| Regional Affairs
Why the Unclos is important to the West Philippine Sea dispute Philippine Daily Inquirer 29th Jul 2015
Supreme Court Senior Associate Justice Antonio Carpio has warned of potential repercussions should the United Nations Convention on the Law of the Sea (Unclos) decide that it has no jurisdiction on the case filed by the Philippines over the West Philippine Sea (South China Sea) dispute against China. “If we don’t apply the Unclos, the constitution for the ocean and seas of our planet cannot also apply to any maritime dispute in the rest of the oceans and seas of the world,” he said at a forum sponsored by the Department of National Defense on the West Philippine Sea at Camp Aguinaldo on Wednesday. “It will be the beginning of the end of Unclos. The rule of naval canon will prevail in the oceans and seas of our planet. There will be a naval arms race among coastal countries. It is happening now, just imagine if the tribunal says we don’t have jurisdiction, the nine-dash line is valid,” he added.
South China Sea: Philippines v. China The Diplomat 27th Jul 2015
The Philippines v. China case before the arbitral tribunal set up under Annex VII of the 1982 United Nations Convention on the Law of the Sea (UNCLOS) has attracted worldwide attention for a number of reasons, one of which being China’s refusal to participate in the proceedings, which were initiated by the Philippines. The non-appearance of a party before an international court or tribunal is not uncommon, nor is this the first time a party has chosen not to appear before an UNCLOS dispute settlement body. In 2013, Russia elected to stay away from both provisional measures proceeding before the International Tribunal for the Law of the Sea (ITLOS) and currently, as things stand, it is not appearing before the Annex VII arbitral tribunal in the Arctic Sunrise case initiated by the Netherlands.
China urges Philippines to return to bilateral talks on disputed sea Reuters 22nd Jul 2015
China called on the Philippines on Wednesday to withdraw a case it has filed at a U.N. arbitration tribunal over rival claims in the South China Sea and return to bilateral negotiations. China has for years insisted that disputes with rival claimants to the South China Sea be handled bilaterally. But this month, its claims came under international legal scrutiny for the first time when the Permanent Court of Arbitration in The Hague began hearing a suit the Philippines filed in 2013. China has refused to take part in the case.
National Affairs
Noy bids goodbye in two-hour SONA Manila Standard Today 28th Jul 2015
President Benigno Aquino III bid farewell and thanked all his Cabinet members Monday in a two-hour State-of-the-Nation Address (SONA) that will be his last before he leaves office in June 2016. Despite saying that he was under the weather, Aquino spent two hours and nine minutes on an address that again attacked his predecessor, highlighted the gains of his reform program and gave thanks to 86 people—including his Cabinet secretaries, the Palace staff and even his maid. While he acknowledged the presence of opposition Vice President Jejomar Binay at the start of his speech, he did not credit him for the work he did as a housing czar and presidential adviser on overseas workers until he broke with the administration in June.
House fiscal incentives bill to be ready by end of 2015 Business World 28th Jul 2015
The House of Representatives will have its version of the fiscal incentives rationalization bill ready by year’s end, a senior legislator said, committing to deliver on one of five priority measures sought by President Benigno S. C. Aquino III in his final State of the Nation Address (SONA). At the SONA on Monday, the President pressed Congress for the approval of the proposed law that would craft uniform tax perks package for all companies, with the intention of leveling the playing field across all sectors. Talks to rationalize the grant of tax perks for businesses operating in the Philippines have been stalled before the House since last year, with legislators seeking to draft a single incentives scheme to replace all existing grants handed out by investment promotion agencies (IPAs).
Noy seeks OK of ban on political dynasties Manila Standard Today 28th Jul 2015
President Benigno Aquino III on Monday called on Congress to pass an anti-dynasty measure, the proposed Bangsamoro Basic Law and the P3-trillion 2016 national budget during his sixth and last State of the Nation Address at the Batasan Pambansa Complex in Quezon City. While not mentioning Vice President Jejomar Binay and his children by name, Aquino appeared to be referring to them in his call for the passage of the anti-dynasty law. “Why would we make a law in order to stop people from serving the country? But I think it is wrong to give the opportunity to corrupt families or individuals to stay in power for life. It is time to pass an anti-dynasty law,” Aquino said.
Congress pushes for passage of economic measures Sun.Star 27th Jul 2015
House Speaker Feliciano Belmonte Jr. urged his fellow lawmakers on Monday to finally approve the proposed economic amendments in the 1987 Constitution. During the opening of the Congress’ third regular session, Belmonte once again reminded his colleagues on the importance of approving the Resolution of Both Houses (RBH) No.1, calling it “the best strategy to ensure that no Filipino will be left behind.” “It is now in the same spirit that I urge you dear colleagues to ensure that we finally pass Resolution of Both Houses No. 1," said Belmonte, the resolution's author. Belmonte said that the proposed economic amendments “will reverse the de-industrialization and the de-agriculturization” of the country’s economy.
Aquino Touts Successes in Bid to Be Philippines’ 2016 Kingmaker Bloomberg 27th Jul 2015
Philippine President Benigno Aquino boasted of record revenue and investment flows and a resurgent manufacturing sector during his administration, as he prepares to endorse a candidate for next year’s election. In his final state of the nation address to congress on Monday, Aquino, 55, asked lawmakers to pass bills creating a new Muslim autonomous region in Mindanao and ban political dynasties. He also sought approval for the 2016 budget and bills reforming law-enforcement officer pensions and a government incentive program. “We know corruption was the root of our suffering, that’s why our cry was ‘Nobody will be poor if nobody’s corrupt,’” Aquino, who won on an anti-corruption platform in 2010, said in a speech that lasted more than two hours. “If we return to the crooked path, we will be condemned to wait for nothing.”
PNoy OKs landmark Philippine Competition Act, Cabotage Law amendments The Philippine Star 21st Jul 2015
President Benigno Aquino III on Tuesday signed into law the long-sought Philippine Competition Act and the amendments to the Cabotage Law. Aquino approved the two laws during a ceremonial signing in Malacañang this morning attended by Senate President Franklin Drilon, House Speaker Feliciano Belmonte, other lawmakers and businessmen. The president first signed into law Republic Act 10667 or the Philippine Competition Act which seeks to promote free and fair competition in trade, industry and all commercial economic activities. The new law penalizes anti-competitive business behaviors, abuses in dominant positions and anti-competitive mergers and acquisitions.
PNoy to sign 2 'game-changing' economic bills on Tuesday The Philippine Star 20th Jul 2015
President Benigno Aquino III is expected to sign into law tomorrow two "game-changing" business measures that will help boost economic growth. Aquino will approve the landmark Fair Competition Act and the Foreign Ships Co-Loading Act in a ceremonial signing in Malacañang at 10 a.m. Tuesday, according to the president's cousin, Sen. Bam Aquino. A sponsor of both bills, the younger Aquino met with the president at the Palace on July 7. With the anti-trust measure or the Fair Competition Act approved, Aquino said the country will finally have its own law that will level the playing field for all businesses by penalizing anti-competitive agreements and abuses of dominant players.
Philippine social spending must be supported by improvements in tax performance -- UNESCAP Business World 19th Jul 2015
The Philippines must raise its tax collection performance if it is to achieve a recommended social spending allocation of 8% of gross domestic product (GDP) from 2013 to 2030, a United Nations (UN) agency said in a report. The 8% level for the Philippines ensures access to basic services such as health care and safety nets for children and the elderly, the UN Economic and Social Commission for Asia and the Pacific (UNESCAP) said in its latest report. “Promoting social investment is a fundamental pillar of inclusive and sustainable development, developing Asia-Pacific countries have made substantial progress in implementing the social protection floor (SPF),” according to its June report, “Financing for Protection: From Agenda to Action on Sustainable Development in Asia and the Pacific”.
ASEAN
PHL on track toward ASEAN economic integration – DTI GMA News 22nd Jul 2015
The Philippines is now equipped for the economic integration of the Association of Southeast Asian Nations (ASEAN) this year, according to the Department of Trade and Industry (DTI). “Philippines is very well positioned for the ASEAN economic integration because the country has a more liberalized environment compared with its neighbors,” said DTI Secretary Gregory Domingo during a business forum organized by The Manila Times on Wednesday. The ASEAN Economic Community will formally come into force by the end of the year. It facilitates free trade in goods and services and the free flow of skilled labor and investments across member states including Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, and Vietnam.
Customs
Customs modernization delays hurt competitiveness, Lina says Business World 27th Jul 2015
Customs Commissioner Alberto D. Lina has flagged the risk of deteriorating Philippine competitiveness within the Association of Southeast Asian Nations (ASEAN) with further delays in the passage of the Customs Modernization and Tariff Act (CMTA). Mr. Lina called on Mindanao exporters to help push the Senate to hasten the CMTA’s approval in view of the full implementation of the ASEAN Economic Community by December. “The CMTA is near plenary so please help us,” Mr. Lina said during the Mindanao Exporters Congress here last week. Senate President Franklin M. Drilon, in a statement issued yesterday, cited the passage of the CMTA as one of the upper chamber’s priorities before the end of the current 16th Congress.
