Moody’s notes Philippine gains

STRONG FIRST quarter growth, coupled with a steady improvement in the government’s finances, bode well for the Philippines’ credit rating, Moody’s Investors Service said.

      In a credit outlook released yesterday, Moody’s hailed the 7.8% gross domestic product (GDP) growth in the first quarter, which beat market expectations and the government’s full-year target of 6-7%.

"GDP growth in the Philippines is on an upward trend, in contrast to lackluster global growth performance," Moody’s noted.

"On a year-on-year basis, the Philippines’ first-quarter real GDP growth is the strongest among all rated countries in the Asia-Pacific region, outpacing larger emerging markets such as China (7.7%) and Indonesia (6%)."

Moreover, Moody’s cited the P36.8-billion fiscal surplus posted in April -- the highest monthly surplus on record that was driven by a 28.9% jump in income tax collections.

"The improvement in tax receipts demonstrates that the government’s efforts to bolster tax compliance are gaining traction and helping to boost revenue generation, one of the key weaknesses of the Philippines’ credit profile," it said.

It added that with President Benigno S. C. Aquino III sticking to a campaign promise not to raise taxes, it was important for his government to prove that its strategy of raising revenues via tax compliance could work.

Year to date, meanwhile, the government has posted a fiscal deficit of P29.68 billion and Moody’s noted the "moderate" increase could suggest spending restraint on the part of the government despite the May midterm elections.

"[T]he government’s spending decisions are increasingly driven by long-term economic objectives rather than short-term political ones," it noted.

It likewise praised the speedy roll-out of infrastructure projects so that these wouldn’t be compromised by the Commission on Elections’ ban on public spending leading up to the May elections.

Moody’s forecast that the government would hit its P238-billion deficit target for this year -- equivalent to 2% of GDP -- unlike in 2010 when frenzied campaign spending bloated the deficit to P293.2 billion, over the target of P131.6 billion or 3.5% of GDP.

"The government thus largely honored the constraints imposed in order to provide for free and fair elections, while simultaneously maintaining fiscal discipline," it said.

In summary, Moody said, "these developments are credit positive."

The rosy outlook boosted hopes that the debt watcher would soon raise the Philippines’ credit rating to investment grade. Moody’s currently rates the Philippines at Ba1, one notch below.

The two other major debt watchers, Standard & Poor’s and Fitch Ratings, earlier this year upgraded the Philippines to BBB-, taking the country to investment grade.

Mr. Aquino, for his part, yesterday said he did not want to predict Moody’s actions. He told reporters, however, that the government was hoping to give the credit rater enough reason to award an upgrade.

"I don’t want to preempt them ... But I think the second quarter figures should be of the same ilk [as first quarter GDP growth]. We are hoping that they will be same or even better," Mr. Aquino said.

Moody’s has yet to visit the Philippines this year.

"We are still working on a date with the Moody’s team," Investor Relations Office Executive Director Claro P. Fernandez said.

"They do a due diligence regularly, at least once a year."

BW Online

AMEA's Sustainable Business TV series

AMEA is developing a series of SUSTAINABLE BUSINESS TV SERIES of documentaries, our second in the series is themed “Indonesia: A New Era of Sustainability and Economic Growth.” 

This interactive and informative documentary will give insight and holistic view of leading land-based industries driving the country forward. It will outline the need for change in business as usual to sustainable business solutions in Land Based Industries in Forestry and Palm Oil. 

 It will showcase leading corporations that are developing business driven solutions to some of the greatest challenges of these industries including, poverty, climate change, education, healthcare among others. 

Land based industries are a significant contributor to Indonesia's GDP and major contributor to regional and rural development. We will explore the multiplier effects which these industries have on the country and explore the challenges and solutions to critical issues. 

Stay tuned as we are aiming for this June for the broadcast airdates! 

Philippine rebound to be sustained?

Interesting article published in The Edge, Singapore.

The author argues that Philippine's rebound is in fact sustainable and investors should look deeper than the "legions of cynics."  The key points in the argument are as follows:

Positives accumulating -
1. Inflation is falling
2. Country risk premium is falling
3. Economy more resilient to external shocks
4. Govt stability increasing

 Investment deterrents easing-
1. Philippines is one of the highest concentrations of minerals in the world, but restrictive regulations that were deterring investments are gradually being removed
2. Major investment in infrastructure has been announced in the new budget
3. Steps being taken by administration to enhance the investment climate - campaign against corruption, increase in BPO growth.

 However, challenges remain - weak infrastructure, high utility costs, to name a few result in Philippines ranking not too highly in international rankings. However, with good policy making, these can be overcome. Please click on link below for the full article:

Manu Bhaskaran: Can the Philippines’ rebound be sustained?
Monday, 16 July 2012

© 2012 - The Edge Singapore

What are your thoughts?

