Philippines, New Zealand ink 3 agreements: 1 year Visa, Maritime Defense & Geo Energy

New Zealand Prime Minister John Key and Benigno Aquino III, John Key AP PHOTO

Philippines, New Zealand ink 3 bilateral pacts

WELLINGTON, New Zealand (via PLDT)—President Benigno Aquino III capped his two-day state visit to this southernmost Pacific country Tuesday by witnessing the signing of three bilateral agreements meant to further strengthen diplomatic relations between Manila and Wellington.

The signing followed a bilateral meeting between Aquino and Prime Minister John Key, both held at the Parliament Building here.

The accords deal with a reciprocal working holiday scheme, defense cooperation, and geothermal energy cooperation.

The geothermal and defense cooperation is meant to jumpstart talks on these areas, leading to concrete agreements done the road, while the arrangement on working holiday scheme seems to be a done deal.

The President and the Prime Minister claimed that the reciprocal arrangement would open up both countries to people-to-people exchanges as a way to fix the very low awareness among Filipinos and Kiwis of each other's culture, history and heritage as Pacific nations.

According to the President, there are only 36,640 Filipinos in New Zealand, which represent one percent of the 4.4 million population.

One-year temporary visa

The holiday scheme, signed by Philippine Foreign Affairs Secretary Albert Del Rosario and New Zealand Minister of Foreign Affairs Murray McCully, is the first working holiday arrangement negotiated by the Philippines.

It complements the people-to-people exchanges between two nations, providing the young people (aged 18-30) temporary entry visas in each direction for a year.

Qualified participants are limited to a maximum of three months' work with one employer, or enroll in training or study courses for not more than three months.

However, they can spend up to a year either in New Zealand or the Philippines, said Communications Secretary Ricky Carandang, explaining to reporters the ramifications of the grant of such a visa to either of the two nationalities.

Both foreign affairs departments will have to work out some other issues, but it was announced here that the first visas under the scheme would be issued in 2013.

Asked at a press conference about the jobs that Filipinos and New Zealanders could apply for under the holiday scheme, Aquino said that "actually (it) will be related to areas where, for instance, the geothermal field. I'm told that we have to send most of our experts here or students who would want to become experts in the field to live and perhaps to get an initial college degree for it. The idea more is in the scheme of having experienced the different culture and environment … hopefully both sides will be able to imbibe the positive attributes to both our cultures and our peoples."

He said the main concept behind the working holiday scheme was that "one should get to know each other better to do discover how similar we are other than different which enhances the cooperation we all have to demonstrate in the growing interconnectivity and similarity of problems we are forced to confront."

Key, for his part, was excited about the scheme, saying: "It's asset to working with all opportunities in the Philippines and vice versa. It's pretty similar to what we signed in Indonesia."

Framework for talks

The Memorandum of Agreement on Defense Cooperation, signed by Philippine Defense Secretary Voltaire Gazmin and McCully, provides a formal framework for dialogue and cooperation on defense issues, said Carandang.

This includes meeting of both countries' senior officials and military representatives, education and capacity-building, training activities and exercises, information exchanges, and multilateral cooperation.

Aquino cited a "shared history" of defense links between the Philippines and New Zealand, dating back from World War II, the Cold War, and even serving as peacekeeping forces in volatile parts of the world such as Timor Leste.

The arrangement on geothermal energy cooperation, signed by McCully and Del Rosario, provides a government-to-government framework to support geothermal development between the two countries.

The President noted that the Philippines was one of the two largest producers of geothermal power, but it was New Zealand that had provided helped the Philippines harness this alternative power source in the 1970s.

Early in the day, two private companies—the Philippine Energy Development Corp. (EDC) and New Zealand's GNS Science—signed a separate business deal in the presence of Aquino in Auckland, his first stop in this state visit that took him to Wellington later in the day.

GNS will provide technical services to EDC, one of the two largest geothermal producers in the world.

New Zealand's Alliance Select Foods International, Inc.

Alliance Select Foods International Inc., based in the Philippines, also formalized in Auckland its $2.18-million share purchase agreement to acquire 80 percent of Akaroa Salmon NZ Ltd., a pioneer in salmon farming in New Zealand.

The New Zealand-based salmon marine farmer and processor of fresh and smoked salmon.