BoC set to mark all fuel products Manila Standard Today 26th Jul 2015
The Bureau of Customs expects to generate $300 million in new revenues from new proposed markings on all petroleum products, Customs Commissioner Alberto Lina said over the weekend. Lina said the agency wanted to end smuggling of fuel products through the broader fuel markings. Lina told reporters in a round table discussion last week he wanted to curb smuggling by putting markings on all items, including those exempted from paying duties, with no exemptions on imported and locally refined products. “If the fuel product is not marked, it means its is smuggled,” he said. Lina said local refineries would not be exempted in the proposed fuel-marking system.
Customs repeals no-inspection policy at export loading stage Business World 23rd Jul 2015
In Customs Memorandum Order (CMO) no. 20-2015, four types of exports are subject to inspection when cargoes are loaded into containers: those forming part of import quotas in other countries like sugar and garments; items banned for export; logs, copper and coffee; and shipments covered by international agreements to which the Philippines is a signatory. Thus, BoC said the provision in CMO 04-2015 which removes the inspection requirement on all export cargoes has been repealed. “The presence of customs inspectors during the actual stuffing of containers is required on export cargoes mentioned... and those under alert or hold order duly issued by customs authorities,” the issuance stated.
Customs chief admits 2015 collection goal unattainable Philippine Daily Inquirer 22nd Jul 2015
Commissioner Alberto D. Lina has conceded that the Bureau of Customs (BOC) could collect only up to P400 billion in import duties and taxes this year, with foregone revenues from cheaper oil expected to hit P75 billion. Lina told reporters on Monday night that the “doable” collections figure for 2015 would be P390 billion to P400 billion, or below this year’s target of P436.6 billion. The customs chief said the foregone revenues would come mainly from imported petroleum products, citing that global oil prices might hit as low as $50 per barrel before the end of this year. This was despite the volume of oil imports growing to date, he said.
Customs may miss 2015 revenue target The Philippine Star 22nd Jul 2015
The Bureau of Customs (BOC) said its 2015 revenue collections may miss the P436.59-billion target due to weak oil prices. Customs commissioner Alberto Lina told reporters only P400 billion in revenue collections may be “attainable” this year. He said the BOC is expecting to incur about P75 billion in losses due to the declining prices of oil in international markets. Tax revenues from oil accounts for 30 percent of the bureau’s total annual income.
Aquino signs into law Co-Loading, Competition Acts PortCalls Asia 21st Jul 2015
President Benigno Aquino III on July 21 signed two landmark legislation – the Foreign Ships Co-Loading Act and the Philippine Competition Act, the latter considered the longest-running measure in Congress, taking 25 years before hurdling the legislative mill. Republic Act (RA) No. 10668 or “An Act Allowing Foreign Vessels to Transport and Co-Load Foreign Cargoes for Domestic Transshipment and For Other Purposes” allows foreign shipping lines to dock at multiple Philippine ports and co-load import and export cargos cleared by the Bureau of Customs.
ASEAN integration requires liberalization of PH maritime industry — gov’t study PortCalls Asia 20th Jul 2015
The Philippine government needs to implement reforms geared toward a more liberalized and competitive maritime industry to realize the benefits from the Association of South East Asian Nations (ASEAN) Economic Community (AEC) integration, according to a government-owned think tank. In its most recent discussion paper entitled “Furthering the Implementation of AEC Blueprint Measures”, the Philippine Institute for Development Studies (PIDS) said the cabotage policy, the 60-40 foreign equity rule, and the problematic ports regulatory structure remain hindrances in the Philippines’ compliance to the 70% allowable foreign equity commitment under the AEC. “The entry of foreign maritime companies is still restricted by the constitutional rule on the 40-percent foreign equity limit,” PIDS said, but acknowledged that changing the Constitution would be a “highly contentious issue and requires tedious legislative process.”
8,000 Customs bureau brokers may lose jobs Manila Times 19th Jul 2015
Thousands of professional Customs brokers are up in arms against a vigorous multinational lobby for passage of a measure in Congress that they claim will render them “extinct.” In an interview with The Manila Times, officials of the Philippine Society of Filipino Customs Brokers Inc. (The Society), which is affiliated with the Chamber of Customs Brokers Inc. (CCBI), assailed specific provisions of House Bill 5525 or the Customs and Tariff Modernization Act (CMTA) that aim to remove them from business. They argued that the bill, if passed, would have serious economic ramifications. “We have about 8,000 members nationwide. If this law is passed, it will be detrimental not only to us or our families but to students and educational institutions that are offering Customs-related courses,” Roberta Riga, a licensed Customs broker and former president of CCBI, said.
Customs taps PLDT for Google work app The Philippine Star 19th Jul 2015
The Bureau of Customs (BOC) has partnered with a unit of Philippine Long Distance Telephone Co. (PLDT) to improve its internal collaboration and information dissemination. In a statement, IP Converge Data Services Inc. (IPC) said it is providing the Google Apps for Work to the BOC. Through the service, Google sites would be used to create an internal website for updates and new information accessible only to authorized personnel of the BOC. The BOC can likewise use other features such as Google Drive to store documents such as memos and announcements that its employees can access anytime on any device.
PLDT’s cloud firm expected to improve BOC productivity Business Mirror 17th Jul 2015
IP Converge Data Services Inc. (IPC), a subsidiary of Philippine Long Distance Telephone (PLDT) Co., has tapped by the Bureau of Customs (BOC) for its cloud-computing services. Through IPC, the BOC is now implementing Google Apps for Work that will improve and fast-track its internal collaboration and information dissemination. “Google Apps for Work allows real-time collaboration, enabling multiple users to work on a single document at the same time. This will eliminate multiple versions of one document, improve tracking and accountability, as well as cutting down time in finalizing reports,” IPC Director of Sales Che Lazaro said.
Philippines Customs officials to start revenue collection Customs Today 17th Jul 2015
A revamp of district collectors and other key officials of the Bureau of Customs has started. In a statement, the Public Information and Assistance Division (PIAD) of the Department of Finance-attached agency said Wednesday the revamp was intended to improve the bureau’s performance and meet its revenue collection targets. The revamp, which covered 20 BOC personnel, including retired general Bonifacio de Castro, district collector at Subic Freeport in Zambales, was also “in compliance with Civil Service Commission rules and regulations on reassignments and designations,” the PIAD said.
Philippines customs’ collection increases 19.3% in imports Customs Today 16th Jul 2015
The Bureau of Collections (BOC) grew its collections by 14.3 percent to P31.2 billion in June from P27.3 billion a year ago, surpassing its target for the period. The latest figure is also 6.4 percent higher than the bureau’s P29.3 billion collection goal for the period. “This is only the second time this year that the BOC exceeded its monthly cash target. With the support of our men and women in the bureau, I trust the Aquino administration’s reforms will result to reaching our monthly targets consistently,” Customs commissioner Alberto Lina said. The increase in collections was due to the 19.3-percent climb in the volume of imports during the period, the BOC said.
Defense & Security
Is the Philippines’ Military Modernization Dead in the Water? The Diplomat 28th Jul 2015
A few weeks before President Benigno Aquino’s delivered his last State of the Nation Address on 27 July 2015, the Philippine Daily Inquirer published an article criticizing the Philippine Department of National Defense (DND) for scuttling the Armed Forces of the Philippines’ (AFP) planned acquisition of a shore-based missile system (SBMS) as part of the build-up of the country’s territorial/maritime defense capabilities. Instead of the missile system, the DND opted for the purchase of marksmen rifles, long range sniper weapons system, and protective gears for the Philippine Army’s (PA) counter-insurgency operations. The DND and the Israeli Ministry of Defense spent several years negotiating the SBMS deal, which is worth Php6.5 billion (estimated US$120 million).
Experts Apprehensive About Prospects of AFP 'Minimum Credible Defense Posture' InterAksyon 24th Jul 2015
Can the Armed Forces of the Philippines (AFP) attain a "minimum credible external defense posture" as promised by President Aquino before he steps down in 2016? Aquino is set to give his fifth and last State of the Nation Address (SONA) this coming Monday, and part of his report, as expected, is to update his "Bosses" on the current state of the AFP in the face of China's aggressive reclamation activities in the West Philippine Sea (WPS). In some of his previous SONA, Aquino assured the nation of the highest level of security from the external defense establishment. But, up to now, he has not yet signed the proposed revision of the AFP Modernization for 2013-2017 with a total budget of P60.1 billion, which is also riddled with realignments, most especially the P6.5 billion worth of Shore-based Missile System (SBMS). "[The] remaining time is too short. Big-ticket items take a long time to implement," former AFP chief of staff Alexander Yano responded when asked of his personal opinion.
P60-B AFP projects lack Noy signature The Philippine Star 22nd Jul 2015
At least 28 projects worth over P60 billion under the Armed Forces Modernization Law have been delayed for lack of President Aquino’s signature. Security sources told The STAR yesterday that the program was sent back to the Department of Budget and Management. This again set back the timetable for the revised Armed Forces Modernization Law, which states that the President, upon recommendation of the budget and defense secretaries, shall submit the program to Congress within 60 days from the date the law took effect.
