business
Foreign Investments to PH Still Smalltime
EVEN as inflows of foreign direct investments (FDI) rose four-fold in April on the back of higher capital inflows and reinvestment in the country, as the Bangko Sentral ng Pilipinas (BSP) reported Thursday, a private bank analyst said the amount is smalltime and not enough to compete with regional peers.
Metropolitan Bank & Trust Company (Metrobank) research head Ildemarc Bautista said the growth is welcome news, but it is still not enough to be competitive in the region. “It is welcome news, but those are still absolute numbers,” Bautista said.
FDI soared to US$597 million from US$ 149 million in 2013, BSP data showed. This was driven by a spike in investment inflows in debt instruments to US$518 million from US$23 million in the same comparable period.
Smalltime
“If we hit $4 billion by year-end, it’s still small compared to our peers in the region,” Bautista added.
The Philippines registered $3.86 billion in FDIs in 2013, low compared to Southeast Asian peers, according to United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2014. As of end-2013, FDIs in Malaysia reached $12.31 billion, $12.95 billion in Thailand and $18.44 billion in Indonesia.
Reinvested earnings also increased by 26.2 percent to US$80 million compared to last year’s US$63 million, the BSP noted. However, equity capital investments registered a net outflow of US$1 million as withdrawals of US$79 million offset US$78 million gross equity capital placements. FDI in January to April grew by 9.1 percent to $2.4 billion $2.2 billion net inflows last year as net inflows were recorded across all components.
“The sustained increase in net inflows continued to reflect strong investor confidence in the country’s solid macroeconomic fundamentals,” the BSP said.
Net investment inflows in debt instruments also increased by 42 percent: US$1.6 billion from the US$1.1 billion of the previous year. Reinvested earnings increased by 1.3 percent year-on-year to $265 million while net equity capital placements reached $635 million.
Most equity capital came from the United States, Hong Kong, Japan, Singapore, and Taiwan and was channeled mainly to financial and insurance, real estate, manufacturing, wholesale and retail trade, and mining and quarrying activities.
Greater Outlflows
Foreign direct investments (FDI) have been flowing out more than in since 2010, according to the UNCTAD report. In 2010, FDI reached US$1.07 billion but US$2.712 billion were withdrawn at the same time. Then in 2011, total inflows amounted to US$2.007 billion while withdrawals totaled US$2.350 billion. By 2012, total foreign direct investments in Philippines reached US$3.215 billion, but US$4.173 billion were also taken repatriated by foreign investors.
FDI inflows outpaced outflows only last year.
Economists cited foreign ownership limits as a major impediment to FDI growth.
“When they see the necessity of needing a 60-percent local partner, that diminishes the attractiveness of coming in,” Ateneo professor Cielito Habito said in a forum last month. “It’s really time to revisit our age old resistance to opening up because we are one of the few remaining around in the ASEAN who are still quite restricted. The sooner we do this, the better,” he added.
The 1987 Constitution limits foreign ownership in certain industries, particularly utility companies, to 40 percent. The Charter was written during the time of then-President Corazon C. Aquino, mother of President Benigno S. Aquino III. To amend the foreign ownership rule will require constitutional change.
“There are challenges since there are many bills pending and Congress is not taking action, as it is busy with other issues,” Habito said.
In February, the BSP reported that inflows of foreign direct investments (FDI) dropped nearly 60 percent, reflecting policy inconsistencies, lack of enabling laws and easing of equity placements. BSP data showed foreign direct investment (FDI) fell by 59 percent to US$350 million in February from U$854 million in the same month last year.
Enabling Laws
“The country needs enabling laws and environment, lower cost of doing business, more transparency and consistency to attract more foreign investments,” Bautista said.
Infrastructure – mainly the power situation and the condition of airports – also help ruin the investment climate, Bank of the Philippine Islands (BPI) economist Nicholas Mapa said in a separate interview.
There were also more equity placements last year as investors were anticipating credit rating upgrades from debt watchers, Mapa noted. “This year, there are still some inflows but not at the same pace as that of last year,” he said.
Though FDIs are improving, the Philippines remains a laggard among Southeast Asian peer markets, Mapa said. “The country has to address factors [related] to FDIs so we can attract more long-term investments”.
CARTELS SHOW TEETH
By Miguel Raymundo
Business cartels always had their way with the government. How the abuse of their control over government hits the consumers again gets public attention on the price hike of garlic.
