PHILDEVFINANCE (old news): March 2012

Saturday, March 31, 2012

Citi eyes MSME loan market

By Lawrence Agcaoili (The Philippine Star) Updated March 31, 2012 12:00 AM

MANILA, Philippines - American banking giant Citibank NA is pushing for
amendments to the existing law on micro, small, and medium enterprises
(MSMEs) to level the playing field between local and foreign-owned banks.

Citi country officer Sanjiv Vohra said in an interview with reporters
that foreign banks are looking forward to changes in existing law to
allow them to provide capital to businesses currently not covered by the
existing legislation for MSMEs.

Vohra pointed out that the relevant amendment is now being threshed out
in the House of Representatives and its counterpart measure in the Senate.

The House of Representatives enacted Republic Act 6977 otherwise known
as "The Magna Carta for Small and Medium Scale Enterprises" in 1991 but
was amended through RA 8289 in 1997 and RA 9501 in 2008.

Section 3 of the law defines MSMEs as any business activity or
enterprise engaged in industry, agribusiness and/or services, whether
single proprietorship, cooperative, partnership or corporation whose
total assets, inclusive of those arising from loans but exclusive of the
land on which the particular business entity's office, plant and
equipment are situated.

Enterprises are classified as micro if their assets are not more than P3
million while those with assets of between P3 million and P15 million
are classified as small. On the other hand, medium enterprises are
companies with assets of between P15 million and P100 million.

The law provides that the definitions should be subject to review and
adjustment by the Micro, Small and Medium Enterprises Development
(MSMED) Council upon recommendation of sectoral organizations concerned,
taking into account inflation and other economic indicators.

The law permits even foreign lenders to acquire real-estate properties
offered as collateral by defaulting borrowers so long as these
properties are disposed of within five years.

While this provision allows both local and foreign lenders the same kind
of protection in case of borrower default, Vohra said the recognized
asset threshold of P100 million for SMEs is too low for foreign lenders
like Citi.

"For us, micro, small and medium scale entrepreneurs go beyond assets
than the law limits at only P100 million," he said.

Section 13 of the law provides that all lending institutions are
required to set aside a portion of their total loan portfolio based on
their balance sheet. Lenders should set aside should at least be five
percent by the end of the year of the effectivity of the law, 10 percent
by the end of the second year through the end of the fifth year, and
five percent by the end of sixth year and may come down to zero by the
end of the seventh year.

The Bangko Sentral ng Pilipinas (BSP) has boosted the industry's lending
program for MSMEs by launching 21 credit surety fund (CSF) programs
across the country.

Initiated in August 2008, the CSF is a fund created through the pooling
of cash contributions from participating cooperatives with an equivalent
counterpart contribution from the local government unit and donations
from partner institutions.

In lieu of acceptable collaterals, the fund would serve as guarantee for
loans extended by banking institutions to MSMEs participating in the
program.

The innovative credit enhancement program is aimed at meeting the
financing requirements of enterprising cooperatives and capital-short
businessmen who often experience difficulty in obtaining loans from
banks due to lack of collaterals and credit track records.

Under the CSF Program, a formal source of credit may now be accessed
even in the absence of acceptable collaterals by way of a surety cover
issued by the CSF in favor of the lending bank.

--
------------------------------------------------------------------------
CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman
Mailing address: PO Box 90 UPLB Los Banos Laguna, Philippines 4031
Emails: carlosani@gmail.com , carlosani@seedfinance.net
Landline Phone: +63495010127 (PLDT)
Cellphone Numbers: +639152919580 (Globe) and +639328590859 (Sun)
Websites:
CARLOSANI.COM - http://www.carlosani.com
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com
My News Clippings - http://www.myclipps.posterous.com
Family website - http://www.anifamily.net
SEEDFINANCE Corporation - http://www.seedfinance.net
Skype name: carlosaniph
-----------------------------------------------------------------------

Wednesday, March 28, 2012

Microfinance experience in PHL shows the poor can be insured

SUNDAY, 25 MARCH 2012 18:56 MANUEL T. CAYON / REPORTER

DAVAO CITY—The Philippine success in extending microfinance credit to
the poor shows that this sector at and below the poverty threshold could
also become worthy of insurance coverage, the Insurance Commission here
said.
At present, about 3.1 million poor Filipinos have been covered by the
government program on microinsurance since the project was started in
2010, said Emmanuel F. Dooc, chairman of the Insurance Commission, the
government supervisory agency.

Microinsurance offers as low as P1 per day worth of buying one of the
government-approved 59 microinsurance products, with the government
wanting to cover the poor with the basic product BBK, for "Buhay, Bahay
at Kabuhayan" (health and accident, house and livelihood), he said.
Or the premium could go higher but should not go beyond 5 percent of the
total earning of a policyholder, he added.

A microinsurance policy could have an insurance coverage of P10,000 to
as much as P200,000.

Dooc said the commission wanted to cover all the households in the
population's 27 percent below the poverty level. "I may be ambitious but
our success in microfinance has told us that even the poor is worth the
financial protection it needs."

An innovation in insurance activity in the microinsurance program was
the coverage of properties and livelihood affected by disasters.
"Agricultural crops and the stalls of vendors would be covered to
provide them extra protection, especially if they live in the most
disaster-prone villages."

The Insurance Commission would be holding 16 regional road shows to drum
up support to the program and to spread the information to the target
clients.

He said 15 mutual benefit insurance and 19 insurance companies have
listed as agents, along with 18 rural banks.

Dr. Joselito Almario, deputy executive director of the National Credit
Council of the Department of Finance, said the Insurance Commission has
tapped cooperatives and associations to extend the reach of the program.

He said the commission was also studying the experience in Quezon City
where it tapped a barangay government to gather its constituents to be
covered.

He said the program has simplified the application as well as it sped up
the payment "because for the poor, cash is very urgent during disasters
and accidents." He said claims could be paid in a day.

Before, he said, insurance companies shun the poor "but with a
98-percent repayment success in our microfinance, we have shown them
that the poor could pay better than their usual clients." He said that
the banking sector could only notch an 85-percent collection rate.

"We also show them, by comparison, that the poor protects their
properties better than the rich," he said. "For instance, we ask them
which one is a risky investment: the rich who wants multiple coverage of
one of his fleet of cars, or the poor fisherman, who would leave his
wife at the shore to run to where his boat was and ensure that it would
be securedly tied to a post at a coming typhoon?"

"Now, even the big names in insurance business have registered. That's
an indication that there's a future in this undertaking," Almario said.

Hiroyuki Aoki, senior finance analyst at the Asian Development Bank,
said his office has allocated $1 million to support the program, from
its conception and marketing, to putting up the mechanism to the
information and dissemination campaign and materials. He said the amount
was being released in tranches, since 2008, and up to the present
campaign road shows.

Tuesday, March 27, 2012

Citibank eyes bigger lending to SMEs

CITI is seeking a legislation that will allow foreign banks to lend to
small and medium-scale enterprises (SMEs) whose business values are
higher than the current limit of P100 million.

Sanjiv Vohra, Citi country president, said the bank is also looking at
improving its SME loan portfolio.

"Currently, we are lending to those who are in the P100 million and
below business size clients," Vohra said.

He said he is pushing for a law that will allow foreign banks to go
beyond P100 million, to at least reach P200 million.

According to Vohra, the current MSME law allows a level playing field
between local banks and foreign banks to participate in the said sector.

"Under (the present) MSME law, there is a separate provision which
allows foreign creditors to take real estate as collateral and allows
you to undertake foreclosure under extrajudicial means, (which) makes it
easier for foreign banks," Vohra said.

