Business
B3
TUESDAY, JANUARY 10, 2017 extrastory2000@gmail.com
Isuzu bullish after record sales in ‘16
ABOITIZ PACKAGES. The Aboitiz Foundation, the corporate foundation of the Aboitiz Group, in coordination with Pilmico Foods Corp. and Aboitiz Equity Ventures Inc., turns over 205 boxes containing 14,285 The Care Packages to non-government organization Kaya Natin! Movement for Good Governance and Ethical Leadership, for immediate distribution to areas affected by Typhoon Nina. Aboitiz Equity first vice president for government relations DJ Sta. Ana (right) leads the turnover of The Care Packages to Kaya Natin, represented by lead convenor and trustee Harvey Keh.
Govt bares P1-b fund to replace 5-6 lending By Othel V. Campos
T
HE government will initiate this month a P1-b lending program designed to replace the so-called 5-6 loans with an affordable micro-financing for the country’s micro, small and medium enterprises. The government is launching the Pondo sa Pagbabago at Pag-asenso, or P3, program in Mindoro and Leyte islands and Sarangani, among the top 30 poorest provinces, following the directive of President Rodrigo Duterte to eliminate 5-6, where borrowers are charged with a 20 percent interest rate in one short transaction. “The P3 is designed to bring down the interest rate at which micro-finance is made available to micro enterprises,” said Trade Secretary Ramon Lopez. The 2017 budget has included an initial funding of P1 billion
for the program, part of the planned P19-billion financing initiative for micro and small businesses in the next five years. The program’s fund will be lent out in the business centers of the poorest provinces, chosen based on poverty incidence, where the participating microfinance institutions and Small Business Corp. can operate. An attached agency of the Trade Department, SB Corp. will administer the P3 program, including the creation of a program management office, which will open a separate back
account for the P3 program to oversee the fund. “Fund delivery to microenterprises shall be carried out in either by wholesale lending to non-bank financial institutions like MFI-NGOs, and cooperatives which shall onlend the fund to beneficiaries or by direct lending by SB Corp.,” Lopez said. Priority beneficiaries include micro-enterprises and entrepreneurs that do not have easy access to credit, such as, micro-entrepreneurs, market vendors, agri-businessmen and members of cooperatives, industry associations and cooperators. Loanable amount per endborrower starts at P5,000 for start-ups to a maximum of P300,000, earning an interest rate of 26 percent per annum with no collateral requirement. The proposed rate is significantly below the 20 percent per day/week/month charged by
5-6 lenders. It is also lower than what is charged by most microfinance institutions. MFIs may opt for portfolio guarantee cover of up to 15 percent of their P3 loan portfolio from SB Corp. at a guarantee fee of 0.4 percent. The guarantee feature is seen to help MFIs address the P3 Program’s inherent risk. The guarantee fund will be secured from the P3 fund. P3 allocates P100 million for direct lending by SB Corp., in which the target loan beneficiaries are the small enterprises in priority and emerging industries, start-up businesses and technology innovators. “This alternative funding dedicated for micro and small enterprises is meant to discourage the 5-6 money lending system in our country,” said Lopez, adding that through the established MFIs, the government would reach even the smallest of entrepreneurs in the country.
Okada ready to compete for gaming market share JAPANESE billionaire Kazuo Okada, owner of the $2.4 billion Okada Manila, is ready to compete for a slice of the lucrative gaming industry in the Philippines. Okada Manila, the country’s biggest integrated casino resort, opened its doors on December 30, upping the ante in the country’s bid to become the next Asian gambling hub. Attracting tourists and gaming enthusiasts from around
Asia to the Philippines is Okada’s objective in competition with Solaire and City of Dreams Manila. Despite the head-start of the two gaming giants, the Japanese tycoon is undaunted. The opening of Okada Manila reflects Okada’s perseverance in achieving his dream of building a world-class integrated entertainment resort, blending it with Manila’s trademark hospitality and excellent ser-
vice. Okada Manila was not an overnight success, however. It encountered numerous challenges along the way. Four years after winning one of four licenses to operate in Entertainment City in 2008, Okada’s Tiger Resort, Leisure & Entertainment Corp. faced a plethora of regulatory and land ownership issues that led to the delay in the construction and opening of his casino resort.
CEBU PACIFIC ADVOCACY. Cebu Pacific, strengthens its partnership with the United Nations
Children’s Fund to reach millions of undernourished children in the country. Since July 1, 2016, CEB began accepting contributions of all currencies from passengers. The contributions are being used to fund nutritional supplements distributed to poor households with pregnant mothers or malnourished children. Proceeds contribute to the UN children’s agency’s First 1,000 Days campaign, which provides optimal nutrition, from a mother’s pregnancy to a child’s second year of life.
The tycoon denied allegations he made improper payments to obtain preferential treatment, stressing the provisional license awarded to Tiger Resort had similar terms to those secured by other Entertainment City licensees. In May 2015, Philippine Amusement and Gaming Corp. forfeited a P100-million assurance bond posted by Tiger Resort for failing to meet contractual deadlines to complete the project by March 2015. The state-run gaming agency also threatened to suspend Tiger Resort’s gaming license. Aside from these challenges, Okada has been dealing with the after effects of his controversial fallout with gaming tycoon Steve Wynn who forced the Japanese billionaire out of his holdings in the Wynn Resort in Las Vegas and Macau. People close to the tycoon say he was close to throwing in the towel, but his faith in Filipinos prevailed in the end—leading to his decision to go against all odds. “I have been around in search of a country that can host my dream but in every country I go to, I always see Filipinos. I observe them at work and in dealing with other people. If we take the Filipinos’ brand of hospitality—that genuine smile and “malasakit”—and combine it with the Japanese standard for discipline, then we can create something that will only be seen here,” Okada told reporters in an earlier interview.
