Foreign News on the Philippines – November 2016


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 and information technology 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.

from Bloomberg correspondent, David Roman :bloomberg-r

These Asian Cities Offer the Best Property Bargains of 2017 

Not only is India the world’s fastest-growing major economy, it may also offer Asia’s best real-estate investments next year.
A survey has ranked Bangalore and Mumbai as the region’s top picks, vaulting both cities to lead a table of 22 Asian markets.
Commercial property is key. The survey, compiled by the Urban Land Institute with input from PricewaterhouseCoopers LLP, cited a boom in business process outsourcing, or BPO, and IT firms that are driving demand for new office space.
“There is little doubt that catering to the expansion requirements of the Indian BPO industry has delivered big profits to investors who arrived early on the scene,” according to a report summarizing the findings of the survey. “Today it remains a compelling story.”
The two cities only ranked 12th and 13th last year and were close to the bottom as recently as 2014.

The survey was conducted before India’s government on Nov. 8 announced plans to scrap 86 percent of currency notes in circulation. PwC didn’t say whether the plans may have an effect on the real estate market.

Tokyo fell from first place in the 2016 rankings to the 12th position for next year, a reflection of growing discontent with the effect of Abenomics on a long-stagnant market. Declining economic prospects are hurting short-term prospects for office rental growth, despite low vacancy rates, the survey found. Negative interest rates are also a factor, as they lead to a lack of willing sellers.

Singapore, which ranked first in the survey in 2011 and 2012, fell to 21st for next year, down from 11th, the result of what PwC calls a “perfect storm” for the local property market. That includes 12 straight quarters of declining prices in the residential market, as well as a sputtering economy that contracted in the third quarter.

Singapore’s government has been steadfast in its commitment to cool the housing market, maintaining real-estate curbs rolled out since 2009. 

Still, it’s not all good news for India. The survey highlights that Asian investors are looking to diversify their property exposure outside of the region, especially into New York and London, driven by demand from China.

Chinese buyers have been piling into bargain London property in the wake of Brexit, and scouring the globe for any available real-estate investment opportunity. They are motivated by a weakening yuan, surging domestic housing costs and the desire to secure offshore footholds.
This applies not only to individual investors, but also to corporations, PwC says.  The consultancy estimates that Chinese insurers would need to spend $240 billion to increase their foreign property allocation from 1 percent to 15 percent, which is the average that their U.S. counterparts hold.
from contributor, Casey Hynes :

This Startup Is Aiming To Build The Largest Digital Payment Network In The Philippines

Financial inclusion is a broad and somewhat vague term, but it’s becoming an increasingly popular one among both tech and development circles. The World Bank Group describes financial inclusion as “a key enabler to reduce extreme poverty and boost shared prosperity.” The U.N. has also identified financial inclusion as essential to achieving several of Sustainable Development Goals, according to the World Bank Group. Forty percent of adults globally struggle to meet their financial needs and maintain economic stability due to lack of access to financial services, according to the United Nations’ Special Advocate for Inclusive Finance for Development (UNSGSA)

Given financial inclusion’s importance to economic development, it made sense that someone like Mikko Perez would find himself in this space. Back in 1989, Perez spent his first post-college years working in poor Filipino communities. Spurred by the momentum of the People Power Revolution of 1986 that ousted former President Ferdinand Marcos, Perez felt compelled to work in the disadvantaged communities of his home country.

“After my university days, I got involved in volunteer work with farmers and fisherfolk communities in rural Philippines and that was my first few years of my professional career, working with communities in very poor communities. I saw firsthand poverty and underdevelopment and those big problems,” he said.

Perez eventually left the Philippines to pursue a degree at Harvard Business School and a career in finance in the U.S. But those years among the poor made an impression on him. He always intended to return and create meaningful solutions for those in need in the Philippines.

“Before it became very fashionable to talk about social impact, I always wanted to see how I could merge a private enterprise – or capitalism, if you will – and doing something that would be impactful,” Perez said.

Today, he is the founder and CEO of Ayannah, a fintech platform that provides an array of services for unbanked and financially marginalized communities in the Philippines. Ayannah currently offers three services targeted at overseas Filipino workers (OFWs) who use remittances to support and purchase goods and services for their families back at home.

Ayannah’s offerings began with Sendah, a platform that enabled OFWs to buy foreign goods online rather than physically purchasing them in-store and having to carry them home to their families. From there, the company created Sendah Remit, which connected payment agents (such as pawn shops) that can cash out remittances for family members once the transfer is initiated by OFWs. Connecting agents was critical in areas where many families are supported by OFWs.

