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March 10, 2014 1
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March 10, 2014 Vol. 19, No. 05
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 likely to hit high end of growth target range Inside DTI 1. PHL positioned to become Asia’s aerospace player 2. Foreign firms invest USD 200M in 2013 3. DTI-Davao banners 2013 milestones 4. More IT-BPO expansion eyed for DTI-Bacolod Good News, Philippines! 1. Export tally enjoys USD 1-B sales boost from DTI efforts 2. USD 200M invested by foreign firms in 2013 3. PEZA aims to surpass 2013 FDI 4. Manila beats Mumbai in Tholons’ list 5. ECCP eyes Albay as new manufacturing hub
MSME News 1. SMEs seen as major contributors to economic growth 2. PHL to export green coffee Business Update DTI-Antique, LGU starts ‘BOSS’ Consumers News 1. DTI seizes uncertified and substandard construction materials 2. DTI-Bicol seizes fake crispy nut 3. Consumers’ program marks 9th year Asia Watch Unity, key to ASEAN strength – leaders Statwatch What’s New?
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Focus PHL likely to hit high end of growth target range
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he Department of Trade and Industry (DTI) expects the Philippine economy to grow by nearly 7% this year buoyed by strong performance in exports, investments, and infrastructure. DTI’s forecast was higher than the 6.3-% growth projection earlier announced by the International Monetary Fund (IMF). “We’re coming from a higher base now, so this might be challenging. But I still think we’re on the high 6% or even 7%,” DTI Undersecretary for Industry Development and Trade Policy Group (IDTPG) Adrian S. Cristobal Jr. said. PHL Growth Drivers for 2014
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Recovery of total export revenues Faster pace of implementation of infrastructure and other projects under the government’s publicprivate partnership (PPP) program Recovery efforts in areas devastated by natural calamities
DTI’s Bureau of Export Trade Promotions (DTI-BETP) said the Department expected the country’s total export revenues to grow between 7% and 8% this year from the estimated USD 76B recorded last year. BETP Director Senen M. Perlada said the country’s economic
Inside DTI 1. PHL positioned to become Asia’s aerospace player
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he Department of Trade and Industry (DTI) said the Philippines has the potential to become one of Asia’s major players in aerospace development in the next five years. “The growth projection for the next 15 years in the aerospace industry, in terms of revenue and travel volume, in the Asian region particularly, is at 7%-8%, and we want a slice of that action,” DTI Undersecretary for Trade and Investment
expansion will be driven largely by automotive and consumer electronics as well as fresh and processed foods. Meanwhile, the country’s macroeconomic fundamentals are also seen to remain stable while the peso’s depreciation is expected to benefit local exporters. Cristobal said foreign direct investments (FDIs) would increase this year, owing to the robust performance of the Philippine economy. For this year, the DTI sees FDIs to grow by as much as 20% to about USD 4.8B on the back of foreign investors’ increased interest in the Philippines. As of end-September 2013, FDIs stood at USD 3.1B, or 10% higher than that of the previous year. The Board of Investments (BOI) also expects at least a 10-% hike in project approvals this year to roughly P443B as it anticipates more robust activities from both local and foreign firms. Last year, BOI approvals reached P403.17B due largely to the growing number of power generation projects in the pipeline. (PDI 01/26)
Promotions Group (TIPG) Ponciano C. Manalo Jr. said. “The Philippines should join that momentum. My vision is that we can compete competitively in this industry in the next five years. We want to be one of the bigger players in Asia,” Manalo said. Initially, the DTI plans to promote the area of maintenance, repair and overhaul (MRO) of aircraft in the Philippines followed by the sector
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dealing with the manufacture of aircraft parts.
businesses like Moog Inc. in Baguio City could be set up.
“We already have Lufthansa Technik, Singapore Airlines Engineering [SIA] in the MRO sector and we are looking into building more MRO facilities,” he said.
Moog Controls Corporator is a United States (U.S.)-based designer, manufacturer, and integrator of precision motion-control products and systems for aerospace, medical, and industrial applications, with a manufacturing facility in the Philippines.
“We have the benefit of experience, area, expertise, and labor, and this is the sector where the Philippines can first make headway,” he said. Eventually, Manalo believed the country could proceed to providing the first- and second-tier aircraft parts, saying more
2. Investments in Pangasinan up by 7%
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nvestments in Pangasinan grew to P1.9B last year from P1.7B in the previous year indicating an expansive trend in the province. DTI-Pangasinan Provincial Director Peter O. Mangabat said investments, employment, and business establishments in the province continue to exhibit strong performance. Notably, some 9,099 jobs were generated last year, or 267-% growth from 2,479 jobs created in 2012.
