Monthly Archives: December 2011

I’m a development entreprenuer now

While I have not read the book mentioned in this article I can identify myself as a development entreprenuer.

Now let me get a copy of the book to get a full appreciation of the wealth of ideas provided by the case studies written by the various respected and established authors mentioned.

 

From Business World

December 25, 2011

Development entrepreneurship

There are business entrepreneurs, tech entrepreneurs, and lately, even social entrepreneurs, but development entrepreneurs?

According to Jaime Faustino and Raul Fabella, editors of the book Built on Dreams, Grounded in Reality: Economic Policy Reform in the Philippines (Asia Foundation, 2011), “development entrepreneurs” are “individuals who take responsibility for the reform challenge and for seeing to the achievement of the outcome. They are generally self-motivated; that is, with or without a helping hand from others or from development agencies, whether within or without the government, these individuals continue to pursue the reform and development outcome.”

Like other types of entrepreneurs, “resources at their disposal are very limited. Relative financial independence and time-space flexibility seem to characterize these individuals.”

The need to coin the term development entrepreneurship stems from the recognition that the old model practiced by multilateral and bilateral aid agencies has repeatedly failed to effect any significant change or marginally positive development outcome. Millions, if not billions, have been poured as aid to the Philippines, and other developing countries for that matter, without any result. Critics in the aid community even say that the correlation between aid and development outcome has been negative since the aid is often misused by recipient governments or used as an excuse not to undertake any lasting reform. The miracle countries in Asia like Taiwan, Malaysia, and China have not been major recipients of aid.

To Faustino and Fabella, the answer of why aid doesn’t produce results is simple. Development agencies have been fixated on technical solutions, ignoring the political economy of reform. They prescribe one-size-fits-all technical solutions, ignoring local context and political motivations. They are locked in a “log-frame” mentality that counts meetings, papers produced, and conferences held within a specific time frame as metrics of success, rather than forging coalitions for change. They hire technically proficient but politically clueless individuals as contractors, rather than fully committed, politically savvy “development entrepreneurs.”

According to Faustino and Fabella, development agencies need to move toward a new model where politics and political economic analysis are central to the approach. After all, any policy change will disrupt the political and economic forces with a vested interest in the old order. Changing the old order will require political action. Attempts by the World Bank and the ADB, for example, to reform the National Food Authority have resulted in repeated failure because the NFA had no incentive to change and had powerful political backers.

To protect itself from the charge of political interference, Faustino and Fabella suggest for development agencies to work through intermediaries who will act as development venture capitalists. As development venture capitalists, the intermediaries’ principal role will be to identify, nurture and foster lasting relationships with development entrepreneurs.

Faustino and Fabella’s analysis and proposals weren’t developed in the abstract, but distilled from practice. The book contains case studies of successful and unsuccessful reform efforts. These case studies include: “The Philippine Roll-On Roll-Off Experience” by Dr. Enrico L. Basilio; “Exploring the Political Economy of Civil Aviation Reforms” by Professor Maria Cherry Lyn Salazar-Rodolfo; “The Privatization of the Metropolitan Waterworks and Sewerage System: How and Why It Was Won” by Dr. Raul Fabella; “The Philippine Telecommunications Reform Story” by Mary Grace Mirandilla-Santos; “Property Rights Reform and the Free Patent Act” by yours truly; “Stymied Reforms in Rice Marketing in the Philippines” by Dr. Bruce Tolentino and Beulah Ma. de la Peña; “BIR Reform Initiatives: Why is Success so Elusive?” by Dr. Raul Fabella and Karl Kendrick Chua.

I had the privilege of co-writing with Dr. Fabella the case study on property rights reform and the Residential Free Patent Act. If you read that case study, of how a small team was able to pass a landmark law that attacks a huge property rights problem — half of all land parcels in the Philippines remains untitled — you will see why getting a reform done is more entrepreneurship than project management. Ability to improvise, EQ (Emotional Quotient), resilience, tenacity, patience, and political smarts matter more than IQ and technical proficiency. A development entrepreneur should be more MacGyver than Einstein.

