PNoy appoints Cristobal as New DTI Secretary

Volume 27 No. 01
January 2016
PNoy appoints Cristobal
as New DTI Secretary
President Benigno S. Aquino III
appointed Adrian S. Cristobal Jr.
as the new Department of Trade
and Industry (DTI) Secretary
replacing Gregory L. Domingo who
stepped down from office effective
31 December 2015.
Before his appointment, Cristobal
served as DTI Undersecretary for
Industry Development Group (IDG)
and Managing Head of the Board
of Investments (BOI).
During a simple ceremony on
4 January 2016, outgoing Secretary
Domingo turned over the DTI reins
to incoming Secretary Cristobal.
Cristobal’s Milestone Career
in DTI
q
2001 - Undersecretary for Consumer
Welfare and Trade Regulations Group
(CWTRG)
q 2005-2009 - Director General
of the Intellectual Property Office
(IPO), an attached agency of DTI
q 2010 - Undersecretary for
International Trade Group (ITG),
who is also the country’s lead trade
negotiator in some of the country’s
free trade negotiations; served as BOI
Managing Head and spearheaded the
crafting of a new industrial blueprint
which is composed of various industry
development roadmaps
Cristobal said that the DTI will go
“full speed” ahead in 2016. “We
will build on what we had achieved
and further modernize our agency
by welcoming the best recruits,
simplifying processes and embracing
new technologies. . .
January 2016
Our organization must be designed
to meet the challenges and
opportunities of the 21st century.
We believe that it’s not only the
economic numbers that count, but
what’s more important is their
impact on alleviating poverty,”
he said.
He added that the Department
will continue to lure investors all
over the world through responsive
and targeted trade and industry
policies using the roadmaps that the
DTI formulated together with the
private sector.
“We will support this effort by
continuing to institute ease of doing
business reforms as well as pursuing
preferential trade agreements in
other countries in other regions,”
he added.
PEZA investments grow 13.2%
in 10 months
Investments registered with the
Philippine Economic Zone Authority
(PEZA) improved by 13.18% to
P174.23B during the January
to October 2015 period compared
to P153.93B recorded in the same
period last year.
New investments were poured into
manufacturing, electronics, and
information and communications
technology (ICT) projects.
Employment generated by these
investments increased by 7.25% to
1.24M from last year’s 1.15M.
The number of PEZA registered
projects for the period also
increased by 2.65% to 503 compared
to 490 of the same period last year.
1
The positive record prompted PEZA
to revise investment target of 8%-9%
for 2015 to 10%. “We are looking at
a double-digit growth for 2015,”
PEZA Director General Lilia B.
de Lima said.
Export performance slightly slowed
by 0.34% to USD 32.79B compared
with USD 32.90B earnings during the
January-September period
last year.
PEZA is optimistic that exports
growth will end up positive for the
entire 2015.
PEZA’s thrust continues to be in
encouraging more manufacturing
companies to locate in their
facilities with the goal of achieving
inclusive growth and generating
jobs.
INDUSTRY
TRENDS
PHL on track toward
a USD 1-T economy by 2030
The Philippines is expected to
become a USD 1-T economy by
2030, Washington-based analytics
firm IHS Global Insight predicted.
With a gross domestic product
(GDP) of about USD 292B, the
Philippines has the potential to
become a USD 695-B economy by
2025, IHS Chief Economist for AsiaPacific Rajiv Biswas said.
IHS also foresaw the Philippines as
the only sovereign entity in Asia
with improving credit prospects.
IHS has upgraded its outlook on the
Philippines’ credit rating to positive
from stable which is set at the
minimum investment grade of BBB-.
It said the country’s credit rating
has a chance of being raised over
the near term.
Notably, the Philippines is the
only Asian nation that got an IHS
upgrade. IHS cited the country’s
improving financial fundamentals,
investor confidence, and
governance standards.
2
The country’s strong macroeconomic
fundamentals are combined with
improvements in governance.
“Apart from the clearly
strengthened macro-financials over
the last few years, the more recent
upgrade to the Philippines’ outlook
to positive in the third quarter
rested on improved governance
standards and reforms enhancing
competitiveness under the Aquino
administration,” IHS said.
PHL’s good economics standing
q
Comfortable liquidity as evidenced
by sustained surpluses in its current
account. The current account has been
in surplus for 12 consecutive years, since
2003.
q Continually improving manageability
of debt on the back of prudent fiscal
management and growing economy.
General government debt as a
percentage of gross domestic product
(GDP) is on a downward trend. It stood
at 36.2% as of end-June 2015,
consistently declining from a peak of
68.1% in 2003.
q Robust current account. The
USD 4.7-B current account during the
first six months is fueled by remittances,
revenues from the business process
management (BPM) industry, and tourism
receipts.
q Vibrant services sector. Rapidly growing
information technology-business process
management (IT-BPM) sector.
“The Philippines has been on a
long ratings upgrade trajectory
over the last few years. The key
driver to these upgrades has been
successively strong current account
surplus generation with new
found sources of export earnings
other than workers’ remittances
and lower energy import bills,”
IHS Sovereign Risks Director Jan
Randolph said.
DTI honors 17
of PHL’s top exporters
The Department of Trade and
Industry (DTI), together with
the Philippine Exporters
Confederation, Inc. (PhilExport)
and the Export Development
Council (EDC), honored 17 of the
country’s top performing exporters
during the National Export Congress
held on 2 December 2015.
The awardees, many of whom were
small and medium enterprises
(SMEs), were cited for exhibiting
excellence in their respective
sectors.
2015 Top Export Awardees
q
q
q
q
q
q
q
q
q
q
q
q
q
q
q
q
q
Texas Instruments Philippines Inc. electronics
House Technology Industries Pte. Ltd. construction materials
Philippine Associated Smelting and
Refining Corp. - minerals
Pilipinas Kao Inc. - chemicals
Temic Automotive Inc. - motor vehicle
parts
Metro Wear Inc. - garments
Max’s Group - franchising
Visaya Knowledge Outsourcing Corp.information technology-business process
management
Hamlin Industrial Corp. - most
diversified products
Ionics Ems Inc. - most-diversified
markets
Malagos Agri-Ventures Corp. - small
and medium enterprise
Nature’s Legacy Eximport - small and
medium enterprise
Wilmar Edible Oils Philipines - coconut
products
Nestle Philippines -processed food
ProFood International Corp. - RIPPLES
(Regional Interactive Platform for
Philippine Exporters) Program
Martsons Food Corp. - RIPPLES
Raw Brown Sugar Milling Inc. - RIPPLES
Opening up economies
to benefit everyone
During the Asia-Pacific Economic
Cooperation (APEC) Summit 2015
in Manila, leaders issued
the Statement on Supporting
the Multilateral Trading System
and the 10th World Trade
Organization (WTO) Ministerial
Conference (MC10) in Nairobi,
Kenya which espouses free and
open economy.
