ROCKWELL Land Corp. said its board approved on Friday the appropriation of P7 billion of the company’s retained earnings of P12.1 billion for capital expenditure covering the period 2019 to 2021.
The retained earnings level was as of Sept. 30, the company said told the stock exchange.
Rockwell did not disclose details, nor discuss the planned expenditure program for the three-year period.
As of September, the company reported a net profit attributable to the parent equity holders of P1.878 billion, up from P1.612 billion a year earlier. The increase comes after it recorded gross revenue of P12.201 billion from P10.721 billion in the same period nine-month period last year.
Basic earnings per share was at P0.31, from P0.26 previously.
Rockwell Land on Friday rose 1.01% to P2.00. — Victor V. Saulon
VISTA Land & Lifescapes, Inc. has priced its fixed-rate retail bonds at 8% for the five-year instruments due in 2023, and at 8.25% for the seven-year bonds due in 2025.
The total bond principal is P5 billion with an oversubscription option of up P5 billion. They will be issued out of the company’s P20 billion shelf registration, which the Securities and Exchange Commission made effective on July 18, 2018.
Vista Land said the bonds are to be offered through China Bank Capital Corp., the issue manager, underwriter, and bookrunner. The offering schedule is from Dec. 10, 2018 to Dec. 14, 2018, after the receipt of the permit to sell from the securities regulator.
The company said the bonds are set to be issued on Dec. 21, 2018.
It said Credit Rating and Investors Services Philippines, Inc. rated the bonds AAA, which is the highest rating assigned by the credit rating firm.
Vista Land declined 1.15% to close at P5.14. — Victor V. Saulon
VICTORIAS Milling Co. Inc (VMC) said Friday it proposed to modify a rehabilitation plan it submited to the Securities and Exchange Commission (SEC) in April by including a compromise payment scheme for some bank loans.
In a disclosure to the Philippine Stock Exchange (PSE), VMC said that its subsidiary North Negros Marketing Company Inc (Nonemarco) used refined sugar delivery orders (RSDO) and refined sugar quedans (RSQ) issued by VMC to avail of loans from several banks, which remain outstanding.
The banks with outstanding loans are: Dao Heng Bank Inc (DHB, now BDO Unibank Inc), Land Bank of the Philippines (LBP), Bank of the Philippine Islands (BPI) and Philippine National Bank (PNB).
VMC said that while it asserts it did not benefit from the loans, it is willing to repay the banks over a period of 10 years, to avoid future and protracted litigation.
The compromise amounts are as follows: P34,136,587 for DHB; P204,907,006.50 for LBP; P55,250,000 for BPI; and P10,629,850 for PNB.
“Interests, penalty charges, legal fees, and expenses claimed against VMC in connection with the RSDOs and RSQs are deemed waived and condoned by the RSDO and RSQ claimants,” VMC quoted the order it received and transmitted to the company by its rehabilitation counsel.
“The compromise amount or any remaining balance thereof shall not be subject to any interests or changes during the 10-year payment period,” the order stated.
“Any provisions in the rehabilitation plans of VMC, particularly, the Updated Rehabilitation Plan dated Sept. 25,1998, First Addendum to the Rehabilitation Plan as of Feb. 5, 1999, Second Amendment to the Rehabilitation Plan dated July 22, 1999, Alternative Rehabilitation Plan, and the Debt Restructuring Agreement dated April 29, 2002, inconsistent herewith are hereby repealed or modified accordingly,” according to the order.
Meanwhile, VMC was also directed to determine the status of RSDO claims by Asianbank and submit a plan to settle it if it determines the existence of an outstanding debt; validate other pending claims against the company particularly labor cases in other courts or tribunals; discuss with other claimants and creditors contingent claims and labor claims pending before courts or other tribunals; and submit a separate plan for the settlement of the claims for approval. — Reicelene Joy N. Ignacio
SUMMIT Media said Friday that it completed its $1.2 million seed round fundraising for its livestream and content mobile app Kumu.