Particularly worth reading is the chapter on “Development Thinking and the Rise of Human Agency” by Dr. Raul Fabella, the only living national scientist in economic science. It’s a brilliant summation of the evolution in development thinking and a theoretical piece on the role of development entrepreneurs in institutional change. To Fabella, institutional change is a collective action problem, and development entrepreneurs strengthen and redirect collective action toward the common good.

Readers who want a copy of the book may call Asia Foundation at 8511466. Ask for Abi or Robbie. Or they can download the chapters at the Asia Foundation web site at http://bit.ly/tlCxCS.

Article location : http://www.bworldonline.com/content.php?Section=Opinion&title=Development entrepreneurship&id=43893

Include the receipt in your gift

Its not just technical gadgets but any gifts we give to someone who later on do not have the same appreciation (or its use) suffer the same fate. One reason why I prefer the Chinese practice of cash gifts.

Buyer’s Remorse: What to Do with Tech Gifts You Don’t Want

Just because you didn’t get the perfect gift during the holidays, it doesn’t mean you can’t get what you want
From TIME magazine
By KEITH WAGSTAFF | @kwagstaff | 26 December 2011
Getty Images

GETTY IMAGES

So, you bought Grandpa an iPad. You thought he could do things like keep track of his doctor’s appointments and watch World War II documentaries on Netflix. Instead he uses it primarily as a $500 coaster for his morning coffee.

Welcome to the world of tech buyer’s remorse. There are plenty of reasons this year’s hottest gadgets turn out to be duds on Christmas morning. Maybe the technology was just too advanced for the 95-year-old or the 3-year-old it was bought for. Maybe the gadget was the wrong model, broken or just plain boring.

In the end, you’re going to have to do what every red-blooded American shopper fears most: enduring a long return line full of disgruntled customers. Just in case you were thinking of waiting a few months to beat the holiday crowds, forget it, because the time window for returning tech gifts is usually pretty short when compared with other products.

At Best Buy, you have just 14 days to return any unwanted computers, monitors, projectors, camcorders, digital cameras or tablets, compared with the usual 30 days. Walmart gives you 15 days for tech gear, 75 days less than the usual return policy allows. Remember, that’s the time after purchase, so if somebody did their Christmas shopping early, you might be out of luck.

You’re a little bit better off if you ordered through Amazon. The site gives you 30 days after a computer or Kindle is delivered to return it for a gift certificate or refund.

If it all seems like a hassle to you, you’re not alone. According to a poll by the National Retail Federation, only 35% of Americans returned one or more gifts after last year’s holiday season. Either everyone was happy with what they got, or a lot of people decided that returning the iPod Shuffle they received for the iPod Touch they wanted wasn’t worth getting off the couch.

If you got something you don’t want, don’t worry about hurting anybody’s feelings when returning it — a full 61.9% of shoppers said that they included gift receipts with their gifts last year, the highest rate since the poll was first conducted.

What happens if after one month Gramps decides an iPad just isn’t for him or your picky 7-year-old rejects his LeapPad for the box it came in?

Luckily there are still a ton of people out there who want your high-tech swag. The black 64-GB, wi-fi- and 3G-equipped iPad 2 is selling mostly in the $700-$800 price range on eBay, not a huge drop-off from its original $829 sticker price. Move fast, though; the closer it gets to the release date of a new product, the less your old version will sell for online.

If you’re feeling the holiday spirit, you might even want to donate your computer or iPad to charity. Computers with Causes will match your unwanted desktop, laptop or iPad with someone in need, while the Hollyrod Foundation is often looking for iPads to help kids with autism. Recycling for Charities will either refurbish your nonworking electronics for charity or dispose of them in an environmentally safe way.

If none of those options seem appealing, there is always the ancient art of regifting. Just because you don’t want your BlackBerry PlayBook, it doesn’t mean your Aunt Edna won’t be able to find a use for it, even it’s just as a coaster.

Read more: http://techland.time.com/2011/12/26/buyers-remorse-what-to-do-with-tech-gifts-you-dont-want/#ixzz1he9ZFLV8

What entrepreneurs should learn from Blessed John Paul II


This Christmas season particularly for those of us in business let us think how to do things differently to make a difference for people particularly those most disadvantaged in the community.

