Saturday, 24 May 2008

Australia increases aid to Philippines

ABC News

The Federal Government has increased aid to the Philippines to $105 million (4.38 billion Philippine pesos) for 2008-2009 to boost economic growth, education and security, the Australian embassy in Manila says.

This increases Australian aid to the Philippines by nearly 9 per cent over the previous year, an embassy statement said.

It will include over $10.1 million to help upgrade and maintain road infrastructure in the country, Australian Ambassador Rod Smith said in the statement.

Another $24 million will go to support improvements in education for Muslim and tribal Filipinos, and to implement reforms in basic education.

Australia will also continue to support efforts to bring peace and rehabilitation to areas in the Philippines that have been ravaged by Muslim separatist and communist insurgencies, the statement added.

US supports Japan rice initiative
WASHINGTON, May 23 (Reuters) - U.S. and Japanese officials agreed on Friday that quick action was needed to address global hunger and bring stability to the world rice market, the office of the U.S. trade representative said.

"Both countries agreed on the need to act expeditiously," USTR spokeswoman Gretchen Hamel said in a statement after the two sides held talks in Washington.

Rice prices have nearly tripled over the past year as part of the run-up in commodity prices that has triggered food riots around the world.

Japanese officials told the United States they would "favorably consider" the Philippines' request for the release of 200,000 tonnes of imported rice, Hamel said.

Japan has long protected its rice farmers from foreign competition, but it is obligated under world trade rules to import a minimum amount each year.

To the frustration of the United States and other foreign suppliers, the Japanese government stockpiles the imported rice.

Its current stockpile stands at about 1.5 million tonnes, enough to feed 24.5 million Japanese for a year, The Washington Post noted in an editorial earlier this week urging Japan to put those supplies on the world market.

Tokyo needs permission from its foreign suppliers to sell any of the imported rice.

Hamel said the United States was "supportive" of Japan considering the Philippine's request for 200,000 tonnes.

The United Nations' Food and Agriculture Organization forecast on Thursday that rice, a staple for more than half the world's population, would remain in short supply on global markets, and poor countries that rely on food imports could see food bills up 40 percent this year after a similar price hike in 2007.

At the same time, Japan -- a major food importer -- has been concerned by actions that several countries have taken to restrict wheat and other food exports.

"The United States took this opportunity to urge that the two countries coordinate their diplomatic efforts to persuade other food exporting countries to lift their recent food export restrictions, and to coordinate their food aid efforts around the world," Hamel said.
She said the two countries would continue their discussions in the coming weeks. (Editing by Peter Cooney) (; +1 202 898 8300; Reuters Messaging:

Friday, 23 May 2008

World's First: Philippines to measure rainfall via cellphone equipment

MANILA, May 22 (Xinhua) -- The Philippines will test the world's first national rain measurement system in June using mobile phone equipment, media reports said on Thursday.

The technology involves monitoring signals sent between mobile phone transmitters and cellphones during rainy days. Heavy rainfall weakens signals between transmitter and receiver which explains the difficulty of sending and receiving text messages during typhoons.

"The beauty of it is that the lost transmission is directly related to the rain rate," Tangonan said. "The more rain you have the less text messages that you get."

Conceptualized for the last three years, the locally-developed project will initially measure rainfall at the Port of Batangas, a province 110 kilometers south of Manila, allowing researchers to build what may well be a prospective "typhoon warning system," Philippine TV network GMA News reported.

The system "is very relevant to our understanding of how our society can predict the effects of major typhoons," said Gregory Ligot Tangonan, the project's head.

According to Tangonan, the project will allow researchers to determine rain patterns, including other data which may help the Philippines prepare for floods. Once implemented nationwide, the project could also help policymakers in identifying areas prone tofloods.

Tangonan added that Filipinos should be experts in this field, especially since the country is visited by 19 typhoons every year.

President Arroyo signs Magna Carta for Micro, Small & Medium Enterprises

President Gloria Macapagal-Arroyo today signed into law the proposed amendments to the Magna Carta for Micro, Small and Medium Enterprises (MSMEs) at the Rizal Hall of Malacanang.

The new law, RA 9501, amends the 17-year-old RA 6977, the Magna Carta for Small and Medium Enterprises, which did not have any provision for “micro” enterprises.

Micro enterprises, with total asset size of not more than P3 million, were not explicitly included as qualified beneficiaries of government assistance under RA 6977 even as they comprise 91.8 percent of the country’s business sector. While they were covered by the Barangay Micro Business Enterprises (BMBE) Act of 2002, they have been missing on other government interventions and support provided to SMEs by RA 6977.

RA 9501 henceforth includes micro enterprises among the government-assisted businesses, and expands the definition of small and medium enterprises in terms of total asset size, excluding land.

Now falling under the category of “small” enterprises are businesses with P3,000,001 to P15 million in total assets less landholdings; and “medium” enterprises, P15,000,001 to P100 million.

The amended law mandates credit institutions to allocate at least eight percent of their respective total loan portfolio for micro and small enterprises; and at least two percent for medium enterprises.

RA 9501 has also increased the capitalization of the government-owned Small Business Guarantee and Finance Corporation from P5 billion to 10 billion.

RA 6977 had to be amended because the mandatory allocation of financing to SMEs had elapsed in 2007.

The new law is a consolidation of Senate Bill 1646 and House Bill 1754. The Senate bill was principally authored by Sen. Loren Legarda, while the House bill was co-authored by Bulacan Rep. Maria Victoria Alvarado and Quirino Rep. Junnie Cua.

The Magna Carta is among the priority bills of the Arroyo administration. The Chief Executive, in her inaugural address in 2004, had listed the creation of a million jobs via the development of entrepreneurs at the top of her ten-point agenda.

Also in the signing ceremonies were Senators Edgardo Angara and Miguel Zubiri, both co-authors of Senate Bill 1646; congressmen led by House Speaker Prospero Nograles; and Cabinet members led by Executive Secretary Eduardo Ermita.

3 foreign groups keen on DMIA Terminal 2 project

By Max V. de Leon
The Business Mirror

THE Clark International Airport Corp. (CIAC) is set to bid out the contract for the construction of the P10-billion Diosdado Macapagal International Airport (DMIA) Terminal 2 in the third quarter of the year, with at least three foreign groups already making known their interest to build it.

