55 BUSINESS

Auto industry seeks lower car tax The local automotive industry submitted a proposal to the Congress that seeks to adjust the excise tax in automobiles to 7 tiers from the previously 4 tiers released by the Department of Finance (DOF).

art of the proposed comprehensive tax reform program of the Duterte administration is the restructuring of Pthe excise tax on automobiles, thereby making the purchase of new vehicles in 2018 more expensive (see October 2016 Analyst article: Higher car tax proposed). The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Association of Vehicle Importers and Distributors (AVID), 2 of the largest representatives of the leading automakers and importers in the Philippines, recently requested the government to reconsider this, citing that the local automotive industry would likely face short- to long- term risks. “The industry will not be able to bear the resulting burden without having to pass on to consumers and therefore suffer from significant market loss,” the 2 associations said. Based on their joint paper submitted to the Congress, CAMPI and AVID offered to increase the tier system from 4 to 7 (see table on Proposed tax reforms on automotive). By adjusting the tier system, be 4%, the net effect on sales price is not 4% but just 2%. With it considers the segmentation of vehicular units, which then lowers amortization, buyers won’t really feel it. It would be like adding the excise tax rates and ceiling in each bracket. In addition to this, another P100 monthly, basically just like one Uber ride,” Sec. the 2 associations also asked that they be provided a lead time of Lopez claimed. In fact, in a study published by the National Tax at least 6 months before the government implements the new tax Research Center, it noted that “the Philippines imposes the lowest schedule “to enable the industry to make necessary adjustments.” minimum rate of 2% on taxable motor vehicles compared with 5 or CAMPI president Romel Guiterrez earlier expressed 10% in minimum tax rate in other (ASEAN) member countries.” his concern on DOF’s proposal due to its potential negative Meanwhile, according to DOF Secretary Carlos Dominguez impact on the Comprehensive Automotive Resurgence III, the local automotive industry’s growth rate would still Strategy (CARS) program, which intends to develop the continue to flourish despite the proposed adjustments. Buyers country as a regional manufacturing hub for automobiles. would not be discouraged due to the increase in their take-home DOF Undersecretary Karl Kendrick Chua said that he will pay as a result of lower personal income taxes. “In summary, have to look on the new proposal, given that “there is no revenue once we have seen and taken this excise on automobiles as estimate on (its) impact.” Department of Trade and Industry (DTI) a package together with the personal income tax, once we Secretary Ramon Lopez, however, rejects the proposal because consider that there are also many other factors that affect the net effect of the excise tax on the actual sales price would be decisions to buy cars, we see that this tax can actually be very much lower since the proposed rates are pegged on the import progressive, can be affordable and can actually contribute to price. “If the lowest tax rate on vehicles say under P600,000 would the [prosperity of our country],” Sec. Dominguez explained.

Philippine ANALYST BUSINESS March 2017 56 BUSINESS

proposed tax reform on automotives

Over Up to Current DOF’s Proposal CAMPI and AVID’s Proposal

0 P600,000 2% 4% 3%

P600,000 P1,100,000 P12,000 + 20% in excess of P600,000 P24,000 + 40% in excess of P600,000 P18,000 + 30% in excess of P600,000

P168,000 + 40% in exces P1,100,000 P1,600,000 s of P1,100,000 P112,000 + 40% in excess P224,000 + 100% in excess of P1,100,000 of P1,100,000 P386,000 + 50% in excess P1,600,000 P2,100,000 of P1,600,000

P618,000 + 80% in exces P2,100,000 P2,600,000 s of P2,100,000

P512,000 + 60% in excess P1,224,000 + 200% in excess P1,018,000 + 80% in excess P2,600,000 P3,100,000 of P2,100,000 of P2,100,000 of P2,600,000 P1,418,000 + 90% in excess P3,100,000 Over of P3,100,000 Source: WBF Database.

The local automotive industry is proposing to lower down the excise tax rates on automobiles by adjusting the tier system.

The Duterte administration declares that the proposed adjustments on excise tax won’t hurt the local automotive industry.

Finance Usec. Chua said the tax reform has been long overdue, especially since the local automotive industry has not experienced any changes in its tax structure over the last 10 years.

