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Expecting Stronger recovery in 2021

The Philippines is on its way to a stronger recovery as gross domestic product (GDP) is now seen to grow by 7.8 percent next year instead of the original projection of a 5.2 percent expansion, base on the unit of credit rating firm Moody. 

As an economist I can say that Philippines is slowly digging itself out of a deep hole starting in the third quarter, on its way to a stronger rebound next year.

The Philippines however, may  post a deeper GDP contraction of 9.2 percent instead of 4.5 percent this year.

The Philippines is digging itself out of a deep hole after declining quarter-to-quarter by over five percent in the first quarter and by 15 percent in  the second quarter. With the easing up on movement restrictions in the third and fourth quarters, the economy will begin to improve as households accelerate consumption and manufacturers raise production. 

We need also to expects a lower GDP contraction of 9.5 percent in the third quarter and a modest contraction of four percent in the fourth quarter.

However, the real GDP would not exceed its peak in the fourth quarter of 2020 until the second quarter of 2022.

This delay is caused by the depth of the downturn caused by the long and very strict community quarantine orders in much of the country, and due to the modest fiscal support that so far has been pledged by lawmakers to support the economy and rebuild. Global trade is improving as well and exports should contribute to growth before this year is out. 

It does not expect that many of the infrastructure projects that were underway prior to the pandemic would resume and contribute to employment and economic output.

And as the rest of the global economy improves, remittances by overseas Filipinos will improve and help support the economy once again. A persistent drag on the economy will be the slow return of international travel and tourism, which will likely be that slowest component of the economy to recover. 

The uncertainties remain in the Philippines and Indonesia as most of  Asia Pacific  has enjoyed an early bounce back because of relaxed restrictions.

The Philippines and India would see some of the strongest growth rates in the coming years, but this is in large part due to the deep downturns in 2020, which make for easier year-to-year comparisons.

Further, these forecasts are perhaps the most uncertain, since neither country has clearly shown that it has effectively controlled the virus, nor has either committed fiscal resources toward recovery to the degree seen elsewhere in the region. 

Let's just hope for the best after this pandemic as we are all trying to bounce back from uncertainty. 

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Despite Tourism Bust, Dennis Uy’s Gaming Resort Gets Greenlight for P1.125 Billion Share Sale


                                                 The resort is going to be huge.

The pandemic may have slowed down the economy, but it’s apparently not slowing down tycoon Dennis Uy. The head of Udenna Corp. just received a greenlight from the Securities and Exchange Commission (SEC) for its follow-on P1.125 billion stock offering of common shares of Uy’s gaming and hospitality subsidiary PH Resorts Group Holdings, Inc. (PHR).

PHR is the developer of Emerald Bay, a rising casino hub serving as the company’s flagship beachfront resort in Mactan, Cebu. The giant resort sits on 13.5 hectares of land, which includes a 838-room five-star hotel, 8,000 square meters of retail, 18 restaurants, a convention center, and a 7,500 square meter gaming floor. It also occupies a 300-meter long stretch of the beachfront.

Once completed, it will be one of the largest resorts in the region, but that won’t be until next year. The pandemic has slowed down Uy’s gaming hub, but according to PHR, the company is still aiming for a soft opening by the end of 2021, but the first phase should be fully operational by the second quarter of 2022.

The Philippine economy has taken a hit from COVID-19, and the tourism industry has seen its revenues wiped out due to lockdowns. Despite the less than stellar conditions for tourism, PHR is still pushing through with its plans, even though the company posted P138 million in losses, as per its first quarter report.

“Despite the ongoing COVID-19 pandemic, we are confident that the Philippine tourism and gaming industry will be on the road to recovery when Emerald Bay opens,” said Uy.

“This is another milestone on the way to completing Emerald Bay and continuing on our journey to further put the Philippines on the regional and international gaming map.”

Proceeds of the P1.125 billion sale will go toward completing the first phase of Emerald Bay, which is just one of the company’s projects in development. PHR is also reportedly planning to open a similar mega-casino in Clark, which will be called The Base.

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Why do Filipino's think that Philippines is powerless in International Relations?


