MANILA, Philippines – Lucio Tan-led Philippine Airlines (PAL) announced a new direct international flight from Bohol to South Korea, plus a new domestic route connecting Bohol to Cebu, both launching on Thursday, June 22.

The new international flight will operate from Bohol's capital Tagbilaran, flying to the South Korean city of Incheon without a stopover.

This makes Tagbilaran the 5th Philippine gateway for foreign travelers and provides them with direct access to Bohol's tourist hotspots.

PR2482 leaves Bohol daily at 5:20 pm, while the return flight leaves Incheon at 2:30 am, arriving in Tagbilaran at 6 am.

"Making Tagbilaran a new international gateway provides foreigners with the fastest link to the attractions of Bohol and nearby Visayas cities. Linking international points to sought-after places in the Visayas through convenient connections is the flag carrier's way of catering to the travel needs of our patrons," PAL president and chief operating officer Jaime Bautista said in a statement on Wednesday, June 21.

New Bohol-Cebu route

The flag carrier is also launching a Tagbilaran-Cebu route, the first domestic link to Bohol outside of Manila.

PAL will operate the daily Tagbilaran-Cebu flights via PR2874, departing Tagbilaran at 7 am and arriving in Cebu at 7:30 am. The return flight leaves Cebu at 3:30 pm and touches down in Tagbilaran by 4 pm.

The new route increases the domestic connections of Cebu to 13.

Currently, there are flights from Cebu to Bacolod, Busuanga, Butuan, Cagayan de Oro, Caticlan, Davao, General Santos, Iloilo, Kalibo, Puerto Princesa, Surigao, and Tacloban. – Rappler.com

MANILA, Philippines – The business empire of the country's richest man, Henry Sy Sr, is going forward fast, exactly where President Rodrigo Duterte wants the economy to be.

One of the Philippines' fastest-growing business groups, the Sy's SM group benefits from an economy considered as the best performing in Southeast Asia. (READ: PH economy grows slower by 6.4% in Q1)

It has also grown wiser through the years, as the 2nd generation family members have seen presidents come and go. President Duterte, after all, is the 9th president that the Sy family has to work with since the Sy patriarch started his shoe business in 1958.

What bodes well for the 6 siblings today is that the President has largely been focused on his pet issues such as the war on drugs and terror, leaving the business community to run its own show.

Sy Sr is now 92, and securing his legacy means the 2nd generation Sy family members are navigating not only the political environment, but also the changing tastes of their customers and the growing sophistication and financial muscle of their competitors.

These come hand in hand with laying the groundwork for a smooth transition of the business – made up of the country's largest bank, biggest property developer, and operator of some of the world's biggest malls – to the 3rd generation. (READ: SM Investments shakes up management, prepares 3rd generation)

Visible support

A year into Duterte's 6-year term, the Sys have stayed neutral on the controversies that hound the administration.

Family members have in fact become more visible in joining the other big business groups in events hosted by the President or his Cabinet. Finding strength in the "Philippine Inc." team diffuses the risk of being singled out.   

In state visits, a representative of the Sy family is often part of the President's private-sector delegation. The billionaire's eldest daughter, Teresita Sy-Coson, was part of Duterte's delegation in an Association of Southeast Asian Nations (ASEAN) Summit in Laos in September 2016.

The heir-apparent was also seen during the second round of the "Dutertenomics" forum held on April 26. (READ: Ayala, SM taipans finally at ease over MRT-LRT common station)

Her brother, Hans Sy, was among the business tycoons invited by Malacañang for an intimate dinner with the President in January 2017. He also joined Duterte's state visit to China in October 2016.

Too much is at stake: Real estate company SM Prime Holdings Incorporated recently became the first Philippine company to be valued at P1 trillion. Holding firm SM Investments Corporation (SMIC) is not too far behind.  

But the Sys' support for the administration's priorities and policies has not made them bet all their money on these projects. Instead, they continue to focus on their core businesses: retail, property, and banking. 

Malls in Mindanao, pivot to China

Duterte, a former mayor of Davao City, is the first president from Mindanao, which has received less attention and budget under previous national leaders. Following Duterte's and his economic team's pronouncements to boost investments outside of Imperial Manila, SM in February 2017 announced that it will build 5 new malls in Mindanao until 2020. 

Growing its already extensive network of malls in the Philippines has long been in the decades-long expansion plans of the group. SM Prime currently operates 60 malls nationwide, with a goal to penetrate more cities and towns to capture the growing middle class in the provinces. It aims to increase its malls to 75 by 2018.

By the end of 2017, SM Prime will have 65 malls in the Philippines, with 5 outside the congested Metro Manila scheduled to open in the coming months. These are SM CDO Downtown Premier in Cagayan de Oro, SM Cherry Antipolo in Rizal, SM Center Tuguegarao Downtown in Cagayan, SM City Puerto Princesa in Palawan, and SM Center Lemery in Batangas.

It also has 7 malls in China. SM has been present in China since 2001 when it opened SM City Xiamen mall.

The Philippines' pivot to China and the warming of ties between the two countries is good news for SM. The group currently has 7 malls in China, and it has long expressed interest to increase its presence there to complement revenues sourced from its Philippine business. 

This is despite warnings from some analysts about a continuing economic slowdown in China. "Even with the slowdown, it is still a tremendous opportunity to be there. China is still the number two economy in the world. This is one space I believe we should not miss out," SM Prime chairman Henry Sy Jr said in a press conference last April 25.

The Sy family's property company even plans to start with the pre-selling of its housing project located next to its mall in Chengdu, Sichuan province, by end-2017. (READ: SM Prime, Ayala to defy China's slowdown)

"It's a test project for us to see how the market will respond to an SM Residences development. If we get good sales, we'll do more but within the shopping complex of SM, not stand-alone," SM Prime president Jeffrey Lim had said.

To address the emergence of e-commerce, which is threatening malls' foot traffic, the SM group has taken tentative steps like a partnership with online platform Lazada to sell products from the SM Store and acquisition of a 34.5% stake in 2GO's parent company. "We're happy that in the Philippines, we like socials [as a people] so our malls are centers of the community," Sy-Coson had told a gathering during the 2017 ASEAN Summit in Manila. 

Infrastructure deals

Aside from expanding in Mindanao and China, parent firm SMIC also started participating in some public infrastructure projects. This is alongside the Duterte administration's P8-trillion catch-up initiative in infrastructure.

Unlike other conglomerates, such as Ayala Corporation and Metro Pacific Investments Corporation, the SM group has not been bidding actively for public infrastructure deals.

They have mostly been on the sidelines, with BDO Unibank, which they control, offering to provide financial packages to consortiums taking direct risks in the government's capital-intensive infrastructure projects. That means the SM group's capital remains intact in case the main project proponent has to absorb the costs of political risks, delays, and other issues that usually hound these long-gestating but potentially profitable ventures.   

However, the SM group had submitted two unsolicited proposals: its collaboration with Ayala for a toll-road construction project, as well as its partnership with Solar group's All-Asia Resources and Reclamation Corporation to develop a $50-billion airport and economic zone at Sangley Point in Cavite.

