Vol. 23, No. 4 April 2011
FACTSHEET The Month’s Highlights Political
Days before she was to stand trial before a Senate impeachment court, Ombudsman Merceditas Gutierrez announced her resignation effective May 6, citing her wish to spare the nation from a long and divisive impeachment process. The President authorized the transfer of SEC supervision from the DTI to the DOF through E.O. 37 dated April 19. Malacanang announced that the Philippines is open to a ‘mutually acceptable’ resolution of concerns over the scrapped Laguna Lake Rehabilitation project. President Aquino has appointed former Bataan congressman and former chairman of the Subic Bay Metropolitan Authority Felicito Payumo as head of the Bases Conversion Development Authority (BCDA). The next chair of SEC will be ACCRA senior partner Teresita Herbosa. Malacanang also announced two appointments in the Commission on Audit: whistle-blower Heidi Mendoza as commissioner and Ma. Gracia M. Pulido Tan as chairman. Mendoza is to serve for 4 years. President Aquino appointed Augusto Lagman as commissioner of Comelec. Community sentiments must prevail in determining whether or not a mining project should be pursued, President Aquino said as he reiterated his administration’s support for large-scale mining investment. A P73.8 million tax evasion case was filed by the BIR versus Mikey Arroyo and his wife at the Justice department. Former agriculture secretary Luis ‘Cito’ Lorenzo, undersecretary Jocelyn J‘ ocjoc’ Bolante and several others will face plunder charges for the P728 billion fertilizer scam, as the Ombudsman orders the filing of charges.
A day after the Ombudsman filed a graft case against LTO chief Assistant Secretary Virginia Torres, she took a leave of absence. Former military budget officer George Rabusa filed plunder complaints against three former Armed Forces chiefs of staff, four retired generals and 10 other people for their alleged involvement in military fund anomalies.
Remittances from OFWs grew by 6.2% to US$ 1.5 billion in February. In the first two months, remittances rose by 6.9% to US$ 2.98 billion. Universal and commercial banks’ bad loans in relation to their total loan portfolio continued to improve to 2.93% in February. Credit card receivables of banks operating in the Philippines increased 4.7% last year to P143 billion. With a budget deficit of P18.131 billion in March, the shortfall for the first quarter reached P26.197 billion, significantly below the projected deficit of P111.986 billion and the deficit of P134.179 billion recorded in the same period of last year. The country’s manufacturing output grew by 11.2% in volume in February. Imports grew by 20.1% to US$ 4.69 billion in February, bringing total imports for the year to US$ 9.99 billion. With total exports in February of US$ 3.86 billion, the trade deficit in February reached US$ 823 million. For the first two months, exports were up 10% to US$ 7.865 billion. FDI net inflow surged 22% to US$ 207 million in January, according to the BSP. The BOI said that FDI inflows in the first two months increased by 135% to US$ 727 million. Globe Telecom Inc. has called for a probe of the impending P74.1 billion takeover by PLDT of competitor Digital Telecommunications
Philippines Inc. that could turn the competitive telecommunications industry into a virtual monopoly. Meanwhile, Malacanang orders the review of the PLDT-Digitel deal. The NTC is supposed to review the deal and calls for an effective anti-trust legislation are increasing. The BOI has granted various fiscal and non-fiscal incentives to four projects – three in housing and one in dessicated coconut production – worth more than P2.4 billion. Registered investments with BOI and PEZA surged 123% to P144.822 billion in the first quarter of the year. The country’s balance of payments hit a surplus in March that was the biggest in four months, boosted primarily by a US$ 1.5 billion global bond sale. The US$ 2.02 billion BoP surplus in March, in turn, led to US$ 3.493 billion surplus in the first quarter, nearly three times the US$ 1.276 billion recorded in the first quarter of 2010. The draft implementing rules and regulations for the ‘pocket open skies’ policy seek to appease local carriers’ concerns regarding reciprocity but also maintain that national interest will be paramount in setting air services deals. Net inflows of portfolio investments dropped 54% to US$ 245.4 million in March due to jitters triggered by Japan’s disaster, but net inflows in the first quarter reached US$ 972.56 million, up from US$ 384.75 million in the same period of 2010. Gross international reserves continued to increase in March to US$ 66 billion due mainly to proceeds from government bonds. The National Renewable Energy Board has recommended a target of 830-MW as the total allowed capacity of the renewable energy facilities that will be put up in the country in the next three years (250-MW in new
hydropower, 250-MW for biomass, 100-MW for solar, 220-MW for wind and 10-MW for ocean resources.) The inflation in May steadied at 4.3%, bringing the first quarter average inflation to 4.07%. The first of the government’s PPP infrastructure projects – the privatization of MRT and LRT – will be auctioned off in June, the DOTC said. The DOE will launch another Philippine Energy Contracting Round (PECR) in June, USec. Layug said. The PECR will also be in line with the filing of the Exploration Bill which will rationalize provisions under the Oil and Gas Exploration Act of 1972. The DOE also cancelled 70 renewable energy service contracts as part of its move to weed out the so-called ‘nonperforming contracts’ and offer these to more serious investors. DOE USec. Layug also disclosed that licenses covering four prospective petroleum blocks were likewise cancelled.