At the moment, Citi says the bank is still catching up with other banks
when it comes to the SME portfolio.

Meanwhile, Eugene McQuade, CEO of Citi North America, said the
Philippines will play a very important role in the bank's business
expansion.

"We will be transferring more of our operations here in the Philippines
soon," McQuade said.

According to McQuade, "Citi has now recovered from the issues brought on
by the world economy."

"(We are) very focused on continuing to grow our businesses all over the
world," he said.

He said that for the next 12 years or so, opportunities of growth will
be greater in the region.

McQuade also pointed out that the healthy macro-economics of the country
opened more opportunities to Citi.

Vohra added that Citi is strong enough to withstand great economic
pressure outside the country.

Because of this, Citi expressed its intentions to transfer more of its
outsourced services soon.

Currently, Citi employs about 6,000 people, 3,000 of whom are in the
regional offices and the other 3,000 in shared services.

"We have great confidence in our ability to thrive no matter what
happens in the global economy," Vohra said.

"We've seen positive growth in 2008 and 2009 and we're quite confident
about the Philippines' growth over the next two years."

Vohra projects a GDP growth of 4.2 percent for the Philippines in 2012
on the back of good feedback from exports, government spending, and
investments.

RBAP-MABS introduces TRACS process

(The Philippine Star) Updated November 08, 2011 12:00 AM

MANILA, Philippines - The microinsurance initiative of the Rural Bankers
Association of the Philippines-Microenterprise Access to Banking
Services (RBAP-MABS) program has introduced a simplified licensing process.

Called the TRACS process, the process will simplify the microinsurance
licensing applications of rural bank to the Bangko Sentral ng Pilipinas
(BSP) and the Insurance Commission (IC).

The United States Agency for International Development (USAID)-supported
MABS developed the turn-key system to assist participating rural banks
in expanding their services to include microfinance product in order for
microinsurance to reach low-income groups.

The TRACS Process actually stands for: Train in microinsurance basic and
product mastery; Request for a no objection notice from the BSP;
Assemble microinsurance core team; Choose the bank's partner-insurance
provider; and, Submit complete requirements to the Rural Bankers
Research and Development Foundation Inc. (RBRDFI).

The process was introduced in a two-day microinsurance basic course
covers the fundamental concepts and principles of microinsurance. It
also imparts practical knowledge and skills to participants on
microinsurance sales and servicing.

After completion of the training, the participating rural banks must
submit its No Objection Notice to the BSP.

This document signifies the bank's compliance to the regulations and
intent to pursue the distribution of regulated microinsurance products.

Participating banks are encouraged to designate members of its
microinsurance team with expertise in marketing, operations and the
management information system (MIS) of the bank.

In addition, the team supervisor must have completed the trainings on
microinsurance basics and product mastery conducted by RBAP-RBRDFI and
the bank's partner-insurance provider, respectively. Only licensed
insurance companies and their authorized microinsurance products are
endorsed to the member rural banks.

These steps and the training provided help to ensure the success of
banks in properly selling, marketing and servicing microinsurance
services to their low-income clients.

RBAP-RBRDFI, with support from the International Labor Organization's
microinsurance innovation facility successfully trained 145 rural banks
since its launched in January 2011 and assisted more than 40 rural banks
with their microinsurance license applications.

Lowly Lagundi leaf has come a long way

LAGUNDI started out as a simple folk remedy for cough and other
illnesses. Filipino mothers would boil freshly-picked green leaves and
strain them to produce an herbal tea, which is then given to an ailing
member of the family. Through the years, its effectiveness was proven
through intensive studies in modern medicine led by the Department of
Science and Technology (DOST).

Recognizing the efficacy of lagundi as a natural remedy for cough and
asthma, Pascual Laboratories (PascualLab), in collaboration with the
National Integrated Research Program of Medicinal Plants (NIRPROMP)
introduced ASCOF Lagundi as the first herbal medicine in the country in
1996. Licensed by the Philippine Council for Health Research and
Development (PCHRD) and DOST, ASCOF is currently the most successful
phytomedicine (or plant-based therapeutic product) in the Philippines.

The initial production of ASCOF that began over a decade ago was done
through a technology transfer from the DOST and NIRPROMP. This made it
possible for PascualLab to manufacture quality medicine from organic
lagundi leaves.

Today, PascualLab takes quality care to the next level by developing
more advanced production technologies for ASCOF. Its Herbal R&D and
Product & Process Development team collaborates with independent medical
and research institutions and consultants both here and abroad, to
continuously improve its products. PascualLab is committed to intensify
its researches on lagundi, and is set to launch new product innovations
within the year.

PascualLab is the only local pharmaceutical company in the country today
with an advanced herbal research facility that is tasked to study and
develop technology for phytomedicines, thereby opening up a world of
possibilities in the future of healthcare. "With our second-generation
technology, our production process is more efficient and more
standardized, ensuring that ASCOF's phytoactive contents are consistent
in every batch that is produced.

Monday, March 26, 2012

House leaders say Phl economy poised for take-off

By Paolo S. Romero (The Philippine Star) Updated March 26, 2012 12:00 AM

MANILA, Philippines - Despite harsh criticisms heaped on the Aquino
administration and the many global challenges facing the country, the
Philippine economy is actually poised for a take-off based on indicators
glossed over by critics, House leaders said yesterday.

The lawmakers, led by Ang Kasangga party-list Rep. Teodorico Haresco and
Eastern Samar Rep. Ben Evardone, also filed a resolution "commending the
government's economic team of the DOF (Department of Finance), DTI
(Trade and Industry), DBM (Budget and Management) with the BSP (Bangko
Sentral ng Pilipinas) for the country's coming economic take-off because
of 'PNoying' or the President's 'Daang Matuwid' (straight path)."

Haresco is vice chairman of the House committee on small business and
entrepreneurship development while Evardone is chairman of the House
committee on public information.

Other authors of the resolution are Aklan Rep. Miraflores, chairman of
the House committee on tourism, and Guimaras Rep. Joaquin Carlos Rahman
Nava, vice chairman of the House committee on appropriations.

"Despite the economic doldrums of major economic partners, like the US,
EU and Japan, which have seriously affected the Philippines in terms of
trade. We see a robust Philippine economy," Haresco said.

He pointed out the country's vibrant stock market, whose index recently
breached 5,000 for the first time in 11 years; a sustained current
account surplus of $5.2 billion, and a huge foreign currency reserve of
$75 billion.

He also cited the appreciating peso which mitigates imported inflation
to an estimated 3.5 percent this year and probability of another
probable ratings upgrade by Standard & Poor's "which may against lower
the country's borrowing costs and save us another P25 billion in
interest charges."

"We also have a benign labor-management relationship environment, which
is certainly attracting the second wave of Japanese, Korean, and
Taiwanese manufacturing investments. All of the above is good governance
as a result of 'PNoying—a straight path or 'daang matuwid' which buoyed
the confidence of the public and private sectors," Haresco said.

"With all the essential political vision and actions imbedded in P-Noy's
Cabinet, the country will take off and may even surprise all of us if
2012 breaches the targeted 4.2 percent growth on GDP (gross domestic
product)," he said.

He said the indicators belie criticisms hurled by militants on
government to dispense with the value-added tax (VAT) and legislate a
P125 daily wage.

He said investors to the region are "revisiting the Philippines once
more as their Asean hubs experience near full employment levels of
skilled labor and rising inflationary pressure on wages.

Vietnam and Thailand have seen salaries and wages increase 15 percent
annually over the past three years, he said.

