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17 November 2014 1
17 November 2014 Vol. 19, No. 23
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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 up 13 spots in Ease of Doing Business Inside DTI 1. IPOPHL sets up effective IP enforcement 2. CITEM gets P98M for trade promo Good News, Philippines! 1. PEZA investments up 6.2% in 9 months 2. DTI sees USD 16.84B savings from lower vehicle imports 3. Toyota may shift Fortuner’s manufacturing hub to PHL 4. PHL seen to attract more FDIs
Consumer News 1. “No Return, No Exchange” not allowed 2. Adoption of payment cards increasing in PHL 3. DTI awards 3 companies for excellence Feature DTI, GIZ jointly implement ProGed ASIA Watch 1. Maybank predicts PHL to surpass ASEAN peers 2. PHL agribusiness ready for AEC 2015 Statwatch
MSMEs DTI turns over SSFs to Sarangani, Laguna SMEs Business Update 1. DTI eyes loan guarantees for exporters, relaunches Exponet 2. Improvement in Customs’ systems eyed
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Focus PHL up 9 spots in Ease of Doing Business
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he Philippines’ ranking rose by 13 notches to 95th spot in the 2015 World Bank “Doing Business 2015: Going Beyond Efficiency” report from 108th place last year out of 189 economies. “In the Philippines, improvements in resolving insolvency, getting electricity, registering property, and paying taxes enhanced the country’s ranking in 2015,” the World Bank (WB) said. The rankings are based on each economy’s distance to the frontier (DTF) scores for the 10 indicators used in the ranking to indicate improvements in the efficiency of regulatory procedures that support enterprise, trade, and exchange to facilitate growth and development.
that a builder needs to get a construction permit, compared to some countries which had a waiting time of up to 45 days. In getting electricity, the Philippines ranked 16th and a high DTF score of 90.59. It only takes 42 days and four procedures to avail of electricity. The cost, however, is high at 90.6% of income per capita. Ease of Doing Business Indicators
The DTF score “shows the distance of each economy to the “frontier” — which represents the best performance observed on each of the “Doing Business” indicators. In dealing with construction permits, the Philippines ranked 124th with a DTF score of 66.8%. A builder will have to wait 74 days and submit to 24 procedures, while the cost is about 1.2% of warehouse value. On the positive note, out of the 22 economies that require a zoning permit, the Philippines has a faster turnaround for approvals. It takes only five days to issue a zoning clearance
Starting a business Dealing with construction permits Getting electricity Registering property Getting credit Protecting minority investors Paying taxes Trading across borders Enforcing contracts Resolving insolvency
Highlights of PHL’s scorecard Ease of doing business Starting a business (rank) DTF score for starting a business Procedures (number) Time (days) Cost (% of income per capita) Minimum capital (% of income per capita)
161.0 67.2
Getting electricity (rank) DTF score for getting electricity Procedures (number) Time (days) Cost (% of income per capita)
16.0 90.6 4.0 42.0 90.6
16.0 34.0 16.6 3.6
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Inside DTI 1. IPOPHL sets up effective IP enforcement
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he Intellectual Property Office of the Philippines (IPOPHL) is establishing an effective system for IP enforcement and adjudication of cases. “We aim to make the IP system work better and faster for our IP right holders. The continuing push to improve IP enforcement and adjudication in the country is aligned with our bigger objective of having a demystified, democratized, and a development-oriented IP system,” IPOPHL Director General Ricardo R. Blancaflor said.
