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December 30, 2013 Vol. 18, No. 26
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A bi-monthly digest of global and domestic industry trends and developments. Published by the Trade and Industry Information Center, Department of Trade and Industry Manila, Philippines Tel. (632) 895.3611 Fax (632) 895.6487 To subscribe, email: publications@dti.gov.ph Online: http://www.dti.gov.ph
In this issue Focus BOI approvals up 18% Inside DTI DTI reviews PEDP 2014-2016 Good News, Philippines! 1. Q3 foreign investments surge 86.6% 2. PHL growth forecast hiked for 2014 3. Exports growth seen MSME News 1. DTI assesses MSMEs to avail of SSF Fund 2. DTI-R11, DCCCII to establish Young EntrepCenter Business Update 1. Manufacturing sector to generate 4M jobs
2. BOI may trim list of incentives in IPP 2014 3. Export industry stakeholders discuss FTA Consumer News DTI reiterates price freeze still in effect Features Diskwento Caravan held in areas hit by Yolanda ASEAN Watch 1. DTI to conduct more info drive on AEC 2. PHL, Taiwan tighten trade ties 3. PHL still APEC summit host Statwatch What’s New?
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Focus BOI approvals up 18%
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nvestment projects registered with the Board of Investments (BOI) in the first 10 months of the year grew by 18% from a year ago on the back of strong business confidence among local and foreign investors. BOI-approved investments in the January to October period rose to P314.3B, up from the P266.3B in the same period last year.
Top foreign sources of BOI approvals Jan-Oct 2013 (in Php Billion) Country United States South Korea Australia Netherlands Singapore
Amount 41.76 2.26 1.79 1.34 0.49
Local investments made up the bulk of approvals, or 84% of the total investment commitments amounting to P263.2B, 7% better than the P245.1B in the same period in 2012. Investment pledges from foreign sources also grew by 141% to P51.1B in the period from P21.2B in the comparable period last year. (TPS 11/30)
Top BOI approvals by sector Jan-Oct 2013 (in Php Billion) Sector
Amount
Electricity, gas, steam 252.8 and air conditioning supply Real estate activities 36.1 Transportation and storage 11.0 Manufacturing 5.1 Accommodation and food 4.5 services activities
Top BOI-approved projects Jan-Oct 2013 (in Php Billion)
Inside DTI DTI reviews PEDP 2014-2016
Projects
Investors
Two 150-MW coal-fired power plants 400-MW coal plant 405-MW coal plant 300-MW coal plant 300-MW coal plant
GNPower Limited Co. Pagbilao Energy Co. FDC Misamis Power Co. San Miguel Consolidated SMC Consolidated
T
he Department of Trade and Industry (DTI) is zeroing in on a more focused export plan as it reviews the Philippine Export Development Plan (PEDP) for 2014 to 2016 to achieve its USD 120-B export target by 2016. DTI Undersecretary for Trade and Investment Promotions Group (TIPG) Ponciano C. Manalo Jr. said the Department eyes to revive some sectors to contribute on the export revenue for the next three years. ”We’re in the process of reviewing (the PEDP) and reviving what we can. We want it to be very quantitative
Amount 41.2 39.9 31.9 25.8 25.5
and focused, which means the plan would be based on data, on facts,” Manalo said. Manalo said among the priority industries would be the furniture sector, food industry, and voice and non-voice services to balance the export of merchandise goods. The manufacturing industry, he said, will also be strengthened after the sector draws robust investments within the year. On the same note, DTI-Bureau of Export Trade Promotion (BETP) Director Senen M. Perlada said
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the DTI will prioritize leather and footwear sectors in line with reviving the manufacturing industry. Manalo said the target markets for these export products will still be the United States (U.S.)
Good News, Philippines! 1. Q3 foreign investments surge 86.6%
F
oreign investments approved in the third quarter of 2013 rose by 86.6% to P33.1B from P17.7B recorded in the same period last year. The National Statistical Coordination Board (NSCB) reported that foreign investments for the first nine months of 2013 reached P126.5B, up 114.8% from P58.9B in 2012. Manufacturing industry contributed the largest amount of committed foreign investments in the third quarter worth P11.2B, or 33.9% of total foreign investments during the review period. The investment pledges for the industry were registered
2. PHL growth forecast hiked for 2014
T
he Nomura Securities Global Economic Outlook has raised its 2014 gross domestic product (GDP) growth forecast for the Philippines to 6.7% from 6.2%, noting that reconstruction will spur economic activity in the months ahead. It pointed out that there would be a lot of reasons for the Philippine economy to grow even faster next year. “Financing will not be a constraint as the government has plenty of fiscal space, plus remittances from overseas workers are also rising,” it said. Nomura said investment spending is likely to continue to be a bigger contributor to growth.
