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New cigarette tax stamps out by Oct The Department of Finance (DOF) is set to release redesigned cigarette tax stamps in October in response to the proliferation of fake tax stamps on tobacco products.

embers of the House Committee on Ways and Means, chaired by Quirino Representative Dakila Carlo MChua, recently held a hearing to ensure the prevention of counterfeit tax stamps, as well as to protect the welfare of wholesalers, retailers and consumers. According to DOF Secretary Carlos Dominguez III, the department has been taking proactive steps, alongside the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), to improve the current tax administration by optimizing revenue collections and plugging the leakages in the system that cost the government billions of pesos. The proliferation of counterfeit tax stamps prompted the DOF to establish an updated Internal Revenue Stamps Integrated System (IRSIS), which has a revised security design and features. DOF Sec. Dominguez pointed out that 8 of 10 security features of the current tax stamps were copied by counterfeits. Further, it can be recalled that Bulacan-based manufacturer Mighty Corporation has been the subject of close scrutiny due to their alleged practice implemented because the costing of the tax stamps remained an of smuggling and use of fake excise tax stamps. After a series of unresolved issue. "We have so far completed public consultations raids, the BOC seized around P1.39 billion worth of cigarettes with the concerned stakeholders and prepared the Terms of from their warehouse in General Santos; P26.93 billion in Bulacan; Reference and other requirements for the system,” he stated. and P9.56 billion in Pampanga. As a result, their tax liabilities The BIR also entered a Memorandum of Agreement with the reached a total of P37.88 billion. These foregone revenues would state-run APO Production Unit for the printing of the tax stamps. likely have an impact on the Philippine economy, the BIR said. Sec. Dominguez said the aforementioned reforms will Aside from the IRSIS, the government will also place complement the proposed Tax Reform for Acceleration and closed circuit television (CCTV) cameras inside cigarette Inclusion Act (TRAIN) pending in Congress. Moreover, factories and warehouses to monitor their operations. At these developments are intended to “(bring in) all the present, there are CCTV cameras in Mighty’s factory. powers of modern information technology to make electronic Sec. Dominguez said that the new tax stamps will also be governance real and ensure a sustainable fiscal position.” applied to alcohol products starting 2018, citing that the previous administration planned to do this in 2015, but it was never

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The newly improved cigarette tax stamps will be out by October.

The tax stamps are being put in place to prove that tax obligations have been paid.

DOF open to compromise on sugar tax means, said it might be difficult to persuade legislators to pass the aforementioned measure as a whole. “(It) might be The Department of Finance (DOF) is reportedly willing to counterproductive since that would involve some repudiation drop the proposed excise tax on sugar-sweetened beverages of the changes made by the House,” Sen. Angara added. (SSB) in exchange for passing the Senate Bill (SB) 1408, The House version, now in its 3rd and final reading, would otherwise known as the Tax Reform for Acceleration and impose an excise tax of P10 per liter on SSBs containing locally Inclusion Act (TRAIN), in its original form. produced sugar, while P20 per liter would be placed on drinks using imported sugar. This proposed 2-tier tax is currently up According to DOF Secretary Carlos Dominguez, he is willing for debate between senators and DOF officials since it might not to compromise on the SSB tax as long as the Senate approves be “viable” as it remains “difficult” to administer, and would the comprehensive tax reform program (CTRP) proposal in its likely be a discriminatory trade barrier and therefore in violation entirety, which is included in SB 1408, authored by Senator of agreements under World Trade Organization (WTO) rules. Aquilino Pimentel. Initially, the proposed SSB tax was not part In relation to this, Sen. Angara stated that the tax system would of the 1st CTRP package, and it only came into picture when increase prices of SSBs by 50%, making it the highest in the world. the House of Representatives included it to cushion the blow, The Beverage Industry Association of the Philippine (BIAP) also as they tried to water down the DOF-supported tax reform bill. supported this, and pointed out that the proposal would put a strain “What I told (Senator Sonny Angara, chair of the Senate not only on manufacturing companies, but on local farmers as well. committee on ways and means) was I am willing to drop the The DOF said that taxation on SSBs would be foreseeable sugar tax but pass the original bill,” Sec. Dominguez stated. sometime in the future as “there is no need for now to SB 1408 is similar to the House Bill (HB)1 5636, although pass the proposed excise tax.” As explained by DOF it does not include tax on SSBs and other complementary Assistant Sec. Ma. Teresa Habitan, this would be included measures. Despite the compromise, however, Senator in package 5 of the CTRP which primarily focuses on Sonny Angara, chair of the Senate committee on ways and health, environment and luxury taxation. After all, “the bill is more of a health measure,” Sec. Dominguez noted.

1Under this measure, SSBs include the following: sweetened juice drinks, tea and coffee; all carbonated beverage with added sugar; flavored water; energy drinks; sports drinks; powdered drinks not classified as milk, juice, tea and coffee; cereal and grain beverages; and other non-alcoholic beverages that contain sugar.

The DOF could drop the proposed SSB tax, given that the Senate will pass SB 1408 in its entirety.

The SB 1408 is expected to generate an additional P169 billion in revenues during the first year of its implementation.

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Maynilad may revert to the Tribunal for further determination. Gov’t ordered to pay Maynilad P3.4 Bn Maynilad president and chief executive officer Ramoncito Fernandez welcomed the Tribunal’s decision, noting the The Philippine government has been ordered by an “affirmation of the trust and confidence” that the firm has placed international tribunal to reimburse West Zone concessionaire in the concession agreement. “We will continue to honor our Maynilad Water Services Inc. a total of P3.4 billion to cover commitments under the concession agreement and pursue the the losses incurred from 2013 to 2015. capital expenditure projects that will improve further the quality of service to our customers, as well as support the government’s initiative in ensuring the sustainability of our country’s water The long standing battle for Maynilad has finally come to resources,” Mr. Fernandez added. Maynilad chief operating officer an end. In a decision dated 24 July, the 3-man Arbitral Tribunal Randolph Estrellado expressed his confidence that the government unanimously upheld the validity of Maynilad’s claim against would honor the decision. Mr. Estrellado further noted that the the undertaking letter issued by the government, through firm would coordinate and cooperate with the government “in the Department of Finance (DOF), to compensate the water finding the most efficient way to implement the judgment.” The firm concessionaire for the delayed implementation of its tariff for the clarified, however, that the P3.4 billion is just a partial award, since rebasing period from 2013 to 2017. The undertaking letter states, the firm continued to experience a monthly revenue loss of some among other things, that the government will indemnify Maynilad P200 million due to the delay on the rate hike implementation. for any losses caused by the delay attributable to the state or any With this recent development, the ball is now in the government-owned agency in implementing any increase in government’s court, and the next course of action would be standards rates, beyond the date of its implementation in accordance likely critical, given the previous administration’s failure to with the concession agreement signed on February 21, 1997. honor government commitments (read WBF’s Special Report on In a disclosure sent to the local bourse, Maynilad’s Honor Your Commitments, November 2015). Sought for comment, parent firm, Metro Pacific Investments Corporation (MPIC), DOF Secretary Carlos Dominguez III said the department would reported that the Tribunal ordered the government to cover check first“if there is a budget space for this,” while Presidential losses from March 2015 to August 2016, “without prejudice Spokesperson Ernesto Abella stated that “(the Office of the to any rights that Maynilad may have to seek recourse Executive Secretary), together with the Office of the Solicitor- against Metropolitan Waterworks and Sewerage System General, is reviewing on how best to proceed with the decision.” (MWSS) for losses incurred from 1 January 2013 to 10 March 2015.” Moreover, the Tribunal also ruled that Maynilad is entitled to recover losses from September 2016 onwards. Should a disagreement on the amount of such losses ensue,

The government owes Maynilad a total of P3.4 billion.

MWSS continued to reject Maynilad’s request to increase its basic charges, which shouldn’t be the case, given the terms of their concession agreement – the concessionaires are allowed to adjust their rates every 5 years.

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timeline of events

August 1997 – In a bold move by then President Fidel Ramos, the state-owned MWSS was privatized and handed over its operations to 2 private concessionaires, namely: Manila Water Company, Inc. (MWCI) and Maynilad. The 25-year concession agreement instituted the following provisions in relation to tariff rates: (1) yearly adjustment based on inflation; (2) price adjustment covering extraordinary events; and (3) rate rebasing exercise 5 years upon the start of the concession, the commencement date set to be by MWSS-Regulatory Office, and every 5 years thereafter. The power to approve any tariff adjustment lies primarily on the MWSS board of Directors. 2000 – Maynilad petitioned for tariff increases in an effort to recover from foreign exchange losses, and was subsequently granted an extraordinary price adjustment. The increase, however, was not enough to cope with the concessionaire’s losses. This led Maynilad to file another petition to allow for more flexible currency rate adjustments, given that the existing provision only convers normal fluctuations (within 2%). MWSS rejected the petition, citing that Maynilad’s move can be construed as changing the bid. May 2001 – As a result of heavy financial losses, Maynilad was forced to suspend its concession fees payment on the grounds “force majeure.” October 2001 – Maynilad and MWSS tried to resolve the conflict, and agreed on amendment no. 1 of the concession agreement, wherein the foreign currency differential adjustment (FCDA) would serve as a tariff mechanism to recover or compensate for fluctuations in foreign exchange rates. Despite efforts by both parties, the said amendment was not fully implemented and Maynilad failed to secure the needed $350 million loan. December 2002 – A nearly bankrupt Maynilad issued a notice of early termination, noting MWSS’s refusal to grant its request for tariff hike. MWSS questioned this move, and pointed out that Maynilad would only had the right to terminate concession due to nonpayment of concession fees. 2003 – Since the concession agreement provides that all disagreements and claims between the parties in relation to the agreement must be solved by arbitration, the matter went before the appeals panel for major disputes. After 9 months of closed deliberations, the panel decided that neither party was entitled to terminate the concession agreement. April 2005 – MWSS, Maynilad, its shareholders, and creditors entered into a debt and capital restructuring agreement (DCRA), which laid out the steps for restructuring Maynilad’s financial obligations. The DCRA gave MWSS the option to subscribe to an average of 84% of Maynilad’s equity, opening the entry of new private shareholders into the firm. 2006 – Maynilad was privatized for the 2nd time around, and has been taken over by the consortium of DMCI-MPIC (84%) and SUEZ Company (16%). 2013 – Maynilad submitted a 5-year business plan to the MWSS-Regulatory Office, covering the period from 2013 to 2017. Maynilad requested to impose an increase in the firm’s basic charges by P8.58/cubic meter (cu.m.), but this was not carried out by MWSS, and instead ordered the former to reduce its rate by P1.46/cu.m. 2014 – Maynilad went to a local tribunal and won the case over its 2013-2017 unenforced hike implementation, but the MWSS still refused to honor the ruling, prompting the former to seek international arbitration. 2015 – Maynilad filed 2 successive arbitration cases before the the International Chamber of Commerce (ICC) in Singapore, and it awarded Maynilad its proposed 3-year implementation of an adjustment in basic charges. Maynilad sent a notice of arbitration to the DOF regarding the P3.42-billion compensation for the 26-month worth of tariff increases that it failed to collect from its customers due to MWSS’s inaction. This was, again, not honored and implemented by the MWSS, and decided that they would not take further action until the arbitration process for the 2 water concessionaires had been completed. December 2016 – The Permanent Court of Arbitration (PCA) held a hearing in Maxwell Chambers, Singapore in the arbitration between Maynilad and the Republic of the Philippines. The arbitration was conducted in pursuant to the 1976 United Nations Commission on International Trade Law Arbitration Rules.

