Ambassador Manuel M. LopezThere is a surplus of good news in the air. Our country is in a much better place today than it was almost five years ago. I don’t know if you have noticed but there really is a positive momentum for the Philippine brand arising from governance reforms and economic growth that seems to be appreciated more by foreign observers.
To those of us who are based abroad and are in constant contact with economic doers and shakers in the world economy, we often hear positive statements about how our economy is doing.
Coming from financial analysts working for banks and financial institutions, we take all the good reviews as positive signs that our country is now being taken seriously and there is reason for every Filipino to feel proud.
As the Philippine Ambassador to Japan, I have constantly projected our country as a worthy investment haven for Japanese companies actively looking for manufacturing hubs in Southeast Asia. Recently, I have noticed a marked increase in interest from Japanese companies wishing to relocate to our Calabarzon export zones from China.
Indeed, the Japanese Chamber of Commerce and Industry of the Philippines announced some of the firms have already started to move to our country. Most of the Japanese companies relocating from China are in information technology, automotive and parts manufacturing. Japanese watchmaker Citizen was reported to have also shut down its China factories and decided to move to our country. Bicycle maker Shimano opened a P1.2 billion manufacturing facility in Batangas. As our executives running our industrial park in Batangas will tell you, the demand from locators has increased tremendously so that we now must look for more land to develop.
In its latest World Economic Outlook report that was released in January 2015, the International Monetary Fund (IMF) said the Philippines could again lead the five largest economies in the Association of Southeast Asian Nations (ASEAN) in terms of growth rate at 6.6% this year. That forecast outpaces the 5.2% average the IMF estimates for ASEAN-5 consisting of Malaysia, Indonesia, Singapore, the Philippines, and Thailand.
Last year, Philippine gross domestic product (GDP) growth came in at 6.1%, a few points shy of the government’s 6.5-7.5% target even as the fourth quarter growth came in at a five-quarter-high of 6.9%. The economy is anticipated to gain further traction in 2015 because of strong fundamentals: a stable macroeconomic framework (a regime of low inflation and larger fiscal space); continued rise in remittances from Filipino workers overseas (around US$23 billion in 2013); a resurgent manufacturing sector and well-performing service sector, notably the BPO sector; a consistent build-up of foreign exchange reserves (currently at over US$80 billion) and credit rating upgrades from international credit rating agencies.
Communications, construction, manufacturing, real estate, and transportation, among others, are expected to sustain the momentum. In addition, the approval of the post-Yolanda rehabilitation plan is expected to increase government spending and boost the economy.
Of course a good economy is reflected in the daily trading in the Philippine Stock Exchange. The PSE index had been breaking record levels at the start of the year. And share prices of Lopez Holdings and associates have kept pace with the local stock market.
We and our associates have begun to reap the benefits of prudent investments made in the last three to four years. For example, EDC (Energy Development Corporation) successfully commissioned its Burgos Wind Project in November last year. This project will make an additional 150 MW of electricity available to the Luzon grid, using a renewable resource.
After years of technical and market tests, ABS-CBN Corporation became the first to launch its digital terrestrial TV (DTT) offering, ABS-CBN TVPlus in February 2015, or less than two months after the National Telecommunications Commission issued the Implementing Rules and Regulations for the DTT service in December 2014.
Still, much remains to be done to support the steady growth of our country. This is why our group of companies remains to be in investment mode.
First Gen Corporation is doing its share to meet a growing economy’s energy requirements, with its San Gabriel and Avion projects. First Gen will be spending about US$150 million for the 97 MW Avion plant, and about US$600 million for the San Gabriel project.
These investments are necessary if the country is expected to sustain its growth trajectory. The economy expanded by an average of 6.7% in the last three years (2012-2014). Power supply scarcity will only slow it down. It is important for businesses like ours to support inclusive growth so that our fellow Filipinos can find more, better, and appropriate jobs, and become optimally productive as the country progresses.
The work of First Philippine Industrial Park, an associate of First Philippine Holdings Corporation, must continue, whether in its present location where it is again running out of land to sell, or elsewhere. We must attract more manufacturers to invest in the Philippines. Such direct investments create jobs, transfer technology and equitably redistribute wealth in a globalized economy.
Rockwell Primaries is the new brand intended to expand Rockwell Land Corporation’s reach to the broader market. We have seen robust demand for Rockwell living spaces as more of our families aspire to live in refreshingly green and spacious, safe and secure urban communities.
ABS-CBN’s foray into the digital space also deserves our full support. The DTT technology is considered a great equalizer, giving users who would normally not be able to afford cable programming, vivid pictures, clear sound and a bigger menu of news and entertainment content. Tests of DTT in select areas since 2008 show that consumers were very satisfied with the easy-to-use, plug-and-play DTT service. They invariably preferred DTT over analog broadcast. Now they have a choice, and it is ABS-CBN that is first to provide that choice to them.
The other important work of ABS-CBN in the near term is training citizen journalists or Bayan patrollers in schools and communities reached by its regional stations. We want to support a vigilant citizenry to ensure that social and economic reforms can be sustained and benefit every single Filipino, male or female, young or old, rich or poor.
Yes, we did well in 2014, and expect to do well again in 2015. Yet, we all know that much remains to be done.
For one, post-Yolanda rehabilitation work must continue and even accelerate. The sheer magnitude of the devastation and the dispersed locations of the affected communities require continuous rehabilitation of damaged infrastructure for the local economies to catch up with the rest of the country.
There is consensus among many development economists that we could have done even better if government expenditure in infrastructure kept up with the plans. Then again, the administration had to take a more cautious stance on expenditures specially of big ticket infrastructure to make sure every centavo is well spent and corruption eradicated.
To achieve sustainable growth, for our country, our people, and our businesses, it is essential to align the interests of our many stakeholders — customers, employees, communities, regulators, local governments, creditors, suppliers, affiliates and shareholders. Only by working together can we fulfill our common aspiration of a progressive and just society.
Rest assured that your company and its associates will pursue investments and initiatives with integrity, prudence and genuine malasakit for the future of our country and people.
That said, let me inform you that your board approved just this morning a cash dividend of ten-centavos per share. The record date is on June 15. And it will be paid out on June 27.
Thank you for your unwavering support for your board and management team.