Genting Hong Kong and its Philippine partner Alliance Global Group (AGI) will invest another $1.2 billion over the next three years in the Resorts World Bayshore project at the Pagcor Entertainment complex in Pasay City.
David Chua, president of Genting Hong Kong, said the amount is on top of the $800 million his company and AGI have jointly invested in Resorts World Manila.

Chua, who had invested in the country more than four years ago, was encouraged by the favorable macro-economic fundamentals, the government’s reforms and a large pool of educated workforce.

He expressed optimism over the business prospects in the Philippines, citing favorable fundamentals characterized by low inflation, improved credit rating, strong currency and an emerging middleclass.

Chua also underscored the importance of government reforms, believing that changes in eradicating the inefficiencies and rampant corruption usually set the scene for the next stage of growth and development.

Apart from their investments in integrated resorts, Chua said that his company will relocate its regional operating headquarter from Kuala Lumpur in Malaysia to Manila.

Genting has also set up a training academy and a call center which services not only its cruise businesses, but also sister companies such as Resorts World Sentosa.

Chua said the Philippines, with a population close to 94 million and a large young highly educated and talented workforce, clearly has the ‘right people’.

“The Philippines is uniquely positioned as it is traditionally an exporter of human capital especially knowledge workers. Unlike Singapore and Hong Kong who have had to import skilled workers, the Philippines hitting her inflection point need only to bring back home the overseas Filipino workers (OFWs),” he added.

Furniture industry adopts customer-oriented strategy

The Chamber of Furniture Industries of the Philippines (CFIP) has adopted a new strategy to attract more buyers in a bid to achieve its 15 percent growth target over the next few years.

CIFP president Nicolaas de Lange said the CFIP would employ a customer-oriented and market-focused approach in selling their products.

“It is really a more focused type of selling rather than a shotgun approach.The Philippines has always been in developing products which are generic. We will study products that are specific to a particular market in terms of style, size and price.”

De Lange said they will gather market intelligence themselves rather than just relying on trade attaches.
“Part of the program we have with the government is that when we penetrate a market, we go there in the first year, study and bring back the data,” he noted.
He added that furniture makers will then develop products tailored to fit that specific market. They will get back to that country the following year with the products.
De Lange pointed out that industry players will align furniture designs to customer needs in both the local and global markets.
In going global, they will focus on Brazil, Russia, India, China and South Africa (BRICS) market while continue serving the traditional United States market.
“The US is showing some signs of recovery. I think the US will allow us to achieve that potential growth as well as the other key markets,” he said.
“By encouraging our members to look at the local market seriously, it will surely give us the volume that will encourage businesses to invest in the factories and hire more people,” he said.
Apart from marketing strategies, the industry roadmap will focus on three other key development factors: product development, capacity building and advocacy.

Philippine economy to grow 6% in 2012

The Philippine economy will have a full-year growth of 5.7 to 6 percent, driven by strong domestic demand, government spending, robust dollar remittances from overseas Filipino workers and exports, according to latest report by FMIC and UA&P Capital Markets Research.
The report noted that the underlying low inflation trend remains intact, considering that crude oil prices have eased from its recovery in July and August.
“We are expecting inflation to average 3.4% in the third quarter and 3.5% in the last quarter. This, together with weaker economic data in October, leads to expect a cut of 25 basis points cut in BSP’s policy rates in the fourth quarter,” said FMIC and UA&P.
 Extra strong infrastructure and capital outlays are in store for the rest of the year as the fiscal deficit until August was just P71.2 billion or only a fourth of the full-year target of P279 billion.
“This would leave much room for the national government to keep up or even hasten the pace of spending for the rest of the year and provide a much needed stimulus in the face of uncertainties abroad.”
The deficit for the rest of 2012 is not expected to exceed an average of P40 billion per month with the  full-year defi­cit of around P230 billion, the report said.
“This would mean a prima­ry surplus of P90 to P10 billion  0.8-0.9% of gross domestic product (GDP). Combined with lower interest rates and faster-than-expected eco­nomic growth, we expect the debt ratio to fall to 48.6 – 48.8%.”
Despite the unfavorable conditions in the world economy, exports would continue grow above 5 percent as the country’s copper smelter goes back into full operations and improving electronics exports in the fourth quarter with the boost from the US election presidential election in November. 