What Good PR Is Really All About

In April, one of the world’s most famous and successful PR companies created a massive, large scale PR campaign for a huge ‘globally diversified natural resources group’ operating in India. This marketing campaign had a vice-like grip on all possible avenues of social media in India: poster advertisements, slogans, online platforms like YouTube. It had the tagline “Creating Happiness””.

However, this whole charade was reduced to a farce in no time- ultimately and unexpectedly backfiring. Its apparent false claims and sugarcoating hid important and disturbing facts. Shockingly, despite its slew of emotionally charged advertisements, The company violated laws in mining, got clearances based on false information, illegally built refineries.

Mining companies out there need to take note of the way industry is portrayed to the public. However, what is of concern now is the second step, which is part of the publicity job: not all publicity is good publicity, especially not in this industry! We all assume that public relations do not include concealing facts in a desperate bid to change mindsets- but it’s something even the best PR companies fall prey to.

What good PR is really about then: it’s about honesty, realistic targets, and is ultimately open to criticism and suggestions. Having worked with those on the ground, its what AMEA believes in as well. According to the article “How to tell your sustainability story: the messier, the better” , good pr nowadays in fact is the opposite of spewing out positive, ambitious promises and sugarcoating. It is in fact being humble, airing your dirty laundry and being honest- in fact, it’s the only way to do business nowadays.

What we think is: go slow and steady. Progress may be quicker with easy PR, but we believe in going for sustainability and social understanding step by step.

APEC Sustainable Mining: Can Investments and Sustainable Developments happen in tandem?

About a week ago, the fourth meeting of APEC Ministers responsible for Mining was held in Russia.There was consent amongst the participating countries of the increasing importance of sustainable development in mining. Other issues brought up included  increasing social responsibility, innovations and Investments. 

What is the significance of this ? Obviously, there is a need to alter our business structures in a way that directly and sincerely addresses the issue of environment and sustainability. It’s time to get serious- social responsibility is increasing in its importance and is becoming today more of a criteria than something we can choose to address.

Another thing that caught my attention is the issue of investments. Yes, we all know and recognize the value of investments. But what value does it have in the context of sustainable development?

In countries such as Indonesia and Philippines, it is imperative to pay attention to and adapt to the economic and social situations of the country. Economic disasters, social unrest, protests- all these upset the possible flow of investment into a country that might need it, ultimately curbing the potential that investments might offer to developing the country and the industry. Investments have the power to nurture and grow sustainable development, which requires no small effort nor investments. Innovations, education, and so on- these require copious amounts of money.

So besides being vigilant, how does a country create an attractive investment climate? This issue was discussed by APEC Ministers Responsible for Mining. Governments will need to make an effort to improve living standards. Resource management is crucial to the initiative as well, as well as steps to boost regulatory efficiency and mitigate the environmental impact of the industry.

Ultimately, will making an effort to reach out to the society also help? Bridging the gap between the public and industry to strengthen ties may be the step needed to attract investors, as well as continued communications between all stakeholders.   

Sustainability: A Woman's Role

Rio+20 left behind in its trail a myriad of companies, industries, governments and politicians grappling for new concepts and solutions; ways to basically revamp and redirect initiatives and policies to suit the new agenda. Sustainable Development- to put it concisely, the phrase of the century. 

Another issue brought up in the light of Rio+20, however, is the interesting question: amidst the mad rush to fit environmental concerns into the intricate, profit driven structures of our businesses, what is a woman's role in all this? Alas, the idea of sustainable development and gender equity has come into play. 

Michelle Bachelet, Executive Director of UN Women, speaks at a press conference on “The Future Women Want”, at the Rio+20 UN Conference. 

I came across a few articles which piqued my interest greatly, mostly because it is an issue often neglected, overlooked and sometimes even belittled. Helen Clark (head of the United Nations Development Program) spoke in the wake of the Rio Summit, emphatically stating that the greatest investment to be made in sustainable development is women. Which means that in the midst of restructuring, launching new initiatives and so on, let us not forget as well the importance of women's political participation, developing economic opportunities for women, their education and health services. Helen is definitely not alone in her sentiments. The UN Under-Secretary-General Sha Zukang spoke at a recent women and sustainable development conference hosted by All-China Women’s Federation in Beijing in November, stating “I have said it before – and I say it again today – that in many ways, sustainability is about women. Society flourishes when women’s leadership, creativity, and initiative are recognized, embraced, and harnessed. In many countries, women are the champions of green economy, practicing sustainable agriculture, nurturing our natural resources, and promoting renewable energy.” Why exactly is it important to include women? It is more than just taking a blind stand for gender equality. As mentioned in stakeholder forum.org :

-Women’s indigenous knowledge of ecological linkages and ecosystem management are the main labour force for subsistence production.

