Dataline 10 (2012) by Department of Trade and Industry

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07 May 2012 1

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07 May 2012 Vol. 16, No. 10

A bi-monthly digest of global and domestic industry trends and developments. Published by the Trade and Industry Information Center, Department of Trade and Industry  Manila, Philippines Tel. (632) 895.3611  Fax (632) 895.6487  To subscribe, email: publications@dti.gov.ph Online: http://www.dti.gov.ph

In this issue Focus PHL economy on target Inside DTI 1. SB Corp. remits P1.4B 2. OSC designated as DAO

Business Alert 1. Competitiveness councils eyed for more regions 2. IPOPHL protects local product branding 3. PHL urged to invest in Halal tourism 4. Palace extends zero duty on capital equipment of BOI-registered firms

Good News, Philippines! 1. P1.5-B investments to pour in ARMM 2. PHL 4th most optimistic Consumer News 3. BPO, food chains continue to grow 1. Consumer confidence improves in Q1 2. Eco-labeling MSME/OTOP News 1. 2 Ormoc MSMEs rake P2.8M Feature 2. Star awards for MSMEs on DTI, DOE award LPG Bagwis Seal 3. DTI partners with LGUs of Excellence in developing local tourism and livelihood ASEAN Watch 4. E-Kawayan Factory soon to operate 1. Southeast Asian, European trade in Alaminos City ministers back deal 5. Access to global technology 2. DTI calls on Korean firms to invest for MSMEs development pushed in priority industries 3. WTO invitation recognizes PHL’s transparent system of procurement Statwatch What’s New?

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Focus PHL economy on target

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he Philippines is on track in achieving 2012 growth target on the back of encouraging economic developments, Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said. “This year will be a very good year for us and the DTI is at a very optimistic range among everybody in terms of our projected GDP (gross domestic product) growth of over 7% this year,” he said. He said export numbers in the first quarter of the year showed that the government is on track in hitting the goal, adding that government spending is up over that of last year which provided a boost to the economy. Inflation, he said, has been very benign. “The inflation numbers for the first three months of the year, pegged at 3.1%, are much better than last year’s numbers. This is the best situation,” he said. Business optimism, he said, is high and local businesspeople are also positive, with the stock market reflecting such confidence. He said DTI is meeting with prospective investors and expects this year’s total investments to overshoot last year’s record of P750B. Foreign investments, particularly from Japanese companies who have expressed interest in doing business in the Philippines, are expected to materialize and bring growth to the economy.

During the first three months of the year, inquiries had been made by executives of big companies from Japan. The Japanese Chamber of Commerce and Industry of the Philippines (JCCIP) brought a high-level delegation including the chairmen of big Japanese companies, such as Toyota, Mitsubishi, Mitsui, and Toshiba. The Japanese companies were eyeing expansion and some are looking for entirely new businesses. “Very strong interest in the Philippines is a combination of several factors. The first is the good governance of the Aquino administration. That is not an exaggeration. Good governance and the anti-corruption drive are attracting investments. We have seen a lot of investments going our way,” Domingo said. Compared with the country’s neighbors, the Philippines is highly competitive because local labor cost remains low and the productive labor force gives the country’s competitiveness a boost, he said. Business registration, he added, has been made much easier with the launch of the Philippine Business Registry (PBR) program, which cuts red tape. On the consumer front, Domingo said prices of commodities have been generally stable. Weekly monitoring of basic and prime commodities also showed that prices of such goods were most stable during the first three months of 2012. (BMI 04/20)

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Inside DTI 1. SB Corp. remits P1.4B

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he Small Business Corporation (SB Corp.) has remitted to the national government a total of P1.4B in dividends over a period of 20 years, equivalent to more than four times the initial P300-M investments made by the government to the Corporation through the Guarantee Fund for Small and Medium Enterprises (GFSME). GFSME was merged with SB Corp. in 2001 and excluded the over P360-M dividends of the former GFSME to its mother agency. SB Corp. released P887.8M in direct payments through taxes, guarantee fees, and dividends and P483M in indirect payments through charges in borrowings and withholding taxes on placements.

