Experts: PH hotels, resorts have ‘very high standards’

A team of international experts gave Philippine hotels and resorts, including the small players high marks for their “very high standards” in maintaining the Filipino brand of hospitality.

This was the initial review of 10 experts from the International Accommodation Assessors (IAAs) who visited the country last month. They were joined by the Department of Tourism (DOT) in reviewing the accommodation standards of 144 hotels and resorts in the country’s main island destinations – Cebu, Bohol, Davao, and Palawan.

 LUXURIOUS BALI Clockwise from top left: Bulgari Resort Bali’s private beach; The SPA’s treatment room; View of ‘La Spiaggia,’ the beach grillbar; The Bulgari Villa

The IAAs said Philippine hotels and resorts are “ready to compete in the global marketplace” and should continuously maintain the unique Filipino hospitality, which is one of the country’s competitive advantages.

“The warmth of welcome for guests in all types of accommodation is almost unique among international destinations. There is a real potential for the Philippine tourism industry. Some hotels and resorts need to invest to improve, but the new rating system can help identify where to focus that investment,” the initial report noted.

New standards under the Hotel and Resorts Quality Assurance and Accreditation System aims to assist visitors in terms of  quality, service and comfort provided by accommodation businesses of all sizes and types in the Philippines.

The DOT tapped international assessors to ensure that the review is based on accepted international standards.

The review is part of a technical assistance funded by the Government of Canada and administered by the Asian Development Bank (ADB) that is aimed at improving competitiveness in the tourism sector in time for the Association of Southeast Asian Nations (ASEAN) integration.

Undersecretary Maria Victoria V. Jasmin, Chairperson of the DOT Project Steering Committee, said the technical assistance is crucial in helping the department implement the “Improving Competitiveness in Tourism” road map designed to increase foreign tourist arrivals to ten million by 2016.

source:  Manila Bulletin

Dev’t of $3-B logistics city at Clark pushed

MANILA, Philippines - Global Gateway Development Corp. (GGDC) has reiterated its commitment to accelerate the development of a $3-billion logistics city at Clark Freeport Zone in Pampanga province.

“We are committed to the development of Clark.  We are here to aggressively pursue the development of Sabah Al-Ahmad Global Gateway Logistics City (GGLC),” GGDC said in a statement.

GGDC was originally founded by The Port Fund, a private equity fund managed by KGL Investment Company (KGLI).  KGLI is a private equity investment company focusing on development and investments in infrastructure, logistics and transport, oil and gas, energy and power and other diversified sectors in the Middle East, Asia and emerging markets.

KGLI’s main managed investments in the Philippines have been Sabah Al-Ahmad Global Gateway Logistics City and an interest in the 2GO Group and Negros Navigation.  KGLI, which has managed investments in the Philippines since mid-2008, has established management teams based in both Metro Manila and in Clark.

GGDC said it has invested over $100 million in the project to date with another $150 million in planned investments by the end of 2015.  GGDC’s investments to date include the development of world-class horizontal infrastructure, including over 30 hectares of fully developed lot inventory  and  the  pre-leasing  of  a  world-class 20,000 sqm hospital  (which is currently over 95 -percent complete) to The Medical City,  a leading Philippine and regional healthcare operator.

GGDC said it also expects to finish, by the end of 2015, five office towers with a gross floor area of 145,000 square meters, retail and gas plaza and a hotel and serviced apartment complex.  These complexes will great employment opportunities for over 15,000 Filipinos from the region.

The whole GGLC project will entail investment of over $3 billion in new facilities, providing direct employment to more than 3,000 construction and trade workers at the peak of the project’s development.       

Once completed, the project will generate employment opportunities to over 300,000 workers with $600 million in annual payroll for entry-level employees alone.

In 2012, Sheikh Sabah Al-Ahmad, the Amir of Kuwait, visited the Philippines and the Clark project was renamed the Sabah Al-Ahmad Global Gateway Logistics City in honor of the Amir.        

KGL Investment Co. Asia, a wholly-owned subsidiary of KGLI, has also been involved in humanitarian activities in the Philippines. 

