boc sets 2014-2015 reform targets€¦ · 22.05.2014 · boc sets 2014-2015 reform targets ... will...

BUSINESS

Philippine ANALYST May 2014

32BUBUBUBUSISISISINENENENESSSSSSSSBUSINESS

BOC sets 2014-2015 reform targetsThe Bureau of Customs (BOC) has set targets till the middle of next year as part of reforms to combat corruption and smuggling. Targets include the pre-shipment inspection of all imports and the implementation of a fully-electronic, paperless system.

The targets were laid out in a BOC briefi ng with various business groups last April 27. BOC Commissioner John Sevilla said that their current efforts are all about

putting in place systems and infrastructure which should have been done a long time ago. Starting June this year, the BOC will implement the advanced cargo clearance scheme (or pre-shipment inspection of all imports), a customer service department, the maximum use of x-ray, increased public disclosure, high-profi le enforcement actions, special procedures for sensitive imports, and permanent legal basis for overtime pay.

Commissioner Sevilla said that the advanced cargo clearance scheme will address several irregularities in shipment inspection, including smuggling, and also accelerate shipment release. The commissioner said that out of every 100 alert orders issued by the BOC, only 18 are problem-free. Checking of documents will be extended from bulk and break bulk cargoes to containerized cargoes. According to Commissioner Sevilla, once the scheme is implemented, importers will spend between $100 to $150 per container, depending on the commodity and the location.

Additional reform targets by the BOC include: a vessel tracking system; airport x-rays; paperless formal entries; and the Enhanced National Single Window, all to be implemented by December this year. By June 2015, the BOC wants to fully implement electronic paperless transactions within the bureau. Other targets by next year include: a single centralized assessment service; a single, centralized valuation database; sale or disposition of abandoned, seized or forfeited goods within 2 months of resolution of legal proceedings; fully electronic record keeping for customs bonded warehouse; a

revised operating manual; and key performance indicators for processing and clearance, examination of alerted shipments, resolution of valuation disputes and resolution of seizure cases.

In his Philippine Daily Inquirer column on May 22, 2014 entitled “Is There Reason to Hope?”, Mr. Peter Wallace said that a fully electronic, paperless system is the most important and the most achievable among the BOC reforms, and should be backed up with a simple, centralized assessment service and valuation database. Mr. Wallace said the challenge lies on the database of 8,000 tariff items to be coded once full computerization is planned. There is also a noticeable discord between the BOC’s effort to digitalize and the other agencies’ failure to upgrade their computer systems. Thus there is a need for a Department of Information and Communications Technology (DICT) to “ensure an integrated, holistic system within the government”.

The advanced cargo clearance scheme will address several irregularities in shipment inspection, including smuggling.

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Commissioner Sevilla said that the BOC has experienced positive revenue growth in the past years, from P82 million in 1993 to P305 million in 2013. He also highlighted some achievements of the bureau under his leadership, including a revamped accreditation system for brokers and importers, monthly disclosure of BOC consumption entries data, regular disclosure of weighted average dutiable values for all imports, reference pricing for steel and resins, an investigation against 65 examiners and appraisers, high-profi le raids and seizures, and the restriction of rice imports without import permits. With the reforms being implemented, the BOC is taking some necessary steps to reorient its corruption-tainted image. But it may need a much more drastic approach if real improvement is to be achieved.

PH hoping to get U.S., EU trade preference

The Philippine government is planning to push for a bill in the United States (U.S.) Congress that will grant trade preferences for Filipino products especially those made in areas devastated by Typhoon Haiyan and Mindanao. Meanwhile, the country is hoping the European Union (EU) will grant its application for the Generalized Scheme of Preferences Plus (GSP+) that will also allow the country to enjoy more tariff reductions for products entering EU.

The Department of Trade and Industry (DTI) is conducting a study for a trade bill that will give reduced tariff or duty-free entry of Filipino products to the U.S. The bill is intended to encourage businesses to set up operations in Visayas and Mindanao to provide jobs to help in the rehabilitation of typhoon-stricken areas and fuel the economy of the future Bangsamoro. The U.S. currently has the world’s largest economy and is the country’s 2nd largest trading partner after Japan. In 2013, U.S. imports from the Philippines reached $9.3 billion. Philippines’ imports from the U.S. amounted to $6.7 billion last year. The Philippines is U.S.’ 36th largest trade partner.

While, the government has not yet announced the full details (title, products included, etc.) of the bill pending the completion of the study, DTI is optimistic the proposal would receive strong support from the U.S. legislators. However, the government said they will have to wait for the next Congress (114th) which will convene in January 2015 to push for the bill as the U.S. government is currently preoccupied with its many other domestic and international issues.

DTI said that the government is planning a minimum of 7 to 10 years of trade preference. Also, it said that the bill’s scope will be wider than the garments-focused Save Our Industries Act (SAVE Act) which stalled in the U.S. Congress after its primary sponsor passed away in 2012. SAVE Act is a trade legislation fi led in 2009 which sought duty-free access of Filipino textiles and apparel to the U.S. The government has decided to put aside plans to look for a new sponsor and refi le it to give way for the new trade bill. However, it stressed that they will continue to push for SAVE Act as it offers opportunities to create more jobs in the garment industry in the country.

Meanwhile, the Philippines is hopeful the EU will grant its application for the EU GSP+ by September which is expected to allow the country to enjoy more tariff reductions for products entering the EU. Previously, the Philippines was a benefi ciary of the regular GSP, which covers 6,209 products with 2,442 products subject to zero duty and the rest with low tariffs. The Philippines’ GSP expired in December 2013 so it applied for GSP+ in February. GSP+ is an expanded version of GSP which covers 6,274 products all at zero duty. EU is currently the largest foreign investor in the country with €7.6 billion mostly in the areas of energy, manufacturing, logistics and information technology. There are currently 600 European companies in the country employing about 400,000 Filipinos. EU projects it will progress steadily through long-term investments aiming to double their foreign direct investments in the next 5 years.

PH seeks free trade agreements with EU, EFTA

The Philippine government moves to clinch 2 free trade agreements (FTAs) with the European Union (EU) and the European Free Trade Association (EFTA). However, the EU requires the Philippines to further liberalize its economy and allow more foreign competition for FTA talks to progress.

The Department of Trade and Industry said that an interagency meeting took place to prepare for the next round of scoping discussions with the EU. The scoping talks determine which sectors will take part in the FTA. The DTI says it will end the scoping talks by the yearend (maybe). The department added that a joint cooperation agreement with the European Free Trade Association (EFTA) will be signed soon to start the formal negotiation for a separate FTA.

There is a noticeable discord between the BOC’s eff ort to digitalize and the other agencies’ failure to upgrade their computer systems.

DTI said that the government is planning a minimum of 7 to 10 years of U.S. trade preference.

EU is currently the country’s largest foreign investor with €7.6 billion and they aim to double it in the next 5 years.

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The Department of Trade and Industry (DTI) sent a delegation to Brussels on November 2013 to continue technical discussions on the Philippine - European Union (EU) FTA. The talks between the Philippines and the 28-member EU began in 2009 when EU failed to clinch a regional agreement with the Association of Southeast Asian Nations (ASEAN) bloc mainly because of political differences with Myanmar. Since then the EU has shifted to a bilateral approach in the negotiations and started talking to individual members of the ASEAN. Currently, only Singapore holds a bilateral FTA with EU, which was signed in December 2012. Aside from the Philippines, the EU is also negotiating FTAs with Malaysia, Vietnam and Thailand.

Meanwhile, initial negotiations for another trade agreement this time with the European Free Trade Association (EFTA) began on the 1st quarter of 2014. The DTI has already completed the necessary impact studies and consultation with stakeholders and is expecting to sign a joint declaration which marks the beginning of the initial stages of negotiation with the 4-member bloc. The EFTA is composed of Switzerland, Norway, Iceland and Liechtenstein, European countries that opted not to join the EU. EFTA has existing FTAs with Hong Kong, China, South Korea and Singapore. EFTA is also negotiating FTAs with India, Indonesia, Malaysia and Vietnam.

A BACKGROUNDER ON THE PH-EU/AFTA FTAs

Source: “PH eyes free trade agreements with EU,” from the Philippine ANALYST, December 2013 issue.