3. DTI-Davao banners 2013 milestones
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he Department of Trade and Industry (DTI)-Davao has bannered some milestones on micro, small, and medium enterprise (MSME) development it achieved in 2013. DTI-11 Officer-in-Charge (OIC) Ma. Belenda Q. Ambi said various initiatives the DTI implemented with its partners last year yielded good results that made the agency hit its annual targets. In the generation of domestic sales for the assisted MSMEs, DTI-Davao Region has reaped a total of P942.78M or 18% above its annual target of P800M.
Manalo said the promotions on the viability of aerospace development of the country to international airline associations as well as to major players in the aircraft-manufacturing industry are ongoing. The number of new business establishments in the province also recorded a 4-% rise, from 7,000 in 2012 to 7,318 last year, where the retail sector remained on top of service-oriented industries and manufacturing. “The primary factor for the increased growth rate is the good governance of the present administration of President Benigno S. Aquino III that has gained high investor confidence,” Mangabat said.
MSME products with most domestic transactions
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Beauty and health Fresh and processed fruits such as banana, durian, mango, pineapple, and coconut Jewelry Juice and beverages Handcrafted products Processed fish (tuna and pangasius) Processed meat and vegetables Wood products
Ambi revealed that the major initiatives that contributed to the increased domestic sales are the conduct of and participation in local and international trade fairs and market facilitation.
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Among the new products that showed promising potential in the domestic and export markets are chili powder, chili sauce, and chili paste produced by MSMEs in Davao Oriental.
projects, and activities that will further improve the local MSMEs. “We will continue to look for innovative and tailor-fit interventions for them,” she said.
Ambi said this year, DTI-Davao will continue to implement programs,
4. More IT-BPO expansion eyed for DTI-Bacolod
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acolod City is among the six cities evaluated by Everest Group for their IT-BPO clients’ expansion. The company, based in Dallas, Texas, is an advisor to businesses to improve their performance by optimizing their front-, mid-, and back-office business services, the Department of Trade and Industry (DTI) said. Everest Practice Director Anurag Srivastava visited Bacolod and met with Bacolod-Negros Federation for IT Founding Chairperson Jocelle Batapa-Sigue, DTI-Negros Occidental Provincial Director
Good News, Philippines! 1. Export tally enjoys USD 1-B sales boost from DTI efforts
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he Philippine export tally enjoyed a USD 1-B boost in terms of sales and bookings from trade missions and fairs arranged last year, the Department of Trade and Industry (DTI) said, adding that even more could be expected from other efforts directed towards new exporters moving forward.
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2. Foreign firms invest USD 200M in 2013
Rebecca M. Rascon, and Business Development Division Acting Division Chief Engiemar Tupas. Human resource, tax incentives, and other important matters related to investments were discussed during the meeting. Srivastava said he would like to establish more training centers in order to increase the chances of the Negrenses to be employed. He also said he hopes that in the future, key cities of Kabankalan, San Carlos, and Cadiz will also be home to call centers. “For 2013, the DTI continued to apply strategic market and product approaches in its programs, projects, and activities to promote the country’s exports,” DTI Undersecretary for Trade and Investment Promotions Group (TIPG) Ponciano C. Manalo Jr. said.
DTI’s programs, projects, and activities for exports 22 inbound business matching Platform for Philippine Exporters activities which assisted 411 exporters (RIPPLES) Program with a total and generated USD 2.02M in sales of 591 participants 6 outbound business matching • 140 Doing Business in the Free activities which assisted 50 exporters Trade Areas (DBFTAs) sessions and generated USD 77.54M in sales which were attended by 18,952 participants representing Trade fairs organized, resulting 6,308 companies to USD 667.235M in sales from local trade fairs • 27 export trade information sessions and USD 211.784M from participation with 1,912 participants representing in international trade events 884 companies under the Philippine Export Competitiveness Program 38 market information sessions, (PECP) seminar-workshops, and training under the Regional Interactive
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he Philippines gained about USD 200M in additional investments from 23 foreign companies that located in the country last year.
The shift of foreign firms’ operations to the Philippines is anticipated to generate 3,000 job opportunities.
