German-PH Chamber Reports Promising Economic Growth During 2022
by Marcelle P. Villegas - November 10, 2022
“Although there is a seen decrease in the bilateral trade between Germany and the Philippines when comparing the first half of 2022 and 2021 data, it remains to be a major contributor to the latter's trade relations with the EU.” (from GPCCI Market Watch)
A quick look at the future:
- The Philippines is expected to join the free trade agreement -- Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This would benefit the Philippine metals industry.
- The German Supply Chain Due Diligence Act will have a significant impact on business practices across the Asia-Pacific (including the Philippines, which lists Germany as its 10th largest export trading partner).
Looking at the numbers, the economic outlook of 2022 looks bright. According to a report presented by German-Philippine Chamber of Commerce and Industry (GPCCI), the Philippine gross domestic products (GDP) showed favourable development and promising growth during the first half of 2022. From their report on "GPCCI Market Watch: Philippines Shows Promise in the 1st Half of 2022", the Philippine GDP grew more than expected due to high public spending, relaxed COVID-19 mobility restrictions, and a rebound in investments and household consumption. Due to these factors, the Asian Development Bank (ADB) raised its growth outlook for 2022 from 6.0% to 6.5%, halfway through the year. 
During the second quarter, the GDP growth decreased to 7.4% due to global headwinds like geopolitical tensions and inflation. This is lower than 8.3% growth during the first quarter. Banko Sentral ng Pilipinas (BSP) also forecasted that inflation rate of 5.4% and raised key interest rates to 4.0% from an initial 2.0%. Afterwards, the Development Budget Coordination Committee (DBCC) revised their full-year 2022 growth forecast to 6.5% to 7.5%.
“Despite the slowdown of the second quarter growth, it is notable that the Philippines still had the 2nd highest GDP growth recorded for the second quarter in the ASEAN region. For the first half of 2022 overall, the Philippines’ GDP grew by 7.8% - the highest among the five biggest economies in ASEAN. The Philippine Central Bank stated that domestic economic activity is seen to be restored to its pre-pandemic level in the second half of 2022,” according to GPCCI.
Several changes in 2022 took place which gradually contributed to mobility in most sectors. “As the country continues its efforts in the transition to the new normal, the Department of Education implemented mandatory face-to-face classes for the school year of 2022-2023. Aside from this, the mandatory wearing of face masks outdoors was also lifted. It was imposed for more than two years to contain the spread of the coronavirus in the country.”
“According to experts, the outlook of the country’s economy remains positive. The materialization of the initiated economic reforms and the continuation of key programs such as the infrastructure expansion by the new administration shall support the robust economic development for the 2nd half of the year and beyond.”
Looking at the Philippine international trade activities for the first half of 2022, both exports and imports increased year-on-year with a growth rate of 7.09% and 26.69% respectively. “Imports grew much faster than exports by a significant margin with the Philippine trade deficit increasing by USD 11.84 billion as a result of this.” 
The Philippine Statistics Authority reported that June 2022 marked the 17th straight month of import growth.
The export and import activities in 2022 include significant movement in the minerals industry. “Philippine exports are mainly composed of electronic products accounting for 55% of the total exports or USD 21.16 billion for the first half of the year. Other commodity groups that widely contribute to the exports of the country are (1) other manufacturers with 7%, (2) cathodes and sections of cathodes, refined copper with 3%, (3) coconut oil with 3% as well.”
On the list of imported individual commodities, Electronic Products were also on the top of the list, comprising 24% of all imports or USD 16.3 billion in total. Minerals, Fuels, Lubricants and related materials, Transport Equipment, Iron and Steel had shares of 17%, 8%, and 5% respectively, according to the Philippine Statistics Authority.
For both exportation and importation, the top 10 trading partners of the Philippines include the neighboring countries of the Philippines in Asia. “In terms of its export partners, the United States and European Union (EU) countries such as German and the Netherlands have been its non-Asia partners that belong to the top rank. While for its import partners, the United States is the only non-Asia country that belongs to the list.”