Fish, crustaceans, mollusks and other aquatic invertebrates

Lac, gums, resins and other vegetable saps and extracts

Animal or vegetable fats and oils

Sugar products

Tabacco products

Inorganic chemicals

Soap

Straw and esparto manufactures

Other vegetables textile fi bers, paper yam and woven fabrics

Clothing apparel and accessories, knitted

Umbrellas

Copper

Electrical machinery and equipment

Toy and sports parts and accessories

Edible fruit and nuts

Vegetable products

Meat, fi sh and crustacean preparations

Vegetable, fruit and nut preparations

Ores, slag and ash

Fertilizers

Wood and wood products

Pulp of wood or of other fi brous cellulose materials

Special woven fabrics

Clothing apparel and accessories, not knitted

Prepared feathers

Tin

Ships, boats and fl oating structures

Commodities not specifi ed according to kind

PHILIPPINE EXPORT COMPETITIVE ADVANTAGE

Customs and administrative entry procedures

Country of origin labels

Practice of requiring documentation, other than those required for customs purposes (import licensing)

Customs valuation/pricing

Technical barriers to trade

Traceability or product tracing (incurs high compliance cost)

Eco-labelling (incurs high compliance cost especially for developing countries)

Sanitary and phyto-sanitary measures (SPS)

EU’s implementation and enforcement of food safety standards to exporting country (costly for small exporters)

EU’s required 0.02 parts per million (ppm) in lead content in tuna and other fi shes for ASEAN countries

Use of Hazard and Critical Point (HACCP) method (not affordable to SMEs)

High cost of compliance to standards

Limited trade infrastructure

Inappropriate and uncompetitive domestic policies

NON-TARIFF MEASURES THAT STILL NEED TO BE ADDRESSED IN THE PH-EUAFTA

YEAR PH EXPORTS TO EU PH IMPORTS FROM EU TOTAL TRADE2009 5,566 4,087 9,653

2010 7,492 4,985 12,477

2011 8,981 5,593 14,574

2012 6,641 6,215 12,856

2013 6,804 7,618 14,422

PH-EU BILATERAL TRADE (in million dollars)

YEAR PH EXPORTS TO EFTA PH IMPORTS FROM EFTA TOTAL TRADE2009 61 250 311

2010 114 358 472

2011 285 338 623

2012 404 335 739

PH-EFTA BILATERAL TRADE (in million dollars)

Source: Bureau of Export Trade Promotion, DTI.

Source: “European Union, Trade in goods with Philippines”, European Commission.

Source: Philippine Institute for Developmental Studies (PIDS).

Source: PIDS

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The EU is yet to see signs that the Philippines is willing to liberalize investment, services, public procurement and competition to foreigners.

In a series of reports assessing the impacts of a PH-EU FTA, the Philippine Institute for Development Studies (PIDS) determined 28 export products where the Philippines has a competitive edge against the EU (see list). The PIDS said that the country has a greater competitive advantage on agricultural products compared to manufacturing goods. Meanwhile, the EU’s strength relies on its manufacturing exports. Should a free trade agreement materialize between the 2, the PIDS recommends developing the country’s offensive interests on agricultural goods while providing safety nets to disadvantaged products.

The PIDS also said that a PH-EU FTA will also be positive for the fi sheries sector. The FTA will also help in improving the gross domestic product, increasing real labor wages and real capital returns, reducing prices of goods, and reducing poverty especially in the rural area and those far below the poverty threshold. The institute also said that the PH-EU FTA is advisable since potential trade frictions are low, although certain non-tariff measures should still be removed or relaxed if the Philippines wants to gain the upper hand in the FTA (see list). FTA talks should also include provisions on resource and environment management since it entails increased natural resource extraction.

Meanwhile, EU Ambassador to the Philippines Guy Ledoux said that the scoping talks between the Philippines and EU will only be completed if the Philippines shows commitment to open up the economy. Ambassador Ledoux said that the EU is yet to see signs that the Philippines is willing to liberalize investment, services, public procurement and competition for foreigners. “These discussions are constructive (and) show a mutual interest for deeper commercial engagement and progress is being made,” the ambassador added.

Efforts to conclude the talks this year will be in vain if the EU’s condition holds, since the Congress just started deliberating on a house resolution which aims to ease the constitution’s restrictive economic provisions last month, and the president is still resisting the review (although may be softening a little). Business groups said the FTA should be signed before 2016 lest the country will be left behind by Southeast Asian nations with similar agreements.

The 1987 Philippine Constitution sets restrictive limits on foreign participation in various areas such as ownership of land, use of natural resources and public utility procurement (see table). In particular, foreign ownership of public utilities is limited to 40% while only 30% is allowed for educational and advertising institutions. Restrictions are also set in banking and fi nance, telecommunications, mass media and real estate.

Article XII. National Economy and Patrimony

Section 2. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of whose capital is owned by such citizens…

Section 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualifi ed Filipinos… Section 11. No franchise, certifi cate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens.

Article XVI. General Provisions

1. The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens…

…2. Only Filipino citizens or corporations or associations at least seventy per centum of the capital of which is owned by such citizens shall be allowed to engage in the advertising industry.

The participation of foreign investors in the governing body of entities in such industry shall be limited to their proportionate share in the capital thereof, and all the executive and managing offi cers of such entities must be citizens of the Philippines…

Article IV. Education, Science and Technology, Arts, Culture and Sports

Section 4. Educational institutions, other than those established by religious groups and mission boards, shall be owned solely by citizens of the Philippines or corporations or associations at least sixty per centum of the capital of which is owned by such citizens. The Congress may, however, require increased Filipino equity participation in all educational institutions. The control and administration of educational institutions shall be vested in citizens of the Philippines.

No educational institution shall be established exclusively for aliens and no group of aliens shall comprise more than one-third of the enrollment in any school. The provisions of this sub section shall not apply to schools established for foreign diplomatic personnel and their dependents and, unless otherwise provided by law, for other foreign temporary residents…

OWNERSHIP RESTRICTIONS IN THE 1987 CONSTITUTION

Source: 1987 Constitution

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U.S. plans to import more PH mangoes

The United States will allow the import of more Philippine mangoes to their territories if the Philippines gets rid of pest infestation in certain production areas.

Mango industry representatives have until June 9 to answer to the U.S. Animal and Plant Health Inspection Service (APHIS)’s condition to get mango-growing regions of the Philippines free of mango seed and mango pulp weevils. If the condition is met, 4 of these areas will be allowed to export their products to the U.S. These will come from major production zones including Pangasinan, Zamboanga Del Norte, Batangas, Cebu, Ilocos Norte, North Cotabato, and Iloilo. Currently, only Guimaras mangoes are allowed to export to the U.S. and its territories.

A Washington accreditation team from Washington will be coming to Manila to assess whether the Philippine mango varieties are pest-free. The accreditation will include the review of the protocol and work plan, as well as the sanitary and phytosanitary (SPS) compliance in the growing of the mangoes. The APHIS

Although the possibility of greater exports is a welcome development, there is still a need to raise the industry’s productivity.

recommended a pest-specifi c irradiation dose of 165 Gy to tackle the infestation. Mangoes from production areas other than those mentioned will also be tested but, once certifi ed, will only be allowed to be exported to Guam and Hawaii.

Additional mangoes from the Philippines will only represent a negligible stake in the total U.S. imports, thus additional quantity is allowable. The Philippines exported 42,000 lbs. of mangoes to the U.S. in 2011, which is considered small compared to the amount of mangoes Latin American countries exported.

The announcement came at the same time the U.S. Federal Aviation Authority and the International Civil Aviation Organization upgraded the Civil Aviation Authority of the Philippines (CAAP)’s air safety rules to Category One. This is a welcome development as this will allow fl ights to more U.S. territories. Fresh mangoes are delivered only through air because of their short shelf life. This will also reduce the transportation cost of exporters with mangoes delivered directly to areas where demand is high.

The Department of Agriculture (DA) said they are eyeing added exports not only to the mainland U.S. but also to military bases and commissaries which are closer to the country. The department added that although the possibility of greater exports is a welcome development, there is still a need to raise the industry’s productivity. The DA said the current mango production is not enough to meet the demands of local mango processors and foreign export markets. The department is hopeful that once the U.S. approves the export of more mangoes, more investments for the industry will come in.

Mango production for 2013 amounted to 815,791 metric tons (MT), 6% higher than the 768,234 MT produced in 2012 but 19% lower than the production a decade ago (see chart). Mango is next to pineapple and banana as the most exported fruit, although its value has been dwindling through the years. Mango exporters earned $11 million in export revenues in 2013 (down 28% from its 2012 value) (see chart). Major importers of Philippine mangoes include Japan, Hong Kong, the U.S. and South Korea.

Chinese fi rms said to be bullish in PH despite territorial row

While Chinese investments in the Philippines are affected by the territorial dispute, Chinese fi rms are apparently still interested in investing in the country given its competitive edge - according to the PCCI.

According to the Philippine Chamber of Commerce and Industry (PCCI), Chinese fi rms consider the Philippines as an ideal investment destination because of its young and skilled population. However, some are apprehensive about entering the Philippine market as tension rises in the West Philippine Sea. Chinese companies want to invest in manufacturing, infrastructure, mining energy, but also in agriculture, one area being to help achieve rice self-suffi ciency through their technology.

600000

650000

700000

750000

800000

850000

900000

950000

1000000

1050000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

MANGO PRODUCTION, 2003-2013 (in metric tons)

0

5000

10000

15000

20000

25000

30000

35000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

PHILIPPINE MANGO EXPORTS, 2003-2013(in thousand U.S. dollars)

Source: Bureau of Agricultural Statistics.

