PH eyes free trade agreements with EU · 2010 114 357.7 471.7 2011 284.9 338 622.9 2012 404.4 335...
Transcript of PH eyes free trade agreements with EU · 2010 114 357.7 471.7 2011 284.9 338 622.9 2012 404.4 335...
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BUSINESS
Philippine ANALYST December 2013
33BUBUBUBUSISISISINENENENESSSSSSSSBUSINESS
PH eyes free trade agreements with EUThe Philippines is currently negotiating free trade agreements (FTAs) with 2 European blocs which, if approved, would be the fi rst bilateral pact between Europe and the Philippines. The effort will allow the Philippines to strategically position itself in the European market.
The Department of Trade and Industry (DTI) sent a delegation to Brussels last November to continue technical discussions on the Philippine - European Union (EU) FTA. The Philippines is in the process of determining sectors to be included in the FTA with the 28-member EU. The talks between the Philippines and the EU began in 2009 when EU failed to clinch a regional agreement with the Association of Southeast Asian Nations (ASEAN) bloc mainly because of political differences with Myanmar. Since then the EU has shifted to a bilateral approach in the negotiations and started talking to individual members of the ASEAN. Currently, only Singapore holds a bilateral FTA with EU, which was signed in December 2012. Aside from the Philippines, the EU is also negotiating FTAs with Malaysia, Vietnam and Thailand.
Meanwhile, initial negotiations for another trade agreement this time with the European Free Trade Association (EFTA) could begin within the 1st quarter of 2014. The DTI has already completed the necessary impact studies and consultation with stakeholders and is expecting to sign a joint declaration which marks the beginning of the initial stages of negotiation with the 4-member bloc. The EFTA is composed of Switzerland, Norway, Iceland and Liechtenstein, European countries that opted not to join the EU.
Total external trade between the Philippines and the EFTA more than doubled from $363 million in 2008 to $739 million in 2012 (see table/chart). Meanwhile, the Philippine - EU trade was at $12.8 billion in 2012, almost at the same level from $12.9 billion in 2008. The EU remains the largest economic bloc in the world, accounting for 17% of world trade at $16.2 billion ahead of the United States, Japan and China. The EFTA ranks 12th with $954 million.
The Philippines should have a clear understanding of what local industries would gain from the FTAs.
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Philippine ANALYST December 2013
Source: Philippines-European Free Trade Association FTA (PowerPoint presentation), DTI; EU-Philippines Trade and Investment Factfi le 2012, The Delegation of European Union to the Philippines.
The Philippine Exporters Confederation Inc. (Philexport) quoted Dutch Ambassador Ton Boon von Ochsée in saying that the Philippines is well-positioned for a free trade deal with European countries because of the Philippines’ growing population, robust business activity, and strong presence in the EU and EFTA markets. Mr. von Ochsée said the parties should include in the negotiations areas that are potent in the growth of the business community, including economic, environmental and social aspects. The ambassador added that Dutch fi rms have also expressed interest to partner with local companies specializing in energy, agriculture, water and water management.
The Philippine Chamber of Commerce of the Philippines (PCCI) identifi ed in one of its studies the industries that would benefi t from the PH-EU FTA, which include vegetable oils and fats, textiles, apparel, motor vehicle parts, and other manufactures. Other potential winners include industries dealing with fi nancial services and insurance, chemical products, communication, construction/dwellings, energy and water supply, paper and publishing, leather, machinery and electrical appliances.
The 2 FTAs are expected to improve the Philippines’ access to European markets through lower tariffs and more reasonable non-tariff barriers as well as an increase in European investments into the country (see box). However, the Philippines should
also have a clear understanding of what local industries would gain from the FTAs. The EU has an established policy on FTAs which is deeper in scope than other FTAs such as that of the World Trade Organization (see box). The EFTA also has a pre-determined set of components with its trading partners. Given that it only engaged in a bilateral agreement once (with Japan through the Philippines-Japan Economic Partnership Agreement), the Philippines is a rookie in the game and must establish fi rst the terms that are acceptable and benefi cial to it.
YEAR PH EXPORTS TO EFTA PH IMPORTS FROM EFTA TOTAL TRADE2008 58.4 305.1 363.5
2009 61.4 250.4 311.8
2010 114 357.7 471.7
2011 284.9 338 622.9
2012 404.4 335 739.4
PH-EFTA BILAERAL TRADE (IN MILLION DOLLARS)
Source: Bureau of Export Trade Promotion, DTI.
To ensure competitive access by protecting the Philippines’ preferential margins against potential erosion by EU FTAs with other ASEAN countries
To help attract more EU investments to the Philippines
To signal PH interest in greater involvement with EU business and improve market access opportunities in EU markets through lower tariff s and reasonable non-tariff barriers and other measures
To bolster Philippine economic growth
To improve mobility and access of Filipino nationals to EU countries
REASONS FOR A PH-EU AFTA
Source: PCCI, various press releases.
