Philippine Hacks Develop Apps for Clean Government

Makati City (Associated Press)

According to The Wall Street Journal, MANILA – Once regarded as the “sickman of Asia,” the Philippines has recently undertaken a series of governance reforms that have helped improve its bill of health and convince investors and credit rating agencies to take a fresh look at one of the region’s fastest-growing economies.

President Benigno Aquino III and his economic managers are taking much of the credit for the Philippines current stellar economic performance. They point to efforts to run a clean government and stamp out corruption as the main factors behind the investment-grade ratings awarded to the country this year by all three major international rating agencies.

Last month, following a scandal that sparked widespread protests, three senators and five former lawmakers were charged with corruption for misusing more than $200 million from state coffers – a move seen as part of President Aquino’s battle against graft. Those charged all deny wrongdoing.

Former President Gloria Macapagal-Arroyo, installed after a popular uprising that removed president Joseph Estrada on corruption allegations, is also facing several graft charges and is now in detention.

Now, the government is planning to take its reforms a step further.

Early next month, it will host a two-day “hackathon” with information technology programmers and designers to help spur the development of mobile or computer applications that will improve public services, particularly in the handling of public funds.

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Is it Right: More Money Means More Health Problems in Asia?

Flavored juice drinks sit on a shelf in a grocery store in Manila. (Bloomberg)

According to The Wall Street Journal, MANILA — Economies in Southeast Asia are not the only things growing in the region. Waistlines are too – and that has doctors and health experts worried about the strains a clutch of new health problems could put on many countries still in the process of developing.

Rapid economic growth has created new and expanding middles classes in places like Indonesia, the Philippines and Vietnam. But new affluence is also driving up the rate of “life-style” diseases, including hypertension, cancer, diabetes and chronic respiratory illness, say doctors.

Together, those diseases account for 80% of the deaths in Asia, but health experts say it need not be that way – most could be addressed by people simply changing the way they eat and live.

“We must have behavior change,” Shin Young-soo, the World Health Organization’s regional director for the Western Pacific, said during a recent health summit in Manila.

As regional incomes improve, people have more money to spend on fast food and processed snacks. In recent years, demand for meat and dairy has also risen dramatically in many of Southeast Asia’s emerging economies.

But changes in diets combined with lack of exercise has made Asians more prone to diabetes than their counterparts in the West, said Dr. Shin, one of nearly 200 health and development experts attending a week-long gathering here aimed at discussing non-communicable diseases and finding way to combat them.

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Asia Stocks Down on China’s Resistance to Inject Money in Markets

Asia Stocks Down on China’s Resistance to Inject Money in Markets

MANILA, Philippines— Asian stock markets floundered Friday as China pressed ahead with industrial restructuring that is partly to blame for slowing growth in the world’s No. 2 economy.

Beijing ordered companies to close factories in 19 industries where overproduction has led to price-cutting wars, affirming its determination to push ahead with a painful makeover of the economy. That move followed weak manufacturing data on Wednesday.

Communist leaders are trying to reduce reliance on investment and trade. But a slowdown that pushed China’s economic growth to a two-decade low of 7.5 percent last quarter had earlier prompted suggestions they might have to reverse course and stimulate the economy with more investment to reduce the threat of job losses and unrest.

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Brummer Prefers Private-Equity Bets Over Stocks: Southeast Asia

Brummer Prefers Private-Equity Bets Over Stocks: Southeast Asia

Brummer & Partners, the largest Scandinavian hedge-fund manager, will favor private companies rather than listed stocks to avoid volatility as it sets aside $120 million to tap growth in the Philippines.

“It is a better way to participate in the long-term growth of a country to be on the private side,” Patrik Brummer, founder of the Stockholm-based firm, said in an interview inManila yesterday. “Public markets are more volatile than private markets.”

The fund, which manages about $15 billion, is working with local partners Honorio Poblador and Javier Infante, he said.  The private-equity fund, called Navegar, will over five years invest in eight to 10 companies that should generate returns of at least 20 percent each, Brummer said.

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Malaysia’s Economy at Risk with Growing Consumer Debt

Malaysia’s consumer debt is at 76.6 per cent of its GDP and some economists believe that the growing consumer credit could rock the country’s economy.

Malaysia’s consumer debt is at 76.6 per cent of its GDP and some economists believe that the growing consumer credit could rock the country’s economy.

Malaysia’s consumer debt is at 76.6 per cent of its GDP and some economists believe that the growing consumer credit — where each ringgit of growth nearly matches an extra ringgit of consumer debt — could rock the country’s economy, the Financial Times (FT) reported today.

The country’s household debt ratio is the highest in the region, the influential daily reported, citing Johanna Chua, an economist at Citigroup, who believed this makes the Southeast Asia’s third largest economy vulnerable, especially as lower-income households bear a greater share of the overall debt.