AFP confident in attaining minimum credible defense posture The Philippine Star 22nd Jul 2015
The military remains optimistic that the Philippines will attain its goal of achieving a credible defense posture even if the Armed Forces Modernization Program is still awaiting President Aquino’s approval. “Some projects are already underway. Others are already completed. We are just finishing some contracts,” Armed Forces public affairs chief Lt. Col. Noel Detoyato said. The Department of National Defense (DND) defines “minimum credible defense posture” as the establishment of an effective force presence inside the Philippines and its exclusive economic zone. It also pertains to exhibited competence to defend the country and protect its national interests when the need arises. DND spokesman Peter Galvez said the president is carefully scrutinizing the items in the modernization program.
Philippines seeks to upgrade its arms manufacturing capability Channel NewsAsia 21st Jul 2015
The Philippines is set to develop a 370-hectare Defence Economic Zone - one that will allow international manufacturers to set up in the country to help it become self-sufficient in defence requirements. Aside from welcoming these companies, the Philippines will also be able to benefit from enhanced manufacturing capabilities as part of the Armed Forces of the Philippines modernisation programme. General Arsenal, a unit under the Department of Defence which is tasked with manufacturing weapons and ammunitions, will serve as administrator of the economic zone. All profits made from the facility will go straight back into the armed forces' modernisation fund, which will be used to develop new local manufacturing facilities and technology.
Philippines Hikes Defense Budget 25% DefenseNews 21st Jul 2015
The Philippines is planning a 25 percent hike in its defense budget next year, mainly to bolster its claims in the disputed South China Sea, officials said Tuesday. The proposed 2016 national budget, which President Benigno Aquino is to present to parliament for approval on Monday, would reserve a record 25 billion pesos (US $552 million) for defense spending. Funds would be used to acquire navy frigates and patrol aircraft, budget and defense officials told AFP. "We need to protect what is clearly within our territorial jurisdiction," Budget Secretary Florencio Abad said, when asked if the increase was due to the Philippines' maritime row with China.
Philippines Proposes Record $552m Defense Spending Next Year Jakarta Globe 20th Jul 2015
The Philippines is proposing to spend a record 25 billion pesos ($552 million) next year to purchase frigates, surveillance planes and radars to improve surveillance and detection in the disputed South China Sea, officials said on Monday. The funds to modernize the military are part of President Benigno Aquino’s 3 trillion pesos ($66.24 billion) budget bill in 2016, his last year in office. Aquino is no longer eligible to run for a second term. The budget proposal is 15.1 percent more than the current appropriation of 2.606 trillion pesos, according to Budget and Management Secretary Florencio Abad, adding the about 80 percent of the proposed government spending “will be eaten up by the forward estimates or the cost of ongoing programmes and projects.” “In 2016, our proposal to Congress is 25 billion pesos for the modernization program,” Abad told Reuters saying this would be the highest-ever spending for military modernization in two decades.
Philippine Military Upgrade Stalls The Wall Street Journal 19th Jul 2015
A push by the Philippines to overhaul its obsolete military has ground to a halt just as the U.S. ally is striving to deter China in the disputed waters between them. A string of programs collectively valued at $1 billion stalled early last year, said military officials and executives involved in Philippine defense deals. The delay underscores how the government’s efforts to transform the country’s derelict navy and air force have become mired in red tape, funding problems and corruption allegations. The delays leave long-held plans to build a “minimum credible deterrent”—comprising small but capable air and naval fleets—at least a decade from completion, said Jose Antonio Custodio, a Manila-based defense consultant. Even with a basic deterrent in place today, Manila would likely still lack the means to check Beijing’s assertiveness.
Philippines to station warplanes, frigates at former U.S. base facing disputed sea Reuters 16th Jul 2015
The Philippines will station new fighter jets and two frigates at the former U.S. naval facility in Subic Bay from early next year, officials said, the first time the massive installation has functioned as a military base in 23 years. Using Subic Bay would allow the Philippine air force and navy to respond more effectively to Chinese moves in the disputed South China Sea, security experts said. Subic Bay's deep-water harbor lies on the western side of the main Philippine island of Luzon, opposite the South China Sea. "The value of Subic as a military base was proven by the Americans. Chinese defense planners know that," said Rommel Banlaoi, a Philippine security expert. Once one of the biggest U.S. naval facilities in the world, Subic Bay was shut in 1992 after the Philippine Senate terminated a bases agreement with Washington at the end of the Cold War.
Philippine military seeks almost triple defence spending amid China dispute The Economic Times 29th Jul 2015
Philippine generals on Wednesday asked Congress to almost triple annual defence spending over the next five years to upgrade equipment amid an escalating marine dispute with giant neighbour China. The Philippines currently is in the middle of a 998 billion pesos ($21.95 billion) 15-year plan to modernize its armed forces in the face of rising tensions in the South China Sea.
China says US trying to influence Philippines' South China Sea case The Economic Times 24th Jul 2015
China's Foreign Ministry said on Friday the United States was trying to influence a South China Sea arbitration case filed by the Philippines after a senior US official said China would be obligated to abide by the tribunal's decision. China has for years insisted that disputes with rival claimants to the South China Sea be handled bilaterally. But this month, its claims came under international legal scrutiny for the first time when the Permanent Court of Arbitration in The Hague began hearing a suit the Philippines filed in 2013.
Philippines in record defence spending plan to bolster claims in South China Sea The Economic Times 21st Jul 2015
The Philippines is planning a 25 per cent hike in its defence budget next year, mainly to bolster its claims in the disputed South China Sea, officials said today. The proposed 2016 national budget, which President Benigno Aquino is to present to parliament for approval yesterday, would reserve a record 25 billion pesos ($552 million) for defence spending.
The South China Sea Showdown Heads to Court The National Interest 16th Jul 2015
Legal warfare (“lawfare”) in the South China Sea has reached a critical stage. The Philippines has gone full force in using the language of the law to rein in Chinese territorial claims, dispatching its top officials from across all branches of its government to the Arbitral Tribunal at The Hague. Bereft of any tangible capabilities to optimally defend its territorial rights, the Southeast Asian country has embarked on a years-long quest to peacefully manage its territorial disputes with China.
Philippines To Re-open Former US Military Base Defense News 16th Jul 2015
he Philippines said Thursday it would re-open a former US naval base that was closed more than 20 years ago, stationing its own military hardware at the facility that faces the flashpoint South China Sea. The announcement comes as the Philippines is embroiled in a bitter dispute with China over rival claims to parts of the sea, including a rich fishing shoal close to the military base.
Economics
Conditions for small firms improved over 5 years but sector still lags -- economist Business World 27th Jul 2015
The playing field for micro, small and medium enterprises (MSMEs) has improved significantly during the current presidency but the sector remains underdeveloped and individual companies do not create as much employment compared with other countries, an economist said. Remrick E. Patagan, research director of the Institute for Development and Econometric Analysis, Inc., said MSMEs, which play crucial roles in an economy, have enjoyed a positive environment under the Aquino administration. “By many measures of doing business in the country, the Aquino administration has achieved significant progress in improving the business environment. Business procedures, particularly in the areas of starting a business, getting permits, and paying taxes, have been simplified. Its good governance thrust has also led to more favorable investor perception and sentiment,” he said.
PCCI remains bullish on economy The Philippine Star 27th Jul 2015
The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business organization, remains bullish on the growth of the economy this year but has slightly downgraded its yearend forecast. PCCI trimmed its target for Philippine economic growth this year to a range of six to 6.5 percent from an earlier range expectation of a 6.8 to seven percent ascent. “PCCI expects the economy to stay within the 6 to 6.5 percent level of growth this year,” group president Alfredo Yao told The STAR. The Philippine economy already managed to grow 5.2 percent in the first quarter of this year and the government earlier set its full year GDP growth target at seven to eight percent.
Inflation seen to ease further The Philippine Star 27th Jul 2015
Economists of private banks see lower inflation over the next three years as stable food prices are expected to outweigh the effects of the El Niño weather disturbance, power supply shortage, election-related spending, and the US Fed interest rate increase. Results of the survey of private sector economists conducted by the Bangko Sentral ng Pilipinas (BSP) showed a lower mean inflation forecast of 2.3 percent for this year instead of the 2.7 percent average in the March survey. The survey also showed a lower mean inflation forecast of 3.1 percent for 2016 and three percent for 2017 compared to the earlier forecast of 3.3 percent. “The analysts attributed their low inflation expectations mainly to the decline of international food prices, which are likely to outweigh the effects of the El Niño phenomenon, power supply shortage, possible Federal rate hike, and election-related spending,” the BSP said in its inflation report for the second quarter.
Noy touts economic gains The Philippine Star 27th Jul 2015
A stable economy with the highest GDP growth in 40 years and second best in Asia after China; a million jobs generated as of January further reducing unemployment, and reduced number of overseas Filipino workers from 10 million to eight million in five years under his stewardship. These are among the achievements President Aquino will highlight when he delivers his sixth and final State of the Nation Address (SONA) today before the joint session of Congress at the Batasang Pambansa complex in Quezon City. The President is also expected to mention the lower incidence of self-rated hunger, citing surveys that showed it was the lowest in 10 years, as well as the end of shortages in classrooms and textbooks.
