| Regional Affairs
In Victory for Philippines, Hague Court to Hear Dispute Over South China Sea New York Times 30th Oct 2015
The Philippines has won an important ruling in its case against China over disputed parts of the South China Sea, with an arbitration court in the Netherlands saying it has jurisdiction in the case and will hold hearings. The Permanent Court of Arbitration in The Hague issued the ruling on Thursday, in proceedings that China has boycotted since the Philippines, an ally of the United States, filed suit at the court in 2013. The ruling was a blow to China, which had hoped the court would reject jurisdiction, allowing Beijing to continue making a case that its claims in the South China Sea are based on history rather than legal precedent. The Philippines welcomed the decision on Friday and said it was prepared to argue the merits of its case before the tribunal. “Our people can be assured that those representing our country have been continuously preparing for this,” said Abigail Valte, a spokeswoman for the Philippine president, Benigno S. Aquino III.
U.S. patrols in South China Sea not a problem: Philippine president Reuters 27th Oct 2015
Philippine President Benigno Aquino on Tuesday (October 27) said U.S. Navy patrols in the disputed South China Sea are not a problem, and welcomed a balance of power in the region. The U.S. Navy sent a guided-missile destroyer close to China's man-made islands in the disputed South China Sea on Tuesday, drawing an angry rebuke from Beijing, which said it warned and followed the American vessel. China claims most of the South China Sea, through which more than $5 trillion of world trade passes every year. Vietnam, Malaysia, Brunei, the Philippines and Taiwan have rival claims. The Philippines' case for arbitration has been heard at The Hague. The patrol by the USS Lassen was the most significant U.S. challenge yet to 12-nautical-mile territorial limits China asserts around the islands in the Spratly archipelago and could ratchet up tensions in one of the world's busiest sea lanes. One U.S. defense official said the USS Lassen sailed within 12 nautical miles of Subi Reef.
National Affairs
Philippine court expected to decide U.S. security deal is constitutional: source Reuters 9th Nov 2015
The Philippine Supreme Court is expected to decide that a new U.S.-Philippine security agreement is constitutional and will announce its ruling before President Barack Obama visits Manila next week for an Asia-Pacific summit, a source said. The deal gives U.S. troops wide access to Philippine military bases and approval to build facilities to store fuel and equipment for maritime security, but it was effectively frozen after left-wing politicians and other opponents challenged its constitutionality last year. The expected ruling comes amid growing tension between the United States and China over Beijing's island-building in the disputed South China Sea. "I have seen the draft (ruling). The court will uphold its constitutionality, denying the petition to declare it unconstitutional," said a court source who declined to be identified.
Senate set to deliberate on PHL-US military accord Business World 8th Nov 2015
The Senate this week is scheduled to deliberate on the Enhanced Defense Cooperation Agreement (EDCA) between the Philippines and the United States, with 12 senators already supporting the proposal to conduct a hearing on the security accord. Senator Miriam Defensor-Santiago is scheduled to sponsor Senate Resolution No. 1414 in Monday afternoon’s plenary session, which will assert that any treaty or international agreement, including the EDCA, requires Senate concurrence. “By this resolution, the Senate merely takes a definitive stand on the non-negotiable power of the Senate to decide whether a treaty will be valid and effective, depending on Senate concurrence,” Ms. Santiago said in a released statement. The 70-year-old lawmaker said that the Senate was sidestepped on the signing of EDCA.
Gov't eyes quick fund disbursements during disasters The Philippine Star 5th Nov 2015
Learning from the experiences during Typhoon Yolanda, the government is studying how to fast track the procurement process to ensure state funds are disbursed swiftly in time of calamities, officials said on Thursday. “We are really looking at designing a procurement policy that is applicable in times of calamity, particularly in terms of relief operations because we do not have time to wait for usual procurement processes to take place,” Budget Secretary Florencio Abad told reporters in a briefing. The Aquino administration on Thursday reported on the progress of the rehabilitation and reconstruction of affected communities by Typhoon Yolanda. Dubbed by Abad as the “strongest typhoon to hit Earth,” Yolanda devastated southern Philippines in Nov. 8, 2013. While the government immediately mobilized funds for rehabilitation, Undersecretary Alexander Pama of the Office of Civil Defense (OCD) said state agencies were not able to access these funds because of strict procurement processes.
Drilon identifies priority bills for remaining plenary sessions Business World 5th Nov 2015
Senate President Franklin M. Drilon has outlined the legislative agenda of Congresss in its remaining 15 plenary sessions, with the 2016 national budget and the proposed law on the Bangsamoro Region leading the priority bills. Mr. Drilon has met with House Speaker Feliciano R. Belmonte, Jr. this month to identify the bills that both chambers of Congress will work on. “The number one priority is the budget. The House will transmit to the Senate the budget on November 9. The Committee on Finance of the Senate will sponsor it on November 11. Interpellations will immediately follow,” Senate President Franklin M. Drilon said in an interview on Thursday. On Oct. 9, the House of Representatives passed on third and final reading the proposed P3.002 trillion budget for 2016.
Belmonte seeks middle ground on income tax cut The Philippine Star 5th Nov 2015
Congressional leaders are trying to set an appointment with President Aquino to try to convince him to reconsider his position against a bill seeking to reduce individual income taxes. Speaker Feliciano Belmonte Jr. said he and Senate President Franklin Drilon have been trying to arrange a meeting with the President but there is no word yet from Malacañang. “We’re hoping that we can have some kind of a middle ground that what we’ll pass here (House of Representatives) is something that the Senate will approve and Malacañang too,” Belmonte told reporters. The House leader earlier said lawmakers fully understand Aquino’s opposition to the bill but that Congress can act on its own in approving the measure. He said there’s a good chance the bill, which seeks to adjust the 1997 individual income tax system to inflation, would be passed as the measure enjoys wide support from Congress and from individual taxpayers, who are reeling from the high cost of living.
Gov't eyes quick fund disbursements during disasters The Philippine Star 5th Nov 2015
Learning from the experiences during Typhoon Yolanda, the government is studying how to fast track the procurement process to ensure state funds are disbursed swiftly in time of calamities, officials said on Thursday. “We are really looking at designing a procurement policy that is applicable in times of calamity, particularly in terms of relief operations because we do not have time to wait for usual procurement processes to take place,” Budget Secretary Florencio Abad told reporters in a briefing. The Aquino administration on Thursday reported on the progress of the rehabilitation and reconstruction of affected communities by Typhoon Yolanda. Dubbed by Abad as the “strongest typhoon to hit Earth,” Yolanda devastated southern Philippines in Nov. 8, 2013. While the government immediately mobilized funds for rehabilitation, Undersecretary Alexander Pama of the Office of Civil Defense (OCD) said state agencies were not able to access these funds because of strict procurement processes.
Poe denies she’s quit presidential race Manila Standard Today 4th Nov 2015
Senator Grace Poe said Tuesday there was no truth to a report claiming she had withdrawn from the presidential race in 2016. Poe said she was told about an e-mail message being circulated saying she was no longer running for President. “That is not true. We are continuously working to convey our message to the people about what we can do to help our countrymen,” Poe said. She said it was hard to speculate who was behind the claim that she had withdrawn from the presidential race. “There can be several sources, and I’m thankful I was given the opportunity to say there is no truth to it,” Poe said.
