Friday, September 7, 2012

Philippines's Business World

May 9, 2001, Business World, Patronage: the politician's way of life in the countryside, Patricia Adversario,
May 23, 2001, Business World, No bar to army offensive versus communist rebels
May 24, 2001, Business World, Mindanao election results seen to turn off investors Carmelito Q. Francisco,
May 25, 2001, Business World Graft, corruption major turnoff to investors, by Marites S. Villamor,
May 28, 2001 Business World, Former MNLF leader turns to farming profits, by Carmelito Q. Francisco,
May 29, 2001, Business World, Dos Palmas raid claimed by extremist Abu Sayyaf, by Ruffy Villanueva,
May 29, 2001, Business World, Countering raids' impact a priority for RP
June 14, 2001, Business World, Abu Sayyaf threats drive peso to lowest in 7 weeks,
June 14, 2001, Business World, Mindanao hostage drama hits debt market, by Leilani M. Gallardo,
June 15, 2001, Business World, US hostage still alive?, by Cecille S. Visto,
June 19, 2001, Business World, Gov't rethinks stance in peace talks with communists,
June 20, 2001, Business World, Abu Sayyaf operations costing AFP PhP8M weekly,
June 20, 2001, Business World, No cease-fire for communists,
June 26, 2001, Business World, N. Mindanao tourist arrivals down 33% in first quarter due to Abu,
June 28, 2001, Business World, AFP sees 'decisive battle' soon vs. Abu Sayyaf,

May 29, 2001, Business World, Countering raids' impact a priority for RP,

The Department of Trade and Industry (DTI) warned of the negative effects on the economy following two raids on upscale Philippine resorts. Armed men raided the Pearl Farm resort in Samal in southern Mindanao last Tuesday, killing two workers in what authorities said was a botched robbery attempt.

On Sunday, 20 people were abducted from the Dos Palmas resort in Puerto Princesa, Palawan, south of Metro Manila, in a raid claimed by the extremist Abu Sayyaf. These incidents will further heighten the negative perception foreigners and investors have of the country, Trade secretary Manuel A. Roxas II told a press conference. "Any bad news will be reflected on investor interest and confidence in the country," he said.

"If (investors) are monitoring the situation, definitely, they will be adapting a wait-and-see (attitude) or at least a review of what the government's response will be and how swiftly can the government carry out the response," he added. As part of damage control efforts, he said the DTI will closely coordinate with its provincial offices and foreign trade service corps to assuage safety concerns of businessmen, especially foreigners, he said.

"The events in Palawan will have a serious impact particularly on the tourism and investor sector. We have to be very aggressive in projecting our country as a safe place for people to visit as well as do business," Mr. Roxas said. The US Embassy has confirmed that several Americans were among those taken from Dos Palmas.

It urged Americans travelling in the Philippines to review security arrangements with their resorts and check with the Embassy on the latest security information. The American Chamber of Commerce, for its part, declined to comment on the matter. The Australian-New Zealand Chamber of Commerce said the kidnappings "send the worst possible message to a foreign country,"

Chamber president William F. Mason said "The government should be able to enforce the rule of law fast in the country. I would not say it is a major setback but it does not help the Philippines either." In Davao (southern Mindanao), Malaysian Consul General Mahalil Baharim said that although his government is concerned about two raids on tourist resorts, it is confident that the Philippines will be able to solve the problem.

"I think this will not affect the business between Malaysia and the Philippines," Mr. Baharim said after meeting with Presidential Assistant for Mindanao Jesus Dureza. New Zealand Ambassador Terry Baker, during a visit to Davao City over the weekend, lamented that Pearl Farm raid would take its toll on the tourism industry. The Japanese Consulate in Davao has issued an advisory asking its nationals to postpone visits to Samal Island until the situation normalizes.

May 29, 2001, Business World, Dos Palmas raid claimed by extremist Abu Sayyaf, by Ruffy Villanueva,

The extremist Abu Sayyaf yesterday claimed responsibility for Sunday's raid on the posh Dos Palmas diving resort in Puerto Princesa, Palawan (south of Metro Manila) where 20 persons were taken hostage. In a telephone interview with the Radio Mindanao network, Abu Sayyaf spokesman Abu Sabaya said his group is now in custody of the hostages, who have been divided into two groups. Mr. Sabaya claimed one group is being held in Sulu, western Mindanao while the other is in Basilan, central Mindanao.

"Aaminin ko na kami ang kumuha ... ang masasabi ko, divided na yung mga hostages (I admit that we took them ... I can tell you that they have been split up)," Mr. Sabaya said. He said the Abu Sayyaf's Basilan faction, led by Khadaffy Janjalani, is holding 10 hostages: Francis Guanzon, Teresa Guanzon, Martin Burnham, Gracia Burnham, Guillermo Sobero, Raul Recio, RJ Recio, Divine Montealegre, Angie Montealegre, and Maria Fe Rosadeno.

Meanwhile, the Abu Sayyaf faction based in Sulu, led by commander Mujib Susukan, is holding the remaining half which includes Reghis Romero, Maria Riza Santos, Letty Jao, Kimberly Jao, Luis Bautista, Lalaine Chua and Janice Go; and resort workers Sony Dacquero, Armando Bayona and Eldren Morales.

Asked if they will open negotiations with the government, Mr. Sabaya said "I do not want to comment pero mag-uusap muna kami ... Bahala na sila kung ano ang gusto namin. Alam nila kung ano ang daing namin (we will discuss this ... the government knows what we want)." During negotiations with the previous government over the release of hostages taken from the Malaysian island of Sipadan, the Abu Sayyaf said they wanted a separate and independent Islamic state in Mindanao.

