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20 October 2014 81
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20 October 2014 Vol. 19, No. 21
A bi-monthly digest of global and domestic industry trends and developments. Published by the Knowledge Managment and Information Service of the Department of Trade and Industry w Manila, Philippines w Tel. (632) 895.3611 w Fax (632) 895.6487 w To subscribe, email: publications@dti.gov.ph wOnline: http://www.dti.gov.ph
In this issue Focus PHL better off today with ongoing reforms Inside DTI 1. DTI, BOI step up presence in provinces 2. Investment ombudsman team created Good News, Philippines! 1. PHL moves closer to goal of moving to top-third of global competitiveness ranking 2. BOI reaps positive feedback MSMEs 1. DTI conducts food safety, traceability confab for MSMEs 2. DTI opens “Kalakal-CALABARZON” 3. DTI, CvSU launch coffee service facility
Business Update 1. DTI, NCC drafting bill to enhance PHL competitiveness 2. Public-private partnership to expand list of Next Wave Cities™ 3. BOI, FDA ink MOA on ease of doing business Consumer News 1. IPOPHL forms international alliances 2. Public told to trust accredited forwarders only Feature Creative industries showcased at DTI art fair ASEAN Watch 1. PHL to open more bilateral pacts 2. PHL, Viet Nam to strengthen trade ties 3. ASEAN beefs up trade repositories Statwatch
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Focus PHL better off today with ongoing reforms
Vol. 19, No. 21 82
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he ongoing reforms being undertaken by the government have improved the country’s competitiveness a lot, President Benigno S. Aquino III said before students of Boston College and the Filipino-American community during his recent four-day state visit to the United States (U.S.). The President cited developments in the economy, anti-corruption, and peace in Mindanao as key results of his Administration’s continuing reforms. Aquino said the average growth rate for the Philippine economy from 2006 to 2009 was at 4.35%, largely consumer-driven, and buoyed by remittances from overseas Filipinos (OFs). Since taking office in 2010, he said, his Administration has worked to foster sustainability by rebalancing the economy toward investments. “Since 2010, our economy has been growing at an average of 6.3%. Last year, we posted an economic growth of 7.2%, making us one of the fastest growing economies in our part of the world,” he said. The World Economic Forum (WEF) Competitiveness Report showed that the Philippines rose from 85th place in 2010 to 52nd in 2014, the biggest improvement by any country in that particular period.
Inside DTI 1. DTI, BOI step up presence in provinces
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he Department of Trade and Industry (DTI) and the Board of Investments (BOI) are expanding their services to the provinces to help sustain a favorable business environment around the country. “The DTI and BOI are continuously working to expand and upgrade their services to a broad range of local and foreign investors not just in Metro
Major credit ratings agencies Fitch, Moody’s, and Standard & Poor’s (S&P’s) upgraded the country’s rating for the first time to investment grade in 2013, reducing the cost of borrowing and boosted investors’ confidence in the Philippines. On anti-corruption drive, the President said a former Supreme Court Chief Justice was impeached and is facing charges in regular courts. A former President and three incumbent senators are also in detention, all of them facing charges of plunder, he said. On peace in Mindanao, he said permanent peace is already evident in Mindanao, with the submission of the draft Bangsamoro Basic Law to Congress after the Comprehensive Agreement on the Bangsamoro was signed in March this year. “Our achievements thus far are merely the beginning of a new era of transformation,” he said, noting that the country is at the threshold of sustained and positive change. The President visited the U.S. on 20 to 24 September to address a global summit on climate change organized by the United Nations (U.N.) and to sit down with business leaders to discuss investment and tourism potentials in the Philippines.
Manila and its nearby provinces but also countrywide,” DTI Investment Promotion Group (IPG) Undersecretary Ponciano C. Manalo Jr. said. Manalo said the BOI’s central office is closely supervising and continuously strengthening its extension offices, particularly in Visayas and Mindanao.
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The BOI currently has three extension offices in the cities of Cebu, Davao, and Cagayan de Oro covering the regions in the South. The extension office in Cebu covers the Visayas region while the extension offices in Cagayan de Oro and Davao cover Northern Mindanao and Southern Mindanao, respectively. “We have conducted a series of meetings in these extension offices for them to mirror the investment assistance services provided by BOI’s Investment Assistance Services Center (IACS) at its home office in Makati City,” Manalo said. The IACS provides vital, expanded, and upgraded services to a wide range of investors, and offers both frontline and after sales services to lure investors to locate or retain their investments in the country.
