Tag Archives: economic growth

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

Younger population fuels property boom

October 04 2012

Property consultancy firm Jones Lang LaSalle Leechiu said there is lot of promise from the younger set to fuel the development of the property sector.

“Several studies conducted by economic think tanks and investment banks have recognised the growing population of the Philippines as an economic asset now and in the near future. A growing population means a growing workforce and a larger consumer base that could propel future economic growth for the country,” said Jan-lo de los Reyes, Jones Lang LaSalle senior research analyst.

“As of May 2010, the Philippine population stood at 92.1 million, with a median age of 23.4 years old – considered to be within the most economically active age cohorts of 21 to 35 years. The majority of the workforce in the offshoring and outshoring (O&O) industry – one of the strongest contributors to the economic growth in the Philippines – belong to this age group,” De los Reyes said.

De los Reyes noted that the attractive compensation packages offered by O&O firms for its workforce have attracted a “considerable proportion” of the working population, “effectively raising the disposable incomes of many O&O workers.”

“This has consequentially supported their demand for a wider range of goods and services, including real estate,” De los Reyes said.

De los Reyes said this “heightened” consumer appetite also results to “a greater demand for retail goods, encouraging retailers to take up more spaces, improving the occupancy level in retail establishments.”

“While the growth in the O&O industry is not the only factor behind the surge in consumer demand, it is a sizeable market that has some retail establishments adjusting their operating hours to cater to the working hours of this industry. There has also been a recent emergence of retail offerings on the ground floors of office and residential developments, particularly in the established commercial business districts of Makati and Ortigas as well as in the emerging urban district of Bonifacio Global City where there is a large agglomeration of the O&O companies,” said de los Reyes.

The property analyst however added that the impact of the population demographics is more visible in the residential property sector, “especially in the mid-end residential condominium market.”

“Higher disposable income in the O&O workforce has made it now one of the key target markets for property developers. These workers are mostly single who prefer studio-type units. Equally they have the potential to become upgraders in the near future as their disposable incomes rise or when they form new households through marriages” he said.

“Although renters make up most of this demographic, some are buying condominium units – either as end-users or investors – supporting the demand in the residential market,” Delos Reyes added.

De los Reyes, however, said “the country’s young and growing population is not enough to ensure the growth of the local property sector.”

“Equally, strong government support is needed to further improve the human capital as well as sustain and enhance the country’s economic conditions,” he added.

“Nevertheless, we cannot deny the economic benefits of the country’s young and growing demographics on the Philippine economy and the property market,” De los Reyes also said.

Socio-economic Planning Secretary Arsenio Balisacan recently said that there is a skills-labor mismatch in the Philippines that worsens the level of underemployment in the Philippines, which is also “the single most important challenge” the country faces.

“The big challenge is to generate quality jobs, where our members of the labor force can work not only in decent jobs, but can work eight hours a day, and they need more revenue-generating sources of employment,” Balisacan said.

“Our population is growing rapidly, so the economy has to create jobs at a faster rate than that of our labor force,” he added.

