Vietnam to join Philippine rice tender

Vietnam is expected to complete with Thailand and Cambodia in a tender to supply 250,000 tons of 25% broken rice for the Philippines under a government-to-government (G2G) contract, a source told the Daily over the weekend.

The source did not detail the date for the tender. However, according to Oryza.com, the National Food Authority (NFA) of the Philippines plans a tender to find suppliers of 250,000 tons of rice to boost buffer stocks during the lean season. The agency will organize the tender in June for delivery between July and August.

The import decision aims to raise rice storage as El Nino weather conditions have induced drought in the country.

In February, the NFA agreed to buy 300,000 tons of rice from Vietnam under G2G contract after the Vietnam Southern Food Corporation (Vinafood 2) offered the bids equivalent to those of Thailand when that country won 200,000 tons of rice at the tender.

In 2014, the Philippines imported 1.8 million tons of rice, including 1.5 million tons of 2014 imports and 300,000 tons of 2013 residual imports.

The UN’s Food and Agricultural Organization (FAO) has estimated the Philippines’ 2015 rice imports at 1.8 million tons to stabilize domestic rice prices and restore stocks.

Currently, Thailand sells 25% broken rice at US$350-360 per ton while Vietnam and Cambodia offer the same rice type at US$330-340 and US$410-420 a ton respectively.

NFSC: Interest rates seen increasing

Interest rates have shown signs of picking up as banks’ lending has grown higher than mobilization and domestic business activities have steadily improved, according to the National Financial Supervisory Commission (NFSC).

The commission’s such remarks are seen in a report prepared for the Government’s regular meeting for May. It said government bond coupons have tended to rise since March due to lackluster demand. In the year to date, the ratio of sale to offered volume has been only 64.5% while the State Treasury has met only 31.7% of this year’s G-bond issue target.

Sluggish bond sales are attributed to limited sources of long-term capital from investors. Commercial banks are only interested in bonds with tenors of less than five years to improve their investment portfolio management.

As banks have focused more on credit growth than bond purchases, the State Treasury will have difficulty raising capital in the coming months. Credit institutions are now under pressure to increase interest rates as they have seen a slower rise in deposits.

By March 31, banks mobilized a total of over VND4,500 trillion, up 0.98% versus early this year. Of which, deposits in Vietnam dong increased 1.9% but those in foreign currency dropped 4.9%.

Total outstanding loans in the period exceeded VND3,820 trillion, a 1.7% increase. Credit in dong increased 2.4% and in foreign currency fell 0.9%.

The report said inflation has been stabilized with the consumer price index (CPI) in May rising a mere 0.16% from the previous month and 0.95% over the same period last year. However, the exchange rate has been under pressure even after the central bank announced the dong devaluation by another 1% on May 7.

Explaining the situation, the commission said the nation’s trade deficit has expanded to nearly US$3 billion in the first five months of this year while foreign-currency deposits at banks have declined.

But the good news is that business operations have continued improving, according to the commission.

The index of industrial production (IIP) has increased 9.2% this year, well above the 4.8% and 5.6% in the same period of 2013 and 2014 respectively. Better production and business operations have buoyed investment and consumption.

Imports have been increased to facilitate improving domestic production. Between January and April, imports of machinery and equipment surged 44.9% year-on-year while imports of electronic products, computers and spare parts jumped 36.4%.

Budget collection as of May 15 had risen 4.4% year-on-year compared to a 21.5% rise over the same period in 2014.

Vietnam-Mexico business forum held in Mexico City

Vietnam-Mexico bilateral trade value hit US$2.26 billion last year, a year-on-year rise of 40% and stood at US$774 million for the first quarter of this year.

Vietnam Ambassador to Mexico Le Linh Lan announced the figure at the business forum held in Mexico City on May 28 by the Vietnamese Embassy, the Vietnam Chamber of Commerce and Industry (VCCI) and the Mexican Business Council for Foreign Trade, Investment, and Technology (COMCE).

Ambassador Lan briefed participants on Vietnam’s national economic restructuring, its deep and wide integration into the regional and world financial organisations and diplomatic and socio-economic achievements, especially since the renewal process.

Besides valid bilateral agreements, the two countries are negotiating to establish a joint committee on economic, trade and investment cooperation and to sign an agreement on fisheries and aquaculture.

Vietnam proposed that Mexico will soon open a trade office in Vietnam.

Participating businesses shared experience in trading with partners residing in each country and information on fields of mutual concerns. They also answered questions on markets, and tax, transport and payment regulations.

