| National Affairs
Glenda damage P7.4 billion Business World 21st Jul 2014
Damage to infrastructure -- including roads, bridges, flood control structures and schools -- stood at P1.06 billion. On the other hand, damage to agriculture -- in terms of crops, fisheries and agricultural facilities -- was at P6.3 billion. As of this reporting, the NDRRMC is still waiting for a report from the Department of Education and Commission on Higher Education on the overall damage among schools and other educational facilities. A total of 111,372 houses were destroyed in Regions I, III, IV-A, IV-B, V, VIII and the NCR. The death count also moved closer to the 100-mark. The disaster council reports 97 people dead, 437 injured and six missing. Meanwhile, as of 5:00 p.m. Monday, typhoon Henry was spotted 420km east of Aparri, Cagayan, the state weather bureau PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration) said.
Typhoon to cut GDP growth in Q3 Inquirer 21st Jul 2014
Typhoon “Glenda” likely shaved at least P7.8 billion to as much as P10 billion off the country’s third-quarter economic output a day in terms of property damage as well as business and consumption disruptions, an economist from Citigroup estimated. In a research note dated July 17, Citi economist for the Philippines Jun Trinidad said the wrath of Typhoon Glenda (international name: Rammasun) could translate to a potential loss of 0.2 percent of real gross domestic product (GDP) a day from power outage and other disruptions. Citi assumed “no power, no output” and likewise factored in disruptions and consumption slowdown arising from Typhoon Glenda. However, the research noted that slower fiscal spending could cut GDP output much more than typhoon disasters. Although there were not so much rains and flood, Trinidad said strong winds of about 120 kilometers an hour had brought down transmissions lines, caused private/public property damage and resulted in transport/distribution bottlenecks. He noted that more than 80 percent of Metro Manila—the country’s services capital—was plunged into darkness on July 16 at the height of the strongest typhoon to make landfall this year.
NEDA on foreign aid: Right idea, wrong context Manila Times 21st Jul 2014
A few days before Typhoon Glenda flailed Luzon, National Economic Development Authority (NEDA) Director-General Arsenio Balisacan made some rather timely comments at a meeting of the UN-sponsored Development Cooperation Forum in New York. For the efficient use of foreign humanitarian and development aid, Balisacan said it is critical that it be “coordinated” with the national government. “Bypassing country systems and not coordinating with government tend to overburden local units tapped by development partners to carry out tasks. It unduly competes with government over needed manpower and other logistical resources,” Balisacan explained. “This undermines the ownership and accountability of government. It also results in inefficiency; as such external resources may not be aligned with government priorities. Moreover, it tends to defeat efforts to build domestic capacity to effectively address disasters by weakening rather than strengthening local institutional arrangements and initiatives.” Taken at face value, Balisacan’s comments are absolutely valid. A centrally-managed framework for relief and redevelopment working according to a single, comprehensive plan is the most efficient paradigm, and there are enough real-life examples of such systems that the concept is above debate. The system in Japan is perhaps the best-known; a little closer to home, the remarkable ability of the Province of Albay under Governor Joey Salceda to shake off frequent calamities is held up as the example worth emulating.
U.S. Government Supports Disaster Risk Reduction in Metro Manila US Embassy, Manila 17th Jul 2014
The U.S. Government is partnering with Catholic Relief Services (CRS) to build community resilience to floods and other disaster events in Metro Manila. On July 14, the U.S. Government, through the U.S. Agency for International Development (USAID), provided an additional PHP 107.5 million (US $2.5 million) to CRS for disaster risk reduction (DRR) in the Philippines. The support will provide training and support to communities in 15 high-risk, flood-prone barangays in Rizal and the National Capital Region, directly benefiting an estimated 43,200 people. Through the program, CRS will provide training to barangay officials and community members on areas including risk assessment and mapping, participatory disaster risk reduction and management, and contingency planning. The program will also build community resilience by undertaking preparedness and mitigation projects, such as waterway and community clean-up campaigns and improvements to evacuation centers and early warning systems, helping to lessen the impact of future flood events.
Philippines positioned as region’s franchise hub Business World 17th Jul 2014
The Philippines is in the best position to become Southeast Asia’s franchise hub under the looming regional economic integration that will formally start next year, private and public sector officials said yesterday. Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said in his keynote address at the Franchise Asia Philippines 2014 in Pasay City that foreign brands should take advantage of the country’s rosy economic prospects.
Gov’t to appeal high court’s DAP ruling Business World 14th Jul 2014
THE GOVERNMENT will appeal a Supreme Court decision declaring a controversial stimulus program as unconstitutional, President Benigno S. C. Aquino III yesterday said. Mr. Aquino, in a televised address, defended the Disbursement Acceleration Program (DAP) and said he wanted the high court to “more fully and more conscientiously examine the law.” “It is clear that the Supreme Court has much to consider that they may better clarify their decision regarding DAP; perhaps they can even identify DAP’s negative effect on the country,” the president added. The high court, voting 13-0 with one abstention, last July 1 struck down “acts and practices” under the DAP for violating constitutional provisions on the transfer of appropriations and separation of powers. The government, which insists that the program has led to uncounted economic and social benefits, has until July 19 to file its appeal.
Philippine President Defends His Spending FT 14th Jul 2014
Philippine President Benigno Aquino III defended his use of public money for an economic-stimulus program, asking the Supreme Court in a nationally televised speech on Monday to reconsider its recent ruling that the spending had been unconstitutional. "Help us, help our countrymen. We ask that you review your decision," he said, addressing the justices and their 13-0 ruling on July 1, with one justice abstaining. "My message to the Supreme Court: We do not want two equal branches of government to go head-to-head," Mr. Aquino said, referring to the judiciary and the executive, represented by him. Mr. Aquino said he had the national interest at heart when he personally approved billions of dollars in spending on a range of public projects that weren't included in the national budget approved by Congress. The top court said he needed congressional approval. Mr. Aquino is being threatened by the public, politicians and a student group with an impeachment drive in the wake of the spending ruling. While the impeachment effort is expected to fail—Mr. Aquino isn't accused of personally taking any money and his party controls both houses of Congress—it threatens to undermine his legacy as a president who fought long-standing corruption in the country.
In Philippines, Vice President Stands Out for 2016 Race The Wall Street Journal 10th Jul 2014
As neighboring Indonesia finished its dramatic presidential race on Wednesday, politicians in the Philippines are already maneuvering ahead of presidential elections in May 2016 that could be no less pivotal for the country’s future. New polls suggest that Vice President Jejomar Binay has it all to lose. Social Weather Stations, the Philippines’ national polling service, said on July 7 that 82% of Filipinos are satisfied with Mr. Binay’s performance, with only 9% dissatisfied. The result portrays Mr. Binay as a far more popular politician than the other national leaders covered by the survey, and also puts him way ahead of previous vice presidents in the popularity stakes four years into their tenure. The 71-year-old vice president has already voiced his intention to run for the top job in 2016.
US investors’ interest in PH seen to be waning Inquirer 9th Jul 2014
American companies appear to be shying away from making too much investments in the Philippine manufacturing industry, as the world’s largest economy makes a renewed push to bring more jobs back on US soil, according to the Department of Trade and Industry. Trade Secretary Gregory L. Domingo admitted that, based on his observations during their roadshow in the United States last month, the interest level of US companies was not as strong as that seen in European firms, as far as the manufacturing sector is concerned. “What’s happening in the US now is that their government is bringing back more jobs there or at least to the immediate neighboring countries like Mexico. That’s their focus now. Before, their focus was China, but given the rising cost of labor in China, it seemed more effective for companies [to maintain manufacturing facilities in the United States],” Domingo said. But the DTI chief clarified that this was only true for manufacturing. In terms of services, however, the Philippines continues to generate huge interest and significant leads from US companies, he said.
Customs
European Commission backs PH bid for EU preferred status The Manila Times 18th Jul 2014
The European Commission (EC) intends to favorably endorse to the European Union (EU) parliament the Philippines’ application for Generalized System of Preferences Plus (GSP+). GSP+ is a program under the EU Generalized System of Preferences (GSP) scheme that offers preferential tariffs to exports from eligible countries in the form of zero tariffs on all products covered by the scheme. Based on a review of the Philippine application, the EC concluded that the Philippines has met eligibility criteria for GSP+. In particular, the note verbale from the EC cited that the PH has ratified and is implementing international conventions required for inclusion in the GSP+ program. The Philippines is already a beneficiary of the GSP scheme, which provides for reduced tariffs or zero tariffs to a limited number of products. Once PH application to GSP+ is approved, PH exporters will enjoy zero tariffs on all products covered by the scheme, including big-ticket items that the Philippines is currently exporting under the regular GSP such as animal/vegetable fats and oils, prepared foodstuffs, machinery and mechanical appliances; chemical products, textiles and garments, and plastic products.