Decades until now, Most Filipino still believe that the Philippines is a weak country. This is partly because of the long history of the Philippines as a colonial state. 

But why do many Filipinos think we are still a powerless country in the face of international relations? 

Are we really dependent to other nation? Or is it because of  what we've known since we were young? 

Well, recently I spoke to a Political analyst and Economics expert, Mr. Calixto Chikiamco. He eventually shared  his thoughts with me regarding the Filipino mindset about International Relations. 

“ I think we have gotten used to this idea that we are a small victimized country and by extension, we're some kind of a David versus the Goliath throughout history,” He said.

According to Mr. Chikiamco, Filipinos are too enamored with the outdated view of themselves as a small country.

By objective standards, the Philippines is among the world’s 15th largest populations on earth. It is also one of the largest countries, contrary to false beliefs that the Philippines is one of the world’s smallest countries. In fact, the Philippines has one of the longest coastlines equal to that of Canada’s and Russia’s. 

Economically, the Philippines is no pushover either. It is among the world’s 40 largest economies and is expected to breach the 20th spot within this generation.

“The idea of being a small country kind of feeds into our national identity as a small victimized country but nonetheless feistypalaban.”

The Philippines is considered an 'Emerging Middle Power,' and that's something to be proud of.

No less than the Hague Center for Strategic Studies (HCSS) considers the Philippines as one of the influential countries not only in Southeast Asia, but the whole world. It groups the country together with Turkey, UAE, Saudi Arabia, and Ukraine as some of the world’s “emerging middle powers.” In fact, the Philippines ranks higher than these countries according to the HCSS diagram below. 

If this were to be believed, it means the Philippines is more powerful than neighbors IndonesiaThailandVietnam, and Malaysia

According to Chikiamco, power in international relations is not just about raw power or military power.

“Being a middle power is not only about the military and raw power, but it's also about soft power, it’s about our role international institutions, and I think the Philippines has done a great job as one of the core framers of the human rights doctrine in the United Nations,” he said.

The Philippines has a very strong voice in international relations.

The Philippines commands one of the most powerful voices on the world stage, not just in recent years but since the founding of the United Nations. Ever since the creation of the U.N. in 1945, the Philippines has been a very vocal, influential, and valuable asset as a member.

The Philippines gave the U.N. its first Asian President—Carlos P. Romulo, “The Great Statesman.” 


In 1948, after a disagreement during the third U.N. General Assembly, the Soviet Union (USSR) top diplomat Andrei Vishinsky approached Romulo and belittled him and the Philippines.

“You are just a little man from a little country,” said Vishinsky. 

“It is the duty of the little Davids of this world to fling the pebbles of truth in the eyes of the blustering Goliaths and force them to behave!” said Romulo. Vishinsky walked away. 

The Philippines also enjoys a significant amount of international prestige or how other countries view it and its opinions. 

The Philippines is highly respected by other nations. 

At the U.N., the Philippines has a very long track record of standing up for children’s rights, women’s rights, and migrants’ rights.

It is also one of the few nations that send peacekeeping forces to conflict areas around the world. Because of these, other nations view the Philippines as a responsible and highly respected member of the international community. 

“From our contributions to U.N.’s Founding Principles and the Universal Declaration of Human Rights to our co-founding of the ASEAN and commitment to peacekeeping operations in conflict zones and decades of proactive democracy advocacy, the Philippines has been a significant contributor to the liberal international order in ways even our own leaders and folks sometimes tend to under-appreciate,” said Chikiamco. 

The Philippines is not a great power, but it is certainly not a small power. 

“Just as we steadily develop our hard power base, let’s not forget how much soft power we already have at our disposal,” concludes Chikiamco. 

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The World's Most Expensive Tree Is Being Poached in the Philippines

 A kilo of the tree’s Agarwood is worth P750,000. 

There is a gold rush happening in the jungles of the Philippines. The treasure is one of the rarest trees in the world: lapnisan or agarwood. It is also the world’s most expensive tree. A kilo of agarwood fetches as much as P750,000. A whole tree is worth tens of millions of pesos, which is why many people would kill for a piece of this rare tree.

