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PH slips in WB’s ease of doing business ranking The World Bank-International Finance Corporation’s (WB-IFC) “Doing Business 2018: Reforming to Create Jobs” ranked the 113th out of 190 countries from 99th in “Doing Business 2017: Equal Opportunity for All.” Its distance to frontier (DTF) score – measures the performance the countries covered by the report on each of the indicator – increased marginally to 58.74 from last year’s 58.32, on a 0-100 scale indicating the lowest performance to the frontier (best performance).

ccording to the WB, the DTF score “aids in assessing the absolute level of regulatory performance and how it Aimproves over time.” On the other hand, the ranking on the ease of doing business complements the DTF score by providing information about a country’s performance in business regulations relative to the performance of other countries, the report explained. The doing business ranking was measured based on 10 indicators (see figure on 2018 Doing Business: Indicators). These indicators “focuses on key areas of interaction between the government and entrepreneurs, where policy makers and regulators can directly influence procedures to facilitate these interactions.” Based on the 2018 Doing Business report, New Zealand got the highest rank out of the 190 countries. This was followed by Singapore (2nd), Denmark (3rd), South Korea (4th), and Hong Kong (5th). The U.S. (6th), United Kingdom (7th), Norway (8th), Georgia (9th), and Sweden (10th) completed the list (see table on 2018 Doing Business Report: Top 10 Countries). The WB underscored that the country “is making steady Among 25 East Asia and Pacific countries included in progress in carrying out reforms that can make it easier for the report, the Philippines is outranked by 15 countries (see entrepreneurs to start and operate a business.” The WB table on 2018 Doing Business Report: East Asia and Pacific also saw the latest business reforms as a good point for Countries). Meanwhile, among Southeast Asian states, it the country’s improvement, but a faster pace of reforms is ranked 7th out of 11 countries covered by the report (see table highly suggested (see box on Business Reforms in the PH). on 2018 Doing Business Report: Southeast Asian states). The report lauded the country on the reforms introduced to The country performed well only on the paying taxes indicator, improve the investment environment – getting electricity, as well up by 10 notches, from 115th to 105th. However, it posted as paying taxes. However, it said that small- and medium-sized decrease on its rankings on the rest of the indicators (see table enterprises (SMEs) are hindered by challenges in the areas of starting on PH Performance in 2018 and 2017 Doing Business Report). a business, enforcing contracts, and protecting minority investors. Despite the results of the country’s performance on the The WB said the government improved the business climate indicators, the WB said that it is “not comparable (to the for SMEs by implementing 2 key reforms in the past year and previous year)” due to some refinements in methodology. this was helpful in alleviating poverty since SMEs are the backbone of the economy, supplying 90% of employment.

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2018 DOING BUSINESS: INDICATORS

Source: Doing Business database Note: Labor market regulation is not included in the ease of doing business ranking

2018 DOING BUSINESS REPORT: TOP 10 COUNTRIES COUNTRY 2018 2017 CHANGE New Zealand 1 1 = Singapore 2 2 = Denmark 3 3 = South Korea 4 5 +1 Hong Kong 5 4 -1 U.S. 6 8 +2 United Kingdom 7 7 = Norway 8 6 -2 Georgia 9 16 +7 Sweden 10 9 -1 Source: 2018 Doing Business Report

2018 DOING BUSINESS REPORT: EAST ASIA AND PACIFIC COUNTRIES RANK COUNTRY 2 Singapore 5 Hong Kong 15 Taiwan 24 Malaysia 26 Thailand 56 Brunei 62 Mongolia 68 Vietnam 72 Indonesia 78 China 87 Samoa 89 Tonga 90 Vanuatu 101 Fiji 109 Papua New Guinea 113 Philippines 116 Solomon Islands 130 Palau 135 Cambodia 141 Laos 149 Marshall Islands 155 Micronesia 157 Kiribati 171 Myanmar 178 Timor-Leste Source: 2018 Doing Business Report

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The Philippines ranked 113th out of 190 countries in the World Bank-International Finance Corporation’s 2018 Doing Business report. Its distance to frontier score,however, increased marginally to 58.74.

2018 DOING BUSINESS REPORT: SOUTHEAST ASIAN STATES

RANK COUNTRY 2 Singapore 24 Malaysia 26 Thailand 56 Brunei 68 Vietnam 72 Indonesia 113 Philippines 135 Cambodia 141 Laos 171 Myanmar 178 Timor-Leste Source: 2018 Doing Business Report

PH PERFORMANCE IN 2018 AND 2017 DOING BUSINESS REPORT

INDICATORS 2018 2017 CHANGE Overall Ranking 113 99 -14 Starting a Business 173 171 -2 Dealing with Construction 101 85 -16 Permits Getting Electricity 31 22 -9 Registering Property 114 112 -2 Getting Credit 142 118 -24 Protecting Minority Investors 146 137 -9 Paying Taxes 105 115 +10 Trading Across Borders 99 95 -4 Enforcing Contracts 149 136 -13 Resolving Insolvency 59 56 -3 Source: 2018 Doing Business Report

Among the 10 indicators measured in the report, the country performed well only on the paying taxes indicator.

The Philippines is making steady progress in carrying out reforms that can make it easier for entrepreneurs to start and operate a business.

Philippine ANALYST BUSINESS November-December 2017 75 BUSINESS

BUSINESS REFORMS IN THE PHILIPPINES

DB2018 Getting Electricity: The Philippines reduced the time to get an electricity connection by implementing a new asset management system and by creating a new scheduling and planning office. Paying Taxes: The Philippines made paying taxes easier by introducing a new electronic system for payment and collection of the housing development fund contributions.

DB2017 Dealing with Construction Permits: The Philippines made dealing with construction permits easier by increasing the transparency of its building regulations. Paying Taxes: The Philippines made paying taxes easier by introducing an online system for filing and paying health contributions and by allowing for the online corporate income tax and VAT returns to be completed offline.

DB2016 Starting a Business: The Philippines made starting a business easier by streamlining communications between the Securities and Exchange Commission and the Social Security System and thereby expediting the process of issuing an employer registration number.

DB2015 Trading across Borders: In the Philippines trading across borders became more difficult because of a new city ordinance restricting truck traffic in Manila.

DB2014 Dealing with Construction Permits: The Philippines made dealing with construction permits easier by eliminating the requirement to obtain a health certificate. Getting Credit: The Philippines improved access to credit information by beginning to distribute both positive and negative information and by enacting a data privacy act that guarantees borrowers’ right to access their data. Paying Taxes: The Philippines made paying taxes easier for companies by introducing an electronic filing and payment system for social security contributions.

DB2012 Resolving Insolvency: The Philippines adopted a new insolvency law that provides a legal framework for liquidation and reorganization of financially distressed companies.

DB2011 Starting a Business: The Philippines eased business startup by setting up a one-stop shop at the municipal level. Dealing with Construction Permits: The Philippines made construction permitting more cumbersome through updated electricity connection costs. Trading across Borders: The Philippines reduced the time and cost to trade by improving its electronic customs systems, adding such functions as electronic payments and online submission of declarations.

DB2010 Getting Credit: The Philippines improved access to credit information through a new act regulating the operations and services of a credit information system. Paying Taxes: The Philippines made paying taxes less costly for companies by reducing the corporate income tax rate. Resolving Insolvency: The Philippines enhanced its insolvency process by promoting reorganization procedures through the introduction of prepackaged reorganizations and by establishing qualification requirements for receivers.

DB2009 Trading across Borders: The Philippines reduced the time for importing by upgrading the risk-based inspection and electronic data interchange systems.

DB2008 Starting a Business: The Philippines made starting a business more difficult by increasing the paid-in minimum capital requirement.

Source: 2018 Doing Business Report Note: Doing business reform making it easier to do business. Change making it more difficult to do business.