Philippines lustre dims as investors look beyond Aquino Brunei Times 25th Jul 2015
The Philippines has been a magnet for foreign investment over the past five years, pushing its stock market to record highs and lowering the cost of its debt, but next year’s change of government is reintroducing an old risk - political uncertainty. Since Benigno Aquino won the presidency in 2010 promising reform and clean government, the Philippines has outpaced its neighbours and drawn money into its markets. But with elections next year, and global volatility already pushing investors to seek safe havens, the uncertainty over his successor is a reason for caution. In the June quarter, foreign investors sold a net US$700 million of shares - the most since the Asian crisis in 1998. Still, they are net buyers of more than US$4.6 billion of stocks since Aquino assumed office.
Imports plummeted 13.4% to $4.4b in May — PSA Manila Standard Today 24th Jul 2015
Imports sank 13.4 percent in May from a year ago, the sharpest drop in nearly six years, on lower orders for petroleum products, electronics and transport equipment, data from the Philippine Statistics Authority show. Merchandise imports amounted to $4.39 billion in May, down from $5.07 billion posted in the same month last year. The figure was the lowest value of monthly imports in 41 months, or since January 2010 when inbound shipments amounted to $4.31 billion. The 13.4-percent decline was the steepest since October 2009. It also marked the third straight month of imports’ contraction. The National Economic and Development Authority said lower prices of goods contributed to the decline in the value of imports this year. It said the volume of total imported merchandise actually recorded a 7.1-percent expansion in May.
PH seen outperforming emerging markets Philippine Daily Inquirer 22nd Jul 2015
The Philippines could outperform other emerging markets despite external shocks that may affect the domestic economy, according to Washington-based Institute of International Finance (IIF). But the institute lamented in its report last month, titled “IIF Dispatch: Philippines Update,” that persistent government underspending, coupled with the slow rollout of the Aquino administration’s centerpiece public-private partnership (PPP) program, had been dragging economic growth. “The Philippines is well-placed to outperform its emerging markets peers if EM [emerging markets] stress picks up in the context of Fed liftoff, thanks to a solid current account surplus, very low fiscal deficit and little foreign participation in local markets,” IIF said.
BSP readies contingency measures to cushion impact of China slowdown, US rate hike The Philippine Star 20th Jul 2015
The Bangko Sentral ng Pilipinas (BSP) is ready to deploy contingency measures anew once risks arising from the economic slowdown in China and the impending rate hike in the US heighten. BSP Governor Amando Tetangco Jr. said monetary authorities are ready to utilize macroprudential measures if the country’s trade is adversely affected by China’s weakening economy. “Nevertheless, should our trade be adversely affected, especially if growth in China slows significantly more than market expectations, we also have room to support growth and manage inflation, given our policy rates are still relatively higher than zero,” Tetangco said.
Foreign business groups urge review of FDI policies The Philippine Star 20th Jul 2015
International business groups have advised the Philippines to re-examine some of its policies to attract the inflow of more foreign direct investments (FDI) in the country. The American Chamber of Commerce of the Philippines (AmCham) has expressed concern about the slowdown of the country’s FDI inflows in recent months. “The Philippines did a great job last year at over $6 billion but we’re somewhat concerned that that number has fallen by almost 50 percent in the first four months this year,” AmCham senior advisor John Forbes said. The country’s FDIs plunged 43 percent year-on-year in April to $382 million, according to a Bangko Sentral ng Pilipinas report earlier this month.
Philippine c.bank says has room to support growth, tame volatility Reuters 19th Jul 2015
The Philippine central bank has policy space to support growth and stem market volatility, its governor said on the weekend, underscoring authorities' readiness to act as uncertainties cloud the outlook for the global economy. Bangko Sentral ng Pilipinas Governor Amando Tetangco said authorities must stay vigilant to risks to the economy posed by the euro zone's debt crisis, slowing Chinese growth and the prospect of higher interest rates in the United States, though he expected the country to weather a "taper tantrum"-style shock. Tetangco was referring to the period in 2013 when global markets took fright at the Federal Reserve's first hint that it might taper its monetary expansion policy.
PH GDP growth to outpace ASEAN peers CNN Philippines 17th Jul 2015
The Asian Development Bank (ADB) expects the Philippines to outpace several of its Southeast Asian neighbors in economic growth for this year and the next, according to a supplement to the Asian Development Outlook (ADO) for 2015. In the report, the ADB projects the country's gross domestic product (GDP) to grow by 6.4% in 2015 and 6.3% in 2016 — the same figures from its March forecast. However, the figures still sit below the government's target of 7% to 8% for this year and the next. The overall growth forecasts for Southeast Asia have been trimmed to 4.6% this year and 5.1% next year, from previous projections of 4.9% and 5.3%, respectively. Malaysia was the only other Southeast Asian country in the report to have its GDP forecasts retained, at 4.7% and 5.0% for the same comparable periods.
Philippines risks missing growth target this year – NEDA The Philippine Star 16th Jul 2015
The National Economic and Development Authority (NEDA) has conceded the Philippine economy will be hard-pressed to meet its target seven- to eight-percent growth for 2015. NEDA director general and Socioeconomic Planning secretary Arsenio M. Balisacan said the economy’s performance in the first five months had been disappointing, particularly the last two months. “Economic growth will be challenged to get at least the seven-percent average quarterly rate,” Balisacan told reporters during the formal signing of the NEDA-DBM joint memorandum circular on evaluation yesterday. “We hope the second half will pick up, but government has to work harder especially on its spending,” he added.
Energy
Ayala looks to boost hydro, solar in renewable portfolio The Philippine Star 27th Jul 2015
The power unit of conglomerate Ayala Corp. is looking to add hydropower and solar projects in its renewable energy (RE) portfolio in the medium to long-term, its top official said. The hydro-power projects being privatized by the Power Sector Assets and Liabilities Management Corp. (PSALM) are attractive investments, AC Energy Holdings Inc. president and CEO John Eric T. Francia said on the sidelines of the Ayala-University of the Philippines School of Economics Economic Forum in Makati City. “We’re interested in the hydro assets of PSALM. It’s more to diversify [our RE portfolio],” he said.
GNPower prepares coal power plant in Lanao del Norte Manila Standard Today 27th Jul 2015
GNPower Kauswagan Ltd. Co. of the ayala Group is set to go “full blast” with the construction of its 540-megawatt coal-fired power plant in Kauswagan, Lanao del Norte province to help ease the shortage in supply in Mindanao by 2017. “For Kauswagan, we have made the financial commitment. We have started the project. The engineering design is ongoing [and we just want to] clear the property... We are hoping to go full blast in a month or so,” AC Energy Holdings Inc. president Eric Francia told reporters. GN Power Kauswagan signed documents on the financial package of the Kauswagan plant last year. GNPower Kauswagan is controlled by AC Energy, a fully-owned subsidiary of Ayala Corp., the Philippine Investment Alliance for Infrastructure Fund and Power Partners Ltd. Co.
Philippines' Semirara halts coal exports after mining suspension Reuters 22nd Jul 2015
Semirara Mining & Power Corp , the Philippines' biggest coal miner, is halting coal exports to ensure continued supply for local power generation and cement production while operations at its main Panian mine are suspended. Semirara, a unit of Philippine conglomerate DMCI Holdings Inc, has come under fire after a July 17 landslide at the Panian mine in the centre of the country buried alive nine workers, prompting the Department of Energy (DOE) to suspend operations there. Acting Energy Secretary Zenaida Monsada said the government was assessing the impact of the closure of the mine on power supplies, including the possibility of importing coal as a stop-gap measure. Semirara's coal is used to generate a 1,600 megawatt supply, mostly for the main Luzon grid.
Meralco goes into renewable energy Manila Standard Today 21st Jul 2015
Manila Electric Co. plans to create a renewable energy unit that will look into opportunities in the sector, its chairman said Tuesday. “Meralco will create a renewables unit separate from the legacy power plants, to take a look at the prospects of renewables and including distributed power grid,” Meralco chairman Manuel Pangilinan said at the sidelines of the launching of a new building. Pangilinan said the renewable energy unit would be incorporated soon after the company named a chief operating officer, whom he did not identify, to lead the company. Pangilinan said the new unit would be separate from Meralco PowerGen Corp., the company’s power generation unit.
NEA hits 78% rural electrification target The Philippine Star 20th Jul 2015
The National Electrification Administration (NEA) has accomplished 78 percent of its target under the Sitio Electrification Program (SEP) as of end June. In a statement, the state-run agency said it spent P14.61 billion to energize a total of 25,257 sitios, or an average of P578,411.72 per sitio. In the first semester, NEA and its partner-electric cooperatives (ECs) powered 4,744 more sitios, benefitting initial consumers of 142,329 or 711,600 Filipinos nationwide through the SEP. During the first half, Region VI (Western Visayas) energized the most number of sitios at 680.
