Philippines Update: Antitrust Bill to Go Before President Aquino

• The Philippine Department of Trade and Industry (DTI) is inviting industry players and government stakeholders to Celebrating 15 Years of the E-Commerce Act: A Forum and Workshop on the Philippine E-Commerce Roadmap 2015-2020 on 15 June 2015, 8:30 am to 5:00 pm at the SGV Hall, 3/F, AIM Conference Center, Benavidez corner Trasierra Streets, Legazpi Village, Makati City.  If interested in attending, respond with your name, position, agency/company/organization, email, telephone number, and indicate whether you are attending the am session, pm session, or both.  Should you have any questions, please contact eco@dti.gov.ph.  A full agenda for the workshop can be found here.
   
• July 8: 2015 Health & Life Sciences Industry Mission to the Philippines

Antitrust Bill to Go Before President Aquino

• The House of Representatives on has approved on final reading its version of a bill prohibiting anti-competitive behavior and other unfair business practices.  The Philippine Competition Act (Bill No. 5286), which was principally authored by House Speaker Feliciano Belmonte Jr., will now be presented to President Aquino III for his signature.  The bill establishes a National Competition Policy with the aim of ensuring “free and fair competition in trade, industry and all commercial economic activities.”  Among its key provisions, the policy prohibits any form of economic concentration in production, distribution, trade, or industry tending to “unduly stifle competition, distort, manipulate or constrict the discipline of free markets.”  Business entities found to be engaging in unfair practices face a fine of up to P100 million for the first offense, and up to P250 million for the second offense.  The bill additionally provides for the creation of a national antitrust commission under the Office of the President to oversee and implement the new rules.  Foreign and local business groups alike have characterized passage of the Philippine Competition Act as a priority for the Aquino administration.  Similar versions of the law have been introduced in past congressional sessions, only to founder on certain controversial provisions.  Earlier this month, the Department of Justice (DOJ) circulated a memorandum urging Congress to remove clauses from the bill which it said were inconsistent with global standards and international best practices.  The full text of the Philippine Competition Act can be read here.

Ten-year E-Commerce Roadmap to be Unveiled in the Philippines

• ​The Philippine’s Department of Trade and Industry (DTI) will present its draft 10-year E-Commerce Roadmap at the AIM Conference Center in Makati on June 15, 2015.  This presentation comes after the DTI confirmed in February 2015 its commitment to the creation of an E-Commerce roadmap, announcing it intended to gather input from industry and government stakeholders in a series of seminars and webinars.  These meetings took place on 15 December 2014, 11 May 2015, 18 May 2015, and 22 May 2015, according to the DTI website.  According to Undersecretary Prudencio Reyes Jr., who has led the seminars, the DTI roadmap will focus on coming up with new strategies to propel the Philippines to maximize the growth of e-commerce.  The Roadmap will likely include measures to engage small and medium enterprises in e-commerce and improve education around e-commerce.  According to the DTI, the Philippine internet market in 2014 accounted for P1.4 trillion (US$31.1 billion), or 8-13 percent of the country’s Gross Domestic Product (GDP).  The e-commerce industry is expected to grow to USD 2B by 2015.  The e-commerce industry however faces major challenges such as cumbersome rules and procedures and the low rate of credit-card use in Philippines, which in 2012 was 5 percent of the population.  A DTI webinar on the proposed content of the roadmap can be found here and slides from the webinar can be found here. 

Philippines to Establish Department of Information and Communications Technology

• This week the Philippine Senate passed Senate Bill No. 2686.  The Bill would adjust government policy on cybersecurity, consumer protection, and privacy, but most importantly would create a new Department of Information and Communications Technology (DICT).  The Philippines is one of few East Asian countries to lack a cabinet-level ICT institution, and over the past decade attempts at creating one have failed, often in connection with the withdrawal of support by key government ministries who are stakeholders in the DICT’s creation.  Thus in 2004, the Commission on ICT (CICT) was created under the auspices of President Gloria Macapagal-Arroyo, “as a transitory measure to the creation of a Department of Information and Communications Technology (DICT)”, only to be dissolved and merged with the Department of Science and Technology (DOST) seven years later in 2011.  This seven-year period saw departments such as the Telecommunications Office and the National Telecommunications Commission being transferred back and forth between the Department of Transportation and Communications and the CICT up until CICT was dissolved.  If created now, the DICT would promote cohesive and transparent government policy on ICT and thus is desirable from a business perspective.  For example, the DICT will focus on attracting foreign investment opportunities to “speed up industry growth and competitiveness.”  The DICT will be used to integrate government databases and ICT systems, and permits, licenses, land titles would now be electronically applied for, processed and issued.  To become law, the bill must now be passed by the House and signed into law by President Aquino. Another ICT bill up for review in the Philippine congress is an Act that mandates free Wifi in public spaces across the country, which passed the House on May 29.

