Philippine Real Estate News – April 2016

real estate news 17p

hello everyone,

here’s some select articles about Philippine Real Estate and Economy from various newspaper correspondents that matters for your reference.

from Business World online Senior Reporter, Krista Angela M. Montealegre :

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Ayala to rev up manufacturing, partners with KTM

AYALA CORP. is betting big on the resurgence of the manufacturing industry as the firm kicks off a five-year plan to double earnings and increase the share of its new businesses and international operations.During the company’s stockholders’ meeting in Makati City yesterday, Ayala Chairman Jaime Augusto Zobel de Ayala unveiled a roadmap to boost the company’s net profit to P50 billion by 2020. The Philippines’ oldest conglomerate posted earnings of P22.3 billion last year.

The plan involves improving shareholder return on common equity to 15% from 12%, expanding equity earnings contribution of businesses outside real estate, banking, water distribution, and telecommunications to 20% from 10%, and hiking the share of international operations to 10% from 4%.

“Amidst the upcoming political changes, we remain optimistic about the overall environment in the Philippines. Overall, our current businesses have a clear and sustainable growth path in the coming years that we envision will perform above nominal (gross domestic product) growth,” Mr. Zobel said.

“As part of our 2020 plan, we are upbeat about our investments in new platforms, specifically along three clusters: power and transport infrastructure, healthcare and education, and automotive and manufacturing,” he said.

‘READY TO RACE’
In the same meeting, Mr. Zobel announced that manufacturing will be one of the growth pillars of the group, starting with a joint venture with Austria-based motorcycle manufacturer KTM AG.

The partnership — a 65%-35% venture led by Ayala — will start with the exclusive local distribution of KTM’s products and the manufacture of motorcycles, but it will eventually evolve into the co-development of next-generation motorcycles for the global market, the chairman said.

“What we’re showing with KTM, this is the first time we will put a full product together. Our dream was to do that for Volkswagen, and for a variety of external reasons, that didn’t happen,” he said.

The manufacturing business will leverage the expertise of Integrated Micro-Electronics, Inc. (IMI) in the automotive space, which account for 40% of the Ayala subsidiary’s business.

Ultimately, the goal is to move to a “full vehicle manufacturing capability in the form of two wheels or four wheels,” said Arthur R. Tan, president of IMI, the seventh largest automotive operations in the world and the center of Ayala’s manufacturing thrust.

With a capitalization of at least P500 million, the joint venture will initially manufacture 20,000 motorcycle units annually, 70% of which will be exported to China. The minimum investment amount was pegged at $2 million.

The new business will be housed under the Ayala Automotive unit, with production subcontracted to IMI. Manufacturing will start in the third quarter at IMI’s plant in Laguna.

“This partnership is the first of many investments as we ramp up our manufacturing portfolio. Over the years, we have built a long track record of excellence in manufacturing and engineering,” Mr. Zobel said.

“We believe that manufacturing should be a critical component for the country’s growth moving forward, providing thousands of jobs, creating numerous ancillary business opportunities, and helping drive inclusive growth for the Philippines,” he said.

Stefan Pierer, KTM chief executive officer, described the Ayala group in a press release as a “strong and capable Asian partner” and the Philippines as a “country we view as a key platform for achieving our global growth strategy.”

Mr. Pierer said Ayala Corp.’s “capabilities in manufacturing, distributorship and dealership, as well as its regional expertise and excellent reputation” makes it an ideal strategic partner for its “ready to race” aspirations.

“We look forward to a long and fruitful relationship and plan to rapidly grow KTM and its brands across Asia,” he added.

POWER PROJECTS
Meanwhile, the conglomerate sees a “slight oversupply” in power from 2017 to 2020 if the planned 5 gigawatts of energy projects will be realized, Ayala Adviser Patrice R. Clausse said.

“I don’t think there will be a pause [in new investments]. We do believe the very fast-paced expansion of power projects in the Philippines may temporarily slowdown because there will be a period of three years of oversupply,” Mr. Clausse said, adding that the conglomerate will expand its power projects on a “selective basis.”

