Making Scientists look

growth for biofuels

work for in brew waste
the poor
Page 6
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P20
March 7 - 13 2011 Email:businessmatters@hotmail.ph Vol. IV No 0041

IMF sees PPPs MMDA made preparations

for a possible big quake
as job creators
By Lito U. Gagni
FORMER Metropolitan Manila Development chairman Bayani
Fernando said the agency had initiated measures to prepare for the 18
scenarios generated by the Earthquake Impact Reduction Study for
Metro Manila (MMEIRS) in 2004.
Fernando, in an interview with Business Matters, said the MMDA
The International Monetary Fund Going forward, they emphasized the pace of debt reduction. had established equipment zones in several key areas of Metro Manila
(IMF) is all praises for the Aquino the need to monitor key sources of Directors noted that achieving as part of the preparations to minimize casualties in the aftermath of a
administration’s PPPs or public- vulnerability closely, particularly the deficit targets and increasing major earthquake.
private partnerships The former Marikina mayor said the MMDA placed container
seeing them as vans in these zones and filled them with shovels, picks, crowbars and
job creators and even inflators that can lift heavy concrete beams. The equipment would
productivity agents. allow collapsed structure rescues and also shoreup damaged buildings
In its March and residences preventing further collapse.
2 report on the In 2004, the MMDA together with the the Philippine Institute of
Philippiness Volcanology and Seismology (PHIVOLCS) and the Japan International
economic outlook, Cooperation Agency (JICA) conducted studies on the damage Metro
the IMF also said Manila would sustain if there was a major earthquake.
that the country’s The worst scenario included a 7.2 magnitude earthquake with an
potential growth epicenter near the 30 kilomter-long Marikina West Valley Fault.
could rise with the The MMEIRS estimates that at least 34,000 people will die and
implementation of communication lines and utilities in Metro Manila will sustain extensive
the PPP projects. damage.
ThePPPprojects The first hour after the earthquake will also see 114,000 injuries
that the Aquino mostly from collapsed houses and buildings and those hit by debris
administration falling from mid-rise and high-rise buildings.
want to implement The report said, “approximately 40% of the total number of
is expected to residential buildings within Metropolitan Manila will collapse or be
further improve the affected..... Moreover, additional 18,000 deaths are anticipated by the
growth outlook of fire spreading after the earthquake event. This human loss, together
five percent for the with properties and economy losses of Metropolitan Manila will be a
Philippine economy. national crisis.”
IMF’s positive Aside from the projected deaths and injuries, the MMEIRS also
outlook for the said that nine areas in Metro Manila should be considered areas of high
Philippines augurs vulnerability in terms of sustaining damage during the temblor.
well for its growth The damage sustained by these nine key areas would be enough to
prospects given what separate the metropolis into four distinct areas and travel between these
is deemed as laudable areas would be limited because of damaged roads and posts that have
efforts of the Aquino fallen across the roads.
administration in These nine areas of high vulnerabililty are: Navotas Bay area;
addressing “gaps in Western Marikina City area; Manila North Port area; Eastern Pasig City
the value added tax, area; South Eastern Manila City area; Muntinlupa Laguna Bay area;
complemented by Central Manila Bay area; Mandaluyong - Makati City border area and
reforms to strengthen the North Eastern Quezon City area.
the budgetary The report pointed out that the western part of Metropolitan Manila
framework and control of the civil concentration and interest rate social and infrastructure spending will be isolated from other part of Metropolitan Manila by fire and
service wage bill.” risks,” the IMF report said. will require substantial revenue building collapse.
Also cited by the IMF team The IMF directors also efforts, including broadening the Metro Manila North and Metro Manila South will be separated by
that consulted with Philippine welcomed the planned gradual tax base and strengthening tax the building collapse and the geographical condition.
government officials, notably withdrawal of fiscal stimulus administration. They recommended The area between Mandaluyong and Makati has a high possibility
the economic managers were the and the focus on medium-term early actions to reform excise taxes, of building collapse; Moreover, Pasig River is running east-west which
banking sector’s financials. consolidation, which would create rationalize fiscal incentives, and is naturally disadvantageous in terms of separation.
“Directors noted that the space for priority investment. address gaps in the value added For east Metro Manila, all the road networks running east-west,
financial sector withstood the crises Noting the relatively high tax, complemented by reforms to which are on the fault will be broken due to the movement.
well, with banks’ capital adequacy public debt, they encouraged the Other roads running north-south near in fault areas will be difficult
(Turn to page 2) to use, due to the high number of building collapse.
ratios and improving profitability. authorities to consider accelerating

ENCASH extends help to Camalig as part of CSR focus

For 21 days last December 2010, continuous downpour triggered flash floods and landslides the help given by ENCASH and Camalig Bank
in the province of Albay. This devastated 75% of the rice fields and vegetable farms in the Foundation, he felt that he would be able to get
Municipality of Camalig, particularly in Barangays Anoling, Sua and Quirangay. Until back on his feet again. When asked whether
now, small farmers and sharecroppers in these areas have a hard time rebuilding their the help was sufficient, he responded, “Half a
farms. kilo of fertilizer is more than sufficient for half
As part of its corporate social responsibility policy,
Electronic Network Cash Tellers, Inc. (ENCASH), the
first independent ATM deployer in the Philippines,
initiated “Tabang Para sa KaBicolan Gikan sa
ENCASH asin CAMALIG BANK, (Aid for Bicolanos
from ENCASH and Camalig Bank)” a project aimed
at giving aid to 30 farmers in the three barangays of
Camalig. Together with the Camalig Bank Foundation,
the company determined that farmers would benefit
greatly from a farm support program that would help
rebuild the farms located in these three barangays. a hectare of rice field. If I use
On February 19, 2011, ENCASH representatives this judiciously, I will be able to
Patricia S. Arnedo and Odry P. Guzman, Marketing fertilize my one hectare.”
Manager and Sales Manager for Southern Luzon, In his Opening Remarks,
respectively, and Camalig Bank Foundation’s Christian Mayor Baldo expressed his
Ivan Carino implemented the program with the help of gratitude for the help extended
the Local Government Units (LGUs) by distributing by ENCASH and Camalig Bank
Triple 14 fertilizers, palay (rice) seedlings and medicines. Foundation. He said that this
This event was witnessed by Mayor Carlos Irwin Baldo, assistance will have a long-term
Jr., and Baranggay Captain Rodolfo Moyo. effect on the communities of
The recipients of these farm aids were chosen by Anoling, Sua and Quirangay.
the LGUs depending on how badly they were flooded, This project has bolstered
according to Baranggay Captain Rodolfo Moyo. ENCASH’s resolve to continue
Among these were Rolando Manrique, 47 years old, with its corporate social
and his mother. Speaking in Miraya - the local dialect responsibility geared towards
- Mr. Manrique said that since Typhoon Reming in Farmer-recipients from Camalig pose for photo after receiving farm helping communities recover from
2006, he had a hard time rebuilding his rice farm. With aids from ENCASH environmental disasters.
 2   March 7 - 13 2011

P10,000 assistance IMF (From page 2)

strengthen the budgetary framework and control of the civil service wage

for displaced OFWs

THE Overseas Workers Welfare
Administration (OWWA) said it
will provide P10,000 as financial
assistance for overseas Filipino
workers (OFWs) displaced in
strife-torn Libya as the Department
of Foreign Affairs (DFA) said that
some 9,200 Filipinos have exited
Libya, 800 of whom are now
safely back in their homes.
The latest wave of 1,290
repatriates were evacuated on
Tuesday via the Greek-owned
“MV Ionian Queen,” which was
chartered to load the Filipino
workers and their dependents
from the Libyan port city of
Benghazi for the island of Crete.
A DFA team awaits them at the
Mediterranean island and will
provide consular assistance, food
and accommodation.
The vessel has a capacity of
1,725 passengers and its captain
has instructions to admit on board
all who desired repatriation to the
Philippines.
Four days ago, some 3,000
Filipinos in and around Benghazi
airport left Benghazi in five batches
for Egypt through employer
sponsored vehicle convoys, DFA
said quoting a Teresita Trabolsi,
a long time resident and Filipino
community leader in Benghazi.
She reported that during their stay
in Benghazi airport, food was
provided by a company owned by
a son of Khadaffy.
According to the DFA,
“conditions have somewhat
normalized in Benghazi. Banks
and shops have opened and police
are back in the streets.”
In the meantime, the OWWA
said the financial assistance is a
one-time grant to each qualified
and displaced OFW and those
seeking it must present either their
passports, travel document, or two
valid ID cards with pictures.
To qualify for the financial
grant, they will be required
to show proof of travel from
conflict-stricken countries and
that their names are included in
the list of repatriates maintained
by the Department of Foreign
Affairs, Department of Labor and
Employment, or the OWWA.
Earlier, the OWWA Board
issued Board Resolution No. 05
providing for a one-time financial
assistance to displaced OFWs due
to political conflict and natural
calamities in host countries.
A budget of P100 million has
been allocated for the assistance
program which is now available at
OWWA regional welfare offices
in 17 regions.
Apart from the financial
relief assistance, the National
Reintegration Center for OFWs
(NRCO) has readied a package
of assistance that includes
psycho-social counseling, skills
training and upgrading, referral
and placement assistance for
local and overseas employment,
entrepreneurial and management
training, and business loan which
the NRCO and the OWWA are
coordinating with state financial
institutions Land Bank of the
Philippines and Development
Bank of the Philippines. (PNA)
bill.
Directors stressed that promoting private investment and addressing
impediments to job creation and productivity are crucial for raising potential
growth. They agreed that the public-private partnership program can play an
important part in this regard, and encourage careful evaluation of projects
that takes appropriate account of fiscal risks.
Directors also welcomed the preparation of the Medium-Term
Philippine Development Plan, and ongoing efforts to improve the business
climate and infrastructure, and to deepen capital markets.
After slowing during the global financial crisis, economic growth
recovered strongly during the 2010. The recovery has been helped by
supportive macroeconomic policies as well as strong private demand.
The smooth transition to a new Administration in July 2010 and the
government’s focus on improving governance have strengthened investor
confidence.
The external surplus continued to grow in 2010, underpinned by both the
current and financial account. Financial conditions remain accommodative,
partly reflecting external inflows, although asset bubbles have not been a
concern so far. Notwithstanding the strong recovery, fiscal revenue fell short
of budget targets in January-September.
The near-term look is generally positive. Growth reached 7.3 percent in
2010 and is projected to moderate in 2011 to a still robust 5 percent. Inflation
has been moderate and inflation expectations well anchored, although
pressures may start to build during the coming quarters as demand closes in
on the economy’s supply potential.
The balance of payments is projected to remain in surplus as
remittances and export diversification support the current account balance
and the Philippines continues to attract capital inflows, which may be largely
structural in nature.
Risks to the outlook are broadly balanced. The positive economic
sentiment in the country may boost private investment more than expected.
However, renewed shocks to global growth and financial markets would
affect Philippine exports and remittances.
Monetary policy responded well to the crisis and has helped foster the
recovery. A 200-basis-point cut in policy rates during the December 2008 –

SMEs called to enlist with PSE

July 2009, and additional crisis-related liquidity support measures, helped
to cushion the economy against the downturn. With the recovery underway,
the Bangko Sentral ng Pilipinas (BSP) appropriately started to unwind its
liquidity support measures since early 2010. In July, it extended through
2014 the 3-5 percent inflation target for 2011.
THE state-owned Development Bank of the Philippines (DBP) and the
Philippine Stock Exchange, Inc. (PSE) urged small-and-medium enterprises
(SMEs) to join the stock market to improve their competitiveness and financial
capability.
DBP Chairman Jose Nuñez Jr. said they are committed to continue
supporting the SME sector through the bank’s credit facilities.
“But as a development financial institution, the DBP has also the mandate
to develop innovative financing facilities for the SME sector other than banking
intermediation and to facilitate the development of the domestic capital market
in general,” he said.
He added that they aim to capitalize funding for SMEs in the capital market
in order to address the chronic lack of long-term credit.
Relatively, DBP President and chief executive officer Francisco F. Del
Rosario Jr. said the partnership with PSE “provides a practical way of creating
a support environment for small entrepreneurs."
“Behind this effort to embark on the public listing of SMEs is a serious
drive to enhance their competitiveness, and financial capability,” he said.
The DBP chief said they have “consistently explored ways of extending
much-needed support to the SME sector of society by combining credit and
non-credit assistance” under the program, dubbed Sustainable Entrepreneurship
Enhancement and Development Program (SEED).
“The DBP-SEED Program gives access to credit facilities, while fast-
tracking the credit process. Through the program, we hope to bring SMEs to the
mainstream of banking by implementing alternative ways of securing MSME
loans, while, at the same time, allowing DBP to maximize its lending reach and UN Resident Coordinator to the Philippines Dr. Jacqueline Badcock (2nd from right)
help create employment and income opportunities,” he added. leads UN officials at a forum for Philippine legislators designed to encourage them
PSE president Hans Sicat said that with DBP as its partner, the PSE to fulfill their roles in ensuring that Millennium Development Goals (MDGs) are met
continues to support the growth of SMEs towards the development of a bigger in 2015. Shown with her at the Sulo Hotel forum are: (from left) Mr. Minar Pimple, UN
and brighter capital market. “This activity will fulfil mutual goals for both Millennium Campaign Regional Director; Ms. Layla Saad, partnership and advocacy
our institutions to promote the stock market and also increase awareness on adviser for the MDG Achievement Fund (MDG-F); Ilocos Norte 2nd Dist. Rep. Imelda
alternative financing.” R. Marcos; and House Deputy Speaker for Luzon Rep. Crispin Remulla. (PNA)