More on the non-Asia trade partners of the Philippines, for the first half of 2022, the United States of America ranks as No. 1 in the list of international trade partners for Exports, with USD 5.94 billion. Netherlands is on rank No. 7 with USD 1.45 billion, while Germany is on rank No. 10 with USD 1.31 billion. For Imports, United States of America is on rank No. 5, with USD 4.40 billion.
“Although there is a seen decrease in the bilateral trade between Germany and the Philippines when comparing the first half of 2022 and 2021 data, it remains to be a major contributor to the latter's trade relations with the EU. Exports of the Philippines to Germany, decreased by 8.46% as the previous USD 1.42 billion in 2021 went down to USD 1.30 billion in 2022. Similarly, imports declined by 9.15%, when the USD 1.06 billion in 2021 was cut to USD 960 million in 2022.” 
On a final note, what are we to expect in the future in terms of economic growth? GPCCI Market Watch listed down some trends and factors that can affect economic growth in the future. Here are the trends to look out for:
1) Global Inflation: The International Monetary Fund (IMF) recently gave out unfavorable projections for the global economy in its recent report with inflation in advanced and developing economies projected to reach 6.6% and 9.5% respectively. As seen in the Philippines, the country experienced a 6.4% inflation rate in July of this year (the highest recorded inflation rate in 4 years) due to a rise in commodity prices. Experts also believe this rise in inflation will peak in the 4th quarter of 2022. Consequently, analysts say this bleak outlook on inflation for the rest of the year may lead to the Philippine Central Bank raising the key interest rate to 4.25% by the end of 2022.
2) CPTPP: The Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP is a free trade agreement currently comprised of 11 countries, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The Philippines, along with Thailand and South Korea, is expected to join the agreement within the next few years with Chile supporting their potential accession. By joining this free trade agreement, various sectors in the country such as electronic equipment, apparel, machinery, and metals would benefit.
3) Supply Chain Due Diligence Act: By the start of 2023, the German Supply Chain Due Diligence Act will come into force. Initially approved in 2021, the act aims to ensure that German businesses with more than 3000 employees will have no links in their supply chains that violate human rights or environmental laws. And by 2024, the size requirement will drop to 1000 employees. Hence, companies that wish to enter the German market or work with large German companies will need to have humane and stable business practices. Experts say this new legislation will have a significant impact on business practices across the Asia Pacific; including the Philippines, which lists Germany as its 10th largest export trading partner. Also, the EU is currently in the process of creating the EU Due Diligence Act, which aims to apply similar supply chain standards for companies across all EU member states and beyond. 
 Ramos, Nicole (4 October 2022). GPCCI Market Watch: Philippines Shows Promise in 1st Half of 2022.
Thank you to Ms Nicole Ramos, Senior Consultant at German-Philippine Chamber of Commerce and Industry.
German-Philippine Chamber of Commerce and Industry (GPCCI)
8F Doehle Haus Manila 30-38 Sen. Gil Puyat Avenue, Brgy. San Isidro, Makati City Philippines, 1234
Telephone: +63 (2) 8519 8110 / Telefax: +63 (2) 5310 3656
Top photo: geralt / 25234 images - https://pixabay.com/illustrations/businessman-charts-trend-tablet-5669431/
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Marcelle P. Villegas - September 01, 2021
The 7th PH-EITI report, industry outlook transparency for oil, gas and mineral resources (Part 1)
The PH-EITI National Conference 2021 was held last July 29 with the theme "Resiliency in Transparency". PH-EITI or Philippine Extractive Industries Transparency Initiative, is a government-led, multi-stakeholder initiative that implements EITI. The initiative started on 26 November 2013 under Executive Order No. 147, series of 2013. It is a government commitment first announced through EO No. 79, s. of 2012. The initiative aims to promote the open, accountable management and good governance of oil, gas and mineral resources industries. The three-hour webinar/conference featured various keynote speakers. “This is the second year that we are holding this meeting online due to the pandemic. This underscores the exceptional circumstance under which we have to operate into the foreseeable future. Nevertheless, I congratulate the EITI for its efforts to organize this national conference and produce an annual report despite all the challenges.” This was part of the Opening Remarks given by Hon. Carlos G. Dominguez, Secretary of Department of Finance.