Bureau of Customs Cancels Planned Integrated Customs Processing System

• Following a month-long internal review, the Philippine Bureau of Customs (BoC) has announced the cancelation of the Integrated Electronic Customs System (i-ECPS).  In a June 1 statement, Commissioner Alberto Lina said that changing market conditions necessitated the discontinuation of the US$14.4 million contract in favor of more efficient and cost-effective options.   "We understand that there are existing systems that can fulfill the needs of the bureau, which are potentially at least 50 percent cheaper," he said.  The i-ECPS was the intended replacement for the Bureau’s electronic-to-mobile (e2m) system.  Upgrading the Bureau’s data network to be centralized nationwide and made compatible with equivalent systems in neighboring countries is seen as vital for integration into the ASEAN Single Window program.   Although the i-ECPS tender was awarded by Congress, Commissioner Lina’s position gives him authority to terminate the contract without consulting the legislature.  The Commissioner said he plans to re-bid the project with particular consideration for the Automated System for Customs Data, which has been endorsed by the World Bank.  Following his announcement, Mr. Lina was accused of engaging in acts marked by conflict of interest by Henry Roque, the lead counsel for the joint-venture that had been awarded the i-ECPS tender.  In a press conference, Mr. Roque noted that one of the five losing bidders for the project, E-Konek, is a company owned by Mr. Lina.  The Commissioner has strongly denied any suggestion of impropriety.  One week after being appointed to the BoC, Mr. Lina said he and his family would be divesting from companies that directly do business with the Bureau.  Subsequently, he has also announced that E-Konek will not participate in a future bid for an integrated customs processing system.   The Commissioner’s announcement, updated to address accusations of malfeasance, can be found here.

BSP Governor Links Infrastructure Development to Sovereign Credit Rating

• At late May’s Philippine Investment Summit in Makati City, Bangko Sentral ng Pilipinas Governor Amando Tetangco noted the potential future impact of his country’s suboptimal infrastructure on its sovereign credit rating and broader growth prospects.  While the Philippines has in the past two years enjoyed a sustained trend in credit rating upgrades from the likes of Moody’s and Fitch, Tetangco noted that the stable outlook, BBB rating the Philippines currently enjoys from Standard & Poor’s (S&P) is susceptible to growth impairment caused by inadequate infrastructure.  Tetangco based those remarks on a May 2014 visit from S&P analysts during which the country’s infrastructure was cited as a serious constraint on optimal future growth.  In addition to infrastructure, the analysts added that regulatory reforms to enhance the business climate are required and that such reforms would hedge against slowdowns in export markets such as China.  Manila has cited the need to enhance Philippine competitiveness in industries such as manufacturing and tourism, both of which require transportation, energy and port infrastructure well beyond what currently exists in the archipelago.  In addition to summarizing S&P’s analysis for reporters covering the summit, Tetangco affirmed that Philippine infrastructure must improve for the country to realize its inclusive growth objectives.  A key element of that plan should be to facilitate the disbursement of funds by the Department of Finance, which up until now has not succeeded in circulating funds marked for infrastructure.  Lastly, the sort of regulatory reforms that S&P deems necessary would likely help attract increased private capital to infrastructure in the Philippines.

China military says conducted drills near Taiwan, Philippines Channel NewsAsia 10th Jun 2015
Chinese warships and aircraft on Wednesday passed through the Bashi Channel between Taiwan and the Philippines to hold routine planned exercises in the Western Pacific, China's Defence Ministry said. China's increasingly assertive moves to press sovereignty claims in the East and South China Sea have rattled the region and aroused concern in Washington, although the country says it has no hostile intent. China has overlapping claims with the Philippines, Vietnam, Malaysia, Taiwan and Brunei in the South China Sea, through which US$5 trillion in ship-borne trade passes every year.

Philippines Strengthens Foreign Alliances Amid China Sea Dispute Voice of America 5th Jun 2015
This week the Philippines president was in Japan, where he spoke to friendly audiences about China’s expansive maritime territorial claims. Tensions over territorial disputes with China are building in both Tokyo and Manila, but that is doing little to slow Beijing’s efforts to build artificial islands in the South China Sea. Protesting Scores of protesters waved placards in sweltering heat outside the Chinese consular office in Metro Manila Thursday. They oppose China’s rapid reclamation work on ever-expanding islands that the Philippines claims in the South China Sea, locally called the West Philippine Sea. High school history teacher Raymond Basilio said last week he decided to protest by giving up milk, canned goods and noodles from China. “Most of the products in the Philippines right now are produced from China so if we Filipinos will start boycotting that, maybe that will say something about them,” he said.

