Filipino consumers post the highest confidence index score worldwide

Filipino consumers posted the highest consumer confidence index score among consumers from around the world.

In the second quarter of 2017, optimism of Filipino consumers was the most bullish despite a slight dip of two points from the fourth quarter of 2016 to register a confidence index score of 130, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions.

It was in the same period last year that consumer confidence in the Philippines surged to no. 1 with a 13-point increase to 132 index score. During that time it was the biggest quarter-on-quarter increase among countries included in the survey.

“Consumers in the Philippines have always been in the top three in the past number of years and to be the most optimistic globally for the second time is not surprising given that the economy remains to be one of the strongest in Asia at 6.5% GDP growth rate in Q2,” says Stuart Jamieson, managing director of Nielsen Philippines and Emerging Markets Southeast Asia Cluster leader.

Established in 2005, the Nielsen Consumer Confidence Index is fielded quarterly in 63 countries to measure the perceptions of local job prospects, personal finances, immediate spending intentions and related economic issues of real consumers around the world. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively

Globally, consumer confidence showed signs of continued improvement with an index score of 104, up three points from quarter four of 2016.

After the Philippines, India posted a 128 index score, declining by eight points while Indonesia follows with a 121 index score, gaining a percentage point. The United States slipped by five points to an index score of 118 while confidence level in Vietnam is on the ascent with a five-point percentage gain to 117 index score.

While the three confidence indicators which were measured in the survey remain high, slight decreases are noted. Job optimism dropped two percentage points to 85% in the second quarter compared to quarter four and four points versus quarter two last year. Responses from the Philippines also showed a dip to two percentage points in immediate-spending intentions (58%) from Q4 2016 and a decrease of three points compared to year-ago report. Favorable sentiment about personal finances remains positive at 84%, although it went down when compared to 86% in Q2 2016 and Q4 2016.

When it comes to having cash to spare after paying for the essential living expenses, saving money still tops the list for Filipino consumers at 58% (a six-point decrease compared to quarter four of 2016). Interestingly, consumers indicated increased willingness to allocate spare cash to new clothes, up nine points to 33%, while holidays or vacations come in next with 30%, a three-point increase compared to the end of the quarter of 2016. Investment in shares of stock (29%, +1) and home improvements (27%, -2) also make it to the list.

“Consumers with a positive outlook about their finances, job prospects, and spending intentions tend to have an open mindset towards indulgences such as clothes and travel,” Jamieson said.


Philippines gets US$500-M WB-AIIB funding for flood management

The Philippines has secured a US$500 million funding from the World Bank and the Asian Infrastructure Investment Bank (AIIB) to improve flood management in select drainage areas in Metro Manila with a counterpart fund of US$84.79 million from the Philippine government.

Public Works and Highways Secretary Mark Villar stressed that the government is taking an important step in the implementation of the Metro Manila Flood Management Master Plan designed to safely control floods in the national capital region and surrounding areas.

“The Master Plan will take 25 years to implement, but this phase of modernizing Metro Manila’s pumping stations will ensure that several million residents will be less vulnerable to floods,” says Villar.

Under the Metro Manila Flood Management Project, 36 existing pumping stations will be modernized, 20 new ones will be constructed, and supporting infrastructure along critical waterways will be improved in the cities of Manila, Pasay, Taguig, Makati, Malabon, Mandaluyong, San Juan, Pasig, Valenzuela, Quezon City, and Caloocan. Many of Metro Manila’s existing pumping stations were built in the 1970s and have become inefficient and underperforming.

Flood events, particularly during the typhoon season from June to October, are a recurring problem in Metro Manila. They cause inundation of roads, exacerbate traffic congestion, and destroy the lives, infrastructure and livelihood of people, especially the poor.

Solid waste clogs waterways and the entries to pumping stations, affecting the operation and maintenance of the pumps. The project will improve management of solid waste within the villages near the drainage systems served by the pumping stations. It will also support the government’s resettlement of informal settlers that are located on the waterways.

Mara Warwick, World Bank Country Director for Brunei, Malaysia, Philippines, and Thailand says that when floods occur, the capacity of people to earn a living is constrained, and many can fall back into poverty.

“Recurrent flooding has made life more difficult for the poorest populations who live in low-lying areas, on riverbanks, and in other danger zones,”

“The lives of people in metropolitan Manila – especially the poor, women and children – are severely affected by exposure to frequent cyclones and flooding induced by heavy rain. The floods disrupt business and commercial activities, causing unnecessary economic costs,” said Supee Teravaninthorn, Director General for Investment Operations, AIIB.  “Investing in sustainable infrastructure is a key priority for AIIB and we feel this project is a great fit for our first investment in the Philippines.”

