Philippines suspends Chinese-funded projects in wake of scandal

By Carlos H. Conde
International Herald Tribune
Published: September 25, 2007

MANILA: The fallout from a corruption scandal involving a $329 million telecommunications contract between the Philippines and China is widening.

This week, President Gloria Macapagal-Arroyo, whose dealings with Beijing have come under intense scrutiny, decided to suspend the implementation of more than $4 billion worth of various projects that were to be financed by Chinese money.

The suspension of the projects, including a major one to develop farmland, follows an uproar over whether government officials accepted kickbacks for awarding the lucrative telecommunications contract to ZTE, a Chinese firm, rather than to a Philippine rival. Arroyo, under increasing pressure to clear up the case, already had put that project on hold last week.

The additional suspensions, officials said, would enable the government to review the agreements and contracts signed by Manila and Beijing and several Chinese companies, this time making sure that they do not violate Philippine laws and guidelines and that other stakeholders, like business, farmers and nonprofit groups, are involved in the process.

On Tuesday, Arroyo said the decision to defer the projects was announced after the Chinese “indicated that they will try to understand our predicament.” She also announced the creation of the China Projects Oversight Panel that would oversee the implementation of Chinese-funded projects.
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The biggest project put on hold was a $3.8 billion investment by a Chinese company, Jilin Fu Hua, to develop 1.2 million hectares, or nearly 3 million acres, in the Philippines for the production of hybrid corn, rice and sorghum for export to China.

The suspension was due in part to the “strong objections” raised by Catholic bishops and farmers groups to the Jilin Fu Hua deal in the wake of the ZTE controversy.

“We won’t lose anything by conducting consultations,” Arthur Yap, the agriculture secretary, told reporters on Monday.

“It would be in the best interest of all the parties to temporarily suspend the implementation and go into deeper consultation with all possible stakeholders to come up with an acceptable mechanism.”

Dealings with China heated up last week when allegations during a Senate hearing suggested that the president’s husband, Jose Miguel, and the head of the elections commission, Benjamin Abalos, tried to intercede on behalf of ZTE. A businessman who lost in the bidding alleged during the hearings that Abalos, a key ally of the president, received payoffs from ZTE - a charge Abalos and the company have vehemently denied.

Arroyo also cited the “political noise” created by the ZTE controversy in deciding to suspend a $400 million “cyber-education” project, which would provide Internet access to schools around the country.

The project was to be financed by Chinese loans, and critics said the deal, like the one with ZTE, was also overpriced, especially considering that many Filipino schoolchildren do not have enough books or classrooms.

Many people here are concerned that negotiations for these projects were not transparent enough. Also, the Jilin Fu Hua project might violate the Constitution, which forbids foreigners from owning land in the Philippines, farmers groups say.

“Nobody knows what the guidelines were in getting these loans,” said Milo Tanchuling, secretary general of the Freedom From Debt Coalition, a nonprofit that tracks the Philippines’s indebtedness. He said that his group and several others had sought clarification from the Philippine government “but we were only given safe answers.”

Critics of the government have been urging Arroyo to cancel altogether these contracts and agreements with China.

In a letter to the Chinese embassy in Manila on Monday, the Peasants Movement of the Philippines urged Beijing to rescind at least 18 agricultural agreements which, according to them, “were made without public consultations and lumped into a package of midnight deals.”

The Chinese embassy in Manila did not reply to requests for comment on Manila’s suspension of the projects.

Donald Dee, chairman of the Philippine Chamber of Commerce and Industry, cautioned the government about canceling these contracts.

“A cancellation would be very insulting to the Chinese and we don’t want that to happen,” he said in an interview.

What the suspension does, however, is afford Manila the chance to review these projects. “We have to make sure that this is in accordance with acceptable processes,” Dee said.

Arroyo may pardon Estrada

By Carlos H. Conde
International Herald Tribune
Published: September 24, 2007

MANILA: A few hours after an anti-graft court convicted former President Joseph Estrada of plunder, officials of the administration of President Gloria Macapagal Arroyo were already talking about the possibility of a pardon.

The officials said a pardon for Estrada, who was sentenced Sept. 11 to a maximum of 40 years in prison for receiving payoffs and kickbacks before his ouster from office, could heal the nation. “Why not?” Sergio Apostol, Arroyo’s chief legal adviser, said of a pardon on the day of the verdict.

Over the weekend, Arroyo made it known through her advisers that she was indeed considering a pardon. “I’m hoping that we can do it before Christmas,” Ronaldo Puno, a political adviser to Arroyo, told reporters Sunday.

