| Regional Affairs
Philippines-China Relations Still Important Despite S. China Sea Dispute Voice of America 2nd Jun 2015
Even though tensions over the disputed islands in the South China Sea have recently been heightened, analysts believe countries in the region face a conundrum: speaking out aggressively against China while at the same time improving economic ties with the Asian giant. The recently concluded Shangri-La Dialogue in Singapore saw a flurry of diplomatic activity related to the South China Sea dispute. U.S. Secretary of Defense Ashton Carter announced the launch of a new Southeast Asia Maritime Security Initiative and, only weeks before, reports showed China taking a more assertive stance in building islets on the disputed islands.
Philippine President Aquino Sets Four-Day Japan Visit Business News Asia 31st May 2015
The Philippine government has confirmed that President Benigno S. Aquino III will embark on a four-day state visit to Japan from June 2 to 5 next week to meet with Prime Minister Shinzo Abe.
National Affairs
House minority to shore up quorum for Cha-cha The Philippine Star 4 Jun 2015
The House minority bloc will help the majority muster the needed quorum so the chamber’s leadership can put the economic Charter change (Cha-cha) resolution to a final vote. “We in the minority will support the Speaker in producing the quorum, but he has to produce the vote,” San Juan congressman and Minority Leader Ronaldo Zamora has told reporters. “We will not be part of any effort to disrupt the quorum. We will be there, but the Speaker should not include us in the votes for the Cha-cha resolution,” he said. He said his group has allowed only one member to vote for Resolution of Both Houses No. 1.
Economic Cha-cha gains Senate support The Philippine Star 2nd Jun 2015
The move to amend the economic provisions of the 1987 Constitution is gaining support at the Senate even if some have expressed fears that the Charter change (Cha-cha) might also lead to political reforms. Apart from Senate President Franklin Drilon, Senate President Pro-Tempore Ralph Recto, Sens. Juan Edgardo Angara, Ferdinand Marcos Jr., Grace Poe and Cynthia Villar are supporting the measure, provided that only economic provisions are amended. They added they are open to debates once the House of Representatives passes the measure. Sens. Sergio Osmeña III and JV Ejercito earlier said they support Cha-cha, but only on economic provisions.
Mindanao business leaders raise concerns if Bangsamoro law is not passed Business World 2nd Jun 2015
Mindanao’s business leaders expressed concerns about peace and economic development in the region if the Bangasamoro Basic Law (BBL) is not passed and reiterated their support for the measure. These sentiments were expressed as Senator Ferdinand R. Marcos, Jr. spoke here Friday asserting that “no serious study” was made on the “BBL’s impact on business and economy”.
Senate eyes BBL passage by October The Philippine Star 2nd Jun 2015
The proposed Bangsamoro Basic Law (BBL) may not be passed by its target deadline on June 11. Senate President Franklin Drilon said that the Senate is eyeing to pass the BBL by October. "You know, the reality is that at this stage, it is extremely difficult, if not impossible, to have it approved by June 11. Senator [Bongbong] Marcos has not yet terminated the hearings, there will be one tomorrow, and one the day after tomorrow. I am very pessimistic whether or not a committee report can be filed by June 11," Drilon said. Marcos is the chairman of the Senate committee on local government handling the proposed Bangsamoro measure.
Drilon not ‘overly optimistic’ on BBL passage in June Business Mirror 29th May 2015
Senate President Franklin Drilon admitted on Friday he was not “overly optimistic” that senators can meet the agreed timetable to pass the Palace-backed Bangsamoro basic law (BBL), creating a new entity for Muslims in Mindanao, before Congress adjourns next month. “I am not very optimistic that the BBL will be in place by June 11,” Drilon disclosed at the forum hosted by the BusinessMirror and DWIZ. He said the Local Government Committee, chaired by Sen. Ferdinand Marcos Jr., which is crafting the Senate version of the BBL, is yet to hold two more public hearings on the bill seeking to grant greater autonomy to the new entity that would replace the soon-to-be-abolished Autonomous Region in Muslim Mindanao (ARMM).
Customs
Lina hit for Customs deal Manila Standard Today 2nd Jun 2015
Less than six weeks after being appointed to his current position, Customs Commissioner Alberto Lina was accused of junking a legitimate P650-million contract to favor his own company that had lost in the bidding process. Lawyer Harry Roque said Lina junked the P650-million contract to set up a integrated data processing system for the Bureau of Customs two weeks after he assumed office although the contract had already bee won by the joint venture of Omniprime Marketing Inc. and Intrasoft International Inc. “Lina’s decision to unceremoniously cancel the contract reeks of the foul smell of a clear conflict of interest,” Roque, who is representing the joint venture, said in a press conference.