Source: Asian Development Bank (ADB), Maynilad Mend 2008; varioius news clips.

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Duterte admin seeks procurement reforms in terms of their corresponding calculated prices. The lowest bid shall then undergo a post qualification phase to determine if the The Duterte administration has proposed amendments to the offer is compliant with the specifications set by the procuring procurement law in order to eliminate uncompetitive bidders, agency.” According to the President, however, “the government as well as to prevent corruption in the procurement process. must always buy the best and not necessarily choose the lowest priced goods and services.” He also stressed that the existing Prior to the Duterte administration’s proposed reforms policy is “the source of corruption” since the bidders will on procurement, the Government Procurement Policy always race for the lowest price without assuring the quality. Board (GPPB) had already revised the implementing rules Amending the procurement law would take time. In the and regulations (IRR) of Republic Act (RA) 9184, or the meantime, the DBM and the Department of Finance (DOF) Government Procurement Reform Act (GPRA), in 2016 “to proposed a revision in the implementing rule and regulation further modernize and standardize the procurement processes (IRR) of GPRA to discourage the uncompetitive bidders. The of the various branches of the Philippine government.” proposed revision states that a contractor must finish up to 50% Notably, the Philippine procurement budget has been of the project before the government releases their first payment. increasing significantly (see figure on Philippine Procurement As explained by DBM Secretary Benjamin Diokno, Budget). Data from the Department of Budget and Management “sometimes, a company will bid and ‘dive’. It becomes the (DBM) showed that from 2013 to 2016, the government lowest bidder so it wins. It will only get the mobilization fee, had spent an average of P605 billion annually on public which is 15%. For example, if you have a P100 million project, procurement, which accounted for around 24.22% of the a company dives and wins. It will get the P15 million, then it national government budget. The expenditure on capital will just disappear.” He also noted that the proposed rule is outlays, consisting mostly of public infrastructure, had the intended to speed up the project operations, which would benefit biggest portion on the procurement budget by expense class. the government as it invests in massive infrastructure project in To deliver the best quality of goods and services out of the the coming years. Although the rule “would not be immediately government procurement budget, President Rodrigo Duterte, applied to all government projects, yet,” Sec. Diokno added. in his 2nd State of the Nation Address (SONA), expressed his As a “long term solution,” amendments in the procurement administration’s plan of introducing new procurement reforms, law should be pursued. Wherein the uncompetitive bidders, specifically with regard to the lowest-bid policy and advance who are often the cause of further delays and corruption in payment. Pres. Duterte urged the Congress to review the existing the procurement process of goods and services, would be GPRA, which mandates “that the lowest bids that passed the discouraged to engage in the procurement process of the preliminary examination shall be ranked from lowest to highest government. The reforms, therefore, are expected “to ensure that contractors accomplish their projects swiftly and efficiently.”

PHILIPPINE PROCUREMENT BUDGET (IN THOUSAND PESOS)

700,000,000

600,000,000

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

0 2013 2014 2015 2016

President Rodrigo Duterte urged the Congress to review the GPRA in order to deliver the best quality of goods and services.

Philippine ANALYST BUSINESS July-August 2017 75 BUSINESS

The government must always buy the best and not necessarily choose the lowest priced goods and services.

DBM and DOF proposed a new 50% rule.

The proposed procurement reforms are expected to ensure contractors accomplish projects swiftly and efficiently.

DTI launches trade portal the country. The trade portal intends to generate a more transparent trade environment, allowing businesses to have improved access The Department of Trade and Industry (DTI) launched to information. The DTI states that the underlying goal of this the Philippine National Trade Repository (PNTR), a web- initiative is to reduce the amount of time and costs incurred in based portal that provides a single source of comprehensive, trade transactions. Similarly, the establishment of the PNTR is accurate and updated information on all trade related also in line with the country’s obligation under the World Trade matters. Organization Agreement on Trade Facilitation (WTO-ATF), which requires countries to promptly publish trade-related information. Traders often find themselves in a difficult situation in terms The Ad-Hoc Technical Working Group on PNTR (TWG- of accessing information on permits and licenses they need to PNTR) under the Committee on AEC is composed of various comply with just to export or import a product. In a bid to solve Trade Regulatory Government Agencies (TRGA) (see figure this conundrum, the ASEAN member-states came up with a on List of agencies involved) that have actively collaborated solution – the establishment of the ASEAN Trade Repository and contributed to the much-needed information for the portal. (ATR), a web-based portal acting as a single point of access to Meanwhile, PNTR secretariat head Luis Catibayan all the important information, including trade-related measures, said the PNTR should particularly benefit micro, small needed by a trader to conduct business. DTI Undersecretary and medium enterprises (MSMEs), mainly because access Adrian Cristobal Jr. pointed out that to further support the goals to trade data was among the major concerns for those of the ASEAN Economic Community (AEC), “integration efforts who are participating in the global and regional trade. in the ASEAN region will harness technology.” The presence Linking the PNTR to the ATR gives MSMEs accurate and of trade repositories will help “facilitate the free flow of goods updated information on the regulatory requirements for the and services among member-states, and address ease of doing movement of goods to and among ASEAN member states. business issues across the region,” Usec. Cristobal added. The emergence of the PNTR recognizes the importance As part of the Philippines’ commitment under the ASEAN of information and communications technology (ICT), Trade in Goods Agreement (ATIGA), the DTI introduced the which is in accordance with the AEC’s vision of a PNTR, which will serve both local and foreign importers/ stable, prosperous and highly competitive region wherein exporters, and/or anyone in need of trade information pertaining to there is a free flow of goods, services and investment.

The information found on the ATR is accessible by ‘topic’ and by ‘country.’ The 9 ‘topics’ are the following: hh Tariff Nomenclature; hh Most Favored Nation (MFN) tariffs, preferential tariffs ordered under the ATIGA and other Agreements of ASEAN with its Dialogue Partners; hh Rules of Origin; hh Non-tariff Measures; hh National Trade and Customs Laws and Rules; hh Procedures and Documentary Requirements; hh Administrative Rulings; hh Best Practices in Trade Facilitation; and List of Authorized Economic Operators.

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List of agencies involved agencies List of

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Under the ATIGA, the ASEAN member states must come up with respective trade repositories.

The rise of ATR allows ASEAN member states to trade seamlessly across the region.

The PNTR will be a significant component of the government’s trade facilitation strategy.

PH companies in Asia300 power performers hh Aboitiz Power Philippines (98th, up from 108th). The remaining 9 Philippine companies are Alliance According to Nikkei Asian Review’s annual list of most Global Group Inc., International Container Terminal powerful companies in Asia, 11 Philippine companies are Services Inc. (ICTSI), JG Summit Holdings Inc., LT Group included in the top 100. These Filipino firms have expanded Inc., Manila Electric Company, PLDT Inc., San Miguel their market shares across other emerging countries and Corp., SM Investments Corp. and Bloomberry Resorts South East Asia. Corp. (a newly listed Philippine company in Asia300). Leading the 20 listed Philippine companies are SMPH The 2017 Nikkei’s Asia300 Power Performers Ranking listed and URC. Nikkei Asia reported that the consolidation of SM the 300 most powerful and valuable companies in Asia. The Development, Highlands Prime and SM Land into SM Prime made companies originated from 11 countries across the continent. the holding firm“the Philippines' biggest real estate company and Taiwan-based company Largan Precision, the world’s leading one of the largest in the region in terms of market capitalization.” smartphone camera lens producer, led the list, climbing from 4th The firm ranked 23rd with a total amount of P989.11 billion in 2016. Indian companies dominated the top 30 list with 10 firms market capitalization as of June 2017. Also, the company has 60 coming from entertainment, IT services, pharmaceuticals, tobacco, operating malls in the country and 7 shopping malls in China. motor vehicles, household/personal care, and industrial specialties On the other hand, URC is the country’s leading snack sectors (see table on Top 30 most powerful companies in Asia). and beverage producer. The company has been expanding Twenty Philippine companies are included in the top 300. its market and product portfolio by acquiring shares from However, only 11 (see below) made it to the top 100 and 2 in the top 30. fellow South East Asian companies as well as building new production plants. Recently, URC gained its 1st expansion hh SM Prime Holdings (SMPH) (ranked 23rd in 2017, up from outside the region by acquiring New Zealand’s NZ Snack 25th in 2016); Food Holdings. URC ranked 26th with a total amount of hh Universal Robina Corp. (URC) (26th, up from 73rd); P361.48 billion market capitalization as of June 2017. hh Cebu Air (34th, up from 199th); Given these, Philippine companies as well as Viet hh Ayala Land (49th, up from 101th); Nam, Thailand, Malaysian and Indonesian companies are among the most powerful from the South East Asian region. hh Metro Pacific Investment (58th, up from 74th); These companies have been aggressively expanding their hh GT Capital Holdings (70th, down from 38th); market shares in emerging economies and within the region. hh Jollibee Foods (73rd, down from 124th); Nikkei’s Asia300 Power Performers Ranking hh DMCI Holdings (83rd, down from 77th ); focused on 4 indicators: growth, profitability, efficiency and financial soundness. The ranking is based hh Ayala Corp. (88th, up from 159th); on the cumulative scores gained from each indicator. hh BDO Unibank (97th, up from 146th); and Philippine ANALYST BUSINESS July-August 2017 78 BUSINESS