as its economy has started to recover; Japan with its stable economic performance; and the Association of Southeast Asian Nations (ASEAN) market as the ASEAN integration will take place in 2015.
at P11.2B, 33.9% of total foreign investments during the quarter. Electricity, gas, steam, and air conditioning supply came in second with investment pledges valued at P9.5B, contributing 28.8%. This was followed by accommodation and food service activities, which accounted for 13.7% or P4.5B. (MAB 11/30) Top 3 prospective investing countries for foreign sources Q3 2013 Country
Pledges %share (in Php Billion)
British Virgin Islands Japan The Netherlands
10.3 5.9 4.4
31.1 18.0 13.2
“Still, we expect the current account surplus to remain solid, increasing further to 4% of GDP in 2014 from 3.8%, led by worker remittances as well as revenues from a booming business processing outsourcing (BPO) sector,” it said. In addition, it said it expects foreign direct investment (FDI) inflows will begin to pick up more substantially in 2014, directed into services-related sectors initially and, further out, manufacturing. “This is being supported by a marked improvement in the business climate, further progress in governance reforms, an investment grade rating and the prospect of liberalization of foreign ownership restrictions in certain sectors,” it said. (TPS 11/28)
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3. Exports growth seen
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erchandise exports will still likely grow this year despite an expected slowdown in electronics shipments, Department of Trade and Industry (DTI) Undersecretary for Trade and Investment Promotions Group (TIPG) Ponciano C. Manalo Jr. said. “Electronics export is flat, but our non-electronics export is very buoyant at 7%. If non-electronic goods keep its strength, I think we will be able to hit 3-5% growth in merchandise exports,” Manalo said. The NSO earlier reported that exports totalled USD 40.05B for the January-September period.
MSME News 1. DTI assesses MSMEs to avail of SSF Fund
T
he Department of Trade and Industry (DTI)-Region 6 has started assessing micro, small, and medium enterprises (MSMEs) in Iloilo to let the establishments avail themselves of shared service facilities’ (SSFs) fund.
Shipments of electronic products, which accounted for around 41.7% of total export earnings, climbed by 12.8% in September — the fastest in nine months — to USD 2.10B. (BWD 12/03) Top exports for September 2013
• • • • • • • •
Articles of apparel and clothing accessories Cathodes and sections of cathodes of refined copper Chemicals Ignition wiring sets and other wiring sets used in vehicles, aircraft and ships Metal components Semiconductors Other manufactures Other mineral products
by the provincial technical working group, DTI-Iloilo Provincial Director Wilhelm M. Malones said. Malones said the SSF can help these MSMEs to recover from their losses and reacquire equipment needed for their operations.
MSMEs could avail themselves of as much as P1M as approved
2. DTI-R11, DCCCII to establish Young EntrepCenter
T
he Department of Trade and Industry (DTI)-Region 11 and the Davao City Chamber of Commerce and Industry, Inc. (DCCCII) are set to establish a Young Entrepreneur Center in the city.
“This will serve as an incubation center for young entrepreneurs who may want to experiment on their products or perfect their existing business ideas,” DCCCII President Architect Daniel T. Lim said. Lim said there is a need to help young people become entrepreneurs
to become financially independent from their parents and establish a foothold in business arena. “By encouraging young people to engage in business, the country’s unemployment problems will be greatly reduced,” DTI-Davao City Director Teolulo T. Pasawa said. Meanwhile, DTI-Region 11 held free entrepreneurial seminar for the youth dubbed "Youth Ideas, Stirring into Economic Opportunities" that was tailor-fit for young businessmen.