They endorsed MC10, WTO’s top
level decision-making body and
declared their commitment to work
together for its success.
Philippine Business Report
The leaders vowed to work
closely together to strengthen the
rules-based, transparent, nondiscriminatory, open, and inclusive
multilateral trading system as
embodied in the WTO.
"We reaffirm our pledges against all
forms of protectionism, through our
commitment to a standstill until
the end of 2018, and to roll back
protectionist and trade-distorting
measures," the APEC leaders stated.
APEC economies believe that freer
market creates more opportunity,
more growth, more dynamism, and
more innovation.
Statement of APEC Leaders Commitment
to MC10
q
Pledged to provide the necessary
political impetus during the Nairobi
Ministerial Meeting to achieve a
balanced set of outcomes and clear
guidance to post-Nairobi work
q Committed to continue to support the
effectiveness of the WTO and the further
promotion of its objectives for the benefit
of all within the established framework of
the multilateral trading system
q Instructed Ministers to engage actively
and constructively in the discussions,
with the objective of achieving concrete,
meaningful, balanced and developmentoriented outcomes
q Worked together to ensure that they
are consistent with WTO agreements
and contribute to strengthening the
multilateral trading system
PHL Trade Repository connects
to APEC and ASEAN
The Philippine National Trade
Repository (PNTR) is a webbased portal (www.pntr.gov.ph)
that provides a single source of
comprehensive, accurate, and upto-date information on all traderelated matters.
The portal is a government’s trade
facilitation strategy designed
to create a transparent trade
environment that allows business
easier access to information and
enables their compliance with
prescribed regulations.
It aims to reduce the amount of
time and costs in trade transactions
for businessmen.
January 2016
The establishment of the PNTR
is a country commitment under
the Association of Southeast Asian
Nations (ASEAN) Trade in Goods
Agreement (ATIGA) wherein each
ASEAN Member State (AMS) by 2015
must establish their respective trade
repositories which will then link to
the ASEAN Trade Repository (ATR)
website through www.atr.asean.org.
The portal is also in line with the
Philippine obligation under the World
Trade Organization Agreement on
Trade Facilitation (WTO-ATF) to
promptly publish and make readily
available trade-related information.
The PNTR likewise fulfills the
Asia-Pacific Economic Cooperation
(APEC) requirement to establish
an APEC Trade Repository (ATR),
requiring member economies to
establish a portal containing trade
information.
The Ad-Hoc Technical Working
Group on PNTR (TWG-PNTR) under
the Committee on ASEAN Economic
Community (CAEC) maintains the
portal. The TWG is headed by the
Bureau of Import Services (BIS),
an agency of the Department of
Trade and Industry (DTI), with
membership consisting of 50 Trade
Regulatory Government Agencies
(TRGAs) and Trade Policy Related
Agencies.
q
q
q
q
q
q
Rationalize and phase out over
the medium-term fossil fuel
subsidies. Fossil fuel cost
USD 5.3T in 2015, according
to the International Monetary
Fund (IMF)
Explore the contribution of
biofuels, civil nuclear power,
advanced coal technologies,
liquefied natural gas, solar, wind,
and marine energy technologies
as a base load power source
Adopt the APEC Disaster Risk
Reduction (DRR) Framework for
collective action
Establish the APEC Sustainable
Energy Center and the Task Force
on Energy Resiliency
to accomplish its goals
to promote energy security
and sustainable development
while providing energy access
to those who need it
Reiterate commitment in 2007
to increase by at least 20M ha.
of all types of forests by 2020,
as well as stop illegal logging
and wildlife trafficking
Provide “coordinated and
scientific advice surrounding
and during emergencies”
and adopt the development
of the Healthy Asia-Pacific 2020
Roadmap, which among others
sets collaboration in detecting
and preventing the spread
of diseases.
APEC leaders take strong stand
on climate change
APEC issued the commitment
to achieve sustainable and resilient
energy within the region by
exploring and developing alternative
fuel to transition the region to be
less dependent on fossil fuel.
Nordic firms eye PHL
Nordic business groups’ heightened
interest in investing in the
Philippines served as a testament
to the attractiveness of the local
business climate to foreign investors,
the Nordic Business Council
Philippines (NBCP) announced.
The commitment includes specific
targets to reduce the use of oil based
energy, use alternative fuel as base
power load, initiate reforestation,
pursue wildlife preservation, and
coordinate within a framework to
reduce risks during disasters.
NBCP President Bo Lundqvist said
the Philippines’ successful hosting of
the 2015 APEC Leaders’ Meeting has
placed the country “at the driver
seat of the booming Asian economy.”
Outlined were the commitments and
goals in the 2015 Leader’s Declaration:
q Cut total energy intensity
by 45% by 2035 and double
renewable energy in the
regional energy mix by 2030
Nordic countries consist of
Denmark, Finland, Iceland, Norway,
and Sweden.
“We were all proud to see the
Philippines hosting the APEC Summit
last year. The grand event certainly
put the Philippines up on the business
3
world map as a strong business
destination,” Lundqvist said.
He identified energy, agribusiness,
manufacturing, and information
technology (IT) as among the sectors
of interest by the Nordic firms.
Philippine Economic Zone Authority
(PEZA) Director General Lilia B.
de Lima attested to this growing
interest, saying 12 of the 20 Nordic
firms with investments in PEZA zones
came in just the last five years.
Mall owners optimistic
Philippine builders cannot add
retail space fast enough to satisfy
the demand from Southeast Asia’s
most confident consumers that pack
Manila’s malls, global commercial
real estate company Colliers
International said.