1. Trade in goods2. Services3. Public procurement*4. Trade and competition*5. Intellectual, industrial and commercial property rights6. Capital payments and movement*7. Customs and trade facilitation*8. Trade and sustainable development9. Transparency in trade regulations10. Institutional framework
AREAS COVERED IN EU’s NEGOTIATING MANDATE
* - Not discussed in the WTO negotiations
Source: EU-ASEAN FTA: The Philippine Case, Transnational Institute.
integrated circuits and electronic components
26%
electronic data processing and
office equipment
13%
electrical machinery
10%
other food products and live
animals
telecommu-nications
equipment
others36%
EUEU
electronic integrated circuits
14%
artificial teeth7%
fish fillets, fresh or chilled
7%
static converters for automatic data
processing machines3%
new pneumatic tires2%
others67%
EFTAEFTA
PHILIPPINE EXPORTS TO EU AND EFTA
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35BUSINESS
Philippine ANALYST December 2013
Consumer confi dence weakens in 4Q2013
The central bank (Bangko Sentral ng Pilipinas) reported that consumer confi dence in 4Q 2013 dropped to -21.3% from -7.9% in the previous quarter. The decline in consumer outlook was attributed to higher commodity prices, the pork barrel issue, and the growing concern over the peace and order situation in Mindanao.
The overall consumer confi dence index (CCI) is measured by the indices of consumer sentiment on the country’s economic condition, their family fi nancial situation and family income. Based on the results of the Consumer Expectation Survey, consumers’ outlook on the country’s economic condition in 4Q2013 fell drastically to -38.7% from -7.4% in 3Q2013 and from -9.6% in 4Q2012. This has been the lowest for the past 10 quarters, partly due to concerns over the alleged misuse of pork barrel funds. Meanwhile, consumers’ outlook on family income moderately fell to -6.8% from -5.0% in 3Q2013 and from -4.8% in 4Q2012, while the outlook on fi nancial situation weakened to -18.5% from -11.2% in the previous quarter and from -16.7% in the same period last year.
The BSP also attributed the weaker consumer sentiment to higher prices of basic commodities (e.g. rice and fi sh) brought about by adverse weather conditions in the 3rd quarter of 2013, which resulted in poor harvests of primary agricultural products like palay, tuba, copra, coconut, and fi sh; and concerns over the peace and order situation in Mindanao.
For 1Q2014, lower-income groups’ outlook on their family fi nancial situation fell (-3.0% from -1.5% in 1Q2013), while middle-income households are more optimistic (12.6% from 12.1%). The outlook of high-income families also improved (23% from 20.3%). However, the overall outlook for family fi nancial situation in 2014 fell (13.6% from 15.1% last year).
Despite a poor outlook on household fi nances next year, families are still willing to buy big-ticket items such as real estate (house & lot) and consumer durables (e.g. televisions, cellphones,
refrigerators, and furniture). Spending on basic goods and services (such as food, clothing and footwear, water, electricity, education, medical care, transportation, and communication) is expected to increase in the 1st quarter of 2014, due in part to slower infl ation. However, the central bank noted that unemployment and interest rates could go higher for the period under review.
The 4th quarter Consumer Expectations Survey was conducted between October 1 and 12, 2013. The respondents consisted of 2,747 households in Metro Manila and 2,765 households in areas outside Metro Manila. The response rate was 97.6%.
Despite a poor outlook on household fi nances next year, families are still willing to buy big-ticket items such as real estate and consumer durables.
CONSUMER CONFIDENCE INDEX
Source: Bangko Sentral ng Pilipinas, Consumer Confi dence Survey
MINING, OIL, & GAS
Gov’t starts tackling Tampakan issues
The government has fi nally started to address some of the issues hindering operations of the Tampakan copper-gold project. Valued at some $6 billion, the mining venture is potentially the biggest foreign investment the Philippines has ever had.
The interagency working group (IAWG), mandated to review the concerns raised by Sagittarius Mines, Inc. (SMI) regarding the Tampakan project (see box), submitted to the Mining Industry Coordinating Council (MICC) recommendations to resolve the underlying issues in the venture. However details were not yet released because the plan is still up for evaluation and approval of the MICC. The IAWG is led by the Department of Trade and Industry (DTI) and the Department of Environmental and Natural Resources (DENR), with representatives from the local government, agrarian reform and national defense departments.
The SMI requested the formation of the IAWG to put an end to the issues that delayed the project and obtain an environment compliance certifi cate (ECC). The IAWG solicited and considered the views of various stakeholders including the Offi ce of Solicitor General, the National Commission on Indigenous Peoples and the Union of Local Authorities of the Philippines.
One of the issues hounding the project is the presence of farmers with certifi cates of land ownership awards (Cloas) within the mining tenement of SMI. The Cloas were distributed to the benefi ciaries of the Comprehensive Agrarian Reform Program (CARP) thus converting portions of the land to “agricultural” and hence “off limits” to mining. A petition to cancel 4 out of the 5 Cloas awarded was submitted to the Department of Agrarian Reform, with a decision expected to be made this year. If the petition for reversal is granted, the Cloas will be nullifi ed and the land will no longer be “off-limits” to mining activities.
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Philippine ANALYST December 2013
Another major issue is the presence of an Environmental Code passed by the South Cotabato government, which does not allow open-pit mining in the province. However, the Philippine Mining Act of 1995 allows open-pit mining which is considered by mining fi rms as the safest way to extract precious metals. A consensus that makes local laws consistent with national laws is necessary in order for the project to proceed. It is not known what recommendation the IAWG made on this but SMI expressed optimism that the issues and challenges faced by the Tampakan project will be addressed soon. However, the company cited other issues that are not in the scope of the IAWG (see box).
