Dataline 11 (2012) by Department of Trade and Industry

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21 May 2012 Vol. 16, No. 11

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 PEZA generates P2-T investments Inside DTI DTI-3 receives seal of excellence Good News, Philippines! 1. BOI sees P300-B investments 2. PHL: World’s best in business English MSME/OTOP News 1. UN offers multi-billion dollar market for MSMEs 2. DTI opens 3 OTOP Stores 3. AFFI eyes Mindanao MSMEs Business Alert 1. DTI keeps safegurard measure on steel angle bar imports 2. BSP sets minimun capital for trust business at P300M

Consumer News 1. DTI warns car owners on imported second-hand tires 2. Consumers cautioned from buying poison product Feature DTI launches ‘Diskwento Caravan’ ASEAN Watch 1. Certification program to cut red tape pushed 2. Duties adjusted under free trade deal Statwatch DTI Direct What’s New?

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Focus PEZA generates P2-T investments

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he Philippine Economic Zone Authority (PEZA) has generated some P2.03T in cumulative investments for the past 17 years, PEZA Director General Lilia B. de Lima reported during the 17th PEZA Anniversary and Investor’s Recognition Night. Notably, about a fourth of these cumulative investments, or P465B, were registered during the past 22 months of the Aquino administration. President Benigno S. Aquino III, who graced the event, called on investors in the special economic zone to expand their businesses in the Philippines. “The red tape that has for so long encumbered your operations has now been turned into a red carpet. And beneath all these is the firm bedrock that has become the calling card of my administration: No under-the-table deals. No graft, no corruption. Only hard work, service-oriented governance, and a level playing field for all who have come to invest,” Aquino said.

Inside DTI DTI-3 receives seal of excellence

he Department of Trade and Industry (DTI)-Region 3 was awarded last 18 April 2012 the Client Satisfaction Seal of Excellence Award, the highest rating to be conferred to a regional government office by the Civil Service Commission (CSC). CSC Chairman Francisco T. Duque III said the Citizen’s Service Center Seal of Excellence aims

Good News, Philippines!

1. BOI sees P300-B investments

These projects, which are engaged in various sectors, are already

he Board of Investments (BOI) is processing at least P300B worth of new investments for registration.

De Lima said PEZA’s export-oriented locators in 258 economic zones around the country employ 915,260 Filipinos. In terms of exports, the 2,700 PEZA locators, which account for 87% of the country’s total merchandise exports, have exported US$463B worth of merchandise. De Lima said PEZA’s 2011 investments went up by 41% over the previous year. For this year, the agency is confident of surpassing its 12-12-12 (in percent) growth target for investments, exports, and employment. The business community and PEZA locators have attributed PEZA’s success to its strict “no graft and corruption” policy. PEZA offers to its locators a competitive package of tax and fiscal incentives including income tax holiday (ITH), a 5-% tax on gross in lieu of all national taxes, tax and duty-free importation of capital equipment, among others.

to promote prompt, excellent, honest, and courteous government frontline service. The award is given to government agencies that have obtained the highest ratings in the report card survey conducted by the CSC as required by law specifically the Anti-Red Tape Act (ARTA) of 2007 (RA 9485).

in different stages of registration with the BOI and are completing documentary requirements. With these huge investments, the BOI is already certain to hit its P400-B investments goal this year.

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Department of Trade and Industry (DTI) Undersecretary for Industry Development and Trade Policy Group (IDTPG) Adrian S. Cristobal, Jr. said the BOI generated a total of 72 projects for the first three months of the year or 16.1% higher than the 62 projects in the same period last year. These projects are expected to create 8,622 jobs. Cristobal, who also serves as BOI Managing Head, noted the increase

2. PHL: World’s best in business English

he Philippines was named the world’s best in business English proficiency, even beating the United States, according to a recent study by GlobalEnglish Corporation. GlobalEnglish has released in early April the results of its annual Business English Index (BEI), the only index that measures business English proficiency in the workplace. For 2012, results showed that from 76 represented countries globally, only the Philippines attained a score above 7.0, a BEI level within range of a high proficiency that indicates an ability to take an active role in business discussions and perform relatively complex tasks. The Philippines, a country with one-tenth of the population of India, recently overtook India as a hub for call centers. Over 400,000 Filipinos are now employed in call centers, roughly 50,000 more than in India, the study said.

in foreign investments by 53.3% to P3.7B from P2.4B in the period. Thai investors accounted for the biggest share with P2.3B, followed by Japan with P893.6M. Investments in the real estate sector accounted for the bulk of investments with P5.7B followed by manufacturing with P5.3B, accommodation and food service with P3.7B, and electricity and gas with P2.8B.