2. OSC designated as DAO

he Department of Trade and Industry’s (DTI) Office of Special Concerns (OSC) has been designated as the Development Assistance Office (DAO) as part of the Department’s reorganization to further achieve effectiveness and efficiency of its mandate. Under Department Order (DO) No.12-18 Series of 2012, DAO has been instructed to formulate and ensure the implementation of the DTI’s Development Cooperation Framework to strengthen the agency’s resource generation efforts.

Good News, Philippines! 1. P1.5-B investments to pour in ARMM

ew businesses from local and foreign investors are expected to enter the Autonomous Region in Muslim Mindanao (ARMM) and bring into the region some P1.5B in investments. Mindanao Development Authority (MinDA) Chairperson Luwalhati R. Antonino and the ARMM

This forms part of SB Corp.’s contribution to the government’s coffers in support to its revenue generation efforts and fiscal consolidation program. For 2011, SB Corp. remitted a total of P 234.8M in taxes and fees. This included forex risk cover fee of P76.1M, guarantee fees amounting to P18.9M, withholding taxes on placements at P21.4M, and taxes and licenses amounting to P11.7M. SB Corp. continues to be the country’s third biggest source of financing to micro, small, and medium enterprises (MSMEs) with loan releases reaching up to P41B, supporting more than 85,000 microenterprises through 150 partner financial institutions.

The move positions DAO as a platform for collaboration between DTI and multilateral, regional, and bilateral institutions, specifically on foreign-assisted projects (FAPs). The DO directed DAO, among others, to serve as the contact unit within the DTI to efficiently facilitate and coordinate FAPs with donor agencies, national agencies, local government units (LGU), private sector, and concerned implementing units within the Department.

government signed a Memorandum of Agreement (MOA) in Pasig City to facilitate investments in the region. “With the MOA, MinDA and the ARMM government shall establish a one-stop-shop that would facilitate business transactions faster, easier, and more convenient for prospective investors,” Antonino said.

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She said the partnership shall also embark on a strengthened campaign to promote and facilitate investments ranging from micro, small, and medium enterprises (MSMEs) to agro-industrial ventures.

Board of Investments (BOI)-ARMM Research Division Chief Larzon Santos said the BOI-ARMM, in coordination with MinDA, is in the process of helping the entry of two big companies in the region to further improve the banana plantation. (People’s Journal 04/11)

2. PHL 4 most optimistic th

ilipino businessmen are the fourth most optimistic on growth, a survey of Grant Thornton International Business Report (IBR) showed. The Philippines tallied just behind Peru, Brazil, and the United Arab Emirates (UAE), mainly buoyed by economic confidence among Filipino business leaders. Released by audit, tax, and advisory firm Punongbayan & Araullo (P&A), Grant Thornton’s local member firm, results showed that 82% of Filipino

3. BPO, food chains continue to grow

he robust business process outsourcing (BPO) industry has fueled growth for the country’s fast food chains located near BPO centers. Binalot Fiesta Foods, Inc. (BFFI), a chain of Filipino foods wrapped in banana leaves, is one such franchise business that enjoyed great success together with the industry. Binalot Chief Executive Officer (CEO) Rommel T. Juan said Binalot franchises located at the middle of the Ayala BPO hub are enjoying strong growth. “We are finding more commercial sites beside BPOs and we see the industry growing even more,” Juan said.

respondents are upbeat about the next 12 months. “The Philippines has done a good job of staying resilient despite the economic volatility around the world. Now that the global mood has also picked up, particularly among more mature economies, and the government seems determined to make up for its underspending last year, I think we’re on track to maintaining this upbeat outlook,” P&A President and Chief Executive Officer (CEO) Marivic Españo said. (MBI 04/11)

Considered as one of the fastest growing industries, the call center has been dubbed a sunshine industry by the government. The Philippines now has 1,140 call centers in 32 key locations, with the industry valued at an estimated US$150B. Last year alone, the call center industry grew by 21% to US$6.2B and had a work force of 344,000, overtaking India as the call center capital of the world. It is expected to double its growth to US$14.7B and expand employment to 816,000 by 2016. (PNA)

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MSME/OTOP News 1. 2 Ormoc MSMEs rake P2.8M

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assava cake products earned P2.8M for two micro entrepreneurs in Ormoc City in 2011 from joining One Town, One Product (OTOP) market fairs. The two MSMEs are Young Attitude and Yoyi’s that infused some twist in the ordinary cassava cake by mixing it with coconut sprinkled with cheese. The recent OTOP Congress for the Third, Fourth, and Fifth Districts in the province of Leyte resulted in identifying the challenges and opportunities faced by MSMEs in the area.