TRADE AND
INVESTMENTS
AGRIBUSINESS AND
FISHERY
Interflour starts
USD 30-M mill project
Singapore-based Interflour Group,
which operates one of the biggest
flour-milling ventures in Asia, has
broken ground its USD 30-M mill
project in Zambales.
“All of us are looking into adding
retail space,” said SM Investments
Corp. Vice Chairman Teresita
Sy-Coson, noting that the “retail
market is still growing and we’re all
OK with it.”
To operate under the name Mabuhay
Interflour Mill Inc. (MIMI), the mill
will be located at a 5.2-ha. lot in
Subic Bay Gateway Park Phase II
and is expected to be completed by
early 2017.
A record 724,620 sqm. of new
retail space will be added in Manila
this year, Colliers International
announced.
The project will involve milling
wheat into food flour for direct
sale to consumers, distributors and
retailers in the country, as well as
for exports.
Improving remittances from overseas
Filipinos (OFs) and a booming
business process management (BPM)
industry are fueling the country’s
household spending.
Private consumption accounts for
at least 60% of the Philippine
economy, according to the Asian
Development Bank (ADB).
Filipinos were the third most
optimistic consumers in the world
in the third quarter of 2015 behind
Indians and Americans, the Global
Consumer Confidence Index Report
released by Nielsen Holdings Plc’s
showed.
The report used an online survey
of people’s job prospects, personal
finances, and spending intentions.
Retail sales in the Philippines is expected
to grow by 10% to USD 155B this year.
4
The facility is expected to produce
500 metric tons (MT) a day of flour
intended for the local market,
particularly in Central and Northern
Luzon.
“The Philippines is essential to the
development of the flour industry and
is one of the biggest flour markets in
Asia,” Interflour Managing Director
and Chief Executive Greg Harvey said.
The project will employ over 500
workers during the construction
period, and will need more than
100 personnel for commercial
operations, Harvey added.
On the same note, Subic Bay
Metropolitan Authority (SBMA)
Chairman Roberto V. Garcia said
the mill’s operations will mean
additional revenues for SBMA,
estimated to reach P5.5M a year.
Interflour had signed a 50-year
lease contract with the SBMA
for the project site as early
as June 2014.
Grobest opens in Tarlac
Taiwanese aquaculture feeds
manufacturer Grobest Feeds Inc.
has launched a USD 22-M plant in
Gerona, Tarlac.
“This is a reflection of the
successful signing of the TaiwanPhilippines agreement on law
enforcement cooperation in
fisheries matters,” Taiwan
Economic and Cultural Office
(TECO) Representative Gary SongHuann said.
Song-Huann said the Philippines is
a very fitting location to expand
its operations given the country’s
robust economic growth.
The Philippines’ gross domestic
product (GDP) grew by 7.2% and
6.1% in 2013 and 2014 respectively,
data from the National Economic
and Development Authority (NEDA)
showed.
“The Philippines’ population
already exceeded a hundred
million. Among them, half of
them are young people. They are
very eager to work. The domestic
market of the Philippines is huge,”
he said.
Grobest International Chairman
Robert Chen said Grobest has
chosen the Philippines because
of its sufficient raw materials and
unlimited market potential.
“We need investments like this.
You know why? Because in the
agricultural sector, they’re saying
that we need feeds. And Grobest
will produce the feeds for us,”
Bureau of Fisheries and Aquatic
Resources (BFAR) Assistant
Director Benjamin Tabios said.
MANUFACTURING
ZAMA bullish on PHL
German tool maker ZAMA has
committed to invest as much as
P2.5B and create some 650 jobs
Philippine Business Report
in the Philippines for its planned
manufacturing plant in Batangas.
“We are glad to be partners with
government in its efforts to promote
employment,” ZAMA Precision
Industry Manufacturing Inc. Managing
Director Karsten Wagner said.
ZAMA is a unit of STIHL, a German
manufacturer of chainsaws and
other handheld power equipment.
Wagner said their company plans
to hire at least 150 employees by
end-2015 and another 500 in 2016,
mostly skilled mechanics with
background in electronics.
The Batangas plant is part of a
multi-billion peso investment
commitment of ZAMA when the
company registered with the Philippine
Economic Zone Authority (PEZA).
ZAMA’s entry into the Philippines
is recognized as one of the biggest
investments of a German company
in the country.
The facility, located at the First
Philippine Industrial Park in Sto.
Tomas, Batangas, broke ground
in September 2015.
Filipino workers are expected to
account for one-third of ZAMA’s
workforce worldwide once the plant’s
operations come into full swing.
“We are eager to work with Filipinos
as we have heard so many good
things about them,” Wagner said.
E-vehicles to be built in Subic
Taiwan-based electric motor
manufacturer TECO Electric
and Machinery Co. Ltd. (TECO)
has formed a joint venture with
Filipino motorcycle dealer Ropali
Corp. to produce electric vehicles
(e-vehicles) at the Subic Bay
Freeport, the Subic Bay Metroplitan
Authority (SBMA) announced.
January 2016
The joint venture, named Roteco,
is expected to manufacture
environment-friendly vehicles.
TECO Chairman Chao Kai Liu said
e-vehicles will provide the public
with opportunities to replace diesel
jeepneys that emit pollutants.
“By bringing out green and smart
mobility, we can raise the quality of
public transport in the Philippines
and at the same time, help reduce
carbon emission and dumping of
used oil in our environment, which
cause climate change,” Liu said.
For his part, Ropali President Roberto P.
Alingog said Roteco aims to introduce
innovation in the local transport sector
by creating e-vehicles.
“It is our advocacy to drive social
entrepreneurship by giving back to
the people clean air and a clean
living environment,” Alingog said.
Citizen PHL to invest P1.73B
The Philippine Economic Zone
Authority (PEZA) has approved
the application of electronics
manufacturer Citizen Fine Devices
Philippines (Citizen PHL) for its
P1.73-B investment in the First
Philippine Industrial Park in Santo
Tomas, Batangas.
Deca Homes Manila located
in Tondo, Manila.
8990 Holdings President and
Chief Executive Officer (CEO)
Januario Jesus Atencio said the
project would consist of 13 mid-rise
residential buildings and a mall.
The 12-story buildings will be
constructed in the 8.4-ha. complex
acquired from Tondo Holdings Corp.
and Euson Realty and Development
Corp. for P1.6B last year.