“Moving cash in the countryside is very expensive,” Ayannah’s team writes in its business plan. “For domestic migrants, sending cash back to their families in the countryside is both costly and inconvenient. The cost of domestic remittance could be as high as 12% of principal amount.”

 from, reporting by Martin Petty; editing by Simon Cameron-Moore :
Philippine President Rodrigo Duterte gestures while delivering a speech during the 80th National Bureau of Investigation (NBI) founding anniversary at the NBI headquarters in metro Manila, Philippines November 14, 2016. REUTERS/Romeo Ranoco

Philippines’ Duterte says trusts Trump to be fair on Immigration

Philippine leader Rodrigo Duterte thinks he will get along with Donald Trump as the U.S. president-elect “has not meddled in human rights” issues, and he trusted Trump’s judgment to deal fairly with the undocumented workers he plans to kick out.

Duterte’s hostility towards traditional ally the United States has defined his presidency so far, but he has changed his tune since Trump’s surprise election win last week.

“It was a well-deserved victory. You (Trump) are the chosen leader of the most powerful country,” Duterte told reporters at a function at the presidential palace late on Tuesday.

He acknowledged Trump’s intent to crackdown on illegal migrants. Large numbers of Filipinos are believed to be working illegally in the United States and remittances from all U.S.-based Filipinos is equivalent to 3 percent of the country’s GDP.

“I trust in his judgment that he would be fair in the matter of the treatment of illegal immigrants. I cannot talk for the illegals because, whether President Trump or anybody else for that matter, an illegal is always an illegal.”

Duterte’s volatility and willingness to castigate anyone he disagrees with earned him the nickname “Trump of the East” when he was campaigning as the alternative candidate in a presidential election he won in May by a big margin.

His warm words for Trump contrasts starkly with the abuse he poured on incumbent Barack Obama, who he told repeatedly to “go to hell” and called a “son of a bitch” for daring to voice concern about the death toll in Duterte’s drugs war.

When asked if he thought he would get along with Trump, he said he could be friends with anyone and noted the incoming president had not said anything about human rights – a no-go topic for Duterte and a trigger for his rage.

“We don’t have any quarrels. I can always be a friend to anybody especially to a president, a chief executive of another country,” he said. “He has not meddled in the human rights.”

Presidential spokesman Ernesto Abella on Wednesday said Trump’s migration policy would have little impact on the Philippines.

He declined during a regular briefing to give an estimate of the number of Filipinos working illegally in the United States.

Abella said there were mechanisms in place to provide them with business and employment opportunities and the government encouraged them to return home before Trump takes office.

from staff writer, YUKAKO ONO :


Integration is slowly taking hold in ASEAN’s banking sector

BANGKOK — Although bank regulators in Southeast Asia are making only slow progress in opening up the region’s financial industry, banks are managing to spread their wings through mergers and acquisitions, and using digital technology.

These moves are driven by lenders’ ambition to grow and thrive in a more competitive single market: the ASEAN Economic Community. According to the latest figures on the market cap of banks compiled by QUICK-FactSet, lenders that actively reach out to meet the growing needs for financial services in the region rank higher.

DBS Group Holdings, Singapore’s state-linked bank, took the top spot on the list. It announced on Oct. 31 plans to buy the wealth-management and retail businesses of Australia’s ANZ in five Asian markets for 110 million Singapore dollars ($77.8 million) over book value, in an effort to strengthen its foothold in these markets.

In Indonesia, for example, DBS’s customer base will jump from 85,000 to close to 500,000. Right now, its business in the country centers on credit cards and branchless electronic banking. Indonesian authorities thwarted the Singaporean bank’s earlier expansion drive, blocking its bid to acquire a local bank in 2013.

For years, the Association of Southeast Asian Nations has been working to create a single market encompassing its 10 members. With the official launch of the AEC last year, there has been some success in facilitating regional trade and investment through the scrapping of tariffs and other deregulatory steps.

But so far, banks have not benefited much. The AEC has created some big financing opportunities. Bangkok Bank, Thailand’s largest bank by assets, for example, secured a one-year bridge loan for Thai retail giant Central Group’s 1 billion euro ($1.1 billion) buyout of Vietnamese supermarket chain Big C Vietnam.

That looks like a special case. According to financial data analyst Dealogic, Western banks remain dominant in arranging Southeast Asia’s M&A deals, with only Malaysia’s Malayan banking (Maybank) making it into the region’s top five advisers, year to date.

Liberalization of the financial sector has been slow, too. Piyush Gupta, chief executive at DBS, calls banking the “most protected industry” in the region.