What is the use of Agarwood and why is it so expensive? 

Lapnisan or Agarwood is a non-timber type of wood that is used for its sap or resin, which is used in the perfume and scents industry. The tree is very rare and is found in the deepest parts of the jungles of Southeast Asia, including the Philippines. 

The lapnisan tree itself is not quite valuable. It only becomes a sought-after material when it has become infected with a type of mold, which triggers a defensive reaction from the tree to produce a dark, fragrant substance. You can tell if a tree is infected by looking at the color of its wood. Darker wood likely means the tree has an infection and produces a fragrant scent. 

This oily substance or resin from infected agarwood is worth more than its weight in gold. Perfumers and incense makers are willing to pay millions of dollars for a liter of this “liquid gold.” In 2013, agarwood trade had a global value of $8 billion. 

Lapnisan or agarwood takes 20 years to mature before you can harvest its wood. It only grows in areas with high elevation and cool climate. The tree grows 10 to 12 feet only. It is hard to cultivate, which is why it remains a very rare species. 

Selling agarwood or lapnisan is illegal

In the Philippines, lapnisan or agar is found only in the heart of the thickest jungles of Mindanao and the Visayas. Foreigners travel to the Philippines and hike to remote villages seeking help to find the rare tree.

But lapnisan is an endangered species and the government has it under its protection. The Department of Environment and Natural Resources (DENR) says it is illegal to buy, sell, collect, or transport any part of agarwood or lapnisan

The blanket ban on lapnisan does not prevent poachers and traders from removing them from the jungles. On social media platforms, there are illicit groups that were created specifically for the sole trade of agarwood. Traders keep their transactions secret by masquerading agarwood as gadgets. This way, authorities will have a harder time tracking them down. 

Below is an example of a post selling lapnisan online. Sellers hardly use the word agarwood or lapnisan in their dealings but would use codenames. 

What does agarwood smell like? 

Depending on the quality of the raw materials, agarwood emits different scents. It has notes of soft florals, but what makes its woody scent so unique are the accents of musk, vanilla, and bright fruits. It is a favorite scent of perfumers, incense makers, and candlemakers.

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DoubleDragon Eyes P17 Billion IPO for its REIT as SEC Clears Ayala Land’s REIT IPO


It’s a good year if you’re an investor looking to get into real estate investment trust (REIT) despite of the pandemic. 

Last July 10, 2020, the Securities and Exchange Commission (SEC) announced that it has cleared the initial public offering (IPO) of an REIT sponsored by Ayala Land Inc. (ALI).

On that same day, Edgar “Injap” Sia’s DoubleDragon Properties Corp. announced that it has identified the first tranche of assets in its DD Meridian Park, its crown jewel property, that will be infused into an REIT.


On the Ayala Land REIT, the SEC said it has approved initially the registration statement of AREIT Inc, for 1,092,986,504 common shares for listing and trading on the Main Board of the Philippine Stock Exchange (PSE) under the trading symbol “AREIT. 

The registration statement covers up to 47,864,000 new common shares and up to 409,019,000 existing common shares for public offering, with an over-allotment option of up to 45,688,700 secondary shares, at a maximum offer price of P30.05 apiece.

According to a statement from the SEC, AREIT could raise P1.332 billion in net proceeds from the primary offer for the expansion of its building portfolio through the acquisition of a fourth building, Teleperformance Cebu (not including the land), from a subsidiary of the sponsor or an alternative property from the sponsor or any of its subsidiaries or affiliates.

Ayala Land, meanwhile, could net about P13.309 billion from the secondary offer, assuming full exercise of the over-allotment option.

The SEC said it would wait until AREIT Inc., which was formerly known as One Dela Rosa Property Development, Inc., complies with the remaining requirements before it issues the Order of Registration and the Permit to Offer Securities for Sale. As of today, September 18, 2020; AREIT Inc yet to comply for the requirements. 

AREIT’s property portfolio currently consists of three commercial buildings, excluding the land on which they stand, namely Solaris One and Ayala North Exchange and, as of February 1, 2020, McKinley Exchange via lease from the sponsor.