UCPB net income up 44 percent BSP hikes capital

A rise in loans and investments
along with lower fund cost enabled
United Coconut Planters Bank
to surpass by 44 percent its 2009
net income and exceeded its 2010
target after it registered a P2.39-
billion unaudited net income last
year.
The bank’s 2009 net income
stood at P1.66 billion while last
year’s income target was P2.2
billion.
“Higher loan and investment
volumes, better margins, hefty
trading gains and lower fund cost
propelled last year’s earnings
growth,” UCPB executive vice
president and chief finance officer
Cesar Rubio said.
The bank officer said their
loan portfolio last year grew by
16 percent to P54.77 billion while
trading and investment securities
rose by 14 percent to P50.07
billion.
He said the rise in these
businesses was spurred by the 11-
percent growth in margins and
allowed the bank to post an interest
income amounting to P7.83 billion,
15 percent higher year-on-year.
Also, the banks non-interest
income grew by 32 percent to
P2.22 billion on account of the
large jump in trading profits.
Rubio traced the bank’s ability
to increase its loan and investment
portfolio to the steady growth in
deposits, which grew 16 percent
year-on-year to P148.57 billion.
He said bulk or two-thirds of
the deposits was comprised of low-
cost current and savings account,
which is the reason the bank
was able to have lower interest
expense.
The bank’s total assets reached
P178.13 billion as of last year and
this is a nine-percent jump over the
P162.81 billion in end-2009.
Total capital amounted to
P14.30 billion during the same
period and an expansion of 15
percent from year-ago’s P12.45
billion.
“We’re starting to reap the
benefits from the upgrade of our
branch network that we pursued in
earnest last year as part of our re-
branding program,” Rubio said.
Last year, 60 of the bank’s
branches were renovated to
increase market visibility and
enhance customer experience
while 18 others were relocated to
prime areas.
Also, five new branches were
opened to bring the total to 183
nationwide.
“Our re-branding program has
done wonders for our public image.
We’re attracting more customers
because of the fresh look of our
branches, better products and
improved customer service due
to an upgrade of our automated
systems as well as streamlined
processes,” Rubio said.
The UCPB executive said
their re-branding program was
also meant to highlight their staff’s
capabilities citing that “key to the
success of our re-branding effort lies
in how well our people internalize
and exhibit the brand behavior
that we want our customers to
experience.”
“(This) is why we continue to
invest in comprehensive training
workshops on leadership, sales
process management and customer
brand experience management,”
he added. (PNA)
for thrift banks
THE Monetary Board (MB), the policy-making body of the Bangko
Sentral ng Pilipinas (BSP), approved the increase in the minimum capital
requirement for thrift banks (TBs) following the recently approved
increase in the minimum capital requirement for rural banks (RBs) to
further strengthen the Philippine banking system.
TBs are required to meet the minimum capital requirements, depending
on the location of their head office, as follows: Metro Manila, from P325
million to P1 billion; Cities of Cebu and Davao, from P52 million to P500
million; and all other areas, from P52 million to P250 million.
Similar to the hike in the minimum capital requirement for RBs, the
new minimum capital requirement for TBs shall apply only when a new
thrift bank is established; an existing bank is converted to a thrift bank; the
relocation of the head office of a TB in areas of higher classification.
In case a TB applies for the grant of special banking authorities
such as authority to engage in quasi-banking, perform trust and other
fiduciary business, establish foreign currency deposit unit/expanded
foreign currency deposit unit (FCDU/EFCDU), issue foreign letters
of credit , accept demand deposits and NOW accounts, and act as third
party securities custodian/registry, the higher of the new minimum capital
requirement at the time of the application for the grant of special banking
authority or the amount specified for the grant of such special banking
authority shall be the required minimum capital which shall be complied
with on a continuing basis.
The new minimum capital requirement for TBs aims to further boost
the capital base of the thrift banking system as well as enable new entrants
to adequately take on the risks inherent in the increasingly sophisticated
banking business and effectively compete with existing banks.
 March 7 - 13 2011 Stocks 3

BDO posts audited 2010 net income of P8.8 billion

BANCO De Oro Unibank, Inc.
(BDO) ended 2010 with an audited
net income of P8.8 billion, up 46
percent from the P6 billion it earned
a year before, and exceeding its
initial earnings guidance of P8.1
billion.
The Bank, prior to the income
release, has reported that its
consolidated resources hit the P1-
trillion mark at the end of 2010,
making it the first Philippine bank
to achieve that milestone.
BDO’s strong performance
was a result of a more diversified
and sustainable earnings stream
from its core lending, deposit-
taking and service businesses.
Gross customer loans expanded 15
percent to P541.5 billion with firm
growth across all business segments.
Total deposits, meanwhile, rose 13
percent to P782.6 billion. A larger
earning asset base coupled with
lower funding costs resulted in the
12-percent increase in net interest
income to P34.2 billion. The
Bank’s fee-based service
income likewise grew to P10.4
billion on strong contributions from
trust, private banking, remittance,
transaction banking, insurance,
investment banking, and credit
cards.
BDO continued efforts to
prudently manage the balance sheet
to protect it through economic
cycles. It boosted provisions to P6.7
billion and raised nonperforming
loan (NPL) coverage to 92 percent
from 80 percent a year ago,
despite the decline in the gross
NPL ratio to 4.7 percent from the
previous year’s level of 5 percent.
Capital Adequacy Ratio
(CAR) remained sound at 14
percent, well above the current
regulatory minimum of 10
percent.
Return on average
Common Equity improved to
11.7 percent in 2010 compared to
10.4 percent in 2009. Following
its solid financial performance
in 2010, the Bank hopes to build
on its gains to pursue further
growth opportunities to enhance
shareholder value.

PNOC EC declares dividends Vista Land obtains

amounting to P3.003 Billion
PNOC Exploration Corporation, the upstream petroleum and coal arm of the state-owned Philippine National Oil
Company declares dividends amounting to P 3.003 billion, as a result of its accumulated earnings as of December 2010.
Moreover, the Company’s unaudited net income for 2010 is
higher than the company’s net income of P1.8 billion last
P2.420 billion, which is 34%
2009.
This is PNOC EC’s first dividend declaration for 2011, at P 1.50 per share to
stockholders of record as of
March 31, 2011 and to be
paid on April 11, 2011. Of the
total P3.003 billion, P2.997
billion will be paid to the
national government, with
the remaining P6 million
paid to public stockholders.
PNOC EC’s shares of stock
are 99.79% owned by the
Philippine government
through PNOC.
The company’s P2.420
billion unaudited net income in 2010
can be attributed to the increased gas
and condensate prices, coal sales and
bunkering services rendered for the
year.
As PNOC EC celebrates its 35th
anniversary in the industry, PNOC EC
reaffirms its commitment of exploring
and harnessing indigenous energy
resources to provide a stable energy
Puhagan geothermal plant Valencia Negros Oriental supply for the country.
PHP500 million
funding from
Security Bank
Publicly-listed Vista
Land and Lifescapes, Inc., the
country’s largest homebuilder,
recently signed an agreement for
a P500 million credit facility with
Security Bank Corporation.
The loan has a maturity
of three years and will be used
mainly to finance the property
developer’s aggressive expansion
program in key cities and
provinces for its housing segment
as well as tapping new markets
for its recently launched mid-
rise building projects. Vista Land
spent more than P10 billion for
capital expenditures in 2010 and
is expected to increase its capex
program this year.
Vista Land Chief Executive
Officer Ms. Benjamarie Therese
Serrano said that: “Vista Land
our business relationship in the
coming years.”
Spurred by continued robust
demand in the property sector,
Vista Land recently announced
plans to launch seven mid-rise
buildings within the first quarter
in key areas such as New Manila,
Cubao, Fairview, Taguig, Pasig,
Sucat, and Davao.
The estimated total project
value of midrise buildings slated
for launch this year is expected to
exceed 7 billion pesos.
The company, which as of
September last year had more
than 1,650 hectares of raw land,
will utilize some of its existing
land bank for these vertical
projects.
Approximately 60% of the
housing company’s sales are

Mall of Asia Complex Grows Business

appreciates the confidence and to Overseas Filipino Workers
support shown by Security Bank (OFWs), and demand from
in extending this loan.” OFWs continues to be strong.

Hub with SM Land’s Two E-ComCenter

SM Land, a subsidiary of
SM Investments Corporation,
sustains the growth of a
burgeoning BPO-centric
business hub in Pasay City
with the development of
TwoE-comCenter, the
second in a series of four
office buildings strategically
located within the Mall of
Asia Complex (MOAC).
Two E-com will have
approximately 68,000 sqm
of office and retail space and
will be fully operational by the
first quarter of 2012. The building
was designed by world-renowned
architectural firm Arquitectonica to
especially suit the needs of business
process outsourcing companies and
their employees that require highly
specialized technological support
systems and lifestyle services that
cater to a 24 by 7 work week.
TwoE-comCenter
of a unique twin-tower design
interconnected at its topmost
boasts
floors—a first in the Philippines. The
iconic building will also be connected
to the SM Mall of Asia. The fourth
level will contain a podium with
lush greenery and landscaping, al
fresco dining and retail areas, along
with additional office spaces. This
will be accessible from the ground
level through scenic escalators and
staircases. More retail areas will
likewise be available at the ground
floor.
Developed by SM Land under
its Commercial Properties Group,
the modern E-com buildings are
strategically located within a complex
that is just a few minutes away not only
from the Ninoy Aquino International
Airport, but also from the major
seaports North and South Harbors.
They are also highly accessible to mass
transport systems such as the LRT and
MRT, and buses that go through the
main EDSA thoroughfare.
In 2007, the OneE-comCenter
was launched and is now 98%
occupied by anchor tenants such
as BPO firms Affiliated Computer
Services (ACS), EXL, and Legispro;
shipping lines Maersk and American
President Lines (APL); and maritime
staffing firms MOF Company and
OSTE Crewing.
“Next wave” City Locations
In the past few years, the local
BPO industry has identified the trend
toward “next wave” locations, or
key areas of growth within Metro
Manila and even provincial and
regional centers, as opposed to heavy
concentration of BPO operations
within the traditional central business
districts of Makati, Ortigas and
Alabang.
SM Land is in a unique
position to leverage on this trend—
to synergize its resources within
the masterplanned Mall of Asia
Complex in Pasay City by creating
a prime destination that is highly
suited to meet the requirements of
the BPO industry,” explains David
Rafael, senior vice president of the
Commercial Properties
Group. “What we offer
within MOAC is a one-stop
location for BPO employees,
one that is safe and highly
convenient, where transport,
commercial establishments,
and residential options are
available and affordable. We
are creating an environment
that will ultimately help
BPOs grow their business
by making their employees
happy,” adds Rafael.
MOAC is owned and
managed by SM Land’s Commercial
Properties Group. Its anchor tenants
and attraction, the SM Mall of Asia
with its Manila Bay setting , and
the SMX Convention Center are
some of the top draws for tourism
and business alike. The SM Mall of
Asia is the world’s fourth largest mall
and hosts a number of pioneering
recreational facilities in the country
such as the first IMAX 3D theater
and the largest indoor skating rink.
Hospitality establishments include
the 15-story, 150-room Microtel
Inns & Suites. Not too far away
is Sea Residences, a mid-rise
condominium development by SM
Land subsidiary, SM Development
Corporation (SMDC).
A perspective of SM Land’s
TwoE-comCenter to rise within the
Mall of Asia Complex in Pasay
City. The building’s iconic design
is by global architecture firm
Arquitectonica, and features
twin-towers interconnected at
its topmost floors—a first in
the Philippines. The fourth
level will contain a podium
with lush greenery and
landscaping, al fresco dining
and retail area.
“We expect to continue The Bangko Sentral ng Pilipinas
to build a mutually beneficial (BSP) recently disclosed that
relationship with Security Bank inward remittances for 2010
through this and other commercial reached US$18.76 billion and are
transactions in the future,” she projected to grow another 8% in
added. 2011.
Security Bank’s Executive Vista Land is the holding
Vice President and Head of company of five business units
Corporate and Investment : Brittany, Crown Asia, Camella
Banking, Mr. Eduardo M. Olbes, Homes, Communities Philippines
was equally enthusiastic, stating and its condominium development
that: “We are pleased to have subsidiary, Vista Residences. The
been able to provide this credit company has the widest presence
facility to Vista Land and look in the Philippines among all the
forward to further strengthening major property developers.
SMIC elects additional
independent director
Philippine conglomerate SM Investments Corporation (SM) today
announced that the Board of Directors has elected Mr. Joseph R. Higdon
as one of the company’s three independent directors. SM’s two other
independent directors are Mr. Vicente S. Perez, Jr. and Mr. Ah Doo Lim.
Mr. Higdon was a senior vice president
of Capital Research and Management, a
Los Angeles-based international investment
management firm. He joined Capital Research
in
1974 and covered Philippine equities from
1989 to 2006. He was also a US Peace Corps
volunteer in the Philippines from 1962 to 1964.
He is presently also an independent director
of International Container Terminal Services,
Inc. and a director of the advisory board of
Coca-Cola Bottling Company, Philippines.
 4   Environment March 7 - 13 2011

