Saturday, 23 August 2008

Hitachi ties up with Philippines universities to develop computer hard disk manufacturing skills

Paolo Luis G. Montecillo
BusinessWorld Online

GLOBAL CHIP manufacturing giant Hitachi Global Storage Technologies is donating $3 million to two local universities in a bid to develop computer hard disk drive manufacturing skills in the country.

In a press briefing, officials of the Japan-based firm said it is donating two laboratories each to the University of the Philippines (UP)-Diliman and the Ateneo de Manila University, to spur the study of robotics and metrology, in line with the company’s integrated university program.

Under the program, the company will also tie up with "key universities" to extend scholarship and research grants, and extensive on-the-job training programs.

"We [Hitachi] recognize the tremendous talent of these future potential scientists and engineers, which is why we are investing in developing and recruiting local talent through mutually beneficial collaboration," Dr. Pantelis Alexopolous in a statement yesterday said.

Schools tapped for the Hitachi program are UP, Ateneo, De La Salle University-Manila, Mapua Institute of Technology, the Polytechnic University of the Philippines and the University of Santo Tomas.

John Herber, Hitachi senior technical staff manager, in an interview yesterday said "our goal is to hire these trainees."

Under the program, he said Hitachi will determine parts of its operations that require people. Once found, the company will tell the schools what kinds of students Hitachi needs, and the schools will recommend students who may fit the vacancies.

The specialized training program will last six weeks in the company’s Sta. Rosa, Laguna plant and at the end of the program, the company will decide whether to hire the trainee or not.

Hitachi’s roughly 5,000 employees in its Laguna plant, who are mostly engineers, manufacture magnetic sliders, which are devices less than a millimeter in width that are used to write data on computer hard drives.

Other than robotics and metrology, or the study of microscopy and measurement, the company also plans to train students in the field of three-dimensional (3-D) design--an essential part of the hardware design process.

Dr. Sergio Cao, UP chancellor, said "the equipment donation and other program developments will go a long way toward helping our faculty and students advance their talent, skills and knowledge" in the said fields.

Gov’t offers 800,000 hectares of farmland to San Miguel-Kuok joint venture

Neil Jerome C. Morales
BusinessWorld Online

THE GOVERNMENT is offering 800,000 hectares of farmland in Luzon and Mindanao to San Miguel Corp. (SMC) and the Kuok Group, which are embarking on a $1-billion joint project to help the government ensure the country’s food security.

Marriz B. Agbon, Philippine Agricultural Development and Commercial Corp. (PADCC) president, reported to Agriculture Secretary Arthur C. Yap, that "the government has identified about 100,000 hectares as ’Priority 1’ areas in Luzon and Mindanao, and another 480,000 hectares as ’Priority 2’ areas for recommendation to San Miguel and Kuok."

Mr. Agbon said these farmlands are in the Mountain Province, Zamboanga del Norte, Zamboanga Sibugay, and Saranggani.

Another 220,000 hectares classified as Priority 3 areas are located in Davao del Sur, Davao del Norte, South Cotabato, North Cotabato and Agusan del Norte.

"From these areas, SMC and the Kuok Group will conduct an evaluation and review of the suitability of such tracts of land for agricultural-related endeavors," Mr. Agbon said.

The PADCC is an attached agency of the Agriculture department. It identifies lands for agribusiness.

Priority 1 consist of areas below the poverty threshold, Priority 2 within the poverty threshold, while Priority 3 are developed areas, PADCC Project Development Officer IV Judith M. Luna said in a phone interview.

SMC, Southeast Asia’s biggest foods and drink group, and the Kuok Group, the world’s largest listed palm oil trader, signed a memorandum of agreement (MoA) last July to invest up to $1,000 per hectare of farmland to plant rice, corn, sugar, coconut and palm oil, among others.

The two companies said they are embarking on the joint venture to help ensure the Philippines’ food security. They promised to develop a million hectares of idle government land.

Both firms would split a 30% equity infusion in the project while the remaining 70% would be raised through long-term debt. The joint venture will issue debt locally and offshore, depending on market conditions, to fund certain phases of the project.

The venture, dubbed "Feeding our Future," assigns the DA and the Department of Agrarian Reform to identify potential farmlands while SMC and Kuok Group will pinpoint where and what to plant.