In a statement, Lisa Gokongwei-Cheng, president and chief executive officer of Summit Media, said: “Our investment in Kumu is an important addition to our portfolio. We are committed to investing in the future of media, as we are cognizant of our audiences’ rapidly changing needs.”
Ms. Gokongwei-Cheng is also a director of Robinsons Bank.
Other institutions that joined Summit Media, the lead investor in the seed round are: FOXMONT Capital Partners; Two Culture Capital, and Jove Schrottmann of Mandala Spa Boracay.
Summit Media has 16 titles including Entrepreneur, Cosmo and Top Gear Philippines.
“Since livestreaming is still relatively new in the Philippines, it is our company’s responsibility to show Filipinos what is possible to achieve through this medium,” Kumu Head of Strategy and Co-Founder Rexy Dorado said.
Roland Ros, CEO and Co-Founder of Kumu, said that part of the seed round will be used to help grow the community of content creators.
“We are allocating some of our funding to supporting our livestreamers across the creative process, beginning with training and going all the way up to production. Our goal is to create the world’s first social television network, where content creators can readily find enthusiastic fans who want to engage with them,” Mr. Ros said. — Reicelene Joy N. Ignacio
JAPAN’s Tajima Roofing Inc., a building materials maker, opened its first flagship store in the Philippines to highlight its tile products, its local partner Future Flooring Inc. said.
The store at Shangri-la Plaza Mall in Madaluyong features vinyl tiles for various applications including hospitals, gyms, and outdoor spaces.
“Vinyl is a very good option because it is not affected by termites, it does not expand (when exposed to) weather. It can take on water… (Tajima also has) certain flooring for special applications like sports… and for outdoors. You rarely see vinyl flooring used outdoors,” Roy C. Chua, managing director of Future Flooring, Inc., Tajima’s exclusive distributor in the Philippines, told BusinessWorld.
Tajima’s floor tile product line also addresses various specialized applications like flooring for event spaces and flame-retardant carpet tiles.
“We want to bring something new to educate the Philippine market,” Kyuko Hayama, Tajima’s manager for international markets, told BusinessWorld.
Ms. Hayama added that the company expects the use of marble and ceramics for floorings to fade and be replaced by vinyl, which is easier to install and more environmentally friendly.
“Basically, we want to grow together with the Philippine economy,” Yoshio Kotake, Tajima executive vice president told BusinessWorld through an interpreter. — Vincent Mariel P. Galang
UnionBank of the Philippines, Inc. raised P11 billion via the issue of peso notes, the proceeds of which will go towards meeting tighter liquidity requirements.
Aboitiz-controlled UnionBank also listed the P11 billion fixed-rate debt issue at the Philippine Dealing & Exchange Corp. (PDEx) in Makati City on Thursday.
The notes will mature in two years and carry an interest rate of 7.061%, payable quarterly until 2020.
The listing represents the initial tranche of its P20-billion bond or commercial paper program approved by its board on Aug. 31.
In his speech at the listing ceremony, UnionBank treasurer and chief financial officer Jose Emmanuel U. Hilado said the offer received “overwhelming interest” from investors.
“We were only planning to issue P5 billion. We ended up issuing P11 billion because of overwhelming interest from both institutional and retail investors,” Mr. Hilado said.
“This kind of instrument is friendly for the liquidity coverage ratio because the full implementation in 2019 wherein you have to maintain a 100% liquidity coverage ratio,” he said. “So you need longer term liabilities instead of having just the usual short-term deposits.”
Banks have been tapping the capital markets in recent months to raise more capital ahead of stricter risk management requirements that will take effect on Jan. 1, 2019 under the international Basel 3 framework.
The Hongkong and Shanghai Banking Corp. Ltd. as well as Standard Chartered Bank were lead managers and bookrunners, and were also selling agents alongside UnionBank.
The listing brings the total volume of outstanding securities listed at the PDEx to P1.013.27 trillion, floated by 50 companies.
The Bangko Sentral ng Pilipinas recently allowed lenders to raise funds with greater ease through corporate debt paper, with new regulations doing away with approvals.
Bank of the Philippine Islands as well as Metropolitan Bank & Trust Co. recently issued fixed-rate commercial bonds, raising P25 billion and P10 billion, respectively.