Philippine Resources - November 27, 2022
Vice President Harris Launches USTDA Critical Minerals Processing Project in the Philippines
Photo credit: The US Trade and Development Agency During her recent travel to Manila, U.S. Vice President Kamala Harris launched a U.S. Trade and Development Agency grant to Eramen Minerals, Inc. (EMI), a Filipino mining company, for a feasibility study to advance the development of an environmentally sustainable nickel processing facility in the Philippines. This project will advance the clean energy transition by producing critical minerals that are key elements in the supply chain for batteries and energy storage systems. “This partnership is important to the shared clean energy and national security goals of the Philippines and the United States,” said Enoh T. Ebong, USTDA’s Director. “Through this grant, we are supporting high-quality technical and environmental standards for mineral processing in the Philippines, while also creating valuable commercial opportunities for U.S. companies.” USTDA’s study will evaluate the technical and economic viability of developing a nickel processing facility at the site of EMI’s mine in Zambales Province. The plant is expected to use EMI’s nickel ore to produce refined nickel and cobalt products for sale as battery precursor materials. The study will help define the technical specifications for the facility and promote alignment with high environmental, social, and governance standards. “EMI seeks to contribute to the green energy transition and energy security through the supply of critical materials from our nickel mining operations for energy storage systems. The company likewise supports the encouragement of the Philippine government for mineral value-adding. The USTDA grant contributes to the accomplishment of such objectives through the determination of the optimal process for our ore to produce battery-grade precursor materials,” said Enrique C. Fernandez, EMI President/CEO. This project advances the goals of the Biden-Harris Administration’s Partnership for Global Infrastructure and Investment and the Indo-Pacific Economic Framework, through the development of clean energy supply chains including the responsible mining of metals and critical minerals. Article courtesy of The US Trade and Development Agency
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Philippine Resources - May 23, 2023
MEMORANDUM OF AGREEMENT SIGNED WITH TVI RESOURCE DEVELOPMENT (PHILS.) INC.
Photo credit: TVI Resource Development The Board of RTG Mining Inc. is pleased to announce that a comprehensive settlement of all outstanding issues with the Villar Family controlled Sage Capital and TVI Resource Development (Phils.) Inc. (“TVIRD”) has been reached and a binding Memorandum of Agreement signed. On execution of the final documents, expected in the next month, all litigation that RTG had launched will be withdrawn as part of an agreed restructuring of the Mabilo Project. The Villar Family is one of the most prominent families in the Philippines and RTG is pleased to partner with them in the development of the Mabilo Project, which is a significant mining project for the country. The key terms of the agreement for RTG include the following: RTG (through SRM Gold Limited) will retain a 40% interest in Mt. Labo Exploration and Development Corporation (“Mt. Labo”) with the project also developed by Mt. Labo, in line with Philippine regulatory requirements, with Sage Capital (which is owned by TVIRD) holding the remaining 60%; RTG will have a 2% net smelter royalty (“NSR”); RTG’s debt together with interest, currently in the order of US$27M (subject to audit) will be repaid out of the proceeds of Stage 1 of the project, the Direct Shipping Operation subject to customary requirements to address liquidity and ongoing operations of Mt. Labo; Funding arrangements for the project as between the major shareholders of Mt. Labo have been successfully renegotiated, (relieving RTG of a sole funding obligation) and replaced with a pro-rata funding obligation, together with a disproportionate funding obligation of Sage Capital, as set out below; With debt repayments in full and the NSR, RTG will be entitled to approximately 57% of the proceeds of Stage 1, the Direct Shipping Operation; RTG will be entitled to 40% of the operating cashflow of the project, together with the 2% NSR and repayment of its debt, which is currently in the order of US$27M; The first US$5M of expenditure for Mt. Labo (or 12 months of expenditure, whichever occurs the earlier), will be funded pro-rata between the two shareholders (ie RTG will provide 40%) and