Victor Jose Luciano, president and chief executive officer of CIAC, said his company is now finalizing the provisions of the terms of reference (TOR) and will probably have it ready in a month.

“We will have the TOR in one month and then announce it for an international bidding,” Luciano said.

He said an important feature of the TOR is that the winning proponent should introduce new technology to the terminal.

Also, Luciano said CIAC would want more commercial spaces like duty-free shops and restaurants.

After bidding out the contract, Luciano said CIAC wants construction to start in the fourth quarter of the year so the terminal will be ready for commercial operation by the end of 2009.

“Several groups have already expressed interest in it,” he said.

One of them, he said, is the builder of the Changi Airport in Singapore, which intends to partner with a local firm in undertaking the project.

The other groups that are interested, he said, is a Middle Eastern firm and a Chinese developer.

The DMIA Terminal 2, Luciano said, will increase the passenger capacity of the international airport to 8 million.

This, he said, is needed as they expect passenger arrivals in the airport to reach three million by 2010, especially if President Arroyo would sign Executive Order 500-B, which would further liberalize the DMIA.

Aside from this, Luciano said the government has intensified its negotiations with different countries for new air agreements so the airport will get more flight entitlements.

“Our big job now is to market Clark with the momentum we already gained,” he said.

Sandigan orders arrest of 11 in lamppost case

Ellalyn B. de Vera
The Manila Bulletin

The Sandiganbayan yesterday ordered the arrest of Department of Public Works and Highways (DPWH) Regional Director Robert Lala, former Mandaue City Mayor Thadeo Ouano, and nine others in connection with their alleged involvement in the P365-million lamppost case in Cebu.

The anti-graft court’s Third Division also ordered the arrest of former DPWH assistant regional director Gloria Dindin, assistant regional director and chairman of Bids and Awards Committee (BAC) Marlina Alvizo, BAC Maintenance Division officer-incharge Pureza Fernandez, BAC Maintenance Division assistant chief Cresensio Bagolor, and the other members of the BAC, Agustinito Hermoso, Luis Galang, Restituto Diano, and Buenaventura Pajo, and Gampik Construction and Development Inc. Chairman Gerardo Surla, for violations of Republic Act (RA) 3019 or the AntiGraft and Corrupt Practices Act.

Associate Justice Francisco Villaruz Jr. directed the Sandiganbayan sheriff to arrest the suspects following the filing of seven counts of graft charges last April.

The charges stemmed from the allegedly overpriced acquisition and installation of lampposts and street lighting facilities along the streets of Cebu, Mandaue, and Lapu-Lapu cities in Cebu for the 12th Association of Southeast Asian Nations (ASEAN) Summit in 2007.

Ombudsman Merceditas Gutierrez ordered last April the filing of graft charges before the Sandiganbayan against those involved.

In a fact-finding investigation led by the Public Assistance and Corruption Prevention Office (PACPO) of the Ombudsman Visayas, overpricing was established by comparing the costs of lampposts indicated in the programs of work and detailed estimates prepared by Mandaue City and reflected in the importation documents.

San Miguel Pale Pilsen Asia’s best tasting beer

The Manila Bulletin

San Miguel Pale Pilsen is the best tasting beer in Asia, according to a popular US Magazine which recently gathered major beer brands from China, Japan, Indonesia, Thailand, Singapore and Philippines for a taste test.

The iconic brand of San Miguel Brewery, Inc. (SMB), San Miguel Pale Pilsen bested six other international brands in all categories – appearance, aroma, taste and finish — used by the magazine to determine the best tasting beer.

In the article entitled "Far East Beer Showdown" by Derek Buono published in Beer Magazine’s March to April issue, the lone Filipino beer brand has been described as having "the most flavor and tasted better than all the other beers of the region."

"The SMB family is truly inspired by the recognition given to San Miguel Pale Pilsen. We are glad that our very own product stands above the rest and for us Filipinos, that’s something worth celebrating for," said SMB management.

San Miguel Pale Pilsen was also recommended for its "certain wheat/ citrus hit that sets it apart from the rest," that one can "drink lots of it with most Asian foods and in most climates."

San Miguel Pale Pilsen, one of the eight widely popular beer brands in the SMB portfolio, is known for its smooth moderate bitterness, pleasant hoppy aroma and snappy clean palate.

COSCO prefers joint venture for $ 5-B project

The Manila Bulletin

China Ocean Shipping Co. (COSCO), the world’s second largest shipping company, now prefers to pursue its $ 5-billion integrated shipbuilding and international logistics project in the country via joint venture with a local partner shying away from its original investment strategy of directly investing in a wholly-owned local subsidiary.

Getting a local partner that is familiar with the local environment would shield a foreign investor and help facilitate their entry. COSCO’s entry has delayed for almost a year already.

Malacañang special envoy for trade and investments Francis Chua told reporters that company chairman Capt. Wei Jaifu is seriously evaluating possible local partners for the project."

Capt. Wei is looking for a good local partner with strong capability and they are evaluating several interests," Chua said noting there are several local companies engaged in similar activities that could be tapped by COSCO as its local joint venture partner.

The decision of COSCO to go into joint venture with a local partner instead of directly investing in a wholly-owned local subsidiary may have been influenced by the controversies encountered by Hanjin Heavy Industries Corp. for its two huge shipbuilding facilities in Subic and in Misamis Oriental, each costing $ 2 billion.

Aside from being familiar with the local environment, the local entity would be responsible for all its deals in the country. It also reduces political risks on the part of COSCO. Chua said there are lots of local firms that are engaged in shipbuilding, shiprepair and shipyard operations in the country that COSCO can choose from.

In December last year, Chua already urged Capt. Wei to strengthen its local operations by putting up a Philippine office to pave the way for its planned huge investments in the shipping and related projects in the country.

Chua said that COSCO has been operating in the country since the 80s but are merely port calls for its cargo ships.

By beefing up its small local operations, Chua said that COSCO will be sending a positive signal that it is seriously pursuing its interest in the country.

According to Chua, there was a suggestion from a COSCO official to put the planned Philippine operations under its Singapore office.

But Chua noted that placing its Philippine operations under Singapore may not send a good signal for COSCO because this could mean lesser role for the country in its regional operations.

At time, Chua said that COSCO was firming up its plan of splitting up its supposedly integrated international logistics project in the country in two separate areas —one in Subic for its logistics, shipbuilding and industrial zone components and another in Sangley Point in Cavite City for ship repair and maintenance facilities plus a maritime school.

