Saturday, February 23, 2013

Malaysia adopts 'wait-and-see approach' on Sabah standoff

Malaysian security forces have adopted a cautious wait-and-see stance in the ongoing standoff with a group of armed Filipinos in Sabah.

Malaysian Deputy Prime Minister Tan Sri Muhyiddin Yassin said their government is aiming for a peaceful solution, adding that it was important to resolve the issue without bloodshed.

Claiming to be followers of the Sultan of Sulu, a group of around 300 Filipinos, some of whom were reportedly armed, had arrived in Sabah on February 9 and had engaged Malaysian forces in a standoff.

"The people are seeing how well we can manage any situation,” Muhyiddin said in a report of the news site The Star.

He admitted though that the standoff may have an effect on Malaysia's upcoming general elections.

Malaysian security forces had cordoned off the remote seaside area where some 150 gunmen who are followers of Kiram crossed through, The Star reported.

On the other hand, the Philippines has deployed six naval ships to Tawi-Tawi to prevent other relatives of Kiram from crossing the sea border.


On Thursday, the Malaysian government gave a 48-hour ultimatum to the Filipinos holed up in Kampung Tanduo to withdraw peacefully.

The Department of Foreign Affairs had requested Malaysia to extend their deadline to Tuesday.

Raja Muda Azzimudie Kiram said on Friday that his Royal Army will be staying in Sabah and even have plans to build a house in northern Borneo.

Kiram is demanding to open up the talks on the Sabah dispute which is a territory both claimed by the Philippines and Malaysia.

The Sultanate of Sulu, whom Kiram is heir to has been leasing Northern Borneo to Europeans since the 1870s.

Kiram still receives a yearly compensation from the Malaysian government up to this date for the supposed “leasing” of the disputed territory.

President Benigno Aquino III earlier asked the armed group to give up peacefully because their actions may lead to an unwanted confrontation. However, Kiram shunned such requests from Malacanang.

Aquino said that Philippine government is continuously in touch with the Malaysian government and the Sultan's family to resolve the situation peacefully.-GMA News (February 23, 2013 11:30AM)

Only brand new ships for Philippine Navy upgrade: DND official

A ranking Department of National Defense official says the acquisition of second-hand frigates is no longer an option for the Philippine Navy.

Fernando Manalo, DND undersecretary for finance, munitions, installation and materiel, said recently that acquiring such vessels from foreign countries will ultimately be costlier than buying new ships.

Given this, Italian-made "Maestrale" frigates are no longer being considered for possible acquisition by the Philippines. "It’s no longer being evaluated," Manalo said.

The "Maestrale" was earlier touted by the DND as the next ships to be acquired for the Navy due to its credible missile and anti-submarine capabilities.

Five other countries have expressed intentions to sell modern frigates and offshore patrol vessels to the badly equipped Philippine navy: the United States, Israel, Croatia, South Korea and Australia. All vessels being offered by these nations are brand new.

The Philippines is in the market for two modern and powerful frigates in order to enhance its maritime protection capabilities, especially in the West Philippine Sea, where territorial disputes with China have arisen.-Interaksyon (February 23, 2013 2:14PM)

Container truck crash in Indonesia kills 16

Police say a container truck has slammed into several vehicles in central Indonesia, leaving 16 dead and injuring several others.

Police spokesman Col. Martinus Sitompul said the accident occurred Saturday in Sukabumi, a hilly town in West Java province.

He said the truck driver appeared to have lost control when his brakes failed, and hit a minivan and dozens of motorcycles near a factory before crossing the road and hitting a number of cars before slamming into several houses.

At least 16 bodies were recovered and more than 10 injured people were taken to a nearby hospital. Most of the victims are factory workers who were on their way to work by motorcycle.

Safety standards on Indonesian roads are poor and hundreds of people die in accidents every year.-Inquirer (Philippine Daily Inquirer (February 23, 2013 12:52PM)

Japan supports PH's move to resolve sea row with China before U.N. tribunal

Japan has thrown its support behind the Philippines' move to resolve its dispute with China over territiories in the West Philippine Sea through the United Nations arbitration tribunal, according to the Department of Foreign Affairs (DFA). 

The DFA on Friday said Japan had expressed its support through a delegation that went to the Philippines to discuss maritime cooperation between the two countries that would help boost Manila's capability in protectiing its territories.  

“Both sides shared the recognition that the issues in the South China Sea is a matter of great interests for the whole international community being directly related to regional peace and stability, and the the issue should be settled peacefully in accordance with the relevant  international laws such as the Unclos,” Japan and the Philippines' joint statement said.

The Philippine delegation is headed by Gilberto Asuque, DFA assistant secretary, as chairperson and Henry Bensurto, DFA special assistant, as co-chair. 

The Japanese delegation is led by Kenji Kanasugi, deputy director-general for Southwest and Southeast Asian Affairs of the Ministry of Foreign Affairs. 

The DFA said that during a closed-door meeting, Japan's representatives said the country had expressed its intention to continue supporting the Philippine Coast Guard's capacity-building. 

It was earlier reported that Japan would grant the Philippines a $10-million soft loan for the purchase  of 10 brand new multi-role response vessels that would be deployed to the West Philippine Sea.

Japan and the Philippines' joint statement, however, did not mention if the loan was discussed during the dialogue.

It said the delegations from the two countries exchanged views on programs and actions "to promote cooperation in the maritime field, particularly in maritime security, freedom of navigation and safety at sea."

"They also exchanged views on regional maritime issues and shared the best practices in efforts to combat piracy, especially on the maritime law enforcement capabilities of countries near piracy-prone areas," the statement added.

Regarding the issues on piracy and armed robbery in Asian countries and Somalia, the two countries agreed to further strengthen their efforts in addressing the said problems through the utilization of the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia and other frameworks.

Japan will also assist the Philippines in helping other countries near piracy-prone areas enforce maritime laws, the Japanese Embassy in Manila said.

Japan also has its own territorial dispute with China over islands in the East China Sea, which Japan calls Senkakus but referred to as Diaoyus by China.-Interaksyon (February 23, 2013 9:20PM)

China reminds PH it signed a pact that aims to reduce tension in the region

China has again criticized the Philippines for issuing a statement that the arbitration process before the United Nations arbitration tribunal that it initiated to resolve the territorial dispute over the West Philippine Sea (South China Sea) would proceed despite China's rejection. 