But not everyone in the Philippines welcomes the possibility of a pardon. Some are concerned that it could send the wrong signal and offset what was gained with Estrada’s conviction: a strong message that the Philippine justice system does catch up with powerful lawbreakers.

“What could ever justify granting amnesty or pardon to one who shamelessly feasted on power and greed?” 15 private lawyers who assisted in Estrada’s prosecution asked in a statement issued last week. “What message shall that send to those who wield power now and in the future?”

“Reconciliation without justice is meaningless,” the statement read. “Political accommodations in the name of unity and reconciliation are a sham.”

Estrada, a former movie actor who became president in 1998 and was driven out of power in a military-backed civilian uprising in 2001, is still hugely popular and remains a potent force within the political opposition.

The Arroyo administration hopes not only to stop Estrada from questioning Arroyo’s legitimacy but to prevent him and his supporters from capitalizing on the corruption scandals Arroyo is facing, said Benito Lim, a political scientist at Ateneo de Manila University. These scandals, Lim said, could become a serious threat to Arroyo’s presidency.

Apostol, Arroyo’s lawyer, told The Associated Press, “Hopefully, if this pardon is granted, it will remove one cause of political tensions.”

A pardon, Lim said, would be a politically astute move by Arroyo, who had been Estrada’s vice president and succeeded him when public outrage over the corruption charges, as well as allegations of womanizing and drinking, forced him to step down. “The guilty verdict legitimized her mandate,” he said. “She will become magnanimous once she pardons Estrada. It’s just a matter of time.”

The public seems to favor a pardon. In a survey by the Social Weather Stations, a Manila polling institute, respondents overwhelmingly said Arroyo should pardon Estrada.

Analysts say she has no choice but to try to heal old wounds, especially at a time when she seems particularly vulnerable from scandal. Last week, her husband, Jose Miguel Arroyo, was again thrust into the political limelight when testimony at a Senate hearing linked him to a contract the government had signed with the Chinese telecommunications firm ZTE.

A Filipino business owner testified that Jose Miguel Arroyo and Benjamin Abalos, an ally of the president who heads the election commission, had tried to get him to drop his bid for the contract, with Abalos offering him $10 million to do so. Arroyo, through his lawyer, denied any wrongdoing, while Abalos dismissed the charge as “ridiculous.”

The ZTE contract became so controversial that it has bumped Estrada’s conviction off the front pages of newspapers. On Saturday, Arroyo, in a move seen by her critics as an attempt to sabotage the Senate’s hearings on the scandal, ordered the deal suspended.

Military officials said Sunday that elements within the military were using the ZTE scandal to launch another “destabilization plot” against the government, which saw a coup attempt in 2003 and, according to the Arroyo administration, nipped another in the bud last year.

The scandal over the ZTE deal is only the latest in a series of corruption allegations against Arroyo’s administration to have been explored in Senate hearings in recent years, the most serious of which is the charge, backed by testimony and a widely circulated audio recording, that she rigged the 2004 elections. Arroyo’s opponents in Congress tried twice to impeach her over the charge but fell short of the necessary votes.

Attempts by the Senate to investigate that scandal and others were unsuccessful, largely because Arroyo, by executive order, prevented her officials from testifying in any congressional inquiry without her approval. Her Senate opponents tried to reopen the case this month, but her allies blocked the attempt.

The various scandals have taken a toll on Arroyo’s reputation; her trust ratings are dismal, far worse than Estrada’s. Analysts say that if Arroyo remains confrontational toward the Estrada camp, those sentiments could find expression in the streets.

Philippines shaken by charges of corruption

By Carlos H. Conde
International Herald Tribune
Published: September 18, 2007

MANILA: The husband of President Gloria Macapagal-Arroyo and the head of the Philippine elections commission were accused Tuesday of interceding on behalf of a Chinese telecommunications company that subsequently signed a $329 million contract with the government.

In his testimony at a senate hearing Tuesday, Jose de Venecia 3rd, chairman of a Filipino company that lost in the bidding, said the election commissioner, Benjamin Abalos, had intervened on behalf of the Chinese company to receive kickbacks.

Venecia also testified that Arroyo’s husband, Jose Miguel Arroyo, angrily shoved a finger in Venecia’s face during a meeting in March and told him to “back off” in his efforts to win the bid.

