The Philippine House of Representatives has approved House Bill No. 8764 on its final reading, which attempts to amend the Republic Act No. 7042, referred to as the Foreign Investments Act of 1991. The bill intends to bring in more Foreign Direct Investments (FDI), facilitate transfer of technology, and share technical know-how.
House Bill No. 8764 seeks to make changes to a stipulation which restricts foreign equity to a certain percentage and bans the practice of profession in Pharmacy, Radiologic and X-Ray Technology, Criminology, Forestry, and Law, or foreign participation in some sectors of the economy like mass media, small-scale mining, recruitment, operation and management of public utilities, among others, that are in the Foreign Investment Negative List (FINL).
Small and medium-sized domestic market enterprises, with paid-in equity capital less than the equivalent USD 200,000.00 are reserved to Philippine nationals. But foreign investors are allowed to have minimum capital of USD 100,000 if they employ a minimum number of employess and are engaged in advanced technologiy areas as determined by the Department of Science and Technology (DOST). HB 8764 seeks to lower the hiring magnitude to 15 from 50 employees.
(Source: Manila Bulletin; News Bytes; Business World)
According to the Cagayan Economic Zone Authority, Chinese firms Eminova Asset Management Ltd. and Hunan Goke Maglev Technology Development Ltd. are setting up a USD1-billion training and production center for Maglev trains in Sta. Ana, Cagayan. Maglev, or magnetic levitation, is a system of operating trains by way of powerful magnets, which lifts the cars as they are propelled forward.
The scope includes the planning, design, construction, operation organization management, consulting and technical services, R&D center for training and production of low speed, medium speed, and high-speed electromagnetic vehicle, comprehensive development of other related industries, import and export of Maglev technology transportation, and other new rail transit projects.
The Maglev production line in CEZA would roll out light rail vehicles and medium and high-speed Maglev trains from 200 kilometers (km) to 400 km per hour for countries in Southeast Asia, including the Philippines. CEZA would be providing the land area for the project.
Hunan Goke Maglev, the largest magnetic levitation line builder in the world, will be responsible for establishing the research and development for training and production center, ensuring technology transfer and generating local employment. For Eminova, its role would be to provide the necessary financial and marketing requirement including financial investment and feasibility studies for the project. Eminova is an independent investment fund management of Australian and European funders with a portfolio covering projects in energy, environment, global entertainment and infrastructure. The Hong Kong-based firm is expected to finance the first phase of the joint venture.
The Maglev research and development project is expected to diversify investments in the Cagayan Special Economic Zone and Freeport. CEZA is positioning the freeport as the “FinTech City” or the “Silicon Valley of Asia” by attracting startup firms engaged in financial technology and overseas trading of cryptocurrencies such as bitcoin and etherium. CEZA has so far attracted more than two dozen startup firms.
(Sources: The Philippine Star; Philippine News Agency)
The Philippine Board of Investments (BOI), the country’s primary industry development and lead investment promotion agency (IPA), and the International Finance Corporation-World Bank (IFC-WB) signed a Memorandum of Understanding (MOU) on 5 October 2018, to collaborate in the further development of Investment Policy, Industrial Promotion and Local Supplier Linkages in the Philippines.
The agreement is intended to support the Philippine Government’s implementation of the Inclusive Innovation Industrial Strategy (i3S), which aims to grow innovative and globally competitive manufacturing, agriculture, and services while strengthening their linkages into domestic and global value chains with innovation at the core of the country’s strategic policies and programs. The MOU calls for the IFC to provide technical assistance and advisory support to DTI-BOI through a foreign direct investments (FDI)-centric industrial promotion by repositioning the Philippines as a competitive location for next generation investments in the ASEAN region.
To increase FDI in the targeted sectors, BOI and IFC would develop and implement a proactive investment promotion campaign repositioning the advantages of the electronics, automotive (including electric vehicles) and aerospace sectors, as well as a branding campaign on the competitiveness of the Philippines as an investment destination.
The MOU also calls for the local supplier development interventions to come in the form of pilot initiatives covering electronics, automotive (including electric vehicles), aerospace and related sectors.