Mr. Hilado said “it’s hard to say when” UnionBank will issue the next tranche, although he noted that it will be a “regular product.”
“As the bank grows, your ratios adjust. If growth is solid, that means you need to keep doing issuances like this to comply with the ratios,” he said.
“I think it will be a regular product because it’s flexible, you don’t need central bank approval. So as the need arises, you just start issuing.”
UnionBank closed at P65.95 on Friday, down 95 centavos or 1.42%. — Karl Angelo N. Vidal
PNB Savings Bank said it opened its first fully digital branch in San Juan City with no tellers and largely paperless transactions.
The new branch is equipped with interactive touchscreens, self-service kiosks, tablets, chatbots and full-function automated teller machines, among others.
In place of bank tellers, “universal officers” are on-site to assist clients in getting used to the new technology, open accounts and recommend financial products.
“This fully digital branch is much more than just a showcase of the new digital technologies in banking. It is an actual channel that efficiently connects you to new opportunities,” PNB Savings Bank President Jovencio Hernandez was quoted as saying in the statement.
Meanwhile, the newly-appointed president of PNB Jose Arnulfo A. Veloso said the bank will continue to pursue innovation.
PNB is the latest bank to turn to technology to reduce the need for bank branch staff.
Last year, UnionBank of the Philippines launched a fully digital branch, which was branded “The ARK” in Makati, with plans to open more in Taguig, Cebu and Davao by converting existing branches.
Meanwhile, Bank of the Philippines Islands has said that it adopted a so-called “omni-channel” strategy with digital platforms complementing traditional modes of banking.
PNB, the country’s fifth-biggest bank, announced in September that it will absorb PNB Savings Bank, subject to regulatory approval.
Once combined, the lender will have a total of 707 branches and over 1,390 automated teller machines, on top of 70 overseas offices. — Karl Angelo N. Vidal
THE peso strengthened on Friday as the dollar was undermined by weak jobs data and lower global oil prices.
The peso closed at P52.71 to the dollar on Friday, against its the P52.76 finish Thursday.
The peso was stronger the whole day, opening the session at P52.689. Its intraday peak was P52.60, while the low was P52.73.
Trading volume declined to $973.95 million from $993.25 million on Thursday.
A foreign exchange trader said the peso recovered today after a weak US jobs report.
According to the payrolls processor Automated Data Processing, Inc., the private sector in the US added 179,000 jobs in November, lower than the anticipated 195,000 jobs in a Bloomberg poll.
October employment on the other hand was revised to 225,000 additional jobs, slightly lower than the previous print of 227,000.
The trader also attributed the dollar’s weakness to “heightened US-China trade relations” following the arrest of Huawei chief financial officer Meng Wanzhou in Canada, who is also facing extradition to the US.
The arrest of the Chinese executive is expected to undermine the 90-day ceasefire signed by the US and China on Saturday during the G-20 Summit in Argentina.
Michael L. Ricafort, economist at Rizal Commercial Banking Corp., said the peso strengthened after The Organisation of Petroleum Exporting Countries failed to to agree on oil production cuts. The bloc is expected to meet again on Friday.
“[This resulted] in lower global oil prices and a weakening of the dollar against major emerging-market currencies including the peso,” Mr. Ricafort said in a text message. — Karl Angelo N. Vidal
With so many aspiring entrepreneurs taking the plunge and launching their own businesses, standing out from the throng has never been harder. The local startup scene had been on the rise since 2012. By 2017, PwC Philippines recorded roughly 300 startups operating in the country, with a vast majority of them seeing more growth in that sector over the next 12 months.
That’s good news for the community as a whole, but for new entrants, more competition means more noise to get lost in. To guide entrepreneurs in overcoming this challenge, Impact Hub and KMC Solutions gathered business experts for their VIA Startup Summit held last November 28 at The Axon at Green Sun.