Venecia explained to senators that he took Arroyo’s gesture to mean that Amsterdam Holdings, Venecia’s company, should not participate in the bidding for the National Broadband Network project, which would link the Philippine bureaucracy’s telecommunications and Internet networks. He did not say that he believed Arroyo took kickbacks.

The government later announced the contract had been awarded to ZTE Corp., which says on its Web site that it is the largest listed Chinese telecommunications manufacturer and wireless solutions provider. ZTE’s phone lines were busy and the company did not reply to e-mailed requests for comment.

Venecia said Abalos, the chairman of the Commission on Elections, offered him a bribe of $10 million just to withdraw from the bidding. He told the senators that he had refused the bribe and that when he made public this month Abalos’s alleged offer, Abalos threatened to have him killed.

“It was Chairman Abalos who was pushing for the ZTE proposal,” de Venecia said under oath. “It was also Chairman Abalos who stood to receive for himself any kickbacks from the colossal overpricing” of the project, he added.

This scandal is just the latest in a string of corruption allegations against the Arroyo administration. And it came at a time when the government, encouraged by the economy’s strong showing in the first half of the year, has been trying to woo foreign investors and giving assurances that corruption in the Philippines, among the worst in Southeast Asia according to rankings by Transparency International, is being addressed.

It has also provided President Arroyo’s opponents more ammunition in a drawn-out political tussle that began with allegations that she cheated in the 2004 elections and that her husband wields more power than is generally accorded to a presidential spouse.

The issue has also pitted the administration against the opposition-controlled senate, which had invited government officials to the hearing but refused to appear.

Arroyo said she had instructed the transportation and communication secretary, Leandro Mendoza, to explain the contract not to the senate but to the Supreme Court, which recently issued a temporary restraining order on the project after a petition by Amsterdam Holdings.

At the Supreme Court, President Arroyo said in a statement Tuesday, “there are no politics and the court’s processes are based on evidence. We can determine there if the contract is legal and if it is in the interest of the public.” Last week, she said her government would honor its contracts.

Arroyo’s husband was reported to have left the country Monday, fueling speculation that he wanted to avoid being subpoenaed by the senate. His lawyer, Jesus Santos, dismissed Venecia’s allegations as black propaganda. “He’s in it for the media mileage,” Santos said.

The president’s husband has already faced accusations of corruption, among them that he received money from illegal gambling. He is widely regarded here as a power broker benefiting from his wife’s political influence, although he denies this. He has sued several journalists who dared to write about these allegations.

Abalos denied that he had attempted to bribe Venecia. “Do I have that kind of influence?” he said Tuesday. He called the charges “ridiculous.”

Abalos said in late August that he had met with ZTE officials in China and dined and played golf with them. On Monday, his lawyer said Abalos had merely introduced ZTE officials to Mendoza and other administration officials and that there was nothing improper about this.

ZTE, for its part, came out with a series of newspaper advertisements this month denying any wrongdoing.

In his testimony Tuesday, Venecia said his company had offered to build the project through a scheme that would be of no cost to government. The contract with ZTE, however, required a loan from the China Exim Bank. He also said the ZTE contract was overpriced by as much as 100 percent to account for the cost of kickbacks.

He said that Abalos offered the bribe in a meeting at the elections commission office in December. The alleged meeting with Jose Miguel Arroyo was meant, according to Venecia, to reconcile Venecia and Abalos.

As a result of Venecia’s testimony, there are now demands for the scrapping of the project. “This is corruption on a grand scale taking place at the highest levels of government,” said Renato Reyes, secretary general of the leftist group Bayan. “With these revelations, pushing through with the contract would be politically costly for the Arroyo regime,” he said.

Philippine ex-president guilty of plunder

By Carlos H. Conde
International Herald Tribune

The New York Times
Published: September 12, 2007

MANILA: A Philippine anti-corruption court on Wednesday convicted Joseph Estrada, the former president, of illegally acquiring wealth while in office and sentenced him to a maximum of 40 years in prison.

The court, called the Sandiganbayan, found Estrada guilty of plunder but acquitted him on a perjury charge. Estrada’s son and co-accused, Senator Jose Estrada, was acquitted on both charges.

The court also ordered the confiscation of several properties, including mansions, that Estrada acquired while in power, as well as hundreds of millions of pesos in two bank accounts. The court also ruled that Estrada was permanently disqualified from seeking public office.

The plunder case stemmed from allegations that Estrada received more than $85 million in kickbacks from tobacco taxes, commissions from the purchase of shares by a government insurance fund, payoffs from illegal gambling operators, and for using a fictitious name in a bank account. The perjury case was for allegedly misstating his income and assets.

