Fourth quarter growth beats expectations !!

The Wall Street Journal reported last Friday that the economy grew faster than expected in the fourth quarter, helping to buoy the net yearly effect of a downward revision in third quarter growth. The National Statistical Coordination Board announced Thursday that the economy had grown 0.8% in the fourth quarter, growth that was previously projected to fall between 0.6% and 1.6%. Though avoiding recession in 2009, the country produced only 0.9% growth, the slowest performance since the Asian crisis in 1998.

Though evidence of a recovery is certainly afoot, the Bangko Sentral ng Pilipinas has decided to hold policy rates steady until performance gains display more obvious traction. The BSP estimates inflation will fall between 4.5% to 5.4%, which is happily within its yearly target forcast of 3.5% to 5.5%.

After the announcement Thursday, Socioeconomic Planning Chief Augusto Santo told reporters that "This year is a welcome start for all of us: the global rebound is underway, our economy has proven itself resilient, and elections will bring fresh mandates and new energy to our society. We are thus optimistic."

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The following slide is small and thus loses the nuance of such slight changes in the economic atmosphere. I include it nonetheless to visualize WB projections of a robust return to growth for 2010, followed by a slight flattening, perhaps to adjust for the expectations of policy rate changes by the BSP.

Mango

A 3.5 kg (7.7lbs) mango, harvested in the Philippines, was confirmed as the heaviest mango in the world by the Guiness World Records, the Philippine Star reported today. They can produce not only the largest but the most delicious mangos, too. According to the Wikitravel, there are green, ripe and dried mangoes in the Philippines, and they are "among the best in the world."
I became a fun of this fruit after trips to tropical countries. Feb. and March are a little early for the season, but we can always try dried ones.

China and Southeast Asia

An article a few days ago in The Financial Times discusses the contradictory feelings that have accompanied China's economic ascendancy in southeast Asia. Many countries in the region are grateful to China for drawing the attention of investors from around the world, and China's willingness to overlook human rights violations is also welcome. But ASEAN countries are running ever larger trade deficits with China, and countries like the Philippines are fearful that local companies will be strangled by competition from the mainland.

Language.

It's an exciting day for IEDP 2010 - we're going to have a Filipino language class today! I'm a bit of a language nerd, so I'm looking forward to it, at any rate.

Filipino, or Tagalog, is the one of the two official languages of the Philippines - the other being English - but there are twelve other indigenous languages with over a million speakers, and there are about 150 more languages spoken in the country. (Filipino languages are part of the Austronesian language family, which includes pretty much all of the languages of the Pacific Islands, including Hawaiian.)

And if that weren't enough, Tagalog itself has several regional variants.

On the bright side, Filipino is at least written in the Latin alphabet, so we don't need to learn how to read and write all over again.

If you want to wish us luck in our linguistic pursuits, feel free - it turns out that the traditional Filipino phrase for "good luck" is..."good luck"! That, at least, will be easy to remember.

El Nino and Drought

The National Weather Service Climate Prediction Center reported last Thursday that strong El Nino conditions exist in the Pacific and that these conditions are expected to persist through at least early spring 2010.(1)

According to the International Research Institute for Climate and Society (IRI) at Columbia University, El Nino cycles are linked to drought in the Philippines: “Droughts are not generally associated with the Philippines… but during El Nino cycles, much of the country experiences moderate-to-severe dry periods that can last for a season or more. For areas already water strapped, such periods can spell disaster for hundreds of thousands of households as well as individuals whose livelihoods depend on regular precipitation."(2) During an El Nino year, IRI notes, “the water inflows into the Angat reservoir are often significantly decreased [see picture], placing substantial duress on the domestic water supply and irrigation needs of farmers"--leading to tensions between urban dwellers and those who work outside the city limits.(2)


The Angat Reservoir, 2004

Over the weekend, the Philippine Daily Inquirer reported that, “The water level at Angat Dam over a week ago was already at 201 meters, down from the normal level of 210 meters. When the level reaches 150-155 meters, hardly any water can be delivered by May. At the rate Metro Manila consumes water daily—4 million cubic meters—by April-May, it may have a huge water crisis.”(3) Reynaldo G. Geronimo, the reporter for the Inquirer, continues by questioning the government’s response to this pressing but reoccurring issue.(3)

IEDP THEME SONG!

