President's Report

Greetings from the Council

The festive season is here and, on behalf of the Council, I wish you and your loved ones a very happy Christmas, and a safe and prosperous 2012.
 
And to our members, and friends of the Council, thank you for your support throughout 2011.

Meeting with the Australian Ambassador designate, Bill Tweddell

I, together with some members and friends of the Council, met with Mr Bill Tweddell on 8 December 2011.  I found Mr Tweddell very welcoming, and eager to continue the close relationship between the Council and the office of the Australian Ambassador to the Philippines.  That relationship could only be described as being very productive, friendly and vibrant.  Mr Tweddell will commence his new role in mid-January 2012 and he encouraged the Council to engage his office as opportunities  arise. Members are encouraged to approach any member of the Council's executive if they wish to be appropriately introduced to the Ambassador's office.

Farewell to Ms Michelle Sanchez

Michelle Fatima S Sanchez, who is the Special Trade Representative/Consul (Commercial), Philippine Trade and Investment Centre in Sydney, is relocating to New York, in January 2012, in a similar capacity.  Michelle and the Council worked very closely together throughout her term of office in Sydney. On behalf of the Council, we thank Michelle for generously supporting the Council in its various projects, the last significant one being the visit of the Philippine Secretary of the Department of Trade and Industry, the Hon Gregory L Domingo, in June 2011.  We wish Michelle all the best in her new role.

Thank you to Ross Bray

Ross' term as Australia's Senior Trade Representative in the Philippines finishes on 18 December 2011.  We thank Ross for his generous support of the Council throughout his term in office. We wish him all the best in his new role.
 

PANZ Business Forum in Manila February 2012

The PANZ Business Forum which was to be held in July 2011, but postponed, will now be held on 27-28 February 2012 at the Makati Shangrila Hotel.  Find out more about the forum by clicking the image below or download the Registration Form.

Membership renewal

Members would have now received their invitations to renew their membership.  If you have not received your renewal form, please contact me on 0421 055 168 or email Anita at execsec@apbc.org.au.  We have significant events planned for 2012 and you will certainly find your investment in the Council very rewarding.

No newsletter in January 2012

The Council will not be sending out a newsletter for January 2012.  Our next newsletter will be for February 2012.  We urge our members to email articles for publication in the newsletter, to Richard Mann, rbmann@stellarbpo.com.au.



Millie Telan, President

BPO Update

by Richard Mann, Vice President NSW

To an ordinary person, outsourcing a business would seem like a waste of company resources and an additional complication for running a business. This makes sense because after all, why should a company send business abroad when it can be done right at home with a better guarantee for a much higher quality of work. But in the eyes of a businessman, the advantages of outsourcing serve as a modern day bonus for improving one’s business. Outsourcing offers a business the opportunity to transfer important but non-core sectors of business administration on BPO providers that specialize on the needs of the business. This will then provide a company enough time to focus their attention on key areas of the business that will bring more profit and revenue.

The most attractive thing about outsourcing is its cost effective factor. Workforce and IT services within Europe and U.S. are not that affordable as compared to the same services offered by key outsourcing destinations particularly in Asia. In effect, the advantages of outsourcing are more focused on the inexpensive option of operating a business which can be provided by BPOs at a much lower rate. The inexpensive but productive mass labour force can get the job done at half the price it will cost companies when they decide to have it done onshore.

Annually, a lot of well educated people graduate from the universities with various degrees on different fields. These graduates speak better and formal English as compared to native English speakers which make it an advantage for businesses who want to break down the communication barrier. The sudden increase of BPOs in the last decade has given these professionals the opportunity to earn higher than what they can earn being employed in local companies. Being part of a BPO provider also offers them with the chance to stay close to home and earn almost as much as they would if they choose to go abroad and look for a job. A BPO employee can earn as much as $500 a month plus other incentives and benefits. Although this may seem to be just a small amount for Americans or Europeans, the conversion rate is huge in countries like Philippines and India. In the end, both parties are faced with a win-win situation and the job gets done with utmost observance on quality.

There is also a sure guarantee when it comes to the quality and productivity of BPOs. Since all candidates are comprehensively trained and with the prospect of earning more than what they can earn locally, they are expected to give the best they can. BPO providers assure their clients that the job is sure to meet the target and will be delivered on time as agreed upon by both parties. The bottom line will be a thriving business on both ends. Client companies will have a cost effective way of getting their non-core tasks completed while BPO providers develop an earning opportunity for the local labour force.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honoured more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.123Employee.com

Mining Update

by Gavan Collery, Vice President, Vic.

Infuential Filipinos Take Mining to Heart

The BIG news for this month has been the formation of a strategic alliance between Australian miner Indophil Resources and the Philippine-based Alsons Group which has received $100 million in funding support from the Philippines biggest banking group, BDO Unibank. In turn, BDO is part of the SM Group which is controlled by the Sy family, the Philippines wealthiest and most influential family groups.

