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Des Ferriols
Philippine Star

Fiscal stimulus plans would do little to boost the country’s economic momentum as monetary tightening starts to take its toll on consumer spending.

Moody’s Investor Services said yesterday the country’s industrial output would slow down in the last months of the year, tracking the general manufacturing slowdown in the region.

Moody’s said that as a whole, Asia’s export growth would further moderate in the last quarter of this year and it would result in the slowing of manufacturing output.

The Philippines, in particular, would be affected by the weakening demand for electronics especially as the global economy continued to lose steam due to the crisis in the financial market.

Moreover, Moody’s said domestic consumption had already begun to ease amid rising unemployment and falling asset prices.

“The recent government stimulus plans will not immediately boost Asian exports and industrial production,” Moody’s said.

The rating agency expects a slowdown in exports in Japan and Hong Kong while Taiwan and the Philippines would likely show sluggish industrial output growth.

In general, Moody’s said Asia’s export outlook is far from optimistic, with outbound shipments expected to further moderate in the last quarter of this year.

“The major buyers of Asian products — the US and Europe — have entered an economic downturn, and there are no signs of a recovery as yet,” Moody’s said. “This will lead businesses to put investment plans on hold, reducing orders for capital goods.”

Moreover, Moody’s said the demand for commodities would ease, as construction lost steam in major economies around the world. The recent decline in commodity prices also caused further damage to Asian economies that were dependent on income from exporting resources.

On the other hand, demand for electronic products was weak in recent months. Moody’s said the global economy has slowed, prompting businesses and households to cut back on discretionary spending.

This particular development would hurt the Philippines where electronic consistently accounted for over 75 percent of total exports.

“Softening global demand for electronic products hurts most Asian economies, as Asian manufacturers are tech specialists, with Japan and Korea covering the high end of the market, while the lower end is shared amongst the ASEAN producers,” Moody’s said.

Amid slowing exports, Moody’s said the country’s industrial production is bound to moderate along with the rest of the region. Although solid domestic demand partly offset external weakness in the first three months of the year, household and business spending showed signs of fatigue in the second quarter.

Moody’s said the previous bout of monetary tightening has already taken its toll on domestic consumption as higher borrowing costs drag on demand.

Several Asian governments have recently announced fiscal stimulus plans in an attempt to bolster the economy but Moody’s said such policies would be insufficient to significantly revive demand.

“The key to a global recovery is for the US—the world’s largest economy—to arrest its downward spiral,” Moody’s said. “This will not happen until at least mid-2009, which means that export orders received by Asia will continue to slide in coming months.”

But an upward trend—for both outbound shipments and industrial production—should emerge in the second half of next year, when economic prospects improve around the world.

Manila Times

STATE-RUN Sugar Regulatory Administration (SRA) has realigned its production target for the current crop year due to the low domestic supply of the commodity in the country.

Rafael L. Coscolluela, SRA administrator said the agency sees only 2.8 million metric tons of sugar output from the original 2.3 million metric tons for the crop year 2007-08. He said the revised projection is still higher than the last period of 2.23 million metric tons.

Coscolluela said the recently released sugar allocations may be reassessed depending on the weather situation in the next months.

He also said that refined sugar production in Negros Island resumed last week, resulting in lower retail prices of the commodity.

Citing the zero output in October 18, Coscolluela said refined sugar production as of Wednesday last week reached 3,862 metric tons, adding that withdrawal also dropped to 16,759 metric tons from 18,041 previously.

“Industry wide speculation said that due to stoppage of technical smuggling, it resulted to tightness of supply because there was higher demand for sugar in [the] local market,” he said.

–Chino S. Leyco

Chino S. Leyco
Manila Times

DESPITE a prolonged drought, the Philippine farm output, which accounts for a fifth of the country’s economy, grew faster in the third quarter, the Department of Agriculture reported Wednesday.

In a briefing, Agriculture Secretary Arthur C. Yap said that in the July to September period the farm sector expanded by 5.39 percent, faster than last year’s same-period growth of 4.08 percent, as well as this year’s first and second quarter growth of 3.3 percent and 4.09 percent, respectively.

“If the weather holds, we are comfortable of hitting our initial target of 4.5 to 5 percent growth this year. A lot of the expansion was due to our quick and decisive action on the dry spell,” Yap told reporters.

The Bureau of Agriculture Statistic said that for the first nine months growth however slowed to 4.3 percent from last year’s 4.81 percent.

Rolando T. Dy, executive director of the Center for Food and Agribusiness at the University of Asia and the Pacific, said the figures were surprising.

Dy earlier forecast the sector’s growth to range from 3 percent to 4 percent in the third quarter.

