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29 December 2014 Vol. 19, No. 26
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A bi-monthly digest of global and domestic industry trends and developments. Published by the Knowledge Management and Information Service (KMIS) of the Department of Trade and Industrym (DTI) 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 Economy seen to top 7-% growth in 2015 Inside DTI PEZA mulls special visa unit Good News, Philippines! 1. Jobs in PHL’s copyright-based industries almost double 2. Businessmen more bullish in Q4 2014 MSMEs 1. DTI regional officials visit Japan 2. DTI awards SSFs to CALABARZON, SOCCSKSARGEN coops Business Update 1. Exports plan submitted 2. Employment, exports, and investments grow in economic zones
Consumer News 1. Price freeze imposed after typhoon “Ruby” 2. BOC creates tracker for Balikbayan Boxes 3. E-commerce rules to be reviewed Feature PHL aims to build inclusive growth thru APEC ASIA Watch 1. PHL urges APEC to help cottage industries 2. Visayas sugar must be ASEAN competitive 3. BIMP-EAGA to build cable project Statwatch What’s New
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Focus Economy seen to top 7-% growth in 2015
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igher infrastructure spending, cheaper crude oil, lower inflation rates, and preparations for the 2016 elections will spur economic growth to over 7% in 2015, the Department of Trade and Industry (DTI) said. DTI Secretary Gregory L. Domingo said the lower global oil prices, resulting from the reduced demand from slowing economic growth in Europe and China, will help drive growth as the Philippines is an oil-importing country. The declining fuel costs can lead to lower inflation.
Inside DTI PEZA mulls special visa unit
Authority (NEDA) Director-General Arsenio M. Balisacan cited more factors that will propel the country’s economy next year. “There are bright prospects to look forward to as the year ends. Our macroeconomic fundamentals remain strong,” Balisacan said. The country's strong export performance, he said, has been sustained for the year, especially for high-value products. The Philippine export growth is expected to hit 10% in 2014.
“Construction growth next year could be in double digits because our budget for infrastructure continues to grow, especially with the PPP [public-private partnership] projects,” Domingo said.
Balisacan said that since the second half of 2012, industry sector growth has outpaced that of the services sector, consistent with the government strategy to promote the country’s manufacturing industry.
“We have a goal to increase infrastructure spending from 2.5% of GDP [gross domestic product] to 5% until 2016. Maybe next year, it could hit 3.5% or 4% of GDP already,” he added.
“The services sector continues to be robust, especially the IT-BPM [information technology-business process management] sector,” he said.
On the same note, National Economic and Development
Balisacan also cited the growing household consumption which also indicates strong consumer confidence.
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Philippines through easing the process of filing visa applications by foreign nationals to invest and work in the country.
he Philippine Economic Zone Authority (PEZA) is planning to set up by the first quarter of 2015 a unit that will be tasked to approve the visa applications of foreign nationals employed by firms registered with the agency. PEZA Director General Lilia B. De Lima said the agency has consulted the Bureau of Immigration (BI) on PEZA’s request to be authorized to sign the visas of foreign nationals in economic zones. The move is intended to promote an enabling business environment in the
In particular, PEZA wants to lure more investments into the country’s manufacturing and agro-industrial sectors. As of end-October this year, PEZA-approved investments amounted to P153.94B, up 2.56% from the P150.10B recorded in the same period last year.
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Good News, Philippines! 1. Jobs in PHL’s copyright-based industries almost double
2. Businessmen more bullish in Q4 2014
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he Philippines’ employment generation in copyright-based industries has grown almost two-folds to 560,665 jobs in 2010, a study conducted by the Intellectual Property Office of the Philippines (IPOPHL) showed.
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previous study in 2006, which used 2009 as reference year.
With 2010 as the reference period, the study used the World Intellectual Property Organization (WIPO) Guide on Surveying the Economic Contribution of Copyright-Based Industries (CBIs) to update its
The survey showed that CBIs accounted for 7.34% of the country’s gross domestic product (GDP) growth in 2010, of which 5.11% was contributed by the broadcast industry. (MAB 11/28)
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usinessmen in the Philippines showed a more upbeat business sentiment in the country with a projected strong domestic demand in the last quarter, according to the latest results of the Bangko Sentral ng Pilipinas’ (BSP) Business Expectations Survey (BES).
Business optimism was further supported by expectations of accelerated rollout of publicprivate partnership (PPP) projects, favorable macroeconomic conditions in the country, sustained foreign investment inflows, and overseas Filipinos’ (OFs) remittances.
The overall confidence index (CI) rose to 48.3% in Q4 2014 from 34.4% in Q3 2014 – notably the highest quarter-on-quarter uptick since 2010.
