| Regional Affairs
Philippines weighs membership in China-led infra bank The Philippine Star 5th Oct 2015
The Philippines is among the five remaining countries – and the last in Southeast Asia – which have not joined a China-led multilateral lending organization for infrastructure development. Beijing-based Asian Infrastructure Investment Bank (AIIB) concluded its 7th chief negotiators meeting in Frankfurt, Germany last week, where the country sent a delegation as among prospective members tasked to draft the bank’s rules and regulations. On the sidelines of the meetings, Malaysia and Thailand became AIIB’s newest members with their signing of the Articles of Agreement, the bank said on separate statements on its website.
National Affairs
DoJ objects to longer land leases for foreigners Business World 7 Oct 2015
The Department of Justice (DoJ) has signaled its opposition to a bill in the Senate which will extend the maximum land lease tenure granted to foreigners, calling such proposals unconstitutional. In a position paper signed by Justice Secretary Leila M. de Lima which was sent to the Senate Committee on Justice and Human Rights on Tuesday, the DoJ argued against Senate Bill No. 1731, or the Foreigners Lease Act of 2013, which will allow lease periods of as long as 80 years, compared with 50 years currently. The proposed measure, which was filed by Senator Antonio F. Trillanes almost two years ago, extends the maximum lease entitlement of foreign investors from the current 50 years, renewable by 25 years. The extension also applies to foreign non-investors.
Senate ratifies fiscal incentives measure Business World 7th Oct 2015
The Senate has ratified the bicameral committee report on the Tax Incentives Management and Transparency Act (TIMTA), a measure intended to establish a monitoring scheme that will check the amount of fiscal incentives enjoyed by exporters in the Philippines. During Wednesday’s plenary session, senators approved the conference committee report on the provisions of House Bill No. 5831 and Senate Bill No. 2669, before it adjourned for a month-long legislative break, and ahead of the House of Representatives, which plans to act on the measure before the week is up. Under the measure, all registered businesses enjoying incentives administered by Investment Promotion Agencies (IPAs), such as the Bureau of Customs, are mandated to file with their respective IPAs, a complete annual tax incentives report within thirty days from the set deadline.
Pass Bangsamoro law before APEC, officials ask Business World 7th Oct 2015
Peace negotiators have asked Congress to pass the proposed Bangsamoro law by mid-November ahead of the Asia-Pacific Economic Cooperation (APEC), a month earlier than the Legislative department’s Dec. 16 target. Miriam Coronel-Ferrer of the Office of the Presidential Adviser on the Peace Process (OPAPP) said that Congress should move to approve the Bangsamoro Basic Law (BBL) on the first two weeks of November as a cue to global leaders. “The world is watching this process... We can see that from all the support we have received internationally as well as domestic support,” Ms. Coronel-Ferrer told reporters in a press briefing. “If APEC comes and the message comes out to the whole world that we cannot solve the conflict in Mindanao, that is not going to be a good sign to them who are really pushing for economic integration that is grounded on a very secure society of the Asia-Pacific that is able to address different security challenges and economic challenges the world is facing.”
Palace ready to answer lump sum case in SC Philippine Star 7th Oct 2015
Malacañang said Wednesday that it is ready to answer before the Supreme Court (SC) allegations of lump sum and discretionary funds in the 2015 national budget. On Tuesday, the SC required the Palace and Congress to comment on the petition for temporary restraining order (TRO) on certain provisions of the 2015 General Appropriations Act (GAA) and special purpose funds (SPF) filed by the Philippine Constitution Association (Philconsa) last week.
Govt approval ratings drop Manila Standard Today 6th Oct 2015
Public approval for the administration of President Benigno Aquino III went down in key national concerns and could only muster a majority approval in protecting Filipino workers overseas, according to the latest survey of Pulse Asia Research. “Between June and September 2015, approval for the administration’s work in the areas of fighting criminality, enforcing the rule of law, and fighting corruption eases (-6 to -8 percentage points),” said Pulse Asia. “Disapproval for the Aquino administration’s efforts to fight criminality and corruption becomes more pronounced during this period (+6 and +11 percentage points, respectively) while indecision on the matter of approving or disapproving its initiatives to enforce the rule of law also becomes more manifest at this time (+6 percentage points),” Pulse Asia also said. Pulse Asia said the national administration registers only one majority approval rating in September 2015—protecting the welfare of overseas Filipino workers (51 percent).
Belmonte won’t ask House to pass Moro law anymore Manila Standard Today 5th Oct 2015
House Speaker Feliciano Belmonte Jr. said he will no longer try to convince his colleagues to pass the proposed Bangsamoro Basic Law, because he himself does not believe that it will be approved by December. Belmonte said a “conscience vote” would decide the fate of BBL, which he said he just wants to reach a plenary vote. “I’m not going to talk to everybody for you to vote this way, that way. Let everybody vote the way he wants to vote,” he said. “I just want it to reach that point [where] a decision is made by this body,” he added. Belmonte admitted that President Benigno Aquino III would be “disappointed” if the BBL is not passed.
Bongbong Marcos running for vice president in 2016 CNN Philippines 5th Oct 2015
Sen. Ferdinand 'Bongbong' Marcos Jr. announced on Monday (October 5) that he run for the vice presidency in the 2016 elections. "I have decided to run for Vice President in the May 2016 elections," Marcos said in a statement posted on his website. The senator first entered politics when he was elected vice governor of Ilocos Norte in 1981 at the age of 23. He then became the governor of the province, serving 1983 to 1986. This was cut short by the 1986 EDSA Revolution. Several years after his family went into exile in the United States, Marcos returned to the Philippines.
Critics sceptical of Philippines' commitment to UN targets Channel NewsAsia 4th Oct 2015
The Philippines has committed to a number of sustainable development targets that the United Nations adopted last month. The new 2015 Sustainable Development Goals (SDGs) build on the eight Millennium Development Goals, and include efforts to end poverty, protect the planet and ensure prosperity for all. World leaders established the agenda at the United Nations headquarters in New York last month. The goals are a 15-year blueprint to tackle humanity's most pressing problems, from hunger to climate change, and the Philippine government has committed to some of the 17 goals that cover more than 160 economic, social and environmental targets. For instance, it wants to eradicate poverty among its more than 98 million people by 2030.
‘Filipinos must choose President who can continue reforms’ Philippine Daily Inquirer 30th Sep 2015
An economist has urged Filipinos to choose a president who will not only be able to “unite the nation,” but will also continue the reforms that the Aquino administration has started to implement. Flashing the photos of presidential candidates Sen. Grace Poe, former Interior and Local Government Secretary Mar Roxas, and Vice President Jejomar Binay, Inquirer columnist Cielito F. Habito said: “The president we need to choose is one who is most likely able to bring together disparate parties and contending segments of our society so we can all unite behind a true national vision and finally earn the word nation to describe us. We are very far from becoming a true nation because of our lack of oneness.” Habito, who spoke before members of the Management Association of the Philippines on Tuesday, noted that what the country needed from the next president was a “commitment to continuing reform.” “For sustaining the growth that has sputtered in the first half of the year, we need to ramp up infrastructure investment."
Philippines debates return of US forces Financial Times 23rd Sep 2015
When Barack Obama meets Xi Jinping this week the South China Sea is likely to feature high on the agenda as Washington seeks to counter Beijing’s increasingly assertive claims to contested waters. But as the US president prepares to welcome his Chinese counterpart to the White House amid a confrontational mood between the two nations, one plank of his strategy lies stalled in the Supreme Court of the Philippines. Leftwing groups in the South-east Asian country — a US treaty ally locked in a territorial dispute with China — are challenging a 10-year defence co-operation agreement signed by Mr Obama in 2014 that would allow the US military to return to bases across the Philippine archipelago. The bases include strategically important Subic Bay, which the US left in 1992 after the Philippine Senate refused to ratify a treaty to extend Washington’s lease on bases. The area has since been redeveloped into an industrial and commercial free zone.
Customs
Why The Philippines should join the TPP The Philippine Star 8th Oct 2015
I spoke to Trade Secretary Greg Domingo yesterday and he told me there is no question the Philippines is “unequivocally joining” the Trans-Pacific Partnership or TPP, echoing the statement he made in Washington last June during a conference at the Center for Strategic and International studies (CSIS) where he said, “I want to state clearly and irrevocably that we want to join the TPP.” After several years of discussions and more than 30 rounds of negotiations since 2010, the trade deal – which started out as a small push for free trade in 2006 between APEC member countries, namely Singapore, Brunei, Chile and New Zealand, after which the US, Australia and Peru, showed interest in negotiating a free-trade agreement with the four nations – has been finalized and an agreement reached between the 12 “founding countries”: The United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Together, these countries make up 40 percent of the global economy, and the “plurilateral” trade agreement augurs well for the future of the Asia Pacific region, as it is also seen to boost trade and commerce between these 12 Pacific rim nations.