"SM remains very focused on its core businesses. But now that the economy continues to grow, we think infrastructure is going to support our other businesses. This is why we are looking into those possibilities as well," Frederic Dybuncio, chief executive officer of SMIC, told Rappler on the sidelines of a stockholders' meeting in Pasay City early May.

Dybuncio stressed the SM group will only invest in an infrastructure deal if it directly influences the future of their current core businesses, especially foot traffic to their malls. 

For instance, the elevated toll road proposal is meant to provide access to the Mall of Asia (MOA) Complex, one of its biggest integrated property developments. At the 60-hectare complex is a two-storey mall with 700 tenants, 6 office towers, concert grounds, a convention center, a sports arena, and most recently the 347-room Conrad Manila hotel. 

The elevated toll road, to be called the C3 Elevated Expressway (C3EX), would run 8.6 kilometers and start in Sta Mesa, Manila, where it would link to the Skyway Stage 3, and go all the way to the MOA Complex in Pasay City via Makati.

"We don't look at infrastructure on its own because that is not our specialization. For example, this project with Ayala, it is really to bring traffic to SM Mall of Asia. That was really an incentive for us to be part of that project," Dybuncio said.

For the Sangley airport proposal, it would provide traffic to SM developments in Cavite, including its 5 malls there. 

"Our sort of preference or interest will be if it is an infrastructure [project] that is going to help our other developments," Dybuncio said.

Formula works

The Sys' formula – showing support for the current administration's economic policies, focusing on core businesses, and minimizing exposure on regulated operations – has been proven effective for the SM group. The group's financial performance over the past years proves it. 

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Real estate firm SM Prime contributed 39% to the company's income last year, while the banking sector accounted for 37% and SM Retail at 24%.

Its portfolio also includes Belle Corporation, Atlas Mining, the Net Buildings, CityMalls, MyTown, and most recently 2GO Group Incorporated.

Save for banking, gaming, and mining, the SM group is not involved in other regulated businesses, such as telecommunications, power, and water. Even its newest venture, logistics, is broadly unregulated.

For the 10th consecutive year, Henry Sy Sr topped Forbes' list of richest Filipinos, with a 2017 net worth of $12.7 billion.

"As far as the economy is concerned, we have good growth and I think we will continue in the next few years," Sy-Coson said in the conglomerate's annual stockholders' meeting. 

From Carlos Garcia to Duterte and from World War II to the Asian financial crisis, the SM group has indeed stood the test of time. – Rappler.com 

MANILA, Philippines – Five non-life insurance companies have signified their intentions to close down, as some expect they won't be able to comply with future capital requirements, the Philippine Insurers and Reinsurers Association (PIRA) said.

Antonio Roderick Cabusao, member of the public relations and education committee of PIRA, said that 5 companies are ready to shut down operations as they foresee that they won't be able to comply with the P1.3 billion capitalization requirement by the end of this administration's term.

Under the Amended Insurance Code, the capital requirement of insurance companies will increase every 3 years until 2022.

The required minimum net worth is P550 million effective December 31, 2016, P900 million by December 31, 2019, and P1.3 billion by December 30, 2022.

"They've made a voluntary surrender of their license. It's not because they're losing money. There are different reasons. (Some of) the owners thought that, if I were to put in money now to comply with the P550 million requirement, I may be compliant now, but will I be able to comply until 2022, when the requirement is already at (P1.3) billion," Cabusao said.

"Since (they) don't have enough capital (by then), right now, (they'll) just voluntarily surrender. (They're not at a loss right now), it's just that they don't have enough money to comply with the future requirement," he added.

Dennis Funa, insurance commissioner, earlier said that of those that signified that it will close, one company that is sure to close is the Manila Surety and Fidelity Company. 

"It has signified that it will no longer continue its non-life insurance business. So the rest, we will just have to await for the right time, we will be announcing them," Funa said.

To merge or to close down

Meanwhile, 8 companies are ready to merge into 4 companies this year. These will bring down the number of non-life insurance companies by the end of this year to 54 from the current figure of 63. (#RubyPH: Non-life insurance firms prepare for huge claims)

"It does not mean that, since the insurance industry is going down in terms of number of companies, (we) are losing. In fact, we are strenghtening because there's more financial strength," Cabusao said.

Last April, the Insurance Commission (IC) issued new rules governing the voluntary withdrawal or cessation of business by domestic non-lifer insurers, wherein they shall be subject to the control of the IC throughout the entire exit process to ensure that its policyholders are protected.

Under the new rules, an insurance company shall not be considered to have withdrawn from engaging non-life insurance business until it has been officially declared by the IC. 

Prior to the issuance of the rules on voluntary cessation governing non-life insurance companies, companies which seek to voluntary withdraw from the business are only required to apply for a servicing license pursuant to IC Circular Letter No. 2014-14. 

In the approval of an application for voluntary cessation to engage in non-life business, an insurance company is now required to submit a complete proposal, including the timeline for the settlement of its obligations and liabilities to its policyholders and creditors, together with its audited financial statements, and list of liabilities to policyholders and creditors. 

The new rules are not applicable to companies placed under conservatorship, receivership, or liquidation, to those with existing Cease and Desist Order from the IC and those with deficiency in net worth and/or is not compliant with the risk-based capital (RBC) 2 requirement. 

Funa said that the new rules applies only in case the applicant company is compliant with the minimum net worth requirement or with the RBC 2 requirement, whichever is higher. 

“The first step in determining the applicability of the new rules on voluntary cessation is to determine the applicable minimum net worth requirement and the required RBC ratio of the applicant,” Funa said.

"In case the minimum net worth requirement applicable at the time of filing of the application for withdrawal from business is higher than the amount arrived as after the computation of the RBC, then the company would have to comply with the net worth requirement. On the other hand, should the computed RBC be higher than the minimum net worth requirement, then the company should comply with the RBC," he added. 

If the applicant is found to be compliant with the minimum net worth or RBC 2 ratio, whichever is higher, a servicing license shall be issued in its favor. 

Otherwise, a show cause order against the company may be issued, which may result in placing the company under conservatorship, receivership, and ultimately, liquidation. – Rappler.com

MANILA, Philippines – The House of Representatives will conduct a public hearing on the system glitches that affected customers of the Bank of Philippine Islands (BPI) and BDO Unibank.

AKO Bicol Representatives Rodel Batocabe, Alfredo Garbin Jr, and Christopher Co filed House Resolution (HR) Number 1072 on Thursday, June 8.

They want the House committee on banks and financial intermediaries to conduct an inquiry, in aid of legislation, into the "security and stability of bank internal systems in light of the recent BPI internal error."

On June 7, many BPI clients discovered unauthorized transactions in their accounts, which the bank quickly attributed to a system glitch. BPI said the problem would be fixed within the day.  (READ: BPI clients frustrated over service concerns, money woes due to glitch)

BPI shut down its electronic channels, including ATMs, while it fixed the problem. It restored the system past 9 pm on Thursday, June 8. 

On the other hand, BDO Unibank said June 16, that it received reports of "potentially compromised" automated teller machines (ATMs) after some cardholders claimed to have lost money in their accounts.