The group also demanded the release of three Muslim terrorists now jailed in the United States for the bombing of the World Trade Center in New York. In the telephone interview, Mr. Sabaya let American hostage Martin Burnham and Filipino Raul Recio give brief statements. "Hello my name is Martin Burnham. I am a U.S. citizen, I am a missionary with the Tribes Mission in the Philippines for the past 15 years. I, along with my wife Gracia, are in custody of the Abu Sayyaf, Khadaffy Janjalani group. We are safe, our needs are being met and we would like to appeal to all authorities for reasonable and speedy negotiations," the American hostage said.

Mr. Recio, meanwhile, said "Ako po si Raul Recio, editor ng Travel Update Philippines. Nasa mabubuting kamay kami ... mababait naman po sila (I am Raul Recio, an editor of Travel Update Philippines. We are in good hands ... they are kind to us)." The Armed Forces of the Philippines (AFP) said it is still verifying the location of the hostages.

AFP spokesman Brigadier General Edilberto P. Adan said Abu Sayyaf's claim that the hostages are in Basilan and Sulu may actually be a diversionary tactic. "They (the Abu Sayyaf) have a satellite phone so they could call anywhere ... We still believe that the bulk of the hostages is still in Palawan," Mr. Adan said.

Given the government's no-negotiation policy, he said a military offensive will be launched once the hostages are located. "There will be no negotiations. Once we fix the location, we will cordon (off) the area and launch the attack but with the safety of the hostages in consideration," he said.

Mr. Adan noted that two Marine companies, or about 200 troops, are now on standby along with a company-sized counter-terrorist force. "We are searching the Palawan waters and the Sulu seas. And this is quite a big area--we are talking of the size of Luzon as our area of search where we are looking for a small boat," Mr. Adan said.

Initial investigation showed that two hours before the 5:30 a.m. raid, the armed group snatched two local fishermen whom they forced to serve as guides. The two fishermen were later released. At least 10 Navy ships from the AFP's Western and Southern Commands have been deployed. Four aircraft, including helicopters, were also dispatched.

May 28, 2001 Business World, Former MNLF leader turns to farming profits, by Carmelito Q. Francisco,

APLAYA, Hagonoy, Davao del Sur -- Every morning for nearly two weeks now, Alvin Baharim wakes up before six, takes a cup of coffee and heads for the 2,500-square meter farm about 200 meters away from his home. At the farm lot, the 46-year-old Baharim joins 24 farmers from his community to listen to the lecturer from the provincial agriculturist office, who trains them how to become integrated pest management farmers.

For Mr. Baharim, this is a new life. A native of Jolo, Sulu, Mr. Baharim joined the Moro National Liberation Front (MNLF) about 23 years ago and spent half of his life in the revolutionary movement. He was part of several battles, although he does not want to discuss these since these are parts of his dark past.

In one story, he and several others rebels took refuge in this small community of Muslim Kalagans, Christians and Lumads (native tribes). He met his wife here. The community was the landing point of MNLF units at the height of the more two decade-old armed struggle. When the MNLF signed a peace agreement with the government on Sept. 2, 1996, Mr. Baharim abandoned his gun and started tilling the lot near his house near the community school.

The agreement with the MNLF paved the way for assistance from international donors, which was facilitated by a joint project with the following agency participants: Southern Philippines Council for Peace and Development (SPCPD), National Economic and Development Authority (NEDA) and United Nations Multi-Donor Program (UNMDP).

The program is supported by funds from 10 countries, all of them capable of extending help to underdeveloped economies like the Philippines. These countries are Australia, Belgium, Canada, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland and Turkey.

Through the program, Mr. Baharim and other members of his community created the Aplaya Hagonoy Muslim-Christian-Highlander Multipurpose Cooperative, which was registered with the Cooperative Development Authority on June 10, 1997. "The cooperative performs the vital role in the community's efforts to mobilize its own resources and work with external assistance agencies and institutions towards the building of a model MNLF peace and development community in the area. At present, the cooperative has started three projects, all in the agribusiness sector," Mr. Baharim said.

Among the projects is IPM farming. Under the project, the provincial government shelled out about 40,000 Philippine pesos (US$792.88 at PhP50.449=$1), another PhP28,000 from the municipal government and PhP5,000 from the United Nations Development Program with the money coming mainly from the New Zealand government.

The other projects are mudcrab culture under mangrove areas and bee keeping also in mangrove areas which is aimed at increasing plant population through cross pollination. The projects were established with the help of technocrats from the SPCPD-NEDA-UNMDP, which is based in Gen. Santos City, about 100 kilometers away.

Last May 3, community leaders were surprised when Mary Oliver, New Zealand Minister for Foreign Affairs and Trade, paid them a visit. The projects have elicited interest from the New Zealand government that it eventually sent its ambassador to Manila, Terry Baker, who was just in the capital for just over two weeks.

Mr. Baker and his wife, Jane, visited the project on May 25. Mr. Baker, whose only escorts were officials of the SPCPD-NEDA-UNMDP, said he decided to visit Aplaya to meet "real people" and to see for himself the community's projects.

"One of my important functions is to get out and meet real people," he told BusinessWorld after he delivered a speech before the crowded madrasah (Arabic school) of the community,, where the people assembled to wait for his arrival. He said his government wants to extend more grants to communities like Aplaya as "it is the next generation that we are working for."

