BusinessMirror February 08, 2020

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BusinessMirror

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A broader look at today’s business n

Saturday, February 8, 2020 Vol. 15 No. 121

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PHL renews industrialization bid with $4-B steel mill project in Mindanao

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By Manuel T. Cayon

AVAO CITY—The elusive decades-old dream of an industrialized Philippines may slowly but surely turn into reality, assuming it won’t be derailed for the nth time. The renewed bid to industrialize will, however, take its roots not in developed congested urban areas like Metro Manila, Cebu, or even Davao City. Rather, it would likely start in the countryside, specifically in a relatively remote

underdeveloped part of Northern Mindanao. Industrialists participating in the first industrialization summit in Cagayan de Oro City last year underscored the existing and important stakes that were already

put in place and which only need to be brought in line on the road to industrialization. These include various and disparate policies, like the Palace’s Administrative Order (AO) 18, which ordered the Philippine Economic Zone Authority (Peza) to deny further application of economic zones in the National Capital Region to accelerate economic activities in the countryside, and the robust economic zones scattered across the country. “Work on research and development and human resource development is already in progress,” said summit organizer, Franklin M. Quijano, administrator and chief executive officer of the Philippine Veterans Investment Development Corp. (Phividec) Industrial Author-

“THIS southern Philippine island has always been an attractive place to investors. This is due to its natural resource potential, suitable geographical location, favorable climate, among others.”—Quijano

ity in Misamis Oriental. Quijano said the project’s initial work also needs to be supported by developing the institutional setup among industries, government and academe, especially in Northern Mindanao. Decentralized industrial activities will be the main feature of this vision, hued close to AO 18 that was signed in June last year. In this AO, President Duterte specified the point he made during his presidential campaign, that revving up the rural economy was not only meant to democratize the opportunities for work and economic development of the countryside; it was the only way out for a congested Metro Manila. He directed the Peza to deny further accepting, processing and

evaluating applications for new economic zones in Metro Manila to complement the government’s work to vitalize rural economy.

Mindanao hub

MINDANAO will play a supporting cog to the industrial wheel in this southern part of the country where largely undeveloped agricultural areas have also forced many residents to migrate to the proverbial greener pastures of Metro Manila, Cebu and the cities of Davao and Cagayan de Oro also in Mindanao. But a planned development for Mindanao would level the playing field for investments, Quijano said. “This southern Philippine island has always been an attractive place to investors. This is due Continued on a2

ArcelorMittal sees rosier steel outlook and limited virus impact

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By Elena Mazneva and Krystal Chia Bloomberg News

RCELORMITTAL said it’s more optimistic on the outlook for steel demand this year and expects the effect of the coronavirus outbreak in China will only be felt in the short term. The steel industry was hard hit in 2019 by slumping demand from automakers, trade wars and sluggish economies in Europe. While prices edged higher in the past two months, there’s concern the deadly virus will hurt consumption and throttle the industry’s nascent recovery. “ArcelorMittal believes that there are signs that the real demand slowdown is beginning to stabilize,” the company said in its

annual results statement. For now, “we believe the effect of the coronavirus will likely have a short-term negative demand impact in China and to a lesser degree elsewhere.” Overall, ArcelorMittal expects global steel demand—a barometer of economic growth—to grow by 1 percent to 2 percent this year after expanding 1.1 percent in 2019. “The supportive inventory environment means that we are more optimistic on the apparent de-

PESO EXCHANGE RATES n US 50.7800

LIQUID metal is poured from crucible during the steel-making process at ArcelorMittal’s steel plant in Ostrava, Czech Republic, October 19, 2018. BLOOMBERG

mand outlook for 2020,” the company said. Most of the impact on firstquarter demand from the coronavirus is expected to be recovered throughout the remainder of the year, ArcelorMittal said. Still, demand from China is seen weaker this year, between flat and 1 percent higher, from estimated growth of 3.2 percent. Though ArcelorMittal has minimal exposure to China, it follows the country closely as demand there affects global steel sales and prices. The company was bearish on China’s demand a year ago and improved its forecasts three times during 2019, while cutting estimates for the US and Europe. “Our perspective on the fundamentals of the Chinese steel market remains unchanged,” the company said Thursday. ArcelorMittal, which responded to weaker demand last year by curbing production in the European Union and planning the sale Continued on a2

n JAPAN 0.4617 n UK 65.6687 n HK 6.5401 n CHINA 7.2834 n SINGAPORE 36.6510 n AUSTRALIA 34.1749 n EU 55.7615 n SAUDI ARABIA 13.5363

Source: BSP (February 7, 2020)

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