Fuel wholesalers increase imports from ASEAN

Local fuel wholesalers have accelebrated fuel imports from ASEAN markets since early this year to enjoy lower tariffs.

Statistics of the Vietnam Petroleum Association (Vinpa) indicated that of over five million tons of fuels imported in the first half this year, nearly 2.4 million tons (47%) came from Singapore, 732,000 tons from Thailand and 365,000 tons from Malaysia, rising by 54.7%, 236% and 47.9% respectively over the same period last year.

Meanwhile, fuel imports from other traditional markets like China and Taiwan dropped in the first six months of the year.

A fuel wholesaler in the south told the Daily that the volume of fuels imported from ASEAN countries increased sharply in the first quarter as local traders took advantage of preferential tax rates.

Before April 13, fuels imported from ASEAN were taxed at 20% for gasoline and 5% for diesel compared to 35% and 30% respectively from other markets.

The Ministry of Finance now applies the same import duty of 20% for gasoline to all markets. However, the tax on diesel is still 5% for imports from ASEAN while diesel imports from other markets are subject to 10%.

Consumers have not benefited from the import tax difference as relevant agencies only use the common tax rates to calculate the base prices of fuels. Moreover, local fuel enterprises are unable to sell fuel products imported from various markets at different prices.

KIDO yet to invest in DongABank

KIDO Corporation has yet to buy VND1 trillion (US$45.9 million) worth of DongABank shares as the two sides have suspended negotiations over the share purchase, a source familiar with the situation said.

According to the source, KIDO reckoned that now is not the right time for it to buy into DongABank.

At its general meeting last month, the bank said it would increase chartered capital from VND5 trillion to VND6 trillion some time this year and that KIDO would buy 100 million shares worth VND1 trillion to become a strategic shareholder of the bank.

DongABank explained that after talks with many partners, it found Kinh Do Corporation, which was renamed as KIDO after  Mondelez International had spent US$370 million acquiring an 80% stake in Kinh Do’s snack business, meeting all requirements to become a strategic investor.

The source told the Daily that KIDO inked a comprehensive partnership with DongABank and planned to invest in the latter.

The source from KIDO told the Daily earlier that the corporation would decide on the share acquisition deal after looking into DongABank’s audited business and investment assessment reports.

A leader of the State Bank of Vietnam (SBV) said the SBV had yet to receive a proposal from the corporation for purchasing DongABank shares.

However, he said, a foreign investor is exploring the possibility of investing into DongABank.

Last year, the bank obtained consolidated after-tax profit of a mere VND26.9 billion. As of the end of 2014, bad debt at the bank had reached nearly VND1.95 trillion, down VND170 billion against 2013 and making up 3.76% of its total outstanding loans.

DongABank shares on the OTC market jumped from VND3,500 each a month ago to VND4,700-4,800, buoyed by news about KIDO’s plan to buy DongABank shares for VND10,000 each.

The bank’s exisiting major shareholders include PNJ with 7.7%, CEO of DongABank Tran Phuong Binh and his family with 9.6% and Construction Company 79 with 10%.

At the general meeting, DongABank did not present a plan for its new board of directors as it had yet to get the central bank’s approval for the plan, but chairman Cao Sy Kiem told the meeting that he would step down.  

July manufacturing output grows strongly

Vietnam’s manufacturing sector improved solidly again in July, with faster growth in both output and new orders recorded, according to a survey of Nikkei and Markit.

The headline Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - posted 52.6 in July, up slightly from 52.2 in June. This signaled a further improvement in business conditions in the manufacturing sector.

Growth of new orders and a related rise in production requirements led Vietnamese manufacturers to take on extra staff, with the rate of job generation quickening from that seen in June. The health of the sector has now strengthened in each of the past 23 months.

Total new business increased solidly as a result of greater customer demand. On the other hand, new export orders decreased for the second successive month.

Commenting on the Vietnamese Manufacturing PMI survey data, Andrew Harker at Markit, which compiles the survey, said the pick-up in the rates of growth of output, new orders and employment in July are a welcome sign given the slowdown in the previous month and suggest that the manufacturing sector remains on track following a strong performance in the second quarter.

However, export demand was again the main negative from the latest survey as new business from abroad fell for the second month running. There remains little evidence of building inflationary pressures as input prices decreased for the first time in three months and output prices fell further, Harker said.

