|
INDUSTRY
AND INVESTMENTS
SCOTTISH
businessmen expressed interest in investing in the
country’s renewable energy sector, taking note of the
Ph
il
ippines
’
incentives regime and natural riches. The Ph
il
ippine
Trade and
Investment
Center
recently organized a forum to market the
Ph
il
ippines
as
the premier business destination with 24 Scottish
companies to identify opportunities for renewable and
green energy. The forum was sponsored by the Scottish law
firm Morton Fraser and business consultants International
Market Analysis at the Morton Fraser offices in the
brand-new Quarter M
il
e 2
development in
Edinburgh
,
Scotland
.
“Substantial interests were gathered from Scottish
companies in wind energy [particularly offshore wind],
wave, and tidal energy technologies, research on improved
and efficient biomass generation and from bacteria and
algae, waste-to-energy innovations and solar power,”
Trade Secretary Gregory L. Domingo said. The forum
highlighted the Ph
il
ippine
Renewable Energy Act of 2008 which is the first and most
comprehensive in
Asia
.
The law grants fiscal and non-fiscal incentives to
business engaged in renewable energy projects, such as
wind energy, solar energy, geothermal, hydropower and
ocean energy generation. (businessmirror.com.ph)
PHILIPPINE
Airlines on Sunday rejected the resignation of 25 p
il
ots
who quit without notice, telling them to return to work or
face charges after their departure forced the airline to
cancel flights and rebook passengers over the weekend.
Airline p
il
ots
and mechanics were required by labor regulations to give
six months’ notice before quitting, the airline said.
The p
il
ots
were also obliged to stay with the airline for two years
to cover the cost of their aviation school training, which
ran into m
il
lions
of pesos. “The indiscriminate resignations are in
violation of contracts and government regulations,” said
spokesman Jonathan Gesmundo, who apologized for the flight
cancellations and blamed the poaching by Asian and Middle
Eastern airlines for the exodus. The
carrier, controlled by b
il
lionaire
Lucio Tan, canceled at least 19 weekend flights after 13
captains and 12 first officers crewing Airbus A-319 and
A-320 aircraft resigned without giving the company enough
time to train replacements, the company said in a
statement Sunday. P
il
ots
were being pirated by overseas firms, including Middle
Eastern airlines that were offering salaries three times
more than PAL was paying, or as much as $15,000 a month,
the company said. Airport sources said some of the p
il
ots
who had quit were also seeking employment in
Korea
and
Vietnam
. (manilastandardtoday.com)
INTERNATIONAL
AND DOMESTIC TRADE
Two
groups of commercial wheat m
il
lers
are w
il
ling
to pay customs duty again on imported wheat to help f
il
l
the country’s budgetary deficit estimated at over P300 b
il
lion
this year. Ph
il
ippine
Association of Flour M
il
lers
Inc. and the Chamber of Ph
il
ippine
Flour M
il
lers
told Bureau of Customs Commissioner Lito Alvarez in a
recent meeting that the preva
il
ing
zero duty on imported wheat should now be revisited
“since the intent of Executive Order 818, which scrapped
the 3-percent duty on m
il
ling
wheat, had not been met.” Ric Pinca, Pafm
il
executive director, said the re-imposition of the
3-percent tariff would help generate P800 m
il
lion
in import duty based on 2009 import data. “This
additional revenue could help f
il
l
the country’s budgetary deficit estimated at almost P200
b
il
lion,”
he said. “The m
il
lers
are volunteering to pay import duty again not only to show
our support to the economic team of President Aquino but
also, and more importantly, to demonstrate our
appreciation for the welcome news coming out of the Bureau
of Customs where Commissioner Alvarez is making headway in
his bid to curb corruption, combat smuggling and transform
the BoC into an efficient and ethical organization,” he
said. (manilastandardtoday.com)
Domestic
manufacturers are seeking the creation of special courts
and a team of special prosecutors to handle smuggling
cases. The Federation of Ph
il
ippine
Industries (FPI) brought up the matter in a recent meeting
with Justice Secretary Le
il
a
de Lima. Jesus L. Arranza, FPI chairman and concurrent
head of the group’s antismuggling committee, said that
just like intellectual-property violations, smuggling is
also a baffling case because of the numerous methods
employed by smugglers. “Smuggling cases are not just
ordinary cases so they need special prosecutors and
special courts. Besides, the magnitude of the negative
effects that smuggling brings is so huge. Just for
revenues alone, we estimate that the government loses P125
b
il
lion
yearly because of technical smuggling,” Arranza told. In
line with this, Arranza said his group proposed the
forging of a memorandum of agreement (MOA) between the FPI
and the DOJ for the training of Department of Justice
prosecutors. For instance, Arranza said, prosecutors must
read
il
y
know which types of document they should be gathering in
specific cases of technical smuggling, such as
undervaluation, misclassification and misdeclaration.
