Philippine economy: Looking bright

Filipinos are one of the most optimistic people, always hopeful that things will take a turn for the better with the advent of a new year. Well, that optimism is now paying off judging from the positive projections of financial analysts and experts. It would seem that 2012 will be a relatively good year for the Philippines despite the economic downturn that European countries are experiencing due to the continuing debt crisis.

For one, remittances from our “ unsung heroes” – the reliable overseas Filipino workers – are expected to grow with continued strong demand for our workers abroad particularly in the Middle East. About 1.5 million Filipinos were deployed abroad in 2010, and estimates from the World Bank place OFW remittances at $23 billion by the end of 2011 – making the country the fourth biggest remittance-receiving country after India, China and Mexico.

As a matter of fact, the Philippines is said to be “the economy to watch” considering that it has strong macroeconomic fundamentals that would help it ride through rough times. Interest rates are stable and banks did not register any over lending. Even the property sector is upbeat, with growing focus on the mid-range market segment as more OFWs invest their money on real estate. Another driver is the demand from the business process outsourcing industry for office space, with the number of seats expected to hit 800,000 – up from 640,000 last year. Pocket expansion of call centers and outsourcing companies in Subic, Clark and key cities in the North will help fuel growth for the property and real estate sector.

In Cebu, local businessmen are anticipating more investment opportunities especially with the projected transfer of some manufacturing companies from Thailand – in turn bringing in more employment opportunities. Tourism is also anticipated to reach new heights as marketing efforts are intensified. For one, the publicity generated by the inclusion of Palawan’s St. Paul Underground River as one of the New Seven Wonders of Nature has made the Philippines prominent as a destination, and the increased tourist arrivals will definitely give the hotel and leisure sector a boost.

Even insurance industry leaders are anticipating better prospects, with the non-life sector looking forward to the rollout of government’s infrastructure projects worth P148.1 billion for roads, bridges, classrooms, airports, seaports etc. that will help perk up the economy. While there are growth “threats” facing the country this year such as natural (some say “man made”) calamities and disasters that have destroyed so many lives and damaged infrastructure, property and agriculture by the billions, most economists agree that economic prospects are much better for this year. Hopefully, government will not drop the ball and make sure the economy stays stable.

2011 a banner year for MVP

A few days before the New Year, business circles were abuzz with rumors that PLDT boss Manny Pangilinan’s newest acquisition was GMA 7 Kapuso network – which the latter promptly and vehemently denied. Not surprisingly, a lot of people were ready to believe the “buy-in” rumor judging from Tweets – perhaps because MVP has a lot of companies already tucked under his belt.

As a matter of fact, we have it on good authority that the total market cap for 2011 by the “MVP” group (Philex Mining, Philex Petroleum, MPIC, PLDT, etc.) is approximately P1.132 trillion – reportedly ahead of the San Miguel group’s estimated P852.873 billion; the Ayala group’s P767.455 billion; the Henry Sy group’s P832.742 billion; P351.977 billion for the Gokongweis; Aboitiz group’s P484.259 billion; Andrew Tan’s P149.774 billion; and the Lopezes with P247.232 billion.

Incidentally, Philex Mining Corp. also surpassed its 2011 production budget for its Padcal operations in Benguet with higher figures than 2010 – producing 37,472,000 lbs of copper and 138,600 oz of gold five days before the year end.

ANI gets fresh capital infusion

AgriNurture Inc. (ANI), one of the fastest growing agricultural companies in the country, begins 2012 with fresh capital inclusion via an investment agreement with Black River Capital Partners Fund for the acquisition of 28.11 percent of ANI for $30.45 million. Black River Asset Management is an independent subsidiary of Cargill, one of the biggest private firms providing a wide range of products and services from risk management to food and agriculture. 

No wonder AgriNurture founder Tony Tiu is one of the 2011 Ten Outstanding Young Men (TOYM) awardees (for Agribusiness) because he expanded what was once a post harvest agricultural machineries business into a diversified agricultural products conglomerate, exporting homegrown fruits like coconut, banana, pineapple to China, Japan, Korea and even Europe. Earlier this year, ANI partnered with Vita Coco, a top US retail brand, to set up a coconut juice plant in Bicol. 

The agreement with Black River could certainly leapfrog ANI into becoming a global supplier of agricultural food products.

Spy tidbits

– Our inside informants in the Palace tell us that the much speculated Cabinet “rigodon” could happen sooner than later – with current Energy Secretary Rene Almendras reportedly taking over as Executive Secretary vice Paquito “Jojo” Ochoa – who will become Chief of Staff (the position originally intended for Mar Roxas before he became DOTC boss, the sources added). Meanwhile, PCGG chair Andy Bautista would become the Solicitor General replacing Joel Cadiz, according to our informants.

– I was informed by the local general manager of Hawaiian Airlines, Joel Aquino that they are offering their New Year “Blast Off Fares” roundtrip tickets at less than $500 for economy class and less than $1,500 for business class with ticketing period up until Jan. 27, 2012. Travel period is good for six months. Sounds like a good deal.

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