THE BANGKO Sentral ng Pilipinas (BSP) will keep an eye on banks’ compliance with a US tax law but has not set any definite sanctions should lenders fail to fulfill their obligations, its chief said.
“The BSP has no defined sanctions for non-compliance,” central bank governor Amando M. Tetangco, Jr. said in an e-mail to reporters in response to a query on how it intends to implement the Foreign Account Tax Compliance Act (FATCA) here.
“The ultimate consequence of non-compliance is the withholding by the US government of 30% of income sourced from the US,” he said.
Mr. Tetangco said that what is within the BSP’s ambit is to direct banks to take measures “should non-compliance result in unfavorable consequences on the operations of banks.”
“The BSP’s actions would be more on working to encourage banks to establish systems that they would need to enable them to comply with the FATCA requirements,” said the BSP chief.
Legislated in the US four years ago, the FATCA is aimed at compelling Americans who are hiding money in offshore accounts to pay the right taxes.
Under FATCA, financial institutions outside the US with accounts of American nationals should register with the Internal Revenue Service (IRS) as foreign financial institutions (FFIs), and are required to audit their accounts and report those that hold US income.
Those that fail to sign up with the IRS by end-June 2014 will be slapped a 30% withholding tax on all US-sourced income starting July 1.
A list published by the IRS early this month showed a total of 148 Philippine financial institutions that registered with the US tax authority by May 5 and secured approvals as of May 23.
All in all, there are 26 universal and commercial banks, 14 thrift banks and three rural banks on the IRS list.
The 148 Philippine FFIs signed up with the IRS in the absence of an intergovernmental agreement (IGA), which is still being negotiated between the Philippines and the US.
The IGA will facilitate the transmission of information from these FFIs to the Philippines’ tax authority, the Bureau of Internal Revenue (BIR), which will then pass on the information to the IRS.
BIR Commissioner Kim S. Jacinto-Henares has said that the Philippines will adopt the “Model 1A IGA,” and that the country has up to the end of the year to sign an agreement. Under this model, institutions will report to the BIR and the agency will give the necessary information to the US IRS for them.
The Philippine financial institutions signed up with IRS under “Model 2,” where they will give information on accounts held by “US persons” with at least an aggregate value of $50,000, in the case of individual account holders, and $250,000, in the case of corporations, directly to the IRS. -- Bettina Faye V. Roc
sourcE: Businessworld
Sunday, June 29, 2014
Overcoming compliance fatigue
EARLIER this month, findings of an Ernst & Young (EY) survey on fraud, bribery and corruption made the headlines. It revealed a concerning picture of some executives’ attitudes towards private sector misconduct in the Philippines and 58 other countries. It is only apt, then, to now discuss how to uncover such unethical practices and minimize their impact on business.
The issue is becoming more important than ever. According to EY’s 13th Global Fraud Survey, “Overcoming compliance fatigue: Reinforcing commitment to ethical growth”, many of the world’s regulators are stepping up investigations against misconduct. Authorities from the United States, United Kingdom, Germany, Italy, France, Japan and even emerging economies like India, Brazil and China are adopting stronger enforcement against violations such as insider trading, money laundering, price manipulation, cartels, and bribery. Here in the Philippines, high-profile cases in the public and private sectors are progressing through the legal systems as well.
Consumers and investors are likewise increasing their scrutiny in the aftermath of the financial downturn. Regulators, in response, are expected to use a broader scope in enforcing good corporate conduct.
However, despite this heightened regulatory pressure, the incidence of fraud and reported levels of corruption do not appear to be declining, according to the EY report. Of the 2,700 executives surveyed across 59 countries from November 2013 to February 2014, 38% believe bribery and corrupt practices happen widely in business. This is the same percentage recorded two years ago. Moreover, more than one in 10 executives surveyed said their company experienced significant fraud in the past two years, a figure similar to that recorded in 2008.
The stagnant results should be taken as a signal that efforts to battle fraud, corruption, and bribery may be losing momentum. There may be few low-hanging fruit left after companies have initiated their preliminary campaigns. From here on, substantial results in deterring and detecting misconduct may be harder to accomplish. What, then, can companies do to bring compliance to the next level? The EY report suggests a six-pronged approach that goes beyond the initial steps of communicating a code of conduct to the organization and conducting company-wide training.
One is to step up board engagement. The report urges the board to “ask tough questions” and hold senior management more accountable, especially as the C-Suite is especially exposed to risks. Chief executive officers are three times as likely as other respondents to be asked to pay a bribe, according to the EY report. Chief financial officers, meanwhile, are more likely than any other role to justify changes to assumptions relating to valuations and reserves so as to meet financial targets.
To address this, oversight from the board must be continuous and unrelenting. Presence during an anti-corruption campaign launch is not enough. Board members need to exert ongoing and meaningful pressure to ensure positive behavior becomes the standard in the company.
Second, companies are advised to mine “big data” using forensic data analytics to improve compliance and investigations. Testing can cover accounts payable data, vendor master data, expenses and entertainment transactions, payroll and capital projects data, and even external sources such as social media.
The use of such analytics is key to helping the organization assess risks of fraud, bribery, or corruption and identify the necessary and appropriate safeguards as an early deterrent.
Third is the recommendation to conduct anti-corruption due diligence. Transactions, such as mergers and acquisitions (M&A), can be a high-risk area for bribery and corruption. Unfortunately, nearly 40% of businesses never conduct forensic or anti-corruption due diligence as part of their M&A processes, according to the EY report. Forensic data analysis should be applied in this stage as well, as deal breakers are unlikely to surface through questioning alone.
Fourth, companies need to improve their escalation procedures to respond to whistle-blowers, a cyber fraud incident, and violations to minimize damage and speed up the process by which the board is notified. Board engagement is important at this level as well. They should be concerned with how the business is rewarding ethical behavior and not just the usual growth performance indicators. The remuneration committee, for instance, should consider how to monitor performance against this metric.
The last two recommendations have to do with enhancing training and allotting sufficient budget support. Companies are advised to customize anti-bribery and corruption training programs to the job function and level of seniority of people in their organization. Furthermore, the C-Suite needs to be at the forefront of and attend such trainings.
With regard to budget support, the EY report states that internal audit and compliance functions need to be sufficiently funded as they provide valuable assistance in keeping the company out of trouble.
Companies will be wise to consider such concrete recommendations to battle compliance fatigue. In this era of increased regulatory scrutiny and ever increasing fines and reputational damage, it is not the right time to lower our guard against bribery and corruption and other irregularities. Companies should stay on the right path towards driving ethical growth.
Roderick M. Vega is the partner for fraud investigation and dispute services of SGV & Co.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.
source: Businessworld
The issue is becoming more important than ever. According to EY’s 13th Global Fraud Survey, “Overcoming compliance fatigue: Reinforcing commitment to ethical growth”, many of the world’s regulators are stepping up investigations against misconduct. Authorities from the United States, United Kingdom, Germany, Italy, France, Japan and even emerging economies like India, Brazil and China are adopting stronger enforcement against violations such as insider trading, money laundering, price manipulation, cartels, and bribery. Here in the Philippines, high-profile cases in the public and private sectors are progressing through the legal systems as well.
Consumers and investors are likewise increasing their scrutiny in the aftermath of the financial downturn. Regulators, in response, are expected to use a broader scope in enforcing good corporate conduct.
However, despite this heightened regulatory pressure, the incidence of fraud and reported levels of corruption do not appear to be declining, according to the EY report. Of the 2,700 executives surveyed across 59 countries from November 2013 to February 2014, 38% believe bribery and corrupt practices happen widely in business. This is the same percentage recorded two years ago. Moreover, more than one in 10 executives surveyed said their company experienced significant fraud in the past two years, a figure similar to that recorded in 2008.
