Regulators close banks in four states

WASHINGTON – US bank regulators closed 4 banks in as many states on Friday, bringing the number of failures so far this year to 26 as deteriorating loans continued taking a toll on financial institutions.

The largest of the four was Sun American Bank of Boca Raton, Florida, which had approximately $535.7 million in total assets and $443.5 million in total deposits, the Federal Deposit Insurance Corp (FDIC) said.

Regulators also closed Centennial Bank of Odgen, Utah, Waterfield Bank of Germantown, Maryland, and Bank of Illinois of Normal, Illinois.

FDIC Chairman Sheila Bair has said she expects bank failures to remain high through 2010, even as the economy improves, because the bank industry is continuing to recognize loan losses and clean up their balance sheets.

Regulators closed 140 banks in 2009, up from 25 in 2008 and only 3 in 2007.

The industry's woes are moving from residential loans and complex securities to more conventional types of retail and commercial loans hit hard by the recession.

The 12 branches of Sun American Bank will reopen on Monday as branches of First-Citizens Bank & Trust Company of Raleigh, North Carolina, which is assuming the deposits and purchasing essentially all the assets, FDIC said.

However, FDIC was unable to find a buyer for Centennial Bank so checks will be mailed on Monday to retail depositors for their insured funds, the agency said.

The bank had approximately $215.2 million in total assets and $205.1 million in total deposits. An estimated $1.8 million of those funds were uninsured, but that number could change as more information becomes available, FDIC said.

It encouraged customers with more than $250,000 in their accounts at Centennial to call the FDIC at 1-800-889-4976 to set up an appointment to discuss their deposits.

The FDIC also had to create a new depository institution to take over the operations of Waterfield Bank.

It said the new institution, also called Waterfield Bank, will remain open until April 5 to allow depositors access to their insured funds and time to move their accounts.

Waterfield Bank had $155.6 million in assets and $156.4 million in deposits. After April 5, the FDIC will mail checks to customers who have not closed their accounts or transferred their funds to another institution.

It estimated uninsured funds in Waterfield at about $407,000, but said that could change.

Heartland Bank and Trust of Bloomington, Illinois, agreed to assume the deposits of Bank of Illinois, whose two branches will reopen on Saturday as branches of Heartland.

FDIC said Bank of Illinois had $211.7 million in assets and $198.5 million in deposits. Heartland paid the FDIC a premium of 3.61% to assume the deposits and agreed to purchase essentially all of the failed bank's assets, FDIC said.

Arroyo wants to tap 'power crisis' provision in EPIRA

MANILA, Philippines (2nd UPDATE) - President Gloria Arroyo has decided to adopt Energy Secretary Angelo Reyes’ proposal for the president to tap Section 71 of the Electric Power Industry Reform Act (EPIRA) and decisively solve the power crisis in Mindanao. However, this would make power more expensive.

Ambushed by Malacañang media at the awarding ceremonies for the 10 outstanding policemen, the President said, “Yes, yes, I'm adopting his (Reyes') recommendations.”

However, the president was unable to thresh out the details of what she approved.

When sought for comment in a subsequent Palace briefing, deputy presidential spokesperson Ricardo Saludo reported the following:

• lease rental of modular generating sets adding 160 megawatts (MW);
• operation of the Iigan diesel powered plant, adding 50-65 MW; and,
• increased contracting capacity from Southern Philippines Power Corporation for 5 MW.

Saludo said these measures would raise electricity costs since the added power would come from costlier oil-fired plants.

Mindanao currently relies heavily on hydroelectric power, which takes a hit from low water supply during an El Niño phenomenon.

“We're very much concerned, and we share the serious worries of consumers and the private sector over the power situation in different parts of the country. And it has been our long time policy to encourage investment and build plants as the economy grows,” Saludo said.

Power crisis recommended

Reyes had earlier recommended the declaration of a Mindanao power crisis to enable government to contract additional generating capacity under Section 71 of the EPIRA.

Saludo could not immediately clarify if invoking Section 71 was also part of what was approved---as that would mean calling for a special session of Congress to approve a joint resolution to authorize the president to add generating capacity.

