here’s some “select” articles about Philippine Real Estate and Economy from various newspaper correspondents for your reference.
from Rappler.com correpondent, Chrisee de la Paz :
APEC 2015: How to make economic growth inclusive
Growing economies in a manner that is quick and equitable is this year’s tall order, the APEC Business Advisory Council 2015 says
MANILA, Philippines – The Philippines’ sunny economy has been growing faster than most of its neighboring countries over the past years. Yet its sunny face has a gloomy flip side.
The growth has not been fully inclusive, as poverty and inequality remain entrenched. (READ:
But for the Asia Pacific Economi Cooperation ( APEC ) Business Advisory Council ( ABAC ) 2015, , inclusive growth is slowly becoming a reality.
“The whole area of inclusive growth is already becoming a reality,” Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala Corporation and a member of the 3-person ABAC, said during an interview with Rappler on November 10.
Although the Philippine economy has been growing for an average of 6.5% for the past 5 years, the country continues to have high unemployment and underemployment rates. But for Zobel de Ayala, the “tone has been set for the need to be inclusive.”
“The models have changed and emerging markets are seen as exciting new spaces for both local companies like us and multinationals addressing the needs of lower income groups. We give them products and services that engage them and formally help them enter the economy,” he added.
Big guns initiate inclusive growth
Some of the country’s business leaders cited their own initiatives to linksmall players to the supply chain.
“We look at our own group of companies as an example. Over the last 10 years, we fundamentally transformed ourselves,” Zobel de Ayala said.
He said that when the Philippines faced a water supply crisis in the mid-1990s, Ayala Corporation participated and won a bid to provide affordable water and deliver 24/7 potable supply for marginalized communities.
Ayala’s water unit Manila Water then began exporting its expertise to other markets in the region such as Vietnam and potentially, Myanmar and Indonesia.
Using a sustainable model developed to suit poor households through flexible financing options and a socialized tariff scheme, community-based cooperatives were involved as part of the supply chain and as business partners, making them part of the solution to the problem, Zobel de Ayala said. “About P60 million ($1.27 million) in jobs were generated across 1,000 low-income families.”
“For our housing, we now have have 5 brands across the spectrum of different price ranges and we even deal at subsidizing housing at the very bottom. The list goes on,” the Ayala chairman said. “This is not just a Philippine trend. It’s a trend that’s happening globally. All of those are inclusive in nature. They bring sectors that were not in the kind of legitimate, recognized economy before.”
“Part of the APEC agenda is to take that trend and facilitate it even more. Countries understand that if you can’t get growth to happen at lower levels in the income chain, then you are really not achieving the kind of value creation the whole population needs,” he added.
Tall order: Grow quickly and equally
For Tony Tan Caktiong, Jollibee founder and chairman, his business started including farmers in the supply chain years back.
“We started the farmers program a few years ago, and it was quite a difficult process to start with. People were saying the success rate is so low and asking why we were picking such a difficult project. But after a while, it works both for the company and farmers. Farmers’ income went up like 3 to 4 times now. Our procurement department is so happy with the quality of goods,” Tan Caktiong said.
“Moving forward, the question now is, how do we scale it up further?” he asked.
Growing economies in a manner that is quick and equitably distributed is the tall order of the heads of APEC member-economies and this year’s ABAC.
“Probably one way is for companies to start putting a certain ratio of procurement and say we want this to come from smaller suppliers. Of course, it will be very difficult to start with, but as things smoothen out later on, it will be a good process for both companies and small players,” Tan Caktiong said.
In a positive path
Moving forward, Zobel de Ayala said the Philippines is “in the positive path.”
“If there were to be some negative headwinds that will hit the country, our strong consumer demand equation has stood in good stead. I think what happened in many other countries, inflation have hit and the growth models slowed down and people don’t really have the purchasing power to keep the economy prime,” he explained.
Meanwhile, the Ayala chairman said, “our model has been alive and kicking for a while now. It can withstand shocks that will come our way [because] our balance sheet is strong, external debt numbers are very favorable, and our highest level inflation has been very low.”
For Guillermo Luz, co-chairman of the National Competitiveness Council, the Philippines and the rest of the APEC region will soon see strengthened cooperation between governments and private sector to boost inclusive growth.
“Generally, inclusive growth has been sort of attached to governments. The flip side of that coin is inclusive business. You’ve heard plans on how to incorporate small- and medium-scale businesses to large corporation supply chains, so that is the whole inclusives business model,” said Luz, who is also the ABAC Philippines alternate member.
