Boracay Action Agenda on MSMEs...

1June 2015

Volume 26 No. 06 June 2015

The Philippine-led Boracay Action Agenda to Globalize MSMEs (micro, small, and medium enterprises) received an overwhelming support from the 21 ministers who �� Cooperation (APEC) Ministers Responsible for Trade (MRT) Meeting held in Boracay, Aklan on 23-24 May.

The Philippine-led initiative calls ��among APEC economies to provide MSMEs wider opportunities in the global or regional trade, either through global value chains ��goods and services.

Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said the Philippines received “very good suggestions” from APEC trade ministers for the Boracay Action Agenda, which will be endorsed during the APEC Economic Leaders' Meeting (AELM) in November.

“That’s quite an accomplishment for the chairmanship of the Philippines. It’s very popular as �� Secretary Domingo said.

“We are expecting it will be ��he said.

��!"!#��$��%�� DTI-Bureau of Import Services (BIS) Director Luis M. Catibayan said.

The APEC has been pushing for ��in the past have focused on improved participation of those already part of global value chains and not on MSMEs.

��areas for cooperation such as trade ��!��!��"!�and institutional support to address business barriers.

They also called for the support of the APEC Business Advisory Council in pursuing action to advance MSMEs’ participation in global trade.

Secretary Domingo said the Philippines has proposed the setting up of a trade repository and services framework for APEC.

The APEC has been pushing for They also called for the support

1. Facilitate the access of MSMEs to foreign trade agreements and regional trade agreements (FTAs/RTAs) by simplifying and streamlining rules of origin (ROO) procedural and documentary requirements and harnessing information technology (IT) to ease documentation and procedures.

2. Streamline customs-related rules and regulations and assist in the

compliance of MSMEs.

3. Provide timely and accurate information on export and import procedures and requirements.

4. Widen the base of Authorized Economic Operators (AEO) and trusted trader

programs (TTP) to include MSMEs in order for them to contribute to security, integrity, and resiliency in supply chains.

5. Support measures to widen options � ��

the infrastructure to facilitate lending

6. Expand internationalization opportunities for MSMEs, providing goods and services through information and communications technology (ICT)

and e-commerce.

7. Strengthen institutional MSME support.

8. Strengthen focus on MSMEs led by women.

Boracay Action Agenda Action Points

Boracay Action Agenda on MSMEs supported

Philippine Business Report2

INDUSTRYTRENDS

FDIs rise 18% in February

Foreign direct investments (FDIs) that entered the Philippines grew by 18% in February 2015 from the comparative month last year, indicating the continued operations ��"��in the country, the ��&��"��ng Pilipinas (BSP) said.

FDIs rose to USD 359M in February from USD 305M in the same month ��#$&*+�/��"��6��7:;�better than the USD 263M recorded in January this year.

Fresh investments made by foreign �� =�>�&:?��@��from USD 63M a year ago.

Bulk of these investments went into the following sectors:K� ��"K� O�!��!��"�

supplyK� @��K� /��"��K� ��!��!��

technical activities.

FDIs came mainly from the United States (U.S.), Spain, the United Kingdom, Japan, and Singapore.

Exports may reach 8%-10%

growth target

The country’s exports could hit between 8%-10% expansion, Philippine Exporters Confederation, Inc. (PhilExport) President Sergio Ortiz-Luis Jr. said.

Exporters are sticking it out with the growth targets set under the Philippine Export Development Plan (PEDP), Ortiz-Luis said.

�'��the 8%-10% growth target this

�� he said.

Even if markets in Europe, United States (U.S.), and China are sluggish, Ortiz-Luis is optimistic that the second-quarter growth could grow higher on the back of strong Association of Southeast Asian Nations (ASEAN) and Japan markets.

“The electronics sector has been performing well. It can carry the ��$��)�� *��)��)�� Ortiz-Luis said.

Growth prospects for other sectors such as metals, mining products, and services are also getting brighter.

Philippine exports in 2014 reached USD 61.8B, or 9% growth over 2013.

PEZA positive of drawing more

investments

The Philippine Economic Zone Authority (PEZA) is optimistic it could restore investments that were put on hold last year with the continuing improvements at the Port of Manila.

About P25B worth of investments at the country’s ecozones were lost last year due to congestion at the Port of Manila. However, PEZA Director General Lilia B. De Lima 6��"��will lure new investments this year.

PEZA plans to talk to existing economic zone locators and convince them to proceed with their expansion plans given the reported easing of the port congestions in the Port of Manila.

Malacañang said the port congestion issue has been resolved earlier this year, owing to measures implemented both by the government and the private sector.

To recover the investments, PEZA is also set to hold outbound investment missions to Japan and Europe this year, particularly in countries where ��in investing in the Philippines.

PEZA is sticking to its 8-% growth target for investment pledges in

economic zones this year as the country remains as an attractive location for business due to its favorable economic conditions and young talent pool, de Lima said.

Last year, PEZA-approved �� #:?+*XY!��&+#;�� #:[+&7Y��#$&7+

PHL signs global trademark deal

/��\�� ]^��of the Philippines (IPOPHL) has signed a Memorandum of Understanding (MOU) with the International Trademark Association (INTA), a global association of trademark owners and professionals, to promote and protect trademarks.