2. Star awards for MSMEs on

3. DTI partners with LGUs in developing local tourism and livelihood

OTOP coordinators proposed the acquisition of a retort machine for Ormoc to prolong the shelf life of local delicacies including suman (rice cake wrapped in banana leaves), binagol (sweetmeat made of native yam and stuffed in coconut shell), moron, and biko (rice cake). The Department of Trade and Industry (DTI) acquired a retort machine for Tacloban, which is also used by producers of native delicacies in nearby towns, making their produce last up to 200 days.

he Department of Trade and Industry (DTI)-Capiz is calling on micro, small, and medium entrepreneurs (MSMEs) in the province to join this year’s Star Awards search.

The SME Star Award supports and strengthens capabilities of MSMEs and recognizes outstanding enterprises which showed the most remarkable achievements in growing their businesses.

DTI-Capiz Provincial Director Ermelinda P. Pollentes said the Capiz Provincial Small and Medium Enterprise Development (SMED) Council is now accepting nominations for the SME Rising Star and the SME Star Elite Awards.

In 2011, Capiz Small Coconut Farmers Marketing Cooperative (CASCOFAMCO) was recognized as Capiz’s outstanding small enterprise by the DTI and the provincial SMED Council.

he Department of Trade and Industry (DTI)-Davao del Norte has partnered with the Department of Tourism (DOT)-11 to develop more tourism products and livelihood opportunities. The two offices have developed a program dubbed as Ugmad Komunidad (Nurturing Communities). Ugmad Komunidad has three broad strategies which include Tour DayNor, Dula Dabanaonon, and Learn and Earn. In the Tour DayNor strategy, tourism destinations and products shall be

developed through crafting effective promotions and marketing mechanisms. The Dula Dabanaonon shall establish sports grassroot training and development program and provide athletes proper exposure to higher athletic meets. The Learn and Earn strategy shall create livelihood enterprises that generate tourism and sports potentials. DTI-Davao del Norte Officer-InCharge (OIC) Engr. Vedastito C. Galvez said the One Town, One

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Product (OTOP) program of DTI is among the agency’s initiatives which shall be employed in the development of tourism products. “Along with the local government unit (LGU), we shall identify the widely available raw materials in the area. By then, we shall be able to evaluate

4. E-Kawayan Factory soon to operate in Alaminos City

he country’s first of its kind factory for engineered bamboos, dubbed as Hundred Islands E-Kawayan Factory, is soon to rise in Tangcarang, Alaminos City. The factory will complement the E-Kawayan Processing Center established in Boliney, Alaminos City, which currently manufactures bamboo desks for public schools. The factory was realized with the help of Philippine Amusement and Gaming Corporation (PAGCOR) that donated P31M through Alaminos City Mayor Hernani A. Braganza, using the E-Kawayan technology developed by the Mariano Marcos State University (MMSU) in Batac, Ilocos Norte. The funds from PAGCOR will also be used in acquiring modern equipment in bamboo processing, human resources development, establishment of bamboo nurseries

5. Access to global technology for MSMEs development pushed

he Department of Trade and Industry (DTI) emphasized the importance of global technology access for the development of micro, small, and medium enterprises (MSMEs). DTI Secretary Gregory L. Domingo said MSMEs would benefit most from the use of information technology (IT) and intellectual property (IP) system to develop

what tourism products we can develop. In doing so, we create livelihood opportunities for the residents in the area, less to mention the jobs that will be generated through the infusion of infrastructurerelated investments as tourism sites will be established,” Galvez said.

