Tuesday, August 30, 2016

Spreading the benefits of economic gains

by Manny B. Villar - 
REAL estate is one industry that reflects and supports the strong growth of the Philippine economy. It also creates a positive chain effect by boosting other industries, like the retail business, business process outsourcing (BPO) and tourism, through the property sector’s commercial or retail, residential, office and hotel or leisure segments.
Real-estate prices are increasing, but there are no significant risks of price bubbles because of the strong demand. For residential units, in particular, demand is mainly from end-users, like overseas Filipino workers (OFWs) and business-process outsourcing workers.

In an effort to track pricing trends in the domestic real-estate sector, the Bangko Sentral ng Pilipinas (BSP) this year created the Residential Real Estate Price Indices (RREPI), which would be released every quarter. The BSP said the RREPI, based on bank-approved housing loans, could be a useful tool in assessing the real-estate and credit-market conditions in the country.
Based on the RREPI, real-property prices in the National Capital Region (NCR) increased by 9.7 percent in the first quarter of 2016, compared to the same period last year. Real-estate prices in areas outside the NCR (AONCR) increased by 9.4 percent during the same period.
Other highlights: Condominium units posted the highest year-on-year growth in prices at 12.9 percent, followed by townhouses at 8.5 percent.  About seven out of 10 residential real-estate loans granted were for the purchase of new housing units. Condominium units were the most common house purchases in NCR, while in AONCR, single detached houses were the most popular.
NCR accounted for 50.4 percent of the residential real-estate loans granted in the first quarter of 2016, followed by Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) (28.4 percent), Central Luzon (7.6 percent), Western Visayas (3.8 percent) and Central Visayas (3.3 percent).
The real-estate sector’s growth has been so strong that some
companies are already experiencing labor shortage, particularly for skilled construction workers, as well as engineers. Property consultant Colliers International said in a separate study that this would continue to affect the delivery of real-estate units for all segments.
The Colliers study noted that six projects were scheduled for delivery in the second quarter of 2016, but only one was completed because of the “acute lack of skilled labor in construction.”
Nevertheless, the property sector is expected to sustain strong growth for the rest of the year because of low inflation (1.3 percent in the first half of 2016, well-below the government’s target of 2 to 4 percent), low interest rates and modest growth in OFW remittances.
These factors, according to Colliers, translate to greater purchasing power and higher consumer confidence, which will, in turn, benefit the various segments of the property sector.
What makes the growth of the real-estate industry significant is that its contribution to the economy is not only in terms of higher output or GDP.
The labor shortage being experienced by some developers show that the real-estate industry is a big employment generator. Jobs are being created not only during the construction phase, but also in the operation of businesses in the newly built malls, other commercial facilities, office buildings and hotels.
The real-estate industry also helps in developing new growth areas outside Metro Manila, thus encouraging and stimulating new businesses in the provinces, in the process raising household incomes in those areas.
The government’s focus on accelerating infrastructure development, particularly in many areas outside Metro Manila, like Mindanao, should also sustain the growth of the real- estate industry.
In the not-so-distant future, I hope to see the same modern landscape in the far-flung provinces of Luzon, the Visayas and Mindanao, as in Metro Manila.

Tuesday, August 23, 2016

Calata Partners with Investment, Gaming Firms for P65B Casino Resort in Cebu

Expected to be opened in 2020, the Mactan development will have 3 luxury hotels, an entertainment complex featuring a full-scale casino, and retail shopping.

GAME-CHANGER. Mactan Leisure City will introduce 3 luxury hotels, an entertainment complex featuring a full-scale casino, and retail shopping.

MANILA, Philippines – Listed agribusiness company Calata Corporation has partnered with a US-based investment group and a Macau-based gaming operator to create a real estate investment trust (REIT) for a P65-billion, 14-hectare casino resort on Mactan Island, Cebu.
Expected to be opened in 2020, the development will introduce 3 luxury hotels, an entertainment complex featuring a full-scale casino, and retail shopping.
REIT is a stock corporation created primarily for the purpose of owning income-generating real estate assets.
Calata told the Philippine Stock Exchange (PSE) on Tuesday, August 23, that it has teamed up with Sino-America Gaming Investment Group, LLC and Macau Resources Group Limited for the REIT that will be used for the 14-hectare casino resort called Mactan Leisure City.
Calata said in the regulatory filing that Mactan Leisure City will "generate tens of thousands of employment opportunities" and is expected to have a gross revenue of about P55.74 billion yearly.
The listed firm added that Macau Group and Sino will initially be infusing around P836.10 million into the project.
Around P234 million of that will then be poured into Calata, which in turn will invest the funds into its majority-owned corporate vehicle.
The remaining P602.10 million will be directly infused from Sino into Calata's majority-owned corporate vehicle, the local firm told the PSE.
After the announcement, shares of Calata ballooned by 28.16% to P3.55 each on Tuesday.
Look into agri-related deals
Calata said Mactan Leisure City will be just one of the many projects the firm and its partners will be handling.
Sino and Calata will be looking into agri-related projects and other related opportunities, as the US-based investment firm views the Philippine agriculture sector as a business opportunity.
According to Calata, Sino wants to invest in Philippine agriculture "not only to increase profitability, but also to stabilize regional food supply, and reduce door cost while providing fresh locally grown produce."


