Category Archives: Home Plan

Malaysian palm oil firm planning to invest $1 billion in Agusan del Sur

BusinessWorld Online
November 22, 2016

A MALAYSIAN COMPANY is planning to invest an initial amount of $1 billion to build plants to process palm oil in Agusan del Sur, according to an official from the Philippine Economic Zone Authority (PEZA).

PEZA Director-General Charito B. Plaza said Alif Agro-Industrial, Inc. is looking for 128,000 hectares in Agusan del Sur which would be used as agricultural economic zones.

“$1 billion ang initial nila kasi (is their initial investment because) they’ll put up refinery plants to process the palm oil,” she told reporters on the sidelines of a Nov. 17 event.

Ms. Plaza said the land will be in ancestral domain areas, which is “good” for indigenous people who have been fighting for their rights.

“What we are doing now to accommodate the 128,000 hectares is we talked to the Department of Trade and Industry, and the local government and the National Commission on Indigenous Peoples. We are talking with the clans of these owners of these ancestral domains. They already signed a contract or a memorandum of understanding that these will be converted to special eco zones for the palm oil industry.”

Ms. Plaza noted the Philippines is currently importing around five million tons of cooking oil.

She said that they are currently studying the country’s imports with an emphasis on looking for possible crops that could be planted in the economic zones. This would contribute to minimizing the country’s overseas purchase of goods while boosting its export capacity.

Ms. Plaza, who took over the post after former PEZA Director-General Lilia B. De Lima retired earlier this year, is a former representative of Butuan.

PEZA is preparing to introduce changes in the way the government seeks investments, as it explores opening up economic zones for other sectors such as that of national defense.

Moreover, Ms. Plaza said PEZA is making a pivot towards attracting Middle Eastern investors that represent a lot of untapped potential.

This new focus, she said, is because PEZA has previously been occupied with seeking investments from Western and non-Muslim states, when in fact, the Middle East is “where the money is.” — Roy Stephen C. Canivel

BIR to expedite tax exemptions for socialized-housing land transfers

BusinessWorld Online
November 04, 2016

CERTIFICATES of Tax Exemption (CTEs) covering the transfer of land intended for use in government socialized housing projects will be prioritized by the Bureau of Internal Revenue (BIR), under an agreement signed with housing regulators.

The memorandum of agreement (MoA) was signed by the bureau, the Housing and Urban Development Coordinating Council (HUDCC) and the National Housing Authority (NHA).

BIR Commissioner Caesar R. Dulay, Vice-President and HUDCC Chairperson Maria Leonor G. Robredo and NHA Acting General Manager Marcelino P. Escalada, Jr., signed the MoA on the availment of tax incentives for government socialized housing projects, the BIR said in a statement e-mailed to reporters.

The MoA is pursuant to Republic Act (RA) No. 7279, or the “Urban Development and Housing Act of 1992,” which mandates that the NHA be exempted from the payment of fees and charges of any kind, including income and real estate taxes.

The BIR, as the agency that enforces tax laws and collects all national internal revenue taxes, fees, and charges, will streamline and prioritize the processing and issuance of CTEs for the transfer of raw land intended for socialized housing projects to the NHA.

Sought for comment, the BIR said that this would entail the simplification and reduction of documentary requirements, and that Mr. Dulay would write a subsequent administrative issuance to implement the MoA.

The HUDCC, as the oversight and coordinating housing agency, will regularly submit to the BIR an updated list of government housing projects that are qualified for tax incentives.

The NHA, which is tasked to develop and implement government housing programs, will endorse to the BIR the CTE applications of housing contractors and assist in the evaluation, verification and certification of documentary requirements.

In a statement, HUDCC flagged scarce residential land supply vis-a-vis land demand as a great challenge in providing affordable housing to the poor.

“The challenge that we face now is setting in place a stronger land use policy that is efficiently administered through an integrated land and ISF information system,” Ms. Robredo said.

“This will be complemented by providing innovative housing solutions through the Key Shelter Agencies (KSAs) and Public-Private Partnerships to address opportunity gaps facing the homeless and low-income families.” — Lucia Edna P. de Guzman

Focus: Property sector’s prospects seen boosted by infrastructure drive

July 27, 2016
By Krista Angela M. Montealegre
National Correspondent

THE AGGRESSIVE infrastructure drive of President Rodrigo R. Duterte has boosted the prospects of the property sector, easing concerns of an overheating market and accelerating the development of residential, office, retail and hotel projects in the countryside.