Property boom transforming Philippine skylines

Written by AFP
The Daily Tribune
July 23, 2012

As a Philippine property boom gathers pace, even Paris Hilton, Donald Trump and high-fashion house Versace are getting a piece of the action.
The good times are into their fourth year, fuelled by steady economic growth, Western firms offshoring jobs to the Philippines, the buying power of millions of Filipinos working abroad and low interest rates.
“It just so happens that today the stars are aligned… we have never seen the economy this bullish,” said Antonino Aquino, president of Ayala Land, one of the country’s biggest property developers.
Ayala Land is one of the main players in what industry figures describe as an unprecedented construction boom that is transforming the skyline of the nation’s capital, as well as many provincial cities.
In Manila, formerly sleepy pockets such as the Fort army base and the rundown Eastwood industrial zone have become chic, new business districts, catering mainly for the fast-growing outsourcing sector.
At the Fort, Ayala Land this year broke ground on its $714-million One Bonifacio High Street project, which when completed in 2017 will host the Philippine Stock Exchange, a Shangri-La hotel, and retail outlets.
The project also has a 63-story residential tower, with 298 suites ranging from $500,000 to $1.9 million that sold out last month in 96 hours, according to the company.
Across the country, more than 850,000 square meters of office space and 14,000 residential units will enter the market this year, property consultants CBRE Philippines said in a report.
It said many of the residential units catered for a growing middle-class on the fringes of Manila and other urban centers.
The building boom has also spread to hotels, shopping malls and casinos, triggering hopes of a long-anticipated take-off of the underdeveloped tourism industry.
Three of the world’s biggest gaming industry leaders are building a $4-billion, 100-hectare Entertainment City complex of casinos on Manila Bay. The first of the casinos are set to open early next year.
Meanwhile, Trump, the New York mogul, has put his name to a $150-million, 56-story, curtain-glass-walled Trump Tower that broke ground in the financial district this year.
“High-end buyers look for key differentiated features,” said Robbie Antonio, managing director of Century Properties that is behind the Trump Tower development.
He said 70 percent of the 220 residential units, which are worth up to $1.86 million each, have been sold.
The firm is putting up a nearby tower designed by the Versace fashion house — the first of its kind in Asia — featuring individual wading pools as well as its iconic Medusa-head brand imprinted on lamp shades and cutlery.
Century also flew in socialite and hotel heiress Hilton to Manila last year to help design and promote a suburban Manila residential project that features a man-made beach.
Industry players say the property boom reflects the overall status of the nation’s economy as it picks up steam after decades of underperforming compared with many of its Asian neighbors.
The economy grew 6.4 percent in the first quarter, the stock market has surged 20 percent this year to hit all-time highs, and the country’s credit rating has been bumped up to just a step below investment grade.
The central bank’s benchmark interest rates are also at historic lows — 4.0 percent for the benchmark borrowing rate — ensuring large piles of cheap cash for property development.
Aside from the macro economic picture, real estate analysts point to the outsourcing phenomenon as one of the key drivers of the property boom.
From virtually nothing a decade ago, outsourcing now employs more than 600,000 people and is worth $11 billion annually, according to the main industry association which is forecasting 15 percent growth in the years ahead.
Many of the skyscrapers are being built to cater for the outsourcing workforce, which performs a myriad of tasks from call center duties to designing architectural plans for foreign firms.
Meanwhile, roughly nine million Filipinos who work overseas are sending large chunks of the $22 billion they earn — equal to 10 percent of the nation’s gross domestic product — back home, often investing in real estate.
The frenetic building pace has some quarters anxious over a potential property bubble, with the global economic woes adding to concerns.
But Rick Santos, CBRE Philippines chief executive, remains bullish, in large part because of the expected continued growth in the outsourcing sector.

Land use planning: Key to disaster risk management

The Philippine Star
Updated Jan 22, 2012

MANILA, Philippines – The issue of poor land use planning is being left out in the current discussions on why disasters keep happening in the Philippines.

According to Dr. Walter Salzer, director and principal advisor of the ?Environment and Rural Development Program (ERDP) of the ?Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), increasing threat of climate change and the effects of disasters being felt every year in almost all areas of the country highlight that land use planning, use and management, is not only about physical planning, but also makes sense on the social and human aspect.

Land use planning, Salzer insists, is a very important instrument in disaster risk management.

The goal of land use planning for disaster risk management, he explained, is to achieve a utilization of land and natural resources which is adapted to local conditions and needs, and takes into account disaster risks.

Natural hazards such as floods, landslides or even earthquakes become disasters when people and physical infrastructures are not able to cope with it.

The devastation, Salzer said, is explained not only because of the country’s exposure, but also by the vulnerability of the Philippine society.

This vulnerability is further worsened by the lack of prevention and preparedness, or appropriate emergency management systems which leads to various losses – human life, structural and financial.

The resulting loss, ranging from minimal to life-changing, Salzer said, depends on the capacity or resilience of the affected communities to support or resist the hazard.

Land use planning and management, or lack thereof, Salzer stressed, is a key underlying cause that needs to be brought to the forefront.

The poor’s existence, Salzer elaborated, is greatly interlinked with their environment. Their options of where to settle and obtain their livelihood from are limited. Their options of settlement are often limited to marginalized locations like riverbanks, steep slopes or near coastal shores. When disaster strikes, they usually do not have the resources to recover quickly.

Salzer pointed out that there are nearly 100 million Filipinos of whom close to 30 million reside in rural areas in a state of poverty.

The resilience of the lands, from which they depend on for food, shelter, water and livelihood are, thus, weakened, Salzer observed.

Natural protections such as forests and mangrove swamps may be destroyed or damaged through unsustainable resource exploitation.

Poverty, hunger and settlement on hazardous land are induced by increasing demand on water sources, soil fertility and natural resources.

Land administration, Salzer pointed out, involves protecting the remaining forest cover of the country.

But “land” in its broadest definition, Salzer said, extends from “ridge to reef”, and each type of land, from forest land, lowlands and coastal areas, require mandated plans, that determine these areas optimal use and management.