The IEDP Documentation Team, who administers this blog, has initiated a vote to determine a popular song that will serve as a rallying point for the IEDP class in its study of economic development in the Philippines. An anthem if you will.

The mechanism for determining this song is an internal online survey, which students may use to nominate a song for the course. However, this blog post is intended to encourage readers to submit their own nominations for a piece of music that will motivate and inspire the most profound and incisive analysis and advocacy by our cohort.

Please use the "Comments" section here to submit nominees.

My initial response (and my nomination in the survey) is a song called Filipino Box Spring Hog, from Tom Waits' evocative and deeply felt album "Mule Variations". The song is a desperate and lowdown paean to greasy food and stinky booze, and it has nothing to do whatsoever with the Philippines.

However, after more careful consideration, another song reveals itself to be the only rational choice. This choice is inspired by Thursday's (which it turns out is not actually the future) reported 6.1-magnitude earthquake 141 km east-southest of Pandan. (No damage has been reported, and no tsunami warnings have been issued.)

That song is - quite obviously - Ring of Fire, by Johnny Cash.

Borrowing rates to remain at 4%

After two wonderful presentations on macroeconomic policy that were completely lost on me yesterday (by Professor Linda Lim of the U of M Ross School of Business and the first (of two) IEDP Economics Team), an enlightening article from Bloomberg on Bangko Sentral’s decision to keep interest rates at 4% as the country continues to benefit from stimulus measures to combat the global recession.

What the articles explains lucidly enough for me to understand is the importance of determining the appropriate time to raise borrowing costs in order to capture the intended stimulating benefits of the low rates without creating conditions that would “stir up inflation and create destabilizing asset bubbles.”

Whatever those are.

Farmers March In Remembrance of 1987 Massacre

Farmers and left-wing activists - numbering thousands - burned an effigy of GMA (President Arroyo) and chanted for justice on Friday, 22 January 2010, according to the Washington Post. The march commemorated the 1987 Mendiola massacre, when soldiers gunned down 13 protestors demanding land reform. No on has been charged for the killings to date.

A year after the Mendiola massacre, late President Cory Aquino signed a law to redistribute land to tenant farmers, but the law contained a provision that exempted large landholdings. It is worth noting that a third of PH's 90 million people are poor, many of them landless farmers.

Demonstrators claimed that 560 farmers lives have been killed since GMA took office in 2001. Besides seeking justice for the deaths, activists also pressed for agrarian reform, including redistribution of land owned by wealthy and influential families. Bayan, a left-wing alliance, called for political candidates of the May 2010 elections to implement reform.

Rep. Liza Masa, who participated in the protest, said: "We cannot have social justice in our country as long as landlords still hold large tracts of land, and the farmers continue to be dispossessed of their land."

Full article.

Estrada Can Run for the Presidency

The Philippines election commission permitted Estrada to run for the presidential campaign in May, the New York Times reported on Jan. 20. Estrada was elected as the 13th president in 1998 but could not complete his six-year term because of the corruption allegation. Although the Philippines constitution prohibits the President from reelection, he has been claiming that this does not apply to him.

In the first IEDP class meeting, we talked about if Estrada can run for the coming election and saw his campaign DVD. Regarding the second class meeting topic "Decentralization and Public Health in Philippines," during his presidency, Estrada implemented several new programs to make decentralization work in the health sector.

Large Year-on-Year Jump in Remittances

Bangko Sentral ng Pilipinas, the central bank of the Republic of the Philippines, announced last Friday that remittances from overseas Filipinos grew 11.3% in November, “posting the highest year-on-year expansion since October 2008.” (1) Although only including sums remitted through banks, families in the Philippines collectively received approximately $1.5 billion (USD) from abroad. This brings the total to $15.8 billion (USD) for the year, a 5.1 percent increase over the same period in 2008. Major sources of remittances included the U.S., Canada, Saudi Arabia, U.K., Japan, Singapore, United Arab Emirates, Italy, and Germany.

Filipino Cuisine

Food may not be the first thing to pop up in one's mind when considering all things Filipino, but there are some gems and hidden surprises to uncover, as evidenced by Wikipedia's entry on 'Filipino cuisine'.

