Philippines-United States economic ties enter ‘golden spot’

Amid the reinvigorated alliance between the Philippines and the United States, economic ties between the two countries have now reached a “golden spot,’’ according to New York Consul General Senen Mangalile.

“We’re really in that golden spot,” Mangalile said in a recent press briefing at the Philippine Center in New York.

This developed as Philippine companies are expanding in the US while American private equity firms and other funding institutions are on the lookout for investment opportunities in Manila.

Benedict Uy, trade commissioner and head of the Philippine Trade and Investment Center in New York, said that a Philippine-listed manufacturing company is in the process of setting up a distribution hub in the US so that it can reach more companies across America.

“They want to be more aggressive in that, so they’re setting up their distribution center here. They’ve been working on that since last year,” Uy told visiting Filipino journalists who are part of the US State Department’s inaugural Friends, Allies, Partners program.

The Philippine company is engaged in the production of raw materials for a wide array of consumer products, including coconut-related products used for higher value applications such as consumer goods and personal care products such as cosmetics.

Uy, however, declined to name the company as it has not made an official announcement yet on its planned distribution hub, which may be completed as early as this year.

There are other Philippine companies that are also expanding their operations in the US including Jollibee Foods Corp., Century Pacific Food Inc. and Armscor Global Defense Inc., Trade Undersecretary Ceferino Rodolfo said in the same briefing.

Jollibee Foods has been aggressively expanding in North America while Century Pacific’s plant-based product unMeat has been successfully growing its presence in US groceries and supermarkets since it entered the market last year, Rodolfo said.

Armscor, which manufactures firearms, is not new in the US, but remains a strong presence in the American firearms industry, he also said.

Philippine startups and other local ventures, meanwhile, have caught the interest of New York-headquartered private equity firms and other funding institutions either as their potential angel investors or funders, Uy said.

“There are also a number of projects that are locally initiated and are happening in the Philippines but are getting a lot of interest from the funding institutions here in New York such as private equity firms and financial institutions. They are investing in these projects,” Uy said.

Mangalile said that the Philippines’ economic relations with the US are indeed “more open, deeper and expanded” and this is seen helping the country’s growth in the years to come.

He said President Marcos’ visit to New York in 2022 has started a string of different events that have significantly improved the relationship between the two nations, Mangalile also said.

“Some US big players have been visiting the Philippines.”

Mangalile said the present situation is ideal, compared to the previous administration when the perception was that it was not very open to deepening relations with the US.

Source: Business World

Philippines lags ASEAN neighbors in smart tourism index

The Philippines lags behind some of its Southeast Asian neighbors in terms of readiness in developing smart tourism ecosystems, hampered by high internet costs and accessibility issues in rural areas, the Asian Development Bank (ADB) said.

In a report entitled “Smart Tourism Ecosystem Development Readiness in Southeast Asia,” the Philippines received an average readiness score of 56. A score of 100 indicates a country’s ability to adopt an enabling environment for smart tourism.

Among six Association of Southeast Asian Nations (ASEAN) members in the index, the Philippines ranked fourth, behind Thailand (72), Vietnam (67) and Indonesia (66).

The Philippines was ahead of Laos (53) and Cambodia (50).

“Despite national tourism policies prioritizing digitalization backed by strong tourist and industry demand, smart tourism ecosystem development in Southeast Asia is constrained by insufficient finance and limited digital skills, urban-rural digital divides, and an evolving legal and digital policy environment,” the ADB said in the report.

Having an ecosystem that enables smart tourism boosts a country’s attractiveness as a tourist destination, the ADB said.

“The Philippines demonstrates strong gender equality, high average broadband internet and 4G coverage, and good transaction infrastructure supporting online access to finance. Additionally, the Philippines has high digital talent availability,” the ADB said in the report.

The index measured a country’s overall readiness based on two factors — enabling environment and technological readiness.

The Philippines received a score of 57 under enabling environment, which assesses a country’s tourism competitiveness and digital inclusiveness in the legal, financial, social, and geographic fronts.

The report noted Laos and the Philippines scored highest in terms of equality between men and women’s internet usage.

However, the Philippines scored the lowest among its regional neighbors in terms of the urban-rural digital divide. Digital gaps are “perpetuated by unreliable electricity and network coverage gaps, low literacy rates, unaffordable internet services, and language barriers,” ADB said.

The Philippines also scored below-average on tourism competitiveness, legal environment for businesses, and financing options for technological development.

The country also received a score of 55 in terms of technological readiness, second lowest among the six ASEAN members.

The Philippines received low scores in terms of average internet speed, percentage of rural households with internet access, percentage of households or businesses with a computer, mobile access affordability, and research and development for digital innovation.