BOC introduces key changes to issuance, lifting of alert orders PortCalls Asia 7th Oct 2015
The Bureau of Customs (BOC) has issued revised rules for the electronic/manual issuance and lifting of alert orders aimed at promoting “transparency and accountability” and avoiding red tape and delays in the release of lawful importations. Customs Memorandum Order No. (CMO) 35-2015, among others, tasks one customs official to issue an alert order and another to lift it, a departure from old regulations (CMO 21-2014 and CMO 24-2014) which vested both tasks to one and the same official (specifically the one who issued the alert). Under the new rules dated September 23 and which are now in effect, the following officers are authorized to issue alert orders: the Commissioner of Customs, deputy commissioners for Intelligence Group (IG), Enforcement Group (EG), and Assessment and Operations Coordinating Group (AOCG); and all district collectors for shipments arriving in their districts, including sub-ports.
Stop debates, pass Customs modernization act — solon PortCalls Asia 29th Sep 2015
The Customs Modernization and Tariff Act will, among others, simplify Philippine customs procedures, making release of goods much faster. The Customs Modernization and Tariff Act (CMTA) will modernize the Bureau of Customs (BOC), align the agency’s operations to global best practices, and increase its revenue collection by 10%, according to Senator Juan Edgardo Angara. In a sponsorship speech delivered on September 28, the Senate Ways and Means Committee chairman urged the passage of Senate Bill No. 2968, or An Act to Prescribe the Customs Modernization and Tariff Act, to “simplify, modernize and align our customs procedures with global best practices by updating the Tariff and Customs Code of the Philippines (TCCP).” Angara noted the proposed measure had been under debate for almost a decade now and that “it is time to pass the CMTA.”
Rising volumes push Manila, Subic to upgrade ports JOC 29th Sep 2015
International Container Terminal Services Inc. is investing heavily in construction and port equipment to improve productivity that will be required to deal with rising container volumes expected through its Manila and Subic import gateways. Manila International Container Terminal (MICT), the ICTSI flagship, has had a request to spend $107 million on expanding yard capacity approved by the Philippines Board of Investments, while Subic Bay International Container Terminal Corp. (SBITC) recently deployed three new reach stackers and 16 new Kalmar Ottawa terminal tractors. The MICT project will see the construction of Berth 7 in Manila’s North Harbor that will include a 300-metre wharf and back up area that when completed will be able to handle up to 2.5 million 20-foot containers.
Trade facilitation key in hitting this year’s exports growth goal The Philippine Star 28th Sep 2015
Exporters are working to achieve the eight to 10-percent exports growth target this year amid softening of major overseas markets, banking on the implementation of trade facilitation measures. “Such measures should be able to cover for areas where there could be market failures,” said Philippine Exporters Confederation Inc. (PhilExport) president Sergio Ortiz-Luis Jr. during a briefing on Asean Single Window (ASW). Ortiz-Luis cited studies that indicated trade facilitation is the key to reducing the cost of international trade transactions through simplification and harmonization of trade procedures. Another study made for Asean and East Asia also revealed that inefficient trade procedure such as a day’s delay in a shipment reduces trade volume by at least one percent, he said.
Customs prodded to make public import prices of smuggled goods The Philippine Star 26th Sep 2015
Stepping up their fight against smuggling, local business groups are urging the Bureau of Customs to make public declared import prices of the most commonly smuggled goods to enhance transparency and protect legitimate businesses from illicit trade. Some of the most frequently smuggled products include rice, corn, palm oil, tobacco, steel, cement, and ceramic tiles. About 33 domestic industries comprising the Federation of Philippine Industries launched the Fight Illicit Trade Movement (Fight IT) in a bid to curb smuggling which has been deemed by both the government and the business community as one of the major constraints that affect the competitiveness of corporations.
APEC leaders breaking down barriers for SMEs BusinessDay 25th Sep 2015
Lowering barriers to international trade for small and medium enterprises in New Zealand is the focus for Small Business Minister Craig Foss at a ministerial gathering in the Philippines. Foss was in the Philippines for the 22nd Asia-Pacific Economic Cooperation (APEC) Ministers Meeting, where he is discussing small business participation in international markets with other Asia-Pacific small business ministers. Every Kiwi business was in some way linked to the global economy or the country's exporting supply chain and it was important to continue New Zealand's free trade approach, he said. "By and large the New Zealand economy is an export economy and if we all want to enjoy the benefits of the first world, of technology, of you name it, we must export to grow, to pay for our Super, our development, our health.
Customs modernization bill hurdles 2nd reading Business World 24th Sep 2015
The proposed law which will modernize the Bureau of Customs and the tariff system was passed on second reading at the House of Representatives, bringing it closer to the final passage by the chamber, though uncertainties remain whether it will be passed in the Senate before yearend. House Bill No. 5525, known as the Customs Modernization and Tariff Act, hurdled the Wednesday night plenary session. The bill calls for the full electronic processing of shipment documents, streamlining of export and import procedures, simplified processes for seizure and disposition of illegal goods, and steeper penalties for violations. The legislation is also intended to comply with the Revised Kyoto Convention (the Convention on the Simplification and Harmonization of Customs Procedures) of the World Customs Organization, to which the Philippines is a signatory.
Port congestion looms anew – PCCI The Philippine Star 23rd Sep 2015
A repeat of last year’s congestion problems in Manila ports that paralyzed trade is bound to happen this coming Christmas season, the country’s largest business organization warned. Philippine Chamber of Commerce and Industry (PCCI) president Alfredo Yao said port congestion may be inevitable during the last quarter of the year as volume of imported goods is expected to surge. “There should be tightening in the ports again because the truck ban is gone and it’s also the last quarter which is the peak season for importers,” Yao said. “I hope not but there is that possibility, although it may not be as bad as last year,” he added.
Imports surge to record $6.5b Manila Standard Today 23rd Sep 2015
Imports jumped 17 percent in July from a year ago to a record $6.5 billion, on the back of a 71-percent increase in electronic components, the Philippine Statistics Authority said Wednesday. Data from the PSA showed merchandise imports increased rom $5.6 billion in July 2014, following the 22.6-percent rise in June shipments to $5.9 billion, despite the sharp drop in the value of petroleum imports. This brought total imports in the first seven months to $32.2 billion, up 0.1 percent from $37.17 billion a year ago. “The steady growth in importation of key imported commodities is expected to further boost the growth of investments and household consumption in the third quarter of 2015.
Traders buck port congestion charges Manila Standard Today 23rd Sep 2015
The Federation of Philippine Industries has asked the Senate to check the port congestion and shipping charges imposed on shipments despite the improved situation in Manila ports. FPI sent a letter to Senator Benigno Paolo Aquino III dated Sept. 22, 2015 to investigate shipping companies that allegedly continued to collect port congestion charges from exporters and importers. “While some shipping lines discontinued the collection of PCS, there are other types of charges that have been imposed by various shipping lines,” the group said. Port congestions fees have been packaged anew in the form of emergency cost recovery surcharge, container imbalance charge, equipment positioning services, container cleaning fees, documentation fee at destination and terminal handling charge, it said.
Defense & Security
Philippines relaunches corvette upgrade project Jane's 6th Oct 2015
The Philippines Department of National Defense (DND) has relaunched a programme to upgrade the Philippine Navy's (PN's) three Jacinto-class corvettes. Invitation to bid notices published by the DND on 6 October show the programme - worth PHP854.6 million (USD18.5 million) - features the upgrade of the vessels' weapons and fire-control systems. The programme was launched in January 2015 but shelved by the DND following a failed bidding process, in which nine companies reportedly expressed interest in competing but none submitted formal bids.
Bidding Resumes on Aircraft Acquisition Defense Studies 5th Oct 2015
DND has scheduled on Oct. 12 The bid opening for the P4.9-billion contract for six close-air support aircraft (photo: Beechcraft) Six foreign firms are expected to take in an aircraft acquisition project, with the government resuming the procurement of military hardware as part of the military's modernization program. The Department of National Defense (DND) has scheduled on Oct. 12 The bid opening for the P4.9-billion contract for six close-air support aircraft. The procurement is one of 30 multibillion contracts suspended Earlier in May pending the go-ahead of President Benigno SC Aquino III. Reviews These include two navy frigates worth P18 billion, two long-range patrol aircraft worth P5.9 billion, and three air surveillance radars worth P2.68 billion. The six firms who bought the bid documents for the contract are Brazilian aircraft manufacturer Embraer Asia Pacific Pte , Ltd., Korea Aerospace Industries Ltd., the European Aeronautic Defense and Space Company-Construcciones Aeronautics SA (EADS-CASA) Airbus Defense and Space, and Israeli defense contractor Elbit systems, and US-based Beechcraft Defense Company and IOMAX USA, Inc.