“Whether it is a service or a manufactured product, you will hear that (inclusive business) come up more and more often,” Luz said. (READ: APEC 2015 : Where PH stands n the Trans-Pacific Partnership )
The Philippines, for the second time, is hosting APEC, under the theme, Building Inclusive Economies, Building a Better World. The first time the Philippines hosted the APEC leaders’ summit was in 1996, initiating an action plan on facilitating free trade in the region.
The APEC Leaders’ Summit is on November 18 and 19. – Rappler.com
from Business World’s correspondent, Lenie Lectura :
Alsons in talks with potential investor
ALSONS Consolidated Resources Inc. (ACRI) of the Alcantara Group is in talks with potential investors, both foreign and local, in line with its plans to further cement its position in the lucrative power sector.
The company is mum on this, but a highly placed source identified two of the many potential investors that could be interested to join the company.
“The two possible interested investors are MGen [Meralco PowerGen Corp.] and Malakoff of Malaysia,” the source said.
MGen is the power-generation arm of the Manila Electric Co. (Meralco). It wants to build a portfolio of highly fuel-efficient, highly reliable power-generating facilities of up to 3,000 megawatts (MW) in joint venture with strategic partners.
The power projects of MGen in the pipeline include the 455-MW plant of San Buenaventura Power Ltd. in Quezon province, 600 MW by Redondo Peninsula Energy Inc. in Subic, and 1,200-MW Atimonan One Energy also in Quezon. These are all coal-fired power plants. Meralco officials did not comment when asked about its interest to invest or partner with the Alcantara group.
Malakoff is the leading power producer in Malaysia, with an effective capacity of 5,346 MW comprising of six power plants that run on oil, coal and gas. On the international front, as an independent water and power producer, it owns a net capacity of approximately 690 MW of power production and 358,850 cubic meter per day of water desalination. Its overseas projects are in Bahrain, Saudi Arabia, Algeria, Australia and Oman.
The source did not identify the other potential investors. A Bloomberg report last week stated that company chief financial officer Luis Ymson said there are four groups seeking to acquire a stake in the company. It is also possible, added Ymson, that direct stakes in the company’s power plants may also be sold if preferred by investors.
ACRI is developing two coal-fired power facilities to help provide a stable source of baseload power for Mindanao and ensure long-term power security for the island. These are the 105-MW San Ramon Power Inc. plant in Zamboanga City and the 210-MW Sarangani Energy Corp. plant in Maasim, Sarangani.
The first 105-MW section of the SEC plan is now in the advanced stages of testing and commissioning, and will begin commercial operations in the first quarter of 2016 with an initial capacity of 105 MW.
The SEC plant is expected to be fully operational at full 210-MW capacity in 2018.
The SRPI power facility in Zamboanga City is scheduled to begin construction in 2016 and operational by 2019.
The company also owns three diesel-fired power plants that have significantly contributed to alleviating the power shortage in Mindanao. These are the 103-MW Mapalad Power in Iligan City, 100-MW Western Mindanao Power in Zamboanga City, and the 55-MW Southern Philippines Power in Alabel, Sarangani Province.
ACRI is likewise entering the renewable-energy sphere with the development of a 15-MW run-of-river hydroelectric plant along the Siguil River in Maasim, Sarangani.
The Siguil plant is set to begin construction in 2016.
ACRI-affiliated power facilities are expected to have a total generating capacity of 588 MW by 2019. This capacity will fulfill more than 25 percent of Mindanao’s projected peak demand for that year.
The Alcantara Group, through its other subsidiaries aside from ACRI, is also engaged in aquaculture and agribusiness, property development and services. It has been an active player in the economic development of Mindanao and the rest of the Philippines for over 50 years.
In October, ACRI said it continues to look for equity and debt raising options for its expansion plans.
Last week, ACRI said it would sell as much as P7.5 billion in bond. It is working with ING Bank NV to raise the amount for the company.
Alsons Vice President for Business Development Joseph Nocos said earlier that the company intends to provide a sustainable solution to Mindanao’s five-year-old power shortage.
“We are diversifying. The business is evolving. We need to establish our position in the market and we are doing that by developing power supply solutions to our customers from base load to peaking to ancillary.
“We have coal. We have diesel and hydro. So, in that sense, we can come close to mimicking NPC (National Power Corporation) before. In order for us to be a viable supplier of electricity in Mindanao, we need to have that kind of diversity. To me, that transition is existing,” he said.
