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April 8, 2013 1
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April 08, 2013 Vol. 17, No. 07
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 Aquino urges investors to bet on PHL Inside DTI 1. Negros Occidental MSMEs undergo training for IFEX 2. DTI-Rizal holds Agri-Pangasius Culinary Festival 3. DTI holds product clinic for Ifugao entrepreneurs Good News, Philippines! 1. FDIs breach USD 2-B mark in 2012 2. Gov’t on right track 3. PHL among investors’ emerging markets MSME/OTOP News DTI-XI earmarks P34.4M for Region XI MSMEs, identifies recipients in Davao Business Alert 1. BOI meets Swedish business delegation 2. BOI urges creative sector to use incentives 3. DTI assesses PHL qualification for EU GSP+
Consumer News 1. DTI, online business owners join in promoting consumer welfare 2. DTI urges consumers to be smart online shoppers 3. DTI warns against unregistered forex firm 4. World Consumer Rights Day 2013: Consumer Justice Now! Features PHL firms most profitable in Asia and Oceania region ASEAN Watch 1. Services trade seen supporting SEA’s future growth 2. SEA economies remain on divergent growth tracks Statwatch DTI Call Center What’s New?
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Focus Aquino urges investors to bet on PHL
Vol. 17, No. 072
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resident Benigno S. Aquino III has called on investors to bet on the Philippines, saying that the country is now in a better position to meet their needs in growing their investments. In his speech during the recent Philippine Investment Forum 2013, the President has urged investors to consider expanding their businesses in the country where the government could partner with them particularly in three priority sectors, namely agriculture, tourism, and infrastructure. “This is not an empty promise. You will have the Filipino people and our administration as committed partners,” Aquino said. He said he has spent the last two years and eight months on weeding out graft and corruption to provide a level playing field for all as well as to “ensure that integrity, transparency, and accountability characterize our actions.”
Inside DTI 1. Negros’ MSMEs undergo training for IFEX
the process of setting up business in the Philippines, to following the proper bidding and procurement processes,” he said. The President particularly cited the business process outsourcing (BPO) industry wherein the Filipino has excelled and has brought the country “to great heights in such a short time.” “The investments that you will bring into our country will redound to tens of thousands of jobs for our countrymen—men and women who will be able to put food on their tables, send their children to school, and meet the needs and wants of their families,” he said. He also highlighted his administration’s recent achievements, mainly the recent passage of landmark measures like the Sin Tax Reform Law, the Responsible Parenthood Act, and the signing of the Bangsamoro Framework Agreement.
“Over the past years, we have been doing everything we can to level the playing field—from reforming the judiciary, to streamlining
The Philippine Investment Forum 2013 brought together policymakers, business leaders, economists, and overseas investors to discuss key economic issues. (MAT 03/12)
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Exhibition (IFEX) Philippines, which will be held at the SMX Convention Center in Metro Manila on May 16-19, 2013.
he Center for International Trade Expositions and Missions (CITEM) is conducting the Phase III of the capacity building program on food preparations for micro, small, and medium entrepreneurs in Negros Occidental. The participants are being re-introduced to package design, presentation of new label concepts, marketing plan preparations, sanitation standards and operating procedures, and on hazard analysis and critical control points (HACCP). This is in preparation for Negros Occidental’s participation in the forthcoming 9th International Food
At least 25 of the 40 MSMEs who were earlier categorized into organic champions and conventional entrepreneurs have qualified to join the upcoming international food trade mission. Negros Occidental officials have forged an agreement in October last year for the province to be a proponent of the Partner Province Program of the DTI-CITEM in collaboration with the Department of Agriculture (DA).
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2. DTI-Rizal holds Agri-Pangasius Culinary Festival
April 8, 2013 3
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he Department of Trade and Industry (DTI)-Rizal, in cooperation with the Rizal provincial government, held the Agri-Pangasius Culinary Festival in Antipolo City on March 7, 2013 in line with the celebration of Women’s Month and the fourth anniversary of the capitol’s transfer from Pasig to Antipolo. DTI-Rizal Provincial Director Mercedes A. Parreno invited teams from 11 municipalities and one city of Rizal to help promote good nutrition through the consumption of good products. The contestants prepared dishes with kalabasa (squash) and pangasius (a variety of catfish) as main ingredients.