Another MOA, he said, should be forged allowing industry
counsels to assist DOJ prosecutors in smuggling cases. (businessmirror.com.ph)
SEAWEED
exporters, led by the Seaweed Industry Association of the
Ph
il
ippines
(Siap),
asked the Department of Agriculture (DA) to make
representations at the Association of Southeast Asian
Nations (Asean) and push for the removal of
China
’s
35-percent duty and value-added tax (VAT) on carrageenan.
Siap president Benson U. Dakay said the imposition of the
35-percent duty and VAT is a form of an “unfair trade
practice.” “
China
imports raw seaweed from us tax-free. We should be
accorded the same priv
il
ege,”
said Dakay in a telephone interview. Siap disclosed that
Indonesia
and
Malaysia
are mulling over the possib
il
ity
of making representations at the Asean regarding the
matter.
China
engages Asean countries through the so-called Asean Plus
Three cooperation. Local seaweed exporters are keen on
China
because of its huge demand for carrageenan. Dakay said one
other challenge confronting seaweed exporters is the
continuous appreciation of the greenback against the peso.
“[Seaweed] exporters cannot survive [at the current
exchange rate] of P45 against the dollar,” he said. For
the whole of 2010, Siap said seaweed farmers expect to
produce 80,000 metric tons (MT) of raw seaweed. This is 23
percent higher than the 65,000 MT produced last year. (businessmirror.com.ph)
The
value of exports by registered locators in this
freeport
reached $713.15 m
il
lion
from January to June this year, marking an all-time high
record in mid-year export value in 16 years.
Subic
’s
first semester export production also indicated an
increase of $180.26 m
il
lion,
or 33.83 percent, compared to the $532.89 m
il
lion
generated in the same period last year. “The
freight-on-board (FOB) value posted by SBMA’s top 10
exporters from January to June comprised 86 percent, or a
total of $613.44 m
il
lion,
of the exports,” Subic Bay Metropolitan Authority (SBMA)
administrator/chief executive officer Armand Arreza told.
In an official SBMA statement, Korean shipbu
il
der
Hanjin Heavy Industries Co.-Ph
il
ippines
(HHIC-Ph
il
)
remained
Subic
’s
top exporter since last year by posting an FOB value
totaling $372.74 m
il
lion.
Arreza said the SBMA expects
Subic
’s
export FOB value to grow in the coming months, as
freeport
enterprises roll out more products due to brightening
prospects in global trade. “Hanjin, for one, is expected
to rally its production in the coming months. After
delivering container ships like the APL Bahrain, Leyla K,
and Eser K in the first semester, Hanjin is set to
fabricate some 36 vessels more, with delivery schedules
within the next two years,” Arreza pointed out. “So
we’re expecting Hanjin to remain as the
Subic
freeport
’s
top exporter for the next few years, and also fuel the
growth of
Subic
’s
maritime industry.” Arreza said that after HHIC-Ph
il
,
the next biggest exporters were Taiwanese computer maker
Wistron Infocomm (Ph
il
s.),
which posted $66.71 m
il
lion;
Japanese micro-motor manufacturer Sanyo Denki, with $50.98
m
il
lion;
Japanese ATM-maker Hitachi Terminals, $31.34 m
il
lion;
and Japanese wood products manufacturer Juken Sangyo with
$24.86 m
il
lion.
(philstar.com)
CONSUMER
WELFARE AND TRADE REGULATION
THE
government is planning to go into a “food-for-work
program” as one strategy to ensure that the National
Food Authority (NFA) w
il
l
not drown in “excess imported rice,” a result of
overimportation by the Arroyo administration. NFA
Administrator Angelito Banayo said the national government
also plans to allocate rice to local government units (LGUs),
which could sell the produce at P25 a k
il
o.
“We’re looking into food-for-work programs, wherein
instead of paying [cash to] participants to livelihood
programs, part of their compensation w
il
l
be food, including rice,” Banayo told reporters in an
ambush interview in
Quezon
City
.
The NFA chief met with Agriculture Secretary Proceso
Alcala, Social Welfare Secretary Corazon Soliman and
Interior Secretary Jesse Robredo on Monday. Banayo,
however, could not say the volume of “excess rice”
that would be allocated to LGUs and the government’s
food-for-work programs. The NFA refused to give the exact
volume of “excess rice” stored in its warehouses. The
food agency, however, is mandated to keep a buffer stock
equivalent to 30 days of consumption during the lean
months of July, August and September. At any given time,
the NFA is supposed to hold 15 days worth of rice stocks.