Inheriting a fast-growing economy plagued by gridlocked roads and congested airports, the new administration vowed to ramp up infrastructure spending to account for up to 7% of economic output. This is in line with a broader effort to decentralize the Philippine capital and boost economic activity outside Luzon in order to achieve inclusive growth.

“Additional spending would increase the demand for money. That could ease the liquidity going into the real estate industry and in the process mitigate any possible formation of an asset bubble,” Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Gunigundo said in a mobile phone message last week.

Policy makers have repeatedly downplayed concerns of an overheating property market.

The results of the central bank’s maiden residential real estate price index in June bared a 9.2% housing inflation in the first three months of 2016 from a year ago, indicating a “vibrant” housing industry.

The government’s accelerated infrastructure spending and proposed income tax cuts — which are expected to increase the spending power of consumers — have improved the outlook for the property sector. Brokerages have issued “buy” calls on real estate firms with strong recurring income and exposure to tourism.

“It [government spending on infrastructure] will somehow ease the fears of a property bubble, as we noted excess capacities/build-up can also be seen now in second-tier areas outside of Metro Manila. With improved infrastructure condition, new demand can be generated to absorb these new build-up,” said Claro dG. Cordero, Jr., head of Jones Lang Lasalle’s research, consulting and valuation advisory services.

Rising disposable income due to a robust outsourcing industry and steady remittance inflows from overseas Filipino workers have been fueling consumer spending, driving the rapid expansion of the property market.

A bubble forms as property developers scramble to build more units in a bid to meet a projected rise in demand and is said to “burst” when purchases do not increase as expected, triggering a steep drop in prices.

“What we had was a soft landing; developers have held back on launches. In the next few years, the completed units will come to the market so we may see a more difficult leasing market,” said Julius M. Guevara, head of advisory services at Colliers Philippines.

UNLOCKING VALUE
For property giants Ayala Land, Inc. and Megaworld Corp., the new government’s thrust means townships incorporating residential, office, commercial and hotel components in new sites and enhanced values for their properties in traditional markets.

“When you have more mass transit systems and farm-to-market roads, it unlocks the value of the property. How can you price properties in far-flung areas at a premium when you have no way to get there?” Megaworld Corp. Senior Vice-President Jericho P. Go said.

For most developers, the diversification outside the Philippine capital has been happening for some time now because of the expansion of the business process outsourcing industry, with real estate companies venturing into other key urban centers such as Cebu and Davao and the fringes of Metro Manila such as Pampanga, Cavite and Laguna.

“We always had that impression that these are markets that weren’t served in the past,” Ayala Land Chief Financial Officer Jaime E. Ysmael said.

“But when infrastructure and connectivity improved significantly, we were surprised with the kind of demand they generated. We’re seeing signs of significant demand and economic activity in these new areas.”

Metro Manila’s contribution to Ayala Land’s business is now down to 80% from 90% in 2009 when it kicked off its aggressive diversification. This may go down to as much as 70%, depending on how fast these regions develop, Mr. Ysmael said.

NEW HUBS SPROUTING
In the last five years, land values in Cebu and Davao cities — which have become the centers of activity in the Visayas and Mindanao, respectively — have risen at a compounded annual growth rate of 10%, faster than the 7.5% expansion in Metro Manila.

Mall developers SM Prime Holdings, Inc. and Filinvest Land, Inc. have joined Ayala Land and Megaworld in moving to non-traditional locations, building more than 1 million square meters of retail space in areas like Cebu, Davao, Cagayan de Oro, Dagupan, Cavite, Rizal, Bacolod, Laguna, Iloilo, Tacloban, Ilocos Norte and Naga, Mr. Cordero said.

Likewise, DoubleDragon Properties Corp., Robinsons Land Corp. and Vista Land & Lifescapes, Inc. are pioneering the development of community malls in the countryside, he added.

Even foreign-branded hotels are setting their sights beyond Metro Manila, with Hilton Hotels & Resorts opening Hilton Clark Sunvalley Resort in 2017, Starwood Hotels and Resorts launching Sheraton Mactan in 2019 and Dusit International rolling out Dusit Thani Davao in 2018 and Dusit Princess Hotel Cebu in 2019, JLL Country Head Lindsay Orr said.

So far, the President and his economic team have been saying all the right things, but the trick is getting all plans off the ground as quickly as possible.