At a press conference in Bejing on Friday, China Foreign Ministry Hong Lei reminded the Philippines that it is among the “signatories to the Declaration on the Conduct of Parties” in the South China Sea.

The declaration is a non-binding agreement between China and members of the Association of Southeast Asian Nations that hopes to reduce political tensions in the region as well as prohibits claimant-parties from aggressively acting on their claims. 

“Both the Philippines and China are signatories to the Declaration on the Conduct of Parties in South China Sea (DOC) and have made commitments on comprehensive and earnest implementation of the DOC,” Hong told the reporters in Beijing.

“We disapprove of the Philippine Foreign Ministry's practice of bringing international arbitration and have made clear our opposition stance,” Hong added.

Hong said China would only agree to resolve the dispute through a “dialogue framework” which he claimed was “supported by most countries in the region”.

While maintaining their supposed “dialogue framework", Hong said China would continue "to make efforts to maintain peace and stability in the South China Sea and unswervingly safeguard national sovereignty and interests." 

The Philippines has been pushing to resolve the dispute either through the International Tribunal on the Law of the Sea (Itlos) or an international body under the United Nation Convention on the Law of the Sea (Unclos).

But China rejected the action taken by the Philippines and insisted to solve the issue through bilateral means.

Philippine Department of Foreign Affairs (DFA) Secretary Albert del Rosario said the Philippines had been engaging China in political and diplomatic dialogues for a peaceful negotiated settlement of its maritime dispute for the past 18 years, but with “no success”.

“In every occasion, China always asserts indisputable sovereignty over the entire South China Sea. We view that arbitration process as the most friendly , peaceful and durable option to clarify the maritime entitlements of coastal in states in the South China Sea,” Del Rosario said during an event hosted by the Manila Overseas Press Club Thursday night.

The DFA chief said the arbitration would ensure peace and stability and freedom of navigation in the region.

Despite China’s rejection, the Philippines is now forming its five-member panel for the arbitration and is set to submit a request to the president of Itlos to choose the remaining representatives.

The Philippines has hired Ruldiger Wolfrum, former Itlos president, to represent the country in the arbitration.

To give China the time to reply, the Philippines will have to wait for another 15 days before it submits a request to the Itlos president.

The Philippine government on January 22 officially brought its territorial dispute with China before the United Nations. It presented a Statement and Notification of Claim to China, as well as a note verbale to Chinese Ambassador to Manila Ma Keqing.

The presentation of the notification siganks the start of the arbitration proceedings. 

Manila filed a case against Beijing under the compulsory proceedings provided by Annex VII of the Unclos.

Instead of filing the case before the Itlos, the Philippine government decided to invite China to form a court under the arbitral tribunal.

A tribunal will be composed of five members: the first two chosen by the parties concerned (the Philippines and China) and the three will be agreed upon by both countries.-Interaksyon (February 23, 2013 8:09PM)

Obama, Japan PM firm on N.Korea, measured on China

US President Barack Obama on Friday, February 22, pledged with Japan's new leader to take a firm line on a defiant North Korea but the two sides also tried to calm rising tensions between Tokyo and China.
Prime Minister Shinzo Abe carefully avoided disagreements with Obama after previous Japanese governments' rifts and declared: "The alliance between Japan and the United States is back now. It's completely back."

Obama promised to work closely with the conservative leader, whose Liberal Democratic Party swept back into power in December on a platform that includes boosting defense spending and aggressively stimulating a long-flaccid economy.

"You can rest assured that you will have a strong partner in the United States throughout your tenure," Obama told Abe in the Oval Office, calling the alliance with Japan "the central foundation" for US policy in Asia.

Obama said the two leaders discussed "our concerns about the provocative actions that have been taken by North Korea and our determination to take strong actions in response."

North Korea carried out its third nuclear test on February 12, ignoring warnings even from its ally China.

Abe, who first rose to political prominence as an advocate for a tough line on North Korea, said he agreed with Obama's position of not offering "rewards" to Pyongyang and on the need for a new UN Security Council resolution.

But the White House appeared to want to lower the temperature between Japan and China, which has increasingly sent vessels near Japanese-controlled islands known as the Senkaku in Japanese and Diaoyu in Chinese.

Obama did not mention the issue but Secretary of State John Kerry, in a separate meeting with Japan's Foreign Minister Fumio Kishida, said he wanted to "compliment Japan on the restraint it has shown."

The meetings came hours after Beijing lashed out at Abe over a newspaper interview in which he charged that China would eventually hurt its investment climate through assertive actions in the region.

Abe said the US-Japan alliance was "a stabilizing factor" and -- in remarks he nudged his translator to read out -- added: "We have always been dealing with the Senkaku issue in a calm manner and we will continue to do so."

The Japanese leader later spoke in stronger terms in an address at a think tank. While saying he wanted to cooperate with China's incoming leader Xi Jinping, Abe insisted that the islands belonged to Japan.

"We simply cannot tolerate any challenge now and in the future. No nation should make any miscalculation about the firmness of our resolve," Abe said at the Center for Strategic and International Studies.

The exchange marked a different tone than one month ago, when then secretary of state Hillary Clinton warned China not to challenge Japan's control of the islands, triggering a rebuke from Beijing.

Obama put a strong emphasis on Asia in his first term but has faced chronic political turbulence in Japan. Abe is the fifth Japanese prime minister since Obama was elected president.

Abe, who was also prime minister from 2006 to 2007, is known for his outspoken views on security and on World War II history -- a persistent sore point in relations with South Korea and China.

He has been more circumspect in his comments since returning to office. Abe said Friday he sought a "good relationship" with South Korea despite friction with the fellow US ally over a separate set of barely inhabited islands.

Abe also said that Japan would sign the Hague treaty on parental abductions, a key concern for US lawmakers due to Japanese courts' refusal to grant custody to foreigners.

But the Obama administration held firm on the Trans-Pacific Partnership, a proposed free trade pact that is a cornerstone of US strategy in the region.

The Liberal Democratic Party had said during the election that Japan would only enter talks if certain sectors are off the table. But the two governments issued a statement saying that no sector would have a prior exemption.

Abe, who said he would decide soon whether to join the talks, expressed assurance that the final negotiated trade pact could include exemptions.