The Philippines and the US Military May Be Getting Back Together, Thanks to China Real Clear Defense 30th Sep 2015
After a 25-year absence, the United States is poised to operate in the Philippines once again — but it will first need clearance from the Supreme Court in Manila. Since 1898, the Subic Bay Naval Base provided the US military with an important staging ground for security operations in the Western Pacific. President Corazon Aquino ordered the US military to depart in 1992, however, following failed negotiations to extend base leases over multiple issues, including the presence of nuclear weapons, which is still a sticking point with the Philippine government. Times — and the security dynamic in Asia, particularly in the South China Sea — have changed. Currently, US forces can reach the South China Sea from bases in Japan or Guam, but a presence, even rotational, at Subic Bay would allow for a faster response to contingencies.
Getting Army Anti-Air, Anti-Tank Capabilities from Israel Defense Studies 28th Sep 2015
14 M-133A2 APCs carrying 76mm turrets and anti-aircraft capability and 4 APCs fitted with the 25mm RCWS will complete 6 APCs fitted with .50 caliber RCWS the which come before (photo: AFP) The Philippine Army's Mechanized Infantry Division (MID) will have the capability to deal with intruding tanks with the pending arrival of the 14 M-133A2 armored personnel carriers (APCs) carrying 76mm turrets and anti-aircraft capability with the arrival of the four armored personnel carriers (APCs) fitted with the 25mm remote-control weapon system (RCWS). This was Disclosed by MID public affairs office chief Major Philemon Tan at the sidelights of the firepower and maneuver demonstrations of the six APCs fitted with the brand-new .50-caliber remote control weapon system (RCWS) at Camp O'Donnell in Capas, Tarlac on Monday. Fourteen of the 28 APCs from Israeli defense manufacturer Elbit Systems Ltd. will be configured as fire support vehicles, equipped with fire control systems, and armed with the 76mm guns roomates are sourced from decommissioned Scorpion CVRTs of the Philippine Army.
Economics
Gov’t pressed to arrest FDI fall Business World 7 Oct 2015
The government should take steps to arrest the fall in net foreign direct investments (FDI) -- which were nearly halved last semester from a year ago -- and prod some improvement by yearend, the Joint Foreign Chambers of the Philippines said in a statement sent to media yesterday. The central bank still officially expects net FDI inflows to reach $6 billion this year, up from the initial estimate of $5.3 billion tipped last November, even as private sector analysts expect investors to stay on the sidelines until the new administration that assumes office on June 30 next year demonstrates continued commitment to reforms and investment-friendly policies. Net FDI surged 65.9% to a record $6.201 billion last year from $3.737 billion in 2013, beyond the central bank’s upwardly revised $4.4-billion forecast for 2014.
Foreign chambers see FDI rising in H2 The Philippine Star 8th Oct 2015
Foreign business groups in the Philippines are optimistic the country’s net foreign direct investments (FDI) will pick up in the second half of the year as investors regain confidence along with easing port congestion problems. In a statement yesterday, the Joint Foreign Chambers (JFC) said it remained concerned over the country’s diminishing net FDI but said it is hopeful that the decline during the first half of the year is only temporary and the second half will register higher levels. The JFC said the Philippines has now managed to regain investor confidence after successfully hurdling congestion concerns that have crippled trade and scared away new investments late last year and early this year.
PHL forecast cut, but still among Asia-Pacific 's best Business World 7th Oct 2015
Philippine economic growth this year until 2017 should remain relatively robust compared to some others in Asia and the Pacific, but slower than initially expected after the relatively weak expansion seen last semester, the World Bank said yesterday. In separate but related reports, the Washington-based lender said it now sees the Philippine economy growing by 5.8% this year from the 6.5% forecast given in June, 6.4% in 2016 from 6.5% and 6.2% in 2017 from 6.3%. The new projections were contained in the Philippine Economic Update report titled “Making Growth Work Better for Small Businesses,” and the East Asia and the Pacific Economic Update report titled “Staying the Course.” In its Philippine report, the World Bank said the downward revisions took into account the 5.3% slower gross domestic product (GDP) growth logged last semester due to government underspending, negative contribution of exports to gross domestic product and the initial impact of El Niño.
Moody’s expects stronger public spending in H2 Manila Bulletin 7th Oct 2015
Credit rating firm Moody’s Investors Service has expressed optimism on government’s ability to accelerate its spending in the remaining months of the year to boost economic growth. In its report, Moody’s said that the country’s economy, as measured by its gross domestic product (GDP), may grow 5.7 percent this year, slower compared with its previous forecast of 6.7 percent. Moody’s said slowing export growth in the country along with fiscal underspending by government weighed on economic output in the first half of the year. “On the supply side, the El Niño-related dry spell hurt agricultural production, contributing to our lower GDP growth forecast of 5.7 percent for 2015,” Moody’s said. “Nevertheless, we expect fiscal disbursements to accelerate in the second half, and to see further progress on infrastructure development related to the government’s public private partnership program,” the debt-watcher added.
IMF cuts Philippine growth forecasts anew The Philippine Star 7th Oct 2015
The International Monetary Fund (IMF) further lowered the economic growth forecasts for the Philippines this year and next year amid the country’s weaker than expected gross domestic product (GDP) growth in the first half due to the continued weak global demand. IMF resident representative Shanaka Jayanath Peiris said the multilateral lender in its October 2015 World Economic Outlook (WEO) further slashed the country’s GDP growth forecast to six percent instead of 6.2 percent this year and to 6.3 percent instead of 6.5 percent next year. Peiris explained the revision reflects the slightly weaker than anticipated second quarter GDP outturn and downward revision to trading partner country growth in the October 2015 WEO forecast. The country’s GDP growth accelerated to 5.6 percent in the second quarter from the revised five percent in the first quarter on the back of improving government spending.
Infra, investment constraints hinder business in Philippines – World Bank The Philippine Star 6th Oct 2015
The World Bank said the biggest constraints to improving the business climate in the Philippines are policy reforms revolving around investments and infrastructure. “The most important priority is improving the business and investment climate, especially affecting infrastructure and investments,” World Bank chief economist for the East Asia and Pacific Region Sudhir Shetty said in a teleconference yesterday. Shetty said the Philippine government must take another look at the revenue picture, collection levels, and increasing the country’s tax base. The World Bank economist also cautioned the Philippines and the rest of emerging Asia in being too eager in giving tax incentives to new investments.
Philippine Central Bank Says Inflation May Have Bottomed Out The Wall Street Journal 6th Oct 2015
The Philippine central bank said Tuesday that inflation could have bottomed out but isn’t expected to reach even the lower end of the target 2%-4% range this year. The rate slipped to 0.4% in September—its slowest pace in over two decades. “Based on our latest forecasts, we should see inflation bottoming out on account of the impact of El Niño and weak peso. With supply conditions remaining generally favorable and demand continuing to be manageable, we expect inflation to keep within our forecasts of 1.6% for 2015, 2.6% for 2016 and 3.0% for 2017,” Bangko Sentral ng Pilipinas deputy governor Diwa Guinigundo said in a news release. Inflation averaged 1.6% in the first nine months of this year.
Government sticks to 7-8% growth target this year The Philippine Star 3rd Oct 2015
With only three months left in the year, the economic growth target will no longer be changed even as the Aquino administration conceded that hitting just the low end of the goal would be difficult to achieve. When asked if there is a plan to revise this year’s seven- to eight-percent growth target, Budget Secretary Florencio Abad told reporters on Monday night: “I don’t think so. Not anymore. What for?” The Development Budget Coordinating Committee (DBCC) – which Abad chairs – has no scheduled meeting yet to revisit macroeconomic assumptions for this year and the next to take into account recent economic developments. Growth – as measured by gross domestic product (GDP) – slowed to 5.3 percent in the first semester even after accelerating to 5.6 percent in the April to June period. Economic expansion during the first quarter was at five percent.
Philippine economy least vulnerable to external shocks, says S&P The Philippine Star 1st Oct 2015
Standard and Poor’s (S&P) has tagged the Philippines as the least vulnerable emerging market economy that would be affected by adverse global trends brought about by the impending interest rate hike in the US and the economic slowdown in China. In a report, S&P said the Philippines, Mexico, and Poland are the countries that appear to be least at risk from the combined effect of the tightening global liquidity, financial deleveraging, and a Chinese slowdown. “The least-vulnerable sovereigns in our ranking are the Philippines, Poland, and Mexico, followed by Pakistan and Hungary,” the report said. S&P assessed all 22 emerging market economies including the Philippines. It ranked the countries by using a simple average of its ranking of the three measures of risks.