QUALIFIED WELCOME Under the ASEAN Banking Integration Framework, the pillar of the region’s financial integration efforts, any two countries can make bilateral deals allowing qualified banks to operate in each other’s markets on the same terms as local banks.

Malaysia has been a leader in taking up the “Qualified ASEAN Bank” initiative, inking agreements with Indonesia, Thailand and the Philippines. But since Malaysian banks are already active in these markets, some regulators are reluctant to push ahead with implementation, worrying that the deal could be unfavorable to their own banks.

from staff writer, YU NAKAMURA :


Sony worker revolt highlights hazards of leaving China

GUANGZHOU — Workers at a Sony plant here are staging a major strike in response to the electronics giant’s sale of the facility, drawing attention to the challenges Japanese corporations face not just in doing business but also in pulling out of operations in China.

The incident began when Sony announced on Nov. 7 that it was selling its camera components factory in this Guangdong Province city to a Chinese company for about $95 million. Sony was forced to make the tough call to offload the plant, which began operating in 2005 and currently employs some 4,000 people, amid the economic slowdown in China. The Tokyo-based electronics maker seemed to handle the situation reasonably, given all employees were to keep their jobs under the new owner.

Yet the workers were up in arms the next day. “Don’t sell the factory to a Chinese company without any explanation!” they said to supervisors. “If you don’t want a protest, pay us!”

They began blocking the entrance to the factory on Nov. 10, delaying outbound shipments. With the deadline for the goods fast approaching, the police finally showed up on Nov. 15 to break up the situation. Several were injured, and 11 employees who led the protests were arrested.

But the problem is far from over. On Nov. 16, the workers raised a banner on the factory gates that read, “We are not machines or slaves. Don’t sell us. We have dignity and human rights.” They show up everyday but were still refusing to work as of Tuesday, passing their time instead in the cafeteria or the yard. All production has halted. Police remain on the lookout nearby for any signs of unrest.

Many workers admit they are taking such extreme measures in hopes of a payout. “I was surprised when I heard Sony was pulling out,” a 26-year-old female employee said. “But one of the leaders said if I joined the strike, I would receive a lot of compensation because Sony is a big, famous company. I don’t really understand, but I decided to join.” She said firmly that she will not return to the production line until she is paid.

“A number of Japanese corporations have prioritized reaching a quick resolution to problems by offering massive compensation” even when they were not at fault, said IBJ Consulting’s Akihiro Maekawa, an expert on labor issues in China. Many businesses would rather pay up than have their employees continue making a racket.

Workers are aware of this, so they use social media to exchange information on past cases. “They get information on which companies paid how much in compensation under what circumstances, among other things, and they use that to negotiate,” Maekawa said.

Sony has legally done nothing wrong with its recently announced sale. Article 33 of China’s Labor Contract Law stipulates that “the labor contract shall not be affected” by a change to the employer’s name, legal representative, leader or investors. Because the factory employees will simply continue working under a new employer, Sony does not owe them any financial compensation. Many are watching how it handles an issue that has troubled many Japanese companies in the past.

Observers will also keep an eye on the Chinese reaction. Beijing needs to provide a fair business environment to foreign businesses as it shifts its focus from quantity to quality of production to reach the next stage in its industrial development. But in reality, the odds are still stacked against certain players. Authorities at least must recognize that such forceful tactics as the Sony strike will further cool foreign investment in China.

from :


Philippine Economic Update (October 2016): Outperforming the Region and Managing the Transition

  • The Philippines has emerged as one of the most dynamic economies in the East Asia region in the first half of 2016.
  • The economic outlook is optimistic, with risks tilted to the upside.
  • Enhancing the inclusiveness of growth is a priority of the new administration.

