories: Uncategorized

In 2010, the Philippines attracted some 3.5 million tourists. The same way, Singapore attracted 11.6M tourists,  Thailand got 15.8M, Malaysia 24.6M. Vietnam got 5M tourists, larger than the Philippines.

There are many factors why the above-mentioned countries have attracted more tourists than the Philippines. Their huge international airports alone are already tourist destinations already. Then they are contiguous to each one. One can take a bus or car from Singapore to Kuala Lumpur and back, or from Hanoi to PnomPenh to Bangkok. The Philippines is an archipelago and its nearest neighbors ares Hong Kong and Taiwan, about 1:40 hour by plane from Manila. Going to other islands would also need a connecting flight.

There is a big challenge from the various sectors — national government, provincial and city/municipal governments, the private sector — to attract more visitors, foreigners and Filipinos abroad alike, to visit the country. Tourism is a huge potential for the country as we have almost everything in nature except perhaps snow — mountains, waterfalls, white sand beach, golf courses, small and beautiful islands, friendly people, etc.