PHILIPPINE HEADLINE NEWS ONLINE: Since 1997 © Copyright (PHNO) http://newsflash.org
BUSINESS HEADLINES THIS PAST WEEK...
(Mini Reads followed by Full Reports below)
MEKENI FOODS: PAMPANGA FOOD COMPANY WINS FOREIGN CONSUMERS[ALSO Commentary: The economic cost of celebration By Emmanuel J. Lopez]
OCTOBER 17 -Mekeni Food Corp. president Prudencio Garcia A Pampanga-based food company that started as a backyard venture in the 1970s is now making inroads into foreign markets. Established by two public school teachers and their five sons, Mekeni Food Corp. has expanded its portfolio of products from the traditional tocino and longaniza into internationally-accepted processed meat products such as sausage and bacon. Now a world-class meat processor, Mekeni exports regularly to Saudi Arabia, Qatar, Kuwait, Bahrain and the United Arab Emirates. It also exports to Australia and will soon reach the supermarkets of Japan, Canada, New Zealand and European countries. READ MORE...ALSO, Commentary: The economic cost of celebration By Emmanuel J. Lopez...
ALSO: Lawin' damage to agri now at P10.2B rising
[RELATED UPDATE OCT 24: Typhoon damage hits P20.2B]
OCTOBER 23 -A resident carries a sack of rice after Super Typhoon Haima (local name: Lawin) destroyed his home and caused flooding at Vigan township, Ilocos Sur province in northern Philippines, on Thursday, Oct. 20, 2016. Haima slammed into the northeastern coast late Wednesday with ferocious winds and rain that rekindled fears and memories from the catastrophe wrought by Typhoon Haiyan in 2013. AP Photo/Bullit Marquez The cost of damage to agriculture in areas affected by Typhoon Lawin has risen to P10.2 billion with the rice sub-sector sustaining the most damage, the Department of Agriculture (DA) reported. Total damage amounted to P10.2 billion covering 467,068 hectares of agricultural areas with estimated production loss of 244,224 metric tons (MT). Affected commodities are rice, corn, cassava vegetables, fisheries and livestock with Regions 1 (Ilocos), 2 (Cagayan Valley), 3 (Central Luzon), 4A (Calabarzon), 4B (Mimaropa) and 5 (Bicol) suffering severe losses and affecting about 70,000 farmers. Damage incurred on rice soared to P7.8 billion with 219,323 MT of production lost. Damaged were 404,752 hectares, 249,157 hectares of which have chances of recovery. Majority of rice losses were reported in Cagayan Valley with a total of P4.3 billion. READ MORE...RELATED, OCTOBER 24 -Typhoon damage hits P20.2B...
ALSO: Philippines seeks Brunei’s help to develop halal industry
[RELSATED: PH agrees to bilateral talks on maritime row, gets $9B in credit]
[RELATED(2): China offers $3B in infra deals]
OCTOBER 18 -Trade Secretary Ramon Lopez said the country needs the expertise of Brunei in creating halal products that have to undergo certified halal procedures. BANDAR SERI BEGAWAN – The Philippines is seeking the help of Brunei Darussalam in developing the halal industry, particularly in the certification aspect. Halal refers to meat prepared as prescribed by Muslim law. Trade Secretary Ramon Lopez said the country needs the expertise of Brunei in creating halal products that have to undergo certified halal procedures. “We really have good discussions with respect to exploring the immense opportunities in developing halal products,” Lopez said Monday. The trade and industry secretary was part of the delegation accompanying President Duterte on a three-day state visit in Brunei. READ MORE...RELATED, PH agrees to bilateral talks on maritime row, gets $9B in credit...RELATED(2) China offers $3B in infra deals...
ALSO: Back in Davao, Duterte defuses separation ‘bomb' "Ties w US remain"
[RELATED: Separation' means 'rebalance' -clarification from President's Cabinet men]
[RELATED)2): Chinese eye Philippine tourism investments]
0CT0BER 23 -President Rodrigo Duterte has clarified that the Philippines would not cut diplomatic ties with the United States, but merely pursuing a more inde-pendent foreign policy by pushing stronger relations with regional behemoth China. Returning home Friday after a four-day state visit to China, President Duterte told reporters that what he meant was that he was moving for a “separation of a foreign policy” but not a parting of ways with traditional ally, the US, which hosts a vast number of Filipino migrants. “You know, you have to take my words in the context of what I have been saying all along. It’s not severance of ties. When you say severance of ties, you cut the diplomatic relations. I cannot do that. Why? It’s to the best interest of my country that we maintain that relationship,” Mr. Duterte said in Davao City. He said it was impossible to cut diplomatic ties with the US, where many Filipinos live. READ MORE... RELATED, Separation' means 'rebalance' -clarification from President's Cabinet men... RELATED(2) Chinese eye Philippine tourism investments... RELATED(3) Palace - American BPO firms won’t leave PH...
ALSO: Duterte brings home $24 Billion from China
[RELATED: August budget surplus doubles to P32.6B]
[RELATED(3): Palace - American BPO firms won’t leave PH]
OCTOBER 22 -‘President Rodrigo Duterte meets top Chinese government officials China at the Great Hall of the People in Beijing on October 20. Photo by King Rodriguez/PPD PH-China to benefit mutually from closer ties’ The Philippines’ move to mend and strengthen ties with China—which yielded $24 billion worth of loans and investment pledges after President Rodrigo Duterte’s trip this week—will create more opportunities for both countries, Fitch-owned BMI Research said. tableDuterte wrapped up a four-day state visit to China on Friday, during which he announced his administration’s intention to separate from the US and forge closer ties with Beijing. But his economic managers said the Philippines will keep its good relations with Western countries, and will forge stronger alliances with Asean, as well as with Japan and South Korea. READ MORE...RELATED, Aug. budget surplus doubles to P32.6B... RELATED(2) Palace - American BPO firms won’t leave PH...
ALSO: Moody’s raises PH 2016 GDP forecast
[RELATED: Philippine shares rise nearly 3% higher as DU30 visits China]
[RELATED(2): Stocks snap two-day upturn]
OCTOBER 19 -Moody’s raised its 2016 growth forecast for the Philippines as it expects spending from both the government and consumers to remain robust. The Southeast Asian economy will probably rise 6.5 percent this year, the debt rater said in its latest credit note released Tuesday. In July, Moody’s had said the domestic economy may expand 6.2 percent in 2016. “Government spending should stay accommodative on the back of efforts to improve budget execution, while the outlook for private investment is robust. Private consumption could slow somewhat, as firming oil prices pass through to marginally higher inflation. But robust real income growth will continue to support consumer spending,” Moody’s said in its report. In fact, the resilient domestic demand has shielded the country against external shocks including the slowing Chinese economy, it said. This puts the Philippines in a sweet spot versus its peers. READ MORE...RELATED, Philippine shares rise nearly 3% higher as DU30 visits China...RELATED(2) Stocks snap two-day upturn...
READ FULL MEDIA REPORTS HERE:
Pampanga food company wins foreign consumers
Mekeni Food Corp. president Prudencio Garcia
MANILA, 0CT0BER 24, 2016 (MANILA STANDARD) posted October 15, 2016 at 11:25 pm by Othel V. Campos - A Pampanga-based food company that started as a backyard venture in the 1970s is now making inroads into foreign markets.
Established by two public school teachers and their five sons, Mekeni Food Corp. has expanded its portfolio of products from the traditional tocino and longaniza into internationally-accepted processed meat products such as sausage and bacon.
Now a world-class meat processor, Mekeni exports regularly to Saudi Arabia, Qatar, Kuwait, Bahrain and the United Arab Emirates. It also exports to Australia and will soon reach the supermarkets of Japan, Canada, New Zealand and European countries.
