61 BUSINESS
Doing business in the PH easier The Philippines has made it easier for foreign and local investors to start a business in the country. This is according to the latest report of World Bank-International Finance Corporation (WB-IFC) entitled “Doing Business 2017: Equal Opportunity for All.”
ased on the 2017 Doing Business report, the Philippines climbed 4 notches from 103rd in 2016 to 99th in 2017 with a 60.40 score among 190 countries worldwide. The increase was driven by changes such as the implementation Bof an online tax payment system. Since 2011, the Philippines has gained 49 spots in the Doing Business report. The WB-IFC report measures and tracks business regulations of 190 countries across 10 indicators namely: hh Starting a Business; hh Dealing with Construction Permits; hh Getting Electricity; hh Registering Property; hh Getting Credit; hh Protecting Minority Investors; hh Paying Taxes; hh Trading Across Borders; hh Enforcing Contracts; and hh Resolving Insolvency. Among the 10 indicators, the country performed well on of corporate transparency index, increasing the transparency of 4 indicators including Protecting Minority Investors, Dealing building regulations, and the introduction of an online system for with Construction Permits, Paying Taxes, and Enforcing filing and paying health contributions.“This is important for the Contracts. Minor drops were recorded in Getting Credit, down economy to ensure small and medium enterprises can flourish 9 (from 109 to 118), Starting a Business – down 6 (from 165 and create jobs for millions of Filipinos,” the World Bank added. to 171), Getting Electricity – down 3 (from 19 to 22), and But the Philippines still trails its other ASEAN neighbors, Resolving Insolvency – down 3 (from 53 to 56). The country ranking 7th out of 10 countries. The country was ahead of recorded no change in Registering Property and Trading Across Cambodia (131st), Laos (ranked 139th), and Myanmar (170th) Borders with rankings of 112 and 95, respectively (see table on but was outranked by Singapore (2nd), Malaysia (23rd), PH Performance in 2017 and 2016 Doing Business Report). Thailand (46th), Vietnam (82nd), and Indonesia (91st). The The World Bank said that “authorities have worked toward counry, however, continues to lag behind the regional average simplifying business regulations in the country”, which drove the of 61.97, emphasizing the need for better support from the country’s latest performance in the Doing Business report. Among government in order to compete with other ASEAN countries the reforms introduced this year in the Philippines were the extent (see figure on 2017 ASEAN Countries Doing Business Ranking).
Philippine ANALYST BUSINESS October 2016 62 BUSINESS
performance in 2017 and 2016 doing business report Indicators 2016 2017 Change Overall Ranking 103 99 +4 Starting a Business 165 171 -6 Dealing with Construction Permits 99 85 +14 Getting Electricity 19 22 -3 Registering Property 112 112 = Getting Credit 109 118 -9 Protecting Minority Investors 155 137 +18 Paying Taxes 126 115 +11 Trading Across Borders 95 95 = Enforcing Contracts 140 136 +4 Resolving Insolvency 53 56 -3
Source: WB-IFC 2017 Ease of Doing Business Report
2017 ASEAN COUNTRIES DOING BUSINESS RANKING
Singapore (Rank 2) 85.05
Malaysia (Rank 23) 78.11
Thailand (Rank 46) 72.52
Brunei (Rank 72) 65.51
Vietnam (Rank 82) 63.83
Regional Average (Rank 94) 61.97
Indonesia (Rank 91) 61.52
Philippines (Rank 99) 60.4
Cambodia (Rank 131) 54.79
Lao PDR (Rank 139) 53.29
Myanmar (Rank 170) 44.56
0 10 20 30 40 50 60 70 80 90
Source: WB-IFC 2017 Ease of Doing Business Report
Top 10 Ease of Doing Business Ranking in 2017
Rank Country Score
1 New Zealand 87.01
2 Singapore 85.05
3 Denmark 84.87
4 Hong Kong 84.21
5 Republic of Korea 84.07
6 Norway 82.82
7 United Kingdom 82.74 The country has climbed 49 spots in the 8 United States 82.45 Doing Business report since 2011. 9 Sweden 82.13 10 Macedonia 81.74
Philippine ANALYST BUSINESS October 2016 63 BUSINESS
WB-IFC DOING BUSINESS 2012 2013 2014 2015 2016 2017
74% 56% 60% 60% 60% 60% Ease of Doing Business Rank (136/183) (138/183) 108/183 97/183 103/183 99/190 Starting a Business Rank 86% (158) 66% (161) 66% (170) 67% (157) 69% (165) 69% (171)
Procedures (number) 15 16 15 16 16 16
Time (days) 35 36 35 34 29 28
Cost (% of income per capital) 19.1 19.2 18.7 16.6 16.1 15.8
Minimum capital (% of income per capita) 5.2 4.8 4.6 3.6 3.3 3.1
It takes 28 days to start a business in the Philippines.
Improvement is being undertaken.
Out of the 190 countries covered by this year’s report, The Department of Trade and Industry (DTI) has also signed New Zealand got the top spot, Singapore ranks second, a Joint Memorandum Circular (JMC) with the Department of followed by Denmark; Hong Kong SAR, China; Republic of the Interior and Local Government (DILG) and Department of Korea; Norway; United Kingdom; United States; Sweden; Information and Communication Technology (DICT) directing and Former Yugoslav Republic of Macedonia (see Table all cities and municipalities in the country to streamline business on Top 10 Ease of Doing Business Ranking in 2017). New permits and licensing systems (BPLS) using a revised standard. Zealand was 98 spots ahead from the Philippines in the latest The government’s action in streamlining the processes Ease of Doing Business ranking. Meanwhile, the world’s would bring significant improvement not only on the country’s top 10 improvers, based on reforms undertaken, were Brunei performance on Ease of Doing Business ranking but as well as to Darussalam, Kazakhstan, Kenya, Belarus, Indonesia, Serbia, the speed and efficiency of services rendered to Filipino citizens. Georgia, Pakistan, United Arab Emirates (UAE), and Bahrain. In terms of starting a business in the Philippines, the country ranks a miserable 171st out of 190 countries. It takes 28 days to start New foreign banks to enter PH banking a business in the country, compared to 21 days on average at the global level. The country requires 16 procedures, costs 15.8% of system income per capita, and a requirement of paid-in minimum capital With the passage of Republic Act (RA) 10641, amending of 3.1% of income per capita. When compared to its ASEAN neighbors, the country lags behind Malaysia (18 days), Vietnam RA 7721, foreign banks are now allowed to fully enter the (24 days), and Indonesia (25 days) in terms of starting a business. Philippine banking system. The implementation of the new Over the past 5 years, the country's performance this year is the RA is expected to improve the banking environment and ‘most improved’ (see Table on PH Doing Business Ranking). encourage greater foreign participation. Meanwhile, National Competitive Council (Philippines) co-chairman Guillermo Luz said that he expects a RA 10641, otherwise known as “An Act Allowing the Full “dramatic” increase in the Philippines’ ranking next year. Entry of Foreign Banks in the Philippines amending for the He cited legislative changes such as the amendments to purpose RA No. 7721” is intended to strengthen the quality of the Corporation Code and tax policies as having a positive competition of banks and develop innovations that will benefit the impact on the country’s future Doing Business ranking. public. Foreign banks can now acquire up to 100% of the voting In addition, the government also intends to implement stock of an existing bank, or invest up to 100% of the voting stock the nationwide online processing of business permits and of a new banking subsidiary incorporated under Philippine laws. licensing systems before the end of 2016. This will reduced Without RA 10641, only the top 150 foreign banks in the the processing time for new business registration from 5 days world or top 5 banks in its country of origin were allowed to to 1 ½ days to encourage more foreign and local investors. establish business in the Philippines. This means that under the old law, only 10 foreign banks were eligible to operate
Philippine ANALYST BUSINESS October 2016 64 BUSINESS
foreign banks approved to operate in the philippines after ra 10641 Name of Bank Country of Origin Date of Approval 1st Day of Operation
Sumitomo Mitsui Banking Corp. (SMBC) Japan February 2015 September 1, 2015
Shinhan Bank Co., Ltd. South Korea March 2015 October 19, 2015
Cathay United Bank Co., Ltd. Taiwan April 2015 October 2, 2015
Industrial Bank of Korea South Korea May 2015 November 6, 2015
Yuanta Commercial Bank Co., Ltd. Taiwan July 2015 -
United Overseas Bank (UOB) Singapore September 2015 -
Woori Bank Co., Ltd. South Korea May 2016 -
First Commercial Bank (FCB) Taiwan June 2016 -
Hua Nan Commercial Bank, Ltd. Taiwan October 2016 -
RA 10641 aims to strengthen the quality of competition of banks.
