TCR Volume 2 Issue No 22 by The CenSEI Report

Strategic Analysis and Research by the

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CENTER FOR STRATEGY, ENTERPRISE & INTELLIGENCE

T H E

Around 20 rights defenders were stopped by police and beaten this morning on May First Square. The police said they were going to ‘beat them to death.’ They took about eight people into custody, including my husband ~ Shi Liping, wife of activist Lin Bingxing, recounting incident in Fuzhou, Fujian Province, ahead of June 4 anniversary of 1989 Tiananmen crackdown

Report Volume 2 - Number 22 • June 4-10, 2012

A class of powerful and rich ... have tied up state power through organised violence, robbed the people of their homes and assets, and the fruits of economic growth. There is only one clear response echoing ... end the one-party dictatorship and establish constitutional democracy ~ Chinese dissident website molihua.org calling for silent protests on anniversary

BUSINESS

4 Can San Miguel Make Philippine Airlines Soar?

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12 Surprise! The Economy Beats the Forecasts

With a war chest of half a billion dollars, PAL’s new owner San Miguel aims to turn the flag carrier around from decades of losses, labor strife, and dwindling routes. The big potential: budget subsidiary AirPhil Express • Going cheap: Low-cost travelers are filling Philippine planes • Indonesian lesson: How Garuda became the world’s most improved airline • Air Asia: From two planes to 86 carrying 30 million passengers a year

Fore st

With consumer and infrastructure spending up along with exports and services, economic output surged 6.4% in the first quarter from a year ago. That same tandem of private buying and public building is needed to sustain growth

20 Tracking the OFW Roadshow

With the number of overseas contract workers continuing to increase year after year, The CenSEI Report takes a look at some trends that have emerged from a diaspora that started in the mid-70s

30 The Fallout from Fukushima

WORLD

More than a year after the Fukushima tsunami and nuclear disaster, the global nuclear power industry and the governments setting its policies have taken steps to boost safety and prevent another catastrophe. Have they done enough?

POINT & CLICK

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38 Government by Facebook and Twitter

The Philippines is playing catch-up in the global rush of governments to harness social media for governance,transparency, accountability and political campaigns • Do’s and don’ts: Like and share lessons for the e-states

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You can access online research via the Internet by clicking phrases in blue

WORLD TECHNOLOGY

Center for Strategy, Enterprise & Intelligence provides expertise in strategy and management, enterprise development, intelligence, Internet and media. For subscriptions, research, and advisory services, please e-mail report@censeisolutions.com or call/fax +63-2-5311182. Links to online material on public websites are current as of the week prior to the publication date, but might be removed without warning. Publishers of linked content should e-mail us or contact us by fax if they do not wish their websites to be linked to our material in the future.

The Bruising Art of Cracking the Intractable How do you solve a stubborn, unyielding problem? Answer: not by giving up. Several of the articles in The CenSEI Report this week cover daunting decades-old challenges and the dauntless challengers aiming to conquer them against the toughest odds. The motto: When you begin the battle, be ready to finish it or be finished. Certainly in the intractable category is Philippine Airlines, burdened by hundreds of millions of pesos in losses year after year, plus hard-bargaining unions and price-cutting low-cost competitors. But that’s the kind of jumbo-sized headaches that gets San Miguel Corporation CEO Ramon Ang rolling up his sleeves with gusto and lining up billions of dollars in capital. That’s par of the course for the man who turned the colonial-era beer and food conglomerate into the Philippines’ leader in power generation and petroleum products, with forays in broadband, banking and property. If anyone can turn PAL into a winner, it could very well be Ang and San Miguel. Also bracing for a tsunami of controversy and opposition is the world nuclear industry in the year after the Fukushima earthquake, tidal wave and nuclear meltdown disaster. In the wake of the geiger-busting calamity in eastern Japan fourteen months ago, nuclear safety has become an oxymoron to many people, including policy makers who decide if nuclear power plants would be built. Germany is among those who pulled the plug, decreeing the phaseout of its uranium-powered dynamos. But advocates and investors in nuclear power have counterattacked and devised technologies and systems to make another Fukushima if not impossible, certainly far less deadly and far more manageable. If selling nuclear power after Fukushima seems like a hopeless pitch, getting staid organs of state to tweet, share and like via social media must be equally brow-raising, But the bureaucratic boffins who thrive on legal basis and policy frameworks, are fast learning the newfangled art of Facebook and twitter. With hits and misses, trial and lost of error, to be sure. But new is never smooth and easy, but always tough and messy. And the mantra of these online mandarins? If you can’t lick ’em, ‘like’ ’em. The Philippine economy’s better-than-forecast 6.4% first-quarter growth and the relentless throngs of overseas Filipino workers sending tens of billions of dollars back home hardly sound like burdensome problems. But one surefire way to take down big problems is not to let them get big in the first place. The Nation articles on GDP and OFWs sift through the good news for incipient issues waiting to pounce. Know them and nip them.

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April, business giants San Miguel Corporation and the Lucio Tan group, signed an investment agreement that gives San Miguel minority stake in national flag carrier Philippine Airlines (PAL) and PAL's affiliate low-cost airline Air Philippines Corporation (Airphil Express).

San Miguel Comes to the Aid of an Ailing PAL

In a disclosure to the Philippine Stock Exchange, San Miguel confirmed a news report that it acquired a 49% stake in both carriers for US$500 million. With the buy-in, San Miguel took over management control of PAL’s parent company PAL Holdings, with San Miguel president Ramon Ang named PAL Holdings’ new president and chief operating officer, replacing long-time president Jaime Bautista on April 20.

The aggressive conglomerate is confident it can turn around its newly acquired airline By Pia Rufino

STRATEGY POINTS San Miguel Corporation is confident it can revive Philippine Airlines which is burdened with labor and financial woes with an infusion of US$500 million PAL’s budget arm, AirPhil Express, has a better outlook than PAL, since its focus is on the faster growing budget end of the market High fuel prices, uncertain demand in mature economies, and intense competition between budget and network carriers are constant struggles facing airline business, so capacity discipline and tight cost control might still be the best strategy

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For his part, Bautista said, in a statement, that San Miguel’s investment “will help the flag carrier in its re-fleeting and make the airline more viable and competitive,” even as he assured the public that it would be business as usual for PAL, which would continue its role as the country’s flag carrier. PAL faces labor, financial issues. Ang’s ability to turn a problematic company around will definitely be put to the test as PAL is still experiencing stress from labor and financial problems. In September, PAL announced it would outsource three of its non-core units effective in October, laying off over 2,600 employees handling in-flight catering, cargo handling, and call-center reservations as part of a cost-saving program to “remain competitive and ensure long-term survival.”

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San Miguel comes to the aid of an ailing PAL

In reaction to the impending layoffs, PAL's ground-crew union, the Philippine Airlines Employees Association (PALEA), staged protest actions against the announced mass layoffs, which led to the suspension of airport operations and the cancellation of flights leaving thousands of PAL passengers stranded at the airport, as summarized by PAL in a September 2011 statement condemning PALEA's actions. Following the San Miguel buy-in, PALEA filed a manifestation with the Court of Appeals saying it was open to new mediation talks to settle the labor dispute, as it urged the new management to reinstate some 2,600 workers who were laid off last year, as reported in the Inquirer. “The new management of PAL should recognize that the solution to the flag carrier’s woes involves not only the re-fleeting of its aging aircraft but more so the reinstatement of its skilled regular workers,” according to the union's manifestation. The disruption in its service brought about by the labor strike, along with rising fuel costs, were blamed in PAL's net loss of $33.5 million from October to December last year, a reversal of its net income of US$15.1 million over the same period in 2010. Its revenues dropped to $386 million, a 3.8% decline from $397 million in 2010, due to slow passenger traffic as well as weak cargo operations, according to the abs-cbnnews.com report. (In a November Inquirer column, economist and TV commentator Solita

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Collas Monsod offers an interesting take on the matter, including a capsule history that puts PAL's labor issues in some perspective. For example, the outsourcing plan had actually been originally presented in August 2009, following a 10-year suspension of the company's collective bargaining agreement and a 10-year moratorium on strikes. In this column, Monsod also examines PAL's latest outsourcing plan in light of previous downsizing campaigns.) Just a year to turn PAL around? Despite the problems facing Asia’s oldest airline, Ang, who has a decade of experience running San Miguel, is positive he can bring PAL back to profitability, even saying that he only needs a year to do this. “PAL will make turnaround a year from the time we invested in the company. We are confident that PAL will make a turnaround,” Ang said in an interview with ManilaStandardToday at the sidelines of the annual stockholders’ meeting of Ginebra San Miguel in May. He further said the airline plans to reduce cost by increasing the utilization of aircraft to about 16 hours a day and improve its ticketing system. Also, PAL will fly non-stop to New York, Toronto, and Europe, he added. Ang also told the Inquirer in an in-depth interview on April 30 that the problems facing PAL are “so easy to fix,” saying that he is no stranger to difficult corporate situations, having recently revitalized the country’s largest fuel refiner and distributor, Petron Corp., which, according

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6 to him, was on the brink of collapse when San Miguel bought it. According to Ang, among the reasons San Miguel bought PAL is that it is “a good company with an excellent brand” adding that “despite having so many problems over 20 years, the company has always been above water.” Ang wants Airphil Express to take over all domestic and the short-haul routes using the low-cost-carrier (LCC) model, while PAL focuses on long-haul routes like regional flights of greater than three hours’ duration. Ang also revealed plans to acquire up to 100 aircraft over the next half decade and to develop a new international airport. PAL will also help Philippine aviation regain its Category 1 status, since it is crucial for the airline’s expansion, Ang said. The U.S. Federal Aviation Administration downgraded the country's civil aviation safety status to Category 2 in Dec. 2007, citing noncompliance with international safety standards, which limits PAL’s operations to and from the United States. (For its part, the European Union in

April 2010 banned Philippine carriers from flying to any of its 27 member-states, after the Civil Aviation Authority of the Philippines failed to address its concerns over safety, modern equipment, and technical personnel.) High costs, declining passenger numbers. While it is trying to deal with high cost levels, PAL also has yet to increase its market share in the airline industry. According to an April 11 analysis of the Centre for Aviation (CAPA), which provides analyses of developments in the global airline industry, PAL is among the weakest of Asia’s major flag carriers, “having seen its share of the Philippine market steadily erode” due to competition from low-cost carriers, and being in need of recapitalization. According to CAPA, PAL has seen its share of the domestic market fall by about 20%, based on current capacity, while its share of the international market has slipped to about 25%. (See charts below) CAPA further said: "PAL cannot compete directly with the country’s fast-growing LCC