Source: National Statistics Offi ce.

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Due to labor unrest and an ageing population, business operations in China are increasingly becoming more expensive and less attractive for investors. Therefore, investors in China including Chinese businessmen themselves are eyeing elsewhere to invest and the PCCI says the Philippines is one of the options. The Philippine Exporters Confederation (PhilExport) said several manufacturers in China are looking at investing about $500 million (P22 billion) which would employ 3,000 Filipino workers this year. These are Chinese, American and European companies that specialize in garments, housewares, shoes and toys. The Department of Trade and Industry (DTI) says it does not expect the Chinese government to impose any sanctions which may affect economic ties as it will only be detrimental to both countries. But, the probability does, nonetheless, exist.

The country needs to beef up its manufacturing sector if it wants economic growth to be inclusive. Currently, the country is relying too much on the services sector and overseas remittances where growth does not signifi cantly address poverty and unemployment. The manufacturing sector’s current share in the gross domestic product is only 20% employing 3 million workers (8% share). The government wants to bring it higher to 35% similar to its neighbors. So DTI has said they will push for more investments to make the Philippines a manufacturing hub. But the DTI has said this frequently over many, many years without result.

In contrast to these promises, data from the National Statistical Coordination Board (NSCB) shows that approved investments from China to the Philippines reduced dramatically by 40% from $2 billion in 2012 to only $1.2 billion last year. The Philippines values China as a trading partner however with the huge gap in the fl ow of investments, the country needs a breakthrough to end the standoff so it won’t be a deterrent to greater investment. It’s not very likely.

More nonbank fi nancing options needed by Asian SMEs

The Asian Development Bank (ADB) said that small and medium-sized enterprises (SMEs) in Asia face diffi culties in terms of fi nancing because of the strict lending mechanisms of banks. There is a need to have more nonbank fi nancing options in order to further develop SMEs and support “inclusive growth, employment, and the effort to overcome middle-income traps.” Poor fi nancing access signifi cantly limits the growth of these enterprises.

An ADB report entitled “Asia SME Finance Monitor” shows that SMEs in Asia and the Pacifi c fi nd diffi culties in terms of fi nancing because of banks’ risk consciousness. In 2012, SME loans in the region made up 25% of total bank lending, down from the 27% recorded in 2011. ADB highlighted the need for

Due to labor unrest and an ageing population, business operations in China are increasingly becoming more expensive and less attractive for investors.

policy options that can support diversifi ed fi nancing models to serve the needs of SMEs. There are few regulators in the nonbank sector because Asia’s fi nancial system is bank-centered, but this is expected to take a bigger part in SME fi nancing as countries recognize the need to diversify their domestic fi nancial systems (see table). Capital market fi nancing is an example of a diversifi ed fi nancing model that is slowly being developed in Asia.

SMEs are defi ned as enterprises with a generally small workforce and/or low assets. In the Philippines, these are divided into micro, small, and medium-sized enterprises (MSMEs). MSMEs are defi ned by the National Statistics Offi ce (NSO) as those companies with less than 200 employees, while the legislated defi nition used by the Bangko Sentral ng Pilipinas (BSP) or central bank is that MSMEs are those with total assets, excluding land, of less than or equal to P100 million.

The report shows that from 2007 to 2012, SMEs in Asia accounted for 98% of all enterprises and about 66% of the labor force. It also contributed 38% of Asia’s total gross domestic product (GDP) and 30% of the total export value. Because of this, SMEs have been recognized as “the backbone of Asia’s economies” and should be fully developed as they bring inclusive economic growth and pro-poor growth through job creation.

Many governments have policies that promote SME growth such as the Philippines’ MSME Development Plan 2011-2016, Malaysia’s Financial Sector Blueprint 2011-2020, Vietnam’s 5 Year SME Development Plan 2011-2015, China’s Action on Supporting the Development of MSEs, and Indonesia’s National Strategy for Financial Inclusion. However, these are still centered on facilitating bank loans rather than enhancing nonbank and capital market options. An example of this includes the public credit guarantee in Indonesia and Thailand, mandatory lending in the Philippines, and refi nancing schemes in Malaysia (see table).

In the Philippines, the Magna Carta for MSMEs (as amended by Republic Act 9501) requires banks to allocate at least 8% of their loan portfolio to MSEs and at least 2% to medium-sized enterprises, and to have mandatory lending to MSMEs until June 2018. However, some large banks choose to pay the P500,000 annual fi ne for zero compliance rather than to follow the mandate. Financing options in the nonbank sector are mostly through pawnshops and informal lending (with attendant high interest rates), while the Philippine Stock Exchange launched the SME Board in July 2001 for capital market fi nancing.

Initiatives are being done to help the growth of MSMEs in the country. There are currently 3 pro-MSME bills pending in Congress (see table). The government through its midterm plan for the industry has also set primary targets that must be achieved by 2016: (1) create 2 million jobs; and (2) raise the economic contribution of MSMEs to 40% of total gross value added. The central bank has also tried to address the 2 major impediments to MSME lending – lack

SMEs have been recognized as “the backbone of Asia’s economies”.

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Philippine ANALYST May 2014Source: Mines and Geosciences Bureau (2014)

Creating more nonbank fi nancing options for SMEs will encourage the growth of these enterprises.

SMEs create inclusive growth and employment.

BILL AUTHOR STATUS OBJECTIVE

HB 4007 Rep. Rodrigo AbellanosaPending with the Committee on Small Business and Entrepreneurship Development

Exempt MSMEs from VAT and percentage tax

Provide additional incentives to MSME owners

HB 4015 Rep. Winston CasteloPending with the Committee on Small Business and Entrepreneurship Development

Promote more participation from the private sector in the MSME Development Council

Establish a “Negosyo Center” in all provinces, cities, and municipalities under the supervision of the MSME Council

SB 2046 Sen. Benigno Aquino IV Approved on 3rd reading Establish “Go Negosyo Centers” and the Philippine Business Registry Databank (PBRD)

PRO-MSME BILLS FILED IN THE PHILIPPINES

Source: Legislative Information System

COUNTRYREGULATORS AND POLICYMAKERS

SME PROMOTION BANKING SECTOR NONBANK SECTOR CAPITAL MARKETS

Cambodia Ministry of Industry, Mines, and Energy (MIME)

National Bank of Cambodia (NBC)

Ministry of Economy and Finance

Securities and Exchange Commission of Cambodia

China

State Council (SC) China Banking Regulatory Commission

China Securities and Regulatory Commission

National Development and Reform Commission (NDRC)

People’s Bank of China National Association of Financial Market Institutional InvestorsMinistry of Industry and Information

Technology (MIIT)

Indonesia National Team for the Acceleration of Poverty Reduction, Offi ce of the Vice President

Bank Indonesia Financial Services Authority

Financial Services AuthorityCoordinating Ministry of Economic Affairs

Ministry of Cooperatives and SMEs

Malaysia National SME Development Council

Bank Negara Malaysia Securities Commission MalaysiaSME Corporation Malaysia

Philippines

Department of Trade and Industry

Bangko Sentral ng Pilipinas Cooperative Development Authority Securities and Exchange Commission

Micro, Small, and Medium Enterprise Development Council Bureau of Micro, Small, and Medium Enterprise Development

Thailand Offi ce of Small and Medium Enterprises Promotion

Fiscal Policy Offi ce, Ministry of Finance Securities and Exchange Commission

Ministry of Industry Bank of Thailand

Vietnam

SME Development Promotion Council Ministry of Finance

State Securities Commission of VietnamMinistry of Planning and Investment

State Bank of VietnamMinistry of Science and Technology

Ministry of Industry and Trade

REGULATORS AND POLICYMAKERS OF SOME ASIAN COUNTRIES

of collateral and lack of credit information – through the creation of a sound fi nancial infrastructure. This includes:

Credit Information System Act (2008). Mandates the creation of the Credit Information Corporation (CiC) to provide a non-collateral-based credit system.

Signing of the movable collateral framework (2013). The Department of Finance signed the framework that will encourage fi nancial institutions “to accept non-real property assets as security for lending to MSMEs” by 2015.

Creating more nonbank fi nancing options for SMEs will encourage the growth of these enterprises. Because of their huge number, SMEs can make a signifi cant contribution to economy and help provide much-needed jobs, thus also decreasing the unemployment rate so governments need to remove the limitations to the growth of SMEs so that their full potential can finally be maximized.

Source: Asia SME Finance Monitor

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MINING, OIL, & GAS

PECR 5 up for bids

A total of 26 petroleum and coal resource areas are up for bidding in the Energy department’s 5th Philippine Energy Contracting Round (PECR).