OBJECTIVES OF RA 10641
hh Attract foreign investments and serve as channels for the flow of funds and investments into the economy to promote industrialization. hh Encourage, promote and maintain a stable, competitive, efficient and dynamic banking and financial system. hh Provide a wider variety of financial services to Philippine enterprises, households and individuals. hh Contribute to the alleviation of unemployment in the country.
Non-Marketable Equity Quarter & Year Total Assets Gross Total Loan Portfolio Security-Net
3Q2015 15,916,950.00 12,903,345,719.60 200,000,000.00
4Q2015 31,833,900.00 20,168,338,361.07 358,587,352.39
1Q2016 47,750,850.00 23,425,252,370.09 1,989,364,110.95
2Q2016 47,750,850.00 24,299,823,375.58 13,784,817,368.94
Already 9 banks have gained approval from the BSP, 4 of which are now operating.
Philippine ANALYST BUSINESS October 2016 65 BUSINESS in the Philippines on top of the existing foreign banks (e.g. Higher VAT exemption for MSMEs CitiBank, HSBC, etc.) that were already long established in the country – given that the banks can prove that they were Part of the comprehensive tax reform proposed by the established, reputable, and financially stable. A new entity Duterte administration is to amend the value-added tax could only enter if 1 of the 10 accredited banks pulled out. (VAT) threshold exemption for small enterprises, thereby So far, there are already 9 banks that have been given benefitting the micro, small and medium enterprises approval from the Bangko Sentral ng Pilipinas (BSP), (MSMEs). pursuant to RA 10641 (see table on Foreign Banks Approved to Operate in the Philippines after RA 10641). As of December As part of the preliminary step of the Duterte administration to 2015, 4 are already operating, namely: (1) Sumitomo Mitsui pursue its comprehensive tax reform, the Department of Finance Banking Corp. (SMBC); (2) Cathay United Bank Co., Ltd.; (DOF) has submitted “Package One” to Congress. The package (3) Shinhan Bank Co., Ltd.; and Industrial Bank of Korea. includes reforms to lower personal income tax rates, adjust fuel “The entry of these banks to the Philippines could catalyze excise tax, broaden the VAT base, and restructure tax on automobiles. further innovation in our banking sector and we expect more According to Finance Secretary Carlos Dominguez III the to come in,” BSP Governor Amando Tetangco Jr. said. These aim of the reform is to: new entrants can reduce the banking industry’s structural hh Restore integrity in BIR’s frontline services; weaknesses, strengthen balance sheets, improve operational h efficiencies, and encourage innovation while being conscious h Broaden the tax base; and of risk exposures. The foreign banks that were approved hh Streamline document processing under RA10641 and have started operations have lived up One of the beneficiaries of the reform is the MSMEs which to the goals of RA10641 (see Objectives of RA 10641): are labeled as the “backbone of Philippine economy” by hh Attract foreign investments and serve as channels for the the DOF. These are the enterprises with asset sizes between flow of funds and investments into the economy to promote P3-P100 million and have less than 200 employees. Based industrialization. The accumulated investments in non- on a report by the Asian Development Bank (ADB), “SMEs marketable equity security-net (IMES) of the 4 new foreign stimulate domestic demand through job creation, innovation, banks rose by 200% from P15.9 million in 3Q2015 to P47.8 and competition.” Along with the manufacturing sector, these million in 2Q2016. This huge increase was brought about by enterprises initiate the robust growth in the Philippine economy. participation of these new foreign banks in facilitating the In 2014, employment via MSMEs contributed 30.5%, 25.5% flow of funds in terms of equity investments or additional and 6.8% jobs, respectively, compared to the 37.2% jobs capital for the establishment, expansion and/or continuous generated by large enterprises (see Employment % Share). operation of various companies in the country. MSMEs also constitute approximately 60% of the country’s hh Encourage, promote and maintain a stable, competitive, exporters and accounts for 25% of the total export revenues. efficient and dynamic banking and financial system. Total Unfortunately, many MSMEs opt to remain “incognito assets also rose up by 88.3% from P12.9 billion in 3Q2015 to or underground” because regulation compliance is a tedious P24.3 billion in 2Q2016. The rise in total assets was brought process, Senator Ralph Recto explained. In 2013, he proposed about by the increase in the number of foreign banks operating Senate Bill No. (SB) 253 or “Jobs Act of 2013.” the bill is in the country. The development and implementation of intended to exempt selected MSMEs from VAT, income tax, banking/financial technology and support systems also helped percentage tax and avail other incentive packages. Sen. Recto in attaining the objective. believed that it would be more productive to invest their time in “harnessing their growth and job creation potentials” rather than hh Provide a wider variety of financial services to Philippine focusing in the registration process. The bill was consolidated enterprises, households and individuals. With the increase of with Republic Act (RA) 10644 or “Go Negosyo Act” signed foreign banks, gross total loan portfolio (TLP) also increased by former President Benigno Aquino III. But the law that aims by 6792.4% from P200 million in 3Q2015 to P13.8 billion in “to strengthen MSMEs to create more job opportunities in the 2Q2016. “Foreign banks continued to support the financing country” excluded most of the packages and incentives introduced needs of local residents and companies, home country by Sen. Recto including the proposed tax exemptions. The existing clients operating in the Philippines as well as the National laws support and strengthen the potential of MSMEs. However, Government.” it failed to address the complexity of the country’s tax process hh Contribute to the alleviation of unemployment in the country. which hinders the growth of these small businesses. Thus, the To sustain the operations in the country, foreign banks Duterte administration recommended reforms to address it. (including pre-RA 10641) employed a total of 7,088 personnel, At present, the VAT exemption threshold for “any person or of which 6,959 or 98.2% were Filipinos. entity who, in the course of his trade or business, sells, barters, Looking ahead, the banking sector will continue to expand exchanges, leases goods or properties and renders services” in the coming years amid modest and uneven economic is P1,919,500.00. The exempted entities, which include many growth. “The market is continuously evolving and we need MSMEs, are mandated to pay a 3% percentage tax instead of to be sure that the banking responds to its stakeholders the 12% VAT. To improve the competitiveness of businesses and not the other way around,” BSP Gov. Tetangco noted. in the country, the DOF has proposed to increase the VAT exemption threshold from P1.9 million to P3million. This easing of tax regulation will effectively benefit MSMEs with Philippine ANALYST BUSINESS October 2016 66 BUSINESS
EMPLOYMENT % SHARE
30% 37%
7% 26%
Micro Small Medium Large
gross annual sales of P3 million and below and exempt them the issuance of registration certificates through registering in the from filing VAT returns. According to Finance Undersecretary PBR. The memorandum would link the process of issuing Tax Antonette Tionko argued, “while the proposal could result in Identification Number (TIN) and the other permits needed by the revenue losses for the government, its main objective was to MSMEs. The BIR will issue TIN and certificate of registration simplify the compilation process for SMEs and to safeguard upon registering in the PBR, and documents covered by secondary them from possible effects of the other proposed tax measures.” registration. Trade and Industry Secretary Ramon Lopez said this Bureau of Internal Revenues (BIR) Commissioner Caeser Dulay agreement “would bring more MSMEs into the formal economy said the government can mitigate the expected loss in revenue and would broaden the economy’s tax base”. Sec. Lopez added from the DOF proposal by generating an estimated revenue of P1 “(It) would help them access loans and gain more market access,” billion every year if they could get the MSMEs to register through With the government’s initiative to break down barriers to the Philippine Business Registry (PBR), which has a registration doing business, it is hoped that many young and new entrepreneurs fee of P500.Based on estimates from the Department of Trade will be encouraged to have a more innovative and creative and Industry. (DTI), around 2 million MSMEs are unregistered. mindset in starting-up businesses. This would, in time, produce To encourage more registration of MSMEs, DTI and BIR highly competitive products, goods, and services, which would signed a memorandum of agreement (MoA) which aims to hasten be an advantage for a developing country like the Philippines.