-Women are more likely to be around, more stable part of the population—they are more likely to make a long term commitment and investment in their communities.

-Women have often played leadership roles or taken the lead in promoting an environmental ethic re-cycling, local level activities.

-There’s been a rapid growth of women’s NGOs working at local, national and international level.

This, in fact is not new. The Rio Development, the Millennium Development Goals (specifically, MDG 3 which speaks about how women's equality is critical as well to achieving sustainable development) and the Beijing Platform (read about it here) all recognise the fundamental truth- that is, environmental issues are women's issues. Melanie Verveer, the Ambassador-at-large for Global's Women's Issues, made a speech at the Heinrich Boll Foundation Event on January the 19th. She mentioned the vital roles that women have played in sustainable development, emphasizing yet again their role- not as victims, but as linchpins of the 21st century directive. 

Here, i re-iterate some of those roles:

1. Agriculture sector and food security

2.Untapped potential for increasing energy access

3.Consumer Spending Potential

And ultimately, what we can do to progress from a hypothetical platform of words to action and achievement:

1. Continue to elevate women’s leadership and participation in key policy bodies

2. Mainstream these issues at the policy level

3. Invest in girls’ and women’s educational opportunities in science, technology, engineering, and math (STEM), including in the environmental sciences

4. Build new and innovative programs and partnerships designed to take the kinds of concrete actions necessary to effectuate change

It is important that we recognize that we have a part to play in the environment- including the especially the mining industry. But here's an interesting point to note and ponder: what can we do to empower those who can help the most? 

Click here to watch a short UN clip on women and sustainable development. 

RIO+20 Summit: Sustainable Development!

The first ever Rio Summit (held in 1992) was pregnant with symbolic meaning- 172 governments participated, with 108 sending their heads of state or government, and Some 2,400 representatives of non-governmental organizations (NGOs) attended. 
Today,  it achieves a sense of direction towards something new, in largely unchartered waters. The notion of sustainable development will be recasted, broadened, redefined. In short, this phrase will probably be the driving force of the 21st century, molding the sphere in which politics and businesses operate. There's hope yet. Sustainable Development used to be a sleep-inducing phrase, largely (or solely) associated with that elusive concept of 'going green'. Not anymore- it's now charged, alive, well defined. It includes aiming for the eradication of poverty and social inclusion. What's so great about Rio+20? Well, for one, this idea of sustainable development has already made some changes in way benchmarks are determined- yes, even in the largely competitive world of business. Accountability of governments and businesses are emphasized, and systems implemented to ensure their participation in this new initiative. "Sustainability Reporting" will be taking its place in the business arena. The creation of ambitious aspirations echo the past- except now, there are hard deadlines. The  Millennium Development Goals, designed to alleviate poverty, has already galvanized organisations around that task. Finally we see some drive!

Representatives discuss

Countries involved in Rio+20

This has implications for the mining industry as well- in fact, especially for the mining industry. Mining has received some serious bad press over the decades, owing to a slew of unfortunate events and the knowledge of the scarcity of resources. "Sustainable Development", therefore, can either be the phrase from hell or a blessing in disguise. Responsible and sustainable mining would be the first step. You now know why its important-we adapt to the 21st century, not resist it. Push aside all misgivings; its inconvenience pays off in the long run. Being part of a powerful initiative that changes the way your community sees you is more than important; it's necessary. In short, it can be a blessing in disguise- adapt to it, make it a priority. You'll be an integral part of the trend that reaches out to save the environment. That makes the Earth a better place for living. 

More so than just that, we all have a moral obligation to contribute or at least replenish what we take away, to carry out our duties to the environment and the community around us. As stated in the Rio+20 common statement: We are consuming resources faster than the Earth can regenerate them, and producing more waste and pollution than the Earth can absorb. There is scientific consensus that Planet Earth is rapidly approaching its boundaries of a healthy and safe environment conducive to a life of dignity. 

More than just being the world's biggest UN Conference in history, this meeting has important consequences for everyone, especially businesses around the globe. We need to change the way we see things, and to make a difference. 

Here are some things to check out:

Interesting articles for your information:

• Reasons to be cheerful about the Rio+20
• The Rio+20 Common Statement

And more about Indonesia taking the lead!

• Indonesia hosts a preparatory meeting towards the UN environmental summit
• Indonesia spearheads in global initiatives to address sustainable development issue

An interesting interactive video: place your vote!