The agreement, signed at the sidelines of the INTA Annual Meeting held in California in May, commits the two parties to collaborate in the areas of promotion, protection and enforcement of trademarks, research and information, as well as capacity-building.

The agreement is expected to create a stronger link between the government and the private sector as INTA represents the world’s top global brands.

“The Philippines is playing an increasingly important role in �� INTA President J. Scott Evans said.

�+��!,/��2��2��3��&��$�� '��&�$��$��Philippine public to help us ��$��&��&��&�� Evans said.

For his part, �� Charge and Deputy Director General Allan B. Gepty said the cooperation is important as more global brands are entering the Philippine market.

The country needs a more strategic and sophisticated enforcement

3June 2015

against trademark infringement for both the physical and online market, Gepty said.

�,��2��&��&��$��he said.

“With the accession of the 2��!��2��&��&��$��&��+4��)��a new platform of ensuring ��$��$��&�� Gepty added.

@��&X:X!�_�6� �̀�j��INTA comprises more than 6,500 organizations from 190 countries, including the Philippines.

PHL continues to be an attractive

outsourcing site

The Philippines continues to be an attractive outsourcing destination ��^��"�!��{��Lang LaSalle (JLL) Philippines Inc. said.

�*��5��3��6,7,9��:��$�� JLL Research, Consulting and Valuation Head Claro dG. Cordero Jr. said.

�+��of the Philippines as an outsourcing �� *��$��&��)��5��$��4"#4��#��;�� Cordero said.

He said new urban areas are being developed to accommodate the expansion of the O&O and BPO (business process ��"}��+

On the same note, Wong and Bernstein Group Company Business Senior Adviser Enrique M. Soriano III��^��demand to the country’s robust economy.

�+��$��"!#��<��=��result we have seen the emergence �$��)��%��>��5�� Soriano said.

Meanwhile, the Department of Science and Technology-Information and Communications Technology ]^��~>]�/�\�/]}!��"��with the IT and Business Process Association of the Philippines (IBPAP), is pushing for more locations in the country to be considered preferred outsourcing destinations.

The DOST-ICTO is grooming the “next wave cities” to become part of Tholons’ Top 100 Outsourcing Destinations.

/��"��that prepares an annual list ranking the best cities for outsourcing worldwide.

/��_��excludes Metro Manila, Metro Cebu, Metro Bacolod, and Metro Clark in Pampanga, since these are the country’s “centers of excellence” (COEs), having developed a mature information technology and business process management (IT-BPM) industry.

�?��$��$��will announce the top 10 next wave �� ICT Industry Development �� of the DOST-ICTO said.

The Next Wave Cities™ will be selected by the DOST-ICTO and IBPAP based on the following criteria:K� ��K� /��K� ��"��

of telecommunications networks K� ��K� Y��!��"�

vulnerability to natural disaster and issues related to security and safety

In 2014, it was reported that the country’s Next Wave Cities™ were the following:K� Y�"��K� >��K� >��"��K� \��K� ��K� ��Y��~Y��"!�

Calumpit, Malolos City, Marilao, and Meycauayan City)

K� ��~Y��!�Dasmariñas City, and Imus City)

K� ��"��~��!� Los Baños, and Sta. Rosa City)K� ��_�"��~_�"�� }�K� ��~��!�

Cainta, and Taytay)

In Tholon’s 2015 ranking, three cities in the Philippines moved up several notches. These are the cities of Bacolod,Baguio, and Iloilo.

From its 93rd position in 2014, Bacolod rose to 86th in the ranking that Tholons began in 2006. From 99th, Baguio City is now ranked 95th, while Iloilo City rose to 91st from 95th in the 2014 ranking.

��

on PPP, BPO

Canadian companies have expressed optimism in putting up capital in the Philippines particularly in the areas of public-private partnership (PPP) projects and business process outsourcing (BPO).

President Benigno S. Aquino III drew these investor interests during his three-day state visit ��:�?��"��closer diplomatic and economic ties between the two countries.

�?��$�� $ ��

Centers of Excellence

Metro ManilaMetro CebuMetro ClarkMetro Bacolod


During his visit, President Aquino met with Canada Governor General David Lloyd Johnston and Prime Minister Stephen Joseph Harper.

Aquino and Harper exchanged notes on the promotion of micro, small, and medium enterprises (MSMEs) which Canada has also vigorously supported.

Department of Trade and Industry (DTI) Secretary Gregory L. Domingo, who was with President Aquino and other Philippine "��^��"��!�shared the country’s experience in setting up roving academies and training workshops as well as in establishing shared service facilities (SSFs) for start-up enterprises.

The two leaders welcomed a number of key initiatives to deepen the Philippines-Canada bilateral relationship:K� ��j��6��

trade agreement (FTA) K� "��"��

existing Foreign Investment Promotion and Protection Agreement

K� \��"�"��6�� "��with the Philippines, as a priority for Canada’s economic growth

K� @��6��j��accountability for development cooperation outlining the commitments of both governments to work together

in reducing poverty in the Philippines.

PHL viewed as alternate Asia

trade hub

The Philippines is well positioned to become an alternative site ��"��"�to set up a manufacturing or services base in Asia and serve as a re-export hub to the region and the rest of the world, Hong Kong-based Professional Services ��>��reported.

