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03 November 2014 1
03 November 2014 Vol. 19, No. 22
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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 exports seen to hit USD 85.2B this year Inside DTI 1. BOI boosts inclusive growth agenda 2. PEZA wants Korea, Batangas ports partnership Good News, Philippines! 1. Domestic trade up 16.4% in Q2 2. Japan firms keen on PHL MSMEs 1. DTI-Isabela conducts ‘Diskwento Caravan’ 2. DOLE offers free MSME training courses 3. DTI holds mobile training in Pangasinan Business Update 1. BOI, PEZA investments hit P393.6B in Jan-Aug
2. Manufacturing to continue to lead PHL’s growth 3. PHL still the most cost-effective IT-BPM destination Consumer News 1. Bread prices to go down 2. Michelin conducts voluntary recall 3. Public advised against uncertified construction materials 4. DTI warns against fake ICC stickers 5. Mercury-tainted skin-care products found in market Feature DTI highlights domestic specialty coffee shops ASEAN Watch 1. ASEAN brands to boost region’s strength 2. ILO, ADB study on the impact of ASEAN integration for better jobs launched Statwatch
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Focus PHL exports seen to hit USD 85.2B this year
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he country’s total exports revenue (covering goods and services) is expected to grow by 8% to USD 85.2B this year from USD 78.5B last year, the Philippine Export Development Plan (PEDP) 2014-2016 showed. By 2015, total exports are projected to rise 10% to USD 94B and grow further by 12% to USD 105B by 2016 on the back of rising demand for Philippine fresh food exports and recovery of the global electronics sector. “Merchandise exports in 2014 are expected to be driven by the non-electronics sector, which generated USD 30B in 2013 from USD 27B in 2012. Growth will be supported by increasing demand from Japan, China, the United States (U.S.), Singapore, Germany, Thailand, and other countries in East Asia and the Association of Southeast Asian Nations (ASEAN),” the PEDP 2014-2016 read. “Fresh food exports and intermediate goods spurred the growth of non-electronics exports. Fruits and vegetables have been enjoying generally good harvests, while processed food and beverages have likewise been experiencing robust demand. Lower tariffs in the Philippine free trade areas (FTAs) have been a boon to Philippine exports,” the document stated. The document also pointed to growth in earnings from shipments
of electronic products this year to be driven by a renewed demand for locally manufactured automotive and consumer electronic products. The Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) has raised its growth forecast on the sector’s export revenues this year from 5% to 8% from last year’s USD 21.8B. SEIPI President Dan Lachica said their newly revised bullish forecast will be driven by the recovery of the country’s key markets. On the same note, Export Development Council (EDC) Executive Director Senen M. Perlada, who also heads the Department of Trade and IndustryExport Marketing Bureau (DTI-EMB), said the country’s total exports could even exceed the government’s 8-% target this year. Apart from electronics products, Perlada said the government also expects services exports such as information technology-business process management (IT-BPM) and tourism sectors to continue to go up. The development plan, which has yet to be presented to President Benigno S. Aquino III for approval, defines the export revenue targets over the three-year period, taking into account certain challenges affecting the local and international markets. (TPS, PDI 10/01)
PHL Exports Growth Forecast 2014
Merchandise Services
2015
2016
% Growth
Amount USD B
% Growth Amount % Growth USD B
6
60.1
8
64.9
10
71.4
15
25.1
16
29.1
16
33.7
Source:Philippine Export Development Plan 2014-2016
Amount USD B
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Inside DTI 1. BOI boosts inclusive growth agenda
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he Board of Investments (BOI) held the "Inclusive Growth Through Inclusive Business" forum for BOI-registered firms in support of the government’s inclusive growth agenda.
The forum formed part of BOI’s Trade and Industry Development (TID) Updates and was the main activity of the agency’s 47th Anniversary last September 2014. Participating BOI-registered firms discussed the role of “Inclusive Business” (IB) models in nationbuilding and economic development.
2. PEZA wants Korea, Batangas ports partnership
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he Philippine Economic Zone Authority (PEZA) is pushing for a partnership agreement between Korea’s Port of Pyeongtaek and the Port of Batangas to increase traffic between the two ports. “We have very good prospects in Korea. This Port of Pyeongtaek is a very big port. So I think it should link up with the Batangas Port,” PEZA Director-General Lilia B. de Lima said. De Lima recently signed a mutual cooperation agreement with Korean officials for increased business prospects with the Port of Pyeongtaek.
