Volume 27 No. 10 October 2016 BOI-registered investments grow two-fold The Board of Investments (BOI) approved 192 projects worth P210.37B BOI investment approvals in the first seven months of the year, January-July 2015 - January-July 2016 which is 98% better than the P106.08B recorded in the same period last year. P210.37B

P The projects, once fully operational, P will generate 37,487 jobs. P106.08B

P The nearly two-fold increase in performance P 98% is attributed mainly to the big-ticket energy and infrastructure projects approved 192 37,487 for the period. Energy projects, which July 2015 July 2016 projects jobs increased by 325%, accounted for 51% of total BOI approvals. “Dispersion of investments in the “Confidence in the new administration is BOI Big-Ticket Projects (January-July 2016) In Billion Pesos regions had also changed. NCR strong, while our economic fundamentals usually receives the highest amount and consumer confidence are high,” he said. Limay Premiere Power Corp. 23.30 of investments, but now, investments GMR Megawide Cebu Airport Corp. 16.75 are dispersed as other regions take the “We have a better business environment Bayog Wind Power Corp. 14.73 lead in attracting more investments,” under the new administration. President Cordillera Hydroelectric said Ceferino, who also serves as BOI Duterte’s 10-point economic agenda is Power Corp. 12.19 Managing Head. a big factor to attracting investments. Part of this agenda pursues the stability For the month of July, major approvals DTI Secretary and BOI Chairman Ramon M. of the policy environment, honoring included the P11.64-M El Elyon Power Lopez said the agency expects approved contracts and not changing the rules Plan Phils. Inc. project with a generating investment pledges to further grow on the midway, a big come-on for many capacity of 160MW in Sarangani Province, back of sound economic fundamentals and investors,” he added. and the P8.38-M Luzon Clean Water sustained investor confidence. Development Corp. project, a public- The current investment incentives private partnership (PPP) project for the “While confidence in the economy regime outlined in the Investment Bulacan Bulk Water Supply Project (Stages remains with investments continuing Priorities Plan (IPP), according 1 and 2) under the concession agreement to pour in, the government is pursuing to Lopez, will be modernized by with the Metropolitan Waterworks and a number of strategic investment proposing amendments to the 1987 Sewerage System (MWSS). policy and promotion initiatives in a Omnibus Investments Code. bid to further strengthen its efforts in Top destinations of BOI-approved attracting a massive flow of domestic “In granting incentives, we will projects for the first seven months of the and foreign investments in the country focus on creating decent jobs in the year were the National Capital Region particularly those that would bring in . As such, bias against (NCR) with P37.05B, Region 3 with new technology,” said Lopez. foreign investors and bias against P44.32B, and Region 4A with P28.69B. those serving the domestic market will The government will synchronize the be removed. Further, if the economic “Investments coming in are in investment promotion efforts of all provisions of the Constitution will be sectors that will elevate our its investment promotion agencies amended, greater foreign equity in competitiveness such as in power (IPAs) to support Philippine branding sectors that are crucial to improving and infrastructure,” Department and focus on promoting strategic the competitiveness of industries such of Trade and Industry-Industry investments to position the country as as infrastructure and utilities like Development Group (DTI-IDG) a world class investments destination, telecommunications, roads, ports, and Undersecretary Ceferino S. Rodolfo said. he said. airports, may be allowed,” Lopez said.

October 2016 1 BOI Top 5 Sources of Foreign Investments IB is a model that allows companies This program is in line with the Jan-July 2016 to engage poor and low-income “administration’s strategy to move (in billion pesos) communities as partners, customers, into the medium to long term Country Amount suppliers, and employees in their recovery and rehabilitation of areas Singapore 9.83 supply chains. highly affected by calamities.” Netherlands 7.12 South Korea 6.42 The IPP will also have a provision DTI hopes to come up with the first Japan 5.69 on least developed areas (LDAs) to draft of the amended IPP before the British Virgin Islands 2.02 boost economic activities in the rural end of the year. areas and decentralize growth from To support the development the major urban centers like Metro PHL economy grew 7% in Q2 of micro, small, and medium . The Philippine gross domestic enterprises (MSMEs), the DTI is product (GDP) grew by 7% during the studying the possibility of linking the Based on Memorandum Circular (MC) second quarter of the year, faster Philippine Economic Zone Authority No. 2016-003, “registered projects than the 5.9% posted a quarter ago (PEZA) and other ecozone locators located in identified LDAs shall be and the 6.8% in the first quarter of with the domestic MSMEs as suppliers entitled to pioneer incentives and last year, according to the Philippine of raw materials, intermediate additional deduction from taxable Statistics Authority (PSA). parts, and components. income equivalent to 100 percent of expenses incurred in the development This brings the country’s average of necessary and major infrastructure GDP growth in the first half to 6.9%, INDUSTRY facilities unless otherwise specified in National Statistician Lisa Grace S. TRENDS the IPP’s specific guidelines.” Bersales said.