PHILIPPINE CARRIERS’ DOMESTIC AND INTERNATIONAL C

0.0% 0.0% 0.0% 0.0%

0.7%

10.0%

45.4%

20.4%

23.5%

Cebu Pacific Air Airphil Express Philippine Airlines Zest Air SEAir Cathay Pacific Dragonair Emirates Other

32.4%

2.6% 2.9% 3.0% 3.6% Source: “Philippine

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San Miguel comes to the aid of an ailing PAL

sector given its higher unit costs and legacy structure. It needs to differentiate the main PAL brand from local competitors, which are all LCCs and only offer economy class.” Budget-brand expansion, fleet renewal, global alliance can help PAL recover. According to CAPA’s analysis, with San Miguel’s US$500-million investment, PAL will be able to employ a strategy used by the similarly sized Indonesian flag carrier Garuda Indonesia, which, as part of its 2011-2015 business plan, is investing in rapid expansion of its budget brand Citilink, fleet renewal and premium product enhancements. CAPA said San Miguel will use PAL’s AirPhil brand to grow both in the Philippines and in the regional market. The growth at PAL will be relatively limited, CAPA predicted, except in North America, where significant capacity will be added once Category 2 restrictions are lifted. “AirPhil generally has a better outlook as most of the growth in the Philippines is at the lower end as it is a market dominated by leisure, migrant worker and visiting friends and relatives traffic...With financial support from San Miguel, AirPhil is now in better shape

APACITY SHARE 25.8%

18.0% 4.0%

7.6%

Low-cost carriers rule the market A Manila Times story on domestic air carriers in February cited Civil Aeronautics Board of the Philippines data in reporting that there were 18.77 million domestic airline passengers in 2011, reflecting a growth of 13.3% from the year before. Cebu Pacific led the local airlines with 8.48 million domestic passengers in 2011, a 6.4% improvement over its figure for 2010. PAL, for its part, experienced a 18.83% drop, from 5.31 million passengers in 2010 to 4.31 million passengers in 2011. PAL's low-cost affiliate, Airphil Express, on the other hand, carried 3.69 million domestic passengers in 2011, almost doubling the 1.85 million it carried the year before. (See table below)

DOMESTIC AIRLINE PASSENGERS, 2010 AND 2011

Domestic carrier

2011 2010 passengers passengers (millions) (millions) Cebu Pacific 8.48 7.97 Philippine Airlines 4.31 5.31 Airphil Express 3.69 1.85 Zest Airways 2.15 1.23 Southeast Asian Airlines Total

.124

.193

18.754

16.553

Rate of change (%) 6.40 -18.83 99.46 74.79 -64.43 13.30

Note: Figures in table did not add up to the aggregate mentioned in the text probably because of rounding discrepancies

Singapore Airlines Philippine Airlines Emirates Other Cathay Pacific Korean Air Cebu Pacific Air Asiana Airlines Etihad Airways

Source: TCR compilation of data presented in “Domestic air travel passengers up in 2011,” by Darwin Amolejar, as published on The Manila Times.net, Feb. 6, 2012

A BusinessMirror feature in February on the competition among local low-cost carriers cited Civil Aeronautics Board executive director Carmelo Arcilla in reporting that the penetration rate of local low-cost carriers is currently pegged at 85%, led by Cebu Pacific and Airphil Express.

Airlines and AirPhil outlook improves as new ownership cements two-brand strategy,” Center for Aviation, April 11, 2012

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Launched in 2010, the budget carrier’s traffic doubled to just under 3.7 million passengers last year.

Airline business faces many challenges. In his 2011 presentation, Paul Stephen Dempsey Tomlinson, Professor of Law and Director of Institute of Air & Space Law McGill University in Canada said the airline business is a tough one.

Following Garuda’s model, CAPA said joining a global alliance, upgrading IT systems and adding more codeshare partners for sharing flights are the possible vital components of PAL’s medium- to long-term strategy.

“Profit margins are thin, fixed costs are high, capital expenditures are large, government regulation has been unstable, and taxation can be unmerciful. Demand can be chilled by an outbreak of disease, recession, war or terrorism,” he said.

to withstand the war now being waged between Philippine LCCs.”

Lessons from a fellow legacy carrier Garuda CEO Emirsyah Satar said the airline’s five-year business plan, dubbed Quantum Leap Program for 2011-2015, is driven by seven elements, including competing in the LCC market through its budget arm Citilink, he explained in an December 2011 interview with the International Air Transport Association, an international trade body of 240 airlines. These drivers are: domestic travel; international travel; addressing low-cost travel through a subsidiary, Citilink; expanding the fleet; rejuvenating the brand; improving our cost discipline; and getting greater productivity from staff.

In the video above, Garuda CEO Emirsyah Satar recalls how he brought Garuda back to profitability CNN

“By 2015, we aim to carry 35.2 million passengers, a 182% increase on 2010 figures. Our capacity in terms of available seat kilometers will increase 171% to 69.7 billion,” Satar said. Garuda was once a loss-generating company, the CEO recounts in a 2009 interview with CNN. When he joined the company in 2005, he learned that the airline only made profit in three of the previous ten years.

“We got out of routes where we were losing money … it was ok if we reduced our market so we could become profitable again," he added, noting that the airline was able to turn a profit two years after he came on board. In 2010, Garuda was named the winner of the World’s most improved airline at the 2010 World Airline Awards - the Passenger's Choice awards.

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Lessons from Southeast Asia’s first low-cost airline Tony Fernandez, the CEO of Malaysia’s Air Asia, likewise has a story on how to turn around an ailing airline. In a November 2010 BBC interview, he recounts buying Air Asia from a Malaysian government-owned company when it was heavily indebted in 2001, and turning the airline into a short-haul, low-cost carrier, making it the first low-cost airline in the region. His secret, according to the interview, is in being singleminded about the operation and keeping it simple. The company grew from two planes in 2002 to a fleet of 86 aircraft flying 30 million people around the world. When the company went into long-haul flights with Air Asia X, it meant two separate companies, management teams, and sets of crews, pilots and engineers. Fernandez had no experience in the airline business, having just stepped out of the music industry when he Air Asia Chief Tony Fernandez shares how he bought the airline. For him, capital, effective marketing, turned ailing Air Asia around by making it the first low-cost airline in the region BBC and good people are the key to start up a business. “It really was a little bit of stick your finger in the air and hope for the best. But we were good marketing people from the music business… we just went out there and felt the market and said if you halve the fare, there's a huge enormous untapped market," he told BBC. Fernandez likewise stressed the importance of keeping the employees happy, saying that for him, “employees come number one, customers come number two,” explaining that “If you have a happy workforce they'll look after your customers anyway," he said. For Ayse Kucuk Yilmaz, assistant professor at the School of Civil Aviation in Anadolu University in Turkey, risks are part of the everyday business for airline companies. In his 2008 study entitled The Corporate Sustainability Model for Airline Business, Yilmaz said the airlines operate in “an extremely dynamic, and often highly volatile, commercial environment.” The study cites a 2005 study from the US entitled Powerful Solutions for EnterpriseWide Airline Management, which enumerates the following pressures facing airlines: • Globalization and the trend t oward mergers and alliances

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require the flexibility to adjust accordingly • World financial instability and eroding yields make it more important than ever to streamline processes, reduce redundancies, and simplify system architecture to lower costs • Because the industry is so competitive, airline operators must analyze every aspect of their business, and that requires fast, flexible, and focused access to information for sound decision making • Quality customer service differentiates one airline from the

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San Miguel comes to the aid of an ailing PAL

other â&#x20AC;&#x201C; and helps secure customer loyalty. Accurate customer data is essential for personalizing services and maximizing the benefit of marketing initiatives.

The study further said that the main concerns of todayâ&#x20AC;&#x2122;s airlines are optimization, improved capacity, cost savings and the ability to react quickly

Meanwhile, a February 2012 airline economic analysis by global management consulting firm Oliver Wyman concludes that throughout the airline industry, some struggles are constants: high fuel prices, uncertain demand in mature economies, and intense competition between value (low-cost) and network (premium) carriers, in both domestic and international markets.

to changes while the solutions for airline planning and control ranges from network planning, codeshare handling, and crew management, to pricing, price distribution, and revenue management.

The analysis, involving seven value carriers and eight network carriers in the U.S, said that airline executives, looking back at their success in 2010, concluded that capacity discipline, along with tight cost control, remains the best strategy.

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NEWS ON THE NET Business

S&P says PH economy a ‘rare bright spot’

to be inclusive – meaning it did not translate to significant poverty reduction, and likely benefited only the rich.

According to Standard & Poor's Ratings Services report titled “Two Emerging Asian Economies Stand Out with Positive Outlooks amid Sobering Economic News Elsewhere,” Indonesia and the Philippines are among only 10 nations worldwide that have positive rating outlooks. In related news, the Philippine economy expanded 6.4% in the first quarter of 2012, as measured by the gross domestic product. Malacañang reports that this growth rate is the highest in the Southeast Asian region and the second highest in Asia. In response to the favorable numbers, investment banks and think tanks have upgraded their economic growth forecasts for the Philippines.

Puregold buys out Parco Supermarkets

In a concentrated effort to spur growth throughout the region, Southeast Asian countries reaffirmed long-standing plans to integrate their economies by the year 2015; during the World Economic Forum for East Asia held in Bangkok last week. Economic integration by 2015 is expected to revitalize Southeast Asia and transform it into a major global growth force, together with neighbors China and India. Locally, more growth may benefit the Philippines, as economists say that while the Philippines and other emerging Asian countries have been cited for their growth rates, actual growth has been neither high enough or persistent enough

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Supermarket chain Puregold Price Club Inc. has announced that it has acquired all 19 operating outlets of smaller rival Parco Supermarkets, by purchasing all outstanding shares of stocks of the seller. The listed company – led by businessman Lucio Co – did not disclose the exact acquisition price, but commented that it was worth “less than 10 percent of the book value of Puregold” as of the end of the first quarter of 2012. Puregold Price Club Inc. is now the nation’s second-biggest operator of hypermarkets and supermarkets, and with this move enjoyed a stock increase of 3.6 percent to ₧22.75 last week. “This acquisition transaction involving the 19 Parco supermarkets closely came after the approval by the stockholders on May 8, 2012, of the acquisition of 100 percent equity interest of the sellers in Kareila Management Corp., operator of the S&R warehouse membership shopping clubs in six locations in Metro Manila, Pampanga and Cebu,” the company further explains. With both Parco and S&R added to its roster, Puregold now operates a total of 131 outlets

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-- 106 Puregold stores, 19 Parco Supermarkets and six S&R membership shopping clubs.