National Affairs
Speaker: My best is not good enough to pass Cha-cha The Philippine Star 11 Jun 2015
House Speaker Feliciano "Sonny" Belmonte Jr. admitted late Wednesday night that his best was not good enough to convince members of the House of Representatives to vote in favor of the proposed economic Charter Change (Cha-cha). The speaker decided to cancel the voting for the Resolution of Both Houses 1 (RBH 1) after he failed to get the number of votes needed to approve the measure. Attendance count on the last day of session was 267. Three-fourths or 119 of the total 191 regular numbers is needed to approve the economic Cha-cha.

House adjourns without Cha-cha vote InterAksyon 10th Jun 2015
The House of Representatives adjourned Wednesday night without voting on a resolution amending the economic provisions of the 1987 Constitution. The chamber was expected to approve Resolution of Both Houses No. 1 (Proposing Amendments to Certain Economic Provisions of the 1987 Constitution of the Republic of the Philippines Particularly on Articles XII, XIV and XVI), with Speaker Feliciano Belmonte Jr. as principal author. The resolution proposed the insertion of the phrase, "unless otherwise provided by law," into Article XII pertaining to the national economy and patrimony; Article XIV on Education, Science and Technology, Arts, Culture and Sports; and Article XVI or the general provisions.

Senate passes Tax Incentives Management and Transparency Act Rappler 10th Jun 2015
The Senate on Monday, June 8, passed the Tax Incentives Management and Transparency Act (TIMTA), a measure geared toward promoting greater transparency and accountability in the grant and administration of tax incentives to business entities, individuals, and corporations. Senator Juan Edgardo “Sonny” Angara, chairman of the Senate Committee on Ways and Means, also sponsored TIMTA or Senate Bill No. 2669, a consolidation of bills authored by the measure’s co-sponsors, Senate President Franklin Drilon and Senate Pro Tempore Ralph Recto. Drilon said the main purpose of the bill is to “make public and let the sun shine on the tax incentives which companies enjoy.”

Malacañang steps up Bangsamoro Autonomous Region lobbying effort Business Mirror 10th Jun 2015
Malacanang lobbyists will work overtime with marching orders to step up the Aquino administration’s efforts to influence undecided members of the Senate and the House of Representatives to woo enough votes for the proposed Basic law on the Bangsamoro Autonomous Region (BLBar) even during the four-week congressional recess from June 12 to July 26. This was disclosed at a media briefing on Wednesday by Presidential Spokesman Edwin M. Lacierda, while assuring that both the government and the Moro Islamic Liberation Front (MILF) agreed that their peace pact “should have a legal status, and so they went through the legislative process and crafted the BLBar.”

Legislators urged to expunge ‘bad provisions’ in competition bill Business Mirror 7th Jun 2015
Senate and House bicameral conferees to the competition law were urged by the Department of Justice to delete bad provisions in the proposed measure to align it with global standards and international best practices.

PH is most improved in rule of law index Philippine Daily Inquirer 6th Jun 2015
he Philippines rose by nine notches to rank 51st among 102 countries in the Rule of Law Index 2015, which measures how the rule of law is experienced in practical, everyday situations by ordinary people around the world. Based on the latest study conducted by the nonprofit organization World Justice Project (WJP), the Philippines fared well in three of the eight categories by which the 102 countries were assessed. Results showed that the country ranked high in terms of constraints on government powers (39th); absence of corruption (47th), and open government (50th). The Philippines, however, fell to the bottom half of the global rankings in terms of regulatory enforcement (52nd); order and security (58th); criminal justice (66th); fundamental rights (67th), and civil justice (75th).

Aquino retains foreign investments limitations Rappler 6th Jun 2015
Nothing has changed in the new list of industries foreigners are not allowed to invest in, or industries where their investments are capped

Emerging Asia's white-collar workers cool on compliance Nikkei Asian Review 5th Jun 2015
Don't be surprised to see more corporate scandals emerging in Asia in the coming years. A new Nikkei Research survey shows that 66% of Indian white-collar workers, 53% of those in the Philippines and 41% in Indonesia believe their co-workers have "cozy ties with business partners [that could encourage] illicit behaviors such as bribery and inappropriate favors." In the U.S., the figure was 14%; it stood at 19% in the U.K. In both Singapore and China, the other two Asian nations surveyed, the figure was also higher than in the West, at 37%.

