March 27, 2017

MPI consortium obtains original proponent status for QC solid waste project

Metro Pacific Investments Corp (MPI) today announced that the consortium consisting of MPI, Covanta Energy LLC and Macquarie Group Ltd has been granted Original Proponent Status by the Quezon City local government (QC LGU) to design, construct, finance, and operate an Integrated Solid Waste Management (IWSM) facility. The ISWM facility will be capable of processing and converting up to 3,000 MT/day of the Quezon City’s municipal solid waste into 42MWe of renewable energy, enough to power between 60,000 and 90,000 homes. The project will be undertaken through a JV between the consortium and the QC LGU. As the original proponent of the project, the consortium will have the exclusive rights to enter into detailed negotiations with the QC LGU. Upon successful completion of negotiations, the project will be subjected to a competitive challenge. If and when the consortium is awarded the project, development and construction would take approximately 3-4 years.

March 22, 2017

Foreign Investments still on an Upward Swing

The Philippines still sees a prosperous inflow of foreign investments, which are sustained by the service industry, despite several economic challenges. In an article written by the Philippine Star, "the Philippines recorded a record $7.9 billion net FDI inflow last year, exceeding the full-year target of $6.7 billion, amid external shocks brought about by the decision of the United Kingdom to leave the European Union and the normalization of interest rates in the US."

The BSP sees FDI inflows reaching $7 billion this year as the Duterte administration committed to ramp up infrastructure spending.

Malaysia Plans Development in Clark

Malaysia also plans to develop Clark Green City in Subic, according to an article in the Daily Inquirer. The country adds to the growing number of countries who are enthusiastic in investing in the Philippines.

In the article, "Malaysian investors had proposed to organize the government institutions that would set up shop at the 9,450-hectare Clark Green City, which will be the country’s first smart, disaster-resilient and green metropolis spanning towns in Pampanga and Tarlac."

The partnership with Malaysia hopes to bring more support the country’s massive infrastructure buildup from bilateral and multilateral partners.


MPI refutes market speculation of imminent capital raising

Metro Pacific Investments Corp (MPI) today issued a statement in response to market speculation that the company will conduct a capital raising exercise in the near term. MPI released the statement following sharp declines in its share price over the past six consecutive trading days, down 10.6% from P6.71/sh to P6.00/sh yesterday, amid unconfirmed reports the company will do a capital raising. MPI said “management has decided that it is not necessary for MPI to conduct a capital raising exercise in the near future” and that the continued expansion of the company is “to be funded through a combination of internal resources and external borrowing.”

March 09, 2017

Co-working Spaces Next Big Thing in Property

In an article written by The Philippine Star, the property market in the country has been seeing an influx of flexible office spaces due to the rise of business startups and multinational corporations. This will play a role in Manila's office sector expansion this year. According to property consultancy firm Colliers International, "flexibler work spaces provide an attractive proposition because of their modern working environments and the opportunity to collaborate and exchange ideas."
There are currently 50 flexible workspace centers in Metro Manila, says Star, and growth remains "very bright."

BSP relaxes rules on client verification

According to an article from BusinessWorld, Filipinos may soon open bank accounts even without presenting government-issued IDs. The BSP has approved simpler rules in verifying client identity, with a circular to be released in the coming week.

The new rules will allow flexibility on online know-your-customer (KYC) verification and that prospective clients will need to present any official document or certificate issued by local government units in lieu of government-issued IDs. The forthcoming rule changes will facilitate the acquisition of new customers by allowing banks to better target unbanked segments of the country.

DICT open to assigning unused frequencies to new telco player

Various news outlets today reported the Communications Technology secretary as saying government is open to assigning unused frequencies to any capable new telecom player. He said government is now reviewing the inventory of available frequencies, including those being held but remain unused by any entity, with a view of assigning this to any interested telco player with a foreign partner that is financially and technically capable. He also said government will no longer auction such frequencies as earlier planned.

March 08, 2017

SEC favors repeal of bank secrecy law

According to an article from The Philippine Star, the Securities and Exchange Commission (SEC) is pushing for the repeal of the bank secrecy law as part of efforts to attract more foreign investments into the country. The article quoted the SEC chairperson as saying that the lifting of bank secrecy will result in a stronger financial sector. Herbosa explained that the repeal of bank secrecy will result in better case buildup against serious law violators and will lead to a reduction in financial and monetary crimes.