construction of a 135-MW coal-fired power plant in Batangas. Lopez-led First Gen Corp. acquired another 390 million shares of EDC for P2.15 billion, thus raising its stake in the country’s leading geothermal energy producer to about 46% from 43%. Globe is investing US$ 500 million this year, a significant portion of which will be allocated to improve the quality and capacity of its mobile network infrastructure throughout the country. Philippine Racing Club, Inc. has finalized its joint venture deal with Ayala Land, Inc. for the development of the former Sta. Ana racetrack in Makati into a mixed-use complex. The ADB has committed US$ 500 million in funding to help the DOE with its electric-tricycle project. Philex Mining more than doubled its earnings to P1.33 billion in the first quarter on the back of surging prices and improved output.
Despite numerous snags, the US$ 5.9 billion Tampakan copper-gold mine project is still on track to start commercial operations in 2016.
The Century food group has bought 33.85% of ArthaLand Corp.’s equity for P450 million.
Phinma Corp. has allotted P6 billion this year for capital spending – more than the average in previous years – to bankroll expansions mostly in its power business.
The BOI has granted various fiscal and nonfiscal perks to the Lopezes’ FG Bukidnon Power Corp. for its P106 million, 1.6-MW hydropower facility.
Ayala Corp. will significantly ramp up spending this year (P79 billion) as it pursues a diversification into power and infrastructure. The group made an initial foray into solar and wind energy and aims to balance these with investments in traditional energy. In line with this, the Ayala group takes a 70% stake in Sta. Clara Power Corp., an independent power producer specializing in run-of-the-river power plants.
The SM group has raised its stake in Belle Corp. to a controlling 66%.
HRMall, an affiliate of Ayala-led BPO firm LiveIT Investments Ltd., bought the US-based IQBackOffice LLC, without specifying the purchase price. PASAR is exploring the possibility of putting up a 60-MW coal-fired power plant in order to provide its own power needs at prices that can keep the copper smelter competitive. Trans-Asia Oil and Energy Development Corp. signed a contract with DMCI for the
Metrojet, a part of Kadoorie Group, is investing US$ 40 million in a maintenance, repair and overhaul facility in Clark for its fleet of 26 aircrafts. Holcim Philippines is planning to invest around US$ 500 million in a new local cement plant to cater to a potential spike in demand in the years ahead given opportunities in infrastructure and private construction. Holcim is now operating near its rated capacity of 7.8 million metric tons. Filipino-owned steel firm New Carcar Manufacturing will be investing P10.6 billion for three billet manufacturing facilities in Luzon, Visayas and Mindanao. Lufthansa Technik will invest US$ 30 million
in the construction of a new hangar in Manila dedicated to the maintenance of the Airbus A380, the world’s largest commercial passenger jet.
The Budget department has released over a billion pesos to fund mostly rehabilitation of provincial airports, seaports and other transportation infrastructure in preparation for the influx of tourists following the implementation of open skies policy. Filinvest Development Corp. will start building two coal-fired power plants in the next six months as part of its plans to diversify into the power industry on top of its core business in real estate. To help secure the country’s fuel supply, Petron officially unveiled its plan to spend US$ 1.8 billion to further upgrade its 180,000-barrels-aday oil refinery, to be completed in 2014. The contract between North Luzon Railways Corp. and Chinese contractor Sinomach for the rehabilitation of Northrail is still undergoing comprehensive review by the DOTC and faces possible cancelation due to cost overruns and construction delays. Aboitiz Power’s subsidiary Hedcor Sabangan, Inc. will build a 13.2-MW run-of-river hydroelectric power plant in the Mountain Province early next year. Aboitiz Power Corp. will invest P25 billion for the construction of a 300-MW coal-fired power facility in Davao. Conal Holdings Corp., led by the Alcantaras’ Alson Consolidated Resources Inc., is pushing through with a plan to build two coal-fired power plants in Sarangani and Zamboanga to provide 300-MW in additional baseload capacity in these areas in four to five years.