Infrastructure Developments Sells First Solar System Bay Street 20th Jul 2015
Infrastructure Developments Corp. (OTC: IDVC) announced today its first sale under the recent license agreement with First Energy Solutions Provider Inc (FESPI), a Canadian-owned provider of alternative energy solutions headquartered in the Philippines. The sale, to a residential customer in Manila, Philippines, consisted of a 6KW residential off grid solar energy back up system. "The Philippines has abundant sunshine, high economic growth, and some of the least reliable and most expensive electric power in Asia, making it a prime market for independent renewable energy systems," stated IDVC CEO Eric Montandon. "The FESPI systems we are selling allow a business or a residence to meet all of its own power needs and disconnect completely from the grid, an extremely attractive prospect to customers fed up with high prices and frequent power outages." FESPI specializes in providing integrated, use-ready systems that can be installed as a functioning package. FESPI specializes in solar, hydro, wind, LED, and UPS solutions, each designed for specific applications and installed to allow immediate functional use.
Singapore firm mulls solar power plant in Philippines The Philippine Star 16th Jul 2015
A Singapore-based firm is eyeing a 50-megawatt (MW) solar project in the Philippines by 2017 as part of its plans to build up solar generation facilities of the technology across South and Southeast Asia. The Philippines is one of the key growth markets where Aurora Partners Pte Ltd. will construct solar photovoltaic projects. Other markets it is looking at are Indonesia, India, Thailand and Malaysia. Aurora Partners is a joint venture between juwi Renewable Energies Pte Ltd. and Asia Green Capital Partners, a renewable energy developer and investment company, to develop, finance and construct solar photovoltaic projects in South and South East Asia.
Financial Services
Budget spending spur seen from polls Business Mirror 29th Jul 2015
THE PROPOSED P3.002-trillion national budget was submitted yesterday for legislative approval to help spur the economy to grow by as much as 8% next year, with the 2016 elections expected to provide spending impetus.
Insurance Commission expects industry's premium income to hit P500-billion by 2019 InterAksyon 29th Jul 2015
Filipinos’ awareness on insurance coverage is rising, prompting Insurance Commissioner Emmanuel Dooc to project a P500 billion level of insurance premium income by 2019. ”In fact my prediction is that we may post premium income of P240-250 billion this year, much better than the banner year in 2013 where we hit about P200 billion, the highest so far in the insurance industry,” he told Philippine Life Insurance Association (PLIA) members in his speech during the group’s 56th anniversary celebration Tuesday night. He based his “fearless forecast” of total premium income hitting half a trillion pesos by the time his term ends in December 2019 to the industry’s average growth of about 20-25 percent in recent years.
Bad loans ratio at big banks stays below 2 percent, but picks up for thrifts InterAksyon 29th Jul 2015
The non-performing loans (NPLs) ratio of the country's biggest banks remained below 2 percent for the sixth straight month, while that of thrift lenders rose. In a statement, the Bangko Sentral ng Pilipinas said the gross NPLs of universal and commercial banks represented 1.96 percent of their total loan portfolio at end-April this year. The industry’s gross NPL ratio in April was practically unchanged from the 1.95 percent recorded in March. The loan quality indicator has been below two percent since November last year. The ratio moved sideways month-on-month with both the industry’s gross NPLs and loan portfolio showing marginal increases.
PDIC auctions off closed banks’ assets next week The Philippine Star 29th Jul 2015
State-run Philippine Deposit Insurance Corp. (PDIC) is putting on the auction block next week various assets and properties owned by shuttered banks. In a statement, PDIC said 76 properties located in Baguio City, Bulacan, Cavite, Nueva Ecija, Rizal and Metro Manila would be auctioned on Aug. 4 at its office in Makati City. The deposit insurer would accept bids until 2 p.m. “Prospective buyers are advised to physically inspect the properties they are interested in, examine and verify the titles and other documents, and determine any unpaid taxes, fees or expenses before submitting their bids,” PDIC added. PDIC regularly conducts biddings and auctions to dispose of non-financial assets of closed banks in order to settle claims of uninsured depositors and creditors.
JP Morgan expects improved ROE for local banks The Philippine Star 28th Jul 2015
Global financial services firm JP Morgan Chase & Co. expects an improvement in the return on equity (RoE) of various Philippine banks for the remaining quarters of the year due to improving core income and prudent cost growth. “On a core basis, we see banks improving RoE as they benefit from the country’s under-penetrated market, high liquidity and benign asset quality issues,” the company said in its recent study on Asean banks. JP Morgan also sees a stable to slightly improving net interest margins (NIMs) as banks shift their loan book to higher-yielding market and consumer loans.
PLDT reaches out to ‘unbanked’ population Manila Standard Today 27th Jul 2015
Philippine Long Distance Telephone Co. is pushing for electronic payments in the country as a way of reaching out to “unbanked” Filipinos. “With all our combined forces, having the biggest customer franchise in the country and our wide reach and depth of engagement with consumers and stakeholders, we can all make a big push in promoting digital payments in many forms, from person to person to enterprise levels,” said PLDT chairman Manuel Pangilinan. Orlando Vea, Voyager and Smart eMoney president and chief executive, said with the increasing adoption of smartphones and data usage, the Philippines was making a breakthrough in digital services, including the area of financial inclusion.
Visa sees boom in credit-card usage Business Mirror 27th Jul 2015
The global payments technology company Visa Inc. said robust domestic consumption and expanded use of electronic payments products added an estimated P16 billion to the country’s local output, or the gross domestic product, between 2008 and 2012, according to Moody’s Analytics. The technology number cruncher is a unit of the global credit watcher Moody’s Investor Service that makes a lot of economic forecasting for clients around the world. Its assessment of the state of the e-payments environment in the Philippines comes on the heels of a separate Bangko Sentral ng Pilipinas consumer expectations report showing increased consumer purchases among Filipinos in the months ahead.
Expand financial services, BSP urges banks The Philippine Star 27th Jul 2015
The Bangko Sentral ng Pilipinas (BSP) urged banks anew to help pursue financial inclusion and integration in the country to give Filipinos more access to financial services. BSP Governor Amando Tetangco Jr. told members of the Bankers Institute of the Philippines (BAIPhil) both financial inclusion and financial integration pose challenges as well as vast opportunities. “BAIPhil itself must navigate through a fast-evolving market landscape, appreciate and relate all the strands of change, if you are to become an effective venue for continuing education,” Tetangco said. He pointed out training and education should be more akin to telling a good story with different chapters and should not be only about holding lectures and workshops.
Consumer lending seen to drive thrift banks’ sustained growth Business World 26th Jul 2015
The thrift banking sector is expected to sustain last year’s growth trajectory in 2015, with consumer lending still expected to drive the expansion. Chamber of Thrift Banks President Rommel S. Latinazo, who is also president of Yuchengco-led Rizal Commercial Banking Corp. (RCBC) Savings Bank, made the pronouncement given local thrift banks’ strong performance so far this year. “The thrift banking sector can sustain previous year’s growth,” Mr. Latinazo said in a text message when asked for the industry outlook given lenders’ results for the first six months. Central bank data showed that combined profits of the country’s thrift banks grew to P10.287 billion in 2014 from the P9.796 billion posted the previous year.
Banks tighten on property loans Manila Standard Today 26th Jul 2015
Most banks tightened their overall credit standards on commercial real estate loans in the second quarter this year due to stricter regulations, according to the latest Senior Bank Loan Officers Survey conducted by the Bangko Sentral ng Pilipinas. The bank regulator said it was the 12th consecutive quarter that banks reported net tightening of credit standards on commercial real estate loans. “Most of the respondent banks [86.4 percent] in Q2 2015 indicated unchanged overall credit standards for commercial real estate loans using the modal approach. However, based on the DI [diffusion index] approach, a net tightening of overall credit standards was noted for commercial real estate loans...,” the Bangko Sentral said.
BSP dangles more perks to encourage rural bank mergers The Philippine Star 23rd Jul 2015
The Bangko Sentral ng Pilipinas (BSP) has further sweetened the incentives as well as financial package to encourage mergers and consolidations among rural banks. BSP Governor Amando Tetangco Jr. told reporters the Monetary Board has approved in principle a progressive incentive program to be known as the Consolidation Program for Rural Banks (CPRB). Tetangco said the BSP, the state-run Philippine Deposit Insurance Corp. (PDIC), and the Land Bank of the Philippines jointly conceptualized the program. “It intends to promote mergers and consolidation among rural banks to bring about a less fragmented banking system by enabling them to improve financial strength, enhance viability, strengthen management and governance and expand market reach, among others,” Tetangco said.
Financial resources up 8.3% to P14.1 T in Q1 The Philippine Star 22nd Jul 2015
Resources of domestic banks and non-bank financial institutions strengthened further despite external shocks brought about by the debt crisis in Greece as well as the stock market collapse in China. In a report, the Bangko Sentral ng Pilipinas (BSP) said total resources of the Philippine financial system grew 8.3 percent to P14.1 trillion in end March this year from P13.01 trillion in the same period last year. Resources of universal, commercial, thrift, and rural banks rose 8.7 percent to P11.35 trillion in end March from P10.45 trillion in the same period last year. Banks accounted for more than 80 percent of total resources of the country’s financial system.