Watch the hearing live on Rappler. – Rappler.com

MANILA, Philippines – The Bank of the Philippines (BPI) said a total of P46 million was mistakenly withdrawn from the bank when its electronic channels were shut down for 26 hours due to a system glitch.

BPI president and CEO Cezar Consing revealed this while responding to the question of Parañaque City 2nd District Representative Gustavo Tambunting at the House probe into the BPI system glitch and the reported skimming of BDO Unibank’s automated teller machines.

“The amount that was mistakenly withdrawn from BPI totaled P46 million,” Consing said on Thursday, June 22.

“There were mispostings, and because there were mispostings, there was an amount that in some cases that were withdrawn,” he added. 

Joseph Gotuaco, BPI executive vice president for retail banking, added the average misposting for both debits and credits was around P7,000. The highest amount debited was around P1.6 million, and the highest credit pegged at P2.6 million, he said.

BPI's system glitch happened late night on June 6 and lasted until June 8, affecting 1.5 million of the bank's 8 million clients. BPI had to suspend its online and electronic services for a total of 26 hours. 

BPI has since identified the cause as human error by a programmer who had inputted bank transaction data under the wrong dates. (READ: BPI on June 6 glitch: '100% not a hack’)

Consing assured lawmakers, however, that most of the mistaken withdrawals were being returned already. He said most of those affected are the accounts of small businesses. 

“Most of these P46 million are getting paid back; most, if not all,” said the BPI chief said.

“Most of them are with merchants, most of them are with small business because with the way small business accounts work….We’ve talked to the merchants and we are adjusting the numbers one by one,” he added.

In an earlier Senate inquiry into the matter, BPI said it had set up 4 mechanisms to prevent another massive error from happening in the future. – Rappler.com

LE BOURGET, France – Airbus and Boeing wheeled out the usual round of order announcements at the Paris Air Show on Wednesday, June 21, but alongside the big ticket purchases, the aerospace rivals are also eyeing the lucrative maintenance and servicing market as they seek to boost growth.

Boeing finalized an order for 3 787 Dreamliners to Israeli carrier El Al and inked a memorandum of understanding with leasing company Air Lease Corporation for 12 737 MAXs, while Airbus announced $1.5 billion in orders for Hungarian budget carrier Wizz Air and Portuguese charter airline Hi Fly.

Away from the order books, Airbus and Boeing are targeting the service and maintenance market as a means of boosting business, with the global fleet of planes on course to double by 2036.

Boeing values global demand for aerospace services at $2.6 trillion over the next 10 years. Europe and North America are expected to remain the biggest markets, but the fastest growth is set to come in Asia, where demand for new planes is booming.

The US giant predicts the global aviation support market – which includes maintenance, engineering, training and information services and analytics – will be worth some $8.5 trillion between 2017 and 2036.

These services go alongside the massive growth in global air traffic and demand for new aircraft – Boeing estimates more than 41,000 planes will be needed in the next 20 years for an estimated $6.05 trillion.

Data-driven flight

Boeing said its customers are increasingly using technology and data to improve their business decision-making and passengers' travel experience.

"It is clear that our customers, in both commercial and government sectors, are searching for more efficient ways to keep their fleets operating and ready for use in an age of rapid technological advancement," Stan Deal, president and CEO of Boeing Global services, said in a statement.

"As commercial airline fleets continue to grow worldwide, demand for after-market services designed to increase efficiency and extend the economic lives of airplanes will follow."

Boeing, which achieved a turnover of $95 billion in 2016, announced the creation of a dedicated services division late last year, due to start operations on July 1. 

It has a 50% share of the civil and military aviation market, but only seven to nine percent in services.

Airbus estimates the services market will be worth $3.2 trillion over the next 20 years, including $1.85 trillion for maintenance alone.

The European giant also announced plans to install new floating black box flight data recorders on its long-haul planes from 2019. 

Each plane will be equipped with two recorders, one fixed in the forward part of the aircraft and a second in the tail which could detach and float on the surface if the plane crashes in the sea.

This would help avoid a repeat of Malaysian Airlines flight MH370, which disappeared en route from Kuala Lumpur to Beijing in March 2014 with 239 people on board and has never been found, despite a huge search in the Indian Ocean. – Rappler.com

MANILA, Philippines – Gokongwei-led airline Cebu Pacific announced the launch of new night flights to and from Boracay via Caticlan Airport beginning Saturday, July 1.

The mounting of night flights to and from Boracay is in response to a long-standing  tourist request, according to Cebu Pacific vice president for corporate affairs JR Mantaring.

The airline added the night flights after the Civil Aviation Authority of the Philippines, the Department of Transportation, and other aviation authorities approved Caticlan Airport’s night operation capabilities. 

The new night routes make adds two daily round-trip flights between Manila and Caticlan, with Cebu Pacific’s last flight set to leave Manila at 6:55  pm and return from Caticlan at 8:45 pm.

“We believe that expansion of operating times will not only boost frequencies to key domestic routes, but it will also give travelers more options, greater flexibility on when they fly and also help decongest air traffic, especially during the peak flying hours at noon and early afternoon,” said Mantaring.

Prior to the night flights, Cebu Pacific’s last flight from Manila to Caticlan leaves at 3:30 pm, with a return flight from Caticlan at 5:10 pm.

Cebu Pacific said in a statement that passengers will be able to fly to Caticlan from Manila for as low as P2,774.88. Routes to Caticlan from Clark and Cebu will also operate for as low as P2,365.88 and P2,217.88, respectively.

The new schedules bring Cebu Pacific’s total number of flights to Caticlan to 72. 

Cebu Pacific currently flies to 37 domestic destinations, including Siargao, Dumaguete, Coron, Davao, and Puerto Princesa. – Rappler.com

MANILA, Philippines – Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr stood pat at his last Monetary Board meeting, as inflation remains manageable and liquidity is still ample.

Just before Tetangco hands over the reins to his successor Nestor Espenilla Jr, the Monetary Board on Thursday, June 22, decided to maintain the interest rate on its overnight reverse repurchase (RRP) facility at 3%, overnight lending facility at 3.5%, and overnight deposit facility at 2.5%.

The outgoing BSP chief said the reserve requirement ratios were likewise left unchanged at 20%. (WATCH: Rappler Talk: Incoming BSP Governor Nestor Espenilla on his plans)

Tetangco, who is set to end his unprecedented two 6-year terms on July 2, said the decision is based on the Monetary Board's assessment that the inflation environment continues to be manageable.

"Latest baseline forecasts indicate a lower path of future inflation, with average inflation remaining within the target range of 3% ±1 percentage point for 2017 to 2019," Tetangco said in a media briefing in Pasay City.

While the Duterte administration's proposed tax reform program could have a transitory impact on the policy rates, Tetangco said social safety nets are expected to mitigate the resulting inflationary pressures.

"The long-run effects on productivity will improve overall supply and further dampen inflation. Meanwhile, prospects for the global economy have improved, but risks to external demand remain tilted to the downside," he explained.