Philippine ANALYST BUSINESS October 2016 67 BUSINESS
MINING, OIL, & GAS hh BenguetCorp Nickel Mines Inc. (Sta. Cruz Nickel Mining Project); Metal production drops in 1H2016 hh Eramen Minerals Inc. (Sta. Cruz Mining Project); and hh LNL Archipelago Minerals Inc. (Sta. Cruz Mining Project) Metal production fell in the 1st half of 2016 compared to The reported zero nickel production of Wellex Mining the same period recorded in 2015. According to the Mines Corporation (Wellex Area II Nickel Mining Project), Oriental and Geosciences Bureau (MGB), the decrease in metal Vision Mining Phils. Corporation (Palhi Nickel Project) and production was due to sluggish metal price movement in Westernshore Nickel Corporation (Libjo Project-Phase 2) also the world market. contributed to the weaker performance. MGB noted that the zero production was partly due to poor metal price and on-going care The value of metallic mineral products in the 1st half of and maintenance works during the period. All 3 companies are 2016 reached P48 billion. It fell by 14% from P56 billion in located on Dinagat Island in Mindanao and are only into their the 1st halft of 2015. The suspension of mining operations in at 2nd year of commercial operation.Moreover, major producers least 20 mines upon order of the Department of Environment such as Rio Tuba Mining Corporation in Palawan; Taganito and Natural Resources (DENR) Secretary, the reported zero Mining Corporation in Surigao Del Norte; Platinum Group Metals production in some nickel mines and the sluggish global metal Corporation in Surigao del Norte; and SR Metals Inc. in Agusan price movement were the key factors for this weak performance. Del Norte all incurred production setback both in volume and value. During the period, gold was the best performer in the In terms of metal prices, precious metal silver, and the industry, accounting for 47% (P22.68 billion) of the total base metals copper and nickel, all registered a downward metallic production value. It was followed by nickel with 33% trend during the period. The average price of silver recorded (P16.08 billion) contribution and copper with 19% (P9.01 a decline of almost 5% from $16.59 per troy ounce to billion). MGB reported that direct shipping of nickel ore and $15.78 per troy ounce, while the price of gold rose slightly mixed nickel-cobalt sulfide accounted for the majority of nickel by 1% from $1,208.16 per troy ounce to $1,217.85. production since 2012. The remaining 1% or P47 million, came Copper and nickel averages’ for the 6-month period also from the collective values of silver, chromite and iron ore (see fell by 20% and 36%, respectively. Copper slipped from $2.66 1H2016 Share of Metals to Total Metallic Mineral Production). to $2.13 per pound, while nickel fell substantially from $6.16 Nickel ore and nickel product recorded sluggish production to $3.92 per pound year-on-year, lower by $2.24 per pound. during the period, which led to the poor performance of the MGB said that the minerals industry’s outlook for the 2nd metallic minerals industry. Nickel ore production posted a 30% half of 2016 and the following years remains challenging with the decline from 14,880,091 dry metric tons valued at P19.08 billion issuance of DMO 2016-01 or Audit of all Operating Mines and in 1st half of 2015 to 10,450,659 dry metric tons valued at P9.20 Moratorium on New Mining Projects released last July 2016. The billion in the 1st half of 2016. This implied a 4,429,432 dry metric audit covers all operating mines and mines under suspended and/or tons and P9.88 billion cutback in volume and value. Meanwhile, care and maintenance status, while the moratorium deals with the mixed nickel-cobalt sulfide output declined by 14% to 37,604 dry acceptance, processing and/or approval of mining applications and/ metric tons valued at P6.89 billion from 43,512 dry metric tons or new mining projects for all metallic and non-metallic minerals. valued at P9.23 billion in the same period last year (see Philippine The mining industry is expecting overall sluggish performance Metallic Mineral Production [H2016 versus 1H2015]). of the metallic sector in 2016 as 2 new nickel mines in Palawan MGB said that the decline in the production of nickel was due to (Berong Nickel Project of Berong Nickel Corporation and Toronto the suspension of mining operations of 4 nickel mines in Zambales: & Pulot Nickel Projects of Citinickel Mines and Development hh Zambales Diversified Metals Corporation (Sta. Cruz- Corporation) face suspension under the current audit. Candelaria Mining Project);
The mineral industry’s outlook for the 2nd half of 2016 and the following years remains challenging with the issuance of the DENR’s environmental audits
Philippine ANALYST BUSINESS October 2016 68 BUSINESS
1H2016 SHARE OF METALS TO TOTAL METALLIC MINERAL PRODUCTION
Silver, chromite, iron ore Copper 1% 19%
Gold 47% Nickel 33%
Gold Nickel Copper Silver, chromite, iron ore
Source: Mines and Geosciences Bureau (2016)
PHILIPPINE METALLIC MINERAL PRODUCTION (1H2016 vs. 1h2015)
1H2016 1H2015 % Change Mineral Commodity Unit Used Quantity Value Quantity Value Quantity Value PRECIOUS METALS Gold KGS. 12,191 22,679,145,662 10,261 17,359,601,063 19 31 Silver KGS. 20,316 433,282,454 13,983 314,017,585 45 38 BASE METALS Copper Concentrate DMT 177, 679 9,010,834,967 162,967 9,605,675,178 9 -6 Copper Metal Equivalent MT 44, 813 41,878 7 Mixed Nickel-Cobalt Sulfide DMT 37, 604 6,889,404,412 43,512 9,234,554,025 -14 -25 Mixed Nickel-Cobalt Sulfide (Metal) MT 21, 673 25,151 -14 Nickel Direct Shipping Ore DMT 10,450,659 9,195,628,843 14,880,091 19,076,508,016 -30 -52 Nickel Content of Ore MT 127,435 194,043 -34 Chromite DMT 3,894 29,281,376 12,464 90,922,826 -69 -68 Iron Ore DMT 6,549 12,273,594 70,068 157,343,684 -91 -92 TOTAL 48,249,851,308 55,838,622,379 -13.59
Source: Mines and Geosciences Bureau (2016)
Philippine ANALYST BUSINESS October 2016 69 BUSINESS
Last September 2016, the DENR announced the result of According to the IBPAP, Roadmap 2022 is its ‘most ambitious the mine audit conducted as per DMO 2016-01, recommending blueprint’ to date since it has a comprehensive plan for each of the suspension of 20 metallic mines due to supposed violations the industry’s sub-sectors – animation and game development, of several environmental and mining laws (See September contact center and business process management, global in- 2016 Analyst Mining Article: 20 more mining firms face house centers, health information management, and information suspension). The ongoing environmental audit of DENR is technology and software. All of these 6 sub-sectors are expected adversely affecting the mining industry, as the sector emphasizes to increase the industry's revenues and employment, which will this action would probably put the ‘industry to sleep’. impact the 6-year roadmap targets set by the IT-BPM industry The IBPAP said that the contact center industry/back office sector would continue to account for the biggest bulk of the revenues and employment, while the fastest growing sector would be animation. The previous 2 roadmaps (Roadmap 2010 and Roadmap I.T. UPDATE 2016) have been instrumental in growing the IT-BPM industry, according to the IBPAP. “With global trends focusing on IT-BPM industry targets $40Bn revenue by artificial intelligence, digital transformation, big data and new delivery models, it is important that the sector future proves 2022 itself. With this new roadmap, we aim to accelerate the industry even farther to prove that the Philippines is a future-ready The Philippine information technology-business process investment destination.” Danilo Sebastian Reyes, IBPAP board management (IT-BPM) industry is expecting to grow to as chairman and Genpact Philippines country manager, said. much as $40 billion in revenue by 2022 as it expands its