Inflation rate slows to 3.6% in September

The Philippine inflation rate has decelerated to 3.6 percent in September from 3.8 percent in August.

The National Statistics Office (NSO) reported slower annual gains in the clothing and footwear index; housing, water, electricity, gas and other fuels index; health index; and in the restaurant and miscellaneous goods and services index. Inflation a year ago was 4.7 percent.

Excluding selected food and energy items, core inflation eased to 3.8 percent in September from 4.3 percent in August.

The inflation rate in Metro Manila slid to 3.5 percent in September from 4.4 percent in August. This was due to improved annual hikes in food and non-alcoholic beverages index; housing, water, electricity, gas, and other fuels index; and recreation and culture index.

Annual inflation rate in the provinces, however inched up to 3.7 percent in September from 3.6 percent in August.

The NSO noted increases in the following indices: food and non-alcoholic beverages; transport; communication; and recreation and culture.

In areas outside Metro Manila, the annual inflation rate went up to 3.7 percent in September from 3.6 percent in August as 13 regions recorded higher annual rates during the month.

The biggest gain of 0.9 percentage point was in Cagayan Valley (4.2% from 3.3%). The highest annual rate of 7.3 percent was still observed in Central Visayas, while the lowest annual inflation of 1.7 percent remained in Davao region.



Philippines to benefit from Russia’s membership to WTO

The membership of the Russian Federation to the World Trade Organization (WTO) would benefit the Philippines as it is committed to bring its trade laws and practices into compliance with WTO rules and other market-opening measures.
Such commitments include reducing tariffs and binding tariffs levels, ensuring transparency when implementing trade measures, non-discriminatory treatment of imports of goods and services, and enforcing intellectual property rights of foreign holders.
The Philippine mission to the WTO disclosed that Russia’s WTO membership granted the Philippines various concessions that the country has successfully negotiated in 2005.
The concessions include the reduction in tariffs from initial bound rates to final bound rates within an implementation period of zero to six years granted to a number of local products and additional concessions on sugar importation.
Russia is a huge market for the country’s sugar industry as its total importation valued at nearly $US1.8 million last year at generalized system of preferences (GSP) rates.
As part of its WTO commitment, Russia will maintain GSP rates for no less than seven years from August 2012 for the range of products at the level of 75 percent of most favored nation (MFN) applied duty rate.

Russia would also phase out tariffs in agriculture. The average tariff ceiling for agriculture products will be 10.8 percent lower than the current average of 13.2 percent; manufactured goods will be 7.3 percent against the 9.5 percent current average; other goods will come down to 14.9 percent for dairy products, 10 percent for cereals; 7.1 percent for oilseeds, 5.2 percent for chemicals, 12 percent for automobiles, 6.2 percent for electrical machinery and 8 percent for wood and paper.

On financial services, Russia will allow foreign insurance companies to set up branches after nine years while the overall foreign capital participation in the Russian banks will be limited to 50 percent.
Russia would also allow 100 percent foreign-owned companies to engage in wholesale, retail and franchise sectors.

Need to assess impact of free trade agreements

The National Economic and Development Authority (NEDA) has underscored the need for the Philippines to assess the impact of these trade agreements — particularly those where the country is a signatory — on its efforts to achieve inclusive growth and reduce poverty.
This was stressed by Socio-economic Planning Sec. and NEDA director-general Arsenio Balisacan during the recent  Development Policy Research Month (DPRM) Research Fair 2012 in Makati.
Balisacan urged research institutions particularly the Philippine Institute of Development Studies (PIDS) to look closely at how regional economic integration may be taken advantage of to provide high- quality jobs even for the unskilled workers.
“The need for the revival of the manufacturing sector, which has been stagnant for three decades, cannot be overemphasized,” said Balisacan.
He noted that the manufacturing sector could generate high productivity jobs, leading to higher employment and lower poverty incidence, which is the essence of inclusive growth.
Balisacan also cited the establishment of PIDS and the important role that science and analysis play in the formulation of policies that ultimately impact on the lives of our people.
“In the world of policy where diverse political, economic, and social interests converge and, many times, conflict, science and research provide a framework under which rational decisions can be formulated.”
“Through the years, PIDS and the other research and development institutes taking part in the research fair have upheld evidence-based policymaking for the country,” Balisacan said.
PIDS has produced a number of key studies addressing issues, and offering evidence-based policy recommendations, on regional economic integration, competition policy, and poverty reduction issues.
Balisacan also underscored the need for science and analysis in the formulation of development policies that would continue to highlight the significance of think tanks such as PIDS.