Tourists welcomed Chernobyl 25 years on

at Chernobyl
IT will probably never match Bondi Beach or St.
Tropez as a holiday destination with popular appeal,
but the Ukrainian government is hoping that it can lure
adventurous travellers to Chernobyl's Exclusion Zone.
They hope visitors will pay to take officially
sanctioned tours of the area, the site of the world's worst
nuclear accident in 1986.
The resulting radioactive plume after the explosion
spread radiation across the Ukraine, Russia and Belarus.
The area worst affected by the contamination was
designated The Exclusion Zone. Also known as the
Zone of Alienation, The 30 Kilometer Zone or simply
The Zone, the area covers 30 kilometers around the site
of the plant. Following the disaster residents living in the
Exclusion Zone were forcibly evacuated and resettled
elsewhere in the Soviet Union.
Despite the health risks posed by remaining in the
region, over the years a number of residents remained or
illegally returned to their homes in the Exclusion Zone.
Many were elderly people who felt unable to rebuild
their lives away from their lifelong homes. There is also a
minority of people who chose to move into the Exclusion
Zone, and are known as samosely, self-settlers, when
challenged samosely typically disregard or even deny any
risks to human health in their adopted home.
Aside from these few, illegal, residents human
presence in the Exclusion Zone is limited to the few
workers involved in research and administration.
These workers operate on tightly controlled shifts (the
longest time being 15 days), and their health is closely
monitored.
The lack of human interference in the region has lead
some people to believe that wildlife inside the Exclusion
Zone was, paradoxically, healthier and more successful
than that in surrounding areas.
Robert Baker, of Texas Tech University claimed
on his university web page: "The elimination of human
activities such as farming, ranching, hunting and logging
are the greatest benefits. It can be said the world's worst
nuclear power plant disaster is not as destructive to
wildlife populations as are normal human activities."
Unfortunately, it seems that the disaster has had
a negative impact on the region's wildlife. Not only is
local wildlife suffering from mutations caused by the
high levels of radiation, but a study in 2007 showed that
ON April 26, 1986, at 1:23 am local time, reactor number 4 at the
Chernobyl nuclear power plant near Kiev in the Ukraine, suffered a
massive explosion to its core.
The results were catastrophic and Chernobyl remains the world's
first, and only, Level 7 nuclear event.
the bird population in the region dropped by 66 percent Within a few months 28 of the 134 severely exposed emergency
and the range of bird species dropped by more than 50 workers were to die from acute radiation syndrome and 19 more later
percent. died from different causes. The prediction is that around 4,000 will
Each year, around 6000 visitors enter the Exclusion eventually die as a result of increased cancer risk.
Zone but many of these day trips are organized illegally The fire resulting from the explosion sent a plume of radioactive
and without proper government control. fallout into the
The Emergency Situations Ministry, which atmosphere that
administers the area, plans to organize new drifted over large
official tours from January 2011. parts of the former
According the ministry, radiation Soviet Union and
levels in much of the Exclusion Zone Eastern, Western
are now at normal levels and so pose and Northern
no additional threat to visitors health. Europe. Large areas
But tourism in the area still needs to of Ukraine, Belarus
be tightly monitored as some areas are and Russia had to
still contaminated with higher levels of be evacuated and
radiation and there are risks posed from 336,000 people
collapsing buildings and other hazards in had to be resettled,
the officially uninhabited region. including everyone
Quoted in the Wall Street Journal, from the nearby city
Yulia Yurshova, spokesperson for the of Pripyat.
Emergency Situations Ministry said: "The Pripyat had
Chernobyl Zone isn't as scary as the whole originally been built
world thinks. We want to work with big to house people
tour operators and attract Western tourists, working in the
from whom there's great demand." power plant and had
The project is backed by the United grown into a large
Nations Development Programme modern city with a
(UNDP). In a statement to the press, Helen young and growing
Clark, Head of the UNDP, said: “While population of nearly
significant progress has been achieved in 50,000.
giving these communities the lives they The average
had before the Chernobyl disaster, there is age was 26 and there
still work tbe done to realize full social and were 15 primary
economic recovery, and the restoration schools and 5
of livelihoods. One of the ways we can secondary schools.
support this progress is by working with There were wide streets, shopping malls and even an amusement park
these populations to overcome the psychological impacts with a giant Ferris wheel.
of this disaster by rebuilding the pride and dignity of these The day after the explosion the situation had become so critical that
communities.” orders were given for a complete evacuation of the city. The population
The regeneration of the Exclusion Zone may not was told not to take more than they could carry and they left in fleets of
be limited to inviting tourists to visit. The Emergency buses. Overnight the city became deserted and has been so ever since.
Situations Minister, Viktor Baloha, has also announced A 19-mile restriction zone still exists around the former reactor,
that they are considering building power and thermal but during the past 25 years radiation levels have fallen and it is now
energy plants in the Exclusion Zone. possible to take part in conducted tours of the deserted city.
The soil, however, remains highly radioactive, particularly in the

Seed vault celebrates third year restricted area. Since plants cannot move away, they either adapt or die
and in its usual way nature seems to be able to adapt to circumstances.
Martin Hajduch of the Slovak Acadamy of Sciences has conducted
THE Svalbard Global Seed in the Dry Areas (ICARDA). The A). Other US shipments included a series of experiments and his fellow researchers have noted that
Vault (SGSV) celebrated its third International Livestock Research seeds for important disease- plants have an unexpected ability to adapt to an environment that is
anniversary today with the arrival Institute (ILRI) in Addis Ababa, resistant varieties of spinach, contaminated by radiation.
of seeds for rare lima beans, Ethiopia is depositing forage maize and cantaloupe. The scientists grew flax seeds in radiation-contaminated soil in the
blight-resistant cantaloupe, and crops. In Arizona, a Navajo “The optimism generated Chernobyl region and compared the resulting plants with plants grown
progenitors of antioxidant-rich ceremony was held to bless seeds by the arrival of this incredible from seeds planted in non-radioactive soil.
red tomatoes from Peru and the of rare desert legumes from the bumper crop of contributions is They discovered that radiation exposure had relatively little effect
Galapagos Islands. University of Arizona before tempered by the threats that seem on the protein levels in the plants, with only about five percent of
The arrival of these they began their long journey to to emerge almost daily to seed the protein levels altered. Among these were certain proteins that are
collections, including many Svalbard. collections around the world,” involved in cell signalling, or chemical communication.
drought- and floodresistant The new accessions, which said Cary Fowler, Executive ''It is just unbelievable how quickly this ecosystem has been
varieties, comes at a time when will be added to the more Director of the Global Crop able to adapt,'' Martin Hajduch said. ''[There must be] some kind of
natural and man-made risks to than 600,000 already stored at Diversity Trust, which manages mechanism that plants already have inside them. Radioactivity has
agriculture have reinforced the Svalbard, include Agricultural the Seed Vault in partnership with always been present here on Earth, from the very early stages of our
critical need to secure the Norwegian planet's formation.''
all the world’s food crop government ''There was a lot more radioactivity on the surface back then than
varieties. and the Nordic there is now, so probably when life was evolving, these plants came
The seeds arriving G e n e t i c across radioactivity and they probably developed some mechanism that
for safekeeping in the Resources is now in them.''

Pineda wants DENR

depths of an Arctic Center in
Mountain on Norway’s Sweden.
remote Svalbard “As the