I'd like to take a moment to reflect on three Filipino traditions or dishes that particularly struck me during my summer in PH. The following helped make my summer memorable and more adventurous, in some cases:

1) MERIENDA is a light meal or afternoon snack (derived from Spanish) that seems to be adhered to religiously (at least in my office, it was). It is comparable to an afternoon tea, but can often be heavier than a light pastry. Traditional kape (coffee) accompanies foods like breads, pastries, and sticky rice cakes. Dishes often eaten during merienda include a variety of noodles, soups, and dumplings.

Meriendas are not just for food consumption - they are a time and place for social gathering and catching up with co-workers or family and friends. Meriendas can be an integral component of the social life in PH.

2) HALO-HALO is a cold dessert made of shaved ice, milk, sugar, and an assortment of additional ingredients - including coconut, halaya (mashed purple yam), caramel custard, plantains, jackfruit, red beans, tapioca - and just about anything else sweet and sugary that you can think of. The great thing about a halo-halo is that you can modify the contents as you wish and experiment creatively. And on a hot, humid, summer afternoon, nothing beats a halo-halo to refresh you (and also get a sugar high!).

3) BALUT is a fertilized duck or chicken egg with a nearly-developed embryo inside that is boiled and eaten in the shell. It is commonly sold as street food. The courageous can see photos here.

I had the privilege of trying balut during a merienda, and it was quite something. The best way I can describe it is that it tastes like a normal egg but intensified in flavor by 100x, and with some bones and feathers along the way. It is probably a good idea to have a balut-lover nearby when trying this delicacy - I was lucky to have a co-worker who taught me the best way to eat a balut, i.e. drink the juices first, add some salt on the embryo, and enjoy!

The list above is in no way a fair representation of Filipino cuisine, but I hope that it sparks interest in researching and trying some Filipino foods.

Short term marriage contracts sought, criticized

The Philippine Star reports that the Commission on Elections has been asked by a party-list group to revoke the credentials of the political organization 1-ABAA, which seeks marriage reform. The group, which hopes to alter marriage contracts to automatically expire after ten years, claims that many women find it difficult to exit abusive marriages under current law. Margie Tajon, the group's president, told GMANews.TV that she sought to “save the incompatible couples the trouble of going through a tedious and expensive annulment process." However, Rep. Liza Maza argued that the statute would fare worse for battered women, explaining that “There is a cycle of violence that involves the honeymoon stage and the violent stage, and it is possible that the batterer will suddenly shift from violent stage to honeymoon stage when the 10-year expiration nears and the cycle of violence will just continue".

According to ABA chairman Rep. Leonardo Q. Montemayor, who has proposed the ban on Tajon's group, the Commission on elections must take note of the Constitution, noting that “Under Sec. 12, Article II and Sec. 1, Article XV of the Constitution, the State must recognize the sanctity of family life and ensure its protection, strengthening and total development as a basic autonomous social institution and foundation of the nation” If the Commission on Elections dissolves 1-ABAA, it will nullify both the group and any planned proposals.

Trade Skirmish between the U.S. and the Philippines

A hat tip to Alan Deardorff for informing us that the U.S. filed a WTO case against the Philippines last Thursday, as reported here in the WSJ. Excise taxes on distilled spirits imported into the Philippines vary by the ingredient that is fermented to produce alcohol, and the U.S. believes the taxes are set so as to discriminate against American-made spirits, which are usually made using different ingredients than the same spirits made in the Philippines.

Tinikling is the national folk dance of the Philippines. I'll let Wikipedia explain it: "The tinikling is an indigenous dance from the Philippines involves two people beating, tapping, and sliding bamboo poles on the ground and against each other in coordination with one or more dancers who step over and in between the poles in a dance." Having a hard time picturing that? Check out these videos. This is extremely cool:

SUPPLEMENTARY READING LIST

Abinales, P. Making Mindanao.

Asian Development Bank. (2008). Development of Poor Urban Communities.(1)

Asian Development Bank. (2007). Philippines: Critical Development Constraints.(2)

Bagayaua-Mendoza, G. (2008). Global Integrity Scorecard: Philippines.(3)

Bello, W. e. (2004). The Anti-Development State: The Political Economy of Permanent Crisis in the Philippines. Quezon City: University of the Philippines.