By the end of 2016, the industry is expected to reach in the global market. The industry will thereby remain achieve $25 billion revenues and 1.3 million one of the major drivers of the Philippine economy. employees(see PH IT-BPM Revenues and Employment). Meanwhile, the government has shown full support for The Information Technology and Business Processing the development of the industry. According to Department Association of the Philippines (IBPAP), in partnership with of Information and Communications Technology (DICT) consulting firm Frost & Sullivan, has released its latest 6-year Secretary Rodolfo Salalima, the government, through the industry roadmap entitled, “Accelerate PH: Future-Ready DICT, will continue what it has started with the IT-BPM Roadmap 2022.” Under the new roadmap, the IT-BPM industry and that the DICT will maintain strong collaboration industry is seen to generate 1.8 million jobs by the end of with the industry. Sec. Salalima reiterated that all existing 2022, of which more than 500,000 will come from outside the contracts will be respected and continued until their full National Capital Region (NCR) and 73% are mid to high value implementation. Further, he called for the collaboration jobs. The IBPAP is also looking to hire more post-graduates between the government and the industry in developing the which will account for 16% of the total jobs generated by Philippines to become a “world-class ICT services provider.” 2022, as compared to only 7% of the total employment The only worry is President Rodrigo Duterte’s statements produced in 2016 (see IT-BPM Roadmap 2022 Targets). calling for separation from the U.S.. The U.S. is a top The new IT-BPM roadmap 2022 also aims to increase the country investor in BPOs. And President-elect Donald Trump industry’s global market share to 15% from 12.6% market share threatening to return jobs to Americans in the U.S. Both in this year. Manolito Tayag, vice-chairman of IBPAP’s Board threats are likely to be mitigated by commercial realities. of Trustees, said that it is a ‘significant growth for the industry’, Meanwhile, Philippine Economic Zone Authority (PEZA) since the global market is growing at only around 6% so the Deputy Director General Harriet Abordo added that PEZA will IT-BPM industry intends to get a larger share of that market. also continue to support the industry through tax incentives. The IT-BPM industry is also expected to: PEZA will coordinate with local governments particularly in hh Unlock human capital potential towards a higher skilled their future plans of regional development to align with the IT- workforce; BPM Roadmap need to expand outside of Metro Manila. While the Department of Trade and Industry (DTI) will persistently hh Enhance international competitive positioning; promote the IT-BPM industry to prospective investors through hh Accelerate inclusive growth through increased investments promotion programs, particularly on outbound missions, and programs in local government units; attendance at international conferences, and exhibitions. hh Strengthen government-industry collaborations; The commitment of the government to fully support hh Rejuvenate startup and small and medium enterprise would greatly impact the IT-BPM sector’s success ecosystem; and in achieving the industry’s target by the end of 2022. hh Increase adoption of technology to drive productivity and competitiveness.
Philippine ANALYST BUSINESS October 2016 70 BUSINESS
ph it-bpm revenues and employment IT-BPM revenues Year it-bpm employment (in Bn U.S. Dollars)
2009 8.25 444,811
2010 10.05 536,128
2011 12.07 679,464
2012 13.2 776,794
2013 15.5 900,000
2014 18.4 1,030,000
2015 22 1,200,000
2016 *25 *1,300,000
2022 *40 *1,800,000
*Forecasts only *Forecasts only 2016 - $25 billion (goal - 2016 BPO roadmap) 2016 - 1,300,000 (goal - 2016 BPO roadmap) 2022 - $40 billion (target - 2022 BPO roadmap) 2022 – 1,800,000 (target 2022 BPO roadmap)
The new IT-BPM Roadmap 2022 is the industry’s ‘most ambitious blueprint’.
The growth will come from contact centers, shared services and animation.
Philippine ANALYST BUSINESS October 2016 71 BUSINESS
Gov’t confident U.S. BPOs will remain in Ph Several economists, however, explained that it might be not be as easy as it seems for BPOs to leave the Philippines since The Duterte administration assured that the U.S. business they have already settled in the country for somtime. In relation process outsourcing (BPO) operations will remain in the to this, Communications Secretary Martin Andanar said the Philippines despite U.S. President-elect Donald Trump’s government remains confident that this would not happen since inward-looking economic policies. it would be in the best interest of American businessmen to keep their BPO operations in the country due to lower operating costs. “(They) know that they (would) save more here. The President-elect Trump ran under the premise that he salaries in the U.S. are (paid) per hour, ours are per day…Their would bring jobs back to the U.S. As part of his campaign businesses are more valuable here,” Sec. Andanar said. It should pronouncements, he put forward that he would heavily impose be recalled that outgoing U.S. Pres. Barack Obama also made taxes on U.S. companies that would outsource jobs abroad. this appeal when he was still a Senator in 2008, but it was not In a recently published report by Moody’s Investors Service, met with a positive response. Currently, the government is on a the credit rating agency stated that although the nature of policies “wait-and-see” approach on President-elect Trump’s policy with under the next U.S. administration is uncertain, it can be expected regard to BPO operations as “(this) is not a policy set in stone.” that “the countries that are most reliant on exports of high value- Meanwhile, the government has taken steps to enhance added goods and services, which would offer greatest onshoring the competitiveness of the industry’s workforce, as it shifts its potential, are more vulnerable to a potential shift in U.S. trade manpower structure. According to Sec. Andanar, the industry aims policies.” So in the event that President-elect Trump fulfills his to cater to more complicated requirements, as it climbs the value stance on protectionism, the Philippines will be directly affected, chain from the traditional voice and IT services to animation, especially since the BPO industry is considered as a substantial game development and healthcare information, among others. pillar of the country’s domestic economy. Data from the Bangko Sentral ng Pilipinas (BSP) or central bank showed that around 70% of the BPO revenues were sourced from the U.S. Aside from this, around 1.2 million Filipinos are at risk of losing their jobs.
Factors behind the success of BPO industry in the Ph hh Good labor conditions; hh Cheap labor costs; hh Affordable infrastructure; hh Favorable industry conditions; and hh Government support for the industry.
The Philippines will be directly affected should U.S. President-elect Donald Trump decides to pull out the U.S. BPOs in the country.
Although President-elect Trump’s policies are uncertain yet, the Duterte administration remains confident that U.S. BPOs will remain in the Philippines.
Philippine ANALYST BUSINESS October 2016 72 BUSINESS
LIST OF BOI-REGISTERED PROJECTS - SEPTEMBER 2016 Project Cost Equity Industry Activity (PHP MILLION) Local/Foreign
AGRICULTURE, FISHERY, AND FORESTRY
98% Filipino Biotech Farms, Incorporated Operator of AAA slaughterhouse in South Cotabato 330.00 2% Chinese
ELECTRICITY, WATER, AND GAS
Ecomarketsolutions, Inc. Renewable energy developer of 2.5MW Aurora Biomass Power Projects 337.75 100% Filipino AES Philippines Energy Storage Co. Operator of Kabankalan Advancion Energy Storage Array (Negros Occidental) 3,043.21 100% Foreign Ltd.