from:  Rappler (August 23, 2016)

Calata Partners with Investment, Gaming Firms for P65B Casino Resort in Cebu

Expected to be opened in 2020, the Mactan development will have 3 luxury hotels, an entertainment complex featuring a full-scale casino, and retail shopping.

GAME-CHANGER. Mactan Leisure City will introduce 3 luxury hotels, an entertainment complex featuring a full-scale casino, and retail shopping.

MANILA, Philippines – Listed agribusiness company Calata Corporation has partnered with a US-based investment group and a Macau-based gaming operator to create a real estate investment trust (REIT) for a P65-billion, 14-hectare casino resort on Mactan Island, Cebu.
Expected to be opened in 2020, the development will introduce 3 luxury hotels, an entertainment complex featuring a full-scale casino, and retail shopping.
REIT is a stock corporation created primarily for the purpose of owning income-generating real estate assets.
Calata told the Philippine Stock Exchange (PSE) on Tuesday, August 23, that it has teamed up with Sino-America Gaming Investment Group, LLC and Macau Resources Group Limited for the REIT that will be used for the 14-hectare casino resort called Mactan Leisure City.
Calata said in the regulatory filing that Mactan Leisure City will "generate tens of thousands of employment opportunities" and is expected to have a gross revenue of about P55.74 billion yearly.
The listed firm added that Macau Group and Sino will initially be infusing around P836.10 million into the project.
Around P234 million of that will then be poured into Calata, which in turn will invest the funds into its majority-owned corporate vehicle.
The remaining P602.10 million will be directly infused from Sino into Calata's majority-owned corporate vehicle, the local firm told the PSE.
After the announcement, shares of Calata ballooned by 28.16% to P3.55 each on Tuesday.
Look into agri-related deals
Calata said Mactan Leisure City will be just one of the many projects the firm and its partners will be handling.
Sino and Calata will be looking into agri-related projects and other related opportunities, as the US-based investment firm views the Philippine agriculture sector as a business opportunity.
According to Calata, Sino wants to invest in Philippine agriculture "not only to increase profitability, but also to stabilize regional food supply, and reduce door cost while providing fresh locally grown produce."


from:  Rappler (August 23, 2016)

Sunday, July 17, 2016

BIR Slashes Tax Clearance Requirements, Orders Frontline Offices to Issue CAR within Five Days


Heeding the call of the President of the Republic, the Bureau of Internal Revenue (BIR) begun its journey towards change through two (2) revenue issuances which effectively cuts down on red tape in the processing of Tax Clearance Certificates (TCC) and the issuance of Certificates Authorizing Registration (CAR).

Revenue Memorandum Circular (RMC) No. 74-2016 streamlines the requirements and the process in the issuance of TCCs required under Executive Order No. 398. The said issuance mandates that all TCCs shall be processed and released within two (2) working days from the submission of the complete documents. The number of documentary requirements was also reduced from nine (9) to three (3). 

Applicants now need only to submit a notarized application form with two (2) pieces of loose Executive Order No. 398
 (DST), Print-out of Certification Fee paid thru the BIR’s Electronic Filing and Payment System (eFPS) with payment confirmation, and Delinquency Verification issued by the concerned BIR office. 

The issuance further requires the issuance of the Delinquency Verification within twenty four (24) hours from the filing of the application by the taxpayer and shall have a validity period of one (1) month from the date of issue. 

The criteria for approving applications for TCC shall be governed by existing issuances which includes no unpaid Annual Registration Fee, no open valid “stop-filer” case, user of the eFPS for at least two (2) consecutive months prior to the application for TCC, not tagged as “Cannot Be Located” taxpayer, and no delinquent account. 

Revenue Memorandum Order (RMO) No. 41-2016 on the other hand mandates strict adherence to the BIR’s Citizen Charter and the provisions of Republic Act (RA) No. 9485, otherwise known as the Anti-Red Tape Act of 2007 (ARTA), in the processing and issuance of CARs. 