Mr. Baker said his country is determined to give more help to Aplaya and other similar communities in Mindanao, whose people were victims of crisis brought about by decades of armed struggle between rebel forces and the government.

"We will continue to support your program. And I hope you will move on," Mr. Baker told the members of the community in his five-minute talk. Unassuming as he is, he and his wife walked, together with leaders of the community to where the projects were located, asking questions along the way. Some of the people in the community were even puzzled when he talked about how corn is planted in his native New Zealand.

What took place that Friday elated Mr. Baharim and the other people in the community no end as he posed outside the Arabic school to guard it from possible intruders. Armed with a disarming smile, he said, in his native tongue, "I hope my children will finally savor our dream for peace. I know that there are so many Terry Bakers out there who are willing to walk under the blazing sun and extend their hands to poor people like me."

May 25, 2001, Business World, Graft, corruption major turnoff to investors, by Marites S. Villamor,

CEBU CITY -- A report by the National Economic and Development Authority (NEDA) Central Visayas office listed corruption in government as a bigger risk to investors than economic instability. "Even the mere perception that graft and corrupt practices are going on discourages investors," the report stated.

If government is serious in promoting the country as an investment haven, the NEDA 7 report said there should be more vigilance among the public against graft and corruption. Quoting Trade Secretary Manuel A. Roxas II, the NEDA 7 report said "good governance is now one of the most important factors in attracting foreign investments." Other major factors considered by investors in decision-making are inflation and political stability, the report added. A stable peace and order situation is also an important factor in decision-making. But as it is, some Japanese investors are set to visit Cebu here next month to explore opportunities especially in the information and communications technology (ICT) sector. Last March, a Japanese investment mission that visited Cebu called city officials' attention to the perceived security risks to Japanese expatriates in Cebu.

The investment mission visited Cebu two weeks after a convoy of Japanese engineers was ambushed by unidentified armed men. Although no one was hurt during the ambush, the Japanese engineers were shaken and initially refused to report back to work at the Cebu South Coastal Highway project.

The NEDA 7 report other "areas requiring attention" are: rising unemployment and declining competitiveness of skilled workers; capacity of the air and shipping industries to meet global challenges; need for support for the local ICT sector; possibility that exports will further be dragged down by the economic slowdown in Japan and the United States; minimal increase in tourist arrivals; and recurrence of the El Niño weather phenomenon which could stand in the way of increased agricultural productivity.

May 24, 2001, Business World, Mindanao election results seen to turn off investors by Carmelito Q. Francisco,

DAVAO CITY -- The results of the Mindanao elections may turn off investors because of the apparent failure of the Macapagal-Arroyo administration to get a vote of confidence from the masses, a political analyst said yesterday.

Lawyer Rene Villarente, spokesperson of the National Citizens' Movement for Free Elections, said the election results in Mindanao could be interpreted as the failure of the Arroyo administration to pass the confidence test. "The crucial people support is not there yet," Mr. Villarente said. The government needs the support of the people as reflected in the results of the elections to attract investors and to make them realize that the government is stable, he said.

The opposition Puwersa ng Masa (PnM) ruled the senatorial race in many parts of Mindanao, with at least eight of its candidates winning. In Davao City, only reelectionist senators Juan Flavier, Sergio Osmeña III, Ramon Magsaysay, Jr. and new candidate Francis Pangilinan managed to break into the winning circle.

The race was still dominated by independent candidate Noli de Castro with PnM candidates like former police director general Panfilo Lacson, former first lady Luisa Ejercito, former agriculture secretary Edgardo Angara, former press secretary Ricardo Puno, re-electionist senators Miriam Santiago and Juan Ponce Enrile.

The results, Mr. Villarente said, only signal that the "strong confidence of the people in the administration is not there." But Department of Tourism assistant regional director Roger Layson said results of the elections will spur economic activities in the region.

Mr. Layson said that since the elections in Southern Mindanao were viewed as successful, investors would come in and assess the situation. Mr. Layson said investors are expected to flock into the region and look for possible investment opportunities. This usually happens, he said, if the elections are credible. "The post-election period usually ushers in political stability and is good for business because the atmosphere it brings is conducive to investors," Mr. Layson said.

May 23, 2001, Business World, No bar to army offensive versus communist rebels

Possible military offensives against communist rebels will not derail the government's peace negotiations with the National Democratic Front-Communist Party of the Philippines-New People's Army (NDF-CPP-NPA), chief government negotiator and former Justice secretary Silvestre Bello III yesterday said.

In a telephone interview, Mr. Bello said that while such moves would likely antagonize the rebel negotiators, no formal agreements will be breached. Mr. Bello said there is no agreement on cessation of hostilities between the government and the NDF-CPP-NPA.

"That's up to the secretary of National Defense (if he orders an offensive against the rebels). You know for a fact that there's no peace pact ... (and) it has been very clear between the government and the NDF that since there is no ceasefire, the peace talks will go on despite hostilities," Mr. Bello said.

Defense secretary Angelo T. Reyes has said the military is planning to redeploy troops to NPA-infested areas, apparently in preparation for offensives after the elections. Mr. Reyes said there are orders from President Gloria Macapagal-Arroyo to "institute measures" to make the rebels answer for a spate of attacks during the election period.

To recall, the NPA's Melito Glor Command based in the Laguna-Quezon (southern Luzon) area owned to several high-profile killings during the election period, including that of Quezon representative Marcial Punzalan and Batangas gubernatorial candidate Cesar Platon.

