The year that was in business (Part 1)

Like we always do as the year comes to an end, Business & Leisure (B&L), the television show, is coming up with a Two-part yearend special where prominent leaders give us their assessment of the year that was for the specific sector they belong to.

For Part I of this year’s special, B&L had the privilege of having the top leaders of the following sectors:  international shipping, automotive manufacturing, banking, foreign buyers, manufacturing and travel.

INTERNATIONAL SHIPPING: Mr. Patrick Ronas, president of the Association of International Shipping Lines (AISL) tells us that for 2014, they registered a flat growth, and understandably so. The port congestion started in February, and nine months later, the port was still in terrible shape. As early as March, they reacted as a unified group to ease the congestion, until the government prevailed on the local government units to relent on the total truck ban they had imposed. They had a difficult time moving the empty containers from the ECD (Empty Containers Depot) onward to the vessels. Manila mayor Joseph Estrada later on conceded, and now more containers are going out of the port. Mr. Ronas says that the ideal utilization of our ports is at least 70%, but in the South Harbor for instance, it stands at 80%, while at the North Harbor, it is at 90%.

They are still hoping that the government would lift completely the truck ban.  At least, Mr. Ronas said, MMDA should consider that the shipping lines need to ply Roxas Blvd, their fastest route to the Cavite Export Zone, so closing this to trucks would be disastrous indeed.

AUTO MANUFACTURING: CAMPI (Chamber of Automotive Manufacturers of the Philippines) is the umbrella organization of the country’s auto manufacturers, and lawyer Rommel Gutierrez sits at the helm as president. It is common knowledge by now that the auto industry in the country has been performing well in the last two years.  However, even as the economic integration is upon us, we have not caught up with our Asean neighbors, specifically Thailand and Malaysia that have now positioned themselves as auto hubs in the region, with the rest of us importing from them.

The port congestion has also impacted the auto industry, such that some manufacturers have resorted to importing whole engines by air.

Overall, the industry is alive and well, but they are still waiting for the promised roadmap from the government which should be the clearest indication of government support for the automotive sector.

BANKING: B&L spoke with the president of the Chamber of Thrift Banks (CTB), Mr. Jose Teodoro Limcaoco who is also president of the BPI Family Bank who told us about how, in preparation for the economic integration, they have embarked on a competitive training program this year to refresh the credit skills of their membership. They worked with the USAID and their Foundation for Economic Freedom on lending against titles and titling against new patent lands. They have also worked successfully with the Bangko Sentral ng Pilipinas (BSP) on new initiatives, which include financial inclusion and consumer protection.  They are awaiting the release of the Uniform Loan and Mortgage  Document, which they and the Bankers Association of the Philippines helped craft and this would enable consumers to understand home loans documents much better, having been simplified for easy following.

The BSP, says Mr. Limcaoco, has laid a good foundation for 2015, making real estate lending more prudent for instance.  The new credit framework is more positive for the industry—they can now look at lending from a cash flow and income perspective rather than a collateral perspective. Documentary requirements for lending have also been eased, making it easier to lend to SMEs which is their new focus.

The new capital requirements imposed by BSP gives thrift banks a choice of either maintaining the existing capital base or raising their capital to expand their business.

FOREIGN BUYERS: FOBAP, or the Foreign Buyers Association of the Philippines has, for its president, Mr. Robert Young who told us that for 2014, they are generally happy for the export sector, notwithstanding the mayhem that the port congestion has caused the exporters as well as the importers. Like other sectors, many of their members have resorted to airfreight over sea freight, lest they lose some of their long-time clients. Like the international shipping lines, they are also rooting for the lifting of the truck ban, though they believe that port congestion would be addressed in the first quarter of 2015.

They are also looking forward to having zero duties to the European Union block, and since Thailand is apparently facing a serious shortage of skilled labor, the EU is looking at the Philippines for their buying programs.

The APEC meeting which the Philippines is hosting next year is seen by the foreign buyers as mileage for our country that would certainly boost trade activities.

MANUFACTURING: The Federation of Philippine Industries (FPI) claims that manufacturing continues to have the highest multiplier effect, being the biggest employer here, and rightly so. FPI president Mr. George Chua says that 2014, though not a bad year generally, was fraught with challenges.  Some sectors like the auto industry fared well, but disastrous events like natural calamities, monstrous traffic gridlocks and the port congestion have negatively impacted industries in a big way. The FPI is also endorsing the removal of the truck ban, removing non-moving containers out of the port, and supporting the move to the Batangas port to ease the congestion. The industries that have been severely affected are those in the export processing zones, and that includes the electronics sector where some companies were said to have closed owing to the protracted delays in shipments.

FPI is still bullish about their Buy Filipino campaign.

TRAVEL: Those of us who travel a lot know about the travel fairs that the Philippine Travel Agencies Association of the Philippines (PTAA) stage annually. Mr. John Paul Cabalza, PTAA president, is excited about how travel costs have been pared down considerably so that both domestic and international travel are now very affordable. For inbound passengers, Korea tops the list, followed by the USA, Japan, China, Australia, Singapore and Taiwan. They are encouraging our “kababayans” to discover the Philippines – bat watching in Tuguegarao; Puning Hot Spring where tourists can experience detoxifying while buried neck deep in warm lahar; Nayong Pilipino in Clark; Dragon Boat Festival in Tanauan , Batangas (it’s like a mardi gras!); the great pottery in Tiaong, Quezon, the organic Costales Farm in Mahayhay, Laguna, and the great churches as well as the famous slippers of Liliw, Laguna, among others.

More next week when we have Part 2 of this yearend special.

Mabuhay!!! Be proud to be a Filipino.

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