The said RMO reiterates the documentary requirements relative to applications for the issuance of CARs covering sale of real property, transfer or assignment of stocks not traded in the stock exchange, transfer subject top donor’s tax, estate tax, and other taxes including DST related to the sale/transfer of properties. 

It also pegs at five (5) days from the submission of the complete documentary requirements the number of days within which the CAR shall be issued in contrast to the previous time frame of five (5) to ten (10) days. Officials and employees found to have violated this directive shall be subject to the criminal and administrative penalties provided under the ARTA. 

The RMO responds to complaints raised by taxpayers of CARs issued well beyond the prescribed period. 




from:   BIR Media Release

Tuesday, July 12, 2016

Foreign Direct Investments Post Net Inflows of US$2.2 Billion in April; Reach US$3.5 Billion in the First Four Months of 2016


Foreign Direct Investments (FDI) posted net inflows of US$2.2 billion in April 2016 as net inflows were recorded across all FDI components. The surge in FDI inflows is reflective of the favorable investment climate as the economy continued to post strong growth and show even better growth potentials.   The bulk of the net inflows during the month was in the form of debt instruments (or lending by parent companies abroad to their local affiliates to fund existing operations and business expansion) which amounted to US$1.3 billion, more than four times the US$276 million recorded in the previous year.  Net equity capital placements amounted to US$825 million as gross equity capital placements increased significantly by 2044.1 percent to US$839 million from US$39 million, while withdrawals remained low at US$13 million.  Equity capital placements emanated largely from Japan, the United States, the Netherlands, Germany, and Taiwan.  These were channeled mainly to financial and insurance, real estate, manufacturing, wholesale and retail trade, and administrative and support service activities. Reinvestment of earnings by non-resident investors amounted to US$74 million during the month. 

As a result of these developments, FDI net inflows reached US$3.5 billion for the first four months of 2016.  In particular, non-residents’ investments in debt instruments more than doubled to US$1.9 billion from US$687 million last year. 

Net equity capital placements also grew by 372.6 percent to US$1.3 billion from US$279 million.  This was due mainly to the US$1.4 billion gross equity capital placements, which is four times the previous year’s level of US$369 million.  Equity capital placements came mostly from Japan, Hong Kong, Singapore, the United States, and Spain.  These were invested mainly in financial and insurance, construction, accommodation and food service, real estate and manufacturing activities.

Meanwhile, reinvestment of earnings amounted to US$255 million during the period. 

Based on the Balance of Payments and International Investment Position Manual, 6th edition (BPM6) which uses the asset and liability principle in the compilation of FDI statistics.  Under the asset and liability principle, claims of non-resident direct investment enterprises from resident direct investors are presented as reverse investment under net incurrence of liabilities/non-residents’ investments in the Philippines (previously presented in the Balance of Payments Manual, 5th edition (BPM5) as negative entry under assets/residents’ investments abroad).  Conversely, claims of resident direct investment enterprises from foreign direct investors are presented as reverse investment under net acquisition of financial assets/residents’ investments abroad (previously presented as negative entry under liabilities/non-residents’ investments in the Philippines). 

BSP statistics on FDI covers actual investment inflows, which could be in the form of equity capital, reinvestment of earnings, and borrowings between affiliates.  In contrast to investment data from other government sources, the BSP’s FDI data include investments where ownership by the foreign enterprise is at least 10 percent. Meanwhile, FDI data of Investment Promotion Agencies (IPAs) do not make use of the 10 percent threshold and include borrowings from foreign sources that are non-affiliates of the domestic company. Furthermore, the BSP’s FDI data are presented in net terms (i.e., equity capital placements less withdrawals), while the IPAs’ FDI do not account for equity withdrawals.





from:  Philippine Central Bank
          July 11, 2016

Monday, June 20, 2016

Philippines Joins List of Most Promising FDI Destinations


THE PHILIPPINES has emerged as among the world’s most promising destinations of foreign investments in the next three years, according to the United Nations Conference of Trade and Development (UNCTD).

In its World Investment Report 2016, UNCTD said the US, China and India remain the top destinations of investments by multinational enterprises (MNEs) between this year and 2018. However, the US, which since last year has shown signs of economic recovery, displaced China in this year’s UNCTD survey among executives belonging to the 100 biggest non-financial MNEs.

China was the top choice when the UNCTD last held its survey in 2014, or before the world’s second largest economy showed signs of slowing down.

The Philippines joined the top 15 destinations, placing eighth, along with Australia, France and Malaysia, which in the previous survey round ranked 14th.