The stagnant results should be taken as a signal that efforts to battle fraud, corruption, and bribery may be losing momentum. There may be few low-hanging fruit left after companies have initiated their preliminary campaigns. From here on, substantial results in deterring and detecting misconduct may be harder to accomplish. What, then, can companies do to bring compliance to the next level? The EY report suggests a six-pronged approach that goes beyond the initial steps of communicating a code of conduct to the organization and conducting company-wide training.
One is to step up board engagement. The report urges the board to “ask tough questions” and hold senior management more accountable, especially as the C-Suite is especially exposed to risks. Chief executive officers are three times as likely as other respondents to be asked to pay a bribe, according to the EY report. Chief financial officers, meanwhile, are more likely than any other role to justify changes to assumptions relating to valuations and reserves so as to meet financial targets.
To address this, oversight from the board must be continuous and unrelenting. Presence during an anti-corruption campaign launch is not enough. Board members need to exert ongoing and meaningful pressure to ensure positive behavior becomes the standard in the company.
Second, companies are advised to mine “big data” using forensic data analytics to improve compliance and investigations. Testing can cover accounts payable data, vendor master data, expenses and entertainment transactions, payroll and capital projects data, and even external sources such as social media.
The use of such analytics is key to helping the organization assess risks of fraud, bribery, or corruption and identify the necessary and appropriate safeguards as an early deterrent.
Third is the recommendation to conduct anti-corruption due diligence. Transactions, such as mergers and acquisitions (M&A), can be a high-risk area for bribery and corruption. Unfortunately, nearly 40% of businesses never conduct forensic or anti-corruption due diligence as part of their M&A processes, according to the EY report. Forensic data analysis should be applied in this stage as well, as deal breakers are unlikely to surface through questioning alone.
Fourth, companies need to improve their escalation procedures to respond to whistle-blowers, a cyber fraud incident, and violations to minimize damage and speed up the process by which the board is notified. Board engagement is important at this level as well. They should be concerned with how the business is rewarding ethical behavior and not just the usual growth performance indicators. The remuneration committee, for instance, should consider how to monitor performance against this metric.
The last two recommendations have to do with enhancing training and allotting sufficient budget support. Companies are advised to customize anti-bribery and corruption training programs to the job function and level of seniority of people in their organization. Furthermore, the C-Suite needs to be at the forefront of and attend such trainings.
With regard to budget support, the EY report states that internal audit and compliance functions need to be sufficiently funded as they provide valuable assistance in keeping the company out of trouble.
Companies will be wise to consider such concrete recommendations to battle compliance fatigue. In this era of increased regulatory scrutiny and ever increasing fines and reputational damage, it is not the right time to lower our guard against bribery and corruption and other irregularities. Companies should stay on the right path towards driving ethical growth.
Roderick M. Vega is the partner for fraud investigation and dispute services of SGV & Co.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.
source: Businessworld
Friday, June 27, 2014
Firm announces oil flow increase in Aloguinsan
CEBU, Philippines - Barely more than two months since its exploration, Australian firm Gas2Grid Limited has announced the increase in oil production in the Malolos-1 Oil Field in Olango, Aloguinsan, Cebu.
The company has advised that it recorded a very encouraging oil flow after unclogging blocked portions of its hole.
"The increased oil production rate indicates that the remedial work has had some success in clearing the perforations to allow an influx of oil from the reservoirs," read a statement posted via the websitewww.gas2grid.com.
"The Malolos-1 well has again demonstrated that it can produce oil at commercial rates," the company said.
The well has previously produced approximately 200 barrels of oil per day on several occasions but only for short periods.
Oil flow has reportedly been impaired when the holes made on the sandstone become clogged.
The company said the well will continue to be tested to establish longer term oil production rates.
"If the oil production rate declines due to down-hole blockage the company will make a decision on future operations, which might include further remedial work or suspension of test operations whilst various alternatives are considered to exploit the proven oil reservoirs," it added.
An extension of one year starting January 2014 on Service Contract 44 covering the oil exploration in southwestern Cebu was issued by the Department of Energy so Gas2Grid could continue operating the Malolos-1 Oil Field.
The company earlier reported a "contingent resource" of oil in the two well bores it made in Aloguinsan with a "low estimate" (1C) of 6.8 million barrels and a "high estimate" (3C) of 68.1 million barrels, with a "best estimate" (2C) of 20.4 million barrels of "total oil initially in place."
Gas2Grid's extended oil production testing program aims to gather sufficient technical information to confirm commercial viability of the Malolos-1 Oil Field to justify the DOE's act of awarding a 25-year production period to the company.
Gas2Grid earlier said proving commercial production at the oil field would have a very significant impact on the value of the company and would benefit the Philippine economy. source: Freeman
Monday, June 23, 2014
2014 RP GDP predicted
The Philippine export sector is headed for double-digit growth for the third quarter of 2014 as an effect of the improving United States economy but the gross domestic product (GDP) for this year will be “disappointing,” leading publication Market Call predicted in its latest issue.
The publication’s issue this June sees many possibilities, ranging from effects of slow rehabilitation of the Yolanda-hit areas to higher inflation for the end of second quarter due to rice crisis and nonstop increases of fuel in the world market.
Market Call, the joint publication of First Metro Investments Corp., the investment banking arm of Metrobank and the University of Asia and the Pacific capital markets research, said its bold predictions were based on thorough research and market trends.
Though the publication didn’t predict the country’s GDP for 2014, the paper insisted that it is due to “unexciting Q1 2014 earnings result.”
“With Q1 2014 GDP coming at a slower clip versus market’s expectations, we do not see these high market multiples to be sustained in the near future.
Unexciting Q1 2014 earnings results, which failed to meet expectations, support our view that valuations may come down.
In light of the disappointing GDP numbers, we see glamor stocks losing their leadership roles,” the publication said.
If the publication will not be short of its prediction, it will support the foresight of the Philippine Exporters Confederation (PhilExport) of better export figure for next year and 2016.
PhilExport expects export revenues for the merchandise and services sectors to still reach $92 billion and $28 billion by 2016, respectively.
“The hope for booster from the relief and reconstruction spending in Yolanda-stricken areas has to wait for late Q2, as national government has just completed its comprehensive plan,” the publication said.
The entity said the uncontrollable rise in fuel prices in the world market remains a major challenge to the national government. “This, together with revived exports, should easily enable the economy to grow faster (at around 6.3 percent) in Q2.
The entity said the uncontrollable rise in fuel prices in the world market remains a major challenge to the national government. “This, together with revived exports, should easily enable the economy to grow faster (at around 6.3 percent) in Q2.
Fuelled by rising rice prices, due to the delayed decision to import rice and crude oil prices remaining high due to the Middle East and Ukranian crises, inflation would likely pick up pace in Q2.
However, we will likely see it peak at the same time, as rice and oil prices stabilize. With the solid economic data emanating from the US economy and the escape of the Eurozone from a two-year recession, we expect exports to take a double-digit growth path all the way to Q3,” the publication said.
Inflation, the rise of prices of main commodities, is also a major scenario to watch, it said.
“While we are seeing a bumping up of headline inflation rates, supply factors have primarily caused this.
We think inflation rates, unless they unexpectedly jump, may take a back seat in determining bond yields. Besides, with US Treasuries now expected to be soft for the rest of the year, we see a slight to moderate easing of longer-dated bond yields in Q3.
It is also likely NG will resume issuing progressively longer tenor bonds as yields have stabilized. With more issues, secondary trading should also become more active,” Market Call added.
source: Tribune
UBS keeps Philippine forecasts
PHILIPPINE economic growth is expected to remain robust this year, Swiss financial services firm UBS AG yesterday said, but this could slow next year as financial conditions tighten.
