| Regional Affairs
Philippines: Chinese Surveillance Ship Parks Near Contested Shoal Voice of America 11th Aug 2015
A Philippine legislator says he has information that a Chinese surveillance vessel “dropped anchor” more than a month ago in the vicinity of a hotly contested shoal in the South China Sea that the Philippines claims. Congressman Francisco Acedillo says his intelligence sources learned that the Chinese coast guard vessel was in waters “very near” a dilapidated, rusty old WWII ship, which is lodged onto Second Thomas Shoal. Fewer than a dozen Philippine soldiers are garrisoned at the grounded BRP Sierra Madre that since 1999 has served as an improvised outpost on the Philippine-claimed shoal.
National Affairs
House tries, fails to pass BBL Manila Standard Today 12th Aug 2015
Invoking a quorum despite the presence of only 15 lawmakers at the session hall, the House leadership attempted to resume the plenary debates on the controversial Bangsamoro Basic Law on Monday night but failed. “While we have a quorum, I would like to manifest that the sponsors of the BBL are more than ready to answer the interpellators, but not one interpellator is here,” said Cagayan de Oro Rep. Rufus Rodriguez, the principal sponsor of the BBL. He made the statement even as Senator Ferdinand Marcos Jr. on Tuesday said his substitute bill for the proposed Bangsamoro Basic Law was quite far from the House version taunted as “railroaded,” but he was ready to defend it during the bicameral conference meeting.
Senate passes bill seeking to improve Pinoy competency Business Mirror 6th Aug 2015
The Senate on Monday approved on third and final reading a bill seeking to improve the competence of Filipino professionals. Voting 15-0, the Senate approved Senate Bill 2581, also known as the “Continuing Professional Development Act of 2015,” requiring the professionals to take additional formal and nonformal learning before they can renew their professional identification cards and licenses. Sen. Antonio Trillanes IV, chairman of the Committee on Civil Service and Government Reorganization and sponsor of the bill, proposed to strengthen government efforts toward the continuing professional development (CPD) of all regulated professions in the country.
Defense & Security
AFP chief defends junking of missile plan Manila Standard Today 10th Aug 2015
Armed Forces chief of staff General Hernando Irriberi defended his decision not to acquire a shore-based missile system despite reports of unabated Chinese encroachment in the West Philippine Sea. Former National Security Adviser and now Paranaque City Rep. Roilo Golez had accused Irriberi of incompetence for electing to purchase Israeli-made helmets, armored vests, rifles and other similar equipment over a missile system. “I respect his opinion. As I said during my interview after my assumption, my record will speak for itself,” Irriberi said.
Philippines Navy gets capability upgrade with new sea assets Gulf News 10th Aug 2015
The navy commissioned two landing crafts donated by the Australian government and two multi-role helicopters on Monday in a ceremony that also marked the turn-over of the command of the Philippine Fleet. Outgoing Philippine Navy Flag Officer in Command Vice-Admiral Jesus Millan received the two ships which will join other similar vessels in the navy’s sealift command. The vessels, called Landing Craft Heavy (LCH) arrived in Sangley Point, Cavite on August 7. The addition of the two LCHs brings to 11 the total number of landing craft in the navy’s sealift command. Another LCH, a Mulgae Class vessel from South Korea, is expected to join the fleet soon aside from the bigger and brand new Strategic Sealift Vessel from Indonesia which is expected to enter service in 2016.
Terminated U.S. Helicopter Deal Spotlights Risks in Philippines The Wall Street Journal 7th Aug 2015
When Robert Rice Jr. clinched a deal to sell secondhand military helicopters to the Philippines, it seemed like a golden opportunity to tap a new and potentially lucrative market. Instead, the sale broke down, with Mr. Rice facing bribery accusations that he says are baseless and with the Philippine government terminating Mr. Rice’s $28 million contract part-way through, citing delivery headaches. As a result, he said, he has had to lay off workers in Sacramento, Calif. The controversy has become a major setback for Philippine defense officials, whose attempts to modernize the country’s nearly obsolete military were already floundering. Now defense officials in charge of procurement fear that potential suppliers will steer clear of the Philippines, the defense department said, deterred by Mr. Rice’s problems and by corruption concerns.