Due to delays in the project, SMI has reduced its expenditure to $1 million per month from the previously allotted $4 million per month. The company also cut down 85% of its 1,060 workers. SMI hopes to begin construction in 2015 and commence commercial operations in 2019. As part of their corporate social responsibility, the SMI will continue the conservation of indigenous communities and other social activities.
Indophil Resources, which holds a 37.5% interest in SMI together with GlencoreXtrata, welcomed the government’s effort to resolve the issues of the Tampakan mining project. If the MICC and IAWG come up with an acceptable resolution of the outstanding issues the project can fi nally go about. An acceptable resolution would reassure mining companies that the government’s announced principle of supporting responsible mining is backed by concrete action. Mining activity could then be revived, it all depends now on what the MICC fi nally comes up with.
The Tampakan site is considered as one of the world’s largest undeveloped copper and gold deposits. Over its 20-year life, the project has the potential to generate 12,000 jobs (10,000 during the peak of the construction phase and 2,000 during the operations phase), contribute P300 billion in taxes and charges to the national government and the local government of South Cotabato, and pay P40 billion in royalty and direct contributions to local communities and indigenous groups.
Australian fi rm discovers new oil fi eld
An Australian oil exploration fi rm has discovered a new oil fi eld on the shore of Cebu, but it still needs to undergo more fl ow tests to see its commercial viability. Meanwhile, the Galoc oil fi eld’s output has more than tripled compared to its previous production.
The Department of Energy (DOE) has formally recognized Malolos-1 oil well on the shore of Cebu as an oil discovery by Australian company Gas2Grid Ltd. The DOE approved the company’s application to extend its Service Contract (SC 44) for 1 year starting January 28 in order to conduct tests that will determine if the oil fi eld has substantial reserves.
Gas2Grid discovered Malolos Oil Field last November close to land unlike most of the other oilfi elds in the country. The SC 44 covers 750 square kilometers in central Cebu and has 2 oil-bearing wells (Malolos-1 and Malolos-4) about 500 meters of indicative vertical closure. Gas2Grid said that an initial assessment showed that Malolos Oil Field has a potential oil volume of 4 million to 42 million barrels. The company also noted that Malolos-1 has the capacity to produce 100 to 200 barrels of oil per day. Transporting its oil will be cost-effective because of its proximity to the land.
The cost of oil production tests is estimated between $500,000 and $1 million. Gas2Grid will seek approval for a 25-year commercial production once it has proven that the oil fi eld is commercially viable. The DOE expects the new oil fi eld to strengthen the country’s energy security and pledges all the necessary support to advance its development. As of 2012, total undiscovered oil equivalent in the country is around 8 billion barrels. Of which, 18% is estimated to come from Northwest Palawan, 17% from Southwest Palawan, 16% from the Visayan Basin, 11% from Central Luzon and 10% from Mindoro-Cuyo Basin.
SMI hopes to begin construction in 2015 and commence commercial operationsin 2019.
Confl icts between certifi cate of land ownership awards and Tampakan mining tenements
Potential liabilities for environmental damages arising from project operations
Open-pit mining ban in South Cotabato
Processing of free and prior informed consent of aff ected indigenous communities
CENTRAL ISSUES IN THE TAMPAKAN COPPER-GOLD PROJECT
Local government endorsements
Permits for tree-cutting
Water supply, discharge, building and explosives
Access through forests and options for compulsory land acquisition
Tenement consolidation
Security of operating environment
Industry’s fi scal regime
OTHER ISSUES THAT ARE NO IN THE SCOPE OF THE IAWG
Source: Various press releases.
Source: Various press releases.
An initial assessment showed that Malolos Oil Field has a potential oil volume of 4 million to 42 million barrels.
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Philippine ANALYST December 2013
Banking threats, both online and mobile, are triggered through fake banking apps.
Malolos-1 has the capacity to produce 100 to 200 barrels of oil per day.
The Galoc oil fi eld off Northwest Palawan operated by Australian fi rm Otto Energy Ltd. is now producing 14,500 barrels of oil per day from 4,500 barrels after adding 2 more wells to the 2 existing wells on-stream. The effort is expected to extend Galoc’s shelf-life beyond 2020. Galoc already produced 11 million barrels of oil since it was commissioned in 2008.
I.T. UPDATE
More cyber-attacks to be expected in 2014
Information Technology experts warn that cyber-attacks will continue to increase both in frequency and complexity in 2014. The Philippines’ vulnerability to cyber-attacks shows how weak the current system is, and that stronger measures are needed to properly address these threats.