DTI sees smooth flow of goods in and out of Manila with new agreements with importers The Inquirer 8th Jul 2014
The Department of Trade and Industry expects the flow of goods in and out of the Manila port to start easing within the next several weeks, following the issuance of a reminder to importers to clear the over 7,000 containers stranded at the port. “The DTI is involved in a government committee that develops plans in decongesting the ports in the city of Manila. Now that traffic of delivery trucks and vans in Manila City is easing, it is essential that the transport of products to and from the ports and their distributors is fast and frequent to decongest the ports and to provide supplies in the markets for consumers’ purchases,” Trade Undersecretary Victorio Mario A. Dimagiba said in a statement issued Tuesday. According to Dimagiba, they have started prompting importers to immediately get their loaded containers as soon as these are cleared by the Bureau of Customs. DTI has likewise urged industries, as well as warehouse owners and operators to cooperate and ensure that their businesses are open at night and during weekends to accept deliveries, according to Dimagiba. Dimagiba explained that the truck congestion has been addressed and the DTI could now address the container pile-up at the Manila port. He stressed that the truck ban policy being implemented in Manila — which has caused the truck congestion at the port — should no longer be a concern given the so-called 24/7 express lane for containerized trailer trucks. This lane runs through the innermost north and southbound lanes of Roxas Boulevard all the way to Anda Circle, as well as the outermost north and southbound lanes from Anda Circle up to R10.
Container-van crisis nears tipping point Business Mirror 8th Jul 2014
UNLESS President Aquino intervenes, a crisis involving empty container vans could reach its tipping point very soon, and this could hurt the Philippine economy. This fear was raised after the Manila International Container Terminal (MICT) issued a circular stating that it would no longer accept “empty containers for export, due to yard utilization reaching 100 percent.” That circular took effect at the close of business hours on July 8. That crisis—which showed that the MICT and South Harbor yards are now 98-percent and 90-percent full, respectively—was caused, in part, by a confluence of factors, according to Roberto Bayocot, president of the Confederation of Truckers Association. These include the longer processing time for import papers, courtesy of Customs Commissioner John P. Sevilla; the truck ban imposed by Mayor Joseph “Erap” Estrada of Manila, and the anti-colorum-vehicle drive of the Land Transportation Franchising and Regulatory Board (LTFRB). The longer processing time for import papers not only resulted in undue delays in even the release of the import papers of the country’s top companies, but also in yards becoming congested with offloaded containers. It reached a point where importers have to face the prospect of paying an additional $450 in congestion and terminal fees. Coupled with Estrada’s truck ban and the LTFRB’s campaign, the congestion worsened to such a degree that even the yards of private companies are experiencing the pressure.
Importers urged to move 7,000 containers from Manila ports Manila Times 8th Jul 2014
The Department of Trade and Industry (DTI) urged local importers to help ease port congestion through the speedy removal of 7,000 containers from Manila ports. “Now that traffic of delivery trucks and vans in Manila City is easing, it is essential that the transport of products to and from the ports and their distributors is fast and frequent to decongest the ports and to provide supplies in the markets for consumers’ purchases,” DTI Undersecretary for Consumer Protection Group Victorio Mario A. Dimagiba said. DTI is part of a government committee that develops plans to decongest the ports in Manila. Initially, the DTI urged industries and warehouse owners/operators to cooperate and ensure that their businesses and warehouses are open to accept deliveries at nighttime and weekends. In a recent committee meeting, the Department of Finance led the crafting of action plans in order to further reduce the congestion of Manila ports.
Defense & Security
Thailand, PH to push maritime code of conduct protocols Interaksyon 18th Jul 2014
Senior officials of China and members countries of the Association of Southeast Asian Nations (Asean) are to hold a dialogue in October this year to discuss the full implementation of the Declaration on the Code of Conduct (DOC) and also to try for the conclusion of the Code of Conduct (COC), Acting Thai Foreign Minister Sihasak Phuangketkeow said on Friday. Phuangketkeow is currently in Manila to meet with Foreign Affairs Secretary Albert del Rosario and discuss to with him the two countries' bilateral relations and the political situation in Bangkok. During a press conference, the Thai official confirmed that Thailand will continue to be a country coordinator for the Asean-China bilateral dialogue.
Philippines Military Goes on Shopping Spree WSJ 17th Jul 2014
Dozens of global defense companies showed off their latest weaponry on Thursday at the first major defense exhibition in 15 years in the Philippines, which is aiming to revamp its military amid territorial disputes with China. The Southeast Asia country has several open tenders for defense equipment, most of them relatively small. Manila aims to spend $1.8 billion on new equipment by 2017—a big increase over previous years but still modest by regional standards. Manufacturers are keen to win those early contracts, which they see as entry points to more lucrative orders in years to come. Defense heavyweights present include Lockheed Martin LMT +0.24% and Textron, both of the U.S., as well as Thales HO.FR -1.04% of France, Saab SAAB-B.SK -1.05% of Sweden, and the defense arm of European aerospace giant Airbus. Military brass mingled with company executives at the bustling exhibition, as flashy models of drones and fighter jets vied with gun-toting young women for the visitors' attention. "The Philippines looks like being one of the next Asian tigers," said Thomas Webster, regional director of the Textron-owned Beechcraft Defense Co., of Wichita, Kan. "And Southeast Asia is a growing market generally—most of the military equipment here is 40 years old." Beechcraft is competing for a Philippine order for six close-air-support aircraft—whose task is to bomb targets that threaten ground troops—valued at around $114 million, Mr. Webster said. But he added the winner of the initial contract potentially stands to gain a subsequent order for 18 more planes. Winning here would also significantly boost the company's chances of landing coming deals in neighboring Malaysia and Vietnam, he added. Unlike in the U.S. and Europe, defense spending in East Asia is rising fast.
The Philippines Offer US$1.5bn to Modernize its Armed Forces Defense Studies 15th Jul 2014
Manila hopes by 2027 to have control of the airspace over its territories, as well as maritime patrol capabilities that include patrol and surveillance coverage for up to 200 nautical miles in its exclusive economic zone (photo : Timawa) The Philippines has offered a US$1.5 billion budget to defense contractors around the world for phase one of its three-tier armed forces modernization program. It wishes to strengthen its bargaining chips in the dispute over the South China Sea's disputed territories, reports the US Defense News Weekly. In a recent dispute over the South China Sea, the Philippines has attempted to gain international support, but was tied down by its lagging military equipment, said the Global Times, the Chinese daily newspaper under the supervision of the Communist Party. The main motivation for the program of modernization is China's assertive claims in the South China Sea that have raised alarms in the region and from the US. Tthe Philippines has decided to give the US and Japanese navies more access to Philippine naval facilities. In addition, workshops attended by senior US military officers will be held to illustrate the needs to bolster Philippine armed forces.
18 killed in Philippines clashes Business Standard 15th Jul 2014
At least 18 people were killed and two others injured Tuesday in clashes between government troops, militants, and members of the New People's Army (NPA) in southern Philippines, military officials said. Those killed were 13 NPA guerrillas, four militiamen belonging to the Manobo tribe, and a soldier, Xinhua reported.According to the officials, the fighting broke out at around 5.30 a.m., when an undetermined number of NPA guerrillas attacked a community of Manobo tribe at Santa Irene village, Prosperidad town, in Agusan del Sur province.
Letter of Credit for F/A-50 to be Opened Within 7 Days Defense Studies 9th Jul 2014
The letter of credit (LOC) for the purchase of the South Korean F/A-50 "Fighting Eagle" will be opened within seven days, Defense Undersecretary for Finance, Modernization, Installation and Munitions Fernando Manalo said Tuesday. "The LOC will be opened within seven days starting today (Tuesday)," Manalo added, without giving further details. An LOC is a document issued by a financial institution, or a similar party, assuring payment to a seller of goods and/or services provided certain documents have been presented to the bank. Contract for the Korean Aerospace Industries (KAI) jet aircraft, of which the Philippines has ordered 12 units for P18 billion, was signed last March 28. Upon opening of the LOC, two F/A-50 jet aircraft are expected to be delivered within 18 months. The next two units will be delivered 12 months later and the remaining eight jet planes in staggered basis within eight months.
Payment for Israeli Upgraded APCs to be Done in Three Tranches Defense Studies 8th Jul 2014
The Department of National Defense (DND) announced that the payment for the P882 million upgraded armored personnel carrier (APC), bagged by Israeli defense manufacturer Elbit Systems Ltd., will be done in three tranches. Dr. Peter Paul Galvez, Defense spokesperson, said first payment will be pegged at P405 million, the second will be P335 million and the third at P142 million. Elbit Systems Ltd., formally announced the signing of the P882 million deal (roughly USD20 million) last June 22. Upgrades include 25 mm unmanned turrets, 12.7 mm remote controlled weapon stations (RCWS) and fire control systems (FCS) for 90 mm turrets. The APCs, which are 28 in number, will be supplied over a one-year period. The contract marks a significant breakthrough for Elbit Systems, as it is the first one awarded to the company in the Philippines.
