foreign relations
Ties That Bind
Ex-Im Bank provides a variety of financing mechanisms, including working-capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.
In what could be a landmark deal, the Export-Import Bank of the United States (Ex-Im Bank) has signed a US$1 billion energy-based memorandum of understanding (MOU) with the Philippines’ Department of Energy (DOE).
Specifically, the MOU targets renewable-energy and liquefied natural gas projects in hopes of upgrading and expanding the Philippine energy supply as part of US-Philippines bilateral cooperation.
“The arrangement is a win-win for both our nations and evidences our deep ties and cooperation on numerous economic fronts,” Ex-Im Bank Chairman and President Fred P. Hochberg said in a statement released by the US embassy in Manila.
The MOU was signed recently in Washington, DC by Ex-Im Bank board director Patricia Loui and DOE undersecretary Raul B. Aguilos.
Under the MOU, Ex-Im Bank and the DOE will exchange information with an eye to matching development needs in the Philippines with innovative goods and services offered by American exporters.
Financing Mechanism
Since 1993, Ex-Im Bank provided US$1.3 billion in energy-sector finance to the Philippines.
“We aim to outdo ourselves and target another billion with this memorandum of understanding,” Loui said.
“Our expertise can contribute both to the renovation of current energy-production facilities and the construction of new ones,” she added.
In 1994, Ex-Im Bank financed the first project-finance transactions in the Philippines for geothermal energy – the Cebu geothermal, US$170 million; and the Mahanagdong geothermal project, also in Cebu, US$211 million.
Ex-Im Bank is an independent federal agency that creates and maintains U.S. jobs by filling gaps in private export financing at no cost to American taxpayers.
The Bank provides a variety of financing mechanisms, including working-capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.
Guarantees
In the past fiscal year alone, Ex-Im Bank earned for U.S. taxpayers more than US$1 billion above the cost of operations.
In FY 2013, Ex-Im Bank approved more than US$27 billion in total authorizations to support an estimated $37.4 billion in U.S. export sales and approximately 205,000 American jobs in communities across the country.
This year, the Bank approved a record 3,413 transactions– or 89 percent–for small-businesses.
The Ex-Im DOE deal is in line with the U.S.-Philippines Partnership for Growth (PPG), program.
The highly innovative program, which resulted from US President Obama’s September 2010 policy directive on global development, is a high-level initiative focused on economic growth in countries committed to good governance.
In the Philippines, the PPG aligns with policy reform areas outlined by President Aquino in the Philippine Development Plan.
Beyond Traditional
Under the plan, the US has committed to placing the Philippines on a path to sustained and more inclusive economic growth, and elevating it to the ranks of other high-performing emerging economies.
As envisioned, the US-backed PPG takes a comprehensive approach to development that reaches beyond traditional foreign assistance.
It also aims to address the most significant constraints to growth and to stimulate inclusive economic expansion. A joint analysis identified governance and inability to capture revenue as the top constraints to growth in the Philippines.
The PPG leverages the resources and tools of partners, especially the private sector, to increase the effectiveness of policies and institutions necessary for development.
USAID and Millennium Challenge Corporation provides more than US$800 million funding over five years to support PPG projects.
The U.S.-Philippines five-year Joint Country Action Plan prioritized the creation of a more transparent, predictable, and consistent legal and regulatory regime.
Similarly, it seeks to foster a more open and competitive business environment, strengthen the rule of law and support fiscal stability through better revenue and expenditure management.
The U.S. government has committed to a sustained inter-agency engagement in support of the PPG’s goal and objectives.
Since2011, the Philippine government has made significant progress in implementing policy and institutional reforms.
It has also achieved remarkable improvements in economic growth, competitiveness, tax revenues, and sovereign debt ranking to ensure that the growth generated is inclusive and sustainable.
Building Green: An LGU Imperative
[Speech by Sen. Loren Legarda’s Speech
Forum on Green Building Initiative
23 April 2014 – Dusit Thani Hotel, Makati ]
The future communities in the Philippines will vastly differ from the ones we live in today. As we witness the 21st century unfold, our nation faces a new set of technological, socioeconomic and global challenges that are more complex than any of us have ever experienced in our shared history. They dramatically alter the way we live in our communities, and at stake is the quality of life, not only of ours, but of our progeny.