In an article titled “The Cost of Business in the Philippines Compared With China,” Dezan Shira Founding Partner and Chair Chris

Devonshire-Ellis said the Philippines enjoys a number of advantages compared to China, including having more competitive operational costs.

Another advantage, Devonshire-Ellis said, is the Philippines’ membership in the Association of Southeast Asian Nations (ASEAN).

�@��$��in business process outsourcing 6�2,9��4��&��&��$��4��$��%�)��;��4"#4�� Devonshire-Ellis said.

In addition, English is spoken across the lower and middle classes of the Philippines, especially in the larger cities and tourist spots, enabling the country to attract a great deal of BPO on a global scale, Devonshire-Ellis said.

��<2��=��3��'��%$��$��&��$��means the Philippines is a viable ��$�� he added.

Car sales up by 20.7%

as of April

Vehicle sales in the country grew ��#$+:;��X*!&*&��January-April period this year compared to the same period in 2014, combined data from the Chamber of Automobile Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA) showed.

For April alone, total vehicle sales grew by 18% year-on-year to 21,259 units.

Sales of commercial vehicles (CV) ��&7;��$!:�?��January to April this year, while passenger car (PC) sales grew by 34.5% to 33,382 units.

“This continuing increase in ��>�� +��also consistent with economists’ ��:��growth will remain strong as per capita income hopefully reaches /"A�B�CCC��DCEF�� CAMPI President Rommel R. Gutierrez said.

O��6��would pick up in the coming months to hit the sector’s sales target of 310,000 units for 2015, up by 15% from the 269,058 units sold in 2014.

New markets for PHL franchisers cited

Filipino franchisers should explore other Southeast Asian markets such as Myanmar, Viet Nam,and Cambodia where they can expand their reach, Philippine Franchise Association (PFA) Chairman Emeritus Samie Lim said.

�!��G��;��H��&��$��so I’ll tell our people to stop ��&��&�� Lim said.

Only a few American brands are in Myanmar due to United States (U.S.) trade sanctions and this is a ��@��before the American brands start to come in, he explained.

�,��$��$��%��there. But there is no intellectual ��$��caveat. The key is to have a partner ��&��$�� Lim said, as he also urged local businessmen to check franchising prospects in Viet Nam.

The Center for International Trade Expositions and Missions (CITEM),

5June 2015

TRADE AND

INVESTMENTS

the export promotion arm of the Department of Trade and Industry (DTI), supports PFA in its campaign to export Filipino brands through participation in franchise shows ��+

�'��A�� '��$�� EC�� ;�+#!�� he said.

operations to better serve its customers.

��&!��"� :$$�!��completed covering the stockyard warehouse, parts warehouse, and a portion of the planned training academy.

Phase 2, costing P500M which will start early next year, covers the ��&#��^��!�a car museum, a center for climate change, and a training academy.

The logistics center can accommodate 5,000 vehicles equivalent to a two-month inventory. It will house imported Hyundai vehicles coming in through the Batangas port before delivery to dealers nationwide.

Last year, HARI’s total sales reached #7!$&?��+��of this year, HARI has sold 5,364 units.

Isuzu considers local assembly

of trucks

Isuzu Philippines Corp. (IPC) is considering the local assembly of Category 5 trucks (weighing at least 25 tons) at its manufacturing plant in Laguna, in anticipation of the estimated 25-% surge in demand for heavy duty vehicles.

IPC Senior Vice President for Sales Division Arthur A. Balmadrid said the demand for this truck category has been rising by 20% to 30% as more companies choose brand new trucks over second-hand units.

Buying new trucks proved to be ��!�taking into consideration the looming implementation of a government policy that will put a 15-year age cap for trucks, ��\ ��^��+

For the assembly of Category 5 trucks, IPC can use the plant’s existing Category 3 and 4 assembly line.

At present, IPC assembles the D-Max, Crosswind, and trucks at the Laguna facility, which has a capacity

of 15,000 units in one shift, and 30,000 units on double shift.

IPC production for this year is seen to reach around 12,000 units, of which 4,000 are expected to be trucks.

Japan aircraft component maker

expands Clark plant

Japanese manufacturers of aircraft interiors and components have invested an additional P106M to further expand their operations at the Clark Freeport in Pampanga.

Of the amount, P96.16M came from Jamco Philippines Inc. (JPI) while the remaining P10M would be from Show Aircraft Industry Philippines Inc. (SAIPI).

JPI manufactures commercial aircraft interior components and sub-assembly parts for Jamco America and Jamco Corp. of Tokyo. The new facility at the Philexcel Business Park in Pampanga ��6��panels for Boeing planes.

��!�{ \��#&:�employees and plans to increase employment to 300 in the next two years.

ECONOMIC AND LOW-COST HOUSING

8990 to add P10B worth

of housing units to market

Mass housing developer 8990 Holdings Inc. will infuse P10B worth of new housing units this year, mostly in the Visayas and Mindanao regions.

The new housing inventory will come from nine newand 10 ongoing projects that will provide a total of 11,083 housing units this year.

The ongoing projects worth P6.1B will provide 6,598 units.

Nine projects worth P4B to be launched this year will be in the cities of Muntinlupa, Cavite, Cebu, Iloilo, and Davao to produce 4,486 housing units.