The decision to split the investments into two locations came after determining the viability of having the huge investments located in a single location.

"Wei was also impressed by Subic freeport’s ready port facilities. On the other hand, the Sangley Point in Cavite City still needs a lot of work to be done including the reclamation of some areas," Chua said.

The Chinese shipping company has already received several offers from different local government units including Bataan, Subic, Quezon and a small island in the south."COSCO needs a few hundred hectares because of the industrial zone component," Chua said. Under the Sangley Point plan, COSCO would have to reclaim 4,000 hectares around Cavite because the project is not supposed to displace the Philippine Navy, which is headquartered in Sangley Point.

With the constraint in available space, Chua said Sangley Point could easily accommodate the planned maritime school only and the planned shipbuilding facility and industrial zone in another site.

Chua said that COSCO is taking time for its planned investment and this seemingly slow decision-making process has nothing to do with the controversial National Broadband Network contract with ZTE Corp. of China, which the Philippine government has ordered cancelled.

"The Chinese are not the kind who would back out nor pull out from a project. They would rather proceed on their own time," Chua said.

Wei visited the country in June last year and met with President Gloria Arroyo on the planned investments in the country.(BCM)

Thursday, 22 May 2008

Business Sentiment Remains Positive but Turns More Cautious in Q2 2008

Bangko Sentral
Media Releases

Business sentiment remains positive

Business sentiment in Q2 2008 remained positive as indicated by the overall confidence index (CI) of 12.6 percent. This means that the number of respondents with a positive outlook outnumbered those with a negative outlook. However, this is the second consecutive quarter that the overall CI has declined quarter-on-quarter (by 17.3 index points) and year-on-year (by 33.8 index points). The lower index is consistent with the broadly more cautious sentiment of businesses and consumers in many developed economies.

Firms cited the following factors for their more cautious outlook: 1) concerns over a possible recession in the country’s major trading partner, the US; 2) volatile and high crude oil prices; 3) rising prices of goods (including food and especially rice) and services (transportation and communication); 4) high input/raw materials costs; 5) petitions for wage hikes; and 6) local political noise. Expectations of increases in non-oil commodity prices in global markets also contributed to the weaker business outlook.

The business outlook for Q3 2008 at 16.6 percent was similarly lower by 24.4 points and 28.1 points when compared to the levels posted last quarter and last year.

The confidence level of respondents from both the NCR (National Capital Region) and the AONCR (Areas Outside National Capital Region) tracked the national trends as the CIs remained positive but at levels lower than those posted in the previous quarter and a year ago.

Responses of firms by type of business (i.e., importer, exporter or engaged in dual roles) revealed that importing firms were the most optimistic in the current quarter. Expectations were reversed in the next quarter as exporters were the most optimistic, while importers were the least optimistic. Importers cited the increase in commodity and fuel prices in the world market as the major factor behind their less upbeat outlook. On the other hand, exporters responded positively to signs of a strengthening US dollar.

The economic outlook of all sectors is positive

All sectors posted positive indices, indicating that the number of firms with positive views about business conditions in the second quarter outnumbered those with negative views. However, the decline in business sentiment was evident across sectors.

The CIs of the construction (at 25.5 percent) and services (22.4 percent) sectors, which posted the highest indices, were lower quarter-on-quarter and year-on-year. The decline in the sentiment of construction firms may signal that demand is cooling in the property market. In the case of the services sector, the lower index quarter-on-quarter and year-on-year was noted across all sub-sectors, with the exception of renting and business activities (at 28.3 percent) which posted a 5.5 index point-increase quarter-on-quarter, on account of brisker business during the summer.

The industry and wholesale and retail trade sectors were less optimistic, with CIs of 9.1 percent and 5.4 percent, respectively. Respondents from these two sectors cited the continued rise in input costs, particularly fuel, and the imminent threat of wage hikes as factors that adversely affected their outlook.

All sectoral indices in the next quarter continued to be positive but slid down relative to their comparative levels last quarter and last year.

Respondents look forward to broadly favorable operations

Majority of the respondents looked forward to broadly favorable operations for Q2 2008 as the indices for all sectors—except for wholesale and retail trade sector—remained positive. The trade sector’s negative index at -1.6 percent may have been caused by concerns over a possible recession in the country’s major trading partner, the US and the sustained rising prices of goods and services which could curtail demand.

Average capacity utilization in Q2 2008 was at 79.5 percent. This level was lower compared to the levels in the previous quarter and year-ago.

Access to credit remains positive while financial condition index drops

The credit access index remained positive but declined to 3.0 percent from 6.6 percent a quarter-ago and 9.0 percent a year-ago. This was the lowest quarterly index since Q1 2007. The lower index indicated that respondents perceived access to available lending facilities to be tighter compared to the previous quarters.

The financial condition index, which is an indicator of the internal liquidity situation of firms, continued to decline to -17.8 percent from -11.6 percent last quarter and -11.0 percent a year-ago. The drop in the index could be partly attributed to expectations of less favorable financing conditions in Q2 and Q3 2008 compared to previous quarters which could adversely affect the cash position of respondents.

Employment expectations remain positive while expansion plans are down

The employment index at 11.4 percent (though lower than that in the last quarter and last year) indicated an anticipated continued hiring of additional employees in Q3 2008. The employment outlook continued to be favorable for the construction and services sectors (specifically hotels and restaurants, renting and business activities, transportation and financial intermediation sub-sectors), consistent with their more positive macroeconomic outlook in Q3 2008. Meanwhile, only 23.1 percent of the industry firms surveyed indicated plans to expand in Q3 2008, from 37.8 percent in the previous quarter.

Business constraints

Firms considered the high level of competition, both from domestic and foreign firms, and insufficient demand leading to low volume of sales as the key risks to business activity in Q2 2008.

Expectations on selected economic indicators

Respondent firms anticipated that the peso would remain strong in Q2 2008 but would weaken in Q3 2008. The inflation rate is expected to accelerate in Q2 2008 onto Q3 2008. Moreover, they expected interest rates to rise both in Q2 and Q3 2008.