TMAP, 21 groups back proposal adjusting income tax to inflation Business Mirror 4th Nov 2015
The Tax Management Association of the Philippines (TMAP) and 21 foreign business groups, professional organizations, and trade and labor groups on Wednesday asked the leadership of the House of Representatives to pass the measure adjusting the levels of taxable income to inflation as compromise to the proposal lowering income- and corporate-tax rates strongly opposed by the Palace. In a news conference at the House of Representatives, TMAP President Terence Conrad Bello said the proposal should be passed to increase the take-home pay of Filipino workers. “While compromise proposal involving only the updating of the tax brackets is not what TMAP and its coalition partners had in mind, TMAP believes that the compromise proposal will immediately alleviate somehow the plight of salaried individuals who are ‘overtaxed’ under the current system,” Bello said.
First airport laglag-bala complaint filed with NBI Rappler 3rd Nov 2015
The National Bureau of Investigation (NBI) has received a first complaint related to the alleged "laglag-bala" or bullet-planting scam targeting passengers at the Ninoy Aquino International Airport (NAIA). The scheme, which has angered the public and drawn international attention, allegedly involves airport personnel who plant bullets in the bags of unsuspecting passengers in order to frame them and extort money.
Business groups issue joint statement on BBL Business World 3rd Nov 2015
Congressional deliberations on the proposed law organizing an expanded Bangsamoro region resumes on Wednesday, on the heels of a joint statement by business groups urging the immediate passage of the draft Bangsamoro Basic Law (BBL). The statement e-mailed to the media yesterday was headlined, “The Philippine Business Community Supports the Swift Passage of an Acceptable and Meaningful Bangsamoro Basic Law.”
Seizing the moment: Preparing for Obama’s trip to Manila Rappler 2nd Nov 2015
For the first time in anyone’s memory, foreign policy and national security are poised to figure as major issues in the Philippine presidential election, scheduled for May 2016. Recent polls show Filipinos are worried about China and its aggressive stance in the South China Sea. They also fear that economic dependence on China could be leveraged to force concessions on the Philippines’ sovereignty. These are not unreasonable views, given that Chinese vessels now occupy Scarborough Shoal, just 140 miles from the Philippines’ northern Luzon Island, and that China’s nine-dash line nearly intersects with the Philippines’ Palawan Province. Filipinos are demanding that their leadership establish a credible defense posture for the country. Other polls suggest a very close race among three leading candidates to succeed President Benigno Aquino III, who is limited to only one term under the Philippine constitution. The leading candidates are Senator Grace Poe, Vice President Jejomar Binay, and former secretary of the interior Manuel “Mar” Roxas II. The winning candidate will need to convince voters that she or he is committed to defending Philippine sovereignty. That context is important for both Aquino and U.S. President Barack Obama, who are slated to meet in mid-November on the sidelines of the Asia Pacific Economic Cooperation (APEC) Leaders’ Meeting in Manila.
Congress faced with 26 priority legislation in remaining time Business World 1st Nov 2015
After a three-week break, Congress resumes sessions on Tuesday, with lawmakers set to continue tackling at least 26 pending priority bills as itemized by the Presidential Legislative Liaison Office -- including the 2016 national budget and the proposed Bangsamoro Basic Law (BBL). Among the other pending bills are the amendments to Republic Act No. 7718 or the Build-Operate-Transfer (BOT) Law; amendments to the BSP (Bangko Sentral ng Pilipinas) Charter; amendments to the Customs Modernization and Tariff Act (CMTA); and bills on Fiscal Incentives Rationalization and Rationalization of the Mining Fiscal Regime.
‘Noy’s stand vs income tax cuts not binding on Congress’ The Philippine Star 30th Oct 2015
While lawmakers fully understand President Aquino’s opposition to the bill seeking to lower individual income tax, Congress can act on its own in approving the measure, Speaker Feliciano Belmonte Jr. said yesterday. Belmonte said there’s a good chance the bill, which seeks to adjust the 1997 individual income tax to inflation, would be passed as the measure enjoys support in Congress and the public.
Gov’t races to award big-ticket PPP before polls Inquirer 29th Oct 2015
The government is unlikely to extend further the deadline for the auction of the P123-billion Laguna Lakeshore Expressway Dike project on fears it might not be awarded before President Aquino steps down in 2016. The Laguna Lakeshore Expressway Dike is one of the larger PPP deals on offer as it combines a 47-kilometer toll road, flood-control dike and a 700 hectare land reclamation project.The Department of Public Works and Highways (DPWH) already gave the three pre-qualified bidders, backed by Philippine conglomerates and foreign firms, more time to prepare their bids. The new bid submission date was moved to Jan. 7, 2016 from Nov. 6 this year.
House on income tax cut: We’re not giving up The Philippine Star 29th Oct 2015
They’re not picking a fight with President Aquino, but leaders of the House of Representatives are not giving up and will proceed with the process of approving a bill reducing individual income tax. Aquino, echoing the stand of finance and revenue officials, opposes the proposal, unless other measures are passed to offset the billions in revenue losses.
Road to Nowhere? Peace Efforts in the Southern Philippines The Diplomat 29th Oct 2015
The plight of the southern Philippines is a lesson in how not to undertake a peace process. It especially illuminates the pitfalls of negotiating without the wholehearted commitment of the stakeholders, especially the central government. Successive regimes in Manila have made feints at achieving a settlement in Mindanao, but the national leadership has been in turns half-hearted, dilatory and insincere. So the south remains in turmoil despite the best intentions and unflagging efforts of peace advocates. Whatever else, the so-called Mindanao problem has much to teach the international community about intractable warfare. Hard-won lessons in this southernmost and second largest island of the Philippines can undoubtedly contribute to understanding civil unrest and the challenges of peace-building in general.
Customs
Customs braces for another month of missed target Business World 8th Nov 2015
Customs collections likely remained off-target by more than a fourth last month, according to preliminary data the bureau released to journalists late last week. The Bureau of Customs (BoC) raked in about P31.8 billion in October, 26% short of a P43-billion target. Year-to-date, Customs collections stood at P299 billion. The bureau has been reeling from lower collections on oil imports, which contribute nearly a fifth to the bureau’s total take, as world oil prices that were halved from a year ago until September barely recovered in October. Twelve of 17 Customs port collectors in the country were unable to meet collection targets as of the third week of October, the bureau said in a statement, while adding that it expects some recovery in collections as Christmas nears. “We expect a significant increase... from the ongoing influx of shipments for the holidays,” the statement read.
BoC expects modernization bills passed into law by year’s end Business World 8th Nov 2015
The Bureau of Customs (BoC) is anticipating the passage of a measure allowing upgrades to its charter by the end of the year as the country gears towards regional economic integration. A new Customs Modernization and Tariff Act (CMTA) is pending before Congress which aims to upgrade Customs systems and automate transactions in a bid to better curb smuggling while fast-tracking import procedures. “The CMTA at the House has been approved on third reading. In the Senate, it’s drawing closer. I hope it can be finished, undergo a (bicameral conference), then be signed into law... I think it might be the President’s Christmas gift to us,” Customs Commissioner Alberto D. Lina told reporters last week in Filipino. “I think it will be smooth sailing.” “We really need that so that we can apply it in time for the ASEAN [Integration]. We have already committed so it’s a matter of complying.”
Customs sets more stringent import valuations to stem revenue decline The Philippine Star 8th Nov 2015
The Bureau of Customs will implement a rigorous valuation system for goods imported into the country to arrest the decline in its monthly collections. In a statement, the bureau said it was undertaking a stringent valuation method for certain imported products such as oil, rice and steel amid the continued downward trend in import prices globally. Low prices result into low valuations. The BOC has consistently missed its monthly collection targets this year. In September, the agency, which accounts for a fifth of state revenues, collected P32.65 billion, down 0.8 percent from last year’s P32.9 billion. It also fell more than a fifth its monthly goal of P41.11 billion. This brought total collections for January to September to P268.23 billion, up 0.9 percent year on year. The amount, however, was way below the bureau’s P314.17 billion target for the nine-month period.