Under this MoA, SMC and the Kuok Group will provide the "financing, technical support and management for agricultural crop production" determined to be suitable for areas covered by the project, which will include, but will not be limited to, "irrigation, access roads and post-harvest investments."

Friday, 22 August 2008

PGMA signs into law PERA Bill Friday

President Gloria Macapagal-Arroyo will sign into law tomorrow (Friday) the Personal Equity and Retirement Account (PERA Bill) in simple ceremonies at Malacanang’s Rizal Hall.

With the signing into law of the PERA Bill, the country’s savings rate is expected to increase as it allows tax-free personal retirement accounts.

The country’s savings rate of 19 to 23 percent of Gross Domestic product (GDP), is the lowest in the region, with Malaysia, Singapore and Vietnam at 34 to 40 percent of GDP.

The PERA bill was approved by a bicameral conference last June 10.

The bill intends to promote the "culture of savings" among Filipinos, particularly overseas Filipino workers (OFW) who are not required by law to be members of the Social Security System (SSS) and the Government Service Insurance System (GSIS).

The scheme is expected to attract eight million individuals, three million of them OFWs, with the rest being self-employed individuals or entrepreneurs who are also not required to contribute to the SSS and GSIS.

Under the bill, an individual may make a total maximum annual contribution of P100,000 to his or her PERA account, or P200,000 for married individuals. The contribution can be as high as P400,000 for an OFW and his or her spouse.

Contributions are required to be invested in a qualified "PERA Investment Product," which may be a unit investment trust fund (UITF), mutual fund, annuity contract, insurance or pension products, deposit product, pre-need pension plan, shares of stocks, exchange-traded bonds or any other investment product or outlet.

Contributors are entitled to an income tax credit equivalent to 5 percent of the total PERA contribution.

Income from contributions as well as the eventual distribution of the PERA to the contributor are tax-exempt.

Entrepreneurship thriving among evacuees

BY ROMER S. SARMIENTO, Correspondent
BusinessWorld Online

PIKIT, NORTH COTABATO — Even in miserable condition, opportunity still abounds. This could be the slogan for individuals whose entrepreneurial spirits have not been diminished by the harsh condition they have to bear in Central Mindanao’s evacuation centers, little may their income be at the end of the day’s trade.

Backdropped by a streamer establishing this place as the Pikit Parish Gym Evacuation Center, 42-year-old Dulce Santander continues to eke a living by selling charcoal-grilled banana. Selling for only P2 per stick of one piece and a half of banana, Ms. Santander apparently showed it’s possible to rise above from just being in the league of the so-called "survival of the fittest."

"It’s difficult to just depend on the ration because you have to eat the same viand day-in and day-out," she told this reporter, referring to the dole-outs from government and nongovernment organizations such as sardines and noodles.

"By selling barbequed banana, at least I could buy fish for my family to have a different meal," she added, noting her daily gross sales in the past few days could reach P400 to P500.

She gave her buyers, mostly also refugees, options for her banana product: either plainly grilled or coated with margarine and sugar.

At the Pikit parish gymnasium, there have been hundreds of families who sought refuge from the villages of Kolambog, Silik and New Valencia in Pikit municipality and from the neighboring Barangay of Tapodoc in Aleosan, North Cotabato. The recent fierce skirmishes between the military and Moro Islamic Liberation Front forced these civilians to flee their villages for fear of getting caught in the crossfire.

Inside the parish gymnasium, another soul was also trying to eke money, this time through beauty service.

Mila Grace Nabos, 33, from Barangay Tapodoc, is continuing her livelihood despite the miserable condition in the refugee center, where several people, young and old alike, slept on card board boxes, some without mosquito nets. "Nail service is only P30," she said, while manicuring another evacuee.

Ms. Nabos said that she could have earned more money had they been not displaced, explaining that people had more to spare if their livelihood have not been disrupted.

Juan Fuertes, International Committee of the Red Cross (ICRC) head of sub-delegation to Mindanao, said it is important for those affected by conflict to realize that they do not have to be paralized by their difficulties.

One of the group’s initiatives — aside from rendering food and non-food items to the evacuees — is to provide livelihood projects to conflict-affected areas in Mindanao.