Fitch ups PHL outlook to positive Business World 24th Sep 2015
THE PHILIPPINES could secure a credit rating upgrade in the next two years if it can sustain improvements in good governance and competitiveness beyond next year’s political succession, debt watcher Fitch Ratings yesterday signaled in a statement.The global debt watcher has upgraded the country’s outlook to “positive” from “stable” while maintaining the country’s long-term foreign-currency issuer default rating (IDR) at “BBB-”, the minimum investment grade based on its ratings scale.
Filipino labor aces Asean peers in first European investors survey InterAksyon 24th Sep 2015
The Philippines topped among ASEAN-5 in terms of ease of recruiting labor from abroad and sentiment towards the European Union (EU), according to the EU-ASEAN Business Council Business Sentiment Survey 2015. Malaysia came next to the Philippines in terms of ease of recruiting labor from abroad, followed by Singapore, Thailand, and Indonesia. In terms of sentiment towards EU, Singapore ranked second, followed by Indonesia, Malaysia and Thailand. The EU businesses ranked the Philippines second among ASEAN-5 in terms of availability of skilled labor.
Business, labor groups press for tax reduction Business World 23rd Sep 2015
Eighteen groups yesterday asked President Benigno S. C. Aquino III to reconsider his position rejecting income tax reduction proposals in Congress, saying the long-overdue reform of the country’s taxation would make the country more competitive and boost revenue collections. Business, professional, labor, and trade groups yesterday signed a unity statement to support the passage of legislation that will adjust income tax brackets and index them based on consumer prices, as well as reduce the rates for both individuals and corporates.
Energy
Shell commits major projects in Philippines The Philippine Star 8th Oct 2015
Pilipinas Shell Petroleum Corp. has committed to pursue major projects in the country ranging from new facilities to its much-delayed initial public offering (IPO), its top official said. The local subsidiary of energy giant Royal Dutch Shell has lined up several projects and still continues to look for opportunities in the country, said Shell country chairman and president Edgar Chua. The company has already completed the P1-billion second phase and third phase of the Malampaya deep water gas-to-power project. This expansion will maintain the level of gas production to fulfill commitments under existing gas sales agreements until 2024, ensuring the steady supply of natural gas to power the Luzon electricity grid.
Proposed Mindanao solar projects could generate 500 MW Business World 7th Oct 2015
Mindanao could have access to about 500 megawatts (MW) of solar power if all 31 projects now pending are approved and implemented, data from the Mindanao Development Authority (MinDA) and the Department of Energy (DoE) showed. As of Aug. 31, the DoE has given the green light to 22 of the projects while the rest are still undergoing assessment. Based on the data, nine of the approved projects are in south-central Mindanao, one in western Mindanao, six in the Northern Mindanao Region, four in the Davao Region, and one each in the Caraga Region and the Autonomous Region in Muslim Mindanao.
‘Minimal adjustment’ seen in October power bills Business World 5th Oct 2015
Manila Electric Co. (Meralco), the country’s largest power distributor, expects minimal movement in this month’s generation charge, which accounts for the biggest chunk of customers’ electricity bills. Larry S. Fernandez, Meralco vice-president, in a text message noted lower cost from the Wholesale Electricity Spot Market (WESM), from where the utility buys part of its supply. “We have noted a significant reduction in WESM charges, but we still need to check against charges from IPPs and PSAs,” Mr. Fernandez said, referring to independent power producers and power supply agreements the utility has with plant owners.
Consumer groups back bid for lower electricity rates Philippine Daily Inquirer 4th Oct 2015
Two consumer organizations are backing a proposal for competitive bidding for the supply of electricity to bring down power rates in the Philippines, which has the highest electricity cost in Asia. The National Association of Electricity Consumers (Nasecore) and the Matuwid na Singil sa Kuryente Consumer Alliance (MSK) said the competitive selection process proposed by the Department of Energy (DOE) was the first proposal for auctioning off contracts in the power sector after the Electric Power Industry Reform Act (Epira) allowed cross-ownership in generation and distribution that made the industry prone to abuse. “If this is implemented, we will see power rates in the country decline, and consumers will benefit,” Nasecore president Pete Ilagan said in an interview. “We’re happy that the policy emanated from the DOE, but we want to see the Energy Regulatory Commission implement this,” he said.
Epira amendment no panacea for power crisis, rate increases 3 of 3 Business Mirror 30th Sep 2015
SOME non-governmental organizations and militant groups want the Electric Power Industry Reform Act (Epira) abolished. But, in the eyes of the private sector, the law is working, and there is no need to amend it. Various business groups even expressed concern over the move to amend the Epira, saying that it might send the wrong signal to investors and lending institutions. The American Chamber of Commerce of the Philippines, Employers Confederation of the Philippines, European Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines Inc. and the Korean Chamber of Commerce of the Philippines earlier urged the Department of Energy (DOE) to hold a joint stakeholders meeting to, once and for all, permanently address all issues in the power sector. “What the government should do now is declare that Epira will not be amended, and conduct more dialogues with industry participants to reduce key uncertainties or change material rules midstream,” the associations stressed.
GBPC mulls first Luzon power project The Philippine Star 30th Sep 2015
Global Business Power Corp. (GBPC), the power generation company of banking tycoon George Ty, is preparing to expand outside Visayas with its first power venture in Luzon in 2016. GBPC executive vice president Jaime Azurin said the company is keen on expanding in Luzon. A coal-fired power plant with capacity of at least 600 megawatts (MW) is being eyed, which could happen “next year,” he said. “We’re looking at Luzon. We’re looking at coal but it has to be bigger in size to be able to lower the cost,” Azurin said. The company official, however, declined to identify the possible location of the power project “because a lot of people are looking for a safe spot.”
Epira amendment no panacea for power crisis, rate increases 2 of 3 Business Mirror 29th Sep 2015
HOUSE Committee on Energy Chairman and Liberal Party Rep. Reynaldo Umali of Oriental Mindoro had tried to amend the 14-year-old Electric Power Industry Reform Act (Epira). Umali, however, said it proved to be an uphill battle as too many were against it. Epira’s thrust was questioned when power distributor Manila Electric Co. (Meralco) announced that the generation charge, which accounts for more than half of the Meralco bill, went up by P9.10 per kilowatt-hour (kWh) in December 2013 and P10.23 per kWh in January 2014. Consumers were furious at the Meralco rate increase, which was approved for implementation on a staggered basis by the Energy Regulatory Commission (ERC). Shortly after it was implemented, the Supreme Court (SC) issued a temporary restraining order (TRO) to stop the power-rate increase. Until now the TRO has not been lifted.
Datem eyes expansion into renewable energy Philstar 28th Sep 2015
Local construction firm Datem Inc. is looking to invest in renewable energy as it embarks on further diversification to support long-term growth, a top official said. In an interview, Datem president Levy Espiritu said the company is studying the feasibility of getting into the power sector as part of its overall plan to expand in other industries other than its core business of construction. “We’re looking at what is needed for the country, like power. We’re looking at a mix of power sources but it will be renewable, basically to address environmental issues. We’re preparing studies right now to prepare us for that eventually,” Espiritu said. He said Datem is considering investing in both base-load and and peaking plants. “Right now, base-load plants already have existing contracts. So peaking plants are better, but after these base-load contracts expire, we can go into base-load,” Espiritu said. Initial preference are hydropower, solar and biomass plants, he added. Datem, with its core business in construction, expanded in related industries such as housing and bulk water treatment through subsidiaries Datem Homes and Datem Water starting 2013. The water subsidiary is gearing up for expansion in Southeast Asia, establishing its first foreign venture in Vietnam and is eyeing other booming countries in the region such as Myanmar and Cambodia.
Hedcor Bukidnon secures financing for 68.8MW hydroelectric project in Philippines Energy Business Review 28th Sep 2015
Aboitiz Power subsidiary Hedcor Bukidnon has secured PHP10bn ($213.3m) loan from a consortium of lender-banks to fund the construction of the 68.8MW Manolo Fortich hydroelectric project in Bukidnon, Philippines. Aboitiz Power said that loan and credit accommodation was issued by consortium of lender-banks to Hedcor Bukidnon, through Aboitiz Renewables. The funding will be used to develop, build, operate and maintain the PHP12.5bn ($270.9m) hydroelectric power plant. Construction work of the project is already underway since April and is planned to be completed by the end of 2017. BPI Asset Management and Trust Group serve as trustee and facility agent whereas BPI Capital acted as mandated lead arranger and book runner. Featuring two units including 43MW Manolo Fortich 1 and the 25MW Manolo Fortich 2, the power plant is designed to generate clean power using hydropower resources.