thereafter, Sage Capital/TVIRD will sole fund the next US$5M of expenditure, with all additional funding thereafter to be provided on a pro-rata basis; All parties are required to act in the best interests of the project and not compete; A shareholders’ agreement will be finalised which will provide typical minority interest protection clauses including reserve matters for voting including annual budgets and appointments of key personnel; Any disputes will be resolved by the Singapore International Arbitration Centre; and On completion of final signed documents, all litigation matters will be withdrawn and settled in full. With the restructuring of the Mabilo Project now agreed, over the balance of this year, the remaining permitting matters and financing plans will be finalised, a review of the 2016 Feasibility Study will be completed, together with finalising the acquisition of surface rights, following which, a commitment to development will be formalised by the Board of Mt. Labo. RTG is pleased with the outcome of the discussions and the co-operative and constructive approach adopted by the Villar Family representatives. RTG believes they can be a strong and positive partner to work with to take the Mabilo Project forward, with both a near term development and future exploration activities to expand the project, which will start to unlock the value of the project for all stakeholders, not only the local communities but for the country as a whole.
Philippine Resources - May 22, 2023
Mining Operational Excellence Through Digital Transformation
Part 1: Mining Operation Challenges and Mine Operations Management Domains 1 & 2. By Mae Ann Cabasag, EM Mining companies encounter numerous challenges throughout their operations. However, initiatives to mitigate these challenges and improve efficiency are often limited. Most of these limitations emanated from a common factor: the challenge of “poor visibility” in mining operations. A viable solution is to adopt digital transformation in mining operations by incorporating available real-time data into an integrated system— capable of ensuring automatic updates and reliable source of information. Through this, mining companies not only understand simulations and plans developed but also anticipate potential outcomes. Various mining industry analysts have found that using non-digital methods in the mining operations can lead to a 27% reduction in production time and 25% increase in data inaccuracy. For a mining company to remain competitive in an industry susceptible to operation challenges, i.e. production processes, workers’ and equipment performances, ore quality and quantity, compliance to regulations, and inter-departmental collaboration, it needs to embrace digital transformation. Dassault Systèmes Mine Operations Management provides transformative digital solution for mining companies to achieve excellence in their operations. Mine Operations Management (MOM) equips mining companies with an integrated system for their mining operations, enabling them to achieve efficient plan and schedule. This system integrates entire operation data into a single repository source of information, known as the “single source of truth”, ensuring complete transparency of the company’s processes from mine to port. By leveraging MOM, we can address the following global mining industry challenges: Maintaining competitiveness amidst market volatility. Eliminating waste materials, poor communication, and error duplication. Improving site productivity and efficiency. Utilizing assets and sharing best practices across the value chain. Ensuring an utmost level of safety. Reducing environmental impacts and achieving sustainable operations. The transformative digital solution, Mine Operations Management, is composed of eight work packages, split across four domains, namely: Data Management, Material Reconciliation, Operational Control, and Assets Performance. These domains help generate valuable insights from integrated operational data for rapid and informed strategic decision-making. The Data Management consists of Master Data Model and Integration Framework packages essential for material tracking, stockpile management, task and workforce management, machine performance, and asset maintenance. It enables users to manage master data objects such as Site, Material, Location, Equipment, and Operator through manual data entry or third-party source systems. With this, mining companies can ensure efficient and integrated management of critical data required for seamless operations. Material Reconciliation, on the other hand, consists of Material Tracking and Stockpile