GlobalEnglish noted that a country’s business English capability is an indicator of its economic growth and business success. The Philippines and Norway – the only two countries in the top five in both 2011 and 2012 – are improving their economies, based on the latest GDP data from the World Bank (WB). GlobalEnglish stressed that the 2012 BEI, which showed a lack of business English proficiency, is threatening the productivity of companies, industries and country-specific economies this year. (Yahoo! News 04/25)

Top 5 best countries for business English proficiency based on Global English’s 2012 BEI Country Philippines Norway Estonia Serbia Slovenia

Index 7.11 6.54 6.45 6.38 6.19

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MSME/OTOP News 1. UN offers multi-billion dollar market for MSMEs

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he United Nations (UN) offers multi-billion dollar opportunities for qualified local micro, small, and medium enterprises (MSMEs), an official of the United Nations Procurement Division (UNPD) reported.

Among the goods procured by the UN were food, pharmaceutical supplies, vehicles, computers and software, shelter and housing, telecommunications equipment, laboratory equipment, chemicals, and building materials.

“This is very important to recognize if you wish to do business with the UN. It is a market in itself, made up of a variety of organizational entities, each with its separate function and mandate. Because each organization has a different function, each entity also has its own characteristics and requirements,” UNPD Chief Toshio Mikami said.

The services, on the other hand, included security, outsourced personnel, engineering, construction, corporate, freight, printing services and equipment rental, consultancy, and telecommunication.

UN data showed that market volume (both goods and services) remarkably grew between 2006 and 2010, doubling in the last five years to US$14.5B from US$9.2B.

2. DTI opens 3 OTOP Stores

he Department of Trade and Industry (DTI) opened three outlets of One Town, One Product (OTOP) Stores in Cebu, Davao, and Clark to showcase locally-produced products for domestic and foreign buyers. DTI Regional Operations and Development Group (DTI-RODG) Undersecretary Merly M. Cruz said OTOP Store is designed to promote Philippine world-class products to tourists and domestic buyers in cooperation with private partners. OTOP Stores offerings  Bags  Crafts made from indigenous raw materials  Fashion accessories  Gift and decorative items  Handicrafts  Health and wellness products  Processed foods

DTI-11 Regional Director Marizon S. Loreto said MSMEs should take time to register and apply as UNPD supplier. “I’m sure that a lot of our MSMEs will qualify as suppliers to the UN considering their strong commitment to consistently deliver quality goods and services,” Loreto said.

OTOP Store sells 70% home region’s products while the remaining 30% are from other regions. The three stores are managed by the private sector: Cebu GTH Foundation, Inc. in Mandaue City, the Davao Ecocrafts in Davao City, and the PhilExport Region 3 in the Clark Freeport Zone, Pampanga. “This effort is a very good example of a public-private partnership (PPP). It took a lot of collaborative efforts from the private sector, providers, local government officials, national government agencies to make this project a success,” DTI Secretary Gregory L. Domingo said during the launch in Mandaue City, Cebu. “We are starting small, relative to our ambition. We conceptualized this project based on President Aquino’s good governance platform and inclusive growth, where all sectors

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of society must benefit from economic development. To achieve inclusive growth, we have to provide employment and generate business in the rural areas,” said Domingo. The DTI, through its agencies namely Bureau of Domestic Trade

3. AFFI eyes Mindanao MSMEs

he Association of Filipino Franchisers, Inc. (AFFI) has drawn up a list of activities for its first expo and exhibit this coming October for the development of Mindanao’s micro, small, and medium enterprises (MSMEs). “Beginning May, we shall embark on awareness campaigns touching base on stakeholders of the industry to inform them how entrepreneurship can help in pump-priming the economy of the region,” AFFI

Business Alert 1. DTI keeps safeguard measure on steel angle bar imports

o give the local industry more time to implement its adjustment plans and complete efficiency measures, the Department of Trade and Industry (DTI) has extended the definitive safeguard measure on imported steel angle bars.