Ministry seeks to extend export tax break for sliced cassava

The Ministry of Finance has asked the Government for permission to keep export tariff on sliced cassava at 0% until the end of this year, and raise the tax to 1-2% early next year.

The ministry said in a statement Monday that it has proposed the Government allow it to halt the implementation of Circular 63/2015/TT-BTC, with effect from June 20, which revised up the export duty on sliced cassava to 5%.

The ministry said the suspension would help enterprises and farmers ride out difficulties in this year’s cassava harvest season and clear a total of around 500,000 tons of sliced cassava in stock after the export tax rose to 5% on June 20.

The ministry suggested adjusting up the tax to 1-2% from January 1 next year.

Previously, the ministry issued the circular hiking the export tax on sliced cassava with an aim to reduce exports to ensure sufficient materials for the production of E5 bio-fuel on the domestic market as told by the Government.

However, before the circular came into force, many sliced cassava exporters had bemoaned that the tax spike would lead them to rack up losses or even go bust.

The exporters explained that they had bought cassava from farmers since April and spent much money stocking and preserving the product. Given the increased tax, they would have to raise their product prices and their customers, mostly Chinese importers, would refuse purchases.

Foreign shipping lines still dominant

Domestic logistics companies are losing on the home market as a majority of local enterprises will choose foreign shipping lines when it comes to importing or exporting goods, according to the Vietnam Logistics Business Association (VLA).

Do Xuan Quang, president of VLA, told a press conference in HCMC on Monday that there are over 40 foreign shipping firms active in Vietnam and accounts for 3-4% of the number of players in this sector. But they transport more than 80% of the total volume of import and export cargo in this market and have an edge over rivals in the vital sea lanes connecting Vietnam with the United States and Europe.

Meanwhile, over 1,300 local logistics companies focus on the domestic market and sea lanes linking Vietnam and other regional markets, Quang said at the “Logistic roads to ASEAN + 6 after AEC” press conference held to introduce an exhibition of logistics services in Bangkok early next month.

Almost all local logistics firms are small and medium with capital averaging out at VND6-7 billion each while developing a warehouse costs millions of U.S. dollars. Financial constrains have prevented them from having offshore offices, and they have ended up serving as agents of global logistics companies.

Vietnamese logistics enterprises are unable to compete with foreign rivals as they are weak in manpower, governance and technology, Quang said. Therefore, Vietnamese logistics firms usually handle imports under the CIF (cost, insurance and freight) format and exports in accordance with FOB (free on board) terms.

Confidence of domestic importers and exporters in the vessel fleets and services of Vietnamese logistics companies is not high.

Experts at the press conference agreed that the logistics industry still holds much potential for local firms to expand market share, particularly after the ASEAN Economic Community (AEC) takes shape at the end of this year. Moreover, Vietnam is expected to sign more bilateral and multilateral free trade agreements.

Experts called for local logistics firms to draw up strategies, invest more in facilities and services, and strengthen cooperation with partners to improve competitiveness.

Tra Vinh: forest aquaculture yields positive effects

The breeding of shrimp and other aquatic species in submerged forests in the Mekong Delta province of Tra Vinh in recent years has helped farmers earn stable revenue and localities to restore coastal forests.

According to experts, raising shrimp under forests with improved extensive farming techniques has more advantages than intensive cultivation and helps protect the environment.

Profits from the method could reach up to 100 million VND (about 4,600 USD) per hectare.

Phan Van Huan from Hiep Thanh commune has used half of his six hectares of forest to expand coverage and the rest to farm shrimp and other species. Each year, he makes a profit of 150 million-300 million VND (6,900-9,200 USD).

With 0.7 hectares of water surface covered by forest, Phan Van Canh’s family in Duyen Hai district have earned 70 million VND (3,200 USD) annually.

The model requires less investment, fewer risks and is suitable for farmers who live in coastal areas, said Tran Truong Giang, Head of the agriculture and rural development section of Duyen Hai district.

About 80 percent of the shrimp farmers who have applied improved extensive farming techniques have profited, he added.

Tran Van Tri from the provincial Department of Forest Management said that breeding shrimp in submerged forests has proven to be more sustainable and profitable in comparison with industrial shrimp breeding.

The method has also encouraged farmers to invest in planting new forests, he said.