“This time we will showcase our products to the European market. We believe that we already have that certain level of global competitiveness that has sustained us all these years of struggling to be the best we can be,” says Mekeni president Prudencio Garcia who flew to France recently to receive another global award on behalf of the company.
Garcia received the “world commitment to quality award” diamond category at Hyatt Regency Hotel in Paris.
Mekeni is currently busy preparing the product packaging for two kinds of sausages that will be exported to Japan. “We are the first processed food company accredited by the Japanese government to export to Japan. And because of that, we have been receiving calls from many Japanese businessmen as they inquire about our company and our products. We consider this another feather on our cap considering the very stringent food quality standards Japan requires from exporters like us,” Garcia says.
He says in the next two years “we see our company exporting far more than 3 percent [of total sales]. We want to be able to penetrate further the global market by increasing our export target to 40 percent of total sales while keeping the rest of 60 percent on the local front,” says Garcia.
“We hope to engage companies to do business with us. Toll packaging is a business model that we are also open to do with multinationals. We can do it in their country with the support they will give us or we can also do toll manufacturing here in the Philippines. We follow what multinationals do here,” he says.
Mekeni, a Pampango word that means “come here” has an ISO 2200 certified food facility in the Philippines that won for three consecutive years as the best meat processing plant “AAA” category and the 2014 MVP Bossing Award.
It is the first food company in the Philippines to get food safety system certification and the first in Asia and the Philippines for food safety management system from the International Safety Organization.
Globally, it won the International Arch of Europe Frankfurt Germany Platinum Award in 2013 and Century International Quality Era Award gold category in Geneva, Switzerland in 2012.
Mekeni is also preparing to penetrate the Asean market in the next few years.
Garcia says state-run Development Bank of the Philippines supported the company’s expansion overseas.
“As we gear for expansion and in need of financial assistance, the only financial institution willing to give us the loan was the Development Bank of the Philippines. In one of their conditions, they said we should go into exports to help the country gather more foreign exchange. This is on top of environmental concerns and of coaxing us to be the leader in our field. The DBP window came at a time when no financial institution was willing to give any Pampanga company loans of more than P10 million because of the lahar tragedy. Now, I think the bank has extended to us about P300 million worth of assistance. We are still paying for that, mind you. But we are definitely glad that somebody has that enough confidence in us that we will make it through despite our grim situation,” says Garcia.
The initial loan of P50 million in 2001 was used to put up state-of-the-art manufacturing plant.
Today, Mekeni is building a hive of companies to support its core business which is processed food production. It set up a company of merchandisers to promote its products in supermarkets, groceries and other vending outlets.
A third company it plans to create is a power generation company with a 2-megawatt facility to supply the power requirement of the business. The power plant will run on pelletized garbage that will be supplied by households within the immediate radius of the company site.
Garcia is the second in a brood of five male siblings. He received his basic education in Porac, Pampanga and made his way to Manila to take Accounting in one of the well-established universities.
A consistent honor student from grade school to college, Garcia graduated cum laude and worked as an accounting manager in a cement company in Damam, Saudi Arabia.
However, he says the challenges he encountered in running a business could not be found in any of the books he read in school.
When he return from the Middle East, Garcia made a mental note to pursue his career as accountant, this time in the US where most of his co-workers in Saudi Arabia moved on, if his family would support his proposal to close the family business because of the foot-and-mouth disease that affected local livestock.
“We started little like a backyard business. It was in the 90s when the foot-and-mouth disease hit the Philippines. With 40 or so manpower and our business being pork-based, I told my brothers that it’s either we close the business or lay-off people. That’s something we agreed on but our father, Tatang Felix made us rethink this decision. He reminded us that the reason we came back from abroad was to provide employment to people, so shutting down the company was never an option for him. From there we talked to our workers and with them offering a solution to work part-time on a shifting basis, we started again,” he recalls.
Garcia says while it was tough during that time when FMD broke out, it was tougher to know that your people or at least half of your workers would not be able to provide for their families.
“That made me realize, by heart, the purpose why Tatang called on us to continue the business they started and nurtured us, fed us and provided for us until we studied in college. Imagine, at that time, my parents’ salary as school teachers were only P200 per month for each of them. When I was studying in Manila, I needed to pay for my dormitory that was P200 per month, just about the salary of my father. Our small business of poultry and egg production provided for our education. My parents also butchered pigs on weekends and loaned people pork that they would pay the next payday,” says Garcia.
Garcia recalls that as young student, he was helping his parents in their backyard business by waking up 4 in the morning to prepare and deliver eggs to the market before going to school.
“This is the same dedication and hard work we have for our company. Me and my brothers have cultivated the same level of dedication to our people in what we call ‘family-oriented’ business. Ours is a system that involves the family of our workers. We share the blessing, we do corporate social activities for those outside the organization. We are open to the family members of workers who want to be part of the business,” he says.
In 1986, the Garcia siblings incorporated Mekeni with P5 million capital. Today, the company is worth over P800 million with annual sales of not less than P1.2 billion. It employs about 1,300 people from Pampanga to Laguna.
What used to be a small backyard business started by their parents in the early 1970s is now a major competitor in the food processing sector with global presence in major markets.
Tatang Feliz remains the Garcia family’s strong-willed patriarch while Imang Idang, the matriarch passed away eight years ago, the same year Garcia’s first and only child was born.
The Garcia brothers still consult their father when there are major decisions to be made. Lito, the eldest, is the company vice president for finance and administration; Adrian, the third, controls supply chain management as vice president; Nardo, is the vice president for marketing and sales; and Doods is the vice president for manufacturing.
Keeping in shape, Garcia never fails to do his morning jog with his favorite canines. He previously owned and trained 14 dogs but now keeps only four.
Garcia says he is happy with what the world has offered his family and is prepared to confront the challenges ahead.
“My father used to tell us and I remember it quite well. Real happiness is when you share a big portion of your life. What you enjoy you enjoy because you share something in excess,” says Garcia.
ALSO FROM PHILSTAR
Commentary: The economic cost of celebration By Emmanuel J. Lopez (philstar.com) | Updated October 21, 2016 - 5:05pm 1 9 googleplus0 0
Christmas lanterns are on display during the Ligligan Parul or Giant Lantern Festival in San Fernando, Pampanga Saturday night. The festival is one of the city’s top tourist attractions.
Ernie Peñaredondo, file It is barely two months before the much awaited day of the year, a day of celebration where cheers and merriment seem to engulf whatever difficulties or glitches we had in our daily life.
Though possibly mired in financial obligations and tangled in unfathomable economic liabilities that confront their lives, Filipinos still have the courage and temerity to celebrate Christmas in their own special way.
In fact, they traditionally set aside or defer the settlement of financial liabilities in favor of a joyous and memorable celebration of the holiday season each year.
The Filipino culture has its own special and unique way of celebrating Christmas. Aside from the fact that they look forward to it because of financial windfalls that come with it -- the 13th month pay and yearend bonuses -- it is a time to meet old friends and relatives.
Sometimes more than the spiritual intention, the holiday season is viewed as an opportunity to acquire new properties, gadgets or any contraptions that one might not really need.
More often than not, we forego savings at this time of the year despite having more than enough income to do so. We always adhere to that common practice and notion that this season comes but once in a year, so we should make the most out of it.
This belief comes with a price. We sometimes spend more than what we can afford, practically engaging in deficit spending.
Although, if taken collectively, these actions are economically favorable to local growth because our economy is consumer-driven, it could prove fatal to individual finances and lead to personal bankruptcy in the short-run.
The “abundance” we will experience during the merry months of the year will turn into financial tragedy when the season is over if Filipinos do not mend their ways.