top 30 most powerful companies in asia

RANK COMPANY COUNTRY/REGION INDUSTRY

1 Largan Precision Taiwan Electronic components

2 HCL Technologies India IT Services

3 Zee Entertainment Enterprises India Movies/entertainment

4 Tata Consultancy Services India IT Services

5 Taiwan Semiconductor Manufacturing Co. (TSMC) Taiwan Semiconductors

6 Alibaba Group Holding China Internet retail

7 Eclat Textile Taiwan Textiles

8 Vietnam Dairy Products (Vinamilk) Vietnam Food

9 Tencent Holdings China Internet software/services

10 Airports of Thailand Thailand Transportation

11 Sun Pharmaceutical Industries India Pharmaceuticals

12 Kweichow Moutai China Beverages

13 Central Pattana Thailand Real estate development

14 Catcher Technology Taiwan Metal fabrication

15 Infosys India IT Services

16 ITC India Tobacco

17 Maruti Suzuki India India Motor vehicles

18 Lupin India Pharmaceuticals

19 Chongqing Changan Automobile China Motor vehicles

20 Great Wall Motor China Motor vehicles

21 Naver South Korea Internet software/services

22 China Overseas Land & Investment China Real estate development

23 SM Prime Holdings Philippines Real estate development

24 Dabur India India Household/personal care

25 Hartalega Holdings Malaysia Medical products

26 Universal Robina Corp. Philippines Food

27 Kalbe Farma Indonesia Pharmaceuticals

28 Asian Paints India Industrial specialties

29 Korea Aerospace Industries South Korea Aerospace, defense

30 Top Glove Malaysia Medical products

Source: Nikkei Asian Review

Twenty Philippine companies are listed in the top 300.

Leading the 20 Philippine companies are SM Prime Holdings and Universal Robina Corp.

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MINING, OIL, & GAS The review will focus on the taxation schemes on mining firms, as well as the share of mining revenues to the local government units (LGUs). All recommendations to be MICC to review mining tax scheme gathered from the review will be considered for inclusion in one of the 4 other tax reform packages being drafted by As part of President Rodrigo Duterte’s directive to evaluate the DOF under its Comprehensive Tax Reform Program. mining rules and regulation in the Philippines, the Mining However, Usec. Agabin said there is a shortage in the council’s Industry Coordination Council (MICC) is set to review the budget due to issues on where it would be sourced. “The initially rationalization of taxation in the mining sector. proposed P50 million budget was to be taken from the emergency funds of Malacanang but this was not allowed. So the co-chairs During his 2nd State of the Nation Address (SONA), Pres. of the MICC, the DOF and the DENR, agreed to share first P10 Duterte threatened to impose higher taxes on the mining sector. million each from their own budget to start the review process,” “I will increase their taxes. I think of something that will he said. He added that the amount would initially cover the review compensate or will make up for this environmental damage or of half of all the mining operations in the country, with the 28 otherwise, we will stop mining,“ the President said. He urged firms affected by Ms. Lopez’s closure and suspension orders. all mining stakeholders to practice responsible extraction and Meanwhile, Pres. Duterte called on LGUs to ensure mining utilization of resources, ensure the full rehabilitation of all areas firms have complied with environmental laws and urged them damaged by mining activities and support local communities. to declare their exact incomes to the DOF—noting that he Department of Finance (DOF) Secretary Carlos Dominguez would shut them down if they did not. He also said he would III said the strong message from the President had prompted stop the extraction and exportation of unprocessed mineral the MICC to include the tax regime in its industry review. This resources to other countries. “If possible, we shall put a stop is on top of the MICC’s task to assess the mining operations to the extraction and exportation of our mineral resources in the country, including those affected by the closure and to foreign nations for processing abroad and importing them suspension orders of former Department of Environment back to the Philippines in the form of consumer goods at prices and Natural Resources (DENR) Secretary Regina Lopez. twice or thrice the value of the original raw materials foreign The MICC is co-chaired by the DOF, and the DENR. corporations pay for them,” he said. The President clarified that According to DOF Undersecretary Bayani Agabin, the he was not anti-mining, but warned the sector that it would be MICC fully supports the effort of the President to review the held responsible for the full and quick cleanup of mined areas. mining laws and to look at the possibility of increasing upstream The mining sector is currently in a wait-and-see stance in lieu industries. The council has several Technical Working Groups of the unpredictable mining policy of the current government. (TWGs) that will undertake the review of the fiscal regime. The list of experts to be tapped for the review is being finalized.

Pres. Duterte threatened to impose higher taxes on the mining sector.

The strong message from the President prompted the MICC to include the tax regime in its industry review.

Pres. Duterte called on LGUs to ensure mining companies have complied with environmental laws and urged them to declare their exact incomes to the DOF.

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Open-pit mining ban remains Meanwhile, the Chamber of Mines of the Philippines (COMP) said it hoped that the issue on open pit mining will The order banning all the prospective open-pit mining in be resolved soon. The COMP said that it understands Sec. the Philippines is still in effect, as the inter-agency mining Cimatu’s recent decision, saying the open-pit ban is a serious council reviews how mining companies are taxed in the policy decision that needs to be studied carefully, with due country. consideration of all impacts and the interests of all stakeholders. “We only hope that the matter will be resolved soon to According to Department of Environment and Natural address the uncertainty currently pervading in the industry,” Resources (DENR) Secretary Roy Cimatu, the open-pit COMP legal and policy vice president Ronald Recidoro said. mining ban is still the subject of debate in the Mining Industry “We hope it will be an evidence-based decision which Coordinating Council (MICC) due to its pros and cons. Sec. considers current technology. Open pit mining is an Cimatu also said that there was no rush to decide on suspended accepted practice worldwide and is safer than underground and closed mines, adding it would review all evidence mining. Open pit mines can be fully rehabilitated and brought forward by the mining companies before determining transformed for other land uses,” Mr. Recidoro added. whether to keep, modify, or reverse his predecessor's orders. Furthermore, DENR Undersecretary for Legal Affairs Last April 2017, former DENR Secretary Regina Lopez Maria Paz Luna said the mining firms that were issued issued Administrative Order (AO) 2017-10 banning prospective closure and suspension orders for alleged violations of open-pit mines in the country (see Lopez bans prospective mining and environmental laws will have to wait a bit open-pit mining, April 2017 Analyst.) Mines affected by the longer since the decision was moved to end-August from order are the $5.8-billion Tampakan copper-gold project of the original schedule of end-July. Sec. Cimatu added that the Sagittarius Mines Inc. in South Cotabato, the $1.2-billion delay was due to the “voluminous” documents submitted Silangan mine project of Silangan Mindanao Mining Co. in by the respondent-companies. Of the 22 large-scale mining Surigao del Norte, and the $2-billion King-king copper-gold operators, only 13 firms submitted a motion for reconsideration. project of St. Augustine Gold & Copper Ltd in Compostela Valley. Mines and Geoscience Bureau (MGB) chief Wilfredo The sanctions came after Ms. Lopez cited several reasons Moncano added that the target was to finish reviewing 3 for the ban, including its financial and environmental liability, to 4 cases a week. Of the 13 companies, DENR’s legal deprivation of economic use of the area, continuing adverse impact affairs department already finished evaluating 3 firms, but on the environment, and high risk of exposure to host residential the decisions have to be presented to the Secretary first. area. The AO was issued even if open pit mining is allowed under Sec. Cimatu reiterated that the department was keen on the Philippine Mining Act. The Constitution even gives the state the weeding out corruption, especially in the mining sector. “If duty to explore, develop, and utilize the country’s mineral resources. mining companies cannot improve their operations, then they need to get out of the business,” he said. Earlier, he said that the department will strictly enforce mining and environmental regulations to ensure responsible mining in the country.

Pres. Duterte threatened to impose higher taxes on the mining sector.

Pres. Duterte threatened to impose higher taxes on the mining sector.

The open-pit ban is a serious policy decision that needs to be studied carefully.

Philippine ANALYST BUSINESS July-August 2017 81 BUSINESS

I.T. UPDATE through a cloud platform with storage and network security for LGUs, DICT Undersecretary Denis Villorente said. The mode of payment can be settled at the LGU Treasury DICT launches eBPLS for LGUs Office or via online through the electronic payment option at the Land Bank of the Philippines and at the Development The Department of Information and Communications Bank of the Philippines. The software application is expected Technology (DICT) launched a cloud-based Electronic to be accessed within the year through the websites of the Business Permit and Licensing System (eBPLS) software respective LGUs that will employ eBPLS in the country. This application that will computerize and automate the new software is one of the 3 initiatives under the Electronic processing of business permits, and licensing systems in the Governance in Local Government Unit (eLGU) Project of DICT. Philippines. The eBPLS will enable local government units DICT Secretary Rodolfo Salalima said that the sooner the government moves all LGUs online with their business (LGUs) to process the application for new and renewal of permits and licensing system, the better public service the business permits electronically. Filipino people would get. Sec. Salalima also noted that it was President Rodrigo Duterte’s directive to set priorities that are The new software is compliant with the revised service critical in doing business. “Part of his 10-point socioeconomic standards of the joint memorandum circular signed by the DICT, agenda is to increase competitiveness and the ease of doing the Department of Trade and Industry (DTI), and the Department business by moving towards automation,” he emphasized. of Local Government (DILG) in 2016 (see Nationwide online In a recently published report by the World Bank – processing of business permits, September 2016 Analyst). International Finance Corp., the Philippines ranked poorly in Under the circular, LGUs are required to process business terms of “Starting a Business” indicator, where it fell 7 places registrations within 2 days for new business permit applications to 171th this year from 164th in 2016 (see table on PH Doing and 1 day for business permit renewals, requiring 2 signatories, Business Ranking). The report emphasized that during the past namely the Mayor (or designated representative) and the year, the country made dealing with construction permits easier treasurer as recommending approval. With the help of the eBPLS by increasing the transparency of its building regulations. Paying software, processing time will be shortened and will only take taxes was also made easier by introducing an online system for about 30 minutes in compliance with the new service standards. filing and paying health contributions, and by allowing for online The DICT said the system’s main features include: corporate income tax and VAT returns to be completed offline. online application for new/renewal of business permits and The move to streamline and simplify business registration retirement of businesses and business lines; computerized processes highlights the Duterte administration’s commitment assessment of fees, taxes and charges; online printing of Tax to improve public service delivery and to promote transparency Order of Payment; online printing of business permit; and in government transactions. It will also have a lasting impact on endorsement module for the Office of the Building Official, enhancing the business and investment climate of the Philippines. and other LGU concerned offices. The system will be deployed

With the help of the eBPLS software, processing time for business registration will be shortened.