Inflation eased to 3.1% in May from 3.4% in April, bringing the average to 3.1% in the first 5 months of the year, within the 2%-4% target set by the central bank.

While global economic conditions remain challenging, Tetangco said prospects for domestic economic activity continue to be firm, owing to buoyant consumer and business sentiment, ample liquidity, and sustained credit growth. (READ: Philippine stocks, peso down on another U.S. Fed hike) 

Lower inflation rate forecast

BSP Deputy Governor Diwa Guinigundo also announced that the Monetary Board has cut its inflation forecast for 2017 to 3.1% from 3.4%. The inflation target for 2018 and 2019 remains at 3%.

Guinigundo said the forecast for this year was lowered as outlook showed the future path of inflation is lower and expectations continue to be in line with the inflation target.

He also cited the robust economic growth despite the slowdown in the gross domestic product (GDP) growth to 6.4% in the 1st quarter from 6.6% in the 4th quarter.

Likewise, Guinigundo said the proposed comprehensive tax reform program would have an impact of less than 1% for the inflation rates in 2018 and 2019.

But he warned of the potential impact of the ongoing unrest in Marawi City on both economic growth and inflation.

"I'm sure there will be some impact on both growth and inflation. If there is unrest in the area, productivity can be affected. But due to the 60-day freeze on basic commodities, prices remain stable and supply is generally adequate. Effects so far are benign on inflation," Guinigundo said.

Moving forward, the BSP said it will remain vigilant against risks to the inflation outlook and will adjust its policy settings as needed to ensure inflation remains consistent with the target. – Rappler.com

MANILA, Philippines – Ayala-led Globe Telecom, in partnership with the Armed Forces of the Philippines (AFP) and the Department of Information and Communications Technology (DICT), is opening up its network to provide free mobile services in crisis-hit Marawi City.

For 15 days beginning Thursday, June 22, Globe's prepaid customers in Marawi City can send free texts to all networks and make free calls to Globe and TM networks. Calls to other networks will incur charges.

The primary aim of this is to help reconnect residents and soldiers with their families.

Government troops have been battling terrorists in Marawi City since May 23, forcing 69,434 families to flee their homes. Some residents remain trapped in the battle zone.

Globe president and chief executive officer Ernest Cu noted that the free services do not include mobile data.

"The data component is not included because we want to preserve all of the capacity of the cell sites to be used for voice and SMS," Cu explained in a briefing with the AFP and DICT on Thursday.

"We want people to be able to fully benefit from the capacity of the cell sites. The coverage will be in the general Marawi area. It might go beyond the area but that's alright as long as in the main area, where the fighting is going on, soldiers can call and text," he added.

All Globe and TM prepaid customers in Marawi City will receive a text message from Globe and TM within the next few days to inform them about the promo.

Extension of the free call and text service will be re-evaluated depending on the situation.

'For the public'

Asked whether the free mobile services would end up benefiting even Maute Group terrorists, the 3 organizations emphasized that the main objective is to ensure that soldiers and civilians can easily send text messages and make calls.

"The AFP has already looked into whether the free service could benefit the Maute Group, and the thing is, they are well-funded and are already communicating," Cu pointed out.

"It is our Armed Forces and civilians who are unable to call and so this will create a lot of benefit for the general public. There is very little traffic going into that area now and people are having a very hard time loading their phones with credit. There are no distributors of prepaid cards there now and very little movement of cash through that area," he explained.

For his part, Major General Jose Tanjuan Jr, the AFP Deputy Chief of Staff for Communications, Electronics, and Information Systems, expressed gratitude.

"We would like to thank the DICT and Globe Telecom for affording us this avenue for our embattled soldiers in Marawi to maintain communication lines with their families and loved ones during this critical time as they defend the republic against lawless elements," said Tanjuan. – Rappler.com

MANILA, Philippines— The government slid back into a deficit in May after a hitting a surplus of P52.8 billion in April because of higher government spending, particularly on interest payments.

Data released by the Bureau of Treasury (BTr) on Friday, June 23, showed that the government recorded a deficit of P33.4 billion, P15.8 billion higher than the deficit recorded in the same month in 2016.

The government incurs a deficit when spending exceeds revenue brought in from tax and customs collections as well as non-tax revenue such as government shareholdings.

The deficit was incurred even when revenue collections for the month hit P228.3 billion or 14% higher than the previous year. Total government spending for the month hit P261.7 billion, P44.3 billion or 20% higher than in May 2016.

Of that spending, P21 billion when to interest payments, up 12% year-on-year due to the timing of payment for treasury bonds scheduled in April but paid in May.

Interest payments for January to May totaled P132.3 billion, equivalent 12.5% of the total expenditures, which the BTr noted was an improvement from 13.6%  from the same period in a 2016.

The government has targeted a wider budget deficit of 3% of the gross domestic product for the next 6 years, as it plans to significantly increase spending on infrastructure. So far however, the increased spending has yet to be felt by the economy.

Revenue

The Bureau of Internal Revenue (BIR) contributed a total of P158.7 billion in May, bringing its January to May collections to P716.8 billion, up by a 9% over revenues collcted in the same period last year.

The Bureau of Customs (BOC) contributed P39.6 billion, up 23% or P7.5 billion year-on-year which the BTr noted was the fastest month-on-month growth attained so far this year.

Cumulative collections for the year amounted to P174.9 billion, up 13% than in 2016.

The biggest gainer for May was non-tax revenues, particularly income from the Btr as  remittance of dividends on stockholdings from government-owned and -controlled corporations (GOCCs) started to come in.

BTr income for May stood at P18 billion, P12.2 billion more than the income posted for the same month last year according to the government agency.

From January to May,  BTr’s income fell 18% to total P48 billion, which the agency attributed to the P9.1-billion dip in dividend collections and the decline in income generated from government deposits and bond sinking funds, and social security fund investments by P1.1 billion and P3.2 billion, respectively.

Non-tax revenues from other offices hit P9.3 billion in May, bringing the year-to-date revenue of these offices to P47.7 billion – a 7% growth over 2016.

For January to May 2017, the government fiscal balance stood at a deficit of P63.6 billion. —Rappler.com

PUERTO PRINCESA CITY, Philippines – The rising tourism town of San Vicente in northern Palawan expects more visitors in the future with its newly-opened airport.

After almost 8 years since construction began in 2009, the Civil Aviation Authority of the Philippines officially opened the airport "for general aviation" at 8 am Thursday, June 22.

That means the airport can accommodate only private planes for now, but Mayor Maria Carmela Alvarez gave assurances it will operate commercially by the "last quarter of this year or early next year." (READ: Palawan's Pie Alvarez and eco-tourism)

"We are confident that commercial operations are forthcoming," Alvarez said. "We have talks with PAL [Philippine Airlines] and Cebu Pacific management teams already, and they both have expressed strong interest to open flights here in the soonest time possible."

As a regional airport, she added that "there'll be direct flights from abroad," like San Vicente to Bangkok, Hongkong, and Singapore.

Booming tourism

The airport is seen to boost even more San Vicente's booming tourism industry.

