| More time needed for PPP rollout THE GOVERNMENT does not expect to meet its target of bidding out 10 private-public partnership (PPP) projects this year given the need to scrutinize details and renewed uncertainty over ownership rules, a senior official yesterday said.“At this rate, the studies are taking time, so we won’t be able to bid them all out, perhaps, around seven within the second semester,” Trade Undersecretary Cristino L. Panlilio told reporters at a communications forum. The government has so far only offered two PPP projects to investors: the maintenance and operations contract for two Metro Manila railways, bidding for which has been put on hold given a management change at the Transportation department, and the Daang Hari-South Luzon Expressway (SLEx) toll road that was announced this week. Mr. Panlilio said other projects close to being green lit were the Ninoy Aquino International Airport (NAIA) Expressway Phase II and the expansion of the Light Rail Transit-2 (LRT-2) and Metro Rail Transit (MRT)-3 lines. “[F]or five PPP projects that are close to being bid out, and they took long to do so because the feasibility study phase was extremely difficult ... they are either ongoing or nearly finished,” he said. “We have the Daang Hari and NAIA road, which can be bid out by August... then we have the connector road or elevated highway connecting SLEx to Diosdado Macapagal Avenue... which will pass through the NAIA-3 terminal, the old domestic airport... and according to reports I’ve heard, this will be bid out in the next two months,” he said. “Third, the connector road between NLEx (North Luzon Expressway) and SLEx, a major infrastructure project... is close to being perfected and will be bid out in due time as well. “Fourth, there is the operations and maintenance of LRT-1 and MRT-3, although I cannot say which particular month the bidding will be scheduled, but I can say it can be bid out within the second semester,” he continued. “The last for this year will hopefully be the LRT-2 extension to Masinag, Antipolo, and [the extension of a] branch of MRT-3... to San Jose, Del Monte. These are the PPP projects, which we think we can pull off within this second semester up to first quarter of 2012,” Mr. Panlilio said. He also acknowledged the need to ease rules on foreign ownership to expedite the rollout of PPP projects. “We are also currently working on at least five measures which should make our country more investor-friendly,” Mr. Panlilio said. “Based on our consultation with lawyers, these measures are considered unconstitutional because they were discretionarily imposed and not even part for the negative list.” “One of the issues we will review is the operation of public infrastructure, so we can examine how to amend the law to allow foreigners to be majority stakeholders -- probably reverse the [40% foreign ownership cap] rule, which I think will benefit many of our projects,” he said. “Construction is also one of the areas,” he added while declining to name the rest of the sectors as the review continues. Officials of the American and European chambers said they would welcome efforts to reform such policies amid confusion on the interpretation of the ownership cap. “We welcome any attempt to create a level playing field to allow competition for the benefit of consumers at large,” said Henry Schumacher, European Chamber of Commerce in the Philippines executive vice-president, in a text message. John D. Forbes, American Chamber of Commerce in the Philippines legislative committee chairman, said: “I hope what [Mr. Panlilio] said today is a beginning of a complete review of the foreign investment negative list to make it smaller in order to implement the level playing field envisioned [by the Aquino administration]” He suggested that the government implement even bolder ownership reforms. “Between 2000 and 2010, there was only one change... in the foreign investment regime which was the [Retail Trade Liberalization Act of 2000], and at that rate, we wonder what does it mean for the government to create a level playing field... if the constitution restricts foreign investments in these different areas,” he said. “Having said that, I welcome the direction the government is taking for infrastructure, [but] since the year 2000, there has been no leadership in making the negative list less negative and to increase competitiveness in the country,” he continued. -- Eliza J. Diaz |