A report called “Blurring Boundaries: Trend Micro Security Predictions for 2014 and beyond” stated that the cyberspace will experience stronger attacks in 2014, such as malicious softwares for mobile systems and mobile banking (see box). A cyber-attack is defi ned by the U.S. National Research Council as a deliberate action to alter, disrupt, or destroy computer systems or the information and programs within these systems. The Magna Carta for Philippine Internet Freedom (MCPIF) bill and the group Democracy.Net.PH added that a cyber-attack is a deliberate attempt to violate the security policy of a system using
the internet or information and communications technology (ICT). The Philippines is no stranger to cyber-attacks. In the past 2 years
alone, private individuals, organizations, and even the government have been victimized. Hacking of government websites became rampant during the period (see table). Some of the targeted agencies include both local government units and national agencies.
According to cyber experts at the Globe Business Enterprise Innovation Forum last year, online attacks in recent years have become more political in nature. Statistics show that the top global sources of cyber-attacks are China (12.5%), U.S. (12%), and the Netherlands (4.5%); and the top global destinations are U.S. (22.7%), China (21.9%), and France (5.3%). Meanwhile, the top sources of cyber-attacks in the Philippines came from China (25.3%), U.S. (6.4%), and Spain (5.2%).
The danger behind the attacks should not be underestimated. The “ILOVEYOU” virus in 2000 affected 45 million computers worldwide while damage reached $10 billion. Attackers can control the scale of damage, posing a serious threat both to individuals and businesses. Paralysis of banking and fi nancing systems, for instance, can cost millions of dollars every minute.
The DOST Information and Communications Technology Offi ce (DOST-ICTO) admitted that recent attacks on government websites show that more secure web hosting is needed. Currently, the Philippines trails its Southeast Asian neighbors in terms of security of internet servers; enactment of laws relating to ICTs; and the political and regulatory environment (see table).
SOME RECORDED CYBER-ATTACKS IN THE PHILIPPINESDATE DESCRIPTION
April 21, 2012“Occupy Philippines” Alleged Chinese hackers defaced the website of the University of the Philippines, claiming that the Scarborough Shoal is a Chinese territory. The group Anonymous retaliated and launched several attacks on several Chinese websites.
Sept. 26, 2012 Government websites were attacked to protest the controversial provisions (e.g. p-libel) of the Cybercrime Prevention Act of 2012.
Oct. 1, 2012 “Bloody Monday”Government websites were attacked; hackers asked for a revision of the Cybercrime Law.
May 10, 2013 A group of hackers called AnonTAIWAN hacked the Philippine offi cial websites, asking the Philippine government to apologize to Taiwan. This caused inconveniences during the Philippine general elections.
Nov. 3, 2013 Anonymous Philippines hacked 115 government websites and asked the government to abolish the pork barrel system.
ICT STATISTICS OF SOME SOUTHEAST ASIAN COUNTRIES
LAWS RELATING TO ICTS SECURE INTERNET SERVERS/MILLION POPULATIONPOLITICAL AND REGULATORY
ENVIRONMENTRank /144 Value Rank /144 Value Rank /144 Score
Indonesia 58 4.2 103 3.4 82 3.6
Malaysia 23 5.2 57 54.5 24 4.9
Philippines 66 4.1 97 7.5 98 3.4
Singapore 2 5.8 22 607.3 1 6.0
Thailand 80 3.8 83 16.6 81 3.6
Vietnam 92 3.7 101 4.7 85 3.5
Source: various news clips
Source: The Global information Technology Report 2013
A Department of ICT is necessary.
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Philippine ANALYST December 2013
Mobile banking will suff er more “man in the middle” attacks; basic 2-step verifi cation will no longer be suffi cient.
In 3Q2013, the infection count in online banking reached 200,000. Banking threats, both online and mobile, are triggered through fake banking apps. Authentication numbers are also intercepted through mobile malware like PERKEL and ZITMO. Android, which will remain to be the most dominant operating system in the market, is predicted to have 3 million malicious and high-risk apps by the end of 2014. Google released “Android Kitkat” to address this problem, but not all users can take advantage of the new security feature because of the system’s heavily fragmented update process.
Cybercriminals will increasingly use targeted-attack-type methodologies.
“Targeted attacks” are those characterized by persistence and stealth. Facebook will become vulnerable to a “watering hole attack” due to an iPhone developer site. This kind of attack infects a page that is deemed attractive for the desired target. Attack vectors will rely not only on e-mail, but also on mobile devices.
At least 1 major data breach incident a month. There will be intensifi ed attacks on widely used but unsupported software like Java 6 and Windows XP.
Data remains a “top prize” in cyber-attacks. Applications became vulnerable to data breaches: Adobe compromised 150 million users; Evernote 50 million users; and Yahoo! Japan 22 million users. Windows XP will experience more attacks because Microsoft will offi cially end its support for the system in 2014, making computers running the system 6 times more vulnerable to infections Around 20% of users still run Windows XP, and it still has a current install base of over 300 million computers inside corporations.
Law enforcement will be signifi cantly challenged.
Cybercrime is diffi cult to address because it diff ers from a “regular” crime. Investigations may involve diff erent states and countries, which have varied sets of laws and protocols. Law enforcement agencies may fi nd it more diffi cult to track criminals because they may not have enough knowledge or experience to deal with cybercrime, and the increased anonymity of criminals. Third world countries are even more behind.
Gamers are the “new big fi sh”.
Targeting gamers become more attractive because of their growing number and their hardware. The gamer base is expected to reach 165 million by 2017 and gamers use computers with higher processing capabilities to handle the game applications. However, this processing power can be exploited for cryptocurrency, which is a digital medium of exchange.
