GR Business Online delivers critical economic intelligence, business news and analysis from the Pacific Rim and around the world.

Friday, August 12, 2011

Another Fernandes Coup: AirAsia to Gain Large Share of Malaysia Airlines

In a deal that has been fodder for industry rumor mills for weeks, Malaysian-based budget carrier AirAsia will take effective control of financially-troubled flag carrier Malaysia Airlines, the two companies announced in separate statements on Tuesday. The deal will see AirAsia’s parent company Tune Air swap a 10% stake with Malaysia's state investment arm Khazanah Nasional for a 20.5% share of Malaysia Airlines, with MAS Managing Director Azmil Zahruddin Raja Abdul Aziz resigning to make way for a four-person management committee headed by AirAsia boss Tony Fernandes.

Wednesday, July 27, 2011

The Second SONA of Noynoy Aquino: Highlights from the Technical Report

(Manila) -- The talk of the Philippines this week has been the annual State of the Nation Address (SONA) delivered by President Noynoy Aquino on Monday, his second such speech since taking office in June of last year. In his first, delivered barely a month after taking office, Aquino made an amusing gaffe by offering the “shocking revelation” that only 10% of the nation’s annual budget remained at the halfway point of the year – an elementary misunderstanding of government financing that his spokespeople later had to retract. Perhaps remembering that unnecessary embarrassment, the Office of the President this time published a 23,000-word Technical Report as a backgrounder to the nearly hour-long speech.

The fact that the Technical Report was provided to the public was a nice addition to this year’s speech, but for outside observers and potential investors, disappointingly provides little more in the way of clues to the Administration’s goals than did the nearly hour-long address, which was delivered in the Southern Luzon dialect Tagalog. The Technical Report does, however, provide significantly more detailed information about the Administration’s activities over the past year – albeit with the same unsurprisingly positive spin evident in the address itself – and from this, observers may divine something of the intentions and character of the Aquino presidency over the near term.

Thursday, July 14, 2011

Vietnam FDI Tumbles in First Half of 2011

(Hanoi) -- FDI figures released by Viet Nam’s Ministry of Planning and Investment for the first half of 2011 present a surprisingly bad picture of one of Southeast Asia’s powerhouse economies, Vietnam Business News reported this week. Registered FDI inflows topped out at $5.6 billion for the first six months of the year, a decline of just over 48% from the same period in 2011.

Government investment managers blamed the persistent global economic crunch for the slowdown, but other analysts point to signs that indicate the Vietnamese investment environment is not living up to its hype.

Wednesday, July 13, 2011

Philippines Government Opposes Tax Break for Hybrid Vehicle Builders

Gregory L. Domingo, the Secretary of the Philippines Department of Trade and Industry and chair of that country’s Board of Investments, has thumbed down a Senate proposal to exempt assemblers of hybrid vehicles from the 12% value-added tax (VAT) levied against parts and components, saying that VAT enforcement is necessary to “level the playing field” and would disrupt one of the few relatively well-functioning tax systems in the Philippines.Senator Ralph Recto, formerly head of the Philippines’ National Economic Development Authority, had proposed a nine-year exemption on VAT and excise tax duties for hybrid vehicle assemblers to spur investment in alternative-fuel vehicles. An alternative proposal backed by Domingo would reduce the normal 22% customs duties for capital equipment and parts to 1% and 0% respectively, while leaving the 12% VAT in place.

Wednesday, June 29, 2011

Aquino Officially Reneges on Pledge to Build Philippine Infrastructure

(Manila) – In an interview with the Associated Press on June 17 , President Benigno S. Aquino reiterated his decision to dump $2 billion worth of critical infrastructure projects contracted during the term of his predecessor, despite having made an initiative to develop infrastructure through “Public-Private Partnerships” (PPP) the centerpiece of his Administration’s plan to attract FDI and bolster the economy of the impoverished Southeast Asian nation.

Friday, June 24, 2011

Pacquiao Sides with Leftists in Sparring Match over Philippine Wages

(Manila) – Veteran boxer and novice Congressman Manny Pacquiao has thrown his support behind a bill calling for an across-the-board P125 ($2.86) increase in the daily wage for Philippine workers, co-sponsoring the measure with the Anakpawis party-list in a filing last week. HB 375, which is also backed by the radical labor group Kilusang Mayo Uno (May First Movement), marks at least the third time since 1999 the Communist-backed workers’ organization has attempted to push the measure through the Philippine legislature; a previous bill passed in 2006, but was quickly vetoed by then-President Gloria Macapagal Arroyo. Arroyo’s successor, President Benigno S. Aquino III, has already indicated he would be likely to follow suit if a similar bill were to reach his desk.

Wednesday, June 22, 2011

Chatterboxes Beware: Taiwan Hotels Knocked for High Phone Rates

(Taipei) -- As reported by the China Post, Taiwan’s Consumers’ Foundation has issued a sharp public criticism of a number of hotels that serve as main accommodations for visitors to Taipei for charging in-room telephone rates more than six times higher than the rates charged by Chunghwa Telecom, the main telephone carrier in Taiwan.
Taiwan’s landmark Grand Hotel was singled out as the worst offender, charging NT$96 (about $3.30 USD) per minute for calls to mainland China, NT$104 per minute to Japan, and a whopping NT$120 per minute for calls to Macau. By contrast, Chunghwa’s overseas call rates are about NT$13 per minute ($0.45 USD), less than the price charged by most cell phone roaming plans.
In response to the TCF complaint, a Grand Hotel manager reportedly suggested that  “they had on-site public phone booths that were much cheaper than the room rates and that their guests could freely choose whether to make phone calls at the phone booths or in their rooms.”
While Taiwan doesn’t have quite the same dubious reputation for ripping off travelers as other Asian destinations like the Philippines, Thailand, or for that matter, mainland China, business and leisure visitors would do well to be on their guard. The comment from the unnamed Grand Hotel manager unfortunately sums up what seems to be a common Taiwanese point of view: added convenience or extra service is worth money, sometimes a lot. For example, a visit to the iconic Taipei 101 skyscraper will set you back $NT350…unless you want to ride all the way to the upper observation deck on the 91st floor, which is an extra $NT100. In similar fashion, “service charges” for credit card purchases or currency exchange are common practice as well.
But to be fair to the Taiwanese, they are at least consistent in posting signs and notices to inform visitors of charges. Now if only they could do the same for Taipei’s unattractive climate or the badly-piloted and distinctly pedestrian-unfriendly motorcycles and scooters crowding the city’s streets, the extra fees might not seem like much of a problem.