and plantation, and establishment of a tissue culture laboratory. The factory will process and transform bamboos into different and advance forms of products by shaping these into slats, glued and formed together to uniform desired sizes in producing log-like lumber that could be used as alternative for wood products. The factory is expected to induce massive bamboo planting in Pangasinan, providing farmers’ new source of living. The factory will also create additional business and job opportunities for the people. Department of Trade and Industry (DTI) Regional Operations and Development Group (RODG) Undersecretary Merly M. Cruz said the Hundred Islands E-Kawayan Factory is the only full-blown manufacturing plant for engineered bamboo in the country.

sustainable market share and gain competitive advantage for their product and services. During the forum on Access to Global Technology for innovation organized by Intellectual Property Office of the Philippines (IPOPHL), Domingo said the establishment of Innovation and Technology Support Offices (ITSOs) or Patent Libraries in 30 institutions across the country

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Business Alert 1. Competitiveness councils eyed for more regions

2. IPOPHL protects local product branding

07 May 2012 7

can serve as a platform for MSMEs in making their products and services more competitive.

about patents and inventions that have already been registered in the Philippines.

ITSOs, which were launched during the forum, will serve as knowledge centers where the public may access information

ITSOs can also provide skills training in drafting and prosecuting patents, and assist inventors on the management of their IP rights and commercialization of their inventions.

ompetitiveness councils are expected to be established in eight regions by midyear to further improve the country’s attractiveness as an investment site. “A province or region is the building block of national competitiveness, so we feel we need to have more local councils. You cannot build competitiveness on just two or three economic hubs alone,” National Competitiveness Council (NCC) Private Sector Co-Chairman Guillermo M. Luz said.

he Intellectual Property Office of the Philippines (IPOPHL) will work on the crafting of a bill that will provide protection of geographical indications (GI). “As of now, we have the intellectual property (IP) code, which gives little protection to GIs. We want a law that will accord protection to GIs by means of registration,” IPOPHL Bureau of Trademarks Division Chief Atty. Jesus Antonio Z. Ros said.

3. PHL urged to invest in Halal tourism

he Philippines is poised to benefit from developing halal tourism that caters to the global Islamic community, Philippine Ambassador to Malaysia J. Eduardo Malaya said. Malaya said the country could attract more tourists with a wide variety of

The participating regions are Western Visayas, Central Visayas, Eastern Visayas, Northern Mindanao, Davao, SOCCSKSARGEN, CALABARZON, and Central Luzon. NCC’s visit in Bicol last March resulted in the creation of the first regional competitiveness council. The addition of new bodies will help NCC in terms of data gathering in crafting strategies. (BWD 04/10/12)

The GI has been identified as a product originating in a region or locality, where a given quality, reputation or other characteristics are essentially attributable to its geographic origin. The eight pilot GIs include Dagupan bangus, Batangas barako coffee, Lumban barong, Bicol pili nuts, Guimaras fresh mangoes, Aklan piña cloth, Cebu dried mangoes, and Lake Sebu tinalak.

halal-certified foods and services that the tourism industry should be able to offer. The Departments of Trade and Industry (DTI) and Agriculture (DA) took part in Mihas, one of three simultaneous events in Kuala Lumpur this April as part of the Malaysia Halal Week 2012.

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“One of the things potential Malaysian tourists are asking is about Halal services such as a place to stay and eat,” she said.

4. Palace extends zero duty on capital equipment of BOI-registered firms

he 0-% duty on capital equipment, spare parts, and accessories imported by new and expanding enterprises registered with the Board of Investments (BOI) has been extended for another five years. President Benigno S. Aquino III signed Executive Order (EO) 70 on 29 March this year, noting that importation of capital equipment is one of the major cost burdens of business enterprises in their start-up operations. Under EO 70, machinery, equipment, spare parts, and accessories to be granted zero tariff are those that are “not manufactured domestically in sufficient quantity, of comparable

Consumer News 1. Consumer confidence improves in Q1

onsumer sentiment improved in the first quarter of 2012 as the overall confidence index (CI) increased to -14.7% from -20.6% in Q4 2011 and -23.1% a year ago, the Bangko Sentral ng Pilipinas (BSP) reported. On a given indicator, CI is computed as the percentage of households that answered in the affirmative minus the percentage of households that answered in the negative. From 23 January-08 February 2012, the BSP conducted a nationwide Consumer Expectations Survey (CES) in all regions of the country,