PH checks viability of Isabela gas well Philippine Daily Inquirer 24th Sep 2015
The state-run Philippine National Oil Co.-Exploration Corp. (PNOC-EC) will be able to determine the amount of natural gas reserves in an exploration well in Isabela by the end of the year. “We declared discovery, the next phase is declaration of… whether [the area is] really commercially viable to produce the gas,” PNOC-EC president and chief executive Pedro A. Aquino Jr. told reporters. He said they will also know by then if the company will need to drill another well to be able to exhaust the possible reserves in the area. PNOC-EC managed to draw gas from the Mangosteen-1 well of Service Contract 37 (SC 37) in Santiago City, Isabela over the summer but further tests are needed to check if reserves are at commercial volumes. PNOC-EC is the upstream oil and gas subsidiary of the Philippine National Oil Co.
First Gen admits delay in operation of Batangas gas plant Business Mirror 24th Sep 2015
An official of Lopez-led First Gen Corp. said there is a slight delay in the commercial operation of the 100-megawatt (MW) Avion Open Cycle Natural Gas-Fired power plant in Batangas City. “Avion’s a little late. There were delays on site preparation. It will come online by end of the year,” First Gen President Francis Giles Puno said. The Avion facility, the third gas-fired power plant of the power company, was originally targeted for commercial operations in April this year. It was then moved to the second half of this year. He said Avion’s output will be initially sold at the Wholesale Electricity Spot Market (WESM).
SMC power unit wins injunction vs PSALM Business Mirror 1st Oct 2015
A REGIONAL Trial Court has barred the Power Sector Assets and Liabilities Management Corp. (PSALM) from terminating its contract with a unit of San Miguel Corp. (SMC) over a dispute on generation payments for the 1,200-megawatt (MW) Ilijan cogeneration facility in Batangas. The listed conglomerate told the stock exchange yesterday that “the Regional Trial Court of Mandaluyong City, Branch 208, issued on Sept. 28... an order granting preliminary injunction in favor of SPPC. SPPC or South Premiere Power Corp. is a wholly owned of SMC Global Power Holdings Corp., which in turn is the energy arm of San Miguel. The order granted by the court stopped state-owned PSALM “from further proceeding with the termination of the independent power producer administration (IPPA) agreement between SPPC and PSALM while the main case is pending.” San Miguel further said next hearing on the main case is scheduled for Oct. 22. The dispute between the two parties stemmed from PSALM’s decision to terminate its contract with SPPC citing the latter’s “continuous refusal” to pay fees worth over P6 billion.
Energy department bares El Niño action plan for Mindanao Business Mirror 30th Sep 2015
The Department of Energy (DOE) on Wednesday released an action plan to mitigate the impact of El Niño in Mindanao. Among the plans drawn up include an intensified energy efficiency and conservation campaigns; implementation of the Interruptible Load Program; ensuring minimal forced outages of power plants; managing the maintenance schedules of power plants, transmission and distribution facilities; optimization of the dispatch protocol for power plants with hydropower plants serving as peaking requirement; and deployment of modular generator sets. The agency, according to Energy Undersecretary Loreta Ayson, has also created “Energy Task Force on El Niño” to address the power-supply situation in Mindanao, which is largely dependent on hydroelectric power plants. The members of the task force include the DOE, National Power Corp., Energy Regulatory Commission, power generators, private distribution utilities and electric cooperatives.
Epira amendment no panacea for power crisis, rate increases 1 of 3 Business Mirror 28th Sep 2015
THE lawmaker who earnestly fought to have the 14-year- old Electric Power Industry Reform Act (Epira) amended has given up, saying that it was just, after all, “wishful thinking.” House Committee on Energy Chairman and Liberal Party Rep. Reynaldo V. Umali of Oriental Mindoro—who was one of the speakers at a recent forum on “Why Energy Efficiency is Everyone’s Business”—said he tried, in many ways, to amend the Epira, but “there was too many who are against it.” “I tried hard to amend the Epira through House Bill (HB) 4479. Initially, I was hopeful of amending it during the 16th Congress, but it hasn’t happened yet. For now, it is already just wishful thinking that amendments to the law will be passed,” Umali said in an interview.
NPC forges Taiwan collaboration on RE hybrid deployment Manila Bulletin 25th Sep 2015
To pare its level of subsidies along the domains served by its Small Power Utilities Group (SPUG) nationwide, state-run National Power Corporation (NPC) is now stepping up preparations on the deployment of hybrid renewable energy (RE) systems to the so-called off-grid and missionary areas. The kick-off point to the planned RE technology installations is the capacity development training that NPC is pursuing as a tie-up with the Industrial Technology Research Institute (ITRI) of Taiwan. The recent three-day training program also engaged participants from the Department of Energy, National Electrification Administration and the Renewable Energy Association of the Philippines. According to NPC president Gladys Cruz-Sta. Rita, “the use of renewable energy is expected to lower the subsidy in missionary areas where there is high cost of fuel due to their remoteness and susceptibility to imminent weather.” She added that with the installation of RE hybrids, there is a potential to lower the cost of subsidies funneled to SPUG areas that had conventionally relied on diesel or bunker-C fired generating facilities.
Meralco unit nears deal for P41-B syndicated loan Business World 23rd Sep 2015
THE JOINT venture of Meralco PowerGen Corp. (MGen) and Thailand’s New Growth B.V. is close to sealing a deal with several banks for a P41-billion loan that will partly fund the development of a coal-fired power plant in Quezon province. San Buenaventura Power Ltd. Co. is in talks with five to six banks for a syndicated loan, said Betty C. Siy-Yap, senior vice-president and chief financial officer of Manila Electric Co. (Meralco), the parent firm of MGen. “Hopefully, we can close it within the month,” Ms. Siy-Yap said in an interview.
Financial Services
Strengthening securities, corporate governance in PH Philippine Daily Inquirer 7th Oct 2015
After a lot of brainstorming and private sector consultation, the Securities and Exchange Commission (SEC) has taken the big step of rewriting the implementing framework for domestic securities regulation to give corporations more leeway in raising funds while plugging regulatory loopholes and incorporating global best practices. The implementing rules and regulations (IRR) of the 2015 Securities Regulation Code (SRC)–as approved by the SEC en banc– expands the shelf registration program and streamlines certain requirements on the public offering of debt or equity securities. This new rulebook also refines the tender offer requirements, which are sometimes contentious during corporate takeovers. The 2015 SEC rulebook also sought to address regulatory gaps and boost market and regulatory structures. The adoption of global best practices was also meant to ensure that the players would be able to meet the challenges posed by increasing market sophistication and regional integration.
BSP says local banks in no rush to go overseas amid integration Business World 6th Oct 2015
The Bangko Sentral ng Pilipinas (BSP) is not rushing to forge a bilateral deal with another Southeast Asian country as part of an effort towards an integrated banking system in the region given local banks’ preference to expand locally. Still, the industry regulator is continuously preparing for the entry of more foreign banks into the domestic market, a senior official yesterday said. BSP Deputy Governor Nestor A. Espenilla, Jr. said surveys from banks showed domestic players are inclined to expand locally before going overseas. “Right now, the reaction of local banks is to focus on the domestic first. You’ll see big banks trying to cover their bases first. Before they even go regional, let me secure the market first,” Mr. Espenilla told reporters on the sidelines of a forum in Makati City yesterday.
BSP eases rules on dividend declaration The Philippine Star 6th Oct 2015
The Bangko Sentral ng Pilipinas (BSP) has further eased the regulations on dividend declaration of banks and quasi-banks on shares of stock and similar capital instruments. The BSP’s Monetary Board has approved the policy liberalization to align the dividend declaration standards of banks and quasi-banks in the Philippines with international standards on the rights of shareholders. BSP deputy governor Nestor Espenilla Jr. said the revised policy holds more accountable the board of directors and management of the bank and quasi-banks on the declaration of dividends and makes more transparent to the public the dividend declaration in view of the required disclosures.
Banks keep bad loans level low The Philippine Star 5th Oct 2015
Soured loans of major banks rose marginally in July but remained below two percent for eight straight months since November last year, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend. Data from the central bank showed the gross non-performing loans (NPL) ratio of universal and commercial banks inched up to 1.90 percent of the banks’ total loan portfolio (TLP) as of end July this year from 1.84 percent in end June. “The latest NPL figures indicate U/KBs’ continued adherence to high credit underwriting standards,” the BSP said. A loan that is non-performing is in default or close to being in default as the debtor has not made his or her scheduled payments for at least 30 days.