Edward Teather, senior economist for ASEAN at UBS, said in a teleconference that the firm was forecasting Philippine gross domestic product (GDP) growth of 6.5% this year and 5.8% in 2015.
The figures are unchanged from April, or before the announcement of the first quarter’s weaker-than-expected 5.7%. Last December, UBS projected growth to reach just 6% this year and 5.3% next year.
“The Philippine economy has shrugged off natural disasters and difficult global economic conditions, and we continue to expect growth in the country to be strong,” Mr. Teather said.
“First quarter expansion was a bit disappointing, but we do not see growth slowing sharply from here.”
The government is targeting GDP growth of 6.5-7.5% this year and 7-8% in 2015.
“[W]e see manufacturing activity bouncing back in the second quarter,” Mr. Teather said.
“Reconstruction efforts for last year’s calamities will also help growth, as well as an expected pickup in exports due to the ongoing global economic recovery,” he added.
This world recovery, which could spur the normalization of easy monetary policies in advanced economies, could lead to tighter domestic financial conditions that will dampen growth.
“Recovery in the US is a double-edged sword. It means less easy policy on the horizon. Our view is that the Federal Reserve will finish tapering its stimulus by the fourth quarter and start raising rates by the second quarter of 2015,” Mr. Teather noted.
“While countries in Asia like the Philippines will benefit from the recovery, especially in terms of trade, the positive credit cycle brought about by easy policy in the US is likely to turn and have negative side effects.”
The Philippines, he said, is among the countries that have reaped the benefits of loose monetary policy.
“Overly easy monetary policy conditions -- both domestic and external -- have supported the Philippines’ growth. There are some concerns of a maturing credit cycle, and our outlook of higher inflation supports this,” Mr. Teather said.
UBS sees domestic inflation this year averaging at 4.2% and, in 2015, at 4.5%.
The Bangko Sentral ng Pilipinas (BSP) aims to keep inflation within 3-5% this year and 2-4% next year.
“We think these inflationary pressures will compel the BSP to increase policy rates, taking the overnight borrowing rate to 4% by end-2014 and then to 5% at the end of next year,” Mr. Teather said.
“During its last meeting, the BSP raised SDA (special deposit account) rates and not the overnight rate. But we think for the next meeting, it will be inclined to raise both SDA and overnight rates...,” he added.
Last June 19, the policy-setting Monetary Board raised SDA rates across all tenors to 2.25% from 2%. Overnight borrowing and lending rates were kept at 3.5% and 5.5%, respectively.
An oil price shock arising from the conflict in Iraq could also prompt a rate hike. The upcoming 2016 elections, meanwhile, would spur government spending next year, which could help offset the rate hike’s impact on growth.
source: Businessworld
Edward Teather, senior economist for ASEAN at UBS, said in a teleconference that the firm was forecasting Philippine gross domestic product (GDP) growth of 6.5% this year and 5.8% in 2015.
The figures are unchanged from April, or before the announcement of the first quarter’s weaker-than-expected 5.7%. Last December, UBS projected growth to reach just 6% this year and 5.3% next year.
“The Philippine economy has shrugged off natural disasters and difficult global economic conditions, and we continue to expect growth in the country to be strong,” Mr. Teather said.
“First quarter expansion was a bit disappointing, but we do not see growth slowing sharply from here.”
The government is targeting GDP growth of 6.5-7.5% this year and 7-8% in 2015.
“[W]e see manufacturing activity bouncing back in the second quarter,” Mr. Teather said.
“Reconstruction efforts for last year’s calamities will also help growth, as well as an expected pickup in exports due to the ongoing global economic recovery,” he added.
This world recovery, which could spur the normalization of easy monetary policies in advanced economies, could lead to tighter domestic financial conditions that will dampen growth.
“Recovery in the US is a double-edged sword. It means less easy policy on the horizon. Our view is that the Federal Reserve will finish tapering its stimulus by the fourth quarter and start raising rates by the second quarter of 2015,” Mr. Teather noted.
“While countries in Asia like the Philippines will benefit from the recovery, especially in terms of trade, the positive credit cycle brought about by easy policy in the US is likely to turn and have negative side effects.”
The Philippines, he said, is among the countries that have reaped the benefits of loose monetary policy.
“Overly easy monetary policy conditions -- both domestic and external -- have supported the Philippines’ growth. There are some concerns of a maturing credit cycle, and our outlook of higher inflation supports this,” Mr. Teather said.
UBS sees domestic inflation this year averaging at 4.2% and, in 2015, at 4.5%.
The Bangko Sentral ng Pilipinas (BSP) aims to keep inflation within 3-5% this year and 2-4% next year.
“We think these inflationary pressures will compel the BSP to increase policy rates, taking the overnight borrowing rate to 4% by end-2014 and then to 5% at the end of next year,” Mr. Teather said.
“During its last meeting, the BSP raised SDA (special deposit account) rates and not the overnight rate. But we think for the next meeting, it will be inclined to raise both SDA and overnight rates...,” he added.
Last June 19, the policy-setting Monetary Board raised SDA rates across all tenors to 2.25% from 2%. Overnight borrowing and lending rates were kept at 3.5% and 5.5%, respectively.
An oil price shock arising from the conflict in Iraq could also prompt a rate hike. The upcoming 2016 elections, meanwhile, would spur government spending next year, which could help offset the rate hike’s impact on growth.
source: Businessworld
AEV consortium wins Davao water contract
ABOITIZ Equity Ventures, Inc. (AEV) and its partner have been awarded the contract to supply bulk water to the Davao City Water District (DCWD), the listed holding firm said on Monday.
AEV said J.V. Angeles Construction Corp. (JVACC) received on behalf of the Jose V. Angeles Construction Consortium the Notice of Award (NoA) from DCWD for “the financing, design, construction, and operations of the Tamugan Surface Water Developments Project.”
“The JVACC-AEV Consortium will have to comply with the requirements in the NoA before the Joint Venture Agreement with DCWD can be executed,” AEV said.
AEV in May 2013 announced that it will be undertaking the bulk water project in Davao City under a joint venture with JVACC.
“The proposed venture includes the construction of both a hydroelectric-powered bulk water treatment facility and the conveyance system needed to deliver treated bulk water to numerous DCWD delivery points,” AEV had said earlier.
The holding firm had said JVACC has submitted a proposal to DCWD for the supply of 300 million liters per day of potable bulk water.
JVACC has also tapped AEV affiliate Hedcor, Inc. to provide the necessary technical and operational expertise for the hydroelectric components of the projects.
Hedcor engages in the development of hydropower projects across the country.
JVACC is one of the leading contractors in the Philippines with 48 years of experience in the construction and development of water-related infrastructure.
AEV, the holding firm of the Aboitiz family’s businesses, said it has set aside around P88 billion for its capital expenditures this year, up from P59 billion a year earlier.
AEV lost P1.25 or 2.22% to close at P55.15 on Monday. -- Claire-Ann Marie C. Feliciano
source: Businessworld
AEV said J.V. Angeles Construction Corp. (JVACC) received on behalf of the Jose V. Angeles Construction Consortium the Notice of Award (NoA) from DCWD for “the financing, design, construction, and operations of the Tamugan Surface Water Developments Project.”
“The JVACC-AEV Consortium will have to comply with the requirements in the NoA before the Joint Venture Agreement with DCWD can be executed,” AEV said.
AEV in May 2013 announced that it will be undertaking the bulk water project in Davao City under a joint venture with JVACC.
