Cebu Landmasters to launch first Luzon project in second half

February 2, 2024 | 12:01 am

LISTED PROPERTY developer Cebu Landmasters, Inc. (CLI) is aiming to launch its first project in Luzon by the second half of this year, a company official said.

The company’s first Luzon project will feature 2,000 homes spanning 25 hectares, CLI Chief Operating Officer Jose Franco B. Soberano told reporters on Jan. 28.

“We’re starting in Bicol, in Naga City. But we’re still finalizing the property. But hopefully we can launch in the second half of this year… We’re preparing the design,” he added.

CLI previously said that the first project of its planned Luzon expansion would feature its economic housing brand Casa Mira.

The project’s construction will begin by the third or fourth quarter, Mr. Soberano said.

The project is expected to be completed after three years, he added.

“We already mastered what we’re doing in Visayas and Mindanao. We feel that our brand of real estate can be done (in Luzon). We want to show what we can do,” Mr. Soberano said.

CLI’s portfolio consists of residences, offices, hotels and resorts, mixed-use developments, and townships.

On Thursday, CLI shares retreated by one centavo or 0.38% to P2.63 apiece. — Revin Mikhael D. Ochave

How PSEi member stocks performed — February 2, 2024

February 2, 2024 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Thursday, February 2, 2024.

NEDA sees new taxes as necessary to achieve PHL transformation goals

February 1, 2024 | 10:43 pm

THE National Economic and Development Authority (NEDA) cited the need for new tax measures to achieve fiscal consolidation, which will keep the Philippines on track with its plans for extensive economic and social transformation.

The recommendation was made late Wednesday with the release of the Philippine Development Report 2023, which outlines strategies going forward for meeting the government’s development goals.

“The fiscal targets for 2023 are likely to be met. However, sustaining this achievement until 2028 would be challenging without the prompt enactment of new tax measures,” it said.

The government is hoping to reduce its debt-to-gross domestic product (GDP) ratio to below 60% by 2025 and bring down the deficit-to-GDP ratio to 3% by 2028.

“The (current) proposed tax measures, which include excise taxes on sweetened beverages, VAT on digital service providers, and a new fiscal regime for mining, are expected to generate over P900 billion in additional revenue from 2024 to 2028,” it said.

“The Executive and Legislative branches need to closely collaborate to ensure that the resulting measures do not lead to revenue shortfalls,” it added.

The NEDA position on taxes apparently runs counter to the Department of Finance’s (DoF) announcement that no new consumption-based taxes are planned this year, with the tax collection arms of the government instead focusing on increasing their collection efficiency.

NEDA added that “economic and social transformation” will depend on a strong fiscal foundation, finding more growth drivers, and accelerating innovation, sustainability, and digitalization.

The report also called for fast-tracking other reforms and improving efficiency in state spending through expedited procurement and digitalizing processes, among others.

“The government’s rightsizing program will also be pursued through restructuring to address new priorities, as well as through merging or abolishing government agencies to create a more efficient bureaucracy,” it said.

“These reforms, when implemented fully, are expected to ease the fiscal burden as indicated by, say, declining government deficits and overall public debt as a proportion of national income or GDP,” it added.

The report noted that while most fiscal targets are on track, macroeconomic targets are “slightly below or falling below the target.”

The economy grew by 5.6% in 2023, falling short of the government’s 6-7% full-year target.

“There have been significant improvements in the labor statistics, but much work needs to be done in generating quality employment,” it added.

NEDA also cited the need to “expand the economic pie.”

“The factors that constrained demand growth in 2023 may continue to persist in 2024. However, there are potential solutions that can be implemented to address these issues,” it said.

The report noted that household spending was dampened by elevated inflation.

“For 2024 and beyond, a multi-pronged solution is being proposed, recognizing that the issue has arisen due to a combination of external and domestic factors,” the NEDA said.

“The solution will involve a blend of strategic trade policy, targeted production subsidies, demand management, and confidence-building communication, along with productivity-enhancing strategies,” it added.

NEDA also called for ensuring food security through adopting a “value-chain mindset.”

“The first node is to ensure an adequate food supply. The solution must be to improve the productivity of the agriculture, fishery, and forestry (AFF) sector. This requires more responsive R&D, as well as more timely and accurate information and forecasting models, and extension services.”

It also recommended improving access to quality education to address learning losses; building sustainable settlements and well-planned communities; and accelerating digital transformation.

