The Department of Finance’s chief economist, meanwhile, on Friday urged additional investments in public infrastructure to support robust growth.
“To sustain economic growth, more investment in infrastructure such as in power and transportation should be mobilized,” Finance Undersecretary Gil S. Beltran said in an economic bulletin.
Financial institutions were also more bullish this year as the country holds presidential elections this coming May.
“For 2016, we reiterate our GDP [gross domestic product] growth forecast of 6.5 percent, which reflects our view that the elections in May will likely further boost already healthy domestic demand, rather than act as a headwind. We expect more fiscal support to growth from further progress on the implementation of infrastructure projects, which should also crowd in private investment and FDI [foreign direct investment],” Japanese financial giant Nomura said in a Jan. 28 note.
For Metrobank Research, growth in 2016 is expected at 6.3 percent, research analyst Pauline May Ann E. Revillas said in a note on Jan. 28.
“Government spending growth is seen to be sustained until at least the first half as the government front-loads its budget expenditures. Consumption spending will remain robust amid the still soft commodity prices, low interest rates and solid remittance inflows. Election spending is expected to support key services such as transportation, communication and storage, business activities, and retail trade. A slight pickup in manufacturing is also seen as exports of electronics slightly improve,” Revillas explained.
However, the agriculture sector is seen remaining “weak” amid the onslaught of the dry spell due to the El Niño weather phenomenon during the first semester, she said.
For ING Bank Manila senior economist Joey Cuyegkeng, the economy would grow 6.2 percent this year on the back of “support coming from government infrastructure spending as well as election spending,” noting that the Aquino administration has already front-loaded spending ahead of the March 25 start of the election ban on the rollout of government projects.
Citi Research said it raised its 2016 GDP growth forecast to 5.4 percent from 5.1 percent previously, although robust election spending could not sustain strong economic expansion by the second half. “Amid the global economic slowdown and market volatility, the post-election investment momentum should slow down,” Citi Research economist Jun Trinidad said in a Jan. 28 note.
“Learning curve effect as the new government takes over weighs on fiscal spending while the business community awaits the new policy agenda. From first-quarter growth of 7.4 percent year-on-year, we expect domestic demand to ease to sub-5 percent year-on-year in the fourth quarter but with consumption in the driver seat,” Trinidad explained.
Also, “lacking meaningful 2016 export gains restrain prospects” for faster economic growth this year, he added.
from dealstreetasia correspondent, Tomas S. Noda III :
Private investments by ADB soars 40% to $2.6b in 2015, covering Asian frontier economies
Manila-based Asian Development Bank (ADB) recorded private sector investments of up to $2.6 billion in 2015 with over 40 per cent of transactions were in “frontier economies” or lower-middle-income and low-income countries.
The figure is also a 37 per cent increase from 2014, and 62 per cent higher than in 2013.
ADB president Takehiko Nakao said they believe private sector is a key engine of growth in developing Asia and a critical partner in alleviating poverty.
“We are substantially expanding our private sector financing and investment operations to meet the rapidly changing needs of this dynamic region,” Nakao said. “By promoting an improved business climate, with enhanced access to more flexible financing solutions and trade facilitation tools, ADB is helping the private sector create high quality jobs and increase living standards across Asia and the Pacific”
ADB earlier disclosed it made investing in frontier economies a priority, citing the institution focuses its capital on countries that have traditionally had more difficulty in securing private sector financing.
ADB reported the expansion has brought its private sector investment portfolio to increase to over $8 billion, and its private sector operations are now targeted to double from current levels by 2020.
The bank recently revealed its approvals of loans and grants, technical assistance, and co-financing increased 19 per cent in 2015 or $27.15 billion compared to $22.89 billion in 2014.
Alongside the growth in overall volume, ADB’s private sector operations also reached record levels in strategic priority sectors in 2015, including climate change, frontier economies, gender equality, and inclusive business.
Among ADB’s notable frontier economy transactions included its first ever deal in Bhutan to support agribusiness, its first power and telecommunications financing in Myanmar, its first liquid natural gas deal in Pakistan and several financial institutions’ transactions in the southern Caucuses and Central Asia.
Also over 30 per cent of private sector transactions in 2015 were focused on climate change and renewable energy, including the first “green bond” in the region for a geothermal operator in the Philippines, an innovative credit-enhanced project bond for the refinancing of a wind power company in India, and the financing of new wind power generation project in Thailand. Of the nine private sector energy investments approved in 2015, seven are considered “green projects”.
Likewise ADB continued to ramp up its efforts to create more commercially-viable public-private partnerships (PPP) in the region, highlighted by its service as transaction advisor for the Philippines’ largest ever PPP, the $3.8 billion investment in the North South Railway and commuter rail line.
from Business Mirror’s correspondent, Roderick L Abad :
Fast-growing tourism industry to boost PHL economy–DOT
THE Philippine tourism industry is growing faster than the global and Asian average and is seen pushing the country’s economy from 2019 to 2021.