2. Investment ombudsman team created
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he Department of Trade and Industry (DTI) is banking on the creation of the Investment Ombudsman Team (IOT) to further boost investor confidence in the country among foreign and local investors. By virtue of Office Order No. 327, series of 2014 that took effect on 01 June, Ombudsman Conchita Carpio Morales created the IOT, and named Overall Deputy Ombudsman Melchor Arthur H. Carandang as its head. “Providing speedy action on investment-related grievances will help elevate the country’s global competitiveness ranking,” DTI Investment Promotion Group (IPG) Undersecretary Ponciano C. Manalo Jr. said. Board of Investments Investment Assistance Center (BOI-IAC) Executive Director Raul V. Angeles said the BOI and other attached agencies already met with the team to discuss the details of the said Office Order.
“We are expecting a lot of investors in the countryside that require staff work on investment promotion, facilitation and aftercare services at the local level,” Manalo added. Manalo also said the BOI recently conducted meetings with local government units (LGU), national government agencies (NGAs), and investment promotion agencies (IPAs) in provinces covered by its extension offices, particularly in Cebu, Davao, Misamis Oriental, and Zamboanga. “Our ultimate goal is to convert BOI investor services into a truly one stop action center and become the center of excellence in Asia,” Manalo said.
To date, the BOI already signed a Memorandum of Agreement (MOA) with the Department of Environment and Natural Resources Environmental Management Bureau (DENR-EMB), and is currently negotiating agreements with the Department of Agriculture (DA), Bureau of Customs (BOC), Food and Drug Administration (FDA), Housing and Land Use Regulatory Board (HLURB), and Securities and Exchange Commission (SEC). “In addition to these initiatives, the BOI will setup its One Window Network (OWN), a project that will enable investors to make electronic transactions with the agency,” Angeles said. At present, the BOI is working with the University of the PhilippinesInformation Technology Development Center (UP-ITDC) to design and develop the website and customer relationship management (CRM) system for the project.
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Good News, Philippines! 1. PHL moves closer to goal of moving to top-third of global competitiveness ranking
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he Philippines jumped seven notches to 52nd place from 59th last year in the latest results of the Global Competitiveness Index released by the World Economic Forum (WEF). PHL’s best performing areas WEF’s Global Competitiveness Index 2013-2014 n
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Macroeconomic Environment (up 14 from 40th to 26th) Business Sophistication (up 3 from 49th to 46th) Innovation (up 17, from 69th to 52nd) Higher Education and Training (up 3 from 67th to 64th) Institutions (up 12, from 79th to 67th) Technological Readiness (up 8 from 77th to 69th)
Source: National Competitiveness Council (NCC)
Citing the country’s gains of a total of 33 places from 85th in 2010, National Competitiveness Council (NCC) Private Sector Co-Chairman Guillermo M. Luz said this latest report brings the country closer to the government’s goal of moving from the bottom-third of world rankings in 2010 to the top-third by 2016.
weaknesses. Over the next two years, we will be focusing on the areas which require urgent attention such as infrastructure and primary health and education, and others,” Luz said. During the WEF on East Asia held in Manila last May, WEF Founder and Executive Chairman Klaus Schwab cited the progress the country has made on several parameters of competitiveness and was impressed by reforms that have been achieved and will be achieved. The Global Competitiveness Report is an annual publication that provides a comprehensive picture of the productivity and competitiveness of a country by gathering statistical and survey data on over 100 factors grouped into 12 pillars or categories. The Philippines is now ranked 5th of nine economies in ASEAN and is at the cusp of breaking into the top third of global rankings. The country still follows Singapore, Malaysia, Thailand, and Indonesia but recorded the largest gain in ASEAN this year.
“The report gives us a good diagnostic tool for identifying our strengths and
2. BOI reaps positive feedback
he Board of Investments (BOI) established the Strategic Investors Aftercare Program (SIAP) to ensure sustained interaction with existing investors and create more business opportunities in the Philippines.
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about the efforts of BOI’s SIAP to establish strategic and long-term business partnership with them,” Department of Trade and Industry Industry Promotion Group Undersecretary (DTI-IPG) Ponciano C. Manalo Jr. said.
SIAP is a proactive program designed to create a high-quality, trust-based working relationship between BOI and existing investors in fostering an enabling business environment in the country.
