ECCP Factsheet

 POLITICS

Senior government officials and European diplomats held a frank, constructive and friendly discussion over a luncheon at the Department of Foreign Affairs. Foreign Affairs Secretary Alan Peter Cayetano thanked the EU’s continuous support with the Philippines over the years. Ambassadors from the EU delegation, Germany, Hungary, Spain and Sweden including the heads of the development cooperation and trade section were invited. In addition, the government pledges to build bridges with the bloc and enhance cooperation. The guests also agreed to maintain open dialogue to discuss and resolve specific issues.

Executive Secretary Salvador Medialdea signed, by authority of the President, Executive Order 27 directing all government agencies and local government units to align their respective programs and budgets with the Philippine Development Plan (PDP) and Public Investment Program (PIP) for 2017-2022. PDP is the first medium-term development plan anchored on the long-term goals envisioned at the Ambisyon Natin 2040 inclusive development blueprint whereas the PIP contains priority programs to be implemented by the government based on the submissions of government agencies and government-owned and -controlled corporations (GOCCs).

Around six million Filipinos earning P250,000 and below is set to pay zero personal income tax (PIT) after House Bill 5646 or the Tax Reform for Acceleration and Inclusion (TRAIN) Act was passed overwhelmingly in the House. Under the TRAIN Act, the first package of the administration’s Comprehensive Tax Reform Program (CTRP), compensation earners with monthly income of P21,000 and below are exempt from PIT once the bill was signed into law. According to the Finance Secretary Carlos Dominguez III, the measure will cut down poverty rate to 14 percent by 2022 uplifting 6 million of the country’s population and achieving a middle-income status.

 BUSINESS

Opportunities for micro, small and medium enterprises (MSMEs) to access the high-end local consumer market began last month when the Department of Trade and Industry (DTI) launched its Go Lokal! Stores. Entrepreneurs who’d like to take part with these concept stores should offer a never-been-in-the-market line of products or undergo product development training with specialists from the Design Center of the Philippines.

SM Prime Holdings Inc. became the first Philippine company to reach P1 trillion in market capitalization. The historic breach was reached after the Sy family strategically integrated all its major property businesses under SM Prime in 2013. According to a statement, the move increased efficiencies in operations and revenue in enhanced shareholder value and also allowed SM Prime to pursue larger projects. Ayala Land Inc. comes in second (P608.14 billion), while Megaworld Corp., placed third (P146.36 billion).

 ECONOMY

The Department of Trade and Industry’s Bureau of Philippine Standards (DTI-BPS) drafted a memorandum circular (MC) changing the procedures and expanding the sampling size of steel products to be imported. Under the MC, the sampling size shall only be determined once the sampling lot size and general inspection level III code letter is identified. The proposal will amend Philippine National Standards (PNS) 49:2002, PNS 211:2002, and PNS 657:2008 to be in line with rules set forth by the International Organization for Standardization (ISO).

Data released by the Bureau of Internal Revenue (BIR) shows the revenue agency missed again its collection target for the month of May shoring up P157.365 billion, 3.44 percent more from the same period of last year’s take but still 10.12 percent short of the P175.088 billion target. BIR attributed the shortfall due to “non-BIR operations” consisting of final withholding and documentary stamp taxes on government securities transactions. Meanwhile, the Bureau of Customs (BOC) collected 3.4 percent more than its P38.28 billion target for the same month.

Cornell University, INSEAD Business School, and the World Intellectual Property Organization released the tenth edition of the Global Innovation Index (GII) report this early June where the Philippines placed 73rd, one place higher from last year’s ranking. According to the report, the country, along with other New Asian Tigers—such as Indonesia and Vietnam—saw improvements in the information and technology (ICT) sector but it also recognized the lack of investments and attention to research and development including patenting levels that still drags the country to the bottom spot. Switzerland rankss first globally and Singapore tops among the emerging Asian economies.

 INVESTMENTS

Government officials and representatives from the Export-Import Bank of Korea (KEXIM) held a consultation earlier this month to set an agreement of the bank’s willingness to extend USD1 billion in concessional loans between 2017 and 2022. The bank offers to finance key sectors such as transport, information and communications technology (ICT), and infrastructure as South Korea relatively has an outstanding performance in these sectors. Moreover, the bank is willing to assist in policy recommendations and pre-investment activities with the government’s projects through its other cooperation programs and facilities. Both parties agreed to finalize the terms by August.

