Philippines’ trade deficit hits US$5.6 billion

BalisacanPhilippines’ trade deficit expanded to US$5.6 billion for January to September 2015 compared to US$1.8 billion deficit in the same period last year.

The National Economic and Development Authority (NEDA) has attributed the increase in trade deficit to the 24.7 percent decline in merchandise exports recorded in September 2015, the largest contraction since September 2011.

“On the back of sluggish global growth, economic policies should continue to encourage investments that cater to domestic demand.  Continuous improvements in product quality, innovation and infrastructure support to local industries should be sustained in order to elevate the competitiveness of the domestic industries, and make them at par with imported products,” says Economic Planning Secretary Arsenio Balisacan.

“Local industries can also take advantage of the lower prices of commodities in order to beef up inventory and expand capacity. At the same time, the purchasing power of consumers, especially the poor, needs to be strengthened,” says Balisacan.

Imports increased by 6.7 percent to US$6.2 billion in September 2015 from US$5.8 billion in the same month last year.

Balisacan says the upbeat sentiment from the business sector and an overall improvement in consumer expectations for the coming quarter would likely keep imports afloat, especially in the manufacturing and construction sectors.

“Improved purchasing power due to low inflation will also keep consumer demand vibrant in the succeeding months, and will further be ramped-up by holiday spending,” says Balisacan.

“The 40.7% growth registered in capital goods for September which is the highest for the year, is also an indication of robust economic activity moving forward.”

Imports of capital goods increased to US$2 billion from US$ 1.4 billion in the comparable period last year. Raw materials and intermediate goods also increased by 20.1 percent in September 2015 to reach US$2.7 billion compared to US$2.2 billion recorded in the same month last year.

Raw materials and intermediate goods serve as inputs in the production of final goods, while capital goods include equipment and materials in which firms invest to expand production and make production more efficient.

Import bills for consumer goods grew by 10.1 percent to US$876.8 million in September this year from US$ 796.4 million in September 2014, mainly on higher purchases of durable goods particularly of passenger cars and motorized cycle.

However, payments for non-durable goods, primarily rice, registered a decrease during the period because of lower rice volume purchased on a year-on-year basis.

“The drop in rice imports may only be temporary as the government allowed for additional rice imports in the fourth quarter of the year given the prevailing El Nino, which is still affecting domestic rice production,” says Balisacan.

 

PAL flies to New Zealand

PAL A320

The Philippine Airlines (PAL) is expanding its network with the addition of New Zealand to begin on December 2, 2015 by opening four times a week service to Auckland via Cairns, Australia.

The Manila-Cairns-Auckland service will utilize the 156-seater Airbus 320, flying every Monday, Wednesday, Thursday and Sunday.

PAL’s first flight  into New Zealand provides a most convenient route for the more than 44,000 Filipinos residing in New Zealand to visit home, while allowing Auckland and Cairns residents to discover Manila or connect to PAL’s 30 domestic and 39 international destinations.

Cairns and Auckland will become PAL’s 37th and 38th international points respectively, while Port Moresby in Papua New Guinea, set to be launched on Dec 18, will be its 39th international destination.

Records show passenger travel from the Philippines to New Zealand increased by 9.4% over the last five years, while the New Zealand to the Philippines travel grew by 11.6% over the same period.

The stopover in Cairns will enable Kiwis to visit northern Australia while those from Cairns can find a lot to explore at Auckland.

PAL is offering an introductory fare of only US$880 for a roundtrip, economy class and US$ 2700 for business class on the Manila-Auckland route, while US$705 for economy class and US$ 2044 for business class for a roundtrip Auckland-Manila route.

Roundtrip fare for Auckland to Cairns, Australia starts at US$ 378 for economy class and US$ 1658 for business class; roundtrip Cairns-Auckland route at US$ 368 for economy class and US$ 1832 for business class; roundtrip Cairns- Manila at US$ 523 for economy class and US$ 2452 for business class and roundtrip Manila-Cairns at US$ 1200 for economy class and US$ 2950 for business class.

Auckland Airport, the largest and busiest airport in New Zealand, is the second largest in Australasia.

New Zealand’s capital, Wellington, is 649 kilometers by road from Auckland or 1 hour by air.

The city of Auckland is the main transport hub and the largest in New Zealand with a population of 1.5 million, accounting for 32% of New Zealand’s total population. It is also known as “City of Sails” – set amidst volcanic islands, with numerous harbors, perfect for yachts.