“The proposed venture includes the construction of both a hydroelectric-powered bulk water treatment facility and the conveyance system needed to deliver treated bulk water to numerous DCWD delivery points,” AEV had said earlier.
The holding firm had said JVACC has submitted a proposal to DCWD for the supply of 300 million liters per day of potable bulk water.
JVACC has also tapped AEV affiliate Hedcor, Inc. to provide the necessary technical and operational expertise for the hydroelectric components of the projects.
Hedcor engages in the development of hydropower projects across the country.
JVACC is one of the leading contractors in the Philippines with 48 years of experience in the construction and development of water-related infrastructure.
AEV, the holding firm of the Aboitiz family’s businesses, said it has set aside around P88 billion for its capital expenditures this year, up from P59 billion a year earlier.
AEV lost P1.25 or 2.22% to close at P55.15 on Monday. -- Claire-Ann Marie C. Feliciano
source: Businessworld
Sunday, June 22, 2014
Three bidders for LTO IT project submit ‘proofs of concept’
THREE bidders for the P3.4-billion Information Technology (IT)
project of the Land Transportation Office (LTO) have submitted their
“proofs of concept” to transport authorities.
These companies are the group of Kaisa Consulting Co. Inc.-FPT Information Systems Corporation-NTT Data Corporation; the Indra Sistemas S.A.-Metro Pacific Tollways Corp. joint venture; and the group of Avesco Marketing Corp. and Sung Gwang Co. Ltd.
Avesco and Sung Gwang’s group earlier failed the initial bidding process, but the Bids and Awards Committee (BAC) later decided to grant its motion for reconsideration.
The upgrading of the LTO’s IT system is expected to minimize red tape and make it more convenient for the public to deal with the transport office.
“Unnecessary steps will be cut out, online transactions will be enabled and human intervention will be minimized in order to curb corrupt practices,” according to Secretary Joseph Emilio Abaya of the Department of Transportation and Communications (DOTC).
The LTO IT project initially cost P8.2-billion but a failure of bidding prompted DOTC to separate the bid components. The first part covers only the software and data center components.
The next bidding stage will be for the nationwide rollout, including hardware requirements.
At the first stage of the bidding, seven groups failed to comply with various requirements of the procurement law and bidding rules and were declared ineligible.
They are: Avesco Marketing Corporation-Sung Gwang Co. Ltd.; Omniprime Marketing and Heitech Padu Berhad; Strategic Planning, Applied Management Konsult, Inc. and Accesos Holograficos SS de CV; Infotech Global Pte. Ltd.-Infotech Private Limited; Oberthur Technologies-Comfac Corporation; NPMI-NEC; and, DVK Philippines Enterprises and Leidos Holdings, Inc.
DOTC’s BAC, using the non-discretionary “pass/fail” criterion mandated by the procurement law, declared three firms as eligible.
One-on-one meetings will soon be held with the eligible bidders to finalize the project’s specifications. A pre-bid conference will then be held to discuss the final technical specifications of the project.
The three firms presented their respective proofs of concept for the Driver’s Licensing System and Motor Vehicle Registration System to the BAC last week to confirm their eligibility to bid for the project.
Bid submission of technical and financial proposals is targeted for the last week of August 2014, after which the complying bids will be evaluated and post-qualified in accordance with procurement law.
The DOTC aims to have the entire LTO IT project fully operational by the third quarter of 2015, in order to deliver more user-friendly, convenient services to the public.
A legal case seeking to stop the government from proceeding with the project is now pending with the Regional Trial Court of Mandaluyong City. The DOTC is confident the court will rule in its favor.
SOURCE: Business Mirror
These companies are the group of Kaisa Consulting Co. Inc.-FPT Information Systems Corporation-NTT Data Corporation; the Indra Sistemas S.A.-Metro Pacific Tollways Corp. joint venture; and the group of Avesco Marketing Corp. and Sung Gwang Co. Ltd.
Avesco and Sung Gwang’s group earlier failed the initial bidding process, but the Bids and Awards Committee (BAC) later decided to grant its motion for reconsideration.
The upgrading of the LTO’s IT system is expected to minimize red tape and make it more convenient for the public to deal with the transport office.
“Unnecessary steps will be cut out, online transactions will be enabled and human intervention will be minimized in order to curb corrupt practices,” according to Secretary Joseph Emilio Abaya of the Department of Transportation and Communications (DOTC).
The LTO IT project initially cost P8.2-billion but a failure of bidding prompted DOTC to separate the bid components. The first part covers only the software and data center components.
The next bidding stage will be for the nationwide rollout, including hardware requirements.
At the first stage of the bidding, seven groups failed to comply with various requirements of the procurement law and bidding rules and were declared ineligible.
They are: Avesco Marketing Corporation-Sung Gwang Co. Ltd.; Omniprime Marketing and Heitech Padu Berhad; Strategic Planning, Applied Management Konsult, Inc. and Accesos Holograficos SS de CV; Infotech Global Pte. Ltd.-Infotech Private Limited; Oberthur Technologies-Comfac Corporation; NPMI-NEC; and, DVK Philippines Enterprises and Leidos Holdings, Inc.
DOTC’s BAC, using the non-discretionary “pass/fail” criterion mandated by the procurement law, declared three firms as eligible.
One-on-one meetings will soon be held with the eligible bidders to finalize the project’s specifications. A pre-bid conference will then be held to discuss the final technical specifications of the project.
The three firms presented their respective proofs of concept for the Driver’s Licensing System and Motor Vehicle Registration System to the BAC last week to confirm their eligibility to bid for the project.
Bid submission of technical and financial proposals is targeted for the last week of August 2014, after which the complying bids will be evaluated and post-qualified in accordance with procurement law.
The DOTC aims to have the entire LTO IT project fully operational by the third quarter of 2015, in order to deliver more user-friendly, convenient services to the public.
A legal case seeking to stop the government from proceeding with the project is now pending with the Regional Trial Court of Mandaluyong City. The DOTC is confident the court will rule in its favor.
SOURCE: Business Mirror
Foreign chambers ‘bugging’ Congress on Cha-cha move
Foreign
investors are keenly awaiting the outcome of the Charter- Change
(Cha-cha) initiatives in both houses of Congress to relax the
foreign-ownership restrictions in the country, House Speaker Feliciano
Belmonte Jr. said.
Belmonte
said he has been getting numerous inquiries and visits from foreign
business chambers in relation to the developments on the Cha-cha front.
He
said the foreign-ownership restrictions in the Constitution are really
hindering the flow of investments into the country; and even the
Department of Trade and Industry (DTI) has recognized this, as the
agency is also being bugged by concerns on this issue.
“Definitely, as I mentioned to you, I noted in the headline of one of the newspapers [BusinessMirror’s
June 10, 2014 issue] that the DTI is in favor of our proposal. This is
because they could not avoid talking about it [Cha-cha] because of the
series of meetings with the foreign chambers,” Belmonte said in a news
conference.
Under
Article XII of the Constitution, foreign investors are prohibited to
own more than 40 percent of real properties and certain businesses. They
are also totally restricted to undertake certain business ventures in
the country, including owning any company in the media industry.
Belmonte
has already filed Houses Resolution 1, which was replicated by Sen.
Ralph Recto in the Senate, seeking to amend economic provisions on the
60-40 rule that limits foreign ownership of certain activities in the
Philippines.
The
resolution seeks to include the phrase “unless provided by law” in the
foreign-ownership provision of the Constitution, particularly land
ownership, public utilities, natural resources, media and advertising
industries.
Belmonte
said he recently had talks with European Union (EU) and United States
representatives and companies to discuss the restriction on the entry of
foreign investments into the country.