The government must also focus on improving the business climate to attract trade and investment, promote competition, and ramp up infrastructure. — Luisa Maria Jacinta C. Jocson

Use RE as a means to attract more mining investment, US official says

February 1, 2024 | 10:40 pm

STOCK PHOTO | Image by Maria Maltseva from Pixabay

WIND and solar power must be harnessed not just for the sake of the environment, but also to attract foreign investment in mining, particularly in critical minerals, a US State Department official said.

“The Philippines can take a vulnerability, that we all have, and pursue our desire to diversify our critical minerals supply chain, to attract investment to bring more jobs to the Philippines, and not make countries choose between economic growth and environmental degradation,” State Department Undersecretary for Economic Growth, Energy, and Environment Jose W. Fernandez said at a virtual news briefing.

“We had long discussions on critical minerals with the Philippines, (which) after Indonesia has the largest reserves of nickel in the world,” he said.

He said the US is interested in partnering to set up projects that would boost the Philippines’ processing of cobalt and copper.

High energy costs are keeping miners and semiconductor companies from investing in the Philippines, Mr. Fernandez said.

“This is an opportunity to take a vulnerability and make it… an opportunity… turn it into an advantage (considering) that the Philippines has ample wind, and obviously has ample sun,” the US official said.

“It’s something that I know is already on the minds of the government to try and promote and incentivize offshore wind in the Philippines,” he said.

The Philippines has potential offshore wind resources of 178 gigawatts, with large parts of the coast windy enough to power turbines, the Board of Investments (BoI) has said.

On Dec. 21, the BoI issued a certificate of endorsement to Ivisan Windkraft Corp. for its 450-megawatt Frontera Bay Wind Power Project off Cavite, which is poised to become the Philippines’ first offshore wind project.

The project is expected to help the government achieve its target of producing 15.3 gigawatts of clean energy by 2030 under the Philippine Development Plan.

The government is aiming to raise renewable energy’s (RE) contribution to the energy mix to 35% by 2030 and to 50% by 2040. RE currently accounts for 22% of the energy mix.
As of October, the DoE has awarded at least 1,300 RE contracts with total potential capacity of 130,880.8 megawatts.

Mr. Fernandez on Tuesday met with Energy Secretary Raphael M. Lotilla and discussed possible US-Philippine cooperation in renewable energy and civil nuclear energy.

He also met with Finance Secretary Ralph G. Recto to discuss US-Philippine tie-ups in critical minerals, semiconductors and energy security.

In November, the State Department said it will collaborate with the Philippines in exploring the expansion of the semiconductor industry in the context of the CHIPS Act of 2022, a US law that seeks to build US capability in developing and manufacturing semiconductors. — John Victor D. Ordoñez

DTI banking on investment from companies fleeing China

February 1, 2024 | 10:37 pm

By Justine Irish D. Tabile, Reporter

THE Department of Trade and Industry (DTI) said it is counting on capturing a share of investment from companies exiting China, including those from Taiwan, Japan and South Korea.

Trade Secretary Alfredo E. Pascual said at the Italian Chamber of Commerce in the Philippines Business Luncheon on Thursday that slower growth in China is making investors take a long look at Philippines.

“Previously, some countries in Southeast Asia benefited from China’s strong growth. This has driven investment in these countries, particularly Vietnam, due to its proximity to China,” Mr. Pascual said.

“But, in the current context, where there is slower China growth and a geopolitical situation that has encouraged re-shoring, friend-shoring, or de-risking, companies from Taiwan, Japan, and South Korea are (on the move),” he said.

He said that the Philippines’ market access to Southeast Asia and US markets will be the driver, citing favorable geography as a distinct advantage.

“Given its strategic location in Asia, the Philippines could be a platform for companies to access the 690 million-strong Southeast Asian consumer market,” he said.

“Our proximity to these growing economies can allow it to enter (more) supply chains and be part of inter-country economic systems,” he added.

The economy grew 5.6% last year, though it missed the 6-7% target for the year. Mr. Pascual said that growth still outpaced that of China (5.2%), Vietnam (5%), and Malaysia (3.8%).

“While the Philippine economy performed well despite geopolitical challenges in 2023, we are rallying for an even better outcome this year,” he said.

Mr. Pascual said growth in 2024 will also be driven by private consumption with inflation easing, oil prices falling, and demand rising for Philippine exports as bottlenecks ease.

“Meanwhile, a broad-based expansion in all major sectors of the economy led by services and industry is expected to drive growth on the supply side,” he said.