As of the end of July, the NFA has more than 2 m
il
lion
metric tons (MMT) of rice, equivalent to 56 days of stock
based on a da
il
y
consumption of 36,300 metric tons (MT). The NFA keeps a
buffer stock to ensure that the country would have ample
supply of the staple if the
Ph
il
ippines
is
hit by natural calamities. Banayo, however, said the NFA
is not yet ready to come up with its recommendations on
how to dispose of the excess rice stocks. He said the
agency might be able to present its recommendations to
Malacañang by Thursday or Friday. (businessmirror.com.ph)
The
implementation of the value-added tax (VAT) on toll w
il
l
be enforced despite intense lobbying from motorists and
toll operators to defer the measure. On the sidelines of
the Bureau of Internal Revenue’s 106th anniversary
celebration yesterday, BIR Commissioner Kim Henares said
that the implementation w
il
l
push through on Aug. 16. Henares stressed that the VAT on
toll is not a new tax and is in fact required by law.
Under the amendments to the VAT law in 2005, franchise
receipts of franchise holders such as toll operators are
subject to VAT. She said the law should have been
implemented as early as 2005 but has been deferred because
of administrative setbacks and stiff opposition from toll
operators. Henares said the BIR under her leadership would
strictly implement all tax laws as part of efforts to
boost state coffers. She reiterated the policy of the
Aquino administration to improve government revenues by
enhancing tax administration instead of slapping new taxes.
As of last count, BIR estimates that toll operators owe
the government a total of P6.5 b
il
lion
in unpaid VAT on toll from 2007 to 2009. (philstar.com)
The
Department of Trade and Industry (DTI) said they w
il
l
st
il
l
pursue the profiteering case against flour
m
il
lers
even if the DTI National Capital Region (NCR) dismisses
the complaint. “Definitely we w
il
l
pursue this case,” Trade Undersecretary Zenaida C.
Maglaya said in an interview. The m
il
lers
have asked the DTI NCR to drop the case because of a
technicality. The Ph
il
ippine
Association of Flour M
il
lers
(PAFMIL) refused to elaborate on their pleading. “If in
case it w
il
l
be dismissed we w
il
l f
il
e
it again. It w
il
l
not be considered double jeopardy,” Maglaya said. The
decision of the adjudication committee is expected to come
out within the week. PAFMIL said there is st
il
l
no schedule for the next hearing. The first hearing was on
June 30. After the first hearing, Bureau of Trade
Regulation and Consumer Protection executive director
Victorio Dimagiba said that they w
il
l
be dropping the profiteering complaint against Delta M
il
ling
Industries Inc. after the company agreed to sell flour at
P650 per bag. “This is the first time a profiteering
case is lodged against manufacturers. This is a landmark
case. We are happy with the way things are going,”
Dimagiba said. If proven gu
il
ty
of profiteering the firms w
il
l
face fines of up to P2 m
il
lion.
The other respondents were Universal Robina Corp., San
Miguel M
il
lsMorning
Star M
il
ling
Corp., Ph
il
.
Foremost M
il
ling
Corp., General M
il
ling
Corp., Liberty Flour M
il
ls,
P
il
mico
Foods Corp., Ph
il
Flour M
il
ls,
Republic Flour M
il
ling
Corp., and Wellington Flour M
il
ls.
(philstar.com)
CORPORATE
Leisure
Resorts World Corp., the partner of Belle Corp. in the
development of a $350-m
il
lion
gaming and entertainment fac
il
ity
in
Pasay
City
,
said the group is now in advanced stage of negotiations
with Harrah’s Entertainment Inc., the world’s largest
provider of branded casino entertainment. Albert Benitez,
a major shareholder and former president of Leisure
Resorts, told reporters the group was also in talks with
with two foreign casino operators but negotiations with
Harrah’s Entertainment had reached an advanced stage.
Benitez won a Congressional seat representing the third
district of Negros Occidental. Harrah’s is being offered
to manage the planned casino complex that w
il
l
rise on a 6.2-hectare property along a reclaimed property
in
Man
il
a
Bay
.
Benitez said Harrah’s Entertainment might bring its
Planet Hollywood brand in the
Ph
il
ippines
if
it would be chosen Belle’s casino operator. This would
be Harrah’s Entertainment’s first casino venture in
Asia
.