Good News, Philippines! 1. Domestic trade up 16.4% in Q2
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he value of domestic trade grew 16.4% in the second quarter from a year ago, the Philippine Statistics Authority’s (PSA) Commodity Flow in the Philippines Second Quarter Report showed. The total value of commodities traded within the country reached P170.2B in the second quarter of 2014, up from the P146.24B traded in the same period last year. “Shipment through water was the principal mode of transport in the period, comprising 99.7%,” the PSA said.
As defined by the Asian Development Bank (ADB), IBs are commercially viable, profit-making private companies whose core business solutions are designed to address social issues for the poor by engaging them as a producer, distributor, or consumer of goods and services. Last year, the BOI and ADB started a series of seminars to brief DTI Offices on the IB concept. This year, IB briefings focused on the manufacturing, mass housing, tourism, and health sectors. The Philippines is the second biggest client of Pyeongtaek Port, next to China in terms of shipments. Pyeongtaek Port ships out not only Hyundai and other Korean cars to Batangas Port, but also European cars bound for the Philippine market. The Korean port has 63 berths and plans to add 13 more in the next few years. De Lima said other Korean companies are also keenly looking at the Philippines for possible investment opportunities.
In terms of volume, commodities traded within the country also increased year-on-year by 1.2% to 4.87M tons from 4.81M tons in the same quarter a year ago. (TPS 10/03) PHL’s Top 3 trade commodities Q2 2014 Commodity
Value %-share (in billion Pesos)
Food and 49.65 live animals Machinery and 38.71 transport equipment Manufactured goods 23.72
29.2 22.7 13.9
Source: Philippine Statistics Authority (PSA)
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2. Japan firms keen on PHL
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apanese firms are eyeing to expand and establish new businesses in the Philippines, the Department of Trade and Industry (DTI) said. The DTI recently received a delegation from the Kansai Economic Federation (Kankeiren) from Japan which expressed their intent to either expand or start new businesses here. “Our survey mission in the Philippines has a definite objective in the light of movements toward the Association of Southeast Asian Nations (ASEAN) economic integration as well as negotiations for Economic Partnership Agreement (EPA) and Free Trade Agreement (FTA),” Kankeiren Vice Chairman Masayuki Matsushita said.
Kankeiren, a non-profit economic organization based in the Kansai region in Japan, represents 1,400 businesses and organizations seeking to promote Kansai as an attractive location for business as well as strengthen the region’s links with other countries. Matsushita said the visit aimed to explore the country’s economic conditions, industrial policies, and investment environment. Kansai Economic Federation member-delegation
Matsushita led the delegation composed of senior business executives from the manufacturing, trade and services, and financial sectors.
MSME News 1. DTI-Isabela conducts ‘Diskwento Caravan’
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he Department of Trade and Industry (DTI) brought its ‘Diskwento Caravan’ to Isabela to benefit its residents, particularly those in the town of Alicia, in the last week of September 2014.
The Diskwento Caravan formed part of the town’s 65th founding
2. DOLE offers free MSME training courses
Daikin Industries, Ltd. Daiwa Institute of Research Ltd. Itochu Corp. Hitachi Zosen Corp. Japan Bank for International Cooperation Kyoei Steel Ltd. Mitsui & Co., Ltd. Mitsubishi Corp. Marubeni Corp. Obayashi Corp. Sojitz Corp. Sumitomo Corp. Takenaka Corp.
anniversary, DTI-Isabela Provincial Director Ma. Salvacion A. Castillejos said. The caravan made available to local residents basic necessities and prime commodities with 20% to 30% discounts.
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efficiency in utilizing resources and managing production costs, DOLE Secretary Rosalinda Dimapilis-Baldoz said.
The courses aim to improve MSMEs’ productivity and competitiveness through the application of appropriate and advanced productivity technologies.
The Productivity Toolbox consists of five basic training courses, six intermediate training courses, and three advanced training courses. Further details on these 14 training courses may be accessed at http:// www.nwpc.dole.gov.ph/ prod_toolbox.html.
he Department of Labor and Employment (DOLE) urged micro, small and medium enterprises (MSMEs) to avail themselves of the free Productivity Toolbox courses offered by the agency.
The intermediate courses are designed to increase MSMEs’
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3. DTI holds mobile training in Pangasinan
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he Department of Trade and Industry (DTI)-Pangasinan rolled out its mobile training program through the SME Roving Academy (SMERA) in support of the province’s micro, small, and medium enterprises (MSMEs).
to assist MSMEs in levelling up their processes and outputs. The initiative is a continuous learning program in equipping MSMEs to be more competitive in the local and international markets.