Economics
Philippine Central Bank: Peso Hit as Yuan Weakens, Will Intervene If Needed The Wall Street Journal 12th Aug 2015
The Philippine central bank said it isn’t overly concerned by the peso’s slide, as the currency fell Wednesday to a fresh five-year low against the U.S. dollar while other currencies softened after China’s devaluation of the yuan. Bangko Sentral ng Pilipinas Gov. Amando Tetangco said in a statement that while the central bank will continue to stick to its policy of allowing market forces to determine the peso exchange rate, it is ready to intervene in the spot currency market if needed. “The exchange rate almost always is the first to domestically reflect volatility in global markets. Hence, as is our policy, the BSP, while maintaining essentially a market-determined exchange rate, will be present in the market to rein in excessive volatility,” he said. The U.S. dollar, helped by the yuan devaluation, some corporate demand and the weakness of other Asian currencies, closed Wednesday at 46.26 pesos, its highest since mid-July 2010.
Exports decline in June as slump continues CNN Philippines 12th Aug 2015
Philippine exports have declined for a third straight month, according to figures from the Philippine Statistics Authority (PSA). Save for March 2015, exports have declined in all months since December last year. A report released by the government agency on Tuesday (August 11) revealed that export revenues totaled $5.28 billion in June, equivalent to a 3.3 percent slide from the $5.46 billion posted in the same month last year. The PSA said that the contraction was brought about by the decrease of six out of the top 10 major commodities for the month.
Five-month-high net FDI inflows ease year-to-date fall Business World 11th Aug 2015
Net foreign direct investments (FDI) reached their highest level for the year so far in May, but inflows remained lower than last year as companies’ reinvested earnings and foreign firms’ lending to local units dropped, the Bangko Sentral ng Pilipinas (BSP) said in a statement yesterday. FDIs -- a key source of jobs and business financing in the country -- posted a net inflow of $403 million that month, down 6.8% from $433 million the past year. Equity and investment fund shares totaled $212 million in May, 55.9% up from the $136 million recorded in 2014’s comparable month. Broken down, net equity capital placements reached $160 million, up 115% from the past year’s $75 million.
Govt keeping ‘ambitious’ growth target for 2015 — Balisacan Manila Standard Today 10th Aug 2015
The government is keeping the “ambitious” growth target this year, despite the disappointing 5.2-percent expansion in the first quarter, Economic Planning Secretary Arsenio Balisacan said Monday. Balisacan said the government should remain “ambitious” in meeting its growth target of 7 percent to 8 percent for 2015 and 2016. He said despite the lower-than-expected 5.2-percent gross domestic product growth in the first quarter, he remained optimistic the country would meet at least the lower end of the growth target.
2nd quarter growth seen still subdued Business World 9th Aug 2015
Economic growth likely stayed under 6% last quarter, weighed down by sluggish global demand and poor farm output in the face of a raging El Niño episode, a United States-based think tank said. In an Aug. 7 report, titled: “External Headwinds,” GlobalSource Partners economists Romeo L. Bernardo and Marie Christine Tang said second-quarter production data are not “very encouraging.” “PMIs (purchasing managers’ index) for manufacturing, trade and services, while staying above 50 in 2Q15, indicating continuing expansion, are 5-6% lower year on year. Less vigorous industrial production, linked to the slump in exports, is also seen in the slight drop in the VoPI (volume of production index),” read the report.
Increased risks seen affecting Philippine growth The Philippine Star 9th Aug 2015
New York-based think tank Global Source Partners slashed the country’s economic growth projections amid increasing foreign investor caution, more volatile global financial markets, and risks of a stronger El Niño weather disturbance. In its quarterly report on the Philippines, Global Source revised downwards its 2015 gross domestic product (GDP) growth forecast for the Philippines to 6.1 percent instead of the previous projection of 6.7 percent made in May. “External risks have increased since our last report. Our outlook, which sees GDP growth at 6.1 percent in 2015 and 6.5 percent in 2016, is one of guarded optimism,” the think tank said.
Gov’t tries to catch up with fiscal plan Business World 6th Aug 2015
The national government in June posted its biggest deficit in nearly three years as spending grew at its fastest pace in 12 months, but the uptick still kept the budget balance in surplus in the first six months of 2015, data from the Bureau of the Treasury showed.
