Battle over Cagayan de Oro airport: US base or new city center?

NEW CITY CENTER. Engineer Isidro Borja (left), Cagayan de Oro’s top planning and development officer; and Eileen San Juan, the city’s chief for Local Economics, Investment Promotion, discuss the planned Cagayan de Oro city expansion. Photo by Bobby Lagsa/Rappler.

CAGAYAN DE ORO CITY, Philippines – Is there a looming battle over the use of the old Lumbia airport?

The national government is not the only one eyeing the old airport, reportedly for use by the US military under the Enhanced Defense Cooperation Agreement (EDCA). The Cagayan de Oro city government has also expressed interest in developing 106 hectares of prime airport property in Barangay Lumbia.

The city’s top urban planners, with the help of the United Architects of the Philippines, created the Planned City Expansion (PCE) in Barangay Lumbia, an expansive uptown village deemed suitable for expansion as it is not prone to flooding and has potential as the new city center.

Cagayan de Oro Mayor Oscar Moreno said the PCE was conceptualized under the United Nation Habitat’s Achieving Sustainable Urban Development (ASUD) project with the assistance of Arcadis, a global design, engineering, and management consulting company.

The PCE covers 820 hectares of land including the Lumbia airport which is now under the control of the Philippine Air Force’s 10thTactical Operations Group, though the land is owned by the Department of Transportation and Communications (DOTC).

New growth area

Moreno said that the prime land, which is 180 meters above sea level, is a strategic area since future expansions under the Mindanao Logistics Infrastructure network (MLIN) pass through or near lumbia.

The MLIN is a long-term development plan for the road network in Mindanao. It includes new construction, and the upgrade and improvement of existing national roads and local roads.

All agencies, including the Department of Public Works and Highways, should use the MLIN plan as a guide for their own long and medium term development plans in the area covered by the plan.

EXTENSION. The conceptual plan of the planned Cagayan de Oro city extension. Map courtesy of the CDO government

The MLIN is intended to be used as a reference for agencies involved in the development of the Mindanao transport network.

A new national road is being constructed that will connect Iligan City to Bukidnon.

Engineer Isidro Borja, chief of the City Planning and Development Office, said that the PCE will be the new growth area of the city with its cluster of areas for development.

“It is like a self-contained community where everything is there, without having to go to other places to work or study,” Borja said.

Last year, Christopher Rollo, ASUD country program manager for UN Human Settlement, said that if the expansion of the city is left unplanned and unchecked, it is likely to be driven by real estate market that favors development for the rich.

“In Lumbia, it is where everything can be put in place like public spaces can remain public, road network connected to other districts without being blocked by private ownership of lands,” Rollo said.

Mixed-use modern district

Eileen San Juan, the city’s local economics and investment promotions chief said that she met with defense officials on January 11, 2016, to present the city’s PCE, which includes the Lumbia airport.

Moreno said the PCE was presented to President Benigno Aquino III and Cabinet officials as early as 2013 as part of the city government’s bid to promote the city.

San Juan said that the PCE is an exercise in urban planning which the city badly needed.

Under the PCE, there are 5 proposed clusters – Lumbia airport is under Prime Cluster A where local and national government offices are located.

“We will also replicate ‘Plaza Divisoria,’ which is a unique feature not found in any other city,” San Juan said.

Plaza Divisoria is a strip of 5 parks with statue of national hero Dr Jose Rizal, Andres Bonifacio, president Ramon Magsaysay, and mayor Justiniano Borja who first planned the city’s business district which Divisoria will be part of.

San Juan said the city wants a strategic and sustainable development node, a model for adaptive reuse, providing rural areas easy access to economic opportunities and social services.

“We want an institutional landmark with wide public parks and open space in harmony with medium to high density residential and commercial development which would showcase the city for livability and resilience,” San Juan said.

Borja said the PCE conforms with the approved Comprehensive Land Use Plan (CLUP).

“With the diverse housing market, low, medium, high end suitability for resettlement, this project will answer the housing shortage in the city,” Borja said.

Clusters

San Juan said each cluster under the PCE is designed according to use.

