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June 03, 2013 1
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June 03, 2013 Vol. 17, No. 11
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 approves P34-B investments in Q1
Inside DTI 1. DTI taps BancNet, DBP for e-payment 2. Balik-Eskwela Diskwento Caravan held in Marinduque, Quirino Good News, Philippines! 1. Japan agency upgrades PHL rating 2. P30-B tourism investments bared 3. Domingo expects 10-% increase in foreign investment inflow in 2013
Business Update 1. LGUs pressed to monitor tobacco sales 2. LGUs encouraged to cooperate to boost PHL competitiveness 3. Business encouraged to improve quality of education Consumer News 1. Public alerted on misused butane canisters 2. Inflation eases to 13-month low Features Gourmet-coffee supplier cites benefits from DTI's DBFTA info sessions
MSME/OTOP News 1. DTI allocates P27.12M for SSF project in Zamboanga 2. DTI optimistic on increased abaca and piña sales 3. DTI conducts free entrep sessions
ASEAN Watch 1. Q1 tourist arrivals bring 'more fun' with 1.27M visitors 2. PHL can be a new growth market for automotive Statwatch What’s New?
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Focus BOI approves P34-B investments in Q1
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he Board of Investments (BOI) registered P34.33-B investments in the first quarter of the year, or 86.88% better than the P18.37B generated in the same period last year, mainly buoyed by strong local investments.
The BOI attributed the increase in investments to the power-energy sector which has come at a critical time to meet the demands of generating enough power for household and industrial consumption.
Local investments accounted for 95.78%, or P32.88B of total committed investments. Foreign investors contributed only 4.22%, or P1.45B, in the period.
Given the urgent situation, power projects are expected to dominate the investment landscape to meet such growing demand in line with the government’s policy thrust to further expand the use of renewable energy (RE) while accelerating the exploration of petroleum and coal plants under the Philippine Energy Plan (PEP) 2012-2030.
A total of 55 projects were approved in the first quarter, which are expected to generate 7,024 jobs once fully operational. Big-ticket projects under the power-energy sector, such as Petron Corporation’s P11.18-B solid fuel-fired power plant in Bataan, underpinned the surge in the first quarter investments. Bac-Man Geothermal Inc., a renewable energy developer, is also investing P5.11B in Sorsogon. This sector generated total committed investments of P16.55B or 48.20-% share of total, followed by the real estate activities sector with P8.3B or 23.97%. The transportation and storage sector, which includes hotels, resorts, and other accommodation facilities, generated P2.98B, accounting for 8.68%.
Inside DTI 1. DTI taps BancNet, DBP for e-payment
From 2012 to 2015, the government is targeting to generate 1,388 megawatts (MW) of RE supply to meet public demand. Meanwhile, the increase of investments in the housing sector will address the 3.5M housing backlog in the country. Demand for mid-priced and low-end housing is expected to remain strong in the coming years and developers are expected to capitalize on that demand by building more projects.
Investments in the manufacturing sector amounted to P853.28M or 2.48% of total investments.
In terms of nationality, the United States (U.S.) contributed the most foreign capital investments amounting to P111.30M or 7.68% of the total foreign investments, followed by People’s Republic of China, P66.10M; and Japan, P44.59M. (MAB 05/09)
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scheme to help boost the number of business name registrations as well as the percentage of online transactions.
DTI Secretary Gregory L. Domingo said he expects the e-payment
DTI registers about 300,000 business names yearly and about 5% of these registrations are online, with the payments still being done at DTI offices.
he Department of Trade and Industry (DTI) has tapped BancNet and the Development Bank of the Philippines (DBP) as online payment partners for its Enhanced Business Name Registration System (EBNRS).
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Domingo said he expects other public services to be payable online soon, especially those that have to do with ease of doing business as well as regular transactions such as automotive registration and tax payments.
savings, and universal banks that accept online banking transactions.
“That will save the public a lot of time and effort since they no longer have to commute to and from government offices and wait in line. They can transact in a matter of minutes in the comfort of their homes, using secure online portals,” Domingo said.
“These include the Social Security System (SSS), Bureau of Internal Revenue (BIR), PhilHealth, and today the DTI who have partnered with us on this payment gateway,” he said.