Philippine tuna industry to benefit from EU-Philippine free trade pact

The Philippine tuna industry would benefit from a free trade agreement with the European Union (EU), according to Dr. Danilo
Israel, a senior research fellow of the Philippine Institute of Development Studies (PIDS).

Dr. Israel  said that if the country’s tuna industry is afforded similar privileges as competitors from similarly situated former European colonies in Africa, the Caribbean and the Pacific regions, a Philippine-EU free trade agreement will bolster the export of processed tuna to Europe.

Africa, Caribbean and Pacific countries, for reasons that these were former colonies of member countries of EU, enjoy zero tariff on their tuna exports to that economic bloc, a privilege not accorded the Philippines which was a Spanish colony for more than 300 years. Philippine tuna is slapped a high 24 percent tariff in Europe.

Speaking on the impact of a PHL-EU free trade pact on manufactured goods, Dr. George Manzano advised government negotiators to approach the challenge by negotiating tariff reduction on a line-by-line basis, concentrating on goods that are slapped high tariffs in the EU for
possible reduction, and zero in on domestic industries threatened by imports from Europe to enjoy local tariff protection.

But when Manzano presented samples of what tariff lines to negotiate, he found very few exports to push as most manufactured exports to Europe already enjoy zero or near zero tariffs.

Manzano hinted that the local manufacturing sector too would benefit little from a new trade pact with the EU.

Empirical evidences had shown that manufactured products from the Philippines led by electronics already enjoy minimal tariff in the EU
trade bloc.

ADB raises economic growth forecast for the Philippines

With the positive first half performance of the economy, the Asian Development Bank (ADB) has scaled up its gross domestic product (GDP) growth forecast for the Philippines from 4.8% to 5.5% in 2012.
However, ADB said the economy needs to create more job opportunities to link economic growth to poverty reduction.

“Increased business confidence bodes well for investment and future jobs,” said ADB chief economist Changyong Rhee.

“But the Philippines must guard against weaknesses outside its own economy that could have a knock-on effect,” said Rhee.
In its update of the Asian Development Outlook 2012,  ADB noted that the Philippine economy continues to show its strength despite global and regional economic slowdown.
Stronger than expected economic growth in the first half of 2012 was broadly based. Private consumption was buoyant, fixed capital investment quickened, public spending rebounded, and net exports contributed to growth. Inflation remains under control at 3.5% for 2012.
ADB forecasts GDP growth for 2013 at 5.0%, unchanged from early projections. In 2013, inflation is forecast at 4.1% on the back of higher global food prices, as well as pressures from sustained strength in domestic demand.
But softer demand from industrialized countries than forecast in the report could undermine export and investment prospects for the Philippines, said ADB.
The service sector is expected to continue to benefit from robust private consumption and investment. The business process outsourcing industry employed approximately 638,000 Filipinos in 2011 and this number is expected to rise by at least 20% by year end.
Although the number of new jobs has grown by one million over the past year, this only slightly exceeds overall growth in the labor force, and mainly reflects a rise in part time employment with 1.5 million positions created. Full-time jobs fell by 500,000 in the same period.
“The key challenge is to link economic growth to poverty reduction. Despite solid economic growth, job generation remains inadequate, reflected in rates of unemployment and underemployment. The incidence of poverty remains high at 26.5% in 2009, compared to 26.4% in 2006 and 24.9% in 2003,” said Neeraj Jain, ADB’s country director for the Philippines.
Manufacturing will also benefit from a gradual recovery in exports and growth in domestic demand. Construction, meanwhile, will benefit from public infrastructure spending and implementation of public-private projects.