PEZA approves P2.21B worth of investments in Jan.

February 1, 2024 | 10:34 pm

THE Philippine Economic Zone Authority (PEZA) said it approved 12 projects worth P2.21-billion investments in January.

“We are proud to have closed more than P2 billion worth of investments in the first month for 2024 and confident of securing more investment already in PEZA’s pipeline and awaiting approval in the coming months,” PEZA Director General Tereso O. Panga said in a statement.

PEZA said that the investments were approved during the investment promotion agency’s first board meeting at the Baguio City Economic Zone (BCEZ) between Jan. 25 and 27.

Of the 12 new and expansion projects, PEZA said seven are export enterprises, four are information technology (IT) enterprises, and one is a facilities business.

The approved investments are expected to generate $69.62 million worth of exports and generate 1,337 direct jobs.

PEZA said the projects are expected to be built in the Cavite Economic Zone, Cavite Technopark–Special Economic Zone (SEZ), Laguna Technopark, Lima Technology Center–SEZ, Carmelray Industrial Park II–SEZ, Laguna Technopark Annex–SEZ, and First Philippine Industrial Park.

They will also locate in Giga Tower Bridgetowne IT Park in Quezon City, Southwoods Mall in Laguna City, Panorama Tower in Bonifacio Global City, and Jazz IT Center in Makati City.
PEZA has a target of P202 billion in investment approvals this year, which would represent a 15% increase on the P175.71 billion worth of investments approved in 2023.

Mr. Panga said the stretch target is P250 billion, close to its peak results of P250 billion to P300 billion.

He described the January approvals as “good enough, because we just came back from an investment mission. We hope to increase it further at the next board meeting.”

“There are new ones coming in and I think you will be surprised because we will be accepting more big-ticket projects,” he added.

PEZA attended this year’s Consumer Electronics Show (CES) in Las Vegas in a bid to attract more investment from the US. Some of its prospects are involved in electric vehicles, healthcare, cloud data centers, smart devices, robotics, defense and aerospace, garments, and other export manufacturing industries.

“The companies are in different stages of the investment cycle, so some would still be very fluid, but trust that PEZA always follows through with our leads,” he said.

At last year’s CES, PEZA was able to generate P1.4 billion in investment pledges. The US was the third-largest source of locator investments of PEZA last year, accounting for 14.82% of the total. — Justine Irish D. Tabile

PHL-Vietnam rice deal seen as hedge vs. weak domestic production

February 1, 2024 | 10:31 pm

By Adrian H. Halili, Reporter

THE government’s five-year rice deal with Vietnam is expected to serve as insurance in the event production continues to fail to keep up with demand growth, analysts said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the import deal may be a hedge in case domestic rice production remains inadequate to meet the country’s needs.

“Demand for rice is relatively inelastic as a basic necessity for many Filipinos, though any easing of local rice prices or at least tempered rice price increases will still support demand,” Mr. Ricafort said in a Viber message.

In 2023, palay or unmilled rice production rose 1.5% to 20.06 million metric tons (MT). This translates to about 13.2 million MT of milled rice. The Department of Agriculture (DA) also has a 20 million MT palay target for 2024.

“The rice import deal will help address the gap between rice production and consumption,” he added.

The Philippine’s rice consumption was estimated at 13.5 million MT in 2023, according to the DA.

“Having an agreement with Vietnam will help assuage importers of their continued access to Vietnam rice despite the current tightness in global supplies,” according to Raul Q. Montemayor, national manager of the Federation of Free Farmers, in a Viber message.
The Philippines imported 3.6 million MT of rice in 2023, with Vietnam supplying 2.98 million MT, according to Bureau of Plant Industry.

On Tuesday, the Philippines and Vietnam signed a five-year supply agreement. The signatories were Agriculture Secretary Francisco Tiu Laurel, Jr. and Vietnamese Agriculture Minister Le Minh Hoan.

Vietnam agreed to supply 1.5 million to 2 million MT of white rice to Philippine through its private sector at “competitive and affordable prices.” About 40% of Vietnam’s rice exports are to the Philippines.

“Vietnam has been the largest supplier of rice to the Philippines. An agreement to assure the Philippines of regular access to rice over a five-year horizon reduces uncertainty and speculative activity in the rice market,” Monetary Board (MB) member Bruce J. Tolentino said in a Viber message.

Mr. Montemayor added that “the impact of this agreement on local prices will depend on how much will be the landed cost of Vietnam rice, and what measures the government will take so that any reduction in import prices is reflected in retail prices and not merely pocketed by importers and traders.”

