PIA Dispatch - Wednesday, April 7, 2010

PGMA to DTI: Cushion impact of soaring iron ore prices

President Gloria Macapagal Arroyo ordered today the Department of Trade and Industry (DTI) to find ways of counteracting the soaring price of iron ore in the world market that could impact on the local real estate and construction industry.

The President issued the directive after the National Economic and Development Authority (NEDA) presented the looming problem in the joint Cabinet-NEDA meeting in Malacanang.

In a media briefing, NEDA Undersecretary Dennis Arroyo told reporters that global price of iron ore could likely double due to the quarterly price negotiations controlled by the big three global players. 

Iron ore prices increased recently by some 90 percent after new quarterly pricing agreements were introduced by the big three players --Vale of Brazil; BHP Billiton, an Anglo-Australian firm; and Rio Tinto a British-Australian multinational mining company.

Arroyo said the new quarterly system replaced the traditional annual benchmark pricing for iron ore.

Although he expects a big 9.5 percent rebound in world trade, Arroyo said the main problem right now is the new quarterly arrangement that opens “more room for speculation and volatility.”

Arroyo said the new system or oligopoly of the three sellers were presented to the Cabinet meeting presided by the President who gave immediate instructions to the DTI.

“The President has directed DTI to look into solutions on how to counteract this,” Arroyo said. “So the DTI will be looking into solutions.”

In his conservative assumption, Arroyo said a 100 percent increase in iron ore prices will lead to about 30 percent increase in steel prices that could probably impact on the local construction sector starting in the latter part of this month.

Arroyo said the Philippines is currently importing iron ore and steel at about $1billion annually.

He said one solution being looked into is the United States which is offering cheaper iron ore prices, being a net exporter of the chief ingredients of iron ore, coking coal and scrap.

“So the US offers cheaper iron ore and steel. So we may turn to them as one avenue to explore,” Arroyo said. (OPS)

PGMA off to Vietnam for the 16th ASEAN Summit: Then to US, Spain

President Gloria Macapagal Arroyo will leave Thursday (April 8) for Hanoi, Vietnam to attend the 16th Association of Southeast Asian Nations (ASEAN) Summit and Related Meetings.

The summit, which will run from April 8 to 9 has the theme “Towards the ASEAN Community: From Vision into Action.”

The Summit is expected to discuss measures to accelerate the development of communities and the implementation of the ASEAN Charter, strengthen cooperation among members, improve ASEAN capacity to challenges and expand cooperation with other partners.

ASEAN leaders will likely focus on concrete actions towards strengthening the ASEAN Community by 2015, the Philippine Department of Foreign Affairs (DFA) said.

Among the other areas for discussions are the implementation of the ASEAN Charter and Roadmap for the ASEAN Community, ASEAN Connectivity, Sustained Recovery and Development, Climate Change and other global challenges. 

Vietnam has assumed this year’s chairmanship of the ASEAN Summit as it observes its 15th year of membership in the 10-nation ASEAN.

President Arroyo will be accompanied by a lean delegation that includes Foreign Affairs Secretary Alberto Romulo, Finance Secretary Margarito Teves, Trade and Industry Secretary Jesli Lapus and Press Secretary Crispulo Icban, Jr.

The ASEAN Summit is the first of President Arroyo’s three foreign engagements spanning one week. 

On April 12-13, she will be at Washington DC to attend the 40-nation Nuclear Security Summit to be hosted by US President Barack Obama.

From the US, she will proceed to Spain for an official visit from April 15 to 16 and to receive the Premio Internacional Don Quijote de la Mancha for promoting Spanish language and culture in the Philippines.

At the Hanoi Summit, President Arroyo will attend the ASEAN Heads of State Meeting with the ASEAN inter-Parliamentary Assembly (AIPA) Representatives at the National Convention Center.

She will join the nine other heads of state and government during the formal opening ceremony at the NCC’s Main Meeting Hall where Vietnamese Prime Minister Nguyen Tan Dung will deliver his opening statement. After the opening rites, President Arroyo will join her counterparts at the Plenary Session. In the evening, she will attend a “working dinner” among the ASEAN heads of state at the Melia Hanoi Hotel. 

The next day, she will join the nine ASEAN leaders at the ASEAN Summit’s Retreat Session. Before a scheduled luncheon to be hosted by Vietnamese President Nguyen Minh Triet at the Presidential Palace, President Arroyo will pay a courtesy call on the Vietnamese leader. 

The DFA said that among the Philippine initiatives in the Summit is the offer to host the ASEAN Intergovernmental Commission on Human Rights’ (AICHR) Secretariat in Manila.

The AICHR, which was launched at the 15th ASEAN Leaders’ Summit in October 2009, is the overarching human rights institution in the region, the establishment of which was agreed upon in Cebu during the ASEAN Retreat in 2007.

DFA further said the Philippines will support the ASEAN Connectivity Initiative and call on the members of the High Level Task Force (HLTF) to focus on the development of a digital highway and the use of ICT as a tool for connectivity.

At the same time, the DFA said that the issue of climate change will be among the Philippines’ priorities during the Summit, the country having experienced recent calamities such as typhoons Ketsana and Parma.

The DFA stressed the Philippines will continue to assist in building an ASEAN community “resilient to climate change” and will call on ASEAN to identify mutual concerns and interests, and agree to engage actively and constructively in the way forward in climate change negotiations.

As chair of the 15th ASEAN Committee on Disaster Management, the Philippines will reiterate its commitment to shepherding the ASEAN member states towards the operationalization of the ASEAN Agreement on Disaster Management and Emergency Response (AADMER) Work Program 2010-2015, DFA said.

The Philippines will also seek ASEAN support for the 2010 Nuclear Non-Proliferation Treaty Review Conference in May. Guided by the principles of the Southeast Asia Nuclear Weapon Free Zone (SEANWFZ), the Review would be an opportunity for ASEAN to act in a concerted manner, added DFA. (OPS)