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PH exports to EU seen to exceed $10 Bn in continue to increase by 38.41% to $4.62 billion from $3.32 billion 2017 last year. This makes the EU the 2nd biggest export destination for Philippine-made products next to Japan. Moreover, imports With 1H2017 shipments already totaled to $7.78 billion, from EU increased by 2.07% to $3.16 billion from $3.09 billion. As of 1H2017, major goods exported to the EU were: Philippine exports to European Union (EU) is expected to Electronic Products, $2.147 billion; Machinery and Transport exceed $10 billion this year. Equipment, $945.19 million; Coconut Oil, $435.69 million; Other Manufactured Goods, $187.29 million; and Tuna, $131.99 million. EU Ambassador to the Philippines Franz Jessen said that On the other hand, top imported goods from the EU in 1H2017 they now expect that exports from Philippines to EU will were: Electronic Products, $486.76 million; Transport Equipment, increase, explaining further that the EU is the fastest-growing $427.47 million; Industrial Machinery and Equipment, $415.39 export market for the Philippines among any of its trading million; Medicinal and Pharmaceutical Products, $319.38 partners. Notably, “the Philippines is enjoying, as never million; and Other Food and Live Animals, $231.74 million. before, increased access to the EU’s vast market” on the back Despite these strong figures, the EU delegation in the of Generalized System of Preferences Plus (GSP+) scheme. Philippines “would not commit” if the country will still continue The EU GSP+ allows its beneficiaries full removal of over to enjoy its GSP+ status. This is on the back of President Rodrigo 66% of tariffs for 6,274 products in exchange of agreement Duterte’s tirade to a group of parliamentarians belonging to and compliance to the 27 core international conventions on the Progressive Alliance and Party of European Socialists human and labor rights, environmental protection, as well as who condemned the Duterte administration’s war on drugs. good governance. At present, the EU GSP+ has 9 beneficiaries Hence, the President’s outspokenness could cause a negative namely: Armenia, Bolivia, Cape Verde, Kyrgyzstan, Mongolia, impact on the international perception of the Philippines. Pakistan, Paraguay, Sri Lanka, and Philippines. Hence, the When sought for comment, European Chamber of Philippines is the only Southeast Asian country to earn such status. Commerce in the Philippines (ECCP) president Guenter According to Department of Trade and Industry Secretary Taus said that the business group had grown “immune” Ramon Lopez, “economic relations have been good (with the EU), against such unpredictable and controversial comments even the GSP+ utilization has increased from 2015 to 2016.” He from Pres. Duterte. “We know rhetoric is rhetoric and we added that greater utilization is also expected this year due to the have taken it with a smile. The issue had been addressed increasing number of exporters enjoying the perks of the GSP+. adequately and I think that should be the end of it,” he added. The Philippine Statistics Authority reported that the country’s Meanwhile, Mr. Jessen advised to just wait for external trade in goods with the EU grew to $7.78 billion in 1H2017 the GSP+ report (which will cover 2016 and 2017) up by 21.39% from $6.41 billion in 1H2016 (see table on PH-EU of the commission sometime in January. Bilateral Trade: 1H2017 & 1H2016). Particularly, exports to EU

PH-EU BILATERAL TRADE (IN BILLION U.S. DOLLARS) YEAR TRADE IN GOODS PH EXPORTS TO EU PH IMPORTS FROM EU

1H2017 7.78 4.62 3.16

1H2016 6.41 3.32 3.09 Source: Philippine Statistics Authority

Philippine exports to European Union is expected to exceed $10 billion in 2017, on the back of Generalized System of Preferences Plus scheme.

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Source: EU-Philippines Business Network

Source: EU-Philippines Business Network

The Philippines is the only country in Southeast Asia that enjoys GSP+ status.

The European Union is the 2nd biggest export market of the Philippines.

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PH companies lack awareness on IB According to the report, the companies showed “very low levels of awareness of the IB concept” with an average score of 1.51 Philippine companies showed “very low levels of awareness out of 7 points. UNDP country director Titon Mitra attributed the of the Inclusive Business (IB)1 concept.” The companies low level of awareness to the companies’ ignorance that they are posted an average score of 1.51 out of 7 – scaling from 1 actually already doing IB. There were also companies that do not as “not aware at all” to 7 as fully aware. This is according consider themselves in inclusive businesses. These result in “not to a “Business+ Philippines” study of the Board of being able to go further with it and benefits not being maximized 2 Investments (BoI) and the United Nations Development in terms of reaching the poor ,” the report explained. On the other Program’s Istanbul International Center for Private Sector hand, the respondents believed IB practices were “applicable in their industry and could be successful when applied.” in Development (UNDP-IICPSD). Using Employ Poor People; Target Poor People as Customers/ Consumers; Do Business with the Poor as Suppliers; Do The study “Business+ Philippines,” intends to complement Business with the Poor in the Distribution Channel; Consider the government’s initiative to strengthen IB models through poor people as entrepreneurs in Your Business Model; Invest in advocacy programs and policies. Coming from more than 17 Less Developing Neighborhoods; Emphasize The Poor In Your sectors, the BOI and UNDP-IICPSD measured the level of Mission Statement; and Emphasize the Poor In Your Business inclusiveness among 223 local companies involved in the study. Strategy as indicators determined the level of inclusiveness Half of the respondents were classified under micro, small, of the companies to allow the poor in their business practices. medium-sized companies (51.2%), followed by large national companies (24.7%), multinational companies (15.8%), and social enterprises (8.4%) (see figure on Participants by Company Type).

1 Inclusive Business is defined as ““a private sector approach to providing goods, services, and 2 The term “poor” refers to people who live below the Philippine national poverty line of P9,140 per livelihoods on a commercially viable basis, either at scale or scalable, to people living at the base month for a family of 5 according to the PSA First Semester Report of 2015. of the economic pyramid (BOP) making them part of the value chain of companies’ core business as suppliers, distributors, retailers, or customers.”

PARTICIPANTS BY COMPANY TYPE

Source: UNDP-BOI

“Business+ Philippines” intends to complement the government’s initiative to strengthen IB models through advocacy programs and policies.

The companies showed “very low levels of awareness of the IB concept” with an average score of 1.51 out of 7 points.

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INCLUSIVENESS OF PARTICIPANT COMPANIES

Source: UNDP-BOI

LEVEL OF INCLUSIVENESS BY COMPANY TYPE

Source: UNDP-BOI

The primary challenges for the businesses to achieve inclusive business were the national and local government bureaucracy; Philippines’ regulatory environment; and lack of connections and market information.

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MAJOR ENTRY POINTS OF THE POOR ACCORDING TO COMPANY TYPE

Source: UNDP-BOI

LEVEL OF INCLUSIVENESS BY SECTOR

Source: UNDP-BOI

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Among the aforementioned indicators, Employing Poor People PH attains 95% rice self-sufficiency in 2016 exhibited the highest level of inclusiveness (average score: 4.39). This was followed by Investing in Less Developed Neighborhoods According to the latest Agricultural Indicators Systems (4.03) and Emphasizing the Poor in the Business Strategy report by the Philippine Statistics Authority, the Philippines (3.79) (see table on inclusiveness of participant companies). self-sufficiency ratio on rice has increased to 95.01% in Meanwhile the lowest score was recorded in Targeting Poor 2016 from 88.93% in 2015, indicating less dependence on People as Customers/Consumers (3.35), followed by Doing imports to supply the country’s demand for the staple food. Business with the Poor in the Distribution Channel (3.41). The The improvement was mainly attributed to policy reforms report explained that these indicators could have been the most implemented by the current government. accessible entry point to sustain human economic development. In terms of level of inclusiveness by company type, social As the Philippines marked an improvement in rice self- enterprises had the highest level of inclusiveness (see figure sufficiency, import dependency of rice also had a remarkable on level of inclusiveness by company type). They also showed decrease to 4.99% in 2016 from 11.07% in 2015 (see figure the highest opportunity to include the poor into the value chain on rice dependency ratio). Volume of rice imports declined by - through being employee, consumer, supplier, distribution 58.87% to 609.360 metric tons (MT) in 2016 from 1,481,500 channel members and entrepreneur (see figure on major MT in 2015. In addition, value of rice imports posted a 54.17% entry points of the poor according to company type). “This decrease to $278.87 million in 2016 from $615.70 million in is hardly surprising considering how social enterprises in the 2015 (see figure on rice imports). These values show that the Philippines, by definition, operate,” the study noted. However, Philippines is recovering from the 2015 El Niño phenomenon. “multinational company participants in the Philippines had Further, Department of Agriculture (DA) Secretary lower levels of inclusiveness in allowing the poor to take on Emmanuel Piñol claimed that the local farmers’ rising awareness the role as employees but had relatively high scores for the in using modern technology had significantly contributed to entrepreneur entry point,” it added. The results expressed the the domestic production. He also added that policy reforms necessity to support the poor’s skills development to bridge anchored on free irrigation, banning of rice importation during the gap between them and the large companies’ standards. peak harvest season, mechanization and easier access to credit Meanwhile, arts, entertainment and recreation; agriculture, have motivated the farmers to increase their productivity. forestry and fishing; electricity, gas, steam and air conditioning Fishery products like milkfish, round scad, tilapia, supply; education; and information and communication were crabs and oysters also exhibited a decrease in import the sectors with the highest level of inclusiveness (see figure on dependency. On the other hand, the report showed that level of inclusiveness by sector). Among the sectors, emerging IB agricultural crops such as coffee, garlic, onion, peanut models were noted in agriculture, tourism, health and education. and mango were still highly dependent on importation. According to the respondents, the primary challenges for Another report released by the United Nations’ Agricultural the businesses to achieve inclusive business were the national Market Information System noted the improvement in the and local government bureaucracy; Philippines’ regulatory country’s rice production “despite the tightening of the global environment; and lack of connections and market information. rice market.” The momentum of higher production in 2016 is The study recommended that raising awareness, building believed to be sustained this year. The report also noted that “wet capacity, encouraging collaboration and initiating certain policy season rice planted in the country from July to August are now interventions could improve the inclusive business practices in the tillering stage, while wet season rice which were planted in the country. It is encouraged to expedite policies to reduce earlier had already been harvested.” This brought the National bureaucracy in the government, such as Senate Bill 1311 Food Authority’s optimism to achieve its target “to buy almost or the Expanded Anti Red Tape Act of 2017. However, UN 4.7 million bags of rice from farmers as harvest season starts.” resident coordinator and UNDP resident representative in the However, due to budget constraints, the DA was forced to Philippines Ola Almgrem said “companies can shift focus to extend their rice self-sufficiency goal to 2020. While Sec. Piñol creating commercially viable goods and services that will have lobbies for more budget, he pledged for a more aggressive approach significant social impact while addressing the needs of the poor.” to boost domestic productivity such as the implementation of a hybridization program in 2018 which intends to serve 600,000 hectares as well as solar energy and small irrigation projects. Also a national mechanization program will be launched “to cut post-harvest loss” and a more accessible financing program “to allow farmers to buy better seeds and sufficient farm inputs.”