“But I don’t think this will be sustained in the last quarter,” he said, adding the sector would grow by only 2 percent in the final three months of the year.

In the third quarter alone, the fishery sub sector remained the driver, growing 9.75 percent and contributing 26.35 percent of total production.

The crops sub sector expanded by 6.25 percent, and contributed 46.77 percent to the total.

The livestock and poultry sub sectors recovered during the period but still lagged behind other segments. Livestock inched up 1.13 percent while poultry hardly improved.

Yap said that by the end of the year, the agency targets that the country will be 90 percent self-sufficient in rice, and 87 percent to 88 percent self-sufficient in corn.

“Depending on how the weather [turns out], we’ll achieve at least 16 million metric tons of rice output this year,” he said.

Yap assured that there will be ample supply of chicken and vegetables for the upcoming holidays.

“We have 43 million kilos of chicken until the end of the year,” he said.

Manila Standard

Farm output grew 4.3 percent in the first nine months of the year, offsetting a dry spell earlier this year.

“It all depends on the weather. For now, we are comfortable in hitting the 4.5-percent growth for the year. If the weather holds, we’ll hit our target,” Agriculture Secretary Arthur Yap told a press briefing yesterday.

Agricultural production in the third quarter rose 5.39 percent, up from 4.08 percent year-on-year.

Agriculture, which accounts for about a fifth of domestic economic output, saw all its sectors go up despite a lengthy dry spell, which affected Luzon.

The crops sector, which mainly covers the staples rice and corn and which counts for about 46.77 percent of agricultural production, rose by 4.17 percent from January to September, the agriculture department said in a statement.

The fishery sector, which accounts for 26.3 percent of total agricultural production, led the growth in agriculture, rising by 7.92 percent, the department added.

Livestock rose by 2.06 percent while the poultry sector went up by 0.4 percent, the department added.

The economy grew by 7.3 percent in the first half of 2007. The government is targetting full-year growth of 6.1 to 6.7 percent.

Third-quarter economic growth data will be released later this month.

Data from the Bureau of Agricultural Statistics show that crop output in the third quarter alone grew 6.25 percent year-on-year from 5.06 percent. Palay output went up 4.68 percent to 3.15 million metric tons from 3 million MT last year while corn rose significantly by 13.96 percent to 2.54 million MT from 2.23 million tons.

Livestock inched up 1.13 percent while poultry grew 0.79 percent. Fisheries production rose 10.85 percent.

Yap said the growth in the farm output in the first nine months of the year would enable it to expand by about 5 percent for the whole of 2007.

Farm gate prices went up 2.35 percent with poultry recording the biggest price increase of 6.01 percent; fisheries, 2.47 percent; livestock, 2.27 percent; and crops, 1.96 percent.

Yap ordered the implementation of a quick turn around program from August to Sept. 15 this year, mostly in the drought-free rice-producing areas of Mindanao, to address the dry spell.

The agriculture department also provided hybrid seeds to rice farmers to increase production.

Rice production rose 4.7 percent in the third quarter compared with a year earlier as the government increased subsidies for higher-yielding seeds.

Output of unmilled rice rose to 3.1 million metric tons in the three months ended Sept. 30, after gaining 4.4 percent in the previous three months, Yap said. Production in the year to September increased 3.5 percent to 9.9 million tons, he said.

Increased production may help boost stockpiles, allowing the government to cap imports of milled rice at 1.9 million tons, National Food Authority Deputy Administrator Vic Jarina said on Nov. 13. That compares with 1.65 million tons bought last year.

The government’s target of expanding production of unmilled rice to 16 million tons this year from 15.3 million tons last year “is achievable at this point, assuming the weather cooperates,” Yap said.

Othel V. Campos, AFP and Bloomberg

Chino S. Leyco
Manila Times

DESPITE a prolonged drought, the Philippine farm output, which accounts for a fifth of the country’s economy, grew faster in the third quarter, the Department of Agriculture reported Wednesday.

In a briefing, Agriculture Secretary Arthur C. Yap said that in the July to September period the farm sector expanded by 5.39 percent, faster than last year’s same-period growth of 4.08 percent, as well as this year’s first and second quarter growth of 3.3 percent and 4.09 percent, respectively.

“If the weather holds, we are comfortable of hitting our initial target of 4.5 to 5 percent growth this year. A lot of the expansion was due to our quick and decisive action on the dry spell,” Yap told reporters.

The Bureau of Agriculture Statistic said that for the first nine months growth however slowed to 4.3 percent from last year’s 4.81 percent.

Rolando T. Dy, executive director of the Center for Food and Agribusiness at the University of Asia and the Pacific, said the figures were surprising.