PHL inflation falls further to 0.8% in July Business World 4th Aug 2015
INFLATION slowed for a fifth straight month in July, falling below the 1% mark for the first time in over two decades on the back of lower food, utility, and fuel costs, the Philippine Statistics Authority (PSA) reported this morning. The PSA said headline inflation slowed further to 0.8% in July from 1.2% in June and 4.9% from a year earlier. It was the first time since January 1994 for the Consumer Price Index to fall below 1%, according to available BSP data.
Energy
TSI’s 150-megawatt plant enters initial commercial operations Business World 11th Aug 2015
Therma South Inc.’s (TSI) first 150-megawatt (MW) unit is now supplying power to the Mindanao grid and will begin billing its customers this week, initially at less than half the contracted price. A report from TSI indicates that the company, a subsidiary of Aboitiz Power Corp. (AboitizPower), will start charging P2 per kilowatt hour (/kWh), lower than the P5.50/kWh stipulated in the contracts, while full commercial operations are set for September. TSI’s customers include about 20 cooperatives and sister firm Davao Light and Power Co. (Davao Light). Davao Light Executive Vice-President Arturo M. Milan told BusinessWorld that the first unit of TSI’s 300-MW plant has been maximized, “although there were times when its power output was fluctuating.”
EDC expands cooperation with NZ geothermal partner Business World 7th Aug 2015
Energy Development Corp. (EDC) has signed another agreement with New Zealand’s GNS Science to expand the coverage of their geothermal energy partnership. The two companies signed a memorandum of understanding that will allow them to work on geothermal studies across the Pacific region, according to a statement on Friday. Under the current deal, GNS Science has been providing technical support over the past three years for EDC’s geothermal ventures in the country and overseas. With a 1,130-megawatt portfolio, EDC is the largest geothermal energy Philippines.
Renewable-Energy sector to see more FDI sans 60-40 rule Business Mirror 3rd Aug 2015
Reworking the restrictions on foreign ownership should encourage investors to come and participate more in the renewable-energy (RE) projects of the Philippines, European Union (EU) Ambassador Guy Ledoux said. “That would be a good measure to further attract EU investments, including in renewable energy,” he said in an interview at the recently concluded bilateral meeting between the EU and the Philippines on energy. This was not the first time that the proposed easing of the 60:40 equity rule, which prevents foreign firms from owning more than 40 percent of business ventures in the country as prescribed by the Constitution, was raised.
Financial Services
BSP tightens guidelines on deposits, securities investments The Philippine Star 12th Aug 2015
The Bangko Sentral ng Pilipinas (BSP) has imposed stricter guidelines on the funds received from customers for securities investments and deposits to boost efforts in protecting the welfare of financial consumers. The BSP has directed banks to segregate the funds of customers received under a securities brokering arrangement from deposit taking activities. As such, a new account in the books of banks called “broker customer account” would have to be introduced by the banks. The “broker customer account” makes clear that funds recorded under this item are not to be classified as “deposits.” “They are transactional in nature because there is an instruction to use them to purchase securities,” the BSP said in a statement.
PDIC backs bills protecting bank clients The Philippine Star 12th Aug 2015
State-run Philippine Deposit Insurance Corp. (PDIC) is strongly pushing the enactment of proposed measures that would benefit depositing public affected by bank closures. PDIC said House Bill 4392 of Rep. Nelson Collantes and Senate Bill 2268 of Sen. Sergio Osmeña pushing for amendments to PDIC’s Charter would institutionalize much-needed reform measures in the field of deposit insurance, bank resolution and receivership, and liquidation of banks. The proposed changes would enable PDIC to effectively provide protection to the depositing public via more expeditious payment to depositors of their deposit insurance claims, safeguard the banking system from disruptions resulting from bank failures, and promote financial inclusion to the unbanked areas.
S&P cites risk to Philippine banks Business World 11th Aug 2015
Philippine banks’ profitability may continue to erode this year and next as trading gains will likely remain muted into 2016, credit watcher Standard & Poor’s Ratings Services said in a new report. The report, titled “ASEAN Banks Will Remain Resilient to Rising Risks,” noted that 2014 saw a decline in local banks’ profits due to an industry-wide slump in one-off trading gains as earnings from the sale of government securities to institutional investors decreased substantially. S&P said the slump in trading gains could continue to hurt the bottom line of Philippine banks this year and next. “We believe that the days of windfall profits for Philippine banks are over and that trading gains will remain muted this year and into 2016,” the report read.