DPWH and the Metro Manila Development Authority will implement the project in close coordination with local governments and key shelter agencies. Slated to start this year, the project is scheduled to be completed in 2024.

The master plan proposed a set of measures to effectively manage major flood events, which include the following:

  • Reduce flooding from river systems that run through the metropolis, by building a dam in the upper Marikina River catchment area in order to reduce peak river flows entering Metro Manila during typhoons and other extreme rainfall events;
  • Eliminate long-term flooding in the flood plain of Laguna de Bay, to protect the population living along the shore against high water levels in the lake;
  • Improve urban drainage, including modernization of Metro Manila’s pumping stations; and
  • Improve flood forecasting, early warning systems, and community-based flood risk management.

PAL starts Clark-Basco, Batanes service

1st Q400 NG delivery flight at Malta stop over 2

Flag carrier Philippine Airlines (PAL) has expanded its domestic network with the opening the Clark-Basco route starting October 1, 2017.

The four-times-a-week service from Clark International Airport in Pampanga complements PAL’s existing twice-a-day Manila-Basco flights.

The new flight, operated by PAL Express, departs Clark 11:45 AM every Monday, Wednesday, Friday, Sunday. The return flight leaves Basco 2:00 PM on the same days. 

The Clark-Basco route offers convenient direct flight without the need for Central and Northern Luzon passengers to travel by land to Manila.

The new route is part of PAL’s development of Clark as a third hub of operations, following Manila and Cebu.

Meanwhile, PAL has upgraded Cebu-Cagayan de Oro and Cebu-Butuan routes to the next-generation, dual-class Bombardier Q400 starting October 1.

Passengers get to experience the new Q400’s spacious and quiet cabin comparable to jet airplanes.

The 86-seater Q400 flies twice a day on the Cebu-Cagayan de Oro and Cebu-Butuan service.

PAL has started taking delivery of 12 new Q400 turboprops that are being used to open new inter-island routes.

On November 1, PAL will open three new domestic routes out of Davao – to Zamboanga, Tagbilaran and Cagayan de Oro.

Mexican vessel makes historic Manila visit

The Mexican vessel Cuauhtémoc “Ambassador and Knight of the Seas” will
be arriving in Manila on August 4, 2017 to mark its first journey to Manila, commemorating the historic voyage by the Manila-Acapulco Galleon in almost 250 years.

Captain Rafael Lagunes and the crew of vessel will welcome visitors to enjoy a bit of Mexico, its traditions, craftsmanship, folklore, flavors and legacy.

The Mexican vessel Cuauhtémoc will anchor at Pier 15, Manila South Harbor, Port Area, Manila. Access will be granted through shuttles operated by Doña Virginia Maritima Corp, the shipping agent.

Captain Lagunes says: “We have sailed the seas and oceans around the world, proudly raising our national flag, sailed more than 700,000 nautical miles and forged 34 generations of cadets from the naval military school of Mexico.”

The Embassy of Mexico in Manila is proud to contribute to the successful visit of the vessel Cuauhtémoc in conjunction with the Philippine Navy which will further strengthen the bilateral relations between Mexico and the Philippines.

“We invite you to discover the hospitality and the love for the maritime traditions that are reflected in the perfection of its decks, bulkheads, maneuvers and rigging. The crew, integrated by 9 senior officers, 44 officers, 43 cadets and 122 enlisted men and women, is a genuine sample of more than 120 million Mexicans in the world, presenting itself as an ambassador of our country, carrying a message of peace and good will,” says Captain Lagunes.

“May this historical visit attest the renewed long-standing ties that join Mexico and the Philippines together, not only as partners but as sister-nations.”

PAL adds new Bombardier turboprop

1st Q400 NG delivery flight at Malta stop over 2

Philippine flag carrier Philippine Airlines (PAL) has added a new aircraft to its fleet – the world’s first dual-class turboprop aircraft and the next-generation Bombardier Q400 with registry RP-C5901.

The aircraft arrived in Manila after a refuelling stop at Malta in the Mediterranean, one of nine stop-overs – Canada, Iceland, France, Malta, Egypt, United Arab Emirates, Pakistan, India, Thailand – during its 11,398-nautical mile delivery flight from Toronto to Manila.

The aircraft – manned by three pilots, three mechanics and one aircraft inspector from PAL Express – touched down in Manila on July 26, 2017 after a five-day journey. (Photo by Keith Pisani)

Philippine inflation eases to 2.8%

The Philippine inflation rate has eased to 2.8 percent in June 2017 from 3.1 percent in May, lower than market expectations of 3 percent.