Economics
DTI helps SMEs prepare for Asean integration Sun Star 21st Jul 2014
THE Department of Trade and Industry (DTI) 7 said it is intensifying the Small and Medium Enterprises (SME) Roving Academy to help the sector prepare for next year’s Association of Southeast Asian Nations (Asean) integration. DTI 7 Director Asteria Caberte said her office already conducted trainings for 689 SMEs across four provinces in the region as of June 30. Among the trainings conducted are on entrepreneurship, financial management, product pricing and costing as well as packaging and labeling, product design and development and greening the tourism industry. Caberte said “greening the value chain” or including ecological practices in the company’s business processes is becoming popular in the sector.
‘Typhoons, scandals pose risks to growth’ Manila Times 20th Jul 2014
FREQUENT typhoons and recent controversies involving top-level officials’ spending of public funds could derail the government’s fiscal performance in the third quarter, posing risks to the country’s economic growth target of 6.5 percent to 7.5 percent this year, the lead economist of a major bank said. “Combined with government underspending attributable to the Disbursement Acceleration Program [DAP] controversy and the negative effects of Glenda on Southern and other parts of Luzon are likely to have a drag on the third-quarter 2014 growth as well,” Emilio Neri Jr., Bank of the Philippine Islands lead economist, said in an e-mail to The Manila Times. The Presidential Palace put the latest estimates of Glenda’s damage on agriculture and infrastructure at P7 billion. That includes the destruction of rice, corn and high value crops and livestock in Central Luzon, Southern Tagalog, Bicol, Metro Manila and the Cordillera Autonomous Region. Meanwhile, the Supreme Court’s recent declaration of the DAP as unconstitutional is expected to hamper development projects relying on the program for funding, which, in turn, could weigh on government spending in the months ahead.
BOP swings back to deficit Manila Times 20th Jul 2014
The Philippines’ balance of payments (BOP) slipped back into a deficit in June from a surplus in May, and deeper into negative territory for the year to date or the end of the first half. Official central bank data shows a $24 million payments deficit for June, reversing the $373 million surplus posted in May, as well as the surplus of $692 million recorded a year earlier. The Bangko Sentral ng Pilipinas (BSP) released the figures on Friday without offering any explanation for the nearly $400 million reversal of the BOP accounts in the month from May to June. Gains posted this year – February and May – have been attributed to positive management of the central bank’s foreign exchange operations and higher exports, while deficits can be traced to government payments of foreign-denominated debt obligations, unfavorable exchange rate fluctuations, or declines in exports. June export figures have not yet been released, but the country’s export position improved in May, recording 6.9 percent growth year-on-year, following a moderate gain of 1.3 percent in April.
Philippines falls in innovation ranking Business World 19th Jul 2014
THE PHILIPPINES slipped in an annual global ranking that assesses economies based on their innovation capabilities and measurable output. The country placed 100th out of 143 in the Global Innovation Index (GII) 2014 of the World Intellectual Property Organization, Cornell University, and INSEAD business school, from 90th out of 142 last year. Bhutan was included in the ranking for the first time. The Philippines’s overall score went down to 29.87 out of 100 from 31.18 a year earlier. Switzerland remained the top innovator (64.78 points), followed by the United Kingdom (62.37), Sweden (62.29), Finland (60.67), and the Netherlands (60.59). At the bottom were Sudan (12.66 points), Togo (17.65), Yemen (19.53), Myanmar (19.64), and Guinea (20.25). The Philippines’ overall score of 29.87 points was the average of its innovation input sub-index score of 32.9 (down from 34.7) and innovation output sub-index score of 26.8 (up from 22.9).
Glenda no threat to inflation – BSP Manila Times 18th Jul 2014
The devastation caused by Typhoon Glenda on property, livelihoods and businesses this week will not wreak havoc on inflation, according to initial assessments made by the central bank in the aftermath of the storm. “The extent of the damage caused by Glenda is still being assessed, but from what we have seen and from what the NDRRMC has reported, it looks like the effect of Glenda would be substantially less than the effects of stronger typhoons that struck the country in recent years,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. told reporters on Friday. NDRRMC refers to the government’s National Disaster Risk Reduction and Management Council. Initial government estimates showed that the typhoon’s damage to property exceeded P5 billion, with P892 million in infrastructure and P4.529 billion in agriculture. The Department of Agriculture said agriculture and fisheries in 15 provinces in four regions were affected by Glenda, including Quezon province, all of Mindoro, the entire Bicol Region, and the provinces of Leyte, Southern Leyte, Biliran, Samar, Eastern Samar, and Northern Samar in the Eastern Visayas.
BOI H1 investment approvals down 38% Manila Times 18th Jul 2014
The Board of Investments (BOI) approved 100 projects in the first half of 2014 worth P149.45 billion, 38 percent less than the P240.74 billion posted in the same period last year. BOI Managing Head and Undersecretary Adrian Cristobal Jr. traced the decline to the drop in power projects to P90.74 billion recorded for the sector in the first half of this year compared with last year’s big-ticket investments in the sector totaling P171.73 billion, as well as an increase in the lower-value mass housing sector. Cristobal added that although the value of approved investments declined, BOI-approved projects generated more employment opportunities during the first semester of 2014, increasing by 35 percent to a total of 25,805, compared with 19,182 in the same period last year. “The employment generation per project cost reveals higher employment gains which were noted at about 112 percent,” Cristobal said. Among specific sectors, the Electricity, Gas, Steam and Air Conditioning Supply Sector (e.g., power generating plants, renewable energy projects) recorded the largest share of investment commitments with P90.74 billion or a 61percent share of total investments; followed by the Real Estate Activities, specifically, the Mass Housing sub-sector with P20.28 billion or a 14 percent share; the Accommodation and Food Service Activities Sector followed with P14.69 billion or a 10 percent share; the Construction Sector recorded P11.05 billion or a 7 percent share; and Transportation and Storage saw P6.87 billion in approved investments, a 5 percent share of the total.
Q2 economic growth seen at 6.5% Manila Times 11th Jul 2014
The Philippine economy likely grew 6.5 percent in the second quarter of the year, gaining some momentum back after slowing in the first quarter and despite a high base in 2013, according to an estimate by a pair of leading think tanks in the country. The quicker growth pace estimated for the second quarter this year is expected to show a corresponding increase in employment, which should have offset the negative impact of higher inflation and weaker exports during the period, said the First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) in the July issue of The Market Call, their joint publication. The new FMIC and UA&P economic growth projection is a revision of their previous 6.3-percent forecast for the period. “Despite an acceleration in inflation to 4.5 percent in May and a slowdown in exports in April, second-quarter GDP [gross domestic product] growth may surprise on the upside, considering the 1.6 million jobs created in the year ending April 2014, and double-digit growth of 12.8 percent in industrial output for the same month,” the report said. The jobs data provided the best news that has come out during the quarter, since growth in employment is conducive to a virtuous cycle of employment-income-spending, it said.
Investment priorities plan to be finalized Manila Bulletin 8th Jul 2014
The final draft of the 2014 Investment Priorities Plan (IPP) will include all the seven sectors presented in consultation with various stakeholders, making activities under these industries eligible to receive incentives over the next three years. Trade Undersecretary Adrian S. Cristobal Jr. made this confirmation, as he noted that the 2014 IPP is now being finalized for the signing by the trade chief and for submission to Malacañang. These sectors were identified as manufacturing; agribusiness and fishery; services; economic and low-cost housing; energy; public infrastructure and logistics; and public private partnership (PPP) projects. The Department of Trade and Industry expects to finally submit to Malacañang this month the 2014 Investments Priorities Plan (IPP), which will reflect an overhauled list of specific industries eligible for fiscal and nonfiscal incentives. Trade Secretary Gregory L. Domingo had said that he was batting for the submission of the 2014 IPP three months ago, but there were many changes that were made on the latest IPP that probably caused the delay in the submission of the draft to his office.
Energy
Power crisis looms in 2015 Philippine Star 22nd Jul 2014
Energy Secretary Carlos Jericho Petillla will ask President Aquino to declare a state of emergency or crisis in the power sector to allow the government to tap additional power capacity next year. He said there is a projected deficit of 200 megawatts (MW) for some days of April and May 2015, and the emergency powers would allow the government through the Power Sector Assets and Liabilities Management Corp. (PSALM) to contract additional power. Petilla said he is recommending additional capacity of up to 500 MW, instead of just 200 MW to provide a buffer in case the projected deficit becomes bigger. “It’s only for a few days next summer,” he said, adding the measure is necessary to avoid blackouts next year, as some power plant projects or expansion plans may not push through. Petilla cited the Malampaya natural gas facility in offshore Palawan, which is expected to shut down from March 15 to April 14, 2015.
