by Roderick T. dela Cruz
HongKong and Shanghai Banking Corp. has committed to participate in the public-private partnership undertakings of the Aquino administration to boost infrastructure development in the country.
“We are very keen on the government’s commitment to infrastructure,” said HSBC Philippines president and chief executive Tony Cripps. “We are very excited about the prospects and we are very keen.”
The British bank, which has large infrastructure project finance in the Asia-Pacific region, is awaiting the government’s completion of its infrastructure project priority list. The bank has participated in a recent infrastructure forum organized by the government.
“We are more likely to look at transactions where we already have some experience along the lines of power space like power generation,” Cripps said.
Cripps said the bank might also look at other priority projects such as water and tourism infrastructure development that includes roads and airports.
Cripps said a number of international fund managers also expressed interest to infuse capital into the country during the recent roadshows led by the Finance Department abroad.
Junie Veloso, senior vice president and head of corporate banking for HSBC Philippines, said the bank was in the process of securing deals for several energy projects and one large telecommunication transaction. He declined to give details.
The Aquino administration during a recent infrastructure forum that it was looking at raising P400 billion to P500 billion to support infrastructure projects.
Wednesday, 1 September 2010
by Roderick T. dela Cruz
by Julito G. Rada
Hanjin Heavy Industries Corp. Philippines will increase its workers in the Subic Freeport by over 5,000 after signing a contract to build 20 more vessels worth about $1.2 billion, the government said Tuesday.
Taek Kyun Yoo, general manager for external business of unit Hanjin Heavy Industries Corp.-Philippines, said the Korean shipbuilding giant would create more jobs at its Redondo Peninsula shipyard in Subic, Zambales to increase its workforce to 22,000 by the end of 2010 from the current 16,600.
Taek said the company’s order book rose to 56 vessels worth about $4.9 billion. He told Zambales Gov. Hermogenes Ebdane Jr. that Hanjin’s manpower requirements would further increase to 24,000 in 2011 and 25,000 in 2012.
Armand Arreza, Subic Bay Metropolitan Authority administrator, said Hanjin had remained Subic’s top exporter since last year. The Korea company registered exports with freight on board value of $372.74 million in the first half of the year.
“We expect Hanjin to remain as the Subic free port’s top exporter for the next few years, and to fuel the growth of Subic’s maritime industry,” Arreza said.
He said the SBMA expected Subic’s export FOB value to grow in the coming months, as Hanjin and other free port enterprises rolled out more products amid brightening prospects in global trade.
Ebdane said the increasing job generation at the Hanjin shipyard “augurs well for the development of the Zambales province, and to local efforts to strengthen the economic empowerment of Zambaleños.”
Tuesday, 31 August 2010
Written by John Mangun
Outside the Box
“It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.”—Charles Darwin
In the next three to six months, we will witness major financial market and economic events that will severely test the Philippines.
The US economy is sinking faster day by day. After ”pump priming” $2 trillion into that economy earlier this year, the revised second-quarter US economic growth was only 1.6 percent. That is a disaster, and here is why.
Imagine you are expecting to get a raise in your salary. You anticipate that the amount of the raise will allow you to be able to afford the monthly payments on a new car or house. So you buy that house or car, knowing that you can afford it because of your upcoming raise. But when your boss talks to you, you find out that your expected “big” increase in salary is almost nothing.
You cannot afford the monthly amortization but you are now stuck with the monthly debt payment. This is what has happened in the US. The US government borrowed and spent, anticipating that all the spending would fuel the economy and create economic growth to a level that would allow the debt to be paid. It did not happen, and the US is faced with a monthly bill that it cannot pay.
The third-quarter economic-growth numbers will be released in October. When those numbers come out, disaster will follow. The signs are already there. The US housing market is dead. Sales of new and existing homes are at the lowest record in history. The US housing market is a critical economic driver and it has stopped.
There are now six unemployed Americans for each job available, and the trend is getting worse each month. The average unemployed American has been out of work nine months. But if you listen to CNN or read the major US newspapers, there is lots of hope and optimism, and it is also false. Here’s why. The unemployment rate for the average middle-class American is 9 percent. For those earning $150,000 and more, the rate is 3 percent. But for the lower 20 percent of the economy, the unemployment rate is 35 percent. Those numbers should only be applied to a country like the Philippines, not to the largest economy in the world.