to put up more landfills

Archipelago included threats to
major deposits from agriculture
genebanks maintained escalate, the
by the Consultative importance of
Group on International crop diversity PAMPANGA Governor Lilia plans, programs and appropriate
Agricultural Research grows,” Fowler Pineda has urged Kapampangan environmental quality standards
(CGIAR), which is added. lawmakers to initiate a measure for the protection of the
the largest single A vivid that will give the Environment environment.
contributor of seeds to example of some department the responsibility The law is silent as to who
the Seed Vault. of the threats of establishing and maintaining is responsible for putting up a
Among the Beans at the Centro Internacional de Agricultura Tropical facing genebanks sanitary landfills. landfill. It is also mandated to
shipments is a (CIAT) gene bank in Colombia, which has just sent its is when unrest in Pineda said it is about time monitor the compliance of the
Peruvian desert lima latest consignments of seeds for conservation at the Egypt led to the to amend several provisions local government units on Solid
bean variety on the Global Seed Vault in Svalbard, Norway. looting of the
verge of extinction Egyptian Desert of Republic Act No. 9003, Waste Management Act.
the Ecological Solid Waste "A fourth class municipality
that was rescued by Gene Bank in Management Act of 2000 to solve in the province with its limited
the Colombia-based International Research Service-US Department North Sinai. At the Desert Gene the looming garbage problem not resources cannot put up its own
Center for Tropical Agriculture of Agriculture (USDA) donations Bank, home to a prized collection only in the province but also in sanitary landfill," she said.
(CIAT), as well as other lima of soybeans collected by USDA of fruit and medicinal plants, the entire country. Pineda also proposed
beans and relatives that grow researchers in China in the looters stole equipment, destroyed Pineda proposed to widen that the national government
in very dry or high-altitude 1920s. the facility’s cooling system, and the mandate of the Department allocate appropriate funds for the
locations. In total, CIAT’s new The USDA’s shipment also ruined data that represented more of Environment and Natural establishment of either a regional
shipments include 3,600 bean and includes seed collections of than a decade worth of research. Resources-Environmental or provincial sanitary landfill.
forage samples collected from 94 Solanum chilense and Solanum Meanwhile, the Global Crop Management Bureau (DENR- Rep. Tarzan Lazatin,
countries, including Afghanistan, galapagense, wild relatives of the Diversity Trust continues to EMB) by making it the lead agency meanwhile, acted favorably on
Nepal, Yemen, Vietnam and tomato whose genetic material fight plans to bulldoze the field responsible for the establishment the governor's proposal, saying
Zimbabwe. was used by breeders at USDA collections at Russia’s Pavlovsk of either regional or provincial he will be filing a bill in congress
Thousands of other cereal and the University of California, Experimental Station, Europe’s sanitary landfill. seeking to amend pertinent
and bean varieties are being Davis, to create tomatoes high most important collection of Under the present law, the provisions of the Republic Act
deposited by the International in lycopene (an antioxidant) and fruits and berries, to make way DENR-EMB merely formulates No. 9003. (PNA)
Center for Agricultural Research beta-carotene (a source of Vitamin for a housing development.
 March 7 - 13 2011 Health & Wellness 5
Stopping warfarin may not be needed
PATIENTS on warfarin were
frequently asked to interrupt
therapy for surgical procedures,
and up to 50 percent of these
requests were for indications not
supported by national guidelines.
This study did not investigate
whether interruption of warfarin
therapy resulted in an increased
incidence of ischemic stroke.
As a single center, cross-
sectional survey this study has
limited generalizability and may
not characterize clinical practice
at other centers.
Doctors planning minor
surgical procedures on patients
with atrial fibrillation often request
that patients stop warfarin, but
often these requests are at variance
with guidelines, researchers said
here.
As many as 50 percent of these
requests for dental procedures,
colonoscopy, or dermatologic
procedures are counter to
guidelines, said Lesli Skolarus,
MD, a clinical lecturer in neurology
at the University of Michigan, Ann
Arbor.
Skolarus, who presented the
findings at the American Stroke
Association's International Stroke
Conference, said the results of her
study were worrisome.
While she acknowledged that
the "results are very preliminary,"
she told MedPage Today, that it
Michelle Obama gets ribbed
BEYOND the Biblical
connotations, only a few times
in history has a rib given rise
to so much talk – as media
attention in the United States is
currently focused on what US
First Lady Michelle Obama has
for dinner.
Earthtimes.org reported
that Michelee Obama travelled
to Vail, Colorado, a couple of
weekends ago, accompanied
by her daughters Sasha and
Malia to make the most of a
public holiday by doing a bit of
skiing.
That weekend, they went out
for dinner at a local restaurant,
where according to the Vail
Daily the wife of US President
aBarack Obama ate "pickled
pumpkin salad with arugula and
a braised ancho-chile short rib
with hominy wild mushrooms
and sauteed kale."
Wait - Did you say rib?
It did not take long for
conservative commentators to
sharpen their knives and attack
Michelle, a staunch campaigner
for a more balanced diet in the
United States. The first lady had
ordered one of the most popular
dishes in US cuisine - but also
one of the richest in calories.
"The problem is, and dare
I say this, it doesn't look like
Michelle Obama follows her
own nutritionary (sic), dietary
advice," ultra- conservative
radio commentator Rush
Limbaugh said Monday.
"And then we hear that she's
out eating ribs at 1,500 calories
a serving with 141 grams of fat
per serving," he complained.
It mattered little that the
restaurant's chef, Kelly Linken,
noted that the dish chosen by
Michelle Obama had only 600
calories and that most of the
fat had been removed from the
meat. Or that Linken stressed
that the Obamas were on a
skiing holiday and that skiing
burns up to 6,000 calories per
day.
"I'm trying to say that our
first lady does not project the
image of women that you might
see on the cover of the Sports
Illustrated swimsuit issue,"
Limbaugh went on.
was unknown if the requests to
stop warfarin, "have resulted in
untoward events."
In her study, atrial fibrillation
patients who were on warfarin
therapy were asked to complete a
mail survey, which was designed
to assess the frequency of requests
to temporarily stop warfarin and to
determine the reasons for the those
requests.
The surveys were mailed out
in October and November 2009
to 2,133 patients who had spent at
least one year in the University of
Michigan Anticoagulation service.
In addition to gathering
demographic data, the survey asked
about vascular risk factors and
indications for taking warfarin.
Patients were also asked how
many times in the prior 12 months
they were requested to interrupt
warfarin therapy for a medical or
dental procedure or test, and the
specific indication for the requested
interruption in warfarin therapy.
Skolarus said 1,686 of the
patients responded to the survey.
Of those who responded, about 57
percent or 966 people who used
warfarin for atrial fibrillation were
available for analysis.
The mean age of atrial
fibrillation patients was 74 years
and more than half (62 percent)
were men.
Almost all were white.
This is hardly the first attack
on Michelle Obama regarding
food.
In early February, the
magazine American Spectator
pejoratively referred to her as
"America's number one food
nanny." The magazine accused
her of hypocrisy for having
praised barbecues in Charlotte
after her husband's Democratic
Party chose that city in North
Carolina to host their national
convention next year.
"Michelle Obama praising
Carolina barbecue? That's like
Gandhi praising mixed martial
arts fighting," the magazine
said.
The conservative network
Fox News has also referred to
the first lady as a "food nanny"
in the past.
The criticism goes well
beyond whether or not Michelle
Obama likes to indulge in a rib,
a barbecue or some French fries
every once in a while, as the first
lady herself knows.
As soon as she got to the
White House in January 2009,
alarmed by the extremely high
rates of child obesity in the
United States, Michelle Obama
planted a vegetable garden on the
residence grounds with the help
of young public school students.
She regularly invites them back
to harvest.
Last year, she launched
the program Let's Move, which
is "dedicated to solving the
challenge of childhood obesity
within a generation" through a
healthier, more balanced diet and
smaller portions in the country
of XXL burgers.
In fact, the figures are grim.
Nearly 30 percent of US children
are overweight and destined to
suffer diabetes or other related
health problems like high blood
pressure and cancer later in life if
they don't get their weight under
control, her website states.
Some conservative sectors,
however, regard Michelle's push
against obesity as unacceptable
government interference with
individual liberty, which they
insist should rule in the United
States.
"Instead of a government
Skolarus said there were 798
periprocedural requests to interrupt
warfarin therapy among 947
respondents. At least one request
to interrupt warfarin therapy in the
prior year was experienced by 481
of the 947 patients (51 percent).
"Fifty percent of requests
to interrupt warfarin were for
indications not supported by
guideline statements," she said.
"Despite the high risk of stroke
in patients with atrial fibrillation
and well known benefit of
anticoagulation, interruptions
in warfarin therapy are frequent
and often discordant with current
guidelines. As a result, patients
are left vulnerable to needless risk
of stroke and other thrombotic
events."
According to Daniel Lackland,
DrPH, professor of neurosciences
at the Medical University of South
Carolina, Charleston, "What may
be happening here is that doctors
are trying to err on the side of
caution in thinking about the safety
of the patient. But interrupting
warfarin therapy can expose these
patients to risk of stroke.
"This study again points
out the need for improved
communications between
specialists and primary care
physicians," Lackland, who is
a spokesperson for American
Stroke Association, told
Michelle Obama
thinking that they need to take
over and make decisions for us
according to some politician
or politician's wife's priorities,
just leave us alone," former
Republican vice presidential
candidate Sarah Palin said last
year.
"What she is telling us is
she cannot trust parents to make
decisions for their own children,
for their own families in what we
should eat," ultraconservative
darling Palin said.
Palin had her own recipe to
solve the problem.
"Get off our back, and allow
us as individuals to exercise our
own God-given rights to make
our own decisions and then our
country gets back on the right
track," she said.
Dana Milbank, a take strain off the affected body part
commentator at The Washington
Post, notes that the problem is that
"food criticism is an extension of
politics."
"On the left are the purists
who think a single tortilla chip
is an unacceptable compromise.
On the right are those who think
any nutritional recommendation
amounts to a food dictatorship,"
he said in his column.
Or, in the words of another
commentator at the Vail Daily -
which unleashed the controversy
with its report on the first lady's
dinner - "some conservative
bloggers and talk-show hosts
act like the short rib in Michelle
Obama's dinner entree was, like
Adam's, extracted from them
personally."
MedPage Today.
In Skolarus' study
population, 210 patients said
they were to stop warfarin
before undergoing dental
procedures; 153 patients were
asked to interrupt warfarin
therapy before undergoing a
colonoscopy, 158 patients were
asked to stop taking warfarin for
various surgical procedures, and
42 patients were told to suspend
their anticoagulation regimen
for dermatologic procedures.
What to do when
muscle cramps strike
YOU are sleeping and your calf
starts to twitch. The musculature
suddenly contracts and you feel a
stabbing pain.
Though calf cramps can happen
to anyone, athletes and older people
are affected more frequently. Most
muscle cramps occur after a long
period of rest or during strenuous
exercise, earthtimes.org reported in
its website.
In some cases, earthtimes.
org points out, a serious medical
condition is the cause.
"Muscle cramps could be
a sign of hypothyroidism or an
inflammation in the muscle,"
said Stephan Zierz, director of
the neurological clinic at Halle
University Hospital in central
Germany. Other muscle-damaging
disorders are also possible causes,
he added, noting, "Muscle cramps
are an ambiguous symptom."
Seeing a doctor can clear up the
cause. "If the cramps are prolonged
and become a hindrance in day-
to-day life, a medical examination
is advisable," said Zierz, who
pointed out that
muscle cramps, while
unpleasant, were
not dangerous like
epileptic seizures. Nor
do all muscle spasms
need to be treated.
Exactly how
a muscle cramp
occurs is unclear.
"Overuse can cause
over-excitation in
the spinal marrow,"
said Dieter Boening,
vice-president of the
Association of Berlin
Sports Physicians.
As he explained it,
"confusion" arising
in the nerves is
passed on to the
muscles, leading to
a rapid alternation
between contraction
and relaxation. The
sharp pain results
from motions of the muscle fibres
that stimulate surrounding pain
receptors.
"To end the contraction, the
muscle should be stretched. This
blocks the cells in the spinal marrow."
Boening said. If a cramp occurs
during an athletic activity, it helps to
immediately.
When athletes experience
muscle cramps, the cause is
often dehydration or depletion of
electrolytes, which are minerals in
the blood and other body fluids that
carry an electric charge. Circulatory
disorders, poor conditioning and
over-exertion can also disrupt muscle
metabolism and provoke cramping.
The muscles most often affected are
in the legs.
"This is because they are subject
to particular strain," Boening said,
especially the calf and arch of the
foot during walking.
Ingesting salt and isotonic
beverages can replace electrolytes
such as sodium, calcium, potassium,
chlorine, magnesium and bicarbonate
lost through sweating, Boening said.
"Current guidelines
recommend continued warfarin
therapy in patients undergoing
colonoscopy, cataract removal,
dental, and dermatologic
procedures," Skolarus said.
She suggested that educational
interventions targeting the patient,
proceduralist, and anticoagulation
manager focusing on guideline
discordant periprocedural
warfarin interruptions could have
a significant public health impact.
This helps prevent muscle cramps.
"Warming up before an athletic
activity and avoiding over-exertion
lower the risk of a strain-induced
cramp," added Ute Repschlaeger,
chairwoman of Germany's Federal
Association of Self-Employed
Physiotherapists.
To treat cramps, the musculature
is stretched - "either passively, with
massage, or actively, with exercises,"
Repschlaeger said. "This relaxes
the musculature and alleviates the
cramping," she remarked.
A long-term preventative
measure is moderate strength,
endurance and coordination
training. Practicing keeping one's
balance on unstable exercise
equipment such as a gyro disk or
wobble board helps, too. To relax
muscles, hot cataplasms and hot
baths are useful.
"The best thing to do is to
massage the muscle with a warm,
damp towel," Repschlaeger said.
She also recommended placing
a hot-water bottle on the affected
area.
When cramps are severe or
recurrent, doctors can prescribe
drugs that are used in epilepsy
therapy or have been developed in
pain research. "Traditional drugs
like aspirin and paracetamol bring
no relief," Zierz said.
Experts advise against the
use of dietary supplements such
as magnesium or calcium tablets.
Zierz said, "Taking magnesium
is effective in very few instances.
It can be useful only when there
are acute symptoms such as
heavy sweating or diarrhoea."
People who thoughtlessly turn to
preparations like these run the risk
of a dangerous overdose and, in
extreme cases, damage to the liver
or cerebellum, he warned.
In diagnosing the cause of
muscle cramps, a neurologist does
several things. He or she examines
the patient's joints, palpates the
musculature and does a blood test
to check the electrolyte level and
see if a hormonal disorder can be
ruled out. If the cause remains
unclear, antibody screening or a
muscle biopsy can be employed.
 6   March 7 - 13 2011
Following a slowdown during
the global financial crisis in 2009,
the Philippine economy roared back
in 2010, with GDP growth rates
not seen in over 30 years. On the
demand side, private consumption,
investment, and net exports were
the main drivers of growth. On the
supply side, industry and services
propelled the economy. The external
position continued to strengthen,
thanks to a consistently strong
current account and, more recently,
by improvements in the capital and
financial account. Dollar remittances
grew progressively faster throughout
2010. Labor market conditions
improved, but unemployment
remains high, contributing to
strong OFW deployment. Growth
is expected to normalize around
its potential output in 2011 as the
technical and temporary factors that
generated record growth in 2010
disappear.
In spite of the remarkable
rebound, growth continues to bypass
the poor. The latest official poverty
data confirm a lack of poverty
reduction response to economic
growth in the Philippines. Even
though real GDP growth averaged
5.4 percent during 2003-06 and 4.3
percent during 2006-09, or well
above population growth, the poverty
incidence rose from 24.9 percent of
the population in 2003 to 26.4 percent
in 2006, and inched up further to 26.5
percent in 2009. Such an inelastic
poverty response suggests that the
gains from growth have eluded the
bottom quarter of the population.
SWS surveys in 2010 paint a broadly
similar picture. A bright spot amidst
these generally depressing poverty
numbers, is that they point to some
distributional improvement within
the ranks of the poor as the poverty
gap began to decline between 2006
and 2009. The rapid expansion of
the 4Ps conditional cash transfer
program may have contributed to this
improvement and its recent scale-up
in the 2011 budget bodes well for the
fight against poverty.
In contrast to many countries in
the region, food price inflation has
been muted so far in the Philippines
and is expected to remain moderate
in 2011, though the distribution of
risks is tilted to the upside (Special
Focus #1). In the short-term, a
return of a 2008-style food crisis
in the Philippines seems unlikely,
thanks to recent strong domestic
palay production, good planting
projections, record stockpiles of
rice, and domestic retail prices
significantly above international
prices.
The Aquino government’s
steadfast focus on efficient spending
reigned in the initially spiraling
2010 budget deficit and has set the
stage for a moderate degree of fiscal
consolidation in 2011. A sharp fiscal
tightening took place in the second
half of 2010, thanks to spending
restraints in the face of modest
revenue improvements. In 2011,
fiscal consolidation will be mostly
driven by structural improvements—
the first improvement in the
structural balance in five years—as
the 2011 budget kick starts important
reforms in spending efficiency and
transparency. Now that the global
recession is largely behind us, a faster
unwinding of the fiscal stimulus
would have the advantage of lower
peso appreciation pressures, less risk
of overheating the economy and
creating inflationary pressures, more
fiscal space, and higher resiliency to
shocks for the economy.
Among its first actions in office,
the Aquino government carried out
a comprehensive assessment of
fiscal risks and published a Fiscal
Risk Statement (FRS)—(Special