Economy to grow faster this year - BDO

By Neil Jerome C. Morales (The Philippine Star) Updated March 26, 2012
12:00 AM Comments (0)

CLARK FIELD, Pampanga (via Wi-Tribe), Philippines – BDO Unibank, Inc.,
the country's largest lender in terms of assets, expects the economy to
grow faster this year while interest rates will remain low and inflation
manageable.

Benefits of the higher government spending will likely take effect late
this year that will increase consumption spending.

Growth in gross domestic product will likely reach 4.5 percent this year
from 3.7 percent last year, Jonathan L. Ravelas, chief market strategist
at BDO Unibank, Inc., said at the Economic Journalists' Association of
the Philippines-San Miguel Corp. Business Journalism Seminar in Pampanga.

The projection is lower than the government budget assumption of a
5.5-percent uptick.

Ravelas said the economic scenario will be like last year, with numerous
factors that could dampen growth.

"All the problems are still here. Who is next [in the Eurozone debt
crisis]? For the US, we are not sure because their recovery stems from
the fourth quarter so it is all about spending during the Christmas,"
Ravelas said.

"The good thing about our country is it signals spending. In the second
half, we will see the rewards of these things," Ravelas said.

The government has set a budget deficit ceiling of P286 billion this
year. Last year, the government incurred a deficit of P197.8 billion,
below the P300 billion deficit ceiling set for 2011.

Meanwhile, BDO Unibank projects inflation and interest rate of
three-month Treasury bills to average at 4.5 percent and three percent,
respectively, from 4.7 percent and 1.66 percent last year, respectively.

The government expects inflation to average three percent this year.

But a spike in oil prices might dampen economic growth, Ravelas said.

"If Iran is to be attacked, it will trigger $140 per barrel," Ravelas said.

Dubai crude, the benchmark for Asia, stood at $123.10 per barrel as of
March 21, up from $122.15 per barrel as of Mar. 16.

International oil prices remain high given continued tensions over
nuclear program of oil producer Iran.

Ravelas said $120 to $130 will be manageable, with oil prices to
normalize at $100 by yearend.

Sunday, March 25, 2012

Poor man’s sugar’ finds sweet success abroad

Poor man's sugar' finds sweet success abroad

By: Alex Rey Pal
Inquirer Visayas
6:39 pm | Saturday, March 24th, 2012

A WORKER stirs heated sugarcane juice at the Raw Brown Sugar Milling Co.
Inc. muscovado factory.

DUMAGUETE CITY— Most planters here tend to use the bleakest of terms in
describing recent developments in the sugar industry.

A 50-kilo bag of sugar recently fetched a price barely half the P2,600
it commanded last year. Costs of diesel fuel, wages and spare parts have
also increased.

Planters now worry about oversupply and smuggling of sugar. Moreover,
there is the "zero tariff" on imported sugar under the Asian Free Trade
Agreement (Afta), which will take effect in 2015.

But one sugar planter in Negros Oriental manages to keep his head above
water by going into niche marketing.
Export market

Alejandro Florian Alcantara, a lawyer and certified public accountant,
has started selling "muscovado," also known as "poor man's sugar," to
Asian and European markets.

His Brown Sugar Milling Co. Inc. (RBSMCI) in Barangay Igbalanac,
Pamplona, has become only the third company to penetrate the export
market out of 300 muscovado producers in the country today

In 2007, Alcantara, a sugar planter for over 15 years, decided to build
his own sugar mill to save on the 33.5-percent toll fee charged by other
mills in Negros Oriental and to protect his investments once Afta's
sugar provision goes into full swing.
His interests led him to Rene Burt Llanto, director of the Department of
Science and Technology (DOST) in Central Visayas, and to Dr. Nuna
Almanzor of the Industrial Technology Development Institute (ITDI).

On Aug. 22, 2009, then Science Secretary Estrella Alabastro gave the key
of the 90-ton capacity muscovado factory to Alcantara in a simple
ceremony in Pamplona.

Shortly after it started operating, RBSMCI participated in the
International Food Exhibition (Ifex) Manila sponsored by the Center for
International Trade, Exposition and Mission (Citem) in May 2010.

ALEJANDRO Florian Alcantara, Raw Brown Sugar Milling Co. Inc. president
(left), reviews the day's work with production manager Jose Miguel V.
Bengoechea, chief of processing Tim Kenneth Aguilar and sanitation and
food safety head Cristalyn S. Alcantara at the sugar mill in Igbalanac,
Pamplona town, Negros Oriental.

It was one of three food companies in the Philippines chosen from over
100 firms to join the Asean Japan Center in Tokyo and the Asean Korea
Center in Seoul that same year.

Foreign contacts

Abroad, Alcantara learned that what most people here considered to be
"poor man's sugar" was actually a special commodity in developed countries.
Unlike refined sugar, which is subject to fluctuating prices in the
world market, the price of muscovado has been stable over the past
several years.
Alcantara's new contacts abroad enabled him to start exporting "organic
certified" muscovado immediately after his products first rolled off his
factory in February 2010.
To date, exports to Japan, Korea, Russia and Taiwan account for 90
percent of RBSMCI's production, while only 10 percent is distributed
locally.
"The government has been a big help to my operation—from the design,
cleaner technology and marketing—in helping me penetrate the very
discriminating markets in Asia," Alcantara says.
Inspired by his success, the Negros Oriental Chamber of Commerce Inc.,
DOST, the Department of Trade and Industry, and AFOS Foundation for
Entrepreneurial Development Cooperation—a nonprofit organization founded
by the Federation of Catholic Entrepreneurs of Germany—helped RBSMCI in
preparing for International Standards Organization (ISO) 22000
certification-Food Safety Management System (FSMS).
In March last year, RBSMCI joined the Philippine delegation led by
Menandro Ortego of the Philippine Trade Training Center (PTTC) for a
two-week training program on Food Safety and Quality Standards and
Regulations in Japan.
To make the mill competitive in the global market, RBSMCI recently
completed the draft manual for Hazard Analyzing Critical Control Points
(HACCP) seminar.
Good practices
It also obtained the current Good Manufacturing Practice (GMP) manual
and the Sanitation Standard Operating Practices (SSOP).
HACCP teaches food industries to prevent food contamination within the
process flow, while GMP certifies company observance of hygienic
practices among employees in its environment.
"The HACCP and GMP are important tools to guarantee food safety because
buyers usually conduct factory audits and see if we comply with these
global standards," Alcantara explains.
To date, he says, RBSMCI has been sending one 20-foot container of
muscovado abroad each month.
Success stories like Alcantara's may yet be the exception to the rule.
But he and his 40 employees, no doubt, are charting the direction the
sugar industry may take in the years to come.

President Aquino says in command of PH

by Karl Malakunas, Agence France Presse
Posted at 03/25/2012 12:11 PM | Updated as of 03/25/2012 12:11 PM

MANILA, Philippines - Benigno Aquino admits he needed weekend escapes
from the job's pressures when he started as the Philippines' president,
but nearly two years on he exudes passion and says he is firmly in control.

During an in-depth interview with AFP at the presidential palace, Aquino
pointed to a host of economic indicators to justify his enthusiasm,
while displaying a relish for bare-knuckled political fights against his
opponents.

"There are so many things that have transpired that none of us could
even have imagined when we were campaigning," Aquino said reflecting on
his first 21 months in office that followed a landslide election win.

He referred mostly to the state of the nation's economy, which after
decades of under-performing has showed signs of steady, if incremental,
improvement under his leadership and mantra of clean-governance.

Aquino, 52, insists the economy is on the right track, citing a series
of international credit ratings upgrades and the rise of the Philippine
stock market to record highs in recent weeks as evidence.