Samahan ng Rizaleno sa Sektor ng Agrikultura at Pagkain President Josephine Cunanan, Pangasius Industry Association of Rizal President Orlando Rico, Rural Improvement Club President Dr. Gloria Serrano, and Vitarich Corporation’s Willard Endaya. Invited guests and provincial employees were also allowed to try the different dishes. Taytay won first place for the best kalabasa dish followed by Antipolo City and San Mateo in second and third places, respectively. San Mateo won first place for best pangasius dish, with Teresa and Taytay in second and third places.
Judges included DTI-4A Regional Director Marilou Q. Toledo,
3. DTI holds product clinic for Ifugao entrepreneurs
Good News, Philippines! 1. FDIs breach USD 2-B mark in 2012
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he Department of Trade and Industry (DTI)-Ifugao held a two-day product clinic on product packaging, including labeling and designing, involving 14 micro entrepreneurs in the province.
“Product design and development is a sub-component of trade development and promotion where new or improved products are developed, or product labels and packaging are improved for these products to be responsive to market needs and requirements,” Baguidudol said.
DTI-Ifugao Provincial Director Valentin A. Baguidudol said with the training conducted by Lecturer Froilan Dy from Naga City, more quality pasalubong products with topnotch labels and packaging would come out in the market.
He said the only way Ifugao products could stand out among similar products in the market is through continuous product innovation including improved packaging and labels.
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It was the highest record since the USD 2.92B posted in 2007. The tally also surpassed BSP’s revised USD 1.5-B forecast.
oreign direct investments (FDIs) that entered the country breached the USD 2-B mark last year, the first time it did so in the past five years, the Bangko Sentral ng Pilipinas (BSP) reported. FDIs registered a net inflow of USD 2.03B last year, up by almost 10% from USD 1.85B the previous year. A net inflow indicates more investments entered the country than left.
The country continued to benefit from strong foreign investors’ confidence in the resilience of the domestic economy, given the strong economic growth amid low and stable inflation as well as strong external payments dynamics, the BSP said.
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Vol. 17, No. 074
The economy grew 6.6% last year, beating official targets, against a backdrop of low inflation of 3.2%. Broken down, FDIs came mostly in the form equity placements or foreign companies’ infusions to their local offices. Data showed equity inflows more than doubled to USD 1.35B. (TPS 03/12)
2. Gov’t on right track
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he International Monetary Fund (IMF) has cited several reforms implemented by the government, saying these could boost investments, which are key to sustaining economic growth momentum. "We are absolutely happy with the progress of the Philippines so far. The government is making growth more sustainable, improving the business climate and increasing labor productivity," IMF-Asia and Pacific Department Director Anoop Singh said.
3. PHL among investors’ emerging markets Bloomberg Markets Magazine: Top 20 emerging markets 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
China South Korea Thailand Peru Czech Republic Malaysia Turkey Chile Russia Indonesia
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Colombia Poland Namibia Zambia South Africa Mexico Brazil Hungary Morocco Philippines
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he Philippines was named among the top 20 emerging markets for investors in a list released by Bloomberg Markets Magazine on areas of particular interest to foreign investors, particularly on ease of doing business and economic freedom. Bloomberg used various criteria such as gross domestic product (GDP) growth projections and literacy rates to rank the emerging markets. For the Philippines, its projected cumulative GDP growth was 20.4% for 2013-2017. "The Philippines is the brightest economic star in Asia," Bloomberg reported, citing the country as the strongest as well as the safest place for funds to be.