The improved IP enforcement and adjudication of cases were the main focus of the 4th Philippine Anti-Counterfeiting and Piracy Summit held last month. The IPOPHL has already put in place policies and measures to make it easier to enforce IP rights, including capacity-building programs in the judiciary that are rolled out in partnership with government and private stakeholders such as the Philippine Judicial Academy (PHILJA) and the Supreme Court (SC). Seminars and workshops are being conducted to enhance the skills of commercial court judges, prosecutors and investigators, and clerk of courts in handling IP cases. Commercial courts for the speedy disposition of cases involving violations of IP rights have also been designated. The IPOPHL has likewise established mechanisms for Alternative Dispute Resolution (ADR). As part of efforts to strengthen IPR protection in the country, the IPOPHL is also forging partnerships
with counterparts overseas to share best practices concerning copyright systems. Last September, the IPOPHL entered into a memorandum of understanding (MOU) with the Korea Copyright Commission (KCC) to share information on enforcement of copyrights. A similar partnership was also forged by the IPOPHL with Japan. As of end-August, counterfeit items seized by the National Committee on Intellectual Property Rights (NCIPR) reached P8.03B, 45% higher than the P5.55B in the same period in 2013. Blancaflor said the IPOPHL hopes to match the record-high P8.3B haul in 2011 this year. Last year, counterfeit items seized by the government were valued at P7.76B. National Committee on Intellectual Property Rights member agencies Chair: Department of Trade and Industry (DTI) Vice-Chair: Intellectual Property Office of the Philippines (IPOPHL) Members: Department of Justice (DOJ) Department of the Interior and Local Government (DILG) Bureau of Customs (BOC) National Telecommunications Commission (NTC) National Bureau of Investigation (NBI) Philippine National Police (PNP) Optical Media Board (OMB) National Book Development Board (NBDB) Food and Drugs Administration (FDA) Other agencies to be determined by the Committee Chair Source: Executive Order No. 736, Series 2008
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2. CITEM gets P98M for trade promo
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he Center for International Trade Expositions and Missions (CITEM) received P98.5M from the government for their operational requirements and participation costs in international trade events, the Department of Budget and Management (DBM) said.
administration and support for its trade promotion activities.
Of the total amount, P49.9M was allotted to the conduct of 60th Manila FAME and Design Week Philippines, the country’s annual design and lifestyle event that showcases locally made furniture and products in the world market, that was held last October 2014.
“We aren’t just working to meet our export growth targets. We also want to increase international interest in the Philippines as a reliable source for quality products and services. Events like these support our local industries, especially the SMEs as their efforts can help contribute to the country’s rising growth,” DBM Secretary Florencio B. Abad said.
This occasion provided opportunities for small and medium entreprises (SMEs), artisans, and manufacturers to feature their creations to the local and international audience. On the other hand, P37M was allotted to participate in other international events, while the rest will be for CITEM’s general
Good News, Philippines! 1. PEZA investments up 6.2% in 9 months
2. DTI sees USD 16.84B savings from lower vehicle imports
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nvestments registered with the Philippine Economic Zone Authority (PEZA) rose by 6.2% to P148.21B in January to September 2014 from P139.6B in the same period in 2013. “The investments came from manufacturing firms looking to set up facilities and expand operations. About 60% to 65% of the investments were made to fund expansion plans,”
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he Department of Industry (DTI) said the country could generate USD 16.84B or P757.8B worth of savings in foreign exchange (forex) requirements from the reduction of vehicle imports. The government is set to implement a five-year program to support the local automotive industry.
The government had released P60.9M to CITEM for the first quarter of this year; bringing the total amount released to P159.4M or 84% of the P190.4M appropriated from the 2014 General Appropriations Act.