Among his proudest achievements are luring foreign manufacturers and
other investors to the Philippines, extending health cover, cutting
government waste and expanding an incentive scheme to keep millions of
poor children at school.

Critics accuse him of lacking urgency on the economic front, pointing
out GDP growth was just 3.7 percent last year partly because he cut
government spending when they say pump-priming was needed.

But Aquino's policies, which have an overarching theme of tackling the
corruption infecting all sectors of the nation's economy, have won
endorsement from a wide range of sources.

World Bank country director Motoo Konishi said last week the economy was
in good shape with inflation stable at around 2.7 percent, manageable
government finances and a well-focused social protection system.

"Besides having strong macroeconomic fundamentals, the country is
benefiting from political stability and a popular government seen by
many as strongly committed to improving governance and reducing
poverty," he said.

A survey released by one of the nation's most reputable polling groups
on Thursday also found Aquino was holding onto the support that carried
him to the biggest election win in modern Philippine politics.

The Pulse Asia survey showed his popularity ratings at 70 percent, with
just nine percent disapproving.
A big factor in Aquino winning by such a large margin in 2010 was brand
association.

He is the son of Corazon Aquino, one of the country's most loved
political figures who led the democracy movement against dictator
Ferdinand Marcos in the 1980s and then succeeded him for six years as
president.

Her death in 2009 led to an outpouring of support for the Aquino family,
transforming the bachelor son from a publicity-shy senator with a
reputation for achieving little in politics into the country's most
popular politician.

Meanwhile, business leaders are showing their support by opening up
their wallets.

One of the country's biggest conglomerates, Ayala Corp, announced last
week that its real estate arm would invest $1.4 billion over the next
five years on projects within the country's financial district of Makati.

"The economy is on a positive track.... that's why we're aggressive in
our investment," said Ayala Land president Antonino Aquino, who is not
related to the president.

In last week's interview, President Aquino said holding the reins of the
country felt much more comfortable than the initial period after taking
over from Gloria Arroyo, who ruled the Philippines for nearly 10 years
before him.

"The first three months we were all looking towards Friday," Aquino said.

"When Friday came there would at least be a small break in between the
discovery of other problems."
Aquino has repeatedly accused Arroyo and her allies of running down the
country through massive corruption, and he referred again in the
interview to her time in power as a "lost decade".

Aquino has mounted an at-times controversial campaign to prosecute
Arroyo and her allies, who include Supreme Court Chief Justice Renato
Corona.

Arroyo is now awaiting trial and could spend life in jail after being
charged with election fraud. Corona is facing an impeachment trial in
the Senate and will lose his job if found guilty of corruption.

Critics accuse Aquino of persecuting his opponents. But he made no
apologies, and insisted there would be no let-up in the anti-graft campaign.

"We are trying to get the kingpins of corruption," he said.

Saturday, March 24, 2012

ICT sector a $50-B industry by 2016

By Helen M. Flores (The Philippine Star) Updated March 24, 2012 12:00 AM

MANILA, Philippines - The local information and communications
technology (ICT) industry is expected to contribute as much as $50
billion in annual direct revenues to the economy by 2016, a government
official said.

Alejandro Melchor III, deputy executive director for ICT Industry
Development of the Information and Communications Technology Office
(ICTO), said the Aquino government is highly supportive of the industry
and is looking at investing significantly in programs, policy
development, marketing, research and talent development.

"With government support behind the ICT industry the upside for the
country is tremendous, other than the $50 billion in direct revenues,
they are also projecting $150 billion in indirect investments in the
economy through real estate, transport and telecommunications, banking,
taxes and others," he said.

ICTO is an attached agency of the Department of Science and Technology.

"The ICT industry is fueled by the country's most valuable resource, its
people. The government is investing in the Filipino through investments
in science and Technology-oriented training and education," DOST
Secretary Mario Montejo said.

Local ICT stakeholders from the private sector noted that the industry
needs support from the government in six key areas namely, talent
development, domestic ICT development, countryside industry development,
advancement of ICT enabled creative industries, ICT marketing and
research as well as expansion into high-value markets.

An "ICT Public and Private Partnership or iPPP" initiative was recently
launched to boost the government and private sector collaboration in the
development of the industry.

Early this year, President Aquino issued an executive order which
creates the ICTO, replacing the Commission on Information and
Communications Technology (CICT).

Sen. Edgardo Angara, chair of the Senate committee on science and
technology, said the ICT industry currently provides employment to
600,000 young people in the IT-BPO sector and one and a half million in
indirect jobs.

"We're generating almost $12 billion in foreign exchange and in four
years' time, we see that both employment and revenues could more than
double," Angara said.

Microfinance CEOs respond to Washington Post article “Microfinance doesn’t end poverty, despite all the hype.”

"The hype is long over" – Microfinance CEOs respond to Washington Post
article "Microfinance doesn't end poverty, despite all the hype."

March 23, 2012 in Center for Financial Inclusion, Microfinance CEO
Working Group | Tags: Microfinance CEO Working Group Posted by Meghan Greene

The Microfinance CEO Working Group consists of the CEOs of leading
microfinance organizations ACCION, FINCA International, Freedom from
Hunger, Grameen Foundation USA, Opportunity International, Pro Mujer,
VisionFund International, and Women's World Banking. In the post below,
the CEOs respond to the recent Washington Post article by David Roodman.

This may surprise you. As the CEOs of eight global microfinance
organizations, we largely agree with the substance of David Roodman's
March 8 op-ed "Microcredit doesn't end poverty, despite all the hype."
The headline, however, is just silly.

The hype is long over. The industry agrees that microcredit is not a
"silver bullet" to end all poverty, even though it can and has helped
many people build better livelihoods. As Roodman says, "Financial
services are like clean water and electricity – they are essential to
leading a better life." To significantly improve the lives of the
majority of the 2.7 billion people living in poverty, we need a number
of essential ingredients: education, health care, basic nutrition, the
rule of law, infrastructure – and access to a variety of financial
services especially designed for the poor, including credit.

The leaders of the microfinance industry have known this for some time.
And the industry has been moving in this direction for many years.
Today, the frontiers of microfinance go well beyond microcredit, to
include savings, insurance, money transfers and other products that, as
Roodman points out, the poor need just as much as the rich to manage
their financial lives. These financial services are important tools that
help individuals manage their businesses, cope with unpredictable cash
flows, build assets, and afford lump-sum expenses, like health
emergencies and school fees. Microfinance institutions are harnessing
new technologies to expand their reach and to serve clients faster,
better and cheaper than before.

Today, microfinance reaches about 200 million clients worldwide, a tiny
fraction of the billions whose lives would be better with access to
these basic services. We have much more we need to do, but continuing to
debate about whether microcredit – by itself – can end poverty is
distracting us from the far more important question of what we can do to
assist the poor.

The Microfinance CEO Working Group

Michael Schlein, President and CEO
ACCION

Rupert Scofield, President and CEO
FINCA International

Steve Hollingworth, President
Freedom from Hunger

Alex Counts, President and CEO
Grameen Foundation USA

David Simms, Board Chair
Opportunity International Network

Rosario Pérez, President and CEO
Pro Mujer

Scott Brown, President and CEO
VisionFund International

Mary Ellen Iskenderian, President and CEO
Women's World Banking

Image credit: frontpagemag.com

Friday, March 23, 2012

Demand for banana flour increases in Mindanao

DAVAO CITY -- Pastry and bakery companies in the Autonomous Region in
Muslim Mindanao have inquired into a possible agreement with a
cooperative based in Kapalong town, Davao del Norte for steady supply of
banana flour.
"[The companies] were asking about whether the cooperative can supply 10
bags of banana flour per week," Vedastito C. Galvez, acting provincial
director of the Department of Trade and Industry (DTI)-Davao del Norte,
recently told BusinessWorld.