"We started it a year ago in some areas in Eastern and Central Mindanao. We are providing the beneficiaries with carabaos, horses, goats and rice, corn and vegetable seeds," Mr. Fuertes said.

ICRC hopes to sustain the initiative, pursued with the help of local governments’ veterinary and agricultural workers, he added.

"We are extending such assistance to population that is regularly displaced [by armed conflict]. The idea is for the evacuees to still have food on their orchards when they return to their homes," Mr. Fuertes said.

But for few other refugees in another part of the town, they don’t have to wait to go home because their enterprising spirits remained alive even after they were chased from their homes.

Inside the Buisan warehouse, where the displaced Muslim residents trooped, a woman was selling assorted food and non-food items.

Outside the warehouse on a makeshift tent, a man was cooking tinagtag, a Muslim delicacy, unmindful of the dump trucks and bulldozers lumbering nearby to work on a muddy patch.

"Five pesos each only," he yelled repeatedly.

Thursday, 21 August 2008

30 foreign firms vying to manage Philippine GSIS fund

The Manila Standard

Thirty foreign fund managers are vying for a contract to manage a portion of the $1- billion overseas investment fund of state-run pension fund manager Government Service Insurance System.

Winston Garcia, GSIS president and general manager, told reporters that the 30 foreign fund managers had expressed interest to manage $400 million of the pension fund’s $1-billion global investments program.

Garcia said the bids and awards commission was now evaluating the proposals submitted by the 30 fund managers on Aug. 1.

He said GSIS hoped to tap one or two fund managers after commissioning ING Investment Management and Credit Agricole Asset Management [Singapore] Ltd. to each manage an initial $300 million for investments outside the Philippines and New York-based Citibank NA as global custodian.

GSIS seeks to obtain consistent positive investment returns with capital preservation and sufficient liquidity over a three-year period. The return on the fund in US dollar terms should be at least an average of 8 percent per year and have an average volatility of not more than 7 percent.

Bidders should have assets under management of at least $100 billion and portfolio managers and analysts must have a minimum of 20 years of cumulative professional experience in managing an absolute-return portfolio.

Garcia said the state-run pension fund manager planned to diversify its portfolio and invest a portion of its funds in foreign currency denominated investment instruments to mitigate risk, maintain a long-term outlook on the exchange rate, as well as take advantage of the opportunities in the global financial market.

The state-run pension fund manager sees flat growth in net income this year as the global turmoil continued to batter financial and equities markets worldwide. It expects to approximate the P41.5-billion net profit it registered last year.

GSIS originally projected its net profit to increase by at least 10 percent this year on the back of higher returns from foreign and domestic investments as well as the country’s strong economic growth.

Philippines makes a splash thru satellite

By Jun Lomibao
Business Mirror

BEIJING—The Philippines has made its mark in the 29th Olympic Games—not on the playing field, but in outer space—through its very own Mabuhay Satellite.

Mabuhay Satellite was invited by China’s only major satellite operator, China DBSAT, to help provide satellite uplink service to international broadcasters.

“Traditionally, [these] services are provided by the world leader in Olympic broadcast transmission like Eurovision [EBU], ABU [Asia Broadcasting Union], TVNZ [TV New Zealand], Globecast and NBC of the United States,” said Johnson Regalado, head of sales and marketing of Mabuhay Satellite Corp.

“Satellite operators normally do not go into this service as it entails a lot of work and technical expertise,” he added.

China DBSAT, being the only Chinese satellite operator, was asked to service the Olympics. It, in turn, invited Mabuhay Satellite because of the Filipino satellite company’s experience in the last Southeast Asian Games, the Asian leaders’ meeting in Cebu and the Asian Ministerial Meeting in Manila and Vietnam, according to Regalado.

“Plus the fact that Agila 2 was launched in China, which is one of the most successful launches of Great Wall Holdings. They consider Mabuhay as one of their own. Mabuhay Satellite has provided technical and marketing personnel to compliment their own.”

“The uplink provides a very beautiful nighttime panorama for standup position, and has the capability of transmitting directly to any part of the world. The current users are the Brazilian Television group, the USA pool with a weekly live interview, like the interview on Michael Phelps, and the Eastern European countries,” added Regalado.