Focus #2). Experience reveals that
FRSs can yield important benefits,
including lower and better-managed
risks, improved policies, and lower
financing costs. Historically, the
Philippines has been exposed to
Making growth w
considerable fiscal risks, in part
reflecting important weaknesses in
public financial management and
resulting in large fiscal costs. While
fiscal risks have abated, they still
remain sizeable in the Philippines.
To improve its risk management, the
government is pursuing a program of
institutional capacity building.
Recent Economic and Policy
Developments
The Philippine economy re-
ignited in the last quarter of 2010,
pushing annual GDP growth to rates
not seen in over 30 years. After a
brief softening of activity in the third
quarter of 2010—in which GDP
contracted by 0.8 percent quarter-
on-quarter, based on seasonally
adjusted (q/qsa),1 the Philippines
economy posted a robust growth
performance in the fourth quarter
with GDP expanding 3 percent q/
qsa (7.1 percent year-on-year). This
resulted in a 2010 annual growth
rate of 7.3 percent, the highest since
1976, and in sharp contrast with the
1.1 growth rate of 2009. Importantly,
GDP per capita grew by a strong 5.3
percent in 2010, against a contraction
of 0.9 percent in 2009 and growth of
0.1 percent on average during the
1980s and 1990s against 6.5 percent
in the region during these same
decades (Figure 1 and World Bank,
2010, Philippines: Fostering More
Inclusive Growth). The growth
performance of the Philippines was
also strong in regional comparison
(Figure 2).
2.On the demand side, private
consumption, investment, and
net exports were the main drivers
of growth. Private consumption
expanded briskly in Q4 2010
(especially food and beverages),
contributing 5.7 percentage points to
the 7.1 percent GDP growth. For the
second quarter in a row government
consumption subtracted from growth
as the new administration tightened
spending to contain the overall deficit
and effectively started to unwind the
fiscal stimulus (see fiscal section
for details)—Figure 3. Improving
investor confidence led to strong
private investment in both Q4 and
2010 as a whole. Durable equipment
grew by double-digit rates in 2010
and 26 percent in Q4, in part due to
strong car sales, air transportation
equipment, telecommunication
equipment and other specialized
industrial machineries. Private
construction grew by 19 percent in
2010, more than offsetting the fall
in public construction. As a result,
total investment, as a ratio of GDP,
rebounded from the through reached
in 2009, though it still remains low
by regional standards (the ratio
increased from 14.6 percent of GDP
in 2009 to 15.6 percent of GDP in
2010). The rebound in net exports
also contributed about 1.3 percentage
point to full year growth although
growth peaked in the third quarter.
3. On the supply side, the
economy was propelled by two
relatively balanced engines:
industry and services (Figure 4).
After spearheading the strong
recovery in the first half of 2010,
industrial growth moderated in the
second half due to the deceleration
of manufacturing (mainly food),
mining and the contraction of public
construction. The services sector has
expanded more evenly through the
year. Trade, finance, private services
and, to a lesser extent, real estate were
the top contributor to sector growth.
Following four quarters of decline—
due to weather-related shocks such as
typhoons Ondoy and Pepeng and the
El Niño phenomenon—agriculture
expanded thanks to a strong palay
(rice) season and contributed 1.1
percentage points to overall GDP
growth in Q4.
Employment and Poverty
4. The labor market has
improved thanks to robust growth but
remains structurally weak. Despite
the record growth performance in
2010, unemployment afflicted 7.1
percent of the labor force in October
2010, unchanged from October
2009 (Figure 6). Over the same
period, underemployment even
worsened to 19.6 percent from 19.4
percent. The weak posting of key
labor market indicators, however,
masks a cyclical improvement in
employment prospects as 1.0 million
jobs were created in the twelve
months to October 2010 (Figure 5).
This encouraged 1.1 million workers
(new and previously discouraged
ones) to join the labor force. The
Philippines unemployment and
underemployment rates remain high
(Figure 6), especially in the regional
context.
5. In spite of the remarkable
rebound, growth continues to bypass
many poor. The latest official poverty
data confirm a disconcerting lack
of poverty reduction response to
economic growth in the Philippines.
From 2003 to 2009, an additional
3.3 million citizens became poor
in the Philippines (net basis),
pushing the poverty headcount to
23.1 million. This increase nudged
poverty incidence from 24.9 percent
of the population in 2003 to 26.4
percent in 2006 and 26.5 percent
in 2009 (Figure 8).2 Over 2003-
06 and 2006-09, average real GDP
growth reached 5.4 and 4.3 percent,
respectively.
Balance of Payments and
External Debt
6. The country’s external
position continued to strengthen
thanks to a consistently strong current
account and, lately, by the capital
and financial account. The Q3 2010
overall balance of payments surplus
grew to 7.2 percent of GDP, pushing
the year-to-date surplus to 4.9 percent
of GDP (one percentage point higher
than in the same period in 2009)—
7. The strength of the balance
of payments has given rise to a
sharp buildup of reserves at the
central bank; these now exceeds total
external liabilities of the country. Net
international reserves have steadily
increased through the year but
accelerated in the latter part of 2010
to reach $62.4 billion in December
and then $63.6 billion in January
2011 (Figure 12). Combined with
the central bank’s forward books,
these foreign exchange reserves
amount to an estimated 43 percent
of GDP. These exceed the total
external debt (public and private3)
of the Philippines, which stood at
31 percent as of September 2010
(Figure 13). Gross international
reserves in January 2011 covered
a comfortable 554 percent of the
country’s short-term external debt by
residual maturity.
8. The trade deficit narrowed
sharply in 2010, to 3.3 percent of
GDP, thanks to strong exports and
muted imports. Merchandise exports
grew by 41.3 percent y/y in Q3 2010
thanks to strong electronic exports.
Exports have bounced beyond their
pre-crisis levels but the recovery
profile is broadly in line with that of
key East Asian economies. Imports
have not yet recovered to their pre-
crisis levels though these contained
large fuel and food components.
Based on preliminary data, exports
growth slowed down to 11.2 percent
in November but bounced back to
25.3 percent in December, pushing
the year-to-date
growth to 34.3
percent. The rapid
appreciation of the
Peso against the US
dollar by about 6.5
percent from July
to early November
2010 may also
have contributed
to the slowdown
in exports through
its impact on price
competitiveness
(Figure 15).
9. Dollar
remittance growth
has gradually
accelerated through
November 2010;
OFW deployment
was also strong in
2010 (Figure 14).
In nominal dollar
terms, the pacing of
remittance growth
gradually increased from 5.9 percent
in May (the slowest growth after
typhoon-related remittance surge)
to 10.5 percent in November 2010.
With the appreciation of the Peso,
remittance in real Peso terms declined
by 1.4 percent in 2010 in sharp
contrast to the 9.6 percent increase of
2009; real peso remittances thereby
continue to exhibit a marked counter-
cyclical pattern.
10. Notwithstanding the
emerging markets sell-off of early
2011, improved fundamentals and
resiliency have pushed the country’s
spreads towards historical lows.
The improved macroeconomic
performance and outlook were
strong enough to warrant a rating
upgrade from Standard & Poor’s
in November 2010,4 followed by
an upgrade in the rating outlook
by Moody’s in January 2011.
Through 2010, sovereign spreads for
Philippine bonds narrowed sharply
to 159 basis points (bps) in end-
2010 (spreads reached 544 bps in
November 2008 from a low of 138
bps in May 2007). Likewise, yields
for short-term maturities dropped
significantly starting November, with
the short-end of the yield curve tilting
heavily downwards on account of a
large buildup of liquidity.
11. The Philippine equity
market posted a strong performance
in 2010. Thanks to robust economic
growth, favorable prospects and
increased capital inflows finding its
ways into equities from September
to November 2010, the Philippine
stock exchange index (PSEi) peaked
at the 4,300 level Net foreign
purchase stood at P43 billion (0.5
percent of GDP from in September
to October alone accounting for more
three-fourths of the total net foreign
purchases for the year. The strong
rebound of the Philippine stock
market which increased by 37.6
percent in 2010 compares well with
its peers. The Thai and Indonesian
 March 7 - 13 2011 7
work for the poor
equity markets grew by 40.6 and
46.1 percent in 2010, respectively.
12. Inflation remained muted
throughout 2010 and finished at the
bottom of the central bank’s target
range (3.8 percent outturn against
a 3.5-5.5 percent target range)—
Figure 19. In early 2010, headline
inflation was pulled up by some food
prices (especially vegetables due to
the fall-off from typhoons Ondoy
and Pepeng), fuel and electricity
prices hikes due to higher prices
of oil in international market, and
higher generation cost of electricity
due to the El Niño phenomenon.
High transport and communication
services inflation also contributed to
the increase but was constrained in
the first half as fuel prices receded
in August. Thanks to an appreciating
Peso and declining electricity prices,
inflation eased in the latter part of the
year. Food inflation has decelerated
late in 2010, in part, due to the base
effect from Ondoy and Pepeng.
13. Transportation and food
price inflation became visible again
in January 2011 (Figure 19). Inflation
surprised on the upside in early 2011
as it jumped from 3.0 percent in
December 2010 to 3.5 percent in
January, against consensus forecast
of 3.3 percent. Key inflation drivers
in January were food prices—up
from 2 percent in December to 3.1
percent— as well as transportation
prices which increased from 3.2
percent in December to 4.4 percent
in January. Core inflation remained
stable at 3.3 percent. Within food
prices, the post-Ondoy and Pepeng
normalization of the price of
vegetable was the main driver for the
inflation uptick;6 rice price increases
remained moderate, rising by only
1.5 percent compared to 3.9 percent
in January 2010.
14. Despite record growth and
closingoutputgaps,theBSPcontinues
to maintain an accommodative
policy as inflation expectations are
anchored within its target band. In
contrast from most central banks in
the region, the Bangko Sentral ng
Pilipinas (BSP) has not yet increased
its key policy rates.Bucking the trend
towards capital controls, in late 2010
the BSP successfully intervened to
smooth what it viewed as excessive
volatility of the Peso. Aligned with
its longstanding policy of smoothing
rapid and pronounced
exchange rate volatility the BSP
introduced several measures to
reduce strong movements in
the peso. As capital inflows
surged (from a low base) in
September 2010, the BSP
further liberalized its rules on
foreign exchange transactions,
especially regarding outflows.8
More significantly, the BSP
also intervened forcefully in
the foreign exchange (FX)
swap market. By stopping to
roll over part of its large FX
swap book, the central bank
effectively created an excess
of peso/a shortage of dollar in
the system which helped turn
the currency. (The FX swap
book of the BSP decreased
from $23.3 billion in October 2010
to $17.8 billion in December 2010,
the largest decrease since the global
financial crisis—Figure 12).
16. The strong within-year
fiscal tightening continued through
November2010asspendingrestraints
continued and despite limited
revenue improvements (Table 2).
When the Aquino government took
office on July 1, 2010, a significant
fiscal stimulus undertaken in the first-
half of the year threatened to push
the annual fiscal deficit significantly
beyond the budgeted target.
(The primary fiscal balance had
deteriorated by 0.5 percentage points
of GDP between H1 2010 and H1
2009 while the NG budget targeted
an unchanged fiscal deficit of 3.9
percent of GDP between 2009 and
2010). Thanks to measures taken to
improve expenditure efficiency and
effectiveness—e.g., the zero-based
budgeting; see September 2010.
17. Notwithstanding the carry-
over impact of tax erosion measures,
the tax effort marginally improved
towards end-2010 (Table 2). Several
tax eroding measures introduced
during the course of 2009 and early
2010 had their partial or full year
impact in 201011—see Alonzo
(2011) for a comprehensive listing
of all laws passed during the 14th
Congress (June 30, 2007—June 30,
2010) that contained tax revenue
eroding measures. In total 36 such
laws were passed, or an average of
one tax eroding law every month
(excluding trade agreements).12
While the sharp rebound in economic
activity should result in a cyclical
increase in the tax effort—as large
revenue sources such as corporate
income taxes have a tax elasticity
above one—no notable such increase
took place in 2010. Despite renewed
efforts by the Bureau of Internal
Revenue to boost tax compliance,
aside from a moderate increase in
the tax effort in November 2010
(by 0.1 percentage points of GDP),
the permanent tax eroding measures
present an important drag on
collection.
18. The steadfast focus during
the second half of 2010 on priority
and efficient spending significantly
slowed down total public spending
(Table 2). Personnel services,
maintenance and other operating
expenditures, tax expenditures, and
capital outlays were the key categories
where measures such as the zero-
based budgeting approach generated
the largest savings (compared to H1
2010 spending trends).13 As a result,
primary (i.e., excluding interest
payments) spending moved from
being 0.3 percentage points of GDP
higher than in 2009 as of June 2010,
to being lower by 0.6 percentage
points of GDP by November
2010. As some of the high rate of
disbursement in H1 2010 reflected
a desire to front-load spending, the
slowdown in spending observed in
H2 2010 does not entirely represent
permanent savings. Tax expenditure
is one example: large rice imports
from the NFA took place in H1 2010
and resulted in high tax expenditure
during that period. These imports
proved sufficient for the rest of
2010 (and some of 2011) so that
no associated tax expenditure took
place. Yet, the underlying spending
source—the NFA
tax expenditure
along with the
large loss making
activities of the NFA
in general—remain
broadly unchanged
to date. Thanks
to significant (and
persistent over time)
over-budgeting of
interest payments
along with low
domestic interest
rates during 2010,
actual spending
for this category
consistently fell
below budget
throughout 2010.
19. Growth is expected to
normalize around its potential
output in 2011 as the technical and
temporary factors generating record
growth in 2010 disappear. While
off from the 2010 record growth, the
economy is projected to grow by a
still robust 5.0 percent in 2011 (Table
1).
While consumption is expected
to remain a robust and dependable
contributor to overall GDP growth,
investment in 2011 is expected to
become an important contributor
to growth as a more favorable
investment climate emerges. Strong
confidence outlook from both
consumers and business supports
this For 2012, GDP growth is
expected to expand by 5.4 percent
as investment accelerates, in part
thanks to the implementation of the
priority PPP programs of the Aquino
administration.
20. Risks to our baseline growth
are broadly balanced with upside risk
on private investment and downside
risk relates to external shocks,
especially oil, and food prices.
Efforts to improve the
investment climate, tackle corruption
and weak governance, along with
more credit-rating upgrades could
boost investor confidence and attract
more private investment. Better-
than-expected global growth also
bodes well for the economy and for
GDP to reach government’s GDP
growth target. Sectors with high-
growth potential include the business
process outsourcing and the tourism
industry. Key downside risks pertain
to international oil and food prices.
Employment and Poverty
21. Despite limited progress
in tackling poverty, the scale up
the social protection system in the
2011 budget would guarantee some
safeguard to a large share of the
poor.
The problems underlying the
weak inclusiveness of growth in
the Philippines and stubbornly high
poverty incidence are various and
interact in complex ways.15 One
approach to poverty alleviation is
to create a modern social protection
system that can efficiently target
poor households and provide them
with assistance that can contribute to
helping them and their children reach
out of poverty. The rationalization of
several inefficient social protection
programs and the reallocation and
scaling up in the 2011 NG budget
of resources towards the 4Ps
conditional cash transfer program,
have decisively pushed the scope
and reach of social protection in the
Philippines. At end-2011, the 4Ps/
CCT program is indeed budgeted to
cover 2.3 million poor households, or
about 60 percent of poor households
compared with 26 percent of poor
households at end-2010 (based on
the 2009 FIES poverty data).
22. The scale up of the 4Ps
conditional cash transfer program
bodes well for the fight against
poverty in the Philippines. Recently
released official poverty data from
the 2009 FIES reveal that while
poverty incidence has steadily
increased from 2003 to 2009, key
indicators measuring the depth of
poverty16 point to an improvement
in that dimension over that same
period. One hypothesis for this latter
improvement—which could be
tested once the FIES 2009 dataset
becomes available—is that the 4Ps/
CCT program contributed to this
outcome. The gradual scale up
of the 4Ps program from its pilot
phase in 2007 was designed so as
to start coverage with the poorest
of the poor and gradually expand
to the next poorest households and
municipalities.17 By end-2009 the
4Ps was already disbursing cash to
376,000 households, or 9.7 percent of
poor households.18 This could be a
sufficiently large share of the poor to
have a noticeable impact on country
wide poverty depth indicators. The
4Ps/CCT is also expected to improve
human capital among the poor thanks
to its education attendance and health
requirements.
23. Despite the favorable
economic outlook, the formal
labor market is projected to
improve only marginally as it
suffers from several structural
problems. Both unemployment
and underemployment have a
large structural component in the
Philippines. Over the recent cycle,
the lowest level reached for the
former was a brief dip to 6.3 percent
in October 2007, and for the latter
the trough was 17.5 percent in
October 2008. These troughs were
achieved after six years of sustained,
accelerating and high growth
(average GDP growth between
2002 and 2007 was 5.5 percent and
culminated at 7.1 percent in 2007)
and during a time of when overseas
work deployment accelerated
noticeably.
Balance of Payments
24. The overall balance of
payment is projected to moderate
while remaining firmly in surplus
in 2011 thanks to continued support
from remittances and services
exports.
The current account surplus is
projected to decrease moderately to
4.2 percent of GDP in 2011 from
5.2 percent in 2010 as remittance
inflows continue to gather pace
on the back of strong deployment
of OFWs in 2010 while the trade
deficit remains broadly stable at 5.1
percent of GDP as export growth
remains strong. Exports from the
large electronics and semi-conductor
sectors are projected to remain brisk
as leading indicators for the sector
remain favorable (Figure 22) while
planned investment by electronic
manufacturing firms reached a
record-high in 2010.19 Financial
inflows, particularly direct and
portfolio flows, to the Philippines are
projected to increase given the overall
weak performance in 2010 and
rapid peso appreciation is no longer
perceived as a baseline case following
(Turn to page 9)
 8  
Opinion March 7 - 13 2011