A series of entrepreneurship briefing sessions were conducted
Business Update 1. BOI, PEZA investments hit P393.6B in Jan-Aug
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nvestments approved by the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) reached P393.6B in the first eight months of the year, slightly down by 1.1% from P398B recorded in the same period last year. Department of Trade and Industry (DTI) Industry Development Group (IDG) Undersecretary Adrian S. Cristobal Jr. noted the slight decrease was due to a reduced of big-ticket projects approved this year.
The bulk or 83% of the investments came from domestic sources amounting to P328B, while those from foreign sources reached P66B. Among foreign sources, Japan topped the list with P13.6B worth of committed funds or 21% of the total. By sector, electricity, gas, steam, and air conditioning supply got the biggest share of 41% or P162B. Real estate ranked second with a share of 25% (P98B), followed by manufacturing at 14% (P55B).
These investments represented 541 projects that are expected to generate 107,639 jobs.
2. Manufacturing to continue to lead PHL’s growth
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he country’s manufacturing sector, particularly in the food and electronics industries, will keep propelling the country’s economic growth for the rest of the year, the Department of Trade and Industry (DTI) said. “Manufacturing will continue to lead the growth this year as the country is starting to benefit from the manufacturing roadmap, particularly among the small and medium enterprises (SMEs) which on its own account for the 64% of employment in the country,” DTI Industry Development Group (IDG) Undersecretary Adrian S. Cristobal Jr. said.
Both electronics and non-electronics industries combined for a strong export performance in the January-July period this year. Shipments of electronic products reached USD 14B while non-electronic exports amounted to USD 21B in the period. Cristobal said the growth will be supported by an increasing demand for food products, noting that most of the companies engaged in food and agro-based businesses are SMEs. He said the Business Permit and Licensing System (BPLS) was prioritized by DTI.
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3. PHL still the most cost-effective IT-BPM destination
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roperty management firm CBRE Group, Inc. said while the projected easing up of tight office space supply starting next year would entail a rise in rental rate hikes, it would not dislodge the Philippines as the most cost-effective and most competitive information technology-business process management (IT-BPM) destination in the world. CBRE Philippines Chairman and Chief Executive Officer (CEO) Rick Santos said the IT-BPM industry would take up 80% of the available office space while the front-end offices will gobble up the remaining 20%.
Consumer News 1. Bread prices to go down
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he Department of Trade and Industry (DTI) announced that prices of bread may go down in the coming months amid decreases in wheat and flour costs. The DTI said the prevailing price for General Grade I 25-kilogram (kg) bag of hard flour was at P890 for the week of 22-26 September. Previously, it was announced that the flour was sold at P940 per bag.
2. Michelin conducts voluntary recall
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ollowing the voluntary recall for a certain version and size of the Michelin LTX M/S tires by Michelin North America Inc., Michelin Asia (Singapore) Co. Pte. Ltd. Philippine Representative Office has also issued a recall advisory for those affected here. Owners of Ford E-Series Vans or Chassis Cabs fitted originally with the recalled tires were advised to bring their vehicles to a Ford dealer for a free tire replacement service, including mounting and balancing.
“With the robust progress of real estate developments and IT-BPM industry in the Philippines, it can now be considered as the India of Southeast Asia,” Santos said. (MAB 09/23)
City Makati City Fort Bonifacio Alabang Quezon City Ortigas City
Vacancy rate (%)
Average rent (per sqm)
1.37 3.78 4.37 0.07 8.75
P970.10 P797.00 P601.78 P627.10 P572.80
Source: CBRE Group
While bakers have not made any commitment to reduce their prices, DTI Consumer Protection Group (CPG) Undersecretary Victorio Mario A. Dimagiba said the lower flour prices may result in cuts possibly before Christmas. A 450-gram (gm) loaf of Pinoy Tasty is currently selling at P37, while the 250gm Pinoy Pandesal costs P22.50 per pack. The version of the tires covered by Michelin North America’s recall was found to be prone to experiencing tread loss or rapid air loss. No accidents caused by the tires have been reported so far. In the Philippines, Michelin tires included in the recall are not retailed and can only be found in Ford E-Series Vans and Chassis Cabs installed with the tires as part of the vehicle’s original equipment.
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3. Public advised against uncertified construction materials
03 November 2014 7
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he Department of Trade and Industry (DTI) is urging consumers to use only certified black iron and galvanized iron (BIGI) pipes and tubes to avoid accidents. Certified BIGI pipes and tubes made in the country should have the Philippine Standard (PS) mark while imported products should have the Import Commodity Clearance (ICC) mark.