To implement the project, the BOI and IFC will also work with the Philippine Economic Zone Authority (PEZA) to pilot the local supplier development program and partner with relevant industry associations such as the Semi-conductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), Electronic Industries Association of the Philippines, Inc. (EIAPI), Chamber of Automotive Manufacturers in the Philippines (CAMPI), Electric Vehicles Association of the Philippines (EVAP) and the Aerospace Industry Association of the Philippines (AIAP) to execute specific activities
(Source: Board of Investments)
During the visit of President Rodrigo Duterte to Israel, 21 business deals worth USD 84.9 million were sealed. These are expected to generate 790 jobs in the Philippines.
Some of the agreements were security-related, such as the transfer of know-how and technology agreement by Israeli weapons manufacturer, EMTAN to the Philippines-based arms manufactuer, Armscor for the latter to create a local weapons manufacturing facility in the Philippines under the license of EMTAN; exploring a mutually beneficial opportunities for collaboration on security, intelligence data mining and information technology; cooperation to develop cybersecurity-related certification courses in the Philippines; and, exploring opportunities in the manufacturing and refurbishment of small arms and ammunition.
Other MoUs and LOIs were on trading, agriculture and environment-related projects, tourism and shipping such as the collaboration to provide additional ships/vessels to service the country's local and international shipping requirements.
Below are the 21 agreements:
(Sources: Philippine News Agency; Rappler)
The Spanish government has offered USD 300 million worth of official development assistance (ODA) to the Philippines over the next three years.
The target sectors of this ODA are infrastructure, energy, renewable energy, telecommunications, water treatment, solid waste, agro-industrial, food industry and the tourism sectors.
The Philippines’ Department of Finance is now crafting the requisite memorandum of understanding for the planned ODA. This would be the first pure ODA from Spain as the Philippines only received Spanish grants previously.
(Sources: Manila Standard; BusinessWorld; The Philippine Daily Inquirer)
Foreign direct investment (FDIs) registered with the Philippine Board of Investments (BOI) grew 29% from January to May 2018 to PHP 7 billion (USD 131.4 million) compared to the P5.38 billion (USD 101 million) worth of registered projects in the same period last year, reflecting bullish sentiment on the part of foreign investors in the Philippines.
BOI data shows Japan as the country’s top foreign investor with PHP 2.6 (USD 48.8 million) from January to May 2018, followed by Italy with PHP 485 million (9.1 million), China with PHP 472 million (USD 8.9 million), United States with PHP 463 million (USD 8.7 million), and Hong Kong with PHP 206.8 million (USD 3.9 million).
Toyota Motor Philippines Corporation (TMPC) was the top corporate investor for May 2018 increasing its additional investments in the CARS Program by PHP 2.56 billion (USD 48.1 million), including the PHP 899 million (USD 16.9 million) in body side member stamping. The body shell of Toyota Vios model is now manufactured locally from a previously purely welding operation. On the other hand, Mitsubishi Motor Philippines Corporation also reported an increase of PHP 820 million (USD 15.4 million) which, together with Toyota's new investments, brings in the total additional CARS investments of P3.38 billion (USD 63.5 million). The Comprehensive Automotive Resurgency Strategy (CARS) is a government program being implemented in order to attract new investments, stimulate demand and effectively implement industry regulations that will revitalize the Philippine automotive industry, and develop the country as a regional automotive manufacturing hub.
As per BOI, The Philippines is projected to grow more than five times its current economic size and become the 24th biggest economy in the world by 2030. Together with this growth, BOI sees stronger demand for many projects on infrastructure, services, manufacturing, and utilities.
Registered investments from local sources also grew during the period with PHP 200.5 billion (USD 3.8 billion) worth of projects. The figure is 18.60% higher compared to only P169.1 billion (USD 3.2 billion) in the same period last year. The increase in investment registrations in the first five months of the year is buoyed by power and energy projects, transportation and storage, manufacturing, real estate, and water supply.
(Source: Philippine Information Agency)
President Duterte signed Republic Act 11032 or the Ease of Doing Business Act of 2018 (EODB Act) that aims to expedite government transactions and end the bureaucratic red tape in government institutions. The EODB Act amended the RA 9485 or the Anti-Red Tape Act of 2007.
Under the new law, business processes will be streamlined and processing time in all government agencies, including local government units (LGUs) and government-owned and controlled corporations (GOCCs), will be reduced.
The EODB Act orders government offices to comply with the “3-7-20 rule” - completing simple transactions within three working days; seven working days for complex transactions; and 20 working days for highly technical transactions.