EDITORIAL
What are Aquino’s
communication ‘experts’ doing?
The current crisis in the Middle East, in Libya, in particular, may have
inadvertently exposed the gross incompetence of the administration’s
“communications experts.”
And it is suggested that something be done to correct the situation
before these guys pull the entire Aquino house down.
As far as newsmen are concerned, many—including those who have
become disenchanted with the President, owing to past bungling—believe
Mr. Aquino is trying his level best to save our overseas Filipino workers
(OFWs) whose lives are now in grave danger because of the precarious
situation in the Middle East. Trouble is, his communications “experts”
cannot seem to communicate, especially to those directly concerned, the
President’s concern. Consider what happened to the OFWs who arrived
from Libya the other night. In interviews that were later played and replayed
by broadcasters and printed in newspapers, the workers spewed forth their
grievances against the government—that the government dragged its feet
in coming to their rescue, etc., etc.—totally negating the fact that it was
the government that repatriated them from Libya, in the first place. So
how come this happened? Because the “experts” failed to communicate
with our beleaguered OFWs in Libya, through our embassy there, that the
government, although lacking in resources, was doing everything humanly
possible to help them leave that country.
Failing to receive such assurances, the OFWs started to grumble, and
View from the East
By Jesus T. TAnchanco SR.
justifiably so.
When Acting Foreign Secretary Albert del Rosario arrived in Tunisia
on Saturday to work out the repatriation of 180 OFWs through commercial
airliners booked from Philippine consular offices in Riyadh, Saudi Arabia,
Malacañang’s “experts” also failed to play this up. Reports—from the news
agencies, mind you—revealed that del Rosario contracted a Greek-owned
passenger ship, Ionian Queen, for Libya and the vessel was due to arrive
Disaster - preparedness, a must
yesterday in Benghazi. The ship has a capacity of 1,725 passengers.
We’re not sure now if this fact had been communicated to Malacañang The government’s disaster-preparedness contingency measures that have been
but if not, the “experts” again should be blamed for sleeping on the job. was put to the test with the problems that firmed up in such strategic planning
As part of their assignments, the “experts” should have sought out the arose with the evacuation efforts for the sessions and then have this implemented.
government agencies in charge of the evacuation of the OFWs in Libya and OFWs, oroverseas Filipino workers , in The funds to be sourced should have
elsewhere and from the data they gathered, they could have disseminated Libya . In a sense, the government was already been identified beforehand; the
step by little step—for the peace of mind of all concerned—what the caught napping as the stream of evacuated government agenciesto be marshaled also
government was doing to help our endangered overseas workers. These Filipinos show that the government was should have been similarly identified. This
“experts” primary job, after all, is to come out with a positioning strategy
that would communicate the government’s interest in the welfare of our ill-equipped in dealing with the situation. is the essence of disaster-preparedness.
OFWs. And what better way could there have been than to tell the OFWs It was simply chaotic and towards this There simply is no way by which the
that a vessel had been contracted, a Cabinet secretary had been dispatched end, the government’s preparation for government should be caught napping.
to the strife-torn region and that everything was being done for the OFWs, disaster was unduly exposed.
including the processing of travel papers. It is very important that the In an emergency, we have to bite the
Marketing gurus Al Ries and Jack Trout in their classic book government should have contingency bullet. When the need for an evacuation
Positioning: The Battle for your Mind play up the importance of being plans ready so that any disaster that ship arises, the funds should have already
first in the mind of the consumer. Thus, when the Filipinos could receive happens will be immediately dealt with. been readied. When a commercial
no assurance from their government, although del Rosario was already In crucial times such as the Libyan crisis, airliner has to be contracted, then, let
being instructed about his mission, it was the “negative” view stuck to the government should already know the government machinery do so. Time
their minds. what to do. In any disaster that should hit is of the essence here . The Libyan crisis
Clearly, there is now a need for the Aquino administration to tap new the country, the government need only brought to the fore the fact that the trapped
talents, possibly those aware of the 1981 marketing classic so that in crunch
times like the Libyan crisis, what the government does is immediately dust off its disaster preparedness plans. Filipinos in that country were evacuated,
given play, thereby ensuring that its efforts for its citizens get to them And these contingency plans should thanks to other foreign governments.
promptly, before pessimism or even despair sets in. What the government have been in place immediately when the There were some OFWs who were
needs now is to supplant the “negative angle” that is now playing in the disaster struck. plucked by the British forces together
minds of the Filipinos. We were not simply prepared. Even on with their British citizens; there were
Del Rosario’s latest move—travelling into the heart of Tripoli in a 55- the matter of the funds needed to execute also some OFWs who went with Chinese
vehicle convoy to evacuate trapped OFWs—is one such communication an evacuation plan , the government was forces who went to Libya to fetch their
thrust that could dislodge the negative image now in the minds of Filipinos found wanting. In a disaster, time is of the troubled citizens. The US evacuation
who are following the Libyan crisis. This opportunity should not be given essence and there need be no quibbling team also helped in ferrying trapped
to the two Malacañang communication groups that may again squander on where the funds should be sourced. Filipinos in Libya .
this sterling example of governance and service, trapped as they are in their This is really a very important cog of There would be other disasters that
own jostling for the President’s attention.
governance: disaster preparedness. When are waiting to happen and it is very
the government does not have a plan at crucial for the government to have its own
all, it risks losing out on the matter of disaster-preparedness ready so that the
disaster preparedness. And this, at the Libyan situation where the government
risk of being repetitive, should not be the was grappling for what it should do has
case. been evidently manifest.
There simply should be a way Thousands of lives are at stake in the
by which the government has its own Libyan crisis and it is so important for the
contingency plan for any imaginable government to devise other contingency
LITO U. GAGNI disaster that could happen, be it the measures when disaster strikes in other
Editor
CEFERINO M. ACOSTA III floods, the drought, the climatic change, countries. Yemen , Bahrain , Oman are
News volcano eruption, and evacuation of its now powder kegs. What when disaster
JAMES U. GAGNI citizens in strife-torn foreign lands. hits that of the Kingdom of Saudi
Researcher All that is needed is for the government Arabia where almost half-a-million of
RAMIL T. SARMIENTO to convene a strategic planning meeting Filipinos are working, some said to be
Layout
RAUL S. GONZALEZ, BERNARDO PACHECO, whereby all stakeholders are involved. undocumented?
ALFRED SANTIAGO JR., GEORGE T. SIY This means that the national government, We do not need this lack of preparation
Contributing Editors the local government units, even down to to happen once again. To this end, we
the barangay level, and the private sector suggest that the government convene an
Business Matters is published every Monday by Grandbooks Publishing
Inc. with editorial and business address at 50 M.R. Flores St. Ext., such as the business associations andnon- honest-to-goodness summit on disaster
Sto. Rosario Kanluran, Pateros, M.M. governmental organizations should be preparedness to ensure that we are not
Telephones: (632) 628-43-48 Fax: (632) 628-38-82 involved in coming up with contingency caught with our pants down.
E-mail: businessmatters@hotmail.ph
plans for each disaster that could occur Time is of the essence here and the
When a disaster strikes, the national sooner the government realizes this, the
government need only take out the better for us all.
 March 7 - 13 2011 9
Making
the very effective intervention from
the BSP in November 2010 in the
FX swap market—which proved
that the central bank has the means
to prevent rapid appreciation of
the currency. Risks to our baseline
scenario include shocks to oil and, to
a lower extent, food prices as sharp
increases would have a large negative
impact on the trade balance.
25. Over the medium term,
policymakers need to focus on
shifting the composition of the
overall balance of payments surplus
to support stronger and more
inclusive growth
• Improving the investment
climate to attract larger inflows of
foreign direct investment and create
incentives for residents to invest
more at home rather than abroad.
These larger investments will likely
result in a surge in imports of capital
goods that may ease the current
account surplus in the short term
while generating stronger growth
thereafter.
• Advancing fiscal
consolidation to restore the fiscal
space needed to address future
economic shocks will help limit
government borrowing, reduce
government bond yields and
limit nonresident purchases of
government debt. This should help
reduce the burden of debt service on
the budget while reducing the risk of
sudden stops or reversals of capital
flows and relieving some pressure
for exchange rate appreciation.
• Further strengthening
macro-prudential regulations
to reduce vulnerabilities to the
financial system may be needed
(notwithstanding the positive overall
assessment from the IMF-World
Bank Financial System Stability
Assessment Update undertaken
in November 200920). These
could include lower loan-to-value
and payments-to-income ratios,
countercyclical capital requirements,
and tighter regulations on open
positions.
• Expanding job
opportunities at home will allow the
economy to absorb more of the talent
the Philippines sends abroad every
year through overseas workers.
While this would mean slower—
and perhaps smaller—inflows of
remittances it will boost the domestic
economy and rapidly raise the size of
the middle class.
26. Notwithstanding an assumed
gradual policy tightening, inflation is
projected to move towards the upper
band of the BSP’s target in 2011.
The inflation rate is projected to
accelerate during the first six months
of 2011 and then decelerate through
the rest of the year. Average inflation
is projected to rise from 3.8 percent
in 2010 to 4.8 percent in 2011, within
the top of the BSP’s target band of 3
to 5 percent. Food inflation, which
accounts for about half of the total
consumption basket, is projected
to increase moderately from the 2
percent pace observed in Q4 2010
but should remain moderate in
(from page 7)
2011 barring major supply shocks
(see Special Focus section below
for more details). The impact of
various increases in transportation
fares21 would moderately push up
headline inflation given their weight
in the CPI basket and the scale of the
increases.
27. The distribution of risks on
inflation is tilted upwards, as global
food and fuel supply shocks could
return and would push headline
inflation outside of the target band.
While oil prices are projected
to increase from $79 per barrel in
2010 to $85 per barrel in 2011,22
developments in Egypt that pushed
oil prices above $100 per barrel
clearly point to upside risk. Data
reveal that the pass through from
international gasoline and diesel
price changes to the Philippines is
significant (Figure 23). As food
accounts for about half of the CPI
basket in the Philippines, supply
shocks would have a large impact on
headline CPI and, based on the 2008
food and fuel global price shocks, it
transpires that core inflation tracked
relatively quickly the increase in
food prices (Figure 19). However,
the BSP’s credible inflation targeting
regime—which has proven to be a
good anchor of inflation expectations
in past episodes of large supply
shocks (Figure 20)23—should
continue to dampen second-round
effects of temporary supply shocks
such as those related to global food
and fuel prices.
28. Monetary policy is projected
to tighten gradually in the second
half of 2011 as demand pressures
are limited and inflation expectations
remain within the BSP target band.
With real GDP growth projected
to be in line with potential output
and structural slack in the labor
market, strong demand pressures
are not expected to materialize.
Monetary indicators (e.g., M3, bank
lending) are growing at or below
nominal GDP growth. Inflation
expectations remain firmly within
the central bank’s target zone. This
would enable the BSP to gradually
withdraw its accommodative policy
stance. Policy rates were cut by a
cumulative 200 basis points from
December 2008 to July 2009 and
have been unchanged since then
(Figure 20).
29. The 2011 budget—the
first to be approved ahead of the
fiscal year in eleven years—kick
starts important reforms in spending
efficiency and transparency. The 2011
NG budget (January-December)
was approved in December 2010
thereby providing departments and
line agencies with increased fund
predictability and programming
than has been the case with recent
budgets.24 The approved budget is
broadly kept intact to the budget
23 Compared to both headline
inflation and core inflation, inflation
expectations are (1) significantly less
volatile (e.g., since January 2006, the
standard deviation of the monthly
inflation expectations series is 0.9
against 3.0 and
1.6 for headline and core
inflation, respectively), and (2) fall
within the BSP’s target zone far
more often (e.g., since January 2006,
monthly inflation expectations were
within the target zone about half of
the time while that proportion falls to
39 percent for core inflation, and 26
percent for headline inflation).
24 Over the past few years, NG
budgets have often been approved
in March (e.g., 2005, 2007, 2008,
and 2009) or even in April (e.g.,
2003). submitted to Congress by
the Government (i.e., the NEP); the
latter, as detailed in the September
2010 Philippines Quarterly Update,
renews the fiscal consolidation and
contains significant reform measures.
These measures aim to improve
spending efficiency, transparency
and accountability of the budget.
Notable differences between the
proposed and the approved budget
include the reallocation of the
P2.5 billion budget for the Public-
Private Partnership Support under
the Department of Agriculture to
the National Food Authority, which
had zero allocation in the NEP
2011. Some special purpose funds
were reduced25 to free up funds for
the following new programs (not
originally in the NEP): financial
subsidy to LGUs, payment of total
administrative disability pension
and support for pre-school education
(under the un-programmed fund).
30. Several initiatives to
strengthen the debt structure have
been/are being introduced and
should ultimately generate large
payoffs in terms of risk and cost. A
Debt and Risk Management Office
(DRMO) has been created inside
the Department of Finance. A debt
consolidation program was put in
place by the national government
at the end of 2010. The program
aims to establish a benchmark for
long-term financing and extend the
duration of the existing domestic
debt with the exchange of existing
government securities for longer
dated securities.26 In September
2010, in an effort reduce its currency
risk and to deepen the domestic bond
market, the Philippines successfully
issued its first Peso-denominated
global bond.27 Given the success
and appetite for such a product, the
country issued a second global Peso
bond in January. This issue generated
the largest participation from
offshore accounts of any Philippine
bond issuance to date. Issuances of
global Peso bonds, in lieu of global
bonds in foreign currencies, also
help reduce pressure on the Peso
to appreciate and mop up some of
the large accumulation of domestic
liquidity.
31. A moderate degree of fiscal
consolidation is projected for 2011
(Table 2). The overall fiscal deficit
(GFS basis) is projected to decline
from an estimated 3.6 percent of GDP
in 2010 to 3.3 percent in 2011. As no
tax policy measures are included
in the 2011 budget, incremental
increases in the tax effort will be
driven by tax administrative efforts to
improve tax compliance. As a result,
we estimate the tax effort to rise by
0.3 percentage points of GDP to 13.2
percent of GDP in 2011. Non-tax
revenue (excluding privatization) is
projected to remain unchanged at
1.4 percent of GDP. Total spending
is projected to remain at 18.1 percent
of GDP.
32. Fiscal consolidation
is mostly driven by structural
improvements; the structural fiscal
balance is improving for the first time
in five years (Figure 24). As detailed
above and in our previous Philippines
Quarterly Update, significant
reforms on the expenditure side
of the towards emerging markets
due initially to inflation concerns
in mid-January 2011 did not spare
the Philippines, The September
global bond, for example, reached
a peak of 106 prior to the sell-off
(from the issue price of 99.607)
but subsequently declined to 98.25
in late January. budget have been
introduced with the 2011 budget.
These are increasing fiscal space.
Similarly, the tax administration
measures recently introduced or re-
invigorated are also— moderately—
improving the tax effort (Figure 25).
Notwithstanding these welcome
developments, the structural fiscal
balance remains high, especially
since it is combined with a relatively
high level of fiscal risks—these have
been assessed and disclosed for the
first time in an annex to the 2011 NG
budget (see Special Focus below for
details).
33. With the economy firmly
over the global recession’s impact,
a faster unwinding of the fiscal
stimulus would generate important
benefits. Key benefits include: (1)
less pressure on the peso to appreciate
and for potentially destabilizing
short-term capital inflows to enter
the country; (2) reduced risks of
overheating the economy and of
putting pressure on prices at a time
when inflation risks are clearly titled
upwards as global food and fuel
supply shocks could materialize;
(3) generating more fiscal space for
priority spending programs; and
(4) providing the economy with
better resiliency to shocks (lower
structural fiscal deficit).
34. Beyond compliance-
increasing administrative reforms,
the revenue effort contemplated in
the Philippines Development Plan
will require tax policy measures.
President Aquino’s election pledge
regarding revenue mobilization was
to boost the tax effort first through
administrative measures aimed at
improving tax compliance. Given
the large priority expenditure needs,
however, administrative measures
would need to be complemented by
tax policy measures. To keep with the
government’s election pledge of no
new taxes and tax increases in the first
18 months of the new administration,
these could be introduced in 2012
and onwards. A well designed tax
system facilitates tax administration,
tax compliance cost, and reduces
opportunities for corruption. These
are essential components of a sound
investment climate that fosters
domestic and foreign investment and
hence economic growth. Equitable
tax laws and the impartial application
of those laws are also necessary to
achieve the objectives of horizontal
and vertical equity (see below); these
in turn even the playing field among
tax payers.
35. An improved tax effort calls
for improvements along both the
efficiency and equity dimensions
of the tax system. Tax efficiency
generally requires a broad tax
base and low tax rates to minimize
economic distortions, encourage
compliance and limit corruption.
Tax equity involves two important
aspects: (1) vertical equity, which
dictates that lower earning taxpayers
should face lower effective tax rates,
and (2) horizontal equity, which
means that taxpayers with similar
income or profits should face similar
effective tax rates—where the stress
on “effectiveness” refers to both the
design of the tax system, as well as to
compliance in its implementation.
 10   Science March 7 - 13 2011