Scarcity becomes a customary occurrence and consumes our lives after the season is over. Realizing the opportunities we have foregone for the sake of short-lived comfort and luxurious living; the savings we should have realized, investments we should have made and charities we should have supported.
All these went to naught because of wrong priorities.
These are lost opportunities traded for momentary blissful experience. Most, if not all, of us fall into a trap of temporary relief from a life of continuous struggle.
It is a common phenomenon that many hard-pressed individuals wanted to momentarily escape life’s adversities. Christmas is a respite that many want to experience recurrently.
People would normally trade fleeting moments to spend the season and engage in deficit spending not knowing that it could lead to catastrophe in the long run.
On the aggregate, these collective actions create instant growth, an aftermath of massive consumers spending. This is a traditional annual occurrences as reflected in our Gross Domestic Product.
Expectedly, private consumption expenditure always saves the day for periodic GDP growth.
As such, the savings that should have been generated because of opportunities present in the holiday season have not been realized.
Because of the event, we lose the opportunity to invest, an experience that could have lessened the country’s struggle from the shackles of foreign and local debts.
These are normative factors that influence individual economic decisions. Consumers tend to impose or adapt to certain prescribed standards that may be institutional or individual.
But one thing is sure: Traditionally, during the holiday season, most of us tend to move in one direction and spend all the resources available available then let tomorrow take care of itself.
'Lawin' damage to agri now at P10.2B By Louise Maureen Simeon (philstar.com) | Updated October 23, 2016 - 1:38pm 0 21 googleplus0 0
A resident carries a sack of rice after Super Typhoon Haima (local name: Lawin) destroyed his home and caused flooding at Vigan township, Ilocos Sur province in northern Philippines, on Thursday, Oct. 20, 2016. Haima slammed into the northeastern coast late Wednesday with ferocious winds and rain that rekindled fears and memories from the catastrophe wrought by Typhoon Haiyan in 2013. AP Photo/Bullit Marquez
MANILA, Philippines — The cost of damage to agriculture in areas affected by Typhoon Lawin has risen to P10.2 billion with the rice sub-sector sustaining the most damage, the Department of Agriculture (DA) reported.
Total damage amounted to P10.2 billion covering 467,068 hectares of agricultural areas with estimated production loss of 244,224 metric tons (MT).
Affected commodities are rice, corn, cassava vegetables, fisheries and livestock with Regions 1 (Ilocos), 2 (Cagayan Valley), 3 (Central Luzon), 4A (Calabarzon), 4B (Mimaropa) and 5 (Bicol) suffering severe losses and affecting about 70,000 farmers.
Damage incurred on rice soared to P7.8 billion with 219,323 MT of production lost. Damaged were 404,752 hectares, 249,157 hectares of which have chances of recovery.
Majority of rice losses were reported in Cagayan Valley with a total of P4.3 billion.
Furthermore, the value of damage to vegetables is now placed at P1.7 billion with 18,928 MT of produce lost. Affected were 33,501 hectares of cultivation area, 5,483 hectares of which may still recover.
Losses incurred on corn crops reached P602 million with 5,739 MT of produce lost. Affected were 28,741 hectares, 5,223 hectares of which may still recover.
The fisheries sector was also affected after damages reported reached P85.8 million.
The livestock sub-sector also sustained damages valued at P6.6 million while cassava crops damage is pegged at P2.3 million.
The department is already preparing its resources to replace damage crops as early as possible and reminded affected farmers to acquire certifications from municipal agriculturists for them to receive replacement seeds.
The DA said complete damage assessment and validation caused by Typhoon Lawin remains ongoing.
RELATED FROM THE MANILA TIMES
Typhoon damage hits P20.2B BY JAMES KONSTANTIN GALVEZ, TMT AND PHILIPPINES NEWS AGENCY ON ON OCTOBER 24, 2016 TOP STORIES
MANILA TIMES HEADLINE PHOTO OF THE DAY
CATHOLIC REHAB: Cardinal Luis Antonio Tagle, the archbishop of Manila, blesses drug dependents who have turned themselves in for rehabilitation following Holy Mass at the Manila Cathedral on Sunday. Tagle launched ‘Sanlakbay para sa Pagbabagong Buhay,’ the archdiocese’s drug rehabilitation program featuring spiritual formation as well as livelihood and skills training. PHOTO BY BOB DUNGO JR.
THE damage caused by typhoons “Karen” and “Lawin” to the country’s infrastructure and farm sector has reached P20.2 billion, authorities reported on Sunday.
This developed as the National Disaster Risk Reduction and Management Council (NDRRMC) said the death toll from Super Typhoon “Lawin” (international name “Haima”) rose to 24, although 16 of the deaths reported were still subject to confirmation and validation by the Interior department.
In the regions badly hit by Lawin, at least 13,966 houses were damaged, 2,025 of which were destroyed, the NDRRMC said on Sunday.
A total of 119 barangay (villages) were reported flooded in the provinces of Pangasinan and Bataan. Because of flooding and landslides, 84 road sections and 19 bridges were impassable.
Power interruptions were experienced in at least 160 cities and municipalities in the Ilocos region, Southern Tagalog and the Cordillera Administrative Region (CAR).
Heavy toll on rice farms
Strong winds and heavy rains brought about by the two consecutive typhoons affected the agriculture and fisheries sectors in 29 provinces.
Damage to agriculture alone hit P10.21 billion, with 244,780 metric tons of production wasted.
The rice sector accounted for 98 percent of the total losses, affecting 60,494 farmers, the Department of Agriculture (DA) said. Other crops damaged were vegetables, corn and cassava, as well as fisheries and livestock.
Areas affected were agricultural lands in the CAR, Regions 1, 2, 3, 4-A, 5 and Mimaropa (Mindoro, Marinduque, Romblon and Palawan).
Regions 4-A, 4-B and 5 were affected only by typhoon Karen, with damage covering 30,926 hectares and production loss of P644.63 million.
In Region 2 or Cagayan Valley, the total area affected covered 26,565 hectares.
Chris Morales, chief of the DA’s Field Program and Operational Planning, said the damage to the agriculture sector, particularly on rice, was expected to be severe considering that most of the crops were in the maturing stages.
Minimal damage in corn sector
The corn sector suffered minimal damage with 5,739 metric tons (MT) of crops valued at P602.3 million lost. Total areas affected reached 28,741 hectares, of which 988 hectares were reported as having no chance of recovery.
Roger Navarro of the Philippine Maize Federation said the industry group expected minimal damage in the corn sector.
“Only about 20 percent of the projected harvest for the third quarter was affected because the farmers have already harvested before the typhoons hit. In fact, many of our farmers are now preparing for the next cropping,” he said.
For the third quarter, the projected harvest was about 1.5 million MT out of more than 300,000 hectares planted to corn.
High-value crops, including highland and lowland vegetables, recorded P1.71 billion in losses, while the fisheries sector recorded P85.78 million in losses. The livestock sector reported only P2.29 million in losses.
Damage to agricultural and fishery infrastructure and equipment was pegged at P30.48 million.
Agriculture Secretary Emmanuel Piñol said reports coming from the field remained partial and unofficial. “This does not yet fully reflect the destruction brought by super typhoon Lawin in these regions,” he said.
Buffer stock to be released
Piñol, who flew to Kalinga on a military chopper to assess damage wrought by Typhoon Lawin in Region 2 after he returned from a visit to China with President Duterte, met with Kalinga Governor Jocel Baac to discuss plans on how to help farmers and fishers cope with the damage.
Piñol ordered all Agriculture Department officials and personnel to provide food assistance to affected farmers and fisherfolk, validate the extent of damage, the identities and number of farmers and fishers affected, and distribute seeds from pre-positioned seed buffer stocks, fertilizers and fishing gear.