Japan, China bypass U.S. in currency trade Last Friday officially marked the start of Japan and China's direct currency trading. The yen and the yuan started to skip the U.S. dollar exchange rate in transactions in the inter-bank foreign exchange markets in Tokyo and Shanghai on June 1, in a bid to strengthen bilateral trade and investment between the two Asian countries, who also happen to be the world's second- and thirdlargest economies. The move has been received positively by the International Monetary Fund, though some private parties (such as Honda Motor Co. and Sony Corp.) are uncertain about the change. Through direct trading, the two nations intend to reduce their dependence on the US dollar – aiding China's goal of undercutting U.S. influence in the Asian region and furthering its goal of the internationalization of the yuan. For Japan, the potential profits boost for its exporters is something the nation is counting on. "We can lower transaction costs and reduce settlement risks at financial institutions as well as making both nations' currencies more useful and energizing the Tokyo market," Japan's Finance Minister Jun Azumi said last May 29.

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A Surprising Spurt The economy zooms 6.4%, beating forecasts — and most of Asia By Ricardo Saludo

1.1 0.4 0.3

TAIWAN

HONGKONG

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STRATEGY POINTS The economy may be returning to the accelerated growth of the past decade, leading Asean again With government underspending over and consumer and business optimism on the rise, services and industry soar Despite the GDP surge, however, self-rated hunger, poverty and joblessness rose. Is growth inclusive?

or Filipinos entering puberty, they and their families have been fortunate not to have gone through an economic recession in their dozen or so years of life. Unlike many of our neighboring countries, the Philippines has not had a single quarter of negative growth for the entire past decade. And now the economy’s climb to rapid growth looks set to resume, with expansion in the first quarter of the year hitting a surprising 6.4%, according to the National Statistical Coordination Board (NSCB). That forecast-beating rate also topped all major Asian economies (see Leading the Region chart). Only China grew faster, but its 8.1% expansion was significantly down from its faster pace in the past decade. Among other countries, only Indonesia’s 6.3% and India’s 5.3% came close. And the Philippines’ rate is well above the 3.7% preliminary average growth for the members of the Association of Southeast Asian Nations (Asean).

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LEADING THE REGION

6.4

Real Growth in Selected Asian Economies inflation-adjusted percent increase in first-quarter output over a year ago

6.3

Sources: National Statistical Coordination Board; Tradingeconomics.com

5.3

4.7 4.0 2.8 2.8

CHINA

PHILIPPINES

INDONESIA

INDIA

MALAYSIA

VIETNAM

JAPAN

SOUTH KOREA

Socio-Economic Planning Secretary Arsenio Balisacan, installed just last month atop the National Economic and Development Authority (NEDA), declared in a statement: “The first quarter economic growth was broad-based, as there were multiple sources of growth. In general, growth was driven by the services and industry sectors on the supply side and by net exports, household final consumption expenditure, and government consumption on the demand side.” The former dean of the University of the Philippines School of Economics, where many NEDA heads come from, cited other drivers of growth: “accelerated government spending (including for infrastructure and [conditional cash transfer] spending), low prices which supported household consumption, betterthan-anticipated exports performance.” Other pluses were expanding credit, continued strong remittances from abroad,

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tourism growth, higher business and consumer confidence, and “an overall buoyant domestic economic outlook.” In sum, the economy was firing on all cylinders, reversing last year’s slowdowns in public spending, manufacturing and exports. “After four quarters of lackluster performance, the Philippine Economy is off to a rousing start in the year of the water dragon,” crowed NSCB Secretary-General Romulo Virola. He highlighted turnarounds in factory production, “which recovered some grounds that got eroded in the third and fourth quarters last year,” as well as exports, up nearly 8%. Also on the rebound, noted Virola, was the agriculture sector, which expanded after seasonally adjusted declines in the last two quarters of last year. Remittances from overseas Filipino workers (OFWs), also recovered, lifting Net Primary Income from abroad by 4% and pushing gross national

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14 income (GNI or GNP) growth to 5.8%, from 3.5% last year (see Where the Growth Is table). Back to the growth path. The biggest drivers of expansion, however, were two major services-oriented components: government spending on the demand side of GDP, and the services sector on the production side. Government Final Consumption Expenditure leapt 24% over the first quarter last year, when underspending cut GFCE by 16% in real terms amid the Aquino administration’s drive to slash the budget deficit and win better credit ratings. Accelerated state outlays in the first quarter also boosted public construction by almost two-thirds over the same period a year ago, offsetting the nearly 10% drop in private building. The upgrades and positive outlooks came from international rating agencies over the

past year, but economic growth halved from near-record 7.6% in 2010 to an initially estimated 3.7% last year. (NSCB revised it upward to 4.9%, according to its first-quarter 2012 growth report, possibly due to its rebasing to 2000 prices from 1985 from inflation-adjusted values starting mid-2011.) Last year’s economic slowdown was the main factor behind a drop in the Philippines’ rank to 43 from 41 in the recently published World Competitiveness Yearbook rankings of 59 major economies, compiled by Switzerland’s Institute for Management Development (IMD) business school. However, with 2012 growth tipped to recover, so is the Philippines’ IMD ranking next year, according to Guillermo Luz, private-sector co-chairman of the publicprivate National Competitiveness Council (NCC), tasked with improving the country’s global competitiveness. Deputy Presidential

WHERE THE GROWTH IS First Quarter 2012 Expansion by Industry and Demand Sector percent change from a year ago, adjusted for inflation GROSS DOMESTIC PRODUCT GROSS NATIONAL INCOME PRODUCTION SECTOR Agriculture, Hunting, Forestry and Fishing Industry Services DEMAND SECTORS Household Consumption Government Consumption Capital Formation Exports Imports

2012 6.4 5.8 1.0 4.9 8.5 6.6 24.0 -23.5 7.9 -2.6

Source: National Statistical Coordination Board, First Quarter 2012 expenditure and industry sector data

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INCOMES ON THE RISE Per Capita GDP, GNI and Household Consumption 2011 and 2012 First Quarter in pesos and percent change over a year ago, current and 2000 prices TYPE OF EXPENDITURE A. Estimates in current pesos 1. GROSS DOMESTIC PRODUCT 2. GROSS NATIONAL INCOME 3.HOUSEHOLD FINAL CONSUMPTION EXPENDITURE B. Estimates in constant (1985) pesos 1. GROSS DOMESTIC PRODUCT 2. GROSS NATIONAL INCOME 3. HOUSEHOLD FINAL CONSUMPTION EXPENDITURE C. Population (million persons)

Q1 2011

Q1 2012

Growth Rate (%)

24,008 32,223 17,629

25,425 34,173 19,314

5.9 6.1 9.6

14,936 20,032 10,444

15,626 20,840 10,953

4.6 4.0 4.9

93.6

95.2

Source: National Statistical Coordination Board per capita data

Philippine quarterly GDP growth has steadily risen since 2001, avoiding recession during the 2008-09 global financial crisis, and now recovering from last year’s slowdown

Chart from TradingEconomics.com

Spokesperson Abigail Valte echoed the NCC line: “We expect our country's competitiveness ranking to improve given the numbers thus far for 2012 are better” than last year. Indeed, the Philippines may be returning to its trajectory of accelerating growth in the past decade (see Incomes on the Rise lower chart). During the Arroyo administration, with its priority focus on boosting growth

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and infrastructure while instituting fiscal reforms, the country narrowed the gap between its GDP pace and those of the four other Asean founding memberstates: Indonesia, Malaysia, Singapore and Thailand. From perennial laggard, the country’s 6.6% expansion topped all but Singapore in 2007, then beat the city-state and Thailand with 4.2% in 2008, based on data in the

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16 Asian Development Bankâ&#x20AC;&#x2122;s December 2011 Asian Economic Monitor, page 36. During the 2009 global recession, only Indonesia and the Philippines grew among the original Asean five. And in 2010, the economyâ&#x20AC;&#x2122;s 7.6% real increase nearly matched Thailand and fell behind only Singapore. Now, after the dips in 2009 and 2011, the Philippines may lead

(see Growth Drivers table). Crucial to continued services expansion is robust consumer spending, which propelled retailing and health services as well as hotels, restaurants and leisure enterprises to double-digit growth. Most other services components also sped along between 8% and 10%. They

GROWTH DRIVERS Services and Industry Value Added, 2011 and 2012 First Quarter in million pesos and percent change over a year ago, current prices INDUSTRY/IINDUSTRY GROUP

Q1 2011

1,338,685 167,370 390,114

Growth Rate (%) 11.6 10.9 9.9

158,102

177,424

12.2

204,125

235,901

15.6

SERVICE SECTOR 1,999,684 Transportation, Storage and Communication 150,923 Trade and Repair of Motor Vehicles, 354,976 Motorcycles, Personal and Household Goods Financial Intermediation

Real Estate, Renting & Business Activity Public Administration & Defense; Compulsory Social Security Other Services

255,798 75,759

Q1 2012

285,946 81,930

11.8 8.1

INDUSTRY/INDUSTRY GROUP INDUSTRY SECTOR Mining & Quarrying Manufacturing

Q1 2011 735,231 38,969 491,875

Q1 2012 778,767 29,946 528,397

Growth Rate (%) 5.9 -23.2 7.4

Construction Electricity, Gas and Water Supply

125,043 79,345

133,737 86,687

7.0 9.3

Source: National Statistical Coordination Board services and industry sectors data

most of Asia if the first-quarter growth rate is sustained. At your service. Turning to the production side of GDP, the services sector, which contributes 56% of economic output, was the engine of growth, as usual

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include three other major subsectors highly dependent on business growth: Transport, Storage and Communication, the banking and insurance sectors providing Financial Intermediation, and Real Estate, Renting and Business Activity, which grew 9%, 8.8% and 7.9%, respectively.

