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Philippine govt pins hopes on revival of manufacturing, plans big boost to country's infrastructure programme
The Philippine government is confident that a solid foundation is being laid for the Philippines to rebuild its manufacturing industry and retake its position as one of Southeast Asia’s leading exporters.
The revival of the country’s manufacturing sector will allow the economy to experience the kind of growth that leads to more jobs and higher income levels, Socioeconomic Planning Secretary Arsenio Balisacan said.
The country’s healthy growth in the past three years, driven largely by remittances that fuel domestic demand, has helped improve the Philippines’ image from one that is marked by mere booms and busts.
“We can still get back our manufacturing industry,” Balisacan said during an interview with Inquirer editors and reporters.
The country will need a favourable investment climate if it hopes to “sustain confidence in the economy,” he added.
In line with that goal, he said, the administration plans to further boost its infrastructure development programme to address major bottlenecks, particularly in the transportation and energy sectors.
“If there is any single factor that investors are looking at, not just foreign but even our own domestic investors, it’s the quality of our infrastructure and backlogs of all kinds, from power to transportation, from airports to piers,” Balisacan said.
The government plans to raise infrastructure spending to 20 per cent of the national budget by next year from this year’s 16 per cent. By 2016, President Benigno Aquino III’s last year in office, spending may stand at 25 per cent of the national budget, the equivalent of roughly 5 per cent of gross domestic product. – Philippine Daily Inquirer/ANN
Singapore exports fall for the fifth month in a row
Exports fell for the fifth straight month in June, capping one of the worst periods for Singapore’s shipments since the 2009 recession.
Non-oil domestic exports tumbled 8.8 per cent last month compared with the same period last year, said trade agency IE Singapore.
The surprisingly weak performance prompted some economists to warn that the latest economic estimates for the April to June period could get downgraded.
Flash estimates last week showed that the economy grew 3.7 per cent in the quarter over the same three months last year.
But Barclays Capital economist Joey Chew said: “Indeed, we think the advance estimate of second-quarter GDP, which is based on data for April-May, will be revised lower next month once June indicators are incorporated.”
Nearly all the major products saw declines, with electronics shipments diving 12.4 per cent and non-electronic items, such as pharmaceuticals, slumping 7.1 per cent.
The picture was no better when it came to export markets, with exports down sharply in all major markets except China.
Shipments to Europe fell 33.6 per cent, but rose by 7 per cent to China. But that bright spot may not stay for long, especially as the country’s economy is cooling, said Bank of America Merrill Lynch economist Chua Hak Bin.
“Slowing growth in China may translate into weaker exports later in the year. Sluggish external demand will continue to weigh on Singapore’s growth prospects,” he said. – The Straits Times/ANN
Amway set for calcium drive in second half
Amway is driving forward its Nutrilite dietary supplements business in the second half of this year by launching “Nutrilite Cal Mag D” after recording impressive brand sales of more than Bt6 billion in 2012.
Figures have shown a worrisome finding that Thai people have a calcium intake less than half the recommended amount per day.
The company will, therefore, build public awareness and educate young generation consumers about proper bone care through a “Health & Beauty Check” campaign, in which free bone mineral density test will be offered to 500 people from July 24 to August 24, Kittawat Ritteerawee, managing director of Amway (Thailand) said.
THAI to lower projections for the year after disappointing Q2
Thai Airways International will slightly revise down its financial performance projection for 2013, but declined to reveal details.
The national carrier said its revision came after a disappointing sales performance in the second quarter of this year, hurt by the baht appreciation, as well as a weakening euro and yen, which are major foreign currencies for the company’s earnings.
Its previous sales projection for 2013 was Bt220 billion, with net profit of Bt6 billion.
However, Sorajak Kasemsuvan, the company’s president, said the firm would work even harder to achieve such a target in the second half of this year, and remained optimistic.
On July 27, the firm will launch a workshop to discuss ways to achieve success and also minimise operation risks with the management team. Corporate changes to cope with changes in the industry will be in focus at the forum, too.
In the second half, Japan and China are considered money-spinners for THAI. Under the plan, the firm will launch a new route and also increase flight frequency to Japan, thanks to the visa exemption for Thai travellers. In China, the airline is looking for new cities to fly to. In Europe, the firm is considering delaying opening new routes that have not shown business opportunities.
SME Bank in bid to alleviate wage
The Small and Medium Enterprise Development Bank of Thailand (SME Bank) has Bt3 billion to extend loans to small SMEs for working capital, liquidity management and business improvement with a maximum credit amount of Bt1 million.
SME Bank president Manoonrat Lertkomolsuk said that the bank, in collaboration with the Office of Small and Medium Enterprises Promotion, aimed to extend the loans to SMEs to relieve the impact on them from the hike in minimum daily wage to Bt300 from the beginning of this year.
The maximum credit amount is Bt1 million per person and needs to have the Thai Credit Guarantee Corporation (TCG) as guarantor.
Under this credit programme, the Office will make 3 per cent interest payment in the first year.
Among 12 business groups eligible for the loans are textiles and garment, and food and beverages with head office or operations or factories in 51 affected provinces in the North, Northeast and South.
Small SME loans are extended from now to December 31, 2013 or until the depletion of the credit amount.
KFC swears by food-safety
KFC has reaffirmed its food-safety policy of selecting only trustworthy suppliers whose every process is traceable to ensure safety.
The rice used at every KFC restaurant is clean, safe and free from contamination, sourced from suppliers who have passed recognised standards such as Good Manufacturing Practice, Hazard Analysis and Critical Control Points, BRC, Halal, ISO9001, ISO14001 and contamination test. Ingredients are tested in laboratory to detect levels of pesticides, mycotoxin, microbiological toxin and heavy metal to make sure that its safety standard is strictly followed, a statement said.
Regarding the current issue of methyl bromide in rice, which has maximum residue limits of 50mg per a kilo of rice, as stated by the Codex Alimentarius Commission, KFC confirms that the rice used at every KFC restaurant has less than 5mg of methyl bromide residue per kilo of rice, which is significantly better than the standard, the statement added.
“Hygiene and safety are our top priorities, and this is the policy that KFC worldwide adopts and adheres to in our products and services,” the statement said.
Stable outlook for Glow, bonds
TRIS Rating has affirmed the company and guaranteed debenture ratings of Glow Energy PLC (Glow) at “A”. The outlook remains “stable”.
The ratings reflect the company’s proven track record in the power generating industry in Thailand, reliable cash flows from long-term power purchase agreements (PPA) with the Electricity Generating Authority of Thailand (EGAT), and long-term contracts with a diverse group of industrial customers. These strengths are partially offset by customer concentration risk, as most of Glow’s customers are in the petrochemical industry and are located in the Map Ta Phut area. The “stable” outlook reflects the expectation that Glowwill receive reliable streams of cash from its long-term power sales contracts with Egat and its industrial customers. The Gheco-One, coal fired power plant, is expected to achieve its performance targets after its first year in operation and will provide a reliable cash flow stream for Glow in the coming years.