Top 5 sources of FDIs (2012) U.S. Australia Netherlands Japan British Virgin Islands Top 4 sectors that benefitted from FDIs (2012) Manufacturing Real estate Wholesale and retail trade Financial and insurance
Singh cited the country’s healthy economic growth of 6.6% in 2012, beating the IMF forecast of 6.5% and the government’s target of 5%-6%. He suggested ways to sustain the growth: • Increase investments, particularly foreign direct investments (FDIs) • Improve public spending • Raise revenues by streamlining fiscal incentives • Spend on education and health (BWD 03/13)
Amid robust consumer spending in the Philippines, Bloomberg projected the country to make it to the world's top 10 fastest-growing economies. Consumption is expected to continue fueling the Philippine economic expansion. The country benefits from resilient consumers, a young population base that can boost consumption, and the pickup in government capital-intensive infrastructure projects this year. Key growth factors are the services sector and a robust tourism industry and business process outsourcing (BPO) sector. (MAB 03/07)
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MSME/OTOP News DTI-XI earmarks P34.4M for Region XI MSMEs, identifies recipients in Davao
April 8, 2013 5
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he Department of Trade and Industry (DTI)-Region 11 has set aside P34.4M this year for 40 small-scale livelihood projects out of the P50-M fund for its Shared Services Facility (SSF) Program. The latest to get funding support are four projects in Compostela Valley. The DTI-Compostela Valley is launching the projects within the first semester of the year to further improve the productivity and product quality of local micro, small, and medium enterprises (MSMEs) and their capability to compete globally. The Cocolife Cooperative of Pantukan will get two projects on Coco Beads Production Enhancement and Virgin Coconut Oil Production Upgrading which are due for awarding this month. The two projects amount to almost P350,000 worth of tools and equipment for the production of coco beads and virgin coconut oil (VCO). The said SSF projects with Cocolife are expected to hit a combined sale of P545,000 per month and generate at least 200 jobs in the area. Two more SSF projects are to be implemented in May and July this year. These are the Coco Sugar Production and Jewellery Production Upgrading projects. The Coco Sugar Production shall be implemented by Nabunturan Integrated Cooperative (NICO) in Barangay Mainit while the Jewellery Production Upgrading, which involves volume production of jewellery using casting machine, shall be implemented in Monkayo by an association of jewelry makers. DTI-ComVal Program Office Team Manager Lawyer Lucky Siegfred M. Balleque said MSMEs in the province could still avail themselves of the SSF project.
“Until this time, only about P2M of the P10M worth of projects for the province has been committed so far. This means that P8M worth of projects is still to be proposed from associations, non-government organizations (NGOs) or cooperatives in the province,” Balleque said. He said interested associations or cooperatives in the province could still submit to DTI-ComVal project proposals under the SSF Program before June 2013. Business ventures which require tools and equipment and fall under the industries such as banana, coconut, cacao, bamboo, abaca, wood, jewellery, and food processing are prioritized. The SSF Program provides tools and equipment for the common use of MSMEs, especially those involved in the processing or value-adding sector. DTI shall identify co-operators, usually an association or a cooperative, that will be the recipient of tools and equipment and the SSF operator. The SSF’s use shall be open to other MSMEs engaged in production or processing needing such tools and equipment. The co-operator shall in-turn charge a minimal fee for the equipment’s maintenance. Meanwhile, DTI has identified four MSMEs in Davao that will receive production assistance under the agency’s P700-M SSF for 2013. DTI-Davao Director Teolulo Pasawa said these MSMEs will be supported with much-needed equipment to boost their production such as processing equipment for the coco coir production and metal detectors for the food processing. Pasawa explained that there are no fixed criteria as to the cost of equipment as long as it is needed or essential to improve the MSMEs’processing and profitability.