The township project would offer
shopping, dining, and recreational
facilities on top of the regular
amenities that include parks,
playgrounds, and basketball courts.
8990 Holdings has tapped Filipinoowned Megawide Construction Corp.
as partner for the Tondo project.
HOSPITALS
Vistaland joins Unimed
for hospital business
Vistaland Corporation has formed a
joint venture with VitaCare UniMed
Hospital and Medical Center as it
signaled its entry into the hospital
business.
Citizen PHL will produce crystal
blank devices, which are electric
parts used as components
in watches, mobile phones,
information-technology products,
home appliances, and automobiles.
The partnership aims to construct
14 hospitals with a combined
capacity of 3,000 beds over the
next five years under the brand
“Vitacare,” starting with what
is envisioned to be the flagship
hospital to be located in Vista City
project in Daang Hari, Cavite City.
Once fully operational, the plant
is expected to employ 530 workers
and generate USD 12.3M worth of
exports annually.
Under the venture, Unimed doctors
will manage the hospitals while
Vistaland group will have majority
stake in each of them.
Citizen PHL has operations in the
United States (U.S.), China, Hong
Kong, and Thailand.
ECONOMIC AND LOWCOST HOUSING
The first hospital will be named
Vitacare Unimed Hospital and
Medical Center; construction will
commence in May 2016. The first
phase of development, which will
offer 100 beds, is expected to be
finished in two years.
8990 unveils Tondo project
Mass housing developer 8990
Holdings is investing as much as
P8.5B for its project called Urban
The Vistaland group has allotted
P500M for the first phase
development of the hospital in
Daang Hari. For the second phase
5
of development, 300 new beds are
expected to be added.
ALI augments healthcare portfolio
Ayala Land, Inc. (ALI) is set to open
two new hospitals this year as part
of its healthcare venture.
The company only has one Qualimed
branch. The flagship brand for
the group’s healthcare portfolio is
located in Iloilo City and is already
operational.
“The one in San Jose Del Monte in
Bulacan and in Nuvali, Laguna will
open this year,” ALI President and
Chief Executive Officer Bernard
Vincent O. Dy said.
ALI is looking at having 10 hospitals
across the country by 2019.
Aster DM invests P250M in
ambulatory clinics
Dubai-based Aster DM Healthcare
is investing P250M to build at
least five ambulatory clinics in the
Philippines over the next 16 months.
Aster teamed up with local company
Casam Holdings Inc. to roll out
the investment, beginning with an
ambulatory clinic, which recently
opened at St. Francis Square in
Ortigas Center, Mandaluyong City.
Ambulatory clinics are healthcare
facilities where patients walk in
and walk out after treatment. Minor
surgeries can also be performed in
these clinics.
ENERGY
AES, Egco investing USD 700M
AES Philippines has partnered with
Thai firm Electricity Generating
Public Co. Ltd. (Egco) to invest over
USD 700M for a 300-megawatt (MW)
coal-fired power plant expansion.
The project is an expansion of the
existing 630-MW Masinloc power
plant in Zambales owned by both
companies.
Construction will start within the
first quarter of the year while
commissioning of the expansion
plant is expected in 2019.
6
SunAsia builds solar power plant
SunAsia Energy has invested
USD 120M to develop a 60-megawatt
(MW) solar power plant in Toledo
City, Cebu.
Development Corp.’s 18.9-MW phase
3 wind project in Ilocos Norte, and
North Luzon Renewable Energy
Corp.’s 81-MW Caparispisan wind
project, also in Ilocos Norte.
The facility, to occupy approximately
70 ha. of land, will have 200,000
solar panels generating up to
861,199 megawatts per hour (Mwh)
annually.
PUBLIC
INFRASTRUCTURE AND
LOGISTICS
The project will be completed in
February 2016.
3 wind projects get ERC nod
The Energy Regulatory Commission
(ERC) approved the application
of three operational wind power
projects.
3 Wind Projects
Company Capacity
Project Location
(in megawatt) Name
ICTSI expands Manila port
International Container Terminal
Services Inc. (ICTSI) announced the
expanded capacity of the Manila
International Container Terminal
(MICT) with the opening of Yard 7.
ICTSI said Yard 7 forms part of
MICT’s P5-B expansion project.
“This not only addresses the
current demand of shipping line
clients and the port community
for terminal services but also of
anticipated growth,” ICTSI said
in a statement.
Trans-Asia 54
Renewable
Energy Corp.
San Guimaras
Lorenzo
Wind
Power
Project
Alternergy 54
Wind One Corp.
Pililla Rizal
Wind
Power
Project
MPIC gets green light
for water project
Metro Pacific Investments Corp.
(MPIC) received the Notice of Award
from the Metro Iloilo Water District
(MIWD) for the P2.8-B Iloilo Bulk
Water Supply Project.
PetroWind
36 Energy Inc.
Nabas Aklan
Wind
Project
The project will be carried out by its
wholly owned subsidiary MetroPac
Water Investments Corp. (MWIC).
The three projects are now eligible
for the second wave feed-in tariff
(FIT) rate of P7.40 per kilowatt-hour
(kWh) to mitigate the impact of
higher power rates on consumers.
This is amid the recent developments
in wind technology such as
efficiency levels of wind turbine
and its evaluation on what would be
the reasonable updated level of the
FIT for the second batch of eligible
wind projects.
ERC earlier approved an FIT rate
of P8.53 per kWh for three wind
projects under the first wave of
installation targets. These projects
included Energy Development
Corp.’s 150-MW Burgos wind project
in Ilocos Norte, Northwind Power
MWIC and MIWD will enter into
a joint venture to rehabilitate,
expand, operate, and maintain
MIWD’s existing water production
facilities.
The project is expected to supply
170M liters of bulk water to MIWD
in 25 years.
PUBLIC-PRIVATE
PARTNERSHIP
PROJECTS
PHL, Japan fund railway project
The governments of the Philippines
and Japan officially signed a USD 2-B
loan facility for the construction of
the North-South Commuter Railway
Project.
Philippine Business Report
The project will have two phases
with commercial operations
targeted by year 2020.