“I thought the rule of justice would prevail here, but it’s really a kangaroo court,” Estrada told reporters minutes after the verdict was read. “I have always expected that this will happen,” he added.

Estrada, 70, has been in detention for more than six years now. He was ousted in an uprising in 2001 that arose from allegations of corruption, as well as accusations of womanizing and heavy drinking in the presidential palace.

The charges deeply offended the Catholic Church, leading it to organize, along with so-called “civil society” groups and leftist organizations, massive demonstrations against Estrada. President Gloria Macapagal Arroyo, who was Estrada’s vice president, took over the presidency in 2001 after the military withdrew support for him amid growing public protests dubbed People Power II. The original People Power revolt removed former President Ferdinand Marcos in 1986. Estrada had been in office for only two years.

Estrada, a former movie star who is hugely popular among the masses, has repeatedly denied the allegations against him, saying these were politically motivated. He accused the country’s elite, the Catholic Church, and civil society groups for conspiring against him. The uprising, he claimed, was a power grab.

Talking to reporters through a window at the courthouse after the verdict Wednesday, Estrada said he had hoped that, because an impeachment trial in Congress had been cut short by the “People Power” uprising, he could present his side at the Sandiganbayan. He said he had thought the court “was the only forum where I can ventilate myself and tell the people of my innocence.”

After his removal from power, the government created a special court in the Sandiganbayan to try Estrada. He suggested Wednesday that the court had been manipulated.

The verdict, Estrada said, was a “decision dictated by those people in power” as well as “a political decision.” He said he would appeal the decision within 15 days.

Estrada’s lawyer, Rene Saguisag, said the former president was ready to serve time at Muntinlupa, the country’s main prison facility in Manila, but the court said Estrada could continue to stay at his place of detention, which is actually his vacation house in a province just outside Manila.

Hundreds of his supporters marched near the Sandiganbayan on Wednesday while the police and military were on full alert. Security was tight, particularly near and around the presidential palace, apparently to make sure that a siege by Estrada’s followers, like the one that took place in May 2001, would not be repeated.

Indeed, the government carefully managed the events Wednesday. It suspended classes in dozens of schools near the Sandiganbayan. It initially banned live media coverage of the proceedings, but the Supreme Court overruled the decision. However, only the court’s cameras were allowed inside the courtroom, and it transmitted only the video of the clerk reading the verdict during proceedings lasting less than 15 minutes.

The court also read only the portion of the decision where the verdict was declared - not the whole decision itself. Estrada’s camp later theorized that this was probably meant to make sure that the proceedings were short, leaving no time for protests to develop.

The crime of plunder is punishable by death or “reclusion perpetua,” a life sentence which carries a penalty of a maximum of 40 years. The death penalty was abolished in the Philippines a few years ago. Estrada will only be eligible for parole after 30 years.

“We bow to the decision of the Sandiganbayan. We hope and pray that the rule of law will prevail,” Arroyo’s spokesman, Ignacio Bunye, said in a statement.

While Estrada’s supporters were saddened by the verdict, many Filipinos welcomed it, saying that the conviction was a sign of democracy at work.

“This is the last chance for the state to show that we can do it, that we can charge, prosecute and convict a public official regardless of his stature,” said Dennis Villaignacio, the special prosecutor in the case.

Joe Dizon, secretary general of PlunderWatch, a nongovernment group that monitored the trial, said Estrada’s conviction was a step toward more transparency and accountability in government.

A movie star for 40 years, Estrada’s life story is as dramatic as those of the characters he had portrayed in his films, which explains his immense popularity among the poor.

He was considered the black sheep of the Ejercito family, a moneyed and influential clan in Manila. He dropped out of high school and was promptly thrown out of the Ejercito home by his strict father.

Outraged, the young man, according to tales often repeated here, stopped using his real surname and picked Estrada out of a phone book.

To further spite his parents, Estrada entered show business. It was in the movies that Estrada excelled, garnering awards for his acting in some of the country’s most memorable films.

Arroyo offers amnesty to Philippine Communists

By Carlos H. Conde
International Herald Tribune
Published: September 7, 2007

MANILA: President Gloria Macapagal-Arroyo announced Friday that she had signed a proclamation offering amnesty to any members of the Communist Party of the Philippines and its armed wing, the New People’s Army, who have been detained, charged or convicted of criminal acts “in pursuit of political beliefs.”