• Cluster A: Institutional and mixed use
• Cluster B: Farmstead/homestead villages
• Cluster C: Medium-density residential with community facilities, health and education, low intensity commercial area with at least 20% social housing with connection to town center and public spaces
• Cluster D: Residential villages in terraced fields, water retention ponds, soil erosion control and tourism activities with ecotourism (biking, trekking, adventure sports), mountain view resort with convention and meetings facilities
• Cluster E: Agri-processing Complex with waste management facility, mixed use Low–medium end housing, commercial, community facilities, value chain-considered efficient access to raw materials and markets

CLUSTERING. Cluster A is where local and national government offices would be located. Courtesy of the Cagayan de Oro city government

Borja said the PCE was designed considering road traffic. “All major roads will be 30 meters wide, while other roads will be at least 10 meters wide, both with provisions for pedestrian and cycling lanes.”

“We wanted the PCE is to be as walkable as possible; we want it to be environmentally and people friendly,” Borja added.

Adjustments

If EDCA enters into the picture and the airport is used by the US military, city officials said they would have to just adjust the design accordingly – but not without first exhausting efforts to convince the national government to favor the PCE.

Moreno said the long-term plan is for the common good.

“It is up to the national government if they’d allow the local government’s initial plan. We need them (national government) to cooperate because basically, the land belongs to to the Civil Aviation Authority and we cannot plan without them involved,” Moreno said.

Moreno added that the city government is taking steps to convince the national government on the expansion, as it is for the common good.

In its plan, residential areas will get 19.72% or 177.62 hectares; commercial area, 2.04% or 18.35 hectares; institutional 4.6% or 42.1 hectares; agro-industrial 2% or 17.87 hectares; mixed-used 15.8% or 142.9 hectares; commercial and transport facilities, 0.91% or 8.19 hectares; roads, 15.96% or 143.76 hectares; public spaces, 38.83% or 349.72 hectares.

“We will be expecting adjustments and needs to revisit the planning and resources needed to achieve our goal of the PCE,” San Juan said. – Rappler.com

Source: Bobby Lagsa/ http://www.rappler.com/nation/120224-battle-lumbia-airport-us-base-cagayan-de-oro-city-center

Affordable financing drives growth

“Housing demand is always determined by housing finance,” said Januario Jesus Gregorio Atencio, III, 8990 Holdings,Inc. president, in defending  developers’ need to have in-house financing for their projects. 

 Earlier, property consultant KMC-MAG expressed concern about the threat posed by developers’  focus on financing when their expertise is in construction. 

“When you build an econometric model for housing, on top of that is finance. The more accessible housing finance is, the more housing (projects) there will be,” said Atencio. 

“Finance is dictated by affordability. If housing finance is stopped, interest rates are high, entry requirements are high say at 20 percent down payment, then demand will be very small,” he added. 

Antton Nordberg, KMC MAG Group Inc.head of research, said apart from finance not being a core competency of developers, there is also no clear picture on the size of the in-house financing market which remains unregulated. 

“Overall, it’s been increasing quite fast,” he said, noting  the Central Bank’s policy to scale back bank’s lending activity may have also contributed to the rise of in-house financing. 

“Why this is a problem (is because) developers’ core expertise is not necessarily in the financing of products but rather in the development. So there might be some serious underestimate(ion) in the credit worthiness of the home buyer since (this is)  more of risk management than project development,” he added. 

Nordberg, however, was quick to point out that the risk is not an immediate threat. Still this could pose a problem should some external shocks arise. 

“It’s not really an issue right now but if there are some external shocks, it might cause some problem,” he said. 

Atencio said while developers should not be bankers, as KMC-MAG, they will undertake initiatives  to move housing forward. 

Atencio said state-housing fund Pag-IBIG had been successful in lowering the cost of housing for buyers through lower interest rate and lower premiums, making housing more affordable,” 

By ALBERT CASTRO/January 28, 2016/ http://www.malaya.com.ph/business-news/special-features/affordable-financing-drives-growth

Affordable housing finance remains a key in propelling the growth of the housing sector. 