Foreign direct investments (FDI) continue to pour inside as the Philippines ranked 10th overall in the newly published World Investment Report 2017 by the United Nations Conference on Trade and Development (UNCTAD). In addition, the country is the second top destination for FDI in the Southeast Asian region posting more than 60 percent growth to a new high of USD8 billion last year.

 INFRASTRUCTURE

Vertex Tollways Development, Inc. formally opens the NAIA Expressway Phase II project (NAIAx) at the start of the month. It is expected that the 4-lane and 7.75-kilometer expressway will benefit around 80,000 travelers per day and will reduce travel time from the South Luzon Expressway (SLEx) to NAIA from one hour to 20 minutes. In 2013, the government awarded the contract to San Miguel Corporation’s (SMC) infrastructure arm with a price tag of P20.45 billion.

The National Economic and Development Authority (NEDA) Board’s Investment Coordination Committee approved four major infrastructure projects with an estimated cost of P541.58 billion. The following projects are the Cavite Industrial Area Flood Risk Management Project (P9.89 billion), Tagum-Davao-Digos segment of the Mindanao Railway Project (MRP) (P35.26 billion), North-South Railway Projects (NSRP) – South Line (P285 billion), and the Malolos-Clark Railway Project (MCRP) (P211.43 billion). The board also extended the OPEC Fund for International Development loan for the Department of Public Works and Highway’s (DPWH) Road Improvement and Institutional Development Project for two more years.

The National Privacy Commission (NPC) announced it will put up a Data Privacy Council by August, five years after Republic Act No. 10173 or the Data Privacy Act was signed into law. According to the commission, the council will be composed of representatives from various sectors that will oversee dissemination and compliance practices of different industries as against privacy standards set by the commission. Aside from this, NPC has plans to implement a Data Protection Officer (DPO) certification, get an “Adequacy Status” comparable to some European countries and join the APEC Cross Border Privacy Rules (CBPR) initiative.

Transportation Undersecretary for Aviation Manuel Antonio L. Tamayo announced the government has programmed around P600 to P700 million for the restoration of the airport in Sangley Point, Cavite to divert some of the general aviation flights and commercial turboprop operations currently clogging up Ninoy Aquino International Airport’s (NAIA) slots. Sangley’s rehabilitation will go forward even the government continues to deliberate two unsolicited proposals for the construction of replacement airports south of the country’s congested capital.

 ENERGY

Manila Electric Co. (Meralco) customers will receive a 25 centavo refund per kilowatt-hour (kWh) in their monthly billings for June, July, and August after the company announced it will be complying with the Energy Regulatory Commission’s order last month for the distribution utility to refund its customers of the P.69 billion worth of overcharge collected in the past three years.

Speaking at an energy sector forum hosted by General Electric Philippines, Inc. earlier this month, Senator Sherwin T. Gatchalian, chair of the Senate Committee on Energy, proposed to make all future Energy Regulatory Commission (ERC) meetings open to the public. The senator also proposed the creation of special support desks to educate consumers as well as spell out the responsibilities of the commission’s leadership.

ENVIRONMENT

The Environmental Management Bureau (EMB) announced knowledge products from the EU-SWITCH Policy Support Component Project will be disseminated nationwide to enhance environmental awareness and promote sustainable Philippine development. These materials in the form of leaflets, comic books, lesson guides, and e-books will be given to the Department of Environment and Natural Resources (DENR) and the Department of Energy (DOE), which will then disseminate to the education agencies for possible curriculum integration and to other stakeholders.

The Department of Environment and Natural Resources (DENR) will allocate P34 million for a two-year water resource inventory to identify and protect watersheds, including underground aquifers, against destructive development such as illegal mining. A detailed map will be produced once hydrologists and geologists finish scouting various areas of the country. Consequently, these outputs will be distributed to local government units and private-sector users.

 AGRICULTURE

Thirty sites in Metro Manila are slated to be designated as communal vegetable gardens after the Department of Agriculture (DA) launched the Urban Agriculture-Pagkain Para sa Masa, an urban gardening program which will create small neighborhood farms to grow safe and fresh local produce. The department also eyes to expand to mushroom culture, hydroponics, and aquaponics as well as including feeding programs.

East-West Seed (EWS) urged the government to allocate more funds for high-value crops (HVC) to slowly increase domestic production, boost vegetable growers’ productivity, and slash off overreliance on imported crops. At a news briefing later this month, EWS cited a Euromonitor International report on fresh fruits and vegetables in the Asia Pacific where the country’s share in the regional vegetable market stands at USD240 million, lagging behind Japan, Vietnam and Indonesia. Moreover, EWS called on the Department of Agriculture to pay more attention to HVC development instead of solely focusing on rice and livestock.

