dataline
March 25, 2013 1
dataline
March 25, 2013 Vol. 17, No. 06
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 DTI sees 7-% growth this year Inside DTI 1. DTI-NCR Area 2 relocates office 2. DTI boosts coffee industry in S. Kudarat Good News, Philippines! 1. Arab nations pick PHL as “country of choice” 2. PHL economy to grow at faster pace 3. SB Corp. posts record lending 4. Davao’s investment promo, financing facilitation generate P9.4-B investments MSME/OTOP News 1. MSME scheme gets P100M 2. DTI-Ifugao conducts coffee production seminar for LGUs Business Alert 1. DOF approves guidelines for Office for Competition 2. Gov’t to consult stakeholders for investment list review 3. BOI starts IPP consultations 4. SEC warns public against online fraud
Consumer News 1. DTI-PCAB concludes public consultations on IRR amendments 2. A simple guide on fire extinguishers 3. DOJ warns public against misleading ads on airline seat sales Features DOST readies network of trained S&T coordinators ASEAN Watch 1. ADB says PHL, Asia economies to survive euro crisis 2. U.S. economic and business official visits PHL Statwatch What’s New?
dataline
Focus DTI sees 7-% growth this year
Vol. 17, No. 062
T
he Department of Trade and Industry (DTI) is expecting a 7-% gross domestic product (GDP) growth this year, with the country’s enhanced business climate brought about by sustained key trade and industry reforms. DTI Secretary Gregory L. Domingo said the target is attainable because of the encouraging performance of different economic sectors, particularly citing the manufacturing sector’s expansion which surpassed the services sector in the third and fourth quarters of last year. “That’s a very good indication that manufacturing is back. And when you go to Laguna, Batangas, and Cebu, you’ll see manufacturing plants, huge ones that are being built and some operating already,” Domingo said. “We are in the good spot,” he added, referring to the recent statements of the three major ratings agencies —Moody’s, Fitch, and Standard and Poor’s—that the Philippines is one notch below investment grade. Domingo likewise noted the latest Japan External Trade Organization (JETRO) survey where the Philippines is considered one of the most profitable business locations in Asia. The same survey showed that recruiting general staff is easiest in the Philippines, “with a stable labor environment and with labor costs increasing steadily and quite predictably,” he said. Domingo also sees a more vigorous year for investments than the
record-setting 2012 where approved investments of the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) reached P672.3B. “Based on the foreign inbound missions and the plans that we have been informed about by various companies and embassies, 2013 will be a much better year for investments. So expect more good things to come this year,” he said. On the trade front, 2012 merchandise exports rebounded, reaching a record USD 52B. Domingo noted that in the last five years, 60% of total Philippine exports went to Southeast and East Asian neighbors compared to 10 years ago when 50% of the country’s exports went to the United States and Europe. Domingo credits this to the diversified and balanced geographic markets, and the big improvement in non-electronics exports as well as the pursuit of active trade relations and free trade agreements (FTAs). To increase the local industries’ level of global competitiveness, the DTI, together with various business and industry groups, and the National Competitiveness Council (NCC) have crafted 19 industry roadmaps, with nine more underway. The DTI is also pushing for the revision of laws and policies such as the Foreign Investment Negative List, the rationalization of incentives, and the Mining Act, among others.
dataline
Inside DTI 1. DTI-NCR Area 2 relocates office
March 25, 2013 3
T
he Department of Trade and Industry-National Capital Region (DTI-NCR) Area 2 has relocated its office to the 6th Floor of Goodland Building at 377 Sen. Gil J. Puyat Avenue, Makati City. In the meantime that it is still refurbishing its new home, the DTI-NCR Area 2 temporarily processes business name (BN) registration applications at the DTI-NCR Regional Office in Trafalgar Plaza.
2. DTI boosts coffee industry in S. Kudarat
T
he Department of Trade and Industry (DTI) plans to launch more coffee industrial tours in Sultan Kudarat to enhance the province’s booming coffee industry. DTI-Sultan Kudarat Provincial Director Nelly Nita N. Dillera said they are looking at sustaining the coffee industrial tours in Senator Ninoy Aquino (SNA) town to draw more investments and further improve the industry’s market potentials. DTI and the municipal government of SNA earlier launched the industrial tours as part of the highlights of the Coffee Festival in the area last month. Dillera said they opened the industrial tours to showcase the province’s coffee industry, mainly centered in the fertile upland plantations of SNA town. The recent industrial tours were initially handled by the SNA Coffee Industry Development Council.
Good News, Philippines!