Dy earlier forecast the sector’s growth to range from 3 percent to 4 percent in the third quarter.

“But I don’t think this will be sustained in the last quarter,” he said, adding the sector would grow by only 2 percent in the final three months of the year.

In the third quarter alone, the fishery sub sector remained the driver, growing 9.75 percent and contributing 26.35 percent of total production.

The crops sub sector expanded by 6.25 percent, and contributed 46.77 percent to the total.

The livestock and poultry sub sectors recovered during the period but still lagged behind other segments. Livestock inched up 1.13 percent while poultry hardly improved.

Yap said that by the end of the year, the agency targets that the country will be 90 percent self-sufficient in rice, and 87 percent to 88 percent self-sufficient in corn.

“Depending on how the weather [turns out], we’ll achieve at least 16 million metric tons of rice output this year,” he said.

Yap assured that there will be ample supply of chicken and vegetables for the upcoming holidays.

“We have 43 million kilos of chicken until the end of the year,” he said.

Othel V. Campos
Manila Standard

Rice and corn production rose significantly in the first nine months of the year after recovering from an extended dry spell, Agriculture Secretary Arthur Yap said.

“You will be pleasantly surprised. Suffice it to say that production is up for both rice and corn. We’ll release the exact figures next week,” Yap said.

“The estimated crop losses on rice of 200,000 tons [due to dry spell] were already addressed this third quarter. We are positive we will hit the target before year-end,” said GMA-Rice Program director Frisco Malabanan.

Malabanan said the government had maintained its target of 16.2 million tons for 2007 rice output.

On the other hand, corn production may also reach its full-year target of 6.7 million tons at year-end. Second semester output is expected to hit 4.018 million tons.

Palay or paddy rice grew 2.88 percent in the first semester from 8.39 percent a year ago while corn posted a 5.59 percent growth from 32 percent.

Overall crops growth was at 2.63 percent from 6.16 last year.

Crops accounted for 46.95 percent of the semester’s agricultural output. First semester farm output grew 3.55 percent, slightly lower than the 5.24 percent growth registered a year ago despite threat of drought.

Meanwhile, the government has mandated the importation of rice and corn in separate tranches to address shortage concerns.

The government brought in 1.89 tons of rice for the year. It earlier allowed the importation of about 1.61 million tons of rice as standby inventory for the lean months while 260,000 MT were brought in September as standby volume for next year.

The National Food Authority said the September importation could be the last for the year, unless calamities hit the country for the remainder of the year.

Corn importation totaled 120,000 tons, so far. The government is yet to reschedule a failed tender last month to include not only the 70,000 tons of corn but also the additional 200,000 tons.

Othel V. Campos
Manila Standard

The Department of Agriculture has approved the request of the corn industry to import an additional 200,000 metric tons due to a supply shortage.

GMA-Corn Program director Dennis Araullo said the Inter-Agency Committee on Rice and Corn had given the go-signal to import more corn, adding that “it is now up to the National Food Authority to schedule a tender.”

The industry earlier filed a petition to include the 200,000 tons in the tender for the 70,000 tons of corn.

Earlier, the NFA said it might reschedule the failed tender for 70,000 tons of yellow corn by the third week of November to accommodate the additional 200,000 tons of corn.

The NFA aborted the October tender for the 70,000 tons of corn after traders withdrew from the proceedings due to high world prices. The first batch of 70,000 tons is expected to arrive before the end of December. The second shipment of 200,000 tons of corn is expected to be delivered by February 2008.

Initial estimates show that the price of imported corn will reach P15.70 per kilogram. Price of domestic corn is now down to P11.50 a kilo from P13.40 a kilo two weeks ago, said Araullo.

End-users said the industry was in a tight situation and wanted an assurance of enough supply of yellow corn at least until Christmas.

The industry has claimed a shortfall in corn production of around 1.6 million to 1.8 million tons while the government maintained a shortage of only around 500,000 tons.

Based on the reconfigured target of the DA, the government expects corn harvest to reach 6.7 million tons of corn this year based on revised estimates of the agriculture department. Corn production is expected to hit 4.018 million tons in the second half of the year.

Manila Times

THE government has approved the petition for an additional yellow corn import this year owing to supply shortage, Agriculture Assistant Secretary Dennis B. Araullo said Wednesday.

He added that the agency has also granted the industry’s request to combine the two separate tranches of 70,000 metric tons and the new 200,000 metric tons in one tender.

“The only thing we’re studying now is the time of arrival of these imports,” Araullo said in a telephone interview.