Garlic, a food ingredient, has not gone scarce in the market. Only that its price has shot up 900 percent from P17.00 to P300.00 per kilo. The conclusion of Senator Cynthia Villar is this is price manipulation.
Everybody is guessing what caused this. Was it a surge in demand for the food ingredient? Did supply decline? If things were normal except for a spike in prices, what gave the courage to traders and the cartel to manipulate the prices?
In a hearing in the Senate called by Sen. Cynthia Villar, government officials and industry leaders admitted the spike in the price of garlic stemmed from price manipulation.
While the garlic price shot up to outrageous level, consumers also suffered price spike in rice, basic food commodity in the country.
Price of well-milled rice shot up by 19 percent from its year ago prices. Commercial rice was selling at minimum of P42.00 per kilo in the market.
The price hike in rice, though, benefitted farmers as farm gate prices of palay went up to P25.00 per kilo.
Food cartels are moving, preparing to control their respective markets, with the garlic and food ingredient group taking the first bold move.
In this country cartels get what they want. They can force the President to reorganize government to accommodate their interests. And this power was again confirmed at the Department of Agriculture where these food cartels dictate their terms of engagement.
A secretary of agriculture is always at the mercy of these cartels. And Secretary Proceso Alcala of the DA is the latest victim of this cartel’s influence in government.
The DA under Alcala was lately chopped and taken away from him were “problematic” agencies like the NFA, PCA, and NIA. These agencies were given to former Senator Francisco Pangilinan, now the country’s food czar.He now sits in PNoy’s official cabinet.
Alcala refused to be dictated by the rice cartel and other food cartels. Instead,he went to the farms and encouraged farmers to plant more. He made it hard for the cartel to operate and contained massive rice smuggling.
Sources in the agriculture sector say Alcala’s vigilance and independence from the rice cartel ended up with savings in tens of billions of pesos in rice importation.
Same sources said, more than savings, Alcala was pushing for higher local production and improved food security. There is no food security in rice and farm product importation. He was pushing for higher income to farmers to encourage local production.
“Smuggling farm product is the cause of slow death of agriculture in the country,” they said.
But those billions of pesos lost by the cartels funded his removal. The strongest lobby to oust a cabinet member supported by media budget in tens of millions of pesos did Alcala in. He lost to the rice cartel lobby and is now a paper tiger in the farmers’ fight against powerful traders.
That the garlic cartel is not bothered a bit by some senators concern over this price manipulation could only mean confidence on their hold on some government officials, some of them in Malacañang.
With the price manipulation earning for these garlic and food ingredient traders over Php25Billion, they can buy everyone and anyone in this government.
ONLINE BANKING
By Ike Seneres
Legally speaking, there are no more usurers in the Philippines because anti-usury laws have been abolished. That is like saying that there are no more subversives in the Philippines too, because anti-subversion laws have also been abolished. The fact is, there are still many financiers who are lending money at usurious (merely a figure of speech now) rates, and there are still many people who are trying to undermine the government in subversive (also merely a figure of speech now) ways. As it is now, the laws might have removed the legal basis of the problems, but the problems still exist.
Under normal circumstances, no businessman in his right mind would borrow money at too high (read as usurious) interest rates, if only he could get much lower (read as reasonable) interest rates elsewhere. As it is supposed to be, businessmen are supposed to be able to get reasonable interest rates from legal (read as transparent) sources such as the banks, but that is easier said than done. As it actually happens, many businessmen are unable to borrow money from the banks because they are not “bankable” from the perspective of these banks.
As it is now, many businessmen could not get credit cards because of the same reason that they are not bankable. To put it another way, they could not get credit cards because they do not have a credit history, meaning that they do not have credit records. The good news is, anyone could now get prepaid credit cards, an oxymoron because these are actually just debit cards. The bad news however is that debit cards are not enough for businessmen to apply for merchant accounts, and these would actually exclude them from the world of electronic commerce.
By comparison, prepaid credit cards are better than the so-called money cards or cash cards because the former would enable anyone to establish credit records. It is also better to use prepaid credit cards instead of ATM cards for the purpose of paying for purchases, for the same goal of establishing credit records. Aside from relying on what bank records could do, it is also advisable for businessmen to establish good relationships with bank officers, so that there would be familiarity on the side of both parties when the time is right to apply for a loan or a credit card.