A Business One Stop Shop (BOSS) shall also be established by LGUs, to serve as a common location for securing business permits and licensing. A single online website may also be established for the same purpose. This is meant to centralize the receiving and processing of applications, receiving of payments, as well as the issuance of approved licenses, clearances, permits, or other authorizations.
The law also mandated that barangay clearances and permits shall be applied for, issued, and fees collected at the city or the municipality level. The LGUs shall remit the collections to the respective barangays.
The law also provides the creation of Central Business Portal that will receive and capture application data of enterprises. The data will be directed into Philippine Business Databank that will allow national government agencies and LGUs to access information for verification. This initiative eliminates the submission of the same application data to various government offices.
The country’s Department of Trade and Industry has mentioned that the enactment of the EDOB Act into law will facilitate the improvement of the country’s ranking in the 2019 Doing Business Report of the World Bank and International Finance Corp. In 2018, the country slipped in ranking from 99th to 113th place.
(Sources: SunStar Manila; BusinessMirror; Philippines News Agency)
The Philippines has received investment commitments worth US$ 185.7 million from Singaporean companies which in turn could also generate 1,920 job opportunities for Filipinos. During the 32nd Association of Southeast Asian Nations Summit, various Singaporean companies submitted six memorandums of understanding (MOUs) and four letters of intent (LOIs) in the fields of urban development, renewable energy, aviation, manufacturing and economic and trade cooperation.
The purpose of the MOUs is to promote, strengthen and expand trade, economic, scientific, technological cooperation and other business relations between concerned organizations and firms of both parties. It also aims to exchange information about commerce, industry and economy in general, of their respective economies and to assist their members in establishing and strengthening business contacts through the organization of events such as conferences, seminars, study tours, exchanges of trade groups and participation in trade fairs with the objective of promoting the growth of trade between Filipino and Singaporean businessmen.
Below is the list of agreements signed by Filipino and Singaporean business leaders:
(Sources: Philippine Information Agency; The Philippine Star; SunStar)
The Bases Conversion and Development Authority (BCDA) expects Clark to be the next investment destination in the country. BCDA aims to decongest Manila, provide thousands of jobs, and make Clark the next investment destination in the country. BCDA engages in public-private partnerships to push forward vital public infrastructure such as tollways, airports, seaports, and also major real estate developments. It is one of the key agencies driving “Build Build Build,” the national government’s most ambitious infrastructure plan in Philippine history.
Some of the key infrastructure projects under the government’s Build Build Build program are geared toward positioning Clark as a viable investment destination. Among these projects are the construction of the Subic-Clark Railway, the North-South railway projects connecting Los Baños, Laguna to Tutuban in Manila and to the Clark Freeport in Pampanga, the 1,500-hectare industrial park in Clark, and the expansion of the Clark International Airport – the first hybrid public-private partnership project rolled out under the Duterte administration.
BCDA has already inked collaboration agreements with Japan Overseas Infrastructure Investment Corp for Transport and Urban Development and Surbana Jurong of Singapore for the development of New Clark City. Malaysia’s MTD Capital Bhd., meanwhile, is set to develop a National Government Administrative Center within the New Clark City.
(Sources: The Philippine Star)
The Department of Trade and Industry, through the Center for International Trade Expositions and Missions (DTI-CITEM), seeks to expand the Philippines’ shipbuilding sector as it makes its maiden participation in the 15th Asia Pacific Maritime Exhibit to promote and highlight the country’s prospects in the international maritime trade. The total estimated revenue in the country's shipbuilding and repair industry was approximately USD 1.6 billion in 2015. The industry employs 48,000 workers and is geographically concentrated in the greater Manila area and Cebu.
The Philippines has been the fourth largest ship producer since 2010, next to South Korea, China, and Japan. It primarily produces bulk carriers and containerships as well as some tankers. Exports are driven by two large foreign-owned shipbuilders (Hanjin and Tsuneishi). Two other notable foreign-owned firms are Austal (small aluminum passenger/mixed-use ships) and Keppel (mostly repair).
Domestic shipyards primarily engage in ship repair for domestic ships, which accounts for 90% of domestic shipyard revenue. There are approximately 17 large or medium-sized domestic shipyards, 90+ smaller yards, as well as service and afloat contractors. While domestic firms account for the largest share of the industry based on the number yards (95%), the two largest foreign-owned exporters account for nearly all exports, 75% of employment, and 97% of revenue. In both segments, nearly all inputs are imported directly or via distributors.
