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April 22, 2013 1
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April 22, 2013 Vol. 17, No. 08
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 Foreign investments grow 12% in 2012 Inside DTI DTI welcomes new Undersecretary, Assistant Secretary Good News, Philippines! 1. PHL aims to be among top 3 coco coir exporters 2. Japan auto investors eye PHL 3. Singaporeans consider investing in PHL 4. EU, Ireland bullish on PHL MSME/OTOP News P770-M fund for MSMEs now available Business Alert 1. BOI removes tax holidays for tourism facilities in 4 sites 2. BIR warns taxpayers against fake tax returns
Consumer News 1. DTI awards Seal of Excellence to Bicol enterprises 2. Gov’t warns unaccredited stem cell therapy spas and salons 3. DTI-Iloilo holds Consumer Welfare Desk forum Features 1. DTI-Nueva Ecija posts highest mark ever in CSC Seal of Excellence Award across the bureaucracy 2. Starting a franchise business ASEAN Watch 1. PHL hosts Asia Pacific SME Working Group meeting 2. PHL eyed as “northern gateway” to ASEAN 3. PHL wins bid to host AsPac retail confab Statwatch What’s New?
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Focus Foreign investments grow 12% in 2012
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he country’s total approved foreign investments rose by 12% to P289.1B in 2012 from P258.2B in 2011, the National Statistical Coordinating Board (NSCB) reported. In the fourth quarter of 2012 alone, total foreign investments registered with the government’s seven major investment promotion agencies (IPAs) reached P230B – the highest since 1996. The manufacturing sector remained the top industry with P136.8B worth of investment pledges, accounting for 59.4% of the total haul. Transportation and storage came next with investment pledges valued at P50B, contributing 21.7%, followed by information and communication at P14.5B, or 6.3%. The top three sources of foreign investments in the fourth quarter were the Netherlands, Japan, and the United States (U.S.). The Netherlands pledged P100.9B (43.8%), followed by Japan with P50.9B (22.1%), and the U.S., P32.8B (14.3%). Meanwhile, total local and foreign investments approved by the seven
Inside DTI DTI welcomes new Undersecretary, Assistant Secretary
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he Department of Trade and Industry (DTI) welcomed the appointments of Ponciano C. Manalo, Jr. as Undersecretary for Trade and Investments Promotion Group (TIPG), replacing Cristino L. Panlilio who resigned from government service effective January 15, 2013, and Ceferino S. Rodolfo as Assistant Secretary for Industry Development and Trade Policy Group (IDTPG). As the new TIPG head, Manalo will supervise the trade and investment
IPAs last year amounted to P697.7B, down 6.6% from P747.1B in 2011. Of the total, P408.6B or 58.6% came from Filipino investors. The BOI generated P360.3B worth of investment pledges, or 51.6%, in 2012. This was followed by PEZA with P311.9B for 44.7-% share. The other IPAs accounted for the remaining P25.1B or 3.6% during the period. Some 146,616 jobs were expected to be generated from approved investments of foreign and Filipino nationals last year. More than half or 60.9% would come from investment pledges coursed through PEZA, and some 45,184 jobs or 30.8% from BOI. (MST 4/4, TPS 4/4) Major investment promotion agencies • Board of Investments (BOI) • Philippine Economic Zone Authority (PEZA) • BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM) • Clark Development Corp. (CDC) • Subic Bay Metropolitan Authority (SBMA) • Authority of the Freeport Area of Bataan (AFAB) • Cagayan Economic Zone Authority (CEZA)
promotions activities of DTI. Under him are DTI bureaus, offices and attached agencies including the Bureau of Export Trade Promotions (BETP), the promotional posts under the Foreign Trade Service Corps (FTSC), the investment promotion units of the Board of Investments (BOI Investment Promotions Group and Investment Servicing Group), Philippine Trade Training Center (PTTC), Center for International Trade Expositions and Missions (CITEM), and the Philippine International Trading Corporation (PITC).
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Manalo held global executive level positions for Colgate-Palmolive Company in various countries including Europe, United States, and the Philippines where he was in charge of designing, developing and implementing country-wide strategic marketing initiatives for the company. Undersecretary Manalo was Vice President for Marketing Operations in Europe before his last stint as the Corporate Global Director of Hill’s Pet Nutrition (USA) in Topeka, Kansas, a global subsidiary of Colgate-Palmolive Company. Prior to Colgate-Palmolive, he started his marketing career at Proctor & Gamble Philippines. Manalo is a graduate of Management Engineering at the Ateneo de Manila University.
