Saturday, 15 November 2008
See also http://www.themalaysianinsider.com/index.php/business/12394-philippines-to-avoid-recession-says-bank
THE ASIAN DEVELOPMENT Bank does not see the Philippines plunging into a recession next year as some businessmen fear, but believes that an economic slowdown has become the most pressing issue that policymakers have to deal with.
Neeraj Jain, ADB country director for the Philippines, said the Philippine government's decision to abandon the goal of balancing the budget by 2010 was a welcome move given the need for pump-priming measures. Higher public spending is indeed necessary to cushion the impact of a deteriorating global economy, he said.
"It is difficult to make a precise projection [as to how much the Philippines will grow next year] but based on the current situation, we [ADB] don't think the Philippines will be in a recession," Jain said in a briefing Thursday.
Technically, recession is two consecutive quarters of year-on-year drop in economic output.
While the ADB considers projections of a recession exaggerated, Jain agreed with forecasts made by some economists from the government and the private sector that the Philippines would definitely suffer from a growth slowdown next year.
He said the problem of easing growth has taken over accelerating inflation as the biggest cause for concern. As prices of fuel drop and as increases in prices of food products ease, Jain said inflation should no longer be much of a concern for economic managers as it had been the past months.
What was more worrisome, he said, was that the financial turmoil in advanced economies would likely affect the Philippines in terms of a pullout of investments. This, in turn, could result in higher unemployment and sluggish domestic demand.
"What you spend today is also based on what you will earn tomorrow. If you think you may not have a job tomorrow, then that will affect your consumption today," Jain said.
Jain said the government needed to boost spending on social services and infrastructure to ease the ill-effects of weakening consumption. He said pump-priming was a wise move during a crisis, even if this meant pushing back the goal of balancing the budget beyond 2010.
The Manila Bulletin
The Philippines expects unmilled rice output to rise 6.4 percent to 3.99 million tons in the first quarter of 2009, with more area planted to the crop and better yield, government data showed on Friday.
Replanting of flood-damaged areas, rehabilitation of some irrigation facilities and increased yield will help boost rice production in the January to March quarter, the Bureau of Agricultural Statistics said on its website (www.bas.gov.ph).
Total output for 2008 was expected to reach 16.89 million tons, up 4 percent from last year’s 16.24 million tons but below the government’s target of 17.3 million tons as high fertilizer costs hit yield.
Corn output is forecast to rise 3 percent to 2.05 million tons in the first quarter, with favorable weather conditions and increased planting area offsetting an expected drop in yield due to lesser use of costly fertilizer, the statistics agency said.
Total corn production for 2008 is projected to reach 6.95 million tons, 3.1 percent higher than in 2007 but below the government’s goal of 7.4 million tons due to more expensive farm inputs.
The Philippines accounts for just 1 percent of world corn output but high fertilizer costs and poor prices at home have prompted farmers to plant less. (Reuters)
Friday, 14 November 2008
BY PAOLO LUIS G. MONTECILLO, Reporter
THE NEXT ROUND of talks among transport ministers in Southeast Asia will focus on the inclusion of all international airports in the region’s push for an open skies regime, which will involve full liberalization of the aviation industry.
The 10 members of the Association of Southeast Asian Nations (ASEAN) last week approved several deals that lifted restrictions on air passenger and cargo transport between the capital cities of each country in the region.
In the Philippines, only Manila’s airport system, composed of Terminals 1, 2 and 3 of the Ninoy Aquino International Airport (NAIA), are covered by the deal.
The new points in the country which will be included in the new proposal are Clark Freeport Pampanga, Cebu, Davao, Gen. Santos City, and Laoag, Civil Aeronautics Board Deputy Executive Director Porvenir P. Porciuncula said in an interview last Wednesday.
"The next [round of] negotiations next year will include all international airports in the ASEAN," Mr. Porciuncula said.
He said that, during the last round of talks, aviation officials from Singapore tried to push for "Protocol 7," which proposed to include all international airports in the region under the open skies agreement.
However, this was shot down by other ministers, saying that the group would focus first on opening up the capital cities.