According to Municipal Administrator James Inawasan, without the airport the town had seen a 37% increase in tourist arrivals in 2016. "From 16,000 tourists in 2015, we reached 21,000 last December," he said.

Just these past 5 months, the town had already hit the 15,000-mark. "With the opening of the airport, we'll probably hit our 2021 projection – which is 50,000 arrivals – as early as this year," Inawasan said. (READ: Silence, back to basics in stunning San Vicente, Palawan)

To prepare the airport for commercial operation, he said the Department of Transportation has already allotted funding for the concreting of the vehicular parking area, and construction of the tower and other navigational facilities and utilities.

"Our runway is 1,612 meters length x 45 meters width," Inawasan said, adding that it will be extended by another 300 meters x 45 meters to make it 1.9 kilometers in length anytime soon to accommodate not just light aircrafts but also air buses.

Considered the Philippines' first Flagship Tourism Enterprise Zone, San Vicente boasts of 22 islands and islets with fine white sand beaches, azure-blue waters, abundant rainforest, and exotic biodiversity. It is well known for its stunning 14-km pearly white beach. (READ: San Vicente, Palawan: The rise of the ecotown)

San Vicente, a first-class municipality of nearly 31,000 inhabitants, is located 186 kilometers north of the provincial capital. – Rappler.com

MANILA, Philippines (UPDATED) – Tutuban, Tondo, Caloocan, and Valenzuela in Metro Manila, as well as Meycauayan and Marilao in Bulacan, will be the first 6 stations of a mass transit railway that will connect commuters from Manila to Clark International Airport in Pampanga.

This was announced by the Department of Transportation (DOTr) a day ahead of a station marking event for the P225-billion Manila-Clark Railway, which will be funded through official development assistance (ODA) from Japan.

The project that will once again connect Central Luzon and Metro Manila by rail "will be completed under the Duterte administration," Transportation Secretary Arthur Tugade said in a statement on Sunday, June 25.

Eleven other stations are Bocaue, Balagtas, Guiguinto, Malolos, and Calumpit in Bulacan, plus Apalit, San Fernando, Angeles, Clark, and Clark International Airport in Pampanga, and the proposed New Clark City in Tarlac.

The 106-kilometer railway project is one of the "high-impact projects" of President Rodrigo Duterte under the government's "Build Build Build" infrastructure program.

With this rail project, the DOTr aims to cut the two-hour travel time from Manila to Clark to 55 minutes. (READ: Tugade to formalize Manila-Clark train plan in 90 days)

"The rail system stands to benefit 350,000 passengers daily on its first year of operations," said the transportation department.

Completed in 2021

Philippine National Railways (PNR) General Manager Junn Magno said the project is seen to decongest Metro Manila and further spread economic gains.

"This project will ease traffic congestion and help thousands of commuters coming from Bulacan and Pampanga who travel daily to their workplaces or schools in Metro Manila," Magno said. 

According to the DOTr, the project will start construction in the last quarter of 2017 and will be completed by the last quarter of 2021.

The whole line will have 13 train sets with 8 cars or coaches per train set. Each train can reach a maximum speed of 120 kilometers per hour. 

In June 2016, Duterte told the media that Chinese diplomats offered to fund and build the project in two years. A year later, the transportation department said the project would be funded through ODA from Japan. – Rappler.com

MANILA, Philippines – The revenue collection of the state-run Social Security System (SSS) from members' contributions increased by almost 10% in the first 4 months of 2017, amid efforts to run after delinquent employers.

SSS President and Chief Executive Officer Emmanuel Dooc said contribution collections from January to April rose to P52.18 billion, from the P47.59 billion in the same period last year.

Collections in January registered the highest growth at 13.9% to P13.55 billion, followed by the performance in February at 12% growth to P12.86 billion.

March and April collections also showed positive growth at 7% to P13.14 billion, and 5.9% to P12.63 billion, respectively.

The pension fund said this was mainly driven by its aggressive contribution collection drive, as it went after violators of Republic Act 8282 or the Social Security Act of 1997. (READ: Why raising SSS pensions isn't that simple)

Just recently, police arrested the owner of a security agency with delinquencies totaling more than P180,000.

The SSS has also submitted to Malacañang its proposed manual on Warrant of Distraint, Levy, and Garnishment (WDLG).

Under the proposed WDLG, the SSS will be able to seize real and personal properties as payment for unpaid contributions.

"We've also increased our presence to our members so they can easily reach us as we opened 3 new branches, 15 new service offices, and two foreign offices. We've also relocated 14 of our branches since [November 2016]," Dooc added.

The SSS also maintained it has enough reserves to fund the P1,000 pension increase approved by the Duterte administration.

"Our current contribution collection and investment income from last year is enough to finance the additional P1,000 benefit for pensioners so we assure the public that the pension fund remains strong and viable," said Dooc. – Rappler.com

TOKYO, Japan (3rd UPDATE) – Japan's crisis-hit car parts maker Takata said it filed for bankruptcy protection on Monday, June 26, after deadly faults in its airbags triggered the auto industry's biggest ever safety recall.

The Tokyo-based car parts giant is facing lawsuits and huge costs over an airbag defect linked to at least 16 deaths globally.

News reports have said its liabilities would exceed one trillion yen ($9 billion). Immediate confirmation was not available.

American auto parts maker Key Safety Systems, owned by China's Ningbo Joyson Electronic, will take over Takata, both companies said.

Takata will sell its assets and businesses to Key Safety Systems for an estimated $1.588 billion, they said.

Trading in Takata shares was suspended at the opening of the stock market Monday after a week of massive volatility and the Tokyo Stock Exchange said it would delist Takata on July 27.

"At a board meeting on June 26, our company decided to begin procedures in filing for bankruptcy protection," Takata said in a statement after making the filing with the Tokyo District Court. It said the court had accepted the measure.

Takata has 12 overseas subsidiaries that have also filed for bankruptcy protection.

Jason Luo, president and chief executive of KSS, voiced confidence in Takata's rehabilitation.

"Although Takata has been impacted by the global airbag recall, the underlying strength of its skilled employee base, geographic reach, and exceptional steering wheels, seat belts and other safety products have not diminished," he said in a statement.

"We look forward to finalizing definitive agreements with Takata in the coming weeks, completing the transaction and serving both our new and long-standing customers while investing in the next phase of growth for the new KSS."

Takata shares soared more than 40% on Friday, June 23, after collapsing over the week as traders made bets on its likely bankruptcy.

Analysts attributed the upsurge on Friday to speculative trading among short-term investors hoping to profit from wild swings in share prices as well as to position adjustments ahead of the weekend.

Nearly 100 million cars, including about 70 million in the United States, were subject to the airbag recall linked to a risk they could improperly inflate and rupture, potentially firing deadly shrapnel at the occupants.

The ultimate cause of the malfunctions has not yet been identified but three factors are suspected: a chemical component, ammonium nitrate, that responds poorly to humidity; extreme climatic conditions, such as heat and high humidity; and faulty design. – Rappler.com

MANILA, Philippines – The Chinese government is seen to fund the P285-billion, 653-kilometer railway that will connect Manila to Sorsogon in Bicol, said Transportation Secretary Arthur Tugade.

