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21 April 2014 1
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21 April 2014 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 BOI approvals to generate more jobs Inside DTI DTI boosts industries Good News, Philippines 1. WB sees PHL economic growth breaching 6.5% 2. Exports up 9.3% in January 3. PHL investors most upbeat on growth MSME News 1. DTI establishes National Quality Infrastructure for SMEs 2. DTI sets P342.6-M soft loans 3. DTI seeks more funds for MSMEs Business Update 1. BOI eyes changes to 2014 IPP 2. SEC warns public anew on investment scams 3. BPO centers outside NCR to draw more investors 4. Liberalized PHL economy a must for TPP
Consumer News 1. DTI cautions public against bogus freight forwarders 2. EDI recalls 59 Peugeot units 3. Medela conducts global voluntary field measure Features CITEM holds 59th Manila FAME to further exports promotion ASIAN Watch 1. ASEAN integration seen to benefit PHL banks 2. Pinoy SMEs on track to becoming reg’l players Statwatch What’s New?
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Focus BOI approvals to generate more jobs
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he Board of Investments (BOI) is expecting over 6,000 jobs to be generated from the 13 projects worth P30.24B approved in the first two months of the year. Job generation from said BOI approvals was 119% higher than the 2,847 jobs created from 27 approved projects in the same period last year. Moreover, BOI-approved projects in February this year alone rose by 140% to P22.50B from the P9.39B recorded in the same month in 2013. Local investors led the growth in investment approvals, chipping in P21.93B worth of projects in February alone, or 148-% increase from P8.84B in the same period in 2013. Approved investments from foreign companies also rose by 5.0% to P572.73M in February 2014 from P545.9M a year ago.
Inside DTI DTI boosts industries
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he Department of Trade and Industry (DTI) has lined up various programs to beef up the local manufacturing sector as part of the Industry Development Plan (IDP). For this year, DTI targets to implement six activities: • Continued implementation and monitoring of completed roadmaps; • Completion of remaining industry roadmaps; • Information dissemination on the industry roadmap contents; • Revival of the Industry Development Council (IDC); • Preparation of feasibility studies and capacity-building sessions for key stakeholders; and • Advocacy programs to undertake policy and industry-level reform.
Over 60% of the approved investments in February were poured into the real estate sector valued at P13.84B. SM Development Corporation (SMDC) has accounted for the bulk of investments with its P8.75-B low-cost mass housing projects in Pasay City and Quezon City. The electricity, gas, steam, and air conditioning supply sector gained P5.57B worth of investments or 25% of the total BOI approvals in February, mainly from Prime Meridian Powergen Corporation’s 115-megawatt (MW) San Gabriel Avion natural gas-fired power plant project in Batangas City. The construction sector got 11-% share at P2.55B, essentially from Bright Future Educational Facilities, Inc. for its Public-Private Partnership (PPP) project for school infrastructure in Region 1.
“The revival of the manufacturing sector is key to inclusive economic growth because it will generate much-needed employment and help the country tap regional production networks. This will require industrial transformation under a comprehensive national industry strategy,” DTI Industry Development Group (IDG) Undersecretary Adrian S. Cristobal Jr. said. Under the IDP, the private sector leads the crafting of their respective roadmaps. “The roadmaps envision a growth trajectory for the next 15 years, as well as plot policy and industrylevel support measures to help achieve industry goals,” Cristobal said. More than 30 industries have expressed their interest to craft their own roadmaps.
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Roadmaps of aerospace, bamboo, coco coir, and creative industries are expected to be finalized this year.
processed foods, processed meat and marine products, shipbuilding, garments, printing, and home appliance to be completed this year.
The DTI also sees roadmaps of medical travel, mineral processing,
Industries that have already submitted roadmaps
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Good News, Philippines! 1. WB sees PHL economic growth breaching 6.5%
Automotive Automotive parts Biodiesel Cement Ceramic tiles Chemicals Copper and copper products Electric vehicles Electronics Furniture Iron and steel
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he World Bank (WB) said the Philippine economic growth would breach 6.5% in 2014 and 2015 as reconstruction spending would offset the adverse impact of typhoon Yolanda on the country's economy. In its latest report, the Washingtonbased lender projected gross domestic product (GDP) growth for 2014 and 2015 to hit 6.6% and 6.9%, respectively. The government has targeted GDP increase of 6.5%-7.5% this year. "These projections crucially depend on the speed and scope of the reconstruction program. In the short-term, a well-designed and rapidly executed reconstruction program can boost economic growth beyond current projections," the WB said.