CITEM, the export promotions arm of the Department of Trade and Industry (DTI), provides export-driven programs and spearheads official participation in overseas trade fairs. It also organizes signature trade events in the Philippines and other promotional activities in key markets abroad. PEZA Director-General Lilia B. De Lima said. PEZA is still sticking with its 10-% growth goal in total registered investments this year from last year’s P276.1B. De Lima is optimistic that the agency will meet the target as they expect more investments to come in the fourth quarter. At present, the bulk or 70% of vehicles currently being sold in the country are imported. “We expect huge reduction in forex requirements resulting from reduced completely built units imports as a result of the government’s program for the automotive industry,” DTI Industry Development Group
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(IDG) Assistant Secretary Rafaelita M. Aldaba said. Aldaba said the government issued the Comprehensive Automotive
3. Toyota may shift Fortuner’s manufacturing hub to PHL
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oyota Motor Corp. is studying the possibility of relocating its regional manufacturing hub for the Fortuner model from Thailand to the Philippines. Japanese car companies, including Toyota, plan to make the Philippines an alternative hub for automotive manufacturing, Philippine Chamber of Commerce
4. PHL seen to attract more FDIs
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he Philippines is expected to draw more foreign direct investments (FDIs) in the coming months after net inflows in the January-August period topped USD 4B, the Bangko Sentral ng Pilipinas (BSP) said.
“If foreign investors are just looking at the fundamentals, I think we should merit a higher share of FDIs because the macro-economic fundamentals continue to improve,” BSP Deputy Governor Diwa C. Guinigundo said.
MSME News DTI turns over SSFs to Sarangani, Laguna SMEs
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he Department of Trade and Industry (DTI) has launched shared service facilities (SSFs) for a footwear business in Liliw, Laguna, and a milk farm cooperative in Malungon, Sarangani. The SSF program intends to boost the competitiveness of micro, small, and medium enterprises (MSMEs) in the country by providing them the appropriate equipment to increase their production. “Sa tulong ng SSF, ang mga footwear manufacturers ay hindi na kinakailangan pang umupa ng mga makina sa paggawa ng kanilang sapatos,” DTI-Laguna Provincial
Resurgence Strategy (CARS) Program, which seeks to make the country a regional auto manufacturing hub.
and Industry (PCCI) President Alfredo Yao said. More than the incentives, automotive manufacturers are looking for stability of production in the future. Toyota expressed interest in setting up or expanding operations in the Philippines to manage and spread risks, Yao said.
For the whole 2013, FDIs net inflows amounted to USD 3.86B, up 20% from USD 3.22B in 2012, and also surpassing BSP’s projection of USD 2.1B for the year. Guinigundo said the government is also preparing for more infrastructure and power investments, adding that if the investors are in the country for the long haul, there is every reason for them not only to stay but to relocate here as well. (PDI 11/09)
Director Susan R. Palo said during the SSF turnover. Machineries Value /Equipment Band saw; P2.5M stitching; binding; roughing; glueing; shoe-lasting; and sole pressing machines Two units of milking machine
Beneficiaries Likhang Liliw Footwear Producers Cooperative
P85,000 Malalag per unit Cogon Bangkal Dairy Farmers Cooperative (MALCOBADAFCO)
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Business Update 1. DTI eyes loan guarantees for exporters, relaunches Exponet
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For her part, DTI-Sarangani Provincial Director Nenita Barroso emphasized the significance of the Public-Private Partnership (PPP) in the
implementation of the SSF program, noting that the private sector’s cooperation is potent in sustaining the use and housing the machinery and equipment.
he Department of Trade and Industry (DTI) is studying a proposal that would provide loan guarantees to exporting firms.
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in international events, the government would also like to help them in terms of increasing their access to capital.
DTI Industry Promotion Group (IPG) Undersecretary Ponciano C. Manalo Jr. explained that in the proposed scheme, an exporter or business that has no collateral can opt to pay a certain guarantee fee to any state-run guarantor such as the Small Business Corp (SB Corp.) to qualify for a loan.
Meanwhile, DTI has also relaunched the Export Assistance Network (Exponet) for the government to provide assistance on all export-related matters including information on procedures, documentation, and mediation of export trade-related complaints.
Manalo said aside from supporting exporters through trade fairs and helping them participate
2. Improvement in Customs’ systems eyed
Consumer News 1. “No Return, No Exchange” not allowed
Exponet started in 1984 and is envisioned to be a one-stop shop for exporters and would-be exporters.
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the processing of imports in wharfs to four hours.