Not too long ago, businessmen had to apply for a merchant account in order to be able to accept credit card payments. Very recently however, Globe Telecom has launched a service that will enable anyone to accept credit card payments. This new service will surely revolutionize the way we do business on credit terms. Of course, this new service is no big deal for the big retailers because they have always had merchant accounts. Let us see how this new service could improve the revenues of our local businessmen.
Long before the mobile phone became a credit card machine, it has already become a Point of Sale (POS) machine. Until now however, handheld POS machines could only handle cash transactions. Now that the POS machine in the cell phone could already accept credit card and debit card payments, let us see what good it could do for our local businessmen. Down the line, I think that it will not be too long now before the mobile phone will also become an ATM machine. When that happens, it will actually be the ambulant businessman who will become your walking ATM machine.
It may just be a play of words, but the probable ambulant businessman of the future could actually be the lowly vendor of the present. Give the lowly vendor of today a phablet (a cross between a phone and a tablet), and he will have thousands of electronic brochures in his hand, and that would be more than enough for him or her to sell you anything under the sun. As if that is not enough, he or she will also be able to broker for you if you want to sell anything under the sun.
There was a time when lines were clearly drawn between internet commerce and mobile commerce. Now, the lines are practically gone, because anyone could do electronic commerce (e-commerce) using either a computer or a mobile phone. That is really nothing new, but what was missing before was ownership of a credit card to be able to buy anything online. That is not a problem now, because of open access to debit cards. What was also missing was the means to be able to sell anything online, and be able to accept credit card or debit card payments. That is also not a problem now. Beyond the credit cards, what our local businessmen needs now is more access to bank credit lines.
For feedback, email iseneres@yahoo.com or text +639083159262
PROPERTY MAJOR MEGAWORLD BOOKS HIGHER THAN PROJECTED PROFIT IN Q1
Hefty revenues from leasing its office and retail portfolio pushed the bottom-line of listed property major Megaworld, owned by ethnic Chinese tycoon Andrew Tan, in this year’s first quarter, a sign of brisk business in the real estate market.
The Philippines’ leading and the no. 1 office developer and landlord, Megaworld posted a 49-percent jump in net income to P2.69-billion, year-on-year, due to strong sales in its various townships, particularly Newport City, Uptown in Bonifacio, McKinley Hill and Eastwood City.
“As we celebrate our 25 years in the real estate industry, we look forward to another record breaking year for Megaworld,” says Tan in a statement to the Philippines Stock Exchange.
Megaworld’s rental income from office developments and lifestyle malls also surged to a record P1.7 billion, 23 percent higher than in the same period in 2013.
Total revenues of Megaworld, together with its subsidiaries Empire East Land Holdings and Suntrust Properties, rose 22 percent to P9.94 billion for the first quarter 2014, up from P8.15 billion for the same period in 2013.
Consolidation
Megaworld, and its subsidiaries, posted P19.6 billion in reservation sales in the first quarter 2014 which is 9 percent higher compared to same period last year.
Just last week, the company announced the planned consolidation of Tan’s real estate companies under Megaworld with the acquisition of 49.2% stake of Alliance Global Group, Inc. in Global-Estate Resorts, Inc. (GERI).
The acquisition brings Megaworld’s majority stake in GERI to 74.96% and increases the property giant’s total land bank to more than 3,900 hectares.
Megaworld is also set to further solidify its position as the leader in office developments in terms of total office space inventory by completing another 112,000 square meters of office spaces this year. By the end of 2014, the company will have around 712,000 square meters of office spaces in its portfolio with the completion of new state-of-the-art office towers in Uptown Bonifacio, The Mactan Newtown in Cebu, and Iloilo Business Park.
On the retail side, Megaworld is also set to complete additional commercial and retail spaces with the completion of the Venice Grand Canal Mall in McKinley Hill, and some commercial strips at The Mactan Newtown.
No. 1 in real estate
Megaworld’s existing commercial and retail space portfolio is currently at 304,083 square meters.
To date, the company has 10 townships all throughout the country covering around 300 hectares of land. This includes the 17-hectare Eastwood City, considered to be the country’s first cyberpark.
Over the past 24 years, the Megaworld Group has emerged as the country’s No. 1 real estate organization. It has completed more than 320 residential and office buildings with a total area of around 5.6 million square meters.