Mabuhay Satellite Corp. (MSC) is the first Philippine entity to own and operate a communications satellite.

With the full support of its parent company, the Philippine Long Distance Telephone Co., MSC successfully launched Agila 2 on August 20, 1997, and commenced commercial operations on January 1, 1998.

Since then, the company has successfully positioned itself in the competitive international satellite communications arena by offering video, IP and telecommunications solutions for clients in Asia and North America.

Mactan international airport’s terminal building to be upgraded to increase capacity

By Wilfredo Rodolfo III
Business Mirror

THE Mactan-Cebu International Airport is embarking on a P300-million renovation and upgrading of its lone terminal building in order to increase its capacity and improve services.

The project will expand the existing floor space in the terminal and the construction of additional passenger lounges and bays to accommodate more aircraft, including the wide-bodied long-haul airlines.

Airport general manager Danilo Francia said consultants are drafting engineering drawings on the new floor plan and passenger bays, adding bidding could be launched by the end of the year.

The entire project is expected to be completed in 2009.

The 20-year-old airport on Mactan Island handles close to 80 international and some 300 domestic flights a week, excluding cargo planes and military aircraft.

“The face of the terminal will change as we plan to increase the standards of our airport. This terminal is still useful for the next several years and we plan to maximize it,” he told the BusinessMirror.

Francia said the four existing passenger bridges and its single tube will be expanded to two tubes each, so aircraft can dock left and right of each bridge.

Two more bridges with two tubes will be constructed on both ends of the terminal. The bridges can accommodate large aircraft with two tubes facilitating simultaneous disembarking of passengers.

The waiting lounges will also be expanded while new ones will be built for budget airlines.

Francia said inside the building, administration and support services offices will be transferred to give more space for passengers and airline offices.

The airport authority is also set to increase the standard of stores inside the airport and will give way to bigger shops.

Francia said the existing single runway and the supporting taxiway and aprons are still world-class and could accommodate the biggest aircraft, including the Airbus 380s.

“The capacity of the runway is still just over 50 percent. It can still accommodate a lot of increased traffic,” he said.

Investment pledges growth expected to remain strong in H2

By J. A. D. Hermosa
BusinessWorld Online

THE GOVERNMENT remains confident that investment pledges will continue to grow in the second half, despite the ongoing global economic slowdown.

"We will be smooth sailing," Trade Undersecretary and Board of Investments (BoI) managing head Elmer C. Hernandez said during a luncheon meeting yesterday of the American Chamber of Commerce of the Philippines, Inc. (AmCham), noting that approved investment commitments more than doubled in the first five months of the year, even as global economies weakened.

The Philippine Economic Zone Authority and BoI reported that January-May pledges totaled P204.77 billion, a 115% increase from last year. That amount was also 52% of the government’s year-end target of P391 billion.

Mr. Hernandez assured business leaders that a bill that aims to standardize business incentives should soon hurdle the House of Representatives. "Based on my discussion with [House Ways and Means committee chairman] Congressman [Exequiel B.] Javier [of Antique], the bill will be presented to the plenary soon," he said.

He enumerated the other efforts to improve the business climate as the bill to improve the Build-Operate-Transfer law, and formation of "one-stop action centers" in the Trade department to quickly respond to investors’ queries and concerns.

AmCham President Frederick M. Santos lauded the new centers, saying in an interview that, otherwise, "investors will now know where to go."

Mr. Hernandez said he expects investments to rehabilitate and boost capacities of privatized power plants to account for a bulk of commitments in the second half.

Wednesday, 20 August 2008

US to keep on pouring assistance to Mindanao despite MILF attacks

BusinessWorld Online

THE UNITED STATES remains committed to funnelling millions of dollars in development aid to Mindanao despite deadly Muslim rebel attacks, its ambassador said Tuesday.

Ambassador Kristie Kenney said she remained hopeful the government and the separatist Moro Islamic Liberation Front (MILF) would be able to return to the negotiating table and settle the 30-year-old dispute. "The important thing forthe Philippines is to find the right framework for lasting peace in Mindanao," she told reporters a day after heavy clashes there left scores dead.

"We’re not going to walk away just because there have been a few bad days," she stressed.