The first phase, to be funded by the
Japan International Cooperation
Agency (JICA), will involve the
construction of a 36.7-km. elevated
commuter railway from Malolos,
Bulacan to Tutuban, Manila.
The second phase, to be undertaken
by the Public-Private Partnership
(PPP) bid winner, will extend the line
to Calamba, Laguna and farther to
Legaspi, Albay and Matnog in Sorsogon.
The PPP contract also involves the
rehabilitation of the railway lines with
total length of 653 km.
SMC ready to construct MRT 7
San Miguel Corp. (SMC) said it
is ready to start within the first
quarter of the year the construction
of the Metro Rail Transit (MRT) Line 7
that will link Quezon City and
San Jose del Monte City in Bulacan.
SMC unit Universal LRT Corp.
announced it already hired a
contractor and suppliers and would
submit the project’s financial
closure to the government, after
which construction can commence.
MRT 7 involves the construction
of a 22.8-km. rail system from
North Avenue at the corner of EDSA
in Quezon City, passing through
Commonwealth Avenue, Regalado
Avenue and Quirino Highway
up to the proposed intermodal
transportation terminal in San Jose
del Monte City, Bulacan. The project
will cover 14 stations.
It also includes the construction of
a 22-km. road that will connect to
North Luzon Expressway near the
Bocaue exit in Bulacan.
AVIATION
PAL acquires 7 aircraft
Philippine Airlines (PAL) is set to
acquire seven units of aircraft this
year as part of its regional and longhaul flight expansion.
The company is looking at
purchasing five Airbus A321s and two
January 2016
Boeing 777s to service the United
States (U.S.) and Europe routes.
PAL currently flies six Boeing 777300ERs daily flights to Los Angeles
and San Francisco in the United
States (U.S.); Vancouver and Toronto
in Canada; and London in the United
Kingdom (UK).
BANKING
China Bank opens
more NCR branches
China Banking Corporation (China
Bank) opened last 22 December
2015 the final 10 branches scheduled
for last year, all in Metro Manila,
bringing its total branch network to
517 nationwide—352 China Bank and
165 China Bank Savings (including
subsidiary Plantersbank).
The Bank opened three branches
in Manila, two each in Quezon City
and Parañaque, and one each in
the cities of Makati, Pasig, and San
Juan. To date, there are 175 China
Bank branches within Metro Manila.
In 2015, a total of 47 branches were
opened, 38 of which are China Bank,
including these new branches, and
nine China Bank Savings branches.
China Bank plans to sustain its
branch expansion plan, targeting
to open 50 branches for the main
bank and 16 for the savings bank
this year.
PNB, Allianz forge partnership
Philippine National Bank (PNB) and
Allianz AG of Germany are mulling
a joint venture bancassurance
company, which is offering insurance
products through banks.
The partnership would allow the
German insurer access to PNB’s
branch and customer network in
offering various insurance products
while PNB will acquire onshore
and offshore opportunities for its
banking products.
PNB currently has 662 domestic and
76 overseas branches.
The existing bancassurance
partnerships in the country are
the Philippine AXA Life Insurance
Corp., BPI Philam Life Assurance
Corp., SunLife Grepa Financial Inc.,
Manulife Chinabank Life Assurance
Corp. and Generali Pilipinas Life and
BDO Unibank.
Wikipedia defines bancassurance
or allfinanz as the partnership or
relationship between a bank and
an insurance company, or a single
integrated organization, whereby
the insurance company uses the
bank sales channel in order to sell
insurance products, an arrangement
in which a bank and an insurance
company form a partnership so that
the insurance company can sell its
products to the bank's client base.
IT-BPM
Australian BPM firm
to expand in Clark
Australian business process
Management (BPM) firm Beepo
disclosed its plans to expand its
Philippine operations at the Clark
Freeport Zone from 200 to 5,000
workers for the next five years.
Beepo Chief Executive Officer
Aimee Engelmann said the firm
plans to hire around 1,000 workers
yearly to meet the BPM sector’s
rising demand. The firm invested
P13.2M to increase its personnel
from 15 to 200 since it opened in
April 2014.
“We have a long-term vision to
grow and remain in the area
[Clark]...I could see an opportunity
to combine the fantastic talents
here in the Philippines and paired
it up with Australian businesses,”
Engelmann said.
For Engelmann, Beepo’s expansion
plan can help stir greater interest
among other Australian businesses
to do business in the Philippines.
He further noted that Clark
Freeport Zone faces a positive
future for business with its
impressive facilities and
infrastructure.
7
Engelmann further noted that
Beepo’s promotion of work-life
balance allows its workers to spend
more time with their families. Most
of the firm’s shifts start at 7:00 a.m.
and end at 4:00 p.m.
MINING
Republic Cement eyes
nationwide expansion
With the Philippine government’s
continuous drive to modernize the
country’s infrastructure, Republic
Cement Services, Inc. (RCSI) is
considering to establish new
production facilities, particularly
in Visayas and Mindanao.
RCSI President Don H. Lee
disclosed the move following the
Department of Public Works and
Highway’s (DPWH) announcement
that Visayas and Mindanao are
currently teeming with infrastructure
projects.
Lee noted that the DPWH’s budget
allocations in Visayas and Mindanao
should be coupled with a guarantee
to sustain the local cement
industry’s capacity to provide for
infrastructure projects.
Citing a Cement Manufacturers’
Association of the Philippines report
showing a year-over-year cement
demand increase of 18% during the
third quarter of 2015, Lee said that
the country has one of the most
vigorous cement markets in the world.
With continuous developments in
infrastructure and construction
of residential and commercial
facilities, Lee expressed his
confidence that RCSI is in a prime
position to invest ahead of demand.
REAL ESTATE
Avida starts building twin-tower
condo in BGC
Ayala Land subsidiary Avida Land is
constructing a twin-tower residence
in Bonifacio Global City (BGC) worth
8
at least P6.8B, with the first tower
set to be ready for turnover by 2020.
During the launching of the first
tower of Avida Towers Turf BGC
in November 2015, Avida Senior
Division Manager Herbert M.
Herrero said that the twin towers
will be a low-density development
consisting of 18 units per floor.
Herrero noted that the twin towers
would have 537 units across 30
floors each, while six floors are
designated for parking spaces. Units
range between 37 sqm. to 58 sqm.
with selling prices between P5.2M
and P10M.