Statistics showed that from 2010 to 2014, farmers in coastal areas of the province planted 3,200 hectares of forests, increasing the total submerged forest coverage to 7,520 hectares.

Tra Vinh province is currently home to 24,000 hectares of forest along its 65-kilometre coast.

WB-funded medical waste treatment area built in Quang Ngai

The central province of Quang Ngai has become the first locality to host a 120-billion-VND (5.5 million USD) pilot project funded by the World Bank to build a concentrated area for medical waste treatment.

Through 2017, the project will focus on upgrading solid waste management systems in local healthcare facilities and building an area to treat toxic waste from hospitals and healthcare stations in the province, said Nguyen Tan Duc, Director of the Quang Ngai Healthcare Department.

The project will also conduct training courses to raise hospital awareness and capacity in waste management, he said.

The goal is to process 400 kilograms of waste daily. Once classified, toxic waste will be treated with chemicals, grinded and compressed before being buried or burned.

It is expected to ease burdens on the province due to the large amount of waste generated in hospitals each day, said Duc.

Feedback strives to align draft tariff law with open trade climate

A workshop was held in Hanoi on August 4 to collect opinions on the draft revised law on export and import duties, a move to align the nation’s regulations with the free trade environment Vietnam has promised its partner countries.

The draft law is scheduled to be submitted to the National Assembly for approval this October and take effect on July 1, 2016.

Vu Ngoc Anh, Deputy General Director of the General Department of Vietnam Customs, said it is time to overhaul the existing law, which took effect ten years ago and includes some regulations that are not in line with commitments made in existing or pending free trade agreements with partner nations.

Amendments should facilitate exports, especially goods with high added value, while curbing the shipment of raw material and appropriately protecting domestic products, he added.

Lo Thi Nhu, Director of the General Department’s Import – Export Duty Department, considered the extension of export tax payment deadlines for a number of prioritised companies as a fundamental reform. Accordingly, businesses could pay duties once a month and would not be subjected to guarantee fees or late payment penalties.

However, participants pointed out that only 35 of more than 50,000 importers and exporters are eligible for such priorities and they are considered compliant with legal regulations.

Almost all enterprises eligible for monthly payments are major firms, given one of the criteria for prioritised firms is a minimum trade turnover of 50 million - 200 million USD annually, an unrealistic target for small and medium companies, said Pham Thanh Binh – an expert of the Governance for Inclusive Growth Programme of the US Agency for International Development.

He noted businesses in some countries could pay duties 10 days after their goods are cleared instead of the pre-clearance payments currently implemented locally.

At the workshop, some opinions urged the long-term stability of revisions to minimise risks for enterprises. Others said some regulations in the draft law are still not in accordance with the International Convention on the Simplification and Harmonisation of Customs Procedures. The draft also fails to address many issues relating to tax exemptions and ways to encourage firms to comply with laws.

Opportunities abound for professional advisors

M&A activities in Vietnam in 2014 were very robust, with total deal value increasing by nearly 30 per cent from 2013, according to reports from several independent research houses.

Notable deals were primarily in the retail sector, including Thailand’s BJC negotiating to buy Germany’s Metro Cash & Carry Vietnam in a deal valued at $879 million; Thailand’s Central Group purchasing a 49 per cent stake in Nguyen Kim with a value of $80 million; Vingroup buying Ocean Mart for $25 million; and Japan’s AEON taking a 49 per cent stake in Citimart valued at $20 million. The food and beverage sector has also seen significant  mergers and acquisitions (M&A) activities, with Modelez International buying an 80 per cent stake in Kinh Do Binh Duong, an arm of Kinh Do Group that specialises in cakes and candies, for $370 million; Daiwa PI Partners and VinaCapital purchasing a 70 per cent stake in International Dairy JSC valued at $45 million; and Kinh Do Group buying a 51 per cent stake in Vocarimex. The oil and gas sector saw some of the biggest mega-deals, with two Malaysian investors, Sapura Kenca Energy and Petronas, trading a big stake in three oil blocks in shallow Vietnamese waters, valued at $400 million.