PH 8th in ideal business environment for Among these 3, the country performed well on 2 areas women – women’s advancement outcomes, and knowledge assets and financial access. Although the country’s women business According to the Mastercard Index of Women Entrepreneurs ownership and supporting entrepreneurial conditions are not the most favorable, the local entrepreneurship setting is highly (MIWE) 2017, the Philippines emerged as one of the top stimulated with strong awareness of business opportunities and countries that provide an ideal business environment for high appreciation for the status of successful women entrepreneurs. women. The MasterCard also noted that “women entrepreneurs here (in the Philippines) are often driven by strong desires to succeed.” Based on the MIWE 2017, the Philippines, with an overall The country ranked 1st in women’s advancement outcomes index of 68.4, ranked 8th among 54 countries with an ideal with a top component score of 65.5. In terms of knowledge assets business environment for women. The MasterCard pointed out and financial access, the country was placed in the 10th spot, with a that along with Vietnam (ranked 19th), the country attained component score of 82.3. Meanwhile, in supporting entrepreneurial “surprise with higher than expected index scores” noting conditions, the Philippines only landed in the 34th spot (60.4). that these 2 countries are lower middle-income economies. Out of the 54 countries included in the report, New Zealand The MIWE 2017 measures “ideal business environment got the highest rank. This was followed by Canada, U.S., for women to prosper” among 54 countries based on 3 Sweden, and Singapore, Belgium, Australia, Philippines, components (see figure on MIWE 2017 Components): United Kingdom, and Thailand. (see table on Top 10 hh Women’s advancement outcomes – women’s progress and Countries with an Ideal Business Environment for Women). degree of marginalization economically and professionally; The MIWE 2017 also found out that female entrepreneurship hh Knowledge assets and financial access – access of women is often encouraged by necessity and perseverance, while progress to basic financial services, advanced knowledge assets, and in female business ownership was due to strong supporting support for small and medium enterprises; and conditions such as opportunities for career progression; hh Supporting entrepreneurial conditions – overall perceptions access to financial services; and ease of doing business. on the ease of conducting business locally, quality of local According to MasterCard chief financial officer Martina governance, women’s perception of safety levels and cultural Hund-Mejean, “the prevalence of ambitious, resourceful perception of women’s household financial influence. Philippine ANALYST BUSINESS March 2017 57 BUSINESS

MIWE 2017 Components

Women's Knowledge Supporting Advancement Assets and Entrepreneurial Outcomes Financial Access Conditions

Women Borrowing Women Business Ease of Doing or Saving for Leaders Business Business

Cultural Women Women Financial Perceptions Professionals and Inclusion of Women Technical Workers Entrepreneurs

Women Quality of Entrepreneurial Support for SMEs Governance Activity Rate

Women Labor Women Tertiary Entrepreneurial Force Education Gross Supporting Participation Rate Enrollment Rate Factors

Source: Mastercard Index of Women Entrepreneurs (MIWE) 2017

3

The Philippines ranked 8th among 54 countries with an ideal business environment for women.

Philippine ANALYST BUSINESS March 2017 58 BUSINESS

top ten countries with an ideal business environment for women Rank Country Score 1 New Zealand 74.4 2 Canada 72.4 3 U.S. 69.9 4 Sweden 69.6 5 Singapore 69.5 6 Belgium 69.0 7 Australia 68.5 8 Philippines 68.4 9 United Kingdom 67.9 10 Thailand 67.5 Source: Mastercard Index of Women Entrepreneurs (MIWE) 2017

women should be regarded as a prime business opportunity.” The raise in MPO requirement intends “to make the local MasterCard International Markets president Ann Cairns also capital market be at par with other ASEAN countries” since added that “by enhancing access to critical networks, women Thailand, Singapore and Hong Kong have already raised their are better positioned to recognize their full potential and MPOs to 25%. This is in line with ASEAN’s goal to have a stronger accelerate more inclusive growth. It’s imperative that the regional capital market where investment opportunities would public and private sector work together to address cultural and be more available to the local public and also to fellow ASEAN organizational issues and further empower women leaders.” members. “Although the companies will have to accept that there will be dilution... eventually it will be good for them because there SEC to raise minimum public float will be more trading and, therefore, their market capitalization will increase,” First Metro Investment Corp. executive vice- The Securities and Exchange Commission (SEC) is planning president Justino Ocampo said. “A bigger public float helps the to raise the minimum public ownership (MPO) requirement stock price, so I think in the end it’s positive,” Mr. Ocampo noted. for new companies who will apply their initial public offerings On the other hand, BDO Capital president Francisco (IPOs) in the middle of the year. explained that the timing is very crucial for this new regulation since rates have been increasing and the impact on the market In 2015, the SEC had originally planned to implement their is not yet clear. “Imagine if a corporation is forced to sell proposal in raising the MPO requirement. SEC chairperson 5% more and the market is not doing well. That means Teresita Herbosa, however, explained that the past 2 years they have to price it at a discount,” Mr. Francisco added. did not seem to be a good time to implement higher MPO As part of the SEC’s intention to further boost the capital requirement due to the global events that took place such as: markets, they are encouraging the Filipinos to invest in the hh High market volatility influenced by China’s economic local capital market instead of investing in “get-rich-quick” slowdown and uncontrolled drop in oil prices; investment scams. The SEC is also planning to enhance its shelf registration program which will “allow companies to h h Philippines and U.S. presidential elections; and register securities and issue them in tranches within 3 years.” hh U.S. Federal Reserve’s rate hike. This year, the SEC is optimistic that the local market will improve its stability. Commissioner Ephyro Amatong noted that “this year might be different. So far, if you look at the index, it’s trading flat at the 7,200-7,300 level.” Given this, the SEC’s Market and Securities Regulation Department recommended to gradually increase its MPO requirement to The past 2 years were not good years to 30%. The company regulator will start by adding 5% from its increase the requirement current 10% MPO to companies which are “still in the process of going public, including those undertaking follow-on offerings due to high market volatility. after listing on the Philippine Stock Exchange (PSE) through the back door” in the middle of the year. This is part of Ms. Herbosa’s goal to increase the MPO up to 20% within her term. Meanwhile, the SEC is considering that the currently listed companies will be given until the end of the year to comply.

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The SEC is optimistic that the local market will improve its stability currently this year.

Higher MPO requirement is in line with ASEAN’s goal to have a stronger regional capital market.

