P-Noy: PHL to hit 5%-6% GDP target despite euro-zone woes

Wednesday, 12 September 2012 22:31 Mia M. Gonzalez / Reporter

Despite the specter of worse financial troubles in the euro zone, the Philippines is expected to hit its 5-percent to 6-percent growth target for the year, President Aquino said on Wednesday.

Mr. Aquino made the statement at the IBM Think Forum at the Makati Shangri-La Hotel, where he narrated positive developments in the Philippine economy in the face of worrisome external developments.

“I am sure you have all heard that, in the second quarter of 2012, the Philippine economy grew by 5.9 percent. If all goes as planned, we’ll be on target in achieving between 5-percent to 6-percent GDP growth for 2012,” he said.

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In a media interview, Mr. Aquino said economic growth will be driven by infrastructure development, investments, agriculture and public spending, and that computations for the first two quarters of the year—6.3 percent and 5.9 percent, respectively, showed average growth exceeding  target.

“Let’s just look at this—6.3 and 5.9 is 12.12, right? Divided by two is 6.06…. So far, we have exceeded the 5 to 6 [percent],” he said.

In his speech, he said in the midst of financial troubles in Europe where the embattled Greek economy had stoked the “fear of the unknown” among other governments, the Philippines had managed to significantly improve its competitiveness ranking in the World Economic Forum’s Global Competitiveness Report for 2012-2013.

“These achievements, together with the 44 record highs of the Philippine Stock Exchange Index, and the fact that the Philippines is now only one level below investment grade, according to two of the three major ratings agencies, show that we are well on our way to filling up the half-full glass,” he said.

Referring to the unstable Greek economy, Mr. Aquino said, “This fear of the unknown is feeding on itself, and spiraling into what may become a greater crisis, which benefits neither the people of Greece, nor other citizens of the euro zone or, as Madam Christine Lagarde’s position is, nobody is immune from the crisis in the euro zone.”

Lagarde is the managing director of the International Monetary Fund (IMF), and had addressed leaders including Mr. Aquino at the Asia-Pacific Economic Cooperation Summit in Hawaii last year and in Vladivostok, Russia, this year.

“In both meetings, Madam Christine Lagarde…made references to external pressures and factors that can impede, and have already impeded, the progress of some global economies—but at the same time, these factors can also open up new prospects for others,” he said.

The President said that emerging markets like the Philippines “are given the opportunity to make the most of their competitive advantages and become prime locations for investment” as capital flowed out from developed but troubled economies.

The President also lauded IBM Philippines, which celebrated its 75th anniversary, for betting on the Philippines.

“Instead of fearing the unknown, your leaders saw an opportunity to bet on the Philippines and to bet on the strengths of your company. Today, we can all agree: those bets have indeed paid off,” he said.

Central Visayas investments hit P4.9B

By Mia A. Aznar

Friday, September 7, 2012
SOME P4.9 billion worth of projects have been registered with the Board of Investments (BOI) Cebu extension office for the first half of the year.
These are expected to generate 1,059 jobs.

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The BOI Cebu extension office recorded 13 projects for the first semester, with an additional three approved last July and August amounting to P232 million. Eight of these projects are in Cebu, while Bohol and Siquijor have one project each. Three projects have been registered for Negros Oriental.
Four of these projects are for mass housing, four are for renewable energy, two for tourism, two for export and one is for bulk water supply.
Filinvest Land Inc. submitted a total project cost of P2.1 billion for its San Remo Oasis project, expected to generate 352 jobs. Its One Oasis Cebu project has a total project cost of P891 million, with an estimated 174 jobs available.
Quadriver Energy Corp. registered a renewable energy project for P1.4 billion in Bohol, while PNOC Renewables registered three renewable energy projects in Negros Oriental.
Housing, expansions
Mandaue Cebu Marine Products plans to produce fish fillet products and registered a project worth P86.2 million with an estimated 256 jobs available.
Last year, first quarter investments amounted to P2.1 billion and 534 jobs, while the second quarter yielded P4.02 billion in investments with 1,915 jobs. These included housing projects, hotel modernization, and expansion of iron and steel business.
For January to April 2012, Central Visayas was among the sixth top investment destinations in the country, the BOI said in a previous report. It received P2.19 billion in investment commitments.
Central Luzon was the top investment destination for that period, with P56.08 billion in approved projects. Region 4 and the National Capital Region rounded up the top three. Western Visayas (P16.37 billion) and Davao (P2.87 billion) preceded Cebu on the top investment destinations list.

