The report titled “Connecting to Compete 2016: Trade Logistics in the Global Economy” showed the Philippines’ ranking decline from 57th in 2014.

The Philippines’ Logistics Performance Index (LPI) score also dropped to 2.86 this year from a score of 3 two years ago.

According to the World Bank, the LPI was a “comprehensive measure of the efficiency of international supply chains” being published biennially since 2007.

Among the 160 countries covered by this year’s report, Germany had the highest LPI score of 4.23, while the lowest score of 1.6 was posted by Syria.

Compared with other lower middle-income countries, the Philippines’ rank was below those of India, Kenya, Egypt, Indonesia, Vietnam and Pakistan. In 2014, the Philippines had a better LPI score than Egypt, Kenya and Pakistan.

The LPI analyses countries using six “core pillars” of logistics performance, namely: the efficiency of customs and border management clearance; the quality of trade and transport infrastructure; the ease of arranging competitively priced shipments; the competence and quality of logistics services; the ability to track and trace consignments, and the frequency with which shipments reach consignees within scheduled or expected delivery times.

Across these six components, the Philippines ranked the lowest in infrastructure, at 82nd place, with a score of 2.55.

In customs, the Philippines was at 78th spot, with a score of 2.61; in logistics quality and competence, 77th with a score of 2.7; tracking and tracing, 73rd with a score of 2.86; timeliness, 70th with a score of 3.35, and international shipments, 60th with a score of 3.01.

Sought to comment about the report, NCC private sector co-chair Guillermo M. Luz attributed the decline in ranking to the congestion at the country’s ports which was experienced in 2014 due to the truck ban implemented in the city of Manila, home to the country’s major sea ports.

“In the past two years, what really hurt was when there was the truck ban that triggered off all the Manila port congestion. It took so long to fix the backlog, only by the decision of one local government unit, and that hurt. So in a way, we shouldn’t be surprised,” Luz told reporters.

The retail industry has had impressive growth, contributing jobs and revenue, and acting as a bridge between production and consumption, according to Nguyen Thi Thu Trang, director of the WTO and Integration Centre of the Vietnam Chamber of Commerce and Industry.

Trang spoke at a workshop on identifying risks of the retail industry held in HCM City yesterday.

Under the Trans-Pacific Partnership agreement and the EU-Vietnam Free Trade Agreement, tariffs and non-tariff barriers to goods will be removed, creating even more competition for local retailers as large foreign retailers continue to expand in the domestic market.

Vietnamese retailers’ weak points, including management ability, process control technology, and professional skills, have been exposed in recent years.

A significant number of local retailers have left the market, and many producers have had problems selling products to foreign supermarkets.

Dr. Dinh Thi My Loan, chairwoman of the Association of Vietnam Retailers, said that Vietnamese retailers must develop specific plans to improve competitiveness.

She called on the government to help local retailers access premises in good locations and provide updated information about sites include in zoning plans.

Under a new government decree, businesses investing in markets in rural areas, building supermarkets or trading centres, and offering logistics services, would enjoy incentives.

“The important thing is we want these incentives to quickly come into force,” she said.

Loan said the government had launched support packages for the real estate sector and programmes for industrial and agricultural extension, but there was no support package for the retail sector.

“We want the government to consider providing the retail sector with capital support,” she said, adding that assistance in improving the quality of their human resources would also be beneficial.

Huynh Van Minh, chairman of the HCM City Union of Business Associations, said the government should not only adjust policies to help local retailers and manufacturers but also restructure the country’s retail system.

Local retailers were also urged to work together to better compete with foreign counterparts.

Great potential

Vietnam is home to nearly 9,000 traditional markets, 830 supermarkets and 150 shopping centres, according to the Ministry of Industry and Trade.

While modern trade channels account for just 25-30 per cent of retail business, they are on the rise.

“The retail industry still has great potential for both local and foreign retailers,” Loan said.

Pham Trung Kien, deputy director of Saigon Co.op, said the retail industry in the next three years would see high levels of investment.

By the end of last year, foreign retailers controlled 58 per cent of the local retail market, she said.

That is expected to increase to 63 per cent by 2020, he said.

Foreign retailers in Vietnam first have to meet an economic needs test before they are allowed to open a new store larger than 500 square metres.

But in most places, authorities have not implemented it well, according to Kien and other delegates at the workshop.

They urged the government to better enforce this regulation to protect the legal rights of local retailers.

However, Trang said that Vietnam had committed to remove the economic needs test five years after the TPP takes effect.