MANUFACTURING

CEMEX inaugurates P3-B Apo

Cement mill in Cebu

CEMEX Philippines inaugurated its P3-B Apo Cement Plant in Naga City, Cebu as part of its comprehensive expansion plan in the country.

The new 3,433-sqm facility increases CEMEX’s production capacity by 1.5M metric tons (MT) per year or an additional 40% in total capacity.

The project currently employs around 950 regular and direct contract personnel. During the construction phase, 800 workers were employed.

Aside from the cement mill in Cebu, CEMEX Philippines has ��6��distribution terminals located in the cities of Manila, Iloilo, and Davao.

Hyundai to build P1.2-B logistics

center in Laguna

Hyundai Asia Resources, Inc. (HARI), the local distributor of Hyundai vehicles, is spending P1.2B for its new logistics center in Calamba City, Laguna.

The new logistics center will ��6��


ENERGY

Alsons Power Group eyes initial

investments of P2B for RE

venture

Alsons Power Group, the holding ��Resources, Inc.’s power assets, plans to invest P2B for its renewable energy (RE) venture, which involves ��"��6��in Mindanao this year.

To date, Alsons Power Group has service contracts to build a combined RE capacity of 94 megawatts (MW) spread out across ��+

@��!�� 6��is currently on the preparation stage for the development of the Suguil hydroelectric power project in Maasim, Saranggani. The power plant is projected to cost USD 40M to USD 50M and generate 15 MW to 16 MW of power.

The company will start construction by the last quarter of this year. It will take about 36 to 40 months to build.

\��j�6��to South Cotabato II Electric Cooperative, Inc. (Socoteco 2).

The company is planning to build a combined amount of 164 MW of hydro power projects in Mindanao over the next few years. It has pending service contract applications to the Department of Energy (DOE) involving additional :$��+

Likewise, Alsons Power is interested to participate in the privatization of the Agus-Pulangi hydroelectric power plants in Mindanao.

Both based in Mindanao, Agus hydropower plant in Lanao del Sur has seven units that generate a total of :$$��!�6�� "��6��plant in Bukidnon generates 255 MW.

The Power Sector Assets and Liabilities Management Corporation (PSALM) currently operates the plants which, according to an earlier estimate, could cost as much as USD 1B.

Nickel Asia to invest P920M

��

Nickel Asia Corporation (NAC) is investing P920M to acquire a 66-% ��j��6��"��~��}��Emerging Power Inc. (EPI) which is developing the Montelago geothermal project in Oriental Mindoro.

The project can generate 30 megawatts (MW) of power over a 25-year period, and expand production with further drilling.

The investment is expected to help address the short supply of power in the country by focusing on RE sources.

The fund will be used for drilling of additional wells and related production facilities within the "��+

� ��

in solar projects

/��Y��"��!��"�6��

Green Light, will inject USD 180M worth of investments in photovoltaic (PV) solar farm developments that would yield an aggregate capacity of 100 megawatts (MW).

/��and sites for the three initial projects that will be ready for commercial commissioning before year-end to early part of 2016, which include:K� #$��6��

Clark Freeport Zone in PampangaK� *$��!�

TarlacK� *$��>�"�!�

Davao del Sur

The company hopes to avail ��~@\/}��+��The Energy Regulatory Commission (ERC) has set March 15, 2016 as the ��for the P8.69 per kilowatt-hour (kWh) FIT.

The FIT, however, is not the only option for the company. It also eyes bilateral contracts with electric cooperatives (ECs) and capacity trading via the Wholesale Electricity Spot Market (WESM). The WESM establishes the basic rules, requirements, and procedures that watches the operation of the Philippine electricity market.

Lopez group expanding solar

capacity in Ilocos

The Lopez conglomerate Energy Development Corporation (EDC) is initially planning an expansion of 30 megawatts (MW) for its solar capacity and hopes to expand it to 150 MW and 200 MW.

The initial 30 megawatts of photovoltaic solar facility will be installed adjacent to a site of their existing 4-MW capacity project in Burgos, Ilocos Norte.

The installation cost per MW is seen at USD1.8M, thus the 30 MW development would need a P2-B capital outlay.

EDC Vice President for Corporate Finance Erwin O. Avante mentioned that the planned expansion is a challenge for there

8990’s New Housing Projects

Project Area Project Cost No. of Units (in Php million)

Urban Deca Homes Campville Muntinlupa City 414 488 Deca Homes Tanza, Cavite 267 594 Deca Homes Guadalupe Cebu City 442 408 Deca Homes Talisay 3 Cebu City 390 410 Iloilo City 1,510 1,680Deca Homes Resort Residences Davao City 955 906 Residences Prime Deca Homes Resort Residences Davao * * Commercial Phase 11 Deca Homes Catalunan Grande Davao * * *Data not available

7June 2015

is a perfect formula wherein it needs to have the following: high irradiance, good site close to a transmission line, and low-cost land. More companies are aggressive on solar investments since the Energy Regulatory Commission’s approval of the second wave of solar feed-in-��~@\/}��6��""��P8.69 per kilowatt hour.