From Catholic Culture.Org

By Phil Lawler

20 December 2011

In an era of global enterprise, when some overweight financial firms are deemed “too big to fail,” how should an honest Christian entrepreneur behave? Can the abstract principles of Catholic social teaching be applied to the practicalities of life in the business world? Andreas Widmer tackles those questions in The Pope and the CEO.

Widmer, a former member of the Swiss Guard, saw Pope John Paul II at close range, and was inspired by his example as a leader as well as a teacher of Catholic doctrine. When he announced that he was leaving the Swiss Guard, the Pope gave him a final order: “Go and bring Christ to the world.” After years in business, Widmer does his best to fulfill that order with this book.

After leaving the Vatican, Widmer frankly admits that he made a series of mistakes. He plunged headlong into the corporate world, made a great deal of money, and very nearly ruined his life. After a series of jobs that left him financially secure but emotionally unsatisfied, he risked his fortune on a new venture, lost, and crashed. After a period of soul-searching he realized that he had forgotten both the Pope’s exhortation and the lessons he had learned by observing that great man in action.

So Widmer started out again—this time, trying to maintain his unity of life, and live out the principle of Catholic social teaching in his business dealings. Today he works with the SEVEN Fund, a charitable organization that promotes entrepreneurial approaches to the fight against poverty.

In this anti-poverty work, Widmer disdains the organizations that “patronize the poor,” and warns against those who use world poverty as an excuse to establish their own fiefdoms. To work effectively for the poor, he insists, one must understand their needs, unlock their abilities, and help them to generate new wealth by themselves.

Helping people to realize their potential: this, Widmer argues, is the key not just to anti-poverty work, but to any successful enterprise. He uses Blessed John Paul II as an illustration of his point. The late Pontiff touched and inspired countless millions of people because he cared for them: genuinely, deeply, consistently. A great leader succeeds by serving others.

The lessons in leadership furnished by John Paul II are inextricably entwined with the Pope’s spiritual teachings, Widmer points out. A good leader—in the business world or in any other line of work—should exhibit the cardinal virtues: prudence, justice, temperance, and fortitude. It takes humility, too, to recognize one’s own limitations and to recognize good advice. And Widmer, following John Paul II, takes the extra step to say that prayer is essential as well, to help keep everything in proper perspective.

The Pope and the CEO is not a textbook of Catholic social teaching, but an innovative sort of management manual, which could be enjoyed by non-Catholic and non-Christian readers. The author makes these points not by citing dogmas or listing formulas, but by relating short stories about the work habits of John Paul II and showing how the Pontiff embodied the qualities of leadership. Widmer is a good story-teller, and he draws out the morals of his stories gently, without preaching.

In the process, the former Swiss Guard includes a number of interesting stories about the life of the late Pontiff, including a few that were new to me. I had not realized, for instance that Ronald Reagan’s famous challenge to Gorbachev to “tear down this wall” was delivered shortly after the American president met with Pope John Paul. Was that a coincidence? Nor was I aware that the late Pope lost a long battle over the spelling of his name on his tombstone.

While it is primarily a book about management, The Pope and the CEO includes enough of these little tales, and enough other different elements, to satisfy readers who have no special interest in economic affairs. Any reader with an appetite for stories about Blessed John Paul II will enjoy this book, as will anyone who would enjoy a taste of life in the Swiss Guard, or the recollections of a young entrepreneur, or some sound spiritual advice. This book has enough interesting facets to appeal to a wide variety of different sorts of readers—which, come to think of it, might make it a solution to some last-minute Christmas-shopping problems.

In fact, the most charming anecdote in the book is a Christmas story. With a vivid personal memory, Widmer lets us know that while Swiss Guard are pledged to take care of the Pope, sometimes it is the Pope who takes care of the Swiss Guard. The story—I won’t give it away; look for it beginning on page 73—beautifully illustrates a central theme of the book: that a great man and a great leader is never too busy to notice the people who serve him.