Good News, Philippines! 1. PHL aims to be among top 3 coco coir exporters
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he Department of Trade and Industry (DTI) and the Philippine Coconut Authority (PCA) are aiming to make the country among the top three exporters of coco coir in the next three years.
“We intend to place the country’s coco coir industry in the world’s top three exporters by 2016,” DTI Undersecretary for Regional Operations and Development Group (RODG) Merly M. Cruz said. Coco coir is a natural fiber extracted from coconut husk used in products like upholstery padding, mattresses, floor mats, doormats, strings, ropes, nets, and brushes.
“I came back because I wanted to give back something to the country which has been very good to me,” Manalo said. On the other hand, Rodolfo was Assistant Professor for the graduate Management program and Vice Dean of School of Management of the University of Asia and the Pacific (UA&P). His expertise includes public policy, trade policy and negotiations, strategic management, and industry analysis. He is also a candidate of Doctorate in Public Administration in the University of the Philippines – Diliman Campus (UPD).
and Indonesia in terms of coconut production and volume of coir product exports. It noted that the Philippines produces only 6,037 metric tons (MT) of coco coir products for export out of the 15.25B nuts harvested from 3.56M ha of land in a year. On the other hand, Sri Lanka produces 120,616 MT of coco coir for export from the 395,000 ha of land that produces 2.71B nuts. To make the country one of the biggest exporters of coco coir, Cruz said the domestic supply-base will have to be developed and expanded.
To meet the objective, the country has to earn USD 50M from exports of coco coir as well as P1.7B from domestic sales by 2016.
Access to domestic and market information will also have to be improved.
The PCA said the country is lagging behind other Asian countries such as Sri Lanka, India, Thailand,
Major export markets for coco coir and peat products are China, Japan, and Taiwan.
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2. Japan auto investors eye PHL
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he Philippines is now the focus of attention and interest of Japanese investors, including those in automotive manufacturing, Philippine Automotive Competitiveness Council Inc. (PACCI) Executive Director Ramon Vicente T. Kabigting said. Kabigting said this early, some Japanese firms are expanding their operations or are about to embark on new projects in the country. He said Yazaki-Torres Manufacturing is increasing by 30% its output of certain wiring harness components for export.
3. Singaporeans consider investing in PHL
“There are certain parts that we produce very well,” said Kabigting, pointing out wiring harness, transmission, and suspensions, among others. Some players have also expressed interest to make automotive parts that are bulky and therefore very hard and expensive to import such as body panels.
Mitsubishi Motor Philippines Corp. earlier announced plans to step up production and assemble a new
“If you have these parts near you, you become competitive,” Kabigting said, adding that major automotive producer Thailand has such parts makers. (MAL 03/25)
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executives and business organization representatives in Singapore.
“Now is the time to consider business opportunities in the Philippines considering its economic growth, particularly its 6-% gross domestic product (GDP) growth rate,” Singapore Indian Chamber of Commerce and Industry (SICCI) Chairman Rangarajan Narayanamohan said.
Also, some 116 companies out of the 2,800 located in the various economic zones run by the Philippine Economic Zone Authority (PEZA) are Singapore-based.
ingaporean businesspeople are exploring business and investment opportunities in the Philippines as they believe that now is the best time to look at the country given its robust economic growth.
Narayanamohan and Singapore Malay Chamber of Commerce and Industry (SMCCI) President Abdul Rohm Sarip led the business delegation composed of company
4. EU, Ireland bullish on PHL
model here while Toyota Motor Philippines Corp. is hiking assembly operations while mulling over plans to produce a small car model locally.
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reland is looking for developing synergy with the Philippines and for projects on food sector, information technology (IT) management and solutions, and project management, among others.
The Bureau of Export Trade Promotion (BETP) reported that Singapore was the Philippines’ fourth largest trading partner in 2011 and 2012. It was also the country’s fourth largest export market and sixth import source in 2012.
These companies are in the sectors of electronics and semiconductor, fabricated and metal products, rubber and plastic products, wood and wood products, manufacturing, and information technology (IT) services. (MAB 03/25)
Ireland Minister for Public Expenditure and Reform Brendan Howlin T.D. expressed his confidence on the country’s economy and for the country “to continue to have sustainable reforms,
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MSME/OTOP News P770-M fund for MSMEs now available
April 22, 2013 5
that the measures are in place to sustain the economic gains.”
levels of visits have occurred during the recent months.