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These foreign investments are seen as a result of the Department of Trade and Industry’s (DTI) and the Board of Investments’ (BOI) outbound business missions conducted in the last two to three years, with over 15 investment roadshows held by DTI abroad last year. In the country, 210 foreign business missions were held in 2013, where 174 individual companies participated and composed of at least 11 delegates each, with South Korea having the most representatives with 200 members. Last year’s inbound missions was 30% higher than in 2012, with 600 potential investors coming into the country with support from DTI and BOI, while the private sector also moderated other foreign missions. BOI notes that investors are ready to conduct the “due diligence” stage. The BOI is also eyeing an undisclosed foreign construction industry giant, still considering whether to invest in the Philippines or another Association of South East Asian Nations (ASEAN),
3. PEZA aims to surpass 2013 FDI
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he Philippine Economic Zone Authority (PEZA) is optimistic it can attract more foreign direct investments (FDI), this year compared to 2013 given the improvement in the country’s investment rating and Englishspeaking, trainable workforce.
“We have so much to offer, and our status as the darling of investors in the region is something we need to take advantage of,” PEZA Director General Lilia B. De Lima said. For 2013, 80% of the 673 new projects in the economic zones came from FDIs. De Lima noted that the biggest industry in the manufacturing sector
member, which will produce pre-fabricated housing materials for export. Japanese investors are seen to prefer the Philippines, opting to locate their parts suppliers in the country to serve their supply chain. Meanwhile, European investors focus on the fashion retail industry. (MAB 01/18)
DTI, BOI investment promotions target industries
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Construction Financial services Insurance for Business Process Management (BPM)
Countries that conducted business missions in the Philippines
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Japan United States of America (U.S.A.) China Korea Foreign investors industries of interest
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Automotive BPM Construction Energy Information Technology Manufacturing
of the Philippines is in electronics with almost 50% of operations in PEZA areas focusing on electronics manufacturing, followed by information technology (IT), while 50% of the 1-M Filipinos who come to legal working age every year go into electronics, IT, or other related sectors. She also mentioned that DTI aims to promote the shipbuilding and car parts manufacturing sectors to generate employment for high school graduates and agri-industry trainings for non-high-school graduates. PEZA also plans to expand economic zones through gaining more local investors. (BWD 01/23)
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4. Manila beats Mumbai in Tholons’ list
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anila is now in the 2nd spot in Tholon’s Top 100 Outsourcing Destinations, displacing Mumbai, India. Several other Philippine cities made it to the 2014 list, while the Government targets to get three more cities included by 2016. The Department of Science and Technology Information and Communications Technology Office (DOST-ICTO) sees its Next Wave Cities Program with the Information Technology-Business Process Association of the Philippines (IT-BPAP) as a way to develop internationally competitive outsourcing hubs outside Metro Manila and realize inclusive growth in the countryside.
5. ECCP eyes Albay as new manufacturing hub
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lbay may soon rise as the new economic zone in Southern Luzon after the European Chamber of Commerce of the Philippines (ECCP) chose the province as the next manufacturing industry hub in the country. ECCP Vice President Henry Schumacher said the pouring of investments in Albay is part of the move of manufacturing businesses away from Central Luzon and Metro Cebu to locations with available infrastructures and lower costs.
MSME News 1. SMEs seen as major contributors to economic growth
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mall and medium enterprises (SMEs) played an important role in the Philippines’ impressive economic upswing, the Department of Trade and Industry (DTI) reported. SMEs account for 99% of all registered enterprises, employ 61% of local workforce, and account for 32% of the country’s gross domestic product (GDP). To support the SMEs, the government will use the 2011-2016 Micro, Small, and Medium Enterprise
Employment in the outsourcing industry for 2012 was at 776,794, 21% more than the previous year, and is expected to have grown by the same rate in 2013. Meanwhile, the industry’s revenues in 2012 was at USD 13.2B. The IT-BPAP targets to reach USD 25B in 2016, considering the workforce to reach an estimated 1.3M. (BWD 01/23) Philippine Cities 2014 rank in Tholons’ list Cebu 8 Davao 69 Laguna 82 Bacolod 93 Iloilo 95 Baguio 99
2013 rank 8 70 84 92 93 99
The local government of Albay will facilitate the foreign-led development through an initial creation of the planned Domestic/ Export Enterprise Zone, a prerequisite for a developing ecozone. (TMT 01/23) Reasons why European firms favor Albay as a business hub
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Albay is investor-friendly It provides low-cost leases It has more attractive labor policies It is open to public-private partnership contracts attractive to real-estate firms It has young labor force that can readily undergo training
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(MSME) Development Plan to address the key challenges this sector faces. SMEs’ areas of challenges
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Business environment Access to finance Access to markets Productivity and efficiency
The plan is looking at increasing the SMEs’ economic contribution to 40% of gross value added (GVA) and generating 2M new and sustainable jobs by 2016. (TPS 01/20)
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2. PHL to export green coffee
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n line with its Development in Export (DE) Program for high-valued local goods, the Center for International Trade Expositions and Missions (CITEM) is promoting the export of unprocessed coffee or green beans. The government will start exporting green coffee to catch up with two growing global trends: Third Wave coffee shops, which need singleorigin coffees as they prefer to finish their coffee their own way; and micro roasters, a coffee
Business Update DTI-Antique, LGU starts ‘BOSS’
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he Department of Trade and Industry (DTI)-Antique encourages the local government units (LGUs) to put up Business One-Stop-Shop (BOSS) in their district to quicken business permit processing. It already started in San Jose, Barbaza, Bugasong, and other towns in Antique. DTI-Antique Information Officer Lynna Joy Cardinal explains that BOSS is a single common location where an applicant can avail of complete Business Permit Licensing System (BPLS) services through a streamlined process.