“I have also instructed the concerned DA agencies, particularly the Philippine Crop Insurance Corp. and the Agricultural Credit Policy Council, to swiftly process crop insurance payments to enable the farmers and fishers cope with their loss,” he said.
Piñol disclosed that there were 246,240 bags of rice seeds and 9,628 bags of corn seeds in the DA buffer stock.
Philippines seeks Brunei’s help to develop halal industry By Edith Regalado (The Philippine Star) | Updated October 19, 2016 - 12:00am 0 0 googleplus0 0
Trade Secretary Ramon Lopez said the country needs the expertise of Brunei in creating halal products that have to undergo certified halal procedures.
BANDAR SERI BEGAWAN – The Philippines is seeking the help of Brunei Darussalam in developing the halal industry, particularly in the certification aspect.
Halal refers to meat prepared as prescribed by Muslim law.
Trade Secretary Ramon Lopez said the country needs the expertise of Brunei in creating halal products that have to undergo certified halal procedures.
“We really have good discussions with respect to exploring the immense opportunities in developing halal products,” Lopez said Monday.
The trade and industry secretary was part of the delegation accompanying President Duterte on a three-day state visit in Brunei.
“As you know, the estimated halal market in the world is about $2 trillion, and we all know the expertise of the Brunei nation with respect to halal certification,” Duterte said before going to Brunei.
Brunei’s Sultan Haji Hassanal Bolkiah received Duterte in formal ceremonies here with a 21-gun salute yesterday afternoon. The two heads of state also held bilateral talks at the Istana Nurul Iman, the sultan’s official residence and seat of the Brunei government.
Pointing out the government’s desire to maximize export of halal products, Lopez said: “We have our own certification in our country. However, as we try to put more emphasis in creating halal-certified products, we need the certification procedure, the credibility of the certification procedure, so that we can really export halal products.”
He said a halal seal signifies quality and cleanliness.
Lopez said the development of the Philippines’ halal industry was discussed during the President’s bilateral meeting with Bolkiah yesterday.
Lopez said Brunei would help improve the Philippines’ certification procedures.
He added the Philippines also has to develop halal-certified areas to entice more tourists into the country, saying halal-certified tourism has big earning potential for the Philippines.
RELATED FROM THE INQUIRER
PH agrees to bilateral talks on maritime row, gets $9B in credit By: Daxim L. Lucas / @inquirerdotnet Philippine Daily Inquirer / 04:51 PM October 20, 2016
President Rodrigo Duterte and President Xi Jinping shake hands after a signing ceremony in Beijing, China, on Oct. 20. Duterte was meeting Thursday with Xi in Beijing as part of a charm offensive aimed at seeking trade and support from the Asian giant by setting aside a thorny territorial dispute. AP
BEIJING—Beijing scored a major diplomatic coup on Wednesday after Chinese President Xi Jinping and President Rodrigo Duterte agreed to enter into bilateral negotiations to resolve its maritime dispute—a 180-degree turn from the Philippines’ stance of engaging only in multilateral talks over overlapping territorial claims in the West Philippine Sea.
As part of the deal, officials of both nations signed 13 agreements and memoranda of understanding (MOU) that included a key deal to establish a “Joint Coastal Guard Committee on Maritime Cooperation” as a prelude to greater cooperation in the disputed waters.
“In this visit, bilateral relations have fully recovered and two countries will return to track of dialogue and consultation to address maritime issues,” China’s vice minister for foreign affairs Liu Zhenmin told the press after the signing ceremonies witnessed by Messrs. Xi and Duterte.
RELATED(2) FROM THE INQUIRER
China offers $3B in infra deals By: Doris Dumlao-Abadilla / @philbizwatcher Philippine Daily Inquirer / 01:14 AM October 19, 2016
AFP FILE PHOTO
BEIJING—China Railway Group Ltd., a state-owned infrastructure firm, is keen to invest as much as $3 billion in Philippine infrastructure projects in the next few years.
The prospective investment commitment from China Railway—also known as China Railway Engineering Corp. (CREC)—is among the plum investment deals lined up to be finalized here during the four-day state visit of President Duterte.
Industry sources said CREC was expected to enter into a partnership with a Philippine group to vie for large-scale infrastructure projects to be bid out by the Duterte administration under the public-private partnership framework. The partnership is also keen to propose original projects.
Among the key projects that the Duterte administration is pitching to investors is a massive Mindanao railway system.
The Mindanao railway project is envisioned to link the cities of Cagayan de Oro, Iligan, Zamboanga, Butuan, Surigao, Davao and General Santos—spanning a total of 2,000 kilometers.
This railway system is seen to play a major role in improving Mindanao’s intraisland accessibility, linkages and seamless multimodal transport networks.
CREC, listed on the Hong Kong and Shanghai Stock Exchanges, is in a good position to bid for the Mindanao railway project alongside other major infrastructure projects, according to industry sources.
$400M to $3B
They said CREC and its Philippine partner would ink a memorandum of understanding here in the next few days.
CREC will commit a minimum portfolio of $400 million for Philippine projects to as much as $3 billion.
Already one of the leading construction and infrastructure groups in China, CREC is seen aspiring to boost its presence across the region and sees a lot of opportunity in the Philippines following Mr. Duterte’s “pivot to China.”
The group is considered to be in a good position to bring its technical expertise and financial muscle to help ease infrastructure projects in the Philippines.
In its home country, CREC is involved in key projects, such as the Beijing-Shanghai high-speed railway, Shanghai-Nanjing intercity railway, Shenzhen Metro Line 5 and Shiziyang Tunnel on GuangZhou-Shenzhen-Hong Kong express rail link.
In 2015, CREC generated $100 billion in revenues or nearly a third of the Philippine gross domestic product.
“Only a company this size and scale can mobilize resources necessary to take on megainfrastructure projects,” said a source familiar with the state visit.
Economists and market analysts expect this state visit to boost the inflow of foreign direct investments from China.
Several government-to-government and private business-to-business investment MOUs (memorandums of understanding) are expected to be signed during Mr. Duterte’s state visit, Trade Secretary Ramon Lopez said in a text message on Tuesday.
President Duterte Visit China for 4 Days Philippines Viral Online Philippines Viral Online Subscribe525 Add to Share More 38 views 0 0 Published on Oct 18, 2016 President Duterte Visit China for 4 Days
Duterte defuses separation ‘bomb': Ties with US remain By: Leila B. Salaverria / @LeilasINQ
Philippine Daily Inquirer / 12:46 AM October 23, 2016
President Rodrigo Duterte has clarified that the Philippines would not cut diplomatic ties with the United States, but merely pursuing a more inde-pendent foreign policy by pushing stronger relations with regional behemoth China.
Returning home Friday after a four-day state visit to China, President Duterte told reporters that what he meant was that he was moving for a “separation of a foreign policy” but not a parting of ways with traditional ally, the US, which hosts a vast number of Filipino migrants.
“You know, you have to take my words in the context of what I have been saying all along. It’s not severance of ties. When you say severance of ties, you cut the diplomatic relations. I cannot do that. Why? It’s to the best interest of my country that we maintain that relationship,” Mr. Duterte said in Davao City.
He said it was impossible to cut diplomatic ties with the US, where many Filipinos live.
“Why? Because the Filipinos in the United States will kill me,” Mr. Duterte said. Speaking in Beijing on Thursday, Mr. Duterte announced his “separation” from the US, both militarily and economically, to pave for a new commercial alliance with China.
Beijing has responded by agreeing to resolve a long festering South China Sea dispute bilaterally through the talks, and by pledging billions of dollars worth of trade deals.
Proclaiming that “America has lost,” Mr. Duterte sought to align himself with China and said Manila would henceforth be more dependent on Beijing.