The DOE launched on May 9 the 5th Philippine Energy Contracting Round (PECR5) for the exploration of potential coal and petroleum areas in the country. The PECR5 offers 11 areas for oil and gas exploration mostly located in Luzon, and 15 areas for coal exploration, largely in Mindanao (see tables).

The PECR5 off ers 11 areas for oil and gas exploration mostly located in Luzon, and 15 areas for coal exploration, largely in Mindanao.

For petroleum, the submission of applications will start on 2 June 2014 and will end on 27 February 2015 (11:00 AM, PST). For coal, the applicants started submission on 29 May 2014 until 19 September 2014 (11:00 AM, PST). The applications will be opened only after the submission period.

After the opening of applications, there will be a 2-month evaluation period by the DOE Review and Evaluation Committee (REC), which will look at applicants’ compliance with the DOE requirements on legal, technical and fi nancial qualifi cations. The applications are also required to include the proposed work program and economic development. Each criteria has the following weights: work program (40%); fi nancial capability (40%); technical qualifi cations (20%); and legal qualifi cations (Pass/Fail).

The endorsement of winning applicants for coal and petroleum is targeted on 21 November 2014 and 4 May 2015, respectively.

PERC 5 PETROLEUM AREAS MAP

BASIN AREAS

Southeast Luzon Area 1

Masbate- Iloilo Areas 2 & 3

Northeast Palawan Areas 4 & 5

Southeast Palawan Area 6

West Palawan Area 7

West Luzon Areas 8, 9, 10, & 11

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The endorsement of winning applicants for coal and petroleum is targeted on 21 November 2014 and 4 May 2015, respectively.

Meanwhile, Energy Secretary Carlos Jericho Petilla said in his opening message at the offi cial launching ceremony held at the Intercontinental Hotel Manila, Makati City that 3 potential areas for petroleum within the Bangsamoro area were temporarily delisted by the national government. These areas will be put back upon agreement with the Bangsamoro government once it is formed.

Energy officials said among the parties interested in joining the 5th Philippine Energy Contracting Round were: (1) ConocoPhillips, the 3rd largest integrated energy company in the U.S.; (2) ROC Oil’s Malaysian unit; (3) PT Chevron Pacifi c Indonesia, a wholly-owned subsidiary of Chevron and the largest producer of crude oil in Indonesia; (4) Total of France which has a stake in service contract 56; and (5) Petronas of Malaysia. DOE offi cials also said local and international fi rms presently involved in the country’s oil and gas industry were also keen in participating in PECR 5.

The DOE said it will continue to conduct roadshows to draw more investors in PECR 5.

I.T. UPDATE

PERC 5 COAL AREASAREA LOCATION COAL REGION

1 Carmen, Lanuza &Tandag, Surigao del Sur Surigao

2 Tandag &Tago, Surigao del Sur Surigao

3 Tandag, Tago & San Miguel, Surigao del Sur Surigao

4 Butuan City, Agusan del Norte & Sibagat, Agusan del Sur Agusan-Davao

5 Butuan City, Agusan del Norte & Sibagat, Agusan del Sur Agusan-Davao

6 Bunawan, Agusan del Sur Agusan-Davao

7 Bunawan & Trento, Agusan del Sur Agusan-Davao

8 Bunawan & Trento, Agusan del Sur and Bislig City, Surigao del Sur Surigao & Agusan-Davao

9 Lingig &Bislig City, Surigao del Sur Surigao

10 Godod, Zamboanga del Norte and Kabasalan, Zamboanga Sibugay Zamboanga

11 Godod, Zamboanga del Norte and Kabasalan, Zamboanga Sibugay Zamboanga

12 Baliguian & Siocon, Zamboanga del Norte Zamboanga

13 Alicia, Imelda & Payao, Zamboanga Sibugay Zamboanga

14 Imelda, Malangas, Alicia & Payao, Zamboanga Sibugay Zamboanga

15 Maitum, Sarangani Cotabato-Sarangani

Customs computerization to be done by mid-2015

Bureau of Customs Commissioner John Sevilla said the bureau’s computerization will be completed before the end of June next year. It aims to improve the agency’s effi ciency, increase its collection and promote transparency.

BOC Comm. Sevilla said that with the agency’s new system BOC’s transactions will be fully electronic and paperless. There will be no more contact between an importer and a customs employee so transactions will be quicker (and, hopefully, more honest). Also, collection fi gures are expected to increase by at least 1/3. BOC said its top concern is to curb smuggling while revenue only comes next. At present, BOC is designing the IT infrastructure that will digitalize all of the agency’s existing data and eventually put the entire system in place.

Part of BOC’s effort is to also address the lack of computers in the agency. The BOC presently have 3,600 employees but only have about 900 computers. Moreover, these computers have very limited internet access whilst being shared by the employees. BOC said they are aiming at 1:1 employee-computer ratio by September 2014. Quality computers with the best internet access are necessary if IT is to play a central role in the bureau’s reforms.

What the BOC has done so far is focused on increasing transparency. Since December 2013, BOC has made public through its website full details (type of item, amount, duties and taxes paid, etc.) of every customs entry they process.

41BUSINESS


Quality computers with the best internet access are necessary if IT is to play a central role in the bureau’s reform.

The bill creating an E-Commerce Bureau complements the bill creating a DICT.

Also, it has already fi led investigation complaints against 82 employees allegedly involved in corruption. The BOC has also revamped its accreditation system for brokers and importers by demanding that they secure an Importer Clearance Certificate from the Bureau of Internal Revenue (BIR) which allows the agency to track down smuggled goods that eventually end up being claimed as tax deductions by buyers.

As a result, the agency’s collection for the January to April 2014 period increased to P117 billion up by 22% from P96 billion in the same period last year. Comm. Sevilla said the public will soon get used to a standard of service that is signifi cantly faster, better and which gives the public much higher disclosure. Currently, the BOC is inviting “smart and combative people who can take initiatives and turn down bribes” to work for the agency.

Bill creating E-Commerce Bureau fi led in Congress

The bill creating an E-Commerce Bureau in the Philippines was fi led in Congress last February with the aim of making the country an attractive and safe location for electronic commerce. The bureau will be the primary body for the creation and implementation of policies in the industry to make e-commerce in the Philippines globally competitive.

House Bill 3878 known as “An Act Creating an E-Commerce Bureau” was fi led by Representative Wes Gatchalian last February 10. The bill aims to create a bureau attached to the Department of Trade and Industry (DTI) that will “address the burgeoning multifarious activities of the e-commerce industry” in order to make the Philippines an attractive and safe location for e-commerce businesses and activities.

The proposed bureau is a higher level offi ce than the current E-Commerce Offi ce under the DTI. When approved, it will be the primary policy, planning, implementing, and regulating offi ce for the country’s e-commerce industry. According to the bill, the proposed E-Commerce Bureau will have the following functions:

Formulate and implement policies that support e-commerce; Maintain effective competition between market players

and create programs to make the Philippines’ e-commerce globally competitive,

Promote the universal use of electronic transactions in the government and general public;

Conduct research to continuously develop the quality of e-commerce, and foster the expansion of information and communications services in the world;

Maintain statistical data on the industry and conduct investigations in case a complaint related to electronic commerce is fi led by consumers;

Give technical aid to government entities that may request its services; and

Conduct technical audit and establish an effective system on online transactions. The E-Commerce Bureau would be headed by a Director

appointed by the President. Funding for the bureau would come from the current fi scal year’s appropriations under the trade and industry department’s budget. The bill is still pending in the House Committee on Government Reorganization since February 17.

The creation of a bureau that will be the central body in all e-commerce activities to enhance the industry’s security and competitiveness will complement the bill proposing the creation of a Department of ICT. However, the bill is pending in Congress and is still not considered a priority measure. At the Digital Commerce Association of the Philippines Summit last year, the global information technology consulting fi rm AXON IT said that digital commerce activity in the country will rise rapidly in the next 3 to 4 years given the good economic standing of the Philippines. In 2012, about P45 to P50 billion was spent online in the Philippines, recording a 40% growth from 2011. However, this number is still not very high particularly when compared to other neighboring countries that have higher purchasing power. Having an E-Commerce Bureau to create and implement policies is an important factor to help the Philippines’ e-commerce industry to develop and be more globally competitive.

The E-Commerce Bureau aims to make the Philippines an attractive and safe location for e-commerce businesses and activities.

