LEAVING 2010
The Philippine Star
01/03/11

Friedrich Nietzsche's ‘That which does not kill us makes us stronger’ is a very comforting thought going into 2011 after surviving the excitement of the year that ended.

Indeed, 2010 was marked with an unparalleled flurry of activity such that sales of stress medicines and nerve-calming agents would probably have surged to help people cope with all the frenzy.

It started with a tight presidential race defined by the typical mudslinging and flush spending of an election campaign. By the middle of the year, the election of President Noynoy Aquino, the 50-year-old bachelor son of national icons, ushered in a season of hope and inspiration.

Hijacking, judicial system

The typical honeymoon period with the new administration came to an abrupt halt in August 23 when a 10-hour televised drama involving an ex-cop who hijacked a tourist bus carrying about 20 foreign visitors ended in a bloody mess of nine deaths, including the gunman.

The bungled rescue operation not only highlighted the extreme ineptness of the police force but also exposed the rift among the president's men.

Fortunately after a few weeks, the political landscape normalized and things proceeded relatively smoother. That is, until the judicial system decided it needed some attention.

And a lot of attention it got: First by declaring the Truth Commission unconstitutional; then a week later, acquitting Hubert Webb and five others for the 1990 Vizconde massacre.

Sustained economic growth

Even if the past year was dominated by news on the political and judiciary landscapes, the economy and fiscal sectors were not to be outdone as some particular events are very much worth noting.

The economy was particularly strong in 2010, much of it owed to an unprecedented election spending. Gross domestic product grew by a revised 8.2 percent in the second quarter, the fastest pace in three years. Even with a markedly slower 6.5 percent expansion in the third-quarter, the nation was on its way to exceeding the year's growth target of 5 percent to 6 percent.

Report of a stronger-than-expected growth three days after the fatal hijacking in August helped restore some of the confidence, take away some of the pain from a nation shocked and shamed by the tragedy.

A resounding success of the country's foray into the capital markets in September, for two separate transactions, confirmed that much of the negative sentiment and animosity after the bus siege was limited to the locals as well as with the Chinese and Hong Kong nationals and government.

Global peso bonds, swap

In early September, the Philippines raised $1 billion from its maiden sale of peso bonds offered to international investors. Bids for the 10-year securities reached $13.3 billion, signaling robust appetite for the nation's debt as economic growth accelerated and a strong outlook for the peso continued.

By the end of September, the Philippines was back in the market, offering holders of its dollar debt longer-dated notes. It issued almost $3 billion of 10- and 25-year dollar notes in exchange for shorter-dated debt to lengthen its maturity profile.

Not content, the government did a similar bond exchange program for its peso debt in December, resulting in a record deal.

While the government made enhancements to its borrowing activity, it also seriously reined in spending while revenue collection struggled to keep up with targets.

Budget surplus, peso surge

In November, the government posted a budget surplus, the first during the P-Noy term. The almost P500 million excess, while seemingly puny, helped narrow the deficit from a year earlier and put the government in a much better position to meet its target this year, perhaps even beat it.

As Philippine fundamentals improved and the U.S. announced its second quantitative easing, hot money flows kept coming in, taking the peso on November 4 to its highest level since May 2008. That was the day before the statistics office reported that inflation eased to an 11-month low of 2.8 percent in October.

Tight rein on money

With the pressure on the peso increasing and inflation kept on relatively tight hold, the central bank put to work what proved to be a very effective tool to reduce exchange rate volatility.

It refrained from selling dollars in the swap market, effectively starving the financial market of greenback supply. That had caused the peso to drop back to the 44-level within a few days, paring some of the gains for the year, albeit gains that were hurting exporters and overseas workers.
Just before 2010 ended, the central bank met and subsequently announced the benchmark overnight borrowing rate unchanged at 4 percent. As expected, while inflation inched up a bit to 3 percent in November, it was way below the 3.5 percent to 5.5 percent target for 2010.

Tourism promise

Towards the latter part of the year, P-Noy launched his administration's Public-Private Partnership program, seeking to attract private capital into crucial infrastructure projects that the state could hardly afford.

More than P700 billion of roads, ports, irrigation, railways and other public works will be available in the coming years of his administration. Part of the push for infrastructure is meant to boost tourism, a key component that is seen to sustain the country’s future economic growth.

With the promise of things to come, regional airlines Tiger Airways and AirAsia forged local partnerships in anticipation of getting a piece of the expected rise in the travel market.

With so many things in the pipeline, it looks like 2011 is going to be a year that can't wait to start. For the sake of this country, we certainly hope so.

Champions League M. V. Pangilinan Special Awardees

In response to various enquiries, below is the list of recipients of the M. V. Pangilinan Special Awards for the 2010 Champions League (PCCL) Collegiate Championship:

Team awards: Ateneo Blue Eagles – National Collegiate Champion; Adamson Soaring Falcons – runner-up; De La Salle Green Archers – third place; University of Cebu Webmasters – fourth place; University of Baguio Cardinals – North/Central Luzon region champion; CCDI (Sorsogon) –South Luzon-Bicol region champion; University of Iloilo – Visayas Islands region champion; and AIFC Sailors – Mindanao region champion.

Individual awards: Most Valuable Player - Nico Salvo (Ateneo); other members of Mythical Team – Kirk Long (Ateneo), Lester Alvarez (Adamson), Alex Nuyles (Adamson), Junmar Fajardo (UC); Best Coach – Norman Black; and Best Referee – Meynard Bellecer.

Visit www.CollegiateChampionsLeague.net for more details about the PLDT-SMART sponsored 2010 Philippine Collegiate Championship.

Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, SalcedoVillage, 1227 MakatiCity. Or e-mail me at reydgamboa@yahoo.com. For a compilation of previous articles, visit www.BizlinksPhilippines.net