An LDA, according to the MC, is The faster growth in the second IPP review underway determined based on several criteria quarter was attributed to election- The Board of Investments (BOI) has including low per capital gross domestic related spending coupled with started the review of the country’s product, low level of investments, sustained robust domestic demand Investment Priorities Plan (IPP) high rate of unemployment and/or that bolstered manufacturing. to trim the number of projects underemployment, and low level of entitled to government incentives, infrastructure development including Business groups expect this strong Department of Trade and Industry its accessibility to the urban centers. performance to be sustained until (DTI) Secretary Ramon M. Lopez said. year-end. Below are some of their Under the IPP, BOI has identified projections for the economy for the The review covers all industries, 134 LDA calamity-stricken cities rest of the year: activities, and projects identified in and municipalities located in 14 l “Strong growth to be sustained the current IPP. provinces. with increased government infrastructure spending, “We’re working first on the basic BOI-identified clamity-stricken LDAs private sector construction, framework. There is already an (Number of cities and municipalities per province) consumer spending and foreign ongoing review on how we can direct investment inflows, and Leyte 28 modernize the incentive system. the continued growth of the Iloilo 27 There are consultations being done business process outsourcing Capiz 17 now before we really craft the next Aklan 14 sector.” —Management batch of IPP,” Lopez said. Cebu 14 Association of the Philippines Antique 11 President Perry L. Pe The IPP is a list of activities entitled Negros Occidental 7 l “. . . potential to grow even to government incentives. Preferred Eastern Samar 4 faster than 7% when the activities under the existing list Palawan 4 economy runs on all cylinders, include manufacturing, agribusiness Western Samar 4 including good infrastructure, and fishery, services, economic and Biliran 1 agriculture, and responsible low-cost housing, hospitals, energy, Dinagat Islands 1 mining.” —American public infrastructure, logistics, and Masbate 1 Chamber of Commerce of the public-private partnership (PPP) Southern Leyte 1 Philippines Senior Adviser projects. John D. Forbes Any facility, project, and activity l “The fourth quarter may see a Among the activities that will be brought to these specific low-income GDP growth that may even be incentivized are Philippine firms and disaster-stricken areas would higher than 7%.” —Philippine which would incorporate the be given incentives, including tax Exporters Confederation, Inc. inclusive business (IB) model into deductions to boost economic (Philexport) President Sergio R. their operations. activities there. Ortiz-Luis Jr.

2 Philippine Business Report l “A healthy Philippine economy The government will also look for other as participants of the Comprehensive can be achieved, not only for players who are interested to invest in Automotive Resurgence Strategy a short term but for the long the telecommunications business. (CARS) program. haul.” — Business Club Executive Director Perter The DICT plans to put up free Wi-Fi Toyota and Mitsubishi will be putting Angelo V. Perfecto services in all public places in towns in a total of P7.5B to produce their and cities across the country. respective enrolled models, the full- The Duterte administration targets model Vios and the Mirage/Mirage the country’s GDP to grow by 6%-7% DTI directs investments to agri- G4, respectively. Of the amount to by the end of 2016. based sector, marginalized areas be invested, 20% or P1.6B, will come The Department of Trade and Industry from local parts suppliers. ICT ‘fast becoming’ PHL’s top (DTI) is encouraging businessmen to dollar earner direct their investments to agri-sectors The CARS program is the government’s The information and communications and geographical priorities such as initiative to attract investments, technology (ICT) industry is fast Mindanao and other marginalized increase demand, and efficiently becoming the country’s top dollar areas in support of the government’s implement rules and regulations in earner and its capacity to generate 10-point economic agenda. the country’s automotive industry. It jobs is projected to surpass the provides tax cuts and other incentives big dollar remittances of overseas DTI-Regional Operations Group to vehicle makers with domestic Filipino workers (OWFs), Department (ROG) Undersecretary Zenaida production. of Information and Communications Cuison-Maglaya cited government’s Technology (DICT) Secretary Rodolfo A. efforts in northern Mindanao in Some P27B worth of incentives will Salalima said. creating the logistical support be given to local vehicle assemblers and taking care of the economic over a six-year period which is also The rapid growth of the ICT industry environment in the region. expected to benefit the chemicals, is attributed to the emergence of metalworking, tool and die, plastics, hundreds of major players putting up Essential to development of the electronics, rubber, glass, and textile businesses in various capital cities region, Maglaya said, is the growth sectors. and towns across the country. of micro, small, and medium enterprises (MSMEs) which plays a The program has the full support The “driving forces” of the industry key role in the economy. and commitment from the Philippine are the information technology Parts Maker Association (PPMA), the and business process management Also crucial to the development of industry association of companies outsourcing (IT-BPM) firms, software the region, she said, is the country’s manufacturing vehicle parts. developers, Internet-service providers, integration to the Association of telecommunication companies, and Southeast Asian Nations (ASEAN) PHL now EU’s top supplier of tuna educational institutions. market with about 600M consumers. The Philippines is now the top supplier of tuna (prepared as sardines) and Contributions of MSMEs in The IT-BPM industry, which has prepared fish to the European Union PHL’s economy registered USD 19B in total revenue in (EU) as a result of more local fisheries the past year, is expected to generate 99.6% exporting duty-free under the EU- USD 25B this year, according to Pinnacle of all enterprises in Generalized Scheme of Preferences Real Estate Consulting Services, Inc. the country Plus (GSP+) scheme, Department of This claim was also supported by the Trade and Industry (DTI) Secretary data from IT and Business Process Ramon M. Lopez reported. Association of the Philippines (IBPAP). 30%-43% of the country’s GDP The benefits of the country’s inclusion Industry growth, however, is hindered in the EU-GSP+ are now being enjoyed by slow Internet speed given by 60% by tuna canneries in General Santos telecommunications providers to their of the country’s City and in Zamboanga City, Lopez said. subscribers. Statistics indicate that workforce the Philippines is among countries Among the tuna exporters in in the world that has a very poor the country are Alliance Select Internet service. Influx of investments from local Foods International, Celebes car parts makers seen Canning Corporation, General Salalima said DICT plans to Local automotive parts manufacturers Tuna Corporation, Ocean Canning, enter into a memorandum of are expected to invest an initial P1.6B Philbest Canning Corporation, understanding (MOU) with various to service the growth in demand from Seatrade Canning Corporation, telecommunication companies to find Mitsubishi Motors Philippines Corp. and the Zamboanga-based Permex ways to address this problem. and Toyota Motor Philippines Corp. Producers Exporters Corporation.