WORLD TECHNOLOGY

A surprising spurt

The good news is both consumer and business confidence have been on the upswing in tandem with global recovery and the buoyant mood after the 2010 elections. Consumer confidence, as measured by the Bangko Sentral ng Pilipinas and charted by Tradingeconomics.com, has risen to -14.7 index points in the first quarter of this year, a huge jump from its trough of -52.8 in the depths of the world recession in 2009. Business confidence has made a similar rebound, rising to 40.5 points in January-March, up from -23.9 three years ago. The rising confidence also augurs well for the Industry sector, which comprises almost a third of GDP. Manufacturing posted decent 5.7% real growth, led by 52% expansion in apparel and 86.6% in furniture. The top subsectors managed middling performance. Food processing had decent 6% expansion, but the combined telecom, electrical machinery, and office-equipment industries crawled at 3.2%. Electricity, Gas and Water grew 8% on the back of economic and business expansion. But with private construction down 9.9% from a year ago, utilities growth may moderate somewhat. The other worrisome sector is Mining and Quarrying, which suffered from gold’s double-digit contraction. And future growth for the subsector look iffy with last year’s 35% plunge in mining investments, due to the government’s moratorium on new concessions, plus uncertainty and controversy in resources policy. The new growth formula. If consumer and investment spending, including

The

infrastructure, seem to have replaced exports as the main drivers of Philippine growth, that’s exactly what the World Bank wants to hear from this corner of the global economy. The top development lender’s mid-year East Asia and Pacific Economic Update, released May 23, is titled “Capturing New Sources of Growth” to underscore the imperative for the region’s economies to shift from export-driven to domestic-demandpropelled expansion. Right in the first paragraph of the Executive Summary, the 102-page report made its policy recommendation crystal-clear: “The best prospects for the region to maintain high rates of growth, job creation, and poverty reduction are through rebalancing towards domestic demand and investing in productivity increases and further international integration.” Also reiterated in a video, the Bank warned that export demand in developed countries would continue to be weak for years to come, making rebalancing even more necessary in the medium term, not just the present slump. “Developing East Asia grew by 8.2 percent in 2011 (4.3 percent excluding China), a sharp decline from the nearly 10 percent growth rate recorded in 2010 (7.0 percent excluding China),” reported the regional update. “This slowdown was largely due to lower-than-expected growth in manufacturing exports and supply disruptions in the wake of the Japan earthquake and tsunami and the severe flooding in Thailand, Lao, PDR, and Cambodia.” What saved Asia? Answer: “Domestic demand and investment compensated for these factors and were aided by monetary policy loosening.”

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18 Also bearing the feeling poor and same message is lacking jobs? the International Which highlights Monetary a question raised Fund’s Regional by the Aquino Economic Update administration for Asia and the regarding its Pacific, published predecessor’s in April. Titled high-growth “Managing policies: Is the Spillovers and growth inclusive, Advancing benefiting all Economic income levels, Rebalancing,” the not just the rich? 58-page report set out strategies The government to safeguard has sought economies from to spread the the adverse benefits of impact of growth mainly financial crises through the The World Bank prescription: Consumer and in the West (see conditional cash infrastructure spending, new investment thrusts, page 9 of the IMF transfer program and labor productivity and migration update, which (CCT), providing also addresses monthly stipends a possible hard landing in China and of up to P1,400 per family. Beneficiaries escalating world energy and commodity appreciate the financial aid, but much prices). It also reprised the theme of tapping prefer to get steady work. Economic growth new growth drivers other than exports. That is supposed to deliver those wanted jobs, yet includes responding to China’s own shift going by SWS data, it seems even the firstfrom export-driven to domestic-demandquarter’s GDP surge was unable to pare the propelled expansion, which offers both jobless ranks. opportunities and threats to its emerging economies (see page 35 of Update). One problem is where the 6.4% growth was and wasn’t. The pacesetting sectors of What about the poor? Besides the services and industry employ mostly city consensus forecast of slower growth this dwellers, especially those with year, what made the first-quarter expansion ample skills and learning, from sales doubly surprising is the recent jump in selfattendants and factory workers to realrated hunger, poverty and unemployment estate and stock-market brokers. But the as surveyed by Social Weather Stations in measly 1% inflation-adjusted growth in March. How can the economy be leaping Agriculture, Hunting, Forestry and Fishing, when more Filipinos are missing meals, which led to a 3.1% decline in actual

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A surprising spurt

DOWN ON THE FARM Agriculture Sector Value Added, 2011 and 2012 First Quarter in million pesos and percent change over a year ago, current prices INDUSTRY/INDUSTRY GROUP

Q1 2011

Q1 2012

Growth Rate (%)

AGRICULTURE INDUSTRY a. Agriculture

268,598 267,897

257,412 256,498 62,189 24,064 25,803 13,882 20,036 3,200 2,879 1,031 2,504 3,530 14,347 36,058 29,048 17,926 913

-4.2 -4.3

7.6 8.2 -20.7 -39.8 -3.2 -13.3 22.4 1.8 9.1 -25.0 -7.7 0.6 6.8 -5.0 30.2

FISHING GROSS VALUE ADDEDE IN AGRICULTURE, HUNTING, FORESTRY AND FISHING

43,539 312,137

45,116 302528

3.6 -3.1

Palay Corn Coconut including copra Sugarcane Banana Mango Pineapple Coffee Cassava Rubber Other crops Livestock Poultry Agricultural activities & services b. Forestry

57,822 22,231 32,526 23,075 20,703 3,692 2,352 1,013 2,295 4,709 15,551 35,857 27,202 18,869 701

Source: National Statistical Coordination Board agriculture sector data

earnings (see Down on the Farm table), did not do much for the majority of the poor who live in the countryside.

about 8% growth, but factoring out the impact of rising prices, the real increment is barely half the overall GDP expansion.

Hardest-hit by the fall in crop earnings are coconut farmers and sugar workers, among the most destitute of Filipinos: value added in their subsectors fell by 20.7% and 39.8%, respectively. Fisherfolk, another longsuffering community, barely made ends meet, with just 3.6% increase, even less than the inflation rate. Palay and corn managed

In sum, the economyâ&#x20AC;&#x2122;s first-quarter surprise, while an encouraging boost to confidence, is far from a home run. Much needs to be done to address perennial investment dampers like inadequate infrastructure, infuriating red tape, and insurgent attacks. And as the SWS data seems to show, inclusive growth remains elusive for the Philippines.

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Getting a Handle on the OFW Diaspora

Government statisticians along with academicians analyze various aspects of the OFW phenomenon By Victoria Fritz

STRATEGY POINTS Majority of OFWs have come from the National Capital Region and other parts of Luzon A shift in the gender distribution of new hires, from male to female OFWs, follows a shift in dominant type of occupation from production-related to service-oriented, unskilled work Over the last decade, the top destination for temporary or contract workers has been the Middle East, by a growing margin over other Asian countries

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Getting a handle on the OFW diaspora

verseas Filipino Workers (OFWs) have comprised a significant sector of the national economy since the 1970s, if only for their remittances, which have fueled consumption spending by their beneficiaries at the same time they have bolstered the country’s foreign-exchange reserves.

sector of our economy. Apart from their common and obvious need for economic advancement that can’t be met by the national economy, little is known about them as a group.

According to figures compiled by the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) since 2003, remittances coursed through the country’s commercial banking system exceeded the $10-billion mark in 2005, and then exceeded the $20-billion mark in 2011. OFWs have been called “national heroes” for their contribution to national economic development, and yet, it might surprise many of us to learn that we’re still trying to get a handle on this otherwise significant

The Commission on Population acknowledges as much in “Filipinos Beyond Borders,” its State of the Philippine Population Report 4, issued in 2007, which it dedicated to studying the interconnections between overseas labor migration with major population and development issues. In the report’s chapter, “Who are the OFWs?”, it cites estimates of the Commission on Filipinos Overseas that indicate the number of Filipinos going overseas to work rose dramatically, from 2.94 million in 1997 to 3.80 million in 2006. (See following table)

ESTIMATES OF TEMPORARY OVERSEAS CONTRACT WORKERS YEAR

TEMPORARY OVERSEAS FILIPINOS

PERCENT CHANGE

2006

3,802,345

4.12%

2005

3,651,727

1.46%

2004

3,599,257

6.33%

2003

3,385,001

6.85%

2002

3,167,978

3.88%

2001

3,049,622

1.96%

2000

2,991,125

0.32%

1999

2,981,529

0.68%

1998

2,961,254

0.72%

1997

2,940,002

Source: TCR calculations based on figures from Commission on Filipinos Overseas, as cited in “Who are the OFWs?”, Chapter 2 of “Filipinos Beyond Borders,” State of the Philippine Population Report 4, Commission on Population, 2007, Table 2.1, page 9

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22 Geographic distribution of OFWs. As to where the OFWs have come from, the following charts from the National Statistics Officeâ&#x20AC;&#x2122;s Surveys of Overseas Filipinos of 1996 and 2007 Survey provide a comparison.

CALABARZON (Cavite, Laguna, Batangas, Rizal, and Quezon), and Central Luzon, with Western Visayas replacing the Ilocos region.

In 1996, the largest numbers of OFWs came from the National Capital Region, Southern Tagalog, Central Luzon, and Ilocos. In 2006, the largest percentages continued to come from the National Capital Region,

These distribution percentages are mirrored in statistics on OFWs who worked abroad from April to September during the years 2006-2010, as collated by the Bureau of Labor and Employment Statistics, an attached agency of the Department of Labor and Employment. (See following table)

DISTRIBUTION OF REGIONS OF OVERSEAS FILIPINO WORKERS, 2006-2010 (IN THOUSANDS) 2006

REGION PHILIPPINES

National Capital Region

2007

2008

2009

2010

1,515

1,747

2,002

1,912

2,043

248

Cordillera Administrative Region

280

266

282

Region I - Ilocos Region

115

135

156

164

194

Region III - Central Luzon

220

250

290

281

294

Region IV-B - MIMAROPA

Region II - Cagayan Valley

Region IV-A - CALABARZON

255

Region V - Bicol Region

103 309

110

368

109 314

33 57

125 327

35 63

Region VI - Western Visayas

144

148

156

176

170

Region VIII - Eastern Visayas

Region VII - Central Visayas

Region IX - Zamboanga Peninsula

Region X - Northern Mindanao

Region XI - Davao Region

Region XII - SOCCSKSARGEN

Caraga

Autonomous Region in Muslim Mindanao

17 47

89 35 54 45 73 17 54

112

36 56 56 90 24 66

117

42 54 54 80 25 46

135

47 61 57 86 29 63

According to this distribution of OFWs currently working or who had worked abroad during the past six months by region from 2006 to 2010, the southern Tagalog CALABARZON region now provides the largest number of OFWs, followed by Central Luzon and the National Capital Region, but the regions of Ilocos, Western Visayas, Central Visayas, and Cagayan Valley are providing their own big numbers Source: Bureau of Labor and Employment Statistics

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NUMBER OF OFWS, BY REGION: APR.-SEPT., 1996 160 140 (in thousands)

120 100 80 60 40

CARAGA

ARMM

C. Mindanao

S. Mindanao

N. Mindanao

W. Mindanao

E. Visayas

C. Visayas

W. Visayas

Bicol

S. Tagalog

C. Luzon

C. Valley

Ilocos

CAR

NCR

Source: 1996 Survey on Overseas Filipino Workers, National Statistics Office http://www.census.gov.ph/data/pressrelease/1997/of9600tx.html

NUMBERS OF OFWS AND DISTRIBUTION BY GENDER, 1995-2006 18 16 14 12 10 8 6 4

ARMM

CARAGA

SOCCSKSARGEN

Davao

N. Mindanao

Zamboanga Peninsula

E. Visayas

C. Visayas

W. Visayas

Bicol

MIMAROPA

CALABARZON

C. Luzon

C. Valley

Ilocos

CAR

NCR

Source: 2006 Survey on Overseas Filipino Workers, as cited in “Who are the OFWs?”, Chapter 2 of “Filipinos Beyond Borders,” State of the Philippine Population Report 4, Commission on Population, 2007, Figure 2.6, Page 9.

