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December 17, 2012 1

December 17, 2012 Vol. 16, 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 DTI sees sustained economic expansion Inside DTI 1. Pre-Christmas Diskwento Caravan held in Bulacan 2. BOI conducts investment roadshow in Palawan

Consumer News 1. EcoWaste Coalition warns of toxic Christmas lights 2. FDA warns public before purchasing toys Features MSMEs get P700-M assistance for 1,000 SSF

Good News, Philippines! 1. Foreigners upgrade outlook on PHL 2. PHL beats India, China as top global shoring site 3. Foreign business missions proof of investor interest

ASEAN Watch 1. ASEAN scores several landmark agreements at 21st summit 2. ASEAN, China deepen commitments

MSME/OTOP News 1. MSMEs can list in stock market 2. MBBC promotes BMBE Law

DTI Direct

Business Alert 1. DTI expects lower electricity cost 2. Exporters stick to target growth

Statwatch

What’s New?


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Focus DTI sees sustained economic expansion

Vol. 16, No. 262

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he Department of Trade and Industry (DTI) expects the Philippine economy to remain robust for the next two years as investors open new plants and even look for expansion. “Our high growth rate should be sustained for at least the next two years as the numerous new plants and expansions being built now start operations,” DTI Secretary Gregory L. Domingo said. The National Statistical Coordination Board (NSCB) reported that the country’s gross domestic product (GDP) grew by 7.1% in the third quarter, beating expectations and making the Philippines the fastest growing economy in the Southeast Asian region. Domingo said the new plants being put up in the country and expansion plans being announced by manufacturing firms are expected to help support the economy’s growth in the coming years. Foreign firms are opting to set up plants or expand their existing operations here given the availability of a skilled workforce and low labor costs as compared to other countries. An improving business climate and confidence in the government is

likewise leading firms to locate here or expand. He said apart from new plants being set-up, the works on infrastructure projects are likewise expected to support strong growth in the coming years. The government is rolling out infrastructure projects under its public-private partnership (PPP) program as it seeks to achieve higher economic growth. Moreover, economic managers said consumption and infrastructure spending can sustain the country’s stellar growth well into next year. Department of Budget and Management (DBM) Secretary Florencio B. Abad said the outlook for the rest of the year was bright and would extend to 2013. “Next year, we expect the growth to continue because of the procurement reforms we adopted that will save us three to four months in project implementation,” Abad said. The DBM has streamlined procurement processes so that 2013 infrastructure projects could be bid out early, allowing them to award contracts by January and maximizing construction in the dry season. (TPS 11/29; BWD 12/02)

Inside DTI 1. Pre-Christmas Diskwento Caravan held in Bulacan

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he Department of Trade and Industry (DTI)-Bulacan held a Pre-Christmas Diskwento Caravan in Malolos on December 4, 2012. DTI-Bulacan Provincial Director Zorina D. Aldana said manufacturers of bread, processed meat, detergents, cooking oil, vinegar, canned goods, powdered milk, coffee, shampoo, and bath soap sold their goods at factory prices.

During the caravan, Technical Education and Skills Development Authority (TESDA) specialists provided free massage, hair cut, and foot spa while National Economic Research and Business Action Center (NERBAC) member-agencies such as Social Security System (SSS), Pag-IBIG, and Philhealth rendered their respective services. The Diskwento Caravan is a nationwide project by DTI in response


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December 17, 2012 3

to President Benigno S. Aquino III’s pronouncement to ease the people’s financial burden by providing alternative market for manufacturers and producers

2. BOI conducts investment roadshow in Palawan

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he Board of Investments (BOI) conducted a roadshow on the 2012 Investment Priorities Plan (IPP) on December 6, 2012 in Palawan City. The IPP forum is part of a series of roadshows being conducted by BOI in key cities in the country to motivate various stakeholders, partners, and other agencies to be an integral part of the IPP. The IPP highlights the priority sectors and generates awareness among the business communities on what possible investments to pursue. Investments in these sectors hope to address four critical areas, namely job creation, enhanced social services delivery, international competitiveness, and climate change mitigation and adaptation.