East Coast Fas Renewable energy and 60% Filipino Renewable energy developer of 30MW Solar Power Plant in Isabel 2823.23 Industrial Corporation 40% Japanese
Luzon Clean Water Development PPP (Bulacan Bulk Water Supply Project - Stages 1 and 2) under the concession 80% Filipino 8377.31 Corporation agreement with Metropolitan Waterworks and Sewerage System 20% Korean
Operator of 300MW circulating fluidized bed coal fired power plant project in Limay, Limay Premiere Power Corp. 23299.56 100% Filipino Bataan HOTEL, RESTAURANT, AND LEISURE SERVICES Operator of tourist accommodation facility/service residence (Somerset Alabang Star Anise Properties Corporation 1,436.00 100% Filipino Manila) - Muntinlupa City MISCELLANEOUS MANUFACTURES
Producer of bags (such as backpacks, shoulder bags, sling bags, and ladies bags) in 98% Filipino FF Global Bag Manufacturing, Inc. 6.74 Bulacan 2% Chinese
OFFSHORING AND OUTSOURCING SERVICES 70% Filipino Samdo eLearning Corporation eLearning tutorial services 8.25 30% South Korean
REAL ESTATE AND PROPERTY DEVELOPMENT
Developer of economic and low-cost housing Project (Mivesa Garden Residences Bldg. Cebu Landmasters, Inc. 257.02 100% Filipino 5) - Cebu City Developer of economic and low-cost housing project (Casa Mira Subdivision) in Cebu Landmasters, Inc. 574.47 100% Filipino Minglanila, Cebu Citihomes Builder and Development, Developer of economic and low-cost housing project (Liora Homes Phase 2) in Gen 351.51 100% Filipino Inc. Trias, Cavite
Stateland, Inc. Developer of economic and low-cost housing project in Calamba City 243.89 100% Filipino
Developer of economic and low-cost housing project (Montierra Subdivision) - Cagayan Johndorf Ventures Corporation 917.50 100% Filipino de Oro City SM Development Corporation Developer of economic and low-cost housing project (Coast Residences) - Pasay City 3,074.76 99.95% Filipino Developer of economic and low-cost housing project (Spring Residences Tower 1) - SM Development Corporation 670.49 99.95% Filipino Paranaque City
SM Development Corporation Developer of economic and low-cost housing project (S Residences) - Pasay City 1,394.61 99.95% Filipino
Developer of economic and low-cost housin project (Amaia Scapes Iloilo Sector 1A and Amaia Land Corp. 365.76 100% Filipino 1B) Developer of economic and low-cost housing project (La Tierra Solana Phase II) in Solanaland Development Inc. 164.95 100% Filipino Bacolor, Pampanga Developer of economic and low-cost housing project (Solana Country Homes Phase 2) Solanaland Development Inc. 87.91 100% Filipino in Bacolor, Pampanga STORAGE AND WAREHOUSING Construction of additional 2,000 MT storage capacity of the Albuera, Leyte LPG Pryce Gases, Inc. 252.66 99% Filipino Terminal Royale Cold Storage North, Inc. Operator of cold storage facilities in Marilao, Bulacan 237.53 100% Filipino
TRANSPORT SERVICES Herma Shipping and Transport Domestic shipping operator of 16 MB Oil Tanker Vessel - MT Matipuno) - homewhart 307.58 100% Filipino Corporation (Bataan) WOOD AND WOOD PRODUCTS
PalletAsia Victorias Corporation Producer of wood and grass pellets (Negros Occidental) 1,479.37 99% British
TOTAL 50,042.06
Philippine ANALYST BUSINESS October 2016 73 BUSINESS
PEZA APPROVED PROJECTS -2nd Quarter 2016 Equity INDUSTRY ACTIVITY ZONE Local/Foreign APPAREL AND TEXTILE MANUFACTURES Automatic printing designed to print any logo on fabric EXCELLENT TEXSCREENERS, INC. Mactan Economic Zone cutparts and garments AUTOMOTIVE TRADE
INTEGRATED MICRO-ELECTRONICS, INC. Motorcycle assembly Laguna Technopark - SEZ
Manufacture of shaft motor, any drive shaft components of PRECISE PARTS COOPERATION (PPCI) INC. First Cavite Industrial Estate - SEZ metal parts CHEMICAL ANF CHEMICAL PRODUCTS
D & A EDGE POLYMER PHILIPPINES INC. Manufacture of edge paint 100% - Chinese Angeles Industrial Park - SEZ
MEPZ MIXED GASES CORPORATION Nitrogen and Oxygen plant Mactan Economic Zone
ELECTRICITY, WATER, AND GAS AIR LIQUIDE PIPELINE UTILITIES SERVICES Installation of Nitrogen Gas Generator (TCN Recycle 5500nm3/ Calamba Premiere International Park
(ALPLUS), INC. hr) - SEZ 3MW solar energy generation facility particularly on the MAJESTICS ENERGY CORPORATION rooftop of a warehouse facility owned by Majestic Landscape Lima Technology Center - SEZ Corporation (MLC) SOUTH COTABATO II ELECTRIC Distribution Utility (DU) 100% - Filipino Kamanga Agro-Industrial Economic Zone COOPERATIVE, INC. ELECTRONICS
AUTOMATED TECHNOLOGY (PHIL.) INC. Manufacturing and processing of Ultrasonic Sensor Light Industry & Science Park I - SEZ
CROSSOVER.TECHNOLOGY INC. Manufacture of solar panels 100% - Filipino Light Industry & Science Park III - SEZ
DYSON ELECTRONICS PTE. LTD. Manufacture of Vacuum Cleaners 100% - Singaporean Carmelray Industrial Park II - SEZ
EMS COMPONENTS ASSEMBLY, INC. Manufacture of blender Laguna Technopark - SEZ
EMS COMPONENTS ASSEMBLY, INC. Manufacture of hair dryer Laguna Technopark - SEZ
ENTEL HK PHILIPPINES Manufacture of Digital Two-Way Radio Laguna Technopark Annex - SEZ
FUNAI ELECTRIC PHILIPPINES INC. Manufacture and assembly of Sound Bar Speaker Lima Technology Center - SEZ
IONICS EMS, INC. Manufacture of quantum security case Light Industry & Science Park I - SEZ
IONICS EMS, INC. Manufacture of PCBA for printer Light Industry & Science Park I - SEZ Manufacture of Consumer and Industrial Products like 95% - French KAERTECH ELECTRONICS PHILIPPINES INC. Bluetooth toothbrush, Bluetooth keychain and electronic Laguna Technopark - SEZ 5% - Filipino cigarette, Smart watch and PCB for emergency lighting Electronics manufacturing services, support services for MANCHESTER ELECTRONICS INNOVATIONS semiconductor manufacturing and electronics manufacturing Calamba Premiere International Park 100% - Filipino INC. services; advanced cleaning & decontamination control - SEZ services; and facilities management Manufacture of other palstic mold parts for electronics and OPTOWAVE MANUFACTURING PHILIPPINES assembly, test and inspection of Lens, Auto Focus and other Carmelray Industrial Park II - SEZ INC. plastic molded products PHILIPPINE INTERNATIONAL MANUFACTURING AND ENGINEERING Switch box assembly Cavite Economic Zone SERVICES CORP. SMART ELECTRONICS MANUFACTURING Manufacture of telecommunication devices-2 way radio Carmelray Industrial Park II - SEZ SERVICE PHILIPPINES, INC.
TERADYNE PHILIPPINES LTD. Production of adapter Cebu Light Industrial Park - SEZ Manufacture of power transformer, network transformer, filter, YAXIN ELECTRONICS PHILIPPINE CORP. inductance coil, flat wire coil, self-adhesive coil, ultra-micro 99.99% - Chinese First Cavite Industrial Estate - SEZ coil, hardware, plastic product, core, etc.