The slated arrival of the imported corn is January to early February next year, he said. The National Food Authority, on the other hand, said it will likely reschedule the combine tender in the third week of November.

However, Araullo expressed fear the auction might yet again fail such as “what happened to the 70,000 metric tons that we auctioned last month” when traders called off the proceedings because of the high prices in the international market.

“It might fail again because the price of corn today is still high,” he said.

Eleanor Miranda of the Philippine Association of Feed Millers affirmed Araullo’s projection, saying “we might fail again [because] our monitoring shows the price of corn now is at $310 per metric ton from $305 during our last bidding.”

Miranda added that his group’s feedstock is good only for two months, when “normally, we have stocks good for three months.”

The 70,000 metric tons were originally expected to arrive before the end of December and the 200,000 metric tons by January to February next year.

–Chino S. Leyco

Roderick T. dela Cruz
Manila Standard

International visitor arrivals to the Philippines rose 10.3 percent year-on-year in September, marking the fourth straight month of double-digit growth, which put the country closer to its goal of attracting a record three million foreign tourists in 2007.

Tourism Secretary Joseph Durano said the country was on its way to posting the record arrival figure this year, despite the Makati blast on October 19, which police officials linked to an accidental underground gas explosion at the Glorietta mall.

Data from the Tourism Research and Statistics Division showed that there were 212,415 foreign arrivals in September, up by nearly 20,000 or 10.3 percent from a year ago.

This followed a similar 10.3 percent increase in August, 11.6 percent in July and 10.9 percent in June.

Total arrivals in the first nine months hit 2.266 million, up 8.6 percent from 2.086 million recorded during the same period in 2006.

This means the country needs to attract 734,000 foreign tourists in the fourth quarter, or 245,000 each month in the remaining months of 2007, to achieve the three-million target.

Industry players said the target is achievable as the fourth quarter is historically considered a peak season for the tourism industry.

The Department of Tourism was actually aiming for 3.1 million arrivals this year, but Durano said the agency was setting its sights at the three million benchmark at the moment.

He said the influx of three million foreign tourists was expected to generate a record $4 billion for the economy this year.

Korea maintained its position as the largest source of foreign tourists, accounting for nearly 21 percent of the total in the nine-month period.

Arrivals from Korea grew 16.3 percent to 472,711. The Department of Tourism expects the figure to hit 650,000 by December.

Visitors from the United States, including Filipino holders of American passports, increased 2.1 percent to 433,425 for a 19.1 share of the total.

Arrivals from Japan fell 7 percent to 303,420, but this was offset by a 15.8 percent increase in visitors from China at 113,593.

Other top origins of foreign guests in the Philippines were Taiwan, Hong Kong, Australia, Singapore, Canada, United Kingdom, Malaysia and Germany.

Durano said tourism receipts had grown 20 percent to 30 percent annually over the past three years because of the combination of high-spending European tourists and long-staying Korean guests.

He said due to increased visitor arrivals, the tourism sector generated more than one million jobs over the past three years, on top of the two million existing jobs.

Othel V. Campos
Manila Standard

The philippines plans to renew its bilateral fishing agreement with Indonesia to boost the fisheries sector, the Bureau of Fisheries and Aquatic Resources said yesterday.

Bureau director Malcolm Sarmiento Jr. said a Philippine delegation would meet with Indonesian officials in Jakarta on Nov. 22 to discuss the fishing pact.

Sarmiento said the new agreement would result in additional tuna production of between 80,000 metric tons and 100,000 MT a year.

The Philippines’ fishing pact with Indonesia was extended for one year after expiring in December 2005. The two countries scheduled a meeting in Manila in September but both sides called it off.

Sarmiento earlier said the bureau was also interested in getting fishing access to Papua New Guinea and Palau to increase Philippine tuna production.

“We’ve sent already our proposal to PNG [Papua New Guinea] and Palau last week, actually this is just a follow-up. However, we have yet to receive their response,” Sarmiento said.

The Philippines is also seeking for joint research on marine, aquaculture operations, exchange of experts and environmental protection with other countries.

Fisheries production in the Philippines rose to about 956,500 MT in the third quarter, up by about 10.10 percent from 947,185 MT a year ago.

Tuna production, meanwhile, is expected to hit 300,000 to 400,000 tons this year.

The industry is projected to produce 5.34 million MT next year from a goal of 4.9 million MT this year.

The sector accounted for 23.68 percent of total agricultural output in the third quarter of the year.

Data from the Bureau of Agricultural Statistics showed the fisheries sector generated P163.4 billion in revenues in 2006.

The Philippines ranks eighth among the top 10 fish-producing countries in the world with current production this year at 4.16 million MT.