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Business Update 1. Manufacturing sector to generate 4M jobs
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he manufacturing sector could create 4M new jobs if the government works with investors to revive low-cost labor-intensive industries and expand high-value goods production, foreign and local business groups said in a policy brief titled Manufacturing: Creating Millions of Better Jobs. By creating 500,000 new jobs in the manufacturing sector per year, its share in the country's gross domestic product (GDP) should likewise increase from just 21% today to 25% by 2016 and 30% by 2022, Samahan sa Pilipinas ng mga
Industriyang Kimika (SPIK) President Roberto F. Batungbacal said. The Philippines has a huge window of opportunity to grow the manufacturing sector and create new jobs given its trainable English-speaking workforce, increasing domestic demand, the Philippine Economic Zone Authority's (PEZA) success in creating economic zones, improved international image, and strong GDP growth, American Chamber of Commerce of the Philippines, Inc. (AmCham) Senior Advisor John Forbes said. (TPS 12/06)
Foreign and local business groups policy brief contributors
• American Chamber of Commerce of the Philippines, Inc. (AmCham) • Australian-New Zealand Chamber of Commerce of the Philippines (ANZCHAM) • Canadian Chamber of Commerce of the Philippines (CanCham) • Chamber of Furniture Industries of the Philippines (CFIP) • Confederation of Garment Exporters of the Philippines (CONGEP) • Employers Confederation of the Philippines (ECOP) • European Chamber of Commerce of the Philippines (ECCP) • Foreign Buyers Association of the Philippines (FOBAP) • Garment Business Association of the Philippines (GBAP) • Japanese Chamber of Commerce and Industry of the Philippines, Inc. (JCCIPI) • Korean Chamber of Commerce Philippines (KCCP) • Management Association of the Philippines (MAP) • Philippine Association of Paint Manufacturers, Inc. (PAPM) • Philippine Chamber of Commerce and Industry (PCCI) • Philippine Exporters Confederation, Inc. (PHILEXPORT) • Philippine Oleochemical Manufacturers Association (POMA) • Philippine Plastics Industry Association (PPIA) • Samahan sa Pilipinas ng mga Industriyang Kimika (SPIK) • Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI)
2. BOI may trim list of incentives in IPP 2014
T
he Board of Investments (BOI) may trim the list of activities entitled to incentives in the Investment Priorities Plan (IPP) for 2014, which is set to be released in the first quarter next year. Department of Trade and Industry (DTI) Undersecretary for Industry Development and Trade Policy Group (IDTPG) Adrian S. Cristobal Jr. said they will to try to identify the more strategic areas and different sectors that need to be promoted.
Cristobal, who also sits as BOI Managing Head, said while the 2013 IPP is basically a carryover of the 2012 list, there will be significant changes in the investment promotion blueprint for next year as both public and private sectors are going through a rigorous process of crafting the 2014 IPP. The BOI wants to design the 2014 IPP to cover three years to prevent the delay of the release of lists, which happened this year.
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The 2013 IPP was published only last month. DTI has also previously asked the Congress to address
3. Export industry stakeholders discuss FTA
T
he Department of Trade and Industry (DTI) conducted an information session in Davao City on December 12, 2013 to update stakeholders on the benefits of free trade agreements (FTAs). DTI-Davao Regional Director Marizon S. Loreto noted the significance of the information session as it briefed participants on improving export sales through
Consumer News DTI reiterates price freeze still in effect
I
n the wake of the government’s recovery efforts in typhoon-ravaged areas, the Department of Trade and Industry (DTI) reiterated that the price freeze order is still in effect. The price freeze is consequent to Presidential Proclamation No. 682 and the Price Act (Republic Act No. 7581), following the devastation caused by typhoon Yolanda. DTI reminded retailers that non-compliance entails a penalty of imprisonment of not less
Features Diskwento Caravan held in areas hit by Yolanda
T
he Department of Trade and Industry (DTI) brought the Diskwento Caravan to localities devastated by Typhoon Yolanda to ensure residents can enjoy their consumer rights to basic needs. “We brought Diskwento Caravan to Tacloban City to help the typhoon victims by making basic necessities accessible to them, and to replenish the local supply of goods in devastated areas,” DTI Secretary Gregory L. Domingo said.
the streamlining of incentive laws to repeal redundancy of perks to certain investments.