“The DTI had reviewed the findings and recommendations of the Tariff Commission and found it to be of public interest to extend the said measure,” DTI Secretary Gregory L. Domingo said. Covering 10 March 2012 to 11 March 2013, the safeguard measure refers

2. BSP sets minimun capital for trust business at P300M

he Bangko Sentral ng Pilipinas (BSP) has set a P300-M uniform minimum capital requirement for banks seeking to engage in investment management activities (IMA) as well as trust and other fiduciary businesses.

(BDT), Product Development and Design Center of the Philippines (PDDCP), Philippine International Trading Corporation (PITC); and Regional Offices, intends to open more OTOP Stores all over the country in partnership with private sectors.

President and GMB Franchise Developers President Armando O. Bartolome said. A transient office is planned to be set up in Davao. “Among others, we shall take measures to curtail fly-by-night franchising firms and focus on the promotion of MSMEs in the country,” AFFI Chairman and Goto King Founder Teresa D. Laurel said.

to the slapping of duties on imported steel angle bars amounting to P3,901.08 per metric ton (MT). The safeguard measure will be reviewed yearly to determine if the duties are still needed. Under the law, a safeguard measure may be imposed for a maximum of 10 years. The World Trade Organization (WTO) Agreement on Safeguards also allows developing country-members like the Philippines to impose safeguard measures up to 10 years.

BSP Governor Amando M. Tetangco, Jr. signed Circular No. 756, which amends the BSP’s Manual of Regulations (MOR) pertaining to required capital and other requirements before engaging in the trust and IMA businesses.

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The circular clarified that the minimum capital requirement for IMAs of not less than P300M is the same in the 2011 circular which approved the creation of separate trust corporations from banks.

It also stated that a bank or financial institution should have an authority to engage in investment management activity in lieu of acting as trustee or administering any trust or holding property in trust or in deposit for the use of or in behalf of others.

The minimum capital requirement for spin-off trust corporations is set at P300M for companies with assets under management of P20B.

BSP Deputy Governor Nestor A. Espenilla, Jr. said other supplementary guidelines relating to trust corporations will be released. (MAB 04/28, TPS 04/29)

Consumer News 1. DTI warns car owners on imported second-hand tires

2. Consumers cautioned from buying poison products

he Department of Trade and Industry (DTI)-Davao has warned vehicle owners on reusing imported second-hand tires for failing to have safety certification mark licenses and import commodity clearance (ICC).

imported – it may expose users to danger.

“If it is not in the list of products that have Philippine Standards (PS) and ICC, it should not be sold to the public,” said DTI Senior Trade and Industry Development Specialist (STIDS) Paciente E. Cubillas, Jr., noting that the agency is monitoring if the tire products are sold in the region as – most of them

The law aims to protect consumers from possible hazards that imported used tires may cause.

Paciente said the Letter of Instruction No. 1086 issued in 1981 stated that the commercial importation of used tires is prohibited by law.

“The fact that these are banned, there is no test or quality check that is being done before such are sold to consumers,” DTI-11 Regional Director Marizon S. Loreto said.

o protect consumers from buying poison products, representatives from the Food and Drug Administration (FDA), Buklod Tao, and the EcoWaste Coalition recently conducted an on-the-spot screening of skin whitening products for mercury and other toxic metals.

Some of these were among the 50 brands already banned by the FDA for containing high levels of mercury that could pose imminent harm to the consuming public.

EcoWaste Coalition’s AlerToxic Patrollers bought 12 samples of skin lightening creams, mostly imported from China and Taiwan, from Chinese drugstores along Bustos St., Sta. Cruz, Manila and nearby areas.

“We laud the EcoWaste Coalition for their resolute action against health and environmental toxins in consumer products in support of the FDA’s mission,” FDA Director Dr. Suzette H. Lazo said, adding that consumers should be wary

The AlerToxic Patrollers had them analyzed using a handheld X-Ray Fluorescence (XRF) spectrometer.