Here are some six insights every startup founder needs to know:
1. Focus on your business value
Since the term “unicorn” was coined in 2013 to describe privately-owned startups worth over $1 billion, new businesses have been scrambling for the moniker. A new “unicorn” not only joins the ranks of Facebook, Uber, and AirBnb, but also grabs the otherwise elusive attention of big investors. According to Sernen Perlada, director of the Department of Trade and Industry’s export marketing bureau, fixating on labels causes its own problems.
When the drive to be a unicorn overrides the company’s purpose, “you lose focus on why you exist,” he said. If every firm is running with the same mission, how can they expect to stand out?
Instead, startups should focus on creating business value by identifying the problems that they want to solve. “Let the unicorn be your prize and not your goal. Focus on what matters and the fundamentals,” said Dr. Donald Lim, CEO of Dentsu Aegis Network Philippines.
2. Always keep your customer at the center
Knowing and valuing your customers may not only foster brand loyalty but also raise your profits. According to Sreejith Narayanan, Netcore Solutions’ international customer success head, consistent, meaningful customer engagement can increase profits up to 95 percent.
“It’s important for us to understand not just his problems and not just the way he wants to solve them, but also what values and motivations are driving those decisions… Observe what they value and not just rely on what they tell us,” said Donna Paez, innovation and business development manager of Globe Telecom.
3. When it comes to office spaces: mind the small details
According to KMC Solutions, the office space is another aspect of work life that’s often overlooked. Its location says a lot about how professional a company is, according to Riccardo Corsini, KMC Solutions’ vice president for marketing. Layout is essential in keeping your workforce efficient — maintaining separate areas for working, eating, and even playing and sleeping. “You need different spaces throughout different times of the day,” said Michael McCollough, KMC Solution’s managing director and co-founder.
Open phone lines, internet connection, a working printer: these are some things often taken for granted by employees. But even one malfunction among them can cause major headaches and kill productivity. It’s important to take note of the “little things” and keep them running for operational efficacy.
4. Fail quickly, fail cheaply, and — most importantly — learn from it
Making mistakes is part of any person’s life, moreso for any businessperson. But it’s important to get back up as quickly as possible. “How quickly you learn depends on [how] willing [you are] to do something about [failure]… Once you are able to pick up properly and create the right product that adapts to the market that you’re trying to address, then eventually you’ll get it right,” said Fred Tiñga, president of Global Electric Transportation.
Another thing to keep in mind is to try to minimize the collateral damage caused by your mistakes. “Try to get value out of it,” said Ronna Reyes Sieh, managing partner of The Coding School. “There are ways to take high risks cheaply, so think about how you make decisions.”
5. Stay in Day One
Every startup begins with the drive and excitement to innovate, this period which Jeff Bezos calls “Day One”. But as the company starts to get bigger and more successful, there will be a tendency to settle into familiar processes because, “If it ain’t broke, why fix it?” Continuing this pattern of contentment will eventually lead to “Day Two”: stasis, followed by irrelevance, followed by decline, and finally, death.
To avoid “Day Two”, startups have to keep their innovation caps on throughout their life cycle. “We ingrain in ourselves the idea that past results do not equal future successes. We strive to always innovate and strive to be always open to change,” said Paez.
6. If it’s time, let go
It’s often very hard for startup founders to let go of their brainchild. But when the only way forward is apart, too much emotional attachment can drive businesses to the ground. While this isn’t a choice that all startup founders need to make, they need to be open to the idea.
Ces Rondario, co-founder of Impact Hub Manila, said that, when mentoring founders, the main piece of advice they give is to keep an entrepreneurial mindset. “One of the first things that I asked was, ‘What is your exit plan?’ Because there are different strategies… It’s okay if they want to stay in their startup forever. But their growth pattern will be determined by their exit plan.”
“I decided today I wanted to take the power back. Today, I wear the pants,” Lady Gaga declared in her speech for Elle’s Women in Hollywood in October. In a year of monumental strides forward for equality in entertainment, global politics, and sports, her words captured the battle cry of women in 2018.
In the local entrepreneurial scene, more and more people are becoming accustomed to women “wearing the pants”. But perception is one thing — reality, another thing altogether. A 2016 Facebook study conducted by Development Economics and YouGov, on behalf of Facebook, found that 87% of Filipinas wanted to start their own business. Unfortunately, barriers like a lack of educational resources and access to proper financing hinder them from realizing their dreams.