Import dependency of rice decreased to 4.99% in 2016 from 11.07% in 2015.

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Rice Dependency Ratio 20 18 16 14 12 10 8 6 4 2 0

Source: Philippine Statistics Authority

Rice Imports 1600

1400

1200

1000

800

600

400

200

0 2012 2013 2014 2015 2016 Volume of rice imports ('000 mt) Value of rice imports (in million US$)

Source: Philippine Statistics Authority

Rice production in the Philippines improved despite the tightening of the global rice market.

However, due to budget constraints, the DA was forced to extend their rice self-sufficiency goal to 2020.

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Delays in ecozone application process to be billion worth of investments if they do. As of October 2017, addressed 58 ecozones are pending presidential approval – around 32 of which are buildings meant to be occupied by IT-Business Process The Office of the Executive Secretary (OES) has called for Management (IT-BPM) firms – one of the largest employment generating industries in the Philippines. The delays in the the coordination of the Philippine Chamber of Commerce proclamation have been partly considered as a factor for the and Industry (PCCI), Philippine Economic Zone Authority decline in new IT-BPM investment pledges under PEZA. In the (PEZA), and Department of Trade and Industry (DTI) to 1st half of 2017, ICT investments under PEZA posted a 30.9% address the delays in the application process of new economic drop to P8.5 billion from P12.3 billion in the same period in zones that have resulted in applications piling up at the 2016. Notably, the growth rate of IT pledges has been declining Office of the President (OP) awaiting presidential approval. since 3Q2016 (see BPO investments slowdown in 1H2017). As of November 2017, the OP has released only 7 As a response to the petition of the PCCI to expedite the presidential approval for ecozones – mostly of IT parks and proclamation of new economic zones, Executive Secretary centers, and 2 new inclusions to existing ecozones in Cavite. Salvador Medialdea has requested PEZA and DTI to work DG Plaza reported that PEZA plans to convert at least 300 new together and undertake due diligence to ensure that every economic zones by 2018. “We are really expecting many, many application has been checked thoroughly before sending to types of ecozones. We have now a mega ecozone application, the OES for endorsement. Sec. Medialdea noted that the like 1,000-4,000 hectares – 4,000 hectares in and delay is mainly due to issues they have to address because of 3,000 hectares in Pangasinan. We are really inviting the big the requirements under Republic Act (R.A.) 7916 otherwise private landowners,” DG Plaza said. If the current pace of known as the “Special Economic Zone Act of 1995”. He the release of presidential proclamations continues, PEZA’s stated that pending ecozone proposals lacked “important 2018 target may not be achieved due to accumulated delays. documentation and requirements,” especially land titles. R.A. 7916 mandates that proposed ecozones with PEZA Sec. Medialdea stressed that the PEZA and DTI – not the board approval require an issuance of a presidential approval to OES – are responsible for ensuring that application requirements qualify for incentives. The need for a presidential approval has no are complete. He added that 25 ecozone applications have premise – it adds another layer of bureaucratic process – and can be been approved by the OES and are currently for endorsement repealed. It may be done by the Congress by passing an amendment to the OP, while 33 ecozone proposals still have deficiencies. for R.A. 7916. The approval of an ecozone to qualify for incentives PEZA Director General (DG) Charito Plaza earlier reported should be granted at the PEZA board level with the DTI Secretary that investors are thinking of transferring to Vietnam if the serving as chairman given that they have performed due diligence. delays persist – the country risks losing approximately P500

The delay is due to the requirements under Republic Act 7916 otherwise known as the Special Economic Zone Act of 1995. The pending ecozone proposals lacked “important documentation and requirements,” especially land titles.

The country risks losing approximately P500 billion worth of investments if the delays persist.

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If the current pace of the release of presidential proclamations continue, PEZA’s 2018 target may not be achieved due to accumulated delays.

The need for a presidential proclamation has no premise and can be repealed.

Japanese companies to invest $6 Bn in PH hh DTI/Itochu Corp. for investments in agricultural equipment, after Duterte visit bananas and pineapples production, and irrigation projects; hh DTI/Sumitomo Metal Mining Company Ltd. on expansion in operations in mineral processing; Japanese companies continued to be bullish for investments hh DTI/Taiheiyo Cement Corp. for plant and production related in the Philippines, as 20 Japanese companies pledged to invest to infrastructure expansion projects; $6 billion worth of investments through business agreements hh DTI/Tsuneishi Shipbuilding Company Ltd. and DTI on with the Philippine government and local companies. medium-sized marine vessels manufacturing; hh DTI/Ministop Company Ltd. and DTI/Lawson Inc. on HR President Rodrigo Duterte’s working visit in Japan is training programs and outlet expansion in the Philippines; expected to bring in an estimated total of $6 billion worth h of fresh investments if followed through by legally-binding h Department of Finance (DoF)/Japan Tobacco Inc. for agreements. According to the Department of Trade and Industry expansion of operations and to contribute to the DoF’s (DTI), Japanese companies expressed their interest to invest in improved revenue collection; the sectors of agriculture, renewable energy, manufacturing, hh Department of Energy/Tokyo Gas Company Ltd. on a joint services, environment, and research and development. DTI study on natural gas usage in the Philippine domestic market Secretary Ramon Lopez said that the growing number of Japanese with the Japanese Ministry of Economy, Trade and Industry corporations interested in partnering with Philippine enterprises (METI); reflects the value proposition of the country as a favored destination hh Alsons or AWS Information Systems, Inc./Ubicom for Japanese Foreign Direct Investments (FDIs). He added that Holdings Inc./Advanced World Solutions Inc. for a software projects ranging from retail, commercial, and residential property development outsourcing, testing, and R&D project on data development are definite signs of a growing modern economy. analytics, automation, Internet of Things (IoT), automative Pres. Duterte witnessed the signing of 18 business agreements that software development outsourcing, enterprise systems and consist mostly of expansion deals for operations in the Philippines web application, embedded systems, and mobile systems and interest to pursue joint ventures. These were the following: development; hh DTI/Marubeni Corp. on power, railways and water projects;

The growing number of Japanese corporations interested in partnering with Philippine enterprises shows the value proposition of the country as a favored destination for Japanese FDIs.

Philippine ANALYST BUSINESS November-December 2017 85 BUSINESS

These incoming investments are expected to generate around 500,000 jobs, raise business standards, and improve business efficiency.

hh CIS Bayad Center Inc./Densan System Company Ltd. for hh SteelAsia Manufacturing Corp./Yamato Kogyo for an business processing management (IT-BPM) agreement on integrated steel plant; and financial technology; hh Metro Pacific Investments Corp./Itochu Corp. on additional hh Bases Conversion and Development Authority (BCDA)/ renewable energy projects and infrastructure projects. Hitachi Asia for information and communications (ICT), These business deals include projects in areas earmarked transportation and urban development projects; as strategic to sustainable development and inclusive growth hh Meralco/Hitachi Ltd. on stationary Battery Energy Storage (i.e. agriculture, renewable energy, manufacturing, services, System (BESS); environment, research and development). These incoming hh Subic Bay Metropolitan Authority (SBMA)/Newcoast investments are expected to generate around 500,000 jobs, raise Southbeach Realty Inc./List Company Ltd. on mixed property business standards, and improve business efficiency. Sec. Lopez development projects in Subic Freeport; noted that the projects are not only committed to infuse capital into the Philippine economy but also induce technology transfer hh SBMA/Subic Smart Community Corp. for mixed property and human resource development programs. “Ultimately, these development projects in Subic Freeport; projects will help chart greater trade and investment engagements hh Federal Land/Nomura Real Estate Development Company between our 2 countries in order to generate broader inclusive Ltd./Isetan Mitsukoshi Holdings Ltd. on a commercial/ growth and shared prosperity for all,” Sec. Lopez added. residential complex that will soon rise in Bonifacio Global City;

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MINING, OIL, & GAS The AMA was established to honor mining companies from the ASEAN countries for their contributions in the advancement of responsible and environment-friendly mining. It is a project of the Special Task Force (STF) under the ASEAN Senior Officials PH mining firms recognized at the 1st ASEAN Meeting on Minerals (ASOMM). The winners were chosen Mineral Awards by the Board of Judges, which consists of 10 representatives from the ASEAN Member States, with Indonesia as the chair. Two mining companies in the Philippines were recognized According to its guidelines, the AMA aims to promote in the 1st Association of Southeast Asian Nations (ASEAN) environmentally and socially sustainable mineral development; Minerals Awards (AMA) for their achievements to support improve the general perception/image of the mineral industry; an environmentally and socially sustainable minerals sector. disseminate best practices in the mineral sector (mining, The award was given during the 6th ASEAN Ministers transportation, processing, etc.); increase public awareness on Meeting on Minerals (AMMin) last November 30 in Nay Best Practices in Environmentally and Socially Sustainable Pyi Taw, Myanmar. Mineral Development; improve and enhance the Best Practices in mineral industries; strengthen regional cooperation and encourage OceanaGold Philippines, Inc. was cited as the Best for sharing of expertise; and encourage private sector participation Mineral Processing among all miners across the ASEAN region, for community development. while Nickel Asia Corp (NAC)’s subsidiary, Rio Tuba Nickel The AMMin also acknowledged best practices in a range of Mining Corp. (RTNMC) topped the Best Mineral Mining mineral products and processes: category. Both OceanaGold and NAC are WBF members. hh Mining of nickel laterite in the Philippines (Rio Tuba), gold For the Best Practices in Minerals Distribution category, in Indonesia (PT Nusa Halmahera), and limestone quarrying PT Amman Mineral Nusatenggara from Indonesia bagged in Thailand (Siam Cement Kaeng Khoi); the award, while Pipatkorn Co. Ltd from Thailand was the hh Processing of ferronickel in Indonesia (PT Antam), gold ore runner-up. The Philippines has no entry in this category in the Philippines (OceanaGold), and copper cathodes in Lao (see table on 1st ASEAN Mineral Awards Winners.) PDR (MMG Lanxang);