"Singapore’s proposal will be taken up at the next meeting," Mr. Porciuncula said.
The next ASEAN transport ministers meeting will be held before the end of the first half next year.
"That will be good for us," Clark International Airport Corp. Chief Executive Officer Victor Jose I. Luciano said in a separate phone interview yesterday.
"[However], even without the new deal, Clark will still be ok," he said in Filipino.
He said Diosdado Macapagal International Airport in the former United States airbase already has enough flight entitlements at the moment.
The government plans to build a new P6.5-billion terminal in Clark, which will be designed to handle seven million passengers a year. This will complement Clark’s existing terminal, capable of two million passengers a year. The new terminal is targeted to open by the first half of 2010.
"What’s happening now is that the government has been very aggressive in getting flight entitlements for Clark," said Mr. Luciano.
Negotiating for more flights to Clark is part of the government’s efforts to promote the area as the next premier international gateway to the Philippines.
Early this month, Clark airport received a total of 9,000 weekly seat entitlements to Malaysia — more than any other terminal in the country, including the Manila airports.
"As long as [the deals] are not unilateral, as long as those are fair, we can support it," Cebu Pacific Vice-President for Marketing Candice A. Iyog said in a phone interview.
She said the Gokongwei-owned carrier would be taking delivery of six 115-seater Airbus 319 aircraft by next year, which will be used for regional international flights.
"That drives our expansion for next year," she said.
At the same time, Mr. Porciuncula said he does not expect airlines in the region to immediately take advantage of the new deal once it is approved.
"Unfortunately, the industry is besieged by the current economic crisis," he said.
"[But] if the framework is there, the airlines have the flexibility to use them once traffic picks up," he added.
The International Air Transport Authority (IATA) late last month reported that passenger traffic for Asia Pacific carriers dropped 6.8% in the month of September from the same period last year. This was the biggest drop among all the regions in the world and higher than the average 2.9% drop in worldwide passenger traffic for the same period.
Jaime J. Bautista, president of flag carrier Philippine Airlines — the country’s only IATA member — was unavailable for comment.
Written by Jun Vallecera / Reporter
The Business Mirror
MANILA earned the praise of World Bank for its handling of the monetary sector that helped blunt the impact of escalating commodity prices on the lives of ordinary Filipinos and ensure continued economic growth even at a slower pace.
World Bank chief economist and senior vice president Justin Yifu Lin also said in a teleconference on Wednesday that Manila is in talks with the World Bank “for the provision of external finance to strengthen its social safety net so that the poor are protected to whatever extent possible against the expected slowdown in growth.”
Lin, however, criticized the fiscal sector because it has not been as proactive as the central bank.
“The issue going forward is how the government responds to the impact of the crisis on the real sector,” Lin said.
“The issue is to improve tax collection, improve the revenue collection which will then support fiscal policy toward expenditures in infrastructure and so forth,” he added.
“In other words the government will be tapping into savings in the economy and using those savings for infrastructure and providing safety nets for the poor,” Lin said.
The Bureau of Internal Revenue (BIR) missed its collection target by as much as P18.9 billion in the first nine months of the year.
The then-BIR chief Lilian Hefti left the bureau last September. She was replaced by Sixto Esquivias who took the helm of the bureau this month.
Finance Secretary Margarito Teves earlier said public spending has lagged in the first nine months as actual spending was only P692.7 billion or P6 billion short of the goal.
Spending for infrastructure buildup so far in the year was helped by sales proceeds of government assets that amounted to P10 billion. The amount compares with the full-year sales program of P30 billion.
Officials said proceeds from asset sales next year will not likely top P10 billion as projected revenue budget for 2009.
Lin praised the Bangko Sentral ng Pilipinas for it activated a series of measures that freed domestic and foreign- currency resources vital to markets in times of tightening credit.
“The Philippines has done a significant number of measures to ensure there is liquidity in the system. Even as there was a shortage of dollar liquidity, there had been an adequate amount of domestic liquidity that had been provided,” Lin said of the country’s response to the ongoing global financial crisis.
