Stocks breach 4,200-mark

MANILA, Philippines - Stocks advanced for the second session in a row Thursday, breaching the 4,200-mark, on rosy economic outlook.

The key Philippine Stock Exchange index rose 1.1% or 48.46 points to a record high of 4,245.05.

The broader all-share index climbed 1.4% or 35.91 points to 2,676.

Except for the mining and oil sector, all subindices finished in positive territory.

But market breadth was negative as decliners beat advancers, 72 to 57. There were 51 issues unchanged.

Value turnover came in at P5 billion.

Traders said the International Monetary Fund's upward revision for its growth forecast for the Philippines boosted investor sentiment.

Expectations of robust second-half corporate earnings also spurred buying.

Philippine Long Distance Telephone Co. was the most actively traded stock by value, adding 1.2% to P2,760. This brings the stock's total gains to 4.1% in the last 3 trading sessions.

Second most active was SM Investments Corp., which picked up 1.1% to P535. SM said it would issue $400 million of new 2017 bonds, including $213.7 million in an exchange for shorter-dated bonds to lengthen its maturity profile.

Third most active was Metropolitan Bank and Trust Co. It rose 2.2% to P75 on net foreign buying.

In RP, online support may not translate into votes

MANILA, Philippines - “At the Ateneo de Davao University for the Presidential Candidates Forum today,” read the status update on the Facebook fan page linked to the website of presidential candidate Gilbert Teodoro on Tuesday afternoon. The message received 107 comments. Some asked questions about the forum, while others wrote messages of support for the administration’s presidential bet. One user asked the candidate to take action with regards to the “Morong 43.”

It is no surprise in a country that last year Universal McCann dubbed the “social networking capital of the world”, political campaigns are using web platforms like Facebook and Twitter. Presidential hopefuls Gilbert Teodoro, Benigno “Noynoy” Aquino III, Manny Villar, Josesph Estrada, Eddie Villanueva, and Richard Gordon all have social networking accounts linked to their websites

Atty. Mike Toledo, spokesman for Gilbert Teodoro and head of the Gilbert Teodoro Media Bureau told ABS-CBN that the campaign’s online efforts are aimed at youth voters, and that the campaign’s strategy is modeled after President Barrack Obama’s new media outreach efforts during the 2008 American elections.

Earlier in the campaign season ABS-CBN reported that the Aquino campaign was also using new media tactics that were inspired by Obama’s presidential campaign.

Obama’s online campaign has been credited with significantly contributing to his success in the 2008 American elections. His campaign had accounts on Facebook, Twitter, and YouTube, and even tapped one of the founders of Facebook, Chris Hughes, to grow the Democratic candidate’s online presence.

But in the Philippines, which has a more limited Internet penetration than America, it is unclear how online support will translate in to votes. The Nacionalista Party candidate Villar dropped six percentage points in the latest Pulse Asia survey. Villar’s campaign website links to a Facebook fan page that has 817,455 fans, a Twitter account that has 1,296 followers, and a Friendster account with 16,379 fans.

The Pulse Asia survey showed a six percentage point increase for Estrada, who has a comparatively smaller presence on social networking platforms. The Facebook and Twitter accounts linked to Estrada’s official website have 14,560 fans and 670 followers respectively. His Friendster account has 41 fans.

New media consultant Carlo Ople is skeptical that politicians in the Philippines will be able to replicate Obama’s success. “Social media is not a one-night stand. It’s a long term thing,” said Ople, noting that the candidates in the Philippines started their online campaigns only a few months before election day.

Ople, whose client list at one point included Sen. Mar Roxas, says that someone who connects to a candidate on a social networking site will not necessarily vote for that candidate. Ople says he is not working for any of the presidential or vice presidential campaigns this election season.

“It depends on how you use your existing fan base,” said Ople, when asked how social networks may influence the election. Ople believes that growing the number of connections on social networking websites, such as fans on Facebook or followers on Twitter, should only be part of a politician’s social media strategy. According to the consultant, the presidential candidates should try to engage and mobilize their social networking connections.

