| Regional Affairs
Duterte reports: Malaysia-PHL reaffirm cooperation for a ‘stronger’ ASEAN BusinessWorld 11th Nov 2016
President Rodrigo R. Duterte, returning from his trip to Malaysia on Friday early morning, reported that talks on joint security efforts and trade opportunities highlighted his visit, with the two countries reaffirming cooperation as neighbors in the ASEAN region. “My visit to Malaysia showed that there are more areas of mutual interest that will bring our countries closer together and make us work for the achievement of common goals,” Mr. Duterte said in a prepared speech delivered at the Davao International Airport. As incoming chair of the Association of Southeast Asian Nations (ASEAN), Mr. Duterte said he conveyed the message that “we count on Malaysia’s support for our efforts to be a stronger, rule-based and people-centered ASEAN.” The President cited that Malaysia and the Philippines already made “headway” with the signing of the framework of the trilateral arrangement with Indonesia on immediate measures to address maritime security issues. Commitment was reiterated to stop criminal activities in the joint waters, particularly kidnapping, and arrest the perpetrators. Mr. Duterte also said Malaysia vowed to sustain assistance in the peace efforts in conflict areas of the Philippine’s south. On trade opportunities, Mr. Duterte said Malaysian investors expressed interest in ventures on infrastructure, mass transportation, agri-business, Halal products, and setting up high value post-harvest chain facilities. “My message to business leaders is clear: the Philippines is open for business and we will provide an environment that is conducive for industries to thrive,” he said.
Duterte: PHL shift toward China will continue after Trump victory | BusinessMirror Business Mirror 11th Nov 2016
President Duterte declared on Friday he would continue to shift the Philippines toward China, despite Donald Trump’s victory in the US presidential election. At an early-morning briefing in Davao, Duterte said that, while the US would remain a friend and ally, the Philippines’s foreign policy was now geared toward China and the Asean. “I will pursue what I’ve started,” Duterte said following his return from a state visit to Malaysia. “My partnership with China and the rest of Asean will remain. I am not in the habit of reneging on my word.” Duterte called himself “just a small molecule in the planet” compared with Trump. “He is now president of the most powerful country in the world,” Duterte said. “What we share in common is the passion to serve.” In a state visit to China last month, Duterte announced a formal “separation” from the US and said he wanted to pivot to China and Russia—widening a split with his nation’s biggest security ally. Since being sworn in as president in June, Duterte has vowed to end joint military exercises with the US, called for American soldiers to leave the southern island of Mindanao, and told President Barack Obama to “go to hell.” Even so, with the two countries still bound by several agreements, including a mutual defense treaty, Duterte said the Philippines would “maintain our cooperation” with the US. In a news statement on Wednesday, Duterte said he looked forward to enhancing Philippines-US relations under a future Trump administration, adding that they were “anchored on mutual respect, mutual benefit and shared commitment to democratic ideals and the rule of law.”
Duterte pivot to China saves PH from Trump’s ‘troubled’ US – NEDA chief Inquirer 9th Nov 2016
Donald Trump will be US president? No problem, if you ask the country’s chief economist, who on Wednesday said President Duterte’s pivot to China would save the Philippines from relying on a country “in trouble.” Foreign businessmen, however, are worried about Trump’s protectionist tendencies, which may impact on the country’s business process outsourcing (BPO) sector. Asked on the sidelines of the Philippines Development Forum how a Trump win would impact on the Philippine economy, Socioeconomic Planning Secretary Ernesto M. Pernia said “we have a safety net which was foreseen by the President.” “He foresaw—he’s [President Duterte] a clairvoyant—there’s this likelihood of Trump becoming US president. So he decided to pivot to China instead of depending on the US,” said Pernia, also the head of the state planning agency National Economic and Development Authority. Pernia nonetheless noted that the US economy has remained largely private sector-driven despite some government influence. “I don’t think Trump can compel where private investments should go. That’s the decision of the businesses, not the government, unless there’s a way of penalizing them for investing abroad,” the NEDA chief said.
'Long live Trump': Philippines' Duterte says wants no more quarrels with U.S. Reuters 9th Nov 2016
Philippine President Rodrigo Duterte congratulated Donald Trump on his election win and said on Wednesday he now wished to stop quarrelling with ally the United States, recalling his anger at the Obama administration for criticizing him. The maverick leader, dubbed "Trump of the East" for his unrestrained rants and occasional lewd remarks, has repeatedly hit out at Washington in recent months, threatening to cut defense pacts and end military joint drills. "I would like to congratulate Mr. Donald Trump. Long live," Duterte said in a speech to the Filipino community during a visit to Malaysia. "We are both making curses. Even with trivial matters we curse. I was supposed to stop because Trump is there. I don't want to quarrel anymore, because Trump has won." Duterte won a May election by a huge margin and is often compared to Trump, having himself been the alternative candidate from outside of national politics. He campaigned on a populist, anti-establishment platform and struck a chord among ordinary Filipinos with his promises to fix what he called a broken country. But the biggest surprise of Duterte's presidency so far has been his hostility towards the United States, shown during near-daily eruptions of anger over its concerns about human rights abuses during his deadly war on drugs. He has also threatened repeatedly to severe a military relationship that has been a key element of Washington's "pivot" to Asia.
Trump business partner in Philippines named special envoy to US PhilStar 8th Nov 2016
US presidential candidate Donald Trump’s business partner in the Philippines has been named as another special envoy to the United States. Businessman Jose E.B. Antonio is the founder of Century Properties Group Inc. (CPGI), the company behind Trump Tower Manila. The residential skyscraper inside Century City in Makati is licensed under the Trump brand, which is owned by the real estate mogul. Century City Development Corp., a unit of CPGI, holds the license to develop the tower.
Paynor’s ambassadorial assignment to the US on hold Malaya Business Insight 4th Nov 2016
President Duterte has decided that his choice to be ambassador to the United States, Marciano “Jun” Paynor will not go to the United States this year. It has nothing to do with the uncertain state of PH-US relations. Duterte feels that Paynor is needed here for the preparations for the Philippine hosting of the 2017 Asean (Association of Southeast Asian Nations) meeting. There will be two summits, one for the 10 ASEAN leaders that will be held mid- 2017 and what is called ASEAN plus –plus meeting involving leaders of other dialogue countries namely Australia, China, Japan, India, New Zealand, Russia, South Korea, and United States. That explains why Duterte has not submitted Paynor’s name to the Commission on Appointments for confirmation, a Constitutional process in ambassadorial assignments. Duterte, meanwhile, has appointed Jose Manuel “Babes” Romualdez as special envoy to the United States.
Duterte wants stronger ties with Asean, not TPP philstar.com 3rd Nov 2016
President Duterte called yesterday for stronger ties with members of the Association of Southeast Asian Nations (ASEAN) rather than with the Trans-Pacific Partnership (TPP) being pushed by US President Barack Obama. Duterte underscored the importance of bolstering relations among ASEAN members, as he led the ceremonial sendoff in Sual, Pangasinan yesterday for 17 Vietnamese fishermen, who were caught poaching in Philippine waters in early September. In his speech, Duterte enjoined Vietnam and all other ASEAN members to bond together to be stronger in the region. Duterte, who has declared his intent to craft a foreign policy with less dependence on the United States, hit the rich western nations anew for what he sees as their efforts to control trade in both sides of the world. “You know, the EU (European Union) would want the best for them. Sometimes, they intrude into our part, and then America wants to control both sides of the Atlantic and the Pacific. They want the Pan-Pacific partnership,” Duterte said. He was apparently referring to international trade group TPP, which now has 12 members: US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.
Korean-born Sung Kim sworn in as US envoy to the Philippines Inquirer 3rd Nov 2016
Korean-American Sung Y. Kim was sworn in Thursday as the new ambassador of the United States to the Philippines. Kim, former special representative of the United States for North Korea Policy, was nominated by President Barack Obama on May 2016 and confirmed in September. He replaces Philip Goldberg, who has been the subject of repetitive personal attacks from President Rodrigo Duterte. State Secretary John Kerry administered the oath of office to Kim in a ceremony in Washington, D.C. Kerry has maintained that the relationship between the Philippines and the US remains “ironclad” despite President Duterte’s anti-US sentiments. Kim’s assignment to Manila comes weeks after President Duterte announced in China the Philippines’ split from the US. Kim, a career member of the US foreign service, served as the US ambassador to the Republic of Korea from 2011 to 2014 and as special envoy, with rank of ambassador, for the Six-Party Talks from 2008 to 2011. Previously, he was the Political-Military Unit chief at the US Embassy in Seoul from 2002 to 2006, according to a White House news release. From 1999 to 2002, he served as a political officer in Tokyo. His other overseas assignments included Kuala Lumpur and Hong Kong. In Washington, DC, Kim worked in the Office of Chinese Affairs and served as staff assistant in the Bureau of East Asian and Pacific Affairs, where he rose to become deputy assistant secretary. Before joining joining the foreign service, he worked as a public prosecutor in the Los Angeles District Attorney’s office. Kim was born in Seoul, South Korea, in 1960, the son of a South Korean diplomat. In 1973, he and his family moved to Los Angeles, where he grew up. A graduate of University of Pennsylvania, Kim took his juris doctor degree at the Loyola University Law School. He earned a master of laws degree from the London School of Economics and Political Science.
BusinessWorld | Beijing may be heeding S. China Sea ruling -- US Business World 2nd Nov 2016
PRESIDENT Rodrigo R. Duterte may have gotten Beijing to do exactly what it said it wouldn’t: abide -- even if only in part -- by the July “award” in an arbitral case that struck down the basis for China’s claim to much of the South China Sea and affirmed the Philippines’ sole right to exploit resources in the area covered by its exclusive economic zone (EEZ), a senior US State department official said. “[I]ndeed there are some signs... with regard to Scarborough, China may be acting in accordance with the arbitration decision. That would be a very positive development,” Deputy Secretary of State Antony J. Blinken said in an Oct. 29 media roundtable in Beijing, the transcript of which was posted on the department’s Web site.
FVR quits as special envoy philstar.com 2nd Nov 2016
Saying his job of breaking the ice with Beijing was done, former president Fidel Ramos announced yesterday his resignation as special envoy to China. Ramos, whom President Duterte had credited for persuading him to seek the nation’s highest post, did not say exactly when he officially tendered his resignation. Ramos’ announcement came amid his scathing criticisms of the President’s pronouncements and priorities, including the bloody war on drugs, the “separation” from the United States as well as Duterte’s refusal to have the Paris Agreement on climate change ratified. Since assuming office on June 30, Duterte had repeatedly thanked the 88-year-old Ramos for convincing him to run for president, and subsequently appointed him as special envoy to China. Ramos informally met with his contacts in the Chinese government in Hong Kong and in Manila on separate occasions a few months ago, but no details were bared to the public. When asked about his recent stinging criticisms of Duterte, Ramos said he must be considered “an older brother of the big, big, big Filipino family because of my long service in government, my numerous years of life and also call it humble experience in government service.”
Visas for Americans, Speaker echoes Inquirer 2nd Nov 2016
House Speaker Pantaleon Alvarez is backing President Rodrigo Duterte’s proposal to require Americans visiting the Philippines to get visas, saying there should be reciprocity between the two countries. Alvarez said he wondered why the Philippines allows Americans to freely come to the country while Filipinos have to line up in the wee hours of the morning just to secure a US visa. “If they’re not willing to grant us the same privilege, we might as well also require their citizens coming to our country to apply for a visa,” Alvarez told reporters in Tokyo, where he joined Mr. Duterte who was on a three-day official visit to Japan. Alvarez said, however, it was up to the executive branch to impose visa requirements on foreign visitors. Alvarez played down the possible tourism revenue losses if the Philippines’ required visas for Americans. He said the bulk of tourists visiting the Philippines came from Korea, China and Japan. Tourist arrival statistics show the United States as the second top source of foreign visitors to the country, behind South Korea and ahead of China and Japan.