Published in the Sun.Star Cebu newspaper on September 08, 2012.

Pilipinas Water to pour P2.5B into SRP water supply project

By Katlene O. Cacho

Friday, September 7, 2012
WATER technology system provider Pilipinas Water Resources Inc. (PWRI) is earmarking P2.5 billion in investments in the next five years to ensure sustainability of the total water management project for the South Road Properties (SRP).
PWRI Director Antonio Camelo Tompar, in an interview, said the amount will cover the technical work that would produce 35,000 cubic meters (cu.m.) of water supply per day.

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Tompar said the supply is expandable to 50,000 cu.m., which is more than enough what the SRP requires.
Tompar said the firm has purchased and put in place imported pipelines to ensure better service to SRP locators. A stable water supply at SRP is among the demands of conglomerates like Filinvest Land Inc. and SM Prime Holdings Inc.
From the sea
In 2010, the Cebu City Government signed a 30-year contract with PWRI for the water supply in the SRP, which City Hall reclaimed using a loan from Japan. Under the agreement, the PWRI will use the existing city-owned desalination and waste water treatment plants located in the SRP.
Better pricing and environmental sustainability are their project’s value proposition, he said.
PWRI plans to sell the water at P5 (per cu.m.) less than the current water price of Metro Cebu Water District (MCWD). They would also re-sell the treated water or recycled water at P10 (per cu.m.) less.
He said the firm will use seawater desalination, which he described as “very sustainable.” Seawater desalination is the process of converting seawater into potable water.
Tompar, who is also chairman of Mactan Rock Industries Inc., also announced the expansion of Mactan Rock to serve the water requirements of Tacloban, Iloilo and Coron in Palawan.
He said the company got a local franchise to supply water for the underserved areas of Tacloban.
The initial development will yield 20 cu.m. per day, which can be expanded to 5,000 cu.m. per day using the surface and well water treatment.
Mactan Rock will also be serving the Dumangas-Barotac Nuevo Water District with 3,000 cu.m. of water supply per day, which can be expanded to 30,000 cu.m. per day. The firm will develop and distribute some 3,000 cu.m. of water supply per day to Coron, Palawan to address the water requirement of its growing tourism sector.

Published in the Sun.Star Cebu newspaper on September 08, 2012.

2 giants want Cebu airport award

Monday, September 10, 2012
CEBU CITY -– The Ayala Corp. and Aboitiz Equity Ventures Inc. (AEV) have signed a joint venture agreement to compete for the new passenger terminal project at the Mactan-Cebu International Airport.
“We cannot think of a better partner for this project than the Aboitiz group, who has not only built a long history and heritage in Cebu, but also has a successful track record in undertaking significant projects in multiple industries,” Ayala Corp. President and Chief Operations Officer Fernando Zobel de Ayala said in a press statement.

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Between them, the two listed companies have stakes in power, telecommunications, banking, construction, real estate development and management, food processing, business process outsourcing and transportation, among others.
The Mactan passenger terminal project, estimated to cost P10 billion, is one of the ventures on the priority list of the Aquino administration’s Public-Private Partnership (PPP) program.
In their press statement, Ayala and Aboitiz said they have signed an agreement to form a 50-50 joint venture company that will serve as their vehicle to bid for and develop the second biggest airport in the country.
The Mactan Cebu International Airport Authority (MCIAA) said the existing terminal building was built in 1995 with a capacity of 4.5 million passengers per year.