The BSP has opened its dollar-repurchase window for banks and financial institutions to have access to foreign currency as the market perceived that the supply of US dollars was inadequate to meet the demand.
The repurchase window demolished that perception, according to BSP Governor Amando Tetangco Jr.
Central bank also reduced banks’ deposit-reserve requirement by 2 percentage points to 19 percent. The move also freed P60 billion worth of liquidity that would otherwise end up in BSP’s vault.
The BSP also doubled its rediscounting budget to P40 billion that translated into P40 billion of resources banks could dip into in exchange for their receivables. The money could also be used to turn around and generate more loans and investment activities.
The Manila Standard
BUSINESS outsourcing may not be the most glamorous industry in the world, but it is one of the few bright lights amid the doom and gloom of the global financial crisis.
The two countries that have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil, but the industry is confident it will ride out the storm.
In the Philippines the business process outsourcing industry expects growth this year of between 35 percent and 40 percent on revenues of around $7 billion.
“We are part of the solution, not part of the problem,” Oscar Sanez, the chief executive of the Business Processing Association of the Philippines, said in a recent interview.
The sector expects annual growth of around 40 percent with revenues hitting $12 billion by 2010 and employing one million people compared with 300,000 this year.
In India, where the industry generates some $40 billion in annual export revenues, the story is much the same, although it admits that it could expect some initial pain.
The sector traditionally views bad times as offering opportunities as Western companies cut costs by moving work to cheaper destinations offshore.
India leads the world when it comes to outsourcing with more than half the global business, while the Philippines is a distant second with around 10 percent.
Both countries place a great deal of importance on the sector as its growth creates jobs and much-needed revenue.
Rick Santos, the Philippine country chairman for global property services company CB Richard Ellis, told Agence France-Presse that the crisis would “actually drive more BPO business to the Philippines.”
“You will see many more companies having to go offshore just to survive,” he said.
He said he expected about 502,000 square meters of Philippine office space to be leased this year, up 52 percent from 2007.
India and the Philippines are the preferred destinations for European and American banks, and IT companies for outsourcing their back room and call center operations due to the highly educated work force and English-speaking skills in both countries.
Sanez said that despite the financial turmoil he was confident the BPO industry in the Philippines would continue to see growth.
“Judging from the investor meetings we’ve been having recently, our clients will want to ramp up their outsourcing activities in order to accelerate cost savings,” he said.
“The Philippines is in a very strategic position due to its strong and successful experience with BPO, particularly with large American and British multinationals giving it a high level of credibility and trust especially in critical times.”
He conceded that in the short term, there could be a “bit of distraction” due to management and ownership realignments in the banking sector.
“But this should not affect outsourcing operations as these are critical functions, especially those that connect with customers,” he said.
Some 85 percent of the BPO business in the Philippines is in banking and comes mainly from the United States.
In India the BPO industry expects there will be a short- to medium-term impact on the sector as much of its business is IT-related.
Some of the pain from the bankruptcy of Wall Street giant Lehman Brothers, the sale of Merrill Lynch and the US government’s bailout of insurance giant AIG—all ravaged by credit woes—is already being felt, industry sources say.
But it’s still very much a mixed picture in India where companies are at best “cautious” on the outlook for the sector and not peering too far into the future because they say that all the dominoes have yet to fall. AFP
Thursday, 13 November 2008
By JUN RAMIREZ
The Manila Bulletin
The Bureau of Internal Revenue (BIR) is in need of 2,000 certified public accountants and 200 lawyers to help boost its chances of hitting its P915-billion collection target next year.
BIR Commissioner Sixto Esqui-vias IV said yesterday the new recruits will be assigned to the bureau’s legal divisions and district offices nationwide to handle the investigation and prosecution of tax evasion cases.
Insiders said that through the years the agency has been meeting serious difficulties in its anti-tax evasion campaign due to lack of personnel.
Records showed that there are only 96 lawyers assigned at its legal service in the national office but only 44 are doing actual legal work. This number is considered inadequate to handle increasing number of tax cheating cases.
"With these additional personnel we will be able to strengthen our run-after-tax-evaders campaign," Esquivias said.