On the same note, European Union (EU) Ambassador to the Philippines Guy Ledoux said more attention is in Asia now, particularly in the Philippines where several high
“Europe is looking at the Philippines as the new tiger of Southeast Asia. It offers a lot of opportunities for increasing our trade relations,” Ledoux said.
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of machinery and equipment to successful applicant will follow.
he Department of Trade and Industry (DTI) has announced that micro, small, and medium enterprises (MSMEs) can now avail themselves of government funding assistance to help enhance their capacities and competitiveness. DTI Undersecretary for Regional Operations Development Group (RODG) Merly M. Cruz said there are two types of government assistance being made available for MSMEs, namely the P700-M Shared Service Facilities (SSF) and the P70-M Industry Clustering Development (ICD) funds. Cruz explained that the P700-M SSF fund is purely for MSMEs’ capital outlay requirements. This will be implemented through private sector partners who can provide sustainable facilities to house the equipment. To avail themselves of the SSF, MSMEs should directly get in touch with the nearest DTI field office for a briefing, interview, application, and consequent submission of project proposal and terms of reference (TOR). If the application is approved, eventual purchase and delivery
Business Alert 1. BOI removes tax holidays for tourism facilities in 4 sites
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For the P70-M ICD facility, Cruz said MSMEs must individually enroll and get involved in the preferred industry cluster team in their province or region. This fund, which is part of the implementation of the National Industry Cluster Capacity Enhancement Program (NICCEP), is intended to support non-capital outlay requirements of industry clusters nationwide such as training, advocacy, technical assistance, and similar undertakings. NICCEP, a private-public partnership, is a three-year technical cooperation project also funded by the Japan International Cooperation Agency (JICA). It covers targeted industries and MSMEs including small farmers, small-scale wood planters, and fishermen. Cruz said that these funding initiatives will provide the “big push” to enable MSMEs meet the challenges posed by the global economy by providing access to market and finance.
he Board of Investment (BOI) is removing the income tax holidays (ITH) for tourism facilities in Metro Manila, Cebu City, Mactan Island, and Boracay Island to encourage its development in other parts of the country.
Manila, Cebu City, Mactan Island, and Boracay Island that intend to register with the BOI under 2012 Investment Priorities Plan (IPP) shall henceforth be entitled to capital equipment incentives only,” the BOI said.
“Projects on accommodation establishments located in Metro
BOI’s new regulation is aligned with the Philippine Economic Zone
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Authority’s (PEZA) decision to amend rules on incentives given to tourism economic zone (TEZ) developers and locator enterprises
2. BIR warns taxpayers against fake tax returns
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he Bureau of Internal Revenue (BIR) has warned taxpayers against bookkeepers, accountants, and auditors who forge tax returns, receipts, and other government documents and pocket their clients’ tax dues instead. BIR Commissioner Kim S. Jacinto-Henares said the tax agency has several cases in which the hired tax practitioners did not remit their clients’ taxes to the government.
Consumer News
1. DTI awards Seal of Excellence to Bicol enterprises
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he Department of Trade and Industry (DTI) has awarded Bagwis Seal of Excellence to 15 enterprises in Bicol region that observe fair business and uphold rights and welfare of consumers. The Bagwis Program is recognized by the Association of Southeast Asian Nations (ASEAN) and the ASEAN
in the four areas to promote development of such establishments in other location.
“The BIR has discovered instances where the tax practitioners hired did not pay the taxes and the taxpayers had to shell out the money to pay for the taxes twice,” Henares said. “Please make sure that your accountants and auditors are accredited by the bureau,” she said. (MAB 04/01)
Committee on Consumer Protection as one of the country’s best practices in consumer protection. The program includes setting up Consumer Welfare Desks (CWDs) in business places that provide accessible and speedy resolution to complaints from consumers, among others.
DTI Silver Seal of Excellence Awardees Awardee Willy and Sons Corp. Service RVT Merchandising Centro Department Store Olivan Builders’ Center ACC Hypermart CTL Trading Catanduanes Supermart Virac Fortune Enterprises One Centro Store
Business Location Albay Camarines Norte Camarines Norte Camarines Sur Catanduanes Catanduanes Catanduanes Catanduanes Sorsogon
DTI Bronze Seal of Excellence Awardees Awardee Chase Distribution Willy and Sons Corp. Nagaland E-Mall Lisam Enterprises Ten Seven General Merchandise S.V. Ang Hardware Corp.