2. Exports up 9.3% in January
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xport revenues in January this year rose by 9.3% year-on-year to USD 4.38B due to higher shipment of electronic products, the Philippine Statistics Authority (PSA) said.
• • • • • • • • • •
Information Technology-Business Process Management (IT-BPM) Manufacturing Mass housing Metal casting Motorcycle Petrochemicals Plastics Pulp and paper Rubber products Tool and die and natural health products
The government launched recently a typhoon reconstruction program requiring USD 8B. The WB said the speedy implementation of the reconstruction program would partially offset the decline in consumption and keep GDP growth strong. Despite the onslaught of super typhoon Yolanda and a string of natural disasters throughout 2013, Philippine economic growth managed to accelerate to 7.2% last year owing to the country's strong macroeconomic fundamentals. In the medium-term, WB said the Philippines could sustain a growth of above 6% if the government would accelerate infrastructure spending. The Philippine government is targeting to double spending to 5% of GDP by 2016 from 2.5%. (TPS 17/3) PSA said electronic products remained as the country's top export item during the period, accounting for nearly 41% of revenues in January. Receipts from electronic products went up by 22.1% to USD 1.79B.
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The Department of Trade and Industry (DTI) earlier projected a 7-% growth for exports this year. The anticipated increase in demand
for Philippine products in traditional markets coupled with the peso depreciation is projected to boost exports in 2014. (TPS 11/3)
PHL top export products January 2014
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3. PHL investors most upbeat on growth
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hilippine investors are the most upbeat in Asia over economic growth prospects, a survey conducted by Manulife Financial showed.
Manulife Philippines President and Chief Executive Officer (CEO) Ryan Harland said the Philippines emerged at the forefront of Southeast
1. DTI establishes National Quality Infrastructure for SMEs
• Japan • United States (U.S.) • China • Singapore
Electronic products Woodcrafts and furniture Machinery and transport equipment Metal components Clothing Chemicals Other mineral products
Manulife Investor Sentiment Index for Asia showed that Philippine investor sentiment, along with a growing interest towards equities, lifted overall regional investor sentiment slightly higher in the fourth quarter of 2013.
MSME News
Top export markets January 2014
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he Department of Trade and Industry (DTI), through the Bureau of Product Standards (BPS) and the Philippine Accreditation Office (PAO), recently conducted workshops on Voluntary Standardization and Certification to improve the competitiveness of local small and medium enterprises (SMEs). As part of the Trade Related Technical Assistance (TRTA) Project 3, the workshops focused on the vital role of the National Quality Infrastructure (NQI) to ensure efficient consumer protection in the country
Asia’s developing markets, based on the strong gross domestic product (GDP) growth for two consecutive years in 2012 and 2013. “The upbeat sentiment of Philippine investors at 66 points mirrors the consumers’ mounting confidence in this economy which has been able to withstand natural disasters as well as tolerate global market volatility. Investors’ high sentiment is also an indicator of the growing demand for investment vehicles enabling them to take advantage of market conditions and strong economic fundamentals,” Charland said. (TPS 10/3)
and access for Philippine exports to global markets. Through the NQI, quality and safety tests that otherwise are not administered here in the country, will be made available and accessible to the local enterprises. These include high-end metrology tests for specific agro-industrial products that Philippine laboratories and certification bodies may not yet have achieved accreditation for. At present, SMEs wanting to qualify for export markets have to bring
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samples of their products to other countries like Singapore for testing and certification. TRTA 3 embodies the long-standing partnership between the Philippine government and the European Union (EU) in promoting trade as key to poverty reduction and inclusive growth. As one of the project components, NQI serves to be the interconnected and harmonized strategy for standards, testing, certification, accreditation,and metrology directed toward the integration of Philippine industries in world trade.
2. DTI sets P342.6-M soft loans
“TRTA 3 works to raise the stakeholders’ general awareness of the importance and benefits of voluntary standardization and the services to be offered by a National Standards Body,” Office of Special Concerns (OSC) Director Lydia R. Guevarra said.
The NQI platform is being organized through a convergence of national
Guevarra, who also sits as TRTA 3 Imprest Administrator, said these workshops will be followed by similar capacity building exercises.