October 2016 3 The Philippines, the only country in the with the European Free Trade Area and plastic products, tobacco Association of Southeast Asian Nations (EFTA), composed of the countries products, wood and wood products, (ASEAN) to enjoy this scheme after EU Iceland, Liechtenstein, Norway, beverages, and printing. formally accorded its beneficiary country and Switzerland. EFTA, with more status in December 2014, can now liberal rules of origin regime on tuna, In terms of production value export more than 6,274 products to any will come into force once domestic measured by the Value of Production of EU member countries at zero tariff. ratifications are in place. Index (VaPI), manufacturing output indicated a turnaround in June this A year after ratification, EU became According to Lopez, exports to EFTA year by growing 4.7% from a -7.9% the third largest exporting partner could also address concerns on the contraction in June 2015. of the Philippines (from fourth in geographical distance of the market 2014), with exports growing by 19%. while investments in food processing, Socioeconomic Planning Secretary According to Eurostat, this was shipping, and the maritime sectors and NEDA Director General mostly due to an uptake in EU-GSP+ are also areas to explore, he added. Ernesto M. Pernia earlier said the related exports, growing by 27% manufacturing sector’s performance during the first half of 2015. Additional information on EU-GSP+ during the period reflects sustained is available at http://www.dti.gov. domestic demand. EU-GSP+ is a preferential tariff scheme ph/2016-03-29-02-27-23/eu-gsp. granted by the EU to developing Nordic-Baltic region upbeat on countries that meet the very stringent As tariffs go down, we need to PHL trade application requirements which work more closely with Philippine The Nordic Chamber of Commerce include ratification of 27 international “businesses to help them navigate of the Philippines (NordCham), conventions on human and labor the rules of origin requirements formerly the Nordic Business Council rights, environmental protection, and and to hurdle other barriers. Philippines (NBCP), expressed good governance. ” optimism that Philippine trade DTI Secretary with the Nordic and Baltic region Under the scheme, products with Ramon M. Lopez would double under the new duty-free access include coconut and administration’s 10-point economic marine products, processed fruits, Factory output seen at 8% in July agenda. prepared food, animal and vegetable Philippine industrial output likely fats and oils, textiles, garments, grew 8% in July following the strong “We are bullish on the growth headwear, footwear, furniture, performance of the 8.5% growth in prospects of the Philippine economy. umbrellas, and chemicals. June, Moody’s Analytics reported. We see several areas for continued and strengthened Nordic-Philippine Secretary Lopez urged Filipino “Strong domestic demand and cooperation,” NordCham President exporters to avail of this duty-free rapid economic growth will keep Bo Lundqvist said. privilege since it is only good for production increasing rapidly for the seven years. rest of 2016,” the report said. “We are excited to see this development take place, together Lopez also urged the private sector to Factory output growth is keeping with changes towards ease of doing explore ways to assist micro, small, in pace with the increase in gross business. These are some of the and medium enterprises (MSMEs) to domestic product (GDP) which key building blocks of the economic utilize this preferential tariffs. accelerated to 6.9% in the first agenda of the new administration,” semester from 5.5% in the same Lundqvist said. To help exporters understand how to period last year. avail of the EU-GSP+, the DTI has NordCham Executive Director Joona already conducted more than 80 The country expects a better GDP Selin said total trade between the information sessions on “Doing performance in the following months Philippines and the Nordic and Baltic Business with the European Union as the effects of El Nino start to region reached EUR 515M or over P27M (EU) using the Generalized System of diminish and allow food production in 2014, which remained around Preferences Plus (GSP+)” in key cities to pick up. EUR 500M or P26B in 2015. and towns in the country. The National Economic and “A lot of that has to do with how It has requested the EU’s Trade Development Authority (NEDA) we talk about the Philippines as an Related Technical Assistance (TRTA) reported that factory output, investment destination. There are Project to support Philippine measured by the Volume of Production two aspects to that, either looking readiness by providing technical Index (VoPI), rose 8.5% in June, reversing at the country as a market or looking assistance and capacity-building for a 1.7% decline in June last year. at the country as a service and Philippine exporters to Europe. delivery center,” Selin said. Production output was higher in Early this year, the Philippines has basic metals, transport equipment, NordCham promotes and facilitates signed a free trade agreement machinery except electrical, rubber trade, commerce, industry, and 4 Philippine Business Report investment between the Philippines The Philippine IT-BPM Roadmap 2016 MMPC President and CEO Yoshiaki and the Nordic (Denmark, Finland, aims to generate USD 25B in revenues Kato said the company is on target Iceland, Norway, Sweden) and and 1.3M direct employees by the end for the Mirage timetable whose Baltic (Estonia, Latvia, Lithuania) of the year from USD 21.5B revenues production is expected to start next countries. and 1.5M employees last year. year.