T
1. Arab nations pick PHL as “country of choice”
The country will take center stage at the Arab-Philippines Business Summit 2013 to be held in Bahrain
he Philippines is now dubbed in the Middle East as the destination of choice of no less than 16 Arab nations.
Also, its sales promotion and accreditation of repair shop services are still being done in Atrium Building in Makati City as they still hold office there. DTI-NCR Area 2 Director Arnaldo A. Del Rosario said they will announce the transfer of their business name processing services as soon as the Internet connection is put in place.
The tour package included coffee drinking at a traditional coffee shop situated near a popular waterfall and a tour at a coffee nursery, coffee plantation and coffee roasting, and grinding processing firm in the area. The tour resulted in technology adoption by local coffee farmers who were able to produce as much as 1,000 kg of coffee per hectare. The Sultan Kudarat province is presently considered as the country’s biggest coffee producer. Region 12, or the Soccsksargen Region, currently produces some 28,000 metric tons (MT) of coffee annually, the bulk of which is sourced from Sultan Kudarat. The region comprises the provinces of South Cotabato, Sultan Kudarat, Sarangani and North Cotabato as well as the cities of General Santos, Koronadal, Tacurong, Kidapawan, and Cotabato.
on April 9-12, 2013 for investments, trade linkages, and business match-ups. “The Philippines is now the priority country of investment in the Gulf Cooperation Council (GCC), which is composed of Qatar, United Arab
dataline
Vol. 17, No. 064
Emirates, Kuwait, Saudi Arabia, Oman, and Bahrain,” Management Consultant Leony Pamintuan said. Pamintuan said Bahrain is the finance center in the GCC and ranks number one out of 17 countries in the Middle East/North Africa (MENA) region of which Bahrain serves as the gateway.
2. PHL economy to grow at faster pace
T
he Philippine economy as measured by gross domestic product (GDP) may grow at a faster pace in 2013, the First Metro Investment Corp. and University of Asia and the Pacific (UA&P) Capital Markets Research newsletter The Market Call reported.
The publication said the slight acceleration in electricity sales in December last year, the continued government spending focused on infrastructure, and election
3. SB Corp. posts record lending
T
“What was supposed to be between Bahrain-Philippines only has spread to the GCC, and the entire Arab realm since the other countries also wanted in,” he said. He related that his group spent 15 days in Bahrain and met with five groups per day connected to various fields for possible tie-ups with local counterparts. (ExpatPhilippines.com 02/11) spending were some of the factors for the faster economic growth in 2013. Heightened election-related spending in first quarter and part of second quarter should provide the momentum to keep the economy humming at a similar or even faster pace than in the fourth quarter of 2012, it stated. GDP grew at 6.8% in the fourth quarter of 2012. (TMT 02/20)
he Small Business Corporation (SB Corp.) recorded P3.8-B loans to micro, small, and medium enterprises (MSMEs) and credit guarantees in 2012, bringing its total lending for this sector to P38.5B.
“Last year, SB Corp.’s wholesale microfinance lending reached P1.77B. Out of this amount, P366.2M was released to 12 out of 19 poorest provinces in the country through the Rural Micro Enterprise Promotion Program (RuMEPP),” Lagua said.
SB Corp. President and Chief Operating Officer (COO) Benel P. Lagua said its credit guarantee facility also increased by 119% from P40.2M in 2011 to P87.9M in 2012. The number of MSMEs guaranteed also increased by 96% from 25 in 2011 to 49 in 2012.
RuMEPP is a seven-year rural microfinance program with funding from the International Fund for Agricultural Development (IFAD). It complements the government's programs for poverty alleviation by providing sound credit delivery matched with business development services.
SB Corp., a government financial institution attached to the Department of Trade and Industry (DTI) providing direct financing to the MSME sector, also reported that its wholesale lending program amounted to P1.3B. This amount was released to 126 partner financial institutions, a 13-% increase from 111 partners in 2011.
South Luzon, including the National Capital Region (NCR), still has the bulk or 55% of the SB Corp.'s loan portfolio. Mindanao increased its share to 24%. Visayas also increased its share to 16%, and North Luzon, 5%.
dataline
4. Davao’s investment promo, financing facilitation generate P9.4-B investments
March 25, 2013 5
T
he investment promotion and financing facilitation initiatives of the Department of Trade and Industry (DTI)-Region 11 resulted in P9.45-B investments in 2012, or 13% higher than its P8.4B target. The financing facilitation services alone brought in P43.83-M investments, generated through approved loans and grants for income-generating projects of 141 firms in the region.
entice more investors to locate here. We all know for a fact that investments bring jobs,” DTI-11 Regional Director Marizon S. Loreto said.