National Affairs
Nur rejects joint MNLF-MILF panel for peace negotiations Manila Bulletin News 10th Nov 2016
The prospect of the Moro National Liberation Front (MNLF) and its rival group Moro Islamic Liberation Front (MILF) sitting on the same side in peace negotiations with the government has been shot down by MNLF founding chairman Nur Misuari. He insists on separate MNLF talks with the government, President Duterte told reporters before flying to Thailand and Malaysia Wednesday. Duterte said Misuari told him he prefers a one-on-one arrangement for the MNLF. Misuari had come out of hiding after a court suspended an arrest warrant against him in connection with the 2013 Zamboanga siege. The former Autonomous Region in Muslim Mindanao governor pledged support to the peace process in Mindanao after meeting with Duterte in Malacañang last week. A committee that will draft a proposed Bangsamoro basic law has been expanded to include members from MNLF, MILF, and other peace stakeholders. Misuari has reportedly refused to participate in the talks with the MILF, a former MNLF faction which he now regards as “traitors.” Duterte is confident the peace efforts with rebel groups would bear fruit in two years.
Government taking steps to lift barriers to reforms BusinessWorld 10th Nov 2016
The government is taking steps to speed up action on its infrastructure and tax reform program, including reconvening the Legislative-Executive Development Advisory Council (LEDAC) next week to ensure agreement between Malacañang and Congress on priorities. Socioeconomic Planning Secretary Ernesto M. Pernia said the LEDAC fosters a “collaboration mode,” giving the administration “maybe a better chance of moving things faster.” The LEDAC, first organized during the term of President Fidel V. Ramos and which groups leaders and other key officials of the Executive branch and Congress, serves as a policy consultative and advisory body to the President. Among the first issues that would likely be taken up is the proposed emergency powers for the President to address the transportation and traffic problem in the country which key lawmakers have otherwise found too encompassing. Mr. Pernia said he is hopeful that Congress will approve a law that will provide the Executive branch with appropriate extra authority, “especially on efforts that have to do with addressing the traffic crisis and our huge deficit in terms of infrastructure.” A list of action plans was drawn up at the PDF 2016 which will be made part of the Philippine Development Plan (PDP) 2017-2022 as well as the 2018 budget, with particular focus on tax reforms, legislated freedom of information and development programs for a new Bangsamoro geopolitical entity in Mindanao. The new PDP is expected to be finalized by the National Economic and Development Authority by the first quarter of next year, while preparations for the 2018 budget will commence as early as January.
BusinessWorld | Gov’t seeks inputs for new dev’t blueprint Business World 8th Nov 2016
THE DUTERTE ADMINISTRATION will meet leaders of business and development institutions for two days next week in Davao City to secure inputs for the next five-year Philippine Development Plan (PDP) that will outline strategies for economic growth and poverty alleviation until 2022. Central to the discussions will be specific steps to carry out the 10-point socioeconomic agenda laid out by the new government last May, the Finance department said in a statement on Friday. The meeting which will involve around 300 representatives and officials from the public and private sectors, including members of Congress, the academe, business and civil society. “In this forum... we can all discuss with the international and the local community the direction of the Philippine economy,” Finance Secretary Carlos G. Dominguez III was quoted as saying in the statement.
CHR ready to assist UN in probing slays philstar.com 5th Nov 2016
The Commission on Human Rights (CHR) is ready to assist in the upcoming visit of a United Nations special rapporteur who will investigate the alleged extrajudicial killings under the Duterte administration. CHR Chairman Chito Gascon yesterday said they have yet to receive an official communication from UN special rapporteur on extrajudicial, summary or arbitrary executions Agnes Callamard regarding the invitation sent by Malacañang. Callamard recently confirmed receipt of the invite, a month after it was signed by Executive Secretary Salvador Medialdea on Sept. 28. “CHR is prepared to assist the UN in any way they deem appropriate regarding this matter if they desire,” he added. While she has previously accepted the challenge of chief presidential legal counsel Salvador Panelo to come over and see for herself the real situation, the rapporteur has yet to respond to the conditions set in the invitation.
Misuari comes in from the cold Inquirer 4th Nov 2016
Nur Misuari emerged from three years of hiding in his forested Jolo Island redoubt and was flown to Manila in a private jet for a meeting on Thursday with President Duterte in Malacañang, where he vowed to help bring peace to Mindanao. The 77-year-old founder of the Moro National Liberation Front (MNLF) and the President embraced like “long-lost brothers,” said peace adviser Jesus Dureza, who was tasked with bringing the rebel leader to Malacañang after a Pasig court suspended for six months, at the government’s behest, an arrest warrant against him for the 2013 siege of Zamboanga. Misuari said he moved against the Abu Sayyaf bandits on Mr. Duterte’s request and that he was responsible for the rescue of their hostages, including Norwegian Kjartan Sekkingstad, in September. Brig. Gen. Restituto Padilla, the AFP spokesperson, said Misuari would give peace a chance. “Hopefully all of these arrangements, all of these negotiations will lead to a long, just and lasting, sustainable peace for the whole country,” he said.
Bataan freeport eyes expansion philstar.com 2nd Nov 2016
The Authority of Freeport Area of Bataan (AFAB) is mulling a potential expansion as it expects to double approved investment commitments in the economic zone in the next six years. “The expansion of the FAB will be studied to accommodate more investors and generate more jobs,” newly appointed AFAB chairman and administrator Emmanuel Pineda said. “By 2022, we expect investments in the freeport will double, while we see the number of FAB workers will grow by 50 percent in the next three years,” he said. Pineda, who served as deputy administrator for operations of the AFAB since 2010, was appointed as chairman and administrator by President Duterte on Oct. 10. According to the official priority projects under his term will include the provision of housing for the increasing number of workers and locators in the freeport as well as its possible expansion. “We will also work hard to make the FAB more accessible by establishing better transportation system and hopefully, by having more ports in the freeport,” he said. AFAB expects approved investment pledges to reach P7 billion this year, up 13 percent from the previous year driven by the continued entry of manufacturing firms.
Customs
PH Customs order on advance ruling takes effect Nov 15 PortCalls Asia 9th Nov 2016
The customs administrative order (CAO) implementing a new advance ruling system for valuation and rules of origin (RO) in the Philippines will take effect on November 15. CAO 03-2016, which was signed and approved last month, covers the establishment of an advance ruling system for customs valuation methodology and preferential and non-preferential RO. The CAO is pursuant to Sections 1100-1104 and related provisions under Republic Act (R.A.) No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA). Sections 1100 to 1104 discuss classification ruling, valuation ruling, ruling on the rules of origin, conditions for application and effect of advance rulings, and administrative and judicial appeals. The order makes advance ruling—an official written and binding ruling issued by the Bureau of Customs (BOC) upon the request of an importer, foreign exporter, or authorized agent—now part of the law. The ruling gives an assessment of origin or treatment to be applied to a certain element of customs value, or to other matters related to the importation or exportation of goods under customs jurisdiction, prior to an import or export transaction for a specified period.
Government to spend P8T on massive infrastructure agenda over next 6 years PortCalls Asia 7th Nov 2016
The Philippine government has drawn up a list of 14 priority infrastructure projects for rollout over the next five years in a bid to facilitate connectivity and mobility in the country and hike infrastructure spending. These projects intend to achieve President Rodrigo Duterte’s goals of more jobs, lower costs of goods, and improved traffic flow and transportation services. Socioeconomic Secretary Ernesto Pernia in a press conference on November 3 said that for infrastructure spending, the administration has a budget of P800 billion for 2017 and a target expenditure of P8 trillion during its six-year term. Department of Public Works and Highways (DPWH) Secretary Mark Villar, in the same press con, said the government seeks to hike infrastructure spending to between 5.4% and 7% of the gross domestic product (GDP) to bring it on a par with the budgets of other Asian neighbors, which spend up to 8% to 10% of their GDP on infrastructure. Involved in the 14 big infra initiatives to be executed in the next five years are DPWH, Department of Transportation (DOTr), and the Bases Conversion and Development Authority (BCDA). Villar said DPWH will be involved in the Santa Monica-Bonifacio Global City-Lawton Link Bridge, UP-Ateneo-Miriam Viaduct, Iloilo-Guimaras-Negros-Cebu Link Bridge, Davao City Bypass Road Project, and North Luzon Expressway-South Luzon Expressway (NLEX-SLEX) Connector Road Project.
Cebu port introduces cut-off delivery time for export cargo undergoing weighing PortCalls Asia 7th Nov 2016
The Cebu Port Authority (CPA) is imposing a delivery cut-off period for outbound/export shipments that have been weighed before loaded onto a vessel at the Cebu International Port (CIP). As part of CPA’s verified gross mass (VGM) policy, effective November 1, all outbound containers should be delivered to or be gated-in at CIP for mandatory weighing before loading onto the vessel at least three hours—but not earlier than four days—before the estimated time of arrival (ETA) of the carrying vessel, CPA general manager Edmund Tan said in an advisory to stakeholders. All outbound reefer containers, on the other hand, should be delivered to or be gated-in at CIP not later than two hours after the actual time of arrival of the carrying vessel, but not earlier than four days before the ETA of the vessel.
BOC introduces draft rule on tax, duty-exempt import perks for OFWs PortCalls Asia 7th Nov 2016
The draft customs administrative order (CAO) on the tax- and duty-exempt privileges for importations of personal and household effects by returning residents and overseas Filipino workers (OFWs) now awaits public feedback. Position papers on the draft CAO, just released by the pHILIPPINE Department of Finance (DOF) and Bureau of Customs (BOC), may be submitted until November 10, the day a public hearing on the regulation will be held. The draft CAO is the latest to be released that will implement one of the provisions of the Customs Modernization and Tariff Act (CMTA) or Republic Act No. 10863. Specifically, the proposed CAO will operationalize Section 800 (f) Chapter 1, Title VIII, and other relevant sections of the CMTA.
BOC names key officials, including deputies PortCalls Asia 4th Nov 2016
Philippine President Rodrigo Duterte has appointed five new senior officials of the Bureau of Customs (BOC). In separate letters signed on October 17 by Executive Secretary Salvador Medialdea, five offices in BOC were filled with new chiefs, namely : Natalio C. Ecarma III, deputy commissioner, Revenue Collection Monitoring Group (RCMG); Ariel F. Nepomuceno, deputy commissioner, Enforcement Group (EG); Teddy Sandy S. Raval, deputy commissioner, Intelligence Group (IG); Edgar Z. Macabeo, district collector, Port of Ninoy Aquino International Airport (NAIA); and Vincent Philip C. Maronilla, district collector, Manila International Container Port (MICP). Two other deputy commissioner positions (Assessment and Operations Coordinating Group [AOCG] and Management Information System and Technology Group [MISTG]) are still vacant along with some district collectors’. The deputy commissioner for the Internal Administration Group remains Atty Arturo Lachica. The Customs Personnel Order for the officials’ appointment was signed on November 2 by Customs Commissioner Nicanor Faeldon and takes effect immediately.