Good News, Philippines! 1. Foreigners upgrade outlook on PHL

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fter a 7.1-% third-quarter economic growth, more international institutions have upgraded their economic outlook on the Philippines to factor in a strongerthan-expected economic momentum. ING Philippines Chief Economist Joey Cuyegkeng said growth in the fourth quarter would likely be higher at 6% compared to an earlier expectation of 5.6%, bringing full-year growth to 6.3%. ING was previously expecting a full-year 2012 growth of only 5.9% for the Philippines. London-based think tank Capital Economics also expected the

especially for micro, small, and medium enterprises (MSMEs). Caravans that were conducted in Central Luzon last year generated total sales of over P500,000.

Anchored on the theme “A New Day for Investments: Coherent, Consistent, and Creative,” the IPP is strategically calibrated to strengthen investment generation. 2012 IPP Sectors • Agriculture/agribusiness and fishery • Creative industries/knowledge based services • Disaster prevention, mitigation, and recovery projects • Energy • Green projects • Hospital and medical • Infrastructure and public-private partnership (PPP) • Iron and steel • Mass housing • Motor vehicles • Research and development (R&D) • Shipbuilding • Strategic projects

Philippine economy to expand by 6.3% this year, upgrading its outlook from the previous forecast of 5%. Reflecting the economy's resilience this year, Capital Economics’ growth forecast was upgraded for 2013 to 4.5% from the previous 4%. Also, with the upcoming holiday spending and the start of election-related spending in the fourth quarter, full-year gross domestic product (GDP) looks set to exceed the upper end of the government's 5%-6% target, said New York-based think tank Global Source. (PDI 12/03)


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2. PHL beats India, China as top global shoring site

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he Philippines has again edged out India and China as the top global shoring location for corporations, the multinational real estate advisor Jones Lang LaSalle reported.

Jones Lang LaSalle Philippines Associate Director for Markets Lylah Fronda said they see first-hand that the Philippines continues to be the preferred choice for offshoring.

The ranking was based on the number of jobs created resulting from investment by corporations in shared service centers, customer contact centers, and technical support centers from 2008 to 2011.

“A highly-skilled English speaking population, coupled with a responsive real estate market with the right infrastructure creates a perfect mix for companies that understand the efficiency of going abroad for many business processes and call center operations,” Fronda said.

The Philippines attracted 115 projects over the reference period, creating over 72,000 jobs. India drew in 105 projects creating 64,000 jobs while China had 56 projects which resulted in 25,000 jobs.

3. Foreign business missions proof of investor interest

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he Philippines is attracting more interest from foreign businesspeople as shown by the doubling of the number of inbound business delegations from different countries this year, Department of Trade and Industry (DTI) Undersecretary for Trade and Investments Promotion Group (TIPG) Cristino L. Panlilio said. Panlilio said the country played host to only about 12 foreign business delegations last year. This year, he said the Philippines welcomed about 25 inbound business missions. “There is a 100-% increase or doubling of inbound missions. These missions consist of at least five companies, coming together and led by a confederation or association like

The Philippines recently ranked 87th among 141 countries in the Best Countries for Business List by Forbes, beating China and India at 96th and 97th, respectively. (TPS 12/03)

the Confederation of Italian Industries (Confindustria), Italy’s biggest association of manufacturing and services companies,” Panlilio said. He said this shows that the Philippines is keeping its spot in the world’s radar as the business destination of choice in Asia. The latest business mission was organized in cooperation with the Italian Embassy and the Philippine Embassy in Italy. Panlilio said this was the first mission in the 65 years of economic relations between the Philippines and Italy, and the first foreign trade mission to meet with the League of Cities of the Philippines, as well as the first foreign trade mission besides China to meet and deal with the Federation of Filipino-Chinese Chamber of Commerce and Industry (FFCCCI).