PUBLIC INFRASTRUCTURE AND LOGISTICS

DMCI and EEI bag Skyway Stage

3 project contract

Citra Central Expressway Corporation, a unit of San Miguel Corporation, has awarded to D. M. Consunji, Inc. (DMCI) and EEI Corporation the 32-month engineering, procurement, and construction (EPC) contract for the Metro Manila Skyway Stage 3 project.

DMCI will undertake Stage 1 and 2 of the Skyway project, which is a six-lane elevated toll expressway. The building of the project will start at the end of Skyway Stage 1 located along Buendia in Makati City.

DMCI said Section 1 of the project involves the construction ��7+:�j�+��"�6��Y��to Nagtahan in Manila.

Section 2, meanwhile, covers the 3.5-km. stretch from Nagtahan to Ramon Magsaysay Boulevard, also in Manila.

EEI, on the otherhand, will undertake Sections 3 and 4 covering the 14.82-km. elevated expressway project from Buendia to Balintawak in Quezon City.

This will link the South Luzon Expressway (SLEX) and North Luzon Expressway (NLEX) through eight strategic interchanges.

Asian Terminals unloads P8B

for expansion

Port operator Asian Terminals Inc. (ATI) has earmarked P8B for its three-year expansion program ��^��of its facilities.

The company plans to invest P2.8B this year, P3.1B in 2016, and P2.1B ��#$&:��and Batangas Port.

Capital outlay over the next three years would be sourced from internally generated funds.

ATI deployed six empty container handlers last February and added ��"��~�/O}�cranes in the middle of the year to support faster and safer operations at the Manila South Harbor.

ATI’s expansion will include the increase of container storage areas within the Manila South Harbor expanded port. Their automation program, meanwhile, includes the upgrading of its terminal and resource management systems at Manila South Harbor and its Vehicle Booking System (VBS) which will become online toward the latter part of the year.

Like airline booking systems, the VBS would speed up port processes by aligning demand and capacity on a 24-hour basis without ��"��^��+

�� !

The Department of Transportation and Communications (DOTC) �6��=�>�#+?�� [:+X��detailed engineering design and construction supervision contract for the bus rapid transit (BRT) ��Kunhwa Engineering & Consulting.

The World Bank will shoulder USD 2.9M of the total contract price, while the government will provide the ��"�� [:+X�+

The Cebu BRT is the country’s ��!�which is also one of the major transport projects under the Aquino Administration.

DOTC earlier noted that the system was patterned after the BRT systems in Bogota in Columbia, Curtilba in Brazil, Seoul in South Korea, and Guangzhou in China.

The Cebu BRT is expected to run through 15.5-km. bus-ways from Bulacao to Talamban in Cebu, with a link to Cebu’s South Road Property.

It is expected to serve around 330,000 passengers per day.

NAIA-1 Expressway phase one

completion seen in November

San Miguel Corp. (SMC) will complete the P15.5-B Ninoy Aquino International Airport (NAIA) Expressway toll road in time for the �� (APEC) Leaders’ Summit in November 2015.

Undertaken under the the Public-Private Partnership (PPP) arrangement, the four-lane project ��:+:��j�+��6��and 2.2-km. feeder road to provide access to NAIA Terminals 1, 2, and 3. It would also connect to the Skyway system, the Manila-Cavite Toll Expressway (Cavitex), and the Entertainment City of state-run Philippine Amusement and Gaming Corporation (PAGCOR).

/��which would link NAIA 1 and 2 to Entertainment City (formerly PAGCOR City, a gaming and entertainment complex located at the Manila Bay Reclamation Area), started in January 2014.

Meanwhile, the second phase linking the Metro Manila Skyway, NAIA Terminal 3, and the intersections of Domestic and NAIA Roads is likely to be completed in March 2016.

AVIATION

" �#��$&'

@��/��Avionics is considering expansion of its Philippine operations while other French companies mull investing in the country.


Thales Avionics has been tapped since 2013 by Philippine Airlines (PAL) for an extensive range of equipment for the airline’s A321s and A330s including the Flight Management System (FMS) Landing System and Instrument Landing System.

�+��&��&��&��$��)�� Ambassador of France to the Philippines Gilles Garachon said of Thales’ operations in the Philippines.

Department of Trade and Industry (DTI) Secretary Gregory L. Domingo and French Ambassador Garachon recently held a dialogue to discuss improving trade relations between the two counties.

The Philippines imports French aircraft and exports furniture, agricultural products, and electronics to France. France, on the other hand, expressed to buy raw materials from the Philippines to complement its aircraft manufacturing sector.

@��"�"��Public-Private Partnership (PPP) projects like the Light Rail Transit (LRT) 1 extension, the Subic-Clark-Tarlac Expressway, and the Cebu bus rapid transit.

Since 2014, France has been looking for opportunities to develop cooperation on aerospace and MRO (management, repair, and operations) with the Philippines.

Combined annual trade between the two countries is placed at USD 2.2B last year.

PAL, Cebu Pac eye new Airbus

Philippine Airlines Inc. (PAL) ��\��+�~�� }�are looking at Airbus’ new aircraft as both airlines push for expansion of their long-haul operations.

�� "��6�7�$��for new long haul destinations. The 7[?��

up to 8,000 nautical miles for a non-stop service from Manila to Europe or North America.

�!��!��"�a long-term plan involving a foreign strategic partner that could acquire a 40-% stake in PAL within the next three years.