“If each of your 700,000 [Facebook Fans] gets 10 people to vote that’s 7 million, that’s the swing vote right there” he said. “700,000 people can turn into 700,000 soldiers.” Ople says that the Aquino campaign is the presidential campaign that is best engaging its social media networks, as its online campaign encourages people to participate in offline activities like wearing yellow on Fridays to show support for the candidate.

“We see ourselves as a source of information, as a source of energy,” says Felicity Tan, a volunteer for the Aquino campaign who is part of the team that is building the candidate’s social media networks. According to Tan, some fans of the campaign’s Facebook page use the page to coordinate events among themselves, including events that commemorated anniversary of the People Power Revolution.

Tan says that part of the campaign’s strategy is growing the overall number of Facebook fans, though she admits that not every fan will vote for Aquino. “The more people are engaged in Facebook the more it comes up on status updates, the more you can reach more people,” said Tan, referring to the Facebook features that allow users to see what activities their friends have participated in, like posting on a fan page. Earlier this week the campaign posted a three-step guide on its Facebook fan page showing fans how to invite their friends to join the page.

Tan says that the campaign is always “tweaking” its online strategy, but that it will remain largely unchanged between now and the end of the campaign season. She says that participants in Aquino’s social media campaign may use the latest Pulse Asia survey, which indicated that voters want a presidential candidate who is not corrupt and who cares about the poor, to determine “where we need to reach out more.”

The Aquino campaign maintains presences on multiple social networking sites including Twitter, where it has two accounts. The account @noynoyaquino is updated by the senator, according to Tan. The account @noynoy2010 is updated by campaign volunteers.

The website of Villar also links to several social networking websites, including, Facebook, YouTube, Twitter, Flickr, and Friendster. The Villar campaign did not answer several requests by ABS-CBN News to comment on its social networking strategy and how the campaign is engaging those in their social networks in offline activities.

The Facebook fan page linked to Villar’s website is frequently updated with links to news articles about the candidate, as well as blog entries on the candidate’s website.

The Facebook feature that allows fans to write on the wall of the fan page has been disabled. But fans can comment on the content posted by the page administrators.

One post, which included a picture of a newspaper article about a Social Weather Stations survey, received 1,596 comments. Some users expressed support; others used the comment space to ask the candidate questions.

Ople is skeptical that the online strategies of the presidential campaigns will change much before election day. “Since we’re in the campaign period, you won’t see more innovation,” he said.

Mock polls show voters poorly informed

MANILA, Philippines--The Commission on Elections (Comelec) considered as "almost perfect" the technical side of the mock elections held Saturday morning in 5 cities nationwide, but the exercise posed a bigger concern for the poll body--the unfamiliarity of voters with the new ballot.

The mock polls allowed up to 50 voters in 9 precincts in 5 cities nationwide to go through the entire process of automated voting--from shading the sample ballots, feeding ballots on to the machines, and witnessing the transmission of the data from the election machine to the Comelec servers.

Mock voting in precincts ran from 8 a.m. to 10 a.m., after which the data in each machine were sent to 3 test servers--the central server at the Comelec main office in Manila, server at the Kapisanan ng mga Brodkaster sa Pilipinas (KBP) office, and server at the city hall of the precincts' localities. For redundancy and auditing purposes, city canvassers will then send their data to the central server.

"From the technical point of view and the platform point of view, everything worked as expected a 100%," said Cesar Flores, Smartmatic president for Southeast Asia.

Melo: 'Almost perfect'

Comelec chair Jose Melo said that since only minor glitches were encountered, the mock elections should be considered "almost perfect."

The central server at Comelec received data from the various voting and canvassing centers up to 11am.

Before 10 a.m.:
9:08 Bulacao Community School (Cebu City)
9:54 Pines City Natl High School (Baguio)
9:50 Community Youth Center (Baguio)
9:59 Cebu City board of canvassers

10 am to 11 a.m.:
10:02 New Era Elementary School (Quezon City)
10:18 Ricardo Papa Memorial High School (Taguig City)
10:18 Quezon City board of canvassers
10:19 Baguio City board of canvassers
10:21 Generoso Elementary School (Davao City)
10:23 Mabini Elementary School (Cebu City)
10:26 Alejandra Navarro Elementary School (Davao City)
10:50 Davao City board of canvassers

Beyond 11 a.m.:
11:11 Maharlika Elementary School (Taguig City)
11:28 Taguig City board of canvassers
11:54 Taguig-Pateros district board of canvassers

The votes from Taguig came late, as voting in Maharlika Elementary School was delayed. A lot of registered voters reportedly swamped the polling place to participate in the drill, not aware of the 50-voter limitation. But the data was transmitted before lunchtime.