If realized, this would form part of the longest railway project in the country so far. Its first two phases, the P225-billion, 107.5-kilometer railway connecting Manila to Clark in Pampanga, will be funded by the Japan International Cooperation Agency (JICA). (READ: 17 stations of Manila-Clark Railway announced)

"We would like to have partnerships with countries using their own technologies. What the economic cluster decided is that the group of Luzon will go to the Japanese government and that the group of Bicol hopefully will go to the Chinese government," Tugade told reporters on the sidelines of an event in Manila on Monday, June 26.

"If we put two systems in one place, I will have a problem of mutual relevance and compatibility," he added.

During the time of former president Benigno Aquino III, the project was initiated in 2015 under the name North-South Railway Project. It was also during the Aquino administration when the Philippine government and JICA signed a $1.99-billion (P105-billion) loan deal for the line segment that connects Tutuban, Manila to Malolos, Bulacan.

The P150-billion railway line segment that will connect Malolos, Bulacan to Clark, Pampanga will also be funded by JICA, Tugade said.

JICA said that once implemented, this "could be a game changer in the Philippines' public transport system whose population density is 19,000 people for every one square kilometer," which is higher than Tokyo and most other Asian cities.

South segments

The first two segments, Tutuban-Malolos and Malolos-Clark, will start construction in the last quarter of 2017 and will be completed by the last quarter of 2021.

Meanwhile, the signing of the official development assistance (ODA) for the last two segments – Tutuban-Laguna and Laguna-Batangas-Quezon-Camarines Sur-Albay-Sorsogon – has not been done yet.

"It stands with rhyme and reason that we spread out the market. I want to start activities that are not covered by legal requirements of procurement and bidding, [otherwise] I will lose time," Tugade told reporters.

The Department of Transportation said the railway will connect cities, international seaports, and economic zones, allowing for faster transportation of passengers and freight.

The south line of the project (Manila-Sorsogon) was previously auctioned off by the Aquino administration. The Duterte administration then decided to continue the segment by financing it through ODA from China.

"With the government, we can borrow with a lower cost. We don't need return on investment," Budget Secretary Benjamin Diokno earlier told Rappler. (READ: Duterte gov't calls off auction for South Line of North-South Railway)

Tugade told reporters that the massive Mindanao railway project (MindaRail) might also be funded through ODA from China.

During President Rodrigo Duterte's state visit to China, the Philippine government was able to bring home a $9-billion loan deal from credit facilities to be made available for businesses, development projects, and infrastructure, among others.

Around 17 memoranda of understanding were also signed by Chinese and Philippine firms during the visit. Some Chinese firms involved, however, have questionable track records. – Rappler.com 

TOKYO, Japan – Takata executives faced angry investors Tuesday, June 27, after the company at the center of the world's biggest auto safety recall filed for bankruptcy and said it was being bought by a US company.

The filing all but destroys any value left in the Japanese airbag maker's shares, which will be delisted from the Tokyo stock exchange next month.

Many who attended the shareholder meeting Tuesday expressed outrage at how the auto parts giant handled the crisis caused by a defect in the firm's airbags that has been blamed for at least 16 deaths and scores of injuries.

"I'm resigned to it now that my anger has subsided. That time has passed," said one 48-year-old investor who declined to give his name, outside the meeting, which was closed to media.

"Why couldn't they have addressed these issues faster, when the recalls first emerged back in 2008 and 2009?"

On Monday, June 26, Takata said it has filed for bankruptcy protection and would be bought by US auto parts maker Key Safety Systems (KSS), which is owned by China's Ningbo Joyson Electronic, for $1.58 billion.

Tuesday's meeting was held to reappoint the company's board as the business changes hands.

Takata's chief executive Shigehisa Takada, whose grandfather started the company in 1933 as a textile maker, has said he will resign once the transition is completed.

"I want to ask the president how he feels about his responsibility" for the crisis, said 66-year-old Minoru Matsuo.

Millions of airbags produced for some of the world's biggest automakers, including Toyota and General Motors, are being recalled because of the risk that they could improperly inflate and rupture, potentially firing deadly shrapnel at the occupants.

Nearly 100 million cars, including about 70 million in the United States, were subject to the recall.

Takata, which is facing lawsuits and huge recall costs, has been accused of hiding the problem with its airbags for years, even as deaths and injuries linked to the crisis mounted. 

Honda, a major Takata customer, first sounded the alarm that there might be a problem in 2008. 

But the scandal reached a peak only in 2014 when earlier deaths started getting more media attention and the US National Highway Traffic Safety Administration became involved in the ballooning recalls.

Takata has already agreed to pay a billion-dollar fine to settle with US safety regulators over its airbags.

But its liabilities are reportedly set to top 1.0 trillion yen ($9 billion) in what is the biggest bankruptcy filing for a Japanese manufacturer.

Trading in Takata shares was suspended Monday after a week of wild volatility.

"I put in quite a lot of money into this company," said 36-year-old Takata shareholder Kenichi Asahi. 

"Now the shares are nothing more than trash." – Rappler.com

MANILA, Philippines – The ongoing feud between Ayala-led Globe Telecom and posh Dasmariñas Village in Makati City has reached the courts.

Globe on Tuesday, June 27, announced it sued Dasmariñas resident Betty Aw for moral damages amounting to P5 million. Aw, according to Globe, blocked the construction of cell sites and prevented the telco from improving its mobile services within the exclusive subdivision.

Globe said it filed the case against Aw before Makati City Regional Trial Court (RTC) Branch 59 last June 13.

Aside from moral damages, Globe is also claiming exemplary damages of P500,000 plus attorneys' fees.

Aw is a member of Dasma Acts, a group of Dasmariñas homeowners opposed to the telco putting up an outdoor distributed antenna system (ODAS) within the village.

The group held a press conference on Monday, June 26, accusing the Dasmariñas Village Association (DVA) of violating Republic Act 9904 or the Magna Carta for Homeowners and Homeowners' Associations when it let Globe lease their subdivision streets to set up the ODAS for P4 million every year without their "written consent." (READ: Dasmariñas Village residents quarrel over Globe cell sites)

'Spreading false rumors'

In a statement on Tuesday, Globe said that prior to the installation and operation of its ODAS in Dasmariñas, it sent a letter to DVA president Bernie Lichaytoo expressing its proposal to install and establish an ODAS in the village.

The telco noted that when DVA scheduled the company's request for a referendum to obtain the necessary vote approving the ODAS, Aw, "with manifest intention to prevent the referendum from taking place, started to spread rumors in the neighborhood, making unsubstantiated statements about the health risk brought about by the radiation emitted by telecommunications antennas."

Globe further pointed out that Aw "distributed materials containing false information against the officers of DVA, Globe and even handed a prepared but unaccomplished undertaking or affidavit with a strong request for homeowners to sign and say they are against the construction and installation of ODAS in the subdivision and coaxed homeowners and residents to stage rallies against Globe and oppose installation of ODAS facilities."

The firm said the materials Aw distributed set aside a measurement survey done by the Center for Device Regulation, Radiation Health and Research, which concluded that Globe's ODAS does not exceed the safety limit.