BancNet President Robert P. Plas said e-payments would be extended to 20M ATM cardholders from 26 bank members composed of rural,
2. Balik-Eskwela Diskwento Caravan held in Marinduque, Quirino
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he Provincial Offices of Department of Trade and Industry (DTI) in Marinduque and Quirino held their respective Balik Eskwela-Diskwento Caravan in May by providing the consumers, especially the parents, access to discounted school items and other products. After the successful conduct of Diskwento Fair at Diffun town last year, the DTI-Quirino duplicated the activity this time at the Provincial Capitol Grounds. Some 21 entrepreneurs participated in the event that offered 10-% discounts in items such as school supplies, uniforms, bags, shoes, and other basic commodities.
Good News, Philippines! 1. Japan agency upgrades PHL rating
“BancNet group can readily fill the payment and settlement needs of both private and government institutions,” Blas said.
DBP President and CEO Gil Buenaventura said the state-owned bank, in serving as the depository bank for the e-payment facility, seeks to encourage the opening of more micro, small, and medium enterprises (MSMEs). On the same note, DTI-Marinduque conducted its annual Balik Eskwela-Diskwento Caravan in front of the Sta. Cruz Municipal Hall. DTI-Marinduque Provincial Director Carlito Fabaleña said the event hoped to help alleviate the financial needs of parents who have kids in schools. A total of eight entrepreneurs set up their respective stalls which offered discounted school supplies and basic necessities. The caravan was scheduled to visit all the six towns of Marinduque.
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JCRA noted the country’s robust economic growth achieved against the backdrop of sound fiscal management.
The upgrade followed similar actions from major credit raters Fitch Ratings and Standard & Poor’s Ratings Services (S&P) which earlier gave the country an investment grade.
In particular, it projected the country to grow by 6% in the years to come buoyed mainly by large remittances from overseas Filipinos (OFs) and revenues from business process outsourcing (BPO) activities. (TPS 05/08)
apan Credit Rating Agency Ltd. (JCRA) has revised its credit rating for the Philippines up one notch from BB+ to BBB-, with a stable outlook.
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2. P30-B tourism investments bared
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he private sector is pouring in some P30B in the tourism sector, strengthening the industry’s claim to be a new engine for the country’s economic growth. The Department of Trade and Industry (DTI) said while bulk of the investments are in Metro Manila, there are a rising number of investments in key tourism destinations like Davao del Sur, South Cotabato, Cebu, Zambales, Benguet, Pampanga, and Palawan. Based on the National Tourism Development Plan (NTDP) of 2010-2016, the private sector is expected to invest some P192B in hotels, resorts, leisureentertainment-shopping, health and wellness, convention and event/ exhibition, as well as cruise and transportation facilities. To encourage these investments, the government will be pouring in some P74B in infrastructure, tourist-site improvement, and marketing support.
3. Domingo expects 10-% increase in foreign investment inflow in 2013
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he two credit upgrades should lead to more than 10-% increase in foreign direct investments (FDIs) inflow into the country this year, Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said. Just recently, the country received investment grade ratings from Fitch Ratings and Standard and Poor’s Ratings Services (S&P). “We should expect continuous growth in investments in both pledges and actual construction and in the hiring of employees. The expectation
The NTDP is a P266-B national blueprint to enhance the tourism industry’s potential as economic driver. The plan’s accomplishment will enable the government to reach its targeted 10M-12M foreign tourist arrivals and 36M domestic travelers by 2016. The DTI said investments in new tourism accommodations and facilities have been steadily increasing the past three years. From 16 projects costing P3.9B in 2010, registered tourism projects jumped to 21 with a total estimated project cost of P12.88B in 2011. In 2012, there were 22 registered tourism investments, although the estimated total cost of these projects fell slightly to P12.7B. These P30-B investments from 2010 to 2012 ranged from new tourism accommodations and medicaltourism facilities, and renovations or expansion of existing hotels and resorts. (BMI 05/06)
should be bigger than last year, it should be more than 10%,” Domingo said. He said the projected increase in investments would be reflected in the performance of the various investment promotion agencies of the government, including the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA). Domingo said investments started coming in 2011 and have been accelerating since then. He also cited the unprecedented number of foreign business delegations into the country.
