2nd SONA OF PRES. BENIGNO AQUINO JR.:THE STATEMENT: WALA NANG WANG-WANG

On the 25th day of July 2011, President Benigno Aquino Jr. held his Second State of the Nation Address (SONA) at Batasan Pambansa. He stated his "Wang-Wang" project that resulted into good outcome. He explained that it did not only eliminate most of the "Wang-Wang" minded politicians but it also helps our country to improve and aimed progress in our economy. Also he said that this project will boost the business industry, ensuring that the people’s money is in the rightful place that will give rise to the establishment of infrastructure thus, creating job opportunities for the Filipinos

During the campaign period, Pnoy exclaimed that “kung walang corrupt, walang mahirap”. This is how he got the sympathy of the Filipino people and finally got elected. According to him our country being free from corruption will make its own way to progress.

Among his accomplishments he cited in his SONA, is the decline of the self rated hunger to 15.1 percent, the high records on the Philippine stock market and, the improvement of credit ratings which means low interest rate on our debts.

“Personal talaga sa akin ang paggawa ng tama, at ang pagpapanagot sa mga gumagawa ng mali—sino man sila. At hindi lamang dapat ako ang namemersonal sa usaping ito. Personal dapat ito sa ating lahat, dahil bawat Pilipino ay biktima nito.” – this statement is a frontal attack to the past administration, emphasizing his determination to remove the corruption and his persistent search on the anomalies that have been occurred before and still occurring until now. During his administration, corruption cases committed by arroyo and government officials under her were discovered and exposed.. According to him those corruption issues must not let go, forget and even forgive. Corruption even occurred in other countries and the removal of it is very impossible or remote to reality, but the point here is his performance cannot be highly measured by the number of corruption cases that have been exposed to the public.

He made mention also the great number of foreign investors who are willing to participate in exploring and strengthening the country’s oil and natural gas resources.

He noted the increase of 15.6 percent in rice production was a result of the government irrigating an additional 11, 611 hectares of fields and rehabilitating around 212,000 hectares of land. The said accomplishment is a good start to their goals: to put an end the over importation of rice and; the rice self sufficiency, ensuring that the rice served on every Filipino’s dinner table is planted here, harvested here and purchased here


Another, is the decline of unemployment rate to 7.2 percent was the result of 1,400,000 jobs created last year. With regards to this, the government is looking forward to address the job mismatch occurring today.

Curricula will be analyzed, reviewed, and made further improvements for the students to experience the quality of education they needed thus preparing them for life. This will also be helpful to them in choosing their right career.

The president is also assured the nation that the country’s Armed Forces would be ready to respond to threats of invasion as upgrades and modernization of equipment will soon be at arm’s reach. In accordance with the Armed Forces, Pnoy mentioned that he started the housing project for the police and soldiers to prevent corruption amongst them.

These are the things the Pnoy Administrations tells the public, but is this the real score? During his first year as Philippine President, there are reported news happened. It makes public think that his first year failed. That he broke his promises. He promised to prosecute human rights violators and put an end to extrajudicial killings. But his first year as president registered higher incidence of extrajudicial killings which totaled to 48. In the labor sector, five workers and unionists, three urban poor were killed, compared to one under Arroyo’s first year in 2001.

Another one is the rich became richer. The richest Filipinos increased their net worth by 39 percent totaling to US$22.8 B from US$16.4 B in the previous year. On the other hand, the government – in order to boast about the decreased number of poor Filipinos – changed the poverty threshold from P54 a day to only P46 a day. Despite this, the number of poor Filipinos remained high at 23.1 million. The controversial Conditional Cash Transfer (CCT) – a program which is more of a remedy than a solution – only lessened the incidence of hunger temporarily but failed to diminish the number of poor. High prices and low wages were being seen in our economy since first year. There are a lot of incidences that make every Filipino doubt on what Pnoy can do for our country

PNoy has miserably failed. His promised of straight path did not uplift the lives of the majority of people whom he called his BOSS. His boss were sent deeper into destitution, the poor were driven to streets to dwell and its workers to wallow from lower wages whose value keeps diminishing every day.

A year after, if ever there was straight path that PNoy government walked on, it was the path that was not clearly for majority of the Filipinos but for foreign capital and the richest few Filipinos. One year is over, and the direction the country is heading is apparently becoming no difference from the direction that the Arroyo administration took that he promised to change, a promise that catapulted him to Presidency. He failed in his first year.