MINING, OIL, & GAS

Opponents say Lopez unfit for post hh She does not know the law; hh She cannot balance her functions as Secretary of Environment Members of the Commission on Appointments (CA) and Natural Resources. Her bias against mining leaves her questioned Department of Environment and Natural unable to appreciate the mechanics of the Mining Act, where Resources (DENR) Secretary Gina Lopez for imposing rehabilitation is an indispensable requirement; new standards and changing the rules when she closed hh Her actions expose the Philippine government to massive 23 mine sites and canceled 75 mineral production sharing financial liability from international arbitration, similar to that agreements. awarded to Piatco for the construction of the Ninoy Aquino International Airport (NAIA) Terminal 3; and Sec. Lopez has garnered popularity due to her drastic decision- hh She is fast and loose with government funds. making, which was further pointed out at the resumption of her For the lawmakers’ part, Oriental Mindoro Representative confirmation hearing before the CA committee on environment Josephine Ramirez-Sato warned Sec. Lopez for “going outside and natural resources chaired by Senator Manny Pacquiao. the parameters of the law,” referring to the latter’s decision Various organizations from the business community, mining to revoke former DENR Sec. Ramon Paje’s administrative industry, indigenous groups and some CA members said Sec. decision requiring mining companies to be ISO-certified. Lopez failed to transcend her environmental advocacy, and has Despite facing oppositions, Sec. Lopez stood firm with her showed numerous times her bias against the industry by abusing stand, citing that the ISO 14001 compliance was only a her legislative powers and acting ‘above the law.’ The objections technical requirement brought about by a private initiative. that were raised during the confirmation supported the opposition’s During the hearing, Sen. Panfilo Lacson noted that Sec. Lopez’s stand that she did not follow existing standards and, instead, responses to the issues raised by the members of CA were “not imposed her own on the basis of “social and economic justice.” enough” to convince the body to vote in favor of her nomination. According to Chamber of Mines vice president for legal and policy The CA is set to have a final decision when Congress the Ronald Recidoro, she painted the industry as “environmental resumes session on May 2. rapists.” “We want to be clear: the issue here today is not the mining industry. The issue is whether or not Secretary-designate Lopez is the right person to head the DENR,” Mr. Recidoro added. It can be recalled that in February, the chamber submitted their formal opposition before the CA, highlighting 4 reasons (see below) why she is “unfit and unqualified” for the job.

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Sec. Lopez’s opponents highlighted her incompetence as an Environment chief.

Sec. Lopez stated that her decisions with regard the mining industry are based on ‘social and economic justice.’

I.T. UPDATE

DICT's proposed EO to speed up cell site mayors and governors must cooperate with us,” he added. applications Telecom providers, PLDT Inc. and Globe Telecom Inc., welcomed the draft EO, as they will find it easier to build As part of the Duterte administration’s efforts to improve infrastructure faster, and eventually, deliver better services. “It’s very encouraging and very hopeful since finally the state of mobile network services in the Philippines, the government realized the problem in the telco industry,” the Department of Information and Communications Globe Telecom’s General Counsel Froilan Castelo said. Technology (DICT) drafted an executive order (EO) that PLDT Public Affairs Head Ramon Isberto, for his part, noted will mandate local government units (LGUs) to speed up that the move will provide a “sense of direction” for the industry. the process of permits and licenses for telecommunications Once the draft EO has been approved by President Rodrigo and broadcast facilities. Duterte, it will be incorporated in the Citizen’s Charter of all LGUs, in accordance with its existing laws, rules, and regulations. According to DICT Secretary Rodolfo Salalima, through the draft EO, all new applications and renewal of permits and licenses to install and operate public services, such as telecommunications and broadcast facilities, value added services, and cable TV, must be completed and issued not more than 7 days from the receipt of the application. The decision on the application, as well as the grounds for approval or denial, must be written by the officer concerned. However, if the decision is not yet completed and issued on the 7th day, the officer concerned must immediately submit the application, together with the written explanation of the reason/s of the delay, to the local chief executive. Once submitted, the local chief executive has 2 days to decide on whether the application is to be granted or denied. The DICT said that if the local chief executive failed to act within 2 days, the application must be “deemed granted.” Presently, it takes at least 8 months to get the approval of at least 25 permits needed to build a cell site. Sec. Salalima noted that telecommunication services is a “national concern.” “Everybody, not only the DICT, but also the DILG and the leagues of local municipalities, cities’

Philippine ANALYST BUSINESS March 2017 61 BUSINESS

All new applications and renewal of permits and licenses to install and operate public services, such as telecommunications and broadcast facilities, value added services, and cable TV, must be completed and issued not more than 7 days from the receipt of the application.