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MSME/OTOP News 1. DTI allocates P27.12M for SSF project in Zamboanga
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he Department of Trade and Industry (DTI) has allocated some P27.12M for shared service facilities (SSF) in Zamboanga Peninsula to be implemented this year. SSF is a DTI flagship project that aims to improve the quality and productivity of micro, small, and medium enterprises (MSMEs) by addressing the gaps and bottlenecks in the value chain of priority industry clusters through the provision of processing or manufacturing equipment, tools, and machinery. DTI-Zamboanga Peninsula Director Nazrullah Manzur said the priority industry includes the six regional champion products, namely rubber, seaweeds, coconut, mango,
2. DTI optimistic on increased abaca and piña sales
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he Department of Trade and Industry (DTI) has expressed optimism that the newly installed shared service facilities (SSF) in Aklan will increase the sales of abaca and piña products in the province by over 50% this year from P6.9M in 2012. The handlooms were given to the Handicraft of Aklan Multi-Purpose Cooperative (HAMPCO) that has 385 members and 11 workers. The cooperative’s main products include abaca silk, abaca piña, abaca basket weave, piña cloth, and abaca cloth, piña seda shawl, and piña seda barong which are sold
3. DTI conducts free entrep sessions
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he Department of Trade and Industry-Bureau of Micro, Small, and Medium Enterprise Development (DTI-BMSMED) is currently holding free entrepreneurship sessions to encourage the creation of new businesses and support the growth of micro, small, and medium enterprises (MSMEs).
abaca, and processed fish. Also included are products or industries on calamansi, banana, bamboo, Pangasius, dairy, and tourism. Manzur said the DTI aimed for 19 SSF projects, 11 of which are for Zamboanga City, five for Zamboanga del Sur, and one each for Zamboanga del Norte, Zamboanga Sibugay, and Isabela City. (Zambotimes 05/02) Approved SSF projects • • • • • •
Coco-coir processing equipment Bamboo processing facilities Abaca processing equipment Coco-based processing facilities Seaweed post-harvest facilities Mat, slippers, and bag-making equipment • Bangus processing facilities
in Boracay, Cebu, Pampanga, and Palawan and exported to Japan, France, and Italy. The DTI also encourages micro, small, and medium enterprises (MSMEs) to take advantage of the equipment and technology made available by the SSF to be competitive in the domestic and international market. The Department said it has also extended services like productivity and technology upgrading, product development, promotion and marketing assistance, financing facilitation, and organizational development. These sessions would help prospective entrepreneurs identify business opportunities, and provide information on how to grow their businesses. “Start-ups are crucial to the economic development, and direct job creations at the local and national levels,” BMSMED Officer-In-Charge (OIC) Jerry Clavesillas said.
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Business Update 1. LGUs pressed to monitor tobacco sales
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he Department of the Interior and Local Government (DILG) has asked local government units (LGUs) to closely watch tobacco retailers in their areas and assist the Inter-Agency Committee on Tobacco (IACT) headed by the Department of Trade and Industry (DTI) in implementing Republic Act (RA) 9211 or the Tobacco Regulation Act of 2003.
disregard the regulations set in the RA 9211, particularly provisions against the conduct of sale to minors and the posting of signage indicating that minors are not allowed to buy tobacco products. Reportedly, retailers no longer verify the age of suspected minors by requesting for proof of their age. (TPS 05/07)
This comes after the IACT received feedbacks that most tobacco retailers
2. LGUs encouraged to cooperate to boost PHL competitiveness
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he National Competitiveness Council (NCC) has called for the active participation of local government units (LGUs) in improving the country’s competitiveness rating in terms of ease of doing business. During the recent Ease of Doing Business Summit, the plan was formed to raise the country’s competitiveness rank through reforms developed by both the government and private sector on business-regulatory practices to make it simple for businesspeople to run their businesses. LGUs are seen as an integral part in the implementation of this plan as a number of permits required in putting up a venture, aside from those from national agencies, come from them. “The NCC has taken local governments into account in crafting the game plan. In fact, four [out of 10] indicators have some local government participation,” NCC Co-Chairman Guillermo M. Luz said.
3. Business encouraged to improve quality of education
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usinesses are encouraged to hire individuals participating as volunteer educators because this would help improve the quality of education in the Philippines and benefit the company as these individuals already possess leadership skills.