Response rate

The Q2 2008 BES was conducted from 7 April to 6 May 2008. A total of 1,258 firms nationwide were surveyed. Respondents were drawn from the Securities and Exchange Commission 2006 Top 7,000 Corporations as follows: 514 companies in NCR and 744 firms in AONCR, covering all 17 regions nationwide. The overall survey response rate for this quarter was 71.4 percent compared to 68.4 percent last quarter. For NCR, the response rate was 73.7 percent (70.4 percent last quarter); and for AONCR, the response rate was 69.8 percent (from 66.9 percent). A breakdown of responses received by type of business showed that 13.7 percent were importers, 9.1 percent were exporters, and 15.8 percent were of dual roles (both importer and exporter). Sixty-one percent of respondents were neither importer nor exporter.


370,000 jobs await Pinoys in Singapore and Macau

By Roderick T. dela Cruz
The Manila Standard

As many as 370,000 tourism jobs are available in Singapore and Macau, and many of the hotels and resorts in these tourist destinations are looking for Filipino talents, according to a Singaporean executive.

“We need the skills and talents of the people of the Philippines,” said Edward Liu, managing director of Conference and Exhibition Management Services Pte. Ltd., at the sidelines of the Trabaho sa Turismo Manila 2008 fair at the SMX Convention Center in Pasay City.

“The Filipinos are the best.” Liu said. “Filipinos’ hospitality is known all over the world.”

Liu said Singapore alone would need 70,000 individuals to fill the jobs to be created by 10 to 20 hotels being built on the island state.

Two of these projects, a hotel in Sentosa Park and a facility of the Universal Studio in Singapore, will require 30,000 staff over the next two years.

In Macau, 30 hotels and casinos will be built in two to three years, which will generate 100,000 to 300,000 new jobs.

Among the positions that are needed in the two states are receptionists, chefs, waiters, events organizers and other tourism staff, he added.

Liu’s company has teamed up with the Tourism Department to look for Filipino talents in the next tourism jobs fair.

He said he would bring 100 companies, including hotels, resorts and casinos, from Singapore and Macau to hire Filipino staff next year.

Singapore, which has a population of 4.4 million, attracts more than 10 million foreign tourists a year.

Tourism Secretary Ace Durano said thousands of tourism jobs were also awaiting Filipinos in their own country. He said companies that participated in the jobs fair at SMX are hiring 15,000 individuals.

“What we are doing is to make sure that everybody is given job opportunities in tourism,” Durano said.

More than a dozen hotels began hiring additional staff yesterday, each one recruiting more than 10 personnel. These hotels include Makati Shangri-La, EDSA Shangri-La Hotel, Peninsula Manila, Ascott Hotel, Manila Pavilion, Pan Pacific Manila, Sofitel Philippine Plaza, Palm Plaza Hotel, Microtel Inn, Fuego Hotel, Legend Hotels, Traders Hotel, City Garden Hotel, Econotel, and Victoria Court.

Govt targets open skies in Clark by December

By Joyce Pangco Pañares
The Manila Standard

PANGLAO ISLAND, Bohol—The Philippines will sign an open-skies agreement with its fellow Asean members and designate the airport in Clark, Pampanga, as the port of entry, an official said yesterday.

Transport Secretary Leandro Mendoza said even China, Japan, India and South Korea planned to join the agreement, bringing the potential volume of travelers taking advantage of the deal to 500 million a year within the region.

“Unlimited flights between capital cities can begin by December 2008, and maybe by 2015 we can already be a single aviation market similar to what the European Union is doing,” Mendoza said.

“And given the interest being shown by our partners, it can easily be an Asean-plus-4 agreement.”

Mendoza said the agreement would be signed in Manila in December. It was one of the reasons President Arroyo had deferred signing Executive Order 500-B, which would have allowed non-designated airlines to enjoy air rights at the Diosdado Macapagal International Airport in Clark.

“We cannot have unilateral agreements, and it is also for our security that there is reciprocity in the designation of airlines. We have to protect our interests also,” he said.

EO 500-B is expected to rescind the original order imposing restrictions on budget airlines operating in Clark and Subic, and allowing in only airlines that had been designated by their countries of origin through bilateral air agreements with the Philippines.

Only the first four air freedoms will be enjoyed by the designated carriers of the Association of Southeast Asian Nations, which comprises the Philippines, Indonesia, Malaysia, Singapore, Thailand, Vietnam, Brunei, Cambodia, Laos and Myanmar.

Those freedoms are the right to over-fly a country without landing; the right to stop in a country for refueling or maintenance without transferring passengers or cargo; and the right to carry passengers and cargo from one country to another and vice versa.

Mendoza said it was inevitable that the Ninoy Aquino International Airport in Pasay City would give way to the Clark airport as the country’s premier airport. The Clark airport has two parallel runways that are 3.2 kilometers long, and those are expected to be lengthened to 4 km to accommodate wide-bodied aircraft.

“Naia only has one runway, and no matter how beautiful your terminal is, the capacity of its single runway is only 13 million flights per year,” he said.

“So we cannot expand the capacity in Naia, and we have no other choice but to transfer to Clark. There is no other alternative.”

By comparison, Asean members Thailand and Malaysia had terminals that could accommodate up to 45 million and 25 million flights, respectively, Mendoza said.

Filipinos flock to supersize malls

By Donald Greenlees
International Herald Tribune

MANILA: The two biggest shopping malls in the world are in China. But China does have a rival in the business of destination shopping - the notion that a shopping center should not be simply a place to purchase life's necessities, but should be big and spectacular, a source of daylong entertainment.

If you think it is the United States, the country where the shopping mall probably originated, think again.

On a promontory of reclaimed land jutting into Manila Bay is the sprawling Mall of Asia. It is a testament to the Filipino love of shopping. At 407,000 square meters, or 4.4 million square feet, it is the third biggest mall in the world, according to data compiled by Eastern Connecticut State University.

It doesn't stop there. The Philippines, one of the lowest-ranked countries in the world on the United Nations human development index, has 4 of the world's 11 biggest shopping malls.

All of them are owned by a company that was started 50 years ago by Henry Sy, a Chinese immigrant who founded a shoe shop. The company that began as Shoemart in a provincial town outside Manila is now the country's biggest mall operator, SM, and the Sy family has become the second wealthiest in the Philippines, according to Forbes magazine.

"Filipinos have a passion for shopping," said Teresita Sy, who with her four brothers and sister run a vast conglomerate that also has investments in banking, real estate and tourism. "We don't have a lot of purchasing power, but we love to shop."