Region 11’s top investments in 2012
Business consultancy services through the Board of Investments (BOI), City and Provincial Investments Promotion Centers, and five offices of the National Economic Research and Business Assistance Center (NERBAC) generated total investments of P4.82B, including the top 10 investments last year.
“We will further strengthen our investment promotions so that we can
MSME/OTOP News 1. MSME scheme gets P100M
T
he Department of Trade and Industry (DTI) has allotted P100M for its micro, small, and medium enterprise (MSME) clustering project this year. “To move forward from our accomplishments in industry clustering last year, the DTI has allotted P100M to support industry clustering activities nationwide,” DTI Undersecretary for Regional Operations and Development Group (RODG) Merly M. Cruz said. The funding, Cruz said, will be spent for industry clusters’ capacity building in three years.
Industry Cluster Capacity Enhancement Project (NICCEP), a three-year program of the DTI in coordination with the Japan International Cooperation Agency (JICA). 14 priority industry clusters
Eight of these industries are in Luzon, four in the Visayas, \and 12 in Mindanao.
Some of these industries were already identified under the National
Southcrest Hotel Ventures, Incorporated (Kukum Davao) 8990 Housing Development Corporation (mass housing) Filinvest Land, Inc. (mass housing) Communities Davao, Inc. (mass housing) Lorenzo Shipping Corp. (container shipping) DMC-Urban Property Developers, Inc. (mass housing) SM Hotels and Convention Corp. (Park Inn Hotel) Igloo Supply Chain Philippines, Inc. (cold storage facility) Franklin Baker Company, Philippines (processing plant for coconut specialty products)
Ceramics and pottery Coconut products Furniture and furnishings Industry supply chain network for tourism Information and communications technology (ICT) Metals and metal works Mining Other agri-based industries Processed fish and marine products Processed meat and livestock Processed tropical fruits Raw materials supply chain Renewable energy (RE) Rubber
dataline
2. DTI-Ifugao conducts coffee production seminar for LGUs
Vol. 17, No. 066
T
he Department of Trade and Industry (DTI)-Ifugao conducted a seminar on coffee production for local government units (LGUs) in the province. “We like to let the Ifugao people know that coffee can be a source of income especially now that the price of coffee is increasing,” DTI-Ifugao
Business Alert 1. DOF approves guidelines for Office for Competition
2. Gov’t to consult stakeholders for investment list review
T
Provincial Director Valentin A. Baguidudol said. He said the project is one way of alleviating the conditions of the poor people in the area since coffee thrives in the province, which also preserves the environment by preventing soil erosions.
he Department of Justice (DOJ) has approved the guidelines for the implementation of Executive Order (EO) 45 creating the Office for Competition (OFC) that will look into possible violations of the anti-trust laws.
Under the guidelines, the OFC has the power to start an investigation, including a fact-finding examination, study or inquiry, upon complaint under oath from any person or motu propio (on its own initiative even without a complaint).
The OFC shall investigate and prosecute cases involving monopolies and cartels hindering trade, enforce competition policies and laws to protect consumers, supervise competition, and implement measures to promote transparency and accountability in the market.
All cases, however, are required to undergo initial assessment to determine the need for further investigation.
T
he government plans to consult stakeholders to review and revisit its list of investment areas where foreign investors are restricted. Department of Finance (DOF) Secretary Cesar V. Purisima said there is an ongoing review of the Foreign Investment Negative List (FINL) in coordination with the National Economic and Development Authority (NEDA) and the Department of Trade and Industry (DTI). FINL identifies which investment areas and activities are reserved for Filipino nationals, and which areas may be opened to foreign investors. Purisima, however, stressed that only items on the list established by
In the conduct of the probe, the DOJ will be assisted by the Department of Trade and Industry (DTI). (TPS 02/25)
executive order or legislation will be examined. “We will not be reviewing lifting economic restrictions in the constitution. That is currently off the table. Limiting the items on the FINL will allow the Philippines to be more connected to the global economy, which will result in more business and employment for Filipinos,” he said. For his part, DTI Secretary Gregory L. Domingo also said this process is a crucial step to attract more foreign investments that will create more quality jobs for Filipino people and strengthen the country’s trade negotiations strategy. (MAB 02/21)
dataline
3. BOI starts IPP consultations
March 25, 2013 7
T
he Board of Investments (BOI) has started inter-agency consultations to formulate general policies and specific guidelines in implementing the 2013 Investment Priorities Plan (IPP). The IPP identifies the sectors which the government will actively promote for the current year. These sectors will enjoy fiscal and non-fiscal incentives such as income tax holidays (ITH) and duty-free importation of capital equipment, depending on the investment category.