Election officers noted that the transmission of data from the precincts to the test servers took 1 to 2 minutes. All election machines transmitted data using GSM signals.

Officials stationed at the New Era Elementary School initially reported difficulty in sending data to the KBP server, but was able to send successfully after 3 attempts. It was found out, according to Quezon City election officer Ronald Allan Sindo, that the KBP server was down during the initial transmissions.

Poorly-informed voters

Based on observations by poll officials, the mock polls show that there are concerns coming from the voters that should be given more attention.

Michael Dioneda, election director for National Capital Region, said that most participants were not clearly informed on how to properly handle the ballots. Due to errors in marking the ballots, 5 ballots in Quezon City and 3 in Taguig City were not accepted by the election machines. These ballots will be brought to Comelec for further studying.

Also, a participant in Taguig City was reported as a "flying voter," as he was able to vote twice in the mock poll. It was also reported that his index finger was not marked with indelible ink, hence making it easy for him to vote the second time. Makati City election officer Juliet Villar said that it was not an error made by the assigned BEI, but rather by the voter himself.

Dioneda said that a "massive voters education" is indeed needed as the automated elections come near.

He added that some voters complained about the small fonts of the ballots, and noted the need to install a projector at the city canvassing to let watchers view the counting process.

In an earlier interview, Comelec Commissioner Gregorio Larrazabal said that another set of mock elections, this time in rural areas, might be set in the coming days.

Ex-officials warn of looming failure of May polls

MANILA, Philippines - All indications of a looming failure of the May 10 elections are becoming more visible with the delays and glitches involving the Precinct Count Optical Scan (PCOS) machines, former government officials opposed to President Gloria Macapagal Arroyo said Saturday.

"Deliveries, testing, calibration, validation and training for automated elections are delayed. Ballot printing is also delayed... The risks of failures of the 2010 elections are increasing everyday," the group, Former Senior Government Officials (FSGO), said in a statement.

The group said that Mrs. Arroyo should be blamed if the May 10 national and local polls fail.

"All preparations for the [automated elections] occurred under the GMA administration and the Melo Comelec, as the Abalos Comelec, are mostly or totally composed of GMA appointees," the FSGO said.

The FSGO said a failure of elections, even in an automated system, can only be "deliberate" and "engineered by the GMA administration."

The group issued the statement after 2 field tests transmitting counted votes from PCOS machines to several national level servers suffered hitches.

The PCOS machines failed to immediately transmit votes to the central server of the Comelec due to weak mobile network signals. However, the glitches were solved after SIM cards were changed.

Aside from these hitches, several other concerns about the full automation of the May 10 elections have been raised, including the lab and field testing of all the counting machines, late training of teachers, and the fielding of 50,000 IT experts by the Smarmatic-TIM.

The PCOS machines supplier and the Comelec have yet to disclose before a joint congressional oversight committee how and when the IT experts will be mobilized to help address problems in poll automation.

At ABS-CBN News Channel's (ANC) poll automation forum on Friday night, Smartmatic-TIM international sales director Cesar Flores admitted that some PCOS machines might not work during election day.

Flores, however, clarified that measures to avoid machine failures are now being undertaken.

He said all 82,200 PCOS machines will be tested in polling centers 3 days before the actual elections.

Comelec Commissioner Gregorio Larrazabal assured during the forum that the poll body is prepared to go manual in case the automation system fails.

Larrazabal said the counting of votes manually and automatically on election day can be done.

SC can block Arroyo's appointment of new Chief Justice: Bernas

MANILA, Philippines - Even without a formal petition filed before it, the Supreme Court (SC) on its own could put an end to the raging controversy surrounding President Gloria Macapagal Arroyo’s possible naming of a chief justice during the period covered by the election appointment ban, according to constitutionalist Fr. Joaquin Bernas.