Government tapping Microsoft to track port containers The Philippine Star 28th May 2015
The Aquino administration is looking at tapping Microsoft Philippines for a container tracking system that would help decongest major thoroughfares amid the growing number of cargo trucks. Cabinet Secretary Jose Rene Almendras said yesterday during a ports briefing organized by the Department of Trade and Industry (DTI) and the Philippine Ports Authority (PPA) that the launch of the tracking system is being pursued amid the resolution of the port congestion. “The other system that I am going to push for is the dream of completing the loop which is the container tracking system,” Almendras said.
Defense & Security
Gov’t, MILF form task force for decommissioned rebels Philippine Daily Inquirer 4th Jun 2015
The Philippine government and the Moro Islamic Liberation Front have signed an agreement creating a task force for decommissioned combatants. The Task Force for Decommissioned Combatants and their Communities will “undertake all efforts related to socio-economic and development programs” and to “assist the panels identify and implement socio-economic priorities and development projects” for the decommissioned rebels and their communities, the Office of the Presidential Adviser on the Peace Process said in a statement on Tuesday. “The new Task Force is part of the continuing effort by the government and the MILF to move forward the other dimensions of the peace agreement, alongside the passage of the law establishing the Bangsamoro government,” said government chief peace negotiator Prof. Miriam Coronel-Ferrer.
Japan boosts PH maritime patrol Manila Bulletin 3rd Jun 2015
The Philippines will get 10 new patrol boats from Japan through its Official Development Assistance (ODA) program and the signing of the deed of donation will be witnessed by President Aquino here tomorrow. Aquino arrived here yesterday for a four-day state visit that will include meetings with Japan’s Emperor Akihito and Empress Michiko today and Prime Minister Shinzo Abe in a summit conference tomorrow. The donation of boats will be made through a tie-up between the Department of Transportation and Communications (DOTC) and the Japan Marine United Corp. for the Maritime Safety Capability Improvement Project (MSCIP). Philippine Ambassador to Japan Manuel Lopez said the 10 patrol boats will be turned over by Japan to the Philippines through the ODA facility. The patrol boats will be used to monitor the country’s coastlines as well as for disaster response and relief, Lopez said.
Philippines' highest-ranking communist rebel held – military Rappler 2nd Jun 2015
The top communist guerrilla leader in the Philippines has been arrested in a blow to the decades-old Maoist rebellion following the detention of his predecessors last year, officials said Tuesday. Adelberto Silva is considered the "highest ranking" leader of the Communist Party of the Philippines (CPP) and its New People's Army (NPA) armed wing, a military statement said. "He is the overall orchestrator of rebel movements in the entire country. He organises the activities of the rebels," military spokesman Brigadier-General Joselito Kakilala told AFP. "This (arrest) will have a huge impact. This will disrupt their strategic direction and programmes," Kakilala added.
Philippines making progress with new naval base near Spratlys Jane's 1st Jun 2015
The Philippine Navy (PN) has released images of the first major access road to a pier being built in Oyster Inlet on the South China Sea side of Palawan Island. Oyster Inlet, which is in Ulugan Bay and 18 km from Naval Station Carlito Cunanan, has been the site of a small pier and fresh water station since the 1950s. It is being expanded into a major naval anchorage along with three other nearby coves. The expansion of Oyster Inlet was announced during a 2013 visit to the Ulugan Bay area by President Benigno Aquino. A PN statement released on 29 May described the building of the road network as a part of a three-year development that will make Oyster Inlet a major naval anchorage for the PN and "visiting allies".
64 Abu Sayyaf members killed, 104 hurt since January The Philippine Star 1st Jun 2015
A total of 64 Abu Sayyaf members were killed and 104 others were injured during encounters with government forces in Sulu during the first five months of the year, military data showed. According to a report by the Joint Task Group Sulu, 39 members of the local terrorist group were killed in the first quarter while 25 others died within April to May. Eighty Abu Sayyaf members were wounded in the first three months while 24 others were injured since April. Joint Task Group Sulu commander Col. Allan Arrojado attributed the Abu Sayyaf deaths and injuries to the military’s relentless operations.