The National Economic and Development Authority (NEDA) says core inflation, which excludes select volatile food and energy prices, also eased to 2.6 percent in June 2017 from 2.9 percent, reflecting the general price stability across goods and services.

Slower price adjustments in both food and non-food commodities contributed to the easing of inflation in June 2017.

For food and non-alcoholic beverages, inflation slowed to 3.5 percent in June from 3.8 percent the previous month.

Non-food inflation slowed to 2 percent in June 2017 from 2.5 percent in May.  This follows the significantly slower year-on-year increase in domestic petrol prices during the period, particularly unleaded gasoline (5.1 percent from 9.9 percent), diesel (5.3 percent from 13.6 percent), and kerosene (3.0 percent from 9.6 percent).

NEDA Officer-in-Charge (OIC) and Undersecretary for Policy and Planning Rosemarie Edillon said that keeping inflation stable strengthens prospects of stronger domestic economic activity in the near-term.

“The significant decline in the probability of extreme weather disturbances due to El Niňo and La Niňa until the end of 2017 bodes well for agricultural production and commodity prices moving forward,” Edillon said.

“Government should take advantage of good weather conditions to accelerate the implementation of climate change adaptation measures. Among the crucial ones are investing in infrastructure like catchment basins, advance atmospheric moisture extraction, and promoting water-saving technology. Rehabilitation of damaged irrigation systems and periodic maintenance will also ensure disaster and climate resiliency of the agriculture sector.”

“On the external front, domestic prices may be affected as global financial market conditions adjust in response to the faster monetary policy normalization in the United States,” Edillon said.


Ambitious Metro Manila subway project bared

Train 04

An ambitious Metro Manila Subway project could be a long way to go but the Secretary of the Department of Transportation (DOTr) is optimistic that his agency could do it under the Duterte government.

Is a subway project the answer to the horrendous traffic in Metro Manila? It could be a possibility.  At a  recent steering committee meeting presided by Secretary Arthur P. Tugade, partners from the Japan International Cooperation Agency (JICA) presented updates on the feasibility study for the Metro Manila Subway project

Among the issues tackled were timelines, alignment and organizational arrangements. Sec. Tugade reiterated his directive that he wants the project to be operational before the end of President Rodrigo Duterte’s term.  “I want this project finished,” Tugade stressed.

Apart from fast-tracking the project, Secretary Tugade also proposed for the subway to extend all the way to the Ninoy Aquino International Airport.

“I need to have that connectivity. I have a big problem with NAIA because of the projected increase in volume of passengers,” he said.

The subway alignment originally has 13 stations, starting from Mindanao Avenue and ending at FTI Taguig. This is seen to cut travel time from Quezon City to Taguig to just 31 minutes.

Sec. Tugade wants a training facility for railway operators to which JICA responded positively. JICA also presented possible organizational arrangements to ensure that the subway will be constructed, operated, and maintained by a competent and dedicated team of certified operators and experts.

Aside from a world-class design, the proposed subway system will have water-stop panels, doors, and high-level entrance for flood prevention, earthquake detection, and a train stop system just like the subways in Tokyo.

President Duterte and Japanese Prime Minister Shinzo Abe are expected to sign a loan agreement for the Mega Manila Subway Project during the latter’s visit to the Philippines in November.


Disruptive technologies drive growth of IT consulting and systems integration

Analyst Photo The growing adoption of disruptive technologies in the Philippines has driven the growth of professional services, particularly IT consulting and systems integration services.

The same is true with other growth countries such as Malaysia and Vietnam. “Digital transformation initiatives continue to be a major trend influencing the market over the past year. There has been an increasing demand for digital technologies such as analytics, cloud, and internet of things (IoT),” said Aubrey Lim, Senior Market Analyst, Services, IDC Asia/Pacific.

Lim noted that although the size of some of the deals was still relatively small, more organizations are setting aside budgets for 3rd Platform technologies and that IT services and business processes have begun to transform from a labor-centric model into a technology-centric model of service delivery.

IDC expects IT services spending across the Asia Pacific excluding Japan (APeJ) region to exceed US$95 billion by 2021. Overall APeJ Services spending, which includes IT and Business services, is anticipated to reach almost US$140 billion in 2021, from an estimated US$105 billion in 2017.

Vendors such as IBM and Accenture are some of the leading vendors in the cloud, analytics, mobility and security (CAMS) services space tracked by IDC, whose strength is backed up by their robust digital capabilities. They have also continued to bolster their capabilities in the digital space through acquisitions of digital agencies.