Business Location Albay Albay Camarines Sur Camarines Sur Masbate Masbate
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2. Gov’t warns unaccredited stem cell therapy spas and salons
3. DTI-Iloilo holds Consumer Welfare Desk forum
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he government has warned the public against the stem cell therapy at spa centers and salons. The Department of Health (DOH) says no clinic or hospital in the Philippines can offer stem cell therapy without accreditation from DOH, noting that the Department has not accredited any clinic or hospital.
Stem cell therapy and treatment is a medical procedure that deals with ailments by replacing malignant cells with healthy cells. “Our efforts at regulating the practice of stem cell therapy in this country are aimed at safeguarding the welfare of patients and the general public,” Ona said. (PDI 04/01)
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Bagwis Seal of Excellence that signifies the store’s adherence to providing quality product and services.
he Department of Trade and Industry (DTI-Iloilo) held a Consumer Welfare Desk (CWD) Forum for CWD Officers of business establishments in Iloilo City.
Malones encouraged the 59 attendees to aim for the
1. DTI-Nueva Ecija posts highest mark ever in CSC Seal of Excellence Award across the bureacracy
“We will issue a warning for them to stop doing stem cell therapy. But if they continue despite warnings from us, that’s when we will move to close them down,” Ona said.
DOH Secretary Enrique T. Ona said DOH will coordinate with other government agencies like the Department of Trade and Industry (DTI) and local government units (LGUs) in policing
DTI-Iloilo Provincial Director Wilhelm M. Malones emphasized the significant role of CWDs in consumer welfare and protection.
Features
spas and salons from offering stem cell treatment.
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he Department of Trade and Industry (DTI)-Nueva Ecija made history after posting the highest mark ever in the Civil Service Commission’s (CSC) Citizen’s Satisfaction Center Seal of Excellence Award across the bureacracy. DTI-Nueva Ecija garnered a score of 98.46 points, higher than DTI-Region 3’s 95.08 score last year. CSC Chairman Francisco T. Duque and DTI Secretary Gregory L. Domingo conferred a plaque and P75,000 cash incentive to the officials and employees of the office headed by DTI-Nueva Ecija Provincial Director Brigida T. Pili in a ceremony at the Board of
He said the activity is regularly conducted as part of the DTI’s commitment to continuously upgrade the competence of CWDs in business establishments to be able to promptly and effectively address the concerns and complaints lodged by the consumers. Investments Office (BOI) in Makati City recently. Apart from Nueva Ecija, DTI offices in Bulacan and Pampanga were likewise conferred with the same award and cash prizes after obtaining scores of 95.87 and 90.37, respectively. The Citizen’s Satisfaction Center Seal of Excellence Award is conferred to central, regional, provincial, and field offices of national government agencies and local government units that have accumulated high marks in the report card survey (RCS) conducted by CSC as required by Republic Act (RA) 9485 otherwise known as the Anti-Red Tape Act (ARTA) of 2007.
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2. Starting a franchise business
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usiness franchising is one way to start a business.
There are two key players in franchising – the franchisor who owns the business and the franchisee who invests in the business owned by the franchisor by buying, putting up, and operating a branch or franchise. The franchisee will be given the rights to use the franchisor’s trademark or trade name and business format. They will also be taught practical business solutions, ways on how to operate business, and provided assistance on employee’s training and national advertising. Franchisees are also guided on how they will begin, run, and monitor the assets and operations of the business franchise. The following are things to look for in determining a potential franchise: 1. The franchisor owns the trademark registered and has documents issued by the Intellectual Property Office of the Philippines (IPOPHL) stating the ownership of the trade name and operations of the business. 2. The franchise business should be well-established and successful. 3. It has a clear and complete business operations system being implemented in all of the branches. 4. There should be a contract or Franchise Agreement that clearly states all the responsibilities of the franchisor and franchisee. 5. The franchisor must have necessary documents to prove the business legitimacy.