1ST ASEAN MINERAL AWARDS WINNERS

BEST PRACTICE IN MINERAL MINING WINNER MINING OPERATION Rio Tuba Nickel Mining Corp. (RTNMC) - Philippines Nickel Laterite Mining in Rio Tuba, Palawan, Philippines RUNNER-UPS PT Nusa Halmahera Minerals (Indonesia) Gosowong gold mine in North Maluku Province, Indonesia. Siam Cement Kaeng Khoi (Thailand) Limestone Quarrying in Saraburi Province, Thailand BEST PRACTICE IN MINERAL PROCESSING WINNER OceanaGold Philippines, Inc. Processing Didipio Mines Ore in Nueva Vizcaya, Philippines RUNNER-UPS PT Antam Persero Tbk (Indonesia) Indonesia MMG Lanxang Minerals Ltd. (Lao PDR) Copper Cathode Processing in Savannakhet, Lao PDR BEST PRACTICES IN MINERALS DISTRIBUTION WINNER PT Amman Mineral Nusatenggara (Indonesia) Copper Concentrates from Sumbawa Island, Indonesia RUNNER-UP Pipatkorn Co. Ltd (Thailand) Feldspar Mineral Products from Tak Province, Thailand

Source: Association of Southeast Asian Nations (ASEAN)

The AMA was established to honor mining companies from the ASEAN communities for their contributions in the advancement of responsible and environment-friendly mining.

Philippine ANALYST BUSINESS November-December 2017 87 BUSINESS hh Distribution of copper concentrates from Indonesia (PT come together to launch this kind of award. This is a big deal. This Amman); and feldspar minerals in Thailand (Pipatkorn). is ASEAN. We are going beyond our shores,” Mr. Brimo added. The AMMin emphasized that the recognition of these Department of Environment and Natural Resources Secretary companies and the promotion of their best practices will Roy Cimatu earlier said the Duterte administration will continue help raise performance by making good examples accessible, to push for responsible mining in the country. Sec. Cimatu encourage government and industry to aspire to higher basically gave the sector a chance to redeem itself for “failing” standards, as well as spur better ways of doing things. the country and the people for being associated with environmental The entries of the Philippines for the AMA were chosen from degradation, social injustice, corporate greed, and utter among the mining firms that participated in the competition last irresponsibility. In addition, he wants to see the sector’s contribution March 2017. The firms were screened by the PH-AMA Committee to the Philippine economy grow by double digits in the future. composed of technical experts from the Mines and Geosciences The recognition given to the Philippines’ top mining Bureau (MGB), which is the designated Focal Point for the PH-AMA. firms only reveals that responsible mining is doable, Even before the results of the AMA were announced, highlighting that the industry could undeniably contribute Philippine Mine Safety and Environment Association to sustainable development. This could also sends a positive (PMSEA) President Louie Sarmiento said that he has no signal to encourage more investments in the mining sector. doubt that the 2 companies will bag the major awards as the mining firms are also 2 of the consistent winners of Presidential Mineral Industry Environmental Award (PMIEA). Meanwhile, NAC President and CEO Gerald Brimo noted that the awards prove to the world that the Philippines’ mines are world-class. “This is the first time that ASEAN countries have

The PH mining firms are also 2 of the consistent winners of Presidential Mineral Industry Environmental Award (PMIEA).

The Duterte administration will continue to push for responsible mining in the country.

Philippine ANALYST BUSINESS November-December 2017 88 BUSINESS

I.T. UPDATE 176 countries) (see table on 2017 IDI Rankings and Ratings of ASEAN Countries). The country’s score in terms of fixed- telephone subscriptions per 100 inhabitants (from 3.2 in 2015 to 3.7 in 2016) and international internet bandwidth per internet PH still lags in ICT development user (from 28.4 kbit/s to 43.4 kbit/s) were remarkably higher. Despite being the fastest growing internet population The Philippines continues to lag behind in terms of in the world, only 34% of all households have a Information and Communication Technology (ICT) computer, while only 39% of households have an internet development. This is according to the latest report of access (see figure on Key Indicators for Philippines) the International Telecommunication Union (ITU), the When compared to its ASEAN neighbors, the Philippines specialized agency for ICT of the United Nations. ICT development ranking did reasonably well than Viet Nam (4.43) and Indonesia (4.33) but still trailed behind Singapore Based on the “Measuring the Information Society (8.05), Brunei (6.75), Malaysia (6.38) and Thailand (5.67). (MIS) Report,” the Philippines ranked 101st in the ICT The ITU noted that despite having a largely duopoly Development Index 2017 (IDI) among 176 countries market, the Philippines has achieved a high level of basic worldwide. The country’s ranking was one step lower than mobile access and has deployed the latest wireless and fixed last year’s ranking. However, the Philippines got a higher technologies with high download speeds — at least in urban value as it grew 4.67 points on the index, compared to 2016’s areas. In addition, the country is also well endowed with 4.52 points growth. The ITU IDI 2017 is a benchmark of international internet bandwidth driven by its large overseas the level of ICT development in countries across the world. population and burgeoning business process outsourcing industry. Iceland topped this year’s IDI ranking with an 8.98 index According to the MIS report, globally, this year's concurrent score, followed by the South Korea (8.98); Switzerland advances in the Internet of Things, big data analytics, cloud computing (8.74); Denmark (8.71); United Kingdom (8.65) and Hong and artificial intelligence (AI) will enable tremendous innovations Kong (8.61). South Korea, Hong Kong and Japan were the and fundamentally transform business, government and society top Asian countries with the highest IDI values globally – ultimately serving to improve livelihoods around the globe. (see table on Top 10 performers in ICT Development Index). The ITU added that the latest data on ICT development The IDI measures the development of ICT of each show continued progress in connectivity and use of ICTs. 176 countries through 3 sub-indices: ICT access, ICT use, There has been sustained growth in the availability of and ICT skills (see box on Sub-Indices of the IDI 2017). communications in the past decade, led by growth in mobile Among the sub-indices, the Philippines performed well in cellular telephony and, more recently, in mobile-broadband. terms of ICT skills (86th of 176 countries), but ranked poorly in ICT use (99th of 176 countries) and ICT access (104th of

TOP 10 PERFORMERS IN ICT DEVELOPMENT INDEX

Source: International Telecommunication Union (ITU)

The country’s ranking was one step lower than last year’s ranking.

Philippine ANALYST BUSINESS November-December 2017 89 BUSINESS

KEY INDICATORS FOR PHILIPPINES

Source: International Telecommunication Union (ITU)

2017 IDI RANKINGS AND RATINGS OF ASEAN COUNTRIES

IDI ICT ACCESS ICT USE ICT SKILLS COUNTRY Rank Rate Rank Rate Rank Rate Rank Rate Singapore 18 8.05 12 8.61 24 7.45 37 8.14 Brunei 53 6.75 44 7.47 44 6.30 83 6.23 Malaysia 63 6.38 62 6.93 48 6.17 101 5.70 Thailand 78 5.67 91 5.48 68 5.33 70 6.72 Philippines 101 4.67 104 4.87 99 3.70 86 6.20 Viet Nam 108 4.43 108 4.75 102 3.65 113 5.31 Indonesia 111 4.33 105 4.85 115 3.19 109 5.54 Cambodia 128 3.28 124 4.16 119 2.56 150 2.98 Myanmar 135 3.00 139 3.48 121 2.43 146 3.21 Lao PDR 139 2.91 140 3.47 132 1.90 136 3.78 Source: International Telecommunication Union (ITU)

The Philippines has achieved a high level of basic mobile access and has deployed the latest wireless and fixed technologies with high download speeds — at least in urban areas. This is despite having a largely duopoly market.

Philippine ANALYST BUSINESS November-December 2017 90 BUSINESS

SUB-INDICES OF THE ICT DEVELOPMENT INDEX (IDI)

1) The “ICT access” sub-index measures ICT infrastructure and readiness through 5 indicators: fixed telephone subscriptions; mobile cellular subscriptions; international internet bandwidth; percentage of households with a computer; and percentage of households with internet access. 2) The “ICT use” measures the uptake of Information and Communications Technologies (ICTs) and the intensity of usage. The indicators of ICT use are: number of internet users, fixed broadband subscriptions, and wireless broadband subscriptions. 3) The “ICT skills” category measures the industry’s level of human capacity and its population’s ability to use ICTs through adult literacy rate, gross secondary enrollment ratio, and gross tertiary enrollment ratio.