The sudden shift in foreign policy caught many by surprise, with government spokespersons scrambling to interpret what he meant and its implications to regional security.
JAPAN ALSO PUZZLED
Japan, which Mr. Duterte is expected to visit next week, as well as Washington, were equally puzzled.
But President Duterte stressed on Friday that the country always took its cue from the US and it was high time the country took a different tack.
He said the government might terminate the Enhanced Defense Cooperation Agreement that allowed temporary basing rights and prepositioning of American military articles on local soil.
“But I would have to consult the military, the police and everybody because at the end of the day, it is all security,” Mr. Duterte said.
His spokesperson Ernesto Abella said the government would not turn its back on deals and treaties that have been agreed upon, but was only exploring new alliances.
“This is not an intent to renege on our treaties and agreements with our established allies but an assertion that we are an independent and sovereign nation, now finding common ground with friendly neighbors with shared aspirations in the spirit of mutual respect, support and cooperation,” Abella said.
But even before his trip to Beijing, Mr. Duterte has been issuing increasingly hostile statements against the US, with which the Philippines has a Mutual Defense Treaty.
He has hit out at the US government for airing concerns about the mounting death toll in his antidrug campaign, and has moved to stop joint patrols with the American naval forces in disputed waters. He has also said this month’s Philippine-US military exercises would be the last.
The Philippines was instead looking to expand bilateral and economic alliances with China and Russia, he said,
The White House responded to Mr. Duterte’s speech by saying there were “too many” conflicting statements coming from his office, but nonetheless welcomed the apparent about-face.
“Based on his extensive, colorful previous comments, there is greater clarity that we would like to get about the intent of President Duterte and his government,” White House spokesperson Josh Earnest told a press briefing in Washington.
“But based on what you’ve read me, that seems to be a change in tone that is more consistent with the seven decade-long alliance between the United States and the Philippines,” he said.
‘Rebalance’ to Asia
The US, Manila’s former colonial master, sees the Philippines as a key ally in its “rebalance” to Asia as it seeks to offset a rising China.
And is sees the President’s recent pronouncements as a “troubling rhetoric” that is “inexplicably at odds with the warm relationship that exists between” Filipinos and Americans, US embassy spokeperson Molly Koscina said.
‘Little brown brother’
Foreign Affairs Secretary Perfecto Yasay Jr. on Saturday insisted the country needed to shed off its “little brown brother” image, but stressed said cutting ties did not mean “a severance of relationship or terminating the special bond between our two nations.”
While he conceded that breaking away from the US “would not be in our best national interest,” he claimed it was “demanded in pursuing our independent foreign policy.”
“It implies breaking away from the debilitating mindset of dependency and subservience that have perpetuated our ‘little brown brother’ image to America, which has stunted our growth and advancement,” Yasay said.
Senator Richard Gordon for his part described Mr. Duterte as a “a very unorthodox President.”
“I don’t think he really meant it, I’m sure the President understands our national interest. He mentioned that. And I think he understands what he is doing,” Gordon told reporters. “Are the Americans listening? Yes. We got their attention. Is Japan listening? Is China listening? Yes.”
For her part Sen. Leila de Lima described as “insane” and “surreal” Mr. Duterte’s pronouncements.
“Cutting off military and economic ties is only a degree less worse than cutting diplomatic ties,” said De Lima, a known political nemesis of Mr. Duterte.
In his arrival speech, Mr. Duterte said the relationship with China was at a “new turning point” as the two countries were looking to resume long-stalled regular bilateral consultations to discuss key issues, including those concerning the South China Sea.
Mr. Duterte trumpeted the achievements of his trip, including $24 billion in financial commitments that are expected to create two million jobs for Filipinos.
“My state visit to China signaled a turning point in our shared history and showed that both countries are fully capable of working together for mutual beneficial cooperation even as we remain committed to settle disputes peacefully, in full adherence of international law,” Mr. Duterte said.
He said Chinese officials have agreed to fully resume regular bilateral consultations which were put on hold for several years as ties chilled following the South China Sea wrangling.
Mr. Duterte said both countries had also agreed to promote peace, freedom of navigation and overflights in the sea region, to prevent disputes from escalating.
“We also agreed to continue discussions on confidence-building measures, including a bilateral consultation mechanism to discuss immediate issues of concern in South China Sea,” he said.
Beijing had steadfastly refused to acknowledge an arbitration ruling in July that found in favor of the Philippines, which took China to court after a 2012 standoff at Panatag (Scarborough) Shoal. The court had invalidated China’s claim.
Mr. Duterte said he brought up the issue of Filipinos’ fishing rights in Panatag Shoal, but declined to elaborate.
The President also said that during his China trip, the coast guards of the two countries agreed to cooperate to minimize incidents at sea. —WITH REPORTS FROM JEANETTE I. ANDRADE, JODEE A. AGONCILLO, VILLAMOR VISAYA JR., GERMELINA LACORTE, NEW YORK TIMES NEWS SERVICE, REUTERS, AFP AND AP
RELATED FROM PHILSTAR
'Separation' means 'rebalance', Cabinet members say By Alexis Romero (philstar.com) | Updated October 21, 2016 - 7:47pm 2 223 googleplus1 0
BEIJING – "Separation" could mean so many other things, as far as President Rodrigo Duterte's Cabinet members are concerned.
Cabinet members scrambled Friday to clarify Duterte’s declaration that he is “separating” from the US, saying he was merely “rebalancing” economic and military ties with Asian neighbors and seeking opportunities in other countries.
Economic managers also claimed that the president’s statement would not have a drastic impact on the Philippines’ trading relations with the West, including the US.
“What we are really going to do is rebalance our economic relations from too much dependence on the West to the Asian region. Because the Asian region is the growth area of this century and China is a major player in this growth area,” Socioeconomic Planning Secretary Ernesto Pernia told reporters yesterday here.
“For a long time, we have not taken very seriously our economic relations with China. And this time we should really engage with China… So, in effect, we are really broadening our investment and trade base from too much dependence on the West to ... greater attention given to the Asian region,” he added.
“So it’s a rebalancing, it’s not a separation. It’s a rebalancing of economic relations toward a broader base of trade and investment relations.”
Pernia admitted that Duterte should have used the word “rebalancing” rather than separation.
“You know, there are many ways of conveying a message. Sometimes it may not be a super accurate term. But you know that is what he’s meant,” the government’s chief economist said.
“The president is not an English major.”
READ: FULL TEXT: Duterte's keynote address at the Philippines-China Trade and Investment Forum
Trade Secretary: No losses from 'separation' statement
Trade Secretary Ramon Lopez said Duterte’s pronouncement would not result in losses for the Philippines.
“Realistically, we won’t stop transacting. We have a lot of investments from the US. We export, we import,” Lopez said.
“It’s just lessening too much dependence on one side of the world,” the Trade chief added.
On Thursday, Duterte sent shock waves to the international community when he declared that he is “separating” from the US in the areas of security and economy.
"In this venue, I announce my separation from the United States both in the military…not social, but economics also,” Duterte said during the Philippines-China Trade and Investment Forum here.
"I have separated from them so I will be dependent on you (China) for a long time but don't worry we will also help," he added.
The relationship between the Philippines and its largest trading partner the US has been facing uncertainties since Duterte became president.
American officials drew the ire of Duterte when they criticized his brutal war on illegal drugs, which has left more than 3,000 drug suspects dead.
In what was seen as a retaliation for the US’ critical stance on his anti-drug campaign, Duterte declared this month that he would no longer allow the conduct of joint military drills between the two countries.
READ: Bayan urges Duterte to formalize break with US
'Separation from colonial mentality' Foreign Affairs Secretary Perfecto Yasay Jr. said the Philippines would be opening itself to countries that offer assistance “with no strings attached.”