He also said that he will ask higher authorities to remove revenue personnel from the salary standardization umbrella to make their wages competitive with their counterparts in the private sector.
Insiders said many lawyers and accountants were not keen in accepting jobs at the BIR because of low pay.
The highest BIR item for lawyers with salary grade 25 gets a yearly pay of only P314,000, a meager sum for lawyers doing private practice.
Esquivias vowed to work hard for the salary upgrade of tax collectors to insulate them from dishonest taxpayers who were quick in offering bribes to cut down on their tax payments, a perennial problem that has been causing the government to lose billions of pesos annually.
By MELODY M. AGUIBA
The Manila Bulletin
The agriculture sector grew by a modest 4.19 percent in the third quarter and may slow down toward year-end, hounded by the spiraling fertilizer price that’s prompting a cutback on farmers’ planting.
Department of Agriculture (DA) Secretary Arthur C. Yap said the growth from January to September this year must already be satisfactory considering the non-normal domestic and international economic environment.
This is as fertilizer price hit a prohibitively high P1,800 to P2,000 per bag and has been causing at least around 50 percent reduction in fertilizer application in the field.
With such restriction from the high cost of input, fourth quarter growth may drag off.
This can slow growth rate by the end of the year toward a lower range of 3.8 percent to 4.5 percent, down from the 4.68 percent growth recorded as of the full year-2007.
"It (fourth quarter) will not be as robust as last year," said Yap.
Rice production is projected to fall below target to 16.89 million metric tons (MT), missing the 17.3 million MT target set since last year. Nevertheless, this is still higher than the 16.2 million MT production in 2007.
Despite the expected lower rice output, Yap said that government has to closely evaluate the need for rice importation.
Wednesday, 12 November 2008
MANILA, Philippines - The Philippines retained its ranking as the best country in Asia where women are given equal opportunity along with their male counterparts, a Geneva-based group said.
In its 2008 Gender Gap Index, the World Economic Forum said the Philippines placed 6th in 130 countries included in the poll.
The Philippine ranking was the same that it had in 2007 and in 2006.
Dominating the list were European countries with Norway as the country which got the best rating in gender equality, followed by Finland, Sweden and Iceland, respectively.
New Zealand came in 5th, Denmark, 7th, Ireland, 8th, Netherlands, 9th and Latvia, 10th.
The Global Gender Gap Report 2008 is based on the innovative new methodology introduced in 2006 and includes detailed profiles that provide insight into the economic, legal and social aspects of the gender gap in each country. The Report measures the size of the gender gap in four critical areas of inequality between men and women such as economic participation and opportunity; educational attainment; political empowerment; and health and survival.
The WEF said the Report provides an insight into the gaps between women and men in over 92 percent of the world's population.
Of the Gender Gap Subindices, the Philippines was given a score of 8 in Economic Participation and Opportunity; 1 in Educational Attainment; 1 in Health and Survival; and 22 in Political Empowerment.
“The Philippines is one of two countries in Asia to have closed the gender gap on both education and health and is one of only eleven in the world to have done so.
However, the Philippines’ score relative to its performance in 2007 fell due to a drop in the perceived wage equality between women and men employed in similar positions and a decrease in the percentage of women ministers," the WEF said.
With the present economic gloom, the group said giving women equal opportunity will help in addressing the crisis.
“Greater representation of women in senior leadership positions within governments and financial institutions is vital not only to find solutions to the current economic turmoil, but to stave off such crises in future. At the World Economic Forum, we put strong emphasis on addressing this challenge with a multistakeholder approach through our global and regional Gender Parity Groups," said Klaus Schwab, founder and executive chairman of the WEF. - GMANews.TV
WEDNESDAY, NOVEMBER 12, 2008 | FINANCE
Elated over the news that the House of Representatives approved on third and final reading last night the proposed P1.415-trillion 2009 national budget, Executive Secretary Eduardo Ermita urged today the Senate to keep its promise to pass the proposed capital outlay before Christmas.