Philippine ANALYST BUSINESS March 2017 62 BUSINESS

LIST OF BOI-REGISTERED PROJECTS - FEBRUARY 2017 Project Cost Equity Industry Activity (In PHP Million) Local/Foreign AGRICULTURE, FISHERY, AND FORESTRY 89% Filipino Tierra Agri Technologies, Inc. Producer of controlled release bulk blend inorganic fertilizer 76.8 11% Malaysian ELECTRICITY, WATER, AND GAS

Solana Solar Alpha Inc. Renewable energy developer of 24MW Solar Photo Voltaic Plant 1,156.9 100% Filipino

Southwest Luzon Power Generation Operator of 2x23MW SLPGC Power Plant 1,339.3 100% Filipino Corporation FOOD AND BEVERAGES MANUFACTURES Producer of whole dressed chicken and further processed (marinated, deboned San Miguel Foods, Inc. 1,333.3 100% Filipino chicken parts) REAL ESTATE AND PROPERTY DEVELOPMENT Developer of economic and low-cost housing project (Camella Solamente - Communities Batangas, Inc. 434.8 100% Filipino Horizontal) Developer of economic and low-cost housing project (8 Spatial Davao - Building 1 71% Filipino Filinvest Land, Inc. 412.0 & 2) 29% Singaporean Developer of economic and low-cost housing project (Aspire Prime Residences- Hausland Development Corporation 703.4 100% Filipino horizontal) Hausland Development Corporation Developer of economic and low-cost housing project 143.6 100% Filipino Prestige Homes and Realty Dev't Developer of economic and low-cost housing project (Granville II Subdivision- 147.9 100% Filipino Corp. horizontal) Prestige Homes and Realty Dev't Developer of economic and low-cost housing project (Granville III Subdivision- 448.1 100% Filipino Corp. horizontal) 80% Filipino Raemulan Lands, Inc. Developer of economic and low-cost housing project (Tradizo Enclave ) 601.9 20% British Virgin Islander

TRANSPORT SERVICES

Domestic shipping operator of RoRo type passenger / cargo ferry ship - TBN: M/V Southwest Premiere Ferries, Inc. 480.0 100% Filipino SWM Stella del Mar, 2,650 GT) - homewhart - Surigao del Norte Domestic shipping operator of RoRo type passenger / cargo ferry ship - MV Starlite Starlite Ferries, Inc. 463.3 100% Filipino Archer, 2,600GT) - homewhart - Batangas City

TOTAL 7,741.4

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PEZA APPROVED PROJECTS -4th Quarter 2016 Equity INDUSTRY ACTIVITY ZONE Local/Foreign APPAREL AND TEXTILE MANUFACTURES

Golden Gate Business Park-Cavite JISOO R&D CORP. Manufacture of garments and wearing apparel 100% - Korean Export Processing Zone

ELECTRICITY, WATER, AND GAS

FIRST GEN ENERGY SOLUTIONS INC. Retail electricity supplier (RES) 100% - Filipino Cebu Light Industrial Park - SEZ FUCHIGAMI CONSTRUCTION & BORING Provides water services 100% - Filipino Baguio City Economic Zone PRORIETARY Engage in the construction, installation and operation of a Calamba Premiere International TAIYO NIPPON SANSO PHILIPPINES, INC. 99.99% - Japanese nitrogen supply facility Park - SEZ ELECTRONICS

A.C.E. MANNIX ELECTRONICS CO., INC. Repair, installation and maintenance work/services 99.96% - Korean Cavite Economic Zone Increase in production capacity of its manufacture of Light Industry & Science Park CAC PHILIPPINES, INC. 99% - Japanese wheel speed sensors II - SEZ CONTINENTAL TEMIC ELECTRONICS Light Industry & Science Park Manufacture and export of Acceleration Satellite (gSat) 100% - German (PHILIPPINES), INC. II - SEZ EMS COMPONENTS ASSEMBLY, INC. Engage in production of cable wire harness 100% - Filipino Laguna Technopark - SEZ Light Industry & Science Park IONICS EMS, INC. Manufacture of T-Marc 340 AC 98% - Filipino I - SEZ Assembly/sub-assembly of energy saving lighting products KASAI ADVANCED MFG. PHILIPPINES INC. 99.99% - Japanese First Philippine Industrial Park - SEZ and devices 82% - Filipino MEC ELECTRONICS PHILIPPINES Manufacture of plastic and metal for electronics and 16% - Taiwanese Cavite Economic Zone CORPORATION electrical products 2% - British Light Industry & Science Park NXP SEMICONDUCTORS CABUYAO, INC. Engage in the production of Loss-Free Package (LFPAK) 99.99% - Dutch I - SEZ Assembly and process of parts and components of speakers P S T P INC. 99.75% - Korean Gateway Business Park - SEZ and coil winding for speakers Calamba Premiere International R12 EMS PHILS., INC. Manufacture of balanced armature (BA) speaker 99.99% - Korean Park - SEZ Light Industry & Science Park SKYWARE TECHNOLOGIES ASIA INC. Manufacture telecommunication products 99.91% - Dutch I - SEZ FOOD AND BEVERAGE MANUFACTURES Sarangani Economic Development DOLE PHILIPPINES, INC. Production of fruit dippers 99.88% - American Zone - SEZ SRC Allah Valley Economic DOLE PHILIPPINES, INC. Production of dried fruit 99.88% - American Development Zone IT AND IT-ENABLED SERVICES

CAMPAIGNTRACK INC. Engage in graphic and web-based services 99% - Australian 6780 Bldg. MAXIM INTEGRATED PRODUCTS Data encoding, transcribing and related services 100% - Irish Gateway Business Park - SEZ INTERNATIONAL SALES LIMITED 85% - Japanese PHILIPPINE EDS TECHNO-SERVICE, INC. Engineering, architectural and other design services Iloilo Technohub 15% - Filipino MACHINERY AND EQUIPMENT