That’s where initiatives like #SheMeansBusiness, a global Facebook program aimed at educating and empowering female digital entrepreneurs, come in.
The future is female
Since launching in the Philippines in 2017, #SheMeansBusiness has facilitated the training of 92,000 women through online resources and in workshops across 10 cities. In partnership with Connected Women, Bayan Academy, the Department of Information and Communications Technology (DICT), and Department of Trade and Industry (DTI), this program not only offers technical training, but provides the scaffolding for building a supportive network of Filipina entrepreneurs.
Any woman interested in the program can avail of free online modules and physical workshops, ranging from technical dives into creating a business page, to targeting core audiences, to engaging with customers on social media. Women can access online lessons prepared by Connected Women through a special microsite powered by Blueprint, Facebook’s teaching tool. Meanwhile, Bayan Academy representatives mentor participants of whole-day physical workshops.
“When women do better, we all benefit.” said Clair Deevy, Facebook’s director of community affairs in the APAC and Latin America regions. “Filipino small business owners are resourceful and we want them to understand how going digital can expand their ventures.”
According to the Development Economics and YouGov study, empowering even just 60 percent of women who want to start their own business would build 1.35 million new businesses by 2021, translating to an estimated 3.93 million new jobs for Filipinos.
Earning value, being valued
With the help of local cacao farmers and indigenous women, former public school teacher Catherine Taleon keeps her Ilonggo heritage alive by producing traditional tsokolate through her business, Balay Tablea. Fellow Ilongga Daisy Catague-Cababasay lives out her passion for cooking with Takuri Cafe, whipping up dishes like laksa and satay which she picked up from her time abroad. Both women knew they wanted to venture into entrepreneurship, but neither knew where to start. That is, until joining up with #SheMeansBusiness.
Like Daisy, Catherine felt lost trying to build her business online. “I had the Facebook page… but it was inactive. I [didn’t] manage it, I [didn’t] even open it,” she said. “But after the training with Bayan Academy, that was when I saw how good it was. The first time I posted, so many people liked it and a lot also inquired… The best part is that my friends saw that it works, so they were also motivated.”
Through online referrals, Balay Tablea found major clients outside Iloilo, including hotels in Bacolod, Metro Manila, and Palawan. Similarly, Daisy’s Takuri Cafe doubled its number of customers.
But beyond monetary gains, Catherine and Daisy found that becoming entrepreneurs had a second, more fundamental benefit: building their self-worth. “They woke up this character in me that I didn’t know was there,” Catherine said. “It made me see my value, and it made me see my capacity that I didn’t see before.”
Opportunity, not sacrifice
Cultural norms and expectations for women in the family have left mothers and budding entrepreneurs like Catherine and Daisy especially vulnerable to feelings of stagnation and irrelevance.
“The women tend to be impacted the most when they have kids or when they drop out of the workforce,” said Gina Romero, CEO and Founder of Connected Women. “So technology actually really is a game-changer for women especially, because it gives us more flexibility and freedom to work from anywhere.”
With initiatives like #SheMeansBusiness, Romero hopes that more women can take charge of their lives as a part of the Philippine workforce.
“For many years, work has been a sacrifice for women… Work should not be a sacrifice; it is an opportunity,” Romero said. “Whether you’re working for survival purposes, or whether this is something that you’re doing because you want to follow your dreams and do something more with life, the opportunity should be there.”
Every first week of December, the Department of Trade and Industry (DTI), in collaboration with the Export Development Council and the Philippine Exporters Confederation, Inc., conducts the National Exporters’ Week (NEW), as provided for by Presidential Proclamation 931 series of 1996, signed by former President Fidel V. Ramos, and House Resolution No. 33.
This annual event serves as a way for the government and the private sector to assert their commitment to export promotion and development.
The theme of this year’s NEW is “SPICE Up to Scale Up: Expand Exports for Inclusive Prosperity. “SPICE” is an abbreviation of five different actions: stimulate, permeate, innovate, connect and expand.