Online payment system soon to be adopted in Manila port Business Mirror 7th Nov 2015
Companies or individuals who do business at the Manila International Container Terminal (MICT) can soon make all port-related payments online that aims to facilitate trade transactions. The MICT is preparing to implement the second phase of the ACTS Billing System, that allows customers to pay their port charges online. “This will soon give you an option to transact remotely and to no longer require coming to the port,” MICT told port users in an advisory. Launched in April, the billing system enhances the customer payment experience by cutting the procedure into five quick and easy steps. Self-service kiosks are provided at the billing lounge, where processors can now lodge in all shipment details and get their queuing numbers. Once number is up, they simply go to teller to pay and get their receipts and gate passes.
BOC complains over 2016 revenue target The Philippine Star 5th Nov 2015
Amid low oil prices, the Bureau of Customs sees next year’s nearly half a trillion-peso revenue collection target as “too high” and would ask the government to revise it downwards, the agency’s chief said. Customs commissioner Alberto Lina told reporters they would ask government economic managers to lower BOC’s P498.7-billion collection goal next year. The target is up 14.22 percent from this year’s goal. “It’s too high. I don’t know how much can we collect by end-December but normally, targets are set 20 to 25 percent of the actual collection from the previous year,” Lina said when asked how much reduction he would request. As of the third quarter, Customs, which accounts for a fifth of state revenues, has raised P268 billion, up 0.9 percent from the previous year. The year-to-date tally however fell short of the P314-billion target for the first nine months.
E-customs system helpful to businesses: survey VietnamPlus 3rd Nov 2015
The Japanese-supported e-customs system VNACCS/VCIS is highly accurate and helps businesses save time, manpower and expenses, as viewed by a majority of companies in a recent survey. Au Anh Tuan, Deputy Director of the General Department of Vietnam Customs’ Customs Control and Supervision Management Department, revealed the information at a meeting to garner businesses’ feedback on the system in Hanoi on November 3. The survey was conducted on about 500 companies operating in different industries like processing, manufacturing and logistics to learn about hindrances to the implementation of the Vietnam Automated Cargo and Port Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS), he said.
Customs chief eyes weighing of import cargo inside ports, truck registration with BOC Business Mirror 30th Oct 2015
Customs Commissioner Alberto D. Lina also wants cargoes to undergo x-ray right after they are unloaded from a vessel. Lina said he will soon issue a memo that requires terminal operators to weigh import containers within the port before their discharge. At the same time, he announced plans to require trucks to register with the Bureau of Custom come January 2016. During the Government and Private Sector Coordinating Conference on Port Area Traffic Management on October 14, Lina agreed with the suggestion of truckers to have import containers that are subject to weighing mandatorily weighed within the terminals, and not by the roadside.
Sept. customs collections down Manila Standard Today 29th Oct 2015
The Bureau of Customs said Thursday collection in September fell 0.8 percent to P32.65 billion from P32.91 billion year-on-year due to lower oil prices. The figure is also 21 percent short of the P41.1-billion target for the month. Total value of importation in September decreased 5.4 percent while volume grew 20.5 percent. Non-oil revenues climbed 11.3 percent to P26.59 billion while collections from petroleum products decreased 33 percent to P6 billion. Revenues in the nine-month period rose 0.9 percent to P268.23 billion, but were 14.6 percent, or P45.942 billion, short of the target of P314.171 billion. Non-oil collections from January to September increased 13.2 percent year-on-year to P218.85 billion. Both volume and imports rose 16 percent and 5.5 percent, respectively.
Defense & Security
Army has 4 new generals The Philippine Star 5th Nov 2015
The Army has four new generals after senior officers handling key posts were promoted. Those promoted to the position of brigadier general were Cols. Noel Clement, Harold Cabreros, Alvin Francis Javier and Ronnie Evangelista. Their promotion took effect on Nov. 2. Clement, a graduate of the Philippine Military Academy (PMA) Class ’85, is the chief of the Army’s 602nd Brigade. He was one of the officers tagged in the disappearance of activist Jonas Burgos eight years ago. Military officials said Clement’s promotion means he has been cleared of any liability in the Burgos case.
US nuclear submarine docks in Subic Bay Business Mirror 4th Nov 2015
USS Key West (SSN-722), a nuclear submarine of the US Navy, docked at the Alava Wharf here on Wednesday morning amid music from the brass band of an Olongapo City grade school. The visit, however, was not announced by the US Embassy in Manila, which regularly notifies the media about the arrival of American warships docking in this free port. Speculations here are rife that the vessel has been placed here on standby for the duration of the Asia-Pacific Economic Cooperation (Apec) leaders’ meeting in Manila, which will be attended by US President Barack Obama.
First Win Wins First Exports (MRAP) Defense Studies 5th Nov 2015
Chaiseri Metal and Rubber Company, the Thai developer and manufacturer of the First Win 4x4 mine resistant ambush protected (MRAP) vehicle, is accumulating its first overseas sales. Next year the Philippines will take delivery of a left-hand-drive version of the 11t First Win, with this unit to be dedicated to airport security usage at Clark Airport north of Manila, Chaiseri representative Daniel Ilagan told Shephard. This left-hand-drive vehicle was exhibited at Defence & Security 2015 in Bangkok, as was a version for the Malaysian Armed Forces (MAF). Although manufactured in Thailand by Chaiseri, the latter will wear a Deftech badge, with the Malaysian partner responsible for maintenance and support of the fleet.
PAF Looking for MD-520MG Powertrain Spare parts Defense Studies 5th Nov 2015
The Philippine Air Force (PAF) is now looking for bidders who can supply spare parts needed for the maintenance of the powertrain system of one of its McDonnell Douglas MD-520MG attack helicopters. Budget for the project is placed at Php26,362,776.88. Powertrain or powerplant describes the main components that generate power and deliver it to the air. Submission and opening of bids is scheduled for Nov. 13, 9 a.m. PAF Procurement Center Conference Room, Villamor Air Base, Pasay City. The PAF MD-520MG is armed with .50 caliber machine guns and seven-tube rocket pods and operates as a light attack aircraft.
Economics
Philippine economy thrives as young workers stay in the country Financial Times 8th Nov 2015
For the past 15 years, Voltaire Dela Santa has worked in call centres in the Philippines, serving customers from across the globe. Where many of his friends and relatives have opted to move to North America to find a good job, the 38-year-old’s preference has always been to remain at home with his wife and four children. “I can easily go overseas if I wanted to . . . but I have my family here,” says Mr Dela Santa, who is employed by a US outsourcing company. “There is still a chance to prosper” at home, he adds. The Philippine economy has traditionally been propped up by remittances from the country’s diaspora, many of whom are employed in menial jobs in the US, Middle East and other parts of Asia. The $24.3bn sent home by more than 10m overseas workers last year accounted for 8.5 per cent of the country’s gross domestic product, according to official data.
Joblessness steady; optimism on openings slips Business World 8th Nov 2015
Joblessness among adults steadied last quarter from the preceding three months, according to a recent Social Weather Stations (SWS) report that also showed optimism on job availability 12 months ahead slipped. The Third Quarter 2015 Social Weather Survey -- conducted on Sept. 2-5 using face-to-face interviews with 1,200 adults nationwide and with sampling error margins of ±3 points -- found the adult labor force participation rate at 69.4% (an estimated 42.4 million adults) which was 4.6 points below the 74.0% (an estimated 45.2 million adults) recorded in the June survey. Among the adult labor force, the September survey found joblessness at 23.7% (or an estimated 10.0 million adults), steady from June’s 23.2% (estimated 10.5 million adults) and the 22.9% recorded in September last year. It was also the highest reading for the year, so far. “Joblessness has been above 20.0% since November 2010, reaching as high as 34.4% in March 2012, except in March 2015 when it fell to 19.1%,” a summary of survey results read.