(Source: Malaya Insight)
According to Philippine investment bank First Metro Investment Corporation, the Philippines will become the fastest growing economy in the Association of Southeast Asian Nations (ASEAN)-5 in 2018, clocking in as much as 7.5% growth. ASEAN-5 is composed of Indonesia, Malaysia, the Philippines, Singapore, and Thailand – the regional bloc’s top 5 economies.
The Philippine economic growth is seen to be driven by the revival in manufacturing, consumption spending, stable remittances from overseas Filipinos, and tourism boom.
With the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law, the government’s USD 154 billion ambitious infrastructure program, Build Build Build, is also expected to be on full steam. This infrastructure program is to be partly funded by revenues from the country’s revamped tax codes.There is also the continued buildup of capital goods, imports, and private construction, which will remain strong due to the major public-private partnership projects that are ongoing in the country.
(Sources: Public-Private Partnership Center; Rappler)
The Philippines’ Board of Investment has announced that Foreign Direct Investment (FDI) commitments in the country for 2017 reached a total of PHP 617 billion (USD 12.1 billion) from PHP 442 billion (USD 8.9 billion) in 2016. The government had set a target of PHP 500 billion (USD 10.1 billion) for foreign investments under its 2017 Investments Priorities Plan which designated strategic sectors for focused development. According to the BOI, the power and energy sector attacted the most new investment pledges, while infrastructure was the second most attractive sector; manufacturing was third; real estate fourth; and transportation and logistics fifth.
Majority of the new funding will mostly go to the Luzon and Visayas areas where foreign investors expect a good return on their capital. It is also expected that Mindanao, with its rich natural resources, will also attract a bigger volume of foreign investments once its security situation settles down.
(Source: Manila Bulletin)
The Philippines remains one of the fastest-growing economies in Asia. It is currently the second fastest after Vietnam (Q3 2017)—and ahead of China, India, Malaysia, Indonesia, and Thailand. Its macroeconomic fundamentals remain firm and stable, with inflation kept within target, and trade continuing to grow. Underemployment rate also declined to its lowest level in 10 years.
The National Economic and Development Authority (NEDA) expects the Philippines to have a steady and strong economic growth in 2018, given the current developments in the country. Some of the key developments seen to beef up the Philippine’s economy are:
In 2018, the Philippine government projects that the economy will clock in a growth rate of between 7 and 8%.
(Sources: NEDA; The Philippine Star; Manila Standard)
The Philippine Economic Zone Authority (PEZA) announced that it will identify 300 new economic zones in the country in 2018 that will include mega economic zones spanning 1,000 to 4,000 hectares. PEZA will then launch an investment roadshow to market these ecozones and create new revenue streams. PEZA now plans to do dialogues with private landowners, local government units and government agencies managing public lands in creating mega economic zones in the country.
This comes after the business sector complained that the government has been taking its time in creating new special economic zones in the country. PEZA aims to speed up the process of launching these ecozones to take advantage of the enthusiasm of investors who want to come to the Philippines.
PEZA is the government agency tasked to promote investment, extend assistance, register, grants incentives to and facilitate business operations of investors in export-oriented manufacturing and service facilities inside selected area throughout the country proclaimed by the President of the Philippines as PEZA Special Economic Zones.
(Sources: Rappler; GMA News Online)
The Philippine Government may reduce the minimum capital required for foreign investors to set up their business in the country. This is in conjunction with the government's plans to relax the foreign ownership regulations in order to allow more foreign enterprises enter the Philippine market. The minimum paid-up capital needed by foreigners to establish a business will be lessened to USD 200,000 from the previous USD 2.5 million in a bid to ease foreign market access and encourage more foreign investments. The government also aims to raise the competition between foreign and local players and push the latter to step up and make their products and services at par with the foreign competition.
Meanwhile, the 11th Foreign Investment Negative List--a biannual list of local industries with minimal foreign participation - is yet to be released by the government but is expected to be reviewed and signed before the end of the year.
Amendments to the Philippine Constitution and revisiting the rules on foreign ownership of businesses in the country will be considered next year. Currently, foreigners are allowed to own up to 40% of a business, which the President considers raising to 70%.