HEALTHCARE

The 5th HPV (human papilloma virus) Summit was recently held at the Manila Diamond Hotel with a theme “Making a Cervical Cancer-Free Philippines a Reality: A Multi-Stakeholder Approach Towards Comprehensive Cancer Prevention and Control”. The event was organized by the Cervical Cancer Prevention Program in the Philippines (CECAP), the Department of Health (DOH), and supported by private sector entities. Some of the topics discussed are the burden of cervical cancer and other HPV-related diseases; the importance of HPV screening and vaccination; and the shift from community-based to school-based approach.

The House of Representatives took another step forward in ensuring free basic medicines to less fortunate citizens with the filing of House Bill 5808, otherwise known as the “Free Basic Medicine Assistance Act”. HB 5808 establishes a Free Basic Medicine Assistance Program which will provide for free medicines to indigent members of the society such as the poor, malnourished elderly, women, children and persons with disabilities.

Tracking in-home shoppers of 3,000 Filipino households for the past three years, consumer behavior analytics firm Kantar Worldpanel reports that junk food consumption increased by 13 percent from the P4,524 average spending in 2015 to P4,904 this year. The category which posted the highest shares include biscuits, snacks, instant noodles, spreads, ice cream, cheese, pasta, and rice soup. Unsurprisingly, children aged 3 to 12 registered the largest portion of consumers of snack food in the country making up 41 percent of the total population.

 TOURISM

Dusit International will become the first international brand resort and hotel to arrive in La Union after the ceremonial groundbreaking of the dusitD2 Waves Resort in the surfing capital of Northern Luzon. The eight-storey resort is located within the 7.5-hectares and Malibu-inspired Waves Beach Club and Residences resort community. The “investment-friendly” province considered two factors prior to the project’s commencement: environmental protection and safety concerns; and job opportunities which the local government hopes to attract 200 jobs during construction and 300 direct employment once completion.

Flag carrier Philippine Airlines (PAL) allocates USD80 million (P3.96 billion) to retrofit eight of its Airbus A330 fleet due to growing demand for premium- and business-class flight services. PAL announced it has already completed reconfiguring one of its aircraft and will complete the remaining seven by December this year. These refurbished planes will be used for its international flights with routes to Honolulu, Melbourne, Sydney, Singapore, Haneda, Narita and Osaka. The airline giant also targets to add another star to its Skytrax rating by year-end which currently has three.

Around 1,000 delegates from 78countries visited at the recently concluded 6th United Nations World Tourism Organization (UNWTO) International Conference on Tourism Statistics in the country. During the four-day conference, the “Manila Call for Action” was adopted which will serve as a framework for measuring tourism in line with the United Nations (UN) sustainable development goals (SDGs) by 2030. The country will be the pilot area for the plan along with Fiji.

Cebu Factsheet June 2017

CEBU, SEES RIGHT TIME FOR BUSINESS NOW.

Department of Trade and Industry (DTI) Cebu provincial director, Ma. Elena Arbon, together with trade officials calls on business owners to take advantage of present opportunities wherein business mood is good and business confidence is up as the government continues to offer programs for entrepreneurial development. The government targets to achieve full employment at 5 percent rate by creating 7.5 million more jobs mainly in sectors like manufacturing, construction, tourism, IT-BPM, transportation and logistics, and retail trade by 2022.

CEBU REMAINS FEASIBLE FOR KPO FIRMS.

Property and research firm, Colliers International Philippines, named Cebu as the most practical choice for Knowledge Process Outsourcing (KPO) firms outside Manila. Colliers sees more Metro Manila-based KPO to set up operations in Cebu given the need for a redundant site for back-up operations in Manila. Adequate supply of skilled college graduates with degree in engineering, information technology, math and medical-related degree together with a high level of urbanization driven by infrastructure developments has positioned Cebu as a top KPO destination. The influx of KPO firms has propped up office space demand with Cebu Business Park and Cebu I.T Park.

HOUSE COMMITTEE APPROVES NORTHERN CEBU ECOZONE BILL.

Cebu Province 4th District Representative Benhur Salimbangon said the House committee on trade and industry recently approved his proposal to create an economic zone and tourist destination in Northern Cebu. The bill aims to decongest Metro Cebu’s trade activities and spark economic growth in Northern Cebu. Once turned to law, investors can avail of tax holidays for five years and tax-free importation of equipment and raw materials provided that investors are to hire only local employees and pay local taxes like business permits, among others.