"The actuations of Aw in circulating false and unsubstantiated information regarding the installation and operation of the company's ODAS is a clear abuse of her right as she did not act with justice [or] gave Globe, the DVA and its officers as well as homeowners and residents their due. Neither did she observe honesty and good faith," Globe said.

Aw, the telco added, acted "irresponsibly in failing to verify the truth of the nature and effects of the operation of telecommunication facilities and ODAS prior to making unfounded statements regarding radiation being emitted by telecommunications antennas and spreading the same in the community as gospel truth as to sow fear, and thus, unduly preventing the installation and operation of the company's ODAS to the prejudice of homeowners and residents in Dasmariñas Village."

"The malicious and false rumors were made by Ms. Aw with no other intention than to tarnish the good image of Globe. Since defendant made the statements and circulated the same in the village, the company has been receiving queries and angry calls from the homeowners and residents, government officials and influential businessmen," Globe concluded.

Globe has had difficulty securing permits to install ODAS facilities in exclusive villages for some time now.

The telco insists that opening up subdivisions to such systems will help improve the reliability of its service.

Globe has also taken the step of releasing an open letter to residents of posh villages in Metro Manila in a bid to explain its side. – Rappler.com

MANILA, Philippines – SM Prime Holdings Incorporated, one of the leading integrated property companies in Southeast Asia, is set to open SM Cherry Antipolo, its 63rd mall in the country, on Friday, June 30.

Situated along the bustling Marcos Highway, SM Cherry Antipolo offers 27,000 square meters (sqm) of gross floor area (GFA). It brings SM's total retail footprint to 9.1 million sqm in the Philippines. (READ: Cherry Foodarama to reopen, now under SM management)

"SM Cherry Antipolo is the 3rd Cherry Foodarama outlet in the country that SM Prime reopens to the public after acquiring the brand," SM Prime president Jeffrey Lim said in a statement to the local bourse.

"The opening of this mall provides the company a stronger foothold in the eastern part of Metro Manila along with our 3 other malls in Rizal province, the SM City Masinag, SM City Taytay, and SM Center Angono," Lim added.

SM said the 3-level mall will already be 55% leased to tenants when it opens on Friday.

SM Cherry Antipolo will also have a Sky Garden on the second level, with covered dining areas and walking paths.

Since the start of 2017, SM Prime has opened SM CDO Downtown Premier and S Maison at Conrad Manila. 

By the end of the year, it will open SM City Puerto Princesa in Palawan. (READ: Doing business under Duterte? Philippines' richest family shows how)

SM Prime, which recently reached P1-trillion market capitalization, earlier committed to spend P100 billion in capital expenditures over the next two years, primarily to roll out more shopping malls and residential projects in the country.

It recently raised P20 billion from the issuance of 7-year bonds due 2024, primarily to fund its capital spending plan.

Based on its 5-year plan ending 2018, SM Prime targets to have 75 shopping malls in the country.

SM Prime earlier said it has a sufficient land bank totaling 1,227 hectares, which is good for development for the next 5 to 7 years. The company's land bank is also geared toward provincial expansion. – Rappler.com

MANILA, Philippines – Major railways as well as water, airport, and education projects – 11 in total – secured final approval from President Rodrigo Duterte, with most of these deals' financing being shifted to official development assistance (ODA).

The National Economic and Development Authority (NEDA) Board, chaired by Duterte, on Tuesday, June 27, also approved a national transport policy (NTP) that aims to unify all transport-related projects in the Philippines.

"In particular, the policy will synchronize decisions and investments of all transport-related agencies and better coordinate such efforts between the national and local levels," NEDA Director General Ernesto Pernia said in a statement on Wednesday, June 28.

NEDA said the implementing rules and regulations (IRR) of the policy "has yet to be formulated."

"The government assures the people that the problem of congestion on the roads is still being prioritized. The NTP is a priority strategy reflected in the Philippine Development Plan 2017-2022, as we seek to provide accessible social services through better connectivity," Pernia said.

The 11 projects that will now be rolled out by their implementing agencies are the following:

• P35.26-billion Mindanao Railway Project (MRP) Phase 1 Tagum-Davao-Digos Segment

This first phase of the 830-kilometer Mindanao Railway Project loop will be implemented by the Department of Transportation (DOTr) through local financing. This phase involves the establishment of a 102.28-kilometer commuter railway from Tagum City in Davao del Norte to Digos City in Davao del Sur.

NEDA said the project is expected to be operational by 2020 should the DOTr fast-track the right-of-way acquisition.

• P211.43-billion Malolos-Clark Railway Project (PNR North 2)

Also to be implemented by the DOTr, this project will be financed by the Japan International Cooperation Agency. (READ: PH's longest railway to get funding from Japan, possibly China)

This project involves the construction of a commuter line and airport express railway between Malolos and Clark Green City through Clark International Airport.

It is composed of two segments: Malolos to Clark International Airport (50.5 kilometers) and Clark International Airport to Clark Green City (19 kilometers).

• P9.89-billion Cavite Industrial Area Flood Risk Management Project 

The Department of Public Works and Highways (DPWH) will implement the flood risk management deal through ODA financing. 

About 151.5 square kilometers, this project aims to mitigate damage due to flooding in the lower reach of the San Juan River Basin and the Maalimango drainage areas in Cavite. It involves the improvement of the San Juan River channel and the drainage for Maalimango Creek.

It is set to benefit around 8,000 households and 50 industrial firms. NEDA said the project is expected to be completed by April 2024.

• P12.55-billion Clark International Airport Expansion Project

The expansion of the airport will be implemented by the Bases Conversion and Development Authority (BCDA) through local financing. Afterwards, NEDA said the operations and maintenance of the airport will be auctioned off via public-private partnership (PPP).

The project aims to build an 82,600-square-meter terminal building, having a design capacity of 8 million passengers per year. The expansion project is expected to be completed by 2019.

Conglomerates Megawide Construction Corporation and Filinvest Development Corporation had earlier expressed interest in the deal. But the DOTr had decided to push through with the expansion via local financing instead. (READ: DOTr won't auction off Clark airport rehab)

• P3.47-billion Education Pathways to Peace in Conflict-Affected Areas of Mindanao (PATHWAYS)
  

This project will be implemented by the Department of Education (DepEd) via ODA funding.

It will develop institutional capacity and strengthen critical systems essential for improving equitable access to and the quality of educational services in the primary grade levels (K-3) in the Autonomous Region in Muslim Mindanao (ARMM). The program implementation will be from July 2017 to 2026.

• P1.19-billion Australia Awards and Alumni Engagement Program - Philippines

This is being pursued by NEDA, the Department of Trade and Industry (DTI), and Civil Service Commission (CSC) through ODA funding.

NEDA said the project will provide a successor program to the Philippines-Australia Human Resource and Organizational Development Facility (PAHRODF). It aims to retain the human resources and organizational development benefits brought by PAHRODF. The program will run from September 2017 to 2025.