”We haven’t gone that far (calling on allies). The President is accepting the recommendation of the secretary of energy to declare a power crisis in Mindanao. That’s as far as it has gone. But calling a special session, we weren’t aware of such steps yet, but immediate steps ginagawa na," he said.

When told that House Speaker Prospero Nograles is afraid he might not be able to muster a quorum for a joint session for this purpose, Salcedo said: "We have to work with Congress. We have to see what may be feasible."

Section 71 was meant as a safeguard against the notorious take-or-pay provision of the Independent Power Producers (IPPs), which sent power rates soaring years ago.

Quorum a problem

Saludo himself expressed reservations that a quorum could be mustered since both houses of Congress are on campaign break till May 31 to allow lawmakers to campaign for the May 10 elections.

“I'm not sure she has gone that far (calling for special session). The Department of Energy (DOE) report didn’t say anything about a special session. It just recommended that a power crisis be declared in Mindanao. Whether there's need for special session, whether this can wait till Congress reconvenes in June, we leave that to the DOE to determine," he added.

Saludo isn’t also sure if leasing generation sets would be allowed without the congressional authority, since it could fall within the language of the law requiring additional generating capacity to be authorized by Congress first.

On Monday, the House energy committee, chaired by the President’s son, Pampanga 2nd district Rep. Mikey Arroyo, approved the recommendation for a special session of Congress to address the power crisis.

However, the President, under the Constitution, must be the one to call for the special session.

Enrile also doubts quorum

For his part, Senate President Juan Ponce Enrile said: "I am willing to convene a special session to take up that proposal, but the question is if we can muster a quorum to convene a special session, since everyone is campaigning now. Besides, we have to know what kind of emergency powers are we going to grant President Arroyo? We have to specify that. But my primary concern is if we will be able to muster a quorum to convene."

Section 71 empowers the president, with the consent of Congress in a joint resolution, to enter into agreements to ensure the supply of electricity at times of crisis.

The president is also set to show off her new Cabinet members to the media during the weekly Cabinet meeting set for Tuesday next week. It will be held in Sulu.

Last February, the House committee on energy, chaired by Rep. Arroyo, discussed during a hearing the emergency powers for the president. The concensus was to call for a special session.

Ampatuan silencing massacre witnesses: hitman

MANILA, Philippines - A man who says he took part in last November's massacre in Maguindanao province has told Al Jazeera how he now fears he too will be killed as the alleged mastermind of the killings seeks to silence potential witnesses against him.

In an exclusive interview, the man known as "Jesse" told how he had been ordered to kill a witness, and he now fears he will be next after the head of a powerful clan placed a bounty on his life.

"[Datu Unsay] gave the order for me to kill this one guy who could have been a witness against them," he said.

"I did it. If I didn't do as told, they would kill me."

The November 23 massacre in the southern Philippine province of Maguindanao was the country's worst single incident of politically-related violence, leaving at least 57 people dead.

The killings are believed to have been masterminded by a leading member of a powerful local clan, Andal Ampatuan Jr., also known as Datu Unsay, in an attack on the family of a political rival.

More than 20 accompanying journalists and some passers-by were also killed in what investigators say was an attempt by the attackers to cover their tracks.

Ampatuan Jr. is now being held in a Manila jail accused of multiple counts of murder, although his trial was recently suspended indefinitely, pending decisions on motions filed by his lawyers.

Speaking to Al Jazeera, Jesse admitted he had taken part in the November killings, but said that as an employee of Ampatuan Jr.'s cousin, he had to either kill or be killed.

And he said the attack was carried out not on Ampatuan Jr's orders, but on the orders of his father, the clan patriarch and former governor of the province.

"I was there when they met a week prior and talked about the killings," he said.

"Unsay only does what he is told by Andal Sr… I followed orders too… I fired shots, I don't know how many I hit … if I hadn't - well, we know what Unsay is like."

Now in hiding and using an assumed name, Jesse is awaiting a decision from Philippine authorities on his plea for witness protection in return for his testimony.

In the meantime, he says, Ampatuan Jr. has placed a $45,000 bounty on his head.

Political ties

The Ampatuan clan has fiercely denied any involvement in the massacre.

