Aquino hit on Arroyo pork ,Pampanga rep is no sacred cow, says senator Sen. Alan Peter Cayetano Tuesday said the Aquino administration was treating former President Gloria Macapagal-Arroyo, now a Pampanga representative, like a “sacred cow” by setting aside P2.2 billion in public works funds for her district in the proposed national budget for 2011. “Why is she being babied instead of being punished? It appears that she is still well-connected with this administration,” Cayetano said. He said Arroyo was allocated the huge amount despite being painted by the Aquino camp as enemy No. 1 in the May national elections. Cayetano, who supported Sen. Manuel Villar in the presidential election, said the administration should practice what Mr. Aquino had preached during the campaign by adopting a “tuwid-na-daan” (straight-path) budget. “I really cannot understand why GMA is still getting preferential treatment under this new administration? Why are they trying to equalize the budget among all congressmen when the best solution is to redistribute Arroyo’s P2.2-billion pork barrel to poorer provinces that deserve it,” he said. While hearing the budget, the House of Representatives discovered that P2.2 billion was allocated for Arroyo’s district in the P90-billion proposed budget for 2011 of the Department of Public Works and Highways (DPWH). In contrast, five House members have zero allocation in their districts, while others have less than P50 million. Narrowing gap To partly close the gap, Malacañang and a House committee agreed to tap P1.2 billion in lump sums in the proposed DPWH budget to bring to at least P50 million the infrastructure fund for each congressional district. The P50 million is on top of the P70 million in Priority Development Assistance Fund (PDAF), pork barrel allotted annually to members of the House. Senators are each entitled to P200 million in PDAF. Party-list representatives are entitled to the PDAF, but not to the additional P50 million and to the road users’ tax, which are available to district lawmakers. Unfair Cayetano said the situation was unfair considering that Arroyo acted “vindictively” over the past five years by withholding the pork barrel releases of her critics in Congress. He questioned Public Works Secretary Rogelio Singson’s failure to include infrastructure funds in Arroyo’s district among the P3.2-billion worth of infrastructure projects that he discontinued and placed for rebidding. “They should have moved to renegotiate these contracts and have them bid out like the other projects voided by Secretary Singson. Why is the former President being treated as an exception?” Cayetano asked. Review budget system Cagayan de Oro Rep. Rufus Rodriguez said the bicameral committee should look into the distribution of infrastructure funds by region and by district in the P1.645-trillion proposed budget for next year, and rectify “inequities.” He said a lot of money was being given to Luzon, especially Pampanga, referring to Arroyo’s home province. After approving on second reading the proposed 2011 budget, the House is collating proposed amendments for its eventual approval on third reading. Once the House and the Senate approve the budget measure, they will convene the bicameral conference committee to reconcile their versions. Open to realignment House leaders did not rule out the possibility that the P2.2-billion allocation could be realigned, or even slashed at the bicameral committee. “We should find out what it’s for. I think its benefits go beyond the district and maybe even beyond the province,” Speaker Feliciano Belmonte Jr. said by text in reply to a question. But he added: “If it’s a political thing, certainly it should be reallocated, reduced or even deleted. And the bicam is the proper place as you said.” Cavite Rep. Joseph Emilio Abaya, chair of the House appropriations committee, agreed. “That’s very possible. It will boil down to the merits of the project,” he said when asked on the possibility of slashing the amount at the bicameral committee. But he added: “The bulk is foreign-assisted projects. Politics shouldn’t get into it.” Foreign-assisted While she was still the President, Arroyo managed to raise the public works budget in Pampanga’s second district with foreign-assisted projects amounting to P2,220,526,000, according to Akbayan party-list Rep. Walden Bello. These will be funded by P564.359 million from the national budget, and P1.678 billion in loans from the Japan Bank for International Cooperation and the Korean Development and Cooperation Fund, he said. Singson has authorized only P22 million public works funds for Pampanga in 2011, but the rest of the infrastructure funds worth P2.2 billion are loans contracted by the then President. If the bulk of the P2.2 billion would be funded by foreign loans, the government has to comply with the conditions of the loan agreements, Budget Secretary Florencio Abad said. “I understand from Secretary Singson that the P2.2 billion is a foreign-assisted project, and therefore covered by a loan agreement. In which case Congress cannot ignore the conditions of the loan,” he said by text message. Singson echoed Abad’s position, saying that Congress can only realign the amount if it stopped the projects altogether. “If those projects are stopped, the foreign funders will complain. I don’t think it’s correct to realign this. What’s important is to do this right,” he said. Hazard-mapping project Singson said these undertakings were part of a massive, multiphase project in Central Luzon initiated years ago to clear and clean up river systems that flow into Manila Bay, and it just so happened that these straddled Arroyo’s district. The two major projects are the Pinatubo hazard-mapping project and the Korean-funded roads contracted as early as 2003, according to reports. “There should be a more careful [study] of the entire budgeting system. There should be fixed guidelines in terms of allocation,” he said by phone, noting that the differing allocations showed “lapses in the budget system.” Ma. Elena Bautista-Horn, the spokesperson for Arroyo, said Congress couldn’t slash the P2.2 billion without risking penalties. “It’s a foreign loan. Bicam can’t slash it. They can hold the (Philippine government) counterpart but we will be paying the interest just the same, plus the penalties for the delay,” she said in a text message. Amid the dispute, Sen. Teofisto Guingona III filed Senate Bill No. 2185 which seeks to open to the public the bicameral meeting on the budget to ensure transparency. Most of the horse-trading and last-minute insertions are made during the meeting of the bicameral committee.