ISUZU Philippines Corp. posted its best annual performance in 2016 with sales of 27,361 units, up 21 percent from 22,581 units in 2015. The company registered a record sale of 2,965 units in December, up 25 percent from 2,365 units year-on-year. “Isuzu Philippines Corporation’s record sales performance in 2016 is clearly a benefit coming from a strong domestic economy that inspired consumer confidence and spending. It also mirrors the continued uptick of the entire local automotive industry, which is also enjoying unprecedented results,” said Isuzu president Hajime Koso. Leading the sales were Isuzu trucks and buses with 1,716 units, a 219-percent jump over 2015 sales. Sales of the Isuzu D-MAX pickup rose 27 percent to 3,966 units from a year ago. “The introduction of changes to models and the sustained promotional and marketing campaigns have all helped in driving customer interest toward the Isuzu brand last year. A strong network of dealerships, as well as excellent after-sales services, also contributed in ensuring that Isuzu was able to maintain its upward trajectory,” Koso said. Isuzu mu-X remained the company’s best-selling model with deliveries of 12,657 units, topping the vehicle’s 2015 sales by 16 percent. Supporting the company’s flagship model are sales of the Isuzu Crosswind that grew 13.7 percent to 4,659 units from the previous year, and those of the N-Series light-duty commercial trucks, which rose 11 percent to 4,363 units. Othel V. Campos
How much GDP increase in 2017? THOSE who have to keep track of the performance of the Philippine economy for professional or academic reasons are doing two things at present. These are: (1) waiting for the release by NSA (National Statistics Authority) of its figure for the full-year 2016 growth of this country’s GDP (gross domestic product) and (2) preparing a forecast for the Philippine economy’s growth in 2017. The first task is decidedly easier than the second. This is because the GDP growth figure for the first three-fourths of 2016 is already known, to wit, 7 percent, which is the approximate average of the 6.8 percent growth rate of first-quarter 2016, the second quarter’s 7 percent and the third quarter’s surprising 7.1 percent. Considering that these were no earth-shaking changes in the Philippine economic environment during 2016’s final quarter, an economic analyst would not be far off the track if his calculations were to produce a full-year GDP growth figure of around 7 percent. The second task of a tracker of Philippine economic performance—preparing a forecast of the Philippine economy’s growth in 2017—is much more difficult. This is so for two reasons. The first is that 2017 is just beginning and there are no existing figures for prior-quarter performances of the economy. The second is that there are many more imponderables for the forecaster to contend with under the administration of President Rodrigo Duterte than under past newly-installed national administrations. The remarkable performance of the economy in 2016— certainly during the year’s third quarter—was the product of the strong economic fundamentals (especially healthy fiscal ratios, strong reserve position, price stability and a sound commercial banking system) bequeathed to the Duterte administration by its predecessor. The fundamentals are still in place, but an otherwise fine economic picture is beginning to be clouded by bad sounds and movements on the political side of Philippine society. The history of this country has abundantly shown that the Philippine economy is unable to maintain a respectable growth rate when political instability gets in the way. Assuming that the prevailing political circumstances do not change during the remainder of this year, what increase is the Philippine GDP likely to achieve in 2017? The members of the international financial community— multilateral institutions as well as commercial and investment banks—have already announced their forecasts. Not one of them believes that 7 percent GDP growth will be possible for the Philippines in 2017, but they all forecast above-6 percent growth. The IMF (International Monetary Fund) expects the Philippine economy to grow by 6.7 percent (revised from the earlier 6.2 percent). ADB (Asian Development Bank) is not as bullish: it expects this country’s GDP to grow by 6.4 percent in 2017. The foreign commercial and investment banks’ forecasts of 2017 Philippine GDP growth revolve around 6.5 percent. Barclays, the British bank, expects the growth to be 6.8 percent (previously 6.3 percent). The forecast of another British banking giant, HSBC (Hong Kong and Shanghai Banking Corporation) is 6.5 percent. The Japanese investment bank Nomura Securities is more sanguine about this country’s 2017 growth prospects; it expects Philippine GDP to grow by 6.9 percent this year (up from 6.7 percent). From the foregoing it appears that the international community considers the 7.1 percent GDP growth of 2016’s last quarter to have been something of a fluke. This must explain why all the major international forecasts of 2017 Philippine economic growth are below 7 percent. Do I think the Philippine economy is not capable of achieving 7 percent-and-above GDP growth on a sustained basis? I do, but not with the kind of disruptive political environment that Rodrigo Duterte is creating. A mixture of good economics and bad politics is bad for GDP. Hopefully, the nation’s political situation will turn for the better as the year progresses. But as of today I would put the economy’s 2017 growth at no more than 6.5 percent. E-mail: rudyromero777@yahoo.com