“The
first [meeting] is [with] the US companies that are involved in the
Asean [Association of Southeast Asian Nations], then followed by the EU
companies that want to invest in the Philippines. A lot of them are very
interested in it [relaxing restriction on foreign ownership] because
what we want really is real investment...foreign direct investments,
which would be creating jobs and also creating economic opportunities
for the country,” Belmonte said.
Foreign
investors, he said, are closely monitoring the developments in the
Cha-cha initiative because they also want to fully acquire properties
where they will put up their business.
According
to Belmonte, the 16th Congress is prioritizing Cha-cha, with the lower
chamber as the main proponent of the measure. Senators would still wait
for the House version once it passes the third reading.
The
House Committee on Constitutional Amendments said the committee report
is now being prepared to be presented in the plenary for the second
reading when second regular session starts on July 28.
The
amendments to the Charter will be approved through separate voting by
both Chambers, with a three-fourths vote required from them.
He reminded that growth has shifted from the West to the East and investors are now interested to bring their money to Asia.
Afraid of P-Noy’s rejection
Belmonte,
however, admitted that he did not yet consult President Aquino on the
Cha-cha initiative because he is afraid that this might be rejected.
“Have I talked to the President about this Cha-cha? The fact of the matter is that I have not. Dahil baka, sabihin niya sa akin, ‘No!’ Di mapipilitan akong magsabing ‘stop.’ Oo, natatakot ako. [Because
he might tell me ‘No!’ Then I would be forced to say ‘stop!’ Yes, I am
afraid.] So I said, ‘Let’s go ahead and do our thing,’” Belmonte said.
The
Speaker also said there is no rule mandating Congress to ask permission
from the President first, saying Cha-cha should be submitted to the
people through referendum or plebiscite.
The Palace has maintained its stance against Cha-cha until 2016, saying the Congress is wasting time on it.
Belmonte said he hopes President Aquino will not actively campaign against the passage of the Cha-cha.
He
added that he is confident that members of the ruling Liberal Party at
the lower chamber will join him in passing the resolution.
Belmonte
also assured the public the amendments are purely for the economic
provisions, saying he will not allow any member to insert any provision
other than what is specified in his resolution.
Plebiscite
Belmonte said he is planning to incorporate a plebiscite for Cha-cha with the 2016 national and local elections.
Belmonte
said the government may hold the plebiscite for Cha-cha alongside the
2016 national elections instead of spending a separate election next
year, which needs at least P7 billion.
He
also said most Filipino voters are participating during presidential
elections. According to the Commission on Elections, the highest
turnout of voting population participating in a particular election is
during presidential elections.
“Instead
of having a separate plebiscite, I am now thinking how we can have it
ride for instance in the next elections,” Belmonte said, adding, “doing
it that way, it will be well discussed because a lot of people will be
talking about it.”
Business support
As the
unemployment rate in the country is increasing, Makati Business Club
Chairman Ramon del Rosario Jr. is also pushing for the amendments of the
Constitution, particularly the economic provisions to attract foreign
direct investments.
Del
Rosario, addressing the House of Representatives meeting with the Joint
Foreign Chambers and Philippine business groups, said the government
should consider changes in the provisions of the Constitution that
restrict complete foreign ownership of estates and corporations.
According
to him the government should address the increasing unemployment
rate, as he considers it as “a very serious issue” and a “more serious
crisis than Supertyphoon Yolanda.”
“We
really need to put everything we’ve got together to try and address
this issue, including things like looking at our Constitution and what
are the restrictions there that impede the inflow of investments into
our economy,” he said. “Because to create jobs, you really need
investments. Let us open up those areas of our economy, such as mining,
which is still at a standstill, where more employment can be created.”
Lobby money
Meanwhile,
Rep. Carlos Isagani Zarate of Bayan Muna said the proposed Cha-cha
would only open the gates for lobby money of big foreign corporations in
Congress and Malacañang.
He
also denounced the participation in the country’s internal affairs,
particularly in constitutional matters, of the American, European and
other foreign chambers of commerce.
“The
foreign powers are the spearhead of the pro-imperialist and
anti-Filipino Charter-change but they cannot do it without the consent
of the President and Congress serving as a willing tool,” he said.
source: Business Mirror
LGUs’ ineligibility delays e-trike project
A “STRINGENT” requirement for local
government units (LGUs) has been delaying the awarding of the contract
to supply and deliver the first 3,000 units of electric tricycles
(e-trikes), a Cabinet official said.
“The awarding is on hold because there are no off-takers. Actually, there are some who want, but when Land Bank [of the Philippines] laid out the condition, a lot of the LGUs did not qualify, especially in the seal of good housekeeping,” Energy Secretary Carlos Jericho L. Petilla said in a recent interview.
The seal of good housekeeping is given by the Department of Interior and Local Government to recognize LGUs’ good performance in terms of planning, fiscal management, transparency and accountability, and valuing of performance information.
“Some of the LGUs have good finances, but they don’t have the seal of good housekeeping,” Mr. Petilla said.
“We are now asking Secretary [Cesar V. Purisima] of Finance to relax on the requirements. If we take out the stringent requirement, then there will be more qualified LGUs to participate in the program,” he added.
With the current scenario, Mr. Petilla said, the government may not be able to meet the target to award 15,000 e-trikes this year.
“We hope to resolve this immediately. Otherwise, the project cannot move. I’m looking at maximum 3,000 e-trikes this year, minimum 500 [units],” said Mr. Petilla.
Four foreign companies participated in the auction to supply the first 3,000 units in August last year: Lirica Rising Sun & Shoyo-Terra Group (from Japan); Uzushio Electric Co. Ltd. (Japan); Eco One Co. (Korea); and Teco Electric & Machinery Co. Ltd. (Taiwan).
Upon securing a no-objection letter from the Asian Development Bank (ADB), the department aimed to award the contract within the first quarter.
The e-trikes were supposed to be deployed in Luzon. Specifically, 2,000 units were allotted for National Capital Region (NCR) and 1,000 units for Regions IV-A (Cavite, Laguna, Batangas, Rizal and Quezon) and IV-B (Mindoro, Marinduque, Romblon and Palawan).
The e-trike project -- a joint undertaking of the ADB and the DoE -- aims to replace some 100,000 tricycles that run on gasoline by 2017.
The ADB allotted a $300-million funding for the $504-million project. The government will shell out the remaining $99 million, and the Clean Technology Fund, $105 million.
These e-trikes will be deployed to various LGUs under a five-year rent-to-own scheme. After that, the tricycle drivers will already own the units.
source: Businessworld
“The awarding is on hold because there are no off-takers. Actually, there are some who want, but when Land Bank [of the Philippines] laid out the condition, a lot of the LGUs did not qualify, especially in the seal of good housekeeping,” Energy Secretary Carlos Jericho L. Petilla said in a recent interview.
The seal of good housekeeping is given by the Department of Interior and Local Government to recognize LGUs’ good performance in terms of planning, fiscal management, transparency and accountability, and valuing of performance information.
“Some of the LGUs have good finances, but they don’t have the seal of good housekeeping,” Mr. Petilla said.
“We are now asking Secretary [Cesar V. Purisima] of Finance to relax on the requirements. If we take out the stringent requirement, then there will be more qualified LGUs to participate in the program,” he added.
With the current scenario, Mr. Petilla said, the government may not be able to meet the target to award 15,000 e-trikes this year.
“We hope to resolve this immediately. Otherwise, the project cannot move. I’m looking at maximum 3,000 e-trikes this year, minimum 500 [units],” said Mr. Petilla.
Four foreign companies participated in the auction to supply the first 3,000 units in August last year: Lirica Rising Sun & Shoyo-Terra Group (from Japan); Uzushio Electric Co. Ltd. (Japan); Eco One Co. (Korea); and Teco Electric & Machinery Co. Ltd. (Taiwan).
