Reforms feared casualty in drug war
INVESTORS are losing appetite towards the Philippines as the government appears to focus heavily on its drug crackdown at the expense of economic reform, analysts at the Economist Intelligence Unit (EIU) said, flagging a potential unraveling of fiscal policies that had otherwise helped the country outperform peers in the past six years.
“Investor confidence has deteriorated somewhat over the past few months or so, especially if you look at how the Philippine peso has done versus the US dollar,” EIU economist Miguel Chanco said in a webinar on Thursday last week that discussed prospects of Southeast Asian economies.
“While the current government is very much ambitious in trying to clean the streets of Manila by a crackdown on drug use and criminality in general, this has caused a major unrest internationally which has significantly affected investor perceptions of the government in charge at the moment and its next six years, which will end in 2022.”
EIU’s comment adds to growing statements of concern among other analysts earlier that President Rodrigo R. Duterte’s preoccupation with the war on narcotics could hold back progress in putting economic reforms in place.
Early into his election campaign, Mr. Duterte had been vocal about prioritizing the drive against narcotics as the biggest problem plaguing the country, saying he would order drug addicts and criminals killed and feed their corpses to fish in Manila Bay. Nearly four months into his administration, the nationwide crackdown has left over 3,000 people dead -- about half in the hands of the police and the rest of the cases still under investigation -- leading human rights groups and other observers to note that the killings appear to be state-sanctioned.
Mr. Chanco described the policy environment in Mr. Duterte’s first four months in office as “unpredictable” and cited growing concern among foreign investors that the government appears to have zoomed in on the war on drugs without giving similar attention to the economic front.
“Part of the reasons why this archipelago of 7,000 islands was able to sustain economic growth of over 6% this past few years is because of prudent economic policies of the previous administration, which for one, saw the government put its fiscal house in better order,” Mr. Chanco said.
“While it is still in its very early days, the country’s new government looks to be heading towards undoing some of that progress which risks undermining the confidence of investors,” he warned.
“The current administration’s controversial war on drugs is not helping matters on this front, either.”
Palace spokesmen did not reply to a request for comment.
Credit rater S&P Global Ratings affirmed the country’s investment grade status last month, but warned of “rising uncertainties” under Mr. Duterte, particularly in terms of policy predictability.
And just last week, Moody’s Investors Service raised its growth forecast for the Philippines to 6.5% this year and for 2017, but warned that the anti-drug war and general politics could “detract attention away from economic and fiscal reform.”
The same week also saw Nomura saying that it saw “a bigger risk from the war on drugs, as more negative headlines could weigh on sentiment and potentially prove a distraction to sound economic policy making or even lead to a reversal of policy.”
WHERE’S THE PLAN?
“One of the main factors that would turn off many investors in our view is that the current government hasn’t specifically outlined a clear economic reform plan that would encourage more investors to participate in the Philippines’ booming economy, [with] the fact that most of the administration’s efforts are more towards criminality and drug use,” EIU’s Mr. Chanco said.
“We don’t see any reform momentum on the economic side of things which will impact not only Manila as a city but also the Philippines in general.”
Mr. Duterte’s economic team bared a 10-point socioeconomic agenda just days after his landslide win in the May 9 polls, assuring investors with signals of continuity from the economic policies of his predecessor that had won for the country investor-grade credit rating in 2013.
The plan focused on achieving more inclusive growth, additional foreign investments by relaxing ownership limits, lower personal and corporate income taxes, and greater ease of doing business in the country, among others.
Analysts, however, have said they await concrete expressions of these proposed reforms in terms of laws and updated regulations beyond the President’s promises.
Mr. Chanco said that economic growth is expected to remain intact, with household consumption largely fueling expansion, despite Mr. Duterte’s verbal attacks on the United States.
“I think in the near term there wouldn’t be much impact on the Philippine economy. Most of the foreign investments are coming from the US, and it seems from the looks of it that investors are willing to take a wait-and-see game with the new administration,” Mr. Chanco said.
“While the current administration may want to turn towards more to China, certain legacy issues that tie both US and the Philippines together will not be erased in the near term.”
These remarks came ahead of Mr. Duterte’s speech in Beijing on Thursday night where he spoke of his “separation” from the US’ military and economic hold. This was later on clarified by his men and by the President himself to mean a foreign policy shift towards Southeast Asia, China, Japan and South Korea rather than a break with the West.
Economic managers have repeatedly said that investors should anchor their decisions on the Philippines’ sound macrofundamentals, instead of getting carried away by negative sentiment.
NO IMPACT ON GROWTH YET
“Certainly, most of the Philippines is still very much driven by domestic demand which we can’t forget. It’s not so much an economy driven by foreign investments,” the EIU analyst added.
“As long as remittances continue to flow to the Philippines regardless of where the US and the Philippines’ ties go in the next few years, Philippine consumers will remain strong and concrete, helping to keep growth to around 5.5-6% on average.”
Economic growth averaged 6.9% last semester, driven by a surge in investments and a boost from election-related spending.
Multilateral lenders last month hiked their Philippine economic growth forecasts to 6.4% for this year, which if realized will hit the government’s 6-7% growth goal.
Sought for his views, International Monetary Fund country representative Shanaka Jayanath Peiris said that Mr. Duterte’s statements will have no impact on the lender’s economic forecasts for now.
“In the economic outlook, we can only assess the impact when there is greater clarity whether there is a change in economic policy, and if so, what the detailed changes might be,” Mr. Peiris said in an e-mail last weekend.
“At the moment, we don’t have information on any changes in economic policy and thus have not changed our outlook from the 2016 Article IV consultation report.”
source: Businessworld
Monday, October 24, 2016
Sunday, October 23, 2016
Itemized list of PH projects covered by China’s $15-B investment pledges to Duterte
The $24-billion investment and credit line pledges that the Philippine government secured from China earlier this week were a display of “greater confidence” in the future economic relationship of the two countries, according to Trade Secretary Ramon Lopez.
In a text message to reporters, Lopez said that the renewed friendships in this part of the world have opened huge opportunities for Philippines’ trade and investment in China and Asean market of over 1.9 billion people.
The deals secured during President Duterte’s state visit to China are expected to boost the trade and investment levels between the two countries, he added.
Lopez disclosed that the $15 billion worth of investment projects signed were as follows:
- Subic-Clark railway project by Bases Conversion and Development Authority (BCDA) and China Harbour Engineering Co.
- Bonifacio Global City-Ninoy Aquino International Airport Segment of Metro Manila Bus Rapid Transit-EDSA project by BCDA and China Road and Bridge Corp.
- BCDA-China Fortune Land Real Estate project (memorandum of understanding);
- Safe and smart city projects for BCDA by BCDA and Huawei Technologies
- Transportation and logistics infrastructure at Sangley Point by Cavitex Holdings, International Container Terminal Services Inc. and China Harbour Engineering
- Joint venture agreement of Jimei Group of China and Expedition Construction Corp. for infrastructure projects
- North Negros biomass and South Negros biomass project by North Negros Biopower and Wuxi Huaguang Electric Power Engineering
- Globe Telecom projects to improve network quality and capacity
- Jin Jiang hotel room capacity expansion from 1,000 to 2,000 by Double Dragon Properties and Hotel of Asia Inc.