Secure web hosting is needed in the country.
TREND MICRO SECURITY PREDICTIONS FOR 2014
The Integrated Government Philippines (iGovPhil), the DOST offi ce in charge of the government’s hosting service, said that a web development team is currently working on initiatives to strengthen the country’s online defenses. These initiatives must come sooner than later. An integrated approach is essential in ensuring that the country is well-protected against cyber-attacks. A well-funded, well-manned Department of ICT can play a key role in achieving this but President Aquino has been reluctant to certify the bill creating a DICT as urgent. The proposed measure must be enacted this 16th Congress.
2 new BPO buildings open in Ortigas
Two new business process outsourcing (BPO) offi ce buildings will open in the 1st quarter of the year in the Ortigas Central Business District as more BPO companies increase the demand for offi ce space. The BPO industry accounts for nearly 80% of the annual demand for new offi ce space.
The 2 new offi ce buildings to be opened in the Ortigas Central Business District (CBD) are Cyberscape Alpha located on Garnet and Sapphire Roads and Cyberscape Beta located between Topaz and Ruby Roads (see table). Both have been developed by Robinsons Land Corporation and offer a gross fl oor area of 80,000 square meters (sqm).
Real estate services fi rm Jones Lang Lasalle (JLL) considers the Ortigas Central Business District as a “highly conducive
location” for BPO companies. It is close to residential areas like Quezon City, Pasig, San Juan, Marikina, Parañaque, Cainta, and Taguig. It is also near universities. This gives the Ortigas CBD an edge as it infl uences the employment choices of potential BPO agents. Ortigas is also ideal for cost-sensitive fi rms because lease rates in the area are lower (Php 567 per sqm) than other business districts like Makati (Php 902 per sqm) and Fort Bonifacio (Php 770 per sqm).
Pinnacle Real Estate Consulting Services Inc. reported that BPO fi rms occupied most of new offi ce spaces in 2013. Thus, decreasing the vacancy rate in key business districts in Metro Manila (see table). The industry accounts for about 80% of yearly take-up in offi ce space. JLL recorded an 18% increase in offi ce space demand from 360,000 sqm in 2011 to 425,000 sqm in 2012. BPO companies comprised 325,000 sqm (77%) of the demand in 2012, while non-BPO companies accounted for only 100,000 sqm.
But because of the strong demand for office space, the average lease rates of prime and grade A offi ce space has increased significantly. This is one of the primary reasons cost-sensitive fi rms move to areas that offer lower lease rates like the Ortigas CBD. Residential properties, convenience stores, and coffee shops also benefit from the expansion of BPO fi rms created in the Ortigas CBD.
Cyberscape Alpha and Cyberscape Beta are expected to be taken up quickly as no other new space is available in the Ortigas Center. Colliers International Philippines’ forecast indicates that only Alabang will have increased offi ce space supply in 2014, while more offi ce space will be available by 2015 in most prime business locations except Makati CBD and Alabang (see table).
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39BUSINESS
Philippine ANALYST December 2013
The Ortigas Central Business District (CBD) was seen as a “highly conducive location” for BPO companies.
NEW BPO BUILDINGS IN ORTIGAS CBDCYBERSCAPE ALPHA CYBERSCAPE BETA
CLASS CLASS A CLASS ATypical fl oor area 2,033.94 sqm 1,480.66 sqm
Architect Jose Siao Ling and Associates Jose Siao Ling and Associates
Number of fl oors 26 37
Number of offi ce fl oors 21 28
Access 30-45 minutes to and from airport; 3 minutes to EDSA; 5 minutes to Ortigas MRT station and near other public transportation terminals.
PEZA Yes Yes
PRIME AND GRADE A OFFICE STATISTICS IN KEY BUSINESS AREAS IN METRO MANILA
LOCATION VACANCY (%)2Q2012AVE. LEASE RATE PER SQM
(PHP) 2Q2012VACANCY (%)
2Q2013AVE LEASE RATE PER SQM
(PHP) 2Q2013Makati 3.5 832 4.3 902
Fort Bonifacio 2.2 762 0.9 770
Ortigas 5.7 562 3.7 567
Alabang 0.6 562 1.3 587
Quezon City 0.2 672 0.1 609
Source: Robinsons Offi ces website
Source: CBRE Philippines Metro Manila Marketview Report 2Q2012, 2Q2013
Source: Colliers International Philippines Research
*Manila, Pasay, Mandaluyong, Quezon City
The Ortigas CBD is near universities. This gives the CBD an edge as it infl uences the employment choices of potential BPO agents.