Consumer News 1. DTI seizes uncertified and substandard construction materials
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he Department of Trade and Industry, through its Consumer Protection Group (DTI-CPG), conducted monitoring and enforcement activities in Caloocan City among hardware stores. Store Xtreme Unite Steel, Inc. WDL Enterprises
Brand Continental and Dragon Asia Cathay Pacific, Mackay, Somico, Arizona, and THR
processing equivalent to beer’s micro breweries. CITEM got positive results from its green coffee bean exhibitions in the ANUGA Food Show in Germany last year and in the Winter Fancy Food Show (WFFS) in the United States last January. Some of the PHL coffees displayed at the food shows
• Benguet Arabica • Sulu Washed Robusta • Sulu’s Civet Coffee (Kahawa Kubing) Cardinal said the BOSS provides convenience for business owners. Application, one-time assessment, and payment are completed in one venue and can be done shorter time compared to the system without BOSS. Yet, the applicants should also hasten the compliance of other requirements necessary for the approval of their business permits such as fire safety, sanitary permit, and court clearance.
The group confiscated a total of 10,181 pieces of uncertified and substandard steel bars, angle bars, and ceramic tiles worth almost P700,000 and issued Notices of Violation to Xtreme Unite Steel, Inc. and WDL Enterprises. Confiscated Item underweight steel bars underweight angle bars underweight steel bars underweight angle bars uncertified angle bars uncertified ceramic tiles uncertified Galvanized iron (G. I.) wires
Quantity 1,650 48 150 69 10 8,250 in 750 4
pieces pieces pieces pieces pieces pieces boxes rolls
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“These now serve as evidences for the administrative cases against the retailers, manufacturers, and importers when they are proven guilty in the committed violations,” said DTI Undersecretary for Consumer Protection Group (CPG) Victorio Mario A. Dimagiba.
2. DTI-Bicol seizes fake crispy nut
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he Department of Trade and Industry (DTI)-5 confiscated 30 bottles of alleged crispy pili nut candies being sold in a terminal in Daraga, Albay. DTI-5 Regional Director Jocelyn LB. Blanco immediately issued an alert notice to consumers to be always on guard in buying processed pili nut products, especially these crispy pili nuts, as these are flooding in places like terminals and bus stops.
3. Consumers’ program marks 9th year
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he Department of Trade and Industry’s (DTI) consumer education broadcast program dubbed as Konsyumer Atbp. (KATBP), celebrates its nine (9) years of informative discussions on pressing consumer-related concerns that molds viewers and listeners to be responsible and watchful consumers. “For nine (9) years, the KATBP served as the advocacy arm among the government, industry, academe and media to ensure consumer welfare,” DTI’s anchor for KATBP, Undersecretary for Regional Operations Group (ROG) Zenaida C. Maglaya boasted. “Being at the forefront of consumer protection, the KATBP has become essential to the Department in intensifying its campaign for consumers to be well-informed and educated on their rights and for them to actively participate in consumer programs and activities,” DTI Undersecretary for Consumer Protection Group (CPG) Victorio Mario A. Dimagiba asserted.
“The DTI will outright cancel the PS license or ICC certificate of any manufacturer or importer found violating the provisions of the Consumer Act of the Philippines and the Standards Law,” DTI Secretary Gregory L. Domingo said.
Vendors make consumers believe that what they are selling are pili nuts, when these are not. Some of these are peanuts, some are sweet potatoes, and some are made from cassava peelings and banana stalks, Blanco said. These vendors were found to be violating Article 50 of Republic Act (R.A.) No. 7394 (Consumer Act of the Philippines), or the prohibition against deceptive sales acts or practices, she said.