The government recently extended lowered tariffs on rice via Executive Order No. 50. Rates for rice imports were kept at 35% regardless of the minimum access volume and country of origin.

On the other hand, Ateneo de Manila economics professor Leonardo A. Lanzona said that the Philippines may be forced to pay more for rice when the Vietnam price spikes.

“Costs are likely to be the same as not having the agreement. But if prices become higher in Vietnam, then we will forced to pay the Vietnam price because of this commitment,” Mr. Lanzona said via messenger chat.

Imported rice prices in Philippine markets range from P50-P55 per kilogram for well-milled rice. Premium rice sells for P54-P62, and special rice P57-P65, according to DA price monitors as of Feb. 1.

For 2024, the US Department of Agriculture has projected that Philippines will remain the world’s top importer of rice, with shipments hitting 3.8 million MT.

Closed fishing season ends in Northern Palawan

February 1, 2024 | 10:29 pm

THE Bureau of Fisheries and Aquatic Resources (BFAR) said on Thursday fishing for round scad or galunggong can resume in Northern Palawan by the end of the closed fishing season.

“Commercial fishers may resume their operations within the conservation area to the northeast of Palawan, following the three-month ban on catching galunggong,” BFAR said in a statement.

BFAR has said it is anticipating increased supply of round scad with the resumption of fishing in Palawan, a major fishery servicing demand in Luzon.

Closed fishing season ran between Nov. 1 and Jan. 31. Sardine fishing was also banned in Northern Palawan during the period.

The closed fishing season is a conservation measure aimed at protecting fish during spawning, allowing fish stocks to regenerate.

Closed fishing seasons were also imposed in the waters off Ilocos, Negros Occidental, Capiz, and Cebu during the fourth quarter.

The fisheries sector reported a 5.2% decline in production in the fourth quarter. For 2023, fisheries production fell 6.5%, according to the Philippine Statistics Authority on Tuesday.
Galunggong production rose 0.2% in the fourth quarter. — Adrian H. Halili

ADB Asia-Pacific climate financing hits $9.8B in 2023

February 1, 2024 | 10:28 pm

THE Asian Development Bank (ADB) said it committed close to $10 billion in climate finance to developing member countries in the Asia and the Pacific last year, up 46% from a year earlier.

“Climate change threatens the future of all development. 2023 was the hottest year on record and saw a swath of extreme, deadly climate impacts in our region,” ADB President Masatsugu Asakawa said in a statement.

“As the climate bank for Asia and the Pacific, ADB is deeply committed to helping our developing members de-fossilize their economies, progress along their climate transition pathways, and achieve their net-zero goals. We must act together, with urgency and at scale,” he added.

The bank’s commitment to climate finance to the region included $5.5 billion for mitigation and $4.3 billion for adaptation financing.

“The bank’s climate adaptation finance commitments in 2023 mean that ADB has provided more than $10.4 billion in cumulative adaptation financing from 2019 to 2023 — surpassing its target of $9 billion in 2019–2024 a year early,” the bank said.

The ADB said that adaptation financing will be crucial for the region as it is more likely to experience extreme weather events such as droughts, heavy rains, and intense heat.

“Asia and the Pacific originates more than half of global carbon dioxide emissions while also being acutely vulnerable to the impacts of climate change,” it said.

“The region needs to invest an estimated $3.1 trillion per year in energy and transport assets alone to meet net zero by 2050 — around 50% more than current levels,” it added.

The ADB has said it is targeting to deliver $100 billion in climate financing to its developing member countries by 2030.

Part of its commitments last year include the $1-billion loan for the Davao Public Transport Modernization Project.

The project aims to modernize the public transportation system of Davao City through the procurement of about 1,100 electric buses. The fleet is expected to cut 60% of annual greenhouse gas emissions from public transport in the city.

In December, the ADB announced it will allocate $10 billion in climate finance for the Philippines between 2024 and 2029.

In 2022, the ADB was the Philippines’ top provider of active official development assistance, accounting for 33.47% of the total or $10.85 billion. — Luisa Maria Jacinta C. Jocson

IPOPHL says sellers of counterfeit goods undermine investment-attraction efforts

February 1, 2024 | 10:26 pm

THE Intellectual Property Office of the Philippines (IPOPHL) said sellers of counterfeit goods are undermining efforts to attract investment to the Philippines.