DoE chief warns of power lack Business World 21st Jul 2014
THE GOVERNMENT needs to contract additional power generating capacity to address a supply deficiency next year, the Energy chief yesterday said. The expected power shortage of around 200 megawatts (MW) by May 2015, however, does not constitute a “full-blown crisis,” Energy Secretary Carlos Jericho L. Petilla said. “Our outlook shows that we have enough power except for May. The May deficit is only at 200 MW and on certain days only,” he said in a text message. Mr. Petilla has asked President Benigno S.C. Aquino III to “consider” invoking Section 71, or the power crisis provision, of the Electric Power Industry Reform Act of 2001. “Upon the determination by the President of the Philippines of an imminent shortage of the supply of electricity, Congress may authorize, through a joint resolution, the establishment of additional generating capacity under such terms and conditions as it may approve,” Section 71 states.
Mindanao hopes to build 1,700-MW capacity from renewable sources Business World 21st Jul 2014
At least 1,700 megawatts (MW) from renewable energy sources are expected to form part of Mindanao’s power capacity by 2018 if several of 157 proposed projects are approved this year and proponents start work promptly. “If approved within the next six months, (these projects) will eventually provide us a good energy mix by 2018 as construction would run between two to three years,” Romeo M. Montenegro, Mindanao Development Authority (MinDA) public affairs head, said in a recent interview. MinDA launched an online facility in February through which project proponents can submit proposals and get real-time updates on their applications. Most of the renewable energy projects proposed are hydroelectric, Mr. Montenegro noted. Hydro plants provide half of Mindanao’s power supply, which yesterday was put at 1,273 MW against an estimated 1,326-MW peak demand, leaving the island with a 6-MW deficiency. San Lorenzo Builders and Development Group, Inc. is among those with a proposed hydroelectric project with 140-MW capacity, but the Davao City government has opposed the project, citing its potential risk to watersheds. The city council has shelved discussion of the project as it awaits more information from the company.
Groups divided on how to deal with power crisis Inquirer 21st Jul 2014
Various groups are at loggerheads on whether the government should declare a power crisis. While a number of trade groups are pushing for emergency powers that will enable government to build its own power plant if it wants to, others have balked at the prospect of giving government emergency powers, suggesting instead to impose more stringent regulation of the industry. One direction pushed by government critics is renationalization. Bayan Muna in a statement suggested tighter regulation of utilities. “It is very dangerous to grant emergency powers to anyone with a dictatorial propensity like President Aquino,” said Bayan Muna Rep. Neri Colmenares, citing how the chief executive usurped Congress’ power of the purse and the threat he allegedly made when the Supreme Court declared the Disbursement Acceleration Program unconstitutional. Colmenares, who is also the senior deputy minority leader in the House of Representatives, said Malacañang should instead prohibit the sale of what is left of the government’s energy assets and infuse capital to rehabilitate and increase the capacity of these plants.
No power crisis yet, says energy chief Inquirer 15th Jul 2014
The Department of Energy Tuesday assured the public that there was no power crisis in Luzon. Still, amid calls from various groups for the government to declare a state of national emergency on power, Energy Secretary Carlos Jericho Petilla said his department was studying whether the rotating power outages during the weekend would be “imminent” in 2015 and 2016. “Right now, there is none,” Petilla told reporters when asked if there was a power crisis. Petilla said that Section 71 or the Electric Power Crisis provision of the Electric Power Industry Reform Act (Epira) of 2001 need not be invoked unless the DOE has decided that the power supply shortfall experienced last Saturday and Sunday would not be addressed in the next few years by the existing pipeline of power plant projects. “Our window (for deciding on Section 71) is maybe September at the latest,” Petilla said. If Section 71 is invoked, Congress will be called to authorize President Aquino to address the power situation—by putting up a new power plant or other means. Petilla said the government might be able to have in six months enough power assets to serve demand.
NDC, PNOC RC join to develop 20-MW hydro-electric power projects Manila Bulletin 8th Jul 2014
The National Development Company (NDC), the government’s investment arm under the Department of Trade and Industry (DTI), has sealed its partnership with PNOC Renewables Corporation (PNOC RC) for the development of 20-megawatt hydro power projects. NDC General Manager Ma. Lourdes F. Rebueno said NDC has signed a Memorandum of Agreement with PNOC RC, which has identified a total of 20-mw hydropower projects in its portfolio for joint collaboration with NDC. Under the MOA, the two government agencies are enjoined to utilize their respective resources and expertise to create a partnership to develop, commercialize, operate and maintain PNOC RC’s power projects. For their first project, both NDC and PNOC-RC have agreed to develop, commercialize, operate the 1 MW mini-hydro power project located within the National Irrigation Administration’s existing irrigation infrastructure in Rizal, Nueva Ecija. NDC is investing P45 million for a 50 percent share of the project’s total required capital. The Rizal hydropower project is located at the Pampanga River Irrigation System Main Canal (PRISMC), which is the downstream of the Rizal Diversion Dam in Nueva Ecija. Construction will commence in August 2014.
Financial Services
Entry of more foreign banks cheered Inquirer 22nd Jul 2014
New legislation allowing the entry of more foreign banks in the country is expected to help facilitate increased investments in labor-intensive sectors, which should result in higher incomes across the country. Financial services are also expected to improve as new technologies and talent flood the industry, the Bangko Sentral ng Pilipinas (BSP) said on Monday. This follows Malacañang’s announcement on Sunday of President Aquino’s signing of Republic Act 10641, which lifts most restrictions on foreign groups owning banks in the country. “The economic benefits that can be derived from a further opening of the Philippine banking system to foreign banks are clear,” BSP Governor Amando M. Tetangco Jr. told reporters. “The liberalized system is also expected to generate increased foreign direct investments in the Philippines, including in the manufacturing sector that will create more jobs and raise output,” he added.
ASEAN banking integration: Phl banks need to step up – BSP The Philippine Star 21st Jul 2014
Philippine banks have been advised to strengthen their risk management efforts, put in place more good governance policies and focus on consumer protection in preparation for the regional economic integration, the Bangko Sentral ng Pilipinas said. BSP Governor Amando M. Tetangco Jr. said late last week domestic banks would need to step up amid expected increased competition from the Association of Southeast Asian Nations’ banking integration framework, and the imminent reforms they will need to implement under the Basel 3 accord. “From a realistic standpoint, there is only one thing that banks must do and that is to become better banks,” Tetangco said. “Fortunately, becoming better banks is not an abstract concept for us, this frame of mind has been with us in the last two decades because it is at the heart of our reform agenda. To me, risk management, good governance and consumer protection will enable our banks to make their mark in this current financial landscape,” he further said. Tetangco explained that becoming “bigger in balance sheet” is not the only thing banks should focus on. Lenders he said also should adopt effective risk management systems to be able to differentiate themselves with other banks.
Exporters back bill seeking enhanced MSME access to credit The Philippine Star 21st Jul 2014
Philippine exporters back a proposed measure seeking to enhance the credit worthiness and access of micro, small and medium entrepreneurs (MSMEs) to the credit facility of banks through the creation of credit surety funds (CSF). ”Addressing these issues is very critical, as it can spell the entry, expansion, success or closure of MSMEs that are more and more turning to informal lending to respond to their funding requirements,” Philippine Exporters Confederation, Inc. president Sergio R. Ortiz-Luis Jr., said in a position paper on House Bill (HB) No. 4970. HB 4970 seeks to institutionalize the CSF aimed to give more MSMEs greater access to the credit facility of banks. The CSF program is developed by the Bangko Sentral ng Pilipinas (BSP). The fund, which is pooled through contributions of cooperatives, local government units and partner institutions, serves as a security for loans of MSMEs from banking institutions by providing a surety cover in lieu of acceptable collaterals. Ortiz-Luis said the CSF would address the long-standing issue of insufficient collateral for MSME loans.
Banks’ agra loans still below law’s mandate The Philippine Star 20th Jul 2014
Bank lending to agrarian reform beneficiaries remained below the level mandated by law during the first quarter, data from the Bangko Sentral ng Pilipinas showed. Universal, commercial, thrift, rural, and cooperative banks extended only P26.937 billion to farmers granted lands by the government, P151.097 billion short of the required P178.034-billion allocation. Borrowings for agriculture and fisheries, meanwhile, summed up to P296.816 billion as of March, higher than the needed P267.051-billion allotment. Republic Act 10000 or The Agri-Agra Reform Credit Act of 2009 mandates banks to set aside 25 percent of their loanable funds for agriculture and fisheries, with 10 percent of this to be appropriated for agrarian reform beneficiaries. Data from the central bank showed that throughout 2012 and 2013, banks have been unable to comply with the mandated 10 percent allocation for recipients under the various agrarian reform laws. BSP Deputy Governor Nestor A. Espenilla, Jr. earlier this month said this is due to the weak demand for agri-agra loans.