Maori welcome

Prior to the bilateral meeting with Key, the President met Governor General Jerry Mateparae and his spouse, Lady Janine, in an elaborate state ceremony, reception and bilateral talks at the nearby Government House.

The President and his lean entourage of Cabinet members and business group were treated to a traditional "powhiri" (welcome) rites by the Maori people, New Zealand's indigenous natives, at the spacious lawn of the Government House.

The formal ceremony entailed "wero" (challenge), an ancient Maori warrior tradition used to determine whether visitors came in peace or with hostile intent.

Armed with a traditional weapon, three warriors led over two dozens of chanting Maoris, performing an intimidating series of fight movements as they advanced towards Aquino.

The carefully choreographed movements ended with the President picking up the "taiaha" (dart), and the Maori warrior-leader slapping his thigh to signal that Aquino and his party could enter the area.

The warriors and their spouses then escorted the presidential entourage to the center lawn, where Aquino was welcomed by Mateparae and his lady.

A 21-gun salute was rendered in honor of Aquino, as the Philippine national anthem was being played.

A state dinner was hosted by the governor general at the Government House before Aquino and his entourage flew to Canberra, Australia, late Tuesday for the second leg of his two-nation state visit.

Aquino's state visit to New Zealand, his first since becoming President in 2010, aims to strengthen bilateral relations between the Philippines and New Zealand which have seen modest gains in the areas of trade, agriculture, renewable energy and tourism since the inception of formal diplomatic relations in 1966.

The Philippines is New Zealand's 13th largest export market, but is also the latter's third largest market for dairy products after China and the US.

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Philippines Ready: Can ASEAN Economic Community happen in 2015?

The way to an ASEAN Economic Community, envisioned by the 10-member Association of South East Asian Nations to come about in 2015, is going through a rough ride, a ranking official of ASEAN said on Tuesday.

At the moment many of the member-states are experiencing difficulties in complying with or implementing the requirements for an integrated economic community, ASEAN deputy secretary general Dr. Lim Hong Hin,  told participants to the annual Punongbayan & Araullo CEO Business Forum in Makati City

 "Despite progress in a number of areas, 28 percent of AEC measures due to be implemented for 2008-2011 are still pending as of end-August 2012," said Lim.

 These measures cover trade – customs modernization standard and conformity and services liberalization – investments, agriculture, consumer protection, and ratification of transportation agreements.

 ASEAN members have failure to comply with decisions, treaties and protocols at the national levels, Lim noted.

 "Others point to implementation bottlenecks due to lack of necessary funds to support the integration measures, particularly at the national level," Lim revealed.

 "This is a concern because failure of many ASEAN countries to follow through on their commitments may undermine the success of AEC," he said.

 The Philippine scorecard showed 104 of 110 measures have been implemented during the Phase 1 of the ASEAN Economic Community blueprint, said Trade Undersecretary Adrian Cristobal Jr.

 Two of the measures Philippines still needs to comply with are in the areas of transportation and infrastructure, the Philippine official noted.

 The role of private sector role is vital for the ASEAN Economic Community to succeed, Lim said, encouraging it to take the lead in raising investments and productivity, adopting a sound risk management practice and risk analyses, and promoting corporate governance and consumer education.

 At this point he discounted the idea of creating an ASEAN single currency, saying "the time is not ripe for a discussion on a single currency just like the euro."

 AEC is a single market and production base economy where goods, services, investments, capital, and skilled labor can flow freely within a community of nations – home to 600 million people and a combined gross domestic product of more than $1.13 trillion.

 ASEAN+6

 During the forum, Lim said the association is looking forward to start discussions for a broader economic partnership with six non-ASEAN countries before the year ends. The idea was to create the biggest free trade area in the world

 "In support of greater integration with the global economy, ASEAN countries are actively working to launch the start of negotiations for the Regional Comprehensive Economic Partnership with China, Japan, Korea, India, Australia and New Zealand by the end of this year," Lim noted.

 These countries have existing free trade agreements with the regional bloc, including the ASEAN-China FTA, ASEAN-Japan, ASEAN-Korea, ASEAN-Australia and New Zealand, and ASEAN-India.

 "Despite differences, we want to move forward... and come out with a guiding principle to create RECP," said Lim.