The peso broke into the 42:$1 territory and closed at its highest level in two-and-a-half years, buoyed by a surge in remittances sent by Filipinos abroad and the influx of “hot money” into the local stock market. The peso closed Tuesday at its intraday high of 42.755 against the dollar, its strongest finish since May 16, 2008. The intraday low settled at 43:$1. Volume of trade moved above the $1-billion mark to reach $1.08 billion, up from $912.2 million registered before the market closed prior to the long weekend. Traders said the appreciation of the peso was aided partly by an increase in remittances as the Christmas season drew near and as enrollment for the second semester began. But traders said that remittances accounted for just half of the story of the peso’s rise. They said optimism of investors on the Philippines and Asia in general was boosting the peso and other Asian currencies. “The rise of the peso also had to do with optimism given impressive macroeconomic fundamentals of the country and talks that the Philippines actually deserves an upgrade in its credit ratings,” said Marcelo Ayes, senior vice president at Rizal Commercial Banking Corp. The country’s economic managers have been harping on the country’s improving fundamentals, including its growing dollar reserves, benign inflation and robust economic growth. In the second quarter, the economy, as measured by the gross domestic product, expanded 7.9 percent year-on-year, the fastest pace in more than 30 years. Ayes said the outlook on the Philippine economy was consistent with that for other countries in Asia, which is expected to lead this year’s global economic growth. Jonathan Ravelas, market strategist for Banco de Oro, said the peso could strengthen further in the next few weeks to as high as 42.50 to $1. “Any pullback is limited to only 43:$1,” he said, noting that given the trend of rising foreign capital entering the Philippines and Asia, the peso was unlikely to weaken beyond 43:$1. Ayes projected that the peso would end the year anywhere between 42.25 to 42.50 against the greenback. Meanwhile, the BSP has been intervening in the foreign exchange market due to the sharp rise of the peso, traders said. If not for the central bank’s intervention, done through heavier dollar buying, the peso could have been even stronger, they said. BSP officials have said that while the central bank adopted a general policy of keeping a flexible exchange rate, it would intervene from time to time to avoid a sharp and sudden rise or fall of the peso. They said a sharp volatility was disruptive to business. Before the long weekend, the BSP issued new rules on foreign exchange that were aimed at tempering the rise of the peso. Under the new rules, individuals and businesses may bring out dollars from the country easier after the BSP removed documentary requirements for some foreign exchange transactions. Philippine Peso Update Presently trading at 42.55, given the strong surge of remittances and portfolio flows to the local markets, the peso has strengtthened by 7.5 percent since June. The local currency has still some gas to try the 41.50-42.00 levels in the near-term. any pullback (if any) could be limited towards the 43.00 levels. Year-end expectations is seen at the 42.00 levels. |
Wall Street climbs ahead of election results, Fed decision US stocks closed higher on Tuesday as traders eyed key congressional and local elections and a meeting of the Federal Reserve that would likely decide on new economic stimulus. Stocks traded in positive territory throughout the session as Americans began voting in the mid-term elections which appeared set to give Republicans control of the House of Representatives, while President Barack Obama's Democrats were expected to keep a narrow majority in the Senate. "The global equity markets are nicely higher as traders are optimistic that the results of today's US mid-term elections will prove favorable for future policy making surrounding business activity," said analysts at Charles Schwab. A gridlock in Congress would limit the passage of new laws that could affect the markets and reduce uncertainty, in the eyes of many traders. The blue-chip Dow Jones Industrial Average rose 64.10 points (0.58 percent) to close at 11,188.72 points, while the broader S&P 500 index advanced 9.19 points (0.78 percent) to 1,193.57. The tech-rich Nasdaq composite index was up 28.68 points (1.14 percent) to 2,533.52. The Charles Schwab analyst also noted "stocks are being supported by elevated expectations of the deployment of further stimulus efforts by the Fed after its two-day policy meeting, which