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MSME/OTOP News 1. MSMEs can list in stock market

2. MBBC promotes BMBE Law

December 17, 2012 5

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nvestment house Unicapital Inc. has been visiting the countryside to help promote the idea and erase the misconception that listing in the stock market is only for the big companies.

1. DTI expects lower electricity cost

In the past few months, however, some smaller companies have made their debut in the stock market. Among the mid-sized firms that listed with the PSE recently were Calapan Ventures Inc., Cirtek Holdings Philippines Corp., and East West Bank. (TPS 12/03)

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and growth,” Barangay Magallanes Business Association Charter President John Paul C. Tanchanco said.

he Makati Barangay Business Council (MBBC) promotes the Barangay Micro-Business Enterprise (BMBE) Law 2002 to foster business growth in the city.

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he Department of Trade and Industry (DTI) is expecting lower electricity cost in the coming months arising from strong peso and lower oil prices in the international market. DTI Secretary Gregory L. Domingo said when the oil price was at USD 110 per barrel, the pesodollar exchange was at P45.

2. Exporters stick to target growth

“Smaller companies are not really aware that they, too, can list in the PSE,” Arguelles said.

Unicapital Securities, Inc. President and Chief Executive Officer (CEO) Leonardo R. Arguelles Jr. said the company is on a mission to contribute in the development of the country’s capital market by perking up the interest of mid-sized enterprises to list in the Philippine Stock Exchange (PSE).

“Makati is the premier business district of the Philippines that hosts significant businesses. The BMBE law is something all businesses will be able to use to increase profitability

Business Alert

To date, Arguelles said PSI is 95-% big capital, or covers only firms with capitalization of over P1B.

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xporters are sticking to their growth targets for 2012 despite the government’s target revisions. “I guess, they [government] cut [projections] because they are being conservative,” Philippine Exporters Confederation President and

A business only qualifies as BMBE if the capital does not exceed P3M. The law exempts these businesses from income tax on income from operations and payment of minimum wage, and provide special credit window.

The local currency has so far appreciated by 10% to P41 level. Oil price has already declined by 15%, which means this would translate to a 25-% total reduction. “Services directly related to oil should be lower because of this 25-% reduction arising from the peso appreciation against the US dollar and lower cost in oil,” Domingo said.

Export Development Council (EDC) Private Sector Vice Chairman Sergio Ortiz-Luis Jr. said. In the Philippine Export Development Plan (PEDP), exports are expected to grow by 9%-10% this year and by 11% starting next year to hit USD 120B target by 2016.


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Consumer News 1. EcoWaste Coalition warns of toxic Christmas lights

2. FDA warns public before purchasing toys

Vol. 16, No. 266

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he EcoWaste Coalition Project Protect has discovered that Christmas lights containing lead and cadmium surpassing the allowed limits are allegedly being sold locally. Three out of five samples topped the 1,000 parts per million (ppm) limit for lead and two recorded a 100ppm limit for cadmium under

The RoHS restricts the use of cadmium, hexavalent chromium, lead, mercury and polybrominated biphenyls, and polybrominated diphenyl ethers. It also requires relevant electrical and electronic products to pass RoHS compliance.

he Food and Drugs Authority (FDA) has warned the public against buying plastic toys that might be hazardous to health.

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• • • •

FDA Acting Director Kenneth Hartigan-Go advised consumers to check for and avoid the following:

Features MSMEs get P700-M assistance for 1,000 SSF

the European Union (EU) Directive on Restriction of Hazardous Substances (RoHS).

Easily breakable into pieces With small detachable parts With sharp edges or points With electrical parts that could pinch or trap fingers, toes, and hair With parts put together by straight pins, sharp wires, or nails that are exposed and easily detached.