The House approved on third and final reading HB 08, otherwise known as the Healthcare Service Price Disclosure Act of 2011, requiring hospitals and clinics to post a price list of all their services, incidental expenses and medical supplies in a conspicuous place on their premises.
The Philippines has been allocated an additional sugar export quota of 60,000 metric tons by the US government.
Economic Indicators BANKING INDICATORS
MERCHANDISE EXPORTS In Million USD JAN-FEB 2011 4,157
JAN-FEB 2010 4,105
(%) Change 1.3
Woodcraft & Furniture
Elect. wiring harness
Dollar Deposit Rates (% per annum) (April 18 - 20, 2011) Savings Deposits
Electronics and Components
Gold Metal Components
T-Bills primary issues (%p.a.) WAIR Auction Auction Date - (April 18, 2011 ) 91 days
(NI - no issuance) Reserve Money (April 11 - 15, 2011) (million PHP)-----
60 days and below
Shrimp and Prawns
91 - 180 days
181 days and above LIBOR/SIBOR (% per annum) (28 April 2011) Libor 90 days
Dessicated Coconut OTHERS
MERCHANDISE IMPORTS In Million USD Electronics and Components Telecommunication Eqpt. and Electrical Machinery Industrial Machinery
JAN-FEB 2011 3,349
JAN-FEB 2010 2,771
(%) Change 20.9
Textile Yarns, Fabric
Mineral fuels, lubricants
Iron and Steel
Misc. Manufactured Articles
Paper and Paper Products
Power Generating Machinery
Sibor 90 days
Libor 180 days
Sibor 180 days Banking Lending Rates (% per annum) (April 18 - 20 , 2011) All maturities
(one year and below)
(more than 1 yr. - 2 yrs.)
(over than 2 yrs.)
GROSS INTERNATIONAL RESERVES In Million U.S. Dollars January February March April May June July August September October November December
2011 63,541 63,890 65,983
Source: National Statistics Office / BSP
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2010 45,592 45,764 45,579 46,944 47,690 48,704 49,042 49,906 53,754 57,154 60,566 62,371
BOI approved investment project October - December 2010
Peso Exchange Rate (end month)
SHULEY MINE INCORPORATED Producer of lateritic nickel ore - 100% Filipino - project cost P 82,443,000
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Ave.
TSUCHIYA KOGYO (PHILS) INC. Export producer of automotive and industrial nameplates, tags and labels - 75% Japanese 21% Taiwanese 4% Filipino - project cost P 27,785,000 SUPERSTAR AGRI FARMS CORPORATION Producer of commercial broilers - 100% Filipino - project cost P 12,170,000 MAGNETICA ELECTRONICS INC. Export producer of electromagnetic components and parts - 60% Filipino 40% American - project cost P 11,013,000
2011 USD 44.09 43.84 43.39 43.20
2011 EURO 60.04 60.28 61.13 63.88
2010 USD 46.74 46.16 44.42 44.69 46.49 46.44 45.56 45.18 43.92 43.31 44.09 43.89 45.07
2010 EURO 65.30 62.95 59.39 59.08 57.49 57.50 57.50 57.50 57.50 57.50 57.50 57.50 58.89
Annualized Inflation 2010-2011
POWER SOURCE PHILIPPINES, INC. Operator of 50 KW biomass power in Missionary areas - 96% American 4% Filipino - project cost P 7,108,767
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Ave.