42 BUSINESS


INDUSTRY ACTIVITY EQUITY LOCAL/FOREIGN ZONE

APPAREL AND TEXTILE MANUFACTURES

FEEDER APPAREL CORPORATION Engage in embroidery and printing of all kinds of garments and/or wearing apparel Mactan Economic Zone

N E C MANUFACTURING INC. Manufacture of non-woven fabrics and the fabrication of machines for the production of nano fabrics/textiles

80% - Filipino 20% - Korean Cavite Economic Zone

AUTOMOTIVE TRADE

ISUZU AUTOPARTS MFG. CORPORATION Aluminum die casting of transmission case/cover Laguna Technopark - SEZ

PHILIPPINE IINO CORPORATION Manufacturer of Engine Metal parts for all automotive engine and general purpose equipment

Mactan Economic Zone II - SEZ

PRECISE PARTS COOPERATION (PPCI) INC. Manufacture of casings for automotive parts and components such as wipers and motor components

60% - Filipino 40% - Japanese

First Cavite Industrial Estate - SEZ

SOUHATSU CEBU MANUFACTURING, INC. Manufacture of Door Cables Mactan Economic Zone

TOYOTA AUTOPARTS PHILIPPINES, INC. Manufacture of 614K Transmission Assembly Units Toyota Sta. Rosa - SEZ

YTP-LIMA MANUFACTURING, INC. Automotive wire harness assembly for car models: Mitsubishi EK Wagon 4F45 and Mitsubishi Toppo

Lima Technology Center - SEZ

ELECTRONICS

ACBEL POLYTECH PHILIPPINES, INC. Assembly and test of Lithium-ion battery pack Carmelray Industrial Park II - SEZ

ASTEC POWER PHILIPPINES, INC. Manufacture of Grid-Tie Solar Inverter Power Supply Laguna Technopark - SEZ

ASTEC POWER PHILIPPINES, INC. Manufacture of Variable Speed Driver Platform for Climate Control Laguna Technopark - SEZ

ASTEC POWER PHILIPPINES, INC. Design and Manufacture of Switching Power Supplies specifi c to DELL requirement Laguna Technopark - SEZ

ASTEC POWER PHILIPPINES, INC. Design and Manufacture of 30Kw High Power Rack Power Supply Laguna Technopark - SEZ

ASTEC POWER PHILIPPINES, INC. Manufacture of Compact Switching Transformer for Smart Phones and Tablets Cavite Economic Zone

DX ANTENNA PHILIPPINES, INC. Oroduction of wireless intercom Light Industry & Science Park I - SEZ

EMS COMPONENTS ASSEMBLY, INC. Assembly, testing, inspection of Actuator Pivot Flexible Printed Circuit (APFPC) Laguna Technopark - SEZ

GLOBAL ENGINERY TECHNICIANS, INC. Manufacture and assembly of energy saving products Victoria Wave - SEZ

HARADA AUTOMOTIVE ANTENNA (PHILIPPINES), INC.

Manufacture and assembly of Advance Technology Automotive Antennas and other accessories for export


ICHINOMIYA ELECTRONICS PHILIPPINES CORPORATION Terminal Assembly project Laguna Technopark - SEZ

INTEGRATED MICROELECTRONICS, INC. Assembly of Electronic Toll Collection System in Vehicle Detection and Wireless Toll System Laguna Technopark - SEZ

NIKKOSHI ELECTRONICS PHILIPPINES, INC. Manufacture of Shutter Coil Laguna Technopark - SEZ

OPTOWAVE MANUFACTURING PHILIPPINES INC. Manufacture of Cosmos Holder, TCosmos Yoke, Base and Bobbin 99.8% - Korean Carmelray Industrial Park II - SEZ

PANASONIC PRECISION DEVICES PHILIPPINES CORPORATION

Manufacture of Ferrite Devices such as Sheet Antenna, Ferrite Sheet and Contactless Charger Ferrite Module

Carmelray Industrial Park II - SEZ

PANASONIC PRECISION DEVICES PHILIPPINES CORPORATION Manufacture of BD OPU and OPU with traverse Laguna Technopark - SEZ

PRECISION MICROCIRCUITS, INC. Processing/assembly of Printed Circuit Boards (PCB), electronic and electro-mechanical parts or devices Mactan Economic Zone

TDK PHILIPPINES CORPORATION Camera VCM (Voice Coil Motor) for Smart Phone project Carmelray Industrial Park II - SEZ

TOSHIBA INFORMATION EQUIPMENT (PHILIPPINES), INC. Production of External Drive" Laguna Technopark - SEZ

TOSHIBA INFORMATION EQUIPMENT (PHILIPPINES), INC.

Repair/Upgrading and Warranty Services of Toshiba Solid State Drive (FRC Activity)

Carmelray Industrial Park I - SEZ

TTI LAGUNA PHILIPPINES INC. Production of Flexible Flat Cable 99.99% - Indonesian

Laguna Technopark Annex - SEZ

YEONHO ELECTRONICS MANUFACTURING PHILIPPINES, INC. Manufacture of Connector Assembly First Cavite Industrial

Estate - SEZ

YUMEX PHILIPPINES CORPORATION LED lighting fi xtures, LED lights with lighting fi xtures and others with LED components


PEZA APPROVED PROJECTS

MARCH 2013

43BUSINESS


FOOD AND BEVERAGE MANUFACTURES

PHILIPPINE HAOFENG FOOD CORPORATION (Formerly: Cocostar Import and Export Corporation)

Processing and Canning of Mushroom and Fruits, and Mushroom Growing 90% - Canadian 10% - Filipino


ROCKY MOUNTAIN ARABICA COFFEE COMPANY INC. Processing of Arabica coffee John Hay Special Tourism Economic Zone

VUQO, INC. Manufacture of Playboy Premium Vodka Victoria Wave - SEZ

HOTEL, RESTAURANT, AND LEISURE SERVICES

LUCKY STAR HOTELS AND RECREATION INC. Sheraton Manila Hotel project, including facilities integral to the project, such as food and beverage outlets and recreational facilities 100% - Filipino Newport City CyberTourism

Zone

TRAVELLERS INTERNATIONAL HOTEL GROUP, INC. Tourist-oriented accommodations, including facilities integral to the project such as food and beverage outlet, retail stores and recreational facilities (Maxims II)

Newport City CyberTourism Zone

IT AND IT-ENABLES SERVICES

AFFINITY EXPRESS PHILIPPINES, INC.Graphic design services and outsourcing business, including document creation, vector artwork, image editing, embroidery digitizing, advertisement layout and design for variable data printing

UP Science and Technology Park (North)

FIFTH LEG DATA PRODUCTION INC. IT and IT-enabled services, particularly data mining and analysis services 99.99% - British 6788 Ayala Avenue Bldg.

FISHER-ROSEMOUNT SYSTEMS, INC. - PHILIPPINE BRANCH

Research, design, development and testing of prototypes of electronic power conversion products for use by the global industrial automation sector in such industries as manufacturing, process control, material handling and service automation project

Eastwood City Cyberpark

LUX CORPORATIONProduction and input auxiliary of presentation materials and working CAD drawings; building estimation and scale modeling; and other related services

99.86% - Japanese 0.14% - Filipino Trafalgar Plaza

PHILIPPINE AUTO COMPONENTS, INC.. Center Design and Testing of Instrument Clusters and other auto parts for Original Equipment Manufacturer (OEM) car assemblers project Northgate Cyberzone

MACHINERY AND EQUIPMENT

GLOBAL ECO-LIGHTING SOLUTION INC.Assembly/Fabrication, installation and maintenance of Innovative Lighting System and Fixtures; and Assembly/Fabrication of various steel structures including installation and its maintenance

82% - Japanese 18% - Filipino


MAY & CHRISTE PHILIPPINES INC.

Manufacture of magnetic ballasts, electronic ballasts, transformers, ignitors, compact fl uorescent lamp, LED lamps, LED drivers, and other lighting fi xtures for fl uorescent lamps, high pressure discharge lamps, halogen lamps, LED lamps and other special lamps, including testing of all kinds of lighting devices


NIKKOSHI PHILIPPINES CORPORATION Core Assembly Laguna Technopark - SEZ

TSUKASA ELECTRIC PHILIPPINES INC. Manufacture of geared motor, motor base, coffee mill, welding motor, gear pump, linear motion unit, special motor, check valve and gear 99.99% - Japanese First Philippine Industrial

Park - SEZ

METAL INDUSTRIES

AJUSTEEL MANILA MFG. INC.Manufacture of steel products such as steel blocks for press die and construction materials including round, angular, and H-shape steel pipes and all kinds of related products and merchandise

99.99% - Korean Carmelray Industrial Park II - SEZ

ASAM INDUSTRIES INC. Engage in treatment and coating of metals 92% - Taiwanese 8% - Chinese

Carmelray Industrial Park I - SEZ

B/E AEROSPACE B.V. - PHIL. BRANCH Manufacturing of Sandwich Presses and Toasters, and its component parts for installation

First Philippine Industrial Park - SEZ

CALAMBA SHINEI INDUSTRY PHILIPPINES CORPORATION

Manufacture, assembly and processing of Ultra Super Slim & Ultra Slim parts & components for “eBooks” computer

Calamba Premiere International Park - SEZ

DAWSON CREEK INDUSTRIAL CORP. Manufacture of steel coils 100% - Filipino Mactan Economic Zone

FORTUNECROSS PHILIPPINES, INC. Assembly of molds and jigs, repair of machine used in the production of shaft, screws Cavite Economic Zone