4. SEC warns public against online fraud
T
he Securities and Exchange Commission (SEC) has warned the public against a company or firm that offers various online financial services and products. The Professional Forex Union Limited that offers services including fiduciary management of shares, assets, securities, and monetary funds, foreign exchange (Forex) trades and advice, and assortment
Consumer News
1. DTI-PCAB concludes public consultations on IRR amendments
2. A simple guide on fire extinguishers
The law mandates BOI to encourage investments through tax exemptions and other benefits in the preferred economic activities specified in the IPP. These economic activities are also aligned with the Philippine Development Plan (PDP) that identifies sectoral opportunities and promotes the investments and generates jobs.
of investment products through the website www.profexunion has been found not a duly-registered corporation in the Philippines. The SEC said the firm’s website uploaded scanned copies of purported Philippine registration documents such as Certificate of Incorporation and a Certificate of Incumbency that do not exist in the Commission’s records.
he Department of Trade and Industry-Philippine Contractors Accreditation Board (DTI-PCAB) has concluded public consultations on the proposed amendments to its Implementing Rules and Regulations (IRR) of the Republic Act 4566 or the Contractor’s License Law.
T
consulates, academe, and other government agencies.
The consultations have generated a wide and active participation from various stakeholders from the construction industry, professional organizations, contractor’s association, embassies and
This particular amendment allows foreign contractors to come up with 100-% foreign equity but requires an investment of at least P1B. Such investors may undertake only private construction projects of at least P10B.
C
onsumers, particularly building or apartment owners, should know about fire extinguishers. Here are some information about them.
The proposed amendments are embodied in PCAB Resolutions 214 and 215, Series of 2012 which include the 60%-40% requirements and the proposed new category to be known as “AAAA.”
Most important, a fire extinguisher should bear a Philippine Standard (PS), or Import Commodity Clearance (ICC) mark as proof that it passed the standards set by the
dataline
Vol. 17, No. 068
Department of Trade and IndustryBureau of Product Standards (DTI-BPS). There are four types of fire extinguishers, each intended for use for specific flammable materials: •
•
•
•
3. DOJ warns public against misleading ads on airline seat sales
Dry Chemical. It has a red body and white band, and is used in fires involving solid materials, liquid or liquefiable solids, gases, and electrical equipment. Carbon Dioxide. It has a red body and black band, and is used in fires involving flammable liquids such as gasoline, oil, grease and electrical equipment. Foam. It has a red body and blue band, and is used in fires involving solid materials and flammable liquids such as gasoline, oil, and grease. Halon Substitute. It has a light green body and white band and is used in fires involving solid
T
he Department of Justice (DOJ) urged consumers to report misleading advertisements on airline fares, specifically on the so-called “seat sales.” DOJ is asking the public to report erring airline companies to appropriate government agencies like the Civil Aeronautics Board (CAB) and the Department of Trade and Industry (DTI). DOJ Secretary Leila B. de Lima said consumers should be aware of their rights under the Airline Passenger Bill of Rights. “Thus, the public is advised to be vigilant in examining any transaction
materials, liquid, or liquefiable solids, gases, and electrical equipment. In addition, consumers must be aware of information on the labelling. For instance, unspecific general terms such as “multi,” “general” or “universal” should not appear in the label. They must also look for the following: • Name and address of the manufacturer/refiller • Extinguishing agent • Actual capacity of the extinguisher in terms of mass of extinguishing medium in kilogram • Gross weight when fully charged • Instructions for operation • Test pressure in megapascals (MPa) • Working pressure in kilopascals (KPa) • Country and year of manufacture.
and always look out for their welfare,” de Lima said. She noted instances when hidden costs were charged after the consumers had already paid the agreed price of a product or service. The consumers, she said, should understand that the airline ticket price is composed not only of the base fare or the promotional fare, but also of other additional charges. She said airline passengers have the right to choose whether or not to avail themselves of and pay for optional benefits such as baggage allowance and travel insurance. (Tribune 02/21)
dataline
Features DOST readies network of trained S&T coordinators
March 25, 2013 9
T
he Department of Science and Technology (DOST) is preparing a network of trained municipal science and technology (S&T) coordinators through the S&T for the Advancement of Municipalities (STEAM) program, which was launched in Bontoc, Mountain Province on December 13-14 last year. The program is expected to ensure cooperation among local government units (LGUs), partner agencies, and project stakeholders. It aims to promote jobs in LGUs.
