6.5-7% 2010 growth ‘possible’

Written by Mia M. Gonzalez / Reporter

Tuesday, 20 July 2010 21:28

FOLLOWING the government’s decision to raise the deficit ceiling, the economy may grow by as much as 6.5 percent to 7 percent this year provided that inflation remains low, National Economic and Development Authority (Neda) Deputy Director General Augusto Santos said on Tuesday. Santos told reporters after the Cabinet meeting that with the economic managers’ decision to increase this year’s deficit ceiling from P300 billion to P325 billion to channel more funds to infrastructure and social services, “there is a greater chance of having more economic growth.” Meanwhile, the International Monetary Fund, having earlier recalibrated this year’s growth in terms of the gross domestic product to 6 percent from 3.5 percent, similarly recast growth next year to a higher rate averaging 4.5 percent, from 4 percent. “Higher growth is very possible. It can be achieved,” IMF head of mission Vivek Arora said in a briefing Tuesday at the central bank complex. Santos for his part said the Neda is “optimistic” the government can meet its 5 percent to 6 percent projected GDP growth target for 2010. Asked what would be the range if the GDP target were upgraded, Santos said: “It can be in the range of. . . 6.5 percent to 7 percent because of spending.” He said the government “has elbow- room for spending because inflation has been benign and so, therefore, I myself think that we should continue with this accommodative fiscal and monetary policies.” “The central bank has decided to keep interest rates as is. For fiscal spending, the budget by itself speaks for itself,” Santos added. He said the government could afford to keep its accommodative stance for as long as inflation remains low. “My prescription to that is the moment we see even a small uptick in inflation, then that is an indication that we should start reining in loose fiscal and monetary policies. That will be my own indicator. The moment I see a slight uptick in inflation, then that’s the signal,” Santos said. Budget Secretary Florencio Abad said the budget deficit in the first six months of the year is “likely” to breach P178.5 billion—the projected first-semester deficit as estimated by then-Finance Secretary Margarito Teves. Abad said the possibly higher-than-projected first semester deficit, which may be officially announced on Wednesday, is due to increased spending and expenditures that ran up to “the billions” toward the end of the previous administration. “There were still surprises in the expenses, expenditures made up to the last month, up to the end of June, June 30. Like in congressional initiatives, for example,” he said. When asked, Abad said the government will “most likely” consider more borrowings if it does not meet its collection targets. “Well, if the collection targets are not achieved, that is the most likely step that we have to take and I think Finance Secretary [Cesar] Purisima is looking at that,” he said. Purisima said borrowings would always have foreign and local components, and the mix would depend on what’s the most advantageous for the government. “We have to be opportunistic about all of these things so that we can get our debt at the cheapest cost [possible]. We will announce at the right time,” he said. Asked whether the current economic numbers, particularly the deficit, are a cause of concern for the economic managers, Purisima said: “No. We’re looking forward. We believe that what’s past is past, and we cannot do anything about it. So what’s important for us is what we will do in the next six months, which we have declared, and what we will do in the next six years. I think that’s what’s important.”

Underwater hotel on SMP list

Written by Miguel R. Camus / Reporter

Thursday, 05 August 2010 20:51

SAN Miguel Properties Inc. (SMP), the real-estate subsidiary of conglomerate San Miguel Corp. (SMC), plans to launch as many as four new developments, including the country’s first “underwater hotel,” next year as part of its foray into the tourism segment, a top official said on Thursday. SMP real-estate development head Alan Cruz said projects on the drawing board include a “spiritual” hub in a 125-hectare property in Alfonso, Cavite; a 28-hectare mixed-use beachfront development on Boracay Island; and a midrise condominium cluster in a 2.8-hectare property along Outlook Drive in Baguio City. He said the fourth project is an ambitious underwater hotel off Busuanga Island near Coron Island in Northern Palawan. “All the four projects would happen next year in terms of the implementation. The planning stages should happen within this year,” Cruz told the BusinessMirror on Thursday, without citing financial figures. “We are going to entertain the experts in the industry, in terms of operating a hotel or maybe a country club. That is applicable for Boracay and, to a certain extent, in the Cavite project,” he added. The move is part of a broader strategy to create “synergies” with the parent company’s infrastructure-related projects. These include Caticlan Airport, the nearest air gateway to Boracay Island, and the 88.5-kilometer Tarlac-Pangasinan-La Union Expressway, which will cut travel time from Manila to Baguio by half. SMP already “rebranded and relaunched” itself during the recently concluded Philippine Real Estate Fair last week in a bid to become a major property developer in the next five years. SMP plans to launch its Cavite project first, from which a 33-hectare parcel of land was donated to the healing ministry of Companions of the Cross priest Fernando Suarez. The property may house venues for weddings, baptisms, retreat houses, as well as a 100-meter-tall statue of the Virgin Mary. To support the spiritual component, SMP is looking to build residential and commercial projects, as well as hotels. SMP earlier said it is spending P6 billion to develop a high-rise residential project in Makati City and an American-inspired gated community in General Trias, Cavite. In a previous interview, SMP finance and administration head Gil Somblingo said the companyis eyeing P1 billion in sales this year. Existing projects of the firm include Maravilla, Bel Aldea in General Trias, The Legacy in Las Piñas City and Buenavista Homes in Cebu. SMP recently sold its 31-percent stake in Bank of Commerce to the SMC Retirement Plan for an undisclosed amount. The transaction brought the retirement fund’s ownership in the commercial bank to 51.1 percent. In Photo: Willy Arcilla, San Miguel Properties consultant, discusses the company’s proposed projects at the San Miguel Corp. Building in Ortigas Center on Thursday. (Nonoy Lacza)