How to enjoy Christmas presents according to John Lewis

Please watch this video and see a different perspective on how to enjoy Christmas presents according to John Lewis.

Merry Christmas and a Happy new Year!

Why developers land bank

In this article, an explanation is given to the practice of land banking of property developers and where the writer says its practice is really a reflection on regulatory environment present. I wonder if it the same case applies where the regulations are lax or even non-existent and whether this encourages use, abuse and misuse of the property to the disadvantage of the government and the community at large.

From MacroBusiness.com

Posted by  in Economicson 23 December 2011

Land banking is a common practice adopted by developers, whereby they accumulate land for development well before the date at which they intend to sub-divide and build new housing.

In modern production processes, “just-in-time” systems – where inputs into the production process are received/acquired just prior to use – are favoured because they reduce the amount of capital ‘tied-up’ in inventory and maximise returns.

Greenfield property development is often viewed as a ‘pipeline’ process, whereby development firms move sequentially through undeveloped sites and gradually change raw rural lands into new housing estates. In this regard, property development is just another production process. So why, then, do property developers tie-up significant amounts of their capital in land banks, instead of simply purchasing undeveloped land as required in a ‘just-in-time’ manner?

The answers lie in the fact that the market for land is imperfect and land is not freely available to be purchased ‘off-the-shelf’. That is, a developer nearing the end of one housing development cannot simply phone a land wholesaler and purchase a new parcel of land to develop. Rather, they must: 1) first search and acquire information on what land is available; 2) negotiate with potential sellers; and 3) in the case of markets with strict land-use regulations, they must navigate the planning system, including seeking planning approval.

If a developer fails to acquire the land and seek planning permission in sufficient time to maintain continuity of production, they risk having their resources sitting idle (e.g. employees, plant and equipment) and may ultimately go out of business.

The size of land banks held by developers is likely to be proportional to the perceived risks and uncertainty of gaining land supply and/or planning permission. Under more restrictive land-use regimes, where there are significant delays and uncertainty in gaining planning permission, developers will typically need to hold larger land banks than in regimes where development is less restricted by regulation and the conversion from rural to urban uses is allowed to take place with minimum interference and fuss. This is because restrictive land-use regimes typically increase the length of time and costs involved in moving from the search and acquire stage of the development process to the construction stage.

Where land-use regulations restrict the amount of developable land available – such as through urban growth boundaries, restrictive zoning, or inadequate infrastructure provision – they also encourage developers to land bank not only to ensure their own continuity of supply (production), but also to make it harder for rival developers to find suitable land. In the process, rival developers can be driven out of business, reducing the overall level of competition in the development market. This is a particular problem for smaller firms lacking the capital necessary to buy-up land ahead of time.

Another consequence of land banking is that it is likely to result in greater levels of pro-cyclicality and facilitate boom/bust price cycles. During periods of strong land/house price growth, the costs of land banking are relatively low because the rate of price appreciation typically exceeds holding costs. However, when land/house prices are stable/falling, land holding costs exceed the level of capital appreciation, resulting in negative returns from land banking.

A better way to prevent land banking:

Last week, fellow MacroBusiness blogger, Rumplestatskin, put forward a proposal to reduce property industry ‘rent-seeking’ (achieved partly via land banking) through a system of tradeable development rights.

While it is an interesting proposal, I believe that it treats the symptoms of ‘rent seeking’ (or ‘planning gain’) whilst ignoring the main cause: overly restrictive and bureaucratic planning processes.

For reasons outlined above, land banking – an especially baneful form of rent seeking at the current time – is more prevalent in situations where land supply is constrained and planning approval processes are slow and uncertain. Land banking is also only profitable where the value of land is rising faster than the cost of capital. And in the absence of physical barriers to land supply, land price increases above the level of inflation are driven primarily by policies and regulations that artificially restrict the supply of land.

It stands to reason, then, that the removal of regulatory constraints on the supply of land, along with more permissive planning policies and infrastructure provision, would increase competition amongst both developers and land owners, thereby driving down the cost of land/housing. The existence of high levels of competition would, in turn, make land banking particularly risky, as another nearby owner would always have the opportunity to move to the market ahead of the land banking firm.