Ampatuan Sr. has controlled Maguindanao province for most of the past decade and had been grooming his son to take his place as governor in national elections scheduled for May.

The family also had close political ties to Gloria Arroyo, the Philippine president who critics say had allowed the Ampatuans to build up a powerful militia in return for delivering votes.

Marga Ortigas, Al Jazeera's Manila correspondent, says the investigation into the massacre has been seen as a test not only of the Philippine judiciary but of the strength of the country's democracy as a whole.

While dozens of other clan members have been charged in relation to the killings, only one man – Ampatuan Jr. – has so far been brought to court.

With his trial now suspended, many Filipinos are skeptical that the perpetrators of the massacre will ever be brought to justice.

Court authorities have rejected accusations of political pressure and say they are doing the best they can.

In any case, Jesse told Al Jazeera, inside or outside of jail, the Ampatuan clan has a long reach.

"Unsay has been telling his men to be patient, that he'll get out. And when he does, he will punish anyone who turned against them," he said.

Villar's ads exceed combined airtime of 5 rivals

MANILA, Philippines--The advertisements of Nacionalista Party (NP) standard bearer Manuel Villar Jr. were aired for a total of 8,730 minutes (6 days) in a span of 3 months before the start of the official campaign period, exceeding the combined airtime of 5 other leading presidential candidates during the same period.

This was according to data of AGB Nielsen Media Research which were presented on Thursday by Pera at Pulitika (PaP), a consortium seeking to monitor election campaign financing.

Television and radio ads of the 6 top presidential candidates were aired for a total of 15,479 minutes from Nov. 1, 2009, to Feb. 8, 2010. The official campaign period started on February 9.

If played continuously, all these ads will take nearly 11 days to watch and listen to.

Senator Benigno Aquino III, former president Joseph Estrada, former defense secretary Gilberto Teodoro Jr., Senator Richard Gordon, and evangelist Eddie Villanueva had a combined airtime of 6,747 minutes or over 4 days.

Lawyer Roberto Cadiz, PaP consortium chairman and Libertas executive director, said the May 2010 polls is proving to be the most expensive elections. Citing historical data, Cadiz said they are expecting most of the candidates to spend 95% of their campaign kitty on media.

Total television and radio airtime (in minutes) from Nov. 1, 2009 to Feb. 8, 2010
Candidate	Television airtime	Radio airtime
Senator Benigno Aquino III	536.8	965.5
Former President Joseph Estrada	152.0	141.0
Senator Richard Gordon	776.0	622.5
Former Defense Secretary Gilbert Teodoro	871.0	2,111.0
Brother Eduardo Villanueva	513.3	60.0
Senator Manuel Villar	2054	6676.5
Total of all candidates	4,903	10,576.5
Source: Pera't Pulitika, AGB Nielsen media research group

Ad spending

Based on published rate cards, Villar’s ads cost a total of P1.2 billion in 3 months. It’s almost equal to the combined spending of P1.3 billion by 5 other leading presidential candidates.

Republic Act 9006 or the Fair Elections Act mandates media organizations to give candidates various discount—30% for television, 20% for radio, and 10% for print.

Villar has earlier claimed that he got a 66% discount because he bought the media spots very early.

Ad spending from Nov. 1, 2009 to Feb 8, 2010
Candidate	Ad spending
Senator Benigno Aquino III	P357.58 million
Former President Joseph Estrada	P92.7 million
Senator Richard Gordon	P245.9 million
Former Defense Secretary Gilbert Teodoro	P472.8 million
Brother Eduardo Villanueva	P103 million
Senator Manuel Villar	P1.2 billion
Total of all candidates	P2.5 billion
Source: Pera't Pulitika, AGB Nielsen media research group

Thunder spoil McGrady's Knicks debut with OT win

NEW YORK – The Oklahoma City Thunder spoiled Tracy McGrady's New York debut with a 121-118 overtime victory for their eighth consecutive win on Saturday.

Kevin Durant powered the Thunder, scoring the game's final four points and 36 for the game to send the Knicks to their sixth successive loss.

It marked the 27th consecutive game the All-Star forward has scored 25 or more points. Team mate Russell Westbrook added 31 points as the Thunder erased a six-point deficit in the final minute to force overtime on Durant's three-pointer.