“He (Duterte) had been saying this all along. This was the core of his message. We are separating from that colonial mentality that has impeded our investments and our growth,” Yasay said.
“In that context, we would like to push for integration with our ASEAN (Association of Southeast Asian Nations) and our neighbors,” he added.
Presidential Spokesman Ernesto Abella said the Philippines would not set aside the treaties and agreements with its allies, including the US.
“It is a restatement of his position on charting an independent foreign policy as provided in the Philippine Constitution that he has repeatedly made in domestic speeches,” Abella said.
“This is not an intent to renege on our treaties and agreements with our established allies but an assertion that we are an independent and sovereign nation, now finding common ground with friendly neighbors with shared aspirations in the spirit of mutual respect, support and cooperation,” he added.
‘Big brother’ Presidential Communications Secretary Martin Andanar, meanwhile, said Duterte was emphasizing an independent foreign policy “where no one interferes and no one tells us what to do.”
Asked how the Philippines can be independent when Duterte himself said that he would be more dependent on China, Andanar replied: “I think you are taking it very, in a very shallow manner. If you talk about independent foreign policy, it doesn’t mean that you’re not going to do business with other countries.”
“When you say independent foreign policy, it means that we are not depending on the United States or any other ally to tell us what to do,” he added.
Andanar compared the separation from US to a son who is about to leave the house of his father to marry.
“The United States was a father to us for a long time and it is but timely already for us to move out of that house and secure our own house and decide for ourselves,” he said.
Andanar said the US would remain an ally of the Philippines despite the president’s latest pronouncement.
Asked if China is the Philippines’ new big brother, Andanar replied: “China is not only a friend. China is not only a relative. But China is a big brother.”
Sergio Ortiz Luis, honorary chairman of the Philippine Chamber of Commerce and Industry, said the public should not be bothered by Duterte’s rhetoric.
“I think we’ll have to support him because that is his style I think he is basically negotiating with both sides,” Ortiz Luis said.
“We have to distinguish what is separation. It’s not separation of a husband and wife. It’s a separation of a father and a son who is about to live in a new apartment. Again maybe hyperbole. I don’t very much think it would be translated to real policy,” he added.
RELATED(2) FROM PHILSTAR
Chinese eye Philippine tourism investments By Mary Grace Padin (The Philippine Star) | Updated October 21, 2016 - 12:00am 2 317 googleplus1 0
According to Tourism Secretary Wanda Teo, the DOT is eyeing two million Chinese arrivals every year, much like Thailand.
BEIJING – The Department of Tourism has expressed optimism about the industry prospects amid the strengthening relationship between Beijing and Manila.
Tourism Secretary Wanda Teo met yesterday with eight Chinese investors, including travel agencies, charter operators, and hotel and restaurant owners to address their inquiries and concerns about running their businesses in the Philippines.
According to Teo, the DOT is eyeing two million Chinese arrivals every year, much like Thailand.
And with the rapid increase of Chinese visitors to the country, Teo cited the need to increase the capacity of local hotels and accommodation.
Teo earlier said, she was looking at one million arrivals from China this year, almost double the 490,841 tourists last year.
MORE CHINESE TOURISTS, MORE INVESTMENTS
During the meeting, Beijing Tourism Group (BTG) vice president Bai Fan said more Chinese tourists and investments were seen to come into the Philippines given efforts to improve the relations between the two countries.
“Because of the warming relations between the two countries, we see that tourism is very promising,” Fan said in Chinese.
This factor, as well as the abundance of tourism resources in the Philippines, is also seen to increase investment opportunities for Chinese businessmen in the country.
He added the Philippines would have no problem capturing two million tourists from China as long as it continues to address current roadblocks including long visa processing, limited accessibility and lack of accommodation facilities.
BTG is a state-owned tourism service group with six different business segments, namely dining, lodging, transportation, travel agency, retailing and scenic spots.
Fan said the group remained keen on making investments in the Subic Bay Freeport Zone.
“We are going to consider (if we are going to invest) later. We plan to go first. (But we are so far interested in) Subic port. We contacted it before and we are very impressed. It has very beautiful sceneries and it has a lot of potential for the market. It is very close to Manila,” he said.
Stephen Chen, general manager of Asia Landmark Tours and Travel, said President Rodrigo Duterte’s state visit to China presents a prime opportunity to promote the Philippines to Chinese travelers.
“Now is a very good chance to promote the Philippines because of the trip of the President,” Chen said.
“We need to change their minds. Actually, many people know that the Philippines is very beautiful, but they don’t know the culture and situation there,” he added.
All the companies present during the meeting expressed eagerness to invest or expand their operations in the Philippines.
Secretary Teo made the commitment to coordinate with other concerned agencies to address the issues raised.
Guiller Asido, COO of the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), also filled them in on the fiscal and nonfiscal incentives the government may be able to provide if they invest within the country’s tourism enterprise zones (TEZ).
“We have identified which areas in the country where you can actually invest in and we are open to invite you and look at those areas,” he said, referring to San Vicente, Palawan, Siargao, Samal Island, Corregidor Island, Bataan and Bohol.
Section 86 of the Tourism Act provides for incentives in TEZs, such as income tax holidays spanning six years, gross income taxation of five percent, 100 percent exemption on all taxes and customs duties on the importation of capital equipment, and the exemption of transportation and spare parts from tariffs and duties.
He said the clause includes 100 percent foreign owned enterprises, except for land ownership.
In another bid to strengthen bilateral ties between China and the Philippines, the DOT and the China National Tourism Administration (CNTA) have forged a partnership that aims to develop tourism cooperation between the two nations.
Teo and CNTA chairman Li Jinzao yesterday signed a memorandum of understanding (MOU) on tourism cooperation for the period 2017 to 2022.
The MOU seeks to strengthen and promote the bilateral tourism cooperation between the two countries and boost tourist arrivals in China and the Philippines.
According to data from the DOT, Chinese arrivals to the Philippines reached 490,841 in 2015, 24.28 percent higher than the 2014 recorded arrivals of 394,951. It occupied the fourth spot with 9.16 percent share of the market.
Meanwhile, statistics from the CNTA showed the Philippines is its 11th biggest source market, with more than one million arrivals in 2015, up 3.7 percent from 2014.
7 AREAS OF TOURISM EXCHANGE
The agreement between China and the Philippines included seven key areas for tourism exchange.
First component under the MOU is the exchange of tourism professionals and administrators.
Both sides are expected to send tourism administrators and professionals to the other country to share their knowledge and expertise and help in further developing hotels, resorts, cruise, port, tourism products and other related industries and competency standards in the host country.
Manila and Beijing are also expected to trade information on the latest trends in the tourism industry, as well as the current situation and statistical data of each country’s tourism sector.
Under the agreement, the two state agencies will also collaborate on measures to guarantee safety and quality assurance of tourism destinations, products and services.
The MOU also provides that the two countries should help promote the other’s destinations to boost their tourist arrivals.
To do this, the two of them would implement joint promotions and activities, and urge their respective local tour operators and travel agencies to promote the other’s products and destinations.
Both participants will also conduct workshops or trainings for the other party, depending on their needs, the strengths and weaknesses.
They are also expected to support each other on marketing initiatives, such as trade fairs and exhibitions. They will also promote the protection of the environment and promote the sustainable development of each country’s tourist destinations and resources.
Lastly, both the DOT and the CNTA will promote and facilitate investment in tourism infrastructure in each other’s countries.