(Sources: PDI; BusinessWorld; GMA News)
European businesses in the Philippines are increasingly optimistic about their prospects in the country and are looking to expand their operations according to the EU-ASEAN Business Sentiment Survey that was conducted by the European Chambers of Commerce. The respondents of this survey are senior executives from SMEs and multinationals from a wide range of industries that include infrastructure, services, and manufacturing,
The Philippines’ strong economic fundamentals are seen to drive the positive sentiment of European businesses in the Philippines. According to the survey, the Philippines takes lead in the availability of skilled and competitively priced labor as well as ease of recruiting. However, the country still lags behind other South East Asian countries in terms of general business regulation.
According to the World Bank, the Philippines is the world’s 10th fastest growing economy globally with annual growth projected to be at 6.8% in both 2017 and 2018. The country, which has a population of over 100 million, has emerged as an attractive market for foreign companies due to its strong and stable economy and sound macroeconomic, fiscal and monetary policies. The government's plans for sustained infrastructure spending between 2017 and 2022, is expected to help keep the country’s economic engine running smoothly.
(Sources: BusinessWorld Online; World Bank)
The Philippines and the Czech Republic signed an Agreement on Economic Cooperation that aims to strengthen the trade and investment relations between both countries. Under the agreement, both countries can explore tie-ups in technology-oriented industries such as automotive and aerospace parts, electronics, agriculture, energy, transportation, and tourism. This is also in line with Philippines' strategy of rebalancing trade relations with non-traditional trade partners.
The Philippines encourages the Czech Republic to explore cooperation in the development of micro, small and medium enterprises (MSMEs) as well as cooperation in the food and beverage, defense and security solutions. In addition, the Philippines can capitalize on the Czech Republic's industry strength to implement Manila’s Manufacturing Resurgence Program that aims to close the gaps in industry supply chains, provide access to raw materials, and expand domestic markets and exports for Philippine manufactured products.
(Sources: Department of Trade and Industry; BusinessWorld Online)
The Philippines aims to further enhance its access to the United States through a possible bilateral free trade agreement (FTA) with the world’s biggest economy. The country’s Department of Trade and Industry (DTI) is doing a study for a possible FTA with the US, looking at the benefits of having a trade deal with the US and the alignment of policies of the two countries. The Philippines has a huge market of over 100 million and has access to ASEAN with a 600 million population. It has forged bilateral FTAs with Japan and European Free Trade Association. Through ASEAN, the Philippines has regional FTAs with many countries across the Asia Pacific, including with Australia, New Zealand, India, Japan and China. It is party to the 16-member Regional Comprehensive Economic Partnership negotiations, and is currently negotiating an FTA with the EU. Over the past decade, two-way trade between the United States and the Philippines has grown by more than 25%. In 2016, US exports to the Philippines increased 9% to USD 8.3 billion, with top export categories including electrical machinery, machinery, cereals, aircraft, and soybean flour.
(Sources: Philippine News Agency, Manila Bulletin)
The Philippines remains in the list of most promising investment destinations worldwide as reforms to facilitate foreign direct investment (FDI) inflows are made, according to the 2017 World Investment Report released by the United Nations Conference on Trade and Development (UNCTAD).
The Philippines has figured among Asian economies that are expected to grow fastest this year, with the World Bank and the UN Economic and Social Commission for Asia and the Pacific projecting 6.9%, and the International Monetary Fund and the Asian Development Bank forecasting 6.8% and 6.4%, respectively.
The Philippines has implemented several policy measures that aim to facilitate the flow of investments. The country also permitted 100% foreign ownership in the financing sector which covers insurance companies, lending companies, financing companies and investment houses. The country is among the choice prospective host countries by multinational enterprises (MNEs) for the years 2017 to 2019 along with other countries in developing Asia such as Indonesia, Thailand, Vietnam, China, India and Singapore.
(Sources: The Philippine Star, BusinessWorld)
BMI Research has downgraded the political risk rating of the Philippines as President Duterte declared martial law in Mindanao in light of the series of attacks made by the Maute Group in Marawi City. The terrorist organization which ascribes itself to the Islamic State clashed with security forces during an attempt by the military to capture Isnilon Hapilon, a leader of another militant group Abu Sayyaf.
The Philippines’ short-term political risk index score was scaled down to 63.1, out of 100, from 63.5 previously. This reflects slightly diminished predictability of future policies as a result of the government's pronouncements on foreign policy and national security.
However, BMI Research does not see this as a prelude to a return of dictatorship in the Philippines or expect this to have a significant impact on the country’s economic growth outlook.