Philippine Pension Buys Stocks Amid Record Foreign Outflows Bloomberg 5th Oct 2015
For the largest Philippine pension fund, record foreign outflows are making the nation’s equities a more attractive investment. As the Philippine Stock Exchange Index surged to a record in April, the Government Service Insurance System was selling, according to its President Robert Vergara. Since then, the benchmark gauge has fallen every month, its longest losing streak in 13 years, and the fund has been purchasing shares -- spending a third of its annual equities budget in a 5 billion peso ($107 million) buying spree in August alone, he said. "This year we were really behind our investment program, we were actually taking profit as the market was going up," Vergara said in an interview in Manila. Now, the fund is "predominantly buying" and there’s "a possibility that we will bottom out, maybe in the next couple of weeks," he said.
Stocks out to hurdle 7000-level this week The Philippine Star 5th Oct 2015
The Philippine Stock Exchange index (PSEi) is expected to hurdle the 7,000 level this week. “Failure to recover would lead to deeper corrections, back to weekly lows of 6,720, possibly extending to 6,600,” said Luis Limlingan, managing director at Regina Capital. He said the rally is crucial because prices are on a downward, bearish slope. “We advise to stay light on positions or accumulate issues which are still holding above long-term moving averages. Our strong buy trigger is raised to 7,020 so until this is breached, we expect the index to have sideways volatility this week — a breakout would extend rallies to 7,119 to 7,211,” Limlingan said.
Life insurance for ‘kasambahays’ Philippine Daily Inquirer 5th Oct 2015
Manulife Philippines and BDO Insurance Brokers Inc. (BDOI) have teamed up to make life protection products affordable to people at the bottom of the economic pyramid, especially household staff “kasambahays” and blue-collar workers. Manulife and BDOI unveiled “Kasambahay Plan” and “Pinoy Protect” products, both of which are annual renewable insurance plans providing coverage for accidental death and dismemberment, death (due to all causes), total permanent disability (TPD) and burial. The premium is worth as low as P285 per year for the “Kasambahay Plan” and as low as P600 per year for “Pinoy Protect.” “The Kasambahay Plan promotes responsible household employment by encouraging employers to include life insurance as one of the benefits of their household help, while Pinoy Protect enables Filipino workers to sign up for life insurance,” Ryan Charland, Manulife Philippines president and chief executive officer said in a press statement on Monday.
Philippine banks lead in retail financial services The Philippine Star 4th Oct 2015
Singapore-based publication The Asian Banker sees the Philippines leading the strong growth in the retail financial services market in Asia Pacific on the back of increasing consumption and improved access. A study conducted by Asian Banker Research showed the income of commercial banks from retail financial services in Asia Pacific growing 77.5 percent to $824 billion by 2020 from the projected $464 billion this year. “Asia Pacific’s retail financial services market will be worth $824 billion by 2020. Increasing consumption and improved access to financial services in combination with mobile banking technologies, will be key catalysts in driving retail banking income between 2015 and 2020,” The Asian Banker said. Retail banking income was defined as business from retail deposits, mortgages, credit cards/unsecured lending, wealth management and, wherever possible, small and medium enterprises banking.
Local banks ready to face Asian peers Manila Standard Today 4th Oct 2015
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said Philippines banks are ready to face the challenges of foreign lenders entering the country under the Asean financial integration because of stronger and established presence in the domestic market. “Is the Philippine banking system ready? We are clearly in a position of strength as an industry and, individually our banks have been enlarging their domestic footprint... and capitalizing on e-banking technology,” Tetangco said in a speech during the Philippine International Banking Convention held in Makati last week. “... The Philippine boat may not be the large vessel of other jurisdictions but the fact that we have been able to steer through the turbulent and uncertain waters of the last decade is itself the testament of our resolve and our strength as a market,” Tetangco said.
Domestic liquidity, bank lending growth quicken Business World 1st Oct 2015
Money supply growth picked up in August as liquidity continued to expand due to sustained demand for credit, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday. Domestic liquidity or M3 -- the broadest measure of money within an economy -- grew by 9% year on year in August to P7.8 trillion, faster than the downward-revised 8.4% expansion recorded the month prior. Month on month, M3 increased by 0.9%. “Money supply continued to expand due largely to sustained demand for credit,” the BSP said in a statement. Growth of domestic claims continued to pick up, expanding by 13% from the revised 11.3% in July.
Proposed credit card industry rules move forward Business World 1st Oct 2015
Lawmakers are moving to consolidate eight separate Senate bills intended to regulate the local credit card industry, with the final measure likely to include provisions on mandating credit companies to issue important notifications, as well as prohibiting them from harassing debtors and imposing extra charges on cardholders’ purchase of goods. During a hearing of the Senate Committee on Banks, Financial Institutions & Currencies on Wednesday, Committee Chair Senator Sergio R. Osmeña III convened representatives from the local credit card industry and regulator Bangko Sentral ng Pilipinas to hear their thoughts on the eight bills filed with the chamber. With opposition on four of the discussed bills, Mr. Osmeña told BusinessWorld that the committee will “probably” only incorporate those proposals that received no resistance during the hearing in the committee report on the measure.
Banks’ foreign currency loans rise Business World 30th Sep 2015
Approved foreign currency-denominated loans of banks increased as of the first half from a year ago as businesses borrowed funds to finance their capital needs, even as some shifted to domestic financing, the Bangko Sentral ng Pilipinas (BSP) reported on Wednesday. Funds released by banks’ foreign currency deposit units (FCDU) totaled $12.13 billion as of end-June 2015, 4.72% more than the $11.583 billion seen in the same period last year. This was, however, 2.67% lower than the $12.463 billion logged at end-March 2015 as repayments exceeded disbursements, the central bank said. FCDUs are bank units that are authorized to conduct foreign currency-denominated transactions, including deposit-taking and loan-granting.
Philippines seeks linkup with ASEAN bourses next year AsiaOne 30th Sep 2015
The Philippine Stock Exchange aims to join a cross-border stock trading platform in Southeast Asia as early as next year, CEO Hans Sicat said Tuesday. Exchanges in Singapore, Malaysia and Thailand launched the so-called ASEAN Trading Link in 2012. The platform is designed to allow investors to use a bourse in their home country to trade stocks listed in other members of the Association of Southeast Asian Nations, but it has struggled to increase membership. The Philippine bourse will hitch onto the platform as early as 2016, Sicat said. If such countries as the Philippines and Indonesia join, the combined market capitalisation of the trading link could top $2 trillion, close to the Hong Kong market's US$3 trillion.
PDS seeks lifting of trading restrictions on listed bonds The Star 29th Sep 2015
The country’s trading platform for bonds and currencies said it aims to allow tax-exempt institutions to buy and sell corporate debt papers as early as first quarter next year. Philippine Dealing System Holdings Corp. and Subsidiaries (PDS Group) president and CEO Cesar Crisol told reporters yesterday the company wants to lift trading restrictions on corporate bonds, following what was implemented for government debt papers earlier this year. “It was always part of the program to integrate both the taxable and tax-exempt markets. It just happened the government securities moved ahead of the corporate (issuances),” Crisol said on the sidelines of the 2nd Asean Fixed Income Summit in Manila.
Philippines: Technology seen as disrupting insurance industry Asia Insurance Review 28th Sep 2015
Smartphones, fitness armbands, global positioning systems (GPS), and other web-connected devices are seen as disruptors to the Philippine insurance industry. With GPS telling people how to drive more carefully and fitness armbands alerting them when they are exceeding the normal sugar level, more people are beginning to think they face less risk, according to a report on the Rappler news website. "There are positive and negative implications of technological advances to insurance companies," Pru Life UK President and CEO, Mr Antonio de Rosas, said on the sidelines of an insurance seminar last week.
Fitch revises PH credit outlook to ‘positive’ Philippine Daily Inquirer 25th Sep 2015
International debt watcher Fitch Ratings has revised its credit outlook for the Philippines to “positive” from “stable,” signaling its intention to grant an upgrade within the next 12 to 18 months. This was in recognition of improved governance standards under the Aquino administration, which have led to stronger growth and a significant improvement in the business climate. However, Fitch’s more optimistic view may come to naught if the country deviates from its current track. Fitch said in a statement it would withhold a credit rating upgrade if it sees a “deterioration in governance standards or a reversal in reforms that were implemented under the Aquino administration.”
