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. than the previous system. International Data Corp. (IDC) announced. The course will explore the NEDA sees consumer spending different components of supply to continue "Operators are continually moving chain management and logistics The National Economic and to capture demand from mass systems, from forecasting Development Authority (NEDA) markets, as well as the uncharted to product acquisition to said the rising food, fuel, and territories outside the big cities transportation to delivery. transportation services are unlikely throughout the country," to dampen consumer spending, the IDC said. The program will also help firms supporting economic growth improve their competitive edge this year. IDC said fixed line operators are and perform cost-efficient and seen to make bigger concerted environment-friendly initiatives "We hope the price increases efforts to explore and exploit through the implementation of will not be that sharp, and new revenue streams, adding that green logistics. we still see the main source pricing of the Philippine mobile of consumption continuing. phone providers are expected Patterned after the Certified This will be the remittances," to be more liberalized this year Logistics Master course in Japan Socioeconomic Planning Cayetano to compete with the social and launched in localized versions W. Paderanga said. networking sites. in Thailand and Indonesia, CPLM shall be handled by known Filipino Personal consumption expenditures The international research firm said lecturers and practitioners (PCE) contribute about 70% to 80% mobile operators will "blur lines" in the industry. to gross domestic product (GDP), between intra and inter-network which is the value of all final goods pricing. Inter-network are those The program offering shall start and services produced in a country. made outside their networks, in mid-2011. The intensive while intra-networks are within course requires participants with Paderanga said the overseas Filipino the same networks. supervisory and managerial levels. workers' (OFW) remittances will lead to continuing demand, which will "In 2011, less exclusivity and The certification program is lead also to continuing growth in the more liberality will be the one of the objectives of the sectors that have been growing in name of the game, with SPs Japan External Trade Organization the past few years. [service providers] relaxing their (JETRO) Expert Service Abroad competitive boundaries though for Improving Business Environment In the first 10 months of last year, call-all, text-all networks schemes," for Logistics Program. the Bangko Sentral ng Pilipinas (BSP) it said.

March 2011 3 IDC said SPs will be more lenient The three proposed standards Hyundai San Pablo is the fifth with their pricing schemes on calls include specific provisions Hyundai branch in Region 4 and the and texts due to promising revenues for each food product group and 35th nationwide. The new showroom from data consumption brought issues on genetically modified is expected to further shore up about by the increasing popularity organisms (GMOs). Hyundai’s automotive business in of smartphones and Web 2.0 the country. applications such as Facebook The standards took into account and Twitter. the requirements set by regional HARI is set to expand its network and international bodies to ensure by increasing its dealership IDC added that the country's harmonization of the various locations to 44 this year. information technology (IT) provisions which are important in spending is projected to reach the recognition of the country’s Yokohama to invest up to P27B US$3.6B by end-2011. halal export. in expansion of Clark tire plant Yokohama Rubber Co. Ltd. The Philippines is also expected When finalized, the three Philippine will invest P27B to increase its to post a 12-% compound annual halal code of standards will be production capacity to 10M tires growth rate (CAGR) from 2006 presented to the Association of a year at its plant inside Clark to 2014. Southeast Asian Nations (ASEAN) Freeport zone. Yokohama has Technical Working Group on Halal been producing 7M units since its "The political stability and upbeat Food and the World Halal Forum operations in 1996. direction of the economy has which will be held in April 2011 fostered confidence among vendors in Malaysia. The company said it plans to spend on marketing efforts," to operate the area’s first expanded it said. BOI eyes China as mart for portion in 2013 and make it fully medium, high-end garments operable in 2014. Consumers, on the other hand, The Board of Investments (BOI) is are also expected to spend due to now looking at China as a possible Most of the tires to be produced the continuous improvement of destination for the Philippines’ are intended for export to North the economy and to some extent, medium and high-end garments. American markets. The new tenancy the higher purchasing power of contract for 300,000sqm, gives Filipinos, IDC added. “We are trying to develop other Yokohama a total plant area of markets for our garments and we 460,000sqm., almost triple the size DA to firm up are looking at crafting a Chinese of its current area. Halal food standards version of the Save Act in order The Department of Agriculture to push for a mutually beneficial Chinese automaker to invest (DA) is finalizing the country’s relationship between China and US$8M in PHL assembly plant halal food standards to boost the the Philippines,” BOI Executive Chinese auto manufacturer Great competitiveness of Philippine Director Lucita P. Reyes said. Wall Motor Co. Ltd. (GWM) will pour agriculture and fisheries products in in US$8M for the assembly of Chinese the US$2.3-T halal world market. “We want to use Chinese textile and vehicles in the country, the Board of produce the garments here but it Investments (BOI) reported. all depends on the tariff of China,” said Reyes, adding that they are The assembly plant will be now in the process of encouraging constructed in partnership with small companies to invest in textile State Motor Corp. in order to boost the industry. GWM is China’s first private “The Chinese are interested in automobile enterprise listed branded products and that could in the Hong Kong Stock Exchange. be our niche because we cannot The company has 30 subsidiaries. compete with them in terms of mass production but we can sell To date, there are already three high-end products to them,” Chinese auto manufacturers she said. that are part of the country’s Motor Vehicle Development Program (MVDP). The three firms that registered as participants of the MVDP for Trade and 2010 are Jianghuai Automobile DA Secretary Proceso J. Alcala said Co. Ltd. (JAC), GWM, and the huge and lucrative halal market INVESTMENTS Chonging Astronautic Motorcycle would increase Philippine food Manufacturing Co. Ltd. (BASHAN). exports and revitalize agri-fishery agribusiness enterprises. AUTOMOTIVE JAC entered into a technical licensing agreement with Alcala said having a halal food Hyundai opens San Pablo branch JAC Automobile International standard would pave the way for Hyundai Asia Resources, Inc. (HARI), Philippines Inc. for the supply world-class halal food production the official distributor of Hyundai of knocked down (KD) kits, KD parts and processing enterprises vehicles in the Philippines, opened a and components for the assembly that would create employment new branch in San Pablo City, Laguna and manufacture of one-ton to opportunities for Filipinos. to further invigorate the automotive three-ton light trucks. industry in Southern Luzon.