It is the responsibility of the government, especially local government units, to understand these challenges and to take proactive measures that will optimize our nation’s future — to plan, build and support sustainable communities.
The U.N. World Commission on Environment and Development described sustainability as a development that ‘meets the needs of the present without compromising the ability of future generations to meet their own needs.’ A sustainable community is an end goal: the government and the people share a common vision, engage each other in the intricacies, and together bring it to fruition.
The first step towards building a sustainable community is to correct one of the biggest misconceptions about the environment—that natural resources are infinite. Clearly, Earth’s resources are not limitless. We are now witnessing the rapid decline of our forest cover, water supply, air quality and the demise of our biodiversity.
In order to build a sustainable society, it cannot be business as usual. We need to stop consuming more than we need and start making sacrifices, including cuts in our greenhouse gas (GHG) emissions.
The Asian Development Bank’s Key Indicators for Asia and the Pacific 2012 noted that the increase in carbon dioxide emissions could rise to 10.2 metric tons per capita by 2050 if interventions to reverse the trend are not introduced.
A cursory look now proves that the 4-degree Celsius world, which may have seemed impossible 20 years ago, is not far off today.
The Intergovernmental Panel on Climate Change (IPCC) 4th Assessment Report suggested that a 1.5 to 2.5 degrees Celsius increase in global mean temperatures from pre-industrial levels threatens extinction of 30 percent of all species.
Climate change, according to reports, threatens food security as crop yields are estimated to decline by 19 percent in Asia towards the end of the century. Rice yield in the Philippines is projected to decline by 75 percent. A 4-degree scenario doubles these impacts.
A hotter global temperature will result in damaging sea levels, extreme weather and food insecurity. Flood, droughts and hunger are already issues we are dealing with today. The more frequent and stronger storms we are experiencing have been affecting our economic development as well.
For instance, losses due to Typhoon Yolanda are estimated at 571 billion pesos, which represents close to five percent of the Philippines’ annual GDP. Meanwhile, losses due to typhoons Ondoy and Pepeng in 2009 were equivalent to 2.7% of the country’s GDP.
Indeed, climate change has changed the magnitude and frequency of extreme weather and climate events.
What has brought about the state we are in today?
Key findings of the IPCC 2012 Special Report on Extreme Events revealed that climate change is “unequivocal” and that there is 95 percent likelihood that human activity is the cause of global warming.
Human activity released 545 gigatons of carbon dioxide—the main greenhouse gas from 1750 to 2011.
The Philippines is a minor emitter of GHG. But even as we are taking steps to demand the world’s biggest polluters to reduce their carbon usage for the sake of the planet, we cannot just wait for other parties to turn their commitment into action.
We need to take care of our own backyard so to speak, and in this case we need to make that first step in controlling the levels of anthropogenic pollution. We can cut our carbon emissions, improve our environment and create sustainable communities if we build green.
This is why we are all here today in a triumphant mood. The Climate Change Commission Resolution No. 5, which has been endorsed by President Benigno Aquino, is an important piece in that blueprint towards creating a more sustainable and liveable nation.
When we build green we help reduce our global carbon footprint, we cut down costs and we improve our citizens’ overall way of life. The implementation of the National Climate Change Action Plan by LGUs makes sure that building green not only looks good on paper but also for the planet.
We must also promote community resilience. LGUs could prioritize resilience as part of their political and sustainable development agenda and make reducing disaster risk their legacy opportunity. Paying attention to protection will improve environmental, social and economic conditions, including combating the future variables of climate change. It will also make the communities more prosperous and secure than before. Initiatives could include making schools, hospitals, and other critical public infrastructure resilient against disasters.
As a fundamental development strategy, building resilience would help our government sustain the country’s socio-economic gains, and make a significant difference in poverty reduction.
LGUs are responsible for building sustainable societies where building green will be a way of life. Thus, I urge our LGUs to support this with passion and commitment. I hope that there will be no extensive bureaucratic entanglements because there is no time to lose.
I congratulate the Philippine Green Building Initiative, International Finance Corporation and Climate Change Commission for this initiative and I look forward to the success of this program so that finally all buildings and structures will be built with safety and resilience as the primary foundations. Thank you.