Winning the fight against smuggling Philippine Daily Inquirer 9th Jun 2015
The fight against smuggling is finally winning. The table below shows how smuggling has increased over the years. The comparable 2014 numbers will be available from the UN CommTrade Statistics in September. However, there is reason to believe 2014 is the start of a winning trend against smuggling. In 2005, the smuggling rate decreased by one fourth from 8 percent to 6 percent. This was largely because during that year, the Cabinet Oversight Committee Against Smuggling (Cocas) was created. It was chaired by former Interior and Local Government Secretary Angelo Reyes. Its members were representatives from four departments (Department of Finance, Department of Agriculture, Department of Trade and Industry, and Department of Justice), as well as private sector representatives from agriculture and industry (i.e., Alyansa Agrikultura and the Federation of Philippine Industries). The Cocas met every two weeks. It systematically reviewed Bureau of Customs anti-smuggling activities and responded decisively and quickly to private sector complaints and recommendations.

House seen to ratify revision of Cabotage law, pass fair competition measure today Business Mirror 9th Jun 2015
Two congressional bicameral committees have already approved the proposed amendments to the Cabotage law and proposed Philippine Fair Competition Act, which local and foreign business groups have supported. After the approval of the two measures at the bicameral committees, Speaker Feliciano Belmonte Jr., in an interview with reporters, said the measure amending the Cabotage law and Philippine Fair Competition Act will be ratified in the both chambers on Wednesday and will be transmitted to President Aquino for signature.

BoC reduces documentary requirements for PEZA firms Business World 5th Jun 2015
The Bureau of Customs (BoC) will no longer require locators registered with the Philippine Economic Zone Authority (PEZA) to submit additional requirements to secure accreditation, saying they have already undergone prior evaluation. “Considering that the documentary requirements and eligibility of locators have already been evaluated and passed upon by PEZA, which is the primary regulating agency and locators within its special economic zones, the Bureau of Customs (BoC) shall no longer impose additional documentary requirements for their accreditation with the BoC,” the agency said in Customs Memorandum Order no. 14-2015.

Philippines, Japan to hold naval drills The Philippine Star 9th Jun 2015
The Philippines and Japan will hold naval drills this month amid concerns over China’s aggressive expansion in the West Philippine Sea (South China Sea). Philippine Navy spokesman Col. Edgard Arevalo said the joint exercises would be conducted during the visit of a contingent of the Japan Maritime Self Defense Force (JMSDF) to the Philippines from June 22 to 26. “The Philippine Navy and Japan Maritime Self Defense Force are exploring areas of training and cooperation among them humanitarian assistance and disaster response, maritime search and rescue, and maritime situational awareness,” Arevalo said in a statement issued on Tuesday. “These confidence-building activities aim to foster camaraderie, nurture established friendship, and promote interoperability of the two navies,” he added.

PH exports fall in April, lowest in 2 years Rappler 10th Jun 2015
The Philippines failed to sustain its modest export rebound in March, as exports growth fell by 4.1% in April this year, the National Economic and Development Authority (NEDA) reported Wednesday, June 10. Exports rebounded in March to 2.1%, but the contraction in April marked the lowest since the 5.8% contraction in February 2013. From January to April 2015, exports fell by 1.2% ($18.62 million). The decline in exports, along with weak public spending, was one of the root problems of the gross domestic product growth slowdown last quarter.

Easing of foreign restrictions in more sectors pushed The Philippine Star 9th Jun 2015
The government will need to relax more sectors in the Foreign Investment Negative List (FINL) to attract investments and create competition, foreign business groups said. Henry Schumacher, vice president for external affairs of the European Chamber of Commerce of the Philippines said the government will have to relax foreign restrictions in more sectors to encourage firms to invest and allow consumers to have wider range of products and services to choose from, following the release of Executive Order 184 promulgating the 10th Regular FINL which identifies activities reserved to Filipinos. The new list released last week, replaces the 9th Regular FINL issued by President Aquino in October 2012.

Philippines' jobless rate eases in April ABS-CBN News 9th Jun 2015
The unemployment rate in the Philippines eased to 6.4 percent in April, the Philippine Statistics Authority said. This was lower than the 6.6 percent unemployment rate in January. In April 2014, the jobless rate was at 7 percent. There were 39.2 million employed in the Philippines as of April 2015, up from 38.7 million a year earlier using data adjusted to exclude the typhoon-devastated Leyte. The statistics agency said the labor force participation rate was estimated at 64.6 percent, down from 65.2 percent a year ago.