From January to June this year, the BOI’s investor aftercare team gathered a 96.5-% satisfaction rating from 42 companies it visited.
“We appreciate the optimistic feedback from a number of investors
In these regular visits to registered companies, the BOI provided investors with updates on investment
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policies and sector developments, and conducted interactive client feedback mechanism by encouraging investor’s participation through suggestions. “We were surprised that a program like this actually exists. We hope the BOI will be able to help more investors in the future,” 5M Star Builders Incorporated President and General Manager Rodolfo P. Derecho said.
MSME News 1. DTI conducts food safety, traceability confab for MSMEs
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he Department of Trade and Industry (DTI) conducted a seminar on Food Safety and Supply Chain Traceability for local micro, small, and medium enterprises (MSMEs) in preparation for the Association of Southeast Asian Nations (ASEAN) integration. The seminar was held on 1 October 2014 at VIP Hotel, Cagayan de Oro to prepare MSMEs for imminent competition.
2. DTI opens “KalakalCALABARZON”
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he Department of Trade and Industry - 4A (DTI-4A) staged the “KalakalCALABARZON” regional trade fair at Level 2, Carousel Court, Festival Supermall, Alabang, Muntinlupa City on 24 to 30 September 2014. More than 50 local micro, small, and medium enterprises (MSMEs) from the provinces of Cavite, Laguna, Batangas, Rizal, and Quezon participated in the event.
Manalo said with this confidence given to BOI’s investment aftercare team, the DTI and BOI expect that existing investors will continue to operate, expand, and diversify in the Philippines. Likewise, new investors will be enticed to set up businesses in the country.
The seminar aimed to educate MSMEs on the importance of traceability to maintain product integrity in the local market and increase credibility of Philippine exports. Traceability allows the product to be uncontaminated by careful documentation of its production, processing, and distribution to end consumers.
“We try to help many sectors to achieve inclusive growth. Among the exhibitors is a group of ‘persons with disability (PWD),” Toledo said.
“Kalakal-CALABARZON” featured products n n n n n n n
DTI-4A Regional Director Marilou Quinco-Toledo hailed the Association of Region IV-A Designers and commended their efforts in sharing their talents through their innovative designs thus helping enterprises to improve their products.
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Decors Fashion accessories Furnishings Gifts Handbags Handicrafts Health and wellness products Housewares Processed foods Shoes
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3. DTI, CvSU launch coffee service facility
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he Department of Trade and Industry (DTI) and the Cavite State University (CvSU) launched a P350,000 worth of shared service facility (SSF) that will benefit 60 farmers in Cavite.
9 upland municipalities in Cavite n n n n
DTI-Cavite Provincial Director Noly D. Guevara said the project was intended to mechanize coffee production to achieve higher levels of productivity, quality, and competitiveness. “We identify the gaps of the industry through studying their respective supply and value chains in consonance with the coffee stakeholders that include the private sector, local governments, regional government agencies, and the academe,” DTI-4A Regional Director Marilou Quinco-Toledo said.
Business Update 1. DTI, NCC drafting bill to enhance PHL competitiveness
2. Public-private partnership to expand list of Next Wave Cities™
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he Department of Trade and Industry (DTI) and the National Competitiveness Council (NCC) are drafting a bill for a new National Quality Infrastructure (NQI) that will allow the country to have a unified institutional framework for standards to make local products and services globally competitive.
IBPAP Chairman Danilo Sebastian Reyes said there are ongoing evaluations on the list’s expansion
Mendez Naic n Silang n Tagaytay City n n
The Cavite Coffee Growers Multi-Purpose Cooperative (CCGMPC), composed of 60 farmers from the nine upland municipalities in Cavite, is the direct beneficiary of the SSF project. Also, the automatic packing machine was installed at the university where the National Coffee Research Development and Extension Center (NCRDEC), an extension service of CvSU, was created to promote coffee production.
The NQI is a harmonized strategy on standards, metrology, testing, certification, and accreditation to ensure consumer protection and the Philippine industries’ access to global markets. The draft bill is targeted to be completed within the year, subject to consultations.
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he Information Technology and Business Process Association of the Philippines (IBPAP) and the Department of Science and Technology-Information and Communications Technology Office (DOST-ICTO) continue to strengthen its partnership by expanding the list of Next Wave Cities™ in an effort to promote the country as a hub for information technology-business process management (IT-BPM) services.
