Dataline 15 (2014) by Department of Trade and Industry

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28 July 2014 1

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28 July 2014 Vol. 19, No. 15

A bi-monthly digest of global and domestic industry trends and developments. Published by the Knowledge Managment and Information Service of the 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 PHL to grow 7.1%, among world’s fastest

Business Update 1. DTI supports PHL delegation in CommunicAsia 2014 2. ECCP urges local food firms to hike exports 3. Filipinos, most socially-conscious consumers in the world

Inside DTI 1. PHL, EFTA to start talks for free trade accord 2. DTI holds ASEAN community forum 3. DTI sets up offices in northern Cebu Feature Export prospect for Bicol Pili expands 4. TRTA 3 conducts trainings with BIZDEV on TRACES Good News, Philippines! 1. JCR affirms PHL’s BBB rating 2. Consumer confidence improves in Q2

ASEAN Watch 1. DTI lauds ASEAN support for SMEs 2. ASEAN sends high-level economic mission to Canada

MSMEs 1. DTI helps expand holiday décor’s domestic market 2. Cardona gets P400,000 for bamboo industry 3. Abra, Ifugao obtain GPB

Statwatch What’s New?

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Focus PHL to grow 7.1%, among world’s fastest

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he Philippines is expected to grow 7.1% this year to remain as one of the world’s fastest-growing emerging economies, Standard Chartered of the United Kingdom (UK) reported. Standard Chartered, in its latest report titled “The World Cup Edition—A Mix of Economics, Markets and Football,” likened the Philippines to a football team heading towards the “finals,” with both the domestic and external sectors expected to continue backing up strong growth. “The Philippines’ recent economic boom has made it one of the world’s fastest-growing emerging economies. We expect sustained and more broad-based growth to help the country achieve middle-income status and structural development. We are optimistic that economic growth will be sustained at 7.1% in 2014,” it said.

Inside DTI 1. PHL, EFTA to start talks for free trade accord

ith the signing of the Joint Declaration on Cooperation (JDC), the Philippines and the European Free Trade Association (EFTA) have set their eyes on starting the negotiations for a full blown bilateral free trade agreement (FTA). Joint Declaration on Cooperation (JDC) signatories

• Department of Trade and Industry • • • •

(DTI) Secretary Gregory L. Domingo of the Philippines Minister of Foreign Affairs and External Trade Gunnar Bragi Sveinsson of Iceland UN and other International Organizations Ambassador and Permanent Representative Norbert Frick in Geneva Minister of Trade and Industry Monica Mæland of Norway Head of the Federal Department of Economic Affairs, Education and Research Johann N. Schneider-Ammann of Switzerland

Private and commercial motor vehicle sales are also expected to remain robust, pointing to strong private consumption and investment growth. Infrastructure spending grew close to 50% year-on-year in the first two quarters of the year, a trend that will provide upside to public investment growth. The UK-based bank sees scope for further upgrades of the Philippines’ sovereign credit rating, fuelling increased investor optimism. The government’s fiscal performance was sound in 2013, providing room for productive investment to boost growth potential. Government revenue grew 9.4% year-on-year in the first quarter, mainly supported by tax revenues. (MST 06/12)

Department of Trade and Industry Secretary Gregory L. Domingo viewed the JDC signing as a milestone to bilateral relations. The next step after the signing is the start of bilateral FTA negotiations for the Philippines and EFTA. “The opportunities for both sides are tremendous—the Philippines could benefit from the technologies of the EFTA states while EFTA stands to benefit from the economic growth story of the Philippines,” Domingo said. He said the Philippines will explore ways to increase the market share of Philippine trade and investments from EFTA Member States in relation with its ASEAN neighbors. Viet Nam was EFTA’s largest import source in ASEAN with 30.26-% market share based from EFTA’s total ASEAN imports from 2008-2012. Meanwhile,

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Singapore already has an existing free trade agreement (FTA) with EFTA while Viet Nam, Thailand, Malaysia, and Indonesia are in the process of negotiating their FTAs. The JDC aims to enhance economic cooperation between the Philippines and members of the EFTA whose members include Norway, Switzerland, Iceland, and Liechtenstein. “Noting the vast potentials of our bilateral relations, the Philippines has been reaching out more to EFTA just as our ASEAN neighbors are doing. We have studied the possibilities and potential benefits of entering into a more active relationship with EFTA states and we believe that there are

2. DTI holds ASEAN community forum

he Department of Trade and Industry-Cordillera Administrative Region (DTI-CAR) has identified the effects and implications of the expected ASEAN economic integration to Philippine trade, industry, agriculture, and tourism sectors.