Foreign firms look into national broadband project

Foreign companies from China, Europe, Israel, Germany, United Kingdom, and the United States have expressed interest in the Philippines' plan to build a national broadband network.
The news came from Information and Communications Technology Secretary Rodolfo Salalima.
President Rodrigo Duterte approved the national broadband project on Monday, delivering on a campaign promise to improve internet service in the country.
Salalima said the government would ensure safeguards on data privacy.
"It is very important that even as we will have one digitized network with common bases, we have to protect the privacies of all these data," he added.
The Philippines has among the slowest internet connections in the world, next only to war-torn Afghanistan.
The first talks about nationwide broadband connection was during then-President Gloria Macapagal-Arroyo, but plans fell through due to allegations Manila's deal with China's ZTE Corp was overpriced.

Philippines aims for ‘golden age of infrastructure’

Via Agence France-Presse

Desperately needed airports and trains are part of Philippine President Rodrigo Duterte’s envisioned “golden age of infrastructure”, but graft, red tape and other perennial problems threaten the $170-billion plan.

Unprecedented influxes of money from China and Japan are key planks of the hoped-for building frenzy, which aims to rectify decades of underspending that has been one of the main anchors on the Philippine economy.

Decrepit light rail lines in the capital of Manila, which snake above ever-worsening traffic that has come to be known as “Carmageddon”, are among the most obvious symbols of the infrastructure problems.

“The city is really suffering now from lack of mobility, not only in terms of mobility, it’s really the total absence of infrastructure,” Duterte said last week as he described Manila as “decaying”.

Duterte and his aides have repeatedly said the six years of his administration will be the “golden age of infrastructure”, with a record $168 billion to be spent on 5,000 projects across the nation.

If the plans come to fruition, infrastructure spending would reach 7.2 percent of the gross domestic product by 2022, when Duterte is due to step down — a huge increase from 1.8 percent in 2011.

The Philippines ranks 95th out of 138 countries for quality of infrastructure, and behind most of its Southeast Asian neighbors, Japanese-based financial services group Nomura said in a recent report.

It said the lack of infrastructure was a huge drag on economic development, citing a Japan International Cooperation Agency estimate of traffic costs in Manila alone as equivalent to four percent of GDP.

Ambitions curtailed

Infrastructure spending started to rise during the administration of Benigno Aquino, who stepped down last year, but his much more ambitious plans were curtailed by many problems that will also confront Duterte.

“Financing is the least of the problems,” transport and infrastructure consultant Rene Santiago told Agence France-Presse (AFP), pointing to an abundance of government funds plus cashed-up local businesses and eager foreign investors.

“The biggest obstacle is the implementation capacity of the government infrastructure agencies.”

Santiago, chief executive of Manila-based business consultancy Bellweather Group, said the government did not have enough personnel with the capabilities or experience to oversee such a massive spending plan.

Another major issue is corruption.

Aquino was heavily criticized in some quarters for not spending more on infrastructure, but he said he had to slow down the contract-awarding process in an effort to increase transparency and minimize graft.

About 10 to 30 percent of an infrastructure project’s cost is typically lost to corruption, according to Vincent Lazatin, executive director of the Transparency and Accountability Network in Manila.

Lazatin said this rose to 50 percent when congressman were directly involved in allocating national funds in a system known as “pork barrel”.

In a massive corruption scandal unearthed during the Aquino administration, 200 lawmakers were implicated in such scams. But, as part of an infamous “culture of impunity”, few have been brought to justice.

Lazatin warned that infrastructure projects financed by foreign partners would also be vulnerable to corruption.

“It is in the negotiation process (between the Philippines and the donor nation) that deals can be made that are off the books,” Lazatin said.

China hopes

Duterte has made China one of his top targets for loans and investments. He visited Beijing last year and said he returned with commitments for $15-billion worth of projects.

Chinese contracts for a $593-million railway project in 2003 and a $300-million national broadband network in 2007 negotiated under then-president Gloria Arroyo had to be cancelled because of corruption scandals.

In a speech at an economic forum last month, Chinese ambassador Zhao Jianhua acknowledged graft would again be a concern.

“We will try to make sure these projects are going to be corruption-free,” Zhao said.

The Philippines’ legal system is another major problem, with projects often held up due to lawsuits filed by losing bidders, according to Dindo Manhit, head of economic and political think-tank the Stratbase group.

“The reality of our democratic process is in our rules on public bidding, there are always bidding groups who if they do not win, they try to find other ways (to get the contracts),” Manhit told AFP.

In its report Nomura also cited a host of bureaucratic bottlenecks, including “opaque regulatory framework or political intervention”, as problems in the country’s infrastructure program.

But it said the government was focused on finding solutions and there was reason for optimism.

“Even if partly successful, we believe the government’s ambitious infrastructure program would have significant implications for the economy,” it said.