Duterte brings home $24B from China BY MAYVELIN U. CARABALLO, TMT ON ON OCTOBER 22, 2016 BUSINESS
‘President Rodrigo Duterte meets top Chinese government officials China at the Great Hall of the People in Beijing on October 20. Photo by King Rodriguez/PPD
PH-China to benefit mutually from closer ties’
The Philippines’ move to mend and strengthen ties with China—which yielded $24 billion worth of loans and investment pledges after President Rodrigo Duterte’s trip this week—will create more opportunities for both countries, Fitch-owned BMI Research said.
tableDuterte wrapped up a four-day state visit to China on Friday, during which he announced his administration’s intention to separate from the US and forge closer ties with Beijing.
But his economic managers said the Philippines will keep its good relations with Western countries, and will forge stronger alliances with Asean, as well as with Japan and South Korea.
“In the short-term, we expect that that this could be beneficial for the Philippines economy, which will stand to gain from an increase in Chinese tourism, similar to trends seen in Malaysia and Thailand, more infrastructure investment, as well as an increase in bilateral trade,” BMI said in a report released Friday.
The President’s visit yielded $15 billion in investments including deals forged between local and Chinese companies, Trade Secretary Ramon Lopez said. The Philippines will also get $9 billion worth loans including $3 billion credits from mainland private lenders.
The two countries also signed seven joint agreements including a memorandum of understanding on tourism that is expected to help boost Chinese arrivals in the country.
Beijing has likewise lifted its travel ban to the Philippines, a move the tourism department said will encourage more Chinese tourists to visit the country.
The travel ban was imposed in 2012 after a naval standoff at the Scarborough Shoal.
Chinese tourists are the third biggest visitors in the Philippines, next to those from South Korea and the US. Last year, tourists from China rose 24.25 percent to 394,951.
Reversal in foreign policy
The relationship between the Philippines and China soured due to rival claims over the resources-rich West Philippine Sea, which prompted Duterte’s predecessor, President Aquino, to file an arbitration case in January 2013. The Permanent Court of Arbitration in The Hague ruled in favor of the Philippines in July this year, a month after Aquino left Malacañang after Duterte’s win in the May elections.
Malacañang said Duterte’s visit to China was intended to “repair strained ties” between the two countries resulting from the territorial dispute.
Duterte’s China pivot “marks a dramatic reversal in the Philippine’ foreign policy stance from one that is US-centric,” BMI said.
“This marks a complete reversal of the Philippines’ diplomatic stance under Duterte’s predecessor,” it said, “and we highlight that this will have important ramifications for the US’s geopolitical strategy in Asia, as well as economic, investment, and trade opportunities between China and the Philippines.”
As a result, the US will likely have to increasingly cultivate Vietnam as a regional security partner to partially offset the withdrawal of the Philippines from an informal US-led bloc of Asian nations aimed at counter-balancing China’s rise, it said.
But while forging better ties with China could provide a short-term boost to the local economy, the longer-term benefits would largely depend on the progress of government reforms to improve the business environment and efforts to reassure investors with a lower risk tolerance, BMI said.
Stronger Asean alliance
The Philippines also aims to pursue stronger alliance with its neighbors in Asean, while maintaining good relations with Western economies, the country’s economic planning and finance chiefs said in a joint statement.
“We will maintain relations with the West but we desire stronger integration with our neighbors. We share the culture and a better understanding with our region,” said Finance Secretary Carlos Dominguez and Socio-economic Planning Secretary Ernesto Pernia, who both accompanied the President to China on October 18-21.
Duterte has also directed his cabinet to move “strongly and swiftly” to strengthen alliances not only with Asean and China, but also with Japan and South Korea, which will give the country access to a lucrative 1.8 billion market across the region, the statement said.
After China, Duterte is set to visit Japan in the last week of October.
VIDEO FROM RAPPLER.COM
ALSO FROM MALAYA BUSINESS INSIGHT
Aug. budget surplus doubles to P32.6B By ANGELA CELIS October 21, 2016
IMAGE FROM THE MANILA TIMES
The Duterte administration incurred a budget surplus of P32.6 billion in August, double that of last year’s comparative total (P15 billion) due to higher increase in revenues that outpaced growth in expenses.
“Too much” money according to Budget Secretary Benjamin Diokno who earlier discussed his fears that the government may also end up underspending for the year.
The Bureau of the Treasury said the surplus, the first in the Duterte government narrowed the eight-month fiscal gap to P138.4 billion.
The end-August budget deficit is less than half the P388.87 billion target for the year.
In August, the government posted a nine percent growth in expenditure to P177 billion from P161.6 billion in the same month last year.
Interest payments, which took up 13.2 percent of total spending, amounted to P23.4 billion in August, up 42 percent from last year’s P16.5 billion.
Netting out interest payments, the government’s expenditures only grew by six percent to P153.5 billion.
JANUARY TO AUGUST SPENDING
In January to August 2016, the government total spending stood at P1.619 trillion, up by 12 percent compared to P1.444 trillion a year ago.
Netting out interest payments, the government spent P1.402 trillion, 15 percent higher than last year’s level.
Last month, Diokno said that significant changes will be seen in the way public funds are disbursed by the fourth quarter of this year, as the government aims to increase investments in infrastructure and avoid underspending.
Diokno then said that his worst fear is that the government, under the Duterte administration, will also underspend. Underspending was one of the criticisms against the Aquino administration as it failed to spend as program.
“I think by the the fourth quarter you’ll see some changes in the way we disburse money. We cannot go on 24/7 (construction of infrastructure projects) yet, because of existing contracts,” Diokno previously said.
“I’m telling you, I told my colleagues in the cabinet, my worst fear is that we will suffer the same fate of underspending if you don’t do your job. So that’s why President Durterte said, you spend it or you lose it, your job. So there is pressure there,” he added.
GOT REVENUES UP IN AUGUST
Meanwhile, government revenues in August reached P209.6 billion, up by 19 percent from P176.7 billion in the previous year.
Of that amount, the Bureau of Internal Revenue (BIR) contributed P157.5 billion to the state coffers, while the Bureau of Customs (BOC) generated P33.1 billion in revenues.
Both the BIR and BOC, accounting for a combined 90 percent of government revenues, raised their tax take during the month by double-digits, or 14 percent and 23 percent, respectively.
Likewise, non-tax revenues from other government agencies posted a jump of 75 percent to P12 billion from P6.9 billion, while the Treasury’s income doubled from last year’s P2.7 billion to P5.8 billion.
Cumulatively, total government revenues amounted to P1.481 trillion at end-August 2016, a three percent improvement from P1.441 trillion a year ago.
The government said that the slower growth pace was a result of the one-time transfer of Coconut Levy assets worth P60.1 billion in May last year.
Netting-out the non-recurring Coconut Levy assets, the treasury data revealed that government revenues improved by seven percent year-on-year in the first eight month of 2016.
To help raise needed funds for public investments, the government is pursuing a comprehensive tax reform program to discourage evasion and avoidance, broaden the tax system’s narrow base and make the current system simpler and more equitable.
The Department of Finance last month submitted to the House of Representatives the first package of its proposed Tax Reform Roadmap for Acceleration and Inclusion Act in keeping with the Duterte administration’s 10-point socioeconomic agenda.
RELATED(2) FROM THE MANILA TIMES
Palace: American BPO firms won’t leave PH BY LLANESCA T. PANTI, TMT ON ON OCTOBER 24, 2016 TOP STORIES
AMERICAN-owned business processing outsourcing (BPO) companies won’t pull out of the Philippines despite President Rodrigo Duterte’s declaration of a separation from the United States in terms of foreign policy, the Palace said Sunday.
Palace Communications chief Martin Andanar made the statement two days after Duterte told a crowd of Filipino and Chinese businessmen that he was severing the Philippines’ military and economic ties with US.
Andanar recalled that US President Barack Obama had appealed to American BPO firms to conduct their operations in US soil instead of outsourcing, but the call fell on deaf ears.