The real estate, financial services, and manufacturing sectors, which had been predicted to have many large deals, were indeed very robust. Keangnam Landmark Tower has been seeking investors to sell out its offices, apartments, and hotels for an expected sum of $800 million. Vingroup bought a 90 per cent stake in Hong Ngan Real Estate JSC valued at $60 million. HDBank sold a 49 per cent stake in HDFinance to Credit Saison. Semen Indonesia Group has been negotiating to buy a 70 per cent stake in a private cement company located in the north of Vietnam with a capacity of 1.8 million tonnes per year, valued at $70 million.

Both domestic and foreign investors have been very active in M&A activities. From the sellers’ perspective, this is to revamp the business and financial structures of the target company. From the buyers’ perspective, it is to expand and develop new markets and new projects. In the context of various free trade agreements signed between Vietnam and strong economies like South Korea, Japan, and Europe, as well as the Trans Pacific Partnership and ASEAN Economic Community, which are beginning to take shape, production and consumption in Vietnam is expected to soon increase sharply.

M&A activities in the next two to three years will continue to follow a trend of restructuring enterprises and changing the growth model of the Vietnamese economy, after the negative impacts of economic slowdown and the excessive growth of credit in 2010-2011. Major engines further stimulating M&A activities in the near future are stronger macro-economic foundations, bilateral and multi-lateral FTAs between Vietnam and its business partners, government polices to hasten the process of restructuring the banking system; equitisation of SOEs; further liberalisation of the prices of necessities such as electricity, water, and gasoline; and relaxation of foreign ownership restrictions in public companies and housing in Vietnam. The sectors expected to see robust M&A activities in the next few years include food & beverage, retail, banking and finance, real estate, food processing, manufacturing, energy, and logistics infrastructure, as demand remains high and stable from both buyers and sellers, coupled with favourable macroeconomic factors, policies and regulations, which are catalysts for the success of M&A deals.

As in 2014, M&A  flows in 2015 are predicted to still come mainly from Asian investors in Thailand, Malaysia, and Japan. Anticipating this trend, VPBank Securities (VPBS) has been working hard to support a Vietnamese energy company in finding an investor and selling a stake valued at $25 million to a Malaysian corporation; and in negotiating with a Japanese company in the food processing sector to help another domestic firm sell a stake for $35 million. VPBS has many advantages in providing advisory services for cross-border M&A deals, derived from direct relationships with potential international investors and close contacts with professional international M&A advisors, as well as its position as the exclusive Vietnamese member of IMAP – a leading global M&A network in 40 countries. Founded in 1973 by M&A consultants in the US, IMAP has grown into a coalition of reputable consulting firms in the Americas, Europe, Asia, the Middle East, and Africa, focusing on M&A advisory service for medium-sized enterprises with values up to $500 million. In 2013, IMAP ranked 5th in the world in terms of the number of closed transactions valued up to $200 million, with 196 deals, surpassing one Big4 firm and many other global investment banks. In closed transactions valued from $200 million to $500 million, IMAP ranked 8th globally, with 198 deals. Last year, members of IMAP successfully closed 228 transactions with a total value of $7.5 billion.

One factor expected to stimulate M&A activities in Vietnam is the government’s policies of restructuring SOEs through the divestiture of assets in non-core sectors or through equitisation. With policies allowing investors to hold large, even controlling shares in SOEs, more M&A opportunities for both foreign and domestic investors are on the horizon. VPBS has quickly adapted to this trend to advise on equitisation transactions and IPOs, and to arrange strategic investors for large scale SOEs in the infrastructure, construction, and construction materials production sectors. For example, in 2015, VPBS successfully advised the equitisation and IPO of Infrastructure Development and Construction Corporation (LICOGI), with a transaction value of VND200 billion ($9.3 million) and a subscription rate of 108 per cent. VPBS has been advising a large state owned corporation in selling a controlling stake to a foreign strategic partner, which has already attracted the interest of foreign investors. VPBS also successfully advised in the divestiture of the financial sector business of Vietnam National Coal-Mineral Industries Corporation, a transaction with a capital size of VND1 trillion ($46.5 million) helping the buyer gain a large and stable customer base for developing consumer finance services, which are currently growing quickly in Vietnam.

With nine years’ experience in investment banking advisory services and various large M&A deals – including cross-border transactions – successfully closed, together with highly skilled and professional advisors and an ever-expanding network, VPBS’ M&A advisory services are rising to a new level.