4 Philippine Business Report BASHAN, on the other hand, has “We are just awaiting for the RCBC to open 20 branches Racal Motor Assembly Corp. as its height clearance to be issued by this year local partner for motorcycles parts the Civil Aviation Authority of the Rizal Commercial Banking Corp. and components. Philippines (CAAP),” Luciano said. (RCBC) plans to aggressively expand its nationwide presence with the BASHAN has an annual capacity The new hangar is expected to be opening of 10 new branches and 10 of 500,000 units with a market operational by end 2012. other banking offices this year. oriented to Argentina, Venezuela, Bolivia, Guatemala, Salvador, South Air Asia Philippines to fly Africa, among others. in 5 Southeast Asian countries Air Asia Philippines (AAP) plans to mount flights to five Southeast Asian AVIATION countries plus China by September, according to the airline’s executive. Cebu Pacific allots US$1B for expansion Cebu Pacific (CEB) will invest over US$1B for the purchase of additional 24 brand-new Airbus A320 aircraft over the next five years, CEB President and Chief Executive Officer (CEO) Lance Y. Gokongwei said.

Gokongwei pointed out that these The bank opened 15 branches last additional aircraft will enable CEB year, five within the Metro Manila to offer even more frequencies, area and 10 outside the restricted routes and destinations, and even zone or in areas outside lower fares on more flights. Metro Manila. “More important, this will create It already holds five branch licenses another 2,000 jobs by 2014 for CEB “We’re looking at Southeast as a result of the acquisition of the alone,” he said. Asian region plus China to be the Pres. Jose P. Laurel Rural Bank in first five or six hubs by September,” 2009. RCBC was awarded 15 branch By the end of 2011, CEB will be AAP Vice-Chairman Michael L. licenses by the Bangko Sentral operating a fleet of 37 aircraft, Romero said. ng Pilipinas (BSP) as part of the with an average age of less than incentives given to consolidations, two and a half years, ranking Romero said the airline will fly mergers, or acquisitions. it among the most modern aircraft to Singapore, Kuala Lumpur, fleets in the world. Between Jakarta, Hongkong, Bangkok and It will apply for another five licenses 2012 and 2014, Cebu Pacific China, adding that AAP will be with the BSP immediately after will take an additional 16 Airbus using five brand-new Airbus the completion of the earlier A320 aircraft. A320 come September. five branches. CEB has already taken in three brand-new Airbus A320s in the last BANKING BPO three months alone and will take the first of five additional A320s Landbank inks remittance pact IP Converge builds P105-M data this year. with Japan Post Bank center at Fort Bonifacio The Land Bank of the Philippines IP Converge Data Center Inc., the Singapore firm to build P1-B (LBP) continues to strengthen its information technology (IT) and hangar in Clark overseas network with the recent telecom arm of IPVG Corporation, Aircraft maintenance, repair, and remittance service tie-up with is building a P105-M Internet data overhaul (MRO) firm SIA Engineering Japan Post Bank (JPB). center facility in Bonifacio Global Co. will construct a second hangar City, Taguig. costing around P1B inside the LBP and JPB launched the Diosdado Macapagal International remittance tie-up which now allows The company signed a P105-M loan Airport (DMIA) in the first quarter of Filipinos and other remitters agreement with Banco De Oro (BDO) this year. from anywhere in Japan to send to finance the construction funds to the Philippines directly of the facility. Its main Internet “SIA Engineering will be building through 233 JPB branches data center in RCBC Plaza, Makati a bigger hangar to accommodate and 7,500 Post Offices with City is close to reaching full wide-bodied aircraft such as international services. capacity with rising demand in the Boeing 747 and 777,” Clark premium data center space as International Airport Corp. All remittances received by JPB business in the country continues (CIAC) President and Chief will be distributed by LBP in the to grow. Executive Officer (CEO) Victor Philippines, including funds for Jose Luciano said. transfer to other local banks. Funds The new Bonifacio Global City data credited to LBP accounts may be center will be a state-of-the-art The second hangar is expected to withdrawn in any of the Bank's 326 "green" facility using the latest generate 300 direct jobs and 200 branches, 913 automated teller practices and technology that indirect jobs in the 2,367-hectare machines (ATMs), and all other ATMs promote energy efficiency and Clark complex. across the country. conservation.