Chinese shift to consumption an opportunity for PHL -- UNESCAP Business World 5th Nov 2015
The Philippines could benefit from China’s ongoing shift to consumption from investment, even as local exports continue to hurt due to Beijing’s sluggish production, a United Nations (UN) report released yesterday said. “[T]he structural shift towards a consumption-based economy in China may increase opportunities for countries exporting final goods -- especially high-tech and branded consumer goods -- as the purchasing power of Chinese consumers gradually increases,” read the Asia-Pacific Trade and Investment Report 2015 published by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). “The countries that could benefit include Japan, Malaysia, the Philippines, the Republic of Korea, Singapore and Vietnam.”
As election nears, investors reassess the Philippines after Aquino Reuters 3rd Nov 2015
The Philippines' election is still six months away, but already investors are seeking reassurance that whoever replaces outgoing President Benigno Aquino will honour his clean and competent style of government. Aquino must step down next year, after reaching the end of the single six-year term permitted by the constitution, and 130 candidates have nominated to replace him, including one who claims to be an extraterrestrial ambassador. Aquino sees Manuel Roxas, until recently his secretary of interior, as the candidate most likely to sustain his legacy. Roxas is currently third in opinion polls. Second is current vice-president, Jejomar Binay, who is from a different political party to Aquino and faces corruption charges.
Economy seen to face headwinds Philippine Daily Inquirer 2nd Nov 2015
The Philippine economy is seen to face growth constraints and further currency pressures due to a more challenging global and macroeconomic backdrop in 2016, a presidential election year. American investment bank BofA Merrill Lynch trimmed its gross domestic product (GDP) growth forecast for the Philippines to 5.5 percent next year from an original forecast of 5.7 percent. The peso, on the other hand, is seen to depreciate to P48.80:$1 by end-2016 from P46.30:$1 by the end of this year. The local currency closed at 46.82 against the greenback on Friday. The new GDP forecast is at par with Merrill Lynch’s growth outlook for the Philippines this year. Its forecast of 5.5 percent for both 2015 and 2016 is below the respective market consensus growth of 5.7 and 5.9 percent. “The cut mainly reflects a softer export growth outlook, while the domestic economy remains underpinned by private consumption, fixed capital investments and government spending,” Merrill Lynch said in a research note dated Oct. 30.
World Bank recommends: Open up shipping, rice, telecommunications sectors The Philippine Star 30th Oct 2015
The World Bank is urging the country to open up its telecommunications, shipping, and rice industries to more competition locally and internationally to increase competitiveness and attract more foreign investments. Karl Kendrick Chua, senior country economist of the World Bank Philippine Office, said the three industries have the potential to create more jobs if only the country could improve the quality of their service and lower prices.
2014 ODA disbursements exceed $1 billion in 2014 Inquirer 29th Oct 2015
The government spent loans and grants obtained through official development assistance (ODA) more efficiently last year, allowing disbursements to more than double year-on-year and exceed the $1-billion level, the National Economic and Development and Authority (Neda) said. The bulk of disbursements from ODA last year came from program loans, which amounted to $1.28 billion or 73 percent of the total. However, the grants’ financial performance slid slightly to 50 percent last year from 52 percent in 2013. The report showed $1.6 billion had been disbursed out of the active grants amounting to $3.19 billion. By the end of 2014, the report also showed the Philippines’ ODA portfolio was comprised of 76 loans and 449 grants worth a total of $14.37 billion.
Energy
Renewables form bulk of new DOE-endorsed power projects The Philippine Star 9th Nov 2015
A total of 51 power projects have been granted certificates of endorsements (COE) by the Department of Energy (DOE) as of end-September this year, government data showed. The COE is a requirement for the issuance of Certificate of Compliance (COC) by the Energy Regulatory Commission (ERC), which is necessary before any generating company can start operating a power project. The DOE data showed there are 36 renewable energy (RE) projects cleared with COEs. Of these RE projects, there are 19 hydropower plants, nine solar farms, five biomass plants and three wind projects. Meanwhile, 15 developments are conventional power projects composed of nine diesel plants, four natural gas plants and two coal-fired plants.
Electricity distributors ordered to make generators bid for contracts Business World 4th Nov 2015
The Energy Regulatory Commission (ERC) said it is going forward with a scheme requiring power distributors to conduct a competitive bidding process among their electricity suppliers. In a statement yesterday, the ERC announced the passage of a resolution dated Oct. 20 ordering the implementation of the auction system after due study and consultation. ERC Chairman Jose Vicente B. Salazar was quoted in the statement as saying that the system is intended to enhance transparency in distributors’ purchases of electricity from power generators, with a view towards producing least-cost transactions.
ERC to start implementing policy on bidding of PSAs Business Mirror 4th Nov 2015
There is no stopping the Energy Regulatory Commission (ERC) from implementing the Department of Energy’s (DOE) Competitive Selection Process (CSP) scheme, a controversial power-industry reform policy meant to ensure supply is bought and passed on to consumers at the least possible cost. In a resolution dated October 20, but was made public 15 days later, ERC commissioners ruled that there would be a mandatory implementation of the CSP, which seeks to curb negotiated power-supply agreements (PSAs) between a distribution unit (DU) and a power producer. The resolution takes effect upon publication, which the ERC expects within the week. DOE Circular 2015-06-008 mandates all DUs and electric cooperatives (ECs) to bid out their power requirements.
Macquarie fund buys majority interest in Negros solar plant Business World 1st Nov 2015
The Philippine Investment Alliance for Infrastructure (PINAI) has acquired a majority stake in a solar power plant in Negros Occidental province, building up its investment in renewal energy in the country. With the acquisition of the 80-megawatt (MW) Negros Island Solar Power, Inc. (islaSol), infrastructure fund PINAI brings its solar assets in the Philippines to 125 MW. The deal comes after it acquired the 45-MW San Carlos Solar Energy, Inc. (Sacasol) also in the same province. In a statement, Bronzeoak Philippines said that it remains a shareholder and the operator of islaSol, a power plant that it developed. The project comprises two solar farms in Negros Occidental, with 32 MW located in La Carlota and 48 MW in Manapla. Both plants are under construction and are scheduled to be finished in early 2016. PINAI, which has $625 million for infrastructure investment, is managed by Macquarie Infrastructure and Real Assets (MIRA). It is a partnership among the Government Service Insurance System, Macquarie Group and Asian Development Bank.
60 new power plants built in P-Noy’s term, says Petilla The Philippine Star 31st Oct 2015
Private investors have built 60 power plants during the incumbency of President Aquino to address growing demand for electricity, former Energy Secretary Jericho Petilla said. “And the President will be inaugurating more plants before his term ends next year,” he said in a television interview. As energy secretary, Petilla said he said he tried to promote competition and level the field among industry players to bring down prices. However, he said some “big players” did not like what he was doing and tried to keep the cost of electricity high. He added that the law itself is one of the culprits behind high power prices. “It allows cross ownership of generation plants and distribution companies. If you have the same groups of people owning power plants and power distributors, how can you have real competition?” he asked.