He, however, declined to reveal the names of the companies without the
go signal from AMS Employees Fresh Fruits Producers Cooperative in Davao
del Norte.

The cooperative, he said, can produce five metric tons of food grade and
15 tons of flour classified as feed grade each month.

Last year, the cooperative generated P1.5 million in revenues from
food-grade flour sold at P15 per bag. Industrial flour is sold at P8 per
bag.

Last year, the Trade department has matched the cooperative's banana
flour with Le Jardin Food and Home Industries in Tacloban City with an
average monthly supply of eight bags, although the demand could easily
increase depending on the results of the initial deliveries.

Since it started in 2002, the cooperative's assets has grown to P25 million.

The cooperative's 97 agrarian reform beneficiaries has a total aggregate
farm area of 72 hectares planted with export-grade Cavendish bananas in
Kapalong.

Just recently, Mr. Galvez said Nutriasia has again started buying
food-grade banana flour from the cooperative for its UFC banana catsup
with an initial sale of P50,000 due to the improved capacity and
enhanced quality of the product.

However, he said the transaction stopped for a while in 2010 because the
flour's quality failed to meet the standards set by the company.

The cooperative then improved the quality of its product through the
assistance of the Department of Science and Technology (DoST) in Davao
Region under its Small Enterprise Technology Upgrading Program.

The agency allocated half a million pesos for the purchase of a hammer
mill and a chipping machine allowing the cooperative to boost production
fivefold from the initial one ton per month.

The Davao Food Safety Team of the DoST-11 also helped in the plant
layout of the cooperative to adhere to good manufacturing practices.

Due to the high demand, the cooperative has graduated from a mere
supplier to a consolidator acting as a middle man between other
suppliers and business clients.

"Supply's monthly requirement is 50 tons, which will generate total
monthly sales of P450,000," Mr. Galvez explained.

Rizalie B. Calma, the former manager of the cooperative, said the
officials saw the need to improve the quality of its product after
recognizing the potential of banana flour intended for manufacturing
catsup, organic fertilizer or livestock feeds.

"Before, rejected bananas were just thrown away, left rotten, used as
food for hogs, given to indigenous peoples in the hinterlands," she said.

The cooperative's success earned it several awards such as the Gawad
Saka Award. -- Joel B. Escovilla

Business registration in Philippines now made easier

Business registration in Philippines now made easier
Philippine Business Registry launched
By: Doris C. Dumlao
Philippine Daily Inquirer
1:06 am | Friday, March 23rd, 2012

Trade Secretary Gregory Domingo (second from left) and SEC chairperson
Teresita Herbosa (right) unveil the PBR workstation at the SEC lobby.

It's not fun to register a new business in the Philippines, given the
legendary bureaucratic red tape that applicants must cut through.

No wonder then that in the latest World Bank competitiveness survey, the
Philippines ranked 136th out of 183 economies in terms of ease of doing
business.

After all, it takes weeks to collect from different government agencies
the documentary requirements needed to register a business.

Now comes the Department of Trade and Industry's Philippine Business
Registry (PBR), which promises to make the cumbersome registration
process a thing of the past and speed up the registration process to as
short as 30 minutes.
Hassle-free

The plan is to roll out a few hundred workstations offering real-time
and "hassle-free" business registration in the offices of the DTI,
Securities and Exchange Commission and some local government units (LGUs).

The PBR accepts registration for sole proprietorships as well as
partnerships and corporations.

A PBR workstation was recently set up at the SEC head office in Ortigas
and the plan is to put one in each of the seven offices of the corporate
watchdog.

Using the PBR machine, applicants for single proprietorship can get
their tax identification number (TIN) from the Bureau of Internal
Revenue (BIR) as well as employer registration numbers from the Social
Security System (SSS), Philippine Health Insurance Corp. (PhilHealth)
and Home Development Mutual Fund (PagIBIG).

During the launch of the PBR at the SEC, Trade Secretary Gregory Domingo
said the system would also seamlessly hook up with the SEC's
registration process to benefit those registering as a partnership or
corporation.

Like the single proprietors, partnerships and corporations need to
secure documents from the SSS, PhilHealth and PagIBIG, aside from
getting the business name, incorporation papers and tax identification
number from the SEC before they can start operation, and this is where
the PBR comes in.

Through the PBR, the computerized registration systems of these agencies
are interlinked so that applicants need not physically go to each agency
to register their businesses.

However, if the LGU's business permit processing system is not yet
interlinked with the PBR, then the applicant will need to go to the LGU
where the business will be set up to physically get the business permit.

Step-by-step

For sole proprietors, walk-in application through DTI teller must follow
the following steps:
1. Applicant fills out the PBR application form and submits to DTI
teller for processing.
2. DTI Teller secures applicant's TIN. (If there is an existing TIN, PBR
will validate against records).
3. Business Name (BN) Certificate and Employer's Registration Numbers
(ERNs) are processed.
A Transaction Reference Number (TRN) is presented to Cashier for payment
of BN fee.
Official Receipt of Payment is presented to the DTI Releasing Officer
for the BN Certificate.
Applicant gets SSS, PhilHealth, and PagIBIG ERNs from DTI teller.
4. Certificate of Registration or employer ID can be secured from
agencies upon presentation of PBR-generated ERNs.

For SEC-registered companies, walk-in application through teller at DTI
Office or SEC must follow the following steps, but note that only
partnerships or corporations already registered with the SEC can apply.
1.) Applicant fills out the PBR application form and submits to the
teller for encoding and processing.
2.) Applicant also submits photocopies of complete SEC registration
documents (i.e., SEC registration certificate, articles of
partnership/incorporation). Original copies are required for verification.
3.) Teller transmits application for employer registration numbers
(ERNs) to SSS, PhilHealth, and Pag-IBIG and applicant gets PBR-generated
ERNs.
4.) Certificate of Registration or Employer ID can be secured from
agencies upon presentation of PBR-generated ERNs.
Boosting competitiveness

Domingo expressed confidence that with the PBR as well as other reforms,
the Philippines should rank among the top 50 when it comes to ease in
doing business by 2016.

Each workstation costs about P250,000, and Domingo said the government
is ready to invest in a few hundred of these machines to help spur
business growth.

Domingo said the project actually started in 2006, but there was little
progress. So when the new administration assumed office in July 2010,
the DTI pushed for its more aggressive implementation.

"I thought it would be done in six months but it took much longer
because it's a very complicated system. We need to have real-time access
to the computers of five different agencies and they have five different
systems requiring different protocol. So it took a while to settle
down," he said.

With the PBR in place, Domingo said the government will now turn its
attention to implementing other reforms designed to make it easier for
businessmen to do business in this country.

To support these efforts, SEC chairperson Teresita Herbosa said the SEC
had launched its own "green lane" processing unit, tied up with the Land
Bank of the Philippines and established an extension office in Tarlac.

The SEC's "green lane" offers faster processing of applications of new
corporations and partnerships.

This green lane, however, is not available to corporations whose
subscribed capital is not paid in cash, those with more than 40 percent
foreign equity and those with secondary license issued by the SEC.

Land Bank, meanwhile, is deputized to accept, pre-process registration
requirements and collect the filing fee in its 329 branches.

"Secretary Domingo is an inspiration. This isn't just for the purpose of
a one-stop shop. It's supposed to be part of a bigger data-sharing
project among government agencies," Herbosa said.