GLOBAL ENGINERY TECHNICIANS, INC. Manufacture of metal and stone storage items and/or combination of metal and stone and other similar activities Victoria Wave - SEZ

ITAKURA PARTS PHILIPPINES CORPORATION Manufacture of stainless and other steel parts and metal components 98% - Japanese 2% - Filipino

Filinvest Technology Park Calamba - SEZ

MANILA AMC MACHINERY, CORPORATION Manufacture of hydraulic fi ttings 99.99% - Japanese Laguna Technopark - SEZ

MECTRON PHILIPPINES, INC. Metal processing (Auto parts and Machine parts) 99.99% - Japanese Lima Technology Center - SEZ

NIHON TRIM INDUSTRIES PHILS., INC. Repair, maintenance and reconstruction of mold of plastic products 60% - Filipino 40% - Japanese Laguna Technopark - SEZ

44 BUSINESS


NITTO METAL INDUSTRY CEBU INC. Manufacture of metal and non-metal plastic products 99.8% - Japanese Mactan Economic Zone II - SEZ

PHILIPPINE ASSOCIATED SMELTING & REFINING CORPORATION (PASAR)

Increase in production capacity of PASAR’s manufacture of copper cathodes/anode, silver/gold dore, sulfuric acid and other by-products

Leyte Industrial Development Estate - SEZ

SAMPO MOLDING AND ASSEMBLY INDUSTRY CORP. Processing of Tool and Dies for Offi ce and Industrial Printer Calamba Premiere

International Park - SEZ

SHIMANO (PHILIPPINES) INC. Manufacture and production of bicycle front chain wheels 99.99% - Singaporean


SHOWA CREATE CEBU INC. Manufacture and export of fl at springs and other metal objects 99.98% - Japanese Mactan Economic Zone

SUMINAC PHILIPPINES, INC. Production of hydraulic/power cylinder First Cavite Industrial Estate - SEZ

TECHNO MOLDPLAS (PHILS.), INC. Production and assembly of injection parts for offi ce and information equipment

80% - Chinese 10% - Japanese 10% - Filipino


TUBOTECH PLUMBING PRODUCTS PHILIPPINES CORPORATION Manufacture/assembly of healthcare and wellness products Laguna International

Industrial Park - SEZ

MISCELLANEOUS MANUFACTURES

CEBU SHIN KOWA, INC. Manufacture of Xenon Tubes 99.98% - Japanese Mactan Economic Zone

EPIC KAYAKS CEBU, INC. Develop, manufacture, fi nish and repair paddlecraft and accessories such as kayaks and paddleboards 99.99% - American Mactan Economic Zone

EPSON PRECISION (PHILIPPINES), INC.

Re-engineering of production processes of its existing registered projects/operations for the manufacture of terminal printers, printer components, quality checking and inspection of terminal printer parts and design and fabrication of moulds and press metal dies.


FUNAI ELECTRIC PHILIPPINES INC. Manufacture/assembly of inkjet printer 99.8% - Japanese Lima Technology Center - SEZ

NAKAYAMA SEIMITSU MANUFACTURING INC. Manufacture, assembly and wholesale of precision watches made of metal, plastic or other materials 99.87% - Chinese Cavite Economic Zone

SAMSUNG ELECTRO-MECHANICS PHILIPPINES CORPORATION Manufacture of ultra-high chip capacitor Calamba Premiere

International Park - SEZ

SANCHEONG PHILIPPINES, INC. Manufacture of Self-Contained Breathing Apparatus/Gas Mask/Fire Fighter Helmet/Protective Garment/Firehood/Bag 100% - Korean First Philippine Industrial

Park - SEZ

OFFSHORING AND OUTSOURCING SERVICES

ACCENTURE, INC. Business Process Outsourcing McKinley Hill Cyberpark

ACCENTURE, INC. Business Process Outsourcing (BPO) with co-location arrangement with Diageo UK McKinley Hill Cyberpark

ACCESS HEALTHCARE SERVICES MANILA, INC. Call center and BPO services 75% - Indian 25% - Filipino McKinley Hill Cyberpark

AGR OPERATIONS MANILA, INC. Business process outsourcing and IT-enabled services 99.99% - American Asian Star Building

AIG SHARED SERVICES - BUSINESS PROCESSING, INC. Business processes outsourcing (BPO) services Gateway Tower

AIG SHARED SERVICES - BUSINESS PROCESSING, INC. Business processes outsourcing (BPO) services The Paragon Corporate

Centre

ALERE PHILIPPINES, INC. Call center operations94% - Swiss 4% - Filipino

2% - AmericanW Fifth Avenue

ALORICA PHILIPPINES, INC. Inbound and outbound call center management services, specifi cally to take-over the operations of Alorica Pacifi c Rim Inc. Cebu I.T. Park

ALORICA PHILIPPINES, INC. Inbound and outbound call center management services, specifi cally to take-over the operations of Alorica Pacifi c Rim Inc. SM City Lipa

ANTHEM SOLUTIONS, INC. Managed IT Facility for the BPO/Call Center Operations of Startek Philippines, Inc. eNTEC Building

ANTHEM SOLUTIONS, INC. Call Center operations of Convey Health Solutions Philippines, Inc. Robinsons CyberPark

ANTHEM SOLUTIONS, INC. Managed IT Facility for the Call Center Operations of Startek Philippines, Inc. (SPI) eNTEC Building

ANTHEM SOLUTIONS, INC. Lease of its facility to Alere Philippines, Inc. W Fifth Avenue

ANTHEM SOLUTIONS, INC. Offer facility and support services for the IT-enabled contact center service operations of AFNI Philippines, Inc. Diliman I.T. Bldg.

BEIJING ADAM INTERNATIONAL - PHILIPPINE BRANCH Business Process Outsourcing; and online teaching/tutorial 100% - Chinese Burgundy Corporate Tower

CONVERGYS PHILIPPINES SERVICES CORPORATION Call center operations Eastwood City Cyberpark

CONVERGYS PHILIPPINES SERVICES CORPORATION Additional 300 seats/workstations Cebu I.T. Park

45BUSINESS


CONVERGYS PHILIPPINES SERVICES CORPORATION Call center operations UP Science and Technology Park (North)

CONVERGYS PHILIPPINES SERVICES CORPORATION Call center operations Abreeza Corporate Center

CONVEY HEALTH SOLUTIONS PHILIPPINES, INC. Call center operations 99.99% - Dutch Robinsons CyberPark

CWT PHILIPPINES, INC. IT Management, Support and Monitoring 99.99% - Dutch Zuellig Building

DATACOM IT SYSTEMS (PHIL) INC. Business process outsourcing and call center services 99.99% - Malaysian Eastwood City Cyberpark

DE JANEIRO GLOBAL SOLUTIONS BPO INC. Business process outsourcing (call center) The Enterprise Center

DYNAQUEST TECHNOLOGY SERVICES INC. IT Outsourcing (ITO) and Business Process Outsourcing (BPO) 99.99% - American 6750 Ayala Avenue Bldg.

ELISHA TELECOM GROUP INCORPORATED Software Development, IT Consultancy, and System Integration with focus on Open Source Internet Telephony

50% - British 50% - Filipino Eastwood City Cyberpark

EXIST SOFTWARE LABS, INC. Software development services Cebu I.T. Park

FIRSTSOURCE SOLUTIONS LIMITED Call center operations Cebu I.T. Park

FYFE CORPORATIONBPO - Providing engineering solution in Mechanical and Piping Modeling and Design, Civil and Structural Design and Drafting, and various Drafting Solutions

99.99% - Australian

Multinational Bancorporation Centre

GEMALTO TECHNOLOGIES INC. IT R&D services software and application development 99.99% - Dutch Philamlife I.T. Tower

GLOBAL OUTSOURCING SERVICES PHILIPPINES INC.

Software development, website support, and customer service contact center for website support

99.95% - St. Vincent and Grenadines

E-Square I.T. Park

GLOBAL ZEAL, INC. Software Development using Node.JS (a new Javascript) 99.99% - American JESA Building

HARBOUR IT ASIA - PHILIPPINE BRANCH Technical Support and Software Development 100% - Australian UnionBank Plaza

HINDUJA GLOBAL SOLUTIONS LIMITED Call Center and BPO services Northgate Cyberzone

IBM BUSINESS SERVICES, INC. Business Transformation Outsourcing (BTO) services Naga City Technology Park

IBM SOLUTIONS DELIVERY, INC. IT Application Management UP Science and Technology Park (North)

INFINIT-O LEGAZPI INC. Business Process Outsourcing (BPO) services 99.99% - Chinese Embarcadero de Legazpi

LENDSOFT SOLUTIONS, INC. Software development and e-business solutions 99.99% - British One Corporate Centre

MEDICALL PHILIPPINES, INC. Business process outsourcing (call center operation) Cebu I.T. Park

NEW LEAF MULTIMEDIA OUTSOURCING INC.