Currently, about 185 residential, office and hotel buildings with a total area of around 5.4 million square meters are under development.
Megaworld is also expanding Eastwood City, its first township in the Philippines and the country’s first cyberpark, to an additional 1.5 hectares amid growing demand for office and commercial spaces in the township.
“The tremendous success of Eastwood City as the country’s first cyberpark and premiere township has attracted thousands of Filipinos to live here,” says Tan.
At least three office towers are in the expansion pipeline. First to rise will be a high-rise mixed-use tower that combines residential, office and commercial in a cluster.
The company is projecting to accommodate around 100,000 square meters of office spaces that will be built progressively over the next few years and around 600 residential units in the Eastwood 1.5-hectare expansion plan. All towers will have leasable commercial spaces at the ground levels.
“With the expansion, we are looking forward to a more exciting mix of new commercial and retail partners in this new side of Eastwood City,” says Kevin L. Tan, first vice president and head of commercial division, Megaworld.
Home to IT workers
To date, Eastwood City is home to an estimated 60,000 IT and BPO workers in 59 companies, making it the biggest cyberpark in the Philippines in terms of workforce. It is also home to around 25,000 residents and about 500 commercial and retail partners.
Established in 1999, Eastwood City is one of Megaworld’s most successful townships that pioneered the “live-work-play” lifestyle concept in the Philippines. It is a testament to how far a developer can do when it comes to marrying urbanization and sustainability.
The township currently has 10 office buildings, mostly occupied by some of the country’s biggest IT-BPO companies, 19 residential condominium towers, three Megaworld lifestyle malls (Eastwood Mall, Citywalk 1 & 2 and Cyber & Fashion Mall) and the Eastwood Richmonde Hotel.
MVP for 2016 VP
MANNY V. Pangilinan has repeatedly said he is not running for President in 2016. But he could be running for Vice President, instead. That is, if Vice President Jejomar Binay got his way.
Speaking to reporters, the former mayor of Makati City confirmed he is considering MVP as his running mate in the 2016 polls—and with good reason.
Considered as one of the most influential men in the country today, MVP is the perfect running mate for any presidential aspirant since he is at the helm of corporations and industries crucial to the Philippine economy: Philippine Long Distance Company, infrastructure giant Metro Pacific Investments Corp., Manila Electric Company, Metro Pacific Tollways Corp., Maynilad Water Services Inc., gold producer Philex Mining and the biggest local power player Manila Electric Company. And with vast holdings in media, health services and various other industries, MVP already wields enough power and financial resources to propel his chosen political allies into the halls of power come 2016.
But MVP is not the only person in Binay’s list of potential bets for VP. Last month he was mouthing off the name of another MP—that of Saragani Representative and boxing legend Manny Pacquiao—as running mate. Another potential mate for Binay is Ate Vi, Batangas Governor Vilma Santos Recto. But like MVP, Vilma has also repeatedly stated that she has no plans of seeking higher office in 2016.
With 2016 just around the bend, the Liberal Party is said to have already begun to raise funds for the campaign kitty of its next presidential standard bearer be it Mar Roxas or Kris Aquino. The LP, too, would benefit immensely having a man of MVP’s stature in its corner.
Let’s put ourselves in MVP’s shoes for a minute. Would it be wise to associate with any single political party in 2016? We think it’s not. And MVP knows it very well that for the sake of his business empire it is best to remain neutral and to stay out of politics.
“There is no political blood that runs through my veins,” MVP said back in October. “I believe I can serve our people better some other way,” he said.
Business and politics do not make good bedfellows. By staying neutral, MVP can play all sides of the fence and emerge a winner regardless of the outcome of the 2016 polls. All he has to do is to spread his bet—put money on the ruling party, on the opposition and the long shots, too. This way, MVP’s business empire is guaranteed to survive and thrive beyond 2016.
(Mis)Taxes For Sari-Sari Stores
“A bad beginning makes a bad ending” ~ Euripedes
Laoag City – The slow and tedious, not to mention expensive, processes of registering a business and compliance with tax requirements with the Bureau of Internal Revenue make Teresita* question her decision to open a sari-sari store to augment her husband’s, a tenant farmer, income. For the privilege of operating a sari-sari store, she has to issue official receipts and deal with the BIR every month, for percentage tax** among others.