The franchisor must be registered with the following: a. Securities and Exchange Commission (SEC) for corporation or partnership and Department of Trade and Industry (DTI) for single proprietorship b. Bureau of Internal Revenue (BIR) for taxes c. IPOPHL for trademark d. Social Security System (SSS) for employee security and benefits e. Local government units (LGUs) for: i. Mayor’s Permit ii. Sanitary Permit iii. Building Permit iv. Other permits issued by the concerned municipality for business owners and operators f. Food and Drug Administration (FDA) for food, spa, salon, janitorial services, and pharmaceutical businesses g. Department of Transportation and Communications (DOTC) for Internet café and telecom businesses h. Department of Education (DepEd) for educational and review centers i. Bangko Sentral ng Pilipinas (BSP) for remittance service and pawnshops 6. The franchisor should have a physical office where future franchisees and prospect clients can go and visit, and have employees or staff members to assist. 7. The franchisor should be a member of any distinguished franchise association. For more information on franchising, contact DTI Direct 751.3330 and 0917.8343330 or visit www.dti.gov.ph.
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ASEAN Watch 1. PHL hosts Asia Pacific SME Working Group meeting
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he Philippines, through the Department of Trade and Industry’s (DTI) Bureau of Micro, Small, and Medium Enterprise Development (BMSMED), hosted the 36th Asia-Pacific Economic Cooperation (APEC) Small and Medium Enterprises Working Group (SMEWG) meeting on March 13-14, 2013. During the said meeting, member economies shared their
2. PHL eyed as “northern gateway” to ASEAN
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epartment of Finance (DOF) Secretary Cesar V. Purisima highlighted the increasing prominence of the Philippine economy in the Association of Southeast Asian Nations (ASEAN) at the recent Standard Chartered’s Singapore Forum 2013.
best practices and reports on new projects. APEC’s SMEWG works to encourage the development of SMEs and build their capacity to engage in international trade. In the APEC region, SMEs account for around 90% of all businesses and employ as much as 60% of the workforce.
which was attended by executives from leading corporations and institutional investors throughout Southeast Asia. “We in the Philippines look forward to ASEAN Integration in 2015. Our hope is that the Philippines will be the Northern and Pacific Gateway to ASEAN,” Purisima said. (PNM 03/27)
Purisima was invited as a panelist during the “Spotlight on ASEAN,”
3. PHL wins bid to host AsPac retail confab
he Philippines has won the right to host anew the Asia Pacific Retailers Convention and Exhibition (APRCE) in 2015.
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P747.1B Philippine total investments
It is the same event that placed the country in the global retail radar when Manila hosted it 22 years ago.
registered with the government’s major seven investment promotions agencies (IPAs) in 2011 vs. P697.7B in 2012
The Philippine Retailers Association (PRA), the country’s largest organization of retailers and suppliers, announced that it won the bid to bring the bi-annual gathering of the region’s retail industry leaders to the country for the second time during the Heads of Delegations (HOD) meeting of the Federation of Asia Pacific Retailers Association (FAPRA). APRCE is the longest running regional retail conference and expo in Asia Pacific. (TPS 03/28)
STATWATCH
P408.6B Investments put in by local investors in 2012
P289.1B PHL’s foreign investments in 2012
P230B Foreign investments in Q4 2012, the highest since 1996 P700M Fund for the government’s Shared Service Facilities (SSF)
P70M Fund for the government’s Industry Clustering Development (ICD) program
146,616 Jobs to be generated from total local and foreign investments in 2012
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(A synopsis of selected book acquisitions at the DTI-TIIC library)
Title : A Study on the Seaweed Industry Cluster 1 of Caraga Region
Publisher : National Economic and Development Authority Call Number : SITC 292.98/45 608/ NEDA/no date
Publisher : National Economic & Development Authority Call Number : 45 608/03.09.01/ NEDA/2011
This paper presents the Seaweed Industry Cluster and how it contributes to national as well as regional (Caraga) socio-economic development. It examines industry stakeholders and the employment it has generated since its implementation in the region. Containing data on seaweed production by area and volume, this document offers a list of top export and local buyers/traders.
This publication promotes Bicol Region’s business and investment opportunities inindustry, agriculture, tourism, infrastructure, governance, and socialdevelopment projects. It contains frequently asked questions on theinvestment potentials, competitive advantages, resources, capabilities,and cultures of the provinces and cities in the region.
Legend: MAB MAL MST PDI PNM TPS
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Manila Bulletin Malaya Manila Standard Today Philippine Daily Inquirer Positive News Media The Philippine Star
Title : Bicol Investment Promotion Guide
Entered as Third-Class Mail at the Makati Central Post Office under Permit No. 504 valid until 31 December 2013
Philippine Postal Permit No. PM-04-08
What’s New?
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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