Alfonso Amadeo General Aguinaldo Magallanes
The Next Wave Cities™ outside Metro Manila n n n n n n
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Baguio Davao Dumaguete Iloilo Lipa Metro Bulacan (Baliuag, Calumpit, Malolos, Marilao, and Meycauayan) Metro Cavite (Bacoor, Dasmariñas, and Imus) Metro Laguna (Calamba, Los Baños, and Sta. Rosa) Metro Naga (Naga and Pili) Metro Rizal (Antipolo, Cainta, and Taytay)
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and they plan to announce the results within the year. The Next Wave Cities™ list has helped make the country a more
3. BOI, FDA ink MOA on ease of doing business
Consumer News 1. IPOPHL forms international alliances
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he Department of Trade and Industry (DTI), through the Board of Investments– Investment Assistance Center (BOI-IAC), has signed a Memorandum of Agreement (MOA) with the Food and Drug Administration (FDA) to speed up the facilitation of licenses and permits of existing and potential investors.
attractive location for IT-BPM services. The country’s IT-BPM industry aims to generate USD 25B worth of revenues and create 1.3M direct jobs by 2016. Capacity of the Bureau of Food and Drugs (BFAD), including: n Food n Drugs n Cosmetics n Medical devices n Vaccines n In-vitro diagnostic reagents n Radiation-emitting devices n Household/urban hazardous substances
Under the agreement, FDA shall provide BOI the copies of policies, rules, and regulations and a checklist related to applications for any permit, clearance, or certificate pertaining to safety, efficacy, or quality of health products as defined in Republic Act No. 9711 or An Act Strengthening and Rationalizing the Regulatory
Authorized BOI representative/s or personnel shall assist in the submission of and follow-up on the applications for permit, clearance, or issuance of certification by FDA in behalf of concerned BOI applicants or registered enterprises.
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of the MOU with Korea, the agency looks to collaborate with more countries starting with France.
he Intellectual Property Office of the Philippines(IPOPHL) has signed a Memorandum of Understanding (MOU) with the Korea Copyright Commission (KCC) to further boost intellectual property (IP) protection in the country. “Under the MOU, we will share information on enforcement of copyrights. Korea is very developed in terms of copyright protection so we want to work with them,” IPOPHL Director General Ricardo R. Blancaflor said. Other than developing the country’s intellectual property rights (IPRs) enforcement through exchange of best practices, the MOU will also support cultural development promotion through efficient implementation of the copyright system. The IPOPHL previously signed an identical MOU with the Japan Patent Office (JPO). After the signing
In the latest release of the United States Trade Representative’s (USTR) Special 301 Report, the Philippines has been omitted from the Watch List which includes countries with issues on IP rights. The MOU was signed during the Korea-Philippines Copyright Forum last 18 September 2014 which was attended by representatives of the following industries: n Book n Education n Film n Music n Visual Arts n Law firms Meanwhile, government institutions involved in arts and culture were also represented.
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2. Public told to trust accredited forwarders only
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he Department of Trade and Industry (DTI) is reminding the public, particularly overseas Filipinos (OFs), to entrust balikbayan boxes and other packages only with accredited forwarding companies. Forwarders abroad typically have partner companies in the Philippines which should be accredited by either the DTI’s Fair Trade Enforcement Bureau-Business Licensing and Accreditation Division (FTEB-BLAD) or the Civil Aviation Authority of the Philippines (CAAP).
through ships while the CAAP certifies those that utilize air transport. For the list of accredited Non-Vessel Operating Common Carriers (NVOCCs) and freight forwarders, the public may visit the DTI website (www.dti.gov.ph), or specifically under “Listings” on www.dti.gov.ph/ dti/index.php/resources/listings. The DTI encourages reporting of stolen, lost, or undelivered packages, which can be lodged at the FTEB-BLAD office or DTI Provincial Offices.
The FTEB-BLAD accredits forwarders that transport packages
FEATURE Creative industries showcased at DTI art fair
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he Department of Trade and Industry-Bureau of Domestic Trade (DTI-BDT) promoted the local arts industry through the latest edition of its Sikat Pinoy Fair dubbed as the National Art Fair held last 26 to 28 September at the SM Megamall Megatrade Halls 1 and 2.
The National Commission for Culture and the Arts (NCCA) also participated in the event with a special setting that focused on the works of Filipina sculptor Impy Pilapil and other national artists.
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Various artforms including visual, non-visual, folk, and literary arts were featured at the three-day fair.