On the back of the rapid growth of its shopping mall and department store business in the Philippines, SM has set its sights on a potentially richer prize. This year, the publicly listed SM Prime Holdings, which controls the retail assets, bought three malls in China that had been privately held by the Sy family. It is the first step in an ambitious plan to establish a nationwide network of SM malls in China.

"We would like to think we can grow 100 units in China - that is still the dream," said Teresita Sy, who is vice chairman of the family holding company, through which her family owns about 60 percent of the retail business.

But SM plans to move cautiously in the first phase of its expansion in China, opening one to three new malls a year. When SM got started in malls in the Philippines in the 1980s, it took the company 10 years to expand from 1 mall to 5 malls. It now has 30 malls spread across the country.

For now, SM is focused on tapping the growing disposable incomes of consumers in China's second-tier cities. In addition to the three malls already operating in Xiamen, Chengdu and Jinjiang, 83-year-old Henry Sy's birthplace, the company has one mall under construction and another under planning.

The markets SM is entering in China are in many ways not dissimilar to the customer base it has tapped in the Philippines.

With anchor tenants like Wal-Mart and its own SM-Laiya department store brand, the company is aiming at people in China who want to go to a mall for an experience but who demand value at the checkout line.

Andrew Ness, head of Asian research at the commercial real estate firm CBRE, said the markets SM is entering in China tend to be "middle class and not very prosperous." It is a "high risk, high return strategy," he said. But he added that the large malls SM builds in these areas help drive local economic activity.

"Their malls are so big they become a hub," he said. "They are creating their own opportunities."

The springboard enabling SM to take on the increasingly affluent Chinese shopper is the surprising strength of consumerism in the Philippines, where per capita gross domestic product for its 89 million people is about $1,700. Individually, Filipinos might not be big spenders, but they flock to the malls and purchase relatively cheap, low-margin goods in huge quantities.

On weekends at the Mall of Asia, which opened in 2006, crowds jostle in a vast expanse of retail arcades, cinemas, food halls and restaurants, as well as entertainment venues like an ice-skating rink, a bowling alley and a science expo. Up to a million people pass into the air-conditioned comfort of the mall on a Saturday or Sunday, escaping Manila's heat with their families.

It is a similar story a few kilometers away at SM City North Edsa, the world's sixth-biggest mall, and at two other malls in the Philippines, SM Megamall, ranked No. 7, and at SM City Cebu, No.11.

Domestic consumption has been the key driver of the Philippines' recent economic growth. Last year the economy expanded by 7.3 percent, the fastest rate in three decades.

The national spending spree has been fueled by transfers from overseas Filipino workers, which have risen from $6 billion in 2001 to $14.5 billion in 2007. The flood of money has been spent on everything from basic necessities to luxury items. Automobile sales jumped by 18.5 percent last year. Remittances have also contributed to a boom in residential housing construction.

The consumption-led growth has been a boon to retailing and services. Net profit for SM's retail business rose 10 percent last year to almost 6 billion pesos, or $140 million, on revenue that rose 16 percent to 15.3 billion pesos.

Alex Pomento, the head of research at Macquarie Securities in the Philippines, said an expected slowing of the economy this year and rising inflation are likely to cut into retail sales. But he said SM had weathered the frequent fluctuations of the country's economy in the past.

"The downside is always the macro economy rather than the company itself," he said. "They dominate most of the businesses they get into, which means they are highly dependent on where the economy goes."

The Philippines often ranks poorly in surveys of investor sentiment and ease of doing business. Its economy is ranked 92nd out of 157 in the Heritage Foundation's economic freedom index.

But while China might offer great growth potential, Teresita Sy argued that a low cost structure makes the Philippines more competitive for business than China.

"Compare a mall here and a mall abroad, the cost of doing business here is still cheaper," she said. "It will make you look at the Philippines again."

Still, the opportunities in China are enormous, Sy said.

SM's first China mall, which opened in Xiamen in 2001, was profitable within two to three years. It now has 100 percent occupancy.

The occupancy rate underscores one lesson SM has learned from the Philippines: When it comes to malls, bigger is better.

Sy said the company had just one regret about its showcase Mall of Asia.

"It is fully let," she said. "As a matter of fact, we should have made it bigger."

Wednesday, 21 May 2008

President goes diving in Balicasag

President Gloria Macapagal-Arroyo scuba-diving in the clear waters off Bohol’s Balicasag Island Dive Resort Tuesday (May 20), a famous worldclass diving resort in the island province once known only for its Chocolate Hills. (Malacanang Photo)

Call center hiring 7,000 agents

By Elaine Ruzul Ramos
The Manila Standard

US-BASED Convergys Corp. is hiring 7,000 call center agents over the next 12 to 18 months to support the expansion of its operations in the Philippines.

Andrea Ayers, president of customer management at Convergys, said yesterday the company would expand its Philippine operations by nearly 50 percent with the addition of five new integrated contact centers throughout the country.

‘‘We are constantly evaluating new locations and at this point, based on client demand, we find that the Philippines offers the most advantageous mix of available talent, infrastructure and government support,’’ Ayers said.

She said the expansion would increase the company’s capacity by 77 percent. This would also make the Philippines its second largest operation globally, second only to the United States in terms of number of employees.

After the expansion, Convergys will have a global workforce of 67,000, with about 20,000 in the Philippines.

The Philippines, she said, was the fastest growing operation, and this was where the company was putting up more capacity. It will have 14 contact centers in the country alone after the expansion.

Ayers said the country’s competitiveness lay in its people.

‘‘Filipinos have a high level of proficiency in the English language, strong technical skills and great customer service skills,’’ she said.

Three of the new sites will be in Metro Manila, the fourth in Sta. Rosa, Laguna, and the fifth in Cebu City. These new facilities would bring in 3,995 new seats.

The Cebu facility will have a capacity of 450 seats and will require over 650 employees. Located in the Asiatown IT Park, the facility is set for completion in August.

The UP Science Park call center will have 575 seats and over 850 employees. It will be completed in November.

The Nuvali facility in Sta. Rosa will have 660 seats and would generate over 950 new jobs. It will be completed by the end of the year.

The one in San Lazaro will have 460 seats and generate over 650 new jobs. Located within Manila’s university belt, it will be completed in April next year.