The benefits of liberalising the land market and planning system were recently acknowledged by Dr Arthur Grimes, Chair of the Board of the Reserve Bank of New Zealand, who noted:

…that it is important to ensure that developers are competing with each other for the right to develop, so as to ensure that the land is offered at the most affordable price. Where competition amongst developers is limited by land availability constraints, the resulting prices will incorporate monopolistic rents (leading to high land and house prices).

In a similar vein, the New Zealand Productivity Commission Report on Housing Affordability, released last week, noted the importance of competition in reducing land banking and rent seeking by property developers:

The long delays associated with bringing both brownfield and greenfield land to the market suggest that a fifteen or even twenty-year pipeline written into plans is likely to be inadequate in practice, particularly if subject to short-term constraints through plan-based staging of land release. When supply is over-regulated in this way land banking becomes a rational commercial response, further undermining the calculation of future capacity and promoting high land and housing prices.

Sufficient competition in the supply of land for development will assist in placing downward pressure on land prices. Therefore, developers are competing with each other with respect to the sale of construction ready sections, thereby helping ensure that land is offered at affordable prices. Where competition amongst developers is limited by land availability constraints, this can lead to high land and house prices.

The effect of adopting these policies will be to substantially reduce the opportunity for speculative investments by individual land owners and developers.

Finally, Professor Alan Evans, Director of the Centre for Spatial and Real Estate Economics at the University of Reading (United Kingdom), has written two fabulous books on the economics of planning and the supply of land (here and here). Below are some quotes on the motivations behind land banking and the importance of facilitating competition between developers and land owners:

When planners provide “X years supply” of land within growth boundaries, they completely fail to realise that a high proportion of existing owners of property within those boundaries simply will not want to sell within “X years”. Older farmers, for example, and others “attached” to their properties, who do not want the upheaval of re-establishing themselves at a different location. Importantly, there will also be property owners who see the chance of higher prices the longer they hold their properties…

However, if there is no growth boundary or greenbelt, and there is ample land zoned for development, there should be no shortage of property owners further afield who will sell at prices similar to agricultural land prices.

Evans further points out that if there are delays in obtaining development permissions, etc, (in addition to the presence of a boundary) the amount of land each developer needs to purchase and hold to stay in business is increased (so that they will not end up with no work in between completing one development and actually beginning the next). This places additional pressures on the “available land supply”:

…as well as causing delay and increasing uncertainty, the process of seeking planning permission lends itself to strategic thinking and behaviour… the lack of certainty created by [such] a system is that it encourages the possession by large developers such as volume house builders of land banks… which can be developed at some future time. A developer such as a volume house builder will seek to ensure continuity in the supply of sites for development so as to ensure that management, equipment and labour can be used efficiently… without being laid off or idle. Commentary on the financial pages of newspapers would suggest that a land bank of at least 3 years supply seems to be regarded as necessary for the financial health of a house builder… not having a site available for development at the right time can mean that a exorbitant price will have to be paid to buy one, in order to keep the firm in business…

It can also be seen that the system will tend to favour the large development and the large developer over the small… The result…is that small firms are the ones likely to be forced into making suicidal bids to try and obtain land for development…

In favouring the large over the small, the system will also have aesthetic consequences……it is easier for everybody if a housing development is large, and with relatively few differences between the planned houses…

…It is likely, particularly in areas of planning constraint where planning permission is itself worth a considerable sum, that the planning side will contribute far more to the profits of the business than the construction side… some firms in the UK have concentrated solely on this side of the business, selling the land once permission has been obtained…

In a nutshell, land banking and rent seeking are symptoms of regulatory (or other) restrictions on land supply, cumbersome planning approval processes, and inadequate provision of housing-related infrastructure. Therefore, the first best policy response would be to address these issues directly.

Of course, a broad-based land value tax wouldn’t go astray either…

unconventionaleconomist@hotmail.com

Australia is not growing at trend

 

From MacroBusiness.Com.au

Posted by  in Australian Economy on 22 Dec 2011

The majority of reporting by the Australian financial media and associated economist punditry, focuses almost solely on a quarterly snapshot of growth in Gross Domestic Product (GDP). This is usually done in scattergun fashion, alongside a raucous display of big numbers on capital expenditure or other cherry picked data, then annualised into the beyond.