Joint market monitoring operations of DTI and the Philippine Association of Black Iron and Galvanized Iron Pipe and Tubes Manufacturers Inc. have been heightened to further protect consumers. Licensed local BIGI firms and brand names
Buyers of BIGI products are advised to look for the PS and ICC marks to prevent easy damaging of structures that may lead to death. The Department’s Bureau of Philippine Standards (BPS) has made available to the public the list of certified BIGI materials and its sellers.
4. DTI warns against fake ICC stickers
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he Department of Trade and Industry (DTI) has advised the public to check for the Import Commodity Clearance (ICC) mark when buying Christmas lights and to be cautious of fake ICC marks printed on the packaging. Genuine ICC stickers are foil-like and holographic, bearing the product’s serial number and year of certification. ICC marks guarantee that the product was tested by the Bureau of Philippine Standards (BPS) and passed the qualifications stated in the Philippine National Standards (PNS). The DTI is urging the public to buy only brands of Christmas lights included in the list of certified establishments. The list can be found on http://www.bps.gov.ph.
Goodyear Steel Pipe Corp.— GSPC Hoyugoh Steel Corp.— Samurai Huludao City Steel Pipe Industrial Company — H Supreme Mayer Steel Pipe Corp.— Eagle Metalman Steel Forming Corp.— Metalpipes MKK Steel Corp.— Eagle Southern Steel Pipes Sdn. Bhd.— Southern Pipe Supreme Steel Pipe Corp.— Supreme, Superior, and Tri-R Pipes Tanjin United Steel Pipe Company — TUS Smart Steel
Source: Bureau of Philippine Standards (BPS)
Consumers are encouraged to report to DTI retailers of Christmas lights bearing fake or having no ICC stickers. DTI also gave other pointers to ensure the safe use of Christmas lights, such as checking the wiring of old lights before use and keeping the number of interconnected lights to three sets at most. Other details on Christmas lights packaging to be inspected
Batch or lot code and bar code Brand name Country of origin Indoor/outdoor usage warning Name and address of importer and/or distributor Rated voltage and wattage of lamps Rated voltage and wattage of set Standard used (PNS 189:2000)
Source: Bureau of Philippine Standards (BPS)
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5. Mercury-tainted skincare products found in market
Vol. 19, No. 22 8
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everal skin whitening products being sold in the local market were found to be unauthorized by the Food and Drug Administration (FDA) and were containing mercury over the acceptable limit. The FDA Center for Cosmetic Regulation and Research (CCRR) conducted the testing of the products submitted by a non-government organization (NGO) and found out that more than 1ppm of mercury, the acceptable limit set by the Association of Southeast Asian Nations Cosmetic Directives (ACD), were found in the products.
from those granted by the FDA with a License to Operate (LTO) and products with a Certification of Notice from the agency. The FDA certification of an item may be verified through their website www.fda.gov.ph Cosmetic products with no FDA notification containing mercury levels beyond acceptable limit
Following the findings, the FDA has issued an advisory informing the public regarding the toxic cosmetics while urging them to purchase only from legitimate sellers and check products for FDA market authorization. The FDA also enjoins mall operators to encourage sellers to source only
FEATURE DTI highlights domestic specialty coffee shops
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BG Ginseng & Ganoderma Lucidum Natural Essence BG Sea Pearl & Papaya Natural Essence 6 Days Specific Eliminating Freckle Whitening Sun Block Cream Feique Herbal Extract Chinese Herbal Formula Whitening AntiFreckle Set: Anti-Melanin Anti-Freckle Whitening (2 in 1) Golden Pearl Beauty Cream Jiaoli Herbs Essence Whitening AB Set Jiaoli Huichusu Intensive Whitening Sunscreen and Spots Removing set Mifton
Source: Food and Drug Administration (FDA)
he Department of Trade and Industry (DTI) is urging micro, small, and medium enterprises (MSMEs) to capture the growing demand for first class coffee in local coffee shops.
Shared Service Facilities (SSF) or machines and capital equipment for roasting and grinding coffee, with the help of other government agencies and international organizations.
DTI Industry Development Group (IDG) Assistant Secretary Ceferino S. Rodolfo cited the huge prospects that the country can tap in the regional and global production networks.
Coffee, together with 99.7% of goods in Association of Southeast Asian Nations (ASEAN), is trading at zero tariff under the ASEAN Trade in Goods Agreement (ATIGA).