Upon securing a no-objection letter from the Asian Development Bank (ADB), the department aimed to award the contract within the first quarter.
The e-trikes were supposed to be deployed in Luzon. Specifically, 2,000 units were allotted for National Capital Region (NCR) and 1,000 units for Regions IV-A (Cavite, Laguna, Batangas, Rizal and Quezon) and IV-B (Mindoro, Marinduque, Romblon and Palawan).
The e-trike project -- a joint undertaking of the ADB and the DoE -- aims to replace some 100,000 tricycles that run on gasoline by 2017.
The ADB allotted a $300-million funding for the $504-million project. The government will shell out the remaining $99 million, and the Clean Technology Fund, $105 million.
These e-trikes will be deployed to various LGUs under a five-year rent-to-own scheme. After that, the tricycle drivers will already own the units.
source: Businessworld
AlloyMTD interested in lakeshore highway project
A SECOND group has expressed interest in
the P123-billion Laguna Lakeshore Expressway Dike project, due for
auction in December, but its participation will depend on finding a
partner that can maximize the project’s property development potential.
AlloyMTD Philippines, Inc. President Isaac S. David said in a text message yesterday: “We’ll look at the Laguna de Bay expressway if we can find a suitable real estate developer partner.”
The biggest public-private partnership (PPP) project under the Aquino administration to date has also drawn interest from Metro Pacific Investments Corp. (MPIC).
The project concept is for 47-kilometer flood control dike to carry on its top surface a high-speed six-lane expressway, running offshore at least 500 meters from Laguna de Bay. It is intended to divert traffic from the heavily traveled Bicutan-Calamba corridor, which abuts important tracts of residential, commercial and industrial land in southern Metro Manila.
Highway access and the placement of exits is especially crucial to property values in the southern suburbs, where most of the traffic goes through only two major roads -- the South Luzon Expressway on the Laguna side and Coastal Road on the Cavite-Las Piñas end.
A partner from the property industry would give AlloyMTD a better idea of how much to offer, based on potential profits from the real estate side, which may not figure in the thinking of groups focused on pure infrastructure.
Mr. David added that AlloyMTD is also pursuing several PPP projects at the local government unit level and power generation-related projects, but did not provide details.
Metro Pacific Tollways Corp. was the first to express interest in the project.
Its President Ramoncito S. Fernandez said on June 17 that the group is “interested” in the lakeshore expressway project, adding that “it is a very ambitious project” that enjoys Public Works Secretary Rogelio L. Singson’s strong backing.
The lakeshore expressway was approved on June 19 by the National Economic and Development Authority (NEDA) Board, chaired by President Benigno S. C. Aquino III.
The project was discussed at the NEDA Board meeting on May 29, but was not approved due to environmental and technical concerns, such as the height of the dike, the impact on water circulation in Laguna de Bay and the placement of pumping stations.
Mr. Singson said in a text message last Friday that the Department of Public Works and Highways “will issue terms of reference and bid by December this year, while its construction is expected to commence in late 2015 and end in 2021.”
PPP Center Project Manager Ramoncito C. Jimenez has said that the start of the design and construction phase is set in April 2015, and is expected to be operational by 2022. -- Chrisee Jalyssa V. dela Paz
source: Businessworld
AlloyMTD Philippines, Inc. President Isaac S. David said in a text message yesterday: “We’ll look at the Laguna de Bay expressway if we can find a suitable real estate developer partner.”
The biggest public-private partnership (PPP) project under the Aquino administration to date has also drawn interest from Metro Pacific Investments Corp. (MPIC).
The project concept is for 47-kilometer flood control dike to carry on its top surface a high-speed six-lane expressway, running offshore at least 500 meters from Laguna de Bay. It is intended to divert traffic from the heavily traveled Bicutan-Calamba corridor, which abuts important tracts of residential, commercial and industrial land in southern Metro Manila.
Highway access and the placement of exits is especially crucial to property values in the southern suburbs, where most of the traffic goes through only two major roads -- the South Luzon Expressway on the Laguna side and Coastal Road on the Cavite-Las Piñas end.
A partner from the property industry would give AlloyMTD a better idea of how much to offer, based on potential profits from the real estate side, which may not figure in the thinking of groups focused on pure infrastructure.
Mr. David added that AlloyMTD is also pursuing several PPP projects at the local government unit level and power generation-related projects, but did not provide details.
Metro Pacific Tollways Corp. was the first to express interest in the project.
Its President Ramoncito S. Fernandez said on June 17 that the group is “interested” in the lakeshore expressway project, adding that “it is a very ambitious project” that enjoys Public Works Secretary Rogelio L. Singson’s strong backing.
The lakeshore expressway was approved on June 19 by the National Economic and Development Authority (NEDA) Board, chaired by President Benigno S. C. Aquino III.
The project was discussed at the NEDA Board meeting on May 29, but was not approved due to environmental and technical concerns, such as the height of the dike, the impact on water circulation in Laguna de Bay and the placement of pumping stations.
Mr. Singson said in a text message last Friday that the Department of Public Works and Highways “will issue terms of reference and bid by December this year, while its construction is expected to commence in late 2015 and end in 2021.”
PPP Center Project Manager Ramoncito C. Jimenez has said that the start of the design and construction phase is set in April 2015, and is expected to be operational by 2022. -- Chrisee Jalyssa V. dela Paz
source: Businessworld
Thursday, June 12, 2014
Philippines aims high on FDI
THOUGH early performance has been sluggish,
officials in the Philippines are confident the strong foreign direct
investment (FDI) showing from last year will be maintained in 2014, with
an improved business climate along with political and economic
stability as the Philippines’ main selling points. Even so, competition
for investments is likely to remain keen.
On May 13, Trade Secretary Gregory L Domingo said the government expected FDI growth to match the 20% increase posted in 2013, even though investment inflows were down in the opening two months of the year.
“We expect at least a 20% growth in FDI this year to be driven by the increasing competitiveness of the Philippines, in particular the increasing capability of our workforce,” Mr. Domingo said during an address to a business forum in Manila.
If the government’s target is met, it will mean the Philippines will attract around $4.7 billion this year, after almost $3.9 billion flowed into the economy in 2013, the highest figure in more than a decade.
The secretary’s forecast came a day after the Bangko Sentral ng Pilipinas (BSP) issued a report on FDI inflows for February, showing net inflows of $350 million, 59% down on the same month in 2013. The sharp decline took FDI for the first two months of 2014 to $1.3 billion, 24.7% less than the same period last year. One of the reasons given by the BSP in its report issued on May 12 was a higher than usual outflow of funds.
“This resulted from sustained lending by parent companies abroad to their local subsidiaries/affiliates to support existing operations and to fund the expansion of their businesses in the country,” the BSP said.
Should the BSP be correct in its assessment of outflows, the weaker-than-expected February result could be a one-off, with a stronger movement of inbound capital to be expected in subsequent months.
MANUFACTURING FDI DESTINATION
If, as the government and other agencies have forecast, FDI does continue its strong inward flow, the manufacturing sector could be one of the leading beneficiaries. Indeed, overseas high-tech firms are being tapped as one segment that could make the move to establish a base in the Philippines over the longer term, according to the Philippine Chamber of Commerce and Industry (PCCI). In part, this would be a result of improved investment opportunities but also from the Philippines recently being removed from the US Trade Representative Office’s Special 301 Watch List, meaning Washington has reduced the level of violations, the PCCI said.
Last year, the Philippines’ manufacturing component expanded by 10%, with some of this growth driven by higher levels of FDI. This performance is likely to be built on this year, with GDP predicted to expand by 7% or more, in line with the 2013 result. Alongside manufacturing, the chamber said other sectors that could attract greater FDI this year were software and information technology, chemicals and food processing.