The country is targeting to rank as high as 38th in the next Doing Business (DB) Report by the World Bank-International Finance Corp. (WB-IFC), which is expected to be released by October. In the 2013 DB Report, the Philippines ranked 135th place out of 185 economies and 8th out of 9 in the Association of Southeast Asian Nations (ASEAN). According to the NCC, the targeted 38th rank is attainable if recommendations and reforms are accomplished by July 1, 2013 in four big-impact indicators, namely starting a business, getting credit, protecting investors, and resolving insolvency. Otherwise, the country would only hit the 109th rank if the recommendations and reforms are completed by July 1 at medium pace on seven indicators—starting a business, dealing with construction permits, registering property, protecting investors, paying taxes, and resolving insolvency. (BMI 05/04) During a joint membership meeting of the Management Association of the Philippines (MAP) and Makati Business Club (MBC), Teach for All Co-Founder and Chief Executive Officer (CEO) Wendy Kopp cited the benefits of hiring persons involved
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in programs with similar undertakings as the organization. MBC Chairman Ramon del Rosario Jr. said the quality of education has a direct effect on the economy, stating that low quality of education may result in under qualified graduates with low work preparedness. Boosting participation in endeavors to improve the quality of education through active employment of individuals with experience as volunteers in these programs would therefore help businesses
Consumer News 1. Public alerted on misused butane canisters
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he Department of Trade and Industry (DTI) has warned consumers against the use and/or refilling of butane canisters with liquefied petroleum gas (LPG). Philippine National Standard (PNS) 03-01:2000 requires only welded steel cylinders with water capacity of 1-150L be used for LPG containment and transport. Unlike mandatory LPG tanks, butane canisters are made only of tin which is thinner than steel, leading to a high probability of LPG leaks from such containers. This may
2. Inflation eases to 13-month low
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onsumer prices rose the slowest in 13 months in April, easing across all commodity groups except school products and services, the National Statistics Office (NSO) reported. Inflation slid to 2.6% in April, the slowest since March 2012 when
who would also gain staff with leadership skills without needing to train them. “There are companies who look at people like that as ideal employees. I would not be surprised if it happens here,” del Rosario said. Teach for All is a worldwide network of national organizations which aims to develop educational opportunities in member countries. Recruits would teach in high-need schools for two years then address the cause of educational need throughout their lives. (TPS 05/06) cause fire and explosion and places the user at great risk. The public is also reminded to carefully read canister labels to guarantee that it contains butane and not LPG or other flammable gases. As stipulated in Article 77, or the Minimum Labeling Requirements for Consumer Products of Republic Act 7394 (RA 7394) known as the Consumer Act of the Philippines, manufacturers and/or refillers are required to indicate their products’ contents and general or active ingredients. a similar uptick was recorded. The figure also represented a slowdown from 3.2% last March. For the first four months, inflation likewise slowed to 3% from the first quarter’s 3.2%. Bangko Sentral ng Pilipinas (BSP) has set a 3%-5% inflation target this year. (TPS 05/08)
Consumer Price Index (CPI) Commodity Groups March 2013 or Previous month/s* (%) Housing, electricity gas, 2.1 and other fuels Food and non-alcoholic beverages 2.8 Volatile oil and food prices 3.8 Alcoholic beverages and tobacco 31.4* Others: Communication Health Furnishing and household equipment
0.5 3.2 4.8
April 2013 (%) 1.3 2.2 3.1 0.1 0.3 3.0 4.0
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Features Gourmet-coffee supplier cites benefits from DTI's DBFTA info sessions
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top supplier of gourmet coffee to the country’s premier hotels and restaurants is citing the assistance the Department of Trade and Industry (DTI) has provided in the company’s quest to expand its market overseas. “The individual progress of exporters like Culinary Exchange is a testimonial to the effectiveness of DTI’s exporter-assistance programs,” DTI Undersecretary for Industry Development and Trade Policy Group (IDTPG) Adrian S. Cristobal Jr. said. The Doing Business in Free Trade Areas (DBFTA) program is a joint undertaking by the DTI’s Bureau of Export Trade Promotion (BETP) and Philippine Trade Training
ASEAN Watch 1. Q1 tourist arrivals bring 'more fun' with 1.27M visitors
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irst quarter visitor arrivals reached 1.27M accounting for 23% of the target arrivals for the year and a 10.76-% growth from last year’s 1.15M in the same period. Top 5 leading visitor market Country Korea United States Japan China Taiwan
Arrivals 328,454 186,065 114,269 98,242 53,867
% Share 25.86 14.65 9.00 7.74 4.24
Center (PTTC) with the Bureau of Customs (BOC), the Tariff Commission (TC), the Philippine Chamber of Commerce and Industry (PCCI), and the Philippine Exporters Confederation, Inc. (PHILEXPORT). “The information sessions have made us aware of the different regulations, protocols, and standards of the markets we are trying to reach,” said Culinary Exchange Operations Manager Marie Franchette Batario. “We also became aware of market preferences not only in terms of products that sell, but how customers in certain areas want the products processed and packaged,” Batario said.