Economic and policy developments
The Philippines has emerged as one of the most dynamic economies in the East Asia region. Despite a challenging global economic environment, the Philippine economy has grown at a rapid pace over the past five years, supported by sound macroeconomic fundamentals and a highly competitive workforce. Strong capital investment and robust domestic demand have helped secure the Philippines’ position as the leading growth performer among major economies in East Asia and the Pacific. GDP growth rate rose from 5.5 percent in the first half of 2015 to 6.9 percent in the first half of 2016, enabling the Philippines to outperform regional peers such as China, Indonesia, Malaysia, Thailand, and Vietnam.
Meanwhile, the country is transitioning to a new economic policy framework. The Duterte administration took office on June 30th after winning a peaceful democratic election marked by record voter turnout. The previous administration made major achievements in securing macroeconomic stability, promoting public sector transparency and focusing fiscal resources on pro-poor infrastructure projects and social services, and the new president’s economic team has prepared a 10-point socioeconomic agenda designed to reinforce private sector confidence in the continuity of the existing macroeconomic framework. The preliminary agenda is intended to bolster the government’s current fiscal, monetary and trade policy stances, while prioritizing tax administration reforms.
Prospects and risks
The economic outlook is optimistic, with risks tilted to the upside. The substantial improvements in macroeconomic stability achieved over the past decade have established the necessary conditions for further robust growth. Over the near term, the Philippines is poised to benefit from the completion of several large public infrastructure projects, which are expected to boost private investment. Improved infrastructure, solid remittance inflows and significant social spending should continue to support the growth of household consumption. If remaining budget-execution bottlenecks are successfully addressed in the next few months, and if uncertainties regarding the specifics of the reform agenda are quickly resolved, the annual GDP growth rate could exceed the 6.2 percent currently projected for 2017-18.
While the near-term outlook is highly positive, the Philippines’ growth model is subject to t medium-term risks. These include the continued failure of external demand to meet expectations and/or a decrease in remittance inflows, and potentially higher interest rates in the US and EU. On the domestic front, medium-term risks include the persistent vulnerability of the agricultural sector, as well as unresolved constraints on private investment, and a lack of competition in major sectors and structural deficiencies in the business environment. Finally, ensuring that growth is inclusive will continue to pose a major cross-cutting challenge to Philippine policymakers—one that is likely to intensify as the country’s evolving economy increasingly shifts to more skill- and capital-intensive forms of production.

Enhancing the inclusiveness of growth is a stated priority of the new administration. The Philippines has made some progress in its fight against extreme poverty. As the Philippine economy continues to develop, the challenge of ensuring inclusive growth will become more complex, and investment in human capital will be necessary to ensure that the nation’s workforce is able to meet a rising demand for skilled labor. The new administration is committed to continued investment in education, job skills, public health and social assistance in order to promote a transformative and inclusive growth pattern. The government is currently engaged in a process of stakeholder consultation as it develops the next six-year Philippine Development Plan, which is expected to provide guidance on both short- and medium-term policy priorities for achieving this ambitious goal.

from :


Strong Philippine growth in Q3 marks fiery Duterte’s start

MANILA (AFP) – The Philippines became developing Asia’s fastest-growing major economy in President Rodrigo Duterte’s first three months in office, officials said Thursday (Nov 17), even as his fiery rhetoric hit the peso and stock prices.

The economy expanded 7.1 per cent on-year in July-September, beating the consensus forecast of 6.8 per cent, Economic Planning Undersecretary Rosemarie Edillon said.

That was faster than China’s 6.7 per cent and beat other major emerging economies for the same period, Edillon said in a statement. India is due to report at the end of the month.

The news surprised experts after Duterte sparked concerns among foreign investors over his controversial war on drug crime and a decision to pick fights with the United States and the United Nations on the issue.

“All things considered, our economy’s strong growth in the third quarter is a very good sign of things to come,” Edillon added.

The country needed 6.9 per cent growth in final three months of the year to hit the top end of its 6-7 per cent target, she said.

Edillon said strong investment growth, particularly in construction and infrastructure, along with upbeat consumer spending drove the expansion, encouraged by low inflation and low interest rates.

Exports jumped 7.8 per cent.

While the growth of salary remittances by the country’s huge overseas work force slowed, this was balanced out by a 2.9 per cent growth on-year in agriculture, reversing five straight quarters of decline caused by typhoons and drought.

“It was a surprise for the financial markets,” First Grade Holdings securities analyst Astro del Castillo told AFP, referring to the growth figure.

“It affirms our view that fundamentals remain intact despite the political noise.”

The country’s stock market, which is at a seven-month low, rose one percent Thursday but the peso remains stuck near eight-year lows, with analysts blaming political developments as well as expectations the United States will raise interest rates.

The US dollar was up 0.2 per cent at 49.40 pesos in late morning trade, with analysts warning it could surge to 50 pesos by the end of the year.

In concerns echoed by other foreign business groups, international credit rating agency Standard & Poor’s warned in September that Duterte’s crime war threatened the Philippine economy and endangered its democratic institutions.

He won elections in a landslide in May after vowing an unprecedented crackdown on illegal drugs in which 100,000 people would die.

More than 4,000 people have been killed since he took office on June 30. About 1,800 were shot dead by police and about 2,600 others were murdered by unidentified attackers, according to official statistics.

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