BOC official relieved Bureau of Customs 3rd Nov 2016
The Bureau of Customs has relieved Atty. Arnel Alcaraz as officer-in-charge of the Enforcement Group following President Rodrigo Duterte’s pronouncement that he wants a corrupt official out of the Bureau. Commissioner Nicanor Faeldon signed on Wednesday, 2 November, the order that relieves Alcaraz from his position and designates Isabelo Tibayan III as temporary replacement. President Duterte announced on Tuesday, 1 November, that he wants a certain Customs deputy official suspended and removed from office for alleged corrupt practices. The president didn’t identify who the official was. “We are assuming [that it was Alcaraz] because we have not received any other formal charges against the other deputy commissioners. So since na-mention sya ni President kahapon, it is safe to assume na he was referring to him.”, according to Atty. Mandy Anderson, chief of staff of Commissioner Faeldon. A graft case was filed before the National Bureau of Investigation (NBI) against Alcaraz for alleged extortion activities. BOC is currently working with NBI to gather the affidavit of the complainants and other evidence for the investigation. “Wala pang dumarating sa amin na any complaint against him. So we will be working hand-in-hand with the NBI to get whatever complaint was filed, and then we will initiate administrative investigation against him accordingly,” Anderson explained.
Germany’s KfW funds red tape reduction program for trade BusinessWorld 8th Nov 2016
The Department of Finance (DoF) has secured a more than P20-million grant from a German development bank, intended to support simplifying the documentary requirements for imports and exports. Kreditanstalt für Wiederaufbau (KfW) Group provided a grant of P21.5 million for the implementation of the DoF’s Inter-Agency Business Process Interoperability (IABPI) Program. The program aims to streamline the processing of import and export permits to a maximum of three days from the former two weeks. In a statement, Undersecretary Gil S. Beltran said the program will be implemented by the DoF’s Policy Development and Management Services Group in coordination with the government’s trade regulatory agencies. Mr. Beltran, who was also appointed as the leader of the government’s anti-red tape team, said that “the major cause of red-tape in government is that agencies act and operate in isolation of each other.” The anti-red tape team, composed of the DoF and Department of Information and Communications Technology (DICT), is working on databases that would help streamline government processes. A meeting on the Philippine Business Databank, which would contain the documents from departments such as the Department of Trade and Industry (DTI) and Securities and Echange Commission (SEC) was held late last month. In a text message to BusinessWorld, Mr. Beltran said the databank will be launched in the first quarter of 2017.
BOC to importers: Help us fight corruption, reform the agency Philippine Bureau of Customs 7th Nov 2016
The Bureau of Customs once again appealed to the importers for their help in reforming the agency. During the Stakeholders Consultation Forum held on 4 November at the Philippine International Convention Center, Customs Commissioner Nicanor Faeldon asked the help of the importers to take part in fighting corruption in the Bureau.
Defense & Security
Fewer Philippines-US joint military exercises seen philstar.com 9th Nov 2016
The government will reduce the number of joint military exercises with the US, the Department of National Defense (DND) said yesterday. DND spokesman Arsenio Andolong said this decision would be relayed to the US government during the Mutual Defense Board-Security Engagement Board (MDB-SEB) meeting this month. The MDB-SEB annual meetings, which are held alternately in Manila and Hawaii, allow the two militaries to plan exercises for each year. On Monday, Defense Secretary Delfin Lorenzana said President Duterte has approved his recommendations for the resumption of Balikatan, the largest war games between the two countries. Lorenzana said Balikatan should focus on humanitarian assistance and disaster response. The two other exercises, the Philippine Bilateral Exercises (PHIBLEX) and the Cooperation Afloat Readiness (CARAT), which separately involve Filipino and US Marines and Filipino and American sailors, respectively, have been dropped. The trimming down of the yearly exercises with the US military is in line with Duterte’s desire to end any existing military-to-military activities with the US. Andolong said with Lorenzana’s recommendations, the AFP would probably be having only about six to seven joint military exercises with the US, or maybe less. Andolong said during the Aquino administration, the military had around 13 exercises with the US.
Rody, Malaysian PM to tackle piracy, peace process philstar.com 3rd Nov 2016
President Duterte is looking forward to his Nov. 9-10 visit to Malaysia when he is set to discuss with Prime Minister Najib Razak the piracy problem in the Malacca Strait and the Sulu Sea as well as the peace process in Mindanao. “Yes, we will discuss them because we have to agree on an agenda,” the President told reporters in an ambush interview Tuesday night when he visited the tombs of his parents at the Wireless Public Cemetery here. Malaysia is third party facilitator of the peace talks with the Moro Islamic Liberation Front (MILF). Also on the agenda is the kidnapping problem in Jolo, Sulu which had victimized Malaysians, Indonesians and other foreigners.
Duterte says he'll consider sticking with US weapons philstar.com 3rd Nov 2016
Philippine President Rodrigo Duterte said Wednesday he'll consider continuing to acquire weapons and defense equipment from treaty ally the United States if his military recommends so, despite offers from China and Russia. Duterte made the remark in a speech in which he again railed at the U.S. with expletives for criticizing his deadly anti-drug crackdown, calling American officials "monkeys" and breaking a promise that he would no longer resort to trash talk. Duterte, who took office in June, has been antagonistic to U.S., EU and U.N. officials who have raised human rights concerns over his brutal crackdown on illegal drug sellers and users and called for an end to extrajudicial killings. He has used expletives in responding to their criticisms, telling President Barack Obama to "go to hell" in an outburst last month. He has declared his intention to scale back his country's military engagements with Washington, including ending largescale joint combat exercises and the presence of visiting U.S. forces, while reaching out to expand once-frosty relations with China and Russia. U.S. officials, however, say they have not been formally notified by the Philippines of any change in security relations and activities and stress that Washington wants to continue its decades-long alliance with Manila.
Economics
PHL growth seen slipping to 6.9% in Q3 BusinessWorld 12th Nov 2016
The Philippine economy likely remained upbeat during the third quarter although growth may have slipped by a tad from the 7% reading seen three months prior due to a sustained export slump, aggravated by a decline in nickel production following several state-imposed mine closures, Moody’s Analytics said in a market view. Analyst Jack Chambers said Philippine gross domestic product (GDP) may have grown by 6.9% from a year ago, with domestic consumption helping sustain rapid expansion. “We look for Philippine GDP growth to come in at 6.9% year-on-year for the third quarter, decelerating slightly from the 7% result posted in the three months to June. The main drivers of the economy will continue to be domestically focused, with private consumption, investment and government spending all expanding rapidly,” Mr. Chambers said in a market forecast on Friday. The Philippine Statistics Authority will report third-quarter GDP data on Nov. 17. If realized, the rate would again fall closer to the high end of the government’s 6-7% growth goal for the year and would keep the nine-month average at 6.9%. The forecast rate also picks up from the 6.1% clip recorded during the comparable period in 2015. Moody’s said the persistent drag in global activity likely kept exports in negative territory, dampened by the Environment department’s decision to halt a number of mining operations. Meanwhile, Socioeconomic Planning secretary Ernesto M. Pernia has said that increased infrastructure spending under the Duterte administration would help offset an export slump, which would allow the economy to expand between 6.3%-7.3% during the quarter. Moody’s Analytics remains bullish towards the Philippine economy, in light of “buoyant economic conditions and gains in the service sector,” allowing the country to cement its position as one of the fastest global performers.
Monetary policy steadies, but 2016-2018 inflation forecasts up BusinessWorld 11th Nov 2016
The Bangko Sentral ng Pilipinas (BSP) kept policy rates unchanged anew yesterday on the back of benign inflation and robust domestic activity at a time of heightened global uncertainty, but expects the general price increase of widely used goods and services to pick up faster in the coming months. As widely expected, the Monetary Board left policy settings at 3.5% for the overnight lending rate, 3% for the overnight reverse repurchase rate, and 2.5% for the overnight deposit rate in its seventh review for the year, maintaining the operational tweaks that took effect in June as the central bank shifted to an interest rate corridor system. Reserve requirement ratios were also left unchanged, with the 20% standard kept for universal and commercial banks. “The Monetary Board’s decision is based on assessment that inflation continues to be manageable, with a gradual return to the inflation target range expected over the policy horizon,” BSP Governor Amando M. Tetangco, Jr. said in a press briefing in Manila. “At the same time, the Monetary Board also observed that prospects for global economic growth remain modest and uneven since the previous meeting. Moreover, monetary policies in major advanced economies continue to be asynchronous and the prospects uncertain.”
August net FDI inflow biggest in four months BusinessWorld 11th Nov 2016
Net foreign direct investments (FDIs) to the Philippines logged the highest in four months in August and pulled the year-to-date tally closer to the central bank’s forecast for the full year. Net FDI inflows hit $711 million for the month, rising from $503 million recorded in July and surging by 32% from last year’s $539 million, the Bangko Sentral ng Pilipinas (BSP) said in a statement released yesterday. The figure is the highest since a record $2.244-billion net FDI inflows posted in April and reflects continued increase since the $238 million recorded in June, which marked the end of the previous administration. FDIs are a key source of capital for the local economy, which open up more job opportunities for Filipinos. A jump in investments of foreign firms in debt instruments of their Philippine subsidiaries and affiliates drove the higher August tally, offsetting a slip in equity placements from a year ago. Net equity investments plunged to $8 million in August, 78.2% lower than the $37 million seen a year ago. Broken down, total placements of $49 million was partially offset by $41 million in capital that went out in August. This is lower than the net equity capital secured in August 2015, with $48 million in inbound capital offset by $11 million in total withdrawals. August inflows pulled the eight-month tally to $5.406 billion, 71.1% more than the $3.159 billion net FDI seen in the comparable year-ago period and closer to the central bank’s $6-billion forecast for 2016. The biggest sources of foreign capital in those eight months were Japan ($871.43 million), Singapore ($168.99 million), the United States ($90.39 million), Taiwan ($82.4 million) and Hong Kong ($51.29 million).
Pernia: PHL should foster culture of innovation, research and development to boost productivity BusinessMirror 10th Nov 2016
The National Economic and Development Authority (Neda) said the country’s average capacity-utilization rate had “barely moved” in four years. Socioeconomic Planning Secretary and Neda Director General Ernesto M. Pernia said the country’s average capacity-utilization rate is only at 83.6 percent in September. This was buoyed by basic metals, with the highest utilization rate at 88.5 percent, followed by petroleum products at 88.4 percent. “While this growth is a boon, it is important to note that the average capacity utilization of manufacturing firms barely moved since 2012. This may hamper the sector’s growth in [the] long run, as it may end up struggling to keep up with the increasing domestic demand,” Pernia said. He added the country must foster a culture of innovation, research and development to boost productivity. This will help the Philippines remain competitive in an increasingly integrated global economy. “We must ramp up our efforts in providing the economy’s infrastructure needs, particularly for the manufacturing and power sectors, to facilitate the smooth movement of goods and services and attract local and foreign investments,” Pernia said.
Gov’t vows to lure foreign investors Inquirer 9th Nov 2016
DAVAO CITY—Expect the Duterte administration to further open up the education, media and retail sectors in the next few years as it aims to attract more foreign capital, economic managers told representatives of bilateral and multilateral development partners Tuesday. Finance Secretary Carlos G. Dominguez III, who chairs the two-day Philippine Development Forum, told delegates that the government wanted to invest more in infrastructure and human capital to, in turn, attract more businesses that would generate more jobs in line with President Duterte’s 10-point socioeconomic agenda, which is aimed at slashing the poverty incidence to 13-15 percent by 2022 from 21.6 percent in 2015.