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24 Remittances and poverty incidence. Meanwhile, the following charts on OFW remittances and poverty incidence by region for the year 2002, culled from Jeremaiah Opiniano’s study on migration and development issues in the Philippines, show an inverse relationship between OFW remittances and poverty incidence. The regions with the highest OFW remittances in 2002 – National Capital Region, Southern Tagalog, and Central

Luzon – had the lowest poverty incidence rates for that year. The regions with the lowest OFW remittances – Zamboanga Peninsula, Autonomous Region in Muslim Mindanao, and Caraga – had among the highest poverty incidence rates that year. This implies that, although aggregate remittances have grown and continue to increase, their ultimate influence on aggregate poverty alleviation still has to be determined.

DISTRIBUTION OF OFW REMITTANCES BY REGION, 2002 Region I - Ilocos Region X - Northern Mindanao Region XI - Davao Region XII - SOCCSKSARGEN Region II - Cagayan Valley Region III - Central Luzon Region IV - Southern Tagalog Region V - Bicol Region VI - Western Visayas Region VII - Central Visayas Region VIII - Eastern Visayas Region IX - Zamboanga Peninsula ARMM CAR Region XIII - Caraga NCR Total Remittances

6,000,000

POVERTY INCIDENCE BY REGION, 2002 Region I - Ilocos Region X - Northern Mindanao Region XI - Davao Region XIII - SOCCSKSARGEN Region II - Cagayan Valey Region III - Central Luzon Region IV - Southern Tagalog Region V - Bicol Region VI - Western Visayas Region VII - Central Visayas Region VIII - Eastern Visayas Region IX - Zamboanga Peninsula ARMM Cordillera Administrative Region XIII - Caraga NCR Poverty Incidence (x 1000)

Source: “Our Future Beside the Exodus: Migration and Development Issues in the Philippines,” Jeremaiah Opiniano, Institute for Migration and Development Issues, August 2004, p. 40

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Getting a handle on the OFW diaspora

More women among the OFWs than before. The Commission on Population report notes the increasing feminization of migration, in the years up to 2006. In the following chart, comprised of figures from surveys of overseas workers, the trend toward more women among the OFWs than before is apparent. From 1995 to 2003, men comprise a larger percentage of OFWs, but the percentage of women surpasses that

of men in 2004, and the distribution by gender becomes roughly even after that. The following table, comprised of figures on newly hired temporary overseas workers, shows a more pronounced trend toward women hires, with women comprising over 70% of newly hired overseas workers from 2000 to 2005, and still comprising about 60% in 2006.

1600 1400 1200

BOTH MALE FEMALE

NUMBERS OF OFWs AND DISTRIBUTION BY GENDER, 1995-2006

1000 800 600 400 200 0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source: “Who are the OFWs?”, Chapter 2 of “Filipinos Beyond Borders,” State of the Philippine Population Report 4, Commission on Population, 2007, Figure 2.2, Page 11.

NEWLY HIRED TEMPORARY OVERSEAS WORKERS BY SEX, 1998-2006 YEAR

FEMALE

MALE

TOTAL

2006

184,454

123,688

308,142

205,206

79,079

284,285

208,411

72,064

280,475

175,103

66,408

241,511

208,278

77,850

286,128

186,018

72,186

258,204

178,323

74,707

253,030

151,840

85,420

237,260

133,458

85,757

219,215

2005 2004 2003 2002 2001 2000 1999 1998

Source: “Who are the OFWs?”, Chapter 2 of “Filipinos Beyond Borders,” State of the Philippine Population Report 4, Commission on Population, 2007, Table 2.3, Page 12

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26 The following table shows a breakdown of temporary overseas workers by both occupation group and gender in 2003 and 2004. There is an increase in the percentage of women in 2004, and it can be attributed to increases in occupational categories where women outnumbered men, namely in service, shop and market sales workers, and in laborers and unskilled workers.

The following chart, generated from the National Statistics Office 2010 Survey on Overseas Filipinos, depicts the distribution of temporary overseas workers, with laborers/ unskilled workers (heavily dominated by women) contributing the highest percentage of the total, with two other groups dominated by men each contributing about half the percentage of the laborers/unskilled group.

NEWLY HIRED TEMPORARY OVERSEAS WORKERS BY SEX, 1998-2006 *Major and Minor Occupation Groups

Total Philippines Professionals Technicians and associate professionals Clerks Service workers and shop and market and sales workers Farmers, forestry workers and fishermen Trade and Related Workers Plant and machin e operators and assemblers Laborers and unskilled workers Special occupations

2004 2003 Both Male Female Both Male Female % % % % 1,063 49 51 982 52 48 81 37 63 93 47 53 91 54 46 95 52 48 42 136

43 42

57 58

32 107

44 47

56 53

100

164 161

88 87

12 13

150 161

90 96

10 4

355

312

100

Source: “Who are the OFWs?”, Chapter 2 of “Filipinos Beyond Borders,” State of the Philippine Population Report 4, Commission on Population, 2007, Table 2.3, Page 12

2010 (BY PERCENTAGE) Both

Male

Female

Laborers/unskilled

Trades

Agriculture

Service

Clerical

Technicians

Professional

Gov't officials, etc.

Plant/machine operators

Source: NSO Distribution by Type of Occupation 2010

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However, by 2010, males outnumbered the females again, with the OFW sector at 52.3% males and 47.7% females. This could be related to the ongoing shifts in major destination among contract workers, given that the Middle East has become the largest employer of OFWs since 2001, per the following table.

The trend has continued past 2006 and into 2010, with the Middle East region registering marked increases in OFW hiring, compared with the relatively incremental hiring in other Asian countries, to the point where OFWs headed for the Middle East outnumber those headed for other Asian countries by more than two to one.

NUMBER OF OVERSEAS FILIPINO WORKERS BY REGION OF DESTINATION, 1998 - 2006 2006 2005 2004 Middle East 462,545 394,491 352,314 Asia 222,940 259,209 266,609 Europe 59,313 52,146 55,116 Americans 21,976 14,886 11,692 Africa 9,450 9,103 8,485 Trust Territories 6,481 7,596 7,177 Oceania 5,216 2,866 3,023 Unspecified 8 135 1 Deployed Land-based Total 788,160 740,632 704,586 Deployed Sea-based Total 274,497 47,983 229,002 Grand Total 1,062,657 988,615 933,588

2003

2002

2001

2000

1999

1998

285,564 306,939 297,533

283,291 287,076 279,767

255,287 292,077 285,051

292,067 299,521 307,261

37,981

45,363

43,019

39,296

30,707

26,422

11,049

11,532

10,679

7,624

9,045

9,152

8,750

6,919

4,943

4,298

4,936

5,538

5,023

6,075

6,823

7,421

6,622

7,677

1,698

1,917

2,061

2,386

2,424

2,524

46,279

10,882

11,530

6,921

651,938 682,315 662,648

643,304 640,331 638,343

216,031 209,593 204,951

198,324 196,689 193,300

867,969 891,908 867,599

841,628 837,020 831,643

Source: “Who are the OFWs?”, Chapter 2 of “Filipinos Beyond Borders,” State of the Philippine Population Report 4, Commission on Population, 2007, Table 2.6, Page 17

Year

Total 1/

NUMBER OF OVERSEAS FILIPINO WORKERS BY REGION OF DESTINATION,2007 - 2010 2010

2009

2008

2007

1,123,676

1,092,16

974,399

811,070

Asia

280,808

260,995

219,598

218,983

Middle East

684,060

669,042

631,828

487,878

The Americans

25,696

31,146

31,916

28,019

Africa

Europe

Oceania

Trust Territories Unspecified

25,207 48,185 12,341 3,107

18,967

16,434

47,409

51,795

13,297

15,030

5,134

44,272

5,461

46,172

2,337

13,126 45,613 10,691 6,674 86

1/ Based on the report of POEA's Labor Assistance Center on the actual departure of OFWs at the international airports, NAIA Cabin Crews and POEA Regional Extension Units

Source: Philippine Overseas Employment Administration data compiled by the National Statistics Coordinating Board

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While the gender distribution of OFW employment might shift now and then because of cyclical demand, one demographic that appears to have undergone a steady decline is the number of irregular or undocumented workers. In another paper by Opiniano, “The Panorama and Drama of International Migration and Development in the Philippines,” which comprised part of a compilation of papers published in the Czech Republic on “Development, Environment and Migration,” the estimated number of

irregular workers has declined by about 1,000,000 between 1997 and 2005. (See following tables) What is interesting, alongside the overall dwindling numbers, is that the countries with the most number of irregular migrants, by far, are the United States and Malaysia. Opiniano attributes the popularity of the U.S. as a destination for irregular migrants to the historic colonial ties with the U.S., while Malaysia’s prominence is attributed to its proximity to the western Mindanao area.