The Q4 2014 BES was conducted during the period 1 October – 13 November 2014 among 1,518 respondent firms who were drawn from the combined list of the Securities and Exchange Commission’s (SEC) Top 7,000 Corporations in 2010 and Business World’s Top 1000 Corporations in 2012, consisting of 604 firms from the National Capital Region (NCR) and 914 firms from areas outside NCR, covering 17 regions nationwide. (MST 11/21)
Factors for rosy economic prospects Bangko Sentral ng Pilipinas’ Business Expectations Survey Q4 2014 • expected increase in consumer demand during the Christmas and palay harvest seasons; • sustained increase in orders and projects leading to higher volume of production; • expansion of businesses and new product lines; and • introduction of new and enhanced business strategies and processes
MSME News 1. DTI regional officials visit Japan
Notably, the study showed that employment in the country’s CBIs grew to more than half a million in 2010 from 300,000 jobs in 2009.
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he Japan International Cooperation Agency (JICA) arranged an official tour to Japan for regional officials of the Department of Trade and Industry (DTI) on 7-18 December 2014 to observe best practices of Japanese firms. The 21-member delegation was composed of Regional Directors and staff from 17 regional offices.
The visit was part of the “Support Systems and Initiatives of Japanese Government for Local Industry Development” under the Philippines’ National Industry Cluster Capacity Enhancement Project (NICCEP). NICCEP is a program designed to develop the country’s micro, small, and medium enterprises (MSMEs) through building alliances among relevant agencies and institutions
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for the implementation of business productivity and efficiency projects. The visit focused on building innovative industries and services
2. DTI awards SSFs to CALABARZON, SOCCSKSARGEN coops
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he Department of Trade and Industry (DTI) granted shared service facilities (SSFs) to a total of 54 micro, small, and medium enterprises (MSMEs) from Regions 4A and 12 this month.
South Sea Fishing Ventures Inc., and Asia Pacific Ventures Inc. Fishermen/Dependents MultiPurpose Cooperative (RSA FDMPC), which received P865,000 worth of sewing machines.
Various machineries and equipment worth P26M were awarded to different beneficiaries from the CALABARZON and SOCCSKSARGEN regions, particularly from the following areas:
Meanwhile, the DTI, in cooperation with the Department of Labor and Employment (DOLE), turned over SSF worth P424,000 to members of the Lupang Arenda Multipurpose Cooperative (LAMCO) in Taytay, Rizal. The equipment will be used to augment the group’s metal crafting business. About 397 members are expected to benefit from the project.
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Koronadal City General Santos City Cotabato City Tacurong City Kidapawan City South Cotabato Province Cotabato Province Sultan Kudarat Province Sarangani Province
Among the beneficiaries are General Santos City’s RD Tuna Ventures Inc.,
Business Update 1. Exports plan submitted
sector for the attainment of inclusive growth while strengthening economic cooperation between the Philippines and Japan. (MST 11/28)
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he Department of Trade and Industry (DTI) has submitted the proposed Philippine Exports Development Plan (PEDP) 2014-2016 to President Benigno S. Aquino III for his approval. The PEDP has set exports growth targets of 8% for 2014, 9% for 2015, and 10% for 2016. “We’re doing 9.9% already as of September this year because the non-electronics exports have grown 12% while the electronics exports at 6.2%,” DTI-Industry Promotions Group (IPG) Undersecretary Ponciano C. Manalo Jr. said.
SSF is a flagship project of the DTI that aims to boost the quality and productivity of MSMEs by addressing the gaps or bottlenecks in the value chain of priority industry clusters through the provision of processing or manufacturing equipment, tools, and machinery. The PEDP is counting on the performance of electronic products as well as the services sector to drive the country’s total exports growth this year. Revenues from outbound shipments of electronic products amounted to USD 18.73B in the January to September period this year, up 6.2% compared to USD 17.63B recorded in the same period last year. Aside from setting targets, the PEDP also seeks to: • Simplify domestic regulations for the movements of goods • Lower business transaction costs
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2. Employment, exports, and investments grow in economic zones
Accelerate reforms in modernization customs procedures Automate export procedures Harmonize export policies Raise the competitiveness of Philippine enterprises by improving their efficiency of services
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conomic zones (ecozones) in the Philippines saw an increase in employment, investments, and exports in the January to September period this year. Most significantly, growth in employment rose by 14.28% from 1.01M in January to September 2013 to 1.15M in the same period of 2014, attributed to locators engaged in business process management (BPM) services.
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Upgrade and reform quality of export goods Increase and diversify market penetration with the help of the Technical Education and Skills Development Authority (TESDA) and the Philippine Trade Training Center (PTTC)
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Exports of ecozone locators went up by 3.78% from USD 31.70B in the first nine months of 2013 to USD 32.90B for the same period this year. On the same note, investments in the January to October period this year totaled to P153.94B, 2.56% higher than the P150.09B posted in the comparative period in 2013. Making up 40% of investments were new projects particularly in the information technology (IT) sector. (MAB 11/24)
Compared to that of employment, both exports and investments also grew, albeit at a slower pace.