BSP may reduce interest rates after inflation eased to 1.6% Manila Standard Today 8th Jun 2015
The Monetary Board, the policy-making body of Bangko Sentral ng Pilipinas, may start reducing the policy interest rates in its next meeting this year, after inflation rate fell to a 20-year low of 1.6 percent in May, an economist of ING Bank Asia said Monday. “The data raised the likelihood of BSP policy rate cut, though we retain our forecast that it will remain on hold in 2015 [Bloomberg consensus on hold],” ING Bank Asia chief economist Tim Condon said in a report. Condon said supply-side factors led to slower inflation in May, including food, housing, utilities and transportation. “We think the annual increase in tuition fees in June will provide a read on whether the low headline inflation has reduced inflation expectations. We consider the regular but infrequent sequential increase a guide to inflation expectations.

Restrictions retained in 2015 ‘negative list’ Business World 7th Jun 2015
The Government has kept virtually unchanged its list of domestic activities and sectors restricted to foreign participation, prompting one business leader to cite anew the need to make the list “less negative”. Malacañang on Friday published Executive Order No. (EO) 184, dated May 29, that provides the 10th Regular Foreign Investment Negative List (FINL), keeping largely intact provisions of the preceding order: EO 98 of Oct. 29, 2012. The sole major change in this year’s list is retention of only pharmacy, radiologic and x-ray technology, criminology, forestry and law as professions from which foreigners are banned.

Gov’t relaxes foreign investment restrictions The Philippine Star 6th Jun 2015
President Aquino has approved a new list of economic activities and investment areas reserved to Filipinos and open to foreigners. Executive Order (EO) 184 published yesterday provides for the 10th regular Foreign Investment Negative List (FINL) which identifies economic activities open to Philippine businesses and sets limits in the participation of foreign firms. The new order replaces EO 98 or the 9th FINL issued in October 2012, to reflect changes pursuant to existing laws. The new FINL removes the foreign ownership restriction on lending firms, investment houses and financing companies, and trims the number of professions reserved only for Philippine nationals under List A.

PHL losing FDI to Vietnam sans reforms Business Mirror 5th Jun 2015
The European Chamber of Commerce of the Philippines (ECCP) fears that its efforts to attract investors into the country, especially those that are about to leave China for another production hub in the region, would just be put to waste if the needed tax-reform measures are not passed on time. ECCP President Michael Raeuber said that, if the needed reforms are not instituted on time, the Philippines would just continue losing investors to Vietnam.

House panel approves substitute bill amending Epira law Business Mirror 9th Jun 2015
The House Committee on Energy on Tuesday approved a substitute measure amending the Electric Power Industry Reform Act (Epira). Party-list Rep. Michael Angelo Rivera of 1-Care, presiding chairman of the energy committee during the panel hearing, said that the substitute bill, principally authored by House Committee on Energy Chairman and Liberal Party Rep. Reynaldo V. Umali of Oriental Mindoro, has been unanimously approved at the committee level. The committee report of the substitute bill or an act declaring power infrastructure projects as projects of national significance, amending for the purpose certain provisions of Republic Act (RA) 9136, or the Electric Power Reform Act of 2001, is now being prepared to be presented in the plenary for second reading in July or August.

DOE chief sees no high spike in power rates The Philippine Star 8th Jun 2015
Energy Secretary Carlos Jericho Petilla is optimistic that power players would behave better at the country’s electricity spot market to avoid a repeat of the December 2013 record high spike in electricity rates. The Energy Regulatory Commission’s (ERC) Investigating Unit (IU), meanwhile, recommended continuous review of other regulatory measures to permanently avoid bidding misbehavior in the market. “The IU recognizes that the Electric Industry and its WESM is dynamic. Technology, fuel resources, fuel types and other factors affect the bidding behavior of WESM members. As such, the WESM rules and other regulatory statues should be considered for review,” it said in a report on the December 2013 price hike released last week.

BSP to let peso weaken in value vs US dollar Philippine Daily Inquirer 10th Jun 2015
Monetary authorities will allow markets to chip away at the peso’s value amid heightened risk aversion among investors, who remain on edge due to uncertainty over global financing conditions. In line with the movement of other Asian currencies, the peso has fallen in recent weeks as the dollar rallies in anticipation of a rate increase by the US Federal Reserve. At the start of the week, the peso fell to a five-month low of 45.025-to-$1, reflecting investors’ growing preference for the dollar to the detriment of emerging-market asset classes. “Markets tend to have heightened volatility when new information comes or is released, especially when such relates to the Fed,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said.