Ph Fastest Rice Producer In Asia
Despite strong typhoons that ravaged agricultural lands last year, Department of Agriculture Secretary Alcala told about 1,500 farmers that they had produced 18.44 million metric tons of rice, enlisting the Philippines as the fastest growing rice production country in Asia.
Alcala lauded the Central Luzon farmers for helping achieve the highest rice harvest in the Philippine history during the Farmers` Lakbay Palay hosted by the Philippine Rice Research Institute in Science City of Muñoz, Nueva Ecija, April 1-4.
The production also made the country 97-percent rice self-sufficient in 2013. Although three-percent short of the 100 percent target, the country, however, registered a 16-percent increase within three years. The country was only 81-percent rice self-sufficient in 2010.
With the rice sector`s performance last year, the agriculture secretary discouraged the public from focusing on the deficit in the 100-percent rice self-sufficiency target.
“We have tried hard. Nawa`y [mapahalagan] natin, lalo na sa mga nasa Manila, ang pagpupunyagi nating mga magsasaka. Hindi ho tayo titigil sa 97 percent. Magpupursige pa din tayo para ang isasaing ni Juan dela Cruz, dito ipupunla, dito itatanim, dito aanihin (May we, especially the city dwellers, value the efforts of the farmers. We’ll not stop at 97 percent. We’ll work harder so that the rice that we’ll serve on our table will be planted and harvested in the country),” Alcala said.
Alcala, who also unveiled the latest rice technologies, urged the farmers to be receptive of new farming practices as this may help them reduce production cost and make the price of rice more competitive in the market.
“We can`t solve problems such as rice smuggling in an instant. We still have a long way to go to stop rice smuggling. As long as our production cost is high, rice smuggling will always be around,” he said in Filipino.
He said that rice smuggling persists in the country because domestic rice prices are uncompetitive to Southeast Asian countries such as Vietnam.“Production cost in the Philippines is [about P11 a kilo] while in Vietnam, it`s around P6,” he said.
Alcala said that if farmers can peg production cost even at P8, rice smuggling will be minimized.At present, PhilRice is on its second season of implementing Palayabangan: 10-5 challenge, a nationwide farming competition that aims to produce 10 tons/ha yield at only P5 input cost per kilogram of palay.
Paper Tiger!
Nothing much can be expected from US President Barack Obama in his April 28-29 official visit in Manila.While he is likely to reassure the Philippines of Americans’ commitment to defend the Philippines in its raging territorial dispute with China, it will not make a difference, given how the US has been badly treating its Asia-Pacific ally over the past decades.
Since both countries forged their so-called Mutual Defense Treaty (MDT) in 1951, the US hardly cared about the poor state of the Philippines’ military capability.
Calls by Manila for increase in American military aid usually fell on deaf ears among policy makers in Washington. Whatever the Americans gave were nothing more than second-hand hardware – either of World War II vintage or their leftovers in the Vietnam war era.
Now that the geo-political situation has vastly changed, it’s time for both strategic allies to redraw their treaty or risk overtaken by new and bold challenges.
From what was once dubbed the “sleeping giant,” China has suddenly awaken, emerging as the biggest threat to the Philippines’ security interests as both have interlocking claims to the oil-rich Spratlys islands.
With superior naval assets patrolling the disputed chain of islands, China has bullied the Philippines, long perceived as militarily weak.
In the face of China’s aggressiveness in asserting its sovereign claims to the Sprawls, also referred to as the west Philippine sea, Manila in not a few times wanted to invoke the MDT which many politicians label as a mere paper tiger.
But thanks to cooler heads, the MDT remains as a last resort mechanism to avoid what’s likely to be a bigger problem – war.
Hopefully, Obama will use his two-day visit to assess the Philippines’ defense needs, especially in light that the two countries will enter into a new security alliance under the banner of the so-called enhanced defense security agreement.
An offshoot of months of hard bargaining, Filipino negotiators were hard put as they had to reckon with the Constitutional ban on the presence of foreign bases on Philippine soil.
In the end, they had to compromise as Manila agreed to allow US forces the use of Philippines-builtmilitary installations.
