Philippine Daily Inquirer, 22 September 2013
Riza T. Olchondra
Philippine trade officials and business leaders will be in Europe next month to try to translate marketing and promotions efforts into new investment pledges and partnerships.
Trade Undersecretary Ponciano Manalo told reporters that a high-level business delegation would be in London (hosted by UK Trade Minister Lord Stephen Green) on Oct. 2 and 3.
There will also be trips to Scandinavian countries and other sites in Europe with Philippine Economic Zone Authority (Peza) director general Lilia de Lima joining the rounds.
â€śThe focus is investment. We will have a big delegation going there,â€ť Manalo said. â€śEurope is undergoing financial difficulty but that doesnâ€™t last forever. So we want to establish ourselves early,â€ť he added.
About 23 firms and/or industries are expected to be represented.
Officials of the IT and Business Process Association of the Philippines (ITBAP); oil firm Shell; banks HSBC, Standard Chartered Bank, China Bank, and Planters Development Bank (through its chair, Ambassador Jesus Tambunting); British American Tobacco; Unilever; and airline firms will likely join, Manalo said.
Also in the London program are talks by Finance Secretary Cesar Purisima, Bangko Sentral ng Pilipinas Deputy Governor Diwa Gunigundo, Public Private Partnership Center executive director Cosette Canilao, and ITBAP president and CEO Jose Mari Mercado.
Besides targeting UK-based financial services firms, the Philippines is also looking for a British investors in automotive parts as well as animation.
After the UK meetings, Manalo will join at least 15 Philippine food exhibitors in Germany for the Anuga Trade Fair on Oct. 4 and 5.
He will also be on a roadshow in Stockholm, Sweden on Oct. 6 or 7, plus a one-day program in Finland with potential investors.
Meanwhile, Pezaâ€™s De Lima will be going to Copenhagen, Denmark and Oslo, Norway on Oct. 8 and 9.
â€śWe shared the work on four countries in the Northern (European) area. Her focus is on information technology. Europe asked us to go and pitch for the Philippines so we are acceding,â€ť Manalo said.
Besides manufacturing investments that could boost merchandise exports, the Philippine government is also seeking support for services, such as IT and animation work.
The services sector accounts for about a fifth of total exports and is seen to cushion the effects of a volatile electronics exports market.
The Philippines is aiming for at least a single-digit expansion in total exports (including merchandise and services) from last year despite volatile demand for electronics, according to Department of Trade Industry-Bureau of Export Trade Promotion director Senen Perlada, who is also the executive director of the Export Development Council.
11 September 2013
The PPP Governing Board, created through Executive Order No. 136, met for the first time last 06 September 2013 at the PPP Center. The Board is the overall policy-making body for all PPP-related matters, including the Project Development and Monitoring Facility. It shall be responsible for setting the strategic direction of the Philippine PPP Program and creating an enabling policy and institutional environment for PPP. Secretary for Socio-Economic Planning Arsenio Balisacan chairs the PPP Governing Board with Finance Secretary Cesar Purisima as Vice-Chairperson. Other members of the Board include the Secretaries of Budget and Management, Justice, Trade and Industry, Executive Secretary and the Private Sector Co-Chairman of the National Competitiveness Council. The PPP Center acts as the Secretariat of the PPP Governing Board.
Business World, 5 August 2013
By Bettina Faye V. Roc
Proposed amendments to Republic Act (RA) 7718 or the Build-Operate-Transfer Law — one of the Cabinet economic clusterâ€™s priority legislative measures — focus on the idea of â€śstrategic national infrastructure,â€ť Finance Secretary Cesar V. Purisima said in an interview.
â€śWeâ€™d like it (the process) to be immune to the vagaries of local rules — like taxation and other policies — as all construction will be local but projects will not just be for localities but for the whole country,â€ť he added.
The Finance chief said the amendments aim to enhance the implementation of infrastructure projects, particularly those under the governmentâ€™s centerpiece public-private partnership (PPP) program.
