Philippines Targets $10 Billion in Foreign Investments

Gregory Domingo, Philippine trade secretary. Photographer: Edwin Tuyay/Bloomberg

The Philippines said it aims to boost foreign direct investments in call centers, factories and shipyards to more than $10 billion a year, as President Benigno Aquino strives to create jobs and bolster growth.

The Philippines received 24 business teams in the first half of the year from countries including Russia, Turkey and Japan, Trade Secretary Gregory Domingo said. Investors are keen on shipbuilding, agriculture, energy, steel, garments, and business process outsourcing, he said.

"The biggest thing that has improved our standing in the investment community globally has been President Aquino's governance," Domingo said in an interview in his office in Manila (July 15, 2012).

Aquino is winning confidence from investors and rating companies as he fights corruption and boosts infrastructure spending to transform the nation into a manufacturing hub in the region. Moody's Investors Service boosted its outlook on the Philippines to positive in May, when the country's top judge was impeached for illegally concealing his wealth, while Standard & Poor's this month raised the long-term foreign currency- denominated debt rating to the highest level since 2003.

The $225 billion economy expanded 6.4 percent in the first quarter, the fastest pace since 2010, and the peso is the best performer against the U.S. dollar among Asia's 11 most-traded currencies this year, having gained about 5 percent. The Philippine Stock Exchange Index (PCOMP) surged to a record this month.

The peso rose a third day today to 41.732 per dollar as of 9:27 a.m. in Manila. Benchmark bonds due March 2021 gained, with the yield falling to the lowest level since February, according to Tradition Financial Services.

'Tremendous Interest'

"When he first assumed office, there were still a lot of people who doubted he will really pursue" good governance, Domingo said. "But now, he has convinced everybody that he is sincere. We've seen tremendous interest in investment."

From 1970 to 2010, the Philippines drew $33.98 billion in foreign direct investment compared to $322.13 billion for Singapore and $108.87 billion for Thailand, according to the United Nations Conference on Trade and Development.

The Philippines lured about $6 billion in pledged foreign investments last year, and has drawn commitments from companies including Glencore International Plc and Gazasia Ltd. this year. Business groups from Mexico and Argentina are due to visit the country, Domingo said.

Bloomberg Business Week (Bloomberg News)

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PLDT will buy majority Stake and Take over GMA7 TV for $1.3 Billion US Dollars

Philippine Long Distance Telephone Co. (PLDT) groups widely expected takeover of television station GMA Network Inc. may be delayed to next year due to the need to seek congressional approval for the deal, executive Manuel V. Pangilinan said.

Nevertheless, Pangilinan, who chairs PLDT, said preparations are ongoing to raise cash to pay for the majority stake in GMA, if and when both camps agree on a price.

"We're already talking to our banks," Pangilinan said.

But he added that the company would rely mostly on cash to pay for a majority stake in GMA. Loans would only fund a small portion of the transaction, he said.

He explained that the PLDT group and the Duavit, Gozon, and Jimenez families that control GMA 7 would both work to have an agreement before the year ends.

Whether PLDT can take over the company in 2012, however, was still unsure.

"That deadline is beyond our control because we still need to get approval from both houses of Congress and the NTC (National Telecommunications Commission)," Pangilinan told reporters, speaking at the sidelines of the contract signing for PLDT's co-branding deal for Henry Sy's Mall of Asia Arena.

Either camp has been mum on details of the negotiations, but the Inquirer reported this week that both sides have agreed on a price of ₱52.5 Billion Pesos (1.3 $ Billion USD) for about 80 percent shares of GMA 7.

Pangilinan said PLDT's affiliate, MediaQuest Holdings, would most likely acquire GMA's common shares, while PLDT would pick up Philippine Depository Receipts, a form of equity reserved for foreigners.

Under the Constitution, foreigners are not allowed to have voting shares in media companies.