Based on the current standing of the Philippines, the country The project intends to build the Bypass Infrastructure should be more aggressive in developing its ICT infrastructure (LBI), an ultra high-speed information highway that will and policies in order to compete with its ASEAN neighbors. The greatly improve the speed, affordability, and accessibility country will surely benefit on the government’s plan to establish of broadband internet across the country. Once completed, a National Broadband Plan, which will accelerate the Philippines’ the government said it can offer Internet speeds of up broadband infrastructure deployment and improve public access. to 100 megabits per second (Mbps). The LBI project is expected to be completed and operational by end of 2019. Under the project, the BCDA will build the LBI, consisting of 2 cable landing stations located in Baler, Aurora and in Poro Point, Gov’t to build its 1st cable landing stations San Fernando, La Union. It will be connected by a 250-kilometer long cable network corridor. DICT Officer-in-Charge Eliseo Rio Jr. In line with President Rodrigo Duterte's directive to develop said the infrastructure takes advantage of the Philippine geography the National Broadband Plan (NBP), the Philippine since it would provide a bypass route for international submarine government is building an ultra high-speed broadband cable owners “seeking diversity from the Luzon Strait”, which has infrastructure throughout the country. It is projected to be a history of multiple simultaneous submarine cable breakdowns. completed by the end of 2019. Facebook would be the 1st to make use of this infrastructure. As the 1st party to utilize the LBI, Facebook will construct and The Department of Information and Communications operate a submarine cable system that will land in the cable stations Technology (DICT) and the Bases Conversion and Development on the east and west coasts of Luzon. The cable will provide direct Authority (BCDA) has launched a major ICT infrastructure connections from Luzon to Internet hubs in the U.S. and Asia. project, also known as the Strategic Engagement and Facebook will also provide the Philippine government Collaboration to Undertake a Reliable and Efficient Government with a bandwidth of at least 2 million Mbps (or 2-terabyte Internet (SECURE GovNet), in partnership with social media giant Facebook. It was formally unveiled last November 15.

The project intends to build the Luzon Bypass Infrastructure (LBI).

Philippine ANALYST BUSINESS November-December 2017 91 BUSINESS

The cable will provide direct connections from Luzon to Internet hubs in the United States and Asia.

The LBI is a game changer.

per second (Tbps)). Usec. Rio added that this 2-million Mbps BCDA Chief Executive Officer Vivencio Dizon noted that capacity is almost equal to the current combined capacity of the project is a ‘game changer.’ “It’s going to change the way we Globe Telecom and Smart-PLDT, making the government communicate in our country, and it’s going to alleviate the daily ‘virtually’ a 3rd player in the telecommunications industry. struggles of people with respect to the internet,” Mr. Dizon added. “We will just provide the infrastructure. The infrastructure It is essential for the country to remain competitive in is the heaviest capital outlay of a telco,” he explained. terms of ICT development, knowing the country is suffering Meanwhile, the DICT will operate the LBI, maintain the related from lack of ICT infrastructure due to the debilitating facilities and provide last mile connectivity in the Philippines. bureaucracy and permitting issues that local telco operators Usec. Rio explained that the project was an “integral part” are facing. But with the recent launch of LBI, the government of the NBP, significantly cutting the government’s internet costs is starting to invest in the development of the country’s ICT while at the same time improving internet speed. He said that the infrastructure and ICT-enabled services. It is a good indication new broadband infrastructure is expected to dramatically improve for our country, as well as for investors. The LBI will have Internet speed and increase availability throughout the country a critical contribution to the global Internet infrastructure. to support the DICT’s flagship programs such as the Free Public Internet Access, the National Government Portal, and other ICT projects of government line agencies and local government units.

Philippine ANALYST BUSINESS November-December 2017 92 BUSINESS

LIST OF BOI-REGISTERED PROJECTS - OCTOBER-NOVEMBER 2017

PROJECT COST EQUITY INDUSTRY ACTIVITY (IN PHP MILLION) LOCAL/FOREIGN

AGRICULTURE, FORESTRY, AND FISHERY

54% Chinese Producer of coco fiber and coco peat in Purok Kumassie, Brgy. Basiawan, All Bright Resources International, Inc. 36.00 44% Canadian Sta. Maria, Davao del Sur 2% Filipino

Producer of broiler chicken under contract growing scheme in Brgy. San Majent Agro-Industrial Corporation 242.40 100% Filipino Vicente, Dasol, Pangasinan Biotech Farms, Incorporated Producer of table eggs and culled layer in Bo. 6 Banga, South cotabato 650.00 98% Filipino Producer of raw sugar and its by-products (molasses) in Sitio Sacsac, Brgy. HDJ Bayawan Agri-venture Corp. 489.58 100% Filipino Bugay, Bayawan City, Negros Oriental ELECTRICITY, WATER, AND GAS

Renewable energy developer of wind energy resources (151.2MW Currimao Solar Energy Corp. 15,277.96 99.99% Filipino Calatagan Wind Power Project) in Nasugbu - Calatagan,

Renewable energy developer of wind energy resources (50.4MW Talisay Currimao Solar Energy Corp. 4,751.16 99.99% Filipino Wind Power Project) in Labo, Vinzons and Talisay, Camarines Norte

RE Developer of Solar Energy Resources 100.8MW Naic Solar Power Project 90% Filipino Ormoc Solar Energy Corp 6,606.59 inNaic, Tanza, Cavite and Trece Martires City Cavite 10% Australian

RE Developer of Solar Energy Resources 40.32MW Lumban Solar Power 90% Filipino Nuevo Solar Energy Corp 2,721.84 Project (Lumban, Laguna) 10% Australian

RE Developer of Solar Energy Resources 25.2MW Bangyas Solar Power 90% Filipino Nuevo Solar Energy Corp 1,686.38 Project in Brgy. Bangyas, Calauan, Laguna 10% Australian

Renewable energy developer of Biomass resources (24MW Maasim Biomass Natures Renewable Energy Dev't Corp. (NAREDCO) 2,623.42 100% Filipino Power Plant) in Maasim, Saranggani Natures Renewable Energy Dev't Corporation Renewable energy developer of 100MW Lal-lo Solar Power Plant Projects 6,000.30 100% Filipino (NAREDCO) in Lal-lo, Cagayan Natures Renewable Energy Dev't Corporation Renewable energy developer of 100MW Maasim Power Plant Projects in 6,000.30 100% Filipino (NAREDCO) Maasim, Saranggani Renewable energy developer of Biomass resources (24MW Lal-lo Biomass Natures Renewable Energy Dev't Corp. (NAREDCO) 2,623.42 100% Filipino Power Plant) in Lal-lo, Cagayan Prov Renewable energy developer of solar energy resources (27.27MW DC - 22.5 MWAC) Hayes Solar Power Project in Phividec Industrial Estate of 60% Filipino Hayes Solar Energy Corporation 1,139.18 Special Economic Zone, Tagoloan & Villanueva, Misamis 40% Singaporean Oriental Renewable energy developer of solar energy resources (10MW Currimao Currimao Solar Energy Corp. 669.55 99.99% Filipino Solar Power Project) in Currimao, Ilocos Norte

Renewable energy developer of solar energy resources (126MW Mauban 90% Filipino Ormoc Solar Energy Corp 8,250.64 Solar Power Project) in Pagbilao, Quezon 10% Australian

Renewable energy developer of solar energy resources (45MW Bataan Horus Solar Energy Corp. 3,013.57 99.96% Filipino Solar Power Project) in Morong, Bataan

RE Developer of Solar Energy Resources 6.3MWp Dona Isabel Power Dona Isabel Power Corporation 407.75 100% Filipino Corporation Solar Farm in 78 Gonzales Ave., San Juan, Apalit, Pampanga

Producer of Hi Carbon Fly Ash (Eco Therm) and Low Carbon Fly Ash Armstrong Fly-Ash and Logistics Company, Inc. 345.00 100% Filipino (ProAsh) in Brgy. Akle, San Ildefonso, Bulacan HOTEL, RESTAURANT, AND LEISURE SERVICES Operator of tourist accommodation facility (Yello! Hotel) in Wilson St., Gothong Southern Properties, Inc. 392.67 100% Filipino Lahug, City

Operator of tourist accommoation facility (Awesome Hotel Phase 2) in San 60% Filipino Awesome Hotel Inc. 209.82 Juan, La Union 40% Singaporean

Operator of tourist accommodation facility (Seda Lio Resort) in Lio Econorth Resort Ventures, Inc. 1,674.33 100% Filipino Tourism Estate, Village Libertad, El Nido, Palawan IT AND IT-ENABLED SERVICES Operator of telecommunications system under strategic services 60% Filipino Infinivan, Inc. telecomm/ wired/wireless broadband internet services (Infinivan Super 393.28 40% Japanese Wifi Network - Phase 1) in Phase 1 - Luzon Area MISCELLANEOUS MANUFACTURES 73% Filipino Producer of compound fertilizers in MGC compound, Brgy. Basco Country, La Filipina Uy Gongco Corporation 434.44 27% Chinese & Mariveles, Bataan Americans OFFSHORING AND OUTSOURCING