“Issue an official receipt for every sale even if the buyer didn’t ask for it, but if the sale is below P25 and the buyer didn’t ask for one, then you don’t have to issue a receipt,” the BIR officer emphasized during the tax briefing at the Revenue District Office No. 1 in Laoag City. “If you don’t issue a receipt, you will be fined P10,000! If your customer asked for a receipt and you didn’t give him, that’s a fine of P20,000!” she warned.
“Everything is very confusing,” Teresita told her seatmate at the briefing. “To travel to the city every month to pay taxes, I will spend an additional P184 for public transportation expense,” she added.
Additional transportation expense is not the only additional costs Teresita has to think of is she wants to open a sari-sari store. Not only will she need to pay 3% of her monthly sales to BIR, but she also have to pay for the cost of printing official receipts. For a farmer and a housewife, just the additional P184 in monthly transportation expense is a lot.
Isn’t there an injustice in this tax requirement for sari-sari stores? Is it really fair to ask them to issue official receipts? Is it fair that sari-sari store owners, who are mostly marginal earners, be burdened with monthly tax compliance? Is it fair that people who barely earn enough to buy for their necessities are burdened with additional costs in exchange for the privilege of owning a sari-sari store?
When asked why this so much tax compliance burden for sari-sari stores, the same BIR officer said that the official receipts will help BIR determine if sari-sari stores are truly earning marginally. She added that it is not enough for sari-sari store owners to declare they are marginal earners, but they have to show BIR receipts that they only sold so much.
I understand the country, through the BIR, needs to increase its tax collections so it can improve basic services to the country, but ensuring that all sari-sari stores report their actual sales and requiring them to pay taxes on these sales every month too much of a burden? The combined annual sales of all sari-sari stores in the country couldn’t possibly equal the one year sales of PLDT which, as of 2013, was P 164.1 billions. So isn’t BIR efforts more aptly rewarded if it focuses its efforts in policing the country’s biggest corporations and ensuring that they pay the right taxes?
The cost of ensuring that every single sari-sari store comply with this rule and the additional benefit, increase in tax collections, are clearly not commensurate. Isn’t there a better, less onerous way for the government to collect taxes from sari-sari stores? With the combined brilliance of the people at BIR, I am sure they can think of something.
The tax rules governing tricycle and jeepney drivers and operators are an example of this brilliance. I don’t know how it is in the other parts of the country, but in the boondocks I call home, our neighborhood tricycle driver earns more than the nearest sari-sari store. Why not require sari-sari stores to pay a fixed amount of taxes every quarter? If Teresita is required to pay P750, which is equivalent to a total sales of P25,000, a quarter in taxes, this would still be preferable to spending almost P600 every quarter in transportation expenses for monthly tax compliance.
What is it with sari-sari stores that they are dealt with differently? Could it be that requiring sari-sari stores to issue official receipt with the threat of thousands of pesos in fines if they don’t is a sign of a wider epidemic? Is this the beginning of the slow death of common sense in BIR?
What will be the next result of this slow death of common sense? Maybe, ask the fish vendor at the wet market to issue official receipts, too?
*Not her real name
**Percentage tax is a computed as 3% of total sales and is paid monthly to the BIR
Liza M. Gaspar is a wealth coach and personal finance enthusiast. She also volunteers for the Rotary Club of Makati McKinley (rcmmckinley.org) and the Gerry Roxas Leadership Awardees (grlawardees.org). Engage her in a discussion about anything you fancy at http://www.thegirlninja.com, liza@thegirlninja.com or www.facebook.com/annalizagaspar
In The Future, People Will Bring Pot To Dinner Parties Instead Of Wine
If the support for marijuana legalization continues to rise, in the near future you might bring a bag of your favorite cannabis to a dinner party, rather than a bottle of wine.
That’s according to a new study from online legal resource Avvo, which found that 70 percent of the more than 2,000 consumers surveyed in Colorado and Washington — where marijuana has been legalized for recreational use — believe that marijuana consumption will become such a routine part of their lives that they’ll bring it along to something as regular as a dinner party.
The survey — which only included people who used Avvo.com in the past year — found that a strong majority of residents in Colorado and Washington are in support of legal weed businesses opening up in their neighborhoods. Sixty-seven percent of those surveyed in Colorado and 71 percent of those in Washington said they were in favor, with 43 percent planning on making a marijuana purchase in the future.