In a statement, issued on Thursday after a shopping center in San Juan City was listed as a “notorious” market for counterfeits by the Office of the US Trade Representative (USTR), IPOPHL said counterfeiting is a “crime that harms the reputation of legitimate businesses, dampens investor trust and evades taxes.”

“IPOPHL urges all sellers to uphold legitimate trade and support the sale of locally made products to create a safe intellectual property (IP)-driven economy where businesses can flourish,” it added.

Greenhills Shopping Center was on USTR list of Notorious Markets for Counterfeiting and Piracy in 2023.

The list also includes China’s Silk Market, India’s Heera Panna indoor market, and Thailand’s MBK Center.

Meanwhile, IPOPHL said it is working with the National Committee on Intellectual Property Rights (NCIPR) to eliminate stores selling counterfeit and other IP-infringing goods in Greenhills through the Overhaul Greenhills project.

“We will continue to work with rights holders, the San Juan local government and the Greenhills management on seizures, issuance of warning letters and updates on the development of the shopping center into a high-end mall,” the IPOPHL said.

“As the lone Philippine market in the watch list, Greenhills remains a priority in IPOPHL and NCIPR’s mission to clear the markets of counterfeit and other intellectual property (IP) infringing goods,” it added. — Justine Irish D. Tabile

SSS provident fund contributions nearing P80B

February 1, 2024 | 10:24 pm

CONTRIBUTIONS generated by the Social Security System’s (SSS) Workers’ Investment and Savings Program (WISP) amounted to P79.51 billion at the end of December, the Department of Finance (DoF) said.

The contributions were sourced from 6.02 million members, the DoF added.

WISP is targeted at private-sector employees, self-employed individuals, overseas workers, and voluntary members who are actively contributing to the regular SSS program. They must also have a monthly salary credit exceeding P20,000.

“Established in January 2021 as part of Republic Act No. 11199, WISP is a mandatory provident fund scheme that serves as savings builder for private-sector workers and other individuals who are paying members of the SSS,” the DoF said.

“This safe, convenient, and tax-free individual retirement savings plan allows members to invest and earn returns from their contributions,” it added.

WISP members contribute alongside their regular SSS payments. They are also entitled to disability and death benefits and a retirement fund, apart from their benefits under the regular SSS program.

Contributions to WISP Plus, a voluntary retirement savings program launched in December 2022, hit P391.63 million from around 30,536 members.

WISP Plus is offered only to SSS members and serves as an “additional layer of support apart from regular retirement benefits.”

As of November, the WISP and WISP Plus investment portfolios were valued at P76.34 billion and P1.41 billion, respectively. Annualized returns on investment for WISP and WISP Plus were reported at 5.33% and 6.87%, respectively. — Luisa Maria Jacinta C. Jocson

Tourist arrivals projected at 8.21 million in 2024 by BMI

February 1, 2024 | 10:23 pm

FITCH SOLUTIONS unit BMI Research said Philippine tourist arrivals are expected to return to pre-pandemic levels this year after a strong 2023 performance.

In a commentary, BMI said that it projects tourist arrivals at 8.21 million this year, outperforming 2023 and 2019, the last full year before the pandemic.

“The country’s continued recovery from the negative impact of the coronavirus pandemic will be driven by increasing arrivals from key source markets in Asia, Europe and North America, primarily the US,” it added.

The research firm said growth will primarily be driven by visitors from South Korea, China, the US, Japan, and Australia.

“We forecast arrivals to continue to increase over the remainder of our 2024-2028 forecast, reaching a projected 9.5 million arrivals in 2028,” it added.

BMI said that despite the projected average annual growth rate of 15.8% from 2024 to 2028 in tourist arrivals, the country faces short term risks, particularly inflation.

“We note that there are short term risks to our outlook for the Philippines arrivals stemming from heightened consumer inflation in the Philippine’s key source markets,” it said.

“We expect inflationary pressures to ease over 2024, but consumers will remain price sensitive in the short term, and this is likely to be reflected in increased travel to domestic and short-haul destinations, trading down from long-haul international destinations, which have a higher price point,” it added.

However, BMI said that it remains bullish as the country remains a relatively affordable destination and is likely to benefit from strong regional arrivals.

The Department of Tourism reported tourist arrivals for 2023 of 5 million, which represents 61.1% of pre-pandemic levels of 8.19 million.

BMI said that this was slightly higher than its expectations for 2023, which was 4.9 million arrivals. — Justine Irish D. Tabile