The Philippines takes to banking without ATMs Gulf News 10th Jun 2015
As a schoolgirl in Manila, Vilma Fetesio would stand at the dock each month with her brother and other children, waiting for boatmen to bring them money from their parents on other islands. Sometimes, in rough weather, the boats didn’t come. “We waited at the port the whole afternoon, at times the whole day,” said Fetesio, now a teacher back on her native Culion island. “During the typhoon season when no boats sailed, some of us would go hungry.” Culion, a day’s journey across the South China Sea from the capital, once housed the world’s largest leper colony and was called “the land of no return”. It’s one of 604 municipalities in the Philippines that don’t have a bank, a deficit the monetary authority is trying to overcome by encouraging the adoption of mobile phone transactions.

Philippines: Appeals Court backs ruling to stop capital increases for insurers Asia Insurance Review 10th Jun 2015
The Philippine Court of Appeals has upheld the decision of a lower court to stop the government from implementing an order that requires insurance companies to increase their paid-up capital to PHP1 billion (US$22.2 million) by 2020. In a 10-page decision, the Appeals Court said that there is a need to examine the far-reaching implications of the proposed increase in the paid-up capital, especially in relation to the insurance firms’ capability to raise the amount, reported the Inquirer. The order for the capital increase was issued by the Department of Finance (DOF) and the Insurance Commission (IC) through a Department Order in 2012.

Philippine stocks decline to 5-month low Business Mirror 9th Jun 2015
Philippine stocks fell for a fourth day, sending the benchmark index to the lowest level since January, as capital outflows continue amid concern economic growth is weakening. The Philippine Stock Exchange Index fell 1.4 percent to 7,379.5 at 10:46 a.m. in Manila on Tuesday, bound for the lowest close since January 12. JG Summit Holdings Inc. and SM Prime Holdings Inc. led losses, declining at least 2.7 percent. International investors sold a net $11.8 million of shares on Monday, following six straight weekly outflows. “Investors are looking for something to hold onto, to overcome the first-quarter GDP disappointment,” said Justino Calaycay, an analyst at Manila-based Accord Capital Equities Corp. “A big part of investor confidence has been lost because of weak GDP, and a weakening peso is eroding gains of international investors with exposure to the Philippines, fueling further foreign selling.”

New leverage ratio rules credit positive – Moody’s The Philippine Star 5th Jun 2015
The newly-issued regulation on banks’ minimum leverage ratio is “credit positive” for the lenders, Moody’s Investors Service said in a report yesterday. “The higher minimum leverage ratio together with stricter Basel III minimum capital requirements established in 2014 is credit positive for Philippine banks because it would require them to hold more capital, making them more resistant to losses,” Alka Anbarasu, vice president and senior analyst at Moody’s said. “The stricter norms will also prevent excess credit and asset growth in the system and come as Philippine banks’ assets both on and off-balance sheet are growing at an annual rate of 15 percent or more,” the analyst added.

Soured bank loans only marginally higher in Q1 Business Mirror 5th Jun 2015
The country’s large lenders reported marginally higher soured loans ratios in the first three months averaging 1.96 percent of aggregate portfolio, indicating success in limiting the incidence of nonperforming loans (NPLs), the Bangko Sentral ng Pilipinas (BSP) said on Friday. The banks’ soured loans burden represent a small deterioration from defaulted loans of only 1.82 percent one quarter earlier, and comes at a time when demand for credit remains robust and by this token could have deteriorated further than it actually has. Still, the banks’ soured loans ratio proved significantly lower than the 2.16 percent reported in the first three months last year.

Agriculture key to PH rural dev’t, poverty alleviation Philippine Daily Inquirer 10th Jun 2015
Uplifting the country’s agricultural sector through industrialization and proper investments will yield significant results in rural development and poverty alleviation efforts. This is what business associations agreed upon during a conference on inclusive growth held at Edsa Shangri-La Hotel in Mandaluyong City on Wednesday. The conference, which was aimed at discussing how economic integration would help rural poor communities improve their quality of living, underscored the role of an efficient agricultural sector in reducing poverty incidence. In his keynote speech, Rolando Dy, executive director of University of Asia and the Pacific’s Center for Food and Agribusiness, cited low farm productivity as a major factor why majority of residents in rural areas were living below the poverty line.