Management packages. Material Tracking enables us to track material movements across different stages, i.e. from the least accurate grade estimated in geological model to the most precise information on shipped material quantity and quality, to account for any inaccuracies. While in the Stockpile Management, users not only can calculate daily stockpile balance, add Survey or Sampling data, analyze inventory levels and trends, create graphical representation of the stockpile balances and movements, calibrate stockpile using volumetric survey and sampling, enables comparison of different models, track movement genealogy and review stockpile slices for stockpiles with LIFO and FIFO calculation type but can create a different type of analysis such as actual vs plan vs model. In the upcoming article, we will explore the two remaining domains of Mine Operations Management to where assigning operational tasks, tracking compliance to plan, monitoring equipment down to workers’ performance are feasible in the mining operations. To know more about MOM, mining innovations and solutions, contact Dassault Systèmes Value Solutions Partner: Paramina Earth Technologies Inc. through email@example.com References: Make it happen for mine execution excellence: Dassault Systèmes®. MEGATrends. (n.d.). https://events.3ds.com/make-it-happen-for-mine-execution-excellence Dassault Systèmes. (2021, August 12). Digging deeper: The virtual solution for Mining Operational Excellence. Dassault Systèmes. https://discover.3ds.com/virtual-mining-operational excellence dassault3ds. (2022, June 16). The mining industry needs to adapt, but how? Dassault Systèmes blog. https://blog.3ds.com/brands/delmia/the-mining-industry-needs-to-adapt-but-how/
Philippine Resources - May 22, 2023
Customer’s First Choice: Sandvik Philippines Delivers 11th and 12th Pantera DP1500i Drills to Filminera Resources Corporation
Sandvik Philippines has successfully commissioned and delivered to loyal customer Filminera Resources Corporation (“Filminera”) their 11th and 12th Pantera DP1500i Top-hammer Surface Drills last 25 January 2023 at the Masbate Gold Project (MGP) located in Masbate Island, Philippines. Photo shows Sandvik Technician Larry Lugnas (second from left) and Service Operations Manager Jorge Cabello (third from left) handing over the drills to MGP representatives. Located 360 km southeast of Manila, the Masbate Mine is operated by Filminera, the Philippine subsidiary of TSX- and NYSE-listed B2Gold with headquarters in Vancouver. In 2022, the mine produced a record-setting 212,728 oz of gold out of 7.93M tonnes of ore milled at an average grade of 1.11 g/t. B2Gold also operates the Fekola Mine in Mali and the Otjikoto Mine in Namibia. Their projects under development include the Anaconda Area in Mali and the Gramalote JV Project in Colombia. The Masbate Mine started operating in 2008 initially using 4 x Atlas Copco ECM660 Drills owned and operated by the erstwhile mining contractor, Leighton. When the opportunity for re-fleeting came about in 2012, Sandvik succeeded in winning the tender which came packaged with a full maintenance contract for 24,000 service meter hours of five years. Ironically, the said maintenance contract almost led to the cancellation of the order for the first 4 x DP1500i due to a dispute with the rates. Eventually, both Leighton and Sandvik were able to arrive at a mutually acceptable arrangement, and Sandvik ran the service contract for five years without incurring penalties in the availability guarantees. The contract was so profitable, Sandvik even had to share some of the residual profit at the end with Filminera under the pain-and-gain proviso of the contract. The next re-fleeting opportunity came in 2017, with the Masbate Mine. This time, there was no service contract attached to the equipment and Leighton was no longer the mining contractor; the mine has shifted to owner-miner operation. Sandvik managed to secure the repeat order for another batch of 4x DP1500i, banking on the proven performance and reliability of the first four. That brings the total to 8 units. Drill numbers 9 and 10 were ordered in July 2020 and delivered in 2021. Numbers 11 and 12 in the photo above were ordered in January 2022 and are now handed over to the customer. Filminera ordered two more DP1500i’s in November 2022; these machines are now awaiting completion in Tampere, for delivery later this year. That should bring the total to 14 x DP1500i units spread over 11 years for our most loyal Pantera DP1500i customer in the Philippines – Filminera Resources Corporation!
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