Lending standards broadly steady Business World 22nd Jul 2015
Lending standards of banks for both businesses and households were mostly unchanged last quarter from the previous three months and are expected to remain steady up to September, a new survey conducted by the Bangko Sentral ng Pilipinas (BSP) showed. The central bank’s Senior Bank Loan Officers’ Survey for the second quarter of 2015 showed that overall credit standards to enterprises were basically unchanged from the previous poll covering the January-March period. The Senior Bank Loan Officers’ Survey is a quarterly poll conducted by the central bank to enhance the understanding of credit behavior in the country. The analysis contained in the survey is based on the quarter-on-quarter change in the perceptions of respondent banks. Representatives of 35 commercial banks participated in the latest survey.
BSP revs up push for bank consolidation Business World 22nd Jul 2015
The Bangko Sentral ng Pilipinas (BSP) has approved a program aimed at boosting merger activities among small lenders to strengthen the network of financial institutions in the country. “The Monetary Board of the Bangko Sentral ng Pilipinas has approved in principle on June 18 the Consolidation Program for Rural Banks (CPRB), a progressive incentive program jointly conceptualized by the BSP, the Philippine Deposit Insurance Corp. (PDIC), and the Land Bank of the Philippines (Landbank) to encourage mergers and consolidations among rural banks,” the BSP said in a statement yesterday. It noted that the program is envisioned to create a “less fragmented” banking system by enabling rural banks to “improve financial strength, enhance viability, strengthen management and governance and expand market reach, among others.” The BSP noted that 512 rural banks are currently operating in the country.
NRCP pushes for mandatory disaster insurance for homeowner property Business Mirror 22nd Jul 2015
The National Reinsurance Corp. of the Philippines (NRCP) is seeking mandatory risk cover on some 40 million households across the country against so-called catastrophic events. NRCP President and CEO Augusto Hidalgo said they already presented a disaster recovery concept to 67 insurance companies in hopes of eliciting some form of feedback. “We are continuing with our comments-gathering activities. We will also present the mandatory risk-coverage proposal to the Department of Finance. If the government likes it, we will wait for them to say ‘go ahead,’” Hidalgo said. According to the executive, some 10 million 40-square-meter concrete homes across the country are uninsured.
Housing stakeholders pushing for simplified documentation Business Mirror 21st Jul 2015
Red tape, or bureaucracy, is a topmost concern for tedious task of applying for property loans and the slow, laborious mortgage-registration process that a tripartite alliance between property stakeholders and attached state agencies seeks to mitigate. The Organization of Property Stakeholders Inc. (TOPS), the Land Registration Authority (LRA) and the Bangko Sentral ng Pilipinas (BSP) are pushing for a standard and simplified loan mortgage document and develop an automated registration of mortgages. Called the Uniform Loan and Mortgage Agreement, or Ulama, this is a proposed shorter and more simplified document that can be used as an industry-standard agreement between borrower and lender for all housing-loan borrowings in the country.
BSP likely to slash banks’ reserve requirement ratios Business World 21st Jul 2015
The Bangko Sentral ng Pilipinas (BSP) could ease lenders’ cash reserve ratios next month -- more than a year after they were last adjusted -- to prod economic growth and stave off deflation, an economist at Bank of the Philippine Islands (BPI) said yesterday. In an e-mail, BPI lead economist Emilio S. Neri, Jr. said banks’ reserve requirement ratios (RRR) could be trimmed by two percentage points to “bolster GDP, (gross domestic product), inflation, bank credit, M3, and NG (national government) spending growth which are all slowing down.” The ratio is the percentage of current deposits banks need to keep with the BSP. It varies depending on the size of the bank: 20% for universal and commercial banks; 8% for thrift banks; and 5% for rural banks.
4 foreign banks to operate in PHL this year GMA News 20th Jul 2015
The move by Philippine monetary authorities to ease the rules that limit the entry of foreign lenders into the country widens the variety of banking options, products and services available to businesses and individual clients. The majority of foreign banks now operating in the Philippines is global financial leaders and have expansive international reach. With the onset of the ASEAN regional integration and the easing of banking policies, Asian banks are now starting to carve inroads into the Philippines. Foreign banks with a wider network of international branches offer remittance options for overseas Filipinos loved ones back home. The Bangko Sentral ng Pilipinas (BSP) has so far approved four foreign banks under Republic Act (RA) 10641 or “An Act Allowing the Full Entry of Foreign Banks in the Philippines.”
Philam Life sees growing trend in bancassurance business Business Mirror 19th Jul 2015
Philippine American Life and General Insurance Co. (Philam Life) sees the growing trend of bancassurance partnership between banks and insurance companies to better capture the emerging and affluent markets in the country. Philam Life Chief Marketing Officer Jaime Jose Javier said the bancassurance business is becoming popular, as the opportunity to distribute the products to the bank’s customers becomes relevant for both bank and insurance company. “It’s a win-win proposition for both. You leverage on existing relation of the banks with their customers, so they get to expand their offering not just banking products.
Regulators push banks to expand regionally Philippine Daily Inquirer 19th Jul 2015
Local regulators have plunged headfirst into talks for bilateral deals that will allow more foreign banks to enter the country, even as Philippine lenders seem content to keep their investments in the domestic market. Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla Jr. said discussions were ongoing for a deal with one of the country’s neighbors to allow local banks to expand across their borders, and vice versa. “We’re beginning dialogues for bilateral agreements,” he told reporters. Espenilla declined to identify the countries with which negotiations are taking place. Last March, central bank chiefs of the Association of Southeast Asian Nations (Asean) signed a new framework agreement to advance the integration of the region’s banking sector.
PSE capital raising reaches P104B in H1 The Philippine Star 16th Jul 2015
Capital-raising activities at the Philippine Stock Exchange reached P104 billion in the first half, putting the local bourse on track to meet its P200 billion target despite the ongoing volatility in global markets. “As of June 30, we’ve raised P104 billion through the exchange. That includes private placements and IPOs (initial public offerings),” PSE president Hans Sicat said. Given strong revenues in the first semester, Sicat is optimistic the exchange would hit its full-year target despite the uncertainties in Greece and China. “We’re literally on target. We hope there will be more. There will be continued volatility in the next two weeks but then again this volatility is a temporary thing."
S&P likely to keep Philippines' rating until next year The Philippine Star 16th Jul 2015
Global rating agency Standard & Poor’s is likely to maintain the country’s credit rating until next year despite growing economic uncertainties this year. In its Asia-Pacific Sovereign Ratings Trends Mid-year 2015 report, S&P said it could raise the ratings of the Philippines if further institutional and structural reforms boost investment and economic growth prospects. The debt watcher upgraded the country’s rating to ‘BBB’ from ‘BBB-’ in May last year. It said other factors that could lead to a rating upgrade include the implementation of changes in governance and the policy environment for a better assessment of institutional and governance effectiveness. “We consider this scenario unlikely over the next year,” S&P said.
Philippine c.bank policymaker favours RRR cut if inflation falls Reuters 16th Jul 2015
The Philippine central bank should opt to reduce banks' required reserves rather than cut its key interest rates to support the economy if inflation falls below one percent, a member of the bank's policymaking Monetary Board said on Thursday. Analysts expect the board, which next meets on Aug. 13, to leave interest rates on hold for the rest of the year, having kept the benchmark rate unchanged at 4.0 percent since October. Felipe Medalla, one of the board's seven members, told Reuters in an email that lowering banks' reserve requirement ratio (RRR) would have more impact on the economy than cutting interest rates. Inflation hit a two-decade low of 1.2 percent in June, and if it drops under 1.0 percent, Medalla said: "it is good for both the short run and the long run to cut the RRR."
Food & Agriculture
Crop insurance is vital in mitigating climate-change impacts on local agriculture Business Mirror 29th Jul 2015
Sen. Cynthia A. Villar underscored on Wednesday the importance of strengthening agriculture-insurance programs as an important risk-management strategy to cope with the impacts of climate change, most especially in the Philippines. Appearing before a forum called “Policy Roundtable on Improving the Agricultural Insurance Program to Enhance Resilience to Climate Change in Southeast Asia” being held at the Ascott Hotel in Makati City, the senator said improving the agricultural-insurance program is key to enhancing climate-change resilience. The two-day policy roundtable forum is spearheaded by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (Searca) along with the Philippine Rice Research Institute (PhilRice) and the Philippine Crop Insurance Corp. (PCIC).
PHL, Vietnam to collaborate on rice research Business Mirror 27th Jul 2015
The Philippines and Vietnam have agreed on a collaborative rice research and development (R&D) program, the Department of Agriculture (DA) said on Monday. Agriculture Assistant Secretary Orlan A. Calayag said the program, which was agreed upon during the First Meeting of the Joint Agriculture Working Group, aims to promote rice-farming systems and technologies between the two countries. “We aim to reduce postharvest losses and to advance processing technologies through this program,” Calayag said in a statement.
