Monday, August 22, 2011

Hostage victims' kin seek justice, compensation

MANILA, Philippines - It was an emotional press conference Monday morning at Fort Santiago where relatives, a survivor, a legislator, and a lawyer faced the media to recall the tragic hostage incident in Rizal Park that led to the deaths of 8 Hong Kong tourists on August 23, 2010.

Tse Chi Kin, brother of Tse Masa, the tour guide who was killed in the August 23 hostage crisis, was crying as he began to narrate the harrowing experience he had when he learned of his brother's death.

He showed reporters a picture on a computer tablet showing the tourists that were held hostage by Senior Inspector Rolando Mendoza, posing happily before the Rizal Monument in Luneta "I can't believe that my brother is gone," he said.

Tse Chi Hang, a younger brother, spoke with grief and disappointment on the Philippine government's inaction in rendering justice to the families of the victims.

Their mother identified only as Mrs. Tse could not continue with her statement, while crying for the loss of her son.

A lady also seated at the press conference, Lee Ying Chuen, survived the incident. "We discussed to subdue the gunman for ourselves. But we decided not to because we trusted the ability of the Philippine government whose rescue came much too late," was how Lee described her disappointment on how the Philippine government handled their 11-hour ordeal.

Lee also said when she was brought to an ambulance, there was no equipment nor even a single bandage to fix her up. And when they arrived at the hospital, the hospital refused to take them in. Instead they were recommended to be brought to another hospital.

"Its been a year now and we're still angry," said Lee.

She also expressed her disappointment because the government did not even offer an apology or even at the very least try to talk to them. "The only chance we heard that the [Philippine government] talked is when they try to discuss the travel warning. It's all about money," Lee said.

James To, a member of Hong Kong's legislative council, told the press of the 4 demands of the families of the victims.

First, a formal apology from the Philippine government. Second, provide compensation to the victims and families. Third, ask for accountability for officials or persons involved in mishandling the incident. And fourth, improve measures to safeguard tourists.

Mr. To said that 10 days before they came to the Philippines, they went to the Philippine consulate in Hong Kong asking for a meeting with President Aquino. Unfortunately, Mr To said they got no reply. "According to the spokesman, the President refused to meet us."

Jonathan Man, a lawyer of 2 hostage crisis survivors, was asked on the rate of compensation that the families are asking. Mr. Man said he is not sure of the Philippine legal system but if it will based on the Hong Kong system, the law provides specific calculations in compensating victims.

The group went to the office of Justice Secretary Leila de Lima Monday afternoon. According to Mr. Man, they will also discuss with the secretary the Incident Investigation and Review Committee (IIRC) report on the hostage incident.

Oil firms raise pump prices anew

MANILA, Philippines - Three oil companies raised their fuel prices Tuesday.

Pilipinas Shell Petroleum Corp. raised the pump price of unleaded gasoline by P1.40 per liter; regular gasoline by 90 centavos per liter; and diesel and kerosene by 40 centavos per liter effective 12:01 a.m. August 23.

Chevron (formerly Caltex) and Seaoil also raised their fuel prices by the same amounts, effective 6 a.m. Tuesday.

Other oil firms are expected to follow suit.

Sunday, August 21, 2011

Japan ready to act over yen's historic rise: media

TOKYO - Japan is ready to take action against a further surge in the yen, including market intervention, after the safe-haven Japanese currency hit a post-war record high, local media reported on Saturday.

The government and the Bank of Japan have started discussions over fresh intervention to sell yen and buy dollars on the foreign exchange market, the Nikkei business daily reported.

Japan is ready to intervene and sell yen even on overseas markets if it detects speculative moves to drive the currency higher, an unnamed senior finance ministry official said late Friday, according to the Yomiuri Shimbun.

The mass-circulation daily also said that the central bank is separately considering further monetary easing in tandem with the government's possible yen-selling action.

The dollar slumped to 75.95 yen in intraday trade Friday, beating its previous post-World War II low of 76.25, which it reached days after the March 11 earthquake and tsunami hit Japan.

Investors were flocking to the Japanese currency, seen as a safe-haven unit together with the Swiss franc, amid deepening concern over another possible global recession, traders said.