PAL President Jaime J. Bautista will join guests on the inaugural flight and at a dinner-reception on Dec. 4 at Auckland where Philippine and New Zealand government officials, travel agents, tour operators, local media and representatives of the Filipino community in Auckland are invited.

“The route will stimulate passenger traffic along three travel streams – Manila- Cairns, Manila -Auckland as well as Cairns – Auckland.  The new service allows Philippine Airlines to cater to the travel needs of business and leisure travelers and showcase its distinct brand of service marked by Filipino warmth, charm and hospitality.  Filipinos residing in New Zealand will find the new service as their convenient link to their home country,” said Bautista.

 

Japan extends 241.9 billion yen loan to Philippine railway project

 

MRT

 

The Philippines has secured a P93.4 billion loan (241.9 billion yen) from Japan to fund the North-South Commuter Railway project.

The project aims to strengthen the transport network and ease serious traffic congestion in Metro Manila by constructing a commuter railway between Malolos and Tutuban, a part of the “North–South Commuter Railway Project and contribute to a more secure and sustainable economic development through promotion of investments.

Japanese Ambassador Kazuhide Ishikawa and Philippine Foreign Affairs Secretary Albert F. Del Rosario exchanged notes for yen loan on Nov. 19, 2015 in Manila in the presence of Japanese Prime Minister Shinzo Abe and President Benigno S. Aquino III.

Prime Minister Shinzo Abe announced during the state visit of the President Aquino to Japan last June 2015 that Japan would cooperate constructively in the project utilizing Japanese fund and technology.

Philippines and Japan sign social security pact

The Philippines and Japan have signed the historic agreement on social security in Manila on November 19, 2015.

The agreement is expected to reduce the burden imposed on companies and employees, thus, further facilitating people-to-people and economic exchanges between the two countries.

Employees sent from Japan to the Philippines as well as those sent from the Philippines to Japan are currently subject to compulsory coverage under the social security systems of both countries.

The agreement is aimed for solving these problems. Upon the entry into force of this agreement, those employees temporarily dispatched for a period of five years or less to the other country will be, in principle, covered only by the pension system of the country from which employees are dispatched.

The agreement will also enable the establishment of eligibility to receive pension in each country by summing up the periods of the coverage in both countries.

The social security agreement was signed by Japanese Ambassador to the Philippines Kazuhide Ishikawa and Philippine Secretary of Foreign Affairs Albert del Rosario and witnessed by Japanese Prime Minister Shinzo Abe and Philippine President Benigno S. Aquino III.

Philippines and Viet Nam to lead ASEAN growth

The Philippines and Viet Nam are expected to lead the growth in the Association of Southeast Asian Nations (ASEAN) over the next four years.

The OECD Development Centre’s Economic Outlook for Southeast Asia forecasts that ASEAN growth is projected to average 4.6% in 2015 and 5.2% over 2016-2020. Private consumption will be a large contributor to overall growth.

Real growth in Emerging Asia is projected to average 6.5% for 2015 and 6.2% annually over 2016-20. Growth will continue to slow in China while remaining strong in India at one of the highest levels in the region.

To sustain this robust momentum, the region will need to weather China’s slowing growth, which will continue to affect the rest of the region’s growth prospects, the impacts of the monetary normalisation in the United States and slowing productivity growth, says the Outlook.

Enhancing regional ties can play a key role in maintaining the growth momentum, the report says, in a special chapter on the topic.

Emerging Asia – Southeast Asia, China and India – is set for robust – though more moderate than in recent years – growth over the medium term, according to the latest OECD report.

“The region remains exposed to domestic and external risks. To maintain the growth momentum, strengthening regional ties is imperative. Enhanced monitoring capacities through better indicators and peer learning can make the regional agenda more effective and help move towards a global ASEAN integration,” said OECD Deputy Secretary-General Rintaro Tamaki.

The scale and scope of coordination need to be maximised among nations, among regions and sub-regions. Equally important is integrating these ties at the global ASEAN level, which involves deepening cooperation with neighbouring economies.

According to the OECD Outlook, a strong network of relations at various levels is essential for sustainable growth, including by taking active steps to realise a single economic market.

Reducing the disparities that hinder sustainable and inclusive growth is critical: poverty persistence and the uneven state of infrastructure throughout the region impacts development. Countries in need of priority action include Cambodia, Lao PDR and Myanmar.

“Green growth as well as the private sector as drivers of growth stand to benefit tremendously from the integration agenda,” said OECD Development Centre Director Mario Pezzini.