KARUMONA NAGANO SEIKO, INC. Manufacture of worm shaft 99.99% - Japanese People's Technology Complex - SEZ Manufacture of rock cutting equipment and attachments ROCKBLOCK AUSTRALIA, INC. for excavators such as, buckets, grabs, shears and 99.88% - Italian Mactan Economic Zone pulverizers VJF TECHNO SOLUTIONS CORP. Engage in machining/manufacture of jigs and fixtures 100% - Filipino Carmelray Industrial Park II - SEZ

METAL INDUSTRIES Engage in assembly and sub-assembly of different types of KVK PHILIPPINES, INC. 99.98% - Japanese First Philippine Industrial Park - SEZ faucets, pipe fittings and related parts accessories

Manufacture of mold die, jigs & fixtures, mold parts & 80% - Korean Calamba Premiere International SEUNG JIN PRECISION PHILIPPINES INC. accessories 20% - Japanese Park - SEZ

Contract manufacturing using CNC Machining, CNC Laser T&S GLOBAL SOLUTIONS, INC.. Cutting, fabrication and assembly of metal, plastic wood, 99.99% - Japanese First Philippine Industrial Park - SEZ and mechanical components

Philippine ANALYST BUSINESS March 2017 64 BUSINESS

MISCELLANEOUS MANUFACTURES

EVERBRILLIANT MANUFACTURING 99.996% - British Light Industry & Science Park Manufacture of polyurethane/polyester cleanroom gloves COMPANY INC. Virgin Islander I - SEZ Manufacture and export of all kinds of dental and ASO INTERNATIONAL MANILA, INC. 99.997% - Japanese Cavite Economic Zone orthodontics products, devices and supplies Assembly/blister acking, packaging and sterilization of TERUMO (PHILIPPINES) CORPORATION 100% - Japanese Laguna Technopark - SEZ terufusion air needle LINEARWORKS CORPORATION Tape and reel services 99.99% - Japanese People's Technology Complex - SEZ

OTHER BUSINESS SERVICES Engage in laser cutting services of all types of metal, PHILIPPINE TONAN CORPORATION 99.99% - Japanese Mactan Economic Zone wood, and plastics Engage in laser cutting services of all types of metal, PHILIPPINE TONAN CORPORATION 99.99% - Japanese First Cavite Industrial Estate - SEZ wood, and plastics Site Hosting services to the project of APEX 5678 ROCKWELL, INC. 99.99% - Hong Kong The Rockwell Business Center PriceWaterhouseCoopers Service Delivery Centre (Manila) OFFSHORING AND OUTSOURCING

ACCENTURE, INC. Software development services 99.99% - Dutch Filinvest Cebu Cyberzone Client Management Solution (CRM) and the emerging ACCENTURE, INC. Software-as-a-Service (SaaS) and cloud computing 99.99% - Dutch Philamlife I.T. Tower technology AFNI PHILIPPINES, INC. Call center operations 99.99% - American One Felicity Center

ALORICA PHILIPPINES, INC. Call center operations 99.99% - American Alphaland Southgate Towers Business process outsourcing (BPO) and call center ALTISOURCE BUSINESS SOLUTIONS, INC. 99.99% - Dutch SM iCITY 2 operations ARTESYN EMBEDDED TECHNOLOGIES Software development services 99.99% - Hong Kong Eastwood City Cyberpark PHILIPPINES INC. Software package and mobile application design AUDIOWAV MEDIA INC. Laguna Technopark - SEZ development BPO GLOBAL RESOURCES, INC. Business process outsourcing (BPO) services 99.92% - British Trafalgar Plaza

CBE COMPANIES PH, INC. Shared service centre operations 99% - Australian W Fifth Avenue

CEBU AMALGAMATED SOFTWARE Software application development, technical support and 100% - Filipino Innove IT Plaza OUTSOURCING, INC. maintenance, and quality assurance and testing work

CEVA LOGISTICS HOLDINGS B.V. - Engage in IT Logistics support including data processing 100% - Dutch 2251 IT Hub PHILIPPINE BRANCH and management IT-related services such as language learning/translation, CHINA ONLINE INNOVATIONS INC. 99.99% - Caymanian The Discovery Centre back - office support services CONVERGYS PHILIPPINES INC. Call center operations 97.20% - Dutch SM City Clark IT Park 96% - Australian EMAPTA VERSATILE SERVICES INC. Business Process Outsourcing services using e-commerce 3% - Filipino I.T. Bldg. 1% - Japanese ENABLESME INC. Call center operations 99.95% - Australian Polar Center EDSA

ETRADING SOFTWARE LIMITED Software development and knowledge process outsourcing 99.99% - British Tower 6789 (PHILIPPINES) INC. services Business process outsourcing (BPO) and call center EZY SERVICE CENTRE CORPORATION 100% - Singaporean Robinsons-Equitable Tower operations IT information security services, in particular, Anti-Virus G DATA AV LAB INC. 99.99% - German Eastwood City Cyberpark (AV) services to G Data Software AG GENESYS TELECOMMUNICATIONS Call center operations 100% - Caymanian Cyber Park Building One LABORATORIES LTD. GENPACT SERVICES LLC Call center operations 100% - American Starmall Bataan (BPO)