This year, Ayala Corp. has earmarked a capital expenditure of P174 billion. Shares in Ayala added P2 or 0.26% to close at P782 apiece on Friday. — with V.V. Saulon

from business.inquirer.net correspondent, Cesar D. Mangawang :
SCIENCE-PARKr

SPPI opens leading-edge 200-ha Ecozone

A 200-hectare area for light manufacturing in Malvar, Batangas, is now available for foreign and local locators. This was revealed by Science Park of the Philippines Inc. (SPPI) chair and CEO Guillermo D. Luchangco to Inquirer Property.

Light Industry and Science Park (LISP) IV is the sixth project of SPPI, the nation’s leading private industrial estate developer. Masterplanned by US-based international interdisciplinary planning and design firm Sasaki Associates, it will soon rise on the grassy flatlands of Batangas.

The industrial area is part of an integrated mixed-use property development dubbed Malvar Cybergreen. Also included in the development are a 10-ha vibrant retail and educational destination which creates a heart for the larger Malvar community and a 40-ha residential neighborhood nestled in a picturesque setting made up of rolling hills and majestic tropical vegetation.

The unifying visual element that links each of these areas together is an open space system that utilizes the site’s scenic ravines, thus creating a distinct landscape identity. By providing a place to live, work, shop, learn and relax, this new high-quality development is expected to attract multinational and local locators, skilled employees and residents in the area.

Strategic access

Just like SPPI’s earlier industrial estates, LISP IV will provide strategic access to its locators. It is 35 kilometers away from the Batangas International Port. The industrial estate also lies alongside the Southern Tagalog Arterial Road, which links it to Metro Manila’s central business district.

It also offers these features: reliable power and water supply, state-of-the-art telecommunications facilities, park security, in-house firefighting equipment and crew, and its multiawarded programs for both environmental management and community development.

SPPI is known for its investor-friendly team whose members provide complete site management services from site location up to the locator company’s industrial park operation. This workgroup enables SPPI’s locator companies to begin the venture with great energy, involvement and competence, and focus on what they do best as soon as they come to the country.

The development of the residential and commercial components of Malvar Cybergreen will be done by Pueblo de Oro Development Corp. (PODC), SPPI’s subsidiary. PODC developed in Cagayan de Oro City the Pueblo de Oro township, a 360-ha property with residential subdivisions for various market segments and an 18-hole all-weather championship golf course designed by Robert Trent Jones II. It also put up Mindanao’s first IT ecozone approved by the Philippine Economic Zone Authority (Peza). The township not only has a commercial area anchored by SM Mall but also institutional facilities like Xavier University, hotel, church and government offices.

Track record

SPPI boasts of being a key building block to developing many of the country’s key manufacturing plants since 1989. It has almost 800 ha of prime industrial estates spread in six strategic locations across the country: 175-ha LISP I in Cabuyao, Laguna; 65-ha LISP II in Calamba, Laguna; 109-ha LISP III in Santo Tomas, Batangas; 200-ha LISP IV in Malvar, Batangas; 162-ha Hermosa Ecozone Industrial Park in Hermosa, Bataan; and 62-hectare Cebu Light Industrial Park in Mactan, Cebu.

Bruited about as a pioneer and leader in private industrial estate development in the country, SPPI manages the six industrial estates which are in various stages of development or operation.

Its initial venture, Light Industry and Science Park I, has an Ohsas (Occupational Health and Safety Assessment Series) 18001 certification, an internationally recognized health and safety management system.

SPPI is also a Peza Hall of Fame awardee in both environmental management and community development. It is the first Oscar Escobar awardee for air-quality management given by the Concerned Citizens Against Pollution.

Many firsts

SPPI claims to have accomplished the following firsts:

–LISP I and LISP II are the countryís first privately owned industrial estates to be ISO 9001 (Quality Management Systems) and also the first to be ISO 14001 (Environmental Management Systems) certified.