The twin towers will also host a
complete set of amenities that
include adult and children’s
swimming pools, clubhouse, play
area, indoor gym, view deck, and
garden. The entire area of the twin
towers will be surrounded by streets
on all sides for convenient access.
Avida currently has 3.2 ha. of land
in BGC. The twin towers project is
the latest in a long line of the firm’s
developments in the area, which
includes residential towers like
Avida Towers Verte and Avida Towers
34th Street and office buildings like
One Park Drive.
DMCI to launch
new housing projects
Consunji Group’s property subsidiary
DMCI Homes is set to launch nine
housing projects in 2016. The firm
targets a total sales value of P50B
for the new projects, higher than
last year’s P30B sales value target.
DMCI Homes Chief Financial Officer
Joseph Ramil B. Lombos said the
housing projects would amount to
14,000 units, which is a significant
increase compared to the 10,000
units launched by DMCI in 2015.
Apart from the housing projects,
DMCI is exploring other ventures in
the real estate market, including
office spaces and mass housing.
DMCI Homes President Alfredo
R. Austria disclosed that the firm
plans to launch its first mass housing
project in Bataan.
“[DMCI’s first mass housing project]
will possibly be in Bataan but we’re
still studying the details,” said
Austria.
DMCI is also set to launch a 300-unit
condominium project in Manila’s Bay
Area, noted Austria. As the firm’s
landmark high-end project in the
area, the condominium will feature
80 sqm. to 100 sqm. units priced
above P10M.
AeroPark Campus to rise in Clark
Global Gateway Development Corp.
(GGDC), the local operating unit
of Kuwait-based KGL Investment
Company, seeks to create 300,000 jobs
in 10 years in Clark Freeport Zone
through the construction of the
AeroPark Campus.
GGDC Chief Executive Mark E.
Williams said the 27-ha. AeroPark
Campus, which is part of the 177-ha.
Global Gateway Logistics City
(GGLC), will be constructed in four
phases, starting with the first phase
dubbed “Quadrant 1.”
Quadrant 1, according to Williams,
will include office buildings with a
combined floor area of 142,000 sqm.
Retail establishments, which will
cost an estimate of USD 150M
to build, are also set for
construction in the area.
GGDC President Michael V. Russell
said the AeroPark Campus is
designed to accommodate business
process outsourcing (BPO) clients.
Each office building has two retail
levels to serve tenants and
the local community.
Construction of Quadrant 1 began
in November 2015 and is slated
for completion by May 2017.
GGDC employed the help of top
architectural and engineering firms,
contractors, and consultancies for
the design and construction of the
project.
RETAIL
Metro Retail plans to open
70 stores in 5 years
Gaisano-owned Metro Retail Stores
Group Inc. seeks to expand its retail
Philippine Business Report
business by opening up to 70 stores
in the course of five years, using
P3.62B in fresh capital from its
initial public offering (IPO).
Metro Retail Chairman and Chief
Executive Officer (CEO) Frank S.
Gaisano said the firm’s listing with
the Philippine Stock Exchange
(PSE) bolstered its position as a
formidable retail player in Visayas.
Having amassed 400,000 sqm. of
gross floor area (GFA) across 46
stores in Visayas, the firm is the
largest retailer in the region. The
firm has since pursued a district
growth trajectory in expanding
from its first store in Cebu City to
surrounding areas.
Gaisano said the expansion plan
will still focus on Visayas, citing its
large number of underserved areas.
The firm also plans to expand in
Mindanao by 2018 through mergers
and acquisitions.
Aware that most underserved areas
in Visayas cannot sustain full-scale
department stores, Metro Retail
Vice-President for Business
Development Joseph Conrad M.
Balatbat said building hypermarkets
will be the firm’s strategy for those
areas.
Balatbat added that the company
plans to open seven stores in 2016,
with the view of accelerating store
openings by 2017 by opening 10 to
12 stores annually. Currently, the
firm has secured 30 sites in Visayas
for its expansion plan.
Largest Thai online retailer
launches PHL operations
Thai e-commerce firm iTrueMart
opened its first overseas operations
in the Philippines with the launching
of iTrueMart.ph. The firm, which
is under Thailand’s Ascend Group,
plans to be the largest online
retailer in the country in two years.
Ascend Group Chief Executive
Officer (CEO) Punnamas
Vichitkulwongsa said iTrueMart’s USD
150-M investment in the Association
of Southeast Asian Nations (ASEAN)
Economic Community (AEC) for
2016 will be spent on logistic
January 2016
hubs, marketing, and inventory
enhancements.
iTrueMart is set to invest up to
USD 50M in 2016, allowing Filipino
consumers to gain access to a wide
range of products with competitive
prices and payable through multiple
payment channels.
Ascend Group Chief Operating
Officer (COO) for E-Commerce
Dean Krstevski said the Philippine
e-commerce market’s infancy
provides several opportunities for
players like iTrueMart to thrive.
The company banks on its sustained
success to expand in the AEC, where
e-commerce is seen to expand as
its mobile Internet users increased
to 56% in 2015. Since October 2014,
the firm has averaged 4.6M monthly
site visits and 7,000 orders daily.
Daiso, Robinsons Retail to forge
stronger ties
Japanese store chain operator Daiso
Industries Ltd. is set to strengthen
its ties with its appointed franchisee
Robinsons Retail Holdings Inc. (RRHI)
in light of the impressive growth of
the Daiso Japan store chain in the
Philippines.
Daiso Industries Ltd. President
Hirotake Yano reaffirmed the
exclusive partnership between the
firm and RRHI, given the Supreme
Court’s (SC) ruling preventing Japan
Home Center (JHC) from using the
trademark “Daiso.”
RRHI Chief Operating Officer
(COO) Robina Y. Gokongwei-Pe also
expressed optimism about Daiso
Japan’s expansion in the country,
citing its reputation as a reliable
Japanese brand that combines
great quality and affordability of its
products.
Currently, there are 44 Daiso Japan
stores in the country and more
than 2,400 stores worldwide in 30
countries. Yano is confident that the
store chain will continue to grow in
the country, having cited its growth
as one comparable to the firm’s
stores in Japan.