March 2011 5 "By building a green data center, Department of Energy (DOE) Schlangen said they are now in the we can lessen our carbon footprint Undersecretary Jay Layug said the process of closing contracts with and contribute to a global cause," group is eyeing more production some potential partners. IP-Converge President Reynaldo R. from the Malampaya field of as Huergas said. much as the equivalent of 300 Korean firm to invest US$160M megawatts (MW). in 2 solar power plants Accenture commits to expand Youil Ensys, one of South Korea’s PHL operations The Malampaya project under largest renewable and engineering Information technology (IT) firm Service Contract 38 in Northwest power firms, is keen on investing Accenture gave assurance of its Palawan currently fuels three some US$160M into the country’s continuing commitment to growing natural gas-fired power plants solar power industry. its Philippine operations. in Batangas: the Sta. Rita, San Lorenzo, and Ilijan facilities with Youil Chief Executive Officer Visiting Accenture BPO Group total capacity of 2,700MW. The gas Scott Kim said its local office, Youil Chief Executive Officer Michael J. field is earlier believed to have a Renewable Energy Corp., will put up Salvino said prospects for growth of reserve of around 3,000MW. two solar farm facilities in Negros the local BPO sector are huge. and Bohol. Layug said the Malampaya “The BPO industry is going to be consortium, composed of Spex He said they plan to construct a here for a long time. It is one sector (45%), Chevron (45%) and Philippine 30-megawatt (MW) solar power that is not going to turn around and National Oil Company-Exploration facility in a 70-ha. land in Negros leave,” Salvino said. Corp. (PNOC-EC) (10%), expects to with a project cost of about commence the second phase of the US$120M. Accenture earlier announced extensive drilling activities in the that it is expanding its Philippine area within the year. Another 10MW is also being eyed operations as it expects to hire by the company in Bohol with an 5,000 additional employees until Green Future to build P6-B estimated cost of US$40M. August this year, bringing the total bioethanol plant headcount to 25,000 and making Green Future Innovations Inc. (GFII) Kim said they expect to put up it one of the country’s biggest will build a P6-B bioethanol plant in these plants within six months after employers. Isabela that will produce 54M liters securing all necessary approvals. and generate 19 megawatts (MW) annually starting 2012. Shell, Petron bag P3-B fuel supply ELECTRONICS contracts with PSALM GFII President Reynaldo P. Bantug Pilipinas Shell Petroleum Corp. and Allegro gets tax perks for P2.6-B said the mega project aims Petron Corp. bagged P3B worth of investment in PHL to contribute to the domestic fuel supply contracts with state-run The Board of Investments (BOI) supply of green energy pursuant Power Sector Assets and Liabilities has given tax breaks to American firm to the Biofuels and Renewable Management Corp. (PSALM). Allegro Microsystems Phils Inc. for its Energy Laws. P2.6-B investment in the country. “Right now, we import our fuel Allegro is the subsidiary of Allegro needs and foreign exchange goes Microsystems Inc. (AMI) of the to the rich Middle Eastern nations. United States. It is involved in This project will grow biofuel in the the manufacturing of electronic field,” Bantug said. components and sub-assemblies. The bioethanol plant in San The P2.6-B investment is for the Mariano, Isabela, is the brainchild expansion of its existing operations of GFII, a newly-formed venture here. This project will require a among Japan’s Itochu Corporation capital outlay of about P400M for and JGC Corporation, the Philippine buildings and about P2B in the form Bioethanol and Energy Investments of machineries and equipment. Corporation (PBEIC), and Taiwanese holding company GCO. At full capacity, the investment is expected to generate additional SunConnex allots over US$100M The contracts cover this year’s employment for 1,113 workers. for solar projects oil-based fuel requirements of Commercial operation for the SunConnex, a solar power developer independent power producer plants expansion is projected to start based in the Netherlands, is and barges being managed by the in June 2011. planning to invest more than National Power Corporation (Napocor). US$100M for solar power projects in the Philippines. PSALM is an entity created under ENERGY the Electric Power Industry Reform SunConnex Business Development Act of 2001 which handles the Malampaya group mulls Manager Jos Schlangen said the finances of Napocor. $1-B expansion company will build solar wind plants The consortium led by Shell with as much as 50-megawatt (MW) Palawan hosts palm oil plantation, Philippines Exploration B.V. (Spex) capacity. processing plant operating the US$4.5-B Malampaya Singaporean-Filipino-Malaysian deep water gas-to-power project The firm plans to initially start investors will put up palm oil in Palawan is planning to invest an with smaller projects with 10-MW plantation and processing plant in additional US$1B to extract more capacity then go big with a 50-MW Palawan for a total P649M to serve gas in the exploration field. capacity project in the future. the local and export market.