U.S. Stocks Advance on Earnings, Europe Hope U.S. stocks rallied, extending a weekly gain for the Standard & Poor’s 500 Index, as European officials announced 160 billion euros ($230 billion) in aid for Greece to stop the region’s debt crisis from spreading.Morgan Stanley jumped 11 percent, the most since April 2009, after the largest brokerage posted the only gain in trading revenue among major U.S. banks. Motorola Mobility Holdings Inc. soared 12 percent after Carl Icahn urged the handset maker to explore alternatives for its patents. Medco Health Solutions Inc. (MHS) rose 14 percent after Express Scripts Inc. (ESRX)agreed to buy the pharmacy-benefits manager for $29.1 billion. The S&P 500 added 1.4 percent to 1,343.80 at 4 p.m. in New York, extending its gain this week to 2.1 percent. The Dow Jones Industrial Average climbed 152.50 points, or 1.2 percent, to 12,724.41. “They’re making sure Greece is properly funded, and hopefully settle down any infection that comes from Greece to the rest of the market, like we’ve seen hitting Italy and Spain,” Madelynn Matlock at Huntington Asset Advisors in Cincinnati said in a telephone interview. She helps oversee $14.8 billion. “You’re seeing rhetoric on what is possible in aiding Greece and how we can make it work.” Equities climbed as euro-area leaders redoubled efforts to end the region’s 21-month sovereign bond crisis as they risked a temporary default to ease Greece’s debt burden and erected a firewall around Spain and Italy. Spooked by a bond market selloff last week, leaders empowered their 440-billion euro rescue fund to buy debt across stressed euro nations after eight hours of talks in Brussels. The fund can also aid troubled banks and offer credit-lines to repel speculators. Treasuries Tumble Amid Summit in Europe, Lack of Progress on Debt in U.S. Treasuries fell for a second day as European Union leaders redoubled efforts to end the region’s debt crisis, while U.S. officials reported no progress on raising the federal debt limit and cutting the budget deficit. Benchmark 10-year note yields rose to the highest in more than a week as Standard & Poor’s reiterated it sees a 50 percent chance of downgrading the U.S. credit rating within three months. European leaders at a summit risked a temporary default to ease Greece’s debt burden and erected a firewall around Spain and Italy. The U.S. will sell $99 billion in notes next week. “EU leaders are going in the right direction,” said William Larkin, a fixed-income money manager at Salem, Massachusetts-based Cabot Money Management, which oversees $500 million. “There was a lot of optimism in the market today. It’s probably going to be short-lived.” Yields on benchmark 10-year notes climbed nine basis points, or 0.09 percentage point, to 3.01 percent at 5:03 p.m. in New York, according to Bloomberg Bond Trader prices. It touched 3.04 percent, the highest level since July 11. The 3.125 percent securities maturing in May 2021 dropped 23/32, or $7.19 per $1,000 face amount, to 100 30/32. Thirty-year bond yields gained six basis points to 4.31 percent. Two-year yields rose two basis points to 0.4 percent and touched 0.41 percent, the highest since July 8. The euro advanced to $1.4435, the highest in two weeks, and global stocks gained, pushing the S&P 500 Index (SPX) up 1.4 percent. |
Oil Climbs for Fourth Day on Optimism Over U.S. Economy, Greek Debt Crisis Oil climbed for a fourth day and headed for a fourth weekly gain as investors bet fuel demand will rise amid improving manufacturing growth in the U.S. and optimism Europe will contain its debt crisis. Futures gained as much as 0.5 percent after climbing 0.7 percent yesterday. Manufacturing in the Philadelphia area rebounded in July from its first contraction this year while European officials said Greece will receive new aid. Prices also rose after theInternational Energy Agency said it won’t extend a release of oil supplies. “The Philly Fed numbers fed into underlying hopefulness about the economy,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “It looks like Europe has come to an agreement about Greece, and with that prospects for the region’s economy and fuel demand will improve.” Crude for September delivery climbed as much as 48 cents to $99.61 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.37 at 9:13 a.m. Sydney time. The contract yesterday gained 73 cents to $99.13, the highest since June 14. Prices are up 2.2 percent this week and have risen 25 percent the past year. Brent oil for September settlement fell 64 cents, or 0.5 percent, to end the session at $117.51 a barrel on the London- based ICE Futures Europe exchange yesterday. The European benchmark contract traded at a premium of $18.38 a barrel to U.S. futures, compared with a record close of $22.63 on July 14. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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