Officials said that the amnesty program could restart the stalled peace process between the government and the National Democratic Front of the Philippines, the umbrella organization of various Filipino Communist groups led by the Communist Party. The talks stalled in 2004, when the Arroyo government rejected a rebel request to push the United States and the European Union to remove the New People’s Army from their lists of terrorist groups.

The negotiations suffered another setback last month when the Dutch police arrested Jose Maria Sison, the founding chairman of the Communist Party and the chief political consultant of the National Democratic Front during the negotiations, in Utrecht. Sison, who had lived in exile in the Netherlands since 1987, allegedly ordered the assassination of two former Communist rebels in the Philippines, Dutch prosecutors said.

Sison has denied the charge.

On Friday, a Dutch court heard defense arguments for dropping murder charges against Sison, and said it would rule next week on whether to continue the case, The Associated Press reported.

“There is an urgent need and expressed desire to extend amnesty” to Communist rebel groups, Arroyo said in a statement released Friday. She went on to say that she saw it “as an instrument of reconciliation, and as a path for their return to a peaceful, democratic, and pluralistic society.”

Arroyo said this week that an amnesty program would be a principal component of her goal to improve the economy and end the four-decade-old insurgency by the time she steps down in 2010.

Under the program, the government would spend about $10 million to assist the rebels in their transition to civilian life. “Amnesty centers” would be established around the country to process applications.

But on Friday the Communist Party spokesman, Gregoria Rosal, criticized the amnesty program as a “gimmick” that would be ignored and rejected by the members of the party, The Associated Press reported.

Past governments offered amnesty to Communist guerrillas but failed to end the insurgency, mainly because of the persistence of many of the conditions that have fueled the movement - poverty, landlessness, injustice.

Although communism began to take root here after World War II, it was only after Sison and a group of radical students ignited the party, in 1969, that the insurgency flourished. The New People’s Army grew especially quickly during the dictatorship of Ferdinand Marcos, with as many as 12,000 armed regulars by the time he was ousted in 1986.

The Communist movement suffered a self-inflicted setback in the late 1980s, when a purge to eliminate suspected government spies in its midst led to the killing and torture of hundreds of members. But today, the Maoists claim to have members and fighters in practically every Philippine province, starting offensives almost on a weekly basis. In recent years, favored targets of their attacks have been property owned by businesses that refuse to pay what the rebels call “revolutionary taxes.”

The military estimates the New People’s Army’s strength at 7,000 armed regulars spread across the archipelago. The authorities consider them the country’s main national security threat. Since 1969, more than 40,000 people - guerrillas, soldiers and civilians - have died in the conflict, according to the military.

Economic optimism spreading in the Philippines

By Carlos H. Conde
International Herald Tribune
Published: September 7, 2007

MANILA: A year ago, Bernadette Sembrano took a gamble.

Using her savings and some money borrowed from the bank, she bought a piece of land in a middle-class suburb here and built two rows of townhouses on it.

She intended to sell the units to overseas Filipino workers, the main drivers of a property boom in this island nation of 85 million. But so far she has only found one buyer for the eight units.

“I am such an optimist,” said Sembrano, who works days as a television journalist.

Her optimism is widespread in the Philippines these days, where the government last week reported that the economy grew at an annual rate of 7.5 percent in the second quarter, the fastest rate in 20 years. It is a remarkable event for a country plagued by political scandals and military mutinies - two perennial problems that have prevented the country from emerging from an economic rut.

Stronger economic growth is already changing the lives of many ordinary citizens, who have new jobs and see bridges and roads springing up.

There are doubts about the true vigor of the economy - related to increased government spending ahead of an election and the sustainability of fiscal overhauls.

And, like elsewhere in Southeast Asia, the Philippines is vulnerable to a possible slowdown in the U.S. economy if problems in the housing market begin to spill over into other sectors.

But for a country that has seen so much turmoil and poverty since the 1970s, the Philippines’ recent economic resurgence, however fragile, has nevertheless been a welcome surprise to economists.

President Gloria Macapagal Arroyo, a U.S.-educated economist, has taken credit for much of this, having implemented measures - she imposed higher taxes and improved revenue collections, to name two - that her political opponents and critics relentlessly questioned and opposed.

“While our economy has reached a new level of maturity and stability with one of the strongest macroeconomic fundamentals in two decades, we should not rest,” Arroyo said after the release of the latest growth figures. “We’re the only administration that has not experienced negative growth in any quarter. ”

One person benefiting is Alisa Lugar-Escanlar, 31, who quit her job as a restaurant manager early this year and applied as a call-center agent at eTelecare Global Solutions, one of the country’s largest call-center companies.