For one, the government wants to include modalities such as joint ventures, concessions, and management contracts into the BOT Law.
â€śRight now, all those are under separate rules. So weâ€™d like to consolidate those under the BOT Law so theyâ€™re all under one regulatory framework,â€ť Mr. Purisima said.
Enhanced provisions on unsolicited proposals will also be included in the proposed amendments.
â€śWeâ€™d like to have the opportunity to convert an unsolicited proposal into a solicited proposal,â€ť the Finance chief said.
â€ś[F]or example, someone submits an unsolicited [proposal] but we like it, we can offer to reimburse the cost of the study and then make it a solicited proposal. Right now we canâ€™t do that,â€ť he explained.
Under RA 7718 and its implementing guidelines, solicited proposals only need the approval of the implementing government agency for the projects to proceed and be bid out.
Agencies are allowed to accept unsolicited proposals for evaluation only if the project involves a new concept or technology or is not part of the priority project list, and does not include a direct government guarantee, equity or subsidy.
The proponent is required to submit a feasibility study and a draft contract, among others. If the proposal is accepted by the implementing agency and eventually approved by the Investment Coordination Committee (ICC), the agency and the proponent will negotiate based on the ICCâ€™s recommendations.
The negotiated contract will be then be used as the basis for a Swiss challenge or projectâ€™s terms of reference.
Under the Swiss challenge system, challengers will be given a chance to submit a comparative or competitive proposal. If the challenger submits a better proposal, the original proponent will be given a chance to match. If no challenge is submitted, the contract is automatically awarded to the original proponent.
The BOT Law amendments, said Mr. Purisima, will go hand-in-hand with proposed changes to RA 8974, otherwise known as the Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and For Other Purposes that is also a priority measure of the economic cluster.
â€śWeâ€™d like to simplify the [right of way acquisition] process also. Anyway the country has the right of eminent domain. The only issue is valuation. But valuation should not hold back projects,â€ť he said.
The government launched the PPP program in 2010 but so far only three projects have been awarded.
The Manila Times, 4 August 2013
By Mayvelin U. Caraballo
Tax collection reforms paved the way for the positive outlook of a Japan-based rating agency for the Philippines, according to the Department of Finance (DOF).
In a statement over the weekend, Finance Secretary Cesar Purisima commended Ratings and Investment Information Inc. (R&I Ratings) in changing its rating outlook for the country from stable to positive, while affirming its investment grade rating of â€śBBB-.â€ť
â€śThe gains of good governance are again recognized by those who monitor world economies, with our tax collection reforms and our landmark sin tax reform law contributing greatly to the positive outlook,â€ť he said.
In its report, R&I cited the efforts of the government to improve fiscal consolidation, by laying out a plan to contain the fiscal deficit to 2 percent of the gross domestic product (GDP) by beefing up its tax collection capacity.
â€śThe fiscal deficit for 2012 was 2.3 percent relative to GDP, a slight increase from 2 percent in 2011, due partly to public investment, whose execution pace returned to a normal level. The 2013 budget targets 2 percent in line with the mid-term plan,â€ť it stated.
However, the ratings agency said that despite the significant increase in public investment in the country, research by the World Bank and other institutions suggests that the level remains insufficient.
It identified the fiscal position of the Philippines as a major constraint, adding that in 2012, tax revenues are only 12 percent to 13 percent of GDP.
â€śR&I positively views the governmentâ€™s leadership in raising the sin tax levied on tobacco and alcohol beverages. Still, reform on the tax code and system aimed at a stronger tax collection capacity and better spending efficiency remains an important issue to be addressed,â€ť it stated.
Earlier, the Bureau of Internal Revenue said that it eyes to raise its tax collection P1.6 trillion by 2015. For this year, the bureau is targeting a tax collection of P1.253 trillion, 17.59 percent higher than the previous yearâ€™s P1.058 trillion.