“EFTA’s strengths in shipbuilding, iron and steel, auto and auto parts, and components as well as aerospace, IT-BPM, and pharmaceuticals are areas where we can explore cooperation initiatives,” Cristobal said. Other areas of cooperation with EFTA Member States are in the areas of IT and IT-enabled services, creative services, financial services, tourism services, educational services, architectural/engineering services, maritime transport, and energy services. and seamless flow of goods and services within the ASEAN market, opening up enormous opportunities for business and citizens of ASEAN member states. ASEAN Economic Cooperation (AEC) Goals

The DTI-CAR recently conducted in Baguio City the ASEAN Economic Forum with the theme “ASEAN Economic Integration 2015.”

•

ASEAN is considered as one of the world’s fastest evolving regions aimed at fully realizing its growth.

•

In effect, the ASEAN economic integration would allow the free

3. DTI sets up offices in northern Cebu

strong complementarities,” DTI Industry Development Group (IDG) Undersecretary Adrian S. Cristobal Jr. said.

he Department of Trade and Industry (DTI)-Cebu has set up Business Assistance Centers (BACs) in Bogo City and Municipality of Daanbantayan to step-up the rehabilitation and recovery efforts in typhoon Yolandaaffected areas in northern Cebu. The BAC will function as a “little DTI” operating within the locality and will implement DTI’s flagship projects and basic functions.

• •

Creation of a single production and market zones Enhancement of the economic competitiveness of the region Development into a region fully integrated into the global economy Promotion of the equitable economic development that will benefit all citizens

Source: AEC

BAC’s programs and services

• • • • • •

Bottom-Up Budgeting Shared Services Facilities (SSFs) Streamlining of Business Permits and Licensing System (BPLS) Industry Clustering/Value Chain Mapping Green Growth and Disaster Resilience Building Local Competitiveness and Investment Promotions

Source: BAC

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The BACs will primarily function as DTI-Cebu’s contact point or administrative extension in the affected local government units (LGUs). It will also help in delivering and facilitating the necessary and immediate support services related to rehabilitation and recovery efforts. The BACs will also help in building and enhancing linkages with

4. TRTA 3 conducts trainings on TRACES

ome 40 participating fish exporters together with the Department of AgricultureBureau of Fisheries and Aquatic Resources (DA-BFAR) certifying officers underwent a two-day training on the “Trade Control and Expert System (TRACES) for the Export of Fishery and Aquatic Products to the European Union (EU).” The training was conducted in two batches on 17-18 and 19-20 June 2014 at the Marco Polo Hotel in Cebu City with the support of the Trade Related Technical Assistance Project 3 (TRTA 3) and the Better Training for Safer Food (BTSF) programme. The EU-funded TRTA 3 is an ongoing partnership between the Philippine Government and the EU that aims to contribute to the integration of the Philippines into a regional and international trading and investment system. While BFAR is recognized by the EU as the Competent Authority for the inspection, approval, and certification of fishery and aquatic products and establishments exporting to EU, TRTA 3 backs the provision of

Good News, Philippines! 1. JCR affirms PHL’s BBB rating

apan Credit Rating Agency Ltd. (JCR) affirmed its ‘BBB’ rating on the Philippines with a stable outlook amid expectations that the country’s strong economic growth will be sustained.

the LGUs and conducting consultancies to address the needs of the business community in the area. The BAC personnel assigned in Bogo City will cover the areas of Bogo, Medellin, and San Remigio;. meanwhile those assigned in the Municipality of Daanbantayan will cover Malapascua Island.

capacity building for its officers as enablers of trade between the Philippines and the EU. BTSF is an initiative of the European Commission (EC) that, among others, provides trainings on the EU import requirements for Competent Authorities and the private sector of countries that EU imports food products from. With the increasing number of exporters in the country that aspire to gain entry to the EU market for fishery and aquatic products, BFAR acknowledges the urgent need for its system to be capable of processing higher volumes of documents more efficiently. For BFAR to be able to operate as an effective Competent Authority, its data management capabilities have to be significantly improved. The training on TRACES addresses these concerns and will be followed by similar capacity building activities for other government agencies that will serve as the direct beneficiaries of TRTA 3, which aims to boost trade as a potent tool for achieving inclusive growth, poverty reduction, and employment generation.

“The ratings mainly reflect resilience to external shocks, robust domestic demand underpinned by overseas Filipinos’ remittances, and progress on improvement of fiscal soundness,” JCR said in a statement.