BANKING Manulife doubles investment

\��@��is planning to double its investment in the Philippines in a bid to achieve double-digit premium growth this year.

Manulife President and Chief ��!�� Charland said the increase ��of their outlook on the Philippine economy.

�'�K��&��&��)�� '��EL��DM��FC��DCEN�� Charland said.

Manulife will open 10 new branches this year and eight more next year.

Metrobank plans expansion

��j��"��consumer-banking capabilities and is targeting entrepreneurs, middle-market commercial clients, and small and medium enterprise (SME) entities, Metropolitan Bank & Trust Co. (Metrobank) President Fabian S. Dee said.

The bank plans to roll out 200 cash-accept machines, Internet banking portal, and mobile apps, to expand its branch network and sales force, particularly for its commercial banking, branches and wealth-management segments, Dee said.

It will put up 30 branches every year and will add 1,000 to the sales force in the next two to three years.

Metrobank has total branches of 920 nationwide as of end-2014.

4th foreign bank gets BSP nod

State-owned Industrial Bank of Korea (IBK) was granted the authority to branch out in the Philippines last 30 April, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla Jr. said.

IBK is the fourth foreign bank to be given the go-signal to set up shop in the Philippines this year following the liberalization of the banking sector.

The three other BSP-approved banks were Shinhan Bank (South Korea), Cathay United (Taiwan), and Sumitomo Mitsui (Japan).

BSP aims to make the local industry more competitive. The presence of more foreign banks also promises to facilitate the entry of more foreign investors as lenders bring their clients to the country.

HEALTH & WELLNESS

Swedish cancer care

�� ( ��$&'

Scandinavian Care AB will invest in the Philippines to establish a cancer research and care center facility.

The health care company’s expansion 6��+�\��operates in Manila, Makati City, Pasay City, and Pasig City.

/��!�planning of cancer treatment centers, and start-up services which include construction and equipment planning and training programs.

IT-BPM

Tech Mahindra expands Cebu

operations

India-based information technology (IT) services provider Tech Mahindra has expanded its operations in Cebu City.

9June 2015

/��at eBloc 3 inside the Cebu IT Park in Barangay Lahug with 500 seats for voice services.

/��!��#$&$!�is in Jeza Building along General Maxilom Avenue. It currently has 400 seats, occupying two and a half ��"+

Tech Mahindra Group Delivery Head for Business Services Anand Achuthan said at least 800 employees will be employed by year-end, aside from the part-time workers for seasonal jobs.

Regus puts up add’l centers

Global workspace provider Regus plans to expand operations outside Metro Manila in the next three to ��+

The company is considering, among others, the cities of Zamboanga, General Santos, and Davao as the potential locations for its expansion, Regus Philippines Country Manager Lars Wittig said.

�+��2��is extremely big that is why we are �)�� Wittig said.

MINING

OceanaGold’s Didipio was top

2014 metals producer

OceanaGold Philippines Inc.’s Didipio Copper Gold Project is the biggest contributor to the country’s metals output in 2014, producing P13.68B worth of copper, gold, and silver, Department of Environment and Natural Resources-Mines and Geosciences Bureau (DENR-MGB) reported.

The Didipio Project is situated in the provinces of Nueva Vizcaya and Quirino.

Red Mountain gets new funding

Red Mountain Mining has secured additional USD 220,000 in funds for its Batangas Gold Project in the Philippines, bringing their total investments in the country to USD 500,000.

The investment will be allocated ��j��>��Feasibility Study and permitting inputs for completion by the third quarter of 2015.

The Batangas project has already been endorsed by all directly involved local government barangay

Venture Development Corp. and involves building a mixed-use leisure and resort community.

Meanwhile, the 15-ha. city center in Mandaue will feature residential developments and commercial spaces with retail ��^��+

Cebu Holdings, Inc. President Aniceto V. Bisnar, Jr. said the planned investment is more than half the amount the group had already put in Cebu City since it ��"�#:��"�+

Federal, Alveo investing P2.5B

Federal Land Inc. and Alveo Land are allotting P2.5B for the joint development of a 45-ha. property in Biñan, Laguna.

The property, which will involve the sale of residential lots to the middle to high-end market, will be launched third quarter of 2015.

The property is a few kilometers from the planned Laguna Boulevard interchange of the proposed Cavite-Laguna Expressway and in the general vicinity of Ayala Land’s Ayala Westgrove Heights and Nuvali projects.

Top 8 mining projects in 2014 based on mineral production output

Company Project Location Output value (In billion Pesos)OceanaGold. Didipio Copper Nueva Vizcaya 13.68Philippines Inc Gold and Quirino provinces Toledo Copper Carmen and Cebu 11.90Operations Lutopan provincePlatinum Group Cagdiano Nickel Surigao del Norte 11.27Metals Inc. provinceCoral Bay Nickel Coral Bay HPAL Palawan province 11.23Corp.Philex Mining Corp. Padcal Copper Benguet province 10.67 -GoldPhilippines Gold Masbate Gold Masbate province 10.20Processing and ��Taganito HPAL Nickel Taganito HPAL Surigao del Norte 9.08Corp. provinceTaganito Mining Corp. Claver Nickel Surigao del Norte 8.79 provinceSource: MGB

COMPANY NOTES

Gardenia invests P1B

in Laguna factory

Gardenia Bakeries Philippines Inc. will roll out P2B for its expansion program in 2015.