FORECAST OFFICE SUPPLY (NET USEABLE AREA)LOCATION END OF 2012 2013 2014 2015
Makati CBD 2,771,784 68,131 15,288 -
Ortigas 1,175,350 66,999 39,773 75,072
Fort Bonifacio 747,116 229,717 137,236 154,214
Alabang 303,866 31,131 87,210 54,030
Other locations* 6,184,963 551,985 424,274 515,786
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LIST OF BOI-REGISTERED PROJECTS
DECEMBER 2013
INDUSTRY ACTIVITY PROJECT COST (IN PHP MILLION)EQUITY
LOCAL/FOREIGN
AGRICULTURE, FISHERY, AND FORESTRY
Vranch Evergreen Corporation Producer of Virgin Coconut Oil, Coconut Flour, Coconut Water and Coconut Skimmed Milk 37.63 100% Filipino
Hacienca Macalauan, Inc. Producer of Virgin Coconut Oil, Coconut Water, Coconut Flour & Coconut Milk 120.17 100% Filipino
ELECTRICITY, WATER, AND GAS
Philippine Hybrid Systems, Inc. Renewable Energy Developer of 8x2 MW Wind Energy Power System (WEPS) Project under Renewable Energy Act of 2008 (RA 9513) 2,13695% Filipino 5% American
First Natgas Power Corp. Operator of 450MW Combined Cycle Natural Gas Power Plant 21,827.16 100% Filipino
REAL ESTATE AND PROPERTY DEVELOPMENT
Cebu Landmasters, Inc. Developer of Low Cost Mass Housing Project (Mivesa Garden Residences) 410.19 100% Filipino
Axeia Development Corporation Developer of Low Cost Mass Housing Project (Tierra Vista Ayana) 266.19 81% Filipino 19% American
TOURISM
Summit Hotel and Resort Specialist, Inc. Operator of Tourist Accommodation Facility (Sol Marina Resorts) 1,221.50 100% Filipino
TOTAL 26,018.84
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Philippine ANALYST December 2013
INDUSTRY ACTIVITY
APPAREL AND TEXTILE MANUFACTURES
O & G LEATHER MANUFACTURING CORPORATION Manufacture and production of leather items such as jackets, pants, bags and other similar products
AUTOMOTIVE TRADE
BYRNES MOTOR TRUST RESTORATION, INC. Automotive restoration, repair and conversions of vintage cars
CONSTRUCTION
FSPHIL CORP. Engage in contruction, enlarging, repairing or developing any work upon building, factories, houses and condominium
EDUCATIONAL SERVICES
NANUM TALKING ONLINE CORPORATION English tutorial center
ELECTRONICS
DBC TECHNOLOGIES CORP. Manufactures high quality RF integration circuts and microwave components used by telecommunications, satellite communications, etc.
Isensors, Inc. Manufactures process sensors and transmitters
Gramsmed Asia Int'l., Inc. Semiconductor, electronic equipment
ELOHIM INDUSTRIAL SALES, INC.Provides of engineering services such as Automation and Instrumentation, Electrical Services, Thermal Scanning, Energy Saving System, Motors & Transformers and Safety Products.
Micro Contact Solution Co., LTD. Representative Offi ce Provider of technology products and supply chain services such as semiconductor interconnect devices and testing
FINANCIAL INTERMEDIATION
Rizal Commercial Banking Corporation (RCBC) Banking services
Metropolitan Bank and Trust Company (MBTC) Banking services
FOOD AND BEVERAGE MANUFACTURES
JELFARM FRESH PRODUCE ENT. Supplier of fresh and frozen fruits and vegetables
HOTEL, RESTAURANT, AND LEISURE SERVICES
CAFE TRE ITALIANO COFFEE SHOP Coff ee shop
Kitchen Lovers Cafeteria Restaurant/Café
VENN'S WINE CLINIC Wine-bar
CENTRAL SUMMIT INTERNATIONAL LEISURE HOTEL, INC. Leisure services
Viet Garden Authentic Vietnamese cuisine Food restaurant
Kenjo Eatery Canteen operations
JackRoseKarl Canteen Canteen operations
JB & F Fastfood Fast food/food restaurant
J.E. Domingo's Three-in-One Food Cart (Sutherland Global Services, Philippines, Inc.) Food services
Jimei Travel Clark Leisure services
PARIS CITYCAFE CORPORATION doing business under the name and style of GUSTAV CAFE Café/Coff ee shop
MEILEE SAMGYUPSAL AND YAKINIKU HOUSE Food restaurant/Café
LERMA M. BONGON ENTERPRISES (LUGAW REPUBLIC) Food restaurant
BASTEVE’S RESTAURANT (UNCLE CHEFFY) Food restaurant
Harlan's Canteen Canteen operations
PROJECTS APPROVED BY CLARK DEVELOPMENT CORPORATIONThird Quarter 2013 (July to September)
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Philippine ANALYST December 2013
MEDICAL AND HEALTH SERVICES
IMOBILE HEALTHCARE SERVICES, INC. Health services
Britannia Medical Corporation A medical center that off ers sophisticated diagnostic and therapeutic care in medicine and surgery
Access Point Medical Asia Corporation Manufactures medical devices
CFZ Semitool, Inc. Surgical sutures and other medical devices such as cutting needle, surgical blade, etc.