- Joint development project on renewable energy by Columbus Capitana and China CAMC Engineering
- New Generation Steel Manufacturing Plant by Mannage Resources and SIIC Shanghai International Trade HK;
- Joint venture on steel plants by Global Ferronickel and Baiyin International
- Renewable energy projects by Xinjiang TBEA Sunoasis
- Davao coastline and port development project by Mega Harbor Port and Development and China Harbour Engineering;
- Manila Harbour Center reclamation by R-II Builders Inc. and China Harbour Engineering
- Cebu International and Bulk Terminal project by Mega Harbour Port and CCCC Dredging Company
- Cabling manufacturing facilities by MVP Global Infrastructure Group and Suli Grp Ltd.
- Manila EDSA Bus Transportation program by Phil State Group and Yangtse Motor group and Minmetals International
- Hybrid rice production by SL Agritech and Jiangsu Hongqi Seed Inc.
- Bus manufacturing facility by Zhuhai Bus and Coach Co.
- Banana plantation project by AVLB Asia Pacific and Shanghai Xinwo Agriculture Development Co.
- 300MW Pulangi-5 Hydro Project by Greenergy
- Co. and Power China Guizhou Engineering Corp.
- Pasig River, Marikina River and Manggahan Floodway bridges construction project by Zonar Construct and SinoHydro;
- Ambal Simuay sub-river basin flood control project by One Whitebeach Land Development and Sino Hydro;
- Nationwide island provinces link bridges by Zonarsystems and PowerChina Sino Hydro; and
- Railway project (study) by MVP Global Infrastructure group and China Railway Engineering Corp.
These investment agreements are expected to generate 2 million jobs over the next five years.
Meanwhile, financing facilities worth a total of $9 billion would come from the China State ($6 billion) and Bank of China ($3 billion), Lopez said.
“We will maintain relations with our other partners but we would revive the stronger integration with our neighbors. We share centuries of trading, similar cultures and a better understanding of our region,” he said.
“For China alone, they continue to be the Philippines’ second major trading partner with $17 billion value in total trade. Our exports to China were $6 billion in 2015 but this still has high growth potential as we establish better relations and considering China’s total imports was around $2 trillion in 2015.
Another promising area again is investment from China. Their investment to the Philippines dropped to only $32 million in 2015.
But China’s total outward investments was around $130 billion in 2015,” the trade chief said.
source: Philippine Daily Inquirer
Friday, October 21, 2016
Duterte announces ‘separation from the US’
PRESIDENT Rodrigo Duterte on Wednesday announced his “separation” from the United States in terms of military and economic cooperation, saying he would turn to China instead.
“I announce my separation from the United States, both in military and economics,” the President said in his speech during the Philippines-China Trade and Investment Forum in Beijing, China.
With this separation, the President told Chinese officials and businessmen that he would now be relying on China.
“So please, you have another problem of economics in my country. I have separated from them (US) so I will be dependent on you for a long time, but don’t worry, we will also help,” he said.
His comments came after he met his Chinese counterpart Xi Jinping at the Great Hall of the People on Tiananmen Square, with the two men pledging to enhance trust and friendship, while playing down a maritime dispute.
Duterte’s visit to Beijing capped a series of recent declarations blasting the US and President Barack Obama.
Addressing the Filipino community in Beijing Wednesday, the firebrand leader said the Philippines had gained little from its long alliance with the US, its former colonial ruler.
“Your stay in my country was for your own benefit. So time to say goodbye, my friend,” he said, as if addressing the US.
source: Manila Times
$13.5-billion deals highlight Duterte's landmark China visit
BEIJING -- President Rodrigo R. Duterte's landmark visit to China, which Chinese President Xi Jinping on Thursday said could help “fully improve” ties that has been tested by a territorial dispute in the South China Sea, will see $13.5 billion worth of deals inked between the two Asian neighbors, the Philippines' Trade chief said in a business forum here.
Mr. Duterte’s state visit to China -- following a working visit to Indonesia, an official visit to Vietnam and this week’s state visit to Brunei -- marks a departure from the tradition observed by his predecessors to visit the US.
The China trip has been marked by the host country’s reception to Mr. Duterte, alongside a mutual affirmation of trade and investment ties ahead.
China and the Philippines will sign $13.5 billion in deals this week, Mr. Duterte’s trade secretary, Ramon M. Lopez, disclosed at a business forum in Beijing on Thursday.
Mr. Duterte in Beijing was joined by at least 200 top business people to pave the way for what he calls a new commercial alliance, as relations with Washington are increasingly being complicated by his anti-US stance.
On Wednesday, to the cheers of hundreds of Filipinos in Beijing, Mr. Duterte said Philippine foreign policy was veering towards China.
“I will not go to America anymore. We will just be insulted there,” he said. “So time to say good-bye, my friend.”
He also declared there will be “no more American interference” in the Philippines and belittled too the country’s gains in its decades-long alliance with the US following the latter’s colonial rule of almost half the 20th century.
“Do not tell us that you have provided us with education. We would have survived if there was no education in my country at that time, we would have invited one [country] better than what they have given us,” Mr. Duterte said.
Nationalist-oriented educators have long emphasized the Philippines’ having its own constitution and structure of government and public service, along with a highly articulate and expressive cultural elite in the ilustrado movement, before US colonial rule which began with a bloody pacification campaign at the turn of the 20th century.
But in the postwar era and thereafter, Filipinos are understood to have a favorable view of the US, despite occasional nationalist episodes such as the Philippine Senate’s 1991 vote rejecting the continued stay of US bases in Central Luzon.
A poll conducted late September by the Social Weather Stations found China having a “bad” -33 net trust rating among Filipinos, compared with a “very good” +66 for the US.
Mr. Duterte has been attacking the Western superpower in his profanity-laced speeches for its criticism of his war against illegal drugs and its spiraling death tally.
Beijing, meanwhile, has enthusiastically endorsed Mr. Duterte’s war on drugs, which has seen more than 3,700 people killed and led the International Criminal Court to warn that those responsible could face charges
China has, moreover, offered to train some Filipino cadets in “anti-illegal drug and VIP security protection,” according to Ramon Purugganan, deputy director of intelligence with the Philippine National Police.
Mr. Duterte has also been calling for his country’s pivot to Beijing and Moscow, In contrast to Washington’s Asia pivot -- although he has thus far shied away from his option to terminate the Philippines’ military arrangements with the US.
In his Wednesday speech, he said he will welcome any aid from China because “we are very poor.”
“The foreign policy gears now towards dito (here). I will not ask but if they offer and they would ask me, ‘You need this aid?’ Of course, we are, we are very poor. ‘You need this railway?’ Yes, sir. And if you can give us a soft loan, give us something like 20 years to pay, 15 years to pay. Even with the price, just give us a little bit of an elbow room,” he added.
“When was the last time, we have been with America? We’ve never had any railroad,” he also said, thus contradicting US legacy in its colonial rule. He added: “In Russia, it’s now crisscrossing African continent. It’s almost crisscrossing now the African -- the railway.”
SEA ROW TAKES BACK SEAT
For his part, Mr. Xi on Thursday told Mr. Duterte at Beijing’s Great Hall of the People that China and the Philippines were brothers and that the two sides could “appropriately handle disputes,” although the Chinese leader did not specifically mention the South China Sea row in comments in front of reporters.
“I hope we can follow the wishes of the people and use this visit as an opportunity to push China-Philippines relations back on a friendly footing and fully improve things,” Mr. Xi said.
Mr. Duterte on Wednesday reversed an earlier statement that he would take up the South China Sea arbitration case -- this time saying the dispute would “take the back seat” during talks, and that he would wait for the Chinese to bring up the matter rather than doing so himself.
Chinese Vice-Foreign Minister Liu Zhenmin said for his part the two countries would return to the track of dialogue and consultation in seeking a proper settlement of the South China Sea issue. “The two sides briefly mentioned the South China Sea. Both sides agreed that this issue is not the sum total of bilateral relations,” he told reporters after the Xi-Duterte meeting.