Part of Pres. Duterte’s 10-point socioeconomic agenda is to increase competitiveness and the ease of doing business by moving towards automation.

Improving the delivery of public service, and promoting transparency in government transactions would enhance the business and investment climate of the Philippines.

Philippine ANALYST BUSINESS July-August 2017 82 BUSINESS

ph doing business ranking

IFC DOING BUSINESS 2013 2014 2015 2016 2017

60% 60% 60% 60% Ease of Doing Business Rank 56%% (138/183) 108/183 97/183 103/183 99/190 Starting a Business Rank 66% (161) 66% (170) 67% (157) 69% (164) 69% (171)

Procedures (number) 16 15 16 16 16

Time (days) 36 35 34 29 28

Cost (% of income per capital) 19.2 18.7 16.6 16.1 15.8

Minimum capital (% of income per capita) 4.8 4.6 3.6 3.3 3.1

Source: IFC-World Bank Doing Business Report 2013-2017

Globe rolls out SEA-U.S. submarine cable Mr. Cu said that the cable system is expected to service system the exponential growth of bandwidth between Southeast Asia and the U.S. It would support the growth of businesses Globe Telecom recently launched a $250 million Southeast in Mindanao and lessen the country’s dependence on international cable systems for its internet connection. “First Asia-United States (SEA-U.S.) submarine cable system world connection is more than just fast internet but is also that will provide internet connectivity for businesses in the about building a better nation that transcends borders and southern island of Mindanao as well as the entire country. opens infinite possibilities for everyone. We are excited about this development because of the immense benefits that the The SEA-U.S. cable system is connected to Globe's landing undersea cable system will bring to the Philippines, he added. station in Barangay Talomo, Davao City which houses the power Peter Maquera, Senior Vice President for Globe Enterprise feed equipment needed to run the system. Outside of Luzon, Group, also said that “the facility will be most beneficial it is the 1st direct connection of Globe to the U.S. for faster to businesses which require higher bandwidth and network transmission of data. Globe President and CEO Ernest Cu said resiliency at cost-efficient rates.” The new cable system that the new submarine cable “changes the game for the country” will benefit BPOs, financial institutions, Internet service and marks the Philippines’ entry into 1st world internet territory. providers and other content providers in the Mindanao region. The new cable system is a 14,500-kilometer undersea line which The system was built by a consortium of 7 international connects the territories of Manado, Indonesia; Davao, Philippines; telecommunications composed of PT. Telekomunikasi Piti, Guam; Oahu, Hawaii; and Los Angeles, California (see figure Indonesia International (Telin), RAM Telecom International, on SEA-U.S. Submarine Cable System.) It consists of 2 fiber optic Hawaiian Telcom, Teleguam Holdings GTI Corp. (a member pairs that use the 100 gigabits per second (Gbps) transmission of the Globe Telecom group of companies), and Telkom USA. technology to deliver 20 terabits per second capacity (Tb/s). Information technology firms NEC Corp. and NEC Corp. of

The new submarine cable system marks the Philippines’ entry into 1st world internet territory.

The cable system is expected to service the exponential growth of bandwidth between Southeast Asia and the U.S.

Philippine ANALYST BUSINESS July-August 2017 83 BUSINESS

The facility will be most beneficial to businesses which require higher bandwidth and network resiliency at cost-efficient rates.

America, meanwhile, are the system suppliers for the project. The new facility bypasses the Taiwan earthquake zone in order to ensure uninterrupted connectivity and greater resiliency. This is expected to prevent the incident back in 2006 where international cables were broken causing the Philippines to be isolated for a few days in terms of Internet connection. Meanwhile, Department of Information and Communications Technology (DICT) Secretary Rodolfo Salalima said that “the launching of this SEA-U.S. cable system underscores the importance of integrating ICT in the improvement of government service delivery.” The completion of the new submarine cable system will help address ICT requirements of major trade and industry centers in Mindanao region.

Philippine ANALYST BUSINESS July-August 2017 84 BUSINESS

LIST OF BOI-REGISTERED PROJECTS - JUNE-JULY 2017

P roject C ost E q uit y Industry Activity (PHP Million) Local/Foreign

AGRICULTURE, FORESTRY, AND FISHERY

Pilmico Animal Nutrition Corporation Producer of live hogs and pork meat in Brgy. Armenia, Tarlac City 1,461.2 100% Filipino

Zashi Hog Farm, Inc. Producer of hogs in San Ildefonso, Magalang, Pampanga 157.2 100% Filipino

ELECTRICITY, WATER, AND GAS

Renewable energy developer of 8MW Matuno River Hydropower Plant Project in Brgy. Matuno River Development Corporation 1,412.6 100% Filipino Manamtam, Bambang, Nueva Vizcaya

Operator of 16 MW Bago City Diesel-Fired Power Plant Project in Purok San Jose, Brgy. 7 1 % F i l i p i n o Central Negros Power Reliability, Inc. 580.0 Calumangan, Bago City, Negros Occidental 29% Foreign 9 5 % F i l i p i n o Taguibo Aquatech Solutions, Inc. Public Infra and Logistics - Bulk Water Treatment and Supply 870.0 5% Japanese

IT and IT-ENABLED SERVICES 6 0 % F i l i p i n o HIG Service Technology Philippines, Inc. Engineering design in 2D and 3D design of car parts 3.0 40% South Korea MISCELLANEOUS MANUFACTURES

Tenshinzan (Philippines), Inc. Feedstoc pellets (biomass fuel pellets) 38.9 99.91% Japanese

REAL ESTATE AND PROPERTY DEVELOPMENT

Developer of econoic and low-cost housing project (South Spring Heights Batch B - Borland Development Corporation 256.3 100% Filipino Horizontal) in Brgy. San Miguel, Sto. Tomas, Batangas

Developer of economic and low-cost housing project (The Colonial Residences - Vertical) in Carlcon Builders, Inc. 37.2 100% Filipino Loyola Heights, Quezon City

Developer of economic and low-cost housing project (Camella Lipa Highlands - Horizontal) Communities Batangas, Inc. 122.9 100% Filipino in Brgy. Balintawa, Lipa City

Developer of economic and low-cost housing unit (Camella San Pablo - Horizontal) in Brgy. Communities Batangas, Inc. 310.9 100% Filipino San Jose, San Pablo City, Laguna

Developer of economic and low-cost housing project (La Mirande Trails - Horizontal) in Brgy. Communities Cagayan, Inc. 199.4 100% Filipino Lumbia, Cagayan de Oro City

Developer of economic and low-cost housing project (The Loop at Limketkai Center (North Communities Cagayan, Inc. 485.0 100% Filipino Tower) - Vertical) in Limketkai Center, Lapasan, Cagayan de Oro City

Developer of economic and low-cost housing project (Riverfront Subdivision - Horizontal) in Communities Cebu, Inc. 210.7 100% Filipino Pulangbato, Talamban, Cebu City

Developer of economic and low-cost housing project (Camella Cerritos Koronadal - Communities General Santos, Inc. 163.3 100% Filipino Horizontal) in Prk. Mabuhay 1, Brgy. Carpenter Hill, Koronadal City

Developer of economic and low-cost housing project (Camella Cerritos General Santos - Communities General Santos, Inc. 259.2 100% Filipino Horizontal) in Brgy. Lagao, General Santos City

Developer of economic and low-cost housing project (Camella Laoag Phase 2, 3, and 4 - Communities Ilocos, Inc. 386.1 100% Filipino Horizontal) in Brgy. 44 Zamboanga, Laoag City, Ilocos Norte Developer of economic and low-cost housing project (Camella Cagayan - Horizontal) in Carig Communities Isabela, Inc 455.6 100% Filipino Sur, Tuguegarao City, Cagayan Developer of economic and low-cost housing project (Camella Santiago - Horizontan) in Communities Isabela, Inc 139.5 100% Filipino Brgy. Batal, Santiago City Ddeveloper of economic and low-cost housing project (Camella Leyte Courtyards Subdivision Communities Leyte, Inc. 35.7 100% Filipino - Horizontal) in Brgy. Campetic, Palo, Leyte Developer of economic and low-cost housing project (Camella Pinecrest 3 - Horizontal) in Communities Negros, Inc. 85.2 100% Filipino Brgy. Mandalagan, Bacolod City

Developer of economic and low-cost housing project (Camella Fiorenza Phase 2 - Horizontal) Communities Pampanga, Inc. 337.1 100% Filipino in Brgy. Paligui, Apalit, Pampanga