Areas of interest among Nordic and The country is also crafting a new Under the CARS Program, each Baltic companies in the country are industry blueprint called IT-BPM participant is required to produce in infrastructure, renewable energy, Roadmap 2022 which will be a 200,000 units over a six-year period to and information and communications comprehensive six-year plan to chart be able to fully enjoy the tax incentive technology. the growth course of the industry. package equivalent to USD 1,000 subsidy per locally produced unit. Singapore firms keen on PHL IT- This roadmap also seeks to identify BPM industry how the country can continue to push Ayala puts in USD 100M to launch Twelve Singaporean companies more investments and job creation self-driving cars expressed interested in forging outside of . Ayala Corp. is bent on investing USD partnerships with Philippine 100M for the manufacture of self- counterparts for information driving cars by 2019 as it banks on its technology (IT)-enabled services TRADE AND expertise in the electronics industry. during a business matching hosted by INVESTMENTS the Philippine Trade and Investment AC Industrials President and CEO Center (PTIC) and the Philippine Arthur T. Tan said the conglomerate Embassy in Singapore. is actively in talks with four car MANUFACTURING companies for a possible joint The 12 Singapore companies were venture in car manufacturing and interested in the Philippines’ outsourcing expects to close a deal in two to space and the information technology MMPC to expand auto parts three years. and business process management production (IT-BPM) sector. Mitsubishi Motors Philippines Corp. “The Philippines can be a hub (MMPC) is keen on pouring more not only for ASEAN [Association “The goal is to consistently engage investments in automotive parts of Southeast Asian Nations] but the Singapore business community by manufacturing under the government’s also for the world. We can build a updating them of our latest offerings Comprehensive Automotive Resurgence product, design and manufacture in high-growth industry sectors such Strategy (CARS) Program. it here in the country,” said Tan as IT-BPM and helping them network who has headed Ayala’s Integrated with the right contacts from the MMPC is forging technical agreements Microelectronics Inc. (IMI) since Philippines,” Commercial Counselor with its network of suppliers to bring 2002. Glenn G. Peñaranda said. the local content of its entry model in the program to as much as 70%. “What we’re looking for is jumping The Philippine IT-BPM sector has to the next generation of vehicles — grown at an annual rate of 30% over The company has already committed a PC with four wheels,” Tan said. a decade, faster than the growth of to invest P4.3B initially for the the global offshore services market. assembly of its entry model Mirage. Tan is confident on Ayala Corp.’s direction, noting that automotive The industry has diversified significantly MMPC Vice-President Dante C. Santos companies would need to build from contact center to back office, said there will be additional investments totally new capacities and employ IT, healthcare, engineering, finance from auto parts manufacturers aside electronics experts to get into the and accounting, animation, and game from the assembly operations. As an next generation of vehicles. development. assembler, MMPC has to comply with As a strategy, Ayala Group Head the mandatory production of big auto for Corporate Strategy and Notably, over 40 of the 2014 Fortune 1000 parts specified under the program. Development Paolo F. Borromeo and other large global organizations, said automotive manufacturing is including those from India, have a global “We have a network of 74 suppliers, a business that translates to more in-house center in the Philippines. these are Filipino firms with foreign jobs, which Ayala Corp. believes can partners,” Santos said. help achieve inclusive growth. The country remains to be a competitive provider and destination At present, MMPC’s highest local In all, the Ayala Group’s automotive for IT-BPM services because of its content achievement is 70% for businesses will be under AC English-speaking and skilled talent pool, Adventure and L300 models, which Industrial. competitive cost, government support they were able to achieve over and record of accomplishments. decades of local operations.