Krisp Systems Philippines, Inc. Software development and support services 10.53 99.88% Singapore

Philippine ANALYST BUSINESS November-December 2017 93 BUSINESS

Round Earth Philippines, Inc. BPO - Remorte Staffing Services 4.60 99.99% Malaysian

PETROLEUM PRODUCTS Bulk marketing of petroleum products (Calapan Oriental Mindoro Oil 91%Filipino Phoenix Petroleum Philippings, Inc. Depot with 4.99 Million Liters Combined Capacity of 2 Storage Tanks in 275.00 9% British Brgy. Lazareto, Calapan, Oriental Mindoro

Bulk marketing of petroleum products (Sogod Cebu LPGTerminal with Pryce Gases, Inc. (PGI) 188.81 98.98% Filipino additional 1200MT storage tank capacity) in Sogod, Cebu

Bulk marketing of petroleum products (Balingasag, Misamis Oriental Pryce Gases, Inc. (PGI) LPGTerminal with additional 2000MT storage tank capacity) inBrgy. 258.83 98.98% Filipino Baliwagan, Balingasag, Misamis Oriental Bulk marketing of petroleum products (Villanueva, Misamis Oriental Oil 91% Filipino Phoenix Petroleum Philippines, Inc. Terminal with 49.70 Million Liters combined capacity of 6 storage tanks) in 302.50 9% British UK Brgy. Katipuna, Villanueva, Misamis Oriental REAL ESTATE AND PROPERTY DEVELOPMENT

Developer of economic and low-cost housing project (Prima Clove Tanza Tanza Properties III, Inc. 636.90 100% Filipino Phase 3 - Horiozntal) in Brgy. Tanauan, Tanza, Cavite

Developer of economic and low-cost housing project (Deca Homes Pavia 8990 Housing Development Corporation 1,065.82 100% Filipino Resort Residences Phase 2 - Horizontal) in Pavia, Iloilo

Developer of economic and low-cost mass housing project (Villa Zaragosa 78% Filipino The New Apec Development Corporation 1,038.83 Phase II - Horizontal) in Brgy. Turo, Boacaue, Bulacan 22% Chine PROC

Developer of economic and low-cost housing project (Lynville Residences Lynville Realty & Development Corporation 48.23 100% Filipino Bauan) - Brgy. As-is, Bauan, Batangas

Developer of mass housing project (La Aldea del Mar Phase 4 - Horizontal) Pueblo de Oro Development Corporation 208.31 99% Filipino in Sitio Judas Belt, Brgy. Babag, Lapu-lapu City

Developer of economic and low-cost housing project (Ventural Real - 72% Filipino Filinvest Land, Inc. 488.64 Horizontal) in Ventura real at pueblo Solana, Brgy. Bubuyan, Calamba City 28% Singaporean

Developer of economic and low-cost housing project (Adamah Homes Damaru Property Ventures Corporation 57.48 100% Filipino North - Horizontal) in Jugan, Consolacion, Cebu Developer of economic and low-cost housing project (Sunrise Point Borland Development Corporation 218.90 100% Filipino Subdivision - Batch) in Brgy. Inosluban, Lipa City Sr. Sto. Niño de Cebu Resources and Development Developer of low-cost housing project (Madison Garden II - Horizontal) in 47.89 100% Filipino Corp. Brgy. San Roque, Sto. Tomas, Batangas Developer of economic and low-cost housing project (Casa Feliz - Hellenes Land, Inc. 315.42 100% Filipino Horizontal) in Brgy. Pusil, Lipa City, Batangas Developer of economic and low-cost housing project (Crestwood Heights - Household Development Corporation 112.00 100% Filipino Horizontal) in Brgy. San Luis, Antipolo City Developer of economic and low-cost housing project (Summer Pine Bilkenn Corporation Subdivision Phase 2 - Horizontal) in Brgys. San Jose 1 and San Jose II, San 194.99 100% Filipino Antonio I, Noveleta, Cavite

Developer of economic and low-cost housing project (Gran Avila Phase 4 - Stateland, Inc. 163.85 99.89% Filipino Horizontal) in Brgys. Majada nad Sirang Lupa, Calamba City

TRANSPORT SERVICES Operator of green ship recycling (environment or climate change- Tsuneishi Ship Recycling (Negros), Inc. related project) in Sitio Salvacion, Brgy. Bacuyangan, Hinoba-an, Negros 3,785.65 100% Japanese Occidental TOTAL 76,062.74

Philippine ANALYST BUSINESS November-December 2017 94 BUSINESS

PEZA APPROVED PROJECTS -2nd QUARTER 2017 EQUITY INDUSTRY ACTIVITY ZONE LOCAL/FOREIGN APPAREL AND TEXTILE MANUFACTURES Manufacture of men's and women's underwear such as 98% - Korean DCT MFG. INT'L. INC. Golden Mile Business Park - SEZ brassieres and panties 2% - Filipino AUTOMOTIVE TRADE GOSHI PHILIPPINES, INCORPORATED Assembly of K89 muffler 100% - Japanese Laguna Technopark - SEZ CHEMICAL AND CHEMICAL PRODUCTS

58% - Syrian PHILI BIO PEAT, INC. Manufacture and export of coco fiber and peat products 28% - Emirati Gensan Economic Zone 14% - Filipino

ELECTRICITY, WATER, AND GAS FDC RETAIL ELECTRICITY SALES Economic Zone Utilities Enterprise-Retail Electricity Supplier 100% - Filipino Northgate Cyberzone CORPORATION (RES) Kamanga Agro-Industrial Economic SARANGANI ENERGY CORPORATION Coal-fired power plant facilities by another 105MW 100% - Filipino Zone ELECTRONICS Manufacture and processing of micro electro-mechanical AM SWISS MICROTEC INC. 99.94% - Korean Mactan Economic Zone components Engage in M-Series system for advanced semiconductor DECA TECHNOLOGIES INC. (PHIL. BRANCH) 100% - American Laguna Technopark - SEZ packaging technology Manufacture, repair and rework of other related gadgets of EMS COMPONENTS ASSEMBLY, INC. 100% - Filipino Laguna Technopark - SEZ LED Luminaires Assembly of mobile communication equipment; manufacture GLOBAL MOULDING TECHNOLOGY, INC. of radio transceivers; pager units; and assembly and repair of 99.99% - Japanese Cavite Economic Zone DC-DC converter Remanufacture, repair, assembly, test and export of various HARVESTAR TECHNOLOGIES INC. wireless mobile devices, products, components, systems and 100% - Hong Kong Light Industry & Science Park III - SEZ related accessories IONICS EMS, INC. Manufacture of LCD and touch panel for mobile phone 98.12% - Filipino Light Industry & Science Park I - SEZ Engage in assembly, manufacturing of transformer, AC DC KYUNG IL MANUFACTURING PHILS. INC. 99.89% - Korean Angeles Industrial Park - SEZ reactor, inductor, etc. OPTOWAVE MANUFACTURING PHILIPPINES Manufacture of computer periphiral 99.8% - Korean Cavite Economic Zone INC. Engage in repair of semiconductor equipment and parts and PTW PHILIPPINES PRIVATE CO. LTD. 99.9% - Singaporean Pampanga Economic Zone maintenance services STMICROELECTRONICS, INC. B800 project 99.99% - Dutch Light Industry & Science Park II - SEZ STMICROELECTRONICS, INC. Manufacture of DAM and Fill - D18 99.99% - Dutch Light Industry & Science Park II - SEZ Manufacture of LED Lights, Lighting Luminaires and other TAOLIGHT PHILIPPINES INC. 99.90% - Hong Kong Laguna Technopark - SEZ related products TSUKIDEN ELECTRONICS PHILIPPINES, INC. Engage in Ink jet printer control board assembly 99.99% - Japanese Laguna Technopark - SEZ FOOD AND BEVERAGE MANUFACTURES DASOLand: A Family Adventure and FULL CIRCLE CRAFT DISTILLERS CO., INC. Engage in the production of high quality artisanal spirits 100% - Filipino Leisure Park MACHINERY AND EQUIPMENT

JIO MHW GLOBAL CHANNEL Fabrication of metal parts and assembly & development of 99% - Korean People's Technology Complex - SEZ MANUFACTURING CORP. automated machines 1% - Filipino

METAL INDUSTRIES

92% - Taiwanese ASAM INDUSTRIES INC. Manufacture of CNC machined and fabricated metal parts Carmelray Industrial Park I - SEZ 8% - Chinese

Bessup, Inc. Fabrication of heat transfer equipment 99.99% - Singaporean Hermosa Ecozone Industrial Park

Fabrication of pressure vessel and accessories, piping, Filinvest Technology Park Calamba GC GENTECH METAL FABRICATION INC. 100% - Filipino machining semicon parts and tooling parts - SEZ