Bank deposits rise to P6.8 T The Philippine Star 25th Sep 2015
Bank deposits grew 8.2 percent in the first half, boosting the total resources of the country’s banking industry, the Bangko Sentral ng Pilipinas (BSP) reported yesterday. Based on the central bank’s Report on Economic and Financial Developments for the Second Quarter 2015, total bank deposits amounted to P6.8 trillion from January to June, P500 billion higher compared to P6.3 trillion in the same period last year. The BSP said growth in deposits in the second quarter was faster than the 7.5 percent growth posted in the first quarter. Data showed savings deposits rose 8.8 percent, while demand deposits went up 13 percent in the first half. Time deposits inched up 2.9 percent during the period.
Year-end OFW remittances to prop up weakening peso, FMIC predicts Business Mirror 25th Sep 2015
The peso remains under pressure from a strong US dollar coupled with fears of the China economy’s hard landing, but the First Metro Investment Corp. (FMIC) sees improvement once the remittances of overseas Filipino workers start pouring in November and December. FMIC said the peso will continue to be under pressure with the imminent rise in Fed policy rates this year. It said the 30-day and 200-day moving averages continue to suggest further peso weakness in the near term. “We maintain the view that the peso will continue to be on a depreciation mode, albeit milder, as the US growth proves intact, coupled with fears of a hard landing of the Chinese economy and nervousness over the government’s abilities to restore confidence in its stock market,” according to FMIC and UA&P capital markets research.
Traders get behind move to expand Islamic banking in the Philippines The Philippine Star 25th Sep 2015
Local traders expressed support for House Bill 5989, which aims to amend the Amanah Bank Charter to institutionalize an expanded Islamic banking system in the country. The bill, now in the House Committee on Banks and Financial Intermediaries, was authored by Rep. Sitti Djalia Turabin-Hataman of the Anak Mindanao (AMIN) Partylist. “We support all efforts meant to strengthen the Islamic banking system in the country. An Islamic banking system is `pro-poor' and is leaned to the empowerment of small and medium entrepreneurs,” said Sandra Siang, chair of the Kutawato Muslim Business Chamber. Siang leads a bloc of Muslim traders operating in Central Mindanao, some of them engaged in construction supply and grains buy-and-sell business in underdeveloped towns.
Banks’ deposit base expands Philippine Daily Inquirer 24th Sep 2015
Money kept by the public in Philippine banks grew at a faster pace in the second quarter, mirroring the economy’s improved performance, official data showed. In a report, the Bangko Sentral ng Pilipinas (BSP) said growth was driven mainly by an increase in savings and demand deposits, which are cheaper, albeit less stable, sources of funding for local banks. At the end of June, total savings and time deposits in the banking system rose 8.2 percent to P6.8 trillion. The pace of growth was faster than the 7.5-percent expansion recorded at the end of March this year. Savings and demand deposits expanded by 8.8 percent and 13 percent, respectively, while time deposits grew by 2.9 percent during the review period. Meanwhile, foreign currency-denominated deposits owned by Philippine residents grew by 9.5 percent, year-on-year.
Fitch revises PH outlook from ‘stable’ to ‘positive’ Philippine Daily Inquirer 24th Sep 2015
International debt watcher Fitch Ratings revised its credit outlook for the Philippines to “positive” from “stable,” signaling its intention to grant an upgrade within the next 12 to 18 months. Sovereign credit ratings, which are indications on the government’s ability to repay obligations, are used by investors as proxies for the strength and stability of the local economy. Fitch’s move was in recognition of improved governance standards under the Aquino administration, which has led to stronger growth, and improvements in the government’s finances and the domestic business climate. Fitch said it would withhold a credit rating upgrade if it sees a “deterioration in governance standards or a reversal in reforms that were implemented under the Aquino administration.”
BSP charter amendments passed on second reading Business World 24th Sep 2015
Lawmakers at the House of Representatives have approved on second reading the proposed law which will infuse an additional P150-billion capital to the Bangko Sentral ng Pilipinas (BSP), among other much-awaited changes to its more than two decades old charter. During Wednesday’s plenary session, lawmakers passed House Bill No. 5875, otherwise known as the New Central Bank Act, bringing the period of individual amendments to the measure to an end and placing it a step closer to hurdling the House. The proposal amends Republic Act No. 7653 or the New Central Bank Act of 1993 or the BSP charter.
Food & Agriculture
Brace for dry spell, sugar growers told The Philippine Star 8th Oct 2015
The Sugar Regulatory Administration yesterday urged the sugar industry to implement preemptive measures to counter the destructive effects of the strengthening dry spell as sugarcane cultivation areas nationwide are expected to be badly hit. SRA administrator Ma. Regina Martin is encouraging sugarcane farmers to plant early and have their canes milled in the earlier part of the current cropping season to benefit from higher sugar recovery. Canes brought in for milling in the middle and late part of the sugar production season risk having lower sugar content and faster sugar quality deterioration because of the hot and dry planting conditions, she said.
APEC members accept Iloilo plan to boost food security, fisheries Business World 6th Oct 2015
Member nations of the Asia-Pacific Economic Cooperation (APEC) have adopted the Iloilo Plan of Action, which promotes inclusive growth through food security and climate resiliency for the fisheries sector. The action plan consists of three priorities: fish loss reduction; resilient oceans, coastal resources and ecosystems, and sustainable aquaculture; and agri-business development.Secretary Ramon J.P. Paje of the Department of Environment and Natural Resources (DENR) said that the action plan will boost the campaign to improve biodiversity within the APEC economies, a key to ensuring food security.
PHL bats for Apec action plan to protect marine resources Business Mirror 4th Oct 2015
THE Philippines urged member-countries of the Asia-Pacific Economic Cooperation (Apec) to come up with an action plan to address the threat of unsustainable fishing practices and environmental degradation.
Aquaculture touted as food security measure Business World 4th Oct 2015
Developing more aquatic farms for the cultivation of fish and water plants could provide a boost to food security while curbing illegal fishing, said officials at the ongoing Asia-Pacific Economic Cooperation (APEC) meetings on Food Security and Blue Economy. Dr. Felix G. Ayson, chief of the Southeast Asian Fisheries Development Center-Aquaculture Department based in Tigbuan, Iloilo said the region will have to increase aquaculture production to keep up with future demand.
Gov’t supports results in ‘radical progression’ for agriculture sector Philippine Information Agency 30th Sep 2015
The Philippines' agricultural sector has seen "radical progression" since 2010 because of government support, Department of Agriculture (DA) Undersecretary Segfredo Serrano said during Asia-Pacific Economic Cooperation (APEC) Food Security Week and High Level Policy Dialogue on Food Security and the Blue Economy on Tuesday. "In the past few years, 2011 up to now, you have seen radical progression of budgetary support from the Congress and also sponsored by the President," Serrano said.
Mobile center set for Davao farmers Sun Star 30th Sep 2015
The Agricultural Training Institute (ATI) of the Department of Agriculture (DA) and the Aces Polytechnic College and Natural Farming Institute initiated an agriculture mobile training center in a bid to expand services to marginalized small farmers. Asterio P. Saliot, ATI director, said on Monday that the future for sustainable agriculture is the organic farming.
DA chief turns over P317 Million worth aggie projects in Caraga Philippine Information Agency 30th Sep 2015
Agriculture Secretary Proceso J. Alcala turns over a total of P317 Million worth of agriculture projects in Caraga Region last Monday, September 28, in the province of Agusan del Sur. This is during the inauguration of the two AgriPinoy Rice Processing Centers (RPC) situated in the municipalities of San Francisco and Trento in Agusan del Sur.
Farm sector seen key to achieving SDGs Inquirer 30th Sep 2015
The agriculture sector is on the spot to help enable countries to meet the new 17 Sustainable Development Goals (SDGs) which governments adopted on Friday, according to the Food and Agriculture Organization. FAO director general José Graziano da Silva said in a statement that food security, nutrition and sustainable agriculture were key to achieving the entire set of SDGs by 2030.
APEC agriculture meeting focuses on technology, rural development Philippine Information Agency 30th Sep 2015
Delegates to the Asia-Pacific Economic Cooperation (APEC), who discussed agriculture during Monday’s meeting, put major emphasis on agricultural and technological cooperation, as well as rural development, an agriculture official has said. Agriculture Undersecretary Segredo Serrano told reporters during a press briefing at the Amigo Hotel here Tuesday that they have also put much emphasis on surmounting the challenges posed by climate change on agriculture.
DOST launches Food Innovation Center in Tacloban City Manila Times 29th Sep 2015
The Department of Science and Technology and the Eastern Visayas State University launched the Eastern Visayas-Food Innovation Center on September 26 in Tacloban City. The center offers a range of services including trainings on food development, technical consultancy, packagingand label design. “Equipping and enabling our local micro, small, medium entrepreneurs to create world-class food products are an integral part of our mission to bring inclusive development in different places in the country,” said DOST secretary Mario Montejo.