Knowledge process outsourcing, conceptualization and overall management of print publications and digital/multimedia products and solutions; market research; and creation, management and maintenance of e-commerce platforms

100% - Filipino King’s Court IT Center

NEXOID CORPORATION Software development and other related services 80% - Filipino 20% - Australian BPI Buendia Center

OMEGA HEALTHCARE MANAGEMENT SERVICES INC. Knowledge process outsourcing services/business process outsourcing services in the healthcare sector 99.99% - American UnionBank Plaza

REALPAGE (PHILIPPINES) INC. Call center operations The Rockwell Business Center

RICOH IMAGING PRODUCTS (PHILIPPINES) CORPORATION

Programming a new application; Modify existing application, support software packages; Network confi guration and support; and Voice communication confi guration and support

100% - Japanese Mactan Economic Zone

SOFTWARE CELLULAR NETWORK LIMITED – PHILIPPINE BRANCH Call center operations 100% - British I-Square Building

SOUND CONNECTION PHILS INC. Business process outsourcing and call center services 99.88% - American JY Square I.T. Center

STARTEK PHILIPPINES, INC. Call center operations eNTEC Building

STREAM INTERNATIONAL GLOBAL SERVICES PHILIPPINES, INC. Call center business JMALL IT Center

SYNNEX-CONCENTRIX CORPORATION ICT-enabled services Eastwood City Cyberpark

TATA CONSULTANCY SERVICES (PHILIPPINES) INC. Information Technology (IT) and Business Process Outsourcing services eNTEC Building

TELEPHILIPPINES INCORPORATED Offer the lease of its facility Alphaland Southgate Towers

TELEPHILIPPINES INCORPORATED Call center operations CBP-IT Park

TELEPHILIPPINES INCORPORATED Additional call center facility The Annex-SM City Davao IT Center

TELETECH CUSTOMER CARE MANAGEMENT PHILIPPINES, INC. Business Process Outsourcing / Call Center Operations Aseana One

TELETECH CUSTOMER CARE MANAGEMENT PHILIPPINES, INC. Business Process Outsourcing / Call Center Operations SM iCITY 2

46 BUSINESS


TRANSCOM WORLDWIDE (PHILIPPINES), INC. Increase in the service capacity of its call center/BPO services activity Transcom Center

VIRTUSA PHILIPPINES, INC. Software, systems, applications and solutions development, maintenance, integration and related IT support services

99.99% - British Virgin Islander McKinley Hill Cyberpark

WEB OUTSOURCING GATEWAY INC.Responsive Web Design, Web Development, Multilingual Website Mobile Apps Development, SEO Website Maintenance, project Management and Administration

60% - Filipino 40% - Japanese One Corporate Centre

WEST CONTACT SERVICES, INC. Call center operations ExportBank Plaza Building

WIPRO BPO PHILIPPINES LTD. INC. Call centers, data encoding, transcribing and processing, directories, etc., and business process out-sourcing e-commerce GAGFA IT Center

WNS GLOBAL SERVICES PHILIPPINES, INC. Business process outsourcing and call center services Eastwood City Cyberpark

OTHER SERVICES

INTEGRATED PACKAGING LOGISTICS MANUFACTURING, INC. Digital printing / cutting Carmelray Industrial Park

II - SEZ

PAPER AND PAPER PRODUCTS

KANEPACKAGE PHILIPPINE, INC.

Production of individual carton boxes (ICB) used as specialized packaging, as well as other related packaging materials such as corrugated cushions, molded cushions, slip/top sheets, tray, sleeves, accessory pads, Danpla box and partitions, etc.


PETROLEUM PRODUCTS

LUBCON LUBRICANTS ASIA PACIFIC INC.Manufacturing and processing of lubricants, oils, sprays, fl uids, agents, solvents, greases, pastes, powders, dispersions, suspensions, emulsions and other related formulations as well as production of solid oil

99.99% - German Laguna Technopark - SEZ

REAL ESTATE AND PROPERTY DEVELOPMENT

BIGLIFT PROPERTIES AND DEVELOPMENT CORPORATION Construct three (3) factory/warehouse buildings 100% - Filipino Hermosa Ecozone

Industrial Park

GC GENTECH CORPORATION Construct a warehouse-type building 100% - Filipino Filinvest Technology Park Calamba - SEZ

HEAVYGOLD, INC. Construct a factory/warehouse building 100% - Filipino Mactan Economic Zone

KH CEBU CORPORATIONLease out 605-square meters of its building space to Cebu Fukushin, Inc., and another 300-square meters of its building space to FX Ninety Eight Corporation

Mactan Economic Zone

MESCO PROPERTY PROVIDERS, INC. Construct two (2) factory buildings 100% - Filipino Light Industry & Science Park III - SEZ

ORIENT GOLDCREST REALTY, INC. Construction and management of six (6) units warehouse buildings Hermosa Ecozone Industrial Park

ORIENT GOLDCREST REALTY, INC. Construction and management of eighteen (18) units warehouse buildings Suntrust Ecotown Tanza

PARK APPAREL, INC. Operate and manage its existing factory/warehouse building 99% - Korean 1% - Filipino Cavite Economic Zone

SOUTH WIN, INC. Additional warehouse facility Laguna Technopark - SEZ

RECYCLING

ASIAN GLOBAL BIO-METAL, INC. Recycling, sorting, dismantling, cleaning of scrap materials as per specifi cation, and packing

68% - Japanese 32% - Filipino MRI Ecozone - SEZ

RENEWABLE PRODUCTS GROUP, INC. Manufacture, remanufacture, testing, repair, assembly and export of various mobile phones and related products and accessories Laguna Technopark - SEZ

RUBBER AND PLASTIC PRODUCTS

IK PLASTIC COMPOUND PHILS. INC. Manufacture of plastic and plastic coloring compound 99.99% - Singaporean Laguna Technopark - SEZ

NANO SMART MATERIAL PHILIPPINES, INC. Manufacture, assembly, and processing of all kinds of industrial plastic sheet, plastic bag with lamination, foam, pallet and recycled resin


NISSHO PRECISION PHILIPPINES, INCORPORATED Production of fabricating fi lm 99.99% - Japanese Greenfi eld Automotive Park - SEZ

OB KOGYO (PHILIPPINES) INC. Manufacture of plastic parts for industrial machines assembly and production 99.98% - Chinese Lima Technology Center

- SEZ

PRIMEPACK TECHNOLOGIES, INC. Injected parts & plastics packaging products/injection molding Light Industry & Science Park II - SEZ

SEIEN RUBBER PHILIPPINES, INC. Manufacture of rubber products such as grommets, connector caps, rubber rings, rubber mounts, plug cups and silicon sheets

People's Technology Complex - SEZ

STORAGE AND WAREHOUSING

BELTONTOTOKU PHILIPPINES, INC. Warehousing/logistics activities 99.99% - Japanese Carmelray Industrial Park II - SEZ

47BUSINESS


CHOEI PLASTIC WORLD PHILIPPINES INC.. Warehousing/logistics support services of neutral plastic materials 99.98% - Chinese First Philippine Industrial Park - SEZ

DAITOH PRECISIONS, INCORPORATED Warehousing and logisctics support services of steel/plastic molded products 99.99% - Japanese Mactan Economic Zone

ELIESEL PHILIPPINES, INC. Warehousing/logistics activities 99.99% - Korean Carmelray Industrial Park II - SEZ

MITSUBA PHILIPPINES CORP. Warehousing/logistics support services of various automotive parts and related products 99.99% - Japanese First Cavite Industrial

Estate - SEZ

NIHON DENKEI PHILIPPINES, INC.Importation of raw materials and semi-fi nished goods and importation of testing and measuring equipment for warehousing and/or simple process at the warehouse facility

97% - Japanese 3% - Filipino Laguna Technopark - SEZ

PARTS PHILIPPINES, INC.Warehousing/logistics services of specialized steel which is a material used for the production of spindle motors for hard disk drives of computers

99.99% - Hong Kong Cavite Economic Zone

WOOD AND CORK PRODUCTS

HOUSE TECHNOLOGY INDUSTRIES PTE. LTD. Wood powder processing Cavite Economic Zone II

48 BUSINESS


LIST OF BOI REGISTERED PROJECTS

APRIL 2014

INDUSTRY ACTIVITY PROJECT COST (IN PHP MILLION)

EQUITY LOCAL/FOREIGN

AGRICULTURE, FISHERY, AND FORESTRY

Negros Golden Pineapple, inc. Producer of Fresh Pineapple 32 50% Filipino 50% Costa Rican

APPAREL AND TEXTILE MANUFACTURE

Comfashions, Inc. Producer of Garments (Ladies' Dresses) 0 100% Korean

ELECTRICITY, WATER, AND GAS

Biliran Geothermal Incorporated Renewable Energy Developer of Geothermal Energy Resources (Biliran Geothermal Project - Pre-development Phase) 1,209 60% Filipino

40% Foreign

DPJ Engineers & Consultants Renewable Enery Developer of 1.0 MW Bulanao Hydroelectric Power Project 113 100% Filipino

Philippine Geothermal Production Company, Inc.