In the interview, Mr. Bello also said NDF chief negotiator Luis Jalandoni asked for more time to decide on the government's request for a moratorium on violent activities. Mr. Bello said he spoke with his counterpart on Monday to bring up the issue but the latter asked for 24 hours for him to "validate" reports on the NPA's involvement in poll violence.

May 9, 2001, Business World, Patronage: the politician's way of life in the countryside, by Patricia Adversario,

A stream of about a hundred people visits Camarines Sur (southern Luzon) governor Luis R. Villafuerte every day at his house in Naga City. They've been coming here, some to his office at the provincial capitol in Cadlan, Pili, for the last six years to ask for various favors. In typical fashion, the governor dispenses. It could be tuition or transport money or payment for hospital bills for somebody's sixth pregnancy. Sometimes, he first gives a scolding -- but in the end, he gives. Patronage politics? He scoffs at his critics and declares: "Patronage politics is the reality of local politics. If you help people, they will be forever grateful."


Such is the main reason why, to this day, the governor claims to have no opponent who he thinks is worthy enough to challenge him. Singer and actress Nora V. Aunor, who's entering politics for the first time, is running against him under the People Power Coalition (PPC). But he dismisses the singer as an "insult" not only to him, but also to Camarines Sur. "There's been no real debate on issues," he said in an interview.

Ms. Aunor also has been an erratic campaigner. Early last month, she lost political points when she failed to show up at a major political forum for candidates in Naga City. "I pity Nora because I think she's being used by her sponsors Raul Roco, Rolando Andaya, Jr. and Arnulfo Fuentebella. Why don't they run against me instead?" he said.

While Mr. Villafuerte's political opponents claim to have some influence in their respective districts, none of them could boast a province-wide organization like he does. Former president Fidel V. Ramos's Lakas-National Union of Christian Democrats-United Muslim Democrats of the Philippines (Lakas) claims to have a significant presence in the 1st district; Aksyon Demokratiko (Democratic Action) in the 2nd district; Nationalist People's Coalition in the 3rd district; and Liberal Party in the 4th district. "They may be entrenched in their respective districts, but not in the entire province," claimed Mr. Villafuerte. "On their own, they cannot compare with us because in all four districts, we have candidates." Neither does Mr. Villafuerte think that the Rocos pose a political threat to him. He said Aksyon Demokratiko, which claims to be a national party, does not have candidates in all the towns in Camarines Sur. The governor claims to have an organization in all the 3,000 precincts in the 35 towns and cities of the province. "Out of 1,056 barangays in Camarines Sur, I've gone to 1,009. I have people in all 1,056 barangays," he declared.


You call that traditional politics? "That is the modern system of doing things. How can you run for anything without an organization? That is a basic management requirement. Second, we have a complete program of government with 24 areas of concern."

Apart from political organization, the governor also has the provincial funds at his disposal to implement his various projects. He said he has spent some 400 million Philippine pesos (US$7.924 million at PhP50.477=$1) for various projects since he started his campaign last year. These projects include providing electricity to remote barangays and giving away free television sets.

For the big barangays, he donates a 51" TV which costs him about PhP135,000 each. Several computers in one of the buildings in the sprawling grounds of the provincial capitol in Pili records and monitors these projects. As he puts it "people's memories are short." He has been making his presence felt in Naga City, with a number of high-profile infrastructure projects.

As an independent city, Naga residents do not vote for the province's governor. But Mr. Villafuerte's eldest son, Mariano III, is running for congressman in the province's 2nd District. Also running is Sulpicio Roco, incumbent mayor of Naga City and younger brother of Education Secretary Raul Roco. Mayor Roco's campaign manager is Jesse Robredo (Lakas), who's running for mayor of Naga City for a fourth term. Mr Robredo won a Ramon Magsaysay award for local governance last year.

"You have to put in context what you mean by traditional politicians," said Mr. Villafuerte. "If you mean those who have been in active political contention -- from my father and now, with my children -- in that sense, we belong to that traditional pattern." Mr. Villafuerte's father, Mariano, began his political career as an assemblyman in the 1930s. He also became the province's governor in the 1930s until World War II struck. One of Mariano's sons, Mariano, Jr., served as Naga City vice-mayor. And now the governor's son, Mariano III, is making a second bid for congressman. Mariano III ran, but lost in 1998.

The governor was in the investment banking business and served as senior executive vice-president of the holding firm of the defunct Bancom Development Corp. before he entered politics. His political career began in 1978 when he was asked by former president Ferdinand Marcos to serve in the Interim Batasang Pambansa (National Legislature). From 1979 to 1982, he also served the Marcos regime as Trade and Industry secretary.

In 1983, he joined the opposition against Mr. Marcos. During the 1986 snap election, he campaigned for then presidential candidate Corazon Aquino. He was elected governor of Camarines Sur in 1988. In 1992, he ran again, but lost. But in 1995 and 1998, he won and served as the province's governor for two consecutive terms. He is now running for his third and final term as governor.


Mr. Villafuerte said he "vehemently" objects to being characterized as some kind of trapo (Tagalog word for "rag" and now an abbreviation of the derogatory term, "traditional politician") -- with all its negative implications. "I'm a technocrat -- not a trapo. If you look at our programs and the things we have been doing and would like to continue to do, we have been the ones who introduced the innovations and creative approaches to local governance," he stressed.