PH gov't opens lower tariff scheme for rice importers in June Rappler 9th Jun 2015
The government is opening the minimum access volume (MAV) rice importation scheme to the private sector this month, enabling them to import rice into the country at a reduced tariff. The state grains procurement agency will publish this month the invitation to participate in the private sector importation under the MAV scheme that comprises an aggregate volume of 805,000 metric tons (MT), National Food Authority (NFA) bids and award committee chair Joseph de la Cruz said. “We will open it anytime this month and maybe the implementation would be July to October,” he said.

PLDT hikes capex to over P40 B The Philippine Star 10th Jun 2015
Dominant carrier Philippine Long Distance Telephone Co. (PLDT) is beefing up by at least P1 billion its capital expenditures budget for this year as it undertakes major changes needed to ensure the continued success of the PLDT Group in the emerging digital world. PLDT president and chief executive officer Napoleon Nazareno told reporters on the sidelines of the company’s annual stockholders’ meeting that they are spending P40 billion instead of P39 billion for its capital expenditures this year. “Our capex estimate was P39 billion, but it might exceed P40 billion this year,” Nazareno said.

DTI, NTC ink pact on consumer protection The Philippine Star 9th Jun 2015
The Department of Trade and Industry (DTI) and the National Telecommunications Commission (NTC) have entered into an agreement to strengthen consumer protection in the telecommunications industry. Trade Undersecretary Victorio Mario Dimagiba and NTC Commissioner Gamaliel Cordoba signed the Memorandum of Agreement (MOA) last month, the DTI announced yesterday. The MOA sets the delineation of responsibilities of the two agencies in terms of protection of consumers against deceptive and unfair practices involving the telecommunications industry. The DTI, as provided for in the Consumer Act of the Philippines, shall protect the interest of the consumer and implement measures to achieve protection against deceptive, unfair and unconscionable sales acts and practices.

DTI to conduct an E-Commerce Forum DTI Website 9th Jun 2015
The Department of Trade and Industry (DTI) will be holding an e-commerce forum today, 15 December 2014, to serve as a kickoff activity for the formulation of the first Philippine E-Commerce Roadmap. The growth of e-commerce has been remarkable, compelling many businesses worldwide to draw on the new marketplace which is known to be more convenient and efficient. The DTI, with its commitment to catalyze and facilitate growth, and enable Philippine industries, will bring together e-commerce practitioners, and other key stakeholders to discuss and benchmark the limitless growth of Philippine e-commerce.

Competition law to be ready before Congress adjourns Business World 7th Jun 2015
CONGRESS LEADERS maintained that the proposed fair competition law can be ironed out before they adjourn sessions on Thursday, even as lawmakers remain stuck on two of the bill’s provisions. The House of Representatives and Senate will meet again on Monday afternoon for a fourth bicameral conference committee meeting on the Fair Competition Act to agree upon two issues that remain unsettled: the provision on penalties, and the emerging role of the Justice department in policing business activities for possible monopolistic behavior of companies.The two chambers are working on passing the act, which, when signed into law, is seen to provide a “level playing field” for investors by creating the commission to police price fixing, restricting competition and trade, and controlling markets in the local economy.

MRT 3 maintenance contract price raised to P4.2 billion Business Mirror 10th Jun 2015
A number of failed auctions, plus the sorry state of the Metro Rail Transit (MRT) Line 3, have forced the transportation department to double the price of the train system’s maintenance contract to make the contract palatable to the taste of investors. Roman R. Buenafe, the train line’s general manager, said his group is currently finishing the terms of reference of the railway system’s three-year maintenance deal, which is now pegged at P4.2 billion. “We got stuck at the signaling, we had to get a consultant, plus we had to check on the end product of the consultant,” he explained.

3 Japanese consortiums eye Manila-Clark rail projects InterAksyon 10th Jun 2015
Three Japanese consortium are eyeing for the rail projects under the state-owned Bases Conversion and Development Authority (BCDA), its President and chief executive officer (CEO) Arnel Paciano D. Casanova said on Tuesday. On the sidelines of Clark Green City pre-bid conference in Taguig City, Casanova told reporters that the BCDA had talks with some big consortiums in Japan to invite them to bid for the rail system project connecting Tutuban in Manila and Clark in Central Luzon. Casanova joined President Benigno s. Aquino III during the latter’s state visit in Japan last week. “We had a very good discussion with some consortiums there,” he said.