Japan's powerful farmer lobby opposes the deal, fearing a flood of foreign competition.-Rappler (February 23, 2013 1:33PM)

Friday, February 22, 2013

Sabah Standoff Stricken Traders

The ongoing standoff in the island of Sabah has been continuously affecting the region. The trade and commerce between the island and its neighbouring towns have also been affected as naval forces of both Malaysia and the Philippines tighten the security across the border to ensure that the tension will not escalate.

Business sector urges the Aquino administration to solve the issue immediately before things get worse. They were also planning to set a meeting with the President to talk about the issue and formulate measures on how to counter its possible effects.

According to Tawi-Tawi Chamber of Commerce and Industry, Inc. President Rolando E. Lim, wooden vessels of traders regularly plying the Sabah - Bongcao route is being intercepted by the Navy officials and disallowing them to travel due to the ongoing standoff.

On his interview with the BusinessWorld, Mr. Lim said they worried on the possible effects of the incident on the local economy of the region. "Definitely, prices of goods here will increase since more than 80% of our basic goods such as such rice, flour, and sugar are imported from Sabah.”

Most of the basic products being sold in the southern tip of Mindanao are coming from the port of Sandakan due to its proximity that makes the prices lower compared to products coming from Zamboanga City.

On the other hand, farmers and oil palm smallholders in Sabah have also raised their concern as the ongoing standoff affects their industry.

Authorities are not allowing them to enter the vicinity of Kampung Tanduo at Felda Sahabat 17, some 170 kilometres from this east coast town, to harvest their oil palm and other farm crops.

Farmers were advised not to enter the cordoned-off area around Kampung Tanduo, where the so-called Royal Sulu Sultanate Army had raised yellow flags with a lion insignia outside a surau (prayer house).

The ongoing standoff between the Malaysian authorities and the armed men who claimed to be the ‘Royal army of the Sultanate of Sulu’ seems to last for more weeks as tension heats up between the two parties.

Both the Philippines and Malaysian government is working together to end the conflict and to avoid any bloodshed to happen by asking the armed Filipinos to leave peacefully and avoid injecting their inherited rights by occupying the island. Instead, both governments urged the Sulu army to discuss the issue in accordance with the law and in a peaceful manner.

The Sultanate claims over Sabah was based on the historical facts showing that the Island is under the rule of the Sultanate of Sulu before it was being leased by the British East India Company and turned after to the Malaysian Government when it declares independence on August 31, 1963. An act that according to the heirs of the Sultanate violated the lease agreement between the said British company and the Sultanate of Sulu.

Although the situation remains peaceful, the effects of the standoff seems already been escalating on various sector of the communities with the business industry facing the great threat of the tension next to security. And that could also affect the future of Mindanao which had a much brighter future after the signing of the peace agreement between the Philippine Government and the Moro Islamic Liberation Front (MILF).

As the situation continued to be left unresolved, conflicts and standoff could also be possibly happened repeatedly. We could not set aside the fact the sultanate of Sulu really has undisputable rights over the island with their legal papers and historical records supporting their claim. But everything must undergo into a legal process. And this issue needs an intervention of an international body such as the United Nation (UN) to conduct further studies and investigations. – Vic Saure (February 22, 2013 4:40AM)

Indonesian army says eight soldiers killed in Papua

Eight soldiers have been shot dead in two separate attacks by armed men in Indonesia's Papua province, the army has said.

A spokesman told the BBC that one soldier was killed when a military post in mountainous Puncak Jaya district was attacked - two attackers also died.

Seven soldiers died when they were ambushed not far away shortly after, said Jansen Simanjuntak.

Insurgents calling for independence have been active in Papua for decades.

It is one of the country's richest provinces in terms of natural resources - but also one of the least developed.

Thursday's attacks were the biggest to hit the military this year.

Mr Simanjuntak said that in the first incident, in the village of Tingginambut, one soldier died instantly when he was shot in the chest and that another was injured.

In the second, nine soldiers who were on patrol were ambushed by unidentified assailants.

Mr Simanjuntak said there were no plans yet to send additional troops to Papua, but that additional police had been deployed to find those responsible.

Restive province

The Indonesian government "strongly condemned the brutal incident", a security minister, Djoko Suyanto, told the AFP news agency.

"Based on our intelligence, there are several [separatist] groups in the area," Mr Suyanto told reporters, saying that he suspected the separatist Free Papua Movement of the attacks.

Papua became Indonesia's easternmost province in a controversial election in 1969 that many Papuans say was a sham, says the BBC's Karishma Vaswani in Jakarta.

The poorly armed Free Papua Movement has battled for independence ever since.

The Indonesian government says it is too dangerous for foreign journalists to travel to the restive province, although human rights groups say that it is Jakarta's way of keeping journalists out, says our correspondent.-British Broadcasting Corporation (February 21, 2013 13:30GMT)

Southeast Asia's growth could lead to credit curbs

Southeast Asia's heady debt-fuelled growth is beginning to resemble the unsustainable mid-1990s boom. But authorities are shy to raise interest rates as doing so could attract more overseas capital, stoking inflation and financial instability. Direct curbs on credit and capital flows may prove more attractive. 

Growth is strong across the region. Thailand's GDP jumped almost 19 percent from a year earlier in the final quarter of 2012. Malaysia and the Philippines saw better-than-expected expansion of 6.4 percent and 6.8 percent in the same period, respectively. Growth in Indonesia has been above 6 percent in five years out of the past six. Singapore is at full employment. 

The rising credit intensity in these economies may not be as pronounced as in China; nonetheless, it is a cause for concern. On average, commercial credit as a proportion of GDP for the region's five largest economies - Indonesia, Malaysia, Singapore, Thailand and the Philippines - is approaching the pre-1997 crisis peak of 75 percent, according to Breakingviews calculations. 

There's no immediate inflation threat. Besides, countries like Thailand, Malaysia and the Philippines haven't had a decent investment boom in a long time. The desire to prolong the party - and the fear of attracting more overseas capital - explains the reluctance to raise the domestic price of money. Bank Indonesia has left its policy interest rate unchanged for a year; Malaysia's central bank last raised rates 22 months ago. 