• P10.87-billion New Communications, Navigation, and Surveillance/Air Traffic Management Systems Development

This project will be done through a 30-month loan validity extension and reallocation of DOTr funds through ODA financing.

NEDA said this involves two components: construction of an air traffic management automation (ATM) system and construction of the Manila ATM Center Building in Pasay City near the Ninoy Aquino International Airport (NAIA), as well as the installation of communications equipment and surveillance equipment in 4 radar sites (Tagaytay, Palawan, Zamboanga, and Davao).

"It will improve safety, reliability, and efficiency of the air traffic system in the country. The project is expected to be completed by 2019," NEDA said.

• P2.8-billion New Configuration of the LRT1 North Extension Project - Common Station

Called the Unified Grand Central Station, the common station will include a total concourse area of 13,700 square meters connecting the Light Rail Transit (LRT) Line 1 North Extension, Metro Rail Transit (MRT) Line 3, and MRT 7 on the corner of North Avenue and EDSA.

Through local financing, it "will deliver the required level of service for up to 1.28 million passengers per day," said NEDA. Its target completion date is April 2019.

• P4.62-billion Arterial Road Bypass Project Phase II 

The NEDA Board approved changes in scope, cost, and financing arrangements for the DPWH-led project. This will now be implemented through ODA financing, not PPP.

The project aims to complete the remaining segments of the Plaridel Bypass Road "to alleviate the perennial traffic congestion at the interconnection point of the North Luzon Expressway with the Daang Maharlika Highway," NEDA said.

The total project cost increased to P4.62 billion from P3.34 billion. It is expected to be completed by 2019.

• P10.86-billion New Centennial Water Source – Kaliwa Dam Project

This project will be implemented by the Metropolitan Waterworks and Sewerage System (MWSS). Its funding source changed to ODA from PPP, lowering the total project cost to P10.86 billion from P18.72 billion.

The project will increase Metro Manila's raw water supply and ensure water security, as it involves the construction of an additional supply source of 600 million liters per day. It is expected to be completed in two years.

• P2.7-billion Chico River Pump Irrigation Project

The NEDA Board approved changes in the mode of financing of the National Irrigation Administration (NIA)-led project. It will now be funded through ODA, from the initial plan of local financing.

With an implementation period of 3 years, this project is seen to provide irrigation water supply to around 8,700 hectares of farmland and will benefit around 4,350 farmers.

"This will allow the NIA to tap a grant/technical assistance in order to comply with NEDA Board's instruction last year to reconfigure the project design ... to include a hydropower energy component." (READ: Locals protest Duterte admin's Chico River project)

'There will be delays'

Sought for comment, Rene Santiago, president of infrastructure consultancy Bellwether Advisory Incorporated, said there will "definitely" be delays in some infrastructure projects because of the changes in financing mode.

"Definitely, there will be delays – especially on those projects already in the pipeline for tender, such as the regional airports, and the Tutuban-Malolos Commuter Railway," Santiago told Rappler in an email.

The transportation expert added that funding projects through ODA is not exactly shorter than PPP, as lending agencies impose their own protocols. (READ: Addressing myths of PPPs)

"For example, the Tutuban-Malolos Commuter Rail will be funded by JICA (loan agreement signed during former president Benigno Aquino III's time). It has already commissioned detailed engineering works prior to tender. But the new administration changed the tracks from narrow gauge to standard gauge and wanted a combined pax-cargo railway system," Santiago said.

"That single change would effectively delay the project by a minimum of two years. I do not expect completion before [the] end of [the] Duterte administration," he added.

NEDA had earlier said that about 66% of the government's medium-term infrastructure program will be financed by government funds, with the remaining being split between overseas long-term loans and PPP contracts. – Rappler.com

MANILA, Philippines – The Philippines aims to place itself among the top 20 most competitive countries in the world, announced Ramon Lopez, Secretary of the Department of Trade and Industry (DTI) and Chairman of the National Competitiveness Council (NCC). 

"We don't want to go from 99 to 75 to 50. Why don't we go straight to 20?" said Lopez at the 5th Ease of Doing Business Summit held on Wednesday, June 28.

The Philippines currently ranks 99th out of 190 countries, according to the Ease of Doing Business report of the World Bank Group's International Finance Corporation (IFC).

Guillermo Luz, co-chairman of the NCC, said the Philippines also aims to improve its competitiveness among its peers in the Association of Southeast Asian Nations (ASEAN), since the country ranks below average.

"I want to give a reality check: we have improved and we have recorded the biggest gains but we are rated below the midpoint in ASEAN and that simply is not good enough. We cannot accept being 7th out of 10 in ASEAN; that is simply not acceptable," said Luz. 

Automation

To catch up with ASEAN peers and meet the country's target of being among the top 20 most competitive countries in the world, both Luz and Lopez said the next step would be automation.

"The next to streamlining is really automating. It is in automating that we can really catapult into where we want to be: top 20," said Lopez. 

Luz added: "We have to move a little more consistently in speed in what we are doing. You can see our upgrades, but you can also see the downgrades. We need to move online. Many of the activities in the world are already online." 

Luz also said that alternative ways of doing business must incorporate digital or mobile platforms where applications can be filed remotely at any time, instead of the usual processes done physically in government agencies.

According to the NCC, automation would contribute largely to "the ultimate goal of processing business registration and permits in a single day." 

Project 'Ease of Doing Business Sprint'

To turn this ambition into a reality, the NCC partnered with the New Zealand government through New Zealand G2G Know-How, a partnership which involves technical assistance to the Philippines.

New Zealand is currently the top country in the IFC Doing Business report. 

Through the partnership, the NCC aims to further automate and streamline government procedures at both national and local government levels by as early as the end of 2017.

Stefan Korn, chief executive officer, and Emmet McElhatton, Southeast Asia commercial manager of New Zealand G2G Know-How, shared a 5-month timeline to jumpstart the project dubbed "Ease of Doing Business in the Philippines: Imagining Possibilities."

Below is the timeline presented at the summit:

The timeline created was based on findings from an explanatory support visit where the New Zealand government conducted workshops with several government agencies and local government units. Interviews with 21 corporations, 23 sole proprietors, as well as 15 cooperatives were also carried out.

The project design is patterned after Google Ventures' "Design Sprints" method, which is used by the New Zealand government in addressing business problems. 

The project's timeframe for implementation aims to help bring about results in line with the country's 2020 target.

Korn explained that a better ranking in the IFC Doing Business report would need to be seen by 2019 in order to ensure the Philippines' vision of reaching the top 20 most competitive countries in the world by 2020.

"We need to do some immediate action. We have a window, and it is a very limited window of opportunity, to begin some work with these initiatives that we know can make a difference," he added.

Key factors

The NCC measures the Philippines' level of competitiveness through the annual IFC Doing Business report. 

According to the IFC survey, ease of doing business in a country is dependent on how difficult or simple businesses' transactions with government agencies can be carried out. The indicators in the survey include:

• Starting a business
• Dealing with construction permits
• Getting electricity
• Registering property
• Getting credit
• Protecting investors
• Paying taxes
• Trading across borders
• Enforcing contracts
• Resolving insolvency

– Rappler.com