Philippine Weekly Update

28 May - 3 June, 2016

June 08, 2016Philippine Weekly Update

POLITICS

The House of Representatives has approved on third and final reading a bill seeking to prohibit discrimination against a person by reason of age, upon hiring for and during employment. House Bill 6418, which is a consolidation of 10 measures, seeks to promote equal opportunities in employment for everyone and support employment of individuals on the basis of their abilities, knowledge, skills and qualifications rather than their age. Tarlac Rep. Susan A. Yap, principal author of the bill, remains hopeful that the bill will be passed into law in the remaining days of the 16th Congress as the Senate concurred with the House version of the measure. HB 6418 covers all employers, labor contractors, sub-contractors and labor organizations, the government and all its branches, subdivisions and instrumentalities, all government-owned and controlled corporations and government financial institutions as well a non-profit private institutions or organisations.


BUSINESS

San Miguel Brewery Inc. expects to gain P12 to P15 billion in net profit this year on the back of a double-digit expansion in volume growth. According to Ramon S. Ang, SMB chair and president of San Miguel Corp,. the P4 billion net profit chalked up in the first quarter was very good, considering this was not yet the peak season. As such, full-year earnings could reach P12 to P15 billion compared to last year’s P13.5 billion. Like other liquor companies, SMB is unfazed by the nationwide liquor ban proposed by president-elect Rodrigo Duterte, noting that the company’s volume in Davao City had not gone down despite the prevailing liquor ban.


ECONOMY

President Aquino signed the Customs Modernization and Tariff Act (CMTA) into law as Republic Act (RA) 10863, which overhauls the 38-year-old Tariff and Customs Code passed in 1978. The reform forms part of a “wish list” of policy reforms submitted by Malacañang and business groups to the 16th Congress.

Among the planned upgrades for the Bureau of Commission (BOC) include the full electronic processing of all documents, forms, and receipts, alongside streamlining methods for the examination and valuation of imports and exports. The new law would also facilitate a shift in the bureau’s focus to trade facilitation rather than on revenue collection, in accordance with the Philippine commitment under the revised Kyoto Convention to improve the ease of international trade. 


INVESTMENTS

According to the Philippine Statistics Authority (PSA), foreign pledges approved by the government’s seven Investment Promotion Agencies (IPAs) rose 19.2% in the first three months to P26 billion from the previous year’s P22 billion. The seven IPAs include the Board of Investments (BoI), Philippine Economic Zone Authority (PEZA), Clark Development Corp. (CDC), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan, BoI-Autonomous Region in Muslim Mindanao (BOI-ARMM) and Cagayan Economic Zone Authority (CEZA). The first-quarter increase was brought about largely by commitments with the BOI, which grew by 255.2% to P8.448 billion this year from P2.378 billion last year. 


PROJECT BIDS

The LRT Line 6 Project is a proposed 19 kilometer railway from Niyog, Bacoor (the terminus of the LRT 1 CAVITEX extension) to Dasmariñas City. The proposed Right-Of-Way alignment is along the Aguinaldo Highway with 7 stations, namely: (1) Niyog, (2) Tirona, (3) Imus, (4) Daang Hari; (5) Salitran, (6) Congressional Avenue, and (7) Governor’s Drive. According to Public-Private Partnership (PPP) center, the project will improve passenger mobility and reduce the volume of vehicular traffic in the Cavite area by providing a higher capacity mass transit system. It also aims to spur economic development along the extension corridor. Under a 30-year concession agreement, the private partner will finance, design, construct, operate and maintain, and procure the rolling stock for the LRT system. The DOTC already extended the deadline from May 2 to June 2 upon the request of prospective bidders.


INFRASTRUCTURE

The Philippine Stock Exchange has drafted a new framework that seeks to encourage the listing of companies driven by infrastructure projects under public-private partnership (PPP). It is the first step towards the opening of the equities market to support the growth of big-ticket PPP-driven infrastructure projects in the country. According to Roel Refran, PSE chief operating officer,

they recognize the need for PPP companies to have funding options available to them and hope that by enhancing their listing rules for infrastructure companies, PPP firms will consider raising capital through the stock market. 


ENERGY

Manila Electric Co. is considering having two subsidiaries to handle its renewable energy (R.E.) projects. According to Oscar S. Reyes, Meralco president and CEO, an initial 20-megawatt (MW) rollout of solar power projects would be undertaken via newly established unit MSpectrum and that Meralco might carve out its other R.E. businesses under a new subsidiary. 