IBM BUSINESS SERVICES, INC. Business process outsourcing (BPO) services 99% - Filipino Eastwood City Cyberpark

IGT-INTERGLOBE TECHNOLOGIES 51% - Indian Call center operations ATC BPO 1 PHILIPPINES INC. 49% - Singaporean ING BUSINESS SHARED SERVICES B.V. Business process outsourcing (BPO) services 99.99% - Dutch W Fifth Avenue BRANCH OFFICE MERLIN INFORMATION SYSTEMS Call center operations 99.99% - British McKinley Hill Cyberpark PHILIPPINES INC. Infrastructure and cloud computing, business process NTT DATA SERVICES PHILIPPINES INC. 99.99% - Dutch Eastwood City Cyberpark outsourcing and application services 70% - American OAMPI INC. Call center operations 6780 Ayala Avenue Bldg. 30% - Filipino

Philippine ANALYST BUSINESS March 2017 65 BUSINESS

PCCW SOLUTIONS PHILIPPINES, INC. Software development services 99.99% - Hong Kong UnionBank Plaza

PHASE1 (PHILIPPINES) INC. Programming and software development services 99.7% - Japanese 6788 Ayala Avenue Bldg. REED ELSEVIER SHARED SERVICES Business process outsourcing (BPO) services 99.99% - Dutch Iloilo Business Park (PHILIPPINES) INC. RIGHTCROWD SOFTWARE, INC. Software development services 99.68% - Australian Condominium RESULTS MANILA, INC. Call center operations 99% - American Fiesta World Mall IT Center

RMH TELESERVICES ASIA PACIFIC, INC. Call center operations 100% - American MJ Corporate Plaza Business process outsourcing (BPO) and call center RMS COLLECT PHILS. INC. 99% - American SM City Clark IT Park operations 90% - British ROCCATECH PHP INC. Software development and website application services Cebu I.T. Park 10% - Filipino Business process outsourcing and software development 98% - Japanese SAMBAR LAB PH INC. Eastwood City Cyberpark services 2% - Filipino Business process outsourcing (BPO) and call center STELLAR PHILIPPINES, INC. 99.99% - Filipino Araneta Cyber Park operations TELUS INTERNATIONAL PHILIPPINES, Business process outsourcing (BPO) and call center 99.99% - British McKinley West INC. operations

TMJP BPO SERVICES, INC. Business process outsourcing (BPO) services 99.99% - Japanese One Felicity Center VXI GLOBAL HOLDINGS B.V. Call center operations 100% - Dutch Felcris Centrale (PHILIPPINES) VXI GLOBAL HOLDINGS B.V. Call center operations 100% - Dutch Panorama TechnoCenter (PHILIPPINES) WELLS FARGO ENTERPRISE GLOBAL Call center operations 99.99% - Chinese McKinley West SERVICES XEROX BUSINESS SERVICES PHILIPPINES, Business process outsourcing (BPO) and call center 99.82% - Dutch CityNet1 INC. operations XEROX BUSINESS SERVICES PHILIPPINES, Business process outsourcing (BPO) and call center 99.82% - Dutch CBP-IT Park INC. operations XEROX BUSINESS SERVICES PHILIPPINES, Business process outsourcing (BPO) and call center Cebu I.T. Tower INC. operations PAPER AND PAPER PRODUCTS

Increase in production capacity of its manufacture/ 99% - Korean SSCP MLA., INC. Cavite Economic Zone assembly of danpla box and pipe rack 1% - Filipino

REAL ESTATE ANFD PROPERTY DEVELOPMENT

CENTEREACH RESOURCES, INC. Additional 12-bay warehouse building 100% - Filipino Lima Technology Center - SEZ A proposed 18-storey office building to be known as Calma CLIPP MACHENSON HOLDINGS, INC. 100% - Filipino Lakeside Evozone Institute of Arts and Architecture Cavite Technopark-Special DW INDUSTRIAL PARK INC. Construction of 5 bay factory/warehouse buildings 100% - Filipino Economic Zone DW PREMIER INDUSTRIAL COMPOUND Construction of 2 units, 3-bay factory/warehouse buildings 100% - Filipino Alviera Industrial Park INC. ECOZONE PROPERTIES, INC. Registration of its additional warehouse buildings 100% - Filipino First Industrial Township - SEZ

EIGHTEEN88 FACILITIES INC. Construction of 12 factory/warehouse buildings 100% - Filipino Carmelray Industrial Park I - SEZ Light Industry & Science Park IV EMS LAND SERVICES INC. Construction of 2 factory/warehouse buildings 100% - Filipino - SEZ EZP DEVELOPMENT, INC. Additional 6 warehouse buildings 100% - Filipino Alviera Industrial Park HOUSE TECHNOLOGY INDUSTRIES PTE. Subleasing a 2,712 sq.m. building space to Cemedine 100% - Singaporean Cavite Economic Zone II LTD. Philippines Corporation ILO LAND, INC. Construction and managing a 4-unit warehouse facility 100% - Filipino Lima Technology Center - SEZ