PLDT is controlled by Hong Kong's First Pacific Co. Ltd. and Japan's NTT DoCoMo. But MediaQuest is owned by PLDT's Beneficial Trust Fund, which would allow the group to skirt restrictions on foreigners.

MediaQuest Holdings controls other key media assets, most notably, Associated Broadcasting Corp., operator of GMA's rival television network TV5

Inquirer 

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Indonesian President disappointed to Cambodia’s One sided to China in ASEAN SUMMIT

President Susilo Bambang Yudhoyono expressed his disappointment over Indonesia's failure to help settle disputes in the South China Sea during the recent Association of Southeast Asian Nations (ASEAN) Ministerial Meeting (AMM).

Yudhoyono held an impromptu press conference at the Presidential Office on Monday, only to express his concerns over the failure of ASEAN members to come up with a communiqué during the AMM in Phnom Penh, Cambodia — the first in the organization's 45-year history.

"This has never happened since the ASEAN was established. I am disappointed and really concerned; this could lead to misperceptions or false representation of ASEAN. The media has said ASEAN has broken apart and there was no longer unity in the region," he said.

"I disagree. ASEAN has not broken up and it remains in unity in spite of the ongoing problems that need to be resolved."

The Presidential Office convened the press conference after Foreign Minister Marty Natalegawa briefed Yudhoyono on the fallout from the failed ASEAN meeting.

Indonesia is one of ASEAN's founding members and handed over the 2012 chairmanship to Cambodia. Yudhoyono had repeatedly expressed his confidence about Indonesia's growing international influence, including helping to resolve conflicts in the region.

Indonesia has been considered as having significant clout in the region, particularly during its last chairmanship period in 2011.

The country has been seen as one of key players in the democratization process in Myanmar as well as in the settlement of the conflicts on the Cambodia-Thailand border.

When it comes to South China Sea disputes, however, Indonesia, which appears to be playing a mediator role, has faced insurmountable obstacles in trying to reconcile differences among many ASEAN member states.

The 2012 AMM, which wrapped up on July 13, was the first occasion when ASEAN failed to produce a joint communiqué.

"Last year, we managed to help settle Myanmar and Thailand-Cambodia issues and all worked well. This time, the portfolio to handle [the South China Sea] issue has not been managed as expected," Marty said.

"We had tried to bridge views of different interests. Since the beginning, we realize this would not be without risk. The possibility of not resulting in an immediate outcome was always on the table. Yet staying idle and doing nothing would create much greater risk," he said.

Although Indonesia is no longer the ASEAN chair, Yudhoyono has made an initiative to play a greater role in the region.

"The absence of mutual views on the South China Sea poses potential disturbances for the region. We can't be left like this for too long," he said.

Marty also said that Yudhoyono has instructed him to travel to all ASEAN countries and try to build consensus.

"I was told by the President to continue seeking consensus by meeting and communicating with my ASEAN counterparts one by one in their respective home countries. Tomorrow I will fly to Manila to meet the Philippine foreign minister, then to Hanoi [Vietnam], Phnom Penh [Cambodia], Kuala Lumpur [Malaysia] and Singapore," he added.

Marty said that conditions could still improve.

"I hope we still can reach a form of mutual understanding on the South China Sea, at least before the upcoming ASEAN Summit in November," he said.

ASEAN countries, which had been involved in the South China Sea row, including the Philippines, Vietnam and ASEAN chair Cambodia.

The Philippines and Vietnam insisted that their recent clashes with China should be mentioned and included in the final communiqué.

Last April, Chinese and Philippine government ships were in a confrontational mode over the Scarborough Shoal. Chinese maps refer to this string of sandbanks as Huayang.

Cambodia, meanwhile, was considered to be backing China's interests.

Marty refused to comment when queried about the row and said that the dispute was over details in the communiqué.

"There were indeed some countries which insisted to include details of the disputed bloc in the communiqué while other countries refused to do so," he said.

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