6 Philippine Business Report Palawan Palm and Vegetable Oil SWPGI, a subsidiary of the The rest is majority-owned by an Mills Inc. and its sister company China-based Sunnew Investments investor based in South Korea. Agumil Philippines Inc. (API) have Ltd., had committed US$75M last registered their respective projects year for the establishment of a with the Board of Investments (BOI). 25-wind turbine farm that would HEALTH AND WELLNESS generate some 50 megawatts (MW) Palawan Palm has undertaken the of power. Century Properties to put up first phase development of 950 has. US$100-M medical building out of the total 3,650 ha.-leased Flying V expands network Century Properties Inc. is set farm lands in the southern part of Independent oil player Flying V to break ground on a US$100-M Palawan at a cost of P217.3M. plans to end the year with 387 outpatient medical-information stations nationwide. technology building in Makati in Its sister company, API, which will partnership with General Electric serve as the processor of the crude Supporting its widening distribution Co. (GE) unit GE Healthcare. palm oil and exporter to China, network are 235 stations which are Singapore, and Malaysia, is also currently operational, 66 stations investing P431.8M for a processing being constructed, and 86 stations facility to be established also already in the pipeline. in Palawan. The company will strengthen its The first phase of Palawan Palm logistical infrastructure by increasing project has been planted in 2007 to its existing depots/terminals from 2009 and is due for harvest in June nine to 11 strategically located in this year marking the actual start of the country. the company’s operation. The first phase has an estimated production In tandem with the expansion of of 23,750 metric tons (MT) of its retail network, Flying V is also oil palm fruits per year. At full expanding its Corporate Social capacity, the project will employ Responsibility (CSR) programs Century Properties said the project, 406 farm personnel. through its foundation, the Academe which will rise within the Foundation Inc. 3.4-ha. Century City along Kalayaan PHL-Japan group mulls Avenue in Makati City, is expected US$150-M solar project Since its inception in 1999, the to generate 3,000 jobs during its Filipino-Japanese joint venture firm Academe Foundation has granted construction and 5,000 jobs upon Eco-Merge Philippines Inc. plans to more than 1,200 scholarships to the start of operations. invest about US$150M over the next underprivileged children nationwide three years for the construction of from grade school to college. The project, slated to be 41 megawatts (MW) of solar projects operational in the latter part of all over the country. Otto Energy to start Leyte drilling 2013 or early 2014, is envisioned Australia-based oil exploration firm to provide a platform where the Eco-Merge President Edgar Morada Otto Energy Ltd. said it will soon Philippines can compete with its said they would initially put up an start drilling in Service Contract 51 Asian neighbors in the competitive 11-MW solar farm in a 22-ha. in Northwest Leyte. sunshine industry of medical property in Pili, Camarines Sur tourism, which registered US$2B within the year. Otto Managing Director Paul in revenues last year. Moore said subsidiary NorAsian “This is one of the first projects Energy Phils. Inc. had already Splash allots P426M we’re planning to undertake. After commissioned Desco Inc. to deploy for plant expansion that, we will be eyeing other solar a land rig to be used for the Splash Corporation is setting aside farms in the Visayas and Mindanao,” exploration drilling. some P426-M fund for the expansion he said. of its manufacturing plants SC 51 comprises two areas namely, nationwide. Morada said they would spend onshore Leyte in the north and around US$40M for the 11-MW the islands of Cebu and Bohol "We approved the 2011 capital project which would be completed in the south. expenditure (capex) for the before year-end. expansion of plant capacity, improvement of facilities, and SWPGI to invest US$125M FOOD enhancement of management in RE project information systems for Subic Wind Power Generation Inc. Domino’s Pizza returns with international and direct selling (SWPGI) will invest US$125M for the Goldilocks as partner operations," the firm’s Board of expansion of their renewable energy American pizza delivery chain Directors announced. project in the Freeport, the Subic Bay operator Domino’s Pizza Inc. Metropolitan Authority (SBMA) said. opened its first of eight stores in the Philippines after a two-year INFRASTRUCTURE SBMA Chairman Feliciano G. hiatus, with new business partner Salonga said the SMBA has recently Goldilocks Bake Shop Inc. MPIC submits MRT 3 approved the request of SWPGI to expansion plan expand its business and include the Domino’s Pizza President and Metro Pacific Investments Corp. establishment and operation of a Chief Executive Officer (CEO) (MPIC) is ready to pour in US$300M solar energy project on top of its Tong Hong said Goldilocks owns 30% to US$700M for the expansion and original proposal to establish and of the company, called 3030 DPP improvement of the Metro Rail operate a wind farm. Ventures Inc., while he owns 15%. Transit (MRT) 3 system.