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Feature DTI launches ‘Diskwento Caravan’

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of contraband cosmetics that could contain mercury and other chemical or bacterial contaminants as these products pose real health risks.

inflammation, itchiness, and tiny bumps, while repeated use can eventually damage the brain and the kidneys.

Echoing Lazo, EcoWaste Coalition Safe Cosmetics Campaigner Aileen Lucero warned that applying mercury-laden cosmetics onto the skin can cause serious dermal problems such as discoloration,

The U.S. Environmental Protection Agency has classified mercuric chloride, a mercury compound often used in skin bleaching products, as a “possible human carcinogen.”

he Department of Trade and Industry (DTI) launched the Diskwento Caravan-Balik Eskwela’ edition last 07 May 2012 at the DTI Main Building in Makati City to offer school supplies at discounted prices in time for the opening of classes in June. The ‘Diskwento Caravan’ was set to be implemented simultaneously this May in key cities nationwide. At least 25 companies have confirmed participation in the caravan, assuring the sale of school supplies, bags, uniforms, and shoes, along with other prime and basic commodities such as bread, sardines, cooking oil, processed meat, and detergent bar, at reduced prices. “The manufacturers promised to sell their products to as low as their

ASEAN Watch 1. Certification program to cut red tape pushed

epartment of Trade and Industry (DTI) Secretary Gregory L. Domingo called on other Association of Southeast Asian Nations (ASEAN) Economic Ministers (AEM) to support the ASEAN Self-Certification Program to make small and medium enterprises (SMEs) competitive during the recent 20th ASEAN Summit in Phnom Penh, Cambodia.

(The Mindanao Journal 04/24)

factory price, it will be a big help to our consumers,” DTI Secretary Gregory L. Domingo said. The DTI will intensify price monitoring of school supplies in the market to prevent unscrupulous traders from taking advantage of the expected influx of buyers. Except for crayons and pencils, Domingo said prices of school supplies, including bags and uniforms, should remain the same. Crayons, a petroleum-based product, and the wood-based pencil, are expected to go up from 10% to 20%. The ‘Diskwento Caravan’ has been a regular undertaking of the DTI since 2008, when it was launched as a nonwage benefit for wage earners and employees.

Self-certification is among the trade facilitation packages being pushed by the Philippines in ASEAN to benefit SME exporters. It is meant to streamline the certification processes of exporters when applying for preferential tariff treatment. ASEAN member states have committed to make the self-certification option available by 2012 in whatever form.

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The Philippines, Indonesia, and Laos are now finalizing the Memorandum of Understanding (MOU) to implement the trial test runs of self-certification in their respective countries while Singapore, Malaysia, and Brunei have already run a pilot project. The self-certification scheme likewise facilitates intra-ASEAN trade better by reducing the delays from the rejection of Certificate of Origin (CO) by customs authorities of importing parties. The CO is a document that attests the export in a particular shipment originated from a certain country. By 2015, ASEAN envisions an ASEAN Economic Community (AEC) with the following key characteristics: a single market and distribution base, a highly competitive economic region with equitable economic development, and a region fully integrated into the global economy.

2. Duties adjusted under free trade deal

he government has adjusted duty rates and reclassified tariff lines to comply with a free trade deal between the Association of Southeast Asian Nations (ASEAN) and China. Executive Order (EO) 72, signed by President Benigno S. Aquino III on 16 April, reduced the duties of items in the so-called sensitive list to 20%. National Economic and Development Authority (NEDA) Director-General Cayetano W. Paderanga, Jr. said the rates of items in the sensitive list “ are undergoing technical studies” as these are “sectors that will be materially affected and are not ready.” Meanwhile, items previously under the sensitive list that were transferred

STATWATCH No.1 Global ranking of the Philippines (PHL) in Business English Index (BEI) P2.03T Cumulative investments generated by the Philippine Economic Zone Authority (PEZA) for the past 17 years P465B PEZA-registered investments in the first 22 months of the Aquino administration US$463B Exports revenue generated by PEZA locators for the past 17 years P3.7B Foreign investments registered with Board of Investments (BOI) in Q1 2012 vs P2.4B in Q1 2011 915,260 Filipinos employed in the country’s economic zones 400,000 Filipinos employed in the country’s call center industry P300M Minimum capital requirement for banks seeking to engage in investment management activities (IMAs) as well as trust and other fiduciary businesses 8,622 Jobs to be generated by BOI projects in Q1 2012 72 BOI-approved projects 2,700 PEZA locators nationwide as of March 2012 258 Economic zones in the PHL