The US Agency for International Development has injected some $292 million into Mindanao from 1996-2006, officials have said. Further economic and military aid amounting to $25 million for the year is tied to the peace process between the MILF and the government. — AFP

Tuesday, 19 August 2008

Why people have money

By Tony Lopez
The Manila Times

With the doubling of rice and oil prices early this year from their year-ago levels and the raging US subprime mortgage crisis (which erupted in August 2007), one would think the Philippine economy would be in the doldrums. It is not.

In fact, the first semester of 2008 has been an incredibly good period for the economy and for many Philippine companies.

San Miguel Corp., the country’s largest non-oil company, tripled its profits in January to June 2008 to a spectacular P20.13 billion, a 200-percent jump from the P6.631 billion net in the first half of 2007 despite revenues rising only by 8.7 percent to P79.77 billion from P73.383 billion. Of the P20.13 billion profits, P14.465 billion came from income from continuing operations and another P5.665 billion from discontinued operations or assets sold by the company.

SMC has chalked up its best semester ever and if trends continue, its best year in the last five years. The company’s major operating divisions all did very well—beer, gin and liquor, packaging and food. No company reflects more profoundly and intimately the dynamics of the Philippine economy than San Miguel.

Another indicator is the continuing increases in number of cellular subscribers of both PLDT Smart and Globe Telecom, the two biggest wireless providers. PLDT Smart increased cellular subscribers by 22.5 percent to 33.2 million. Globe Telecom expanded its subscribers by 25 percent to 22.7 million. Combined, their cellular subscribers now total 55.9 million. Add the 5 million of Sun Cellular and you have about 61 million subscribers—68 percent of the population. A cell phone is a capital purchase, a fixed asset and is not cheap. If you can afford it, that means you have extra money.

On the other hand, the revenues of the country’s three of largest listed real estate companies all rose mightily in the first half of 2008—Ayala Land by 32 percent to P15.38 billion (from P11.63 billion), Megaworld by 25 percent to P7.5 billion (fromP6.01 billion), and Vista Land by 28 percent to P5.27 billion from P4.11 billion.

On another front, January to July vehicle sales of member companies of the Chamber of Automotive Manufacturers of the Philippines, Inc. swelled 14 percent to 73,000 units, an 11-year high. In contrast, in America, auto sales slumped by 13 percent to a 16-year low. In 2007, CAMPI vehicle sales reached 117,000 units, the highest in a decade. Sales are projected to improve further on that to more than 125,000 units for the whole of 2008.

What do the strong performances and sales of these companies and these industries indicate? People have money to spare—to buy a bottle of beer or gin, a cellular phone, a house, and even a car.

Where is the money coming from? The disposable incomes of households have been eaten up by the doubling of the price of rice from P18 to P40 per kilo and the horrendous rise in the prices of both electricity and gasoline, to a point where food now accounts for up to 70 percent of the budget, and utilities—fuel, light, water and transport, another 20 percent, leaving barely 10 percent to send your child to school and buy yourself medicine and cosmetics.

The extra money comes from the some ten million overseas Filipino workers (OFWs). OFWs remitted a record $14 billion in 2007 and a 19-year record (for a single month) of $1.5 billion in June this year. If this trend continues, total remittances for the whole of 2008 will reach more than $16 billion, a record.

CAMPI president Elizabeth Lee cites the OFW factor for the spectacular sales of the local automotive industry amid the backdrop of high oil prices and a looming recession in America. The same OFW factor seems to have brought about an emerging phenomenon—the growing spirit of entrepreneurship.

Many people, especially the small ones, are thinking of putting up businesses. Some of them have focused on vehicles—particular vans and pickups. Indeed, more than 65 percent of total CAMPI sales are vans, the so-called light commercial vehicles.

And in this regard, Lee’s company, Universal Motors Corp., which makes Nissan SUVs, vans and pickups and where she is the executive vice president, has taken the lead. Two years ago, UMC launched the “Ur Van, Ur Business” program to help buyers to focus on the van as a means of doing business—to run shuttle service, a canteen, a delivery business. The buyers imbibe a culture of entrepreneurship as UMC enrolls them into an entrepreneurship seminar.

Uv-Ub has been a major success story. In January to July this year, UMC registered the highest percentage increase in sales among the major auto brands, over 65 percent.