October 2016 5 AGRIBUSINESS AND power projects in Negros Occidental DPC President Nestor D. Dadivas to generate 70 megawatts (MW) of said the investment in Aborlan will FISHERIES renewable energy. address the continuing increase in electricity demand in the province Tadeco eyes more exports with IFC said the power plants are being due to the rise of local tourism and P2-B expansion built by Bronzeoak Philippines commercial establishments. Davao-based Tagum Development and ThomasLloyd Group Ltd. in Corp. (TADECO), owner of the world’s the municipalities of La Carlota, DPC was established in 2006 to largest contiguous banana plantation, Manapla, and San Carlos in the said provide electricity to areas that are will further invest P2B in technology province, which are expected to not connected to the main grid. to increase its production amid market convert waste from sugarcane into optimism and improved weather electricity. Aside from Palawan, the company condition. also provides power to the provinces “Before it was identified as of Masbate, Oriental Mindoro, and TADECO, the flagship company of the feedstock for biomass power plants, Sultan Kudarat through supply Anflo Management and Investment sugarcane waste was burned in the contracts with electric cooperatives. Corporation (ANFLOCOR) Group of fields, a practice that contributed to PUBLIC Companies, is exploring investment air pollution,” the IFC said. opportunities outside Panabo City, INFRASTRUCTURE where its 7,500-ha. of banana According to the IFC, the three AND LOGISTICS plantation is located. power plants are seen qualifying for the Energy Regulatory Commission’s LRMC starts installing new rails on “To date, our banana expansion biomass feed-in-tariff scheme. LRT Line 1 program is nearing a commitment The Light Rail Manila Corp. (LRMC) worth P1.5B while the first phase Bronzeoak Philippines CEO Jose has started installing new rails on of our new pineapple project will Maria T. Zabaleta said the projects the Light Rail Transit Line 1 (LRT-1) cost P1.2B, an investment in a very will utilize agricultural waste to tracks to increase maximum train depressed and impoverished area in generate reliable base load power, speed to 60 kph from the current 40 Mindanao,” ANFLOCOR President providing additional income to kph. and CEO Alexander N. Valoria said. farmers, reducing fertilizer costs, and helping contribute to a healthful The rail replacement project, starting Panabo City is currently the “Banana ecology. from in Pasay City to Capital of the Philippines” due to 5th Avenue Station in City, is the number of banana plantations For his part, ThomasLloyd Group the final phase of the rehabilitation of throughout the city. Executive Director Tony Coveney the 32-year-old train line. said the use of local sugar cane waste TADECO Vice President for Operations makes it an exciting development for LRMC, the consortium of Ayala Corp., Alexis P. Cantil said the company is all the stakeholders, especially for Metro Pacific Light Rail Corp., and hoping to produce and ship 30.9M the local community. Macquarie Infrastructure Holdings boxes of Cavendish banana this year, or (Philippines) Pte. Ltd., said the rail equivalent to 417,015 metric tons (MT). Converting agricultural replacement project covers 21 km. on the northbound route and 5 km. waste to biomass power is a TADECO is engaged in the production “ on the southbound route. and export of fresh Cavendish bananas sustainable way of creating to New Zealand, Japan, Hong Kong, economic value while caring for MNTC to invest P1.1B in toll Korea, China, Korea, United Arab the environment, roads Emirates, Russia, Malaysia, and IFC Country Manager Manila North Tollways Corp. (MNTC) ” Yuan Xu Singapore under the Del Monte and has set aside P1.14B for the expansion DOLE brand names. of major toll plazas at North Luzon DMCI spends P600M for Palawan Expressway (NLEx) and Subic-Clark- The Philippines is currently the power plant Tarlac Expressway (SCTEx). second largest exporter of banana, DMCI Power Corp. (DPC), the next to Ecuador. Bulk of the country’s off-grid energy arm of DMCI The toll road operator said it will supply comes from Mindanao. Holdings, is investing P600M for spend P232M to expand the Bocaue the establishment of two units of a toll barrier by constructing eight bunker-fired power plant, each with more lanes, from the current 25 toll ENERGY a capacity of 4.95 megawatts, in lanes to 33 toll lanes. Aborlan, Palawan. IFC invests USD 161M in 3 Also, the Balintawak toll barrier will be projects The new plant is expected to start expanded from the existing 16 lanes to The International Finance Corp. (IFC) operations by year-end. 23 lanes at a budget of P176M. is pouring USD 161M in three biomass 6 Philippine Business Report MNTC said three new lanes in a fishbone along with BPI President and Chief of usually pushing products and scheme would be constructed at NLEx Executive Officer (CEO) Cezar P. chasing yields. They seek to assess Mindanao Avenue amounting to P32M. Consing, RBI Chair Flordeliza L. their client’s risk appetite and offer Sarmiento, CARD Inc. Chairman a service based on it. The Mindanao toll plaza, which opened Jaime Aristotle B. Alip, and in 2010, has been a useful alternative incoming RBI President and CEO Union Bank has assets accounting to entry to and exit from NLEx from Elma B. Valenzuela. P439B as of end-June 2016. It was Quezon City. able to post a 30-% increase in net Through the partnership, BPI income from P3B last year to P3.9B The Mabiga Interchange, on the other becomes the exclusive local equity to the same period this year. hand, will have two new toll plazas with partner in CARD Mutually Reinforcing two toll lanes each, amounting to P75M. Institutions (MRI) Banking Group. Lombard Odier, on the other hand, Two lanes will also be added to the This helps the Ayala-led bank deepen is considered to be one of the most Subic-Tipo toll barrier at a cost of P70M. its reach in the microfinance space, capitalized banks globally, having targeting unserved and underserved almost 13.5% capital equity. The San Fernando Interchange is also Filipinos. up for a P287-M improvement as part of the second phase of the NLEx road RBI is a member of the CARD MRI, a IT-BPM widening. group of organizations specializing in microfinance, microinsurance, Moreover, the Meycauayan Interchange information technology, business Xerox PHL to hire 800 more will undergo a P154-M upgrade, development, pharmacy, and workers which includes the relocation of the community development. As part of its expansion program, southbound toll plaza and signalization Xerox PHL seeks to hire 800 more of the east rotunda. Data shows that RBI has assets workers by the end of 2016 for its amounting to P1.32B as of end- eight facilities in Metro Manila and ICTSI, NALP open Laguna storage June 2016. It was able to disburse Cebu City. facility P956.47M worth of loans and has International Container Terminal P772.89M worth of total deposits. “We’re very satisfied with the Services, Inc. (ICTSI) and NYK Auto performance of our existing Logistics Philippines (NALP) installed According to Sarmiento, RBI’s operations in Metro Manila and Cebu a 5,000-sqm. storage facility in stakeholders include the poorest of and because of that, we wanted to , Laguna last month. the Filipinos by providing them access further grow the business that we to microfinance loans and savings. have in the Philippines,” Xerox PHL The discharged completely Country Director Jojo B. Gajitos assembled units (CBUs) from its “Having BPI as our partner will open said. subsidiary Bauan International Port, opportunities for us to expand and Inc. (BIPI) will be directed to the further improve our services for Xerox, which has been operating company’s initial covered warehouse, the socio-economically challenged in the country since 2005, employs where 2,800 CBUs can be stored. families. This is consistent with 8,000 Filipinos, handling the our goal of reaching more families company’s customer care and finance Cabuyao City Mayor Rommel A. by providing a client-focused and and accounting operations. Gecolea said the new facility will financially inclusive products and create new job opportunities for the services,” Sarmiento said. According to Gajitos, the company’s local community and nearby cities. strict hiring procedures emphasize Union Bank partners with Lombard its goal to recruit and retain a highly ICTSI currently owns 30 terminals Odier skilled and motivated workforce. in 21 countries, of which nine are To serve their upscale clients, Union located in the Philippines. Bank signed a cooperation agreement “We treat employees as business with Swiss bank Lombard Odier last partners and we are committed to August. investing in them. Quality training BANKING and development programs are in This partnership is in line with Union place to help them improve their Bank’s goal to offer a more customized skills and advance their careers,” he BPI buys stake in Rizal Bank Inc. wealth management, one that is more added. The Bank of the Philippine Islands focused on risk, Union Bank Senior (BPI) bought a 10-% stake from rural Vice President and General Counsel The company operates its Xerox bank Rizal Bank Inc. (RBI). Joselito V. Banaag. Services University that provides an online database of training modules The signing was led by BPI Chairman The bank said that they want to and reference materials, exclusively Jaime Augusto Zobel de Ayala, deviate from the common wealth for its employees. management practice in the country