United Holdings budgets P1.2-B for hydropower plant in Bukidnon The Philippine Star 30th Oct 2015
Local renewable energy firm United Holdings Power Corp. (UHPC) is earmarking P1.2 billion for the construction of an 8.4-megawatt (MW) hydropower project in Bukidnon to help augment power supply in Mindanao. In a briefing, UHPC president Dominic Sytin said the Upper Maladugao hydropower plant will be financed through 30 percent equity and 70 percent debt. He noted the project, which will be undertaken by wholly-owned unit UHPC Bukidnon Hydro Power I Corp., has reached financial closure with BDO Unibank Inc. Detailed engineering design was also completed by Meadowland Developers Inc. earlier this month, Sytin added.
Rules on power CSP deferred The Philippine Star 30th Oct 2015
The Department of Energy (DOE) and Energy Regulatory Commission (ERC) have jointly agreed to defer coming out with a decision on the rules for the controversial competitive selection process (CSP) until the first week of November. The DOE requested for a meeting with the power regulator before issuing the implementing guidelines for the CSP, ERC chairman Jose Vicente Salazar said in a text message to reporters. “We will defer any announcement on the Competitive Selection Process as we prepare for the meeting requested by the DOE Secretary next Wednesday,” he said.
Financial Services
Rules on financial products fortified Business World 3rd Nov 2015
Two weeks after deciding to tighten rules on banks’ treasury operations in a bid to minimize risks from these activities, the Bangko Sentral ng Pilipinas (BSP) approved new regulations aimed this time at preventing investors from transacting in financial products for which they are unsuited.
BSP expecting market volatility from interest rate corridor system Business World 3rd Nov 2015
MARKETS will likely see some volatility when the central bank shifts to a corridor approach in setting monetary policy, an official said, as investors are seen shifting their funds to term deposits that will be up for auction under a facility that will support the new regime.
Fed view stirs hope for mart ‘normalcy’ Business World 30th Oct 2015
Financial markets should take heart from the Federal Reserve’s latest signal as it held off anew on Wednesday raising interest rates for the first time in nearly a decade, the Bangko Sentral ng Pilipinas (BSP) said yesterday, even as the Philippine Stock Exchange (PSE) and the peso promptly succumbed to selling pressure as observers deciphered a possible tightening of US monetary policy in December.
Pira says no to cartelized motor insurance contract monopoly Business Mirror 9th Nov 2015
The Philippine Insurers and Reinsurers Association (Pira) opposes the move of the Land Transportation Office (LTO) to introduce a cartel that would monopolize the issuance of third-party liability insurance to motor vehicle owners. In an interview, Pira Chairman Michael Rellosa said insurance companies have voted overwhelmingly to take all possible legal measures to oppose the imposition of LTO’s Memorandum Circular (MC) 2015-1975. The circular creates an entity that would administer the issuance of compulsory third-party liability (CTPL) insurance to motor vehicle owners. Rellosa said 44 out of 55 Pira member-companies that attended the association’s special membership meeting voted to oppose the LTO’s order, and 40 of these companies expressed support for a legal action to stop the order.
Regulators tell rural banks to be vigilant at all times Business Mirror 9th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) said rural banks need to become better, be more competitive and take pains to ensure services are actually delivered as competition among second- and third-tier lenders heat up. “Banks have their own responses to competition. What’s important is that better banking service is being delivered. Competition is a positive thing for consumers,” Deputy BSP Governor Nestor A. Espenilla Jr. told the BusinessMirror. This developed in the wake of the BSP approval on the acquisition of One Network Bank, a rural bank with 105 branches and microbanking offices in the Mindanao and Panay areas, by BDO Unibank. Observers said the move was a game changer and should encourage greater competition among rural banks. Some claimed small rural bank depositors might transfer to One Network, it being a rural bank backed by the country’s largest lender.
BSP revives merger program for coop banks The Philippine Star 9th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) has revived a program to promote mergers and consolidations with, and acquisition of cooperative banks by “white knights” following the entry of foreign banks amid the integration among members of the Association of Southeast Asian Nations. BSP Deputy Governor Nestor Espenilla Jr. said state-run Philippine Deposit Insurance Corp. (PDIC) and Land Bank of the Philippines have mutually agreed to revive the Strengthening Program for Cooperative Banks (SPCB) Plus for one more year. The SPCB Plus aims to promote mergers and consolidations with, and acquisition of cooperative banks by stronger partner. The program would be revived until end September next year after expiring last Sept. 30. Espenilla said same terms and conditions of the existing program would still apply.
Retail banking income expected at P470B by 2020 The Philippine Star 8th Nov 2015
Philippine banks could see their retail revenues surge by 127 percent over the next five years amid the continued rise in banked population and higher per capita income, a think tank said. In a survey by The Asian Banker released Friday, it was revealed that the gross income of retail banking in the country would hit P470 billion by 2020 from the projected P207 billion this year. The industry is expected to grow at a steady pace with a compounded annual growth rate of 17.8 percent between 2015 and 2020 as the country’s banked population rises to 45 percent from 30 percent. Likewise, the country’s per capita income is seen to increase to $1,951 from $1,689.
Life insurers bullish on 2015 prospects Business World 5th Nov 2015
The Philippine life insurance industry expects 2015 to be another record year, with total premiums seen surpassing the previous year’s and 2013’s banner level. Philippine Life Insurance Association (PLIA) President Rizalina G. Mantaring, who is also Sun Life of Canada (Philippines), Inc. President and CEO, said yesterday that the current performance of the industry already surpassed total premiums earned in 2014. “It should be a record, we’re already at almost the level of last year as of the third quarter and you have one quarter to go, which is traditionally good for a lot of companies so, hopefully it would be a record year,” Ms. Mantaring said in interview at the sidelines of the latest insurance advocacy campaign launch of PLIA called LifeGoalsInASnapshot. “We’re very positive... hopefully we’ll end with a very good year. Very optimistic. We’re almost certain to beat 2014,” she added.
BSP chief sees need for more bank strengthening The Philippine Star 5th Nov 2015
The Bangko Sentral ng Piipinas (BSP) stressed the need for Philippine banks to shape up amid intense competition from the entry of foreign banks into the country and economic integration in the region. BSP Governor Amando Tetangco Jr. said banks operating in the country need to beef up and strengthen their operations to survive intense competition from regional banks. “In an increasingly integrated regional setup, there is wisdom for further beefing up, given current size of our banks and the system as a whole,” he said. Tetangco also cited the entry of more foreign banks into the Philippines after President Aquino signed RA 10641 in July last year amending the foreign banks law by removing the limit of foreign banks in the country.
OFWs save money in the bank, only few invest in insurance Business Mirror 4th Nov 2015
Most Filipinos working overseas save in the form of short-dated financial instruments and only a few invest in insurance and investment funds. Philam Life Chief Marketing Officer Jaime Jose M. Javier Jr. said a survey conducted by Philam Life showed most overseas Filipino workers (OFWs) know about such financial products as bank accounts, personal life insurance, preneed plans, nonlife insurance and investment portfolio. Of those who are aware, only 7 percent actually invest in insurance and bonds and the bulk of 97 percent place their savings in bank accounts. The survey also showed that investments in personal-life insurance accounted for only 4 percent; nonlife insurance, 2 percent; preneed plans, 1 percent; and investment portfolio, 0.4 percent.
BSP sees short-term volatility The Philippine Star 4th Nov 2015
The Bangko Sentral ng Pilipinas (BSP) expects short-term volatility ahead of the proposed changes in the framework for monetary operations designed to enhance the effectiveness of monetary policy in the second quarter of next year. BSP Deputy Governor Diwa Guinigundo said there could be some volatility due to the migration of funds from the special deposit account (SDA) facility to higher yielding term auction deposit facility under the interest rate corridor (IRC) system. “There will be some volatility but the difference of the interest rates between SDAs and term auction deposit facility will be minimal,” Guinigundo said. Guinigundo said the IRC system calls for the shift to the use of floor and ceiling rates for short-term financing to be determined through the auction of seven- and 28-day deposit maturities initially set at once a week.