She said that her centre, in collaboration with the Association of Vietnam Retailers, had conducted research on the risks of the retail industry after the TPP and the EU-Vietnam FTA come into force.

The aim of the research was to identify obstructions to the retail industry and to propose specific policies to help the industry develop in a sustainable manner, contribute to the development of other manufacturing industries, and increase consumer benefits.

HANOI – The city of Hanoi will give priority to improving its business climate and competitive capacity, aiming to be among the top 10 localities nationwide in the Provincial Competitiveness Index (PCI) by 2020.

The conference turned the spotlight on the socio-economic development plan for the period 2016-20, targeting Gross Regional Domestic Product (GRDP) growth of 8.5-9 per cent and per income capita at VND140-145 million (US$6,268-6,492). Social investment mobilisation is expected to be VND2.5-2.6 quadrillion in the next four years. In the economic structure, the service and construction industry account for 67-67.5 per cent and 30-30.5 percent, respectively, while agriculture makes up 2.5-3 per cent.

Regarding urban infrastructure development, the capital city is striving to become a green and modern urban area. Its target is to increase the rate of public transportation to 20-25 per cent, zone off 10-13 per cent of urban land for transportation and make the city greener by planting one million trees.

The secretary of the municipal Party Committee, Hoang Trung Hai, highlighted the city’s economic growth in the first half of this year, noting that concerted efforts needed to be made to realise an economic growth rate of 10-11 per cent in the remaining six months of the year.

Priority should be given to investment attraction, simplifying administration procedures and developing a transparent administration system, Hai added.

Concerning the city’s socio-economic development plan, he stressed that attention should be paid to the balance of resources to effectively implement the strategic tasks set out.

The budget cut was discussed during a meeting with the trade minister, the industry minister and the head of the Business Competition Supervisory Commission at the House complex on Monday.

House budget committee member Eka Sastra said the reduction was less than the planned 483 million rupiah mentioned in a presidential instruction this year.

“The lower budget cut is aimed at enabling the Trade Ministry to allocate funds for the improvement of the trade system and consumer protection,” he said.

Trade Minister Thomas Lembong said the 200 billion rupiah remaining after the cut would be spent on restructuring the supply chain of staple food, bolstering goods supervision and improving the commodities futures market and the online trading system.

On the other hand, he said, funding earmarked for non-productive programmes had been cut.

“We cut the budget to make spending more efficient, while maintaining the achievement of the programmes’ target,” Thomas said.

His remarks in his half-year briefing addressed the perception that SGX is stagnant and losing its shine as a first-rate capital market platform in Asia.

“The market is ultimately driven by events and activities, macro or company-specific,” he said.

However, Singapore continues to do well and to reward investors, he said.

About US$7.3 billion (Bt258 billion) of dividends will have been paid out by Singapore stocks in the first half of this year.

The Strait Times Index (STI) has sported a dividend yield rate of 4 per cent – above the Nikkei’s 2 per cent and 2.1 per cent in Shanghai and on a par with the Hang Seng’s 4.1 per cent.

In terms of total returns – price gain plus dividend – the STI was down 1.7 per cent in the first half, but the fall was far less than the Nikkei’s 5.7 per cent, Hang Seng’s 8.3 per cent and Shanghai Composite’s 23.2 per cent.

The Singapore market has also been less volatile. The STI volatility – fluctuation in returns – has been 16 per cent in this half. It was 30 per cent for the Shanghai Composite, 28 per cent for the Nikkei and 21 per cent for the Hang Seng.

“We saw how this played out last Friday, when Singapore was down roughly 2 per cent and Nikkei was down 8.5 per cent,” Chew said, referring to the limited impact on the STI from British citizens’ vote to exit the European Union.

And while Brexit has plunged the financial world into further uncertainty, the fundamentals of Asia’s growing middle class and the need for services and infrastructure remain in the SGX’s favour, partly because of its reputation as a hub for listings of real estate investment trusts (REITs) and business trusts.

“There’s demand for capital, and we have the platforms for both wholesale and retail opportunities. “

Nguyen Bich Lam, GSO general director, said the expansion of GDP growth in Q1 and Q2 was restrained, reaching only 0.07 per cent, compared with the rate of 0.2-0.3 per cent in previous years. After rising 5.48 per cent in the first quarter, GDP in the second quarter expanded to only 5.55 per cent.

According to the GSO, the service industry was the only bright spot in the first half of the year, hitting a three-year record high of 6.35 per cent. Some services saw high growth in the period, including wholesale and retail (up 8 per cent); finance, banking and social insurance (6 per cent); and real estate (3.77 per cent).