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“Philippine economic growth is expected to accelerate above 6% this year on strong domestic demand,” JCR added.

due to strong inflows from OFW remittances, business process outsourcing (BPO) revenues, and tourism receipts.

The firm also expects the country’s fiscal position to continue improving through “enhanced tax collection efficiency and rationalization of fiscal incentives.”

“The country definitely needs to develop infrastructure and improve the investment environment to attain rapid and sustainable economic growth. JCR will watch how the government will address the challenge and how much progress it will make,” the firm said.

The current account component of the balance of payments position is also expected to remain in surplus

2. Consumer confidence improves in Q2

onsumer confidence continued to improve in the second quarter, boosted largely by respondents’ favorable outlook on employment, business activity, and family income. Results of the latest Consumer Expectations Survey of the Bangko Sentral ng Pilipinas (BSP) showed that consumer confidence index for the second quarter stood at -17.3%, an improvement from the -18.8% in the previous quarter. The index has always been in the negative, which means that while optimists increase, they remain less in number versus pessimists. “Respondents attributed their more favorable outlook to the availability of jobs as well as increase in the number of employed family members, increasing family income due to higher salary, strong business activity, and better harvest,” BSP-Department of Economic Statistics Director Rosabel B. Guerrero said. Guerrero also attributed the favorable outlook to “stepped-up road infrastructure projects, more investment prospects in the country, and improvement of the peace and order situation.”

(TPS 06/13)

The survey also showed that the number of households with savings increased to 30.3% during the quarter from 28.9% in the first quarter. “Respondents save money for … emergency, health and hospitalization, retirement, education, and business capital and investment such as house and lot,” Guerrero said. For spending, respondents had a “positive spending outlook” on basic goods and services for the third quarter. “Across commodity groups, fewer respondents expected higher spending on clothing and footwear, house rent, electricity, fuel, medical care, communication, restaurants and cafes, and personal care and effects,” Guerrero said. More respondents, however, expect an increase in expenditures on food, water, and education due to the opening of the school year. The latest survey was conducted from 1-12 April 2014 and covered 6,027 households, of which 49.1% were from the National Capital Region (NCR). (TPS 06/14)

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MSME News 1. DTI helps expand holiday décor’s domestic market

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he Department of Trade and Industry (DTI) conducted a fair entitled "Celebrate! Decorate! Philippines’ Dreamland: World of Décor" last 26-28 June 2014 at the Philippine Trade Training Center (PTTC). “With upbeat prospects for the local holiday décor sector in the domestic market, we are supporting members of the Christmas Décor Producers and Exporters Association of the Philippines (CDPEAP) to promote their products and uphold their creative excellence in design through DTI’s Sikat Pinoy brand,” DTIIndustry Promotion Group (IPG) Undersecretary Ponciano C. Manalo, Jr. said.

2. Cardona gets P400,000 for bamboo industry

3. Abra, Ifugao obtain GPB

DTI and CDPEAP jointly set up the exhibit to highlight innovative products, creative materials handling, and manipulation of decors for home, Christmas, and other celebrations. Likewise, they also held a product-sourcing mission for big and institutional buyers of holiday décors. Manalo said that in creating innovative and high quality holiday and lifestyle products, the DTI does not only aim to build on this sector’s domestic market but also work on their competitiveness, and ensue global prominence.

he municipal government of Cardona in Rizal received P400,000 funding from the Department of Trade and Industry (DTI) for the enhancement of its bamboo industry.

The DTI and other national government agencies have previously given the municipality with equipment and financing to help in the production of processed bamboo crafts.

Local micro, small, and medium enterprises (MSMEs) will utilize the funding provided through the Grassroots Participatory Budget (GPB) program.

With the GPB funding, DTI aims for the province’s bamboo industry to flourish.

and P5.94M for seven of Ifugao’s municipalities under the Department’s GPB project for the year.

The municipality of Tubo in Abra received P960,000 appropriated for loom weaving, ginger tea processing, and herbal shampoo processing, seen to benefit the 125 residents of the town.

The livelihood activities covered by the poverty reduction project were identified by the municipalities themselves through the Local Poverty Reduction Action Team’s (LPRAT) participatory planning and budgeting process with Bottom Up Budgeting (BuB) submitted for approval to DTI last year.

he Department of Trade and Industry (DTI) awarded subsidy to a town each in Abra and Ifugao through the Grassroots Participatory Budgeting (GPB) project for the towns’ poverty reduction projects.