Developer of economic and low-cost housing project (Camella Fiorenza Phase 3 - Horizontal) Communities Pampanga, Inc. 105.9 100% Filipino in Paligui, Apalit, Pampanga Developer of economic and low-cost housing project (Camella Aklan - Horizontal) in Brgy. Communities Panay, Inc. 189.3 100% Filipino Joyao-joyao, Numancia, Aklan Developer of economic and low-cost housing project (Camella Gapan - Horizontal) in Brgy. Communities Tarlac, Inc. 504.1 100% Filipino Sto Cristo Sur and Malimba, Gapan City Developer of economic and low-cost housing project (Camella Nueva Ecija Phae 2 - Communities Tarlac, Inc. 212.3 100% Filipino Horizontal) in Brgy. Valle Cruz, Cabanatuan City Developer of economic and low-cost housing project (Camella Tarlac phase 4 - Frontiera - Communities Tarlac, Inc. 229.5 100% Filipino Horizontal) in Brgy. Maliwalo, Tarlac City Developer of economic and low-cost housing project (One Oasis Cagayan de Oro Bldg 2) in 7 1 % F i l i p i n o Filinvest Land, Inc. 347.8 Cagayan de Oro City 29% Singaporean

Philippine ANALYST BUSINESS July-August 2017 85 BUSINESS

First Golden Achievers Realty and Developer of economic and low-cost housing project (Grand Residences Espana 2 - Vertical) 176.1 100% Filipino Development Corporation in A.H. Lacson Ave., and P. Florentino St., Sampaloc, Manila Developer of economic and low-cost housing project (Tressa Residences - Horizontal) in Hausland Development Corporation 1,088.3 100% Filipino Brgy. Mabiga & Mauaque, Mabalacat, Pampanga Developer of economic and low-cost housing project (Hausland Prime Residences - Hausland Development Corporation 1,745.9 100% Filipino Horizontal) in Brgy. Panipuan, Mexico, Pampanga Developer of economic and low-cost housing project (Camella Carson - Horizontal) in Brgy. Household Development Corporation 151.3 100% Filipino Molino III, Bacoor, Cavite Developer of economic and low-cost housing project (Camella Cielo - Horizontal) in Brgy. Household Development Corporation 450.6 100% Filipino Kaybanban, City of San Jose del Monte, Bulacan Developer of economic and low-cost housing project (Evisssa Subdivision - Horizontal) in Johndorf Ventures Corporation 489.0 100% Filipino Brgy. Calawisan, Lapu-lapu City Developer of economic and low-cost housing project (Summerville) in Palalan, Lumbia, Liberty Land Corporation 180.8 100% Filipino Cagayan de Oro City P.A. Alvarez Properties and Development Developer of economic and low-cost housing project (St. Joseph Richfiled haseP 2 - 9 5 % F i l i p i n o 1,063.0 Corporation Horizontal) in Brgy. Sinalhan, Sta. Rosa City, Laguna 5% Canadian Developer of economic and low-cost housing project (Westwood Phase 2 - Horizontal) in Property Company of Friends, Inc. 265.8 100% Filipino Brgy. Pasong Camachile 2, Gen. Trias, Cavite Developer of economic and low-cost housing project (Brighton Phase 1 - Horizontal) in Brgy. Property Company of Friends, Inc. 381.9 100% Filipino Pasong Camachile 1, Gen. Trias, Cavite Developer of economic and low-cost housing project (Monticello Villas Phase 3 - Horizontal) Property Company of Friends, Inc. 257.7 100% Filipino in Brgy. Pasong Camachile 1, Gen. Trias, Cavite Developer of economic and low-cost housing project (Bellefort Phase 3 - Horizontal) in Brgy. Property Company of Friends, Inc. 41.5 100% Filipino Salawag, Dasmarinas, Cavite Developer of economic and low-cost housing project (Carmona Estate Phase 13 - Horizontal) Property Company of Friends, Inc. 165.4 100% Filipino in Brgy. Timbao, Binan, Laguna Developer of economic and low-cost housing project (Glenbrook Phase 1 - Horizontal) in Property Company of Friends, Inc. 317.9 100% Filipino Brgy. Pasong Camachile, Gen. Trias, Cavite Developer of economic and low-cost housing project (GlenBrook Phase - Horizontal) in Brgy. Property Company of Friends, Inc. 347.2 100% Filipino Pasong Camachile I, Gen. Trias, Cavite Developer of economic and low-cost housing project (Glenbrook Phase 3 - Horizontal) in Property Company of Friends, Inc. 292.6 100% Filipino Brgy. Pasong Camachile 1 & 11, Gen. Trias, Cavite Developer of economic and low-cost housing project (Kensington Phase 20 - Horizontal) in Property Company of Friends, Inc. 111.6 100% Filipino Brgy. Bacao I, Gen. Trias, Cavite Developer of economic and low-cost housing project (Kensington Phase 26 - Horizontal) in Property Company of Friends, Inc. 13.8 100% Filipino Brgy. Navarro, Gen. Trias, Cavite Developer of economic and low-cost housing project (Kensington Phase 28 - Horizontal) in Property Company of Friends, Inc. 132.4 100% Filipino Brgy. Bacao I, Gen. Trias, Cavite

Developer of economic and low-cost housing project (Parc Regency L - Horizontal) in Brgy. Property Company of Friends, Inc. 58.3 100% Filipino Ungka I and II, Balabag, Aganan, Pavia, Iloilo

Developer of economic and low-cost housing project (Parc Regency M - Horizontal) in Brgy. Property Company of Friends, Inc. 51.0 100% Filipino Ungka I and II, Balabag, Aganan, Pavia, Iloilo Developer of economic and low-cost housing project (Parc Regency N - Horizontal) in Brgy. Property Company of Friends, Inc. 122.6 100% Filipino Ungka I and II, Balabag, Aganan, Pavia, Iloilo Developer of economic and low-cost housing project (Somerset Phase 16 - Horizontal) in Property Company of Friends, Inc. 55.1 100% Filipino Brgy. Navarro, Gen. Trias, Cavite Developer of economic and low-cost housing project (Westwood Phae 1 - Horizontal) in Brgy. Property Company of Friends, Inc. 355.3 100% Filipino Pasong Camachile 1, Gen. Trias, Cavite Developer of economic and low-cost housing project (Monticello Villas Phase 3 - Horizontal) Property Company of Friends, Inc. 135.3 100% Filipino in Brgy. Balabag, Pavia, Iloilo Developer of economic and low-cost housing project (Parc Regency Q - Horizontal) in Brgy. Property Company of Friends, Inc. 97.0 100% Filipino Balabag, Pavia, Iloilo Developer of economic and low-cost housing project (SMDC Cheerful Homes - Horizontal) in SM Development Corporation 1,880.9 99.95% Filipino Brgy. Sta. Maria & Brgy. Bundagul, Mabalacat, Pampanga 8 1 % F i l i p i n o Basic Housing Solutions, Inc. Developer of Economic and Low-cost Housing Project 1,050.3 19% American

Developer of economic and low-cost housing project (Carmenchu Residences-Horizontal) in Gennext Land Development Inc. 72.8 100% Filipino Sta. Cruz, Laguna

Developer of economic and low-cost housing project (Camella Bucandala Phase 3 Expansion Household Development Corporation 236.9 100% Filipino - Horizontal) in Imus, Cavite

Household Development Corporation Developer of Economic and Low-cost Housing Project 742.1 100% Filipino

Property Company of Friends, Inc. Developer of Economic and Low-cost Housing Project 132.4 100% Filipino

Property Company of Friends, Inc. Developer of Economic and Low-cost Housing Project 219.3 100% Filipino

Property Company of Friends, Inc. Developer of Economic and Low-cost Housing Project 47.8 100% Filipino

Property Company of Friends, Inc. Developer of Economic and Low-cost Housing Project 181.9 100% Filipino

Property Company of Friends, Inc. Developer of Economic and Low-cost Housing Project 97.9 100% Filipino

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Developer of economic and low-cost housing project (Vista Brent Hill Condominium - Vista Residences, Inc. 134.6 100% Filipino Vertical) in Baguio City Developer of economic and low-cost housing project (Vista GL Taft - Vertical) in Paco, Vista Residences, Inc. 937.1 100% Filipino Manila Developer of economic and low-cost housing project (Vista Pointe - Vertical) in Katipunan Vista Residences, Inc. 718.4 100% Filipino Ave., Quezon City

Vista Residences, Inc. Developer of Economic and Low-cost Housing Project 976.1 100% Filipino

Vista Residences, Inc. Developer of Economic and Low-cost Housing Project 350.3 100% Filipino

Vista Residences, Inc. Developer of Economic and Low-cost Housing Project 427.4 100% Filipino

Developer of economic and low-cost housing project (The Hive Phase 2 (Towers C and D - MySpace Properties, Inc. 457.6 100% Filipino Veritcal) in Taytay, Rizal Developer of economic and low-cost housing project (Pacific Grande Residence Pacific Grande Realty & Dev't Corp. 273.3 100% Filipino Condominium - Bldg., 12, 14, 15, 16, 17 & 18 - Vertical) in Lapu-lapu City Developer of economic and low-cost housing project (Pacifica Homes Navarro Additional) - Pacific Pabahay Homes, Inc. 89.3 100% Filipino Gen. Trias, Cavite

STORAGE AND WAREHOUSING Operator of AAA dressing plant and cold storage facilities in its existing plant in Concepcion, 9 0 % F i l i p i n o 557 Feather Meal Corp. 78.3 Tarlac 10% American

Pryce Gases, Inc. Bulk marketing of petroleum products 175.2 98.98% Filipino Glacier Liberty Refrigeration Services Operator of cold storage and blast freezing facilities in Legaspi City 128.0 100% Filipino Corporation TRANSPORT SERVICES

Operator of air transport services (Routes) Manila - Incheon - Manila and Manila Bangkok 8 6 % F i l i p i n o Cebu Air, Inc. 6,076.7 Manila 14% Various

Domestic shipping operator of 2 passenger fast ferry ships - MV St. Camael, 272 GT & MV St. The Supercat Fast Ferry Corporation 518.9 100% Filipino Sariel, 272 GT) homewharf - Cebu: Route: Cebu-Tagbilaran and Cebu-Ormoc