But Mr. Liu said the issue of Scarborough Shoal, which China seized in 2012, was not mentioned and did not answer a question about whether Philippine fishermen would be allowed to fish in what had been their traditional fishing waters.
He did say both countries agreed on coast guard and fisheries cooperation.
For her part, Chinese foreign ministry spokeswoman Hua Chunying told a regular briefing that Beijing was pleased to move towards resolving the territorial dispute “through consultation and dialogue”.
“Anyone who truly wishes for peace, stability, development and prosperity in the Asia Pacific should welcome Duterte’s visit,” she said.
In an editorial Wednesday, China’s nationalist Global Times newspaper said Washington had treated Manila “as a pawn,” adding Mr. Duterte was now “redesigning Philippine foreign policy based on Philippine interests.” -- reports by Reuters, AFP, Ian Nicolas P. Cigaral
Mr. Duterte’s state visit to China -- following a working visit to Indonesia, an official visit to Vietnam and this week’s state visit to Brunei -- marks a departure from the tradition observed by his predecessors to visit the US.
The China trip has been marked by the host country’s reception to Mr. Duterte, alongside a mutual affirmation of trade and investment ties ahead.
China and the Philippines will sign $13.5 billion in deals this week, Mr. Duterte’s trade secretary, Ramon M. Lopez, disclosed at a business forum in Beijing on Thursday.
Mr. Duterte in Beijing was joined by at least 200 top business people to pave the way for what he calls a new commercial alliance, as relations with Washington are increasingly being complicated by his anti-US stance.
On Wednesday, to the cheers of hundreds of Filipinos in Beijing, Mr. Duterte said Philippine foreign policy was veering towards China.
“I will not go to America anymore. We will just be insulted there,” he said. “So time to say good-bye, my friend.”
He also declared there will be “no more American interference” in the Philippines and belittled too the country’s gains in its decades-long alliance with the US following the latter’s colonial rule of almost half the 20th century.
“Do not tell us that you have provided us with education. We would have survived if there was no education in my country at that time, we would have invited one [country] better than what they have given us,” Mr. Duterte said.
Nationalist-oriented educators have long emphasized the Philippines’ having its own constitution and structure of government and public service, along with a highly articulate and expressive cultural elite in the ilustrado movement, before US colonial rule which began with a bloody pacification campaign at the turn of the 20th century.
But in the postwar era and thereafter, Filipinos are understood to have a favorable view of the US, despite occasional nationalist episodes such as the Philippine Senate’s 1991 vote rejecting the continued stay of US bases in Central Luzon.
A poll conducted late September by the Social Weather Stations found China having a “bad” -33 net trust rating among Filipinos, compared with a “very good” +66 for the US.
Mr. Duterte has been attacking the Western superpower in his profanity-laced speeches for its criticism of his war against illegal drugs and its spiraling death tally.
Beijing, meanwhile, has enthusiastically endorsed Mr. Duterte’s war on drugs, which has seen more than 3,700 people killed and led the International Criminal Court to warn that those responsible could face charges
China has, moreover, offered to train some Filipino cadets in “anti-illegal drug and VIP security protection,” according to Ramon Purugganan, deputy director of intelligence with the Philippine National Police.
Mr. Duterte has also been calling for his country’s pivot to Beijing and Moscow, In contrast to Washington’s Asia pivot -- although he has thus far shied away from his option to terminate the Philippines’ military arrangements with the US.
In his Wednesday speech, he said he will welcome any aid from China because “we are very poor.”
“The foreign policy gears now towards dito (here). I will not ask but if they offer and they would ask me, ‘You need this aid?’ Of course, we are, we are very poor. ‘You need this railway?’ Yes, sir. And if you can give us a soft loan, give us something like 20 years to pay, 15 years to pay. Even with the price, just give us a little bit of an elbow room,” he added.
“When was the last time, we have been with America? We’ve never had any railroad,” he also said, thus contradicting US legacy in its colonial rule. He added: “In Russia, it’s now crisscrossing African continent. It’s almost crisscrossing now the African -- the railway.”
SEA ROW TAKES BACK SEAT
For his part, Mr. Xi on Thursday told Mr. Duterte at Beijing’s Great Hall of the People that China and the Philippines were brothers and that the two sides could “appropriately handle disputes,” although the Chinese leader did not specifically mention the South China Sea row in comments in front of reporters.
“I hope we can follow the wishes of the people and use this visit as an opportunity to push China-Philippines relations back on a friendly footing and fully improve things,” Mr. Xi said.
Mr. Duterte on Wednesday reversed an earlier statement that he would take up the South China Sea arbitration case -- this time saying the dispute would “take the back seat” during talks, and that he would wait for the Chinese to bring up the matter rather than doing so himself.
Chinese Vice-Foreign Minister Liu Zhenmin said for his part the two countries would return to the track of dialogue and consultation in seeking a proper settlement of the South China Sea issue. “The two sides briefly mentioned the South China Sea. Both sides agreed that this issue is not the sum total of bilateral relations,” he told reporters after the Xi-Duterte meeting.
But Mr. Liu said the issue of Scarborough Shoal, which China seized in 2012, was not mentioned and did not answer a question about whether Philippine fishermen would be allowed to fish in what had been their traditional fishing waters.
He did say both countries agreed on coast guard and fisheries cooperation.
For her part, Chinese foreign ministry spokeswoman Hua Chunying told a regular briefing that Beijing was pleased to move towards resolving the territorial dispute “through consultation and dialogue”.
“Anyone who truly wishes for peace, stability, development and prosperity in the Asia Pacific should welcome Duterte’s visit,” she said.
In an editorial Wednesday, China’s nationalist Global Times newspaper said Washington had treated Manila “as a pawn,” adding Mr. Duterte was now “redesigning Philippine foreign policy based on Philippine interests.” -- reports by Reuters, AFP, Ian Nicolas P. Cigaral
List of agreements between PHL and China
• MoU (Memorandum of Understanding) on Production Capacity and Investment Cooperation and the Agreement on Economic and Technological Cooperation between the Government of China and the Philippines
• MoU on Strengthening Trade, Investment and Economic Cooperation, the MoU on Drafting China-Philippines Economic Cooperation Development Plans and the Tourism MoU Implementation Plan 2017-2022
• MoU on the Lists of Transportation and Infrastructure Cooperation Projects and the MoU on Financing Cooperation between the China’s EXIMBANK (Export-Import Bank of China) and the Department of the Treasury of the Philippines
• Agricultural Cooperation Action Plan 2017-2019 and the Protocol on Cooperation between PDEA of the Philippines and the Narcotics Control Bureau of the Ministry of Public Security of China
• MoU on the Establishment of a Joint Coastal Guard Committee on Maritime Cooperation and the MoU on Supporting Conduct of Feasibility Studies for Major Projects
• MoU on News Information Exchange Training and for Other Purposes
• MoU on Cooperation on Animal and Plant Inspection and Quarantine
Source: Presidential Communications Office
• MoU on Strengthening Trade, Investment and Economic Cooperation, the MoU on Drafting China-Philippines Economic Cooperation Development Plans and the Tourism MoU Implementation Plan 2017-2022
• MoU on the Lists of Transportation and Infrastructure Cooperation Projects and the MoU on Financing Cooperation between the China’s EXIMBANK (Export-Import Bank of China) and the Department of the Treasury of the Philippines
• Agricultural Cooperation Action Plan 2017-2019 and the Protocol on Cooperation between PDEA of the Philippines and the Narcotics Control Bureau of the Ministry of Public Security of China
• MoU on the Establishment of a Joint Coastal Guard Committee on Maritime Cooperation and the MoU on Supporting Conduct of Feasibility Studies for Major Projects
• MoU on News Information Exchange Training and for Other Purposes
• MoU on Cooperation on Animal and Plant Inspection and Quarantine
Source: Presidential Communications Office
Globe signs fresh deals during President Duterte’s China visit
LISTED telecommunications giant Globe Telecom, Inc. has signed $750 million worth of deals with Nokia and two technology companies based in China during President Rodrigo R. Duterte’s state visit there.