Elections to affect real estate activity; oversupply in vertical residential segment

AS THE PHILIPPINES “goes bananas” in an election year—in the year of the monkey at that—property experts see a number of challenges, and likely trends, flavoring and coloring the real estate industry in 2016. Here’s their fearless forecast:

1. There will be an oversupply in the mid-market vertical residential segment.

“I expect 2016 to be the most challenging year for the residential property sector. A looming oversupply in the mid-market vertical residential segment in Metro Manila is developing, and developers should expect a slowdown by as much as 10 percent in the average annual take-up rate of 50,000 units. Several developers are already holding back sales of new projects until supply balances out in 2018,” said Enrique M. Soriano III, Ateneo program director for real estate and senior adviser for Wong+Bernstein Business, in an Inquirer Property interview.

Soriano said that with this oversupply scenario, “we will naturally anticipate vacancy rates to go up in 2016 to double digits in the Makati and Ortigas CBD (central business district) area.”

2. The 2016 presidential elections will affect the market. Soriano said the presidential and national elections “is likewise expected to freeze any major real estate activity in the first two quarters of 2016. Naturally, investor sentiment will be on a wait-and-see attitude. This will not bode well for the property sector and the economy as a whole. Hopefully, after the elections, it will be followed by a possible uptick in transaction levels in the last two quarters of 2016,” said Soriano.

3. Business process outsourcing (BPO) growth continues. BPO companies, according to property portal Lamudi Philippines, will continue to buoy Metro Manila’s commercial real estate.

“Experts do not foresee the supply of office space surpassing demand soon, meaning commercial properties (and offices in particular) remain a beneficial investment for 2016,” said Lamudi

Philippines in a statement.

Soriano said that in 2016, Grade-A office rents in prime areas is expected to increase 5 percent, given strong demand for office space and low vacancy rates. Meanwhile, rents in non-CBD areas may slightly drop by 5 percent due to available supply in Makati and Bonifacio Global City.

4. Metro Manila land values will go up. Lamudi Philippines said that despite slower gross domestic product growth in 2015, land values still continue to appreciate, albeit at a slower pace.

Colliers International said that growth rates of land values in Metro Manila accelerated in the second quarter of 2015. In addition, land values in the Makati CBD, growing at only 0.85 percent during the first three months of the year, rebounded in the next three by growing at a rate of 2 percent. This raised the area’s average price to P452,704 per square meter. Values similarly rose in the business districts of Fort Bonifacio and Ortigas Center, increasing at 1.97 and 2.1 percent, respectively.

5. Retail property market will face a slowdown. Soriano said “the challenging retail environment is likely to persist next year due to diminishing inbound tourist arrivals. We expect prime rents outside of the shopping centers to slide by 10 percent in 2016, while shopping mall spaces are expected to escalate.”

“We can also expect a decline in premium retail market rents due to the expected drop in tourist arrivals as a result of the national elections happening in the first half of 2016. The mass retail market is expected to remain resilient as domestic consumption continue to grow, fueled partly by election spending nationwide,” said Soriano.

Source: by Tessa R. Salazar / http://business.inquirer.net/204872/elections-affect-real-estate-activity-oversupply-vertical-residential-segment

LESSONS LEARNED IN 2015

Property portal Lamudi said  2015 was a good year for Philippine real estate. 

In the first part, we gave a rundown of 12 of the 25 lessons in property development in 2015.

The remaining 13 are as follows:

13.  Forbes Park is the most expensive subdivision in the Philippines
Average monthly rents in the very exclusive Forbes Park—home to business tycoons, foreign dignitaries, and boxing icons—stand at Php402,459, making the enclave the most expensive area to rent a
house anywhere in the Philippines.

15. Filipino-Americans prefer houses
Despite the condo boom happening in Metro Manila and other major cities across the Philippines, it seems that many Filipinos based in the United States still prefer to purchase houses, at least according to
January–June 2015 search data from Lamudi. More than half (57.83 percent) of all searches in the Lamudi website were for houses, followed by condos (16.58 percent). The most searched cities? Quezon
City, Makati, Manila, Tagaytay, and Baguio, in this particular order.