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“In venturing in this fair for the first time, the DTI does not only seek to position the creative industry in the domestic market but also to make Filipinos engage in this promising industry,” DTI Industry Promotions Group (IPG) Undersecretary Ponciano C. Manalo Jr. said. Other activities were included in the fair’s program aside from the exhibitions which included book launching, film showing, talks, and performances. Members of the creative industry were able to network with interested parties.
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Artforms exhibited Handicrafts from different regions Literature Music Paintings Performing arts Photography Prints Sculptures
Participants from the creative industry Dancers n Filmmakers n Musicians n Other creative experts n Performers n
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Exhibitors Art galleries Art organizations Museums Non-government organizations Theaters
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ASEAN Watch 1. PHL to open more bilateral pacts
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he Philippines is interested in having more bilateral trade agreements with other countries to promote better commerce. “We are interested in exploring more bilateral FTAs (free trade agreements). We just have to undergo usual consultations,” Department of Trade and Industry - Industry Development Group (DTI-IDG) Undersecretary Adrian S. Cristobal Jr. said. The government targets to start the FTA negotiations next year with the European Union (EU) and the European Free Trade Association (EFTA). There are also ongoing meetings for the Regional Comprehensive Economic Partnership (RCEP) and the Association of Southeast Asian Nations (ASEAN) - Hong Kong trade agreement.
2. PHL, Viet Nam to strengthen trade ties
STATWATCH 52nd PHL ranking in the World Economic Forum’s (WEF) Competitiveness Report th 2014 from place in 2010
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USD 25B Revenue target by PHL’s IT-BPM industry by 2016, along with
1.3M direct jobs
4.35% Average growth rate for PHL economy from 2006 to 2009, which improved
6.3% since
to an average of 2010 to date
RCEP’s task is to consolidate all of Association of Southeast Asian Nations’ (ASEAN) FTAs into one regional free trade network.
The country currently has FTAs with China, Japan, Korea, India, Australia, and New Zealand.
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He mentioned that their discussions focused on expanding the market access for flour and processed fish.
he Philippines and Viet Nam aim to strengthen their cooperation to improve trade and economic ties between them. Department of Trade and Industry Industry Development Group (DTI-IDG) Undersecretary Adrian S. Cristobal Jr. met with Viet Nam Ministry of Industry and Trade (MoIT) Deputy Minister Tran Tuan Anh to discuss plans on improving economic ties between the two countries.
(TPS 22/9)
Furthermore, Viet Nam wants to import more industrial products from the Philippines, including electronics, chemicals, and fertilizers. For investments, Viet Nam firms are keen on opportunities in agriculture, energy, processing, and transportation sectors. (TPS 19/9)
“We have agreed that we should convene our joint committee on trade early next year,” Cristobal said.
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3. ASEAN beefs uptrade repositories
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he Association of Southeast Asian Nations (ASEAN) conducted a two-day National Workshop on the ASEAN Trade Repository (ATR)/National Trade Repository (NTR)/Non-Tariff Measures (NTMs) in Manila in September. The ATR is a web portal that provides all the information needed by a trader to conduct his business, particularly trade-related measures. The workshop was supported by the European Union-ASEAN Regional Integration (ARISE Project) together with the Department of Trade and Industry (DTI). “Integration efforts in the ASEAN region will harness technology to support the goals of the ASEAN Economic Community (AEC). Trade repositories help facilitate the free
flow of goods and services among member-states, and address ease of doing business issues across the region,” DTI Industry Development Group (IDG) Undersecretary Adrian S. Cristobal Jr. said. The workshop focused on issues on the development of the ATR including alignment with the member-state’s NTR, IT interface, definition of a Standard Classification System for the ATR, and standardization of notification forms. The activity was intended as a capacity building workshop for member-agencies of the Ad-Hoc Technical Working Group on the Philippine Trade Repository, tasked among others to establish the Philippine Repository. The lead agency for the undertaking is the DTI-Bureau of Import Services (BIS).
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vEditor-in-Chief/Patricia May M. AbejovManaging Editor/Anne L. Sevilla vAssociate Editor/Resty P. Par vWriters/Jam H. Raposon, Hazel S. Dizon, Joanna D. Cruz, Airiz A. Casta, Kit S. Andaya vDesign/Layout/Ren C. Neñeria vCirculation/Al Aquino To subscribe, email: publications@dti.gov.ph