DoubleDragon’s DD Meridian Park REIT

Meanwhile, DoubleDragon Properties said its DD Meridian Park REIT offer will consist of seven buildings with a total area of 248,349 square meters. With the estimated value of the basket of REIT assets at P50.89 billion, the company expects to generate about P16.96 billion of proceeds from the planned REIT listing, which represents an offer of 33.33 percent or the minimum public float of the selected REIT assets. 

DoubleDragon said all of the proceeds from the listing will be reinvested in the Philippines as required under the Revised Implementing Rules and Regulations (IRR) of Republic Act No. 9856, or the REIT Act of 2009. The company said the REIT proceeds will be enough to construct about 450,000 sqm of building floor area which will further significantly increase the leasable portfolio and recurring rental revenues of the company in the near term.

In addition to the seven buildings that will form the first tranche of DDMP REIT, two more buildings also located within the DD Meridian Park complex that are still under construction are planned to be infused in the DDMP REIT “within two to three years.”

DoubleDragon said it is preparing to file its REIT listing application with the SEC and the PSE in August 2020 and is targeting to list the DDMP REIT by October 2020. 

"Other than the safeguards already indicated in the REIT listing rules, REIT investors generally want five elements present,” said DoubleDragon Chairman Edgar ‘Injap’ Sia II.” “1. Asset basket in a prime location that is seen to remain relevant in the next 30-50 years at least, 2. Reasonable yield above a bond coupon, 3. Good tenant mix, 4. Capable property management, and 5. Good pipeline of assets for future infusion. We believe all of these elements are present in DoubleDragon’s leasable portfolio.”

“The REIT valuation of US$1 Billion we believe is an attractive size that would appeal to a strong pool of both foreign and local REIT investors,” added DoubleDragon Chief Investment Officer Hannah Yulo-Luccini.

What are REITS

REITs are essentially corporations that manage real estate assets that produce regular income such as hotels, apartment buildings, office and commercial buildings, and shopping malls. According to the SEC, besides providing real estate companies a cheaper source of capital and promoting economic development, growth in tourism and liquidity in the capital markets, REITs allow both small and large investors to participate in the direct ownership of real estate and is an alternative investment instrument to foreign investors as well as OFWs.

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Lucio Tan’s PNB Planning to Sell Properties Worth $1 Billion



Philippine National Bank is selling off three prime properties worth $1 billion to help reduce low-earning assets and improve revenue.

The bank owned by billionaire Lucio Tan said it is planning to dispose of a 10-hectare property near Manila Bay, an office building, and a prime lot in Makati City, Bloomberg reported. The news agency said the source declined to be identified as the deal is pending approval from shareholders and regulators.

While a PNB spokesperson declined to comment, the listed company issued a statement about the reported sale to the Philippine Stock Exchange.

“Please be advised that PNB is currently in the process of assessing the scope of the project, including the identification of specific properties,” the company said. “As previously reported, the final terms and conditions of the underlying transactions will be disclosed accordingly once the necessary corporate and regulatory approvals are obtained.”

David Leechiu of Leechiu Property Consultants Inc told Bloomberg the estimated value of the properties is about P43.7 billion (about $900 million).

PNB, which is under Tan’s LT Group, contributed P795 million or eight percent to the conglomerate’s total attributable net income during the first half of the year. Total net income, however, was P1.44 billion, 64 percent lower than the P2.60 billion it posted in 2019.

But Tan’s other businesses, particularly Philippine Airlines, have not been spared the ravages of the coronavirus pandemic. PAL Holdings Inc., the parent company of the nation’s flag carrier, reported a comprehensive loss of P22.02 billion in the first six months of 2020. That’s P19.01 billion higher than the P3.01 billion loss it reported in the same period last year. 

A bright spot in Tan’s portfolio, however, is the tobacco business, whose net income surged 40 percent during the same time frame, from P5.87 billion in 2019 to P8.22 billion in 2020. 