“The quality of our workers and the quality of our coffee beans will be key to the success of Philippine coffee in the domestic and international markets,” Rodolfo said. Some 112 MSMEs in the Cordilleras grow and trade coffee for their livelihood. The DTI helps in improving the production of MSMEs by providing
DTI-Cordillera Administrative Region (CAR) Regional Director Myrna P. Pablo said that national and local agencies are working together to support its local coffee industry. Government agencies, coffee growers, and traders have joined hands since 2011 to prioritize the development and promotion of the coffee industry in the Cordilleras.
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ASEAN Watch 1. ASEAN brands to boost region’s strength
03 November 2014 9
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he collaborations among franchising industry players in Southeast Asia are deemed critical for their growth with the upcoming integration of Association of Southeast Asian Nations (ASEAN) economies by 2015. The region’s franchisers would gain vastly from the ASEAN Economic Community (AEC) by working together in competing in the global market dominated by western brands, Philippine Retailers Association (PRA) and Philippine Franchise Association (PFA) Vice President Ma. Alegria “Bing” Sibal-Limjoco said. “The AEC is an excellent opportunity for us to learn how to become more global in our marketing plans and product development. But perhaps, the most crucial thing that we need to learn in the era of the AEC is to learn to collaborate with each other rather than compete with each other,” Limjoco said. She said ASEAN players should help each other to strengthen the region’s franchises as global brands. (TPS 09/29)
2. ILO, ADB study on the impact of ASEAN integration for better jobs launched
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he International Labour Organization (ILO) and the Asian Development Bank (ADB) had launched a study titled “ASEAN Community 2015: Managing integration for better jobs and shared prosperity.” The study examines the impact of the ASEAN Economic Community (AEC) on labor markets and offers evidence-based policy recommendations for better jobs and equitable growth. Included in the study are issues on strengthening regional cooperation, facilitating structural change, improving job quality, enhancing skills, boosting productivity and wages, and managing labor migration.
STATWATCH USD 85.2B PHL’s exports revenue target for 2014, or 8-% growth from last year’s
USD 78.5B; to grow further to USD 94B (2015) and to USD 105B (2016) as stated in the Philippine Export Development Plan (PEDP) 2014-2016
USD 21.8B
Electronics exports in 2013
P393.6B Investments approved by the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) in Jan-Aug 2014, slightly down by 1.1% from P398B recorded in the same period last year
P328B BOI- and PEZA-registered investments in Jan-Aug 2014, while those from foreign sources reached P66B
P170.2B Total value of commodities traded within the country in Q2 2014, up from the P146.24B traded in the same period last year
107,639 Jobs to be generated by projects approved by BOI and PEZA in Jan-Aug 2014
Regional Economic and Social Analysis Unit (RESA) Chief Sukti Dasgupta said the report further presents possible job gains and losses as a result of the integration.
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Vol. 19, No. 22 10
By 2015, the ASEAN region is expected to become a single common market and production base for 10 ASEAN member states, including the Philippines. Free flow of goods, services, investments, and skilled labor are expected to shape the structure of the economy, jobs skills, wages, and labor mobility in the region. ILO Country Office for the Philippines Director Lawrence Jeff Johnson said AEC has the potential to ensure sustained economic growth centered on decent and productive work. With the Philippines’ integration into AEC, it is also expected that labor migration will continue to climb. Priority areas for action in the Philippines as identified by the joint ILO-ADB study include:
• create better jobs, through industrial policies that target agro-industry for high-value farming products and more investment in irrigation, infrastructure and transport in rural areas; • enhance social protection programs, improve implementation of existing schemes, and enforce better disaster preparedness and response measures; • upgrade skills to meet shifting demand including effective implementation of the K-12; • improve protection for migrant workers to provide legal and social protection and social security coverage to Overseas Filipino Workers; and • strengthen collective bargaining to improve the productivity-wage link since better mechanisms can help translate the benefits of closer economic integration into shared prosperity.
Legend MAB PDI TPS
- Manila Bulletin - Philippine Daily Inquirer - The Philippine Star
Editor-in-Chief/Patricia May M. AbejoManaging Editor/Vic S. Soriano Associate Editor/Resty P. Par Writers/Jam H. Raposon, Hazel S. Dizon, Joanna D. Cruz, Airiz A. Casta, Kit S. Andaya Design/Layout/Ren C. Neñeria Circulation/Ric A. KagahastianTo subscribe, email: publications@dti.gov.ph