KGLI Asia CEO Mark Williams said the company and the Port Fund, whose investments in the Philippines included Sabah Al-Ahmad Global Gateway Logistics City and an investment in the 2GO Group, committed and funded over US$1 million in buildings, goods and services for disaster relief and rebuilding efforts in communities affected by typhoon Yolanda last year.

source:  Philippine Star

Unlocking banks’ potential to earn from SMEs

WHAT should banks do when faced with a slump in earnings? Some may conduct business as usual by focusing efforts towards traditional revenue drivers. A case can also be made, however, for taking a fresh approach towards an underserved yet promising customer segment: the small to medium enterprise (SME). If SME clients are handled correctly, they could provide the local banking industry its much needed boost.

So far, banks have had to endure a difficult start to the year. According to the Bangko Sentral ng Pilipinas (BSP), the total net income of universal and commercial banks plunged by 48% in the first quarter from the same period last year due to volatile market conditions and the tapering of the US Federal Reserve’s bond-buying program.

At the same time, banks have not been conducting much business with SMEs. Further BSP data show that the compliance rate of the Philippine banking system with the required loan portfolio for micro, small, and medium enterprises stood at just 5.2%-5.6% as of March.

Admittedly, SMEs are a complex segment to cater to given their varied requirements and differing growth potential. However, a savvy approach to this segment, particularly with regard to how SMEs are dealt with at the front office, could unlock earning opportunities for banks.

The front office service model is an important area to consider when revamping a bank’s approach to SMEs. Changes at this level could mean improvements to how a bank’s resources are allocated, how client relationships are managed, and how transactions are streamlined -- all of which could yield higher margins. This is according to the recent EY publication titled Business banking: redesigning the front office.

The EY report advises banks to keep in mind four steps to successfully redesign their front office model for SMEs.

First, banks need to redefine their segmentation of SMEs such that clients are grouped by their behaviors and needs, rather than by their revenues alone. Characteristics to watch out for could include market penetration, growth potential, competitive intensity, current and future risk appetite, and mix of local and international business. Data and portfolio analytics will be required to accomplish this segmentation. Such a redefined segmentation of SME clients will also help banks determine each customer’s value. This is critical considering that, according to EY estimates, only 20% of the total customer base is responsible for 80% to 90% of a bank’s income.

Second, banks need to revamp their service models in such a way that their resources are properly allocated to serve each SME segment. The objective is to allocate scarce resources to the most valuable customers. The EY report suggests, for instance, a three-tiered service model wherein lower-income SME clients are served through branch personnel as well as digital and self-service portals only. The more profitable SME clients and those that require more sophisticated services like derivatives and foreign exchange are meanwhile provided access to a relationship manager pool on top of the other contact points mentioned. For premium SME clients, they can be assigned a dedicated relationship manager. Customers at this level often need a banker to consult for major strategic decisions.

Third, banks would do well to implement “transformational change initiatives” for both the front office and support functions. This entails streamlining processes and using common standards to address overlap in the front office and support roles. These initiatives will prevent process breaks, lengthy cycle times, errors and rework which could frustrate customers. This way, relationship managers are also less encumbered by paperwork. Moreover, investments will be needed for technology platforms tasked with business process automation and data governance, so the bank can provide “faster and more intuitive solutions,” the EY report states.

Finally, as banks revamp their approach, they should communicate changes to the customers and roll out an incentive program. SME clients should be made to understand the benefits of the front office reforms. An active contact strategy should also be deployed. Further, incentives should be in place so that the customer chooses the service model appropriate to its particular segment at the least cost to the bank. This can be achieved, for instance, by reducing costs for the basic service model for those lower income clients.

These four tracks can help banks open capacity in the front office. These can also decrease administrative costs and hasten turnaround time. More importantly, these will “enhance the customer experience” leading to client retention.