October 2016 7 In 2016, Xerox was named as clients, especially in telecom, global outsourcing firm ePerformax Business Process Leader by the financial services, healthcare, and commenced the construction of its Everest Group. It was also listed in automotive. facility within the zone. the World’s Most Admired Companies by Fortune Magazine in 2015. NTT Data Philippines President and The 7.4-ha. Pueblo de Panay TechnoPark CEO Pocholo S. Reyes said that they is part of Pueblo de Panay Township, “We believe that the positive growth are pursuing to increase revenue by a 500-ha. mixed-use integrated of our business in the Philippines is a about 20% annually in the next five community in Western Visayas and is result of the collective efforts of our years. considered one of the biggest township people,” Gajitos said. developments in the country. The Philippines is the most BackOffice opens delivery center promising market as far as Pueblo de Panay, Inc. (PDPI), the in PHL “growth is concerned, developer of both the TechnoPark United States (U.S.)-based data NTT Data Asia-Pacific Chairman and the township, partnered with management company BackOffice ”Ryoji Fukaya ePerformax through a contract signing Associates LLC partnered with local and groundbreaking ceremony. information technology consultancy company Third Pillar Business “We are partnering with our Applications Inc. to open a global REAL ESTATE locators, the local government units, delivery center in Ortigas Center, national government agencies, the Metro Manila. Megaworld readies P5B for three academe, the business sector, and new hotels other stakeholders in our community “The Philippines is the new and largest To boost its income, Megaworld allots to provide local employment,” PDPI market outside Singapore and Australia, P5B to build three new hotels to be President and Chief Executive where BackOffice’s headquarters are located in Boracay, Cebu, and Manila. Officer (CEO) Jose Nery D. Ong said. located,” BackOffice Associates Chief The three additional hotels are under Executive for Asia Pacific, Japan, and the firm’s newest hotel brand, Savoy As the first locator at the TechnoPark, the Middle East Kriss Datta said. Hotel. ePerformax will initially build a five-story building scheduled for Third Pillar President and Chief The hotels will include a 530- completion in October next year. This Executive Officer Jennifer S. room hotel in Megaworld’s Boracay facility will house its client operations Ligones said BackOffice’s decision Newcoast by end-2016, envisioned and a training center for Global to open an office in the country will to be a first class resort hotel. It will Communications and Management contribute to Third Pillar’s efforts be located in the eastern part of the Academy (GCMA). to provide a solid foundation for island, overlooking the Sibuyan Sea. business services among enterprises “We are not simply building a call in the country. The second will be built in the center where representatives answer 25-ha. Newport Plaza in Pasay City phones and provide basic customer care. Datta added that their office in composed of 684 rooms. The future of BPO in the Philippines the Philippines will also help local is going to require highly trained companies save millions of dollars The third on the list will be the professionals who can consult with from data quality management. 18-story, 547-room hotel in the customers on complex subjects such Mactan Newtown in Lapu-lapu City, as travel arrangements or financial NTT expands in PHL Cebu to be opened in 2018. planning,” ePerformax President and NTT Group projects faster growth CEO Teresa D. Hartsaw said. for its information technology (IT) “[The] rapid expansion of our very consulting and learning arm in the own hotel brands is an indication of “What we want to build here in Roxas Philippines, after acquiring Filipino Megaworld’s diversification as a real City is the next generation of BPO firm Wizardsgroup, Inc. earlier this estate company, and at the same [business process outsourcing] that year. time, our commitment to support provides solid professional careers for the country’s tourism industry,” people instead of the more transaction- Wizardsgroup, recently renamed to Megaworld Senior Vice President based customer service jobs,” she added. NTT Data Philippines, Inc., expects Jericho P. Go said. its revenue to double in the next five Roxas City has been declared by the years. First PEZA-accredited IT park in IT and Business Process Association Northern Panay inaugurated of the Philippines (IBPAP) as one of Wizardsgroup has advanced The first Philippine Economic Zone the emerging locations for IT and capabilities on Microsoft technology Authority (PEZA)-registered information business process management (IT- and Oracle that can offer advanced technology (IT) park in Northern Panay BPM) investments in the Philippines analytics services to business Island was formally inaugurated as for 2015-2016.

8 Philippine Business Report The increasing demand for data TELECOM services in the country is expected COMPANY to open up opportunities for the NOTES company to grow. This is because PLDT launches new InnoLab in telco players are investing more in Makati the improvement of their network URC to buy Snack Brands for After establishing six Innovation coverage in order to address their USD 458M Labs (InnoLab) in the country, the subscribers’ needs. Gokongwei-led Universal Robina Philippine Long Distance Telephone Corp. (URC) plans to acquire snack Company (PLDT) recently launched Huawei is currently providing food manufacturer Consolidated its seventh InnoLab in Makati City. assistance to Smart Snacks Pty Ltd. (CSPL) for USD 458M Communications, Inc. and to Globe to expand its reach in Oceania and The first six facilities were Telecom, Inc. in improving their secure a foothold in the highly established in the cities of Manila, networks. competitive Australian food and Clark, Subic, Cebu, Davao, and retailing market. Baguio. It will be located along Additionally, the expected rise in use Makati’s central business district, of 4G or LTE (Long Term Evolution) URC, through its wholly owned inside PLDT’s data center equipped is also expected to open up more offshore subsidiary URC International with intensive security system and opportunities for the company. Co. Ltd., will buy 100% of CSPL disaster-resilient infrastructure. Despite the present number of 4G through a cash-free, debt-free deal. smartphone users in the country, This means the target company to be A PLDT InnoLab is a facility where Gao said the percentage is seen to acquired will retire all its debts and innovative products and business grow in the next years, as this type take all cash out upon completion. solutions are being tested and of smartphones gets more affordable developed. This is also where and accessible. CSPL trades under the company name field experts conduct trainings Snackbrands Australia (SBA), the and provides information and Globe to activate more cell sites second largest player in salty snacks communication technology (ICT) To improve its mobile services, Globe with a total market share of close to services and technical assistance to Telecom Inc. seeks to activate more 30% in Australia. its clients. than 500 cell sites by the end of the year through accelerating the rollout With its wide portfolio of chips It addresses needs of different of Long Term Evolution (LTE) service including iconic brands like Kettles, clients including software and using the 700-MHz frequency. Thins, CC’s, and Cheezels, the gaming industries, academe, telecom company is the preferred private industry, and service providers in “We are confident that more and label supplier and partner of major government agencies. more of our customers will experience Australian retailers. improved services as adoption of “In these times of mind-boggling LTE-capable devices increases and URC Chief Executive Office Lance Y. advances in technology, Innolab as we continue to deploy LTE 700 in Gokongwei said the addition of SBA is the perfect avenue to identify more sites. This is consistent with our into the URC organization would trends and business models, and strategy of continuously improving further enhance the innovation facilitate mutually beneficial internet services using the previously capability of the company. exchanges within the dynamic digital idle 700-MHz spectrum that the community,” PLDT Vice President NTC [National Telecommunications For his part, SBA Chief Executive for ICT Research and Development Commission] now allowed us to co- Officer Paul Musgrave said he Joey S. Limjap said. use,” Globe Senior Vice President for was looking forward to sharing Program Governance and Network learnings, innovation, and technology Huawei projects positive growth in Technical Group Joel R. Agustin said opportunities with the broader URC PHL in a statement. business. Huawei Technologies Philippines, Inc. sees a positive growth outlook Majority of these sites will be located “What this achieves for the business for its business in the Philippines, in Metro Manila, covering major is to take Australian manufactured as telecom companies invest in the business districts, as well as highly product, with its distinct food improvement of their network to urbanized and populated areas, security advantage, into Asian address the increasing demand for where the number of LTE 700 users is markets with the benefit of an data services. also increasing. established distribution force,” Musgrave said. “I think we have a lot of Globe activated its first 700-MHz opportunities in this market,” cell site in Quezon City which is now SM to open seven malls in 2017 Huawei Technologies Philippines covered by the technology. SM Prime Holdings Incorporated plans CEO Jacky Gao said. to open seven new shopping malls