VPBS is ready to take advantage of all the promising M&A opportunities that are coming in the next few years, which, between 2015 and 2018, according to the Vietnam M&A Forum’s research team, are estimated at more than $20 billion.

Bac Giang green lights Suoi Mo tourism area

The Bac Giang Provincial People’s Committee has issued Decision No. 309/QD-UBND approving the plan for the Suoi Mo tourism area in Luc Nam district to 2030.

The tourism area is located in the east of Nghia Phuong commune in Luc Nam district and will feature spiritual tourism as well as an eco-resort. Tourist numbers are estimated at 160,000 by 2020 and 650,000 by 2030.

It will also include a festival area, a semi-wild animal feeding area, the Thum Thum Waterfall, a camping area, the Middle Temple, the Upper Temple, and the Lower Temple, and a resort and hotels.

To ensure convenience and safety for tourists, local transportation will change to specialized vehicles to carry tourists, following set itineraries. The project will continue with the expansion of public markets and build a new market and a business center, a health center, food areas, and souvenir shops.

According to the Director of the Bac Giang Department of Culture, Sports and Tourism, Mr. Nguyen The Chinh, total revenue from tourism activities in the province was VND190 billion ($8.9 million) in 2014 and is estimated to reach over VND260 billion ($12.2 million) this year. Tourist numbers are to be around 408,000, for growth of 23.8 per cent against 2014.

“Despite the low revenues and tourist numbers, tourism development has been positive in the province,” Mr. Chinh said. “In 2020 we expect to welcome 1 million tourists.”

Businesses propose citywide sale of gasoline E5 by November

Businesses have proposed the Ho Chi Minh City People’s Committee to implement a citywide sale of ethanol gasoline E5 by November 30 at a meeting with the city’s Department of Industry and Trade on Tuesday.

Department deputy director Le Ngoc Dao said that after seven month pilot distribution of the bio blend, it has been available at 55 filling stations with an average consumption level of 4,523 cubic meters a month, accounting for 3 percent of total petrol output supplied in the city.

The number of stations filling gasoline E5 is limited compared to those selling traditional petrol, she said.

The most difficulty has been from popularization issues, aiming to mobilize residents to change their long habit of using traditional gasoline into filling the new fuel, according to the department.

On the other hand, relevant ministries and agencies have lacked incentives and specific guidance for the blend’s distribution and consumption. Most filling stations are of small scale with insufficient area to install gasoline E5 pumping facilities.

The department said it would propose the Ministry of Industry and Trade to issue guidance documents and incentives to promote the blend consumption.

Otherwise, it would also suggest the city People’s Committee to make proposals to the Government on assistance polices and tax, fee and percentage reduction so as to further lower gasoline E5 prices.

Director General of Saigon Petro Dinh Van Sang said that the quality of gasoline E5 is not inferior to that of mineral fuel. However the blend is priced only VND500-1000 a liter lower than A92 and A95 petrol making it unattractive to consumers.

On the other hand, authorized agencies should make petrol distribution synchronous. Specifically, they should instruct all filling stations in the city to stop selling gasoline A92 and only provide E5 by November 30 to get results as expected in the bio gasoline consumption policy.

Poultry, livestock industry face disaster from TPP

The Vietnam Centre for Economic and Policy Research (VEPR) said the poultry and livestock industry will be hardest hit by the Trans-Pacific Partnership Agreement (TPP).

Nguyen Duc Thanh, head of the VEPR, said animal feed and medicines are imported, and farms in Vietnam are mostly household-sized and cannot compete on the global stage.

Chicken meat and pork prices in Vietnam are higher than other countries.

Thanh said that even with a 20 percent tax on imported meats, competition against domestic producers was still at an advantage, and the local poultry and livestock industry might disappear if import taxes were removed.

Statistics from the Department of Livestock, under the Ministry of Agriculture and Rural Development, showed that in the first five months of 2015, Vietnam imported 2,032 tonnes of pork, up 46,6 percent on a year earlier.

Tong Xuan Chinh, deputy head of the Department of Livestock, said, "Some industries will enjoy opportunities while others will face challenges during the integration process. The ministry is prepared to face the challenges with suitable policies."

NFSC report points out major challenges towards year-end

Exchange rate volatility and lost budget revenue are two major challenges for the economy towards the year-end as pointed out by the National Financial Supervisory Commission (NFSC) in a recent report.