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DTI Secretary Gregory L. Domingo said ERF is also available to MSMEs in other areas hit by Typhoon Yolanda.
he Small Business Corporation (SB Corp.), Department of Trade and Industry’s (DTI) financing arm, has allocated a total of P342.6M for soft loans for Typhoon Yolanda-affected micro, small, and medium enterprises (MSMEs) in Region 8. The DTI said it opened Enterprise Rehabilitation Financing (ERF) for MSMEs to have an access to finance for them to get back to entrepreneurial activities.
3. DTI seeks more funds for MSMEs
government agencies that also include the Departments of Health-Food and Drug Administration (DOH-FDA), Agriculture (DA), and Science and Technology (DOST), together with private sector organizations.
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he Department of Trade and Industry (DTI) is seeking more funds to implement programs to support the growth of micro, small, and medium enterprises (MSMEs) in the country.
The loan for Typhoon Yolandaaffected MSMEs is considered as soft loans as SB Corp. gives an annual interest rate of only 5.0% to 6.0%, with no collateral, and with one-year grace period.
to support MSMEs,” DTI Secretary Gregory L. Domingo said. For this year, the DTI has allotted up to P1B for programs, with the bulk or P770M to be spent for the Shared Service Facilities (SSF) program.
“We’re pushing that in 2015, we can get additional budget
Business Update 1. BOI eyes changes to 2014 IPP
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he Board of Investments (BOI) plans to introduce changes to 2014 Investment Priorities Plan (IPP) by coming up with more specific sectors and removing broad categories in the list of
activities which can qualify for incentives. Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said he would want
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this year’s investment promotions blueprint to be different from the previous years. “We have to be more selective to those that are really important to us so that’s why I want to get away
2. SEC warns public anew on investment scams
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he Securities and Exchange Commission (SEC) has warned the public anew against conducting business with numerous firms not permitted to sell investment instruments. The SEC said the public should take note that the Court of Appeals in 2010 affirmed a cease and desist order that prevented the following companies from selling investment contracts and preferred shares:
• Crown Regency Holiday International Inc.
• Fuente Triangle Realty Development Corp.
3. BPO centers outside NCR to draw more investors
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he development of integrated, mixed-use centers outside Metro Manila will drive business process outsourcing (BPO) and other global investors to continue their operations and expansion in the country, real estate services and advisory firm CBRE Philippines reported. These BPO lifestyle destinations will provide work-play components where workspace and facilities are developed alongside leisure elements such as restaurants and recreational establishments. CBRE Philippines Chairman Rick Santos identified three areas outside Metro Manila that are deemed
4. Liberalized PHL economy a must for TPP
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he United States (U.S.) Chamber of Commerce advised the Philippines to liberalize its economy if and when it decides to join
with our broad categories in the IPP,” said Domingo. The sectors that will make it to this year’s IPP will be determined based on an analysis of measured capacity, demand, and the gap between the two. (TPS 10/3)
• Megatrend Realty Network Inc., and • Boracay Multiple Properties Developers Inc.
These companies, SEC said, have yet to comply with the requisite registration statement for the securities. The SEC also issued a warning against Xingasia Marketing Corp., which is offering investment opportunities like ‘corporate bond notes’ through subsidiaries Xingasia Lending & Investors Corp. and Xingasia Invest & Trust Bank Corp. (TPS 16/3)
the “ripest” for expansionary growth, as they have over 70% of the country’s potential labor pool:
• Clark, Pampanga (Global
Gateway Logistics Center)
• Metro Cebu (Cebu Business Park) • Mactan (Mactan Export Processing Zone). “The need for workforce with a higher level of English proficiency will make it even more convenient for BPOs to move from, rather than populate, the congested districts. Developing these areas will provide more job opportunities for people within and in neighboring places,” Santos said. (TPS 21/3)
the Trans Pacific Partnership (TPP) agreement. “You should start liberalizing as quickly as possible because
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you will have to go to each of the current 12 TPP partners and get their support. It has to be unilateral,” U.S. Chamber of Commerce Vice President for Asia Tami Overby said on the sidelines of the 2014 Asia Pacific Council of American Chambers Spring Summit last month. Overby said the Philippines must decide if joining the TPP would be best for its national interest, as this would entail commitments
Consumer News 1. DTI cautions public against bogus freight forwarders
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he Department of Trade and Industry (DTI) advised consumers to be more watchful of bogus sea freight forwarders and their corresponding Philippine agents. DTI Consumer Protection Group (CPG) Undersecretary Victorio Mario A. Dimagiba said they have received numerous complaints against the identified freight forwarders for not delivering cargoes to their rightful owners. The corresponding Philippine agents are now facing criminal and administrative charges. The Philippine Shippers’ Bureau (PSB) has also particularly cautioned Overseas Filipinos (OFs) in Germany to avoid dealing with a certain Alexander D. Cunanan doing business as ADC Spedition Services.