The Glorietta 5 facility in Makati is the largest among the new centers, with 1,850 seats and generating over 1,850 new jobs. It is also set for completion April next year.

Negotiations are under way on these five new facilities, and when those are finalized and completed, Convergys will have nine contact centers in Metro Manila, three in Cebu City, one in Bacolod City, and another in Laguna.

The new contact centers will provide both general support and advanced technical-help desk services to a variety of Convergys clients through traditional voice calling, e-mail and Web chat as well as back-office applications and document processing.

The company is now doing back-office operations, but is still predominantly voice with 95 percent of its workforce still doing voice services.

“We are in a recession-proof business. We present a viable option for companies in the US to lower their costs,” said Ayers, adding their clients generated 15 to 30 percent savings on costs.

Convergys operates 85 contact centers in locations including the US, Canada, the United Kingdom, India and the Philippines. Convergys agents handle 1.7 million inbound calls every day for clients in a wide variety of industries.

Govt allows malls, large users to bypass Meralco

By Joyce Pangco Pañares
The Manila Standard

PANGLAO ISLAND, Bohol—President Arroyo said here Tuesday power producers have agreed to bypass Manila Electric Co., the biggest power distributor, and sell directly to the big power users to lower their costs.

She made the statement even as Meralco agreed to open its books to the Government Service Insurance System, the pension fund with a 23-percent equity in the power distributor, and which has been pressing it to lower its power rates.

Mrs. Arroyo said independent power producers would initially offer 2,000 megawatts to the big users of electricity in Luzon and the Visayas under a special arrangement.

The big power users include exporters, semi-conductor producers, and commercial establishments using over 6 megawatts of power each month.

The President said the power producers would petition the Energy Regulatory Commission to allow them to sell power directly, a requirement pending the privatization of 70 percent of the assets of National Power Corp., the state-run power producer.

“This is very significant because the industry has voluntarily agreed even before Napocor sells 70 percent of its assets,” Mrs. Arroyo told her Cabinet at the Nature Resort and Spa here.

“This is really to boost the competitiveness of the country by bringing down the electricity rates in labor- and power-intensive industries,” she said.

The Philippine Independent Power Producers Association said at least 600 consumers in Luzon using at least one megawatt a month would benefit from the new arrangement.

“These are mostly from the semi-conductor and export industries as well as commercial establishments such as Shoemart and Ayala malls, which consume 6 megawatts per month,” group president Ernesto Patangco said.

“This will really level the playing field and ensure that there is no dominant player that can exercise undue advantage.”

Patangco said the Lopez family-owned Meralco had expressed no objection to the plan.

ASEAN to sign common air ties with China, India, Japan & Korea

PANGLAO, Bohol – Member-countries of the Association of South East Asian Nations (ASEAN) is expected to sign a multilateral air agreement among themselves together with China, India, Japan and Korea in December this year, Department of Transportation and Communications (DOTC) Secretary Leandro Mendoza said.

Mendoza, together with Manila International Airport Authority (MIAA) General Manager Alfonso Cusi, was interviewed Monday night by Malacanang-based reporters at the Bohol Beach Club on the eve of the
arrival to the province of President Gloria Macapagal-Arroyo to groundbreak the proposed Panglao International Airport and preside over the Cabinet meeting here.

Mendoza said the Philippines and other ASEAN countries have agreed in principle to liberalize their skies with the possible signing of a "common air agreement" in December this year. Mendoza said ASEAN countries have also discussed with China, India, Japan and Korea the possibility of their joining in the regional air services grouping.

Cusi said ASEAN's adoption of an open skies policy would ultimately lead to the creation of a single aviation market in the region by 2015, wherein the Philippines needs to further develop its air transport policy as well as upgrade existing facilities.

Mendoza and Cusi said that member-countries that include Malaysia and Thailand have already been developing airports with multiple runways to accommodate bigger traffic while the Philippines still has to develop one.

The two said one of the best options is to develop Clark International Airport as the country's international gateway considering it has a bigger land area to accommodate the construction of additional runways.

The liberalized air services grouping is expected to strengthen linkages within the regional air cargo industry, improve ASEAN economies, and boost the integration of ASEAN as a single and caring community
by 2015 which was strongly pushed by the President during the Philippines' ASEAN chairmanship in Cebu.

P4.17 billion Panglao-Bohol international airport project starts

PANGLAO ISLAND, Bohol - President Gloria Macapagal-Arroyo launched today the construction of the P4.17-billion Panglao-Bohol International Airport here to boost the tourism and trade potentials of this
world-class destination province.

The President led the capsule-laying ceremony in Barangay Tawala here this morning assisted by Department of Transportation and Communications (DOTC) Secretary Leandro Mendoza, Manila International Airport Authority (MIAA) General Manager Alfonso Cusi, Bohol Gov. Erico Aumentado, and Panglao Mayor Benedicto Alcala.

After the capsule-laying, the President was briefed by Cusi on the status of the project funded through MIAA's P3-billion income and P1 billion from the DOTC.

Cusi informed the President that the international airport is targeted to be operational in the first quarter of 2010 and can accommodate one million passengers per year.

The President said no foreign loans were sourced in the construction of the Panglao International Airport as government revenue agencies have consistently exceeded their targets these past few years.

Upon completion of the project, the President said foreign tourists can now come directly and visit the famous destinations in Bohol that include the Chocolate Hills, a candidate in the Internet search for the New Seven Wonders of Nature, and Balicasag Island, a popular breathtaking dive site which she herself would have a look at today.

The President said Bohol, the tenth largest island of the Philippines, is one of the tourism centers of the country. Located in the heart of the Visayas, it is famous for the tarsier, the world's smallest primate; pristine beaches and dive spots, caves and crystal springs, ancestral homes, and centuries-old churches.

In an earlier interview, Cusi and Mendoza said the Panglao International Airport would not only cater to tourists and cargo but is expected to boost trade, investments and economic activity in Bohol as it would be a magnet for industrial parks and economic zones.

PGMA's aeronautical highway about to soar

PANGLAO ISLAND, BOHOL—From ''highways on the sea'' now comes the ''no frills airports'' by next year.

After the successful completion last April of the Strong Republic Nautical Highway (SRNH), with the launching of the Central Nautical Highway, one of the three major seaboard routes, the Arroyo administration is now focused on the development of an aeronautical highway.

