Philippine Weekly Update

16 - 22 July 2016

July 29, 2016Philippine Weekly Update

POLITICS

The passage of a freedom of information (FOI) law remains a priority of the Duterte administration even if the President is set to issue an executive order implementing its provisions within the executive branch. 

BUSINESS

Shell Petroleum Corp. can now support growing fuel and energy demand in the Visayas and Mindanao regions, as well as generate savings, with its newly-inaugurated $80-million import facility in this city.

The Information Technology and Business Process Management (IT-BPM) industry is eyeing an ambitious target of doubling revenues and hiring at least a million more direct employees over the next six years. 

The Department of Trade and Industry (DTI) wants its budget doubled next year to speed up the development of micro, small and medium enterprises (MSMEs) in the country. DTI is seeking a budget of more than P6 billion for 2017, almost double its P3.7-billion allocation this year.

PLDT is expanding its data center footprint through 2017, including the building of its first facility in Davao. It would have 10 data centers by 2017 with a capacity of 9,000 racks, up from the current six data centers, increasing its total investment in the data center business to P10 billion.  Apart from Davao, it will open new data centers in Makati City and the Clark Freeport Zone in Pampanga province.

Isuzu Philippines sales in the first six months of 2016 grew 30.4 percent to 13,258 units from 10,169 units in the same period last year. Its entire product range registered growth in the first half of the year, with deliveries of heavy-duty Category V trucks posting the highest year-on-year jump of 833 percent. 

ECONOMY

Economic growth in the Philippines is seen boosting corporate earnings. In the first quarter of 2016, domestic output rose by 6.9 percent from the previous 6.5 percent.

S&P Global Ratings expects the Philippine economy to grow between six and 6.5 percent over the near term after a smooth transition of power to the Duterte administration. The country’s GDP is expected to expand 6.1 percent this year, 6.3 percent next year, and 6.2 percent in 2018. The economic managers of President Duterte lowered the GDP growth target to a range of six to seven percent instead of 6.8 to 7.8 percent. 

INVESTMENTS

Investment pledges approved by the Board of Investments (BOI) more than doubled in the first half of the year as sustained investor confidence in the new government led to more power and transportation infrastructure projects. BOI data showed approved investments reached P186.51 billion in the first six months of 2016, a 103-percent jump from the P92.02 billion generated in the same period last year. 

INFRASTRUCTURE

The Department of Transportation and Philippine Ports Authority (PPA) are reviewing the Davao Sasa Port Modernization project as the new government intends to pursue the deal.

The Duterte administration’s plan to jack up infrastructure spending to as much as 7 percent of the economy by 2022 would bring about a "golden age of infrastructure" in the next six years. 

According to Budget Secretary Benjamin E. Diokno, the government will consider "hybrid" public-private partnership (PPP) deals for future infrastructure projects under which it will undertake construction while operations will be entrusted to the private sector.  

ENERGY

The Philippines cannot rely completely on renewable energy sources to provide its electricity requirements at this point in the country’s level of economic development, even if it committed last year to cut its carbon emissions by a hefty 70 percent by 2030. 

According to Energy Secretary Alfonso G. Cusi, the country will implement an energy policy that meets its specific economic requirements to ensure energy supply security, considering that developing countries like the Philippines have low carbon emissions. 

Government programs to promote locally available, renewable energy (RE) sources are changing the energy investment landscape. Initiatives like the Feed-in-Tariff (FIT) incentives and an ongoing review of the country’s fuel mix policy in favor of RE may have even started a trend of increasing clean energy investment among locally traded energy companies.

AGRICULTURE

According to Agriculture Secretary Emmanuel F. Pinol, the Philippines should be rice self-sufficient in the next two years to be ready against the adverse effects of climate change. 

The regional Department of Agriculture (DA) plans to embark on a P49-million rehabilitation of old cacao trees and to apply appropriate farm technology to manage cacao farms.

The Department of Agriculture (DA) is pushing for the implementation of a new support program that would provide free seeds and other inputs to rice farmers for two cropping seasons starting next year. DA is currently working on the details and arrangements for the initiative, which DA Sec. Pinol described as a top priority and the national government’s rice self-sufficiency program.

TOURISM

The operator of Mactan-Cebu International Airport (MCIA) is in talks with the regional affiliate of Thai Airways International Public Co. Ltd. for the launch of daily flights between Cebu and Bangkok. The new service is targeted for launch by November this year. If it pushes through, Thai Smile’s Cebu-Bangkok service will be the first and only direct service from Visayas to Thailand with a daily frequency.

Cebu Pacific recently announced the launch of three more domestic routes to boost its presence in the Eastern and Western Visayas regions.

Cebu Pacific said it would launch daily flights between Cebu and Ormoc and Cebu and Roxas and four times weekly (Tuesday, Thursday, Saturday and Sunday) between Cebu and Calbayog starting Nov. 19 this year. It would be using the ATR 72-500 aircraft.