There was some concern from residents in both states that legalization could increase access to marijuana for kids, with 43 percent saying they were “very worried” about this notion. Forty-two percent of those surveyed where “very concerned” about the possibility of more people driving under the influence of marijuana.
The poll echoes similar positive sentiments from a recent survey from Public Policy Polling, which showed that Colorado voters are even happier about marijuana legalization after the first few months of sales.
Marijuana enthusiasts bought a lot of pot in the first month that recreational weed was legal in Colorado — several dozen recreational marijuana dispensaries collectively generated more than $14 million in January.
Just this month, Washington state regulators issued the first legal marijuana business license in the state. The first Washington shops selling retail weed are expected to open later this year.
“As the growing number of states with marijuana-legalization ballot initiatives indicates, pot is gaining social acceptance across a wide swath of demographics, even with shared concerns about kids having great access to the drug,” Leigh McMillan, vice president of marketing and research at Avvo, said in a statement. “Somewhat akin to the social movement after the end of prohibition, legalized marijuana will likely follow a similar trajectory as cannabis becomes socially accepted and new businesses emerge.”
Currently, 20 states and the District of Columbia have legalized marijuana in some form, with about a dozen other states expected to join their ranks in the coming years. (Matt Ferner/Huffpost)
RP Posts Historic Rice Growth
Despite strong typhoons during the last half of the year, Filipino farmers were able to produce a total of eighteen point forty four million metric tons (18.44 million MT) of palay in 2013.
“The highest ever recorded in Philippine history.”
This was according to Agriculture Secretary Proceso J. Alcala who led the recognition and awarding of top producers of palay via the National Rice Achievers (NRA) awards held at the Newport Performing Arts, Resorts World Manila, Pasay City, on March 14, 2014.
Although three percent short of the 100% rice production target, overall yield was posted at 97% based on a 20.04 million MT target.
Alcala commended the local chief executives of rice-producing provinces, municipalities and cities for continuing to partner with the government in its drive to attain food self-sufficiency. He also expressed his gratitude to farmers and irrigators associations, and agricultural technicians for their invaluable contribution in attaining the historic feat.
“We value your role in ensuring safe, nutritious, affordable, and sufficient supply of food for the Filipino people,” he said.
He also challenged the provincial governors to implement programs that will increase farmers’ production and income.
In addition, he campaigned for the integration of Good Agricultural Practices (GAP) in rice to improve the quality of palay in preparation for intense domestic and global competition, as well as the use of appropriate modern technologies to boost overall production.
Alcala reiterated President Aquino’s directive on his 2nd State of the Nation Address: “Ang gusto nating mangyari: Una, hindi na tayo aangkat ng hindi kailangan. Ikalawa, ayaw na nating umasa sa pag-aangkat. Ang isasaing ni Juan dela Cruz, dito ipupunla, dito aanihin, dito bibilhin.”
A total of P117.42 million (M) worth of project grants and cash prizes were given out to the 2013 NRA awardees consist of 12 provinces, 48 municipalities, 10 Irrigators’ Associations (IAs), three Small Water Impounding System Associations (SWISAs), and 496 Agricultural Extension Workers (AEWs). Each province received P4 M worth of project grant, while municipalities received P1 M worth of project grants. The IAs and SWISAs each received P1 M and P500, 000 respectively, while AEWs were given P20, 000 cash prize each. (Marlo Asis/Oda Rodriguez, DA-AFID)
DTI Welcomes Indian biz Mission to PH
The Department of Trade and Industry (DTI) recently received an Indian business mission to the Philippines that intends to explore potential business opportunities, and possibly locate and expand their operations in the country.
During the mission member’s courtesy call, Domingo noted the resurgence of the manufacturing sector in the Philippines, and the growth of capital formation in the gross domestic product (GDP) by 18 percent.
The mission was organized through the Philippine Trade and Investment Center (PTIC) in New Delhi and the Federation of Indian Chambers of Commerce and Industry (FICCI).
Domingo also noted that this mission is his second meeting with the FICCI. The first was during the First India-ASEAN Business Fair and Business Conclave in New Delhi, India in March 2011.
The FICCI is the oldest and largest top business organization in India. The history of FICCI is interwoven in India’s struggle for independence, industrialization, and emergence as one of the rapidly growing economies.