March 2011 7 “This is just a desktop analysis of TNT has purchased 10 new “It’s a higher double-digit growth what we can do for MRT 3 for the vehicles composed of four, six, this year than last year,” Philips rolling stock, signalling systems, and 10-wheeler wing vans and Electronics Philippines Chief refurbishments of the platforms, trucks that will be deployed in the Executive Officer (CEO) Rico adding more cars, general Laguna and Cavite export processing Gonzales said. refurbishments of the tracks,” zone areas as well as in the Clark said MPIC Chairman Manuel V. and Subic Bay Freeports in Gonzales said investors are eyeing Pangilinan. Northern Luzon. the Philippines because the Aquino administration has boosted Pangilinan also pointed out Syngenta puts up US$8-M their confidence. that if cars are added to the seed plant system, it will need enlarging the Syngenta Philippines has invested platforms, improving the signage US$8M in a new seed processing MINING and the lightings, and adding plant in Binalonan, Pangasinan. more escalators to make it more Holcim reopens Calaca convenient to the passengers. The new facility can process 2,000 cement plant tons of hybrid corn seeds per year. Holcim Philippines Inc. has reopened Maynilad mulls P2.5-B expansion It is equipped with world-class its facility in Calaca, Batangas of Putatan water treatment plant processing technology, such as to take advantage of the surge Maynilad Water Services, Inc. fully automated seed conditioning, in demand for new buildings and (Maynilad) is set to invest additional shelling, sorting, drying and quality infrastructure in Metro Luzon. P2.5B to increase the capacity of its control capabilities. Putatan water treatment plant. Holcim Senior Vice-President The state-of-the-art capabilities for Commercial Operations of the Syngenta plant will guarantee Ed Sahagun said the company the preservation of seed viability spent about P63M to restore and will prolong the shelf life the terminal and install modern of seeds. operating systems and equipment such as filters to reduce The new plant employs 150 workers dust emissions. from Binalonan and nearby towns. Sahagun said the Metro Luzon P216-M coconut center cement market, which includes the now open in Aurora Province National Capital Region (NCR) and The Philippine Coconut Authority Southern Tagalog, is poised to grow (PCA) has inaugurated recently the further this year, driven by both P216-M Aurora Province Coconut private and public construction Development Center (APCDC) spending. located at a 133-ha. public land Maynilad Chairman Manuel V. in the Municipality of Dinalungan, MRC enters mining project Pangilinan said they have invested Aurora Province. in Davao P1.4B in the plant which has an MRC Allied, Inc. has entered into an initial capacity of 100 million liters APCDC is a collaborative venture agreement for the exploration and per day (MLD) servicing between the PCA, the Department of development of a gold and copper 1.2M customers. Environment and Natural Resources project in Davao City. (DENR), and the local governments Pangilinan said the company is of Aurora and Dinalungan. The firm said it had entered into willing to invest another P2.5B to a Mining Operations Agreement expand the facility’s capability to with Pensons Mining Corp., which 300 MLD. MANUFACTURING owns the rights to the 8,475-ha. Paquibato Mines. Maynilad’s Putatan treatment plant Philips more bullish on PHL is the first water treatment facility business in 2011 "The agreement for the exploration that taps into Laguna Lake as an Philips Philippines said they and development of the Paquibato alternative to Angat Dam. are more bullish this year as it Mines was executed for a enhanced campaigns for its three consideration of about P620M," main sectors namely, lighting, the firm said. LOGISTICS consumer lifestyle and healthcare. TNT Express embarks POLICY on re-fleeting program TNT Express Philippines is investing BOI to create special incentives P10M in a re-fleeting program this plan for electric, hybrid vehicles year that will involve the acquisition The Board of Investments (BOI) of bigger and more modern trucks is coming up with a special to beef up its existing fleet. incentives program for electric vehicles and other hybrid Allan Ancheta, TNT Express motor vehicles in response Philippines Country Operations to foreign firms’ interest Director, said the project is aimed in putting up manufacturing and at increasing the capacity and assembly operations of these volume of the fleet to meet the environment-friendly vehicles in the growing demand of manufacturers country to serve both the local and and heavy shippers. export markets.