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Business Alert 1. BOI meets Swedish business delegation
Vol. 17, No. 076
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he Board of Investments (BOI) has met with the Swedish business delegation that plans to invest in the Philippines’ manufacturing sector. “What is encouraging for us is the heightened interest of foreign investors in the Philippines. There is a solid stream of business missions coming in and we believe this is a vote of confidence in our government’s capacity to effect significant long-term structural and policy reforms,” Department of Trade and Industry (DTI) Undersecretary for Industry Development and Trade Policy
2. BOI urges creative sector to use incentives
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he Board of Investments (BOI) is urging more players in the creative sector to capitalize on additional incentives provided by the Philippine government. “Filipinos are inherently talented, like in animation, so we can take
3. DTI assesses PHL qualification for EU GSP+
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he Department of Trade and Industry (DTI), through the Bureaus of Export Trade Promotion (BETP) and International Trade Relations (BITR), is currently coordinating with concerned government agencies to discuss and assess the possibility of the Philippines to apply for the European Union’s (EU) Generalized Scheme of Preferences Plus (GSP+). The EU GSP+ is a special incentive recognizing the sustainable development and good governance of a beneficiary country. To avail itself of the GSP+, a country must meet two conditions: • non-diversification of exports and low proportions of EU import, and • ratification of 27 international conventions on human and labor rights, environment, and governance principles and the
Group (IDTPG) and BOI Managing Head Adrian S. Cristobal Jr. said. In a briefing for Swedish delegation, the DTI has presented investment opportunities in the Philippines, which are in the areas of PublicPrivate Partnership (PPP), renewable energy, information technology/ business process outsourcing (IT/BPO), tourism, and agribusiness. “Strategic investments in these high-potential growth sectors, especially in manufacturing, generate employment opportunities and stimulate more development in the rural areas,” Cristobal said. advantage of this,” BOI Governor Geronimo D. Sta. Ana said. Sta. Ana said BOI has currently provided creative industry income tax holiday (ITH) and vowed to advocate more incentives, noting that it is part of the proposed investment priority list. effective implementation of these conventions. The EU indicated that the Philippines is now eligible under the first criterion while the second criterion would entail a detailed submission to the EU of domestic laws, regulations, and measures relative to the implementation of these conventions and a statement of commitment to accept regular EU monitoring and implementation review. The Philippines is currently a beneficiary of General GSP arrangement that covers a total of 6,209 products of which 2,442 are subject to zero duty while 3,767 are subject to reduced tariffs. On the other hand, the GSP+ arrangement has a larger coverage of 6,274 products that are all subject to zero duty.
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Consumer News
1. DTI, online business owners join in promoting consumer welfare
April 8, 2013 7
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he Department of Trade and Industry (DTI) has asked online business owners to self-regulate and act promptly on consumer complaints that are related to digital transactions. “We encourage those owners to police their own ranks. We urge you to be proactive in resolving consumer complaints, ideally within 48 hours upon receiving them, and screen complaints that should go to the government,” DTI Secretary Gregory L. Domingo said. Domingo said the government believes in implementing rules that are not restrictive to promote the growth of the e-commerce sector while reducing or eliminating illegal or fraudulent activities to protect consumers.
2. DTI urges consumers to be smart online shoppers
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The DTI is also promoting the use of trust marks for online business or equivalent to the seal of good housekeeping, which aims to increase consumers’ level of confidence when doing business with e-commerce sites. Digital Commerce Association of the Philippines (DCOM) President and Multiply Philippines Country Manager Jack Madrid said the group is collaborating with the DTI in self-regulating the industry by establishing the seal, which will signify compliance of its members with the code of ethics and regulations that will be approved by DCOM and the DTI.
he Department of Trade and Industry (DTI) urged shoppers who also do online shopping to be careful with their purchases.
Capital Region (NCR) Officer-inCharge for Consumer Assistance and Protection Division Carolina I. Carbonell.
DTI said although online shopping is not prohibited, this might not be totally safe for the consumers.
Products bought at shopping malls are still easier to replace when found defective unlike in online shopping, that’s why it is still risky even when it is under the Philippine Consumer Act, said Carbonell.
Unlike at shopping malls, addressing problems in online purchases may be more difficult, said DTI-National
3. DTI warns against unregistered forex firm
He said the DTI has issued Administrative Order 08 or the Data Protection Guidelines for the Private Sector in 2006 prior to the passage of the Data Privacy Act.
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he Department of Trade and Industry (DTI) warns against alleged fraudulent activities of a group that offers various online financial services and products. Professional Forex Union Limited (Proforex) had been offering financial services such as fiduciary management of shares, assets, securities, trade and advice on foreign exchange, and assorted
investment products through its website https://proforexunion.com. The DTI said the group is not registered with the Securities and Exchange Commission (SEC) nor with the Bangko Sentral ng Pilipinas (BSP). The SEC and BSP urged the public to be vigilant when engaging the services of and investing their money in products offered by such groups.