Because a strong yen hurts Japanese exporters, the nation's main economic engine, Japan stepped into the foreign exchange market earlier this month to dump yen for dollars, and Tokyo has previously signalled that it may do so again.

"The government and the Bank of Japan do not hesitate to carry out market intervention... but as seen in the last case, the impact of intervention is unlikely to last long," the Asahi Shimbun said.

Official data on Monday showed that Japan's economy shrank less than expected in the April-June quarter, fuelling hopes that its recovery from the March 11 quake and tsunami disasters is on track.

Finance Minister Yoshihiko Noda also predicted that Asia's second-biggest economy looks likely to grow again in the July-September quarter -- but also warned of the risk posed by the strong yen to exports and growth.

Noda said Friday that the government would consider what long-term policies were needed to soften the economic impact of the yen if it remained at its current high levels.

Panic, policy cuffs could force new recession: analysts

WASHINGTON - Another punishing week in stock markets has left European and US leaders looking less and less able to staunch fears of recession that analysts say could turn into a self-fulfilling prophecy.

While economists said the world's mature industrial countries had not yet completely stalled, increasingly they were using the term "negative feedback loop" to define their worry.

In layman's terms panic in financial markets is scaring consumers and businesses into locking up spending, forcing a new economic contraction two years after the "Great Recession" ended.

Governments, themselves under the gun from bond markets and political pressure to cut spending, have diminishing kits of tools to counter the pessimism, they said.

Last week brought new worries into the picture:

- new data showing eurozone growth crawling at 0.2 percent in the second quarter, and Germany only at 0.1 percent;

- warnings, most notably from Morgan Stanley, that the US and Europe were on the precipice of a new recession;

- the failure of the German and French leaders to offer markets a convincing fix to the eurozone debt problems at their summit Tuesday.

That combination sent share markets plummeting, putting the broad-based S&P 500 index of US stocks down 4.7 percent for the week and 15.3 percent lower after a month of economic turmoil.

Britain's FTSE 100 is now down 12.9 percent over a month; France's CAC 40 18.4 percent; and Germany's DAX has been hit even harder, off 9.8 percent for the week and 23.8 percent in a month.

With trillions of dollars lost in paper wealth, sellers have moved their money into the safest havens they can find -- US Treasury bonds, Swiss francs, Japanese yen and others -- meaning it does not help growth.

Economists on both sides of the Atlantic slashed their growth projections.

"Our revised forecasts show the US and the euro area hovering dangerously close to a recession -- defined as two consecutive quarters of contraction -- over the next 6-12 months," investment bank Morgan Stanley said.

"A negative feedback loop between weak growth and soggy asset markets now appears to be in the making in Europe and the US. This should be aggravated by the prospect of fiscal tightening in the US and Europe," it said.

"In the absence of appropriate policy intervention from the European Central Bank (ECB), the Federal Reserve and the US government, it is entirely possible the current downward spiral in the economy and financial markets will become self-reinforcing," said John Silvia, chief economist for Wells Fargo bank.

Governments and central banks are increasingly boxed in on policy, said economists.

In Europe and the United States there is almost no room to lower interest rates to stimulate growth; central banks can fine-tune policy to try to push banks into putting more money into the commercial market, but that it is not clear that it will stimulate economies.

In Europe, where bailouts of Greece, Portugal and Ireland have already strained the richer governments, politicians and the public are reticent to pump more money out that they do not have.

The ECB does not have the power to print money to fuel recovery; and Tuesday's meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel ruled out allowing it to issue region-backed eurobonds to raise money for growth and bailouts.

That was a big disappointment for markets.

"We still need a more meaningful solution in Europe," said Chris Low of FTN Financial. "The ECB is not equipped to solve the debt crisis on its own."

Meanwhile there was pressure on Europe's still-liquid governments to pare deficits by mainly cutting spending, especially France, the eurozone's second largest economy.

The same was true in the United States, where some are calling for an industry-building program on par with the World War II effort that pulled the country finally out of the Great Depression.

But given the August 5 credit downgrade of the government by Standard & Poor's over its growing deficit, and the refusal of conservative Republicans to allow spending, that is a non-starter -- though President Barack Obama is expected to reveal some modest growth initiatives in the next few weeks.