In a statement released on Friday, the no. 2 largest telco company said the agreements will accelerate its use of new Long-Term Evolution (LTE) technologies across the country for over a period of 5 years, improving its broadband services.
The deals were with Huawei Technologies, Nokia and Wuhan Fiberhome International Technologies, it said. Globe has nurtured long ties with Huawei, signing in November last year a partnership for its 3G and 4G network.
“Globe is deeply committed in giving a wonderful experience to our customers by continuing to build and invest on our network. We are confident that our collaboration with Huawei, Nokia and Wuhan FiberHome will translate into a more robust Globe network that will meet the country’s future digital demands,” Globe President & CEO Ernest L. Cu said in the statement.
Mr. Cu and Globe Director Fernando Zobel de Ayala signed a memorandum of confirmation with Chen Yuhua, the head of Nokia international business, for the project’s rollout in Visayas and Mindanao.
The deal with Huawei covers deployment of LTE spectrum in Luzon.
Globe said that the project would provide wider LTE coverage and better indoor penetration, through an estimated 4,600 sites in the country. This would increase data and fixed-wireless broadband capacity to provide telecommunications services in order to provide access to areas of the country that currently have no access to broadband.
Morever, the telco noted that the project would strengthen telecommunications infrastructure and address the adverse impact of typhoons.
Globe signed a separate memorandum of confirmation with Huawei and Nokia for the capacity expansion program for its corporate data network.
Globe has also tapped Huawei and Wuhan FiberHome for a plan to build a fiber infrastructure to support the rollout of fixed broadband lines in the country. Fiber optics will be deployed to about 20,000 barangays by 2020 which, according to Globe, would provide ultra-fast internet access to around 2 million homes nationwide.
Globe shares fell 0.42% to close at P1,892 per piece. -- R.S. C. Canivel
source: Businessworld
In a statement released on Friday, the no. 2 largest telco company said the agreements will accelerate its use of new Long-Term Evolution (LTE) technologies across the country for over a period of 5 years, improving its broadband services.
The deals were with Huawei Technologies, Nokia and Wuhan Fiberhome International Technologies, it said. Globe has nurtured long ties with Huawei, signing in November last year a partnership for its 3G and 4G network.
“Globe is deeply committed in giving a wonderful experience to our customers by continuing to build and invest on our network. We are confident that our collaboration with Huawei, Nokia and Wuhan FiberHome will translate into a more robust Globe network that will meet the country’s future digital demands,” Globe President & CEO Ernest L. Cu said in the statement.
Mr. Cu and Globe Director Fernando Zobel de Ayala signed a memorandum of confirmation with Chen Yuhua, the head of Nokia international business, for the project’s rollout in Visayas and Mindanao.
The deal with Huawei covers deployment of LTE spectrum in Luzon.
Globe said that the project would provide wider LTE coverage and better indoor penetration, through an estimated 4,600 sites in the country. This would increase data and fixed-wireless broadband capacity to provide telecommunications services in order to provide access to areas of the country that currently have no access to broadband.
Morever, the telco noted that the project would strengthen telecommunications infrastructure and address the adverse impact of typhoons.
Globe signed a separate memorandum of confirmation with Huawei and Nokia for the capacity expansion program for its corporate data network.
Globe has also tapped Huawei and Wuhan FiberHome for a plan to build a fiber infrastructure to support the rollout of fixed broadband lines in the country. Fiber optics will be deployed to about 20,000 barangays by 2020 which, according to Globe, would provide ultra-fast internet access to around 2 million homes nationwide.
Globe shares fell 0.42% to close at P1,892 per piece. -- R.S. C. Canivel
source: Businessworld
Wednesday, October 19, 2016
China in PPPs, a risk for locals
Fitch-research arm BMI Research said increased Chinese involvement in the Philippines’ infrastructure sector will pose a risk to the country’s public-private partnership (PPP) sector.
In its latest analysis, BMI Research said the previous government under Aquino highly favored PPPs as a method for meeting the country’s infrastructure needs and has implemented a number of favorable policies, including, most recently, allowing PPPs to list on the Philippine Stock Exchange.
“Increased Chinese involvement may have the dual effect of both reducing the number of PPPs in the pipeline as well as increase competition in the market,” BMI said.
“China-backed bids will likely be able to undercut competitive private bids and companies which have positioned themselves to expand in the Philippine PPP sector may lose out,” it added.
(Bank of China has agreed to provide a $3-billion credit facility for infrastructure investments in the Philippines, Dept of Trade and Industry Secretary Ramon Lopez told reporters in Beijing yesterday.)
BMI also said downside risks to its outlook for the Philippines attracting greater investment from China primarily arises from near-term political uncertainty.
“Although (President) Duterte has taken a less confrontational approach to the South China Sea dispute, there is the risk his position could change in the future given his unorthodox political style and populist politics, which would then place into question any China-backed infrastructure projects in the pipeline,” BMI said.
It also noted that public opposition to Chinese construction projects could derail projects in the Philippines.
“A string of accidents in 2015 at the Ha Dong-Cat Linh elevated rail project site – for which China Railway was the main contractor – in Vietnam resulted in government officials criticizing Chinese contractors of having poor safety practices, a concern that may be present in other markets,” it said.
The North South railway system, funded by Chinese entrepreneurs, started under the Arroyo government did not take off.
However, on the positive side, BMI said friendlier ties with China will provide a boost to the Philippines’ infrastructure industry, as competitive Chinese construction firms and financing options become available.
“Although the full extent of investment deals may be muted by underlying political tensions, increased Chinese involvement in the Philippines’ infrastructure will help close funding gaps in Duterte’s infrastructure spending ambitions,” BMI said.
“We expect President Rodrigo Duterte’s tilt toward friendlier relations with China will provide a boost to the Philippines’ infrastructure industry as Chinese construction and financing agreements help fulfil his plans for a ‘Golden Age of Infrastructure’ in the country,” it added.
BMI noted while underlying tensions over the South China Sea may dampen initial talks during Duterte’s visit to Beijing this week, both countries have clear incentives for closer ties.
“China sees befriending the Philippines as a way of reducing the United States’ influence in Asia; while the Philippines seeks to gain access to China’s generous infrastructure investment packages which peers in Southeast Asia are already benefitting from,” BMI said.
The research arm said such deals will help bring to reality Duterte’s plan to spend at least P7 trillion on infrastructure through 2022.
BMI said this supports its forecast for real growth in the construction industry averaging 8.2 percent between 2016 and 2020.
“Although Duterte is continuing PPPs initiated by his predecessor Aquino, we expect him to shift more in favor of a government-centered investment approach, which he regards as more efficient and cost-effective,” BMI said.
The report cited data from PPP Center which showed that only three of the 53 PPP projects launched since 2010 have been completed and only around four under construction.
The government attributed the delays to a lengthy review and approval process under the previous administration and has expressed doubts about the efficacy of PPPs for shorter-term projects, BMI said.