Now is the best time to act before non-banks such as technology providers, telecommunication firms, asset managers, and insurance companies completely corner the SME market’s needs for services like mobile payments and business advisory. After all, not only do SMEs represent a growing and potentially profitable customer segment, but they could very well be the industry heavyweights of the future. Banks would do well to establish a relationship early on and what better way to start than with a revamped front office.

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.

Vicky lee-salas is a Partner of SGV & Co.

source:  Businessworld

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Gov’t crafts tax perks for domestic ecozone locators

The Makati City Council has approved several resolutions endorsing the development and grant of information technology (IT) zone status to four buildings, which could open job opportunities for the city’s constituents.

Makati Mayor Jejomar Erwin Binay said the city government fully supports business establishments seeking IT zone status with the Philippine Economic Zone Authority (PEZA).

PEZA promotes the establishment of economic zones in the Philippines for foreign investments. It includes registration procedures, forms, zone facts and online reports.

The four buildings endorsed to PEZA for accreditation were McKinley Exchange Corporate Center, The Peak Tower, Century Spire and Forbes Media Tower.

“As we support our investors by providing them a healthy business environment, we also promote the welfare of our primary stakeholders, the citizens of Makati, by helping in the creation of more job opportunities,” Binay said.

The mayor underscored his commitment to the development of “technology-receptive citizens” who would have the right skills to meet industry demand, so that Makati residents would be the first to benefit from career opportunities generated by increased local and foreign investments, spurred by the growing number of IT zones in the city.

Binay said the city government for the past two decades has continually improved the quality of its public education system to be more in step with global standards.

He said: “We have been doing everything within our power and resources to adequately prepare the youth of Makati for the challenges of rapid globalization.  (Anna Liza Villas-Alavaren)

source:  Manila Bulletin

Clark scores P4.1-B new investments

CLARK FREEPORT, Pampanga — The state-run Clark Development Corporation (CDC) has recorded a total of P4.1-billion fresh investments that stemmed from the 193 contracts signed from January to July this year.

The account of new investments, which was declared by the CDC Marketing Account Officers during the regular Kapihan sa Bale Balita hosted by the Capampangan in Media Inc. (CAMI) inside Clark, translates to more than 80, 000 jobs in the next five years.

“With the signed contracts, we will be expecting an additional 81,500 job opportunities in the next five years,’’ said Erwin Pattaui, a CDC account officer.

He said that 75,000 of the employment are expected from the 12 direct leases signed during the first semester of 2014, while 6,300 of the expected workers would come from the 193 sub-lease contracts signed during the first six months of the year.

The account officers’ report showed that 178 of the total signed contracts for seven months are sub leases, with three of these either revived or recovered; while 12 are direct leases.

It said that the 12 new direct leases are expected to pour fresh capitals of $51.76 million (or P2.28 billion) within the year, while the sub leases will dispense new investments of $43.22 million (or P1.85 billion).

The new direct lease signed contracts are those with the Singaporean-based Capilion Corp. PTE. LTD, with expected P2 billion investments; Matam-Ih, an authentic Kapampangan Cuisine/Restaurant and general merchandise firm with P7 million investments; Stotsenberg Medical Center, Inc., P24 million; Prudence Development and Management Corporation, a production and storage of tobacco products, P200 million; Quarterline Foods Corporation, a restaurant business, P15 million; and Pax American Food and Leisure Inc. (PAFLI), an all American restaurant, with P2.5 million investments.

Among the companies with expansion projects are Pishon Clark Phils., Inc., a garment manufacturing firm that will invest P1.5 million for the expansion of its cafeteria and recreational area; Kilton Motor Phils., an international race track in Clark, which is set to widen its grand stand with a total P20-million capital; and Eaglesky Technology Amusement and Gaming, Inc. whose investment has yet to be announced.

The CDC Marketing Department said the signed contracts are more than half of the total 311 contracts forged in CY 2013, which consisted of 22 signed direct lease contracts, 14 of which were revived or recovered contracts; and 275 signed sub-leases.

source:  Manila Bulletin

A semi-fond farewell to Terminal 1

THURSDAY night, July 31, marked the transfer of Delta Airlines, Inc.’s Philippine operations to Terminal 3 of Ninoy Aquino International Airport. Delta is merely the first of several major foreign airlines to make the switch, leaving the rest of the field to squeeze out whatever remains of the much-maligned Terminal 1’s useful life.