Financial system posts ‘positive’ performance Business World 4th Nov 2015
The Philippine financial system expanded further in the first half of 2015 due to positive market sentiment that boosted bank incomes despite some structural changes here and abroad, data from the Bangko Sentral ng Pilipinas (BSP) showed. The Philippine banking sector -- which makes up 80.8% of the local financial system -- saw its assets grow by 9% to P11.2 trillion as of end-June as the firms saw double-digit growth in investment and loan portfolios, the central bank said. “Despite the moderation in credit allocation particularly with the real estate sector, the BSP remains proactive in its surveillance and use of macroprudential tools to mitigate the buildup of systemic risks,” the central bank said in a statement yesterday. “The Philippine financial system... remains in a position of strength in the first half of 2015 amid structural shifts in the global and domestic financial landscape,” the BSP said.
Loans to consumers surged 19% in H1 Philippine Daily Inquirer 3rd Nov 2015
Growth in loans by banks to consumers for increased credit card use, as well as the purchase of new homes and cars, rose by a fifth at the end of June, outpacing the expansion the industry’s total portfolio. This reflected local banks’ eagerness to get more cash in consumers’ hands—an area of the business promising fat yields despite heightened competition. Data from the Bangko Sentral ng Pilipinas (BSP) showed consumer loans rose by 19.29 percent at the end of the first half to a record high of P959.18 billion. Consumer loans were up 2.83 percent from March, sustaining the quarter-on-quarter growth since 2008. In contrast, outstanding loans of the country’s major banks rose by 14.5 percent at the end of June. “BSP monitors the level and quality of consumer and other bank loans to ensure banks’ adherence to high credit standards,” the regulator said.
ASEAN Region: PH is 3rd in E-Trade; Credit Card Use Slow Malaya 2nd Nov 2015
The Philippines has emerged among the top three markets in six Southeast Asian countries served by pioneering electronic commerce company Lazada, despite the challenges that hinder the adoption of e-commerce in the country. In an interview, Inanc Balci, chief executive officer of Lazada Philippines, said the company now has a commanding 80 percent market share in the e-commerce industry, excluding food and travel, just three years since it was launched in the country. Balci said the e-commerce landscape in the Philippines is faced with three major challenges: a low credit card and debit card penetration rate, trust issues of shoppers in online shopping and logistics problems. This is why e-commerce companies like Lazada have to device ways to address those concerns and allow this format of shopping to flourish. Compared to Singapore and Indonesia which have both attracted the big players in e-commerce, the Philippines still has a long way to go in e-commerce.
Regulatory OK sought for dollar bonds Business World 2nd Nov 2015
The government has taken a step further in its plan to offer dollar-denominated bonds by seeking regulatory approvals required for the exercise. National Treasurer Roberto V. Tan said yesterday that the government has sought the green light from the Bangko Sentral ng Pilipinas (BSP) and is talking with the US Securities and Exchange Commission (SEC) for shelf registration. “We have already submitted a request not only for any possible opportunity within the year, but also in preparation for an issuance even early next year if there’s an opening at that time,” Mr. Tan said. “[I]f nothing happened this year, then we will pursue that next year; that’s why the preparation we’re doing at this time is for us to be ready also for next year in case nothing happens this year,” he explained, adding that his office was also in talks with the US SEC.
Insurance firms’ 9-month premium income surges Business World 2nd Nov 2015
The insurance industry’s total premium income rose by almost 30% in the first nine months of the year, buoyed by the continued expansion of both life and non-life companies. The Insurance Commission (IC) in a statement said the industry’s total income from premiums for the January to September period jumped 29.75% to P172.40 billion from the P132.87 billion posted during the same period last year. Preliminary data based on quarterly reports submitted by the life and non-life companies to the insurance regulator also showed the industry’s total net income rose 65.8% to P20.41 billion in the first nine months of the year, from P12.31 billion a year ago. The IC attributed the strong profit growth to the increase in underwriting income and investment income. The insurance industry’s total assets for the period stood at P1.09 trillion in the first nine months of 2015, up by 10.10% or P0.99 trillion.
Liquidity, bank lending growth slow in September Business World 30th Oct 2015
Money supply and bank lending continued to grow last month, though at a slower pace, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Friday. Domestic liquidity or M3 -- the broadest measure of money circulating in an economy -- grew by 8.5% year-on-year in September to P7.8 trillion, though this pace was slower than the 9% expansion recorded the previous month. Month on month, M3 edged up by a nearly flat 0.1%. The central bank said money supply’s continued expansion was “due largely to sustained demand for credit.” Domestic claims grew 12.4% to P7.4 trillion last month, slower than August’s 13% increase. ”Credits to the private sector increased at a slightly slower pace relative to the previous month,” the central bank noted.
South Korean bank starts Philippine operations Business World 30th Oct 2015
Seoul-based Shinhan Bank has started operations in Manila this month after securing the green light from the Bangko Sentral ng Pilipinas (BSP). The central bank on Sept. 24 issued a Certificate of Authority to Operate to the Korean bank, according to Circular Letter 2015-066 that was signed by BSP Deputy Governor Nestor A. Espenilla, Jr. on Oct. 28 and subsequently uploaded on the BSP Web site. Shinhan Bank formally started its operations in the Philippines on Oct. 19, the circular noted. The Korean bank is among foreign financial institutions that have sought to enter the Philippines following the enactment of a law further liberalizing the entry of banks from abroad.
Food & Agriculture
El Niño threatens PHL banana exports Business Mirror 9th Nov 2015
El Niño could cause Philippine banana production to decline and make it more difficult for exporters to meet the demand of foreign buyers, the Pilipino Banana Growers and Exporters Association (PBGEA) said over the weekend. PBGEA Executive Director Stephen Antig said the prolonged dry spell has already resulted in the decline of outward shipments of fresh bananas in the first half of 2015 and a 40-percent decline in expected revenues. “Generally, the decline [in exports] is due to lower yield caused by El Niño, and pests and diseases. Aside from lower yield per hectare, the quality of the bananas was also affected by the prolonged dry spell. The demand for fresh bananas is still high, but we have insufficient supply to meet the preferences of the export market,” Antig told the BusinessMirror. He said Japan and Middle Eastern countries have a huge demand for Philippine bananas, but exporters are unable to supply their requirements.
Groups condemn additional rice imports Manila Standard Today 5th Nov 2015
Agricultural groups have condemned the announcement of National Economic and Development Authority director-general Arsenio Balisacan that the agency was proposing the importation of an additional 1 million metric tons of rice for the first quarter 2016. Samahang Industriya sa Agrikultura chairman and Abono Party-list chairman Rosendo So said they would instead prefer an increased budget for crop insurance to broaden the scope of the farmers whose crops were affected by natural calamities. The additional funds would also help in the irrigation of crop fields to sustain the production of rice farmers. “Instead of justifying the need for another round of rice importation bonanza that are only helping the rice industry of other countries, we appeal to the government to provide all possible incentives to help our rice farmers recover from Typhoon Lando,” So stated.
DA turns over P1.3 billion worth of projects to farmers Business Mirror 5th Nov 2015
The Department of Agriculture (DA) said on Thursday it has awarded P1.3 billion worth of agriculture projects and interventions to the local government units and farmers in Region 10 to boost farm mechanization and improve agriculture production in the region. Agriculture Secretary Proceso J. Alcala said the DA turned over more than P1.3 billion worth of farm machineries, equipment, projects, livestock and seeds to beneficiaries under the Agri-Pinoy Rice Program, livestock and High Value Crops Development Programs (HVCDP), the Philippine Rural Development Project and other special projects of the department.