According to the report, the exchange rate between the U.S. dollar and Vietnam’s dong currency is under pressure due to rising demand for machinery, equipment and material imports as economic growth has led enterprises to expand operations.

An interest rate spike by the U.S. Federal Reserve would cause indirect foreign investments to be pulled out of emerging market economies, including Vietnam, though the impact on Vietnam is not big. The appreciation of the greenback also piles pressure on the exchange rate.

However, the report said the forex market remained stable and the dong-dollar exchange rate mainly stayed at VND21,805-21,815 in the January-July period.

The stable forex market was credited to the central bank’s consistent policy to control the exchange rate and its quotation of VND21,820 per U.S. dollar supported market stability.

The balance of trade improved considerably in the last two weeks of June and June’s trade deficit was only US$140 million, lower than the previous estimate of US$700 million.

The economy is also backed by incoming remittances estimated at US$13-14 billion this year and FDI disbursements of US$6.3 billion in January-June, a 9.6% increase against the same period last year.

According to the commission, liquidity at credit institutions was stable, except for some banks being restructured. The loan-to-deposit ratio (LDR) slightly picked up from last year’s 83.3% to 84.7% in May.

The banking system was also in better shape. Credit had grown 7.32% as of July 20 compared to late last year, much higher than the 3.15% in last year’s same period. Net profit growth of 14.91% helped credit institutions with more risk provisions.

Bad debt declined from 3.81% in March to 3.15% in May, and is expected to drop to below 3% by this October, according to the commission.

July’s issuance of Government bonds just met 34% of the year’s target and G-bond sales were still lower than targeted.

Investors bought about 63.8% of the G-bonds put up for sale last month, the highest proportion since last March. Bond coupons stayed high, at 6.4%, 6.7% and 7.65% for five-year, ten-year and 15-year bonds respectively.

By July 15, budget collections had met 52.3% of the year’s target, lower than the 57.3% recorded in the same period a year ago. Falling oil price is the main reason for the lower budget revenue and collections from crude oil dropped by 32.5% year-on-year.

However, total budget revenue is expected to hit the target thanks to collections from domestic sources up by 15.1% in the period and forecast to keep rising in the five final months of the year.

The commission projected gross domestic product can grow 6.4% in the January-September period and 6.5% in all of 2015.

Public investment projects may take PPP form

Public investment projects using state budget funds or government bonds will likely be allowed to be implemented in the form of public-private partnership (PPP).

According to a Ministry of Planning and Investment-drafted circular guiding the PPP Decree No. 15 issued in February this year, a public investment project to build, renovate or commercially operate infrastructure facilities, supply equipment or provide public services might be transformed into a PPP one.

However, in addition to the conditions set in the PPP decree, the project must satisfy some other requirements. Firstly, the project must show prospects for investment capital recovery. Secondly, the project owner must have available land for allocation to investors as payment for the project or the project could be transferred to a domestic or foreign investor for continued implementation.

The draft goes on to stipulate the form of BOT contract or another similar contract form would apply if the project shows possibilities for capital recovery and profitability once assigned to a private investor.  

Meanwhile, the form of BT contract would apply in case the ministry, sector or local administration being the project owner may arrange and allocate land to the investor for implementation of another commercial project as part of the PPP arrangement. In both cases, the project owner will either withdraw the whole state capital amount already invested in the project or use it for further implementation of the project.

Experts believe that together with other PPP regulations, the draft circular, once approved, would be a step forward in promoting the PPP model in the country and reducing burdens on the state budget in development investment.

New policies to develop the pharmaceutical industry

The Ministry of Health has recently introduced a draft law on pharmacy which is expected to help address current shortcomings in management of drugs while boosting the development of the pharmaceutical industry.

The 98-article draft, which would replace the 2005 Law on Pharmacy, proposes four policies on state management of the pharmaceutical sector.

First, it is necessary to ensure sufficient supply of drugs of good quality and reasonable prices in conformity with disease patterns to meet people’s heath care demand as well as security, national defense, natural disaster and epidemic prevention and control and other urgent requirements.

Second, the State would allocate budget capital while raising funds from other sources to boost the manufacture of generic drugs, vaccines, herbal medicines and pharmaceutical chemicals.

Third, domestically manufactured drugs would be prioritized for use in public hospitals and national health programs as well as in state budget-funded or health insurance fund-covered drug procurement plans.