TOTAL 34,147.0

Philippine ANALYST BUSINESS July-August 2017 87 BUSINESS

PEZA APPROVED PROJECTS -1ST Quarter 2017 Equity INDUSTRY ACTIVITY ZONE Local/Foreign APPAREL AND TEXTILE MANUFACTURES ANGELES INDUSTRIAL SCREEN PRINTING Engage in Screen Printing Services for leatherware products 9 9 . 8 % - B r i t i s h Angeles Industrial Park - SEZ INC. 8 9 % - F i l i p i n o HAMLIN INDUSTRIAL CORPORATION Production of brew bags Golden Mile Business Park - SEZ 11% - Chinese

9 9 % - T a i w a n e s e HATQUARTER INC. Manufacture of hats, caps, and headwear Mactan Economic Zone II - SEZ 1% - Filipino

99.99% - British Virgin YTY DIGITAL PRINT CORP. Engage in printing of fabrics Mactan Economic Zone Islander

AUTOMOTIVE TRADE Manufacture of automobile parts and components for Original DENSO PHILIPPINES CORPORATION 99.99% - Singaporean Carmelray Industrial Park I - SEZ Equipment Manufacturer (OEM) Manufacture of turbocharger parts such as Sand Inner Mold YN PRODUCTS PHILIPPINES CORP. 99.98% - Japanese Greenfield Automotive Park - SEZ (SIM) Assembly and Center Block CHEMICAL AND CHEMICAL PRODUCTS

PHILIPPINE LICHENG NEW MATERIALS CORP. Manufacture/processing of Sodium Tungstate 100% - Chinese Victoria Wave - SEZ Retrieval and recycling of solder dross to produce solder bars SOLDERCOAT NARITA PHILS. INC. 99.99% - Japanese Laguna Technopark - SEZ and wires

ELECTRICITY, WATER, AND GAS

FIRST GEN ENERGY SOLUTIONS INC. Authority to supply electricity 100% Filipino First Philippine Industrial Park - SEZ

FIRST GEN ENERGY SOLUTIONS INC. Authority to supply electricity 100% - Filipino Gateway Business Park - SEZ

ABOITIZ POWER DISTRIBUTED ENERGY, INC. Develop, operate and manage solar energy generation system 100% - Filipino Lima Technology Center - SEZ

ELECTRONICS Manufacturing and processing of Universal Bus Transceiver IC's AUTOMATED TECHNOLOGY (PHIL.) INC. 100% - Caymanian Light Industry & Science Park I - SEZ "TSSOP" devices DYSON ELECTRONICS PTE. LTD. - Manufacture of V9 Dyson Digital Motor and V9 Supersonic 100% - Singaporean Carmelray Industrial Park II - SEZ PHILIPPINE BRANCH hairdryer

9 8 . 1 2 % - F i l i p i n o IONICS EMS, INC. Server (Repair and Upgrading) Light Industry & Science Park I - SEZ 1.88% - Mixed

Manufacture of power transformer including accessories for KTECHNOLOGY, INC. 99.99% - Korean Cavite Economic Zone electronic appliances Manufacture/assembly of printed circuit boards, electronics MOBILECYCLE TECHNOLOGIES INC. 100% - Filipino Laguna Technopark - SEZ and semiconductor parts PENIEL VISION INC. Manufacturing of current transformers 9 9 . 8 % - A m e r i c a n Cavite Economic Zone

Manufacturing and assembly of telecommunication devices and Calamba Premiere International R12 EMS PHILS., INC. 99.99% - Korean equipment known as 2-way Radio Park - SEZ

SANAC PHILIPPINES, INC.. Manufacture/assembly of wire harness 9 9 . 9 9 % - J a p a n e s e First Cavite Industrial Estate - SEZ SUMI PHILIPPINES WIRING SYSTEMS Manufacture of Automotive Wires (AVSS, CIVUS, CHUSR) 100% - Japanese Hermosa Ecozone Industrial Park CORPORATION

VCM (Voice Coil Motor) also known as Auto Focus Holder, Voice TDK PHILIPPINES CORPORATION 9 9 . 9 9 % - J a p a n e s e Laguna Technopark - SEZ Coil Actuator & Optic Image Stabilizer and its related parts

TOSHIBA INFORMATION EQUIPMENT Engineering and design services 9 9 . 9 9 % - J a p a n e s e Laguna Technopark - SEZ (PHILIPPINES), INC. FOOD AND BEVERAGE MANUFACTURES

Engage in the Processing of Various Food Products, such as Oil, Brooke’s Point Agro-Industrial CARDINAL AGRI PRODUCTS, INC. 99.99% - Filipino Powder/Non-Wheat Flour, Juice and Non-Dairy Milk Economic Zone

Sarangani Economic Development DOLE PHILIPPINES, INC. To include the operation of a Cannery Drum Plant 99.99% - Singaporean Zone - SEZ SRC Allah Valley Economic DOLE PHILIPPINES, INC. Upper Valley Cannery Expansion 99.99% - Singaporean Development Zone Manufacture of Coconut Cream, Coconut Butter, Coconut Candelaria Agri Special Economic PRIMEX COCO PRODUCTS, INC. Concentrate, Coconut Oil with Butter Flavor and Coconut Oil 100% - Filipino Zone Peppermint Flavor IT AND IT-ENABLED SERVICES

SEIHA ENGLISH NETWORK PHILIPPINES INC. Online English Tutorial services 9 9 . 9 7 % - J a p a n e s e FLB Corporate Center

Research and development of automation - related solutions ADVANCED WORLD SOLUTIONS, INC. in automotive and HMI devices; solutions related to data 99.99% - Japanese ATC BPO 1 analytics and IoT (Internet of Things); and mobile applications

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MACHINERY AND EQUIPMENT Calamba Premiere International GLOWINGPOINT MATERIALS, INC.. Manufacture/assembly of factory hand push cart 9 9 . 9 9 9 % - K o r e a n Park - SEZ 9 8 % - K o r e a n Calamba Premiere International NAURI MANUFACTURING CORP. Manufacture of Deep Fryer Machine 2% - Filipino Park - SEZ TSUKASA ELECTRIC PHILIPPINES INC. Manufacture of Intercom (B-COM) 9 9 . 9 9 % - J a p a n e s e First Philippine Industrial Park - SEZ

METAL INDUSTRIES

Engage in fabrication of aerial platform parts, cutting machine ARIGIS PHILS INC. 9 9 . 9 9 % - J a p a n e s e Greenfield Automotive Park - SEZ parts, machine tool parts and other related products FIRST CALAMBA WAKO PHILIPPINES Fabrication, assembly, manufacture of cement board and 100% - Japanese Carmelray Industrial Park II - SEZ C O R P O R AT I O N stainless steel products KEDICA PHILIPPINES CORPORATION Engage in Chemical Cleaning and Passivation Services 99.99% - Japanese First Philippine Industrial Park - SEZ

Manufacture of dies, molds, jigs, components, parts and accessories; 2) design of dies, molds, jigs prototypes; and KYOEI DIETECH PHILIPPINES, INC. 99.99% - Japanese Greenfield Automotive Park - SEZ 3) repair, modificaton & maintenance of dies, molds, jigs, components, parts and accessories

PHILIPPINE ASSOCIATED SMELTING & 6 9 % - F i l i p i n o Leyte Industrial Development Estate Blended Copper Concentrates REFINING CORPORATION (PASAR) 3 1 % - D u t c h - SEZ Manufacture of steel doors and jambs and other similar metal UNIDOOR SYSTEMS, INC. 100% - Filipino Light Industry & Science Park IV - SEZ products MISCELLANEOUS MANUFACTURES

ANGELES ALLIANCE LEATHERWARE INC. Manufacture of handbags/ladies bags 9 9 . 8 % - B r i t i s h Angeles Industrial Park - SEZ

EPOLEM PHILIPPINES CORP. Manufacture of footwear 9 9 . 9 7 % - C h i n e s e First Cavite Industrial Estate - SEZ

WU KONG (S) PTE., LTD. (PHIL. BRANCH) Manufacture of Anti-Reflective (AR) coated/painted glass 100% - Singaporean Cavite Economic Zone II

KTM ASIA MOTORCYCLE MANUFACTURING, 6 6 % - F i l i p i n o Manufacturing and assembly of KTM motorcycles Laguna Technopark - SEZ INC. 34% - Austrian

OFFSHORING AND OUTSOURCING

24/7 CUSTOMER PHILIPPINES, INC. Customer life cycle management services 99.99% Caymanian McKinley West

24-7 INTOUCH PH Business Process Outsourcing (BPO) and call center operations 100% - Canadian UP Town Corporate Center

24-7 INTOUCH PH Business Process Outsourcing (BPO) and call center operations 100% - Canadian Araneta Cyber Park

ACCENTURE, INC. Software development 99.99% - Dutch Uptown Bonifacio

ACCENTURE, INC. Business process outsourcing (BPO) services 99.99% - Dutch Filinvest Cebu Cyberzone AFFINION INTERNATIONAL PHILIPPINES, Business process outsourcing (BPO) services 99.99% - American W Fifth Avenue CORP. BLACKPOINT IT SERVICES PHILIPPINES, INC. Business process outsourcing (BPO) services 9 9 . 9 9 % - C a n a d i a n Uptown Bonifacio

BLUEBERRY DIGITAL LABS PH INC. Software development services 99.92% - Indian FLB Corporate Center

5 0 % - A m e r i c a n COMMERCIALREACH INC. Call center and service provider support center Maria Cristina Building 5 0 % - B r i t i s h

CONVERGYS PHILIPPINES INC. Call center operations 97.2% - Dutch Eton Centris

COTOHA PHILIPPINES INC. Business Process Outsourcing (BPO) and call center operations 99.9% - Japanese Twenty-four Seven McKinley

ECLARO BUSINESS SOLUTIONS INC. Business process outsourcing (BPO) services 99.99% - American One Felicity Center

9 6 % - A u s t r a l i a n Neutrinus Information Technology EMAPTA VERSATILE SERVICES INC. Business process outsourcing (BPO) services 3 % - F i l i p i n o Center 1% - Japanese IT-enabled export servicesonboarding, learning & development, HR systems and people reporting, procurement ERNST & YOUNG GLOBAL SERVICES of goods and services, real estate and events, finance & 9 9 . 9 9 % - D u t c h McKinley Hill Cyberpark (PHILIPPINES) INC. accounting support services relating to transactions and reporting EYA GTH MANILA, INC. IT-enabled support services 100% - Filipino Cyberscape Beta