Transparency begets success: experts

Transparency is an important element in improving the productivity of a business and gaining the trust and loyalty of stakeholders, a forum heard in HCM City on May 28.

Transparency referred to carrying out activities in an open manner and without secretiveness so that people could trust that they are fair and honest, said Pham Anh Duong, business integrity manager at Towards Transparency, a global civil society organisation working to stop corruption, said.

A recent study by the Government Inspectorate and the World Bank had found that transparent companies developed faster and more sustainably than non-transparent ones, he said.

"Another survey done by our organisation found that 60% of people are willing to pay higher prices to buy products from transparent companies."

With deeper international integration, besides complying with Vietnamese legal regulations, local companies must also prove that they had a strong transparent system and integrity to take part in the supply chain of multinational companies, he said.

It was an opportunity but also a challenge for businesses in ushering in transparency in their operations, he said.

Besides product quality, customers also paid increasing attention to the social responsibility of businesses, he said.

Many Vietnamese firms were aware of the need for transparency but were still concerned about the practical benefits of transparency and did not know how to systematically become transparent, he said.

Government agencies, international organisations and others were carrying out programmes to support businesses that wanted to adopt transparency, he added.

Nguyen Quang Vinh, director general of the Viet Nam Chamber of Commerce and Industry (VCCI)'s Office for Sustainable Business Development, said the VCCI was assigned to co-ordinate with relevant agencies to carry out Project 12, an action plan for speeding up an initiative to usher in integrity in business.

Transparency was one of the solutions to reduce corruption and fraud, he said.

Florian Beranek, lead expert, social responsibility, at the United Nations Industrial Development Organisation, said business needed transparency in operation, development, reaching customers and competition in the market.

Of the seven principles – accountability, transparency, ethical behavior, and respect for stakeholder interests, the rule of law, international norms of behavior, and human rights - for a responsible organisation, transparency served as the foundation for the others, he said.

Without transparency, it was hard to follow the other principles, he added.

Cashew nut exports thrive

For the first five months this year, despite the significant decline in exports of many other agricultural products, cash nut exports still grew to 14.4% in volume and 27.3% in value against the same period last year.

According to the Ministry of Agriculture and Rural Development, around 32,000 tonnes of cashew nuts were exported during May, with export earnings of US$221 million, bringing the total export volume and overall value in five months to 117,000 tonnes and US$828 million, respectively.

The average export price for the first four months was US$7,146 per tonne, a year-on-year rise of 15%. The US, China and the Netherlands remained the top three largest importers of Vietnam cashew nuts, accounting for 35.57%, 14.66% and 10.49%, respectively, of the total export revenue.

The Vietnam Cashew Nut Association (Vinacas) said since early May, the number of US customers ordering Vietnam cashew nuts have surged. Partners even signed contracts through the fourth quarter of this year.

However, the US is a demanding market with high requirements on food hygiene and safety. Therefore, if businesses violate regulations, the US Food and Drug Administration (FDA) may refuse to import future batches.

Vinacas warned that businesses must strictly control the quality of exported products in to the US, in accordance with FDA regulations.

AEON Shopping Mall Long Bien to kick off ahead of schedule

The AEON Shopping Mall Long Bien is expected to be inaugurated one month ahead of schedule, according to general director of AEON Vietnam Co, Ltd, Yasuo Nishitohge.

Mr Nishitohge said the AEON Shopping Mall will be inaugurated in October. With a total investment capital of US$200 million, construction on the project began in April 2014. Located on 9.6 ha, it includes a trade centre, a hotel and restaurants, an entertainment site, offices for lease and sports complex.

Meanwhile, Aeon Binh Tan Shopping Mall in HCM City is likely to open ahead of schedule (July 2016). The shopping mall has a total registered capital of US$185.5 million, covering on an area of 4.6 hectares.

So far, Japan’s Aeon Group has invested US$512 million in Vietnam with four shopping malls. Two centres have been put into operation in 2014 including AEON Tan Phu Celadon and AEON Binh Duong Canary.

IIP posts third consecutive quarterly rise

Vietnam's index of industrial production (IIP) in the five four months of the year increased year-on-year by 9.2%, the General Statistics Office (GSO) said.

This is the third consecutive increase of the IIP this year, following a 9.1% increase in the first quarter and a 9.4% rise in April.

GSO said the continuous rise of the IIP indicated the country's industrial production had stabilised, targeting a growth rate of 15.2% before the global economic slowdown.