“These BPO companies are not leaving out country because they know that it is cost-efficient for them to invest in the Philippines. In the US, workers are paid per hour. Here, workers are paid per day. It is undeniable that it is more viable to do business here,” Andanar said.
“Besides, our workers have better skills, get the job done fast. Filipinos can have an American, British, or even Australian accent. There’s flexibility. To come up with a contingency plan [in case the American BPOs leave]is to respond to something merely speculative,” Andanar added.
Albay Rep. Joey Salceda shared Andanar’s sentiments, noting that the BPO industry is worth $10 billion in the country for a reason: because Filipinos are highly competent for the job.
“We won’t lose the BPO sector because we have the neutral accent and we deeply understand American culture. We also have a caring nature. It’s [just]easy to be apocalyptic about it,” Salceda, an economist, said in a separate radio interview.
Andanar and Salceda also argued that what the President wanted was not to cut the ties with the United States, but for Manila to break free from adopting the foreign, military and economic policies of Washington.
“We are separating in terms of policies. A state is a territory with a government, free from external control … freedom from external sovereignty. The President is just stating the fact that we have long ceased to be an American colony, but our practice is that we still follow their policies,” Andanar said.
“The President is just correcting the foreign policy of mendicancy,” Salceda said.
Moody’s raises PH 2016 GDP forecast BY MAYVELIN U. CARABALLO, TMT ON ON OCTOBER 19, 2016 BUSINESS
Moody’s raised its 2016 growth forecast for the Philippines as it expects spending from both the government and consumers to remain robust.
The Southeast Asian economy will probably rise 6.5 percent this year, the debt rater said in its latest credit note released Tuesday. In July, Moody’s had said the domestic economy may expand 6.2 percent in 2016.
“Government spending should stay accommodative on the back of efforts to improve budget execution, while the outlook for private investment is robust. Private consumption could slow somewhat, as firming oil prices pass through to marginally higher inflation. But robust real income growth will continue to support consumer spending,” Moody’s said in its report.
In fact, the resilient domestic demand has shielded the country against external shocks including the slowing Chinese economy, it said.
This puts the Philippines in a sweet spot versus its peers.
“Given the strength of domestic demand and services exports, the Philippines’ economic growth has outpaced many of its rating peers. In particular, many Baa-rated countries continue to face growth pressures stemming from the decline in commodity prices, including Kazakhstan (Baa3 negative), South Africa (Baa2 negative) and Trinidad and Tobago (Baa3 negative),” Moody’s said.
“In 2016 and 2017, we expect that only India will be the only Baa-rated country to record faster real GDP growth than the Philippines.”
Moody’s latest forecast is within the government’s 6 percent to 7 percent growth target this year, and slightly higher than that of the World Bank, IMF and the ADB, who all estimated this year’s economic expansion at 6.4 percent.
For 2017, Moody’s also sees GDP rising at 6.5 percent, expecting the key domestic drivers of growth to remain solid.
Rajiv Biswas, Asia-Pacific chief economist for IHS Markit, said GDP growth outlook for the Philippines this year has improved significantly following the strong economic growth momentum in the second quarter, as well as the upbeat factory output recorded in August.
The economy expanded at a forecast-shattering 7 percent year-on-year in the second quarter, while manufacturing production volume rose 13.5 percent in August.
But Biswas cautioned against political instability.
“International investors prefer a stable political climate that provides a safe and predictable regulatory and operational environment for their large-scale foreign direct investment decisions,” Biswas said in an e-mailed statement.
The country’s solid economic fundamentals support the debt rater’s Baa2 rating on the Philippine sovereign.
It said low and stable inflation, aided by global oil prices, has supported robust private consumption in the country, while the pick-up in government spending over the past year has also stimulated capital formation without derailing debt consolidation.
Moody’s also noted that the government’s 10-point agenda, including the proposed tax reform measures, and higher infrastructure spending, will support the ratings.
“In particular, an acceleration of infrastructure development and the passage of comprehensive tax reform would be credit positive,” it said.
The firm said the “stable” outlook on the rating suggests that upside and downside risks are balanced.
RELATED FROM ABS-CBN
Philippine shares rise nearly 3 pct Susan Mathew, Reuters Posted at Oct 18 2016 08:53 PM
MANILA - Southeast Asian stock markets rose on Tuesday on a weaker dollar, with Philippine shares closing nearly 3 percent higher as President Rodrigo Duterte's visit to China raised hopes of foreign investment inflows.
Duterte's visit to China on Tuesday, accompanied by at least 200 members of the Philippine business elite, is to pave the way for what he calls a new commercial alliance, amid deteriorating ties with longtime ally the United States.
READ: Duterte off to Brunei, China for state visits
"We see some semblance of foreign buying given the notion that Duterte's government will bring in investment from foreign trips," said Manny Cruz, an analyst with Manila-based Asiasec Securities.
"If it's significant, the amount of dollars that could come in after those trips could help curtail the weakness of the peso."
Philippine shares closed 2.9 percent higher at 7,571.15, their biggest gain since May 11, driven by consumer cyclicals and financials. SM Investments Corp. and SM Prime Holdings were among the biggest gainers.
Asian shares extended gains, pulled higher by financials and a rebound in oil prices.
The dollar fell against a basket of six major currencies after recently strengthening as markets priced in expectations for a Federal Reserve rate increase in December, a growing headwind for emerging markets.
Fed Vice Chairman Stanley Fischer said on Monday that economic stability could be threatened by low interest rates, but it was "not that simple" to raise rates.
"The dollar edging lower is a sigh of relief for Southeast Asian markets during times when the Fed has been so hawkish," said Taye Shim, an analyst with Daewoo Indonesia.
Ahead of the U.S. inflation data due later in the day, investors also evaluated whether the Fed will let inflation run above target before raising interest rates.
Malaysia and Indonesia rose 0.8 percent and 0.4 percent respectively, with Indonesia extending gains into a third straight session.
RELATED(2) FROM PHILSTAR
Stocks snap two-day upturn By Iris Gonzales (The Philippine Star) | Updated October 21, 2016 - 12:00am 1 10 googleplus0 0
Investors took money off the market after two successive days of bargain hunting, which saw the index retreating to the 7,700 level yesterday.
MANILA, Philippines - Investors took money off the market after two successive days of bargain hunting, which saw the index retreating to the 7,700 level yesterday.
The benchmark Philippine Stock Exchange index (PSEi) declined 8.25 points, or 0.11 percent, to settle at 7,713.32.
On the other hand, the broader All Shares index managed to rise 2.41 points to close at 4,536.90.
Most sectors closed in positive territory except for the holding and mining and oil counters.
Total value turnover reached P6.94 billion. Advancing stocks outnumbered decliners, 100 to 79 while 47 stocks were left unchanged.
BDO said investors in Asia are getting more focused on the Fed rate hike in December as Clinton’s lead in the US presidential race remains intact after the last debate.
Similarly, Luis Limlingan, managing director at Regina Capital said investors are watching the developments in the US.
“After experiencing one of the biggest climbs ever in the last two days, the PSEi remained flat as other emerging-market stocks caught up as a rally in crude oil underpinned demand for higher-yielding assets. Investors remained on the sidelines as value turnover was much weaker this time at approximately P6.6 billion as they watched and analyzed the final US presidential debate. Investors appear to be pricing in a Clinton victory,” Limlingan said.
CONTINUE TO >> NEXT BUSINESS PAGE (Next week news update)
GO TO >> HEADLINE NEWS PAGE
Chief News Editor: Sol Jose Vanzi
EMAIL PHILIPPINE HEADLINE NEWS ONLINE
© Copyright, 2016 All rights reserved
BACK TO PHILIPPINE HEADLINE NEWS ONLINE [PHNO] WEBSITE