“Senate President Villar said the Senate will pass the budget before Christmas which shows that our political leaders are conscious of the need to pass it because that will help us in pushing programs and projects that would safeguard us from the looming recession,” Ermita said
Malacañang has said that next year’s outlay was “shaped by food and fuel prices, as it erects ramparts to protect the people while at the same time building up their capabilities for growth and prosperity.”
In the 2009 proposed national budget, the Department of Agriculture’s (DA) agriculture and fisheries modernization program will get more than P14 billion, from P25.4 billion this year to P39.7 billion in 2007.
The Department of Public Works and Highways (DPWH) will get a 17.2 percent increase, from P102.4 billion to P120 billion; while the Department of Education’s (DepEd) budget will go up by P20 billion to P168 billion.
The other agencies with huge allocations include the Department of Interior and Local Government (DILG), P61.9 billion; Department of National Defense (DND), P61.5 billion; Department of Transportation and Communications (DOTC), P23.6 billion; Department of Agrarian Reform (DAR), P16.1 billion; Department of Finance (DOF), P13.8 billion; and the judiciary, P12.8 billion.
The 2009 proposed budget is about 15 percent higher than the 2008 budget of P1.227-trillion.
The President has said that the proposed budget would address the world food and fuel crises and give appropriate funding to the government's priority programs -- environment, education and economy.
WEDNESDAY, NOVEMBER 12, 2008 | NATIONAL DEFENSE
The Philippine government is doing its best to hasten the release of 89 Filipino seamen who were abducted by Somali pirates in the Gulf of Aden this year, Executive Secretary and Presidential Spokesman Eduardo Ermita said today.
In his weekly media briefing this afternoon in Malacanang, Ermita said the latest victims were 23 Filipino crew members of the chemical tanker, Stolt Strength, which was hijacked by Somali pirates in the Gulf of Aden last Monday.
Since January, 161 Filipino seafarers have been taken hostage by Somali pirates.
Ermita said negotiations for the release of hostages are usually undertaken by the companies or shipowners who hired the Filipino seamen.
But he said that the Department of Foreign Affairs (DFA) is closely coordinating with the shipowners through the Philippine embassy in Nigeria for the freedom of the Filipino hostages.
The embassy in Nigeria in the Philippines’ diplomatic outpost nearest to Somalia.
“We are hopeful that with the successful negotiation to be undertaken by the shipowners, we will be able to secure the release of the 89 Filipino seamen still under custody” of the Somali pirates, Ermita said.
Piracy, particularly in the Gulf of Aden, has continued unabated since Somalia plunged into political chaos and civil unrest 1991.
Tuesday, 11 November 2008
By Lynda B. Valencia
MANILA, Nov. 11 – Zest Airways, Inc. formerly Asian Spirit Airlines, recently acquired seven brand new aircrafts from Canada.
Alfredo Yao, chairman of the Yao Group of Companies, said “Of the seven, five MA 60 with 60 seats have already been delivered and the remaining two are Airbus planes which seat 160 that should be delivered this month.”
Yao said this adds up to a total of 11 aircraft that is serving mostly tourists destinations.
An additional five aircraft are expected to be delivered in 2008 to complete its re-fleeting program.
Yao earlier bought Asian Spirit from the Toralba family through AMY Holdings, Inc. for Php1 billion.
Zest Airways is on the verge of a re-fleeting program and will be finished by 2009.
The program aims to capture a 10-percent market share of the destinations where they fly and include the expanded routes of Mindanao, particularly Zamboanga.
The Civil Aeronautics Board (CAB) recently approved the international flight expansion of Zest Airways at the Diosdado Macapagal International Airport (DMIA) in Pampanga starting this month.
Zest Airways was granted 1,200 seats to service Clark-Hong Kong; 2,520 seats for Clark-Macau and Clark-Thailand with 1,260 seats.
The company, which is still using the old domestic terminal, is also prepared to transfer to the new Ninoy Aquino International Airport (NAIA) 3 before the end of this year. (PNA)
TUESDAY, NOVEMBER 11, 2008 | EDUCATION
Pasig City -- Savings posted from previous computerization programs of the Department of Education (DepEd) were used to buy computer laboratory packages that will benefit 200 more public schools – 100 elementary and 100 high schools - in sixteen regions.