In a speech last week, Federal Reserve Chairman Ben S. Bernanke made clear that the only option that the US government has is to borrow (and print) endless amounts of money. However, a major buyer of that government debt is the Federal Reserve itself. And the only way the Federal Reserve can buy that government debt is to print more money. For a personal comparison, this is like taking a cash advance on your Visa card to pay the monthly bill on your Master Card.
To put the US government debt in some kind of perspective, the daily interest rate payable by the US is $34 billion. That is equal to the total value of Philippine exports and overseas Filipino remittances for six months.
The US stock market has been in a minor rally in 2010 holding the belief that the stimulus effort and bailouts would work. This policy has been a failure. The US dollar has been strong in the belief that the US economy would recover, leading global growth once again. The US economy will not be a growth driver for at least another decade, and will never be a growth driver until it changes its debt-based prosperity model.
For several months I have bored you with many gloom-and-doom stories and forecasts about the US economy and the US dollar. However, the two events of the economic numbers released last week and Chairman Bernanke’s speech now change the theory to a close reality. Had the second-quarter US economic numbers been favorable, the future might have been different and more positive. But it did not happen.
Also last week, the price of silver jumped $1 to close over $19 an ounce. If this price holds as a support price, silver will move to at least the mid-$20 range. Based on the current ratio of the gold price to the silver price, that would put gold at over $1,600 an ounce from its current $1,240 level. That is very bad news for the US dollar.
The Philippines must adjust to prosper. If the government tries to keep the peso from appreciating, then it must buy dollars and sell pesos. That means that the Philippine central bank will increase its holdings of a currency, the dollar, that is losing value, and that does not make any sense at all. Further, this will stifle foreign investment that will seek to take advantage of a rising peso and a falling dollar.
The New York Stock Exchange is having trouble staying above 10,000. Technically, a break below 10,000 targets another 20 percent fall to 8,000. A break of 7,000 then forecasts 4,000. These are disaster-making numbers.
A falling dollar and a falling US stock market would see capital flight from the US and the West at an unprecedented level. There are four stock markets that are predicting that a large part of this capital will move into these markets: Indonesia, Bombay, Thailand and the Philippines (and to a lesser extent, Malaysia). What separates these countries from most of the other similar nations is less reliance on the US for economic growth.
Investor and local stockbroker focus must be on local companies and local share prices. Although very difficult, given the normal mindset, the PSE will eventually decouple from the Western markets. In fact, it already has, to the extent that the PSE is shooting for historic highs while New York is trying to avoid multiyear lows.
When one side of the earth is in darkness, the other side is in sunlight. The Philippines will continue to have sunny skies.
E-mail comments to email@example.com . PSE stock-market information and technical analysis tools provided by CitisecOnline.com Inc.
Monday, 30 August 2010
MARICEL E. ESTAVILLO, Online Editor
AYALA’S electronics unit, Integrated Microelectronics Inc. (IMI), is close to opening a manufacturing plant in Europe.
The plan will push through this year, IMI President and CEO Arthur R. Tan told BusinessWorld last Friday evening during a small gathering to celebrate the firm’s 30th anniversary.
"We are going to do it within the year," Mr. Tan said, describing the size and the cost of the venture as "significant."
Mr. Tan, along with other IMI officials, will be going to Europe this September. He said IMI’s European expansion would involve the purchase of an existing firm "somewhere in Eastern Europe."
"It will be through acquisition. We have done it (acquire a foreign company) before. We bought a Singaporean company, we bought an American company but this one (the European firm) is not just any," said Mr. Tan who declined to disclose specifics.
The US purchase he was referring to involved Saturn Electronics and Engineering’s electronics manufacturing assets which were purchased in 2005. That year IMI also purchased Singaporean company Speedy-Tech Electronics Ltd.
IMI’s current European presence is only through an office in Germany that is said to account for some 23% of the company’s yearly sales.
"All we have is a sales office. I want to have a manufacturing and engineering footprint in Europe," Mr. Tan said.
"Although it is more expensive to operate in Europe, it also carries a regional presence that allows for a much closer interface with our European customers."
He said the development of new products and services would become much easier as a European site would complement its 11 manufacturing and engineering design facilities in the United States and Asia.
A new US manufacturing plant is also in the offing, with a deal expected to be finished within the year. "We cannot discount North America, that market will come back so we need to be ready for it," Mr. Tan said.