READY FOR TAKE-OFF.  The Neda committee in charge of big-ticket infrastructure projects may deliberate this or next month, and if all goes well, the public-private partnership project to build a new passenger terminal may be awarded next year, MCIAA General Manager Paul Villarete says.(Allan Cuizon)

MCIAA General Manager Nigel Paul Villarete said the capacity was breached in 2009 yet, with 4.7 million passengers. This year, seven million passengers are projected to use the facility.
Homegrown
Ayala said both organizations “strongly believe in the potential of the Mactan Airport to be a compelling gateway to the country for international passengers and to the Visayas for the growing domestic travelers.”
AEV President and Chief Executive Officer Erramon Aboitiz, in the same press statement, said: “We are equally excited about this partnership with Ayala, especially as it is for a project that gives AEV the opportunity to enter into a strategic new segment that is crucial to developing both the country’s transportation infrastructure as well as its tourism potential.”
“Moreover, the fact that the project is in Cebu, which is home to the Aboitiz Group, gives it more special meaning to us,” he added.
While not homegrown like Aboitiz, Ayala Land is responsible for the Cebu Business Park, the Ayala Center Cebu, the Asiatown IT Park and some high-end residential developments.

TERMINAL OPTIMISM. This artist’s perspective of what the Mactan Cebu International Airport could look like was among the documents in a feasibility study assisted by the Korean International Cooperation Agency. (Contributed photo/Mactan Cebu International Airport Authority)

According to the PPP’s website, the project involves the construction of a passenger terminal building with a capacity of about eight million passengers per year, and the operation and maintenance of both old and new terminals.
The project has an indicative project cost of US$241.7 million, with the Department of Transportation and Communication (DOTC) designated as implementing agency.
2015 or later
Villarete said, though, that the final project cost will depend on the winning bidder’s design. The design will be prepared by the prospective concessionaires, based on standards, specifications, and service levels set by DOTC.
Projects of this magnitude take five to seven years of gestation, from the start of the feasibility studies to the start of operations, Villarete said. The studies of the new terminal should have started in 2005 so that it could be opened by the time the existing terminal reached its full capacity.
But he said the feasibility study was started in 2010 so they are looking at 2015 or later for the opening of a new terminal.
Based on MCIAA records, Villarete said the annual passenger movements were 4.7 million in 2009, 5.4 million in 2010 and 6.2 million in 2011.
In an interview yesterday, Villarete declined to say who the other probable bidders are, saying only that they will be announced in due time.
“But I can tell you that many are interested. Around 20 firms attended the first market sounding at the PPP Center last May, both local and foreign airport operators, banks, construction companies, systems services and investment groups, and many others have signified their interest,” he told Sun.Star Cebu.
Timetable
He added that the bidding will strictly follow the procedures, rules and regulations for competitive tender for PPP, and that the Department of Transportation and Communications will uphold the principles of prudence, transparency and accountability.
“I am confident it will be competitive and will bring about the best advantage for the government,” Villarete added.
The feasibility study, assisted by Korean International Cooperation Agency (KOICA), was completed in October last year.
Neda’s Transaction Advisory Services has yet to finalize the Business Case and PPP Structure. Once approved, both will be submitted to the NEDA-Investment Coordinating Committee (ICC) for approval under the PPP process.
“We’re looking at end of September or October for NEDA-ICC deliberation. After ICC approval, the tender procedure will follow under existing rules and regulations. All in all, we are looking at a PPP award by third or fourth quarter of next year, depending on how long the winning concessionaire can achieve financial close. They will be the ones who will design and construct the new terminal, which maybe completed and opened end of 2015 or early 2016,” Villarete said.
Why wait?
Earlier this year, passengers complained about the extreme heat in the Mactan Airport’s pre-departure areas because their aging air conditioning units could not handle the large summer crowds.
Last week, water flowed out of a floor drain in the domestic arrival hall’s baggage claim area, because the plumbing system couldn’t contain the unusually large volume of rainwater.
“We don’t want to reach the point just like what happened in Manila where new flights are no longer accepted during the day or that airlines are even asked to decrease their flights. Do we want this to happen in Cebu? It will, if we don’t do this fast,” Villarete said.
The government is expected to announce the bidding for the Mactan Airport project before the end of the year. Both parties will then enter into a definitive agreement once the bid rules or the terms or reference for the project have been finalized and published, the Aboitiz-Ayala statement said.
They are also open to forming a consortium with global airport operators.
Aboitiz Equity Ventures declared a consolidated net income of P11.81 billion as of June 30 this year. It told the Philippine Stock Exchange (PSE) that this represented a 16 percent increase year on year.
Ayala Corp., for its part, told the PSE its consolidated net income for the first half was P6.1 billion, or about 23 percent higher than in the same period in 2011. (EOB/With LCR of Sun.Star Cebu)