Chua new MBC chair Inquirer 9th Nov 2016
The Makati Business Club has elected Edgar O. Chua, who recently retired as country chair of the Shell companies in the Philippines, as the group’s new chair. He replaces Phinma Inc. president and CEO Ramon R. Del Rosario Jr., who served as MBC’s chair for 10 years. “I am deeply honored and humbled that my fellow trustees have placed their trust and faith in me by electing me to the role. I have extremely big shoes to fill as Ramon has led MBC so well in the last 10 years,” Chua said in a statement on Tuesday.
PH takes key steps to attract FDI Inquirer 9th Nov 2016
Thirty-six countries, including the Philippines, have implemented critical investment policy measures within the year, all aimed at further easing the entry of foreign investments in their respective economies. This was according to the latest Investment Policy Monitor by the UN Conference on Trade and Development (Unctad), which noted a total of 53 policy measures implemented from May 1 to October 15 this year. These policies, which were aimed at further liberalizing the investment climate of a particular country or territory, were deemed significant, as boosting “foreign investment was seen as an important means of reviving a stagnant global economy,” the Unctad said
Goods, service exports may not grow -- EDC Business World 8th Nov 2016
THE EXPORT Development Council (EDC) has kept its growth targets for overseas sales of both goods and services for 2016 and 2017 at 3%, but remains open to the possibility that both years may not see any growth at all, officials of the group said.In separate interviews, officials of the EDC confirmed that they have kept the export goal of 3% until 2017, but have made it the high end of a target range. “Our 2016 target for both goods and services is 3%. But that is on the high end. That is a fighting target,” Sergio R. Ortiz-Luis, Jr., president of Philippine Exporters Confederation, Inc. and EDC private sector vice-chairman, told BusinessWorld in a Nov. 1 telephone interview.
Dominguez assures AmCham of positive investment climate BusinessWorld 7th Nov 2016
The Government is pursuing a policy of economic diversification, opening more markets for Philippine products overseas and encouraging more foreign investment, the Department of Finance (DoF) told the US business lobby. In a statement e-mailed to journalists, the DoF said, Finance Secretary Carlos G. Dominguez III met with the American Chamber of Commerce and Industry (AmCham) on Saturday. “The Duterte administration will make certain that the business environment is such that in encourages people to stay on,” Mr. Dominguez said. “As far as business is concerned, President Duterte wants more competition and innovation.” Recognizing the role of US businesses in job generation, Mr. Dominguez asked AmCham to assist in creating jobs that provide both dignity and economic gain to the people. President Rodrigo R. Duterte’s statements about Philippine-US relations were also discussed during the meeting. Sought for comment, AmCham Executive Director Ebb Hinchliffe said that the Chamber shared with Mr. Dominguez some of its views on how the anti-US rhetoric from the Palace could be potentially dangerous to the investment climate in the Philippines. “What we’re looking for is a stop to the name calling,” Mr. Hinchliffe said in a phone interview with BusinessWorld. “We’d like to see the heat turned down a bit, return to the friendly environment that we’re used to between the Philippines and the US.” He also said that the Chamber supports the administration’s 10-point socioeconomic agenda and hopes that the government succeeds in attaining its targets.
Government moves to assure US firms, other investors Business Mirror 6th Nov 2016
The Duterte administration will continue to make the Philippines an attractive place for investments by encouraging a competitive environment to level the playing field for business, Finance Secretary Carlos G. Dominguez III said over the weekend. Dominguez made this assurance to members of the American Chamber of Commerce and Industry (AmCham) during a meeting last Saturday. He added that the Duterte administration will make certain that the business environment is such that it encourages people to stay on. The finance chief added that the Duterte administration is pursuing a policy of “economic diversification,” which will open more markets for Philippine products overseas, encourage more investments in the country and create better-paying jobs for Filipinos. During the meeting, Dominguez said AmCham representatives expressed their support for the government’s 10-point socioeconomic agenda. Dominguez thanked AmCham for supporting the government’s 10-point socioeconomic agenda, and asked the chamber to help craft an action plan that would implement the reform plan’s goal on job creation recognizing AmCham’s role in generating hundreds of thousands of jobs in various industries in the country. The AmCham members present during the meeting with the finance chief included representatives from the fields of manufacturing, construction, electronics, mining, business-process outsourcing, information technology, power, food processing and agriculture. Among them were key officials from Capital One, Cargill Philippines, Freeport McMoran, Philip Morris Fortune Tobacco Co., Optel, and AES Corp. Elizabeth Magsaysay of the US-Asean Business Council was also present at the meeting.
BSP seen keeping rates steady PhilStar 6th Nov 2016
MANILA, Philippines – Investment banks see the Bangko Sentral ng Pilipinas (BSP) keeping interest rates steady this week amid the country’s sustained economic growth as well as a benign inflation environment DBS Bank Ltd. economist Gundy Cahyadi said the central bank’s Monetary Board would likely keep policy rates unchanged during its rate-setting meeting on Thursday. “Growth is robust and inflation is inching higher. A combination of these is likely to mean BSP will stand pat for now, with a rate hike looming on the horizon,” he said. According to Cahyadi, core inflation bottomed out in the second quarter of the year. Inflation was steady at 2.3 percent in October, bringing the average inflation to 1.6 percent in the first 10 months of the year.
Spending underpins Q3 growth Business World Online 4th Nov 2016
The Philippine economy likely expanded by 6.3% to 7.3% in the third quarter from a year earlier, boosted by the government’s increased spending on infrastructure, the economic planning chief said on Thursday. Socioeconomic Planning Secretary Ernesto M. Pernia said third-quarter growth would also show the impact of weak exports and investments. Gross domestic product (GDP) increased 7% in the three months ended June from a year earlier, the fastest pace in three years. That brings the first-half average GDP growth to 6.9%, within the government’s official goal of 6-7% for 2016. The government is scheduled to release the July-September GDP data on Nov. 17.Mr. Pernia said the probability that third quarter GDP results will settle on the higher end of the forecast range he tipped will be underpinned by consumption and investments, as well as infrastructure spending to offset softening export demand. The fading impact of election-related spending, meanwhile, could have pulled growth closer to the lower end of the government’s forecast range for the third quarter, Mr. Pernia said. The Philippines held its national elections last May, bringing to power President Rodrigo R. Duterte whose anti-US remarks are unlikely to hurt investments this soon, the socioeconomic planning chief said. The setback on foreign direct investments from the US -- among the country’s top 5 foreign direct investors -- could be felt by the fourth quarter when the economy, he said, is expected to slow to a 6.4% to 6.5% range.
Philippines seen among Asia’s biggest economies Business World 2nd Nov 2016
THE PHILIPPINES is poised to become the ninth biggest economy in Asia over the next decade, offering “substantial opportunities for those looking to invest in a fast-growing frontier market,” analysts at BMI Research said in an Oct. 27 report. The Fitch Group unit said the country could break into the top 10 by 2025 should it be able to keep growing at its current pace, coming from 11th place as of end-2015. Based on BMI’s estimates, the size of the economy could nearly triple over the next 10 years should gross domestic product (GDP) growth average 5.9% over that period.
Market learns to decipher Duterte Business World 2nd Nov 2016
THOSE now straining to second-guess President Rodrigo R. Duterte everytime he fires off a salvo of disconcerting remarks should have listened carefully to his inaugural address. The tough-talking leader had said then that his economic and political policies could be gleaned from quotations of former US presidents Franklin D. Roosevelt and Abraham Lincoln that he used in that speech, advising his audience to just “[r]ead between the lines.” These days, reading between the lines is all observers can do while waiting for Cabinet officials to shed light on Mr. Duterte’s rhetoric.
Energy
Develop oil contracts first before joint exploration – Cusi PhilStar 9th Nov 2016
MANILA, Philippines – Not keen on joint exploration for oil and gas prospects with China, Energy Secretary Alfonso Cusi wants all suspended service contracts in the West Philippine Sea to be developed by project proponents first. The Energy chief said he wants all awarded service contracts under moratorium to start development before discussing any possibility of undertaking any joint exploration in the disputed waters. “Personally, (I’m) hoping not for the joint exploration. But I’m hoping that the suspended exploration (projects), the service contracts that we have already awarded…be continued first before anything else,” Cusi said.
PH not keen on joint oil drilling The Standard 8th Nov 2016
The Energy Department is not keen on a joint petroleum exploration activity with other countries in the disputed areas of the West Philippine Sea. Energy Secretary Alfonso Cusi said in a radio interview he preferred the resumption of oil exploration activities in service contracts affected by the dispute. “I’m personally hoping not for the joint exploration but I’m hoping that the suspended exploration service contracts that we have already awarded, and those contracts under moratorium, … (will) push through... before anything else. That’s where we should start,” Cusi said.
DENR sees rollout of waste-to-energy projects in Philippine cities next year Business Mirror 7th Nov 2016
A Department of Environment and Natural Resources (DENR) undersecretary on Monday said the Philippines and Japan are strengthening their waste-to-energy (WTE) cooperation, and are eyeing Quezon and Davao cities as potential pilot sites. “The government of Japan is very much willing to assist us in addressing our garbage problem through waste-to-energy,” DENR Undersecretary for International Affairs and Foreign-Assisted Projects Jonas R. Leones said. The collaboration between the two nations on WTE projects, the DENR official added, is likely to roll out next year in the two key cities, and will likely increase by eight more within the same year.
DOE draws up energy master plan for PH Inquirer 7th Nov 2016
The Department of Energy is creating a comprehensive energy master plan for the next decade and a half that—if formulated and implemented properly—will help deliver reliable and affordable electricity to sustain local economic growth. The department’s Energy Policy and Planning Bureau is finalizing the Philippine Energy Plan 2016-2030 as the energy sector’s contribution to the Ambisyon Natin 2040, as outlined under President Duterte’s Executive Order 5, laying down the foundation for inclusive growth and a high-trust society. In a statement, Energy Secretary Alfonso Cusi said the DOE was crafting a 15-year energy plan—and even a plan that extends to 2040—that would entail a series of studies factoring in gross domestic product (GDP) and population growth, among others.
DOE still considering nuclear in its long-term energy plan Manila Bulletin Business 4th Nov 2016
For a comprehensive Philippine Energy Plan (PEP) that shall stretch until year 2040, the Department of Energy (DOE) indicated that nuclear power would still be integrated as a component of the long-term power development aspiration of the country. Energy Secretary Alfonso G. Cusi concurred that it may no longer be feasible to have one under the Duterte administration, but it could still be a prudent option in the country’s future needs for baseload capacity. When asked by the media if nuclear power facility will be a fixture in the updated PEP, the energy chief’s outright response was “of course, we’re doing a 15-year plan, and up to 2040.”
Philippine leader wary of nuclear energy over safety issues The Province 3rd Nov 2016
MANILA, Philippines - Philippine President Rodrigo Duterte said it's unlikely his country will adopt nuclear energy during his six-year term because of safety concerns. Duterte said nuclear energy remains an important option in the future, but the Philippines needs to undertake a study and put "really tight safeguards" in place. "Not, maybe, during my presidency. ... Not now because we have to come up with safeguards, really, really tight safeguards, to assure that there will be no disasters if there is a nuclear leak or explosion," Duterte said late Tuesday in response to a reporter's question about his view of nuclear energy.
Philippines needs stricter rules in power sector – expert PhilStar 3rd Nov 2016
MANILA, Philippines – The Philippine government needs stricter policies and regulations to rebalance the power industry into a more sustainable and reliable sector, an industry expert said. Regulations play an important role in embedding several technologies in the broader system, Konrad Adenauer Stiftung (KAS) director Peter Hefele said in an interview with The STAR. “Energy transformation is not just a technical issue, it goes far more in urban planning, in building a whole new economy around,” he said. He said financing is not an issue if enabling conditions are set.