At the launching of the Hospitality Investment Conference Philippines in Makati City on Wednesday, Department of Tourism (DOT) Undersecretary Benito Bengzon Jr. said inbound foreign tourists reached more than 5.3 million in 2015, 10 percent better than the 4.8 million arrivals in 2014.
This is higher than most countries in the region, which collectively grew by 5 percent with a total of 277 million visitors last year and, likewise, greater than the 4.4-percent hike to 1.2 billion travelers across the globe, as per the United Nations World Tourism Organization.
Revenue-wise, the tourism sector generated around $6 billion in 2015, mainly due to higher visitor expenditures and longer stays.
Its contribution to GDP was more than 8 percent, while employment has reached close to five million.
“Overall, the economic outlook remains positive. Our estimated GDP growth of 5.7 percent in 2015 is still one of the best in the region. This is expected to increase to about 6.1 percent in 2016,” Bengzon said.
Aggressive travel campaigns, increased air traffic and improved infrastructure are among the driving factors of robust tourism in the country.
The DOT undersecretary noted the government’s liberalized civil aviation policy, which has resulted in more visitor traffic to other gateways, such as Mactan-Cebu, Kalibo, Clark and Davao.
“These are just some of the investment areas that will be accessible to more international flights from short and long-haul markets and which you may want to seriously consider for investment,” he said.
Bengzon added that the “It’s More fun in the Philippines” initiative launched four years ago has created a buzz for the country that lured more visitors. The campaign gained international citations for its various destinations.
“We believe that our sustained advertising campaign has created a higher awareness level around the globe and helped us gain all these recognitions,” he said.
As an offshoot of the successful initial campaign, the DOT then launched the Visit the Philippines Year 2015, and this year kicked off a first of its kind: Visit the Philippines Again 2016.
This is the first back-to-back tourism initiative aimed at sustaining the DOT’s global advertising presence, according to the official.
At a sideline interview, he told reporters that they also have addressed infrastructure requirements by entering into a convergence program with the Department of Public Works and Highways.
Started in 2013, the program aims to ensure that access roads to key tourist sites are built and properly maintained.
“We allocated about P15 billion in 2015. [In] 2016, we’re looking at about P24 billion,” he said, adding: “Just a few examples, we’ve developed a number of access roads in the province of Albay. In Cagayan de Oro, we’ve also worked for the development of roads there.”
The DOT also forged a similar initiative with the Department of Transportation and Communications to guarantee that major airports and seaports are ready for the influx of visitors.
Bullish on a more equitable distribution of visitor traffic nationwide, the tourism undersecretary sees tourist arrivals reaching 6 million this year, generating $6.5 billion in revenues.
He also expects tourism’s GDP contribution at around 10 percent to 12 percent in the next three to five years.
To help achieve such goals, the DOT’s overall game plan for tourism is anchored on the National Tourism Development Plan of 2011 to 2016. Covering the period 2017-2022, it will focus on encouraging more investments and ensuring inclusive growth.
“We will come up with an official title for the plan. But for now, we are just using the generic term ‘Successor Plan’,” Bengzon said.
“[With this blueprint], we will have to continue to work on air access because we are almost entirely dependent on air traffic to bring our visitors.
We would have to continue to expand the capacity and continue to widen the offers in terms of products and services. And then, of course, continue empowering our stakeholders,” he stressed.
from Business Mirror :
Construction in full swing: Commercial sector shows no signs of slowing down as developers off to a strong start this 2016
IF the latter part of 2015 and the first quarter of this year would be any indication of how busy and vibrant the entire 2016 will be for the Philippine real-estate sector, it would be safe to say that we’re likely bound to surpass the milestones of the past year.
While the residential sector has been reaping the fruits of continued investments over the past few years, players within the commercial development sector, most notably, are now starting to enjoy an increasing growth momentum as more and more developers venture outside of Metro Manila.
ArthaLand and Robinsons Land Corp. (RLC), for example, have both began strengthening their presence in Cebu, which has earned the reputation as the most vibrant investment destination in the Visayas. ArthaLand plans to promote its sustainable building culture by putting up an “energy-efficient and environmentally sustainable office building” also in Cebu City. The company recently acquired a property in Cebu via its subsidiary, Cebu Levana Land Corp., and plans to offer approximately 51,000 square meters of office space for the region’s offshoring and outsourcing sector (O&O) players.
Meanwhile, the latest Philippine Property Market Monitor from Jones Lang LaSalle reported that RLC is set to inaugurate an office building in Cebu City, which will take up about 30 percent of its 4.6-hectare property that also houses the recently opened Robinsons Galleria Cebu. This is deemed to be a welcome development for commercial locators in Cebu, particularly for those engaged in its O&O, as the facility will be offering a GFA of close to 9,500 sq m.
Booming growth beyond Metro Manila
Back in Luzon, developers are also keen on building the next thriving investment districts outside of Metro Manila. In Clark at Northern Luzon, construction activities will likely hit a record high in the months to come following the recent announcement of two massive development projects: Global Gateway Development Corp.’s (GGDC) Aeropark Campus and the 35,000-hectare Clark Green City.