J.Y. AND SONS REALTY CO., INC. Maintenance and operation of a warehouse facility 100% - Filipino First Cavite Industrial Estate - SEZ Leasing out a 1,121.25 sq.m. area of its building space to LOOKWELL PHILIPPINES CORPORATION 100% - Japanese Mactan Economic Zone All Win Mactan, Inc. MAPLEHAUS, INC. Construction of a factory/warehouse building 100% - Filipino Suntrust Ecotown Tanza Cavite Technopark-Special ORIENT GOLDCREST REALTY, INC. Construction and managing a 10-unit warehouse building 100% - Filipino Economic Zone SUNPINO CAVITE CORPORATION. Additional plant facilities 100% - Japanese Cavite Economic Zone Leasing out a 567.9 sq.m. building space to Yasaka TOA KIKO CEBU CORPORATION 99.93% - Japanese Mactan Economic Zone Philippines International Corporation

Philippine ANALYST BUSINESS March 2017 66 BUSINESS

RECYCLING AND WASTE MANAGEMENT Engage in collection, sorting, disassembly, stripping, COGREENVIRO CORPORATION crushing, grinding, cutting, pressing and packaging of 100% - Filipino First Cavite Industrial Estate - SEZ (Approved as Cogreen Pte. Ltd.) various metal and plastic scrap RUBBER AND PLASTIC PRODUCTS 99.86% - LAGUNA DAI-ICHI, INC. Ramp injection Laguna Technopark - SEZ Singaporean Manufacture and assembly of plastic precision moldings Light Industry & Science Park LEADENCE PHILIPPINES CORPORATION and mechanical parts; and painting and printing of plastic 99.99% - Japanese II - SEZ precision moldings and mechanical parts NANBU PHILIPPINES, INC. Manufacture of PVC resin compound 99.99% - Japanese Cavite Economic Zone Manufacture of housewares such as bowls, plates, cups, PEBA TANDEM MANUFACTURING, INC. decorative pieces and garden pots, hanging planters and 99% - American Cebu Light Industrial Park - SEZ other accessories, using melamine powder STORAGE AND WAREHOUSING

JCAHERITAGE INTERNATIONAL CORP. Warehousing/logistics support services 100% - Filipino Laguna Technopark - SEZ Importation and use of tape log roll cutting machine and KDTECHNOLOGIES INC. 100% - Filipino Cavite Economic Zone providing tape cutting/slitting services Engage in the supply of Fiberoptronic sensor, Bar code reader, Vision system, Safety light curtain, Measurement KEYENCE PHILIPPINES INC. 99.99% - Japanese Laguna Technopark - SEZ system, PLC, Laser marker, Microscope and other related products Engage in the supply of retail boxes, books, manuals and LINOCRAFT PRINTERS PHILIPPINES INC. 99.99% - Malaysian Carmelray Industrial Park II - SEZ inserts SUMMIT88 MANAGEMENT CONSULTANCY, Engage in importation, storing, transporting and just-in- 100% - Filipino Cavite Economic Zone INC. time delivery of products TOYOTA MOTOR PHILIPPINES LOGISTICS, Warehousing/logistics support services 99.997% - Filipino Greenfield Automotive Park - SEZ INC. VITALO PACKAGING INTERNATIONAL, Provide warehousing, importation, selling of Plastic Sheets 99.99% - Thai Laguna Technopark - SEZ INC.. in non-die-cut (sheet in rolls) WOOD AND CORK PRODUCTS SCAD SERVICES (S) PTE., LTD. (PHIL. Manufacture of wrapping type of flooring 100% - Singaporean Cavite Economic Zone BRANCH)

THEMING AND ANIMATRONICS Engage in designing and decorating themed decorative 90% - German Carmelray Industrial Park II - SEZ INDUSTRIES, INC. items 10% - Romanian