Removing tariffs and non-economic barriers can promote integration and facilitate trade in  demanded renewable energy. Hydropower from the Mekong River, for example, remains a promising source of future generating capacity to be exported throughout the region.

Similarly, with stronger economic integration, local businesses will have tangible opportunities to expand their operations beyond national borders and transform into regional players or ASEAN enterprises, says the OECD Outlook.

Formulating new development strategies for the region will require adopting a comprehensive package of reforms for small- and medium-enterprises, finance, infrastructure, labour market and environmental policy as well as in the agriculture, education, social security and tourism sectors, according to the Outlook’s country-specific structural policy notes.

 

Peru to host 2016 APEC Economic Leaders’ Meeting

 

PeruPeru will chair the 24th Asia-Pacific Economic Conference (APEC) Economic Leaders’ Meeting in 2016 following the success of 23th APEC Economic Leaders’ meeting hosted by the Philippines.

Leaders of the 21 APEC member-economies ended their meeting in Manila on Thursday by issuing the 23nd APEC Economic Leaders’ Meeting Declaration— Building Inclusive Economies, Building a Better World: A Vision for an Asia-Pacific Community.

The Manila Declaration outlines new commitments for APEC members to take forward over the coming year to build inclusive economies; foster micro, small and medium enterprises’ participation in regional and global markets; build sustainable and resilient communities; invest in human capital development; and enhance the regional economic integration agenda.

“While achieving ongoing economic transformation will not be easy, APEC Leaders are confident that APEC members will continue to drive regional and global economic prosperity through quality economic growth, as supported by these collective commitments.”

President Aquino urges APEC leaders to strengthen quality growth

AquinoPhilippine President Benigno Aquino III has challenge leaders of the Asia-Pacific Economic Conference (APEC) to find ways to sustain and strengthen quality growth, particularly by considering policy responses that promote inclusive growth, while addressing the current domestic and external challenges to APEC’s growth.

The Philippines hosts the 23rd APEC Economic Leaders’ meeting  which concluded on Thursday afternoon.

“Building on APEC’s achievements over the past generation, the Philippines hosts APEC with a people-centered agenda that embraces all segments of society as invaluable participants in a growth that is holistic,” said President Aquino III.

President Aquino, chair of the proceedings, called on the leaders of the 21 members of APEC to advance an agenda for joint action that lifts their economies and improves the Asia-Pacific region’s prospects for the future.

He explained that a growth agenda creates jobs, sends children to school, puts food on the table, raises standards of living, protects the environment, fosters creativity and innovation, and levels the playing field.

“In short, growth that balances the pressing needs of the present with our shared mission of leaving behind a region and a world that is better than we found it,” said President Aquino.

 President Aquino noted APEC’s role as both an incubator of next generation policy ideas and initiatives, and a mechanism for facilitating implementation across the region’s diverse member economies.

He also described the importance of this role towards realizing APEC members’ Bogor Goals for free and open trade and investment and addressing shared development challenges as well as building momentum for the COP21 climate change conference in Paris and World Trade Organization Ministerial Conference in Kenya to implement the Bali Package.

APEC member-economies encircle the Pacific Rim and together account for about forty per cent of the world’s population, half of global trade, 60 per cent of total GDP and much of the world’s growth at present. The Philippines, a founding member of APEC, previously hosted the APEC Economic Leaders’ Meeting nearly two decades ago—in 1996 in Subic Bay.

“Together, we can write a growth story with a vision of economic prosperity and interconnectedness felt at all levels,” President Aquino concluded. “As regional economic integration continues to take form, APEC’s role – when viewed through the prism of inclusive growth – will be defined not only according to the future of economies but also of the people that drive economic growth.”

 

Ayala Land, Inc wins US$84.7 million transport terminal project

Ayala Land, Inc., one of the leading Philippine land developers has won the US$84.7 million Integrated Transport System South Terminal project after submitting the bid with the lowest annual grantor payment of US$5.6 million. 

“This is the second integrated transport system project that we have awarded. Our goal here is to give passengers coming from the South seamless transfers to other modes of transportation, as well as help decongest traffic in the Metro.” said Transportation Secretary Jun Abaya.

 Ayala Land is required to submit post-award requirements to the Pre-qualification, Bids and Awards Committee (PBAC) no later than 20 days from the receipt of the notice of award. 