The FICCI has members from India’s corporate sector, including multi-national corporation (MNC), and enjoys an indirect membership of over 250,000 companies from various regional chambers of commerce.
“India is a huge market. The distribution is excellent and you just have to find the right partner,” said Kapil Rampal, deputy head of the delegation and director of the Ivory Education Pvt. Ltd., during the DTI business forum on doing business in the Philippines.
Rampal also mentioned investment interests in pharmaceuticals, bio and thermal energy (From Rampal’s presentation), motorcycles and auto parts, mining, infrastructure, and space and defense related industry.
Rampal added that the possibilities are more than enough, and suggested to look at possibilities of collaboration and be competitive at the global level.
During the business forum, Bureau of Export Trade Promotion (BETP) Director Senen M. Perlada said that both countries can do so much, and noted that Philippine exports to India only accounted for 0.54 percent of Philippine total exports in 2013.
Total trade between the two countries grew by 8.7 percent, export by 8.6 percent, and import by 4.8 percent from 2008 to 2012, according to BETP data.
Perlada also mentioned possible products for promotion in India such as motor vehicle parts, electronic components, sanitary articles of paper (i.e. diaper, toilet paper), personal care products, high-end furniture, and garments.
Likewise, Board of Investments’ (BOI) International Marketing Department Director Angie M. Cayas mentioned the following sectors for promotion to India: public–private partnership (PPP) projects, information technology and business process management (IT-BPM), tourism related investments, and other areas of investments such as the Special Investor’s Resident Visa (SIRV) and the Retail Trade Liberalization Act of 2000, particularly categories B and D.
In an interview, PTIC in New Delhi Commercial Attaché John Paul B. Iñigo said that the delegation is happy, and anticipates another group coming to the Philippines in the next six months.
The 14-member business delegation is composed of companies from sectors such as agriculture, hotel, hospitality, education, infrastructure, airport, food products and textile.
At present, the following Indian companies have presence in the Philippines: Aditya Birla Minacs Philippines Inc., Hinduja Global Solutions Limited, L&T Infotech, Biostadt India, Lupin Ltd., State Bank of India, The New india Assurance Co. Ltd., Wipro BPO Phils. Ltd., Infosys BPO Ltd., Zydus Cadila, Claris Lifesciences Ltd, Tata Consultancy Services, Infosys Technologies, Wipro, Cognizant, HCL Technologies, Genpact Intelenet Global Services, Tech Mahindra, Aegis Ltd. (People Support), WNS Global Services, Syntel Inc., Apatech Ltd., Headstrong, Interglobe Technologies, Virtusa, and Tata Motors.
OFW Remittances Boost Economy’s Outlook
Buoyed by surging remittances from Overseas Filipino Workers (OFWs), consumer sentiment improved moderately in this year’s first quarter, raising prospects of better times ahead.
Based on the Bangko Sentral ng Pilipinas (BSP survey, overall confidence index (CI) showed an upbeat trend because of some positive indicators spawned by a resilient economy.
These range from availability of more jobs to increase in the number of employed family members and the emergence of more investment prospects.
Consumer confidence is measured using three indicators–economic conditions of the country, family financial situation and family income.
By income group, consumer sentiment was mixed with respect to their views on family finances and income.
The low-income group showed a consistently more favorable outlook, but the middle-income group’s outlook weakened, but turned more bullish for the next quarter and the year ahead.
In the same BSP survey, the high-income group had a less upbeat outlook but anticipated financial conditions to improve in the next twelve months. Across income groups, confidence on the economic condition of the country improved.
The survey results also showed that the number of households with savings continued to pick up at 28.9 percent in Q1 2014 compared to 26.2 percent in the previous quarter.
Consistent with the higher spending outlook on basic goods and services in Q1 2014, consumers anticipated higher inflation in the year ahead. They expected the inflation rate to settle at 8.4 percent compared to 7 percent in Q4 2013. This indicates that inflationary expectations could be stronger in the next 12 months.
Respondents are also of the view that the peso would depreciate against the US dollar in the next 12 months. Their perception could have been influenced in part by the recent weakening of the peso against the dollar.
Of the 560 households included in the BSP survey that received OFW remittances in Q1 2014, 97 percent used the remittances that they received to purchase food.
More than two-thirds (68.9 percent) of the OFW households allocated part of their remittances for education, 62.9 percent for medical payments and 45.9 percent for debt payments.
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