EYA GTH MANILA, INC. IT-enabled support services 100% - Filipino McKinley Hill Cyberpark

GLOBAL CONTRACTOR MANAGEMENT Business process outsourcing (BPO) services 100% - American Philamlife I.T. Tower SOLUTIONS PTY. LTD. - PHILIPPINE BRANCH

H.I.S. GLOBAL BUSINESS, INC. Provide non-voice services 9 9 . 9 9 % - J a p a n e s e 2251 IT Hub

HARTMAN BUSINESS SOLUTIONS, INC. Business process outsourcing (BPO) services 99.99% - Dutch Damosa I.T. Park

8 5 % - A m e r i c a n IMGDECK INC. Business process outsourcing (BPO) services CBP-IT Park 15% - Filipino

Philippine ANALYST BUSINESS July-August 2017 89 BUSINESS

7 1 % - A m e r i c a n INTERNATIONAL SYSTEMS RESEARCH CEBU Quality assurance support, software development and other 1 5 % - F i l i p i n o Cebu I.T. Tower CORPORATION innovative solutions 13% - Japanese

K8 APPLIED INNOVATION, INC. IT, Marketing, Administrative and Engineering Services 99.99% - American E-Square I.T. Park Outsourced marketing, customer service, outsourced billing KKH PHILIPPINES TECHNOLOGY AND and billing information services, outsourced contract- 99.99% - Filipino Cebu I.T. Park INFORMATION SERVICE INC. management services 9 2 % - H o n g K o n g KMC MAG SOLUTIONS, INC. Business process outsourcing (BPO) services 6 % - A m e r i c a n E-Square I.T. Park 2 % - F i l i p i n o

IT-enabled customer support services such as email and voice, LIZARDBEAR TASKING INC. 9 9 . 8 % - A m e r i c a n Anonas LRT City Center photo-enhancing and other support services

MXGLOBAL INC. Business process outsourcing (BPO) services 100% - Filipino One Corporate Centre

NEARSOL PHILIPPINES, INC. Business process outsourcing (BPO) and call center operations 99.99% - American Iloilo Business Park

NEC TELECOM SOFTWARE PHILIPPINES, INC. Development and integration of embedded software 100% - Filipino E-Square I.T. Park

NETSUITE (PHILIPPINES) INC. Shared service center and customer support contact center 9 9 . 9 9 % - A m e r i c a n E-Square I.T. Park ORCHID CYBERTECH SERVICES, Information Technology (IT) and call center operations 100% - Australian Robinsons-Equitable Tower INCORPORATED Bbusiness of processing and verifying versions of newspapers PRESSREADER PH INC. 99.99% - Canadian 2251 IT Hub and magazines Registration of its additional IT-enabled and Business Process PROBEGROUP PHILIPPINES, INC. 99.99% - Australian Philplans Corporate Center Outsourcing Services PROBEGROUP PHILIPPINES, INC. Business process outsourcing (BPO) and call center operations 99.99% - Australian 2251 IT Hub

PROVIEW GLOBAL ADMINISTRATION INC. Engage in IT-enabled services 99.99% - American Hanston Square

PROVIEW GLOBAL ADMINISTRATION INC. BPO Management and shared Services 99.99% - American Hanston Square 9 5 % - D u t c h QUALFON PHILIPPINES, INC. Provision of Customer Contact Center services Cebu I.T. Park 5% - Costa Rican QUALIFY ME CORPORATION Outsourced customer support services 99.99% - Australian One San Miguel Avenue Condominium

RMS COLLECT PHILS. INC. Business Process Outsourcing and Technology enabled services 99.99% - American Iloilo Business Park

9 0 % - B r i t i s h ROCCATECH PHP INC. Software Development and Website Application Tower 6789 10% - Filipino ROCOCO GLOBAL TECHNOLOGIES Call center services 99% Japanese Cebu I.T. Tower CORPORATION 3 4 % - B e l g i a n 2 9 % - A u s t r a l i a n SHORE SOLUTIONS, INC. Call center operations, IT Services and Back Office BPO 2 7 % - B r i t i s h EDSA Central I.T. Center 10% - Canadian and Filipino

STELLAR PHILIPPINES, INC. Call center operations 99.99% - Filipino Cebu I.T. Park Business Process Outsourcing - Knowledge Process Outsourcing TELEPHONE SUPPORT - TELSU 6 0 % - B a n g l a d e s h i (KPO), Inbound Outbound Customer Service, Back Office Abanao Square INCORPORATED 40% - Filipino Support TMX PHILIPPINES, INC.. Call center activities and BPO/shared service operations 9 9 . 9 9 % - D u t c h Mactan Economic Zone

VIRTUS LOGIC CONSULTING AND SERVICES 8 0 % - J a p a n e s e Business process outsourcing (BPO) services Zuellig Building INC. 20% - Filipino

WEST CONTACT SERVICES, INC. Call center operations 9 9 . 9 7 % - A m e r i c a n ExportBank Plaza Building

WIPRO BPO PHILIPPINES LTD. INC. Business Process Outsourcing (BPO) and call center operations 99.99% - Cypriot GAGFA IT Center

WIPRO BPO PHILIPPINES LTD. INC. Service desk and IT local support services 99.99% - Cypriot Eastwood City Cyberpark

WIPRO BPO PHILIPPINES LTD. INC. Service desk and IT local support services 99.99% - Cypriot Ecotower WNS GLOBAL SER V I C E S P H I L I P P I N E S , I N C . Call center operations 99.99% - Dutch Northgate Cyberzone

WNS GLOBAL SER V I C E S P H I L I P P I N E S , I N C . Call center operations 99.99% - Dutch Iloilo Business Park XEROX BUSINESS SERVICES PHILIPPINES, Business process outsourcing (BPO) services and call center 99.982% - Dutch CBP-IT Park INC. operations

YUENTHAI APPAREL DEVELOPMENT Business process outsourcing (BPO) and knowledge/transaction 99.99% - British Virgin Mactan Economic Zone PHILIPPINES INC. process services Islander

OTHER BUSINESS SERVICES Provide drawings and specifications using computer-enabled KOBELCO MACHINERY PHILIPPINES INC. 9 9 . 9 9 % - S i n g a p o r e a n 2251 IT Hub support services Engage in development and sale of 3D art content including PIXELMAFIA CORP. 9 9 . 7 % - H o n g K o n g One Corporate Centre art, design and code content

Philippine ANALYST BUSINESS July-August 2017 90 BUSINESS

7 0 % - F i l i p i n o UNIVESTA CREATIVES INT'L. CORPORATION Online advertising Northgate Cyberzone 30% - American

PAPER AND PAPER PRODUCTS

6 0 % - F i l i p i n o ECOPACK INDUSTRIAL PACKAGING CORP. Manufacture of industrial packaging products 3 5 % - B r i t i s h Suntrust Ecotown Tanza 5% - Chinese

Engage in the production of Paper Coffee Cups and allied Calamba Premiere International TMA GROUP PHILIPPINES INC. 99.99% - Australian products Park - SEZ PUBLISHING AND PRINTING

BLOSSOM PRINTING INDUSTRIAL Engage in the production of printing parts such as Labels, 99.99% - Chinese Laguna Technopark - SEZ PHILIPPINES INC. Model Name Plates, Logos and other similar products

REAL ESTATE ANFD PROPERTY DEVELOPMENT BIGLIFT PROPERTIES AND DEVELOPMENT Registration of its additional (two) 2 units warehouse buildings 100% - Filipino Hermosa Ecozone Industrial Park CORPORATION 99.5% - British Virgin CAYON HOLDINGS, INC. Registration of its additional three (3)-storey factory building Laguna Technopark - SEZ Islander Cavite Technopark-Special Economic FIRST INLAND KINGDOM REALTY CORP. Construction of a factory/warehouse building 100% - Filipino Zone FPIP PROPERTY DEVELOPERS AND Registration of its additional warehouse facility (RBF-V) 100% - Filipino First Philippine Industrial Park - SEZ MANAGEMENT CORPORATION Registration of its additional warehouse facility, particularly Cavite Technopark-Special Economic FTA HOLDINGS, INC. 100% - Filipino the 1-unit, 3 bays Zone IDEALUXE CORPORATION A proposed 10-storey office building to be known as Lumina II 100% - Filipino Pueblo de Oro I.T. Park Registration of its additional warehouse building (IPMC 11 INTERZONE PROPERTY MANAGEMENT CORP. 100% - Filipino Mactan Economic Zone Building) Cavite Technopark-Special Economic J.Y. AND SONS REALTY CO., INC. Construction of 2-unit warehouse facility 100% - Filipino Zone Operate and maintain a 10-storey office building to be known JANCOT FIEMA INCORPORATED 100% - Filipino Pueblo de Oro I.T. Park as Lumina I MACROBLOCKS REALTY CORPORATION Construction of a factory/warehouse building 100% - Filipino Lima Technology Center - SEZ NITSUGA REALTY AND DEVELOPMENT Operate, and maintain 3 units factory/warehouse buildings 100% - Filipino Light Industry & Science Park IV - SEZ CORPORATION NUBE STORAGE SYSTEMS INCORPORATED Construction of 3 factory/warehouse buildings 100% - Filipino Alviera Industrial Park PANORAMA PROPERTY VENTURES Registration of its additional 4-unit warehouse facilities 100% - Filipino Light Industry & Science Park III - SEZ INCORPORATED PANORAMA PROPERTY VENTURES Registration of its additional four (4) units warehouse facilities 100% - Filipino Light Industry & Science Park III - SEZ INCORPORATED

6 0 % - F i l i p i n o PHILIPPINE D S G REALTY CORPORATION Operate, and maintain 2 units factory/warehouse buildings Hermosa Ecozone Industrial Park 40% - Chinese

VISAYAS LAND REALTY SOLUTIONS INC. Construction of 1-storey factory/warehouse building 100% - Filipino Mactan Economic Zone