8 Philippine Business Report BOI Executive Director Efren insurance or surety companies or with a capacity of 150MW adjacent V. Leaño said a Chinese firm, put in "equivalent self-insurance to the existing facility. one of China’s biggest e-vehicle mechanism acceptable to BSP" to manufacturers, is keen on putting ensure the safety of assets under The group is most likely to spend up assembly operations here its care. about US$600M for the expansion, for e-vehicles. which is expected to be completed It also requires pawnshops in 2013. Another US company with Filipino to have at least a manager or partner is also looking at the same officer-in-charge who has Cepalco to put up e-vehicles manufacturing operations attended the briefing on pawnshop 30-megawatt plant in the country. regulations and AMLA seminar to be Cagayan de Oro Electric Power present in the head office or every Light Co. Inc. (Cepalco) is planning “We are considering special branch during business days. to put up a 30-megawatt (MW) incentives to entice companies solar power project to put up operations here and in Mindanao. eventually the use of electric POWER vehicles in the country. It should be Cepalco President Ramon Abaya a special program for e-vehicles and Koreans eye another coal-fired said they will initially build a 10-MW hybrid,” Leaño said. power plant facility and expand this by another Korea Southern Power Co. (Kospo), 10MW in the near term. BSP okays stricter rules a sister company of Korea Electric on pawnshops Power Corp. (Kepco), which “We have 40 hectares to host The Bangko Sentral ng Pilipinas operates a coal-fired power plant in this 20-MW (facility) in the next (BSP) has put in place additional Naga City in southern Cebu, wants one and a half years. If there would safeguards on pawnshop operations to put up another coal-fired power be a definite feed-in tariff (FIT), to further protect the public. plant in the city. we may increase this to 30MW in the next three years,” Korean investors were reportedly Abaya said. looking for a site for the plant, and the provincial government showed He said they would be doing the them the Balili property in Tinaan, first phase of the solar project Naga, which Capitol bought on their own and for the larger for P99M. capacity, they may tap partners in the succeeding phases. Meralco to put up aero jet-fueled plant in Calamba Hedcor to put up Power distributor Manila Electric Co. 3 mini power plants (Meralco) will construct a 120- to Hedcor, Inc., a subsidiary 150-megawatt (MW) combined-cycle of Aboitiz Power Corporation, aero jet-fuelled power plant in plans to put up three Calamba City, Laguna this year. mini-power plants in Davao del Norte, Compostela Valley Province, The Monetary Board (MB), The power facility will entail and Bukidnon. in Resolution No. 25 dated investments of US$150M, Meralco 06 January 2011, has approved President and CEO Manuel V. Hedcor President and Chief amendments on the Manual of Pangilinan said. Operating Officer Rene B. Regulations for Non-bank Financial Ronquillo said they estimate Institutions-Pawnshops. Pangilinan said the new facility will to generate 10 to 15 megawatts run as a peaking plant, when the (MW) in Talaingod, about 20MW Pawnshop officials are now power distribution firms need power in Kitaotao, and 30MW required to attend briefing during peak hours. in New Bataan. on pawnshop regulations conducted by the central bank He said Meralco will put up the or BSP-accredited service provider plant, which can be run and shut REAL ESTATE and seminars on Anti-Money down quickly, without a partner. Laundering Act (AMLA). The plant is expected to run on FLI to launch P13B worth natural gas, jet fuel and diesel. of projects in 2011 Aside from not being in the BSP Filinvest Land, Inc. (FLI) will launch watchlist and have not been STEAG partners to pursue coal 17 real estate projects amounting to sentenced by any court expansion this year P13B this year. for robbery, estafa, and extortion, STEAG State Power Inc., operator among others, with a maximum of a 232-megawatt (MW) coal plant The new projects will add up imprisonment of more than at the Phividec Industrial Estate in to the property developer's 24 six years, pawnshop owner, Villanueva, Misamis Oriental, plans to ongoing construction activities. partner, director, president and start the plant's expansion in the latter manager or officer-in-charge part of the year. Targeted launches for 2011 are now required to submit a include four new socialized clearance from the National Bureau Aboitiz Power Corp., Evonik housing projects, six new affordable of Investigation (NBI). Steag GmbH of Essen, Germany, housing projects and two new and La Filipina Uy Gongco Corp., mid-rise building (MRB) projects, The BSP now also requires partners in the Phividec coal plant, equivalent to over 14,000 units, pawnshops to tap "reputable" and announced last year that they almost double the close to 7,300 Insurance Commission-accredited planned to construct a third unit units launched in 2010.