Consumer News
1. Price freeze imposed after typhoon “Ruby”
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ue to the devastations caused by typhoon “Ruby,” the Department of Trade and Industry (DTI) has enforced a price freeze for basic necessities in seven areas declared under state of calamity.
List of basic necessities
Areas under state of calamity due to typhoon “Ruby:”
Luzon Albay Camarines Sur Masbate Catanduanes Laguna (only San Pablo City)
Visayas Aklan Capiz Cebu Source: National Disaster Risk Reduction and Management Council (NDRRMC)
Bottled water Bread Candles Canned sardines Coffee Cooking oil Corn Detergent soap Fresh and dried fish and other marine products Fresh eggs Fresh fruits and vegetables Fresh milk Fresh pork, beef, poultry, and eggs Kerosene Liquified petroleum gas (LPG) Locally made instant noodles Processed milk Rice Root crops Salt Sugar
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Prices of grocery items classified as basic goods should not change for 60 days or up to the last week of January 2015. Violations of the price freeze will result in the issuance of a maximum
2. BOC creates tracker for Balikbayan Boxes
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o help overseas Filipinos (OFs) ensure that the packages they sent reach their families, the Bureau of Customs (BOC) launched a Balikbayan Box tracker on their website. “With this tracker, the public will not be given the runaround by people responsible for delivering their balikbayan boxes,” BOC Commissioner John P. Sevilla said. To track a package through the facility, one simply needs to have the Bill of Lading (BL) number and the name of the forwarders. The Department of Trade and Industry-Consumer Protection Group (DTI-CPG) approves of the BOC’s act and believes that the facility will encourage accredited domestic sea freight forwarders to conduct their dealings properly. Philippine sea freight forwarders accredited by DTI as of November 2014 numbered to 64, while blacklisted local and international freight forwarders as of 2 December 2014 numbered to 52. The DTI has investigated 40 complaints of loss, non-delivery, and pilferage of balikbayan boxes
3. E-commerce rules to be reviewed
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tipulations stated in the Consumer Act of the Philippines covering online trade or e-commerce are eyed for review by the Department of Trade and Industry (DTI) and the Department of Finance (DOF).
of P1-M fine or 10 years imprisonment for offenders. Producers and retailers in areas under state of calamity were instructed to continuously provide enough supply of goods. which resulted in a total of P2M in fines to be paid by the offending forwarders. Reports of mishandled packages came mostly from OFs from the Middle East and their families. Packages that arrive in the country starting September toward Christmas make-up 40% of around 5.5M balikbayan boxes shipped annually. Some 65% of all the balikbayan boxes that enter the country pass through the Manila International Container Port (MICP), while the rest through the ports of Manila South Harbor, Cebu, Davao, and Subic. Information available in the balikbayan box tracker
BL Number Country of Origin Current status Date cleared Date entry filed List of balikbayan box lodged with the BOC Name of foreign freight forward Name of local freight forwarder or broker Port of entry
Source: BOC
DTI wants to adjust the administrative fine as the present charge of P1,000 to P2,000 per case is not considered adequately prohibitive. The DTI received the highest number of complaints against online
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merchants in 2012, mostly regarding warranty and the No Return, No Exchange (NRNE) policy. DTI-Consumer Protection Group (CPG) Undersecretary Victorio Mario A. Dimagiba reminded online
FEATURE PHL aims to build inclusive growth thru APEC
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he Asia-Pacific Economic Cooperation (APEC) Summit, which the Philippines will host next year, will focus on “building inclusive economies” towards “building a better world,” President Benigno S. Aquino III said. The country aims to gain more foreign investments with the conduct of the summit and plans to support the small and medium enterprises’ (SMEs) integration in the global value chains. Department of Trade and Industry (DTI) Secretary Gregory L. Domingo encouraged local enterprises to invite their partners and other foreign companies to come and seek more opportunities in the Philippines. “In 2015, we invite you our partners to leverage on our hosting of APEC to bring your foreign counterparts
ASIA Watch 1. PHL urges APEC to help cottage industries
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he Philippines called on Asia-Pacific Economic Cooperation (APEC) economies to support more cottage industries to be able to help these industries and become part of the global value chain. “For Filipino SMES to succeed internationally, they need access to open, transparent, and efficient markets,” Department of Trade and Industry (DTI) Secretary Gregory L. Domingo said.