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4. World Consumer Rights Day 2013: Consumer Justice Now!
Vol. 17, No. 078
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onsumers worldwide celebrated the World Consumer Rights Day (WCRD) on March 15, 2013 with the theme 'Consumer Justice Now!' The theme was chosen to coincide with the update of the UN Guidelines on Consumer Protection (UNGCP), an international reference point for the consumer rights movement, which was first agreed in 1985 and last updated in 1999. Consumers International (CI), the world federation of consumer groups, supports new provisions on issues such as financial services, energy, and consumer representation.
Features PHL firms most profitable in Asia and Oceania region
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he Philippines emerged to be a profit center for Japanese companies after the country gained the top spot for being the most profitable location in Asia and Oceania region. The survey by the Japan External Trade Organization (JETRO) Manila, conducted from October to November 2012, showed that the Philippines bested other Asian economies such as China, Myanmar, Indonesia, Thailand, Viet Nam, Malaysia, and India when it comes to business competitiveness. The survey specifically compared the profitability, good management, and salary among the eight countries. It also showed why Japanese businesspeople appreciate the Philippines among the eight
ASEAN Watch 1. Services trade seen supporting SEA’s future growth
"The decision to update the UN Guidelines gives us the first opportunity in over a decade to raise the standards of consumer protection around the world,” CI Director General Helen McCallum said. Technology advancements and changing business practices have created many new challenges that did not apply when the UNCGP was first drafted. The Internet, for example, was non-existent before. The challenge is to bring the UNCGP up-to-date and make it relevant for today's consumers. The UNGCP revision process will be completed in July 2014.
countries in the survey – Japanese businesses in the Philippines came out to have the least challenges. “The good economic fundamentals that the Philippines enjoys have put a weight on how these Japanese companies see the country as an investment destination,” JETRO said. JETRO Manila received a total of nine investment missions, 168 persons and 1,572 visitors in doing business in the Philippines last year, or a 31-% increase from 2011. Japanese businessmen in Japan also opted to look for a new business site abroad mainly because of the hardships that the Japanese companies encounter due to the strong yen, inflexibility on labor recruitment, and high rate of corporate tax, among others. (MAB 02/13)
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manufacturing sector, eventually becomes dominant in most nations,” the report “Economic Insight: South East Asia” said.
“Along the path to ‘industrialization,’ the services sector, rather than the
The report noted that in Southeast Asia, this trend is just starting for most member states, adding that services as a share of the economy, as well as
ervices trade is a future growth area for the Southeast Asian region, according to a report recently released by the Institute of Chartered Accountants in England and Wales (ICAEW).
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April 8, 2013 9
the trade in services, comes with a more service-heavy economic structure.
are worth 8% of the gross domestic product (GDP), compared with services imports of 6%.
The report also mentioned that the Philippines’ strength is in the outsourced services, which is helped by a large English-speaking population and low wages.