Thus, in his second SONA, he has every chance and power to deliver not just the rhetorics but effect to realize the demands of the basic sectors: legislated substantial wage hike, clear and regular employment programs, genuine agrarian reform, prosecution of human rights violators and social services for majority of the Filipinos. These demands are just and undoubtedly possible if only PNoy will follow the straight path he promised to the people.

As student's we can't say we don't believe the entire thing the President Noynoy Aquino said ,it’s just we can't feel the effects of his administration. We can still see a lot of people who are not eating 3 times a day. There are also a lot of youth who are out in the street and are not studying due to poverty. Many Filipinos are still unemployed and electricity and water bills are still high. We guess that those who are just in power and those who are better off in life felt the effect of our so called developing economy but for regular Filipinos who just eat 3 times a day and has a regular job they can't feel the effects of our economy due to scarcity of resources that they have. Pnoy's motive of the termination of wang-wang gives Filipinos especially those who are in power discipline not to abuse their authority but the question is are they following it? Does wang-wang is the solution to eliminate poverty and eliminate our debts to other country? But try to think of it, big things really start to be small. __MAE:)

"RP National Budget for 2011'' :D

"Tungo sa Tuwid na Paggugol" - as the introduced outlay by the administration is described to be "judicious" and last year’s proposed budget of 1.75 trillion was decreased because it’s using zero-based budgeting to allow a prudent and responsible management of public expenditures. Pork barrel funds of congressmen and senators will stay, and that education, as always, will have the lion’s share.

The four top general policies of the 2011 budget are (1) transparency, accountability and good governance, (2) delivery of basic services (education, public health, etc.), (3) economic services like infrastructures and (4) stable and safe environment.

The 2011 budget of P1.645 trillion is known as the "Reform Budget." It reflects the President's commitment to lift the nation from poverty through honest and effective governance. The budget represents 18.2% the projected Gross Domestic Product (GDP) for 2011. The government projects a 5% GDP growth rate for next year.

The budget includes programmed new appropriations of P933.5 billion and P711.5 billion of automatic appropriations.

The latter, the Department of Budget and Management (DBM) pointed out, includes debt service and interest payments of P357.1 billion; net lending of P15.0 billion; Internal Revenue Allotment (IRA) of P286.9 billion; and government contribution for employees’ retirement and life insurance premiums of P22.4 billion.

Some says that even if the budget was increased by 6.8 percent from last year’s budget of P1.541 trillion, the government’s plan to increase allocation for interest payment overwhelmed the purpose in addressing gaps in social services for the poor.

The education sector will receive the lion’s share at P207.3 billion which is 18% higher than last year. This will allow education officials to hire 10,000 more teachers, build 13,000 more classrooms, and increase the funds available for scholarship grants.

The amount for maintenance and other operating expenditure of the state colleges and universities (SUCs) were restored to their 2010 levels - between P110 and P140 million pesos.

The 2011 budget allocated P206.3 billion for basic education from this year’s P172.9 billion, which the National Union of Students of the Philippines (NUSP) said is P100 billion short of what is needed to address the current problems.

The conditional cash transfer program under the Department of Social Welfare and Development amounting to 21.9 billion pesos passed through the bicameral committee without cuts. The government is also targeting 2.3 million of the 4.3 million indigent households for the conditional cash transfers program. All indigent households will be given coverage by Phil health.

The government cut the budget for health by 3.5% from this year’s P40 billion to P38.6 billion. But the administration countered that the proposed allocation gives P2.5 billion for expanded immunization program, P5.7 billion for maternal and child-care facilities and P1.5 billion for potable water supply in waterless communities.

A total of P143 billion is allocated for infrastructure programs, while P15 billion is allotted for the government’s private-public partnerships (PPP), which will be found in the budgets of the Department of Agriculture, Department of Transportation and Communication, and Department of Public Works and Highways.

The government expects to generate P1.41 trillion revenues, P1.27 trillion or 90% comprising of taxes. The remaining P137.2 billion will be derived from non-tax sources such as fees and charges, income and foreign grants.

The government targets a lower budget for 2011 at P290 billion or 3.2% of GDP, lower than the 2010 budget deficit of P325 billion as it pointed out the plugging of tax leaks and revenues from public-private partnerships as ways to lead in the deficit. The deficit will be financed by P257.3 billion of domestic borrowings and P49.5 billion of foreign borrowings.