MISCELLANEOUS MANUFACTURES
Jaineville Supplier of aircraft seats and other aviation products
OFFSHORING AND OUTSOURCING
AUSPHIL SOLUTIONS CORPORATION BPO/Call center operations
INVENTASIA PHILIPPINES, INC. BPO service provider
iTOP 126, INC. Back-up support offi ce, BPO
BizSolv Asia, MPC Management consultancy and BPO fi rm
Z Getcare Systems, Inc. Software development and information system dev't
Philwave, Inc. Call center operations
S-CORP PHILIPPINES, INC. (formerly: Momentum Data East-Philippines, Inc.) BPO and consulting fi rm
TWISTRESOURCES, INC. software development, web and mobile development, IT system
SV Human Resources, Inc. BPO services
OTHER BUSINESS SERVICES
HelpPhilippineSchools Foundation, Inc. Foundation/educational
PENTRAVEL TOURS PHILIPPINES CORPORATION Travel agency
Mustang Security Agency, Inc. Provides professional and reliable security services
SERVICE RESOURCES, INCORPORATED Manpower services
GOLDEN CHIPS SERVICE COOPERATIVE Cooperative
STAR BOARD MANPOWER Manpower services, staffi ng and outsourcing
ASIATEL SALES & DISTRIBUTION INC. Offi ce space (buying, selling, distribution of cellular, computer electronic products)
Evertrust Business Solutions, Inc. Recruitment agency
D & Y Laundry Washing, drying and pressing of clothing and textiles
Jetfl ight Aviation Services Aviation Service Provider
KM C&S CLARK PHILIPPINES INC. Service-Oriented
FINETEC.PH CORP Service-Oriented
Dynasty Holdnet Group, Inc. Service- Oriented
REAL ESTATE AND PROPERTY DEVELOPMENT
Wachovia Realty & Development, Inc. Operates real estate properties
RECYCLING AND WASTE MANAGEMENT
METRO CLARK WASTE MANAGEMENT CORPORATION Industrial waste management/recycle
Tsong-Kai Enterprises Co. Ltd. Pyrolysis plant for waste plastic
STORAGE AND WAREHOUSING
AGILITY INTERNATIONAL LOGISTICS, INC. Freight forwarding, transportation, warehousing and supply chain
ASPAC International, Inc. Offi ce (freight forwarding)
Eagle Express Lines, Inc. Freight forwarding operations and related activities
ELEMATEC PHILIPPINES, INC. Business of trading and distributing goods on a wholesale basis
KWALITY PHILFOOD INC. exporting famous Filipino food and non-food products
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43BUSINESS
Philippine ANALYST December 2013
TRANSMODAL INTERNATIONAL, INC. In-bound and out-bound cargo and freight handlers also off ers trucking, warehouse spaces, distribution and document clearance assistance
Seneca Tobacco Philippines, Inc. Logistic services
Lucky Dong Fei Company LTD Logistic services
F.M.C.G. Phils. Int'l. Trading Corporation Logistic services
"K" Line Logistics (Phils.), Inc. Logictics, Freight forwarding operations and related activities
DHL Global Forwarding Freight forwarding operations and related activities
J-PAC LOGISTICS, INC. Logictics, Freight forwarding operations and related activities
SHI CHENG FREIGHT FORWARDING CORPORATION Freight forwarding operations and related activities
TRANSPORT SERVICES
DNS Shuttle Service (Clark), Inc. Provides shuttle bus transport
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44 BUSINESS
Philippine ANALYST December 2013
DATA YEAR-AGOLEVELGROWTH RATE
(%)
MOTOR VEHICLE SALES 16,800 15,081 11.4
PASSENGER CAR SALES 6,128 4,498 36.2
COMMERCIAL VEHICLE SALES 10,672 10,583 0
BUSINESS CLIMATE INDEX
FOREIGN DIRECT INVESTMENTBalance of Payments Concept; JAN-SEP 2013
LEVEL (US$ million)
SOURCE CURRENT YEAR AGO YEAR-ON-YEAR% CHANGE
TOTAL FDI 3,108 2,332 33.26Equity Capital 589.36 1,216.00 -51.53
Reivested Earnings 535.97 788 -31.98
Debt Instruments 1,982.23 328 504.34
UNIVERSAL AND COMMERCIAL BANK’S LOANS OUTSTANDING TO THE REAL ESTATE SECTOR (P Bn)MARCH 2013
SEP-2013 % TO TOTALRE: LOAN SEP-2012% TO TOTALRE: LOAN
RESIDENTIAL 188.88 30 142.56 33
COMMERCIAL 438.52 70 286.3 67
MOTOR VEHICLE SALESOCTOBER 2013
000
500
0
500
000
500
000
500
000
FDI:BOP CONCEPT US$ Million
DATA INDEX
YEAR-ON-YEARGROWTH
YEAR-TO-DATE
GROWTH
Volume of Production Index (VoPI) 116.8 18.3 7.7
a. Food 130.9 4.1 0.6
b. Beverage 119.4 36.3 3.9
c. Tobacco 7.4 37.0 -9.6
d. Textile 35.8 -14.4 -32.4