Bakers, flour millers follow DTI directive to lower bread prices Business Mirror 22nd Jul 2015
MORE of the country’s bakers and flour millers have cut their prices in compliance with the Department of Trade and Industry–Consumer Protection Group’s (DTI-CPG) order for decreased prices, after a plunge in global wheat prices. Consumers can expect lower prices from more bread manufacturers, now including MLM Foods and Marby Food Ventures. Both have decreased the prices of loaf bread and pan de sal by 50 centavos to P1.
Philippines likely to halt rice imports Voice of Vietnam 22nd Jul 2015
The Philippines is unlikely to import any additional rice this year given its current abundant supply, according to a source from the country’s Ministry of Agriculture. Deliberations of the Food Security Committee (FSC) have yielded a hesitancy to approve the importation of the 250,000 tonnes of standby volume as current stockpiles lean towards a surplus. The standby supply was approved for importation in the event that domestic production suffered significant losses due to the prevailing dry spell.
Underspending threat to PHL food security, lawmaker says Business Mirror 21st Jul 2015
Funds allocated by the national government to the agriculture sector must be released without delay to boost food production and increase the income of farmers, Sen. Francis Escudero said on Tuesday. Escudero, who chairs the Senate Committee on Finance, noted that the country’s food-import bill is now at P300 billion a year and that 36 percent of Filipino families consider themselves as “food poor.” “Two heads are better than one, or make that two carabaos pulling one plow are better than one, so I can’t imagine why there can be slackening in the implementation of our farm programs,” he said in a statement.
‘Aerial spraying an accepted agriculture practice’ Business Mirror 21st Jul 2015
“A multisectoral monitoring team that is focused on banana plantations oversees the compliance of these regulations,” PBGEA Executive Director Stephen Antig said in a statement. “[We are] inviting the seven party-list lawmakers who are pushing for a ban on aerial spraying over banana plantations and other agricultural crops to visit Mindanao and see for themselves how the industry is mindful of the health of the people,” Antig added. The House Committee on Ecology, chaired by Rep. Amado S. Bagatsing of the Fifth District of Manila, is currently reviewing House Bill (HB) 3857, which calls for a ban on aerial spraying.
Basic hygiene blamed for mass food poisoning in Philippines The Rakyat Post 16th Jul 2015
Philippine authorities said on Thursday the poison in a batch of candy that sent nearly 2,000 children to hospital was likely a common germ from dirty hands or sweaty armpits. Health Secretary Janette Garin appealed for better hygiene standards in the food industry, as she announced test results indicating a bacteria found in human skin and hair.
PHL gets 3rd-largest US sugar quota for 2016 Businss Mirror 23rd Jul 2015
THE Sugar Regulatory Administration (SRA) said on Tuesday the Philippines received a total of 142,160 metric tons (MT) raw value of sugar allocation to the US under the tariff-rate quota (TRQ) scheme for fiscal year (FY) 2016. SRA Administrator Regina Martin said US Trade Representative (USTR) Michael Froman announced on July 15 the country-specific quota on its imported raw cane sugar for FY 2016, which runs from October 1, 2015 to September 30 next year.
Philippines Urged to Import Rice Only Through G2G Contracts to Curb Smuggling Oryza 20th Jul 2015
The Chairperson of Senate Agriculture and Food Committee urged the government of the Philippines to consider rice imports only through the government-to-government (G2G) deals and avoid imports through the private sector in order to curb rice smuggling in the country, according to local sources.
Stricter implementation of Food Safety Law sought PhilStar 16th Jul 2015
Sen. Cynthia Villar said the proliferation of fake rice and food poisoning incidents in the country is a wake-up call for concerned government agencies to implement the Food Safety Law. “We cannot take this for granted. It’s against the law,” Villar said yesterday during the opening of the P45-million corn processing plant built by Indian firm Prasad Seeds Philippines, Inc. here.
Health & Life Sciences
Rise in hand, foot and mouth disease noted Philippine Daily Inquirer 28th Jul 2015
The Department of Health has recorded a steep rise in the incidence of hand, foot and mouth disease (HFMD) among children nationwide, with more than 600 cases reported in the last seven months. In a surveillance report, the DOH said 612 suspected HFMD cases were recorded from Jan. 1 to July 4 this year, 175.7 percent higher than the 222 cases reported in the same period last year.
Samar town sees rapid rise in TB cases The Manila Times 23rd Jul 2015
Tuberculosis has killed two people in this town during the first six months of the year, while cases have increased rapidly during the period, almost surpassing the number of infected persons recorded in 2014.
Philippine firm makes knee implants affordable PhilStar 22nd Jul 2015
A local medical devices firm, with funding support from the Department of Science and Technology’s Philippine Council for Health Research and Development (PCHRD), has developed capacity to manufacture high quality and affordable knee implants for those suffering from severe arthritis. Jude Sasing, president of Orthopaedic International, which is controlled by Filipino surgeon and inventor Ramon Gustilo, said the breakthrough knee implant is now available in the market and is made more affordable for Filipinos who want knee replacements.
Official OK with lifetime health coverage for PWDs BusinessWorld Online 19th Jul 2015
THE HEAD of the Philippine Health Insurance Corp. (PhilHealth) agreed to a proposal that will provide lifetime coverage for persons with disabilities (PWDs) but asked lawmakers for additional funds to offset the additional claims. The agency would simply follow policy directions from Congress and the Executive department should the bills proposing the mandatory inclusion of PWDs as PhilHealth members be signed into law, PhilHealth President and Chief Executive Officer Alexander A. Padilla said in a recent interview.
Navy hospital ship, USNS Mercy, arrives in the Philippines Outbreak News 18th Jul 2015
The floating medical center, the USNS Mercy, with it’s crew of some 900, arrived in Roxas City, Philippines to begin their mission for Pacific Partnership 2015 (PP-15). According to the US Pacific Command (PACOM), medical staff aboard Mercy will perform surgical procedures and will host community health engagements, and also provide direct care in seven locations throughout the province of Capiz. Training, humanitarian assistance and disaster relief are other things the crew will be performing.
890 infected with HIV BusinessWorld Online 16th Jul 2015
A total of 890 people have been reported to have been infected with the Human Immunodeficiency Virus-Acquired Immune Deficiency Syndrome (HIV-AIDS) in the Western Visayas Region, based on a Department of Health (DoH) nationwide study from 1984 to May 2015. However, the overall reported cases are estimated to be only 8% of the actual HIV-AIDS infection in the country, according to Dr. Elvie P. Villalobos, DoH Region VI Infectious Disease Cluster head. The study indicates there were 25,884 cases in the Philippines.
ICT
Asian cloud telephony giant enters Philippines The Philippine Star 28th Jul 2015
Asia’s largest cloud telephony company is expanding its products and services to the Philippines to help startups and small and medium businesses in the country. Singapore-based Knowlarity has entered the Philippine market as the first cloud telephony player in the country, its chief executive officer Ambarish Gupta said. “We are comfortable with this since we have been the pioneers of cloud telephony in India and we are the largest provider of PSTN (public switched telephone network) cloud telephony in the world,” Gupta said in an email interview. Cloud telephony refers to voice messages and short message services (SMS) managed in the cloud that are cost-effective than the regular telecommunication services since it does not require implementation of physical infrastructure.
Globe Telecom reinforces network connectivity for customers in south PHL Business Mirror 27th Jul 2015
Lobe Telecom Inc. has deployed advanced small-cell technologies to further reinforce its network’s strength and meet the demand for connectivity in the southern tip of the Philippines. The initiative is part of the mobile operator’s partnership with Alcatel-Lucent that provides for the rollout of state-of-the-art wireless modern network technologies in the Visayas and Mindanao to improve coverage and data capacity. Also included in the rollout are increased fiber backhaul, use of integrated macro and microcell technologies with primary consideration for landscape and tourism potential of the region. Tourist-laden Boracay Island in May was chosen as the initial rollout area for advanced small-cell technologies. Globe fired up additional 3G, LTE, Wi-Fi and the first outdoor small cells in the Philippines during the festivities in the summer.
Electronics firms reduce export goal Manila Standard Today 26th Jul 2015
The electronics and semiconductor industry expects a slower exports growth of 3 percent to five percent in 2015 due to the softening global demand from the world’s biggest electronics consumers. The Semiconductor and Electronics Industry of the Philippines Inc. said the expansion target was lower than the initial forecast of 5 percent to 7 percent growth in the earlier part of 2015. “There is demand softening driven by events on China, Japan and the European Union association president Dan Lachica said over the weekend. Electronic exports grew 8 percent to $23.54 billion in 2014 from $21.8 billion in 2013 and $22.7 billion in 2012.
NTC issues guidelines to filter online child porn PhilStar 17th Jul 2015
The National Telecommunications Commission (NTC) has issued guidelines to Internet service providers (ISPs) to filter child pornography and block access to such websites. Memorandum Circular 03-07-2015 identifies nine minimum technical and specification requirements to be adopted by ISPs. These include web filtering on various categories for text, images and videos with explicit category on child pornography; membership or affiliation with recognized source of blocked child porn websites; field tested accuracy of at least 95 percent on web filter for text, images and videos; availability of application program interface for integration with other systems; at least 800 megabyte per second throughput; high availability configuration option; real time updates on signature and categories of websites; rules for blacklisting and white listing; and high storage capacity for preservation of filtered traffic.
