Here’s some select articles about Philippine Real Estate and our Economy from various newspaper correspondents that matters for your reference. Take note that these articles when assessed actually guides us locally what direction the economy is going, what kind of issues our government is going through and generally, and how this affects our real estate market. News directly affects investors / businessmen on their assessment of what business decision to make, this could be from the stock market ( which is a good barometer ) to daily activities ( hiring of workers, construction supply chain, and other economic variables.
here’s an article from business.inquirer.net correspondent, Roy Stephen C. Canivel :
Big German firm investing $50M in Batangas Plant
Trade and Industry Secretary Ramon M. Lopez said that German firm Knauf Gips KG, the world’s leading manufacturer of gypsum-based plasterboard, is setting up a $50-million plant in Batangas, marking the start of local production for both domestic and overseas markets.
Lopez, who is in Germany, said he has had a meeting with Knauf Gips managing partner Alexander Knauf during his visit to the European country, where he also held a forum on the government’s “Dutertenomics” initiative.
The trade chief said the investment was in recognition of the fast-growing Philippine market amid the “stability of business environment in the Duterte adminisration” and the quality of the Filipino workforce.
The investment, with initial employment expected to generate 100 direct jobs, is expected to start commercial production in early 2018. Lopez said the company has also provided space for future expansion.
The group’s investment in the Philippine market marks another addition to the group’s 150 production facilities and sales organizations in more than 60 countries, employing around 26,000 workers.
“DTI and BOI [Board of Investments] committed to provide assistance in documentary requirements and accredited contractors as they aim to commence commercial production toward early 2018,” he said.
In May this year, Knauf Gypsum Philippines, Inc.—a partnership between Knauf Gips KG and Knauf Gypsum Philippines—broke ground for the manufacturing plant within the industrial park of the Udenna Group in Calaca, Batangas.
In a statement last May, Murray Read, CEO of Knauf in Asia and the Pacific, said the investment reflected the company’s confidence in the Philippine economy, noting that they hoped “to contribute to the Philippines’ growth by creating employment opportunities while serving the plasterboard requirement of its booming construction industry.”
here’s an article from philstar.com correspondent, Louise Maureen Simeon :
Udenna investing in $200-M Rubber Manufacturing Plant in Mindanao
MANILA, Philippines – Udenna Corp., the holding company of businessman Dennis Uy, is investing in the country’s first-ever rubber manufacturing plant, an official of the Department of Agriculture (DA) said.
DA-attached agency Philippine Rubber Research Institute (PhilRubber) said Udenna would now serve as the new corporate vehicle for Uy’s investment in the $200 million rubber plant in Mindanao instead of Phoenix Petroleum Philippines.
“Udenna is bigger. Phoenix is limited to distribution and storage of petroleum only. We will be signing a new MOA (memorandum of agreement) with Udenna,” PhilRubber executive director Rodolfo Galang told The STAR.
He said Phil Rubber and Udenna are in the process of forming committees that will conduct a feasibility study on the rubber plant.
Udenna is also expected to ink another agreement with Finland-based tire company Black Donuts Engineering Inc., which will build the plant.
“Black Donuts will do the proposal for the factory, then Udenna and the DA will have to look at it and assess and evaluate. The feasibility study is targeted to be finished within the year,” Galang said.
However, Galang clarified that the $200-million investment may not entirely come from Udenna as the agency is also open to inviting other interested parties.
Black Donuts, which is involved in the establishment of several tire factories globally, earlier pledged to help explore sources of funding for the project
The planned manufacturing plant will cater to domestic consumption for the production of tires for passenger vehicles, cargo, small pick-ups and agricultural machineries.
It is estimated to produce four million tires per year. One tire averages 10 kilograms and is composed of 40 percent natural rubber from the estimated 130,000 hectares of local rubber farms.
This will translate to about 16,000 metric tons (MT) more of rubber to be planted and produced annually.
Also part of the plan is the installation of a new line that will manufacture motorcycle and bicycle tires. This is expected to employ about 800 Filipinos.
Data from the Philippine Statistics Authority (PSA) showed majority of the total rubber production comes from Zamboanga Peninsula and the Soccsksargen.
At present, there are only 25 manufacturing and processing plants nationwide, majority of which are into the production of tires.
The country’s P12-billion rubber industry remains underdeveloped compared to other countries such as Thailand and Malaysia.
This is due to the inadequate supply of quality planting materials, low productivity and poor handling, resulting in low-quality rubber.
