Clark – fastest growing investment destination

Clark is a new and bustling metropolis, and is the fastest growing investment destination in the Philippines today. it is strategically located from key trading points and financial centres, a vital factor that can ensure prompt delivery of services and goods to major destinations in Asia and the world over.

It has a total land area of 31,400 hectares and is located in a region with one of the highest population and best literacy rates.

Clark has its own international airport and is master-planned to suit a work-live-play environment in one contained community.

It is considered as a major gateway to the Philippines with about 4 hours travel time to key cities in Asia and with regional flights that have onward connections to the world.

Clark has its own Freeport and nearby Special Economic Zone where there are enormous business opportunities in manufacturing, electronics, information technology, business process outsourcing, among the many profitable industries.

For more information see http://www.clark.com.ph

Build, build, build

A country of notorious traffic jams may soon start to unclog.

So says The Economist in January 2020.

Should you get up at 4am to get to work  on  time,  or  risk  waiting  until  five?  That is the .question confronting many commuters in Manila, the capital of the Philippines, which has some of the world’s worst traffic jams. Geography is one reason. The 2m people trying to get in and out of the metropolis each day must squeeze into a narrow strip between the sea on one side and a lake and hills on the other; But poor urban planning and a dearth of infrastructure investment in recent decades have compounded the problem. Filipinos spend 16 days a year stuck in jams, according to the Boston consulting Group. The World Economic Forum ranks the Philippines 96th of141 countries tor the quality of its infrastructure. Nearby Indonesia, another nation of thousands of islands, is 72nd.

On January 17th the public-works minister announced that by the time President Rodrigo Duterte leaves office in 2022, he wants to have cut the number of cars that pass along the city’s main artery each day bv a third. Such bold declarations have been characteristic of Mr Duterte’s approach to infrastructure. When he became president in 2.016 he considered demanding emergency powers from Congress to help him deal with the traffic. In the end, he settled instead on a long-term scheme to spend 9trn pesos ($177bill) on new- infrastructure called ”Build, Build, Build”. The focus on construction represents a “very bold shift in government priority”, believes Vince Dizon, a presidential adviser.

As the jams in Manila suggest, not much has shifted yet. Such change is corning, “Build, Build, Build” involves 100 big projects. Construction is under. way on almost half of them. In 2018 the government

introduced a law to cut red tape in permitting, partly to speed up infrastructure investments. Some planning committees are meeting three times as often as they used to. Twenty projects were approved in the final three months of last year, says Mr Dizon. Impractical schemes promoted by the president, such as a plan to link all the main islands of the Philippines by bridge, have been quietiy set aside.

One of the biggest projects still in the works is New Clark City, which is eventually supposed to house um people and lots of government offices, in an effort to ease traffic in nearby Manila. The city was planned under Mr Duterte’s predecessor, but embraced by him in an unusual display of political continuity. The first phase was completed in November. Mr Duterte has also presided over the opening of a new airport in the province of Bohol, and of the Philippines’ largest passenger-ferry terminal on his home island of Mindanao.

Spending on infrastructure has roughly doubled since the president took office.

The plan is for it to reach 7% of GDP up from 2.6% in 2015 (see chart on next page). The austere policies of past presidents have left Mr Duterte scope to borrow. Public debt is around 41% of GDP. He has introduced a series of sensible tax reforms, which are expected to help boost government revenue, and diversified the Philippines’ sources of funding. Japan has provided some $12bn in recent years. The Asian Development Bank(ADB) is so enthusiastic about Mr Duterte’s infrastructure plans that last year it lent the Philippines more than any other country bar India. China has also promised $9bn for infra” structure, although it has signed formal agreements to provide only $9oom.

Public-private partnerships are also being used. More than a quarter of big projects under “Build, Build, Build” will involve private investors. Ensuring that the terms of concessionary  agreements are fair, however, has been an obsession of Mr Duterte’s administration. The president’s ongoing spat with two water companies in Manila over their contractual rights is a case in point. Shares in one of the firms, Manila Water, dropped to a 14-year low at the height of the furore last month. That may worry companies that are thinking about joining the infrastructure push.

The government says that by the middle of 2022 roughly half of the 100 “Build, Build, Build” projects should have been completed. Kelly Bird of the ADB says even finishing 30 would make the programme “hugely successful”; Filipinos are well aware. of Mr Duterte’s efforts. A survey by Pulse Asia, a pollster, for December found that 69% of respondents thought his government was doing a “better” job of developing infrastructure than its predecessor.

Obstacles will mount as Mr Duterte nears the end of his time in office, however, and his political power begins to ebb. And once he steps down there is no certainty that his successor will complete his plans. New presidents in the Philippines often kill projects initiated by their predecessors. In 2011 Benigno Aquino, the president of the day, cancelled 66 of.72 car-ferry ports planned by the previous president, Gloria Arroyo, alleging corruption. With luck, though, Mr Duterte’s successor will see the benefit in inheriting dozens. of partially constructed projects and a host of shovel-ready ones. A bulging pipeline of sensible projects could

PBBC Visit February 2020

Philippine British Business Council set to hold trade mission to PH

Chris Nelson, President of the British Chamber of Commerce, interviewed by ANC

Philippines Economy February 2020 Update

• The Philippines’ GDP posted a year-on-year growth of 6.4 per cent in the fourth quarter of last year, resulting in 5.9 per cent full-year growth for 2019. The main drivers for growth in the fourth quarter were the trade and repair of motor vehicles, motorcycles, and personal and household goods as well as manufacturing and construction. Among the major economic sectors, services posted the fastest growth at 7.9 per cent.

• With the country’s projected population reaching 108.7 million in the fourth quarter of 2019, per capita GDP grew by 4.8 per cent.

• The compounded annual growth rate (CAGR) of the PH merchandise for the total trade to the UK from 2017 to 2019 is at 4.8 per cent. PH exports to the UK increased by 2.43 per cent from 2017 to 2018, due to the increase in the shipment of (1) tunas, skipjack and bonito, (2) other pulps of fibres, and (3) other electrical apparatus. Similarly, PH imports from the UK rose by 31.35 per cent due mainly to the increase in the importation of (1) parts of aeroplanes or helicopters, (2) transistors, and (3) spark-ignition reciprocating or rotary internal combustion piston engines for aircraft.

• In 2018, the UK was the Philippines’ 22nd trading partner (out of 222), 18th export market (out of 213) and 22nd import source (out of 198).

• Tourist arrivals from January to November 2019 totalled 7.48 million with a growth rate of 15.58 per cent. The UK remains the largest source of tourists from Europe and the 8^th largest market globally with 187,164 visitors arriving from Britain last year.

• The World Bank released its “Doing Business 2020” report, wherein the Philippines made a significant improvement from rank 124 out of 190 economies, to rank 95 with a score of 62.8 in this year’s report. This was the most significant improvement among ASEAN countries.

• The report highlights the following reforms undertaken by the Philippines that has made it easier to do business in the country, including:

• The Philippines made starting a business easier by abolishing the minimum capital requirement for domestic companies;

• The Philippines made dealing with construction permits easier by improving coordination and streamlining the process for obtaining an occupancy certificate; and

• The Philippines strengthened minority investor protections by requiring greater disclosure of transactions with interested parties and enhancing director liability for transactions with interested parties.

The Philippines Inflation Rates

Opportunities in The Philippines for UK Companies

Economic information Courtesy of the Philippines Embassy, London

Graphic Courtesy of the British Chamber of Commerce, Manila