The KATBP is an information and education broadcast program that renders basic discussions for consumers on programs and activities that affect them. It promotes and reassures consumer awareness and protection through its slogans, “Karapatan ng Mamimili, Proteksyon sa Pagbili.” and “Bida Ka Dito, Konsyumer!”. These slogans come to life with the DTI and ABS-CBN Broadcasting Corp. partnership. Dimagiba stressed that the KATBP episodes are series of interactive sessions on consumer rights and responsibilities; significance of standards for product safety and quality to be protected from uncertified and defective goods; vigilance in making intelligent choices when buying products or availing of services, price and supply situations of basic necessities and prime commodities; complaints-handling systems; and, consumer issues and how these are being addressed.
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Every year, the DTI and ABS-CBN set celebration activities for the KATBP anniversary to reach out to more consumers in the regions and provinces. The DTI and ABS-CBN have celebrated the KATBP anniversary with consumers in Eusebio High School in Pasig City (1st - 2006), in Manila High School and Baguio High School in Baguio City (2nd – 2007), in Ramon Magsaysay High School in Cubao, Quezon City (3rd – 2008), in Puerto Princesa City Coliseum in Palawan (4th – 2009), in NCCC Mall in Davao City (2010), in Robinsons Place in Bacolod City (6th – 2011), and, in Cebu Normal University in Cebu City (7th – 2012).
ASIA Watch Unity, key to ASEAN strength – leaders
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he Association of Southeast Asian Nations (ASEAN) strength is at its greatest when members work together, Southeast Asian countries said. “ASEAN nations were much stronger in trade talks when they negotiated as a group. The value is that as a group we can negotiate better agreements with these bigger parties,” Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said.
STATWATCH USD 76B Estimated total export revenues for 2013
USD 3.1B FDIs as of end-September 2013
USD 1B Boost in PHL exports due to trade missions and fairs arranged by the DTI
USD 200M Investments made through DTI outbound missions P1.9B Investments in Pangasinan for 2013 P942.78M Sales generated by DTI-Davao-assisted MSMEs
P49.5M Worth of machinery and equipment awarded to MSMEs in Calabarzon under DTI’s SSF Program
P251,000 Value of bag-making machinery awarded to Kasay Sanktwaryo in La Union under DTI’s SSF Program
10,181 Pieces of uncertified and substandard steel bars, angle bars, and ceramic tiles confiscated by the DTI-Consumer Protection Group
“The unity of ASEAN is a very important factor,” said Viet Nam Foreign Minister Pham Binh Minh insisting that the future of ASEAN was through deeper integration.
7%-8% Projected growth in the aerospace industry in terms of revenue and travel volume in the next 15 years
Myanmar President Thein Sein hailed the spirit of cooperation and coordination within the group, which helped bring his country back to the international community.
GDP growth for this year 2nd Manila’s spot in the Tholons’ Top 100 Outsourcing Destination list
7% DTI’s projection of PHL
(MAT 01/25)
ERRATUM In our previous issue, we have inadvertently mislabeled the following DTI-accredited freight forwarding companies with revoked accreditation: · Aeroworld Logistics Phil., Inc. · D’ Winner Logistics Phils., Inc. · DXL International Freight Forwarder, Inc. · ECFS International Forwarding, Inc.
Except for Aeroworld Logistics Phil., Inc., whose case has already been dismissed by the Consumer Arbitration Officer (CAO), the other three companies’ accreditation has not been revoked. However, the Philippine Shippers’ Bureau (PSB) has filed a petition for revocation of accreditation against the three companies.
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(A synopsis of selected book acquisitions at the DTI-TIIC library)
Publisher : Asia-Pacific Economic Cooperation (APEC) Call Number : 45 000/02.09.03/ APEC/2013 The report assesses the progress made by APEC in the priority areas included in the Ease of Doing Business (EoDB): 1) starting a business; 2) getting credit; 3) enforcing contracts; 4) trading across borders; and 5) dealing with construction permits. The initiative dates back to February 2009 during Senior Officials meeting in Singapore and agreed to put in place an Action Plan to improve business environment in the APEC region through regulatory reforms that make it cheaper, faster and easier to do business. 50p.
Legend:
BWD MAB TMT
- Business World - Manila Bulletin - The Manila Times
Title : Urban World: the Shifting Global Business Landscape
Title: APEC’s Ease of Doing Business – Interim Assessment 2009- 2012
Publisher : McKinsey Global Institute Authors : Dobbs, Richard/Remes, Jaana/Smit, Sven/Manyika, James Call Number : 00 000/03.08/MCK/ 2013 This report presents continues urbanization research with a focus on understanding the global landscape for large companies – and how it will be reshaped by the rise of thousands of new corporate giants based in the emerging world. It also helps business and policy leaders understand the forces transforming the global economy, identify strategic locations, and prepare for the next wave of growth. 42p.
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