PROPERTY SECTOR SEES LIGHT IN CEBU.

As Philippine government undertakes its massive infrastructure program to create thousands of jobs and spur economic activity, real estate is confident to become the next big thing in the country. Owner and founder of Leuterio Realty and Brokerage Inc., Anthony Gerard Leuterio, said that prospects are bright for property sector under “build, build, build” plan of the government. Infrastructure projects attract employment, and more jobs mean more real estate activity. Among the infrastructure projects in Cebu that are seen significant to economic growth are the new Airport terminal that is set to be operational by June 2018, the Cebu- Cordova bridge, the new Cebu International Port in Consolation, and transportation projects including an expressway connecting Naga City in the south and Danao City in the north.

POTENTIAL EXPORT ON LOCAL CACAO.

Department of Science and Technology (DOST) chief for industrial technology development institute, Nelia C. Florendo, encouraged Cebuano entrepreneurs to gain from the huge trade of cacao beans in local and export market. The good variety and texture of cacao beans in the country when fully maximized could uplift the livelihood of the farmers. Popularity of coffee shops and benefits of cacao beans helped its demand to increase tremendously. With the local demand of 30, 000 tons, the Philippines produce 10, 000 to 12, 000 metric tons of dried cacao beans.

MCIA TERMINAL 2 MAY GET AHEAD OF SCHEDULE.

With 60 percent completion, Mactan Cebu International Airport (MCIA) Terminal 2 is projected to get ahead with its target date on June 2018. The new terminal will serve international flights with eight aerobridge-equipped aircraft parking stands and will feature 48 Check-In counters that are expandable to 72. The car park can accommodate 550 and is expandable to 750. When completed, the airport facility is expected to increase 8 million passengers per annum. Economist Claro DG Cordero Jr. of Jones Lang de LaSalle Philippines sees an overwhelming economic boost for Cebu on the opening of the Terminal.

CEBU LUXURY RESORT STILL ENJOYS HIGH OCCUPANCY RATE.

Despite the negative publicity of security threats in the country, Plantation Bay Resort and Spa reported that foreign guests and Filipinos seemed untroubled by the country’s vulnerable security state. Though some opted for re-scheduling and cancellation, but the number of bookings remains satisfactory. General Manager of the resort, Efren Belarmino, said that Cebu has a huge potential to draw in higher spender tourists given the proper link and intensified promotions. The influx of more foreign visitors from different countries is anticipated with the opening of the Mactan Cebu International Airport Terminal 2 next year.

SPORTS TOURISM DEVELOPING IN CEBU.

Sunrise Events Inc. (SEI) general manager, Princess Galaura said Cebu has gained the reputation of being the premier destination in the country for sports tourism during the Cebu Tourism Summit. The Ironman competitions in Cebu, Ironman 70.3 Philippines and Ironman 70.3 Asia-Pacific Championship, held last year earned a total revenue of P645 million which boosted the tourism performance of the province. Cebu’s infrastructure which includes the international airport, five- star hotels, and road network makes it feasible for Ironman events.

Davao Factsheet June 2017

BIZ LEADER ASKS AIRLINES TO MAKE DAVAO CITY HUB FOR INT’L FLIGHTS

City Chamber of Commerce and Industry Inc. (DCCCI) trustee Arturo Milan has asked airline companies to make the Davao International Airport, also known as the F. Bangoy International Aiport, the hub for international flights in Mindanao to decongest traffic at the Ninoy Aquino International Airport (NAIA).

Milan told a press briefing Friday that NAIA must be devolved of some international flights and distribute these to provincial airports like Cebu and Davao because the congestion in the airport in Manila results in flight delays, causing discomfort to passengers.

He said it is not practical to place all international flights in NAIA when some destinations are closer to Davao City than Manila, like Australia, Palau, and other member countries of the Association of Southeast Asian Nations (ASEAN).

SilkAir flies directly to Singapore from Davao City.

TOP EXECS FROM ASIA AND EUROPE TO PARTICIPATE IN DAVAO’S INVESTMENT CONFERENCE

Top executives from Asia and Europe will participate in the two-day Investment Conference (iCon) on July 21 to 22, 2017 at the SMX Convention Center Davao.

Arturo Milan, chair of the Davao iCon 2017 and trustee of the Davao City Chamber of Commerce and Industry Inc. (DCCCII), said the Office of the President has committed to bring in 30 to 40 big Chinese investors to the two-day gathering.