TELECOM
PLDT to spend P43B this year
The Philippine Long Distance
Telephone Co. (PLDT), the Philippines’
largest telecommunications company,
has allocated P43B for its capital
spending this year to strengthen its
position amidst growing competition.
PLDT Chairman Manuel V.
Pangilinan laid out plans for
upcoming changes in the firm as it
aims to bolster its profits.
Pangilinan bared the plans to create
more apps leaned towards finance
and personal loans. The firm also
seeks to deliver more content
through services such as iFlix, which
provides unlimited access to several
movies and television shows.
Globe to construct
P3.7-B cable station
Globe Telecom Inc. is set to spend
P3.7B to build a new international
cable landing station to support the
increasing demand for mobile and
broadband services in the Philippines.
Globe sought provisional
authority from the National
Telecommunications Commission
(NTC) to build, operate, and maintain
an international cable landing station
in Davao City, citing the need to
increase capacity for international
telecommunications services.
Globe’s international cable landing
station in Davao forms part of the
USD 250-M Southeast Asia (SEA)United States (US) undersea cable
system, which will deliver an
additional 20 terabits per second
capacity via the latest transmission
equipment.
The SEA-US undersea cable system
is expected to fill the growing
demand for international
connectivity in all Southeast Asian
countries like the Philippines,
providing more efficient connectivity
to more than 1B subscribers.
9
COMPANY
NOTES
Meralco bares
P159-B 5-year investment
Manila Electric Co., the largest
electricity retailer in the Philippines,
will invest P159B for five years to
cater to its customers’ changing
needs by strengthening its electricity
distribution and generation business.
Meralco First Vice-President and
Group Treasurer Rafael L. Andrada
said the firm will spend some P91B
for the distribution sector and P68B
for the generation sector between
2016 and 2020.
The investment is set to benefit
Meralco’s current projects, which
include the following:
q 1,200-megawatt (MW) coal-fired
plant in Atimonan, Quezon
q 600-MW coal-fired plant in Subic,
Zambales
q 455-MW coal-fired plant in
Mauban, Quezon
Meralco earmarked P25.7B for
2016 alone, 47% of which will go to
customer growth, 26% for improving
reliability and distribution quality,
13% for storm hardening programs,
and 6% for information technology
(IT) investments.
Araneta Center grows via
P30-B redevelopment
The Araneta Group’s P30-B
refurbishing of the Araneta Center
in Cubao, Quezon City led to
additional growth for the firm in
2015. The firm has allotted the
amount for the redevelopment of its
business and entertainment district
for a 20-year period.
The mixed-use 35-ha. Araneta
Center is currently being
transformed into a garden city that
is set to host more shopping malls,
office spaces, retail areas, hotels,
and residential establishments.
Notable developments to watch out
for include the renovated Kia Theatre,
which will seat 2,500 people and host
10
dining establishments, and the Novotel
Manila Araneta Center, the district’s
first business and leisure hotel.
An expansion of the existing
Gateway Mall, named Gateway Mall
2, will provide more upscale choices
to shoppers in Araneta Center. The
Manhattan Garden City, an 18-tower
residential complex, is also set for
completion this year.
The CyberPark Towers will provide
five towers for business process
outsourcing (BPO) companies within
Araneta Center. The 60-storey Civic
Plaza will include mixed-space
amenities and vast greenery with
emphasis on hosting public events.
Convergys lauds continuous
growth in PHL
Convergys Corporation, a leading
multinational customer management
firm and the Philippines’ top
employer in the private sector,
reaffirmed its sustained commitment
in the country in a visit of the firm’s
Board of Directors in November 2015.
In a courtesy call at the Malacañang
Palace, the Convergys Board of
Directors assured President Benigno
S. Aquino III of the firm’s support
for the government’s effort to reach
inclusive growth through support for
its relevant priorities and initiatives.
The IT and Business Process Association
of the Philippines (IBPAP) highlighted
the business process management
(BPM) industry’s USD19-B revenue
contribution for the country in 2014,
second only to overseas remittances.
Convergys President Andrea J. Ayers
said the firm’s remarkable growth in
the country from 1,000 employees
in 2004 to more than 60,000 as
of November 2015 across 34 sites
encourages it further to develop more
careers and contribute more to the
country’s economic growth.
Convergys’ USD 786.2-M revenue in
the Philippines accounts for a large
portion of the firm’s USD 3-B global
revenue for 2014. Some 40% of the
firms’ sites are located outside Metro
Manila, signifying its commitment to
inclusive growth in the country.
New ETS hub opened
Unilever built its new global
enterprise and technology solutions
hub (ETS) in the Philippines which
will generate 500 more jobs in the
business process management (BPM)
industry. These new employments
are on top of the company’s existing
work force of 1,800 employees.
The new hub will also be Unilever
Philippines’ new head office. The
ETS in Bonifacio Global City is the
corporation’s fourth global ETS hub.
The new ETS center in the country
is the company’s second largest,
next to the one located
in Bangalore in India.
“The Philippines has a phenomenal
pool of about half-a-million highquality graduates, every single
year coming into the work force.
This is also the third-largest
English-speaking country in the
world, a terrific hub for a BPO. It’s
competitive from a cost perspective
but also offers a strong partnership
with the government. All of these
things have led to the Philippines
becoming No. 1 in voice services,”
Unilever Chief Financial Officer
Graeme Pitkethly said.
Unilever has developed its facilities
to become zero-waste and has
initiated programs to benefit 25,000
coconut farmers for the supply of
coconut oil goods for its products.
Jollibee sees double-digit growth
Jollibee Foods Corp. (JFC) projects
that its revenues and net income
will post double-digit growth rates
yearly in the next five years.
“Growth will be driven by local and
international operations,” JFC
Chairman Tony Tan Caktiong said.
In the first nine months of 2015,
Jollibee’s net income climbed 6.75%
to P3.9B from P3.7B in 2014.
In 2016, JFC aims to build Jollibee
branches in the United Kingdom
Philippine Business Report
Villar group plans 20 AllHome
stores in 2016
AllHome, a one-stop shop for home
builders and designers owned by
the Villar group, recently opened its
11th store at Vista Place in Quezon
City and aims to open nine more
branches before the end of 2016.
According to All Value Holdings
Corporation Chairman Manuel B.
Villar, there is already a plan to
locate nine branches in Iloilo,
Cagayan de Oro, Bulacan, and
Batangas.