McGrady, traded to the Knicks by the Houston Rockets on Thursday, scored 26 points and delivered five assists in his first game since December.

"It felt foreign to me when I first stepped out there," the 30-year-old told reporters. "I didn't know if I was going to have my timing. I had the jitters. I mean, I haven't played in so long, you know?"

The seven-times All Star went on to play 32 minutes, longer than he expected.

"It really felt good," said McGrady, who started at shooting guard.

"I think it helped my confidence moving forward as far as mentally knowing that I can go out there and play a significant amount of minutes."

But he was in the game for only 19 seconds in overtime.

"He kind of ran out of gas toward the end," Knicks coach Mike D'Antoni said while praising McGrady's overall play.

"He's been an All Star for a long time," D'Antoni said. "I expect him to play at that level or get back to that level at some time."

David Lee topped the Knicks with 30 points and former Boston Celtics' guard Eddie House had 24.

House's jumper, off an assist by McGrady, gave the Knicks a 118-117 lead with 30 seconds to play in overtime.

Then Durant took over.

"He reminds me of myself when I was younger," said McGrady.

Venus adds another record to her collection

DUBAI – Venus Williams became the most successful active woman player on the WTA Tour when she secured her 42nd title by successfully defending the Dubai Open here on Saturday.

Williams, who beat Victoria Azarenka 6-3, 7-5 in an absorbing final, thus overtook Justine Henin's record of 41 titles, only two months after achieving another notable statistic -- a career total of $25 million in prize money.

She and her sister Serena are the only two women to have achieved this feat, but both Venus's resilient performance and her optimistic words suggested that further remarkable statistics are in the pipeline.

Asked if she now hoped to add to her tally of Grand Slam titles, the five-time Wimbledon champion replied: "Absolutely. I am so happy to have added to my collection here. And I am keen to keep adding every time."

Venus also made reference to the diplomatic success of a tournament which accommodated the first Israeli woman, Shahar Peer, ever to compete in the United Arab Emirates.

"It was a great tournament to have everyone included," she said.

Later she added: "Obviously we had issues with everyone getting included," referring to the refusal of Peer's UAE visa in 2009. "But this year it was great to show a spirit of inclusion and equality."

Venus went on: "I definitely think her playing has an influence on things outside the tennis. We need government to do the right thing like they did here and people of courage to come here and play, to play so well with focus."

Venus felt her good form was in significant measure due to having found a way of managing her long-lasting fitness problems, especially with a knee, and she delighted, she said, in being able to throw away the bandages she had to wear for much of last year.

The match was full of noisily powerful rallies -- Azarenka usually trying to work an initiative, Venus more likely to win the rally with one blow, Azarenka accompanying everything with a loud coo, Venus with an ominous roar.

The first set hinged on the pressure Venus placed on her opponent's second serves, which brought an Azarenka double fault on game point at 2-3 -- though it required Venus to make a successful appeal to Hawkeye to prove that the second serve was too long.

Having closed out the first set, Venus's momentum accelerated. She struck the ball with even more confidence, broke again immediately, and the feeling of the contest changed dramatically as she hurtled to 3-1.

However, as against Anastasia Pavluchenkova and Shahar Peer, Venus's serve wobbled a little with the end in sight. A creaky double fault at 3-2 gave Azarenka a break back point, and a moderate second serve allowed the fourth seed to make a return which converted that chance immediately.

But Venus broke again for 6-5, courtesy of an ill-timed foray to the net by the 20-year-old Azarenka, and closed out the match in the next game at the third attempt.

"I'm definitely starting to feel better," Venus concluded.

"It's been a learning curve in managing the playing and keep the swelling (of the knee) down. I don't usually talk about my injuries this much, but I am excited about what is happening."

Ayala Land to invest in P2.5-B project in Cagayan de Oro

MANILA, Philipines - Property giant Ayala Land Inc. has partnered with Floirendo-owned Anflo Management and Investment Corp and Mindanao Corp. to transform a 3.2-hectare property in Cagayan de Oro City into a mixed-used development.