STOCK ESTIMATES OF OVERSEAS FILIPINOS Year 1997 1998 1999 2000

Permanent 2,153,967 2,333,843 2,482,470 2,551,549

2001 2002 2003 2004 2005

2,736,528 2,807,356 2,865,412 3,187,586 3,391,338

Temporary 2,940,082 2,961,254 2,981,529 2,991,125 3,049,622 3,167,978 3,385,001 3,599,257 3,651,727

Irregular 1,880,016 1,913,941 1,828,990 1,840,448 1,625,936 1,607,170 1,512,765 1,297,005 881,123

Total 6,974,065 7,209,038 7,292,989 7,33,122 7,412,086 7,582,504 7,763,178 8,083,848 7,924,188

Source: “The Panorama and Drama of International Migration and Development in the Philippines”, Jeremiah Opiniano, Chapter 7, “Development, Environment and Migration,” by Robert Stojanov et al, Palacky University Faculty of Science, Olomouc, Czech Republic, 2008, Table 7.1, page 108

COUNTRIES WITH THE MOST NUMBER OF IRREGULAR MIGRANTS FROM THE PHILIPPINES COUNTRY United States Malaysia France Singapore Japan Israel United Arab Emirates Italy Saudi Arabia Souh Korea World Total

2000 2001 2002 2003 2004 278,000 532,200 510,000 510,000 350,000 509,564 363,000 363,000 363,000 300,000 18,050 26,121 26,121 26,121 26,120 65,000 71,917 71,920 71,917 72,000 16,369 36,379 36,379 30,100 31,430 20,711 21,136 21,136 23,000 23,000 20,000 38,000 38,000 20,000 20,000 62,531 78,000 78,000 50,000 48,000 25,700 18,000 18,000 18,000 18,000 15,273 15,235 15,235 9,015 9.015 1,840,448 1,625,936 1,579,092 1,512,765 1,297,005

2005 157,998 125,000 40,105 37,600 30,619 23,000 20,000 20,000 18,000 13,519 881,123

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NEWS ON THE NET Nation

Corona convicted The Senate sitting as the impeachment court convicted Chief Justice Renato Corona, voting 20-3, for betrayal of public trust and culpable violation of the Philippine Constitution. The court found Corona guilty of Article II of the impeachment complaint, which alleged that the chief magistrate did not fully disclose his assets in his Statements of Assets, Liabilities and Net Worth (SALN). Impeachment court presiding officer Senate President Juan Ponce Enrile read the court's ruling after the 23 senatorjudges declared their individual votes for conviction or acquittal. Senators Edgardo Angara, Alan Peter Cayetano, Pia Cayetano, Franklin Drilon, Francis Escudero, Jinggoy Estrada, Teofisto Guingona III, Gregorio Honasan II, Panfilo Lacson, Lito Lapid, Loren Legarda, Sergio Osmeña III, Francis Pangilinan, Aqulino "Koko" Pimentel III, Ralph Recto, Ramon Bong Revilla Jr., Vicente Sotto III, Antonio Trillanes IV, Manuel Villar, and Juan Ponce Enrile voted for Corona's conviction. On the other hand, Senators Joker Arroyo, Miriam DefensorSantiago, and Ferdinand Marcos Jr. voted for Corona's acquittal. The Senate has formally served notice of the impeachment court’s decision, which is unappealable and immediately executory.

Corona's lawyers revealed that the former chief justice has decided not to appeal his case before the Supreme Court. The House of Representatives impeached Corona last December 12 for alleged graft and corruption, culpable violation of the Constitution, and betrayal of public trust. The Constitution provides that the penalty for an official convicted on impeachment shall be not more than removal and disqualification from office.

JBC to look for new CJ on Monday The Judicial and Bar Council is set to convene to discuss the vacancy at the Supreme Court following the removal of former Chief Justice Renato Corona after being convicted by the impeachment court. The high court's most senior associate Justice Antonio Carpio assumed office as acting chief justice in a special en banc session called after Corona's conviction. By tradition, the five most senior associate justices become automatically nominated for the post of chief justice. However, there is no prohibition against appointing non-members of the judiciary for the position. The Judicial and Bar Council is the body mandated to screen and recommend to the President nominees to positions in the judiciary. The JBC is composed of the chief justice as ex-officio chair, with the Justice Secretary and a member each from the

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House of Representatives as ex-officio members, and a retired justice, representatives from the academe, the private sector and the Integrated Bar of the Philippines as regular members.

In tourism competitiveness, PHL trails Asean neighbors The Philippines remains one of the least competitive in travel and tourism among member-countries of the Association of Southeast Asian Nations (ASEAN), the World Economic Forum reported in its ASEAN Travel and Tourism Competitiveness Report 2012. The Travel and Tourism Competitiveness Index showed that the Philippines ranked 94th worldwide, and second most unsafe country to visit in ASEAN, with only Cambodia at 109th being regarded as more unsafe for visitors. According to the report, the factors preventing the country from realizing its full potential include issues of security, poor infrastructure, health and sanitation, environmental sustainability, and cultural resources. As for the region, the report noted that ASEAN is an affordable destination by international standards and that conservation efforts must be undertaken to protect the region’s natural heritage, which is important for travel and tourism competitiveness.

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The Fallout from Fukushima

After a devastating earthquake and tsunami hit Japan’s Fukushima Daiichi nuclear power plant in March 2011, the challenge lies in making future plants safer By Marishka Noelle M. Cabrera

STRATEGY POINTS The nuclear accident in Fukushima has led governments and global organizations to rethink nuclear policies and safety standards A World Health Organization report reveals radiation levels in most of Japan are below cancer-causing levels According to the International Atomic Energy Agency, nuclear safety is now stronger

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ore than a year has passed since the March 2011 catastrophic earthquake and tsunami hit Japan, but the release of radioactive material into the environment caused by the damage to the Fukushima Daiichi nuclear power plant remains a pressing concern for the world today and possibly for years to come. In a recent development, radiation levels in most of Japan are “below cancercausing levels,” according to a report published in Japan Today, based on preliminary assessments discussed in a World Health Organization report released this month. However, infants in one town “appear to be at a higher risk of developing thyroid cancer.” According to the WHO report: “In the most affected area of Fukushima prefecture, the estimated thyroid doses are within the dose band of 10−100 mSv [millisievert], with the exception of one example location, where estimated thyroid doses to adults are within a dose band of 1−10 mSv and another example location where the estimated thyroid doses to infants are within a dose band of 100–200 mSv.”

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The fallout from Fukushima

Millisievert, or mSv, refers to the measure of radiation dose. “UNSCEAR [United Nations Scientific Committee on the Effects of Atomic Radiation] has estimated that the global average effective dose per person from all natural and manmade sources of radiation in the environment is approximately 3.0 mSv/ year,” the report notes. The WHO assessment will be part of the two-year scientific study that evaluates the radiological consequences of the Fukushima accident, which will be published by UNSCEAR in 2013. In a separate study, UNSCEAR found that although several workers were irradiated (exposed to radiation), “no clinically observable effects have been reported.” Six workers have died since the accident, but the findings say none were linked to irradiation. In a press release, UNSCEAR chair Wolfgang Weiss says the committee now has “a good understanding of the nature and composition of the releases to the atmosphere from the four damaged reactors.”

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As for neighboring countries, the WHO report finds: “It can be concluded that the estimated effective doses outside Japan from the Fukushima Daiichi nuclear power plant accident are below (and often far below) the dose levels regarded by the international radiological protection community as very small.” In the report’s summary and conclusions, the agency also compares the Fukushima accident to the 1986 Chernobyl accident in Ukraine, saying that it expected that the percentage of the lifetime dose beyond the first year would be lower for Fukushima than for Chernobyl, where 30% of the lifetime dose was delivered during the first year, and 70% during the first 15 years. It attributed this to “to the greater influence of the shorter-lived 134 CS [cesium-134] (half-life of two years) compared to 137 CS [cesium-137] (half-life of 30 years).” Concerns as to the safety of nuclear power. Still, public concern about the spread of radioactive material in the environment has yet to be allayed. What cannot be denied, however, is that the imminent threat caused by the heavy

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damage in the Fukushima nuclear station raised serious questions as to the safety standards of today’s nuclear power plants. A year after Fukushima, nuclear safety is stronger, explains Yukiya Amano, director general of the International Atomic Energy Agency (IAEA). "Fukushima Daiichi was a very serious accident, but we know what went wrong and we have a clear course of action to tackle those causes - not only in Japan, but anywhere in the world,” he says in a press release from the agency. The agency cites the inherent weakness of the design, which made the plant vulnerable to natural disasters, along with weak regulatory oversight, inadequate training in responding to serious accidents, and the failure to integrate response plans sufficiently.

Madarame, head of a panel of nuclear safety experts, said in a parliament-sponsored inquiry in February that Japanese officials had relied too much on the country’s technical prowess to adequately factor in the risks, based on a report from The New York Times. He believes that they failed to “thoroughly assess the risks of building nuclear reactors in an earthquakeprone country.” For instance, officials did not give serious consideration to the effects of an electric power outage on the nuclear station, since Japan’s power grid is considered very reliable. IAEA deputy director general Denis Flory reiterates in a video from the IAEA that there is a need for a global nuclear safety framework, and that the implementation of safety standards developed within the agency is imperative.

Flory says working together on a global level can help ensure safety. Video from IAEA

Further, Amano advocates “a culture of constant vigilance and improvement” and warns that “complacency can kill.” Operator and regulator are responsible for safety. Haruki

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The head of the Department of Nuclear Safety and Security adopts the view that while the operator—in this case, the Tokyo Electric Power Company (TEPCO)—is responsible for the safety of the plant, there must also be strong and independent

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regulators with the technical and scientific competence. As in the Fukushima accident, he maintains that the magnitude of the effect could have been minimized had scientific knowledge been available, which would result in, say, the wall being higher

nuclear power. Rather, it underscores the importance of periodically reevaluating plant safety in light of dynamic external threats and of evolving best practices, as well as the need for an effective regulator to oversee this process.”

Caruso explains the purpose and goals of the IAEA Nuclear Safety Action Plan in light of the lessons learned from the Fukushima accident. Video from IAEA

or the doors being “watertight” to prevent flooding within the building. Nuclear policy experts James M. Acton and Mark Hibbs of the Carnegie Endowment for International Peace posit in their paper, “Why Fukushima was Preventable,” that had TEPCO and Japan’s regulator, the Nuclear and Industrial Safety Agency, followed international best practices and standards, then the two bodies might have seen the possibility of a massive tsunami affecting the plant. Further, had the design of the plant been “upgraded in accordance with state-of-the-art safety approaches,” then the plant would have withstood the onslaught of the tsunami. More importantly, the authors argue: “In the final analysis, the Fukushima accident does not reveal a previously unknown fatal flaw associated with

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In light of the accident, the IAEA held a ministerial conference with the goal of paving a way to strengthen nuclear safety worldwide. From the insights gleaned from the conference, the IAEA Action Plan on Nuclear Safety came into existence. Gustavo Caruso, special coordinator for the IAEA action plan, says in an IAEA video that the 12 actions in the plan are aimed to address the vulnerabilities of nuclear power plants in light of the Fukushima accident, to improve emergency preparedness and response programs, and to assist countries embarking on nuclear programs, among others. No to nuclear. With the experience of Fukushima, governments around the world are already rethinking their policies on nuclear power, with some choosing to abandon nuclear energy altogether. The “Energy Roadmap 2050” of the European Commission says: “Since the accident in

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Fukushima, public policy on nuclear energy has changed in some Member States while others continue to see nuclear energy as a secure, reliable and affordable source of low-carbon electricity generation.” ‘In the

“World Energy Perspective: Nuclear Energy One Year After Fukushima,” a report from the World Energy Council, Italy has decided to scrap its prior plans to reintroduce nuclear power, while the Swiss final government plans to analysis, the gradually decommission its Fukushima five nuclear power plants accident does not between 2019-2034.