Benitez did not name the two other foreign casino
operators that the group was in talks with. He said the
undisclosed firms have current operations in
Macau
and
Singapore
. (manilastandardtoday.com)
PLDT
Communications and Energy Ventures Inc. (PCEV),
formerly P
il
ipino
Telephone Corp. (P
il
tel),
suffered a huge drop in its net income from P7 b
il
lion
during the first six months of 2009 to only P872 m
il
lion
in the same period this year. Core net income, before
exceptional, one-time items, also declined heav
il
y
to P1.1 b
il
lion
for the January to June 2010 period from P6.3 b
il
lion
in the first six months of last year. PCEV is 99.5-percent
owned by Smart Communications. PCEV’s income is derived
mainly from its direct equity share in the net income of
Man
il
a
Electric Co. (Meralco) and its holdings in Beacon Electric
Asset Holdings Inc. It owns 50 percent of Beacon Electric,
a special purpose company jointly owned with Metro Pacific
Investments Corp. (MPIC) whose sole purpose is to hold
shares in Meralco, which presently amount to 392.5 m
il
lion
shares or equivalent to 34.8 percent of Meralco’s
outstanding common shares. “We are pleased that PCEV’s
investment in Meralco is already bearing fruit with the
continued improvement in Meralco’s performance and the
declaration of cash dividends,” said PCEV president and
CEO Napoleon Nazareno, who is also president and CEO of
Smart Communications and Ph
il
ippine
Long Distance Telephone Co. (PLDT). (philstar.com)
Gokongwei
holding company JG Summit has joined the business process
outsourcing (BPO) bandwagon as demand for
high-quality BPO services continues to rise. ITech Global
Business Solutions, a company registered with the Ph
il
ippine
Economic Zone Authority (PEZA) and located at Robinsons
Otis with an initial seat capacity of 777, aims to provide
better customer service, technical support, telemarketing
and telecollections, market intelligence, financial
services, and information technology services including
SAP consulting and implementations services, to clients.
The company provides both voice and non-voice solutions in
the telecommunications, airline, real estate, hotel, reta
il
,
and banking and finance industries in
North
America
,
Australia
,
Europe
,
New
Zealand
,
Singapore
,
and other Asian countries. ITech Global general manager
Arlene Agu
il
ar
noted that the company is among the preferred BPO
providers in the
Ph
il
ippines
because of its ab
il
ity
to provide on-brand customer experience to clients at
significantly lower costs. “We add value by providing
the clients overall operational efficiency wh
il
e
reducing operating expenses and program start-up risks. We
leverage on our synergies with the other JG Summit
companies to shorten mob
il
ization
time and client ramp-up requirements,” she added. (philstar.com)
BANKING
AND FINANCE
The
president of the One Network Bank (ONB), Mindanao’s
largest rural-bank network with plans to expand in the
Visayas, said that short-term Treasury b
il
ls
may st
il
l
likely hit bottom to 1-percentage point less than the
preva
il
ing
rate when confidence in the new administration translates
into aggressive and massive investments. The 91-day T-b
il
l,
the benchmark of key bank charges, including lending rate,
was currently at 3.9 percent, from a high of 8 percent in
the early part of this decade, said Alex B. Buenaventura,
president of ONB. The lowered rate may only indicate that
the economy is st
il
l
awash with money in circulation and thus highly liquid, he
said. “The rate would tell us that government is not
interested to go on a borrowing binge.” The Bangko
Sentral ng P
il
ipinas
has reported that gross international reserve (GIR) stood
at $48.4 b
il
lion
as of end-June, a record-high, saying that this would be
enough to cover nine months’ worth of imports. The BSP
also projected the GIR to reach $50 b
il
lion,
mainly from remittances of overseas F
il
ipinos.
As the nation continues to await the reaction of the
domestic and foreign investors to the State of the Nation
Address (Sona) of President Benigno Aquino III on July 26,
Buenaventura
said t expectation was high on the influx soon of foreign
investments, especially on agribusiness processing in
Mindanao
,
in the next few months. So far, the Bureau of Treasury
continues to bank on its treasury b
il
ls
and sovereign bonds, which was getting favorable reception
despite the uncertainty and anxiety in the Euro bond
crisis st
il
l
hitting most of European economies. (businessmirror.com.ph)
GENERAL
ECONOMY
The
Aquino administration is realigning funds to support this
year’s fiscal program and possibly even lower the
government’s deficit spending. “As we intend to keep
our budget deficit cap within programmed [P325 b
il
lion],
we are likewise inclined to pull out the funds given to [government]
departments, agencies and instrumentalities that have yet
to be spent on the programs set [by the Arroyo
administration],” Budget and Management Secretary
Florencio Abad told reporters. He earlier said the Budget
Department could realign about P100 b
il
lion
of the unut
il
ized
funds out of this year’s P1.54-tr
il
lion
budget. These include money set to be released to
government agencies after their performance review is
conducted, funds for maintenance, operating and other
expenses, and capital outlay. Abad said President Benigno
Aquino III could decide on the realignment of funds to
finance his priority programs or declare them as savings
to trim the budget shortfall estimated at P325 b
il
lion
this year. (manilastandardtoday.com)
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