For most of the past three decades, T1 tended to suffer from a poor reputation because of amenities that looked dowdy and tired, just as gleaming new world-class terminals began rising in Singapore, Hong Kong, Kuala Lumpur, Beijing and Bangkok. At some point that dowdiness crossed the line into outright decrepitude as the air conditioning became unreliable and ceilings collapsed. Her shoddy image was not helped by the unsavory human element -- a sadistic combination of baggage theft, economic profiling by immigration officers, and taxi drivers who overcharged and connived with criminals. People who made it their business to fret about what foreigners think of us whined constantly about the terminal, as well as the chaotic Parañaque neighborhood that visitors had to drive through.




Very few people recognized it as it was happening, but at some point, airports became the place where our frustrations about the failures of our society came together, creating a hatred that concentrated with particular force on T1. From the start she seemed cursed: barely two years old, her tarmac was the scene of the most famous assassination in modern Philippine history, whose victim gave the airport its present name. Her French designer Paul Andreu later went on to design Charles de Gaulle airport’s terminal 2E, which collapsed in 2004, and when Filipinos made the connection between 2E and T1, they nodded knowingly. When an organization called Sleeping in Airports rated T1 the worst place in the world to bunk down while waiting for connecting flights, Filipinos acted all embarrassed over the terminal’s many shortcomings, never mind that people who sleep in airports by choice sound at best like poor travel planners and at worst, cheapskates from the fringe who won’t even pay for a hotel room to ensure their own comfort. The resulting T1 backlash was an extraordinary exercise in loathing from a public that was beginning to travel in large numbers and believed they deserved better.

In her defense -- even though she was commissioned at the height of a dictatorship -- T1 might actually be the most honest, least corruption-riddled structure in the entire airport complex. She was constructed with little drama in three years and served her purpose well, at least until hitting full capacity in the 1990s. Whatever her shortcomings in the years since seem more like the faults of a public culture that doesn’t invest in upkeep and doesn’t plan for the future. By way of contrast, Terminal 2 ended up being given over exclusively for the use of Philippine Airlines, by then a private airline, for reasons that have never really been adequately explained. Meanwhile, T3 cost much more than expected, and ended up in legal disputes that took several presidential terms to unravel, leaving an interval of 11 years from the start of construction to the servicing of its first flight. A further six years passed before it could be brought to the point where all its gates were usable. If T1 reeks because her toilets don’t work, then T2 and T3 smell of something else altogether -- opaque deals, misplaced protectionism, bureaucratic incompetence, and the inability of messy democracies to get even simple things done.

The peculiar arrangements surrounding T2 and T3 kept many of the foreign airlines from accessing the most modern of our facilities and became a good part of the reason why T1 had to bear the load of international traffic over the years. Even as her looks (never very pretty to start with) started fading and tempers began to fray over queuing and congestion, T1 held the title of international passenger volume champion, servicing about 8 million departing and arriving passengers in 2012 and 2013. Contrary to all expectations, that made her the most efficient of all the airport terminals, at least from the purely engineering standpoint of output over resources invested. By way of contrast, T2 and T3 handled only 4 million and 2.4 million international passengers in 2013, though they did accommodate domestic operations (by virtue of their association with PAL and Cebu Pacific Air, respectively) which meant they handled more passengers overall.