It said the relatively high growth rate was due to a high consumption rate of 12 to 14% in the past three months, compared with the same period last year. Among these, vehicles saw the highest growth of 42%, electronics 31%, metal production 24% and leather 15%.

The office said the decrease in inventory index by 11.5% contributed to the industrial production recovery.

The chemical production inventory was lower than the average level of 9.2%, cloth by 3.8%, and rubber and plastic production 1.4%. The inventory of electric equipment and tobacco fell by 2% and 24% respectively.

GSO said vehicles reported an inventory increase of 32%, including 72,400 automobiles, while that of leather shoes was 130.7 million pairs, mobile phones 88.8 million units, TV 1.6 million and fresh milk 428 million litres.

However, other sectors saw low IIP such as raw steel, which rose only 1.5%, while natural gas fell 0.6% and motorbikes fell 14.2%.

Vietnamese banks honoured in Cambodia

The Bank for Investment and Development of Vietnam (BIDV) and its member Bank for Investment and Development of Cambodia (BIDC) were honored at a ceremony on May 25 in Phnom Penh for their outstanding contribution to the socio-economic development of Cambodia.

During the event, attended by Cambodian Deputy Prime Minister Men Sam An and Vietnamese Ambassador to Cambodia Thach Du, 24 individuals and units from the banks were granted with first and second class Royal Orders of Cambodia.

Addressing the event, the Deputy PM hailed the banks’ business activities together with their contributions to social security and poverty reduction work. The banks have donated a total of six million USD to humanitarian programmes in Cambodia.

These efforts have helped consolidate and strengthen the traditional friendship and cooperative ties between Vietnam and Cambodia in many fields, she added.

Dak Lak to tap into foreign resources to boost growth

The Central Highlands province of Dak Lak is determined to utilise international funding to drive local socio-economic development since foreign direct investments currently lag behind expectations.

Located in the heart of the Central Highlands, Dak Lak shares a 73km border with Cambodia’s Mondulkiri province, making the Vietnamese province a key part of the Vietnam-Laos-Cambodia Development Triangle.

According to the provincial Department of Planning and Investment, Dak Lak has only attracted 10 foreign direct investment projects with a total capital of 173.7 million USD since 2006, mainly in agricultural processing, animal feed processing, biofuel production, flower cultivation export, commerce and services.

Furthermore, only 29 official development assistance projects are being implemented in the province, mostly in agriculture, education and traffic. A majority of these projects focus on infrastructure, like roads, water supply and drainage facilities, which are unprofitable in the short term.

The former Director of the department, Nguyen Viet Tuong, the current Secretary of the Party Committee of Dak Lak’s capital city Buon Ma Thuot, said current investments did not exploit the province’s potential, especially in agriculture and forestry, as well as the provincial priority areas education, healthcare, culture and sports.

The number of projects in operation and on schedule is low, while many apply outdated technologies of limited added value, he added.

The Vice Standing Chairman of Dak Lak People’s Committee, Y Dham Enuol, said the province is about to announce an overall plan for socio-economic development until 2020 which will act as a call for investments.

The plan aims to upgrade the road network linking Dak Lak to other localities in the Central Highlands and the Development Triangle, he noted, adding that irrigation, water supply and drainage systems, and environmental and electricity facilities willl also be expanded.

Meanwhile, Deputy Director of the Planning and Investment Department, Vo Ngoc Tuyen, said local authorities were offering a number of favourable policies and streamlining administrative procedures so as to provide optimum conditions for investors.

The province is diversifying investment promotion efforts, including regular meetings and interactions with large domestic and international companies to introduce local potentials and Dak Lak’s investment climate.

Coordination with the Ministry of Foreign Affairs and relevant agencies, both at home and abroad, will also be improved so that Dak Lak can acquire up-to-date information on its partners, ultimately optimising the promotion of investments, Tuyen added.

New logistics project to serve Tan Rai bauxite complex

The People’s Committee of Central Highlands province of Lam Dong has recently approved a logistics project to serve the Tan Rai bauxite-alumina complex in the province.

The project, implemented in two phases by the Saigon-Lam Dong Transportation JSC, has a total investment of 286 billion VND (13.3 million USD).

It aims to transport about 1.23 million tonnes of materials and products for the complex, including 630,000 tonnes of aluminum and 500,000 tonnes of coal.

In 2014, the Tan Rai bauxite-alumina complex churned out 485,000 tonnes of aluminium. In 2015, it is expected to produce 540,000 tonnes of aluminium.