Indophil holds a 37.5% interest in the Tampakan copper and gold project, one of the world’s biggest undeveloped copper and gold deposits. In a private placement, Alsons plans to use the $100m to lift its interest in Indophil to 19.99% from an existing 3.3%. The move – part of which requires Indophil shareholder approval – will significantly strengthen a strategic alliance focused on supporting the world-class Tampakan project through final approvals, to construction and first production.

In construction, and at a cost of about $6 billion, Tampakan will be the largest single foreign investment in Philippines history. Indophil’s financial and technical partner in the project is global miner Xstrata. The partners act as contractors to the Philippine Government.

In a related development to Tampakan, a Coalition for Responsible Mining in Mindanao (COREMin2), an alliance of key mining companies in Mindanao, is urging President Aquino to step in and resolve the growing dispute over local ordinances banning open pit mining.

This comes amidst plans by the Philippine Government to review mining policy in the Philippines. While the high-level panel conducting the review will make recommendations on the need for provincial ordinances to adhere to national law, the review will also look at the tax take, and miners – foreign and Filipino – have warned against shifting the goal posts. They make the point that the Philippine minerals industry is but a seedling when compared to the oak tree image of mining in countries like Australia, Canada, South Africa and parts of South America. To harvest or prune the industry now will do serious and possibly irreparable damage. Industry has made a series of submissions, and let us hope the Philippine Government is listening. Already, according to research by the Philippine Chamber of Mines, the Philippines has the highest total tax rate (at 43.7%) when compared to OECD member countries, Africa and Latin America. Australia, a relatively high tax country, taxes corporations at about 30% on average.

Meanwhile, and in the face of improved commodity prices, the value of metal production in the Philippines rose 15% in the nine months to September 2011. Gold sales however plummeted 76% due to small-scale producers not declaring their production, and smuggling it offshore. In separate research, it was found that large-scale miners were meeting their full tax obligations to the nation of the Philippines. At a company level, OceanaGold has committed to its reforestation and livelihood programs even though they are not yet in production at Didipio in Nueva Vizcaya. Metals Exploration, which has significant Australian expat connections in its management team, has gained full control of the Runruno gold project in Nueva Vizcaya. Runruno has secured approval to proceed to development, and is about to start construction of the minerals processing plant.

Mindoro Resources is raising new capital, almost $4m, to fund gold exploration and study work in Batangas. Mindoro has also updated its Archangel gold drilling program in Batangas. To date, three holes have been drilled in the program. The first hole delivered assays including 26.7m at 2.19 grams per tonne gold near to surface.

Political

Lt. Gen. Dellosa seen as next chief of Armed Forces

According to sources, President Aquino is set to appoint Northern Luzon Command chief Lt. Gen. Jessie Dellosa as the Armed Forces’ next chief of staff to replace military chief Gen. Eduardo Oban Jr., who will be retiring on Dec. 12. But other sources said it was possible that Mr. Aquino would appoint Deputy Chief of Staff Lt. Gen. Anthony Alcantara to replace Gen. Oban. The latter, Gen. Dellosa and Gen. Alcantara belong to the Philippine Military Academy Class of 1979. Before his present assignment, Gen. Dellosa was commander of the Army’s 2nd Infantry Division based in Camp Capinpin in Tanay, Rizal. He was also a former deputy commander of the Central Command based in Cebu City. During his younger years in the service, he spent time with the Presidential Security Group during the presidency of the late Corazon Aquino, Mr. Aquino’s mother.

Economy

Gov’t maintains GDP forecast

Economic managers will not be reviewing growth forecasts for 2011 despite disappointing third-quarter results, holding out the hope of a boost in the final months of the year. “I don’t think we can still revise the GDP (gross domestic product) forecast for this year. There is no more material time,” Budget Secretary and Development Budget Coordination Committee (DBCC) chairman Florencio Abad said. The interagency DBCC -- which sets the government’s macroeconomic targets -- will instead focus on monitoring growth drivers that are expected to boost fourth quarter GDP. Underspending, one of the main factors that has dragged down growth this year, is constantly being assessed and is expected to significantly improve in the October-December period, he added. The economy expanded by only 3.6% as of September, threatening the government’s 5-6% target and 4.5-5.5% forecast for 2011. Analysts and international institutions have slashed their growth outlooks on the back of the disappointing results, blamed on a weak agriculture sector and a decline in construction spending. The agriculture sector grew by only 1.8% in the third quarter. Government final consumption rose just 9.4% in the third quarter while public construction fell by 21.3%.

ADB slashed PH growth forecasts anew

The Asian Development Bank (ADB) now expects the Philippine economy to grow by just 3.7% this year as it trimmed forecasts for many emerging Asian economies amid unresolved crises in the United States and the euro zone. The Manila-based multilateral lender’s latest Asian Economic Monitor showed a 1-percentage-point cut in the outlook for Philippine gross domestic product (GDP) from September’s 4.7%. In April, the ADB forecast 5% growth for 2011. GDP grew by a record 7.6% last year. The ADB expects an improvement to 4.7% in 2012, down from 5.1% in September. It is lower than the government’s 7-8% growth target and the budget “assumption” of 5.5-6.5% growth for 2012. The 2011 outlook is also lower than the government’s downwardly revised 5-6% target and forecast 4.5-5.5% expansion for this year. The collective growth of 10 countries in East Asia (excluding Japan), meanwhile, was pegged by the ADB at 7.5% this year, a tad lower than the 7.6% projected earlier.