What is missing of course is how the growth in the economy effects each Australian, best measured by the change in real (adjusted for inflation) GDP per capita. As we’ll see soon, this strips away the inflated effects of population growth, stimulus packages and other economic chicanery.

As seen in the US Chart below from Doug Short’s blog, the US economic “recovery” as measured by US GDP per capita is still 3% below Q4 2007 levels, falling from $50,020 to $48,520 in real terms:


As I said in my Chart of the Day post recently:

… US GDP (growth) is only being held up at ca. 2% p.a because of massive (10% of GDP) government deficit spending. That spending will be cut in FY2012/13 automatically, and may even be slashed further on the outside chance a Republican candidate wins the election against incumbent Barack Obama.

You may recall that the US government and US Federal Reserve have spent (and created) a little bit of money between these two periods, whilst cutting the cost of borrowing an unlimited amount of money for the banks to zero, forestalling what could have been a Depression.

This puts their “recovery” in a better light, as unemployment (as measured more broadly by the U6 measure) remains at 16% having been 8% previously:

For the Australian economy, I’ve created 4 charts, using the ABS National Accounts data to provide a comparison.

First, here is the whole data series of real GDP per capita, from September 1973 to September 2011, showing the inexorable growth of the Australian economy:


The trend rate over the entire period was 2.42% per annum.

Second, I’ve zoomed in on the last 2 recessions, to provide some context of where we are today. Real GDP per capita contracted over 6% peak to trough 1981-1983 and just over 3% in 1989-1993:

The third chart plots the last 10 years where the trend growth was 1.5% per annum:


The fourth and final chart highlights the GFC up to the current period, but before having a close look, let’s go over what occurred following March 2008, where GDP per capita peaked at $58744 (or $14686 per quarter). The Australian economy had the following stimuli in the wake of the GFC:

  • 1.2 million or 5.7% increase in population
  • $270 billion increase in housing debt
  • $42 billion in government stimulus
  • 300 basis point (3%) reduction in cash rate (total 400 points peak to trough)

The outcome? A 0.53% increase in GDP per capita, to $59,060 (or $14,765 per quarter) over 3.5 years.

Half a percent…over 14 quarters. Annualise that and its barely statistically perceptible. Measured against the trend rate over the last 10 years of 1.5% growth per annum, and its nowhere near trend.


However, as you can see from the chart, if we measure from trough to peak, the result is more obvious – a 2.2% increase from the June 2009 quarter to September 2011 quarter, but the outcome is the same. An annualised trend rate of growth of 0.98%, substantially less than the long term rate of 1.5% over the last ten years, or the 2.4% rate over the whole data series.

With a government forced to return to surplus to maintain its AAA rating and thus reduce stimulus spending, credit growth running at 30 year lows and decelerating, a slowdown and likely reversal in Terms of Trade from record high commodity prices and in the absence of further Chinese stimulus (which arguably did more than all the endogenous stimuli outlined above), its hard to see how GDP growth can return to the mean trend of pre-GFC years.

US tags (Manila’s) Quiapo as one of the world’s notorious markets (for pirated goods)

From BusinessWorld

21 December 2011

WASHINGTON considers the PhilippinesQuiapo shopping district as one of the world’s notorious markets for pirated goods, the Office of the United States Trade Representative (USTR) said in a report released on Monday.

The US government identified 30 physical and online markets worldwide known to deal in goods and services that infringe on intellectual property rights (IPR).

Piracy and counterfeiting continue to present a serious challenge to the innovation and creativity that is essential to supporting American jobs and creating economic growth around the world,” US Trade Representative Ron Kirk said in a statement.

“We hope that this review will continue to yield the kind of concrete action from highlighted markets that led to the removal of several markets from the list this year,” he added.

The current roster was culled from public submissions by interested American and non-American stakeholders between Sept. 22 and Oct. 26.