“There is a gestation period for these [infrastructure] projects to take off so the government must act fast, make an early decision — be it the airport strategy, the Angat [Dam] alternative or an energy supply chain — and build the momentum from the previous administration’s work,” AC Energy Holdings, Inc. President and Chief Executive Officer John Eric T. Francia said.

Panguil Bay Bridge project to be funded by Export-Import Bank of Korea-EDCF

Update.Ph

The national budget will fund PHP586 million of the total PHP4.9 billion cost for the construction of the pioneering Panguil Bay Bridge project in northern Mindanao, the Department of Budget and Management (DBM) said during the ceremonial signing today of the loan agreement between the Philippine Government and the Export-Import Bank of Korea-Economic Development Cooperation Fund (KEXIM-EDCF).

Considered a major infrastructure development in Northern Mindanao, the Panguil Bay Bridge will connect Tangub City, Misamis Occidental and Tubod City, Lanao del Norte and reduce travel time between Tangub and Tubod from the usual 2.5 hours to 7 minutes.

It will also significantly improve the travel time from Cagayan de Oro and Iligan to the cities of Tangub, Ozamiz, Oroquieta, Dipolog, and Dapitan in Zamboanga de Norte.

PHP4.2 billion will be funded through loan proceeds, while the remaining PHP586 million will be funded by the Philippine government.

DBM has issued the project’s Forward Obligational Authority (FOA), which gives an overview of the annual investment cost of the Panguil Bay Bridge project, particularly on KEXIM-EDCF and the Philippine government.

For this year, PHP44 million has been included in the budget of the Department of Public Works and Highways (DPWH) to cover the cost of land acquisition, administrative support, and payment of government taxes.

For fiscal years 2017 to 2019, the budgetary requirements shall be accommodated within the budget ceiling of the DPWH.

Discussions on the Panguil Bay Bridge project started in 2014 through the Investment Coordination Committee (ICC) and NEDA board. Original funding was pegged at PHP5 billion.

Upon the review of DPWH, however, the costs of direct construction, consultancy and physical contingency was decreased, which brought down the cost to PHP4.9 billion.

Asean, Mindanao sea links pushed

The National Economic and Development Authority (Neda) is pushing for the development of sea linkages between ports in Mindanao and three neighboring Asean countries to boost regional trade.

In a speech at the Second Mindanao Shipping Conference last Wednesday, Socioeconomic Planning Secretary Emmanuel F. Esguerra said that since Mindanao played a critical role in the Asean Economic Community, the following commercial routes should be established or improved: Davao and General Santos to Bitung and Manado in Indonesia; Tawi-Tawi and Tarakan, Indonesia; Zamboanga and Muara in Brunei; and Zamboanga and Sandakan in Malaysia.

Esguerra, who is also Neda Director General, said there were still concerns on Mindanao’s sea transport sector that needed to be addressed.

Among the issues included the seaports’ limited capacity in terms of berthing structures, transit/cargo shed areas for non-containerized cargo, container yards for containerized cargo and passenger terminal buildings.

Esguerra said there was also a need to slash local cargo rates since prevailing rates in Mindanao are more expensive than foreign cargo rates.

The Neda chief said the government was ramping up infrastructure development to support economic growth across the country.

“The growth-enhanced fiscal space has allowed major investments in infrastructure, with spending on public infrastructure more than tripling. The bulk of investments were slated for transportation, covering 43 percent of total infrastructure investments from 2013 to 2016 and beyond, which was estimated to reach more than P7 trillion. This should be complemented by private investments in public infrastructure amounting to about P1.5 trillion based on the status of PPP (public-private partnership) projects as of April,” Esguerra said.

The Neda chief was also bullish about the planned implementation of the Three-Year Rolling Infrastructure Program (TRIP) starting July.

The Trip for the period 2017 to 2019 was aimed at “[meeting] investment targets for public infrastructure” while “[promoting] the optimal use of public resources for infrastructure development by assuring fund allocation for well-developed and readily-implementable projects,” Neda earlier said.

“The multiyear rolling program for infrastructure would assure us that once an infrastructure program has been planned, and it is rolled out, it is going to continue to receive funding from the government. This was one of our efforts to synchronize and tighten the link between the programming and budgeting functions of the government for infrastructure projects and programs,” Esguerra had said.

According to the Department of Budget and Management, “the policy of dispersing the investment/infrastructure spending toward growth regions in the Visayas and Mindanao (such as Central Visayas and Northern Mindanao) was pursued [under the Trip] to provide the physical infrastructure support for the promotion and development of business and industries.” Ben O. de Vera, Philippine Daily Inquirer