“As a result, we expect a reduction in the proportion of projects open to private bidders and subsequently greater demand for government budgets to fund infrastructure developments,” it said.
The analysis said Duterte will face many of the same obstacles of bureaucratic and financing bottlenecks as his predecessor.
“As a result, the Philippines currently has a bloated project pipeline which sees a significant number of projects failing to move beyond the tender phase,” BMI said.
“According to our Key Projects Database, around 97 projects worth more than P2.5 trillion in total are in the pre-tender phase,” it added.
The report noted Duterte is eager to drive momentum into infrastructure projects since he approved nine projects worth P171 billion in September.
“Increased involvement from Chinese firms will fit neatly into the Philippine government’s shift toward state-backed projects, as trade and investment deals that come out of a friendlier relationship with China help meet the Philippines’ growing infrastructure funding needs,” BMI said.
“Other Southeast Asian countries have welcomed Chinese government-backed investments in part due to their low costs, short timelines and favorable financing terms,” it added.
The report cited as an example the $5.5 billion Jakarta-Bandung High-Speed Railway under construction in Indonesia, which is largely financed by a two percent interest, guarantee-free loan from the China Development Bank and will be built without any funds from the Indonesian government.
“For Duterte, greater cooperation with China will also act as a hedge against uncertainty in Philippines-US relations – as noted by our Country Risk team, Duterte is unlikely to establish good terms with either US presidential candidate,” BMI said.
source: Malaya
In its latest analysis, BMI Research said the previous government under Aquino highly favored PPPs as a method for meeting the country’s infrastructure needs and has implemented a number of favorable policies, including, most recently, allowing PPPs to list on the Philippine Stock Exchange.
“Increased Chinese involvement may have the dual effect of both reducing the number of PPPs in the pipeline as well as increase competition in the market,” BMI said.
“China-backed bids will likely be able to undercut competitive private bids and companies which have positioned themselves to expand in the Philippine PPP sector may lose out,” it added.
(Bank of China has agreed to provide a $3-billion credit facility for infrastructure investments in the Philippines, Dept of Trade and Industry Secretary Ramon Lopez told reporters in Beijing yesterday.)
BMI also said downside risks to its outlook for the Philippines attracting greater investment from China primarily arises from near-term political uncertainty.
“Although (President) Duterte has taken a less confrontational approach to the South China Sea dispute, there is the risk his position could change in the future given his unorthodox political style and populist politics, which would then place into question any China-backed infrastructure projects in the pipeline,” BMI said.
It also noted that public opposition to Chinese construction projects could derail projects in the Philippines.
“A string of accidents in 2015 at the Ha Dong-Cat Linh elevated rail project site – for which China Railway was the main contractor – in Vietnam resulted in government officials criticizing Chinese contractors of having poor safety practices, a concern that may be present in other markets,” it said.
The North South railway system, funded by Chinese entrepreneurs, started under the Arroyo government did not take off.
However, on the positive side, BMI said friendlier ties with China will provide a boost to the Philippines’ infrastructure industry, as competitive Chinese construction firms and financing options become available.
“Although the full extent of investment deals may be muted by underlying political tensions, increased Chinese involvement in the Philippines’ infrastructure will help close funding gaps in Duterte’s infrastructure spending ambitions,” BMI said.
“We expect President Rodrigo Duterte’s tilt toward friendlier relations with China will provide a boost to the Philippines’ infrastructure industry as Chinese construction and financing agreements help fulfil his plans for a ‘Golden Age of Infrastructure’ in the country,” it added.
BMI noted while underlying tensions over the South China Sea may dampen initial talks during Duterte’s visit to Beijing this week, both countries have clear incentives for closer ties.
“China sees befriending the Philippines as a way of reducing the United States’ influence in Asia; while the Philippines seeks to gain access to China’s generous infrastructure investment packages which peers in Southeast Asia are already benefitting from,” BMI said.
The research arm said such deals will help bring to reality Duterte’s plan to spend at least P7 trillion on infrastructure through 2022.
BMI said this supports its forecast for real growth in the construction industry averaging 8.2 percent between 2016 and 2020.
“Although Duterte is continuing PPPs initiated by his predecessor Aquino, we expect him to shift more in favor of a government-centered investment approach, which he regards as more efficient and cost-effective,” BMI said.
The report cited data from PPP Center which showed that only three of the 53 PPP projects launched since 2010 have been completed and only around four under construction.
The government attributed the delays to a lengthy review and approval process under the previous administration and has expressed doubts about the efficacy of PPPs for shorter-term projects, BMI said.
“As a result, we expect a reduction in the proportion of projects open to private bidders and subsequently greater demand for government budgets to fund infrastructure developments,” it said.
The analysis said Duterte will face many of the same obstacles of bureaucratic and financing bottlenecks as his predecessor.
“As a result, the Philippines currently has a bloated project pipeline which sees a significant number of projects failing to move beyond the tender phase,” BMI said.
“According to our Key Projects Database, around 97 projects worth more than P2.5 trillion in total are in the pre-tender phase,” it added.
The report noted Duterte is eager to drive momentum into infrastructure projects since he approved nine projects worth P171 billion in September.
“Increased involvement from Chinese firms will fit neatly into the Philippine government’s shift toward state-backed projects, as trade and investment deals that come out of a friendlier relationship with China help meet the Philippines’ growing infrastructure funding needs,” BMI said.
“Other Southeast Asian countries have welcomed Chinese government-backed investments in part due to their low costs, short timelines and favorable financing terms,” it added.
The report cited as an example the $5.5 billion Jakarta-Bandung High-Speed Railway under construction in Indonesia, which is largely financed by a two percent interest, guarantee-free loan from the China Development Bank and will be built without any funds from the Indonesian government.
“For Duterte, greater cooperation with China will also act as a hedge against uncertainty in Philippines-US relations – as noted by our Country Risk team, Duterte is unlikely to establish good terms with either US presidential candidate,” BMI said.
source: Malaya
SC ruling on Naga plant ‘grossly disadvantageous’ to government – SPC
LISTED SPC Power Corp. on Wednesday called the recent ruling of the Supreme Court (SC) on the Naga Power Plant Complex in Cebu as “grossly disadvantageous to the government.”
The energy firm is preparing its motion for reconsideration to the SC which reiterates SPC’s position that the decision “destabilizes the investment climate in the Philippines and retroactively changes the rules on competitive bidding.”
“With the Supreme Court’s ruling to reinstate the notice of award to Therma Power Visayas Inc. (TPVI), the government not only stands to lose P54 million but is deprived of a rebid of the Naga Power plant which would likely result in an even higher price for the government,” SPC said in a statement on Wednesday.
The high tribunal earlier declared as null and void SPC’s right to top the bid of TPVI by 5 percent.
TVPI is a unit of Aboitiz Power Corporation.
TVPI is a unit of Aboitiz Power Corporation.
SPC Power said the SC’s decision to reinstate the award of the Naga facility to Therma Power was contrary to its earlier position that “public bidding is the better means to secure the best bid for the government.”
The SC, in its decision dated September 28, 2015, stated that “attracting as many bidders to participate in bidding for public assets is still the better means to secure the best bid for the government and achieve the objective under EPIRA (Electric Power Industry Reform Act) to privatize NPC (National Power Corp.) assets in the most optimal manner.”
TPVI offered a bid of P1.088 billion during the bidding conducted by the Power Sector Assets and Liabilities Management Corp. (PSALM) in March 2014 wherein the right to top was known to the bidders.
SPC exercised its right to top and matched TPVI’s bid and paid an additional P54 million, or a total of P1.143 billion to PSALM. However, the Naga facility was eventually awarded and turned over to SPC in September 2014.