16. Cities affordable for first-time homebuyers
There are cities surrounding Metro Manila abound with affordable options for first-time homebuyers. These cities include San Jose Del Monte, Bulacan, where average home price stands at Php495,999; and followed by San Mateo, Rizal (Php549,259); Dasmariñas, Cavite (Php1.189 million); Imus, Cavite (Php1.858 million); Bacoor, Cavite (Php2.777 million); Antipolo, Rizal (Php3.668 million); Santa Rosa, Laguna (Php4.16 million).

17. Condos close to train stations are more expensive
An average condo located within 100 meters of an MRT station is at least Php16,645 more expensive per square meter than a similar, newly built condo situated more than 500 meters away, according to
listings data from Lamudi.

18. Ayala Center, Century City, and Rockwell Center lead most expensive list
Ayala Center—the commercial core of the Makati CBD—commands the most expensive condo rent per sqm than any area Metro Manila. Living in the area, which is within striking distance of Greenbelt, Glorietta, and most of Makati’s luxury hotels, can set a renter back Php1,144 per sqm per month, meaning a 100-sqm condo here can command monthly rent of more than Php110,000. Following Ayala Center are Century City and Rockwell Center in Makati’s Poblacion area, where condos command monthly rents 
of Php986 and Php973 per sqm, respectively.

19. Pricier condos are not necessarily bigger
On a per-square-meter basis, more expensive condos do not necessarily mean bigger space. Areas where condos are on average bigger are actually cheaper on a per-sqm basis. These areas include Ayala Triangle/Apartment Ridge, where condos average 275 sqm and where monthly rents average Php568 per sqm. This area is followed by Salcedo Village, where the average size of condos is 126 sqm and average monthly rent stands at Php652 per sqm. In contrast, in the Mall of Asia Complex and Newport City, the average sizes of condos are 34 and 50 sqm, but monthly rents average Php850 and Php785 per sqm, respectively.

20. Caloocan will be the second most populous city by 2020
The City of Manila will be overtaken by nearby Caloocan as the Philippines’ second most populous city by 2020. This is according to an analysis by Lamudi using the annual average population growth rate issued by the Philippine Statistics Authority in 2010. Caloocan’s projected 2020 population will be 1.88 million, compared to Manila’s 1.72 million.

21. Eleven PH cities will have populations of more than 1 million by 2025
Using the annual population growth rates recorded in 2010, 11 cities in the Philippines are projected to have populations of more than 1 million. These are Quezon City (3.95 million), Caloocan (2.115 million), Davao City (2.056 million), Manila (1.76 million), Dasmariñas (1.27 million), Antipolo (1.25 million), Zamboanga City (1.25 million), Cebu City (1.14 million), Taguig (1.12 million), Bacoor (1.11 million), and Pasig (1.022 million).

22. Can BPO workers afford condos?
With an average monthly salary of Php22,500, entry-level customer care representatives cannot afford to rent a condo in either of these “affordable” areas: Eastwood City, Pioneer-EDSA, Poblacion (Makati), and San Antonio (Makati), where average rents range from Php19,838 to Php22,563 per month. Using the 30 percent rule (spending not more than 30 percent of one’s monthly income on housing), only those working as managers, with an average compensation of Php75,000 per month, may only afford to rent a condo in these select areas.

23. How long Filipinos should work to buy a home
A salaried Filipino with more than 20 years of work experience and earning Php1.43 million per year may need 128 years’ worth of his salary in order to afford a house in Makati where average home price stands at Php184 million. In contrast, this same person needs 4.16 months’ worth of his annual salary in order to afford a home in San Jose Del Monte, Bulacan, where the average home price is Php495,999.

24. Are Filipinos buying or renting?
Based on its third quarter 2015 search data, Lamudi found that there is an almost equal proportion of renters and buyers among 18- to 24-year-old online property-hunters (50.2 percent for rent versus 49.8 percent for sale). Quite interestingly, there is a tendency for property-hunters to check out for-sale properties online as they get older. Among 25- to 34-year-old users, 57.3 percent are checking out for-sale properties. In the 35–44, 45–54, and 55–64 age groups, it is even higher; 70.8, 72.6, and 71.1 percent of the website’s users, respectively, are checking out for-sale properties.