(Sources: The Philippine Star, GMA News Online, BMI Research)
The Philippines is currently the 10th fastest economy not only in Asia, but in the world in 2017. The economy of the country is expected to grow between 6.5% and 7.5% this year, which is already almost double its long-term growth. The low inflation and low debt to GDP ratio are some of the major factors helping to improve the performance of the country’s economy. The stable macroeconomic environment of the country also helps to sustain its healthy domestic demand growth.
President Duterte’s domestic policies and foreign policy flip-flops have not undermined the country’s economic growth. However, they have touched the country’s equity markets, which have under-performed the markets of the region.
(Sources: Forbes, philnews.ph)
Business executives in the country remain highly optimistic in their outlook on the Philippine economy despite anticipation of higher inflation and interest rates this year coupled with a critical outlook on trade, a survey conducted by the Makati Business Club (MBC) showed.
MBC members mirrored their overall optimism on the Philippine economy to their own corporate outlook with a large majority of the respondents projecting an increase in both gross revenues and net income in the coming year. On investments for 2017, the projection remains bright with 74% of the respondents said they will make additional investments in the coming year, with an average of PHP 785 million (USD 15.6 million); the highest projected investments of over PHP 1 billion (USD 19 million) are under the Diversified / Conglomerate and Services sector.
On the other hand, MBC said that its members had a slightly critical general outlook on trade with a significant number of members expecting imports and exports to fall.
MBC is composed of the largest and most dynamic corporations in the Philippines represented by their senior executives.
(Sources: Philippine Star, Manila Bulletin)
The Philippines rose to the 58th spot in this year’s Index of Economic Freedom, riding on robust economic growth and fiscal gains, although concerns remain on whether these can be sustained under the new government.
US-based think tank The Heritage Foundation measures economic freedom based on 12 quantitative and qualitative factors, grouped into four broad categories, or pillars, of economic freedom: rule of law (property rights, government integrity, judicial effectiveness); government size (government spending, tax burden, fiscal health); regulatory efficiency (business freedom, labor freedom, monetary freedom); and open markets (trade freedom, investment freedom, financial freedom).
The Heritage Foundation cited gains in “fiscal policy, government spending, and monetary stability” in raising the country’s score. Across the region, the Philippines placed 14th and is classified as “moderately free.” Despite the challenging global economic environment, the Philippines has achieved notable economic expansion, driven by the economy’s strong export performance and inflows of remittances that have bolstered private consumption. However, the absence of entrepreneurial dynamism still makes long-term economic development a challenging task.
With its latest score, the Philippines enters the “moderately free” territory, which, according to Heritage Foundation, belongs to economies that provide institutional environments in which individuals and private enterprises benefit from at least a moderate degree of economic freedom in the pursuit of greater competitiveness, growth and prosperity.
(Sources: Business World, The Manila Times)
The Philippines is among economies in Asia most vulnerable to abrupt policy shifts in the United States, Nomura Global Research said in a report, saying such impact - in terms of geopolitics, trade and immigration - could weigh on the country’s growth prospects.
The global bank said the Philippines had “high vulnerability” to reforms planned by US President Donald J. Trump, with its impact likely to be strongly felt through the peso-dollar exchange rate, external trade, immigration halts and possible “foreign policy confrontation” particularly over China’s territorial claims in the South China Sea.
President Trump’s goal to make America great again entails policies that are likely to be overall negative for emerging markets. The risk scenario factors in possible downturns in Philippine exports to the US, alongside weaker remittances coursed through the world’s biggest economy that accounts for a third of total worker remittances. Business process outsourcing - whose sales have been growing faster than worker remittances - could also take a hit should US firms heed Mr. Trump’s calls to keep jobs home.
(Sources: BusinessWorld, The Philippine Daily Inquirer)
The Philippines will continue to outdo most of its Asia-Pacific counterparts this year and next as a strong infrastructure push adds to robust domestic demand, that has long been a driver of economic growth, according Asian Development Bank (ADB).
The Asian Development Bank upgraded its 2016 growth forecast for the Philippines to 6.8% from the previous estimate of 6.4 percent, following three quarters of strong growth. The Manila-based multilateral lender also revised upward the 2017 growth outlook for the country to 6.4% from 6.2%.
