The Manila Times’ 3rd Business Forum held at the New World Manila Bay Hotel on February 23, 2016 marked another milestone for the 117-year old newspaper. With more than 200 business delegates in attendance – coming to hear the speeches of the country’s Central Bank governor and the International Monetary Fund and the World Bank representatives to the Philippines on the “Economic and Business Outlook for the Philippines in 2016,” the Forum was hailed a big success.
Dante Francis “Klink” Ang, The Manila Times’ president, CEO and executive editor, said the forum helped steer the discussions toward the opportunities business groups seek amid the global and domestic threats that continue to lurk ahead. “The Manila Times has always been committed to delivering quality information, whether in the daily paper or our forum series.”
The keynote speaker, Philippine Central Bank Governor Amando Tetangco Jr., who is credited with strengthening the Bangko Sentral ng Pilipinas’ ability to promote growth and stability, tackled the issue of how the BSP’s monetary policy guides the economy and financial markets in sustaining resilience against the prevailing global and domestic headwinds.
Tetangco said the country’s monetary authorities have the policy space to respond to the external and domestic headwinds facing the economy this year. Factors spurring the uncertainty, he said, include the slowing Chinese economy, the speed and magnitude of the US Federal Reserve’s planned rate hikes and low global oil prices. Domestically, these involve the prolonged El Niño weather pattern, which has hit the agriculture sector significantly and threatens prices, and the existence of infrastructure gaps.
“We have the policy space to respond to uncertainties … We will, therefore, make adjustments in the stance of policy as conditions warrant,” he said in his keynote speech.
Tetangco also said the infrastructure gap provides a great opportunity for the private sector. “The private sector can look at the opportunities through the needs of the economy. Let me cite, for instance, infrastructure. That is one clear gap that can really improve the long-term prospect of the economy,” he said. “Banks for instance… They can participate, they can be more active in project finance.”
Estimates by Asian Development Bank show that the Philippines’ infrastructure financing needs from 2010 through 2020 amounts to $127.12 billion, requiring an annual investment of $11.56 billion.
The government aims to raise infrastructure investment by 5 percent this year.
The International Monetary Fund Resident Representative to the Philippines, Shanaka Jayanath Peiris, discussed the opportunities and challenges faced by the economy while sustaining its growth takeoff.
Peiris said the slowdown in the Chinese economy as it “rebalances” itself may not have a very heavy impact on the Philippine economy but the government needs to focus on the investment side to strengthen domestic growth.
He told reporters on the sidelines of the Forum the government should also consider implementing a simplified taxation system and review its incentives program to improve the country’s business environment.
Acting as a reactor to Peiris’ speech at the Forum, Marivic Espano, chairperson and chief executive officer at Punongbayan & Araullo (Grant Thornton), said, “Most investors and businessmen are willing to comply with their respective tax liabilities, but the problem is with the present system, interpretation of tax laws changes from time to time. We need it to be much stable,” Espano said.
Rogier van Den Brink, the World Bank’s Lead Economist in the Poverty Reduction and Economic Management of the East Asia and Pacific Region, talked about the challenges of inclusive growth, saying that merely achieving growth by the numbers was not enough.
“Growth may be necessary, but it is not sufficient to ensure poverty reduction,” he stressed.
The World Bank economist said the government’s inclusive growth agenda should focus more on structural transformation in agriculture; the role of small and medium enterprises in the economy; the potential of the shipping industry; and reforms in rice policy and taxes.
Van den Brink said the drop in poverty incidence was supported by falling unemployment and underemployment, at 5.7 percent and 17.6 percent as of October 2015, respectively.
He pointed out that sustaining current economic growth and the poverty reduction trend placed the government’s poverty incidence target of 18 percent to 20 percent in reach.
“And if the trend is sustained over the long run, poverty can be eradicated within one generation. Sustaining growth of 5 percent to 6 percent per year is enough to double per capita income within one decade, raise it by five times in two decades, and by 11 times in three decades,” he said.