/��"��will be the P1-B bakery plant’s construction at Laguna International Industrial Park in Biñan, Laguna.

According to Gardenia Philippines President Simplicio P. Umali, Jr., the new plant can produce 6,000 loaves an hour to cater to the demands of the market.

Another P1B is allotted for a plant that will be located in the Visayas-Mindanao area. This will support its

councils.

REAL ESTATE

Ayala unveils P25-B Cebu

expansion plan

Ayala-owned Cebu Holdings, Inc. is allotting P25B worth investments for ��years for its developments in Mactan Island and Mandaue City.

The 13-ha. proposed development in Mactan is a joint venture with Gaisano-owned Taft Property


COUNTRY-TO-

COUNTRY

INTERNATIONAL/

REGIONAL WATCH

Cebu operations and may come on ��+

San Miguel ventures into snacks,

condiments

San Miguel Corp. through Purefoods will further diversify its product portfolio by investing in new types of food-related products such as branded snack food and instant noodles, condiments, and sauces.

The company plans to acquire ��"��in the manufacturing of such products instead of introducing a new brand of its own.

“So far, San Miguel’s food business is already the biggest with P100B plus of sales revenue,” Purefoods Vice Chairman Ramon S. Ang said.

Pepsi-Cola PHL ventures

to snack food biz

Pepsi-Cola Products Philippines Inc. (PCPPI) will manufacture and distribute PepsiCo’s popular snack food products in the Philippines. This new venture targets a 100-M consumer market.

“This development presents an exciting opportunity for PCPPI to further its vision of becoming a premier food and beverage company in the Philippines,” PCPPI President Furqan Ahmed Syed said.

PCPPI’s engagement in snack and beverage franchise operations is part of PepsiCo’s goal to participate across multiple platforms, including manufacturing and go-to-market execution.

This will also strengthen the company’s partnership with South Korea-based multinational food and retail conglomerate Lotte Group, which is also PCPPI’s largest shareholder.

“My goal is certainly to see our bilateral trade levels grow much more quickly than we’ve seen in the past,” Canadian Minister of International Trade Edward D. Fast said.

Both countries agreed to aim on negotiating for a trade agreement ��6��eliminated,there will be a possible �"��6+�

“We believe there is tremendous opportunity here to put in place a framework agreement that will serve our respective interests and drive additional prosperities in our countries.” Fast said.

PHL and Canada’s bilateral trade in 2014 stood at USD 915.51M.

PHL, Japan ink deal

for dev projects in Mindanao

The Philippines and Japan, through National Economic and Development Authority (NEDA) Director-General Arsenio M. Balisacan and Japan International Cooperation Agency �"��#��$��%%� '��$�*�Representative Noriaki Niwa, signed an agreement for community development in Mindanao.

Under the Japan-Bangsamoro Initiatives for Reconstruction Development (J-BIRD), Japan 6��"�� { �̀&+&#Y�or almost P500M to assist the rehabilitation and construction of farm-to-market roads in Bumbaran, Lanao del Sur; Datu Paglas, Maguindanao; and Alamada, Cotabato.

J-BIRD’s goal is to support the peace process between the Philippine government and the Moro Islamic Liberation Front (MILF) by giving them assistance in the area of reconstruction and development.

The J-BIRD operation has three types of assistance namely, the technical cooperation, grant aid, and loan aid that would greatly help the residents of the ��+

PHL pushes APEC to expand trade, investment to reduce

poverty

The Philippines urged other Asia- ��~ ��}�member economies to expand trade and investment which will be �"��"��growth and poverty reduction across the region.

Department Trade and Industry (DTI) Secretary Gregory L. Domingo said APEC needs to take �"��"��"��on being an important regional bloc and a major player in international trade.

��FC��$��$�� +��)�� Secretary Domingo said.

He urged economies to focus on developing small and medium enterprises (SMEs) to be more globally competitive for they play an important role in poverty alleviation and for long-term growth of APEC economies and the entire region.

�O��>��3��$�"!#��important parameter in pursuing ��$�� Secretary Domingo said.

APEC needs more women’s

economic empowerment

Department of Trade and Industry (DTI) Secretary Gregory L. Domingo and present Chairman of

PHL, Canada explore bilateral FTA

Canada aims to rapidly expand its bilateral trade with the Philippines through a free trade agreement (FTA).

11June 2015

ON THE

CALENDAR

Ph

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it N

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04

Audit on Hazard Analysis and

Critical Control Points (HACCP)

The course allows participants to learn auditing, managing an audit program, and conducting HACCP system audits’ principles. The training will also guide the participants on the competence of HACCP system auditors. Participants who would attend this course should already have working knowledge of HACCP and the documentation involved prior to joining this course. The course will be held on 23-24 July 2015 at Philippine Trade Training Center (PTTC) Sen. Gil Puyat Ave. cor. Roxas Blvd., Pasay City.

Business Strategy

Participants can learn how ��development strategies through integrated marketing approaches and improved product development initiatives. The course targets to focus on the business strategy development’s framework which is relevant in today’s competitive business environment. The seminar 6��:��"��#$&��at Philippine Trade Training Center (PTTC) Sen. Gil Puyat Ave. cor. Roxas Blvd., Pasay City.