BOI working on food industry roadmaps Manila Times 5th Nov 2015
The Board of Investments (BOI), the industry development and investment promotions arm of the Department of Trade and Industry (DTI), is set to complete the government’s industry roadmaps for carrageenan, processed shrimps, and dried mangoes—the processed food industry’s sub-sectors. The BOI is organizing the last leg of industry roadmap workshops for said sectors this November in Cebu and Davao.
Nearly P10B in rice wasted yearly–study Sun Star 4th Nov 2015
About P27 million worth of rice is wasted in the Philippines every day, a loss that, unless abated, will go up to nearly P10 billion in a year’s time. Citing a study by the Philippine Rice Research Institute (PRRI), Mary Agnes Militante, regional information officer of the National Food Authority (NFA) in Central Visayas, said that one person, on average, wastes two tablespoons of rice daily or some 3.3 kilograms in a year.
Insurers can now cover crops of small farmers Business Mirror 4th Nov 2015
In a bid to finally take Filipino farmers out of the debt spiral that they’re very susceptible to, the Insurance Commission has come up with a new framework that encourages the private sector to offer so-called micro-agri insurance products that will cover crops damaged by typhoons frequently plaguing the Philippines. The policies and guidelines for the agriculture microinsurance framework are provided for under the new Circular Letter 2015-53 issued by Insurance Commissioner Emmanuel F. Dooc, and allows private insurance companies to innovate, design and market products that are tailor-fitted to the needs of small farmers.
Prices of farm products seen stable Cebu Daily News 4th Nov 2015
The Department of Agriculture (DA) does not expect prices of agricultural products to increase because of the El Niño phenomenon, said Regional Director Angel Enriquez. “Our supply is still okay. At this point, harvest season is over and farmers are starting to plant. We are even looking forward to as early as next February to harvest,” she said.
Health & Life Sciences
DOH not yet ready for graphic warning on cigarette packs ABS CBN News 8th Nov 2015
Health advocates were dismayed over the failure of the Department of Health (DOH) to implement the printing of graphic health warnings on cigarette packs this month. The government is supposed to enforce this November Republic Act 10643 or the Graphic Health Warnings Law, which requires 50 percent of cigarette labels to display images of harmful effects of smoking. Amid the delay, the Health Department said it will fully implement the graphic health warning label as soon as the drafting of the implementing rules and regulations of the law is finished. The DOH said tobacco companies should not release cigarette packs without graphic health warning labels starting March 2016. The agency added that selling of cigarette packs without the required labels under the law will be prohibited by November next year.
PH sets national guidelines on child malnutrition Rappler 5th Nov 2015
The Department of Health (DOH) and Unicef launched the country’s first-ever national guidelines on the management of severe acute malnutrition (SAM) for children under 5 years old on November 5. The guidelines will be used by healthcare providers, the academe, non-governmental organizations, and policymakers alike. It will come in handy not only during disasters and emergencies, but also in recovery and development contexts, according to the DOH. It serves as a manual for healthcare workers and advocates, detailing the technical and operational management of SAM. It covers the roles of communities and health facilities; matters of financing, logistics, monitoring, reporting, and program implementation.
Graphic tobacco health warning law enforced today The Philippine Star 5th Nov 2015
Tobacco companies should comply with the law requiring graphic health warnings on cigarette packs, which will be enforced starting today, a group of cancer survivors said November 4. In a statement, New Vois Association of the Philippines (NVAP) president Emer Rojas said they expect tobacco manufacturers to abide by Republic Act 10643. “Starting today, all cigarette packs coming out of the cigarette factories should bear pictorial health warnings to show the harmful effects of smoking. This means that it is now illegal for tobacco companies to release products that do not have graphic health warnings,” Rojas said. Rojas said the law gives the tobacco industry one year from the date of publication of the templates to comply with the placement of picture warnings in cigarette packs. He said the Department of Health released 12 templates on Nov. 4, 2014.
Advocates push for comprehensive PH mental health law Rappler 29th Oct 2015
The Philippines is home to over 100 million Filipinos, yet there are only 690 psychiatrists and around 1,000 nurses working in psychiatric care. The country's psychiatrists on October 29, pushed for a comprehensive mental health law in the Philippines, one of the remaining countries in the world without such legislation. At the Mental Health Act Now forum on October 29, the Philippine Psychiatric Association (PPA) said that unlike some of its ASEAN neighbors, the Philippines has been stalling support for those with mental health needs.
ICT
Lenovo seeks more local vendors The Philippine Star 9th Nov 2015
Chinese tech giant Lenovo sees the Philippines as among its focus markets in Southeast Asia on the back of its steady growing economy fueled by consumer spending and the business process outsourcing (BPO) sector. With that, the global tech firm plans to strike more partnerships with local vendors as part of expanding its personal computer (PC) and mobile presence nationwide. Lenovo vice president and general manager for Southeast Asia Harry Yang said in an interview with The STAR the Philippines is a focus country in Southeast Asia given its stable economy. “The Philippines is one of our best markets because its economy is not affected much by currency fluctuations. Internally, the Philippines has the best performance in (our) consumer and commercial (business),” he said.
Information-tech services industry sees at least 20-percent growth this year Business Mirror 4th Nov 2015
The information-technology (IT) services industry, a subsector under the information technology and business- process outsourcing (IT-BPO) industry, is poised to notch at least a 20-percent growth this year on the back of continued growth of IT-BPO firms and an increase of local technology start-ups. Jonathan de Luzuriaga, president of the Philippine Software Industry Association (PSIA), also said he sees the subsector to increase its employees, from the current count of almost 88,000 full-time workers to breaching the 100,000 mark by the end of the year. “The growth for the IT services has been averaging 20 percent in the past years and this year, it’s already a given, and we’re actually trying to stretch that a little bit further this year,” Luzuriaga said in a chance interview, adding that the IT services subsector has been outpacing the entire IT-BPM growth.
Cyber threats and security Business Mirror 3rd Nov 2015
Just as economic integration continues to be a global trend that promotes borderless trade, the emergence of digitalization creates a virtual community with advantages and risks—speedy, transparent and spontaneous transactions resulting to higher growth trajectory on one hand, and a phenomenon of security nightmare due to online vulnerabilities and risks, such as phishing scams, data thefts, malwares and Trojan horses that can devastate large volumes of systems and data on the other hand.
Telstra to shake up Philippine market with USD1bn investment, reports say TeleGeography 30th Oct 2015
The Malaya Business Insight writes that Australian telco Telstra is expected to invest at least USD1 billion in the Philippines market via its mobile joint venture (JV) with beer and food conglomerate San Miguel Corp (SMC). As previously reported by TeleGeography’s CommsUpdate, in a September 2015 filing with the Australian Securities Exchange Telstra stated: ‘We note recent speculation concerning Telstra considering an investment in a wireless JV in the Philippines with San Miguel, and that financing is being sought in relation to that JV. We are in discussions in relation to these matters. However, no agreements have been reached in relation to these matters and there is no certainty that this will occur.’ Now, Telstra chief financial officer Warwich Bray has confirmed in a separate filing that the company has allocated USD1.5 billion for ‘new business and mergers and acquisition (M&A) this year’, with the amount including ‘investments in our capital programme and start up investments, such as the investment in the Philippines where we are to pursue that opportunity’. Further, on 29 October a report by Australian Business Review cited Telstra CEO Andy Penn as committing to the aforementioned investment plan, should it forge ahead with the proposed JV.