The highlight of the National Exporters’ Week is the National Exporters’ Congress (NEC), which is being held today, Dec. 7, at the Philippine International Convention Center in Pasay City. It is expected to draw hundreds of delegates, including exporters, and those from business support organizations, government agencies, the private sector, and the academe.
NEC will feature seminars on subjects concerning seizing market prospects, the ease of doing business, and innovative approaches to attain business sustainability, among others. Those who will give attendees insights into these matters are officials of the trade, agriculture, finance, and science and technology agencies, and other invited resource people.
“This year, the congress seeks to provide Philippine exporters a venue where they could discuss emerging trends, market opportunities, innovative ideas, and technologies,” said Senen M. Perlada, director of DTI’s Export Marketing Bureau.
For the first time, representatives from the public and private sectors can organize business matching meetings and networking at the National Exports’ Congress’ Business Matching Hub, allowing participants to come together to converse about business growth and forge collaborations that can help strengthen the Philippine export industry.
Another first at the congress is the Logistics Services Philippines (LSPH) Exhibition, where exporters can gain access to the full range of logistics services from around the country and engage with LSPH providers.
There will also be an Export Enabler Exhibit, where exporters interface with various government agencies and business organizations to help them expand their current network and get updates on market regulations and the export industry in general.
BW File Photo
The National Exporters’ Week has also featured “Usapang Exports 2018 Seminars” that dealt with the following topics: “Startups for Exporters” last Dec. 3, “Export Opportunities: Learning from the Trade Attaches” last Dec. 4 and the “International Certification and Standards for Greater Market Access for GDH (gifts, decors and houseware) and Wearables Sectors” last Dec. 5.
The Philippines has been making strides in building up its export industry. According to the Philippine Statistics Authority (PSA), in July of this year, total exports grew 0.3% to $5.85 billion from $5.83 billion in the same month in 2017. The following month, total exports grew even faster, at 3.1%, from $5.98 billion during the same period in 2017 to $6.16 billion. In September, however, the streak was broken when the value of the total exports fell 2.6% to $5.83 billion compared with $5.99 billion in September of 2017.
Electronic products were the country’s leading export, with total earnings of $3.41 billion and accounting for 58.6% of the total exports revenue in September. “This export commodity grew by 4.2%, from $3.28 billion export receipts in the same month of the previous year. Components/Devices (Semiconductors) comprised the biggest share of 43.9% among electronic products. It posted an increase of 2.6%, from $2.49 billion in September 2017 to $2.56 billion in September 2018,” PSA said.
The second top export of the country that month was machinery and other transport equipment, bringing in $343.61 million or 5.9% of the total exports revenue. Other manufactured goods ranked third with $313.20 million or 5.4% of the total export receipts.
Fresh bananas were also among the top exports, with $174.72 million in earnings or 3% of the total export revenues in September. Rounding out the top five were ignition wiring set and other wiring sets used in vehicles, aircraft and ships with $146.56 million.
Five of the other top exports, along with their sales, are the following: metal components ($121.55 million), gold ($93.68 million), coconut oil ($91.45 million), electronic equipment and parts ($89.83 million), and miscellaneous manufactured articles ($77.31 million).
“Total receipts from the top 10 major exports amounted to $4.87 billion or a share of 83.5% of the total export. This recorded an increase of 0.8% from the September 2017 export value of $4.83 billion,” the Philippine Statistics Authority said.
By Christine J. S. Castañeda Senior Researcher
APPROVED foreign direct investment (FDI) commitments rose to their highest level in nearly two years last quarter even as growth slowed from the preceding three months and a year ago, according to data the Philippine Statistics Authority (PSA) released on Thursday.
The value of FDI pledges registered with the country’s seven key investment promotion agencies increased by 6.5% to P45.85 billion last quarter from the P43.05 billion in the same period last year.
The latest tally was the biggest amount since the P125.69 billion recorded in 2016’s last quarter.
Third-quarter growth, however, was slower than the second quarter’s 70.4% and the 61.2% in July-September last year.