For both countries, it’s a win-win situation as they usher in a paradigm shift in their strategic ties, given China’s surging aggression in the hotly contested Spratlys.For the US, Manila’s nod to a new pact gives the Americans the leeway needed as they reposition their defense forces from theMiddle East to Asia.
Under Barack’s pivot policy, the Philippines plays a crucial role because of its strategic location in keeping peace and stability in the Asia-Pacific region.
But more than the much-needed military materiel, the Philippines badly requires America’s political succor as its row with China has assumed complex dimensions.Neither has China eased up in its flexing its military muscle in the high seas nor has it showed signs of flexibility in its diplomatic rapport with the Philippines.
As the world’s policeman, the US is in the best position to cool the tensions between Manila and Beijing for the sake of regional peace and stability.
The Rise of a New Subic
Prostitution, which has gained notoriety at the height of US military presence in Subic and Clark, is likely to rise anew as the presence of American servicemen would serve as a magnet for the resurgence of girlie bars and other night spots.
MANILA – Some 600 kms southwest of Manila, workers are building a 21-km access road linking mainland Luzon to Oyster Bay in Palawan province facing the internationally disputed west Philippine sea.
Though Palawan is a major tourist destination, the project is not meant to woo more visitors, but to transform the bay into what officials described as a “mini Subic.”
Like Subic, once the site of the United States’ biggest military facility in the Far East, the scenic cove boasts a deep natural harbor, capable of hosting large vessels, including warships.
The groundwork has already cost the government some 500 million pesos and it is expected to rise as more facilities such as piers, dry-docks and ship repair yards are to be built. Construction of the new naval port, part of the military’s modernization drive, is slated to be completed by 2016 when President Aquino’s six-year term ends.
Subic: Too crowded
Aquino has launched a US$1.8-billion military modernization program and revived plans to build new air and naval bases at Subic Bay. The budget excludes the annual defense aid of the US.
Use of the cove as a port loomed as the Philippines is beefing up its external defense capability in the face of unabated tensions with China over conflicting territorial claims.
Moreover, the Philippines is also readying itself to host an expected surge in the number of American security forces to be redeployed under the US’s pivot policy.
Manila’s zeroing in on Oyster Bay as an alternative naval port has loomed as Subic has become “too crowded” as more and more American battleships drop anchors at its piers.
Officials say that since last January, the number of visiting US battleships and other types of vessel at Subic has risen from 50 to nearly 90 and more are expected to make port calls as Manila and Washington ramp up their defense ties.
Bilateral talks had been going on, both in Manila and Washington, for expanded defense cooperation in line with their 1951 Mutual Defense Treaty and the 2001 Visiting Forces Agreement.
Just recently the Philippines opened tenders for brand-new frigates worth 18 billion pesos (US$4439 million).
Where to park?
To be armed with missiles and torpedoes, both will reinforce the two second-hand warships the US had earlier turned over to the Philippines now patrolling the west Philippine Sea.
Presided over by the defense department, the bidding has drawn interest of 11 prospective suppliers from Italy, France, South Korea and India.The Philippines is also buying five patrol boats from France for about 90 million Euros ($116 million) and some multi-role vessels from South Korea.
They will be in addition to ten state-of-the-art patrol vessels, each weighing 1,000 tons, Japan has committed to bolster the Philippines’ maritime capability.In addition, the Philippines is keen in buying a submarine to enable its naval forces to patrol the country’s maritime territory undetected — if funds permit.
“When you have a submarine, we will be able to track those violating our maritime laws without them noticing us,” Philippine Navy spokesman Lt. Rommel Rodriguez said in a statement.
Where to park the new naval assets has become a problem as Subic‘s maritime traffic has increased over the past months.
Toxic wastes
The rise of Oyster Bay as a new naval port is also likely spark tensions with China which has laid claims to the west Philippine Sea.
Last year, U.S. and Philippine commandos staged a mock amphibious assault near Oyster Bay as part of their annual military exercises. Oyster Bay is about 160 km (100 miles) from the west Philippine Sea where Chinese naval vessels patrol.
Environmentalists, however, opposed the rise of a naval port in mangrove-fringed Oyster Bay, fearing pollution and destruction of its marine sanctuaries.