For Asipulo in Ifugao, P219,041.50 was given for its ginger and taro processing project, the first tranche of the total P500,000 for the project

DTI will also provide product marketing and promotion assistance. (Baguio Midland Courier 06/08)

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Tubo, Abra GPB allocation

Asipulo, Ifugao GPB use

• •

Capability building trainings Product development and marketing assistance

Amount P640,000

Recipient Mong-O Loom weavers Association

Use of funds • Basic tailoring and embroidery • Entrepreneurship development training (including product marketing and promotion) • Fabrication of looms

P170,000

Federation of Rural Improvement Club of Tubo

•

Skills training, packaging, labelling, and promotion for herbal shampoo project

P150,000

Tubo Local Government

•

Skills development, product development, packaging and testing, and market promotion for ginger tea processing

Ifugao municipalities under 2014 DTI GPB project

• • • •

Asipulo Banaue Hingyon Hungduan

• • •

Lamut Mayoyao Tinoc

Business Update 1. DTI supports PHL delegation in CommunicAsia 2014

n an effort to further improve the country’s position as Asia’s e-services hub and global leader in information technology and business process management (IT-BPM), the Department of Trade and Industry (DTI) through the Philippine Trade and Investment Center (PTIC) in Singapore expressed their full support for the Philippine delegates to CommunicAsia 2014. DTI Industry Promotion Group Undersecretary Ponciano C. Manalo Jr. said the country continues to enhance its standing as global leader in IT-BPM with its triumphs in the industry and emerging associated high value processes, such as: • Software and applications development

2. ECCP urges local food firms to hike exports

he European Chamber of Commerce of the Philippines (ECCP) advised local food companies to expand their market presence in Asia and meet the region’s increasing food demand. According to the ECCP’s Fairs & More Inc. (FMI), a leading trade fair organizer in the country, the Philippines is in a prime position to export more of its products in Asia, such as:

•

Game and creative content development Big data and business analytics

•

CommunicAsia 2014 brought the widest array of technologies and solutions that enable businesses to adapt to the latest industry trends and retain their competitive edge. The event ran from 17-20 June 2014 at the Marina Bay Sands, Singapore. The Information Technology and Business Process Association of the Philippines (IBPAP) and the Department of Science and Technology-Information and Communications Technology Office (DOST-ICTO) led the Philippine delegation to this exhibit.

• Processed foods • Ready-to-eat • •

meals Snacks Fruit and vegetable drinks

• Food

preserves

• Noodles • Pastry

ingredients

• Condiments

Source: ECCP

ECCP noted that the world food retail industry is estimated to be USD 4T annually. Asia is projected to account for the bulk of the 35-% increase in food demand by 2025. (MAL 06/13)

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3. Filipinos, most socially-conscious consumers in the world

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n Nielsen’s recent study, Filipino consumers are one of the world’s most socially-conscious when it comes to purchasing goods and services. The survey showed that 8 in 10 consumers in the Philippines, or 79%, are more willing to pay extra for products and services that come from companies committed to making positive social and environmental impact. “We see the strongest propensity to buy socially and environmentally responsible brands from consumers in emerging markets such as the Philippines, Viet Nam, and Thailand where consumers face extreme levels of poverty and frequent encounters with natural and environmental

FEATURE Export prospect for Bicol Pili expands with BIZDEV

. Emmanuel Pastries, a long-time Department of Trade and Industry (DTI) client that started as a backyard micro enterprise pili nut producer in 1997, now carries a P5-M asset size. The enterprise, through DTI-5 Food Business Development (BIZDEV) Program, participated in trade shows which provided opportunities for the company to increase sales and find new markets. The program is responsible for the enterprise’s enhanced capability in terms of market compliance, food safety, systematic documentation, packaging, labelling, branding, and export market promotion, J. Emmanuel Pastries Owner Lydia P. Lomibao said. Lomibao attributes its phenomenal rise to aggressive production and marketing techniques coupled with essential investment in modern equipment to attain product quality acceptable in both domestic and foreign markets. Lomibao’s pili nut products are making their mark in the world

disasters,” Nielsen Philippines Managing Director Stuart Jamieson said. Consumers in emerging markets like the Philippines support brands that are committed in supporting local communities and improving the state of the environment. Brands should act fast to address this rising demand, Jamieson noted. Some 82% or more than 8 in 10 Filipino consumers check the product packaging before purchasing the brand. Consumers are highly influenced and informed by packaging when it comes to recognizing socially and environmentally conscious brands, Jamieson said. market with the relentless efforts of the entrepreneur to abide by product/market requirements. J. Emmanuel Partners makes premium quality pili products in the traditional way and enhances it with improved packaging, making it appealing to local and international clients. A clear proof of product acceptability in the foreign market is a record of regular exports to the United States (U.S.), Canada, and Japan which the company is striving to maintain. Trade shows participated by J. Emmanuel Pastries International • HOFEX (Hong Kong) • Japan Food and Beverage Show • Korean Agri Fair • USA Trade Shows • Winter Fancy Food Show 2013 Domestic • International Food Exhibition (IFEX) • Philippine Fiesta 2011