In March, the BSP forecast that FDI inflows would remain strong for 2014, with a number of factors contributing to expected high investment levels being maintained. Among these, the bank cited continued growth, stable inflation and the country’s solid external payments position as domestic factors that could attract FDI, while an external push could come from the ongoing recovery of the global economy.
BEST PLACED TO POST FDI GROWTH
Another to talk up the Philippines’ FDI prospects for this year was HSBC. In a report issued at the end of April, the bank said the country was best placed of the ASEAN-5 economies to attract higher levels of FDI, while both Malaysia and Thailand could fall back. Compared with Singapore, Malaysia, Indonesia and Thailand, the Philippines was in a relatively favorable situation, given the lower degree of leverage and its current account surplus, the report said. These factors made its less vulnerable to a tightening in global financial conditions and more appealing to overseas investors.
While HSBC may be upbeat about the Philippines’ appeal as an FDI destination, that appeal is relative. All the other members of the ASEAN-5 have outperformed the Philippines in recent years, with Singapore posting a net FDI inflow of $56.17 billion in 2012, with Indonesia attracting $19.85 billion; Thailand, $10.67 billion; and Malaysia, $9.4 billion for that year, compared with Manila’s $3.2 billion.
source: Businessworld
On May 13, Trade Secretary Gregory L Domingo said the government expected FDI growth to match the 20% increase posted in 2013, even though investment inflows were down in the opening two months of the year.
“We expect at least a 20% growth in FDI this year to be driven by the increasing competitiveness of the Philippines, in particular the increasing capability of our workforce,” Mr. Domingo said during an address to a business forum in Manila.
If the government’s target is met, it will mean the Philippines will attract around $4.7 billion this year, after almost $3.9 billion flowed into the economy in 2013, the highest figure in more than a decade.
The secretary’s forecast came a day after the Bangko Sentral ng Pilipinas (BSP) issued a report on FDI inflows for February, showing net inflows of $350 million, 59% down on the same month in 2013. The sharp decline took FDI for the first two months of 2014 to $1.3 billion, 24.7% less than the same period last year. One of the reasons given by the BSP in its report issued on May 12 was a higher than usual outflow of funds.
“This resulted from sustained lending by parent companies abroad to their local subsidiaries/affiliates to support existing operations and to fund the expansion of their businesses in the country,” the BSP said.
Should the BSP be correct in its assessment of outflows, the weaker-than-expected February result could be a one-off, with a stronger movement of inbound capital to be expected in subsequent months.
MANUFACTURING FDI DESTINATION
If, as the government and other agencies have forecast, FDI does continue its strong inward flow, the manufacturing sector could be one of the leading beneficiaries. Indeed, overseas high-tech firms are being tapped as one segment that could make the move to establish a base in the Philippines over the longer term, according to the Philippine Chamber of Commerce and Industry (PCCI). In part, this would be a result of improved investment opportunities but also from the Philippines recently being removed from the US Trade Representative Office’s Special 301 Watch List, meaning Washington has reduced the level of violations, the PCCI said.
Last year, the Philippines’ manufacturing component expanded by 10%, with some of this growth driven by higher levels of FDI. This performance is likely to be built on this year, with GDP predicted to expand by 7% or more, in line with the 2013 result. Alongside manufacturing, the chamber said other sectors that could attract greater FDI this year were software and information technology, chemicals and food processing.
In March, the BSP forecast that FDI inflows would remain strong for 2014, with a number of factors contributing to expected high investment levels being maintained. Among these, the bank cited continued growth, stable inflation and the country’s solid external payments position as domestic factors that could attract FDI, while an external push could come from the ongoing recovery of the global economy.
BEST PLACED TO POST FDI GROWTH
Another to talk up the Philippines’ FDI prospects for this year was HSBC. In a report issued at the end of April, the bank said the country was best placed of the ASEAN-5 economies to attract higher levels of FDI, while both Malaysia and Thailand could fall back. Compared with Singapore, Malaysia, Indonesia and Thailand, the Philippines was in a relatively favorable situation, given the lower degree of leverage and its current account surplus, the report said. These factors made its less vulnerable to a tightening in global financial conditions and more appealing to overseas investors.
While HSBC may be upbeat about the Philippines’ appeal as an FDI destination, that appeal is relative. All the other members of the ASEAN-5 have outperformed the Philippines in recent years, with Singapore posting a net FDI inflow of $56.17 billion in 2012, with Indonesia attracting $19.85 billion; Thailand, $10.67 billion; and Malaysia, $9.4 billion for that year, compared with Manila’s $3.2 billion.
source: Businessworld
U.S. Removes the Philippines from the Special 301 Watch List
Washington, D.C. – The Office of the United
States Trade Representative announces today that it has removed the
Philippines from the Special 301 Watch List.
USTR has determined to remove the Philippines from the Special 301 Watch List. The Philippines has appeared on the Watch List or Priority Watch List continuously since 1994, and was first listed in 1989. In recent years, the government has enacted a series of significant legislative and regulatory reforms to enhance the protection and enforcement of intellectual property rights in the Philippines. Philippine authorities have also made laudable civil and administrative enforcement gains. Although significant challenges remain, the commitment of Philippine authorities and the results achieved merit this change in status. The United States will continue to engage with the Philippines to address unresolved and future challenges.
Background: Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (1994), under the Special 301 provisions, USTR must identify those countries that deny adequate and effective protection for intellectual property rights (IPR) or deny fair and equitable market access for persons that rely on intellectual property protection.
USTR has created a "Priority Watch List" and "Watch List" under the Special 301 provisions. A trading partner’s placement on the Priority Watch List or Watch List indicates that particular problems exist in that country or economy with respect to IPR protection, enforcement, or market access for persons relying on intellectual property. Trading partners on the Priority Watch List become the focus of increased bilateral attention concerning the problem areas.
source: Office of the US Trade Representative, April 2014
USTR has determined to remove the Philippines from the Special 301 Watch List. The Philippines has appeared on the Watch List or Priority Watch List continuously since 1994, and was first listed in 1989. In recent years, the government has enacted a series of significant legislative and regulatory reforms to enhance the protection and enforcement of intellectual property rights in the Philippines. Philippine authorities have also made laudable civil and administrative enforcement gains. Although significant challenges remain, the commitment of Philippine authorities and the results achieved merit this change in status. The United States will continue to engage with the Philippines to address unresolved and future challenges.
Background: Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (1994), under the Special 301 provisions, USTR must identify those countries that deny adequate and effective protection for intellectual property rights (IPR) or deny fair and equitable market access for persons that rely on intellectual property protection.
USTR has created a "Priority Watch List" and "Watch List" under the Special 301 provisions. A trading partner’s placement on the Priority Watch List or Watch List indicates that particular problems exist in that country or economy with respect to IPR protection, enforcement, or market access for persons relying on intellectual property. Trading partners on the Priority Watch List become the focus of increased bilateral attention concerning the problem areas.
source: Office of the US Trade Representative, April 2014
Investment grade rating affirmed
THE PHILIPPINES again cemented its
investment grade status with the Japan Credit Rating Agency (JCRA)
affirming its rating and outlook on the country.
Affirmed were the BBB rating and stable outlook granted May last year, with the JCRA noting the Philippines’ continued resilience to external shocks, its robust economic growth, stable political climate and its healthy government finances.
The country is also deemed investment grade by the three major credit raters: Fitch Ratings, Standard & Poor’s, and Moody’s Investors Service.
The country’s economic growth, the JCRA noted, is supported by robust domestic demand underpinned by remittances, plus revenues from tourism and outsourcing that likewise buoy its external position.