But doing nothing is risky. So policy makers are likely to reach for a different set of tools. Central banks could increase the pace at which they sterilize capital inflows by buying low-yielding foreign-currency assets and selling high-yielding domestic bonds. The fiscal cost of this strategy is a small price to pay for ensuring financial stability. More direct controls on capital inflows are also possible, especially if rising wages feed into inflation expectations. 

But before that, the authorities will try to curb credit supply by raising reserve ratios and bank capital risk weightings. The answer to a property mania is to tighten loan-to-value norms, shorten repayment periods and dissuade foreign buyers; Singapore has tried them all. 

Ultimately, though, the dams offer only temporary reprieve against waves of global liquidity. A few more years of credit-fuelled growth will make the repeat of a 1997-type crisis a distinct possibility.-ABS-CBN News (February 21, 2013  2:42PM)

Prince Philip cracks Filipino nurse joke

The Duke of Edinburgh told a nurse from the Philippines that her country must be "half empty" - because so many of her compatriots have come to the UK to work for the NHS.

He made the remark during a visit to Luton and Dunstable Hospital where he unveiled a £5.5m cardiac centre.

"The Philippines must be half empty - you're all here running the NHS," the prince told the nurse, who laughed.

A hospital spokesperson said the duke's visit had been "hugely motivational".

The 91-year-old royal, who called himself "the world's most experienced curtain puller", was said to be in a "jovial" mood and asked when the hospital would get a helipad to save him a journey by car.

'Cosmopolitan town'

The hospital spokesperson would not comment on the duke's conversation with the nurse but said the hospital had not held a recent recruiting campaign in the Philippines, which had a population of 94.8 million in 2011.

"Luton is a very cosmopolitan town and the working staff at Luton and Dunstable Hospital reflects that," the spokesperson said.

The Nursing and Midwifery Council said just over 16,000 of the 670,000 nurses in the UK were from the Philippines.

The Duke of Edinburgh is well known for his outspoken and sometimes controversial comments.

During a state visit to China in 1986, he told a group of British students: "If you stay here much longer, you'll all be slitty-eyed".

In 1994 he asked an islander in the Cayman Islands: "Aren't most of you descended from pirates?"

Four years later, speaking to a student who had been trekking in Papua New Guinea, the duke said: "You managed not to get eaten, then?"

Responding to Tuesday's visit to Luton, Buckingham Palace said it would not comment on a private conversation.-British Broadcasting Corporation (February 20, 2013 16:48GMT)

UN supports peaceful settlement in South China Sea row - DFA

United Nations (UN) Secretary General Ban Ki-moon renewed the world body’s support for a peaceful and amicable resolution of the maritime dispute between the Philippines and China over the West Philippine Sea, the Department of Foreign Affairs said in a news release.

The support was expressed during a meeting on February 19 where the Secretary-General assured Philippine Ambassador and Permanent Representative to the UN Libran Cabactulan that he was closely monitoring developments on the case.

UN Undersecretary-General for Legal Affairs Patricia O’Brien and other senior UN officials were the others present in the meeting held on the same day that China rejected participating in the UN arbitration proceedings.

'Arbitration not an unfriendly act'

Ambassador Cabactulan told the Secretary-General that the arbitration case which the Philippines is seeking with China is “a form of peaceful settlement of disputes, which should not be considered an unfriendly act.”

In the meeting, the ambassador stressed that this has been the position of the UN General Assembly ever since 1982 when it adopted the Manila Declaration on the Peaceful Settlement of International Disputes.

“Our representation with the Secretary-General today conveyed this basic Philippines position,” he said. 

Ambassador Cabactulan explained to Secretary-General Ban that the arbitration case would benefit both the Philippines and China, as well as the region and the world.

“It will be an opportunity for China to assure the international community of its peaceful rise,” the ambassador stressed.

Ambassador Cabactulan said the heart of the issue lies in China’s interpretation and application of the UN Convention on the Law of the Sea (UNCLOS), specifically its nine-dash line claim which interferes with the lawful exercise by the Philippines of its sovereign rights and jurisdiction in its exclusive economic zone and continental shelf.

Both countries are states parties to UNCLOS.         

Since April last year, tension has run high between China and Philippines after a fleet of Chinese boats were caught illegally fishing in the Scarborough Shoal, off Zambales province. The Philippine Navy ship that was sent to arrest the Chinese fishermen was stopped by Chinese government boats. - Interaksyon (February 21, 2013 12:12PM)

Philippines, Japan to discuss maritime cooperation

The Philippines and Japan, two countries each with a maritime dispute with China, will be holding a dialogue on cooperation this week. This will only be the second dialogue between the two countries since 2011.

In a statement, the Department of Foreign Affairs said representatives from both sides “will discuss various areas of cooperation particularly in maritime safety, maritime security, anti-piracy measures, fisheries and marine scientific research.”

The Philippine delegation will be headed by Assistant Secretary Gilberto G.B. Asuque, DFA Office of the Undersecretary for Special and Ocean Concerns, as Chair, and Special Assistant Henry Bensurto, DFA Office of the Undersecretary for Policy, as Co-Chair. The Japanese delegation will be headed by Mr. Kenji Kanasugi, Deputy Director-General for Southwest and Southeast Asian Affairs, Ministry of Foreign Affairs (MOFA).

The 2nd Dialogue on Maritime and Oceanic Affairs will be held at the DFA main building on Friday, February 22.

Also in attendance are representatives from the Department of National Defense, Philippine Coast Guard, Maritime Industry Authority, National Mapping and Resource Information Authority and Bureau of Fisheries and Aquatic Resources.

The Japanese delegation will also be composed of representatives from MOFA, Secretariat of the Headquarters for Ocean Policy of the Cabinet Secretariat, Ministry of Defense and the Coast Guard.

Japan has criticized China for its naval aggression over a chain of remote islands in the East China Sea it tagged as Senkaku. The Chinese calls them Diaoyu.-ABS-CBN News (February 21, 2013 12:13PM)

Singapore Companies Brace for Labor Curbs After Protest: Economy

Singapore will probably force companies to further reduce their reliance on foreign labor in the 2013 budget, after a public backlash against the influx of workers led to the biggest demonstration in more than a decade.