In June 2014, former Senator Sergio Osmena III filed a case against SPC and TVPI with the SC questioning the validity of the right to top, arguing that it was non-competitive.
“We urge PSALM, chaired by the Finance Department, to file its own motion for reconsideration as clearly, the decision is disadvantageous to the government at a time when government needs much-needed funds for employment and other basic services,” SPC said.
source: Manila Times
Duterte: No joint exploration with China
President Rodrigo Duterte on Wednesday thumbed down the possibility of joint exploration between Manila and Beijing in the disputed West Philippine Sea (South China Sea).
In a news conference in Beijing, the President ruled out discussions with Chinese President Xi Jinping on energy exploration in Thursday’s scheduled bilateral meeting.
“No, I do not think that would be right,” Duterte said, adding that the proposal for joint exploration should have the consent of Congress and the people.
“If you plan to give up something, if you plan to share what you have, if it is really yours, then you cannot talk about it only on your own. This has to be with the consent of Congress and everybody, every Filipino involved,” he said.
“So at this time, I am not empowered to do that,” the President added.
On Thursday, Duterte will be welcomed by President Xi at the Great Hall of the People, where he will meet the Chinese officialdom.
He said “wide-ranging” bilateral talks would cover “shared mutual benefits” and other issues “of importance to regional peace and security.”
source: Manila Times
China ties to help PH fund $144B infra push
Closer ties between the Philippines and China will infuse more vitality into the Duterte government’s drive to build more infrastructure facilities throughout its six-year term, Fitch-owned BMI research said.
“We expect President Rodrigo Duterte’s tilt toward friendlier relations with China will provide a boost to the Philippines’ infrastructure industry as Chinese construction and financing agreements help fulfill his plans for a ‘Golden Age of Infrastructure’ in the country,” BMI said in a report released Wednesday.
BMI pointed out that both countries have clear incentives for closer ties: China sees befriending the Philippines as a way of reducing the influence of the US in Asia; while the Philippines seeks to gain access to China’s generous infrastructure investment packages, already enjoyed by its peers in Southeast Asia.
President Duterte’s government aims to spend at least P7 trillion or $144 billion on infrastructure through 2022, and having China as an ally will help the administration finance this ambitious target, BMI said.
The government’s infrastructure pivot will fire up the country’s construction sector, which BMI expects to grow at an average of 8.2 percent in 2016 to 2020.
But BMI cautioned political uncertainty may hamper the entry of more Chinese investments in the country.
“Although Duterte has taken a less confrontational approach to the South China Sea dispute, there is the risk his position could change in future given his unorthodox political style and populist politics, which would then place into question any China-backed infrastructure projects in the pipeline,” it said.
“We further highlight that public opposition to Chinese construction projects could derail projects in the Philippines,” BMI said.
For instance, BMI said the a string of accidents in 2015 at the Ha Dong-Cat Linh elevated rail project site–for which China Railway was the main contractor–in Vietnam, resulted in government officials criticizing Chinese contractors of having poor safety practices, a concern that may be present in other markets.
Duterte is in China this week for a four-day state visit.
source: Manila Times
Warmer ties with China to usher in infra ‘golden age’
Potential friendlier ties between Manila and Beijing are expected to benefit the country, especially in terms of infrastructure opportunities, as Chinese construction firms and financing options become available to the Philippines.
Although the full extent of the investment deals may be “muted” by underlying political tensions, global think tank BMI Research said in a report that increase Chinese involvement in Philippine infrastructure will help close funding gaps in the Duterte administration’s “infrastructure-spending ambitions.”
President Duterte and his economic team have been vocal about ramping up infrastructure spending to address gaps and issues that could dampen sentiment and the long-term investability of the country.
In his recent pronouncements, the President has made it evident that he wants closer ties between the Philippines and China.
The President is now in China for a four-day state visit.
The think tank also said closer bilateral relations will benefit both the Philippines and China.
“China sees befriending the Philippines as a way of reducing American influence in Asia; while the Philippines seeks to gain access to China’s generous infrastructure investment packages, which peers in Southeast Asia are already benefitting from,” the report read.
However, BMI Research said the downside risks to their outlook for the country attracting greater investment from China arise from “near-term political uncertainty.”
“Although Mr. Duterte has taken a less confrontational approach to the South China Sea dispute, there is the risk his position could change in future given his unorthodox political style and populist politics, which would then place into question any China-backed infrastructure projects in the pipeline,” the report read.
source: Business Mirror
Thursday, October 13, 2016
Applause for Gina Lopez
When the big miners expressed confidence that it would be easy for them to meet the conditions given by the Department of Environment and Natural Resources for them to avoid getting padlocked, the soundness
of Secretary Regina Paz L. Lopez’s mining audit was proven on many fronts.
of Secretary Regina Paz L. Lopez’s mining audit was proven on many fronts.
First, it showed that Lopez’s demands for “responsible mining” were reasonable after all. According to Ronald Recidoro, vice president for Legal and Policy of the Chamber of Mines of the Philippines (COMP), the one-page letters from the environment department to members detailing grounds for suspension often listed administrative matters, ranging from “small violations” of the mining act to insufficient tree-planting.
With this, OceanaGold President and CEO Mick Wilkes said: “I am highly confident that our Didipio operations will continue to operate without interruption.” Nickel Asia President Gerard Brimo commented: “We remain confident that Hinatuan Mining Corp.’s operation will not be suspended.” Now, perhaps using the principle of estoppel, the miners can no longer challenge Lopez’s mining audit.
Second, these statements from the miners also proved that Lopez is not just out to stop all mining operations in the country—just the unscrupulous ones. So mining investors—if they really do not have foul intentions—have no reason to fear the country’s top environment protector.
Related to this is the next important point in Lopez’s campaign—the mining industry really needs to be purged of bad eggs, not by guns, but by a mining audit with stringent criteria. The COMP has been saying the operations of its members have complied with international certification standards; yet, about three-quarters of the mining sites fell short in the audit, with 20 mines facing suspension on top of the 10 already halted.
Fourth, and again related to this, Lopez was proven right in saying there should be a better way of gauging the operations of miners, probably through the TEV, or the total economic valuation, scheme. “We will monetize the benefits from mining. Then we will monetize the destruction…land, water, [impact to] health,” Lopez said. “If the cost outweighs the benefits, it follows that the project should be scrapped.”
Of course, miners would say this is another form of changing the rules in the middle of the game. But again, if you’re above-board on all fronts, why fear scrutiny in whatever manner.
Indeed, mining is not just about money, taxes, revenues, exports, salaries and progress. More important, it’s about the lives of people in the host communities and the next generation of Filipinos that would inherit what would be left of the mined-out areas. For ensuring this does not escape the consciousness of all stakeholders, Lopez deserves a round of applause.
source: Business Mirror
$3-billion ODAs imperiled by Duterte diatribe–Drilon
Over $3 billion in official development assistance (ODA) grants from Western countries are imperiled by President Duterte’s continuing tirades against major foreign donors, including the United States and the European Union (EU).
Senate President Pro Tempore Franklin M. Drilon voiced this concern on Wednesday during the Commission on Appointment’s hearing on the confirmation of Finance Secretary Carlos G.Dominguez III.
While affirming support for the Duterte administration’s assertion of an independent foreign policy, Drilon voiced growing apprehension over the President’s penchant for making “insulting” remarks against leaders of Western countries supporting the Philippines.