e. Footwear and Wearing Apparel 25.8 -27.3 -18.8
f. Wood and Wood Products 76.0 21.6 1.1
g. Furniture & Fixtures 774.1 175.4 68.1
h. Basic Metals 131.6 52.0 40.0
i. Iron and Steel 96.2 48.9 11.0
j. Non-ferrous Metals 219.2 53.3 78.0
k. Fabricated Metal Products 216.6 -18.1 -10.4
l. Machinery Excluding Electrical 21.1 -13.9 1.7
m. Electrical Machinery 86.2 -9.0 -0.5
n. Transport Equipment 101.6 -37.4 -20.7
o. Other Mfg Industries 96.5 -42.4 -39.4
p. Paper & Paper Products 65.7 -13.7 -12.0
q. Publishing & Printing 52.2 -6.8 -13.6
r. Leather Products 4.7 104.3 15.1
s. Rubber Products 249.5 15.7 -3.3
t. Chemical Products 301.0 144.9 77.3
u. Petroleum Products 48.9 -4.1 -14.0
v. Non-Metallic Mineral Products 162.4 23.6 3.2
w. Glass & Glass Products 141.6 1.6 8.3
x. Cement 161.7 11.2 -1.8
y. Misc. Non-Metalic Mineral Products 172.9 65.3 9.0
VALUE OF PRODUCTION INDEX (VAPI) (2000=100) 178.8 10.7 -0.1
AVERAGE CAPACITY UTILIZATION 83.4 -16.9 83.1
INDUSTRIAL PERFORMANCE (2000=100) AUGUST 2013
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45BUSINESS
Philippine ANALYST December 2013
BUSINESS CLIMATE INDEX
LABOR STRIKES
VISITOR ARRIVALSJANUARY-AUGUST 2013
SURVEY ON THE MONTHLY OCCUPANCY RATES & LENGTH OF STAY
VISITOR ARRIVALS GROW 11% AS OF SEPT 2013
The infl ow of visitor arrivals in the Philippines is showing a steady growth rate as of September 2013 at 11.40% from the 11.28% growth recorded in August. Total visitor arrivals registered in the period is 3,354,987. Of this total, 4.39% or 154,030 visitors are Filipinos residing abroad.
Korea remains the top source market followed by the U.S. and Japan. Visitors coming from Korea amounted to 908,881 (25.90% share), which grew by 20.71% as of August. The U.S. market placed 2nd with 497,748 visitors (14.18%) while the Japanese market ranked 3rd with 329,008 visitors (9.38%).
HOTEL OCCUPANCY DECREASES TO 67% IN 2012
In 2012, average occupancy rate of hotels decreased to 67.25% from 69.26% in 2011. De Luxe hotels posted the highest occupancy rate with 71.49%, down by 0.93 percentage point from 2011. Standard hotels registered the 2nd highest occupancy rate at 64.82%, which also slipped by 3.48 percentage points. Meanwhile, First Class hotels outranked economy hotels with an average occupancy rate of 58.04%, lower by 4.1 percentage points. Economy hotels had the least occupancy at an average rate of 53.44%, down by 5.14 percentage points in 2011.
1 STRIKE IN JUNE
A strike was recorded in June 2013 which involved 400 workers equivalent to 1,200 man-days lost. Meanwhile, there is a total of 104 notices of strike/lockouts since January. In 2012, 3 strikes were recorded involving 209 workers, which is equivalent to 797 man-days lost. Meanwhile, 184 notices of strike were fi led that year.
2012 2011 2012/2011
JAN-DEC JAN-DEC GROWTH RATE
De Luxe Hotels
Occupancy Rates 71.49 72.36 -1.20
Length of Stay 2.92 3.02 -3.28
First Class Hotels
Occupancy Rates 58.05 61.04 -4.88
Length of Stay 2.30 2.46 -6.70
Standard Hotels
Occupancy Rates 64.82 66.87 -3.06
Length of Stay 2.38 2.35 1.06
Economy Hotels
Occupancy Rates 53.44 59.22 -9.76
Length of Stay 2.13 1.92 11.18
STRIKES DECLARED WORKERS INVOLVED MAN-DAYS LOST (000)
2013 2012 2013 2012 2013 2013
JAN 0 0 - - - -
FEB - - - - - -
MAR - - - - - -
APR - - - - - -
MAY - - - - - -
JUN 1.00 - 400 - 1,200 -
JUL - 1.00 - 20 - 160
AUG - - - - - -
SEP - - - - - -
OCT - 2.00 - 189 - 637
NOV - - - - - -
DEC - - - - - -
TOTAL 1 3 400 209 1,200 797
COUNTRY 2013 2012 % CHANGE RANK
KOREA 822,128 679,123 21.06 1
USA 457,819 446,684 2.49 2
JAPAN 293,445 278,017 5.55 3
CHINA 288,826 179,879 60.57 4
AUSTRALIA 131,977 118,050 11.80 5
SINGAPORE 114,018 95,913 18.88 6
TAIWAN 103,306 155,675 -33.64 7
HONGKONG 86,396 77,506 11.47 8
CANADA 84,353 81,093 4.02 9
UNITED KINGDOM 80,121 74,696 7.26 10
MALAYSIA 72,409 70,586 2.58 11
GERMANY 46,781 44,534 5.05 12
OVERSEAS FILIPINO 144,299 148,916 -3.10
OTHERS 455,025 408,164 11.48
TOTAL 3,182,916 2,860,848 11.26
0
500
1000
1500
2000
2500
3000
3500
4000
MAN-DAYS LOST
0
2
4
6
8
10
12
STRIKES DECLARED
0
100
200
300
400
500
TOURISM ARRIVALS