Last year, US Navy minesweeper USS Guardian ran aground near Palawan’s Tubbataha Reef, a Unesco world heritage site, destroying 2,345.67 sq ms of 10-meter-high coral reefs.
Until today, the US has yet to pay the 60 million pesos fine imposed by the Philippine government, an amount labeled by critics as just a pittance in that the incident caused least US$342 million in damage to coral reefs.
“The impending construction of a base on Oyster Bay, which is within a marine protected area, seems to be the next crime the US is intent on pushing through with,” the Kalikasan-People’s Network for the Environment” says.It says the US has yet to clean up the toxic wastes and rehabilitate its former military bases Subic and Clark which were shuttered in 1992.
Constitutional ban
A leftist group also assailed the rise of a new Subic, saying it violates the Philippine Constitution banning foreign military installations in the country.In a statement, Pamalakaya says a US military base in Palawan is not only meant to check China’s aggressive expansion into the West Philippine Sea, but also to maintain the military hegemony of Washington in the region.
“We will contest this grand mockery of Philippine sovereignty in the parliament of the streets, in any appropriate court or forum, and in the court of public opinion,” it says.
Militants fear that the people of Palawan will wake up one day to find that the entire island province is transformed into a virtual US military base similar to the one in Okinawa, Japan.
Geo-political interests
Plans are also afoot to station 50 to 60 US marines in Palawan as an advance detachment at the South China Sea.The US also wants to convert the 246-hectare Philippine Marine Corps reservation in Palawan, particularly the Brooke’s Point, and nearby areas into joint US-Philippines marine operational command posts.
Part of the cooperation is the installation of high-powered radar systems in strategic areas from north to south of Palawan facing the potentially oil-rich West Philippine Sea.The new radars, meant to monitor China’s naval activities, form part of the Philippines’ plans to give American forces, ships and aircraft access to more of the country’s military camps and facilities.
Although Philippine laws prohibit permanent foreign military bases in the country, the Americans have somehow found a loophole – embed themselves in the Philippines’ own camps and facilities to skirt the ban and advance their geo-political interests in the Asia-Pacific region.
Reds Condemn China And US Bullying
In a statement released by the Communist Party of the Philippines (CPP),the insurgent group condemns both the US and Chinese governments for “acting like bullies in their effort to fortify their military foothold in the South China Sea to the detriment of the Filipino people’s sovereignty claims over the islands and land formations and territorial waters within the country’s 200-mile exclusive economic zone.”
The CPP denounced both the Chinese and US governments for carrying out maneuvers and counter-maneuvers last March 29, while a Philippine boat delivered supplies to the Philippine outpost ship BRP Sierra Madre, stationed at the Ayungin Shoal since 1999. News reports indicate that the Chinese Coast Guard attempted to prevent the Philippine supply boat from reaching the Ayungin shoal.The group also criticized the US military for reportedly carrying out fly-bys to project and assert its power and control of the area.
The CPP further denounced the Aquino regime for playing to the US hegemonist plan to establish its permanent presence in the South China Sea by invoking US military support, seeking increased US military financing and protection. The group says that the fly-by of US jets over the Ayungin shoals last March 29 was carried out with the permission of the Philippine armed forces, although AFP officials feigned ignorance. Malacañang also pretended to be unaware of the US fly-bys when it declared that the Philippine supply boat just “somehow managed” to reach the outpost ship despite the presence of the Chinese Coast Guard ship.
The CPP claims that it has long supported the demand of the Filipino people to assert Philippine sovereignty over the small islands and land formations in the South China Sea within the country’s 200-mile economic zone. It also asserted that the group has long called for a peaceful resolution of the conflicts through diplomatic negotiations and international arbitration.
“The US imperialists have long been the biggest violators of Philippine sovereignty,” the group insists in their public statement. They said that the United States’ historical record of aggression and colonization of the Philippines is “incomparable to that of China, which has never deployed its military in the Philippines, prior to sailing its coast guard boats in Philippine territorial waters.”
The CPP notes, “The US has further entrenched itself in the Philippines. It has further strengthened its foothold by maintaining a permanent military presence in the Philippines.”