The report counted FDIs registered with the Philippine Economic Zone Authority (PEZA), Board of Investments (BoI), Clark Development Corp. (CDC), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB), BoI-Autonomous Region in Muslim Mindanao (BoI-ARMM) and Cagayan Economic Zone Authority (CEZA).
The third-quarter data brought committed FDIs to P91.009 billion in the first nine months to September, 8.2% more than the P84.097 billion a year ago.
Investment pledges of Filipinos and foreign nationals totaled P259.75 billion last quarter, 5.3% less than the P274.37 billion approved the past year. Domestic investors accounted for P213.89 billion or 82.3% of the total.
If they materialize, foreign and local investments pledged in the third quarter are expected to generate 41,797 jobs across industries, 10.3% more than the 37,891 prospective jobs from investments pledged a year ago. INTEREST STILL ‘HIGH’
“Foreign investments for 2018 were actually expected to outdo the previous year, and this higher level of total inflow was not surprising,” said Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines.
“Overall, this is still due to the high interest in the Philippines as one of the investment destinations in Southeast Asia. I think that external environment threats such as the US-China trade war are largely beneficial to China’s peripheral trading partners such as the Philippines.”
Sought separately for comment, Michael L. Ricafort, economist at Rizal Commercial Banking Corp., said: “Foreign investments into the Philippines continued to grow amid improved demographics and economic fundamentals, as the country is one of the fastest-growing economies in ASEAN/Asia and the country has the 12th biggest population in the world at 106 million, thereby making the country a compelling destination for the world’s biggest global/multinational companies that seek further business growth/expansion.”
“The US-China trade has caused some shifts/increased flow of foreign direct investments from China to nearby ASEAN countries such as the Philippines to avoid higher tariffs imposed on Chinese exports to the US and on US exports to China, partly resulting in higher foreign investments into the country’s manufacturing sector.”
Foreign investment commitments are different from the actual capital inflows monitored by the central bank for balance of payments purposes. Latest Bangko Sentral ng Pilipinas data showed that net foreign direct investments grew 31% to $7.422 billion in the eight months to August from $5.665 billion in 2017’s comparable period. Net FDI inflows grew 2.6% to $1.67 billion in July-August from $1.62 billion in 2017’s comparable two months.
By industry, electricity, gas, steam and air conditioning supply got 35% of third-quarter pledges at P16.064 billion, followed by real estate activities’ 25.6% share of P11.757 billion, manufacturing’s 16.595% contribution of P7.61 billion, as well as administrative and support services’ 13.136% share of P6.024 billion.
The three months to September saw PEZA contributing bulk of foreign investment pledges at P22.45 billion or 48.968% of the total. It was followed closely by BoI with P22.42 billion (48.9%), CDC’s 0.718% share (P329.016 million), CEZA’s 0.594% (P272.424 million), BoI-ARMM’s 0.513% (P235.145 million), SBMA’s 0.256% (P117.497 million) and AFAB’s 0.047% (P21.65 million).
In terms of location, Northern Mindanao got the most FDI pledges in the third quarter of P15.45 billion or 33.699% of the total, followed by Central Luzon with P13.525 billion (29.494%), the National Capital Region with P8.336 billion (18.18%), the Cavite-Laguna-Batangas-Rizal-Quezon region (CALABARZON) just south of Metro Manila with P6.658 billion (14.52%) and the Occidental and Oriental Mindoro-Marinduque-Romblon-Palawan region (MIMAROPA) in southern Luzon with P879.873 million (1.919%).
The British Virgin Islands was the top source of committed FDIs in the third quarter with P15.507 billion (33.8%), followed by Malaysia with P10.676 billion (23.3%), the United States with P4.514 billion (9.8%), Singapore with P3.764 billion (8.2%), Japan with P1.983 billion (4.3%), the Netherlands with P1.625 billion (3.5%), Australia with P1.165 bilion (2.5%) and Taiwan with P1.105 billion (2.4%).
Looking ahead, Mr. Ricafort said: “Any continuation, at the very least, or further expansion/escalation of the US-China trade war could still result to increased shifts of some foreign investments from China to ASEAN countries such as the Philippines.”