IMI sales hit $188.8 million in the first half of the year, allowing it to earn $4.7 million.
This year, said Mr. Tan, will be "better than last year... but relatively still muted compared to what we achieved prior to the [global] financial meltdown."
By MADEL R. SABATER
Malacañang on Saturday assured the nation that the government will continue to find ways on how to further improve the economy, following the 7.9 percent economic growth in the second quarter of the year, which is said to be the highest in three years.
“Pag-iibayuhin natin ang ating pagsisikap na gawing tuloy-tuloy na yan [We will improve our efforts in ensuring that it will be a continuous economic growth],” Presidential Communications Operations (PCO) Secretary Herminio “Sonny” Coloma said on Saturday over governmentrun radio station DZRB.
Coloma said President Aquino met earlier this week with officials of German multinational firm Deutsche Bank, which has a positive outlook on the Philippine economy, adding that its officials had even been urging other foreign investors to invest in the country.
“Hindi sila nangangamba, bagkus, sila ay panatag at nananalig na uunlad pa, lalakas pa ang ating ekonomiya at handa sila magdagdag ng investments,” said Coloma. [“They don’t see any threat to the Philippine economy. In fact, they are confident and optimistic that our economy will continue to surge and they will be pouring in more investments.”]
President Aquino said he is optimistic on the country’s growing economy despite the effects of the Manila bus hostage crisis on the economy, particularly the tourism industry.
Aquino and Finance Secretary Cesar Purisima met with the multinational bank’s officials, led by Deutsche Bank AG Singapore managing director and Asia Pacific head of the Corporate and Investment Bank Loh Boon Chye last week.
Deutsche Bank AG Manila managing director and Global Markets head Enrico Cruz, Deutsche Knowledge Services CEO Chris Sullivan, Asset Management head Manuel Malabanan, and Asset Management chief investment officer Frederico Ocampo were also in the meeting.
The Deutsche Bank Group in the Philippines employs over 1,700 staff members in the country.
Malacañang, meanwhile, remains optimistic that the 2011 budget will be approved before the end of the year.
Coloma said that the executive branch stands ready to discuss the 2011 budget with Congress to ensure that an acceptable and reasonable 2011 budget is passed before the end of the year.
He said budget hearings may be held starting next month.
Sunday, 29 August 2010
By RED SAMAR
Convergys Corporation, the largest business process outsourcing (BPO) provider in the country, has activated a new state-of-the-art command center in the Philippines that has the capacity to monitor and manage the huge call volumes coming into its contact centers and through its communications network around the world.
Located in the premier central business district of Manila, the command center is one of three for Convergys, with the others located at Convergys facilities in Cincinnati and in Gurgaon, India.
Marife Zamora, Convergys country manager and managing director, AsiaPac/EMEA, said the launch of the company's first command center in the Philippines further enhances the country's ability to deliver the high-level customer service that their clients and customers have come to expect from the global leader in relationship management.
“Having a command center in each of our leading geographies supports Convergys' global operating model. Our command centers give us the ability to monitor vital program metrics and distribute calls to any of our 68 contact centers around the globe 24 hours a day, 7 days a week,” she said.
At this new facility in Manila, specially trained command center employees monitor the trends and network volume in real time as hundreds of thousands of calls reach Convergys each day.
Communication and coordination are key activities as Convergys specialists then use advanced, proprietary technology to quickly distribute and route these incoming calls to the centers having spare capacity in locations around the Philippines and around the globe.
Convergys recently announced that it has added additional capacity to five of its existing facilities in the Philippines and will need over 3,600 new employees. Citing the outstanding performance of its employees in Philippines and based on overall high client demand for Philippines-based services, Convergys expanded its UP TechnoHub, Nuvali, San Lazaro, Cebu i3, and Bacolod facilities to include 2,300 additional work stations.
Did media trigger hostages’ massacre? (http://www.manilastandardtoday.com/insideOpinion.htm?f=2010/august/27/alvincapino.isx&d=2010/august/27)
‘Super SWAT’ was kept out of the loop
The buck stops with Aquino (http://www.manilastandardtoday.com/insideOpinion.htm?f=2010/august/27/emiljurado.isx&d=2010/august/27)
Mayor Lim refused SAF intervention (http://www.manilastandardtoday.com/insideNews.htm?f=2010/august/30/news1.isx&d=2010/august/30)