Infra delay could affect growth – NEDA The Philippine Star 9th Jun 2015
Any delay in infrastructure and reconstruction can prevent the Philippine economy from hitting the growth target of seven to eight percent, the National Economic Development Authority (NEDA) said yesterday. In his presentation before the Joint Congressional Oversight Committee on Public Expenditures, Socioeconomic secretary Arsenio Balisacan said delays in the implementation of infrastructure and reconstruction projects is one of the major risks to growth. In the first quarter, the Philippine economy grew by 5.2 percent, its slowest growth rate in three years, due to the slower-than-programmed pace of public spending and weak export performance. Public construction declined by 24.6 percent while disbursements of the Department of Budget and Management in January dropped by five percent before recovering in the succeeding months.

LRT 2 aim to avoid ‘congestion trap’ Business Mirror 9th Jun 2015
The youngest overhead railway system in the Philippines has yet to achieve what its older siblings have already attained—that thing called congestion—but the government is now moving to improve its services with the line’s extension to Antipolo. Aside from that, the government is also planning to increase the capacity of the Light Rail Transit (LRT) Line 2 in the next couple of years in anticipation of the growing demand for connectivity around Metro Manila. Honorito D. Chaneco, the chief of the LRT Authority (LRTA), said this is the plan of the government, at least on the medium term, in order to help abate the growing traffic congestion in the capital and its nearby cities.

MPIC seeks European partner for airport bids The Philippine Star 8th Jun 2015
Infrastructure giant Metro Pacific Investments Corp. (MPIC) is in talks with a European company in its bid to land its first airport Public-Private Partnership (PPP) project. Manuel V. Pangilinan, MPIC chairman, told reporters that their prospective partner prefers to bid for the five regional airport projects worth P108.2 billion as a single bundle. “The single bundle is more the preference of the foreign strategic partners that we spoke with. If it’s two bundles, its quite small so they prefer a big bundle,” he added. Pangilinan said this European company is bigger than their partner in their failed bid for the P17.5-billion Mactan Cebu international airport expansion project bagged by the tandem of Bangalore-based GMR Infrastructure and Filipino-owned Megawide Construction Corp.

Manufacturing output slows sharply at start of second quarter InterAksyon 10th Jun 2015
Manufacturing activity grew at a sharply slower pace last April. In a report, the Philippine Statistics Authority (PSA) said the volume of production index (VoPI) rose 1.4 percent at the start of the second quarter, a steep fall from the 13.6 percent last March (see chart below). The steep fall in April factory output comes off a 5.9 percent growth in manufacturing in the first quarter of this year, propping up overall economic expansion. Responsible for manufacturing growth last April were the increases noted in 10 sectors namely: chemical products (46.2 percent), tobacco products (35.5 percent), furniture and fixtures (22.8 percent), basic metals (22.3 percent), textiles (17.8 percent), printing (14.7 percent), machinery except electrical (14.5 percent), paper and paper products (13.3 percent), leather products (11.7 percent), and beverages (10.2 percent).

Philippine unit of Toyota Motor to expand production capacity Reuters 9th Jun 2015
The Philippine unit of Japan's biggest automaker Toyota Motor Corp is planning to expand its local production capacity by as much as 20 percent in the next two years to take advantage of new government incentives. The Philippines last week launched a scheme that will provide incentives worth $600 million over six years to its tiny auto industry in a bid to raise shrinking output and catch up with regional rivals. Toyota Motor Philippines Corp, a joint venture with local conglomerate GT Capital Holdings Inc, is looking at increasing production capacity by 10 to 20 percent from the current 40,000 a year, said Alfred Ty, the automaker's vice chairman.

CARS Program rules seen out by mid-July Philippine Daily Inquirer 9th Jun 2015
The Department of Trade and Industry targets to issue by mid-July the implementing rules and regulations (IRR) that will govern the Comprehensive Automotive Resurgence Strategy (CARS) Program. The IRR will enable the government to roll out the incentives under the vehicle industry roadmap in early 2016. Trade Undersecretary Adrian S. Cristobal Jr. said the DTI was not expecting any problem in meeting the target for issuance of the IRR. “The target publication of the IRR is 45 days from the publication of (Executive Order No. 182). The budget for the program will be included in the General Appropriations Act for 2016,” said Cristobal, who also serves as the managing head of the Board of Investments.

PEZA, Japanese firms sign manufacturing deals Business World 5th Jun 2015
THE PHILIPPINES is expecting billions of pesos worth of new investments from Japan’s private sector over the next several years after the signing of agreements between the Philippine Economic Zone Authority (PEZA) and several Japanese companies. According to Malacañang, President Benigno S. C. Aquino III witnessed the signing of letters of intent between PEZA and several Japanese companies engaged in manufacturing office equipment, electronics, ships and medical devices.