The Federal Reserve has hinted it still has tools to boost growth, and all eyes are on a speech next Friday by Fed chairman Ben Bernanke, expected to reveal what it might do.

(And even that could prove difficult: Republican presidential hopeful Texas Governor Rick Perry declared last week that it would be "treasonous" if Bernanke is seen "printing more money.")

Goldman Sachs warned Friday that already-programmed spending cuts would cut US GDP by more than one percent over the next year.

"Just offsetting the expiration of existing (stimulus) measures looks like a challenge, let alone enacting policies that exert a net positive influence on growth in 2012."

Friday, August 05, 2011

Wall Street suffers worst selloff in 2 years

NEW YORK - Investors fled Wall Street in the worst stock-market selloff since the middle of the financial crisis in early 2009 in what has turned into a full-fledged correction.

The Dow and the S&P tumbled more than 4 percent on Thursday and the Nasdaq lost 5 percent on fear the United States is staring at another recession and that Europe's sovereign debt crisis is swallowing two of its largest economies.

Analysts predicted further losses even though stocks have fallen on nine of the last 10 days. Two-year Treasury yields fell to a record low as investors sought safety in short-term government bonds.

"People are throwing in the towel because they can't find relief on any front," said Milton Ezrati, market strategist at Lord Abbett Co. in Jersey City, New Jersey, which manages $110 billion in assets.

The S&P 500's drop puts it more than 10 percent below its April 29 high, considered a correction. Nearly 14 billion shares changed hands, the busiest trading day in more than a year. Decliners beat advancers on the New York Stock Exchange by about 19 to 1.

The market's recent malaise stems from a number of factors. US economic data has worsened, suggesting slowing growth from already sluggish pace in the first half. Europe's sovereign debt crisis has defied remedies and threatens to engulf large euro-zone economies Spain and Italy.

"The debt troubles in Europe, especially with the yields on Italian and Spanish government bonds soaring, are making investors gather as much liquidity as possible," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

The Dow Jones industrial average was down 512.46 points, or 4.31 percent, at 11,383.98. The Standard & Poor's 500 Index fell 60.21 points, or 4.78 percent, at 1,200.13. The Nasdaq Composite Index lost 136.68 points, or 5.08 percent, at 2,556.39.

Some 13.92 billion shares changed hands on the New York Stock Exchange, NYSE Amex and Nasdaq, the highest since June 25, 2010, and well above the daily average of around 7.48 billion.

Losses occurred in all sectors. Among stocks hitting new 52-week lows were Bank of America, down 7.4 percent at $8.83, Citigroup, down 6.6 percent at $34.81, and Hewlett-Packard, down 5.1 percent at $32.54.

Among sectors, losses in energy and materials outpaced others, with S&P energy down 6.8 percent and materials down more than 6.6 percent.

US crude futures settled down $5.30 to $86.63 a barrel in New York.

The CBOE Volatility index jumped 35.4 percent to 31.66, its highest since July 2010. It was the biggest rise since February 2007.

Overseas, the European Central Bank signaled it was buying government bonds in response to a deepening European debt crisis. In Japan, the government intervened in currency markets to stem recent gains in the yen.

On Friday the government releases July's payrolls report, a closely watched number to gauge the US economy.

Chinese 'pressure tactics' pose risks to investors - report

MANILA, Philippines - China’s “pressure tactics” pose risks to firms having interests in the West Philippine Sea (South China Sea) and could hinder the development of the Philippines’ oil and gas reserves in the region, according to a multinational risk consultancy.

In a report released to its clients last July 28, Pacific Strategies & Assessments (PSA) said the tensions in the Spratlys indicate that investors would likely face “serious and costly risks” in their operations.

“While the possibility of a high-level military conflict in the region remains remote in the future, Chinese pressure tactics have shown that the risks faced by non-state oil and gas investors in the South China Sea (SCS) will clearly not be limited to armed conflict in the region,” it said.

PSA, whose clients include multinational firms and embassies, said a prolonged territorial dispute would be the primary hindrance to the development of oil and gas reserves in the region.

“Past and recent developments in the SCS have underscored that a protracted multilateral territorial dispute would be the foremost stumbling block in efforts to commercially develop the oil and gas reserves in the region,” it added.