Finance Minister Tharman Shanmugaratnam may cut the ratio of overseas workers companies are allowed to hire, according to Credit Suisse Group AG. To counter any labor shortfall, there may also be incentives to boost productivity, economists at Citigroup Inc. and Oversea-Chinese Banking Corp. said ahead of the Feb. 25 budget presentation.

Thousands gathered in a rare political protest on Feb. 16, signaling concerns that foreigners are taking jobs from locals and driving up housing costs haven’t abated even after Prime Minister Lee Hsien Loong tightened hiring rules in recent years. Lee has warned that the labor curbs will slow economic growth, while rising costs are bedeviling businesses such as The King Louis restaurant, where all the full-time waiters are foreigners.

“I’m worried every time the budget comes around,” said Sebastian Teow, marketing manager at the medieval-themed restaurant. Teow is already struggling to fill positions at the outlet and coping with higher taxes for hiring overseas workers in recent years, he said. “We are really hoping there won’t be higher levies as they are eating into the profits.”

Growth Slows

Singapore’s economy grew 1.2 percent in 2012, the least in three years. The island is in a “new phase” of growth where it must adjust to a smaller pace of expansion, and hiring constraints are among the reasons for last year’s slowdown, the prime minister has said. The government forecasts growth of 1 percent to 3 percent this year.

“The ongoing challenge of sluggish growth coupled with a high-cost environment remains a hurdle to both businesses and workers alike,” said Selena Ling, an economist at Oversea- Chinese Banking in Singapore. The budget “needs to strike a balance between economic restructuring vis-a-vis manpower constraints and cost issues on the ground,” she said.

A report tomorrow may show the economy grew an annualized 2 percent in the fourth quarter of 2012 from the previous three months, faster than an initial estimate of 1.8 percent, according to the median of 11 estimates in a Bloomberg survey.

Elsewhere in Asia today, Hong Kong’s jobless rate rose to 3.4 percent last month, while in Europe, purchasing managers indices for the region showed a deepening contraction in manufacturing and services in February. The U.S. will release consumer price data for January, while economists predict a separate report will show jobless claims rose in the week through Feb. 16.

Wage Supplements

Lee’s ruling party is facing weakening support in the island that it has governed for more than five decades. The rising number of foreigners has contributed to competition for jobs, congested public transportation and surging home prices. The resulting public discontent contributed to record opposition gains in the 2011 general election, and caused Lee’s party to lose a parliament seat in a January by-election.

Last week’s demonstration was against a population policy that may see the number of people on the island rise to 6.9 million by 2030 from 5.3 million now. Lawmakers from Lee’s party endorsed a white paper earlier this month that outlined proposals to allow more foreigners through 2030 to boost the workforce.

Tough Times

The white paper predicted total workforce growth will ease to 1 percent to 2 percent annually through 2020, compared with an average rate of 3.3 percent per annum in the last three decades. The projections are “tough” for businesses, said Ho Meng Kit, chief executive officer of the Singapore Business Federation, which represents more than 18,000 companies.

In 2012, the government cut the proportion of foreign workers that companies can hire, and increased levies for employing them. An Association of Small and Medium Enterprises survey last year showed more than eight in 10 companies are facing manpower shortages.

Under current limits, employers in the construction industry can hire as many as seven foreigners for every local worker, compared with a ratio of 1.5 for manufacturers and 0.8 for services companies. Monthly levies that companies have to pay for such workers may be as much as S$650 ($524) per employee in construction, S$550 in services and S$500 in manufacturing.

Worker Strike

SMRT Corp. (MRT), the island’s biggest subway operator, said in January that its profitability in the next 12 months will deteriorate in part as staff costs “significantly increase.” Dozens of SMRT’s bus drivers from China held Singapore’s first strike in 26 years in November over a wage dispute.

Unit labor costs rose 6.1 percent in the third quarter from a year earlier, Statistics Department data show. They may climb 3 percent to 4 percent in 2013, the central bank said in October.

“The likely continued pressure on wage costs will be negative for offshore and marine companies, domestic transport operators and exporters,” Sanjay Mookim and Kwee Hong Ching, research analysts at Credit Suisse, said in a research note.

Shanmugaratnam may also announce more assistance for the poor and bigger wage supplements for low-income earners when he presents the budget to Parliament next week, according to Citigroup economist Kit Wei Zheng.

Singapore’s income inequality as measured by the Gini coefficient widened last year, according to the Statistics Department. Inflation averaged 4.6 percent in 2012 and the island is the third-most expensive Asian city to live in and the sixth globally, according to an Economist Intelligence Unit ranking published this month.

Last year, the government said it will make permanent a program to provide cash, utility rebates and medical funds for elderly and low-income households.

“Helping the lower-income segment of the society is likely to remain on the top of the lists as Singapore strives to be an inclusive society,” Francis Tan and Jimmy Koh, analysts at United Overseas Bank Ltd. (UOB), wrote in a research note.-Bloomberg (February 21, 2013 5:43PM)

Myanmar holds peace talks with ethnic groups

Myanmar's government has held peace talks with a federation of ethnic groups to try to resolve issues including the conflict in the northern state of Kachin.

The United Nationalities Federal Council, which was formed by about a dozen ethnic minority groups including the Kachin, met government officials in the northern Thai city of Chiang Mai on Wednesday.

In a brief statement afterwards, they said the "frank and friendly" talks aimed to map out a framework and timeframe for political dialogue, and pledged to hold another round of discussions within two months.

However, Al Jazeera's Wayne Hay, reporting from Chiang Mai, said "Kachin officials have been quietly critical of this meeting, dismissing it as a mere meet-and-greet situation - so much so that they haven't sent any senior representatives from Kachin State."

Myanmar's quasi-civilian government has reached tentative ceasefires with a number of ethnic rebel groups since taking power in early 2011. But several rounds of talks with the Kachin rebels have failed to reach a breakthrough.

The government held fresh talks with the Kachin Independence Organisation (KIO) in China earlier this month, with both sides agreeing to try to reduce military tensions and continue dialogue.

The Kachin, who are fighting for greater autonomy, say any negotiations should also address their demands for more political rights.

Tens of thousands of people have been displaced in Kachin state since June 2011, when a 17-year ceasefire between the government and the KIO's armed wing, the Kachin Independence Army, broke down.

Fighting escalated in December, and the Myanmar military has used air strikes against the rebels.