“We should maintain an independent foreign policy. But the question that is in everybody’s mind is, in maintaining an independent foreign policy, do we have to displease, insult our allies?” Drilon asked Dominguez.
The senator added: “Are we not putting in danger our $3-billion ODA by displeasing our allies?”
Drilon affirmed there was no question about maintaining an independent foreign policy, noting this is an obligation on the part of the government under the Constitution. “But…in order to pursue an independent foreign policy—which we support —do we have in the process displease our long-term allies and—no matter what you say—put in jeopardy the ODA?”
In reply, Dominguez concedes “there might be a school of thought that would say that it is not advisable to do that.”
Asked by Drilon if he belongs to that school of thought, Dominguez said: “I am not the foreign affairs minister, but I would say that yes, there is some logic to what you’re saying.”
The Finance secretary confirmed that total ODA grants from Western countries add up to $3 billion, broken down as follows: “from the US $1.2 billion, which included the $450 million from Millenium Development Challenge; from Australia, $567 million; the UN, $365 million; EU, $327 million. The total is $3 billion.”
In turn, Drilon acknowledged that “we were able to put that on the record that at least the secretary of finance has some independent policy that he wants to pursue in his term.”
But, he also added: “that is a cause for concern among the citizenry and I am glad that you have associated yourself with that concern. I will repeat, an independent foreign policy is a constitutional duty of the President.”
source: Business Mirror
Neda’s long-term plan for PHL gets Duterte’s nod
President Duterte has signed an executive order (EO) approving and adopting the 25-year long-term plan that was completed by the National Economic and Development Authority (Neda) during the Aquino administration.
In EO 5, signed on October 11, Mr. Duterte said the “AmBisyon Nation 2040” would be used by the government as guide to triple per-capita incomes of Filipinos and eradicate hunger and poverty.
“An appropriate set of milestones shall be identified to guide the successive medium-term development plans,” the EO read.
“The Philippine Development Plans [PDPs] to be crafted and implemented until 2040 shall be anchored on the AmBisyon Nation 2040 and overall goals,” it added.
“It describes the kind of life that people want to live, as well as how the country will look like by 2040. As such, it will serve as an anchor for development planning across at least four administrations,” the Neda said.
In coming up with AmBisyon Natin 2040, the Neda said it followed a consultative process.
An advisory committee, composed of representatives from the government, the private sector, academe and civil society, guided the overall implementation of the visioning exercise.
Experts from different fields of development were also consulted, especially on the thematic technical papers. Guided by the Advisory Committee, the Neda led the development of the project’s various components, including public consultations through focus group discussions, national survey and technical studies.
source: Business Mirror
‘I will protect you,’ Duterte tells business
THE COUNTRY’s biggest business chamber yesterday dusted off its wish list and presented it to President Rodrigo R. Duterte, who in turn appeared to hit the right notes as he pledged to improve peace and order and rid the government of corruption.
The Philippine Chamber of Commerce and Industry (PCCI) identified top 10 resolutions under its GIANT STEPS advocacy that stands for good governance, infrastructure, agriculture, new era of manufacturing, tourism, as well as science, technology, education, people and skills.
Released on the second and last day of 42nd Philippine Business Conference (PBC), the list revived a number of last year’s resolutions.
“With the handing of the resolutions, we hope the government would truly see the need of the business sector to be able to obtain many fruits in competitiveness,” PBC Chairman Angelito E. Colona said in his speech after giving Mr. Duterte the list.
“This turnover of resolutions signifies our fervent desire to take part in the change of the government.”
Addressing the audience afterwards, Mr. Duterte admitted he knew little about the economy, but promised to rid government of corruption -- drawing sustained applause from the crowd.
“Just do business and I will protect you,” Mr. Duterte said.
Turning to his preoccupation, the President added: “Those who are into drugs, you are now destroying a generation of Filipinos. Go out because I will kill you.”
PCCI President George T. Barcelon had said on Wednesday that the group’s wish list has been recycled over the years because Mr. Duterte’s predecessors did not address all business concerns.
The list presented to Mr. Duterte consisted of statements supporting efforts to further ease doing business, make taxes more progressive and easier to pay, enhance competition in telecommunications, give the Energy department “a strong leadership role” in “achieving sustainable and reliable power supply at a competitive cost” and for government “to make a definitive decision on opening other major international airports in Luzon, Visayas and Mindanao within the next six years,” among others. -- Roy Stephen C. Canivel
source: Businessworld
The Philippine Chamber of Commerce and Industry (PCCI) identified top 10 resolutions under its GIANT STEPS advocacy that stands for good governance, infrastructure, agriculture, new era of manufacturing, tourism, as well as science, technology, education, people and skills.
Released on the second and last day of 42nd Philippine Business Conference (PBC), the list revived a number of last year’s resolutions.
“With the handing of the resolutions, we hope the government would truly see the need of the business sector to be able to obtain many fruits in competitiveness,” PBC Chairman Angelito E. Colona said in his speech after giving Mr. Duterte the list.
“This turnover of resolutions signifies our fervent desire to take part in the change of the government.”
Addressing the audience afterwards, Mr. Duterte admitted he knew little about the economy, but promised to rid government of corruption -- drawing sustained applause from the crowd.
“Just do business and I will protect you,” Mr. Duterte said.
Turning to his preoccupation, the President added: “Those who are into drugs, you are now destroying a generation of Filipinos. Go out because I will kill you.”
PCCI President George T. Barcelon had said on Wednesday that the group’s wish list has been recycled over the years because Mr. Duterte’s predecessors did not address all business concerns.
The list presented to Mr. Duterte consisted of statements supporting efforts to further ease doing business, make taxes more progressive and easier to pay, enhance competition in telecommunications, give the Energy department “a strong leadership role” in “achieving sustainable and reliable power supply at a competitive cost” and for government “to make a definitive decision on opening other major international airports in Luzon, Visayas and Mindanao within the next six years,” among others. -- Roy Stephen C. Canivel
source: Businessworld
7 provinces seen as potential BPO hubs
BUSINESS process outsourcing (BPO) companies may find seven provinces conducive for their operations, according to a real estate consultancy, as the industry’s expansion outpaces the supply of office spaces in Metro Manila.
Leechiu Property Consultants (LPC) is recommending Cagayan, Pangasinan, Bulacan, Batangas, Aklan, Leyte and Bohol as locations for BPO operations.
“We’re confident that there’s enough labor in these locations to support small and mid-sized BPO operations,” LPC Chief Executive Officer David Leechiu said when the consultancy launched its new office at Makati Shangri-La Retail Arcade on Wednesday. Mr. Leechiu expects BPO companies to consider entering the following cities: Tuguegarao in Cagayan; Dagupan in Pangasinan; Malolos and Meycauayan in Bulacan; Batangas City; Kalibo in Aklan; Tacloban in Leyte and Tagbiliran in Bohol.
“Maybe not thousands and thousands but certainly these locations have room for one to two locators,” he noted.
LPC is encouraging more BPO companies to locate in Taytay, Binangonan, Antipolo and Cainta in Rizal; Calamba, Biñan and Sta. Rosa in Laguna; Imus, Dasmariñas, Rosario and Bacoor in Cavite; and Cagayan de Oro in Misamis Oriental.
“Sometimes they’re not just aware. Sometimes many clients find it difficult to go to but you know recently so many flights have been made available, so many new roads so what they thought was two-hour or three-hour journey siguro kalahati na lang ’yun ngayon (maybe that’s now just half),” Mr. Leechiu said.
LPC expects demand for office spaces outside the National Capital Region (NCR) to reach 1.95 million square meters (sq.m.) over the next six years, should the number of full-time employees in the provinces double to 780,000.