16 hurt in Jolo police camp blast The Philippine Star 31st May 2015
Security forces launched a massive hunt for the bombers that set off Friday night two explosives near a mosque inside the Philippine National Police (PNP) Camp Asturias in Jolo, Sulu, injuring 11 police officers and five civilians, including three children. The attack appears to have been well-planned as attackers first lobbed a grenade and waited for responding policemen to arrive before setting off a bigger improvised explosive device (IED). Four of the victims are still in grade school, according to the regional peace and order council (RPOC) of the Autonomous Region in Muslim Mindanao (ARMM), which includes Sulu as a component province. RPOC chairman and ARMM Gov. Mujiv Hataman, who, along with his cabinet, condemned the bombings, said he is ready to shell out an “earnest amount” for any information leading to the perpetrators’ arrest.
28 AFP modernization projects face delay The Philippine Star 28th May 2015
Twenty-eight military projects, including base upgrades, various air assets, and ships might be delayed, as Malacañang has still to approve the Armed Forces Modernization Program. Sources said the modernization program was submitted to Malacañang in February 2013, two months after President Aquino signed the bill into law. However, the program has yet to be approved, The STAR learned yesterday. A security official said the funds for the projects would not be released until the modernization program gets Aquino’s approval.
U.S. Affirms Ironclad Promise To Defend The Philippines HNGN 29th May 2015
The U.S. defense secretary personally told his Philippine counterpart of the country's reassurance on Wednesday. U.S. officials have reaffirmed their commitment to defending the Philippines from the ongoing territorial dispute with China over an island in the South China Sea.
Economics
PH climbs ranking in ease of doing business index Philippine Daily Inquirer 4th Jun 2015
The Philippines posted the second biggest rank improvement among member economies of the Asia Pacific Economic Cooperation (Apec) in terms of ease of doing business over the last five years, according to state think tank Philippine Institute for Development Studies. According to the PIDS policy note authored by Ronald U. Mendoza, Tristan A. Canare and Alvin P. Ang, the Philippines made the second biggest jump next to Russia as it rose to 95th place from 144th during the 2010 to 2015 period, based on World Bank’s ease of doing business ranking. In terms of World Bank’s “distance-to-frontier” (DTF) index, the Philippines similarly posted the second biggest improvement next to Russia, according to PIDS.
Foreign ownership limits hinder Phl growth potential The Philippine Star 3rd Jun 2015
Restrictions in foreign ownership of land and uneven investments in public infrastructure continue to prevent the country from realizing its full economic potential, according to a former National Economic and Development Authority (NEDA) chief. University of the Philippines economist Dr. Gerardo P. Sicat, the first director general of NEDA, underscored the implications of these policy issues that hinder national development in his recent visit to the NEDA Regional Office in Northern Mindanao. These include restricting foreign nationals to own land, investing in public infrastructure, and prohibiting them to utilize the country’s natural resources.
BSP plan to auction deposits ‘ill-timed’ Business Mirror 2nd Jun 2015
The central bank’s plan to auction term deposits is coming at the worst possible time for a government reeling from surprisingly bad economic growth data. The weekly sales, aimed at soaking up excess cash that could spur investments in risky assets, will allow lenders to compete for a fixed volume of deposit access to the Bangko Sentral ng Pilipinas (BSP). BDO Unibank Inc., the country’s biggest lender, sees them helping push up the secondary-market yield on three-month government bills to as high as 3.25 percent by year-end, from 2.46 percent on Monday.
Treasury to set timing for Philippine debt swap before US Fed rate hike Business World 1st Jun 2015
The Government is eyeing to conduct its planned domestic debt swap before the US Federal Reserve makes its move to hike borrowing costs, which is widely expected to happen by September this year. National Treasurer Roberto B. Tan yesterday said that although the timing and size of the peso-denominated bond swap have yet to be finalized, the government will offer longer tenors as the main objective of the plan is to extend the maturity of its debts.
DTI, DOF stall progress of RFI bill in Congress Business Mirror 1st Jun 2015
Hopes to pass the proposed rationalization of fiscal incentives (RFI) bill are dimming, as the Department of Trade and Industry (DTI) and the Department of Finance (DOF) continue to butt heads on the measure, making the RFI one of the longest pending bills in Congress. Even as Senate President Franklin M. Drilon, in a roundtable with the BusinessMirror last week, said that they “are not giving up” on the RFI bill, the DTI and the DOF continue to stall the measure’s progress. Senate Committee on Ways and Means Chairman Juan Edgardo M. Angara said that even if they prioritize the bill, they could not move forward because the DTI and the DOF have yet to come up with a consolidated version.