Last month the government announced a unilateral halt to its offensive but the Kachin have accused the military of flouting the ceasefire.-Al Jazeera (February 21, 2013 03:50)

Wednesday, February 20, 2013

Philippine to push through with UN arbitration despite China's rejection

The Philippine government is still determined to seek U.N. arbitration on its long-running territorial dispute with China despite Beijing's refusal to cooperate.

“We will follow the process whether they agree to or not, we’ll just follow the process,” said Secretary to the Cabinet Rene Almendras on Wednesday, a day after Chinese Ambassador to the Philippines Ma Keqing delivered a Note Verbale to the Department of Foreign Affairs (DFA) stating that China is rejecting and returning the Philippines’ Notification and Statement of Claim.

Almendras said they still believe that “down the line, there will be some decisions and actions that these international bodies will hopefully come up with and, hopefully, they will be to our favor.”

He said he was not surprised with China's decision. “Personally, I’m not surprised; I expected it. Even when we were discussing this, they already said so that they will not [cooperate] from the very beginning.”

Nevertheless, Almendras said the government will exert all efforts to try and get recognition from the international community. “The important thing is that somebody, other than us, will say that this is so.”

Both China and the Philippines — as well Taiwan, Malaysia, Brunei and Vietnam — are locked in a dispute over ownership of the Spratly Islands, a chain of islands and islets believed to be rich in oil and minerals deposits, in the West Philippine Sea. Japan, on the other hand, claims the Senkaku Islands, which China also asserts ownership over.

The Philippines recently notified China that it is bringing their territorial dispute over parts of the resource-rich South China Sea to international arbitration.-GMA News (February 20, 2013 3:22PM)

North Korea threatens South with 'final destruction'

North Korea threatened South Korea with "final destruction" during a debate at the United Nations Conference on Disarmament on Tuesday, saying it could take further steps after a nuclear test last week.

"As the saying goes, a new-born puppy knows no fear of a tiger. South Korea's erratic behaviour would only herald its final destruction," North Korean diplomat Jon Yong Ryong told the meeting.

Jon's comments drew quick criticism from other nations, including South Korea, France, Germany and Britain, whose ambassador Joanne Adamson said such language was "completely inappropriate" and the discussion with North Korea was heading in the wrong direction.

"It cannot be allowed that we have expressions which refer to the possible destruction of U.N. member states," she said.

Spanish Ambassador Javier Gil Catalina said the comment left him stupefied and appeared to be a breach of international law.

"In the 30 years of my career I've never heard anything like it and it seems to me that we are not speaking about something that is even admissible, we are speaking about a threat of the use of force that is prohibited by Article 2.4 of the United Nations charter," Catalina said.

Since the North tested a nuclear bomb last week in defiance of U.N. resolutions, its southern neighbour has warned it could strike the isolated state if it believed an attack was imminent.

Pyongyang said the aim of the test was to bolster its defences given the hostility of the United States, which has led a push to impose sanctions on North Korea.

"Our current nuclear test is the primary countermeasure taken by the DPRK in which it exercised its maximum self-restraint," said the North Korean diplomat Jon.

"If the U.S. takes a hostile approach toward the DPRK to the last, rendering the situation complicated, it (North Korea) will be left with no option but to take the second and third stronger steps in succession," he said, without indicating what that might entail.

North Korea has already told key ally China that it is prepared to stage one or two more tests this year to force the United States into diplomatic talks, a source with direct knowledge of the message told Reuters last week.


U.S. Ambassador Laura Kennedy said she found North Korea's threat on Tuesday profoundly disturbing and later tweeted that it was "offensive".

Poland's representative suggested North Korea's participation in the U.N. forum should be limited.

Impoverished and malnourished North Korea is one of the most heavily sanctioned states in the world.

It is still technically at war with South Korea after a 1950-53 civil war ended in a mere truce.

Washington and its allies are believed to be pushing to tighten the noose around North Korea's financial transactions in a bid to starve its leadership of funding.

Jon said last week's test was an act of self-defence against nuclear blackmail by the United States, which wanted to block North Korea's economic development and its fundamental rights.

"It is the disposition and firm will of the army and people of the DPRK to counter high-handed policy with tough-fist policy and to react to pressure and sanctions with an all-out counter-action," he said.

Jon said the United States had conducted most of the nuclear tests and satellite launches in history, and he described its pursuit of U.N. Security Council resolutions against North Korea as "a breach of international law and the height of double standards".

Neither Russia nor China, which are veto-wielding members of the U.N. Security Council, spoke at Tuesday's meeting in Geneva.

Before its nuclear test, North Korea was already facing growing diplomatic pressure at the United Nations.

The U.N. Human Rights Council is widely expected to order an inquiry next month into its leaders' responsibilities for crimes against humanity.-ABS-CBN News (February 20, 2013 11:56PM)

Fitch Ratings Says Indonesia's External Finances Are Weak

Indonesia's 2012 data on balance of payments underlined the pressure applied to the sovereign's external finances, remaining consistent with an investment grade, according to international agency Fitch Ratings. 

“Indeed, we believe the sovereign external balance sheet will strengthen despite the emergence of a current account deficit [CAD] in 2012,” Fitch Ratings said in a statement released on Tuesday. 

Bank Indonesia (BI) announced a balance of payments surplus of $2 billion for 2012, significantly lower than the $11.9 billion surplus recorded in 2011. The country posted its first annual CAD since 1997 — around 2.7 percent of GDP — but this was offset by the capital and financial account surplus. 

The external finances are a long-standing weakness in the Indonesian sovereign credit profile, and exposure to a potential external liquidity shock remains high.

Robust domestic demand growth has been a driver of Indonesia's CAD, in turn partly reflecting loose monetary and credit conditions.

"We believe BI puts a relatively high weight on fostering growth among its policy priorities. Nonetheless, we expect BI will ultimately pursue policies aimed at averting overheating and ensuring economic and financial stability," Fitch Ratings said.

The international ratings agency added that it remained to be seen whether BI's willingness to tolerate currency volatility decreases. Currency flexibility is a key tool for BI in its efforts to avoid a potential build-up of macroeconomic imbalances.

BI intervention to support the currency contributed to a 3.5 percent decline in Foreign Exchange reserves to $ 108.8 billion in January from $112.8 billion in December 2012.