As early as May last year, Germany decided to phase out all of its nuclear reveal a previously power plants by 2022, BBC reports, making it unknown fatal flaw Many staying the course. the biggest industrial Many, however, have chosen associated with power to turn its back to stay the course. The World nuclear power’ on nuclear energy. AntiNuclear Association (WNA) nuclear sentiments have provides a list of 28 countries ~ James M. Acton and won across Germany, but Mark Hibbs, Carnegie that maintain support for Endowment for now grid operators are nuclear programs, including International Peace saying that the country Argentina, Brazil, Czech must now invest tens of Republic, Finland, Hungary, billions of euros in its Romania, Russia, Slovakia, power grid in the next 10 years to avoid an South Korea, Spain, Sweden, Ukraine, electricity shortage, Reuters reports. In the China, Taiwan, India, and the United switch from nuclear to renewable, German Kingdom, to name but some. Chancellor Angela Merkel says there is no turning back despite the cost. Global intelligence and advisory firm Ergo notes that the majority of European In “Scenarios for Phasing Out Nuclear countries with a nuclear industry have Energy in Germany” from political decided to move forward with or even foundation Friedrich Ebert Stiftung, increase their investment in their Germany’s exit from nuclear energy respective nuclear programs since poses some risks, but also presents a Fukushima. Many policymakers believe the number of opportunities. The study benefits of nuclear power (greater energy shows that “electricity prices for private independence, low carbon footprint, high households will be only slightly affected production value) outweigh the safety by withdrawal,” while electricity prices for and health risks, based on the firm’s industries and companies will increase report, “Nuclear Power After Fukushima: “only temporarily.” On the other hand, the European Fallout.” carbon dioxide emissions of the energy sector may rise “depending on the timing of Ergo concludes Fukushima serves as the exit from nuclear energy.” a reminder of the dangers of nuclear power, and yet in spite of this, there is no In countries such as Italy and Switzerland, indication that the global nuclear energy public sentiment was similar. According to industry will die out any time soon, with 60

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countries expressing interest in developing a nuclear power industry. In fact, Hooman Peimani, head of the Energy Security Division and principal fellow at the Energy Studies Institute at the National University of Singapore, argues in a paper submitted to the 2012 Pacific Energy Summit that Asia will continue to be “the main arena for expanding the use of nuclear power.” Reasons for the region’s interest in nuclear power are cited as: energy security concerns, geopolitical considerations, financial imperatives, desires to mitigate global warming, and opportunities to benefit from exporting nuclear technology. As the world’s largest energy consumer—accounting for 45.2% of 2010’s global energy consumption—the region will be seeing the need to diversify its energy mix to include non-fossil energy, particularly nuclear power. The World Energy Council report suggests the accident in Fukushima has “not so far led to a significant retraction in nuclear power programmes in countries outside Europe, except Japan itself.” It has, instead, encouraged greater attention to safety and regulation, as well as technological and operational improvements. Post-Fukushima plans. Without a doubt, Fukushima scarred the already controversial nuclear power industry. The accident raised

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questions in the United States Congress about its possible implications for nuclear safety regulation, U.S. nuclear energy expansion, and radioactive waste policy, according to a May 2011 Congressional Research Service report. However, the Obama administration reiterated its support for the expansion of nuclear energy in the country as part of its clean energy policy. France, meanwhile, is the most reliant on nuclear power, which supplied 74% of the country’s energy needs in 2010, based on data from the World Nuclear Association. As a result, the country has the cheapest, lowest carbon electricity in Europe. The World Energy Council report shows France will continue to “support nuclear power while carrying out European Union stress test” and see how it can “increase the role of renewables.” With rapid industrialization and a higher standard of living, demand for electricity in South Korea is increasing, but with both limited domestic resources and renewable energy potential in the near future, nuclear energy is still an option. Dr. Dohee Hahn of the Korea Atomic Energy Research Institute says in “Korean Perspective on Nuclear Energy after Fukushima Accident” that the nuclear promotion policy of the country remains the same even after Fukushima, and adds that a higher level of safety must be ensured for the “expansion of nuclear energy utilization.”

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The future of nuclear energy in Japan, however, is uncertain. In a parliamentary inquiry in May, Japan’s prime minister at the time of the Fukushima accident said the country should do away with nuclear power, since the disaster almost pushed the country into “national collapse.” The New York Times reports former prime minister Naoto Kan’s warning that the “politically powerful nuclear industry” is trying to push the country back to nuclear power.

and is being kept under control.” Further, the mid- and long-term plan prepared in cooperation with the Japanese government include the decommissioning of Units 1 to 4. Nevertheless, as outlined in “Japan’s Challenges Towards Recovery” from the Ministry of Economy, Trade and Industry, the country has yet to hurdle the containment of radioactive substances

IAEA Director General Yukiya Amano speaks at a ceremony in Vienna commemorating the first anniversary of the Great East Japan Earthquake, and expresses his sympathy over the tragedy. Video from IAEA

“Experiencing the accident convinced me that the best way to make nuclear plants safe is not to rely on them, but rather to get rid of them,” Kan says. Conditions are equivalent to a cold shutdown. In TEPCO’s “Fukushima Daiichi – One Year Review,” the company is said to have “achieved conditions equivalent to a cold shutdown” as of December 2011. “This is the state where the inside reactor temperatures of Units 1 through 3 have decreased to approximately below 100 degrees C,” the company explains, “and the release of radioactive materials has been significantly suppressed

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in dust, debris, and vapor; rigorous and intensive monitoring of radioactivity levels; the task of ensuring the safety of farm produce, drinking water, and industrial products; and the decontamination in Fukushima Prefecture, which includes replacing the soil in school fields, farmlands, and parks, as well as the use of high-pressure water cleaners for roofs. To be sure, it will be a continuing challenge not only for Japan, but the rest of the world as well, in terms of balancing the need to secure energy supply, while, as Amano says, harnessing it “as safely as humanly possible.”

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Mubarak gets life for protest deaths Former Egyptian President Hosni Mubarak has been sentenced to life imprisonment by a local court, for complicity in the killing of protesters during the country's uprising last year. The fallen leader was being transferred to prison when he suffered a "health crisis" en route. Mubarak had been held in the International Medical Centre outside Egypt's capital since the start of his trial last August due to his poor health. Reports say that Mubarak has now been admitted to the hospital in Tora prison. People rejoiced as former Interior Minister Habib al-Adly was also handed a life sentence along with the former president, but tensions rose when it was announced that the four senior security aides also on trial were acquitted. Furthermore, Mubarak and his sons were also acquitted on separate charges of corruption. However, the two sons will remain in detention, as they are still scheduled to go on trial on charges of stock market manipulation. The 84-year-old Mubarak is the first former leader to be tried in person since the beginning of the Arab Spring. Zine al-Abidine Ben Ali of Tunisia was found guilty in absentia of drugs and gun charges, Muammar Gaddafi of Libya was killed by rebels, and Ali Abdullah Saleh of Yemen

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has been granted immunity from prosecution in return for stepping down from power.

Syria conflict: Annan warns 'all-out war' approaching UN peace envoy Kofi Annan has warned that Syria is slipping dangerously closer to all-out war, citing the Houla massacre – during which 108 people were killed in a gruesome manner, causing governments around the world to expel Syrian ambassadors and diplomats in their countries – as a marker that the crisis was now at its "tipping point." In fact, last Friday the UN Human Rights Council voted overwhelmingly to condemn Syria over the issue; though Russia voted against the measure, and the Philippines was absent and did not vote. The Council has also requested the UN Commission of Inquiry to conduct a “comprehensive, independent, and unfettered special inquiry” into the El-Houleh killings. Russia's President Vladimir Putin has thus far resisted diplomatic pressure to change stance, and is calling for more time to be given to Mr. Annan's six-point plan. Prime Minister Sheikh Hamad bin Jassim al-Thani of Qatar has called for a time limit to be set for Mr. Annan's mission, as well as for the plan to fall under Chapter

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7 of the UN charter, in order to enable the use of force.

Leon Panetta: U.S. to deploy 60% of navy fleet to Pacific According to Defense Secretary Leon Panetta, the U.S. is planning to relocate a large number of its warships to the Asia-Pacific region in the news couple of years. "By 2020, the navy will reposture its forces from today's roughly 5050% split between the Pacific and the Atlantic to about a 60-40 split between those oceans." He goes on to say that the US Navy presence "will include six aircraft carriers in this region, a majority of our cruisers, destroyers, combat ships and submarines." The move is likely in accordance with the Obama administration's "pivot to the Pacific" rebalancing strategy; last November, the U.S. President even stated that the Asia-Pacific region was a "top priority" of the world power's current security policy. Mr. Panetta assured that the shift was not a play to contain or control Chinese power. In spite of the declaration, China has already indicated it is unhappy with the turn of events, and is urging AsiaPacific countries to handle their own affairs. China is involved in long-running territorial disputes with several allies of the U.S., including the Philippines.

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Point and Click Through the Fortress of Bureaucracy Social media connects governments and citizens like never before By Tanya L. Mariano

STRATEGY POINTS The World Wide Web has been evolving from a platform for passive surfing for information to an interactive portal that encourages user feedback and the creation of new content Governments around the world are harnessing the wide reach and collaborative power of social media channels, enabling them to foster citizen engagement and participation on a massive scale In the Philippines, low Internet penetration â&#x20AC;&#x201C; 33% of the population â&#x20AC;&#x201C; hinders widespread adoption.