1.75-inch or less in diameter balls to prevent choking

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he Department of Trade and Industry (DTI) has allocated P700M for the establishment of 1,000 shared service facilities (SSF) in the regions to develop innovative and globally-competitive micro, small, and medium enterprises (MSMEs) through industry clustering.

These facilities would target cluster industries like coffee, coconut, and bamboo.

“This is probably DTI’s biggest initiative in 2013, providing direct assistance to small businesses,” DTI Secretary Gregory L. Domingo said, noting that the P700-M SSF would be part of the DTI budget for 2013.

The SSFs could be hosted by a private group, academe, cooperatives, or with the Department of Science and Technology (DOST).

SSFs, which are in the form of equipment and tools, would directly benefit small enterprises in the provinces. The SSFs are to be provided and to be shared among players in a clustered industry in a particular area and are meant to improve the processing of raw materials that would be used as common facilities for all those engaged in the production of these products.

Domingo said these should improve the efficiency and quality of local products. Some facilities could cost P10M that would be funded by the SSF fund.

Equipment and machineries for SSFs that are not locally available could be imported, but Domingo said they are scouting for local manufacturers who could come up with the right quality and price. The DTI has already received 700 proposals that would be screened. It will conduct a public bidding for the SSFs’ supply.


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ASEAN Watch 1. ASEAN scores several landmark agreements at 21st Summit

December 17, 2012 7

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elegations from Association of Southeast Asian Nations (ASEAN) members and their counterparts from Australia, China, Japan, South Korea, and the United States (U.S.) recently met in Cambodia for the holding of the 21st ASEAN Summit. The leaders launched negotiations which could see the formation of the world’s biggest regional free trade body. Known as the ASEAN Regional Comprehensive Economic Partnership, the initiative connects ASEAN’s free trade agreements (FTAs) with Australia, China, India, Japan, South Korea, and New Zealand into a major deal. ASEAN leaders also affirmed their commitment to see the ASEAN Economic Community (AEC) take shape by December 31, 2015. In the political arena, the highlights included the launch of the ASEAN Institute for Peace and Reconciliation.

2. ASEAN, China deepen Commitments

STATWATCH USD 120B PHL’s exports growth target in 2016

P700M Fund allocated by the Department of Trade and Industry (DTI) for the establishment of 1,000 shared service facilities (SSF) in the regions to develop innovative and globally competitive micro, small, and medium enterprises (MSMEs) through industry clustering

72,000 Jobs created from investments by corporations in shared service centers, customer contact centers, and technical support centers in PHL from 2008 to 2011

11% PHL’s annual exports

The Summit also agreed to locate the ASEAN Regional Mine Action Centre in Cambodia. The Phnom Penh meetings also saw the acceptance of the ASEAN Human Rights Declaration.

growth target from 2013 to 2016 under the Philippine Export Development Plan (PEDP)

Cambodia also handed over the chair to Brunei Darusallam, who will host the meetings in 2013. (PIA 11/21).

domestic product (GDP) growth in Q3 2012

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he Economic Ministers of Association of Southeast Asian Nations (ASEAN) and China signed two protocols to amend the Framework Agreement on Comprehensive Economic Cooperation between the ASEAN and the People’s Republic of China, and the Trade in Goods Agreement under the said Framework Agreement. The signing ceremony was held during the sidelines of the recently concluded 15th ASEAN-China Summit in Phnom Penh, Cambodia.

7.1%

Philippine gross

“These protocols signify ASEAN and China’s continuous effort in ensuring the smooth implementation of commitments under the Agreement and that the regional trade pact remains relevant to businesses,” said ASEAN Secretary-General Surin Pitsuwan. The Third Protocol to Amend the Framework Agreement on Comprehensive Economic Co-operation between the ASEAN and the People’s Republic of China effectively establishes the ASEANChina Free Trade Area (ACFTA) Joint


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Vol. 16, No. 268

Committee as the permanent body to oversee, supervise, coordinate, and review the implementation of the various Agreements related to the ACFTA.