ASEAN Watch 1. ADB says PHL, Asia economies to survive euro crisis
T
he Philippines and other developing countries in Asia have the capacity to remain stable even if the prolonged crisis in the eurozone should evolve into another global economic meltdown, the Asian Development Bank (ADB) said. The ADB said developing countries in Asia would continue to be affected by the unfavorable developments in the eurozone, particularly in foreign trade. Developing Asia’s export growth may stay dampened given that the eurozone remains one of its biggest export markets. However, it said, the impact was not expected to cause a recession in Asia because countries in the eastern part of the globe have flexibility to implement measures to boost growth. Compared with their Western counterparts, Asian countries’ debt levels are much smaller. The ADB said this would give Asian governments the flexibility to spend on stimulus programs. In the case of the Philippines, the national government’s debt as a proportion of the country’s gross domestic product (GDP) has fallen over the years from more than 70% in 2004 to just about 50% last year.
(PDI 02/21)
Municipal S&T coordinators are encouraged to submit proposals and assist micro and small entrepreneurs through technology transfer, technical training, product packaging, and label improvement, among others. The project is supported by the Department of Trade and Industry (DTI), Philippine Information Agency (PIA), Philippine Chamber of Commerce and Industry (PCCI), and the academe. (Balita 02/23)
STATWATCH P672.3B Investments registered with the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) in 2012 P9.45B Investments generated by DTI-Region 11 in 2012 P3.8B Loans released by the Small Business Corporation (SB Corp.) to micro, small, and medium enterprises (MSMEs) in 2012
P100M
Fund allotted by Department of Trade and Industry (DTI) for MSME clustering for 2013
50% National government’s debt as a proportion of the country’s gross domestic product (GDP) in 2012
7%
Gross domestic product (GDP) growth target set by the DTI for 2013
dataline
2. U.S. economic and business official visits PHL
Vol. 17, No. 0610
A
n official from the United States (U.S.) Bureau of Economic and Business Affairs (EB) visited the country to boost the bilateral economic relationship between the U.S. and the Philippines.
of Southeast Asian Nations) Business Council, and the American Chamber of Commerce, and with a group of young small- and medium-sized business owners to discuss the importance of entrepreneurship in developing a strong economy.
EB Assistant Secretary Jose W. Fernandez’s visit focused on opportunities to support America’s economic recovery, particularly increasing exports and job promotion and the importance of inclusive growth and sustainable development in the Philippines.
In addition, Fernandez met with a distinguished group of biotechnology experts and noted the Philippines’ leading role in the research and commercialization of genetically engineered crops.
Fernandez visited various government agencies’ leaders, American and Filipino business executives from the Makati Business Club, the U.S. ASEAN (Association
The Philippines is one of only four countries where the U.S. government, through Philippine partnership growth, brings its federal agencies to provide a whole-of-government approach to advance economic development in a country. (MAT 02/22)
dataline
(A synopsis of selected book acquisitions at the DTI-TIIC library)
Title: Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises – Economy Profile: Philippines Publisher : The World Bank Call Number : 45 608/03.09.03/2013 This report sheds light on the ease or difficulty for a local entrepreneur to open and run a small to medium-sized business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business. Containing quantitative indicators on business regulations for the Philippines that can be compared across 185 economies, this document analyzes economic outcomes and identifies what reforms have worked, where and why.
Legend: Balita Expat Philippines.com MAB - Manila Bulletin MAT - Manila Times PDI - Philippine Daily Inquirer Tribune TMT - The Manila Times TPS - The Philippine Star
Title: Infrastructure Productivity: How to Save $1 Trillion a Year
Publisher : McKinsey & Company Call Number : 03.08.07/DOB/2013 This material sizes up the global infrastructure investment challenge by presenting a road map for improving infrastructure productivity which includes making better choices about which projects to execute, streamlining the delivery of projects, and making the most of existing infrastructure. These three main levers can result in annual savings of USD 1 trillion. It discusses critically important improvements to infrastructure governance systems to increase productivity.
Philippine Postal Permit No. PM-04-08
What’s New?
March 25, 2013 11
Editor-in-Chief: Anne L. Sevilla Managing Editor: Vic S. Soriano Associate Editor: Resty P. Par Writers: Jam A. Hourani, Elaine M. Lazaro, Emman R. Caleon Design/Layout: Ren C. Neneria To subscribe, email: publications@dti.gov.ph