October 2016 9 next year as part of its continuous “When we talk about inclusive expansion in provincial areas. business, we mean that big INTERNATIONAL businesses will consider MSMEs as AND REGIONAL The projects will add 293,930 sqm. part of the bigger picture. MSMEs WATCH to the company’s leasable space, in the value chain would prove cost- bringing its total mall leasable area efficient, especially since big businesses Doing business in Asia getting to 7.95M sqm. By end-2017, SM Prime would now look into a pool of direct easier will have 67 malls nationwide. supply sources that offer unique, Doing business in the Asia-Pacific, innovative and competitive products,” including the Philippines, has now Currently, SM Prime has a total of Lopez noted. become easier compared to 10 years 59 malls in the Philippines and six in ago, according to the Asia-Pacific China. The company is scheduled to Graham assured the country that Economic Cooperation (APEC) Policy open one more mall before the end it will do its best to help Filipino Support Unit’s assessment. of 2016—SM City East Ortigas in Pasig businessmen find opportunities to City—to end the year with 60 malls. work with British businesses, as well The analysis focused on the five as provide assistance in updating the priority areas identified by the World New Shopping Malls to be opened country’s transportation needs and Bank in its Ease of Doing Business in 2017 consumer franchising measures. index. Mall Land Area (in sqm) The intention of the agenda is “APEC data showed there was SM Premier Cagayan 81,133 clear-cut: to pursue a quality significant progress achieved in de Oro “of growth that will result in terms of reducing the time it would SM Puerto Princesa 65,073 shared prosperity among our take to start a business, revealing a “remarkable 47.4% improvement,” SM Urdaneta 46,570 people, SM Center Ormoc 28,408 DTI Secretary APEC Policy Support Unit Senior SM Tuguegarao 25,890 ” Ramon M. Lopez Analyst Carlos Kuriyama said. Cherry SM Antipolo 22,777 SM Lemery 24,079 PHL, Laos to boost ties on trade, Also, the average time to start a education business went down by almost two To strengthen economic partnership weeks from 28 days to 15 days. between the Philippines and Alos, COUNTRY TO President Rodrigo Roa Duterte and In particular, the Philippines has COUNTRY Laos Prime Minister Thongloun significant gains in streamlining Sisoulith signed an agreement during processes to help ease doing business a bilateral meeting on the sidelines in the country. PHL, UK strengthen bilateral of the Association of Southeast Asian relations Nations (ASEAN) conference on Priority Areas in World Bank’s Ease Department of Trade and Industry 6 September 2016 in Vientiane, Laos. of Doing Business index (DTI) Secretary Ramon M. Lopez and British Trade Envoy to the Both parties agreed to work closely Philippines Richard Graham met to enrich the relations including in in August to discuss expansion of the areas of education and trade and bilateral trade and investment investments. starting a dealing with getting relations between the Philippines and business construction credit the United Kingdom (UK). “The President expressed his interest permits to send a trade and investment Lopez asked the UK government delegation to Laos to look into for increased engagement in key business opportunities,” according to areas of cooperation, specifically in a Malacañang statement. capacitating and mainstreaming micro, trading across enforcing small, and medium enterprises (MSMEs) In 2008, the country and Laos signed borders contracts into the value chain, in promoting a memorandum of understanding a more enabled environment for (MOU) establishing the Philippines- The Department of Trade and Industry countryside development, and in Laos Joint Commission for Bilateral (DTI), the Department of Interior creating social enterprises. Cooperation. It seeks to ease and Local Government (DILG), and consultations and cooperation in the Department of Information and He mentioned the 10-point economic various fields like economics, health, Communications Technology (DICT) agenda of President Rodrigo Roa education, agriculture, forestry, and have already issued a joint circular Duterte and how it is aligned with environment. memorandum that will strongly the DTI’s priorities. encourage all local government units (LGUs) to streamline and standardize their respective processes. 10 Philippine Business Report “Hopefully we will have standardized From November 2010 to July 2016, Southeast Asian Nations (ASEAN), processes for business permit and DTI conducted 964 information including the Philippines. license application. The average sessions attended by more than number of days to do all these would 100,000 participants from the The second annual EU-ASEAN Business be eight days, down from more than private sector, academe, and other Sentiment Survey, which polled more 30 days. Our objective is to bring government agencies. than 200 executives from European it further down to three days by companies around South East Asia, streamlining the number of forms and These sessions focused on topics such revealed that majority or nearly three- signatories,” DTI Secretary Ramon M. as FTAs, AEC, Philippine-European quarters (74%) of European businesses Lopez said. Free Trade Association (EFTA), project a rise in ASEAN profits for 2016 European Union Generalized System and almost three-quarters (74%) expect “After streamlining, the next move of Preferences Plus (EU-GSP+), ASEAN’s importance to global revenues would be to automate the processes to and the United States Generalized to increase over the next five years. bring down further the number of days System of Preferences (US-GSP). from three to one day,” he added. European businesses are increasing The DTI also holds consultations their investments in the region. These initiatives are part of through the One Country, One Voice Nearly two thirds plan to expand President Rodrigo R. Duterte’s (OCOV) Program that was launched operations and employment in the mandate on creating a more helpful in 2011. OCOV is a consultation ASEAN region, and 85% are planning business environment for investors. initiative with stakeholders, to increase their regional trade and particularly national government investments. DTI steps up awareness campaign agencies, local government units, on AEC and FTAs business support organizations, “It is clear that European business are The Department of Trade and Industry civil society organizations, and optimistic and are investing for future (DTI) ramped up its efforts in informing the private sector, intended to growth in ASEAN. At a challenging local entrepreneurs and other formulate trade policies. time for the global economy, stakeholders of the benefits under the Southeast Asia is an economic bright ASEAN Economic Community (AEC), OCOV seeks to obtain counsels and spot and European companies are various free trade agreements (FTAs), assessments on the Philippines’ trade keen to invest in the region’s rapidly and preferential schemes. objectives, priorities, and necessary developing consumer market and undertakings to arrive at rational, increasingly integrated production “We are increasing the frequency of sound and balanced trade policies in base,” EU-ABC Chairman Donald our information and education drive pursuit of national development. To Kanak said. and casting a wider net by continuing date, consultations were conducted in to conduct various fora and discussions key cities in the country particularly On the same note, DTI-Industry in the regions. The knowledge our on the country’s trade engagements Development Group (IDG) stakeholders, particularly micro, small, with Japan, EU, and EFTA. Undersecretary and Board of and medium enterprises (MSMEs), will Investments (BOI) Managing Head gain from our initiatives will help us Through the Industry Roadmaps Ceferino S. Rodolfo cited the “Three fully utilize our trade engagements and Localization Program and the AEC Pillars Strategy” of the Philippines enhance our foothold in the regional Gameplan, a multi-sector conference for Europe, through the EU GSP+, and global market,” said DTI Secretary conducted across the regions, the PH-EU FTA, and PH-EFTA, as huge Ramon M. Lopez. Board of Investments (BOI) also opportunities that EU companies continues to capacitate industry investing in the country may take The DTI provides entrepreneurs players on how they can take advantage of. with knowledge on how to navigate advantage of the many opportunities and profit from the country’s FTAs in the AEC market by crafting through its Doing Business in Free their localized version of national Trade Areas (DBFTA) seminars which industry roadmaps to achieve further discusses market opportunities, tariff competitiveness. reductions, rules of origin (ROO), and customs procedures. More information on the conduct of DBFTA can be accessed at http:// “It is imperative for our stakeholders www.dti.gov.ph/dbfta. to be aware, involved and globally competitive. Our aim is not just EU businesses planning to expand to reduce trepidation among our in ASEAN industry sectors, but also to enable European businesses are planning them to participate more actively in to expand their investment and international trade,” Lopez said. operations in the Association of Philippine Postal Permit No. 504