25. Most sought-after locations for land
Quezon City, Tagaytay, and Baguio are the top three most popular locations among property-hunters looking for land online. These cities are followed by Davao and Antipolo. “Clearly there are cities preferred by people researching about land for sale online, and we hope these findings will give real estate developers insight into how to properly plan their next projects,” said Lamudi. In addition, the fact that only five Metro Manila cities were in the top 10 indicate that Filipinos are not too keen into buying residential land within the National Capital Region, either due to lack of supply, unaffordability, or both.

Source: http://www.malaya.com.ph/business-news/special-features/lessons-learned-2015

No real estate bubble – BSP

MANILA, Philippines - Initial results of stress tests conducted by banks validated the assessment made by the Bangko Sentral ng Pilipinas (BSP) that there are no risks from the real estate market.

BSP Deputy Governor Diwa Guinigundo said initial results of the real estate stress tests conducted by banks showed the capital adequacy ratio (CAR) of banks would remain above the central bank requirement even if 25 percent of their real estate loan portfolio turns sour.

“At this point we don’t see any signs of stress in the real estate sector,” Guinigundo said.

The central bank has asked banks to submit data on their real estate portfolio to include exposure in socialized housing as well as debt incurred through the issuance of bonds to finance real estate activities.

“We now have a more comprehensive definition of the exposure to real estate. It’s more dependable,” he said.

Based on the new definition of the exposure of banks to real estate, Guinigundo said stress tests conducted by big banks showed that their CAR would still be above the 10 percent requirement set by the BSP and the eight percent threshold set under the Bank for International Standards (BIS).

“Even if they factored in a 25 percent souring of the loans on real estate, they are still above the 10 percent regulatory capital that we imposed on the banks,” Guinigundo said.

Aside from the BIS methodology, he said the BSP also used the International Monetary Fund (IMF) identification of asset bubbles.

“Those two tests will show that we are far from the so-called danger level,” he added.

The CAR of big banks stood at 15.48 percent on a solo basis and 16.42 percent on a consolidated basis as of end-June last year reflecting their continuous efforts to maintain adequate capital buffer against unexpected losses that may arise during times of stress.

The BSP stepped up its watch over the real estate sector as early as 2012 by ordering banks to disclose more comprehensive reports on their exposures to property industry.

The pre-emptive macroprudential policy measure approved by the BSP required stress tests for banks to determine if their capital will be enough to absorb credit risk that may arise from their exposure to the property sector.

Banks’ exposure to real estate jumped 21.8 percent to P861.22 billion in end-November from P708.88 billion in end-September last year. The sector accounted for 17.5 percent of banks’ total loan portfolio of P4.91 trillion as of end-November.

The BSP has set the cap on real estate loans at 20 percent of the bank’s total loan portfolio.

Guinigundo added that real estate developers are now more prudent after learning their lessons during the Asian financial crisis in 1997.

“We can also say that we are in touch with various real estate developers, the bigger ones, and it is very comforting to know that our developers have become more prudent, more discreet with respect to their expansion plans,” he said.

Source: By Lawrence Agcaoili (The Philippine Star) / http://www.philstar.com/business/2016/01/12/1541553/no-real-estate-bubble-bsp?nomobile=1

Philippine year in review 2015

Strong domestic demand and increased government spending helped sustain high levels of economic expansion in the Philippines throughout 2015, though a slight slowdown was observed late in the year as demand from the country’s main trading partners eased.

While yearend data have yet to be released, estimates from the Asian Development Bank (ADB) in December project gross domestic product (GDP) growth of 5.9% — short of the 6.4% forecast earlier in the year — as a result of declining merchandise exports, which fell by 6.9% year on year in the first three quarters to $43.7 billion.

Despite the modest slowdown, the Philippine government remains confident that end-of-year spending will help boost GDP growth to 6%-6.5% by the close of 2015.

The months ahead are expected to usher in strong economic expansion, with the ADB projecting growth of more than 6% in 2016 as the government continues to increase public spending. Higher demand from India and other Southeast Asian economies is expected to offset the effects of this year’s weaker exports.