Produced by the Centre for Economics and Business Research Ltd., the ICAEW report undertakes a quarterly review of Southeast Asian economies focused on the six largest countries: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam. (MAT 03/11)
It added that the country has a trade surplus of 2% as exports services
2. SEA economies remain on divergent growth tracks
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outheast Asian economies are likely to post divergent growth rates anew this year, with the fast-growing countries expected to expand faster than export-driven nations, a global investment bank said. China, the Philippines, Indonesia, and India grew the fastest in the region in 2012, while the “more open economies” of Singapore, Hong Kong, Taiwan, and South Korea expanded much slower, Bank of America Merrill Lynch (BofAML) said. “For 2013, we expect this pattern to continue,” it said in its report titled “Economic Pulse of Emerging Market Asia.” As a group, emerging Asia could grow 6.6% this year, faster than the 6.2% forecast last year. By 2014, growth could come in at 6.8%, it added. For the region, the export industry is expected to recover with “all the countries achieving positive growth.” (TPS 03/10)
STATWATCH USD 2.03B Foreign direct investments (FDIs) that entered the Philippines in 2012 vs. USD 1.85B
in 2011
P700M Fund allotted by the Department of Trade and Industry (DTI) for Shared Services Facility Program (SSF) for 2013
6,274 Products covered by the Generalized Scheme of Preferences Plus (GSP+) arrangement that are all subject to zero duty 6,209 Products covered by the General GSP arrangement wherein the Philippines is a member
3,767 Products under the General GSP arrangement that are subject to reduced tariffs
2,442 Products under the General GSP arrangement that are subject to zero duty
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Vol. 17, No. 0710
DTI Direct* Call Center Report SUMMARY OF CALLS Month-on-month CALL TYPE
Mar’12 April’12 May’12 June’12 July’12 Aug’12 Sept’12 Oct’12 Nov’12 Dec’12 Jan’ 13 Feb’ 13 Mar’13
Business Name
2,784
2,182
2514
2,243
1,889
1,606
1,419
1,493
1,515
761 1,877
1,821
1,565
653
670
895
990
2,629
2,128
2,235
1,917
1,496
2,370 2,017
1,028
820
Exports
6
7
4
5
12
3
4
2
3
4
8
2
7
Investments
0
6
3
0
2
2
1
3
1
0
1
1
0
MSMEs
5
19
18
8
14
13
30
29
19
9
19
44
21
438
504
839
847
3,582 4,426
3,735
3,260
Consumer Welfare
Others
1,251
878 1,080
1,023
920
858
891
1,050
529
TOTAL
4,699
3,762 4,514
4,269
5,466
4,610
4,580
4,494
3,027
CUMULATIVE CALL TYPE
Cumulative Total
% vs. Total
March 2013
February 2013
% Increase/ Decrease
Business Name
5,263
46.08
1,565
1,821
(14,06)
Consumer Welfare
3,865
33.84
820
1,028
(20.23)
17
0.15
7
2
250.00
2
0.02
0
1
(100.00)
84
0.74
21
44
(52.27)
Others
2,190
19.18
847
839
0.95
TOTAL
11,421
100.00
3,260
3,735
Exports Investments MSMEs
CALL RESOLUTION STATUS Total 2013
Resolved 11,407 (100%)
Referred 14 ( 0%)
*The DTI Direct Call Center (Tel. No.: 751.3330) was established in November 2006 as part of the Department’s thrust to improve and simplify the delivery of its frontline services.
For the Month of February 2013
Resolved 3,257 (100%)
Referred 3 ( 0%)
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(A synopsis of selected book acquisitions at the DTI-TIIC library)
Title : The Power of Information: the Impact of Mobile Phones on Farmers’ Welfare in the Philippines Publisher : World Bank Authors : Labonne, Julien/Chase, Robert S. Call Number : SITC 764/45 608/LAB/ 2009 This research paper shows the impact of information technologies on the welfare of farmers in developing countries. It contains spatially coded data on mobile phone coverage with household panel data on farmers from some of the poorest areas in the Philippines and shows that purchasing a mobile phone has a large, positive impact on the household-level growth rate of per capita consumption. It also presents evidences consistent with the argument that easier access to information allows farmers to strike better price deals within their existing trading relationships and to make better choices in terms of where they choose to sell their goods.
Legend: BWD MAB MAT TPS
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Business World Manila Bulletin Manila Times The Philippine Star
Entered as Third-Class Mail at the Makati Central Post Office under Permit No. 504 valid until 31 December 2013
Title : International Trade Statistics 2012
Publisher : World Trade Organization Call Number : STAT/00 000/WTO/ 2012 This book provides a comprehensive overview of the latest developments in world trade, covering the details of merchandise trade by product and trade in commercial services by category. Each chapter is introduced by a key development section that identifies the most salient trends in the data and illustrates them with charts and maps. It also includes a methodological chapter that explains essential concepts and definitions used in compiling the statistics, and an appendix with detailed data on trade by region up to 2011.
Philippine Postal Permit No. PM-04-08
What’s New?
April 8, 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