Construction boom likely to hit RP within the decade

Economy

Written by Cai U. Ordinario / Reporter

Monday, 19 July 2010 20:52

THE Philippines is likely to experience a construction boom within the decade because of the urgent need to address the country’s infrastructure constraints, according to an economist from the University of Asia and the Pacific (UA&P). Dr. Victor Abola, executive director of the First Metro Investment Corp (FMIC)-UA&P Capital Markets Research, said the boom will more likely be due to the housing deficit of more than 3 million units. Abola said the current production of housing units is only 250,000 every year. This is also why a real-estate bubble was not possible in the Philippines. A bubble may only occur in high-end luxury developments but not in mid- or low-income market projects, he said. “We will have a construction boom in this decade because of two things—infrastructure and housing boom. How can we have a bubble in housing when we have a shortage of more than 3 million units? Ang production natin is only 250,000 a year,” he said. “People who talk about a bubble are looking most probably in the higher-priced luxury apartments. There, there could be a bubble kasi people buy it, many of them for investment purposes. But if you are buying for your own self, its not, you’re not buying for investments but for your own use,” Abola explained. Manolito Madrasto, executive director of the Philippine Constructors Association (PCA) said the construction industry expects better prospects this year. He said the PCA is looking at a growth forecast of 7 percent to 9 percent. This is only a conservative estimate, he said, however, and the industry could still reach a double-digit growth, depending on the demand for real estate and infrastructure projects which will provide a boost to the sector. “In the PCA, we are trying to be as conservative as possible. We don’t want to raise the hopes too high,” Madrasto said. The latest data from the National Statistics Office (NSO) showed that the total value of construction during the first quarter of 2010 rose 59.5 percent to P47.3 billion from P29.7 billion recorded during the same quarter of 2009. The NSO said that the value of residential-building construction had an increase of 24.6 percent amounting to P21.3 billion from P17.1 billion during the same quarter of 2009. The value of nonresidential building construction posted a growth of 130.5 percent amounting to P22.3 billion from P9.7 billion registered during the same quarter of 2009. The combined value for additions, alterations and repairs, the NSO said, reached around P3.7 billion or a 27.4-percent increase from P2.9 billion registered during the same period of 2009. The NSO said the value of construction for the National Capital Region (NCR) had remained highest at P23.4 billion, accounting for 49.4-percent share of the total value. Construction value in Calabarzon (Region IVA) and Central Luzon (Region III) ranked a far second and third with shares of 16.5 percent with P7.8 billion and 7.8 percent with P3.7 billion, respectively. In Photo: A construction worker balances himself precariously atop a building being constructed in Manila. An economist has predicted a construction boom in the country because of an acute housing deficit. (Bloomberg News)