ADB said among the Association of Southeast Asian Nations, the forecasts for the Philippines and Thailand were revised upward, offsetting the downgrade in other member economies. It said infrastructure investment continued to play an important role in driving growth in these countries.
(Sources: BusinessWorld, Manila Standard)
The Board of Investments (BOI) registered PHP 28.5 billion (USD 571 billion) of investment commitments in November 2016, up 97% from a year earlier. Sustained investor confidence on the back of the country’s sound economic fundamentals propelled investment pledges approved by the BOI to grow by a little over a third in the 11 months ending November. A big portion of the investment approvals came from projects in the manufacturing and energy sectors followed by those in construction and real estate.
The BOI also added that renewable energy projects have contributed to the investment approval growth, through hydroelectric power projects in Ifugao and Lanao del Norte, as well as solar energy projects in Tarlac and Batangas. These investments support the Philippine Energy Plan 2010-2030 that aims to search for, discover and further develop energy sources. Topping the list of foreign country investors in the 11-month period is Singapore, followed by Netherlands, Japan, South Korea and United Kingdom.
(Sources: The Philippine Star, The Manila Times)
The Philippines will remain among East Asia and the Pacific’s fastest-growing economies despite lingering uncertainty abroad and over the direction of macroeconomic policies under the new administration, the World Bank announced. Drawing from its earlier forecast in April, the multilateral lending institution said it still expects the Philippine economy to grow 6.4% this year and 6.2% in the next two years.
Domestic consumption is seen to prop up the economy driven by increased purchases from an expanding middle class, remittances from overseas Filipino workers, and increased employment.
Reforms are also being unveiled, specifically on tax policy and administration, the tracking of government spending, security of land tenure, ease of doing business and restrictions on foreign participation that signal the general continuity of reforms that had been instrumental in the country’s bagging investment grade from major debt raters since 2013.
However, the challenge to the country is how to successfully manage the economic transition and provide the right signals to investors and businesses as the new administration still needs to dispel lingering uncertainty on the part of investors by providing clarity on its development priorities.
(Sources: The Philippine Star, BusinessWorld)
Foreign direct investments (FDIs) flowing into the Philippines almost doubled in the first half, the Bangko Sentral ng Pilipinas (BSP) reported. Data released by the central bank showed FDI inflows amounted to US$4.19 billion from January to June or 95 percent higher than the USD 2.15 billion booked in the same period last year. The strong results reflected investors' confidence in the Philippine economy on the back of sound macroeconomic fundamentals and robust growth.
The bulk of the equity placements in the country came from Japan, Singapore, Hong Kong, the US, and Taiwan. These were channeled to financial and insurance activities; real estate; manufacturing; construction; as well as accommodation and food service. The BSP also sees FDI inflows rising to USD 6.3 billion this year amid the country’s strong macroeconomic fundamentals and the implementation of much needed infrastructure projects under the public private partnership (PPP) scheme.
(Sources: The Philippine Star, The Standard)
Filipino consumers emerged as the most optimistic in the world, posting the highest consumer confidence index score for the country and besting optimism of consumers from around the globe for the first time, global information, data and measurement company Nielsen reported. Of the three confidence indicators measured, job optimism increased most, jumping 16 percentage points to 88% in the second quarter. Responses from the Philippines also showed a rise of 10 percentage points in immediate-spending intentions (61%) and five percentage points in favorable sentiment about personal finances (86%). Nielsen also noted that the confidence in the Philippines is at an all-time high, and with a 6.9% GDP growth rate in the first quarter, it's one of the fastest-growing economies in Asia. The promise of greater reforms during the recent presidential elections, which took place during the survey period, likely helped buoy positive consumer sentiment.
(Sources: Nielsen, Philippine Daily Inquirer)
Multi-lateral lender International Monetary Fund (IMF) announced its bright outlook on the Philippine economy for the next few years due to stable macroeconomic fundamentals and strong domestic activity. The aggressive spending planned by the new government will support locally driven growth.
According to IMF, the Philippine economy is doing very strongly despite the external headwinds of the trade slowdown and the added market volatility from the recent Brexit. The continued solid growth in 2016, despite the external headwinds, is due in part to fiscal stimulus and supporting monetary conditions. Government plans to reduce personal and corporate income taxes stand positive for overall growth which is also likely to attract increased investments that would create jobs and spur growth across the country, including the provinces.
(Sources: The Standard, BusinessWorld)