The 10 departments that will get the large piece of the proposed budget are: Education (P207.3 billion), Public Works and Highways (P110.6 billion), National Defense (P104.7 billion), Interior and Local Government (P88.2 billion), Agriculture (P37.7 billion), Social welfare and Development (P34.4 billion), Health (P33.3 billion), Transportation and Communication (P32.2 billion), Agrarian Reform (P16.7 billion), and the judiciary (P14.3 billion).

The following sectors receive budget cuts are: agriculture and agrarian reform (falling by P23.1 billion or 26 percent), communication, roads and other transportation (P7.9 billion or 5.2 percent), water resources development and flood control (P4 billion or 21.4 percent), and power and energy (P3.4 billion or 65.5 percent).

The budget chief said the lack of heavy infusion of resources on such services is hampering the Philippines’ commitment to the Millennium Development Goals (MDG).

The MDGs are part of the country’s commitments to the United Nations Development Program, which comprise of eight goals that touch on basic social issues.

These goals include (1) the eradication of extreme poverty and hunger, (2) providing primary education services to all, (3) promoting gender equality and empowering women, ( 4)reducing the incidence of death among children,(5) improving maternal health, (6) fighting diseases like HIV/AIDS and malaria, (7) ensuring environmental sustainability, and (8) developing a global cooperation for development efforts.

The Palace has been in the process of finalizing the details of the P1.645-trillion budget for 2011. It has been a tradition that the President submits his proposed budget a month after he has made his SONA. -----DGD

Credit Rating Agencies ;)

Credit Rating Agencies play a vital role in the financial market. These agencies may be in the form of companies, cities, non-profit organizations, or national governments. Its primary function is to provide relevant and assessed information to investors to help them generate a sound decision whether to accept or reject an investment. They also measure the creditworthiness of a bond or other debt securities issuer entity in order to protect the interest of the creditors. The overall function of these agencies is to make accurate assessments of companies as an investor and debtor.

Although credit rating agencies provide a great help in the financial market, they are not exempted from conflict and other ethical issues. Some of these are: (1) they sometimes mislead the investors by rating the structured financial products in an aggressive way (2) they sometimes provide an erroneous model and parameters thus failing to determine the correspondent risks of financial products; (3) corporate governance issues like failure of top management to value risk; and (4) they often use unsolicited ratings to gain market share.

A company that issues credit scores for individual credit-worthiness is generally called a credit bureau (US) or consumer credit reporting agency (UK). While here in the Philippines, there is only one domestic credit rating agency that was accredited by the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission, and this the Philippine Rating Services Corporation (PhilRatings). It is a founding member of the Association of Credit Rating Agencies in Asia, which now counts twenty-five domestic credit rating agencies in the Asian region as its members. PhilRatings actively participates in the development of the Philippine capital market by implementing a national credit rating system.

The Bangko Sentral ng Pilipinas has approved the recognition of PhilRatings as a domestic credit rating agency for bank supervisory purposes. PhilRatings is thus the first domestic CRA to be accredited by the BSP. Eligibility criteria for recognition include, among others: a minimum 5-year track record in issuing reliable and credible ratings; a pool of experienced analysts; competent and experienced Board of Directors; an established rating methodology; and that the CRA has an established record of independence, objectivity, and transparency.

Investors make use of information from a single agency or from multiple rating agencies. Investors expect credit rating agencies to provide significant information based on significant analytical methods and accurate statistical measurements. Investors also expect their investee to abide by the rules and regulations set forth by governing bodies, and at the same time comply with reporting procedures through proper disclosures imposed by securities industry governing agencies. Through the analyses and assessments provided by various credit rating agencies, investors will have a better understanding in the risks and opportunities attached in their investment options and will be able to form an informed decision on what best investment venture to select.

For them, credit rating agencies increase the range of investment alternatives and provide independent, easy-to-use measurements of relative credit risk; this generally increases the efficiency of the market, lowering costs for both borrowers and lenders. This in turn increases the total supply of risk capital in the economy, leading to a stronger growth. It also opens the capital markets to categories of borrower who might otherwise be shut out altogether: small governments, startup companies, hospitals, and universities.

Most credit rating agencies follow one of two business models: "subscriber-based" business model and "issuer-pays" business model. The subscriber-based business model is where the CRA would not distribute the ratings for free but would instead only provide the ratings to subscribers to the CRA's publications. Subscription fees would provide the bulk of the CRA's income. The issuer-pays business model under this business model, while subscribers to the CRA's services are still provided with more detailed reports analyzing an issuer, these services are a minor source of income and most ratings are provided to the public for free.