And Discovery makes four Scientists look

WHEN NASA's shuttle
Discovery arrived at the
International Space Station it for biofuels
in brew waste
made some space history: It
marked the first time ever that
spaceships from four different
space agencies were docked
together at the same time. BEER fuels plenty of things, from great nights out to regretful hangovers,
The historic moment but scientists are asking if it could power machinery and heat our homes
occurred at 1916 GMT, when by producing biofuels from brewery waste.
Discovery arrived at a docking Cornell scientists have been working with Anheuser-Busch Inbev,
port on NASA's Harmony which brews Budweiser, to see if microbes which currently produce
module, a multi-port hub on methane as they break down brewery waste can be put to other uses.
the space station. The shuttle The methane has is already a great boon to the brewers, who save
joined two Russian Soyuz millions of dollars a year by using it for heating. However, after analyzing
space capsules and three the make up of the bacteria in the attractively-named bioreactor sludge
robotic space freighters (from the Cornell team think they can use the microbes to produce biofuels.
Europe, Japan and Russia) Studying nine brewing facilities, Largus T. Angenent, associate
that were also docked to the professor of biological and environmental engineering, and research
orbiting lab. associate Jeffrey J. Werner, found unique types of microbes in each
"That that's about as many bioreactor.
different visiting vehicles as "The cool thing we found was that if you're looking at these
you can imagine," Discovery thousands of species of bacteria, it's a very dynamic system with things
astronaut Alvin Drew radioed dying off and replacing them," Werner said. "There are certain signature
Mission Control in Houston NASA's space shuttle Discovery is shown docked to the International populations that are resilient. Even if they get disturbed, they come right
before the docking. Space Station shortly after arriving on Feb. 26, 2011. The spacecraft back up."
With Discovery's arrival, at the bottom of this view is Japan's HTV-2 spacecraft. Photo by And Angenent believes that by studying how these communities of
the space station's mass NASA TV. microbes adapt to their environment can give scientists the ability to put
jumped to 1.2 million pounds these miniature armies to better uses.
(544,310 kilograms). It is as space station on January 26. this is Discovery's 39th and final As their studies continue, the Cornell engineers are trying, first
long as a football field, making it the Astronauts used the station's spaceflight before being retired to stop the microbes from producing methane and instead put them to
largest man-made structure in space. robotic arm to latch onto the HTV-2 along with the rest of NASA's shuttle work making produce carboxylates, which are a precursor to the alkanes
The station is so large that on craft, which Japan's space agency program later this year.The shuttle is found in fuels.
clear nights it can easily be seen with named Kounotori 2 ("Kounotori" delivering a new storage room and a "We are going to shape these communities so they start making
the unaided eye if you know where is Japanese for White Stork), and humanoid robot, called Robonaut 2, what we want," Angenent said.
to look, and sometimes even rivals attached it to the station's multi-port to the International Space Station.
the planet Venus in brightness. Harmony module. Two Russian Soyuz spacecraft,
The $100 billion International Last week, the station's crew which carried the six astronauts
Space Station has been under had to move the Japanese craft to aboard the station in teams of three,
construction by 15 different countries a different parking spot because are also linked to the space station.
since 1998. It is currently home to six it would have blocked access to "It's a pretty amazing time if you
crewmembers from the US, Russia Discovery's payload bay think about it," Bill Gerstenmaier,
and Italy and has about the same On January 28 Russian launched NASA's space operations chief,
amount of living space as a Boeing its robotic space freighter Progress said before Discovery launched.
747 jumbo jet.Five different space 41 toward the station. It arrived two "To think of all these international
agencies, representing the United days later. An older Russian cargo control stations working together –
States, Russia, Europe, Canada and ship, Progress 40, also undocked it's an amazing system of operations
Japan, are leading the effort. Of those, from the station to make room for and systems to keep all the bits
only the Canadian Space Agency yet another addition: the European moving forward. What a great time
does not have a spacecraft docked Space Agency's second unmanned in spaceflight."
at the space station today, although cargo ship. The novelty of so many different
Canada provided the robotic arm ESA launched its Automated spacecraft at the International Space
and Dextre maintenance robot for Transfer Vehicle 2, called the ATV-2 Station has not been lost on NASA
the orbiting laboratory. Johannes Kepler, on February 16. and its international partners.
In the last few weeks, the It arrived at the space station on They hope to stage a space photo
station has seen a flurry of spaceship February 24 – the exact same day session by cosmonauts flying around
arrivals and departures leading up to that Discovery blasted off toward the the station in a Soyuz spacecraft
Discovery's arrival. orbiting lab. if time allows during Discovery's
Here's a look at the busy port in The ATV-2 Johannes Kepler flight.
space: arrived at the station less than six A final decision has yet to be
First, an unmanned Japanese hours before Discovery lifted off. made, but if allowed, it will add an
cargo craft called the H-2 Transfer Launched from NASA's extra day to Discovery's 11-day
Vehicle-2 (HTV-2) arrived at the Kennedy Space Center in Florida, mission.

Wind profiler adds to PAGASA hazard warning system

THE Philippine Atmospheric,
Geophysical and Astronomical
Services Administration (PAGASA)
has added a state-of-the-art wind
profiler to its array of systems that
will enable the bureau to provide
credible and more accurate weather
forecasts.
In his statement during the
inauguration of the wind profiler at
the Science Garden, Agham Road,
Diliman, Quezon City, Department
of Science and Technology (DOST)
Secretary Mario G. Montejo said,
“This event speaks of PAGASA’s
dilligent effort to decode, understand
and bring reliable weather
information to every Filipino home
He said data that will come from
the wind profiler will supplement
the conventional surface and
other meteorological observations
collected regularly at the PAGASA
Data Center to constitute a four-
dimensional structure of the
atmosphere.
Hilario said it has the capability
to detect atmospheric condition
up to 3,000 meters and provides
continuous vertical profile of the
horizontal components and the
resultant wind speed and direction
and vertical wind velocity.
”This equipment has a
Radio Acoustic Sounding System
(RASS) which provides the virtual
temperature of the troposphere,”
she said.
The troposphere is a region of
the atmosphere that is below the
stratosphere and is the portion in
which temperature generally rapidly
decreases with altitude, cloud forms,
and convection is active, she added.
Newly appointed PAGASA
acting Administrator Dr. Nathaniel
T. Servando said they still have to
evaluate the appropriate feasibility
of relocating the wind profiler to
the often typhoon-ravaged areas
like, Eastern Visayas, Bicol and
Batanes.
Servando bared that the
equipment was adopted from that
of Finland’s wind profiler. He said
it costs P64 million appropriated
from PAGASA’s P600 million
2009 budget.
Montejo also added that
the data the wind profiler will
conform to World Meteorological
Organization standards, which is
critical in PAGASA’s forecasting
services performance.
”It is also important
for research on air quality,
atmospheric boundary layer,
meso-scale forecasting, global
change, and vertical wind shear
and turbulence.
Montejo said, “We look
forward to high-quality wind
and temperature data, cruising
and selected levels in climb and
descent in airport vicinity. The
wind profiler can be very helpful
to air traffic controllers who
constantly rely and check on
atmospheric stability."
The DOST secretary also
said, “I congratulate PAGASA
for continuously updating and
enhancing its forecasting and
warning capability. In a larger
sense, it has also enhanced its life-
saving function.” (PNA)

A new 'bio-Styrofoam' seems ''pretty green''

whenever nature goes furious.”
”It is a step closer in the
transformation of our continuing
desire to adapt and live productively
along the typhoon belt,” he said.
Montejo said the wind profiler
will add to the bureau's expanding
array of multi-hazard early warning
systems in the country, such as
marine buoys, rain gauges, automatic
weather stations, Doppler radars and
landslides sensors.
This high-value equipment is a
critical component of government’s
comprehensive program on disaster
risk reduction and management.
PAGASA deputy administrator
for research and development Dr.
Flaviana D. Hilario presented the
features of the wind profiler at a
press conference following the
blessing and inauguration.
AS bioplastics revolutionize the
packaging industry, scientists have
now discovered a greener alternative
to traditional Styrofoam packaging
blocks.
Comprised of mostly milk
proteins and clay, this new material,
reported to be ultra-light and largely
biodegradable, could prove a viable,
earth-friendly alternative to the foam
packaging blocks that are derived
from petroleum.
Earthtimes.org reports that the
discovery of this new 'bio-Styrofoam'
came about entirely by accident after
a student at Case Western Reserve
University in Cleveland freeze-dried
a piece of clay. The results were
intriguing enough to warrant further
inspection, and the team began to
experiment mixing the clay with a
variety of other materials. Adding a
protein called casein (found in cow's
milk) produced an extremely light,
fluffy and foam-like material.
"The idea that we could go
from milk and dirt to plastic foam
seems attractive," said David
Schiraldi, a polymer scientist at the
university. "Clay is pretty close to
inexhaustible. Our only effluent is
water vapor. It seems pretty green
to me."
According to Schiraldi, the
process "is simplicity itself." Clay
and water are mixed together in a
kitchen blender, then casein powder
is added.
Finally, a small amount of a
glycerol-based material is added,
to stiffen the solution's chemical
bonds. After further blending, the
mixture is poured into moulds and
freeze-dried.
The resulting material has the
same properties of Styrofoam, but
is 98 percent bio-based. At 100
degrees Celsius, the 'bio-foam' lets
out a few drops of water, but stays
sturdy up to 200 degrees Celsius.
Its compostability also wins
the product a green star. In tests
undertaken by the US Department
of Agriculture, nearly a third of the
new material broke down after about
45 days in industrial composting
conditions. That's significantly
more preferable to the composting
nature of traditional Styrofoam and
other types of expanded polystyrene
foam.
"Compared to expanded
polystyrene foam, we're in a
different league," Schiraldi said.
"Styrofoam lives forever."
However, there will be many
factors to consider before the
new material can be used in the
mainstream market, including
economic considerations and
ensuring the product doesn't smell
like sour milk.
 March 7 - 13 2011 Foreign Matters
11

Obama signs bill to avert shutdown

US President Barack Obama
has signed a stopgap funding
measure that would keep the
federal government operational
for two more weeks.
The bill trims $4 billion from
the current-year budget in a bid
to keep budget divisions from
forcing a government shutdown.
Obama called on his
Republican foes in Congress to
join Democrats to find common
grounds despite fierce divides
over spending cuts, budget
deficit reduction measures and
investment plans, presstv.ir
reported.
"I'm pleased that Democrats
and Republicans in Congress
came together and passed a
plan that will cut spending and
keep the government running
for the next two weeks," he told
congressmen.
Democratic-led senators
voted 91-9 for the legislation,
which includes some four billion
in spending cuts. The move came
one day after the Republican-
led House of Representatives
approved it 335-91.
"Living with the threat of
a shutdown every few weeks is
not responsible, and it puts our
economic progress in jeopardy,"
Obama stated.
The bill's passage means
there will be no partial shutdown
on Friday, however, Congress
will face another deadline in two
weeks.
He said any eventual
agreement should "cut spending
and reduce deficits without
damaging economic growth or
gutting investments in education,
research and development that
will create jobs and secure our
future."
US Republicans have
demanded steep spending cuts
but Obama has warned that
cuts that are too deep could put
the country's fragile economic
recovery at risk
The Republicans drafted
the measure, rallying broad
Democratic support by using
spending cuts included in Obama's
proposed budget and savings
from a welcomed ban on funding President Barack Obama talks with Secretary of State Hillary Rodham Clinton in the doorway
congressional earmarks. from the Outer Oval Office to the Colonnade of the White House.

Child-sex industry thriving in US Graft hampers global

CHILD trafficking and
exploitation in the United States
have become a booming industry
for the wealthy at the cost of
victimizing a huge number
of many teenagers and even
children.
Human rights advocates say
the men that purchase mostly
female subjects for sexual
exploitation in Washington DC
are often among the affluent
professionals that include
politicians and police officers,
while the estimated 300,000
annual victims are mainly at-
risk and run-away children and
youth without a home, a Press
TV correspondent reported.
With 13 as the average
age, many victims of sexual
trafficking are usually beaten
and raped into submission by the
men who hire and exploit them.
The booming prostitution
and child-sex industry in the
US has made human rights
advocates fight for stronger laws
to bring predators to justice and
to help get the young kids off
the streets.
Courtney's House, a non-
profit organization committed
to providing a safe place for
child trafficking victims, passes
out information to young at-
risk girls so they know help is
available.
“Now more than ever, it is
easy to buy someone, and it is
easier to buy a child,” says an
assistant project manager at
Courtney's House.
“Local traffickers in the
DC area are preying upon
predominantly girls but also
boys who are homeless, facing
a lot of poverty,” says the
executive director of FAIR
Fund - a Washington DC-
based international non-profit
organization that works to
prevent human trafficking and
sexual violence.
Despite efforts by human
rights organizations throughout
the United States to limit the
impact of the industry on at-risk
youth, experts admit that it is
easier than ever for predators to
buy young girls on the Internet,
leaving law enforcement with a
lack of paper trail.
anti-narcotics efforts
CORRUPTION is a major impediment in combating illicit drug
trafficking, the independent UN body tasked with monitoring the
production and consumption of narcotics worldwide said in a new
report.
The Vienna-based International Narcotics Control Board (INCB)
also warned in its annual report that the production of synthetic
stimulants is growing. The vast profits generated in the drug markets
often exceed the financial resources of State institutions, the report said,
adding that the criminal organizations with drug trafficking empires
have in some cases become political forces with the power and authority
of legitimate institutions.
The INCB is an independent and quasi-judicial monitoring body
mandated to implement United Nations international drug control
conventions.
“By employing corruption and violence [drug traffickers] are able
to avoid law enforcement, interdiction, eradication of drug crop and
such things as extradition to jurisdictions that want to prosecute them,”
Board member Melvyn Levitsky told reporters at UN Headquarters in

Delta enhances New York.