T1 will likely relinquish that title soon, after the major foreign carriers like KLM, Emirates, Singapore Airlines and Cathay Pacific Airways complete their migration to T3. The government is planning to refurbish her so she becomes less of an embarrassment, with the repairs expected to be largely complete by 2015. No matter what final form she may take, it is possible that a decongested T1 could be a halfway decent place again, though she will never be the Changi or Suvarnabhumi of people’s (unrealistic) dreams. T1 will at least attract less abuse than she did in her heyday as the main terminal for international passengers. But in the continuing infliction of her special brand of discomfort on all users, T1 will surely remain a faithful mirror of the society that produced her. -- Troy Medina

source:  Businessworld

High court stops transfer of common train station site

THE SUPREME COURT has stopped the Department of Transportation and Communications (DoTC) and the Light Rail Transit Authority (LRTA) from transferring the site of the planned LRT-Metro Rail Transit (LRT-MRT) common station to the area in front of TriNoma mall from SM City North Edsa.

This as Transportation and Communications Secretary Joseph Emilio A. Abaya said Friday morning the department would likely move to next week the awarding of the LRT Line 1 Cavite Extension project contract -- which includes the common station design segment -- to the Ayala-Metro Pacific Investments Corp. (MPIC) consortium. "We are still waiting for two signatures in the Light Rail Authority (LRTA) Board Resolution and an Office of the Solicitor General (OSG)," Mr. Abaya said in a text message.

Acting on the petition for injunction which SM Prime Holdings, Inc. (SMPHI) filed last July 23, the high court issued an indefinite temporary restraining order on Wednesday barring DoTC and LRTA "from proceeding with the transfer" of the common station site.

The high court also ordered DoTC and LRTA to comment on SM Prime’s petition within 10 days from notice.

SMPHI sought reprieve from the Supreme Court, alleging that DoTC and LRTA violated a Sept. 28, 2009 memorandum of agreement (MoA) between SMPHI and LRTA that the common station should be built in front of SM City North Edsa.

The MoA had also granted naming rights in favor of SM Prime, which provided a P200-million grant to the government as "assistance for the construction and equipping of the common station".

The Sy-led firm said DoTC and LRTA violated a constitutional provision on the non-impairment of contracts when they unilaterally decided to change the site of the common station. "The solemn agreement to build the common station in front of SM City North Edsa cannot be substituted by the government without the consent of SMPHI," the petition read.

Furthermore, SM Prime said the P200-million grant has already become a public fund that should be used for the common station’s construction in front of SM City North Edsa, as stated in its MoA. "The expenditure of public funds by an officer of the state for the purpose of executing an unconstitutional act constitutes a misapplication of such funds," SMPHI argued.

The company said further that LRTA and DoTC deprived it of due process since they were not informed of the government decision to change the site for the common station. "If LRTA and DoTC believe that there exists a reasonable or legal ground to support their change of mind, they should have filed an action for rescission in the proper court of competent jurisdiction," SMPHI said.

Asked on his department’s reaction, Transportation Spokesperson Michael Arthur C. Sagcal replied via text: "As we have said before, the DoTC will respect court issuances."

"But as long as we have not been legally prohibited from doing our work, we will continue pushing for our infrastructure projects since this is our commitment to the public," Mr. Sagcal said.

Sought for further comment, SMPHI Vice-President for Legal Edgar Ryan C. San Juan said in a text message: "The project can and should go on."

"It’s just that they should honor the terms of our contract when implementing the common station component."

SMPHI, last month, lost a similar restraining order bid before a Pasay regional trial court. The lower court noted that Republic Act No. 8975 prohibits tribunals other than the Supreme Court from issuing TROs on national government projects.

The lone bidder for the LRT-1 extension project said last month it will exercise its option to design the common station. Light Rail Manila, a consortium led by MPIC and Ayala Corp., offered a P9.53-billion premium for the deal, which itself is estimated to cost some P64.9 billion.

The common station, once completed, will connect LRT-1 and MRT-3, as well as the proposed MRT-7, a 14-station railway between North Avenue, Quezon City and San Jose del Monte, Bulacan.

SMPHI shares ended Friday trading at P15.40 apiece, up eight centavos or 0.52% from their Thursday finish of 15.32 each.

MPIC is one of the three main Philippine units of Hong Kong-based First Pacific Company Ltd., the others being Philippine Long Distance Telephone Co. (PLDT) and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Mikhail Franz E. Flores and Chrisee Jalyssa V. dela Paz

source: Businessworld

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