Regulated entities told: Observe new anti-money laundering strictures Business Mirror 20th Jul 2014
Insurance Commissioner Emmanuel F. Dooc has ordered insurance companies to participate in the government’s information gathering to determine the country’s risks of involvement in money laundering and terrorism financing activities. Dooc issued Circular Letter 2014-33 requiring insurance companies, preneed companies and mutual benefit associations to submit information that will help determine the country’s possible exposure to the global flow of illegal funds. The information that will be required from the insurance companies include data on total volume and average transaction size for the products that they are offering, and other statistics on risky customers, international transactions, transactions with offshore centers or tax havens, and transactions in high-risk regions of the world. “As part of its data and information gathering, the Insurance Commission (IC) shall require, if necessary, pertinent data and information from the regulated entities. Cooperation from all concerned entities is expected as it will ensure the success of formulating internationally accepted standards to address money laundering/terrorism financing,” Dooc’s circular said.
Banking reforms won’t stop with larger capital–Tetangco Business Mirror 20th Jul 2014
Six more areas in banking require extensive overhauls to help seal the banks’ improvement in terms of risk management and ultimately attune the sector with the evolving global regulatory environment, according to the Bangko Sentral ng Pilipinas. At a recently held speaking engagement, central bank Governor Amando M. Tetangco Jr. said while the banks already show growth and strength in capital following the Basel 3-mandated round of capital boosts, there are other aspects needing strengthening. Tetangco reminded banks that the recent shift of universal and commercial banks and their subsidiaries to Basel 3 beginning this year, and the adoption of the so-called Basel 1.5 by stand-alone thrift and rural banks this year, only covers one of many aspects to be enhanced among financial institutions. Universal and commercial banks, as well as their subsidiaries, transitioned to Basel 3 standards for capitalization this year. This followed the adoption of Basel 1.5 by stand-alone thrift banks and rural banks in 2012. “While the shift to Basel 3 and Basel 1.5 are material to the reform agenda, let me point out that it only covers the capital requirements,” Tetangco said. “In reality, the Basel Accord is a complex reform of many components. Moving forward, new rules on leverage, liquidity, trading books, counterparty risk, OTC derivatives and systemically important financial institution will also be issued to further align local banking standards with the global accord,” he added
Potentially higher remittance charges prompts Binay to seek central bank assurance Business Mirror 20th Jul 2014
Vice President Jejomar C. Binay expressed optimism that the Bangko Sentral ng Pilipinas (BSP) will look for solutions to mitigate the impact of heightened United States bank restrictions in the use of their facilities for international money transfers. The move was in response to regulatory pressure from the US government on its banks doing business with overseas counterparties that directly affect Filipino patrons who regularly send money to families and friends in the Philippines in the form of higher remittance charges. “I expressed deep concern of a plan to increase remittance fees that would adversely impact the millions of Filipinos in the United States who regularly send money to their families in the Philippines,” Binay said in a letter to BSP Governor Amando M. Tetangco Jr. Binay is the presidential adviser on Overseas Filipino Workers’ Concerns. “I take note of the efforts of the BSP to address this development and I am optimistic that you will make the needed representations and take the needed steps to mitigate the effects of such policies on our kababayan in the US,” he said. According to the New York Times, Bank of America, JPMorgan Chase and Citigroup have scrapped programs that allow migrant workers to send money back to their families at a reduced cost, in response to increased regulation.
Dooc now allows placements in exchange traded funds Business Mirror 19th Jul 2014
Insurance Commissioner Emmanuel F. Dooc has now allowed insurance companies to invest in exchange traded funds both here and abroad, subject to prior approval and strict reporting requirements on these investments. Dooc issued Circular Letter 2014-30, providing the guidelines for investing in exchange traded funds, or investment funds that are traded in stock exchanges. “In order to ensure liquidity and further promote diversification of investment portfolios of insurance/reinsurance companies and mutual benefit associations [MBAs], exchange traded funds [ETFs] may be allowed as additional investment outlet, provided that prior approval of the Insurance Commission shall be obtained,” the circular said. The applications for investing in ETFs must include the ETF company’s latest registration statement; audited financial statements for at least the past three years; the ETF’s most recent list of Basket of Securities of the index used; and the designated fund manager.
Philippines: 3-year resiliency awareness programme launched Asia Insurance Review 18th Jul 2014
Several non-government organisations, in partnership with the government, business groups and academia, have launched a three-year programme that aims to boost efforts to make the Philippines more resilient to catastrophic events brought about by climate change. The Carlos P Romulo Foundation for Peace and Development, Zuellig Family Foundation and the Manila Observatory, in cooperation with the Philippine Long Distance Telephone Company, AIG Philippine Insurance and Federal Phoenix Assurance, hosted the first “Partnerships for Disaster and Climate Resilience” forum last week in Manila, reported The Philippine Star. Ms Lucille Sering, vice chairman and executive director of the Climate Change Commission, speaking at the forum, said that the government has passed laws on climate change adaptation. She said that since 2008, the budget allotted to government agencies for climate change-related activities had increased by 26% annually. However, she noted that most of the funds were spent on recovery and rehabilitation.
Asean integration realigning insurance standards The Philippine Star 18th Jul 2014
The Asean economic integration starting 2015 will force government regulators to harmonize the way it measures the performance of the country’s insurance industry. The integration among others requires the harmonize and align of regulations, tariffs, and other measures that creates a level playing field for all 10-member nations to do business within the Asean. This is particularly true in the way the Insurance Commission (IC) evaluates the performance of the Philippine life insurance industry in terms of premium income. The recent IC 2013 performance report of the life insurance industry used gross premium income as the basis for rating individual insurers. That includes single premiums, first year premiums (FYPs), and renewal business. However, the international standard only take into account 10 percent of the single premiums as part of the total premium income. Foreign insurers operating in the Philippines are already reporting their premiums based on weighted total premiums. In last year’s IC report on premium income, gross premium income reached P170.2 billion, composed of both weighted and not weighted premiums. This has prompted First Life Financial chief executive officer Peter Coyuito to state that the country is not realistically reporting its annual performance.
Dooc takes VUL, HMO and nontraditional insurance products off quick-approval lane Business Mirror 14th Jul 2014
Insurance Commissioner Emmanuel F. Dooc has prescribed additional guidelines for the approval of new and nontraditional life-insurance products being offered in the market today to ensure the viability of these products. Dooc issued Circular 32-2014 which removed new and nontraditional life-insurance products from the coverage of a circular that prescribed the expeditious approval of life-insurance products. The new and nontraditional life- insurance products include the following: variable life-insurance basic plans and riders; nontraditional health-insurance products, such as health maintenance organization (HMO) type products; and traditional life-insurance products which will be marketed through new/innovative distribution channels, such as malls, kiosks, online and telemarketing, etc.
UCPB expects more challenges ahead for banking industry Business Mirror 14th Jul 2014
United Coconut Planters Bank (UCPB) sees ramped up competition among banks that will put downward pressure on margins, or the difference between what they pay for deposits and the interest they charge on loans. UCPB Senior Vice President and Marketing Group Head Norman Martin Reyes said the intensifying competition would become more evident in the near term. “There’s increased competition since restrictions in terms of branch opening in certain urban areas have recently been lifted by the Bangko Sentral ng Pilipinas [BSP],” he told the BusinessMirror. “The move to allow foreigners to own up to 100 percent of local banks and the imminent Asean financial integration should heighten further the competitive environment,” he added. Reyes said the rising interest rate environment would greatly limit the banks’ trading income. “In fact, some banks are booking trading losses. As it is, margins are already low.” Reyes said.
Banks report more stringent lending policies in Q2 Business Mirror 13th Jul 2014
The banks have become tightfisted and have tightened their lending policies in recent months to reflect their continued conservative stance, the Bangko Sentral ng Pilipinas (BSP) said. In a special section from the most recent Senior Bank Loan Officers’ Survey, the central bank said in a statement there was a net tightening of credit standards affecting commercial real-estate loans in the second quarter. This was the eight consecutive survey that the banks reported a net tightening of their credit standards under the diffusion index approach. The tighter standards were in the form of more strict collateral requirements and loan covenants, increased use of interest rate floors, reduced credit lines, shorter loan maturities, lower loan-to-value ratios and wider loan margins for commercial real-estate loans. “The net tightening of overall credit standards for commercial real-estate loans was attributed by respondent banks to stricter oversight of banks’ real-estate exposure along with banks’ reduced tolerance for risk,” the central bank said. The central bank has stringently monitored the lenders’ exposure to the real-estate sector to prevent potential bubble formation.
Banks tighten household credit standards; rules for companies unchanged The Manila Times 11th Jul 2014
Banks maintained their overall credit standards for enterprises but tightened lending rules for household loans during the second quarter, the diffusion index (DI) contained in the Second Quarter 2014 Senior Bank Loan Officers Survey (SLOS) showed. The number of banks that indicated a tightening for enterprises equaled those that eased their standards, the survey said. “The overall credit standards were unchanged as banks’ tolerance risk remained steady,” it said. Under the DI approach, a positive DI for credit standards indicates that the proportion of banks that have tightened their credit standards is greater compared to those that eased (“net tightening”), whereas a negative DI indicates that more banks have eased their credit standards compared with those that tightened (“net easing”). The SLOS also revealed that respondent banks’ outlook on the domestic economy, as well as specific industries, such as real estate, renting and business activities, wholesale and retail trade, manufacturing, financial intermediation, and utilities also remained steady.