2. EDI recalls 59 Peugeot units
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urobrands Distributor Inc. (EDI), Peugeot’s official dealer in the Philippines, began a limited nationwide recall of 59 units from some production batch of the car brand’s 508 and 5008 models last month. The recall of the vehicles follows the worldwide recall program of France-based PSA Peugeot Citroën, Peugeot’s manufacturer.
to high-level standards and market liberalizing measures. For his part, Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said while the Constitution’s limits on foreign ownership in certain sectors are not seen to meet TPP members’ standards, the government plans to seek flexibility to be allowed to join the pact. (TPS 21/3)
Beware of these foreign sea freight forwarders and their local partners
• • • •
Philbox Direct Ltd. in the United Kingdom (UK) and Springer International Al Rodah Marine Cargo in the United Arab Emirates (UAE) and D’ Winner Logistics Philippines, Inc. Kabalen Forwarders in Saudi Arabia Alexander D. Cunanan doing business as ADC Spedition Services
PSB has already filed a formal charge against ADC Spedition Services for engaging business as freight forwarder without accreditation and for not delivering cargoes to their consignees. For the latest PSB advisory, visit http://www.dti.gov.ph/dti/ index.php?p=779. The limited recall campaign entails inspection, repair, and replacement of the vehicles’ brake booster, which is said to possibly cause a warning light on the instrument panel to accidentally activate. There will be no charge for parts and services for vehicles covered by the recall, 44 of which are from the 508 line and 15 from the 5008 line.
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3. Medela conducts global voluntary field measure
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edela AG (Medela) carries out a worldwide voluntary field measure of units of their B-Well Steam Steriliser that has the possibility of gathering moisture at the part connected to the power cable.
In the Philippines, 43 of the affected units of the sterilizer have been shipped and distributed to official local dealers. Customers are advised not to use the product and return it for a refund. They are also assured that the local distributor has the contact details of purchasers of the affected units and will get in touch with them.
No incident has been reported due to the peculiarity in the sterilizer, but it poses a risk of fire, burn, or electrocution.
Features CITEM holds 59th Manila FAME to further exports promotion
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he Center for International Trade Expositions and Missions (CITEM), the Department of Trade and Industry’s (DTI) marketing arm for exports, organized the 59th edition of the bi-annual Manila Furnishings and Apparel Manufacturer’s Exchange (FAME) last 14 to 17 March 2014 at the SMX Convention Center, Mall of Asia (MOA) Complex, Pasay City.
“Red Box is the perfect platform for budding designers, as well as local manufacturers to exchange knowledge on design, innovation, and craftsmanship. It really helps parties realize their concepts and ideas,” CITEM Executive Director Rosvi C. Gaetos said.
Among the trade fair’s event highlights was the Red Box, CITEM’s design development program, which places young, new designers under Manila FAME Creative Director Budji Layug’s tutelage and also partnering them with local manufacturers to produce ingenious designs and creations.
Another highlight was the One Town, One Product (OTOP) Marketplace which featured products of micro, small, and medium enterprises (MSMEs) from areas in Visayas most affected by Typhoon Yolanda.
The Red Box for the event’s March 2014 edition featured talents from Cebu, among others.