Banks need more funds for non-performing loans

Banks will need more provisional funds to support the risk of non-performing loans (NPLs) in accordance with national requirements for controlling bad debts, reported Dau tu (Vietnam Investment Review) online.

Asia Commercial Bank General Director Do Minh Toan said his bank targeted credit growth of 13-15 percent and a bad debt ratio of below 3 percent this year and had arranged a provisional fund of some 2 trillion VND (95.24 million USD) for 2015.

This year, the bank planned to sell 1 trillion VND (47.62 million USD) of NPLs to the Vietnam Asset Management Company (VAMC) and handle 1.6 trillion VND (76.19 million USD) in bad debts by itself, he added.

Sai Gon Joint Stock Commercial Bank reported that it had sold 11.4 trillion VND (542.86 million USD) in NPLs to the VAMC over the last three years, reducing its bad loan ratio to 0.5 percent by the end of last year.

The bank said it would have to continue to deal with NPLs to improve its financial situation, and provisional funds were likely to be increased.

Vietnam International Bank also said it would establish a provisional fund of more than 2 trillion VND (95.24 million USD), though it had held its bad debt ratio at 2.51 percent in 2014.

The bank expected its deposits to grow by 8 percent to 53 trillion VND (2.52 billion USD) and outstanding loans to increase by 11 percent to 42.38 trillion VND (2.02 billion USD) this year.

It planned to resolve some 3.84 trillion VND (182.86 million USD) in NPLs, predicting provisional funds would rise sharply, with bad debts likely to climb by 300 billion VND (14.28 million USD) in 2015.

Eximbank leaders said establishing provisional funds was a prerequisite for guaranteeing operational security; hence, it was willing to sacrifice profits to provisions. In 2014, a provisional fund amounting to 3 trillion VND (142.86 million USD) resulted in a pre-tax profit as low as 68 billion VND (3.24 million USD) for the bank.

The bank planned to sell some 1 trillion VND worth of bad debts to the VAMC this year, they added.

The State Bank of Vietnam (SBV) has urged credit institutions to step up bad debt resolution since January in a bid to reduce the overall NPL ratio in the domestic banking system to less than 3 percent in 2015, following Government orders.

The lenders have to resolve by June 30 at least 60 percent of the total number of bad loans they are supposed to handle in 2015. They have to transfer at least 75 percent of the total debts they will register for sale to VAMC this year, within the same deadline. The deadline for selling all their NPLs is September 30.

The SBV has allowed the VAMC to issue special bonds, worth up to 80 trillion VND (3.76 billion USD), to acquire bad loans from credit institutions this year. The central bank also required lenders to establish yearly provisional funds amounting to 20 percent of the value of the bonds they had bought from the company.

Tran Du Lich, a member of the National Financial and Monetary Policy Advisory Council, said selling NPLs to the VAMC was a good way for banks to clean up their accounting balances, but the requirement for provisions would create significant pressure for them.

Lao Cai hosts farm produce export promotion event

Eighty-five domestic and Chinese businesses are expected to take part in a conference on promoting exports of farm produce, seafood and timber products which will be held in the northern province of Lao Cai on May 27 and 28.

At a meeting on May 25, the provincial People’s Committee heard reports on preparations for the conference, including working trips to other localities and China’s southern Yunnan province to seek potential partners.

Vice Chairman of the provincial People’s Committee Le Ngoc Hung said the conference will create a good chance for domestic companies to introduce their products to potential Chinese partners and increase sales to the market.

Lao Cai province, which shares more than 200km of border line of Yunnan, plays a crucial role in connecting the domestic market with China’s south western market.

South Central Coast to further develop tourism

A master plan for tourism development in the South Central Coast of Vietnam by 2020 with a vision for 2030 was announced in Da Nang City on may 26 by the Ministry of Culture, Sports and Tourism.

The goals of the plan, approved by Prime Minister Nguyen Tan Dung, are to develop sea and island tourism - the strength of the region - and to develop urban areas alongside tourist spots offering high-quality services.

The tourism sector is targeted to become a key industry in the region by 2020.

Covering nearly 44,377 sq.km, the region consists of Da Nang City and the seven provinces of Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan and Binh Thuan.

Banks told to promote corporate governance

Corporate governance and management in commercial banks are two core factors that can determine their success or failure.

Vietnamese commercial banks still have a lot of work ahead to catch up with international norms of corporate governance despite their progress in recent years.

At a conference on corporate governance in bank restructuring at Ha Noi yesterday, Can Van Luc, general director of Bank for Development and Investment of Viet Nam (BIDV), said corporate governance would help improve business activities, as it would offer easy access to long-term capital as well as increasing business opportunities.