"Once we've reached that point that we're sharing data and other
information and we have statistics on what kind of businesses are being
registered or terminated, we can use that data for economic progress,"
Herbosa added.

--
------------------------------------------------------------------------
CARLOS ANI - International Microfinance Consultant - SEEDFINANCE
Corporation Chairman
Mailing address: PO Box 90 UPLB Los Banos Laguna, Philippines 4031
Emails: carlosani@gmail.com , carlosani@seedfinance.net
Landline Phone: +63495010127 (PLDT)
Cellphone Numbers: +639152919580 (Globe) and +639328590859 (Sun)
Websites:
CARLOSANI.COM - http://www.carlosani.com
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com
My News Clippings - http://www.myclipps.posterous.com
Family website - http://www.anifamily.net
SEEDFINANCE Corporation - http://www.seedfinance.net
Skype name: carlosaniph
-----------------------------------------------------------------------

Palace agrees with World Bank report

By: Norman Bordadora
Philippine Daily Inquirer
7:19 am | Wednesday, March 21st, 2012

MANILA, Philippines— Malacañang admitted on Tuesday the continued
existence of factors—high cost of electricity and insufficient loans for
small businesses among them—that the World Bank recently said were
preventing poor Filipinos from benefiting from the country's economic
growth.Deputy presidential spokesperson Abigail Valte told a news
briefing that the administration is already dealing with these problems.

Valte said the World Bank report on the Philippines, "From Stability to
Prosperity for All," underlined the efforts of the Aquino administration
at promoting fiscal and institutional reforms.

"As we continue to move toward inclusive economic growth, we agree with
the World Bank on the need for reform in key areas, which we are acting
on," Valte said.

The World Bank's quarterly report cited the Philippines for its low
inflation rate, sustained economic growth, declining debt, stable
banking sector and comfortable amount of foreign exchange reserves.

The World Bank said, however, that the government should start spreading
the prosperity to most Filipinos instead of just being satisfied with
the positive macroeconomic developments.

Malacañang relished the World Bank's positive statements about the state
of the country's economy.

"Economic indicators are encouraging," Valte said. "So far this year,
exports have rebounded, inflation is down, job generation continues to
improve, and public spending has been intensified and fast-tracked," she
added.

Thursday, March 22, 2012

Thrift banks urged to lend more to small businesses

Thrift banks urged to lend more to small businesses
By: Michelle V. Remo
Philippine Daily Inquirer

12:12 am | Thursday, March 22nd, 2012

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. has urged
thrift banks to lend more to micro, small and medium enterprises
(MSMEs), stressing the crucial role of banks in helping achieve the
country's poverty reduction and economic development goals.

In a speech during the annual convention of the Chamber of Thrift Banks
(CTB), Tetangco said the resources of thrift banks had been growing,
fueled by increasing deposits from the public.

Given this, he said, the thrift banking sector had the ability to
further accelerate growth in lending.

"The resources of thrift banks—deposits, loans and capital—have all
grown substantially. Thrift banks can help more deserving MSMEs,"
Tetangco said.

He stressed the importance of MSMEs in economic development, saying they
accounted for the bulk of employment in the country.

Government estimates show that MSMEs employ about 70 percent of the
labor force in the country.

"The MSME sector provides employment for most Filipinos; it is, in fact,
the backbone of our economy. This is where members of CTB can make a lot
of difference in terms of moving our economy forward," Tetangco said.

Data from the BSP showed that as of September 2011, there were 70
players in the country's thrift banking industry with 1,394 head offices
and branches.

Outstanding loans from thrift banks stood at P367.89 billion as of the
same period, up by nearly 7 percent from P344.58 billion in the same
period in 2010.

Tuesday, March 20, 2012

RCBC acquisition of leasing firm OK’d

RCBC acquisition of leasing firm OK'd

YUCHENGCO-LED Rizal Commercial Banking Corp. (RCBC) has obtained the
approval of the Bangko Sentral ng Pilipinas (BSP) for its purchase of a
100% stake in First Malayan Leasing Finance Corp. (Malayan Leasing),
another subsidiary of the same group of companies.

In separate disclosures to the stock exchange on Monday, RCBC and the
House of Investments, Inc. said the central bank on March 15 approved
the "request of RCBC for authority to acquire 100% ownership in [Malayan
Leasing] from its selling shareholders and to infuse P163.2 million in
new capital into [Malayan Leasing]."

The House of Investments held a 45.11% share in Malayan Leasing.

"We believe there is a strong prospect in the leasing business,
especially in the SME (small- and medium-scale enterprises) client base
of RCBC and we believe there will be opportunities and increased
interest from companies and high net worth individuals taking and
operating leases on vehicles," said John G. Deveras, RCBC executive
vice-president and head of strategic initiatives, in a phone interview
on Friday last week.

MORE AGGRESSIVE

The whole transaction -- including the infusion of the new capital -- is
worth about P710 million, Mr. Deveras said.
RCBC's acquisition of Malayan Leasing was approved by the latter's board
of directors in February 2005.

"The new capital will be used to fund the operations and innovations
that RCBC will do as we aim to be more aggressive in going after leasing
clients," he said.

Since RCBC will take over the management of Malayan Leasing only this
year, Mr. Deveras said, the commercial bank "does not expect Malayan
Leasing to significantly contribute to RCBC's income until 2013."

Malayan Leasing, he said, will be a separate subsidiary of the bank and
will be renamed "RCBC Leasing."

Malayan Leasing is a non-bank financial institution with quasi-banking
license. It serves the requirements of corporate, commercial and
consumer clients through loans, leases and investment products.
It became a subsidiary of the House of Investments in October 1995.
Malayan Leasing offers finance leasing; operating leasing; receivables
financing; inventory financing; fixed-assets financing; multi-purpose
salary loan; car financing; and money market placement.

EARLIER MERGERS
Last week, RCBC also secured the central bank's approval to merge its
two bank subsidiaries, the Rizal Microbank and Pres. Jose P. Laurel
Rural Bank, Inc., with the former as the surviving entity.
RCBC shares closed at P42.20 apiece yesterday, 0.12% or 0.05 centavos
less than their P42.25 finish on Friday last week. -- A. R. R. Gregorio

Reforms urgently needed

"A HUGE WINDOW of opportunity" needs to be seized by the government if
it is to implement reforms that will accelerate growth and reduce
poverty, the World Bank yesterday said.

An improvement in public finances and overall competitiveness, the
Washington-based institution said in its Philippines Quarterly Update,
will allow the country to achieve "rapid and sustained growth of above
5% for a long period of time."

For the meantime, the Bank said it was keeping its 4.2% gross domestic
product (GDP) growth forecast for this year -- issued last December --
and announced that the expansion would likely pick up to 5% in 2013.

"A huge window of opportunity currently exists for speeding up critical
reforms," World Bank Country Director Motoo Konishi said in a statement.

"Besides having strong macroeconomic fundamentals, the country is
benefitting from political stability and a popular government that is
seen by many as strongly committed to improving governance and reducing
poverty," he added.

The focus, the report suggested, should be on three areas: strengthening
public financial management, increasing tax revenues and enhancing
competitiveness.

Mr. Konishi claimed the government had already made some inroads but
added that "putting greater urgency... will go a long way in boosting
growth that benefits the poor. It's an opportune time for the country to
move up to the next level."

The report noted that the 4.2% and 5% growth outlooks, should a global
slowdown persist, would be supported by investment and government spending.