COUNTRY-TOCOUNTRY
PHL, Mexico agree
to promote tourism
The Philippines and Mexico signed
bilateral agreements during the AsiaPacific Economic Cooperation (APEC)
2015 Summit promoting active
tourism between the two countries.
“Mexico is one of the most
successful tourism economies in
the world and for that alone, we
have much to learn from them
in terms of exchange of ideas
and they offered to be active in
that exchange,” Department of
Tourism (DOT) Secretary Ramon R.
Jimenez Jr. said.
Jimenez said there will be possible
direct flights between Manila and
Mexico which will further boost
the tourism industry. This will be a
new opportunity for both countries
because Mexico is not in the top 20
of the Philippines’ tourism market.
PHL, New Zealand trade
improves 6.4% in 2014
The Philippines and New Zealand’s
trade relations have increased 6.4%
to USD 553M in 2014.
President Benigno S. Aquino III and
New Zealand Prime Minister John
Key discussed this during a bilateral
meeting during the Asia-Pacific Economic
Cooperation (APEC) 2015 Summit.
January 2016
President Aquino thanked Key for
taking care of about 40,000 Filipinos
in New Zealand who are making
“significant contributions” to New
Zealand’s economic development.
“He [Aquino] welcomed the signing
of the arrangement on the principles
and controls on the recruitment
and protection of Filipino workers
in New Zealand, as this will be
instrumental in ensuring the welfare
of our workers,” Press Secretary
Herminio B. Coloma Jr. related.
“We are happy to note that our
relations have grown even stronger
as we foster people-to-people
interaction and economic ties,”
Coloma quoted Aquino.
PHL, Chile sign free trade
agreement
The Philippines and Chile agreed
to initiate a study on a free
trade agreement (FTA) as well as
strengthen cooperation on disaster
risk reduction and management.
The signing of the two agreements
was witnessed by President Benigno
S. Aquino III and Chile President
Michelle Bachelet after the
“engaging and broad-ranging” talks
to strengthen the bilateral relations
between the two countries.
“As regards the economic
interaction between Chile and the
Philippines, President [Bachelet]
and I witnessed the signing of a
Letter of Intent on Enhancing Trade
Relations,” President Aquino said.
The President added that through
this agreement, both parties
mandate the Department of Trade
and Industry (DTI) of the Philippines
and the General Directorate for
International Economic Relations
(DIRECON) of Chile to continue talks
in 2016 and develop a framework for
a mutually beneficial trade agreement
between the two countries.
“Our wish is to start the negotiation
during the first semester of 2016
because we think it would be a good
way to commemorate the 70 years
of diplomatic relations between
both countries,” President
Bachelet said.
INTERNATIONAL/
REGIONALWATCH
PHL eyes more FTAs with EU
The Philippines is pursuing
significant efforts for forging free
trade agreements (FTA) with
member economies of the European
Union (EU) as several major
developments are seen happening
before the Aquino Administration
ends its term in June 2016.
“We are about to conclude the EU
scoping negotiations. When you say
you are about to conclude scoping
negotiations, that means you will be
starting the official FTA negotiations,”
DTI-Industry Development Group
(DTI-IDG) Undersecretary Ceferino S.
Rodolfo said.
The country has been on the scoping
phase for its FTA negotiations with
the EU since 2013 and the expected
start of formal negotiations soon is a
positive development for the country.
“They saw our efforts when it comes
to the Competition Law which has
been passed finally after decades.
They also saw the amendments to the
Cabotage Law. The Strategic Trade
Management Act has been passed and
foreign banking has been liberalized.
They saw that all of these are for good
governance and for liberalization. They
saw the reform efforts would continue,
so they became more confident in the
Philippines,” Rodolfo said.
Philippine Postal Permit No. 504
(UK) and Italy, and soon in Australia,
Canada, Japan, Malaysia, and Oman.
11
ECONOMIC
INDICATORS
GNI Growth Rate (%)
7
6
5
4
3
2
1
0
143
142.5
142
141.5
141
140.5
Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
(In USD Billion)
6000
5000
4000
3000
2000
1000
0
As of 29 January 2016
47
6000
5800
Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15
(1994 base year)
1
0.5
46
45.5
6200
1.5
46.5
Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16
6600
0
(In USD Billion)
6400
2
47.5
Imports
5600
Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15
Interest Rate (%)
Inflation Rate (%)
Peso per US Dollar Rate
48
3Q (2014) 4Q (2014) 1Q (2015) 2Q (2015 3Q (2015) 4Q (2015)
Exports
Consumer Price Index
(2000 base year)
3Q (2014) 4Q (2014) 1Q (2015) 2Q (2015) 3Q (2015) 4Q (2015)
GDP Growth Rate (%)
8
7
6
5
4
3
2
1
0
7
6
5
4
3
2
1
0
Lending Regular
As of 29 January 2016
Jul-15 Sep-15 Oct-15 Nov-15 Dec-16 Jan-16
Sources: Bangko Sentral ng Pilipinas (BSP)
Philippine Statistics Authority (PSA)
Photos: Google.com
Entered as Third-Class Mail at the
Makati Central Post Office
under Permit No. 504
valid until 31 December 2016
Editorial Team: Patricia May M. Abejo/Editor-in-Chief • Alfonso M. Valenzuela/Managing Editor • Cresenciano P. Par/Assistant Editor •
Jamila Joy H. Raposon, Kristina S. Andaya, Martin T. Millete, Renaldo C. Neneria/Writers • Renaldo C. Neneria/Design Layout •
P u b l i s h e d m o n t h l y b y t h e K n o w l e d g e M a n a g e m e n t a n d I n f o r m a t i o n S e r v i c e , D e p a r t m e n t o f T r a d e a n d I n d u s t r y,
2F Trade and Industry Building, 361 Sen. Gil J. Puyat Avenue, Makati City 1200, Philippines • Phone
( + 6 3 2 ) 8 9 5 . 3 6 1 1 • F a x ( + 6 3 2 ) 8 9 5 . 6 4 8 7 • To s u b s c r i b e , e - M a i l : p u b l i c a t i o n s @ d t i . g o v . p h • w w w . d t i . g o v . p h
12
PhilippineJanuary
Business
Report
2016
Philippine Business Report