It is estimated that the market for halal tourism, particularly from increasingly affluent tourists from the Gulf States, could reach a growth rate of 14.6% per year, she said. (BMI 04/08)

quality and at reasonable prices…[and should be]…reasonably needed and will be used exclusively by the enterprise in its registered activity, unless prior approval of the BOI is secured.” The concerned enterprises are barred from selling, transferring or disposing of the capital equipment, machinery, spare parts, and accessories without prior BOI approval within five years from the date of importation. Erring enterprises will be liable to pay twice the amount of the duty foregone or P500,000, whichever is higher, without prejudice to other applicable penalties under EO 226. (BMI 04/07)

except for ARMM, with a total sample size of 5,978 households, of which 3,012 (50.4%) were from the National Capital Region (NCR) and 2,966 (49.6%) from areas outside the NCR. Respondents cited the following factors for their more favorable outlook: a. b. c. d. e. f. g.

more jobs available increase in the number of employed family members salary increases government policies on good governance improved peace and order sustained investment inflows appreciation of the peso

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2. Eco-labeling

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he Department of Trade and Industry (DTI) has launched the National Eco-labeling Program-Green Choice Philippines (NELP-GCP). Republic Act (RA) No. 9003, known as “The Ecological Solid Waste Management Act of 2000,” was launched to sustain the government’s aim to practice the fundamentals of sustainable development and to change the behavioral patterns in consumption and production that tend to misuse, abuse, and degrade the environment. The NELP-GCP encourages manufacturers of goods and providers of services to integrate environment-friendly measures in their business operations that will in turn provide consumers more green choices. The Green Choice seal, which guides consumers in identifying

Feature DTI, DOE award LPG Bagwis Seal of Excellence

he Department of Trade and Industry (DTI), together with the Department of Energy (DOE), awarded four deserving authorized liquefied petroleum gas (LPG) dealers with the Silver Bagwis Seal of Excellence for having met the criteria on compliance with fair trade laws, customer relations, and store management operations. For the pilot implementation, the scope of the program was limited within the National Capital Region (NCR). The set of winners were selected through careful deliberation and evaluation of the LPG Bagwis National Certification Committee (NCC), chaired by DTI Undersecretary for Consumer Welfare and Business Regulation Group (CWBRG) Zenaida C. Maglaya.

which products and services are more eco-friendly, is awarded to a good or service that has met the criteria for a particular category. The NELP-GCP has granted the Seal to products under the categories of laundry, detergent, cement, natural infill material, engine oil, ceramic tile, water-based paint, light emitting diode (LED) light, paper hand towel, tissue papers, induction lamp, electronic ballast, organic liquid disinfectant, and photocopier. The program has also developed and approved the environmental criteria for other products and services such as tissue paper, household batteries, engine oils, printing and writing instruments, paper envelopes, paper boards, inkjet and toner cartridges, desktop and laptop computers, multi-function printing devices, printers photocopiers, facsimile machines, liquid disinfectants, bath soaps, hair shampoos, and liquid dishwashing products.

Silver Bagwis Seal of Excellence Awardees Name

Establishment

Mr. Adelio Capco

Peter Pan Lpg Gas Dealer Handygas Corporation Ryan Mc Jim Enterprises Solargaz

Mr. William Choa Mr. Jimmy D. Mercado Ms. Nenita Chua

The DTI-DOE Bagwis Program aims to recognize authorized dealers of LPG tanks for household and industrial uses that are compliant with all trade laws implemented by both government agencies. It also encourages establishments to participate in government programs to become socially responsible and provide safe and quality products and services to consumers.

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ASEAN Watch 1. Southeast Asian, European trade ministers back deal

2. DTI calls on Korean firms to invest in priority industries

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rade ministers from Southeast Asian economies and the European Union (EU) have declared support for piecemeal efforts to close the Doha deal. The Association of Southeast Asian Nations (ASEAN) and its Western counterpart at the 11th Consultation meeting in Phnom Penh reiterated their commitments to the World Trade Organization (WTO).

he Department of Trade and Industry (DTI) encouraged Korean businessmen to take advantage of attractive incentives on the preferred activities under the 2011 Investments Priorities Plan (IPP).