Finally, drugs should be used in a reasonable, safe and effective manner, while clinical pharmacy and pharmacovigilance activities would be promoted, focusing on the training and retraining clinical pharmacists, thus contributing to improving the quality of medical examination and treatment services.

The draft devotes one chapter (Chapter II) specifying measures and policies to develop the pharmaceutical industry.

Accordingly, investment projects to manufacture active pharmaceutical ingredients and excipients from domestically available materials, generic drugs, vaccines, biological products or herbal medicines; to nurture medical plants or animals; or to conserve genetic resources as well as rare and precious species of medicinal plants and animals would be entitled to tax, land and credit incentives.  Besides, projects on research into and manufacture of generic drugs, vaccines and preventive and curative biologicals would also receive investment supports in the terms of access to financial sources, human resource training and technology transfer, among others.

The draft law is expected to be passed by the National Assembly at its 11th session scheduled for March next year.-

Ministries and localities no longer allowed to set business conditions

A number of tough measures would be taken to strictly control the imposition of investment and business conditions by ministries, sectors and local administrations.

This is one of the most significant contents of two draft decrees guiding the 2014 Investment Law and the 2014 Enterprise Law.

Under the draft decree guiding the Investment Law, the Ministry of Planning and Investment (MPI) would be the only agency that is competent to table proposals for revising the Investment Law regarding sectors and trades subject to conditional investment to the Government for consideration and submission to the National Assembly for approval.

Other ministries and sectors, of course, may voice their opinions. But they would be required to send their proposals to the MPI, enclosed with documents analyzing the necessity and objectives and assessing the reasonability and feasibility as well as impacts of the revision on state management and investment and business activities of related stakeholders.

Similarly, when recommending the modification or supplementation of existing regulations on investment conditions or imposition of new ones, ministries and sectors would have to explain about the necessity, reasonability and feasibility of their recommendations.

Another matter of concerns is the form of business conditions. Reality show business conditions imposed by ministries, sectors and local authorities may take various forms. Therefore, to prevent ministries and localities from bending the law, the draft decree specifies that all types of license, certificate of eligibility, practice certificate, professional liability insurance certificate, written certification, etc., as well as requirements, criteria and conditions which do not require written certification or approval but must be satisfied by investors would be considered business conditions.

In addition to the aforesaid regulations, under the draft decree guiding the Enterprise Law, all business conditions already set under circulars, joint circulars, decisions and other legal documents of ministries, ministerial-level agencies and People’s Committees at all levels would be removed as from July 1, 2015, the effective date of the 2014 Enterprise Law.

Seven-month overspending estimated at 4.6 billion USD

Budget overspending reached an estimated 100.7 trillion VND (4.6 billion USD) in the first seven months of this year, equal to 44. 5 percent of the year’s budget estimates, the Ministry of Finance said on August 5.

Total revenues in the first seven months were 544 trillion VND or 59.8 percent of the year’s estimates, up 6.6 percent against the same period. Of which 404 trillion VND came from domestic revenue and the rest from import-export activities.

In the period, the country spent 645.3 trillion VND, or 56.3 percent of the year’s estimates, representing an 8.1 percent increase from last year.

To compensate for the over-expenditure, 114.5 trillion VND worth of government bonds were issued this year to July 25.

BIDV's assets 85 times higher than in 1995

The Bank for Investment and Development of Vietnam's (BIDV) total assets rose 85 times from 8.7 trillion VND (399 million USD) in 1995 to 730 trillion VND (33.4 billion USD) in 2015.

This dramatic increase in assets made it one of the largest banks in Vietnam.

Figures released at a conference on BIDV, "20 years of changes in commercial banks: Development and Integration," held in Hanoi over the weekend, showed that the bank's mobilised capital increased 337 times from 1.7 trillion VND (77.9 million USD) to 574 trillion VND (26.3 billion USD); its credit rose 100 times from 5.3 trillion VND (243 million USD) to 535 trillion VND (24.5 billion USD), while its charter capital jumped from 247 billion VND (11.3 million USD) to 31.4 trillion VND (1.4 billion USD).

The bank's pre-tax profit also rose from 221 billion VND (10.1 million USD) to 6 trillion VND (275.2 million USD) after 20 years of transition into the commercial bank model.