Corpuz, O. (1997). An Economic History of the Philippines. Quezon City: University of the Philippines.

Gamalinda, E. Empire of the Memory.

Hedman, E.-L., & Sidel, J. T. (2000). Philippine Politics and Society in the Twentieth Century. London: Routledge.

Iizuka, M., Botman, D., Ree, J. J., & Halikias, I. (2008). Selected Issues, Philippines.(4)

International Monetary Fund. (2008). Staff Report for the 2008 Article IV Consultation, Philippines.(5)

Karnow, S. In Our Image.

Koppel, B., & Kim, D. Y. (Eds.). (1994). Land Policy Problem in East Asia: Toward New Choices. Honolulu: East-West Center.

McCoy, A. (Ed.). An Anarchy of Families.

McCoy, A. Band of Brothers.

Medina, A. T. (1996). Asian Economic Tigers: A Philippine Comparison.

Ong, C. Banyaga.

Political & Economic Risk Consultancy LTD. (2009). Asian Intelligence.

Rizal, J. El Filibusterismo.

Rizal, J. Noli Mi Tangere.

Saulo-Adrano, L. (2009). A General Assessment of the Comprehensive Agrarian Reform Program. Philippine Institute of Development Studies.(6)

Scott, W. H.

Sionil, F. Rosales Saga (books 5, 6 or 7).

Steinberg, D. The Philippines: A Singular and Plural Place.

Stephanson, N. Cryptonicrom.

The Lonely Planet Philippines.

Vos, R., & Yap, J. (1996). The Philippine Economy: East Asia’s Stray Cat? London: Institute of Social Studies.

Werve, J., & Integrity, G. (Eds.). (2008). The Corruption Notebooks.

Wignaraja, G. Foreign Direct Investment, Innovation, and Exports: Firm-Level Evidence from People’s Republic of China, Thailand, and Philippines. Asian Development Bank.(7)

World Bank. (2009). Philippines Quartely Economic Update.(8)

Yang, D., & Martinez, C. Remittances and Poverty in Migrants' Home Areas: Evidence from the Philippines. Working Papers, University of Michigan, Dept of Economics.(9)

The Philippines, Peacekeeping, and Port-au-Prince

Three Filipino peacekeepers in Haiti are believed trapped following Tuesday’s earthquake, caught when the UN headquarters in Port-au-Prince collapsed. (1)

How many Filipino UN peacekeepers are there? (2)

Haiti: 172

• Police: 15
• Troops: 157

Worldwide: 1,062

• Police: 405
• Military Experts on Mission: 23
• Troops: 634

Among countries contributing UN peacekeeping personnel, the Philippines ranks 24th. The United States ranks 72nd (contributing 75 peacekeepers), just ahead of Albania but behind Mali. (3)

Where are Filipino UN peacekeepers deployed? (4)

MINUSTAH

United Nations Stabilization Mission in Haiti

Police: 15; Troops: 157

UNAMID

African Union/United Nations Hybrid operation in Darfur

Police: 169

UNDOF

United Nations Disengagement Observer Force (Israel-Syria)

Troops: 337

UNMIL

United Nations Mission in Liberia

Police: 26; Experts on Mission: 2; Troops: 137

UNMIS

United Nations Mission in the Sudan

Police: 42; Experts on Mission: 11

UNMIT

United Nations Integrated Mission in Timor-Leste

Police: 153; Experts on Mission: 3

UNMOGIP

United Nations Military Observer Group in India and Pakistan

Experts on Mission: 3

UNOCI

United Nations Operation in Côte d'Ivoire

Experts on Mission: 4; Troops: 3

Turning Briefly from the Pacific

Although this blog is dedicated to the study of economic development in the Philippines, Tuesday's earthquake in Haiti and the dramatic humanitarian challenge it caused is a reminder of the urgency and complexity of an effective international disaster relief system. Instead of recapitulating one of the New York Times articles on the right in blogg-ier form, let's take a moment to identify the critical needs of Haitians and the opportunities available to contribute to the relief effort:

Partners in Health, with its long and famous history of providing health services in Haiti, is now at the forefront of the logistical challenge of providing disaster services. Contributions to Partners in Health can made here.