The savings were derived from the department's efforts to come up with cost-effective technologies that were not covered by previous computerization programs of the government.
DepEd Secretary Jesli Lapus said that "DepEd's computerization program lays the foundation for our learners to be connected to the rest of the world, and endow them with skills required from a 21st century learner."
To further optimize the cost allotted for the project, a wireless connection will be utilized to eliminate the cost for manually networking the computers in a laboratory.
A computer laboratory package includes one personal computer as server, ten units of personal computer as workstations for students, eleven units of uninterrupted power supply, one wireless broadband router, and one color printer.
A lecture and hands-on training on basic software and hardware installation and troubleshooting will likewise be provided to teachers in every school.
The computers have been insured by the Government Service Insurance System against fires, typhoons, theft, and floods. These units are also covered by a three year-warranty and can be repaired on-site.
The Education Chief added that "with DepEd's diligent efforts to optimize the budget, more public schools will get computer laboratory packages with high-end specifications but at a low cost-per-unit."
Recipient public high schools underwent a validation process conducted by DepEd's Technical Service team, the implementing office of the department's computerization program, and the Bureaus of Elementary and Secondary Education.
Technical Service Director Mari Paul Soriano said that "this program is crucial to the Secretary's vision of providing education to all Filipinos anytime, anywhere. Under his watch, and through this program, all public high school students will learn the relevant skills that will put them at par with our ASEAN countries."
These 200 recipient schools have stable, continuous supply of electricity, and are assured of support from the local government. All have specialist-teachers who can devote their time to teaching Computer classes, English, Science, and Mathematics.
The DepEd Computerization Program is a component of DepEd's Information Communication Technology for Education or ICT4E.
DAVAO CITY/PALO, LEYTE — The Davao regional office of the Philippine Coconut Authority (PCA) is introducing projects to help farmers reeling from a recent drop in copra prices as world market demand shifted away from coconut oil, which is extracted from the dried coconut meat.
Copra prices dropped to as low as P15 per kilogram last week from as much as P45/kg three months ago.
The situation is paralleled by developments in Eastern Visayas — which joins Davao and Zamboanga Peninsula as the top three copra-producing regions of the country — where prices registered an even bigger drop to a range of P14/kg (in rural areas) to P17/kg (in key cities) from P45/kg in the same period.
In 2001, copra farmgate prices in Mindanao dipped to as low as P5/kg, spurring the government to offer subsidized programs on food and education as well as free insurance in affected areas.
This time, the Davao regional government is preparing livelihood projects to augment farmers’ income. The latest of these projects, said PCA regional chief Lornito U. Orillaneda, is raising Sasso chicken. "What the farmers will just do is visit our office to register and then we will give them the chicks," Mr. Orillaneda said in an interview, adding that the agency will train these farmers on the basics of raising chicken.
Mr. Orillaneda said other mitigation projects to help farmers cope with volatile copra prices include giving incentives to farmers who plant new coconut trees, distributing organic fertilizers in order to raise yield, intercropping coconut farms with high-value crops like cassava and banana, and growing catfish.
"We need to help the farmers increase their income by not depending on their copra. They must realize that the copra is also competing with other [plant-based] oil products and is dependent on the global market," Mr. Orillaneda explained.
He said the region still hopes that copra prices will rise to at least P25/kg before Christmas.
Coconut is Mindanao’s largest export commodity, cornering roughly 40% of the island’s total receipts. About half of the country’s coconut lands, or up to 1.2 million hectares, is in Mindanao.
Meanwhile, a report from Palo, Leyte quoted from an e-mail Emmanuel Licup, chief operating officer of SC Global Coco Products, Inc., sent to the PCA regional office there to report the huge drop in copra prices.
Joel Pilapil, PCA assistant regional manager for Eastern Visayas, said his office is verifying the situation of the estimated 1.7 million coconut farmers and their dependents in the region. But he said SC Global’s observation is credible because the company has been trading copra for a long time. SC Global’s plant in Baybay City in Leyte, which started operating last year, can produce up to 39,600 metric tons of coconut oil a year for export.