March 2011 9 Sta Lucia unit sets P11-B capex expansion plans to surpass last Sta Lucia Land has set a capital year’s revenues. expenditure program of P11B over a five-year period to bankroll new COMPANY Res/Toe/Run Brand Manager residential, office and commercial Joy Austria said the company projects. is optimistic that it would maintain NOTES its productive year. The company Sta. Lucia expects 2011 to be a currently has 14 stores nationwide banner year with sales seen to rise Chemrez ventures and is planning to expand over 3,600 units. into chemical exports in the provinces. Chemrez Technologies Inc. Slated for construction this year will spend P368.7M for the HBC to open 30 new stores are the Sta. Lucia Towers establishment of facility for Home of Beauty Exclusives, Inc. (located beside the Sta. Lucia the production of oleochemical (HBC) is eyeing P1.7-B revenues mall along Marcos Highway), business specialities and derivatives for the with the opening of as many as 30 process outsourcing offices, and export market. new stores this year. tourism-related projects. The first two of the five-building Sta. Lucia The project has been approved Towers will begin construction in the by the Board of Investments (BOI) first quarter this year. with incentives. The company will export at least 50% of its production particularly to the USA, Middle East, Australia, and various Asian countries. MAJOR RLC expanding gohotels.ph chain Robinsons Land Corporation’s PROJECTS (RLC) budget hotel chain gohotels.ph is now expanding and will be opening sites in Palawan, Maynilad allots P79B Tacloban, Dumaguete, Bacolod, for sewerage project and Cebu. Maynilad Water Services, Inc. (Maynilad) has set its capital gohotels.ph General Manager expenditures (capex) to nearly P79B Elizabeth D. Gregorio said the for sewerage and sanitation projects company also started accepting until 2037. franchisees to speed up its growth. The company will also launch its online shopping service and Maynilad Head of Sewerage and PLDT to focus on mobile increase the number of roving vans Sanitation Antonio F. Garcia said broadband this year to facilitate sales locally the concessionaire needs to put The Philippine Long Distance and abroad. up treatment facilities that have a Telephone Co. (PLDT) said it is combined capacity of around 1.6M cashing in on the mobile broadband “We are targeting 10 new cubic liters per day to hit 100% services to squeeze more revenues company-owned and 20 franchised sewerage coverage. from its subscribers. stores mostly in the provinces. We now have five applicants for The water utility is already "Mobile broadband is one of the franchising,” said HBC President constructing five wastewater growth segments that we are really and Chief Operating Officer Noel treatment plants in Quezon City. focusing on. The penetration rate P. Manucom. is still lower that would provide Maynilad’s water supply concession an additional growth for us,” PCCI inks MOU to enhance IPR covers the cities of Manila, Quezon, PLDT President and Chief in Mindanao Makati, Caloocan, Pasay, Parañaque, Executive Officer (CEO) Napoleon The Philippine Chamber of Las Piñas, Muntinlupa, Valenzuela, Nazareno said. Commerce and Industry (PCCI) Navotas, and Malabon in Metro has signed a memorandum of Manila, and the municipalities of TELUS earns ISO 20000 understanding (MOU) with the Bacoor, Imus, Kawit, Noveleta and certification Intellectual Property Office of the Rosario in Cavite. Telus International Philippines Philippines (IPPhil) to enhance the was given the International promotion of intellectual property Camiguin establishes P25-M Organization for Standardization rights (IPR) in Mindanao. farm-to-market roads (ISO) 20000 certificate and expects The local government of Camiguin its information technology (IT) Another MOU has been signed will establish 14 farm-to-market road operation business to grow 50% by IPPhil together with the (FMR) projects this year worth more this year. Northern Mindanao Consortium than P25M to help farmers increase for Industry and Energy, Research their productivity and income. ISO 20000 distinguishes companies and Development (NorMinCIERD) with best practices in IT-based which will promote the use The provincial government provided management and services after a of the Intellectual Property road access and already identified rigorous assessment process. System among its members 14 sites for the FMR projects, of and other members of the scientific which four have already started. Res/Toe/Run to expand community. A Patent Drafting Jang-Tacangon, San Miguin, Butay, Res/Toe/Run, a company under Seminar for faculty members, and Bura are the four biggest Primer Group of Companies, is scientists, and researchers FMR projects. set to unveil bolder aggressive was also held last month.