Partners in Health is especially in need of doctors, nurses, and medical personnel. From their website:

"As patients flood to our sites from Port-au-Prince, we're finding ourselves in need of both medical personnel and supplies. In particular, we need surgeons (especially trauma/ orthopedic surgeons), ER doctors and nurses, and full surgical teams (including anesthesiologists, scrub and post-op nurses, and nurse anesthetists).

If you are a health professional interested in volunteering, please send an e-mail to volunteer@pih.org with information on your credentials, language capabilities (Haitian Creole or French desired), availability and contact information.

Doctors Without Borders is also in Port-au-Prince, struggling to treat hundreds of the injured. Donations can be made at their website.

Also, that "text 'HAITI' to 90999 to donate $10 American Red Cross relief for Haiti" message that you’ve been seeing everywhere for a full day is a savvy use of social networking technology and an innovation in philanthropy that's probably worth studying when the appropriate time comes.

The commentary to this post can serve as the IEDP team's repository of information on the relief effort. Please post any other information about organizations who are working in Port-au-Prince or other opportunities to help provide crucial services to the victims of this disaster.

Top Frontier Taking Over San Miguel

Business Week via Bloomberg reports that the board of the San Miguel Corporation has agreed to a takeover by Top Frontier Holdings Incorporated. Top Frontier will offer 75 pesos per share, which puts San Miguel at a market value of 171.7 billion pesos, or $3.75 billion. San Miguel is the largest food and beverage company in the Philippines. It owns San Miguel Beer, which dominates the local market and which is apparently one of the largest beer brands in the world.

Top Frontier is controlled by several members of the San Miguel board of directors. It is owned by Roberto Ongpin, a former trade minister, and Inigo Zobel, a member of one of the wealthiest families in the Philippines.

Part the motivation for the takeover may be a desire to reduce government influence over the company. The government owns a disputed block of San Miguel stock. It was acquired under the Aquino government, who seized it from Eduardo Conjuangco, Jr. on the grounds that he acquired it with public funds. An anti-graft court has apparently ruled that the government does not have a legitimate claim to the stock, but the Supreme Court has yet to rule on the government's appeal. Conjuangco, chairman and CEO of the San Miguel board, has nevertheless been permitted to vote his former shares.

On January 6, San Miguel Corporation announced that it would acquire a 49% stake of Top Frontier. According to the Philippine Daily Inquirer, this significant minority stake was assumed in order to expand San Miguel's access to bank loans. Under the single borrower's limit (SBL) rule, banks in the Philippines are limited in the amount of lending they can make to a company or its subsidiaries. However, corporate affiliates are exempt from the SBL cap.

San Miguel began operations as a brewer in 1890, during the waning days of Spanish colonization.

Policymakers cope with soaring sugar prices

The Dow Jones Wire Service reported earlier today that PH policy makers were convening to remove import duties on sugar, in order to tame soaring domestic prices. Apparently the result of rising global demand for cane and beet sugars, prices have been trending upwards. However, the recent volatility has been somewhat unusual.

Remarkably, the WHO publishes data on world sugar consumption by country. In 2005, PH consumed approximately 24 kg per capita. This is approximately equivalent to South Korea's consumption rate, 26 kg per capita, which is unusual given that ROK's per capita GDP is larger by a factor of 10.

Filipino Peacekeepers in Conflict Areas at All-Time High

A record number of Filipino peacekeepers are currently depolyed in various conflict areas worldwide: a total of 1,056 military and police peacekeepers are serving in 9 UN peacekeeping missions, as reported by the Philippines Mission to the United Nations.

656 are from the personnel of the Armed Forces of the Philippines (AFP) and 415 are officers from the Philippin National Police (PNP).

Majority of the AFP officers and personnel deployed are part of the peacekeeping infantry battalion in Golan Heights, humanitarian troop in Darfur, military observer group in Kashmir, and the stabilization mission in Haiti. The rest are serving as military observers, liaison officers and staff officers in Sudan, Cote d’Ivore, Kashmir and Timor Leste.

The PNP officers are similarly deployed in Darfur, Liberia, Sudan, Timor Leste and Haiti, with a lone officer assigned in Afghanistan.

The Philippines is now in the 23rd position in the list of top troop and police contributing countries, a 40% increase in troop deployments from 2008.

Full article here.