During the Trade Facilitation and Customs Modernization plenary session conducted by the Philippine Chamber of Commerce and Industry (PCCI) last October, the BOC said it is planning on migrating to an electronic system to quicken
To avoid disorder such as what the agency experienced when donations for Yolanda victims came in, the agency began to codify rules into a single document. (TPS 10/23)
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be redressed for items they have bought and found to have an unknown defect.
he Bureau of Customs (BOC) looks to improve the agency’s system starting with shortening its imports processing time by next year.
he Department of Trade and Industry (DTI) reminded business owners that the posting of “No Return, No Exchange” notices or printing of the words in sales invoice or receipts is considered unlawful. DTI clarified in a Kapihan sa Baguio media forum that the publication of a “No Return, No Exchange” clause misleads customers into thinking that they will not
The agency also aims to become streamlined, predictable, and efficient by next year.
Republic Act No. 7394 or the Consumer Act of the Philippines directs manufacturers, distributors, and merchants to provide customers remedy for products they have bought that were unknowingly faulty and aid in case of any damages due to the defective product.
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Both businesses and customers are encouraged to be aware of and follow consumer laws, and to contact DTI for any concerns. Meanwhile, consumers were advised to be vigilant
2. Adoption of payment cards increasing in PHL
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Based on the study, four of 10 Filipinos own and use payment cards while half or 5 in 10 would like to discontinue the use of cash altogether.
The World Bank Development Research Group’s report “The Opportunities of Digitizing Payments,” together with the Better Than Cash Alliance and Bill and Melinda Gates Foundation, notes that some requirements to boost financial inclusion can be granted by progress and expansion of digital systems.
At the forefront of the growth in mobile banking are rural banks which enable them to overcome geographical obstacles. Rural and cooperative banks are also seizing the opportunity created by the
Philippine Quality Challenge (PQC) Seven categories
Management Planning Customer Focus Measurement and Data Management Workforce Focus Operations Focus Business Results
Coverage of consumers’ rights to redress includes the so-called “3 Rs” namely, repair, replace, and refund. hike in Filipino’s acceptance in automated teller machine (ATM) and card transactions.
se of payment cards is seeing a rise in the Philippines, according to the Visa Consumer Payment Attitudes Study 2014.
Advancements in mobile phone technology as well as the increase in use of mobile devices have also led to the growing number of cashless transactions, the report said.
3. DTI awards 3 companies for excellence
and mindful of products to be or already purchased.
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he Department of Trade and Industry (DTI) recognized Taters Enterprises, Inc. (TEI), Eurotel Hotel Makati, and Clinic Systems Inc. (Alabang Medical Clinic Branch) for their organizational improvement and performance excellence. The companies were acknowledged recently for their improved organization’s systems and practices during the 2014 Philippine Quality Challenge (PQC) Awarding Ceremonies and Forum. “We have been promoting this quality challenge, encouraging companies to stretch themselves and aspire for excellence because whether you like it or not,
In 2013, around 217M electronic transactions worth P348B were processed by the Philippine banking industry. Electronic banking in the Philippines is seen to be in a good path, with Filipinos’ progressively approving perspective on payment cards. (TMT 22/10)
the competition is here. That’s the nature of a globalized economy,” DTI Industry Development Group (IDG) Undersecretary Adrian S. Cristobal Jr. said. Cristobal, who also chairs the Board of Investments (BOI), said the DTI focuses on increasing the country’s competitiveness to grab more opportunities in the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC). The PQC Awardees were acknowledged for implementing systematic methods in some of the PQC Criteria’s requirements which came up with better and significant results.