The 30 markets identified — the list includes shopping malls, public markets, and entire city blocks from Ecuador, China, India, Indonesia, Paraguay, Ukraine, Thailand, Mexico, and Colombia — do not constitute an exhaustive list, the report noted.

Quiapo, the US said, “is just one example of several locations and neighborhoods, especially in metropolitan Manila, known to deal in counterfeit and pirated goods such as clothing, shoes, watches, handbags, and software.”

A February 2011 review also identified the same district. Last year’s Annual Special 301 Report included Greenhills, Binondo, Makati Cinema Square, and the 168 Mall in Divisoria as among the Philippines’ notorious markets. — E. J. Diaz

Article location : http://www.bworldonline.com/content.php?Section=TopStory&title=US tags Quiapo as one of the world’s notorious markets&id=43740

Rules on visas for (Philippine) foreign investors eased

From BusinessWorld

December 21, 2011

THE BUREAU of Immigration (BI) has revised the implementing rules on the issuance of special visas for non-immigrant foreign investors in the country, providing for stricter conditions in application but making the process easier.

Through a memorandum circular approved by Commissioner Ricardo A. David, Jr. on Dec. 14 and published in a newspaper yesterday, the bureau issued the “Revised Implementing Rules and Regulations for Special Visa for Employment Generation (SVEG).”

The new set of rules — which repeals the 2009-issued implementing rules and regulations for Executive Order (EO) 758, or the guidelines for the issuance of special visa to non-immigrants for employment generation — makes the application for SVEG easier for foreigners looking to build or maintain businesses in the Philippines.

“It [SVEG application] is now investor-friendly,” Cris M. Villalobos, chief of the SVEG One Stop Shop Center, said in a telephone interview yesterday.

SVEG, defined by EO 758, “is a special visa issued to a qualified non-immigrant foreigner who shall actually employ at least 10 Filipinos in a lawful and sustainable enterprise, trade or industry.”

Mr. Villalobos said the new rules provide for a shorter application period for SVEG.

“Before, if you wanted to apply for an SVEG, you had to go through a one-year probationary period. On or before the probationary period expired, the holder had to request again [for the issuance of SVEG],” he said.

“With the new rules [and] one-time application, the foreigner can already enjoy an indefinite stay [in the country].”

The bureau official, however, said that the new rules have stricter requirements.

Aside from the regular clearances from the National Intelligence Coordination Agency, the bureau will also be requiring the applicant to submit a police clearance from the applicant’s country of residence, a medical certificate and a clearance from the National Bureau of Investigation.

The BI will also require the applicant to submit details on the Filipinos he/she intends to employ.

“We will now require them to submit… an individual notarized contract of employment of the Filipino employees,” Mr. Villalobos said, adding that they will also be asking applicants for the nature of work to be done by the Filipino employees as well as their Social Security System and PhilHealth membership cards.

He explained that the revision of the rules was done to make the implementation of EO 758 more effective.

“SVEG monitoring in terms of the employment of Filipinos was stepped up,” he said.

“Hopefully by next year, the bureau will be ready to accept applications for SVEG,” Mr. Villalobos said, adding that they are already working on fixing the payment collection system, disseminating the information to the different agencies and chambers of commerce in the country.

He said they are also in the process of distributing the checklist of requirements to the different ports and satellite offices of the bureau where they will accept applications for SVEG.

Article location : http://www.bworldonline.com/content.php?Section=Economy&title=Rules on visas for foreign investors eased&id=43737

(Philippine) occupancies, rent seen to rise in 2012

From BusinessWorld

December 21, 2011

PROPERTY DEVELOPERS, along with real estate investors, can expect to enjoy continued robustness in the market next year with economic activity seen to generally drive up rental rates, occupancies and asset values in Metro Manila business districts.

Consultancy Colliers International Philippines, in its third- quarter market report, particularly pointed to the usual factors — consumer spending, business process outsourcing (BPO) industry growth, and a shortage in mass housing — as driving up prices of residential, office and retail sites in the next 12 months.

Rental rates of luxury residential condominium units in key areas, for instance, are seen to rise next year.