began today, pressuring the US dollar and lifting commodity prices." The Fed's policy-setting panel, the Federal Open Market Committee, is expected to announce on Wednesday a decision to renew large-scale asset purchases, known as quantitative easing, in a bid to boost the weak economic recovery. And while the stocks markets have steadily risen in recent weeks in anticipation of the stimulus, traders were nevertheless anxiously waiting to find out its scope and depth. Shortly before the opening bell, Pfizer reported a third-quarter profit of $866 million, a 70 percent drop from the same period a year ago, which the world's biggest drugmaker attributed to acquisition costs. The company reported earnings per share of 54 cents, beating most analysts' expectations by three cents. Pfizer shares declined 0.9 percent. And Kellog said its third-quarter profit fell six percent from last year to $338 million as result of a drop in cereal sales and a massive June recall. Its shares fell two percent. In other corporate news, Oracle announced on Tuesday it will buy e-commerce software developer Art Technology Group for $1 billion as more and more technology firms seek to expand their online services. Oracle shares were up 1.4 percent, while Art Technology Group saw its stocks soar 45 percent on the news. The bond market rose. The yield on the 10-year US Treasury bond dropped to 2.59 percent from 2.63 percent on Monday, while that on the 30-year bond fell to 3.93 percent from 4.02. Bond yield and prices move in opposite directions. |
| Oil Advances to Six-Month High on Weaker Dollar, Fed Stimulus Speculation Oil rose to a six-month high after an industry report showed U.S. crude inventories declined and on expectations the dollar will drop following Federal Reserve economic stimulus measures. The Fed today may announce a plan to purchase at least $500 billion of long-term securities, according to economists surveyed by Bloomberg News. This policy, known as quantitative easing may weaken the dollar and increase investors’ interest in commodities. U.S. crude stockpiles fell 4.1 million barrels, the most since July, in the week ended Oct. 29, the industry-backed American Petroleum Institute said yesterday. “The news tonight from the Fed on the quantitative easing will be the big thing for the oil market,” said Serene Lim, an energy and commodity strategist at Australia and New Zealand Banking Group Ltd. in Singapore. “Everyone is a bit cautious ahead of the report. The inventory levels being drawn down are seen as a positive.” Oil for December delivery rose for a third day, gaining as much as 60 cents, or 0.7 percent, to $84.50 on the New York Mercantile Exchange, the highest since May 4. It was at $84.32 at 10:35 a.m. in Singapore. Oil closed at $83.90 yesterday, the highest since May 3, and has risen 6.1 percent the past year. The greenback has dropped 9.1 percent versus the euro since Aug. 27, when Fed Chairman Ben S. Bernanke said in a speech that the central bank “will do all that it can” to sustain economic growth, fueling speculation that a resumption of quantitative easing would debase the dollar. Crude has risen as the dollar’s fall increased the appeal of commodities as an alternative investment. The U.S. currency declined against most its major counterparts yesterday, falling 1 percent to $1.4034 per euro in New York, from $1.3893. It traded at $1.4012 per euro at 10:06 a.m. Singapore time. Stockpiles Fall Brent crude for December settlement gained as much as 47 cents, or 0.6 percent, to $85.88 a barrel on the London-based ICE Futures Europe exchange today. The contract rose 79 cents, or 0.9 percent, to $85.41 a barrel yesterday, the highest level since May 4. U.S. crude stockpiles fell 1.1 percent last week to 367.6 million barrels, the API said. Gasoline supplies slumped 3.2 million barrels to 219.7 million and distillate inventories dropped 4.7 million to 161.4 million, the group said. A government report is forecast to show that U.S. supplies of distillate fuel, including diesel and heating oil, are at their lowest level since July. Inventories probably declined 1 million barrels last week, according to the median of 17 analyst responses in a Bloomberg News survey before today’s Energy Department report. All those surveyed said supplies would fall. U.S. crude stockpiles probably increased 1.5 million barrels, the survey showed. They rose 5.01 million barrels to 366.2 million in the week ended Oct. 22, the highest level since July and 13 percent above the five-year average. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
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