–The first to have won, for three consecutive years (1997-1999), Best Community Project by Peza in recognition of its exemplary activities in social and community development in the areas around its projects.

— The first industrial estate to receive a special recognition from the Environmental Management Bureau of the Department of Environment and Natural Resources and the Philippine Association of Environmental Assessment Professionals for its achievement in environmental impact assessment as a result of its leadership in environmental management and pollution control.

— The first industrial estate with a material recovery facility where materials that are sourced from locators are recycled and segregated.

— The first industrial estate to receive a special citation from PMAP for its concern for the environment.

— The first privately owned industrial estate to be granted approval to operate a Special Export Processing Zone by Peza.

— The first privately owned industrial estate to be registered with the Board of Investments.

— The first among major privately owned industrial estates to secure conversion of its land to industrial status under the governmentís Comprehensive Agrarian Reform Program.

— The first to build an interchange linking a national expressway with a privately owned industrial estate. Called Cabuyao Interchange, this was donated by SPPI to the government in December 1991.

Available data for SPPI’s three industrial estates follow: LISP I, 64 companies and 25,500 employees; LISP II, 27 companies and 9,500 employees; and LISP III, 21 companies and 5,820 employees.

LISP I has two wastewater treatment plants. The eco-friendly industrial estate has a Japanese Koi (Carp) and Tilapia-filled lagoon in the middle of the tree-laden park, which is a natural bird habitat and home to numerous local bird species and temporary refuge for migratory birds from other regions. There is a sports complex with basketball and badminton courts built by the locators association. A clinic is being run by San Jose Hospital and Trauma Center based in Gen. Mariano Alvarez, Cavite province.

LISP I was masterplanned by Pacific Engineers Consultants Ltd., the Taiwan-based subsidiary of Bechtel Corp., one of the largest construction and civil engineering companies in the United States.

Every industrial estate of SPPI provides to all its locators these world-class facilities and services: reliable electric grid; steady water supply system; centralized wastewater treatment plant; drainage and storm water management system; highway-grade road network; security and firefighting capabilities; and telecommunications facilities. It also has an administration building as well as a service and maintenance building. Transportation within the estate and health-care facilities are being provided to assist in the daily needs of its locators.

The usual features of an SPPI industrial park are the following:

— It is strategically located: near international airport and seaport for shipment of goods and raw materials; or close to expressways or main avenues.

— It is registered as an Ecozone with Peza. Its special economic zone status is proclaimed by the Philippine government.

— It has a one-stop shop: on-site park management and operations team, Peza and customs office and bank services. In addition, freight forwarding services are available to all locators.

from Manila Bulletin :

Department_of_Trade_and_Industry

DTI : PH GSP accords attracting more Japanese Manufacturers

Trade and Industry Secretary Adrian S. Cristobal Jr. said Japanese manufacturers are enticed to establish operations in the Philippines  to take advantage of the country’ s preferential trade agreements with ASEAN, the European Union (EU), and the United States (US).

The ASEAN Economic Community which came into force on 31 December 2015 allows the Philippines duty-free export privileges for almost 99 per cent of goods traded across member countries. The Philippines is also a beneficiary of preferential trade schemes of the US and EU under their respective General Systems of Preferences (GSP) and GSP+ trade schemes. In June, 2015, the US reauthorized its GSP program which provides duty-free access to over 3,500 tariff lines or products from beneficiary countries including the Philippines. Meanwhile, the Philippines, which became a beneficiary of EU-GSP+ in December 2014, has duty-free access to EU’s 6,274 tariff lines. In the first half of 2015, with the EU-GSP+ in force, Philippine exports to the EU market grew by 27 percent as compared with total figures recorded in 2014.“Our two countries can work together to take advantage of the vast opportunities for growth in the ASEAN Economic Community as well as in other large markets to which the Philippines has gained, and intends to gain, wider, and deeper market access,” he said.

