By his own reckoning during his PBC presentation, Reyes said that Luzon needs additional 2,000 megawatts by 2012 to sustain modest growth, while the two other regions require 1,000 megawatts each.

These require at least $4 billion in investments, investments that have not come.

Due to the domestic economic slowdown beginning in the last quarter of 2008, energy officials declared that the country may have had bought time before the power crisis hits the country.

In was in that projection that they missed their targets by miles. The economy slowed almost to a halt but did not recede. And it is showing signs of recovery. The brownouts are back and they may get worse in the next couple of years before they get better.

Long brownouts crippled the national economy in 1990 and 1991 due to the failure of the Aquino administration to build new plants after mothballing the Bataan Nuclear plant.

The Arroyo government committed the same mistakes while crowing about having sold most of the aging government power plants in nine years. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. Multi-sectoral group suggests harnessing OFW funds for investments; bats for competitive exchange rate

Recruitment agencies deploying trained factory workers abroad could no longer fill new orders as the local manufacturing sector lose out to cheaper imports, says Lito Soriano, owner of LBS Recruitment Solutions.

Dulce Gozon shares she used to export white onions to Japan until Chinese exporters bumped her off her market by offering to sell $.60 per kilo against her selling price of $1 a kilo.

Their experiences reflect those from different segments of the economy that testified they have found themselves victims of a strong peso. These included the services sectors led by Business Process Outsourcing (BPO), tourism and other services exports, domestic industries, and economists that gathered recently at the to share experiences on whether a strong peso is a boon or a bane to the Philippine economy.

It was the economists, however, who suggested that policy makers must adopt a “competitive exchange rate” to bolster economic growth.

“A competitive exchange rate is a growth booster for the general economy,” attests Economic professor Filomeno Sta. Ana of the University of the Philippines.

He said that based on a study he made, not only do the dollar earners benefit from a competitive peso-dollar rate, but the entire tradable sector, meaning manufacturing and agriculture.

For his part, University of Asia and the Pacific economic professor Victor Abola said that employment growth should be the preferred (exchange rate) strategy rather than price stability for as long as inflation is kept at single-digit rates.

In adopting a competitive exchange rate, the assembled group suggested the harnessing of OFW remittances, estimated at $12 billion last year, in generating funds for domestic investments.

They agreed that a simple mechanism must be set up to capture remittances as savings or investments papers that will then be used for investment projects that create local jobs and expand economic activities.

The much vaunted OFW bonds was a good start but more attractive and accessible investment papers must be created to harness those billions of dollars into productive projects, instead of these just being squandered on consumer spending. -- Abe P. Belena, PHILEXPORT News and Features <--back

3. BOI grants request of PHILEXPORT for extension of contingency projects entitled to perks

The Board of Investments (BOI) has extended for the first half of this year the implementation of the contingency list of projects by companies hit by the global crisis entitled to tax breaks.

The investment arm of government explained that the National Economic Development Authority (NEDA) has not declared that the crisis is over. That was the reason why BOI is extending the perks for another six months.

This was announced by the BOI also after the Philippine Exporters Confederation, Inc. (PHILEXPORT) submitted a position paper asking for retention of the list for another two years.

In the draft investment priority plan (IPP) for this year, BOI, presenting it to stakeholders the other week, said the contingency list for companies that were hit by the global crisis was already dropped.

The list included projects that helped companies affected by the global recession, particularly exporters, keep their workers and even expand operations. PHILEXPORT had sought the extension to help its battered members of about 4,000 enterprises, 51 industry affiliates and 19 field chapters ride on the crest of the global recovery. -- PHILEXPORT News and Features <--back

4. Next administration urged to prioritize employment

The next administration should prioritize the passage of key economic reform measures that seek to enhance the competitiveness of the country and provide opportunities for new investments needed for jobs creation.

This recommendation was made by the National Competitiveness Council (NCC) executive director Ruy Moreno and John Forbes, chairman of the American Chamber of Commerce of the Philippines (AmCham) legislative committee, in an interview at the sidelines of a forum that tackled the legislative accomplishments of the 14th Congress and priorities of the 15th Congress.

Moreno said the country needs to create a policy environment conducive to development of businesses that could generate jobs crucial to encourage the people to stay home rather than work overseas.

He pointed out that developing the eight sunrise industries is one way to harness the country’s competitive advantages and propel economic growth.

Moreno identified these eight industries as tourism, agri-business, information technology/business process outsourcing (BPO), mining, electronics, supply chain logistics with value-added services, manufacturing particularly shipbuilding and automotive parts, and health wellness including retirement.

He particularly cited the passage of a bill creating a Department of Information and Communication Technology (DICT) that could help boost the BPO sector, still the country’s top generator of jobs.

“Those are the main areas that should be supported. We should take a look at how all the bills and policies could create jobs,” he stressed.

AmCham’s Forbes shared this view, saying there were more reform measures that need to be addressed by the next Congress, especially those that could increase the country’s competitiveness and generate employment here.

He also expressed optimism that the ratification of the Revised Kyoto Convention by the Senate last month should move the Philippines into a more modern customs regime.

“It is like building a house brick by brick to build up the structure of competitiveness in the Philippines,” Forbes stressed.

In the AmCham-organized forum, Senior Deputy Executive Secretary Joaquin Lagonera, head of the Presidential Legislative Liaison Office (PLLO), bared that the 14th Congress passed 32 major economic bills as of February 19 this year, and there were five more pending for transmission to the President.