GLOBAL MOULDING TECHNOLOGY, INC. Manufacture of snap ring plier for electronic mechanical parts 99.99% - Japanese Cavite Economic Zone GLOBAL MOULDING TECHNOLOGY, INC. Fabrication of jigs 99.99% - Japanese Cavite Economic Zone LU JUN PRECISION INDUSTRIAL CORP. Manufacture of precision metal work pieces and metal parts 100% - Taiwanese Golden Mile Business Park - SEZ MKP, INC. Manufacture of fabricated metal and aluminum parts 99.99% - Japanese Cavite Economic Zone Engage in component assembly of bill dispensing unit for THREE BRIGHT SUN DIAMOND CORPORATION 99.99% - Japanese Laguna Technopark - SEZ automated teller machines (ATM)

78% - Japanese YKY PARTS CORPORATION General fabrication and assembly of all metal or plastic parts Cavite Economic Zone 22% - Filipino

Philippine ANALYST BUSINESS November-December 2017 95 BUSINESS

MISCELLANEOUS MANUFACTURES

SQUAREONE MANUFACTURING 60% - Filipino Manufacture of handcrafted ceramic tiles Laguna Technopark - SEZ CORPORATION 40% - Italian

OFFSHORING AND OUTSOURCING ACCENTURE, INC. IT security and IT service management services 99.99% - Dutch Uptown Bonifacio ALORICA PHILIPPINES, INC. Call center operations 99.99% - American SM City Lipa Business process outsourcing (BPO) services and call center ARVATO CORP. 99.99% - German Northgate Cyberzone operations CATAPULT INTERNATIONAL, LLC PHIL. Software development, global support and managed services 100% - American Norkis Cyberpark BRANCH OFFICE CITIGROUP BUSINESS PROCESS SOLUTIONS IT-enabled services, encompassing call centers, data encoding, 100% - Singaporean W North PTE.LTD. transcribing and processing COGNIZANT TECHNOLOGY SOLUTIONS Customer services, by handling inbound/outbound calls, IT 99.98% - American McKinley Hill Cyberpark PHILIPPINES, INC. infrastructure services Business process outsourcing (BPO) services and call center 100% - British Virgin CONCENTRIX SERVICES CORPORATION operations Islander DIAGEO ASIA PACIFIC SHARED SERVICES Business process services (BPO) services 99.99% - Dutch McKinley West CENTRE LIMITED, INC. DIAGEO ASIA PACIFIC SHARED SERVICES Business process services (BPO) services 99.99% - Dutch Uptown Bonifacio CENTRE LIMITED, INC. DOVER BUSINESS SERVICES PHILIPPINES Business process services (BPO) services 99.99% - Dutch Cebu I.T. Park CORPORATION

Concept sketches and renderings and development drawings; 44% - Filipino DWG INK INTERNATIONAL CORPORATION CAD/REVIT drawing documents; CGI or 3D renderings; and VR 28% - Singaporean Summit One Office Tower and animation production 28% - British

96% - Australian EMAPTA VERSATILE SERVICES INC. Business process outsourcing (BPO) services using e-commerce 3% - Filipino Cyberpark 1% - Japanese ESSILOR SHARED SERVICES PHILIPPINES Software development and application services 99.96% - Dutch One Global Place INCORPORATED ESSILOR SHARED SERVICES PHILIPPINES Software development and application services 99.96% - Dutch Capella IT Center INCORPORATED FPT SOFTWARE PHILIPPINES CORP. Managed services for Helpdesk support for Customer Solutions 99.99% - Vietnamese Cebu I.T. Park Software development, web-based creative development and HARBOUR IT ASIA - PHILIPPINE BRANCH 100% - Australian E-Square I.T. Park IT administration services KNOWLES ELECTRONICS (PHILIPPINES) Business process outsourcing (BPO) services using e-commerce 99.99% - Singaporean Cebu Light Industrial Park - SEZ CORPORATION KORN FERRY FUTURESTEP (THE Business process services (BPO) services 99.99% - Singaporean BGC Corporate Center PHILIPPINES) INC. MICROSOURCING PHILIPPINES INC. Business process services (BPO) services 99.99% - Hong Kong Eastwood City Cyberpark OMEGA HEALTHCARE MANAGEMENT Business process services (BPO) services 99.99% - American Avenir SERVICES INC. PMAXGLOBAL PHILIPPINE BRANCH Business process services (BPO) services 100% - American Robinsons Galleria Cebu

60% - Filipino REST SOLUTION CORP. Call center operations Northgate Cyberzone 40% - French

RMS COLLECT PHILS. INC. Business process services (BPO) services 99.99% - American Two Sanparq Business process outsourcing (BPO) services and call center S&P GLOBAL PHILIPPINES INC. 99.99% - American 6750 Ayala Avenue Bldg. operations Business process outsourcing (BPO) services and call center S&P GLOBAL PHILIPPINES INC. 99.99% - American MSE Center operations SC RESERVATIONS (PHILIPPINES), INC. Partial transfer of operations (BPO services) 100% - American V-Corporate Centre SUPERGENE GLOBAL SERVICES, INC. BPO-digital content production outsourcing services 99.99% - Korean Robinsons-Equitable Tower SYKES ASIA INC. Call center operations 99.993% - Dutch Robinsons Galleria Cebu SYNCHRONY GLOBAL SERVICES PHILIPPINES, Call center operations 99.99% - American CBP-IT Park INC. TAKENAKA CORPORATION PHILIPPINE CAD Engage in preparation of building information modeling, 2D & 100% - Japanese The Enterprise Center CENTER 3D shopdrawing TECHLOG CENTER PHILIPPINES. Business process services (BPO) services 100% - American Lakeside Evozone TERADYNE PHILIPPINES LTD... Business process services (BPO) services 100% - American Cebu Light Industrial Park - SEZ TFI SOLUTIONS PHILIPPINES INC. Business process services (BPO) services 100% - Filipino Burgundy Corporate Tower WESERV SYSTEMS INTERNATIONAL, INC. Software development services 99.99% - Singaporean E-Square I.T. Park WESERV SYSTEMS INTERNATIONAL, INC. Software development services 99.99% - Singaporean Ecotower OTHER BUSINESS SERVICES 90% - American BEAWESOME, INC. Data encoding, transcribing and related services Ayala Business Center 10% - Filipino Manufacture of recognition/awards craft items (such as EIGHTY-EIGHT FLOOR GIFTS, INC. 99.99% - American Mactan Economic Zone II - SEZ plaques), signage, etc.

Philippine ANALYST BUSINESS November-December 2017 96 BUSINESS

GLOBAL 3D SYSTEMS, INC. Manufacture of 3D Printers 99.99% - American Cavite Economic Zone

TERUMO (PHILIPPINES) CORPORATION Product sterilization using ethylene oxide (EtO) 100% - Japanese Laguna Technopark - SEZ

OZ EXPORT SUPPORT SERVICES Authorization to lease from Northern Operating Services Asia, 60% - Australian Uptown Bonifacio CORPORATION Inc. a 1,966.86 sq. m. office area 40% - Filipino

SAFEWAY PHILTECH INC. Disaster recovery / business continuity office 99.99% - American Lakeside Evozone PAPER AND PAPER PRODUCTS Manufacture of offset printed laminated cartons, any and all DYNAPAC AND MALINTA (PHILIPPINES) INC. types of cartons and boxes, molded pulp products and other 99.99% - Japanese Lima Technology Center - SEZ subsidiary materials. Manufacture of heavy-duty packaging materials and other HEAVY DUTY PACKAGING CORPORATION 100% - Filipino Alviera Industrial Park container boards, papers and packaging solutions SAKURA LABELS AND PACKAGING 60% - Filipino Manufacture self-adhesive label Light Industry & Science Park III - SEZ INCORPORATED 40% - Chinese REAL ESTATE ANFD PROPERTY DEVELOPMENT

80% - Filipino Cavite Technopark-Special Economic AJUL ECOZONE PROPERTIES CORP. Registration of its additional warehouse building 20% - Chinese Zone

98% - Singaporean Maintaining and operating the newly constructed 12 units AMPLEFIELD DEVELOPMENT, INC. 1.2% - Malaysian Lima Technology Center - SEZ warehouse/factory buildings 1% - Filipino

Registration of its additional warehouse facility (Atlantica ATLANTICA INDUSTRIAL RESOURCES CORP. 100% - Filipino Cavite Economic Zone Building 6) Operation of 2 office/BPO towers: Central Bloc 1 and Central CENTRAL BLOCK DEVELOPERS, INC. 100% - Filipino Cebu I.T. Park Bloc 2 Towers CONTAINERBOARD AND PACKAGING Operating and maintaining an existing 3-warehouse buildingg 100% - Filipino Laguna Technopark - SEZ COMPANY INC.. FIRST PHILEC, INC. Operating an existing factory/warehouse building 100% - Filipino First Philippine Industrial Park - SEZ

Golden Gate Business Park-Cavite JEPPAMAN BUILDERS CORPORATION Establish and operate a factory/warehouse building 100% - Filipino Export Processing Zone

Calamba Premiere International ORO PRIME MERIDIAN VENTURES INC. Construct a factory/warehouse building 100% - Filipino Park - SEZ Establishing a 4-storey office building to be known as Typing TYPING MEDIA INC. 99.99% - Hong Kong Baguio City Economic Zone Media Inc. Building RECYCLING AND WASTE MANAGEMENT Engage in collecting, buying and sorting of used battery and 80% - Filipino ECO GREEN RISING PHILS. CORP. Suntrust Ecotown Tanza other precious and non-ferrous metal scraps 20% - Korean RUBBER AND PLASTIC PRODUCTS AIYOH INDUSTRIES PHILIPPINES, INC. Manufacture and assembly of Plastic Injection Molding Products 99.99% - Japanese Lima Technology Center - SEZ Manufacture of die-cutting, packaging, expanded polyfoam, ARMSTRONG WESTON ASIA INC. printing & manufacturing of all kinds of foam, plastic, rubber, 99.99% - Singaporean Light Industry & Science Park III - SEZ and adhesives materials CLOVERPACK CORPORATION Manufacture of packaging materials and other related products 100% - Filipino Victoria Wave - SEZ

Manufacture and assembly of brushes, plastic parts and other MYBRUSH TECHNOLOGY (PHIL.) INC. 99.99% - Malaysian First Philippine Industrial Park - SEZ parts for vacuum cleaners and home appliances

STANDARD UNITS SUPPLY PHILIPPINES Engage in injection molding production, snets (switch box) 99.99% - Japanese First Philippine Industrial Park - SEZ CORPORATION. assembly and creation of CAD drawing / designs

TEMA DESIGN PHILIPPINES INC. Manufacture and export of decorative items, props, etc. 99.76% - Danish Pampanga Economic Zone Filinvest Technology Park Calamba TACCA PHILIPPINES INC. Manufacture of extruded plastic part/sheets 99.98% - Australian - SEZ STORAGE AND WAREHOUSING AIYOH INDUSTRIES PHILIPPINES, INC.. Logistic services 99.99% - Japanese Lima Technology Center - SEZ Calamba Premiere International CLAYMOUNT ASSEMBLIES PHILIPPINES, INC.. Warehousing and logistics services 99.99% - Dutch Park - SEZ DRAKA PHILIPPINES, INCORPORATED. Warehousing and logistics services 99.99% - Dutch Mactan Economic Zone II - SEZ Filinvest Technology Park Calamba JINGYE MANUFACTURING PHILS., INC.. Warehousing and logistics services 100% - Chinese - SEZ KOSAKA PHILIPPINES CORPORATION Warehousing and logistics services 99.99% - Japanese Cavite Economic Zone NIPPON PULSE TEC PHILIPPINES INC.. Warehousing / logistics support services 99.99% - Japanese Cavite Economic Zone Warehousing, inventory management, direct sale, resale, NTW PHILIPPINES, INC. 99.99% - Japanese Laguna Technopark - SEZ consignment services 50% - Taiwanese Import electronic consumables/supplies for temporary storage 42% - Japanese RENKYO INDUSTRIAL (PHILIPPINES) INC.. Laguna Technopark - SEZ and distribution 6% - Filipino 2% - Chinese SUNPOWER PHILIPPINES MANUFACTURING Warehousing and logistics services 100% - Caymanian Laguna Technopark - SEZ LTD.

Philippine ANALYST BUSINESS November-December 2017 97 BUSINESS

FOREIGN DIRECT INVESTMENT BUSINESS CLIMATE INDEX Balance of Payments Concept*; JANUARY-SEPTEMBER 2017 LEVEL (US$ million)

YEAR-AGO YEAR-ON-YEAR CURRENT LEVEL (% CHANGE)

TOTAL FDI 5,838.7 5,850.5 (0.2)

Equity Capital 1,065.1 1,617.0 (34.1)

Reinvested Earnings 604.4 547.6 10.4

Debt instruments 4,169.3 3,685.9 13.1

* 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 FDI flows refer to non-residents’ equity capital (i.e., placements less withdrawals) + reinvestment of earnings + debt instruments, net (i.e.,net intercompany borrowings).

YEAR- INDUSTRIAL PERFORMANCE DATA YEAR-TO- ON-YEAR (2000=100) OCTOBER 2017 (INDEX) DATE GROWTH MOTOR VEHICLE SALES 2017 Volume of Production Index (VoPI) 145.5 -6.5 -1.5 OCTOBER 2017 (2000=100) YEAR-AGO GROWTH a. Food 158.9 4.4 5.8 CURRENT LEVEL RATE (%) b. Beverage 139.3 3.3 -2.1 MOTOR VEHICLE SALES 36,511 31,132 17.3 c. Tobacco 5.6 -39.3 -7.9 PASSENGER CAR SALES 11,686 11,499 1.6 d. Textile 27.0 -28.3 -27.7 e. Footwear and Wearing Apparel 19.8 -27.5 -19.8 COMMERCIAL VEHICLE SALES 24,825 19,633 26.4 f. Wood and Wood Products 66.8 1.6 7.2 UNIVERSAL AND COMMERCIAL BANK'S -JUNE 2017 g. Furniture & Fixtures 1104.1 61.4 43.9 LOANS OUTSTANDING TO THE REAL ESTATE SECTOR (P Bn) h. Basic Metals 236.8 41.7 40.3 % to Total % to Total i. Iron and Steel 177.4 58.6 48.5 Jun-17 Jun-16 RE loan RE loan j. Non-ferrous Metals 366.1 20.7 26.7 Residential 338.21 24.7 279.46 24.6 k. Fabricated Metal Products 764.4 137.8 95.7 Commercial 1031.94 75.3 858.59 75.4 l. Machinery Excluding Electrical 70.7 18.1 1.5 m. Electrical Machinery 109.3 12.0 5.4 n. Transport Equipment 167.8 -3.0 17.1 o. Other Mfg Industries 102.1 -0.9 -6.4 p. Paper & Paper Products 89.2 -18.9 2.8 q. Publishing & Printing 189.7 32.8 11.3 r. Leather Products 1.3 50.6 25.9 s. Rubber Products 271.1 -1.3 2.5 t. Chemical Products 158.8 -61.0 -49.8 u. Petroleum Products 52.7 -4.2 10.2 v. Non-Metallic Mineral Products 165.5 30.3 18.1 w. Glass & Glass Products 143.1 24.7 25.2 x. Cement 238.8 50.5 31.4

y. Misc. Non-Metalic Mineral Products 47.2 -14.4 -4.4 VALUE OF PRODUCTION INDEX (VAPI) 193.1 -6.3 -2.2 (2000=100) AVERAGE CAPACITY UTILIZATION 83.8 -16.2 83.8

Philippine ANALYST BUSINESS November-December 2017 98 BUSINESS BUSINESS CLIMATE INDEX STRIKES IN NOVEMBER 2017 LABOR STRIKES (DECEMBER 2017) No work stoppage was recorded in November. Meanwhile, there were a total of 175 notices of strike/lockouts handled during the period. STRIKES DECLARED WORKERS INVOLVED MAN-DAYS LOST (000)

2017 2016 2017 2016 2017 2016 JAN - - - - 120,348 - FEB 1 - 214 - 14,488 - MAR 1 - 138 - 16,668 - APR 3 - 430 - 16,276 - MAY 1 2 263 433 18,040 82,884 JUN - 1 - 217 15,738 1,519 JUL 1 2 294 146 13,346 14,146 AUG 2 1 140 92 9,278 844 SEP - 2 - 45 10,894 675 OCT - 2 - 184 4,408 11,136 NOV - 3 - 134 - 3,578 DEC - 2 - 1,855 - 1,855 TOTAL 9 15 1,479 3,106 239,484 116,637

VISITOR ARRIVALS IN OCTOBER 2017 Total visitor arrivals registered in October is 523,627, up by 18.19% from 443,025 in the same month in 2016. Of this, 1.91% or 9,989 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 139,218 (26.59% share of the total visitors in October). The Chinese market tallied 89,932 visitors (17.17%) while the U.S. market recorded 67,567 visitors (12.90%).

VISITOR ARRIVALS: JANUARY-NOVEMBER 2017 SURVEY ON MONTHLY OCCUPANCY RATE & LENGTH OF STAY COUNTRY 2017 2016 % CHANGE RANK JAN TO DEC JAN TO DEC GROWTH RATE KOREA 1,457,724 1,331,701 9.46 1 2015 2014 2015/2014 CHINA 890,114 630,327 41.21 2 De Luxe Hotels USA 859,973 771,849 11.42 3 Occupancy Rates 71.60 71.11 0.69 JAPAN 535,809 491,261 9.07 4 Length of Stay 2.71 2.74 -0.79 AUSTRALIA 227,712 218,438 4.25 5 First Class Hotels TAIWAN 221,866 213,522 3.91 6 Occupancy Rates 59.09 58.83 0.44 CANADA 175,569 151,770 15.68 7 Length of Stay 2.19 2.14 2.42 UNITED KINGDOM 163,381 153,709 6.29 8 Standard Hotels SINGAPORE 153,791 161,194 -4.59 9 Occupancy Rates 62.51 63.96 -2.27 MALAYSIA 132,007 128,077 3.07 10 Length of Stay 2.42 2.52 -3.81 HONGKONG 102,088 107,295 -4.85 11 Economy Hotels INDIA 99,088 83,369 18.85 12 Occupancy Rates 60.14 59.73 0.69 OVERSEAS FILIPINO 130,301 181,716 -28.29 Length of Stay 1.57 1.65 -4.85 OTHERS 858,113 766,139 12.00 TOTAL 6,009,553 5,392,383 11.45 OVERALL AVERAGE 66.95 67.21 -0.39

Philippine ANALYST BUSINESS November-December 2017