Japanese firms were among the first to take advantage of these preferences to the EU, Cristobal pointed out.  Among them, the renowned bicycle manufacturer Shimano, which invested JPY 3.5 billion to access the EU market through the Philippines.

“By setting up manufacturing facilities in the Philippines, Japanese companies can avail of the duty-free markets of ASEAN, EU, and US. Products which are key export interests of Japan can benefit from significant tariff differentials if produced in the Philippines. We are in fact the only country in ASEAN to enjoy preferential treatment from the EU and the US,” Cristobal explained.

DTI cited ball bearings, motorcycles, gearboxes, and pneumatic tires as goods that are being exported by Japan and which are covered by EU GSP+ and US GSP. Other Japanese product categories are footwear and textile, preserved fruits, pineapple juice, jams and jellies which are geared towards the European market. “Japanese small and medium enterprises have the potential to build linkages between manufacturing, agribusiness and service industries,” Cristobal added.

The DTI recently launched the country’s Comprehensive National Industrial Strategy (CNIS) to support inclusive growth goals. By leveraging on the strong industry performance of manufacturing, DTI aims to stimulate growth in agriculture as inputs to manufacturing, and the service industries as enabler. CNIS aims to achieve an additional two percent growth in the country’s gross domestic product.

The DTI Secretary was the guest of honor of the Resona Foundation Seminar held at the Osaka Chamber of Commerce Building in Osaka. It was one of the several events he attended during his recent trade mission in the Osaka Prefecture.

The Resona Foundation was established by the Resona Group to promote friendly ties with the economies in Asia and Oceania. It provides financial assistance to activities and seminars that focus on issues relating to economics, politics, history, culture, and environment.

from Manila Bulletin’s correspondent, Madeline B. Miraflor :

Corn fields at Barangay Libu-o in M'Lang, province of North Cotabato are left un-harvested at the onset of the El Nino. The worsening impacts of climate change and the unpredictability of extreme weather events, such as super typhoons, frequent and intense El Nino events or droughts, are putting unnecessary stresses on the coping mechanisms of many regions in the country. Government should equip farmers with timely and localized weather information and an early warning system to enable farmers to adapt to and mitigate the impacts of climate change. The government should support resilient ecological agriculture that conserves and utilizes farm diversity.

Agriculture Sectors seeks Bold Reforms from Presidentiables

Five agriculture coalitions joined forces yesterday to seek for concrete, workable agriculture reforms from the presidential candidates, citing that before the country can have an inclusive growth, the sector needed to grow 8.0 percent a year.

 

Last year, the Philippine agriculture sector crawled to a mere growth of 0.3 percent.

Ernesto Ordoñez, the chairperson of Alyansa Agriculture, said that in terms of percentage, the agriculture sector must grow by 8 percent to 10 percent, which is twice higher than the government’s target of 4 percent, in order to consider the industry “safe and sound.”

“Right now, we are very way below the target. Government’s target is 4 percent but we could do better that that. The growth of the sector must be 8 to 10 percent for it to be more inclusive,” Ordoñez said in an interview in Makati.

He specified that despite an increase in the Department of Agriculture’s (DA) budget from P38 billion in 2011 to P89 billion in 2015, the growth in the sector has only averaged an anemic 1.5 percent, a far cry from the government target of 4 percent.

“Agriculture remains our most neglected sector, even as it employs millions of Filipinos across the country. Millions of Filipino farmers go hungry each day, locked out of formal credit, set back by unfair trade, and unable to compete in an increasingly import-dependent economy,” Ordoñez said.

Emil Javier, chairman of Coalition of Agriculture Modernization in the Philippines (CAMP), specified that the country doesn’t lack budget and policy, what it needs is an effective and stronger DA that could efficiently plan and execute reforms.

Roberto Amores, Agriculture Fisheries 2025 spokesperson, said for his part that access to finance is very important, adding that only 8 percent of Land Bank of the Philippines’ loanable funds goes to the farmers.