"However, such a stimulus can only be sustained if matched by higher tax
revenues. The Executive's effort to strengthen tax administration and
push for the immediate passage of the tobacco and alcohol excise and
fiscal incentives bill are steps in the right direction."

It noted that the window was "narrowing," especially since mid-term
elections will be held next year and followed by another in 2016,
occasions that will revive the "historical difficulty of moving forward
with reforms when the campaign period kicks in."

"Enactment of the two crucial tax reforms, together with further
improvements in tax administration, is projected to add 0.5 and 0.6 ppt
of additional tax revenues in 2012 and 2013, respectively, resulting in
a tax effort of 12.8% and 13.4% of GDP (compared to 12.4% to 12.5% of
GDP if no policy reforms are enacted," the report states.

"Taking past experience into account, the coming 2013 general elections
makes tax legislation much more difficult, hence the urgency of getting
this key tax reform measures passed by mid-year," it adds.

World Bank country economist Karl Kendrick T. Chua, the main author of
the report, said the institution supported House Bill 5727, which
proposes that tax rates on tobacco and alcohol be based on current
prices and be regularly updated.

The Bank is also pushing for the rationalization of fiscal incentives
granted to corporations doing business in the country, Mr. Chua said, as
"some of them have been shown to be redundant."

Both measures are now pending in Congress and Cabinet officials have
highlighted the need to have these passed before legislators end their
current session.

Asked to comment on the World Bank's growth outlook, National Economic
and Development Authority Deputy Director-General Ruperto P. Majuca said
the forecasts were "very low."

"We anticipate that, sooner or later, they may have to increase their
GDP growth forecast," Mr. Majuca said in an e-mail.

He said the government was maintaining its 5-6% GDP growth forecast for
this year, with recent data indicating that full-year growth would be at
the higher end of the range.

"The acceleration of government expenditure will be a major factor,
including substantial increases in infrastructure and capital outlay.
Both budget allocation and execution will show significant increases."

World Bank lead economist Rogier J. E. van den Brink said employment
prospects were expected to improve given increased public spending and
continued industry growth.

"Higher infrastructure spending is expected to create tens of thousands
of new jobs in the construction and trade sub-sectors while continuous
growth of the BPO (business process outsourcing) industry is expected to
generate 100,000 new jobs this year," he said.

"However, structural reforms are needed to create more and better jobs
in the year ahead."

IIF Sees Sustained Philippine Expansion

By CHINO S. LEYCO

March 16, 2012, 2:49am

MANILA, Philippines — The Institute of International Finance (IIF) is projecting that the Philippine economy would grow 5.8 percent this year and 7 percent in 2013 due to its stable macroeconomic fundamentals amid global uncertainties.

In its latest report, IIF said that the country’s macroeconomic stability has bolstered its gross domestic product (GDP) against recurrent turmoil in the global financial markets and should pave the way for a strong revival in growth over the near term.

“The drag on growth from exports should soon run its course, while accommodative monetary measures should help stimulate domestic demand,” IIF said after the country’s exports grew by 3 percent in January after eight consecutive months of contraction.

IIF also said that the Aquino government's success in containing its budget deficit gives the Bangko Sentral ng Pilipinas’ (BSP) monetary authorities “considerable latitude.”

IIF said the BSP’s overhaul of the liquidity management regime was long overdue and is a positive step forward that may not be fully appreciated by the markets, adding the further reductions in the reserve requirement during the year are likely to be forthcoming.

“The change should have broader positive ramifications for the economy and for the conduct of monetary policy after the initial adjustment. A lower reserve requirement and strong loan growth also suggest the authorities will be cautious in cutting policy rates, although another 25 basis-point reduction may come by midyear,” IIF said.

Meanwhile, the Department of Finance earlier reported that the national government’s budget deficit was 2 percent of GDP last year, down from 3.5 percent in the previous year, while its total debt was around 50.9 percent from a peak of 74 percent in 2004.

“The government still needs to provide much more extensive public services than it does at present, so the key to fiscal sustainability will continue to rest on an overhaul of the archaic and inefficient tax region rather than on spending restraint,” IIF said.

“Nevertheless, the benefits from maintaining macroeconomic stability should soon pay off in terms of stronger growth for the economy,” it added.

--  ------------------------------------------------------------------------ CARLOS ANI - International Microfinance Consultant - SEEDFINANCE Corporation Chairman  Mailing address:  PO Box 90 UPLB Los Banos Laguna, Philippines 4031 Emails: carlosani@gmail.com , carlosani@seedfinance.net  Landline Phone: +63495010127 (PLDT) Cellphone Numbers: +639152919580 (Globe) and +639328590859 (Sun) Websites:  CARLOSANI.COM - http://www.carlosani.com  DEVJOBS        - http://www.devjobsmail.com  PHILDEVFINANCE - http://phildevfinance.posterous.com   My News Clippings - http://www.myclipps.posterous.com  Family website  - http://www.anifamily.net SEEDFINANCE Corporation - http://www.seedfinance.net Skype name:  carlosaniph  -----------------------------------------------------------------------

Philippines Poised For BPO Leadership

March 18, 2012, 12:07am

MANILA, Philippines — The Philippines is positioned to expand in
non-voice services and narrow India's lead in business process
outsourcing, the Asian head of the world's largest provider of contact
services Teleperformance said.

"The Philippines is certainly ready for non-voice services. It is
already demonstrating its capability for non-voice activities, be it IT
engineering service offering support, animation, human resources and
knowledge process outsourcing," David Rizzo, president for Asia-Pacific
of Teleperformance, said during the Asia CEO Forum. "There are companies
that specialize only in non-voice. I would expect the Philippines to
grow well in this market in relation with India."

The Asia CEO Forum is the largest networking activity for multinationals
and local business leaders organized to promote the Philippines as a
leading business destination in Asia. At the March 15 edition, some 150
leaders of top business organizations were in attendance at the
DusitThani hotel in Makati.

A growth in non-voice activity would help the Philippines grab a bigger
share of the global outsourcing and offshoring industry that research
company Everest Group estimates to expand up to $280 billion this year.
The Philippines last year overtook India as leader in call center
services in revenue and employment.

Everest Group estimated the Philippines' contact services to have earned
$7.38 billion in exports last year, surpassing India's $7 billion. The
Philippines' call centers employ about half a million, compared to
India's 350,000. However, India's BPO industry still led the market with
nearly $15 billion in income, versus the Philippines' $9 billion. A
Philippine industry road map aims to double the country's revenue and
number of seats by 2016.

Teleperformance, which operates its largest English contact services
location in the Philippines, is bullish on its growth prospects here.

"Our growth strategy is continue to focus on the Philippines being a
premier solution for English language offerings for our markets in the
US, United Kingdom, Australia and Canada," Rizzo said yesterday. "We are
identifying new field locations across the country to support the
expected growth of demand in market."

Rizzo, an American who has stayed in the Philippines for nine years and
also oversees Teleperformance's operations in China, India, Vietnam and
Singapore, said confidence in the industry is being boosted by efforts
of the government and the private sector to address the labor supply lack.

"Fortunately, there are industry association groups like the BPAP
(Business Process Association of the Philippines) that are going through
the appropriate channels to bridge the gap and ensure that the pipeline
is extended," he said. Rizzo said the government's plan to introduce two
additional school years in the basic education system, with emphasis on
English education, will "open up annual available labor supply beyond
what it is today."

The Asia CEO Forum focuses on key issues that cut across various industries.

US firm to invest over $2.6 B in Phl

By Neil Jerome C. Morales (The Philippine Star) Updated March 20, 2012
12:00 AM

MANILA, Philippines - Texas-based Quantum International Group Inc. plans
to invest more than $2.6 billion on five plasma gasification plants in
the country that can produce as much as 13,000 megawatts (MW) of
electricity, a top company executive said.