“The ministers welcome the pragmatic approach currently employed to move the Doha Development Agenda forward in areas where progress is feasible,” the statement said. Commitments to the multilateral trading system came amid a sluggish global economy caused in part by the euro zone debt crisis. (BWD 04/18)

Preferred activities  Agriculture, agribusiness, and fishery  Creative industries and knowledge

based services  Disaster prevention, mitigation

“At the Board of Investments (BOI), our investment opportunities include 13 preferred activities or industry selection. If you invest in these activities, you will get incentives in these industries whether you will supply the domestic or foreign demand, or both,” said DTI Undersecretary for Trade and Industry Promotion Group (TIPG) Cristino L. Panlilio during the recent Philippine-Korea Development/Business Partnership Forum. Panlilio said exporters are entitled to incentives, which are mostly in terms of income tax holidays. They will enjoy zero income tax from four to eight years when they register with BOI.

and recovery projects  Energy  Infrastructure  Green projects  Mass housing  Motor vehicles  Public-private partnerships (PPP)  Research and development (R & D)  Shipbuilding  Strategic projects  Tourism

For their part, Korea TradeInvestment Promotion Agency Executive Vice President Sung-Keun Oh said economic cooperation between the two countries could bring “bigger prosperity.”

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3. WTO invitation recognizes PHL’s transparent system of procurement

07 May 2012 11

nvitation to the Philippines by the World Trade OrganizationGovernment Procurement Agreement (WTO-GPA) as an “observer” is a recognition of the country’s sound government procurement system, Department of Trade and Industry (DTI) Undersecretary for Industry Development and Trade Policy (IDTPG) Adrian S. Cristobal, Jr. said. Cristobal said the DTI is coordinating with the Department of Budget and Management (DBM) and the Government Procurement Policy Board as part of the plan to join the WTO-GPA that binds 28 countries. He said there is a need for regular reporting of government procurement procedures before being accepted into the WTO-GPA. The country’s government procurement system, he said, is 90% aligned with international standard, making it at par with those of other WTO-GPA member-countries. (BMI 04/02)

STATWATCH P750B Philippine total investments registered in 2011

P41B Small Business Corporation (SB Corp.)’s total loan releases to micro, small, and medium enterprises (MSMEs)

US$6.2B Revenue generated by PHL’s call center industry

P1.4B Revenues remitted by the SB Corp to the national government over a period of 20 years

344,000 Call center employees in PHL as of 2011

85,000 MSMEs who have been financially assisted by SB Corp.

1,140 Call center operating in PHL as of 2011

3.1% Inflation in PHL in Q1 2012

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Vol. 16, No. 1012

(A synopsis of selected book acquisitions at the DTI-TIIC library)

Author : Strietska-Illina, Olga/ Hofmann, Christine/Duran Haro, Mercedes Call Number : 2011

Author :

Ferro, Esteban

Call Number : 2011

02 000/06/FER/

00 000/03.06/STR/

This material examines the experiences of 21 developed and developing countries in adjusting their training provision to meet the new demands of a greener economy. It shows that skills development is critical to unlocking the employment potential of green growth, yet skills shortages are becoming an obstacle in realizing this potential. The report recommends that countries devise strategies based on well-informed policy decisions, social dialogue, and coordination among ministries and between employers and training providers.

This empirical study identifies the effects of signaling tools (foreign technical license, International Standards Organization (ISO) certification, and review of financial statements) and Internet tools (email and website) on export frequency and intensity of firms in developing countries.

Philippine Postal Permit No. PM-04-08

What’s New?

Legend: BWD - Business World BMI - Business Mirror People’s Journal Philippine News Agency

Title : Signaling and Technological Marketing Tools for Exporters

Title: Skills for Green Jobs: A Global View

Editor-in-Chief: Anne L. Sevilla Associate Editor: Vic S. Soriano Writers: Resty P. Par, Jam A. Hourani, Aye B. Salcedo, Elaine M. Lazaro, Emman R. Caleon Design/Layout: Ren C. NeneriaCirculation: Myrna V. delos Reyes To subscribe, email: publications@dti.gov.ph