The reserve level is the lowest in six months, but is equivalent to more than six months of imports.

Fitch affirmed Indonesia's sovereign rating at 'BBB-' with a Stable Outlook in November and believes the current figures are consistent with this view.

Additionally, based on Fitch's projections, Indonesia still has the potential to become a net sovereign external creditor in the coming years. 

Indonesia's 2014 presidential elections are expected to limit prospects for economic, fiscal and institutional reform, suggesting responsibility for any required economic adjustment will lie with BI.

Such reform could address existing weaknesses in the sovereign credit profile and may ease pressure on the external finances, Fitch Ratings said.-The Jakarta Globe (February 20, 2013)

Philippine coast guard ends search for missing Myanmar ship crewmen

The Philippine Coast Guard on Wednesday said it already called off its search and rescue operations for the 14 missing crew members of a Myanmar ship that sank off Bolinao, Pangasinan on Saturday night.

PCG Northern Luzon district commander Capt. Pablo Gonzalez said the missing crewmen of the sunken MV Arita Bauxite were, so far, presumed dead and believed trapped inside the ill-fated vessel’s engine room.

“We terminated our rescue operation because we no longer see any indication that we still have survivors,” said Gonzalez.

He cited the statement of one of the survivors who claimed that most of the missing crew members were engineers who were still working on and trying to revive the main engine of the ship when it sank.

“Based on the statement of (one of the survivors), it only took only seven minutes for the ship to totally sink. The engine room was located four stories below and it was a very huge ship,” Gonzalez said.

“Although we remain hopeful that there are still survivors. We are hopeful that they were just carried off somewhere by the current. We may resume rescue operations again if [we] see any [indication],” Gonzalez added.

He said some PCG personnel remain on standby in Bolinao, hoping to get feedback from fishermen and passing vessels plying the route about sightings of survivors.

“Actually they are still considered missing, but the probability of seeing them alive is really very slim,” he said.

The official said it may be impossible to retrieve the bodies of the crewmen from the wreck due to the depth of the area where the vessel sank.

“It’s around 1,038 fathoms deep. Multiply that by six, so it’s around 6,000 feet,” he said.
He said that as of Tuesday, the PCG has already turned over the survivors to the Bureau of Immigration, along with the ship agent representative.

“Their repatriation is now being processed,” the PCG official said.

Asked about the possibility of resurfacing the sunken vessel, Gonzalez said the process could be strenuous. “The area where it sank was very deep. We are also encountering big waves and gale-force winds in the area.”

Meanwhile, Gonzalez said they are monitoring the traces of oil at the site where the Aurita Bauxite sank.

“We are monitoring it, apparently the movement of oil spill is palabas ng bansa (away from the country), palabas ng West Philippine Sea,” he said. “It’s actually just an oil slick … I think it’s best that we let nature do the rest to let the oil thin out and evaporate.”

The Myanmar vessel sank in the waters off Cape Bolinao at 11:30 p.m. Saturday after it encountered engine trouble while on its way to Indonesia.-Philippine Daily Inquirer (February 20, 2013 7:23PM)

Tuesday, February 19, 2013

China rejects arbitration for sea dispute

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China has formally rejected the Philippines’ move to bring to an arbitral tribunal its claim over the West Philippine Sea, but the Department of Foreign (DFA) is not bothered.

In a statement, the DFA said: “China’s action will not interfere with the process of Arbitration initiated by the Philippines on 22 January 2013. The Arbitration will proceed under Annex VII of [United Nations Convention on the Law of the Sea] and the 5-member arbitration panel will be formed with or without China.”

Chinese Ambassador to the Philippines Ma Keqing sent a Note Verbale on Tuesday stating that China rejects and returns the Philippines’ Notification and Statement of Claim. China said it has indisputable sovereignty over the entire South China Sea as encompassed by its 9-dash line claim.

“The Philippines remains committed to Arbitration which is a friendly, peaceful and durable form of dispute settlement that should be welcomed by all,” the DFA said.

The nine-dash line theory takes about 90 percent of the whole area, which China calls the South China Sea in its territorial maps. The boundary has been published in Chinese annals since 1947.

DFA also said the soon-to-be-formed tribunal will check the domestic laws of China, which should be in conformity with the United Nations Convention on the Law of the Sea (UNCLOS).

Foreign Affairs Secretary Albert del Rosario earlier said UNCLOS, which defines the rights and responsibilities of nations in their use of the world's oceans, will be the great “equalizer.”

Article 9 of Annex 7 provides that: “If one of the parties to the dispute does not appear before the arbitral tribunal or fails to defend its case, the other party may request the tribunal to continue the proceedings and to make its award. Absence of a party or failure of a party to defend its case shall not constitute a bar to the proceedings. Before making its award, the arbitral tribunal must satisfy itself not only that it has jurisdiction over the dispute but also that the claim is well founded in fact and law.”-ABS-CBN News (February 19, 2013 7:58PM)

Philippines eyes reexport of some 600 used cars

The Cagayan Economic Zone Authority (Ceza) in the north is considering exporting used vehicles imported into the special economic zone in Sta. Ana town once the Philippine government clamps down on their resale in the country.

Ceza administrator Jose Mari Ponce said the agency was considering exporting to either Africa or Bangladesh some 600 vehicles that arrived in the country after the Supreme Court decision on January 7 that upheld the validity of Executive Order No. 156.

The executive order, issued by then President Gloria Arroyo in 2002, prohibits the importation of used vehicles into the country, with some exceptions.

“We are trying to determine if there is a market in those areas because if this ban becomes permanent, our best option is to have the vehicles reexported,” Ponce said.

He said Ceza would abide by the ruling of the Supreme Court, denying accusations that the continued arrival of shiploads of used cars in the Cagayan Special Economic Zone and Freeport (CSEZFP) was an act of defiance.

“So if the [Bureau of] Customs is now telling its people to stop [processing the latest shipment of used cars], then that is not our concern because ours is a free port, and we are not violating any laws as long as these vehicles stay within the secured perimeter,” Ponce said.

On Thursday, Customs Commissioner Ruffy Biazon ordered its district office in Aparri, Cagayan, which covers the CSEZFP, to stop the processing of the shipment of 200 used vehicles from South Korea that arrived there on February 11.