Another featured activity was the Katha Awards, seen as the most
59th Manila FAME event highlights
• • • •
Craft Spots • Design for Exports Scenography • Design Week Philippines • Katha Awards • Red Box participants
• • • • • • •
Angela Angeles Earl Gariando Eneri Abillar Jaggy Glarino Joco Comendador Leah Sanchez Leeroy New
• • • • • •
Lilianna Manahan Marga Espiritu and Vernice Songco Martha Rodriguez Neil Felipp Patty Eustaquio Rei Escario
Manila Wear OTOP Marketplace Red Box Weaves of the Philippines
• • • • • •
Renan Pacson Rencie Santos Ronald Ramiro Rossy Rojales Sheila Damaerio Yves Caminque
Katha awards winners Best Product Design • Angler Lamp by Miguel Aguas - Home/Furnishing category • Bordeaux Chair by INDUSTRIA - Furniture category
•
Crocheted Handbag with Real Twig by Ann Pamintuan - Fashion category • Bird Ornament with Capiz Wings by Navidad Crafts - Holiday decor category Eco-Design Award -Poi necklace by Floreia
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prestigious awards for Philippine designs which recognize Filipino craftsmanship and artisanship. Manila FAME is the only trade show in the country approved by the Union des Foires Internationales (UFI) or the Global Association of the Exhibition Industry, and is the second longest-running in the Asia Pacific region. (TPS 8/3, 15/3)
ASEAN Watch 1. ASEAN integration seen to benefit PHL banks
P30.24B Board of Investments (BOI)-approved projects in January 2014
P22.50B BOI approvals in February 2014, 140% higher than P9.39B recorded in February 2013 P21.93B Share of local investors
P
in BOI-approvals for February 2014, or 148-% increase from P8.84B in the same period in 2013
“We think this is going to lead to greater market opportunities, [and] at the same time will generate more competition,” Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. said.
revenues in January 2014, a 9.3-% growth year-on-year due to higher shipment of electronic products. Receipts from electronic products went up by 22.1% to USD 1.79B.
He added that this will also provide greater exchange of technology and innovation and lead to more efficient banks.
P342.6M Soft loans set by the Small Business Corporation (SB Corp.) for Typhoon Yolandaaffected micro, small, and medium enterprises (MSMEs) in Region 8
hilippine banks are expected to benefit from the Association of Southeast Asian Nations’ (ASEAN) financial integration program.
The ASEAN aims to create an integrated economic community by 2015. The Asean Banking Integration Framework (ABIF) is expected to be implemented by 2020. (TPS 9/3)
2. Pinoy SMEs on track to becoming reg’l players
STATWATCH
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hilippine small and medium enterprises (SMEs) in the supply chain have bigger opportunity to grow in the Association of Southeast Asian Nations (ASEAN) economic integration, according to the ASEAN Business Advisory Council (ABAC) member and SM Investments Corp. (SMIC) Vice Chairperson Teresita T. Sy-Coson. “SMEs can grow beyond national boundaries and these include
USD 4.38B PHL export
6,000 Jobs to be generated
from BOI approvals in January 2014,
119% higher than the 2,847 jobs created from 27 approved projects in the same period in 2013
Filipino companies,” SM Vice President for Corporate Governance & Risk Management Gil Gonzales said. These enterprises can tap into some of Asia’s fastest-growing economies and benefit from increased market access to the four new ASEAN members, namely Cambodia, Laos, Myanmar, and Viet Nam. (TPS 17/3)
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(A synopsis of selected book acquisitions at the DTI-TIIC library)
Legend: TPS
Title: Mobilizing Business for Trade in Services
Title: ResultBased Management Framework in the Philippines: A Guidebook Publisher: Asian Development Bank Call Number: 45 608/03.15/ADB/2013
Publisher: International Trade Center Call No.: 07.03/ITC/2013
The guidebook provides useful insights on performance management with its discussion on living within one’s means (aggregate fiscal discipline), spending on the right things (allocative efficiency), and obtaining the best value for money (operational/technical efficiency). It helps reader understand the results-based management framework (RBMF) and how it should develop given the current reform thrust of government and the shift from outputs to outcomes. Also shows how the principles under the RBMF emphasize the importance of the government’s goal of establishing a more transparent, accountable, and participatory-culture. 66p.
This book helps government and business to collaborate effectively and to assist in training on trade negotiations and export strategies. It summarizes key arguments on the role of services in development, provides analysis and explanation of the regulatory reforms and trade negotiations needed to foster a vibrant services sector in developing countries. It also reviews the following individual sectors: tourism; transport and logistics; communications; audiovisual; computer and business process outsourcing; financial services; professional and other business services; construction; distribution; and cultural and recreational services. 156p.
Entered as Third-Class Mail at the Makati Central Post Officeunder Permit No. PM-04-08 valid until 31 December 2014
Philippine Postal Permit No. PM-04-08
What’s New?
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- The Philippine Star
Editor-in-Chief: Anne L. Sevilla Managing Editor: Vic S. Soriano Associate Editor: Resty P. ParWriters: Jam H. Raposon, Hazel S. Dizon, Joanna D. Cruz, Airiz A. Casta, Kit S. Andaya Design/Layout: Ren C. Neñeria Circulation: Kit S. AndayaTo subscribe, email: publications@dti.gov.ph