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ASEAN Watch 1. DTI lauds ASEAN support for SMEs

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he Department of Trade and Industry (DTI) recently commended the Association of Southeast Asian Nations (ASEAN) Small-Medium Enterprise Working Group (SMEWG) for its efforts to implement the major commitments for SME development under the ASEAN Economic Community (AEC) Blueprint that will provide concrete goals to establish a single market and production base in the region by 2015. “As we move towards the ASEAN integration in 2015, supporting SMEs should be more than ever be prioritized by members. SMEs must embrace the AEC as a means towards achieving their own growth potential, where goods and services can now freely move across ASEAN,” DTI Regional Operations Group (ROG) Undersecretary Zenaida C. Maglaya said. Maglaya also recognized that the ASEAN SMEWG achievements help develop regional cooperation in assisting SME access to finance, upgrading SME technological capacities and management skills, and fostering participation of SME in the export market.

2. ASEAN sends high-level economic mission to Canada

STATWATCH USD 4T Estimated worth of the world’s food retail industry

P5.94M Allotted budget for seven of Ifugao’s municipalities under DTI’s GPB program for 2014

P960,000 Allocated funds for Tubo, Abra’s loom weaving, ginger tea processing, and herbal shampoo processing industries

P400,000 Fund assigned to Cardona, Rizal for the enhancement of their bamboo industry

79% of Filipinos are more willing to pay extra for products and services that come from companies committed to making positive social and environmental impact

30.3% Number of households with savings in Q2 2014

7.1% PHL’s expected 2014 growth

delegation of Association of Southeast Asian Nations (ASEAN) high-level economic officials visited Vancouver and Toronto, Canada last month to further enhance trade and investment relations between the two sides.

(AEC) Deputy Secretary-General Lim Hong Hin said.

“This road show to Canada by the ASEAN economic ministers sets another significant milestone in ASEAN’s relationship with Canada, one of ASEAN’s oldest dialoguepartners, and affirms ASEAN and Canada’s commitment to strengthen trade and economic relations,” ASEAN Economic Community

“Canada is a big potential market for ASEAN given its natural resources and it also serves as a gateway into North American market through the North America free-trade agreement (FTA). The Canadian businesses should also seize the opportunities availed under the AEC,” Lim said.

Canada is ASEAN’s ninth-largest trading partner and eighth-largest source of foreign direct investment (FDI).

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What’s New? (A synopsis of selected book acquisitions at the DTI-KMIS library)

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Title : ClimateSmart Agriculture Sourcebook

Publisher : Food and Agriculture Organization (FAO) Call Number : SITC 0A/11.05/FAO/ 2013 This book is an approach to developing the technology, policy and investment conditions to achieve sustainable agricultural development for food security under climate change. It discusses impacts of climate change on agriculture, as well as the contribution of agriculture to global greenhouse gas emissions. This approach is designed to identify and operationalize sustainable agricultural development within the explicit parameters of climate change. 557p. http://www.fao.org/ docrep/018/i3325e/i3325e.pdf

Title : Organic Market Report 2014

Publisher : Soil Association Call Number : SITC 0/51 826/SOI/ 2014 This study provides an overview of organic food and farming world-wide, and discusses organic farming and outlines policy development in the UK. It gives comments and data on processed organic products, retail sales, and imports in the UK as well as consumers behavior. 28p. http://www.soilassociation.org/ marketreport

Legend BMI MAL MST PDI TPS

Business Mirror Malaya Manila Standard Philippine Daily Inquirer The Philippine Star

Editor-in-Chief/Patricia May M. AbejoManaging Editor/Anne L. Sevilla Associate Editor/Jam H. Raposon Writers/Resty P. Par, Hazel S. Dizon, Joanna D. Cruz, Airiz A. Casta, Kit S. Andaya Design/Layout/Ren C. Neñeria Circulation/Al AquinoTo subscribe, email: publications@dti.gov.ph