Mr. Licup explained in his e-mail that the unusually high copra price earlier this year — "at a staggering P43 per kilo" — made coconut oil, which is extracted from copra, less competitive than alternatives like palm, soya and rapeseed oil. The huge price difference, in turn, spurred a swing in international market demand away from coconut oil.
"The price swing from June to October was mostly correctional. While the world market was already going down, our domestic market tried to keep it high to minimize losses from purchases of high-priced copra," Mr. Licup explained, adding that prices should have come down sooner since "the world market was already showing signs of a bearish scenario as early as September."
He noted that the coconut oil industry is now "seemingly panic as to how to unload a very huge inventory."
"We are trying to gather facts from oil millers so that we can tell farmers what’s really happening in the global market," he said. "Thissituation pushed millers and traders to sell [at a loss] at very low prices." — Sarwell Q. Meniano and Carmelito Q. Francisco
SUBIC BAY FREEPORT — The Subic Bay Metropolitan Authority (SBMA) reported 141 new investment commitments worth more than $239 million in the nine months to September.
An official statement yesterday said the resulting 15,330 new jobs include the 10,000 projected employment of Subic Neocove Corp., a joint venture between Korean and American firms for the construction and operation of an integrated sports and luxury resort facility at Subic’s Redondo Peninsula.
Aside from Neocove, nine other big investors will also be also labor-intensive. These are: Korean construction firm Hanil E&C Subic, Inc., which has a committed investment of $11 million; Sultan Ahmed Lootah Enterprises Corp., with $6.72 million; George Dewey Medical and Wellness Center, Inc., $6.58 million; Hanafil Golf and tour, Inc., with initial commitment of $3 million; Australasia Marine Alliance Corp., $2.31 million; Pacific Pearl Airways Aviation School, $2.13 million; Palmgold Int’l Ltd., $1.98 million; Grand Pillar Int’l Development, Inc., $1.9 million; and Buma Subic Development and Management Corp., with $1.5 million.
SBMA data show that Subic’s total labor force stood at 83,428 as of September. Services account for 43.17% of the total at 36,012 workers; maritime-related industries account for 31.69% at 26,438; manufacturing, 17.74% at 14,804; and construction, 6.75% at 5,628 workers.
P. L. G. Montecillo
DESPITE A GLOBAL economic downturn threatening to cut remittances from Filipinos working abroad, local airlines still expect 2009 to be better with oil prices steadily declining from this year’s record levels.
"The general outlook of the industry is quite positive, despite the crisis," Avelino L. Zapanta, Southeast Asian Air (SEAir) president, said on Monday.
While Filipinos working abroad could lose their jobs, "we still have to see that happening."
The bulk of the country’s migrant workers, he added, work as domestic helpers or health care practitioners and are therefore not affected by job cuts by big foreign corporations.
Mr. Zapanta said the ranks of overseas Filipino workers will continue to grow as demand for caregivers and househelpers rise in countries like the US, plus some countries in Europe, that have aging populations.
The country’s growing tourism industry will also stimulate travel in the country as foreigners find more reasons to visit the country, he added.
Gokongwei-owned carrier Cebu Pacific does not expect growth to slow down either. Its CEO said the economic slowdown affecting consumers would work well for the company’s business model of being a "low-cost carrier."
"Now everybody’s looking at the value of their peso," Cebu Pacific Chief Executive Officer Lance Y. Gokongwei told a briefing last week. "We are helping consumers save money."
People are still going to travel and those with lower budgets will go for airlines with lower fares, Mr. Gokongwei said.
"It will be a tough year especially with the crisis going on, but we are looking at this as an opportunity," he said. "There will still be more growth next year."
Though lower jet fuel prices have helped the company, "it has not changed how we do things," Mr. Gokongwei said.
As of end October, jet fuel prices had eased to $86 a barrel, 22.6% cheaper than a year earlier. Jet fuel peaked at $180 per barrel last July.