PNB-Wells Fargo tie-up to boost US-originated remittance Business Mirror 10th Jul 2014
The Philippine National Bank (PNB) and global remittance service provider Wells Fargo & Co. have forged a partnership seen boosting further their remittance business by up to 10 percent in the United States. Benjamin Oliva, first senior vice-president and head of PNB Global Banking Group, said Wells Fargo has a large global distribution network and that the partnership should further strengthen its leadership in the global remittance market through partnership with leaders in their home markets like PNB. Wells Fargo is a US-based global financial-services provider. Wells Fargo Bank N.A. Executive Vice President Daniel Ayala said they provide access to 3 million Filipinos living in the United States. “Wells Fargo has 6,200 branches in the US throughout 39 states and has more than 12,500 automated teller machines [ATMs]. We’re No. 1 in bank market capitalization and Nos. 1 or 2 in every state we operate,” Ayala said. “The US market is still the biggest market. With Well Fargo’s 6,200 branches in the US, this will push up remittance volume from the US corridor,” according to Oliva. PNB Retail Banking Group Executive Vice President Joven B. Hernandez said this partnership will be profitable for both parties. “We see a conservative increase in remittance of 5 [percent] to 10 percent in the US with this tie-up,” Hernandez said.
Rural banks’ growth on track The Manila Times 9th Jul 2014
To protect the deposits of the public, the Bangko Sentral ng Pilipinas (BSP) supervises all banks not only according to its own strict guidelines but also according to international standards. When the performance of banks deteriorates and remedial measures fail to correct the situation, the concerned banks are closed. By having the largest number of banks, it only follows that rural banks will also have the highest possibility of closures. To date, there are 534 rural banks providing basic banking services to mostly rural-based Filipinos nationwide. In 1952, capable families in every locality were tapped to set up rural banks to provide banking services. It was then that rural banks thrived mainly due to the policy of allowing only one rural bank per municipality. Today, this situation has immensely changed.
Food & Agriculture
PHL import of US F&B breached $1 billion in 2013 Business Mirror 10th Jul 2014
THE Philippines’s import of food and beverages (F&B) from the United States (US) breached the $1-billion mark last year, latest data from the US Department of Agriculture (USDA) showed. To underscore the huge volume of the import, the USDA described their export to the country in 2013 as “enough to fill 25,000 trucks extending 300 kilometers,” according to data released recently by the US Embassy in Manila. According to the update from the USDA, between 2009 and 2012 “exports to the Philippines doubled, achieving the National Export Initiative goal to double exports two years early,” a goal of the US government under the Obama administration.
PH rice output seen hitting record high Inquirer 21st Jul 2014
Philippine rice output in the 2014-2015 marketing season that started this month is expected to reach yet another record volume, even as the global production growth forecast was trimmed due to the looming El Niño phenomenon. In its latest rice market report, the Food and Agriculture Organization (FAO) said it foresees production in the Philippines to expand by 1 percent to 19 million tons of paddy rice, equivalent to 12.4 million tons when milled. The FAO said this forecast was largely based on expectations of continued expansion of farm areas planted to rice, driven by high prices and helped by government support to the domestic sector. “The forecast remains tentative, however, as the season is still at early stages in the country, having also opened this year under the threat of possible El Niño-induced weather anomalies,” the FAO said. Following international market convention, the United Nations agency makes assessments and forecasts within a “season” that starts in July and ends in June the following year.
Typhoon damage to agriculture hits $53.3 M Philippine Star 17th Jul 2014
The agriculture sector incurred losses amounting to P2.32 billion ($53.3 million) following the onslaught of typhoon Rammasun (local name: Glenda), the Department of Agriculture (DA) said today. Agriculture Secretary Proceso Alcala said farmers and fishermen in 15 provinces in central and northern Philippines were heavily affected by the typhoon. Alcala said the fisheries subsector suffered the biggest loss, with damages estimated at $810 million ($18.58 million). Typhoon Rammasun also destroyed P512.7 million ($11.76 million) worth of rice planted in 43,536 hectares and P391.65 million ($8.98 million) worth of corn planted in 22,627 hectares. Rice and corn are the country's two major crops. Other cash crops worth P481.15 million ($11.03 million) were also destroyed by strong winds and heavy rains. The DA's preliminary assessment showed that coconut trees planted in 4,000 hectares may have been damaged by the typhoon.
DA: Field trials confirm corn farming profitable Business Mirror 8th Jul 2014
INITIAL implementation of the site-specific nutrient management (SSNM) method proves the sustainability and profitability of white corn wet season farming, the Bureau of Agricultural Research (BAR) said in a statement over the weekend. Nonetheless, BAR Director Nicomedes P. Eleazar said people of the BAR and other agencies under the Department of Agriculture (DA) will still have to analyze more results of the use of SSNM under the wet season last year until the early months of this year. But, based on the findings of the July 2013 trials, SSNM increased farmers’ yield for white corn dry season using farmers’ fertilizer practices (FFP), Eleazar said. He noted that field trials for dry white-corn cropping yielded 2.3 tons per hectare (t/ha) for improved open-pollinated varieties (OPV) and 1.8 t/ha for traditional or native varieties. “The use of SSNM was able to increase farmers’ yields by 1.8 t/ha with OPV and 1.4 t/ha with native varieties,” the BAR chief said.
Health & Life Sciences
Aquino signs law for graphic warnings on tobacco products The Star 21st Jul 2014
Philippine President Benigno Aquino, who has been criticised for his own inability to quit smoking, has signed a law requiring tobacco companies to print graphic warning pictures on packets, his spokesman said. The Bill signed on Friday has long been campaigned for by health advocates but is opposed by the tobacco industry. It requires companies to devote about half the space on packets to warnings including photographs of internal organs ravaged by smoking. The Philippines has long had a conflicted attitude towards smoking, with the government trying to discourage it even as it encourages a politically powerful tobacco-growing industry. In 2013, Aquino signed a “sin tax” Bill dramatically raising the taxes on tobacco products.
Health hopeful on cigarets’ law Manila Standard Today 22nd Jul 2014
A new law on cigarette graphic health warnings will come into force 15 days after its signing and already a major tobacco player has pledged to abide by the implementing rules. President Aquino signed the Graphic Health Warning Law over the weekend, a development that prompted Health Secretary Enrique Ona to express optimism on the law’s effect. The new law brought the Philippines closer to its dream of “a cleaner air and a healthier people,” Ona said. A major industry player vowed to follow the law, which aligns the Philippines with countries like Brazil, Singapore and Indonesia that have adopted similar laws on the use of pictures to illustrate health hazards. “We have always been supportive of health warnings on tobacco packaging that remind consumers of the dangers of smoking,” Philip Morris Fortune Tobacco Corp. said in a statement.
Nearly 15-M poor Filipinos expected to benefit from P35-B PhilHealth budget Manila Times 20th Jul 2014
A total of 14.7 million poor households will benefit from the P35.3-billion newly released budget by the government to provide “quality health services, especially to the poor and marginalized.” The Department of Budget and Management (DBM) said in a statement on Sunday that the subsidy will go to the National Health Insurance Program (NHIP) or PhilHealth to cover the health insurance needs of poor families identified by the Department Social Welfare and Development’s National Household Targeting System for Poverty Reduction (DSWD-NHTS-PR). “Bringing universal health insurance is still a priority in the Aquino administration’s reform campaign. Central to our health agenda in the country is ensuring that the poorest have access to quality medical and health services,” Budget Secretary Florencio “Butch” Abad said. “We therefore allotted a significant amount for the health insurance benefits of our indigents and their families this year,” he added. DBM said the 14.7 million families will have health insurance coverage from January to December this year.
Dengue vaccine out in PH by July 2015 Rappler 16th Jul 2014
A dengue vaccine tested in the Philippines and 4 other Asian countries showed promising overall efficacy and will be available in the health department’s vaccine program by July 2015. Health Secretary Enrique Ona disclosed this on Tuesday, July 15, as the rainy season continues in the country. "Maglalaan tayo ng budget para maisali natin itong vaccine na ito sa ating vaccination program next year,” he said. (We will allot a budget to include this vaccine in our vaccination program next year.) The vaccine called CYD-TDV was devised by the French pharmaceutical giant Sanofi Pasteur. It produced lukewarm results two years ago, but after wider trials has now shown 56.5% protection against dengue.