Duterte backs plan to revive nuclear power plant BusinessWorld 12th Nov 2016
President Rodrigo R. Duterte is now backing plans to revive the mothballed Bataan nuclear power plant (BNPP) after initially rejecting the use of nuclear energy in the country, according to Energy Secretary Alfonso G. Cusi. “[President Duterte] has spoken and after he has spoken I talked to him and made clarification and [sought] clearance that I proceed to work for its [BNPP’s] implementation and full operation,” Mr. Cusi said in a speech during the inauguration of two natural gas-fired power plants on Friday in Batangas City. Mr. Duterte had earlier said nuclear energy would not be an option for the country during his term. Proponents of nuclear power previously asked what prompted Mr. Duterte to come up with a firm stand on the matter even after the DoE had publicly endorsed the crafting of a nuclear energy policy. However, the president is known to change his views on issues. For instance, Mr. Duterte earlier this week said the Philippines will ratify the Paris Agreement, after earlier criticizing the commitment made by the Aquino administration to reduce greenhouse gas emissions. Mr. Cusi said he assured the President that there will be safeguards in place to ensure the nuclear power plant will be operated properly. The Energy chief had previously said the plant would cost $1 billion to be repowered. The National Power Corp. placed the plant’s capacity at around 600 megawatts. The DoE-attached agency oversees the upkeep of the plant over the years. On the sidelines of the event, Mr. Cusi told reporters that for now, BNPP’s revival plans would be a state undertaking, although government staff currently do not have the competence to operate the mothballed facility.A state-to-state partnership would be an option, Mr. Cusi added.
ERC seeing clarification of SC ruling BusinessWorld 11th Nov 2016
The Energy Regulatory Commission (ERC) said it will seek clarification from the Supreme Court over a ruling blocking a lower court from entertaining complaints about the ERC’s retail competition and open access (RCOA) scheme. Jose Vicente B. Salazar, ERC chairman and chief executive officer, told a hearing on energy issues at the House of Representatives that the regulator had obtained a temporary restraining order (TRO) from the high court blocking a TRO issued by the Pasig regional trial court (RTC) against the RCOA rules. In effect, the high court allowed the ERC to continue implementing RCOA, an initiative that requires big power users to contract their electricity requirements from licensed retail electricity suppliers (RES). These consumers will move away from being part of a utility’s captive market.
Solar power association wants polluting industries to pay into clean-up fund BusinessWorld 10th Nov 2016
A group of solar power developers is proposing the creation of a “climate change fund” that would make big polluters pay to help clean up the environment, a proposal that has found an ally in the Senate energy panel. “We are prepared to discuss with the government a mechanism to make the polluters pay. It should not be the responsibility of the consumers to clean the environment,” Ma. Theresa C. Capellan, president of the Philippine Solar Power Alliance (PSPA), told reporters on the sidelines of a conference on energy security on Wednesday in Makati City. “It is the responsibility of the polluters to clean the environment,” she said, adding that it was the position of the association, which is made up of around 42 solar power plant owners and builders, including installers of commercial and industrial solar rooftop. Her proposal comes as the Department of Energy (DoE) and the National Renewable Energy Board (NREB) sound off the need to find a way to stop making consumers shoulder the feed-in-tariff allowance (FiT-all), which is billed monthly to on-grid users of electricity. FiT-all goes to pay renewable energy developers a fixed tariff for every kilowatt-hour they export to the grid. In the case of solar energy, for instance, the payment is fixed for 20 years. On the sidelines of the same conference, Senator Sherwin T. Gatchalian, chairman of the Senate committee on energy, said he had previously questioned why payment for the FiT-all is the same for all electricity users. “My proposal is to make it progressive. For example, if you are a heavy industry, you’re a heavy polluter, let’s say you are a steel company, ...you should be paying higher FiT-all,” he said, adding that the payment is not taxation but a progressive subsidy.
DoE to extend audit to transmission system BusinessWorld 9th Nov 2016
The Department of Energy (DoE) has completed the public consultation on the audit of the country’s power plants, from which it obtained proposals to also look into the efficiency of the transmission system. “The audit is for us is to verify our numbers in order for us to determine with specificity where we can add or where we can speed up as far as generation. What is the problem in transmission?” said Energy Undersecretary Felix William B. Fuentebella, in an interview on Tuesday. In July, the DoE announced that it had scheduled a technical audit of generation plants in response to the series of yellow and red alert issuances by the grid operator when reserve power went below what the system required. The warnings extended to August, prompting the agency to tap outsiders to help in its audit. The audit also includes a review of all their power supply contracts. Mr. Fuentebella said the department would look at the impact when contracts are in the short or long term. He said DoE would call for shortening the effectivity of the contracts if needed.
Auction scheme considered for renewable energy service areas -- DoE BusinessWorld 8th Nov 2016
The Department of Energy (DoE) is considering a competitive auction to serve areas that can accommodate more renewable energy projects, specifically using solar or wind technology, once the agency finalizes a new feed-in-tariff (FiT) system. “We are considering some parameters in doing the feed-in-tariff system, including the possible auction system,” said Mario C. Marasigan, director of the DoE’s renewable energy management bureau. He described the auction process as a deviation from the current rule wherein the DoE sets an installation target for which the Energy Regulatory Commission (ERC) calculates a corresponding price for each kilowatt-hour of output. “In the auction system, there will be no more price determination as part of the ERC rules but rather an auction as the price determinant,” he said. The current FiT system rules were formulated by the ERC in consultation with the National Renewable Energy Board (NREB), which has representatives from the public and private sectors. The rules include priority connection to the grid for electricity generated from emerging renewable energy resources. Mr. Marasigan said the proposal would still qualify as feed-in-tariff but using a different pricing methodology. He said the proposed system might be as detailed as “going down to the actual capacity of interconnection points” to avoid a repeat of the problems on Negros Island where solar and wind developers put up projects that could not be accommodated by the transmission facilities.
IFC sees investment ‘deluge’ for PHL after climate deal | BusinessMirror Business Mirror 8th Nov 2016
The global agreement on climate change has turned the Philippines into one of the countries with a huge climate-smart investment potential in the world, according to the International Finance Corp. (IFC). In a news statement, the IFC said the climate-change agreement signed last year opened up as much as $23 trillion in emerging-market opportunities. Around $16 trillion of this amount can be made in climate-smart investments in East Asia and the Pacific, where China, Indonesia, the Philippines and Vietnam show the largest potentials. “There has never been a better time than now for climate-smart investing,” IFC Executive Vice President Philippe Le Houérou said. “This reflects the dramatic reduction in the price of clean technologies and the rise of smart policies that are driving businesses to invest.” Le Houérou added that the increase in climate-smart opportunities has also convinced them to increase its climate investments to $3.5 billion a year by 2020. He added that the IFC also plans to catalyze $13 billion through other investors. The IFC also said that a salient point in the report’s findings is the role of governments in unlocking the full potential of climate-smart investments. IFC said these plans offer a clear road map for investments that will target climate-resilient infrastructure and offset higher upfront costs through efficiency gains and fuel savings. IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. It has worked with 2,000 businesses worldwide in the past six decades.
Energy plan factors in middle-class society by 2040 BusinessWorld 7th Nov 2016
The Department of Energy (DoE) has factored in the administration’s ambitious goal of lifting a majority of the Filipinos into the middle class by 2040 in drafting its 15-year plan for the energy industry. “What we want to have is an energy plan [that is] fully supportive of that Ambition 2040,” said Jesus T. Tamang, the Energy department’s director for energy policy and planning bureau, in an interview. He said the DoE was targeting to have the 2016-2030 Philippine Energy Plan (PEP) ready by yearend, although it was also awaiting the full development of “Ambisyon Natin 2040,” the government’s 25-year vision for the Philippines as embodied in an executive order signed by the President last month. “Ambisyon 2040, with the collective input ng all sector, will have a clearer idea what really is the demand for energy, not just for power, but all forms of energy. And from there we will adjust the plan,” he added. For now, Mr. Tamang said the DoE’s energy demand assumption is based on the 7% to 8% gross domestic program (GDP) growth target for 2016 to 2018 set by Development Budget Coordinating Committee. From 2019 to 2030, it assumed an 8% the GDP growth ambition of the National Economic and Development Authority, he added. It has also assumed population growth of 1.5% per year from 2016 to 2030. PEP, which sets down the country’s plans and programs in view of energy trends and development, is revised regularly by the DoE. It serves as the department’s action agenda to respond to emerging energy challenges and issues.
Palace: Gina Lopez to attend Morocco climate talks Rappler 4th Nov 2016
Malacañang announced on Friday, November 4, that Environment Secretary Gina Lopez will attend the next world climate conference, COP 22, which opens November 7 in Marrakech, Morocco. "[Secretary] Gina Lopez will attend the Climate Change Meet in Marrakech and will report back to the President in order for him to have a better informed view regarding the Agreement," Palace Communications Secretary Martin Andanar told reporters in a text message on Friday. Andanar is referring to the Paris Agreement on Climate Change, the landmark international climate pact that came into force Friday. The Philippines has yet to ratify the agreement. Climate Change Commission Secretary Emmanuel de Guzman also confirmed to Rappler that Lopez will be part of the country's official delegation in Morroco. But in a text message to Rappler, Lopez said plans are not yet final on her going to Marrakech. "[I] still have to clarify things and have to get more clarity on what the President wants. He feels there [are] a lot of holes in the Paris Agreement, that's why there is a reluctance to sign, but things are positive," she added. Since the country has not yet ratified the Paris Agreement, it will sit only as an observer during the ceremonial first meeting of the Partiesto the Paris Agreement in Morocco. But the country has a "participating party" status in other United Nations Framework Convention on Climate Change sessions and committee meetings. The Philippines has pledged to cut by 70% its carbon emissions by 2030 – a target conditional on assistance from the international community.
Cusi urges ERC to process solar projects in FiT pipeline BusinessWorld 4th Nov 2016
The Energy Regulatory Commission (ERC) must decide whether to award a certificate of compliance to the solar power projects that were endorsed to it by the Department of Energy (DoE) in June under the previous leadership, the Energy secretary said. “It’s there, evaluate it based on the rules that they were given,” DoE Secretary Alfonso G. Cusi told reporters on the sidelines of the market debut of Pilipinas Shell Petroleum Corp. on Thursday. His comments come as the developers await their certificates more than four months after the DoE endorsed 17 solar projects to receive the guaranteed feed-in-tariff of P8.69 per kilowatt-hour (kWh) for 20 years in a race that ended in mid-March. Before them, seven other projects were endorsed to receive a rate of P9.68 per kWh, bringing the total installed capacity of the 24 projects to 525.95 megawatts (MW) or 25.95 MW more than the department’s target of 500 MW. Under the FiT system, qualified developers of emerging renewable sources are offered a fixed rate per kWh of their exported electricity, but excluding the energy for their own use. Their entitlement is taken from a “feed-in-tariff allowance” billed to all on-grid electricity consumers who are supplied with power through the distribution or transmission network. Mr. Cusi clarified that there was no order from the DoE not to process the certificates for the 24 projects. “We have not changed the rules. They’re there. They were endorsed. Process them. If there is a problem, that’s another thing,” Mr. Cusi said. Mr. Cusi also answered questions about his department’s nuclear energy stance after President Rodrigo R. Duterte said that a nuclear power plant was not an option under his term. The secretary said the DoE would always look for “all available options” to ensure energy security, affordability and reliability. He added that he would still have to clarify with the President, who is the “master-planner of the country’s future,” as to the factors he considered for his stand against nuclear energy. -- Victor V. Saulon
Energy lukewarm to a new FIT round The Standard 3rd Nov 2016
The Energy Department is lukewarm to granting a third round of feed-in tariff rates to renewable energy producers which will further increase the cost of electricity in the country. “For now, we don’t want too much…Because FIT, it runs up to 20 years and it’s overburdening our consumers. We want to bring down our electricity rates. How can we bring it down if we keep on giving FIT,” Energy Secretary Alfonso Cusi told reporters. FIT refers to the fixed rates received by renewable energy producers such as solar, wind, biomass and mini-hydro plants. Cusi said when he stepped into office, he promised to look for ways to bring down the power cost in the country, which remained one of the highest in the world. The National Transmission Corp. is now collecting from consumers a feed-in tariff allowance of P0.1240 per kilowatt-hour. Cusi said the department was looking at other sources to pay for the feed-in tariff, which served as incentive to renewable energy developers under the Renewable Energy Law of 2008.