PLLO-House Undersecretary Bernardino Sayo said the 32 new laws that specifically impact on business and economic reform include, among others, the Tourism Act of 2009, Amendments to the Customs Brokers Act, Strengthening the Regulatory Capacity of the Bureau of Food and Drugs, Extending the Agricultural Competitiveness Enhancement Fund and Magna Carta for Micro, Small and Medium Enterprises.

Likewise, Sayo said there were at least five significant measures for consideration by the President, including the Exchange of Information on Tax Matters, Agri-Agra Credit Reform Act, Tax Relief to Life Insurance Industry, Establishment of the Mindanao Development Authority (MinDa) and Establishment of National Commission on Muslim Filipinos.

“Finally, we expect the transmittal by Congress to the President of the final copies of other soon to become laws,” he said, identifying some of these as the Technology Transfer Act, Anti-Camcording Act, Disaster Risk Reduction and Management Act and the Financial Rehabilitation and Insolvency Act. -- Danielle Venz, PHILEXPORT News and Features <--back

5. Gov’t to adopt quality seal program for agri, fisheries this year

The government will start adopting this year the national quality seal (NQS) for agricultural and fishery products aimed to further foster market access of quality and safe products produced in the country.

“This is just being conceptualized at present. We are given the task to lead in the implementation of the national quality seal. We have a dry run and then full implementation this year,” said Gilberto Layese, director of the Department of Agriculture’s Bureau of Agriculture and Fisheries Product Standards (BAFPS).

Layese said firms or farms certified according to food safety and quality assurance systems either of Good Agricultural Practices (GAP), Good Aquaculture Practices (GAqP) or Hazard Analysis Critical Control Point (HACCP) depending on the commodity products, will be allowed to use the quality seal.

“Fees pertaining to the filling of application forms is free, except that you will be one to produce the seal because you put this on your boxes and your products. So no cost at all, that’s the help of the government in promoting this (NQS program),” he said.

Under the administrative order no. 22, the Department of Agriculture Secretary or his duty designated representative shall approve the application and issue the corresponding authority for the use of the NQS.

This after thorough evaluation of the Certification Committee and the department finds that the applicant conforms to an established Philippine National Standard (PNS) for that specific commodity or in its absence to an internationally existing standard, meets other requirements of the license to use the NQS.

Layese said the stamping of quality seals on agricultural produce was pioneered in ASEAN by Thailand that has successfully marketed their farm products through its “Q” mark.

Malaysia has also started to adopt the same practice through its campaign slogan for quality foods dubbed as "Malaysia’s Best,” he said.

“If you can see the mark, it gives you confidence that the product is produced hygienically and meets the high standards on product safety and quality,” he noted.

Apart from the NQS program, Layese bared that his bureau is working on the promotion of organic agriculture in the country.

He said the DA serves as an accreditation body that certifies a non-governmental organization to undertake the accreditation.

Layese said they are working out that the certification body will be internationally-recognized especially in Europe and United States.

“If our certification will be recognized internationally, then the cost of certification will be much lower. If our certifying body will be recognized, there is no more associated cost of bringing over to the country a foreign-certified. But it takes a lot of years of work because you have to maintain the integrity of your certification,” he explained. -- Danielle Venz, PHILEXPORT News and Features <--back

6. Updating of school curriculum per industry needs crucial to address skills-jobs mismatch

With around half a million graduates hoping to join the country’s labor force this year, a business group is continuously working closely with the academic institutions in updating their curriculum based on the emerging needs of the industry.

Donald Dee, treasurer of the Philippine Chamber of Commerce and Industry (PCCI), said job hiring especially for fresh graduates needs to be increased.

“Actually, the economy has more than a million available jobs, but the hiring absorptive capacity is low because the educational system has not upgraded itself towards what is the need of the industry. That is why, the effort of the PCCI is really working with the academic institutions now to adopt change in the school curriculum,” Dee said.

He estimated that 60 percent of yearly graduates either work in the informal sector or become unemployed because they took up college courses that are not based on the demand of the industry.

Dee particularly cited the business process outsourcing (BPO) industry needing half a million workers, but only able to hire less than 100,000 out of two million applicants.

He said most job applicants lack English communication and Mathematical skills required by the sector.

“If we now put emphasis in electives of colleges and universities especially towards these competencies, the hiring rate will go up. And you have to look longer term –-what industries would be sunrise in the next 10 years, that’s important now,” added Dee, a member of the Presidential Coordinating Task Force on Education (PCTFE) representing the industry sector.

The PCTFE is implementing a program called School to Office Response to Employment (SORE) designed mainly to address the jobs and skills mismatch. Apart from the BPO, Dee earlier said other courses for high-demand jobs were sciences, engineering, hotel and restaurant management, shipbuilding, electronics, healthcare, retail trade, manufacturing engineering and maritime engineering.

Ambassador Dee, also Special Envoy for International Trade, said the PCTFE program is especially relevant as increased job creation is expected amid the recovery of the economy.

He based his optimism on the bottoming out of the United States economy and the positive growth of the manufacturing sector posted for the last two months.

“If growth continues even at a slow pace, there will be jobs created. And if the next administration will continue to put more money in infrastructure development, then the economy will be able to generate the necessary jobs,” Dee said. -- Danielle Venz, PHILEXPORT News and Features <--back