HARDWARE LABS PERFORMANCE SYSTEMS, INC, Export producer of water block - 99% Filipino 1% Chinese - project cost P 6,139,000 JEWELRY DESIGN PARADISE PHILIPPINES, INC. Export producer of fashion jewelries and accessories - 100% Filipino - project cost P 3,125,000 SENCON ASIA INC, Producer of sensors and quality control devices for can manufacturing - 100% British - project cost P 2,979,625
Philippines Metro Manila 2011 2010 2011 2010 3.5 4.3 3.9 3.6 4.3 4.2 4.6 4.1 4.3 4.4 4.0 5.0 4.4 5.3 4.3 4.6 3.9 4.1 3.9 4.1 4.0 4.5 3.5 3.5 2.8 2.2 3.0 3.6 3.0 3.4 4.0 3.8 4.2 4.0
Outside MM 2011 2010 3.4 4.6 4.2 4.3 4.5 4.1 4.1 4.2 3.9 3.8 3.8 3.5 2.9 2.8 2.8 4.0 3.7
Source: National Statistics Office (NSO)/BSP
Balance of Trade by Major Trading Partners: January - February 2011 (F.O.B. Value in Million U.S. Dollars) Country
Bal. of Trade
2. United States
5. Korea, Republic of
7. Hong Kong
The Philippine Monthly Factsheet is prepared by: European Chamber of Commerce of the Philippines (ECCP) For more detailed information, please contact: ECCP 19/F Philippine AXA Life Centre Sen. Gil Puyat Ave. cor. Tindalo St. Makati City, Philippines Tel.: (632) 845.1324 Fax: (632) 845.1395 e-mail: firstname.lastname@example.org website: www.eccp.com
MONTHLY Vol. 19, No. 4, April 2011
THE MONTH’S HIGHLIGHTS Pay Hike Mulled Still By RTWPB. The Regional Tripartite Wages and Productivity Board (RTWPB) denied that it dismissed the petition of the Alliance of Progressive Labour (APL) seeking a Pesos 124 across the board wage increase. The members of the wage board in Central Visayas are still to meet and evaluate the conditions and economic indicators as basis for a wage increase. Court Upholds 16 Cities Again. The Supreme Court, voting 7-6, ruled with finality that the creation of 16 new cities, three of them in Cebu, did not violate the Constitution. The ruling upheld Naga, Carcar and Bogo as the new cities in Cebu. Officials Propose Higher Realty Taxes. The Cebu City Assessor’s Office wants to increase the tax assessment level of real properties in the city. The City has not revised its property assessments for almost five years. The assessor’s office said it is proposing to increase the tax assessment on residential, agricultural and commercial properties, among others, by at least 20% from the existing tax assessment level. 75% Of City Aware Of Segregation. The Cebu City Government visited facilities in Consolacion in the north and the city of Naga in the south as alternative areas where Cebu City can dump its garbage. The City Government has no decision yet where to relocate its dump site following the closure of the Inayawan Sanitary Landfill. It likewise announced that there is now 75% compliance and awareness in the City’s
policy of “no segregation, no collection”. The Department of Public Services collects up to 500 tons of garbage in the city every day, but when the policy was implemented in 01 April, the amount of garbage collected dropped to 200 tons a day. Cebu DepEd Project To Construct 64 School Buildings In Province. About Pesos 162 million is now ready to build 64 school buildings in 28 towns in Cebu Province. The province is divided into 44 clusters and each cluster will get an allocation from the Department of Education (DepEd) Central Office. Cebu Doctors’ Hospital Gets Accreditation. Cebu Doctors’ University Hospital (CDUH) has been given full accreditation for two years by the United Kingdom (UK) – based healthcare company QHA Trent. The accreditation will not only help boost the hospital’s image but also Cebu’s stature as a medical tourism destination. CDUH believes that the QHA Trent is the right accreditation body to go for as it is anchored on a development approach that ensures an on-going quality process. The accreditation also allows the hospital not to be dependent on the standards of other countries. Camotes Town Grabs UN Award. The municipality of San Francisco in Camotes Island, Cebu won the 2011 United Nations (UN) Sasakawa Award for Disaster Reduction. The Sasakawa award is “a symbol of excellence and outstanding achievement in environmental inspiration and
action”. The UN recognized San Francisco’s Purok system, a home-grown disaster risk reduction that enables communities to identify areas that are vulnerable to the effects of climate change, like El Nino. Church, SM Seaside City Mall To Rise at SRP. SM Prime Holdings (SRP) broke ground at the South Road Properties (SRP) by burying a time capsule carrying the development plan of SM Seaside City, which will be home to the fourth largest SM mall in the country. The very first building to be erected in the area is a Church. Rep. Thomas Osmena projected that the value of the SRP lots could balloon more than ten times over. This is why, he wants to hold off selling SRP lots until SM Prime will have commenced on its development. Consolacion Mall Costs SM Pesos 1.2 B. Aside from its mall project at the South Road Properties (SRP), SM Prime Holdings is also completing its other mall in Consolacion. The three-level project cost Pesos 1.2 billion and will take up 70.000 sq.m.; targeted to be finished by the end of the year. Skycable To Introduce High-Definition Platform In Cebu. Cable television service provider Skycable will soon introduce a HighDefinition (HD) box in Cebu after seeing an increase in consumer demand for shows with “superb quality”. HDTV in Cebu is another innovation in the cable industry where subscribers will get access to HD programs that feature images and sound of superior quality.