DOH used P3.3B in DAP funds to buy medicines, improve health centers—Ona Inquirer 15th Jul 2014
Health Secretary Enrique Ona disclosed on Tuesday, that his department received P3.3 billion in total allocations under the controversial Disbursement Acceleration Program (DAP). The amount went to the purchase of medicines, supplies and medical equipment; the hiring of more nurses and midwives; and improvements in public health facilities necessary for the ordinary Filipino to access better health care at the least possible cost, said Ona. “[The funding] gave us the capacity to modernize, to supply, equip and not only rehabilitate health facilities but also augment our resources to hire the additional health workers that our country severely needed at that time,” said Ona at a press conference at the DOH headquarters in Manila on Tuesday. Defending the program, which the Supreme Court has declared unconstitutional, Ona said a big bulk of the allocation went to the government’s universal healthcare program.
ICT
Nazareno smug over PLDT profit target for 2014 Business Mirror 10th Jul 2014
PUBLICLY listed telecommunications firm Philippine Long Distance Telephone Co. (PLDT) is on track to meet its P39.5-billion core profit guidance by yearend, given the initial financial results of the first semester, according to president and COE Napoleon L. Nazareno. “Our bottom line is on track with our guidance figures. It is driven by our revenue growth and enhanced Ebitda [earnings before interest, taxes, depreciation and amortization] margin. Our broadband business is really the driver for the growth,” told reporters late Wednesday in a chance interview. “Our mobile broadband business is growing very fast at a little over 80 percent. We would like to grow it more.”
DOST-ICT Office to launch govt fiber optic network Interaksyon 21st Jul 2014
The fiber optic network designed to interconnect government offices in Metro Manila will be launched by the Department of Science and Technology-ICT Office on Thursday (July 25) during the National Science and Technology Week. In a press statement, DOST – ICT Office executive director Louis Napoleon Casambre said that the fiber optic network connecting 160 government offices in Metro Manila “is now ready and will be operational in a few weeks.”
Makati, Taguig, cited for use of IT in gov't services Phil Star 21st Jul 2014
The cities of Taguig and Makati joined eight other Philippine cities that were recognized by the Department of Science and Technology (DOST), the Department of Interior and Local Government (DILG) and the Department of Trade and Industry (DTI) for their efficient use of information technology in the delivery of services. In receiving the “2014 E-readiness Leadership Award” last June 18, Taguig and Makati joined the cities of Cagayan de Oro City, Cebu, Mandaluyong, San Fernando, Balanga, Angeles, Batangas City and Valenzuela which were recognized for adapting information technology in local governance or “e-readiness.”
Globe spearheads M2M service adoption in Philippines Sun Star 17th Jul 2014
Globe Telecom, through its newly-formed group IT-Enabled Services Group (IG), leads the Philippines in the adoption of machine-to-machine (M2M) solutions, driving the growth of businesses and enterprises through information and communications technology (ICT). Global IT experts forecast M2M connections to reach 116 million by 2015 across the Asia Pacific region, and over two billion globally by 2021. According to Globe vice president and head of IG Reynaldo Lugtu Jr., the global economy is ready for M2M as the “next big source of productivity,” despite productivity slowdowns in the past years.
Accenture powers ABS-CBNmobile services in Philippines TelecomLead 17th Jul 2014
Accenture has supported ABS-CBN Convergence, a telecom service provider in the Philippines, to expand ABS-CBNmobile services. ABS-CBNmobile allows subscribers to use their mobile devices to access online content such as news, information and entertainment, in addition to their telecommunications services, which include voice and SMS. Mark Lopez, Group CIO, ABS-CBN Convergence, said: “Accenture helped us streamline and upgrade our core processes to be more customer-centric. We believe that Accenture’s experience in digital services will help us gain a foothold in the telco sector, and expand our market presence.”
The Philippines Connecting 160 Government Offices to Improve Efficiency, Allow Shared Services Future Gov Asia 16th Jul 2014
Government agencies in the Philippines’ national capital region will soon be able to collaborate and access core services such as email, online security and web hosting with a new high-speed communication network. The government has almost completed interconnecting 160 offices in Metro Manila with fiber optic technology, Louis Napoleon Casambre, Executive Director of the ICT Office, Department of Science and Technology, announced this week.
Services of telcos affected by power loss Business Mirror 16th Jul 2014
The Philippine Long Distance Telephone Co. and Globe Telecom Inc., in separate statements, blamed the fluctuating power supply in the typhoon-affected areas for the disrupted telecommunication services, including mobile and broadband Internet. “Widespread commercial power outages have disrupted normal services in various areas. Though key installations of both fixed line and mobile networks have standby power, many facilities rely in varying degrees on commercial power. Prolonged outages will thus disrupt normal services once the internal batteries in equipment run out,” the telecommunications giant controlled by businessman Manuel V. Pangilinan said in a media advisory.
Interconnection of 160 gov’t offices in 2015 to reduce red tape Philippine Daily Inquirer 15th Jul 2014
By early next year, 160 government offices in Metro Manila will be interconnected through fiber optics, a move expected to cut red tape. The Department of Science and Technology (DOST) announced that the P2.53 billion Integrated Government Philippines project (iGovPhil) was set for full deployment by the early part of 2015. According to DOST Information and Communications Technology (ICT) Office executive director and Undersecretary Louis Napoleon Casambre, fiber optic technology will provide national government agencies with high-speed communication through efficient broadband connectivity. He added that iGovPhil would also facilitate services like cloud computing, data center colocation, web hosting, document and records management, e-mail and online security.
DOST-ICTO opens field office in Visayas to implement projects Sun Star 13th Jul 2014
To better implement the Department of Science and Technology’s Information and Communications Technology Office (DOST-ICTO) has formally established a field office for the Visayas. Launched last Friday, the Visayas Cluster 2 Field Operations Office (FOO) covers the provinces of Cebu, Bohol, Samar, Northern Samar, Eastern Samar, Leyte, Southern Leyte and Biliran. The provinces of Negros Oriental and Siquijor are under the first Visayas Cluster, which covers most of Western Visayas. DOST-ICTO Executive Director Luis Napoleon Casambre was in Cebu with the new staff headed by officer-in-charge Jose Bagulaya for their strategic planning meeting to define the FOO’s direction in implementing the ICTO’s objectives.
PLDT rolls out 5,000 more 4G base stations Rappler 13th Jul 2014
The Philippine Long Distance Telephone Company (PLDT) announced Sunday, July 13, it rolled out 5,000 new 4G base stations as part of its expansion process for its fixed wireless and mobile broadband network all over the country. PLDT president Napoleon Nazareno said the deployment of new long-term evolution (LTE) base stations and expansion of the company's LTE network "is part of our thrust to provide broadband connectivity to the whole country." The company is looking at a 50% coverage of LTE and Time-Division by year's end. Currently, its LTE coverage is around 30%, according to Nazareno.
DOST–ICT Office working to update telecom law Interaksyon 8th Jul 2014
The Department of Science and Technology – ICT Office is currently spearheading a multi-stakeholder consultation to come up with a draft proposal for Congress to amend the country’s telecommunications law. Bettina Quimson, DOST-ICT deputy executive director, said that they are currently in the thick of consultations regarding the amendment of Republic Act 7925. “We are gathering the various inputs to consolidate and discuss. So we are at that stage now, putting the various inputs for discussion,” Quimson told InterAksyon.com on the sidelines of a recent conference in Makati.
Infrastructure
DOTC bids out 2 airports, sea gateway projects Business Mirror 10th Jul 2014
THE Department of Transportation and Communications (DOTC) has earmarked P248.3 million to develop two airports and a sea gateway in different parts of the country to facilitate easier transport and trade of goods and services. In an invitation to bid, the DOTC said it is seeking offers for P105.13-million contract for the asphalt overlay of the runway of Virac Airport in Catanduanes. The agency is also calling on interested parties to bid for the P124.05-million deal for the asphalt overlay of the runway of the Dumaguete City Airport in Negros Oriental. The project also entails the upgrading of the drainage system of the said air hub. Likewise, firms may also vie for the P19.16-million Gaba Port Development Project, which entails the extension of the causeway and the construction of the back-up area of the seaport in Albay. Prospective bidders must have an experience of having completed at least one contract that is similar to the project and whose value adjusted to current prices must be at least 50 percent of the approved budget for contract. A prebid conference is scheduled on Friday next week and interested parties have until July 30 to submit their bids. The offers will likewise be opened during the bid submission deadline.
Russians interested in PH ASEAN Investor 21st Jul 2014
AFTER a successful nine-day business trip to Russia, the Philippine delegation reported Russian businesses are showing interest in investing in the Philippines. Geronimo Sta. Ana, Philippine-Russia Business Assembly (PRBA) treasurer, said Russians have shown interests in waste-to-energy projects, banks via conduits, infrastructure, medical software technology, tourism and private-public partnerships (PPP). “Russian are looking at the Philippines as an investment area and place for possible trade. In fact, they showcased some products that they can possibly trade to the Philippines and to the Asean region,” Russian Federation Honorary Consul Armi Garcia said in a press conference yesterday. She said the Philippines is best positioned for Russian investments, given its strategic location in the Association of Southeast Asian Nations (Asean) region and its workforce advantage.