Industry-construction in H1 also reported a rise in growth of 7.12 per cent; however, it was much lower than the growth rate of 9.66 per cent in H1 2015.

Pham Dinh Thuy, from GSO’s Industrial Statistics Department, said the slowdown was due to a 2.2 per cent reduction in the mining industry, adding that it was a pessimistic sign for the economy as the nation’s natural resources were being depleted. The falling trend of the industry, therefore, is expected to continue in the coming years.

Furthermore, a sharp reduction in the global crude oil price also contributed to the mining industry’s slowdown.

In H1, agriculture-forestry-fisheries saw a decline of 0.18 per cent for the first time in many years. The decline was reflected in the reduction of 0.03 percentage points in the country’s GDP growth.

Lam attributed the agriculture-forestry-fisheries’ reduction to adverse weather, including very low temperatures in the northern provinces, a drought in the Central Highlands coffee belt and saline intrusion in the Mekong Delta food basket.

GSO experts said it would be hard for the country to meet its GDP growth target of 6.7 per cent this year as the GDP would have to expand to 7.6 per cent in the second half of the year, despite increasing volatility in the global economy.

To meet the annual GDP target, besides strictly implementing solutions and policies that support vulnerable areas, as approved by the Government, the GSO also recommends that the Government and Ministry of Agriculture and Rural Development adopt more effective measures in a timely manner to help the agriculture, forestry and fishery industries overcome their difficulties and achieve higher growth in the second half of the year.

The relevant ministries should also consider taking steps to boost the manufacturing and processing industry, besides continually strengthening high-added-value industries such as tourism, telecommunications, technology and information, as well as banking and finance.

It is also necessary to accelerate the disbursement of investment capital sources in accordance with the Government’s plans to boost economic growth, the GSO said, adding that steps to attract further resources for development and investment should also be taken.

The legal, business and investment environment must be continually streamlined to create the most favourable conditions for firms and investors, with the aim of providing the momentum needed to boost economic growth, the GSO said.

VN enjoys $1.5b trade surplus in H1

Vietnam gained a trade surplus of US$1.5 billion in the first half of this year due to reductions in import value, according to the General Statistics Office (GSO).

During the period, domestic firms showed a trade deficit of $9.7 billion, while the foreign-invested firms had a trade surplus of $11.2 billion.

The nation achieved year-on-year growth of 5.9 per cent in total export value, earning $82.2 billion for the first half of this year, the GSO said. However, the growth rate was lower than the state’s annual economic development target rate of 10 per cent.

Meanwhile, the value of national imports in the first six months fell by 0.5 per cent to $80.7 billion against the same period last year.

The office said the low growth rate was due to the reduction in goods prices by 3.85 per cent on the world market, driving down the export value of some of Vietnam’s key products.

The export value dropped by 46.6 per cent for crude oil to $1.1 billion; 2.7 per cent for rice to $1.3 billion; 12.3 per cent for rubber to $530 million; and 29.7 per cent for cassava to $562 million. It also fell 8.4 per cent for porcelain to $217 million and 5.2 per cent for steel to $832 million.

However, some other key export products reflected a growth in export value in the first half of this year. They included seafood, up by 4.4 per cent to $3.8 billion; vegetables and fruit, up by 41.4 per cent to $1.2 billion; cashew, up by 11.6 per cent to $1.2 billion; coffee, up by 17.9 per cent to $1.7 billion; and telephones, up by 17.9 per cent to $17 billion.

The GSO also reported that many imported products had seen a reduction in value over the past six months. The import value dropped by 5.9 per cent for machines and equipment to $13 billion; 17.5 per cent for petrol and oil to $2.4 billion; 7 per cent for telephones to $4.9 billion; and 19.4 per cent for wood and wooden products to $878 million, as well as dropping 20.5 per cent for fertiliser to $532 million and 1.8 per cent for automotives to $2.8 billion.

Hong Kong Disneyland came in second and Ocean Park, also in Hong Kong, is third.

Tokyo’s DisneySea was fourth on the list, followed by Universal Studios Japan.

Singapore’s Universal Studios, located on Sentosa island, was ranked 17th worldwide.

The ranking of the world’s top amusement parks was dominated by attractions in Orlando in Florida, with Universal’s Islands of Adventure topping the list.

Two other Singapore tourist spots that made it to this year’s Traveller’s Choice Awards were Adventure Cove Waterpark and the Marina Bay Sands Skypark.