Aside from Chinese businessmen, he said there will be 24 Indonesian and 15 Japanese investors who have already confirmed attendance and signified interest to participate in the possible business matching with some local business players in the Davao Region.

One of the prominent business personalities who will keynote this year’s Davao iCon will be AirAsia Group chief executive officer Anthony Francis “Tony” Fernandes who will speak about the “Air Linkages: Davao from a growing number of destination.”

Milan added that this year’s investment conference will focus on infrastructure and connectivity, agriculture, tourism, and manufacturing.

President Rodrigo R. Duterte will also grace the opening day of the two-day gathering where 200 business executives have so far confirmed to join. But he said they are expecting about 700 participants.

Some of Duterte’s economic managers will also be present, including, among others. Finance secretary Carlos G. Dominguez, Transportation secretary Arthur Tugade, and Trade secretary Ramon Lopez.

MARTIAL LAW TO DAMPEN DAVAO CITY’S ECONOMIC PERFORMANCE

The city’s economic performance will experience a slowdown for the rest of the year owing to the state of martial law in Mindanao, Lemuel Ortonio, chief of the Davao City Investment Promotion Office (DCIPC), said Friday.

But Ortonio expressed optimism the city, which posted an slight increase in investments in the first quarter of 2017, will recover.

He said that on May 30 he met with a group of Chinese investors and noted that their interest to put up parks, accommodation and tourism facilities remained “high”.

He claimed that the declaration of martial law in Mindanao did not bother the prospective investors at all.

“I don’t think there will be much of an impact. It’s still normal in the first few days or even in first few weeks. In the long run, I don’t think it will have an impact, we know the national government is doing their best to address the situation,” he said.

Ortonio added his office has not received reports of investments being canceled.

INVESTORS UPBEAT ON DAVAO, MINDANAO POTENTIAL DESPITE MARTIAL LAW

Both international and local investors remain bullish on the high potential of Davao and Mindanao.

Lars Wittig, country manager of Regus Philippines, the world’s largest provider of flexible workspace solutions, said they still see a very high demand in terms of working spaces to both local and foreign companies.

Wittig told reporters at a news briefing on Friday, July 7, at the Topaz Tower, Lanang here, that in June alone, the Regus Davao branch located in Damosa I.T. park here had seven new clients and 48 new workstations signed up for. The office currently holds an 82 percent occupancy rate.

Wittig added that out of the four clients opt for renewal, three of it renewed contract.

“Our global goal is to be on 70 percent and this is 75 percent (renewal rate). It’s very high renewal rate, plus we keep having very high demand and very high number of new customers signing up and that was June alone,” Wittig said.

RDC-11 EYES 11.5 PERCENT GDP IN DAVAO REGION BY 2022

The Regional Development Council in Region 11 is targeting an 11.5 percent gross regional domestic product by the time it completes the five-year Davao Regional Development Plan.

The RDC 11 officially launched the DRDP 2017-2022 on Friday, July 7 at the SMX Convention Center in Lanang here.

National Economic Development Authority Regional Director Maria Lourdes Lim, who also serves as vice chairperson for RDC 11, said the first medium term plan of the four medium term plans under the Duterte administration targets to reduce poverty by three points from 16.6 percent in 2015 to 13.6 percent by 2022, and to increase the gross regional domestic product from 7.9 percent to 11.5 percent.

“We believe this is achievable. (This is) anchored on agri-industrial development and the Build, Build, Build program,” Lim said.

Lim said the GRDP growth over the past years only reach 5 to 6 percent annually. She said in 2016, the GRDP reached 9.4 percent.

RDC-DAVAO ENDORSES 5 SITES FOR NEW AIRPORT

FIVE sites are being looked into for the establishment of an additional airport in Davao Region. During the press conference on the Davao Regional Development Plan 2017-2022 at the SMX Convention Center, SM Lanang Premier, Davao City, Maria Lourdes D. Lim, regional director of the National Economic and Development Authority-Davao and Regional Development Council (RDC)-Davao vice chair, said the sites that are being looked into the possible establishment of a new airport in the region are Tagum City, Panabo City, and Island Garden City of Samal in Davao del Norte; Callawa, Davao City bordering Panabo City; and Sta. Maria in Davao del Sur.

"Building another airport in the region is still in the drawing board of the RDC-Davao and we have passed a resolution last year endorsing the five sites for a future international airport that would serve the whole region," she said.