Much to expect in 2010

Written by Margaret Jao-Grey / Not Business as Usual

Sunday, 03 January 2010 20:32

There’s much to expect this year. Here are a few: • Expect cheaper goods from China with the implementation of the China-Asean Free Trade Agreement. Basically, this means that China and the five founding members of Asean, one of which is the Philippines, will allow the free trade (read: zero tariff) on  7,000 commodities or 90 percent of goods traded with China for the next three years. The other Asean countries will share the same benefits only in 2013. Okay, okay, so China isn’t including what it considers sensitive products such as textiles and electronics. This also means China will give Asean companies preferential access into China’s services market (read: think tourism, English teaching as well as ecomedical and retirement care services). • Expect a realignment in the country’s top largest banks with the entry of the soon-to-be-merged Philippine National Bank and Allied Bank. Said another way, one of the country’s current top three banks will have to move down at least one notch. The current largest banks in the bank at the moment are Banco de Oro (BDO) Universal Bank, Bank of the Philippine Islands (BPI) and Metropolitan Bank and Trust Co. (Metrobank). BDO is majority owned by Henry Sy, the country’s richest man; BPI is owned by the Zobel de Ayala family, whose patriarch—Jaime Zobel de Ayala—is the country’s second-richest man; Metrobank is controlled by George S.K. Ty; while PNB-Allied is owned by Lucio Tan. • Expect more capital market activity with the implementation of the Personal Equity Retirement Account (Pera) Law. Naturally, government financial institutions (GFI) such as the Development Bank of the Philippines and Land Bank of the Philippines will be at the forefront of Pera. Basically acknowledging that current pension funds—the Social Security System for private employees and the Government Service Insurance System for public employees—will not generate enough for retirees to live comfortably by, Pera is a savings investment alternative that individuals, including overseas Filpino workers, can  use to save and put away money for their future or retirement. The maximum annual contribution for an individual is P100,000 and for overseas Filipino workers, P200,000. The minimum investment holding period is five years. Aside from GFIs, other government agencies can be accredited as administrators of Pera funds too. • Expect public schools to teach some subjects in the regional dialect rather than in English as part of the Department of Education’s pilot lingua franca program. This means schoolchildren in the Ilocos region to be taught in Ilokano and the children in the Visayas to be taught in Cebuano, using instructional materials in major regional dialects starting June. By using the language they use at home, it is hoped that children will learn more and will stay in school instead of dropping out. • Expect a lot more construction work (read: more jobs, more suppliers) with about P530 billion in still-unreleased funds that has been programmed in the 2010-2013 budgets. This amount is for the implementation of 71 projects worth P131 billion and for the civil works of 39 projects worth almost P400 billion—most of which are still in the preconstruction stage. These are, of course, on top of new projects listed in the 2010 national budget.