DA-6 to create blueprint for food security Manila Bulletin 29th Sep 2015
The Department of Agriculture in Western Visayas (DA-6) is set to create a blueprint for food security in anticipation of the long drawn-out drought or El Niño phenomenon in the region. DA-6’s Technical Director for Administration and Finance, Dr. Joyce Wendam said such blueprint will aim to mitigate the impact of El Niño expected to start in October.
Health & Life Sciences
Dengue death toll nears 300 – DOH The Philippine Star 8th Oct 2015
Dengue has claimed the lives of 269 people so far this year, Health Secretary Janette Garin said yesterday. “That is the number of fatalities from the reported 92,807 cases. But that number is lower than the deaths we had last year, and in 2012 and 2013, when the incidence of dengue peaked,” Garin told reporters. She said dengue incidence in Tarlac, Cavite and Apayao has reached an alarming level. “But it is now under control and is going down,” she said. Most of the cases were recorded in Central Luzon (14,127), Calabarzon (14,082), Metro Manila (10,385), Ilocos Region (8,136), Northern Mindanao (6,451), Cagayan Valley (5,677) and Soccsksargen (5,552).
Philippines sees big growth in outsourced medical services The Philippine Star 5th Oct 2015
Leaders of the Philippine services outsourcing industry say they expect a big increase in business as the result of a new, highly detailed diagnosis coding system adopted by the U.S. for insurance claims. The Philippines is the world's leader in international call center services. Its information technology and outsourced services industry is expected to employ 1.3 million people by 2016, when annual earnings are seen to reach $25 billion. Dan Reyes, chairman of the IT & Business Process Association of the Philippines, said Monday the new U.S. coding system will open up more processing jobs and the Philippines stands to gain because of its large pool of graduates in medical-related fields. His group says earnings have jumped 30 percent for Philippine companies providing medical billing services.
Metro Pacific mulls IPO for hospital business Rappler 3rd Oct 2015
Infrastructure conglomerate Metro Pacific Investments Corporation (MPIC) said it may consider listing its hospital business through an initial public offering (IPO). MPIC, under its unit Metro Pacific Hospital Holdings Incorporated, currently has a chain of private hospitals with a combined total of 2,244 beds. The conglomerate has received offers from local and foreign banks to underwrite the maiden offering, but it may consider to do so after the 2016 elections. The conglomerate targets to hit 5,000 hospital beds over the next couple of years through acquisition and expansion of existing hospital facilities to achieve a P1.5-billion ($32.20 million) net income. Under the plan, MPIC’s hospital group plans to acquire two hospitals annually, and to expand existing hospital facilities by another 700 to 800 beds.
Diabetes medicine that reduces cardiovascular diseases introduced in PH Manila Bulletin 2nd Oct 2015
With cardiovascular diseases (CVD) as the leading cause of the 4.9 million diabetes deaths in 2014, having a medicine that reduces chance of having CVD will be a great help. This was revealed in a health discussion held by the Diabetes Philippines and Boehringer Ingelheim. During the event, the results of the EMPA-REG outcome trial, which was done to determine the long-term cardiovascular safety of empagliflozin among type 2 diabetes (T2D) patients. Empagliflozin is an oral, once a day sodium glucose cotransporter 2 (SGLT2) inhibitor for the treatment of adults with T2D to improve glycaemic control.
Wanted: Doctors for Palawan's islands Rappler 26th Sep 2015
The Department of Health (DOH) admits that the country suffers from a shortage of physicians. The ideal doctor-to-patient ratio is 1:1,000. To achieve this, DOH says that the country needs an additional 30,000 doctors. DOH says that the shortage of doctors is more pronounced in remote areas, where one doctor could be serving 33,000 people. The presence of specialist doctors – cardiologists, ob-gyne, pediatricians, oncologists, for example – is a different need altogether.
Bill seeks to allow PITC to import cheap medicines Rappler 26th Sep 2015
To provide people greater access to affordable medication, a lawmaker has filed a bill seeking to allow the state-owned Philippine International Trading Corporation (PITC) to import low priced medicines. Parañaque City Representative Gus Tambunting said House Bill 6114 allows the PITC to import low priced medicines of the same quality or prescriptions from reputable and reliable suppliers and local sourcing of medicines using as basic component indigenous or endemic materials prevalent in the Philippines.
ICT
House approves extension of Smart’s franchise by 25 years Business World 23rd Sep 2015
The House of Representatives has approved on third reading the measure extending by 25 years the franchise of Smart Communications Inc., which expires in 2017. Lawmakers on Monday evening passed House Bill No. 5942, which renews the franchise granted to Smart under Republic Act No. 7294. The measure was filed by Deputy Speaker and Isabela Rep. Giorgidi B. Aggabao. In a text message to BusinessWorld on Wednesday, Sergio R. Osmeña III, acting chairman of the Senate Committee on Public Services, said they are ready to hold a hearing on the extension of Smart’s franchise once the House version is sent to the Senate. “We will call for [a] hearing after we receive the House bill. The Constitution provides that all tax, revenue, [and] franchise bills must originate in the House,” Mr. Osmena said.
Philippines’ PLDT launches VC that eyes Silicon Valley, global investments Tech in Asia 30th Sep 2015
Philippine telecommunications giant PLDT has created a venture capital firm that will invest in companies from Silicon Valley and the rest of the world. PLDT Capital, which has started operations in Los Angeles County in California, expects to make US$50 million in investments this year alone. The investments could be in “mobile engagement platforms, content, mcommerce, and digital services.” The firm’s managing director Winston Damarillo, who’s also PLDT’s chief strategy officer, told Tech in Asia: “The allotment is for Silicon Valley companies and other companies overseas. That means, if we find good companies in LA, for example, we’ll invest in them or form joint ventures with them.” The joint ventures will be created through the PLDT group’s local business units, among them Smart Communications, ePLDT, Digital5, and Voyager. Essentially, PLDT Capital will serve as a “gateway” in forming synergies between Philippine and Silicon Valley startups.
No surprise that Groupon is shutting down in Thailand and the Philippines Tech in Asia 25th Sep 2015
Global headaches for Groupon As the novelty of the daily deal model wore off, many have talked of a growing “deal fatigue” among consumers that lowers re-purchase rates and thus customer lifetime value. Perhaps even more important, however, are the sales cost of keeping the “deal factory” for local deals running: Having sales reps talk to little spas and restaurants to get deals on the page is a considerable expense. It certainly does not help that local businesses seem to increasingly call into question the value that customers sent by Groupon have to them as studies claim that only few of them turn into regulars for the local business. Groupon in turn reacted to these concerns by increasingly pushing into ecommerce and selling products on its page. It also seems they worked hard to increase efficiency by harmonizing processes and technology platforms across countries. The required additional investment to bring these improvements to more countries is also part of the official reasoning given by Groupon for why it decided to close shop in 7 countries. Still, looking at the list of 7 countries, you can’t help but wonder why Southeast Asia is affected disproportionately with 2 countries, Thailand and the Philippines.
Infrastructure
Bidders seek filing extension for Tutuban-Legazpi rail line Business World 5th Oct 2015
Prospective bidders for the P170.7-billion South Line of the North-South Railway Project (NSRP) have asked the government to push back the timetable of the biggest project under the government’s public-private partnership (PPP) program. Metro Pacific Investment Corp. (MPIC) and Aboitiz Equity Ventures, Inc. (AEV) have formally requested the Department of Transportation and Communications (DoTC) to extend the Oct. 15 deadline for the submission of documents for the NSRP. Bid submission has been set on March 28 next year, to be followed by the awarding on April 27. “[Philippine National Railways] is being offered, but we’re not sure whether we can meet the timetable because the timetable is quite tight. For the size of operations, it’s difficult to find commitment from foreign partners for such a large project in a short period of time because they need time to evaluate the projects themselves,” MPIC President Jose Ma. K. Lim told reporters on Friday.
Manufacturing
Car, truck makers close in on 2015 full-year sales goal Business World 7 Oct 2015
The Philippines’ largest auto industry group saw members’ cumulative sales jump by almost a third last month as it inched closer to its yearend goal, according to joint data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association that were released yesterday. The group’s members brought to the market a total of 27,069 units last month, 29% more than the 20,924 vehicles sold in 2014’s comparable month. This year’s September vehicle sales also marked a 16.8% increase from the previous month’s 23,181, the same data show. Broken down, passenger car sales last month went up by 26.3% year on year to 10,703 from 8,477, while those of commercial vehicles surged by an annual 31.5% to 16,366 from 12,447.
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