Among ASEAN counterparts, the Philippines scored the lowest on broadband internet costs and availability of electronic visas (e-visa).

All six countries scored low on access to electronic payments, ADB added.

ADDRESSING ISSUES

The ADB said the Philippines needs to address the urban-rural digital divide, expand financing options, lower broadband costs, and launch an e-visa facility.

The ADB noted the Tourism department is working to close the urban-rural digital divide by allocating $2 million to local government units (LGUs) for smart tourism projects.

The Philippines also started offering e-visas to some countries in the latter part of 2023 and is working with development partners to improve its smart tourism ecosystem. The ADB recently approved funding for the Davao Public Transport Modernization Project, which will establish a smart transportation system in Davao.

Overall, the ADB said the six ASEAN members struggle over a lack of digital infrastructure investments, urban-rural gaps, and threats to data privacy and cybersecurity.

Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said the Philippines must differentiate its tourism sector from its ASEAN neighbors to boost its share of the global market.

“The current digital transformation makes this more difficult since now we need more technologically savvy tourism workers, if not a more educated workforce, to take advantage of the opportunities offered by the new technology,” Mr. Lanzona said in a Facebook Messenger chat.

Sherwin E. Ona, a former associate dean at the De La Salle University College of Computer Studies, said the Philippine government must adopt smart tourism policies.

“Smart tourism should adopt platforms that can capture and aggregate customer needs and demands and at the same time link supply chains. An example of this is having a single online access point for tourism destination per region or province. These smart tourism portals can link the sites, together with accommodations, dining, shopping, and transportation sites that tourists can avail,” he said in a Viber chat.

The Philippines attracted 5.45 million tourists in 2023 and is targeting 7.7 million tourist arrivals this year.

To compare, 23 million international tourists visited Thailand in 2023, while 12.6 million and 11.68 million tourists visited Vietnam and Indonesia, respectively.

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Source: Business World and ADB

Charting a course for energy security

Midway through the dry season, the Philippine Atmospheric Geophysical and Astronomical Services Administration has already issued warnings of dangerously escalating heat indexes. Consequently, this forecast signals a looming surge in energy demand, posing a significant challenge for the country amid ongoing issues with power supply.

Last week’s successive Red and Yellow Alert declarations by the National Grid Corp. of the Philippines serve as a stark reminder of the strain on our energy grid, foreshadowing what may come in the days ahead as Filipinos ramp up the use of cooling appliances to battle the scorching heat.

The declaration of a Red Alert status for three consecutive days last week on the Luzon grid signaled a critical imbalance between energy supply and demand, signaling imminent rotating power interruptions. Department of Energy Secretary Raphael Lotilla attributed these situations to unplanned power plant outages triggered by “extremely high temperatures.”.

Fortunately, in Metro Manila and nearby areas served by Meralco, the Interruptible Load Program (ILP) played a crucial role in mitigating the impact of these shortages. Data from Meralco showed that through the ILP, nearly two million households were shielded from rotating power interruptions, thanks to the voluntary grid de-loading by participating companies.

Without the steadfast support of the private sector, thousands of Filipino households would have endured brownouts amidst the crippling heat.

The ILP is a government program that provides incentives to companies that opt to run their generator sets during Red Alert instances, thus reducing their grid dependency. This proactive measure not only alleviates strain on the grid but also serves as a lifeline for households without generator sets, shielding them from debilitating power disruptions. Hopefully, in the spirit of “bayanihan,” more companies will heed the call and enroll in the ILP in the days to come.

However, while the ILP proved effective in averting immediate crises, it is important to note that this is only a stop-gap solution.

With economic growth driving continued increase in energy demand, the trajectory is clear: without increased capacity, the threat of rotating power interruptions will persist.

It is important to emphasize that power interruptions pose more than just an inconvenience – they imperil economic growth, pose risks to personal and public health, and threaten the overall well-being of communities.

There is an urgent need to bolster our energy infrastructure by accelerating the development and operation of new power plants.

Priority must be directed toward cultivating an investment-friendly environment for the establishment of new power plants, while concurrently implementing measures that enable swift action to bolster our energy capacity. To effectively address this challenge, we must adopt a multifaceted approach, which includes prioritizing cleaner energy sources like liquefied natural gas and renewables. Additionally, exploring new technologies such as nuclear energy can significantly contribute to achieving this collective goal.

To expedite progress, collaboration between the public and private sectors is essential. Together, we can implement initiatives to expand energy capacity, diversify our energy supply portfolio and foster sustainable growth.

By prioritizing sustainability and innovation, alongside strategic infrastructure development, we can achieve lasting energy security for our nation.

Source: Philstar