By the end of 2014, the bank posted a high growth rate with return on equity of 14.4 percent, return on assets of 0.8 percent and a Capital Adequacy Ratio of more than 9 percent.

It has contributed 12 trillion VND (550.46 million USD) to the State budget so far.-

HCM City hopes to open Tan Cang – Tan Phu port in early 2016

The People’s Committee of Ho Chi Minh City has requested the municipal Department of Transport and other stakeholders speed up land clearance for a road leading up to Tan Cang – Phu Huu Port in District 9 in order for the port to start operation in January 2016.

To facilitate the port’s operation, the city’s People’s Committee also asked Urban Traffic Management Board No. 2 and contractors to hasten the progress of Rach Chiec 2 Bridge on the east-west beltline towards putting it into use in the fourth quarter of this year.

District 9 will be in charge of land clearance for a 19.12-hectare land lot next to the port and land use right of the land to the Saigon Tan Cang Corporation to build a container warehouse.

In addition, the committee requested the Ministry of Transport approve the construction of 200 metres of additional quay and upgrade the existing 320 metres of wharves in the prot, which will allow the port to accommodate vessels up to 40,000 DWT.

The city is aiming to establish a system of ports with a total quay length of 2 kilometres to handle 120-150 tonnes of commodities between 2018 and 2020.

Ports in Ho Chi Minh City have welcomed over 2.6 million TEUs of containers in the first half of 2015, 70.3 percent of which—or roughly 1.8 million TEUs—were handled in Cat Lai Port, a year on year increase of 10 percent.

Once the Samsung Electronics Ho Chi Minh City Complex (SEHC) is completed, it is expected to significantly boost the amount of commodities going through the ports, making the early operation of Tan Cang – Tan Phu more necessary.

Workshop seeks to promote tourism quality

Nearly 100 representatives from travel agencies operating in Ho Chi Minh City are participating in a workshop to improve tourism in Vietnam.

The event, taking place from August 5-7, was organised by the Vietnam National Administration of Tourism (VNAT) in collaboration with the Saigon College of Arts, Culture and Tourism (Saigonact) and the US University of Arizona.

At the workshop, participants will focus on festival and event management, marketing for resorts and entertainment services and E-marketing for tourism.

Additionally, experts from the University of Arizona are exchanging experiences and giving practical suggestions related to tourism in Vietnam.

Addressing the event, Deputy Director General of VNAT Ha Van Sieu said the workshop contributes to improving the quality of human resources in order to meet the increasing demands of the tourism industry

Stronger efforts required to tackle cumbersome procedures

Ministries and sectors have to make drastic moves to streamline administrative procedures and apply information technology to help Vietnam’s business climate indexes reach or surpass ASEAN national averages of Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Deputy Prime Minister Nguyen Xuan Phuc made the request at a meeting of the Government’s Steering Committee for Administrative Reform in Hanoi on August 5.

Participants reviewed that in the first half of 2015, the Government, ministries and sectors simplified 4,431 of the 4,723 administrative procedures, accounting for 93.8 percent.

While stepping up the implementation of the ASEAN single-window mechanism, the Ministry of Finance also coordinated with the Ministry of Transport to officially carry out the national single-window mechanism at five international seaports in Hai Phong city, Quang Ninh province, Da Nang city, Ho Chi Minh City and Ba Ria – Vung Tau province.

The national mechanism was also deployed in about 50 percent of district-level localities nationwide. Information technology was widely applied in handling procedures and the Ministry of Industry and Trade piloted the online granting of certificates of origin.

The General Department of Vietnam Customs also expanded the application of the national mechanism. As a result, the time it took businesses to pay taxes in the first six months was cut by over 50 hours from 167 hours down to below 117 hours per year, surpassing the Government target of 121.5 hours.

At the meeting, the Steering Committee pointed out that some agencies lack appropriate interest levels in administrative reform. Meanwhile, many officials and civil servants are scared of being held accountable, undermining their creativity and initiative.

Deputy PM Phuc, who is also Head of the committee, ordered ministries, sectors and localities to raise the sense of responsibility of the heads of all-level State administrative agencies for administrative reform, enhance inspections and strictly deal with officials and civil servants who create obstacles for citizens and businesses while performing duties.

Administrative procedures must be standardised and popularised while procedure handling outcomes need to be published online, he added.

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