Poor rural infrastructure, less investments from private and public sectors and lack of marketing and promotional initiatives in the global market have also contributed to the poor performance of the country’s rubber industry.
from businessworldonline.com correspondent, Bienvenido S. Oplas, Jr. :
Coal Power and Economic Development
Cheaper and stable energy means cheaper production costs for the industrial, agricultural, and services sectors of the economy. Cheaper energy also results in increased convenience for consumers too as many activities now are impossible without stable electricity supply.
In the modern history of Asian economies’ rapid growth, the use of coal power is an important contributor for their economic expansion.
These numbers show three important things:
(1) Countries that have high and fast coal consumption are also those that experienced faster economic expansion (at least three times expansion of GDP size). Most especially China, India, South Korea, Indonesia, Vietnam, Malaysia, and Philippines.
(2) Countries with declining coal use are also those with slow economic expansion (below three times expansion of GDP size). Most notable are the US, Russia, Germany, and UK.
(3) Philippines’ coal use is actually small compared to its neighbors; its 2016 use is just nearly 1/2 of Malaysia and Vietnam’s consumption, just 1/3 of Taiwan’s and almost 1/5 of Indonesia’s. South Korea, Japan, India, and China’s consumption are many times bigger than the Philippines’.
Recently, groups have suddenly scored seven coal power plants that entered into power supply agreements (PSA) with Meralco last year. These coal projects are (1) Atimonan One Energy (A1E) 1,200 MW, (2) Global Luzon (GLEDC) 600 MW, (3) Central Luzon Premiere (CLPPC) 528 MW, (4) Mariveles Power (MPGC) 528 MW, (5) St. Raphael Power (SRPGC) 400 MW, (6) Redondo Peninsula (RPE) 225 MW, and (7) Panay Energy (PEDC) 70 MW.
This covers a total of 3,550 MW of stable and affordable energy that can lead to cheaper and reliable electricity supply for more than 20 million people in Metro Manila, Bulacan, Rizal, Cavite, Laguna, and parts of Batangas and Quezon provinces.
These groups — Center for Energy, Ecology, and Development (CEED), Philippine Movement for Climate Justice (PMCJ), Sanlakas, Freedom from Debt Coalition (FDC), Koalisyong Pabahay ng Pilipinas (KPP), Power for People (P4P) member organizations, others — argue that coal plants are detrimental for the people’s health and livelihood as well as bad for the environment.
They are wrong.
What is bad for the people’s health and livelihood are more candles and noisy gensets running on diesel when there are frequent brownouts coming from intermittent, unreliable renewables like solar and wind. Candles are among the major causes of fires in houses and communities.
What is bad for people’s health and security are dark streets at night that contribute to more road accidents, more street robberies, abduction and rapes, murders and other crimes. Many LGUs reduce costs of street lighting when electricity prices are high (ever-rising feed-in-tariff or FiT for renewables, more expensive oil peaking plants are used during peak hours, etc.). Expensive and unstable electricity can kill people today, not 100 years from now.
Seeking to disenfranchise some 3,550 MW of stable and cheaper energy supply from seven coal plants is suspicious. There are no big hydro, geothermal, and biomass plants coming in. Wind and solar are limited by their intermittent nature, have low capacity factors, high capital expenditures, and often are located far away from the main grid. The only beneficiaries of disenfranchising big capacity coal plants then would be the owners of new natural gas plants.
Are natural gas cheaper than coal power? From the recent experience of Mindanao where many big coal plants were commissioned almost simultaneously, the answer seems to be No. The generation price in Mindanao has gone down to below P3/kWh, on certain days even below P2.50/kWh. Which means coal power has big leeway for lower price if competition becomes tighter. This cannot be said of natural gas plants here.
Consumer groups and NGOs should bat for cheaper, stable electricity. If they fight for something else like intermittent and expensive renewables, or more expensive gas plants, then they abdicate their role as representatives of consumer interests. Pathetic.
Bienvenido S. Oplas, Jr. is the head of Minimal Government Thinkers and a Fellow of SEANET, both are members of Economic Freedom Network (EFN) Asia.
here’s an article from businessmirror.com from the editorial section :
Why the Philippine Peso is Down
WE live in a time when it seems to be difficult to get beyond the headlines to the details that genuinely matter.
If you went to the supermarket this past Friday and the price of pork pigue was P180 per kilo and today it is P220, what would you call that? You might say that pork is more expensive today than last Friday, but what does that mean? It means that the price (value) of pork denominated in pesos is higher. Conversely, and also accurate, is that pesos are worth less as measured in pork than before. Therefore, pork is “stronger” and the peso is “weaker” in terms of the pork/peso exchange rate.
