Foreign News on Philippine Real Estate and Economy – May 2017

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hello everyone,

here’s some interesting articles from widely read online portals known for their well chosen issues regarding current and the future of finance, management, information technology and real estate that’s worth reading.  most articles will inform everyone of current trends experienced by top companies / individuals, be it a success and failure and also help us make better decision based on what’s happening from a global perspective. specially it’s effect on the Philippines :

from bloomberg.com correspondent, David Roman :

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India, Philippines to Lead Asian Growth as Workforces Rise

For a vivid illustration of why demographics matter so much for economic growth, take a look at the diverging trends in Asia.

India and the Philippines are likely to post Asia’s fastest economic growth rates in coming years as their working-age population keeps expanding through 2020, in contrast with shrinking workforces across North Asia, Nomura Holdings Inc. estimates show.

Philippines, with 31 percent of its population currently under the age of 15, is projected to see a 1.9 percent expansion of its 15-to-65 year-old population this year, with Malaysia’s due to rise 1.6 percent and India 1.5 percent, Nomura economists said in a report. Malaysia’s population growth, however, is expected to slow faster than India’s.

That contrasts with bleaker prospects for the likes of China, Japan and Hong Kong, all of which have seen a contraction in the workforce since 2015. South Korea and Thailand are expected to join the ranks of older economies with a smaller working-age population next year, according to Nomura.

Aging will clip the potential growth rates of all major North Asian economies in coming years, while those of India and Southeast Asian economies may accelerate, with the exception of Singapore’s, the bank said.

“We expect any upside surprises to the consensus of economists on potential output growth to come from India and Southeast Asia, while any disappointments are likely to come from Northeast Asia,” Nomura said.

from www.forbes.com correspondent, Michael Mazza :

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With Rodrigo Duterte In Power, What Hope Is There For U.S.-Philippines Relations?

Since his inauguration last June, Philippines president Rodrigo Duterte has been a perpetual thorn in the side of the United States. Under his watch, the longtime U.S. ally has cozied up to China while reversing recent advances in the U.S.-Philippines security relationship.

During the administration of his predecessor, Benigno Aquino III, the Philippines was strengthening its role as the cornerstone of America’s security posture in Southeast Asia. Under Duterte, the very sustainability of the alliance has become a question mark.

President Donald Trump is now himself feeling the prick of the Duterte thorn. Following a potentially off-the-cuff invitation to the Philippine president to visit the White House—the State Department, which arranged the call, was unaware of the impending invitation—Duterte told the press that he was “tied up” with a number of foreign trips and might not have the time to travel to the United States.

Meanwhile, debate in Washington over the wisdom of the invitation has been raging for several days.

Duterte’s war on drugs

Opposition is mainly due to President Duterte’s poor human rights record. “The Punisher,” as he is sometimes called, was elected in part on a promise to tackle the Philippines’ drug problem, and tackle it he has. His anti-drug campaign has led to some 7,000 deaths, including of children. Troublingly, many of those killings have been of the extrajudicial variety. In his two decades as mayor of Davao, moreover, Duterte is believed to have run “death squads,” which dealt out so-called justice with little respect for due process.

Last month, a Philippine lawyer petitioned the International Criminal Court to charge the president with crimes against humanity. Meanwhile, Duterte’s foremost domestic critic, a sitting senator, is sitting in prison.

To be sure, a meeting at the White House could, in theory, enable the U.S. president to more effectively wield his influence to urge Rodrigo Duterte to moderate his war on drugs. But setting aside whether Duterte would be receptive to such counsel, there is little reason to believe President Trump is interested in offering it. The White House’s readout of the call gave little reason for optimism on this count. The two leaders “discussed the fact that the Philippine government is fighting very hard to rid its country of drugs, a scourge that affects many countries throughout the word.”

That’s not exactly an endorsement of the anti-drug campaign, but it’s certainly not an admonishment.

Bringing the Philippines back into the fold?

Perhaps the greatest argument in favor of inviting Duterte to the White House is that doing so will advance America’s strategic interests in Southeast Asia and the wider region. With its military modernization program and island-building campaign in the South China Sea, China is positioning itself to challenge freedom of navigation, to exert control over the region’s waters, to coerce its neighbors, and to more easily project power into the Indian Ocean region and the Western Pacific.

The Obama administration invested more deeply in the U.S.-Philippines alliance largely because of the island nation’s location. Sailing and flying from the archipelago, American warships, aircraft and Marines would be well poised to contest China’s expansionist claims and counter Chinese aggression. In the months following his inauguration, however, Duterte threatened to tear up the bilateral enhanced defense cooperation agreement, dialed back bilateral military exercises with the U.S., and disallowed U.S. naval ships from launching South China Sea patrols from Philippine facilities. Thanks to Duterte, the intended anchor of the U.S. position in Southeast Asia ceased to hold bottom, threatening to constrain American operations in the region.

If a White House meeting could return the U.S.-Philippines alliance to the heights reached during the Aquino years, or at least move things in that direction, it would be worth the cost. After all, over the longer term, in an Asia dominated by China, Beijing would do far more damage to the cause of human rights than will Rodrigo Duterte, a democratically-elected president limited by law to a single, six-year term.

A visit of no value

Presidents Trump and Duterte may get on famously—they both seem to have a soft spot for fellow (wannabe) strongmen—but there is little reason to believe the American president can coax his Philippine counterpart back into the fold.

First, Trump’s own budding bromance with Xi Jinping will undercut any American efforts to encourage Duterte to distance himself from the Chinese leader.

Second, Trump seems unlikely to offer Duterte anything much of value. The president’s budget blueprint for FY2018 seeks a 28% cut in funding to the State Department and USAID; while eventual cuts are likely to be less draconian, there will almost certainly be less money available for development and security assistance to the Philippines. And of course, the president’s skepticism of both trade and military alliances is well known. When Duterte visited China last October, meanwhile, he returned home with $24 billion in promised aid and business deals. When it comes to the Philippine president, money talks.

Third, the downturn in the U.S.-Philippines alliance did not come about due to shifting geopolitical conditions, but due to one man’s deep-seated anti-Americanism. Rodrigo Duterte is a self-described socialist that clings to grievances stemming from American actions during a Philippine rebellion in the early 20th century. When he visited China last year, Duterte announced the Philippines’ military and economic “separation” from the United States and declared, “I realigned myself in your ideological flow.” In that same speech, Duterte asserted that “there are three of us against the world: China, [the] Philippines, and Russia.” A visit to the White House—the seat of Western power—is not going to soften Duterte’s hostile anti-Western worldview.

Rather, a Duterte visit to the White House—especially to meet with an American president that has little apparent interest in human rights issues—would likely allow him to claim an American stamp of approval for, or at least U.S. indifference to, his literal war on drugs.

Let time pass

This is not to say that the American and Philippine leaders should not talk. The two countries remain allies with common interests, despite the recent distance in the relationship. In November, President Trump will travel to Manila for the East Asia Summit, which Rodrigo Duterte will host. By then, the outlines of Trump’s Asia strategy should be clearer, as will be Duterte’s own approach to the Trump administration, which will make for more meaningful discussions. The two presidents should take advantage of the opportunity to engage in serious dialogue absent the symbolism of a White House encounter.

Until then, it’s best to keep The Punisher away from 1600 Pennsylvania Avenue.

from www.dealstreetasia.com correspondent, Tomas S. Noda III :

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Although the Philippines has outperformed economies in Southeast Asia in 2016, its Initial Public Offerings (IPOs) have been consistently low for almost a decade. How can the fastest growing economy in the region continue to have a dearth of IPOs?

The Philippine economy posted 7.1 per cent year-on-year growth in the third quarter of 2016 ? higher than China (6.7 per cent), Vietnam (6.4 per cent), Indonesia (5.0 per cent) and Malaysia (4.3 per cent) ? due to overseas Filipino remittance, a thriving business process outsourcing (BPO) sector, a growing middle class, and spendings toward public infrastructure.

Still, the country wasn’t able to gain back its double-digit listings since 2007, registering only two IPOs from 2008 to 2009 before averaging four to five annually, according to data compiled by global professional services firm PWC.

Experts have pointed out that stiffer IPO requirements prevent local businesses to go public. The plan to hike the minimum public float from 10 per cent to 15 per cent is likely to be implemented by the Securities and Exchange Commission (SEC) soon.

The Philippine Stock Exchange (PSE) totaled only four IPOs in 2016, namely: Golden Haven Memorial Parks Inc raising $16.5 million in June, Cemex Holdings Corp in July $537 million, Pilipinas Shell Petroleum Corp in November $2.2 billion, Shakey’s Pizza Asia Ventures Inc (SPAVI) in December $80 million.

In an interaction with DEALSTREETASIA, PSE chief operating officer Roel Refran, said they aim to double last year’s IPO figures in 2017, and cited several reasons for the dearth of IPOs in the country.

Refran noted there’s a lot more consumer and construction companies that are primed up already for listing this year, even as PSE plans to get more products, and getting ready when the market rebounds.

from www.cntraveler.com correspondent Lester V. Ledesma

Philippines-Calamian-Islands

Our readers have loved Palawan and Borocay of late, but from a local’s perspective, we’re missing out on the Calamian Islands just north of Palawan. Hidden for decades behind the shadow of more popular Philippine destinations, the Calamian Islands (or Calamianes) are finally getting their turn in the spotlight. This cluster of islands hugging the South China Sea is a vast playground of stunning waterborne landscapes and dive sites. It wasn’t all that long ago that it would take an eight hour ferry ride to get there from the capital, Manila. These days, improved transport and tourism infrastructure (daily flights and luxury hotels) makes the area more traveler-friendly. It’s far from crowded, though—with more than a hundred islands scattered over 680-square-miles of crystalline sea, it’s still shockingly easy to find your very own stretch of sand.

from www.worldbank.org :

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Philippines Economic Update April 2017

STORY HIGHLIGHTS
  • The Philippine economy remained resilient to global headwinds in 2016.
  • The rapidly growing domestic economy has yielded substantial gains in employment and poverty reduction.
  • The Philippines’ growth outlook remains positive but subject to downside risks.

Economic and policy developments

The Philippine economy remained resilient to global headwinds in 2016. While a slower-than-expected global recovery weakened net exports, surging domestic demand pushed the annual GDP growth rate to 6.8 percent, year-on-year. Investment drove economy-wide growth for the first time since 2013, as the government’s expansionary fiscal-policy stance helped capital formation to expand by 20.8 percent year-on-year led by the construction sector. Consumption growth remained strong as accommodative monetary policies kept interest rates low, supporting a double-digit expansion in consumer lending. Meanwhile, low inflation boosted households’ purchasing power, while a steady increase in remittance inflows accelerated the growth of household consumption.

The rapidly growing domestic economy has yielded substantial gains in employment and poverty reduction. This means growth became more inclusive. Unemployment fell to a historic low of 4.7 percent in 2016, as 1.4 million net jobs were created. However, the country’s 18 percent underemployment level has remained broadly unchanged over the last ten years, reflecting the prevalence of informality and related job-quality concerns. The poverty incidence among Filipinos dropped to 21.6 percent in 2015 from 25.2 percent in 2012. This presents 1.8 million Filipinos lifted out of poverty within three years. Higher employment, low inflation and improved incomes contributed to the decline in the number of poor.

Prospects and risks

The Philippines’ growth outlook remains positive. The World Bank projects that real GDP will grow at a rate of 6.9 percent in 2017 and 2018. Supported by sound domestic macroeconomic fundamentals and an accelerating recovery among other emerging markets and developing economies, the Philippines is expected to remain one of East Asia’s top growth performers. The government’s commitment to further increasing public infrastructure investment is expected to sustain the country’s growth momentum through 2018 and reinforce business and consumer confidence. Strong and inclusive economic growth is projected to further increase household consumption and speed the pace of poverty reduction.

The country’s growth prospects are subject to several important downside risks. On the external front, rising global interest rates could weaken the peso, adversely affecting capital flows to the Philippines and driving up domestic inflation. Commodity prices, specifically global crude oil prices, are projected to rise in 2017, which could also increase inflationary pressures. On the domestic front, strong macroeconomic fundamentals have opened some fiscal space for the government to implement its public investment and social spending agenda, but the success and timeliness of the administration’s planned tax reforms will be vital to preserve fiscal sustainability. Moreover, planning and implementation bottlenecks could diminish the government’s ability to implement its planned infrastructure investment program.

Over the medium term, the Philippines can leverage several emerging trends to accelerate its growth and development, including the potential of its very young and growing population and capitalizing on its growing services sector to accelerate its structural economic transformation. Sustaining the inclusive pattern of recent growth and taking advantage of the potential of its young population offers a brief window of opportunity which will require an enduring commitment to structural reforms that facilitate, on one hand, private investment, and, on the other hand, helps young workers to develop the appropriate skills to succeed in a dynamic labor market.

from www.nytimes.com correspondent, Aurora Almendral :
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Philippines Rejects Environment Chief Who Took On Mining Interests

A former environmental activist who cracked down on the Philippine mining industry as the country’s acting environment secretary was forced from her job on Wednesday when Congress denied her confirmation to the post.

Since being appointed in June by President Rodrigo Duterte, the acting secretary, Gina Lopez, has taken aim at the mining industry.  She has acted aggressively to close mining companies accused of violating environmental laws and canceled mining contracts in watershed areas. Last Thursday, Ms. Lopez raced to issue a ban on open-pit mining along with other restrictions.

“We planned many things,” Ms. Lopez said during a news conference after the vote against her confirmation. “What a waste. Everyone would have benefited from the management and care of the environment.”

Ms. Lopez was championed by environmental activists, religious groups and social justice organizations, some of whom rallied in her support outside the Senate building on Wednesday. During her tenure, Ms. Lopez moved to shut the operations of 28 of the country’s 41 mining companies. Those companies account for about half of the nickel production in the Philippines and have been accused of leaving rivers, rice fields and watersheds stained red with nickel laterite.

But the vote on Wednesday could not have come as a surprise for Ms. Lopez.

Congress twice deferred decisions on her appointment after contentious confirmation hearings in November and again in March. Mr. Duterte reappointed her both times. The vote on Wednesday, however, is final. In the Philippines, it is unusual for cabinet appointments to be denied confirmation, and they are normally allowed to serve while they await approval.

Mining companies, industry lobbying groups and some members of Congress strongly opposed her appointment.

In March, the Chamber of Mines of the Philippines filed a complaint against Ms. Lopez, calling her decision to close mining operations “baseless and illegal.” During her confirmation hearings, lawmakers grilled Ms. Lopez on her knowledge of the mining industry, challenged her competence and questioned the legality of her orders.

Even as lawmakers deliberated behind closed doors Wednesday, a suspended mining company filed a graft complaint against Ms. Lopez, the fourth since her appointment.

Yeb Saño, executive director of Greenpeace Southeast Asia, said in a statement to reporters that the decision “shows how destructive industries continue to hold Philippine lawmakers by their necks.”

Mr. Saño, who has argued that government corruption has allowed mining companies to pollute the environment for decades, accused the body voting on the appointment of being “dominated by politicians with questionable loyalty,” with some receiving campaign contributions from mining interests.

While Ms. Lopez must step down immediately, her orders will stand.

“It’s just the beginning, because at least someone has defined the problem,” said Cielo D. Magno, a professor of economics who studies extractive industries. Ms. Magno said Ms. Lopez had raised awareness on environmental issues and set a standard for future decisions around mining.

Ernesto Abella, a spokesman for the president, praised Ms. Lopez’s contributions but added that “this is a democratic process, and we respect their decision.” The presidential palace said that Mr. Duterte was now looking for a successor.

At the news conference after the vote, Ms. Lopez went out with a rallying cry, insisting that the people were entitled to a clean environment.

“That is our God-given right, and that is more important than business interests,” Ms. Lopez said. She then broke into song, leading the room in a rendition of “I Believe I Can Fly.”

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Robert G. Sarmiento Properties
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