Agreement on Comprehensive Economic Co-operation between the ASEAN and the People’s Republic of China, on the other hand, is aimed at facilitating the movement of goods within the FTA by providing for certain disciplines in the application of technical barriers to trade (TBTs) and sanitary and phyto-sanitary (SPS) measures.

The Protocol to Incorporate Technical Barriers to Trade and Sanitary and Phyto-sanitary Measures into the Agreement on Trade in Goods of the Framework

(ASEAN 11/19)

DTI Direct* Call Center Report SUMMARY OF CALLS Month-on-month CALL TYPE

Nov

Dec Jan’12 Feb’12 Mar’12 April’12 May’12 June’12 July’12 Aug’12 Sept’12 Oct’12 Nov’12

Business Name

1,874

1,458 3,665

Consumer Welfare

2,741

2,784

2,182

2514

2,243

1,889

1,606 1,419

1,493

1,515

2,128 2,235

1,917

10

670

966

742

860

653

670

895

990

2,629

Exports

5

5

4

7

6

7

4

5

12

3

4

2

3

Investments

3

0

0

1

0

6

3

0

2

2

1

3

0

20

15

12

10

5

19

18

8

14

13

30

29

33

858

891

1,050

592

4,610 4,580

4,494

2,153

MSMEs Others

1,194

941 1,157

1,179

1,251

878

1,080

1,023

920

TOTAL

3,766

3,385 5,580

4,798

4,699

3,762

4,514

4,269

5,466

CUMULATIVE CALL TYPE

Jan-Nov 12

% vs. Total

November 2012

October 2012

% Increase/ Decrease

Business Name

24,051

49.16

1,515

1,493

1.47

Consumer Welfare

13,729

28.06

10

1,918

-99.48

Exports

57

0.12

3

2

50.00

Investments

18

0.04

0

3

100.00

191

0.39

33

29

13.79

Others

10,799

22.23

592

1,050

-43.62

TOTAL

48,925

100.00

2,153

4,494

MSMEs

CALL RESOLUTION STATUS Jan-November 2012

Resolved 48,698 (100%)

Referred 227, ( 0%)

*The DTI Direct Call Center was established in November 2006 as part of the Department’s thrust to improve and simplify the delivery of its frontline services.

November 2012

Resolved 2,153 (100%)


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December 17, 2012 9

Title: Builders Directory Philippines 2013

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

Publisher : Ernst & Young Call Number : 06.08/ERN/2011

This book is a compilation of various directories related to construction such as associations, realty and developers, suppliers and contractors, complete with their addresses and products/services/line of business. It also contains an alphabetical index of products listing that the companies are engaged in.

This report provides insights into the minds of today’s most successful entrepreneurial leaders and discerns what makes them successful. It concludes with a model that describes the core of an entrepreneurial leader, which represents both the intrinsic and extrinsic characteristics of their mind set and abilities. The report also features perspectives from a survey of 685 entrepreneurial business leaders from around the world and is informed by a series of in-depth interviews with Ernst & Young Entrepreneur of the Year Award winners.

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Association of Southeast Asian Nations Business World Philippine Daily Inquirer The Philippine Star

Philippine Postal Permit No. PM-04-08

Publisher : High Rise Rich Ventures Inc. Call Number : 45 608/00.07/HIG/2013

Legend: ASEAN BWD PDI TPS

Title: Nature or Nurture? Decoding the DNA of the Entrepreneur

Editor-in-Chief: Anne L. Sevilla Managing Editor: Vic S. Soriano Associate Editor: Resty P. Par Writers: Jam A. Hourani, Elaine M. Lazaro, Emman R. Caleon Design/Layout: Ren C. NeneriaCirculation: Myrna V. delos Reyes To subscribe, email: publications@dti.gov.ph

Dataline 26 (2012)  

A bi-monthly digest of global and domestic industry trends and developments

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