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to the “normal” track include pharmaceuticals, non-wired glass, semi-finished products of iron and non-iron steel, and flat-rolled products of iron and non-alloy steel. The normal track is based on a rate reduction schedule that will be implemented earlier than the deadline for the sensitive list. ASEAN and China had signed the Framework Agreement on Comprehensive Cooperation, on 04 November 2002. Subsequently, the Agreement on Trade in Goods was signed by the Economic Ministers on 29 November 2004.

What’s New? (A synopsis of selected book acquisitions at the DTI-TIIC library)

Title: Doing Business 2012: Doing Business in a more Transparent World Publisher : World Bank

Philippine Postal Permit No. PM-04-08

Call Number : 00 000/03.04.03/WB/ 2012 The publication investigates the regulations that enhance business activity and those that constrain it. It presents quantitative indicators on business regulation and the protection of property rights that can be compared across 183 economies – from Afghanistan to Zimbabwe – and over time. Regulations affecting 11 areas of the life of a business are covered: starting a business, dealing with construction permits, getting electricity, registering prosperity, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency and employing workers. The data are current as of June 2011.

Items with reduced rates under EO 72  Agricultural products  Motor vehicles  Articles for the packing of goods, plastics, linoleum, tableware, bed linens, and table linens

The original framework agreement allowed for trade in goods with China under the ASEAN-China Free Trade Agreement (FTA) among the ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) starting 2010, and with the “newer” ASEAN member states of Cambodia, Lao PDR, Myanmar, and Viet Nam, starting 2015. (BWD 04/25)

Title: ClimateSmart Trade and Investment in Asia and the Pacific: Towards a Triple-Win Outcome Author : Ratnayake, Ravi et al. Call Number : 45 000/11.05/RAT/ 2011 The publication presents a strong case for trade and investment in climate-smart goods and services, particularly climate-smart technologies. It discusses a holistic policy approach to promote trade and investment in climate-smart goods and services, including regional cooperation – all geared toward a triple win for economic growth, trade, and environment.

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DTI Direct* Call Center Report SUMMARY OF CALLS Month-on-month CALL TYPE

Apr

Business Name

1,980

Consumer Welfare

May

Jun

2,229 2,054

July

Aug

Sept

Oct

Nov

Dec Jan’12 Feb’12 Mar’12 April’12

2,020

2,250

2,398

2,017

1,874

1,458

3,665 2,741

2,784

2,182

532

732

715

637

741

812

712

670

966

742

860

653

670

Exports

Investments

MSMEs

Others

656

1,040

908

891

985

1,186

981

1,194

941

1,157 1,179

1,251

878

TOTAL

3,189

4,029 3,712

3,582

4,015

4,434

3,734

3,766

3,385

5,580 4,798

4,699

3,762

CUMULATIVE CALL TYPE

Jan-April’12

Business Name

% vs. Total

April 2012

Mar 2012

% Increase/ Decrease

11,372

60.36

2,182

2,784

-21.62

2,925

15.53

670

653

2.6

0.13

16.67

0.04

N/A

0.24

280

Others

4,465

23.70

878

1,251

-29.82

TOTAL

18,839

100.00

3,762

4,699

Consumer Welfare Exports Investments MSMEs

CALL RESOLUTION STATUS Jan-April 2012

April 2012 Endorsed - 25, 1%

Endorsed - 218, 1%

Resolved 18,621 99%

*The DTI Direct Call Center was established in November 2006 as part of the Department’s thrust to improve and simplify the delivery of its frontline services.

Resolved 3,737 99%

Legend: MAB - Manila Bulletin TPS - The Philippine Star The Mindanao Journal Yahoo! News Editor-in-Chief: Anne L. Sevilla Managing Editor: Vic S. Soriano Associate Editor: Resty P. Par Writers: 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