PLDT nine-month profit falls 9% Telecomasia 5th Nov 2015
The Philippines' PLDT has reported a 9% decline in net profit for the first nine months of the year to 25.3 billion pesos ($539.9 million) as a result of higher costs. The operator blamed unfavorable foreign exchange rates, the impact of expenses related to a headcount reduction program and higher financing costs for the decline. Excluding exceptional items, total net income declined 5% to 27.1 billion pesos. Consolidated revenue fell 1% to 122 billion pesos, with wireless revenue falling 3% to 83.23 billion pesos but fixed line revenues increasing 5% to 43.65 billion pesos. Excluding the ILD/NLD segments, consolidated revenue grew 2% year-on-year to 104.5 billion pesos. In the third quarter, total service revenues grew 1% both quarter-on-quarter and year-on-year, potentially marking the beginning of a turnaround.
Telstra to spend $1B for Philippines telco venture, slams incumbents over ‘lousy service’ Tech in Asia 29th Oct 2015
Australian telco Telstra will spend up to US$1 billion for a planned wireless joint venture with San Miguel Corporation in the Philippines, the company’s chief Andy Penn told investors today. That’s just Telstra’s share in the JV. Partner San Miguel, a conglomerate with diversified interests in the Philippines, will also put money in the business, along with some banks that will provide financing. “We are not expecting it to be more than US$1 billion. That would be essentially Telstra’s equity investment. We could own 40 percent of the venture, which would also have external financing as well,” Andy was quoted as saying by The Australian.
Infrastructure
BCDA shelves monorail plan Business World 8th Nov 2015
The Bases Conversion and Development Authority (BCDA) said it will no longer pursue a planned monorail that will connect Bonifacio Global City (BGC) to the Ninoy Aquino International Airport (NAIA) because it is too costly. “We have been doing feasibility study and we found out that it is really costly. It is not economically viable,” BCDA President and Chief Executive Arnel Paciano D. Casanova told reporters last week in Mabalacat, Pampanga. The planned monorail was supposed to run from the NAIA Terminal 3 to the Metro Rail Transit Line 3 Guadalupe station via the Bonifacio Global City. It is envisioned to link the Makati Central Business District and BGC to the airport to ease traffic between the two areas. “At that time, the cost is about P27 billion for the 20-kilometer monorail, but then it has become part of the expanded railway system by the DoTC (Department of Transportation and Communications). So we just decided to let the DoTC take that into consideration,” he explained.
Guidelines out for PPP in LGU water sanitation The Philippine Star 7th Nov 2015
The Public-Private Partnership (PPP) Center and the World Bank-Water and Sanitation Program (WB-WSP) have launched guidelines for local government units (LGUs) and water districts (WD) in pursuing PPPs for water and sanitation projects. The PPP Center said yesterday the so-called knowledge toolkits provide templates that would assist project proponents and implementing agencies in going through the PPP procurement process. The toolkits include a business case analysis, model terms of reference for water source assessment, feasibility studies and transaction advisory services, pre-qualification requirements and instruction to bidders, contract management checklist, and generic preferred risk allocation matrix for a water supply project. The development of the toolkits are aligned with the Memorandum of Understanding (MOU) signed between the PPP Center and WB-WSP in September enjoining the Local Water Utilities Authority (LWUA), National Water Resource Board (NWRB), Philippine Association of Water Districts (PAWD), and Department of Interior and Local Government (DILG) to harmonize their policies related to the public-private partnerships in the water sector.
Philippines still needs to cut costs in international trade Business World 4th Nov 2015
The most hard working, most efficient persons will not be able to produce all the goods and services that they need for themselves and their families. But there are always other people willing to produce these things or render these services in exchange for money, useful goods, and services. On the macro level, no country or economy can prosper quickly without trade. And that includes countries that incur frequent trade deficits (in which their imports exceed their exports). Imported machines, vehicles, and computers become inputs for several activities used for the production of goods and services in the domestic economy. Since trade is a very useful human endeavor, trade should be left as free as possible, with the least or minimum regulations and taxation by governments. The only traded goods that need heavy government regulations and inspections are guns, ammunition, bombs, poisonous substances, and other products harmful to public health and security. In the Association of Southeast Asian Nations (ASEAN), a handful of countries impose few trade regulations while the others, including the Philippines, impose more.
Marcos: why are foreign-assisted infra projects delayed? Manila Bulletin 31st Oct 2015
Senator. Ferdinand “Bongbong” R. Marcos Jr. has filed a resolution seeking a Senate inquiry into the reasons for the delay of multi-billion-peso infrastructure projects which could have already jumpstarted the country’s economy had they been completed on time. Marcos, a vice presidential contender and chairman of the Senate public works and local government committees, said he wanted the Senate to inquire into the status of foreign-assisted infrastructure projects in filing Senate Resolution No. 1627. These projects include the construction of foreign-assisted infrastructure projects like bridges, roads, irrigation systems, flood risk management, and other big ticket projects. Marcos said there are reports that a number of these foreign-assisted infrastructure projects have incurred delays in their completion and implementation due to technical and administrative problems.
5 PPP projects up for Aquino OK Philippine Daily Inquirer 30th Oct 2015
Five public-private partnership projects worth a total of P123.6 billion are scheduled for President Aquino’s approval next month as the PPP Center seeks to roll out at least seven more projects before the term of the current administration ends in mid-2016. On the sidelines of a forum organized by think tank Center for Scientific Research and Strategic Development Inc. (CSRSDI), PPP Center Executive Director Cosette V. Canilao told the Inquirer that a National Economic and Development Authority (Neda) Board meeting tentatively scheduled in the first week of November would tackle these projects. The said projects are the Ninoy Aquino International Airport (Naia) Development Project; North Luzon Expressway (NLEx)-South Luzon Expressway (SLEx) Connector Road; Batangas-Manila (BatMan) 1 Natural Gas Pipeline Project; Plaridel Bypass Toll Road; and Philippine Travel Center Complex Project. The Neda Board is chaired by the President. The P74.6-billion Naia project, to be implemented by the Department of Transportation and Communications and the Manila International Airport Authority, will “improve, upgrade and enhance the operational efficiencies of all existing terminals of the Naia covering both landside and airside (except air traffic services), to meet the International Civil Aviation Organization standards and develop the main gateway airport of the Philippines,” according to the PPP Center website.
Manufacturing
Marubeni to expand auto business in Philippines The Philippine Star 9th Nov 2015
Japanese conglomerate Marubeni Corp. intends to expand its automotive business in the Philippines through the creation of a wholly-owned unit in one of Southeast Asia’s fastest growing automotive market. In an interview, Marubeni’s automotive department general manager Atsushi Suzuki said the company is considering forming a new group in the Philippines that could bring in new vehicle brands to the local market. “We want to if there is a chance. Maybe (bring in more automotive brands) if it is available,” Suzuki said. Suzuki said the Japanese automotive market at present is shrinking, paving the way for Marubeni’s automotive group to look for new markets to expand.
Moody’s sees factory output growing 3.9% Manila Standard Today 30th Oct 2015
Factory production in September likely grew faster than the 3.7-percent expansion in August, Moody’s Analytics, a division of Moody’s Corp., said Friday. Moody’s said in a report it expected manufacturing in September to post a growth of 3.9 percent, higher than the 3.2-percent increase registered a year ago. The government is set to release the September manufacturing data on Nov. 6. “The Philippines’ industrial production likely improved in September from August’s 3.7 percent year-on-year gain, thanks to a lower base effect,” Moody’s said. The growth in manufacturing decelerated sharply in volume and value in September 2014, from double-digit rates a year earlier, as more than half of the 20 major sectors posted declines.
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