ZAMA PRECISION INDUSTRY Manufacture of body, body cover, cover metering (die casted First Philippine Industrial Park II - SEZ MANUFACTURING PHILIPPINES, INC. parts for carburetor); and solenoid valve coil assy
IT AND IT-ENABLED SERVICES
Research and Development, Technical and Engineering Support 99% - Australian 4D SYSTEMS PHILIPPINES INC. Cavite Economic Zone services 1% - Filipino
Engineering Outsource: CAD Drafting & Rendering, Animation & 3D, Embedded System; Software Development; Website AUKSILYO PROFESSIONAL, INC. 100% - Filipino CBP-IT Park Development; and Management Outsourcing: Consulting, Project Management
Philippine ANALYST BUSINESS October 2016 74 BUSINESS
Engineering support services for eLearning development and translation, Desktop Publishing of translated documents and JTIGLOBAL, INC. CBP-IT Park eLearning courses, Quality Assurance of the above tasks and Software development KYOCERA CIRCUIT DESIGN PHILIPPINES, Computer Aided Manufacturing (CAM) design Light Industry & Science Park II - SEZ INC. SAIEI ONLINE ENGLISH INC. Online English learning service 99.8% - Japanese 6788 Ayala Avenue Bldg. Knowledge-based and computer-enabled support services, SITE CONCEPTS INTERNATIONAL, INC. such as landscape architectural design, urban design, land use 100% - Filipino Keppel Center planning services and landscape design and planning services
MACHINERY AND EQUIPMENT
Aftersales/maintenance services including supply related 3DT PHILIPPINES CO. Lima Technology Center - SEZ spare parts and components
METAL INDUSTRIES
HIMEJI ELECTRIC PLATING PHILIPPINES Engage in zinc plating and cation coating/painting 99.98% - Japanese Laguna Technopark - SEZ INC. KEDICA PHILIPPINES CORPORATION Electroless nickel plating First Philippine Industrial Park - SEZ
KODEC PRECISION INC.. Manufacture of 3.5 HDD base plate Angeles Industrial Park - SEZ
MECTRON PHILIPPINES, INC. Machine fixture tooling Lima Technology Center - SEZ Assembly and sub-assembly of precision metal parts and/ MIXNUS PHILIPPINES PRECISION, INC. or components of electronic parts, semiconductor parts and Laguna Technopark Annex - SEZ other accessories Surface coating/Plating & washing using electro less process NAKTP, INC. Cavite Economic Zone on metal, aluminum & SUS electronic parts of similar nature
89% - Malaysian POLAR BEAR PHILIPPINES, INC. Engage in metal fabrication and metal stamping 10% - American Cavite Economic Zone 1% - Filipino & Korean
TAGANITO HPAL NICKEL CORPORATION Recovery of scandium oxalate Taganito Special Economic Zone
MISCELLANEOUS MANUFACTURES
TECHTUIT PHILS., INC. - PEZA DIVISION Production of camera lens assy. (Model LX211A and LX210A) First Philippine Industrial Park - SEZ
OFFSHORING AND OUTSOURCING Contact center, business/knowledge/transaction processing, 24-7 INTOUCH PH software development and data transcription, data 100% - Canadian UnionBank Plaza information processing centre, IT support services ACCENTURE, INC. Business process outsourcing (BPO) services Eton Centris
Business process outsourcing (BPO) and software development ACCENTURE, INC. Uptown Bonifacio services
Business process outsourcing (BPO) and software development AEGROUP B.V. 100% - Dutch One World Place services
AFFINION INTERNATIONAL PHILIPPINES, Business process outsourcing (BPO) services and call center 99.99% - American E-Square I.T. Park CORP. operations
Business process outsourcing (BPO) services and call center ARB CALL FACILITIES, INC. 99.99% - Hong Kong E-Square I.T. Park operations
Global information, technology/business process outsourcing ARCH GLOBAL SERVICES INC. 99.99% - Bermudan Eton Centris (IT/BPO) and back office operations support services
ASCENTRI INC. Business process outsourcing (BPO) services 99.99% - Australian Crown 7 I.T. Center
BPO-payroll, billing, logistics, and human resources, as well as ASIAINSPECTION PHILIPPINES INC. 99.2% - Chinese Cebu I.T. Park front-end office services
Knowledge-based and computer-enabled legal, compliance, AUGMENT LEGAL OUTSOURCING INC. 99.98% - Australian Damosa I.T. Park risk and governance support services
CIMPRESS PHILIPPINES INCORPORATED Graphic design and BPO services 99.99% - Dutch McKinley Hill Cyberpark
CITIGROUP BUSINESS PROCESS SOLUTIONS Disaster Recovery Site known as "One-CITI-COB Site" Eastwood City Cyberpark PTE.LTD.
CLOUDSTAFF PHILIPPINES INC. Call center operations SM City Clark IT Park
Technical support, sales and customer care and business CONTEXTA GLOBAL, INC. 99.97% - American UnionBank Plaza process outsourcing (BPO) services 51% - Chinese CS-PAC GLOBAL BPO INC. Business process outsourcing (BPO) and call center services Starmall Las Piñas IT Hub 49% - Filipino
DIVERSIFY ISS BGC INC. IT services and administrative/back office services 99.99% - Australian Twenty-four Seven McKinley
Philippine ANALYST BUSINESS October 2016 75 BUSINESS
FCTG SOUTH EAST ASIA (PHILIPPINES), INC. Business process outsourcing (BPO) services 99.99% - Singaporean One World Place
Outsourced customer support operations for foreign/ 60% - Filipino GAMEOPS INC. One San Miguel Avenue Condominium international online video game publishers and developers 40% - Chinese
49% - Italian GLUON, INC. Software development and consulting services 49% - French Damosa I.T. Park 2% - Filipino
HARBOUR IT ASIA Technical support and software development services UnionBank Plaza
IBEX GLOBAL SOLUTIONS (PHILIPPINES) Inbound customer services, voice non-voice back office Shaw Center Mall INC. services
Information Technology-enabled services, encompassing call ICONEX (UK) BRANCH, LTD. centers, back office operations, transaction and sales support 100% - British Cebu I.T. Park services
90% - Malaysian INSITE MY INTERNATIONAL, INC. Software development services PBCom Tower 10% - Filipino Business process outsourcing (BPO) services and call center INTELENET GLOBAL PHILIPPINES, INC. McKinley West operations
Customer support service, back office transaction processing, MOTIF LIMITED - PHILIPPINE BRANCH SM City Clark IT Park and research and analytics – knowledge process outsourcing
Business process outsourcing and knowledge content and OMX TECHNOLOGY AB - PHILIPPINES software development, and other allied IT-enabled/based BGC Corporate Center BRANCH services
PARTNERS GROUP PRIME SERVICES Shared services, support solutions and business process 99.99% - Swiss E-Square I.T. Park SOLUTIONS (PHILIPPINES), INC. outsourcing (BPO) services
50% - Australian PETSURE SERVICES INC. Business process outsourcing (BPO) services Philplans Corporate Center 50% - Filipino
PLATINUM BPO CONSULTING, INC. Business process outsourcing (BPO) services 99.94% - American One San Miguel Avenue Condominium
PSG GLOBAL SOLUTIONS, INC. Business process outsourcing (BPO) services BTTC Center
QUANTRICS ENTERPRISES INC. Call center services 100% - Canadian SMTT IT Park