Adventure Cove Waterpark is the sixth best water park in Asia, said Tripadvisor. Ranked ahead were Waterbom Bali, Black Mountain Water Park in Hua Hin, Carribean Bay in South Korea’s Yongin, Water Kingdom in Mumbai and Sunway Lagoon in Petaling Jaya, Kuala Lumpur.

The Marina Bay Sands Skypark was 16th among the top 25 landmarks in Asia. The top three landmarks are Cambodia’s Angkor Wat, India’sTaj Mahal and the Great Wall of China.

The awards and rankings are determined by millions of reviews by travellers on Tripadvisor over a 12-month period.

Award winners were determined using an algorithm that took into account the quantity and quality of reviews.

Neda Director General and Economic Planning Secretary Emmanuel F. Esguerra said the country would be shielded by its “strong macroeconomic fundamentals” from Brexit’s negative consequences to global markets.

“The direct effect of Brexit does not seem substantial even as we expect that domestic financial markets will experience volatility and huge swings in capital flows in the short term due to uncertainty. Despite this knee-jerk reaction, the economy stands on solid footing given its strong macroeconomic fundamentals,” Esguerra said.

In a referendum last week, the United Kingdom voted to leave the European Union, severing not only political but also economic ties with the mainland.

The Philippines’ exposure to the UK’s economy was “minimal,” Esgeurra said, pointing out that merchandise exports and imports accounted for just 0.9 per cent and 0.5 per cent, respectively, of total two-way trade between 2010 and 2015.

“However, the indirect effects via its impact on the EU bloc and the knock-on effects on the rest of the global economy bears watching. Diversification of export markets and products, increasing competitiveness and strengthening domestic demand would therefore be important,” Esguerra said.

As for the country’s external debt, borrowings from three European countries—France, Germany and the UK—totalled $6.8 billion or a mere 8.8 per cent of the foreign debt stock, which remained mainly denominated in US dollar (63 per cent) and Japanese yen (12.4 per cent).

“As such, the depreciation of the euro and the UK pound is not expected to have significant effects on debt service,” the outgoing Neda chief said.

As far as investments were concerned, net equity placements from the UK were equivalent to an average of only 4.9 per cent of the total from 2010 to 2015, although Neda noted that the share jumped to 20.2 per cent last year.

In terms of remittances, cash sent home by Filipinos living or working in Britain accounted for just 5.3 per cent on the average during the 2010-2015 period, although inflows were growing by 9.5 per cent.

“Annual overseas Filipino workers’ (OFW) deployment to the UK accounted for only 0.26 per cent of the total in 2010-2014. In 2014, OFW new hires to the UK consisted mostly of nurses, at 88 per cent,” Neda added.

“Also, tourist arrivals from the UK accounted for 2.7 per cent in 2010 to 2015 and grew by 9.3 per cent. As with remittances, tourist arrivals from the UK showed resilience in times of adverse events,” according to Neda.

Bangko Sentral ng Pilipinas (Philippine Central Bank, BSP) Governor Amando M. Tetangco Jr. earlier warned of spillover effects in domestic markets, which are expected to be more volatile in the near term.

The BSP was nonetheless “ready to provide liquidity to our market as needed,” Tetangco had said.

Outgoing Finance Secretary Cesar V. Purisima, meanwhile, had pointed out that the Philippine economy “has a robust domestic consumption core, insulating it from the bulk of Brexit’s effects.”

The Swedish furniture giant on Tuesday (June 28) announced a massive recall of 36 million chests and dressers, including its popular Malm model, in the United States and Canada, after the US Consumer Product Safety Commission said the children – all aged three years and younger – were killed when an Ikea chest or dresser fell on them.

In response to queries from The Straits Times on Wednesday (June 29), an Ikea Singapore spokesman assured the public that its chests of drawers are safe when anchored to the wall.

Customers should follow the assembly instructions and use the anti-toppling device provided with the product, the spokesman said.

Ikea Singapore added that the recall by its US and Canada counterparts was based on a local voluntary and non-mandatory standard, which applies to free-standing clothing storage units in North America.

“Ikea chests of drawers are tested for compliance to European Safety Standard, and meet all mandatory stability requirements on all markets where it is sold and it also recognises that some chests of drawers are intended to be attached to the wall,” the spokesman said.

“Ikea Singapore follows this global European standard (one of two global safety standards that Singapore authorities require furniture retailers to comply to), and hence, we will not be conducting any recalls here as we are in compliance with safety regulations.”