She is happily riding out a boom in the Philippines’ growing services sector, which makes up half the economy and grew 8.4 percent in the second quarter.

Outsourcing services are transforming the lives of thousands of Filipinos in ways not seen in the past three decades.

Call centers have been credited with reducing the number of unemployed and creating a new class of moneyed, mostly young Filipinos. The Asian Development Bank estimated that 11 percent of those entering the labor force up to 2010 would be hired by call centers.

“I didn’t want to work in a call center at first but I tried it and realized that I liked it better than my old job,” Escanlar said. Her life, she said, has been much better since then because she and her husband are now able to save money and buy more.

One of the most visible areas of growth is public construction, which grew at an annual rate of 39.6 percent in the second quarter. New bridges and roads are everywhere, particularly in the capital.

Although the government admitted that the rise in public infrastructure spending is linked to election spending in May, Arroyo emphasized last week that funding for infrastructure was “in the front line in our campaign to reduce poverty.”

Such spending could continue, said Luz Lorenzo, an economist at ATR Kim Eng Securities in Manila. “Who is doing the spending? The government,” Lorenzo said. “Will it stop? No. Do they need to borrow money? No, because most of these are domestically financed.”

The optimism has also given a lift to the stock market, attracting ordinary individual investors for the first time.

Phillip Hagedorn, president of the Mutual Fund Management Company of the Philippines, called the increase in retail investors “unprecedented,” which he said indicated a growing confidence in the market among Filipinos.

The benchmark stock index in the Philippines is up 11 percent so far this year, compared to a 23 percent gain for Vietnam and a 23 percent rise for Thailand. China’s CSI 300 index is up 164 percent this year.

Arroyo said last week that the challenge now is to ensure that this growth trickles down to the poorest Filipinos, many of whom are skeptical about the government’s pronouncements of development.

“My life, as well as that of my family, certainly has not improved,” said Maricel Sevillano, a 21-year-old farmers’ daughter who moved to Manila after her parents’ death five years ago and has been working as a housemaid since. Three other sisters are also working as maids. Unable to finish high school, Sevillano left Bukidnon Province, in the south, to try her luck in Manila - a familiar story among poor Filipinos.

Indeed, much of the skepticism toward Arroyo and her administration has to do with the myriad of problems the country continues to face.

Average income is less than $2 a day. Health care is meager, with malnutrition still among the leading causes of death among children and infants. Forty-seven percent of Filipinos rate themselves as poor, according to the Social Weather Stations, a Manila research institute.

On top of these problems, the country is saddled with communist and Islamic insurgencies that are driving away investment.

Although some major companies, like Texas Instruments, have chosen the country over China or Vietnam, wariness remains among investors, mainly because there is still much to be done.

“Power cost remains expensive. Infrastructure should also be developed; ports such as airports and seaports and expressways are not yet completed,” Toshifumi Inami, president of the Japanese Chamber of Commerce and Industry of the Philippines, told reporters last week. He pointed out that in the last five years, the number of Japanese companies in the Philippines remained unchanged, at 550.

Arroyo appears aware of the need to attract investors. “Her mantra nowadays is ‘Invest. Invest. Invest,’ ” her press secretary, Ignacio Bunye, said Monday.

Defaults on risky mortgages in the United States have been sending shivers throughout global financial markets, affecting places as far away as here. In August, nervous foreign investors - in an apparent effort to shield themselves from potentially risky emerging market economies - sold Philippine stocks and other assets, making the country’s peso the worst-performing of Asia’s 10 most actively traded currencies, according to Bloomberg.

The U.S. subprime crisis is beginning to spook some property developers here, too. At least one developer, Landco Pacific, disclosed last week that more than half of the revenues from its projects in the Philippines were from Filipinos working abroad, most of them in the United States.

“The trouble is, it seems nobody has an idea how big this thing is and where it is headed,” said Landco’s chief operating officer, Francis Ceballos. “There’s a lot of uncertainty. What we have right now is an uneasy calm.”

The Philippines - like neighboring Thailand and Indonesia - is largely dependent on exports, with most of them going to the United States, Japan and China. Volatile oil prices and a potential slowdown of the U.S. economy pose risks to the economy here, the government said.

Sembrano, the television journalist who still has seven townhouses for sale, said that she honestly believes things will get better. But even she admits, “Building the property was the easy part” - selling it was another matter.