#'�� %�� (APEC) Ministers Responsible for Trade (MRT) reiterated that the 21-member economies are committed to take concrete policies and innovative measures to further enhance women’s economic empowerment during its meeting held in May in Boracay, Aklan.

The ministers believed that women’s economic empowerment will be seen through improved access to capital, assets and markets, as well as to innovation and technology, educational and health services, and promoting women’s leadership in public and private sector.

“We welcome the establishment �$��42#;�'��#��A��&��barriers in women’s economic ��$��$�� Domingo said.

They also guaranteed to integrate gender considerations across APEC activities including through cross-fora collaboration such as the “Healthy Women, Healthy Economies” initiative.

Furthermore, the MRT also recognized persons with disabilities (PWDs) in the workforce, by welcoming them to participate in the workforce, and giving them equal access to education so they can fully participate to the economy.

APEC promotes Internet economy

for inclusive growth

\�� Economic Cooperation (APEC) ��]^��"�(SOM) and Ministers Responsible for Trade (MRT) Meeting, participants cited the Internet economy’s important role in promoting inclusive growth.

APEC members target to enable policy and regulatory environment ��"�connectivity.

Information and communications technology (ICT) is the freeway

of the Internet and digital economy, �%�� *�+�� #/��'�(DFA) Undersecretary and SOM 2015 Chair Laura Q. del Rosario said.

ICT is used in transporting ideas and services in the same way traditional infrastructure has moved goods in the past noting that technology makes the world smaller and enlarges presence in the global economy, del Rosario said.

The Internet economy needs to ��legal and economic frameworks, she said.

Developments in this these frameworks, she said, can help empower more businesses especially the small and medium enterprises (SMEs) that are trying to have global identities.

APEC-CTI supports Regional

Economic Integration, SMEs

/�� Cooperation Committee on Trade and Investment (APEC-CTI) discussed the committee’s extensive on-going work program during the 2nd APEC Senior ]^��"�~�]�#}��Meetings on 15-16 May at Shangri-La’s Boracay Resort & Spa.

/��^��#&� ��economies conferred about advancing the APEC Leaders’ instructions for the @��/�� (FTAAP) realization and the APEC Strategic Blueprint for Promoting Global Value Chains Development and Cooperation.

Also, the leaders will strengthen ��reduction commitments by end-2015.

/��j��to let the small and medium enterprises (SMEs) join in the trade �� further develop the region’s trade ��6��"��integration.

Furthermore, the CTI Friends of the Chair on Environmental Goods and Services also guaranteed

the transparency and common understanding in the environmental goods commitments in economies’ ��+


01234567

Jul-15Jun-15May-15Apr-15Mar-15Feb-15

Interest Rate (%)Lending Regular

44

44

45

45

46

Jul-15Apr-15Mar-15Feb-15Feb-15Dec-14

Peso per US Dollar Rate

ECONOMIC

INDICATORS

As of 07 July 2015

P u b l i s h e d m o n t h l y b y t h e K n o w l e d g e M a n a g e m e n t a n d I n f o r m a t i o n S e r v i c e , Depa r tmen t o f Trade and Indus t r y, �� !�� "�#$%��&�� '��+��;��"��<��%�=="�+�� >�+�� ?@$#�J�XYZ�#$%%� >��[� ?@$#�J�XYZ�$\X]� >��^��^�"��_��`� ��^� �� { �� >� |�� `� �� `} } � ��~}�� =!=� ��]�;�#�Z^��~��!��=<��

E d i t o r i a l T e a m : P a t r i c i a M a y M . A b e j o / E d i t o r - i n - C h i e f � > � A l f o n s o M . V a l e n z u e l a / M a n a g i n g E d i t o r >� Cresenciano P. Par/Assistant Editor >� Jamila Joy H. Raposon, Kristina S. Andaya/Writers >� Renaldo C. Neneria/Design Layout� >

Philippine Business ReportJune 2015

As of 02 July 2015

Sources: Bangko Sentral ng Pilipinas (BSP) Philippine Statistics Authority (PSA)Photos: Courtesy of google.com

Entered as Third-Class Mail at the��

under Permit No. 504valid until 31 December 2015

0

1

2

3

May-15Apr-15Mar-15Feb-15Jan-15Dec-14

Inflation Rate (%)(1994 base year)

140.8140.9

141141.1141.2141.3141.4

Jun-15May-15Apr-15Mar-15Feb-15Jan-15

Consumer Price Index(2000 base year)

0100020003000400050006000

May-15Apr-15Mar-15Feb-15Jan-15Dec-14

Exports(In USD Billion)

4,200.004,400.004,600.004,800.005,000.005,200.005,400.00

Apr-15Mar-15Feb-15Jan-15Dec-14Nov-14

Imports (In USD Billion)

012345678

4Q (2013)1Q (2014)2Q (2014)3Q (2014)4Q (2014)1Q (2015)

GDP Growth Rate (%)

0

2

4

6

8

10

4Q (2013) 1Q (2014) 2Q (2014) 3Q (2014) 4Q (2014) 1Q (2015)

GNI Growth Rate (%)

Boracay Action Agenda on MSMEs...

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