The $150-million Aeropark Campus, one of the more remarkable investments initiated by Kuwaiti investors GGDC, promises to be a major development that will help shift the focus of growing industries away from Metro Manila. The project, which will host more than 5.8 million sq m of premium office, logistics, retail, hotel and residential space, is expected to generate at least 10,000 jobs during the first few years of its operations. That number is seen to balloon to at least 300,000 jobs once the entire project is completed. Clark Green City (CGC), meanwhile, is seen to lure more foreign investors as state-owned Bases Conversion and Development Authority (BCDA) continues to facilitate development for the 9,450-hectare master-planned property inside the Clark Special Economic Zone. Once completed, the entire CGC has the potential to generate a gross output of at least P1.57 trillion annually, apart from facilitating the continued growth of more areas in Northern and Central Luzon.
Supply more than meets current demand
The abundance of office spaces in other areas within Metro Manila continues to complement the increasing demand and confidence of local and foreign investors.
A recent insight shared by experts from Jones Lang LaSalle revealed that, as we speak, there’s a total of 1 million sq m of available office space spread out among areas like Makati City, Ortigas, Bonifacio Global City, reclaimed areas in Manila Bay, and Alabang in Muntinlupa. Of this grand total, at least 15 percent to 20 percent will be taken up by business-process outsourcing (BPO) companies, as established firms expand their operations and new players come in. All of these developments confirm the earlier analysis made by Lamudi Inc. Founder and Managing Director Jacqueline van den Ende, who was among the thought leaders I spoke to for one of my trend reports prior to the end of 2015. “Developers are looking to go provincial due to the increasing scarcity of available land.
A couple of very big projects are being launched, especially in Cebu and in other provinces.…The office market in Manila will continue to be very strong. We see a lot of strata-titled office developments launched this year, which I think will be huge in 2016. Metro Manila’s office market is tight with very few properties coming online.
This is especially true in non-BPO-type offices. This presents an opportunity for investors.” We’re definitely on the lookout for how all these exciting developments will shape up this year. Great times ahead, everyone!
from goodnewspilipinas correspondent, GNP Team :
World’s largest cruise company to hire 30,000 Filipinos
American cruise ships belonging to the world’s largest cruising fleet will be hiring 30,000 Filipino seafarers over the next five years.
Royal Caribbean Ltd (RCL) announced to media it intends to expand its current 11,000 Filipino crewmen to 30,000 as it brings its routes to Asia.
The expansion will make Filipinos comprise a third of the total manpower in the world’s largest cruising company. About a fifth of maritime professionals worldwide are Filipinos.
To facilitate the expansion, RCL will be setting up a direct hiring center in the country with Philippine Transmarine Carriers. The center will begin operation in May.
RCL Chairman and CEO Richard D. Fain said they are prioritizing the hiring of Filipinos because of suitability to hospitality jobs. Fain noted the Filipino “infectious happiness” is an advantage when providing service to passengers.
Royal Caribbean owns six brands: Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises, CDF Croisieres de France, and TUI Cruises through a 50% stake.
The RCL operates a total of 43 ships, with six more under construction contracts and two on firm order. It has presence in around 490 destinations on all seven continents.
Filipino seamen are now the largest nationality group on the cruising company.
from Philstar’s correspondent, Richmond Mercurio :
More jobs at Bataan freeport
MANILA, Philippines – The Authority of the Freeport Area of Bataan (AFAB) expects to generate more employment in the next few years as investors in the industrial zone continue to increase.
AFAB said the newly registered locators in the freeport are expected to create at least 4,900 jobs in the next three years.
For last year, AFAB said the number of employees hired by registered locators and manpower agencies rose to 25,803, 29 percent higher compared to the 20,017 workers recorded in 2014.
“The Authority of the Freeport Area of Bataan welcomed this new development. Since 2010, the administration has been working hard to bring more investors and big manufacturing corporations to the freeport,” AFAB chairman and administrator Deogracias Custodio said.
“The investments pledged by the locators are felt by the people on the ground through the opening of more job opportunities. We assure the national government and the people that we will continue to work hard and bring more investments to contribute to the growth of the local economy,” Custodio added.
Custodio said the employment rate in the freeport has increased as not only new companies started operating, but also as the existing locators have expanded their operations as well.
Aside from the newly-signed locators last year, AFAB said registered locators are currently in need of over 2,600 employees.
Among the locators hiring are Mitsumi Phils. Inc., Perpetual Prime Mfg. Inc., Essilor Mfg. Phils. Inc. and Dong-In Group of Companies’ Mountaineering Instruments Corp. and Edge Soft Good Solutions Inc.
AFAB said there are 114 registered locators in the freeport as of end December last year.
The enterprises include Korean, Taiwanese, Chinese, American, Japanese, British, Bahrainese, French and German businesses.
The Freeport Area of Bataan has been the country’s fastest growing freeport from 2012 to 2014.
It is seen to be an emerging fashion manufacturing hub of the Philippines as it has a cluster of companies producing high-end brands of garments, apparel, shoes and accessories.
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