REED ELSEVIER SHARED SERVICES Business process outsourcing (BPO), IT-related services, and UP Science and Technology Park (North) (PHILIPPINES) INC. call center operations
RENEWABLE PRODUCTS GROUP, INC.. Call center operations 99.99% - Chinese Ecotower
64% - Filipino RINGSYSTEM DEVELOPMENT INC. Software development and application services JMALL IT Center 36% - Japanese Business process outsourcing (BPO) and technology-enabled RMS COLLECT PHILS. INC. Robinsons Place Dasmariñas services
Business process outsourcing (BPO) and technology-enabled RMS COLLECT PHILS. INC. SM City Clark IT Park services
Business process outsourcing (BPO) and technology-enabled RMS COLLECT PHILS. INC. Iloilo Business Park services
96% - American ROYALTY SEATS PHILIPPINES INC. Software development services Eastwood City Cyberpark 4% - Filipino
RS2 SOFTWARE APAC INC. Software development services 99.99% - Maltese E-Square I.T. Park
SITEL PHILIPPINES CORPORATION Call center operations SM Baguio Cyberzone Building
STELLAR PHILIPPINES, INC. Call center services and business process outsourcing services ANR Business Center
SYKES ASIA INC. Call center operations ATC BPO 1
SYNCHRONY GLOBAL SERVICES Call center operations Northgate Cyberzone PHILIPPINES, INC. 50% - British TAPServices, Inc. Software development and application services Summit One Office Tower 50% - Chinese
Out-bound voice and non-voice IT-enabled services and TELCO SERVICES INTERNATIONAL PTY LTD 100% - Australian Philamlife I.T. Tower backroom, processing, monitoring, and support services
Inbound and Out-bound voice and non-voice IT-enabled TELCO SERVICES INTERNATIONAL PTY LTD services and backroom, processing, monitoring, and support SM iCITY 2 services
TELEDIRECT TELECOMMERCE (PHILIPPINES) Information and communication technology and Business Cyberscape Alpha INC. process outsourcing (BPO) services
Philippine ANALYST BUSINESS October 2016 76 BUSINESS
TELEPHILIPPINES INCORPORATED Call center operations Centrio Corporate Center
Business process outsourcing (BPO) services and call center TELSTRA INTERNATIONAL PHILIPPINES, INC. Zuellig Building operations UNITEDHEALTH GROUP GLOBAL SERVICES, Information technology services, call centre and back office Northgate Cyberzone INC. operations
VAULDEX TECHNOLOGIES INC. Software development and application services 99.99% - Japanese Crown 7 I.T. Center
VBP BACK OFFICE SOLUTIONS INC. Business process outsourcing (BPO) services 99.88% - Australian Mango Square
VIRTELA SERVICES PHILIPPINES Business process outsourcing (BPO) services King’s Court IT Center INCORPORATED OTHER BUSINESS SERVICES
Repair and refurbishment of automated test equipment (ATE), BOSTON SEMI EQUIPMENT PHILIPPINES, probers and handler test systems and components, spare Carmelray Industrial Park II - SEZ INC. parts, replacement parts and subcomponents thereof, and its sale of said repaired and refurbished items
PUBLISHING AND PRINTING CHIYODA INTEGRE (PHILIPPINES) Label printing services First Philippine Industrial Park II - SEZ CORPORATION REAL ESTATE ANFD PROPERTY DEVELOPMENT
GIDCI PROPERTY HOLDINGS INC. Operate and maintain two (2) warehouse buildings 100% - Filipino People's Technology Complex - SEZ
Additional warehouse facility a 1-unit warehouse facility INTERZONE PROPERTY MANAGEMENT CORP. Light Industry & Science Park IV - SEZ (IPMC 11 Building)
INTERZONE PROPERTY MANAGEMENT CORP. Additional 1-unit warehouse facility (IPMC 6 Building) Suntrust Ecotown Tanza
Construction and management of Maplehaus Building V and MAPLEHAUS, INC. Light Industry & Science Park IV - SEZ Building VI Construct, operate and maintain its proposed eight (8)-storey METROCOCO EXPORT CORP. Lakeside Evozone office building to be known as Metrococo IT Center Authority to lease out 2,210.60 sq.m. area to JDESystems MITSUWA CHEMICAL PHILIPPINES, INC. Cavite Economic Zone Logistics, Inc.
Operate and maintain an existing 14-storey office building 80% - Filipino MSY HOLDINGS CORP. Cebu I.T. Park known as MSY Tower 20% - British
NORTHERN CASTLE DEV'T REALTY Construction, operation and maintenance of two (2) factory/ 60% - Filipino Hermosa Ecozone Industrial Park CORPORATION warehouse buildings 40% - Korean
ORIENT GOLDCREST REALTY, INC. Registration of its additional 22-unit warehouse facilities Light Industry & Science Park IV - SEZ
80% - Filipino STRATEGIC SILICON SERVICES PHILIPPINES, Operate and maintain two (2) existing factory/warehouse 10% - American Light Industry & Science Park III - SEZ INC.. buildings 10% - Singaporean
SUTHERLAND GLOBAL DEVELOPMENT Construction of two (2) IT buildings 99.99% - Dutch Clark Special Economic Zone COMPANY PHILIPPINES INC.
ZHONGYAO REALTY CORPORATION Registration of its additional 2-unit warehouse facility Suntrust Ecotown Tanza
RUBBER AND PLASTIC PRODUCTS
Manufacture of precision parts made of foam, felt, rubber and other insulation and cushioning products, machinery, tools-makers, brass founders, metal workers, boiler makers, ABLE-SPEED MANUFACTURING PHILIPPINES millwrights, machinists, iron and steel makers, and converters 99.99% - Malaysian Carmelray Industrial Park II - SEZ INC. smiths, for wood-workers, builders, painters, metallurgists, water supply engineers, gas makers, printers, carriers and merchants
ALPINE PINK BUSINESS CORPORATION Construct, operate and maintain a factory/warehouse building 100% - Filipino Light Industry & Science Park IV - SEZ
BAY-SPORTS MANUFACTURING, INC. Manufacture of plastic products Baguio City Economic Zone
CAL-COMP PRECISION (PHILIPPINES), INC. Manufacture of plastic parts molding and tooling fabrication 99.99% - Thai First Philippine Industrial Park II - SEZ
LAGUNA DAI-ICHI, INC. Manufacture of ISH Connector Laguna Technopark - SEZ
MATEX PLANETARY DRIVE INTERNATIONAL, Printing of precision-engineered plastic injection products, Light Industry & Science Park II - SEZ INC. parts and assemblies
Manufacture of high-grade quality engineering plastic products PLAENGI PHILIPPINES, INC. 99.985% - Japanese First Cavite Industrial Estate - SEZ steel/metal parts and support steel frames
SAGARA METRO PLASTICS INDUSTRIAL Cover parts and tubes production, tube cutting, and Light Industry & Science Park III - SEZ CORPORATION awarehousing/storage
Philippine ANALYST BUSINESS October 2016 77 BUSINESS
85% - Chinese XUDONG PHILIPPINES INC. Manufacture of plastic injection mold Cavite Economic Zone 15% - Japanese
STORAGE AND WAREHOUSING
AMPLEON PHILIPPINES, INC.. Warehousing/logistics support services 99.99% - Dutch Light Industry & Science Park I - SEZ
Engage in the importation and local sourcing of parts/ DX ANTENNA PHILIPPINES, INC.. 99.99% - Japanese Light Industry & Science Park I - SEZ materials
FUSO-NABELIN AXIS PHILS. INC. Establishment of a new warehouse facility First Philippine Industrial Park - SEZ
HARADA AUTOMOTIVE ANTENNA Warehousing/logistics support services 99.99% - Japanese First Cavite Industrial Estate - SEZ (PHILIPPINES), INC.