Messrs. Roco and Robredo, who represent what they call non-traditional politics, think otherwise. In traditional politics, one measure of performance is the development of infrastructure. "For us, it's not only infrastructure. You also need to develop institutions like sectoral organizations," said Mr. Robredo in an interview. Under his and Mr. Roco's terms, empowerment of the people was institutionalized through an ordinance that created the Naga City People's Council (NCPC). The council is presently composed of some 40 non-government organizations and people's organization based in Naga. The people's council is represented in all the committees of the city government where they could participate in discussions and cast their vote.

"I could call myself a traditional politician in the sense that I could use these organized groups for our group's political purpose. But I'm not being traditional when I include these groups in consultations in a formal and structured way," said Mr. Robredo. Consultations also play a key role in the way Mayor Roco, a socio anthropologist by training, operates. "For our kind of politics, we can go directly to the people and they can go directly to us...Without participatory politics, you get a distorted picture of the problem. So, you come up with a distorted solution," he said.

Efforts to replicate this participative form of governance are being espoused by neophyte politicians elsewhere. In Camaligan, an agricultural town two kilometers from Naga, Dominador Aguilar, who's running for mayor under the Lakas banner, is proposing to form a citizen's monitoring board to monitor the activities of the local government. But that may see light only if he wins. The town's incumbent mayor is backed by Mr. Villafuerte's political machinery.


To present an alternative to the status quo, resources are crucial. "Politics is the preserve of those with money," said Mr. Robredo. "There are good and qualified candidates, but they don't have the opportunity to win because they don't have the resources or support from a constituency."

Within Naga, however, one does not have to spend a lot to win. Naga City may yet be the only nurturing ground for presenting an alternative. "Naga could be a model, although it is not a perfect one. Vote-buying does not work here. People here understand they need to choose good leaders because it will benefit them in the long run," said Mr. Robredo.

But outside Naga, the traditional way of winning still dominates, he said. In order to win, a candidate needs to have a name; and second, he needs to spend. In the battle for name recall, the PPC is banking on Ms. Aunor.


And being associated with a traditional political name like Villafuerte still helps. Mr. Robredo knows this only too well. He is a nephew of Villafuerte and was endorsed by the latter when he first ran for office in 1988. The nephew and uncle parted ways a year later because the former refused to accommodate the latter's alleged jueteng (illegal numbers game) interests in the city.

Mr. Robredo said he would need at least PhP30 million to PhP35 million if he were to run for governor. "If I had that money, I'd rather save it for my children. For me, my biggest investment has been time. I don't have the money, so I compensate by giving my time, " he said.

Consider the realities in the field, he said. " I can go to a barangay and explain what will I do, but who will maintain my organization at the field level? A good politician knows that he should have a minimum organization at the barangay level so he can benefit from his track record. The sum of his vote is those who believe in him and his organization. And many will believe in him if he has the organization. They're the ones who'd put in a good word for him, campaign for him, argue for him and guard his votes," he said.

Given this reality, the people may just vote for Mr. Villafuerte as governor again. But it may just be hollow victory. Residents here said their choices of candidates for governor are "pathetic" and even more so, the reasons behind their choice. As a volunteer for the Parish Pastoral Council for Responsible Voting who asked not to be named said: "It's a choice between pity or fear. People will either choose Nora because they pity her, or they'd choose Villafuerte because they're afraid of what he'd do to them if they don't vote him," the volunteer said.

June 14, 2001, Business World, Abu Sayyaf threats drive peso to lowest in 7 weeks,

The unfolding violence and drama in Southern Mindanao, top-billed by a cast of Abu Sayyaf bandits, continued to cloud sentiments at the local currencies market yesterday. Banks pushed the peso to its lowest in seven weeks against the US dollar following news reports that the Abu Sayyaf had beheaded one of its American hostages last Tuesday.

At the Philippine Dealing System, the country's electronic currencies exchange, the peso touched an intraday low of PhP51.25 to the dollar, its lowest level since May 2. The military, however, denied the rebel group's claim after it discovered that the headless body found near the group's camp belonged to a Filipino, and not to a foreigner.

Currency traders polled by BusinessWorld said the Mindanao saga will continue to drag down the peso against the dollar in the near term. Most expect the peso to test its next psychological resistance level of PhP50.60 to the greenback. The peso last touched this level on May 2, a day after supporters of deposed President Joseph Estrada stormed Malacañang in an attempt to stage a power grab from the current administration.

"At this level, the peso is doing well already, considering the weak regionals and the domestic uncertainty. It could be worse given the problems that we have," a treasurer at universal bank in Manila said. Aside from the uncertainty caused by the kidnapping incidents, International Exchange Bank executive vice-president Antonio Moncupa said banks are also beefing up their long dollar positions in preparation for the expected surge in demand next quarter when the import season starts.

"I don't think it is just the Abu Sayyaf. Aside from that, there is also the cyclical expectation for imports during the third quarter," he said. Mr. Moncupa said with the peso falling against the dollar within a short period, the local unit will most likely stay within its current levels at the moment. "We will not see a lot of movement for now," he said. The local unit yesterday averaged PhP51.326 to the dollar, down by 24 centavos from last Monday's PhP51.079. It closed 12 centavos weaker at PhP51.31 from PhP51.19 the previous trading day. Volume trading at the PDS surged to $190.95 million from $181 million last Monday due to some dollar inflows coming from exporters taking profits by selling greenbacks at higher levels. Traders see the peso trading within PhP51.20 to PhP50.50 in the next two days of trade, with the sentiments still driven largely by news about the Abu Sayyaf kidnapping. -- Leilani M. Gallardo

June 14, 2001, Business World, Mindanao hostage drama hits debt market, by Leilani M. Gallardo,

Investors' jitters concerning the fate of the hostages held by the Abu Sayyaf Muslim extremist group spilled into the local debt market as banks pushed up the rates of the two-year Treasury bond in yesterday's auction. At yesterday's sale, the Bureau of the Treasury accepted a higher average yield of 12.505% for the re-issuance of two-year T-bonds as against 13.312% the bonds fetched in last week's sale.