Cebu Pacific, which recently opened its fourth operational hub in the country in Clark Freeport, Pampanga, expects to carry around 12 to 15 million passengers annually in the next four years, from around seven million by the end of 2008.
The airline carried around five million passengers last year.
SEAir, meanwhile, also expects to more than double its passenger base next year as it starts offering international flights in the region with the delivery of new mid-range aircraft next year.
The country’s dominant carrier Philippine Airlines (PAL), meanwhile, is taking a cautious stand for next year.
Company officials said the Lucio Tan-owned airline is still reeling from the effects of high jet fuel prices which had cut its profits to $30 million for the year ending March, a 74% decline from over $130 million the year before.
"We are still looking for ways to cut expenses," PAL Corporate Communications Vice-President Rolando C. Estabillo said.
The company had already implemented cost-cutting measures with which it expects to save as much as $20 million annually.
"Things will still be hard next year, but we are still looking for ways to improve our service," Mr. Estabillo said.
By EDU LOPEZ
The Manila Bulletin
The Philippines was ranked 26th as one the world’s top 30 destinations for global retailers.
A.T. Kearney, an international management consulting firm, has released the 2008 Global Retail Development Index (GRDI) that showed the Philippines scored high at 8th in market saturation and 9th in attractiveness, indicating a tremendous retail opportunity for foreign investors.
Vietnam topped the list along with Morocco and Egypt. However, the consulting firm pointed out that myopic regulations, uninterested consumers and incapable supply chains could slow down investments in new market.
AT Kearney said the window of opportunity in emerging markets begins to close once regulatory barriers to entry become less onerous and when many global competitors have already entered.
There may be additional opportunities in organized retail after this point, but only for retailers with the most innovative approaches.
The window of opportunity measurement identifies the points at which new retail markets begin showing a pattern of organized retail, and when retailers will respond most favorably to innovative marketing approaches and management techniques.
By Roderick T. dela Cruz
The Manila Standard
STATE-RUN gambling firm Philippine Amusement and Gaming Corp. said construction of its $10-billion Entertainment City on Manila Bay will start in the first quarter next year—and despite the financial crisis that has delayed a number of casino projects in Asia.
The complex would allow Pagcor to more than double its income to about $1.3 billion by 2012, a company official said.
“We see no problems hampering construction,” the official said.
“As far as we can see, our project is not affected by the financial crisis.”
Pagcor recently released the terms of reference for the 85-hectare Bagong Nayong Pilipino Entertainment City, in which each investor is required to put in at least $1 billion.
The complex will be built on reclaimed land, and it will include hotels, convention centers, theaters, sports stadiums, restaurants, shopping centers, cultural complexes, museums and amusement parks.
Pagcor said earlier it had secured commitments from investors such as the Genting Berhad Group and Star Cruises of Malaysia, Alliance Global Inc. of the Philippines, the Aruze Group of Japan, and Bloomburry Investments of Australia.
The company said no prospective investors were pulling out of the project despite the financial crunch.
“In fact, SM Investments Corp. is in the process of completing the requirements asked by Pagcor of investors in the project,” the official said.
“SM is also in talks with various foreign groups such as MGM Resorts for possible tie-ups.”
The official said unaudited figures showed that Pagcor’s income rose 11.6 percent to P14.85 billion in the first half of 2008 from P13.30 billion in the same period last year.
He said growth continued to the second half of the year, though figures were not yet available.
“October was a record-breaking month,” he said.
“We gained our second highest monthly income in the history of Pagcor that month.”
The official cited a study by the accounting firm Price Waterhouse Coopers saying Pagcor’s revenues would increase at the compound rate of 17.8 percent until 2012.
“Revenues will increase from $577 million in 2007 to a projected $1.3 billion in 2012,” the official said.
Still, a big casino operator being wooed by Pagcor is facing bankruptcy.
Las Vegas Sands Corp., which operates casinos in Las Vegas, Macau and Singapore, has hinted that it may default on its $8.8-billion debt.
Casino revenues in Las Vegas and Atlantic City have gone down this year as a result of the financial crisis, which has prevented Americans from spending on non-essentials.