INFLATION SUBDUED, EMPLOYMENT UP
While still modest, inflation gained pace late in the year, rising to 1.1% in November, up from 0.4% in October. However, rates remain within the Central Bank of the Philippines’ target band of 0.4% to 1.2%, and well below the 3.7% registered in November 2014.

According to the National Economic and Development Authority, inflation is being driven by rising food and non-food prices stemming from higher local demand and the lingering effects of typhoon Lando, which struck the country’s shores in October.

Core inflation — which excludes energy and unprocessed food costs — edged up in the last quarter of 2015, reaching 1.8% in November, its highest level since July, but still below the 2% target set by monetary authorities.

In a research note issued in early December, Barclays predicted inflation would rise to 2.4% in 2016, due in part to a modest anticipated increase in fuel costs and the potential impact of the El Niño weather pattern on agricultural prices.

Nonetheless, the ongoing strength of the economy helped stem unemployment in 2015, with figures released by the Philippine Statistics Authority in early December reflecting a 5.6% unemployment rate as of October, down from 6.5% in July 2015.

POSITIVE RATINGS OUTLOOK
The steady growth and stability of the economy prompted ratings agency Fitch to revise its outlook for the country from stable to positive in late September. The agency also affirmed the Philippines’ long-term foreign- and local-currency issuer default ratings at “BBB-” and “BBB”, respectively, maintaining the country’s investment-grade standing.

Moody’s was also optimistic about the Philippines’ economic prospects for 2016, reaffirming the country’s “Baa2” bond rating with a stable outlook in mid-October. According to the agency, the rating reflects the “resilience of [the Philippine] economy to the current headwinds buffeting neighboring countries” and expectations that the positive economic and fiscal trends will continue for the next one to two years.

BUDGET DEFICIT WIDENS
The year’s economic expansion was fueled in part by higher levels of government spending, which led to a deeper budget deficit in the latter half of the year. On the back of more than P1.82 trillion of disbursements in the first 10 months of the year, the year-to-date budget shortfall rose to P52.6 billion in October, up 56% year on year.

While outlays were higher than anticipated, government revenues were also up, with receipts rising by 12% year on year to P1.77 trillion between January and October.

In past years the government had come under fire for the relatively slow pace of spending, which often fell short of expenditure targets and delayed investment and capital projects. The late-term acceleration in public spending could help clear some of the project backlog and further stimulate the economy.

Economic activity in the coming year is also set to be fueled by presidential elections in May 2016. A recent report by Standard Chartered Bank predicted the election campaign would spur an influx of investment in the manufacturing, government services, private services, transport, communications and storage sectors, in particular.

According to the bank, the ramp up in public spending, alongside higher household consumption levels, could add between 0.1 and 0.3 percentage points to GDP in 2016.

Source: Oxford Business Group/ January 7, 2016/ http://www.bworldonline.com/content.php?section=Economy&title=philippine-year-in-review-2015&id=121092

GMR-Megawide Consortium still needs to pass financial review

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Category: Economy

23 Mar 2014

 

Written by Lorenz S. Marasigan

THE Department of Transportation and Communications (DOTC) is still in the process of reviewing the financial proposal of front-runner GMR Infrastructure Ltd. and Megawide Construction Corp. Consortium for the P17.5-billion Mactan-Cebu International Airport (MCIA) New Passenger Terminal Project.

Transportation Undersecretary Jose Perpetuo Lotilla said it is still possible should the GMR-Megawide Consortium fail to hurdle the review, the agency will have to review the proposal of the bidder with the second-best tender.

The partners offered a P14.4-billion premium on top of the project cost, allowing the Filipino-Indian consortium to secure the top position in the auction held last December.

Bidding rules, according to Transportation Secretary Joseph Emilio Abaya, provide that only the winning bidder’s financial evaluation shall be evaluated.

If its offer fails the review, that is the only time the agency can move forward to assessing the financial bid of the second-best bidder, which in this case is the tandem of Filinvest Development Corp. and Changi Airports Mena Pte. Ltd.

The Filipino-Singaporean partners offered a lower P14-billion premium for the project.

“If Megawide-GMR fails, the bids and awards committee will move to Filinvest-Changi. That’s what the rules provide,” Abaya told the BusinessMirror via text.