In a disclosure to the stock exchange, Ayala Land said total initial investment for the project will reach P2.5 billion.

The project involves the construction of a shopping mall, an office building catering to business process outsourcing companies and a boutique hotel.

The proposed mall will have 40,000 square meters of gross leasable space that will offer unique, dining, entertainment and retail concepts that will serve immediate communities, tourists, and transients.

"The City of Cagayan de Oro is a trade and commercial center serving as a transport hub for the Northern Mindanao and considered as a high growth area. With Ayala Land's unmatched experience in developing world class real estate developments and the Anflogroup's strong corporate presence in the area, the project is envisioned to be an integrated mixed-use development that will change Cagayan de Oro's urban landscape," the company said.

This is the second partnership between Ayala Land and the Davao-based Floirendo family. In 2007, the two groups also partnered for the development of a 9-hectare property in Davao City.

The joint venture partners proposed to invest P2.3 billion for the construction of a 40,000-square meter retail development and a 20,000-sqm BPO component.

Ayala Land earlier said it plans to spend P27.2 billion to finance the construction of 32 real estate projects, including new malls, office buildings and residential condominiums.

Arroyo makes last-minute appointments, says ex-CSC chief

MANILA, Philippines - The next President has about a month to put in place a new Cabinet. According to the 1987 Constitution, the outgoing President is not allowed to appoint any Cabinet member 2 months before the upcoming elections or starting March 11, 2010.

But Karina Constatino-David, former Civil Service Commission (CSC) chair, says the President is making last-minute appointments as an “obvious attempt to control the next government.”

Among Constitutional bodies, David pointed out to abs-cbnNEWS.com/Newsbreak the recent appointment of Francisco Duque as CSC chair.

CSC Chairman Francisco Duque III:

· Confirmed appointment: February 3, 2010
· Duration of term according to the constitution: 7 fixed years
· Congress: 15th, 16th and first year of the 17th Congress
· Replaced Ricardo Saludo as CSC chair after the CA rejected his appointment last September 2009. Saludo was appointed CSC chair last April 21, 2008.
· Appointed Health Secretary last 2005, resigned January 2010.

Constitutional bodies, according to Article IX, Section 1 of the Constitution, are independent of the President. To further emphasize the Commissions’ independence, the Constitutes states that they “enjoy fiscal autonomy. Their approved annual appropriations are automatically and regularly released.” (Read the common provisions of Article 9 in the Constitution)

The chairs and commissioners of the Commissions have fixed terms. This means that if they are appointed by the current President, the next President does not have the liberty to dismiss them unless for cause and only after investigation. The chairs have 7 years in office.

Office of the Ombudsman

The Ombudsman is the office that acts on complaints filed against government officials and employees—even those in government-owned or controlled corporations. (Read more: Section 12, Article XI of the 1987 Constitution)

According to David, the following are crucial posts. (Read: Arroyo to fill up 2 more sensitive posts before ban)

Outgoing Special Prosecutor Dennis Villa-Ignacio
· Term ending: February 24, 2010
· Duration of term according to the Constitution: 7 fixed years
· Reappointment not allowed

Outgoing Deputy Ombudsman for Luzon Victor Fernandez
· Term ending: March 4, 2010
· Duration of term according to the Constitution: 7 fixed years
· Reappointment not allowed

Terms of PAGCOR chair and AFP chief of staff

There are moves in both houses of Congress to bestow fixed terms on the Armed Forces chief of staff and the chairman of the Philippine Amusement and Gaming Corporation (Pagcor). The Pagcor chair and AFP chief of staff do not have fixed terms.

Pagcor is one of the government’s revenue generating corporations—a big source of discretionary funds for the Office of the President because a big chunk of its revenues is directed to the President’s Social Fund.

The corporation was created to regulate all “games of chance,” particularly the casino gaming industry. Its funds, according to its mandate, will be for the government’s socio-civic national development efforts and to help boost the country’s tourism industry. (Know more about Pagcor)

Pagcor Chairman Efraim Genuino
· House bill 6812 (mother bill 6989) filed by House Speaker Prospero “Boy” Nograles, member of the administration’s Lakas-Kampi-CMD political party
- Seeks to fix the term of the Chairman and all board directors between 3 to 7 years
· Genuino was somewhat linked to the Jose Pidal controversy last 2003 because he was seen leaving with boxes of unknown contents at the Arroyo’s building in Legaspi Village , Makati where the First Gentleman holds office.
· Genuino was also linked to the "Hello, Garci" scandal last 2004 elections; he met with former Comelec commisisioner Virgilio Garcillano at the Manila Diamond Hotel.