He said all of the company’s power projects have off-takers to ensure the viability of the project as well as the interest of its shareholders. “We will no build power plants without off-takers. That’s the way to do business,” added Nocos.
from Philippine Daily Inquirer’s correspondent, Amy R Remo :
Clark Green City to break ground in early 2016
BCDA, FILINVEST TO DEVELOP 288 HECTARES OF NEW URBAN HUB
“We are now focusing on (holding) the groundbreaking (ceremony) for the Clark Green City within the first quarter of 2016 because we are already finalizing the contract with Filinvest. Hopefully, we’ll be signing that (contract) not later than December, and then by January 2016, we’ll have a soft launch of the city—the first 288 hectares. It’s very important for us to make this happen,” Casanova said.
Following the signing of the contract, the BCDA is expected to work on the detailed masterplan as well as the marketing and financing of the development, he said.
“We’re going to focus on the Phase 1 development of the Clark Green City. Our work is already cut out for us… We’ll assist our joint venture partner. It’s not just Filinvest Land as the BCDA shares in the burden of making the projects successful. Given all the factors and the growth of the economy, we believe that it will be a very successful launch. We want President (Aquino) to lay the time capsule for the new city,” Casanova said.
Filinvest Land tendered its bid to develop 288 hectares of prime land in Clark Green City last September. It was the lone proponent that submitted a valid bid amounting to P160 million, which was payable upon signing of the contract.
Once the contract has been signed, Filinvest will have to forge a joint venture partnership with the BCDA, which in turn will be taking the minority share of 45 percent. The joint venture, which will be valid for 50 years and can be renewed for another 50 years, shall have the full development and usufructuary rights over the 288-hectare property.
Meanwhile, Casanova said they will continue to look at the opportunities in Fort Bonifacio where the BCDA still has a sizeable inventory.
from Manila Times’ correspondent, Mayvelin U. Caraballo :
‘Economy to keep growing amid risks’
Barclays, DBS see end-2015 rebound in remittances, consumption
Weak export demand continues to pose risks to the Philippine economy but the country’s strong current account position will provide enough support to sustain growth, two multinational banks said.
UK-based Barclays, in a quarterly research note, said the country’s growth momentum was holding up but would likely moderate given the El Niño weather phenomenon, slow public spending and weakening overseas Filipino worker remittances.
Singapore’s DBS, meanwhile, said merchandise exports could contract much more than expected. It was more upbeat on the economy, noting that the exports fall could be traced to base effects.
Both multilateral banks were optimistic of a yearend rebound, particularly for remittances and attendant consumption.
“While investment momentum remains firm, the agriculture sector contracted, largely due to strengthening El Nin?o weather conditions. This combination led to considerable weakness in rural incomes and overall domestic demand,” the bank said.
“Despite steady growth in private investment, lack of fiscal spending continues to pose a challenge,” Barclays added.
With El Nin?o expected to remain firmly in place until mid-2016, the bank said the Philippine economy is likely to grow by just 5.5 percent in 2015 after three years of above 6-percent growth.
Another near-term risk, Barclays noted, is an unexpected weakness in overseas workers’ remittances. August, in particular, saw a 0.6 decline from a year earlier, the first since April 2003.
“The drop slowed the year-to-date growth in remittances to 4.3 percent year-on-year from 5.8 percent a year earlier and raised some questions about the sustainability of private consumption in the short term,” it said.
Still, Barclays said the weakness would be transitory. The decision by overseas workers to hold off from sending money home due to a weakness in their host countries’ currencies could result in higher remittances closer to the holiday season, it said.
“All in, we believe a potential third quarter decline in remittances would be temporary and unlikely to be a significant risk to the economy. We continue to forecast 3.5 percent growth in remittances in 2015,” it added.
Above all, Barclays said the Philippines was still enjoying one of the strongest external positions among emerging markets. In particular, the current account is expected to remain solidly in surplus despite the decline in remittances.
The investment bank pointed out that tourism receipts were improving and that lower oil prices were providing a significant cushion for the overall trade balance —factors it believes will persist in 2016.
“We expect the current account surplus to be 4.5 percent of GDP (gross domestic product) in 2015 and decline marginally to 4 percent of GDP in 2016,” Barclays said.
DBS, in noting September’s 24.7-percent contraction in merchandise exports, said the full- year decline could be closer to 5 percent instead a previously expected 2 percent.
“Clearly, the government’s official target of 5 percent growth this year is beyond reach,” it said.
This alone does not affect its assessment of the economy by much, DBS said, pointing out that given two consecutive years of robust export growth, this year’s moderation was partly due to high base effects.
“More importantly, overall GDP growth has been driven mostly by consumption and investment growth anyway. GDP growth circa 6 percent is still in the offing for next year,” it added.
From the flows perspective, DBS said that as long as remittances continue to come in at around $2 billion per month, external financing risks would remain manageable even if the goods trade balance slips into negative.
The current account balance is still likely to hit a surplus of about 3 percent of GDP in 2016, the bank said.
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