This marks the second time that foreign tourist arrivals breached the 1-M mark in the first quarter, setting the pace for the Department of Tourism (DOT) to reach its 5.5M arrival target for 2013. Other key markets contributing significant arrival volume include Australia, Singapore, Canada, Hong Kong, United Kingdom, Malaysia, and Germany. “Month after month, we bear witness to a steady upward performance and new record highs,” DOT Secretary Ramon Jimenez Jr. said.
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2. PHL can be a new growth market for automotive
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he Philippine Institute for Development Studies (PIDS) said the Philippines has the potential to grow the automotive industry to further boost the country’s economic growth. PIDS Senior Research Fellow and Acting Vice-President Rafaelita M. Aldaba said an automotive industry roadmap will lead to the foundation of the broad-based industrial growth. The automotive industry, a highly global and technology-driven industry, is complex with large number of parts and components like textiles, glass, plastics, electronics, rubber, steel, and other metals that involve different production processes. “Forecasts show that Asia will be the most dynamic market in the world especially with the steady growth of China, India, and the Southeast Asian countries,” PIDS said. The Association of Southeast Asian Nations (ASEAN) Economic Community in 2015 offers increased trade and investment opportunities.
STATWATCH P34.33B Investments registered with the Board of Investments (BOI) in Q1 2013 vs. P18.37B in Q1 2012
P32.88B BOI-registered local investments in Q1 2013 vs. P1.45B foreign investments in Q1 2013
P12.88B Tourism projects in 2011 vs. P3.9B in 2010 36M Target domestic travelers by 2016
10M-12M Target foreign tourist arrivals by 2016
300,000 Business names being registered by the Department of Trade and Industry (DTI) annually
7,024 Jobs to be generated by BOI-registered investments in Q1 2013 95.78% Share of local investors in BOI-registered investments in Q1 2013
55 BOI-projects approved in Q1 2013
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(A synopsis of selected book acquisitions at the DTI-TIIC library)
Author : Power, Paul Publisher : Rupa Publications India Pvt. Ltd. Call Number : 06.08/POW/2011 Have you got a passion of your own which you think has the potential to be a great source of income? This book shows how to turn passion and enthusiasm into a viable, commercial opportunity. It provides practical tips culled from the actual experiences of successful entrepreneurs.
Legend: BMI - Business Mirror MAB - Manila Bulletin TPS - The Philippine Star Zambotimes
Title : The Franchise Guidebook: Strategies for Building a Successful Franchise Business
Title : Start and Run a Business from Home: How to Turn Your Hobby or Interest into a Business
Entered as Third-Class Mail at the Makati Central Post Office under Permit No. 504 valid until 31 December 2013
Publisher : Summit Publishing Co., Inc. Call Number : 45 608/06.07.06/SUM/ 2012 This book features the basics in starting a franchise company. It shows how franchise companies and their respective franchisees have grown and nurtured their franchise relationships by sharing knowledge on various topics, including branding, local and international expansion, location hunting, social media tactics, and technology. It compiles a directory of franchise companies and traps to avoid for would-be franchisors and franchisees.
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, Emman R. Caleon, Hazel Maryam S. Dizon, Maria Joanna Angela D. Cruz Design/Layout: Ren C. Neneria Circulation: Myrna V. De Los ReyesTo subscribe, email: publications@dti.gov.ph