In general, the five coalitions pointed out that the Philippines remains by and large an agriculture country, with the sector employing 12 million people, or nearly a third of the country’s workforce.

However, the presidential candidates have so far offered little of the reforms that could push the growth of the agriculture sector.

He said that while each of the candidates acknowledged the crucial role of agriculture sector in national development, none of them offered concrete, workable platforms for addressing the “sad state of the sector.”

Elias Jose Inciong, the spokesperson of Alyansa Agriculture, said the next six years will be a crucial period for the sector because this may be the last chance to save it from completely losing its momentum.

“If we’re not able to recover our agriculture sector, what will be the future of our youth? Just the same if we’re not going to engage them in the sector, who will take over and take care of it? The next president should know very well the true value of this sector,” Inciong said.

from manilastandard.com correspondent, Boy P. :

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16 Firms self-generating 166-MW from Biomass Energy

An increasing number of private companies are learning the wisdom of generating their own supply of electricity using stored energy from farm waste, former senator Juan Miguel Zubiri disclosed.

The 48-year-old Zubiri, who authored the Renewable Energy Law of 2008, said some 16 large corporations—mostly integrated sugar producers and intensive hog growers—have put up biomass power plants with a combined installed capacity of 166.18 megawatts for their own use.

That’s certainly good news considering the tight supply of energy, what with the hot summer months that require more electricity as people need to cool down with their electric fans and air cons. After all, no one wants to die of heatstroke—a scary but big possibility with the weather bureau registering temperatures of 51 degrees in places like Nueva Ecija and Metro Manila also feeling feverishly hot with 38 to 39 degrees.

“These businesses are not only realizing substantial electricity cost-savings, they are also providing additional income to small planters and creating new farm jobs,” said Zubiri, who is also running for a senate seat in the upcoming May elections.

For sure, the move of these companies to self-generate their power needs will also free up grid-supplied electricity for other industrial, commercial and residential consumers, the former solon pointed out.

According to Zubiri, the biggest biomass energy producer for its own use is packaged food and beverage giant Universal Robina Corp., which has four bagasse-fired power plants with an aggregate installed capacity of 24.65 MW. Apparently, URC has biomass power generators in Piat, Cagayan (5-MW); San Enrique, Iloilo (7.5-MW); Manjuyod, Negros Oriental (9.4-MW); and Sta. Catalina, also in Negros Oriental (2.75-MW).

Recognition must certainly be given to the other companies that have put up their own biomass power plants to produce energy for their own use, and these are Central Azucarera Don Pedro Inc. in Nasugbu, Batangas (25.52-MW); Busco Sugar Milling Co. Inc. in Quezon, Bukidnon (24.4-MW); Binalbagan-Isabela Sugar Milling Co. Inc. in Binalbagan, Negros Occidental (19.5-MW); Central Azucarera dela Carlota Inc. in La Carlota City, Negros Occidental (18.5-MW); Hideco Sugar Milling Co. Inc. in Kananga, Leyte (11-MW); Lopez Sugar Corp. in Sagay City, Negros Occidental (10-MW); Capiz Sugar Central Inc. in President Roxas, Capiz (5.8-MW); Sagay Central Inc. in Sagay City, Negros Occidental (4.2-MW); Roxol Bioenergy Corp. in La Carlota City (4-MW); Sweet Crystals Integrated Sugar Mill Corp. in Porac, Pampanga (2.8-MW); Amley Natural Energy Corp. in Villanueva, Misamis Oriental (2.5-MW); Bayanihan Feed Products Inc. in San Leonardo, Nueva Ecija (2.25-MW); Cavite Pig City Inc. in General Trias, Cavite (1-MW); and Marcela Farms Inc. in Cortes, Bohol (0.56-MW)—and to prove that Happy Hour is an equal-opportunity column—Central Azucarera de Tarlac Inc. in Tarlac City (9.5-MW).

Zubiri added that Cavite Pig City runs a modern, 12,000-head capacity hog farm, while Marcela produces meat and poultry products, milkfish, prawn, tilapia, rice, fruits and feeds.

