12 BUSINESS NEWS PHILIPPINE ASIAN NEWS TODAY September 1 - 15 , 2018
DOF favors Clark ’ s airport over Bulacan ’ s
The government will prioritize the development of New Clark City , as well as the Clark International Airport , over the proposed Bulacan airport , said Carlos Dominguez , secretary of the Department of Finance ( DOF ).
“ It ’ s obvious , our priority , and we have put money in it , is the Clark Airport and the New Clark City development . That , we have set that , we have invested money , we started the project . Obviously , that ’ s our priority ,” Dominguez said .
“ The value ( of New Clark City ) is $ 14 billion . That ’ s the estimate of the asset value , so my job is to see ( it ) increase , not decrease ,” he added .
Earlier , Dominguez noted the need to thoroughly study how the Bulacan airport will affect Clark International Airport , which is a government project , as well as the real estate value of New Clark City .
Dominguez said the real estate value of New Clark City is estimated at $ 14 billion and the government has committed to pour in an additional P12 billion as it develops the project .
“ We also want to have a better air service for the Metro Manila area . Now you know , according to
Swiss food giant Nestle is rethinking its operations in the Philippines as it grapples with competition and the impact of the tax on sugar-sweetened beverages .
Nestle Philippines Inc . said it may switch to importing its Nescafe products and may discontinue its Nesfruta juice line .
Ernesto Mascenon , senior vice president ( SVP ) and head of corporate affairs of Nestle Philippines Inc ., said the company is at a cost disadvantage when it comes to local coffee manufacturing compared with 3-in-1 mixes imported by competitors .
Mascenon said importers make more money since the costs of sugar , labor and electricity in their countries of operation are a lot cheaper in their home countries . These imports also come in duty-free from Asean .
Mascenon said Nestle initially discussed the idea of seeking exemption from value-added tax ( VAT )
Share prices and the local currency ended lower as the government announced the trade deficit widened in July as imports posted their fastest gain in more than two years while exports barely grew .
The Philippine Stock Exchange PSEI Index declined as much as 1.3 percent , taking the total loss in the past five sessions to nearly 5 percent . It had lost over 11 percent this year as of last close , making it the top loser among Southeast Asian markets .
These are the after-effects of
the studies before , the current NAIA ( Ninoy Aquino International Airport ), as it is now , has reached its point of diminishing physical returns . In other words , whatever you put in money , it would not return to you the same amount . So other airports are important . Mega cities can handle more airports ,” Dominguez said .
“ You have to evaluate , you have to look at the entire impact . What ’ s the impact on transportation , on the passengers ,” he added .
In the NEDA Board meeting last January , Dominguez said they tried to address the effects of the construction of the new airport in Bulacan which is about 65 kilometers away from Clark .
“ Financially , at this point , ( SMH is ) incapable of undertaking a P700 billion project ,” Dominguez said , adding SMC should guarantee the Bulacan airport project as the latter ’ s capitalization is enough to finance the bid .
SMC said it agrees with Dominguez that both SMC and SMH should undertake a Joint and Several Liability Agreement for the New Manila International Airport project in
on coffee manufacturing which he said is aligned with President Duterte ’ s point of establishing an even level of playing field among enterprises .
Nestle is counting on the pronouncement of Agriculture Secretary Manny Piñol late last year that government is looking at how it can incentivize operations of manufacturers using local agriculture products .
The company similarly brought this matter up to the ways and means committee of both houses of Congress which said they will look into the proposal .
Nestle is the lone coffee manufacturer in the country , buying 70 percent of total local coffee production at world market prices which is now P85 per kilogram .
“ TRAIN ( second package of tax reform now Tax Reform for Attracting Better and High-Quality Opportunities ) 2 should address the
WWW . PHILIPPINEASIANNEWSTODAY . COM
PNT Foreign Exchange
$ 1.00 Cdn = P 41.41Php
$ 1.00 US = P 53.83 € 1.00 EUR = P 62.62 D1.00 BHD = P 142.78 R1.00 SAR = P 14.35 ¥ 1.00 JPY = P 0.48
Bulacan .
“ In fact , as early as May 18 , following the approval of the project by the NEDA board , SMHC conveyed to the Department of Transportation its willingness to execute the agreement as soon as the terms of the concession agreement ( CA ) are finalized with the government . The final CA will form the basis of what SMC will be guaranteeing and jointly liable for ,” SMC ’ s statement said .
“ Very simply , the joint and several liability undertaking means
Nestle rethinks operations in PH
higher-than-expected August inflation , and some concerns of contagion from emerging markets on the currency , said Fio De Jesus , an analyst at Manila-based RCBC Securities .
The peso slipped to P53.94 , 0.06 centavos lower than the previous day ’ s close of P53.88 .
Big trade gaps and a wide current account deficit have pressured the peso which now hovers around its weakest in 12 years against the US dollar .
“ Maintaining good disadvantage of local manufacturers which use local agriculture products against those importing finished goods especially those coming from Asean ,” said Mascenon .
He added : “ Otherwise the option to us is we will close down our manufacturing here and just move to Indonesia , or Vietnam , Malaysia , ( and ) import .”
Mascenon said Nestle also buys local sugar which is twice the price of world market prices but resorts to imports when local supply is insufficient . Nestle also buys a special kind of sugar abroad for its infant formula line .
“ Sugar is important in our coffee mixes which is the biggest segment now in coffee , “ Mascenon said .
But switching to imported finished coffee products may not be as easy as it sounds since Nescafe 3-in-1
Peso t it ’ s lowest
macroeconomic policies , thru manageable fiscal and BOP balances , and adopting economic reforms thru tax reforms is still the best way to sustain growth and investment and at the same time , steer the economy from external economic shocks ,” Beltran said .
Beltran added that year-todate , the Philippine peso depreciated by 7.39 percent , ranking 3rd among 12 currencies of the fastest growing Asian countries .
The most depreciated that the project will be fully backed by the financial capability of SMC , the parent company of SMHC .
“ The government should accelerate the approval and implementation of airport proposals to ensure that tourists and our kababayans do not suffer ,” he said , noting as early as 2011 a JICA report detailed problems on NAIA ’ s capacity which was not acted upon by the previous administration .( Angela Lorraine Celis , Malaya )
is only produced in the Philippines .
Paolo Mercado , SVP for communication , marketing and innovation , was quick to point out Nestle would prefer to manufacture in the Philippines because this creates jobs and helps farmers .
Nestle currently has 4,000 workers nationwide . Its coffee production in Cagayan de Oro City helps about 10,000 coffee growers or about a fourth of the total number of farmers engaged in the crop .
Mascenon meanwhile said Nesfruta ’ s volume has gone down 30 percent since the introduction of tax on sugar-sweetened beverages in the beginning of the year , with prices surging as much as 80 percent to P15 per one-liter sachet from P9 .
“ We are thinking whether or not we should continue ( Nesfruta ),” said Mascenon . ( I . Isip , Malaya )
currencies were Indian rupee depreciating by 11.7 percent and Indonesia , by 9.0 percent .
“ Since July 31 when emerging markets were the target of adverse hot money movements as contagion spread from problems in Turkey and Argentina , the Philippine peso depreciated by 0.82 percent , ranking 5th among 8 Asian countries whose currencies depreciated ,” Beltran explained . ( Ruelle Albert Castro , MALAYA , Reuters )