Transportation Secretary Leandro Mendoza revealed last night the ambitious plan of government to develop and /or upgrade the country's ''potential tourism airports'' to further spur economic development in the countryside.

''We have many tourist destinations and access is a problem,'' Mendoza said adding that the Philippines is ''such a beautiful country.''

Mendoza said they are still in the process of indentifying which of the country's 87 airports would be part of the aeronautical highway.

He said of the country's airports, only 27 percent are fully utilized even as he underscored the many development potentials an airport can offer to the host community.

''The potential is not just on tourism but there are bigger opportunities. Trade opportunities would be enormous,'' he said citing Singapore and Dubai.

Mendoza surmised that some of the airports that would be part of this aeronautical highway are now being upgraded and/or on-going construction.

He said some of the airports included the Guiuan in Northern Samar, San Vicente and Busuanga in North Palawan, Butuan, Siargao, Zamboanga, Lagundingan in Cagayan de Oro and San Fernando in La Union, among others.

RP tourism generates $1B in first quarter 2008 – D.O.T.

The Arroyo administration’s efforts at promoting the Philippines as a tourism destination is paying off with tourists spending a total of some $1 billion in the country during the first quarter of 2008 alone.

This was revealed by the Department of Tourism (DOT) which enthused that “these positive results have laid down the groundwork for another promising year for the industry.”

“These developments further benefit a greater part of the nation as more quality jobs are generated and more wealth enters our country,” added the DOT headed by Ace Durano who has since taken over the helm of the Philippine Tourism Authority (PTA) in a concurrent capacity.

The DOT, which sourced its data from arrival and departure cards and shipping manifests, counted 858,244 “arrivals” from January to March 2008, and which first-quarter group of tourists spent a total of US$ 1.022 billion.

“Tourist spending amounted to US$ 1.02 billion, with Korea accounting for the biggest bulk. The Scandinavian region, as well as Germany, Russia, Canada and Hong Kong, registered double-digit gains as shown by their increasing expenditure and length of stay over the previous years,” the DOT further revealed in its latest newsletter.

Koreans topped the arrivals in terms of number during the first quarter, with 175,147 Koreans visiting the country, and accounting for 20.4 percent of the total tourist arrivals.

The next biggest group came from the United States, with the 166,128 tourists making up 19.4 percent; followed by tourists from Japan at 99,453 (11.6 percent).

Fourth to sixth were mainland China with 48,619 (5.7 percent); followed by Taiwan with 31,441 (3.7 percent); and Hong Kong, 31,344 (3.7 percent). If lumped together, the Chinese group totals 111,404 (13.1 percent), more than the Japanese tourists.

Australians (30,936 or 3.6 percent), Canadians (29,525 or 3.4 percent) and UK nationals (23,863 or 2.8 percent) comprised the next biggest bulk of tourists, with their arrivals totaling 84,324 (9.8 percent).

In tenth place were the Singaporean tourists at 23,761 (2.8 percent).

To further increase the “tourist spend,” the DOT will be launching a Shopping Festival in September, and a Second Home Destination Program in October.

Tuesday, 20 May 2008

Coming: Free cell phone service

By Roderick T. dela Cruz
The Manila Standard

THE country’s latest mobile phone operator yesterday launched umobile, the first advertising-funded mobile service in Asia that will offer free minutes to the youth market in June.

Connectivity Unlimited Resource Enterprises or CURE, a third generation license holder recently bought by Smart Communications Inc., will roll out its umobile service nationwide in June with P100 worth of free monthly load to be given to every subscriber, who will also receive a 50-centavo load for every ad sent to his or her umobile phone.

“Our subscribers can avail of mobile services such as call and text for free,” said Ardie Balderrama, chief marketing officer of umobile. “Our subscribers will get rewards by simply receiving mobile ads.”

The service, to be offered independent of the one provided by Smart, will be the first of its kind in Asia, and the second in the world, after Blyk in the United Kingdom. It will initially be on a prepaid subscription model.

“We are very bullish that the market will react positively,” Balderrama said, referring to companies that are targeted to be umobile’s advertisers. Mobile advertising and marketing grossed $3 billion globally in 2007, and that is expected to grow to $19 billion by 2011.

Balderrama admitted that mobile advertising was still considered intrusive in the Philippines.

But he said umobile service would not be available to everyone, and would focus on a niche market of men and women aged 15 to 35, who comprise about 45 percent of the population in the Philippines.

“We are focusing on them because we want to offer corporations a very targeted and profiled audience that they can talk to and interact with through mobile marketing campaigns,” he said.

Balderrama said umobile would largely be by invitation only, and around 10,000 subscribers would be accepted each month. Qualified subscribers must register online before they could be given a umobile SIM through courier.

Subscribers must share their personal information as well as their lifestyle and buying habits. Balderrama said these data would enable umobile to develop a mobile campaign designed for the target market.

He said that while umobile would run a 3G network, subscribers on a 2G and 2.5G network could still make use of basic mobile telephony services such as voice calls, as well as sending and receiving text and pictures.

Its 3G services include mobile broadband access to the Internet, use of mobile voice over Internet protocol or VOIP through a partnership with Frind, and live chat with Skype, MSN, Messenger, Google Talk, ICQ, SIP, Twitter, Yahoo and AIM.

Subscribers may also change their umobile phone number anytime they wanted, just by editing their profile at the network’s Web site.

Balderrama said the rates of umobile would be competitive at only 50 centavos per SMS sent from one umobile phone to another umobile number. Interconnection rates have yet to be determined. But the service is only interconnected to Smart and Piltel, and agreements have yet to be signed with Globe Telecom and Sun Cellular.

Smart recently acquired CURe from the Ongpin Group. CURE is one of the four licensees awarded by the National Telecommunications Commission with a third generation (3G) frequency in December 2006.

It was awarded an allocation of 10 megahertz in the 2100 Mhz band and expects to launch its commercial service in May this year. The other 3G operators are Smart and Globe Telecom. Sun Cellular has yet to offer its 3G service commercially.

CURE signed a facility sharing agreement with Smart to provide a nationwide coverage.

New budget terminal to rise beside domestic

Vito Barcelo
The Manila Standard

THE government is building a no-frills terminal beside the domestic terminal in Parañaque City to accommodate the growing number of passengers taking domestic flights, an official said yesterday.