The CPP contends that further strengthening the US’ military foothold in the Philippines does not help the Philippine cause to advance sovereign claims over the South China Sea islands, formations and territorial waters. Heightening US military presence, according to them, counters the Philippines’ efforts to strengthen its sovereignty claims as it puts the Philippines under the dominance of the US military.
The group further adds, “In asserting Philippine claims while invoking US military support, the Aquino regime is actually seeking to become a protectorate of the US government, subjecting the entire country, including the international trade routes in the South China Sea, to US control. To be ‘protected’ by a bigger bully who claims to be a friend to fend off another bully is to forever be under the sway of that bigger bully.”
Ictsi To Develop New Terminal In Colombia
MANILA– The Philippines’ biggest port operator has begun constructing a container terminal at the Port of Buenaventura in Colombia to cash in on that country’s burgeoning trade and logistics demand.
Estimated to cost US$180 million, the terminal is a joint project of the Manila-listed International Container Terminal Service, Inc. (ICTSI) and the Port of Singapore Authority (PSA).
Through their subsidiaries, the ICTSI and PSA recently signed an agreement to jointly develop, construct and operate a terminal and ancillary facilities in Aguadulce, Buenaventura, Colombia.
Based in Manila, ICTSI is involved in the operations and development of 27 marine terminals and port projects in 19 countries worldwide.
PSA is one of the leading global port groups with port projects across Asia, Europe and the Americas and flagship operations in Singapore.
The agreement involves PSA’s investment, through unit PSA International Pte. Ltd., in Sociedad Puerto Industrial Aguadulce S.A. (SPIA), an indirect subsidiary of ICTSI.
SPIA holds a 30-year concession for the Aguadulce Port Project granted by the Agencia Nacional de Infraestructura of Colombia. It also owns 225 hectares of land in Aguadulce.
Under the terms of the agreement, ICTSI’s wholly-owned subsidiaries Kinston Enterprises Corporation and Future Water S.A. agreed to the purchase by PSA Colombia Pacific Pte. Ltd., a wholly-owned subsidiary of PSA, of SPIA shares representing 45.64 percent of SPIA’s issued and outstanding share capital.
Upon completion of the agreement, ICTSI and PSA, through their respective subsidiaries, will jointly own 91.28 percent of issued and outstanding share capital of SPIA.
ICTSI and PSA also agreed to work jointly towards the success of the Aguadulce Port Project.The new container terminal will have an annual capacity of 700,000 TEUs (twenty foot equivalent unit).
The construction, which started last November, will be completed in 18 to 24 months. The new container terminal, which is expected address Colombia’s expanding trade, will have its own access road to ease congestion at the port.
“We are excited about the prospect of working with PSA to develop a terminal that we know will be key to Colombia’s trade growth,” says Enrique K. Razon Jr., ICTSI chairman and president.
He adds PSA and ICTSI share the same aspirations for the Aguadulce Port, adding both are confident and look forward to the success of this important collaboration.
An ICTSI statement also quoted Tan Chong Meng, PSA Group CEO, as saying: “We are delighted to partner with ICTSI and co-invest in the Aguadulce Port Project.”
He noted that ICTSI and PSA will bring their complementary strengths to ensure that this greenfield terminal will support the growing demand for trade and logistics in Colombia amidst the improving business environment in the region.
ICTSI also operates container terminals in Poland, Brazil, Madagascar, Indonesia, Syria and Japan, and recently signed contracts to operate container terminals at the Port of Guayaquil in Ecuador.
U.S. Embassy Showcases Strong US-PH Business TIES
The United States Embassy Manila, in partnership with the Alaska Seafood Marketing Institute and the U.S. Potato Board, hosted an event showcasing food, wine, and beverages from the American Pacific Northwest region.
The event is one in a series designed by the Embassy’s Foreign Agricultural Service to promote theuse of quality U.S. Food and beverage products in the Philippines.
Agricultural Counselor Philip Shull underlined the importance of agricultural trade between both countries:
“U.S. food and beverage exports to the Philippines grew 15 percent in 2013, and reached the US$1 billion milestone.
The Philippines is the number one market in South East Asia and the tenth largest market in the world for U.S. food and beverage products.
$1 billion in food and beverage exports is roughly 25,000 container trucks stretching more than 300 kilometers.
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