The transactions that are taking place in the financial markets are very complicated, the role of these agencies is to minimize those conflicts and help establish a good relationship between two parties (investee - investor; debtor - creditor).--ban.^^

Fundamentals of Macroeconomics :))

Like every field in education, macroeconomics has its own fundamentals and it is much better if you will supply up your brain with the macro knowledge understanding first the basics.Studying macroeconomics is like taking a picture of the whole economy in your mind. In short you have to consider the "aggregates."







=Macroeconomic Fundamentals=




• Productivity and Growth




“What determines an economic growth?”

The aggregate output includes the total goods and services that a country produced in a given period of time, flow of investments, the aggregate savings and net exports of a country ( exports must exceed imports). All of these contribute to the growth of a country. Thus, to measure the entire output of the economy, Gross Domestic Product (GDP) is the most comprehensive estimate. GDP has two variants: nominal and real GDP. When nominal GDP is adjusted, it gives the real GDP. Gross Domestic Product (GDP) - equals the total value of goods and services produced in a country during a year. Economic growth is, therefore, a sustainable increase in the amount of goods and services produced in an economy over time. Development theories have started to look beyond GDP per capita as a sole measure of progress and to think about other measures, such as health-care availability, educational attainment, and equality of income distribution.




• Unemployment and Inflation




In macroeconomics you will have a better picture of the ups and downs of the economy, these two phenomena (Unemployment and Inflation) affect greatly the economic activities in the country. Unemployment Rate- it is a key indicator of the condition of the labor market. It is defined as the percentage of people willing to be employed at the prevailing wage rate, yet not capable of finding job opportunities. A low unemployment rate is an indication of good economic performance. Thus, keeping workers employed is always a chief concern of economic policymakers. Unemployment rises during recession and falls during expansions. Inflation is an increase in the overall level of prices measured by the consumer price index- shows how the value of money changes over time. Inflation is one of the primary concerns of economists and policymakers because it imposes a variety of costs on the economy. When the inflation rate is high, the real values of money oppress. People on fixed incomes, cannot keep up with the rising cost of living. Inflation also sorts out wealth among the population in a way that has nothing to do with advantage. When there is a sustained period of inflationary pressure, lenders and workers lose while borrowers and employers benefit because many work and loan contracts in the economy are specified in terms of money. Another cost of inflation is that it discourages saving. The income tax treats the nominal interest earned on savings as income, even though part of the nominal interest rate merely compensates for inflation. This reduces the after-tax real interest rate, and hence makes saving less attractive.




• Aggregate Supply and Demand




Aggregate supply refers to the sum of all goods and services that firms are willing to sell at all possible price levels. Imagine an aggregate supply curve which is usually upward-sloping. Such curve is a result of the concept that quantity supplied rises as the price levels rises. This only explains that inflation is advantageous to firms. In order for firms to survive in a competitive economy in the short run, they must try to seek for profits. If prices are higher, firms are motivated to increase their outputs to produce higher profits. But the mere fact that you have millions of competitors and there is only a limited number of households buying for goods and services, the increase in outputs will lead to an economic surplus.




Aggregate demand is the total amount of goods and services that will be purchased at a given price level. No wonder why the curve is drawn as downward sloping because households would tend to buy more good and services when prices are lower. Aggregate demand comes from four demand sources (personal consumption, investments government spending and net exports). Furthermore if prices will continue to decrease and households demanded more, there will always be shortage in the economy.




• General Equilibrium

An economy is said to be in equilibrium if it shows the balance between opposing forces, whereas disequilibrium reflects lack of such balance. One important thing that equilibrium points out is the price stability. CPI (Consumer Price Index) is the most commonly used to measure the overall price level of the economy. It is the measure of the cost of different types of goods bought by an average consumer. When the inflation is high, the consumer’s purchasing power reduces




• Government Policy

Government plays an important role in the economy. Its function is to regulate the economic activities of the country. Here are the policies that they have implemented:




o Fiscal policy is the generation of revenues for the government. Taxes are the main source of income for the government. These taxes are imposed to the citizens of a country; it affects the economy, in terms of their income. These taxes are based from people’s income. Another is that taxes are imposed to goods and services example is the VAT.




o Monetary Policy - Second macroeconomic policy instrument is the monetary policy. It helps the government in managing nation’s money, credit and banking system.







o Exchange Rate Policy - This policy tackles the supply and demand function in exchange rates.




o Employment Policy - This was implemented for the government able to manage the employment level of the country.