Philippine ANALYST BUSINESS March 2017 67 BUSINESS

FOREIGN DIRECT INVESTMENT BUSINESS CLIMATE INDEX Balance of Payments Concept*; JANUARY - DECEMBER 2016 )LEVEL (US$ million YEAR-AGO YEAR-ON-YEAR CURRENT FDI: BOP CONCEPT LEVEL )(% CHANGE US$ Million 1200 TOTAL FDI 7,933.1 5,639.1 40.7 1000 Equity Capital 2,035.3 1,816.1 12.1 800 Reinvested Earnings 710.2 746.9 )4.9( 600 Debt instruments 5,187.6 3,076.1 68.6 400 200 * The BSP adopted the Balance of Payment, 6th edition (BPM6) compilation framework effective 22 March 2013 with the release of the full-year 2012 and revised 2011 BOP statistics. In BPM6, net 0 FDI flows refer to non-residents’ equity capital (i.e., placements less withdrawals) + reinvestment of earnings + debt instruments, net (i.e.,net intercompany borrowings). -200 -400 YEAR- INDUSTRIAL PERFORMANCE DATA YEAR-TO- ON-YEAR -600 (2000=100) JANUARY 2017 (INDEX) DATE GROWTH J'14 M M J S N J'15 M M Volume of Production Index (VoPI) 158.9 9.3 10.7 (2000=100) MOTOR VEHICLE SALES 2016 a. Food 172.2 28.5 20.1 FEBRUARY 2017 YEAR-AGO GROWTH RATE CURRENT b. Beverage 129.7 -0.3 -4.6 LEVEL (%) c. Tobacco 4.4 -15.2 -42.0 MOTOR VEHICLE SALES 27,040 25,150 7.5 d. Textile 38.4 14.2 2.6 PASSENGER CAR SALES 9,114 9,819 (7.2) e. Footwear and Wearing Apparel 30.9 50.1 16.9 COMMERCIAL VEHICLE SALES 17,926 15,331 16.9 f. Wood and Wood Products 112.3 116.8 75.3 g. Furniture & Fixtures 804.6 1.3 14.2 UNIVERSAL AND COMMERCIAL BANK'S - DECEMBER 2016 h. Basic Metals 179.8 59.1 11.0 LOANS OUTSTANDING TO THE REAL ESTATE SECTOR (P Bn) i. Iron and Steel 103.8 -9.2 -13.2 % to Total RE % to Total RE DEC-16 DEC-15 j. Non-ferrous Metals 372.0 268.4 40.9 loan loan k. Fabricated Metal Products 277.2 21.1 17.2 Residential 313.33 24.6 257.96 24.2 l. Machinery Excluding Electrical 53.0 14.7 -8.2 Commercial 962.77 75.4 806.17 75.8 m. Electrical Machinery 98.3 -10.2 -4.3 n. Transport Equipment 185.5 46.5 20.3 o. Other Mfg Industries 103.1 8.6 -1.3 p. Paper & Paper Products 78.1 8.7 1.7 q. Publishing & Printing 125.7 -27.0 -13.5 r. Leather Products 0.6 -14.3 -24.9 s. Rubber Products 296.5 6.2 9.0 t. Chemical Products 446.6 -5.2 31.7 u. Petroleum Products 57.6 45.4 21.1 v. Non-Metallic Mineral Products 136.8 9.1 0.4 w. Glass & Glass Products 200.5 68.0 64.1 x. Cement 171.4 13.8 -1.0 y. Misc. Non-Metalic Mineral Products 45.3 11.4 -5.8 VALUE OF PRODUCTION INDEX (VAPI) 219.9 11.6 13.7 (2000=100) AVERAGE CAPACITY UTILIZATION 83.8 -16.2 83.8

Philippine ANALYST BUSINESS March 2017 68 BUSINESS BUSINESS CLIMATE INDEX STRIKES IN FEBRUARY 2017 LABOR STRIKES (MARCH 2017) No work stoppage was recorded in February. Meanwhile, there were a total of 65 WORKERS notices of strike/lockouts handled during the period. STRIKES DECLARED MAN-DAYS LOST (000) INVOLVED 2017 2016 2017 2016 2017 2016 JAN - - - - 121,748 - FEB 1 - 214 - 18,554 - MAR ------APR ------STRIKES DECLARED 3.5 MAY - 2 - 433 - 82,884 JUN - 1 - 217 - 1,519 3 JUL - 2 - 146 - 14,146 2.5 AUG - 1 - 92 - 844 2 SEP - 2 - 45 - 675

1.5 OCT - 2 - 184 - 11,136 NOV - 3 - 134 - 3,578 1 DEC - 2 - 1,855 - 1,855 0.5 TOTAL 1 15 214 3,106 140,302 116,637 0 J'13 A J O J'14 A J O J'15 A J O -0.5 VISITOR ARRIVALS IN JANUARY 2017 Total visitor arrivals registered in January is 631,639, up by 16.48% from 542,258 in the same month in 2016. Of this, 1.82% or 11,518 visitors were Filipinos residing abroad. Korea remained the top source of market followed by the U.S. and the China. MAN-DAYS LOST Visitors coming from Korea amounted to 154,367 (24.44% share of the total visitors in 1400 January). The U.S. market tallied 99,435 visitors (15.74%) while the Chinese market recorded 85,948 visitors (13.61%). 1200

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VISITOR ARRIVALS: JANUARY 2017 SURVEY ON MONTHLY OCCUPANCY RATE & LENGTH OF STAY COUNTRY 2017 2016 % CHANGE RANK Jan to Dec Jan to Dec Growth Rate KOREA 154,367 147,165 4.89 1 2015 2014 2015/2014 USA 99,435 84,506 17.67 2 De Luxe Hotels CHINA 85,948 48,708 76.46 3 Occupancy Rates 71.60 71.11 0.69 JAPAN 51,516 41,691 23.57 4 Length of Stay 2.71 2.74 -0.79 AUSTRALIA 27,826 25,274 10.10 5 First Class Hotels CANADA 24,352 21,108 15.37 6 Occupancy Rates 59.09 58.83 0.44 TAIWAN 21,926 15,523 41.25 7 Length of Stay 2.19 2.14 2.42 UNITED KINGDOM 15,747 15,072 4.48 8 Standard Hotels SINGAPORE 12,000 13,404 -10.47 9 Occupancy Rates 62.51 63.96 -2.27 MALAYSIA 10,215 11,068 -7.71 10 Length of Stay 2.42 2.52 -3.81 HONGKONG 10,006 8,132 23.04 11 Economy Hotels INDIA 11,805 8,954 31.84 12 Occupancy Rates 60.14 59.73 0.69 OVERSEAS FILIPINO 11,518 16,263 -29.18 Length of Stay 1.57 1.65 -4.85 OTHERS 94,978 85,390 11.23 TOTAL 633,656 544,274 16.42 Overall Average 66.95 67.21 -0.39 Philippine ANALYST BUSINESS March 2017