Duterte now open to Paris climate deal philstar.com 3rd Nov 2016
He once described the Paris climate deal as “stupid” and “absurd.” But President Duterte is having a change of heart. While he continued to have “misgivings” about the agreement, Duterte said he would approve the deal if his advisers thought it would be good for the country. “I will follow what my advisers would tell me. If (environment secretary) Gina Lopez would say it’s good, and if the legal adviser says that I should sign, then I will sign,” the President told reporters during his visit to his parents’ tomb in Davao City Tuesday night. Duterte said the Paris agreement has to be studied by his legal team because “there might be some progressive clauses” that can affect the country. “I will see if I have leeway and elbow room to move because the treaty now that is being signed or passed around for signing is binding,” he said. Duterte clarified though that he was expressing his opinion as a lawyer, not as a president, because the paper has not reached him yet. In April, more than 150 countries signed the historic Paris climate deal that aims to limit global warming “well below” two degrees Celsius above pre-industrial levels. World leaders have also promised to step up measures that would limit temperature rise to 1.5 degrees Celsius above pre-industrial levels.
No nuclear power plant during my watch — Rody philstar.com 3rd Nov 2016
President Duterte does not see the country having a nuclear power plant anytime within his six-year term. He said the Philippines can still cope with its energy supply despite daily power outages in some areas in the Visayas and Mindanao. “We’re not yet in the danger zone that we will die if there’s no energy because it runs the machines. But we are not in that danger,” he said. Duterte said the nuclear power plant may be built someday after his presidency. “Not right now because we have to come up with safeguards. Really, really tight safeguards to ensure that there will be no disasters if there is a nuclear leak or explosion somewhere in the nuclear reactors that we will build.” Duterte said Congress and the Filipino people must study the matter carefully. “For after all, if there would be leaks, we will all be leaked and it’s our country, remember that,” he said. Members of Congress visited earlier the Bataan Nuclear Power Plant to assess if the 40-year-old mothballed plant can still be tapped in case the government would shift to nuclear energy.
Financial Services
Financial inclusion gains cited BusinessWorld 11th Nov 2016
The Philippines remained the third best in the world in terms of financial inclusion and one of the best in Asia, with new laws seen to improve security in terms of micro-lending, the Economist Intelligence Unit (EIU) said in a new report. In the 2016 edition of the Global Microscope: the Enabling Environment for Financial Inclusion, the EIU ranked the Philippines as the third best performer among 55 economies, unchanged from the previous years’ position that also cemented its post as the regional leader in Asia. The Philippines scored 78 this year, down three points from its 2015 finish, but remained in the third spot with India. Colombia joined Peru to share the top spot this year, both with an 89 rating. The EIU assesses countries based on “policy and institutional environment” which enables banks and non-bank entities to provide innovative and safe financial products and services to low-income consumers. For the Philippines, the report pointed out new laws in place that point to a sustained policy environment supportive of micro-banking, particularly the implementation of reporting requirements for nongovernment organizations (NGOs) engaged in small-scale lending. Meanwhile, the research unit flagged a global concern on persistent dormancy of bank accounts, saying that authorities must shift focus on encouraging account use among consumers: “Dormancy remains an issue but there is hope that this will change over time as people become more familiar with the possible uses of the accounts.”
Insurance companies’ 2015 tax payments rise BusinessWorld 9th Nov 2016
Total taxes collected from the insurance industry climbed by over a tenth at end-2015 as companies paid large sums in several types of levy, according to data released by the Insurance Commission (IC) yesterday. In a statement e-mailed to reporters on Tuesday, taxes collected from both life and non-life insurance companies reached P19.38 billion in 2015, 12.67% higher from the P17.21 billion worth of taxes collected in 2014, primarily driven by their payments of documentary stamp tax (DST), value-added tax (VAT), final withholding tax, other withholding tax -- such as expanded or creditable withholding tax and withholding tax on compensation -- and premium tax. “Truly, the increase in tax payments arising from the insurance business is not only a reflection of development of the local insurance market, but also a manifestation of how the insurance industry and insuring public exercise their responsibilities to the country as taxpayers,” Insurance Commissioner Emmanuel F. Dooc was quoted saying in a statement.
Banks to change check designs for BSP’s CICS BusinessWorld 8th Nov 2016
Banks will issue new checks to their depositors by next year that will carry additional security features to guard against fraud, as part of the planned migration to an electronic clearing system that would trim check processing time to just a day. Johnny Noe E. Ravalo, assistant governor at the Bangko Sentral ng Pilipinas (BSP), said in a briefing yesterday that banks will have to issue a new design of checks that will carry “embedded security features” through both visible and invisible markings on the papers. The slips will also be bigger at 8 inches by 3 inches, compared to the current design. The Monetary Board in September approved the adoption of the check image clearing system (CICS) which would accept digital images of checks for bank credit, doing away with the need to present physical checks before any transfers are made. The digital clearing is targeted to go live by Jan. 20, 2017, and is expected to trim check processing time to a day from the current span of three to five banking days. Mr. Ravalo said shifting to the CICS is seen to help “improve economic activity,” as it provides faster access to funds across consumers and businesses, but reminded that all issuers must ensure their checks are funded as the faster crediting process could also raise the number of cases of bouncing checks. Emmanuel E. Barcena, PCHC president and chief executive officer, said in the same briefing that post-dated checks of the old design will still be valid despite the migration to the electronic clearing system, but noted that if any old-design checks will be used after June 30, 2017, these should first be presented to the issuing bank before it can be transacted. “We don’t think there will be any significant change or increase in the price of checkbooks,” PCHC’s Mr. Barcena clarified, noting that banks are currently shouldering the cost of acquiring equipment and software necessary for digital clearing.
Metrobank to issue EMV-equipped cards by yearend BusinessWorld 8th Nov 2016
Ty-led Metropolitan Bank & Trust Co. (Metrobank) is set to issue its micro-chip powered cards by yearend, on track to meet the central bank’s deadline of migrating to the EuroPay, Mastercard and Visa (EMV) technology by 2017. In 2014, the Bangko Sentral ng Pilipinas (BSP) issued Circular 859 that required all debit and credit card-issuing companies to shift to the EMV chip technology by Jan. 1, 2017, moving away from the current magnetic stripe. The EMV system -- an international standard -- is deemed “more secure” against fraud as it includes encryption locks and keys to authenticate the card and transactions, protecting data from being compromised. Bankers Association of the Philippines (BAP) President Nestor V. Tan had said that banks may miss the central bank’s deadline for EMV shift, amid conflicting external factors saying that “it’s not necessarily the bank’s fault.”
Food & Agriculture
Trade, agri departments eye single agribusiness roadmap Inquirer 5th Nov 2016
The Department of Trade and Industry and the Department of Agriculture have agreed to integrate their respective agencies’ roadmaps for the agribusiness industry, as a unified blueprint will enable the government to address the challenges faced by the sector. At present, the two agencies have their own versions of industry roadmaps for the agribusiness sectors and its various sub-sectors, such as coffee, cacao, rubber, processed foods/resource-based sectors such as tablea, carrageenan, processed meat, processed shrimp, dried mangoes, condiments, processed fruits and nuts industry, and coco coir industry.
BSP backs removal of QR on rice MindaNews 2nd Nov 2016
The Bangko Sentral ng Pilipinas is backing up moves to remove the import quota on rice. “It will benefit consumers if you do that. Remove the QR (quantitative restriction) so everyone could import, but we should slap tariff,” BSP Deputy Governor Diwa C. Guinigundo told reporters recently. Guinigundo said proceeds from the tariff protection could be spent on improving agricultural infrastructure such as irrigation and drying facilities, and providing better seeding varieties.
Farm output expected to have picked up in Q3 BusinessWorld 11th Nov 2016
The country's agriculture production is expected to have improved last quarter from the preceding three months and a year ago as El Niño fizzled out, officials and economists said in interviews earlier this week, signaling some support for overall third-quarter economic growth. Farm output crawled by a nearly flat 0.04% in terms of value in the third quarter last year as El Niño started to make itself felt. Subsequent quarters saw year-on-year contractions in production, but the fall eased to 2.34% last quarter from January-March’s 4.53% as El Niño waned. The government is scheduled to report third-quarter farm production data on Nov. 15, two days before it releases third-quarter gross domestic product (GDP) results. The agriculture sector has historically accounted for a third of the country’s jobs but contributed only a 10th to GDP. Socioeconomic Planning Secretary Ernesto M. Pernia said last week that the economy could have grown 6.3-7.3% last quarter on increased state infrastructure spending and flat farm output that was still better than previous declines. Looking ahead, Agriculture Secretary Manny Piñol said the year may still end with some contraction due to successive storms that have hit the country this semester. “We will not be able to really expect positive growth for fourth quarter this year due to two consecutive typhoons that hit the country last month,” he said, referring to typhoons Karen and Lawin (known internationally as “Sarika” and “Haima”, respectively) that wreaked at least P11.34 billion worth of damage on the agriculture sector.
New EO on land conversion ban readied for Palace BusinessWorld 9th Nov 2016
The Department of Agrarian Reform (DAR) said it has come up with a second draft executive order specifying that the blanket ban on conversions of prime agricultural land will only affect newly-submitted applications. “We have prepared a second draft... we have clarified there that the moratorium will only focus on new applications,” said DAR Undersecretary for Legal Affairs Luis M.C. Pangulayan in interview with BusinessWorld. Earlier, industry representatives raised concerns about the conversion ban, which they feared would stall their pending applications with DAR. The Undersecretary said that the new draft will identify certain “extensions” in the moratorium based on recommendations raised by agencies during consultations. The earlier proposed executive order for the moratorium, according to Mr. Pangulayan, did not cover certain types of land, giving the President some discretion on the matter. As such, Agriculture Secretary Emmanuel F. Piñol assured that the two-year moratorium on land conversion will not affect agro-industrial businesses. The purpose of the proposed ban is to buy time for the regulator to review whether the entities granted these lands comply with the terms for the development of the land, which were a condition of their award. If found noncompliant, these lands will be brought back to the purview of the DAR to benefit agrarian reform beneficiaries. Based on DAR’s initial data, some 222,000 hectares of agricultural land were converted to residential, commercial, and industrial use between 1988 and June 2016.