Three-bedroom units under this housing type in the Makati central business district (CBD) will likely be leased out for 2.2% more in the third quarter of 2012 versus the same quarter this year when leases averaged at P178,000 per month for a 290-square-meter (sq m) property.

Those in Rockwell and Bonifacio Global City will meanwhile see a 4.9% and 5.8% respective hike in rental rates, Colliers said.

This, even as the vacancy rate for luxury condominium units along with other grades are seen to increase to as high as 12.4% in the Makati CBD by the third quarter next year versus the 10.4% vacancy seen in the same period this year.

Capital values for luxury three-bedroom, high-rise units will meanwhile rise by 1.5%-5.2% in 12 months depending on whether they are located in the Makati CBD — the area said to see the highest hike — Rockwell, or Bonifacio Global City.

Office spaces

The office sector will enjoy a similar robustness, Colliers added.

“The outlook is that premium rental rates will increase at 3.6% to P920 per sq m over the next 12 months [from levels recorded in the third quarter this year] and are projected to breach the 2008 level of more than P1,000 per sq m in the course of two to three years,” Colliers said, further noting that Grade A and B rental rates will meanwhile peak by 11% by the third quarter of 2012.

Take-up for the office segment is also reported to be brisk as the office vacancy rate for all grades are seen to dip to 3.34% in 12 months after already falling to 3.84% in the third quarter from the 4.15% recorded for April to June.

Retail sites

The retail sector will see higher take-up as well, Colliers said.

“Vacancy rates, in both super-regional and regional malls across Metro Manila, decreased by 0.25% this quarter with occupancy level remaining high at 99%,” it said.

Consumer spending, which improved by 9.9% during the first half of this year, may continually drive mall occupancies to a long-term high,” it said.

As such, rental rates in Ayala Center malls could rise by 1.6% in 12 months while those in Ortigas are seen to hike leases by 1.9%.

“Despite global uncertainties, the economy is still expected to be resilient,” it said. — FJGDLF

Article location : http://www.bworldonline.com/content.php?Section=22&title=Occupancies, rent seen to rise in 2012&id=43687

Philippines slips in 2011 global democracy index rankings

 

From BusinessWorld

December 21, 2011

THE PHILIPPINES has slightly slipped in ranking in the 2011 global democracy index by the Economist Intelligence Unit (EIU), even as it retained its score in terms of the level of democracy the country enjoys.

Entitled “Democracy Under Stress,” the EIU’s Democracy Index 2011 report — which covered 165 independent states and two territories — shows that the country fell to 75th place, one notch down from its ranking last year, though it maintained its democracy index score of 6.12.

The EIU’s media bureau in Asia said such change in ranking unaccompanied by a change in score is simply due to the index’s relativity. “The ranking reflects relative position — the placing of any one country is affected by the assessment of all the others, not just itself,” the bureau stated in an e-mail yesterday.

The 10 countries that topped the ranking are still Norway (overall score 9.8), Iceland (9.65), Denmark (9.52), Sweden (9.50), New Zealand (9.26), Australia (9.22), Finland (9.19), Switzerland (9.09), Canada (9.08) and the Netherlands (8.99).

The countries at the bottom of the list, on the other hand, are Guinea-Bissau and Syria (1.99 each); Iran (1.98); Central African Republic (1.82); Saudi Arabia, Equatorial Guinea, Myanmar (1.77 each); Uzbekistan (1.74); Turkmenistan (1.72); Chad (1.62); and North Korea (1.08).

The democracy index was based on public opinion surveys as well as experts’ ratings for 60 indicators classified under five categories, namely, electoral process and pluralism; civil liberties; government functioning; political participation; and political culture.

Countries that scored 8-10 were classified under full democracy, while countries rated six to 7.9 were tagged as flawed democracies. Countries with hybrid regimes have scores of four to 5.9, while authoritarian regimes have scores below four.

The Philippines falls under the flawed democracy category, in which 53 other countries, or the majority, are classified. —AEB

Article location : http://www.bworldonline.com/content.php?Section=Nation&title=Philippines slips in 2011 global democracy index rankings&id=43721

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