“JCRA is of the view that the Philippine economy, achieving a 7.2% growth in 2013, will grow faster than 6% in 2014 on strong domestic demand,” it said in a statement.
The agency said it also expected the country to maintain its fiscal soundness as the government continued to enhance its tax collection efficiency and legislative reforms such as the rationalization of fiscal incentives.
“Despite the growing volatility of portfolio capital inflows and outflows, the concern over external liquidity is easing, given the country’s increasing foreign exchange reserves that are more than enough to cover its external debt.”
The JCRA, however, noted that its ratings were constrained by the Philippines’ “challenging investment environment, in particular its inadequate infrastructure...”.
“The country definitely needs to develop infrastructure and improve the investment environment to attain rapid and sustainable economic growth. JCR will watch how the government will address the challenge and how much progress it will make,” it said.
“It will be imperative for the government to further strengthen its tax base in order to ensure infrastructure development without undermining the momentum for improvement of its fiscal position.”
It also pointed out that while the banking sector remained healthy -- given the low amount of soured loans and adequate capital of institutions -- lending remained limited compared to the economy’s size.
This, the JCRA said, indicates “a further deepening and diversification of the financial sector is imperative to promote capital formation through increased equipment investment”. -- Bettina Faye V. Roc
source: Businessworld
Affirmed were the BBB rating and stable outlook granted May last year, with the JCRA noting the Philippines’ continued resilience to external shocks, its robust economic growth, stable political climate and its healthy government finances.
The country is also deemed investment grade by the three major credit raters: Fitch Ratings, Standard & Poor’s, and Moody’s Investors Service.
The country’s economic growth, the JCRA noted, is supported by robust domestic demand underpinned by remittances, plus revenues from tourism and outsourcing that likewise buoy its external position.
“JCRA is of the view that the Philippine economy, achieving a 7.2% growth in 2013, will grow faster than 6% in 2014 on strong domestic demand,” it said in a statement.
The agency said it also expected the country to maintain its fiscal soundness as the government continued to enhance its tax collection efficiency and legislative reforms such as the rationalization of fiscal incentives.
“Despite the growing volatility of portfolio capital inflows and outflows, the concern over external liquidity is easing, given the country’s increasing foreign exchange reserves that are more than enough to cover its external debt.”
The JCRA, however, noted that its ratings were constrained by the Philippines’ “challenging investment environment, in particular its inadequate infrastructure...”.
“The country definitely needs to develop infrastructure and improve the investment environment to attain rapid and sustainable economic growth. JCR will watch how the government will address the challenge and how much progress it will make,” it said.
“It will be imperative for the government to further strengthen its tax base in order to ensure infrastructure development without undermining the momentum for improvement of its fiscal position.”
It also pointed out that while the banking sector remained healthy -- given the low amount of soured loans and adequate capital of institutions -- lending remained limited compared to the economy’s size.
This, the JCRA said, indicates “a further deepening and diversification of the financial sector is imperative to promote capital formation through increased equipment investment”. -- Bettina Faye V. Roc
source: Businessworld
Tuesday, June 10, 2014
Senate OKs bill allowing full foreign ownership of PH banks
The measure is approved ahead of the ASEAN region's goal of integrating into one single market
MANILA, Philippines – The Senate approved Monday, June 9 a bill seeking to expand the participation of foreign banks in the Philippine financial sector.
Senate Bill no. 2159 or an “Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines” was approved on third and final reading “to allow our economy and our people to reap the benefits thereform,” said Senator Sergio Osmeña III, the bill's proponent and chairman of the committee on banks, financial institutions and currencies.
The bill was coauthored by Senator Cynthia Villar.
The measure allows full foreign ownership of domestic banks. It permits the entry of “established, reputable, and financially sound foreign banks” in the country.
The bills also grants locally incorporated subsidiaries of foreign banks “the same banking privileges as domestic banks of the same category,” Osmeña said.
The measure will give the Philippines advantage in the economic integration of the Association of Southeast Asian Nations (ASEAN) where a common banking framework will be implemented.
The ASEAN Banking Integration Framework, to be implemented by 2020, will allow qualified ASEAN banks (QABs) to operate within ASEAN jurisdictions on equal terms as domestic banks, subject to certain prudential and governance standards.
Authorities gave assurances there would be sufficient governance standards in place within ABIF for Philippine banks to qualify as QABs and for other ASEAN banks to operate in the Philippines as QABs.
“Greater foreign participation in the banking and financial sectors is expected to augment the financial resources to which the Philippine economy may have access, thus supporting the initiatives of the present administration in implementing various infrastructure projects and rehabilitation programs,” Osmeña added.
In February, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) endorsed to Congress a bill amending Republic Act 7721 to effectively liberalize the banking sector.
The 20-year-old RA 7721 or “An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines and for Other Purposes,” promulgated in May 1994, allowed the entry of foreign banks either through ownership of up to 60% of the voting stock of an existing domestic bank or of a new banking subsidiary or establishment of branches with full banking authority.
Proposed amendments to RA 7721 included provision for safety nets, ensuring that banking resources continue to be dominantly in the hands of domestic banks; the current requirement is retained where at least 70% of resources must be held by domestic banks which are majority owned by Filipinos; and for the power of the Monetary Board to suspend the further entry of foreign banks under any or all of the modes of entry as national interest warrants.
The endorsement of the BSP to amend RA 7721 was also in line with the preparations for the ABIF. – Rappler.com
MANILA, Philippines – The Senate approved Monday, June 9 a bill seeking to expand the participation of foreign banks in the Philippine financial sector.
Senate Bill no. 2159 or an “Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines” was approved on third and final reading “to allow our economy and our people to reap the benefits thereform,” said Senator Sergio Osmeña III, the bill's proponent and chairman of the committee on banks, financial institutions and currencies.
The bill was coauthored by Senator Cynthia Villar.
The measure allows full foreign ownership of domestic banks. It permits the entry of “established, reputable, and financially sound foreign banks” in the country.
The bills also grants locally incorporated subsidiaries of foreign banks “the same banking privileges as domestic banks of the same category,” Osmeña said.
The measure will give the Philippines advantage in the economic integration of the Association of Southeast Asian Nations (ASEAN) where a common banking framework will be implemented.
The ASEAN Banking Integration Framework, to be implemented by 2020, will allow qualified ASEAN banks (QABs) to operate within ASEAN jurisdictions on equal terms as domestic banks, subject to certain prudential and governance standards.
Authorities gave assurances there would be sufficient governance standards in place within ABIF for Philippine banks to qualify as QABs and for other ASEAN banks to operate in the Philippines as QABs.
“Greater foreign participation in the banking and financial sectors is expected to augment the financial resources to which the Philippine economy may have access, thus supporting the initiatives of the present administration in implementing various infrastructure projects and rehabilitation programs,” Osmeña added.
In February, the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) endorsed to Congress a bill amending Republic Act 7721 to effectively liberalize the banking sector.
The 20-year-old RA 7721 or “An Act Liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines and for Other Purposes,” promulgated in May 1994, allowed the entry of foreign banks either through ownership of up to 60% of the voting stock of an existing domestic bank or of a new banking subsidiary or establishment of branches with full banking authority.
Proposed amendments to RA 7721 included provision for safety nets, ensuring that banking resources continue to be dominantly in the hands of domestic banks; the current requirement is retained where at least 70% of resources must be held by domestic banks which are majority owned by Filipinos; and for the power of the Monetary Board to suspend the further entry of foreign banks under any or all of the modes of entry as national interest warrants.
The endorsement of the BSP to amend RA 7721 was also in line with the preparations for the ABIF. – Rappler.com
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