Published in the Sun.Star Cebu newspaper on September 10, 2012.

Firm sets aside P4B for projects

By Katlene O. Cacho

Sunday, August 26, 2012
CEBU-BASED property developer Cebu Landmasters Inc. is setting aside P4 billion as capital expenditure budget to finance four new projects in 2013.
These four projects include a 10-hectare property in the south of Cebu and a five-hectare property in Consolacion.

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The company will also build next year Park Central, a 20-storey office condominium in Cebu IT Park, and the second tower of Baseline Residences, which will have a commercial component, on Juana Osmeña St.
“The best time to make decisions for developers to build properties and for buyers to buy homes is now,” Cebu Landmasters Inc. president and chief executive officer Jose Soberano III said in an interview on Friday.
“Strike while the iron is hot,” he said.
Soberano said the low interest rate, strong domestic liquidity, huge housing backlog and strong inflows of remittances prompted them to be aggressive in building projects in Cebu, which he described as an ideal destination for employment and education.
He said at no point in the country’s history has there been credit as “readily available to the market at low interest rates” as now.
No bubble
He said talks of a glut in the housing sector are just speculations triggered by fear, considering that the country still has “a huge backlog” in the economic and middle market segments or houses within the range of P150,000 to P3.5 million.
The Bangko Sentral ng Pilipinas (BSP) earlier said there is no basis yet to concerns that a bubble is forming in the housing market. Last week, however, the BSP said it will impose additional controls on the exposure of banks to the real estate sector.
The maximum allowable “real estate exposure” of a bank under the BSP guidelines is set at 20 percent of its total loan portfolio.
Under the new rules, even investments by banks in securities issued by property firms, housing loans to individual borrowers, and loans to support development of socialized and low-cost houses are now included in the computation of “real estate exposure.”
Soberano believes the move of BSP in imposing stringent regulations for banks in granting real estate loans is a step in the “right direction.”
“A regular review is needed on the bank’s real estate account portfolio especially its
receivables mix. We are experiencing the best of times in the real estate industry and the banks have important roles in ensuring the continued success by policing their own ranks,” Soberano said in a text message yesterday.
Cebu buyers
According to Soberano, the country still has 3.5 million underserved households nationwide, of which five percent or 175,000 are in Cebu.
Unlike other buyers in the country who buy houses or condo units for investment or multiple ownership, Soberano said 70 percent of buyers in Cebu are new or first-time owners.
“The challenge for developers now is to make their product irresistible to the market,” he said.
He also urged developers to ensure the delivery of their project, otherwise failures will affect the reputation of other industry players.
Cebu Landmasters Inc. has been in the real estate industry for eight years. Since its incorporation in 2003, the company has ventured into developing residential homes in the countryside.
In 2010, the company launched Asia Premier Residences, a 17 high-rise condominium project at the Cebu IT Park. This was followed by the 18-storey residential condo development Baseline Residences on Juana Osmeña St. last year.
Soberano said he also plans to venture into leasing commercial properties in the future.

Published in the Sun.Star Cebu newspaper on August 27, 2012.