Awarding for the project was originally scheduled last January. It has been delayed for about three months now because of allegations of conflict of interest between two parties involved in the auction.

Filinvest-Changi alleged that the managing director of Malaysia Airports Holdings Bhd. Tansri Bashir sits as a director in four GMR airports, namely, Delhi International Airport Private Ltd., GMR Hyderabad International Airport Ltd., Istanbul Sabiha Gokcen International Airport Group and GMR Male International Airport (Maldives).

The Malaysian firm participated in the auction for the said project together with Filipino partner First Philippine Holdings Corp.

Megawide-GMR, however, explained that Bashir, who is a board member of the four airports enumerated, “has no role to play in the bid, since he is not a member of the Board of Directors of GMR.”

Transportation Spokesman Michael Arthur Sagcal admitted that the government is having a hard time collecting pieces of evidence to validate the accusation, noting that there is a “dearth” in the proof available.

“There is no decision yet as to which group will win the contract.  No recommendation has been made to the secretary,” Sagcal said. “[The agency] is being thorough in resolving the matter to ensure that its decision will be in accordance with what the law and the rules alone prescribe.”

“We will, of course, endeavor to achieve the target date,” Lotilla, who chairs the bids and awards committee of the agency, said separately.

According to bidding rules, the special prequalification bids and awards committee (Special PBAC) shall recommend a winning bidder to Abaya for the awarding of the project. After the Transport chief’s approval, the Mactan-Cebu International Airport Authority (MCIAA) shall then assess the recommendation.

The MCIAA Board of Directors will then decide on whether or not to approve such award.  Only after these steps are observed can the concession be considered as having been awarded.

The Special PBAC discusses and debates on the relevant issues throughout the procurement process, to ensure proper decisions are made.  From pre-qualification to post-qualification, the Special PBAC reviews the recommendations of the technical working group (TWG) and its consultants.

In each of the bidding stages, the TWG and the consultants are required to present their findings to the Special PBAC, which then has the opportunity to dissect the summary reports prepared and submitted by the TWG.

All these steps are taken in accordance with the Build-Operate-and-Transfer Law, which provides for the particular actions required in the conduct of bid activities.

Megawide has cemented its image as a mainstay in the government’s flagship infrastructure program, bagging a number of public-private partnership (PPP) projects: the P16.42-billion PPP for School Infrastructure Project (PSIP) Phase 1, two of the five contracts under the P8.8-billion PSIP Phase 2 and the P5.7-billion deal for the construction, operation and maintenance of the Philippine Orthopedic Center.

It has also purchased bid documents for the P64.9-billion Light Rail Transit Line 1  Cavite Extension Project and the P2.2-billion Integrated Terminal System Southwest Terminal Project.

The airport deal involves the construction of a new passenger terminal, renovation of existing terminal, operation and maintenance of both the new and the existing passenger terminals during the entire concession period, and relocation of Philippine Air Force facilities.

Property development tops Davao region investment jump

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Category: Economy

25 Mar 2014

 

Written by Manuel T. Cayon / Mindanao Bureau Chief

DAVAO CITY—Subdivision and condominium constructions topped the list of projects in the Davao region, where investments jumped sixfold in the last two years, the Department of Trade and Industry (DTI) office here said.

Eight property development projects, including two hotels, were registered with the Board of Investments (BOI) in 2012, and four the following year, DTI Director Ma. Belenda Ambi told a biweekly business forum here.

There were no amounts indicated for each project though per BOI policy on disclosure to the media, but Ambi said the BOI list shows that all BOI-listed investments in 2012 reached P5 billion, and increased by 620 percent to P31 billion the following year.

Only two midrise hotels opted to register with the BOI, that entitled them to government fiscal incentives. Ambi said the other new hotels, as well as other big investments, chose to go directly to the regular regulatory and documentary requirements of the local governments, to the other agencies like the Department of Tourism. The other property development projects were under the category of low-cost mass housing, but many were about construction of middle-class condominiums than subdivisions. There were a total of 31 investments, with power generation, light manufacturing and one coal-mining operation contributing to big-ticket ventures in the region.