Meanwhile in 2017, DXC Technology – the merged entity of CSC and HPE’s Enterprise division – will be a strong contender, banking on the expertise from both of its predecessors, expansive global partner network and strong technology offerings.

China and Australia, the two largest markets in Asia Pacific region except Japan which accounts for half of the region’s services market size, have also seen similar developments.

IDC said the Chinese government has been actively promoting the development of the high-tech industry, and continues to implement its Internet+ strategy and encourage the construction of new smart cities. This is expected to drive the growth of the IT services market and other areas such as analytics and cloud.

Meanwhile, traditional outsourcing managed services are being substituted for cloud services at an accelerating pace in Australia. Enterprises now prefer to bundle cloud services with traditional capabilities as part of a single outsourced managed services engagement.

2 Cloud-related services spending in the APeJ region is expected to reach more than $10 billion by the end of 2017, with a compounded annual growth rate of 18.2% for the 2017-2021 period.

Brother Philippines-PBSP partnership benefits Inigan school children

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Brother International Philippines Corporation and the Philippine Business for Social Progress’ (PBSP) have forged a partnership to support the education of school children in a remote village at the Iñigan Elementary School (ES).

For the past five years, Brother Philippines has been going to Iñigan to bring joy to the children of the school through PBSP’s Ready for School Campaign (RFS), a volunteerism campaign of PBSP in support to the Department of Education’s Brigada Eskwela, aimed to prepare schools for the opening of classes.

“Our very first project in Iñigan happened in 2012. We gave gifts to the students but we thought that to make more impact to the pupils, it should not only be a one-time activity, which is why we looked at it from a five-year plan perspective,” Brother Philippines’ President Glenn Hocson said.

The employee-volunteers conducted interactive learning sessions with their assigned grade level. Some volunteers played games with the pupils, others were taught tips and tricks on mathematics while a group of volunteers told folklores to entertain the students such as the story of the Alamat ng Makahiya (Legend of the Pudica or Touch-Me-Not Plant).

The company’s employees get to choose how many students they want to adopt. The associate will then give a portion of his or her earnings to buy the much-needed school supplies of their adopted student.  The volunteers will then distribute the bags with school supplies such as notebooks, pencils, and crayons.

“That’s the beauty of this activity because we don’t just get to donate, but we get to go here and personally see the improvement of the school and the students we adopt. It’s really heartwarming to see them grow. Actually, the first batch of students I adopted has already graduated, they’re already in high school,” Hocson said.

Being a consistent donor to the school, Brother Philippines provided a grant this year for additional solar panel lighting systems, transparent fiberglass roofing sheets, painting of galvanized iron sheets roofing and indoor and outdoor walls, and completion of the school’s perimeter fence.

In the past, the company donated a generator set, a portable audio system, three laptop units and a hundred chairs including solar electrification and six new blackboards. Last year, the company funded the refurbishment of its learning resource center through the provision of at least 300 story and reading books and other reference materials, 6 kiddie tables, 24 chairs and mats, 20 storage boxes, and repainting of walls and bookshelves.

The assistance proved to be a big help to the school, not only for its physical appearance but also in contributing to the overall performance of its students. For the past two years, Iñigan elementary school grabbed the top spot in the National Achievement Test in the Municipality of Montalban. In the school year 2013-2014, the school also topped in the Division of Rizal and belongs to the top three in the province up till now.



Private sector’s role cited in economic growth

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The National Economic and Development Authority has urged the private sector to boost its activities, especially in the provinces to promote the government’s agenda of inclusive growth.

Socioeconomic Planning Secretary Ernesto M. Pernia said that the private sector is able to help the government by bringing in their innovation and expertise in carrying out public-private partnership projects.

“Our partners in the private sector play a big role in the development process and thus in realizing our vision for the country, the AmBisyon Natin 2040. We need to start working outside of urban centers, however, and tap the potential of fringe regions,” Pernia said.

AmBisyon Natin 2040 envisions Filipinos as enjoying a strongly rooted, comfortable, and secure life.

Secretary Pernia also encouraged private partners to continue contributing to economic growth by creating jobs, promoting innovation, providing skills training, delivering quality health services, and providing additional infrastructure financing through public-private partnerships.

He stressed that the hallmark of the administration’s socioeconomic agenda is a rural and regional development that will reduce poverty and inequality across the regions.

The new Philippine Development Plan (PDP) 2017-2022 employs a National Spatial Strategy (NSS) that describes geographic challenges as well as opportunities for economic growth.

The main strategies of the NSS are maximizing the benefits of scale and agglomeration economies, connecting settlements to form efficient networks, and making vulnerability reduction an integral part of development.