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- Current issue May 15,2008
BUSINESS
WB approves US$ 1.2M grant for RP gov’t reforms
MANILA – The World Bank (WB) has approved a total of US$ 1.2-million grant under its Institutional Development Fund (IDF) for reforms in several Philippine government agencies.
In a statement, WB said the grant includes US$ 300,000 for capacity and efficiency improvement of the Commission on Audit (COA), US$ 299,985 for the Department of Budget and Management (DBM) PhilGEPS Group Procurement Service (US $ 299,985) specifically for the government’s electronic procurement system, US$ 300,000 for the Fiscal Planning Bureau and US$ 260,000 for the Local Government Academy .
WB Philippines Country Director Bert Hofman said the Bank “is pleased to assist the Government’s efforts to build the capacities of state agencies.”
“We expect these grants to the COA, the DBM and LGA to improve governance of public resources and delivery of services to Filipino people,” he added.
Budget Secretary Rolando Andaya said the grant “will enhance DBM’s capacity to develop sound policy analysis which will improve the quality of the recommendations given to the Development Budget Coordination Committee and to the President and Cabinet.”
He stressed that “we hope this grant will help us continue to restructure the budget towards strategic policies and priority areas and be more responsive to the needs of the times through sound technical analysis and systematic internal consultations with key stakeholders on trade-offs, agencyoutputs/outcomes and multi-year implications of strategic policies.”
He said PhilGEPS grant “will enhance it with features like online bidding and payments.”
BDO Chair hopes P5B Tier 2 offering will not
be oversubscribed
MANILA – Banco de Oro Unibank (BDO) on Monday started to offer its P5 billion unsecured subordinated Tier 2 notes aimed at boosting the bank’s capital.
BDO chair Tessie Sy-Coson hopes that the issuance will not be oversubscribed because of the debt instrument’s high rates.
Coson told reporters after the bank’s investors’ forum for the notes issuance that they were “thinking of just having a limited offer because the rate is high for the bank.”
She said this is the reason why the other bank officials and join lead arrangers “we’re saying to reserve early because we don’t know how we will be able to work on that.”
“We’re not very open to go beyond the P5 billion,” she added.
BDO has set the interest rate of the 10-year note, which is callable in five years at 8.5 percent, which BDO officials said is high.
The issuance, on the other hand, has an oversubscription option. Offer period is set until May 23 but BDO officials and the issuance’s lead arrangers have the option to cut it early.
Joint lead arrangers are Hongkong and Shanghai Banking Corporation (HSBC), ING Bank N.V., and Standard Chartered Bank (SCB) while selling agents are these three bank and BDO.
BDO President Nestor Tan, during the forum, said the fund that would be raised during the issuance will be used to refinance the bank’s $ 200 million notes issuance callable this July.
Standard and Chartered Bank downgrades
forecast for RP’s economy to 4.1%
MANILA – Standard Chartered Bank does not see the Philippines decoupling with the US, thus the bank downgraded its forecast for the local economy to 4.10 percent from the previous five percent.
But for 2009, the Philippines is projected to post slightly higher growth of 4.40 percent, after the three decades high of 7.3 percent in 2007, said SCB Regional Economist Simon Wong.
“Slowdown will be led by external sectors,” he said.
The lower forecast is not projected by the SCB but by other economists as well as the government, with initially targeted growth this year between a range of 6.3 percent to seven percent but lowered it to the original low-end forecast of 6.1 percent.
Inflation, which remains unstoppable due to record high prices of imported oil and food items particularly rice, is seen to peak in the second quarter this year at 8.10 percent but will average at 6.20 percent for the whole year.
This is higher than the government target of three to five percent and way above the 2007 average inflation of 2.8 percent.
SCB forecasts first quarter inflation this year to average at 5.50 percent, third quarter at 6.30 percent and fourth quarter at 5.19 percent.
Price increases are seen to moderate in 2009 at around 4.10 percent on the average with the first two quarters figure at 4.30 percent and four percent, respectively.
Last April, inflation hit 8.3 percent due mainly to higher oil and food prices.
Wong said higher prices are seen to affect the fiscal side and trade balance, even as he cited the government’s measures to alleviate the lives of the poor in these trying times.
He said any granted wage adjustment also adds to risks in inflation since it will push higher current prices of goods.