Meralco PowerGen Corp. (MGen) is presently focused on coal-fired power projects. The Meralco group is actively moving into R.E. because it has addressed long-term baseload requirements through partnerships and through MGen’s coal-fired power plant projects, which are suitable for 24/7 operations. 

President Aquino has signed a resolution for an urgent comprehensive review of the country’s energy policy aimed at cutting down the nation’s dependence on coal and to facilitate the faster shift to renewables as sources of energy. The major energy policy review will be done within six months, to be led by the Climate Change Commission (CCC). The resolution aims to put in place a clear government policy on coal-fired power plants, which is the biggest source of man-made carbon emissions as it accounts for about 35 percent of global greenhouse gas (GHG) emissions. Under the resolution, the Department of Environment and Natural Resources (DENR), the Department of Energy (DOE) and the National Economic Development Authority (NEDA) are urged to harmonize policies and regulations on new and existing coal-fired power plants and assess their impact on the environment. The policies and regulations should also include low-carbon development and climate change adaptation and mitigation strategies in the formulation of all national and local development plans.


ENVIRONMENT

The Department of Environment and Natural Resources (DENR) has imposed a new regulation on the processing and issuance of Environmental Compliance Certificate (ECC) for new mining operations. In the memorandum circular No.006 of DENR, only the ECC application of an entity or corporation whose name appear on the government-issued Mineral Production Sharing Agreement (MPSA) or the Financial or Technical Assistance Agreement (FTAA) shall be processed by the agency.

No new application for an ECC shall be processed and issued in the name of any applicant unless the same applicant shall be the entity or corporation as reflected in an MPSA and/or FTAA.  The new requirement “shall apply to all new applications for ECC for the operation of sand and gravel or industrial sand and gravel duly approved by the Provincial Mining Regulatory Board (PMRB) and/or MGB (Mines and Geosciences Bureau) Regional Office, respectively.” According to Ramon Paje, Environment Secretary, the new regulation aims to ensure increased transparency and accountability in the mining sector and the consistency in the implementation of the country’s Environmental Impact Statement (EIS) System and the Philippine Mining Act of 1995.


AGRICULTURE

President-Elect Rodrigo R. Duterte will spend more on the development of the agricultural sector, to surpass the record spending of the Aquino administration. 

According to the incoming Budget and Management Secretary, Benjamin E. Diokno, they will support agriculture-enhancing infrastructure projects such as farm-to-market roads which reduce farmers’ costs in transporting produce.

The next administration also aims to channel more funds into research and development, interventions such as seed and fertilizer, and in boosting manpower in the agriculture sector.  


HEALTHCARE

The Ayala Land Inc. (ALI)-Mercado partnership unveiled a 105-bed general hospital at the Altaraza Town Center in San Jose Del Monte, Bulacan. It is the first brand-new, full-service hospital under the QualiMed healthcare network in Luzon. The establishment of QualiMed Hospital on Ayala Land’s 100-hectare Altaraza is seen to complete and enhance the quality of life in the Ayala Land development and the communities within and near Bulacan. According to Javier Reyes, head of ALI Capital Corp., QualiMed Hospital  has the quality service, ambience and medical capabilities of a premier city hospital, but at a more affordable price point. 


TOURISM

The Philippine Department of Tourism (DOT) took over the London Waterloo Station recently as part of its Visit Philippines Again 2016 campaign. The DOT gave Londoners samples of the country’s beauty through a special pod showing a 360-degree view of some of the Philippines’ more popular tourist spots. 

Rockwell Land Corporation, the property development arm of the Lopez group of companies, is allotting P10 billion to P12 billion for its capital expenditures, as it expands its hotel and leisure business amid the upbeat tourism growth prospects of the country. In its annual stockholders’ meeting, the Rockwell Land unveiled the planned developments of Aruga Hotels, a collection of luxury resort hotels to be built within Rockwell Center and on Mactan Island, Cebu. According to Rockwell president, Nestor J. Padilla, the firm is building Aruga Hotel, the first urban resort-themed hotel in Makati. It will feature a 1.400-seater ballroom, speciality restaurants, a fitness gym, an executive lounge, and meeting rooms. The 280-room boutique hotel is expected to be complete by the first half of 2019.