Luc added that it would also ensure benefits and fair practices among shareholders while enhancing competitiveness and integration.

Corporate governance should manage relationship with shareholders, auditors, follow management boards' structure and operation, monitor the role of supervising board and independent members, appointments and incentives, risk management and internal supervision, as well as ensure information quality and transparency, and establish policies and accounting system.

"A survey of 35 commercial banks showed that governance in Viet Nam is more organised, as 34 out of 35 banks have one member of management board cum head of supervising board," he said.

In addition, information dissemination has become more transparent as all of the surveyed banks have websites; 27 of the banks had independent audit reports on their income and finances in 2013 and 2014.

However, corporate governance at Vietnamese banks still lacks a legal framework, while the role of management board members is not clear.

He proposed that the country should complete its legal framework of governance and strengthen the role and effectiveness of supervising boards, internal audits, as well as good risk management strategies.

He also asked commercial banks to increase transparency in information distribution by finishing financial reports on time and regularly updating information on their websites.

Sharing the view, Pham Huyen Anh, deputy chief inspector of the State Bank of Viet Nam, said the central bank had developed a governance system to suit international norms and credit risk management at 10 pilot commercial banks.

He said the banking sector's key tasks were to improve governance capacity, including corporate governance and risk management up to 2020. In addition, the country would have one or two large banks at regional level.

BIM Group honoured as leading Viet Nam developer

BIM Group, developer of many high-profile property projects in the country, including five-star InterContinental Phu Quoc Resort, was honoured as being among the BCI Top Ten 2015 Developers in Viet Nam.

BCI Asia Awards, since 2005, has become among the most coveted awards for architectural firms and developers in seven Asean countries and territories, including Hong Kong, Indonesia, Malaysia, Philippines, Singapore, Thailand and Viet Nam.

The award recognises developers with the greatest aggregate value of projects based upon by the extent of their sustainability and contribution to the construction environment in Southeast Asia.

InterContinental Phu Quoc, a five-star integrated tourism complex covering 7.3 ha along the beach of Phu Quoc Island, with 400 luxurious resort rooms in environmentally-friendly designs, is BIM Group's highlight project this year.

The resort, with its first phase to be completed and put into operation this year, will provide high-end utilities, such as swimming pools, gyms, shopping and recreational centres for tourists, along with international-standard services.

"We hope that five-star InterContinental Phu Quoc Resort will contribute to turn Viet Nam into the leading tourism and recreational destination, not only in the region but also in the world," stressed Le Minh Dung, managing director of BIM Group's property and resort business.

He added that the cooperation with the Intercontinental Hotel Group, a leading international hotel and resorts operator, in managing the complex affirmed BIM Group's efforts in developing quality products, together with building a prestige brand in the field of tourism and resorts.

BIM Group is also implementing many high-profile property projects across Viet Nam and in foreign countries, such as Lotus Residences, Green Bay Village, Little Vietnam Trade Townhouse in Halong Marina Urban Area in northern Quang Ninh Province, and the five-star Crowne Plaza Vientiane Complex in Laos.

Tourism real estate development is one of the three main businesses of BIM Group, a diversified corporation, which also operates in agriculture, food and commercial services.

Spike predicted in Korean investment

South Korean direct investment inflow to Vietnam is expected to soar in the near future, as businesses scramble to capitalise on the recently-signed free trade agreement between the two countries.

“We see multiple opportunities arising from the recent ratification of the free trade agreement (FTA) between our countries, which is why we have chosen to build our factory in Vietnam,” said Kim Duk Yong, chairman of KMW - South Korea’s biggest maker of telecommunications and LED lighting equipment. He made this statement at a recent groundbreaking ceremony for its $100m manufacturing plant in the northern province of Ha Nam.

At the ceremony, Vietnamese Deputy Prime Minister Hoang Trung Hai and South Korean Ambassador to Vietnam Jun Dae Joo said they both anticipated a jump in South Korean investment to Vietnam after the recent signing of the bilateral FTA.

According to Hong Sun, general secretary of the Korean Chamber of Commerce in Vietnam, in addition to industry, agriculture is also expected to receive a lot of attention from Korean investors.

“Many South Korean investors want to step into Vietnam’s agriculture sector, and so the number of investors may spike following the signing of the bilateral FTA. Through their operations in Vietnam, South Korean investors will export products back to South Korea to cash in on low tariff rates arising from the FTA,” said Sun.