 The Aboitiz-owned Hedcor companies developed two small hydroelectric generation projects in Barangay Tudaya, Santa Cruz town of Davao del Sur, totaling 13.6 megawatts (MW). The bigger new power generation within  the period was the two coal-fired power plants totaling 300 MW in Malita town, in the newly created Davao Occidental province, formerly the southern part of Davao del Sur.

Light manufacturing was accounted for by leather-goods production here, a kitchen-system production in Digos City, Davao del Sur, and a production of coconut-water concentrate in Santa Cruz, also in Davao del Sur.

Most of other projects were in agriculture and agribusiness.  Ambi said this  was due to the agricultural nature of the region.

Palace to push economic reform bills in congress

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Published on Sunday, 02 June 2013 21:51

Written by Butch Fernandez / Reporter

MALACAÑANG is poised to ask administration allies in the Senate and the House to fast-track the approval of long-pending economic reform bills to help sustain the robust first-quarter 7.8-percent gross domestic product growth.

Palace officials confirmed that a number of “priority” economic bills that were sidelined to give way to the passage of the controversial “sin” tax bill, which raised the levies on cigarettes and alcohol products, would likely be endorsed anew for early enactment when the new Congress convenes in July.

Among them are the proposed Customs Modernization Act, amendments to the mining tax to increase the share of local governments from mining revenues to 7 percent from 2 percent, as well as the alternative fuel incentives bill granting tax breaks to manufacturers of so-called e-vehicles.

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Also to be endorsed is the bill rationalizing fiscal incentives to plug revenue leakages from perks that have no valuable trade-offs. The departments of Finance and Trade, however, have yet to reconcile their differences on the bill.

Finance officials have argued in Congress that some of these incentives are either archaic or are overlapping with each other. But the Department of Trade and Industry insists these are needed to lure more investments.

Most of the unapproved Palace priority bills were not even submitted for plenary consideration and got stuck in the congressional ways and means committees as Executive officials focused intense lobbying efforts in favor of passing first the sin-tax law, which targets some P20 billion in additional revenues, before Congress adjourned for the May 13 elections.

Malacañang expects to push for the quick passage of the pending reform measures and other remedial legislation it earlier endorsed,  given the control of Palace allies in the 16th Congress.

Palace Deputy Spokesman Abigail Valte on Saturday confirmed that the Office of the President had endorsed to the Legislative-Executive Development Advisory Council a number of priority measures, including economic reform bills that would be refiled for consideration of the incoming Congress.

DBS: PHL’s May inflation at low level

Published on Tuesday, 04 June 2013 21:06

Written by Bianca Cuaresma / Reporter

Inflation in the Philippines was expected to have remained at a low level in May this year, analysts at a Singapore-based bank said on Tuesday.

Easing oil prices the past few months and stable food prices were seen to have allowed inflation to drift low to the forecast rate of 2.8 percent in May, according to a research note released on Tuesday by the Development Bank of Singapore (DBS).

“Benign food and energy prices have allowed headline inflation to drift lower, putting the economy firmly in a sweet spot of high GDP [gross domestic product] growth and low inflation,” its analysts said.

According to DBS, food prices, which account for the largest portion of the consumer price index , posted an increase of just 2.2 percent. The bank also said the transport component was also notably low and registered a 0.7- percent decrease in April.

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Following the robust GDP growth in the first three months, DBS forecast a “mild updrift” in inflation the rest of the year as the growth momentum is sustained.

Cuts in the Bangko Sentral ng Pilipinas’s special deposit account window in tandem with high unemployment rate were also seen to tell on the country’s growing economy. 

“A likely pickup in the pace of loan growth after hefty cuts in the special deposit account rate should also help to stimulate economic activity in the coming months,” DBS said. 

“Structurally, the high unemployment rate may also help to reduce wage pressures even as the economy moves to a higher growth trajectory of 6 perccent to 8 percent,” the bank added. 

April’s inflation rate stood at 2.6 percent, the lowest since March last year. The 13-month low inflation rate was largely attributed to slower price increases for non-food items and reductions in the prices of domestic petroleum products. 

The National Statistics Office is set to release the official May inflation rate on Wednesday.