Armed Forces Chief of Staff Victor Ibrado
· Appointed: May 1, 2009 (replacing former chief of staff Gen. Alexander Yano)
· Expiration of term: March 10, 2010
· Replacement or extension of Ibrado is still to be decided
· Senate Bill 31 filed by former AFP Chief of Staff Senator Rodolfo Biazon
- Seeks to have a fixed term of 3 years for the AFP chief of staff. The term shall commence on the date of appointment, not the date of confirmation by the CA.
- Prohibits the appointment of an AFP whose active service will expire in less than 1 year.
- No term extension is allowed unless when there is war or
- Chief of Staff could be removed by the President for loss of confidence.

· Presidential hopefuls Senators Benigno Aquino III and Manuel Villar Jr. and Senator Francis Escudero signed a manifesto urging Arroyo to allow Ibrado to continue the leadership of the military during the critical phase of the May 2010 elections.

· Biazon prefers that Ibrado stay in post to erase doubt of a partisan military in the upcoming elections (Read: Will Arroyo retain Ibrado as AFP chief?)

Other appointees

Philippine Tourism General Manager Mark Lapid

- Appointed as acting-General Manager: June 3, 2008
- Appointed General Manager: April 14, 2009
- Term expiration: 2015
- According to Presidential Decree 1400 amending Section 13 of PD 564: he shall have a fixed term of 6 years

- He could serve after his term while waiting for his successor to by appointed and qualified.

National Anti-Poverty Council (NAPC)

Accreditation for new members of the basic sectors of the NAPC is being rushed by the President as their terms will end this February, according to NAPC-non government organizations council office in charge Karen Tañada.

The NAPC Basic Sectors consist of more or less 300 organizations representing marginalized groups in the country.

In an exchange of e-mails with this writer, Tañada said that they received a memo from the NAPC secretariat last February 2, 2010 saying that the general assemblies for the NAPC basic sectors would be held on February 5-7, 2010—revising an earlier announcement that it was going to be held on February 16-18.

She said this is an order from the Office of the President.

The general assembly is a venue wherein NAPC basic sector councils will be replaced. The current members’ terms were extended and were supposed to end July 2008, Tañada said.

Last August 2008, the President issued Administration Order 187 which provides new qualifications for sectoral groups to be nominated and be part of the council.

“The process for replacing these (current) members of NAPC Basic Sector Councils is through Sectoral General Assemblies but we had long debates about the process for this when Pres. Arroyo issued new guidelines inAO 187,” Tañada said.

She questioned the eligibility for membership of the councils such as having national constituency of the nominated groups. She said that at least 50% of the current sectoral council members are not qualified and that this would defeat the idea of having basic sectors at the grassroots—not really nationally represented.

The new process of organization selection would also need the recommendation of the Lead Convenor of NAPC, who is currently Domingo Panganiban.

“The timing of the administration’s push for the sectoral assemblies and elections of basic sector representatives despite all protests and difficulty, makes us suspect that this is being done to saddle
the new administration with sectoral representatives handpicked from the limited basic sector organizations that are willing or were tailored to meet A.O. 187 requirements, and beholden to the current administration. And since Gloria Macapagal Arroyo insists on playing a critical role in the coming Congress after June 30, 2010, her various appointees, including the "basic sectors" can support her game plan,” she said in a statement.

Use of NAPC funds

Section 10 of Republic Act No. 8425, or the law that institutionalizes NAPC, established the People’s Development Trust Fund (PDTF) monitored by the NAPC.

The PDTF, amounting to P4.5 billion, is funded from the earnings of PAGCOR in addition to the appropriations by Congress.

According to the law, the President has the power to assign to any existing government department or agency the administration of the PDTF—based on the expertise, orientation or focus of the department or agency.