Stakeholders convene for bamboo industry road map | BusinessMirror Business Mirror 6th Nov 2016
Key stakeholders in the bamboo sector will meet this month to discuss the implementation of various initiatives in the industry road map meant to boost its competitiveness, both in the local and overseas markets. The Bamboo Industry Development Road Map, approved by the Board of Investments in May this year, identified strategies to develop the bamboo sector and contribute to the Philippine economy and to inclusive growth over the next 25 years. The industry’s short-, medium- and long- term development goals include targets for strengthening the Philippine Bamboo Industry Development Council (PBIDC); establishment of bamboo industry development programs; inventory of resources and enterprises; growth rates for furniture, handicrafts and e-bamboo; and the establishment of community bamboo-based enterprises in the rural areas. It aims to achieve a 10-percent growth in exports in the bamboo furniture and handicraft industries by the end of 2020. The targets also include the use of bamboo for power generation and as raw materials for the production of pulp and paper. By 2040, the country will have available bamboo raw materials to the tune of 80 million culms, more than sufficient to supply the requirements of the various sectors of the industry. The bamboo furniture and handicrafts industries will have grown by 15 percent by that year.
Government draws inputs from farmers, fishermen for development plan BusinessMirror 4th Nov 2016
An official of the Department of Agrarian Reform (DAR) said farmers and fishermen will have the opportunity to submit “uncensored and unadulterated proposals” that will form part of the Philippine Development Plan (PDP) 2017 to 2022. The proposals are among the expected outputs of a two-day rural development summit, which kicked off on Thursday at the Waterfront Insular Hotel in Quezon City. The proposals will be submitted to President Duterte, who ordered the holding of the summit as part of the crafting of the country’s five-year development plan under his administration. Agrarian Reform Undersecretary for Legal Affairs Luis Meinrado C. Pangulayan, head of the organizing committee, said around 300 individuals from the Department of Environment and Natural Resources (DENR), the Department of Agriculture (DA), the DAR and various stakeholders took part in the summit. Essentially, the summit would push the rural sector’s agenda of developing programs and solutions to problems on food, land and environmental protection. The participants will come up with a list of priorities and recommendations on food security, land-tenure improvement and environmental protection and will be submitted to the Office of the President for consideration in the drafting of the PDP 2017 to 2022 by the National Economic and Development Authority (Neda).
Philippines seeks uniform import tax for agriculture PhilStar 2nd Nov 2016
TOKYO – The Philippine government is negotiating with Japan to impose a uniform import tax rate of eight percent on Cavendish bananas and other agriculture products the country exports here, Agriculture Secretary Emmanuel Piñol said. Speaking with reporters on the sidelines of President Duterte’s three-day official trip here, Piñol expressed confidence the government’s request would be acted soon to help boost the country’s agricultural exports. “We are exploring other products such as avocado because the Department of Labor and Employment (DOLE) has started planting avocado in General Santos City,” he said.
Health & Life Sciences
PH lags Asean in healthcare spending Inquirer 7th Nov 2016
The Philippines continues to lag behind its neighbors in Asean in terms of per capita spending on healthcare, due largely to the lack of accessibility to and affordability of medical services in the country. Ivan Alexi R. Arota, Philippine country manager of GE Healthcare, noted the wide gap between the healthcare per capita spending in the Philippines, which stood at $329 as of end 2014, and that of Singapore, whose total expenditure on health per capita was around $4,000 for the same period. Data from the World Health Organization showed Brunei, Malaysia, Thailand and even Vietnam outpacing the Philippines’ per capita spending as of 2014.
ICT
Online hiring slips in September as PHL employers turn cautious Business World 2nd Nov 2016
ONLINE hiring in the Philippines dipped for a second consecutive month in September as employers turned cautious over the Duterte administration’s foreign policy shift towards China and the peso’s plunge against the US dollar, the latest Monster Employment Index (MEI) showed. The Philippines’ MEI slid 2% in September this year from the same period in 2015, employment Web site Monster.com in a statement on Tuesday. “The introduction of new foreign policies and the peso plunge in the Philippines appears to have shaken investor’s confidence, slightly affecting the economy,” Sanjay Modi, Managing Director, Monster.com -- APAC and Middle East, was quoted as saying in a statement.
Spectrum auction planned for third telco player BusinessWorld 10th Nov 2016
The National Telecommunications Commission (NTC) is targeting to auction unused and unassigned frequencies by mid-2017, as the regulator moves to attract a third player to the telecommunications industry. Commissioner Gamaliel A. Cordoba said the NTC will offer the portfolio of spectrum in one bundle but will still have to discuss the Terms of Reference with the Department of Information and Communications Technology (DICT). “We plan to auction it as one whole [because] if you bid it out piecemeal the one who will get it will also not be able to compete... our idea is one group should be able to get it to enable it to become a third player,” Mr. Cordoba told reporters in a chance interview at the 1st DICT Summit. “Maybe we’ll do that next year. We’ll try to finish it by the middle of next year,” he added. The frequencies on NTC’s inventory include 3G frequency of Connectivity Unlimited Resources Enterprise (CURE) surrendered by PLDT, Inc. after buying out Digital Telecommunications Philippines in 2011, as well as the frequencies returned by PLDT and Globe Telecom, Inc., after their recent joint acquisition of San Miguel Corp.’s (SMC) telco assets -- 20 Megahertz (MHz) in the 700 MHz, and other radio frequencies 2,500 MHz, 3,500 MHz bands. The NTC chief there is demand for the unassigned frequencies with more participants “interested to become the third player.” Among the local players who expressed interest is Converge ICT and NOW Telecom, Mr. Cordoba said. DICT Secretary Rodolfo A. Salalima has said his department will do an inventory of all existing spectrums, to be categorized by availability and subjected to reassignment if found to be underutilized.
DICT, telecom firms back more telecommuting BusinessWorld 10th Nov 2016
The Department of Information Communications and Technology (DICT) and its stakeholders will submit to the government a draft executive order (EO) proposing the use of telecommuting and other ICT-based solutions to help ease road congestion in Metro Manila and elsewhere in the country. Under the EO the use of ICT-based solutions and telecommuting will be adopted as a state policy including the use of ICT as a tool to manage and mitigate the problem of road congestion. The EO mandates the adoption and use of ICT as a tool to manage and mitigate the problem of traffic congestion in the country; the implementation of a policy of telecommuting at work and in schools through the adoption and use of ICT solutions at home to decrease the number of commuters; the institutionalization of other related and relevant transportation demand-management strategies and incentives, among others. It is also seeks to build the capacities of public sector institutions and their personnel in the adoption of telecommuting and the use of ICT to improve planning, management, delivery of functions and monitoring and evaluation, among others. The EO shall be mandatory for government agencies, government financial institutions, government owned and controlled firms, and public schools. The following ICT solutions will be adopted -- broadband as the minimum Internet connectivity standard; cloud computing as the preferred ICT deployment method; use of remote access ICT systems in order to allow officials, employees, and workers to access their work files outside of the office, provided that proper security measures are in place; and use of ICT systems that are accessible via fixed and mobile devices, to facilitate telecommuting. The Executive has earlier asked Congress to grant emergency powers to President Duterte to address the traffic and congestion woes in Metro Manila and other highly urbanized areas in the country which Congress targets to approve by yearend.
Foreign investors in national broadband plan? Manila Bulletin Business 9th Nov 2016
The new Department of Information and Communications Technology (DICT) is batting for a P77 to P199-billion national broadband plan built from scratch and open to the possibility of foreign joint venture partners. “But we’re still waiting for President Duterte to decide on the kind of broadband plan (we’ll undertake),” DICT Secretary Rodolfo A. Salalima told reporters during the First DICT Summit held Nov. 8, 2016 at the Makati Shangri-La Hotel. So far, the government has three options for creating a national broadband network, he explained. The first is to put up a primarily physical infrastructure in the countryside. The second, which DICT recommended to the Cabinet last month, is to put up a working infrastructure in the countryside, specifically in areas where it will be too costly for private operators to build, and then lease the infrastructure to private telcos in exchange for working services. The third option is for government to be a third party operator, although this will need a feasibility study and will in fact be a reversal of a law passed in 1995 (RA 7925) privatizing the services of utilities such, as water and telecommunications. Although the preferred second option can amount to as much as P199 billion, the cost can be slashed if the government makes use of existing passive infrastructure.
Broadband network to tap NGCP’s right-of-way BusinessWorld 9th Nov 2016
The Department of Information and Communications Technology (DICT) is looking to tap the existing footprint of the National Grid Corporation of the Philippines (NGCP) for its planned national broadband network. Although the newly-established department is still awaiting the response from Malacañang on its preferred type of broadband network, Secretary Rodolfo A. Salalima has his sights set on the possibility of utilizing NGCP transmission routes for its fiber optic infrastructure. DICT submitted to President Rodrigo R. Duterte on Oct. 3, a proposal detailing three options for the national broadband network. The first option is putting up a “purely physical infrastructure in the countryside, were the services of a telco will be needed. The second one -- which Mr. Salalima personally recommended -- is a working infrastructure, also in the countryside, where the government will build a “working physical infrastructure” -- partly run by the DICT, “but because this maybe hybrid, the services of the telcos, even their physical components maybe part of that broadband.” The third option is for the government to become a third-party operator, he added. Earlier this year, the Energy Regulatory Commission said making use of the NGCP network as an Internet backbone will be costless to the government because the transmission lines are still state-owned. The project, flagged by DICT as one of its priorities, is the government’s latest attempt at a similar plan since the $329.5-million National Broadband Network deal with China’s state-owned Zhong Xing Telecommunications (ZTE) Corp., which was abandoned in 2007 due to a corruption scandal. A national broadband plan is seen to address the public demand for faster and affordable Internet which has been tagged as one of the world’s slowest. Internet service in the Philippines is also one of the most expensive in the world, averaging at $18 (P840)/mbps compared to the global average of $5 (P230)/mbps. -- Imee Charlee C. Delavin
Declining US investments won’t affect BPOs-Pernia Inquirer 4th Nov 2016
Despite President Duterte’s “cutting” ties with the United States, business process outsourcing (BPO) firms mostly serving the United States are expected to adopt a business as usual stance, although as American investments in the country may decline, according to the country’s chief economist. “I think the FDI [foreign direct investment] from the US has gone down. There are already reports, although China’s FDI [in the Philippines] is picking up. US FDI [in the country] has been on a downtrend,” Socioeconomic Planning Secretary Ernesto Pernia told reporters on Thursday. As the Philippines pivots to China, the government nonetheless will ensure that potential investors from the mainland are not corrupt to avoid repeats of controversial deals in the past, such as the NBN-ZTE and the North Rail, said Pernia, also the director general of the National Economic and Development Authority (Neda). Despite expectations of higher FDI flows from China, Pernia said these could not compensate for a decline in US investments in job-generating projects. The Neda chief expressed optimism there would be no sharp drops in FDI from the United States, as American investors had been reassured that they could continue doing business here. In the case of BPO companies, “they would not pull out,” he said. The BPO industry expects to generate $25 billion in revenue and employ 1.3 million this year. Over the next six years, the industry is looking to double these numbers.
Infrastructure
7 more infra projects up for Neda Board nod Inquirer 9th Nov 2016
DAVAO CITY—President Duterte is expected to approve seven infrastructure projects when he convenes the National Economic and Development Authority (Neda) Board by the middle of this month, Socioeconomic Planning Secretary Ernesto M. Pernia said Tuesday. Pernia, who is also director general of state planning agency Neda, told participants of the Philippine Development Forum that the Duterte administration would have approved at least 16 projects by yearend, further claiming that they approve projects faster than the previous administration.