 ASEAN+6 would cover wide areas of the Asia-Pacific region, and Lim said is more feasible and realistic than the Trans-Pacific Partnership. "Once completed, it will be the largest FTA in the world."

 The 2005 Trans-Pacific Strategic Economic Partnership Agreement is a multilateral free trade that claims to further liberalize the economies of the Asia-Pacific region.

 All efforts at creating RCEP were aimed at consolidating all free trade agreements entered into by ASEAN. "The goal here is to promote wider economic integration," Lim said.

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₱3-Billion Japan Smartphone Chip manufacturing plant Ready for Operation in Batangas

PHILIPPINE ECONOMIC Zone Authority Director-General Lilia B. De Lima and Tsuneo Murata, Murata Manufacturing Co. Ltd. president, unveil a plaque at the plant opening in this official photo release on the event

Murata Manufacturing Co., Ltd. of Japan yesterday announced the completion of its initial ₱3-billion investment in a manufacturing facility; it's largest in Asia outside Japan at the First Philippine Industrial Park in Tanauan, Batangas.  Philippine Manufacturing Co. of Murata Inc. (PMM) completed the first of four buildings where it plans to employ 3,000, notwithstanding the current slump in electronics sector.

PMM will initially produce multilayer monolithic ceramic capacitors (MLCCs), Murata's flagship product.

Murata president Tsuneo Murata said PMM would produce other components in the future.

The plant would be a production hub of MLCCs for emerging markets. Murata of Japan is the leading manufacturer of MLCCs, with global market share of 35 percent. It also produces components used in most electronic and electrical devices such as notebook computers, mobile phones, television sets, cameras, and other home appliances.

The entire facility covers 22.7 hectares, where the first building occupies 3.6 hectares. The first building will start operations in January 2013 where it would employ 300 workers, mostly as operators.

Murata said when fully operational, the factory will be able to produce a variety of models in representative scales, which would increase the company's production.

Murata said this expansion in this part of the world is in response to the increased functionality of electronics and the growing demand for new applications such as smartphones and tablets.

As Murata's overseas production base, the Philippine operations would have a critical role part in Murata's expanding overseas production, the company said.

The company said it decided to locate in the Philippines due to its low-cost (low wages, lower capital investment) operations and to take advantage of a large-high-quality and English-speaking workforce with high-retention rate.

As a company registered with the Philippine Economic Zone Authority, the company would also be able to enjoy favorable treatment in corporate taxes and materials and equipment imported from Japan.

The Philippine plant is Murata's fourth in Asean, the others are in Thailand, Singapore and Malaysia.

PMM president Takashi Masuda said the Philippine plant has the largest lot area where the company would be able to expand its products and its scale in the future.

Masuda said the company plans to build three more buildings, totaling four buildings which would have 3,000 workers in the future.

A multiyear ceramic capacitor is an electronic component that stores and releases electrical energy. It stabilizes voltage by going through a charge-discharge cycle and is widely used to absorb noise and detect signals of certain frequencies.

Chip type multilayer ceramic capacitors are essential components for electrical equipment.  It is said that there are more than 500 MLCCs are assembled into one latest smart phone; 1,000 to 2,000 in a car; 700 in a laptop, and 500 in an LCD TV.

These products are produced for major EMS (electronic manufacturing services) and local manufacturers where Murata faces intense competition against Asian suppliers.

Murata said these competitors include Samsung Electronics Manufacturing of Korea and Yageo of Taiwan.

Murata Manufacturing of Japan is a worldwide leader in the design, manufacture and sale of ceramic-based passive electronic components and solutions, communication modules and sensors.

It has an annual revenue of 585 billion yen ($7.1 billion). The Kyoto-based company has 78 subsidiaries and sales offices worldwide where it has 37,000 employees.

About 85 percent of products sold by Murata are produced outside of Japan. Forty percent of all its product lines go to communication application.

Murata is also expanding in Thailand and Malaysia so far, Masuda said but the Philippines has the biggest potential for expansion.

Amid the slowdown of Philippine electronics exports, Masuda said the electronics industry in the Philippines will further expand and develop and that there are emerging countries they would require more electronic components and devices.

Lilia de Lima, director-general of the Philippine Economic Zone Authority, said the initial investment could add p to ₱3 billion as the company spent almost ₱2 billion just for the land development and the building.

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