HITEC RCD PHILIPPINES, INC.. Warehousing/logistics support services 99.99% - Korean Cavite Economic Zone
Warehousing, storage, deposit, or importation/procurement of MACTAN STEEL CENTER, INC.. Mactan Economic Zone raw materials or semi-finished goods
82% - Filipino MEC ELECTRONICS PHILIPPINES Logistics support services 16% - Taiwanese Cavite Economic Zone CORPORATION. 2% - British Engage in importation as buyer and/or indentor, warehousing, inventory management, direct sale, resale consignment MIXNUS PHILIPPINES PRECISION, INC.. 99.98% - Japanese Laguna Technopark Annex - SEZ and delivery of precision metal parts and/or components of electronic parts
POWERFLO SOLUTIONS (ASIA) PTY. LTD. Warehousing/Logistics services 100% - Australian Laguna Technopark - SEZ
SIIX LOGISTICS PHILS., INC. Warehousing/logistics support services Carmelray Industrial Park I - SEZ
SPP SANKO PRECISION PHILIPPINES Engage in supply of various imported/locally-purchased screws 99.99% - Japanese Laguna Technopark - SEZ CORPORATION and precision parts
STANDARD UNITS SUPPLY PHILIPPINES Warehousing/logistics support services First Philippine Industrial Park - SEZ CORPORATION
Philippine ANALYST BUSINESS October 2016 78 BUSINESS
FOREIGN DIRECT INVESTMENT BUSINESS CLIMATE INDEX Balance of Payments Concept*; JANUARY - JULY 2016 LEVEL (US$ million) YEAR-AGO YEAR-ON-YEAR FDI: BOP CONCEPT CURRENT LEVEL (% CHANGE) US$ Million 1200 TOTAL FDI 4,694.9 2620.8 79.1 1000 Equity Capital 1,468.2 840.6 74.7 800 Reinvested Earnings 445.6 463.5 (3.9) 600 Debt instruments 2,781.2 1,316.7 111.2 400 * The BSP adopted the Balance of Payment, 6th edition (BPM6) compilation framework effective 22 200 March 2013 with the release of the full-year 2012 and revised 2011 BOP statistics. In BPM6, net FDI flows refer to non-residents’ equity capital (i.e., placements less withdrawals) + reinvestment of 0 earnings + debt instruments, net (i.e.,net intercompany borrowings). -200
YEAR- -400 INDUSTRIAL PERFORMANCE DATA YEAR-TO- ON-YEAR (2000=100) AUGUST 2016 (INDEX) DATE -600 GROWTH J'14 M M J S N J'15 M M Volume of Production Index (VoPI) 142.3 13.6 6.5 (2000=100) a. Food 119.0 11.1 11.2 MOTOR VEHICLE SALES 2016 b. Beverage 140.5 16.1 6.8 SEPTEMBER 2016 c. Tobacco 8.7 11.5 0.7 YEAR-AGO GROWTH RATE CURRENT LEVEL (%) d. Textile 37.1 -6.3 -11.0 MOTOR VEHICLE SALES 31,451 27,069 16.2 e. Footwear and Wearing Apparel 28.1 11.1 -5.9 f. Wood and Wood Products 64.5 13.2 2.5 PASSENGER CAR SALES 12,110 10,703 13.1 g. Furniture & Fixtures 709.4 7.8 -9.9 COMMERCIAL VEHICLE SALES 19,341 16,366 18.2 h. Basic Metals 166.0 40.8 21.0
i. Iron and Steel 122.6 -5.6 2.5 UNIVERSAL AND COMMERCIAL BANK'S - JULY 2016 j. Non-ferrous Metals 269.0 259.6 56.4 LOANS OUTSTANDING TO THE REAL ESTATE SECTOR (P Bn)
k. Fabricated Metal Products 246.7 -17.8 -16.5 % to Total RE % to Total RE Jun-16 Jun-15 l. Machinery Excluding Electrical 62.8 44.7 31.3 loan loan m. Electrical Machinery 100.1 -3.8 0.6 Residential 279.46 24.6 238.43 25.1 n. Transport Equipment 167.4 38.7 16.8 Commercial 858.59 75.4 711.45 74.9 o. Other Mfg Industries 103.0 -11.4 -2.0 p. Paper & Paper Products 72.7 3.3 0.1 q. Publishing & Printing 135.3 2.7 4.4 r. Leather Products 0.6 -86.0 -84.0 s. Rubber Products 295.0 14.2 -1.1 t. Chemical Products 354.3 9.0 -4.1 u. Petroleum Products 52.5 2.3 -9.5 v. Non-Metallic Mineral Products 139.7 0.6 -0.8 w. Glass & Glass Products 111.9 -18.0 -13.6 x. Cement 181.3 3.7 -4.4 y. Misc. Non-Metalic Mineral Products 52.2 17.8 3.1 VALUE OF PRODUCTION INDEX (VAPI) 189.1 8.4 1.8 (2000=100) AVERAGE CAPACITY UTILIZATION 83.6 -16.6 83.5
Philippine ANALYST BUSINESS October 2016 79 BUSINESS BUSINESS CLIMATE INDEX STRIKES IN SEPTEMBER 2016 LABOR STRIKES (SEPTEMBER 2016) One work stoppage was recorded in September. Meanwhile, there were a total of 167 MAN-DAYS LOST .notices of strike/lockouts handled during the period STRIKES DECLARED WORKERS INVOLVED (000) 2016 2015 2016 2015 2016 2015 JAN ------FEB ------MAR ------APR ------STRIKES DECLARED 3.5 MAY 2 3 175 450 20,775 1,362 JUN 1 - 217 - 1,519 - 3 JUL 2 - 146 - 6,946 - 2.5 AUG 1 1 92 200 844 1,200 2 SEP 2 - 45 - 495 -
1.5 OCT - 1 - 80 - 800
1 NOV - - - - - 1,520 DEC ------0.5 TOTAL 8 5 675 730 30,579 4,882 0 J'13 A J O J'14 A J O J'15 A J O -0.5 VISITOR ARRIVALS IN AUGUST 2016 Total visitor arrivals registered in August is 502,739, up by 7.9% from 465,936 in the .same month in 2015. Of this, 2.5% or 12,549 visitors were Filipinos residing abroad Korea remained the top source of market followed by the China and the U.S. Visitors coming from Korea amounted to 147,588 (29.36% share of the total visitors in August). MAN-DAYS LOST The Chinese market tallied 61,766 visitors (12.29%) while the U.S. market recorded 1400 .)55,080 visitors (10.96%
1200
1000
800
600
400
200
0 J'13 A J O J'14 A J O J'15 A J O -200
-400
VISITOR ARRIVALS: JANUARY-AUGUST 2016 SURVEY ON MONTHLY OCCUPANCY RATE & LENGTH OF STAY COUNTRY 2016 2015 % CHANGE RANK Jan to Dec Jan to Dec Growth Rate KOREA 976,499 901,749 8.29 1 2015 2014 2015/2014 USA 584,149 531,217 9.96 2 De Luxe Hotels CHINA 484,567 322,417 50.29 3 Occupancy Rates 71.60 71.11 0.69 JAPAN 367,144 334,881 9.63 4 Length of Stay 2.71 2.74 -0.79 AUSTRALIA 161,016 153,097 5.17 5 First Class Hotels TAIWAN 157,517 120,630 30.58 6 Occupancy Rates 59.09 58.83 0.44 SINGAPORE 120,241 121,917 -1.37 7 Length of Stay 2.19 2.14 2.42 UNITED KINGDOM 117,535 103,577 13.48 8 Standard Hotels CANADA 114,074 102,293 11.52 9 Occupancy Rates 62.51 63.96 -2.27 MALAYSIA 95,129 103,995 -8.53 10 Length of Stay 2.42 2.52 -3.81 HONGKONG 81,332 83,648 -2.77 11 Economy Hotels INDIA 60,091 48,495 23.91 12 Occupancy Rates 60.14 59.73 0.69 OVERSEAS FILIPINO 137,270 143,972 -4.66 Length of Stay 1.57 1.65 -4.85 OTHERS 585,485 518,150 13.00
TOTAL 4,044,065 3,592,053 12.58 Overall Average 66.95 67.21 -0.39 Philippine ANALYST BUSINESS October 2016