Inflation at 4.8% in November

The Philippines’ annual inflation rate slid faster than expected in November, boosting the chances of a possible reduction in interest rates by the Bangko Sentral ng Pilipinas (BSP) early next year. Some analysts are betting on cuts of as much as 50 basis points in interest rates in the first half of 2012 as moderating inflation pressures give authorities the leeway to focus on boosting growth, which has lost significant momentum this year. “As the favorable inflation outlook provides us flexibility, we are open to possible easing early next year, especially if our own growth prospects continue to be subdued,” BSP Governor Amando Tetangco Jr. said. Annual headline inflation in November was 4.8%, lower than October’s rate of 5.2% and market forecasts of 5%, based on a new series using 2006 prices. The old series based on 2000 prices showed annual inflation at 4.7%, slowing from October’s 5.3%.

Business

Measures to shield electronics sector from global crisis

President Aquino assured the government has been exploring measures to cushion the effects of the global economic slowdown to the Philippine semi-conductor and electronics industry. The industry, a major income generator, has been hardly hit by the global slowdown brought about by uncertainties in major markets such as the United States, Europe and Japan. In his speech before the officials and employees of Epson Precision Philippines Inc. during the inauguration of its new production facility, the President said he was aware of the recent global crisis hurting export-oriented companies like the semiconductor and electronics producers. “So, in this light, we have been working overtime to come up with strategies to strengthen exports, including those in the electronics industry. We’ve been diversifying access points to manage risks in export sales. We’ve been studying prospects in North and South America, in North Asia, and in some ASEAN (Association of Southeast Asian Nations) partner countries as well,” he said. The President said the government was also conducting export promotional activities such as fairs and outbound and inbound missions to attract investors and find new markets.

Competitiveness involves not just reducing red tape

The government needs to move beyond trimming red tape if the Philippines is to improve its global ranking, a competitiveness official said. The recommendation, National Competitiveness Council (NCC) Vice-Chairman Guillermo Luz said, was made by the authors of the International Finance Corp.’s (IFC) “Doing Business” report, the latest edition of which showed the country falling 2 places to 136th out of 183 economies. The recommendations from Jean Marie Lobet and Sylvia Solf, lead authors of the Doing Business report, came as the IFC and the NCC met last month to discuss plans to further streamline the Quezon City government’s business process licensing system (BPLS) and construction permit approval mechanism, and to review the country’s overall competitiveness plan. The recommendations were made as the consultants noticed a narrow focus on improving processes to secure business permits. Reforms related to other documentary requirements and business cycles must be pursued alongside BPLS for considerable improvements in succeeding
competitiveness studies.

Mining coalition urges Pres. Aquino to resolve open pit mining row

The Coalition for Responsible Mining in Mindanao (COREMin2), an alliance of key mining companies in Mindanao, is urging President Aquino to step in and resolve the growing dispute over local ordinances banning open pit mining. In a statement, COREMin2 added its voice to the call for the immediate repeal of provincial environment ordinances that ban open pit mining methods in Mindanao, particularly in South Cotabato and in Zamboanga del Norte. COREMin2 urged President Aquino to seize the opportunity for Mindanao to maximize its potential for growth and development through responsible mining. COREMin2 is strongly committed to the responsible development of mineral resources in pursuit of sustainable development in Mindanao.

Company News

TeaM Energy’s rural electrification program almost complete

TeaM Energy Corp. is nearing the completion of its rural electrification program in Quezon province. Federico Puno, TeaM Energy president and CEO, said the program, being undertaken in partnership with the Department of Energy (DOE) and the Quezon II Electric Cooperative, started in 2010…the project, he said, has led to the electrification of 3,400 households in the Polilio Group of Islands through solar power.

LiquigazPhils. to put up plant in Luzon

Liquigaz Philippines Inc. is planning to put up another LPG plant in Luzon as an indication of its continued confidence on the Philippine oil industry’s growth prospects. Santanu Guha, Liquigaz President and Managing Director, said they plan to build a new plant despite slower sales growth expected this year. He said they are targeting sales to grow by a modest 5% growth in 2011, lower than the 10% growth in 2010.

Philex Mining records 27% growth in production

Benefiting from rising metal prices, Philex Mining Corp. reported a 27% growth in the value of ore produced from its Padcal mine in Benguet in the 11 months ending November this year to P14.92 billion. In a disclosure to the stock exchange, Philex said it also shipped P12.58 billion worth of concentrates from January to November 2011, 19% higher than the P10.57 billion estimate in the same period a year ago. In November alone, the Padcal mine delivered 789,830 dry metric tons (DMT) of ore, resulting in 6,083 DMT of concentrates, said Renato Migriño, Philex Senior Vice President for Finance.

Infrastructure