“In addition, the bilateral FTA allows very low tariffs for Vietnam to import garment materials and accessories from South Korea, this will inspire Korean firms to further pump up their investment in this field for export back to South Korea and other markets,” he added.

His comment has been backed up by a string of new South Korean investment projects in Vietnam’s textile and garment sector over recent months. For instance, earlier this month, authorities in the southern province of Dong Nai granted an investment certificate to Hyosung Dong Nai - part of Hyosung Corporation - to invest more than VND14 trillion ($660 million) to build a fibre production plant on 22 hectares in the province’s Nhon Trach 5 Industrial Zone.

A textile-garment-dyeing factory valued at $30 million invested in by the South Korean garment and textile group Panko was licensed not long ago in the central province of Quang Nam.

Other projects include In Kyung Apparel’s $5.1 million project, a $20 million project by S&H Vina, and an $8.5 million project by Viet Pan-Pacific in the north-central province of Thanh Hoa, to name just a few.

Meanwhile, ACE Technologies Corporation - a Korean leader in the manufacture of radio frequency components, base station antennae, mobile antennae, repeaters, telematics, and future media concepts, last week was licensed to build a $60 million plant producing wireless antennae for smart-phones in Ha Nam.

“The ratification of the Vietnam-South Korea FTA will inspire Korean investors with delayed projects in Vietnam, and will convince those still unsure about their investment decisions to become more determined to invest in Vietnam,” said Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises.

South Korea is currently Vietnam’s biggest foreign investor. As of April 20, 2015, South Korea’s total cumulative investment capital here surpassed $38.5 billion.

Pilmico seeks to buy VN feed companies: report

Filipino firm Pilmico Foods Corporation is trying to acquire some feed companies in Viet Nam in an expansion bid, the local media in the Philippines reported on May 24.

Pilmico, a subsidiary of the Aboitiz Group, had bought a 70 per cent stake in Vinh Hoan 1 Feed JSC (VHF) for US$28 million last year.

Founded in 2007 in the southern Dong Thap Province, VHF was the fourth largest aqua feed producer in Viet Nam. It operated a 130,000-tonne-per-year aqua feed facility, primarily producing pangasius feed.

According to the Q1 earning report of the Aboitiz Group, Pilmico contributed Php416 million ($9.3 million), 23 per cent higher than the same period last year, because of a strong performance by the feed division. The net income after taxes (NIAT) of Feeds Philippines went up by 70 per cent to reach Php146 million ($3.26 million), while Feeds Vietnam contributed Php32 million ($715,599)

Pilmico President and Chief Executive Officer Sabin M Aboitiz told Filipino media that they were looking at Viet Nam for the expansion of the feed business. He said Pilmico was currently looking at three companies in northern Viet Nam.

The Aboitiz Group did not announce anything more specific about the plan, but said they would implement it in the next two months.

Sala Urban Area in HCM City's Thu Thiem to start selling flats

Dai Quang Minh Corporation has said apartments in its Sala Urban Area, which it is developing in Thu Thiem in HCM City, will cost from VND 40 million per square metre plus value-added tax.

It said it would start selling the apartments on June 7.

Houses and villas would be sold from the end of next month, it said without disclosing their prices.

The corporation has signed contracts for interiors and equipment with Dulux, Jotun, Eurowindow, Daikin, Schindler, American Doors, Yale, Osram, Teka, Kohler, and Savills and with the Bank for Investment and Development of Viet Nam for funding.

Dai Quang Minh is a pioneer in developing the new Thu Thiem urban area in District 2, even investing in upgrading public infrastructure by building roads.

Sala spreads over an area of over 113ha, and its apartments and houses are expected to house 22,500 people when completed in 2020.

Dai Quang Minh said it was the only seller and the only official websites were www.dqmcorp.vn and www.khudothisala.vn.

Vietnam banks hiding bad debt

Banks in Vietnam are underreporting bad and doubtful debt by as much as 10 times so their numbers look better and to avoid investigation of their loan portfolios, an economist said.

Tran Du Lich, former deputy head of the HCM City Institute of Economic Research, said banks were reporting bad debt rates of three percent, but inspections by the State Bank of Vietnam show the real rates were 10 times higher.

“With the high bad debts, banks must have a hedge fund of higher value, which will affect their business results as well as their prestige, so they want to hide their bad debts," Lich said.

Bad debt levels announced by the State Bank of Vietnam, credit rating organisations such as Moody's Investor Services, and the International Monetary Fund are higher than the rate reported by the banks, he said.