Phl seen among 10 fastest-growing economies The Philippine Star 1st Jun 2015
The Philippines is expected to be among the 10 fastest growing economies in the world by 2023, according to the Center for International Development (CID) at Harvard University. CID, which serves as Harvard’s leading research hub focused on resolving issues of public policy to generate stable, shared and sustainable prosperity in developing countries, released its new projections on May 7. CID’s new projections showed the Philippines is expected to have an average annual growth rate of 5.5 percent by 2023, placing 10th out of 128 countries. The ranking places the Philippines ahead of Turkey (5.3 percent), Indonesia (5.2 percent), Pakistan (5.1 percent) and China (4.6 percent).
IMF mulls Phl growth forecast downgrade The Philippine Star 1st Jun 2015
The International Monetary Fund may downgrade its economic growth forecast for the Philippines due to the lower-than-expected first quarter economic growth announced last week. Shanaka Jayanath Peiris, IMF resident representative, said in an e-mail the IMF would be taking into consideration the lower-than-expected 5.2-percent growth in the first quarter for its next release of projections. “The significant negative surprise in first quarter and base effects going forward mean that our 6.7 forecast for 2015 will be reviewed before the next WEO (World Economic Outlook) forecast release,” Peiris said. “The review is tilted to the downside at present,” he added.
Business groups reject House-approved Timta Business Mirror 31st May 2015
Foreign and local businessmen rejected salient features of the proposed Tax Incentives Management and Transparency Act (Timta), including the electronic-filing (e-filing) requirement of the Bureau of Internal Revenue (BIR); the slapping of “steep” penalties for nonsubmission of incentive claims during the prescribed period; and an extension of the BIR’s assessment period. In a position paper released to the media on Sunday, 14 local and foreign business groups, representing 35,000 businesses in the country, identified the provisions they want to scrap in the House of Representatives’s version of the contentious Timta.
Govt to consider bond swaps Manila Standard Today 31st May 2015
The Philippines is considering bond swaps for the government’s local and foreign debt before an impending Federal Reserve interest-rate increase, Finance Secretary Cesar Purisima said over the weekend. “If there’s market opportunity before the Fed acts, we will move,” Purisima, 55, said in an interview in his office in Manila Friday. “We’re always on the lookout for both foreign and local opportunities to lengthen debt maturity and reduce overall interest cost,” he said, without specifying an amount. The government is addressing a “systemic problem” in delays to state spending, including ways to accelerate outlays for infrastructure projects, Purisima said. Economic growth slid to a three-year low last quarter, putting pressure on President Benigno Aquino III to fix bottlenecks before an increase in US interest rates that may prompt financial market volatility.
What's With the Philippine Economy? The Diplomat 29th May 2015
Over the past few years, the Philippines has emerged as one of the most vibrant economies in the world, shedding its old image as “the sick man of Asia.” Manila closed out last year as Asia’s second-fastest rising economy, after China, with a 6.1% growth rate. Yet the first quarter statistics for 2015 are a bit worrying. According to the Philippine Statistics Authority, growth in the Philippine economy slowed in the first quarter of 2015 to 5.2%, its weakest level in three years and way below the 6.6% mark many had predicted. The slowdown has been attributed to several factors. Exports dropped dramatically – growing just 1% on year compared with 12.8% in the fourth-quarter – amid declining external demand across some of Manila’s main trading partners such as Japan and China. Government spending was also quite low at 4.8%, nearly half what it was in the fourth quarter of last year.
Philippine Growth at 3-Year Low on Failure to Speed Up Spending Bloomberg 28th May 2015
Philippine economic growth slid to a three-year low last quarter as exports and government spending faltered, putting at risk President Benigno Aquino’s goal of faster expansion. Stocks slumped. Gross domestic product increased 5.2 percent in the three months through March from a year earlier, the Philippine Statistics Authority said in Manila Thursday. That is lower than all but one estimate in a Bloomberg survey whose median was 6.6 percent. With about a year left in office, Aquino faces the challenge of bolstering state spending to shield the economy from an uneven global recovery that’s hurt Asian exports. Economic Planning Secretary Arsenio Balisacan said today he expects budget disbursement will pick up in the remainder of the year, and that growth prospects for 2015 are still good.
GDP grows 5.2%, slowest in 3 years Manila Standard Today 28th May 2015
The Philippine economy grew 5.2 percent year-on-year in the first quarter of 2015, its slowest pace in three years, on sluggish exports and government spending, data from the Philippine Statistics Authority showed Thursday. The first-quarter growth was the slowest since the 3.7-percent expansion recorded in the fourth quarter of 2011. It was also slower than the 5.6-percent growth a year ago and the revised 6.6-percent expansion in the fourth quarter of 2014 and fell below the government’s target of 7 percent to 8 percent for 2015. “The 5.2-percent GDP growth in the first quarter of 2015 is lower than what the government and the market expected for the period. While growth in the private sector remains robust, the slower-than-programmed pace of public spending, particularly the decline in public construction, has slowed down the overall growth of the economy,” National Economic and Development Authority director-general and Economic Planning Secretary Arsenio Balisacan said.
Energy
Petilla: PHL still not ready for nuclear power Business Mirror 1st Jun 2015
The operation of the mothballed Bataan Nuclear Power Plant (BNPP) and the putting up of a similar one in any part of the country is next to impossible considering the mind-set of the Filipino people. This in essence, is the opinion of Energy Secretary Carlos Jericho L. Petilla in reaction to the report that former Pangasinan Fifth District Rep. Mark Cojuangco, who is eyeing to run for governor of the province, has not abandoned his earlier call for the operation of the BNPP. There was also a report that in order to prove that a nuclear plant is safe, he is willing to let one nuclear plant built next to his house in Sison, Pangasinan.
PH banks’ capital buffer above minimum, says BSP The Inquirer 28th May 2015
Major banks’ capital buffer remained at comfortable levels at the end of last year as companies raised record amounts of cash to meet tougher regulatory requirements. Data from the Bangko Sentral ng Pilipinas (BSP) showed that the average capital adequacy ratio (CAR) of universal and commercial banks remained well above industry minimums. There was just a slight decline due to a change in how regulators recognized capital set aside by foreign banks. The BSP said the banks’ buffer was made up mostly of higher-quality common equity tier 1 capital, reflecting the industry’s conservative behavior.
Financial Services
IC endorses EO on insurance ‘cat-pool’ Business Mirror 3rd Jun 2015
Insurance Commissioner Emmanuel F. Dooc said the draft executive order (EO) of the so-called cat-pool, or catastrophe pool, is already under consideration by Finance Secretary Cesar V. Purisima for his endorsement to President Aquino. “We have reached that point when the issue is legacy matters. I think the cat-pool is a major achievement the President can bequeath to the Filipino people, because we really need one. I’m confident that the President will study it and push it the same way that he’s pushing for the BBL [Bangsamoro basic law],” Dooc said. The cat-pool will make mandatory the insurance cover for private dwellings and of small- and medium-sized enterprises to protect against loss of property brought about by natural disasters and other catastrophic events.
Nonlife insurers report P56.28-billion premium sales in Q1 Business Mirror 3rd Jun 2015
Nonlife insurance industry premium collected in the first quarter amounted to P56.28 billion, representing growth of 45.53 percent, according to the Insurance Commission. Insurance Commissioner Emmanuel F. Dooc said the high growth in the premium collected and the net profits of nonlife insurers show the tremendous potential of the industry in contributing to the growth of the economy. The P56.28-billion total premium collected in the first three months was P17.68 billion more than the P38.6-billion premium collected in the same period in 2014. “These figures show that there is a big potential and a lot of opportunities that are open to the nonlife insurance industry,” Dooc said.
Insurance industry net income rose by 32.5% in first quarter Philippine Daily Inquirer 3rd Jun 2015
The insurance industry posted a hefty 32.5-percent year-on-year growth in net income during the first quarter, mainly on higher premium production, as well as the recovery of the bancassurance sector. Citing preliminary data based on quarterly reports submitted by life and nonlife firms, Insurance Commissioner Emmanuel F. Dooc said on Monday that the industry’s net income jumped by almost a third to P5.232 billion at the end of March from the P3.948 billion reported a year ago. Dooc said the stronger growth in the first quarter was attributed by industry players to the recovery in bancassurance activities. The life sector saw its first quarter net income rise by 27.1 percent to P4.384 billion. The non-life sector, meanwhile, registered a faster 70.3-percent rise in net income to P847.2 million.
Banking industry profit up 10.7% in Q1 The Inquirer 2nd Jun 2015
The profits of the country’s major banks improved in the first quarter of the year from year-ago figures but still short of 2013’s record levels as trading operations remained less fruitful. Data from the Bangko Sentral ng Pilipinas (BSP) showed that the shift in the industry’s focus to traditional commercial banking operations from securities trading had paid off as profits in January to March rose by more than 10 percent. This reversed last year’s dip in earnings caused by volatility in the financial markets, which wiped out income from securities trading. At the end of March, the country’s 36 universal and commercial banks booked a combined profit of P32.77 billion, up 10.71 percent from last year’s P29.60 billion.
Citi appoints new country officer for Philippines ABS-CBN News 2nd Jun 2015
Citi named veteran banker Aftab Ahmed as the new Citi Country Officer for the Philippines. In a statement, Citi said Ahmed's appointment will take effect on July 15, 2015. Ahmed replaces Batara Sianturi, who will assume his post as country head for Citi Indonesia. Ahmed will assume his new role upon regulatory approvals. He will be responsible for all Citi businesses across the franchise in the Philippines. He will be reporting to Michael Zink, Head of ASEAN and Citi Country Officer for Singapore.
Bancassurance drives first-quarter profit growth of insurance industry InterAksyon 2nd Jun 2015
Profit at the country’s insurance industry rose by nearly a third in the first quarter of the year. Data from the Insurance Commission (IC) show that insurers earned a combined P5.23 billion in the January to March period, a 32.52 percent increase from the P3.95 billion in the same three months of last year. Life insurers accounted for 83 percent of the industry’s total income, with the non-life sector contributing the remaining 17 percent. According to IC, the improvement in the industry’s profitability was due to the bancassurance business, which pertains to a scheme whereby banks use their sales channels to market insurance products.
More foreign banks coming Manila Standard Today 2nd Jun 2015
The Bangko Sentral ng Pilipinas expects the number of foreign banks planning to expand in the Philippines to increase in the coming months as more have expressed their interest to locate here. Bangko Sentral Deputy Governor Nestor Espenilla Jr. confirmed the interest of foreign banks to do business in the Philippines, A number of foreign banks have expressed their intention to enter the domestic banking industry, although not formally submitting their applications to the bank regulator, “[As of now], two [applications] were submitted and under evaluation. Plus those who said they will apply but have not actually submitted an application yet,” Espenilla said in a text message Tuesday.
Nonlife insurers seek tax relief as ‘Big One’ looms Business Mirror 2nd Jun 2015
The various insurers, with the support of the Insurance Commission, has urged Congress to lighten the tax burden on the nonlife insurance industry in preparation for the “Big One,” or the big earthquake seen along the Marikina Valley fault line cited by government scientists. Philippine Insurers and Reinsurers Association (Pira) Chairman Michael F. Rellosa said the proposed lowering of tax rates on the nonlife insurance industry will help the country prepare for the devastation when it finally comes. At present, the premium tax imposed on nonlife insurance policies is the highest in the world, ranging from 24.5 percent to 26.5 percent.
Regional big gun looking to hook with Manila insurer Business Mirror 2nd Jun 2015
An Asian conglomerate is looking for a partner in the Philippines to establish a foothold on the life insurance industry here, Insurance Commissioner Emmanuel F. Dooc said on Monday. Dooc said the Asian conglomerate, which requested that its name be kept confidential in the meantime, is seriously considering the acquisition of an existing life insurance company in the Philippines as part of its expansion plans. “This is an Asian company, the largest conglomerate in their country. They requested that their name be held in confidence, but if any insurance company would like to deal with them, they can contact me,” Dooc said.
Nonessential purchases seen at 50% of card transactions Business Mirror 31st May 2015
So-called discretionary spending in the Philippines, in essence the consumption of nonessential goods and services, was seen making up 50 percent of all such consumption activities just five years down the line, the global payments platform Visa Inc. told financial reporters only recently. Stuart Tomlinson, Visa country managers for the Philippines and Guam, also said the manner under which such consumption happens was seen shifting from predominantly cash basis at present to electronic, as the use of credit cards and its lesser-rated variant debit card gains even more ground. Tomlinson said young adults account for 20 percent of the country’s discretionary consumption, spending an average of P1,760 on nonbasic items.
BSP approves 5% minimum leverage ratio for banks The Philippine Star 31st May 2015
The Bangko Sentral ng Pilipinas (BSP) issued yesterday additional guidelines for universal and commercial banks’ leverage ratio under the stricter Basel III measures. The Monetary Board has approved a five percent minimum leverage ratio, which measures a bank’s Tier 1 capital against its total on-book and off-book exposures. The BSP said this means the maximum exposure that a bank should keep would be 20 times its Tier 1 capital. “Under the Basel III reform agenda, the leverage ratio needs to be appreciated alongside the capital adequacy ratio (CAR). Both ratios relate a measure of capital against an indicator of bank exposure, providing quantitative guidance on the extent of assets that a bank can carry for a given level of capital,” the BSP said.
Rules on issuance of LTNCTDs eased The Philippine Star 31st May 2015
The Bangko Sentral ng Pilipinas has eased its rules on the issuance of long-term negotiable certificates of time deposits (LTNCTDs) which is used by banks to raise capital. In Circular No. 877, the central bank extended the period a bank can issue the LTNCTDs from the date it was approved by the policymaking Monetary Board. “The bank has one year to complete the issuance of total amount approved by MB. (It’s) up to (the) bank to decide on timing and size of tranching within the period,” BSP Deputy Governor Nestor A. Espenilla, Jr. said in a text message.
Moody’s upgrades credit rating of PNB Business Mirror 28th May 2015
Moody's Investors Service has upgraded the rating of Philippine National Bank (PNB) to investment grade, reflecting the consistent improvement in the bank’s credit profile. PNB’s long-term and short-term ratings were raised two levels up from “Ba2/NP to Baa3/P-3.” Likewise, the ratings agency raised PNB’s baseline credit assessment (BCA) and Adjusted BCA to “Ba1” from “Ba3.” The ratings upgrade serves as validation of PNB’s efforts at fortifying its business. This recognizes PNB’s drive toward its long-term corporate goals of high profitability supported by a strong balance sheet. “The upgrade of the bank’s BCAs and adjusted BCA reflect improvements in asset quality profiles during a period in which new nonperforming loans (NPLs) formation has remained low in the Philippines,” Moody’s explained.
Rules on deposit certificates relaxed The Inquirer 28th May 2015
Regulators have relaxed rules on deposit certificates issued by banks, cutting the amount of documents needed and removing timing requirements for selling to investors. New rules partly scale back tougher requirements on long-term negotiable certificates of deposits (LTNCD) that banks sell to the public. LTNCDs allow banks to lock in depositors’ cash for longer periods of time to create a better match between the available funds and maturities of loans. The Bangko Sentral ng Pilipinas (BSP), in a circular approved this month, removed the requirement for banks to sell LTNCDs six months after these securities are given the green light by the Monetary Board.
Debit card usage rising Manila Standard Today 28th May 2015
Global payments company Visa expects the use of debit card in the Philippines to increase over the next five years and account for 50 percent of the country’s discretionary expenditures by 2020. Visa Philippines country manager Stuart Tomlinson said in a news briefing more Filipinos were turning to debit card for their cashless transactions. “Debit card usage is growing thrice faster than the market. At present it comprises only 5 percent of total card transactions but its usage will soon rise to be at par with how consumers are using credit cards,” he said. The company said debit card usage among Filipinos was on the rise as more consumers recognized the safety and convenience Visa cards provided.
Food & Agriculture
Banana exporters worry over pending bills on agribusiness Business Mirror 2nd Jun 2015
Fearing further regulation that would eventually kill the industry, the Pilipino Banana Growers and Exporters Association (PBGEA) has appealed to the government against the possible passage of House Bill (HB)5161, authored by Rep. Teddy Brawner Baguilat of Ifugao. The bill proposes to further regulate the establishment and implementation of agribusiness ventures arrangements in land reform areas, in which the industry group sees as a potential threat that could endanger the viability of the $1-billion banana export industry. “Aside from the challenges of climate change and calamities, plant diseases, economic fluctuations, geopolitical conflicts, as well as domestic problems and disruptions that are brought about by natural, economic, scientific and ideological means, the Philippine banana industry is also confronted with a House bill that, if passed, might even kill the industry,” PBGEA Executive Director Stephen Antig said in a text message on Tuesday.
Health & Life Sciences
Gov’t seen to spend P500M on HIV drugs Philippine Daily Inquirer 29th May 2015
The government is expected to spend at least P500 million next year on antiretroviral drugs that delay the effects of the incurable disease acquired immune deficiency syndrome (AIDS). It spends between P8,000 to P30,000 for the yearly treatment of a person living with human immunodeficiency virus (HIV). The amount that the government would spend on AIDS and HIV next year does not include funds needed for tuberculosis and pneumonia, which are complications of HIV.
ICT
Philippines one 'signal' away from free Wi-Fi CNN Philippines 1st Jun 2015
The country is just one more signal away from finally going online. This, after the House of Representatives recently gave House Bill 1550 — or the Free Public Wi-Fi Act — a big signal boost by approving on third and final reading the proposed measure that aims to provide the public free Internet access in government buildings and public establishments throughout the country. It's now up to the Senate to give the measure, also known as House Bill 5791, the final go-signal with Kabataan Partylist Rep. Terry Ridon, the bill's primary author, urging the senate to fast-track the passage of their version of the bill. The bill, in general, seeks to provide free Wi-Fi service in the buildings of national government offices, municipal halls, provincial capitols, state universities and colleges, public parks and plazas, public hospitals, and public transportation terminals.
Infrastructure
San Miguel, Ayala-Metro Pacific keen on 'Bicol Express' train project InterAksyon 2nd Jun 2015
The P170-billion South Line Railway Project under a public-private partnership (PPP) scheme is open for investors, Albay Gov. Joey Sarte Salceda said Tuesday. Salceda said the Department of Transportation and Communications (DOTC) will auction off the railway project of the Philippine National Railways (PNR) to interested bidders. In an email statement, the Albay governor said Ayala Corporation, which will partner with the Metro Pacific Investments Corporation, and San Miguel Corporation (SMC), have expressed interest in bidding for the multibillion-peso train project, which will run from Tutuban in Manila to Legazpi City, Ablay, then on to Matnog, Sorsogon.
Fund study on proposed Samal Island bridge, government asked The Philippine Star 2nd Jun 2015
The National Economic and Development Authority has been asked to fund a feasibility study for a proposed bridge that will link the Island Garden City of Samal to this city. Davao del Norte Gov. Rodolfo del Rosario is hoping that the feasibility study will be completed before his term ends next year. Del Rosario is asking the government P90 million that will be used for the study. He said if the project is approved, the construction of the bridge would start under the new administration. The governor said that if the study would be completed within his term, his successor would have to pursue the project.
Bidding for $3.8-B North-South Rail Project in Q3 Manila Bulletin 1st Jun 2015
Local and foreign railway construction companies, rail line operators, rolling stock firms and investors have until the third quarter of the year to form consortiums and to strategize in joining the auction of the Philippine government’s biggest infrastructure project to date: $3.8-billion (P170.7 billion) North-South Railway Project (NSRP). The government is now inviting bidders for the opportunity to design, build, finance, operate and maintain a 56-kilometer commuter rail from Manila to Laguna and a 653-kilometer long-haul passenger rail from Manila to Legazpi City in Albay with extensions to Batangas City and Matnog in Sorsogon. Although the government is yet to announce the exact deadline for the submission of prospective bidders’ qualification documents, the notice of prequalified bidders is scheduled for release within the third quarter as well as the bid documents and draft concession agreement. Based on the indicative timeline stated in the NSRP project brief, bid submission and notice of award are targeted by the first quarter of 2016.
New bidding terms for airport contracts out this week Business World 31st May 2015
The Department of Transportation and Communications (DoTC) will finalize this week the bidding terms for P108.19 billion worth of deals to develop, operate and maintain (O&M) five regional airports under the public-private partnership (PPP) scheme, after at least one prospective bidder pushed for a single bundling. “DoTC will come out with the final bundling policy next week,” Cosette V. Canilao, executive director of the PPP Center, said in a mobile phone reply over the weekend.
No short list for water PPP deal Business World 31st May 2015
San Miguel's infrastructure unit and publicly listed Megawide Construction Corp. -- two groups that won a slew of public-private partnership (PPP) deals -- have failed to make the short list for parties that will be allowed to bid for an P18.72-billion PPP contract that will build an alternative water source for Metro Manila. Spain’s Abeinsa Infraestructuras Medio Ambiente also failed to qualify for the auction of the New Centennial Water Source-Kaliwa Dam Project (NCWS-KDP), the Metropolitan Waterworks and Sewerage System (MWSS) told BusinessWorld. As a result, the water regulator will have to conduct another prequalification process for that PPP project that is intended to provide the Philippine capital a water source other than the Angat Dam
Manufacturing
Philippines sets $600 mln in incentives to boost falling car output Reuters 2nd Jun 2015
The Philippines has launched a long-anticipated scheme that will provide incentives worth $600 million over six years to its tiny auto industry in an attempt to lift the country's shrinking car output and catch up with regional rivals. The Southeast Asian nation's automobile sector, dominated by Japanese car makers such as Toyota Motor Corp and Mitsubishi Motors, had been clamouring for the incentives saying they were needed to boost production, and have said they might shift manufacturing to cheaper neighbouring countries. President Benigno Aquino signed the incentives into an executive order before he left on Tuesday for Japan. Under the scheme, the government will provide an average of 4.5 billion pesos ($100.7 million) worth of incentives annually, or a total of 27 billion pesos in six years, to support the production of three vehicle models.
Regional Trade Agreements
Aquino’s Japan agenda focused on trade, China Business World 2nd Jun 2015
President Benigno S. C. Aquino III is scheduled to meet business groups during his four-day state visit to Japan, highlighting the prospect of trade agreements to be sealed during the trip, though security matters are also expected to come to the fore when he meets with leaders of the Japanese government.
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