In a forum organized by the watchdog group Supreme Court Appointments Watch (SCAW), Bernas, dean emeritus of the Ateneo de Manila Law School, said the SC, motu propio or on its own accord, could rule on the constitutionality of Arroyo’s selection of a replacement for Chief Justice (CJ) Reynato Puno.

If Arroyo forces the issue and appoints the next chief justice, he said the SC could strike it down without waiting for a party to lodge a petition.

Puno will retire on May 17, and Mrs. Arroyo would then have 44 days left in office.

Under the 1987 Constitution, an outgoing president is barred from making appointments two months before an election and until the end of his or her term. In the case of Mrs. Arroyo, she cannot issue midnight appointments from March 10 to June 30.

Precedent cases

Citing the case involving the disputed appointments of judges Mateo Valenzuela and Placido Vallarta to the Regional Trial Court (RTC) in May 1998, Bernas stressed that the SC en banc went ahead on its own and invalidated the judges’ appointments since these were well within the period covered by the election appointment ban.

Sen. Franklin Drilon, a former Judicial and Bar Council (JBC) member, said that in this particular case, no other party was involved, and the SC treated it as an administrative matter right after then Chief Justice Andres Narvasa received the letters from Malacañang appointing Valenzuela and Vallarta to the RTC.

However, Drilon said he doubts the current SC would, on its own initiative, take this step. He noted that 14 out of the 15 sitting justices were appointed to the High Court by Mrs. Arroyo.

Puno was appointed to the bench by former President Fidel Ramos, but he was named Chief Justice by President Arroyo in December 2006.

Surprised with Puno's stand

Puno’s stand on the matter would have been instructive on how SC will handle the issue, but Bernas admitted he "cannot understand" why the chief justice made a recent statement supporting the argument that the chief justice post should not be left vacant during the election period.

Puno said having a chief justice is crucial once election cases start to roll in. The chief justice chairs the Presidential Electoral Tribunal, which resolves disputes involving the presidential race.

JBC member Rep. Matias Defensor, a known Arroyo ally, gave the same reason when he proposed that the JBC hold an early nomination for Puno’s replacement. He did not attend the forum although he confirmed that he would.

Bernas shook his head at this opinion, noting that an acting chief justice could head the Presidential Electoral Tribunal. “All I can say is I cannot understand why Puno is saying that,” he said.

Constitutional crisis feared

In the event the JBC does not submit a list and President Arroyo appoints a chief justice during the period of the appointment ban, Bernas said this would trigger a constitutional crisis as this would be a blatant violation of the Constitution.

He said the worst-case scenario is widespread protest in response to Arroyo's midnight appointment. Asked if he would join the protest, Bernas said: "Why not?"

Drilon said the Integrated Bar of the Philippines (IBP), which comprises all those who passed the bar, should lead the protest.

IBP chief of staff and general counsel Rodolfo Urbiztondo said the IBP does not have an official stand yet on the issue.

'Accessory to the crime'

Bernas said that a justice who accepts an appointment under these circumstances would be an "accessory to the crime" since the appointment would constitute a "culpable violation of the Constitution," and this means the new chief justice may be impeached.

Drilon urged the JBC not to submit a list of nominees during the period of the election appointment ban since Mrs. Arroyo will surely take advantage of it and appoint a new chief justice.

In case this happens, Drilon said he will seek an injunction from the Supreme Court. He supported Bernas' view that the SC, motu propio or on its own, may stop the JBC from submitting its list of nominees to the president.

Possible compromise

Bernas said it is possible to implement the two contradictory provisions in the Constitution on the election appointment ban and the need to fill the vacancy in the Supreme Court within 90 days from time Puno retires on May 17.

The solution, Bernas said, is to prevent President Arroyo from naming the next chief justice and to just let the next president make the appointment. He noted that the next chief executive would still have 45 days left or until August 15 to choose the next chief justice from the time he or she assumes office on June 30, 2010.

This way, Bernas said the two provisions in the Constitution would be followed.

Bernas and Drilon said no less than the credibility of the Supreme Court is at stake, especially if the next president does not recognize Arroyo's appointment of the new chief justice.