October 2016 11 GNI Growth rate (%) GDP Growth rate (%) 8 8 ECONOMIC 7 7 6 6 INDICATORS 5 5 4 4 32 3 1 2 1 0 0 1Q(2015) 2Q(2015) 3Q(2015) 4Q(2015) 1Q(2016) 2Q(2016) 1Q(2015) 2Q(2015) 3Q(2015) 4Q(2015) 1Q(2016) 2Q(2016)

Consumer Price Index (%) Exports Imports (2000 base year) (In USD Billion) (In USD Billion) 5000 8000 145 4800 144.5 6000 144 4600 4000 143.5 4400 143 2000 142.5 4200 142 4000 0 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16

Peso per US Dollar Rate Inflation Rate (%) Interest Rate (%) As of 13 October 2016 (2006 base year) (Overnight lending facility as of September 2016) 49 2.5 8 As of 29 July 2016 48.5 48 2 6 47.5 1.5 4 47 2 46.5 1 46 0.5 0 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16

Sources: Bangko Sentral ng Pilipinas (BSP) and Philippine Statistics Authority (PSA)

Entered as Third-Class Mail at the Makati Central Post Office under Permit No. 504 valid until 31 December 2016

Editorial Team: Dir. Patricia May M. Abejo/Editor-in-Chief • Alfonso M. Valenzuela/Managing Editor • Cresenciano P. Par/Assistant Editor • Kristina S. Andaya, Renaldo C. Neneria, Zarrel M. Noza, Airiz A. Casta/Writers • Zarrel M. Noza/Design Layout • Ric A. Kagahastian/Circulation Officer• Published monthly by the Knowledge Management and Information Service, Department of Trade and Industry, 5F Trade and Industry Building, 361 Sen. Gil J. Puyat Avenue, Makati City 1200, Philippines • Phone (+632) 751.3565 • Fax (+632) 895.6487 • To subscribe, e-Mail: [email protected] • www.dti.gov.ph

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