Ayala Land, Inc. is responsible for the design and construction of the new terminal which will be situated in a 5.57 hectare land along FTI Compound in Taguig that would connect passengers travelling from neighboring provinces such as Laguna and Batangas to other modes of transport including buses, taxis and jeepneys.

Construction is set to commence in August 2016 and would be completed in January 2018. Operations of the terminal will be in full swing by February 2018. Ayala Land will operate and maintain the terminal for a period of 35 years.

President Aquino calls for greater collaboration in Asia Pacific

Philippine President Benigno S. Aquino III has called for greater collaboration between the Asia-Pacific region’s governments and businesses to ensure stability needed to foster economic opportunities for more people in the changing global environment.

“Confronted by an increasingly complex, interconnected, and unpredictable world, we are all challenged to look at trends that may cause disruption, so that we can act with resilience and craft a response with inclusivity at its core, ensuring no one is left behind,” said President Aquino.

“Regardless of the sector you belong to, the work of innovation begins with the correct appreciation of the problem, which leads to the correct crafting of the solution,” he continued. “Policymakers must provide the environment that nurtures this.”

Areas of focus included next steps towards a Free Trade Area of the Asia Pacific (FTAAP), a concept introduced by APEC Business Advisory Council to APEC members in 2004 by the private sector. The pursuit of region-wide growth through services market opening and development; infrastructure finance expansion; support for micro, small and medium enterprise growth; and the promotion of sustainable development and the rule of law were additional points of attention.

“Global megatrends are changing the landscape and are creating new challenges on economies, business and society as a whole,” explained Doris Magsaysay-Ho, 2015 Chair of the APEC Business Advisory Council (ABAC), pointing to demographic and social change, rapid urbanization, global economic power shifts, climate change and resource scarcity, and the impact of new technology. “Consumer demands are rapidly changing, compelling everyone to review business models and delivery systems.”

“We applaud the recent conclusion of the Trans Pacific Partnership, call for the completion of the Regional Comprehensive Economic Partnership and are encouraged by the progress of the Pacific Alliance as important pathways to the Free Trade Area of the Asia-Pacific,” Magsaysay-Ho, noted, adding that ABAC is now working to identify next generation business and investment issues so that the FTAAP becomes responsive to the needs of business big and small alike.”

ABAC representatives suggested APEC members increase their focus on the services sector as the single biggest contributor to employment and output in the region. They underscored that most barriers to services trade are structural in nature and require ambitious policy and regulatory reform while noting ABAC’s contribution to a new services cooperation framework on the table among APEC members.

“Global megatrends offer new growth opportunities especially for small and medium enterprises,” said Magsaysay-Ho, advocating for inclusive business models and a policy environment to support the internationalization of firms in the sector through e-commerce. “Unlocking the remarkable potential of entrepreneurs needs a robust innovation ecosystem.”

“We are offering to serve not just as a resource for knowledge-sharing but as partners in developing policies and action that will usher in an age of shared prosperity for APEC and the region’s people, she concluded.”

Japan confers Order of the Rising Sun to former trade chief

The Japanese government has conferred the Order of the Rising Sun, Gold and Silver to former Philippine Trade Secretary Peter B. Favila in recognition of his valuable contribution to strengthening and deepening  Japan-Philippines bilateral relations.

Favila was former Bangko Sentral ng Pilipinas (BSP) Monetary Board member and former Co-Chair of the Japan-Philippines Economic Partnership Agreement (JPEPA) Sub-Committee on the Improvement of Business Environment.

Mr. Favila has earned three decades of expertise in the banking and finance industry. He led three local commercial banks and later chaired the Philippine Stock Exchange (PSE), after which, he was appointed as the Secretary of the Department of Trade and Industry (DTI) in 2005. During his five-year term, Mr. Favila made his significant contribution to the conclusion of Japan-Philippines Economic Partnership Agreement (JPEPA) negotiations and its subsequent ratification.

As JPEPA is the first comprehensive bilateral trade agreement entered into by the Philippines, the negotiation process involved long periods of reviews, consultations and coordination efforts from both countries. With Mr. Favila’s strong leadership as a Trade Secretary, JPEPA was finally ratified by the Philippine Senate in 2008.

Mr. Favila also co-chaired the JPEPA Sub-Committee on the Improvement of Business Environment. Under the JPEPA framework, the Government of Japan and the Government of the Philippines continuously foster its strategic relationship by bringing together both the public and private sectors to address the overall business climate of the Philippines, creating a friendlier and enabling environment for Japanese investors.