The report recognized the “noteworthy measures” of the Philippines to liberalize foreign investments, particularly in removing the foreign ownership restriction on lending firms, investment houses, and financing companies, as well as reducing the number of professions reserved for nationals.

Another Southeast Asian economy new on the list is Myanmar, which ranked ninth along with Vietnam, which in turn rose from the 18th spot during the 2014 survey round.

Seven of the top 15 choice locations belong to emerging Asia, of which 5 came from Southeast Asia, with Indonesia steaming ahead on seventh place, and like Malaysia was on the 14th spot in 2014.

FDI FLOWS SURGE IN 2015
Global foreign direct investment (FDI) flows in 2015 surged by 38 per cent to $1.76 trillion, the world’s highest level since the global economic and financial crisis of 2008 -- 2009, UNCTD said, adding that the growth rode on the increase of cross-border mergers and acquisitions (M&As) to $721 billion, nearly 67% higher than the $432 billion in 2014.

Inward FDI flows to developed economies reached $962 billion, the UNCTD said.

“As a result, developed economies tipped the balance back in their favour with 55% of global FDI, up from 41% in 2014. Strong growth in inflows was reported in Europe. In the United States FDI almost quadrupled, albeit from a historically low level in 2014.”

Developing economies drew $765 billion of FDI inflows, or 9% higher than in 2014, as said economies continue to compose half of the top 10 destinations of FDI flows.

Developing Asia remains the largest FDI recipient region globally, with inflows amounting to $541 billion, or a 16% increase.

Going forward, UNCTD expects FDI flows to decline around 10%-15% this year, mirroring the “fragility of the global economy, persistent weakness of aggregate demand, sluggish growth in some commodity exporting countries, effective policy measures to curb tax inversion deals and a slump in MNE profits.”

Growth is expected to get back on track in 2017, with UNCTD predicting FDI flows to go beyond $1.8 trillion in 2018. 




by:  Roy Stephen C. Canivel (Business World)

Saturday, June 11, 2016

Foreign Direct Investments Grow by Nearly 60% in March 2016


Foreign direct investments (FDI) rose by 59.1 percent to post US$364 million net inflows in March 2016 from US$229 million in the comparable period in the previous year.1, 2 The country’s sustained favorable economic performance as evidenced by 69 consecutive quarters of positive growth, and growth prospects for the year ahead, helped drive inflows in all FDI components during the period.  Non-residents’ investments in economic performance Meanwhile, reinvestment of earnings declined by 14.3 percent to US$49 million during the period. 

On a cumulative basis, FDI yielded US$1.3 billion net inflows in the first quarter of 2016, increasing by 52.1 percent from US$850 million in same period last year.  This was on account of higher gross equity capital placements at US$599 million during the period from the previous year’s level of US$330 million.  Equity capital infusions during the period emanated largely from Hong Kong, Singapore, Spain, the Bahamas, and Taiwan.  By economic activity, equity capital were mainly channeled to financial and insurance; construction; accommodation and food service; real estate; and manufacturing activities.  Net investments in debt instruments increased by 50.1 percent to US$617 million from US$411 million in the same quarter in 2015.  Meanwhile, reinvestment of earnings contracted moderately by 2.1 percent to US$181 million.
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1 Based on the Balance of Payments and International Investment Position Manual, 6th edition (BPM6) which uses the asset and liability principle in the compilation of FDI statistics.  Under the asset and liability principle, claims of non-resident direct investment enterprises from resident direct investors are presented as reverse investment under net incurrence of liabilities/non-residents’ investments in the Philippines (previously presented in the Balance of Payments Manual, 5th edition (BPM5) as negative entry under assets/residents’ investments abroad).  Conversely, claims of resident direct investment enterprises from foreign direct investors are presented as reverse investment under net acquisition of financial assets/residents’ investments abroad (previously presented as negative entry under liabilities/non-residents’ investments in the Philippines). 

2 BSP statistics on FDI covers actual investment inflows, which could be in the form of equity capital, reinvestment of earnings, and borrowings between affiliates.  In contrast to investment data from other government sources, the BSP’s FDI data include investments where ownership by the foreign enterprise is at least 10 percent. Meanwhile, FDI data of Investment Promotion Agencies (IPAs) do not make use of the 10 percent threshold and include borrowings from foreign sources that are non-affiliates of the domestic company. Furthermore, the BSP’s FDI data are presented in net terms (i.e., equity capital placements less withdrawals), while the IPAs’ FDI do not account for equity withdrawals.


from:  Bangko Sentral ng Pilipinas