Some experts said banks were reluctant to report accurate levels for fear of attracting scrutiny, which can expose irregular investment activities.

Moody's said In mid-November 2013 that the bad debt rate of Vietnam's banks was 15 percent, while the SBV put the rate at 4.7 percent.

The IMF said the bad debt rate between 1999 and 2000 was at 30 percent, while the SBV said it was 15 percent.

Le Dang Doanh, former head of the Central Institute for Economic Management, said that hiding bad debt was a danger to the banking system because it prevented the government from taking appropriate measures and undermined investor confidence.

SBV data for the third quarter of 2014 put bad debt at 4.7 percent of the economy's total outstanding loans. Vietnam is targetting bad debt at three percent for 2015.

The SBV announced the establishment of the Vietnam Asset Management Company (VAMC) in 2013 to purchase bad debt from financial institutions, provide debt restructuring and guarantee continued operations of enterprises, organisations and individuals through guaranteed loans.

VAMC looks to buy bad debts totalling some VND170trn from the local banking system by the end of May. It sees its target for total bad debt purchases of VND200trn by the end of this year as achievable.

Tourism official urges visa-free travel for visitors

Vietnam Tourism Association (VTA) deputy head Vu The Binh wants visa exemptions for visitors from more countries to help reverse the declining trend in growth of arrivals.

The VTA says tourism growth has declined from 34.8 in 2010 to 19.1 percent growth in 2011, 13.9 percent in 2012, 10.6 percent in 2013 and 4,0 percent in 2014.

"If the number of tourists in the first six months goes down, then it's dangerous because the tourism season is at its highest in that period," Binh told a workshop held by the VTA in Hanoi on May 25.

"Even though Thailand has had some political crisis, its growth rate is still good. If we don't implement necessary measures now, Vietnam will fall behind and may not be able to recover," he said.

Visa exemptions and fewer restrictions, as well as better management of pricing, were ways of encouraging more visitors to Vietnam.

Malaysia exempts visas for tourists from 155 countries and Singapore allows visa-free travel for 158 countries. They receive, respectively, 28m and 15m tourist arrivals a year.

Vietnam allows visa-free entry for tourists from seven countries - Japan, South Korea, Finland, Denmark, Norway, Sweden and Russia - and 30-day exemptions for citizens from nine out of the 10 ASEAN member states, with a total number of tourist arrivals at some 8m a year.

Since visa exemptions were granted in 2004 for tourists from Japan, South Korea and Russia, the number of arrivals from these three markets has grown by 354 percent.

Binh proposed visa exemption for tourists from France, Germany, Australia and the UK, and to trial removing visa fees for other countries for the period July to December.

South central coastal region targets to welcome 15 million visitors by 2015

The south central coastal region has set a target to welcome 15 million visitors, including 4.5 million foreigners by 2020 and 25 million visitors, including 7.5 million foreigners by 2030.

The region’s tourism sector also aims to achieve a total revenue of VND 70 trillion and VND160 trillion by 2020 and 2030, respectively.

These targets were set inline with a master plan developing tourism in the southern central coastal region until 2020 with a vision extended to 2030, which was announced at a conference in Da Nang city on May 26.

The region comprises of Da Nang city and seven provinces of Quang Nam, Quang Ngai, Binh Dinh, Phu Yen, Khanh Hoa, Ninh Thuan and Binh Dinh with a natural area of around 44,376 square kilometres.

Under the plan, the region will focus on attracting both domestic and international holidaymakers, particularly those from key markets such as Northeast Asia, Russia, East Europe, Southeast Asia, India and Turkey.

The sector will give priority to developing sea and island tourism, designing tourism promotion programmes, and developing tourist sites with diverse tourism products and improved facilities and services.

Speaking at the ceremony, Deputy Minister of Culture, Sports and Tourism Dang Thi Bich Lien said that the master plan seeks to unlock available potentials and advantages of the region, turning tourism into one of the region’s most important economies in 2020 and its economic spearhead by 2030.

Saigon Centre to close shopping area for renovation

The shopping area on the second and third floors and part of the first floor of the Saigon Centre in downtown HCMC will be closed for a year starting next month to make room for a major upgrade project, according to the owner of the building.

Some 40 tenants having shops there will have to suspend business from June 26. However, Zakka convenience store, Café Terrace and Paris Deli can extend operations for three months after upgrade work starts.

All stores in the shopping area will have to halt operations from September for renovation and the area will be connected to the second phase of the Saigon Centre project, which has been implemented since 2011.     