2. Visayas sugar must be ASEAN-competitive
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he Department of Trade and Industry (DTI) challenged the members of Western Visayas’ sugar industry to adapt
traders that under the Consumer Act, customers have the right to get a repair, replacement, or refund for defective products purchased, and that merchants who refuse to honor a customer’s rights will be penalized. (MST 11/20) here to see with their own eyes that now is the best time to invest in the Philippines,” Domingo said. The country is promoting to member-economies the improvement of its institutional support for the SMEs. “The Philippines will lead projects that will promote and harness synergistic linkages between SMEs and large firms, as well as to enable SMEs to benefit from regional economic integration,” Domingo said. Moreover, President Aquino noted that Asia-Pacific economies continuously have a relatively good level of economic growth. He mentioned that this year’s APEC leans on making certain that the Asia Pacific’s growth has tangible effects on the lives of the people.
Domingo said with all the ministerial meetings scheduled in the Philippines next year, the country will prioritize the SME agenda. The micro, small, and medium enterprises (MSMEs) in the country account for 99% of the commerce and 65% of the jobs generated by all types of business establishments.
to changes and be price-competitive in the Association of Southeast Asian Nations (ASEAN) market’s economic community.
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“The sugar industry has to improve its competitive side. To do this, there must be an increase of investments in machinery and equipment,” DTI Secretary Gregory L. Domingo said. The improvement in equipment and technology will create a better-yielding sugar varieties, Domingo added. He also mentioned that the muscovado sugar manufacturers should find alternative products. “It (muscovado) should be processed into something else that can create a demand for supply,” he added.
3. BIMP-EAGA to build cable project
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runei Darussalam, Indonesia, Malaysia, and the Philippines (BIMP) approved to implement vigorous infrastructure projects to improve trade and connectivity in the region.
The four countries’ officials made a pact during the recently concluded 23rd BIMP-East ASEAN Growth Area (EAGA) Senior Officials Meeting and 18th Ministers Meeting held on 19 November 2014 in Brunei Darussalam. The submarine terrestrial cable project will be managed by BEST Cable Corporation (BCC) Pte Ltd. It is expected to connect a high bandwidth cable system of over 5,092 km. between EAGA areas and Guam, United States. Brunei International Gateway Sdn and BCC signed a memorandum of agreement (MOA) which states the purchase of Asia-America Gateway and Southeast Asia-Japan Cable capacities for extension of the cable system.
STATWATCH P153.94B Investments approved by the Philippine Economic Zone Authority (PEZA) in January-October 2014, up 2.56% from the P150.10B recorded in the same period last year
USD 18.73B Revenues from the country’s exports of electronic products in January to September 2014,
6.2% compared to USD 17.63B recorded up
in the same period last year
1.15M
Jobs generated by PEZA-locators in JanuarySeptember 2014, a growth of 14.28% from 1.01M in January-September 2013
560,665
Jobs generated by the copyright-based industries in the Philippines in 2010
“The MOA is very significant to BIMP-EAGA agenda of physical connectivity and economic development,” Department of Trade and Industry (DTI) Undersecretary and Philippine Senior Official to BIMP-EAGA Prudencio Reyes Jr. said.
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What’s New? (A synopsis of selected book acquisitions at the DTI-Library)
29 December 2014 9
Title: Human development report 2014; sustaining human progress: reducing vulnerabilities and building resilience Publisher : United Nations Development Programme Call Number : 00 000/02.03/UNDP/ 2014
Title: Creative industries: reality and potential in Japan
Authors : Kakiuchi, E.; Takeuchi, K Publisher : National Graduate Institute for Policy Studies (GRIPS)
Annual report on human development conditions. It looks at the progress made towards reaching the goals of securing human development on a country-by-country basis. Statistics include national development indicators for 174 countries including demographic trends, educational levels, gender disparities, and macroeconomic indicators. The report also highlights the need for both promoting people's choices and protecting human development achievements. It takes the view that vulnerability threatens human development, and unless it is systematically addressed, by changing policies and social norms, progress will be neither equitable nor sustainable. 225 pages
This paper examines the current market situation of creative industries in Japan. It includes statistics and graphs used to estimate the actual volume of creative industries, and finds that most industries categorized as creative, with the exception of software and computer services, are not growing either in terms of sales or the number of employees. It compares the creative manufacturing sector with that of the creative services sector, as well as imports and exports trends. Also provides sectoral analysis on creative industries (traditional craft industries and contents industries, like the film industry) and discusses potential and new developments of creative industries in Japan. 20 pages
This report can also be accessed at: http://hdr.undp.org/sites/default/ files/hdr14-report-en-1.pdf
This paper can also be accessed at: http://www.grips.ac.jp/r-center/wpcontent/uploads/14-04.pdf
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Legend MAB MST
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Editor-in-Chief/Patricia May M. AbejoManaging Editor/Vic S. Soriano Associate Editor/Resty P. Par Writers/Hazel S. Dizon, Joanna D. Cruz, Airiz A. Casta, Kit S. Andaya Design/Layout/Ren C. Neñeria Circulation/Ric A. Kagahastian To subscribe, email: publications@dti.gov.ph