The last speaker, Marife Zamora, Convergys Philippines Services Corporation chairman, highlighted the role of the Business Processing Managers (BPM) industry in helping sustain the country’s economic growth.
Citing Convergys’ growth in the Philippines, Zamora said the BPO industry is one of the fastest-growing sectors in the country today.
“When we [Convergys] started here in the Philippines, we had 20,000 employees,” Zamora said. “We grew 300 percent to 60,000 today.”
She said the local BPO industry in the Philippines is indirectly buoying the economy with employees contributing to the growth of consumer and household spending.
The government’s move to adopt the K-to-12 education program will further boost the booming BPO industry in the country, she added.
An elite roster of reactors from key private industries and institutions that monitor the country’s economic pulse and other relevant indicators provided the links between policy, economic/business principles and problem-solving on the practical level. (See related story on pages 6 and 7) for the quotable comments from the panel of reactors that consisted of Greg Navarro, Deloitte Phils./Navarro Amper& Co. managing partner and CEO; Ma. Victoria Españo, Punongbayan & Araullo chairman & CEO; Alexander Cabrera, PwC Philippines (Isla Lipana& Co.) chairman and senior partner; Eduardo Francisco, BDO Capital and Investment Corp. president; Hans Sicat, Philippine Stock Exchange president and CEO; and Ben Kritz, The Manila Times’ business columnist and World News editor.
“The Philippine Economic Outlook for 2016” provided a fresh perspective on the financial resilience of the country with growth prospects driven by OFW remittances, domestic consumer demand, and robust BPO (business process outsourcing) and hospitality industry.
The country is also considered one of the steadily rising economies in Southeast Asia. Given this positive economic forecast, we are seeing a number of new hotels being opened in Metro Manila and key resort destinations this year.
This increase in room inventory complemented by continued infrastructure development, such as enhancement of the international and domestic airports and improvement of road networks to ease traffic flow will help increase the sustainability of Manila as a MICE (meetings, incentives, conventions and events) destination with groups coming from South Korea, Japan and China, as well as the steadily growing markets from Taiwan and India.
With these developments, New World Manila Bay Hotel, renowned for its “modern oriental hospitality,” can better serve its clientele opting for Manila as a part of their itinerary to explore the city’s culture and shopping hotspots, combined with trips to island resorts.
New World Manila Bay Hotel
“The Manila Times 3rd Business Forum is a significant and important assembly that gathered the who’s who in the financial, government and business sector to engage in discussions on the Philippine economic prospects and opportunities for 2016 and beyond.
The forum served as a foundation and catalyst for both the public and private sectors to innovate and collaborate on inclusive business initiatives that will create more jobs, enhance the value chain and sustain the momentum for economic growth.
Director of Communications
New World Manila Bay Hotel
The forum was very informative for us. We can see the strengths of the Philippines with regards to our development. Gov. Amando Tetangco Jr. said that we will be able to maintain 6 percent growth.
In our line of business in the retirement industry, it is very important for us that we are in an economic stage wherein investment, especially in retirement facilities, is possible. It was mentioned earlier that we could have more tourists in the country right now if we have more hotels and more resorts. That’s exactly what we [the retirees]also need.
We have been hearing big projects like those in Pampanga, where we have our airport. We’re also developing the green city and inside the green city, there will be a retirement village. That has already started. We also have areas in Subic where many companies have invested, and already there are facilities like a tropical paradise, to name one. In Cebu, we have investments from Japan and Singapore and from other countries because of Cebu’s accessibility.
What we heard today [from the Forum]is very positive and I feel more confident that in the line of business that we are, the developments can only be better and faster.
General Manager/ Chief Executive Officer
Philippine Retirement Authority
I really find the forum very informative and I believe that every business in the country should know the economic state of the country so they will know their potentials and possibilities.
We need to know where we’re heading so we would know what to offer to our clients. Since we are in the business of wellness, I believe the outlook is very positive especially now that wellness industry is not an extra anymore, it has become a need these days. It’s good news for our business because now we would know what to offer and what would be beneficial to our clients in terms of service and facilities.
Anj T. Alip