There are many reasons for the fluctuations of the pork/peso rate as there are for the peso/dollar rate. But you do not see any headlines like “Peso weakens anew against pork” as you do with the dollar. Of course, the currency-exchange rate affects many more factors in the economy than the price of pork. But is the concern about the peso/dollar rate justified? Does it tell us anything that is economically important?
In 2013 the exchange rate was 40.65 to 1 dollar. The US dollar index was at 79.23 against a basket of currencies. The dollar index has appreciated to the current 95.39 even as the peso depreciated to the current 50.50. The dollar has gained 20 percent against the global currencies; the peso has lost 24 percent in value against the US dollar. Why has the peso depreciated more against the US dollar than other currencies?
One major and overriding influence on currency-exchange rates is interest rates. The US Federal Reserve has raised rates twice this year. In anticipation of that, the dollar index moved to a high of 103 in January. The Bangko Sentral ng Pilipinas has said repeatedly it is not going to raise local interest rates, making it less desirable to own pesos and deposit in local banks. Look at where the Philippine rates are in comparison to our neighbors.
The Philippine base rate is 3 percent. Indonesia is at 4.75 percent, and Vietnam at 6.5 percent. So, if you want to park your money someplace, the Philippines is not at the top of the list.
However, since January 2017, the peso has lost only 2 percent (from 49.52 to 50.50) against the US dollar compared to 6 percent against the yen and almost 9 percent to the Australian dollar. But the biggest loss has been against the euro: 11 percent. Money is flowing out of the Philippines and it is not because of negative sentiment. It is because of increasing imports.
The trade deficit is the main culprit, reaching a record $25 billion in 2016 as imports rose by 14 percent while exports dropped 4.7 percent, Development Bank of Singapore noted. Total consumer spending is up 14 percent in the past two years and much of that spending is on imported raw materials like crude oil and finished goods. While April imports were flat year-on-year, both February and March posted 20-percent increases, with January up 9 percent.
Money coming in boosts the value of the peso. Money going out lowers that value. Depending on the foreigners for the health of the economy is wrong. It is our job—not theirs—to “Buy the Philippines” and “Invest in the Philippines”.
here’s an article from http://business.mb.com.ph correspondent, Chino S. Leyco :
Philippine Trade grows 13% in 5 months; Deficit widens to $2.8 billion
The National Economic and Development Authority (NEDA) said that the country should continue to promote export competitiveness, diversify its products and markets, and maximize trade agreements to sustain trade growth for the rest of the year.
NEDA-attached agency Philippine Statistics Authority reported yesterday that total trade grew to $13.7 billion in May this year, with imports and exports growing by 13.7 percent and 16.6 percent, respectively.
“Our country’s trade growth is consistent with the global pick-up. We are striding forward with world trade performers and we intend to match this growth with sound macroeconomic policies,” Socioeconomic Planning Secretary Ernesto M. Pernia said.
In January to May, total trade grew to $63.3 billion (13.9 percent), with exports and imports growing by 16.3 percent and 12.3 percent, respectively.
But the Philippines posted its biggest trade deficit since data became available, fueled by a rapidly expanding economy. The trade gap widened to $2.8 billion in May, the Philippine Statistics Authority said in a statement yesterday That’s the highest since at least January 1980.
Pernia noted that the 15.4 percent growth of total trade in May was supported by the sixth consecutive double-digit growth of exports since December 2016 and by the recovery of imports from its 0.1 percent decline in April.
In terms of markets, countries in East Asia remain strong trade partners with 48.3 percent share in export revenue and 46.2 percent share in imports.
Trade with ASEAN is also strong, with 15.7 percent share in export receipts and 26.1 percent share in inward shipments.
Meanwhile, exports to the European Union continued its third consecutive month of double-digit growth at 38.5 percent. ASEAN likewise remains a promising destination for exports, with exports to ASEAN economies growing by 25.6 percent in May.
The government expects Philippine exports to increase by about US$100 million annually in the next five years.
Travel goods such as bags and wallets can now enter the US market with zero tariff starting July 1 following the approval of the expansion of the US Generalized System of Preferences.
“As we aim to diversify our markets, we are pleased to note that our exports to Malta, United Arab Emirates, and India grew significantly,” Pernia said.
He explained that exports to Malta, India, and UAE grew by 130.6 percent, 71.9 percent, 211.9 percent, respectively, and that this is the fourth month this year that exports to UAE have almost tripled.
Trade of other Asian countries also posted double-digit growth rates led by Vietnam (25.8 percent), Indonesia (24.1 percent), Malaysia (23.4 percent), and India (22 percent).
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