Chinese, Filipino steel firms enter $200-M deal Inquirer 7th Nov 2016
Chinese firm SIICGM Development Ltd. is investing $200 million in the Philippine steel industry, in partnership with local steel trader Mannage Resources Trading Corp. (MRTC), to capitalize on the Duterte administration’s plan to ramp up spending on vital infrastructure. The planned investment comes amid an apparent thaw in the once frosty relations between the Philippines and China due to a territorial dispute over parts of the South China Sea. The SIICGM-MRTC partnership aims to break into the lucrative reinforcing steel bars market just as the government announced its plan to raise infrastructure spending to the equivalent of 7 percent of the gross domestic product. The ramped up spending will be felt as early as next year with the Department of Budget and Management announcing a record P891-billion budget for the construction of airports, seaports, major roads and bridges, and farm-to-market roads.
Gov’t to spend P8 trillion for infrastructure projects Inquirer 4th Nov 2016
Cabinet members on Thursday called on Congress to grant President Duterte emergency powers on transportation projects as they presented the administration’s planned infrastructure program to spur development and ease traffic congestion in the country. Without the emergency powers, the projects, which include new roads, bridges, railways, and the improvement of airports, will be delayed, Tugade said. “Is the population willing to wait some more?” he said at a press briefing in Malacañang.
BRT, flood control projects to tap financing from AIIB BusinessWorld 11th Nov 2016
A Bus Rapid Transit (BRT) and a Metro Manila flood control project will be the first projects to be presented to the Asian Infrastructure Investment Bank (AIIB) once the Philippines confirms its membership in the Beijing-backed lender. “Right after ratification we will be asking the NEDA to already include for proposal two projects: the EDSA BRT project as well as the flood control project for Metro Manila,” said National Treasurer Roberto B. Tan during the Senate committee meeting on the Articles of Agreement of the AIIB treaty held yesterday. Both projects are in the National Economic and Development Authority (NEDA)’s pipeline. The BRT line will span Quezon Avenue and España in Quezon City and Manila and is estimated to cost around P17 billion to 20 billion pesos. The transport project has been endorsed by NEDA for financing by the Asian Development Bank and the World Bank. AIIB offers a 0.75 to 1.4% lending rate to developing countries. The ADB has identified transport, water, urban development and renewable energy projects as among those that could be co-financed with the AIIB. The private sector may also tap into the funds of the AIIB for public-private partnership (PPP) projects, with the AIIB active in PPP financing in Indonesia, Bangladesh and Myanmar. The Philippines, as a prospective member of the AIIB, has until the end of the year to ratify its articles of agreement. Approximately P4 billion is provided for in the 2017 national budget to be paid as a part of the Philippines’ capital contributions to the AIIB.
Gov’t zeroes in on investment curbs BusinessWorld 9th Nov 2016
Lifting foreign investment restrictions and fast-tracking public infrastructure projects are among steps the Duterte government will immediately take as it sets out to get 1.5 million Filipinos out of poverty annually until 2022, the Finance chief said yesterday. Speaking at the Philippine Development Forum (PDF) 2016 at SMX Convention Center here, Finance Secretary Carlos G. Dominguez III said, “there is a window that is opening” in May 2017 where the government can “administratively remove” certain restrictions. Mr. Dominguez did not spell out what these possibilities are but assured his audience of multi-sectoral decision-makers -- including representatives of foreign business chambers -- that “whatever we can do administratively, we will do.” The Philippine Competition Commission (PCC) is working on a study that will include recommendations on how to ease foreign business restrictions. PCC Chairman Arsenio M. Balisacan announced in a news conference in September that the initial assessment will be ready by the end of the year and will be used for drafting the Philippine Development Plan (PDP) 2017-2022. The two-day forum here is likewise intended to gather inputs for the PDP 2017-2022 from leaders of the business sector, representatives of national and local governments, development partners, academe and civil society organizations. In the same forum, Socioeconomic Planning Secretary Ernesto M. Pernia reiterated earlier pronouncements that the government will be aggressive in rolling out infrastructure projects to induce economic activity. Public infrastructure spending is proposed to increase 13.79% to P860.7 billion equivalent to 5.4% of GDP under the P3.35-trillion 2017 national budget that has just cleared the House of Representatives and is about to be taken up in the Senate from P756.4 billion, or 5.1% of GDP, this year.
Commuters’ group: P8-trillion emergency power projects reek of corruption | BusinessMirror Business Mirror 8th Nov 2016
AN umbrella network of road users has been allowed by the Commission on Appointments (CA) to present its case against the confirmation of Transportation Secretary Arthur P. Tugade. Road Users Protection Advocates (Rupa) Chairman Ray Junia said Tugade’s dismal performance, along with his questionable emergency-powers package of P8-trillion projects that will no longer undergo public bidding, will only worsen the traffic situation while enriching the Department of Transportation (DOTr) officials who stand to benefit from negotiated contracts. “Consumers have all the reasons to fear that the emergency powers being sought. It is nothing but a grand scheme to commit more corruption,” he added. He said Rupa will take the opportunity to prove its claim that Tugade is not only unfit for the job, but his confirmation will serve only the interest of oligarchs whom President Duterte has vowed to fight. He said the worsening traffic situation in Metro Manila and in other urban areas has already reached the level of a “crime against the people.”
Reforms needed to sustain economic growth – EIU philstar.com 6th Nov 2016
The Duterte administration cannot just simply “build, build, build” infrastructure without reforms that will help both national and local governments to spend funds efficiently, the Economist Intelligence Unit (EIU) said. “Despite meaning well, the government will need to undertake other administrative reforms if it is to find success in ramping up its efforts,” EIU analysts Miguel Chanco and Roxana Slavcheva said in a report. While the government needs to fill a huge infrastructure gap, the EIU warned the challenge lies more in “reforming flaws in disbursing agencies” that haunted the previous government’s similar program. Local governments should also be prioritized, the report said, noting that they also tend to have “weak procurement capacity and arduous permitting procedures.” The article, titled “Decongesting the Philippines,” was released Oct. 24, a few days before the government unveiled its infrastructure program that brought together five agencies to pursue road, rail and port projects and even “green” cities. Dubbed “Build, Build, Build,” President Duterte’s infrastructure program promised to bring some P8 trillion worth of projects into the construction stage in two years and finished in four years. But EIU’s Chanco and Slavcheva said project approval is one thing, while spending for them is another. “Successful implementation of bureaucratic reforms will be crucial in ensuring this expanded budget is spent,” they said.
Philippine government reveals plan to build more roads, rails, bridges Auto Industriya 4th Nov 2016
The Duterte administration has a new battlecry and it is "Build, Build, Build." With the goal of decongesting Metro Manila and various other cities around the Philippines, a comprehensive, nationwide infrastructure program is set to be implemented beginning 2017 with an unprecedented budget of 5.4% of the country’s Gross Domestic Product (GDP). In a show of unity and cooperation between the various agencies tasked to spearhead the construction of key infrastructure projects, the press briefing was attended by Department of Transportation (DOTr) Secretary Arthur Tugade, Department of Public Works and Highways (DPWH) Secretary Mark Villar, National Economic and Development Authority (NEDA) Director General Ernesto Pernia and the president and CEO of the Bases Conversion and Development Authority (BCDA) Vivencio Dizon.
DPWH: 5.4% of GDP to go to infrastructure Manila Bulletin News 4th Nov 2016
The government will set aside 5.4 percent of the country’s gross domestic product (GDP) for its infrastructure projects, the Department of Public Works and Highways (DPWH) revealed. DPWH Secretary Mark Villar said this is the highest in the last 47 years and unprecedented in past administrations. “At our highest, a maximum of 3.2 percent was pegged for infrastructure spending. This administration would like to raise the bar and address the deficit. It is the only way we could solve both traffic and flooding,” Villar said. Citing a study conducted by the International Monetary Fund (IMF), Villar said that a sustained increase in public infrastructure spending to five percent of GDP would add a total of five to six percent to GDP after 15 years.
Chinese investors focused on demand-driven projects -- Pernia Business World Online 4th Nov 2016
Socioeconomic Planning Secretary Ernesto M. Pernia said deals signed in China by President Rodrigo R. Duterte indicate Chinese investors’ preference for demand-driven projects in the Philippines. Mr. Pernia, who is also director-general of the National Economic and Development Authority (NEDA), accompanied the President on the China trip, where Mr. Duterte signed 13 memoranda of understanding (MoUs) worth $16 billion with Chinese President Xi Jinping. Mr. Pernia said that the MoUs include $6 billion worth of Official Development Assistance (ODA) and a $3-billion credit line from state-run Bank of China. Mr. Pernia said that the $6 billion worth of ODA will go to sectors such as infrastructure and agriculture as well as Information and Communications Technology (ICT). The $3 billion, on the other hand, is intended to help finance micro-, small- and medium-enterprises. When asked what specific projects will be implemented through the ODA, Mr. Pernia said none was mentioned at the meetings but added that the Chinese are inclined towards demand-driven investments. “They’re offering the projects but we want the projects to be demand-driven instead of supply driven. The Chinese are very aggressive. They will say you need this thing here, you need this thing there, but if it’s not demand-driven then it’s not what we need.” Mr. Pernia assures that the government will have a counterpart committee in accrediting the projects given the controversies involving Chinese companies working with the Philippine government in the past. “We’re going to make the ICC. We also asked them, the Chinese side, to have a counterpart agency that would accredit companies so we don’t repeat the ZTE and North Rail debacle.” He added that the Investment Coordination Committee (ICC) should be in place soon to work side by side with the Chinese in accrediting suitable companies.
Airport construction to pick up under Duterte The Manila Times 2nd Nov 2016
AIRPORT construction in the Philippines is expected to pick up between 2019 and 2022 driven by the current administration’s focus on countryside infrastructure development, Fitch-owned BMI Research said. “We expect airport construction to pick up following a slowdown over the past several years, as the Duterte government focuses on infrastructure development outside of the Metro Manila region and as strong passenger growth places capacity pressures on existing facilities,” it said in an industry analysis released Tuesday. BMI said it forecasts growth in the Philippines’ airports segment to pick up between 2019 and 2022 as construction begins on a number of upcoming projects, and expects real growth in the segment to average 4.9 percent over the same period.
Manufacturing
Moody’s sees Sept. factory production still robust BusinessWorld 7th Nov 2016
Philippine factory output likely sustained double-digit growth in September as demand in the country for locally made goods more than made up for subdued consumption abroad, Moody’s Analytics said, citing in particular a marked recovery in food production. “Philippine industrial production growth will likely maintain its blistering pace, rising 12% year on year in September, compared with 13.6% in August. Rapid growth in domestic investment and consumption has been the main driver,” the unit of the credit rater Moody’s Investors Service said in a market forecast sent over the weekend. If realized, September’s performance would be the fourth straight month of double-digit growth since June’s 10.5%, according to data from the Philippine Statistics Authority (PSA). The Moody’s estimate also takes off from a 3% expansion recorded a year ago, but would slip from the 13.5% growth seen last August. The PSA is scheduled to release preliminary manufacturing data for September this Thursday. Increased production of machineries and basic metals led the growth in factory output volume in August, having jumped by 44.7% and 40.8%, respectively. The PSA also noted big gains for other industries, namely: rubber and plastic products (40.8%), transport equipment (38.7%), beverages (16.1%), wood and wood products (13.2%), tobacco products (11.9%), as well as footwear and wearing apparel (10.9%). Philippine readings under IHS Markit’s purchasing managers’ index (PMI) have consistently reflected expansion since the country started being covered by the survey -- conducted for Nikkei -- last January. In September, the country saw a record-high 57.5 PMI score that signalled strong, continued expansion, reflecting “minimum” impact from the change in national administration last June 30. The Philippines became a regional outlier in October -- though with a lower PMI of 56.5 -- with only Vietnam being the only other Southeast Asian country that saw an above-50 PMI reading that month at 51.7.
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