RECYCLING AND WASTE MANAGEMENT

Assembling, disassembling, packaging, sorting, destructing, transporting, crushing, classifying and segregating of scrap SEMICYTECH, INC. 9 9 . 8 8 % - K o r e a n Laguna Technopark - SEZ materials; temporary storage, transport and shipment of hazardous materials

RUBBER AND PLASTIC PRODUCTS

ATOMED CEBU, INC. Manufacture of Neocot Products and Molded Parts 100% - Japanese Mactan Economic Zone II - SEZ

BROMAKE PHILIPPINES CORPORATION Engage in Processed EPE (Expanded Polyethylene) Production 9 9 . 9 9 % - H o n g K o n g First Philippine Industrial Park - SEZ Calamba Premiere International CRONICS, INC. Manufacture of mold including repair 99.99% - Korean Park - SEZ FUJIMOLDPHILIPPINES INC. Fabrication, Processing and Modification of Mold Tool and Steel 100% - Japanese Light Industry & Science Park III - SEZ

LAGUNA DAI-ICHI, INC. Card Key project 99.86% - Singaporean Laguna Technopark - SEZ

Manufacturing of packaging materials for commercial and 6 7 % - F i l i p i n o MACEN WRAPPING AND PACKAGING CORP. Lima Technology Center - SEZ industrial use 33% - Japanese PHILIPPINE THERMOTECH MANUFACTURING Manufacture of plastic packaging products through vacuum 9 9 . 9 9 % - J a p a n e s e Light Industry & Science Park III - SEZ CORP. forming Manufacture of extruded plastic sheets in roll form, slitted; VITALO PACKAGING INTERNATIONAL, INC. 99.99% - Thai Laguna Technopark - SEZ and precision die cuts 8 5 % - C h i n e s e XUDONG PHILIPPINES INC. Design, repair and maintenance of plastic injection mold Cavite Economic Zone 15% - Japanese Manufacture of Thermoplastic Road Marking Material and YENG HSINGH - PHILIPPINE BRANCH 100% - Taiwanese First Philippine Industrial Park - SEZ Reflective Aggregate for Road Marking

Philippine ANALYST BUSINESS July-August 2017 91 BUSINESS

STORAGE AND WAREHOUSING

BROMAKE PHILIPPINES CORPORATION. Warehousing operation and logistics management 99.99% - Hong Kong First Philippine Industrial Park - SEZ Phividec Industrial Estate-Economic JACOBI CARBONS PHILIPPINES INC.. Warehousing/logistics support services 99.99% - Swedish Zone KOBELCO COMPRESSORS IMPORTER Warehousing/logistics support services 9 9 . 9 6 % - F i l i p i n o Laguna Technopark - SEZ PILIPINAS, INC. T E C H L O G C E N T E R P H I L I P P I N E S Warehousing/logistics support services 100% - American Carmelray Industrial Park II - SEZ

6 0 % - F i l i p i n o 2 2 % - A u s t r a l i a n TT GLOBAL GROUP SOLUTIONS CORP.. Warehousing services Carmelray Industrial Park II - SEZ 9 % - P a k i s t a n i 9% - Chinese

V-TECH TRADING LOGISTICS 6 0 % - F i l i p i n o A N D S E R V I C E S C O R P. Warehousing/logistics support services 2 0 % - T a i w a n e s e Cavite Economic Zone 20% - Malaysian

Philippine ANALYST BUSINESS July-August 2017 92 BUSINESS

BUSINESS CLIMATE INDEX FOREIGN DIRECT INVESTMENT Balance of Payments Concept*; JANUARY-MAY 2017 FDI: BOP CONCEPT LEVEL (US$ million) US$ Million YEAR-AGO YEAR-ON-YEAR 1200 CURRENT LEVEL (% CHANGE) 1000 TOTAL FDI 3,005.9 3,945.5 (23.8) 800 Equity Capital 212.9 1,453.6 (85.4) 600

Reinvested Earnings 344.7 320.5 7.5 400 200 Debt instruments 2,448.3 2,171.4 12.8 0 * 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 -200 FDI flows refer to non-residents’ equity capital (i.e., placements less withdrawals) + reinvestment of earnings + debt instruments, net (i.e.,net intercompany borrowings). -400 -600 YEAR- INDUSTRIAL PERFORMANCE DATA YEAR-TO- J'14 M M J S N J'15 M M ON-YEAR (2000=100) JUNE 2017 (INDEX) DATE GROWTH MOTOR VEHICLE SALES 2017 Volume of Production Index (VoPI) 146.5 8.1 -1.1 JUNE 2017 (2000=100) YEAR-AGO GROWTH RATE CURRENT a. Food 141.4 17.3 7.5 LEVEL (%)

b. Beverage 148.4 -1.3 -1.6 MOTOR VEHICLE SALES 37,631 32,993 14.1 c. Tobacco 8.4 -3.6 -16.0 PASSENGER CAR SALES 13,677 11,951 14.4 d. Textile 39.4 6.9 -19.0 COMMERCIAL VEHICLE SALES 23,954 21,042 13.8 e. Footwear and Wearing Apparel 118.9 340.4 124.8 f. Wood and Wood Products 78.1 19.5 10.9 UNIVERSAL AND COMMERCIAL BANK'S -JUNE 2017 g. Furniture & Fixtures 920.9 15.6 43.5 LOANS OUTSTANDING TO THE REAL ESTATE SECTOR (P Bn) h. Basic Metals 205.7 18.5 31.2 % to Total % to Total Jun-17 Jun-16 RE loan RE loan i. Iron and Steel 160.5 20.1 36.2 Residential 338.21 24.7 279.46 24.6 j. Non-ferrous Metals 302.9 13.2 22.6 k. Fabricated Metal Products 545.3 154.2 74.5 Commercial 1031.94 75.3 858.59 75.4 l. Machinery Excluding Electrical 62.9 -9.5 -4.3 m. Electrical Machinery 111.6 19.6 2.5 n. Transport Equipment 205.5 17.7 18.9 o. Other Mfg Industries 102.0 -8.6 -6.6 p. Paper & Paper Products 82.4 17.0 0.3 q. Publishing & Printing 174.1 9.6 1.5 r. Leather Products 1.2 48.1 19.3 s. Rubber Products 248.7 -8.0 2.6 t. Chemical Products 157.8 -44.9 -51.1 u. Petroleum Products 52.5 10.6 8.8 v. Non-Metallic Mineral Products 159.3 11.7 15.2 w. Glass & Glass Products 131.4 0.0 33.4 x. Cement 229.3 24.7 26.2 y. Misc. Non-Metalic Mineral Products 43.6 -11.2 -6.1 VALUE OF PRODUCTION INDEX (VAPI) 192.6 5.1 -1.9 (2000=100) AVERAGE CAPACITY UTILIZATION 83.8 -16.3 83.7

Philippine ANALYST BUSINESS July-August 2017 93 BUSINESS BUSINESS CLIMATE INDEX STRIKES IN JUNE 2017 LABOR STRIKES (JUNE 2017) No work stoppage was recorded in June. Meanwhile, there were a total of 104 notices MAN-DAYS LOST of strike/lockouts handled during the period. STRIKES DECLARED WORKERS INVOLVED (000) 2017 2016 2017 2016 2017 2016 JAN - - - - 120,348 - FEB 1 - 214 - 18,554 - MAR 1 - 138 - 16,668 - APR 2 - 306 - 16,152 - STRIKES DECLARED 3.5 MAY 1 2 263 433 18,040 82,884 JUN - 1 - 217 15,738 1,519 3 JUL - 2 - 146 - 14,146 2.5 AUG - 1 - 92 - 844 2 SEP - 2 - 45 - 675

1.5 OCT - 2 - 184 - 11,136 NOV - 3 - 134 - 3,578 1 DEC - 2 - 1,855 - 1,855 0.5 TOTAL 5 15 921 3,106 205,500 116,637 0 J'13 A J O J'14 A J O J'15 A J O -0.5 VISITOR ARRIVALS IN JUNE 2017 Total visitor arrivals registered in June is 474,854, up by 3.42% from 459,138 in the same month in 2016. Of this, 2.55% or 12,125 visitors were Filipinos residing abroad. Korea remained the top source of market followed by the U.S. and the China. Visitors coming from Korea amounted to 108,455 (22.84% share of the total visitors in June). MAN-DAYS LOST The U.S. market tallied 84,676 visitors (17.83%) while the Chinese market recorded 1400 66,066 visitors (13.91%).

1200

1000

800

600

400

200

0 J'13 A J O J'14 A J O J'15 A J O -200

-400

VISITOR ARRIVALS: JANUA RY-JUNE 2017 SURVEY ON MONTHLY OCCUPANCY RATE & LENGTH OF STAY COUNTRY 2017 2016 % CHANGE RANK Jan to Dec Jan to Dec Growth Rate KOREA 795,085 686,118 15.88 1 2015 2014 2015/2014 USA 513,443 454,170 13.05 2 De Luxe Hotels CHINA 454,962 340,958 33.44 3 Occupancy Rates 71.60 71.11 0.69 JAPAN 294,080 260,656 12.82 4 Length of Stay 2.71 2.74 -0.79 AUSTRALIA 130,992 126,209 3.79 5 First Class Hotels TAIWAN 127,017 112,125 13.28 6 Occupancy Rates 59.09 58.83 0.44 CANADA 108,243 91,412 18.41 7 Length of Stay 2.19 2.14 2.42 UNITED KINGDOM 93,649 86,873 7.80 8 Standard Hotels SINGAPORE 85,207 92,080 -7.46 9 Occupancy Rates 62.51 63.96 -2.27 MALAYSIA 72,211 72,297 -0.12 10 Length of Stay 2.42 2.52 -3.81 HONGKONG 55,653 61,518 -9.53 11 Economy Hotels INDIA 54,663 44,294 23.41 12 Occupancy Rates 60.14 59.73 0.69 OVERSEAS FILIPINO 76,197 107,087 -28.85 Length of Stay 1.57 1.65 -4.85 OTHERS 496,189 442,641 12.10 TOTAL 3,359,608 2,980,454 12.72 Overall Average 66.95 67.21 -0.39

Philippine ANALYST BUSINESS July-August 2017