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nyone who has had to deal with government agencies will tell you that, most of the time, you have to jump through hoops in order to get a simple response to pretty straightforward requests. But with governments around the world adopting the use of social media channels to connect with their citizens, the walls of the impenetrable fortress of bureaucracy are slowly eroding, a trend that even the United Nations recognizes. In the latest update of its e-Government Survey, released in February 2012, the United Nations cites the power of social media to help governments promote

transparency, reduce costs, and improve public services. “As social media enable two-way communication in real time, government agencies can quickly engage citizens as co-producers of services, not just passive recipients,” the report observes. The report found that government websites of 78 out of 193 Member States provide a “follow us on Twitter of Facebook” link, and that developing countries represent more than half of this number. The following table provides the complete list:

LIST OF COUNTRIES WITH GOVERNMENT WEBSITES THAT INVITE USERS TO ‘FOLLOW US ON FACEBOOK OR TWITTER’ AFRICA Cote d’Ivoire Democratic Republic of the Congo Equatorial Guinea Ethiopia Ghana Guinea-Bissau Morocco Nigeria Somalia South Africa Sudan Tunisia

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ASIA

EUROPE

Afghanistan Argentina Azerbaijan Belize Bahrain Brazil Brunei Darussalam Canada Georgia Chile Iraq Colombia Israel Cuba Japan Dominican Republic Malaysia Ecuador Mongolia El Salvador Oman Grenada Pakistan Guatemala Philippines Honduras Qatar Mexico Republic of Korea Panama Saudi Arabia Paraguay Singapore Peru Thailand United States U.A.E. Uruguay Uzbekistan Venezuela Antigua and Barbuda

OCEANIA

Kiribati Andorra Austria Vanuatu Belgium Croatia Finland France Germany Greece Hungary Italy Latvia Liechtenstein Lithuania Luxembourg Netherlands Norway Portugal Russian Federation Spain Sweden Switzerland Ukraine United Kingdom

Source: “United Nations e-Government Survey 2012,” page 109

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40 With more and more people utilizing social networks – Facebook has over 901 million monthly active users as of March 2012 and Twitter recently reached the 500-million mark – it makes sense for the public sector to heed the advice that marketers have long been privy to: go where your audience is. Social media efforts of governments around the world. Australia is recognized as a leader when it comes to utilizing Web tools to enhance public service delivery. Their official website makes connecting with the government very simple, by allowing users to register and use one account to access information and services from over 900 Australian Government websites plus several state and territory resources. It also provides a directory of official social media accounts of public servants and agencies on Facebook and Twitter, as well as government blogs, YouTube channels, and Flickr accounts.

Singapore in 2006 launched REACH, short for “reaching everyone for active citizenry @ home,” an agency that leads the country’s citizen-engagement initiatives. The move signals a shift from simply receiving public feedback to promoting citizen participation and involvement. As indicated in the e-Government Master Plan 2011-2015, Singapore plans to further enhance the REACH portal to include alerts on citizen-consultation activities via social networks and mobile apps. In their latest vodcast (video podcast) entitled “Big Book of Changes,” REACH shows how citizen consultations have influenced policymaking and improved services available to the public. FutureGov, a web publication that focuses on modernization efforts in government, education, and healthcare, reports that the Hong Kong Observatory uses microblogging sites Twitter and Weibo, as well as YouTube, to issue weather forecasts and warnings.

The latest vodcast of the Singapore government’s citizen engagement agency, REACH, discusses how consultations with the public have impacted policymaking Source: REACH (reaching every citizen @ home)

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Macon Phillips, New Media Director at the White House, discusses how the federal government and its agencies are using new media channels. Source: Video uploaded to USA.gov, the official U.S. government YouTube channel

As quoted in the report, Dr. Choming Cheng, Assistant Director of the Forecasting and Warning Services Branch, says: “With only 140 characters to use, Twitter is a very efficient communication tool. In case of any major change in weather condition or when we have something interesting to share with the public, it is most convenient to utilize these social media channels.” To date, the Observatory has over 40,000 followers on Twitter and Weibo combined, and around 2,000 subscribers to their YouTube channel. Aside from Hong Kong, FutureGov also reports that, according to Seoul Metropolitan Government CIO Dr. JongSung Hwang, Korea has plans to build a social media center that would integrate information across social media channels in order to make communicating with citizens more efficient. This effort is in response to

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the challenge of monitoring and responding to citizen communication on several nonintegrated platforms. In China, the number of government microblog accounts has reached 50,561 by the end of 2011, an almost sevenfold increase from the start of the year, according to a Chinese Academy of Governance report referenced by Xinhua News. An article in The Economist, however, questions whether the Chinese government’s intentions are driven more by censorship than citizen engagement. The U.S. government and its agencies also have a very strong online presence, utilizing blogs, Facebook, Twitter, YouTube, and other social networking sites. In this video from 2009, White House New Media Director Macon Phillips talks about how the federal government is harnessing new media channels to connect with Americans.

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Social media channels have been used to spread information during emergency situations

To date, the U.S. government has over 40,000 fans on Facebook, 93,000 followers on Twitter, and 33,000 subscribers on YouTube. Social media is also used by a number of agencies in emergency response. The following infographic from Mashable identifies several agencies and crisis management groups that are on Twitter and Facebook, cites several cases that involved the use of social networks during emergency situations, and weighs

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the pros and cons of spreading urgent information via social media. In the Philippines, while President Benigno Aquino III is committed to using new media to connect with Filipinos, Communications Secretary Sonny Coloma says that low Internet penetration – 33% as of 2011 according to “Southeast Asia Digital Consumer Report” by Nielsen (available as a free download upon registration at their website)– is impeding widespread

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"Us Now," a documentary from London-based Banyak Films, explores the possibilities of a collaborative government powered by the Internet

which revealed that there are 24.1 million Facebook users and 4.01 million Twitter users in the Philippines as of mid-2011.

Source: Mashable

adoption both by government agencies and the general public, reports GMA News, quoting Sec. Coloma’s speech at the 5th Internet and Mobile Marketing Association of the Philippines Summit held in 2011. Coloma, however, stressed that the Aquino administration still sees great potential in social media as a tool for governance since Filipinos are heavy users, citing statistics from the Singapore Management University,

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Philippine government agencies that currently use social networks include the Metro Manila Development Authority, whose Twitter account offers updated traffic advisories to its 219,358 followers, and PAGASA-DOST, which broadcasts weather updates to its 213,933 followers on Twitter. Aside from sharing relevant information, both agencies alsorespond to “tweets” from their followers. Internet tools foster collaboration between governments and citizens. The digital age has made it easier for governments and citizens to interact with each other and is rendering traditional one-way communication channels passé. Technology has paved the way towards a future where citizens can just as easily connect with their governments as with their friends and families. The documentary film, “Us Now” by London-based Banyak Films, shares this vision.

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Breaking down the fortress of bureaucracy

To quote from “Government 2020 and the perpetual collaboration mandate: Six worldwide drivers demand customized strategies,” published by IBM Global Business Services, “The interactive nature of today’s Internet is a huge leap beyond what previously consisted of passive ‘surfing’ to gain information. The Web has become easier to use as it evolved into what is now broadly described as ‘Web 2.0.’ It offers richer user experiences that include the opportunity to collaborate online through the creation of new content and vast opportunities for multidirectional information sharing. In a natural progression, citizens and other constituents increasingly expect this same sort of connectedness when they interact with government.”

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The do’s and don’ts of government social media use There are a number of reports that provide guidelines on the use of social media accounts by government officials and agencies. The IBM Center for The Business of Government recently released “Working the Network: A Manager’s Guide for Using Twitter in Government.” The Center for Technology in Government at the University at Albany, SUNY in 2010 published “Designing social media policy for government: Eight essential elements,” which distinguishes between employee use of social media tools for official agency interests, for professional interests, and for personal interests. The Federal CIO Council also released in 2009 a guideline for the secure use of social media by federal department and agencies. For more on social media policies and guidelines, the Social Media Governance website, managed by social media consultant Chris Bordeaux, hosts a database of 214 policies from across several industries. With the huge and still growing number of people tuning in to social media channels, it has become increasingly urgent to implement protocols for the official use of social media channels. Public officials should also be careful with what they post on their personal accounts. Doing so will not only make citizen-government dialogue more fruitful and efficient, but could also prevent the negative impact of social media missteps on a public official’s image, similar to that suffered by Presidential Spokesperson Edwin Lacierda when he criticized Twitter transport groups who were then organizing a strike.

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Google kills 250,000 search links a week Internet search giant Google last week made public its latest online Transparency Report, which for the first time includes a chronicle of upwards of 250,000 requests the company receives daily to take down search results linking to copyrighted material. In recent years the request numbers have soared dramatically; Google says that the amount of requests it receives weekly is now more than the total number of requests received in the entirety of 2009. A huge chunk of the requests deal with links to pirated material; Microsoft leads the companies reporting Google search results that infringe copyright, with more than 2.5 million takedown requests since July 2011. The inclusion of this data in the online Transparency Report is likely Google's way of demonstrating that its current system of handling these types of requests is effective. Last January, the company fought against two congressional bills in the U.S., which would have dealt with copyright infringement by forcing entities such as Google to refrain from linking to questionable sites – instead of relying on Google's process, which abides by the current U.S. anti-infringement law, the Digital Millennium Copyright Act. The said law puts the onus on copyright holders to find irregularities and notify Google

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when it is displaying or linking to pirated content. The controversial Stop Online Piracy Act and the accompanying Protect Intellectual Property Act would have changed the law so that the onus would be shifted to Google.

Flame: Massive cyber-attack discovered Describing it as "one of the most complex threats ever discovered," Russian security firm Kaspersky Labs has uncovered Flame, a malware program at the heart of a massive cyber-attack that has been collecting private data from countries such as Iran, Israel, Sudan, Syria, Lebanon, Saudi Arabia and Egypt. According to Kaspersky's chief malware expert Vitaly Kamluk, more than 600 specific targets were hit; ranging from academic institutions, businesses, government systems and even individuals. The firm further stated that it believes Flame has been operating since August 2010. The research leading to the discovery was carried out in conjunction with the UN's International Telecommunication Union. This is not the world's first instance of targeted malware on a large scale; Stuxnet, for example, targeted nuclear infrastructure in Iran. However, Flame is unique in that it appears to solely collect huge amounts of very sensitive information and not cause physical damage at all. Furthermore, the

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Flame malware code is 20MB in size –20 times larger than Stuxnet. Mr. Kamluk has said the size and sophistication of Flame suggests that it is more likely a governmentbacked project.

Yahoo launches Axis 'search browser' Industry veteran Yahoo has finally joined the browser wars with the release of Axis, a tool designed to enhance Internet searching in the fast expanding mobile web platform. Axis is a stand-alone application that is now available for Apple mobile devices; it is also available for desktops as an addon to more familiar browsers such as Chrome, Explorer, Firefox and Safari. As a visual-rich tool it aims to combine browsing and searching into one experience – using thumbnail images of the actual Web page results instead of displaying just a list of links. Early reviews have been positive, at least for the mobile version of Axis, even as a security issue and an oversight have slightly marred its debut. Yahoo formerly dominated the search market, but now it is in second place, far behind Google; Axis may help to narrow the gap. It is currently in second place in the search market; with Google controlling around 64%, Yahoo (powered by Bing) about 16%, and Bing itself accounting for 14%.