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2020 Philippines' Richest in Forbes Lose Billions in the Covid-19 Pandemic



With the economy down and hundreds of businesses losing profits due to the six-month lockdown, the richest individuals in the Philippines are witnessing their fortunes fall—fast. According to Forbes, “The collective wealth of the Philippines’ 50 Richest dropped to $60.6 billion (P2.9 trillion) from $78 billion (P3.8 trillion) a year earlier.”

The Top 10 Arena

In the top 10 arena, the billionaires managed keep their spot among the richest of the rich—except for the Ty siblings of Metrobank who lost 46 percent of their family fortune, which is now at $1.4 billion (P67.8 billion), down from $2.6 billion (P125.9 billion) in 2019.

With the Tys out, the Cos are in. Puregold’s owners, husband-wife duo Lucio and Susan Co, made their way to position 10 on the rich list, up four places from 2019. Their net worth is now at $1.7 billion (P82.4 billion) after experiencing minimal losses from their net worth of $1.8 billion (P87.2 billion) in 2019.

Meanwhile, the Sy siblings still occupy the top spot with $13.9 billion (P673.5 billion) in combined net worth, down $3.3 billion (P159.9 billion) from their net worth of $17.2 billion (P833.4 billion) in 2019. Manny Villar and Enrique Razon Jr. follow the Sys with $5 billion (P242.3 billion) and $4.3 billion (P208.3 billion), respectively.

Top 10 on Forbes’ Philippines’ 50 Rich List

  1. Sy Siblings – $13.9 billion
  2. Manuel Villar - $5 billion
  3. Enrique Razon Jr. - $4.3 billion
  4. Lance Gokongwei and siblings - $4.1 billion
  5. Jaime Zobel de Ayala - $3.6 billion
  6. Andrew Tan - $2.3 billion
  7. Lucio Tan - $2.2 billion
  8. Ramon Ang - $2 billion
  9. Tony Tan Caktiong - $1.9 billion
  10. Lucio and Susan Co - $1.7 billion

Winners and Losers

Of the 50 billionaires and millionaires on the list, 32 experienced losses in their net worth. Some could count their losses as a drop in the bucket, but others saw half of their entire fortunes wiped out.

To the misfortune of Oscar Lopez (ranked 32), a majority stakeholder of ABS-CBN, his company faced trouble on two fronts: first, the pandemic, and second, the refusal of congress to grant ABS-CBN a franchise, halting majority of the broadcasting company’s operations indefinitely. According to Forbes, the chairman emeritus of Lopez Holdings lost almost half of his wealth, with his net worth down to $240 million (P11.6 billion).

Yet Lopez is still wealthier than the owners of ABS-CBN’s competitor GMA. The network’s CEO Felipe Gozon comes in at position 42 with a net worth of $170 million (P8.2 billion), while Menardo Jimenez, Gozon’s brother-in-law and a former president of GMA Network, banks $125 million (P6 billion) at 47th place.

Meanwhile, the biggest winner of 2020 was undoubtedly Edgar “Injap” Sia II, (21) head of DoubleDragon Properties, who launched the IPO of MerryMart. Despite debuting in the middle of the pandemic, MerryMart’s IPO was met with great success, adding $300 million (P14.5 billion) to Sia’s wealth. The founder of Mang Inasal is now worth $700 million (P33.9 billion).


At number four, the six Gokongwei siblings are newcomers to the list, occupying the slot of their late father John Gokongwei Jr., who passed away in late 2019. His fortune was inherited by his children Lance, Robina, Lisa, Faith, Hope, and Marcia. Lance now runs JG Summit as CEO. Their combined wealth is $4.1 billion (P198.7 billion).

Also coming into an inherited fortune is Soledad Oppen-Cojuangco (16), whose husband Eduardo “Danding” Cojuangco of San Miguel Corp. passed away in June of this year. She now shares her fortune of $1.15 billion (P55.7 billion) with her four children.

Returnees on the list are Mikel Aboitiz (49) of Aboitiz Equity Ventures, Lourdes Montinola (50) of Far Eastern University, Michael Romero (46) of Air Asia, and Luis Virata (48) of Nickel Asia.

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Expecting Stronger recovery in 2021