Dooc tightens guidelines on insurer IMAs Business Mirror 11th Aug 2015
The Insurance Commission (IC) is imposing stricter regulations on investments made by insurance companies indirectly through the so-called investment-management agreements (IMAs) with fund managers. Under Circular Letter 2015-41-A, Insurance Commissioner Emmanuel F. Dooc is requiring prior approval by the IC before insurance companies may enter into IMAs with fund managers to invest their trust funds. The application for the IC’s approval of the IMA shall be accompanied by a board resolution authorizing the placements under IMA, a copy of the IMA, and audited financial statements of the investment or fund manager for the past three years.
SEC overhauls securities law’s implementing rules Philippine Daily Inquirer 10th Aug 2015
The Securities and Exchange Commission has overhauled the implementing framework for domestic securities regulation to give corporations more leeway in raising funds, plug regulatory loopholes and incorporate global best practices. The SEC en banc recently approved the 2015 Securities Regulation Code (SRC) which expands the shelf registration program and streamlines certain requirements on the public offering of debt or equity securities. The new implementing rules and regulations (IRR) also refine the tender offer requirements, oftentimes a contentious issue during corporate take-overs. The 2015 SEC rules also addresses regulatory gaps and boosted market and regulatory structures. The adoption of global best practices was also meant to ensure that the players would be able to meet the challenges posed by increasing market sophistication and regional integration.
Bad loans ratio eases to record low in June The Philippine Star 10th Aug 2015
Soured loans of major universal and commercial banks in the Philippines plunged to a record low in end June as financial institutions continued to tighten their lending standards, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend. The non-performing loans (NPLs) ratio of universal and commercial banks eased to 1.80 percent in June from 1.84 percent in May. This erased the previous record low of 1.82 percent recorded in November last year. NPLs are obligations that remain unpaid for at least 30 days after the due date. The NPL ratio pertain to the amount of bad loans over the total loan portfolio.
Another Asian bank could enter market Business World 9th Aug 2015
Another Asian bank could secure regulatory approval this week to set up shop in the country after rules on the entry of offshore lenders were liberalized last year, a senior Bangko Sentral ng Pilipinas (BSP) official said. “One more is under process now,” BSP Deputy Governor Nestor A. Espenilla, Jr. said in a text message on Thursday, adding that the Monetary Board could approve the bank’s application “maybe next week.” Mr. Espenilla, however, would not identify the prospective entrant, but noted that it is from Asia. The bank could be the sixth foreign lender to enter the country one year after Republic Act (RA) 10641, or An Act Allowing the Full Entry of Foreign Banks in the Philippines, was enacted in July last year.
E-commerce leaders to convene in Manila Business Mirror 4th Aug 2015
Running on September 2 and 3 at the SMX Convention Center and bringing together over 1,000 attendees, 60 expert speakers and 40 international and local exhibitors, Cards & Payments Philippines and the E-Commerce Show Philippines will be the premier meeting places for the entire payments and e-commerce ecosystems from across the country.
Higher five-year penetration rate traced to microinsurance Business Mirror 4th Aug 2015
The number of Filipinos having some form of risk cover, or insurance against contingent events, as a fraction of total population improved dramatically over a five-year period to 34.27 percent as of end-2014. Also called market penetration, this compares with only 14.08 percent in 2009, when the number of Filipinos with risk cover, also called market penetration, equaled 14.08 percent in 2009, the Insurance Commission (IC) said. Insurance Commissioner Emmanuel F. Dooc said that as of end-2014, some 34.23 million Filipinos have some form of insurance cover. The high penetration rate in the Philippines was traced to the high incidence of microinsurance cover in the country, which, according to estimates by the IC, is around 28 percent of the total population.