On the other hand, R&I also said that the political situation in the country had been consolidated after the inauguration of the government led by President Benigno Aquino 3rd in June 2010.
â€śThe political situation in the Philippines has undoubtedly consolidated under the Aquino government. It is not an overnight task, however, to address the issues ranging from lack of infrastructure to the perception of widespread corruption in order to improve the investment climate,â€ť it stated.
It also mentioned that the government significantly restored the peace of western Mindanao, a part of the island which used to ruin the countryâ€™s image.
â€śI commend R&I for noting not just the prudent fiscal management we have implemented under President Aquino, but the great strides we have taken toward lasting peace in Mindanao. With the recent signing of the wealth sharing annex to the Framework Agreement on the Bangsamoro, we have come closer to enshrining perpetual inclusive growth in law for all Filipinos,â€ť Purisima added.
The Philippine Star, 4 August 2013
By Prinz Magtulis
MANILA, Philippines – The Philippines has received a â€śpositiveâ€ť credit rating outlook from a Japan-based debt watcher.
Rating and Investment (R&I) Information Inc., a rating agency under the Nikkei Group of Companies, revised its outlook on the countryâ€™s foreign-currency issuer rating of BBB- yesterday, signaling a possible upgrade in the months ahead.
â€śThe economy of the Republic of the Philippines has started to show strong growth thanks to continued robust consumption driven by remittances from overseas Filipino workers (OFW), coupled with expansions in public investment and exports,â€ť R&I said in a statement.
Finance Secretary Cesar Purisima called the outlook a â€śtimely and balancedâ€ť evaluation of Philippinesâ€™ creditworthiness.
Another credit rater, Moodyâ€™s Investors Service, has just concluded its due diligence for possible upgrade.
â€śThe gains of good governance are again recognized by those who monitor world economies, with our tax collection reforms and our landmark sin tax reform law contributing greatly to the positive outlook,â€ť the finance chief said.
â€śI commend R&I for noting not just the prudent fiscal management we have implemented under President Aquino, but the great strides we have taken toward lasting peace in Mindanao,â€ť he added.
Moodyâ€™s still rates the country one notch below investment grade, at Ba1, which was â€śon review for possible upgradeâ€ť last month.
Fitch Ratings and Standard & Poorâ€™s ratings services have put the Philippines under investment watch.
In June, Japan Credit Rating Agency Ltd. also raised its evaluation of the countryâ€™s creditworthiness to BBB from BBB-, under investment grade.
Now, R&I said it is likely to follow that lead â€śif fundamentals for economic growth are solidifiedâ€ť and once per capita income â€“ a gauge of how much growth has benefited the population â€“ becomes â€śmore promising.â€ť
The Philippine economy became Asiaâ€™s fastest growing in the first quarter after it expanded by 7.8 percent, ahead of the governmentâ€™s six- to seven-percent target for the year.
Last year, the Philippines grew 6.8 percent.
â€śThe Philippines is the only country which has yet to reach per capita GDP of $3,000 among the five founding members of ASEAN (Association of Southeast Asian Nations); at long last, the country sees a clearer opportunity for catching up,â€ť R&I said.
Strong growth has been buttressed by low inflation, which averaged at below-target of 2.9 percent as of the first semester.
Dollars are also coming in, thanks to more than $20 billion in OFW remittances and $10 billion in business process outsourcing earnings each year.
These funds, R&I said, have helped the country build its foreign reserves to $80.728 billion as of the first half, enough to sustain the economyâ€™s progress even if a financial downturn hit the country for a year.
Business Mirror, 25 July 2013
Finance Secretary Cesar V. Purisima on Thursday welcomed the decision by Moodyâ€™s Investor Service putting the countryâ€™s credit standing under review.
The New York-based sovereign credit watcher is the last of three major risk rating agencies to have withheld judgment on whether or not the Philippines deserves a credit upgrade and finally pull the country from the ranks of so-called junk bond issuers.