National Treasurer Sergio G. Edeza attributed the slight uptick in the rate to the continuing investor uncertainty caused by the hostage crisis in Mindanao. The rebel group Abu Sayyaf on Tuesday claimed it had beheaded one of its American hostages after the government said it would not negotiate with the hostage-takers. Military officials later belittled the claim after finding out that headless bodies found in the area near the Abu Sayyaf camp were of Filipinos and not foreigners.

Mr. Edeza said the rise in rates yesterday was "just temporary" and will ease once jitters on the peace and order situation subsides. "I think the market will be normal. We should see some easing on the pressure on interest rates. We hope that the conditions prevailing at this time will be corrected and there will be resolution to what has happened," he said.

Bond dealers also said that with rates of government securities now at low levels, most banks have opted to park their excess liquidity in the currency- related investment vehicles such as dollar-peso swaps instead of government debt papers.

This was reflected in the weak demand for the two-year T-bonds at yesterday's auction with total bids amounting only 2.5 billion Philippine pesos (PhP) out of the PhP2-billion (US$48.708 million out of $38.967 million at PhP51.326=$1) government's scheduled borrowing for the day. The auction committee made a full award for all the bids. "With the volatility in the exchange rate and the swap points going up, banks are not that inclined to buy the two-year T-bonds. That's why you see fewer tenders and higher rates," one dealer at a universal bank said. Another treasurer at a local bank, however, said the uptick in rates is seen as temporary due to expectations of a continued drop in US overnight rates and the central bank's pronouncements it will cut local overnight rates given a favorable inflation scenario.

"Long-term interest rates should not be affected with an event that will last for one-week or two weeks. The long-term outlook will be influenced more by other fundamental factors such as the cash flow of government, inflow of investments and not so much by short-term events," he said.

June 15, 2001, Business World, US hostage still alive?, by Cecille S. Visto,

Malacañang yesterday heaved a sigh of relief as it said Abu Sayyaf spokesperson Abu Sabaya had announced he was merely bluffing when he said that the bandits had executed American hostage Guillermo Sobero, one of three American tourists kidnapped from the Dos Palmas Resort in Palawan, northern Philippines, on May 27.

Presidential Spokesperson Rigoberto D. Tiglao said the Palace is "glad" Mr.Sobero was not murdered, but said Mr. Sabaya's latest statement only underlines how "crazed and depraved this criminal is." "We are hoping that Mr. Sobero is alive as he said but you cannot trust this man. He's been psychologically torturing his victims and their families ... If he thinks he can fool the government but doing such thing, he's very much mistaken," Mr. Tiglao said.

Mr. Sabaya, in an interview with Radio Mindanao Network yesterday morning, said the Muslim extremist group has to "maintain" Mr. Sobero. "If we release him, the military will know where we are. So that's what we can say. It's not true (that we killed him)," he said. Mr. Tiglao said "We're not taking his words seriously but we're noting them down. We are really very puzzled by this announcement."

As this developed, Reuters quoted local officials as saying the bandits would free some hostages yesterday but as dusk fell there was no sign of any release. It said there was no confirmed word on the fate Mr. Sobero, while a man claiming to be a Muslim religious leader seized by the rebels told a radio station he had been informed by his captors that an American had been killed.

Defence Secretary Angelo Reyes told reporters in Isabela, the capital of southern Basilan, that authorities had unconfirmed reports some hostages would be released. Reuters made no mention of Mr. Sabaya's denying that Mr. Sobero had been killed, saying the bandit had called a local radio station to deny a military claim that the rebels had beheaded local Muslim religious leader Muhaimin Latip, who had gone to the rebel lair to negotiate. Mr. Latip, allowed to talk to the station, said "They have killed one American ... I did not see anything but that is what they said." Malacañang also said the bandits are getting "more desperate for money."

American television network, Cable News Network (CNN), yesterday reported that the Abu Sayyaf had offered a video of the beheading for $20,000 or roughly 1 million Philippine pesos. It did not specify who was executed in the footage it was offering to sell. Mr. Tiglao said the Palace had confirmed both the report that came out in CNN's website and the network's rejection of the offer.

He added the Philippine National Police (PNP), which conducted the autopsy, confirmed that the headless torso found in Tipo-Tipo, Basilan was Ustadz Buhaymin Saji's. As this developed, Mr. Tiglao said President Gloria Macapagal-Arroyo plans to go to Zamboanga and Palawan next week to inspect the damage caused by the bandit group and possibly visit the relatives of the soldiers and civilians killed during the encounters.

She is also expected to hold a command conference in Zamboanga with military officials overseeing the operations. The meeting will be attended by Defense Secretary Angelo T. Reyes and Interior and Local Government Secretary Jose Lina, Jr., sent to Mindanao on Wednesday to coordinate military and civilian efforts against the Abu Sayyaf there.