Renewable Energy Developer of Geothermal Resources [(Tiwi) Geothermal Production Field] 0 60% Filipino

40% Foreign

Philippine Geothermal Production Company, Inc.

Renewable Energy Developer of Geothermal Resources [Makiling-Banahaw (Mak-ban) Geothermal Production Field] 0 60% Filipino

40% Foreign

FOOD AND BEVERAGE MANUFACTURES

Coco Davao, Inc. Producer of Coconut Water Concentrate 125 100% Filipino

See's International Food Manufacturing Corporation Producer of Banana Chips 7 100% Filipino

HOTEL, RESTAURANT, AND LEISURE SERVICE

Clybros Merchandising, Inc. Operator of Tourist Accommodation Facility (Parkway Hotel) 25 100% Filipino

IT AND IT-ENABLED SERVICE

Contactdb Incorporated Third-Party Provider of ICT Services 10 100% Filipino

MISCELLANEOUS MANUFACTURE

Unimagna Industries, Inc. Producer of Calf Houses (made of fi berglass and resins) 15 100% Filipino

REAL ESTATE AND PROPERTY DEVELOPMENT

Empire East Land Holdings, Inc. Developer of Low-Cost Mass Housing Project – Mass Housing (Kasara Urban Resort Residences – Tower 1 and Tower 2) 1,506 86% Filipino

14% Foreign

TOTAL 3,040.68

49BUSINESS


DATA INDEX

YEAR-ON-YEAR

GROWTH

YEAR-TO-DATE

GROWTH

Volume of Production Index (VoPI) (2000=100) 103.1 -1.1 -7.9

a. Food 136.2 -3.8 -0.3

b. Beverage 114.3 12.6 7.2

c. Tobacco 5.3 112.0 -12.3

d. Textile 36.5 40.4 10.6

e. Footwear and Wearing Apparel 32.8 -10.6 -12.5

f. Wood and Wood Products 61.7 -23.8 2.9

g. Furniture & Fixtures 739.7 4.0 17.9

h. Basic Metals 98.2 -3.7 -15.1

i. Iron and Steel 119.9 57.3 25.6

j. Non-ferrous Metals 52.1 -68.7 -65.9

k. Fabricated Metal Products 303.4 52.7 33.7

l. Machinery Excluding Electrical 56.6 91.9 34.8

m. Electrical Machinery 87.7 2.7 -4.0

n. Transport Equipment 123.8 14.3 2.4

o. Other Mfg Industries 115.3 3.6 0.6

p. Paper & Paper Products 70.0 8.7 -1.2

q. Publishing & Printing 94.4 148.4 56.9

r. Leather Products 4.0 -4.8 8.4

s. Rubber Products 250.9 17.4 9.2

t. Chemical Products 141.4 -18.3 -45.5

u. Petroleum Products 23.1 -47.4 -16.7

v. Non-Metallic Mineral Products 131.9 -12.2 -11.0

w. Glass & Glass Products 160.3 22.6 7.6

x. Cement 167.2 -1.5 -2.3

y. Misc. Non-Metalic Mineral Products 47.2 -61.0 -54.7

VALUE OF PRODUCTION INDEX (VAPI) (2000=100) 157.8 -0.8 -7.7

AVERAGE CAPACITY UTILIZATION 83.1 -16.9 83.1

DATA YEAR-AGOLEVEL

GROWTH RATE (%)

MOTOR VEHICLE SALES 69,737 57,128 22

PASSENGER CAR SALES 24,824 18,702 327

COMMERCIAL VEHICLE SALES 44,913 38,426 16.8

BUSINESS CLIMATE INDEX

UNIVERSAL AND COMMERCIAL BANK’S LOANS OUTSTANDING TO THE REAL ESTATE SECTOR (P Bn)SEPTEMBER 2013

SEP-2013 % TO TOTALRE: LOAN SEP-2012 % TO TOTAL

RE: LOAN

RESIDENTIAL 188.88 30 142.56 33

COMMERCIAL 438.52 70 286.3 67

MOTOR VEHICLE SALESAPRIL 2014

000

500

0

500

000

500

000

500

000

FDI:BOP CONCEPT US$ Million

INDUSTRIAL PERFORMANCE (2000=100) MARCH 2014

FOREIGN DIRECT INVESTMENTBalance of Payments Concept*; JANUARY- FEBRUARY 2014

LEVEL (US$ million)

SOURCE CURRENT YEAR AGO YEAR-ON-YEAR% CHANGE

TOTAL FDI 1,377 1,829 -24.74

Equity Capital 357.26 791.33 -54.85

Reivested Earnings 131.42 146.33 -10.19

Debt Instruments 887.99 891.64 -0.41

* The BSP adopted the Balance of Payment, 6th edition (BPM6) compilation framework effective 22 March 2013 with the release of the full-year 2012 and revised 2011 BOP statistics. In BPM6, net FDI fl ows refer to non-residents’ equity capital (i.e., placements less withdrawals) + reinvestment of earnings + debt instruments, net (i.e.,net intercompany borrowings).

50 BUSINESS


BUSINESS CLIMATE INDEX

SURVEY ON THE MONTHLY OCCUPANCY RATES & LENGTH OF STAY

HOTEL OCCUPANCY DECREASES TO 67% IN 2012

In 2012, average occupancy rate of hotels decreased to 67.25% from 69.26% in 2011. De Luxe hotels posted the highest occupancy rate with 71.49%, down by 0.93 percentage point from 2011. Standard hotels registered the 2nd highest occupancy rate at 64.82%, which also slipped by 3.48 percentage points. Meanwhile, First Class hotels outranked economy hotels with an average occupancy rate of 58.04%, lower by 4.1 percentage points. Economy hotels had the least occupancy at an average rate of 53.44%, down by 5.14 percentage points in 2011.

1 STRIKE IN JUNE

A strike was recorded in June 2013 which involved 400 workers equivalent to 1,200 man-days lost. Meanwhile, there is a total of 104 notices of strike/lockouts since January. In 2012, 3 strikes were recorded involving 209 workers, which is equivalent to 797 man-days lost. Meanwhile, 184 notices of strike were fi led that year.

LABOR STRIKES

STRIKES DECLARED WORKERS INVOLVED MAN-DAYS LOST (000)

2014 2013 2014 2013 2014 2013

JAN 0 0 - - - -

FEB - - - - - -

MAR - - - - - -

APR - - - - - -

MAY - - - - - -

JUN - 1.00 - 400 - 1,200

JUL - - - - - -

AUG - - - - - -

SEP - - - - - -

OCT - - - - - -

NOV - - - - - -

DEC - - - - - -

TOTAL 0 1 0 400 0 1,200

0

500

1000

1500

2000

2500

3000

3500

4000

MAN-DAYS LOST

0

2

4

6

8

10

12

STRIKES DECLARED

VISITOR ARRIVALS ONLY UP BY 1% IN FEBRUARY

Total visitor arrivals registered in February is 422,631 up by only 1.08% from 418,108 in 2013. Of this total, 2.70% or 11,413 visitors are Filipinos residing abroad.

Korea remained the top source market followed by the U.S. and China. For the period of January to February, visitors coming from Korea amounted to 220,831 (24.98% share). The U.S. market placed 2nd with 131,978 visitors (14.93%) while the Chinese market ranked 3rd with 99,017 visitors (11.20%).

0

100

200

300

400

500

TOURISM ARRIVALS

VISITOR ARRIVALSJANUARY-FEBRUARY 2014

COUNTRY 2014 2013 % CHANGE RANK

KOREA 220,831 241,116 -8.41 1

USA 131,978 120,868 9.19 2

CHINA 99,017 69,610 42.25 3

JAPAN 75,383 73,621 2.39 4

AUSTRALIA 38,009 34,095 11.48 5

CANADA 28,506 25,338 12.50 6

SINGAPORE 27,538 25,800 6.74 7

TAIWAN 24,615 37,921 -35.09 8

UNITED KINGDOM 23,321 18,563 25.63 9

HONGKONG 21,160 23,097 -8.39 10

MALAYSIA 19,741 18,947 4.19 11

GERMANY 15,395 13,774 11.77 12

OVERSEAS FILIPINO 27,203 28,170 -3.43

OTHERS 131,317 123,267 6.53

TOTAL 886,028 856,200 3.48

2012 2011 2012/2011

JAN TO DEC JAN TO DEC GROWTH RATE

De Luxe Hotels

Occupancy Rates 71.49 72.36

Length of Stay 2.92 3.02 -1.20

First Class Hotels -3.28



Standard Hotels -6.70



Economy Hotels 1.06



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