The supply currently stands at 1.31 million sq.m., with Cebu accounting for more than a third or 476,000 sq.m. and the region comprising Cavite, Laguna, Batangas, Rizal and Quezon for about a fifth or 250,500 sq.m.
“Of all these areas, I am most excited for Rizal province, which is really part of greater Manila, because the population there is roughly two or three million people and they have no choice but to go to Metro Manila to work,” Mr. Leechiu said.
The BPO industry is what largely drives the demand for office spaces. At present, it takes around 90% of office spaces in cities and provinces outside Metro Manila.
A strong tourism play supposedly attracts BPO companies to locate in the recommended provincial locations, aside from healthy labor pool, local government support, fiber optic connectivity and accessibility. Also, developing quality hotels and malls would make the provincial locations more conducive for BPO operations.
“Ideally, you build them a little ahead of the BPOs. They need to be existing before the BPOs could go there because those things need to be serviced,” Mr. Leechiu noted.
More BPO companies are increasingly considering setting up operations in the provinces, as available office spaces within Metro Manila continues to shrink.
LPC projects a 25% increase in demand to 721,000 sq.m. this year from the 577,000 sq.m. seen in 2015. Companies prefer to locate in Bonifacio Global City and expand in Quezon City.
Vacancy rate across Metro Manila is currently at an all-time low of 4%, while 361,000 sq.m. have already been pre-committed for next year.
Year to date, BPO companies account for 63% of the 600,000 sq.m. of the existing office space in NCR.
Current supply in the region stands at 8.6 million sq.m. For the next six years, another 4.2 million sq.m. will become available, particularly in Makati, Pasig, Mandaluyong, Taguig, Quezon City, Alabang and Bay Area.
LPC, however, projects a bigger demand for 4.6 million sq.m. on the assumption the number of full-time employees in Metro Manila will double to 1.82 million over the six-year period.
“In core Metro Manila, land has been exhausted, the tenants will have no choice but to go to Filinvest and the Bay. That’s why we think the Bay and Alabang will have dramatic changes for the next six, seven or eight years,” Mr. Leechiu said.
“By 2018, many of these districts will be fully developed; there will be very little land left for new buildings to be put up. Therefore, the demand will shift from being spread throughout Metro Manila to just a handful of business districts.”
In general, the country’s property market remains among the most active across the globe, according to LPC.
The BPO industry is expected to continue expanding, with the economic slowdown in Europe prompting more companies to outsource operations in the Philippines.
Mr. Leechiu, however, cited the proposed moratorium on the conversion of agricultural lands as possible damper in the expansion of the real estate sector.
To further encourage more office developments, Mr. Leechiu said, the Philippine Economic Zone Authority (PEZA) should restore the minimum space eligible for accreditation.
“A few years ago, they increased that to 10,000 sq.m. and, in the provinces, they increased that to 5,000 sq.m. We think that it will be easier and better if PEZA reverted back to the old criteria, which is 5,000 sq.m. and 2,000 sq.m. because there are many parts of Metro Manila that remain undeveloped.”
source: Businessworld
Leechiu Property Consultants (LPC) is recommending Cagayan, Pangasinan, Bulacan, Batangas, Aklan, Leyte and Bohol as locations for BPO operations.
“We’re confident that there’s enough labor in these locations to support small and mid-sized BPO operations,” LPC Chief Executive Officer David Leechiu said when the consultancy launched its new office at Makati Shangri-La Retail Arcade on Wednesday. Mr. Leechiu expects BPO companies to consider entering the following cities: Tuguegarao in Cagayan; Dagupan in Pangasinan; Malolos and Meycauayan in Bulacan; Batangas City; Kalibo in Aklan; Tacloban in Leyte and Tagbiliran in Bohol.
“Maybe not thousands and thousands but certainly these locations have room for one to two locators,” he noted.
LPC is encouraging more BPO companies to locate in Taytay, Binangonan, Antipolo and Cainta in Rizal; Calamba, Biñan and Sta. Rosa in Laguna; Imus, Dasmariñas, Rosario and Bacoor in Cavite; and Cagayan de Oro in Misamis Oriental.
“Sometimes they’re not just aware. Sometimes many clients find it difficult to go to but you know recently so many flights have been made available, so many new roads so what they thought was two-hour or three-hour journey siguro kalahati na lang ’yun ngayon (maybe that’s now just half),” Mr. Leechiu said.
LPC expects demand for office spaces outside the National Capital Region (NCR) to reach 1.95 million square meters (sq.m.) over the next six years, should the number of full-time employees in the provinces double to 780,000.
The supply currently stands at 1.31 million sq.m., with Cebu accounting for more than a third or 476,000 sq.m. and the region comprising Cavite, Laguna, Batangas, Rizal and Quezon for about a fifth or 250,500 sq.m.
“Of all these areas, I am most excited for Rizal province, which is really part of greater Manila, because the population there is roughly two or three million people and they have no choice but to go to Metro Manila to work,” Mr. Leechiu said.
The BPO industry is what largely drives the demand for office spaces. At present, it takes around 90% of office spaces in cities and provinces outside Metro Manila.
A strong tourism play supposedly attracts BPO companies to locate in the recommended provincial locations, aside from healthy labor pool, local government support, fiber optic connectivity and accessibility. Also, developing quality hotels and malls would make the provincial locations more conducive for BPO operations.
“Ideally, you build them a little ahead of the BPOs. They need to be existing before the BPOs could go there because those things need to be serviced,” Mr. Leechiu noted.
More BPO companies are increasingly considering setting up operations in the provinces, as available office spaces within Metro Manila continues to shrink.
LPC projects a 25% increase in demand to 721,000 sq.m. this year from the 577,000 sq.m. seen in 2015. Companies prefer to locate in Bonifacio Global City and expand in Quezon City.
Vacancy rate across Metro Manila is currently at an all-time low of 4%, while 361,000 sq.m. have already been pre-committed for next year.
Year to date, BPO companies account for 63% of the 600,000 sq.m. of the existing office space in NCR.
Current supply in the region stands at 8.6 million sq.m. For the next six years, another 4.2 million sq.m. will become available, particularly in Makati, Pasig, Mandaluyong, Taguig, Quezon City, Alabang and Bay Area.
LPC, however, projects a bigger demand for 4.6 million sq.m. on the assumption the number of full-time employees in Metro Manila will double to 1.82 million over the six-year period.
“In core Metro Manila, land has been exhausted, the tenants will have no choice but to go to Filinvest and the Bay. That’s why we think the Bay and Alabang will have dramatic changes for the next six, seven or eight years,” Mr. Leechiu said.
“By 2018, many of these districts will be fully developed; there will be very little land left for new buildings to be put up. Therefore, the demand will shift from being spread throughout Metro Manila to just a handful of business districts.”
In general, the country’s property market remains among the most active across the globe, according to LPC.
The BPO industry is expected to continue expanding, with the economic slowdown in Europe prompting more companies to outsource operations in the Philippines.
Mr. Leechiu, however, cited the proposed moratorium on the conversion of agricultural lands as possible damper in the expansion of the real estate sector.
To further encourage more office developments, Mr. Leechiu said, the Philippine Economic Zone Authority (PEZA) should restore the minimum space eligible for accreditation.
“A few years ago, they increased that to 10,000 sq.m. and, in the provinces, they increased that to 5,000 sq.m. We think that it will be easier and better if PEZA reverted back to the old criteria, which is 5,000 sq.m. and 2,000 sq.m. because there are many parts of Metro Manila that remain undeveloped.”
source: Businessworld
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