“Corruption plagues not only our area of drug control, it also
weakens governments and institutions,” said Levitsky, who is also

inflight coffee experience Professor of International Policy and Practice at the University of
Michigan in the United States.
According to the report, so-called designer drugs such as
DELTA Air Lines and Seattle’s Best Coffee, a called The Level System, which ranks coffee from 1 mephedrone, which mimics the effects of cocaine, are being produced
featured brand within the Starbucks Corporation, to 5 based on roast intensity. faster and in growing numbers. Detailed instructions for the manufacture
announced a new agreement that will offer Delta “As two organizations who care about creating of these synthetic drugs are often shared via the Internet, adds the
customers freshly brewed Seattle’s Best Coffee a distinctive premium customer experience, Delta report.
onboard all domestic and international Delta and and Seattle’s Best Coffee make a perfect pair,” said “Given the health risks posed by the abuse of designer drugs, we
Delta Connection flights. Michelle Gass, president, Seattle’s Best Coffee. urge governments to adopt national control measures to prevent the
Existing Seattle’s Best Coffee fans will be “Existing Seattle’s Best Coffee fans will be delighted manufacture, trafficking in and abuse of these substances,” says Hamid
delighted to find to find their favorite Ghodse, the President of the Board.
their favorite coffee coffee on their next On the other hand, licit drugs needed for medical treatment are not
on their next Delta Delta flight, and for readily available in all parts of the world, the report says, noting that
flight, and for those those not yet familiar, it more than 80 percent of the world’s population lack or has insufficient
not yet familiar, it is is an opportunity for us access to pain relief drugs.
an opportunity for to introduce our great While Western countries consume 90 percent of the medicines on
us to introduce our coffee to Delta’s more the market, many countries in Africa, Asia and the Americas have very
great coffee to Delta’s than 160 million global little or no access to drugs for medical purposes, the report points out.
more than 160 million travelers each year.” Barriers include lack of education of health professionals,
global travelers each In recent months, regulatory constraints, difficulties in distribution, and the absence of a
year. Seattle’s Best Coffee comprehensive health policy that includes pain treatment.
For Delta, the has signed agreements The INCB urges Governments to take action, for example, by
move is part of the with other well- collecting statistical data on licit drug requirements, adapt legislation
company’s $2 billion respected and widely and improve education and training.
investment in the available brands such as Drug trafficking organizations based in Mexico dominate the
customer experience Burger King, Subway market for cocaine, heroin and methamphetamine in the United States,
on the ground and in and AMC Theatres. according to the report, which also notes an increase in the abuse of all
the air. This diverse drugs, except cocaine, in the US in 2009.
For Seattle’s Best, the agreement reflects distribution network has rapidly expanded since In Mexico drug trafficking organizations responded with
the next step in its ongoing strategy to broaden the coffee company reinvigorated its brand in May unprecedented violence to vigorous law enforcement measures by the
the accessibility of its premium coffee through 2010. With the addition of Delta Air Lines, there are Government to disrupt trafficking operations, the report says, adding
relationships with great brands – from restaurants to now more than 40,000 places where customers can that more than 28,000 people have been killed in drug-related incidents
the runway. enjoy a freshly brewed cup of Seattle’s Best Coffee, in the country since 2006.
“A premium customer experience requires up from 3,000 in 2009. In 2009, the total area under coca bush cultivation in South America
premium coffee and Delta is proud to serve Seattle’s Delta Air Lines serves more than 160 million decreased for a second consecutive year, due to a significant reduction
Best,” said Tim Mapes, Delta’s senior vice president, customers each year and has an industry-leading of that area in Colombia.
Marketing. “During in-flight taste testing, we saw global network with service to 357 destinations in Among the other findings, the report notes that cocaine abuse is
firsthand the passion Delta customers have for 66 countries on six continents. spreading in Europe, possibly replacing amphetamines and ecstasy as
coffee and for the role it plays in a superior travel Seattle’s Best Coffee, LLC has been roasting the drug of choice in countries such as Denmark, Spain and the United
experience.” premium coffee since 1970 and today roasts more Kingdom.
In December 2010, Delta customers participated than 20 million pounds of coffee every year and In addition, heroin continues to be the primary drug of abuse in
in an in-flight coffee taste test confirming one of its millions of cups of our coffee are served every day. China, Malaysia, Myanmar, Singapore and Vietnam, with most countries
new coffee blends, Level 4, as the coffee to be served They have more than 550 cafes and kiosks in the region reporting declining or stable trends in heroin abuse, while
onboard. as well as locations such as college campuses, South Asia has become one of the main regions used by drug traffickers
Seattle’s Best Coffee recently launched a restaurants, hotels, airlines, cruise ships, bookstores, to obtain the chemicals needed to produce synthetic drugs. (PNA)
radically simplified approach to packaged coffee grocery stores and movie theatres.
 12   February 28 - March 6, 2011
The greenest car
is not a Bugatti
WITH the arrival of the first
widely available plug-in vehicles,
model year 2011 in the US boasts
the most diverse car offerings
ever in terms of technologies and
fuels.
At greenercars.org, the
American Council for an Energy-
Efficient Economy released its
The 2011 Bugatti Veyron.
14th annual environmental ratings
for the model year showing how
they all stack up.
Some newcomers — are the Mazda 2 and the much-
including an electric vehicle and
a plug-in electric hybrid — did
well, while several of the regulars
held their ground.
This year’s ratings reveal a
face-off among plug-ins, gasoline
hybrids, diesels, natural gas
vehicles, and ever-improving
“conventional” gasoline vehicles.
For the 8th year, the Honda
Civic GX wins top honors,
notwithstanding changes to Green
UPS finds diesel alternative
at 126 below zero
UPS – United Parcel Service –
is increasing its long-haul feelt
running on Liquefied Natural Gas
to 59 vehicles with the addition of
48 heavy tractors that will replace
older generation diesel vehicles,
reducing emissions from the UPS
truck fleet while heading toward
energy security. They are expected to
produce 25 percent fewer greenhouse
gas emissions compared to the older
trucks and use 95 percent less diesel
fuel than the vehicles they replace.
"This is an important step
not only from an environmental
standpoint but from the viewpoint
of US energy security," said Mike
Britt, UPS's director of vehicle
engineering. "Liquefied natural gas is
a cheaper, cleaner-burning fuel that is
better for the environment and more
sustainable than conventional diesel.
And it's also a fuel that's in abundant
supply inside the United States; it
doesn't have to be imported."
Liquified natural gas, or
liquid methane, is made by cooling
natural gas to -126 degrees Celsius
(-260 degrees Fahrenheit). At this
temperature, one volume of this
condensed liquid form of natural gas
takes up about 1/600th of the volume
of natural gas at a stove burner tip.
He added that multiple
technologies and alternative fuels
being explored or deployed to provide
propulsion for smaller and mid-sized
trucks. "But at the moment, LNG is
the only suitable alternative to diesel
for the really heavy, long-haul tractor
trailers you see on the highway."
"As a fuel, LNG is very dense,
providing a large amount of energy
for the amount of space it occupies.
This makes LNG an excellent
potential fuel for large trucks that
need to travel a long distance before
Book rating methods that boosted
other technologies.
But below the top spot, the
“Greenest” list sees a shake-up:
the all-electric Nissan Leaf places
second, followed by the gasoline-
powered Smart Fortwo. Hybrids
take the next three spots, followed
closely by Ford’s new Fiesta SFE
(Super Fuel Economy) and the
Chevrolet Cruze Eco.
Rounding out the “Greenest”
touted Chevrolet Volt “extended-
range EV,” which slip into the
12th and 13th spots.
The strong showing of
conventional vehicles in the top
twelve is a testament to how
serious manufacturers have gotten
about recasting these vehicles as
fuel-sippers with transmission
refinements, weight savings, and
sophisticated internal combustion
engines.
refueling," he said.
The new LNG tractors are
manufactured by Kenworth, the only
truck manufacturer to receive the US
Environmental Protection Agency's
Clean Air Excellence award in
recognition of its environmentally
friendly products.
They are powered by Westport
HD Systems in Vancouver, Canada.
LNG technology uses natural gas as
the main fuel with a small amount of
diesel delivered at high pressure to
the combustion chamber. Westport
estimates that 95 percent of the
diesel fuel usage is replaced by
energy generated from the natural
gas. The US Department of Energy
estimates this displacement will
amount to about 1.25 million gallons
of petroleum annually.
The new LNG-powered tractors
will pull trailers on a transit lane
linking Ontario, California, and Las
Vegas, Nevada, along with UPS's 11
existing LNG tractors.
UPS plans to build publicly
Regarding plug-in vehicles,
ACEEE Transportation Director
Therese Langer noted: “Vehicles
running on electricity emit
nothing from the tailpipe, but
their ‘upstream’ emissions can be
substantial, depending on where
they’re charged. As US power
generation becomes cleaner, these
vehicles’ scores will
rise.”
Once again diesels
fall just short of the
Greenest list.
Vehicles are
analyzed on the basis
of a “Green Score,” a
singular measure that
incorporates unhealthy
tailpipe emissions,
fuel consumption, and
emissions of gases that
cause global warming.
The “Greener
Choices” list includes
trucks and SUVs such
as the Hyundai Tucson,
Chevrolet Equinox,
GMC Canyon, and
the Ford F-150
(FFV). Cars such as
the Honda CR-Z and
Hyundai Sonata top
their respective classes.
The “Meanest” list, or the
vehicles who are the least energy
efficient and have the biggest
emissions footprint of the lot, is
populated largely by heavy trucks
and SUVs, a marked change from
the numerous European sports cars
that dominated last year’s list.
Nevertheless, the Bugatti
Veyron tops the ‘Meanest’ this
year with a Green Score of 19.
The Veyron’s price tag of about
$2 million means that if you can
afford to buy this vehicle, fuel
efficiency may not be your criteria
for picking a car.
accessible LNG fuel stations in Las
Vegas and will be able to access
existing fuel stations in Ontario,
California, and Salt Lake City, Utah,
filling in an LNG trucking corridor
that extends from California to Utah.
Clark Quintin, president of
Westport HD, said that "connecting
California's existing LNG fueling
stations with developing ones in
Utah will create valuable LNG
capability on a busy goods movement
corridor."
"The added advantage of LNG
is it does not compromise the tractor's
abilities, fuel economy or drivability,
and significantly reduces greenhouse
gases," said Britt. "These trucks have
a solid 600-mile range and with
reliable fueling infrastructure make
an excellent alternative fuel system."
Funding for the trucks and
fueling stations is supported by
California's South Coast Air Quality
Management District and the Energy
Department's Clean Cities program.
UPS operates one of the
Next up – Hybrid buses
HYBRID cars like the Toyota Prius have been the automotive success-story of
the last decade, and this has fuelled growth in hybrid power for bigger vehicles
like buses and trucks.
Hybrid vehicles use electric power to supplement the polluting and
inefficient internal combustion engine (ICE) which powers most vehicles
using petrol or diesel.
Pike Research has published a report which estimates that the numbers
of hybrid trucks and buses on our roads will boom in the next few years,
earthtimes.org revealed in its website recently.
Although hybrids are usually more expensive than the equivalent
conventional ICE vehicle, their fuel savings more than make up for this, and
of course their climate-damaging emissions are lower.
Pike Research expects the worldwide market for hybrid and plug-in
Medium and Heavy vehicles will grow to 103,940 vehicles annually by 2015
so there would be almost 300,000 on the world's roads by that year.
Hybrid vehicles use various methods to achieve fuel savings. The
simplest is to have an electric engine whose batteries are charged by the main
engine while running and during regenerative braking, which then is used at
low speed to power the vehicle without emissions. These are called Hybrid
Electric Vehicles (HEVs) and the Prius is a prime example.
Plug-in hybrid electric vehicle (PHEV) systems are a step further on, and
get some of their power, from recharging their on-board batteries from the
electric grid.
Battery electric vehicle (BEV) systems get all of their power from off-
vehicle sources, like electric recharging points, and they store the power on the
vehicle. These vehicles require large batteries and recharging time, but they
have zero emissions themselves.
One other class of hybrids is Power Take Off (PTO) trucks: diggers,
cranes, lifts, and other maintenance vehicles which need to power their
machinery while stationary.
Instead of using the main engine, they use the on-board electric power, at
a great saving of fuel and emissions because otherwise the internal combustion
engine would have to idle for a long time to supply the power for operations.
In particular, many hybrid buses will be on the road, nearly 10,000 in
The UK’s Transport for London is working to reduce the
environmental impact of its fleet by fielding hybrid buses.
the US already, as fleet operators try to reduce fuel costs, particularly for slow
urban driving. In the rest of the world bus companies are trying out hybrids.
According to the Washington-based Environmental and Energy Study Institute,
hybrid buses reduce emissions by 75 percent when compared to conventional
diesel buses and an have average increase in fuel efficiency of 37 percent.
In the United Kingdom, Transport for London (TfL) is leading the way
in reducing the environmental impact of its bus fleet, with around 100 diesel
hybrid buses operating in London, of varying types, to assess which is the best
performing model, and even has a small number of hydrogen fuel cell buses
running on one route.
Pike Research forecasts that sales of medium/heavy duty hybrid, plug-in
hybrid and battery electric trucks will grow at a compound annual rate of 63
percent, with sales of almost 300,000 vehicles, during the period from 2010
to 2015.
Probably the world's leading manufacturer of hybrid truck power
systems is Eaton Corporation of Michigan, who report that customers of its
hybrid systems have collectively accumulated more than 100 million miles
of service, reducing fuel consumption by 4 million gallons of diesel fuel and
harmful emissions by 40,000 metric tons.
Last year UPS ordered 130 of Eaton's hybrid system that will be
deployed next year in New York, New Jersey and California. “Hybrid electric
technology has proven itself to be effective in the field,” said Mike Britt, UPS's
director of vehicle engineering. “We are eager to receive these new Hybrids
and get them on the road. Continued investment in fuel-efficient technology is
a part of UPS's overall environmental strategy.”
Overall, larger hybrids are going to become a significant part of commercial
and public transport road use. Their reduced pollution and emissions, together
with their fuel economy are a strong incentive for users, both large and small,
to invest in these vehicles, especially as the price differential between them
and conventional vehicles will come down as sales increase.
largest private fleets of alternative Britt said "the 200 million mile
fuel vehicles in its industry - 1,914 benchmark proves a number of AFV
in total. Besides LNG, UPS has technologies are viable over the
deployed Compressed Natural Gas, long term in a variety of working
propane, electric and hybrid electric environments and so we'll continue
vehicles in the United States, Canada, to expand the AFV fleet."
France, Germany, Brazil, the United To date, UPS has explored eight
Kingdom and Hong Kong. different alternative fuel technologies,
UPS said that since 2000, its fleet starting with Compressed Natural
of alternative fuel and technology Gas (CNG) and propane technologies
delivery vehicles has driven 200 in the late 1980s. Hybrid-electric
million miles. vehicles (HEVs) were introduced to
The total mileage accumulated the fleet in 1998.
by UPS's "green fleet" is the UPS invested in all-electric
equivalent of nearly three round trips vehicles in 2004 and then deployed
to Mars or circling the Earth more the first Liquefied Natural Gas
than 8,600 times. UPS estimates (LNG) tractors to its fleet. UPS uses
that its fleet of alternative fuel and Liquefied Petroleum Gas trucks in
technology delivery vehicles will Korea and has experimented with
drive the next 200 million miles by hydraulic-hybrid and hydrogen fuel
2017. cell technologies.