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Peso Forecasts Raised as Rest of Region Cut: Southeast Asia

The Philippine peso is the only Asian emerging-market currency that forecasters have become more bullish on this year as the nation’s improving economy increases the chance it will win an investment-grade credit rating.

The peso will strengthen 4.2 percent by year-end, according to BNP Paribas, the most positive among 19 analysts surveyed by Bloomberg. The median estimate was for a 0.2 percent advance to 41.60 per dollar. It reached 41.358 on Sept. 17, the strongest level since April 2008, and is Asia’s best-performing currency over the past year. The peso rose 0.2 percent to 41.680 per dollar as of 9:53 a.m. in Manila, according to prices from Tullett Prebon Plc.

Indonesia’s rupiah rallied 20 percent in the three years before Fitch Ratings restored the nation to investment grade in December 2011. The prospect of the peso enjoying a pre-upgrade bump is luring investment and buoying the currency, said Thomas Harr, head of Asia local markets at Standard Chartered Plc, the second-most optimistic forecaster. Foreign funds have pumped $2.2 billion into local stocks this year, compared with $1.3 billion in 2011 and $1.2 billion in 2010, exchange data show.

“We think the Philippines will attain investment grade by 2014,” Singapore-based Harr said in a Sept. 14 interview. “You’ll see capital inflows coming into the country ahead of that.”

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US Warns Asia-Pacific Leaders over Territorial Rows

US Secretary of State Hillary Clinton

Increasingly tense territorial rows in the Asia-Pacific threaten the global economy, US Secretary of State Hillary Clinton warned Sunday at the end of a leaders’ summit plagued by divisions.

The annual gathering of Asia-Pacific Economic Cooperation (APEC) heads was meant to build goodwill in long-term efforts to tear down trade barriers within their bloc, which accounts for more than half of the world’s economic output.
 
While progress was made to cut tariffs on environmentally friendly goods, and commitments renewed to fight protectionism, bitter territorial disputes disrupted the two-day event in Russia’s port city of Vladivostok.
 
Japanese Prime Minister Yoshihiko Noda and Chinese President Hu Jintao did not hold customary talks on the summit sidelines because of a row. Similarly Noda and South Korea’s Lee Myung-Bak — both allies of Washington — shunned each other.
 
Philippine President Benigno Aquino also failed to meet with Hu, after declaring it his top priority beforehand.
 
The Philippines and China have endured months of bruising diplomacy over competing claims to the South China Sea — of which Beijing claims almost all — including a maritime standoff.

 

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Who Is Asia’s New Darling of Investors?

Dondi Tawatao

As Asia’s economic giants China and India experience a slowdown, analysts recommend looking at a smaller regional player, which has been delivering on its growth promises.

The Philippines, Southeast Asia’s services-driven economy, expanded by a faster-than-expected 5.9 percent year on year in the second quarter, which takes its first half 2012 GDP growth to  6.1 percent, prompting Barclays Regional Economist Prakriti Sofat to call the country Asia’s “rising star.”

She expects full year growth to exceed the bank’s target of 5.5 percent, and adds that a credit ratings upgrade is also on the cards in the second half of 2013.

“After Indonesia received investment grade ratings, the market’s focus turned to the Philippines as the next potential candidate in Asia,” Sofat wrote in a note.

Increasing foreign direct investment (FDI) in the country, structural improvements – such as the passage of an anti-money laundering bill – and rising political stability will all strengthen the Philippines case to move to an investment grade, says Sofat.

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IMF Scales Back Southeast Asia Growth Forecast

The International Monetary Fund has cut its forecast on the economic growth of five nations in Southeast Asia to better reflect faltering growth in the global economy. Monday’s assessment, released in a report by the IMF, was the latest development institution to announce an assessment after the World Bank cut its economic growth forecast for next year.

The IMF cut the economic growth forecast for Indonesia, Malaysia, the Philippines, Thailand and Vietnam, which together are known as the Asean 5, to expand 6.1 percent in 2013, slightly lower that its earlier forecast of 6.2 percent. It cut the global economic outlook for growth to 3.9 percent next year, from its previous forecast of 4.1 percent.

Still, the IMF, which loaned billions of dollars to Thailand and Indonesia during the 1997-98 Asian financial crisis with strict conditions, maintained the growth forecast for the year at 5.4 percent, unchanged from its forecast three months ago.

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How Asia Will Fare if Europe Cracks

BY ALEX FRANGOS

As the Euro Zone Flirts With Disaster, Asian Economies Stand at Varying Degrees of Preparedness

HONG KONG—Greek elections may have assuaged fears of a European financial contagion spreading to Asia, at least for the moment. But as troubles brew in Spain, where borrowing costs shot up again Tuesday, and as Greece faces more painful cuts to meet bailout targets by September, many wonder who in Asia is most exposed should Europe’s economy and financial system finally crack.

Lessons from the 2008 financial crisis show that while all of Asia tends to get hit when the world economy shudders, the severity differs depending on which countries have the biggest trade and financial linkages to the rest …

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