Food & Agriculture
PHL rice production may fall short of 2015 target Business Mirror 12th Aug 2015
The country’s palay production may reach 18.86 million metric tons (MMT) in 2015, 1.22 MMT short of the national target of 20.08 MMT, according to the latest report from the Philippine Statistics Authority (PSA). This year’s palay production may also be lower than 0.6 percent from last year’s output of 18.97 MMT. Based on the PSA report, the expected decrease in production could be attributed to unrealized planting intentions as a result of delayed and inadequate release of irrigation water, late onset of the rainy season and some areas left in-fallow. These were noted in Cagayan Valley, Western Visayas, Eastern Visayas, Central Luzon, Zamboanga Peninsula and Soccsksargen. This means all regions, except Bicol, are expected to experience the drop in production.
Government hikes budget for agriculture research by 18% Business Mirror 10th Aug 2015
The Department of Agriculture (DA) said on Monday that it is increasing its budget for agricultural research by 18 percent to P1.33 billion in 2016 from P1.12 billion this year. Agriculture Secretary Proceso J. Alcala announced the increase in the budget of the Bureau of Agricultural Research (BAR) during the opening ceremony of the three-day 11th Agriculture and Fisheries Technology Forum and Product Exhibition. The exhibit was part of the BAR’s 28th anniversary celebrations. Alcala said there is a need to match agricultural research and development (R&D) programs and projects with the actual needs of the agriculture sector, especially the small farmers and fishermen.
Health & Life Sciences
Inquiry on LGU hospitals pushed Manila Standard Today 8th Aug 2015
A House leader on Friday pushed for a congressional probe inquiry into the status of provincial hospitals, which were placed under the management of the Local Government Units (LGUs). In House Resolution 2030, Nueva Vizcaya Rep. Carlos Padilla said Congress should determine if the law devolving the public hospital to the LGUs has been effective. “Congress should conduct an oversight function to determine if the decision to devolve the health care system to local government units is the right decision,” Padilla said.
PhilHealth stops paying 2 hospitals over alleged pneumonia fraud PhilStar 5th Aug 2015
The Philippine Health Insurance Corp. (PhilHealth) has stopped paying two private hospitals, one in Northern Luzon and another in Mindanao, over an alleged pneumonia fraud. Minguita Padilla, head executive staff of the health secretary and chair of the Eye Bank Foundation of the Philippines, said that the freeze in payment came after PhilHealth learned that the hospitals were “suspiciously admitting” patients for an overnight stay even if they do not have health problems.
Filipinos can now get medical advice over the phone, thanks to telco Globe Tech in Asia 5th Aug 2015
Philippines’ telecommunications company Globe Telecom and Mexico’s largest telephone medical assistance firm Salud Interactiva have created a joint venture, KonsultaMD, which offers a health hotline service manned by licensed Filipino doctors. The hotline (+632) 79-880 is available 24/7 and provides basic medical assessment and advice, as well as prescriptions for over-the-counter drugs.
Health spending borne by households still high in 2013, well off DoH target Business World Online 4th Aug 2015
The Philippines’ total health expenditure (THE) grew steadily in 2013, with more than half of spending still borne by local households, the government reported yesterday. Data from the National Statistical Coordination Board (NSCB) showed that total spending for health care rose by 11.7% year on year to P526.3 billion in 2013.
ICT
Telecom firms oppose SIM card registration bill Philippine Daily Inquirer 12th Aug 2015
Which should take precedence—the people’s right to “telecommunicate” or their right to protection of their lives? That should be a no-brainer unless you’re talking of the right to use a cell phone freely—which Filipinos highly prize. Cell phone service providers on Tuesday maintained the subscriber identity module (SIM) card registration bill filed in the Senate would violate the people’s right to telecommunicate. Bill author Sen. Tito Sotto countered that the right to life should be given primacy, and this is what his proposal intends to protect. Other government agencies also professed support for Sotto’s bill, including the Department of Justice, National Telecommunications Commission, National Security Council, Philippine National Police, National Intelligence Coordinating Agency and Intelligence Service of the Armed Forces of the Philippines.
How the Philippines Became Tech Startups’ New Source for Talent Harvard Business Review 5th Aug 2015
Fifteen years ago, Fort Bonifacio in the Philippines was a former military base still dotted with barracks built in World War II. Thanks to an aggressive privatization and conversion program, Bonifacio Global City — as the base is known today — is a modern, bustling financial district lined with blocks of skyscrapers, shopping malls, and luxury condos. The Southeast Asia city’s rapid growth echoes the story of the so-called “unicorns” — technology start-ups that rapidly grew to a billion-dollar valuation and beyond. So far, 2015 has produced 30 unicorns. But as start-ups mature, the grow-at-all-cost narrative will be replaced by a flight to capital efficiency and profitability. In this next chapter, the Philippines — the world’s second-fastest growing economy — will play a crucial role in helping tech companies access the talent to scale efficiently and sustainably.