As this developed, the Armed Forces of the Philippines (AFP) said it had foiled an Abu Sayyaf attack on the Lantawan municipal hall in Basilan on Wednesday in what the military described as another diversionary ploy by bandit group. In a press conference, AFP spokesman Brigadier General Edilberto P. Adan said a group of about 15 to 20 Abu Sayyaf rebels raided the municipal hall around noon but armed civilian volunteers stationed near the area successfully repulsed the attack. "There was another attempt to attack the Lantawan municipal hall (the other day) but the group was repulsed by our civilian volunteers there," Mr. Adan said. -- with reports from R. L. Villanueva and Reuters

June 19, 2001, Business World, Gov't rethinks stance in peace talks with communists,

The government will be reassessing its position in the peace talks with the National Democratic Front (NDF) following the unilateral declaration of an indefinite recess in protest over the killing of Cagayan Rep. Rodolfo Aguinaldo last week.

Government panel chairman and former Justice Secretary Silvestre Bello III yesterday said the government team will be consulting with the Cabinet Cluster E on national security on how it will proceed with the peace negotiations.

"Kailangan ng kaunting pagkakataon (what is needed is a little time) for both panels to reassess their position and at the same time, in the case of the Philippine panel, for us to be able to consult our constituency," he said in a radio interview.

Formal negotiations between the government and the NDF ended last week as the government panel announced a recess to protest the NDF's justification of the killing. The New People's Army, the NDF's military wing, had claimed responsibility for the June 12 murder, saying Mr. Aguinaldo was killed due to numerous human rights violations.

For his part, presidential adviser on the peace process Eduardo Ermita yesterday said the government panel will also be gauging the sentiments of the people on the peace talks. "Gusto rin nilang malaman ang sentimyento dito sa Pilipinas... Hindi naman magandang tingnan na samantalang may peace talks ay patuloy naman ang mga high-profile na pagpapaslang (they also want to find out the sentiments of the people in the Philippines ... It is not good to have peace talks while high-profile killings continue)," Mr. Ermita said in a separate radio interview.

Mr. Bello said the government condemns all acts of violence committed by the NDF and the NPA. "This is no longer in keeping with our mutual commitment that during the peace negotiations, there should be confidence and goodwill measures to strengthen trust on both sides," he said. Mr. Bello suggested there should be a cease-fire between the government and the NDF during the peace talks. The proposed cease-fire can be discussed during the next round of talks, which may resume in August.

"Kung hindi sila papayag ng cease-fire na matagal, pwede sigurong mapagusapan namin ito sa formal peace talks. Para ganoon, di mangyari ang mga ganyang insidente (if they don't want a long cease-fire, we should talk about this during the formal peace talks so there will be no more incidents)," he said.

June 20, 2001, Business World, Abu Sayyaf operations costing AFP PhP8M weekly,

The Armed Forces of the Philippines (AFP) is spending at least 8 million Philippine pesos (US$153,016.334 at PhP52.282=$1) a week in its rescue and offensive operations against the Abu Sayyaf in Basilan, western Mindanao.

"For combat operations, we normally spend a conservative PhP1 million ($19,127.041) per one battalion on a weekly basis," an AFP official who requested anonymity said.

Presently, six Philippine Army battalions and an additional two Marines battalions are conducting operations against the Abu Sayyaf in Basilan.

According to the official, the amount covers food, ammunition, fuel requirements by ground troops and is exclusive of the cost of air and naval support.

The source said for a full battalion composed of 600 men, the military spends about PhP250,000 ($4,781.760) to meet food requirement per week.

For a 15-minute encounter, a trooper carrying an M-16 rifle consumes about 360 rounds, each one costing PhP10.

A regular personnel carrier truck usually used to move troops on the field, meanwhile, consumes about 300 liters of fuel per day.

During last year's all-out government offensive against the Moro Islamic Liberation Front, former Defense secretary Orlando S. Mercado said that the military spent more than PhP1.3 billion during the duration of the assault from January to July.

June 20, 2001, Business World, No cease-fire for communists,

Malacañang has rejected calls for a cease-fire between the government and the National Democratic Front (NDF), as peace negotiations are on indefinite recess. President Gloria Macapagal-Arroyo yesterday said she is not in favor of a cessation of military operations against the NDF's military arm, the New People's Army (NPA).

Executive Secretary Roberto Romulo said the President's stance on the cease-fire is not likely to soften. "That has been her position ever since. From the beginning and up to now," he told reporters.

Yesterday, however, government panel chairman and former Justice secretary Silvestre Bello III said they will seek approval of a cease-fire so as to create an atmosphere conducive to peace negotiations.

"The position of the government panel is for us to have a temporary cease-fire during the conduct of the peace talks," Mr. Bello said.

He said the government panel is expected to meet with Ms. Macapagal-Arroyo this week to discuss several issues, including the strengthening of the government's position on the socioeconomic reforms agenda.

Mr. Bello also said his group will seek the President's approval on the conduct of public consultations on the government panel's positions.

The government and the NDF peace panels were finishing discussions on issues within the socioeconomic agenda in Oslo when talks were temporarily halted last June 13.

The talks were halted after the government panel pushed for a recess in protest of the NDF's armed wing's continued conduct of political assassinations.

Both panels have agreed to resume negotiations on mid-August in Oslo following the conduct of national elections in Norway.

There have been calls for a cease-fire between the military and the NPA following the recent string of killings of local politicians. The NPA has claimed responsibility for the killing of Quezon Rep. Marcial Punzalan, Jr., Cagayan Rep. Rodolfo Aguinaldo and Tanauan mayor Cesar Platon.

In a press briefing, Ms. Macapagal-Arroyo said a recent report naming NDF chairman Jose Ma. Sison as the mastermind of the Plaza Miranda bombing should not affect the peace negotiations. This accusation was raised by former Senator President Jovito Salonga.