effective dealings with the countries where the Philippines have existing FTAs. The presentations focused on export opportunities in FTA partners and on increasing competitiveness, given the development in goods and services liberalization especially in the Association of Southeast Asian Nations (ASEAN) and preparing for ASEAN Economic Community (AEC). than five years but not more than 15 years; or a fine of not less than P5,000 nor more than P2M. The price freeze on basic commodities will last for 60 days except for LPG and kerosene, which will only last for 15 days effective from the publication of the notice. The basis for the prevailing price is the time of Yolanda’s landfall. DTI has already issued a list of the provincial prevailing prices of basic commodities. The Diskwento Caravan gave locals access to basic and prime commodities including non-relief good items, and even construction materials, at factory price discounted at 10% to 15%. Notably, it was the first time that construction materials were sold in a Diskwento Caravan to benefit heavily affected residents. Commerce in the areas was disabled when the typhoon struck which damaged properties,
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as well as stores, resulting in unstable pricing of goods which was only curbed by placing the province under price freeze. Items sold
• Detergent bar • Biscuits • Instant noodles • Bottled water • Medicine • Bread • Milk • Canned goods • Processed meat • Coffee • Rice • Condiments • Construction materials • Sanitary pad • Soaps • Cooking oil Diskwento Caravan stops
• Naval, Biliran • Borongan City, Eastern Samar • Baybay City, Leyte • Maasin City, Leyte • Ormoc City, Leyte • Tacloban City, Leyte • Calbayog City, Samar • Catbalogan City, Samar
ASEAN Watch 1. DTI to conduct more info drive on AEC
2. PHL,Taiwan tighten trade ties
T
DTI-Iloilo issued 17 show cause orders to merchandisers found selling at very high prices. The November 21 leg of the Diskwento Caravan garnered P1.89M in sales with 4,059 transactions while the December 5 to 6 earned P2.2M with 4,500 transactions. Some participating companies and brands
• • • • • • • • • •
Century Canning Corp. Dranix Inc. Firefly Gardenia Nestlé Procter & Gamble Purefoods Puyat Steel Unilever Zhanglin Marketing
Group (IDTPG) Ceferino S. Rodolfo said.
he Department of Trade and Industry (DTI) will strengthen the Association of Southeast Asian Nations Economic Community (AEC) education campaign in 2014 as part of preparations for the upcoming regional economic integration.
Alongside the fora, DTI will still organize the Doing Business in Free Trade Areas (DBFTA) sessions.
“We are intensifying our education campaign on the AEC through larger fora four times every month starting in the first quarter of 2014,” DTI Assistant Secretary for Industry Development and Trade Policy
The AEC will start in 2015. The said event can open the ASEAN region to a large market of opportunities. (TPS 12/01)
T
he Taiwan Trade Center was recently established in Manila to boost the trade and business relations between Taiwan and the Philippines. “We hope what will start as mere trading activities will eventually develop into long-term and deeper business partnerships with our local
DBFTA sessions have been conducted since the start of 2013 which mostly focused on AEC.
Filipino business community,” Department of Trade and Industry (DTI) Undersecretary for Trade and Investment Promotions Group (TIPG) Ponciano C. Manalo Jr. said. Philippine Economic Zone Authority (PEZA) Director General Lilia B. De Lima encouraged
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Taiwanese investors to visit and explore business opportunities in the Philippines. There are currently 60 Taiwanese companies in PEZA economic zones. Possible Taiwanese investors will certainly benefit from the Philippines’ rich supply of human resources and business-friendly policies. (BWD 12/05)
3. PHL still APEC summit host
P
resident Benigno S. Aquino III said thePhilippines will still host the Asia-Pacific Economic Cooperation (APEC) summit in 2015. More preparatory meetings in the ministerial and senior official levels will be held throughout the year in the run up to the summit. The APEC summit is said to be the biggest and most high-profile annual gathering of world leaders from 21-member economies. (TPS 12/04)
STATWATCH USD 120B PHL export revenue target by 2016
P314.3B
Investment projects registered with the Board of Investments (BOI) in January to October 2013, 18% up
from the P266.3B in the same period last year
P263.2B
BOI-approved local investments in January
to October 2013, 7% better
than the P245.1B in the same period in 2012
P51.1B BOI-approved foreign investments in January to October 2013, 141% better than
the P21.2B in the same period in 2012
USD 40.05B PHL’s total exports in January to September 2013
USD 2.10B Shipments of electronic products in September 2013
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What’s New?
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Title : EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches
Author: Key, Stephen Publisher: McGraw-Hill Call Number: 06.08/KEY/2011
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The book provides practical, step-by-step guidance to grow your business where you want it to go. It gives insights on how to become a successful entrepreneur leader that outlines a proven model for creating and sustaining a successful organization from the top, down. 306p
Philippine Postal Permit No. PM-04-08
(A synopsis of selected book acquisitions at the DTI-TIIC library)
December 30, 2013 9
Legend:
BWD MAB TPS
- Business World - Manila Bulletin - The Philippine Star
Entered as Third-Class Mail at the Makati Central Post Office under Permit No. PM-04-08 valid until 31 December 2013
Editor-in-Chief/Anne L. Sevilla Managing 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. Neneria Circulation/Myrna V. De Los ReyesTo subscribe, email: publications@dti.gov.ph