To minimize flooding risks, Salzer said, the whole watershed area needs to be looked at. In order to minimize water run-off, forests or forest-like land use systems needs to be restored or other adequate water conservation measures need to be put in place.

At river deltas, like the ones in Cagayan de Oro and Iligan, Salzer said, a good portion need to be reserved for the undisturbed water flow or the river beds need to be regulated in a way that excess water can easily drain into the sea.

Unprotected settlements close to rivers must be avoided by all means or adequate protection wall should be established.

Good land use and planning, the ERDP director said, are essential for the prevention of disasters. Good land use planning is comprehensive, it determines various sites in a city and municipalities: boundaries of different types of lands, settlements, livelihoods (agriculture and economic areas) and provides the means for services and infrastructure.

Absence of a comprehensive land use plan, Salzer warned, can lead quite literally to a disaster: socially, economically and environmentally.

Good land use and planning brings many other benefits. It provides the best investment options for land and water use; helps preserve ecological balance to sustain food security and economic growth, and provides for local revenue generation, investment budgeting and expenditure management, and monitoring to implement projects.

Most importantly, Salzer said, in light of typhoon Sendong and various other calamities that have caused great losses, good land use and planning reduces illegal use of land, conversion and destruction.

GIZ is a federally-owned enterprise that supports the German government in the field of international development cooperation.

For more than 30 years now, GIZ has been cooperating with Philippine partners in strengthening the capacity of people and institutions to improve the lives of Filipinos in this generation and generations to come.

Northern Mindanao shifts from growth corridor tack

Businessworld Online
March 29, 2011

CAGAYAN DE ORO CITY — Development planners in Northern Mindanao are shifting away from the old strategy of focusing on the Cagayan de Oro-Iligan growth corridor in order to spur economic activity faster in the rest of the region.

Lawrence Ll. Cruz, mayor of Iligan City and appointed in December last year as chairman of the Regional Development Council (RDC), said in a recent phone interview here that there is a need to identify several centers that will act as development hubs in order to cover a wider area.

Many better than one

The numerous hubs are expected to spur economic activity in surrounding areas which can act as providers of goods and services for these centers, Mr. Cruz said.

Thus, he said, having several hubs to act as development catalysts should prod economic growth in a wider area in the region than if planners were to depend on just one corridor.

“Northern Mindanao is the fastest growing and largest contributing economy in Mindanao, with 28% contribution to the gross regional product of the island,” Mr. Cruz claimed.

Despite this, he added, the region is still battling with poverty, with a 32.8% incidence rate in 2009.

Still a priority

“Although the Cagayan de Oro-Iligan Corridor will remain a priority, other (growth centers) will also be given importance,” said Mr. Cruz.

Hence, he said, there should be more projects in Bukidnon, Lanao del Norte, Misamis Occidental and Camiguin, which comprise the region, in addition to Misamis Oriental, which generally covers the corridor between Cagayan de Oro and Iligan City, the capital of Lanao del Norte.

Northern Mindanao is also banking on its location, hoping to become a transshipment hub for the entire island.

“The region is the best jump-off point for trading,” said Mr. Cruz.

“But there is a need for the provision of complementary structures for the mobility of passengers and cargo.”

Strategic projects

The Laguindingan International Airport is due for completion in the first quarter of 2012 and already, farm-to-market roads are being built around the area.

More development projects near the airport are expected in the near term, with Ayala Corp. holding titles to lands surrounding the airport.

A commercial port for passenger ferries plying the waters between Camiguin and Misamis Occidental and nearby tourist destinations is also proposed for development at the southern end of the airport, which is located between this city and Iligan City.

The private sector, represented in the RDC by Rodolfo L. Meñes, past president of Cagayan de Oro Chamber of Commerce and Industry, is also pushing the development of infrastructure projects in the region.

“The Ala-e bypass-road will make Phividec a world-class industrial area,” said Mr. Meñes in reference to a road linking the industrial estate to the Bukidnon-Misamis Oriental highway that leads to Davao region.

Luring investments

Other important infrastructure projects supported by both the RDC and the private sector are the Panguil Bay Bridge in Misamis Occidental and the expansion to four lanes, from the current two, of the highway from Cagayan de Oro to Butuan City.

Despite the withdrawal of a proposed $2-billion shipbuilding project from the Phividec Industrial Estate three years ago, the RDC remains confident of attracting new locators that can make up for that loss in foreign direct investment.

One prospective locator is a company that is reportedly planning for a billion-dollar solar power facility in the region. The RDC, however, could not provide details on this prospective investment. — L. G. Dumas