Stop the JBC

Meanwhile, amid a heated debate over the issue, the JBC last Wednesday opened the application for the next chief justice with more than 100 days to go before Puno leaves the top post in the judiciary.

SCAW executive director Vincent Lazatin decried that this move is highly "abnormal" since the JBC usually starts accepting applications 40 days before a vacancy is created.

Bernas said, however, that opening the selection process does not violate the Constitution.

The legal problem only arises when the JBC transmits its shortlist to the Office of the President. Bernas noted that Arroyo would still have ample time to appoint the Chief Justice if the list is submitted right after Puno's retirement.

But Bernas said the JBC may be prevented from submitting its list if the SC issues a temporary restraining order.

2010 burden: Philippine deficits and debts

MANILA, Philippines - Each Filipino now owes P47,039 to local and foreign creditors, based on the national government's total debt stock as of September.

A month before that, each of the 92.2 million Filipinos owed P45,889.

The culprit: the widening budget deficit that prompts the government to borrow some more. Additional debts, which address current funding needs but could be paid in the future, translate to more debt burden for future generations.

The fact that the Philippines has been spending more than it earns is not earthshaking. Even the richest of countries have budget gaps. But prudence dictates that this deficit, which is a fiscal policy issue, has to be manageable.

Already, there are concerns about how the Philippines is faring as far as fiscal discipline is concerned.

The Philippines blew past its P250-billion fiscal gap target for 2009, recording a deficit of P272.5 billion with one more month to go before the year ends.

If this year's experience is any guide, analysts believe the country's 2010 budget deficit will also breach the government's official target.

Forecast

Weak revenues—due to slower economic growth, several revenue-eroding laws, the negative impact of typhoons on tax collection, and lackluster privatization of assets—have been blamed for the wider-than-targeted deficit this year.

Except for privatization, which is expected to pick up steam, the same factors are seen to push the budget deficit above goal in 2010.

Despite the continued deterioration in the government's fiscal position, analysts at some of the biggest banking institutions say it's not as bad as it seems.

The government had set next year's budget deficit ceiling at P233.4 billion, but the country's economic managers are looking to increase this "to incorporate realistic assumptions."

They said more revenue-eroding measures that will take effect next year as well as the lingering economic downturn will take toll on the collections of the government's main tax agencies, the Bureau of Internal Revenue and Bureau of Customs.

The government is also expected to spend more for reconstruction efforts following back-to-back typhoons.

Taking these into account, Finance Secretary Margarito Teves said the actual 2010 deficit figure may hit close to P300 billion, the same as their "worst-case scenario" for the 2009 budget gap.

Teves' forecast is in line with analysts' consensus.

Not alone

Viewed in the context of the current economic crisis, financial experts say the country's swelling budget shortfall is not worrisome at all.

Unlike in 2004, when the poor fiscal state of the country was a product of the government's own hubris, the recent global crisis has made a large deficit more acceptable.

According to Metrobank head of research Marc Bautista, the country needs to incur a deficit to be able to sustain economic growth by curing sluggish demand through increased spending.

He noted that other countries are doing the same thing.

"There is room for deficit spending in 2010, the markets all but expect it already, and the Philippines is not alone in this predicament," Bautista said.

DBS strategist Philip Wee, for his part, said the widening budget gap has not really affected the strength of the Philippines , given the country's steadily rising external liquidity, and the peso's stability.

Fiscal consolidation

Nonetheless, the Philippines is eyeing to wipe out its budget deficit by 2013.

The country first targeted to balance the budget in 2008, but pushed this goal back to 2010 due to adverse external developments, including the rise in commodity prices and the onset of the global financial crisis. The 2010 goal was pushed further to 2013 to accommodate deficit spending for the economy.

As the country consolidates its fiscal position, Teves said that the government’s debt as a percentage of gross domestic product will also drop to 46.1% by 2013 from the programmed 57.6% by end-2009.

Similarly, he said the consolidated public sector fiscal position—the combined fiscal positions of the government, state-owned agencies and government financial institutions—will post a surplus during that year.

In the end, the economic managers will be assessed on how they managed the country’s finances. After all, it is the future generations of Filipinos who will bear the burden of today’s folly.