Industry players set out to put PH on regional aerospace map Inquirer 21st Jul 2014
Local players in the aerospace industry will be rolling out their roadmap this week, as they seek to build up the country’s capabilities and eventually turn it into the region’s prime hub for maintenance, repair and overhaul (MRO) of aircraft. Corazon H. Dichosa, executive director for the Board of Investments industry policy group, said the Aerospace Industry Association of the Philippines (AIAP) has already completed its roadmap and would present it during the Trade and Industry Development (TID) Update this week. The roadmap “will identify the subsectors that the industry association wants to grow, particularly the parts and components, as well as maintenance, repair and overhaul business,” Dichosa said. “There is a huge potential for the local aerospace industry. As it is, we already have some of the MRO facilities here. We already have Lufthansa Technik, MOOG Technologies, and B/E Aerospace in the country. Add to that, there is an increasing number of engineering professionals, which means that we are slowly building our capabilities for this growing industry,” she explained.
Clark airport makeover into ‘aerotropolis’ in full swing Manila Times 21st Jul 2014
The government is pouring investment into Clark International Airport (CRK) to develop it into an aerotropolis, or an airport city as part of a long-term plan to turn it into an international hub, alongside the Ninoy Aquino International Airport (NAIA) in Manila and Sangley Point in Cavite. The Department of Transportation and Communications (DOTC) said the airport’s passenger terminal building (PTB) was expanded in May at a cost of P417 million to better serve the public and boost annual passenger capacity to about 4 million from the previous 2.5 million. A new P7.2-billion low-cost carrier (LCC) terminal is also planned and the proposal will be presented to the National Economic Development Authority–Investment Coordination Committee in August, the DOTC said. “We see Clark International Airport (CRK) as a premier gateway alongside NAIA and Sangley, especially in view of its rapid growth over the past few years, as well as government’s development plans for the entire economic zone and the rest of the region,” DOTC Secretary Joseph Emilio Abaya said in a statement.
DOTC eyes major investments in infrastructure Manila Times 20th Jul 2014
Thousands of people from Bulacan, Laguna, and Cavite take the bus to Metro Manila daily, braving hours of commute just to get to their schools and workplaces. Recognizing this, the Department of Transportation and Communications (DOTC) has vowed to resolve issues hounding the country’s transportation sector within the next 10 years. DOTC Secretary Emilio Abaya, in a speech at Malacañang last week, quipped, “As Transportation Secretary, I cannot help but talk about trains, planes, and automobiles.” He underlined, however, that transportation is also about enhancing access to opportunities. In line with this belief, the DOTC secretary related that the agency aims to drastically improve the country’s transportation infrastructures. “We envision erasing the backlog in transportation infrastructure over the next five to 10 years, in such a way that the infrastructure we build will meet the country’s needs for the 10 to 20 years that follow,” Abaya said.
DOTC clarifies fare hike, defends LRT-1 bid The Manila Times 9th Jul 2014
The Department of Transportation and Communications (DOTC) on Wednesday refuted claims that the bid award of the P65-billion Light Rail Transit Line 1 (LRT-1) Cavite Extension (Cavex) project will result in a fare increase for LRT-1 passengers on August 1 this year. DOTC acknowledged the proposed P 11+1 fare increase for LRT-1, LRT-2, and MRT-3 riders, but stressed it is completely separate from the Cavex Private-Public Partnership project. Under the proposed “11+1” formula, passengers will be charged P11 upon boarding trains and pay an additional P1 for every kilometer traveled. The DOTC, the Light Rail Transit Authority (LRTA) and the Metro Rail Transit Corp. (MRTC) have been seeking a fare increase since 2010, in order to improve their facilities and services to the public.
Power supply improves, but plant shutdowns loom The Manila Times 9th Jul 2014
THE Department of Energy (DOE) on Wednesday assured the public the country’s power supply is improving, but warned that plant maintenance shutdowns are scheduled between now and September. Energy Secretary Carlos Jericho Petilla said that the power supply in the Visayas has gone back to normal after plants that were placed under maintenance have been fully operational. At the same time, Petilla said the power supply in Luzon is also normal. “Luzon is normal and we are not on yellow alert at this point,” he added. As of Wednesday, the National Grid Corporation of the Philippines (NGCP) said that Visayas has 124 megawatts and Luzon has 649 megawatts reserves.
Manufacturing
Manufacturing output up 13.8 percent in May Business Mirror 10th Jul 2014
The country’s manufacturing output continued its double-digit climb in May, according to the preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI) report released by the Philippine Statistics Authority (PSA) on Thursday. PSA data showed that the Volume of Production Index (VoPI) grew 13.8 percent in May 2014, faster than the 13 percent posted in April, but slower than the 20.2-percent growth posted in May 2013. In terms of index score, the VoPI was at 125.4 in May, the highest for 2014. This score was also higher than the 110.2 index score recorded in May 2013, but lower than the 131.3 score posted in December 2013. “Printing contributed much to the increase with a 227.7-percent growth, followed by 10 other major sectors that registered two-digit increments in production volume,” the PSA explained. Other sectors that posted a growth of above 10 percent were fabricated metal products, which posted a growth of 58.3 percent, followed by beverages, with 31.5 percent; tobacco products, 30.8 percent; wood and wood products, 20.8 percent; and petroleum products, 18.9 percent. Sectors that also posted double-digit growths included textiles, which grew 16.4 percent in May; machinery except electrical, 13.2 percent; electrical machinery, 13.1 percent; transport equipment, 12.8 percent; and basic metals, 12.7 percent.
PH e-vehicle, aerospace firms upbeat Inquirer 22nd Jul 2014
An industry association expects sales of electric vehicles in the country to reach P4.44 billion by 2015, about 20 times higher than the P214.2 million recorded in 2013, as the country continues to makes a push for this energy-efficient and eco-friendly transportation. To help reach such target, the Electric Vehicle Association of the Philippines (Evap) will be presenting this week a roadmap that will outline the strategies and overall direction for the sector. This roadmap is expected to help create an environment where the use of electric vehicles is highly promoted, encouraged and supported by both the Philippine government and society that would lead to eco-friendly and efficient transportation. According to the Department of Trade and Industry, the roadmap focuses on program development, local market build-up, production capacity enhancement, local and export markets expansion, and full integration of electric vehicles in both the local and regional automotive industries. “The industry seeks support in the implementation of policies that will attract investments, create a more predictable business environment, establish industry clustering and value chain, enhance competitiveness measures, and integrate resources,” the DTI added.
US to slap antidumping duty on PH steel exports Inquirer 21st Jul 2014
A US trade agency has found that certain steel pipes and tubes being used in the oil industry that were imported from the Philippines had been dumped or sold at a lower price in America. In a notice issued on July 18, the US Department of Commerce’s International Trade Administration (ITA) said that “imports of certain oil country tubular goods from the Republic of the Philippines are being, or likely to be, sold in the United States at less than fair value (LTFV).” Philippine-based HLD Clark Steel Pipe Co. Inc. was the respondent to the US government’s ongoing dumping and countervailing investigation on oil country tubular goods. Respondents include exporters from India, Saudi Arabia, South Korea, Taiwan, Thailand, Turkey, Ukraine and Vietnam. According to the ITA, the products exported by HLD Clark had a weighted-average dumping margin of 9.88 percent during the period July 1, 2012 until June 30 of this year. Since dumping has been finally determined, the Department of Commerce will instruct the US Customs and Border Protection (CBP) to continue the suspension of the liquidation of all oil country tubular goods imported from the Philippines that had been entered or withdrawn from warehouse for consumption on or after February 25—the date when the ITA announced a preliminary determination of dumping. The agency last February said it had found a weighted average dumping margin of 8.9 percent.
Importers revved up car sales in June Inquirer 18th Jul 2014
Vehicle importers and distributors continued their winning streak in June as sales surged by 21 percent to 2,973 units, driven largely by the double-digit growths posted by both the passenger car and light commercial vehicle segments. This brought the cumulative sales of the Association of Vehicle Importers and Distributors Inc. (AVID) to 17,902 units in the first six months of the year, up 17 percent from the 15,345 units sold in the same period in 2013. According to AVID, the passenger car segment saw its sales grow by 22 percent year-on-year in June to 1,515 units, boosted by sustained sales from Mini, CATS Motors and Hyundai. This led to a 16-percent sales growth in the first semester to a total of 9,061 units. The light commercial vehicle segment, meanwhile, chalked up a 22-percent increase in sales to 1,458 units in June, reinforced by the “stellar performance” of Chevrolet. First half sales of this segment grew 18 percent to 8,841 units. Hyundai Asia Resources Inc. (Hari) remained AVID’s top seller in the first half of the year, with sales hitting 11,651 units. Chevrolet distributor The Covenant Car Co. Inc. was the group’s second strongest performer with sales reaching 4,066 units during the same period.
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