Countries with credit rating below the triple-â€śBâ€ť or â€śBBBâ€ť category are classified as non-investment grade bond issuers and their IOUs considered junk, indicating an economy whose capacity to pay back loans are deemed risky.
â€śThe status of review for upgrade should be seen as recognition of the positive changes in the Philippine economy brought on by the Aquino administrationâ€™s commitment to good governance. This designation is highly favorable as it signals that there has been undeniable transformation in the Philippine story, and a decision on our rating will have to be made with urgency,â€ť Purisima said in a statement he issued on Thursday.
â€śBy Moodyâ€™s own implied bond ratings, the Philippines has long been one of the most underrated countries in the world, with strength far exceeding our current credit rating. I am confident that as Moodyâ€™s continues to evaluate the Philippines they will see that the foundations for sustained, resilient growth have been laid, with a bright future for us on the horizon. I commend Moodyâ€™s commitment to quick action and look forward to their decision in the Philippines,â€ť Purisima said.
Business World, 18 July 2013
By Diane Claire J. Jiao
Implementation of the CALA Expressway project has been postponed after the government decided to scrap its official development assistance (ODA) component. Public Works Secretary Rogelio L. Singson claimed interested bidders expressed willingness to shoulder the entire P35.58-billion deal, making it unnecessary for the government to borrow money for it.
The CALA Expressway project involves the construction of a four-lane, 47.02-kilometer highway that will connect the Manila-Cavite and South Luzon (SLEx) expressways.
The private sector was supposed to finance, design and construct the P19.7-billion, 28.9-kilometer Cavite section. The state would be responsible for the P15.8-billion, 18.1-km Laguna section, to be funded through ODA.
Interested bidders for the CALA project were supposed to submit their qualification documents on June 10 but this was called off after the change in terms. No new dates have been set.
The Philippine Star, 18 July 2013
By Prinz P. Magtulis
MANILA, Philippines – The Aquino administration is getting close to achieving its â€śaspirational growthâ€ť of seven to eight percent as it begins to address â€śconstraintsâ€ť in economic expansion, Finance Secretary Cesar Purisima said yesterday.
â€śAs you know, our aspirational growth target is from seven to eight percent and we are sticking to that. We believe we have moved up the growth capacity of our country,â€ťÂ Purisima told reporters.
From 4.7-percent â€śtrend growthâ€ť over the last decade, Purisima noted that the local economy grew by an average of 6.1 percent over the past three years.
The local economy expanded by 7.8 percent in the first quarter.
â€śWhat we need to do is to continue to bring that up by removing constraints to growth,â€ť he added.
The Philippine economy was Asiaâ€™s fastest growing economy in the first quarter, expanding 7.8 percent which beat the governmentâ€™s six -to seven-percent target this year.
For next year, the target has been set at 6.5 percent to 7.5 percent, but Purisima said the â€śaspirational targetâ€ť remains as the government looks at curbing one of Southeast Asiaâ€™s highest unemployment rate of 7.5 percent.
In 2010 when the Aquino administration took over, the aspirational target over the next six years was unveiled to include boost coming from the centerpiece economic program, the public-private partnership (PPP).
This time around, Purisima said â€śeverything will be includedâ€ť from the PPP, which has been hit with delays for the past three years, the governmentâ€™s own infrastructure spending and creation of fiscal space.
â€śWe continue to create space so that we can continue to spend on infrastructure and social services,â€ť he explained.
For instance, he cited the 35.6-percent increase in infrastructure spending to P104.6 billion for the first five months of the year. For the whole of 2013, the Aquino administration plans to spend a total of P312.3 billion in infrastructure.
The amount would account to 16 percent of the P2.006-trillion national outlay, Purisima said. For next year, 20-percent of the proposed P2.268-trillion budget, equivalent to P403.5 billion, will be spent for infrastructure.