Jobless rate hits 5-month low but payrolls fall

WASHINGTON – The US unemployment rate surprisingly fell to a five-month low in January and factory payrolls grew for the first time since 2007, hinting at a labor market recovery even though the economy lost 20,000 jobs.

President Barack Obama cautiously welcomed the figures but said more needed to be done to put people back to work. Obama and his fellow Democrats fear voters could punish them in November congressional elections if headway is not made in tackling unemployment.

The decline in payrolls reported by the Labor Department on Friday was far smaller than the 150,000 drop posted in December. November's data from the survey of employers was revised sharply higher to a gain of 64,000, up from 4,000.

The jobless rate, based on a separate household survey, fell to 9.7 percent from 10 percent in December. That survey found employment rising, with the size of the labor force roughly flat. Analysts had expected payrolls to rise by 5,000 and the unemployment rate to edge up to 10.1 percent.

"The wheels of the economy are turning. The improvement in the employment data does match the increase in GDP the last two quarters so it's not a fluke. The economic recovery looks much more sustainable today," said Chris Rupkey, senior financial economist at Bank of Tokyo/Mitsubishi UFJ in New York, referring to economic growth data for the fourth quarter 2009.

Details of the report were relatively upbeat. The length of the average workweek hit its highest in a year and overtime paid in manufacturing was the most since September 2008, suggesting growing pressure to add to payrolls.

Some analysts, however, were skeptical of the drop in the jobless rate and believed it would head higher again. The pickup in factory employment helped to lift US stocks, despite lingering worries about European fiscal problems.

US government debt prices rose and the US dollar hit an 8-1/2 month high versus the euro, tapping flight-to-quality trades from the troubles in Europe.

Annual revisions to the payrolls data showed job losses since the recession began were much deeper than originally thought. The economy has lost 8.4 million jobs since the start of the recession in December 2007, compared to 7.2 million before the revisions.

In January, the number of 'discouraged job seekers' stood at 1.1 million, up from 734,000 a year ago. Last month, 6.3 million people had been out of work of more than 27 weeks.

Job politics

With Americans increasingly anxious about persistent high unemployment, Obama has declared that job creation will be his top priority in 2010. Announcing plans on Friday to expand credit for small businesses, Obama said the employment report was cause for hope but not celebration.

"Understanding that these numbers will continue to fluctuate for months to come, these are welcome, if modest signs of progress along the road to recovery," Obama said.

Financial markets have grown nervous about the prospect of unemployment in the United States remaining high for a long time. The economy resumed growth in the second half of 2009, but a labor market recovery has yet to materialize.

Labor market weakness is causing households to remain wary of taking on new debt, with total consumer credit declining by $1.73 billion in December, a Federal Reserve report showed.

While the US economy is growing, recovery hopes in Germany were dealt a set back by a sharp drop in industrial output in December.

A survey of banks that do business with the Fed predicted the US central bank will start raising interest rates in the fourth quarter of this year as the labor market mends.

Analysts expect US payrolls to start growing in February as the government steps up temporary hiring for the 2010 census.

"This hiring will continue to push the unemployment rate lower and then once the need for these workers is finished they will be fired and the unemployment rate will drift back up to the 10 percent area," said Brian Fabbri, chief North America economist at BNP Paribas in New York.

Last month, the services sector added 40,000 jobs after shedding 96,000 positions in December. The figure included a rise in federal government employment, partly a result of early hiring for the census.

In another positive trend, temporary help employment rose again last month, while manufacturing payrolls increased 11,000, the first gain since January 2007. Manufacturing employment had dropped 23,000 in December.

But the construction sector continued to struggle, losing 75,000 jobs, likely because of unusually cold weather. Construction payrolls fell 32,000 in December.

In another sign of labor market improvement, the average workweek unexpectedly edged up to 33.3 hours, the highest in a year, from 33.2 in December, while manufacturing overtime rose to 3.5 hours, the highest since September 2008.

"This suggests that firms are straining to keep up with rising demand without hiring. We believe that as long as orders keep streaming in, at some point soon firms are going to have to give in and add workers," said Stephen Stanley, chief economist at RBS in Stamford, Connecticut.

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.