“The budget terminal will be different from the traditional full-service terminal because it will have no VIP lounge or restaurants,” said Alfonso Cusi, general manager of the Manila International Airport Authority.

“It will be a convenient, fast and hassle-free terminal for domestic passengers. All the passengers have to do is check in and board their airline.”

Cusi said work on the P200-million terminal would start next month, and that it would open to the public in March 2009.

It will rise up on the former site of the Philippine Air Transport and Training Services aeronautics school, which was demolished a year ago and moved to another location.

The terminal will have the usual airline and Customs counters, but it will have no passengers’ lounge or air bridges like those found at the Ninoy Aquino International Airport.

It will have a single-story building sitting on a 21,000-square-meter lot, and it will be able to handle 2.7 million passengers a year.

The terminal will have 10 departure gates, 18 check-in counters, and three arrival baggage belts. It will have an open car park that can accommodate up to 300 vehicles.

Monday, 19 May 2008

PGMA checks on one of the world's best dive sites Tuesday

PANGLAO ISLAND,BOHOL--President Gloria Macapagal-Arroyo, a diving enthusiast herself, would check on one of the best dive sites in the world that is right here in Bohol province--the Balicasag Island.

Photo source:

The President, who would plane in here tomorrow morning to led the groundbreaking ceremonies for the P4.17 billion, 2.5 kilometer Panglao International Airport and convene the National Economic and Development Authority-Cabinet Group at mid-day at the Garden Square of the Panglao Nature Resort and Spa, the President would visit Balicasag Island later in the afternoon.

''She will see for herself what the island can offer to both local and international tourists,'' the Presidential Management Staff said.

Photo source:

Balicasag Island has a total land area of 25 hectares and is 30 minutes away by boat from the island municipality of Panglao.

One -and-a-half hectares of Balicasag Island has been developed into a resort complex by the Philippine Tourism Authority, specifically the Balicasag Dive Resort.

The 'special interest resort''' has been operational since Oct.1989.
The island boasts of several dive spots where three are of points of interest----the marine sanctuary, the turtle point and the diver's haven.

Hanjin: West Misor LGUs very supportive of Laguindingan airport project

By Mike Baños

Officials of a Korean company now undertaking the construction of the PhP 7.853 billion Laguindingan airport in Misamis Oriental were all praises for the conduct of the local government units (LGUs) they have been dealing with so far.

"Everybody fully supported our project, especially the LGUs, especially Mayor Oliver L. Ubaub and the municipal administrator," said Kyeong-Yoo Seong, project manager of the Hanjin Heavy Industries and Construction Inc. (HHIC) during the monthly media conference held Thursday at a local restaurant by the task force monitoring the progress of the airport construction.

"Some problems remain to be solved, but we are very satisfied," the Korean executive said. "Our first priority is to finish the airport construction by March 17, 2012, and for that we need the LGUs support. But as of now, I'm very satisfied, everybody fully supports the project."

Jae Man Lee, project manager of Yooshin Engineering Corporation/Schema Konsult Inc., which did the detailed engineering and design for the Laguindingan Airport Development Project (LADP), expressed similar sentiments.

The regular media briefing was led by Misamis Oriental Gov. Oscar Moreno and Engr. Della Capicenio, LADP project manager. Present were members of the Task Force LADP from the various government units and agencies involved in the airport's construction.

Besides the Municipal Government of Laguindingan, the project also directly involves the Provincial Government of Misamis Oriental as the host LGU of the airport project.

Earlier this week, Cagayan de Oro City Mayor offered the Bulua Westbound Integrated Bus Terminal and Public Market free of charge to Hanjin, which has indefinitely suspended work on its US$2-Billion shipyard project in the Phividec Industrial Estate-Misamis Oriental after accusations of alleged bribery and graft arose between company and local government officials. The project expected to generate 30,000 jobs and have an annual capacity of 830,000 metric tons per year once completed.

Hanjin officials said the "indefinite suspension" of the shipyard project was due to the negative publicity on the company and interference of local officials.

For his part, Gov. Moreno thanked the various government agencies involved in the airport task force for their "vigorous and sustained teamwork since the beginning of the airport project in January 2006." He admitted people had become skeptical about the airport project, but despite inevitable conflicts on the long journey to its completion, "the national direction prevails" on all issues regarding the airport project.

Capicenio said the first test flight to Laguindingan could be made as early as April 2010 with the committed completion of the runway and apron. "However, it will only be a test flight using visual flight rules (VFR) since navigational aids for instrument landings will be installed later after the completion of all facilities."

Roque Egama, representative of Ayala Corporation, said the planned Light Industrial Park in the firm's adjacent 600-hectare property in Alubijid municipality would also depend on the completion and operation of the Laguindingan airport.

The HHIC camp site in Laguindingan, Misamis Oriental (photo courtesy of LADP management office)

Sunday, 18 May 2008

Leisure firm to develop Cagayan int'l airport

By Judith Balea

In a bid to boost tourism in northwest of Luzon, publicly listed Leisure and Resorts World Corp. (LRWC) has tied up with the Cagayan Economic Zone Authority for the development of a P4 billion international airport in Sta. Ana in Cagayan province.

LRWC president Alfredo Benitez told reporters that the company would participate in the project through the donation of a 79-hectare property and some cash infusion.

He said of the total land area, 40 hectares would be devoted to the airport itself while the rest would be for other aviation-related facilities such as hangars. The project is slated for completion in a year and a half, beginning this year. The first phase will consist of a 1.7-kilometer runway.

"The company has been positioned to tap the overseas markets. Slowly, we'll bring them into the Philippines, creating more employment and generating more revenues for the government," said Benitez.

LRWC, through subsidiary First Cagayan Leisure and Resorts Corp., operates an online casino hub inside the Cagayan ecozone, with players coming from Macau via chartered flights arranged by the company.

It began carrying players on an 80-seater jet plane in late 2007, during Thursdays and Saturdays.

LRWC is set to add flights every Tuesday and Friday from Xiamen, China, subject to the approval of the Chinese government.

Benitez said company revenues are projected to jump threefold when operation of the Cagayan airport starts.

He said the company's business in Cagayan province accounts for about 12 percent of total revenues and 40 percent of net income.

In the first quarter, LRWC, which is also engaged in the hotel business, posted a 5-percent drop in net profit to P39.3 million from P41.4 million due to a higher interest expense.