Philippines to host first-ever conference on independent and small-hotel owners

Economy

Written by VG Cabuag / Reporter

Tuesday, 20 July 2010 20:43

THE Philippines will play host in August to a first-of-its-kind hotel conference in the country, which aims to make independent hotel operators and owners more competitive and thus sustain their business. “The meeting aims to clear up perceptions and misconceptions among small-hotel operators and thus help them compete with the bigger ones, such as the Peninsula Group and the Accor, to name just two,” said Merril Yu, chief executive officer of Y&S 1847, a hotel investment and development company, one of the organizers of the event. He said that in Boracay, for instance, there was no big hotel there until the Shangri-La group put up one to cater to the higher end of the market there. Yu said there were still many places in the country where independent hotel operators could thrive, such as Tagaytay, Bohol, Dipolog, Cagayan de Oro, Dumaguete and Tacloban. “There are not too many hotels in Davao, and we need more of this kind of development,” he said. He also said the boom in hotel business will be mainly driven by air travel and growth in the food business and that this was now happening in nonfamiliar destinations in the country. The growth in air travel was mainly brought about by the expansions of Cebu Pacific and Philippine Airlines, which, together, flew a total of 14 million domestic travelers last year. The growth of international and domestic tourism contributed $12 billion to the global economy, according to the World Travel and Tourism Council. The trend, which is expected to continue over the next years, will increase the demand for investments in more facilities and accommodations. “With our rich heritage and scenic natural attractions, the Philippines will be an ideal investment location for foreigners and locals. There are many diamonds in the rough just waiting to be discovered,” said Adolf Aran Jr., president of Food and Hospitality Events Specialist Inc. (F&H), which is also among the organizers of the event. F&H and Y&S 1847 have assembled the world’s top hotel chief executives and industry experts to kick off the August 20 event, which will be called First Philippine Hotel Investment Conference. It will be held at the SMX Convention Center. Among the high-profile and internationally known panelists are Serena Lim of Starwood Hotels, Thomas Monahan and Aiyi Lim of Wyndham Hotel Group, Jose Mari del Rosario of Microtel Hotel and Resorts (Philippines), Al Legazpi of Ayala Hotels Inc., Arthur Gindap of Ascott International, among others. “We will have the great honor of playing hosts to most, if not all, of the movers and shakers of the hotel industry who will share their invaluable knowledge and experience with the participants of the first Philippine Hotel Investment Conference. All eyes will be on our country and the wealth of business opportunities the conference can offer,” Yu said. In Photo: Meril Yu (center), CEO of Y&S1847, a hotel investment and development company, gestures as he fields questions during a press conference to discuss the holding of the 1st Philippine Hotel Investment Conference on August 20 at the SMX Convention Center, Mall of Asia in Pasay City. He is flanked by Patrick Lawrence Tan (left), CEO of F&H Events Specialist Inc., and Adolf Aran Jr., president of F&H Events Specialist Inc. (Roy Domingo)

New PPA general manager to privatize more government ports

Economy

Written by VG Cabuag / Reporter

Tuesday, 20 July 2010 20:47

IF the new chief of the Philippine Ports Authority (PPA) will have his way, some of the country’s big ports will be privatized shortly. The first targets will include the Iloilo Commercial Port Complex, those in Ozamiz, Zamboanga and General Santos, as well as the roll-on, roll-off ports belonging to the Strong Republic Nautical Highway. The PPA owns and controls more than a hundred ports all over the country. At the same time, however, PPA General Manager Juan C. Sta. Ana said he would continue to improve the operations of profitable government ports. “We subscribe to the basic notion that the private sector is the engine of growth. For this reason, we should continue to encourage more private-sector participation in the management, operation and development of ports,” Sta. Ana said. Over the past years, the PPA was only able to privatize a handful of ports. The most recent was the Batangas Port, which has been idle for two years before its takeover by Asian Terminals Inc. (ATI), and the Manila North Harbor. Some of the port holdings privatized included the Manila International Container Terminal operated by the International Container Terminal Services Inc. and the Manila South Harbor of ATI. The PPA, one of the most profitable of the government-owned and -controlled corporations, was able to devolve some of the local ports to municipal governments the last few years. Sta. Ana said while he will continue to study what ports must be bidded out to the private sector as soon as possible, it is most likely that the bigger ports will be the first to go. Before joining the PPA, Sta. Ana was senior vice president of F.F. Cruz & Co., and vice president of several F.F. Cruz subsidiaries such as Freysinet Filipinas Corp. and F.F. Marine Corp. FF Cruz is one of the top contractors of the PPA, but Sta. Ana promised to have a level playing field and said he will not favor the company over the other contractors. Meanwhile, Emerson Lorenzo was appointed administrator of the Maritime Industry Authority (Marina) on Tuesday. He served briefly as Marina officer in charge after former Administrator Angelo Verdan’s term ended when President Arroyo stepped down from office on June 30. Lorenzo, a career officer of the Marina, served the agency for more than three decades. He is former head of the agency’s Maritime Safety Office which has since been renamed Shipyard Regulations Office.