Many recognize that Zubiri’s authorship of the Renewable Energy Law, which seeks to lessen our dependence on imported fossil fuels, has fast-tracked the development of the country’s “green” energy resources, which has also contributed to driving jobs growth in the countryside. According to the Renewable Energy Management Bureau, more than 2.9 million jobs—mostly in construction and engineering services—have been created by the boom in biomass, wind, solar, geothermal, and hydro power projects.

Aside from the private firms’ 166-MW biomass power production for their own use, the senatorial candidate also disclosed much earlier that 18 biomass power plants, which can produce a total of 241.27-MW of electricity for grid use, can power up more than 300,000 households.

You have to hand it to Migz—who served in the Senate for four years and nine years in Congress with a perfect attendance at that—because he is really passionate about his advocacy for renewable energy. Zubiri had floated the idea of sending out in the future “floating wind turbines” to the West Philippine Sea to harness the abundant wind resources in the area to produce energy.

Although the Philippines and China continue to be locked in a territorial dispute in several areas encompassing the Spratlys, the idea is worth mulling over since advances in wind power generation technology allow the deployment of drifting wind farms that are well-suited to the West Philippine Sea to accommodate fishing and shipping lanes, Zubiri said.

The former senator says the Philippines can learn from the experience of Denmark that pioneered the development of commercial wind power, building viable wind farms out at sea where wind resources are stronger and more consistent. Denmark now produces 43 percent of its electricity from mostly offshore wind farms, and the Danish government aims to increase this to 50 percent by 2020 and 84 percent by 2035, Zubiri said, adding that the next administration should push for stronger cooperation with Denmark in developing the Philippines’ vast wind reserves for power generation, and explore the feasibility of putting up offshore wind farms that could prove to be far more potent than those based onshore.

You certainly can’t argue with that.

from Interaksyon.com :

The Philippines BOP Going up-739151 r

Foreign portfolio investments posted US$ 482M inflows in March

MANILA – Foreign portfolio investments for March 2016 yielded overall net inflows of US$482 million, a significant improvement from the US$58 million level in February, and a reversal from the US$22 million net outflows a year ago.

Foreign portfolio investments registered during the month rose to US$1.7 billion, or by 58.1 percent, from last month’s figure due to:

• renewed investor interest in government securities, coupled with positive sentiment arising from the decision of the US Federal Reserve to reduce the number of interest rate hikes in 2016 from four to two;

• the BSP’s decision to keep policy rates steady at 4 percent for overnight borrowings and 6 percent for overnight lending; and

• favorable reports on corporate earnings.

Registered investments last year were higher at US$2.1 billion due to major stock rights offerings of certain financial enterprises.

Outflows for the month increased by US$ 196 million (19.4 percent) compared to February due to profit taking. Year-on-year, however, outflows declined by US$ 897 million (or by 42.6 percent).

About 72 percent of investments registered in March were in PSE-listed securities (mainly pertaining to holding firms; banks; food, beverage and tobacco firms; property companies; and telecommunication companies), while the 28 percent balance were in Peso GS.

Transactions in PSE-listed securities and Peso GS yielded net inflows of US$77 million and US$405 million, respectively.

The United States, Singapore, the United Kingdom, Switzerland, and Hong Kong were the top five investor-countries for the month, with combined share to total of 79.2 percent. The United States continued to be the main destination of outflows, receiving 82.3 percent of total.

Registration of inward foreign investments with the Bangko Sentral ng Pilipinas (BSP) is voluntary under the liberalized rules on foreign exchange transactions. The issuance of a BSP registration document entitles the investor or his representative to buy foreign exchange from authorized agent banks and/or their subsidiary/affiliate foreign exchange corporations for repatriation of capital and remittance of earnings that accrue on the registered investment. Without such registration, the foreign investor can still repatriate capital and remit earnings on his investment but the foreign exchange will have to be sourced outside the banking system.

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Robert G. Sarmiento Properties
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