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FEATURE DTI, GIZ jointly implement ProGed
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he Department of Trade and Industry (DTI) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) jointly implemented the Promotion of Green Economic Development (ProGED) Project in the country. ProGED, a development cooperation project funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), aims to improve the competitiveness of micro, small, and medium enterprises (MSMEs) by adopting environment-friendly and climate smart strategies. The project, which runs from January 2013 to December 2015, is piloted in the tourism value chain in the provinces of Bohol and Cebu and will be scaled up outside the pilot areas from the second year onwards. The project aims to pursue its objective through the dissemination of information and raising public awareness on Green Economic Development (GED), facilitating linkages between MSMEs and service providers and suppliers who can help them integrate greening in their operations, and working on policy both at the national and local levels. The ProGED Project, led by Project Manager Volker Steigerwald, builds on the gains and experiences
ASIA Watch 1. Maybank predicts PHL to surpass ASEAN peers
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he Philippine economy is projected to surpass the growth of its Association of Southeast Asian Nations (ASEAN) peers this year until 2015, the financial services group Maybank Kim Eng said. “The Philippines is expected to outperform its group with growth of 6.2% (2014) and 6.3% (2015),” Maybank said.
of the previous program jointly implemented by GIZ and the DTI, the Private Sector Promotion (SMEDSEP), which ended last December 2012. Promotion of Green Economic Development (ProGED) Project activities • Conduct of energy audits of businesses • Exhibit on energy efficient gadgets and low flow water systems • Formation of green economic development (GED) networks and training on upcycling of waste materials • Forum on climate change and GED • Information dissemination on energy efficiency • Matching local supplier with hotels and accommodations • Saving water • Solid and waste water management • Technical sessions on photovoltaic systems and bio digesters
Replication Regions/Provinces Region 3
Provinces
Central Luzon
Pampanga and Tarlac 4A CALABARZON Laguna and Cavite 4B MIMAROPA Palawan and and Occidental Mindoro 6 Western Visayas Negros Occidental and Capiz 7 Central Visayas Negros Oriental and Siquijor 13 Caraga Agusan del Norte and Surigao del Norte
The report was aligned with the World Bank (WB) and the Asian Development Bank (ADB)’s forecast. The World Bank’s forecasts for the country are 6.4% (2014) and 6.7% (2015), while the ADB predicts 6.2% (2014) and 6.4% (2015). “Vigilance by the private sector keeps the issue on the top of the minds of government officials and we believe
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this will help prevent a recurrence of the problem,” the bank stated. Maybank said the country’s advantage over other ASEAN regions is its demand-driven growth, noting that the Philippine banking system remains vigorous.
2. PHL agribusiness ready for AEC 2015
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he Philippine government drew a roadmap for the agribusiness sector in preparation for the 2015 Association of Southeast Asian Nations (ASEAN) Economic Community (AEC), Department of Agriculture (DA) Secretary Proceso J. Alcala said. “We will continue to invest heavily in farm mechanization, irrigation and financing to strengthen our capacity to compete in the ASEAN region,” Alcala said. He said the DA is encouraging farmers to avail themselves of the Sikat Saka’s services which offer crop insurance. The joint credit assistance program of the DA and the Land Bank of the Philippines (LBP) provides a secure market and financial mentoring. . In time for the AEC, the Philippine Rural Development Program (PRDP) was also approved. “This is a comprehensive program that would fully prepare the Philippines to become competitive along with other ASEAN markets. Local governments can maximize their agribusiness potentials with the PRDP as it covers activities from planting to processing to marketing,” Alcala said. (TMT 19/10)
STATWATCH P148.21B Investments registered with the Philippine Economic Zone Authority (PEZA) in January to September 2014, up 6.2% from P139.6B in the same period in 2013
P8.03B Value of counterfeit items seized by the National Committee on Intellectual Property Rights (NCIPR) as of end-August, 45% higher than the P5.55B in the same period in 2013
P98.5M
Budget allocation for the Center for International Trade Expositions and Missions (CITEM) for their operational requirements and participation costs in international trade events
95th Ranking of the Philippines in the 2015 World Bank “Doing Business 2015: Going Beyond Efficiency” report from 104th place last year out of 189 economies
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