Biazon said this was a show of respect for the Supreme Court ruling, which, according to him, the agency will fully enforce once it becomes final and executory.

A shipment of about 400 vehicles from Japan is expected to arrive at Port Irene, CSEZFP’s main port, on Thursday, Ceza officials earlier said.

Avert huge losses

“Reexporting is one option that [used car traders] can resort to avert huge losses. Otherwise, if this industry is really shut down, those vehicles will eventually turn into nothing but junk,” said Ponce, a relative of Senate President Juan Ponce Enrile, who was behind the creation of the special zone and free port through the passage of a law.

But even as used-car traders, mainly Forerunner Multi Sources Inc., the petitioner in the recently decided case, were seeking other legal remedies to avert the folding up of their multimillion-peso industry, Ceza has begun looking at alternatives, said Ponce.

Alternative livelihood

“We are now also looking at the worst-case scenario that about 1,000 people will be left jobless if this industry will stop. So we are trying to look for alternative livelihood for them,” he added.

The Automotive Rebuilders Industry of Cagayan (Aric) was not looking at the option of reexporting the imported vehicles.

“It will never lead to that point. We are confident that [the used-car importation] at Ceza will not be stopped because, as we have already stated, this is allowed by Executive Order No. 418, and the [January 7] Supreme Court ruling has not yet decided on the validity of EO 156,” said Aric president Jaime Vicente.

Conflicting orders

EO 418 was issued in 2005 by Arroyo and modifies tariff rates for used imported vehicles.

“So we have here two conflicting orders—one that [implicitly] allows and one that prohibits. If [the government] implements one, it renders the other inoperable,” he said.

Vicente said Aric’s operations should not be hampered by the recent Supreme Court decision because it did not decide the main issue of the case, but only the validity of the issuance of an injunction.

“The latter order (EO 418) has already been declared constitutional by the Supreme Court with finality; the other (EO 156) is still pending. So which one should prevail?” he told the Inquirer by telephone yesterday.-Asia News Network (February 19, 2013)

Singapore, Malaysia agree to build high-speed rail link

Singapore and Malaysia announced plans Tuesday to build a high-speed rail link, fuelling hopes that Southeast Asia could one day enjoy a rapid European-style train system connected to China.

Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak hailed the project, which would cut travel time between the city-state and Kuala Lumpur to 90 minutes. The target year for completion is 2020.

"This is a strategic development in bilateral relations that will dramatically improve the connectivity between Malaysia and Singapore," the leaders said in a joint statement issued after meeting in Singapore.

"It will facilitate seamless travel between Kuala Lumpur and Singapore, enhance business linkages and bring the peoples of Malaysia and Singapore closer together."

The existing rail link between the two countries dates back to the period of British colonial rule over both, with stops at several Malaysian towns.

No cost was given for the new rail link.

"(We) have some very preliminary figures but I am not inclined to mention those figures because it will tend to stick in people's minds," Najib said at a joint news conference with Lee.

"Our two cities will complement each other, our two countries will look at each other differently and the opportunities are boundless between our two countries," Najib said.

Lee quipped that Singaporeans would be able to have lunch with friends in Kuala Lumpur and get back within the day.

The 90 minute travel time for the train compares with four hours by car, including immigration clearances, and five hours by bus. And while a flight takes less than an hour that does not take into account the time taken to check in, pass immigration and pick up luggage.

"It's a strategic project for the two countries. It will change the way we see each other," said Lee, likening it to the heavily used London-Paris connection.

Both countries belong to the 10-member Association of Southeast Asian Nations (ASEAN), which hopes to one day link most of the member states by rail and extend the connection to China and possibly India.

ASEAN is contemplating a link that will run from Singapore to Kunming in southwestern China.

According to ASEAN's website, there is an estimated 4,069 kilometres (2,522 miles) of missing links that need to be built, or existing railways that need to be rehabilitated, in several countries.

"Beyond ASEAN, once these links are built, it will connect both the mainland ASEAN and ASEAN with its trading partners China and India," a fact sheet on the project said.

The Singapore-Malaysia high-speed rail link was first mooted in the 1990s by Francis Yeoh, head of Malaysian infrastructure conglomerate YTL, which built an express train service from the Kuala Lumpur International Airport to the capital's downtown area.

The idea was repeatedly shelved largely due to cost concerns. Malaysian media reports said in 2009 that the project's cost was estimated at $2.5 billion-$3.5 billion.

Hopes for the project were revived in 2010 when it was tapped as a potential key project under an economic transformation drive launched by Najib, who became prime minister the year before.-Yahoo News (February 19, 2013 3:30PM)

Thailand soars with 18.9% growth

Bangkok City, Thailand. Image courtesy of

It's not a bird nor an airplane. It's the Thai economy. This Asian nation soared by an eye-popping 18.9% in the 4th quarter of 2012. It's a record performance that was attributed to low base in the same quarter in 2011 and recovery efforts that allowed the industrial sector to move past the devastating impact of the worst flood in decades. After growing a meager 0.1% in 2011, when floods swamped 65 of the 77 provinces in the country and crippled production in the auto and electronics sectors, Thailand performed a remarkable 6.4% in 2012, putting it on par with Philippine's 6.6% performance and Indonesia 6.23%.-Rappler (February 19, 2013 11:37AM)

Timor Leste foreign minister to visit Manila for bilateral talks this week

Timor-Leste Foreign Minister Jose Luis Guterres will arrive on Thursday, February 21, for a two-day official visit to the Philippines, the Department of Foreign Affairs announced Tuesday.

Foreign Minister Guterres will hold bilateral talks with Foreign Affairs Secretary Albert F. del Rosario during the visit, the DFA said in its advisory.

Foreign Minister Guterres’s official visit is a strong indication of the interest of both the Philippines and Timor-Leste to expand and enhance bilateral relations specifically in the areas of technical cooperation, human resource development, and education, the DFA said.

Timor-Leste, the only other Catholic country in the southeast Asian region, is seeking to be a member of the Association of Southeast Asian Nations (ASEAN). The Philippines was among the countries that helped it transition into an independent country.

Minister Guterres’s previous visit to the Philippines was in January 2007 as a delegate to the 12th ASEAN Summit in Cebu City when he was Deputy Prime Minister of Timor-Leste.-Interaksyon (February 19, 2013 10:04AM)