The Philippines, China, Brunei, Malaysia, Vietnam and Taiwan are claiming parts of the Spratly Islands in the West Philippine Sea.

“Notwithstanding the opportunities in the oil and gas sector, the commitment of Philippine government policies and support vacillate depending on the priorities of the incumbent administration,” the report read.

“This adds to the risks for potential and current oil and gas investors in the Philippines. China, for its part, is expected to maintain its pressure on oil and gas investors in the region,” it added.

PSA, nevertheless, said the Aquino administration had indicated a serious stand to support the gas and oil potentials of the country.

It noted that the government has prodded British firm Forum Energy into exploring Service Contract 72 that includes the Recto Bank (Reed Bank) off Palawan.

PSA, which has offices in Manila, Hong Kong, Shanghai, Beijing, Bangkok, Milwaukee and Sydney, said surveys on SC 72 alone showed 96 billion cubic meters of natural gas potential and 440 million barrels of oil potential.

“The figures are greater than the natural gas reserves of the $130-billion Malampaya project, also in Palawan, as well as the oil reserves in Thailand,” it said.

PSA said the possibility of earning twice the amount from the combined Malampaya project and SC 72 is expected to be a major motivation for the Philippines to remain committed to its territorial claims.

The report noted that the Philippines is heavily dependent on oil imports from the Middle East, with about 90 percent of its oil imports coming from the region.

“The potential oil and natural gas reserves in the South China Sea could prove to be significant in reducing the country’s dependence on Middle East oil,” PSA said.

The Philippines has expressed readiness to bring the territorial dispute in accordance with international law before the United Nations. China, however, said the issue should be resolved through direct negotiations among claimant countries.

DBP files raps vs Ongpin et al for questionable loans

MANILA, Philippines (1st UPDATE) - The Development Bank of the Philippines (DBP) has filed criminal and administrative complaints against former DBP President Rey David, businessman Roberto Ongpin, and 26 other persons over P670 million in loans granted to Ongpin.

DBP President Francisco del Rosario said DBP Assistant Legal Counsel Benjamin Pinpin, who was found dead this week, apparently by suicide, had been included in the investigation into the loan transactions.

DBP lawyer Zenaida Ongkiko-Acorda filed the complaint at the Office of the Ombudsman.

The complaint alleges that a day after the second loan was approved, Ongpin bought P637.5 million shares of Philex Mining Co. from DBP at P12.75 per share. Less than a month later, he sold them for P21 a share to Philex Chairman Manuel Pangilinan.

DBP accuses David and Ongpin of "connivance" in a transaction that, it says, resulted in a P412.4 million opportunity loss.

It accuses David of "exposing DBP to high lending risks" in approving the loans to the Ongpin company which, it said, was undercapitalized.

It says the bank skirted many regulations to grant the loan, the second of which was approved in one day.

The complaint says these are signs of a "behest loan."

Ongpin and David have previously said the loans were proper and also paid.

David today said he was "surprised it comes at this point when the suicide of Attorney Pinpin has happened. They (the present board) have taken this tact as a squid tactic to mask the real cause of the suicide which seems to be a result of their harassment of Pinpin."

In what police said appeared to be a suicide note, Pinpin indicated he had been pressured to cite former officials of the bank for questionable transactions.

Ongpin associate Josephine Manalo, who is also named in the complaint, said Ongpin would release a statement later today.

Controversial deals

In a special report last May, published "DBP-Ongpin-Philex controversial deals detailed," which discussed a controversial loan extended by DBP to Deltaventure Resources Inc. (DVRI) amounting to P510 million.

DVRI used the loan proceeds to purchase the bank's shares in Philex Mining, a listed company that the group of businessman Manuel V. Pangilinan wanted to control.

The loan and the stock transactions occurred in late-2009.

DBP was then led by David.

David had said all the transactions followed banking rules and passed through necessary credit checks. He also said the bank earned hefty sums from trading the Philex Mining shares, resulting in record profits for the bank that year.

In a letter to ABS-CBN News, Ongpin also stressed that the transactions were above-board. The current DBP board initiated an internal audit of these loan-and-stock deals early this year.

Several officers of the bank were identified as having been involved in the processing of the loan and stock transactions.