10 Philippine Business Report East Asia propels quick export Inc. (PSE); Bursa Malaysia (BM); recovery for PHL Singapore Exchange (SGX); and the The National Statistics Office’s Stock Exchange of Thailand (SET), ASEAN (NSO) latest export trade report working together with New York showed sustained shift in the Stock Exchange (NYSE) Technologies. WATCH destination of local goods from the traditional markets in the PSE will join the system by early United States (US) and Europe next year to be followed by Government to intensify trade to the dynamic economies Indonesia and Viet Nam. relationships in East Asia. The Philippines will intensify trade relationships with existing and new China and its autonomous province emerging trade partners including of Hong Kong had emerged as the the BRIC (Brazil, Russia, India, and top destination of Philippine goods, China) economies. accounting for more than 25.6% On the of the total value of goods shipped Department of Trade and Industry out of the country. Japan is the (DTI) Undersecretary Adrian S. second main destination with 16.2% calendar Cristobal, Jr. said this is part of exports. of the Department’s strategic Manila Fame International 2011 thrusts to help propel the country’s The Philippine merchandise Manila F.A.M.E International, exports to the world. exports receipt to East Asia reached Asia’s best design destination, US$2B in November last year will be held on 16-19 April 2011 “We will pursue trade agreements from US$1.3B. at the SMX Convention Center with largest markets EU and US at the Mall of Asia Complex on phased negotiations while we Another 19.6% of goods found their in Pasay City. intensify trade relationships way to members of the Association with the BRIC economies,” of Southeast Asian Nations (ASEAN) Manila F.A.M.E International Cristobal said. economic bloc. is the second longest-running trade platform for home and He noted that for the period 2011 fashion lifestyle products in the to 2015, the government targets East Asian export destinations Asia Pacific and the only Union exports of products and services des Foires Internationales to grow at 13% annually. • China (UFI)-recognized trade fair in the Philippines. Cristobal also noted the increasing • Hong Kong significance of the Association of • Japan Bio Search 2011 Southeast Asian Nations (ASEAN) • Macau • Mongolia Bio Search, Philippines’ most and European Union (EU) as regional exciting marketplace and the country destinations. • North Korea • South Korea leading national source of • Taiwan information on the latest In terms of investments, Cristobal ideas, product technologies, said an FTA deal with EU is an government policies, and excellent opportunity for tourism, breaking news on the health and business process outsourcing (BPO), ASEAN trade link technology wellness industries, will be held mining, and renewable energy. framework complete on 16-19 April 2011 at the World Four stock markets of the Trade Center Metro Manila. The Partnership Cooperation Association of Southeast Asian Agreement (PCA) between Nations (ASEAN) announced the EU and the Philippines was that the design study of the signed in Brussels last year. technology framework for the The PCA is expected to pave the ASEAN Trading Link has been way for the start of negotiations completed and will soon be bidding for a bilateral FTA between out the supply contract for the the two parties. infrastructure. On the Trans-Pacific Partnership The ASEAN Trading Link aims (TPP), the Philippines earlier to electronically interconnect said it will seek some flexibilities the participating markets and in the TPP, which sets high facilitate cross border order level of standards and trade trading seamlessly. liberalization, if it decides to join the trade bloc. "In the simplest terms, the idea is that if a retail investor here The TPP partners account for in Manila wants to buy a stock in around US$21B in total trade for Malaysia, all they need to do is the Philippines and around US$10B plug in the computer or talk to worth of its exports. their broker locally and that deal will push through with our system The Philippines has made it a policy using the link," PSE President to be a part in a trade deal where Hans Sicat said. Philippine Postal Permit No. 504 its major trading partners are also members. The TPP would be the The project was spearheaded by first trans-Pacific FTA. the Philippine Stock Exchange,

March 2011 11 GNP Growth Rate (%) GDP Growth Rate (%) 10 9 Economic 9 8 8 7 7 6 6 5 5 Indicators 4 4 3 3 2 2 1 1 0 0 3Q (2009) 4Q (2009) 1Q (2010) 2Q (2010) 3Q(2010) 4Q (2010) 3Q (2009) 4Q (2009) 1Q (2010) 2Q (2010) 3Q (2010) 4Q (2010)

Consumer Price Index exports (In US$Billion) Imports (In US$Billion)

(2000 base year) 6 5

170 5 4.8 169 4 4.6 168 3 4.4 167 2 4.2 166 4 165 1 164 0 3.8 Jul-10 Aug-10 Sep-10 Nov-10 Dec-10 Jan-1 1 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10

Peso per US Dollar Rate Inflation Rate (%) Interest Rate (%) (1994 base year) 47 4.35 46.5 5 4.3 46 45.5 4 4.25 45 4.2 44.5 3 44 4.15 2 43.5 4.1 43 1 42.5 4.05 42 0 4 Jul-10 Aug-10 Sep-10 Nov-10 Dec-10 Jan-1 1 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-1 1 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10

Entered as Third-Class Mail at the Makati Central Post Office under Permit No. 504 valid until 31 December 2011

Editorial Team: Anne L. Sevilla, Editor-in-Chief • Vic S. Soriano, Assistant Editor • Cresenciano P. Par, Jam A. Hourani, Yhen M. Millena, Ariel B. Salcedo, and Hazel Maryam C. Dizon, Writers • Ren C. Neneria, Design Layout • Myrna V. de los Reyes, Circulation. Philippine Business Report is published monthly by the Communications and Media Office (CMO), Department of Trade and Industry, 4F Industry and Investments Building, 385 Sen. Gil J. Puyat Avenue, Makati City 1200, Philippines • Phone (+632) 895.3611 • Fax (+632) 895.6487 • To subscribe, e-Mail: [email protected] Philippine Business Report

12 March 2011 Philippine Business Report