The owner of the Saigon Centre had plans to close the shopping area one to two years ago and informed tenants of this but the exact time for the temporary closure was announced recently. It said information about the renovation is shown in the space lease contracts with tenants and they agreed to terminate contracts earlier than scheduled.

The renovation will also cover the façade of the Saigon Centre building and its hallways and restrooms in the shopping area. It will not affect offices on the other floors of the building, meaning business is as usual for the offices.

The owner of the Saigon Centre plans to reopen the shopping area in July next year and consider signing new contracts with old tenants. It has inked deals with Qhome, Nha Xinh and Phuong Nam Bookstore.

The second phase of the Saigon Centre project has been executed since 2011 by a joint venture grouping Singaporean corporation Keppel Land and Vietnamese firms Southern Waterborne Transport Corporation (Sowatco) and Saigon Real Estate Corporation (Resco). This phase costs some US$160 million.

The new building next to the existing one on Le Loi Boulevard in HCMC’s District 1 will be up and running.

According to the joint venture, the new 45-storey building of the Saigon Centre project was designed by U.S. architecture firm NBBJ and also has seven floors for shopping and food services covering 50,000 square meters, Grade A offices with 40,000 square meters and over 200 luxury serviced apartments.

Takashimaya Singapore, one of the leading retailers in Asia, signed a contract with Keppel Land Watco in 2012 to lease some 15,000 square meters of the new building, which is scheduled to be put into operation in July next year.

BUV builds new campus in Ecopark Township

British University Vietnam (BUV) on May 25 started construction on its new campus covering 6.5 hectares in Ecopark Township in the northern province of Hung Yen.

The three-phase project will cost US$70 million and enable the university to cater to a population of 7,000 full-time students. The campus will provide local and foreign students with international-standard teaching and learning facilities and a globally recognized degree, as well as recreation and student development facilities.

The first phase of the Ecopark campus will be developed on nearly three hectares at a cost of nearly US$25 million and will be able to serve 1,200 students from the end of 2017.

BUV said in a statement that the new campus will be the first UK standard environment in Vietnam for teaching, studying, researching, and personal development.

A sports and entertainment complex will also be developed to create an active learning environment. With this aim at the core of the investment, the school has chosen international architects and construction supervision for designing and constructing the site.

BUV’s general director Jesse David Boone said the new Ecopark campus will act as the foundation for the university and will be its long-term investment in education in the country.

Meanwhile, dean of BUV Christopher Jeffery said BUV is committed to giving Vietnamese students not only the knowledge and critical thinking skills, but also the professional working skills to keep pace with the global employment market.

“Throughout their degrees, students will be provided with internship opportunities with international employers as well as international field trips and study abroad opportunities,” Jeffery said.

“Educational institutions need to grow sustainably,” he said. “The Ecopark new campus construction has shown BUV’s commitment to sustainable development in Vietnam.”

At its current campus on Ba Trieu Street in Hanoi, BUV has banking and finance, international business management, marketing management, accounting and business, accounting and finance programs. In 2015, the university has become an international university allowed by Vietnam’s Ministry of Education and Training to conduct full time degree programs for BA finance and economics.

Internal debt ratio grows

Vietnam’s public debt in 2013 increased 18.6% against 2012 with the proportion of domestic loans swelling but that of external debt shrinking,  according to a recent report by the State Audit of Vietnam.

Internal debt rose from 43.15% in 2012 to 50.06% in 2013 while foreign loans fell from 56.85% to 49.94%, says the report released after the Ministry of Finance told the National Assembly that 2013’s budget deficit climbed to 6.6% of gross domestic product (GDP) instead of 5.3% as approved by the legislature.

According to the State Audit report, the Government’s foreign loans in 2013 were US$36.28 billion, or nearly VND763.2 trillion, up 4.92% against the previous year. Meanwhile, loans borrowed from local creditors were VND764.93 trillion, up a staggering 38.56% compared to 2012.

Domestic loans guaranteed by the Government in 2013 rose by 7.8% year-on-year to around VND207.58 trillion.

According to the State Audit, the terms of the bonds guaranteed by the Government were short (2-5 years) while the loan terms of many projects lasted five to 12 years, resulting in risks for capital mobilization and lending.

Debts owed by municipal authorities were VND30.02 trillion, exclusive of loans at Vietnam Development Bank, the report says. But local governments did not manage such debts effectively and there were not sanctions.

The Ministry of Finance monitored debts of municipal authorities but did not fully know the exact debt amounts and borrowing limits of local governments in line with the law on State budget, according to the report.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR