Philippine Business Report, March 2011
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Volume 22 No. 03 March 2011 PHL economy hits a 35-year high of 7.3% in 2010 The Philippine gross domestic Socioeconomic Planning “Over the next six years, we are product (GDP) grew by 7.3% last Secretary Cayetano W. looking forward to a sustained year – the fastest pace in 35 years – Paderanga said domestic demand strong economic performance. the National Statistical Coordination continued to be an important This will be built on strengthened Board (NSCB) reported. growth engine for the Philippine partnerships with the private economy in 2010. sector as we shift to an The 2010 GDP expansion was the investment-led growth," highest since 1975 at 8.8% and "While personal consumption he added. surpassed the government's target of expenditures remained as the between 5% and 6%. primary growth driver, we also To further expand the economy saw investments providing a and provide enough opportunities NSCB Secretary General Romulo strong support to growth," for a sustainable and inclusive Virola attributed last year's robust Paderanga said. growth, Paderanga said GDP growth to the global economic government efforts shall be recovery, higher foreign trade, He said private sector investment directed toward an integrated election related spending, and the in construction and in machinery infrastructure program. peaceful 2010 national elections. and equipment resulted in a robust 17-% growth "To this end, and given the In 2010, the industry sector once in gross domestic capital significant improvements in again was the key contributor in formation. This supported the governance, together with a boosting the economy with its huge healthy pace of growth renewed emphasis on effective 12.1-% growth. Services also grew in manufacturing and services. delivery of social services, 7.1% from only 2.8% in 2009. sustaining high levels of growth "Consistent with the robust remains an important aspect in In the fourth quarter alone, the GDP economic expansion, the the goal of reducing poverty in the grew 7.1% from 2.1% in the same labor market also significantly country," he said. period in 2009. Virola said the growth improved, as total employment during the last quarter of 2010 came increased by 2.8% and an The government is targeting from services, with 3.3-% expansion; estimated 983,000 employment a 7%-8% GDP growth this year industry, 2.7%; and agriculture, fishery was generated in 2010," until 2016 to reduce poverty and forestry (AFF), 1%. he said. in the country. March 2011 1 “Our triple double growth is 1.5 to 3.5 years. In the commercial anchored on expansions and sector, the Philippines ranks second, reinvestments of existing locators,” with payback periods ranging from INDUSTRY De Lima said. 4 to 9 years. Earlier, PEZA said its investments for The study also showed that the TRENDS the five-year period are expected hotel sub-sector offered the to reach P1.2T. De Lima said more shortest payback period among all 2010 electronics investments than 60% of PEZA investments are categories in the commercial sector, hit record high of US$2.3B expansions and reinvestments of given its highly energy intensive The Semiconductor and Electronics PEZA locators. nature. About 40% of a hotel’s Industries in the Philippines Inc. energy consumption goes towards (SEIPI) reported that investments in heating water for showers, pools, the country's electronics industry hit PEZA 5-year projection and laundry operations. Investment a record-high of US$2.3B in 2010, a towards new and cheaper ways of 380-% growth over 2009’s US$484M. heating water such as solar panels, Year Exports (in US$B) therefore, lead to significant cost savings. 2010 40.5 2011 44.5 The British Embassy launched the 2012 48.9 study with the special participation 2013 53.9 of the La Liga Policy Institute. 2014 59.3 PHL presents PPP projects to Japanese businessmen Year Employment Department of Trade and Industry (DTI) Secretary Gregory L. 2010 735,672 Domingo, together with other 2011 809,239 members of the Philippine Economic 2012 890,163 Team, presented to Japanese 2013 979,179 businessmen the Private-Public 2014 1,100,000 Partnership (PPP) projects that the country has to offer for joint Last year was also the seventh time ventures during the Philippine the electronics industry recorded PHL seen to get energy efficiency Investment Seminar in Tokyo annual investments of over US$1B, investments of US$790M last February 2011. the other years being 2007, 2000, A recent study funded by the 1997, 1996, 1995, and 1994. British Government showed the During the seminar, the Japanese Philippines having the potential business community was presented The investments last year were to take a huge chunk of energy with the investment environment registered by 100 companies. efficiency investments worth at and opportunities under the Aquino Of these, 10 are expansions least US$790M. administration. while the rest are new projects. Some 24,552 new direct jobs are The study showed how energy Other government officials who expected to be generated efficiency could open doors to new took part in the seminar were by these projects. investment opportunities in six Department of Finance (DOF) Southeast Asian countries namely, Secretary Cesar V. Purisima; SEIPI President Ernie B. Santiago Singapore, Viet Nam, Indonesia, Department of Energy (DOE) said the industry aimed to double Thailand, Malaysia, and the Secretary Rene Almendras; Bangko up exports in six years, from US$22B Philippines. Sentral ng Pilipinas (BSP) Deputy in 2009 to US$50B in 2016. Governor Diwa C. Guinigundo; and According to the study, the Philippine Ambassador to Tokyo The industry is bullish for 2011 Philippines ranks third among six Manuel M. Lopez. and expects that the electronics Southeast Asian nations as a possible sector will continue to be the driver investment destination for projects Modest growth for PHL shipping of growth of Philippine exports. that bring down energy consumption industry this year seen It is targeting a10-% growth while maintaining the same Maersk Line, one of the world's this year. output. It also provides baseline largest container carriers, expects information on the amount of modest growth for the Philippine PEZA eyes 'triple double' growth business opportunities and identifies shipping industry this year. The Philippine Economic Zone sectors that are expected to benefit Authority (PEZA) expects exports the most from undertaking energy "The key driver of growth remains to hit US$247.1B for the period efficiency projects. private consumption. To maximize 2010-2014 and employment rising the country's growth potential, to 1.1M by 2014. British Ambassador Stephen Lillie massive improvements must be underscored the importance of done to road networks and ports,” As part of the Department of Trade energy efficiency, which is often Maersk reported. and Industry (DTI) Roadmap, PEZA seen as the neglected element in Director-General Lilia B. De Lima the low carbon economy. "In addition, the shipping industry said PEZA is eyeing for a ‘triple will benefit from more market double’ growth or 10-% annual The Philippines offers the shortest statistics being made available growth in investments, exports and payback period in the industrial by port and customs authorities. employment until 2014. sector, with periods ranging from Increased visibility for the 2 Philippine Business Report industry on new markets and PCCI launched the program in reported that OFW remittances emerging segments will create cooperation with the Supply grew by 7.9% to US$15.5B. opportunities to hasten economic Chain Management Association of growth," Maersk added. the Philippines, the Federation In its Consumer Expectations Survey, of Forwarders Association in the the BSP said nationwide consumer Businessmen push Philippines, and other partners with confidence continued to improve for competitive logistics assistance from JETRO. for the second consecutive quarter. The Philippine Chamber of The sustained rise in consumer Commerce and Industry (PCCI) PSE launches new trading system confidence was supported by the launched the Certified Philippine The Philippine Stock Exchange (PSE) better-than-expected GDP growth Logistics Master (CPLM) program, has already launched the PSEtrade for the first three quarters a strategic tool initiated by for its trading system. of last year. the private sector to enhance local companies and industries’ "It is with great pleasure and pride In particular, buying intentions productivity and competitiveness to that we announce the successful in both Metro Manila and areas sustain economic growth. rollout of PSEtrade, the new trading outside Metro Manila for consumer system that will allow the PSE, the durables and motor vehicles country’s sole stock exchange, to improved. leapfrog into this decade," the PSE announced. BSP added that 96.7% of OFWs used remittances for food, The platform replaced the legacy while 72.6% allocated their MakTrade system used since the remittances for education, 61.1% 1990s. The PSE migrated to the for medical payments, and 49.8% NSC V900 trading platform of NYSE for debt payments. Technologies last July 2010. The percentage of OFW households PSEtrade is expected to enhance that utilized their remittances to PSE’s product range, trading savings climbed to 43.7% from 43% performance, and volume capacity. in third quarter of 2010 and from only 7.2% percent in first quarter Investors trading on the PSE market of 2007. will have direct access to a wider Developed by Filipino practitioners, range of cash, debt, and derivative Telco industry seen the CPLM will upgrade logistics instruments from one single platform. to grow 6% this year practices, provide continuing The successful migration has allowed The Philippine telecommunication education, and strengthen the PSE to handle larger trading volumes industry is projected to grow network of logistics practitioners and process trades 10 times faster by 6% to US$4.5B this year, the in the country.