NTC urged to crack whip on telcos Inquirer.net 17th Jul 2015
The National Telecommunications Commission (NTC) should address the practice among telecom companies of routing Internet data to other countries instead of using the Philippines’ own unified Internet exchange, Sen. Francis Joseph “Chiz” Escudero said in a statement on Thursday. “The NTC should start cracking the whip and fix the system immediately. It cannot be ‘business as usual’ anymore. Let’s do away with the mentality of just accepting the present situation and start doing something about it,” Escudero said.
Millennials spending big on media content Inquirer 17th Jul 2015
What will millennials spend on in 2015? Media content, among other things. “In Southeast Asia and emerging markets in Asia Pacific, the absolute size of the media industry is much smaller than in a mature market such as the United States,” the Deloitte study on technology, media and telecommunications also found, adding that spending on TV subscriptions and license fees grew by only 4.8 percent from 2011 to 2015 in the Philippines, as against 27.4 percent in Indonesia, 18 percent in Vietnam, 13.7 percent in Thailand and 6.1 percent in Singapore.
Infrastructure
Davao port project attracts 6 firms The Philippine Star 29th Jul 2015
Six firms, led by San Miguel Corp. (SMC) and French conglomerate Bollore, have expressed interest in the Davao Sasa Port Modernization project. In a statement, the Department of Transportation and Communications (DOTC) said these companies are Anflocor, Netherlands-based global operator APMT, AsianTerminals Inc., French conglomerate Bollore, Singapore-based Portek and San Miguel Corp. These companies are set to submit their qualification documents for the public private partnership project today. “This shows the enormous potential of the Davao region. The construction of a modernized port in Sasa will help meet the growing demand for world-class port services in Davao,” DOTC Secretary Joseph Abaya said.
BCDA weighs bidding options for Clark rail project The Philippine Star 29th Jul 2015
The Bases Conversion and Development Authority (BCDA) will decide on the form of procurement to be used for the Clark Rail Transit System this year. BCDA president and chief executive officer Arnel Paciano Casanova told reporters on the sidelines of the 13th Hitachi Young Leaders Initiative the state-run firm wants to determine the concrete procurement method for the Clark Rail Transit System within the year. “(We want) at least to have something that is concrete or terms of reference that we can bring to the attention of President Aquino,” he said. While the BCDA is considering to bid out the project, it is also open to receiving unsolicited proposals from a group of companies that would form a consortium for the railway system.
Hitachi eyes P200-b Clark Rail Manila Standard Today 27th Jul 2015
Hitachi Ltd. of Japan said Monday it is interested in teaming up with state-run Bases Conversion and Development Authority in building the P200-billion Clark Rail Train System project. “Clark development is one of the projects that we are currently trying to engage in. They need transportation. They need ecosystem,” Hitachi Asia Ltd. chairman Ichiro Iino told reporters at the sidelines of the 13th Hitachi Young Leaders Initiative. “We can provide light rail transit system and monorails. We have various options. We have to find out the solution to meet the demands in Clark or anywhere else in the Philippines mass transport system,” he said. BCDA earlier unveiled a plan to build the Clark Rail Train System Project that would serve as the backbone for the movement of goods, services and people to and from Manila, Clark Green City, Clark International Airport, Clark Special Economic Zone and Tarlac City.
Deeper liquidity in bond markets a must for investors The Philippine Star 27th Jul 2015
The Philippines needs to deepen the liquidity in its bond markets to support foreign investors with projects in the country, an official from Japanese firm Nomura Securities Co Ltd said. “We need to develop the local bond market because in infrastructure, the revenues are local currency for foreign companies. It’s very difficult for them to invest in foreign currency because of the currency risks,” Julius Caesar Parrenas, senior adviser at Nomura, said in a briefing late last week. “But if you have a local currency bond market, they can raise the financing from here and invest that in infrastructure,” he said. Parrenas made the comment especially for firms investing in the country’s Public-Private Partnership (PPP) program, meant to address the infrastructure needs in the Philippines.
Mindanao expects upgraded ports with Cabotage Law amendments Business World 27th Jul 2015
Mindanao business leaders said the signing of the amendments to the Cabotage Law, a policy change they have been lobbying for more than a decade, will open more opportunities for the southern island’s export and import sectors. “It is a victory of years of advocacy,” said Joji Ilagan-Bian, who started the campaign when she was chair of the Mindanao Business Council from 1998-2003. “This will result in positive movements in economic activities in the regions... and decongest the port in Manila,” Ms. Bian told BusinessWorld. Davao City Chamber of Commerce and Industry, Inc. (DCCCII) President Antonio T. dela Cruz also said: “This has been the clamor of the private sector, especially those who are into the shipping industry and also those who regularly ship their products.”
BOT Law amendments pushed Philippine Daily Inquirer 24th Jul 2015
Passing into law the proposed amendments to the Build-Operate-Transfer (BOT) Law would ensure that the reforms introduced by the Aquino administration in the implementation of the centerpiece public-private partnership or PPP program could be passed on to the next administration, an official said on Thursday. In a press conference held on the sidelines of the Asia-Pacific Economic Cooperation (Apec) Workshop on Infrastructure Financing and Capital Market Development, PPP Center executive director Cosette V. Canilao said her group remained hopeful that the BOT Law amendments would be approved by both chambers of Congress this year. “The amendments will institutionalize the reforms (such as the agency’s governance structure) put in place by the PPP Center,” Canilao said.
DTI banks on ROK-ASEAN initiative for inclusive growth GMA News 23rd Jul 2015
The Department of Trade and Industry on Thursday said it has committed to the ASEAN-Republic of Korea (ROK) partnership as a way of achieving inclusive growth once the Association of Southeast Asian Nations if fully integrated at the end of 2015. Citing inclusive growth as one of the challenges under the ASEAN economic integration, Trade Undersecretary Ponciano C. Manalo Jr. noted the support of South Korea has been "favorable" with its vital role in Philippine economy and ASEAN Region as a whole.
More PPP projects near final approval Business World 21st Jul 2015
Two public-private partnership (PPP) projects cumulatively worth some P125 billion are now a step away from bagging the President’s approval for rollout: a deal to modernize the Ninoy Aquino International Airport (NAIA) and a railway that will run between the EDSA-Ortigas Avenue intersection and Taytay, Rizal. In its meeting last Monday, the NEDA-Investment Coordination Committee approved “two new PPP projects: the NAIA Development Project and the [Ortigas-Taytay Light Rail Transit, or LRT] Line 4,” NEDA Director Jonathan L. Uy said in a mobile phone reply yesterday. The projects were originally part of the committee’s June 15 agenda but “were not tackled for lack of time,” PPP Center Deputy Executive Director Eleazar E. Ricote had said then.
Port congestion fears dismissed Manila Standard Today 20th Jul 2015
The government allayed fears of a recurrence of congestion at the ports of Manila that slowed down trade and contributed to a weak 6.1-percent economic growth last year. The sluggish economic expansion failed to meet the low end of the government’s target of a 6.5-percent growth in 2014. Some big business companies in the country indicated receiving reports of a possible recurrence of the 2014 port congestion starting August or September as shipments start to surge for the holiday season. Port regulator Philippine Ports Authority, however, said the two international ports in Manila had reached optimum ideal capacity that made them ready for the anticipated surge in activity starting the holiday season this year up to next year’s national elections.
Bidding opens for biggest rail upgrade yet Nikkei Asian Review 16th Jul 2015
The Philippine government invited bids on July 15 for a 171-billion peso ($3.75 billion) railway project that is President Benigno Aquino's biggest public-private partnership (PPP) deal to date. A newspaper advertisement called for tenders on the North-South Railway Project (NSRP) South Line, which involves construction of 673 km of commuter lines and renovation of a line belonging to Philippine National Railways, which was founded in 1892 and is the oldest rail system in Southeast Asia. The project will connect southern provinces of Luzon to Metropolitan Manila. Luzon, the main island of the Philippines, is home to half the country's 100 million people, and accounts for two-thirds of the national economy.
Manufacturing
Phl, Japan strengthen industrial cooperation The Philippine Star 18th Jul 2015
The Philippine and Japanese governments signed an Action Plan on Industrial Cooperation as part of their commitment to strengthen economic ties. Trade undersecretary Adrian Cristobal Jr. and Japan Deputy director-general for Trade Policy Toshiyuki Sakamoto signed the Action Plan last Thursday at the Board of Investments. The Action Plan is seen to enhance collaboration of the two countries in key areas such as automobile, manufacturing, micro, small, and medium enterprises (MSMEs), services, and human resource development. The Department of Trade and Industry (DTI) said the initiatives are geared towards identifying and addressing supply chain gaps between the Philippines and Japan by providing technical and institutional capacity building to domestic industry players.
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