DTI holds regional forum on Phil e–commerce roadmap Baguio Midland Courier 3rd Aug 2015
The Department of Trade and Industry conducted a regional consultative meeting to gather inputs from various stakeholders to the Philippine e-commerce roadmap 2015-2020. Janette Toral from the DigitalFilipino.com, who presented the highlights of the Philippine e-commerce roadmap framework 2015-2020, said the roadmap aims to fulfill the mandate of Republic Act 8792 or the Philippine e-commerce Law.
Infrastructure
P200-b projects up for approval Manila Standard Today 10th Aug 2015
The National Economic and Development Authority board led by President Benigno Aquino III will review four major public-private-partnership projects worth over P200 billion within the next two weeks, Economic Planning Secretary Arsenio Balisacan said Monday. Balisacan told reporters the projects had been approved by the Neda Investment Coordination Committee, an inter-agency body that evaluates the fiscal, monetary and balance of payments implications of major national projects and recommends to the President the timetable of their implementation on a regular basis. “Some of these are for confirmation, rotation, but the real major ones are the four PPP projects,” Balisacan told reporters at the sidelines of the inter-agency Development Budget Coordination Committee meeting.
Japan offers $2 billion for shelved rail system Manila Standard Today 7th Aug 2015
Japan has pledged to the Philippines its biggest official development assistance package worth 240 billion yen (or $2 billion) for the construction of the shelved Northrail project that was once awarded to a Chinese state construction firm. Foreign Affairs Secretary Albert del Rosario said the Japanese ODA package is intended for Phase One of the North-South Commuter Rail which will replace the Northrail project that was scrapped over legal issues. The Northrail project was meant to build a rail line to Clark Air Base in Pampanga and was awarded to China National Machinery and Industry Corp. in 2003 for an initial $431 million, with China EximBank signing a loan agreement in 2004 to finance $400 million.
Measures that seek to ban mining in towns, provinces are not ‘national policy,’ Drilon says Business World 6th Aug 2015
MEASURES passed by the House of Representatives that seek to ban mining in certain towns and provinces remain as mere proposals, Senate President Franklin M. Drilon said, adding that it does not reflect the government’s stance towards mining. “All of these mining-free zone bills came from the House and it is the reflection of how the constituency of a particular Congressman will view mining. It is not a national policy,” Mr. Drilon told members of the Makati Business Club (MBC) yesterday. Mr. Drilon made this remark following an inquiry of a business leader as to why Congress is tackling measures declaring several provinces and towns as mining-free zones.
6 firms line up to bid for Kaliwa Dam project The Philippine Star 5th Aug 2015
The P18.72 billion New Centennial Water Source-Kaliwa Dam project (NCWS-KDP) of the Metropolitan Waterworks and Sewerage System (MWSS) has attracted six bidders, which include conglomerate San Miguel Corp., the Public-Private Partnership (PPP) Center announced yesterday. San Miguel Holdings Corp. and five other prospective bidders, namely Leighton Contractors, Abeinsa Infraestructuras (Abeima), Armando U. Khong Hun General Contractor, Datem Inc. and Pan Pacific Renewables Power Phils. Corp. bought prequalification documents for the project. The private partner for NCWS-KDP would be responsible for the designing, financing, and construction of the Kaliwa Dam and the raw water conveyance structure.
Manufacturing
Auto sales up 20% in 7 months The Philippine Star 12th Aug 2015
The local automotive industry shifted to a higher gear in the first seven months of the year behind strong sales of both passenger cars (PC) and commercial vehicles (CV) in July. In a joint report, the Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Truck Manufacturers Association (TMA) said vehicle sales in January to July increased 20 percent to 156,034 units from 129,687 units in the same period last year. In July alone, it reached a record 24,569 units, up 18.5 percent from 20,730 a year earlier and a two percent improvement from the previous month.
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