Five more plasma gasification plants using industrial waste will be put
up, and this can cut the cost of electricity by 25 percent in five
years, Quantum International president and chief executive Al Johnson said.

He said the benchmark investment will be $250-$300 million for a plasma
plant that can gasify 1,000 metric tons (MT) of garbage, $450 million
for the 2,000-MT plant and $850 million for a 4,000-MT unit.

The plasma technology gasifies materials like coal and industrial waste
at 5,000 to 7,000 degrees Celsius, then converting it to electricity.

For every MT of garbage, Quantum can produce 800 kilowatts up to one MW
of electricity.

Johnson said initially, four plasma plants capable of gasifying 2,000 MT
of garbage per day will be put up in Davao and Surigao del Norte. A
plant with the capacity of gasifying 5,000 MT of garbage per day will be
built in Surigao del Norte.

To date, the Luzon, Visayas and Mindanao grids have a peak demand of
7,047 MW, 1,350 MW and 1,256 MW, respectively.

"The only thing that we require is garbage. We need long term contracts
with a minimum of 1,000 MT per day," Johnson said.

Quantum is already in talks with local government units for the garbage
supply.

Johnson said the company also wants to sell electricity at market prices.

Given the amount of power that will be produced by the firm, Johnson
said "in five years, rates in Philippines will drop 25 percent, then two
years more, 50 percent."

This will help local industries to be more competitive as the country's
electricity cost is the highest in Asia, he said.

Johnson said the ports in Surigao del Norte and Bataan can be used to
import garbage for more power production.

The plasma gasification technology was developed by the US military in
the 1960s to get rid of unstable emissions and explosives.

"The nice thing about plasma for non-military purposes is we can get rid
of hazardous and toxic compounds," Johnson said.

Deadly elements in the industrial world include heavy metals,
radioactive wastes, industrial sludge, asbestos and medical waste.

A plasma gasification plant can start commercial operations after 18
months of construction, Johnson said.

To date, Quantum is building a plant in Brunei, Malaysia, Bangladesh and
South Africa.

Johnson said the company will fund, own and operate plasma gasification
plants while allotting five percent of net revenues to host communities.

Quantum International, which is also into construction, low-cost
housing, mining operations, military and police contracts and joint
venture commercial project in the US, is backed by five investment trust
funds.

House approves tax incentives for alternative-fuel vehicles

By Jess Diaz (The Philippine Star) Updated March 20, 2012 12:00 AM

MANILA, Philippines - The House of Representatives has approved on
second reading a bill granting tax incentives for the manufacture,
assembly, conversion, and importation of electric, hybrid and other
alternative-fuel vehicles.

The bill titled "An act granting incentives for the manufacture,
assembly or importation if electric, hybrid or alternative vehicles"
aims to promote the use of hybrid vehicles to lessen the country's
dependence on oil and protect the environment from harmful carbon emissions.

It also aims to bring down the cost of such vehicles, which at present
is beyond the reach even of taxpayers belonging to the middle class.

The final bill is a consolidation of several measures authored by
Representatives Rufus Rodriguez of Cagayan de Oro City, Maximo Rodriguez
of the party-list group Abante Mindanao, Hermilando Mandanas of
Batangas, Jose Zubiri III of Bukidnon, Albert Garcia of Bataan, and Ryan
Luis Singson of Ilocos Sur.

The measure defines "electric vehicle" as any vehicle that uses an
electric motor solely for propulsion while "hybrid vehicle" refers to
any vehicle that combines the technologies of using an internal
combustion engine with a battery-powered electric motor to gain the
advantages of both propulsion systems.

On the other hand, "alternative fuel vehicle" pertains to any vehicle
using alternative sources of energy such as but not limited to solar,
wind, hydrogen fuel cell, compressed natural gas, liquefied natural gas,
and liquefied petroleum gas.

The bill exempts the payment of excise taxes and duties for nine years
on the manufacture or assembly of electric, hybrid and other alternative
fuel vehicles, including the conversion of vehicles into electric,
hybrid and other alternative fuel.

It also exempts payment of value-added tax (VAT) for nine years on the
importation and sale of raw materials, spare parts, components, and
capital equipment used in the manufacture or assembly of electric,
hybrid and other alternative fuel vehicles, including the conversion of
vehicles into electric, hybrid and other alternative fuel.

The consolidated bill likewise exempts the payment of excise taxes and
duties for four years on the importation of completely built units of
electric, hybrid and other alternative fuel vehicles.

Draft capital hike affects composite, microinsurers

By Ted P. Torres (The Philippine Star) Updated March 20, 2012 12:00 AM

MANILA, Philippines - Composite insurance firms as well as
microinsurance-oriented insurers are likewise affected by the proposed
increase in minimum paid up capital.

The proposed order increases the capital level for composite license
holders to P2 billion from the existing P250 million, plus an additional
P100 million as contributed surplus.

A composite license is issued to a company that sells both life and
non-life insurance policies under one roof.

There are four composite license holders based on data lifted from the
Insurance Commission (IC). These are: the AsianLife and General
Assurance Corp. (ALGA), Climbs Life and General Insurance Cooperative,
Paramount Life and General Insurance Corp. (Paramount Life), and the
Philippine American Life and General Insurance Co. (Philam Life).

Also affected are companies that issue microinsurance products or sell
insurance products that fall under the definition of microinsurance "as
defined under Insurance Memorandum Circular (MC) 9-2006 and 1-2010, and
obtaining direct premiums on microinsurance products amounting to at
least 50 percent of its aggregate direct premiums on all its lines of
business."

Affected are life and non-life insurance companies that market
microinsurance, as well as 20 licensed mutual benefit associations
(MBAs) and cooperative insurance societies. The proposed paid up capital
requirement is P500 million.

Meanwhile, the draft order states that a mutual insurance company must
also "have available cash assets of the same amount as the paid up
capital of an insurance company."

It is basically referring to the Insular Life Assurance Co. (Insular
Life), the only mutual insurance company in the Philippines.

The existing regulations regarding the capitalization of the industry –
DO 27-06 – will expire at the end of 2012. By then, the minimum paid up
capital requirement will be pegged at P250 million.

"It was already delayed by one year," Dooc said in the public hearing
last Thursday at the IC headquarters. A second public hearing is
scheduled on March 22 after which the position papers will be
consolidated with a separate position or comment by the commission.

It will in turn be presented to Finance Secretary Cesar V. Purisima for
final comment. "That should result in the DO but we would be inviting
the industry representatives to join us (IC) in making the
presentation," the IC head said, hinting that the new DO would be
released "sooner-than-later."

The draft DO increases the minimum paid up capital from P250 million to
P1 billion by end 2016. Or a staggered increase of from P250 million end
2012 to P450 million the following year. Then it will be increased to
P625 million by end 2014, P800 million in end 2015, and finally to P1
billion by December 2016.

Published IC data as of 2010 shows that PhilamLife already have paid up
capital worth P1.9 billion. The next nine players have capital of over
P350 million, and the next 10 players reflecting an average of P250 million.

The top 10 life insurers already account for over 80 percent of the
business.

In 2010, the minimum paid up capital required by DO 27-06 was P125 million.

The IC data for the 86-strong non-life insurance industry show that
Malayan Insurance Co. with a paid up capital of P845 million, and the
next four with an average capital of over P550 million. From the next 40
it averages at P125 million.

The top 30 non-life insurers also account for 80 percent of that
segment's business.