"I think the chair of the (government negotiating) panel (Silvestre Bello III) has already said that it (the Plaza Miranda bombing) doesn't affect the peace talks because there are no preconditions. (Justice Secretary Hernando) Perez also said that and the other lawyers said that the prescription period has already ended," she said.

Mr. Perez said Mr. Sison can no longer be charged for the Plaza Miranda bombing since the period of prescription of 20 years has already expired.

"It has been more than 30 years, and the prescriptive period is only 20 years. Second, Mr. Sison has already been charged and he has been acquitted before. And therefore the principle of double jeopardy will set in. He could not be charged again at the same time," he said.

Ms. Macapagal-Arroyo sad there are many factors which may affect the peace talks.

"Its not only the charge of Mr. Salonga that will affect the future course of the peace talks, so there are many things that will have to be reported by the panel through the appropriate Cabinet cluster," she said.

June 26, 2001, Business World, N. Mindanao tourist arrivals down 33% in first quarter due to Abu kidnappings,

CAGAYAN DE ORO CITY (Northern Mindanao) -- The number of Northern Mindanao visitors has dropped 33% during the first three months of the year due to the the Abu Sayyaf kidnapping incidents, the regional director of the Department of Tourism, said.

But the head of the local business chamber said it is "business as usual" in this city despite the Abu Sayyaf menace. Jose M. Belen, president of the Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc., said the negative image of Mindanao caused by the Abu Sayyaf has failed to dampen the business climate in Northern Mindanao.

Although he concedes beach resort operations have been adversely affected by the downtrend in the tourism industry, national organizations that have scheduled conferences in Cagayan de Oro have not asked for cancellations. "In general, our economy here is still holding on," Mr. Belen said.

But Tourism regional director Dorothy Jean Pabayo said domestic and foreign tourist arrivals in Northern Mindanao have declined by 33% compared with the first quarter last year. The police and the military are marshaling their resources to protect the visitors. The Philippine National Police has deployed additional personnel to secure popular tourist spots in the region.

"I sent two teams and the police regional mobile group as a deterrent to see to it nothing like what has happened in other parts of Mindanao will happen here," said Chief Supt. Rodolfo Caisip, PNP regional director. Military forces are also conducting surveys to ensure the security of all resorts situated within its areas of responsibility.

"Our surveys will tell us how we can help the owners secure their respective resorts," said Brig. Gen. Alfonso Dagudag, commanding general of the Philippine Army's 4th Infantry Division stationed at Camp Evangelista in barangay Patag. The 6,000-strong 4th infantry division is the biggest military unit in Mindanao and is responsible for the internal security of Northern Mindanao and the Caraga region, as well as the two Lanao provinces in Central Mindanao. "Don't get us wrong that we're going to physically place troops in all these resorts," Gen. Dagudag said. "Certainly, that's not going to be healthy for our tourism industry here."

Ms. Pabayo said her office has drawn up a security plan that hotel and resort operators in the region can readily adopt to secure their establishments. Among the measures recommended under the plan are:

* the deployment of security guards at strategically located lookout points to detect incoming seacraft;

* installation of floodlights facing the sea and alarm systems for emergencies;

* provision of communication facilities for security personnel; and

* training of staff personnel in detecting suspicious characters and coordinating appropriate responses for any contingencies with police and military forces within the immediate vicinity.

June 28, 2001, Business World, AFP sees 'decisive battle' soon vs. Abu Sayyaf,

At least four Abu Sayyaf bandits were killed while six others were wounded as government troops on search and rescue mission closed in on a band holding hostages the other day, the Armed Forces of the Philippines (AFP) yesterday said.

In a press conference, AFP spokesman Brigadier General Edilberto P. Adan said the rebel casualties were part of the main group holding 23 remaining hostages and that one government soldier was also wounded. He said a fire-fight started at around 5:00 p.m. at Sitio Fuente Egas, Brgy. Masola in Isabela City, Basilan, western Mindanao. Running gunbattles lasted for about four hours until 9:00 p.m., he said.

"We estimate that this is the main group of about 40 to 50 bandits, but they are not bunched together. We believe that some are trying to extricate the hostages out of the area of encounter ... No hostages were seen but we believe they are just within the vicinity," Mr. Adan said. Mr. Adan also said that following recent developments in the military's pursuit and rescue operations, a "decisive battle" is expected in a matter of days.

"We're doing fine. In a few days, we're hoping for a decisive battle," Mr. Adan said when asked to assess the military's month-long operation. As this developed, a suspected Abu Sayyaf rebel was wounded after being shot at by still unidentified armed men believed to be members of a vigilante group in Brgy. Mabaracat in Isabela City around 11 a.m. on Wednesday.

Mr. Adan identified the suspect as Mustafa Abdullah Wong who is presently confined at the Basilan Provincial Hospital. Since pursuit and rescue efforts started last June 1, at least 11 Abu Sayyaf rebels have been killed while 11 others have been wounded. 16 soldiers have died and 58 others wounded. As this developed, the military said it has uncovered a plot by the Abu Sayyaf to stage bombings and other terrorist activities in Metro Manila. Reports reaching Camp Aguinaldo said arrested Abu Sayyaf rebel Harshim Abdulajid admitted that he had orders to locate a certain Abubakar Janjalani and establish safehouses in Metro Manila which would house an Abu Sayyaf urban unit. Mr. Abdulajid was arrested by a team composed of military and National Intelligence Coordinating Agency agents last June 17 at the FTI Complex in Taguig, southern Metro Manila.

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